Amended in Assembly May 11, 2015

Amended in Assembly May 5, 2015

Amended in Assembly April 14, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 266


Introduced by Assembly Member Cooley

(Coauthor: Assembly Member Lackey)

February 10, 2015


An act to amend Section 2220.05 of, to add Article 25 (commencing with Section 2525) to Chapter 5 of Division 2 of, and to add Part 5 (commencing with Section 18100) to Division 7 of, the Business and Professions Code, to add Section 23028 to the Government Code, to amend Section 11362.775 of, and to add Article 8 (commencing with Section 111658) to Chapter 6 of Part 5 of Division 104 of, the Health and Safety Code, and to amend Section 1155.7 of, and to add Sections 147.5 and 3094 to, the Labor Code, relating to medical marijuana, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 266, as amended, Cooley. Medical marijuana.

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 6, 1996, statewide general election, authorizes the use of marijuana for medical purposes. Existing law enacted by the Legislature requires the establishment of a program for the issuance of identification cards to qualified patients so that they may lawfully use marijuana for medical purposes, and requires the establishment of guidelines for the lawful cultivation of marijuana grown for medical use. Existing law provides for the licensure of various professions by the Department of Consumer Affairs. Existing law, the Sherman Food, Drug, and Cosmetic Law, provides for the regulation of food, drugs, devices, and cosmetics, as specified. A violation of that law is a crime.

This bill would establish within the Department of Consumer Affairs a Bureau of Medical Marijuana Regulation, under the supervision and control of the Chief of the Bureau of Medical Marijuana Regulation, and would require the bureau to license and regulate dispensing facilities, cultivation sites, transporters, and manufacturers of medical marijuana and medical marijuana products, subject to local ordinances. The bill would require a background check of applicants for licensure, as defined, to be administered by the Department of Justice, and submission of a statement signed by an applicant, under penalty of perjury, that the information on his or her application is true, thereby creating a crime and imposing a state-mandated local program. Violation of the provisions related to applying for a conditional license would be punishable by a civil fine of up to $35,000 for each individual violation, or as otherwise specified.

The bill would make conditional licenses subject to the restrictions of the local jurisdiction in which the facility operates or proposes to operate. The bill would set forth provisions related to the transportation, testing, and distribution of medical marijuana. The bill would prohibit the distribution of any form of advertising for physician recommendations for medical marijuana, unless the advertisement bears a specified notice and requires that the advertisement meet specified requirements and not be fraudulent, deceitful, or misleading.

The bill would require the State Department of Public Health to promulgate standards for the certification of testing laboratories to perform random sample testing of all medical marijuana products, including standards for onsite testing.

The bill would establish a system of certification for cannabis employees. The bill would require the Division of Labor Standards Enforcement to maintain and enforce minimum standards of competency and training and to certify cannabis employees.

The bill would establish the Medical Marijuana Regulation Fund and would require the deposit of specified fees collected pursuant to this act into the fund. The bill would continuously appropriate moneys from the fund to the bureau for the purposes of administering this act, thereby making an appropriation. The bill would also establish the Special Account for Environmental Enforcement within the Medical Marijuana Fund. This account would contain money from fees assessed against licensed cultivation facilities and would be continuously appropriated for the enforcement of environmental regulations relating to licensed cultivation sites. The bill would require the deposit of penalty moneys collected pursuant to this bill into the General Fund.

The bill would provide that it shall not supersede provisions of Measure D, as approved by the voters of the City of Los Angeles, as specified.

The bill would require the bureau, in consultation with local governments, to develop an enforcement framework that clarifies the enforcement roles of state and local governments, as specified, and would authorize a city, county, or city and county to administer and enforce these provisions. The bill would require the bureau to establish quality assurance protocols by July 1, 2017, to ensure uniform testing standards of medical marijuana, and would require licensees to comply with these provisions. The bill would further set forth provisions regulating edible medical marijuana products, as specified. By adding these provisions to the Sherman Food, Drug, and Cosmetic Law, a violation of which is a crime, the bill would impose a state-mandated local program.

(2) Existing law establishes the Division of Apprenticeship Standards, which audits and regulates apprenticeship programs for various trades, including electricians.

This bill would require the division to investigate, approve, or reject applications for apprenticeship employees of a licensed cultivation site or a licensed dispensing facility, as defined.

(3) Existing law, the Medical Practice Act, provides for the licensure and regulation of physicians and surgeons by the Medical Board of California. Existing law requires the board to prioritize investigations and prosecutions of physicians and surgeons representing the greatest threat of harm, as specified. Existing law identifies the cases that are to be given priority, which include cases of repeated acts of excessively prescribing, furnishing, or administering controlled substances without a good faith prior examination of the patient. Existing law provides that a violation of the Medical Practice Act is a crime.

This bill would require the board to consult with the Center for Medicinal Cannabis Research on developing and adopting medical guidelines for the appropriate administration and use of marijuana.

The bill would also make it a misdemeanor for a physician and surgeon who recommends marijuana to a patient for a medical purpose to accept, solicit, or offer any remuneration from or to a licensed dispensing facility in which the physician and surgeon or his or her immediate family has a financial interest. By creating a new crime, the bill would impose a state-mandated local program.

The bill would provide that specified acts of recommending marijuana for medical purposes without a good faith examination are among the types of cases that should be given priority for investigation and prosecution by the board, as described above. The bill would further prohibit a physician and surgeon from recommending medical marijuana to a patient unless that person is the patient’s attending physician, as defined. Because a violation of that provision would be a crime, the bill would impose a state-mandated local program.

(4) Existing law authorizes the legislative body of a city or county to impose various taxes, including a transactions and use tax at a rate of 0.25%, or a multiple thereof, if approved by the required vote of the legislative 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 a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing marijuana or products containing marijuana. 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.

(5) Existing law exempts qualified patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards from certain crimes, including possession of concentrated cannabis and marijuana, cultivation of marijuana, and possession of marijuana for sale.

This bill, commencing January 1, 2018, would also exempt from those crimes an employee, officer, or board member of a licensed cultivation site or a licensed dispensing facility, except as specified.

(6) Existing law regulates the labor practices of agricultural employers. Existing law establishes the Occupational Safety and Health Standards Board within the Department of Industrial Relations to adopt, amend, and repeal occupational safety and health standards and establishes the Division of Occupational Safety and Health to enforce those standards.

This bill would include licensed cultivation sites in the definition of agricultural employer. The bill would require the division to convene an advisory committee to evaluate whether there is a need to develop industry-specific regulations relating to facilities issued a conditional license.

(7) This bill would provide that its provisions are severable.

(8) 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.

This bill would make legislative findings to that effect.

(9) 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 no reimbursement is required by this act for a specified reason.

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

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

P5    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) In 1996, the people of the State of California enacted the
4Compassionate Use Act of 1996, codified in Section 11362.5 of
5the Health and Safety Code. The people of the State of California
6declared that their purpose in enacting the measure was, among
7other things, “to ensure that seriously ill Californians have the
8right to obtain and use marijuana for medical purposes where that
9medical use is deemed appropriate and has been recommended by
10a physician who has determined that the person’s health would
11benefit from the use of marijuana in the treatment of cancer,
12anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis,
13migraine, or any other illness for which marijuana provides relief.”

14(b) The Compassionate Use Act of 1996 called on state
15government to implement a plan for the safe and affordable
16distribution of marijuana to all patients in medical need of
17marijuana, while ensuring that nothing in that act would be
P6    1construed to condone the diversion of marijuana for nonmedical
2purposes.

3(c) In 2003, the Legislature enacted the Medical Marijuana
4Program Act (MMPA), codified in Article 2.5 (commencing with
5Section 11362.7) of Chapter 6 of Division 10 of the Health and
6Safety Code.

7(d) Greater certainty and minimum statewide standards are
8urgently needed regarding the obligations of medical marijuana
9facilities, and for the imposition and enforcement of regulations
10to prevent unlawful cultivation and the diversion of marijuana to
11nonmedical use.

12(e) Despite the passage of the Compassionate Use Act of 1996
13and the MMPA, because of the lack of an effective statewide
14system for regulating and controlling medical marijuana, cities,
15counties and local law enforcement officials have been confronted
16with uncertainty about the legality of some medical marijuana
17cultivation and distribution activities. The current state of affairs
18makes law enforcement difficult and endangers patient safety
19because of an inability to monitor the supply of medical marijuana
20in the state and the lack of quality control, testing, and labeling
21requirements.

22(f) The California Constitution grants cities and counties the
23authority to make and enforce, within their borders, “all local
24police, sanitary, and other ordinances and regulations not in conflict
25with the general laws.” This inherent local police power includes
26broad authority to determine, for purposes of public health, safety,
27and welfare, the appropriate uses of land within the local
28jurisdiction’s borders. The police power, therefore, allows each
29city and county to determine whether or not a medical marijuana
30dispensary or other facility that makes medical marijuana available
31may operate within its borders. This authority has been upheld by
32City of Riverside v. Inland Empire Patients Health and Wellness
33Center, Inc. (2013) 56 Cal.4th 729 and County of Los Angeles v.
34Hill (2011) 192 Cal.App.4th 861. Nothing in this act shall diminish,
35erode, or modify that authority.

