BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 243


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          (Without Reference to File)





          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          243 (Wood)


          As Amended September 11, 2015


          Majority vote


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          |ASSEMBLY:  |      |(June 3, 2015) |SENATE: |      | (September 11,  |
          |           |60-15 |               |        |      |2015)            |
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          |           |      |               |        |      |                 |
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                                               (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:










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           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.








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           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  








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             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,









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              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.  









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           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  








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             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.  








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          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










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