Amended in Senate September 11, 2015

Amended in Senate September 4, 2015

Amended in Senate September 1, 2015

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, begin delete and end delete Lackey begin insert , and Wood end insert

begin delete

(Coauthor: Assembly Member Chiu)

end delete

February 10, 2015

begin delete An act to amend Section 2220.05 of the Business and Professions Code, relating to medical marijuana. end delete begin insert An act to amend Sections 27 and 101 of, to add Section 205.1 to, and to add Chapter 3.5 (commencing with Section 19300) to Division 8 of, the Business and Professions Code, to amend Section 9147.7 of the Government Code, to amend Section 11362.775 of the Health and Safety Code, to add Section 147.5 to the Labor Code, and to add Section 31020 to the Revenue and Taxation Code, relating to medical marijuana. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 266, as amended, Bonta. begin delete Medical Board of California: cannabis. end delete begin insert Medical marijuana. end insert

begin insert

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 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 boards or bureaus within 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.

end insert begin insert

This bill, among other things, would enact the Medical Marijuana Regulation and Safety Act for the licensure and regulation of medical marijuana and would establish within the Department of Consumer Affairs the Bureau of Medical Marijuana Regulation, under the supervision and control of the Director of Consumer Affairs. The bill would require the director to administer and enforce the provisions of the act.

end insert begin insert

This bill would also require the Board of Equalization, in consultation with the Department of Food and Agriculture, to adopt a system for reporting the movement of commercial cannabis and cannabis products.

end insert begin insert

This bill would impose certain fines and civil penalties for specified violations of the act, and would require moneys collected as a result of these fines and civil penalties to be deposited into the Medical Cannabis Fines and Penalties Account.

end insert begin insert

(2) Under existing law, certain persons with identification cards, who associate within the state in order collectively or cooperatively to cultivate marijuana for medical purposes, are not solely on the basis of that fact subject to specified state criminal sanctions.

end insert begin insert

This bill would repeal these provisions upon the issuance of licenses by licensing authorities pursuant to the Medical Marijuana Regulation and Safety Act, as specified, and would instead provide that actions of licensees with the relevant local permits, in accordance with the act and applicable local ordinances, are not offenses subject to arrest, prosecution, or other sanction under state law.

end insert begin insert

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

end insert begin insert

(4) 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.

end insert begin insert

This bill would make legislative findings to that effect.

end insert begin insert

(5) 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, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

end insert begin insert

(6) The bill would provide that it shall become operative only if SB 643 and AB 243 of the 2015-16 Regular Session are also enacted and become operative.

end insert begin delete

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 requires the Medical Board of California to prioritize its investigative and prosecutorial resources to ensure that the most harmful physicians and surgeons are identified and disciplined expeditiously, and provides a list of allegations that shall be prioritized.

end delete begin delete

This bill would add repeatedly recommending excessive cannabis to patients for medical purposes, and repeatedly recommending cannabis to patients without a good faith examination and a medical reason, to the list of prioritized allegations.

end delete begin delete

This bill would become operative only if SB 643 of the 2015-16 Regular Session is enacted and becomes operative.

end delete

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 27 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

27.  

(a) Each entity specified in subdivisions (c), (d), and (e)
shall provide on the Internet information regarding the status of
every license issued by that entity in accordance with the California
Public Records Act (Chapter 3.5 (commencing with Section 6250)
of Division 7 of Title 1 of the Government Code) and the
Information Practices Act of 1977 (Chapter 1 (commencing with
Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code).
The public information to be provided on the Internet shall include
information on suspensions and revocations of licenses issued by
the entity and other related enforcement action, including
accusations filed pursuant to the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code) taken by the entity
relative to persons, businesses, or facilities subject to licensure or
regulation by the entity. The information may not include personal
information, including home telephone number, date of birth, or
social security number. Each entity shall disclose a licensee’s
address of record. However, each entity shall allow a licensee to
provide a post office box number or other alternate address, instead
of his or her home address, as the address of record. This section
shall not preclude an entity from also requiring a licensee, who
has provided a post office box number or other alternative mailing
address as his or her address of record, to provide a physical
business address or residence address only for the entity’s internal
administrative use and not for disclosure as the licensee’s address
of record or disclosure on the Internet.

(b) In providing information on the Internet, each entity specified
in subdivisions (c) and (d) shall comply with the Department of
Consumer Affairs’ guidelines for access to public records.

(c) Each of the following entities within the Department of
Consumer Affairs shall comply with the requirements of this
section:

(1) The Board for Professional Engineers, Land Surveyors, and
Geologists shall disclose information on its registrants and
licensees.

(2) The Bureau of Automotive Repair shall disclose information
on its licensees, including auto repair dealers, smog stations, lamp
and brake stations, smog check technicians, and smog inspection
certification stations.

(3) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation shall disclose information on
its licensees and registrants, including major appliance repair
dealers, combination dealers (electronic and appliance), electronic
repair dealers, service contract sellers, and service contract
administrators.

(4) The Cemetery and Funeral Bureau shall disclose information
on its licensees, including cemetery brokers, cemetery salespersons,
cemetery managers, crematory managers, cemetery authorities,
crematories, cremated remains disposers, embalmers, funeral
establishments, and funeral directors.

(5) The Professional Fiduciaries Bureau shall disclose
information on its licensees.

