BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 266
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|AUTHOR: |Bonta |
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|VERSION: |June 30, 2015 |
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|HEARING DATE: |July 8, 2015 | | |
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|CONSULTANT: |Reyes Diaz |
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SUBJECT : Medical cannabis.
SUMMARY : Establishes a joint state-local agency licensing and
regulatory framework for medical cannabis under the Medical
Cannabis Regulation and Control Act, and establishes the Office
of Medical Cannabis Regulation within the Office of the
Governor, the Division of Medical Cannabis Regulation within the
State Board of Equalization, the Division of Medical Cannabis
Manufacturing and Testing within the Department of Public
Health, and the Division of Medical Cannabis Cultivation within
the Department of Food and Agriculture, and sets forth the
duties of the respective regulatory authorities.
Existing law:
1)Requires the Medical Board of California (MBC) within the
Department of Consumer Affairs (DCA) to license, certify, and
regulate physician and surgeons (physician) under the Medical
Practice Act. Requires the MBC to take action against a
physician who is charged with unprofessional conduct, as
specified. Requires the MBC to prioritize its investigative
and prosecutorial resources to ensure that physicians
representing the greatest threat of harm are identified and
disciplined expeditiously, including those with repeated acts
of excessive prescribing, furnishing, or administering of
controlled substances, or repeated acts of prescribing,
dispensing, or furnishing of controlled substances without a
good faith prior examination of the patient and medical reason
therefor.
2)Prohibits physicians from being punished or denied any right
or privilege for having recommended medical marijuana/medical
cannabis (MM) to a patient.
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3)Specifies that prescribing, dispensing, or furnishing
dangerous drugs without an appropriate prior examination and a
medical indication, by a physician, constitutes unprofessional
conduct.
4)Specifies that the employing, directly or indirectly, the
aiding, or the abetting of any unlicensed person or any
suspended, revoked, or unlicensed practitioner to engage in
the practice of medicine or any other mode of treating the
sick or afflicted, which requires a license to practice,
constitutes unprofessional conduct.
5)Prohibits criminal prosecution, pursuant to the Compassionate
Use Act (CUA) of 1996, also known as Proposition 215, of a
"qualified patient," as defined, with specified illnesses or a
patient's "primary caregiver," as defined, for the possession
or cultivation of MM upon the written or oral recommendation
or approval of an "attending physician," as defined.
Encourages federal and state governments to implement a plan
to provide for the safe and affordable distribution of MM to
those who need it. Specifies that existing law related to MM
is not to be construed to supersede legislation prohibiting
conduct that endangers others or to condone the diversion of
MM for nonmedical purposes.
6)Defines "qualified patient" as a person who is entitled to the
protections in the CUA but who does not have a MM
identification card (MMIC). Defines "primary caregiver" as an
individual designated by a qualified patient who has
consistently assumed responsibility for the housing, health,
or safety of that person. Defines "attending physician" as an
individual who possesses a license in good standing to
practice medicine or osteopathy issued by the MBC or the
Osteopathic Medical Board of California and who has taken
responsibility for an aspect of the medical care, treatment,
diagnosis, counseling, or referral of a patient and who has
conducted an appropriate medical examination, as specified,
and determines if MM is appropriate.
7)Prohibits qualified patients and primary caregivers with MMICs
who associate within the state in order to, among other
activities, possess, cultivate, process, and transport MM
collectively or cooperatively from, solely on that basis,
being subject to state criminal sanctions under state laws
that prohibit those activities otherwise.
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8)Requires the Department of Public Health (DPH) to establish
and maintain a voluntary Medical Marijuana Program (MMP) by
which patients can apply for MMICs when deemed appropriate by
his or her attending physician. Requires county health
departments to issue MMICs, as specified, to patients and
primary caregivers who voluntarily register for the MMP.
Specifies that MMICs are valid for one year and may be renewed
annually. Requires DPH to develop a system by which state and
local law enforcement officers can immediately verify the
MMIC's validity. Prohibits state or local law enforcement
officers from refusing to accept MMICs unless there is
reasonable cause to believe that the MMIC is being used
fraudulently or its information is false or fraudulent.
9)Makes it a misdemeanor offense to, among other things,
fraudulently represent a medical condition or provide any
material misinformation to a physician, health department
designee, or to law enforcement, for the purpose of falsely
obtaining MMICs; fraudulently use any person's MMIC in order
to acquire, possess, cultivate, transport, use, produce, or
distribute MM; counterfeit, tamper with, or fraudulently
produce MMICs; and breach any confidentiality requirements
pertaining to the MMIC program.
10)Requires a person who seeks an MMIC to pay a fee and provide
to the county health department a name, proof of residency,
written physician's recommendation, physician's name and
contact information, the primary caregiver's name and duties,
and the qualified patient's and primary caregiver's
government-issued photo ID.
11)Prohibits anything in the MMP from preventing a city or other
local governing body from adopting local ordinances that
regulate the location, operation, or establishment of a MM
cooperative or collective, or prohibiting one from operating
within its borders; enforcing local ordinances for civil or
criminal purposes; or enacting other laws consistent with the
MMP.
12)Designates marijuana as a hallucinogenic substance in
Schedule I of the California Uniform Controlled Substances
Act.
13)States legislative intent for the state to commission
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objective scientific research by the University of California
(UC), and if the Regents of the UC accept the responsibility,
the UC is required to create the California Marijuana Research
Program (CMRP) to develop and conduct studies intended to
ascertain the general medical safety and efficacy of MM and to
develop guidelines for the appropriate administration and use
of MM; requires the CMRP to use a peer review process, as
specified, to guard against funding research that is biased;
requires the CMRP to report to the Legislature, as specified;
and requires the President of the UC to appoint a
multidisciplinary Scientific Advisory Council to provide
policy guidance.
This bill:
Administration
1)Establishes the Medical Cannabis Regulation and Control Act.
