California Legislature—2015–16 Regular Session

Assembly Bill No. 1575

Introduced by Assembly Members Bonta, Cooley, Jones-Sawyer, Lackey, and Wood

January 4, 2016

An act to amend Sections 19300.5, 19316, 19321, 19326, 19332, 19334, 19340, 19342, 19344, and 19350 of, to amend and add Section 19328 of, and to add Sections 19310.5, 19319.5, and 19322.5 to, the Business and Professions Code, to amend Sections 12025 and 12029 of the Fish and Game Code, and to amend Sections 11352, 11362.765, 11362.775, and 11379 of the Health and Safety Code, relating to medical marijuana.

LEGISLATIVE COUNSEL’S DIGEST

AB 1575, as introduced, Bonta. Medical marijuana.

(1) Existing law, the Medical Marijuana Regulation and Safety Act, establishes the licensing and regulation of medical marijuana. The act requires the Board of Equalization, in consultation with the Department of Food and Agriculture, to adopt a system for reporting the movement of commercial cannabis and cannabis products.

This bill would also require the Board of Equalization to form an advisory group made up of representatives from financial institutions, the medical marijuana industry, and state and federal banking regulators to examine strategies, such as the use of automated kiosks for accepting cash payments, integrated point-of-sale systems with state track and trace systems, and other measures that will improve financial monitoring of medical marijuana businesses. The bill would require the board, by July 1, 2017, to submit a report to the Legislature with proposed changes to state law or regulations that will improve financial monitoring of medical marijuana businesses and compliance with federal law.

(2) Under the act, a city, county, or city and county is authorized to adopt an ordinance that establishes standards, requirements, and regulations for local licenses and permits for commercial marijuana activity that exceed statewide standards.

The bill would generally prohibit a city, county, or city and county from adopting an ordinance for packaging safety standards that exceeds statewide standards and would require the State Department of Public Health to establish uniform statewide packaging safety standards.

(3) Under the act, all packaging and sealing of medical marijuana or medical marijuana products is required to be completed prior to their being transported or delivered to a licensee, qualified patient, or caregiver.

This bill would require the Bureau of Medical Marijuana Regulation to specify the manner in which medical marijuana and medical marijuana products meant for wholesale purposes are required to be packaged and sealed prior to transport, testing, quality assurance, quality control testing, or distribution.

(4) The act generally establishes categories of licenses that may be issued and limits a licensee to holding a state license in up to 2 separate license categories. The act provides that, upon licensure, a business shall not be subject to that limitation in a jurisdiction that adopted a local ordinance, prior to July 1, 2015, allowing or requiring qualified businesses to cultivate, manufacture, and dispense medical marijuana or medical marijuana products, with all commercial marijuana activity being conducted by a single qualified business. The act repeals these provisions on January 1, 2026.

This bill would instead repeal only the latter provision effective January 1, 2026.

(5) The act specifically establishes a “nursery license,” to be issued by the Department of Food and Agriculture, for the cultivation of medical marijuana solely as a nursery, and authorizes a licensee with a nursery license to transport live plants.

This bill would specify that a licensee with a nursery license may transport live immature plants, subject to specified tracking, security, and related requirements.

(6) The act specifically establishes a “dispensary license,” to be issued by the Department of Consumer Affairs, and requires a licensed dispensary to implement sufficient security measures, including, at a minimum, certain specified security measures, such as establishing limited access areas accessible only to authorized dispensary personnel. The act authorizes a dispensary to deliver in a city, county, or city and county that does not explicitly prohibit it by local ordinance.

This bill would also establish a “virtual dispensary license” and would require dispensaries to implement the additional security measure of requiring all medical marijuana and medical marijuana products used for display purposes, samples, or immediate sale to be stored out of reach of any individual who is not employed by the dispensary. The bill would require the Bureau of Medical Marijuana Regulation to establish specified regulations regarding delivery of medical marijuana and medical marijuana products by a dispensary and specified requirements for all dispensary employees who deliver medical marijuana or medical marijuana products.

(7) Under the act, each licensing authority is required to establish a scale of application, licensing, and renewal fees based on the cost of enforcing the act.

This bill would specify that these fees shall be in addition to, and shall not limit, any fees or taxes imposed by any city, county, or city and county in which the licensee operates.

(8) The act makes a license valid for 12 months from the date of issuance and requires that a license be renewed annually.

This bill would, notwithstanding that provision, authorize the Bureau of Medical Marijuana Regulation to issue temporary permits for business events.

(9) The act requires a licensed testing laboratory to analyze samples of medical marijuana or medical marijuana products according to either the most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia or a scientifically valid methodology that, in the opinion of the accrediting body, is demonstrably equal or superior.

This bill would instead require a licensed testing laboratory to analyze samples in the final form in which the patient will consume the medical marijuana or medical marijuana product using a scientifically valid methodology approved by the accrediting body.

(10) Existing law authorizes the University of California to create the California Marijuana Research Program, the purpose of which is to develop and conduct studies intended to ascertain the general medical safety and efficacy of marijuana, and if found valuable, to develop medical guidelines for the appropriate administration and use of marijuana.

This bill would provide that it is not a violation of state law or any local ordinance or regulation for a business or research institution engaged in the research of medical marijuana, medical marijuana products, or devices used for the medical use of marijuana or marijuana products, to possess, transport, purchase, or otherwise obtain small amounts of medical marijuana or medical marijuana products to conduct research and development related to medical marijuana or medical marijuana products. The bill would require the Bureau of Medical Marijuana Regulation to issue a medical marijuana research permit.

(11) Existing law imposes various civil penalties for a violation of specified provisions of law in connection with the production or cultivation of a controlled substance, including marijuana, on land under the management of specified state and federal agencies or within the ownership of a timberland production zone, as prescribed. Existing law also imposes various civil penalties for a violation of those specified provisions of law in connection with the production or cultivation of a controlled substance, including marijuana, on land that the person owns, leases, or otherwise uses or occupies with the consent of the landowner.

