Amended in Assembly April 20, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 34


Introduced by Assemblybegin delete Memberend deletebegin insert Membersend insert Bontabegin insert and Jones-Sawyerend insert

December 1, 2014


An act to amend Sections 2220.05, 2242, and 2264 of, and to add Chapter 18 (commencing with Section 26000) to Division 9 of, the Business and Professions Code, to add Section 23028 to the Government Code, to amend Section 11362.775 of the Health and Safety Code, and tobegin delete amend Section 1155.7 of, and toend delete add Sectionsbegin delete 1158.5end deletebegin insert 147.5end insert and 3094begin delete to,end deletebegin insert toend insert the Labor Code, relating to medical cannabis, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 34, as amended, Bonta. Medical cannabis regulation and enforcement.

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, authorizes the use of marijuana for medical purposes.

Existing law enacted by the Legislature, commonly referred to as the Medical Marijuana Program Act (MMPA), requires the establishment of a program for the issuance of identification cards to qualified patients so that they may use marijuana for medical purposes without arrest or prosecution under specified state law, and requires the establishment of guidelines for the lawful cultivation of marijuana grown for medical use.

This bill would enact the Medical Cannabis Regulation and Control Act and would establish the Division of Medical Cannabis Regulation and Enforcement within the Department of Alcoholic Beverage Control.

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This

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begin insertTheend insert bill would, 180 days after the division posts a specified notice on its Internet Web site, make those provisions of the MMPA that prohibit prosecution of qualified patients, persons with valid identification cards, and designated primary caregivers who associate in California, collectively or cooperatively, to cultivate marijuana for medical purposes, inapplicable to licensees. The bill would, thereafter, permit a dispensary to provide patients with medical marijuana and medical marijuana products obtained only from persons licensed under this bill.

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This

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begin insertTheend insert bill would require the division to license persons to engage in the various aspects of commercial cannabis activity, as defined. The bill would designate as peace officers the Director of the Department of Alcoholic Beverage Control and persons employed by the division to administer and enforce its provisions. The bill would prescribe requirements for the issuance, renewal, suspension, and revocation of a mandatory commercial license and would authorize the assessment of related fees.

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This

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begin insertTheend insert bill would not preclude a city or county from adoptingbegin delete local ordinances, consistentend deletebegin insert a local ordinance, not consistentend insert with this bill, thatbegin delete regulateend deletebegin insert regulatesend insert the location, operation, or establishment of abegin delete licensee.end deletebegin insert licensee or prohibits commercial cannabis activity within its jurisdiction.end insert The bill would require state agencies to collaborate with local agencies, and would require local agencies to, within the scope of their jurisdiction, assist state agencies in the enforcement ofbegin delete this chapter.end deletebegin insert the bill.end insert By imposing these enforcement duties on local agencies,begin delete thisend deletebegin insert theend insert bill would impose a state-mandated local program.

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This

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begin insertTheend insert bill would establish the Medical Marijuana Regulation Fund with separate accounts for fees and for penalties, and would require deposit of fees and penalties into their respective accounts within the fund. The bill would continuously appropriatebegin insert moneys within theend insert feesbegin delete deposited into the fundend deletebegin insert accountend insert to the division for the purposes of administering the program.

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This

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begin insertTheend insert bill would authorize the division to establish a regulation and enforcement assistance grant program and would authorize the Department of Transportation to conductbegin delete research, and develop protocols,end deletebegin insert research and develop protocolsend insert regarding determining whether a driver is operating a vehicle under the influence of marijuana to assist law enforcement agencies. The bill would make the fines and penalties deposited into the fund available, upon appropriation by the Legislature, for funding these programs.

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This

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begin insertTheend insert bill would require thebegin delete division to,end deletebegin insert division,end insert as soon as practicable,begin insert to allow qualified applicants for licensure to apply for and receive a provisional license to engage in commercial cannabis activity and toend insert adopt emergency regulationsbegin delete for the issuance of provisional licenses for persons who within the 12-month period preceding January 1, 2016, were engaged in medical cannabis activities, as prescribed, and would require the division to begin accepting applications for provisional licenses commencing January 1, 2016.end deletebegin insert for that purpose.end insert

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This

end delete

begin insertTheend insert bill would require the division to adopt regulations necessary for the implementation and enforcement of this bill in consultation with prescribed state agencies relating to environmental, agricultural, consumer protection, worker safety, and food and product safety requirements. The bill would authorize the division to enter into interagency agreements to pay, from fees deposited into the fund, the associated costs incurred by these state agencies.

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This

end delete

begin insertTheend insert bill would establish a cannabis employee certification, training, and apprenticeshipbegin delete program.end deletebegin insert program for cultivation sites and dispensaries, as defined.end insert The bill would require the Division of Labor Standards Enforcement to maintain and enforce minimum standardsbegin delete ofend deletebegin insert for theend insert competency and trainingbegin insert of employeesend insert and to certify cannabis employees. The bill would require the Division of Labor Standardsbegin delete Enforcement to establish a cannabis curriculum certification committee to establish educational curriculum standards and to oversee educational providers of cannabis curriculum.end deletebegin insert Enforcement, by January 1, 2017, to convene an advisory committee to evaluate whether there is a need to develop industry-specific regulations related to the activities of licensed facilities. The bill would require the advisory committee to present to the Occupational Safety and Health Standards Board its findings and recommendations for consideration by the board, and would require the board, by July 1, 2017, to render a decision regarding the adoption of industry-specific regulations.end insert

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This

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begin insertTheend insert bill would require a licensee to keep various records in connections with commercial cannabis activities and would prescribe requirements for making records available to the division and any state or local agency. The bill wouldbegin delete excludeend deletebegin insert prohibit the disclosure ofend insert certain patient and caregiver informationbegin delete from disclosure to the public. With regard to limitations contained in this bill of the public’s right to access certain patient information, the bill would make findings for the purposes of Section 3 of Article I of the California Constitution, regarding the interest to be protected and the need for protecting that interest.end deletebegin insert pursuant to the California Public Records Act.end insert

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This

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begin insertTheend insert bill would declare that it does not apply to, or diminish the protections granted to, a patient or primary caregiver acting pursuant to the Compassionate Use Act of 1996 and would exempt these parties from the application of the act.

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This

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begin insertTheend insert bill would declare that the actions of a licensee or provisional licensee, its employees, and its agents that are within the scope of a valid license are not unlawful under state law, as specified. The bill would provide similar state law immunity for a property owner who allows his or her property to be used by a licensee or provisional licensee.

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This

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begin insertTheend insert bill would require the division to work in conjunction with law enforcement entities throughout the state to implement and enforce the rules and regulations regarding medical cannabis and to take appropriate action against businesses and individuals that fail to comply with the law.

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This

end delete

begin insertTheend insert bill would authorize the director of the division, and prescribed local entities, to bring an action to enjoin violations. The bill would require the division to establish a digital database and to allow on its Internet Web site to permit state and local law enforcement agencies to verify licenses.

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This

end delete

begin insertTheend insert bill would make certain violations of its provisions a crime, thereby imposing a state-mandated local program.

(2) Existing law, the Medical Practice Act, establishes the Medical Board of California and sets forth its powers and duties, including, but not limited to the licensing and regulation of physicians and surgeons. Existing law sets forth the conduct that would constitute unprofessional conduct for a physician and surgeon, including, but not limited to, prescribing certain drugs without an appropriate examination or medical indication. Existing law generally makes a violation of these provisions a misdemeanor.

This bill would specify that recommending marijuana to patients withoutbegin delete a good faithend deletebegin insert an appropriate priorend insert examination andbegin insert aend insert medicalbegin delete reason or recommending marijuana for nonmedical purposesend deletebegin insert indicationend insert is unprofessional conduct.

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This

end delete

begin insertTheend insert bill would provide that specified acts of recommending marijuana without a good faith examination are among the types of cases that should be given priority for investigation and prosecution by the Medical Board of California, as described above. The bill would deem as unprofessional conduct a physician and surgeon being employed by, or entering into an agreement with, a medical cannabis licensee to provide recommendations for medical marijuana.

By broadening the definition of a crime, the bill would impose a state-mandated local program.

(3) Existing law authorizes the board of supervisors of a county and the governing body of a city to impose various taxes, including a transactions and use tax at a rate ofbegin delete 0.25%,end deletebegin insert 0.125%,end insert or a multiple thereof, if approved by the required vote of the board or governing body and the required vote of qualified voters, and limits the combined rate of transactions and use taxes within a city or county to 2%.

This bill would authorize the board of supervisors of a county to impose, by ordinance, a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing cannabis or cannabis products, including a transactions and use tax at any rate specified by the board. The bill would authorize the tax to be imposed for either general or specific governmental purposes. The bill would require a tax imposed pursuant to this authority to be subject to any applicable voter approval requirement.

(4) This bill would specify that its provisions are severable.

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(5) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

end insert
begin insert

This bill would make legislative findings to that effect.

end insert
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(5)

end delete

begin insert(6)end insert The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P6    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) The people of California enacted the Compassionate Use
4Act of 1996 to ensure that seriously ill Californians have access
5to marijuana for medical purposes. The Compassionate Use Act
6of 1996 urged the state and federal governments to implement a
7plan to provide for the safe and affordable distribution of medical
8marijuana to all patients in medical need of the drug.

9(b) Under federal law, marijuana is a Schedule 1 drug. Its
10placement in that schedule is based upon a finding that marijuana
11has no currently accepted medical use. That finding, if correct at
12the time it was made, is no longer accurate. California, exercising
13its traditional power to regulate the practice of medicine, has
14determined that marijuana has a significant role to play.

15(c) California, acting alone, is powerless to change federal law
16and to correct this misunderstanding in federal law about the role
17that marijuana can and does play in the practice of medicine.
18However, federal enforcement authorities have recognized that in
19states that have authorized marijuana use and have enacted strong
20and effective regulatory and enforcement systems to control the
21cultivation, distribution, sale, and possession of marijuana, conduct
22in compliance with those regulatory and enforcement systems is
P7    1less likely to threaten federal priorities and, thus, less likely to
2require federal enforcement intervention (See: Memorandum For
3All United States Attorneys--Guidance Regarding Marijuana
4Enforcement, by James M. Cole, Deputy Attorney General, August
529, 2013).

6(d) The purpose of this act is to establish for California a robust
7medical cannabis regulatory and enforcement system to ensure
8that conduct in compliance with California’s medical marijuana
9laws does not threaten the federal priorities as set forth in the James
10M. Cole memorandum,begin delete andend deletebegin insert and,end insert therefore, does not require federal
11enforcement intervention.

12

SEC. 2.  

Section 2220.05 of the Business and Professions Code
13 is amended to read:

14

2220.05.  

(a) In order to ensure that its resources are maximized
15for the protection of the public, the Medical Board of California
16shall prioritize its investigative and prosecutorial resources to
17ensure that physicians and surgeons representing the greatest threat
18of harm are identified and disciplined expeditiously. Cases
19involving any of the following allegations shall be handled on a
20priority basis, as follows, with the highest priority being given to
21cases in the first paragraph:

22(1) Gross negligence, incompetence, or repeated negligent acts
23that involve death or serious bodily injury to one or more patients,
24such that the physician and surgeon represents a danger to the
25public.

26(2) Drug or alcohol abuse by a physician and surgeon involving
27death or serious bodily injury to a patient.

