Amended in Assembly June 2, 2015

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 Bill No. 266

Introduced by Assembly begin delete Member Cooley end delete begin insert Members Bonta, Cooley, and Jones-Sawyer end insert

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(Coauthor: Assembly Member Lackey)

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February 10, 2015

An act to amend begin delete Section 2220.05 end delete begin insert Sections 2220.05, 2242, and 2264 end insert of, to add Article 25 (commencing with Section 2525) to Chapter 5 of Division 2 of, and to add begin delete Part 5 (commencing with Section 18100) to Division 7 end delete begin insert Chapter 3.5 (commencing with Section 19300) to Division 8 end insert of, the Business and Professions Code, begin delete to add Section 23028 to the Government Code, end delete to amend begin insert and repeal end insert Section 11362.775 begin delete of, and to add Article 8 (commencing with Section 111658) to Chapter 6 of Part 5 of Division 104 of, end delete begin insert of end insert the Health and Safety Code, begin delete and to amend Section 1155.7 of, and end delete to add Sections 147.5 and 3094 begin delete to, end delete begin insert to end insert the Labor Code, begin insert and to add Section 2402.5 to the Vehicle Code, end insert relating to medical begin delete marijuana, and making an appropriation therefor. end delete begin insert cannabis. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 266, as amended, begin delete Cooley end delete   begin insert Bonta end insert . Medical begin delete marijuana. end delete begin insert cannabis. end insert

(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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

end delete begin insert

This bill would enact the Medical Cannabis Regulation and Control Act and would establish within the office of the Governor, the Governor’s Office of Marijuana Regulation to coordinate and provide oversight of the licensing and regulation of various commercial cannabis activities, as defined. The bill would establish the Division of Medical Cannabis Regulation, which is established within the State Board of Equalization, for the licensure and regulation of medical cannabis dispensaries and transporters. The bill would establish the Division of Medical Cannabis Manufacturing and Testing within the State Department of Public Health for the licensing and regulation of medical cannabis manufacturers and certified testing laboratories. The bill would also require the Division of Medical Cannabis Manufacturing and Testing to set specified standards for edible cannabis products. The bill would also establish the Division of Medical Cannabis Cultivation within the Department of Food and Agriculture for the licensure and regulation of medical cannabis cultivators. The bill would set forth the duties of these various divisions. The bill would require the office, by March 1, 2016, to convene a task force to advise the office on the development of standards for the regulation of medical cannabis.

end insert begin insert

This bill would provide for the enforcement of the provisions of the act and of local ordinances relating to medical cannabis by the state and local governments and would require the office to develop an enforcement framework that clarifies the enforcement roles of the state and local governments. The bill would provide that the director of the office and other prescribed persons employed by licensing and law enforcement authorities are peace officers for purposes of enforcing the provisions of this act. The bill would specify that it does not supersede the provisions of Measure D, approved by the voters of the City of Los Angeles on the May 21, 2013, ballot.

end insert begin insert

This bill would require, before a business granted a state license commences operation, that the business also obtain a license or permit from the local jurisdiction and would authorize the local jurisdiction to regulate commercial cannabis activity in specified ways. The bill would provide for provisional licensure to engage in commercial cannabis activity, as specified, until the state license application is either granted or denied or until July 1, 2017.

end insert begin insert

This bill would, by January 1, 2017, require the Division of Labor Standards and Enforcement to develop a certification program for cannabis employees. The bill would require, by January 1, 2019, that all persons who perform work as cannabis employees be certified or participating in an apprenticeship program, as provided.

end insert begin insert

This bill would establish the Medical Cannabis Regulation Fund and various accounts within that fund for the collection of fines and fees imposed on the licensees conducting commercial cannabis activities.

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(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. begin insert Existing law sets forth the conduct that would constitute unprofessional conduct for a physician and surgeon, including, but not limited to, prescribing certain drugs without an appropriate examination or medical indication. end insert 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.

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The

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begin insert This bill would specify that recommending marijuana to patients without an appropriate prior examination and a medical indication is unprofessional conduct. The end insert 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.

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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.

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This bill, commencing 180 days after the Division of Medical Cannabis Regulation within the State Board of Equalization posts a notice on its Internet Web site that the licensing authorities have commenced issuing provisional licenses, would repeal those provisions.

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(6) Existing law establishes the Department of the California Highway Patrol. Existing law also prohibits and establishes standards for driving under the influence of alcohol.

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This bill would require the Department of the California Highway Patrol to establish protocols to determine whether a driver is operating a vehicle under the influence of cannabis, and to develop protocols setting forth best practices to assist law enforcement agencies.

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(6)

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begin insert (7) end insert  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.

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(7)

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begin insert (8) end insert  This bill would provide that its provisions are severable.

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(8)

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begin insert (9) end insert  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.

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(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.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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(10) 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.

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

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

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Vote: majority. Appropriation:  begin delete yes end delete begin insert no end insert . Fiscal committee: yes. State-mandated local program: yes.

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

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begin insert SECTION 1. end insert   

end insert begin insert

The Legislature finds and declares all of the
following:

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

end insert begin insert

(b) Federal enforcement authorities have recognized that in
states that have authorized cannabis use and have enacted strong
and effective regulatory and enforcement systems to control the
cultivation, distribution, sale, and possession of cannabis, conduct
in compliance with those regulatory and enforcement systems is
less likely to threaten federal priorities, and, thus, less likely to
require federal enforcement intervention (See: Memorandum For
All United States Attorneys--Guidance Regarding Marijuana
Enforcement, by James M. Cole, Deputy Attorney General, August
29, 2013).

end insert begin insert

(c) Greater certainty and minimum statewide standards are
urgently needed regarding the obligations of medical cannabis
facilities, and for the imposition and enforcement of regulations
to prevent unlawful cultivation and the diversion of cannabis to
nonmedical use.

end insert begin insert

(d) The purpose of this act is to establish for California a robust
medical cannabis regulatory and enforcement system to ensure
that conduct in compliance with California’s medical cannabis
laws does not threaten the federal priorities as set forth in the
James M. Cole memorandum, and, therefore, does not require
federal enforcement intervention.

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

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

end insert begin insert

(g) Nothing in this act or Article 2 (commencing with Section
11357) or Article 2.5 (commencing with Section 11362.7) of
Chapter 6 of Division 10 of the Health and Safety Code is intended
to preempt any local ordinance regulating or banning the
cultivation, processing, manufacturing, testing, transportation,
distribution, provision, donation, or sale of medical cannabis, or
to otherwise prevent or limit a city, county, or city and county from
adopting or enforcing a zoning ordinance or other law, ordinance,
or regulation that bans or regulates the location, operation, or
establishment of any individual or other person that cultivates,
processes, possesses, stores, manufactures, tests, transports,
distributes, provides, donates, or sells cannabis.

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(h) Nothing in this act is intended to require an employer to
permit or accommodate the use, consumption, possession, transfer,
display, transportation, sale, or growth of cannabis in the
workplace, or to affect the ability of employers to have policies
restricting the use of cannabis by employees, or otherwise
complying with federal law.

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

end insert begin insert

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

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 2220.05 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

2220.05.  

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

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

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

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

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

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

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

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

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 2242 of the end insert begin insert Business and Professions Code end insert begin insert is
amended to read: end insert

2242.  

(a) Prescribing, dispensing, or furnishing dangerous
drugs as defined in Section 4022 without an appropriate prior
examination and a medical indication, constitutes unprofessional
conduct. begin insert Prescribing or recommending medical cannabis to a
patient for a medical purpose without an appropriate prior
examination and a medical indication constitutes unprofessional
conduct. end insert

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

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

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

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

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

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

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

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 2264 of the end insert begin insert Business and Professions Code end insert begin insert is
amended to read: end insert

2264.  

begin insert (a) end insert begin insert   end insert The employing, directly or indirectly, the aiding, or
the abetting of any unlicensed person or any suspended, revoked,
or unlicensed practitioner to engage in the practice of medicine or
any other mode of treating the sick or afflicted which requires a
license to practice constitutes unprofessional conduct.

begin insert

(b)  Employment by, or other agreement with, a mandatory
commercial licensee acting pursuant to the Medical Cannabis
Regulation and Control Act or a dispensary to provide
recommendations for medical cannabis constitutes unprofessional
conduct.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

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

begin insert

 

Article begin insert 25. end insert   Recommending Medical Cannabis

 

begin insert 2525. end insert   

(a) It is unlawful for a physician and surgeon who
recommends cannabis to a patient for a medical purpose to accept,
solicit, or offer any form of remuneration from or to a facility
issued a conditional license pursuant to Chapter 3.5 (commencing
with Section 19300) of Division 8, if the physician and surgeon or
his or her immediate family have a financial interest in that facility.

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

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

begin insert 2525.1. end insert   

The Medical Board of California shall consult with
the California Marijuana Research Program, known as the Center
for Medicinal Cannabis Research, authorized pursuant to Section
11362.9 of the Health and Safety Code, on developing and adopting
medical guidelines for the appropriate administration and use of
medical cannabis.

begin insert 2525.2. end insert   

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

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Chapter 3.5 (commencing with Section 19300) is added
to Division 8 of the end insert begin insert Business and Professions Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 3.5. end insert Medical Cannabis

 

Article begin insert 1. end insert   Definitions

 

begin insert 19300. end insert   

For purposes of this chapter, the following definitions
shall apply:

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

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

(c) “Cannabis concentrate” means manufactured cannabis that
has undergone a process to concentrate the cannabinoid active
ingredient, thereby increasing the product’s potency.