The bill would provide that activities that are in compliance with the Medical Marijuana Regulation and Safety Act are not subject to the above-described civil penalties.

(12) Under existing law, collectives and cooperatives that cultivate cannabis are not, solely on that basis, subject to certain criminal penalties, including unauthorized possession, cultivation, and transportation of marijuana. This exception for collectives and cooperatives expires one year after the Bureau of Medical Marijuana Regulation posts a notice on its Internet Web site that the bureau has commenced issuing licenses pursuant to the act and existing law is repealed on the date the bureau issues a license.

This bill would instead provide that the above exception is repealed one year after the bureau posts its notice on its Internet Web site. The bill would also specify that a collective or cooperative subject to this exception may operate on a for-profit basis, a not-for-profit basis, or any combination thereof. The bill would also specify that a licensee under the act may operate on a for-profit basis, a not-for-profit basis, or any combination thereof.

(13) Existing law provides that a qualified patient or a person with an identification card, a designated primary caregiver, and any individual who provides assistance to a qualified patient or a person with an identification card, or his or her designated primary caregiver, are not, solely on that basis, subject to certain criminal penalties, including unauthorized possession, cultivation, and transportation of marijuana. Existing law specifies that this provision does not authorize any individual or group to cultivate or distribute marijuana.

This bill would instead specify that this provision does not authorize any individual or group to cultivate or distribute marijuana in any manner other than set forth in the Medical Marijuana Regulation and Safety Act or in the Compassionate Use Act of 1996.

(14) Existing law makes it a crime to transport, import into this state, sell, furnish, administer, or give away, or offers to transport, import into this state, sell, furnish, administer, or give away, or attempt to import into this state or transport, or to transport for sale between counties of the state any controlled substance, including marijuana.

This bill would except from these provisions any commercial marijuana activity by a holder of a state license under the Medical Marijuana Regulation and Safety Act.

(15) This bill would also make technical, nonsubstantive changes to the provisions of the act.

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

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

SECTION 1.  

Section 19300.5 of the Business and Professions
Code is amended to read:

19300.5.  

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

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

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

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

begin delete

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

end delete begin insert

(B) An “owner” means any person having an aggregate
ownership interest, other than a security interest, lien, or
encumbrance, of 5 percent or more in the licensee and who has
the power to direct, or cause to be directed, the management or
control of the licensee.

end insert begin delete

(3) 

end delete

begin insert (2) end insert begin insert   end insert If the applicant is a publicly traded company, “owner”
means the chief executive officer begin insert , any member of the board of
directors, end insert or any person or entity with an aggregate ownership
interest of 5 percent or more. begin insert If the applicant is a nonprofit entity,
“owner” means both the chief executive officer and any member
of the board of directors. end insert

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

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

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

(f) “Cannabis” begin insert or “marijuana” end insert means all parts of the plant
Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis,
whether growing or not; the seeds thereof; the resin, whether crude
or purified, extracted from any part of the plant; and every
compound, manufacture, salt, derivative, mixture, or preparation
of the plant, its seeds, or resin. “Cannabis” begin insert or “marijuana” end insert also
means the separated resin, whether crude or purified, obtained
from marijuana. “Cannabis” begin insert or “marijuana end insert begin insert ” end insert also means marijuana
as defined by Section 11018 of the Health and Safety Code as
enacted by Chapter 1407 of the Statutes of 1972. “Cannabis” begin insert or
“marijuana end insert begin insert ” end insert does not include the mature stalks of the plant, fiber
produced from the stalks, oil or cake made from the seeds of the
plant, any other compound, manufacture, salt, derivative, mixture,
or preparation of the mature stalks (except the resin extracted
therefrom), fiber, oil, or cake, or the sterilized seed of the plant
which is incapable of germination. For the purpose of this chapter,
“cannabis” begin insert or “marijuana end insert begin insert ” end insert does not mean “industrial hemp” as
defined by Section 81000 of the Food and Agricultural Code or
Section 11018.5 of the Health and Safety Code.

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

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

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

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

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

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

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

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

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

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

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

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

(s) “Edible begin delete cannabis end delete begin insert marijuana end insert product” means manufactured
begin delete cannabis end delete begin insert marijuana end insert that is intended to be used, in whole or in part,
for human consumption, including, but not limited to, chewing
gum. An edible medical begin delete cannabis end delete begin insert marijuana end insert product is not
considered food as defined by Section 109935 of the Health and
Safety Code or a drug as defined by Section 109925 of the Health
and Safety Code.

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

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

(v) “Labor peace agreement” means an agreement between a
licensee and a bona fide labor organization that, at a minimum,
protects the state’s proprietary interests by prohibiting labor
organizations and members from engaging in picketing, work
stoppages, boycotts, and any other economic interference with the
applicant’s business. This agreement means that the applicant has
agreed not to disrupt efforts by the bona fide labor organization
to communicate with, and attempt to organize and represent, the
applicant’s employees. The agreement shall provide a bona fide
labor organization access at reasonable times to areas in which the
applicant’s employees work, for the purpose of meeting with
employees to discuss their right to representation, employment
rights under state law, and terms and conditions of employment.
This type of agreement shall not mandate a particular method of
election or certification of the bona fide labor organization.

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

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

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

(z) “Testing laboratory” means a facility, entity, or site in the
state that offers or performs tests of medical begin delete cannabis end delete begin insert marijuana end insert
or medical begin delete cannabis end delete begin insert marijuana end insert products and that is both of the
following:

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

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

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

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

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

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

(ae) “Manufactured cannabis” begin insert or “manufactured marijuana end insert begin insert ” end insert
means raw begin delete cannabis end delete begin insert marijuana end insert that has undergone a process
whereby the raw agricultural product has been transformed into a
concentrate, an edible product, or a topical product.

