Amended in Senate August 17, 2015

Amended in Senate July 13, 2015

Amended in Senate June 30, 2015

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 Members Bonta, Cooley, Jones-Sawyer, and Lackey

(Coauthor: Assembly Member Chiu)

February 10, 2015

An act to amend begin delete Sections 2220.05, 2242, and 2264 end delete begin insert Section 2220.05 end insert of, to add Article 25 (commencing with Section 2525) to Chapter 5 of Division 2 of, and to add Chapter 3.5 (commencing with Section 19300) to Division 8 of, the Business and Professions Code, begin insert to amend Section 11552 of the Government Code, end insert to amend and repeal Section 11362.775 of the Health and Safety Code, to add Sections 147.5 and 3094 to the Labor Code, and to add Section 2402.5 to the Vehicle Code, relating to medical cannabis.

LEGISLATIVE COUNSEL’S DIGEST

AB 266, as amended, Bonta. Medical cannabis.

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

This bill would enact the Medical Cannabis Regulation and Control Act and would establish within the office of the Governor, the Governor’s Office of Medical Cannabis 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 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 April 1, 2016, to convene a task force to advise the office on the development of standards for the regulation of medical cannabis.

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, by January 1, 2017, to develop an enforcement framework that clarifies the enforcement roles of the state and local governments. 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 and would require the State Board of Equalization to enter into a memorandum of understanding with the City of Los Angeles to establish specified protocols, including tracking medical cannabis to and from the City of Los Angeles. The bill would exempt facilities engaged in commercial cannabis activity within the City of Los Angeles from the licensing requirements and would give the city full power and authority to enforce prescribed standards and regulations.

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.

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.

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.

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

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

(3) Existing law, the Medical Practice Act, provides for the licensure and regulation of physicians and surgeons by the Medical Board of California. Existing law requires the board to prioritize investigations and prosecutions of physicians and surgeons representing the greatest threat of harm, as specified. Existing law identifies the cases that are to be given priority, which include cases of repeated acts of excessively prescribing, furnishing, or administering controlled substances without a good faith prior examination of the patient. Existing law sets forth the conduct that would constitute unprofessional conduct for a physician and surgeon, including, but not limited to, prescribing certain drugs without an appropriate examination or medical indication. Existing law 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.

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

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

This bill, commencing 180 days after the Governor’s Office of Medical Cannabis Regulation posts a notice on its Internet Web site that the licensing authorities have commenced issuing provisional licenses, would repeal those provisions.

begin insert

(5) 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%.

end insert begin insert

This bill would authorize a county to impose a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing medical cannabis or medical cannabis products. 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.

end insert begin delete

(5)

end delete

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

This bill would require the begin insert Department of Motor Vehicles, in consultation with the end insert Department of the California Highway Patrol begin insert , end insert to begin delete 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. end delete begin insert prepare and submit a report that identifies best practices for the identification, detection, and apprehension of drivers operating a vehicle unsafely due to medical cannabis impairment. end insert

begin delete

(6)

end delete

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.

begin delete

(7)

end delete

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

begin delete

(8)

end delete

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.

begin delete

(9)

end delete

begin insert (10) end insert  The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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

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

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

The Legislature finds and declares all of the
following:

(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.

(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).

(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.

(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.

(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.

(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.

(g) To the extent that this act does not conflict with or violate
Section 11362.5 of the Health and Safety Code, 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,
begin delete donation, end delete 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,
begin delete donates, end delete or sells cannabis.

(h) Nothing in this act is intended to interfere with an employer’s
rights and obligations to maintain a drug and alcohol free
workplace or 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 prohibiting the use of cannabis by
employees and prospective employees, or otherwise complying
with state and federal law.

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

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

SEC. 2.  

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

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 delete or
recommending cannabis to patients for medical purposes end delete 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.

begin insert

(4) Repeated acts of clearly excessive recommending of cannabis
to patients for medical purposes, or repeated acts of recommending
cannabis to patients for medical purposes without a good faith
prior examination of the patient and a medical reason for the
recommendation.

end insert begin delete

(4)

end delete

begin insert (5) end insert  Sexual misconduct with one or more patients during a course
of treatment or an examination.

begin delete

(5)

end delete

begin insert (6) end insert  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 delete

SEC. 3.  

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

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. Recommending medical cannabis to a patient for a
medical purpose without an appropriate prior examination and a
medical indication constitutes unprofessional conduct.

(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.

SEC. 4.  

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

2264.  

(a) 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.

(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 delete

begin delete SEC. 5. end delete
begin insert SEC. 3. end insert   

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

 

Article 25.  Recommending Medical Cannabis

 

2525.  

(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 state 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.

2525.1.  

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.

2525.2.  

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.

begin insert

begin insert 2525.3. end insert   

Recommending medical cannabis to a patient for a
medical purpose without an appropriate prior examination and a
medical indication constitutes unprofessional conduct.

end insert begin insert

begin insert 2525.4. end insert   

Employment by, or other agreement with, a licensee
acting pursuant to the Medical Cannabis Regulation and Control
Act (Chapter 3.5 (commencing with Section 19300) of Division 8)
or a dispensary to provide recommendation for medical cannabis
constitutes unprofessional conduct.

end insert

begin delete SEC. 6. end delete
begin insert SEC. 4. end insert   

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

 

Chapter  3.5. Medical Cannabis

 

Article 1.  Definitions

 

19300.  

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

begin insert

(a) “Accrediting body” means a nonprofit impartial
organization that requires conformance to ISO/IEC 17025
requirements and is a signatory to the International Laboratory
Accreditation Cooperation Mutual Recognition Arrangement for
Testing.

end insert begin insert

(b) “Act” means this chapter.

end insert begin insert

(c) “Batch” means a specific quantity of medical cannabis or
medical cannabis products that is intended to have uniform
character and quality, within specified limits, and is produced
according to a single manufacturing order during the same cycle
of manufacture.

end insert begin delete

(a)

end delete

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

begin delete

(b)

end delete

begin insert (e) end insert  “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 the
separated resin, whether crude or purified, obtained from marijuana.
Without limiting the definition, “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.

begin delete

(c)

end delete

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

begin delete

(d)

end delete

begin insert (g) end insert  “Caregiver” or “primary caregiver” has the same meaning
as that term is defined in Section 11362.7 of the Health and Safety
Code.

begin delete

(e) “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.

end delete begin insert

(h) “Certificate of accreditation” means a certificate issued by
an accrediting body for a licensed testing laboratory, entity, or
site to be registered in the state.

end insert begin delete

(f)

end delete

begin insert (i) end insert  “Commercial cannabis activity” means begin delete any end delete cultivation,
possession, manufacture, processing, storing, laboratory testing,
labeling, transporting, distribution, or sale of begin insert medical end insert cannabis or
begin insert a medical end insert cannabis product, begin delete or any technology platform that
enables qualified patients or primary caregivers to arrange for or
facilitate any of the above-described functions with a third party, end delete
except as set forth in Section 19316.

begin delete

(g)

end delete

begin insert (j) end insert  “Cultivation” means any activity involving the planting,
growing, harvesting, drying, begin delete processing, end delete begin insert curing, grading, end insert or
trimming of cannabis.

begin delete

(h)

end delete

begin insert (k) end insert  “Delivery” means the commercial transfer of medical
cannabis or medical cannabis products from a dispensary begin insert , up to
an amount determined by the State Board of Equalization, end insert to a
primary caregiver or qualified patient, as defined in Section
11362.7 of the Health and Safety Code begin insert , a testing laboratory, or
to an event or location where it will be used solely for promotional
purposes. Delivery also includes the use by a dispensary of a third
party or any technology platform that enables qualified patients
or primary caregivers to arrange for or facilitate the commercial
transfer of medical cannabis or medical cannabis products end insert .

begin delete

(i) “Delivery service” means a person issued a state license by
the State Board of Equalization 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.

end delete begin delete

(j)

end delete

begin insert (l) end insert  “Director” means the director of the Office of Medical
Cannabis Regulation.

begin delete

(k)

end delete

begin insert (m) end insert  “Dispensary” means a physical retail establishment
operating from a fixed location, including mobile deliveries that
are expressly authorized by local ordinance originating from the
location, that makes retail sales of medical cannabis or medical
cannabis products.

begin delete

(l)

end delete

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

begin delete

(m)

end delete

begin insert (o) end insert  “Distribution” means the begin delete first end delete begin insert procurement, end insert sale begin insert , and
transport end insert of begin insert medical end insert cannabis begin delete in this state. Distribution does not
include the sale of cannabis from a cultivator to a distributor. end delete begin insert and
medical cannabis products purchased and sold between licensed
entities. end insert

begin delete

(n)

end delete

begin insert (p) end insert  “Distributor” means a person who is engaged in the business
of purchasing medical cannabis begin delete in this state end delete from a licensed
cultivator begin delete and who then distributes the medical cannabis to a
manufacturer or dispensary. end delete begin insert or medical cannabis products from a
licensed manufacturer end insert begin insert in order to distribute to other licensees. end insert

begin delete

(o)

end delete

begin insert (q) end insert  “Dried flower” means all dead medical cannabis that has
been harvested, dried, cured, or otherwise processed, excluding
leaves and stems.

begin delete

(p)

end delete

begin insert (r) end insert  “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.

begin delete

(q)

end delete

begin insert (s) end insert  “Fund” means the Medical Cannabis Regulation Fund
established pursuant to Section 19361.

begin delete

(r)

end delete

begin insert (t) end insert  “Identification program” means the universal identification
certificate program for licensees.

begin insert

(u) “Immature plant” means a nonflowering live plant that is
no taller than eight inches and no wider than eight inches.

end insert begin delete

(s)

end delete

begin insert (v) end insert  “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.

begin delete

(t)

end delete

begin insert (w) end insert  “Licensed cultivation site” means a begin delete person that plants,
grows, cultivates, harvests, dries, or processes end delete begin insert facility where end insert
medical begin delete cannabis, end delete begin insert cannabis is planted, grown, cultivated,
harvested, dried, cured, graded, end insert begin insert or trimmed, end insert 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.

begin delete

(u)

end delete

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

begin delete

(v)

end delete

begin insert (y) end insert  “Licensed manufacturer” means a person that conducts the
production, preparation, propagation, begin delete compounding, or processing end delete
begin insert or compounding end insert of medical cannabis or medical cannabis products,
either directly or indirectly or by extraction begin delete processes, end delete begin insert methods, end insert
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 begin delete labeling or relabeling of end delete begin insert labels or relabels end insert
its container, and that has been issued both a local license or permit
and a state license pursuant to this chapter.

begin insert

(z) “Licensed testing laboratory” means a facility, entity, or
site in the state that offers or performs tests of medical cannabis
or medical cannabis products, and that is both of the following:

end insert begin insert

(1) Accredited as operating to ISO standard 17025 by an
accrediting body that is independent from all other persons
involved in the medical cannabis industry in the state.

