BILL ANALYSIS Ó SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Jerry Hill, Chair 2015 - 2016 Regular Bill No: AB 26 Hearing Date: June 27, 2016 ----------------------------------------------------------------- |Author: |Jones-Sawyer | |----------+------------------------------------------------------| |Version: |June 23, 2016 | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Sarah Mason, Sarah Huchel | |: | | ----------------------------------------------------------------- Subject: Medical cannabis SUMMARY: Requires, after July 1, 2018, Medical Marijuana Regulation and Safety Act (Act) license applicants with 20 or more employees to implement an employee training program to educate, inform, and train the licensee's agents and employees on compliance with the Act. Existing law: 1) Establishes the Bureau of Medical Marijuana Regulation (Bureau) within the Department of Consumer Affairs (DCA) to oversee the licensing and regulation of medical marijuana. (Business and Professions Code (BPC) § 19300, et seq.) 2)Defines a "licensing authority" as the state agency responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the license. (BPC § 19300.5 (w)) 3)Requires a license applicant with 20 or more employees to provide a statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement, as a condition of state licensure under the Act. (BPC § 19322 (a)(6)) 4)States that "employee" does not include a supervisor, and "supervisor" means an individual having authority, in the AB 26 (Jones-Sawyer) Page 2 of ? interest of the licensee, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment. (BPC § 19322 (a)(6)) This bill: 1)Beginning July 1, 2018, requires applicants with 20 or more employees to attest on an application that the applicant will implement an employee training program approved by the licensing authority within one year of licensure. 2)Beginning July 1, 2018, requires the licensing authority to deny an application of an applicant with 20 or more employees unless the applicant attests that the applicant will implement an employee training program approved by the licensing authority within one year of licensure. 3)Requires a licensee to implement an employee training program, or contract with a third party to provide an employee program, to educate, inform, and train the licensee's employees on compliance with the Act. 4)Requires an employee training program to include, but not be limited to, training on applicable statutory requirements, industry best practices, occupational health and safety standards, and workplace protections. 5)Requires each licensing authority to adopt standards for the approval of employee training programs. Such standards shall prohibit approval of an employee training program provided by a third party provider who operates an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards. 6)Authorizes a licensing authority to approve a workplace training organization as a third-party provider of employee training programs. Defines a "workplace training organization" as a labor union organization representing wage earners or salaried employees for mutual aid and protection AB 26 (Jones-Sawyer) Page 3 of ? and for dealing collectively with cannabis employers. 7)Requires a licensing authority to revoke the license of any licensee with 20 or more employees that fails to implement an employee training program within one year of licensure. 8)Requires each licensing authority to charge a fee for approving a training program provided by workplace training organization. Total fees assessed shall not exceed the reasonable regulatory costs for training program. Each licensing authority may adjust fees as needed, but no more than once per year, to generate sufficient revenue to cover the costs of training program approval. 9)Requires revenues collected to be deposited in the appropriate fee account within the Medical Marijuana Regulation and Safety Act Fund. 10)States that no reimbursement is required because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, or changes the definition of a crime. FISCAL EFFECT: This bill is keyed "fiscal" by the Legislative Counsel. According to the Assembly Appropriations Committee analysis dated January 21, 2016: This estimate is subject to significant uncertainty, as the number of licensees, the number of training programs, the complexity of the training, and numerous operational decisions are all unknown at this time. Staff estimates the Bureau may incur the following costs (funded through a previously authorized GF loan to the Medical Marijuana Regulation and Safety Act Fund, to be repaid through licensure fee revenue): 1)Developing training program standards and developing processes for application and review of training programs, would likely result in contract or staff costs in the hundreds of thousands of dollars. The bill requires approved training on substantive legal requirements, industry best practices, and AB 26 (Jones-Sawyer) Page 4 of ? occupational health and safety standards for numerous types of industries. 2)Costs for initial verification of training programs could range from minor too significant, depending on how many training programs apply for approval. If only a few larger training programs apply, costs would be lower because one approved training program would serve multiple licensees. If more licensees develop their own training programs, approval costs could be much more significant. If a large number of training programs apply, it may also require a more sophisticated Information Technology (IT) solution to track applicants. 