BILL ANALYSIS                                                                                                                                                                                                    



                                                                      AB 26


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          Date of Hearing:  January 12, 2016


                   ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS


                                Susan Bonilla, Chair


          AB 26  
          Jones-Sawyer - As Amended January 4, 2016


          SUBJECT:  Medical cannabis.


          SUMMARY:  Requires a licensee under the Medical Marijuana  
          Regulation and Safety Act (MMRSA) to institute and maintain a  
          training program to educate, inform, and train the licensee's  
          agents and employees regarding compliance with the MMRSA, and  
          requires the Bureau of Medical Marijuana Regulation (Bureau) to  
          approve and regulate the training programs.  


          EXISTING LAW: 


          1)Prohibits the possession, possession with intent to sell,  
            cultivation, sale, transportation, importation, or furnishing  
            of marijuana, except as otherwise provided by law.  (Health  
            and Safety Code (HSC) Sections 11357, 11358, 11359, and 11360)

          2)Prohibits prosecution of a patient or a patient's primary  
            caregiver, under the Compassionate Use Act of 1996 (CUA), an  
            initiative measure, for possessing or cultivating marijuana  
            for personal medical purposes of the patient upon the written  
            or oral recommendation or approval of a physician.  (HSC  
            Section 11362.5)









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          3)Provides that qualified patients, persons with valid  
            identification cards, and their designated primary caregivers  
            who associate in order to collectively or cooperatively to  
            cultivate marijuana, are not subject to criminal liability  
            solely on that basis, until one year after the Bureau begins  
            issuing licenses under the MMRSA.  (HSC Section 11362.775)

          4)Enacts the MMRSA, which provides for the state licensure and  
            regulation of commercial cannabis activities, including  
            cultivation, possession, manufacture, processing, storing,  
            laboratory testing, labeling, transporting, distribution, and  
            sale of medical cannabis or medical cannabis products.   
            (Business and Professions Code (BPC) Section 19300 et seq.)



          5)Establishes the Bureau within the Department of Consumer  
            Affairs (DCA), and requires the Bureau, the California  
            Department of Public Health (CDPH), and the California  
            Department of Food and Agriculture (CDFA) to administer the  
            MMRSA and promulgate regulations for implementation of the  
            act.  (BPC Section 19300 et seq.)     



          6)Vests in the DCA the sole authority to create, issue, renew,  
            discipline, suspend, or revoke licenses for medical marijuana  
            activities, including licenses for dispensaries, distributors,  
            and transporters. Prohibits a licensee from holding more than  
            one license except as specified.  (BPC Sections 19302.1,  
            19328)



          7)Allows the Bureau to convene an advisory committee to advise  
            the Bureau and licensing authorities on the development of  
            standards and regulations, including best practices and  
            guidelines to ensure qualified patients have adequate access  
            to MM and MM products.  (BPC Section 19306)








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          8)Provides that the actions of a licensee permitted pursuant to  
            both a state license and a license or permit issued by the  
            local jurisdiction following the requirements of the  
            applicable local ordinances, and conducted in accordance with  
            the MMRSA are not unlawful under state law.  (BPC Section  
            19317)

          9)Prohibits a person from engaging in commercial cannabis  
            activity without possessing both a state license and a local  
            permit or other authorization upon the date of implementation  
            of regulations by the licensing authority.  (BPC Section  
            19320)



          10)Requires an applicant for a state license to, among other  
            things, submit fingerprints to the Department of Justice, and  
            provide documentation, issued by the local jurisdiction,  
            certifying that the applicant is in compliance with all local  
            ordinances and regulations; evidence of the legal right to  
            occupy the proposed location; for applicants with 20 or more  
            employees, provide a statement that the applicant will enter  
            into, or already has entered into, a labor peace agreement; a  
            seller's permit number; and other specified information.  (BPC  
            Section 19322)



