BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 266


                                                                    Page  1





          Date of Hearing:  April 28, 2015


                   ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS


                                Susan Bonilla, Chair


          AB 266   
          (Cooley and Lackey) - As Amended April 14, 2015


          SUBJECT:  Medical marijuana. 


          SUMMARY:  Establishes a licensing and regulatory framework for  
          the cultivation, processing, transportation, testing,  
          recommendation and sale of medical marijuana to be administered  
          by the Bureau of Medical Marijuana Regulation (Bureau) within  
          the Department of Consumer Affairs (DCA). 


          EXISTING LAW: 


          1)Recognizes the authority of cities and counties to make and  
            enforce, within their borders, all local, police, sanitary,  
            and other ordinances and regulations not in conflict with  
            general interest laws.  (Cal. Const. Article XI sec. 7)

          2)Prohibits the possession, possession with intent to sell,  
            cultivation, sale, transportation, importation, or furnishing  
            of marijuana, except as otherwise provided by law.  (Health  
            and Safety Code (HSC) Sections 11357, 11358, 11359, and 11360)











                                                                     AB 266


                                                                    Page  2





          3)Prohibits prosecution of a patient or a patient's primary  
            caregiver, under the Compassionate Use Act of 1996 (CUA), an  
            initiative measure, for possessing or cultivating marijuana  
            for personal medical purposes of the patient upon the written  
            or oral recommendation or approval of a physician.  (HSC  
            Section 11362.5)

          4)Licenses and regulates physicians and surgeons, including  
            osteopathic physicians, under the Medical Practice Act (Act)  
            by the Medical Board of California (MBC) within the DCA.   
            (Business and Professions Code (BPC) Section 2000 et seq.)  
           
          5)Defines "attending physician" as an individual who possesses a  
            license in good standing to practice medicine or osteopathy  
            issued by the Medical Board of California (MBC) or the  
            Osteopathic Medical Board of California (OMB) and who has  
            taken responsibility for an aspect of the medical care,  
            treatment, diagnosis, counseling, or referral of a patient and  
            who has conducted a medical examination of that patient before  
            recording in the patient's medical record the physician's  
            assessment of whether the patient has a serious medical  
            condition and whether the medical use of marijuana is  
            appropriate.  (HSC Section 11362.7(a))

          6)Defines "primary caregiver," for purposes of the CUA, as the  
            individual designated by a patient who has consistently  
            assumed responsibility for the housing, health, or safety of  
            that person.  (HSC Section 11362.7(d))

          7)Requires the California Department of Public Health to  
            establish and maintain a voluntary Medical Marijuana Program  
            for qualified patients to apply for identification cards, and  
            county health departments to issue identification cards to  
            qualified patients and their caregivers.  (HSC Section 11362.7  
            et seq.)











                                                                     AB 266


                                                                    Page  3





          8)Provides that qualified patients, persons with valid  
            identification cards, and their designated primary caregivers  
            who associate in order to collectively or cooperatively to  
            cultivate marijuana, are not subject to criminal liability  
            solely on that basis.  (HSC Section 11362.775)

          THIS BILL:  


          Administration Provisions 


          1)Creates the Bureau, within DCA, to be supervised and  
            controlled by the Bureau Chief, and vests in the Chief the  
            duty of enforcing and administering these provisions. 



          2)Defines the following terms: 


             a)   "Certified testing laboratory" means a laboratory that  
               is certified by the Bureau to perform random sample testing  
               of medical marijuana pursuant to the certification  
               standards for these facilities promulgated by the Bureau;  


             b)   "Licensed cultivation site" means a facility that  
               plants, grows, cultivates, harvests, dries, or processes  
               medical marijuana, or that does all or any combination of  
               those activities, and that is issued a conditional license  
               pursuant to these provisions;  


             c)   "Licensed dispensing facility" means a dispensary or  
               other facility that provides medical marijuana, medical  










                                                                     AB 266


                                                                    Page  4





               marijuana products, or devices for the use of medical  
               marijuana or medical marijuana products, either  
               individually or in any combination, that is issued a  
               conditional license pursuant to these provisions;  


             d)   "Licensed manufacturer" means a person who extracts,  
               prepares, derives, produces, compounds, or repackages  
               medical marijuana or medical marijuana products into  
               consumable and non-consumable forms, or that does all or  
               any combination of those activities, and that is issued a  
               conditional license pursuant to these provisions; 


             e)   "Licensed transporter" means an individual or entity  
               issued a conditional license by the Bureau to transport  
               medical marijuana to and from facilities that have been  
               issued conditional licenses pursuant to these provisions. 


          3)Requires DCA to advance funds as a loan for the establishment  
            and support of the Bureau, to be repaid by the initial  
            proceeds from fees collected pursuant to these provisions. 


          4)Authorizes the Bureau to issue conditional licenses for the  
            cultivation, manufacture, transportation, storage,  
            distribution and sale of medical marijuana, to collect fees in  
            connection with these actions, and to create additional  
            licenses.  


          5)Authorizes the Bureau to establish rules or regulations  
            necessary to carry out these provisions, and provides that  
            these rules and regulations shall not limit the authority of a  
            city, county, or city and county.










                                                                     AB 266


                                                                    Page  5







          6)Authorizes the Bureau to do all of the following: 


             a)   Issue conditional licenses to persons for the  
               cultivation, manufacture, transportation, storage,  
               distribution, provision, donation, testing, and sale of  
               medical marijuana;


             b)   Establish standards for the cultivation, manufacturing,  
               transportation, storage, distribution, provision, donation,  
               and sale of medical marijuana and medical marijuana  
               products.  


             c)   Consult with other state or local agencies, departments,  
               representatives of the medical marijuana community, or  
               public or private entities for the purposes of establishing  
               statewide standards and regulations.  


             d)   Certify laboratories to perform testing of medical  
               marijuana.  


          7)On or before July 1, 2017, requires the Bureau to promulgate  
            regulations for implementation and enforcement of these  
            provisions, including all of the following:  


             a)   Procedures for the issuance, renewal, suspension,  
               denial, and revocation of conditional licenses, and for the  
               appeal of a denial, suspension, or revocation of those  
               licenses, and a time period to approve or deny a  










                                                                     AB 266


                                                                    Page  6





               conditional license.  


             b)   Application, licensing, and renewal fees. The bill also  
               requires: 


               i)     The fees to fund the reasonable costs of  
                 administration, and costs incurred by the Bureau, the  
                 Department of Justice, or local law enforcement and other  
                 public safety entities, for enforcement of these  
                 provisions; and 


               ii)    A licensed cultivation site to be assessed a  
                 sufficient amount to cover the reasonable regulatory  
                 costs to the state of enforcing the environmental impact  
                 provisions relating to these facilities, which shall be  
                 paid in addition to any other fees charged by the Bureau  
                 or local agency, to be distributed proportionally to the  
                 following agencies responsible for enforcing the  
                 environmental impact of these sites: the State Water  
                 Board, the Department of Fish and Wildlife, the  
                 Department of Forestry and Fire Protection, the  
                 Department of Pesticide Regulation and the Department of  
                 Food and Agriculture.  


               iii)   The Bureau to establish a separate schedule of  
                 licensing fees for non-profit entities if the entity's  
                 non-profit status is verified by an audit.  


               iv)    The Medical Marijuana Regulation Fund, to be  
                 continuously appropriated, within the State Treasury, and  
                 all fees collected to be deposited into the fund. 










                                                                     AB 266


                                                                    Page  7







               v)     The Bureau to administer a grant program to allocate  
                 moneys from the fund to state and local entities for the  
                 purpose of assisting with medical marijuana regulation  
                 and enforcement.  


               vi)    The Special Account for Environmental Enforcement to  
                 be established, within the fund, to be continuously  
                 appropriated for distribution to the entities used to  
                 enforce the environmental regulation of licensed  
                 cultivation sites.  


               vii)   All moneys collected as a result of penalties to be  
                 deposited into the General Fund.  


             c)   Qualifications for licensees.  


          8)Requires the Bureau to keep a complete record of all  
            facilities issued a conditional license and to provide summary  
            information on licensees, upon request. 


          9)Requires the Bureau to provide state and local law  
            enforcement, upon their request, with 24-hour access to  
            information to verify and track transportation and inventories  
            of licensees.  


          10)Eliminates the ability of primary caregivers to organize  
            themselves as cooperatives or collectives of caregivers, and  
            exempts from licensure requirements:










                                                                     AB 266


                                                                    Page  8







             a)   Patients who cultivate, possess, store, manufacture, or  
               transport marijuana exclusively for his or her personal use  
               and who do not sell, distribute, donate, or provide  
               marijuana to any other person or entity; and 


             b)   Primary caregivers who cultivate, possess, store,  
               manufacture, or transport marijuana exclusively for the  
               personal medical purposes to no more than five specified  
               qualified patients. 


          11)Except as specified under the Compassionate Use Act of 1996  
            and the Medical Marijuana Program, prohibits persons from  
            selling or providing medical marijuana, growing medical  
            marijuana, or manufacturing medical marijuana or medical  
            marijuana products without a license, and prohibits the  
            transport of medical marijuana from one licensed facility to  
            another without using a licensed transporter. 


          12)Prohibits a licensed dispensing facility from acquiring,  
            cultivating, processing, possessing, storing, manufacturing,  
            distributing, selling, delivering, transferring, transporting,  
            or dispensing medical marijuana plants or medical marijuana  
            products except through a licensed cultivation site or a  
            licensed manufacturer. 


          Licensing Provisions 


          13)Exempts from licensure: 











                                                                     AB 266


                                                                    Page  9






             a)   Patients who cultivate, possess, store, manufacture, or  
               transport marijuana exclusively for his or her personal  
               medical use, and does not sell, distribute, donate, or  
               provide medical marijuana to any other person or entity. 


             b)   A primary caregiver who cultivates, possesses, stores,  
               manufactures, transports, or provides marijuana exclusively  
               for the personal medical purposes to no more than five  
               specified qualified patients for whom he or she is the  
               primary caregiver, as specified. 