(6) The Contractors’ State License Board shall disclose
information on its licensees and registrants in accordance with
Chapter 9 (commencing with Section 7000) of Division 3. In
addition to information related to licenses as specified in
subdivision (a), the board shall also disclose information provided
to the board by the Labor Commissioner pursuant to Section 98.9
of the Labor Code.

(7) The Bureau for Private Postsecondary Education shall
disclose information on private postsecondary institutions under
its jurisdiction, including disclosure of notices to comply issued
pursuant to Section 94935 of the Education Code.

(8) The California Board of Accountancy shall disclose
information on its licensees and registrants.

(9) The California Architects Board shall disclose information
on its licensees, including architects and landscape architects.

(10) The State Athletic Commission shall disclose information
on its licensees and registrants.

(11) The State Board of Barbering and Cosmetology shall
disclose information on its licensees.

(12) The State Board of Guide Dogs for the Blind shall disclose
information on its licensees and registrants.

(13) The Acupuncture Board shall disclose information on its
licensees.

(14) The Board of Behavioral Sciences shall disclose
information on its licensees, including licensed marriage and family
therapists, licensed clinical social workers, licensed educational
psychologists, and licensed professional clinical counselors.

(15) The Dental Board of California shall disclose information
on its licensees.

(16) The State Board of Optometry shall disclose information
regarding certificates of registration to practice optometry,
statements of licensure, optometric corporation registrations, branch
office licenses, and fictitious name permits of its licensees.

(17) The Board of Psychology shall disclose information on its
licensees, including psychologists, psychological assistants, and
registered psychologists.

(d) The State Board of Chiropractic Examiners shall disclose
information on its licensees.

(e) The Structural Pest Control Board shall disclose information
on its licensees, including applicators, field representatives, and
operators in the areas of fumigation, general pest and wood
destroying pests and organisms, and wood roof cleaning and
treatment.

begin insert

(f) The Bureau of Medical Marijuana Regulation shall disclose
information on its licensees.

end insert begin delete

(f)

end delete

begin insert (g) end insert  “Internet” for the purposes of this section has the meaning
set forth in paragraph (6) of subdivision (f) of Section 17538.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 101 of the end insert begin insert Business and Professions Code end insert begin insert is
amended to read: end insert

101.  

The department is comprised of the following:

(a) The Dental Board of California.

(b) The Medical Board of California.

(c) The State Board of Optometry.

(d) The California State Board of Pharmacy.

(e) The Veterinary Medical Board.

(f) The California Board of Accountancy.

(g) The California Architects Board.

(h) The Bureau of Barbering and Cosmetology.

(i) The Board for Professional Engineers and Land Surveyors.

(j) The Contractors’ State License Board.

(k) The Bureau for Private Postsecondary Education.

(l) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation.

(m) The Board of Registered Nursing.

(n) The Board of Behavioral Sciences.

(o) The State Athletic Commission.

(p) The Cemetery and Funeral Bureau.

(q) The State Board of Guide Dogs for the Blind.

(r) The Bureau of Security and Investigative Services.

(s) The Court Reporters Board of California.

(t) The Board of Vocational Nursing and Psychiatric
Technicians.

(u) The Landscape Architects Technical Committee.

(v) The Division of Investigation.

(w) The Bureau of Automotive Repair.

(x) The Respiratory Care Board of California.

(y) The Acupuncture Board.

(z) The Board of Psychology.

(aa) The California Board of Podiatric Medicine.

(ab) The Physical Therapy Board of California.

(ac) The Arbitration Review Program.

(ad) The Physician Assistant Committee.

(ae) The Speech-Language Pathology and Audiology Board.

(af) The California Board of Occupational Therapy.

(ag) The Osteopathic Medical Board of California.

(ah) The Naturopathic Medicine Committee.

(ai) The Dental Hygiene Committee of California.

(aj) The Professional Fiduciaries Bureau.

(ak) The State Board of Chiropractic Examiners.

(al) The Bureau of Real Estate.

(am) The Bureau of Real Estate Appraisers.

(an) The Structural Pest Control Board.

begin insert

(ao) The Bureau of Medical Marijuana Regulation.

end insert begin delete

(ao)

end delete

begin insert (ap) end insert  Any other boards, offices, or officers subject to its
jurisdiction by law.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 205.1 is added to the end insert begin insert Business and Professions
Code end insert begin insert , to read: end insert

begin insert

begin insert 205.1. end insert   

Notwithstanding subdivision (a) of Section 205, the
Medical Marijuana Regulation and Safety Act Fund is a special
fund within the Professions and Vocations Fund, and is subject to
subdivision (b) of Section 205.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

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

begin insert

 

Chapter   begin insert 3.5. end insert Medical Marijuana Regulation and Safety
act

 

Article begin insert 1. end insert   Definitions

 

begin insert 19300. end insert   

This act shall be known and may be cited as the Medical
Marijuana Regulation and Safety Act.

begin insert 19300.5. end insert   

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

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

(b) “Applicant,” for purposes of Article 4 (commencing with
Section 19319), means the following:

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

(2) If the owner is an entity, “owner” includes within the entity
each person participating in the direction, control, or management
of, or having a financial interest in, the proposed facility.

(3) If the applicant is a publicly traded company, “owner”
means the chief executive officer or any person or entity with an
aggregate ownership interest of 5 percent or more.

