BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 26| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 26 Author: Jones-Sawyer (D), et al. Amended: 8/15/16 in Senate Vote: 21 SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 7-1, 6/27/16 AYES: Hill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski NOES: Gaines NO VOTE RECORDED: Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 63-1, 1/27/16 - See last page for vote SUBJECT: Medical cannabis SOURCE: United Food and Commercial Workers Union DIGEST: This bill 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. ANALYSIS: Existing law: AB 26 Page 2 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)) This bill: 1) Requires, beginning July 1, 2018, 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) Requires, beginning July 1, 2018, 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 or through an apprenticeship program approved by the Chief of AB 26 Page 3 the Division of Apprenticeship Standards. Those standards shall also prohibit employee training programs provided by licensees except when a licensee provides a training program to its own employees. 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 and for dealing collectively with cannabis employers. 7) States that a licensing authority shall not be limited to approving workplace training organizations as third-party providers of employee training programs, except that a licensing authority shall not approve a third party provider of an employee training program if the provider is a licensee, as specified. 8) 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. 9) 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. 10)Requires revenues collected to be deposited in the appropriate fee account within the Medical Marijuana Regulation and Safety Act Fund. 11)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. Background AB 26 Page 4 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 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: monitor and reduce environmental impacts of marijuana cultivation. State Water Resources Control Board: 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: develop pesticide use guidelines for the cultivation of medical marijuana. AB 26 Page 5 This bill requires license applicants with 20 or more employees to implement a training program to educate, inform, 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, but shall not be a separate licensee. However, this bill prohibits approval of employee training program provided by or through an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards. It is unclear why the exclusions from apprenticeship programs and other licensees exists; one would think that organizations and individuals that already provide training programs and are familiar with the cannabis business would be ideally suited for this new industry. The rationale for these provisions is unclear. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee, the fiscal estimates for this bill 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 are 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 received. One-time costs of $540,000 and ongoing costs of $500,000 for the Bureau to establish regulations, review and approve employee training programs (either provided by the licensee directly or by a third-party provider), and audit dispensary, AB 26 Page 6 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 DPH 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 CDFA 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). SUPPORT: (Verified8/12/16) United Food and Commercial Workers Union (source) California Labor Federation Central Coast Forest Association City of Santa Monica League of California Cities OPPOSITION: (Verified8/12/16) California Cannabis Industry Association 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. AB 26 Page 7 "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." ARGUMENTS IN OPPOSITION: The California Cannabis Industry Association (CCIA) writes, "The CCIA was supportive of AB 26 as amended in the Senate Business, Professions & Economic Development Committee, but strongly objects to more recent amendments taken in the Senate Appropriations Committee. These latest amendments intentionally and unfairly prohibit ALL licensed cannabis operators from applying to be third party training providers. "AB 26 now limits business opportunities for legitimate licensees, and creates an unfair advantage for labor organizations and independent out-of-state training program providers. It also deprives students and cannabis employees, participating in third party training programs, of learning from the most experienced professionals within the industry. "CCIA worked tirelessly last year to develop the Medical Marijuana Regulation and Safety Act (MMRSA), which established a framework to regulate and license medical cannabis operations in California. Our support of this effort was driven by our members' strong desire to be regulated like other industries in California and our stalwart commitment to ensuring the highest standards for our industry, including our workers. "For these reasons, we strongly object to the recent amendments, which would deny a cannabis operator the ability to conduct third party training. The CCIA is aware of no other profession in which third party training is prohibited from being conducted by a licensee if authorized by the State. In fact, when AB 26 was introduced in January, the CCIA was reassured by the sponsors that the intent of the bill was to create a similar training standard to those required by the California State Board of Barbering and Cosmetology (see press release, dated January 14, 2016). In that field, neither licensed manufacturers of products, cosmetologists, barbers, nor salon operators are prohibited from opening a new school for barbering or AB 26 Page 8 cosmetology or applying for an apprenticeship." ASSEMBLY FLOOR: 63-1, 1/27/16 AYES: Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, O'Donnell, Olsen, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NOES: Travis Allen NO VOTE RECORDED: Achadjian, Bigelow, Brough, Cooper, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones, Kim, Melendez, Nazarian, Obernolte, Patterson Prepared by:Sarah Huchel / Sarah Mason / B., P. & E.D. / (916) 651-4104 8/15/16 20:33:17 **** END ****