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

(ag) “Medical cannabis,” “medical cannabis product,” begin delete or end delete
“cannabis begin delete product” end delete begin insert product,” “medical marijuana,” “medical
marijuana product,” or “marijuana product end insert begin insert ” end insert means a product
containing begin delete cannabis, end delete begin insert marijuana, end insert including, but not limited to,
concentrates and extractions, intended to be sold for use by medical
begin delete cannabis end delete begin insert marijuana end insert patients in California pursuant to the
Compassionate Use Act of 1996 (Proposition 215), found at Section
11362.5 of the Health and Safety Code. For the purposes of this
chapter, “medical cannabis” begin insert or “medical marijuana end insert begin insert ” end insert does not
include “industrial hemp” as defined by Section 81000 of the Food
and Agricultural Code or Section 11018.5 of the Health and Safety
Code.

(ah) “Nursery” means a licensee that produces only clones,
immature plants, seeds, and other agricultural products used
specifically for the planting, propagation, and cultivation of medical
begin delete cannabis. end delete begin insert marijuana. end insert

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

(aj) “Person” means an individual, firm, partnership, joint
venture, association, corporation, limited liability company, estate,
trust, business trust, receiver, syndicate, or any other group or
combination acting as a unit and includes the plural as well as the
singular number.

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

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

(am) “Transport” means the transfer of medical begin delete cannabis end delete
begin insert marijuana end insert or medical begin delete cannabis end delete begin insert marijuana end insert products from the
permitted business location of one licensee to the permitted
business location of another licensee, for the purposes of
conducting commercial begin delete cannabis end delete begin insert marijuana end insert activity authorized
pursuant to this chapter.

SEC. 2.  

Section 19310.5 is added to the Business and
Professions Code, to read:

19310.5.  

(a) It is the intent of the Legislature to enact a statute
that improves the medical marijuana industry’s ability to comply
with federal law and regulations that would allow improved access
to financial services.

(b) (1) The State Board of Equalization shall form an advisory
group made up of representatives from financial institutions, the
medical marijuana industry, and state and federal banking
regulators. By July 1, 2017, the board shall submit a report to the
Legislature with proposed changes to state law or regulations that
will improve financial monitoring of medical marijuana businesses
and improve compliance with federal law.

(2) A report submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government
Code. The requirment for submitting a report imposed in paragraph
(1) is inoperative on July 1, 2021, pursuant to Section 10231.5 of
the Government Code.

(c) The advisory group shall examine strategies, such as the use
of automated kiosks for accepting cash payments, integrated
point-of-sale systems with state track and trace systems, and other
measures that will improve financial monitoring of medical
marijuana businesses.

SEC. 3.  

Section 19316 of the Business and Professions Code
is amended to read:

19316.  

(a)  begin delete Pursuant end delete begin insert (1) end insert begin insert   end insert begin insert Except as described in paragraph (2),
and pursuant end insert to Section 7 of Article XI of the California
Constitution, a city, county, or city and county may adopt
ordinances that establish additional standards, requirements, and
regulations for local licenses and permits for commercial begin delete cannabis end delete
begin insert marijuana end insert activity. Any standards, requirements, and regulations
regarding health and safety, testing, security, and worker
protections established by the state shall be the minimum standards
for all licensees statewide.

begin insert

(2) Packaging safety standards shall be uniform across the state
and shall be established by the State Department of Public Health.

end insert begin insert

(3) For purposes of this subdivision, packaging safety standards
do not include packaging requirements related to appellations of
origin or other branding or marketing materials.

end insert

(b) For facilities issued a state license that are located within
the incorporated area of a city, the city shall have full power and
authority to enforce this chapter and the regulations promulgated
by the bureau or any licensing authority, if delegated by the state.
Notwithstanding Sections 101375, 101400, and 101405 of the
Health and Safety Code or any contract entered into pursuant
thereto, or any other law, the city shall further assume complete
responsibility for any regulatory function relating to those licensees
within the city limits that would otherwise be performed by the
county or any county officer or employee, including a county
health officer, without liability, cost, or expense to the county.

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

SEC. 4.  

Section 19319.5 is added to the Business and
Professions Code, to read:

19319.5.  

(a) (1) It shall not be a violation of this chapter or
any other state law, and it shall not be a violation of any local
ordinance or regulation for a business or research institution
engaged in the research of medical marijuana, medical marijuana
products, or devices used for the medical use of marijuana or
marijuana products, to possess, transport, purchase, or otherwise
obtain small amounts of medical marijuana or medical marijuana
products, as determined by the bureau but not to exceed eight
ounces per month, as necessary to conduct research and
development related to medical marijuana or medical marijuana
products.

(2) Medical marijuana or medical marijuana products subject
to this section shall be obtained only from a person or entity
licensed pursuant to this chapter, who is permitted to provide or
deliver the medical marijuana or medical marijuana product. The
business or research institution shall obtain a medical marijuana
research permit pursuant to subdivision (b).

(b) The bureau shall issue a medical marijuana research permit
to allow for permitholders to pursue the research described in
subdivision (a). It is the intent of the Legislature to establish
minimum requirements for the medical marijuana research permit,
including the following:

(1) The requirement for all medical marijuana and medical
marijuana products used under a medical marijuana research permit
to be subject to all requirements of the state’s track and trace
program established pursuant to this chapter.

(2) The requirement that all applicants for a medical marijuana
research permit obtain permission to operate from the local
jurisdiction in which the applicant intends to conduct the research.

(3) The maximum amount of medical marijuana and medical
marijuana products that may be obtained per month for research
purposes. In no case shall a permitholder obtain more than eight
ounces per month for research purposes.

SEC. 5.  

Section 19321 of the Business and Professions Code
is amended to read:

19321.  

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

(b)  begin delete A end delete begin insert Except as described in subdivision (e), a end insert license issued
pursuant to this section shall be valid for 12 months from the date
of issuance. The license shall be renewed annually. Each licensing
authority shall establish procedures for the renewal of a license.

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

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

begin insert

(e) The bureau may issue temporary permits for business events.
It is the intent of the Legislature to establish minimum standards
and requirements for temporary permits for medical marijuana
and medical marijuana products.

end insert

SEC. 6.  

Section 19322.5 is added to the Business and
Professions Code, to read:

19322.5.  

A licencee may operate as a for-profit business, as a
not-for-profit entity, or as a combination of both.