(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.

(d) “Bureau” means the Bureau of Medical Marijuana
Regulation within the Department of Consumer Affairs.

(e) “Cannabinoid” or “phytocannabinoid” means a chemical
compound that is unique to and derived from cannabis.

(f) “Cannabis” means all parts of the plant Cannabis sativa
Linnaeus., 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” also means the separated resin,
whether crude or purified, obtained from marijuana. “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. “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. For the purpose of
this chapter, “cannabis” does not mean “industrial hemp” as
defined by Section 81000 of the Food and Agricultural Code or
Section 11018.5 of the Health and Safety Code.

(g) “Cannabis concentrate” means manufactured cannabis that
has undergone a process to concentrate the cannabinoid active
ingredient, thereby increasing the product’s potency. An edible
medical cannabis product is not considered food, as defined by
Section 109935 of the Health and Safety Code, or a drug, as
defined by Section 109925 of the Health and Safety Code.

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

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

(j) “Chief” means Chief of the Bureau of Medical Marijuana
Regulation within the Department of Consumer Affairs.

(k) “Commercial cannabis activity” includes cultivation,
possession, manufacture, processing, storing, laboratory testing,
labeling, transporting, distribution, or sale of medical cannabis
or a medical cannabis product, except as set forth in Section 19319,
related to qualifying patients and primary caregivers.

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

(m) “Delivery” means the commercial transfer of medical
cannabis or medical cannabis products from a dispensary, up to
an amount determined by the bureau to a primary caregiver or
qualified patient as defined in Section 11362.7 of the Health and
Safety Code, or a testing laboratory. “Delivery” also includes the
use by a dispensary of any technology platform owned and
controlled by the dispensary, or independently licensed under this
chapter, that enables qualified patients or primary caregivers to
arrange for or facilitate the commercial transfer by a licensed
dispensary of medical cannabis or medical cannabis products.

(n) “Dispensary” means a facility where medical cannabis,
medical cannabis products, or devices for the use of medical
cannabis or medical cannabis products are offered, either
individually or in any combination, for retail sale, including an
establishment that delivers, pursuant to express authorization by
local ordinance, medical cannabis and medical cannabis products
as part of a retail sale.

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

(p) “Distribution” means the procurement, sale, and transport
of medical cannabis and medical cannabis products between
entities licensed pursuant to this chapter.

(q) “Distributor” means a person licensed under this chapter
to engage in the business of purchasing medical cannabis from a
licensed cultivator, or medical cannabis products from a licensed
manufacturer, for sale to a licensed dispensary.

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

(s) “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. An edible
medical cannabis product is not considered food as defined by
Section 109935 of the Health and Safety Code or a drug as defined
by Section 109925 of the Health and Safety Code.

(t) “Fund” means the Medical Marijuana Regulation and Safety
Act Fund established pursuant to Section 19351.

(u) “Identification program” means the universal identification
certificate program for commercial medical cannabis activity
authorized by this chapter.

(v) “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.

(w) “Licensing authority” means the state agency responsible
for the issuance, renewal, or reinstatement of the license, or the
state agency authorized to take disciplinary action against the
license.

(x) “Cultivation site” means a facility where medical cannabis
is planted, grown, harvested, dried, cured, graded, or trimmed, or
that does all or any combination of those activities, that holds a
valid state license pursuant to this chapter, and that holds a valid
local license or permit.

(y) “Manufacturer” means a person that conducts the
production, preparation, propagation, or compounding of
manufactured medical cannabis, as described in subdivision (ae),
or medical cannabis products either directly or indirectly or by
extraction methods, or independently by means of chemical
synthesis or by a combination of extraction and chemical synthesis
at a fixed location that packages or repackages medical cannabis
or medical cannabis products or labels or relabels its container,
that holds a valid state license pursuant to this chapter, and that
holds a valid local license or permit.

(z) “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:

(1) Accredited by an accrediting body that is independent from
all other persons involved in the medical cannabis industry in the
state.

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

(aa) “Transporter” means a person issued a state license by
the bureau to transport medical cannabis or medical cannabis
products in an amount above a threshold determined by the bureau
between facilities that have been issued a state license pursuant
to this chapter.

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

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

(ad) “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.

(ae) “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.

(af) “Manufacturing site” means a location that produces,
prepares, propagates, or compounds manufactured medical
cannabis or medical cannabis products, directly or indirectly, by
extraction methods, 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 activities.

(ag) “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),
found at Section 11362.5 of the Health and Safety Code. For the
purposes of this chapter, “medical cannabis” does not include
“industrial hemp” as defined by Section 81000 of the Food and
Agricultural Code or Section 11018.5 of the Health and Safety
Code.

(ah) “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.

(ai) “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.

(aj) “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.

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

(al) “Topical cannabis” means a product intended for external
use. A topical cannabis product is not considered a drug as defined
by Section 109925 of the Health and Safety Code.

(am) “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, for the purposes of conducting commercial cannabis
activity authorized pursuant to this chapter.

begin insert 19300.7. end insert   

License classifications pursuant to this chapter are
as follows:

(a) Type 1 = Cultivation; Specialty outdoor; Small.

(b) Type 1A = Cultivation; Specialty indoor; Small.

(c) Type 1B = Cultivation; Specialty mixed-light; Small.

