Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1575


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

January 4, 2016


An act to amend Sectionsbegin insert 19300,end insert 19300.5,begin insert 19302, 19302.1, 19306, 19310,end insert 19316, 19321,begin insert 19322,end insert 19326, 19332,begin insert 19332.5,end insert 19334,begin insert 19335,end insert 19340, 19342, 19344,begin delete and 19350end deletebegin insert 19347, 19350, 19351, and 19360end insert of,begin insert to amend the heading of Article 5 (commencing with Section 19326) of Chapter 3.5 of Division 8 of,end insertbegin insert to amend the heading of Chapter 3.5 (commencing with Section 19300) of Division 8 of,end insert to amend and add Section 19328 of,begin delete andend delete to add Sections 19310.5, 19319.5, and 19322.5 to,begin insert and to repeal Section 19318 of,end insert 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,begin insert 11362.777,end insert and 11379 of the Health and Safety Code, relating to medicalbegin delete marijuana.end deletebegin insert cannabis.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1575, as amended, Bonta. Medicalbegin delete marijuana.end deletebegin insert cannabis.end insert

(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 wouldbegin insert rename the act as the Medical Cannabis Regulation and Safety Act. The bill wouldend insert also require the Board of Equalization to form an advisory group made up of representatives from financial institutions, the medicalbegin delete marijuanaend deletebegin insert cannabisend insert industry, and state and federal banking regulators to examinebegin delete strategies, such as the use of automated kiosks for accepting cash payments,end deletebegin insert strategiesend insertbegin insert such asend insert integrated point-of-sale systems with state track and tracebegin delete systems,end deletebegin insert systemsend insert and other measures that will improve financial monitoring of medicalbegin delete marijuanaend deletebegin insert cannabisend insert 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 medicalbegin delete marijuanaend deletebegin insert cannabisend insert businesses and compliance with federal law.begin insert The bill would require the Department of Business Oversight to create an enhanced financial monitoring certification for entities licensed under the act that further enables them to comply with federal banking regulations and would authorize the Department of Business Oversightend insertbegin insert to charge a fee for this certification, as specified.end insert

(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) begin insertExisting law requires a cultivator or manufacturer to send all medical marijuana and medical marijuana products cultivated and manufactured to a distributor for quality assurance and inspection. end insertUnder 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 wouldbegin insert exempt a cultivator from the requirement of sending medical cannabis to a distributor for quality assurance and inspection if the medical cannabis is to be used, sold, or otherwise provided to a manufacturer for further manufacturing. The bill also wouldend insert require the Bureau of Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation to specify the manner in which medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert 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 billbegin delete would insteadend deletebegin insert would, instead,end insert 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 thebegin delete Department of Consumer Affairs,end deletebegin insert bureau,end insert 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 prohibitbegin delete itend deletebegin insert deliveryend insert by local ordinance.

This bill wouldbegin delete also establish a “virtual dispensary license” and wouldend delete require dispensaries to implement the additional security measure of requiring all medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert 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 thebegin delete Bureau of Medical Marijuana Regulationend deletebegin insert bureauend insert to establish specified regulations regarding delivery of medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert products by a dispensary and specified requirements for all dispensary employees who deliver medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert 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.

begin delete

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

end delete
begin delete

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

end delete
begin delete

(9)

end delete

begin insert(8)end insert 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 billbegin delete would insteadend deletebegin insert would, instead,end insert require a licensed testing laboratory to analyze samples in the final form in which the patient will consume the medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert product using a scientifically valid methodology approved by the accrediting body.

begin delete

(10)

end delete

begin insert(9)end insert 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 institutionbegin delete engagedend deletebegin insert that has state authorization to engageend insert in the research of medicalbegin delete marijuana,end deletebegin insert cannabis,end insert medicalbegin delete marijuanaend deletebegin insert cannabisend insert products, or devices used for the medical use ofbegin delete marijuanaend deletebegin insert cannabisend insert orbegin delete marijuanaend deletebegin insert cannabisend insert products, to possess, transport, purchase, or otherwise obtain small amounts of medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products to conduct research and development related to medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products. The bill would require thebegin delete Bureau of Medical Marijuana Regulationend deletebegin insert bureauend insert tobegin delete issue a medical marijuana research permit.end deletebegin insert promulgate regulations to establish minimum qualifications for state authorization to conduct research on medical cannabis and medical cannabis productsend insertbegin insert and all related protocols, as specified.end insert

begin delete

(11)

end delete

begin insert(10)end insert 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 inbegin insert fullend insert compliance with the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and Safety Act are not subject to the above-described civil penalties.

begin delete

(12)

end delete

begin insert(11)end insert 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 billbegin delete would insteadend deletebegin insert would, instead,end insert 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.

begin delete

(13)

end delete

begin insert(12)end insert 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 distributebegin delete marijuanaend deletebegin insert cannabisend insert in any manner other than set forth in the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and Safety Act or in the Compassionate Use Act of 1996.

begin delete

(14)

end delete

begin insert(13)end insert 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 commercialbegin delete marijuanaend deletebegin insert cannabisend insert activity by a holder of a state licensebegin delete underend deletebegin insert who is in full compliance withend insert the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and Safetybegin delete Act.end deletebegin insert Act and all applicable local ordinances.end insert

begin delete

(15)

end delete

begin insert(14)end insert This bill would also make technical, nonsubstantive changes to the provisions of thebegin delete act.end deletebegin insert act, including changing the term marijuana to cannabis throughout.end insert

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

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

P6    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertThe heading of Chapter 3.5 (commencing with
2Section 19300) of Division 8 of the end insert
begin insertBusiness and Professions Codeend insert
3begin insert is amended to read:end insert

4 

5Chapter  3.5. Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation
6and Safetybegin delete actend deletebegin insert Actend insert
7

 

8begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 19300 of the end insertbegin insertBusiness and Professions Codeend insert
9begin insert is amended to read:end insert

10

19300.  

This act shall be known and may be cited as the Medical
11begin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and Safety Act.

12

begin deleteSECTION 1.end delete
13begin insertSEC. 3.end insert  

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

15

19300.5.  

For purposes of this chapter, the following definitions
16shall apply:

17(a) “Accrediting body” means a nonprofit organization that
18requires conformance to ISO/IEC 17025 requirements and is a
19signatory to the International Laboratory Accreditation Cooperation
20Mutual Recognition Arrangement for Testing.

21(b) “Applicant,” for purposes of Article 4 (commencing with
22Section 19319), means the following:

P7    1(1) (A) Owner or owners of a proposed facility.

2(B) An “owner” meansbegin delete anyend deletebegin insert aend insert person having an aggregate
3ownership interest, other than a security interest, lien, or
4encumbrance, of 5 percent or more in the licenseebegin delete andend deletebegin insert orend insert who has
5the power to direct, or cause to be directed, the management or
6control of the licensee.

7(2) If the applicant is a publicly traded company, “owner” means
8the chief executive officer,begin delete anyend deletebegin insert aend insert member of the board of directors,
9orbegin delete anyend deletebegin insert aend insert person or entity with an aggregate ownership interest of
105 percent or more. If the applicant is a nonprofit entity, “owner”
11means both the chief executive officer and any member of the
12board of directors.

13(c) “Batch” means a specific quantity of medicalbegin delete marijuanaend delete
14begin insert cannabisend insert or medicalbegin delete marijuana productsend deletebegin insert cannabis productend insert that is
15intended to have uniform character and quality, within specified
16limits, and is produced according to a single manufacturing order
17during the same cycle of manufacture.

18(d) “Bureau” means the Bureau of Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert
19 Regulation within the Department of Consumer Affairs.

20(e) “Cannabinoid” or “phytocannabinoid” means a chemical
21compound that is unique to and derived from cannabis.

22(f) “Cannabis” or “marijuana” means all parts of the plant
23Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis,
24whether growing or not; the seeds thereof; the resin, whether crude
25or purified, extracted from any part of the plant; and every
26compound, manufacture, salt, derivative, mixture, or preparation
27of the plant, its seeds, or resin. “Cannabis” or “marijuana” also
28means the separated resin, whether crude or purified, obtained
29from marijuana. “Cannabis” or “marijuana” also means marijuana
30as defined by Section 11018 of the Health and Safety Code as
31enacted by Chapter 1407 of the Statutes of 1972. “Cannabis” or
32“marijuana” does not include the mature stalks of the plant, fiber
33produced from the stalks, oil or cake made from the seeds of the
34plant, any other compound, manufacture, salt, derivative, mixture,
35or preparation of the mature stalks (except the resin extracted
36therefrom), fiber, oil, or cake, or the sterilized seed of the plant
37begin delete whichend deletebegin insert thatend insert is incapable of germination. For thebegin delete purposeend deletebegin insert purposesend insert
38 of this chapter, “cannabis” or “marijuana” does not mean
39“industrial hemp” as defined by begin deleteSection 81000 of the Food and
P8    1Agricultural Code or end delete
Section 11018.5 of the Health and Safety
2Code.

3(g) “Cannabis concentrate” or “marijuana concentrate” means
4manufacturedbegin delete marijuanaend deletebegin insert cannabisend insert that has undergone a process to
5concentrate the cannabinoid active ingredient, thereby increasing
6the product’s potency. An edible medicalbegin delete marijuanaend deletebegin insert cannabisend insert
7 product is not considered food, as defined by Section 109935 of
8the Health and Safety Code, or a drug, as defined by Section
9109925 of the Health and Safety Code.

10(h) “Caregiver” or “primary caregiver” has the same meaning
11as that term is defined in Section 11362.7 of the Health and Safety
12Code.

13(i) “Certificate of accreditation” means a certificate issued by
14an accrediting body to a licensed testing laboratory, entity, or site
15to be registered in the state.

16(j) “Chief” means Chief of the Bureau of Medicalbegin delete Marijuanaend delete
17begin insert Cannabisend insert Regulation within the Department of Consumer Affairs.

18(k) “Commercialbegin delete marijuanaend deletebegin insert cannabisend insert activity”begin insert or “commercial
19marijuana activityend insert
begin insertend insert includes cultivation, possession, manufacture,
20processing, storing, laboratory testing, labeling, transporting,
21distribution, or sale of medicalbegin delete marijuanaend deletebegin insert cannabisend insert or a medical
22begin delete marijuanaend deletebegin insert cannabisend insert product, except as set forth in Section 19319,
23related to qualifying patients and primary caregivers.

24(l) “Cultivation” means any activity involving the planting,
25growing, harvesting, drying, curing, grading, or trimming of
26begin delete marijuana.end deletebegin insert cannabis.end insert

begin insert

27(m) “Cultivation site” means a facility where medical cannabis
28is planted, grown, harvested, dried, cured, graded, or trimmed, or
29that does all or any combination of those activities, that is owned
30and operated by a person who holds a valid state license and a
31valid local license, permit, or other authorization.

end insert
begin insert

32(n) “Cultivator” means a person that conducts the planting,
33growing, harvesting, drying, curing, grading, or trimming of
34medical cannabis and that holds both a valid state license and a
35valid local license, permit, or other authorization.

end insert
begin delete

28 36(m)

end delete

37begin insert(o)end insert “Delivery” means the commercial transfer of medical
38begin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products from
39a dispensary, up to an amount determined by thebegin delete bureauend deletebegin insert bureau,end insert
40 to a primary caregiver or qualified patient as defined in Section
P9    111362.7 of the Health and Safety Code, or a testing laboratory.
2“Delivery” also includes the use by a dispensary of any technology
3platform owned and controlled by the dispensary, or independently
4licensed under this chapter, that enables qualified patients or
5primary caregivers to arrange for or facilitate the commercial
6transfer by a licensed dispensary of medicalbegin delete marijuanaend deletebegin insert cannabisend insert
7 or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products.

begin delete

8(n)

end delete

9begin insert(p)end insert “Dispensary” means abegin insert commercialend insert facilitybegin insert with a fixed
10location, whether or not there is direct access by customers,end insert
where
11medical begin delete marijuana, medical marijuana products, or devices for the
12use of medical marijuana or medical marijuana productsend delete
begin insert cannabis
13or medical cannabis productsend insert
are offered, either individually or
14in any combination, for retail sale, including an establishment that
15delivers,begin delete pursuant to express authorizationend deletebegin insert unless expressly
16prohibitedend insert
by local ordinance, medicalbegin delete marijuanaend deletebegin insert cannabisend insert and
17medicalbegin delete marijuanaend deletebegin insert cannabisend insert products as part of a retail sale.
18begin delete “Dispensary” includes a virtual dispensary for purposes of
19regulation.end delete

begin delete

8 20(o)

end delete

21begin insert(q)end insert “Dispensing” means any activity involving the retail sale of
22medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert
23 products from a dispensary.

begin delete

11 24(p)

end delete

25begin insert(r)end insert “Distribution” means the procurement, sale, and transport
26of medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert
27 products between entities licensed pursuant to this chapter.

begin delete

14 28(q)

end delete

29begin insert(s)end insert “Distributor” means a personbegin delete licensed under this chapter to
30engageend delete
begin insert engagedend insert in the business of purchasing medicalbegin delete marijuanaend delete
31begin insert cannabisend insert from a licensed cultivator, or medicalbegin delete marijuanaend deletebegin insert cannabisend insert
32 products from a licensed manufacturer, for sale to a licensed
33begin delete dispensary.end deletebegin insert dispensary and who holds a valid state license pursuant
34to this chapter and a valid local license, permit, or other
35authorization.end insert

begin delete

18 36(r)

end delete

37begin insert(t)end insert “Dried flower” means all dead medicalbegin delete marijuanaend deletebegin insert cannabisend insert
38 that has been harvested, dried, cured, or otherwise processed,
39excluding leaves and stems.

begin delete

21 40(s)

end delete

P10   1begin insert(u)end insert “Ediblebegin delete marijuanaend deletebegin insert cannabisend insert product”begin insert or “edible marijuana
2productend insert
begin insertend insert means manufacturedbegin delete marijuanaend deletebegin insert cannabisend insert that is intended
3to be used, in whole or in part, for human consumption, including,
4but not limited to, chewing gum. An edible medicalbegin delete marijuanaend delete
5begin insert cannabisend insert product is not considered food as defined by Section
6109935 of the Health and Safety Code or a drug as defined by
7Section 109925 of the Health and Safety Code.

begin delete

28 8(t)

end delete

9begin insert(v)end insert “Fund” means the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation
10and Safety Act Fund established pursuant to Section 19351.

begin delete

30 11(u)

end delete

12begin insert(w)end insert “Identification program” means the universal identification
13certificate program for commercial medicalbegin delete marijuanaend deletebegin insert cannabisend insert
14 activity authorized by this chapter.