end insert begin insert

(2) Registered with the State Department of Public Health.

end insert begin delete

(w)

end delete

begin insert (aa) end insert  “Licensed transporter” means a person issued a state license
by the begin insert State end insert Board of Equalization to transport medical cannabis
or medical cannabis products begin delete above a limit end delete begin insert in an amount above a
threshold end insert determined by the begin delete board end delete begin insert State Board of Equalization end insert
between facilities that have been issued a state license or to
dispensing facilities in the City of Los Angeles pursuant to this
chapter.

begin delete

(x)

end delete

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

begin delete

(y)

end delete

begin insert (ac) end insert  “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 Division of Medical Cannabis Regulation
within 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.

begin delete

(z)

end delete

begin insert (ad) end insert  “Live plants” means living medical cannabis flowers and
plants, including seeds, immature plants, and vegetative stage
plants.

begin insert

(ae) “Lot” means a batch, or a specifically identified portion
of a batch, having uniform character and quality within specified
limits. In the case of medical cannabis or a medical cannabis
product produced by a continuous process, “lot” means a
specifically identified amount produced in a unit of time or a
quantity in a manner that ensures its having uniform character
and quality within specified limits.

end insert begin delete

(aa)

end delete

begin insert (af) end insert  “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.

begin delete

(ab)

end delete

begin insert (ag) end insert  “Manufacturing site” means a location that produces,
prepares, propagates, begin delete compounds, or processes end delete begin insert or compounds end insert
medical cannabis or medical cannabis products, directly or
indirectly, by extraction begin delete processes, end delete begin insert methods, end insert independently by
means of chemical synthesis, or by a combination of extraction
and chemical synthesis, and is owned and operated by a licensee
for these begin delete activities pursuant to this chapter. end delete begin insert activities. end insert

begin delete

(ac)

end delete

begin insert (ah) end insert  “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).

begin delete

(ad)

end delete

begin insert (ai) end insert  “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.

begin delete

(ae)

end delete

begin insert (aj) end insert  “Office” means the Governor’s Office of Medical Cannabis
Regulation.

begin delete

(af)

end delete

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

begin delete

(ag)

end delete

begin insert (al) end insert  “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.

begin insert

(am) “Pesticide” has the same meaning as defined in Section
12753 of the Food and Agricultural Code.

end insert begin delete

(ah)

end delete

begin insert (an) end insert  “State license ” or “license” means a state license issued
pursuant to this chapter.

begin delete

(ai)

end delete

begin insert (ao) end insert  “Topical cannabis” means a product intended for external
use.

begin delete

(aj)

end delete

begin insert (ap) end insert  “Transport” means the transfer of medical cannabis or
medical cannabis products from the permitted business location
of one licensee to the permitted business location of another
licensee, or to dispensing facilities in the City of Los Angeles, for
the purposes of conducting commercial cannabis activity authorized
begin delete by licensees end delete pursuant to this chapter.

 

Article 2.  Administration

 

19301.  

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

19302.  

(a) There is hereby created within the office of the
Governor, the Governor’s Office of Medical Cannabis Regulation,
under the supervision and control of the Director of the Office of
Medical Cannabis Regulation, who shall be appointed by the
Governor, subject to Senate confirmation. begin delete 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. end delete begin insert The director
shall receive the salary provided for by Chapter 6 (commencing
with Section 11550) of Part 1 of Division 3 of Title 2 of the
Government Code. end insert

(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.

begin insert

(d) On or before January 1, 2017, the office shall, in
consultation with local governments, develop an enforcement
framework that clarifies the enforcement roles of the state and
local governments consistent with this chapter.

end insert begin delete

(d)

end delete

begin insert (e) end insert  The office shall have overall executive authority and
responsibility for implementation of all aspects of begin insert medical end insert cannabis
regulation pursuant to this chapter.

begin delete

(e)

end delete

begin insert (f) end insert  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.
begin delete 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. end delete

19303.  

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.

19304.  

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

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

(1) Be administered by a person who is hired by the State Board
of Equalization, and who 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).

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

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

(1) Be administered by a person who is appointed by the State
Department of Public Health, and who 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).

(2) Administer this chapter, as it pertains to manufacturing,
testing, and begin delete certification end delete begin insert licensing end insert of testing laboratories for
medical cannabis and medical cannabis products.

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

(1) Be administered by a person who is appointed by the
Department of Food and Agriculture, and who 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).

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

(d) 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:

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

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

(3) The Department of Pesticide Regulation shall promulgate
regulations consistent with Division 6 (commencing with Section
11401) of the Food and Agricultural Code.

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

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

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

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

19305.  

(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, begin delete or end delete begin insert conflict, or promulgation of end insert inconsistent
regulations occur between licensing authorities. begin insert The office may
require the licensing authorities to resubmit regulations to the
Office of Administrative Law, as it deems necessary. end insert

(2) Prescribing, adopting, and enforcing emergency regulations
as necessary to implement this chapter. Emergency regulations
prescribed, adopted, or enforced pursuant to this section shall be
adopted in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
For purposes of that chapter, including Section 11349.6 of the
Government Code, the adoption of the regulation is an emergency
and shall be considered by the Office of Administrative Law as
necessary for the immediate preservation of the public peace, health
and safety, and general welfare.

(3) Issuing state licenses to persons for the cultivation,
distribution, manufacture, transportation, and retail sale of medical
cannabis begin insert and medical cannabis products end insert within the state.

(4)  begin delete Setting application, licensing, end delete begin insert Establishing procedures and
associated fees for the application for issuance of end insert and renewal
begin delete fees for end delete begin insert of end insert state begin delete licenses issued pursuant to this chapter. end delete begin insert licenses. end insert

(5) Establishing standards for commercial cannabis activity.

(6) Establishing procedures for the begin delete issuance, renewal, end delete
suspension, denial, and revocation of state licenses.

(7) Imposing a penalty authorized by this chapter or begin delete any end delete begin insert a end insert rule
or regulation adopted pursuant to this chapter.

(8)  begin delete Taking action with respect to end delete begin insert Approval or denial of end insert an
application for a state license in accordance with procedures
established pursuant to this chapter.

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

(10) 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’s health and safety 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’s
health and safety is inconsistent with other interests sought to be
promoted, the protection of the public’s health and safety shall be
paramount.

19306.  

(a) The office, by April 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 begin delete submitted to the Legislature end delete shall be submitted in compliance
with Section 9795 of the Government Code.

(b) The task force shall be comprised of begin delete 15 end delete begin insert 21 end insert members, each
of whom shall be appointed to a two-year term, as follows:

(1)  begin delete Four end delete begin insert Five end insert members to be appointed by the Governor, as
follows:

(A) A member representing counties.

(B) A member representing cities.

(C) A member representing local law enforcement.

(D) A member representing state law enforcement.

begin insert

(E) A member representing medical cannabis distributors.

end insert

(2)  begin delete Three end delete begin insert Five end insert members to be appointed by the Speaker of the
Assembly, as follows:

(A) A member representing labor.

(B) A member representing begin delete the end delete medical cannabis begin delete industry. end delete
begin insert product manufacturers. end insert

(C) A member with public health expertise.

begin insert

(D) A member with environmental expertise.

end insert begin insert

(E) A member representing medical cannabis testing
laboratories.

end insert

(3)  begin delete Three end delete begin insert Five end insert members to be appointed by the Senate
Committee on Rules, as follows:

(A) A member representing qualified medical cannabis patients
and caregivers.

begin delete

(B) A member with environmental expertise.

end delete begin delete

(C)

end delete

begin insert (B) end insert  A member representing physicians. This member shall have
a minimum of two years experience recommending medical
cannabis to qualified patients.

begin insert

(C) A member representing medical cannabis cultivators.

end insert begin insert

(D) A member representing medical cannabis dispensaries.

end insert begin insert

(E) A member representing an entity focused on the protection
of minors.

end insert

(4) The director or chief of each of the following state agencies,
or his or her designee:

(A) The Department of Food and Agriculture.

(B) State Department of Public Health.

(C) State Board of Equalization.

(D) Department of Justice.

(E) Department of the California Highway Patrol.

begin insert

(F) The California Environmental Protection Agency.

end insert

(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.

(d) Each member shall only have one vote in determinations of
the task force.

begin insert

(e) The office shall not be responsible for any costs associated
with the task force.

end insert

19306.5.  

(a) The task force established in Section 19306 shall
work with representatives of medical cannabis patient groups and
physicians and shall, on or before July 1, 2016, establish best
practices and guidelines to ensure qualified patients have adequate
access to medical cannabis and medical cannabis products. These
best practices and guidelines shall be sent in a report to the
Legislature and to all local authorities that have implemented local
ordinances that ban exempt individuals of this chapter from
engaging in cultivation or possession of medical cannabis or
medical cannabis products within their jurisdictions.

(b) The report shall be submitted in compliance with Section
9795 of the Government Code.

(c) This section shall remain in effect only until January 1, 2017,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2017, deletes or extends that date.

 

Article 3.  Enforcement and Local Control

 

19307.  

(a) Each licensing authority shall work in conjunction
with local 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) Peace officers begin insert , as defined in Chapter 4.5 (commencing with
Section 830) of Title 3 of Part 2 of the Penal Code, end insert may, in
enforcing this chapter, visit and inspect the premises of a licensee
pursuant to subdivision (f) of Section 19326.

begin delete

(c) 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
pursuant to subdivision (f) of Section 19326.

end delete

19308.  

(a)  begin delete By January 1, 2017, the office shall, in consultation
with local governments, develop an enforcement framework that
clarifies the enforcement roles of the state and local governments
consistent with this chapter. end delete Local agencies begin delete are authorized to end delete begin insert may end insert
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.

19309.  

(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 begin delete rules, regulations, and
standards end delete begin insert regulations end insert promulgated by the office begin insert or any licensing
authority end insert . Notwithstanding Sections 101375, 101400, and 101405
of the Health and Safety Code or any contract entered into pursuant
thereto, or any other law, 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, including a county
health officer, 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 begin delete rules, regulations, and standards end delete
begin insert regulations end insert promulgated by the office begin insert or any licensing authority end insert .

(c) State agencies shall collaborate with local agencies to enforce
state standards and regulations to the extent that it is within the
scope of other statutory responsibilities of local agencies and to
the extent that resources for this enforcement are available and
appropriated by the local governing body to the local agencies.

(d) Pursuant to Section 7 of Article XI of the California
Constitution, a city, county, or city and county may adopt
ordinances that establish additional standards, requirements, and
regulations for local licenses and permits for commercial cannabis
activity. For all conflicts between the state and local standards,
requirements, and regulations regarding health and safety, testing,
security, and worker protections, the state shall preempt local
ordinances.