          14)Beginning July 1, 2017: 


             a)   Requires the Bureau to issue conditional licenses for  
               all authorized activity, including cultivation, storage,  
               transport, and dispensing of medical marijuana.  


             b)   Provides that a license issued pursuant to these  
               provisions is subject to compliance with all local  
               ordinances and regulations determined to be applicable by  
               the local government of the jurisdiction in which the  
               licensee operates.  


             c)   Prohibits a licensed facility from commencing activity  
               under the authority of a conditional license until the  
               applicant has obtained, in addition to the conditional  
               license, a license or permit from the local jurisdiction in  
               which he or she proposes to operate, following the  
               requirements of the applicable local license.  











                                                                     AB 266


                                                                    Page  10






          15)Requires an applicant for a conditional license to: 


             a)   Pay required fees, and register with and provide  
               specified information to the Bureau, including the address  
               or GPS coordinates of the licensed site, and, in the case  
               of a dispensary, the name and address of each licensed  
               cultivation site and manufacturer that will obtain medical  
               marijuana or medical marijuana products; 


             b)   Provide detailed operating procedures, including  
               procedures for facility and operational security,  
               prevention of diversion, employee screening, storage of  
               medical marijuana, personnel policies, and recordkeeping  
               procedures; 


             c)   Provide fingerprint images, including for each person  
               participating in the direction, control, or management of,  
               or having a financial interest in, the proposed facility; 


             d)   Identify all local ordinances applicable to the  
               operation of the proposed facility and provide evidence  
               that the proposed facility is a permitted use at that  
               location under local zoning and other ordinances; and  


             e)   Provide a statement, signed under penalty of perjury,  
               that the application information is true.  


          16)Requires each location and each discrete use of a single  
            location to require a conditional license, and provides that  










                                                                     AB 266


                                                                    Page  11





            each application for a conditional license is separate and  
            distinct, and prohibits the following:


             a)   A single licensee holding a cultivation site license and  
               a dispensary license, except as specified.


             b)   A transporter or certified testing laboratory from  
               holding any other license, or the owner of a testing  
               laboratory from holding any other license or holding  
               ownership interest in any other licensee.   


          17)Requires a conditional license to be denied, or suspended or  
            revoked, for a past felony conviction for the possession for  
            sale, sale, manufacture, transportation, or cultivation of a  
            controlled substance, a felony criminal conviction for drug  
            trafficking or for embezzlement, or involving fraud or deceit,  
            or any violent or serious felony conviction. 


          18)Authorizes the Bureau to deny, suspend, or revoke a  
            conditional license if the licensee:


             a)   Makes or authorizes an untrue or misleading statement,  
               or a statement that should be known to be untrue or  
               misleading; 


             b)   Engages in any other conduct constituting fraud or gross  
               negligence or engages in conduct that constitute grounds  
               for denial of a license; or,












                                                                     AB 266


                                                                    Page  12





             c)   Fails to comply with these provisions or violates any  
               applicable local ordinance, as specified. 


          19)Requires a conditional license to be denied if the Bureau  
            determines the applicant:


             a)   Fails to meet any requirements of these provisions, or  
               any applicable local ordinance or regulation.  If a local  
               government adopts an ordinance or resolution authorizing  
               medical marijuana to be cultivated, manufactured, stored,  
               distributed, or sold within its jurisdiction, it shall  
               submit to the Bureau documentation detailing their renewal  
               requirements. 


             b)   Has knowingly answered a question or request for  
               information falsely, failed to provide requested  
               information, or is unable to establish he or she has been a  
               resident of the state for 12 months.


             c)   Has been sanctioned by the Bureau or a local government  
               for medical marijuana activities or has had a license  
               revoked in the past five years, or will engage in medical  
               marijuana activities that will violate any applicable local  
               law or ordinance. 


          20)Makes a conditional license subject to the restrictions of  
            the local jurisdiction in which it operates or proposes to  
            operate.  


          21)Authorizes the Bureau to limit the number of conditional  










                                                                     AB 266


                                                                    Page  13





            licenses issued pursuant to this part upon a finding that the  
            otherwise unrestricted issuance of conditional licenses is  
            dangerous to the public health and safety.  


          Health, Safety, and Environmental Standards 


          22)On or before July 1, 2017, requires the Bureau to promulgate  
            regulations for minimum statewide health and safety standards  
            and quality assurance standards for medical marijuana  
            licensing activities, including the following:  


             a)   Requirements to ensure that all licensees and certified  
               testing laboratories conform with standards equivalent to  
               state statutory environmental, agricultural, consumer  
               protection, and food and product safety requirements;  
               provides that these standards shall be in addition to, and  
               not limited to, any other state and local requirement; and  
               provides that these standards, at a minimum, do the  
               following: 



               i)     Prescribes sanitation standards consistent with the  
                 California Retail Food Code for food preparation,  
                 storage, handling, and sale of edible medical marijuana  
                 products, and requires facilities in which these products  
                 are prepared to meet applicable building, health, and  
                 safety standards;



               ii)    Requires that edible medical marijuana products  
                 produced, distributed, provided, donated, or sold by  










                                                                     AB 266


                                                                    Page  14





                 licensees shall be limited to non-potentially hazardous  
                 food and that facilities in which these products are  
                 prepared shall be constructed in accordance with  
                 applicable building and health and safety standards, as  
                 specified; 



               iii)   Provides that weighing or measuring devices used in  
                 connection with the sale or distribution of medical  
                 marijuana to meet weights and measurements standards; 



               iv)    Requires the application of pesticides, in  
                 connection with indoor or outdoor cultivation of medical  
                 marijuana, to meet pest control operation standards under  
                 the Food and Agricultural Code;



               v)     Requires that indoor and outdoor marijuana  
                 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; and,



               vi)    Develops procedures to ensure that testing of  
                 marijuana occurs prior to delivery and requires the  
                 destruction of harvested batches whose testing samples  
                 indicate non-compliance with health and safety standards,  
                 except as specified. 












                                                                     AB 266


                                                                    Page  15






          23)Requires the State Department of Public Health to promulgate  
            standards for certification of testing laboratories to perform  
            random sample testing of all medical marijuana products,  
            including standards for onsite testing, as specified, which  
            shall apply to all entities engaged in the testing of medical  
            marijuana pursuant to these provisions.  


          24)Requires medical marijuana and medical marijuana products to  
            be tested by a certified testing laboratory.  


          25)Requires a licensed facility to contract with certified  
            testing laboratories for regular, random sample testing of  
            representative samples, of all medical marijuana cultivated or  
            intended for sale or distribution, and to bear the cost of  
            that testing. 


          26)Requires facilities to maintain records of testing reports  
            and to provide those results upon requests. 


          27)On or before July 1, 2017, requires the Bureau to establish  
            quality assurance protocols to ensure uniform testing  
            standards for all medical marijuana sold, cultivated, or  
            manufactured by facilities issued a conditional license and  
            develop, in consultation with outside entities at its  
            discretion, a list of certified testing laboratories that can  
            perform uniform testing in compliance with this article and to  
            post that list on its website.


          28)Requires quality assurance protocols between all licensees to  
            guarantee safe and reliable medicinal marijuana delivery to  










                                                                     AB 266


                                                                    Page  16





            all patients, which shall include the following: 


             a)   Safety testing of all medical marijuana, prior to  
               packaging, for sale and patient exposure, to identify and  
                    eliminate microbiological contaminants and chemical  
               residue; 


             b)   Labeling of all medical marijuana products that include,  
               at a minimum: a list of all pharmacologically active  
               ingredients, including tetrahydrocannabinol (THC) and  
               cannabidiol (CBD) content and the recommended dosage. 


          29)Provides that edible medical marijuana products are deemed to  
            be unadulterated foods, and must comply with the health and  
            safety standards for prepared foods, as specified. 


          30)Requires edible medical marijuana products to comply with  
            maximum potency standards for THC and THC concentrates set  
            forth in the Bureau's regulations and to meet certain labeling  
            and packaging requirements, as specified.


          Transportation and Security Provisions


          31)Requires a licensed transporter to only ship to facilities  
            issued a conditional license and only in response to a request  
            for a specific quantity and variety from those facilities. 


          32)Requires a licensed transporter, prior to transporting any  
            medical marijuana product, to complete a shipping manifest as  










                                                                     AB 266


                                                                    Page  17





            prescribed by the Bureau and to securely transmit a copy of  
            the manifest to the licensee that will receive the medical  
            marijuana product, and to the Bureau, prior to transport, and  
            required the transporter and the licensee receiving the  
            shipment to maintain each manifest and make it available to  
            local code enforcement and law enforcement, and the Bureau,  
            upon request.  


          33)Requires all transport vehicles to be staffed with a minimum  
            of two employees.  


          34)Prohibits a local jurisdiction from preventing transportation  
            through or to a facility issued a conditional license by a  
            conditionally licensed transporter who acts in compliance with  
            these provisions. 


          35)Requires a conditionally licensed facility to implement  
            sufficient security measures to deter and prevent unauthorized  
            entrance into areas containing medical marijuana or medical  
            marijuana products and theft of medical marijuana at those  
            licensed facilities, as specified. 


          36)Requires licensed facilities to notify appropriate law  
            enforcement authorities within 24 hours after discovering:  
            discrepancies during inventory; diversion, theft, loss, or any  
            criminal activity; loss or unauthorized alteration of records;  
            or any other breach of security. 


          37)Requires licensed cultivation sites to weigh, inventory, and  
            account on video all medical marijuana to be transported prior  
            to leaving its location, and within eight hours after arrival  










                                                                     AB 266


                                                                    Page  18





            at the destination, requires the licensed dispensing facility  
            to re-weigh, re-inventory, and account for on video all  
            transported marijuana. 