2)Creates, within the office of the Governor, the Office of
Medical Cannabis Regulation (OMCR), under the supervision and
control of the Director of the OMCR.
3)Requires the OMCR Director to consult with state agencies
possessing expertise in licensure and enforcement when
developing a regulatory framework pursuant to the provisions
of this bill. Gives the OMCR overall executive authority and
responsibility for implementation of all expects of MM
regulation, as well as coordination and oversight of all
activities.
4)Requires the OMCR to maintain a registry of all permit holders
and maintain a record of all state licenses and "commercial
cannabis activity of the permit holder throughout the length
of licensure and for a minimum of seven years following the
expiration of each license. Requires OMCR to make limited
licensee information available to a licensee so that it may
verify whether it is engaging in commercial cannabis
activities with a properly licensed entity.
5)Establishes the following entities that are required to report
and be directly accountable to the OMCR for their respective
designated responsibilities within the regulatory and
enforcement framework, each to be administered by a Governor's
appointee, subject to Senate confirmation:
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a) The Division of Medical Cannabis Regulation,
within the State Board of Equalization (BOE), to
administer provisions of this bill related to
dispensaries and transporters;
b) The Division of Medical Cannabis Manufacturing
and Testing, within DPH, to administer provisions of
this bill related to manufacturing, testing, and
certification of testing laboratories for MM and MM
products; and,
c) The Division of Medical Cannabis Cultivation,
within the Department of Food and Agriculture (DFA),
to administer provisions of this bill pertaining to
cultivation of MM.
6)Requires the California Environmental Protection Agency and
the California Natural Resources Agency to coordinate and
direct the following entities in the discharge of their
designated regulatory responsibilities:
a) The State Water Resources Control Board in
promulgating regulations related to discharge
into waterways, and diversion therefrom,
resulting from MM cultivation; and,
b) The Department of Fish and Wildlife in
promulgating regulations for the protection of
any species affected by cultivation activity, and
regulations for any cultivation-related
development, including alteration of waterways.
7)Requires the Department of Justice (DOJ) to conduct the
following activities:
a) Conduct criminal background checks of
applicants for licensure;
b) Develop uniform security standards for
dispensaries and all phases of transport
covered by provisions of this bill; and,
c) Provide supplemental enforcement on an
as-needed basis at the request of the OMCR.
8)Gives authority to OMCR and licensing authorities to implement
provisions of this bill, including, but not limited to,
establishing rules and regulations; prescribing, adopting, and
enforcing emergency regulations as necessary; issuing state
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licenses to persons for the cultivation, distribution,
manufacture, transportation, and retail sale of MM within the
state; setting application, licensing, and renewal fees for
state licenses; establishing standards for commercial cannabis
activity; establishing procedures for the issuance, renewal,
suspension, denial, and revocation of state licenses; imposing
penalties; taking action with respect to an application for a
state license; overseeing the operation of the Medical
Cannabis Regulation Fund; and consulting with other state or
local agencies, departments, representatives of the MM
community, or public or private entities for the purposes of
establishing statewide standards and regulations. Requires the
public's health and safety to be the highest priority for the
OMCR and the licensing authorities in exercising licensing,
regulatory, and disciplinary functions.
9)Requires the OMCR, by April 1, 2016, to convene a task force
to advise the OMCR on the development of standards,
recommending appropriate roles for each state entity, and
recommending guidelines on communication and information
sharing between state entities, and with local agencies.
Requires the task force to submit a report on the standards,
determinations, and guidelines for implementation of
provisions of this bill to the Legislature and affected state
entities by August 1, 2016. Requires the task force to be
comprised of 15 members, each of whom is required to serve a
two-year term, as specified.
10)Requires each task force member to serve on a voluntary basis
and to be responsible for costs associated with participation.
Specifies that the licensing authorities are not responsible
for travel costs incurred by task force members or for
otherwise compensating task force members for costs associated
with their participation.
Recommending MM
11)Makes it unlawful for a physician who recommends MM to
accept, solicit, or offer any form of remuneration from or to
a MM facility issued a state license if the physician or his
or her immediate family have a financial interest in that
facility. Makes a violation of this provision a misdemeanor.
12)Requires the MBC to consult with the CMRP on developing and
adopting medical guidelines for the appropriate administration
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and use of MM.
13)Prohibits a physician from recommending MM to a patient,
unless that person is the patient's attending physician.
14)Adds to the MBC's list of cases to investigate, on a priority
basis, a physician recommending MM to patients for medical
purposes without a good faith prior examination of the patient
and medical reason therefor.
15)Specifies that recommending MM to a patient for a medical
purpose without an appropriate prior examination and a medical
indication constitutes unprofessional conduct.
16)Specifies that a person who practices medicine who is
employed by, or has any other agreement with, a mandatory
commercial licensee acting pursuant to the provisions of this
bill or a dispensary to provide recommendations for MM
constitutes unprofessional conduct.
Enforcement and local control
17)Requires each licensing authority to work in conjunction with
local agencies for the purposes of implementing,
administering, and enforcing provisions of this bill, and any
regulations adopted, and taking appropriate action against
licensees and others who fail to comply with the bill's
provisions or regulations. Specifies that, except for
employees of the BOE, the director and employees of licensing
authorities who administer and enforce provisions of this bill
are peace officers in enforcing penal provisions, regulations,
and any other penal provisions of law prohibiting or
regulating the cultivation, processing, storing,
manufacturing, testing, transporting, or selling of MM.
18)Specifies that these persons, while acting as peace officers,
may enforce any penal provisions of state law while in the
course of their employment. Allows these peace officers to
visit and inspect the premises of a licensee.
19)Specifies that peace officers of the California Highway
Patrol (CHP), members of the University of California and
California State University police departments, and peace
officers of the Department of Parks and Recreation, as
specified, may visit and inspect the premises of a licensee.