SEC. 7.  

Section 19326 of the Business and Professions Code
is amended to read:

19326.  

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

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

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

(2) Upon issuance of a certificate of analysis by the Type 8
licensee that the product is fit for manufacturing or retail, all
medical begin delete cannabis end delete begin insert marijuana end insert and medical begin delete cannabis end delete begin insert marijuana end insert
products shall undergo a quality assurance review by the Type 11
licensee prior to distribution to ensure the quantity and content of
the medical begin delete cannabis end delete begin insert marijuana end insert or medical begin delete cannabis end delete begin insert marijuana end insert
product, and for tracking and taxation purposes by the state.
Licensed cultivators and manufacturers shall package or seal all
medical begin delete cannabis end delete begin insert marijuana end insert and medical begin delete cannabis end delete begin insert marijuana end insert
products in tamper-evident packaging and use a unique identifier,
as prescribed by the Department of Food and Agriculture, for the
purpose of identifying and tracking medical begin delete cannabis end delete begin insert marijuana end insert
or medical begin delete cannabis end delete begin insert marijuana end insert products. Medical begin delete cannabis end delete
begin insert marijuana end insert and medical begin delete cannabis end delete begin insert marijuana end insert products shall be
labeled as required by Section 19347 begin insert , except as otherwise specified
in this chapter end insert . All packaging and sealing shall be completed prior
to medical begin delete cannabis end delete begin insert marijuana end insert or medical begin delete cannabis end delete begin insert marijuana end insert
products being transported or delivered to a licensee, qualified
patient, or begin delete caregiver. end delete begin insert caregiver, except as otherwise specified in
this chapter. The bureau shall specify the manner in which medical
marijuana and medical marijuana products meant for wholesale
purposes shall be packaged and sealed prior to transport, testing,
quality assurance, quality control testing, or distribution. end insert

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

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

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

(2) Medical begin delete cannabis end delete begin insert marijuana end insert extracts shall, at a minimum,
be tested for concentration and purity of the product.

(3) This chapter shall not prohibit a licensee from performing
on-site testing for the purposes of quality assurance of the product
in conjunction with reasonable business operations. On-site testing
by the licensee shall not be certified by the State Department of
Public Health.

(e) All commercial begin delete cannabis end delete begin insert marijuana end insert activity shall be
conducted between licensees, when these are available.

SEC. 8.  

Section 19328 of the Business and Professions Code
is amended to read:

19328.  

(a)  begin delete A end delete begin insert Except as specified in paragraph (9), a end insert licensee
may only hold a state license in up to two separate license
categories, as follows:

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

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

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

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

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

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

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

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

(9) A Type 10A licensee may apply for a Type 6 or 7 state
license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or
combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B,
4 or combination of licenses thereof, no more than four acres of
total canopy size of cultivation by the licensee is occurring
throughout the state during the period that the respective licenses
are valid. All cultivation pursuant to this section shall comply with
local ordinances. begin delete This paragraph shall become inoperative on
January 1, 2026. end delete begin insert By January 1, 2025, the bureau shall review the
appropriateness of continuing licensure under this paragraph and
shall reports its recommendation for elimination or extension of
these provisions to the Legislature. end insert

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

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

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

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

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

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

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

SEC. 9.  

Section 19328 is added to the Business and Professions
Code, to read:

19328.  

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

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

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

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

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

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

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

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

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

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

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

(c) This section shall become operative on January 1, 2026.

SEC. 10.  

Section 19332 of the Business and Professions Code
is amended to read:

19332.  

(a) The Department of Food and Agriculture shall
promulgate regulations governing the licensing of indoor and
outdoor cultivation sites.

(b) The Department of Pesticide Regulation, in consultation
with the Department of Food and Agriculture, shall develop
standards for the use of pesticides in cultivation, and maximum
tolerances for pesticides and other foreign object residue in
harvested begin delete cannabis. end delete begin insert marijuana. end insert

(c) The State Department of Public Health shall develop
standards for the production and labeling of all edible medical
begin delete cannabis end delete begin insert marijuana end insert products.

(d) The Department of Food and Agriculture, in consultation
with the Department of Fish and Wildlife and the State Water
Resources Control Board, shall ensure that individual and
cumulative effects of water diversion and discharge associated
with cultivation do not affect the instream flows needed for fish
spawning, migration, and rearing, and the flows needed to maintain
natural flow variability.

(e) The Department of Food and Agriculture shall have the
authority necessary for the implementation of the regulations it
adopts pursuant to this chapter. The regulations shall do all of the
following:

(1) Provide that weighing or measuring devices used in
connection with the sale or distribution of medical begin delete cannabis end delete
begin insert marijuana end insert are required to meet standards equivalent to Division
5 (commencing with Section 12001).

(2) Require that begin delete cannabis end delete begin insert marijuana end insert cultivation by licensees is
conducted in accordance with state and local laws related to land
conversion, grading, electricity usage, water usage, agricultural
discharges, and similar matters. Nothing in this chapter, and no
regulation adopted by the department, shall be construed to
supersede or limit the authority of the State Water Resources
Control Board, regional water quality control boards, or the
Department of Fish and Wildlife to implement and enforce their
statutory obligations or to adopt regulations to protect water quality,
water supply, and natural resources.

(3) Establish procedures for the issuance and revocation of
unique identifiers for activities associated with a begin delete cannabis end delete
begin insert marijuana end insert cultivation license, pursuant to Article 8 (commencing
with Section 19337). All begin delete cannabis end delete begin insert marijuana end insert shall be labeled with
the unique identifier issued by the Department of Food and
Agriculture.

(4) Prescribe standards, in consultation with the bureau, for the
reporting of information as necessary related to unique identifiers,
pursuant to Article 8 (commencing with Section 19337).

(f) The Department of Pesticide Regulation, in consultation with
the State Water Resources Control Board, shall promulgate
regulations that require that the application of pesticides or other
pest control in connection with the indoor or outdoor cultivation
of medical begin delete cannabis end delete begin insert marijuana end insert meets standards equivalent to
Division 6 (commencing with Section 11401) of the Food and
Agricultural Code and its implementing regulations.