(e) 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.

19310.  

(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 state or local
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 19315
of this code or Section 11362.83 of the Health and Safety Code.

(e) The office shall establish begin insert and oversee end insert procedures to provide
begin delete any end delete relevant state and local agencies, including all licensing
authorities, 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. begin delete This record shall
allow end delete begin insert These procedures shall include, but not be limited to, the
authorization of end insert state and local law enforcement, agencies, and
licensing entities 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.

19312.  

(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
provides potential limited immunity to medical cannabis businesses
as defined by Measure D consistent with the terms of the measure
and local ordinances. Notwithstanding the provisions of this part,
cannabis businesses within the City of Los Angeles shall continue
to be subject to Measure D and any and all other applicable
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. In
light of these unique circumstances, the provisions of Sections
begin delete 19319 and 19338 end delete begin insert 19318.5 and 19337.1 end insert shall apply in the City of
Los Angeles.

(c) The State Board of Equalization shall enter into a
memorandum of understanding with begin insert the appropriate department
or departments of end insert the City of Los Angeles to establish protocols
for the following:

(1) Tracking begin delete businesses granted immunity pursuant to Measure
D, as approved by the voters of the City of Los Angeles at the May
21, 2013, general election. end delete begin insert entities with a business tax registration
certificate of class L050, medical marijuana collective, or its
successor classification. end insert

(2) Tracking medical cannabis and medical cannabis products
to and from the City of Los Angeles.

(3) Allowing for the legal transfer of medical cannabis and
medical cannabis products from outside the jurisdiction of the City
of Los Angeles to within the city by licensees conducting
commercial cannabis activities outside of the city.

19313.  

(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 begin insert local end insert license or permit begin delete issued
by the local jurisdiction end delete 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.

begin delete

(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.

end delete

19314.  

(a) A person engaging in commercial cannabis activity
without a license required by 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. A day
of operation is defined to mean any period of time within a 24-hour
period. This section shall not apply to unlicensed facilities in the
City of Los Angeles.

(b) If an action for civil penalties is brought begin insert against a licensee
pursuant to this chapter end insert 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 begin insert or city and county end insert in which the judgment was
entered. begin insert If the action is brought by a city attorney and is
adjudicated in a superior court located in the unincorporated area
or another city in the same county, the penalty shall be paid
one-half to the treasurer of the city in which the complaining
attorney has jurisdiction and one-half to the treasurer of the county end insert
begin insert in which the judgment is entered. end insert

(c) Notwithstanding subdivision (a), criminal penalties shall
continue to apply to an unlicensed person or entity engaging in
commercial cannabis activity in violation of this chapter, including,
but not limited to, those individuals covered under Section 11362.7
of the Health and Safety Code.

19315.  

(a) To the extent that this chapter does not interfere
with or violate Section 11362.5 of the Health and Safety Code,
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, whether consistent or 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 begin insert or medical cannabis products end insert .

(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 for the operation within its jurisdiction of
any of the following:

(A) A licensee.

(B) Another person that cultivates, processes, possesses, stores,
manufactures, tests, transports, distributes, or sells medical
cannabis or medical cannabis products.

(C) A person exempt from licensure pursuant to this chapter.

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

(b) To the extent that this chapter does not interfere with or
violate Section 11362.5 of the Health and Safety Code, 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 4.  Licensure

 

19316.  

(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 qualified 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) To the extent that this chapter does not interfere with or
violate Section 11362.5 of the Health and Safety Code, 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.

19317.  

To the extent that this chapter does not interfere with
or violate Section 11362.5 of the Health and Safety Code, 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
regulate commercial cannabis activity within their jurisdiction,
including granting or refusing to grant permits 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.

19318.  

(a) Licensing authorities may issue state licenses only
to qualified applicants engaging in commercial cannabis activity
pursuant to this chapter. Except as specified in Section 19318.5,
begin delete beginning January 1, 2018, end delete begin insert upon the date of implementation of
regulations by the licensing authorities, end insert no person shall engage in
commercial cannabis activity without possessing both a state
license and a local permit, license, or other authorization. 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) Each applicant for a state license shall provide notice to
every affected local jurisdiction at the same time the state
application is filed. The office shall confirm with the applicant a
list of begin delete each end delete affected local jurisdictions, including those jurisdictions
affected by potential deliveries by the applicant.

(d) 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.

(e) 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.

(f) 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
schedule a hearing begin insert within 20 days, pursuant to Section 19323, end insert to
determine whether the evidence is sufficient to constitute grounds
for the revocation of the begin delete license within 20 working days pursuant
to Section 19323. end delete begin insert license. end insert

(g) Revocation of a state license or local license or permit shall
terminate the ability of a medical cannabis business to operate
within California until the licensing authority or local jurisdiction
reinstates or reissues the state license or local license or permit.

19318.5.  

(a) A licensing authority shall not issue a begin insert state end insert license
to an applicant who proposes to operate within the City of Los
Angeles, regardless of the activity for which the license is sought.

(b) A medical cannabis business, as defined by Measure D,
within the City of Los Angeles shall comply with all standards
and regulations applicable to the commercial cannabis activity or
activities engaged in by that medical cannabis business with respect
to all of the following:

(1) Standards begin insert , to be defined by the Division of Medical Cannabis
Manufacturing and Testing, end insert for the production, labeling, and
manufacture of medical cannabis and medical cannabis products,
in accordance with Article 7 (commencing with Section 19332)
and Article 10 (commencing with Section 19342).

(2) Standards regarding the application of pesticides, in
accordance with Article 7 (commencing with Section 19332).

(3) Regulations to be promulgated by the State Board of
Equalization, in accordance with Article 8 (commencing with
Section 19334), governing dispensing facilities and transporters
to the extent that those regulations relate to health and safety
standards, environmental standards, worker protections, or security
requirements.

(4) Security measures regarding transported medical begin delete cannabis, end delete
begin insert cannabis or medical cannabis products, end insert in accordance with Section
19337.

(5) Standards to be promulgated by the Division of Medical
Cannabis Manufacturing and Testing regarding health and safety,
in accordance with Article 10 (commencing with Section 19342).

(c) The City of Los Angeles shall have the full power, authority,
and discretion to enforce all standards and regulations required by
this section.

19319.  

(a) A licensing authority shall promulgate regulations
for implementation begin delete and end delete begin insert of its respective responsibilities in the end insert
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 begin insert and establishing related fines and
penalties to be assessed against licensees for violation of this
chapter end insert .

(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. All fees
shall be established on a scaled basis, depending on the size or tier
of the license.

(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 begin insert to prevent diversion of
product to nonmedical use, end insert and for the screening of employees.
All screening processes shall adhere to guidance and best practices
established by the United States Equal Employment Opportunity
Commission, including, but not limited to, those on hiring practices
relating to the consideration of arrest and conviction records in
employment decisions under Title VII of the Civil Rights Act of
1964. begin insert Employers shall not ask applicants about arrests or
convictions on job applications and, if and when employers make
those inquiries, the inquiries shall be limited to convictions for
which exclusion would be job related for the position in question
and consistent with business necessity or for the purposes of
compliance with the federal Commercial Motor Vehicle Safety Act
of 1986 (49 U.S.C. 2701 et seq.). end insert

(8) Requirements to ensure that all licensees and begin delete certified end delete
begin insert licensed end insert 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.

(9) Develop procedures to ensure each licensee holds and
maintains a seller’s permit required pursuant to Part 1 (commencing
with Section 6001) of Division 2 of the Revenue and Taxation
Code.

begin insert

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

end insert begin insert

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

end insert begin insert

(12) Establish procedures for the suspension, revocation, or
surrender of a state license.

end insert begin delete

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

end delete begin delete

(c)

end delete

begin insert (b) end insert  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.

begin delete

(d)

end delete

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

begin delete

(e)

end delete

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

begin delete

(f)

end delete

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

begin delete

(g) 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:

end delete begin delete

(1) Establish procedures for approval, renewal, 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.

end delete begin delete

(2) Establish applicant qualifications.

end delete begin delete

(3) Establish state licensee employee qualifications, including,
but not limited to, training and screening requirements. All
screening processes shall adhere to guidance and best practices
established by the United States Equal Employment Opportunity
Commission, including, but not limited to, those relating to hiring
practices on the consideration of arrest and conviction records in
employment decisions under Title VII of the Civil Rights Act of
1964.

end delete begin delete

(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.

end delete begin delete

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

end delete begin delete

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

end delete begin delete

(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.

end delete

19320.  

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

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

(5) 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 begin delete cannabis, end delete
begin insert cannabis and medical cannabis products, end insert personnel policies, and
recordkeeping procedures. All screening processes shall adhere to
guidance and best practices established by the United States Equal
Employment Opportunity Commission, including, but not limited
to, those relating to hiring practices on the consideration of arrest
and conviction records in employment decisions under Title VII
of the Civil Rights Act of 1964.

(6) 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.

(7) Provide documentation issued by the local jurisdiction in
which the proposed business is operating or will operate certifying
that the applicant is or will be in compliance with all local
ordinances and regulations.

(8) Provide evidence of the legal right to occupy and use an
established location.

(9) If the proposed facility is a cultivator or a dispensary, provide
evidence that the proposed facility is located beyond at least a 600
foot radius from a school, as required by Section 11362.768 of the
Health and Safety Code.

(10) Provide a statement, signed by the applicant under penalty
of perjury, that the information provided is begin delete true. end delete begin insert complete, true,
and accurate. end insert

(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.

(D) Provide the applicant’s seller’s permit number issued
pursuant to Part 1 (commencing with Section 6001) of Division 2
of the Revenue and Taxation Code, or indicate that the applicant
is currently applying for a seller’s permit.

(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 cultivator, distributor, or
dispensary license, provide a notarized statement from the owner
of real property or their agent where the cultivation, distribution,
manufacturing, or dispensing commercial medical cannabis
activities will occur, as proof to demonstrate the landowner has
acknowledged and consented to permit cultivation, distribution,
or dispensary activities to be conducted on the property by the
tenant applicant.

begin insert

(15) For an applicant seeking licensure as a testing laboratory,
register with the State Department of Public Health by submitting
all of the following:

end insert begin insert

(A) A completed independent laboratory registration form, as
established by the State Department of Public Health.

end insert begin insert

(B) A copy of the certificate of accreditation accompanied by
the scope of accreditation.

end insert begin insert

(C) The name, address, date of birth, and social security number
of each licensed testing laboratory employee and a copy of the
application form completed by each licensed testing laboratory
employee.

end insert

(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, distribute,
or 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.

19321.  

(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 begin insert relevant end insert matters begin delete connected therewith end delete 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 paragraphs (6), (15), and (18) of subdivision (d) shall not be
waived.