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20)Requires the OMCR, by January 1, 2017, in consultation with
local governments, to develop an enforcement framework that
clarifies the enforcement roles of the state and local
governments consistent with provisions of this bill. Specifies
that local agencies are authorized to enforce any state
statutory or regulatory standard. Specifies that a state
agency is not required to enforce a city, county, city and
county, or local law, ordinance, rule, or regulation regarding
the site or operation of a facility or transporter issued a
state license.
21)Gives cities full power and authority to enforce rules,
regulations, and standards promulgated by the OMCR for
facilities that are issued a state license and are located
within the incorporated area of a city. Requires a city to
further assume complete responsibility for any regulatory
function relating to those licensees within city limits that
would otherwise be performed by the county or any county
officer or employee, including a county health officer,
without liability, cost, or expense to the county. Gives
counties full power and authority to enforce rules,
regulations, and standards promulgated by the OMCR for
licensed facilities located within the unincorporated area of
a county.
22)Requires all standards and regulations promulgated to be the
minimum standards and regulations for obtaining and
maintaining a state license. Requires state agencies to
collaborate with local agencies to enforce state standards and
regulations to the extent it is within the scope of other
statutory responsibilities of local agencies and to the extent
that resources for enforcement are available to the local
agencies. Allows a city, county, or city and county to adopt
ordinances that establish additional standards, requirements,
and regulations for local licenses and permits for commercial
cannabis activity. Requires the state to preempt local
ordinances for all conflicts between state and local
standards, requirements, and regulations regarding health and
safety, testing, security, and worker protections.
23)Allows the director of a licensing authority or a district
attorney, county counsel, city attorney, or city prosecutor to
bring an action to enjoin a violation or the threatened
violation of any provision of this bill, including, but not
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limited to, a licensee's failure to correct objectionable
conditions. Requires a state or local agency to immediately
notify the OMCR and the appropriate licensing authority of
violations or arrests made for violations over which the
licensing authority has jurisdiction that involve a licensee
or licensed premises.
24)Requires the OMCR to establish procedures to provide any
relevant state or local agencies and all licensing
authorities, upon their request, with 24-hour access to
information to verify a state license, track transportation
manifests, and track the inventories of facilities issued a
state license, as specified.
25)Prohibits the enforcement and local control provisions of
this bill from superseding the provisions of Measure D,
approved by the voters of the City of Los Angeles (L.A.) on
the May 21, 2013, ballot, which provides potential limited
immunity to MM businesses, as specified. Requires MM
businesses within L.A. to continue to be subject to Measure D
and any and all other applicable ordinances and regulations of
L.A. Requires the BOE to enter into a memorandum of
understanding with L.A. to establish protocols for the
following:
a) Tracking businesses granted immunity pursuant
to Measure D;
b) Tracking MM and MM products to and from L.A;
and,
c) Allowing for the legal transfer or MM and MM
products from outside the jurisdiction of L.A. to
within the city by licensees conducting commercial
cannabis activities outside of the city.
26) Requires a person engaging in commercial cannabis activity
without a license to be subject to civil penalties of up to
twice the amount of the licensee fee for each violation.
Allows the OMCR, licensing authority, or court to order the
destruction of MM associated with the violation.
27)Specifies that the provisions of this bill do not prevent a
city, county, or city and county from doing any of the
following:
a) Adopting local ordinances, whether consistent
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or inconsistent with enforcement and local control
provisions, that do the following:
i. Regulate the location, operation,
or establishment of a licensee or a person that
cultivates, processes, possesses, stores,
manufactures, tests, transports, distributes, or
sells MM.
ii. Prohibit MM activity within their
jurisdiction.
b) Providing for the administrative, civil, or
criminal enforcement of the ordinances described in
a.) above.
c) Establishing a fee for the operation within
its jurisdiction of any of the following:
i. A licensee.
ii. Another person that cultivates,
processes, possesses, stores, manufactures,
tests, transports, distributes, or sells MM or MM
products.
iii. A person exempt from licensure.
d) Enacting and enforcing other laws and
ordinances to preserve local control.
28)Requires CHP to establish protocols to determine whether a
driver is operating a vehicle under the influence of MM and
requires CHP to develop protocols setting forth best practices
to assist law enforcement agencies.
Licensure
29)Requires DFA to license cultivators; BOE to license
dispensaries and transporters; and DPH to license
manufacturers and certified testing laboratories.
30)Specifies that the licensure provisions of this bill do not
apply to: a) qualified patients, pursuant to the CUA, who
cultivate, possess, store, manufacture, or transport MM
exclusively for personal medical use but who do not provide,
donate, sell, or distribute MM to any other person; or b)
primary caregivers who cultivate, possess, store, manufacture,
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transport, donate, or provide MM exclusively for the personal
medical purposes of no more than five specified qualified
patients for whom he or she is the primary caregiver, but who
does not receive remuneration for these activities except for
compensation in full compliance with provisions of the MMP.
31)Specifies that exemption from licensure for qualified
patients and primary caregivers does not limit or prevent a
city, county, or city and county from regulating or banning
the cultivation, storage, manufacture, transport, provision,
or other activity by the exempt person, or impair the
enforcement of that regulation or ban.
32)Requires licensing authorities to promulgate regulations for
implementation and enforcement of licensure, including, among
various requirements, an applicant's qualifications and a
state licensee's employee qualifications, including training
and screening.
33)Allows licensing authorities to issue state licenses only to
qualified applicants engaging in commercial cannabis activity
and prohibits, beginning January 1, 2018, a person from
engaging in commercial cannabis activity without possessing a
state license and a local permit. Requires local permits to be
determined by local ordinances. Gives authority to revoke
state licenses and local permits to the respective licensing
authorities and local agencies. Prohibits a licensing
authority from issuing a license to an applicant who proposes
to operate within L.A., regardless of the activity for which
the license is sought.
34) Requires an applicant for a state license to, among other
requirements: pay a fee; register with the licensing
authority; provide a written description of the scope of
business of the proposed facility; provide evidence that the
applicant and owner have been legal full-time residents of the
state for not less than four years; provide detailed written
operating procedures; submit the applicant's fingerprints to
the DOJ; and, provide any information required by the
licensing authority.