          38)Requires the Bureau to require an annual audit of all  
            conditionally licensed facilities, to be paid for by the  
            licensee, which shall be submitted to local code enforcement  
            offices, or the appropriate local enforcement entity, within  
            30 days. 


          Enforcement Provisions 


          39)Provides that local agencies shall have the primary  
            responsibility for enforcement of minimum statewide health and  
            safety standards and quality assurance standards for medical  
            marijuana activities in accordance with the Bureau's  
            regulations.  


          40)Provides that a state agency is not required to enforce local  
            laws or regulations regarding the site or operation of a  
            facility issued a conditional license.  


          41)Authorizes a city to enforce these provisions for licensed  
            facilities located within an unincorporated area of a city.   
            Requires the city to assume complete responsibility for any  
            regulatory function relating to those licensees within city  
            limits that would otherwise be performed by the county,  
            without liability, cost, or expense to the county.  


          42)Authorizes a county to enforce these provisions for licensed  










                                                                     AB 266


                                                                    Page  19





            facilities located within the unincorporated part of a county.  
             


          43)Provides that a willful violation of licensing requirements,  
            including an attempt to falsify information on an application  
            or defraud or mislead a state or local agency, shall be  
            punishable by a civil fine of up to $35,000 for each  
            violation, and up to $10,000 for each technical violation. 


          44)Authorizes a district attorney, county counsel, city  
            attorney, or city prosecutor to bring an action to enjoin a  
            violation or the threatened violation of these provisions, as  
            specified. 


          45)Provides that actions of a licensee, its employees, and its  
            agents, that are permitted pursuant to both a conditional  
            license and a license or permit issued by the local  
            jurisdiction, following the requirements of applicable local  
            ordinances and other regulations, are lawful under state law,  
            as specified.


          Local Government and Taxation Provisions 


          46)Provides that these provisions in no way supersede the  
            provisions of Measure D, approved by the voters of the City of  
            Los Angeles on May 21, 2013, and that marijuana businesses and  
            dispensaries subject to the provisions of Measure D and its  
            qualified immunity shall continue to be subject to the  
            ordinances and regulations of the City of Los Angeles.  












                                                                     AB 266


                                                                    Page  20





          47)Authorizes the Bureau to assist state taxation authorities in  
            the development of uniform policies for the state taxation of  
            licensees. 


          48)Authorizes the Board of Supervisors in any county to impose,  
            by ordinance, a tax on the privilege of cultivating,  
            dispensing, producing, processing, storing, providing,  
            donating, selling or distributing marijuana by a licensee, as  
            specified.


          Physician and Advertising Provisions 





          49)Requires the MBC to prioritize cases involving physicians who  
            recommend marijuana to patients for medical purposes without a  
            good faith prior examination of the patient and medical reason  
            therefor.



          50)Makes it a misdemeanor for a physician and surgeon who  
            recommends medical marijuana to a patient to accept, solicit,  
            or offer any form of remuneration from or to a facility  
            licensed to engage in medical marijuana activities if the  
            physician and surgeon or his or her immediately family have a  
            financial interest in that facility, as specified. 



          51)Requires the MBC to consult with the California Marijuana  
            Research Program, known as the Center for Medicinal Cannabis  










                                                                     AB 266


                                                                    Page  21





            Research, on developing and adopting medical guidelines for  
            the appropriate administration and use of medical marijuana.



          52)Prohibits a physician and surgeon from recommending medical  
            marijuana to a patient unless that person is the patient's  
            attending physician, as defined under existing law. 



          53)Requires an examination conducted by a physician and surgeon  
            involving the use of telehealth to comply with applicable  
            federal and state laws and regulations, including compliance  
            with the Health Insurance Portability and Accountability Act  
            of 1996.



          54)Requires advertising for physician recommendations for  
            medical marijuana to meet all requirements to bear a  
            prescribed notice for consumers and comply with false  
            advertising prohibitions for healing arts practitioners, as  
            specified, and prohibits price advertising that is fraudulent,  
            deceitful, or misleading.  



          Labor Provisions 


          55)Requires the Division of Labor Standards Enforcement  
            (Division) to do all of the following:  


              a)   Maintain minimum standards for the competency and  










                                                                     AB 266


                                                                    Page  22





               training of employees of  a licensed cultivation site or a  
               licensing dispensing facility, or "cannabis employees,"  
               through a system of testing and certification;  


              b)   Requires persons who work as cannabis employees to be  
               certified by the Division;  


              c)   Establishes additional grounds for disciplinary  
               proceedings, including suspension of revocation of the  
               conditional license issued pursuant to these provisions, as  
               specified; and  


              d)   Refer cases to the Bureau when it is determined that a  
               violation has occurred, and requires the Bureau to open an  
               investigation and take disciplinary action within 60 days  
               of receipt of the referral.  


           56) Authorizes uncertified persons to perform work for which  
            certification is otherwise required in order to acquire the  
            necessary on-the-job experience for certification, as  
            specified.  


           57)Establishes the Cannabis Certification Fund as a special  
            account in the State Treasury to be used, upon appropriation,  
            to validate and certify cannabis employees, as specified.  


           58)Requires the Division of Occupational Safety and Health in  
            the Department of Industrial Relations to develop  
            industry-specific regulations related to the activities of  
            licensed facilities, including provisions for the  










                                                                     AB 266


                                                                    Page  23





            establishment of labor peace agreements and an apprenticeship  
            program to ensure professional standards among industry  
            employees, as specified.  


           59)Requires the Division of Apprenticeship Standards to  
            investigate, approve, or reject applications for  
            apprenticeship programs for employees of a licensed  
            cultivation site or dispensing facility, as specified.  


           FISCAL EFFECT:  Unknown.  This bill is keyed fiscal by the  
          Legislative Counsel.  





          COMMENTS:





          1)Purpose. This bill is sponsored by the  League of California  
            Cities  and the  California Police Chiefs Association  .   
            According to the author, "After nearly 20 years of access to  
            medical marijuana without a reasonable framework for  
            distribution, it is time for us to take a serious look at  
            putting such a framework into place, whether voters are called  
            upon to decide on legislation in 2016 or not.  Periodic  
            litigation and the lack of uniform health and safety standards  
            are just two examples of how the status quo has not served the  
            general public or patients with bona fide medical needs well.   
            This measure seeks to tackle those problems head-on, but to do  
            so in a fashion that builds consensus on this issue as we move  










                                                                     AB 266


                                                                    Page  24





            forward."      


          2)The Compassionate Use Act (CUA) and SB 420.  In 1996, voters  
            approved the CUA, which allowed patients and primary  
            caregivers to obtain and use medical marijuana, as recommended  
            by a physician, and prohibited physicians from being punished  
            or denied any right or privilege for making a medical  
            marijuana recommendation to a patient.  In 2003, SB 420  
            (Vasconcellos), Chapter 875, Statutes of 2003, established the  
            Medical Marijuana Program (MMP), which allowed patients and  
            primary caregivers to collectively and cooperatively cultivate  
            medical marijuana, and established a medical marijuana card  
            program for patients to use on a voluntary basis.  The card  
            can be used to verify that a patient has authorization to  
            possess, grow, transport, or use medical marijuana in  
            California, and that a caregiver has authorization to possess,  
            grow, and transport medical marijuana in California.  The MMP  
            facilitates the registration of qualified patients and their  
            caregivers through a statewide identification system, and  
            qualified patients and their caregivers may apply for and be  
            issued an identification card through their county of  
            residence.  Upon issuance of the card, it is registered with  
            an online database which law enforcement can use to verify  
            whether a card is valid.



          Under the MPP, a person is required to get a recommendation for  
            medical marijuana from an attending physician, which is  
            defined to mean someone who, " ?has taken responsibility for  
            an aspect of the medical care, treatment, diagnosis,  
            counseling, or referral of a patient and who has conducted a  
            medical examination of that patient before recording in the  
            patient's medical record the physician's assessment of whether  
            the patient has a serious medical condition and whether the  










                                                                     AB 266


                                                                    Page  25





            medical use of marijuana is appropriate."  Written  
            documentation of this recommendation is required to be  
            submitted to the county in order to receive a medical  
            marijuana card.  However, since the passage of Proposition 215  
            and SB 420, the state has not adopted a framework to provide  
            for appropriate licensure and regulation of medical marijuana.  
             As a result, in the nearly 20 years since the passage of  
            Proposition 215, there has been an explosion of medical  
            marijuana collectives and cooperatives that are largely left  
            to the enforcement of local governments, resulting in the  
            creation of a patchwork of local regulations for these  
            industries and with little statewide involvement.    

          The California Attorney General's Compassionate Use Guidelines.   
            SB 420 required the California Attorney General to "?develop  
            and adopt appropriate guidelines to ensure the security and  
            non-diversion of marijuana grown for medical use by patients  
            qualified under the Compassionate Use Act of 1996."  In 2008,  
            the Attorney General issued guidelines to: 1) ensure that  
            marijuana grown for medical purposes remains secure and does  
            not find its way to non-patients or illicit markets, 2) help  
            law enforcement agencies perform their duties effectively and  
            in accordance with California law, and 3) help patients and  
            primary caregivers understand how they may cultivate,  
            transport, possess, and use medical marijuana under California  
            law.  According to a 2011 letter, after a series of meeting  
            with stakeholders to assess whether to clarify the 2008  
            guidelines to stop the exploitation of California's medical  
            marijuana laws by gangs, criminal enterprises, and others, the  
            Attorney General decided to postpone the issuance of new  
            guidelines because of pending litigation and to urge the  
            Legislature to amend the law to establish clear rules  
            governing access to medical marijuana.  

