BILL ANALYSIS                                                                                                                                                                                                    Ó






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                                   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:








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          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  







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             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








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          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.







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          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,  







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            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.








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          "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  







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          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


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