35)Specifies that revocation of a state license or local license
or permit, terminates the ability of a MM business to operate
within the state. Requires licensing authorities to, by
regulation, prescribe conditions upon which a person whose
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state license has previously been denied, suspended, or
revoked may be issued a state license.
36)Allows each licensing authority to deny an application for
licensure or renewal, or suspend or revoke a state license for
various reasons, including, but not limited to, making untrue
statements, conduct that constitutes fraud or gross
negligence, failure to comply with any rule or regulation,
failure to submit requested information, and if an applicant,
or any of its officers, directors, or owners, have been
convicted of a felony criminal conviction for the possession
for sale, sale, manufacture, transportation, or cultivation of
a controlled substance, including a narcotic drug classified
in Schedule II, III, IV, or V (but excluding marijuana), for
drug trafficking involving a minor, a violent felony, a
serious felony, a felony offense involving fraud or deceit, or
any other felony that, in the licensing authority's
determination, would impair the applicant's ability to
appropriately operate as a state licensee. Allows a licensing
authority, at its discretion, to issue a state license to an
applicant that has obtained a certificate of rehabilitation (a
Governor's pardon).
Regulation of MM
37)Repeals existing law that allows qualified patients and their
primary caregivers to collectively or cooperatively cultivate
MM for medical purposes 180 days after the OMCR posts a notice
on its Internet Web site that licensing authorities have
commenced issuing provisional licenses, as specified.
38)Requires all licensees holding cultivation or manufacturing
licenses to send all MM and MM products to a licensed
processor for processing and testing prior to retail or sale
of MM or MM products to a dispensary, qualified patient, or
caregiver. Requires MM and MM products to be tested by a
certified testing laboratory, licensed by DPH, prior to retail
sale or dispensing to test for potency, pesticides, mold, and
other contaminants of MM dried flower and for potency and
purity of MM extracts.
39)Requires BOE to adopt a MM and MM product track and trace
process for reporting the movement of MM items throughout the
distribution chain that also employs secure packaging and that
is capable of providing information that captures, at a
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minimum, the licensee receiving the product; the transaction
date; and any other information deemed necessary by BOE for
the taxation and regulation of MM and MM products.
40)Requires licensing authorities to develop a database
containing the electronic shipping manifests to be designed to
flag irregularities for a licensing authority to investigate.
41)Prohibits MM packages and labels from being made to be
attractive to children. Requires MM product labels to include,
but not limited to, the following statements: "Keep out of
reach of children and animals"; "For medical use only"; "The
intoxicating effects of this product may be delayed by up to
two hours"; and warnings if nuts or other known allergens are
used.
Cannabis employee certification and apprenticeship
42)Requires the Division of Labor Standards Enforcement (DLSE),
within the Department of Industrial Relations (DIR), to
maintain minimum standards for the competency and training of
employees of a licensed cultivator or dispensary through a
system of testing and certification; maintain an advisory
committee and panels as necessary; adopt regulations; issue
certification cards to certified employees; and establish
registration fees. Requires, by January 1, 2017, the DSLE to
develop a certification program for cannabis employees.
Requires all employees performing work as cannabis employees
to be certified by January 1, 2019.
Taxation
43)Allows the OMCR and other state agencies to assist state
taxation authorities in the development of uniform policies
for the state taxation of state licensees. States legislative
intent to grant authority to the board of supervisors of a
county to impose appropriate taxes on facilities licensed
pursuant to provisions of this bill.
Reporting
44)Requires, on or before March 1 of each year, the director of
the OMCR to prepare and submit to the Legislature an annual
report on OMCR's activities and post it on OMCR's Internet Web
site to include, but not be limited to:
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a) The amount of funds allocated and spent by
OMCR and licensing authorities for MM licensing,
enforcement, and administration;
b) The number of state licenses issued, renewed,
denied, suspended, and revoked, by state license
category;
c) The average time for processing state license
applications, by state license category;
d) The number and type of enforcement activities
conducted by the licensing authorities and by local
law enforcement agencies in conjunction with the
licensing authorities or the OMCR; and,
e) The number, type, and amount of penalties,
fines, and other disciplinary actions taken by the
licensing authorities.
Privacy
45)Deems as confidential any information identifying the names
of qualified patients, their medical conditions, or the names
of their primary caregivers received and contained in records
kept by the OMCR or licensing authorities for the purposes of
administering provisions of this bill, and prohibits
disclosure pursuant to the California Public Records Act.
FISCAL
EFFECT : According to the Assembly Appropriations Committee:
1)Significant annual costs, likely in excess of $10 million
(Medical Cannabis Regulation Fund/General Fund (GF) or special
funds), to create the Division of Medical Cannabis Regulation
within the BOE to license dispensaries and transporters.
Significant costs would be incurred before fees are collected,
and this bill does not specify a funding source startup costs.
Funds would likely come from the GF for at least the first
year, until sufficient fee revenue is generated.
2)Annual costs, likely in the range of several million dollars
to DPH for regulation of manufacturing and testing (Medical
Cannabis Regulation Fund/GF or special funds), as well as DFA
for regulation of cultivation sites (Medical Cannabis
Regulation Fund/GF or special funds). Funds would likely come
from the GF or special funds for at least the first year until
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sufficient fee revenue is generated.
3)This bill establishes unspecified fees that must be sufficient
to cover regulatory costs. The costs of creating and
maintaining the regulatory infrastructure would require
significant application fees. For purpose of illustration, the
average fee to cover a $20 million cost, if there were 2,000
annual applications, would be $10,000 per application.
4)Minor and absorbable costs to the MBC associated with
provisions defining specified employment and prescribing
behavior as unprofessional conduct.
5)One-time costs to DIR to certify cultivation and dispensing
employees, adopting regulations related to apprenticeship
programs, and examining the need for industry-specific
regulations, in the range of $1.3 million (GF or special
funds), and $900,000 annually ongoing (fee-supported Cannabis
Certification Fund/GF or special funds).