(d)  begin delete Each end delete begin insert A end insert 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.

begin delete

(2) Conduct that constitutes fraud.

end delete begin delete

(3) Conduct constituting gross negligence.

end delete begin insert

(2) Conduct involving dishonesty, fraud, deceit, or gross
negligence with the intent to substantially benefit himself, herself,
or another, or to substantially injure another.

end insert begin delete

(4)

end delete

begin insert (3) end insert  Failure to comply with the provisions of this chapter or any
rule or regulation adopted pursuant to this chapter.

begin delete

(5)

end delete

begin insert (4) end insert  Conduct that constitutes grounds for denial of licensure
pursuant to Chapter 2 (commencing with Section 480) of Division
1.5.

begin delete

(6)

end delete

begin insert (5) end insert  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 begin delete medical end delete
begin insert commercial end insert cannabis activities.

begin delete

(7)

end delete

begin insert (6) end insert  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 may submit to the office
documentation detailing their renewal requirements. Failure to
submit an ordinance or resolution to the office shall not impair the
enforceability of the ordinance or resolution. Ordinances or
resolutions that are not submitted pursuant to this subdivision shall
not be considered in denial of licensure pursuant to this chapter.

begin delete

(8)

end delete

begin insert (7) end insert  Granting or continuation of a state license would be contrary
to the public’s safety.

begin delete

(9)

end delete

begin insert (8) end insert  The applicant holding or seeking a state license has been
convicted of a misdemeanor involving moral turpitude, excluding
misdemeanors involving begin delete marijuana. end delete begin insert possession of a controlled
substance. end insert

begin delete

(10)

end delete

begin insert (9) end insert  The application has failed to state with sufficient specificity
the jurisdiction and location at which the applicant proposes to
establish operations.

begin delete

(11)

end delete

begin insert (10) end insert  The applicant, or any of its officers, directors, or owners,
is under 21 years of age.

begin delete

(12)

end delete

begin insert (11) end insert  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.

begin delete

(13)

end delete

begin insert (12) end insert  The applicant has failed to provide information requested.

begin delete

(14) The applicant, or any of its officers, directors, or owners,
has been convicted of a felony criminal conviction for the
possession for sale, sale, manufacture, transportation, or cultivation
of a controlled substance, including a narcotic drug classified in
Schedule II, III, IV, or V, but excluding marijuana, 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. It is the intent of the Legislature to further determine
the suitability of applicants for licensure with prior felonies specific
to cannabis.

end delete begin insert

(13) Unless otherwise provided by this paragraph, the applicant
or any of its officers, directors, or owners, has been convicted of
a crime or act that is substantially related to the qualifications,
functions, or duties of the business or profession for which the
application is made. For purposes of this section, a conviction
means a plea or verdict of guilty or a conviction following a plea
of nolo contendere. An action that a licensing authority is permitted
to take following the establishment of a conviction, including, but
not limited to, the issuance, renewal, suspension, and revocation
of a license for commercial cannabis activity pursuant to this
chapter, shall be held in abeyance until after the time for appeal
has elapsed, or the judgment of conviction has been affirmed on
appeal. Action may be taken when an order granting probation is
made suspending the imposition of sentence, irrespective of a
subsequent order under the provisions of Section 1203.4, 1203.4a,
or 1203.41 of the Penal Code.

end insert begin insert

(A) An applicant shall not be denied a state license if the denial
is solely based on any of the following:

end insert begin insert

(i) The applicant has been convicted of transporting a controlled
substance pursuant to Section 11352 or 11379 of the Health and
Safety Code prior to January 1, 2014, and the facts underlying the
conviction establish that the applicant did not transport the
controlled substance with the intent to sell or the intent to aid and
abet the commission of, or conspiracy to commit, a crime of
transportation of the controlled substance.

end insert begin insert

(ii) The applicant has been convicted of a felony that would not
be subject to criminal prosecution pursuant to Section 11362.5 or
11362.775 of the Health and Safety Code.

end insert begin insert

(iii) The applicant had a conviction that was subsequently
dismissed under the provisions of Section 1203.4, 1203.4a, or
1203.41 of the Penal Code.

end insert begin insert

(B) An applicant shall not be denied a state license under either
of the following conditions:

end insert begin insert

(i) The applicant has obtained a certificate of rehabilitation
pursuant to Chapter 3.5 (commencing with Section 4852.01) of
Title 6 of Part 3 of the Penal Code, for a crime or act that is
substantially related to the qualifications, functions, or duties of
the business or profession for which the application is made.

end insert begin insert

(ii) The applicant has been convicted of a misdemeanor, and
he or she has met all of the applicable requirements of the criteria
for rehabilitation developed by the licensing authority to evaluate
the rehabilitation of a person when considering the denial of
license.

end insert begin insert

(C) If the applicant has been convicted for a crime or act that
is substantially related to the qualifications, functions, or duties
of the business or profession for which the application is made,
the licensing authority shall conduct a thorough investigation of
the nature of the crime, conviction, circumstances, and evidence
of rehabilitation of the applicant, and evaluate the suitability of
the applicant to be issued a state license based on the evidence
found through the investigation. In the evaluation, public protection
shall take priority over rehabilitation and, where evidence of
rehabilitation and public protection are in conflict, public
protection shall take precedence.

end insert begin delete

(15)

end delete

begin insert (14) end insert  The applicant, or any of its officers, directors, or owners,
is a licensed physician making patient recommendations for
medical cannabis.

begin insert

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

end insert begin delete

(16)

end delete

begin insert (16) end insert  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 begin delete medical end delete
cannabis activities or has had a license revoked under this chapter
in the previous three years.

begin delete

(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.

end delete begin delete

(18)

end delete

begin insert (17) end insert  The proposed commercial begin delete medical end delete cannabis activity will
violate any applicable local law or ordinance.

begin delete

(19)

end delete

begin insert (18) end insert  The applicant has had 20 employees or more in the past
year and failed to enter into a labor peace agreement.

begin delete

(20)

end delete

begin insert (19) end insert   The applicant or the owner is unable to establish that he
or she has been a resident of the state for not less than three years.

begin delete

(21)

end delete

begin insert (20) end insert  Failure to obtain and maintain a valid seller’s permit
begin delete requires end delete begin insert required end insert pursuant to Part 1 (commencing with Section
6001) of the Revenue and Taxation Code.

begin insert

(21) There are pending state or local administrative actions,
judicial proceedings, or other actions initiated against the
applicant, 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
commercial cannabis activity, or that knowingly provides false or
fraudulent information on an application for licensure.

end insert

(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.

19322.  

(a) A licensing authority may refuse to issue, reinstate,
or renew a state license, or may suspend a state license for failure
of a licensee to resolve all outstanding final liabilities, including,
but not limited to, taxes, additions to tax, penalties, interest, and
fees that have been assessed by the State Board of Equalization.

(1) Until the final liabilities covered by this section are satisfied,
a person named on a state license that has been suspended pursuant
to this section shall be prohibited from serving in any capacity that
is subject to licensure pursuant to this chapter, but may act as a
nonsupervising employee.

(2) All state licenses issued with the same personnel of record
that have been assessed an outstanding liability covered by this
section shall be suspended until the debt has been satisfied or until
the indebted personnel of record disassociate themselves from the
licensee.

(b) The refusal to issue a state license or the suspension of a
state license as provided by this section shall occur only if the
licensing authority has mailed a notice, prior to the refusal or
suspension, that indicates that the state license will be refused or
suspended by a date certain. This preliminary notice shall be mailed
to the licensee at least 60 days before the date certain.

(c) This section shall not apply to any outstanding final liability
if the licensee has entered into an installment payment agreement
for that liability with the State Board of Equalization and is in
compliance with the terms of that agreement.

19323.  

(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.

19324.  

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’s health and safety.

 

Article 5.  Regulation of Medical Cannabis

 

19325.  

(a) Except as provided in Section 11362.5 of the Health
and Safety Code and Section 19316, a person shall not sell,
distribute, provide, or donate medical cannabis or medical cannabis
products 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 and Section 19316, a person shall
not cultivate 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 and Section 19316, a person other
than a licensed manufacturer shall not manufacture begin delete or process
medical cannabis or end delete medical cannabis products.

(d) A person other than a licensed transporter shall not transport
medical cannabis begin insert or medical cannabis products end insert from one facility
issued a state license to another, unless otherwise specified in this
chapter.

(e) All licensees holding cultivation or manufacturing licenses
shall send all medical cannabis and medical cannabis products
cultivated or manufactured to a begin delete licensed processor for processing
and testing prior to retail or sale of medical cannabis or medical
cannabis products or to a dispensary, qualified patient, or caregiver,
according to the allowances by their license. end delete begin insert Type 11 licensee for
quality assurance and inspection by the Type 11 licensee and for
a batch testing by a Type 8 licensee prior to distribution to a
dispensary. end insert Those licensees holding a Type 10A license in addition
to a cultivation license begin insert or a manufacturing license end insert shall send all
medical cannabis begin insert and medical cannabis products end insert to a begin delete licensed
processor end delete begin insert Type 11 licensee for presale inspection and for a batch
testing by a Type 8 licensee end insert prior to dispensing any product.
begin delete Medical cannabis and medical cannabis products shall not be
returned to a cultivation or manufacturing licensee unless that
licensee is also a licensed dispensary. end delete The licensing authority shall
fine a licensee who violates this subdivision in an amount
determined by the licensing authority to be reasonable.

(f) (1) Upon receipt of medical cannabis or medical cannabis
products by a holder of a cultivation or manufacturing license, the
Type 11 licensee shall first inspect the product to ensure the
identity and quantity of the product and then begin delete send end delete begin insert ensure a random
sample of end insert the medical cannabis or medical cannabis product begin delete to be end delete
begin insert is end insert tested by a Type 8 licensee begin insert prior to distributing the batch of
medical cannabis or medical cannabis products end insert .

(2) Upon begin delete certification end delete begin insert issuance of a certificate of analysis end insert by
the Type 8 licensee that the product is fit for manufacturing or
retail, all medical cannabis and medical cannabis products shall
begin delete be processed by a certified processor prior to retail or dispensing
to end delete begin insert undergo a quality assurance review by the Type 11 licensee
prior to distribution to end insert ensure the quantity and content of the
medical cannabis or medical cannabis product, and for tracking
and taxation purposes by the state. Licensed begin delete processors end delete begin insert cultivators
and manufacturers end insert shall package or seal all medical cannabis and
medical cannabis products in tamper-evident packaging and use
a unique identifier, such as a batch and lot number or bar code, to
identify and track the medical cannabis or medical cannabis
products. begin insert Medical cannabis and medical cannabis products shall
be labeled as required by Section 19346. end insert All packaging and sealing
shall be completed prior to begin delete any end delete medical cannabis or medical
cannabis products being transported or delivered to a licensee,
qualified patient, or caregiver.

begin insert

(3) This section does not limit the ability of licensed cultivators,
manufacturers, and dispensaries to directly enter into contracts
with one another indicating the price and quantity of medical
cannabis or medical cannabis products to be distributed. However,
a Type 11 licensee responsible for executing the contract is
authorized to collect a fee for the services rendered, including,
but not limited to, costs incurred by a Type 8 licensee, as well as
applicable state or local taxes and fees.

end insert

(g) Medical cannabis and medical cannabis products shall be
tested by a begin delete certified end delete begin insert licensed end insert testing laboratory, prior to retail sale
or dispensing, as follows:

(1) Medical cannabis from dried flower shall, at a minimum,
be tested for potency, pesticides, mold, begin delete rodenticide, end delete and other
contaminants.