(g) State cultivator license types issued by the Department of
Food and Agriculture include:

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

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

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

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

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

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

(7) Type 3, or “outdoor,” for outdoor cultivation using no
artificial lighting from 10,001 square feet to one acre, inclusive,
of total canopy size on one premises. The Department of Food and
Agriculture shall limit the number of licenses allowed of this type.

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

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

(10) Type 4, or “nursery,” for cultivation of medical begin delete cannabis end delete
begin insert marijuana end insert solely as a nursery. Type 4 licensees may transport live
begin delete plants. end delete begin insert immature plants, subject to the tracking, security, and
related requirements of Sections 19334 to 19338, inclusive. end insert

SEC. 11.  

Section 19334 of the Business and Professions Code
is amended to read:

19334.  

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

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

begin insert

(B) “Virtual Dispensary” for a license to permit the retail sale
of medical marijuana and medical marijuana products without
the requirement of operating a storefront. All virtual dispensaries
shall maintain a commercial facility at which all licensed activities
are performed under the license, with the exception of direct
delivery to a qualified patient or primary caregiver. Virtual
dispensaries shall be subject to all of the provisions of this chapter
that relate to dispensaries unless specifically excluded.

end insert

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

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

(4) “Special dispensary status” for dispensers who have no more
than three licensed dispensary facilities. This license shall allow
for delivery where expressly authorized by local ordinance.

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

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

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

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

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

begin insert

(4) Requiring all medical marijuana and medical marijuana
products used for display purposes, samples, or immediate sale
to be stored out of reach of any individual who is not employed by
the dispensary.

end insert

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

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

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

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

(4) Any other breach of security.

SEC. 12.  

Section 19340 of the Business and Professions Code
is amended to read:

19340.  

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

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

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

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

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

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

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

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

begin insert

(g) The bureau shall establish the following regulations
regarding the delivery of medical marijuana and medical
marijuana products:

end insert begin insert

(1) Employee training standards that ensure qualified patients
and primary caregivers have adequate information regarding the
medical marijuana or medical marijuana products that a
dispensary delivers, and to provide employees with information
regarding state and federal laws and regulations.

end insert begin insert

(2) Protocols to provide qualified patients and primary
caregivers with information regarding laws, regulations, and
policies relevant to providing medical marijuana or medical
marijuana products to qualified patients and primary caregivers
in the local jurisdiction in which the dispensary is located and the
area in which the medical marijuana or medical marijuana
products are being delivered.

end insert begin insert

(3) A system for registering and maintaining the status of all
delivery personnel of dispensaries, including protocols for
suspending the registrations of individuals who move out of this
state, who discontinue employment at a dispensary, or who are
under suspension or inspection by a dispensary or local or state
law enforcement. This system shall be made available to local and
state law enforcement, qualified patients, primary caregivers, and
any other entity deemed appropriate by the bureau. Any fees
associated with registration of delivery personnel shall be set by
the bureau and shall not exceed the reasonable amount necessary
to cover the costs to regulate the delivery personnel and maintain
the system.

end insert begin insert

(4) The operating hours for delivery.

end insert begin insert

(5) A requirement that each dispensary employee who delivers
medical marijuana or medical marijuana products contract with
only one dispensary at time.

end insert begin insert

(6) Minimum requirements for patient information that is stored
by each delivery operation, including, but not limited to, the contact
information for the patient and, if applicable, his or her primary
caregiver, the physician’s recommendation, and the condition for
which the medical marijuana or medical marijuana product is
being recommended. All identifying information obtained about
a qualified patient or primary caregiver shall be obtained and
stored in compliance with the privacy and security rules of the
Health Insurance Portability and Accountability Act (HIPAA).

end insert begin insert

(h) The bureau shall establish requirements for all dispensary
employees who deliver medical marijuana or medical marijuana
products, including, but not limited to, the following:

end insert begin insert

(1) Possession of a valid driver’s license issued by the
Department of Motor Vehicles.

end insert begin insert

(2) Provide the bureau with a current address.

end insert begin insert

(3) Provide the bureau with necessary automobile and insurance
information.

end insert begin insert

(4) Registration with the bureau.

end insert

SEC. 13.  

Section 19342 of the Business and Professions Code
is amended to read:

19342.  

(a) For the purposes of testing medical begin delete cannabis end delete
begin insert marijuana end insert or medical begin delete cannabis end delete begin insert marijuana end insert products, licensees shall
use a licensed testing laboratory that has adopted a standard
operating procedure using methods consistent with general
requirements for the competence of testing and calibration
activities, including sampling, using standard methods established
by the International Organization for Standardization, specifically
ISO/IEC 17020 and ISO/IEC 17025 to test medical begin delete cannabis end delete
begin insert marijuana end insert and medical begin delete cannabis end delete begin insert marijuana end insert products that are
approved by an accrediting body that is a signatory to the
International Laboratory Accreditation Cooperation Mutual
Recognition Arrangement.

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

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

begin delete

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

end delete begin delete

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

end delete begin insert

(1) In the final form which the patient will consume the medical
marijuana or medical marijuana product, including moisture
content and other attributes.

end insert begin insert

(2) A scientifically valid methodology approved by the
accrediting body.

end insert

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

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

SEC. 14.  

Section 19344 of the Business and Professions Code
is amended to read:

19344.  

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

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

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(C) Cannabidiol (CBD).

(D) Cannabidiolic Acid (CBDA).

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

(F) Cannabigerol (CBG).

(G) Cannabinol (CBN).

(H) Any other compounds required by the State Department of
Public Health.

(2) That the presence of contaminants does not exceed the levels
that are the lesser of either the most current version of the American
Herbal Pharmacopoeia monograph or the State Department of
Public Health. For purposes of this paragraph, contaminants
includes, but is not limited to, all of the following:

(A) Residual solvent or processing chemicals.