6)Unknown costs, potentially in the range of $1 million GF to
CHP to develop a test determining whether a driver is
operating a vehicle under the influence of cannabis, and to
develop related protocols.
7)Minor ongoing costs to DOJ for background checks, covered by
applicant fees.
Tax and penalty revenue:
1)Unknown moderate local revenue increase, potentially in the
millions of dollars, from a permissive and unspecified local
tax.
2)Unknown fine and penalty will be deposited in the fines and
penalties account in the Fund. Penalties are specified as
twice license fees, which are unknown. Additionally, each
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regulatory authority is authorized to define fines and
penalties. Potential GF revenue if actions are brought by the
Attorney General.
PRIOR
VOTES :
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|Assembly Floor: |62 - 8 |
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|Assembly Appropriations Committee: |12 - 0 |
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|Assembly Business and Professions |13 - 0 |
|Committee: | |
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COMMENTS :
1)Author's statement. According to the author, after becoming
the first state in the nation to allow the use of MM with the
approval of Proposition 215, California has fallen behind the
nation and failed to implement a comprehensive licensing and
regulatory structure to ensure patient access and protect our
environment, public safety, and public health. AB 266
approaches regulation applying existing regulatory frameworks
to the industry while adapting for the unique and historical
circumstances surrounding MM. AB 266 respects local decisions
on the regulation of MM, including the decision to ban, and
incorporates local control throughout the regulatory process,
including the issuance of state and local licenses. AB 266
protects patients by requiring compliance with stringent
regulatory requirements, preserves the environment by building
on the existing interagency task force work in this field, and
ensures that workers in the cannabis industry are treated
fairly and receive equal protections. AB 266 combines the
input of stakeholders throughout the state to create
thoughtful, effective regulations that fit within our existing
regulatory frameworks for other products, comply with federal
goals, and create a better system for the entire life cycle of
MM treatment.
2)MBC policy on MM. In October 2014, the MBC revised its
statement, originally issued in May 2004, on the CUA and a
physician's role in recommending MM. The MBC states that
physicians who recommend MM will not be subject to
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investigation or disciplinary action by the MBC if the
decision to recommend MM is made in accordance with accepted
standards of medical responsibility, which MBC states is not
specifically defined. The statement also indicates that a mere
complaint that a physician is recommending MM will not
generate an investigation absent information that a physician
is not adhering to accepted medical standards. According to
the MBC, while MM is not subject to reporting to the DOJ's
Controlled Substance Utilization Review and Evaluation System,
MM recommendations are treated like any prescription for a
controlled substance, meaning there are no added training
requirements for prescribing a certain type of controlled
substance. The MBC also indicates that it does not track
complaints by controlled substance but rather by allegations
against a physician, such as unprofessional conduct.
3)CUA. Since the approval of the CUA by voters in 1996, state
law has allowed Californians access to MM, and prohibits
punitive action against physicians for making MM
recommendations. The CUA established the right of patients to
obtain and use MM to treat specified illnesses and any other
illness for which it provides relief. The CUA prohibits
prosecution for cultivating or possessing MM for qualified
patients and their primary caregivers. Additionally, the CUA
specifically protects physicians who recommend the use of MM
to patients, and exempts qualified patients and their primary
caregivers from California drug laws prohibiting possession
and cultivation of MM. Proponents of MM regulation argue that
very little has been done to implement the CUA. Instead of a
comprehensive implementation plan, numerous uncoordinated
bills have been introduced in the Legislature. Further, the
courts have only provided a small measure of clarity and
certainty in this area.
4)MMP. The MMP was established by SB 420 (Vasconcellos, Chapter
875, Statutes of 2003) to create a state-authorized system by
which qualified patients and their primary caregivers could
obtain MMICs, along with a registry database for verification
of the MMICs. Participation by patients and primary
caregivers in the MMP is voluntary. The Web-based registry
allows law enforcement and the public to verify the validity
of a qualified patient or primary caregiver's MMIC as
authorization to possess, cultivate, transport, and/or use MM
within the state. Under the MMP, the local county health
department issues MMICs and collects fees. The MMIC is valid
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for one year, after which it may be renewed. A primary
caregiver's card expires when the patient's card expires.
Patients are responsible for notifying the county within seven
days when they change primary caregivers and must instruct the
previous primary caregiver to return the MMIC to the county
for confidential destruction.
In order to receive an MMIC, patients must reside in the
county where they apply, present the physician recommendation
for MM, and pay the fee required by the county. If the primary
caregiver lives in a different county, he or she must obtain
an MMIC in the county where the patient lives. A patient or
primary caregiver is not required to obtain an MMIC or to
participate in the MMP in order to use, obtain, possess, or
cultivate MM upon the recommendation of a physician pursuant
to the CUA.
5)Recent Court Cases and Rulings. The Legislature sought to
clarify the CUA in 2003 through SB 420 by establishing the
MMP. SB 420 set limits on the amounts of MM to be legally
grown and possessed. However, the California Supreme Court
ruled in People v. Kelly (2010) 47 Cal.4th 1008 that the MMP
section limiting quantities of MM is unconstitutional because
it amends a voter initiative, and the CUA did not specifically
include legislative authority to amend it. Additionally, the
U.S. Supreme Court ruled in Gonzales v. Raich (2005) 545 U.S.
1 that the federal government can enforce marijuana
prohibition despite state MM laws. Meanwhile, many city and
county officials have expressed confusion about the scope of
state MM law, and some have passed ordinances that have been
overturned by the courts.