(d) “Certified testing laboratory” means a laboratory that is
certified by the State Department of Public Health to perform
random sample testing of medical cannabis pursuant to the
certification standards for these facilities promulgated by the
department.

(e) “Commercial cannabis activity” means any cultivation,
possession, manufacture, processing, storing, laboratory testing,
labeling, transporting, distribution, or sale of cannabis or cannabis
product, or any Internet platform that facilitates any of these
functions for the purpose of selling medical cannabis or medical
cannabis products to qualified patients or caregivers, except as
set forth in Section 19316.

(f) “Cultivation” means any activity involving the planting,
growing, harvesting, drying, processing, or trimming of cannabis.

(g) “Delivery” means the commercial transfer of medical
cannabis or medical cannabis products from a dispensary to a
primary caregiver or qualified patient, as defined in Section
11362.7 of the Health and Safety Code.

(h) “Delivery service” means a person issued a state license
by the State Department of Public Health pursuant to this chapter
and a local license or permit, to deliver medical cannabis or
medical cannabis products, up to an amount determined by the
department, to patients, testing laboratories, or to events or
locations where it will be used solely for promotional purposes.
A delivery service shall not be required to obtain a transporter
license.

(i) “Director” means the director of the Office of Marijuana
Regulation.

(j) “Dispensary” means a nonmobile, nonvehicular,
non-Internet-based retail location that distributes medical cannabis
or medical cannabis products and is owned and operated by a
licensee for these activities pursuant to this chapter.

(k) “Dispensing” means any activity involving the retail sale
of medical cannabis or medical cannabis products from a
dispensary.

(l) “Dried flower” means all dead medical cannabis that has
been harvested, dried, cured, or otherwise processed.

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

(n) “Fund” means the Medical Cannabis Regulation Fund
established pursuant to Section 19361.

(o) “Identification program” means the universal identification
certificate program for licensees.

(p) “Labor peace agreement” means an agreement between a
licensee and a bona fide labor organization that, at a minimum,
protects the state’s proprietary interests by prohibiting labor
organizations and members from engaging in picketing, work
stoppages, boycotts, and any other economic interference with the
applicant’s business. This agreement means that the applicant has
agreed not to disrupt efforts by the bona fide labor organization
to communicate with, and attempt to organize and represent, the
applicant’s employees. The agreement shall provide a bona fide
labor organization access at reasonable times to areas in which
the applicant’s employees work, for the purpose of meeting with
employees to discuss their right to representation, employment
rights under state law, and terms and conditions of employment.
This type of agreement shall not mandate a particular method of
election or certification of the bona fide labor organization.

(q) “Licensed cultivation site” means a person that plants,
grows, cultivates, harvests, dries, or processes medical cannabis,
or that does all or any combination of those activities, and that is
issued a state license pursuant to this chapter and a local license
or permit.

(r) “Licensed dispensing facility” means a person that provides
medical cannabis, medical cannabis products, or devices for the
use of medical cannabis or medical cannabis products, either
individually or in any combination, that is issued a state license
pursuant to this chapter and a local license or permit.

(s) “Licensed manufacturer” means a person that conducts the
production, preparation, propagation, compounding, or processing
of medical cannabis or medical cannabis products, either directly
or indirectly or by extraction processes, or independently by means
of chemical synthesis or by a combination of extraction and
chemical synthesis, and includes a location that packages or
repackages medical cannabis or medical cannabis products or
labeling or relabeling of its container, and that has been issued a
state license pursuant to this part.

(t) “Licensed transporter” means a person issued a state license
by the Board of Equalization to transport medical cannabis or
medical cannabis products above a limit determined by the board
to and from facilities that have been issued a state license pursuant
to this chapter.

(u) “Licensee” means a person issued a state license under this
chapter to engage in commercial cannabis activity.

(v) “Licensing authority” means the state agency responsible
for granting and renewing state licenses and regulating the
relevant licensees. For licensed cultivators, the licensing authority
is the Division of Medical Cannabis Cultivation in the Department
of Food and Agriculture. For dispensaries and transporters, the
licensing authority is the State Board of Equalization. For licensed
manufacturers and certified testing laboratories, the licensing
authority is the Division of Medical Cannabis Manufacturing and
Testing within the State Department of Public Health.

(w) “Live plants” means living medical cannabis flowers and
plants, including seeds, immature plants, and vegetative stage
plants.

(x) “Manufactured cannabis” means raw cannabis that has
undergone a process whereby the raw agricultural product has
been transformed into a concentrate, an edible product, or a topical
product.

(y) “Medical cannabis,” “medical cannabis product,” or
“cannabis product” means a product containing cannabis,
including, but not limited to, concentrates and extractions, intended
to be sold for use by medical cannabis patients in California
pursuant to the Compassionate Use Act of 1996 (Proposition 215).

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

(aa) “Office” means the Office of Marijuana Regulation.

(ab) “Permit,” “local license,” or “local permit” means an
official document granted by a local jurisdiction that authorizes
a person to conduct commercial cannabis activity in the local
jurisdiction.

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

(ad) “State license ” or “license” means a state license issued
pursuant to this chapter.

(ae) “Topical cannabis” means a manufactured product
intended for external use.

(af) “Transport” means the commercial transfer of medical
cannabis or medical cannabis products from the business location
of one licensee to another licensee, for the purposes of conducting
commercial cannabis activity authorized by licensees pursuant to
this chapter.

 

Article begin insert 2. end insert   Administration

 

begin insert 19301. end insert   

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

begin insert 19302. end insert   

(a) There is hereby created within the office of the
Governor, the Governor’s Office of Marijuana Regulation, under
the supervision and control of the Director of the Office of
Marijuana Regulation, who shall be appointed by the Governor.
The Governor shall appoint the director at a salary to be fixed
and determined by the director with the approval of the Director
of Finance. The director shall serve in accordance with the State
Civil Service Act (Part 2 (commencing with Section 18500) of
Division 5 of Title 2 of the Government Code).

(b) The director shall be the appointing power of all employees
within the office, and all heads of divisions, bureaus, and other
employees in the office shall be responsible to the director for the
proper carrying out of the duties and responsibilities of their
respective positions.

(c) In developing a regulatory framework pursuant to this
chapter, the director shall consult with state agencies possessing
expertise in licensure and enforcement, including, but not limited
to, the Department of Alcoholic Beverage Control and the
Department of Consumer Affairs.

(d) The office shall have overall executive authority and
responsibility for implementation of all aspects of cannabis
regulation pursuant to this chapter.

(e) The office shall coordinate and provide oversight of all
activities described in this chapter. The office shall lead all state
and local authorities regarding the tracking of medical cannabis,
medical cannabis products, and licensees pursuant to this chapter.
All departments and divisions specified in Section 19304 shall
report directly to the office. Any information technology systems
created to store and process data related to commercial cannabis
licensing shall be integrated, and all licensing data shall be
immediately available to each licensing authority and to the office.

begin insert 19303. end insert   

The office shall maintain a registry of all permit holders
and shall maintain a record of all state licenses and commercial
cannabis activity of the permit holder throughout the length of
licensure and for a minimum of seven years following the
expiration of each license. The office shall make limited licensee
information available to a licensee so that it may verify whether
it is engaging in commercial cannabis activities with a properly
licensed entity.

begin insert 19304. end insert   

(a) The following entities shall report to and be directly
accountable to the office for their respective designated
responsibilities within the regulatory and enforcement framework,
as follows:

(1) The Division of Medical Cannabis Regulation, which is
established within the State Board of Equalization, shall do all of
the following:

(A) Be administered by a person who is appointed by the State
Board of Equalization.

(B) Administer this chapter, as it pertains to commercial
cannabis activity relating to dispensaries and transporters.

(2) The Division of Medical Cannabis Manufacturing and
Testing, which is established within the State Department of Public
Health, shall do all of the following:

(A) Be administered by a person who is appointed by the
Governor.

(B) Administer this chapter, as it pertains to manufacturing,
testing, and certification of testing laboratories for medical
cannabis and medical cannabis products.

(3) The Division of Medical Cannabis Cultivation, which is
established within the Department of Food and Agriculture, shall
do all of the following:

(A) Be administered by a person who is appointed by the
Governor.

(B) Administer this chapter as it pertains to cultivation of
medical cannabis.

(4) The California Environmental Protection Agency and the
California Natural Resources Agency shall coordinate and direct
the following entities in the discharge of their designated
regulatory responsibilities:

(A) The State Water Resources Control Board shall promulgate
regulations related to discharge into waterways, and diversion
therefrom, resulting from cannabis cultivation.

(B) The Department of Fish and Wildlife shall promulgate
regulations for the protection of any species affected by cultivation
activity, and regulations for any cultivation-related development,
including alteration of waterways.

(5) The Department of Justice shall conduct the following
activities:

(A) Perform criminal background checks of applicants for
licensure.

(B) Develop uniform security standards for dispensaries and
all phases of transport covered by this chapter.