begin delete

33 15(v)

end delete

16begin insert(x)end insert “Labor peace agreement” means an agreement between a
17licensee and a bona fide labor organization that, at a minimum,
18protects the state’s proprietary interests by prohibiting labor
19organizations and members from engaging in picketing, work
20stoppages, boycotts, and any other economic interference with the
21applicant’s business. This agreement means that the applicant has
22agreed not to disrupt efforts by the bona fide labor organization
23to communicate with, and attempt to organize and represent, the
24applicant’s employees. The agreement shall provide a bona fide
25labor organization access at reasonable times to areas in which the
26applicant’s employees work, for the purpose of meeting with
27employees to discuss their right to representation, employment
28rights under state law, and terms and conditions of employment.
29This type of agreement shall not mandate a particular method of
30election or certification of the bona fide labor organization.

begin insert

31(y) “Licensee” means a person issued a state license under this
32chapter to engage in commercial cannabis activity.

end insert
begin delete

8 33(w)

end delete

34begin insert(z)end insert “Licensing authority” means the state agency responsible
35for the issuance, renewal, or reinstatement of the license, or the
36state agency authorized to take disciplinary action against the
37begin delete license.end deletebegin insert licensee.end insert

begin delete

38(x) “Cultivation site” means a facility where medical marijuana
39is planted, grown, harvested, dried, cured, graded, or trimmed, or
40that does all or any combination of those activities, that holds a
P11   1valid state license pursuant to this chapter, and that holds a valid
2local license or permit.

end delete
begin insert

3(aa) “Live plants” means living medical cannabis flowers and
4plants, including seeds, immature plants, and vegetative stage
5plants.

end insert
begin insert

6(ab) “Lot” means a batch, or a specifically identified portion
7of a batch, having uniform character and quality within specified
8limits. In the case of medical cannabis or a medical cannabis
9product produced by a continuous process, “lot” means a
10specifically identified amount produced in a unit of time or a
11quantity in a manner that ensures its having uniform character
12and quality within specified limits.

end insert
begin insert

13(ac) “Manufactured cannabis” or “manufactured marijuana”
14means raw cannabis that has undergone a process whereby the
15raw agricultural product has been transformed into a concentrate,
16an edible cannabis product, or a topical product.

end insert
begin delete

17 17(y)

end delete

18begin insert(ad)end insert “Manufacturer” means a person that conducts the
19production, preparation, propagation, or compounding of
20manufactured medicalbegin delete marijuana,end deletebegin insert cannabis,end insert as described in
21subdivisionbegin delete (ae),end deletebegin insert (ac),end insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products
22either directly or indirectly or by extraction methods, or
23independently by means of chemical synthesis or by a combination
24of extraction and chemical synthesis at a fixed location that
25packages or repackages medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medical
26begin delete marijuanaend deletebegin insert cannabisend insert products or labels or relabels its container,
27that holds a valid state license pursuant to this chapter, and that
28holds a valid localbegin delete license or permit.end deletebegin insert license, permit, or other
29authorization.end insert

begin delete

30(z) “Testing laboratory” means a facility, entity, or site in the
31state that offers or performs tests of medical marijuana or medical
32marijuana products and that is both of the following:

33(1) Accredited by an accrediting body that is independent from
34all other persons involved in the medical marijuana industry in the
35state.

36(2) Registered with the State Department of Public Health.

37(aa) “Transporter” means a person issued a state license by the
38bureau to transport medical marijuana or medical marijuana
39products in an amount above a threshold determined by the bureau
P12   1between facilities that have been issued a state license pursuant to
2this chapter.

3(ab) “Licensee” means a person issued a state license under this
4chapter to engage in commercial marijuana activity.

5(ac) “Live plants” means living medical marijuana flowers and
6plants, including seeds, immature plants, and vegetative stage
7plants.

8(ad) “Lot” means a batch, or a specifically identified portion of
9a batch, having uniform character and quality within specified
10limits. In the case of medical marijuana or a medical marijuana
11product produced by a continuous process, “lot” means a
12specifically identified amount produced in a unit of time or a
13quantity in a manner that ensures its having uniform character and
14quality within specified limits.

15(ae) “Manufactured cannabis” or “manufactured marijuana”
16means raw marijuana that has undergone a process whereby the
17raw agricultural product has been transformed into a concentrate,
18an edible product, or a topical product.

end delete
begin delete

17 19(af)

end delete

20begin insert(ae)end insert “Manufacturing site” means a location that produces,
21prepares, propagates, or compounds manufactured medical
22begin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products,
23directly or indirectly, by extraction methods, independently by
24means of chemical synthesis, or by a combination of extraction
25and chemical synthesis, and is owned and operated by abegin delete licensee
26for these activities.end delete
begin insert person that holds a valid state license pursuant
27to this chapter and a valid local license, permit, or other
28authorization.end insert

begin delete

24 29(ag)

end delete

30begin insert(af)end insert “Medical cannabis,” “medical cannabis product,” “cannabis
31product,” “medical marijuana,” “medical marijuana product,” or
32“marijuana product” means a product containingbegin delete marijuana,end delete
33begin insert cannabis,end insert including, but not limited to, concentrates and
34extractions, intended to be sold for use by medical begin delete marijuanaend delete
35begin insert cannabisend insert patients in California pursuant to the Compassionate Use
36Act of 1996 (Proposition 215), found at Section 11362.5 of the
37Health and Safety Code. For the purposes of this chapter, “medical
38cannabis” or “medical marijuana” does not include “industrial
39hemp” as defined by Section 81000 of the Food and Agricultural
40Code or Section 11018.5 of the Health and Safety Code.

begin delete

36 P13   1(ah)

end delete

2begin insert(ag)end insert “Nursery” means a licensee that produces only clones,
3immature plants, seeds, and other agricultural products used
4specifically for the planting, propagation, and cultivation of medical
5begin delete marijuana.end deletebegin insert cannabis.end insert

begin delete

P11 1 6(ai)

end delete

7begin insert(ah)end insert “Permit,” “local license,” or “local permit” means an
8official document granted by a local jurisdiction that specifically
9authorizes a person to conduct commercialbegin delete marijuanaend deletebegin insert cannabisend insert
10 activity in the local jurisdiction.

begin delete

5 11(aj)

end delete

12begin insert(ai)end insert “Person” means an individual, firm, partnership, joint
13venture, association, corporation, limited liability company, estate,
14trust, business trust, receiver, syndicate, or any other group or
15combination acting as a unit and includes the plural as well as the
16singular number.

begin delete

10 17(ak)

end delete

18begin insert(aj)end insert “Statebegin delete license,” “license,” or “registration”end deletebegin insert license” or
19“licenseend insert
begin insertend insert means a state license issued pursuant to this chapter.

begin delete

12 20(al)

end delete

21begin insert(ak)end insert “Topicalbegin delete cannabis” or “topical marijuana”end deletebegin insert productend insertbegin insertend insert means
22a productbegin delete intended for external use.end deletebegin insert manufactured such that its
23final stage is in the form of a topical drug, as defined by the Center
24for Drug Evaluation and Research under the federal Food and
25Drug Administration.end insert
A topicalbegin delete marijuanaend delete product is not considered
26a drug as defined by Section 109925 of the Health and Safety
27Code.

begin insert

28(al) “Testing laboratory” means a facility, entity, or site in the
29state that offers or performs tests of medical cannabis or medical
30cannabis products and that is both of the following:

end insert
begin insert

31(1) Accredited by an accrediting body that is independent from
32all other persons involved in the medical cannabis industry in the
33state.

end insert
begin insert

34(2) Registered with the State Department of Public Health.

end insert

16 35(am) “Transport” means the transfer of medicalbegin delete marijuanaend delete
36begin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products from the
37permitted business location of one licensee to the permitted
38business location of another licensee, for the purposes of
39conducting commercialbegin delete marijuanaend deletebegin insert cannabisend insert activity authorized
40pursuant to this chapter.

begin insert

P14   1(an) “Transporter” means a person issued a state license by
2the bureau to transport medical cannabis or medical cannabis
3products in an amount above a threshold determined by the bureau
4between facilities that have been issued a state license pursuant
5to this chapter.

end insert
6begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 19302 of the end insertbegin insertBusiness and Professions Codeend insert
7begin insert is amended to read:end insert

8

19302.  

There is in the Department of Consumer Affairs the
9Bureau of Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation, under the
10supervision and control of the director. The director shall
11administer and enforce the provisions of this chapter.

12begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 19302.1 of the end insertbegin insertBusiness and Professions Codeend insert
13begin insert is amended to read:end insert

14

19302.1.  

(a) The Governor shall appoint a chief of the bureau,
15subject to confirmation by the Senate, at a salary to be fixed and
16determined by thebegin delete directorend deletebegin insert Director of Consumer Affairsend insert with the
17approval of the Director of Finance. The chief shall serve under
18the direction and supervision of thebegin delete directorend deletebegin insert Director of Consumer
19Affairsend insert
and at the pleasure of the Governor.

20(b) Every power granted to or duty imposed upon the director
21under this chapter may be exercised or performed in the name of
22the director by a deputy or assistant director or by the chief, subject
23to conditions and limitations that the director may prescribe. In
24addition to every power granted or duty imposed with this chapter,
25the director shall have all other powers and duties generally
26applicable in relation to bureaus that are part of the Department
27of Consumer Affairs.

28(c) The director may employ and appoint all employees
29necessary to properly administer the work of the bureau, in
30accordance with civil service laws and regulations.

31(d) The Department of Consumer Affairs shall have the sole
32authority to create, issue, renew, discipline, suspend, or revoke
33licenses for the transportation, storage unrelated to manufacturing
34activities, distribution, and sale of medicalbegin delete marijuanaend deletebegin insert cannabisend insert
35 within the state and to collect fees in connection with activities
36the bureau regulates. The bureau may create licenses in addition
37to those identified in this chapter that the bureau deems necessary
38to effectuate its duties under this chapter.

39(e) The Department of Food and Agriculture shall administer
40the provisions of this chapter related to and associated with the
P15   1cultivation of medical cannabis. The Department of Food and
2Agriculturebegin delete shall have the authority toend deletebegin insert mayend insert create, issue, and
3suspend or revoke cultivation licenses for violations of this chapter.
4begin delete Theend delete

5begin insert(f)end insertbegin insertend insertbegin insertTheend insert State Department of Public Health shall administer the
6provisions of this chapter related to and associated with the
7manufacturing and testing of medical cannabis.begin insert The State
8Department of Public Health may create, issue, and suspend or
9revoke manufacturing and testing licenses for a violation of this
10chapter.end insert

11begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 19306 of the end insertbegin insertBusiness and Professions Codeend insert
12begin insert is amended to read:end insert

13

19306.  

(a) The bureau may convene an advisory committee
14to advise the bureau and licensing authorities on the development
15of standards and regulations pursuant to this chapter, including
16best practices and guidelines to ensure qualified patients have
17adequate access to medical cannabis and medical cannabis
18products. The advisory committee members shall be determined
19by the chief.

20(b) The advisory committee members may include, butbegin insert areend insert not
21begin delete beend delete limited to, representatives of the medicalbegin delete marijuanaend deletebegin insert cannabisend insert
22 industry, representatives of medicalbegin delete marijuanaend deletebegin insert cannabisend insert cultivators,
23appropriate local and state agencies, appropriate local and state
24law enforcement, physicians, environmental and public health
25experts, and medicalbegin delete marijuanaend deletebegin insert cannabisend insert patient advocates.

26begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 19310 of the end insertbegin insertBusiness and Professions Codeend insert
27begin insert is amended to read:end insert

28

19310.  

Thebegin delete department mayend deletebegin insert licensing authority may,end insert on its
29own motion at any time before a penalty assessment is placed into
30effect and without any further proceedings, review the penalty,
31butbegin delete suchend deletebegin insert thatend insert review shall be limited to its reduction.

32

begin deleteSEC. 2.end delete
33begin insertSEC. 8.end insert  

Section 19310.5 is added to the Business and
34Professions Code
, to read:

35

19310.5.  

(a) It is the intent of the Legislature to enact a statute
36that improves the medicalbegin delete marijuanaend deletebegin insert cannabisend insert industry’s ability
37to comply with federal law and regulations that would allow
38improved access tobegin delete financialend deletebegin insert bankingend insert services.

39(b) (1) The State Board of Equalization shall form an advisory
40group made up of representatives from financial institutions, the
P16   1medicalbegin delete marijuanaend deletebegin insert cannabisend insert industry, and state and federal banking
2regulators. By July 1, 2017, the board shall submit a report to the
3Legislature with proposed changes to state law or regulations that
4will improve financial monitoring of medicalbegin delete marijuanaend deletebegin insert cannabisend insert
5 businesses and improve compliance with federal law.

6(2) A report submitted pursuant to paragraph (1) shall be
7submitted in compliance with Section 9795 of the Government
8Code. Thebegin delete requirmentend deletebegin insert requirementend insert for submitting a report imposed
9in paragraph (1) is inoperative on July 1, 2021, pursuant to Section
1010231.5 of the Government Code.

11(c) The advisory group shall examine strategies, such as the use
12ofbegin delete automated kiosks for accepting cash payments,end delete integrated
13point-of-sale systems with state track and tracebegin delete systems,end deletebegin insert systemsend insert
14 and other measures that will improve financial monitoring of
15medicalbegin delete marijuanaend deletebegin insert cannabisend insert businesses.

begin insert

16(d) (1) The Department of Business Oversight shall create an
17enhanced financial monitoring certification for entities licensed
18pursuant to this chapter that further enables those entities to
19comply with the federal banking regulations under the federal
20Bank Secrecy Act. The Department of Business Oversight shall
21consider including requirements to use electronic financial
22monitoring that enables real-time sales inventory tracking and
23other tools that allow a bank or credit union to readily access
24information they are required to monitor under the federal Bank
25Secrecy Act.

end insert
begin insert

26(2) The Department of Business Oversight may collect fees from
27applicants requesting the enhanced financial monitoring
28certification in an amount sufficient to fund the actual reasonable
29costs of implementing subdivision (d).

end insert
30

begin deleteSEC. 3.end delete
31begin insertSEC. 9.end insert  

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

33

19316.  

(a) (1) Except as described in paragraph (2), and
34pursuant to Section 7 of Article XI of the California Constitution,
35a city, county, or city and county may adopt ordinances that
36establish additional standards, requirements, and regulations for
37local licenses and permits for commercialbegin delete marijuanaend deletebegin insert cannabisend insert
38 activity.begin delete Any standards,end deletebegin insert Standards,end insert requirements, and regulations
39regarding health and safety, testing, security, and worker
P17   1protections established by the state shall be the minimum standards
2for all licensees statewide.

3(2) Packaging safety standards shall be uniform across the state
4and shall be established by the State Department of Public Health.