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

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

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

(b) Residual levels of volatile organic compounds shall be below
begin delete the lesser of either the specifications set by the United States
Pharmacopeia (U.S.P. Chapter 467) or end delete those set by the State
Department of Public Health.

SEC. 15.  

Section 19350 of the Business and Professions Code
is amended to read:

19350.  

Each licensing authority shall establish a scale of
application, licensing, and renewal fees, based upon the cost of
enforcing this chapter, as follows:

(a) Each licensing authority shall charge each licensee a
licensure and renewal fee, as applicable. The licensure and renewal
fee shall be calculated to cover the costs of administering this
chapter. The licensure fee may vary depending upon the varying
costs associated with administering the various regulatory
requirements of this chapter as they relate to the nature and scope
of the different licensure activities, including, but not limited to,
the track and trace program required pursuant to Section 19335,
but shall not exceed the reasonable regulatory costs to the licensing
authority.

(b) The total fees assessed pursuant to this chapter shall be set
at an amount that will fairly and proportionately generate sufficient
total revenue to fully cover the total costs of administering this
chapter.

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

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

begin insert

(e) The fees established by licensing authorities pursuant to this
chapter shall be in addition to, and shall not limit, any fees or
taxes imposed by a city, county, or city and county in which the
licensee operates.

end insert

SEC. 16.  

Section 12025 of the Fish and Game Code is amended
to read:

12025.  

(a) In addition to any penalties imposed by any other
law, a person found to have violated the code sections described
in paragraphs (1) to (11), inclusive, in connection with the
production or cultivation of a controlled substance on land under
the management of the Department of Parks and Recreation, the
Department of Fish and Wildlife, the Department of Forestry and
Fire Protection, the State Lands Commission, a regional park
district, the United States Forest Service, or the United States
Bureau of Land Management, or within the respective ownership
of a timberland production zone, as defined in Chapter 6.7
(commencing with Section 51100) of Part 1 of Division 1 of Title
5 of the Government Code, of more than 50,000 acres, or while
trespassing on other public or private land in connection with the
production or cultivation of a controlled substance, shall be liable
for a civil penalty as follows:

(1) A person who violates Section 1602 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than ten thousand dollars ($10,000) for
each violation.

(2) A person who violates Section 5650 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than forty thousand dollars ($40,000) for
each violation.

(3) A person who violates Section 5652 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than forty thousand dollars ($40,000) for
each violation.

(4) A person who violates subdivision (a) of Section 374.3 of
the Penal Code in connection with the production or cultivation
of a controlled substance is subject to a civil penalty of not more
than forty thousand dollars ($40,000) for each violation.

(5) A person who violates paragraph (1) of subdivision (h) of
Section 374.3 of the Penal Code in connection with the production
or cultivation of a controlled substance is subject to a civil penalty
of not more than forty thousand dollars ($40,000) for each
violation.

(6) A person who violates subdivision (b) of Section 374.8 of
the Penal Code in connection with the production or cultivation
of a controlled substance is subject to a civil penalty of not more
than forty thousand dollars ($40,000) for each violation.

(7) A person who violates Section 384a of the Penal Code in
connection with the production or cultivation of a controlled
substance is subject to a civil penalty of not more than ten thousand
dollars ($10,000) for each violation.

(8) A person who violates subdivision (a) of Section 4571 of
the Public Resources Code in connection with the production or
cultivation of a controlled substance is subject to a civil penalty
of not more than ten thousand dollars ($10,000) for each violation.

(9) A person who violates Section 4581 of the Public Resources
Code in connection with the production or cultivation of a
controlled substance is subject to a civil penalty of not more than
ten thousand dollars ($10,000) for each violation.

(10) A person who violates Section 2000 in connection with
the production or cultivation of a controlled substance is subject
to a civil penalty of not more than ten thousand dollars ($10,000)
for each violation.

(11) A person who violates Section 2002 in connection with
the production or cultivation of a controlled substance is subject
to a civil penalty of not more than ten thousand dollars ($10,000)
for each violation.

(b) (1) In addition to any penalties imposed by any other law,
a person found to have violated the code sections described in this
subdivision in connection with the production or cultivation of a
controlled substance on land that the person owns, leases, or
otherwise uses or occupies with the consent of the landowner shall
be liable for a civil penalty as follows:

(A) A person who violates Section 1602 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than eight thousand dollars ($8,000) for
each violation.

(B) A person who violates Section 5650 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than twenty thousand dollars ($20,000)
for each violation.

(C) A person who violates Section 5652 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than twenty thousand dollars ($20,000)
for each violation.

(D) A person who violates subdivision (a) of Section 374.3 of
the Penal Code in connection with the production or cultivation
of a controlled substance is subject to a civil penalty of not more
than twenty thousand dollars ($20,000) for each violation.

(E) A person who violates paragraph (1) of subdivision (h) of
Section 374.3 of the Penal Code in connection with the production
or cultivation of a controlled substance is subject to a civil penalty
of not more than twenty thousand dollars ($20,000) for each
violation.

(F) A person who violates subdivision (b) of Section 374.8 of
the Penal Code in connection with the production or cultivation
of a controlled substance is subject to a civil penalty of not more
than twenty thousand dollars ($20,000) for each violation.

(G) A person who violates Section 384a of the Penal Code in
connection with the production or cultivation of a controlled
substance is subject to a civil penalty of not more than ten thousand
dollars ($10,000) for each violation.

(H) A person who violates subdivision (a) of Section 4571 of
the Public Resources Code in connection with the production or
cultivation of a controlled substance is subject to a civil penalty
of not more than eight thousand dollars ($8,000) for each violation.

(I) A person who violates Section 4581 of the Public Resources
Code in connection with the production or cultivation of a
controlled substance is subject to a civil penalty of not more than
eight thousand dollars ($8,000) for each violation.

(J) A person who violates Section 2000 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than eight thousand dollars ($8,000) for
each violation.

(K) A person who violates Section 2002 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than eight thousand dollars ($8,000) for
each violation.

(2) Each day that a violation of a code section described in this
subdivision occurs or continues to occur shall constitute a separate
violation.