          11)Requires applicants seeking licensure to cultivate,  
            distribute, or manufacture medical cannabis, to include a  
            detailed description of the applicant's operating procedures  
            for all of the following as required by the licensing  
            authority: 1) cultivation; 2) extraction and infusion methods;  
            3) transportation procedures; 4) inventory procedures; and 5)  
            quality control procedures.  (BPC Section 19322) 










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          12)Requires the Bureau to deny an application if the applicant  
            or the premises do not qualify for licensure or fail to comply  
            with the MMRSA.  (BPC Section 19323)



          13)Allows licensing authorities to take disciplinary action  
            against a licensee for any violation of any provision in this  
            bill, and requires a licensing authority to inform the Bureau  
            upon suspension or revocation of a license.  (BPC Sections  
            19313, 19313.5)



          14)Provides that nothing shall be interpreted to supersede or  
            limit existing local authority for law enforcement activity,  
            enforcement of local zoning requirements or local ordinances,  
            or enforcement of local permit or licensing requirements.   
            (BPC Section 19315)



          15)Requires the CDPH to administer the provisions of the Act  
            related to the manufacturing and testing of medical cannabis  
            and to promulgate regulations governing the licensing of  
            manufacturers and testing laboratories. Requires the CDPH to  
            develop standards for the production and labeling of all  
            edible medical cannabis products.  (BPC Sections 19332, 19341)  




          16)Requires all licensed cultivators and manufacturers to  
            package all medical cannabis and medical cannabis products in  
            tamper-evident packaging and to use a unique identifier to  
            identify and track the product, and requires the product to be  
            labeled as specified.  (BPC Section 19326)









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          17)Requires all licensees holding cultivation or manufacturing  
            licensees to send all medical cannabis and medical cannabis  
            products to a distributor for quality assurance and inspection  
            by the distribution licensee and for batch testing by a  
            testing licensee prior to distribution to a dispensary.  (BPC  
            Section 19326)



          18)Requires the CDFA to administer the provisions of the MMRSA  
            related to the cultivation of medical cannabis; to create,  
            issue, and suspend or revoke cultivation licenses for  
            violations of the Act; and to promulgate regulations governing  
            the licensing of indoor and outdoor cultivation sites.  (BPC  
            Sections 19302.1, 19332)



          19)Requires the CDFA, in consultation with the Bureau, to  
            establish a track and trace program for reporting the movement  
            of medical marijuana items throughout the distribution chain  
            that use a unique identifier and secure packaging, and is  
            capable of providing specified information, including the  
            licensee receiving the product, the transaction date, and the  
            cultivator from which the product originates.  (BPC Section  
            19335)



          20)Requires the CDFA to create an electronic database containing  
            the electronic shipping manifests which shall include the  
            quantity, or weight, and variety of products shipped and  
            received; estimated and actual times of departure and arrival;  
            and license number and unique identifiers issued by the  
            licensing authority for all licensees involved in the shipping  
            process.    (BPC Section 19335)









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          21)Requires the Bureau to establish minimum security  
            requirements for the commercial transportation and delivery of  
            medical cannabis and products. (BPC Section 19334)



          22)Authorizes a county to impose a tax on the privilege of  
            cultivating, dispensing, producing, processing, preparing,  
            storing, providing, donating, selling, or distributing medical  
            cannabis or medical cannabis products by a licensee operating  
            pursuant to the MMRSA, as specified.  (BPC Section 19348)



          23)Provides for a General Fund or special fund loan, including  
            up to $10 million from the General Fund, to the Bureau to  
            support the initial regulatory activities authorized by MMRSA.  
             (BPC Section 19351)



          24)Requires the Bureau to establish a grant program to fund  
            activities by state and local law enforcement to remedy the  
            environmental effects of cannabis cultivation, payable from  
            fines and penalties charged pursuant to the MMRSA after all  
            outstanding loans for the program are repaid.  (BPC Section  
            19351)