5(3) For purposes of this subdivision, packaging safety standards
6do not include packaging requirements related to appellations of
7origin or other branding or marketing materials.

8(b) For facilities issued a state license that are located within
9the incorporated area of a city, the city shall have full power and
10authority to enforce this chapter and the regulations promulgated
11by the bureau or any licensing authority, if delegated by the state.
12Notwithstanding Sections 101375, 101400, and 101405 of the
13Health and Safety Code or any contract entered into pursuant
14thereto, or any other law, the city shall further assume complete
15responsibility for any regulatory function relating to those licensees
16within the city limits that would otherwise be performed by the
17county or any county officer or employee, including a county
18health officer, without liability, cost, or expense to the county.

19(c) Nothing in this chapter, or any regulations promulgated
20thereunder, shall be deemed to limit the authority or remedies of
21a city, county, or city and county under any provision of law,
22including, but not limited to, Section 7 of Article XI of the
23California Constitution.

24begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 19318 of the end insertbegin insertBusiness and Professions Codeend insert
25begin insert is repealed.end insert

begin delete
26

19318.  

(a) A person engaging in commercial cannabis activity
27without a license required by this chapter shall be subject to civil
28penalties of up to twice the amount of the license fee for each
29violation, and the court may order the destruction of medical
30cannabis associated with that violation in accordance with Section
3111479 of the Health and Safety Code. Each day of operation shall
32constitute a separate violation of this section. All civil penalties
33imposed and collected pursuant to this section by a licensing
34authority shall be deposited into the Medical Cannabis Fines and
35Penalties Account established pursuant to Section 19351.

36(b) If an action for civil penalties is brought against a licensee
37pursuant to this chapter by the Attorney General on behalf of the
38people, the penalty collected shall be deposited into the Medical
39Cannabis Fines and Penalties Account established pursuant to
40Section 19351. If the action is brought by a district attorney or
P18   1county counsel, the penalty collected shall be paid to the treasurer
2of the county in which the judgment was entered. If the action is
3brought by a city attorney or city prosecutor, the penalty collected
4shall be paid to the treasurer of the city or city and county in which
5the judgment was entered. If the action is brought by a city attorney
6and is adjudicated in a superior court located in the unincorporated
7area or another city in the same county, the penalty shall be paid
8one-half to the treasurer of the city in which the complaining
9attorney has jurisdiction and one-half to the treasurer of the county
10in which the judgment is entered.

11(c) Notwithstanding subdivision (a), criminal penalties shall
12continue to apply to an unlicensed person engaging in commercial
13cannabis activity in violation of this chapter, including, but not
14limited to, those individuals covered under Section 11362.7 of the
15Health and Safety Code.

end delete
16

begin deleteSEC. 4.end delete
17begin insertSEC. 11.end insert  

Section 19319.5 is added to the Business and
18Professions Code
, to read:

19

19319.5.  

(a) (1) Itbegin delete shall not beend deletebegin insert is notend insert a violation of this chapter
20or any other state law,begin delete and it shall not be a violation of any local
21ordinance or regulationend delete
for a business or research institution
22engaged in the research of medicalbegin delete marijuana,end deletebegin insert cannabis,end insert medical
23begin delete marijuanaend deletebegin insert cannabisend insert products, or devices used for the medical use
24ofbegin delete marijuanaend deletebegin insert cannabisend insert orbegin delete marijuanaend deletebegin insert cannabisend insert products, to possess,
25transport, purchase, or otherwisebegin delete obtainend deletebegin insert legally obtain, pursuant
26to this chapter,end insert
small amounts of medicalbegin delete marijuanaend deletebegin insert cannabisend insert or
27medicalbegin delete marijuanaend deletebegin insert cannabisend insert products, as determined by the bureau
28but not to exceed eight ounces per month, as necessary to conduct
29research and development related to medicalbegin delete marijuanaend deletebegin insert cannabisend insert
30 or medicalbegin delete marijuana products.end deletebegin insert cannabis products in a city, county,
31or city and county that expressly authorizes that activity by local
32ordinance.end insert

33(2) Medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert
34 products subject to this section shall be obtained only from abegin delete person
35or entity licensed pursuant to this chapter,end delete
begin insert licenseeend insert who is permitted
36to provide or deliver the medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medical
37begin delete marijuanaend deletebegin insert cannabisend insert product.begin delete Theend deletebegin insert Aend insert business or research institution
38shallbegin insert onlyend insert obtainbegin delete aend delete medicalbegin delete marijuana research permitend deletebegin insert cannabis or
39medical cannabis products for research purposes pursuant to
40regulations established by the bureauend insert
pursuant to subdivision (b).

P19   1(b) The bureau shallbegin delete issue a medical marijuana research permit
2to allow for permitholders to pursue the research described in
3subdivision (a). It is the intent of the Legislature to establish
4minimum requirements for the medical marijuana research permit,
5includingend delete
begin insert promulgate regulations to establish minimum
6qualifications for state authorization to conduct research on
7medical cannabis or medical cannabis products and all related
8protocols. The regulations shall include, but not be limited to,end insert
the
9following:

10(1) The requirement for all medicalbegin delete marijuanaend deletebegin insert cannabisend insert and
11medicalbegin delete marijuanaend deletebegin insert cannabisend insert products usedbegin delete under a medical
12marijuana research permit toend delete
begin insert for research purposes toend insert be subject
13to all requirements of the state’s track and trace program
14established pursuant to this chapter.

15(2) The requirement that all applicantsbegin delete for a medical marijuana
16research permitend delete
begin insert pursuing state authorization for research on
17medical cannabis or medical cannabis productsend insert
obtain permission
18to operate from the local jurisdiction in which the applicant intends
19to conduct the research.begin insert A person shall not conduct research on
20medical cannabis or medical cannabis products without approval
21from both the state and the local jurisdiction in which the research
22is being conducted.end insert

23(3) The maximum amount of medicalbegin delete marijuanaend deletebegin insert cannabisend insert and
24medicalbegin delete marijuanaend deletebegin insert cannabisend insert products that may be obtained per
25month for research purposes. In no case shall abegin delete permitholderend deletebegin insert person
26approved to conduct research on medical cannabis and medical
27cannabis productsend insert
obtain more than eight ounces per month for
28 research purposes.

29

begin deleteSEC. 5.end delete
30begin insertSEC. 12.end insert  

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

32

19321.  

(a) The Department of Consumer Affairs, the
33Department of Food and Agriculture, and the State Department of
34Public Health shall promulgate regulations for implementation of
35their respective responsibilities in the administration of this chapter.
36begin insert The secretary or director of each licensing authority may prescribe,
37adopt, and enforce emergency regulations necessary to implement
38this chapter.end insert

39(b) Except as described in subdivision (e), abegin insert stateend insert license issued
40pursuant to this section shall be valid for 12 months from the date
P20   1of issuance. Thebegin insert stateend insert license shall be renewed annually. Each
2licensing authority shall establish procedures for the renewal of a
3begin insert stateend insert license.

4(c) Notwithstanding subdivision (a) of Section 19320, a facility
5or entity that is operating in compliance with local zoning
6ordinances and other state and local requirements on or before
7January 1, 2018, may continue its operations until its application
8for licensure is approved or denied pursuant to this chapter. In
9issuing licenses, the licensing authority shall prioritizebegin delete anyend deletebegin insert aend insert facility
10or entity that can demonstrate to thebegin insert licensingend insert authority’s
11satisfaction that it was in operation and in good standing with the
12local jurisdiction by January 1, 2016.

13(d) Issuance of a state license or a determination of compliance
14with local law by the licensing authority shall in no way limit the
15ability of the City of Los Angeles to prosecute any person or entity
16for a violation of, or otherwise enforce, Proposition D, approved
17by the voters of the City of Los Angeles on the May 21, 2013,
18ballot for the city, or the city’s zoning laws. Nor may issuance of
19abegin insert stateend insert license or determination of compliance with local law by
20the licensing authority be deemed to establish, or be relied upon,
21in determining satisfaction with the immunity requirements of
22Proposition D or local zoning law, in court or in any other context
23or forum.

begin delete

24(e) The bureau may issue temporary permits for business events.
25It is the intent of the Legislature to establish minimum standards
26and requirements for temporary permits for medical marijuana and
27medical marijuana products.

end delete
28begin insert

begin insertSEC. 13.end insert  

end insert

begin insertSection 19322 of the end insertbegin insertBusiness and Professions Codeend insert
29begin insert is amended to read:end insert

30

19322.  

(a) A person or entity shall not submit an application
31for a state licensebegin delete issued by the departmentend delete pursuant to this chapter
32unless that person or entity has received a license, permit, or
33authorizationbegin delete byend deletebegin insert fromend insert a local jurisdiction. An applicant for any
34type of state license issued pursuant to this chapter shall do all of
35the following:

36(1) Electronically submit to the Department of Justice fingerprint
37images and related information required by the Department of
38Justice for the purpose of obtaining information as to the existence
39and content of a record of state or federal convictions and arrests,
40and information as to the existence and content of a record of state
P21   1or federal convictions and arrests for which the Department of
2Justice establishes that the person is free on bail or on his or her
3own recognizance, pending trial or appeal.

4(A) The Department of Justice shall provide a response to the
5licensing authority pursuant to paragraph (1) of subdivision (p) of
6Section 11105 of the Penal Code.

7(B) The licensing authority shall request from the Department
8of Justice subsequent notification service, as provided pursuant to
9Section 11105.2 of the Penal Code, for applicants.

10(C) The Department of Justice shall charge the applicant a fee
11sufficient to cover the reasonable cost of processing the requests
12 described in this paragraph.

13(2) Provide documentation issued by the local jurisdiction in
14which the proposed business is operating certifying that the
15applicant is or will be in compliance with all local ordinances and
16regulations.

17(3) Provide evidence of the legal right to occupy and use the
18proposed location. For an applicant seeking a cultivator, distributor,
19manufacturing, or dispensary license, provide a statement from
20the owner of real property or their agent where the cultivation,
21distribution, manufacturing, or dispensing commercial medical
22cannabis activities will occur, as proof to demonstrate the
23landowner has acknowledged and consented to permit cultivation,
24distribution, manufacturing, or dispensary activities to be conducted
25on the property by the tenant applicant.

26(4) If the application is for a cultivator orbegin delete a dispensary,end delete
27begin insert dispensarend insertbegin inserty license,end insert provide evidence that the proposed location is
28located beyond at least a 600-foot radius from a school, as required
29by Section 11362.768 of the Health and Safety Code.

30(5) Provide a statement, signed by the applicant under penalty
31of perjury, that the information provided is complete, true, and
32accurate.

33(6) (A) For an applicant with 20 or more employees, provide
34a statement that the applicant will enter into, or demonstrate that
35it has already entered into, and abide by the terms of a labor peace
36agreement.

37(B) For the purposes of this paragraph, “employee” does not
38include a supervisor.

39(C) For purposes of this paragraph, “supervisor” means an
40individual having authority, in the interest of the licensee, to hire,
P22   1transfer, suspend, lay off, recall, promote, discharge, assign,
2reward, or discipline other employees, or responsibility to direct
3them or to adjust their grievances, or effectively to recommend
4such action, if, in connection with the foregoing, the exercise of
5that authority is not of a merely routine or clerical nature, but
6requires the use of independent judgment.

7(7) Provide the applicant’sbegin insert validend insert seller’s permit number issued
8pursuant to Part 1 (commencing with Section 6001) of Division 2
9of the Revenue and Taxation Code or indicate that the applicant
10is currently applying for a seller’s permit.

11(8) Provide any other information required by the licensing
12authority.

13(9) For an applicant seeking a cultivation license, provide a
14statement declaring the applicant is an “agricultural employer,” as
15defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
16Labor Relations Act of 1975 (Part 3.5 (commencing with Section
171140) of Division 2 of the Labor Code), to the extent not prohibited
18by law.

19(10) For an applicant seeking licensure as a testing laboratory,
20register with the State Department of Public Health and provide
21any information required by the State Department of Public Health.

22(11) Pay all applicable fees required for licensure by the
23licensing authority.

24(b) For applicants seeking licensure to cultivate, distribute, or
25 manufacture medicalbegin delete cannabis,end deletebegin insert cannabis or medical cannabis
26products,end insert
the application shall also include a detailed description
27of the applicant’s operating procedures for all of the following, as
28required by the licensing authority:

29(1) Cultivation.

30(2) Extraction and infusion methods.

31(3) The transportation process.

32(4) Inventory procedures.

33(5) Quality control procedures.

34

begin deleteSEC. 6.end delete
35begin insertSEC. 14.end insert  

Section 19322.5 is added to the Business and
36Professions Code
, to read:

37

19322.5.  

Abegin delete licenceeend deletebegin insert licenseeend insert may operate as a for-profit
38business, as a not-for-profit entity, or as a combination of both.

P23   1begin insert

begin insertSEC. 15.end insert  

end insert

begin insertThe heading of Article 5 (commencing with Section
219326) of Chapter 3.5 of Division 8 of the end insert
begin insertBusiness and Professions
3Code
end insert
begin insert is amended to read:end insert

4 

5Article 5.  Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation
6

 

7

begin deleteSEC. 7.end delete
8begin insertSEC. 16.end insert  

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

10

19326.  