(c) The civil penalty imposed for each separate violation
pursuant to this section is in addition to any other civil penalty
imposed for another violation of this section, or any violation of
any other law.

(d) All civil penalties imposed or collected by a court for a
separate violation pursuant to this section shall not be considered
to be fines or forfeitures, as described in Section 13003, and shall
be apportioned in the following manner:

(1) Thirty percent shall be distributed to the county in which
the violation was committed pursuant to Section 13003. The county
board of supervisors shall first use any revenues from those
penalties to reimburse the costs incurred by the district attorney
or city attorney in investigating and prosecuting the violation.

(2) (A) Thirty percent shall be distributed to the investigating
agency to be used to reimburse the cost of any investigation directly
related to the violations described in this section.

(B) If the department receives reimbursement pursuant to this
paragraph for activities funded pursuant to subdivision (f) of
Section 4629.6 of the Public Resources Code, the reimbursement
funds shall be deposited into the Timber Regulation and Forest
Restoration Fund, created by Section 4629.3 of the Public
Resources Code, if there is an unpaid balance for a loan authorized
by subdivision (f) of Section 4629.6 of the Public Resources Code.

(3) Forty percent shall be deposited into the Timber Regulation
and Forest Restoration Fund, created by Section 4629.3 of the
Public Resources Code, and used for grants authorized pursuant
to Section 4629.6 of the Public Resources Code that improve forest
health by remediating former marijuana growing operations.

(e) Civil penalties authorized pursuant to this section may be
imposed administratively by the department if all of the following
occur:

(1) The chief deputy director or law enforcement division
assistant chief in charge of marijuana-related enforcement issues
a complaint to any person or entity on which an administrative
civil penalty may be imposed pursuant to this section. The
complaint shall allege the act or failure to act that constitutes a
violation, any facts related to natural resources impacts, the
provision of law authorizing the civil penalty to be imposed, and
the proposed penalty amount.

(2) The complaint and order is served by personal notice or
certified mail and informs the party served that the party may
request a hearing not later than 20 days from the date of service.
If a hearing is requested, it shall be scheduled before the director
or his or her designee, which designee shall not be the chief deputy
or assistant chief issuing the complaint and order. A request for a
hearing shall contain a brief statement of the material facts the
party claims support his or her contention that no administrative
penalty should be imposed or that an administrative penalty of a
lesser amount is warranted. A party served with a complaint
pursuant to this subdivision waives his or her right to a hearing if
a hearing is not requested within 20 days of service of the
complaint, in which case the order imposing the administrative
penalty shall become final.

(3) The director, or his or her designee, shall control the nature
and order of hearing proceedings. Hearings shall be informal in
nature, and need not be conducted according to the technical rules
relating to evidence. The director or his or her designee shall issue
a final order within 45 days of the close of the hearing. A copy of
the final order shall be served by certified mail upon the party
served with the complaint.

(4) A party may obtain review of the final order by filing a
petition for a writ of mandate with the superior court within 30
days of the date of service of the final order. The administrative
penalty shall be due and payable to the department within 60 days
after the time to seek judicial review has expired, or, where the
party did not request a hearing of the order, within 20 days after
the order imposing an administrative penalty becomes final.

(5) The department may adopt regulations to implement this
subdivision.

(f) All administrative penalties imposed or collected by the
department for a separate violation pursuant to this section shall
not be considered to be fines or forfeitures, as described in Section
13003, and shall be deposited into the Timber Regulation and
Forest Restoration Fund, created by Section 4629.3 of the Public
Resources Code, to repay any unpaid balance of a loan authorized
by subdivision (f) of Section 4629.6 of the Public Resources Code.
Any remaining funds from administrative penalties collected
pursuant to this section shall be apportioned in the following
manner:

(1) Fifty percent shall be deposited into the Timber Regulation
and Forest Restoration Fund for grants authorized pursuant to
subdivision (h) of Section 4629.6 of the Public Resources Code,
with priority given to grants that improve forest health by
remediating former marijuana growing operations.

(2) Fifty percent shall be deposited into the Fish and Game
Preservation Fund.

(g) Any civil penalty imposed pursuant to this section for the
violation of an offense described in paragraph (4), (5), or (6) of
subdivision (a) or subparagraph (D), (E), or (F) of paragraph (1)
of subdivision (b) for which the person was convicted shall be
offset by the amount of any restitution ordered by a criminal court.

(h) For purposes of this section, “controlled substance” has the
same meaning as defined in Section 11007 of the Health and Safety
Code.

begin insert

(i) This section does not apply to any activity in compliance
with the Medical Marijuana Regulation and Safety Act (Chapter
3.5 (commencing with Section 19300) of Division 8 of the Business
and Professions Code).

end insert

SEC. 17.  

Section 12029 of the Fish and Game Code is amended
to read:

12029.  

(a) The Legislature finds and declares all of the
following:

(1) The environmental impacts associated with marijuana
cultivation have increased, and unlawful water diversions for
marijuana irrigation have a detrimental effect on fish and wildlife
and their habitat, which are held in trust by the state for the benefit
of the people of the state.

(2) The remediation of existing marijuana cultivation sites is
often complex and the permitting of these sites requires greater
department staff time and personnel expenditures. The potential
for marijuana cultivation sites to significantly impact the state’s
fish and wildlife resources requires immediate action on the part
of the department’s lake and streambed alteration permitting staff.

(b) In order to address unlawful water diversions and other
violations of the Fish and Game Code associated with marijuana
cultivation, the department shall establish the watershed
enforcement program to facilitate the investigation, enforcement,
and prosecution of these offenses.

(c) The department, in coordination with the State Water
Resources Control Board, shall establish a permanent multiagency
task force to address the environmental impacts of marijuana
cultivation. The multiagency task force, to the extent feasible and
subject to available Resources, shall expand its enforcement efforts
on a statewide level to ensure the reduction of adverse impacts of
marijuana cultivation on fish and wildlife and their habitats
throughout the state.