          California Supreme Court Affirms Local Control Over Medical  
            Marijuana.  By exempting qualified patients and caregivers  










                                                                     AB 266


                                                                    Page  26





            from prosecution for using or from collectively or  
            cooperatively cultivating medical marijuana, the CUA and the  
            MPP essentially authorized the cultivation and use of medical  
            marijuana.  These laws have triggered the growth of medical  
            marijuana dispensaries in many localities, and in response,  
            local governments have sought to exercise their police powers  
            to regulate or ban activities relating to medical marijuana.   
            After numerous court cases and years of uncertainty relating  
            to the ability of local governments to control medical  
            marijuana activities, particularly relating to the ability to  
            control the zoning, operation, and existence of medical  
            marijuana dispensaries, the California Supreme Court, in City  
            of Riverside v. Inland Empire Patients (2013) 56 Cal. 4th 729,  
            held that California's medical marijuana statutes do not  
            preempt a local ban on facilities that distribute medical  
            marijuana.  The court held that nothing in the CUA or the MMP  
            expressly or impliedly limited the inherent authority of a  
            local jurisdiction, by its own ordinances, to regulate the use  
            of its land, including the authority to provide that  
            facilities for the distribution of medical marijuana will not  
            be permitted to operate within its borders.

          Federal Controlled Substances Act.  Despite the CUA and SB 420,  
            marijuana is still illegal under state and federal law.  Under  
            California law, marijuana is listed as a hallucinogenic  
            substance in Schedule I of the California Uniform Controlled  
            Substances Act.  Yet, the CUA prohibits prosecution for  
            obtaining, distributing, or using marijuana for medical  
            purposes.  However, under the federal Controlled Substances  
            Act, it is unlawful for any person to manufacture, distribute,  
            dispense or possess a controlled substance, including  
            marijuana, whether or not it is for a medical purpose.  As a  
            result, patients, caregivers, and dispensary operators, who  
            engage in activities relating to medical marijuana, may still  
            vulnerable to federal arrest and prosecution.  











                                                                     AB 266


                                                                    Page  27





          According to the California Attorney General's guidelines, the  
            difference between state and federal law gives rise to  
            confusion.  However, California has tried to avoid this  
            conflict by deciding not to use the state's powers to punish  
            certain marijuana offenses under state law when a physician  
            has recommended its use to treat a serious medical condition.   


          U.S. Department of Justice (USDOJ) Guidance Regarding Marijuana  
            Enforcement.  On August 29, 2013, the USDOJ issued a  
            memorandum that updated its guidance to all U.S. Attorneys in  
            light of state ballot initiatives to legalize under state law  
            the possession of small amounts of marijuana and provide for  
            the regulation of marijuana production, processing, and sale.   
            While the memorandum noted that illegal distribution and sale  
            of marijuana is a serious crime that provides a significant  
            source of revenue to large-scale criminal enterprises, gangs,  
            and cartels, it also noted that USDOJ is committed to using  
            its limited investigative and prosecutorial resources to  
            address the most significant threats, which include:  
            preventing distribution to minors; preventing revenue from  
            marijuana from going to criminal enterprises; preventing  
            diversion to other states where marijuana is not legal under  
            state law; preventing state-authorized marijuana from being a  
            cover for trafficking in other illegal drugs or illegal  
            activity; preventing violence in cultivating and distributing  
            marijuana; preventing drugged driving and other public health  
            problems from marijuana use; and preventing growing,  
            possessing or using marijuana on public lands or on federal  
            property.  

          According to the USDOJ, "In jurisdictions that have enacted laws  
            legalizing marijuana in some form and that have also  
            implemented strong and effective regulatory and enforcement  
            systems to control the cultivation, distribution, sale, and  
            possession of marijuana, conduct in compliance with those laws  










                                                                     AB 266


                                                                    Page  28





            and regulations is less likely to threaten the federal  
            priorities set forth above?In those circumstances, consistent  
            with the traditional allocation of federal-state efforts in  
            this area, enforcement of state law by state and local law  
            enforcement and regulatory bodies should remain the primary  
            means of addressing marijuana-related activity."  
            Medical Marijuana Industry in California.  Regulated industry.  
             According to the author's Sunrise Questionnaire, submitted to  
            the Committee pursuant to Government Code Section 9148 et  
            seq., there are multiple occupational groups interested in  
            state regulation, representing a growing marijuana industry  
            including: cultivators, manufacturers, distributors,  
            researchers, dispensary operators, testing laboratories,  
            producers of marijuana edibles, and those involved in  
            transport of the product, from large shipments to discrete  
            deliveries to individual patients.  As this industry is  
            virtually unregulated today, and to a large degree operates in  
            the shadows for fear of local, state, and federal enforcement  
            action, there may be other occupational groups with a stake in  
            the proposed regulation of which sponsors are currently  
            unaware.  Because marijuana remains federally prohibited,  
            being classified as a Schedule I drug by the U.S. Food and  
            Drug Administration, the U.S. Department of Justice, and the  
            U.S. Drug Enforcement Administration, it is not recognized by  
            the federal government as having any medicinal value.  In  
            addition, practitioners in this industry are denied banking  
            services in FDIC-insured institutions due to the federal ban,  
            and must execute all transactions in cash.  U.S. Attorneys  
            with jurisdiction over California and neighboring states  
            remain capable of launching enforcement actions at any time.   
            In addition, many California jurisdictions, roughly estimated  
            by the League of California Cities at 50 percent pending  
            completion of a statewide survey, ban the cultivation and sale  
            of medical marijuana altogether.  It is not yet fully legal  
            for recreational use in California.   











                                                                     AB 266


                                                                    Page  29






            The regulatory, legal, financial and enforcement arms of the  
            federal government - aided in many instances by state and  
            local government, who rely on the Fed for guidance --  
            contribute significantly to a climate in which it is not yet  
            possible for practitioners to operate with sufficient openness  
            to form an association of the type this question inquires  
            about.  As a result, while some local governments have  
            established comprehensive licensing and regulatory schemes,  
                                                                                    many practitioners in this industry are part of an underground  
            economy that is unregulated, unlicensed, and untaxed.  


            According to the author's Sunrise Questionnaire, and the  
            Emerald Growers Association, there are an estimated 30,000  
            cultivation sites in the tri-county area of  
            Humboldt-Mendocino-Trinity, and an estimated additional 10,000  
            cultivation sites throughout California.  According to  
            www.weedmaps.com, there are over 4,000 medical marijuana  
            dispensaries operating within California.  The Los Angeles  
            Time reports (as of April 1, 2014) that there are more than  
            1,100 medical marijuana dispensaries within the Los Angeles  
            city limits alone that are actively registered to pay business  
            tax in Los Angeles.  Other than these sources, neither the  
            sponsors of this bill, nor the industry it seeks to regulate  
            have any means of providing a reasonably accurate statewide  
            estimate of the total number of practitioners.  


            Need for regulation.  As the bill's legislative findings  
            state, "Despite the passage of the Compassionate Use Act of  
            1996 and the MMPA, because of the lack of an effective  
            statewide system for regulating and controlling medical  
            marijuana, cities, counties and local law enforcement  
            officials have been confronted with uncertainty about the  
            legality of some medical marijuana cultivation and  










                                                                     AB 266


                                                                    Page  30





            distribution activities. The current state of affairs makes  
            law enforcement difficult and endangers patient safety because  
            of an inability to monitor the supply of medical marijuana in  
            the state and the lack of quality control, testing, and  
            labeling requirements." 





            In addition, because marijuana remains a Schedule I drug, no  
            legitimate pharmacy may dispense marijuana, and federal and  
            state food and drug laws do not apply.  For this reason, a  
            person (such as patient with epilepsy) suffering ill effects  
            from marijuana that is high in THC content, has no meaningful  
            redress under California law today, because there are no  
            health and safety standards, no potency standards, no labeling  
            standards, and no testing standards to invoke in alleging any  
            kind of violation.  So long as there are no standards by which  
            to gauge competent conduct by a practitioner in any of these  
            areas, no consumer or potential plaintiff harmed by marijuana  
            will have a basis on which to argue that a practitioner should  
            be held accountable.  The same is true of a cancer patient who  
            ingests a THC-rich edible product to stimulate his appetite,  
            where that product turns out to be far more potent than he  
            imagined, inducing 12 hours of hallucinations during which he  
            suffers severe physical injury; he too will have no legal  
            redress.  For patients, there is a critical need for  
            meaningful regulatory standards addressing testing, purity,  
            potency, labeling, the identification and elimination of  
            contaminants, and secure protocols for processing and  
            transport of the product.  














                                                                     AB 266


                                                                    Page  31






            According to the Sunrise Questionnaire, there is significant  
            public demand for uniform standards in the field of health and  
            safety, including maximum potency standards, product packaging  
            and labeling standards, maximum tolerances for contaminants  
            such as mold, fungus, pesticides, rodenticides, fecal matter,  
            and other foreign substances.  Among local government  
            entities, many jurisdictions would like to see a uniform state  
            regulatory structure, and have refused to allow cultivation or  
            sale of marijuana within their boundaries in the absence of  
            such a structure.  There is also widespread public demand for  
            marijuana cultivation standards that mirror established  
            agricultural standards and that will alleviate environmental  
            degradation.  





            According to the author, without such regulation, harm to  
            consumers is very likely given that no health and safety  
            standards exist for marijuana, so there are none to be  
            enforced.  The same is true in regard to requirements for  
            packaging, labeling, and seed-to-sale tracking.  Hazard to the  
            public is magnified in the case of edibles due to the  
            concentrated nature of the marijuana they contain, and  
            depending on the strain, its attendant psychotropic and  
            hallucinogenic properties, combined with the current total  
            absence of regulatory standards.  Additionally, edibles are  
            not currently labeled to disclose any potential allergens. 