(a) A person other than abegin delete licensedend delete transporter shall not
11transport medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend delete
12begin insert cannabisend insert products from one licensee to another licensee, unless
13otherwise specified in this chapter.

begin delete

14(b) All licensees holding cultivation or manufacturing licenses

end delete

15begin insert(b)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insertbegin insertA cultivator or a manufacturerend insert shall sendbegin delete allend delete medical
16begin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert products
17cultivated or manufactured to a distributor, as defined in Section
1819300.5, for quality assurance and inspection by thebegin delete Type 11
19licenseeend delete
begin insert distributorend insert and for a batch testing by abegin delete Type 8 licenseeend delete
20begin insert testing laboratoryend insert prior to distribution to abegin delete dispensary.end deletebegin insert dispensary,
21except as provided in paragraph (2).end insert
Those licensees holding a
22Type 10A license in addition to a cultivation license or a
23manufacturing license shall sendbegin delete allend delete medicalbegin delete marijuanaend deletebegin insert cannabisend insert
24 and medicalbegin delete marijuanaend deletebegin insert cannabisend insert products to abegin delete Type 11 licenseeend delete
25begin insert distributorend insert for presale inspection and for a batch testing by abegin delete Type
268 licenseeend delete
begin insert testing laboratoryend insert prior to dispensing any product. The
27licensing authority shall fine a licensee who violates this
28subdivision in an amount determined by the licensing authority to
29be reasonable.

begin insert

30(2) A cultivator is not required to send medical cannabis to a
31distributor if the medical cannabis is to be used, sold, or otherwise
32distributed by methods approved pursuant to this chapter to a
33manufacturer for further manufacturing.

end insert

34(c) (1) Upon receipt of medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medical
35begin delete marijuanaend deletebegin insert cannabisend insert productsbegin delete byend deletebegin insert fromend insert abegin delete holder of a cultivation or
36manufacturing license, the Type 11 licenseeend delete
begin insert cultivator or a
37manufacturer, the distributorend insert
shall firstbegin delete inspect the product to
38ensure the identity and quantity of the product and then ensure a
39random sample of the medical marijuana or medical marijuana
40product is tested by a Type 8 licensee prior to distributing the
P24   1batch.end delete
begin insert ensure a random sample of the medical cannabis or medical
2cannabis product is tested by a testing laboratoryend insert
begin insert.end insert

3(2) Upon issuance of a certificate of analysis by thebegin delete Type 8
4licenseeend delete
begin insert testing laboratoryend insert that the product is fit for manufacturing
5or retail,begin delete allend deletebegin insert the cultivator or manufacturer shall sendend insert medical
6begin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert productsbegin insert from
7the approved associated batch to the distributor. All medical
8cannabis and medical cannabis productsend insert
shallbegin insert thenend insert undergo a
9quality assurance review by thebegin delete Type 11 licenseeend deletebegin insert distributorend insert prior
10to distribution to ensure thebegin delete quantityend deletebegin insert identity, quality,end insert and content
11of the medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert
12 product, and for tracking and taxation purposes by the state.
13begin delete Licensed cultivatorsend deletebegin insert Cultivatorsend insert and manufacturers shall package
14or seal all medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend delete
15begin insert cannabisend insert products in tamper-evident packaging and use a unique
16identifier, as prescribed by the Department of Food and
17Agriculture, for the purpose of identifying and tracking medical
18begin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products.
19Medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert
20 products shall be labeled as required by Section 19347, except as
21otherwise specified in this chapter. All packaging and sealing shall
22be completed prior to medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medical
23begin delete marijuanaend deletebegin insert cannabisend insert products being transported or delivered to a
24licensee, qualified patient, or caregiver, except as otherwise
25specified in this chapter. The bureau shall specify the manner in
26which medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert
27 products meant for wholesale purposes shall be packaged and
28sealed prior to transport, testing, quality assurance, quality control
29testing, or distribution.

30(3) This section does not limit the ability ofbegin delete licensed cultivators,
31manufacturers, and dispensariesend delete
begin insert a cultivator, manufacturer, or
32dispensaryend insert
to directly enter into contracts with one another
33indicating the price and quantity of medicalbegin delete marijuanaend deletebegin insert cannabisend insert
34 or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products to be distributed. However,
35abegin delete Type 11 licenseeend deletebegin insert distributorend insert responsible for executing the
36contract is authorized to collect a fee for the services rendered,
37including, but not limited to, costs incurred by abegin delete Type 8 licensee,end delete
38begin insert testing laboratory,end insert as well as applicable state or local taxes and
39fees.

P25   1(d) Medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabis end insert
2products shall be tested by abegin delete registeredend delete testing laboratory, prior to
3retail sale or dispensing, as follows:

4(1) Medicalbegin delete marijuanaend deletebegin insert cannabisend insert from dried flower shall, at a
5minimum, be tested for concentration, pesticides, mold, and other
6contaminants.

7(2) Medicalbegin delete marijuanaend deletebegin insert cannabisend insert extracts shall, at a minimum,
8be tested for concentration and purity of the product.

9(3) This chapter shall not prohibit a licensee from performing
10on-site testing for the purposes of quality assurance of the product
11in conjunction with reasonable business operations. On-site testing
12by the licensee shall not be certified by the State Department of
13Public Health.

14(e) All commercialbegin delete marijuanaend deletebegin insert cannabisend insert activity shall be
15conducted betweenbegin delete licensees, when these are available.end deletebegin insert licensees.end insert

begin insert

16(f) The bureau shall promulgate regulations relating to the
17amounts of each batch of medical cannabis or medical cannabis
18product that a cultivator or manufacturer is required to send to a
19distributor for inspection and a testing laboratory for testing. The
20regulations shall focus on reducing diversion, ensuring the quality
21of the product for the health and safety of patients, and allowing
22for efficiency in enforcement.

end insert
23

begin deleteSEC. 8.end delete
24begin insertSEC. 17.end insert  

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

26

19328.  

(a) Except as specified in paragraph (9), a licensee may
27only hold a state license in up to two separate license categories,
28as follows:

29(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either
30a Type 6 or 7 state license.

31(2) Type 6 or 7 licensees, or a combination thereof, may also
32hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license.

33(3) Type 6 or 7 licensees, or a combination thereof, may also
34hold a Type 10A state license.

35(4) Type 10A licensees may also hold either a Type 6 or 7 state
36license, or a combination thereof.

37(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
38thereof, may also hold a Type 10A state license.

39(6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A,
40or 2B state license, or a combination thereof.

P26   1(7) Type 11 licensees shall apply for a Type 12 state license,
2but shall not apply for any other type of state license.

3(8) Type 12 licensees may apply for a Type 11 state license.

4(9) A Type 10A licensee may apply for a Type 6 or 7 state
5license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or
6 combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B,
74 or combination of licenses thereof, no more than four acres of
8total canopy size of cultivation by the licensee is occurring
9throughout the state during the period that the respective licenses
10are valid. All cultivation pursuant to this section shall comply with
11local ordinances. By January 1, 2025, the bureau shall review the
12appropriateness of continuing licensure under this paragraph and
13shallbegin delete reportsend deletebegin insert reportend insert its recommendation for elimination or extension
14of these provisions to the Legislature.

15(b) Except as provided in subdivision (a), a person or entity that
16holds a state license is prohibited from licensure for any other
17activity authorized under this chapter, and is prohibited from
18holding an ownership interest in real property, personal property,
19or other assets associated with or used in any other license category.

20(c) (1) In a jurisdiction that adopted a local ordinance, prior to
21July 1, 2015, allowing or requiring qualified businesses to cultivate,
22manufacture, and dispense medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medical
23begin delete marijuanaend deletebegin insert cannabisend insert products, with all commercialbegin delete marijuanaend delete
24begin insert cannabisend insert activity being conducted by a single qualified business,
25upon licensure that business shall not be subject to subdivision (a)
26if it meets all of the following conditions:

27(A) The business was cultivating, manufacturing, and dispensing
28medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabis end insert
29products on July 1, 2015, and has continuously done so since that
30date.

31(B) The business has been in full compliance with all applicable
32local ordinances at all times prior to licensure.

33(C) The business is registered with the State Board of
34begin delete Equalization.end deletebegin insert Equalization for tax purposes.end insert

35(2) A business licensed pursuant to paragraph (1) is not required
36to conduct all cultivation or manufacturing within the bounds of
37abegin insert singleend insert local jurisdiction, but all cultivation and manufacturing
38shall have commenced prior to July 1, 2015, and have been in full
39compliance with applicable local ordinances.

P27   1(d) This section shall remain in effect only until January 1, 2026,
2and as of that date is repealed.

3

begin deleteSEC. 9.end delete
4begin insertSEC. 18.end insert  

Section 19328 is added to the Business and
5Professions Code
, to read:

6

19328.  

(a) A licensee may only hold a state license in up to
7two separate license categories, as follows:

8(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either
9a Type 6 or 7 state license.

10(2) Type 6 or 7 licensees, or a combination thereof, may also
11hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license.

12(3) Type 6 or 7 licensees, or a combination thereof, may also
13hold a Type 10A state license.

14(4) Type 10A licensees may also hold either a Type 6 or 7 state
15license, or a combination thereof.

16(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
17thereof, may also hold a Type 10A state license.

18(6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A,
19or 2B state license, or a combination thereof.

20(7) Type 11 licensees shall apply for a Type 12 state license,
21but shall not apply for any other type of state license.

22(8) Type 12 licensees may apply for a Type 11 state license.

23(9) A Type 10A licensee may apply for a Type 6 or 7 state
24license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or
25combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B,
264 or combination of licenses thereof, no more than four acres of
27total canopy size of cultivation by the licensee is occurring
28throughout the state during the period that the respective licenses
29are valid. All cultivation pursuant to this section shall comply with
30local ordinances.

31(b) Except as provided in subdivision (a), a person or entity that
32holds a state license is prohibited from licensure for any other
33activity authorized under this chapter, and is prohibited from
34holding an ownership interest in real property, personal property,
35or other assets associated with or used in any other license category.

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

37

begin deleteSEC. 10.end delete
38begin insertSEC. 19.end insert  

Section 19332 of the Business and Professionsbegin delete Codeend delete
39begin insert Codeend insert
begin insert, as added by Section 1 of Chapter 688 of the Statutes of 2015,end insert
40 is amended to read:

P28   1

19332.  

(a) The Department of Food and Agriculture shall
2promulgate regulations governing the licensing of indoor and
3outdoor cultivation sites.

4(b) The Department of Pesticide Regulation, in consultation
5with the Department of Food and Agriculture, shall develop
6standards for the use of pesticides in cultivation, and maximum
7tolerances for pesticides and other foreign object residue in
8harvestedbegin delete marijuana.end deletebegin insert cannabis.end insert

9(c) The State Department of Public Health shall develop
10standards for the production and labeling of all edible medical
11begin delete marijuanaend deletebegin insert cannabisend insert products.

12(d) The Department of Food and Agriculture, in consultation
13with the Department of Fish and Wildlife and the State Water
14Resources Control Board, shall ensure that individual and
15cumulative effects of water diversion and discharge associated
16with cultivation do not affect the instream flows needed for fish
17spawning, migration, and rearing, and the flows needed to maintain
18natural flow variability.

19(e) The Department of Food and Agriculture shall have the
20authority necessarybegin delete for the implementation ofend deletebegin insert to implementend insert the
21regulations it adopts pursuant to this chapter. The regulations shall
22do all of the following:

23(1) Provide that weighing or measuring devices used in
24connection with the sale or distribution of medicalbegin delete marijuanaend delete
25begin insert cannabisend insert are required to meet standards equivalent to Division 5
26(commencing with Section 12001).

27(2) Require thatbegin delete marijuanaend deletebegin insert medical cannabisend insert cultivation by
28licensees is conducted in accordance with state and local laws
29related to land conversion, grading, electricity usage, water usage,
30agricultural discharges, and similar matters. Nothing in this chapter,
31and no regulation adopted by the department, shall be construed
32to supersede or limit the authority of the State Water Resources
33Control Board, regional water quality control boards, or the
34Department of Fish and Wildlife to implement and enforce their
35statutory obligations or to adopt regulations to protect water quality,
36water supply, and natural resources.

37(3) Establish procedures for the issuance and revocation of
38unique identifiers for activities associated with abegin delete marijuanaend deletebegin insert medical
39cannabisend insert
cultivation license, pursuant to Article 8 (commencing
40with Section 19337). Allbegin delete marijuanaend deletebegin insert medical cannabisend insert shall be
P29   1labeled with the unique identifier issued by the Department of
2Food and Agriculture.

3(4) Prescribe standards, in consultation with the bureau, for the
4reporting of information as necessary related to unique identifiers,
5pursuant to Article 8 (commencing with Section 19337).

6(f) The Department of Pesticide Regulation, in consultation with
7the State Water Resources Control Board, shall promulgate
8regulations that require that the application of pesticides or other
9pest control in connection with the indoor or outdoor cultivation
10of medicalbegin delete marijuanaend deletebegin insert cannabisend insert meets standards equivalent to
11Division 6 (commencing with Section 11401) of the Food and
12Agricultural Code and its implementing regulations.

13(g) State cultivator license types issued by the Department of
14Food and Agriculture include:

15(1) Type 1, or “specialty outdoor,” for outdoor cultivation using
16no artificial lighting of less than or equal to 5,000 square feet of
17total canopy size on one premises, or up to 50 mature plants on
18noncontiguous plots.

19(2) Type 1A, or “specialty indoor,” for indoor cultivation using
20exclusively artificial lighting of less than or equal to 5,000 square
21feet of total canopy size on one premises.

22(3) Type 1B, or “specialty mixed-light,” for cultivation using a
23combination of natural and supplemental artificial lighting at a
24maximum threshold to be determined by the licensing authority,
25of less than or equal to 5,000 square feet of total canopy size on
26one premises.

27(4) Type 2, or “small outdoor,” for outdoor cultivation using
28no artificial lighting between 5,001 and 10,000 square feet,
29inclusive, of total canopy size on one premises.

30(5) Type 2A, or “small indoor,” for indoor cultivation using
31exclusively artificial lighting between 5,001 and 10,000 square
32 feet, inclusive, of total canopy size on one premises.

33(6) Type 2B, or “small mixed-light,” for cultivation using a
34combination of natural and supplemental artificial lighting at a
35maximum threshold to be determined by the licensing authority,
36between 5,001 and 10,000 square feet, inclusive, of total canopy
37size on one premises.

38(7) Type 3, or “outdoor,” for outdoor cultivation using no
39 artificial lighting from 10,001 square feet to one acre, inclusive,
P30   1of total canopy size on one premises. The Department of Food and
2Agriculture shall limit the number of licenses allowed of this type.

3(8) Type 3A, or “indoor,” for indoor cultivation using
4exclusively artificial lighting between 10,001 and 22,000 square
5feet, inclusive, of total canopy size on one premises. The
6Department of Food and Agriculture shall limit the number of
7licenses allowed of this type.

8(9) Type 3B, or “mixed-light,” for cultivation using a
9combination of natural and supplemental artificial lighting at a
10maximum threshold to be determined by the licensing authority,
11between 10,001 and 22,000 square feet, inclusive, of total canopy
12size on one premises. The Department of Food and Agriculture
13shall limit the number of licenses allowed of this type.

14(10) Type 4, or “nursery,” for cultivation of medicalbegin delete marijuanaend delete
15begin insert cannabisend insert solely as a nursery.begin insert Aend insert Type 4begin delete licenseesend deletebegin insert licenseeend insert may
16transport live immature plants, subject to the tracking, security,
17and related requirementsbegin delete of Sections 19334 to 19338, inclusive.end delete
18begin insert in accordance with Article 7 (commencing with Section 19334),
19Article 7.5 (commencing with Section 19335), and Article 8
20(commencing with Section 19337).end insert

21begin insert

begin insertSEC. 20.end insert  

end insert

begin insertSection 19332 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert,
22as added by Section 13 of Chapter 719 of the Statutes of 2015, is
23amended to read:end insert

24

19332.  

(a) The Department of Food and Agriculture shall
25promulgate regulations governing the licensing of indoor and
26outdoor cultivation sites.

27(b) The Department of Pesticide Regulation, in consultation
28with the Department of Food and Agriculture, shall develop
29standards for the use of pesticides in cultivation, and maximum
30tolerances for pesticides and other foreign object residue in
31harvested cannabis.