28(3) Repeated acts of clearly excessive prescribing, furnishing,
29or administering of controlled substances, or repeated acts of
30prescribing, dispensing, or furnishing of controlled substances, or
31recommending marijuana to patients for medical purposes, without
32a good faith prior examination of the patient and medical reason
33therefor. However, in no event shall a physician and surgeon
34prescribing, furnishing, or administering controlled substances for
35intractable pain consistent with lawful prescribing, including, but
36not limited to, Sections 725, 2241.5, and 2241.6 of this code and
37Sections 11159.2 and 124961 of the Health and Safety Code, be
38prosecuted for excessive prescribing and prompt review of the
39applicability of these provisions shall be made in any complaint
40that may implicate these provisions.

P8    1(4) Sexual misconduct with one or more patients during a course
2of treatment or an examination.

3(5) Practicing medicine while under the influence of drugs or
4alcohol.

5(b) The board may by regulation prioritize cases involving an
6allegation of conduct that is not described in subdivision (a). Those
7cases prioritized by regulation shall not be assigned a priority equal
8to or higher than the priorities established in subdivision (a).

9(c) The Medical Board of California shall indicate in its annual
10report mandated by Section 2312 the number of temporary
11restraining orders, interim suspension orders, and disciplinary
12actions that are taken in each priority category specified in
13subdivisions (a) and (b).

14

SEC. 3.  

Section 2242 of the Business and Professions Code is
15amended to read:

16

2242.  

(a) Prescribing, dispensing, or furnishing dangerous
17drugs as defined in Section 4022 without an appropriate prior
18examination and a medical indication, constitutes unprofessional
19conduct. Prescribing or recommending marijuana to a patient for
20a medical purpose without an appropriatebegin delete in-personend delete prior
21examination and a medicalbegin delete indication, or recommending marijuana
22for a nonmedical purpose,end delete
begin insert indicationend insert constitutes unprofessional
23conduct.

24(b) No licensee shall be found to have committed unprofessional
25conduct within the meaning of this section if, at the time the drugs
26were prescribed, dispensed, or furnished, any of the following
27 applies:

28(1) The licensee was a designated physician and surgeon or
29podiatrist serving in the absence of the patient’s physician and
30surgeon or podiatrist, as the case may be, and if the drugs were
31prescribed, dispensed, or furnished only as necessary to maintain
32the patient until the return of his or her practitioner, but in any case
33no longer than 72 hours.

34(2) The licensee transmitted the order for the drugs to a
35registered nurse or to a licensed vocational nurse in an inpatient
36facility, and if both of the following conditions exist:

37(A) The practitioner had consulted with the registered nurse or
38licensed vocational nurse who had reviewed the patient’s records.

P9    1(B) The practitioner was designated as the practitioner to serve
2in the absence of the patient’s physician and surgeon or podiatrist,
3as the case may be.

4(3) The licensee was a designated practitioner serving in the
5absence of the patient’s physician and surgeon or podiatrist, as the
6case may be, and was in possession of or had utilized the patient’s
7records and ordered the renewal of a medically indicated
8prescription for an amount not exceeding the original prescription
9in strength or amount or for more than one refill.

10(4) The licensee was acting in accordance with Section 120582
11of the Health and Safety Code.

12

SEC. 4.  

Section 2264 of the Business and Professions Code is
13amended to read:

14

2264.  

The employing, directly or indirectly, the aiding, or the
15abetting of any unlicensed person or any suspended, revoked, or
16unlicensed practitioner to engage in the practice of medicine or
17any other mode of treating the sick or afflicted which requires a
18license to practice constitutes unprofessional conduct. Employment
19by, or other agreement with, a mandatory commercial licensee
20acting pursuant to the Medical Cannabis Regulation and Control
21Act or a dispensary to provide recommendations for medical
22marijuana constitutes unprofessional conduct.

23

SEC. 5.  

Chapter 18 (commencing with Section 26000) is added
24to Division 9 of the Business and Professions Code, to read:

25 

26Chapter  18. Medical Cannabis Regulation and Control
27

27 

28Article 1.  General Provisions
29

 

30

26000.  

(a) This chapter shall be known, and may be cited, as
31the Medical Cannabis Regulation and Control Act.

32(b) It is the intent of the Legislature in enacting this chapter to
33provide for the statewide regulation of the commercial cannabis
34activity and the enforcement of laws relating to commercial
35cannabisbegin insert activities without preempting city or county ordinances
36regulating or banning theseend insert
activities. This chapter is an exercise
37of the police powers of the state for the protection of the safety,
38welfare, health, peace, and morals of the people of the state.

39

26001.  

Without limiting the authority of a city or county
40pursuant to Section 7 of Article XI of the California Constitution,
P10   1or any other provision of law, and subject to that authority, the
2state shall have the exclusive right and power to regulate and
3license persons for the cultivation, manufacture, transportation,
4sale, and other related activities regarding medical cannabis within
5the state. In the exercise of these rights and powers, the state and
6each of its agencies are hereby deemed not to be engaged in
7activities requiring licensure under this chapter.

8

26002.  

For the purpose of this chapter:

9(a) “Department” means the Department of Alcoholic Beverage
10Control.

11(b) “Director” means the Director of the Department of
12Alcoholic Beverage Control, unless the context otherwise clearly
13indicates.

14(c) “Division” means the Division of Medical Cannabis
15Regulation and Enforcement within the department.

16(d) “Cannabis” means all parts of the plant Cannabis sativa,
17cannabis indica, or cannabis ruderalis, whether growing or not;
18the seeds thereof; the resin, whether crude or purified, extracted
19from any part of the plant; and every compound, manufacture, salt,
20derivative, mixture, or preparation of the plant, its seeds, or resin.
21It does not include the mature stalks of the plant, fiber produced
22from the stalks, oil or cake made from the seeds of the plant, any
23other compound, manufacture, salt, derivative, mixture, or
24preparation of the mature stalks (except the resin extracted
25therefrom), fiber, oil, or cake, or the sterilized seed of the plant
26which is incapable of germination. “Cannabis” also means
27marijuana as defined by Section 11018 of the Health and Safety
28Code as enacted by Chapter 1407 of the Statutes of 1972.

29(e) “Commercial cannabis activity” means any cultivation,
30possession, manufacture, processing, storing, laboratory testing,
31labeling, transporting, distribution, or sale of cannabis or cannabis
32 product, except as set forth in subdivision (b) of Section 26052.

33(f) “Medical cannabis product,” “medical marijuanabegin delete product”end delete
34begin insert product,”end insert or “cannabis product” means any product containing
35cannabis, including, but not limitedbegin delete toend deletebegin insert to,end insert concentrates and
36extractions intended to be sold for use by medical marijuana
37patients in California pursuant to the Compassionate Use Act of
381996 (Proposition 215).

39(g) “Manufactured cannabis” means raw marijuana that has
40undergone a process whereby the raw agricultural product has
P11   1been transformed into a concentrate, an edible product, or a topical
2product.

3(h) “Cannabis concentrate” means manufactured cannabis that
4has undergone a process to concentrate thebegin delete THC,end deletebegin insert cannabinoidend insert
5 active ingredient, thereby increasing the product’s potency.

begin delete

6(i) “Terahydrocannabinol” or “THC” means a crystalline
7compound that is the physiologically active ingredient of cannabis.

end delete
begin insert

8(i) “Cannabinoid” means a chemical compound that is unique
9to and derived from cannabis, also known as phytocannabinoid.

end insert

10(j) “Edible cannabis product” means manufactured cannabis
11that is intended to be used, in whole or in part, for human
12consumption, including, but not limited to, chewing gum.

13(k) “Topical cannabis” means manufactured product intended
14for external use.

15(l) “Identification program” means the universal identification
16certificate program for licensees.

17(m) “Mandatory commercial license” or “license” means a
18mandatory commercial license issued pursuant to Article 3
19(commencing with Section 26040).

20(n) begin delete“licensee” end deletebegin insert“Licensee” end insertmeans any person licensed under this
21chapter to engage in commercial cannabis activity related to
22medical cannabis as set forth in this chapter.

23(o) “Dispensary” means abegin delete licensee that dispensesend deletebegin insert retail location
24that distributesend insert
cannabis or medical cannabisbegin delete products.end deletebegin insert products
25and is owned and operated by a licensee for these activities
26pursuant to this chapter.end insert

27(p) “Testing and labeling” means a labeling and quality
28assurance plan that addresses all of the following:

29(1) Potency.

30(2) Chemical residue.

31(3) Microbiological contaminants.

32(4) Handling, care, and storage.

33(5) Date and location of cultivation, processing, and
34manufacturing.

35(q) “Fund” means the Medical Cannabis Control Fund
36established pursuant to Section 26028.

37(r) “Person” means any individual, firm, partnership, joint
38venture, association, corporation, limited liability company, estate,
39trust, business trust, receiver, syndicate, or any other group or
P12   1combination acting as a unit and includes the plural as well as the
2singular number.

begin insert

3(s) “Cultivation site” means a location that grows cannabis or
4medical cannabis products and is owned and operated by a licensee
5for these activities pursuant to this chapter.

end insert
begin insert

6(t) “Nursery” means a licensee that produces only clones,
7immature plants, seeds, and other agricultural products used
8specifically for the planting, propagation, and cultivation of
9medical cannabis.

end insert
10

26010.  

This chapter does not, nor does Article 2 (commencing
11with Section 11357) and Article 2.5 (commencing with Section
1211362.7) of Chapter 6 of Division 10 of the Health and Safety
13Code, prevent a city or county from doing any of the following:

14(a) Adopting local ordinancesbegin delete consistentend deletebegin insert inconsistentend insert with this
15chapter thatbegin delete regulateend deletebegin insert do the following:end insert

16begin insert(1)end insertbegin insertend insertbegin insertRegulateend insert the location, operation, or establishment of a
17licensee or any person that cultivates, processes, possesses, stores,
18manufactures, tests, transports, distributes, or sells medical
19cannabis.

begin insert

20(2) Prohibit commercial cannabis activity within their
21jurisdiction.

end insert

22(b) Thebegin delete civilend deletebegin insert administrative, civil,end insert or criminal enforcement of
23the ordinances described in subdivision (a).

24(c) Establishing a fee or tax for the operation of a licensee within
25its jurisdiction.

26(d) Enacting and enforcing other laws or ordinances pursuant
27to the authority granted by Section 7 of Article XI of the California
28Constitution.

29 

30Article 2.  Administration
31

 

32

26020.  

(a) The Division of Medical Cannabis Regulation and
33Enforcement is hereby established within the Department of
34Alcoholic Beverage Control. The division shall be administered
35by a person who is appointed by the director. The division shall
36administer this chapter.

37(b) No person shall engage in commercial cannabis activity
38unless licensed by the division under this chapter. The division
39shall issue licenses to applicants to engage in commercial cannabis
40activity pursuant to this chapter.

P13   1(c) The division shall adopt regulations as needed to implement
2that licensing program as set forth in Article 3 (commencing with
3Sectionbegin delete 26040).end deletebegin insert 26040) within one year following the establishment
4of provisional licenses, pursuant to Section 26054. The regulations
5shall not limit the authority of a city or a county pursuant to Section
67 of Article XI of the California Constitution, Section 26010 or
726060, or any other law.end insert
The regulations shall, in addition, do all
8of the following:

9(1) Establish a scale of application, licensing, and renewal fees,
10based upon the cost of enforcing this chapter, as follows:

11(A) The division shall charge each applicant for licensure or
12renewal an application or renewal fee that shall be calculated to
13cover the costs of processing the application or renewal. This fee
14may vary depending upon the varying costs associated with
15approving the application or renewal related to the varying
16activities covered by the license, but shall not exceed ___dollars
17($____) forbegin delete aend deletebegin insert anend insert initial application, and ____dollars ($____) for
18a renewal application.