36(g) If a city or county determines that a dispensary or other
37facility that makes medical marijuana available may operate within
38its borders, then there is a need for the state to license these
39dispensaries and other facilities for the purpose of adopting and
40enforcing protocols for security standards at dispensaries and in
P7    1the transportation of medical marijuana, as well as health and safety
2standards to ensure patient safety. This licensing requirement is
3not intended in any way nor shall it be construed to preempt local
4ordinances, regulations, or enforcement actions regarding the sale
5and use of medical marijuana, including, but not limited to,
6security, signage, lighting, and inspections.

7(h) All of the following are necessary to uphold important state
8goals:

9(1) Strict provisions to prevent the potential diversion of
10marijuana for recreational use.

11(2) Audits to accurately track the volume of both product
12movement and sales.

13(3) An effective means of restricting nonmedical access to
14medical marijuana by minors.

15(i) Nothing in this act shall be construed to promote or facilitate
16the nonmedical, recreational possession, sale, or use of marijuana.

17(j) Nothing in this act shall have a diminishing effect on the
18rights and protections granted to a patient or primary caregiver
19pursuant to the Compassionate Use Act of 1996.

20

SEC. 2.  

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

22

2220.05.  

(a) In order to ensure that its resources are maximized
23for the protection of the public, the Medical Board of California
24shall prioritize its investigative and prosecutorial resources to
25ensure that physicians and surgeons representing the greatest threat
26of harm are identified and disciplined expeditiously. Cases
27involving any of the following allegations shall be handled on a
28priority basis, as follows, with the highest priority being given to
29cases in the first paragraph:

30(1) Gross negligence, incompetence, or repeated negligent acts
31that involve death or serious bodily injury to one or more patients,
32such that the physician and surgeon represents a danger to the
33public.

34(2) Drug or alcohol abuse by a physician and surgeon involving
35death or serious bodily injury to a patient.

36(3) Repeated acts of clearly excessive prescribing, furnishing,
37or administering of controlled substances, or repeated acts of
38prescribing, dispensing, or furnishing of controlled substances, or
39recommending marijuana to patients for medical purposes, without
40a good faith prior examination of the patient and medical reason
P8    1therefor. However, in no event shall a physician and surgeon
2prescribing, furnishing, or administering controlled substances for
3intractable pain consistent with lawful prescribing, including, but
4not limited to, Sections 725, 2241.5, and 2241.6 of this code and
5Sections 11159.2 and 124961 of the Health and Safety Code, be
6prosecuted for excessive prescribing and prompt review of the
7applicability of these provisions shall be made in any complaint
8that may implicate these provisions.

9(4) Sexual misconduct with one or more patients during a course
10of treatment or an examination.

11(5) Practicing medicine while under the influence of drugs or
12alcohol.

13(b) The board may by regulation prioritize cases involving an
14allegation of conduct that is not described in subdivision (a). Those
15cases prioritized by regulation shall not be assigned a priority equal
16to or higher than the priorities established in subdivision (a).

17(c) The Medical Board of California shall indicate in its annual
18report mandated by Section 2312 the number of temporary
19restraining orders, interim suspension orders, and disciplinary
20actions that are taken in each priority category specified in
21subdivisions (a) and (b).

22

SEC. 3.  

Article 25 (commencing with Section 2525) is added
23to Chapter 5 of Division 2 of the Business and Professions Code,
24to read:

25 

26Article 25.  Recommending Medical Marijuana
27

 

28

2525.  

(a) It is unlawful for a physician and surgeon who
29recommends marijuana to a patient for a medical purpose to accept,
30solicit, or offer any form of remuneration from or to a facility
31issued a conditional license pursuant to Part 5 (commencing with
32Section 18100) of Division 7, if the physician and surgeon or his
33or her immediate family have a financial interest in that facility.

34(b) For the purposes of this section, “financial interest” shall
35have the same meaning as in Section 650.01.

36(c) A violation of this section shall be a misdemeanor.

37

2525.1.  

The Medical Board of California shall consult with
38the California Marijuana Research Program, known as the Center
39for Medicinal Cannabis Research, authorized pursuant to Section
4011362.9 of the Health and Safety Code, on developing and adopting
P9    1medical guidelines for the appropriate administration and use of
2medical marijuana.

3

2525.2.  

A physician and surgeon shall not recommend medical
4marijuana to a patient, unless that person is the patient’s attending
5physician, as defined by subdivision (a) of Section 11362.7 of the
6Health and Safety Code.

begin delete
7

2525.3.  

An examination conducted by the physician and
8surgeon involving the use of telehealth as defined in Section 2290.5
9of the Business and Professions Code, shall comply with applicable
10federal and state laws and regulations, including compliance with
11the regulations promulgated pursuant to the Health Insurance
12Portability and Accountability Act of 1996, found in Parts 160 and
13164 of Title 45 of the Code of Federal Regulations.

end delete
14

SEC. 4.  

Part 5 (commencing with Section 18100) is added to
15Division 7 of the Business and Professions Code, to read:

16 

17PART 5.  Medical Marijuana

18

18 

19Chapter  1. General Provisions
20

 

21

18100.  

For purposes of this part, the following definitions shall
22apply:

23(a) “Bureau” means the Bureau of Medical Marijuana Regulation
24in the Department of Consumer Affairs.

25(b) “Certified testing laboratory” means a laboratory that is
26certified by thebegin delete bureauend deletebegin insert State Department of Public Healthend insert to
27perform random sample testing of medical marijuana pursuant to
28the certification standards for these facilities promulgated by the
29bureau.

30(c) “Chief” means the Chief of the Bureau of Medical Marijuana
31Regulation.

32(d) “Delivery service” means an individual or entity issued a
33conditional license by the bureau pursuant to this part and a local
34license or permit, as specified in subdivision (c) of Section 18110,
35to deliver medical marijuana or medical marijuana products, up
36to an amount determined by the bureau, to patients, testing
37laboratories, or to events or locations where it will be used solely
38for promotional purposes. A delivery service shall not be required
39to obtain a transporter license.

40(e) “Department” means the Department of Consumer Affairs.

P10   1(f) “Director” means the Director of Consumer Affairs.

2(g) “Dispensary” means a distribution operation that provides
3medical marijuana or medical marijuana derived products to
4patients and caregivers.

5(h) “Edible marijuana product” means medical marijuana or
6medical marijuana-derived product that is ingested or meant to be
7ingested through the mouth and into the digestive system.

8(i) “Fund” means the Medical Marijuana Regulation Fund
9established pursuant to Section 18118.

10(j) “Labor peace agreement” means an agreement between an
11entity and a bona fide labor organization that, at a minimum,
12protects the state’s proprietary interests by prohibiting labor
13organizations and members from engaging in picketing, work
14stoppages, boycotts, and any other economic interference with the
15applicant’s business. The agreement means that the applicant has
16agreed not to disrupt efforts by the bona fide labor organization
17to communicate with, and attempt to organize and represent, the
18applicant’s employees.

19(k) “Licensed cultivation site” means a facility that plants,
20grows, cultivates, harvests, dries, or processes medical marijuana,
21or that does all or any combination of those activities, and that is
22issued a conditional license pursuant to this part and a local license
23or permit, as required by subdivision (c) of Section 18110.

24(l) “Licensed dispensing facility” means a dispensary or other
25facility that provides medical marijuana, medical marijuana
26products, or devices for the use of medical marijuana or medical
27marijuana products, either individually or in any combination, that
28is issued a conditional license pursuant to this part and a local
29license or permit, as required by subdivision (c) of Section 18110.

30(m) “Licensed manufacturer” means a person who extracts,
31prepares, derives, produces, compounds, or repackages medical
32marijuana or medical marijuana products into consumable and
33nonconsumable forms, or that does all or any combination of those
34activities, and that is issued a conditional license pursuant to this
35part and a local license or permit, as required by subdivision (c)
36of Section 18110.

37(n) “Licensed transporter” means an individual or entity issued
38a conditional license by the bureau to transport medical marijuana
39or medical marijuana products above a limit determined by the
P11   1bureau to and from facilities that have been issued conditional
2licenses pursuant to this part.

3(o) “Marijuana” means all parts of the plant Cannabis sativa,
4cannabis indica, or cannabis ruderalis, whether growing or not;
5the seeds thereof; the resin, whether crude or purified, extracted
6from any part of the plant; and every compound, manufacture, salt,
7derivative, mixture, or preparation of the plant, its seeds, or resin.
8“Marijuana” does not include the mature stalks of the plant, fiber
9produced from the stalks, oil or cake made from the seeds of the
10plant, any other compound, manufacture, salt, derivative, mixture,
11or preparation of the mature stalks (except the resin extracted
12therefrom), fiber, oil, or cake, or the sterilized seed of the plant
13which is incapable of germination. “Marijuana” also means
14 marijuana, as defined by Section 11018 of the Health and Safety
15Code.

16

18101.  