          25)Directs the State Board of Equalization (BOE) to adopt a  
            system, in consultation with the CDFA, to report the movement  
            of commercial cannabis and cannabis products throughout the  
            distribution chain, which must not duplicate CDFA's track and  
            trace program.  (Revenue and Taxation Code Section 31020)










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          26)Requires, beginning March 1, 2023, and on or before March 1  
            of each following year, each licensing authority to prepare  
            and submit to the Legislature an annual report on the  
            authority's activities and post it on its Internet Web site,  
            as specified.  (BPC Section 19353)



          27)By January 1, 2017, requires the Division of Occupational  
            Safety and Health to convene an advisory committee to evaluate  
            whether there is a need to develop industry-specific  
            regulations related to the activities of licensed facilities.   
            (Labor Code Section 147.5)


          THIS BILL:


          1)Requires a licensee to institute and maintain a training  
            program to educate, inform, and train the licensee's agents  
            and employees regarding compliance with the MMRSA. 
          2)Requires the Bureau to adopt standards for the approval of  
            training programs and to be the sole state agency responsible  
            for approving and regulating the training programs.


          3)Prohibits the Bureau from approving a training program  
            provided or proposed to be provided by or through an  
            apprenticeship program approved by the Chief of the Division  
            of Apprenticeship Standards. 


          4)Requires an application for state licensure to include a  
            detailed description of the applicant's training program.


          5)Requires a state licensing authority to deny the application  
            of an applicant that does not have or revoke the license of a  








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            state licensee that fails to institute or maintain a program  
            approved by the Bureau.


          FISCAL EFFECT:  Unknown.  This bill is keyed fiscal by the  
          Legislative Counsel.   


          COMMENTS:


          Purpose.  This bill is sponsored by the  United Food and  
            Commercial Workers Union, Western States Council (UFCW)  .   
            According to the author, "It is essential that everyone  
            working in the medical marijuana industry be trained.  Whether  
            they are working with patients in a dispensary, cultivating at  
            farms or assisting in the manufacture and processing of  
            products for consumption, they must be given training.  These  
            workers, patients and the public need to know that those in  
            the medical marijuana industry are educated in the health,  
            safety and security standards set by the state." 


          The MMRSA.  The MMRSA consisted of three separate bills which  
            were enacted together on Sept 11, 2015, to bring licensure and  
            regulation to the medical marijuana industry nearly 20 years  
            after the passage of Proposition 215 in 1996, which legalized  
            the use of medical marijuana.  The bills created a  
            comprehensive state licensing system for the commercial  
            cultivation, manufacture, retail sale, transport,  
            distribution, delivery, and testing of medical cannabis.  In  
            addition, the bills affirm local control and require licensure  
            by both a local government and the state in order for a  
            licensee to operate.  The MMRSA went into effect on January 1,  
            2016, although licensure requirements will not go into effect  
            until the regulatory entities responsible for implementing the  
            act pass necessary regulations. 










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          Among other things, the MMRSA establishes the new Bureau under  
            the DCA, which is responsible for licensing and regulating  
            dispensaries, transporters, and distributors.  In addition,  
            the CDPH is responsible for regulating manufacturers, testing  
            laboratories, and the production and labeling of edible  
            medical marijuana products.  The CDFA is responsible for  
            regulating cultivation, and other state agencies, such as the  
            Department of Pesticide Regulation and the State Water  
            Resources Control Board, are responsible for developing  
            environmental standards.  
          Under the MMRSA, applicants seeking licensure to cultivate,  
            distribute, or manufacture medical cannabis are required to  
            include a detailed description of the applicant's operating  
            procedures for cultivation, extraction and infusion methods,  
            transportation process, inventory procedures, and quality  
            control procedures.  This bill would additionally require all  
            applicants, including dispensaries and testing laboratories,  
            to include a detailed description of a training program for  
            its agents and employees, to be approved by the Bureau, as a  
            condition of licensure.  Under the bill, the licensee would  
            institute and maintain the training program for its agents and  
            employees on compliance with the MMRSA.  The training program  
            must also include training on legal requirements, best  
            industry practices, occupational health and safety standards,  
            and company policies.  The Bureau would be required to adopt  
            standards to approve these training programs, and to regulate  
            these training programs. 


