Amended in Assembly April 4, 2016

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 Sections 19300, 19300.5, 19302, 19302.1, 19306, 19310, 19316,begin insert 19320,end insert 19321, 19322, 19326, 19332, 19332.5, 19334, 19335, 19340, 19342, 19344, 19347, 19350, 19351, and 19360 of, to amend the heading of Article 5 (commencing with Section 19326) of Chapter 3.5 of Division 8 of, to amend the heading of Chapter 3.5 (commencing with Section 19300) of Division 8 of, to amend and add Section 19328 of, to add Sections 19310.5, 19319.5, and 19322.5 to, and to repeal Section 19318 of, the Business and Professions Code, to amend Sections 12025 and 12029 of the Fish and Game Code,begin insert to amend Section 52334 of the Food and Agricultural Code,end insert and to amend Sections 11352, 11362.765, 11362.775, 11362.777, and 11379 of the Health and Safety Code, relating to medical cannabis.

LEGISLATIVE COUNSEL’S DIGEST

AB 1575, as amended, Bonta. Medical cannabis.

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

This bill would rename the act as the Medical Cannabis Regulation and Safety Act. The bill would also require the Board of Equalization to form an advisory group made up of representatives from financial institutions, the medical cannabis industry,begin insert law enforcement,end insert and state and federal banking regulators to examine strategies such as integrated point-of-sale systems with state track and trace systems and other measures that will improve financial monitoring of medical cannabis businesses. The bill would require the board, by July 1, 2017, to submit a report to the Legislature with proposed changes to state law or regulations that will improve financial monitoring of medical cannabis businesses and compliance with federal law. 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 Oversight to charge a fee for this certification, as specified.begin insert After the Bureau of Medical Cannabis Regulation posts a notice on its Internet Web site that the licensing authorities have commenced issuing licenses pursuant to the act, the bill would provide that a financial institution that provides financial services customarily provided by financial institutions to other entities to a current licensee under the act is exempt from any criminal law of the state, provided that the financial institution has verified the licensee has a valid license in good standing. The bill would authorize the bureau to provide information to a financial institution to verify the status of a licensee.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) Existing 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. Under the act, all packaging and sealing of medical marijuana or medical marijuana products is required to be completed prior to their being transported or delivered to a licensee, qualified patient, or caregiver.

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

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

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

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

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

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

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

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

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

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

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

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

This bill would provide that it is not a violation of state law or any local ordinance or regulation for a business or research institution that has state authorization to engage in the research of medical cannabis, medical cannabis products, or devices used for the medical use of cannabis or cannabis products, to possess, transport, purchase, or otherwise obtainbegin insert from a licensee who is authorized to provide or deliver medical cannabisend insert small amounts of medical cannabis or medical cannabis products to conduct research and development related to medical cannabis or medical cannabis products. The bill would requirebegin delete the bureau to promulgate regulations to establish minimum qualifications for state authorization to conduct research on medical cannabis and medical cannabis products and all related protocols, as specified.end deletebegin insert a business or research institution engaged in the research of medical cannabis to obtain written authorization from its local jurisdiction that it has met all requirements of the local ordinance to conduct research on medical cannabis, medical cannabis products, or devices used for the medical use of cannabis or cannabis products. The bill would provide that it is not a violation of state law for certain licensees to sell medical cannabis or medical cannabis products in an amount not to exceed 8 ounces per month to a business or research institution engaged in the research of medical cannabis if the business or research institution provides to the licensee a copy of the written authorization to conduct research within their jurisdiction and a copy of the local ordinance, and would require the licensee to keep on file that written authorization for at least 3 years and make it available upon request to local authorities for auditing purposes.end insert

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

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

begin insert

(11) The California Seed Law regulates seed sold in California, and prohibits a city, county, or district from adopting or enforcing an ordinance that regulates plants, crops, or seeds without the consent of the Secretary of Food and Agriculture.

end insert
begin insert

This bill would provide that an ordinance that regulates cannabis or marijuana, or medical cannabis or medical marijuana, as defined, shall not require the consent of the secretary.

end insert
begin delete

(11)

end delete

begin insert(12)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 bill would, instead, provide that the above exception is repealed one year after the bureau posts its notice on its Internet Web site. The bill would also specify that a collective or cooperative subject to this exception may operate on a for-profit basis, a not-for-profit basis, or any combination thereof. The bill would also specify that a licensee under the act may operate on a for-profit basis, a not-for-profit basis, or any combination thereof.

begin insert

The bill would provide that it is unlawful to display an advertisement, as defined, for qualified patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards, who associate within the state in order collectively or cooperatively to cultivate cannabis for medical purposes, without first verifying a valid Board of Equalization issued seller’s permit. The bill would make a violation of that provision an infraction, punishable by a fine of $500. By creating a new crime, the bill would impose a state-mandated local program. One year after the bureau posts the above-described notice on its Internet Web site, the bill would require all advertisements for licensees to include the valid state license number of the licensee, and would authorize the bureau to provide information to verify that a state license is active and in good standing for purposes of complying with this provision.

end insert
begin delete

(12)

end delete

begin insert(13)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 distribute cannabis in any manner other than set forth in the Medical Cannabis Regulation and Safety Act or in the Compassionate Use Act of 1996.

begin delete

(13)

end delete

begin insert(14)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 commercial cannabis activity by a holder of a state license who is in full compliance with the Medical Cannabis Regulation and Safety Act and all applicable local ordinances.

begin delete

(14)

end delete

begin insert(15)end insert This bill would also make technical, nonsubstantive changes to the provisions of the act, including changing the term marijuana to cannabis throughout.

begin insert

(16) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

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

P7    1

SECTION 1.  

The heading of Chapter 3.5 (commencing with
2Section 19300) of Division 8 of the Business and Professions Code
3 is amended to read:

4 

5Chapter  3.5. Medical Cannabis Regulation and Safety
6Act
7

 

8

SEC. 2.  

Section 19300 of the Business and Professions Code
9 is amended to read:

10

19300.  

This act shall be known and may be cited as the Medical
11Cannabis Regulation and Safety Act.

12

SEC. 3.  

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

14

19300.5.  

For purposes of this chapter, the following definitions
15shall apply:

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

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

22(1) (A) Owner or owners of a proposed facility.

P8    1(B) An “owner” means a person having an aggregate ownership
2interest, other than a security interest, lien, or encumbrance, of 5
3percent or more in the licensee or who has the power to direct, or
4cause to be directed, the management or control of the licensee.

5(2) If the applicant is a publicly traded company, “owner” means
6the chief executive officer, a member of the board of directors, or
7a person or entity with an aggregate ownership interest of 5 percent
8or more. If the applicant is a nonprofit entity, “owner” means both
9the chief executive officer and any member of the board of
10directors.

11(c) “Batch” means a specific quantity of medical cannabis or
12medical cannabis product that is intended to have uniform character
13and quality, within specified limits, and is produced according to
14a single manufacturing order during the same cycle of manufacture.

15(d) “Bureau” means the Bureau of Medical Cannabis Regulation
16within the Department of Consumer Affairs.

17(e) “Cannabinoid” or “phytocannabinoid” means a chemical
18compound that is unique to and derived from cannabis.

19(f) “Cannabis” or “marijuana” means all parts of the plant
20Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis,
21whether growing or not; the seeds thereof; the resin, whether crude
22or purified, extracted from any part of the plant; and every
23compound, manufacture, salt, derivative, mixture, or preparation
24of the plant, its seeds, or resin. “Cannabis” or “marijuana” also
25means the separated resin, whether crude or purified, obtained
26from marijuana. “Cannabis” or “marijuana” also means marijuana
27as defined by Section 11018 of the Health and Safety Code as
28enacted by Chapter 1407 of the Statutes of 1972. “Cannabis” or
29“marijuana” does not include the mature stalks of the plant, fiber
30produced from the stalks, oil or cake made from the seeds of the
31plant, any other compound, manufacture, salt, derivative, mixture,
32or preparation of the mature stalks (except the resin extracted
33therefrom), fiber, oil, or cake, or the sterilized seed of the plant
34that is incapable of germination. For the purposes of this chapter,
35“cannabis” or “marijuana” does not mean “industrial hemp” as
36defined by Section 11018.5 of the Health and Safety Code.

37(g) “Cannabis concentrate” or “marijuana concentrate” means
38manufactured cannabis that has undergone a process to concentrate
39the cannabinoid active ingredient, thereby increasing the product’s
40potency. An edible medical cannabis product is not considered
P9    1food, as defined by Section 109935 of the Health and Safety Code,
2or a drug, as defined by Section 109925 of the Health and Safety
3Code.

4(h) “Caregiver” or “primary caregiver” has the same meaning
5as that term is defined in Section 11362.7 of the Health and Safety
6Code.

7(i) “Certificate of accreditation” means a certificate issued by
8an accrediting body to a licensed testing laboratory, entity, or site
9to be registered in the state.

10(j) “Chief” means Chief of the Bureau of Medical Cannabis
11Regulation within the Department of Consumer Affairs.

12(k) “Commercial cannabis activity” or “commercial marijuana
13activity” includes cultivation, possession, manufacture, processing,
14storing, laboratory testing, labeling, transporting, distribution, or
15sale of medical cannabis or a medical cannabis product, except as
16set forth in Section 19319, related to qualifying patients and
17primary caregivers.

18(l) “Cultivation” means any activity involving the planting,
19growing, harvesting, drying, curing, grading, or trimming of
20 cannabis.

21(m) “Cultivation site” means a facility where medical cannabis
22is planted, grown, harvested, dried, cured, graded, or trimmed, or
23that does all or any combination of those activities, that is owned
24and operated by a person who holds a valid state license and a
25valid local license, permit, or other authorization.

26(n) “Cultivator” means a person that conducts the planting,
27growing, harvesting, drying, curing, grading, or trimming of
28medical cannabis and that holds both a valid state license and a
29valid local license, permit, or other authorization.

30(o) “Delivery” means the commercial transfer of medical
31cannabis or medical cannabis products from a dispensary, up to
32an amount determined by the bureau, to a primary caregiver or
33qualified patient as defined in Section 11362.7 of the Health and
34Safety Code, or a testing laboratory. “Delivery” also includes the
35use by a dispensary of any technology platform owned and
36controlled by the dispensary, or independently licensed under this
37chapter, that enables qualified patients or primary caregivers to
38arrange for or facilitate the commercial transfer by a licensed
39dispensary of medical cannabis or medical cannabis products.

P10   1(p) “Dispensary” means a commercial facility with a fixed
2location, whether or not there is direct access by customers, where
3medical cannabis or medical cannabis products are offered, either
4individually or in any combination, for retail sale, including an
5establishment that delivers, unlessbegin insert delivery isend insert expressly prohibited
6by local ordinance, medical cannabis and medical cannabis
7products as part of a retail sale.

8(q) “Dispensing” means any activity involving the retail sale of
9medical cannabis or medical cannabis products from a dispensary.

10(r) “Distribution” means the procurement, sale, and transport
11of medical cannabis and medical cannabis products between entities
12licensed pursuant to this chapter.