(a) There is hereby created in the Department of
17Consumer Affairs the Bureau of Medical Marijuana Regulation,
18under the supervision and control of the Chief of the Bureau of
19Medical Marijuana Regulation.

20(b) Protection of the public shall be the highest priority for the
21bureau in exercising its licensing, regulatory, and disciplinary
22functions. Whenever the protection of the public is inconsistent
23with other interests sought to be promoted, the protection of the
24public shall be paramount.

25(c) The bureau shall have the authority to issue conditional
26licenses for the cultivation, manufacture, transportation, storage,
27distribution, and sale of medical marijuana within the state and to
28collect fees in connection with these actions. The bureau shall have
29the authority to create other licenses in order to protect patient
30health and the public and to facilitate the regulation of medical
31marijuana.

32(d) The Governor shall appoint the chief at a salary to be fixed
33and determined by the director with the approval of the Director
34of Finance. The chief shall serve in accordance with the State Civil
35Service Act (Part 2 (commencing with Section 18500) of Division
365 of Title 2 of the Government Code).

37(e) The duty of enforcing and administering this part shall be
38vested in the chief, who is responsible to the director. The chief
39may adopt and enforce those rules and regulations that he or she
40determines are reasonably necessary to carry out the purposes of
P12   1this part and declaring the policy of the bureau, including a system
2for the issuance of citations for violations of this part, as specified
3in Section 18127.

4(f) The chief, as necessary to carry out the provisions of this
5part, and in accordance with the State Civil Service Act (Part 2
6(commencing with Section 18500) of Division 5 of Title 2 of the
7Government Code), may appoint and fix the compensation of
8personnel, including, but not limited to, clerical, inspection,
9investigation, and auditing personnel, as well as an assistant chief.
10These personnel shall perform their respective duties under the
11supervision and the direction of the chief.

12(g) Every power granted to, or duty imposed upon, the chief
13under this part may be exercised or performed in the name of the
14chief by a deputy or assistant chief, subject to conditions and
15limitations that the chief prescribes.

16(h) The bureau shall exercise its authority pursuant to this part
17 consistent with Section 1 of the act that added this section and
18consistent with the provisions of this part.

19

18102.  

Funds for the establishment and support of the bureau
20shall be advanced as a loan by the department and shall be repaid
21by the initial proceeds from fees collected pursuant to this part or
22any rule or regulation adopted pursuant to this part.

23

18103.  

The bureau shall have the authority necessary for the
24implementation of this part, including, but not limited to, all of
25the following:

26(a) Establishing rules or regulations necessary to carry out the
27purposes and intent of this part and to enable the bureau to exercise
28the powers and perform the duties conferred upon it by this part
29and in accordance with Chapter 3.5 (commencing with Section
3011340) of Part 1 of Division 3 of Title 2 of the Government Code.
31These rules and regulations shall not limit the authority of a city,
32county, or city and county specified in Section 18128, or specified
33in Section 7 of Article XI of the California Constitution, or any
34other law. For the performance of its duties, the bureau has the
35powers as set forth in Article 2 (commencing with Section 11180)
36of Chapter 2 of Part 1 of Division 3 of Title 2 of the Government
37Code.

38(b) Issuing conditional licenses to persons for the cultivation,
39manufacture, transportation, storage, distribution, and sale of
40medical marijuana within the state.

P13   1(c) Setting application, licensing, and renewal fees for
2conditional licenses issued pursuant to Section 18117.

3(d) Establishing standards for the cultivation, manufacturing,
4transportation, storage, testing, distribution, provision, donation,
5and sale of medical marijuana and medical marijuana products.

6(e) Establishing procedures for the issuance, renewal,
7suspension, denial, and revocation of conditional licenses.

8(f) Imposing a penalty authorized by this part or any rule or
9regulation adopted pursuant to this part.

10(g) Taking action with respect to an application for a conditional
11 license in accordance with procedures established pursuant to this
12part.

13(h) Overseeing the operation of the Medical Marijuana
14Regulation Fund and the Special Account for Environmental
15Enforcement, established pursuant to Section 18118.

16(i) Consulting with other state or local agencies, departments,
17representatives of the medical marijuana community, or public or
18private entities for the purposes of establishing statewide standards
19and regulations. The bureau shall, at a minimum, consult with the
20State Department of Public Health and the Department of Food
21and Agriculture when developing these standards.

22

18104.  

(a) On or before July 1, 2017, the bureau shall
23promulgate regulations for implementation and enforcement of
24this part, including, but not limited to, all of the following:

25(1) Procedures for the issuance, renewal, suspension, denial,
26and revocation of conditional licenses.

27(2) Procedures for appeal of fines and the appeal of denial,
28suspension, or revocation of conditional licenses.

29(3) Application, licensing, and renewal forms and fees.

30(4) A time period in which the bureau shall approve or deny an
31application for a conditional license pursuant to this part.

32(5) Qualifications for licensees.

33(6) Requirements to ensure that all licensees and certified testing
34laboratories conform with standards equivalent to state statutory
35environmental, agricultural, consumer protection, and food and
36product safety requirements. These standards shall be in addition
37to, and not limited to, any other state and local requirements. At
38a minimum, these standards shall do all of the following:

39(A) Prescribe sanitation standards analogous to the California
40Retail Food Code (Part 7 (commencing with Section 113700) of
P14   1Division 104 of the Health and Safety Code) for food preparation,
2storage, handling, and sale of edible medical marijuana products.

3(B) Require that edible medical marijuana products produced,
4distributed, provided, donated, or sold by licensees shall be limited
5to nonpotentially hazardous food, as established by the State
6Department of Public Health pursuant to Section 114365.5.

7(C) Require that facilities in which edible medical marijuana
8products are prepared shall be constructed in accordance with
9 applicable building standards, health and safety standards, and
10other state laws.

11(D) Provide that weighing or measuring devices used in
12connection with the sale or distribution of medical marijuana are
13required to meet standards analogous to Division 5 (commencing
14with Section 12001).

15(E) Require that the application of pesticides or other pest
16control in connection with the indoor or outdoor cultivation of
17medical marijuana shall meet standards analogous to Division 6
18(commencing with Section 11401) of the Food and Agricultural
19Code and its implementing regulations.

20(F) Require that indoor and outdoor marijuana cultivation by
21 licensees is conducted in accordance with state and local laws and
22best practices related to land conversion, grading, electricity usage,
23water usage, agricultural discharges, and similar matters.

24(7) Develop procedures to ensure that testing of marijuana
25occurs prior to delivery to dispensaries or any other business, and
26specify that the cost of testing shall be borne by the licensed
27cultivators, how often licensees shall test marijuana, and requiring
28destruction of harvested batches whose testing samples indicate
29noncompliance with health and safety standards promulgated by
30the bureau, unless remedial measures can bring the marijuana into
31compliance with quality assurance standards as promulgated by
32the bureau.

33(8) Establish minimum standards for quality assurance protocols
34implemented by each licensed facility pursuant to Section 18138.

35(b) On or before July 1, 2017, the bureau shall also promulgate
36regulations for minimum statewide health and safety standards
37and quality assurance standards associated with the cultivation,
38transport, storage, manufacture, and sale of all medical marijuana
39produced in this state. Consistent with Section 18126, local
P15   1agencies shall have primary responsibility for enforcement of these
2standards in accordance with bureau regulations.

3(c) The bureau shall not issue a conditional license unless the
4applicant has met all of the requirements of this part, including the
5requirements of subdivision (d) of Section 18110.

6

18104.5.  

(a) The State Department of Public Health shall
7promulgate standards for certification of testing laboratories to
8perform random sample testing of all medical marijuana products,
9including standards for onsite testing.

10(b) Certification of testing laboratories shall be consistent with
11general requirements for the competence of testing and calibration
12activities, including sampling, using standard methods established
13by the International Organization for Standardization, specifically
14ISO/IEC 17020 and ISO/IEC 17025.

15(c) These requirements shall apply to all entities, including
16third-party laboratories, engaged in the testing of medical marijuana
17pursuant to this part.

18

18105.  

The chief shall keep a complete record of all facilities
19issued a conditional license. The bureau shall, upon request,
20provide summary information on licensees consisting of the name
21of the licensee, the date the license was issued, the status of the
22license, and the licensees’s mailing address.

23

18106.  

The bureau shall establish procedures to provide state
24and local law enforcement, upon their request, with 24-hour access
25to information to verify a conditional license, track transportation
26manifests, and track the inventories of facilities issued a conditional
27license.

28

18107.  

This part shall in no way supersede the provisions of
29Measure D, approved by the voters of the City of Los Angeles on
30the May 21, 2013, ballot for the city, which granted medical
31marijuana businesses and dispensaries qualified immunity
32consistent with the terms of the measure and local ordinances.
33Notwithstanding the provisions of this part, marijuana businesses
34and dispensaries subject to the provisions of Measure D and its
35qualified immunity shall continue to be subject to the ordinances
36and regulations of the City of Los Angeles.

 

P16   1Chapter  2. Conditional Licenses
2

 

3

18108.  

The following persons are exempt from the requirement
4of licensure under this part:

5(a) A patient who cultivates, possesses, stores, manufactures,
6or transports marijuana exclusively for his or her personal medical
7use and who does not sell, distribute, donate, or provide marijuana
8to any other person or entity.