          Medical Marijuana Training and Education.  Currently, there is a  
            small offering of voluntary education and training for persons  
            in the medical marijuana industry, ranging from schools that  
            provide a complete curriculum and certification program on  
            cannabis, to individual seminars and courses about the  
            industry.  However, because this industry has not previously  
            been regulated, there are no statewide standards for what this  
            type of training should include. 









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          While this bill would impose mandatory training for a licensee's  
            employees and agents, at least one state, Colorado, has  
            adopted a similar albeit voluntary approach to training.   
            Under Colorado's Responsible Vendor Training Program, a  
            licensee may receive a responsible vendor designation if all  
            of its employees who sell or handle medical marijuana,  
            managers, and resident owners complete a medical marijuana  
            training program offered by a state approved provider.  While  
            the program is voluntary, the benefit of such designation is  
            that if a local or state licensing authority initiates an  
            administrative action against a designated licensee, the  
            licensing authority may consider the designation as a  
            mitigating factor when imposing sanctions or penalties on the  
            licensee.  The training programs are required to be at least  
            two hours long, and must have a core curriculum of relevant  
            statutory and regulatory requirements, including information  
            on proper identification of patients, age requirements, record  
            maintenance, liability, and enforcement.  The training is also  
            required to include information about marijuana's effects on  
            the human body based on type of marijuana product, the amount  
            of time to feel impairment, and health and safety standards.   
            Currently, Colorado has approved four state approved  
            responsible vendor training programs, with training programs  
            costing roughly $150 per person per course.


          Current Related Legislation.  AB 567 (Gipson) of the current  
            legislative session would prohibit mobile, vehicular, or  
            technology platforms that enable qualified patients or primary  
            caregivers to arrange for any delivery with a third party;  
            would provide that a dispensary that employs or uses the  
            services of any person under 21 years of age for the sale or  
            delivery of medical cannabis or medical cannabis products is  
            subject to suspension or revocation of certain state or local  
            licenses; and would require tax penalty amnesty programs, for  
            medical cannabis-related businesses, as provided. 










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          AB 1548 (Wood) of the current legislative session would impose a  
            tax in specified amounts on the distribution in this state by  
            a cultivator of marijuana to a licensed distributor, as  
            specified; require the licensed distributor to collect the tax  
            from the cultivator and remit it to the BOE; and require all  
            moneys, less refunds and costs of administration, to be  
            deposited into the Marijuana Production and Environment  
            Mitigation Fund, as specified. 
          
          Prior Related Legislation.  AB 266 (Bonta, Cooley, Jones-Sawyer,  
            Lackey, and Wood), Chapter 689, Statutes of 2015, enacted the  
            MMRSA for the licensure and regulation of medical marijuana  
            and established the Bureau within the DCA, under the  
            supervision and control of the Director of the DCA, and  
            required the Director to administer and enforce the provisions  
            of the Act.  AB 266 also required the CDFA to administer the  
            provisions of the act related to cultivation, and required the  
            CDPH to administer the provisions of the Act related to  
            manufacturing and testing of medical cannabis.  The bill also  
            required the BOE, in consultation with the CDFA, to adopt a  
            system for reporting the movement of commercial cannabis and  
            cannabis products.

          AB 243 (Wood), Chapter 688, Statutes of 2015, required the CDFA,  
            the DPR, the CDPH, the DFW, and the SWRCB to promulgate  
            regulations or standards relating to medical marijuana and its  
            cultivation, as specified, required various state agencies to  
            take specified actions to mitigate the impact that marijuana  
            cultivation has on the environment, and established the MMRSA  
            Fund.   
          SB 643 (McGuire), Chapter 719, Statutes of 2015, set forth  
            standards for a physician and surgeon prescribing medical  
            cannabis, required the Medical Board of California to  
            prioritize its investigative and prosecutorial resources to  
            identify and discipline physicians and surgeons that have  
            repeatedly recommended excessive cannabis to patients for  
            medical purposes or repeatedly recommended cannabis to  
            patients for medical purposes without a good faith  








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            examination, as specified, authorized counties to impose a tax  
            upon specified cannabis-related activity, and set forth  
            standards for the licensed cultivation of medical cannabis.