19(B) Upon the issuance of a license, the division shall charge
20each licensee a licensure fee. The licensure fee shall be calculated
21to cover the costs of administering this chapter, other than the costs
22of processing applications. The licensure fee may vary depending
23upon the varying costs associated with administering the various
24regulatory requirements of this chapter as they relate to the nature
25and scope of the different licensure activities, but shall not be less
26than ____ dollars ($____), nor more than ____ dollars ($____).

27(C) The total fees assessed pursuant to this chapter, including,
28but not limited to, provisional license fees set forth in Section
2926054, shall be setbegin delete inend delete at an amount that will fairly and
30proportionately generate sufficient total revenue to fully cover the
31total costs of administering this chapter, including, but not limited
32to, costs set forth in Section 26023.

33(2) Establish procedures for approval or denial of applications
34for licensure for each and every aspect of commercial cannabis
35 activity, including, but not limited to, cultivation, possession,
36manufacture, processing, storing, laboratory testing, labeling,
37transporting, distribution, and sale of cannabis.

38(3) Establish applicant qualifications.

39(4) Establish licensee employee qualifications, including, but
40not limited to, training and screening requirements.

P14   1(5) Establish licensee security requirements, including, but not
2limited to, procedures to limit access to facilities and to prevent
3diversion of product to nonmedical use.

4(6) Establish procedures and protocols for identifying, managing,
5and disposing of contaminated, adulterated,begin delete deterioratedend delete
6begin insert deteriorated,end insert or excess product.

7(7) Establish advertising, marketing, signage, and labeling
8requirements and restrictions.

9(8) Establish procedures for the suspension, revocation, or
10surrender of a license and establishing related fines and penalties
11to be assessed against licensees for violations of this chapter.

12(9) Establish procedures for the oversight of the fund established
13pursuant to Section 26028.

14

26021.  

(a) The division, in consultation with the Division of
15Labor Standards Enforcement, shall adopt regulations establishing
16worker safety standards in cultivation sites, manufacturing
17facilities, and retail dispensary sites.

18(b) The division, in consultation with the Department of Water
19Resources, shall adopt regulations to ensure that commercial
20cannabis activity licensed pursuant to this chapter does not threaten
21the state’s clean water andbegin delete environment and is otherwise in
22compliance with the California Environmental Quality Act (CEQA)
23(Division 13 (commencing with Section 21000)) of the Public
24Resources Code).end delete
begin insert environment.end insert

25(c) The division,begin delete onend deletebegin insert inend insert consultation with the Department of Food
26and Agriculture, shall adopt regulations ensuring that the
27cultivation of cannabis under this chapter is in compliance with
28begin delete allend deletebegin insert standards equivalent to the statutory and regulatoryend insert
29 requirements applicable to the production of a food crop, including,
30but not limited to, all of the following:

31(1) Regulations regarding the verification of cannabis stock for
32the purposes of cultivation.

33(2) Cultivation protocols ensuring the quality,begin delete abundance,end delete
34begin insert availability,end insert and safety of the cannabis crop, including both indoor
35and outdoor cultivation standards and regulations regarding carbon
36offsets for indoor cultivation.

37(3) Environmentally sound agricultural practices, including all
38of the following:

39(A) A requirement that anybegin insert actual, or potential for,end insert
40 environmental damage be addressed by the relevant state agency,
P15   1begin delete includingend deletebegin insert including,end insert but not limited to, the State Board of Forestry
2and Fire Protection, the Department of Fish and Wildlife,begin delete Regional
3Water Quality Control Boards,end delete
begin insert California regional water quality
4control boards,end insert
the Department of the California Highway Patrol,
5begin insert orend insert the Department ofbegin delete Justice, CalFire.end deletebegin insert Justice.end insert

6(B) A provision authorizing revocation of a licensee if the state
7determines that the conduct of the licenseebegin insert threatens to inflict orend insert
8 has inflicted significant damage to the environment.

9(C) Standards controlling the application of pesticides. These
10standards shall, at a minimum, require that if pesticides are to be
11used, the use comply with standardsbegin delete analogousend deletebegin insert equivalentend insert to
12Division 6 (commencing with Section 11401) of the Food and
13Agricultural Code and its implementing regulations.

begin insert

14(d) The division, in consultation with the Department of
15Consumer Affairs, shall adopt regulations to certify laboratories
16for the testing of medical cannabis and medical cannabis products,
17as defined in this chapter. Certification of testing laboratories
18shall be consistent with general requirements for the competence
19of testing and calibration activities, including sampling, using
20standard methods established by the International Organization
21for Standardization, including, but not limited to, ISO/IEC 17025.

end insert
22

26021.5.  

(a) State agencies shall collaborate with local
23agencies, and localbegin delete agencies shall,end deletebegin insert agencies,end insert within the scope of
24their jurisdiction,begin insert and to the extent that resources are available,
25shallend insert
assist state agencies in the enforcement of this chapter.begin insert This
26section shall not limit any other state or local requirements.end insert

27(b) Nobegin delete marijuanaend deletebegin insert cannabisend insert shall be cultivated on public lands
28pursuant to this chapter.

29

26022.  

The division, in consultation with the State Department
30of Public Health, shall adopt regulations to do all of the following:

31(a) Establish labeling and packaging standards and requirements,
32including, but shall not be limited to, all of the following:

33(1) Cultivation labeling requirements requiring labeling to
34include, at a minimum,begin delete THCend deletebegin insert cannabinoidend insert levels, cannabinoid
35profile, and active ingredients.

36(2) begin deleteEdible end deletebegin insertEdible, manufactured, and topical end insertcannabis product
37labeling and packaging standards, including, but not limited to, all
38of the following:

39(A) A requirement that the label include the manufacturing date,
40 the active ingredients, net weight, cannabinoid profile, nutritional
P16   1facts, dosage in total milligrams ofbegin delete THCend deletebegin insert cannabinoidsend insert delivered,
2and any potential allergens.

3(B) A requirement that the label include the warnings: “KEEP
4OUT OF REACH OFbegin delete CHILDREN,”end deletebegin insert CHILDREN AND
5ANIMALS,”end insert
and “FOR MEDICAL USE ONLY.”

6(C) A requirement that packaging contain a clear indication in
7bold font that the package contains medical cannabis, and that the
8 package not be designed in a manner that attracts minors.

9(D) Standards for labeling food that clearly distinguish edible
10cannabis products from non-cannabis products.

11(b) begin deleteEstablishing end deletebegin insertEstablish end insertconsumer protection, food and product
12safety requirements, including, but not limited to, all of the
13following:

14(1) Adverse event reporting and product recall systems that
15include batch, lot, or control number tracking, the requirement that
16employees who manufacture or otherwise handle edible medical
17begin delete marijuanaend deletebegin insert cannabisend insert products thoroughly wash their hands before
18commencing production and before handling finished edible
19medicalbegin delete marijuanaend deletebegin insert cannabisend insert products.

20(2) Standards forbegin delete tetrahydrocannabinol (THC) and Cannabidiol
21(CBD)end delete
begin insert cannabinoidend insert dosage in edible products.

22(3) Sanitation standardsbegin delete analogousend deletebegin insert equivalentend insert to the California
23Retail Food Code (Part 7 (commencing with Section 113700) of
24Division 104 of the Health and Safety Code) for food preparation,
25storage, handling, and sale of medical cannabis products.

26(4) A requirement that edible medical cannabis products be
27limited to foods that arebegin delete nonpotentiallyend deletebegin insert not potentiallyend insert hazardous
28food as set forth in Section 114365.5 of the Health and Safety
29Code.

30(5) A requirement that facilities in which edible medical
31cannabis products are prepared shall be constructed in accordance
32with building standards and health and safety standards applicable
33to a food production facility, including the requirement that edible
34products distributed or sold by dispensaries not be produced or
35stored in private homes.

36(6) Weighing or measuring standards, including, but not limited
37begin delete toend deletebegin insert to,end insert the requirement that devices used in connection with the sale
38or distribution of cannabis meet standardsbegin delete analogousend deletebegin insert equivalentend insert
39 to Division 5 (commencing with Section 12001) of the Business
40and Professions Code.

P17   1(7) Standards controlling the application of pesticides. These
2standards shall, at a minimum, require that if pesticides are to be
3used, the use comply with standardsbegin delete analogousend deletebegin insert equivalentend insert to
4Division 6 (commencing with Section 11401) of the Food and
5Agricultural Code and its implementing regulations.

6(8) A requirement that all edible medicalbegin delete marijuanaend deletebegin insert cannabisend insert
7 products shallbegin insert beend insert individually wrapped at the original point of
8preparation.

9(c) begin deleteEstablishing end deletebegin insertEstablish end inserttesting requirements for all medical
10cannabis products, including edible cannabis products and those
11used, or intended for use, via inhalation, including, but not limited
12to:

13(1) Testing for the activebegin delete cannibinoid profile,end delete
14begin insert cannabinoid-profile,end insert constituent elements, and microbiological,
15bacterial, pathogenicbegin delete yeastend deletebegin insert yeast,end insert and mold counts.

16(2) Testing standards by which to test and measure the potency
17of medicalbegin delete marijuanaend deletebegin insert cannabisend insert products. The division shall also
18determine maximum standards in the potency of medicalbegin delete marijuanaend delete
19begin insert cannabisend insert products.

begin delete

20(3) A requirement that local county public health departments
21conduct product safety testing annually to ensure the quality of
22the cannabis product.

end delete
begin delete

23(4) A requirement that quality assurance tests be conducted at
24a testing laboratory certified by the State Department of Public
25Health.

end delete
begin delete

26(5) A requirement for random quality assurance testing by
27certified testing laboratories. Testing laboratories are exempt from
28licensure under this chapter. A testing laboratory shall not receive
29medical cannabis products except through the division or a medical
30cannabis licensee. Individual medical patients may deliver samples
31for testing with a licensee. The licensee shall verify the patient’s
32medical recommendation and may then transfer the sample to a
33certified laboratory for testing.

end delete
begin insert

34(3) Testing standards by which to test and measure the quality
35of the cannabis product.

end insert
begin insert

36(4) Protocols for cannabis product safety testing.

end insert
begin insert
37

begin insert26022.5.end insert  

The regulations shall not limit the authority of a city
38or a county pursuant to Section 7 of Article XI of the California
39Constitution, Section 26010 or 26060, or any other law.

end insert
P18   1

26023.  

The regulations shall set forth the inspection and
2enforcement responsibilities of the Division of Labor Standards
3Enforcement, the Department of Water Resources, the State
4Department of Public Health, and the Department of Food and
5Agriculture associated with this chapter.

6

26023.5.  

(a) Without limiting the authority of a city or a county
7pursuant to Section 7 of Article XI of the California Constitution
8or any other law, the division shall adopt regulations regarding the
9minimum standards for the operation of dispensaries. The
10regulations shall establish all of the following:

11(1) Standards for labeling of products, including the name of
12the mandatory commercial licensee from which the product was
13obtained, and a requirement that dispensaries provide patients with
14detailed written information about the contents of the cannabis
15and medical cannabis products they obtain.

16(2) Requirements for inventory control and reporting that require
17all dispensaries to be able to demonstrate the present location,
18amounts, and descriptions of all medical cannabis products from
19the time of delivery to the dispensary until purchase by a qualified
20patient or primary caregiver.

21(3) Minimum educational and testing requirements for licensee
22staff, including, but not limited to, background checks and a
23requirement that every dispensary maintain dedicated, licensed
24security staff both inside and outside the dispensary.

25(4) Minimum standards governing signage and advertising for
26dispensaries.

27(b) Commencing 180 days after the division begins issuing
28provisional licenses, a dispensary shall provide patients medical
29begin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert products
30obtained only from persons licensed under this chapter.