9(b) A primary caregiver who cultivates, possesses, stores,
10manufactures, transports, or provides marijuana exclusively for
11the personal medical purposes to no more than five specified
12qualified patients for whom he or she is the primary caregiver
13within the meaning of Section 11362.7 of the Health and Safety
14Code and who does not receive remuneration for these activities,
15except for compensation in full compliance with subdivision (c)
16of Section 11362.765 of the Health and Safety Code. Nothing in
17this section shall permit primary caregivers to organize themselves
18as cooperatives or collectives of caregivers.

19

18109.  

(a) Except as provided in Section 11362.5 of, and
20Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
21Division 10 of, the Health and Safety Code, a person shall not sell
22or provide medical marijuana to a patient or caregiver other than
23at a licensed dispensing facility or through delivery from a licensed
24dispensing facility.

25(b) Except as provided in Section 11362.5 of, and Article 2.5
26(commencing with Section 11362.7) of Chapter 6 of Division 10
27of, the Health and Safety Code, a person shall not grow medical
28marijuana other than at a licensed cultivation site.

29(c) Except as provided in Section 11362.5 of, and Article 2.5
30(commencing with Section 11362.7) of Chapter 6 of Division 10
31of, the Health and Safety Code, a person shall not manufacture
32medical marijuana or medical marijuana products other than a
33licensed manufacturer.

34(d) A person shall not transport medical marijuana from one
35facility issued a conditional license to another, other than a licensed
36transporter.

37(e) A licensed manufacturer may obtain medical marijuana from
38a licensed cultivator and may furnish medical marijuana products
39to a licensed dispensary.

P17   1(f) To meet the requirements of Article 8 (commencing with
2Section 111658) of Chapter 6 of Part 5 of Division 104 of the
3Health and Safety Code, medical marijuana and medical marijuana
4products shall be tested by a certified testing laboratory.

5(g) This section shall become operative on July 1, 2017.

6

18110.  

(a) Beginning July 1, 2017, the bureau shall provide
7for and shall issue conditional licenses. Conditional licenses shall
8be required for all activity authorized under this chapter, including,
9but not limited to, cultivation, storage, transport, and dispensing
10of medical marijuana. A license issued pursuant to this chapter is
11subject to compliance with all local ordinances and regulations
12determined to be applicable by the local government of the
13jurisdiction in which the licensee operates.

14(b) The issuance of a conditional license shall not, in and of
15itself, authorize the recipient to begin business operations. The
16conditional license shall certify, at a minimum, that the applicant
17has paid the state conditional licensing fee, successfully passed a
18criminal background check, and met the state residency
19requirements.

20(c)  A facility shall not commence activity under the authority
21of a conditional license until the applicant has obtained, in addition
22to the conditional license, a license or permit from the local
23jurisdiction in which he or she proposes to operate, following the
24requirements of the applicable local ordinances.

25(d) An applicant for a conditional license shall do all following:

26(1) Pay the fee or fees required by this part for each license
27being applied for.

28(2) Register with the bureau on forms prescribed by the chief.
29The forms shall contain sufficient information to identify the
30licensee, including all of the following:

31(A) Name of the owner or owners of a proposed facility,
32including all persons or entities having an ownership interest other
33than a security interest, lien, or encumbrance on property that will
34be used by the applicant.

35(B) The name, address, and date of birth of each principal officer
36and board member.

37(C) The address and telephone number of the proposed facility.

38(D) In the case of a cultivation site, the GPS coordinates of the
39site.

P18   1(E) In the case of a dispensary, the name and address of each
2licensed cultivation site and licensed manufacturer from which the
3dispensary will acquire or obtain medical marijuana or medical
4marijuana products.

5(3) Describe, in writing, the scope of business of the proposed
6facility.

7(4) Provide evidence that the applicant and owner have been
8legal full-time residents of the state for not less than 12 months.

9(5) Provide detailed operating procedures, in writing, for the
10proposed facility, which shall include, but not be limited to,
11procedures for facility and operational security, prevention of
12diversion, employee screening, storage of medical marijuana,
13personnel policies, and recordkeeping procedures.

14(6) Provide the applicant’s fingerprint images. For purposes of
15this paragraph, “applicant” means the owner or owners of a
16proposed facility, including all persons or entities having an
17ownership interest other than a security interest, lien, or
18encumbrance on property that will be used by the facility. If the
19owner is an entity, fingerprints shall be submitted for each person
20participating in the direction, control, or management of, or having
21a financial interest in, the proposed facility.

22(A) The applicant shall electronically submit to the Department
23of Justice fingerprint images and related information required by
24the Department of Justice for the purpose of obtaining information
25as to the existence and content of a record of state or federal
26convictions and arrests, and information as to the existence and
27content of a record of state or federal convictions and arrests for
28which the Department of Justice establishes that the person is free
29on bail, or on his or her own recognizance, pending trial or appeal.

30(B) The Department of Justice shall provide a response to the
31bureau pursuant to paragraph (1) of subdivision (p) of Section
3211105 of the Penal Code.

33(C) The bureau shall request from the Department of Justice
34subsequent notification service, as provided pursuant to Section
3511105.2 of the Penal Code, for persons described in subparagraph
36(A).

37(D) The Department of Justice shall charge the applicant a fee
38sufficient to cover the reasonable cost of processing the requests
39 described in this paragraph.

P19   1(7) Identify all local ordinances applicable to the operation of
2the proposed facility, and provide evidence that the proposed
3facility is a permitted use at the proposed location under local
4zoning and other ordinances.

5(8) Provide a statement, signed by the applicant under penalty
6of perjury, that the information provided is true.

7(9) For an applicant with 20 or more employees, provide a
8statement that the applicant will enter into, or demonstrate that it
9has already entered into, and abide by the terms of a labor peace
10agreement, as defined in Section 18100. The bureau may consult
11with the Division of Labor Standards and Enforcement to ensure
12that the labor peace agreement meets the requirements of Section
1318100.

14(10) Provide any other information required by the bureau.

15(e) Each location and each discrete use of a single location shall
16require a conditional license. Each application for a conditional
17license is separate and distinct, and the bureau may charge a
18separate fee for each.

19(f) A conditional license issued pursuant to this section shall be
20valid for 12 months after the date of issuance. The bureau shall
21establish procedures for the renewal of a conditional license.

22(g) A conditional license issued pursuant to this section shall
23be restricted as follows:

24(1) A single licensee shall not hold both a license for the
25cultivation of marijuana and a license for the dispensing of
26marijuana unless the cultivation site is restricted to 1,000 square
27feet in area.

28(2) The holder of a license for transport of marijuana may not
29hold any other category of license.

30(3) The holder of a certification for a testing laboratory may not
31combine that certificate with any category of license.

32(4) Persons or entities that own testing laboratories are
33prohibited from licensure for any activity authorized under this
34chapter, and are prohibited from holding an ownership interest in
35any real property, personal property, or other assets associated or
36used in any license category.

37

18111.  

(a) Upon receipt of the application materials and fee
38required in Section 18110, the bureau, provided the applicant has
39not committed an act or crime constituting grounds for the denial
P20   1of licensure under Section 18112, may issue the conditional license
2and send a proof of issuance to the applicant.

3(b) The chief shall, by regulation, prescribe conditions upon
4which a person whose conditional license has previously been
5denied, suspended, or revoked, may be issued a conditional license.

6

18112.  

(a) An application for a conditional license shall be
7denied and a conditional license shall be suspended or revoked for
8a past felony conviction for the possession for sale, sale,
9manufacture, transportation, or cultivation of a controlled
10substance, a felony criminal conviction for drug trafficking, a
11felony conviction for embezzlement, a felony conviction involving
12fraud or deceit, or any violent or serious felony conviction pursuant
13to subdivision (c) of Section 667.5 of, or subdivision (c) of Section
141192.7 of, the Penal Code. The bureau, at its discretion, may issue
15a license to an applicant that would be otherwise denied pursuant
16to this subdivision if the applicant has obtained a certificate of
17rehabilitation, pursuant to Section 4852.13 of the Penal Code.

18(b) The chief, upon his or her determination, may deny, suspend,
19or revoke a conditional license when a conditional licensee,
20applicant, or employee, partner, officer, or member of an entity
21conditionally licensed does any of the following:

22(1) Making or authorizing in any manner or by any means a
23written or oral statement that is untrue or misleading and that is
24known, or that by exercise of reasonable care should be known,
25to be untrue or misleading.

26(2) Any other conduct that constitutes fraud.

27(3) Conduct constituting gross negligence.

28(4) Failure to comply with the provisions of this part, Article 8
29(commencing with Section 111658) of Chapter 6 of Part 5 of
30Division 104 of the Health and Safety Code, or any rule or
31regulation adopted pursuant to this part.

32(5) Conduct that constitutes grounds for denial of licensure
33pursuant to Chapter 2 (commencing with Section 480) of Division
341.5.

35(6) Violation of any applicable local ordinance.

36

18113.  