The California Supreme Court recently granted review in
several cases related to the rights of MM qualified patients
and dispensaries, specifically the legality of local rules
regarding the operation and location of dispensaries and
cultivation sites. Pack v. City of Long Beach (review granted
Jan. 18, 2012, S197169) was dismissed as being moot because
the issue the Court was considering resolved itself. The
original ordinance at issue was repealed and replaced by
Ordinance No. 12-0004, which bans MM in the county. In 2013,
the Court, in City of Riverside v. Inland Empire Patient's
Health and Wellness Center, upheld that local governments
have inherent zoning power. The issue in this case was
whether California's MM statutes preempt a local ban on
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facilities that distribute MM. The Court concluded they do
not and upheld the City of Riverside's implementation of a
ban on MM dispensaries and on any facility that is prohibited
by federal or state law. People v. G3 Holistic (review
granted Jan. 18, 2012, S198395) was dismissed and remanded
based on the Riverside case.
6)California Attorney General's Compassionate Use Guidelines. SB
420 additionally required the California Attorney General to
adopt guidelines to ensure the security and non-diversion of
MM. To fulfill this mandate, in August 2008, the Attorney
General published Guidelines for the Security and
Non-Diversion of Marijuana Grown for Medical Use. The
Guidelines are intended to: a) ensure that MM remains secure
and does not find its way to non-patients or illicit markets,
b) help law enforcement agencies perform their duties
effectively and in accordance with California law, and c) help
qualified patients and primary caregivers understand how they
may cultivate, transport, possess, and use MM under California
law.
7)Marijuana: A Schedule I Drug. Even though California voters
enacted the CUA to permit the use of MM by persons deemed
qualified by their physicians, marijuana still is an illegal
drug both under federal and state law, and its use,
possession, distribution, cultivation, or sale carries
criminal penalties. Under California law, marijuana is listed
as a hallucinogenic substance in Schedule I of the California
Uniform Controlled Substances Act. Under federal law,
possession of marijuana, even by medical users, continues to
be a crime. The federal Controlled Substances Act specifies
that, except as provided, it is unlawful for any person
knowingly or intentionally to manufacture, distribute, or
dispense, or possess with intent to manufacture, distribute,
or dispense a controlled substance. The only exception
provided in the federal Controlled Substances Act for
marijuana is for use in government-controlled research
projects.
8)U. S. Department of Justice Guidance Regarding Marijuana
Enforcement. In August of 2013, the U.S. Department of
Justice (USDOJ) issued a memorandum titled "Guidance Regarding
Marijuana Enforcement" to all U.S. Attorneys. The memorandum
updated the prior guidance given by USDOJ regarding marijuana
enforcement under the federal Controlled Substances Act, in
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light of state ballot initiatives that legalize marijuana
under state laws and that provide for the possession and use
of small amounts of marijuana.
While affirming that marijuana is still, at the federal level,
considered a dangerous drug and that the illegal distribution
and sale of marijuana is a serious crime, the memorandum
outlines enforcement priorities that are particularly
important to the federal government, including: 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. The
document clearly lays out the federal expectation for the
states that have legalized marijuana, even if only for medical
purposes, that they will develop a robust system of regulation
and enforcement, and that such a system will reduce the
likelihood of federal enforcement activity.
9)Regulation in other states. Currently, twenty-three states and
the District of Columbia have laws related to MM or create a
cannabis program or legal provisions to allow for the medical
use of marijuana. These states also typically have a patient
registry to provide for some protection against arrest for
possession of MM, up to a certain amount. Twelve additional
states have laws providing for limited access to MM products
strictly for medical purposes. In these states, a focus is on
authorizing access to accommodate clinical research and
clinical research trials, such as experimental treatments of
seizure disorders or epilepsy.
Four states authorize the recreational use of marijuana. In
Alaska, adults age 21 and older can now transport, buy, or
possess up to one ounce of marijuana and six plants. Oregon
voters approved a similar measure allowing adults to possess
up to one ounce of marijuana in public and eight ounces in
their homes, set to take effect July 1. Most recently, a
measure approved by voters went into effect in the District of
Columbia that legalizes possession of small amounts of
marijuana. Colorado and Washington previously passed similar
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ballot measures legalizing marijuana in 2012.
10)Lessons learned from other states. The experiences of other
states have helped to inform the current conversation in
California. Notably, this bill establishes standards for
transport of MM products and security surrounding transport,
proper preparation, and labeling of edible MM products and
requirements for testing of products. Other states have
attempted to ensure safety for the transit of these products,
particularly given the high value of products and tendency
toward cash transactions in the industry. However in
Washington and Oregon, third-party carriers are not permitted,
creating challenges for transport of products. Colorado
authorizes third-party carriers with proper documentation to
transport these products. Private transport companies which
often employ armed personnel are being utilized in states that
authorize MM use and regulate marijuana for recreational
purposes. Efforts to create a regulatory environment
specifically for the transport of products could also result
in an increase in the use of private security firms here. With
regards to edible MM products, concerns have been raised over
the lack of proper labeling and dosage in other states, and
efforts aimed at preventing accidental ingestion (such as
labeling requirements) are taking shape. Edible products often
produce delayed and longer-lasting results than other methods
of delivery, and consumers may be harmed by a lack of accuracy
in information about the potency of edible MM products and a
lack of awareness by patients of the amount of THC they may be
ingesting. This bill also sets standards for testing MM
products and the certification of testing laboratories. A
report to the Oregon Legislature noted that, in the absence of
any guidance from the United States Department of Agriculture
and the Food and Drug Administration, many state regulatory
agencies have determined that some safety testing of MM
products is better than no safety testing, but that assumption
creates other challenges when testing is done at unregulated
or potentially substandard facilities, and products
potentially end up being sold with certificates of safety that
may not be true or authentic and could in fact be misleading.
Health risks have been cited for MM products that are treated
with pesticides or other contaminants, and proper testing by
certified laboratories, as this bill establishes, is seen as
an important measure to ensure product quality.
11)Double referral. This bill will be referred to the Senate
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Governance and Finance Committee if it passes out of this
committee.