(2) Medical cannabis extracts shall, at a minimum, be tested for
potency and purity of the product.

(3) This chapter shall not prohibit a licensee from performing
on-site testing for the purposes of quality assurance of the product
in conjunction with reasonable business operations. On-site testing
by the licensee shall not be certified by the Division of Medical
Cannabis Manufacturing and Testing.

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

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

19326.  

(a) A licensee shall not cultivate, process, store,
manufacture, transport, or sell medical cannabis begin insert or medical
cannabis products end insert 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 begin insert and lot end insert of product:

(1) The name begin delete and end delete begin insert , end insert address begin insert , and license number end insert 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.

begin insert

(8) For licensed testing laboratories, a record of test methods
and test results, including graphs, charts, or spectra from
laboratory instrumentation.

end insert

(c) Records shall be kept for a minimum of seven years
following approval of a state license.

(d) The office, the local enforcement agency designated in
accordance with Section 19309, and any other appropriate state
or local agency may examine the books and records of a begin delete state end delete
licensee and may visit and inspect the premises of a begin delete state end delete licensee,
as the office or state or local agency deems necessary to perform
its duties under this chapter. All inspections shall be conducted
during standard business hours of the licensed facility begin insert or at any
other reasonable time end insert . Licensees or employees or representatives
of licensees are prohibited from refusing, impeding, or interfering
with an inspection pursuant to this chapter or local ordinance. A
violation shall be a misdemeanor punishable by up to one year in
county jail and a fine up to five thousand dollars ($5,000) or by
civil penalties of up to five thousand dollars ($5,000).

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

(f) The office, the local enforcement agency designated pursuant
to Section 19309, or any other 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 cultivator, distributor, and dispensing licensees shall be
subject to inspection, as specified by the licensing authority, in
order to ensure compliance with this chapter, including, but not
limited to, maintaining proper documentation at each site or
facility.

19327.  

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

(1) Type 1, 1A, begin insert 1B, end insert 2, begin delete and end delete 2A begin insert , and 2B end insert licensees, or a
combination thereof, may apply for a Type 6 or 7 state license, or
a combination thereof.

(2) Type 6 and 7 licensees, or a combination thereof, may apply
for a Type 1, 1A, begin insert 1B, end insert 2, 2A begin insert , and 2B end insert state license, or a combination
thereof.

(3) Type 6 and 7 licensees, or a combination thereof, may apply
for a Type 10A state license.

(4) Type 10A licensees may apply for a Type 6 and 7 state
license, or a combination thereof.

(5) Type 1, 1A, begin insert 1B, end insert 2, 2A begin insert , and 2B end insert licensees, or a combination
thereof, may apply for a Type 10A state license.

(6) Type 10A licensees, may apply for Type 1, 1A, begin insert 1B, end insert 2, 2A begin insert ,
and 2B end insert state license, or a combination thereof.

begin insert

(7) Type 11 licensees may apply for a Type 12 state license.

end insert begin insert

(8) Type 12 licensees may apply for a Type 11 state license.

end insert

(b) Except as provided in subdivision (a), a person or entity that
holds a state license is prohibited from licensure for any other
activity authorized under this chapter, and is prohibited from
holding an ownership interest in real property, personal property,
or other assets associated or used in any other license category.

begin delete

(c) A licensee conducting commercial cannabis activity in a
jurisdiction that, prior to January 1, 2016, imposed a local
ordinance requiring a qualified businesses or individuals to
cultivate, manufacture, and dispense medical cannabis or medical
cannabis products, with all commercial cannabis activity being
conducted by a single licensee, may maintain their current
categories of licensure.

end delete begin insert

(c) (1) In a jurisdiction that adopted a local ordinance, prior
to July 1, 2015, allowing or requiring qualified businesses to
cultivate, manufacture, and dispense medical cannabis or medical
cannabis products, with all commercial cannabis activity being
conducted by a single qualified business, upon licensure that
business shall not be subject to subdivision (a) if it meets all of the
following conditions:

end insert begin insert

(A) The business was cultivating, manufacturing, and dispensing
medical cannabis or medical cannabis products on July 1, 2015,
and has continuously done so since that date.

end insert begin insert

(B) The business has been in full compliance with all applicable
local ordinances.

end insert begin insert

(C) The business is registered with the State Board of
Equalization.

end insert begin insert

(2) A business licensed pursuant to paragraph (1) is not required
to conduct all cultivation or manufacturing within the bounds of
a local jurisdiction, but all cultivation and manufacturing shall
have commenced prior to July 1, 2015, and have been in full
compliance with applicable local ordinances.

end insert begin insert

(3) A business licensed pursuant to paragraph (1) shall not be
issued a state license or local licenses or permits for commercial
cannabis activity after July 1, 2015, unless it complies with the
requirements in subdivision (a).

end insert begin insert

(d) A licensee shall not hold a cultivation license for an area
totaling more than one acre of canopy size, except as provided in
subdivision (c). For the purposes of this section, a plant count
allowed by an individual’s license shall count towards the
maximum allowable canopy size pursuant to this section.

end insert

19327.2.  

A licensee shall not also be licensed as a retailer of
alcoholic beverages pursuant to Division 9 (commencing with
Section 23000).

19328.  

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.

19329.  

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 shall not
interfere with an employer’s rights and obligations to maintain a
drug and alcohol free workplace or 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 prohibiting the
use of cannabis by employees and prospective employees, or
prevent employers from complying with state or federal law.

 

Article 6.  Provisional Licensing

 

19330.  

(a) Each licensing authority shall, as soon as practicable
following January 1, 2016, allow a qualified applicant for licensure
to apply for, receive, and renew 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. The
provisional license shall have a scheduled expiration date, as
determined by the licensing authority.

(b) Each licensing authority shall establish appropriate fees not
to exceed the reasonable regulatory costs to the licensing authority
for the issuance and renewal 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 March 1, 2016, regularly
cultivating, processing, manufacturing, transporting, or distributing
medical cannabis begin insert or medical cannabis products end insert 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. Priority for provisional
licensure shall be given to those businesses in compliance with
local ordinances prior to begin delete September end delete begin insert July end insert 1, 2015.

(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 March 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 March
1, 2016, to September 1, 2016, inclusive. The licensee shall make
its records of current activity, and activity for the three months
prior to March 1, 2016, available to the licensing authority upon
request.

(5) For an applicant seeking a begin insert state end insert license to cultivate,
distribute, or dispense medical begin delete cannabis, end delete begin insert cannabis or medical
cannabis products, end insert a notarized statement from the owner of real
property or landlord where the licensed activities will occur, as
proof to demonstrate the landowner has acknowledged and
consented to permit the proposed activities to be conducted on the
property by the tenant applicant.

begin insert

(6) For an applicant seeking a license as a testing laboratory,
the applicant shall submit all of the following:

end insert begin insert

(A) A completed independent laboratory registration form, as
established by the State Department of Public Health.

end insert begin insert

(B) A copy of the contract with the accrediting body that the
licensee is applying to become accredited with, accompanied by
a copy of the proposed scope of the accreditation, or evidence that
the licensed testing laboratory has been accredited by, an
accrediting body in another jurisdiction.

end insert begin insert

(C) The name, address, date of birth, and social security number
of each licensed testing laboratory employee and a copy of the
application form completed by each licensed testing laboratory
employee.

end insert

(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 or
renew a provisional license and send a proof of issuance or renewal
to the applicant.

(f) Notwithstanding any other provision of this section, a
licensing authority shall not issue or renew a provisional license
to an individual or entity, or for a premises, against whom there
are pending state or local administrative begin insert actions end insert or judicial
proceedings or begin insert other end insert 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.

begin insert

(g) Except as provided in subdivisions (h) and (i), a licensing
authority shall not issue or renew a provisional license to an
applicant or entity, or any of its officers, directors, or owners, who
has been convicted, as defined as a plea or verdict of guilty or a
conviction following a plea of nolo contendere, of any of the
following:

end insert begin insert

(1) A felony conviction for the possession for sale, sale,
manufacture, transportation, or cultivation of a controlled
substance.

end insert begin insert

(2) A violent felony, as specified in subdivision (c) of Section
667.5 of the Penal Code.

end insert begin insert

(3) A serious felony, as specified in subdivision (c) of Section
1192.7 of the Penal Code.

end insert begin insert

(4) A felony offense involving fraud, deceit, or embezzlement.

end insert begin insert

(5) Any other felony that, in the licensing authority’s
determination, would impair the applicant’s ability to appropriately
operate as a provisional licensee.

end insert begin insert

(h) An applicant shall not be denied a provisional license based
on a conviction for an offense listed in subdivision (g) in any of
the following instances:

end insert begin insert

(1) The only basis for denial under subdivision (g) is that the
applicant has been convicted of transporting a controlled substance
pursuant to Section 11352 or 11379 of the Health and Safety Code
prior to January 1, 2014, and the facts underlying the conviction
establish that the applicant did not transport the controlled
substance with the intent to sell or the intent to aid and abet the
commission of, or conspiracy to commit, the crime of
transportation of the controlled substance.

end insert begin insert

(2) The applicant has been convicted of a felony that would not
be subject to criminal prosecution pursuant to Section 11362.5 or
11362.775 of the Health and Safety Code.

end insert begin insert

(3) The applicant has obtained a certificate of rehabilitation
under Chapter 3.5 (commencing with Section 4852.01) of Title 6
of Part 3 of the Penal Code, or the conviction was subsequently
dismissed under the provisions of Section 1203.4, 1203.4a, or
1203.41 of the Penal Code.

end insert begin insert

(i) The licensing authority shall give priority review to
applicants who have been in operation for five years prior to the
first date that applications are taken for provisional licenses, have
not been convicted of a felony, and have been in full compliance
with the local ordinances in the jurisdiction in which the applicant
proposes to operate.

end insert begin delete

(g)

end delete

begin insert (j) end insert  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.

begin delete

(h)

end delete

begin insert (k) end insert  Beginning July 1, 2017, all commercial cannabis activity
shall be conducted between begin delete licensees of commercial cannabis
activity. end delete begin insert licensees. end insert 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.

begin delete

(i)

end delete

begin insert (l) end insert  A provisional license issued pursuant to this section shall
automatically terminate upon a licensing agency’s issuance of a
regular state license.

