BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 26 (Jones-Sawyer) - Medical cannabis
          
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          |Version: August 1, 2016         |Policy Vote: B., P. & E.D. 7 -  |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 8, 2016    |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.


          Bill  
          Summary:  AB 26 would require medical cannabis license  
          applicants with 20 or more employees to implement an employee  
          training program.


          Fiscal  
          Impact:  The fiscal estimates below are subject to a good deal  
          of uncertainty. Currently, none of the medical cannabis  
          licensing authorities have begun issuing licenses. Thus, the  
          number of entities that each licensing authority will ultimately  
          license is unknown. Similarly, the number of providers of  
          employee training programs required under the bill is unknown.  
          Therefore, the cost estimates to approve and oversee the  
          employee training program providers authorized in the bill is  
          subject to uncertainty. The costs to implement the bill's  
          requirements would ultimately be paid for by licensees or  
          third-party training program providers. Currently, the start-up  
          activities of licensing entities are being paid for out of a $10  
          million loan from the General Fund, until licensing revenues are  







          AB 26 (Jones-Sawyer)                                   Page 1 of  
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          received.

           One-time costs of $540,000 and ongoing costs of $500,000 for  
            the Bureau of Medical Cannabis to establish regulations,  
            review and approve employee training programs (either provided  
            by the licensee directly or by a third-party provider), and  
            audit dispensary, transporter, and testing laboratory  
            licensees to ensure that they are in compliance with the  
            requirement to provide an employee training program (Medical  
            Cannabis Regulation and Safety Act Fund).

           Ongoing costs of $220,000 per year for the Department of  
            Public Health to establish regulations, review and approve  
            employee training programs (either provided by the licensee  
            directly or by a third-party provider), and audit manufacturer  
            licensees to ensure that they are in compliance with the  
            requirement to provide an employee training program (Medical  
            Cannabis Regulation and Safety Act Fund).

           Ongoing costs up to $500,000 per year for the Department of  
            Food and Agriculture to establish regulations, review and  
            approve employee training programs (either provided by the  
            licensee directly or by a third-party provider), and audit  
            cultivator licensees to ensure that they are in compliance  
            with the requirement to provide an employee training program  
            (Medical Cannabis Regulation and Safety Act Fund).


          Background:  Under recently enacted law, the state will begin licensing and  
          regulating the medical cannabis industry for the first time. The  
          Bureau of Medical Cannabis Regulation will license and regulate  
          medical cannabis dispensaries, transporters, and testing  
          laboratories. The Department of Public Health will begin  
          licensing and regulating medical cannabis manufacturers. The  
          Department of Food and Agriculture will begin licensing and  
          testing cultivators. Each of those licensing entities is  
          currently in the process of developing their respective  
          licensing program and implementing regulations. Once regulations  
          have been adopted, entities in each of those areas  
          (dispensaries, cultivators, etc.) will be required to apply for  
          and receive a permit from their respective licensing entity to  
          remain in business.










          AB 26 (Jones-Sawyer)                                   Page 2 of  
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          Proposed Law:  
            AB 26 would require medical cannabis license applicants with  
          20 or more employees to implement an employee training program.
          Specific provisions of the bill would:
           On or after July 1, 2018, require any medical cannabis license  
            applicant with 20 or more employees to attest that the  
            applicant will implement an employee training program approved  
            by the licensing authority;
           On or after July 1, 2018, require a licensing entity to deny  
            an application if an applicant with 20 or more employees does  
            not attest that the applicant will implement an employee  
            training program approved by the licensing authority;
           Require  a licensee to implement an employee training program  
            that includes information on compliance with the requirements  
            of current law regarding medical cannabis regulation;
           Authorize a licensee to employ or contract with a third-party  
            provider to provide the employee training program;
           Require each licensing entity to establish standards for the  
            approval of employee training programs;
           Require the standards to prohibit the approval of an employee  
            training program provided by or through an apprenticeship  
            program approved by the Division of Apprenticeship standards;
           Authorize a licensing entity to approve a labor union as a  
            third-party provider, but not limit licensing entities to  
            approving only labor unions as third-party providers;
           Require a licensing entity to revoke the license of a licensee  
            with more than 20 employees that does not implement an  
            employee training program within one year of licensure;
           Require licensing entities to charge a fee to approve an  
            employee training program.


          Related  
          Legislation:  AB 266 (Bonta, Cooley, Jones-Sawyer, Lacky, and  
          Wood, Statutes of 2015), AB 243 (Wood, Statutes of 2015), and SB  
          643 (McGuire, Statutes of 2015) established the Medical  
          Marijuana (now Cannabis) Regulation and Safety Act, which  
          provides for the licensure and regulation of commercial medical  
          marijuana in the state.
          There are several followup bills to the legislation from last  
          year, including this bill, AB 1575 (Bonta), AB 2385  
          (Jones-Sawyer), AB 2672 (Bonilla), and SB 837 (Committee on  
          Budget and Fiscal Review).









          AB 26 (Jones-Sawyer)                                   Page 3 of  
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          Staff  
          Comments:  As noted above, the number of overall licensees under  
          the state's new system for resulting medical cannabis is  
          unknown. In addition, it is unknown how many licensees would  
          elect to create their own employee training program and go  
          through the process of having that program approved by a  
          licensing entity, versus simply contracting with a third-party  
          provider to provide the employee training. 
          The only costs that may be incurred by a local agency relate to  
          crimes and infractions. Under the California Constitution, such  
          costs are not reimbursable by the state.




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