13(s) “Distributor” means a personbegin delete engagedend deletebegin insert licensed under this
14chapter to engageend insert
in the business of purchasingbegin insert or taking custody
15ofend insert
medical cannabis from a licensed cultivator, or medical cannabis
16products from a licensed manufacturer, for salebegin insert or transferend insert to a
17licensed dispensary and who holds a valid state license pursuant
18to this chapter and a valid local license, permit, or other
19
begin delete authorization.end deletebegin insert authorization at the physical location of the
20distributor.end insert

21(t) “Dried flower” means all dead medical cannabis that has
22been harvested, dried, cured, or otherwise processed, excluding
23leaves and stems.

24(u) “Edible cannabis product” or “edible marijuana product”
25means manufactured cannabis that is intended to be used, in whole
26or in part, for human consumption, including, but not limited to,
27chewing gum. An edible medical cannabis product is not
28considered food as defined by Section 109935 of the Health and
29Safety Code or a drug as defined by Section 109925 of the Health
30and Safety Code.

31(v) “Fund” means the Medical Cannabis Regulation and Safety
32Act Fund established pursuant to Section 19351.

33(w) “Identification program” means the universal identification
34certificate program for commercial medical cannabis activity
35authorized by this chapter.

36(x) “Labor peace agreement” means an agreement between a
37licensee and a bona fide labor organization that, at a minimum,
38protects the state’s proprietary interests by prohibiting labor
39organizations and members from engaging in picketing, work
40stoppages, boycotts, and any other economic interference with the
P11   1applicant’s business. This agreement means that the applicant has
2agreed not to disrupt efforts by the bona fide labor organization
3to communicate with, and attempt to organize and represent, the
4applicant’s employees. The agreement shall provide a bona fide
5labor organization access at reasonable times to areas in which the
6applicant’s employees work, for the purpose of meeting with
7employees to discuss their right to representation, employment
8rights under state law, and terms and conditions of employment.
9This type of agreement shall not mandate a particular method of
10election or certification of the bona fide labor organization.

11(y) “Licensee” means a person issued a state license under this
12chapter to engage in commercial cannabis activity.

13(z) “Licensing authority” means the state agency responsible
14for the issuance, renewal, or reinstatement of the license, or the
15state agency authorized to take disciplinary action against the
16licensee.

17(aa) “Live plants” means living medical cannabis flowers and
18plants, including seeds, immature plants, and vegetative stage
19plants.

20(ab) “Lot” means a batch, or a specifically identified portion of
21a batch, having uniform character and quality within specified
22limits. In the case of medical cannabis or a medical cannabis
23product produced by a continuous process, “lot” means a
24specifically identified amount produced in a unit of time or a
25quantity in a manner that ensures its having uniform character and
26quality within specified limits.

27(ac) “Manufactured cannabis” or “manufactured marijuana”
28means raw cannabis that has undergone a process whereby the raw
29agricultural product has been transformed into a concentrate, an
30edible cannabis product, or a topical product.

31(ad) “Manufacturer” means a person that conducts the
32production, preparation, propagation, or compounding of
33manufactured medical cannabis, as described in subdivision (ac),
34or medical cannabis products either directly or indirectly or by
35extraction methods, or independently by means of chemical
36synthesis or by a combination of extraction and chemical synthesis
37at a fixed location that packages or repackages medical cannabis
38or medical cannabis products or labels or relabels its container,
39that holds a valid state license pursuant to this chapter, and that
40holds a valid local license, permit, or other authorization.

P12   1(ae) “Manufacturing site” means a location that produces,
2prepares, propagates, or compounds manufactured medical
3cannabis or medical cannabis products, directly or indirectly, by
4extraction methods, independently by means of chemical synthesis,
5or by a combination of extraction and chemical synthesis, and is
6owned and operated by a person that holds a valid state license
7pursuant to this chapter and a valid local license, permit, or other
8authorization.

9(af) “Medical cannabis,” “medical cannabis product,” “cannabis
10product,” “medical marijuana,” “medical marijuana product,” or
11“marijuana product” means a product containing cannabis,
12including, but not limited to, concentrates and extractions, intended
13to be sold for use by medical cannabis patients in California
14pursuant to the Compassionate Use Act of 1996 (Proposition 215),
15found at Section 11362.5 of the Health and Safety Code. For the
16purposes of this chapter, “medical cannabis” or “medical
17marijuana” does not include “industrial hemp” as defined by
18Section 81000 of the Food and Agricultural Code or Section
1911018.5 of the Health and Safety Code.

20(ag) “Nursery” means a licensee that produces only clones,
21immature plants, seeds, and other agricultural products used
22specifically for the planting, propagation, and cultivation of medical
23 cannabis.

24(ah) “Permit,” “local license,” or “local permit” means an
25official document granted by a local jurisdiction that specifically
26authorizes a person to conduct commercial cannabis activity in
27the local jurisdiction.

28(ai) “Person” means an individual, firm, partnership, joint
29venture, association, corporation, limited liability company, estate,
30trust, business trust, receiver, syndicate, or any other group or
31combination acting as a unit and includes the plural as well as the
32singular number.

33(aj) “State license” or “license” means a state license issued
34pursuant to this chapter.

35(ak) “Topical product” means a product manufactured such that
36its final stage is in the form of a topical drug, as defined by the
37Center for Drug Evaluation and Research under the federal Food
38and Drug Administration. A topical product is not considered a
39drug as defined by Section 109925 of the Health and Safety Code.

P13   1(al) “Testing laboratory” means a facility, entity, or site in the
2state that offers or performs tests of medical cannabis or medical
3cannabis products and that is both of the following:

4(1) Accredited by an accrediting body that is independent from
5all other persons involved in the medical cannabis industry in the
6state.

7(2) Registered with the State Department of Public Health.

16 8(am) “Transport” means the transfer of medical cannabis or
9medical cannabis products from the permitted business location
10of one licensee to the permitted business location of another
11licensee, for the purposes of conducting commercial cannabis
12activity authorized pursuant to this chapter.

13(an) “Transporter” means a person issued a state license by the
14bureau to transport medical cannabis or medical cannabis products
15in an amount above a threshold determined by the bureau between
16facilities that have been issued a state license pursuant to this
17chapter.

18

SEC. 4.  

Section 19302 of the Business and Professions Code
19 is amended to read:

20

19302.  

There is in the Department of Consumer Affairs the
21Bureau of Medical Cannabis Regulation, under the supervision
22and control of the director. The director shall administer and
23enforce the provisions of this chapter.

24

SEC. 5.  

Section 19302.1 of the Business and Professions Code
25 is amended to read:

26

19302.1.  

(a) The Governor shall appoint a chief of the bureau,
27subject to confirmation by the Senate, at a salary to be fixed and
28determined by the Director of Consumer Affairs with the approval
29of the Director of Finance. The chief shall serve under the direction
30and supervision of the Director of Consumer Affairs and at the
31pleasure of the Governor.

32(b) Every power granted to or duty imposed upon the director
33under this chapter may be exercised or performed in the name of
34the director by a deputy or assistant director or by the chief, subject
35to conditions and limitations that the director may prescribe. In
36addition to every power granted or duty imposed with this chapter,
37the director shall have all other powers and duties generally
38applicable in relation to bureaus that are part of the Department
39of Consumer Affairs.

P14   1(c) The director may employ and appoint all employees
2necessary to properly administer the work of the bureau, in
3accordance with civil service laws and regulations.

4(d) The Department of Consumer Affairs shall have the sole
5authority to create, issue, renew, discipline, suspend, or revoke
6licenses for the transportation, storage unrelated to manufacturing
7activities, distribution, and sale of medical cannabis within the
8state and to collect fees in connection with activities the bureau
9regulates. The bureau may create licenses in addition to those
10identified in this chapter that the bureau deems necessary to
11effectuate its duties under this chapter.

12(e) The Department of Food and Agriculture shall administer
13the provisions of this chapter related to and associated with the
14cultivation of medical cannabis. The Department of Food and
15Agriculture may create, issue, and suspend or revoke cultivation
16licenses for violations of this chapter.

17(f) The State Department of Public Health shall administer the
18provisions of this chapter related to and associated with the
19manufacturing and testing of medical cannabis. The State
20Department of Public Health may create, issue, and suspend or
21revoke manufacturing and testing licenses for a violation of this
22chapter.begin insert The State Department of Public Health shall seek and
23include feedback from the scientific community and cannabis
24testing industry when promulgating testing regulations. The State
25Department of Public Health shall review and update medical
26cannabis testing standards on an annual basis, incorporating new
27testing technology, such as DNA testing for contaminants.end insert

28

SEC. 6.  

Section 19306 of the Business and Professions Code
29 is amended to read:

30

19306.  

(a) The bureau may convene an advisory committee
31to advise the bureau and licensing authorities on the development
32of standards and regulations pursuant to this chapter, including
33best practices and guidelines to ensure qualified patients have
34adequate access to medical cannabis and medical cannabis
35products. The advisory committee members shall be determined
36by the chief.

37(b) The advisory committee members may include, but are not
38limited to, representatives of the medical cannabis industry,
39representatives of medical cannabis cultivators, appropriate local
40and state agencies, appropriate local and state law enforcement,
P15   1physicians, environmental and public health experts, and medical
2cannabis patient advocates.

3

SEC. 7.  

Section 19310 of the Business and Professions Code
4 is amended to read:

5

19310.  

The licensing authority may, on its own motion at any
6time before a penalty assessment is placed into effect and without
7any further proceedings, review the penalty, but that review shall
8be limited to its reduction.

9

SEC. 8.  

Section 19310.5 is added to the Business and
10Professions Code
, to read:

11

19310.5.  

(a) It is the intent of the Legislature to enact a statute
12that improves the medical cannabis industry’s ability to comply
13with federal law and regulations that would allow improved access
14to banking services.

15(b) (1) The State Board of Equalization shall form an advisory
16group made up of representatives from financial institutions, the
17medical cannabis industry,begin insert law enforcement,end insert and state and federal
18banking regulators. By July 1, 2017, the board shall submit a report
19to the Legislature with proposed changes to state law or regulations
20that will improve financial monitoring of medical cannabis
21businesses and improve compliance with federal law.

22(2) A report submitted pursuant to paragraph (1) shall be
23submitted in compliance with Section 9795 of the Government
24Code. The requirement for submitting a report imposed in
25paragraph (1) is inoperative on July 1, 2021, pursuant to Section
2610231.5 of the Government Code.

27(c) The advisory group shall examine strategies, such as the use
28of integrated point-of-sale systems with state track and trace
29systems and other measures that will improve financial monitoring
30of medical cannabis businesses.

31(d) (1) The Department of Business Oversight shall create an
32enhanced financial monitoring certification for entities licensed
33pursuant to this chapter that further enables those entities to comply
34with the federal banking regulations under the federal Bank Secrecy
35Act. The Department of Business Oversight shall consider
36including requirements to use electronic financial monitoring that
37enables real-time sales inventory tracking and other tools that allow
38a bank or credit union to readily access information they are
39required to monitor under the federal Bank Secrecy Act.

P16   1(2) The Department of Business Oversight may collect fees
2from applicants requesting the enhanced financial monitoring
3certification in an amount sufficient to fund the actual reasonable
4costs of implementing subdivision (d).

begin insert

5
(3) After the Bureau of Medical Cannabis Regulation posts a
6notice on its Internet Web site that the licensing authorities have
7commenced issuing licenses pursuant to the Medical Cannabis
8Regulation and Safety Act, a financial institution that provides
9financial services customarily provided by financial institutions
10to other entities to a current licensee under the Medical Cannabis
11Regulation and Safety Act is exempt from any criminal law of this
12state, provided that the financial institution has verified the licensee
13has a valid license in good standing.

end insert
begin insert

14
(4) The Bureau of Medical Cannabis Regulation may provide
15information to a financial institution to verify the status of a
16licensee.

end insert
17

SEC. 9.  