31(c) Out-of-state medical cannabis patients with current, valid
32verification that they are allowed to receive medical cannabis
33treatment within their home state may receive medical cannabis
34treatment, including the ability to purchase medical cannabis from
35licensed dispensaries within this state upon verification of the
36documents by the dispensary, pursuant to protocols established by
37the division.

38

26024.  

(a) The division may assist state taxation authorities
39in the development of uniform policies for the state taxation of
40mandatory commercial licensees.

P19   1(b) The division shall assist the Division of Occupational Safety
2and Health in the Department of Industrial Relations in the
3development of industry-specific regulations related to commercial
4medical cannabis activities.

5

26028.  

(a) The Medical Cannabis Control Fund is hereby
6established within the State Treasury. Notwithstanding Section
716305.7 of the Government Code, the fund shall include any
8interest and dividends earned on thebegin delete moneyend deletebegin insert moneysend insert in the fund.

9(b) All fees collected pursuant to this chapter shall be deposited
10into the fees account, which is hereby established within the fund.
11Notwithstanding Section 13340 of the Government Code, all
12moneys within the fees account are hereby continuously
13appropriated, without regard to fiscal year, to the division solely
14for the purposes of fully funding and administering this chapter,
15including, but not limited to, the costs incurred by the division for
16its administrative expenses and costs set forth in Section 26023.

17(c) All moneys collected pursuant to this chapter as a result of
18fines or penalties imposed under this chapter shall be deposited
19directly into the fines and penalties account, which is hereby
20established within the fund, and shall be available, upon
21appropriation by the Legislature, for the purposes of funding the
22enforcement grant program pursuant to subdivision (d).

23(d) The division shall establish and administer a grant program
24to allocate moneys from the fines and penalties account to state
25and local entities for the purpose of assisting with medical cannabis
26regulation and the enforcement of this chapter and other state and
27local laws applicable to licensees. The costs of the grant program
28under this subdivision shall, upon appropriation by the Legislature,
29be paid for with moneys in the fines and penalties account.

30(e) The Department of Transportation shall conduct research
31regarding determining whether a driver is operating a vehicle under
32the influence ofbegin delete marijuana,end deletebegin insert cannabis,end insert and shall develop protocols
33setting forth best practices to assist law enforcement agencies. The
34costs of the Department of Transportation under this subdivision
35shall, upon appropriation by the Legislature, be paid for with
36moneys in the fines and penalties account.

37(f) The total fees charged pursuant to this chapter shall be
38sufficient to pay the costs associated with the administrative and
39enforcement duties of the division and of the associated state
40agencies in administering this chapter.

P20   1(g) The division shall enter into an interagency agreement with
2the Division of Labor Standards Enforcement, the Department of
3Water Resources, the State Department of Public Health, and the
4Department of Food and Agriculture setting forth the duties of
5those agencies under this chapter and providing for reimbursement
6of associated costs from revenues deposited into the fees account
7of the fund.

8

26030.  

(a) The director and the persons employed by the
9division for the administration and enforcement of this chapter are
10peace officers in the enforcement of the penal provisions of this
11chapter, the rules of the division adopted under this chapter, and
12any other penal provisions of law of this state prohibiting or
13regulating the cultivation, processing, storing, manufacturing,
14testing, transporting, or selling of medical cannabis, and these
15persons are authorized, while acting as peace officers, to enforce
16any penal provisions of state law while in the course of their
17employment.

18(b) The director, the persons employed by the division for the
19administration and enforcement of this chapter, peace officers
20listed in Section 830.1 of the Penal Code, and those officers listed
21in Section 830.6 of the Penal Code while acting in the course and
22scope of their employment as peace officers may, in enforcing this
23chapter, visit and inspect the premises of any licensee at any time
24during which the licensee is acting pursuant to the mandatory
25commercial license.

26(c) Peace officers of the Department of the California Highway
27Patrol, members of the University of California and California
28State University police departments, and peace officers of the
29Department of Parks and Recreation, as defined in subdivisions
30(a), (b), (c), and (f) of Section 830.2 of the Penal Code, may, in
31enforcing this chapter, visit and inspect the premises of any licensee
32at any time during which the licensee is acting pursuant to the
33license.

34

26034.  

(a) Information identifying the names of patients, their
35medical conditions, or the names of their primary caregivers
36received and contained in records kept by the division for the
37purposes of administering this chapter are confidential andbegin delete exempt
38fromend delete
begin insert shall not be disclosed pursuant toend insert the California Public
39Records Act (Chapter 3.5 (commencing with Section 6250) of
40Division 7 of Title 1 of the Governmentbegin delete Code) and are not subject
P21   1to disclosure to any individual or private entity,end delete
begin insert Code),end insert except as
2necessary for authorized employees of the State of Californiabegin insert or
3any city or countyend insert
to perform official duties pursuant to this
4begin delete chapter:end deletebegin insert chapter, or a local ordinance adopted in accordance with
5Section 26010.end insert

6(b) Nothing in this section precludes the following:

7(1) Division employees notifying state or local agencies about
8information submitted to the division that the employee suspects
9is falsified or fraudulent.

10(2) Notifications from the division to state or local agencies
11about apparent violations of thisbegin delete chapter.end deletebegin insert chapter or any applicable
12local ordinance.end insert

13(3) Verification of requests by state or localbegin delete law enforcementend delete
14 agencies to confirm licenses and certificates issued by the division
15or other state agency.

16(4) Provision of information requested pursuant to a court order
17or subpoena issued by a court or an administrative agency or local
18governing body authorized by law to issue subpoenas.

19(c) Information shall not be disclosedbegin insert by any state or local
20agencyend insert
beyond what is necessary to achieve the goals of a specific
21begin delete investigationend deletebegin insert investigation, a notification,end insert or the parameters of a
22specific court order or subpoena.

23

26035.  

begin deleteNothing in this chapter is intended to end deletebegin insertThis chapter does
24not end insert
require an employer to permit or accommodate the use,
25consumption, possession, transfer, display, transportation,begin delete sale or
26growth orend delete
begin insert sale, or growth ofend insert cannabis in the workplace or to affect
27the ability of employers to have policies restricting the use of
28cannabis by employees.

29 

30Article 3.  Mandatory Commercial License
31

 

32

26040.  

(a) The division shall adopt regulations establishing a
33tiered licensing scheme to accommodate the different levels and
34types of activity to bebegin delete licensed.end deletebegin insert licensed, including, but not limited
35to, licenses for the cultivation, testing, manufacture, transportation,
36and dispensing of medical cannabis and medical cannabis
37products.end insert
The regulations shall set forth the application and
38licensure process, including, but not limited to, all of the following:

39(1) A description of the various specific forms of commercial
40cannabis activity to be authorized by the various types of licenses.

P22   1(2) The establishment of license application, issuance, renewal,
2suspension, surrender, and revocation procedures for the various
3types of licenses to be issued.

4(3) The procedures for the issuance, renewal, suspension, and
5revocation of mandatory commercial licenses.

6(4) Time periods, not to exceed 90 days, by which the division
7shall approve or deny an application for mandatory commercial
8licensure.begin insert The failure of the division to act upon an application
9for licensure within the time prescribed shall not be deemed
10approval of the application.end insert

11(5) Qualifications for licensees.

12(6) Security requirements, including, but not limited to,
13procedures for limiting access to facilities and for the screening
14of employees.

15(b) Each mandatory commercial license application approved
16by the division pursuant to this chapter is separate and distinct.

17(c)  A mandatory commercial license application approved by
18the division pursuant to this chapter shall be valid for a period not
19to exceed one year from the date of approval unless revoked or
20suspended earlier than that date pursuant to this chapter or the rules
21or regulations adopted pursuant to this chapter

begin delete
22

26041.  

A license application or renewal shall not be approved
23if the division determines any of the following:

24(a) The applicant fails to meet the requirements of this chapter
25or any regulation adopted pursuant to this chapter, or any applicable
26city or county ordinance or regulation.

27(b) The applicant, or any of its officers, directors, or owners, is
28under 21 years of age.

29(c) The applicant has knowingly answered a question or request
30for information falsely on the application form or failed to provide
31information requested.

32(d) The applicant, or any of its officers, directors, or owners has
33been convicted in the previous five years of a violent felony, as
34specified in subdivision (c) of Section 667.5 of the Penal Code, a
35serious felony as specified in subdivision (c) of Section 1192.7 of
36the Penal Code, a felony offense involving fraud or deceit, or any
37other felony that, in the division’s estimation, would impair the
38applicant’s ability to appropriately operate as a mandatory
39commercial licensee.

P23   1(e) The applicant, or any of its officers, directors, or owners is
2a licensed physician making patient recommendations for medical
3cannabis.

4(f) The applicant, or any of its officers, directors, or owners has
5been sanctioned by the division, a city, or a county for unlicensed
6commercial medical cannabis activities or has had a license revoked
7under this chapter in the previous three years.

8(g) For an applicant that will have more than 20 employees, the
9applicant has entered into a labor peace agreement with a bona
10fide labor organization that is actively engaged in representing or
11attempting to represent the applicant’s employees.

end delete
begin insert
12

begin insert26041.end insert  

An individual licensed pursuant to this chapter shall
13do the following, as applicable:

14(a) A cultivation licensee shall:

15(1) Comply with all regulations of the Department of Food and
16Agriculture pursuant to this chapter regarding the cultivation of
17medical cannabis.

18(2) Comply with any other applicable requirement of the division
19pursuant to this chapter.

20(b) Testing licensees shall be subject to the following:

21(1) A testing licensee shall not receive medical cannabis
22products except through the division or a medical cannabis
23licensee.

24(2) A testing licensee shall not be licensed for any activity
25authorized under this article, and shall not hold an ownership
26interest in any real property, personal property, or other assets
27associated or used in any other license category.

28(3) Any other applicable requirement of the division pursuant
29to this chapter.

30(c) A manufacturing licensee shall comply with any applicable
31requirement of the division pursuant to this chapter.

32(d) A transportation licensee of medical cannabis shall:

33(1) Maintain intrastate operating authority.

34(2) Maintain interstate operating authority, to the extent
35 permitted by federal law.

36(3) Be allowed by local jurisdictions to transport medical
37cannabis, if the licensee is in compliance with this chapter.

38(e) Dispensary licensees shall:

P24   1(1) Be permitted to store quantities of medical cannabis for
2commercial purposes pursuant to this chapter, as deemed safe by
3the division.

4(2) Comply with all applicable requirements of the division
5pursuant to this chapter.

end insert
6

26042.  

The division shall establish a scale of application,
7licensing, and renewal fees, based upon the cost of enforcing this
8chapter, as follows:

9(a) The division shall charge each applicant for licensure or
10renewal an application or renewal fee that shall be calculated to
11cover the costs of processing the application or renewal. This fee
12may vary depending upon the varying costs associated with
13approving the application or renewal related to the varying
14activities covered by the license, but shall not exceed ____ dollars
15($____) forbegin delete aend deletebegin insert anend insert initial application, and ____dollars ($____) for
16a renewal application.

17(b) Upon the issuance of a license, the division shall charge
18each licensee a licensure fee. The licensure fee shall be calculated
19to cover the costs of administering this chapter, other than the costs
20of processing applications. The licensure fee may vary depending
21upon the varying costs associated with administering the various
22regulatory requirements of this chapter as they relate to the nature
23and scope of the different licensure activities, but shall not be less
24than ____ dollars ($____), nor more than ____ dollars ($____).

25(c) The division shall establish appropriate fees as part of its
26emergency regulations for the issuance of provisional licenses
27adopted pursuant to Section 26043.

28(d) The total fees assessed pursuant to this chapter, including,
29but not limited to, provisional license fees set forth in Section
3026054, shall be setbegin delete inend delete at an amount that will fairly and
31proportionately generate sufficient total revenue to fully cover the
32total costs of administering this chapter, including, but not limited
33to, costs set forth in Section 26023.