(a) Upon denying, suspending, or revoking a
37conditional license, the chief shall notify the applicant or licensee,
38in writing, by personal service or mail addressed to the address of
39the applicant or licensee set forth in the application. The applicant
40or licensee shall be given a hearing within 30 days thereafter if he
P21   1or she files with the bureau a written request for hearing. Otherwise,
2the denial, suspension, or revocation is deemed affirmed.

3(b) All proceedings to deny, suspend, or revoke a conditional
4license shall be conducted pursuant to Chapter 5 (commencing
5with Section 11500) of Part 1 of Division 3 of Title 2 of the
6Government Code.

7

18114.  

An application for or renewal of a license shall not be
8approved if the bureau determines any of the following:

9(a) The applicant fails to meet the requirements of this part or
10any regulation adopted pursuant to this part or any applicable city,
11county, or city and county ordinance or regulation. If a local
12government adopts an ordinance or resolution authorizing medical
13marijuana to be cultivated, manufactured, stored, distributed, or
14sold within its jurisdiction, it shall submit to the bureau
15documentation detailing their renewal requirements.

16(b) The applicant, or any of its officers, directors, owners,
17members, or shareholders, is a minor.

18(c) The applicant has knowingly answered a question or request
19for information falsely on the application form or failed to provide
20information requested.

21(d) The applicant, or any of its officers, directors, owners,
22members, or shareholders has been sanctioned by the bureau, a
23city, county, or city and county, for medical marijuana activities
24conducted in violation of this part or any applicable local ordinance
25or has had a conditional license or local license or permit revoked
26in the previous five years.

27(e) The proposed cultivation, processing, possession, storage,
28manufacturing, testing, transporting, distribution, provision, or
29sale of medical marijuana will violate any applicable local law or
30 ordinance.

31(f) The applicant or the owner is unable to establish that he or
32she has been a resident of the state for not less than 12 months.

33

18115.  

In addition to the provisions of this part, a conditional
34license shall be subject to the restrictions of the local jurisdiction
35in which the facility operates or proposes to operate. Even if a
36conditional license has been granted pursuant to this part, a facility
37shall not operate in a local jurisdiction that prohibits the
38establishment of that type of business.

39

18116.  

The bureau may adopt regulations to limit the number
40of conditional licenses issued pursuant to this part upon a finding
P22   1that the otherwise unrestricted issuance of conditional licenses is
2dangerous to the public health and safety.

3 

4Chapter  3. Fees
5

 

6

18117.  

(a) The conditional licensing fee shall be established
7by the bureau at a level sufficient to fund the reasonable costs of
8all of the following:

9(1) Administrative costs incurred by the bureau in overseeing
10the conditional licensing program, establishing health and safety
11standards, and certifying the required testing laboratories.

12(2) Costs incurred by the bureau or the Department of Justice
13for enforcement of the provisions of this part.

14(3) Costs incurred by law enforcement and other public safety
15entities for enforcing the provisions of this part in their jurisdiction.

16(b) In addition to the conditional licensing fee required pursuant
17to subdivision (a), a licensed cultivation site shall be assessed a
18fee in a sufficient amount to cover the reasonable regulatory costs
19to the state of enforcing the environmental impact provisions
20relating to those cultivation facilities. This fee shall be paid in
21addition to any other fees charged by the bureau or any local
22agency. This fee shall be distributed, as necessary and in proportion
23to its regulatory function, between the following agencies
24responsible for enforcing the regulations relating to the
25environmental impact of licensed cultivation sites:

26(1) The State Water Resources Control Board.

27(2) The Department of Fish and Wildlife.

28(3) The Department of Forestry and Fire Protection.

29(4) The Department of Pesticide Regulation.

30(5) The Department of Food and Agriculture.

31(c) The bureau may establish a separate schedule of licensing
32fees for application to nonprofit entities if the entity’s nonprofit
33status is verified by an independent audit or by confirmation of
34the entity’s 501(c)(3) status under the federal Internal Revenue
35Code.

36

18118.  

(a) The Medical Marijuana Regulation Fund is hereby
37established within the State Treasury. Notwithstanding Section
3816305.7 of the Government Code, the fund shall include any
39interest and dividends earned on the money in the fund.

P23   1(b) Except as provided in subdivision (c), all fees collected
2pursuant to this part shall be deposited into the Medical Marijuana
3Regulation Fund. Notwithstanding Section 13340 of the
4Government Code, all moneys within the fund are hereby
5continuously appropriated, without regard to fiscal year, to the
6bureau solely for the purposes of fully funding and administering
7this part, including, but not limited to, the costs incurred by the
8bureau for its administrative expenses.

9(c) The Special Account for Environmental Enforcement is
10hereby established as an account within the Medical Marijuana
11Regulation Fund. Notwithstanding Section 16305.7 of the
12Government Code, the account shall include any interest and
13dividends earned on the money in the account. All fees collected
14pursuant to subdivision (b) of Section 18117 shall be deposited in
15this account. Notwithstanding Section 13340 of the Government
16Code, all moneys within the fund are hereby continuously
17appropriated, without regard to fiscal year, to the bureau for
18distribution to the entities listed in subdivision (b) of Section 18117
19to be used to enforce the environmental regulation of licensed
20cultivation sites.

21(d) All moneys collected as a result of penalties imposed under
22this part shall be deposited directly into the General Fund, to be
23available upon appropriation.

24(e) The bureau may establish and administer a grant program
25to allocate moneys from the Medical Marijuana Regulation Fund
26to state and local entities for the purpose of assisting with medical
27marijuana regulation and the enforcement of this part and other
28state and local laws applicable to licensees.

29

18119.  

(a) A facility issued a conditional license shall not
30acquire, cultivate, process, possess, store, manufacture, distribute,
31sell, deliver, transfer, transport, or dispense medical marijuana for
32any purpose other than those authorized by Article 2.5
33(commencing with Section 11362.7) of Chapter 6 of Division 10
34of the Health and Safety Code.

35(b) A licensed dispensing facility shall not acquire, cultivate,
36process, possess, store, manufacture, distribute, sell, deliver,
37transfer, transport, or dispense medical marijuana plants or medical
38marijuana products except through a licensed cultivation site or a
39licensed manufacturer.

 

P16   1Chapter  4. Transportation of Medical Marijuana
2

 

3

18120.  

(a) A licensed transporter shall ship medical marijuana
4only to facilities issued a conditional license and only in response
5to a request for a specific quantity and variety from those facilities.

6(b) Prior to transporting medical marijuana products, a licensed
7transporter shall do both of the following:

8(1) Complete a shipping manifest using a form prescribed by
9the bureau.

10(2) Securely transmit a copy of the manifest to the licensee that
11will receive the medical marijuana product, and to the bureau,
12prior to transport.

13(c) The licensed transporter making the shipment and the
14licensee receiving the shipment shall maintain each shipping
15manifest and make it available to local code enforcement officers,
16any other locally designated enforcement entity, and the bureau
17upon request.

18

18121.  

(a) Transported medical marijuana products shall:

19(1) Be transported only in a locked, safe, and secure storage
20compartment that is securely affixed to the interior of the
21transporting vehicle.

22(2) Not be visible from outside the vehicle.

23(b) A vehicle transporting medical marijuana products shall
24travel directly from one licensed facility to another licensed facility
25authorized to receive the shipment.

26

18122.  

(a) All transport vehicles shall be staffed with a
27minimum of two employees. At least one transport team member
28shall remain with the vehicle at all times when the vehicle contains
29medical marijuana.

30(b) Each transport team member shall have access to a secure
31form of communication by which each member can communicate
32with personnel at the licensed facility at all times when the vehicle
33contains medical marijuana.

34(c) Each transport team member shall possess documentation
35of licensing and a government-issued identification card at all
36times when transporting or delivering medical marijuana and shall
37produce it to any representative of the bureau or law enforcement
38upon request.

P25   1(d) This part shall not be construed to authorize or permit a
2licensee to transport, or cause to be transported, medical marijuana
3or medical marijuana products outside the state.

4(e) This section shall only apply to a licensed transporter.

5

18123.  

A local jurisdiction shall not prevent transportation
6through or to a facility issued a conditional license, by a
7conditionally licensed transporter who acts in compliance with
8this part.

9 

10Chapter  5. Enforcement
11

 

12

18124.  

(a) The bureau shall, in consultation with local
13governments, develop an enforcement framework that clarifies the
14enforcement roles of the state and local governments, designating
15local governments with primary enforcement responsibility,
16maximizes the capabilities and resources of local enforcement
17agencies, and ensures that there is communication and collaboration
18between the bureau, relevant state agencies, and local governments
19to enhance and streamline enforcement efforts.

20(b) A state agency is not required by this section to enforce a
21city, county, city and county, or local law, ordinance, rule, or
22regulation regarding the site or operation of a facility or transporter
23issued a conditional license.

24

18125.  

The bureau may assist state taxation authorities in the
25development of uniform policies for the state taxation of licensees.

26

18126.  