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

19

19316.  

(a) (1) Except as described in paragraph (2), and
20pursuant to Section 7 of Article XI of the California Constitution,
21a city, county, or city and county may adopt ordinances that
22establish additional standards, requirements, and regulations for
23local licenses and permits for commercial cannabis activity.
24Standards, requirements, and regulations regarding health and
25safety, testing, security, and worker protections established by the
26state shall be the minimum standards for all licensees statewide.

27(2) Packaging safety standards shall be uniform across the state
28and shall be established by the State Department of Public Health.

29(3) For purposes of this subdivision, packaging safety standards
30do not include packaging requirements related to appellations of
31origin or other branding or marketing materials.

32(b) For facilities issued a state license that are located within
33the incorporated area of a city, the city shall have full power and
34authority to enforce this chapter and the regulations promulgated
35by the bureau or any licensing authority, if delegated by the state.
36Notwithstanding Sections 101375, 101400, and 101405 of the
37Health and Safety Code or any contract entered into pursuant
38thereto, or any other law, the city shall further assume complete
39responsibility for any regulatory function relating to those licensees
40within the city limits that would otherwise be performed by the
P17   1county or any county officer or employee, including a county
2health officer, without liability, cost, or expense to the county.

3(c) Nothing in this chapter, or any regulations promulgated
4thereunder, shall be deemed to limit the authority or remedies of
5a city, county, or city and county under any provision of law,
6including, but not limited to, Section 7 of Article XI of the
7California Constitution.

8

SEC. 10.  

Section 19318 of the Business and Professions Code
9 is repealed.

10

SEC. 11.  

Section 19319.5 is added to the Business and
11Professions Code
, to read:

12

19319.5.  

(a) begin delete(1)end deletebegin deleteend deleteIt is not a violation of this chapter or any
13other state law, for a business or research institution engaged in
14the research of medical cannabis, medical cannabis products, or
15devices used for the medical use of cannabis or cannabis products,
16to possess, transport, purchase, or otherwise legallybegin delete obtain,end deletebegin insert obtain
17from a licensee who is permitted to provide or deliver medical
18cannabisend insert
pursuant tobegin delete this chapter,end deletebegin insert subdivisions (n) and (o) of
19Section 19300.7,end insert
small amounts of medical cannabis or medical
20cannabis products,begin delete as determined by the bureau butend delete not to exceed
21eight ounces per month, as necessary to conduct research and
22development related to medical cannabis or medical cannabis
23products in a city, county, or city and county that expressly
24authorizes that activity by local ordinance.begin insert A business or research
25institution engaged in the research of medical cannabis shall obtain
26written authorization from its local jurisdiction that the business
27or institution has met all requirements of the local ordinance to
28conduct research on medical cannabis, medical cannabis products,
29or devices used for the medical use of cannabis or cannabis
30products.end insert

begin delete

31(2) Medical cannabis or medical cannabis products subject to
32this section shall be obtained only from a licensee who is permitted
33to provide or deliver the medical cannabis or medical cannabis
34product. A business or research institution shall only obtain medical
35cannabis or medical cannabis products for research purposes
36pursuant to regulations established by the bureau pursuant to
37subdivision (b).

38(b) The bureau shall promulgate regulations to establish
39minimum qualifications for state authorization to conduct research
40on medical cannabis or medical cannabis products and all related
P18   1protocols. The regulations shall include, but not be limited to, the
2following:

3(1) The requirement for all medical cannabis and medical
4cannabis products used for research purposes to be subject to all
5requirements of the state’s track and trace program established
6pursuant to this chapter.

7(2) The requirement that all applicants pursuing state
8authorization for research on medical cannabis or medical cannabis
9products obtain permission to operate from the local jurisdiction
10in which the applicant intends to conduct the research. A person
11shall not conduct research on medical cannabis or medical cannabis
12products without approval from both the state and the local
13jurisdiction in which the research is being conducted.

14(3) The maximum amount of medical cannabis and medical
15cannabis products that may be obtained per month for research
16purposes. In no case shall a person approved to conduct research
17on medical cannabis and medical cannabis products obtain more
18than eight ounces per month for research purposes.

end delete
begin insert

19
(b) It is not a violation of this chapter or any other state law
20for a licensee, pursuant to subdivisions (n) and (o) of Section
2119300.7, to sell medical cannabis or medical cannabis products
22in an amount not to exceed eight ounces per month to a business
23or research institution engaged in the research of medical
24cannabis, if the business or research institution provides to the
25licensee a copy of the written authorization to conduct research
26within the business’s or institution’s jurisdiction and a copy of the
27local ordinance. The licensee shall keep on file that written
28authorization for at least three years and make it available upon
29request to local authorities for auditing purposes.

end insert
30begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 19320 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert,
31as added by Section 4 of Chapter 689 of the Statutes of 2015, is
32amended to read:end insert

33

19320.  

(a) Licensing authorities administering this chapter
34may issue state licenses only to qualified applicants engaging in
35commercial cannabis activity pursuant to this chapter.begin delete Upon the
36date of implementation of regulations by the licensing authority,end delete

37begin insert One year after the Bureau of Medical Marijuana Cannabis
38Regulation posts a notice on its Internet Web site that the licensing
39authorities have commenced issuing licenses,end insert
no person shall
40engage in commercial cannabis activity without possessing both
P19   1a state license and a local permit, license, or other authorization.
2begin insert An entity seeking licensure pursuant to this chapter shall obtain
3a local license, permit, or other authorization prior to applying
4for state licensure. State licensing entities shall not issue a license
5to any applicant that is unable to provide documentation
6confirming authorization to operate from the local government in
7which the applicant proposes to operate.end insert
A licensee shall not
8commence activity under the authority of a state license until the
9applicant has obtained, in addition to the state license, a license or
10permit from the local jurisdiction in which he or she proposes to
11operate, following the requirements of the applicable local
12ordinance.

13(b) Revocation of a local license, permit, or other authorization
14shall terminate the ability of a medical cannabis business to operate
15within that local jurisdiction until the local jurisdiction reinstates
16or reissues the local license, permit, or other required authorization.
17Local authorities shall notify the bureau upon revocation of a local
18license. The bureau shall inform relevant licensing authorities.

19(c) Revocation of a state license shall terminate the ability of a
20medical cannabis licensee to operate within California until the
21licensing authority reinstates or reissues the state license. Each
22licensee shall obtain a separate license for each location where it
23engages in commercial medical cannabis activity. However,
24transporters only need to obtain licenses for each physical location
25where the licensee conducts business while not in transport, or any
26equipment that is not currently transporting medical cannabis or
27medical cannabis products, permanently resides.

28(d) In addition to the provisions of this chapter, local
29jurisdictions retain the power to assess fees and taxes, as applicable,
30on facilities that are licensed pursuant to this chapter and the
31business activities of those licensees.

32(e) Nothing in this chapter shall be construed to supersede or
33limit state agencies, including the State Water Resources Control
34Board and Department of Fish and Wildlife, from establishing fees
35to support their medical cannabis regulatory programs.

36begin insert

begin insertSEC. 13.end insert  

end insert

begin insertSection 19320 of the end insertbegin insertBusiness and Professions Codeend insertbegin insert,
37as added by Section 8 of Chapter 719 of the Statutes of 2015, is
38amended to read:end insert

39

19320.  

(a) Licensing authorities administering this chapter
40may issue state licenses only to qualified applicants engaging in
P20   1commercial cannabis activity pursuant to this chapter.begin delete Upon the
2date of implementation of regulations by the licensing authority,end delete

3begin insert One year after the Bureau of Medical Marijuana Cannabis
4Regulation posts a notice on its Internet Web site that the licensing
5authorities have commenced issuing licenses,end insert
no person shall
6engage in commercial cannabis activity without possessing both
7a state license and a local permit, license, or other authorization.
8begin insert An entity seeking licensure pursuant to this chapter shall obtain
9a local license, permit, or other authorization prior to applying
10for state licensure. State licensing entities shall not issue a license
11to any applicant that is unable to provide documentation
12confirming authorization to operate from the local government in
13which the applicant proposes to operate.end insert
A licensee shall not
14commence activity under the authority of a state license until the
15applicant has obtained, in addition to the state license, a license or
16permit from the local jurisdiction in which he or she proposes to
17operate, following the requirements of the applicable local
18ordinance.

19(b) Revocation of a local license, permit, or other authorization
20shall terminate the ability of a medical cannabis business to operate
21within that local jurisdiction until the local jurisdiction reinstates
22or reissues the local license, permit, or other required authorization.
23Local authorities shall notify the bureau upon revocation of a local
24license. The bureau shall inform relevant licensing authorities.

25(c) Revocation of a state license shall terminate the ability of a
26medical cannabis licensee to operate within California until the
27licensing authority reinstates or reissues the state license. Each
28licensee shall obtain a separate license for each location where it
29engages in commercial medical cannabis activity. However,
30transporters only need to obtain licenses for each physical location
31where the licensee conducts business while not in transport, or any
32equipment that is not currently transporting medical cannabis or
33medical cannabis products, permanently resides.

34(d) In addition to the provisions of this chapter, local
35jurisdictions retain the power to assess fees and taxes, as applicable,
36on facilities that are licensed pursuant to this chapter and the
37business activities of those licensees.

38(e) Nothing in this chapter shall be construed to supersede or
39limit state agencies, including the State Water Resources Control
P21   1Board and Department of Fish and Wildlife, from establishing fees
2to support their medical cannabis regulatory programs.

3

begin deleteSEC. 12.end delete
4
begin insertSEC. 14.end insert  

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

6

19321.  

(a) The Department of Consumer Affairs, the
7Department of Food and Agriculture, and the State Department of
8Public Health shall promulgate regulations for implementation of
9their respective responsibilities in the administration of this chapter.
10The secretary or director of each licensing authority may prescribe,
11adopt, and enforce emergency regulations necessary to implement
12this chapter.

13(b) Except as described in subdivision (e), a state license issued
14pursuant to this section shall be valid for 12 months from the date
15of issuance. The state license shall be renewed annually. Each
16licensing authority shall establish procedures for the renewal of a
17state license.

18(c) Notwithstanding subdivision (a) of Section 19320, a facility
19or entity that is operating in compliance with local zoning
20ordinances and other state and local requirements on or before
21January 1, 2018, may continue its operations until its application
22for licensure is approved or denied pursuant to this chapter. In
23issuing licenses, the licensing authority shall prioritize a facility
24or entity that can demonstrate to the licensing authority’s
25satisfaction that it was in operation and in good standing with the
26local jurisdiction by January 1, 2016.

27(d) Issuance of a state license or a determination of compliance
28with local law by the licensing authority shall in no way limit the
29ability of the City of Los Angeles to prosecute any person or entity
30for a violation of, or otherwise enforce, Proposition D, approved
31by the voters of the City of Los Angeles on the May 21, 2013,
32ballot for the city, or the city’s zoning laws. Nor may issuance of
33a state license or determination of compliance with local law by
34the licensing authority be deemed to establish, or be relied upon,
35in determining satisfaction with the immunity requirements of
36Proposition D or local zoning law, in court or in any other context
37or forum.

