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)
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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.)
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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
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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.
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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
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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.
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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:
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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:
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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.
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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
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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,
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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
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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
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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.
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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.
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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
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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.
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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
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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.
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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
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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
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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
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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.
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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.
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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,
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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
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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,
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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."
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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
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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
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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
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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
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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
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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
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(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
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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
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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
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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
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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
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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
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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
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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
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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 .
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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 .
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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.
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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
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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
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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
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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.
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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)
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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
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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
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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
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Law Enforcement Against Prohibition
Emerald Grower Association
Analysis Prepared by:Eunie Linden / B. & P. / (916) 319-3301,
Christian Jagusch / B. & P. / (916) 319-3301