(d) Type 2 = Cultivation; Outdoor; Small.

(e) Type 2A = Cultivation; Indoor; Small.

(f) Type 2B = Cultivation; Mixed-light; Small.

(g) Type 3 = Cultivation; Outdoor; Medium.

(h) Type 3A = Cultivation; Indoor; Medium.

(i) Type 3B = Cultivation; Mixed-light; Medium.

(j) Type 4 = Cultivation; Nursery.

(k) Type 6 = Manufacturer 1.

(l) Type 7 = Manufacturer 2.

(m) Type 8 = Testing.

(n) Type 10 = Dispensary; General.

(o) Type 10A = Dispensary; No more than three retail sites.

(p) Type 11 = Distribution.

(q) Type 12 = Transporter.

 

Article begin insert 2. end insert   Administration

 

begin insert 19302. end insert   

There is in the Department of Consumer Affairs the
Bureau of Medical Marijuana Regulation, under the supervision
and control of the director. The director shall administer and
enforce the provisions of this chapter.

begin insert 19303. end insert   

Protection of the public shall be the highest priority
for the bureau in exercising its licensing, regulatory, and
disciplinary functions under this chapter. Whenever the protection
of the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.

begin insert 19304. end insert   

The bureau shall make and prescribe reasonable rules
as may be necessary or proper to carry out the purposes and intent
of this chapter and to enable it to exercise the powers and duties
conferred upon it by this chapter, not inconsistent with any statute
of this state, including particularly this chapter and Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code. For the performance of its duties, the
bureau has the power conferred by Sections 11180 to 11191,
inclusive, of the Government Code.

begin insert 19305. end insert   

Notice of any action of the licensing authority required
by this chapter to be given may be signed and given by the director
or an authorized employee of the department and may be made
personally or in the manner prescribed by Section 1013 of the
Code of Civil Procedure.

begin insert 19306. end insert   

(a) The bureau may convene an advisory committee
to advise the bureau and licensing authorities on the development
of standards and regulations pursuant to this chapter, including
best practices and guidelines to ensure qualified patients have
adequate access to medical cannabis and medical cannabis
products. The advisory committee members shall be determined
by the chief.

(b) The advisory committee members may include, but not be
limited to, representatives of the medical marijuana industry,
representatives of medical marijuana cultivators, appropriate
local and state agencies, appropriate local and state law
enforcement, physicians, environmental and public health experts,
and medical marijuana patient advocates.

begin insert 19307. end insert   

A licensing authority may make or cause to be made
such investigation as it deems necessary to carry out its duties
under this chapter.

begin insert 19308. end insert   

For any hearing held pursuant to this chapter, the
director, or a licensing authority, may delegate the power to hear
and decide to an administrative law judge. Any hearing before an
administrative law judge shall be pursuant to the procedures,
rules, and limitations prescribed in Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.

begin insert 19309. end insert   

In any hearing before a licensing authority pursuant
to this chapter, the licensing authority may pay any person
appearing as a witness at the hearing at the request of the licensing
authority pursuant to a subpoena, his or her actual, necessary,
and reasonable travel, food, and lodging expenses, not to exceed
the amount authorized for state employees.

begin insert 19310. end insert   

The department may on its own motion at any time
before a penalty assessment is placed into effect and without any
further proceedings, review the penalty, but such review shall be
limited to its reduction.

 

Article begin insert 3. end insert   Enforcement

 

begin insert 19311. end insert   

Grounds for disciplinary action include:

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

(b) Conduct that constitutes grounds for denial of licensure
pursuant to Chapter 3 (commencing with Section 490) of Division
1.5.

(c) Any other grounds contained in regulations adopted by a
licensing authority pursuant to this chapter.

(d) Failure to comply with any state law, except as provided for
in this chapter or other California law.

begin insert 19312. end insert   

Each licensing authority may suspend or revoke
licenses, after proper notice and hearing to the licensee, if the
licensee is found to have committed any of the acts or omissions
constituting grounds for disciplinary action. The disciplinary
proceedings under this chapter shall be conducted in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code, and the director of
each licensing authority shall have all the powers granted therein.

begin insert 19313. end insert   

Each licensing authority may take disciplinary action
against a licensee for any violation of this chapter when the
violation was committed by the licensee’s agent or employee while
acting on behalf of the licensee or engaged in commercial cannabis
activity.

begin insert 19313.5. end insert   

Upon suspension or revocation of a license, the
licensing authority shall inform the bureau. The bureau shall then
inform all other licensing authorities and the Department of Food
and Agriculture.

begin insert 19314. end insert   

All accusations against licensees shall be filed by the
licensing authority within five years after the performance of the
act or omission alleged as the ground for disciplinary action;
provided, however, that the foregoing provision shall not constitute
a defense to an accusation alleging fraud or misrepresentation as
a ground for disciplinary action. The cause for disciplinary action
in such case shall not be deemed to have accrued until discovery,
by the licensing authority, of the facts constituting the fraud or
misrepresentation, and, in such case, the accusation shall be filed
within five years after such discovery.

begin insert 19315. end insert   

(a) Nothing in this chapter shall be interpreted to
supersede or limit existing local authority for law enforcement
activity, enforcement of local zoning requirements or local
ordinances, or enforcement of local permit or licensing
requirements.