            AB 266 Licensing and Regulatory Framework.  According to the  










                                                                     AB 266


                                                                    Page  32





            author, this bill will address many of these concerns by doing  
            all of the following: 





                 Requiring the establishment of uniform health and safety  
               standards, and requiring mandatory, random sample product  
               testing, both of which are referenced with greater  
               specificity below.  In addition, multiple additional  
               provisions of the proposed regulation will preclude  
               consumer injury, as follows:


                  o         Replaces the existing cooperative and  
                    collective model by establishing a licensing  
                    requirement for all operators in the stream of  
                    commerce associated with medical marijuana.  


                  o         Requiring the establishment of cultivation  
                    standards.


                  o         Establishing both the Medical Marijuana  
                    Regulation Fund, and the Special Account for  
                    Environmental Enforcement, addressing both the funding  
                    needs triggered by this entire regulatory structure,  
                    as well as the requirement for the enforcement of  
                    environmental laws and related clean-up at licensing  
                    cultivation sites, which will have a direct impact on  
                    consumer safety. 


                  o         Requiring certification of laboratories, and  










                                                                     AB 266


                                                                    Page  33





                    certification standards, to perform testing of medical  
                    marijuana, for the purpose of identifying various  
                    contaminants in the marijuana and determining their  
                    concentration.


                  o         Requiring the establishment of sanitation  
                    standards in connection with edible marijuana products  
                    and additional regulations pertaining to edible  
                    marijuana products.


                  o         Establishing standards for pesticides and  
                    rodenticides to be used in cultivation of medical  
                    marijuana. 


                  o         Establishing standards for statewide health  
                    and safety regulations, and quality assurance  
                    (testing) regulations related to cultivation, storage,  
                    transport, manufacture, and sale of all medical  
                    marijuana produced in California.


                  o         Requiring entities that dispense, cultivate,  
                    manufacture, transport, furnish, or test medical  
                    marijuana to be appropriately licensed.  The objective  
                    of this provision is to effectively replace the  
                    current cooperative/collective model with licensed  
                    operators throughout the stream of product  
                    cultivation, testing, distribution, and sale.


                  o         Establishing a revenue stream for enforcement  
                    activities by the relevant state agencies pertaining  
                    to environmental clean-up and enforcement of existing  










                                                                     AB 266


                                                                    Page  34





                    law at all licensed cultivation sites.    


            Marijuana Frameworks Established in Other States.   California  
            is the only state that permits for medical marijuana in the  
            absence of a robust state-wide regulator system. The following  
            states have state-wide medical marijuana regulatory systems:  
            Alaska, Arizona, Colorado, Washington DC, Delaware, Hawaii,  
            Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota,  
            Montana, Nevada, New Hampshire, New Jersey, New Mexico, New  
            York, Oregon, Rhode Island, Vermont and Washington.  In  
            addition, Colorado, Washington and Oregon have established  
            recreational marijuana licensing schemes.  


            Both Washington and Colorado created systems of legal  
            production and sale, subject to licensing, regulation and  
            taxation.  However, the laws impose different industry  
            structures and build on their existing medical systems in  
            different ways.  Colorado allows entrepreneurs to produce  
            cannabis and sell it at retail, and such businesses are, at  
            least initially, required to produce the majority of the  
            marijuana they sell (vertical integration), while Washington  
            state maintains clear separation between marijuana growers,  
            processors and retailers (horizontal integration).  Both  
            models seek to, however, reduce diversion and increase  
            accountability.  This bill adopts a horizontal integration  
            approach.  In addition, the commercial market in Washington is  
            supervised by the Washington State Liquor Control Board, while  
            Colorado's law vests authority to regulate the commercial  
            market in the newly created Marijuana Enforcement Division of  
            the Department of Revenue.  Colorado's medical marijuana  
            program is also under that Division - prior to the  
            recreational initiative, the Medical Marijuana Enforcement  
            Division was regulating that part of the market.  











                                                                     AB 266


                                                                    Page  35






            According to the Brookings Institute, since the early 1990s,  
            U.S. public opinion has trended in favor of marijuana  
            legalization.  Currently, a majority of Americans support  
            legalization by a margin of seven points-52 percent to 45  
            percent, according to findings from a Pew Research Center  
            survey in March 2013.  Support for marijuana legalization has  
            risen sharply since 2010, by 11 percentage points.  


            This increasing support for marijuana legalization is present  
            in California as well, with recent polls showing that a  
            majority of Californians support marijuana legalization.   
            Currently, there are an estimated four different marijuana  
            initiatives attempting to qualify for the 2016 ballot.  In  
            order for any marijuana scheme to be effective, it should  
            address all parts of the industry, including establishing a  
            robust licensing and regulatory scheme, a taxation scheme,  
            incorporate health and safety standards, in addition to  
            ensuring that the public is protected; however, if the measure  
            is too prescriptive, it may hamper the ability to address any  
            unintended consequences or fill in any policy gaps without  
            having to go back to the ballot.  As a result, if the State is  
            able to create a comprehensive framework for medical  
            marijuana, it may also serve a dual role by serving as a basis  
            for a recreational marijuana scheme.  


          1)Current Related Legislation. AB 26 (Jones-Sawyer) of the  
            current legislative session, would enact the Medical Cannabis  
            Regulation and Control Act to license and regulate medical  
            cannabis, and would create the Division of Medical Cannabis  
            Regulation and Enforcement within the Department of Alcoholic  
            Beverage Control to administer the act.  STATUS: This bill is  
            in the Assembly Business and Professions Committee. 











                                                                     AB 266


                                                                    Page  36







          AB 34 (Bonta) of the current legislation, session would enact  
            the Medical Cannabis Regulation and Control Act to license and  
            regulate medical cannabis, and would establish the Division of  
            Medical Cannabis Regulation and Enforcement within the  
            Department of Alcoholic Beverage Control to administer the  
            act.  STATUS: This bill is scheduled to be heard in the  
            Assembly Business and Professions Committee) 
            AB 243 (Wood) of the current legislation session, would  
            require all medical marijuana cultivation (MMC) to be  
            conducted in accordance with state and local laws and best  
            practices, as specified, and would require state agencies to  
            address environmental impacts of MMC and coordinate with local  
            governments in enforcement efforts, and establishes a MMC  
            permitting system.  STATUS: This bill is scheduled to be heard  
            in the Assembly Environmental Safety and Toxic Materials  
            Committee. 


            SB 673 (McGuire) of the current legislation session, would  
            establish within the Department of Consumer Affairs a Bureau  
            of Medical Marijuana Regulation, under the supervision and  
            control of the Chief of the Bureau of Medical Marijuana  
            Regulation, and would require the bureau to license and  
            regulate dispensing facilities, cultivation sites,  
            transporters, and manufacturers of medical marijuana and  
            medical marijuana products, subject to local ordinances, and  
            enforced primarily at the local level.  STATUS: This bill is  
            scheduled to be heard in the Senate Governance and Finance  
            Committee.


          2)Prior Related Legislation. AB 1262 (Correa) of 2014, would  
            have established a licensing and regulatory framework for the  
            cultivation, processing, transportation, testing,  










                                                                     AB 266


                                                                    Page  37





            recommendation and sale of medical marijuana to be  
            administered by the Department of Consumer Affairs (DCA) and  
            enforced primarily at the local level.  NOTE: This bill was  
            held in the Assembly Appropriations Committee.



          AB 1894 (Ammiano) of 2014, would have enacted the Medical  
            Cannabis Regulation and Control Act to license and regulate  
            the cultivation, manufacture, testing, transportation,  
            storage, distribution, and sale of medical cannabis, and would  
            create the Division of Medical Cannabis Regulation and  
            Enforcement within the Department of Alcoholic Beverage  
            Control.  NOTE: This bill was held on the Assembly Floor. 

          AB 473 (Ammiano) of 2013, would have enacted the Medical  
            Marijuana Regulation and Control Act to license and regulate  
            the cultivation, manufacturing, testing, transportation,  
            distribution, and sales of medical marijuana and medical  
            marijuana products, and would create the Division of Medical  
            Marijuana Regulation and Enforcement within the Department of  
            Alcoholic Beverage Control.  NOTE: This bill was held on the  
            Assembly Floor. 
            AB 604 (Ammiano) of 2013, would have enacted the Medical  
            Cannabis Regulation and Control Act to license and regulate  
            the cultivation, manufacture, testing, transportation,  
            storage, distribution, and sale of medical cannabis, and would  
            create the Division of Medical Cannabis Regulation and  
            Enforcement within ABC.  NOTE: This bill was held in the  
            Senate Public Safety Committee.



            AB 2312 (Ammiano) of 2012, would have established the Medical  
            Marijuana Regulation and Control Act, authorizing local taxes  
            on medical cannabis and creating a board to regulate the  










                                                                     AB 266


                                                                    Page  38





            medical cannabis industry.  NOTE: This bill was held in the  
            Senate Committee on Business, Professions and Economic  
            Development.
            SB 1182 (Leno) of 2012, would have provided that a cooperative  
            or collective that operates within the Attorney General's (AG)  
            guidelines shall not be subject to prosecution for marijuana  
            possession or commerce, as specified.  NOTE: This bill was  
            held on the Senate Floor.  



            AB 1300 (Blumenfield), Chapter 196, Statutes of 2011, provided  
            that a local government entity may enact an ordinance  
            regulating the location, operation or establishment of a  
            medical marijuana cooperative or collective; authorizes local  
            government entities to enforce such ordinances through civil  
            or criminal remedies and actions; and authorizes a local  
            government entity to enact any ordinance that is consistent  
            with the Medical Marijuana Program.  

            SB 626 (Calderon) of 2011, would have required the Board of  
            Equalization (BOE) to establish a nine-member task force to  
            conduct a study to determine ways to enhance collections of  
            sales and use taxes on retail sales of marijuana and ensure  
            proper regulation of the cultivation, transportation, and  
            distribution of marijuana and marijuana products.  NOTE: This  
            bill was held in the Senate Appropriations Committee.