34

26043.  

begin delete(a)end deletebegin deleteend deleteThe division shall adopt, as soon as practicable,
35emergency regulations consistent with this chapter to allow a
36qualified applicant forbegin delete licenseend deletebegin insert licensureend insert to apply for and receive
37a provisionalbegin delete licensedend deletebegin insert licenseend insert to engage in commercial cannabis
38activity so as to ensure an adequate supply of medical cannabis
39upon full implementation of this chapter as set forth in Section
4026054.

P25   1

26045.  

Every mandatory commercial license is renewable
2unless the license has been revoked if the renewal application is
3submitted and the fee for it is paid. A license that has been
4suspended, but not revoked, may be renewed under this section,
5however, the act of renewal shall notbegin delete effectend deletebegin insert affectend insert the suspension
6and the suspension shall remain in effect upon renewal. All licenses
7expire at 12 midnight on the last day of the month posted on the
8license. All licenses shall be renewed as follows:

9(a) The application to renew the license may be filed before the
10license expires upon payment of the annual fee.

11(b) For 60 days after the license expires, the license may be
12renewed upon payment of the annual renewal fee plus a penalty
13fee that shall be equal to 50 percent of the annual fee.

14(c) Unless otherwise terminated, or unless renewed pursuant to
15subdivision (a) or (b), a license that is in effect on the month posted
16on the license continues in effect through 12 midnight of the 60th
17day following the month posted on the license, at which time it is
18automatically canceled.

19(d) A license that has been canceled pursuant to subdivision (c)
20may be reinstated during the 30 days immediately following
21cancellation upon payment by cashier’s check or money order of
22the annual renewal fee, plus a penalty fee that shall be equal to
23100 percent of the annual fee. A license that has been canceled
24pursuant to subdivision (c) and that has not been reinstated within
2530 days pursuant to this subdivision is automatically revoked on
26the 31st day after the license has been canceled.

27(e) A renewal application shall not be deemed filed within the
28meaning of this section unless the document itself has been actually
29delivered to, and the required renewal fee has been paid at, any
30office of the division during office hours, or unless both the
31document and fee have been filed and remitted pursuant to Section
3211003 of the Government Code.

33

26046.  

(a) An application for a license shall include, but shall
34not be limited to, all of the following:

35(1) The legal name and proposed physical addresses of the
36mandatory commercial licensee.

37(2) The name, address, and date of birth of each principal officer
38and board member.

39(3) Operating and inventory control procedures to ensure
40security and prevent diversion.

P26   1(4) Detailed operating procedures for the proposed facility,
2which shall include, but not be limited to, provisions for facility
3and operational security, prevention of diversion, employee
4 screening, storage of medical cannabis, personnel policies, and
5recordkeeping procedures.

6(5) A list of all persons or entities having an ownership interest
7other than a security interest, lien, or encumbrance on any property
8that will be used by the applicant.

9(6) Evidence of the legal right to occupy and use an established
10location, or an immunity from prosecution for that occupancy or
11use pursuant to a local ordinance or ordinances, including, but not
12limited to, Measure D, approved by the voters of the City of Los
13Angeles at the May 21, 2013, general election.

14(7) Documentation that the applicant will be in compliance with
15all local ordinances and regulations, including, but not limited to,
16an entity granted immunity under Measure D, approved by the
17voters of the City of Los Angeles at the May 21, 2013, general
18 election.

19(8) Evidence that a minimum of 75 percent of the officers and
20owners of the applicant organizationbegin delete areend deletebegin insert have beenend insert residents of
21the State of California for at least three years.

begin insert

22(9) For an applicant with 20 employees or more, a statement
23that the applicant will enter into, or demonstrate that it has already
24entered into, and abide by the terms of, a “labor peace agreement,”
25as defined by the division in consultation with the Division of Labor
26Standards Enforcement.

end insert
begin insert

27(10) For an applicant seeking a license to cultivate, a statement
28declaring the applicant is an “agricultural employer,” as defined
29in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor
30Relations Act of 1975 (Part 3.5 (commencing with Section 1140)
31of Division 2 of the Labor Code), to the extent not prohibited by
32law.

end insert
begin delete

34 33(9)

end delete

34begin insert(11)end insert A statement signed by the applicant under penalty of perjury
35that the information provided in the application is true.

36(b) For applicants seeking a license to cultivate and process, the
37application shall also include a detailed description of the operating
38 procedures for all of the following:

39(1) Cultivation.

40(2) Extraction and infusion methods.

P27   1(3) The transportation process.

2(4) Inventory procedures.

3(5) Quality control procedures.

4

26047.  

(a) Upon receipt of an application forbegin delete aend delete licensure and
5the applicable fee, the division shall make a thorough investigation
6to determine whether the applicant and the premises for which a
7license is applied qualify for the license and whether this chapter
8has been complied with, and shall investigate all matters connected
9therewith that may affect the public welfare and morals.

10(b) The division shall deny an application if either the applicant
11or the premises for which a license is applied do not qualify forbegin delete aend delete
12 licensure under this chapter.

13(c) The division may, at its discretion, issue a license to an
14applicant who has obtained a certificate of rehabilitation pursuant
15to Section 4852.13 of the Penal Code.

16(d) The division may place reasonable conditions upon licensure
17if grounds exist for denial of the license, and the division finds
18those grounds may be removed by the imposition of those
19conditions. However, the limitations set forth in paragraph (6) of
20subdivision (b) of Section 26040 shall notbegin delete beenend deletebegin insert beend insert waived.

21(e) The division shall deny the application for licensure or
22renewal if any of the following conditions apply:

23(1) Granting or continuation of a license would be contrary to
24the public welfare or morals.

25(2) The applicant holding or seeking a license has violated any
26law prohibiting conduct involving moral turpitude.

begin delete

27(3) The applicant for has been previously convicted for drug
28trafficking, a felony conviction for embezzlement, a felony
29conviction involving fraud or deceit, or any violent or serious
30felony conviction.

31 31(4)

end delete

32begin insert(3)end insert Local agencies have notified the division and provided
33evidence that a licensee or applicant within its jurisdiction is in
34violation of local ordinances relating tobegin delete marijuanaend deletebegin insert cannabisend insert
35 activities.

begin delete

34 36(5)

end delete

37begin insert(4)end insert The application has failed to state with sufficient specificity
38the jurisdiction in which the applicant proposes to establish
39operations.

begin insert

P28   1(5) The applicant fails to meet the requirements of this chapter
2or any regulation adopted pursuant to this chapter, or any
3applicable city or county ordinance or regulation.

end insert
begin insert

4(6) The applicant, or any of its officers, directors, or owners,
5is under 21 years of age.

end insert
begin insert

6(7) The applicant has knowingly answered a question or request
7for information falsely on the application form or failed to provide
8information requested.

end insert
begin insert

9(8) The applicant, or any of its officers, directors, or owners
10has been convicted of a felony criminal conviction for drug
11trafficking, a violent felony, as specified in subdivision (c) of
12Section 667.5 of the Penal Code, a serious felony as specified in
13subdivision (c) of Section 1192.7 of the Penal Code, a felony
14offense involving fraud or deceit, or any other felony that, in the
15division’s determination, would impair the applicant’s ability to
16appropriately operate as a mandatory commercial licensee.

end insert
begin insert

17(9) The applicant, or any of its officers, directors, or owners is
18a licensed physician making patient recommendations for medical
19cannabis.

end insert
begin insert

20(10) The applicant, or any of its officers, directors, or owners
21has been sanctioned by the division, a city, or a county for
22unlicensed commercial medical cannabis activities or has had a
23license revoked under this chapter in the previous three years.

end insert
begin delete

24(6)

end delete

25begin insert(11)end insert Applicants shall be notified of a denied application in
26writing via personal service or mail addressed to the address of
27the applicant or licensee set forth in the application. The denial
28letter shall contain the detailed reasons for which the application
29has been denied. The applicant shall have the right to appeal the
30denial and be given a hearing within 30 days of the appeal. On
31appeal, the decision shall be upheld unless the applicant
32demonstrates that the applicant is in fact eligible for licensure and
33the application is in compliance with this chapter.

34

26048.  

(a) The division shall electronically submit to the
35Department of Justice fingerprint images and related information
36for all applicants for cultivation, dispensing, manufacturing, and
37transportation licenses for the purpose of obtaining information
38as to the existence and content of a record of state or federal
39convictions and arrests, and information regarding whether the
P29   1person is free on bail, or on his or her own recognizance, pending
2trial or appeal.

3(b) The Department of Justice shall provide a response to the
4division pursuant to paragraph (1) of subdivision (p) of Section
511105 of the Penal Code.

6(c) The division shall request from the Department of Justice
7 subsequent notification service, as provided pursuant to Section
811105.2 of the Penal Code, for persons described in this section.

9(d) The Department of Justice shall charge a fee sufficient to
10cover the reasonable cost of processing the requests described in
11this section.

12

26049.  

(a) The actions of a mandatory commercial licensee
13or provisional licensee, its employees, and its agents, permitted
14pursuant to a mandatory commercial license or provisional license
15issued by the division or otherwise permitted by this chapter, that
16are within the scope of the license issued pursuant to this chapter
17and the regulations adopted pursuant to the authority granted by
18this chapter, are not unlawful under state lawbegin delete or local ordinance
19generally prohibiting marijuana related activityend delete
and shall not be
20an offense subject to arrest, prosecution, or other sanction under
21statebegin delete law or local ordinance,end deletebegin insert law,end insert or be subject to a civil fine or be
22a basis for seizure or forfeiture of assets under law.

23(b) The actions of a person who, in good faith and upon
24investigation, allows his or her property to be used by a mandatory
25commercial licensee or provisional licensee, its employees, and
26its agents, as permitted pursuant to a mandatory commercial license
27or provisional license issued by the division or otherwise permitted
28by this chapter, are not unlawful under state law and shall not be
29an offense subject to arrest, prosecution, or other sanction under
30state law, or be subject to a civil fine or be a basis for seizure or
31forfeiture of assets under state law.

32(c) Conduct that is within the scope of a license issued pursuant
33to this chapter but not fully in compliance with this chapter shall
34be subject to the enforcement provisions of this chapter and shall
35not be subject to the penal provisions generally prohibiting
36begin delete marijuana relatedend deletebegin insert cannabis-relatedend insert activity, unless and until the
37license is revoked.

38(d) This section shall not be deemed to limit the authority or
39remedies of a city or county under any provision of law, including,
40without limitation,begin delete Section 26010 or 26060 of this code orend delete Section
P30   17 of Article XI of the Californiabegin delete Constitution.end deletebegin insert Constitution or
2Section 26010 or 26060.end insert

3

26050.  

(a) A licensee shall keep, at the licensed premises,
4accurate records of the specific commercial cannabis activity
5conducted by the licensee. The records shall include, at a minimum,
6all of the following for each batch of product:

7(1) The name and address of the supplier.

8(2) The datesbegin delete inend deletebegin insert onend insert which the product was received.

9(3) The amounts, form, and batch and lot number.

10(4) The location of the cultivation site.

11(5) The name of the employee who received the product.

12(6) Records demonstrating compliance by the licensee with state
13and federal rules and regulations regarding reporting and taxation
14of income received.

15(b) The records shall be kept for a minimum of seven years.

16(c) The division may make any examination of the books and
17records of any licensee and may visit and inspect the premises of
18any licensee that the division may deem necessary to perform its
19duties under this chapter.

20(d) If the licensee or any employee of the licensee refuses,
21impedes, obstructs, or interferes with an inspection pursuant to
22this chapter or local ordinance, or if the licensee fails to maintain
23or provide the books and records required by this section, the
24license may be summarily suspended and the division shall directly
25commence proceedings for the revocation of the license in
26accordance with this chapter.