(d) In order to facilitate the remediation and permitting of
marijuana cultivation sites, the department shall adopt regulations
to enhance the fees on begin delete any entity end delete begin insert medical-cannabis-cultivation- end insert begin insert related activities end insert subject to Section 1602 for marijuana cultivation sites that require remediation. The fee schedule established pursuant to this subdivision shall not exceed the fee limits in Section 1609.

SEC. 18.  

Section 11352 of the Health and Safety Code is
amended to read:

11352.  

(a) Except as otherwise provided in this division, every
person who transports, imports into this state, sells, furnishes,
administers, or gives away, or offers to transport, import into this
state, sell, furnish, administer, or give away, or attempts to import
into this state or transport (1) any controlled substance specified
in subdivision (b), (c), or (e), or paragraph (1) of subdivision (f)
of Section 11054, specified in paragraph (14), (15), or (20) of
subdivision (d) of Section 11054, or specified in subdivision (b)
or (c) of Section 11055, or specified in subdivision (h) of Section
11056, or (2) any controlled substance classified in Schedule III,
IV, or V which is a narcotic drug, unless upon the written
prescription of a physician, dentist, podiatrist, or veterinarian
licensed to practice in this state, shall be punished by imprisonment
pursuant to subdivision (h) of Section 1170 of the Penal Code for
three, four, or five years.

(b) Notwithstanding the penalty provisions of subdivision (a),
any person who transports begin delete any end delete begin insert a end insert controlled substances specified
in subdivision (a) within this state from one county to another
noncontiguous county shall be punished by imprisonment pursuant
to subdivision (h) of Section 1170 of the Penal Code for three, six,
or nine years.

(c) For purposes of this section, “transports” means to transport
for sale.

(d) This section does not preclude or limit the prosecution of
an individual for aiding and abetting the commission of, or
conspiring to commit, or acting as an accessory to, any act
prohibited by this section.

begin insert

(e) This section does not apply to commercial marijuana activity
engaged in by a person or entity licensed pursuant to the Medical
Marijuana Regulation and Safety Act (Chapter 3.5 (commencing
with Section 19300) of Division 8 of the Business and Professions
Code).

end insert

SEC. 19.  

Section 11362.765 of the Health and Safety Code is
amended to read:

11362.765.  

(a)  Subject to the requirements of this article, the
individuals specified in subdivision (b) shall not be subject, on
that sole basis, to criminal liability under Section 11357, 11358,
11359, 11360, 11366, 11366.5, or 11570. However, nothing in
this section shall authorize the individual to smoke or otherwise
consume marijuana unless otherwise authorized by this article,
nor shall anything in this section authorize any individual or group
to cultivate or distribute marijuana begin delete for profit. end delete begin insert in any manner other
than as set forth in the Medical Marijuana Regulation and Safety
Act (Chapter 3.5 (commencing with Section 19300) of Division 8
of the Business and Professions Code) or as described in the
Compassionate Use Act of 1996. end insert

(b)  Subdivision (a) shall apply to all of the following:

(1)  A qualified patient or a person with an identification card
who transports or processes marijuana for his or her own personal
medical use.

(2)  A designated primary caregiver who transports, processes,
administers, delivers, or gives away marijuana for medical
purposes, in amounts not exceeding those established in subdivision
(a) of Section 11362.77, only to the qualified patient of the primary
caregiver, or to the person with an identification card who has
designated the individual as a primary caregiver.

(3)  Any individual who provides assistance to a qualified patient
or a person with an identification card, or his or her designated
primary caregiver, in administering medical marijuana to the
qualified patient or person or acquiring the skills necessary to
cultivate or administer marijuana for medical purposes to the
qualified patient or person.

(c)  A primary caregiver who receives compensation for actual
expenses, including reasonable compensation incurred for services
provided to an eligible qualified patient or person with an
identification card to enable that person to use marijuana under
this article, or for payment for out-of-pocket expenses incurred in
providing those services, or both, shall not, on the sole basis of
that fact, be subject to prosecution or punishment under Section
11359 or 11360.

SEC. 20.  

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

11362.775.  

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

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

SEC. 21.  

Section 11379 of the Health and Safety Code is
amended to read:

11379.  

(a) Except as otherwise provided in subdivision (b)
and in Article 7 (commencing with Section begin delete 4211) end delete begin insert 4110) end insert of Chapter
9 of Division 2 of the Business and Professions Code, every person
who transports, imports into this state, sells, furnishes, administers,
or gives away, or offers to transport, import into this state, sell,
furnish, administer, or give away, or attempts to import into this
state or transport any controlled substance which is (1) classified
in Schedule III, IV, or V and which is not a narcotic drug, except
subdivision (g) of Section 11056, (2) specified in subdivision (d)
of Section 11054, except paragraphs (13), (14), (15), (20), (21),
(22), and (23) of subdivision (d), (3) specified in paragraph (11)
of subdivision (c) of Section 11056, (4) specified in paragraph (2)
or (3) of subdivision (f) of Section 11054, or (5) specified in
subdivision (d) or (e), except paragraph (3) of subdivision (e), or
specified in subparagraph (A) of paragraph (1) of subdivision (f),
of Section 11055, unless upon the prescription of a physician,
dentist, podiatrist, or veterinarian, licensed to practice in this state,
shall be punished by imprisonment pursuant to subdivision (h) of
Section 1170 of the Penal Code for a period of two, three, or four
years.

(b) Notwithstanding the penalty provisions of subdivision (a),
any person who transports any controlled substances specified in
subdivision (a) within this state from one county to another
noncontiguous county shall be punished by imprisonment pursuant
to subdivision (h) of Section 1170 of the Penal Code for three, six,
or nine years.

(c) For purposes of this section, “transports” means to transport
for sale.

(d) Nothing in this section is intended to preclude or limit
prosecution under an aiding and abetting theory, accessory theory,
or a conspiracy theory.

begin insert

(e) This section does not apply to commercial marijuana activity
engaged in by a person or entity licensed pursuant to the Medical
Marijuana Regulation and Safety Act (Chapter 3.5 (commencing
with Section 19300) of Division 8 of the Business and Professions
Code).

end insert