38

begin deleteSEC. 13.end delete
39
begin insertSEC. 15.end insert  

Section 19322 of the Business and Professions Code
40 is amended to read:

P22   1

19322.  

(a) A person or entity shall not submit an application
2for a state license pursuant to this chapter unless that person or
3entitybegin delete has receivedend deletebegin insert first receivesend insert a license, permit, or authorization
4from a local jurisdiction. An applicant for any type of state license
5issued pursuant to this chapter shall do all of the following:

6(1) Electronically submit to the Department of Justice fingerprint
7images and related information required by the Department of
8Justice for the purpose of obtaining information as to the existence
9 and content of a record of state or federal convictions and arrests,
10and information as to the existence and content of a record of state
11or federal convictions and arrests for which the Department of
12Justice establishes that the person is free on bail or on his or her
13own recognizance, pending trial or appeal.

14(A) The Department of Justice shall provide a response to the
15licensing authority pursuant to paragraph (1) of subdivision (p) of
16Section 11105 of the Penal Code.

17(B) The licensing authority shall request from the Department
18of Justice subsequent notification service, as provided pursuant to
19Section 11105.2 of the Penal Code, for applicants.

20(C) The Department of Justice shall charge the applicant a fee
21sufficient to cover the reasonable cost of processing the requests
22 described in this paragraph.

23(2) Provide documentation issued by the local jurisdiction in
24which the proposed business is operating certifying that the
25applicant is or will be in compliance with all local ordinances and
26regulations.

27(3) Provide evidence of the legal right to occupy and use the
28proposed location. For an applicant seeking a cultivator, distributor,
29manufacturing, or dispensary license, provide a statement from
30the owner of real property or their agent where the cultivation,
31distribution, manufacturing, or dispensing commercial medical
32cannabis activities will occur, as proof to demonstrate the
33landowner has acknowledged and consented to permit cultivation,
34distribution, manufacturing, or dispensary activities to be conducted
35on the property by the tenant applicant.

36(4) If the application is for a cultivator or dispensary license,
37provide evidence that the proposed location is located beyond at
38least a 600-foot radius from a school, as required by Section
3911362.768 of the Health and Safety Code.

P23   1(5) Provide a statement, signed by the applicant under penalty
2of perjury, that the information provided is complete, true, and
3accurate.

4(6) (A) For an applicant with 20 or more employees, provide
5a statement that the applicant will enter into, or demonstrate that
6it has already entered into, and abide by the terms of a labor peace
7agreement.

8(B) For the purposes of this paragraph, “employee” does not
9include a supervisor.

10(C) For purposes of this paragraph, “supervisor” means an
11individual having authority, in the interest of the licensee, to hire,
12transfer, suspend, lay off, recall, promote, discharge, assign,
13reward, or discipline other employees, or responsibility to direct
14them or to adjust their grievances, or effectively to recommend
15such action, if, in connection with the foregoing, the exercise of
16that authority is not of a merely routine or clerical nature, but
17requires the use of independent judgment.

18(7) Provide the applicant’s valid seller’s permit number issued
19pursuant to Part 1 (commencing with Section 6001) of Division 2
20of the Revenue and Taxation Code or indicate that the applicant
21is currently applying for a seller’s permit.

22(8) Provide any other information required by the licensing
23authority.

24(9) For an applicant seeking a cultivation license, provide a
25statement declaring the applicant is an “agricultural employer,” as
26defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
27Labor Relations Act of 1975 (Part 3.5 (commencing with Section
281140) of Division 2 of the Labor Code), to the extent not prohibited
29by law.

30(10) For an applicant seeking licensure as a testing laboratory,
31register with the State Department of Public Health and provide
32any information required by the State Department of Public Health.

33(11) Pay all applicable fees required for licensure by the
34licensing authority.

35(b) For applicants seeking licensure to cultivate, distribute, or
36 manufacture medical cannabis or medical cannabis products, the
37application shall also include a detailed description of the
38applicant’s operating procedures for all of the following, as
39required by the licensing authority:

40(1) Cultivation.

P24   1(2) Extraction and infusion methods.

2(3) The transportation process.

3(4) Inventory procedures.

4(5) Quality control procedures.

5

begin deleteSEC. 14.end delete
6
begin insertSEC. 16.end insert  

Section 19322.5 is added to the Business and
7Professions Code
, to read:

8

19322.5.  

A licensee may operate as a for-profit business, as a
9not-for-profit entity, or as a combination of both.

10

begin deleteSEC. 15.end delete
11
begin insertSEC. 17.end insert  

The heading of Article 5 (commencing with Section
1219326) of Chapter 3.5 of Division 8 of the Business and Professions
13Code
is amended to read:

14 

15Article 5.  Medical Cannabis Regulation
16

 

17

begin deleteSEC. 16.end delete
18
begin insertSEC. 18.end insert  

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

20

19326.  

(a) A person other than a transporter shall not transport
21medical cannabis or medical cannabis products from one licensee
22to another licensee, unless otherwise specified in this chapter.

23(b) (1) A cultivator or a manufacturer shall send medical
24cannabis and medical cannabis products cultivated or manufactured
25to a distributor, as defined in Section 19300.5, for quality assurance
26and inspection by the distributor and for a batch testing by a testing
27laboratory prior to distribution to a dispensary, except as provided
28in paragraph (2). Those licensees holding a Type 10A license in
29addition to a cultivation license or a manufacturing license shall
30send medical cannabis and medical cannabis products to a
31distributor for presale inspection and for a batch testing by a testing
32laboratory prior to dispensing any product. The licensing authority
33shall fine a licensee who violates this subdivision in an amount
34determined by the licensing authority to be reasonable.

35(2) A cultivator is not required to send medical cannabis to a
36distributor if the medical cannabis is to be used, sold, or otherwise
37distributed by methods approved pursuant to this chapter to a
38manufacturer for further manufacturing.

39(c) (1) Upon receipt of medical cannabis or medical cannabis
40products from a cultivator or a manufacturer, the distributor shall
P25   1first ensure a random sample of the medical cannabis or medical
2cannabis product is tested by a testing laboratory.

3(2) Upon issuance of a certificate of analysis by the testing
4laboratory that the product is fit for manufacturing or retail, the
5cultivator or manufacturer shall send medical cannabis and medical
6cannabis products from the approved associated batch to the
7distributor. All medical cannabis and medical cannabis products
8shall then undergo a quality assurance review by the distributor
9prior to distribution to ensure the identity, quality, and content of
10the medical cannabis or medical cannabis product, and for tracking
11and taxation purposes by the state. Cultivators and manufacturers
12shall package or seal all medical cannabis and medical cannabis
13products in tamper-evident packaging and use a unique identifier,
14as prescribed by the Department of Food and Agriculture, for the
15purpose of identifying and tracking medical cannabis or medical
16cannabis products. Medical cannabis and medical cannabis products
17shall be labeled as required by Section 19347, except as otherwise
18specified in this chapter. All packaging and sealing shall be
19completed prior to medical cannabis or medical cannabis products
20being transported or delivered to a licensee, qualified patient, or
21caregiver, except as otherwise specified in this chapter. The bureau
22shall specify the manner in which medical cannabis and medical
23cannabis products meant for wholesale purposes shall be packaged
24and sealed prior to transport, testing, quality assurance, quality
25control testing, or distribution.

26(3) This section does not limit the ability of a cultivator,
27manufacturer, or dispensary to directly enter into contracts with
28one another indicating the price and quantity of medical cannabis
29or medical cannabis products to be distributed. However, a
30distributor responsible for executing the contract is authorized to
31collect a fee for the services rendered, including, but not limited
32to, costs incurred by a testing laboratory, as well as applicable state
33or local taxes and fees.

34(d) Medical cannabis and medical cannabis products shall be
35tested by a testing laboratory, prior to retail sale or dispensing, as
36follows:

37(1) Medical cannabis from dried flower shall, at a minimum,
38be tested for concentration, pesticides, mold, and other
39contaminants.

P26   1(2) Medical cannabis extracts shall, at a minimum, be tested for
2concentration and purity of the product.

3(3) This chapter shall not prohibit a licensee from performing
4on-site testing for the purposes of quality assurance of the product
5in conjunction with reasonable business operations. On-site testing
6by the licensee shall not be certified by the State Department of
7Public Health.

8(e) All commercial cannabis activity shall be conducted between
9licensees.

10(f) The bureau shall promulgate regulations relating to the
11amounts of each batch of medical cannabis or medical cannabis
12product that a cultivator or manufacturer is required to send to a
13distributor for inspection and a testing laboratory for testing. The
14regulations shall focus on reducing diversion, ensuring the quality
15of the product for the health and safety of patients, and allowing
16for efficiency in enforcement.

17

begin deleteSEC. 17.end delete
18
begin insertSEC. 19.end insert  

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

20

19328.  

(a) Except as specified in paragraph (9), a licensee may
21only hold a state license in up to two separate license categories,
22as follows:

23(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either
24a Type 6 or 7 state license.

25(2) Type 6 or 7 licensees, or a combination thereof, may also
26hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license.

27(3) Type 6 or 7 licensees, or a combination thereof, may also
28hold a Type 10A state license.

29(4) Type 10A licensees may also hold either a Type 6 or 7 state
30license, or a combination thereof.

31(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
32thereof, may also hold a Type 10A state license.

33(6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A,
34or 2B state license, or a combination thereof.

35(7) Type 11 licensees shall apply for a Type 12 state license,
36but shall not apply for any other type of state license.

37(8) Type 12 licensees may apply for a Type 11 state license.

38(9) A Type 10A licensee may apply for a Type 6 or 7 state
39license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or
40 combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B,
P27   14 or combination of licenses thereof, no more than four acres of
2total canopy size of cultivation by the licensee is occurring
3throughout the state during the period that the respective licenses
4are valid. All cultivation pursuant to this section shall comply with
5local ordinances. By January 1, 2025, the bureau shall review the
6appropriateness of continuing licensure under this paragraph and
7shall report its recommendation for elimination or extension of
8these provisions to the Legislature.

9(b) Except as provided in subdivision (a), a person or entity that
10holds a state license is prohibited from licensure for any other
11activity authorized under this chapter, and is prohibited from
12holding an ownership interest in real property, personal property,
13or other assets associated with or used in any other license category.

14(c) (1) In a jurisdiction that adopted a local ordinance, prior to
15July 1, 2015, allowing or requiring qualified businesses to cultivate,
16manufacture, and dispense medical cannabis or medical cannabis
17products, with all commercial cannabis activity being conducted
18by a single qualified business, upon licensure that business shall
19not be subject to subdivision (a) if it meets all of the following
20conditions:

21(A) The business was cultivating, manufacturing, and dispensing
22medical cannabis or medical cannabis products on July 1, 2015,
23and has continuously done so since that date.

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

26(C) The business is registered with the State Board of
27Equalization for tax purposes.

28(2) A business licensed pursuant to paragraph (1) is not required
29to conduct all cultivation or manufacturing within the bounds of
30a single local jurisdiction, but all cultivation and manufacturing
31shall have commenced prior to July 1, 2015, and have been in full
32compliance with applicable local ordinances.

33(d) This section shall remain in effect only until January 1, 2026,
34and as of that date is repealed.