32(c) The State Department of Public Health shall develop
33standards for the production and labeling of all edible medical
34cannabis products.

35(d) The Department of Food and Agriculture, in consultation
36with the Department of Fish and Wildlife and the State Water
37Resources Control Board, shall ensure that individual and
38cumulative effects of water diversion and discharge associated
39with cultivation do not affect the instream flows needed for fish
P31   1spawning, migration, and rearing, and the flows needed to maintain
2natural flow variability.

3(e) The Department of Food and Agriculture shall have the
4authority necessarybegin delete for the implementation ofend deletebegin insert to implementend insert the
5regulations it adopts pursuant to this chapter. The regulations shall
6do all of the following:

7(1) Provide that weighing or measuring devices used in
8connection with the sale or distribution of medical cannabis are
9required to meet standards equivalent to Division 5 (commencing
10 with Section 12001).

11(2) Require thatbegin insert medicalend insert cannabis cultivation by licensees is
12conducted in accordance with state and local laws related to land
13conversion, grading, electricity usage, water usage, agricultural
14discharges, and similar matters. Nothing in this chapter, and no
15regulation adopted by the department, shall be construed to
16supersede or limit the authority of the State Water Resources
17Control Board, regional water quality control boards, or the
18Department of Fish and Wildlife to implement and enforce their
19statutory obligations or to adopt regulations to protect water quality,
20water supply, and natural resources.

21(3) Establish procedures for the issuance and revocation of
22unique identifiers for activities associated with abegin insert medicalend insert cannabis
23cultivation license, pursuant to Article 8 (commencing with Section
2419337). Allbegin insert medicalend insert cannabis shall be labeled with the unique
25identifier issued by the Department of Food and Agriculture.

26(4) Prescribe standards, in consultation with the bureau, for the
27reporting of information as necessary related to unique identifiers,
28pursuant to Article 8 (commencing with Section 19337).

29(f) The Department of Pesticide Regulation, in consultation with
30the State Water Resources Control Board, shall promulgate
31regulations that require that the application of pesticides or other
32pest control in connection with the indoor or outdoor cultivation
33of medical cannabis meets standards equivalent to Division 6
34(commencing with Section 11401) of the Food and Agricultural
35Code and its implementing regulations.

36(g) State cultivator license types issued by the Department of
37Food and Agriculture include:

38(1) Type 1, or “specialty outdoor,” for outdoor cultivation using
39no artificial lighting of less than or equal to 5,000 square feet of
P32   1total canopy size on one premises, or up to 50 mature plants on
2noncontiguous plots.

3(2) Type 1A, or “specialty indoor,” for indoor cultivation using
4exclusively artificial lighting of less than or equal to 5,000 square
5feet of total canopy size on one premises.

6(3) Type 1B, or “specialty mixed-light,” for cultivation using a
7combination of natural and supplemental artificial lighting at a
8maximum threshold to be determined by the licensing authority,
9of less than or equal to 5,000 square feet of total canopy size on
10one premises.

11(4) Type 2, or “small outdoor,” for outdoor cultivation using
12no artificial lighting between 5,001 and 10,000 square feet,
13inclusive, of total canopy size on one premises.

14(5) Type 2A, or “small indoor,” for indoor cultivation using
15exclusively artificial lighting between 5,001 and 10,000 square
16feet, inclusive, of total canopy size on one premises.

17(6) Type 2B, or “small mixed-light,” for cultivation using a
18combination of natural and supplemental artificial lighting at a
19maximum threshold to be determined by the licensing authority,
20between 5,001 and 10,000 square feet, inclusive, of total canopy
21size on one premises.

22(7) Type 3, or “outdoor,” for outdoor cultivation using no
23artificial lighting from 10,001 square feet to one acre, inclusive,
24of total canopy size on one premises. The Department of Food and
25Agriculture shall limit the number of licenses allowed of this type.

26(8) Type 3A, or “indoor,” for indoor cultivation using
27exclusively artificial lighting between 10,001 and 22,000 square
28feet, inclusive, of total canopy size on one premises. The
29Department of Food and Agriculture shall limit the number of
30licenses allowed of this type.

31(9) Type 3B, or “mixed-light,” for cultivation using a
32combination of natural and supplemental artificial lighting at a
33maximum threshold to be determined by the licensing authority,
34between 10,001 and 22,000 square feet, inclusive, of total canopy
35size on one premises. The Department of Food and Agriculture
36shall limit the number of licenses allowed of this type.

37(10) Type 4, or “nursery,” for cultivation of medical cannabis
38solely as a nursery.begin insert Aend insert Type 4begin delete licenseesend deletebegin insert licenseeend insert may transport live
39begin delete plants.end deletebegin insert immature plants, subject to the tracking, security, and
40related requirements in accordance with Article 7 (commencing
P33   1with Section 19334), Article 7.5 (commencing with Section 19335),
2and Article 8 (commencing with Section 19337).end insert

3begin insert

begin insertSEC. 21.end insert  

end insert

begin insertSection 19332.5 of the end insertbegin insertBusiness and Professions Codeend insert
4begin insert is amended to read:end insert

5

19332.5.  

(a) Not later than January 1, 2020, the Department
6of Food and Agriculture in conjunction with the bureau, shall make
7available a certified organic designation and organic certification
8program for medicalbegin delete marijuana,end deletebegin insert cannabis,end insert if permitted under
9federal law and the National Organic Program (Section 6517 of
10the federal Organic Foods Production Act of 1990 (7 U.S.C. Sec.
116501 et seq.)), and Article 7 (commencing with Section 110810)
12of Chapter 5 of Part 5 of Division 104 of the Health and Safety
13Code.

14(b) The bureau may establish appellations of origin forbegin delete marijuanaend delete
15begin insert medical cannabisend insert grown in California.

16(c) It is unlawful for medicalbegin delete marijuanaend deletebegin insert cannabisend insert to be marketed,
17labeled, or sold as grown in a California county when the medical
18begin delete marijuanaend deletebegin insert cannabisend insert was not grown in that county.

19(d) It is unlawful to use the name of a California county in the
20labeling, marketing, or packaging of medicalbegin delete marijuanaend deletebegin insert cannabisend insert
21 products unless the product was grown in that county.

22

begin deleteSEC. 11.end delete
23begin insertSEC. 22.end insert  

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

25

19334.  

(a) State licenses to be issued by the Department of
26Consumer Affairs are as follows:

27(1) (A) “Dispensary,” as defined in this chapter.begin delete This license
28shall allow for delivery pursuant to Section 19340.end delete

begin delete

29(B) “Virtual Dispensary” for a license to permit the retail sale
30of medical marijuana and medical marijuana products without the
31requirement of operating a storefront. All virtual dispensaries shall
32maintain a commercial facility at which all licensed activities are
33performed under the license, with the exception of direct delivery
34to a qualified patient or primary caregiver. Virtual dispensaries
35 shall be subject to all of the provisions of this chapter that relate
36to dispensaries unless specifically excluded.

end delete
begin insert

37(B) A dispensary may be one of the following:

end insert
begin insert

38(i) “Storefront dispensary” for licensees who have a dispensary
39with direct physical access for the public.

end insert
begin insert

P34   1(ii) “Nonstorefront dispensary” for licensees who have a
2dispensary that does not have a storefront with direct physical
3access for the public.

end insert
begin insert

4(iii) “Special dispensary” for licensees who have no more than
5three dispensary facilities.

end insert
begin insert

6(C) Any of the dispensaries listed in subparagraph (B) may
7deliver in a city, county, or city and county that does not expressly
8prohibit delivery by local ordinance.

end insert

9(2) “Distributor,”begin insert or “Type 11 licensee,end insertbegin insertend insert for the distribution of
10medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert
11 products from manufacturer to dispensary. Abegin delete Type 11 licenseeend delete
12begin insert distributorend insert shall hold a Type 12, or transporter, license and register
13each location where product is stored for the purposes of
14distribution. Abegin delete Type 11 licenseeend deletebegin insert distributorend insert shall not hold a license
15in a cultivation, manufacturing, dispensing, or testing license
16category and shall not own, or have an ownership interest in, a
17facility licensed in those categories other than a security interest,
18lien, or encumbrance on property that is used by a licensee. Abegin delete Type
1911 licenseeend delete
begin insert distributorend insert shall be bonded and insured at a minimum
20level established by the licensing authority.

21(3) begin delete“Transport,”end deletebegin insert “Transporter” or “Type 12 licensee”end insert for
22transporters of medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend delete
23begin insert cannabisend insert products between licensees. Abegin delete Type 12 licenseeend delete
24begin insert transporterend insert shall be bonded and insured at a minimum level
25established by the licensing authority.

begin delete

26(4) “Special dispensary status” for dispensers who have no more
27than three licensed dispensary facilities. This license shall allow
28for delivery where expressly authorized by local ordinance.

end delete

29(b) The bureau shall establishbegin delete minimumend deletebegin insert both of the following:end insert

30begin insert(1)end insertbegin insertend insertbegin insertMinimumend insert security requirements for the commercial
31transportation and delivery of medicalbegin delete marijuanaend deletebegin insert cannabisend insert and
32medicalbegin delete marijuanaend deletebegin insert cannabisend insert products.

begin insert

33(2) Advertising, marketing, signage, and other labeling
34requirements and restrictions, including a prohibition on
35advertising, marketing, and other promotion of the medical
36 cannabis or medical cannabis products provided by a person not
37in full compliance with this chapter.

end insert

38(c) Abegin delete licensedend delete dispensary shall implement sufficient security
39measures to both deter and prevent unauthorized entrance into
40areas containing medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend delete
P35   1begin insert cannabisend insert products and theft of medicalbegin delete marijuanaend deletebegin insert cannabisend insert or
2medicalbegin delete marijuanaend deletebegin insert cannabisend insert products at the dispensary. These
3security measures shall include, but not be limited to, all of the
4following:

5(1) Preventing individuals from remaining on the premises of
6the dispensary if they are not engaging in activity expressly related
7to the operations of the dispensary.

8(2) Establishing limited access areas accessible only to
9authorized dispensary personnel.

10(3) Storing all finished medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medical
11begin delete marijuanaend deletebegin insert cannabisend insert products in a secured and locked room, safe,
12or vault, and in a manner as to prevent diversion, theft, and loss,
13except for limited amounts ofbegin delete marijuanaend deletebegin insert cannabisend insert used for display
14purposes, samples, or immediate sale.

15(4) Requiring all medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medical
16begin delete marijuanaend deletebegin insert cannabisend insert products used for display purposes, samples,
17or immediate sale to be stored out of reach of any individual who
18is not employed by the dispensary.

19(d) A dispensary shall notify the licensing authority and the
20appropriate law enforcement authorities within 24 hours after
21discovering any of the following:

22(1) Significant discrepancies identified during inventory. The
23level of significance shall be determined by the bureau.

24(2) Diversion, theft, loss, or any criminal activity involving the
25dispensary or any agent or employee of the dispensary.

26(3) The loss or unauthorized alteration of records related to
27begin delete marijuana,end deletebegin insert cannabis,end insert registered qualifying patients, primary
28caregivers, or dispensary employees or agents.

29(4) Any other breach of security.

30begin insert

begin insertSEC. 23.end insert  

end insert

begin insertSection 19335 of the end insertbegin insertBusiness and Professions Codeend insert
31begin insert is amended to read:end insert

32

19335.  

(a) The Department of Food and Agriculture, in
33consultation with the bureau, shall establish a track and trace
34program for reporting the movement of medicalbegin delete marijuanaend deletebegin insert cannabisend insert
35 items throughout the distribution chain that utilizes a unique
36identifier pursuant to Section 11362.777 of the Health and Safety
37Code and secure packaging and is capable of providing information
38that captures, at a minimum, all of the following:

39(1) The licensee receiving the product.

40(2) The transaction date.

P36   1(3) The cultivator from which the product originates, including
2the associated unique identifier, pursuant to Section 11362.777 of
3the Health and Safety Code.

4(b) (1) The Department of Food and Agriculture shall create
5an electronic database containing the electronic shippingbegin delete manifestsend delete
6begin insert manifests,end insert which shall include, but not be limited to, the following
7information:

8(A) The quantity, or weight, and variety of products shipped.

9(B) The estimated times of departure and arrival.

10(C) The quantity, or weight, and variety of products received.

11(D) The actual time of departure and arrival.

12(E) A categorization of the product.

13(F) The license number and the unique identifier pursuant to
14Section 11362.777 of the Health and Safety Code issued by the
15licensing authority for all licensees involved in the shipping
16process, including cultivators, transporters, distributors, and
17dispensaries.

18(2) (A) The database shall be designed to flag irregularities for
19all licensing authorities in this chapter to investigate.begin delete Allend delete
20begin insert Notwithstanding Section 30, allend insert licensing authorities pursuant to
21this chapter may access the database and share information related
22to licensees under this chapter, including social security and
23individual taxpayerbegin delete identifications notwithstanding Section 30.end delete
24begin insert identifications.end insert

25(B) The Department of Food and Agriculture shall immediately
26inform the bureau upon the finding of an irregularity or suspicious
27finding related to a licensee, applicant, or commercial cannabis
28activity for investigatory purposes.

29(3) Licensing authorities and state and local agencies may, at
30any time, inspect shipments and request documentation for current
31inventory.

32(4) The bureau shall have 24-hour access to the electronic
33database administered by the Department of Food and Agriculture.

34(5) The Department of Food and Agriculture shall be authorized
35to enter into memoranda of understandings with licensing
36authorities for data sharing purposes, as deemed necessary by the
37Department of Food and Agriculture.

38(6) Information received and contained in records kept by the
39Department of Food and Agriculture or licensing authorities for
40the purposes of administering this section are confidential and
P37   1shall not be disclosed pursuant to the California Public Records
2Act (Chapter 3.5 (commencing with Section 6250) of Division 7
3of Title 1 of the Government Code), except as necessary for
4authorized employees of the State of California or any city, county,
5or city and county to perform official duties pursuant to this chapter
6or a local ordinance.

7(7) Upon the request of a state or local law enforcement agency,
8licensing authorities shall allow access to or provide information
9contained within the database to assist law enforcement in their
10duties and responsibilities pursuant to this chapter.

11

begin deleteSEC. 12.end delete
12begin insertSEC. 24.end insert  

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

14

19340.  

(a) Deliveries, as defined in this chapter, can only be
15made by a dispensary and in a city, county, or city and county that
16does not explicitly prohibit it by local ordinance.

17(b) Upon approval of the licensing authority, a licensed
18dispensary that delivers medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medical
19begin delete marijuanaend deletebegin insert cannabisend insert products shall comply with both of the
20following:

21(1) The city, county, or city and county in which the licensed
22dispensary is located, and in which each delivery is made, dobegin delete notend delete
23begin insert not, by ordinance,end insert explicitlybegin delete by ordinanceend delete prohibit delivery.

