BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 26 (Jones-Sawyer) - Medical cannabis ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 1, 2016 |Policy Vote: B., P. & E.D. 7 - | | | 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 8, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- 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 ? 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 ? 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 ? 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. -- END --