(C) Provide supplemental enforcement on an as-needed basis
at the request of the office.

begin insert 19305. end insert   

(a) The office and licensing authorities shall have the
authority necessary for the implementation of this chapter,
including, but not limited to, all of the following:

(1) Establishing rules or regulations necessary to carry out the
purposes and intent of this chapter and to enable the office and
licensing authorities to exercise the powers and perform the duties
conferred by this chapter and in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. These rules and regulations shall not
limit the authority of a city, county, or city and county specified
in Article 3 (commencing with Section 19307), or specified in
Section 7 of Article XI of the California Constitution, or any other
law. For the performance of its duties, the office has the powers
set forth in Article 2 (commencing with Section 11180) of Chapter
2 of Part 1 of Division 3 of Title 2 of the Government Code. The
office shall review all regulations and guidance promulgated by
licensing authorities in the administration of this chapter to ensure
no duplication, overlap, or inconsistent regulations occur between
licensing authorities.

(2) Issuing state licenses to persons for the cultivation,
manufacture, transportation, and sale of medical cannabis within
the state.

(3) Setting application, licensing, and renewal fees for state
licenses issued pursuant to this chapter.

(4) Establishing standards for commercial cannabis activity.

(5) Establishing procedures for the issuance, renewal,
suspension, denial, and revocation of state licenses.

(6) Imposing a penalty authorized by this chapter or any rule
or regulation adopted pursuant to this chapter.

(7) Taking action with respect to an application for a state
license in accordance with procedures established pursuant to this
chapter.

(8) Overseeing the operation of the Medical Cannabis
Regulation Fund, established pursuant to Section 19361.

(9) Consulting with other state or local agencies, departments,
representatives of the medical cannabis community, or public or
private entities for the purposes of establishing statewide standards
and regulations.

(b) Protection of the public shall be the highest priority for the
office and the licensing authorities in exercising the licensing,
regulatory, and disciplinary functions pursuant to this chapter.
Whenever the protection of the public is inconsistent with other
interests sought to be promoted, the protection of the public shall
be paramount.

begin insert 19306. end insert   

(a) The office, by March 1, 2016, shall convene a task
force, which shall advise the office on the development of standards
pursuant to this chapter. The task force shall be responsible for
recommending to the office the appropriate roles of each state
entity as it pertains to this chapter, and shall recommend guidelines
on communication and information sharing between state entities,
and with local agencies, for implementation of this chapter.
Notwithstanding Section 10231.5 of the Government Code, the
task force shall submit a report on these standards, determinations,
and guidelines for implementation of this chapter to the Legislature
and state entities affected by this chapter by August 1, 2016. The
report submitted to the Legislature shall be submitted in
compliance with Section 9795 of the Government Code.

(b) The task force shall be comprised of representatives of
medical cannabis consumer advocates, environmental experts,
public health experts, medical cannabis industry representatives,
related regulatory authorities, labor, and law enforcement. The
task force may also be comprised of representatives of the State
Board of Equalization and Attorney General, and other state
agencies, as deemed appropriate. The task force shall have a
minimum of nine members, with one-third of the members
appointed by the California State Assembly, one-third of the
members appointed by the California State Senate, and one-third
of the members appointed by the Governor. If there is an unequal
divide between these three entities, the Governor shall make
appointments for the difference.

(c) Task force members shall serve on a voluntary basis and
shall be responsible for costs associated with their participation
in the task force. The licensing authorities shall not be responsible
for travel costs incurred by task force members or otherwise
compensating task force members for costs associated with their
participation in the task force.

 

Article begin insert 3. end insert   Enforcement and Local Control

 

begin insert 19307. end insert   

(a) Each licensing authority shall work in conjunction
with law enforcement agencies for the purposes of implementing,
administering, and enforcing this chapter, and any regulations
adopted pursuant to this chapter and taking appropriate action
against licensees and others who fail to comply with this chapter
or the regulations adopted pursuant to this chapter.

(b) The director and the persons employed by the licensing
authorities for the administration and enforcement of this chapter
are, for purposes of this chapter, peace officers in the enforcement
of the penal provisions of this chapter, the regulations adopted
pursuant to this chapter, and any other penal provisions of law
prohibiting or regulating the cultivation, processing, storing,
manufacturing, testing, transporting, or selling of medical
cannabis. These persons may, while acting as peace officers,
enforce any penal provisions of state law while in the course of
their employment.

(c) The regulatory directors, persons employed by the licensing
authorities for the administration and enforcement of this chapter,
peace officers listed in Section 830.1 of the Penal Code, and
officers listed in Section 830.6 of the Penal Code, while acting in
the course and scope of their employment as peace officers, may,
in enforcing this chapter, visit and inspect the premises of a
licensee at any time during which the licensee is acting pursuant
to the state license.

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

begin insert 19308. end insert   

(a) The office shall, in consultation with local
governments, develop an enforcement framework that clarifies the
enforcement roles of the state and local governments. Local
agencies are authorized to enforce any state statutory or regulatory
standard.

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

begin insert 19309. end insert   

(a) For facilities issued a state license that are located
within the incorporated area of a city, the city shall have full power
and authority to enforce this chapter and the rules, regulations,
and standards promulgated by the office. The city shall further
assume complete responsibility for any regulatory function relating
to those licensees within the city limits that would otherwise be
performed by the county or any county officer or employee, without
liability, cost, or expense to the county.

(b) For licensed facilities located within the unincorporated
area of a county, the county shall have full power and authority
to enforce this chapter and the rules, regulations, and standards
promulgated by the office.

(c) It is the intent of the Legislature in enacting this chapter to
provide for the statewide regulation of the commercial cannabis
activity and the enforcement of laws relating to commercial
cannabis activities without preempting city, county, or city and
county ordinances regulating or banning these activities. This
chapter is an exercise of the police powers of the state for the
protection of the safety, welfare, health, peace, and morals of the
people of the state.

(d) Nothing in this chapter, or any regulations promulgated
thereunder, shall be deemed to limit the authority or remedies of
a city, county, or city and county under any provision of law,
including, but not limited to, Section 7 of Article XI of the
California Constitution.

begin insert 19310. end insert   

(a) The director of a licensing authority or a district
attorney, county counsel, city attorney, or city prosecutor may
bring an action in the name of the people of the State of California
to enjoin a violation or the threatened violation of any provision
of this chapter, including, but not limited to, a licensee’s failure
to correct objectionable conditions following notice or as a result
of a rule promulgated pursuant to this chapter, and to assess and
recover civil penalties in accordance with this chapter. The action
shall be brought in the county in which the violation occurred or
is threatened to occur. A proceeding for injunctive relief brought
pursuant to this chapter shall conform to the requirements of
Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of
the Code of Civil Procedure.

(b) A state or local agency shall immediately notify the office
and the appropriate licensing authority of violations or arrests
made for violations over which the licensing authority has
jurisdiction that involve a licensee or licensed premises. Notice
shall be given within 10 days of the violation or arrest. The office
or licensing authority shall promptly investigate as to whether
grounds exist for suspension or revocation of the state license.

(c) This chapter shall not be construed to limit a law
enforcement agency’s ability to investigate unlawful activity in
relation to a state license.

(d) Nothing in this chapter shall prevent a city or other local
governing body from taking action as specified in Section 11362.83
of the Health and Safety Code.

(e) The office shall establish procedures to provide state and
local law enforcement, upon their request, with 24-hour access to
information to verify a state license, track transportation manifests,
and track the inventories of facilities issued a state license. This
record shall allow state and local law enforcement to verify a state
license and provide summary information on licensees consisting
of the name of the licensee, the date the license was issued, the
status of the license, and the licensee’s mailing address.

begin insert 19311. end insert   

(a) Licensing authorities and any relevant local agency
may examine the books and records of a licensee and may visit
and inspect the premises of a licensee as the licensing authority
or local agency deems necessary to perform their duties under this
chapter or local ordinance.

(b) If the licensee or any employee of the licensee refuses,
impedes, obstructs, or interferes with an inspection pursuant to
this chapter or local ordinance, or if the licensee fails to maintain
or provide the books and records required by this chapter, the
license may be summarily suspended and the licensing authority
shall commence proceedings for the revocation of the state license
in accordance with this chapter.

(c) All cultivation and dispensing licensees shall be subject to
an annual audit, as specified by the licensing authority, in order
to ensure proper documentation is kept at each facility. The
reasonable costs of the audit shall be paid for by the licensee.

begin insert 19312. end insert   

(a) This chapter shall in no way supersede the
provisions of Measure D, approved by the voters of the City of Los
Angeles on the May 21, 2013, ballot for the city, which granted
medical cannabis businesses and dispensaries qualified immunity
consistent with the terms of the measure and local ordinances.
Notwithstanding the provisions of this part, cannabis businesses
and dispensaries subject to the provisions of Measure D and its
qualified immunity shall continue to be subject to the ordinances
and regulations of the City of Los Angeles.

(b) It is the intent of the Legislature to recognize the unique
circumstances of the City of Los Angeles with respect to Measure
D and associated rules related to commercial cannabis activity.

begin insert 19313. end insert   

(a) The actions of a licensee or provisional licensee,
its employees, and its agents, that are permitted pursuant to both
a state license or provisional license and a license or permit issued
by the local jurisdiction following the requirements of the
applicable local ordinances, and that are conducted in accordance
with the requirements of this chapter and regulations adopted
pursuant to this chapter, are not unlawful under state law and
shall not be an offense subject to arrest, prosecution, or other
sanction under state law or be subject to a civil fine or be a basis
for seizure or forfeiture of assets under state law.

(b) The actions of a person who, in good faith and upon
investigation, allows his or her property to be used by a licensee
or provisional licensee, its employees, and its agents, as permitted
pursuant to both a state license and a license or permit issued by
the local jurisdiction following the requirements of the applicable
local ordinances, are not unlawful under state law and shall not
be an offense subject to arrest, prosecution, or other sanction
under state law, or be subject to a civil fine or be a basis for seizure
or forfeiture of assets under state law.