3)To verify licensees are implementing training programs should be fairly minor and absorbable, assuming the check is paper-based. If on-site visits are required, costs would increase. Any ongoing costs for this activity will be recovered through license fees. COMMENTS: 1. Purpose. This bill is sponsored by the United Food and Commercial Workers Union . According to the Author's office, "There is currently no training program for employees in the medical marijuana industry. Even though these employees work with ill patients, deal with environmental impacts of cultivation, security issues, and manufacturing and processing of edible products for consumption. The employees need to be trained in dealing with patients, security and state and federal laws." 2. California's Medical Marijuana Regulatory Background. California began regulating medical marijuana with the passage of the Compassionate Use Act in 1996, which exempted patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana. In 2003, the Legislature authorized the formation of medical marijuana cooperatives-nonprofit organizations that cultivate and distribute marijuana for medical uses to their members through dispensaries. Most recently, the Medical Marijuana Regulation and Safety Act (Act) passed in 2015, which consisted of three separate bills enacted AB 26 (Jones-Sawyer) Page 5 of ? together to license and regulate medical marijuana AB 243 (Wood, Chapter 688, Statues of 2015); AB 266 (Bonta, Chapter 689, Statutes of 2015); and SB 643 (McGuire, Chapter 719, Statutes of 2015). These bills created a comprehensive state licensing system for the commercial cultivation, manufacture, retail sale, transport, distribution, delivery, and testing of medical cannabis. Medical marijuana cooperatives will be phased out under the Act and replaced by state licensed businesses. The Act went into effect on January 1, 2016, and licensure requirements will follow when the regulatory entities responsible for implementation pass necessary regulations. The Act distributes state responsibilities among six agencies: The Bureau: license and regulate dispensaries, transporters, and distributors. Department of Fish and Wildlife (DFW): monitor and reduce environmental impacts of marijuana cultivation. State Water Resources Control Board (SWRCB): regulate the environmental impacts of marijuana cultivation on water quality and instream flows. California Department of Food and Agriculture (CDFA): regulate medical marijuana cultivation and issue licenses to growers. Department of Public Health (DPH): develop and enforce regulations and standards for medical marijuana product manufacturers and testing laboratories. Department of Pesticide Regulation (DPR): develop pesticide use guidelines for the cultivation of medical marijuana. This bill requires license applicants with 20 or more employees to implement a training program to educate, inform, AB 26 (Jones-Sawyer) Page 6 of ? and train the licensee's agents and employees on compliance with the Act within one year of licensure. The licensee may either conduct the training by his or herself or hire a third party provider, which may be a union organization. However, this bill prohibits any third party provider of employee training programs from engaging in apprenticeship programs regulated by the Division of Apprenticeship Standards. It is unclear why this exclusion from apprenticeship programs exists; one would think that organizations that already provide training programs would be ideally suited for this new industry. The rationale for these provisions is unclear. 1. Related Legislation. AB 1575 (Bonta) of 2016 amends various provisions of the Medical Marijuana Regulation and Safety Act. ( Status : This bill is currently pending in the Senate Governance and Finance Committee.) SB 837 (Committee on Budget and Fiscal Review) of 2016 makes a number of changes to the Act. Some changes are inconsistent with AB 1575, and some duplicate. ( Status : This bill is currently pending in the Assembly Budget Committee.) 2. Previous Legislation. AB 266 (Bonta, Cooley, Jones-Sawyer, Lackey, and Wood, Chapter 689, Statutes of 2015) enacted the Act for the licensure and regulation of medical marijuana, established the Bureau within the DCA, required the CDFA to administer the provisions of the act related to cultivation, required the DPH to administer the provisions of the Act related to manufacturing and testing of medical cannabis and required BOE 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 DPH, the DFW, and the SWRCB to promulgate regulations 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 Act Fund. SB 643 (McGuire, Chapter 719, Statutes of 2015) established AB 26 (Jones-Sawyer) Page 7 of ? standards for the prescription of 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 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. 3. Arguments in Support. The United Food and Commercial Workers Union (UFCW) writes, "With the passage of the Act, UFCW strongly supports the creation of a robust program to train cannabis workers in the industry at the California 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." SUPPORT AND OPPOSITION: Support: United Food and Commercial Workers Union (Sponsor) (1/25/2016 version): California Labor Federation Central Coast Forest Association City of Santa Monica League of California Cities Opposition: None on file as of June 22, 2016. -- END -- AB 26 (Jones-Sawyer) Page 8 of ?