 

Article 7.  Licensed Cultivation Sites

 

begin insert

begin insert 19331. end insert   

The Legislature finds and declares all of the following:

(a) The United States Environmental Protection Agency has not
established appropriate pesticide tolerances for, or permitted the
registration and lawful use of, pesticides on cannabis crops
intended for human consumption pursuant to the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 136 et seq.).

(b) The use of pesticides is not adequately regulated due to the
omissions in federal law, and cannabis cultivated in California
for California patients can and often does contain pesticide
residues.

(c) Lawful California medical cannabis growers and caregivers
urge the Department of Pesticide Regulation to provide guidance,
in absence of federal guidance, on whether the pesticides currently
used at most cannabis cultivation sites are actually safe for use
on cannabis intended for human consumption.

end insert

19332.  

(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 division shall, in consultation with the State
Department of Public Health and the Department of Pesticide
Regulation, develop standards for the production and labeling of
all edible medical cannabis products, standards for the use of
pesticides begin delete and rodenticides end delete in cultivation, and maximum tolerances
for begin delete pesticides, rodenticides, end delete begin insert pesticides end insert 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 equivalent to Division 5 (commencing
with Section 12001).

(2) 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.

begin insert

(3) Establish cultivation protocols ensuring the quality,
availability, and safety of the medical cannabis crop, including
both indoor and outdoor cultivation standards and regulations
regarding carbon offsets for indoor cultivation.

end insert

(c) The Department of Pesticide Regulation shall promulgate
regulations that require that the application of pesticides or other
pest control in connection with the indoor or outdoor cultivation
of medical cannabis meets standards equivalent to Division 6
(commencing with Section 11401) of the Food and Agricultural
Code and its implementing regulations.

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

(1) Type 1, or “specialty outdoor,” for outdoor cultivation begin insert using
no artificial lighting end insert of less than 5,000 square feet of total canopy
size on one premises begin insert , or up to 50 mature plants on noncontiguous
plots end insert .

(2) Type 1A, or “specialty indoor,” for indoor cultivation begin insert using
exclusively artificial lighting end insert of less than 5,000 square feet of total
canopy size on one premises.

begin insert

(3) Type 1B, or “specialty mixed-light,” for cultivation using
a combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the licensing authority,
of less than 5,000 square feet of total canopy size on one premises.

end insert begin delete

(3)

end delete

begin insert (4) end insert  Type 2, or “small outdoor,” for outdoor cultivation begin insert using
no artificial lighting end insert between 5,001 and 10,000 square feet of total
canopy size on one premises.

begin delete

(4)

end delete

begin insert (5) end insert  Type 2A, or “small indoor,” for indoor cultivation begin insert using
exclusively artificial lighting end insert between 5,001 and 10,000 square
feet of total canopy size on one premises.

begin insert

(6) Type 2B, or “small mixed-light,” for cultivation using a
combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the licensing authority,
between 5,001 and 10,000 square feet of total canopy size on one
premises.

end insert begin delete

(5)

end delete

begin insert (7) end insert  Type 3, or “outdoor,” for outdoor cultivation begin insert using no
artificial lighting end insert between 10,001 and 44,000 square feet of total
canopy size on one premises. The Division of Medical Cannabis
Cultivation shall limit the number of licenses allowed of this type.

begin insert

(8) Type 3A, or “indoor,” for indoor cultivation using
exclusively artificial lighting between 10,001 and 22,000 square
feet of total canopy size on one premises. The Division of Medical
Cannabis Cultivation shall limit the number of licenses allowed
of this type.

end insert begin insert

(9) Type 3B, or “mixed-light,” for cultivation using a
combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the licensing authority,
between 10,001 and 22,000 square feet of total canopy size on one
premises. The Division of Medical Cannabis Cultivation shall limit
the number of licenses allowed of this type.

end insert begin delete

(6)

end delete

begin insert (10) end insert  Type 4, or “nursery,” for cultivation of medical cannabis
solely as a nursery. Type 4 licensees may transport live plants.

begin delete

(e) 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.

end delete begin delete

(f)

end delete

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

19333.  

An employee engaged in commercial cannabis
cultivation activity shall be subject to Wage Order 4-2001 of the
Industrial Welfare Commission.

 

Article 8.  Licensed Distributors, Dispensaries, and Transporters

 

19334.  

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

(b) By March begin delete 1, end delete begin insert 31, end insert 2016, the State Board of Equalization shall
submit a request for proposal to the public regarding a tracking
program for medical cannabis and medical cannabis products as
part of the anti-diversion effort. The State Board of Equalization
shall choose a supplier and begin full implementation of the
program prior to the issuance of state licenses pursuant to this
chapter.

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

(1) Type 10, or “dispensary,” for the retail of medical cannabis
or medical cannabis products. This license shall allow for delivery
where expressly authorized by local ordinance, pursuant to
subdivision (b) of Section 19340.

(2) Type 10A or “special dispensary status,” for dispensers who
have no more than three licensed dispensary facilities. This license
shall allow for delivery where expressly authorized by local
ordinance, pursuant to subdivision (b) of Section 19340.

(3) Type 11, or “distributor,” for the begin delete processing and end delete certification
of the content of all medical cannabis or medical cannabis products
begin delete that are transported or delivered by end delete begin insert and distribution end insert licensees. begin insert A
Type 11 licensee shall hold a Type 12, or transporter, license and
register each facility location where product is stored for the
purposes of distribution. end insert A Type 11 licensee shall not hold a license
in begin delete any other end delete begin insert a cultivation, manufacturing, dispensing, or testing end insert
license category and shall not own, or have an ownership interest
in, a facility licensed begin delete pursuant to this chapter end delete begin insert in those categories end insert
other than a security interest, lien, or encumbrance on property
that is used by a licensee. begin insert A Type 11 licensee shall be bonded and
insured at a minimum level end insert begin insert established by the licensing authority. end insert

(4) Type 12, or “transport,” for transporters of medical cannabis
or medical cannabis products. begin insert A Type 12 licensee shall be bonded
and insured at a minimum level end insert begin insert established by the licensing
authority. end insert

begin insert

(d) The State Board of Equalization shall adopt regulations
establishing the following statewide minimum thresholds for
additional transportation security requirements, as developed by
the task force and office:

end insert begin insert

(1) Minimum additional security requirements for the
transportation of medical cannabis and medical cannabis products,
based on total retail value, weight of medical cannabis, and weight
of medical cannabis products, for an entity licensed pursuant to
Section 19332 or 19342 or paragraph (1) or (2) of subdivision (c)
of Section 19334.

end insert begin insert

(2) Minimum additional security requirements for the delivery
of medical cannabis and medical cannabis products, based on
total retail value, weight of medical cannabis, and weight of
medical cannabis products, for an entity licensed pursuant to
paragraph (1) or (2) of subdivision (c) of Section 19334, where
expressly authorized by local ordinance, pursuant to subdivision
(b) of Section 19340.

end insert

19334.5.  

(a) The State Board of Equalization shall adopt a
medical cannabis and medical cannabis products track and trace
process for reporting the movement of cannabis items throughout
the distribution chain that also employs secure packaging and that
is capable of providing information that captures, at a minimum,
all of the following:

(1) The licensee receiving the product.

(2) The transaction date.

(3) Any other information deemed necessary by the State Board
of Equalization for the taxation and regulation of medical cannabis
and medical cannabis products.

(b) The State Board of Equalization shall receive initial funding
for subdivision (b) of Section 19334 and this section pursuant to
subdivision (d) of Section 19361.

19335.  

(a) The provisions of Chapter 4 (commencing with
Section 55121) of Part 30 of Division 2 of the Revenue and
Taxation Code shall apply with respect to the State Board of
Equalization’s collection of the fees, civil fines, and penalties
imposed pursuant to this chapter.

(b) The provisions of Chapter 8 (commencing with Section
55381) of Part 30 of Division 2 of the Revenue and Taxation Code
shall apply with respect to the disclosure of information under this
chapter.

 

Article 9.  Licensed Transporters

 

19336.  

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

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

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

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

(c) During begin delete transportation or delivery, end delete begin insert transportation, end insert 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

(f) When a licensing authority has knowledge that a licensee
has transported, or arranged for or facilitated the transport of,
medical cannabis or medical cannabis products in violation of
this article, the licensing authority shall summarily suspend that
state license and shall, without delay, commence proceedings for
revocation of the state license in accordance with this chapter.

end insert

19336.5.  

An entity licensed pursuant to Section begin delete 19332, 19334, end delete
begin insert 19332 end insert or 19342 begin insert or paragraph (1) or (2) of subdivision (c) of
Section 19334 end insert may transport between licensees medical cannabis
or medical cannabis products begin delete with a total retail value, weight of
medical cannabis, and weight of medical cannabis products, end delete begin insert in an
amount end insert below the statewide begin delete threshold, which shall be adopted by
regulation by the licensing authority after review by the task force
and the office. end delete begin insert minimum set pursuant to subdivision (d) of Section
19334. end insert

19337.  

(a) Transported begin delete and delivered end delete 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 begin delete only end delete begin insert not end insert apply to licensees transporting
medical cannabis or medical cannabis products begin delete 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. end delete begin insert in an amount below
the statewide minimum set pursuant to subdivision (d) of Section
19334. end insert

(b)  begin delete Except as provided in Section 19340, a end delete begin insert A end insert vehicle transporting
medical cannabis or medical cannabis products shall travel only
directly between licensed facilities, unless otherwise authorized
under its license. All transport begin delete and deliveries end delete shall be conducted
between 8:00 a.m. and 8:00 p.m. Transportation begin delete and delivery end delete of
shipments begin delete do end delete begin insert does end insert not have to be completed in a single day.

(c) All transport begin delete or delivery end delete vehicles shall be staffed with a
minimum of two direct employees of the licensee. At least one
employee shall remain with the vehicle at all times when the
vehicle contains medical cannabis begin insert or medical cannabis products end insert .
This requirement shall begin delete only end delete begin insert not end insert apply to licensees transporting
medical cannabis or medical cannabis products begin delete 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. end delete begin insert below the statewide
minimum set pursuant to subdivision (d) of Section 19334. end insert

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

(e) This section shall be enforced by the Department of the
California Highway Patrol in collaboration with begin insert state and end insert local
agencies.

19337.1.  

Notwithstanding Section 19337, a licensed transporter
may transport medical cannabis products to an unlicensed
dispensing facility within the City of Los Angeles, provided the
following requirements are met:

(a) The licensed transporter shall comply with subdivisions (b)
and (c) of Section 19336, except that, in complying with paragraph
(2) of subdivision (b), the licensed transporter shall securely
transmit the manifest to the licensing authority and the unlicensed
dispensing facility that will receive the medical cannabis products.