(c) Conduct that is within the scope of a license issued pursuant
to this chapter and permitted by local ordinance but not fully in
compliance with this chapter shall be subject to the enforcement
provisions of this chapter and shall not be subject to the penal
provisions of state law generally prohibiting cannabis-related
activity, unless and until the license is revoked.

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

begin insert 19314. end insert   

(a) A person engaging in commercial cannabis activity
and operating an unlicensed facility, building, structure, vehicle,
mobile unit, or location in violation of this chapter shall be subject
to civil penalties of up to twice the amount of the license fee for
each violation, and the office, licensing authority, or court may
order the destruction of medical cannabis associated with that
violation. Each day of operation shall constitute a separate
violation of this section. All civil penalties imposed and collected
pursuant to this section shall be deposited into the Medical
Cannabis Fines and Penalties Account established pursuant to
Section 19361.

(b) If an action for civil penalties is brought by the Attorney
General, the penalty collected shall be deposited into the General
Fund. If the action is brought by a district attorney or county
counsel, the penalty collected shall be paid to the treasurer of the
county in which the judgment was entered. If the action is brought
by a city attorney or city prosecutor, the penalty collected shall
be paid to the treasurer of the city in which the judgment was
entered.

begin insert 19315. end insert   

(a) This chapter does not, nor do Article 2
(commencing with Section 11357) and Article 2.5 (commencing
with Section 11362.7) of Chapter 6 of Division 10 of the Health
and Safety Code, prevent a city, county, or city and county from
doing any of the following:

(1) Adopting local ordinances inconsistent with this chapter
that do the following:

(A) Regulate the location, operation, or establishment of a
licensee or a person that cultivates, processes, possesses, stores,
manufactures, tests, transports, distributes, or sells medical
cannabis.

(B) Prohibit commercial cannabis activity within their
jurisdiction.

(2) Providing for the administrative, civil, or criminal
enforcement of the ordinances described in paragraph (1).

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

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

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

 

Article begin insert 4. end insert   Licensure

 

begin insert 19316. end insert   

(a) This chapter shall not apply to, and shall have no
diminishing effect on the protections granted to, a patient or a
primary caregiver pursuant to the Compassionate Use Act of 1996.

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

(2) A primary caregiver who cultivates, possesses, stores,
manufactures, transports, donates, or provides cannabis exclusively
for the personal medical purposes of no more than five specified
qualified patients for whom he or she is the primary caregiver
within the meaning of Section 11362.7 of the Health and Safety
Code but who does not receive remuneration for these activities
except for compensation in full compliance with subdivision (c)
of Section 11362.765 of the Health and Safety Code is not engaged
in commercial cannabis activity and is, therefore, exempt from the
licensure requirements of this chapter.

(c) Exemption from the license requirements of this chapter
shall not limit or prevent a city, county, or city and county from
regulating or banning the cultivation, storage, manufacture,
transport, provision, or other activity by the exempt person, or
impair the enforcement of that regulation or ban.

begin insert 19317. end insert   

The state shall have the right and authority to conduct
state licensure activities and to regulate commercial cannabis
activity pursuant to this chapter. Local governments have the right
and authority to grant permits and regulate commercial cannabis
activity within their jurisdiction pursuant to local ordinances. In
the exercise of these rights and powers, the state and each of its
agencies, and all local agencies, are hereby deemed not to be
engaged in activities requiring licensure under this chapter.

begin insert 19318. end insert   

(a) Licensing authorities shall issue state licenses to
qualified applicants engaging in commercial cannabis activity
pursuant to this chapter. Beginning January 1, 2018, no person
shall engage in commercial cannabis activity without possessing
a state license and a local permit. For purposes of this section,
“state license” includes a provisional license issued pursuant to
Article 6 (commencing with Section 19330).

(b) Local permits shall be determined by local ordinances.
Licensing authorities issuing state licenses shall have sole authority
to revoke a state license. Local agencies issuing local permits shall
have sole authority to revoke a local permit.

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

(d) Even if a state license has been granted pursuant to this
chapter, a facility shall not operate in a local jurisdiction that
prohibits the establishment of that type of business. A facility shall
not commence activity under the authority of a state license until
the applicant has obtained, in addition to the state license, a license
or permit from the local jurisdiction in which he or she proposes
to operate, following the requirements of the applicable local
ordinances.

(e) If a local government agency notifies the office or a licensing
authority and provides evidence that a licensee or applicant within
its jurisdiction is in violation of local ordinances relating to
commercial cannabis activities, the licensing authority shall revoke
the state license within 20 working days.

(f) Revocation of either a state or local license shall terminate
the ability of a medical cannabis business to operate within
California.

begin insert 19319. end insert   

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

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

(2) Procedures for the issuance, renewal, suspension, denial,
and revocation of a state license.

(3) Procedures for appeal of fines and the appeal of denial,
suspension, or revocation of a state license.

(4) Application, licensing, and renewal forms and fees.

(5) Time periods, not to exceed 90 days, by which the licensing
authority shall approve or deny an application for a state license.
The failure of the licensing authority to act upon an application
for licensure within the time prescribed shall not be deemed
approval of the application.

(6) Qualifications for licensees.

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

(8) Requirements to ensure that all licensees and certified testing
laboratories conform with applicable standards equivalent to state
statutory environmental, agricultural, consumer protection, and
food and product safety requirements. These standards shall be
in addition, and not limited, to any other state and local
requirements.

(b) Each state license application approved by the respective
licensing authority pursuant to this chapter is separate and distinct.

(c) A state license application approved by a licensing authority
pursuant to this chapter shall be valid for a period not to exceed
one year from the date of approval unless revoked or suspended
earlier than that date pursuant to this chapter or the rules or
regulations adopted pursuant to this chapter.

(d) Each licensing authority may adopt regulations for
additional licenses for cannabis activity within its statutory
jurisdiction pursuant to this chapter, as deemed necessary.

(e) Each state license application approved by a licensing
authority shall be reported to the office within 24 hours of its
approval.

(f) A licensing authority shall not issue a state license unless
the applicant has met all of the requirements of this chapter.

(g) Each licensing authority shall adopt regulations as needed
to implement the relevant licensing program within one year
following the establishment of provisional licenses, pursuant to
Section 19330. The regulations shall not limit the authority of a
city, county, or city and county pursuant to Section 7 of Article XI
of the California Constitution or any other law. The regulations
shall do all of the following:

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

(2) Establish applicant qualifications.

(3) Establish state licensee employee qualifications, including,
but not limited to, training and screening requirements.

(4) Establish state licensee security requirements, including,
but not limited to, procedures to limit access to facilities and to
prevent diversion of product to nonmedical use.

(5) Establish procedures and protocols for identifying,
managing, and disposing of contaminated, adulterated,
deteriorated, or excess product.

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

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

begin insert 19320. end insert   

(a) An applicant for a state license shall do all of the
following:

(1) Pay the fee or fees required by this chapter for each state
license for which an application is submitted.

(2) Register with the licensing authority on forms prescribed
by the licensing authority. The forms shall contain sufficient
information to identify the licensee, including all of the following:

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

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

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

(3) In the case of a dispensary, provide the name and address
of each licensed cultivation site and licensed manufacturer from
which the dispensary will acquire or obtain medical cannabis or
medical cannabis products.

(4) Provide a description, in writing, of the scope of business
of the proposed facility.

(5) Provide evidence that the applicant and owner have been
legal full-time residents of the state for not less than two years.

(6) Provide detailed operating procedures, in writing, for the
proposed facility, which shall include, but not be limited to,
procedures for facility and operational security, prevention of
diversion, employee screening, storage of medical cannabis,
personnel policies, and recordkeeping procedures.

(7) Submit the applicant’s fingerprint images as follows:

(A) For purposes of this paragraph, “applicant” means the
owner or owners of a proposed facility, including all persons or
entities having an ownership interest other than a security interest,
lien, or encumbrance on property that will be used by the facility.
If the owner is an entity, fingerprints shall be submitted for each
person participating in the direction, control, or management of,
or having a financial interest in, the proposed facility.

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

(C) The Department of Justice shall provide a response to the
licensing authority pursuant to paragraph (1) of subdivision (p)
of Section 11105 of the Penal Code.

(D) The licensing authority shall request from the Department
of Justice subsequent notification service, as provided pursuant
to Section 11105.2 of the Penal Code, for applicants.

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

(8) If applicable, provide documentation that the applicant will
be in compliance with all local ordinances and regulations,
including, but not limited to, an entity granted immunity under
Measure D, approved by the voters of the City of Los Angeles at
the May 21, 2013, general election.

(9) Provide evidence of the legal right to occupy and use an
established location, including that, if the proposed facility is a
cultivator or a dispensary, that the proposed facility is located
beyond at least a 600-foot radius from a school, or, if applicable,
an immunity from prosecution for that occupancy or use pursuant
to Measure D, approved by the voters of the City of Los Angeles
at the May 21, 2013, general election.

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

(11) (A) For an applicant with 20 or more employees, provide
a statement that the applicant will enter into, or demonstrate that
it has already entered into, and abide by the terms of a labor peace
agreement.

(B) For the purposes of this paragraph, “employee” does not
include a supervisor.

