BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 26           Hearing Date:    June 27,  
          2016
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          |Author:   |Jones-Sawyer                                          |
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          |Version:  |June 23, 2016                                         |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Sarah Mason, Sarah Huchel                             |
          |:         |                                                      |
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                             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  







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            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  








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            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  








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            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  








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             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,  








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             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  








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             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 --
          








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