27(e) All cultivation, dispensing, and retail sales licensees shall
28be subject to an annual audit by the State Auditor in order to ensure
29proper documentation is kept at each site or facility.

30

26052.  

(a) This chapter shall not apply to, and shall have no
31diminishing effect on, the rights and protections granted to a patient
32or a primary caregiver pursuant to the Compassionate Use Act of
331996.

34(b) (1) A patient who cultivates, possesses, stores, manufactures,
35or transports cannabis exclusively for his or her personal medical
36use but who does not sell or distribute cannabis to any other person
37is not, thereby, engaged in commercial cannabis activity and is,
38therefore, exempt from the licensure requirements of this chapter.

39(2) A primary caregiver who cultivates, possesses, stores,
40manufactures, transports,begin delete donatesend deletebegin insert donates,end insert or provides cannabis
P31   1exclusively for the personal medical purposes of a specified
2qualified patient for whom he or she is the primary caregiver within
3the meaning of Section 11362.7 of the Health and Safety Code but
4who does not receive remuneration for these activities except for
5compensation in full compliance with subdivision (c) of Section
611362.765 of the Health and Safety Code is not, thereby, engaged
7in commercial cannabis activity and is, therefore, exempt from the
8licensure requirements of this chapter.

9

26054.  

(a) The division shall, as soon as practicable following
10January 1, 2016, allow a qualified applicant forbegin delete licenseend deletebegin insert licensureend insert
11 to apply for and receive a provisionalbegin delete licensedend deletebegin insert licenseend insert to engage
12in commercial cannabis activity so as to ensure an adequate supply
13of medical cannabis upon full implementation of this chapter.

14(b) The division shall establish appropriate fees not to exceed
15____ dollars ($____) for the issuance of a provisional license
16pursuant to this chapter.

17(c) The division shall accept applications for provisional
18commercial licenses for medical cannabis activity as follows:

19(1) The division shall request that every city or county provide
20the division with a list of approved entities providing medical
21cannabis to qualified patients and caregivers within the city or
22county’s jurisdiction, if any, the location at which the entity is
23operating, and the names of the persons who operate the entity. If
24the jurisdiction represents that the entity has been operating in
25compliance with local laws and regulations, or has limited
26immunity under local laws, including, but not limited to, Measure
27D, approved by the voters of the City of Los Angeles at the May
2821, 2013, general election, the division shall issue a provisional
29license to the entity until the time that the entity’s application for
30mandatory commercialbegin delete licenseend deletebegin insert licensureend insert has been approved or
31denied under this chapter, but no later than 90 days after the
32division begins accepting applications for mandatory commercial
33licensure.

34(2) The division shall issue a provisional license to individuals
35and entities that the division determines were, during the 12 months
36prior to January 1, 2016, regularly cultivating, processing,
37manufacturing, transporting, or distributing medical cannabis
38collectively or cooperatively in full compliance with paragraphs
39A and B of Section IV of the Guidelines for Security and
40Non-Diversion of Marijuana Grown for Medical Use, issued by
P32   1the Department of Justice in August 2008, and any applicable local
2ordinance, to continue to do so until the licensee’s application for
3mandatory commercial licensure has been approved or denied
4under this chapter, but no later than 90 days after the division
5begins accepting applications for regular mandatory commercial
6licenses. The division may consult with relevant local agencies in
7making a determination on whether a provisional license applicant
8is in compliance with any applicable ordinance.

9(d) To qualify for a provisional mandatory commercial license,
10applicants shall disclose to the division all of the following
11information in writing:

12(1) The names, addresses, and dates of birth of each principal
13officer, owner, or board member.

14(2) The common street address and assessor’s parcel number
15of the property at which the licensee conducts any activity under
16the authority of the licensee.

17(3) The common street address and assessor’s parcel number
18of the property at which any cultivation activity was or is to be
19conducted.

20(4) For the 12 months prior to January 1, 2016, the quantity of
21cannabis cultivated, processed, manufactured, tested, transported,
22or sold at a location and the quantity expected to be cultivated,
23processed, manufactured, tested, transported, or sold from January
241, 2016, to July 1, 2016, inclusive. The licensee shall make its
25records of current activity and activity for the 12 months prior to
26January 1, 2016, available to the division upon request.

27(e) Upon receipt of the application materials and fee, the division
28may issue a provisional license and send a proof of issuance to the
29applicant, if the applicant has not committed any act or crime
30constituting grounds for the denial of licensure.

31(f) Notwithstanding any other provision of this section, the
32division shall not issue a provisional license tobegin delete anyend delete an individual
33or entity, or forbegin delete anyend delete a premises, against whom there are pending
34state or local administrative or judicial proceedings or actions
35initiated by a city, county, or city and county under any applicable
36local ordinance or who has been determined through those
37proceedings to have violated any local ordinance related to
38begin delete marijuanaend deletebegin insert cannabisend insert activity, or that knowingly provides false or
39fraudulent information on an application for licensure.

P33   1(g) Entities that are provided immunity under Measure D,
2approved by the voters of the City of Los Angeles at the May 21,
32013, general election, shall be considered the equivalent of entities
4that are registered, permitted, or licensed as a medical marijuana
5business, dispensary, or other entity involved in providing medical
6marijuana to patients under a local ordinance and shall be
7considered in compliance with a local ordinance for the purposes
8of the implementation of this section.

9(h) Provisional licensees shall comply with all standards and
10requirements applicable to a licensee under this chapter, including,
11but not limited to, the production, recordkeeping, security, and
12transportation requirements and standards.

13

26055.  

begin delete(a)end deletebegin deleteend deleteThe division may adopt regulations to permit the
14transfer of a license from a licensee to another person who
15demonstrates to the division that he or she is eligible for licensure
16under this chapter, ifbegin delete all ofend delete the following requirements are met:

begin delete

26 17(b)

end delete

18begin insert(a)end insert The division has determined that granting an additional
19license of the type in question in the geographic region in question
20may lead to the availability of product in excess of the amounts
21needed to meet the medical need.

begin delete

30 22(c)

end delete

23begin insert(b)end insert The prospective recipient of the license complies with all
24of the requirements of this chapter relating to a new application
25for licensure, including, but not limited to, payment to the division
26of a reasonable license transfer fee.

27

26057.  

The division shall make recommendations to the
28Legislature pertaining to the establishment of an appeals and
29judicial review process for persons aggrieved by a final decision
30of the division.

31 

32Article 4.  Enforcement
33

 

34

26060.  

(a) The division shall work in conjunction with law
35enforcement agencies for the purposes of implementing,
36administering, and enforcing this chapter and the division’s
37regulations and taking appropriate action against licensees and
38others who fail to comply with this chapter or the regulations
39adopted pursuant to this chapter.

P34   1(b) Nothing in this chapter or in Article 2 (commencing with
2Section 11357) or Article 2.5 (commencing with Section 11362.7)
3of Chapter 6 of Division 10 of the Health and Safety Code, shall
4prevent a city, county, or city and county from adopting or
5enforcing a zoning ordinance or other law, ordinance, or regulation
6that regulates the location, operation, or establishment of a licensee
7or other person that engages in commercial cannabis activity.

8

26062.  

Except for a person identified in Section 26052, a person
9shall not exercise the privilege or perform any act that a licensee
10may exercise or perform under the authority of a license unless
11the person is acting pursuant to a license, including, but not limited
12to, a provisionalbegin delete license,end deletebegin insert licenseend insert issued pursuant to this chapter.

13

26063.  

(a) Any product containing cannabis that isbegin delete distributed,end delete
14begin insert distributedend insert or offered for sale by a licensee shall comply with the
15testing, labeling, and food safety requirements established pursuant
16to this chapter.

17(b) No person shall steal or fraudulently use a licensee’s
18identificationbegin delete certificate, or licenseend deletebegin insert certificate or license,end insert or other
19licensee’s identification card or license issued by thebegin delete divisionend delete
20begin insert division,end insert to acquire, cultivate, process, manufacture, test, transport,
21produce, possess for sale, sell, or distribute cannabis.

22(c) No person shall counterfeit, tamper with, or fraudulently
23produce an identification card or license status.

24(d) Any person who violates this section, or Section 26062, is
25guilty of a misdemeanor and shall be subject to the following
26penalties:

27(1) For the first offense, imprisonment in a county jail for no
28more than ____months or a fine not to exceed ____dollars ($____),
29or both.

30(2) For a second or subsequent offense, imprisonment in a
31county jail for no more than ____ or a fine not to exceed ____
32dollars ($____), or both.

33(e) Any person who is charged, prosecuted, or subjected to a
34civil penalty under this chapter shall not also be charged or
35prosecuted pursuant to the Health and Safety Code for conduct
36arising from the same set of facts.

37

26064.  

Any personbegin insert engaging in commercial cannabis activity
38andend insert
operating an unlicensed facility, building, structure,begin insert vehicle,
39mobile unit,end insert
or locationbegin delete where cannabis is being commercially
40cultivated, processed, manufactured, tested, or possessed for saleend delete

P35   1 in violation of this chapter shall be subject to civil penalties of up
2to ____ dollars ($____) for each violation, and the divisionbegin insert or
3courtend insert
may order the destruction of any cannabis associated with
4that violation. All civil fines collected pursuant to this section shall
5be deposited into the fines and penalties account established
6pursuant to Section 26028.begin insert If an action for civil penalties is brought
7by the Attorney General, the penalty collected shall be deposited
8into the General Fund pursuant to Section 26028. If the action is
9brought by a district attorney or county counsel, the penalty
10collected shall be paid to the treasurer of the county in which the
11judgment was entered. If the action is brought by a city attorney
12or city prosecutor, the penalty collected shall be paid to the
13treasurer of the city in which the judgment was entered.end insert

14

26066.  

(a) The director or any district attorney, county counsel,
15city attorney, or city prosecutor may bring an action in the name
16of the people of the State of California to enjoin a violation or the
17threatened violation of any provision of this chapter, including,
18but not limited to, a licensee’s failure to correct objectionable
19conditions following notice or as a result of any rule promulgated
20pursuant to thisbegin insert chapter, and to assess and recover civil penalties
21in accordance with thisend insert
chapter. The action shall be brought in the
22county in which the violation occurred or is threatened to occur.
23Any proceedingbegin insert for injunctive reliefend insert brought pursuant to this
24chapter shall conform to the requirements of Chapter 3
25(commencing with Section 525) of Title 7 of Part 2 of the Code
26of Civil Procedure.

27(b) A state or localbegin delete law enforcementend delete agency shall immediately
28notify the division of anybegin insert violations orend insert arrests made for violations
29over which the division has jurisdiction which involve a licensee
30or licensed premises. Notice shall be given within 10 days of the
31begin insert violation orend insert arrest. The division shall promptly cause an
32investigation to be made as to whether grounds exist for suspension
33or revocation of the license.

34(c) This chapter shall not be construed to limit a law enforcement
35agency’s ability to investigate unlawful activity in relation to a
36mandatory commercial licensee.

37(d) The division shall keep a complete record of all entities
38licensed pursuant to this chapter. This record shall be made
39available on the division’s Internet Web site so as to permit state
P36   1and local law enforcement to verify a mandatory commercial
2license.

3(e) The department shall authorize the city, county, or city and
4begin deletecounty,end deletebegin insert countyend insert to impose a “temporary local suspension” of the
5license of a commercial licensee for up to 30 days for violations
6of this chapter. The department shall promptly cause an
7investigation to be made as to whether grounds exist for continued
8suspension or revocation of the license.

9 

10Article 5.  Transportation of Medical Cannabis
11

 

12

26100.  