            AB 390 (Ammiano) of 2009, would have legalized the possession,  
            sale, cultivation and other conduct relating to marijuana and  
            required the Department of Alcoholic Beverage Control to  
            administer and enforce the terms of legalized marijuana.   
            NOTE: This bill was held in the Assembly Health Committee.

            SB 420 (Vasconcellos), Chapter 875, Statutes of 2003,  
            established the Medical Marijuana Program Act, a statewide,  










                                                                     AB 266


                                                                    Page  39





            voluntary program for the issuance of identification cards to  
            identify persons authorized to engage in the medical use of  
            marijuana under the Compassionate Use Act.

            Proposition 215, of the November 1996 General Election,  
            prohibits prosecution for the possession and cultivation of  
            cannabis by a patient or a patient's primary caregiver with a  
            physician's written or oral recommendation.



          ARGUMENTS IN SUPPORT:  


          The  League of California Cities  and the  California Police Chiefs  
          Association  write a letter as co-sponsors and support the  
          regulation of medical marijuana because "Although initially  
          presented to voters as another medical remedy for patients in  
          need, the implementation of Proposition 215 has been marked by  
          chaos, defined by no statewide regulatory framework in the  
          nearly twenty years since, and period litigation on the meaning  
          of the initiative and the extent of local control.  Among the  
          most troublesome issues with Proposition 215 are the  
          non-existent quality controls for consumers with respect to  
          potency and the presence of carcinogenic pesticides or other  
          contaminants; and retail outlets and cultivation sites that  
          often become potential magnets for criminal activity and the  
          ability of virtually anyone to obtain a medical marijuana  
          recommendation from a compliant doctor.  [This bill] establishes  
          an improved regulatory structure to ensure that Prop. 215 works  
          as originally envisioned to assist patients with legitimate  
          medical needs, in a manner that comports with the needs of law  
          enforcement, local governments, patient advocates, local  
          community organizations, and medical professionals."  












                                                                     AB 266


                                                                    Page  40








           The  United Food and Commercial Workers Union  writes a letter in  
          support and states, "a 'cannabis worker apprenticeship program  
          and certification program' will ensure the rights of workers are  
          protected, health and safety standards are maintained and  
          ongoing product knowledge and skills development are sustained  
          with consistency throughout the cannabis industry similar to  
          pharmacy laboratory technicians, nursing assistants, dental  
          hygienists, physical therapists, and cosmetologists."


           


          The League of California Cities - Redwood Empire Division  ,  The  
          League of California Cities - Los Angeles County Division  ,  City  
          of Concord  ,  City of Chino Hills  ,  City of Clayton  ,  City of  
          Fountain Valley  ,  City of Garden Grove  ,  City of Indian Wells  ,  
           City of Lakeport  ,   City of Merced  ,  City of Montclair  ,  The City  
          of Rancho Cucamonga  ,  City of Torrance  , and  City of Sacramento   
          all write letters in support and cite, "Most of the previous  
          legislation in this area has often sought to preempt local  
          control, only partially addressed the significant public safety  
          concerns raised by medical marijuana, and failed to address  
          important health and safety issues that are inevitably triggers  
          by a regulatory process for any medicine.  For this reason,  
          [this bill] with its public safety, local control, and public  
          health provisions represents a shift in focus that began with  
          last year's SB 1262 by Senator Correa.  As municipal government  
          officials, we are on the front lines on this issue along with  
          our local police departments, and have to cope with the effects  
          of the current chaotic regulatory structure for medical  
          marijuana on a daily basis.  We appreciate the responsible  
          approach that protects patient access while protecting local  










                                                                     AB 266


                                                                    Page  41





          control and addressing public safety issues exhibited in the  
          bill."  


           ARGUMENTS IN OPPOSITION:  


          The  California Medical Association  (CMA) writes a letter  
          opposing unless amended and states, "While much of the language  
          contained in AB 266 relating to physician recommendations of  
          medical cannabis was negotiated with CMA in prior bills,  
          unfortunately AB 266 contains unnecessary and potentially  
          confusing language with respect to exams conducted via  
          telehealth and the application of the Health Insurance  
          Portability and Accountability Act of 1996 (HIPAA). Despite  
          HIPAA's current broad application to medical exams conducted via  
          telehealth, AB 266 contains duplicative language requiring exams  
          conducted by physicians where medical cannabis is recommended to  
          be HIPAA compliant.  The sponsors argue, incorrectly, that  
          because Marijuana is designated by the federal government as a  
          Schedule I drug (a category which recognizes no accepted medical  
          benefit), it is not clear as to whether HIPAA standards  
          currently apply to medical marijuana recommendation in the State  
          of California."  


           California NORML  ,  Coalition for Cannabis Policy Reform  ,  
           Marijuana Policy Project  ,  Law Enforcement Against Prohibition  ,  
                                                                                Emerald Grower Association  all write a letter in opposition and  
          cite several concerns with AB 266.  "It abolishes the legal  
          basis for existing cultivation collectives and dispensaries (HSC  
          11362.775) immediately, but doesn't initiate conditional  
          licensing until July 1, 2017 (Sec. 18110a), leaving existing  
          operations in a legal vacuum."  They also state, "AB 266 does  
          nothing to fulfill Prop 215's mandate for 'safe and affordable'  
          access to medical marijuana for patients in medical need.  Local  










                                                                     AB 266


                                                                    Page  42





          governments would still be authorized to ban distribution  
          entirely, perpetrating demand for illegal black and gray market  
          suppliers in many parts of the state."  They point that "AB 266  
          imposes excessively burdensome and costly regulations that will  
          do nothing to improve patient access or public safety.  Chapter  
          4 requires even the most trivial shipments of marijuana to be  
          transported in specially equipped delivery vehicles staffed with  
          two employees."  They claim that "Section 18112(a) unacceptably  
          bans licensing of any person with a prior felony drug  
          trafficking offense, including marijuana crimes. This would  
          wrongly exclude many highly qualified, honest individuals who  
          have made valuable contributions to the development of medical  
          cannabis in California."





          POLICY ISSUES FOR CONSIDERATION: 


           


           This bill would establish a novel licensing and regulatory  
          scheme for medical marijuana, which covers every aspect of the  
          medical marijuana industry, from seed to sale.  In addition to  
          tasking the newly-created Bureau with myriad duties involved in  
          this new scheme, the bill also places enforcement  
          responsibilities primarily on local governments, as well as  
          establish a dual licensure scheme, which requires a close  
          partnership between the Bureau and local governments.  In  
          addition, the bill seeks to strengthen the ability of  
          environmental enforcement agencies to better enforce medical  
          marijuana cultivation, and would require the establishment of a  
          comprehensive set of health and safety standards for medical  










                                                                     AB 266


                                                                    Page  43





          marijuana and medical marijuana products.  As would be expected  
          for any new regulatory program of this scale and scope, a number  
          of outstanding issues and questions will need to be addressed in  
          order to ensure that the program has the greatest chance of  
          success.    








          1)Establishing a Bureau within the Department of Consumer  
            Affairs.  The DCA houses 41 regulatory entities (25 boards,  
            nine bureaus, four committees, two programs, and one  
            commission).  These entities establish minimum qualifications  
            and levels of competency for licensure.  They also license,  
            register, or certify practitioners, investigate complaints and  
            discipline violators.  The committees, commission and boards  
            are semi-autonomous bodies whose members are appointed by the  
            Governor and the Legislature.  The DCA provides them with  
            administrative support.  The DCA's operations are funded  
            exclusively by license fees.  



            The DCA's area of expertise includes professional licensure  
            and regulation, primarily of licensed professionals, as  
            opposed to businesses, and the DCA's oversight is typically  
            over fragmented chunks of licensed professionals, as opposed  
            to entire swaths of industries.  For example, while boards  
            within the DCA may each have jurisdiction over physicians,  
            nurses, and pharmacists, the DCA is not responsible for  
            overseeing the entire health care industry.  In addition, the  
            DCA's primary purpose to protect consumers is carried out by  










                                                                     AB 266


                                                                    Page  44





            setting standards and enforcing applicable laws and  
            regulations relating to a certain profession or license  
            category, which is largely through a complaint-driven process.  
             





            While many DCA regulatory entities may adopt complex  
            regulations relating to a particular profession, the type of  
            expertise required to establish and implement, at wholesale,  
            such a comprehensive program that covers all aspects of  
            medical marijuana activities, will pose great challenge to any  
            state entity, including the DCA.  Successful implementation of  
            any medical marijuana program will require strong leadership  
            and involvement from the Administration to prioritize  
            implementation so that it meets federal guidance and prevents  
            the potential for illegitimate activities, to coordinate  
            efforts among all affected entities that will play a role in  
            establishing a robust and effective licensing and regulatory  
            framework, all of which the Bureau's success will rely heavily  
            on, in addition to having sufficient resources to ensure that  
            all staffing and other needs will be met.  





          2)Bureau's Ability to Absorb New Responsibilities.  Among other  
            things, this bill would require the Bureau to adopt  
            regulations that establish standards for cultivation,  
            manufacturing, transportation, storage, distribution, and sale  
            of medical marijuana.  These regulations are thereby required  
            to cover everything from licensure, which is within the DCA's  
            core duties, to comprehensive health and safety standards for  










                                                                     AB 266


                                                                    Page  45





            medical marijuana, including establishing the maximum potency  
            standards for THC.  This bill would delay implementation of  
            these regulations, and licensure provisions, until July 1,  
            2017, thereby giving the Bureau 18 months to adopt  
            regulations.  In addition, the bill authorizes the Bureau to  
            consult with other state and local agencies, industry, and  
            public and private entities to establish these regulations.   
            This bill would also require the Bureau to keep a complete  
            record of all facilities issued a conditional license, and  
            would require the Bureau to establish procedures to provide  
            state and local law enforcement, upon their request, with  
            24-hour access to information to verify conditional licenses  
            and track inventories and transportation.  
            


