BILL ANALYSIS Ó AB 243 Page 1 (Without Reference to File) CONCURRENCE IN SENATE AMENDMENTS AB 243 (Wood) As Amended September 11, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | |(June 3, 2015) |SENATE: | | (September 11, | | |60-15 | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- (vote not available) Original Committee Reference: AGRI. SUMMARY: Establishes a regulatory program for the cultivation of medical cannabis, as part of the Medical Marijuana Regulation and Safety Act (MMRSA). The Senate amendments delete the Assembly version of this bill and instead: AB 243 Page 2 1) Make findings related to the environmental impacts associated with marijuana cultivation and the complex nature of remediating marijuana cultivation sites, and that: a) The federal government, including the United States Environmental Protection Agency, has not regulated pesticide use in medical cannabis. b) Lawful growers of medical cannabis urge the California Department of Pesticide Regulation to provide guidance on the use of pesticides. 2) Require Department of Fish and Wildlife (DFW), in consultation with State Water Resources Control Board (SWRCB), to establish a multiagency task force to address environmental impacts associated with marijuana cultivation. 3) Require DFW to adopt regulations to enhance the fees on any entity cultivating marijuana that impacts a bed, channel or bank of any river, stream or lake, pursuant to Fish and Game Code Section 1602, as specified. 4) Require the multiagency task force, established pursuant to Water Code Section12029, DFW and the existing SWRCB pilot project, established to respond to damages caused by marijuana cultivation, to continue enforcement efforts on permanent basis statewide to ensure the reduction of adverse impacts of marijuana cultivation on water quality and fish and wildlife. 5) Require each regional board, and permits SWRCB, to address discharges of waste resulting from medical marijuana cultivation and associated activities, including adopting a general permit or establishing waste discharge requirements or waivers as specified. 6) Require a state license to cultivate marijuana and require the California Department of Food and Agriculture (CDFA) to establish a Medical Cannabis Cultivation Program in order to license the cultivation of indoor and outdoor medical marijuana. AB 243 Page 3 7) Establish classes of cultivation licenses based on the size of the operation and the location. 8) Require CDFA to establish a program to uniquely identify medical marijuana plants, in consultation with SWRCB and DFW that meets the following conditions: a) The program must issue a unique identifier to each plant that enables identification of permitted plants as they are being cultivated; b) The unique identifier must be attached to the base of the marijuana plant and must only be issued to licensed individuals; c) CDFA must take steps to prevent fraudulent identifiers and illegal diversion of unique identifiers to unlicensed cultivators; and, d) In implementing the program, CDFA must consider water use and environmental impacts and ensure that individual and cumulative effects of water diversion do not affect the instream flows needed for fish spawning, natural variability, or springs and other aquatic habitats. 9) Authorize CDFA to develop and implement regulations to carry out the licensing program authorized under this bill and to regulate weighing and measuring devices used to meet the MMRSA's requirements. 10)State that nothing in MMRSA supersedes the authority of SWRCB, regional water boards, or DFW. 11)Authorize a city, county, or city and county, through its current or future land use regulations or ordinance, to issue or deny permits that allow the cultivation of medical marijuana, with the condition that the permit does not become active until the cultivator receives a state license and AB 243 Page 4 final local approval. 12)Require any local licensing requirements, including the unique identifier program, to be equivalent to or more stringent than CDFA's licensing requirements. 13)Prohibit a cultivator from applying for a state license if they have not received the required local approval, or if the local government has prohibited medical marijuana cultivation. 14)Establish CDFA as the sole regulator in any local jurisdiction that has not implemented a local permitting system by March 1, 2016. 15)State that the cultivation licensing program does not apply to a qualified patient if he or she does not cultivate greater than 100 square feet, nor a caregiver if the caregiver does not cultivate greater than 500 square feet and does not supply more than five qualified patients and meet certain other requirements. 16)Require each licensing authority which enacts the Medical Marijuana Public Safety and Environmental Protection Act - to levy fees adequate to cover the reasonable regulatory costs of administering the MMRSA. These fees must be: a) Charged to fairly and proportionately cover the total cost of administering MMRSA; b) Scaled based on the size of the business charged the fee; c) Deposited in the Medical Marijuana Regulation and Safety Act Fund (MMRSAF), as created by this bill; and, AB 243 Page 5 d) Used, upon appropriation of the Legislature, by the licensing authorities to administer MMRSA. 17)Establish civil penalties for engaging in cannabis activity without the required licenses and unique identifiers of up to twice the cost of the appropriate licensing fee per day of violation, to be paid as follows: a) If the Attorney General brings action, to the General Fund; b) If a district attorney or county counsel brings action, to the treasurer of the county in which the judgment was entered; and, c) If a city attorney or city prosecutor, to the treasurer of the city or city and county in which the judgment was entered, unless the case is adjudicated in a superior court in the unincorporated area or in another city, in which case the penalty shall be split evenly between the treasurers in the two jurisdictions. 