35

begin deleteSEC. 18.end delete
36
begin insertSEC. 20.end insert  

Section 19328 is added to the Business and
37Professions Code
, to read:

38

19328.  

(a) A licensee may only hold a state license in up to
39two separate license categories, as follows:

P28   1(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either
2a Type 6 or 7 state license.

3(2) Type 6 or 7 licensees, or a combination thereof, may also
4hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license.

5(3) Type 6 or 7 licensees, or a combination thereof, may also
6hold a Type 10A state license.

7(4) Type 10A licensees may also hold either a Type 6 or 7 state
8license, or a combination thereof.

9(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
10thereof, may also hold a Type 10A state license.

11(6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A,
12or 2B state license, or a combination thereof.

13(7) Type 11 licensees shall apply for a Type 12 state license,
14but shall not apply for any other type of state license.

15(8) Type 12 licensees may apply for a Type 11 state license.

16(9) A Type 10A licensee may apply for a Type 6 or 7 state
17license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or
18combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B,
194 or combination of licenses thereof, no more than four acres of
20total canopy size of cultivation by the licensee is occurring
21throughout the state during the period that the respective licenses
22are valid. All cultivation pursuant to this section shall comply with
23local ordinances.

24(b) Except as provided in subdivision (a), a person or entity that
25holds a state license is prohibited from licensure for any other
26activity authorized under this chapter, and is prohibited from
27holding an ownership interest in real property, personal property,
28or other assets associated with or used in any other license category.

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

30

begin deleteSEC. 19.end delete
31
begin insertSEC. 21.end insert  

Section 19332 of the Business and Professions Code,
32as added by Section 1 of Chapter 688 of the Statutes of 2015, is
33amended to read:

34

19332.  

(a) The Department of Food and Agriculture shall
35promulgate regulations governing the licensing of indoor and
36outdoor cultivation sites.

37(b) The Department of Pesticide Regulation, in consultation
38with the Department of Food and Agriculture, shall develop
39standards for the use of pesticides in cultivation, and maximum
P29   1tolerances for pesticides and other foreign object residue in
2harvested cannabis.

3(c) The State Department of Public Health shall develop
4standards for the production and labeling of all edible medical
5cannabis products.

6(d) The Department of Food and Agriculture, in consultation
7with the Department of Fish and Wildlife and the State Water
8Resources Control Board, shall ensure that individual and
9cumulative effects of water diversion and discharge associated
10with cultivation do not affect the instream flows needed for fish
11spawning, migration, and rearing, and the flows needed to maintain
12natural flow variability.

13(e) The Department of Food and Agriculture shall have the
14authority necessary to implement the regulations it adopts pursuant
15to this chapter. The regulations shall do all of the following:

16(1) Provide that weighing or measuring devices used in
17connection with the sale or distribution of medical cannabis are
18required to meet standards equivalent to Division 5 (commencing
19 with Section 12001).

20(2) Require that medical cannabis cultivation by licensees is
21conducted in accordance with state and local laws related to land
22conversion, grading, electricity usage, water usage, agricultural
23discharges, and similar matters. Nothing in this chapter, and no
24regulation adopted by the department, shall be construed to
25supersede or limit the authority of the State Water Resources
26Control Board, regional water quality control boards, or the
27Department of Fish and Wildlife to implement and enforce their
28statutory obligations or to adopt regulations to protect water quality,
29water supply, and natural resources.

30(3) Establish procedures for the issuance and revocation of
31unique identifiers for activities associated with a medical cannabis
32cultivation license, pursuant to Article 8 (commencing with Section
3319337). All medical cannabis shall be labeled with the unique
34identifier issued by the Department of Food and Agriculture.

35(4) Prescribe standards, in consultation with the bureau, for the
36reporting of information as necessary related to unique identifiers,
37pursuant to Article 8 (commencing with Section 19337).

38(f) The Department of Pesticide Regulation, in consultation with
39the State Water Resources Control Board, shall promulgate
40regulations that require that the application of pesticides or other
P30   1pest control in connection with the indoor or outdoor cultivation
2of medical cannabis meets standards equivalent to Division 6
3(commencing with Section 11401) of the Food and Agricultural
4Code and its implementing regulations.

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

7(1) Type 1, or “specialty outdoor,” for outdoor cultivation using
8no artificial lighting of less than or equal to 5,000 square feet of
9total canopy size on one premises, or up to 50 mature plants on
10noncontiguous plots.

11(2) Type 1A, or “specialty indoor,” for indoor cultivation using
12exclusively artificial lighting of less than or equal to 5,000 square
13feet of total canopy size on one premises.

14(3) Type 1B, or “specialty mixed-light,” for cultivation using a
15combination of natural and supplemental artificial lighting at a
16maximum threshold to be determined by the licensing authority,
17of less than or equal to 5,000 square feet of total canopy size on
18one premises.

19(4) Type 2, or “small outdoor,” for outdoor cultivation using
20no artificial lighting between 5,001 and 10,000 square feet,
21inclusive, of total canopy size on one premises.

22(5) Type 2A, or “small indoor,” for indoor cultivation using
23exclusively artificial lighting between 5,001 and 10,000 square
24 feet, inclusive, of total canopy size on one premises.

25(6) Type 2B, or “small mixed-light,” for cultivation using a
26combination of natural and supplemental artificial lighting at a
27maximum threshold to be determined by the licensing authority,
28between 5,001 and 10,000 square feet, inclusive, of total canopy
29size on one premises.

30(7) Type 3, or “outdoor,” for outdoor cultivation using no
31artificial lighting from 10,001 square feet to one acre, inclusive,
32of total canopy size on one premises. The Department of Food and
33Agriculture shall limit the number of licenses allowed of this type.

34(8) Type 3A, or “indoor,” for indoor cultivation using
35exclusively artificial lighting between 10,001 and 22,000 square
36feet, inclusive, of total canopy size on one premises. The
37Department of Food and Agriculture shall limit the number of
38licenses allowed of this type.

39(9) Type 3B, or “mixed-light,” for cultivation using a
40combination of natural and supplemental artificial lighting at a
P31   1maximum threshold to be determined by the licensing authority,
2between 10,001 and 22,000 square feet, inclusive, of total canopy
3size on one premises. The Department of Food and Agriculture
4shall limit the number of licenses allowed of this type.

5(10) Type 4, or “nursery,” for cultivation of medical cannabis
6solely as a nursery. A Type 4 licensee may transport live immature
7plants, subject to the tracking, security, and related requirements
8in accordance with Article 7 (commencing with Section 19334),
9Article 7.5 (commencing with Section 19335), and Article 8
10(commencing with Section 19337).

11

begin deleteSEC. 20.end delete
12
begin insertSEC. 22.end insert  

Section 19332 of the Business and Professions Code,
13as added by Section 13 of Chapter 719 of the Statutes of 2015, is
14amended to read:

15

19332.  

(a) The Department of Food and Agriculture shall
16promulgate regulations governing the licensing of indoor and
17outdoor cultivation sites.

18(b) The Department of Pesticide Regulation, in consultation
19with the Department of Food and Agriculture, shall develop
20standards for the use of pesticides in cultivation, and maximum
21tolerances for pesticides and other foreign object residue in
22harvested cannabis.

23(c) The State Department of Public Health shall develop
24standards for the production and labeling of all edible medical
25cannabis products.

26(d) The Department of Food and Agriculture, in consultation
27with the Department of Fish and Wildlife and the State Water
28Resources Control Board, shall ensure that individual and
29cumulative effects of water diversion and discharge associated
30with cultivation do not affect the instream flows needed for fish
31spawning, migration, and rearing, and the flows needed to maintain
32natural flow variability.

33(e) The Department of Food and Agriculture shall have the
34authority necessary to implement the regulations it adopts pursuant
35to this chapter. The regulations shall do all of the following:

36(1) Provide that weighing or measuring devices used in
37connection with the sale or distribution of medical cannabis are
38required to meet standards equivalent to Division 5 (commencing
39 with Section 12001).

P32   1(2) Require that medical cannabis cultivation by licensees is
2conducted in accordance with state and local laws related to land
3conversion, grading, electricity usage, water usage, agricultural
4discharges, and similar matters. Nothing in this chapter, and no
5regulation adopted by the department, shall be construed to
6supersede or limit the authority of the State Water Resources
7Control Board, regional water quality control boards, or the
8Department of Fish and Wildlife to implement and enforce their
9statutory obligations or to adopt regulations to protect water quality,
10water supply, and natural resources.

11(3) Establish procedures for the issuance and revocation of
12unique identifiers for activities associated with a medical cannabis
13cultivation license, pursuant to Article 8 (commencing with Section
1419337). All medical cannabis shall be labeled with the unique
15identifier issued by the Department of Food and Agriculture.

16(4) Prescribe standards, in consultation with the bureau, for the
17reporting of information as necessary related to unique identifiers,
18pursuant to Article 8 (commencing with Section 19337).

19(f) The Department of Pesticide Regulation, in consultation with
20the State Water Resources Control Board, shall promulgate
21regulations that require that the application of pesticides or other
22pest control in connection with the indoor or outdoor cultivation
23of medical cannabis meets standards equivalent to Division 6
24(commencing with Section 11401) of the Food and Agricultural
25Code and its implementing regulations.

26(g) State cultivator license types issued by the Department of
27Food and Agriculture include:

28(1) Type 1, or “specialty outdoor,” for outdoor cultivation using
29no artificial lighting of less than or equal to 5,000 square feet of
30total canopy size on one premises, or up to 50 mature plants on
31noncontiguous plots.

32(2) Type 1A, or “specialty indoor,” for indoor cultivation using
33exclusively artificial lighting of less than or equal to 5,000 square
34feet of total canopy size on one premises.

35(3) Type 1B, or “specialty mixed-light,” for cultivation using a
36combination of natural and supplemental artificial lighting at a
37maximum threshold to be determined by the licensing authority,
38of less than or equal to 5,000 square feet of total canopy size on
39one premises.

P33   1(4) Type 2, or “small outdoor,” for outdoor cultivation using
2no artificial lighting between 5,001 and 10,000 square feet,
3inclusive, of total canopy size on one premises.

4(5) Type 2A, or “small indoor,” for indoor cultivation using
5exclusively artificial lighting between 5,001 and 10,000 square
6feet, inclusive, of total canopy size on one premises.

7(6) Type 2B, or “small mixed-light,” for cultivation using a
8combination of natural and supplemental artificial lighting at a
9maximum threshold to be determined by the licensing authority,
10between 5,001 and 10,000 square feet, inclusive, of total canopy
11size on one premises.

12(7) Type 3, or “outdoor,” for outdoor cultivation using no
13artificial lighting from 10,001 square feet to one acre, inclusive,
14of total canopy size on one premises. The Department of Food and
15Agriculture shall limit the number of licenses allowed of this type.

16(8) Type 3A, or “indoor,” for indoor cultivation using
17exclusively artificial lighting between 10,001 and 22,000 square
18feet, inclusive, of total canopy size on one premises. The
19Department of Food and Agriculture shall limit the number of
20licenses allowed of this type.

21(9) Type 3B, or “mixed-light,” for cultivation using a
22combination of natural and supplemental artificial lighting at a
23maximum threshold to be determined by the licensing authority,
24between 10,001 and 22,000 square feet, inclusive, of total canopy
25size on one premises. The Department of Food and Agriculture
26shall limit the number of licenses allowed of this type.