(a) For facilities issued a conditional license that are
27located within the incorporated area of a city, the city shall have
28full power and authority to enforce this part and Article 8
29(commencing with Section 111658) of Chapter 6 of Part 5 of
30Division 104 of the Health and Safety Code and the rules,
31regulations, and standards promulgated by the bureau. The city
32shall further assume complete responsibility for any regulatory
33function relating to those licensees within the city limits that would
34otherwise be performed by the county or any county officer or
35employee, without liability, cost, or expense to the county.

36(b) For licensed facilities located within the unincorporated area
37of a county, the county shall have full power and authority to
38 enforce this part and Article 8 (commencing with Section 111658)
39of Chapter 6 of Part 5 of Division 104 of the Health and Safety
P26   1Code and the rules, regulations, and standards promulgated by the
2bureau.

3

18127.  

(a) A willful violation of Section 18110, including an
4attempt to falsify information on an application or to otherwise
5defraud or mislead a state or local agency in the course of the
6application process, shall be punishable by a civil fine of up to
7thirty-five thousand dollars ($35,000) for each individual violation.

8(b) A technical violation of Section 18110 shall, at the bureau’s
9discretion, be punishable by a civil fine of up to ten thousand
10dollars ($10,000) for each individual violation.

11

18128.  

A district attorney, county counsel, city attorney, or
12city prosecutor may bring an action to enjoin a violation or the
13threatened violation of any provision of this part, including, but
14not limited to, a licensee’s failure to correct objectionable
15conditions following notice or as a result of a rule promulgated
16pursuant to this part. The action shall be brought in the county in
17which the violation occurred or is threatened to occur. A proceeding
18brought pursuant to this part shall conform to the requirements of
19Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of
20the Code of Civil Procedure. Nothing in this section shall diminish
21the authority of a local government to take requisite enforcement
22actions pertaining to its own ordinances or regulations.

23

18129.  

Nothing in this part shall prevent a city or other local
24governing body from taking action as specified in Section 11362.83
25of the Health and Safety Code.

26

18130.  

This part shall not be construed to limit a law
27enforcement agency’s ability to investigate unlawful activity in
28relation to a facility issued a conditional license.

29 

30Chapter  6. Cannabis Employees
31

 

32

18131.  

The Division of Labor Standards Enforcement shall do
33all of the following:

34(a) Maintain minimum standards for the competency and training
35of employees of a licensed cultivation site or a licensed dispensing
36facility, as defined inbegin delete subdivisions (i) and (j) ofend delete Section 18100,
37through a system of testing and certification.

38(b) Maintain an advisory committee and panels as necessary to
39carry out its functions under this section. There shall be employer
40representation on the committee and panels.

P27   1(c) Establish and collect certification fees not to exceed the
2reasonable cost to the division in issuing certifications.

3(d) Adopt regulations necessary to implement this chapter.

4(e) Issue certification cards to employees who have been
5certified pursuant to this chapter.

6(f) The division shall establish registration fees in an amount
7reasonably necessary to implement this section, not to exceed
8twenty-five dollars ($25) for the initial registration. There shall
9not be a fee for the annual renewal of registration. Fees shall be
10placed in the Cannabis Certification Fund, established pursuant to
11Section 18135.

12

18132.  

(a) Except as provided in subdivision (c), persons who
13perform work as cannabis employees shall be certified by the
14division.

15(b) Individuals desiring to be certified shall submit an
16application for certification and examination that includes an
17employment history report from the Social Security Administration.
18The individual may redact his or her social security number from
19the employment history report before it is submitted.

20(c) (1) Certification is not required for registered apprentices
21working as cannabis employees as part of an apprenticeship
22program approved under an approved apprenticeship program. An
23apprentice who is within one year of completion of his or her term
24of apprenticeship shall be permitted to take the certification
25examination and, upon passing the examination, shall be certified
26immediately upon completion of the term of apprenticeship.

27(2) An uncertified person may perform work for which
28certification is otherwise required in order to acquire the necessary
29on-the-job experience for certification, if the person is under the
30direct supervision of a cannabis employee certified pursuant to
31Section 18131 who is responsible for supervising no more than
32one uncertified person. The Division of Labor Standards
33Enforcement may develop additional criteria governing this
34paragraph.

35(d) The following shall constitute additional grounds for
36disciplinary proceedings, including suspension or revocation of
37the conditional license issued pursuant to Chapter 2 (commencing
38with Section 18108):

P28   1(1) The licensed cultivation site or licensed dispensing facility
2willfully employs one or more uncertified persons to perform work
3as cannabis employees in violation of this section.

4(2) The licensed cultivation site or licensed dispensing facility
5willfully fails to provide adequate supervision of uncertified
6workers.

7(3) The licensed cultivation site or licensed dispensing facility
8willfully fails to provide adequate supervision of apprentices
9performing work pursuant to paragraph (1) of subdivision (c).

10(e) The Labor Commissioner shall maintain a process for
11referring cases to the bureau when it has been determined that a
12violation of this section has likely occurred. The Labor
13Commissioner shall have a memorandum of understanding with
14the bureau in furtherance of this section.

15(f) Upon receipt of a referral by the Labor Commissioner
16alleging a violation under this section, the bureau shall open an
17investigation. Disciplinary action against the licensee shall be
18initiated within 60 days of the receipt of the referral. The bureau
19may initiate disciplinary action against a licensee upon his or her
20own investigation, the filing of a complaint, or a finding that results
21from a referral from the Labor Commissioner alleging a violation
22under this section. Failure of the employer or employee to provide
23evidence of certification or apprentice status shall create a
24rebuttable presumption of violation of this provision.

25

18135.  

The Cannabis Certification Fund is established as a
26special account in the State Treasury. Proceeds of the fund may
27be expended by the division, upon appropriation by the Legislature,
28for the costs of validating and certifying cannabis employees, as
29provided by this chapter, and shall not be used for any other
30purpose.

31 

32Chapter  7. Regulation of Medical Marijuana
33

 

34

18136.  

(a) A person shall not distribute any form of advertising
35for physician recommendations for medical marijuana in California
36unless the advertisement bears the following notice to consumers:


38NOTICE TO CONSUMERS: The Compassionate Use Act of
391996 ensures that seriously ill Californians have the right to obtain
40and use marijuana for medical purposes where medical use is
P29   1deemed appropriate and has been recommended by a physician
2who has determined that the person’s health would benefit from
3the use of medical marijuana. Physicians are licensed and regulated
4by the Medical Board of California and arrive at the decision to
5make this recommendation in accordance with accepted standards
6of medical responsibility.


8(b) Advertising for physician recommendations for medical
9marijuana shall meet all requirements of Section 651. Price
10advertising shall not be fraudulent, deceitful, or misleading,
11including statements or advertisements of bait, discounts,
12premiums, gifts, or statements of a similar nature.

13

18137.  

(a) A conditionally licensed facility shall implement
14sufficient security measures to both deter and prevent unauthorized
15entrance into areas containing medical marijuana or medical
16marijuana products and theft of medical marijuana at those licensed
17facilities. These security measures shall, in addition to any
18requirements imposed by local ordinance, include, but not be
19limited to, all of the following:

20(1) Preventing individuals from remaining on the premises of
21the facility if they are not engaging in activity expressly related to
22the operations of the facility.

23(2) Establishing limited access areas accessible only to
24authorized facility personnel, in compliance with all local building
25and fire codes.

26(3) Storing all finished medical marijuana in a secured and
27locked room, safe, or vault, and in a manner as to prevent diversion,
28theft, and loss.

29(b) A conditionally licensed facility shall notify appropriate law
30enforcement authorities within 24 hours after discovering any of
31the following:

32(1) Discrepancies identified during inventory.

33(2) Diversion, theft, loss, or any criminal activity involving the
34facility or a facility agent.

35(3) The loss or unauthorized alteration of records related to
36marijuana, registered qualifying patients, personal caregivers, or
37facility agents.

38(4) Any other breach of security.

39(c) A licensed cultivation site shall weigh, inventory, and
40account for on video, each shipment of medical marijuana that
P30   1exceeds a threshold amount set by the bureau that is to be
2transported to an individual licensed dispensing facility prior to
3its leaving its origination location. Within eight hours after arrival
4at the destination, the licensed dispensing facility shall reweigh,
5reinventory, and account for on video, all transported medical
6marijuana that was subject to these provisions at the licensed
7cultivation site.

8

18138.  

(a) The bureau shall require an annual auditbegin insert, in a form
9specified by the bureau,end insert
of all conditionally licensed facilities. The
10reasonable costs of the audit shall be paid for by the licensee.

11(b) Completed audit reports shall also be submitted by the
12licensee to local code enforcement offices, or the appropriate
13locally designated enforcement entity, within 30 days of the
14completion of the audit.

15(c) It is the responsibility of each conditionally licensed facility
16to develop a robust quality assurance protocol in accordance with
17the regulations issued by the bureau that, at a minimum, includes
18all of the provisions of this part.

19

18139.  

(a) A laboratory certified by the bureau to perform
20random sample testing of medical marijuana products shall not
21acquire, process, possess, store, transfer, transport, or dispense
22medical marijuana for any purpose other than those authorized by
23Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
24Division 10 of the Health and Safety Code. All transfer or
25transportation shall be performed pursuant to a specified chain of
26custody protocol.