            Due to the extensive number and type of regulations required  
            to be adopted, in addition to the level of outside expertise  
            the Bureau will need to rely on, the author may wish to  
            consider whether 18 months will be enough time to establish  
            all of these standards, or if the Bureau should be given more  
            time to adopt these standards, or be authorized to adopt  
            temporary emergency regulations.  





            Should this bill pass, the author should strongly consider  
            requiring the Bureau to establish an advisory taskforce with  
            the requisite expertise to assist the DCA during this  
            rulemaking process and to clarify the appropriate roles of  
            each state entity that is, or would be, affected by medical  
            marijuana activities.  Such an advisory taskforce should  
            include representatives from DPH, CDFA, State Water Board and  
            other environmental departments, the Attorney General's Office  










                                                                     AB 266


                                                                    Page  46





            (especially critical to help navigate the federal and changing  
            legal landscape), local governments, medical marijuana  
            experts, and industry representatives.  





            In addition, while the bill authorizes the Bureau to assist  
            state taxation authorities in the development of uniform  
            policies for the state taxation of licensees, the author  
            should consider requiring the Bureau to work with the State  
            Board of Equalization (BOE) on establishing clear policies for  
            the state taxation of licensees, and include the BOE in any  
            taskforce activities.   





            The author should also consider working with the DCA to  
            determine the feasibility, timeline, and cost to establish a  
            database system that would meet these new requirements to  
            assist in tracking licensees', shipments, and other  
            information to help and product, i.e."seed to sale" tracking,  
            and whether this could be established as a separate database  
            from the DCA's BreEZe system, which has encountered extreme  
            difficulties.  



          3)Patient Access to Care.  This bill delays implementation of  
            many of these provisions, including promulgating regulations  
            and issuing and requiring conditional licenses until July 1,  
            2017.  However, the bill would delete the provisions  
            authorizing patients and caregivers to be exempt from state  










                                                                     AB 266


                                                                    Page  47





            criminal sanctions for "collectively or cooperatively"  
            cultivating medical marijuana.  As a result, the author may  
            consider similarly delaying the implementation of that  
            provision until six months after the Bureau begins issuing  
            conditional licenses, or until January 1, 2018. 



            The bill also limits exemptions for patients who do not sell,  
            distribute, donate, or provide marijuana to any other person  
            or entity, and limits the exemption for patient caregivers who  
            serve five or less qualified patients for whom he or she is a  
            caregiver.  The author may wish to consider whether patients  
            should be exempt for distributing marijuana without  
            compensation, and whether limiting the number of patients a  
            primary caregiver may serve might limit access to care for  
            certain patients, for example, those in rural areas. 





            In addition, while this bill prohibits the issuance of a  
            license if the applicant has a past felony conviction for the  
            possession for sale, sale, manufacture, transportation, or  
            cultivation of a controlled substance, the author may wish to  
            consider exempting felony convictions for offenses relating  
            solely to medical marijuana activities brought on behalf of  
            the federal government if that applicant has not had any  
            similar enforcement actions taken against them by the local  
            government.  This would allow businesses that have been  
            complying with local ordinances to continue those  
            locally-sanctioned business operations.  On a similar note,  
            the author may wish to consider specifically authorizing a  
            facility that is operating in accordance with local  
            regulations, and who submits an application for state  










                                                                     AB 266


                                                                    Page  48





            conditional licensure, to continue to operate until its  
            application is approved or denied by the Bureau.  


            In addition, the bill currently authorizes the Bureau to adopt  
            regulations to limit the number of conditional licenses issued  
            upon a finding that the otherwise unrestricted issuance of  
            conditional licenses is dangerous to the public health and  
            safety.  Because this licensure scheme relies upon dual  
            license, the author may wish to consider whether it is  
            necessary to empower the Bureau to restrict the number of  
            licenses issued when the local government would have the last  
            say on whether a business would receive necessary local  
            approval to operate or not. 





          4)Dual Licensure and Enforcement.  The bill requires facilities,  
            manufacturers, cultivation sites, and transporters to be  
            licensed by the Bureau, and requires enforcement of these  
            provisions and health, safety, and other standards to be  
            carried out by primarily at the local level.  In addition,  
            this bill enacts a dual licensure scheme that requires a  
            licensee to obtain both a state conditional license and a  
            local license or permit prior to engaging in any medical  
            marijuana activities.  As a result, there may be some  
            inevitable confusion between the Bureau and local governments  
            in their enforcement roles, which may be further complicated  
            by the fact that licensure depends on having both approvals,  
            and that an enforcement action taken by a state or local  
            government will inevitably affect their equivalent state or  
            local license, and trigger enforcement.  The author may wish  
            to clarify the enforcement duties of state and local agencies  
            under the bill, and require the Bureau to ensure open  










                                                                     AB 266


                                                                    Page  49





            communication and collaboration with local governments.  
          
            The bill authorizes reasonable costs incurred by law  
            enforcement and other public safety entities for enforcing  
            these provisions to recover those costs.  While this limits  
            recovery to "reasonable costs," the author may wish to  
            consider if this language might allow some local jurisdictions  
            to heavily focus enforcement efforts on this activity, since  
            any reasonable costs for enforcement could be recovered, which  
            would leave less money for other jurisdictions, the Bureau, or  
            other state agencies to use for enforcement.  





            This bill also requires the Bureau to require an annual audit  
            of all conditionally licensed facilities, which shall be paid  
            for by the licensee.  The author may wish to specify the type  
            of audit (e.g. financial, in-depth, etc.) that should be  
            required, and whether placing annual auditing requirements on  
            every licensee is too burdensome for the Bureau, and consider  
            biannual audits or allowing the Bureau to prioritization its  
            audits.    





          5)Audits.  The bill currently requires annual audits of  
            licensees to be performed by the Bureau.  Annual audits for  
            each conditionally licensed entity would include those  
            facilities that are not currently licensed.  As a result, the  
            author may wish to only require the Bureau to audit those  
            facilities that are dually licensed.  In addition, the author  
            may want to grant the Bureau more discretion in its ability to  










                                                                     AB 266


                                                                    Page  50





            audit licensees, including determining whether an annual audit  
            is required, instead of, for example, a bi-annual audit, and  
            the ability to prioritize which licensees should be audited  
            based on Bureau resources and level of potential harm to  
            consumers or other factors that would indicate those licensees  
            at greater risk of violating state or local laws.  



          6)Laboratory Certification.  This bill directs the Bureau to  
            certify laboratories for the testing of medical marijuana, and  
            requires certification to be consistent with general  
            requirements for the competence of testing and calibration  
            activities using methods established by the International  
            Organization for Standardization, specifically ISO/IEC 17025.   
            The bill also requires the Department of Public Health (DPH)  
            to promulgate standards for certification of testing  
            laboratories.  The International Laboratory Accreditation  
            Cooperation (ILAC) is a well-respected industry organization  
            that has several accreditation bodies that are considered  
            complaint with ISO/IEC 17011, which is the standard by which  
            accreditation bodies are to operate, and are qualified to  
            attest that a laboratory meets the standards found in ISO/IEC  
            17025 and ISO/EIC 17020 (which is the visual inspection  
            standard).  For example, the American Association for  
            Laboratory Accreditation in Maryland is an ILAC-approved  
            accreditation body that has developed a Cannabis Testing  
            Laboratory Program specifically designed to raise the standard  
            in laboratory testing relating to medical marijuana.  



            The author should consider whether laboratory certification  
            using an outside accreditation body may be a more appropriate  
            entity for this process, or whether DPH, which is already  
            responsible for promulgating certification regulations and  










                                                                     AB 266


                                                                    Page  51





            certifies some clinical laboratories, should certify these  
            testing laboratories, with the ability to rely upon an outside  
            accreditation body as part of its certification.  



          AMENDMENTS:  





          1)Physician Interactions with Patients Are Already Covered by  
            HIPAA.  This bill requires examinations, conducted by  
            physicians via telehealth for medical marijuana  
            recommendations, to comply with applicable federal and state  
            laws, including HIPAA.  However, HIPAA, which establishes a  
            set of national standards for the protection of certain health  
            information, already applies to any health care provider,  
            including physicians, who transmit health information in  
            electronic form.  As a result, this requirement would already  
            exist, and specifying that physicians must comply with a  
            specific federal law that already applies may cause confusion  
            and unnecessary duplication.  Accordingly, the author may wish  
            to consider deleting this provision of the bill.  



            On page 9, strike lines 5-11, inclusive. 





          2)Clarifying Licensure Provisions.  The bill requires a dual  
            licensure framework, thereby requiring both a conditional  










                                                                     AB 266


                                                                    Page  52





            state license and a local license or permit in order to  
            operate.  The bill also has various provisions that limit  
            medical marijuana activities to licensed facilities.  The  
            author may wish to clarify that such licensed facilities must  
            be dually licensed in order to interact with one another by  
            making the following changes: 



            On page 10, line 8, after "part" insert:  and a local license  
            or permit, as specified in subdivision (c) of Section 18110.  

            On page 10, line 13, after "part" insert:  and a local license  
            or permit, as specified in subdivision (c) of Section 18110  .

            On page 10, line 19, after "part" insert:  and a local license  
            or permit, as specified in subdivision (c) of Section 18110  .

            On line 23, after "part" insert:  The transportation security  
            requirements in Section 18122 shall only apply to licensed  
            transporters  .

          3)Clarifying Enforcement.  The author may wish to clarify the  
            enforcement duties of state and local agencies under the bill,  
            and require the Bureau to ensure open communication and  
            collaboration with local governments.  As such, the following  
            amendment is suggested:



            On page 24, line 31, insert:  (a) The bureau shall, in  
            consultation with local governments, develop an enforcement  
            framework that clarifies the enforcement roles of the state  
            and local governments, designating local governments with  
            primary enforcement responsibility;, maximizes the  
            capabilities and resources of local enforcement agencies; and  










                                                                     AB 266


                                                                    Page  53





            ensures that there is communication and collaboration between  
            the bureau, relevant state agencies, and local governments to  
            enhance and streamline enforcement efforts  .