A licensed transporter shall transport medical cannabis
13and medical cannabis products only between licensed facilities.

14

26102.  

(a) Prior to transporting medical cannabis products, a
15licensed transporter shall do both of the following:

16(1) Complete an electronic shipping manifest as prescribed by
17the division.

18(2) Securely transmit the manifest to the division and the
19licensee that will receive the medical cannabis product.

20(b) During transportation, the licensed transporter shall maintain
21a physical copy of the shipping manifest and make it available
22upon request to agents of the division, local law enforcement
23officers, or any otherbegin delete designateend deletebegin insert designatedend insert enforcement agency.

24(c) The licensee receiving the shipment shall maintain each
25electronic shipping manifest and shall make it available upon
26request to agents of the division, local law enforcement officers,
27or any otherbegin delete designateend deletebegin insert designatedend insert enforcement agency.

28(d) Upon receipt of the shipment, a licensed facility shall submit
29to the division a record verifying receipt of the shipment and the
30details of the shipment.

31

26104.  

(a) Transported medical cannabis products shall be
32transported only in a storage compartment that is securely affixed
33to the interior of the transporting vehicle, and shall not be visible
34from outside the vehicle.

35(b) A vehicle transporting medical cannabis products shall travel
36only directly between licensed facilities.

37(c) All transport vehicles shall be staffed with a minimum of
38two employees. At least one transport member shall remain with
39the vehicle at all times when the vehicle contains medical cannabis.

P37   1(d) Each transport team member shall possess documentation
2of licensing and a government-issued identification card at all
3times when transporting or delivering medicalbegin delete marijuanaend deletebegin insert cannabisend insert
4 and shall produce it upon the request of agents of the division or
5any law enforcement officials.

6

26105.  

(a) The division shall develop a database containing
7the electronic shipping manifests, which shall include, but are not
8limited to, the following information:

9(1) The quantity, or weight, and variety of products shipped.

10(2) The estimated times of departure and arrival.

11(3) The quantity or weight, and variety of products received.

12(4) The actual time of arrival.

13(5) A categorization of the product.

14(b) The database shall be designed to flag irregularities for the
15division to investigate. The division may, at any time, inspect
16shipments and request documentation for current inventory.

begin delete
17

26107.  

(a) This chapter shall not be construed to authorize or
18permit any licensee to transport, or cause to be transported,
19cannabis or cannabis products outside the state, unless authorized
20by federal law.

21(b) A local jurisdiction shall not prevent transportation of
22medical cannabis by a licensed transporter who acts in compliance
23with this chapter.

end delete

24 

25Article 6.  Cannabis Employee Certification and Apprenticeship
26Programbegin insert for Cultivation Sites and Dispensariesend insert
27

 

begin delete
28

26140.  

(a) The Division of Labor Standards Enforcement shall
29do all of the following:

30(1) Maintain minimum standards for the competency and
31training of employees of a licensed cultivation site or a licensed
32dispensing facility, licensed pursuant to this chapter.

33(2) Maintain an advisory committee and panels as necessary to
34carry out its functions under this section. There shall be employer
35representation on the committee and panels.

36(3) Establish and collect certification fees not to exceed the
37reasonable cost to the Division of Labor Standards Enforcement
38in issuing certifications.

39(4) Adopt regulations necessary to implement this article.

P38   1(5) Issue certification cards to employees who have been
2certified pursuant to this article.

3(6) Maintain a cannabis certification curriculum committee
4made up of representatives of the State Department of Education,
5the California Community Colleges, and the Division of Labor
6Standards Enforcement. The committee shall do all of the
7following:

8(A) Establish written educational curriculum standards for
9enrollees in training programs. Curriculum shall include appropriate
10standards for the sale, processing, and cultivation of medical
11marijuana including standards for dispensing, growing, harvesting,
12packaging, labeling, preparing, transporting, delivering, testing,
13storage, and preventing diversion of
14medical marijuana and related
14products, including edible medical
15marijuana products.

15(B) If an educational provider’s curriculum meets the written
16educational curriculum standards established in accordance with
17subparagraph (A), designate that curriculum as an approved
18curriculum of classroom instruction.

19(C) At the committee’s discretion, review the approved
20curriculum of classroom instruction of any designated educational
21provider. The committee may withdraw its approval of the
22curriculum if the educational provider does not continue to meet
23the established written educational curriculum standards.

24(D) Require each designated educational provider to submit an
25annual notice to the committee stating whether the educational
26provider is continuing to offer the approved curriculum of
27classroom instruction and whether material changes have been
28made to the curriculum since its approval.

29(b) There shall be no discrimination in favor of, or against, a
30person based on membership or nonmembership in a union.

31(c) For purposes of this article, the following definitions apply:

32(1) “Cannabis employee” means an employee of a licensee
33working at a licensed facility under this chapter.

34(2) “Committee” means the cannabis curriculum certification
35committee established pursuant to this article.

end delete
begin insert
36

begin insert26140.end insert  

This article applies only to cultivation sites and
37dispensaries.

end insert
begin insert
38

begin insert26140.5.end insert  

The Division of Labor Standards Enforcement shall
39do all of the following:

P39   1(a) Maintain minimum standards for the competency and
2training of employees of a licensed cultivator or dispensary through
3a system of testing and certification.

4(b) Maintain an advisory committee and panels as necessary
5to carry out its functions under this article. There shall be employer
6representation on the committee and panels.

7(c) Adopt regulations as determined to be necessary to
8implement this article.

9(d) Issue certification cards to employees certified pursuant to
10this article.

11(e) Establish registration fees in an amount reasonably
12necessary to implement this article, not to exceed twenty-five
13dollars ($25) for the initial registration. There shall be no fee for
14annual renewal of registration. Fees shall be placed in the fund.

end insert
15

26141.  

(a) begin deleteExcept end deletebegin insertCommencing January 1, 2019, except end insertas
16provided in subdivision (c), persons who perform work as cannabis
17employees shall be certified by the Division of Labor Standards
18Enforcement.

19(b) begin deleteIndividuals end deletebegin insertCommencing January 1, 2019, end insertbegin insertindividuals end insert
20desiring to be certified shall submit an application for certification
21andbegin delete examination that includes an employment history report from
22the Social Security Administration. The individual may redact his
23or her social security number from the employment history report
24before it is submitted.end delete
begin insert examination.end insert

25(c) (1) Certification is not required for registered apprentices
26working as cannabis employees as part of an apprenticeship
27program approvedbegin insert on or after January 1, 2019,end insert under abegin delete federal
28Office of Apprenticeship program or a stateend delete
begin insert state-approvedend insert
29 apprenticeshipbegin delete program authorized by the federal Office of
30Apprenticeship.end delete
begin insert program.end insert An apprentice who is within one year
31of completion of his or her term of apprenticeship shall be
32permitted to take the certification examination and, upon passing
33the examination, shall be certified immediately upon completion
34of the term of apprenticeship.

begin delete

35(2) Certification is not required for any person employed
36pursuant to Section 26143.

end delete
begin insert

37(2) On or after January 1, 2019, an uncertified person may
38perform work for which certification is otherwise required in order
39to acquire the necessary on-the-job experience for certification
40provided that the person shall be under the direct supervision of
P40   1a cannabis employee certified pursuant to Section 26141 who is
2responsible for supervising no more than one uncertified person.

end insert
begin insert

3(3) The Division of Labor Standards Enforcement may develop
4additional criteria governing this subdivision.

end insert
begin delete

5(d)

end delete
6begin insert

begin insert26141.5.end insert  

end insert

begin insert(a)end insert The following shall constitute additional grounds
7for disciplinary proceedings, including suspension or revocation
8of thebegin delete conditionalend delete license issued pursuant to this chapter:

9(1) Thebegin delete licensed cultivation site or licensed dispensing facilityend delete
10begin insert licenseeend insert willfully employs one or more uncertified persons to
11perform work as cannabis employees in violation of thisbegin delete section
12or Section 26143.end delete
begin insert section.end insert

13(2) Thebegin delete licensed cultivation site or licensed dispensing facilityend delete
14begin insert licenseeend insert willfully fails to provide adequate supervision of
15uncertifiedbegin delete workers required by paragraph (3) of subdivision (a)
16of Section 26143.end delete
begin insert workers.end insert

17(3) Thebegin delete licensed cultivation site or licensed dispensing facilityend delete
18begin insert licenseeend insert willfully fails to provide adequate supervision of
19apprentices performing work pursuant tobegin insert paragraph (1) ofend insert
20 subdivisionbegin delete (c).end deletebegin insert (c) of Section 26141.end insert

begin delete

21(e)

end delete

22begin insert(b)end insert The Labor Commissioner shall maintain a process for
23referring cases to the Division of Medical Cannabis Regulation
24and Enforcement when it has been determined that a violation of
25this section has likely occurred. The Labor Commissioner shall
26have a memorandum of understanding with the Division of Medical
27Cannabis Regulation and Enforcement in furtherance of this
28section.

begin delete

29(f)

end delete

30begin insert(c)end insert Upon receipt of a referral by the Labor Commissioner
31alleging a violation under this section, the Division of Medical
32Cannabis Regulation and Enforcement shall open an investigation.
33Disciplinary action against the licensee shall be initiated within
3460 days of the receipt of the referral. The Division of Medical
35Cannabis Regulation and Enforcement may initiate disciplinary
36action against a licensee upon his or her own investigation, the
37filing of a complaint, or a finding that results from a referral from
38the Labor Commissioner alleging a violation under this section.
39Failure of the employer or employee to provide evidence of
P41   1certification or apprentice status shall create a rebuttable
2presumption of violation of this provision.

begin insert

3(d) This section shall become operative on January 1, 2019.

end insert
begin delete
4

26142.  

The Division of Labor Standards Enforcement shall do
5all of the following:

6(a) Make information about cannabis employee certification
7available in languages other than English to the extent the Division
8of Labor Standards Enforcement finds appropriate.

9(b) Provide for the administration of certification tests in Spanish
10and, to the extent practicable, other languages spoken by a
11substantial number of applicants, except when the ability to
12understand warning signs, instructions, and certain other
13information in English is necessary for safety, cultivation, and
14dispensing.

15(c) Ensure, in conjunction with the California Apprenticeship
16 Council, that all cannabis apprenticeship programs that impose
17minimum formal education requirements as a condition of entry
18provide for reasonable alternative means of satisfying those
19requirements.

20(d) Ensure, in conjunction with the California Apprenticeship
21Council, that all cannabis apprenticeship programs have adopted
22reasonable procedures for granting credit toward a term of
23apprenticeship for other vocational training and on-the-job training
24experience.

25

26143.  

(a) An uncertified person may perform work for which
26certification is otherwise required in order to acquire the necessary
27on-the-job experience for certification if all of the following
28requirements are met:

29(1) The person is registered with the Division of Labor Standards
30Enforcement. A list of current registrants shall be maintained by
31the Division of Labor Standards Enforcement and made available
32to the public upon request.

33(2) The person either has completed or is enrolled in an approved
34curriculum of classroom instruction.

35(3) The employer attests that the person shall be under the direct
36supervision of a cannabis employee certified pursuant to Section
3726140 who is responsible for supervising no more than one
38uncertified person. An employer who is found by the Division of
39Labor Standards Enforcement to have failed to provide adequate
P42   1supervision may be barred from employing uncertified individuals
2in the future.

3(b) For purposes of this section, “an approved curriculum of
4classroom instruction” means a curriculum of classroom instruction
5approved by the committee and provided under the jurisdiction of
6the State Department of Education, the Board of Governors of the
7California Community Colleges, or the Bureau for Private
8Postsecondary and Vocational Education.