12)Related legislation. SB 643 (McGuire), establishes within DCA
a Bureau of MM Regulation, under the supervision and control
of the Chief of the Bureau of MM Regulation, and requires the
bureau to license and regulate dispensing facilities,
cultivation sites, transporters, and manufacturers of MM and
MM products, subject to local ordinances, and enforced
primarily at the local level. SB 643 is set for hearing in the
Assembly Business and Professions Committee on July 7, 2015.
AB 243 (Wood), requires all MM cultivation to be conducted in
accordance with state and local laws and best practices, as
specified, and requires state agencies to address
environmental impacts of MM cultivation and coordinate with
local governments in enforcement efforts. AB 243 is set for
hearing in the Senate Governance and Finance Committee on July
8, 2015.
AB 26 (Jones-Sawyer) and AB 34 (Bonta) were substantively
similar to previous legislative efforts and aimed to enact the
Medical Cannabis Regulation and Control Act and would have
created the Division of Medical Cannabis Regulation and
Enforcement within the Department of Alcoholic Beverage
Control (ABC). AB 266 (Cooley) was very similar to SB 643 and
also would have created a Bureau of MM Regulation within DCA.
These three bills were merged to create this current bill.
13)Prior legislation. SB 1262 (Correa, 2014), was very similar
to a previous version of this bill and SB 643, and would have
created a Bureau of MM Regulation within DCA. SB 1262 was held
under submission in the Assembly Committee on Appropriations.
AB 1894 (Ammiano, 2014), would have established the Medical
Cannabis Regulation and Control Act and created the Division
of Medical Cannabis Regulation and Enforcement within the ABC
for the purpose of registering people for the cultivation,
manufacture, testing, transportation, storage, distribution,
and sale of MM within the state subject to specified
exemptions for a city or county; provided that the ABC
director and its employees who administer and enforce
provisions of the Act are peace officers; required the ABC to
work with law enforcement entities to implement and enforce
AB 266 (Bonta) Page 23 of ?
the rules and regulations regarding MM and to take appropriate
action against businesses and individuals that fail to comply
with the law; and authorized a board of supervisors of a
county and the governing body of a city to levy, increase, or
extend transactions and use taxes on the retail sale of or
storage, use, or other consumption of MM or MM-infused
products. AB 1894 failed on the Assembly floor.
AB 604 (Ammiano, 2013), was substantially similar to AB 1894.
AB 604 failed in the Senate Committee on Public Safety.
SB 439 (Steinberg, 2013), would have exempted MM collectives
and cooperatives from criminal liability for possession,
cultivation, possession for sale, sale, transport,
importation, and furnishing MM; also clarified MBC enforcement
of MM recommendations, what constitutes unprofessional
conduct, and the bar on the corporate practice of medicine. SB
439 was last set for hearing in the Assembly Committee on
Health on August, 13, 2013. The hearing was canceled at the
author's request. On April 21, 2014, SB 439 was gutted and
amended to a new purpose.
AB 473 (Ammiano, 2013), would have enacted the MM Regulation
and Control Act, and created a Division of MM Regulation and
Enforcement in the ABC to regulate the cultivation,
manufacture, testing, transportation, distribution, and sale
of MM. AB 473 failed passage on the Assembly Floor.
AB 2312 (Ammiano, 2012), would have established a nine-member
Board of MM Enforcement within DCA to regulate the MM industry
and to collect fees from MM businesses to be deposited into a
new MM Fund. AB 2312 would have authorized local taxes on MM
up to five percent. AB 2312 was never heard in the Senate
Committee on Business, Professions, and Economic Development.
AB 2465 (Campos, 2012), would have made patient and primary
caregiver MMICs mandatory and required MM collectives to keep
copies of members' MMICs. AB 2465 was never heard in the
Assembly Committee on Public Safety.
SB 1182 (Leno, 2012), would have exempted a MM cooperative or
collective that operates within the Attorney General's
guidelines from being subject to prosecution for MM possession
or commerce, as specified; exempted such an entity and its
employees, officers, and members from being subject to
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prosecution for MM commerce because the entity or its
employees, officers, or members received compensation for
actual expenses incurred in carrying out activities in
compliance with the guidelines. SB 1182 died on the Senate
Inactive File.
SB 129 (Leno, 2012), would have prohibited employment
discrimination on the basis of a person's status as an MM
patient or on the basis of the person's positive drug test for
MM, provided that the person is a qualified patient and the
use of MM does not occur at the place of employment or during
hours of employment. SB 129 died on the Senate Inactive File.
AB 1300 (Blumenfield, Chapter 196, Statutes of 2011), permits
a local government to enact an ordinance regulating the
location, operation, or establishment of an MM cooperative or
collective. Authorizes a local government to enforce such
ordinances through civil or criminal remedies and actions;
authorizes the local government to enact any ordinance that is
consistent with the MMP.
AB 1017 (Ammiano, 2011), would have made the cultivation of
marijuana, except as allowed by the MMP, punishable as a
misdemeanor with a penalty of imprisonment in a county jail
for a period of not more than one year. AB 1017 died on the
Assembly Inactive File.
AB 223 (Ammiano, 2011), would have specified that the CUA does
not authorize a person with an MMIC to engage in the smoking
of MM within 600 feet of the grounds of a school, recreation
center, or youth center, unless it occurs within a residence
or within a MM cooperative, collective, or dispensary. AB 223
was never heard in the Assembly Committee on Public Safety.
SB 626 (Calderon, 2011), would have required the 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 MM and ensure proper regulation of the
cultivation, transportation, and distribution of MM and
MM-based products. SB 626 was held under submission in the
Senate Committee on Appropriations.
SB 847 (Correa, 2011), would have prohibited any entity that
possesses, cultivates, or distributes MM from locating within
600 feet of a residential area unless a local ordinance has
AB 266 (Bonta) Page 25 of ?
been adopted to specifically regulate the location of these
entities in relation to residential use. SB 847 was vetoed by
Governor Brown who stated that he had signed AB 1300, which
gave cities and counties authority to regulate MM dispensaries
and that SB 847 went in the opposite direction by preempting
local control and prescribing the precise locations where
dispensaries may not be located.