(C) For purposes of this paragraph, “supervisor” means an
individual having authority, in the interest of the licensee, to hire,
transfer, suspend, lay off, recall, promote, discharge, assign,
reward, or discipline other employees, or responsibility to direct
them or to adjust their grievances, or effectively to recommend
such action, if, in connection with the foregoing, the exercise of
that authority is not of a merely routine or clerical nature, but
requires the use of independent judgment.

(12) Provide any other information required by the licensing
authority.

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

(14) For an applicant seeking a cultivation or dispensary
license, provide a notarized statement from the owner of real
property or landlord where the cultivation or dispensing
commercial medical cannabis activities will occur, as proof to
demonstrate the landowner has acknowledged and consented to
permit cultivation or dispensary activities to be conducted on the
property by the tenant applicant.

(b) Each location and each discrete use of a single location
shall require a separate state license. Each application for a state
license is separate and distinct, and the licensing authority may
charge a separate fee for each.

(c) For applicants seeking a state license to cultivate and
manufacture, the application shall also include a detailed
description of the operating procedures for all of the following,
as applicable:

(1) Cultivation.

(2) Extraction and infusion methods.

(3) The transportation process.

(4) Inventory procedures.

(5) Quality control procedures.

begin insert 19321. end insert   

(a) Upon receipt of an application for licensure and
the applicable fee, each licensing authority shall make a thorough
investigation to determine whether the applicant and the premises
for which a state license is applied qualify for the state license and
whether this chapter has been complied with, and shall investigate
all matters connected therewith that may affect the public welfare
and morals.

(b) A licensing authority shall deny an application if either the
applicant or the premises for which a state license is applied do
not qualify for licensure under this chapter.

(c) A licensing authority may place reasonable conditions upon
licensure if grounds exist for denial of the state license, and the
licensing authority finds those grounds may be removed by the
imposition of those conditions. However, the limitations set forth
in paragraph (15) of subdivision (d) shall not be waived.

(d) Each licensing authority shall deny the application for
licensure or renewal, or suspend or revoke a state license, if any
of the following conditions apply:

(1) An entity making or authorizing in any manner or by any
means a written or oral statement that is untrue or misleading and
that is known, or that by exercise of reasonable care should be
known, to be untrue or misleading.

(2) Conduct that constitutes fraud.

(3) Conduct constituting gross negligence.

(4) Failure to comply with the provisions of this chapter or any
rule or regulation adopted pursuant to this chapter.

(5) Conduct that constitutes grounds for denial of licensure
pursuant to Chapter 2 (commencing with Section 480) of Division
1.5.

(6) Local agencies have notified the licensing authority or the
office and provided evidence that a licensee or applicant within
its jurisdiction is in violation of local ordinances relating to
medical cannabis activities.

(7) The applicant fails to meet the requirements of this chapter
or any regulation adopted pursuant to this chapter or any
applicable city, county, or city and county ordinance or regulation.
If a local government adopts an ordinance or resolution
authorizing medical cannabis to be cultivated, manufactured,
stored, distributed, or sold within its jurisdiction, it shall submit
to the office documentation detailing their renewal requirements.

(8) Granting or continuation of a state license would be contrary
to the public welfare or morals.

(9) The applicant holding or seeking a state license has violated
any law prohibiting conduct involving moral turpitude.

(10) The application has failed to state with sufficient specificity
the jurisdiction and location at which the applicant proposes to
establish operations.

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

(12) The applicant fails to provide notarized written proof that
the owner of real property or landlord has acknowledged and
consented to its tenant’s proposed cultivation or dispensing of
medical cannabis or medical cannabis products.

(13) The applicant has failed to provide information requested.

(14) The applicant, or any of its officers, directors, or owners,
has been convicted of a felony criminal conviction for drug
trafficking involving a minor, felonies subject to enhancements
Section 11370.4 or 11379.8 of the Health and Safety Code, a
violent felony, as specified in subdivision (c) of Section 667.5 of
the Penal Code, a serious felony as specified in subdivision (c) of
Section 1192.7 of the Penal Code, a felony offense involving fraud
or deceit, or any other felony that, in the licensing authority’s
determination, would impair the applicant’s ability to appropriately
operate as a state licensee. The licensing authority may, at its
discretion, issue a state license to an applicant that has obtained
a certificate of rehabilitation pursuant to Section 4852.13 of the
Penal Code.

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

(16) The applicant, or any of its officers, directors, or owners,
has been sanctioned by a licensing authority, the office, or a city,
county, or a city and county for unlicensed commercial medical
cannabis activities or has had a license revoked under this chapter
in the previous three years.

(17) The applicant, or any of its officers, directors, or owners,
has been subject to fines or penalty for cultivation or production
of a controlled substance on public or private lands pursuant to
Section 12025 of the Fish and Game Code.

(18) The proposed commercial medical cannabis activity will
violate any applicable local law or ordinance.

(19) The applicant has had 20 employees or more in the past
year and failed to enter into a labor peace agreement.

(20)  The applicant or the owner is unable to establish that he
or she has been a resident of the state for not less than 2 years.

(e) Applicants shall be notified of a denied application in writing
via personal service or mail addressed to the address of the
applicant or licensee set forth in the application. The denial letter
shall contain the detailed reasons for which the application was
denied. The applicant shall have the right to appeal the denial and
be given a hearing within 30 days of the appeal. On appeal, the
decision shall be upheld unless the applicant demonstrates that
the applicant is in fact eligible for licensure and the application
is in compliance with this chapter.

begin insert 19323. end insert   

(a) Provided the applicant has not committed an act
or crime constituting grounds for the denial of licensure under
Section 19321, a licensing authority may issue a state license and
send a proof of issuance to the applicant.

(b) A licensing authority shall, by regulation, prescribe
conditions upon which a person whose state license has previously
been denied, suspended, or revoked, may be issued a state license.

begin insert 19324. end insert   

The office may adopt regulations to limit the number
of state licenses issued pursuant to this chapter upon a finding
that the otherwise unrestricted issuance of state licenses is
dangerous to the public health and safety.

 

Article begin insert 5. end insert   Regulation of Medical Cannabis

 

begin insert 19325. end insert   

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

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

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

(d) A person other than a licensed transporter shall not transport
medical cannabis from one facility issued a state license to another.

(e) A licensed manufacturer may obtain medical cannabis from
a licensed cultivator and may furnish medical cannabis products
to a licensed dispensary.

(f) Medical cannabis and medical cannabis products shall be
tested by a certified testing laboratory.

(g) For purposes of this section, “license” includes a provisional
license issued pursuant to Section 19330.

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

begin insert 19326. end insert   

(a) A licensee shall not cultivate, process, store,
manufacture, transport, or sell medical cannabis in the state unless
accurate records are kept at the licensed premises of the growing,
processing, storing, manufacturing, transporting, or selling by the
licensee.

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

(1) The name and address of the supplier.

(2) The dates on which the product was received.

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

(4) The location of the cultivation site.

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

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

(7) Receipts for all expenditures incurred by the licensee and
banking records, if any, for all funds obtained or expended in the
performance of any activity under the authority of the state license.

(c) Records shall be kept for a minimum of seven years.

(d) The office and an appropriate state or local agency may
examine the books and records of a state licensee and may visit
and inspect the premises of a state licensee, as the office or state
or local agency deems necessary to perform its duties under this
chapter.

(e) Books or records requested by the office or an appropriate
state or local agency shall be provided by the licensee no later
than five business days after the request is made.

(f) The office or a state or local agency may enter and inspect
the premises of a facility issued a state license between the hours
of 8 a.m. and 8 p.m. on any day that the facility is open, or at any
reasonable time, to ensure compliance and enforcement of the
provisions of this chapter or a local ordinance.

(g) If a licensee or an employee of a licensee refuses, impedes,
obstructs, or interferes with an inspection pursuant to this section,
the state license may be summarily suspended and the licensing
authority shall directly commence proceedings for the revocation
of the state license.

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

(i) All cultivation and dispensing licensees shall be subject to
an annual audit, as specified by the licensing authority, in order
to ensure proper documentation is kept at each site or facility. The
reasonable costs of the audit shall be paid for by the licensee.

begin insert 19327. end insert   

(a) A licensee may only hold a state license in up to
two separate license categories, as follows:

(1) Type 1, 1A, and 5 licensees may apply for type 6A, 6B, 7A,
and 7B licenses or type 10, 11, and 12 licenses.

(2) Type 6A, 6B, 7A, and 7B licensees may apply for type 1, 1A,
and 5 licenses or type 10, 10D, 11, 11D, 12, and 12D licenses.

(3) Type 10, 11, and 12 licensees may apply for type 1, 1A, and
5 licenses or type 6A, 6B, 7A, and 7B licenses.

(4) Type 10D, 11D, and 12D licensees may apply for type 6A,
6B, 7A, and 7B licenses.

(b) Types 2, 2A, 3, 3A, 4, and 8 licensees shall not hold licenses
in any other category.

(c) Type 9 licensees may apply only for one additional license
from either the cultivation, manufacturing, or dispensing category.

(d) It is the intent of the Legislature to further develop which
licensees may hold more than one license type.

begin insert 19328. end insert   

Each licensing authority shall make recommendations
to the Legislature pertaining to the establishment of an appeals
and judicial review process for persons aggrieved by a final
decision of the licensing authority.

begin insert 19329. end insert   

This chapter and Article 2 (commencing with Section
11357) and Article 2.5 (commencing with Section 11362.7) of
Chapter 6 of Division 10 of the Health and Safety Code do not
require an employer to permit or accommodate the use,
consumption, possession, transfer, display, transportation, sale,
or growth of cannabis in the workplace or affect the ability of
employers to have policies restricting the use of cannabis by
employees, or prevent employers from complying with federal law.