27(10) Type 4, or “nursery,” for cultivation of medical cannabis
28solely as a nursery. A Type 4 licensee may transport live immature
29plants, subject to the tracking, security, and related requirements
30in accordance with Article 7 (commencing with Section 19334),
31Article 7.5 (commencing with Section 19335), and Article 8
32(commencing with Section 19337).

33

begin deleteSEC. 21.end delete
34
begin insertSEC. 23.end insert  

Section 19332.5 of the Business and Professions Code
35 is amended to read:

36

19332.5.  

(a) Not later than January 1, 2020, the Department
37of Food and Agriculture in conjunction with the bureau, shall make
38available a certified organic designation and organic certification
39program for medical cannabis, if permitted under federal law and
40the National Organic Program (Section 6517 of the federal Organic
P34   1Foods Production Act of 1990 (7 U.S.C. Sec. 6501 et seq.)), and
2Article 7 (commencing with Section 110810) of Chapter 5 of Part
35 of Division 104 of the Health and Safety Code.

4(b) The bureau may establish appellations of origin for medical
5cannabis grown in California.

6(c) It is unlawful for medical cannabis to be marketed, labeled,
7or sold as grown in a California county when the medical cannabis
8was not grown in that county.

9(d) It is unlawful to use the name of a California county in the
10labeling, marketing, or packaging of medical cannabis products
11unless the product was grown in that county.

12

begin deleteSEC. 22.end delete
13
begin insertSEC. 24.end insert  

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

15

19334.  

(a) State licenses to be issued by the Department of
16Consumer Affairs are as follows:

17(1) (A) “Dispensary,” as defined in this chapter.

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

19(i) “Storefront dispensary” for licensees who have a dispensary
20with direct physical access for the public.

21(ii) “Nonstorefront dispensary” for licensees who have a
22dispensary that does not have a storefront with direct physical
23access for the public.

24(iii) “Special dispensary” for licensees who have no more than
25three dispensary facilities.

26(C) Any of the dispensaries listed in subparagraph (B) may
27deliver in a city, county, or city and county that does not expressly
28prohibit delivery by local ordinance.

29(2) “Distributor,” or “Type 11 licensee,” for the distribution of
30medical cannabis and medical cannabis products from manufacturer
31to dispensary. A distributor shall hold a Type 12, or transporter,
32license and register each location where product is stored for the
33purposes of distribution. A distributor shall not hold a license in
34a cultivation, manufacturing, dispensing, or testing license category
35and shall not own, or have an ownership interest in, a facility
36 licensed in those categories other than a security interest, lien, or
37encumbrance on property that is used by a licensee. A distributor
38shall be bonded and insured at a minimum level established by the
39licensing authority.

P35   1(3)  “Transporter” or “Type 12 licensee” for transporters of
2medical cannabis or medical cannabis products between licensees.
3A transporter shall be bonded and insured at a minimum level
4established by the licensing authority.

5(b) The bureau shall establish both of the following:

6(1) Minimum security requirements for the commercial
7transportation and delivery of medical cannabis and medical
8cannabis products.

9(2) Advertising, marketing, signage, and other labeling
10requirements and restrictions, including a prohibition on
11advertising, marketing, and other promotion of the medical
12cannabis or medical cannabis products provided by a person not
13in full compliance with this chapter.

begin insert

14
(A) The bureau may provide information to verify a state license
15is active and in good standing for purposes of complying with this
16paragraph.

end insert
begin insert

17
(B) One year after the bureau posts a notice on its Internet Web
18site that the licensing authorities have commenced issuing licenses
19pursuant to the Medical Marijuana Regulation and Safety Act, all
20advertisements for licensees under this chapter shall include the
21valid state license number of the licensee.

end insert

22(c) A dispensary shall implement sufficient security measures
23to both deter and prevent unauthorized entrance into areas
24containing medical cannabis or medical cannabis products and
25theft of medical cannabis or medical cannabis products at the
26dispensary. These security measures shall include, but not be
27limited to, all of the following:

28(1) Preventing individuals from remaining on the premises of
29the dispensary if they are not engaging in activity expressly related
30to the operations of the dispensary.

31(2) Establishing limited access areas accessible only to
32authorized dispensary personnel.

33(3) Storing all finished medical cannabis and medical cannabis
34products in a secured and locked room, safe, or vault, and in a
35manner as to prevent diversion, theft, and loss, except for limited
36amounts of cannabis used for display purposes, samples, or
37immediate sale.

38(4) Requiring all medical cannabis and medical cannabis
39products used for display purposes, samples, or immediate sale to
P36   1be stored out of reach of any individual who is not employed by
2the dispensary.

3(d) A dispensary shall notify the licensing authority and the
4appropriate law enforcement authorities within 24 hours after
5discovering any of the following:

6(1) Significant discrepancies identified during inventory. The
7level of significance shall be determined by the bureau.

8(2) Diversion, theft, loss, or any criminal activity involving the
9dispensary or any agent or employee of the dispensary.

10(3) The loss or unauthorized alteration of records related to
11cannabis, registered qualifying patients, primary caregivers, or
12dispensary employees or agents.

13(4) Any other breach of security.

14

begin deleteSEC. 23.end delete
15
begin insertSEC. 25.end insert  

Section 19335 of the Business and Professions Code
16 is amended to read:

17

19335.  

(a) The Department of Food and Agriculture, in
18consultation with the bureau, shall establish a track and trace
19program for reporting the movement of medical cannabis items
20throughout the distribution chain that utilizes a unique identifier
21pursuant to Section 11362.777 of the Health and Safety Code and
22secure packaging and is capable of providing information that
23captures, at a minimum, all of the following:

24(1) The licensee receiving the product.

25(2) The transaction date.

26(3) The cultivator from which the product originates, including
27the associated unique identifier, pursuant to Section 11362.777 of
28the Health and Safety Code.

29(b) (1) The Department of Food and Agriculture shall create
30an electronic database containing the electronic shipping manifests,
31which shall include, but not be limited to, the following
32information:

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

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

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

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

37(E) A categorization of the product.

38(F) The license number and the unique identifier pursuant to
39Section 11362.777 of the Health and Safety Code issued by the
40licensing authority for all licensees involved in the shipping
P37   1process, including cultivators, transporters, distributors, and
2dispensaries.

3(2) (A) The database shall be designed to flag irregularities for
4all licensing authorities in this chapter to investigate.
5Notwithstanding Section 30, all licensing authorities pursuant to
6this chapter may access the database and share information related
7to licensees under this chapter, including social security and
8individual taxpayer identifications.

9(B) The Department of Food and Agriculture shall immediately
10inform the bureau upon the finding of an irregularity or suspicious
11finding related to a licensee, applicant, or commercial cannabis
12activity for investigatory purposes.

13(3) Licensing authorities and state and local agencies may, at
14any time, inspect shipments and request documentation for current
15inventory.

16(4) The bureau shall have 24-hour access to the electronic
17database administered by the Department of Food and Agriculture.

18(5) The Department of Food and Agriculture shall be authorized
19to enter into memoranda of understandings with licensing
20authorities for data sharing purposes, as deemed necessary by the
21Department of Food and Agriculture.

22(6) Information received and contained in records kept by the
23Department of Food and Agriculture or licensing authorities for
24the purposes of administering this section are confidential and
25shall not be disclosed pursuant to the California Public Records
26Act (Chapter 3.5 (commencing with Section 6250) of Division 7
27of Title 1 of the Government Code), except as necessary for
28authorized employees of the State of California or any city, county,
29or city and county to perform official duties pursuant to this chapter
30or a local ordinance.

31(7) Upon the request of a state or local law enforcement agency,
32licensing authorities shall allow access to or provide information
33contained within the database to assist law enforcement in their
34duties and responsibilities pursuant to this chapter.

35

begin deleteSEC. 24.end delete
36
begin insertSEC. 26.end insert  

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

38

19340.  

(a) Deliveries, as defined in this chapter, can only be
39made by a dispensary and in a city, county, or city and county that
40does not explicitly prohibit it by local ordinance.

P38   1(b) Upon approval of the licensing authority, a licensed
2dispensary that delivers medical cannabis or medical cannabis
3products shall comply with both of the following:

4(1) The city, county, or city and county in which the licensed
5dispensary is located, and in which each delivery is made, do not,
6by ordinance, explicitly prohibit delivery.

7(2) All employees of a dispensary delivering medical cannabis
8or medical cannabis products shall carry a copy of the dispensary’s
9current license authorizing those services with them during
10deliveries and the employee’s government-issued identification,
11and shall present that license and identification upon request to
12state and local law enforcement, employees of regulatory
13authorities, and other state and local agencies enforcing this
14chapter.

15(c) A county shall have the authority to impose a tax, pursuant
16to Article 11 (commencing with Section 19348), on each delivery
17transaction completed by a licensee.

18(d) During delivery, the licensee shall maintain a physical copy
19of the delivery request and shall make it available upon request of
20the licensing authority and law enforcement officers. The delivery
21request documentation shall comply with state and federal law
22regarding the protection of confidential medical information.

23(e) The qualified patient or primary caregiver requesting the
24delivery shall maintain a copy of the delivery request and shall
25make it available, upon request, to the licensing authority and law
26enforcement officers.

27(f) A local jurisdiction shall not prevent carriage of medical
28cannabis or medical cannabis products on public roads by a licensee
29acting in compliance with this chapter.

30(g) The bureau shall establish the following regulations
31regarding the delivery of medical cannabis and medical cannabis
32products:

33(1) Employee training standards that ensure qualified patients
34and primary caregivers have adequate information regarding the
35medical cannabis or medical cannabis products that a dispensary
36delivers, and to provide employees with information regarding
37state and federal laws and regulations.

38(2) Protocols to provide qualified patients and primary caregivers
39with information regarding laws, regulations, and policies relevant
40to providing medical cannabis or medical cannabis products to
P39   1qualified patients and primary caregivers in the local jurisdiction
2in which the dispensary is located and the area in which the medical
3cannabis or medical cannabis products are being delivered.

4(3) A system for registering and maintaining the status of all
5delivery personnel of dispensaries, including protocols for
6suspending the registrations of individuals who move out of this
7state, who discontinue employment at a dispensary, or who are
8under suspension or inspection by a dispensary or local or state
9law enforcement. This system shall be made available to local and
10state law enforcement, qualified patients, primary caregivers, and
11any other entity deemed appropriate by the bureau. Any fees
12associated with registration of delivery personnel shall be set by
13the bureau and shall not exceed the reasonable amount necessary
14 to cover the costs to regulate the delivery personnel and maintain
15the system.

16(4) The operating hours for delivery.

17(5) A requirement that each dispensary employee who delivers
18medical cannabis or medical cannabis products contract with only
19one dispensary at time.

20(6) Minimum requirements for patient information that is stored
21by each delivery operation, including, but not limited to, the contact
22information for the patient and, if applicable, his or her primary
23caregiver, the physician’s recommendation, andbegin delete the condition for
24which the medical cannabis or medical cannabis product is being
25recommended.end delete
begin insert the identification card issued pursuant to Article
262.5 (commencing with Section 11362.7) of Chapter 6 of Division
2710 of the Health and Safety Code.end insert
All identifying information
28obtained about a qualified patient or primary caregiver shall be
29obtained and stored in compliance with the Confidentiality of
30Medical Information Act (Part 2.6 (commencing with Section 56)
31of Division 1 of the Civil Code) and all other privacy laws and
32regulations.