(b) The licensed transporter shall record and maintain, in both
physical and electronic format, the following information with
respect to the begin delete delivery end delete begin insert transportation end insert of medical cannabis products
to the unlicensed dispensing facility:

(1) The date begin insert and time end insert of begin delete delivery. end delete begin insert arrival at the destination. end insert

(2) The address of begin delete delivery. end delete begin insert the destination. end insert

(3) The name begin insert and state license number end insert of the individual who
completed the begin delete delivery. end delete begin insert shipment. end insert

(4) The name begin insert and the state license number end insert of the individual at
the facility who received the begin delete delivery. end delete begin insert shipment. end insert

(5) The name of the owner or operator of the facility.

(6) The name of the facility, begin delete as end delete begin insert including the name end insert reflected on
any signage.

(7) The quantity, or weight, and variety of all medical cannabis
products begin delete delivered. end delete begin insert received. end insert

(8) The source of all medical cannabis begin delete delivered. end delete begin insert received. end insert

(9) The monetary amount charged and received for all medical
cannabis products begin delete delivered. end delete begin insert received. end insert

(c) The recorded information specified in subdivision (b) shall
be transmitted within five days to the City of Los Angeles, in a
manner to be determined and specified by the City of Los Angeles.

(d) The records required by this section shall be maintained and
made available in accordance with the provisions of Section 19326.

19338.  

(a) The begin delete licensing authority end delete begin insert State Board of Equalization end insert
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.

begin insert

(6) The license number issued by the State Board of
Equalization.

end insert

(b) The database shall be designed to flag irregularities for a
licensing authority to investigate. begin delete An authorized enforcement
authority end delete begin insert Licensing authorities and state and local agencies end insert may,
at any time, inspect shipments and request documentation for
current inventory.

19339.  

(a) This chapter shall not be construed to authorize or
permit a licensee to transport begin delete or deliver, end delete or cause to be transported
begin delete or delivered, end delete 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.

begin delete

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

end delete

begin insert

begin insert 19339.5. end insert   

Notwithstanding any other law or the wage orders
of the Industrial Welfare Commission, a driver employed to
transport medical cannabis or medical cannabis products shall
be entitled to overtime pay pursuant to Section 510 of the Labor
Code.

end insert

 

begin insert

Article begin insert 9.5. end insert   begin insert Delivery end insert

end insert

 

19340.  

(a) All begin delete mobile, vehicular, and technology platforms
that enable qualified patients or primary caregivers to arrange for
any of the above-described functions with a third party end delete begin insert deliveries,
as defined in Section 19300, end insert are prohibited, except as authorized
by this chapter and local ordinance. begin insert Deliveries may only be made
by an appropriately licensed dispensary. end insert

(b) Upon approval of the licensing authority, a begin delete licensee end delete begin insert licensed
dispensary end insert authorized to begin delete provide delivery services end delete begin insert deliver medical
cannabis or medical cannabis products end insert shall comply with begin insert both of end insert
the following:

(1) The city, county, or city and county in which the begin delete premises
of the licensee end delete begin insert licensed dispensary end insert is located, and in which each
delivery is made, begin delete must end delete begin insert shall end insert specifically begin insert and by ordinance end insert permit
begin delete delivery service by ordinance referring to this section. end delete begin insert delivery,
as defined in Section 19300. end insert

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

begin delete

(3) Delivery of medical cannabis or medical cannabis products
pursuant to this section shall comply with subdivisions (c) and (d)
of Section 19336 and subdivisions (a), (c), and (d) of Section
19337.

end delete

(c) A 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 begin delete transported or end delete delivered, or arranged or facilitated the begin delete transport
or end delete delivery of, medical cannabis or medical cannabis products in
violation of this begin delete chapter, end delete begin insert article, end insert 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.

begin delete

(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.

end delete begin insert

(e) During delivery, the licensee shall maintain a physical copy
of the delivery request and shall make it available upon request
to agents of the licensing authority, local law enforcement officers,
or any other designated enforcement agency. The delivery request
documentation shall comply with state and federal law regarding
the protection of confidential medical information.

end insert begin insert

(f) The patient or qualified caregiver requesting the delivery
shall maintain a copy of the delivery request and shall make it
available, upon request, to agents of the licensing authority, local
law enforcement officers, or any other designated enforcement
agency.

end insert begin insert

(g) Medical cannabis or medical cannabis products shall be
delivered only in a storage compartment that is securely affixed
to the interior of the vehicle and that is not visible from outside
the vehicle. This subdivision shall not apply to licensees delivering
medical cannabis or medical cannabis products below the
statewide minimum set pursuant to subdivision (d) of Section
19334.

end insert begin insert

(h) All delivery vehicles shall be staffed with a minimum of two
direct employees of the licensee. At least one employee shall remain
with the vehicle at all times when the vehicle contains medical
cannabis or medical cannabis products. This subdivision shall not
apply to licensees delivering medical cannabis or medical cannabis
products below the statewide minimum set pursuant to subdivision
(d) of Section 19334.

end insert begin insert

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

end insert begin insert

(j) A local jurisdiction shall not prevent delivery of medical
cannabis or medical cannabis products on public roads by a
licensee acting in compliance with this chapter and applicable
local ordinances.

end insert

begin delete

19341.  

Notwithstanding any other law or the wage orders of
the Industrial Welfare Commission, a driver employed to transport
medical cannabis or medical cannabis products shall be entitled
to overtime pay pursuant to Section 510 of the Labor Code.

end delete

 

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

 

19342.  

(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 6, or “manufacturing level 1,” for manufacturing sites
that produce medical cannabis products using nonvolatile solvents.

(2) Type 7, or “manufacturing level 2,” for manufacturing sites
that produce medical cannabis products using volatile solvents.
The division shall limit the number of licenses of this type.

(3) Type 8, or “testing,” for testing of medical cannabis and
medical cannabis products. Type 8 licensees shall have their
facilities begin delete certified end delete begin insert licensed end insert according to regulations set forth by
the division. A Type 8 licensee shall not hold a license in another
license category of this chapter and shall not own or have
ownership interest in a facility licensed pursuant to this chapter.

begin delete

(c) All license fees collected by the division pursuant to this
chapter shall be deposited into the Medical Cannabis
Manufacturing Fees Account, which is hereby established within
the fund. All moneys within the Medical Cannabis Manufacturing
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.

end delete

begin delete

19343.  

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

end delete begin insert

begin insert 19343. end insert   

(a) For the purposes of testing medical cannabis or
medical cannabis products, licensees shall use a licensed testing
laboratory that has adopted a standard operating procedure using
methods 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 to test medical cannabis and medical cannabis products
that are approved by an accrediting body that is a signatory to the
International Laboratory Accreditation Cooperation Mutual
Recognition Arrangement.

(b) An agent of a licensed testing laboratory shall obtain
samples according to a statistically valid sampling method for
each lot.

(c) A licensed testing laboratory shall analyze samples
according to either of the following:

(1) The most current version of the cannabis inflorescence
monograph published by the American Herbal Pharmacopoeia.

(2) Scientifically valid methodology that is demonstrably equal
or superior to paragraph (1), in the opinion of the accrediting
body.

(d) If a test result falls outside the specifications authorized by
law or regulation, the licensed testing laboratory shall follow a
standard operating procedure to confirm or refute the original
result.

(e) A licensed testing laboratory shall destroy the remains of
the sample of medical cannabis or medical cannabis product upon
completion of the analysis.

end insert begin insert

begin insert 19343.2. end insert   

A licensed testing laboratory shall do all of the
following:

(a) Follow the methodologies, ranges, and parameters that are
contained in the scope of the accreditation for testing medical
cannabis or medical cannabis products.

(b) Require each licensed testing laboratory employee to
complete and execute an application for employment on a form
provided by the Division of Medical Cannabis Manufacturing and
Testing.

(c) Establish and follow written procedures for verifying the
experience and education of employees.

(d) Submit the registration information for each licensed testing
laboratory employee within 15 days of the employee being hired.

(e) Upon termination of the association of the registered licensed
testing laboratory employee with the licensed testing laboratory,
do all of the following:

(1) Obtain keys or other entry devices from the terminated
employee.

(2) Ensure the terminated employee can no longer gain access
to the laboratory premises.

(3) Within one business day of the termination of the employee,
notify the Division of Medical Cannabis Manufacturing and Testing
of the termination.

(f) Notify the Division of Medical Cannabis Manufacturing and
Testing within one business day after the receipt of notice of any
kind that its accreditation has been denied, suspended, or revoked.

end insert begin insert

begin insert 19343.5. end insert   

A licensed testing laboratory shall not handle, test,
or analyze medical cannabis or medical cannabis products unless
the licensed testing laboratory meets all of the following:

(a) Is registered by the Division of Medical Cannabis
Manufacturing and Testing.

(b) Is independent from all other persons and entities involved
in the medical cannabis industry.

(c) Is accredited by an accrediting body or has a provisional
license from the Division of Medical Cannabis Manufacturing and
Testing.

(d) Has established standard operating procedures that provide
for adequate chain of custody controls for samples transferred to
the licensed testing laboratory for testing.

end insert begin insert

begin insert 19343.7. end insert   

(a) A licensed testing laboratory shall issue a
certificate of analysis for each lot, with supporting data, to report
both of the following:

(1) Whether the chemical profile of the lot conforms to the
specifications of the lot for compounds, including, but not limited
to, all of the following:

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(C) Cannabidiol (CBD).

(D) Cannabidiolic Acid (CBDA).

(E) The terpenes described in the most current version of the
cannabis inflorescence monograph published by the American
Herbal Pharmacopoeia.

(F) Cannabigerol (CBG).

(G) Cannabinol (CBN).

(H) Any other compounds required by the Division of Medical
Cannabis Manufacturing and Testing.

(2) That the presence of contaminants does not exceed the levels
that are the lesser of either the most current version of the
American Herbal Pharmacopoeia monograph or the Division of
Medical Cannabis Manufacturing and Testing. For purposes of
this paragraph, contaminants includes, but is not limited to, all of
the following:

(A) Residual solvent or processing chemicals.

(B) Foreign material, including, but not limited to, hair, insects,
or similar or related adulterant.

(C) Microbiological impurity, including total aerobic microbial
count, total yeast mold count, P.aeruginosa, aspergillus spp., s.
aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A.

(D) Whether the batch is within specification for odor and
appearance.

(b) Residual levels of volatile organic compounds shall be below
the lesser of either the specifications set by the United States
Pharmacopeia (U.S.P. Chapter 467) or those set by the Division
of Medical Cannabis Manufacturing and Testing.

end insert

19344.  