AB 2650 (Buchanan, Chapter 603, Statutes of 2010), prohibits
an MM cooperative, collective, dispensary, operator,
establishment, or provider authorized by law to possess,
cultivate, or distribute MM that has a storefront or mobile
retail outlet from being located within a 600-foot radius of
any public or private school providing instruction in
kindergarten or grades 1 to 12, except as specified; provides
that local ordinances, adopted prior to January 1, 2011, that
regulate the location or establishment of MM establishments
are not preempted by its provisions.
SB 1098 (Migden, 2008), would have required the BOE to
administer a tax amnesty program, as specified, for MM
dispensaries, as defined. SB 1089 was never heard in the
Senate Committee on Revenue and Taxation.
SB 420 (Vasconcellos), established the MMP Act, a statewide,
voluntary program for the issuance of MMICs to identify
persons authorized to engage in the use of MM.
SB 295 (Vasconcellos, Chapter 704, Statutes of 2003),
eliminated the CMRP's three-year duration limit, which was
established pursuant to SB 847.
SB 847 (Vasconcellos, Chapter 750, Statutes of 1999), provided
that the UC Regents, if they elected to do so, could implement
a 3-year program, the CMRP, under which funds would be
provided for studies intended to ascertain the general medical
safety and efficacy of MM and, if found valuable, to develop
medical guidelines for the appropriate administration and use
of MM.
14)Support. Supporters of this bill, comprised of cities, write
to state that this bill gives what the state has lacked since
voters approved the CUA: a responsible framework for MM
distribution that upholds local control, addresses public
safety concerns, and includes important health and safety
AB 266 (Bonta) Page 26 of ?
requirements. Supporters argue that past legislative attempts
sought to preempt local control. Supporters further argue that
they are on the front lines on the issue of MM along with
local police departments, and have to cope with the effects of
the current chaotic regulatory structure for MM on a daily
basis. Supporters believe that local governments should have a
prominent role in any framework for MM, including meaningful
enforcement powers.
15)Support if amended. The California State Association of
Counties (CSAC) states that there are additional amendments
they would like to see, including clarifying the state's
overall role in the regulatory structure, deleting language
related to unadulterated food products under the definition of
edibles, the addition of a county supervisor to the list of
representatives on the task force, and clarifying the language
related to the county taxing authority. The Rural County
Representatives of California share the same outstanding
concerns as CSAC, with the addition of needed strengthening of
the license requirements and addressing responsibility for
edible MM product standards.
16)Oppose unless amended. The American Civil Liberties Union
(ACLU) of California writes in opposition based on the bill's
language to allow local jurisdictions to completely ban
qualified patients from possessing or cultivating MM, in
violation of the CUA. ACLU also states that the bill imposes
licensing and employment restrictions that are vague and may
lead to the unnecessary denial of employment and/or licensing
to large numbers of people with non-violent criminal
convictions, particularly people of color. Legal Services for
Prisoners with Children (LSPC) writes in opposition that the
provision of this bill prohibiting people with felonies from
participating in the newly regulated MM industry creates a
barrier to successful community reentry, and would like to see
that provision removed. LSPC argues that this provision
needlessly entrenches stigma and marginalization without
increasing public safety or economic opportunity. LSPC further
states that even people with long, successful, responsible
experience in the MM industry would be excluded. LSPC states
that the "War on Drugs" has been applied unfairly across
racial lines. The Fresno Cannabis Association (FSA) writes in
opposition unless the bill is amended to prohibit local bans
on MM dispensaries and/or cultivation. FSA states that many
local governments have banned all forms of personal
AB 266 (Bonta) Page 27 of ?
cultivation with more bans likely. FSA argues that MM is a
medicine, and no justification can be provided for allowing
local jurisdictions to ban legal medicine from being produced
or distributed.
17)Policy comments.
a) The CUA, which the California Supreme Court has
ruled does not specifically include legislative authority
to amend it, specifies that current law prohibiting the
possession and cultivation of MM does not apply to a
patient, or the patient's primary caregiver, who
possesses or cultivates MM for his or her personal
medical purposes. The author may wish to consider whether
the provision in this bill that allows local governments
to ban MM activity is consistent with the CUA.
b) This bill effectively eliminates the cooperative
model once the OMCR posts a notice that licensing
authorities have commenced issuing provisional licenses.
Coupled with allowing local governments to completely ban
MM cultivation within their jurisdictions, qualified
patients and their primary caregivers may potentially be
left with no viable or cost-effective options for
obtaining MM, especially in rural areas. The author may
wish to consider whether an ultimate ban ensures the
health and safety of all Californians, including
qualified patients and their primary caregivers who would
not have access to MM envisioned under the CUA.
c) The author has stated that the requirement for an
applicant or owner of a facility to prove that they have
been residents of the state for not less than four years
was a request from the MM industry to help curb
competition. Other MM regulation bills this legislative
session have had varied residency requirements, from as
little as requiring an applicant and owner to be a
California resident to requiring a minimum of three years
residency. The author may wish to consider whether a
four-year residency requirement may be too restrictive.
d) This bill specifies that revocation of a state
license or local license or permit terminates the ability
of a MM business to operate within the state. This bill
also requires licensing authorities to prescribe
AB 266 (Bonta) Page 28 of ?
conditions upon which a person whose state license has
previously been denied, suspended, or revoked may be
issued a state license. The author may wish to consider
addressing these two conflicting provisions and clarify
whether or not a licensee who has had a license revoked
can ever be licensed again.
SUPPORT AND OPPOSITION :
Support: City of Burbank
City of Camarillo
City of Chino Hills
City of Concord
City of Diamond Bar
City of Sacramento
City of Torrance
Honorable Board of Equalization Member George Runner
Oppose: American Civil Liberties Union of California (unless
amended)
Fresno Cannabis Association (unless amended)
Legal Services for Prisoners with Children (unless
amended)
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