33(h) The bureau shall establish requirements for all dispensary
34employees who deliver medical cannabis or medical cannabis
35products, including, but not limited to, the following:

36(1) Possession of a valid driver’s license issued by the
37Department of Motor Vehicles.

38(2) Provide the bureau with a current address.

39(3) Provide the bureau with necessary automobile and insurance
40information.

P40   1(4) Registration with the bureau.

2

begin deleteSEC. 25.end delete
3
begin insertSEC. 27.end insert  

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

5

19342.  

(a) For the purposes of testing medical cannabis or
6medical cannabis products, licensees shall use a licensed testing
7laboratory that has adopted a standard operating procedure using
8methods consistent with general requirements for the competence
9of testing and calibration activities, including sampling, using
10standard methods established by the International Organization
11for Standardization, specifically ISO/IEC 17020 and ISO/IEC
1217025 to test medical cannabis and medical cannabis products that
13are approved by an accrediting body that is a signatory to the
14International Laboratory Accreditation Cooperation Mutual
15Recognition Arrangement.

16(b) An agent of a testing laboratory shall obtain samples
17according to a statistically valid sampling method for each lot.

18(c) A testing laboratory shall analyze samples according to the
19following:

20(1) In the final form which the patient will consume the medical
21cannabis or medical cannabis product, including moisture content
22and other attributes.

23(2) A scientifically valid methodology approved by the
24accrediting body.

25(d) If a test result falls outside the specifications authorized by
26law or regulation, the testing laboratory shall follow a standard
27operating procedure to confirm or refute the original result.

28(e) A testing laboratory shall destroy the remains of the sample
29of medical cannabis or medical cannabis product upon completion
30of the analysis.

31

begin deleteSEC. 26.end delete
32
begin insertSEC. 28.end insert  

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

34

19344.  

(a) A testing laboratory shall issue a certificate of
35 analysis for each lot, with supporting data, to report both of the
36following:

37(1) Whether the chemical profile of the lot conforms to the
38specifications of the lot for compounds, including, but not limited
39to, all of the following:

40(A) Tetrahydrocannabinol (THC).

P41   1(B) Tetrahydrocannabinolic Acid (THCA).

2(C) Cannabidiol (CBD).

3(D) Cannabidiolic Acid (CBDA).

4(E) The terpenes described in the most current version of the
5cannabis inflorescence monograph published by the American
6Herbal Pharmacopoeia.

7(F) Cannabigerol (CBG).

8(G) Cannabinol (CBN).

9(H) Any other compounds required by the State Department of
10Public Health.

11(2) That the presence of contaminants does not exceed the levels
12that are the lesser of either the most current version of the American
13 Herbal Pharmacopoeia monograph or the State Department of
14Public Health. For purposes of this paragraph, contaminants
15begin delete includes,end deletebegin insert include,end insert butbegin delete isend deletebegin insert areend insert not limited to, all of the following:

16(A) Residual solvent or processing chemicals.

17(B) Foreign material, including, but not limited to, hair, insects,
18or similar or related adulterant.

19(C) Microbiological impurity, including total aerobic microbial
20count, total yeast mold count, P. aeruginosa, aspergillus spp., s.
21aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A.

22(D) Whether the batch is within specification for odor and
23appearance.

24(b) Residual levels of volatile organic compounds shall be below
25those set by the State Department of Public Health.begin insert The State
26Department of Public Health shall conduct periodic audits of the
27results of testing laboratories to verify their accuracy.end insert

28

begin deleteSEC. 27.end delete
29
begin insertSEC. 29.end insert  

Section 19347 of the Business and Professions Code
30 is amended to read:

31

19347.  

(a) Prior to delivery or sale at a dispensary, medical
32cannabis products shall be labeled and in a tamper-evident package.
33Labels and packages of medical cannabis products shall meet the
34following requirements:

35(1) Medical cannabis packages and labels shall not be made to
36be attractive to children.

37(2) All medical cannabis product labels shall include the
38following information, prominently displayed and in a clear and
39legible font:

40(A) Manufacture date and source.

P42   1(B) The statement “SCHEDULE I CONTROLLED
2SUBSTANCE.”

3(C) The statement “KEEP OUT OF REACH OF CHILDREN
4AND ANIMALS” in bold print.

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

6(E) The statement “THE INTOXICATING EFFECTS OF THIS
7PRODUCT MAY BE DELAYED BY UP TO TWO HOURS.”

8(F) The statement “THIS PRODUCT MAY IMPAIR THE
9ABILITY TO DRIVE OR OPERATE MACHINERY. PLEASE
10USE EXTREME CAUTION.”

11(G) For packages containing only dried flower, the net weight
12of medical cannabis in the package.

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

14(I) List of pharmacologically active ingredients, including, but
15not limited to, tetrahydrocannabinol (THC), cannabidiol (CBD),
16and other cannabinoid content, the THC and other cannabinoid
17amount in milligrams per serving, servings per package, and the
18THC and other cannabinoid amount in milligrams for the package
19total.

20(J) Clear indication, in bold type, that the product contains
21medical cannabis.

22(K) Identification of the source and date of cultivation and
23manufacture.

24(L) Any other requirement set by the State Department of Public
25Health.

26(M) Information associated with the unique identifier issued by
27the Department of Food and Agriculture pursuant to Section
2811362.777 of the Health and Safety Code.

29(b) Only generic food names may be used to describe edible
30medical cannabis products, pursuant to regulations promulgated
31by the State Department of Public Health.

32

begin deleteSEC. 28.end delete
33
begin insertSEC. 30.end insert  

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

35

19350.  

Each licensing authority shall establish a scale of
36application, licensing, and renewal fees, based upon the cost of
37enforcing this chapter, as follows:

38(a) Each licensing authority shall charge each licensee a
39licensure and renewal fee, as applicable. The licensure and renewal
40fee shall be calculated to cover the costs of administering this
P43   1chapter. The licensure fee may vary depending upon the varying
2costs associated with administering the various regulatory
3requirements of this chapter as they relate to the nature and scope
4of the different licensure activities, including, but not limited to,
5the track and trace program required pursuant to Section 19335,
6but shall not exceed the reasonable regulatory costs to the licensing
7authority.

8(b) The total fees assessed pursuant to this chapter shall be set
9at an amount that will fairly and proportionately generate sufficient
10total revenue to fully cover the total costs of administering this
11chapter.

12(c) All state license fees shall be set on a scaled basis by the
13licensing authority, dependent on the size of the business.

14(d) The licensing authority shall deposit all fees collected
15pursuant to this chapter in a fee account specific to that licensing
16authority, to be established in the Medical Cannabis Regulation
17and Safety Act Fund. Moneys in the licensing authority fee
18 accounts shall be used, upon appropriation of the Legislature, by
19the designated licensing authority for the administration of this
20chapter.

21(e) The fees established by licensing authorities pursuant to this
22chapter shall be in addition to, and shall not limit, any fees or taxes
23imposed by a city, county, or city and county in which the licensee
24operates.

25

begin deleteSEC. 29.end delete
26
begin insertSEC. 31.end insert  

Section 19351 of the Business and Professions Code
27 is amended to read:

28

19351.  

(a) The Medical Cannabis Regulation and Safety Act
29Fund is hereby established within the State Treasury. Moneys in
30the fund shall be available upon appropriation by the Legislature.
31Notwithstanding Section 16305.7 of the Government Code, the
32fund shall include any interest and dividends earned on the moneys
33in the fund.

34(b) (1) Funds for the establishment and support of the regulatory
35activities pursuant to this chapter shall be advanced as a General
36Fund or special fund loan, and shall be repaid by the initial
37proceeds from fees collected pursuant to this chapter or any rule
38or regulation adopted pursuant to this chapter, by January 1, 2022.
39Should the initial proceeds from fees not be sufficient to repay the
40loan, moneys from the Medical Cannabis Fines and Penalties
P44   1Account shall be made available to the bureau, by appropriation
2of the Legislature, to repay the loan.

3(2) Funds advanced pursuant to this subdivision shall be
4appropriated to the bureau, which shall distribute the moneys to
5the appropriate licensing authorities, as necessary to implement
6the provisions of this chapter.

7(3) The Director of Finance may provide an initial operating
8loan from the General Fund to the Medical Cannabis Regulation
9and Safety Act Fund that does not exceed ten million dollars
10($10,000,000).

11(c) Except as otherwise provided, all moneys collected pursuant
12to this chapter as a result of fines or penalties imposed under this
13chapter shall be deposited directly into the Medical Cannabis Fines
14and Penalties Account, which is hereby established within the
15fund, and shall be available, upon appropriation by the Legislature
16to the bureau, for the purposes of funding the enforcement grant
17program pursuant to subdivision (d).

18(d) (1) The bureau shall establish a grant program to allocate
19moneys from the Medical Cannabis Fines and Penalties Account
20to state and local entities for the following purposes:

21(A) To assist with medical cannabis regulation and the
22enforcement of this chapter and other state and local laws
23applicable to cannabis activities.

24(B) For allocation to state and local agencies and law
25enforcement to remedy the environmental impacts of cannabis
26cultivation.

27(2) The costs of the grant program under this subdivision shall,
28upon appropriation by the Legislature, be paid for with moneys in
29the Medical Cannabis Fines and Penalties Account.

30(3) The grant program established by this subdivision shall only
31be implemented after the loan specified in subdivision (b) is repaid.

32

begin deleteSEC. 30.end delete
33
begin insertSEC. 32.end insert  

Section 19360 of the Business and Professions Code
34 is amended to read:

35

19360.  

(a) A person engaging in commercial cannabis activity
36without a license and associated unique identifiers required by this
37chapter shall be subject to civil penalties of up to twice the amount
38of the license fee for each violation, and the licensing authority,
39state or local authority, or court may order the destruction of
40medical cannabis associated with that violation. Each day of
P45   1operation shall constitute a separate violation of this section. All
2civil penalties imposed and collected pursuant to this section shall
3 be deposited into the Medical Cannabis Fines and Penalties
4Account, established pursuant to Section 19351.

5(b) If an action for civil penalties is brought against a licensee
6pursuant to this chapter by the Attorney General, the penalty
7collected shall be deposited into the Medical Cannabis Fines and
8Penalties Account. If the action is brought by a district attorney
9or county counsel, the penalty collected shall be paid to the
10treasurer of the county in which the judgment was entered. If the
11action is brought by a city attorney or city prosecutor, the penalty
12collected shall be paid to the treasurer of the city or city and county
13in which the judgment was entered. If the action is brought by a
14city attorney and is adjudicated in a superior court located in the
15unincorporated area or another city in the same county, the penalty
16shall be paid one-half to the treasurer of the city in which the
17complaining attorney has jurisdiction and one-half to the treasurer
18of the county in which the judgment is entered.

19(c) Notwithstanding subdivision (a), criminal penalties shall
20continue to apply to an unlicensed person or entity engaging in
21commercial cannabis activity in violation of this chapter, including,
22but not limited to, those individuals covered under Section 11362.7
23of the Health and Safety Code.

24

begin deleteSEC. 31.end delete
25
begin insertSEC. 33.end insert  

Section 12025 of the Fish and Game Code is amended
26to read:

27

12025.  