24(2) All employees of a dispensary delivering medicalbegin delete marijuanaend delete
25begin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products shall carry a
26copy of the dispensary’s current license authorizing those services
27with them during deliveries and the employee’s government-issued
28identification, and shall present that license and identification upon
29request to state and local law enforcement, employees of regulatory
30authorities, and other state and local agencies enforcing this
31chapter.

32(c) A county shall have the authority to impose a tax, pursuant
33to Article 11 (commencing with Section 19348), on each delivery
34transaction completed by a licensee.

35(d) During delivery, the licensee shall maintain a physical copy
36of the delivery request and shall make it available upon request of
37the licensing authority and law enforcement officers. The delivery
38request documentation shall comply with state and federal law
39regarding the protection of confidential medical information.

P38   1(e) The qualified patient or primary caregiver requesting the
2delivery shall maintain a copy of the delivery request and shall
3make it available, upon request, to the licensing authority and law
4enforcement officers.

5(f) A local jurisdiction shall not prevent carriage of medical
6begin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products on
7public roads by a licensee acting in compliance with this chapter.

8(g) The bureau shall establish the following regulations
9regarding the delivery of medicalbegin delete marijuanaend deletebegin insert cannabisend insert and medical
10begin delete marijuanaend deletebegin insert cannabisend insert products:

11(1) Employee training standards that ensure qualified patients
12and primary caregivers have adequate information regarding the
13medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert
14 products that a dispensary delivers, and to provide employees with
15information regarding state and federal laws and regulations.

16(2) Protocols to provide qualified patients and primary caregivers
17with information regarding laws, regulations, and policies relevant
18to providing medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend delete
19begin insert cannabisend insert products to qualified patients and primary caregivers in
20the local jurisdiction in which the dispensary is located and the
21area in which the medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend delete
22begin insert cannabisend insert products are being delivered.

23(3) A system for registering and maintaining the status of all
24delivery personnel of dispensaries, including protocols for
25suspending the registrations of individuals who move out of this
26state, who discontinue employment at a dispensary, or who are
27under suspension or inspection by a dispensary or local or state
28law enforcement. This system shall be made available to local and
29state law enforcement, qualified patients, primary caregivers, and
30any other entity deemed appropriate by the bureau. Any fees
31associated with registration of delivery personnel shall be set by
32the bureau and shall not exceed the reasonable amount necessary
33 to cover the costs to regulate the delivery personnel and maintain
34the system.

35(4) The operating hours for delivery.

36(5) A requirement that each dispensary employee who delivers
37medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert
38 products contract with only one dispensary at time.

39(6) Minimum requirements for patient information that is stored
40by each delivery operation, including, but not limited to, the contact
P39   1information for the patient and, if applicable, his or her primary
2caregiver, the physician’s recommendation, and the condition for
3which the medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend delete
4begin insert cannabisend insert product is being recommended. All identifying
5information obtained about a qualified patient or primary caregiver
6shall be obtained and stored in compliance withbegin delete the privacy and
7security rules of the Health Insurance Portability and
8Accountability Act (HIPAA).end delete
begin insert the Confidentiality of Medical
9Information Act (Part 2.6 (commencing with Section 56) of Division
101 of the Civil Code) and all other privacy laws and regulations.end insert

11(h) The bureau shall establish requirements for all dispensary
12employees who deliver medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medical
13begin delete marijuanaend deletebegin insert cannabisend insert products, including, but not limited to, the
14following:

15(1) Possession of a valid driver’s license issued by the
16Department of Motor Vehicles.

17(2) Provide the bureau with a current address.

18(3) Provide the bureau with necessary automobile and insurance
19information.

20(4) Registration with the bureau.

21

begin deleteSEC. 13.end delete
22begin insertSEC. 25.end insert  

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

24

19342.  

(a) For the purposes of testing medicalbegin delete marijuanaend delete
25begin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert products, licensees shall
26use a licensed testing laboratory that has adopted a standard
27operating procedure using methods consistent with general
28requirements for the competence of testing and calibration
29activities, including sampling, using standard methods established
30by the International Organization for Standardization, specifically
31ISO/IEC 17020 and ISO/IEC 17025 to test medicalbegin delete marijuanaend delete
32begin insert cannabisend insert and medicalbegin delete marijuanaend deletebegin insert cannabisend insert products that are
33approved by an accrediting body that is a signatory to the
34International Laboratory Accreditation Cooperation Mutual
35Recognition Arrangement.

36(b) An agent of abegin delete licensedend delete testing laboratory shall obtain samples
37according to a statistically valid sampling method for each lot.

38(c) Abegin delete licensedend delete testing laboratory shall analyze samples according
39to the following:

P40   1(1) In the final form which the patient will consume the medical
2begin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend deletebegin insert cannabisend insert product,
3including moisture content and other attributes.

4(2) A scientifically valid methodology approved by the
5accrediting body.

6(d) If a test result falls outside the specifications authorized by
7law or regulation, thebegin delete licensedend delete testing laboratory shall follow a
8standard operating procedure to confirm or refute the original
9result.

10(e) Abegin delete licensedend delete testing laboratory shall destroy the remains of
11the sample of medicalbegin delete marijuanaend deletebegin insert cannabisend insert or medicalbegin delete marijuanaend delete
12begin insert cannabisend insert product upon completion of the analysis.

13

begin deleteSEC. 14.end delete
14begin insertSEC. 26.end insert  

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

16

19344.  

(a) Abegin delete licensedend delete testing laboratory shall issue a certificate
17of analysis for each lot, with supporting data, to report both of the
18following:

19(1) Whether the chemical profile of the lot conforms to the
20specifications of the lot for compounds, including, but not limited
21to, all of the following:

22(A) Tetrahydrocannabinol (THC).

23(B) Tetrahydrocannabinolic Acid (THCA).

24(C) Cannabidiol (CBD).

25(D) Cannabidiolic Acid (CBDA).

26(E) The terpenes described in the most current version of the
27cannabis inflorescence monograph published by the American
28Herbal Pharmacopoeia.

29(F) Cannabigerol (CBG).

30(G) Cannabinol (CBN).

31(H) Any other compounds required by the State Department of
32Public Health.

33(2) That the presence of contaminants does not exceed the levels
34that are the lesser of either the most current version of the American
35 Herbal Pharmacopoeia monograph or the State Department of
36Public Health. For purposes of this paragraph, contaminants
37includes, but is not limited to, all of the following:

38(A) Residual solvent or processing chemicals.

39(B) Foreign material, including, but not limited to, hair, insects,
40or similar or related adulterant.

P41   1(C) Microbiological impurity, including total aerobic microbial
2 count, total yeast mold count, P. aeruginosa, aspergillus spp., s.
3aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A.

4(D) Whether the batch is within specification for odor and
5appearance.

6(b) Residual levels of volatile organic compounds shall be below
7those set by the State Department of Public Health.

8begin insert

begin insertSEC. 27.end insert  

end insert

begin insertSection 19347 of the end insertbegin insertBusiness and Professions Codeend insert
9begin insert is amended to read:end insert

10

19347.  

(a) Prior to delivery or sale at a dispensary, medical
11cannabis products shall be labeled and in a tamper-evident package.
12Labels and packages of medical cannabis products shall meet the
13following requirements:

14(1) Medical cannabis packages and labels shall not be made to
15be attractive to children.

16(2) All medical cannabis product labels shall include the
17following information, prominently displayed and in a clear and
18legible font:

19(A) Manufacture date and source.

20(B) The statement “SCHEDULE I CONTROLLED
21SUBSTANCE.”

22(C) The statement “KEEP OUT OF REACH OF CHILDREN
23AND ANIMALS” in bold print.

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

25(E) The statement “THE INTOXICATING EFFECTS OF THIS
26PRODUCT MAY BE DELAYED BY UP TO TWO HOURS.”

27(F) The statement “THIS PRODUCT MAY IMPAIR THE
28ABILITY TO DRIVE OR OPERATE MACHINERY. PLEASE
29USE EXTREME CAUTION.”

30(G) For packages containing only dried flower, the net weight
31of medical cannabis in the package.

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

33(I) List of pharmacologically active ingredients, including, but
34not limited to, tetrahydrocannabinol (THC), cannabidiol (CBD),
35and other cannabinoid content, the THC and other cannabinoid
36amount in milligrams per serving, servings per package, and the
37THC and other cannabinoid amount in milligrams for the package
38total.

39(J) Clear indication, in bold type, that the product contains
40medical cannabis.

P42   1(K) Identification of the source and date of cultivation and
2manufacture.

3(L) Any other requirement set by thebegin delete bureau.end deletebegin insert State Department
4of Public Health.end insert

5(M) Information associated with the unique identifier issued by
6the Department of Food and Agriculture pursuant to Section
711362.777 of the Health and Safety Code.

8(b) Only generic food names may be used to describe edible
9medical cannabisbegin delete products.end deletebegin insert products, pursuant to regulations
10promulgated by the State Department of Public Health.end insert

11

begin deleteSEC. 15.end delete
12begin insertSEC. 28.end insert  

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

14

19350.  

Each licensing authority shall establish a scale of
15application, licensing, and renewal fees, based upon the cost of
16enforcing this chapter, as follows:

17(a) Each licensing authority shall charge each licensee a
18licensure and renewal fee, as applicable. The licensure and renewal
19fee shall be calculated to cover the costs of administering this
20chapter. The licensure fee may vary depending upon the varying
21costs associated with administering the various regulatory
22requirements of this chapter as they relate to the nature and scope
23of the different licensure activities, including, but not limited to,
24the track and trace program required pursuant to Section 19335,
25but shall not exceed the reasonable regulatory costs to the licensing
26authority.

27(b) The total fees assessed pursuant to this chapter shall be set
28at an amount that will fairly and proportionately generate sufficient
29total revenue to fully cover the total costs of administering this
30chapter.

31(c) All state license fees shall be set on a scaled basis by the
32licensing authority, dependent on the size of the business.

33(d) The licensing authority shall deposit all fees collected
34pursuant to this chapter in a fee account specific to that licensing
35authority, to be established in the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert
36 Regulation and Safety Act Fund. Moneys in the licensing authority
37fee accounts shall be used, upon appropriation of the Legislature,
38by the designated licensing authority for the administration of this
39chapter.

P43   1(e) The fees established by licensing authorities pursuant to this
2chapter shall be in addition to, and shall not limit, any fees or taxes
3imposed by a city, county, or city and county in which the licensee
4operates.

5begin insert

begin insertSEC. 29.end insert  

end insert

begin insertSection 19351 of the end insertbegin insertBusiness and Professions Codeend insert
6begin insert is amended to read:end insert

7

19351.  

(a) The Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and
8Safety Act Fund is hereby established within the State Treasury.
9Moneys in the fund shall be available upon appropriation by the
10Legislature. Notwithstanding Section 16305.7 of the Government
11Code, the fund shall include any interest and dividends earned on
12the moneys in the fund.

13(b) (1) Funds for the establishment and support of the regulatory
14activities pursuant to this chapter shall be advanced as a General
15Fund or special fund loan, and shall be repaid by the initial
16proceeds from fees collected pursuant to this chapter or any rule
17or regulation adopted pursuant to this chapter, by January 1, 2022.
18Should the initial proceeds from fees not be sufficient to repay the
19loan, moneys from the Medical Cannabis Fines and Penalties
20Account shall be made available to the bureau, by appropriation
21of the Legislature, to repay the loan.

22(2) Funds advanced pursuant to this subdivision shall be
23appropriated to the bureau, which shall distribute the moneys to
24the appropriate licensing authorities, as necessary to implement
25the provisions of this chapter.

26(3) The Director of Finance may provide an initial operating
27loan from the General Fund to the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert
28 Regulation and Safety Act Fund that does not exceed ten million
29dollars ($10,000,000).

30(c) Except as otherwise provided, all moneys collected pursuant
31to this chapter as a result of fines or penalties imposed under this
32chapter shall be deposited directly into the Medicalbegin delete Marijuanaend delete
33begin insert Cannabisend insert Fines and Penalties Account, which is hereby established
34within the fund, and shall be available, upon appropriation by the
35Legislature to the bureau, for the purposes of funding the
36enforcement grant program pursuant to subdivision (d).

37(d) (1) The bureau shall establish a grant program to allocate
38moneys from the Medical Cannabis Fines and Penalties Account
39to state and local entities for the following purposes:

P44   1(A) To assist with medical cannabis regulation and the
2enforcement of this chapter and other state and local laws
3applicable to cannabis activities.

4(B) For allocation to state and local agencies and law
5enforcement to remedy the environmental impacts of cannabis
6cultivation.

7(2) The costs of the grant program under this subdivision shall,
8upon appropriation by the Legislature, be paid for with moneys in
9the Medical Cannabis Fines and Penalties Account.

10(3) The grant program established by this subdivision shall only
11be implemented after the loan specified inbegin delete this sectionend deletebegin insert subdivision
12(b)end insert
is repaid.

13begin insert

begin insertSEC. 30.end insert  

end insert

begin insertSection 19360 of the end insertbegin insertBusiness and Professions Codeend insert
14begin insert is amended to read:end insert

15

19360.  

(a) A person engaging inbegin insert commercialend insert cannabis activity
16without a license and associated unique identifiers required by this
17chapter shall be subject to civil penalties of up to twice the amount
18of the license fee for each violation, and thebegin delete department,end deletebegin insert licensing
19authority,end insert
state or local authority, or court may order the destruction
20of medical cannabis associated with that violation. Each day of
21operation shall constitute a separate violation of this section. All
22civil penalties imposed and collected pursuant to this section shall
23 be deposited into thebegin delete Marijuana Production and Environment
24Mitigation Fund established pursuant to Section 31013 of the
25Revenue and Taxation Code.end delete
begin insert Medical Cannabis Fines and
26Penalties Account, established pursuant to Section 19351.end insert

27(b) If an action for civil penalties is brought against a licensee
28pursuant to this chapter by the Attorney General, the penalty
29collected shall be deposited into thebegin delete General Fund.end deletebegin insert Medical
30Cannabis Fines and Penalties Account.end insert
If the action is brought by
31a district attorney or county counsel, the penalty collected shall be
32paid to the treasurer of the county in which the judgment was
33entered. If the action is brought by a city attorney or city
34prosecutor, the penalty collected shall be paid to the treasurer of
35the city or city and county in which the judgment was entered. If
36the action is brought by a city attorney and is adjudicated in a
37superior court located in the unincorporated area or another city
38in the same county, the penalty shall be paid one-half to the
39treasurer of the city in which the complaining attorney has
P45   1jurisdiction and one-half to the treasurer of the county in which
2the judgment is entered.