27(b) A laboratory certified by the bureau to perform random
28sample testing of medical marijuana products shall not acquire,
29process, possess, store, transfer, transport, or dispense medical
30marijuana plants or medical marijuana products except through a
31patient, primary caregiver, or a facility issued a conditional license.
32All transfer or transportation shall be performed pursuant to a
33specified chain of custody protocol.

34

18140.  

(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 bureau for the
37purposes of administering this part are confidential and exempt
38from the California Public Records Act (Chapter 3.5 (commencing
39with Section 6250) of Division 7 of Title 1 of the Government
40Code) and are not subject to disclosure to an individual or private
P31   1entity, except as necessary for authorized employees of the state
2to perform official duties pursuant to this part.

3(b) (1) Nothing in this section shall preclude any of the
4following:

5(A) Bureau employees notifying state or local agencies about
6information submitted to the bureau that the employee suspects is
7falsified or fraudulent.

8(B) Notifications from the bureau to state or local agencies of
9apparent violations of this part or an applicable local ordinance.

10(C) Verification of requests by state or local agencies to confirm
11licenses and certificates issued by the bureau or other state agency.

12(D) Providing information requested pursuant to a court order
13or subpoena issued by a court, an administrative agency, or local
14governing body authorized by law to issue subpoenas.

15(2) Information shall not be disclosed beyond what is necessary
16to achieve the goals of a specific investigation or notification or
17the parameters of a specific court order or subpoena.

18

18141.  

(a) The actions of a licensee, its employees, and its
19agents, that are permitted pursuant to both a conditional license
20and a license or permit issued by the local jurisdiction following
21the requirements of the applicable local ordinances, and that are
22conducted in accordance with the requirements of this part and
23regulations adopted pursuant to this part, are not unlawful under
24state law and shall not be an offense subject to arrest or prosecution
25under state law.

26(b) The actions of a person who, in good faith and upon
27investigation, allows his or her property to be used by a licensee,
28its employees, and its agents, as permitted pursuant to both a
29conditional license and a license or permit issued by the local
30jurisdiction following the requirements of the applicable local
31ordinances, are not unlawful under state law and shall not be an
32offense subject to arrest or prosecution under state law.

33(c) This section shall not be deemed to limit the authority or
34remedies of a city, county, or city and county under any provision
35of law, including, without limitation, Section 7 of Article XI of
36the California Constitution.

37

18142.  

(a) A licensee shall not cultivate, process, store,
38manufacture, transport, or sell medical marijuana in the state unless
39accurate records are kept at the licensed premises of the growing,
40processing, storing, manufacturing, transporting, or selling by the
P32   1licensee in the state. These records shall include the name and
2address of the supplier of marijuana received or possessed by the
3licensee, the location at which the marijuana was cultivated, the
4amount of marijuana received, the form in which it is received,
5the name of the employee receiving it, and the date of receipt.
6These records shall also include receipts for all expenditures
7incurred by the licensee and banking records, if any, for all funds
8obtained or expended in the performance of any activity under the
9authority of the conditional license. A licensee who has a
10conditional license for more than one premises may keep all records
11at one of the conditionally licensed premises. Required records
12shall be kept for a period of seven years from the date of the
13transaction.

14(b) The bureau and an appropriate state or local agency may
15examine the books and records of a conditional licensee and may
16visit and inspect the premises of a conditional licensee, as the
17bureau or state or local agency deems necessary to perform its
18duties under this part.

19(c) Books or records requested by the bureau or an appropriate
20state or local agency shall be provided by the conditional licensee
21no later than five business days after the request is made.

22(d) The bureau or a state or local agency may enter and inspect
23the premises of a facility issued a conditional license between the
24 hours of 8 a.m. and 8 p.m. on any day that the facility is open, or
25at any reasonable time, to ensure compliance and enforcement of
26the provisions of this part or a local ordinance.

27(e) If a licensee or an employee of a licensee refuses, impedes,
28obstructs, or interferes with an inspection pursuant to subdivision
29(d), the conditional license may be summarily suspended and the
30bureau shall directly commence proceedings for the revocation of
31the conditional license.

32(f) If a licensee or an employee of a licensee fails to maintain
33or provide the books and records required pursuant to this section,
34the licensee shall be subject to a civil fine of fifteen thousand
35dollars ($15,000) per individual violation.

36

SEC. 5.  

Section 23028 is added to the Government Code, to
37read:

38

23028.  

(a) (1) In addition to any authority otherwise provided
39by law, the board of supervisors of any county may impose, by
40ordinance, a tax on the privilege of cultivating, dispensing,
P33   1producing, processing, preparing, storing, providing, donating,
2selling, or distributing marijuana by a licensee operating pursuant
3to Chapter 18 (commencing with Section 26000) of Division 9 of
4the Business and Professions Code. The tax may be imposed for
5general governmental purposes or for purposes specified in the
6ordinance by the board of supervisors.

7(2) The board of supervisors shall specify in the ordinance
8proposing the tax the activities subject to the tax, the applicable
9rate or rates, the method of apportionment, and the manner of
10 collection of the tax. A tax imposed pursuant to this section is a
11tax and not a fee or special assessment, and the tax is not required
12to be apportioned on the basis of benefit to any person or property
13or be applied uniformly to all taxpayers or all real property.

14(3) A tax imposed by a county pursuant to this section by a
15county may include a transactions and use tax imposed solely for
16marijuana or marijuana products, which shall otherwise conform
17to Part 1.6 (commencing with Section 7251) of Division 2 of the
18Revenue and Taxation Code. Notwithstanding Section 7251.1 of
19the Revenue and Taxation Code, the tax may be imposed at any
20rate specified by the board of supervisors, and the tax rate
21authorized by this section shall not be considered for purposes of
22the combined tax rate limitation established by that section.

23(4) The tax authorized by this section may be imposed upon
24any or all of the activities set forth in paragraph (1), regardless of
25whether the activity is undertaken individually, collectively, or
26cooperatively, and regardless of whether the activity is for
27compensation or gratuitously, as determined by the board of
28supervisors.

29(5) The board of supervisors shall specify whether the tax applies
30throughout the entire county or within the unincorporated area of
31the county.

32(b) In addition to any other method of collection authorized by
33law, the board of supervisors may provide for the collection of the
34tax imposed pursuant to this section in the same manner, and
35subject to the same penalties and priority of lien, as other charges
36and taxes fixed and collected by the county.

37(c) Any tax imposed pursuant to this section shall be subject to
38applicable voter approval requirements imposed by any other law.

P34   1(d) For purposes of this section, “marijuana” shall have the same
2meanings set forth in Section 18100 of the Business and
3Professions Code.

4(e) This section does not limit or prohibit the levy or collection
5or any other fee, charge, or tax, or any license or service fee or
6charge upon, or related to, the activities set forth in subdivision
7(a) as otherwise provided by law. This section shall not be
8construed as a limitation upon the taxing authority of any county
9as provided by other law.

10

SEC. 6.  

Section 11362.775 of the Health and Safety Code is
11amended to read:

12

11362.775.  

(a) Qualified patients, persons with valid
13identification cards, and the designated primary caregivers of
14qualified patients and persons with identification cards, who
15cultivate marijuana for medical purposes, shall not solely on the
16basis of that fact be subject to state criminal sanctions under
17Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570.

18(b) An individual employee, officer, or board member of a
19facility issued a conditional license pursuant to Part 5 (commencing
20with Section 18100) of Division 7 of the Business and Professions
21Code shall not be subject to state criminal sanctions under Section
2211357, 11358, 11359, 11360, 11366, 11366.5, or 11570 and any
23successor statutes, based solely on holding a conditional license,
24for the possession, cultivation, processing, packaging, storage,
25transportation, sale, or distribution of medical marijuana to a
26facility holding a conditional license pursuant to Part 5
27(commencing with Section 18100) of Division 7 of the Business
28and Professions Code or directly to a qualified patient, a person
29with a valid identification card, or the designated primary caregiver
30of a qualified patient or person with a valid identification card,
31within the state, unless the information contained on the licensing
32paperwork is false or falsified, the license has been obtained by
33means of fraud, or the person is otherwise in violation of Part 5
34(commencing with Section 18100) of Division 7 of the Business
35and Professions Code.

36(c) This section shall not diminish the protections of Section
3718141 of the Business and Professions Code.

38(d) This section shall become operative on January 1, 2018.

P35   1

SEC. 7.  

Article 8 (commencing with Section 111658) is added
2to Chapter 6 of Part 5 of Division 104 of the Health and Safety
3Code
, to read:

4 

5Article 8.  Medical Marijuana
6

 

7

111658.  

For purposes of this article, the following definitions
8shall apply:

9(a) “Bureau” means the Bureau of Medical Marijuana
10Regulations in the Department of Consumer Affairs.

11(b) “Certified testing laboratory” means a laboratory that is
12certified by the bureau to perform random sample testing of
13medical marijuana for patients, primary caregivers, and facilities
14issued conditional licenses pursuant to Part 5 (commencing with
15Section 18100) of Division 7 of the Business and Professions Code,
16pursuant to the certification standards for those facilities
17promulgated by the department.