(b) Nothing in this chapter shall be interpreted to require the
Department of Consumer Affairs to undertake local law
enforcement responsibilities, enforce local zoning requirements,
or enforce local licensing requirements.

(c) Nothing in this chapter shall be interpreted to supersede or
limit state agencies from exercising their existing enforcement
authority under the Fish and Game Code, the Water Code, the
Food and Agricultural Code, or the Health and Safety Code.

begin insert 19316. end insert   

(a) 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. Any standards, requirements, and regulations regarding
health and safety, testing, security, and worker protections
established by the state shall be the minimum standards for all
licensees statewide.

(b) 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 regulations promulgated
by the bureau or any licensing authority, if delegated by the state.
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.

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

begin insert 19317. end insert   

(a) The actions of a licensee, its employees, and its
agents that are (1) permitted pursuant to both a state license and
a license or permit issued by the local jurisdiction following the
requirements of the applicable local ordinances, and (2) 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, allows his or
her property to be used by a licensee, its employees, and its agents,
as permitted pursuant to both a state license and a local license
or permit 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.

begin insert 19318. end insert   

(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 court may order the destruction of medical
cannabis associated with that violation in accordance with Section
11479 of the Health and Safety Code. Each day of operation shall
constitute a separate violation of this section. All civil penalties
imposed and collected pursuant to this section by a licensing
authority shall be deposited into the Medical Cannabis Fines and
Penalties Account established pursuant to Section 19351.

(b) If an action for civil penalties is brought against a licensee
pursuant to this chapter by the Attorney General on behalf of the
people, the penalty collected shall be deposited into the Medical
Cannabis Fines and Penalties Account established pursuant to
Section 19351. 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 or city and county in which
the judgment was entered. 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 in which the judgment is entered.

(c) Notwithstanding subdivision (a), criminal penalties shall
continue to apply to an unlicensed person 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.

 

Article begin insert 4. end insert   Licensing

 

begin insert 19320. end insert   

(a) Licensing authorities administering this chapter
may issue state licenses only to qualified applicants engaging in
commercial cannabis activity pursuant to this chapter. Upon the
date of implementation of regulations by the licensing authority,
no person shall engage in commercial cannabis activity without
possessing both a state license and a local permit, license, or other
authorization. A licensee 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 ordinance.

(b) Revocation of a local license, permit, or other authorization
shall terminate the ability of a medical cannabis business to
operate within that local jurisdiction until the local jurisdiction
reinstates or reissues the local license, permit, or other required
authorization. Local authorities shall notify the bureau upon
revocation of a local license. The bureau shall inform relevant
licensing authorities.

(c) Revocation of a state license shall terminate the ability of a
medical cannabis licensee to operate within California until the
licensing authority reinstates or reissues the state license. Each
licensee shall obtain a separate license for each location where it
engages in commercial medical cannabis activity. However,
transporters only need to obtain licenses for each physical location
where the licensee conducts business while not in transport, or
any equipment that is not currently transporting medical cannabis
or medical cannabis products, permanently resides.

(d) In addition to the provisions of this chapter, local
jurisdictions retain the power to assess fees and taxes, as
applicable, on facilities that are licensed pursuant to this chapter
and the business activities of those licensees.

(e) Nothing in this chapter shall be construed to supersede or
limit state agencies, including the State Water Resources Control
Board and Department of Fish and Wildlife, from establishing
fees to support their medical cannabis regulatory programs.

begin insert 19321. end insert   

(a) The Department of Consumer Affairs, the
Department of Food and Agriculture, and the State Department
of Public Health shall promulgate regulations for implementation
of their respective responsibilities in the administration of this
chapter.

(b) A license issued pursuant to this section shall be valid for
12 months from the date of issuance. The license shall be renewed
annually. Each licensing authority shall establish procedures for
the renewal of a license.

(c) Notwithstanding subdivision (a) of Section 19320, a facility
or entity that is operating in compliance with local zoning
ordinances and other state and local requirements on or before
January 1, 2018, may continue its operations until its application
for licensure is approved or denied pursuant to this chapter. In
issuing licenses, the licensing authority shall prioritize any facility
or entity that can demonstrate to the authority’s satisfaction that
it was in operation and in good standing with the local jurisdiction
by January 1, 2016.

(d) Issuance of a state license or a determination of compliance
with local law by the licensing authority shall in no way limit the
ability of the City of Los Angeles to prosecute any person or entity
for a violation of, or otherwise enforce, Proposition D, approved
by the voters of the City of Los Angeles on the May 21, 2013, ballot
for the city, or the city’s zoning laws. Nor may issuance of a license
or determination of compliance with local law by the licensing
authority be deemed to establish, or be relied upon, in determining
satisfaction with the immunity requirements of Proposition D or
local zoning law, in court or in any other context or forum.

 

Article begin insert 5. end insert   Medical Marijuana Regulation

 

begin insert 19326. end insert   

(a) A person other than a licensed transporter shall
not transport medical cannabis or medical cannabis products from
one licensee to another licensee, unless otherwise specified in this
chapter.

(b) All licensees holding cultivation or manufacturing licenses
shall send all medical cannabis and medical cannabis products
cultivated or manufactured to a distributor, as defined in Section
19300.5, 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. Those licensees holding a Type 10A
license in addition to a cultivation license or a manufacturing
license shall send all medical cannabis and medical cannabis
products to a Type 11 licensee for presale inspection and for a
batch testing by a Type 8 licensee prior to dispensing any product.
The licensing authority shall fine a licensee who violates this
subdivision in an amount determined by the licensing authority to
be reasonable.