3(c) Notwithstanding subdivision (a), criminal penalties shall
4continue to apply to an unlicensed person or entity engaging in
5begin insert commercialend insert cannabis activity in violation of this chapter, including,
6but not limited to, those individuals covered under Section 11362.7
7of the Health and Safety Code.

8

begin deleteSEC. 16.end delete
9begin insertSEC. 31.end insert  

Section 12025 of the Fish and Game Code is amended
10to read:

11

12025.  

(a) In addition to any penalties imposed by any other
12law, a person found to have violated the code sections described
13in paragraphs (1) to (11), inclusive, in connection with the
14production or cultivation of a controlled substance on land under
15the management of the Department of Parks and Recreation, the
16Department of Fish and Wildlife, the Department of Forestry and
17Fire Protection, the State Lands Commission, a regional park
18district, the United States Forest Service, or the United States
19Bureau of Land Management, or within the respective ownership
20of a timberland production zone, as defined in Chapter 6.7
21(commencing with Section 51100) of Part 1 of Division 1 of Title
225 of the Government Code, of more than 50,000 acres, or while
23trespassing on other public or private land in connection with the
24production or cultivation of a controlled substance, shall be liable
25for a civil penalty as follows:

26(1) A person who violates Section 1602 in connection with the
27production or cultivation of a controlled substance is subject to a
28civil penalty of not more than ten thousand dollars ($10,000) for
29each violation.

30(2) A person who violates Section 5650 in connection with the
31production or cultivation of a controlled substance is subject to a
32civil penalty of not more than forty thousand dollars ($40,000) for
33each violation.

34(3) A person who violates Section 5652 in connection with the
35production or cultivation of a controlled substance is subject to a
36civil penalty of not more than forty thousand dollars ($40,000) for
37each violation.

38(4) A person who violates subdivision (a) of Section 374.3 of
39the Penal Code in connection with the production or cultivation
P46   1of a controlled substance is subject to a civil penalty of not more
2than forty thousand dollars ($40,000) for each violation.

3(5) A person who violates paragraph (1) of subdivision (h) of
4Section 374.3 of the Penal Code in connection with the production
5or cultivation of a controlled substance is subject to a civil penalty
6of not more than forty thousand dollars ($40,000) for each
7violation.

8(6) A person who violates subdivision (b) of Section 374.8 of
9the Penal Code in connection with the production or cultivation
10of a controlled substance is subject to a civil penalty of not more
11than forty thousand dollars ($40,000) for each violation.

12(7) A person who violates Section 384a of the Penal Code in
13connection with the production or cultivation of a controlled
14substance is subject to a civil penalty of not more than ten thousand
15dollars ($10,000) for each violation.

16(8) A person who violates subdivision (a) of Section 4571 of
17the Public Resources Code in connection with the production or
18cultivation of a controlled substance is subject to a civil penalty
19of not more than ten thousand dollars ($10,000) for each violation.

20(9) A person who violates Section 4581 of the Public Resources
21Code in connection with the production or cultivation of a
22controlled substance is subject to a civil penalty of not more than
23ten thousand dollars ($10,000) for each violation.

24(10) A person who violates Section 2000 in connection with
25the production or cultivation of a controlled substance is subject
26to a civil penalty of not more than ten thousand dollars ($10,000)
27for each violation.

28(11) A person who violates Section 2002 in connection with
29the production or cultivation of a controlled substance is subject
30to a civil penalty of not more than ten thousand dollars ($10,000)
31for each violation.

32(b) (1) In addition to any penalties imposed by any other law,
33a person found to have violated the code sections described in this
34subdivision in connection with the production or cultivation of a
35controlled substance on land that the person owns, leases, or
36otherwise uses or occupies with the consent of the landowner shall
37be liable for a civil penalty as follows:

38(A) A person who violates Section 1602 in connection with the
39production or cultivation of a controlled substance is subject to a
P47   1civil penalty of not more than eight thousand dollars ($8,000) for
2each violation.

3(B) A person who violates Section 5650 in connection with the
4production or cultivation of a controlled substance is subject to a
5civil penalty of not more than twenty thousand dollars ($20,000)
6for each violation.

7(C) A person who violates Section 5652 in connection with the
8production or cultivation of a controlled substance is subject to a
9civil penalty of not more than twenty thousand dollars ($20,000)
10for each violation.

11(D) A person who violates subdivision (a) of Section 374.3 of
12the Penal Code in connection with the production or cultivation
13of a controlled substance is subject to a civil penalty of not more
14than twenty thousand dollars ($20,000) for each violation.

15(E) A person who violates paragraph (1) of subdivision (h) of
16Section 374.3 of the Penal Code in connection with the production
17or cultivation of a controlled substance is subject to a civil penalty
18of not more than twenty thousand dollars ($20,000) for each
19violation.

20(F) A person who violates subdivision (b) of Section 374.8 of
21the Penal Code in connection with the production or cultivation
22of a controlled substance is subject to a civil penalty of not more
23than twenty thousand dollars ($20,000) for each violation.

24(G) A person who violates Section 384a of the Penal Code in
25connection with the production or cultivation of a controlled
26substance is subject to a civil penalty of not more than ten thousand
27dollars ($10,000) for each violation.

28(H) A person who violates subdivision (a) of Section 4571 of
29the Public Resources Code in connection with the production or
30cultivation of a controlled substance is subject to a civil penalty
31of not more than eight thousand dollars ($8,000) for each violation.

32(I) A person who violates Section 4581 of the Public Resources
33Code in connection with the production or cultivation of a
34controlled substance is subject to a civil penalty of not more than
35eight thousand dollars ($8,000) for each violation.

36(J) A person who violates Section 2000 in connection with the
37production or cultivation of a controlled substance is subject to a
38civil penalty of not more than eight thousand dollars ($8,000) for
39each violation.

P48   1(K) A person who violates Section 2002 in connection with the
2production or cultivation of a controlled substance is subject to a
3civil penalty of not more than eight thousand dollars ($8,000) for
4each violation.

5(2) Each day that a violation of a code section described in this
6subdivision occurs or continues to occur shall constitute a separate
7violation.

8(c) The civil penalty imposed for each separate violation
9pursuant to this section is in addition to any other civil penalty
10imposed for another violation of this section, or any violation of
11any other law.

12(d) All civil penalties imposed or collected by a court for a
13separate violation pursuant to this section shall not be considered
14to be fines or forfeitures, as described in Section 13003, and shall
15be apportioned in the following manner:

16(1) Thirty percent shall be distributed to the county in which
17the violation was committed pursuant to Section 13003. The county
18board of supervisors shall first use any revenues from those
19penalties to reimburse the costs incurred by the district attorney
20or city attorney in investigating and prosecuting the violation.

21(2) (A) Thirty percent shall be distributed to the investigating
22agency to be used to reimburse the cost of any investigation directly
23related to the violations described in this section.

24(B) If the department receives reimbursement pursuant to this
25paragraph for activities funded pursuant to subdivision (f) of
26Section 4629.6 of the Public Resources Code, the reimbursement
27funds shall be deposited into the Timber Regulation and Forest
28Restoration Fund, created by Section 4629.3 of the Public
29Resources Code, if there is an unpaid balance for a loan authorized
30by subdivision (f) of Section 4629.6 of the Public Resources Code.

31(3) Forty percent shall be deposited into the Timber Regulation
32and Forest Restoration Fund, created by Section 4629.3 of the
33Public Resources Code, and used for grants authorized pursuant
34to Section 4629.6 of the Public Resources Code that improve forest
35health by remediating formerbegin delete marijuanaend deletebegin insert cannabisend insert growing
36operations.

37(e) Civil penalties authorized pursuant to this section may be
38imposed administratively by the department if all of the following
39occur:

P49   1(1) The chief deputy director or law enforcement division
2assistant chief in charge ofbegin delete marijuana-relatedend deletebegin insert cannabis-relatedend insert
3 enforcement issues a complaint to any person or entity on which
4an administrative civil penalty may be imposed pursuant to this
5section. The complaint shall allege the act or failure to act that
6constitutes a violation, any facts related to natural resources
7impacts, the provision of law authorizing the civil penalty to be
8imposed, and the proposed penalty amount.

9(2) The complaint and order is served by personal notice or
10certified mail and informs the party served that the party may
11request a hearing not later than 20 days from the date of service.
12If a hearing is requested, it shall be scheduled before the director
13or his or her designee, which designee shall not be the chief deputy
14or assistant chief issuing the complaint and order. A request for a
15hearing shall contain a brief statement of the material facts the
16party claims support his or her contention that no administrative
17penalty should be imposed or that an administrative penalty of a
18lesser amount is warranted. A party served with a complaint
19pursuant to this subdivision waives his or her right to a hearing if
20a hearing is not requested within 20 days of service of the
21complaint, in which case the order imposing the administrative
22penalty shall become final.

23(3) The director, or his or her designee, shall control the nature
24and order of hearing proceedings. Hearings shall be informal in
25nature, and need not be conducted according to the technical rules
26relating to evidence. The director or his or her designee shall issue
27a final order within 45 days of the close of the hearing. A copy of
28the final order shall be served by certified mail upon the party
29served with the complaint.

30(4) A party may obtain review of the final order by filing a
31petition for a writ of mandate with the superior court within 30
32days of the date of service of the final order. The administrative
33penalty shall be due and payable to the department within 60 days
34after the time to seek judicial review has expired, or, where the
35party did not request a hearing of the order, within 20 days after
36the order imposing an administrative penalty becomes final.

37(5) The department may adopt regulations to implement this
38subdivision.

39(f) All administrative penalties imposed or collected by the
40department for a separate violation pursuant to this section shall
P50   1not be considered to be fines or forfeitures, as described in Section
213003, and shall be deposited into the Timber Regulation and
3Forest Restoration Fund, created by Section 4629.3 of the Public
4Resources Code, to repay any unpaid balance of a loan authorized
5by subdivision (f) of Section 4629.6 of the Public Resources Code.
6Any remaining funds from administrative penalties collected
7pursuant to this section shall be apportioned in the following
8manner:

9(1) Fifty percent shall be deposited into the Timber Regulation
10and Forest Restoration Fund for grants authorized pursuant to
11subdivision (h) of Section 4629.6 of the Public Resources Code,
12with priority given to grants that improve forest health by
13remediating formerbegin delete marijuanaend deletebegin insert cannabisend insert growing operations.

14(2) Fifty percent shall be deposited into the Fish and Game
15Preservation Fund.

16(g) Any civil penalty imposed pursuant to this section for the
17violation of an offense described in paragraph (4), (5), or (6) of
18subdivision (a) or subparagraph (D), (E), or (F) of paragraph (1)
19of subdivision (b) for which the person was convicted shall be
20offset by the amount of any restitution ordered by a criminal court.

21(h) For purposes of this section, “controlled substance” has the
22same meaning as defined in Section 11007 of the Health and Safety
23Code.

24(i) This section does not apply to any activity inbegin insert fullend insert compliance
25with the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and Safety Act
26(Chapter 3.5 (commencing with Section 19300) of Division 8 of
27the Business and Professions Code).

28

begin deleteSEC. 17.end delete
29begin insertSEC. 32.end insert  

Section 12029 of the Fish and Game Code is amended
30to read:

31

12029.  

(a) The Legislature finds and declares all of the
32following:

33(1) The environmental impacts associated withbegin delete marijuanaend delete
34begin insert cannabisend insert cultivation have increased, and unlawful water diversions
35forbegin delete marijuanaend deletebegin insert cannabisend insert irrigation have a detrimental effect on fish
36and wildlife and their habitat, which are held in trust by the state
37for the benefit of the people of the state.

38(2) The remediation of existingbegin delete marijuanaend deletebegin insert cannabisend insert cultivation
39sites is often complex and the permitting of these sites requires
40greater department staff time and personnel expenditures. The
P51   1potential forbegin delete marijuanaend deletebegin insert cannabisend insert cultivation sites to significantly
2impact the state’s fish and wildlife resources requires immediate
3action on the part of the department’s lake and streambed alteration
4permitting staff.

5(b) In order to address unlawful water diversions and other
6violations of the Fish and Game Code associated withbegin delete marijuanaend delete
7begin insert cannabisend insert cultivation, the department shall establish the watershed
8enforcement program to facilitate the investigation, enforcement,
9and prosecution of these offenses.

10(c) The department, in coordination with the State Water
11Resources Control Board, shall establish a permanent multiagency
12task force to address the environmental impacts ofbegin delete marijuanaend delete
13begin insert cannabisend insert cultivation. The multiagency task force, to the extent
14feasible and subject to availablebegin delete Resources,end deletebegin insert resources,end insert shall expand
15its enforcement efforts on a statewide level to ensure the reduction
16of adverse impacts ofbegin delete marijuanaend deletebegin insert cannabisend insert cultivation on fish and
17wildlife and their habitats throughout the state.

18(d) In order to facilitate the remediation and permitting of
19begin delete marijuanaend deletebegin insert cannabisend insert cultivation sites, the department shall adopt
20regulations to enhance the fees on
21medical-cannabis-cultivation-related activities subject to Section
221602 forbegin delete marijuanaend deletebegin insert cannabisend insert cultivation sites that require
23remediation. The fee schedule established pursuant to this
24subdivision shall not exceed the fee limits in Section 1609.

25

begin deleteSEC. 18.end delete
26begin insertSEC. 33.end insert  

Section 11352 of the Health and Safety Code is
27amended to read:

28

11352.  

(a) Except as otherwise provided in this division, every
29person who transports, imports into this state, sells, furnishes,
30administers, or gives away, or offers to transport, import into this
31state, sell, furnish, administer, or give away, or attempts to import
32into this state or transport (1) any controlled substance specified
33in subdivision (b), (c), or (e), or paragraph (1) of subdivision (f)
34of Section 11054, specified in paragraph (14), (15), or (20) of
35subdivision (d) of Section 11054, or specified in subdivision (b)
36or (c) of Section 11055, or specified in subdivision (h) of Section
3711056, or (2) any controlled substance classified in Schedule III,
38IV, or V which is a narcotic drug, unless upon the written
39prescription of a physician, dentist, podiatrist, or veterinarian
40licensed to practice in this state, shall be punished by imprisonment
P52   1pursuant to subdivision (h) of Section 1170 of the Penal Code for
2three, four, or five years.

3(b) Notwithstanding the penalty provisions of subdivision (a),
4any person who transports a controlled substances specified in
5subdivision (a) within this state from one county to another
6noncontiguous county shall be punished by imprisonment pursuant
7to subdivision (h) of Section 1170 of the Penal Code for three, six,
8or nine years.

9(c) For purposes of this section, “transports” means to transport
10for sale.