9(c) The committee may grant approval to an educational provider
10that presently offers only a partial curriculum if the educational
11provider intends in the future to offer, or to cooperate with other
12educational providers to offer, a complete curriculum for the type
13of certification involved. The committee may require an
14educational provider receiving approval for a partial curriculum
15to periodically renew its approval with the committee until a
16complete curriculum is offered and approved.

17(d) An educational provider that receives approval for a partial
18curriculum shall disclose in all communications to students and
19to the public that the educational provider has only received
20approval for a partial curriculum and shall not make any
21representations that the provider offers a complete approved
22curriculum of classroom instruction.

23(e) For purposes of this section, a person is enrolled in an
24approved curriculum of classroom instruction if the person is
25attending classes on a full-time or part-time basis toward the
26completion of an approved curriculum.

27(f) Registration under this section shall be renewed annually
28and the registrant shall provide to the Division of Labor Standards
29Enforcement certification of the classwork completed and
30on-the-job experience acquired since the prior registration.

31(g) For purposes of verifying the information provided by a
32person registered with the Division of Labor Standards
33Enforcement, an educational provider shall provide an approved
34curriculum of classroom instruction, and shall, upon the Division
35of Labor Standards Enforcement’s request, provide the Division
36of Labor Standards Enforcement with information regarding the
37enrollment status and instruction completed by an individual
38registered. By registering with the Division of Labor Standards
39Enforcement in accordance with this section, the individual
40consents to the release of this information.

P43   1(h) The Division of Labor Standards Enforcement shall establish
2registration fees in an amount reasonably necessary to implement
3this section, not to exceed twenty-five dollars ($25) for the initial
4registration. There shall be no fee for annual renewal of
5registration. Fees shall be deposited into the Medical Cannabis
6Control Fund established pursuant to Section 26028 for
7reimbursement of the costs of the Division of Labor Standards
8Enforcement in administering this article.

9(i) Notwithstanding any other law, an uncertified person who
10has completed an approved curriculum of classroom instruction
11and is currently registered with the Division of Labor Standards
12Enforcement may take the certification examination. The person
13shall be certified upon passing the examination and satisfactorily
14completing the requisite number of on-the-job hours required for
15certification. A person who passes the examination prior to
16completing the requisite hours of on-the-job experience shall
17continue to comply with subdivision (f).

end delete
18

SEC. 6.  

Section 23028 is added to the Government Code, to
19read:

20

23028.  

(a) (1) In addition to any authority otherwise provided
21by law, the board of supervisors of any county may impose, by
22ordinance, a tax on the privilege of cultivating, dispensing,
23producing, processing, preparing, storing, providing, donating,
24selling, or distributingbegin delete marijuanaend deletebegin insert cannabisend insert by a licensee operating
25pursuant to the Medical Cannabis Regulation and Control Act
26(Chapter 18 (commencing with Section 26000) of Division 9 of
27the Business and Professions Code). The tax may be imposed for
28general governmental purposes or for purposes specified in the
29ordinance by the board of supervisors.

30(2) The board of supervisors shall specify in the ordinance
31proposing the tax the activities subject to the tax, the applicable
32rate or rates, the method of apportionment, and the manner of
33collection of the tax. A tax imposed pursuant to this section is a
34tax and not a fee or special assessment, and the tax is not required
35to be apportioned on the basis of benefit to any person or property
36or be applied uniformly to all taxpayers or all real property.

37(3) A tax imposed by a county pursuant to this section by a
38county may include a transactions and use tax imposed solely for
39begin delete marijuanaend deletebegin insert cannabisend insert orbegin delete marijuanaend deletebegin insert cannabisend insert products, which shall
40otherwise conform to Part 1.6 (commencing with Section 7251)
P44   1of Division 2 of the Revenue and Taxation Code. Notwithstanding
2Section 7251.1 of the Revenue and Taxation Code, the tax may
3be imposed at any rate specified by the board of supervisors, and
4the tax rate authorized by this section shall not be considered for
5purposes of the combined tax rate limitation established by that
6section.

7(4) The tax authorized by this section may be imposed upon
8any or all of the activities set forth in paragraph (1), regardless of
9whether the activity is undertaken individually, collectively, or
10cooperatively, and regardless of whether the activity is for
11compensation or gratuitously, as determined by the board of
12supervisors.

13(5) The board of supervisors shall specify whether the tax applies
14throughout the entire county or within the unincorporated area of
15the county.

16(b) In addition to any other method of collection authorized by
17law, the board of supervisors may provide for the collection of the
18tax imposed pursuant to this section in the same manner, and
19subject to the same penalties and priority of lien, as other charges
20and taxes fixed and collected by the county.

21(c) Any tax imposed pursuant to this section shall be subject to
22applicable voter approval requirements imposed by any other law.

23(d) For purposes of this section, “marijuana” shall have the
24meanings set forth in Section 26002 of the Business and
25Professions Code.

26(e) This section does not limit or prohibit the levy or collection
27or any other fee, charge, or tax, or any license or service fee or
28charge upon, or related to, the activities set forth in subdivision
29(a) as otherwise provided by law. This section shall not be
30construed as a limitation upon the taxing authority of any county
31as provided by other law.

32(f) The total taxation of state and local authorities shall not be
33in excess of 25 percent of retail prices.

34

SEC. 7.  

Section 11362.775 of the Health and Safety Code is
35amended to read:

36

11362.775.  

(a) Qualified patients, persons with valid
37identification cards, and the designated primary caregivers of
38qualified patients and persons with identification cards, who
39associate within the State of California in order collectively or
40cooperatively to cultivate marijuana for medical purposes, shall
P45   1not solely on the basis of that fact be subject to state criminal
2sanctions under Section 11357, 11358, 11359, 11360, 11366,
311366.5, or 11570.

4(b) Commencing 180 days following the issuance of provisional
5licenses pursuant to the Medical Cannabis Regulation and Control
6Act (Chapter 18 (commencing with Section 26000) of Division 9
7of the Business and Professions Code), subdivision (a) shall not
8apply to licensees under that act. The Division of Medical Cannabis
9Regulation and Enforcement shall post a notice on its Internet Web
10site indicating when it has commenced issuing provisional licenses
11and when thebegin delete 180 dayend deletebegin insert 180-dayend insert period has been exhausted.

begin delete
12

SEC. 8.  

Section 1155.7 of the Labor Code is amended to read:

13

1155.7.  

(a) Nothing in this chapter shall be construed to apply
14or be applicable to a labor organization in its representation of
15workers who are not agricultural employees. Any such labor
16organization shall continue to be governed in its intrastate activities
17for nonagricultural workers by Section 923 and applicable judicial
18precedents.

19(b) To the extent not prohibited by law and for purposes of this
20chapter, “agricultural employer” includes a medical cannabis
21cultivation site licensed pursuant to the Medical Cannabis
22Regulation and Control Act (Chapter 18 (commencing with Section
2326000) of Division 9 of the Business and Professions Code).

24

SEC. 9.  

Section 1158.5 is added to the Labor Code, to read:

25

1158.5.  

(a) The Division of Occupational Safety and Health
26in the Department of Industrial Relations shall develop
27industry-specific regulations related to the activities of facilities
28issued a medical cannabis license pursuant to Medical Cannabis
29Regulation and Control Act (Chapter 18 (commencing with Section
3026000) of Division 9 of the Business and Professions Code),
31including provisions for the establishment of labor peace
32agreements and an apprenticeship program to ensure professional
33standards among industry employees.

34(b) The regulations shall govern agreements between a facility
35issued a conditional license and a bona fide labor organization
36prohibiting labor organizations and members from engaging in
37picketing, work stoppages, boycotts, and other economic
38interference with the licensee’s business. The regulations shall
39also govern agreements whereby the licensee has agreed not to
40disrupt efforts by the bona fide labor organization to communicate
P46   1with, and attempt to organize and represent, the licensee’s
2employees.

end delete
3begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 147.5 is added to the end insertbegin insertLabor Codeend insertbegin insert, to read:end insert

begin insert
4

begin insert147.5.end insert  

(a) By January 1, 2017, the division shall convene an
5advisory committee to evaluate whether there is a need to develop
6industry-specific regulations related to the activities of facilities
7issued a license pursuant to Chapter 18 (commencing with Section
826000) of Division 9 of the Business and Professions Code.

9(b) By July 1, 2017, the advisory committee shall present to the
10board its findings and recommendations for consideration by the
11board. By July 1, 2017, the board shall render a decision regarding
12the adoption of industry-specific regulations pursuant to this
13section.

end insert
14

begin deleteSEC. 10.end delete
15begin insertSEC. 9.end insert  

Section 3094 is added to the Labor Code, to read:

16

3094.  

The Division of Apprenticeship Standards shall
17investigate, approve, or reject applications for apprenticeship
18programs for employees of a licenseebegin delete pursuant to the Medical
19Cannabis Regulation and Control Act (Chapter 18 (commencing
20with Section 26000) of Division 9end delete
begin insert subject to Article 6 (commencing
21with Section 26140) of Chapter 18end insert
begin insert of Division 9end insert of the Business
22and Professionsbegin delete Code).end deletebegin insert Code.end insert The Division of Apprenticeship
23Standards shall adopt regulations necessary to implement and
24regulate the establishment of the apprenticeship programs described
25in this section.

26

begin deleteSEC. 11.end delete
27begin insertSEC. 10.end insert  

The provisions of this act are severable. If any
28provision of this act or its application is held invalid, that invalidity
29shall not affect other provisions or applications that can be given
30effect without the invalid provision or application.

begin delete
31

SEC. 12.  

The Legislature finds and declares that Section 5 of
32this act imposes a limitation on the public’s right of access to
33documents in the possession of a public agency within the meaning
34of Section 3 of Article I of the California Constitution. Pursuant
35to that constitutional provision, the Legislature makes the following
36finding to demonstrate the interest protected by this limitation and
37the need for protecting that interest:

38It is necessary to maintain the confidentiality of patient and
39physician information provided to the Division of Medical
40Cannabis Regulation and Enforcement in order to protect the
P47   1private medical information of patients who use medical cannabis
2and to preserve the essential confidentiality of the physician and
3patient relationship.

end delete
4begin insert

begin insertSEC. 11.end insert  

end insert
begin insert

The Legislature finds and declares that Section 5 of
5this act, which adds Chapter 18 (commencing with Section 26000)
6to Division 9 of the Business and Professions Code, imposes a
7limitation on the public’s right of access to the meetings of public
8bodies or the writings of public officials and agencies within the
9meaning of Section 3 of Article I of the California Constitution.
10Pursuant to that constitutional provision, the Legislature makes
11the following findings to demonstrate the interest protected by this
12limitation and the need for protecting that interest:

end insert
begin insert

13It is necessary to maintain the confidentiality of patient and
14physician information provided to the Division of Medical
15Cannabis Regulation and Enforcement in order to protect the
16private medical information of patients who use medical cannabis
17and to preserve the essential confidentiality of the physician and
18patient relationship.

end insert
19

begin deleteSEC. 13.end delete
20begin insertSEC. 12.end insert  

No reimbursement is required by this act pursuant to
21Section 6 of Article XIII B of the California Constitution for certain
22costs that may be incurred by a local agency or school district
23because, in that regard, this act creates a new crime or infraction,
24eliminates a crime or infraction, or changes the penalty for a crime
25or infraction, within the meaning of Section 17556 of the
26Government Code, or changes the definition of a crime within the
27meaning of Section 6 of Article XIII B of the California
28Constitution.

29However, if the Commission on State Mandates determines that
30this act contains other costs mandated by the state, reimbursement
31to local agencies and school districts for those costs shall be made
32pursuant to Part 7 (commencing with Section 17500) of Division
334 of Title 2 of the Government Code.



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