          ARGUMENTS IN SUPPORT: 

          The  United Food and Commercial Workers Union, Western States  
            Council (UFCW)  writes in support, "With the passage of the  
            Medical Marijuana Regulation and Safety Act, UFCW strongly  
            supports the creation of a robust program to train cannabis  
            workers in the industry at the [DCA].  Professional licensing  
            and safety standards are widely accepted norms throughout the  
            State of California for a variety of occupations and we should  
            do the same for workers employed in the cannabis industry.  
            Cannabis workers need vital knowledge of their product and how  
            best to serve the needs of people suffering from serious  
            diseases.  UFCW Western States Council is committed to support  
            a regulatory framework that will protect and enhance cannabis  
            workers and consumers?.Moreover, a "Cannabis Worker Training  
            Certification Program" will ensure the rights of workers are  
            protected, health and safety standards are maintained and  
            ongoing product knowledge and skills development are sustained  
            with consistency throughout the cannabis industry similar to  
            pharmacy laboratory technicians, nurse assistants, dental  
            hygienists, physical therapists and cosmetologists." 
          POLICY ISSUES FOR CONSIDERATION:  California has only recently  
          enacted the MMRSA, which goes into effect January 1, 2016.   
          Because there were previously no requirements for the population  
          to be licensed under the Act, no statewide standards have been  
          developed regarding compliance with the MMRSA, or best practices  
          for various parts of the industry.  While this bill would  
          require licensees to develop and have training programs for  
          their employees, it is unclear exactly what that training would  
          consist of, or how each licensee would be able to determine what  
          type of training would meet this requirement.  And, while the  
          Bureau would be required to develop standards to approve these  
          training programs, this approval process may be onerous for the  








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          Bureau. 


          As a result, the author may wish to consider specifying that the  
          Bureau work to develop minimum standards for training programs,  
          taking into account various license types.  For example,  
          dispensary licensees and employees may benefit from information  
          regarding the various types and amounts of active ingredients in  
          medical marijuana and how those ingredients affect patients,  
              while manufacturers may benefit from specialized information on  
          health and safety standards relating to production of edible  
          products.  The author may also wish to consider requiring the  
          Bureau to approve training course providers, as state regulatory  
          entities typically do for trainings and required courses in  
          other licensed categories, and authorizing licensees to  
          incorporate the use of training providers so that licensees do  
          not have to develop or provide their own training and  
          curriculum, and can instead rely on a third party to provide  
          such training.  In addition, while the bill currently requires  
          the Bureau to approve all training programs, the author may wish  
          to clarify that the Bureau or the appropriate licensing  
          authority, e.g., the CDFA or the CDPH, may also adopt standards  
          for and approve training programs in order to take advantage of  
          a licensing authority's expertise with regards to licensees and  
          standards under their jurisdiction.  Lastly, the author may wish  
          to specify which types of employees and agents are required to  
          complete this training, and include a timeframe for new hires to  
          complete this training. 


          AMENDMENTS: 


          The author has agreed to the following technical amendments:


          On page 10, line 4, strike "must" and insert "shall". 










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          On page 10, line 4, after "and" strike "must" and insert  
          "shall". 


          Add a coauthor.


          REGISTERED SUPPORT:  


          United Food and Commercial Workers Union, Western States Council  
          (sponsor) 




          REGISTERED OPPOSITION:  
          None on file. 




          Analysis Prepared by:Eunie Linden / B. & P. / (916) 319-3301