18)Authorize the destruction of medical cannabis associated with any civil penalties. 19)Provide for a General Fund or special fund loan, including up to $10 million from the General Fund, to the Bureau of Medical Marijuana Regulation (Bureau) as established by AB 266, to support the initial regulatory activities authorized by MMRSA. 20)Require repayment of any initial loans for regulatory activities to be repaid by January 1, 2022, from the regulatory fees charged by the licensing authorities and, if necessary, from the Medical Cannabis Fines and Penalties Account. 21)Require the Bureau to establish a grant program to fund activities by state and local law enforcement to remedy the environmental effects of cannabis cultivation, payable from fines and penalties charged pursuant to the bill after all outstanding loans for the program are repaid. AB 243 Page 6 22)Appropriate $10 million from MMRSAF to the Department of Consumer Affairs to begin the activities of the Bureau. 23)Provide that provisions relating to Joint Sunset Review Committee oversight do not apply to the Bureau. 24)End the legal effect of current law stating patients, individuals with identification cards, or their caregivers, who associate in California to collectively and cooperatively cultivate marijuana for medical purposes shall not solely, on the basis of that fact, be subject to state criminal sanctions when the Bureau posts a notice on its Internet Web site that licensing authorities have commenced issuing licenses. 25)Direct the Board of Equalization (BOE) to adopt a system to report the movement of commercial cannabis and cannabis products throughout the distribution chain, which must not duplicate CDFA's track and trace program. The system must capture specified information regarding: a) Amount of tax due by the designated entity; b) Name, address, and license number of the designated entity remitting the tax; c) Name, address, and license number of the succeeding entity receiving the product; d) The transaction date; and, e) Any other information deemed necessary by BOE for the taxation and regulation of marijuana and marijuana products. 26)State that no reimbursement for local costs is required AB 243 Page 7 because this bill creates a new crime or infraction, among other reasons, but requires reimbursement of local agencies pursuant to existing law if the Commission on State Mandates determines that the bill contains other mandated costs. 27)State that the measure only becomes active upon the enactment and operation of AB 266 and SB 643. FISCAL EFFECT: Unknown. This bill has been keyed fiscal by Legislative Counsel. COMMENTS: Proposition 215, the Compassionate Use Act (CUA) of 1996, provides certain legal protections for qualified patients and caregivers that possess or cultivate marijuana. In addition to Proposition 215, the Legislature passed the Medical Marijuana Program Act, which extends certain legal protections to those that collectively or cooperatively cultivate marijuana for medical purposes. Marijuana is still illegal under state and federal law. By exempting qualified patients and caregivers from prosecution for using or from cultivating medical marijuana (MM), California law basically allows for the cultivation and use of MM. These laws have triggered the growth of MM dispensaries in many localities, and in response, local governments have sought to exercise their police powers to regulate or ban activities relating to MM. For many years there was uncertainty about the ability of local governments to control MM activities, specifically MM dispensaries location and ability to operate. The California Supreme Court (Court), in 2013 held that California's MM statutes do not preempt a local ban on facilities that distribute medical marijuana. The Court held that nothing in the CUA expressly or implied limited the authority of a local jurisdiction, to regulate the use of its land, including the authority to provide that facilities for the distribution of MM will not be permitted to operate within its borders. This has allowed many California jurisdictions to ban the cultivation and sale of MM altogether. AB 243 Page 8 There are limited environmental regulations for cannabis cultivation, which have caused environmental damage to the North Coast region of the State. The author point out that the environmental degradation cause by marijuana growers needs to be addressed. In 2014, Governor Brown responded by approving $1.8 million to create a pilot program in Northern California called the "Watershed Enforcement Team" (WET). WET charged the State Water Board along with the North Coast Regional Water Board to create guidelines that address wastewater discharges from MM cultivation. According to the author, this bill continues the work of WET by establishing parameters that can guide statewide standards and to create regulations around a product that has never been regulated in California. The cultivation of marijuana has caused significant damage to California's natural environment. The potential for future damage is made all the greater by the lack of regulation of the medical marijuana industry, and in particular, the cultivation of medical marijuana. This bill creates a regulatory framework around cultivation. The unique identification program allows for the tracking of medicinal marijuana plants to ensure that marijuana is not being diverted to the black market and also allows law enforcement to determine which plants are legally being cultivated for medical purposes and which are being illegally cultivated. This enables swifter eradication actions against illegal grows while avoiding the accidental eradications of legal medicinal plantings. This need is made all the more dire by the current drought, which exacerbates the harm caused by the illegal diversion of water to cultivate marijuana. Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084 FN: 0002434 AB 243 Page 9