          4)Patient Access to Care.  This bill delays implementation of  
            many of these provisions, including promulgating regulations  
            and issuing and requiring conditional licenses until July 1,  
            2017.  However, the bill would delete the provisions  
            authorizing patients and caregivers to be exempt from state  
            criminal sanctions for "collectively or cooperatively"  
            cultivating medical marijuana.  As a result, the author may  
            consider similarly delaying the implementation of that  
            provision until six months after the Bureau begins issuing  
            conditional licenses, or until January 1, 2018.



            On page 37, line 2, insert:  (d) This section shall become  
          operative on January 1, 2018  .





          5)Security and Transportation Provisions.  This bill would,  
            among other things, require all persons who transport medical  
            marijuana to obtain a transporter license, and would require  
            transportation requirements to be adhered to, including  
            transmitting shipping manifests for each shipment, and  
            requiring transport vehicles to be staffed with at least two  
            employees.  In addition, this bill would require all shipments  
            to be weighed, inventoried, and accounted for, on video, prior  










                                                                     AB 266


                                                                    Page  54





            to leavings its location and within eight hours after arrival  
            at its destination.    
            


            While these requirements might make sense to apply to large  
            shipments of medical marijuana, it may not make sense to apply  
            these conditions on smaller shipments, such as for patient  
            deliveries.  As a result, the author may wish to consider only  
            triggering these heightened transportation and security  
            requirements when the shipment is above a certain amount.  





            On page 9, line 30, insert:  "Delivery services" means an  
            individual or entity issued a conditional license by the  
            bureau pursuant to this part and a local license or permit as  
            specified in subdivision (c) of Section 18110, to deliver  
            medical marijuana or medical marijuana products, up to an  
            amount determined by the bureau, to patients, testing  
            laboratories, or to events or locations where it will be used  
            solely for promotional purposes.  Delivery services shall not  
            be required to obtain a transporter license  .





            On page 10, line 21, after "marijuana" insert:  or medical  
            marijuana above a certain amount, as determined by the bureau,  
             and on line 23, after "part" insert:  The transportation  
            security requirements in Section 18122 shall only apply to  
            licensed transporters  .











                                                                     AB 266


                                                                    Page  55









            On page 32, line 7, after "marijuana" insert:  This subdivision  
            shall only apply to medical marijuana above a certain  
            threshold amount, as determined by the bureau  . 





          6)Testing, Health, Safety, and Auditing Standards.  The author  
                                                                               should clarify that the Bureau's authority includes testing,  
            and specify who is responsible for those costs.  The Bureau  
            should also ensure that there are requirements for the Bureau  
            to engage with other state departments that it will rely upon  
            for subject matter expertise in developing health, safety, and  
            appropriate environmental and cultivation standards.  In this  
            vein, the author should adopt the following changes: 



            On page 12, line 26, after "storage," insert:  testing  ,





            On page 13, line 2, after "regulations" insert:  The bureau  
            shall, at a minimum, consult with the State Department of  
            Public Health and the Department of Food and Agriculture when  
            developing these standards  .













                                                                     AB 266


                                                                    Page  56







            On page 14, line 21, after "business," insert:  and specify  
            that the cost of testing shall be borne by the licensed  
            cultivators, how often licensees should test marijuana  ,





            While the author may wish to give the Bureau greater  
            discretion in determining how often audits should occur,  
            whether audits should only be required of dually licensed  
            facilities, and whether the Bureau may prioritize audits based  
            on amount of resources and risk of harm to the public, the  
            author should, at a minimum, authorize the Bureau to determine  
            the type of audit that should be conducted.  





            On page 32, line 8, strike:  audit  and insert:  audit, as  
          specified by the bureau  ,





          1)Labeling of Edible Marijuana Products.  The bill would  
            require, among other things, that medical marijuana products,  
            including edibles, be labeled and include specified  
            information, such as a list of THC and CBD content and clear  
            recommended dosage.












                                                                     AB 266


                                                                    Page  57






            Because medicinal marijuana varies in terms of the levels and  
            types of active ingredient, THC or CBD, for example, and what  
            it is used for varies among patients, it may be difficult to  
            develop a standard "dosage" for products.  As a result, the  
            author may wish to consider clarifying labeling standards in  
            regards to medical marijuana products and requiring products  
            to instead state the amount of THC per milligrams in each  
            serving, and the total amount of THC in a package.  In  
            addition, the author should consider striking provisions that  
            requires edible products to be in opaque packaging and  
            prohibit any packaging from containing photos or images of  
            food, which may cause confusion for consumers and employees.   
            The author should also include a warning to let consumers know  
            that the intoxicating effects of edible medical marijuana  
            products may be delayed to prevent consumers from consuming  
            more than is necessary to alleviate symptoms.  





            On page 40, line 9, strike:  The   and delete lines 10-11





            On page 40, lines 16-17, strike:  an opaque and  and insert:  a  





            On page 40, line 28, insert:  (D) The statement "THE  
            INTOXICATING EFFECTS OF THIS PRODUCT MAY BE DELAYED BY TWO  










                                                                     AB 266


                                                                    Page  58





            HOURS  ."





            On page 40, lines 34-35, strike:  clear recommended dosage, and  
            the size or volume of recommended dose  and insert:  the THC  
            amount in milligrams per serving, servings per package, and  
            the THC amount in milligrams for the package total  





            On page 40, strike lines 37-38





          2)Labor Provisions.  Because this Committee's primary  
            jurisdiction does not include labor and employment, Committee  
            Staff consulted with the Assembly Labor and Employment  
            Committee to review and develop proposed amendments to the  
            bill.  These amendments would simplify the cannabis employee  
            certification, training, and apprenticeship program for  
            cultivation sites and dispensaries, and would require the  
            Division of Labor Standards Enforcement, by January 1, 2017,  
            to convene an advisory committee to evaluate whether there is  
            a need to develop industry-specific regulations related to the  
            activities of licensed facilities, and would require the  
            committee to present to the Occupational Safety and Health  
            Standards Board its findings and recommendations for  
            consideration by the board, and would require the board, by  
            July 1, 2017, to render a decision regarding the adoption of  










                                                                     AB 266


                                                                    Page  59





            industry-specific regulations.



            On page 18, line 40, insert:  Enter into, or demonstrate that  
            it has already entered into, and abide by the terms of a  
            "labor peace agreement" as defined in subdivision (h) of  
            Section 18100.  The bureau may consult with the Division of  
            Labor Standards Enforcement to ensure that the "labor peace  
            agreement" meets the requirements of subdivision (h) of  
            Section 18100  .   





            On page 26, line 17, insert:  (b) Establish registration fees  
            in an amount reasonably necessary to implement this section,  
            not to exceed twenty-five dollars ($25) for the initial  
            registration.  There shall be no fee for annual renewal of  
            registration.  Fees shall be placed in the Cannabis  
            Certification Fund, established pursuant to Section 18135  .





            On page 26, strike lines 17-40, inclusive. 





            On page 27, strike lines 1-13, inclusive, and on lines 24-25,  
            strike:  federal Office of Apprenticeship program or a state  
            apprenticeship program authorized by the federal Office of  










                                                                     AB 266


                                                                    Page  60





            Apprenticeship  and insert:  state-approved apprenticeship  
            program  





            On page 27, line 31, strike:  Certification is not required for  
            any person employed pursuant to Section 18134  and insert:  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 Section 18131 who is  
            responsible for supervising no more than one uncertified  
            person.  The Division of Labor Standards Enforcement may  
            develop additional criteria governing this subdivision  . 





            On page 28, strike lines 21-40, inclusive. 





            On page 29, strike lines 1-40, inclusive. 





            On page 30, strike lines 1-27, inclusive. 











                                                                     AB 266


                                                                    Page  61









            On page 41, line 12, strike:  1158.5  and insert:  147.5  





            On page 41, line 13, insert:  By January 1, 2017, the division  
            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 conditional license  
            pursuant to Part 5 (commencing with Section 18100) of Division  
            7 of the Business and Professions Code  .





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


          


          REGISTERED SUPPORT: 



          League of California Cities (sponsors)











                                                                     AB 266


                                                                    Page  62






          California Police Chiefs Associations (sponsors)


          United Food and Commercial Workers Union - Western States  
          Council


          League of California Cities - Redwood Empire Division


          League of California Cities - Los Angeles County Division


          California Contract Cities Association


          California Narcotic Officers Association


          California College and University Police Chiefs' Association 


          California Association of Code Enforcement Officers


          Association for Los Angeles Deputy Sheriffs


          Los Angeles Police Protective League


          Riverside Sheriffs' Association


          California Communities United Institute










                                                                     AB 266


                                                                    Page  63







          City of Concord


          City of Chino Hills


          City of Clayton


          City of Downey


          City of Encinitas


          City of Fountain Valley


          City of Garden Grove


          City of Indian Wells


          City of Lakeport


          City of Merced


          City of Montclair


          City of Ontario










                                                                     AB 266


                                                                    Page  64







          The City of Rancho Cucamonga


          City of Torrance


          City of Sacramento


          Conscious Cannabis Ventures, support as a work in progress


          Heritage Associates, support as a work in progress


          International Faith Based Coalition




          REGISTERED OPPOSITION:


          California Medical Association


          California NORML


          Coalition for Cannabis Policy Reform


          Marijuana Policy Project











                                                                     AB 266


                                                                    Page  65






          Law Enforcement Against Prohibition


          Emerald Grower Association




          Analysis Prepared by:Eunie Linden / B. & P. / (916) 319-3301,  
          Christian Jagusch / B. & P. / (916) 319-3301