 

Article begin insert 6. end insert   Provisional Licensing

 

begin insert 19330. end insert   

(a) Each licensing authority shall, as soon as
practicable following January 1, 2016, allow a qualified applicant
for licensure to apply for and receive a provisional license to
engage in commercial cannabis activity so as to ensure an
adequate supply of medical cannabis upon full implementation of
this chapter.

(b) Each licensing authority shall establish appropriate fees
not to exceed the reasonable regulatory costs to the licensing
authority for the issuance of a provisional license under its
jurisdiction.

(c) Each licensing authority shall, if the applicant meets all the
requirements in this section, issue a provisional license to
individuals and entities that the licensing authority determines
were, during the three months prior to January 1, 2016, regularly
cultivating, processing, manufacturing, transporting, or
distributing medical cannabis collectively or cooperatively in full
compliance with any applicable local ordinance, and to continue
to do so until the licensee’s application for a state license has been
approved or denied under this chapter, but no later than 90 days
after the licensing authority begins accepting applications for
regular state licenses. The licensing authority may consult with
relevant local agencies in making a determination on whether a
provisional license applicant is in compliance with applicable
ordinances.

(d) To qualify for a provisional license, an applicant shall
disclose to the appropriate licensing authority all of the following
information in writing:

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

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

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

(4) For the three months prior to January 1, 2016, the quantity
of cannabis cultivated, processed, manufactured, tested,
transported, or sold at a location, and the quantity expected to be
cultivated, processed, manufactured, tested, transported, or sold
from January 1, 2016, to July 1, 2016, inclusive. The licensee shall
make its records of current activity, and activity for the three
months prior to January 1, 2016, available to the licensing
authority upon request.

(5) For an applicant seeking a cultivation or dispensary license,
a notarized statement from the owner of real property or landlord
where the cultivation or dispensing of commercial cannabis
activities will occur, as proof to demonstrate the landowner has
acknowledged and consented to permit cultivation or dispensary
activities to be conducted on the property by the tenant applicant.

(e) Upon receipt of the application materials and fee, if the
applicant meets all the requirements of this section and if the
applicant has not committed any act or crime constituting grounds
for the denial of licensure, the licensing authority shall issue a
provisional license and send a proof of issuance to the applicant.

(f) Notwithstanding any other provision of this section, a
licensing authority shall not issue a provisional license to an
individual or entity, or for a premises, against whom there are
pending state or local administrative or judicial proceedings or
actions initiated by a city, county, or city and county under an
applicable local ordinance, or who has been determined through
those proceedings to have violated a local ordinance related to
cannabis activity, or that knowingly provides false or fraudulent
information on an application for licensure.

(g) Entities that are provided immunity under Measure D,
approved by the voters of the City of Los Angeles at the May 21,
2013, general election, shall be considered the equivalent of
entities that are registered, permitted, or licensed as a medical
cannabis business, dispensary, or other entity involved in providing
medical cannabis to patients under a local ordinance and shall
be considered in compliance with a local ordinance for the
purposes of this section.

(h) A provisional licensee shall comply with all standards and
requirements applicable to a licensee under this chapter, including,
but not limited to, the production, recordkeeping, security, and
transportation requirements and standards.

(i) Beginning July 1, 2017, all commercial cannabis activity
shall be conducted between licensees of commercial cannabis
activity. If the licensing authority has not promulgated its
respective regulations by that date, the licensing authority shall
provide an extension for all provisional licenses for applicants
abiding by the provisions of this chapter.

 

Article begin insert 7. end insert   Licensed Cultivation Sites

 

begin insert 19332. end insert   

(a) The Division of Medical Cannabis Cultivation in
the Department of Food and Agriculture shall promulgate
regulations governing the licensing of cultivation sites. For
purposes of this chapter, the Secretary of the Department of Food
and Agriculture shall declare medical cannabis to be an
agricultural product. The department shall develop standards for
the production and labeling of all edible medical cannabis
products, standards for the use of pesticides and rodenticides in
cultivation, and, in consultation with the State Department of
Public Health, maximum tolerances for pesticides, rodenticides,
and other foreign object residue in harvested cannabis.

(b) The Department of Food and Agriculture shall have the
authority necessary for the implementation of this chapter.
Department regulations shall do all of the following:

(1) Provide that weighing or measuring devices used in
connection with the sale or distribution of medical cannabis are
required to meet standards analogous to Division 5 (commencing
with Section 12001).

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

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

(c) State licenses to be issued by the Division of Medical
Cannabis Cultivation are as follows:

(1) Type 1, or “specialty outdoor,” for outdoor cultivation of
less than 5,000 square feet of total area on one property. Maximum
of 50 mature plants on the property.

(2) Type 1A, or “specialty indoor,” for indoor cultivation of
less than 5,000 square feet of total area on one property. Maximum
of 50 mature plants on the property.

(3) Type 2, or “small outdoor,” for outdoor cultivation between
5,001 and 10,000 square feet of total area on one property.
Maximum of 99 mature plants on the property.

(4) Type 2A, or “small indoor,” for indoor cultivation between
5,001 and 10,000 square feet of total area on one property.
Maximum of 99 mature plants on the property.

(5) Type 3, or “medium outdoor,” for outdoor cultivation
between 10,001 and 30,000 square feet of total area on one
property. Maximum of 299 mature plants on the property. The
Division of Medical Cannabis Cultivation shall limit the number
of licenses allowed of this type.

(6) Type 3A, or “medium indoor,” for indoor cultivation
between 10,001 and 30,000 square feet of total area on one
property. Maximum of 299 mature plants on the property. The
Division of Medical Cannabis Cultivation shall limit the number
of licenses allowed of this type.

(7) Type 4, or “large outdoor,” for outdoor cultivation greater
than 30,001 square feet of total area on one property. Maximum
of 500 mature plants on the property. The Division of Medical
Cannabis Cultivation shall limit the number of licenses allowed
of this type.

(8) Type 5, or “nursery,” for cultivation of medical cannabis
solely as a nursery. Type 5 licensees may transport live plants.

(d) All license fees collected by the division pursuant to this
chapter shall be deposited into the Medical Cannabis Cultivation
Fees Account, which is hereby established within the fund. All
moneys within this account are available upon appropriation by
the Legislature to the division solely for the purposes of fully
funding and administering this chapter, including, but not limited
to, the costs incurred by the division for its administrative expenses
and costs and the costs of regulation.

(e) It is the intent of the Legislature to establish appropriate
protocols for the collection of the specific location of cultivation
sites.

 

Article begin insert 8. end insert   Licensed Dispensing Facilities

 

begin insert 19334. end insert   

(a) The State Board of Equalization shall promulgate
regulations governing the licensing and regulation of wholesalers,
dispensing facilities, and transporters. State enforcement shall be
conducted in coordination with local authorities.

(b) State licenses to be issued by the State Board of Equalization
are as follows:

(1) Type 9, or “wholesale,” for the storage of medical cannabis
or medical cannabis products. Maximum storage shall be two
pounds of dried flower or 200 individual units per medical
cannabis product.

(2) Type 10, or “small dispensary,” for dispensaries with 1-50
employees, including management.

(3) Type 10D, or “small dispensary-delivery,” for dispensaries
with the same restrictions as Type 10; also allows for delivery.

(4) Type 11, or “medium dispensary,” for dispensaries with
51-100 employees, including management.

(5) Type 11D, or “medium dispensary-delivery,” for
dispensaries with the same restrictions as Type 11; also allows
for delivery.

(6) Type 12, or “large dispensary,” for dispensaries with 100
employees or more, including management.

(7) Type 12D, or “large dispensary-delivery,” for dispensaries
with the same restrictions as Type 12; also allows for delivery.

(8) Type 13, or “transport,” for transporters of medical
cannabis and medical cannabis products.

 

Article begin insert 9. end insert   Licensed Transporters

 

begin insert 19336. end insert   

(a) A licensee authorized to transport, or transport
and deliver, medical cannabis and medical cannabis products
shall do so only as set forth in this chapter.

(b) Prior to transporting or delivering medical cannabis or
medical cannabis products, a licensee authorized to transport or
deliver medical cannabis or medical cannabis products shall do
both of the following:

(1) Complete an electronic shipping manifest as prescribed by
the licensing authority. All delivery shipping manifests shall not
identify the qualified patient or primary caregiver by name or
address.

(2) Securely transmit the manifest to the licensing authority and
the licensee that will receive the medical cannabis product, as
applicable.

(c) During transportation or delivery, the licensed transporter
shall maintain a physical copy of the shipping manifest and make
it available upon request to agents of the licensing authority, local
law enforcement officers, or any other designated enforcement
agency.

(d) The licensee receiving the shipment shall maintain each
electronic shipping manifest and shall make it available upon
request to agents of the licensing authority, local law enforcement
officers, or any other designated enforcement agency.

(e) Upon receipt of the transported shipment, a licensee shall
submit to the licensing agency a record verifying receipt of the
shipment and the details of the shipment.

begin insert 19337. end insert   

(a) Transported and delivered medical cannabis or
medical cannabis products shall be transported only in a storage
compartment that is securely affixed to the interior of the
transporting vehicle and that is not visible from outside the vehicle.
This requirement shall only apply to licensees transporting medical
cannabis or medical cannabis products with a total retail value
of at least an amount equal to a statewide monetary threshold,
which shall be adopted by regulation by the licensing authority
after review by the task force and the office.