(c) (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 ensure a random
sample of the medical cannabis or medical cannabis product is
tested by a Type 8 licensee prior to distributing the batch of
medical cannabis or medical cannabis products.

(2) Upon issuance of a certificate of analysis by the Type 8
licensee that the product is fit for manufacturing or retail, all
medical cannabis and medical cannabis products shall undergo
a quality assurance review by the Type 11 licensee prior to
distribution to ensure the quantity and content of the medical
cannabis or medical cannabis product, and for tracking and
taxation purposes by the state. Licensed cultivators and
manufacturers shall package or seal all medical cannabis and
medical cannabis products in tamper-evident packaging and use
a unique identifier, as prescribed by the Department of Food and
Agriculture, for the purpose of identifying and tracking medical
cannabis or medical cannabis products. Medical cannabis and
medical cannabis products shall be labeled as required by Section
19347. All packaging and sealing shall be completed prior to
medical cannabis or medical cannabis products being transported
or delivered to a licensee, qualified patient, or caregiver.

(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.

(d) Medical cannabis and medical cannabis products shall be
tested by a registered testing laboratory, prior to retail sale or
dispensing, as follows:

(1) Medical cannabis from dried flower shall, at a minimum,
be tested for concentration, pesticides, mold, and other
contaminants.

(2) Medical cannabis extracts shall, at a minimum, be tested
for concentration 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 State Department of
Public Health.

(e) All commercial cannabis activity shall be conducted between
licensees, when these are available.

begin insert 19327. end insert   

(a) A licensee shall keep accurate records of
commercial cannabis activity.

(b) All records related to commercial cannabis activity as
defined by the licensing authorities shall be maintained for a
minimum of seven years.

(c) The bureau may examine the books and records of a licensee
and inspect the premises of a licensee as the licensing authority
or a 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 or at any other
reasonable time.

(d) Licensees shall keep records identified by the licensing
authorities on the premises of the location licensed. The licensing
authorities may make any examination of the records of any
licensee. Licensees shall also provide and deliver copies of
documents to the licensing agency upon request.

(e) A licensee or its agent, or employee, that refuses, impedes,
obstructs, or interferes with an inspection of the premises or
records of the licensee pursuant to this section has engaged in a
violation of this chapter.

(f) If a licensee or an employee of a licensee fails to maintain
or provide the records required pursuant to this section, the
licensee shall be subject to a citation and fine of thirty thousand
dollars ($30,000) per individual violation.

begin insert 19328. end insert   

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

(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either
a Type 6 or 7 state license.

(2) Type 6 or 7 licensees, or a combination thereof, may also
hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license.

(3) Type 6 or 7 licensees, or a combination thereof, may also
hold a Type 10A state license.

(4) Type 10A licensees may also hold either a Type 6 or 7 state
license, or a combination thereof.

(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
thereof, may also hold a Type 10A state license.

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

(7) Type 11 licensees shall apply for a Type 12 state license,
but shall not apply for any other type of state license.

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

(9) A Type 10A licensee may apply for a Type 6 or 7 state license
and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof
if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination of
licenses thereof, no more than four acres of total canopy size of
cultivation by the licensee is occurring throughout the state during
the period that the respective licenses are valid. All cultivation
pursuant to this section shall comply with local ordinances. This
paragraph shall become inoperative on January 1, 2026.

(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 with or used in any other license
category.

(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:

(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.

(B) The business has been in full compliance with all applicable
local ordinances at all times prior to licensure.

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

(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.

(d) This section shall remain in effect only until January 1, 2026,
and as of that date is repealed.

begin insert 19329. end insert   

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

begin insert 19330. end insert   

This chapter and Article 2 (commencing with Section
11357) and Article 2.5 (commencing with Section 11362.7) of
Chapter 6 of Division 10 of the Health and Safety Code 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 begin insert 7. end insert   Licensed Distributors, Dispensaries, and Transporters

 

begin insert 19334. end insert   

(a) State licenses to be issued by the Department of
Consumer Affairs are as follows:

(1) “Dispensary,” as defined in this chapter. This license shall
allow for delivery pursuant to Section 19340.

(2) “Distributor,” for the distribution of medical cannabis and
medical cannabis products from manufacturer to dispensary. A
Type 11 licensee shall hold a Type 12, or transporter, license and
register each location where product is stored for the purposes of
distribution. A Type 11 licensee shall not hold a license in a
cultivation, manufacturing, dispensing, or testing license category
and shall not own, or have an ownership interest in, a facility
licensed in those categories other than a security interest, lien, or
encumbrance on property that is used by a licensee. A Type 11
licensee shall be bonded and insured at a minimum level
established by the licensing authority.

(3) “Transport,” for transporters of medical cannabis or
medical cannabis products between licensees. A Type 12 licensee
shall be bonded and insured at a minimum level established by
the licensing authority.

(4) “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.

(b) The bureau shall establish minimum security requirements
for the commercial transportation and delivery of medical cannabis
and products.