11(d) This section does not preclude or limit the prosecution of
12an individual for aiding and abetting the commission of, or
13conspiring to commit, or acting as an accessory to, any act
14prohibited by this section.

15(e) This section does not apply to commercialbegin delete marijuanaend delete
16begin insert cannabisend insert activity engaged in by a person or entity licensed pursuant
17to the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and Safety Act
18(Chapter 3.5 (commencing with Section 19300) of Division 8 of
19the Business and Professionsbegin delete Code).end deletebegin insert Code) and who is in full
20compliance with that act and all applicable local ordinances.end insert

21

begin deleteSEC. 19.end delete
22begin insertSEC. 34.end insert  

Section 11362.765 of the Health and Safety Code is
23amended to read:

24

11362.765.  

(a) Subject to the requirements of this article, the
25individuals specified in subdivision (b) shall not be subject, on
26that sole basis, to criminal liability under Section 11357, 11358,
2711359, 11360, 11366, 11366.5, or 11570. However, nothing in
28this section shall authorize the individual to smoke or otherwise
29consumebegin delete marijuanaend deletebegin insert cannabisend insert unless otherwise authorized by this
30article, nor shall anything in this section authorize any individual
31or group to cultivate or distributebegin delete marijuanaend deletebegin insert cannabisend insert in any
32manner other than as set forth inbegin insert this article,end insert the Medicalbegin delete Marijuanaend delete
33begin insert Cannabisend insert Regulation and Safety Act (Chapter 3.5 (commencing
34with Section 19300) of Division 8 of the Business and Professions
35begin delete Code)end deletebegin insert Code),end insert or as described in the Compassionate Use Act of
361996.

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

38(1) A qualified patient or a person with an identification card
39who transports or processesbegin delete marijuanaend deletebegin insert cannabisend insert for his or her own
40personal medical use.

P53   1(2) A designated primary caregiver who transports, processes,
2administers, delivers, or gives awaybegin delete marijuanaend deletebegin insert cannabisend insert for medical
3purposes, in amounts not exceeding those established in subdivision
4(a) of Section 11362.77, only to the qualified patient of the primary
5caregiver, or to the person with an identification card who has
6designated the individual as a primary caregiver.

7(3) begin deleteAny end deletebegin insertAn end insertindividual who provides assistance to a qualified
8patient or a person with an identification card, or his or her
9designated primary caregiver, in administering medicalbegin delete marijuanaend delete
10begin insert cannabisend insert to the qualified patient or person or acquiring the skills
11necessary to cultivate or administerbegin delete marijuanaend deletebegin insert cannabisend insert for medical
12purposes to the qualified patient or person.

13(c) A primary caregiver who receives compensation for actual
14expenses, including reasonable compensation incurred for services
15provided to an eligible qualified patient or person with an
16identification card to enable that person to usebegin delete marijuanaend deletebegin insert cannabisend insert
17 under this article, or for payment for out-of-pocket expenses
18incurred in providing those services, or both, shall not, on the sole
19basis of that fact, be subject to prosecution or punishment under
20Section 11359 or 11360.

21

begin deleteSEC. 20.end delete
22begin insertSEC. 35.end insert  

Section 11362.775 of the Health and Safety Code is
23amended to read:

24

11362.775.  

(a) Subject to subdivision (b), qualified patients,
25persons with valid identification cards, and the designated primary
26caregivers of qualified patients and persons with identification
27cards, who associate within the State of California in order
28collectively or cooperatively to cultivatebegin delete marijuanaend deletebegin insert cannabisend insert for
29medical purposes, shall not solely on the basis of that fact be
30subject to state criminal sanctions under Section 11357, 11358,
3111359, 11360, 11366, 11366.5, or 11570. A collective or
32cooperative that operates pursuant to this section may operate for
33 profit, not for profit, or any combination thereof.

34(b) This section shall remain in effect only until one year after
35the Bureau of Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation posts a
36notice on its Internet Web site that the licensing authorities have
37commenced issuing licenses pursuant to the Medicalbegin delete Marijuanaend delete
38begin insert Cannabisend insert Regulation and Safety Act (Chapter 3.5 (commencing
39with Section 19300) of Division 8 of the Business and Professions
40Code), and is repealed upon that date.

P54   1begin insert

begin insertSEC. 36.end insert  

end insert

begin insertSection 11362.777 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
2amended to read:end insert

3

11362.777.  

(a) The Department of Food and Agriculture shall
4establish a Medical Cannabis Cultivation Program to be
5administered by the secretary and, except as specified in
6subdivision (c), shall administer this section as it pertains to the
7cultivation of medicalbegin delete marijuana.end deletebegin insert cannabis.end insert For purposes of this
8section and Chapter 3.5 (commencing with Section 19300) of
9Division 8 of the Business and Professions Code, medical cannabis
10is an agricultural product.

11(b) (1) A person or entity shall not cultivate medicalbegin delete marijuanaend delete
12begin insert cannabisend insert without first obtaining both of the following:

13(A) A license, permit, or other entitlement, specifically
14permitting cultivation pursuant to these provisions, from the city,
15county, or city and county in which the cultivation will occur.

16(B) A state license issued by the department pursuant to this
17section.

18(2) A person or entity shall not submit an application for a state
19licensebegin delete issued by the departmentend delete pursuant to this section unless
20that person or entity has received a license, permit, or other
21entitlement, specifically permitting cultivation pursuant to these
22provisions, from the city, county, or city and county in which the
23cultivation will occur.

24(3) A person or entity shall not submit an application for a state
25licensebegin delete issued by the departmentend delete pursuant to this section if the
26proposed cultivation ofbegin delete marijuanaend deletebegin insert cannabisend insert will violate the
27provisions ofbegin delete anyend deletebegin insert aend insert local ordinance or regulation, or if medical
28begin delete marijuanaend deletebegin insert cannabisend insert is prohibited by the city, county, or city and
29county in which the cultivation is proposed to occur, either
30expressly or otherwise under principles of permissive zoning.

31(c) (1) Except as otherwise specified in this subdivision, and
32without limiting any other local regulation, a city, county, or city
33and county, through its current or future land use regulations or
34ordinance, may issue or deny a permit to cultivate medical
35begin delete marijuanaend deletebegin insert cannabisend insert pursuant to this section. A city, county, or city
36and county may inspect the intended cultivation site for suitability
37before issuing a permit. After the city, county, or city and county
38has approved a permit, the applicant shall apply for a state medical
39begin delete marijuanaend deletebegin insert cannabisend insert cultivation license from the department. A
40locally issued cultivation permit shall only become active upon
P55   1licensing by the department and receiving final local approval. A
2person shall not cultivate medicalbegin delete marijuanaend deletebegin insert cannabisend insert before
3obtaining both abegin insert license orend insert permit from the city, county, or city
4and county and a state medicalbegin delete marijuanaend deletebegin insert cannabisend insert cultivation
5license from the department.

6(2) A city, county, or city and county that issues or denies
7conditional licenses to cultivate medicalbegin delete marijuanaend deletebegin insert cannabisend insert
8 pursuant to this section shall notify the department in a manner
9prescribed by the secretary.

10(3) A city, county, or city and county’s locally issued conditional
11permit requirements must be at least as stringent as the
12department’s state licensing requirements.

13(d) (1) The secretary may prescribe, adopt, and enforce
14regulations relating to the implementation, administration, and
15enforcement of thisbegin delete part,end deletebegin insert section,end insert including, but not limited to,
16applicant requirements, collections, reporting, refunds, and appeals.

17(2) The secretary may prescribe, adopt, and enforce any
18emergency regulations as necessary to implement thisbegin delete part. Anyend delete
19begin insert section. Anend insert emergency regulation prescribed, adopted, or enforced
20pursuant to this section shall be adopted in accordance with Chapter
213.5 (commencing with Section 11340) of Part 1 of Division 3 of
22Title 2 of the Government Code, and, for purposes of that chapter,
23including Section 11349.6 of the Government Code, the adoption
24of the regulation is an emergency and shall be considered by the
25Office of Administrative Law as necessary for the immediate
26preservation of the public peace, health and safety, and general
27welfare.

28(3) The secretary may enter into a cooperative agreement with
29a county agricultural commissioner to carry out the provisions of
30thisbegin delete chapter,end deletebegin insert section,end insert including, but not limited to, administration,
31investigations, inspections, licensing and assistance pertaining to
32the cultivation of medicalbegin delete marijuana.end deletebegin insert cannabis.end insert Compensation
33under the cooperative agreement shall be paid from assessments
34and fees collected and deposited pursuant to thisbegin delete chapterend deletebegin insert sectionend insert
35 and shall provide reimbursement to the county agricultural
36commissioner for associated costs.

37(e) (1) The department, in consultation with, but not limited
38to, the Bureau of Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation, the
39State Water Resources Control Board, and the Department of Fish
40and Wildlife, shall implement a unique identification program for
P56   1medicalbegin delete marijuana.end deletebegin insert cannabis.end insert In implementing the program, the
2department shall consider issues, including, but not limited to,
3water use and environmental impacts. In implementing the
4 program, the department shall ensure that:

5(A) Individual and cumulative effects of water diversion and
6discharge associated with cultivation do not affect the instream
7flows needed for fish spawning, migration, and rearing, and the
8flows needed to maintain natural flow variability.

9(B) Cultivation will not negatively impact springs, riparian
10wetlands, and aquatic habitats.

11(2) The department shall establish a program for the
12identification of permitted medicalbegin delete marijuanaend deletebegin insert cannabisend insert plants at
13a cultivation site during the cultivation period. The unique identifier
14shall be attached at the base of each plant. A unique identifier,
15 such as, but not limited to, a zip tie, shall be issued for each medical
16begin delete marijuanaend deletebegin insert cannabisend insert plant.

17(A) Unique identifiersbegin delete willend deletebegin insert shallend insert only be issued to those persons
18appropriately licensed by this section.

19(B) Information associated with the assigned unique identifier
20and licensee shall be included in the trace and track program
21specified in Section 19335 of the Business and Professions Code.

22(C) The department may charge a fee to cover the reasonable
23costs of issuing the unique identifier and monitoring, tracking, and
24inspecting each medicalbegin delete marijuanaend deletebegin insert cannabisend insert plant.

begin delete

25(D) The department may promulgate regulations to implement
26this section.

end delete

27(3) The department shall take adequate steps to establish
28protections against fraudulent unique identifiers and limit illegal
29diversion of unique identifiers to unlicensed persons.

30(f) (1) A city, county, or city and county that issues or denies
31begin delete licensesend deletebegin insert licenses, permits, or other entitlementsend insert to cultivate medical
32begin delete marijuanaend deletebegin insert cannabisend insert pursuant to this section shall notify the
33department in a manner prescribed by the secretary.

34(2) Unique identifiers and associated identifying information
35administered by abegin delete city or countyend deletebegin insert city, county, or city and countyend insert
36 shall adhere to the requirements set by the department and be the
37equivalent to those administered by the department.

38(g) This section does not apply to a qualified patient cultivating
39begin delete marijuanaend deletebegin insert cannabisend insert pursuant to Section 11362.5 if the area he or
40she uses to cultivatebegin delete marijuanaend deletebegin insert cannabisend insert does not exceed 100
P57   1square feet and he or she cultivatesbegin delete marijuanaend deletebegin insert cannabisend insert for his or
2her personal medical use and does not sell, distribute, donate, or
3providebegin delete marijuanaend deletebegin insert cannabisend insert to any other person or entity. This
4section does not apply to a primary caregiver cultivatingbegin delete marijuanaend delete
5begin insert cannabisend insert pursuant to Section 11362.5 if the area he or she uses to
6cultivatebegin delete marijuanaend deletebegin insert cannabisend insert does not exceed 500 square feet and
7he or she cultivatesbegin delete marijuanaend deletebegin insert cannabisend insert exclusively for the personal
8medical use of no more than five specified qualified patients for
9whom he or she is the primary caregiver within the meaning of
10Section 11362.7 and does not receive remuneration for these
11activities, except for compensation provided in full compliance
12with subdivision (c) of Section 11362.765. For purposes of this
13section, the area used to cultivatebegin delete marijuanaend deletebegin insert cannabisend insert shall be
14measured by the aggregate area of vegetative growth of live
15begin delete marijuanaend deletebegin insert cannabisend insert plants on the premises. Exemption from the
16requirements of this section does not limit or prevent a city, county,
17or city and county from exercising its police authority under
18Section 7 of Article XI of the California Constitution.

19

begin deleteSEC. 21.end delete
20begin insertSEC. 37.end insert  

Section 11379 of the Health and Safety Code is
21amended to read:

22

11379.  

(a) Except as otherwise provided in subdivision (b)
23and in Article 7 (commencing with Section 4110) of Chapter 9 of
24Division 2 of the Business and Professions Code, every person
25who transports, imports into this state, sells, furnishes, administers,
26or gives away, or offers to transport, import into this state, sell,
27furnish, administer, or give away, or attempts to import into this
28state or transport any controlled substance which is (1) classified
29in Schedule III, IV, or V and which is not a narcotic drug, except
30subdivision (g) of Section 11056, (2) specified in subdivision (d)
31of Section 11054, except paragraphs (13), (14), (15), (20), (21),
32(22), and (23) of subdivision (d), (3) specified in paragraph (11)
33of subdivision (c) of Section 11056, (4) specified in paragraph (2)
34or (3) of subdivision (f) of Section 11054, or (5) specified in
35subdivision (d) or (e), except paragraph (3) of subdivision (e), or
36specified in subparagraph (A) of paragraph (1) of subdivision (f),
37of Section 11055, unless upon the prescription of a physician,
38dentist, podiatrist, or veterinarian, licensed to practice in this state,
39shall be punished by imprisonment pursuant to subdivision (h) of
P58   1Section 1170 of the Penal Code for a period of two, three, or four
2years.

3(b) Notwithstanding the penalty provisions of subdivision (a),
4any person who transports any controlled substances specified in
5subdivision (a) within this state from one county to another
6noncontiguous county shall be punished by imprisonment pursuant
7to subdivision (h) of Section 1170 of the Penal Code for three, six,
8or nine years.

9(c) For purposes of this section, “transports” means to transport
10for sale.

11(d) Nothing in this section is intended to preclude or limit
12prosecution under an aiding and abetting theory, accessory theory,
13or a conspiracy theory.

14(e) This section does not apply to commercialbegin delete marijuanaend delete
15begin insert cannabisend insert activity engaged in by a person or entity licensed pursuant
16to the Medicalbegin delete Marijuanaend deletebegin insert Cannabisend insert Regulation and Safety Act
17(Chapter 3.5 (commencing with Section 19300) of Division 8 of
18the Business and Professionsbegin delete Code).end deletebegin insert Code) and who is in full
19compliance with that act and all applicable local ordinances.end insert



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