(a)  begin delete A laboratory certified by the department to perform
random sample testing of medical cannabis or medical cannabis
products end delete begin insert Except as provided in this chapter, a licensed testing
laboratory end insert shall not acquire or receive medical cannabis or medical
cannabis products except from a licensed facility begin insert or an unlicensed
facility in the City of Los Angeles end insert in accordance with this chapter,
and shall not distribute, sell, deliver, transfer, transport, or dispense
medical cannabis or medical cannabis products except to the
licensed facility begin insert or unlicensed facility in the City of Los Angeles, end insert
from which the medical cannabis or medical cannabis products
were acquired or received. All transfer or transportation shall be
performed pursuant to a specified chain of custody protocol.

begin insert

(b) A licensed testing laboratory may receive and test samples
of medical cannabis or medical cannabis products from a qualified
patient or primary caregiver only if he or she presents his or her
valid recommendation for cannabis for medical purposes from a
physician. A licensed testing laboratory shall not certify samples
from a qualified patient or caregiver for resale or transfer to
another party or licensee. All tests performed by a licensed testing
laboratory for a qualified patient or caregiver shall be recorded
with the name of the qualified patient or caregiver and the amount
of medical cannabis or medical cannabis product received.

end insert begin delete

(b)

end delete

begin insert (c) end insert  The begin delete department end delete begin insert Division of Medical Cannabis
Manufacturing and Testing end insert 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 begin delete department, end delete begin insert Division of Medical
Cannabis Manufacturing and Testing, end insert unless remedial measures
can bring the cannabis into compliance with quality assurance
standards as promulgated by the begin delete department. end delete begin insert Division of Medical
Cannabis Manufacturing and Testing. end insert

begin delete

(c)

end delete

begin insert (d) end insert  The begin delete department end delete begin insert Division of Medical Cannabis
Manufacturing and Testing end insert shall establish a begin delete certification end delete begin insert licensing end insert
fee, and laboratories shall pay a fee to be begin delete certified. Certification end delete
begin insert licensed. Licensing end insert fees shall not exceed the reasonable regulatory
cost of the begin delete certification end delete begin insert licensing end insert activities.

begin delete

(d) All certification fees collected by the department pursuant
to this chapter shall be deposited into the Medical Cannabis Testing
Fees Account, which is hereby established within the fund. All
moneys in the Medical Cannabis Testing Fees Account shall be
available to the division upon appropriation of the Legislature
solely for the purpose of fully funding administration of this
chapter, including, but not limited to, the costs incurred by the
division for the administrative expenses and costs and the costs of
regulation.

end delete

19345.  

(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 for medical cannabis products.

(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 equivalent 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 begin delete department end delete begin insert Division of
Medical Cannabis Manufacturing and Testing end insert 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.

19346.  

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

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

(2) All 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.”

begin insert

(E) The statement “THIS PRODUCT MAY IMPAIR THE
ABILITY TO DRIVE OR OPERATE MACHINERY. PLEASE USE
EXTREME CAUTION.”

end insert begin delete

(E)

end delete

begin insert (F) end insert  For packages containing only dried begin delete cannabis, end delete begin insert flower, end insert the
net weight of medical cannabis in the package.

begin delete

(F)

end delete

begin insert (G) end insert  A warning if nuts or other known allergens are used.

begin delete

(G)

end delete

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

begin delete

(H)

end delete

begin insert (I) end insert  Clear indication, in bold type, that the product contains
medical cannabis.

begin delete

(I)

end delete

begin insert (J) end insert  Identification of the source and date of cultivation and
manufacture.

begin delete

(J)

end delete

begin insert (K) end insert  The date of sale.

begin delete

(K)

end delete

begin insert (L) end insert  Any other requirement set by the begin delete department. end delete begin insert licensing
authority. end insert

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

 

Article 11.  Cannabis Employee Certification and Apprenticeship

 

19350.  

This article applies only to cultivation sites and
dispensaries.

19351.  

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.

19352.  

(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.

19353.  

(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 licensing 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 12.  Taxation

 

begin delete

19355.  

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

end delete begin delete

19356.  

It is the intent of the Legislature to grant authority to
the board of supervisors of a county to impose appropriate taxes
on facilities licensed pursuant to this chapter.

end delete begin insert

begin insert 19355. end insert   

(a) (1) A county may impose a tax on the privilege of
cultivating, dispensing, producing, processing, preparing, storing,
providing, donating, selling, or distributing medical cannabis or
medical cannabis products by a licensee operating pursuant to
Chapter 3.5 (commencing with Section 19300) of Division 8 of the
Business and Professions Code.

(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, if necessary, and the
manner of collection of the tax. The tax may be imposed for general
governmental purposes or for purposes specified in the ordinance
by the board of supervisors.

(3) 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. A tax imposed pursuant
to this section is a tax and not a fee or special assessment. The
board of supervisors shall specify whether the tax applies
throughout the entire county or within the unincorporated area of
the county.

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

(b) A tax imposed pursuant to this section shall be subject to
applicable voter approval requirements imposed by law.

(c) For purposes of this section, “cannabis” has the same
meaning as set forth in Section 19300.

(d) This section is declaratory of existing law and does not limit
or prohibit the levy or collection of any other fee, charge, or tax,
or a 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 a county as provided by law.

(e) This section shall not be construed to authorize a county to
impose a sales or use tax in addition to the sales and use tax
imposed under an ordinance conforming to the provisions of
Sections 7202 and 7203 of the Revenue and Taxation Code.

end insert

 

Article 13.  Funding

 

19360.  

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 begin delete or end delete begin insert and end insert renewal begin delete fee. end delete begin insert fee, as applicable. end insert The licensure begin delete or end delete
begin insert and end insert 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, including, but not
limited to, the track and trace program required pursuant to Section
19334.5, 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.

(c) All license fees shall be set on a scaled basis by the licensing
authority, begin delete dependant end delete begin insert dependent end insert on the size of the business.

begin insert

(d) The licensing authority shall deposit all fees collected in a
fee account specific to that licensing authority, to be established
in the Medical Cannabis Regulation Fund. Moneys in the licensing
authority fee accounts shall be used, upon appropriation of the
Legislature, by the designated licensing authority for the
administration of this chapter.

end insert

19361.  

(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.

begin insert

(3) The grant program established by this subdivision shall only
be implemented after the loan specified in subdivision (d) is repaid.

end insert

(d) (1) Funds for the establishment and support of the regulatory
activities pursuant to this chapter begin delete may end delete begin insert shall end insert 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.
begin insert Should the initial proceeds from fees not be sufficient to repay the
loan, moneys from the Medical Cannabis Fines and Penalties
Account shall be made available to the office, by appropriation of
the Legislature end insert begin insert , to repay the loan. end insert

(2) Funds advanced pursuant to this subdivision shall be
appropriated to the office, which shall distribute the moneys to the
appropriate licensing authorities, as necessary to implement the
provisions of this chapter.

 

Article 14.  Reporting

 

19363.  

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 15.  Privacy

 

19365.  

(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.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 11552 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

11552.  

(a) Effective January 1, 1988, an annual salary of
eighty-five thousand four hundred two dollars ($85,402) shall be
paid to each of the following:

(1) Commissioner of Business Oversight.

(2) Director of Transportation.

(3) Real Estate Commissioner.

(4) Director of Social Services.

(5) Director of Water Resources.

(6) Director of General Services.

(7) Director of Motor Vehicles.

(8) Executive Officer of the Franchise Tax Board.

(9) Director of Employment Development.

(10) Director of Alcoholic Beverage Control.

(11) Director of Housing and Community Development.

(12) Director of Alcohol and Drug Programs.

(13) Director of Statewide Health Planning and Development.

(14) Director of the Department of Human Resources.

(15) Director of Health Care Services.

(16) Director of State Hospitals.

(17) Director of Developmental Services.

(18) State Public Defender.

(19) Director of the California State Lottery.

(20) Director of Fish and Wildlife.

(21) Director of Parks and Recreation.

(22) Director of Rehabilitation.

(23) Director of the Office of Administrative Law.

(24) Director of Consumer Affairs.

(25) Director of Forestry and Fire Protection.

(26) The Inspector General pursuant to Section 6125 of the
Penal Code.

(27) Director of Child Support Services.

(28) Director of Industrial Relations.

(29) Director of Toxic Substances Control.

(30) Director of Pesticide Regulation.

(31) Director of Managed Health Care.

(32) Director of Environmental Health Hazard Assessment.

(33) Director of California Bay-Delta Authority.

(34) Director of California Conservation Corps.

(35) Director of Technology.

(36) Director of Emergency Services.

begin insert

(37) Director of the Office of Medical Cannabis Regulation.

end insert

(b) The annual compensation provided by this section shall be
increased in any fiscal year in which a general salary increase is
provided for state employees. The amount of the increase provided
by this section shall be comparable to, but shall not exceed, the
percentage of the general salary increases provided for state
employees during that fiscal year.

begin delete SEC. 7. end delete
begin insert SEC. 6. end insert   

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

11362.775.  

(a) Subject to subdivision (b), qualified 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 to
collectively or cooperatively cultivate cannabis 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.

(b) This section shall remain in effect only until 180 days after
the Governor’s Office of Medical Cannabis Regulation 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.

begin delete SEC. 8. end delete
begin insert SEC. 7. end insert   

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

147.5.  

(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.

begin delete SEC. 9. end delete
begin insert SEC. 8. end insert   

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

3094.  

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.

begin delete

SEC. 10.  

Section 2402.5 is added to the Vehicle Code, to read:

2402.5.  

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 delete

begin insert

begin insert SEC. 9. 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   

(a) The Department of Motor Vehicles, in consultation
with the Department of the California Highway Patrol, shall
prepare a report to the Governor’s Office of Medical Cannabis
Regulation, the Senate, and the Assembly that identifies best
practices for the identification, detection, and apprehension of
drivers operating a vehicle unsafely due to medical cannabis
impairment.

(b) It is the intent of the Legislature that the Department of
Motor Vehicles use various resources, including, but not limited
to, peer-reviewed research and drug recognition experts to prepare
the report.

(c) The report shall include, but not be limited to, an
identification of roadside tests that enhance the ability of law
enforcement officers to detect cannabis impairment and specific
indicators that correlate performance on roadside testing with the
inability of a driver to safely operate a motor vehicle.

(d) Publication of the report shall not occur until the Department
of the California Highway Patrol concurs with its findings.

(e) The Department of Motor Vehicles and the Department of
the California Highway Patrol may contract for consultation
services necessary to complete the report and receive
reimbursement for the costs of consultation services from the
Medical Cannabis Regulation Fund.

(f) The report required pursuant to this section shall be
submitted in compliance with Section 9795 of the Government
Code.

end insert

begin delete SEC. 11. end delete
begin insert SEC. 10. end 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.

begin delete SEC. 12. end delete
begin insert SEC. 11. end 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:

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.

begin delete SEC. 13. end delete
begin insert SEC. 12. end 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.

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.