(c) A licensed dispensary shall implement sufficient security
measures to both deter and prevent unauthorized entrance into
areas containing medical cannabis or medical cannabis products
and theft of medical cannabis or medical cannabis products at the
dispensary. These security measures shall include, but not be
limited to, all of the following:

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

(2) Establishing limited access areas accessible only to
authorized dispensary personnel.

(3) Storing all finished medical cannabis and medical cannabis
products in a secured and locked room, safe, or vault, and in a
manner as to prevent diversion, theft, and loss, except for limited
amounts of cannabis used for display purposes, samples, or
immediate sale.

(d) A dispensary shall notify the licensing authority and the
appropriate law enforcement authorities within 24 hours after
discovering any of the following:

(1) Significant discrepancies identified during inventory. The
level of significance shall be determined by the bureau.

(2) Diversion, theft, loss, or any criminal activity involving the
dispensary or any agent or employee of the dispensary.

(3) The loss or unauthorized alteration of records related to
cannabis, registered qualifying patients, primary caregivers, or
dispensary employees or agents.

(4) Any other breach of security.

 

Article begin insert 9. end insert   Delivery

 

begin insert 19340. end insert   

(a) Deliveries, as defined in this chapter, can only be
made by a dispensary and in a city, county, or city and county that
does not explicitly prohibit it by local ordinance.

(b) Upon approval of the licensing authority, a licensed
dispensary that delivers medical cannabis or medical cannabis
products shall comply with both of the following:

(1) The city, county, or city and county in which the licensed
dispensary is located, and in which each delivery is made, do not
explicitly by ordinance prohibit delivery, as defined in Section
19300.5.

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

(c) A county shall have the authority to impose a tax, pursuant
to Article 11 (commencing with Section 19348), on each delivery
transaction completed by a licensee.

(d) During delivery, the licensee shall maintain a physical copy
of the delivery request and shall make it available upon request
of the licensing authority and law enforcement officers. The
delivery request documentation shall comply with state and federal
law regarding the protection of confidential medical information.

(e) The qualified patient or primary caregiver requesting the
delivery shall maintain a copy of the delivery request and shall
make it available, upon request, to the licensing authority and law
enforcement officers.

(f) A local jurisdiction shall not prevent carriage of medical
cannabis or medical cannabis products on public roads by a
licensee acting in compliance with this chapter.

 

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

 

begin insert 19341. end insert   

The State Department of Public Health shall promulgate
regulations governing the licensing of cannabis manufacturers
and testing laboratories. Licenses to be issued are as follows:

(a) “Manufacturing level 1,” for manufacturing sites that
produce medical cannabis products using nonvolatile solvents.

(b) “Manufacturing level 2,” for manufacturing sites that
produce medical cannabis products using volatile solvents. The
State Department of Public Health shall limit the number of
licenses of this type.

(c) “Testing,” for testing of medical cannabis and medical
cannabis products. Testing licensees shall have their facilities
licensed according to regulations set forth by the division. A testing
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 insert 19342. 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.

begin insert 19343. 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 State Department of Public Health.

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

(c) Follows the methodologies, ranges, and parameters that are
contained in the scope of the accreditation for testing medical
cannabis or medical cannabis products. The testing lab shall also
comply with any other requirements specified by the State
Department of Public Health.

(d) Notifies the State Department of Public Health within one
business day after the receipt of notice of any kind that its
accreditation has been denied, suspended, or revoked.

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

begin insert 19344. 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 State Department of
Public Health.

(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 State
Department of Public Health. 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 State
Department of Public Health.

begin insert 19345. end insert   

(a) Except as provided in this chapter, a licensed
testing laboratory shall not acquire or receive medical cannabis
or medical cannabis products except from a licensed facility in
accordance with this chapter, and shall not distribute, sell, deliver,
transfer, transport, or dispense medical cannabis or medical
cannabis products, 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.

(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.

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

(d) The State Department of Public Health shall establish a
licensing fee, and laboratories shall pay a fee to be licensed.
Licensing fees shall not exceed the reasonable regulatory cost of
the licensing activities.

begin insert 19347. end insert   

(a) Prior to delivery or sale at a dispensary, 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 “SCHEDULE I CONTROLLED
SUBSTANCE.”

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

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

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

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

(G) For packages containing only dried flower, the net weight
of medical cannabis in the package.

(H) A warning if nuts or other known allergens are used.

(I) 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.

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

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

(L) Any other requirement set by the bureau.

(M) Information associated with the unique identifier issued by
the Department of Food and Agriculture pursuant to Section
11362.777 of the Health and Safety Code.

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

 

Article begin insert 14. end insert   Reporting

 

begin insert 19353. end insert   

Beginning on March 1, 2023, and on or before March
1 of each following year, each licensing authority shall prepare
and submit to the Legislature an annual report on the authority’s
activities and post the report on the authority’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 licensing
authority 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 bureau.

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

begin insert 19354. end insert   

The bureau shall contract 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, to develop a study that identifies the impact that
cannabis has on motor skills.

 

Article begin insert 15. end insert   Privacy

 

begin insert 19355. end insert   

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

(b) Information identifying the names of patients, their medical
conditions, or the names of their primary caregivers received and
contained in records kept by the bureau for the purposes of
administering this chapter shall be maintained in accordance with
Chapter 1 (commencing with Section 123100) of Part 1 of Division
106 of the Health and Safety Code, Part 2.6 (commencing with
Section 56) of Division 1 of the Civil Code, and other state and
federal laws relating to confidential patient information.