(b) A vehicle transporting medical cannabis or medical cannabis
products shall travel only directly between licensed facilities,
unless otherwise authorized under its license.

(c) All transport or delivery vehicles shall be staffed with a
minimum of two employees. At least one employee shall remain
with the vehicle at all times when the vehicle contains medical
cannabis. This requirement shall only apply to licensees
transporting medical cannabis or medical cannabis products with
a total retail value of at least an amount equal to a statewide
monetary threshold, which shall be adopted by regulation by the
licensing authority after review by the task force and the office.

(d) Each transport or delivery team member shall possess
documentation of licensing and a government-issued identification
card at all times when transporting or delivering medical cannabis
and shall produce it upon the request of agents of any regulatory
authority or a law enforcement official.

begin insert 19338. end insert   

(a) The licensing authority shall develop a database
containing the electronic shipping manifests, which shall include,
but not be limited to, the following information:

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

(2) The estimated times of departure and arrival.

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

(4) The actual time of arrival.

(5) A categorization of the product.

(b) The database shall be designed to flag irregularities for a
regulatory authority to investigate. An authorized enforcement
authority may, at any time, inspect shipments and request
documentation for current inventory.

begin insert 19339. end insert   

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

(b) A local jurisdiction shall not prevent transportation of
medical cannabis or medical cannabis products on public roads
by a licensee transporting medical cannabis or medical cannabis
products that acts in compliance with this chapter and applicable
local ordinances.

begin insert 19340. end insert   

(a) All mobile, vehicular, and Internet-based delivery
services are prohibited except as authorized by this chapter.

(b) Upon approval of the licensing authority, a licensee
authorized to provide delivery services shall abide by the following:

(1) The city, county, or city and county in which the premises
of the licensee is located, and in which each delivery is made, must
specifically permit delivery service by ordinance referring to this
section.

(2) All employees delivering medical cannabis or medical
cannabis products must carry a current license authorizing those
services with them during deliveries, and must present that license
upon request to state and local law enforcement, employees of
regulatory authorities, and other state and local agencies enforcing
this chapter.

(c) A city, county, or city and county shall have the authority
to impose a tax, pursuant to Section 19355, on each delivery
transaction completed by a licensee.

(d) Whenever a licensing authority has knowledge that a licensee
has transported or delivered, or arranged or facilitated the
transport or delivery of, medical cannabis or medical cannabis
products in violation of this chapter, the licensing authority shall
summarily suspend that facility’s license and shall without delay
commence proceedings for the revocation of the license in
accordance with this chapter.

(e) All license fees collected by the licensing authority pursuant
to this chapter shall be deposited into the Medical Cannabis Retail
Fees Account, which is hereby established within the fund. All
moneys within the Medical Cannabis Retail Fees Account are
available upon appropriation to the State Board of Equalization,
solely for the purposes of fully funding and administering this
chapter, including, but not limited to, the costs incurred by the
board for its administrative expenses and costs and the costs of
regulation.

 

Article begin insert 10. end insert   Licensed Manufacturers and Certified Laboratories

 

begin insert 19342. end insert   

(a) The Division of Medical Cannabis Manufacturing
and Testing within the State Department of Public Health shall
promulgate regulations governing the licensing of cannabis
manufacturers.

(b) Licenses to be issued by the division are as follows:

(1) Type 6A, or “small manufacturing level 1,” for
manufacturing sites that use a maximum of XXX pounds of medical
cannabis each year to produce medical cannabis products, using
nonvolatile solvents.

(2) Type 6B, or “small manufacturing level 2,” for
manufacturing sites that use a maximum of XXX pounds of medical
cannabis each year to produce medical cannabis products, using
volatile solvents.

(3) Type 7A, or “large manufacturing level 1,” for
manufacturing sites that use a maximum of XXX pounds of medical
cannabis each year to produce medical cannabis products, using
nonvolatile solvents. The division shall limit the number of licenses
of this type.

(4) Type 7B, or “large manufacturing level 2,” for
manufacturing sites that use a maximum of XXX pounds of medical
cannabis each year to produce medical cannabis products, using
volatile solvents. The division shall limit the number of licenses
of this type.

(5) Type 8, or “testing,” for testing of medical cannabis and
medical cannabis products. Type 8 licensees shall have their
facilities certified according to regulations set forth by the division.

(c) All license fees collected by the division pursuant to this
chapter shall be deposited into the Medical Cannabis
Manufacturing and Testing Fees Account, which is hereby
established within the fund. All moneys within the Medical
Cannabis Manufacturing and Testing Fees Account are available
upon appropriation by the Legislature to the division, solely for
the purposes of fully funding and administering this chapter,
including, but not limited to, the costs incurred by the division for
its administrative expenses and costs and the costs of regulation.

begin insert 19343. end insert   

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

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

(c) These requirements shall apply to all entities, including
third-party laboratories, engaged in the testing of medical cannabis
pursuant to this chapter.

begin insert 19344. end insert   

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

(b) A laboratory certified by the department to perform random
sample testing of medical cannabis products shall not acquire,
process, possess, store, transfer, transport, or dispense medical
cannabis plants or medical cannabis products except through a
patient, primary caregiver, or a facility issued a state license. All
transfer or transportation shall be performed pursuant to a
specified chain of custody protocol.

(c) The department shall develop procedures to ensure that
testing of cannabis occurs prior to delivery to dispensaries or any
other business, and specify how often licensees shall test cannabis,
that the cost of testing shall be borne by the licensed cultivators,
and requiring destruction of harvested batches whose testing
samples indicate noncompliance with health and safety standards
promulgated by the department, unless remedial measures can
bring the cannabis into compliance with quality assurance
standards as promulgated by the department.

(d) The department shall establish a certification fee, and
laboratories shall pay a fee to be certified. Certification fees shall
not exceed the reasonable regulatory cost of the certification
activities.

(e) All certification fees collected by the department pursuant
to this chapter shall be deposited into the Medical Cannabis
Manufacturing and Testing Fees Account, which is hereby
established within the fund.

begin insert 19345. end insert   

(a) The Division of Medical Cannabis Manufacturing
and Testing within the State Department of Public Health shall
promulgate the following standards:

(1) Health and safety standards applicable to all medical
cannabis, and medical cannabis products, including maximum
potency standards.

(2) Standards for licensed manufacturers of medical cannabis
and medical cannabis products, including, but not limited to, edible
products.

(b) At a minimum, the standards required by this section shall
do all of the following:

(1) Prescribe sanitation standards analogous to the California
Retail Food Code (Part 7 (commencing with Section 113700) of
Division 104 of the Health and Safety Code) for food preparation,
storage, handling, and sale of edible medical cannabis products.
For purposes of this chapter, edible medical cannabis products
are deemed to be unadulterated food products.

(2) Require that edible medical cannabis products produced,
distributed, provided, donated, or sold by licensees shall be limited
to nonpotentially hazardous food, as established by the State
Department of Public Health pursuant to Section 114365.5 of the
Health and Safety Code.

(3) Require that facilities in which edible medical cannabis
products are prepared shall be constructed in accordance with
applicable building standards, health and safety standards, and
other state laws.

(4) Require that all edible medical cannabis products shall be
packaged at the original point of preparation.

(c) No person shall engage in the manufacture, packing, or
holding of processed food containing edible cannabis unless the
person has a valid registration from the department pursuant to
Section 110460 of the Health and Safety Code. Health and safety
standards prescribed by this section or promulgated through
regulation may be enforced by local environmental health
departments.

begin insert 19346. end insert   

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

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

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

(A) Manufacture date and source.

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

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

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

(E) Net weight of medical cannabis in the package.

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

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

(H) Clear indication, in bold type, that the product contains
medical cannabis.

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

(J) The name and location of the licensed dispensing facility
providing the product.

(K) The date of sale.

(L) Any other requirement set by the department.

(b) Only generic food names may be used to describe edible
medical cannabis products.

 

Article begin insert 11. end insert   Cannabis Employee Certification and Apprenticeship

 

begin insert 19350. end insert   

This article applies only to cultivation sites and
dispensaries.

begin insert 19351. end insert   

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

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

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

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

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

(e) Establish registration fees in an amount reasonably
necessary to implement this article, not to exceed twenty-five
dollars ($25) for the initial registration. There shall be no fee for
annual renewal of registration. Fees collected for cultivation sites
and dispensaries shall be placed into the Medical Cannabis
Cultivation Fee Account and the Medical Cannabis Retail Fee
Account, respectively.

begin insert 19352. end insert   

(a) By January 1, 2017, the Division of Labor
Standards Enforcement shall develop a certification program for
cannabis employees. Commencing January 1, 2019, except as
provided in subdivision (c), certification shall be required of all
persons who perform work as cannabis employees.

(b) Individuals desiring to be certified shall submit an
application for certification and examination.

(c) (1) Certification is not required for registered apprentices
working as cannabis employees as part of a state-approved
apprenticeship program. An apprentice who is within one year of
completion of his or her term of apprenticeship shall be permitted
to take the certification examination and, upon passing the
examination, shall be certified immediately upon completion of
the term of apprenticeship.

(2) Commencing January 1, 2019, an uncertified person may
perform work for which certification is otherwise required in order
to acquire the necessary on-the-job experience for certification
provided that the person shall be under the direct supervision of
a cannabis employee certified pursuant to this section who is
responsible for supervising no more than one uncertified person.