18(c) “Edible medical marijuana product” means medical
19marijuana or a medical marijuana-derived product that is ingested
20or meant to be ingested through the mouth and into the digestive
21system.

22(d) “Marijuana” means all parts of the plant Cannabis sativa L.
23sativa, cannabis indica, or cannabis ruderalis, whether growing or
24not; the seeds thereof; the resin, whether crude or purified,
25extracted from any part of the plant; and every compound,
26manufacture, salt, derivative, mixture, or preparation of the plant,
27its seeds, or resin. “Marijuana” does not include the mature stalks
28of the plant, fiber produced from the stalks, oil or cake made from
29the seeds of the plant, any other compound, manufacture, salt,
30derivative, mixture, or preparation of the mature stalks (except the
31resin extracted therefrom), fiber, oil, or cake, or the sterilized seed
32of the plant which is incapable of germination. “Marijuana” also
33means marijuana, as defined by Section 11018.

34(e) “Representative samples” means samples taken from each
35batch or shipment of medical marijuana received from a licensed
36cultivation site or any other source if intended for sale.

37

111659.  

The bureau, by July 1, 2017, shall accomplish both
38of the following:

39(a) Establish quality assurance protocols to ensure uniform
40testing standards for all medical marijuana sold via dispensaries
P36   1or other facilities, or cultivated or manufactured by facilities, that
2are issued a conditional license pursuant to Part 5 (commencing
3with Section 18100) of Division 7 of the Business and Professions
4Code.

5(b) In consultation with outside entities at its discretion, develop
6a list of certified testing laboratories that can perform uniform
7testing in compliance with this article, and post that list on its
8Internet Web site.

9

111660.  

(a) A facility issued a conditional license pursuant to
10Part 5 (commencing with Section 18100) of Division 7 of the
11Business and Professions Code shall bear the responsibility for
12contracting with certified testing laboratories for regular, random
13sample testing of representative samples of all medical marijuana
14cultivated or intended for sale or distribution, and shall bear the
15cost of that testing.

16(b) A facility issued a conditional license pursuant to Part 5
17(commencing with Section 18100) of Division 7 of the Business
18and Professions Code shall maintain records of testing reports for
19seven years, either on site in a digital format or at a secure off-site
20location in either digital or paper format. These facilities shall
21provide results of test reports to local code enforcement officers,
22any other locally designated enforcement entity, and the bureau
23upon request.

24

111661.  

Quality assurance protocols shall be required between
25all licensed cultivation sites, licensed manufacturers, and licensed
26dispensing facilities to guarantee safe and reliable medicinal
27marijuana delivery to all patients. These quality assurance protocols
28shall include both of the following:

29(a) Providing supplier information to dispensaries in order for
30recall procedures to be implemented, if and when necessary.

31(b) Safety testing of all medical marijuana prior to packaging
32for sale and patient exposure to identify and eliminate
33microbiological contaminants and chemical residue.

34

111662.  

For purposes of this article, edible medical marijuana
35products are deemed to be unadulterated food products. In addition
36to the quality assurance standards provided in Section 111661, all
37edible medical marijuana products shall comply with the following
38requirements:

39(a) Baked edible medical marijuana products, including, but not
40limited to, brownies, bars, cookies, and cakes, tinctures, and other
P37   1edible medical marijuana products that do not require refrigeration
2or hot holding may be manufactured, sold, or otherwise distributed
3at facilities issued a conditional license pursuant to Part 5
4(commencing with Section 18100) of Division 7 of the Business
5and Professions Code.

6(b) A facility issued a conditional license pursuant to Part 5
7(commencing with Section 18100) of Division 7 of the Business
8and Professions Code shall have an owner or employee who has
9successfully passed an approved and accredited food safety
10certification examination as specified in Sections 113947.1,
11113947.2, and 113947.3 prior to selling, manufacturing, or
12distributing edible medical marijuana products requiring
13refrigeration or hot holding.

14(c) Individuals manufacturing or selling edible medical
15marijuana products shall thoroughly wash their hands before
16commencing production and before handling finished edible
17medical marijuana products.

18(d) All edible medical marijuana products sold for direct
19consumption and infused with marijuana concentrate shall be
20individually wrapped at the original point of preparation.

21(e) Products containing tetrahydrocannabinol (THC) shall be
22prepared in compliance with maximum potency standards for THC
23and THC concentrates set forth in the bureau’s regulations.

24(f) Prior to sale or distribution at a licensed dispensing facility,
25edible medical marijuana products shall be labeled and in a tamper
26evident package. Labels and packages of edible medical marijuana
27products shall meet the following requirements:

28(1) Edible medical marijuana packages and labels shall not be
29made to be attractive to children.

30(2) All edible medical marijuana product labels shall include
31the following information, prominently displayed and in a clear
32and legible font:

33(A) Manufacture date and source.

34(B) The statement “KEEP OUT OF REACH OF CHILDREN
35AND ANIMALS” in bold print.

36(C) The statement “FOR MEDICAL USE ONLY.”

37(D) The statement “THE INTOXICATING EFFECTS OF THIS
38PRODUCT MAY BE DELAYED BY UP TO TWO HOURS.”

39(E) Net weight of medical marijuana in package.

P38   1(F) A warning if nuts or other known allergens are used and the
2total weight, in ounces or grams, of medical marijuana in the
3package.

4(G) List of pharmacologically active ingredients, including, but
5not limited to, tetrahydrocannabinol (THC) and cannabidiol (CBD)
6content, the THC amount in milligrams per serving, servings per
7package, and the THC amount in milligrams for the package total.

8(H) Clear indication, in bold type, that the product contains
9medical marijuana.

10(I) Identification of the source and date of cultivation and
11manufacture.

12(J) The name and location of the licensed dispensary providing
13the product.

14(K) The date of sale.

15(L) Any other requirement set by the bureau.

16(g) Only generic food names may be used to describe edible
17medical marijuana products.

18

SEC. 8.  

Section 147.5 is added to the Labor Code, to read:

19

147.5.  

(a) By January 1, 2017, the Division of Occupational
20Safety and Health in the Department of Industrial Relations shall
21convene an advisory committee to evaluate whether there is a need
22to develop industry-specific regulations related to the activities of
23facilities issued a conditional license pursuant to Part 5
24(commencing with Section 18100) of Division 7 of the Business
25and Professions Code.

26(b) By July 1, 2017, the advisory committee shall present its
27findings and recommendations for consideration to the board. No
28later than July 1, 2017, the board shall render a decision regarding
29the adoption of industry-specific regulations.

30

SEC. 9.  

Section 1155.7 of the Labor Code is amended to read:

31

1155.7.  

(a) Nothing in this chapter shall be construed to apply
32or be applicable to a labor organization in its representation of
33workers who are not agricultural employees. Any such labor
34organization shall continue to be governed in its intrastate activities
35for nonagricultural workers by Section 923 and applicable judicial
36precedents.

37(b) To the extent not prohibited by law and for purposes of this
38chapter, “agricultural employer” includes a licensed cultivation
39site, as defined in Section 18100 of the Business and Professions
40Code.

P39   1

SEC. 10.  

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

2

3094.  

The Division of Apprenticeship Standards shall
3investigate, approve, or reject applications for apprenticeship
4programs for employees of a licensed cultivation site or a licensed
5dispensing facility, as defined in subdivisions (i) and (j) of Section
618100 of the Business and Professions Code. The Division of
7Apprenticeship Standards shall have the authority to issue rules
8necessary to implement and regulate the establishment of the
9apprenticeship programs described in this section.

10

SEC. 11.  

The provisions of this act are severable. If any
11provision of this act or its application is held invalid, that invalidity
12shall not affect other provisions or applications that can be given
13effect without the invalid provision or application.

14

SEC. 12.  

The Legislature finds and declares that Section 4 of
15this act imposes a limitation on the public’s right of access to the
16meetings of public bodies or the writings of public officials and
17agencies within the meaning of Section 3 of Article I of the
18California Constitution. Pursuant to that constitutional provision,
19the Legislature makes the following findings to demonstrate the
20interest protected by this limitation and the need for protecting
21that interest:

22The limitation imposed under this act is necessary for purposes
23of compliance with the federal Health Insurance Portability and
24Accountability Act of 1996 (42 U.S.C. Sec. 1320d et seq.), the
25Confidentiality of Medical Information Act (Part 2.6 (commencing
26with Section 56) of Division 1 of the Civil Code), and the Insurance
27Information and Privacy Protection Act (Article 6.6 (commencing
28with Section 791) of Part 2 of Division 1 of the Insurance Code).

29

SEC. 13.  

No reimbursement is required by this act pursuant to
30Section 6 of Article XIII B of the California Constitution because
31the only costs that may be incurred by a local agency or school
32district will be incurred because this act creates a new crime or
33infraction, eliminates a crime or infraction, or changes the penalty
34for a crime or infraction, within the meaning of Section 17556 of
35the Government Code, or changes the definition of a crime within
36the meaning of Section 6 of Article XIII B of the California
37Constitution.



O

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