(c) Nothing in this section precludes the following:

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

(2) Notifications from the bureau or any 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.

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

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 9147.7 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

9147.7.  

(a) For the purpose of this section, “eligible agency”
means any agency, authority, board, bureau, commission,
conservancy, council, department, division, or office of state
government, however denominated, excluding an agency that is
constitutionally created or an agency related to postsecondary
education, for which a date for repeal has been established by
statute on or after January 1, 2011.

(b) The Joint Sunset Review Committee is hereby created to
identify and eliminate waste, duplication, and inefficiency in
government agencies. The purpose of the committee is to conduct
a comprehensive analysis over 15 years, and on a periodic basis
thereafter, of every eligible agency to determine if the agency is
still necessary and cost effective.

(c) Each eligible agency scheduled for repeal shall submit to
the committee, on or before December 1 prior to the year it is set
to be repealed, a complete agency report covering the entire period
since last reviewed, including, but not limited to, the following:

(1) The purpose and necessity of the agency.

(2) A description of the agency budget, priorities, and job
descriptions of employees of the agency.

(3) Any programs and projects under the direction of the agency.

(4) Measures of the success or failures of the agency and
justifications for the metrics used to evaluate successes and failures.

(5) Any recommendations of the agency for changes or
reorganization in order to better fulfill its purpose.

(d) The committee shall take public testimony and evaluate the
eligible agency prior to the date the agency is scheduled to be
repealed. An eligible agency shall be eliminated unless the
Legislature enacts a law to extend, consolidate, or reorganize the
eligible agency. No eligible agency shall be extended in perpetuity
unless specifically exempted from the provisions of this section.
The committee may recommend that the Legislature extend the
statutory sunset date for no more than one year to allow the
committee more time to evaluate the eligible agency.

(e) The committee shall be comprised of 10 members of the
Legislature. The Senate Committee on Rules shall appoint five
members of the Senate to the committee, not more than three of
whom shall be members of the same political party. The Speaker
of the Assembly shall appoint five members of the Assembly to
the committee, not more than three of whom shall be members of
the same political party. Members shall be appointed within 15
days after the commencement of the regular session. Each member
of the committee who is appointed by the Senate Committee on
Rules or the Speaker of the Assembly shall serve during that
committee member’s term of office or until that committee member
no longer is a Member of the Senate or the Assembly, whichever
is applicable. A vacancy on the committee shall be filled in the
same manner as the original appointment. Three Assembly
Members and three Senators who are members of the committee
shall constitute a quorum for the conduct of committee business.
Members of the committee shall receive no compensation for their
work with the committee.

(f) The committee shall meet not later than 30 days after the
first day of the regular session to choose a chairperson and to
establish the schedule for eligible agency review provided for in
the statutes governing the eligible agencies. The chairperson of
the committee shall alternate every two years between a Member
of the Senate and a Member of the Assembly, and the vice
chairperson of the committee shall be a member of the opposite
house as the chairperson.

(g) This section shall not be construed to change the existing
jurisdiction of the budget or policy committees of the Legislature.

begin insert

(h) This section shall not apply to the Bureau of Medical
Marijuana Regulation.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

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

11362.775.  

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

begin insert

(b) This section shall remain in effect only until one year after
the Bureau of Medical Marijuana Regulation posts a notice on its
Internet Web site that the licensing authorities have commenced
issuing licenses pursuant to the Medical Marijuana Regulation
and Safety Act (Chapter 3.5 (commencing with Section 19300) of
Division 8 of the Business and Professions Code), and is repealed
upon issuance of licenses.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

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

begin insert

begin insert 147.5. end insert   

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

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

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 31020 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 31020. end insert   

The board, in consultation with the Department of Food
and Agriculture, shall adopt a system for reporting the movement
of commercial cannabis and cannabis products throughout the
distribution chain. The system shall not be duplicative of the
electronic database administered by the Department of Food and
Agriculture specified in Section 19335 of the Business and
Professions Code. The system shall also employ secure packaging
and be capable of providing information to the board. This system
shall capture, at a minimum, all of the following:

(a) The amount of tax due by the designated entity.

(b) The name, address, and license number of the designated
entity that remitted the tax.

(c) The name, address, and license number of the succeeding
entity receiving the product.

(d) The transaction date.

(e) Any other information deemed necessary by the board for
the taxation and regulation of marijuana and marijuana products.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert begin insert

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

end insert

begin insert

begin insert SEC. 10. end insert   

end insert begin insert

The Legislature finds and declares that Section 4 of
this act, which adds Section 19355 to the Business and Professions
Code, thereby imposes a limitation on the public’s right of access
to the meetings of public bodies or the writings of public officials
and agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:

end insert begin insert

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

end insert

begin insert

begin insert SEC. 11. end insert   

end insert begin insert

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

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert This act shall become operative only if Senate Bill
643 and Assembly Bill 243 of the 2015 end insert begin insert -16 Regular Session are
also enacted and become operative. end insert

begin delete

SECTION 1.  

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

(4) 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.

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

(6) 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).

end delete

begin delete

SEC. 2.  

This measure shall become operative only if Senate
Bill 643 of the 2015-16 Regular Session is enacted and becomes
operative.

end delete