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

begin insert 19353. end insert   

(a) The following shall constitute additional grounds
for disciplinary proceedings, including suspension or revocation
of the license issued pursuant to this chapter:

(1) The licensee willfully employs one or more uncertified
persons to perform work as cannabis employees in violation of
this article.

(2) The licensee willfully fails to provide adequate supervision
of uncertified workers.

(3) The licensee willfully fails to provide adequate supervision
of apprentices.

(b) The Labor Commissioner shall maintain a process for
referring cases to the appropriate regulatory authority when it
has been determined that a violation of this section has likely
occurred. The Labor Commissioner shall have a memorandum of
understanding with the regulatory authorities in furtherance of
this section.

(c) Upon receipt of a referral by the Labor Commissioner
alleging a violation under this section, the appropriate licensing
authority shall open an investigation. Disciplinary action against
the licensee shall be initiated within 60 days of the receipt of the
referral. The licensing authority may initiate disciplinary action
against a licensee upon his or her own investigation, the filing of
a complaint, or a finding that results from a referral from the
Labor Commissioner alleging a violation under this section.
Failure of the employer or employee to provide evidence of
certification or apprentice status shall create a rebuttable
presumption of violation of this section.

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

 

Article begin insert 12. end insert   Taxation

 

begin insert 19355. end insert   

The office and other state agencies may assist state
taxation authorities in the development of uniform policies for the
state taxation of state licensees.

begin insert 19356. end insert   

(a) (1) In addition to any authority otherwise provided
by law, the board of supervisors of a county may impose, by
ordinance, a tax on the privilege of cultivating, dispensing,
producing, processing, preparing, storing, providing, donating,
selling, or distributing cannabis by a licensee operating pursuant
to this chapter. The tax may be imposed for general governmental
purposes or for purposes specified in the ordinance by the board
of supervisors.

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

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

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

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

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

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

(d) For purposes of this section, “cannabis” shall have the same
meanings as the definition set forth in Section 19300.

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

 

Article begin insert 13. end insert   Funding

 

begin insert 19360. end insert   

Each licensing authority shall establish a scale of
application, licensing, and renewal fees, based upon the cost of
enforcing this chapter, as follows:

(a) Each licensing authority shall charge each licensee a
licensure or renewal fee. The licensure or renewal fee shall be
calculated to cover the costs of administering this chapter. The
licensure fee may vary depending upon the varying costs associated
with administering the various regulatory requirements of this
chapter as they relate to the nature and scope of the different
licensure activities, but shall not exceed the reasonable regulatory
costs to the licensing authority.

(b) The total fees assessed pursuant to this chapter, including,
but not limited to, provisional license fees set forth in Section
19330, shall be set at an amount that will fairly and proportionately
generate sufficient total revenue to fully cover the total costs of
administering this chapter.

begin insert 19361. end insert   

(a) The Medical Cannabis Regulation Fund is hereby
established within the State Treasury. Notwithstanding Section
16305.7 of the Government Code, the fund shall include any
interest and dividends earned on the moneys in the fund.

(b) Except as otherwise provided, all moneys collected pursuant
to this chapter as a result of fines or penalties imposed under this
chapter shall be deposited directly into the Medical Cannabis
Fines and Penalties Account, which is hereby established within
the fund, and shall be available, upon appropriation by the
Legislature to the office, for the purposes of funding the
enforcement grant program pursuant to subdivision (c).

(c) (1) The office shall establish a grant program to allocate
moneys from the Medical Cannabis Fines and Penalties Account
to state and local entities for the following purposes:

(A) To assist with medical cannabis regulation and the
enforcement of this chapter and other state and local laws
applicable to cannabis activities.

(B) For allocation to state and local agencies and law
enforcement to remedy the environmental impacts of cannabis
cultivation.

(2) The costs of the grant program under this subdivision shall,
upon appropriation by the Legislature, be paid for with moneys
in the Medical Cannabis Fines and Penalties Account.

(d) Funds for the establishment and support of the regulatory
activities pursuant to this chapter may be advanced as a General
Fund or special fund loan, and shall be repaid by the initial
proceeds from fees collected pursuant to this chapter or any rule
or regulation adopted pursuant to this chapter, by January 1, 2022.

 

Article begin insert 14. end insert   Reporting

 

begin insert 19363. end insert   

On or before March 1 of each year, the director shall
prepare and submit to the Legislature an annual report on the
office’s activities and post the report on the office's Internet Web
site. The report shall include, but not be limited to, the following
information for the previous fiscal year:

(a) The amount of funds allocated and spent by the office and
licensing authorities for medical cannabis licensing, enforcement,
and administration.

(b) The number of state licenses issued, renewed, denied,
suspended, and revoked, by state license category.

(c) The average time for processing state license applications,
by state license category.

(d) The number and type of enforcement activities conducted
by the licensing authorities and by local law enforcement agencies
in conjunction with the licensing authorities or the office.

(e) The number, type, and amount of penalties, fines, and other
disciplinary actions taken by the licensing authorities.

 

Article begin insert 15. end insert   Privacy

 

begin insert 19365. end insert   

(a) Information identifying the names of patients, their
medical conditions, or the names of their primary caregivers
received and contained in records kept by the office or licensing
authorities for the purposes of administering this chapter are
confidential and shall not be disclosed pursuant to the California
Public Records Act (Chapter 3.5 (commencing with Section 6250)
of Division 7 of Title 1 of the Government Code), except as
necessary for authorized employees of the State of California or
any city, county, or city and county to perform official duties
pursuant to this chapter, or a local ordinance.

(b) Nothing in this section precludes the following:

(1) Employees of any of the office or licensing authorities
notifying state or local agencies about information submitted to
the agency that the employee suspects is falsified or fraudulent.

(2) Notifications from any of the office or licensing authorities
to state or local agencies about apparent violations of this chapter
or applicable local ordinance.

(3) Verification of requests by state or local agencies to confirm
licenses and certificates issued by the regulatory authorities or
other state agency.

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

(c) Information shall not be disclosed by any state or local
agency beyond what is necessary to achieve the goals of a specific
investigation, notification, or the parameters of a specific court
order or subpoena.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 11362.775 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

11362.775.  

begin delete Qualified end delete begin insert (a) end insert begin insert   end insert begin insert Subject to subdivision (b), qualified end insert
patients, persons with valid identification cards, and the designated
primary caregivers of qualified patients and persons with
identification cards, who associate within the State of California
in order begin insert to end insert collectively or cooperatively begin delete to end delete cultivate begin delete marijuana end delete
begin insert cannabis end insert for medical purposes, shall not solely on the basis of that
fact be subject to state criminal sanctions under Section 11357,
11358, 11359, 11360, 11366, 11366.5, or 11570.

begin insert

(b) This section shall remain in effect only until 180 days after
the Division of Medical Cannabis Regulation within the State
Board of Equalization posts a notice on its Internet Web site that
the licensing authorities have commenced issuing provisional
licenses pursuant to the Medical Cannabis Regulation and Control
Act (Chapter 3.5 (commencing with Section 19300) of Division 8
of the Business and Professions Code), and as of that date is
repealed.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 147.5 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 147.5. end insert   

(a) By January 1, 2017, the Division of Occupational
Safety and Health shall convene an advisory committee to evaluate
whether there is a need to develop industry-specific regulations
related to the activities of facilities issued a license pursuant to
Chapter 3.5 (commencing with Section 19300) of Division 8 of the
Business and Professions Code.

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

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 3094 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 3094. end insert   

The Division of Apprenticeship Standards shall
investigate, approve, or reject applications for apprenticeship
programs for employees of a licensee subject to Article 11
(commencing with Section 19350) of Chapter 3.5 of Division 8 of
the Business and Professions Code. The Division of Apprenticeship
Standards shall adopt regulations necessary to implement and
regulate the establishment of the apprenticeship programs
described in this section.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 2402.5 is added to the end insert begin insert Vehicle Code end insert begin insert , to read: end insert

begin insert

begin insert 2402.5. end insert   

The Department of the California Highway Patrol
shall establish protocols to determine whether a driver is operating
a vehicle under the influence of cannabis, and shall develop
protocols setting forth best practices to assist law enforcement
agencies. The costs to the Department of the California Highway
Patrol of implementing this subdivision shall, upon appropriation
by the Legislature, be paid for with appropriations from moneys
in the Fines and Penalties Account of the Medical Cannabis
Regulation Fund.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert begin insert

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

end insert

begin insert

begin insert SEC. 12. end insert   

end insert begin insert

The Legislature finds and declares that Section 6 of
this act, which adds Chapter 3.5 (commencing with Section 19300)
to Division 8 of the Business and Professions Code, imposes a
limitation on the public’s right of access to the meetings of public
bodies or the writings of public officials and agencies within the
meaning of Section 3 of Article I of the California Constitution.
Pursuant to that constitutional provision, the Legislature makes
the following findings to demonstrate the interest protected by this
limitation and the need for protecting that interest:

end insert begin insert

It is necessary to maintain the confidentiality of patient and
physician information provided to the regulatory authorities in
order to protect the private medical information of patients who
use medical cannabis and to preserve the essential confidentiality
of the physician and patient relationship.

end insert

begin insert

begin insert SEC. 13. end insert   

end insert begin insert

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

end insert begin insert

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

end insert

All matter omitted in this version of the bill appears in the bill as amended in the Assembly, May 11, 2015. (JR11)