(a) In addition to any penalties imposed by any other
28law, a person found to have violated the code sections described
29in paragraphs (1) to (11), inclusive, in connection with the
30production or cultivation of a controlled substance on land under
31the management of the Department of Parks and Recreation, the
32Department of Fish and Wildlife, the Department of Forestry and
33Fire Protection, the State Lands Commission, a regional park
34district, the United States Forest Service, or the United States
35Bureau of Land Management, or within the respective ownership
36of a timberland production zone, as defined in Chapter 6.7
37(commencing with Section 51100) of Part 1 of Division 1 of Title
385 of the Government Code, of more than 50,000 acres, or while
39trespassing on other public or private land in connection with the
P46   1production or cultivation of a controlled substance, shall be liable
2for a civil penalty as follows:

3(1) A person who violates Section 1602 in connection with the
4production or cultivation of a controlled substance is subject to a
5civil penalty of not more than ten thousand dollars ($10,000) for
6each violation.

7(2) A person who violates Section 5650 in connection with the
8production or cultivation of a controlled substance is subject to a
9civil penalty of not more than forty thousand dollars ($40,000) for
10each violation.

11(3) A person who violates Section 5652 in connection with the
12production or cultivation of a controlled substance is subject to a
13civil penalty of not more than forty thousand dollars ($40,000) for
14each violation.

15(4) A person who violates subdivision (a) of Section 374.3 of
16the Penal Code in connection with the production or cultivation
17of a controlled substance is subject to a civil penalty of not more
18than forty thousand dollars ($40,000) for each violation.

19(5) A person who violates paragraph (1) of subdivision (h) of
20Section 374.3 of the Penal Code in connection with the production
21or cultivation of a controlled substance is subject to a civil penalty
22of not more than forty thousand dollars ($40,000) for each
23violation.

24(6) A person who violates subdivision (b) of Section 374.8 of
25the Penal Code in connection with the production or cultivation
26of a controlled substance is subject to a civil penalty of not more
27than forty thousand dollars ($40,000) for each violation.

28(7) A person who violates Section 384a of the Penal Code in
29connection with the production or cultivation of a controlled
30substance is subject to a civil penalty of not more than ten thousand
31dollars ($10,000) for each violation.

32(8) A person who violates subdivision (a) of Section 4571 of
33the Public Resources Code in connection with the production or
34cultivation of a controlled substance is subject to a civil penalty
35of not more than ten thousand dollars ($10,000) for each violation.

36(9) A person who violates Section 4581 of the Public Resources
37Code in connection with the production or cultivation of a
38controlled substance is subject to a civil penalty of not more than
39ten thousand dollars ($10,000) for each violation.

P47   1(10) A person who violates Section 2000 in connection with
2the production or cultivation of a controlled substance is subject
3to a civil penalty of not more than ten thousand dollars ($10,000)
4for each violation.

5(11) A person who violates Section 2002 in connection with
6the production or cultivation of a controlled substance is subject
7to a civil penalty of not more than ten thousand dollars ($10,000)
8for each violation.

9(b) (1) In addition to any penalties imposed by any other law,
10a person found to have violated the code sections described in this
11subdivision in connection with the production or cultivation of a
12controlled substance on land that the person owns, leases, or
13otherwise uses or occupies with the consent of the landowner shall
14be liable for a civil penalty as follows:

15(A) A person who violates Section 1602 in connection with the
16production or cultivation of a controlled substance is subject to a
17civil penalty of not more than eight thousand dollars ($8,000) for
18each violation.

19(B) A person who violates Section 5650 in connection with the
20production or cultivation of a controlled substance is subject to a
21civil penalty of not more than twenty thousand dollars ($20,000)
22for each violation.

23(C) A person who violates Section 5652 in connection with the
24production or cultivation of a controlled substance is subject to a
25civil penalty of not more than twenty thousand dollars ($20,000)
26for each violation.

27(D) A person who violates subdivision (a) of Section 374.3 of
28the Penal Code in connection with the production or cultivation
29of a controlled substance is subject to a civil penalty of not more
30than twenty thousand dollars ($20,000) for each violation.

31(E) A person who violates paragraph (1) of subdivision (h) of
32Section 374.3 of the Penal Code in connection with the production
33or cultivation of a controlled substance is subject to a civil penalty
34of not more than twenty thousand dollars ($20,000) for each
35violation.

36(F) A person who violates subdivision (b) of Section 374.8 of
37the Penal Code in connection with the production or cultivation
38of a controlled substance is subject to a civil penalty of not more
39than twenty thousand dollars ($20,000) for each violation.

P48   1(G) A person who violates Section 384a of the Penal Code in
2connection with the production or cultivation of a controlled
3substance is subject to a civil penalty of not more than ten thousand
4dollars ($10,000) for each violation.

5(H) A person who violates subdivision (a) of Section 4571 of
6the Public Resources Code in connection with the production or
7cultivation of a controlled substance is subject to a civil penalty
8of not more than eight thousand dollars ($8,000) for each violation.

9(I) A person who violates Section 4581 of the Public Resources
10Code in connection with the production or cultivation of a
11controlled substance is subject to a civil penalty of not more than
12eight thousand dollars ($8,000) for each violation.

13(J) A person who violates Section 2000 in connection with the
14production or cultivation of a controlled substance is subject to a
15civil penalty of not more than eight thousand dollars ($8,000) for
16each violation.

17(K) A person who violates Section 2002 in connection with the
18production or cultivation of a controlled substance is subject to a
19civil penalty of not more than eight thousand dollars ($8,000) for
20each violation.

21(2) Each day that a violation of a code section described in this
22subdivision occurs or continues to occur shall constitute a separate
23violation.

24(c) The civil penalty imposed for each separate violation
25pursuant to this section is in addition to any other civil penalty
26imposed for another violation of this section, or any violation of
27any other law.

28(d) All civil penalties imposed or collected by a court for a
29separate violation pursuant to this section shall not be considered
30to be fines or forfeitures, as described in Section 13003, and shall
31be apportioned in the following manner:

32(1) Thirty percent shall be distributed to the county in which
33the violation was committed pursuant to Section 13003. The county
34board of supervisors shall first use any revenues from those
35penalties to reimburse the costs incurred by the district attorney
36or city attorney in investigating and prosecuting the violation.

37(2) (A) Thirty percent shall be distributed to the investigating
38agency to be used to reimburse the cost of any investigation directly
39related to the violations described in this section.

P49   1(B) If the department receives reimbursement pursuant to this
2paragraph for activities funded pursuant to subdivision (f) of
3Section 4629.6 of the Public Resources Code, the reimbursement
4funds shall be deposited into the Timber Regulation and Forest
5Restoration Fund, created by Section 4629.3 of the Public
6Resources Code, if there is an unpaid balance for a loan authorized
7by subdivision (f) of Section 4629.6 of the Public Resources Code.

8(3) Forty percent shall be deposited into the Timber Regulation
9and Forest Restoration Fund, created by Section 4629.3 of the
10Public Resources Code, and used for grants authorized pursuant
11to Section 4629.6 of the Public Resources Code that improve forest
12health by remediating former cannabis growing operations.

13(e) Civil penalties authorized pursuant to this section may be
14imposed administratively by the department if all of the following
15occur:

16(1) The chief deputy director or law enforcement division
17assistant chief in charge of cannabis-related enforcement issues a
18complaint to any person or entity on which an administrative civil
19penalty may be imposed pursuant to this section. The complaint
20shall allege the act or failure to act that constitutes a violation, any
21facts related to natural resources impacts, the provision of law
22authorizing the civil penalty to be imposed, and the proposed
23penalty amount.

24(2) The complaint and order is served by personal notice or
25certified mail and informs the party served that the party may
26request a hearing not later than 20 days from the date of service.
27If a hearing is requested, it shall be scheduled before the director
28or his or her designee, which designee shall not be the chief deputy
29or assistant chief issuing the complaint and order. A request for a
30hearing shall contain a brief statement of the material facts the
31party claims support his or her contention that no administrative
32penalty should be imposed or that an administrative penalty of a
33lesser amount is warranted. A party served with a complaint
34pursuant to this subdivision waives his or her right to a hearing if
35a hearing is not requested within 20 days of service of the
36complaint, in which case the order imposing the administrative
37penalty shall become final.

38(3) The director, or his or her designee, shall control the nature
39and order of hearing proceedings. Hearings shall be informal in
40nature, and need not be conducted according to the technical rules
P50   1relating to evidence. The director or his or her designee shall issue
2a final order within 45 days of the close of the hearing. A copy of
3the final order shall be served by certified mail upon the party
4served with the complaint.

5(4) A party may obtain review of the final order by filing a
6petition for a writ of mandate with the superior court within 30
7days of the date of service of the final order. The administrative
8penalty shall be due and payable to the department within 60 days
9after the time to seek judicial review has expired, or, where the
10party did not request a hearing of the order, within 20 days after
11the order imposing an administrative penalty becomes final.

12(5) The department may adopt regulations to implement this
13subdivision.

14(f) All administrative penalties imposed or collected by the
15department for a separate violation pursuant to this section shall
16not be considered to be fines or forfeitures, as described in Section
1713003, and shall be deposited into the Timber Regulation and
18Forest Restoration Fund, created by Section 4629.3 of the Public
19Resources Code, to repay any unpaid balance of a loan authorized
20by subdivision (f) of Section 4629.6 of the Public Resources Code.
21Any remaining funds from administrative penalties collected
22pursuant to this section shall be apportioned in the following
23manner:

24(1) Fifty percent shall be deposited into the Timber Regulation
25and Forest Restoration Fund for grants authorized pursuant to
26subdivision (h) of Section 4629.6 of the Public Resources Code,
27with priority given to grants that improve forest health by
28remediating former cannabis growing operations.

29(2) Fifty percent shall be deposited into the Fish and Game
30Preservation Fund.

31(g) Any civil penalty imposed pursuant to this section for the
32violation of an offense described in paragraph (4), (5), or (6) of
33subdivision (a) or subparagraph (D), (E), or (F) of paragraph (1)
34of subdivision (b) for which the person was convicted shall be
35offset by the amount of any restitution ordered by a criminal court.

36(h) For purposes of this section, “controlled substance” has the
37same meaning as defined in Section 11007 of the Health and Safety
38Code.

39(i) This section does not apply to any activity in full compliance
40with the Medical Cannabis Regulation and Safety Act (Chapter
P51   13.5 (commencing with Section 19300) of Division 8 of the Business
2and Professions Code).

3

begin deleteSEC. 32.end delete
4
begin insertSEC. 34.end insert  

Section 12029 of the Fish and Game Code is amended
5to read:

6

12029.  

(a) The Legislature finds and declares all of the
7following:

8(1) The environmental impacts associated with cannabis
9cultivation have increased, and unlawful water diversions for
10cannabis irrigation have a detrimental effect on fish and wildlife
11and their habitat, which are held in trust by the state for the benefit
12of the people of the state.

13(2) The remediation of existing cannabis cultivation sites is
14often complex and the permitting of these sites requires greater
15department staff time and personnel expenditures. The potential
16for cannabis cultivation sites to significantly impact the state’s fish
17and wildlife resources requires immediate action on the part of the
18department’s lake and streambed alteration permitting staff.

19(b) In order to address unlawful water diversions and other
20violations of the Fish and Game Code associated with cannabis
21cultivation, the department shall establish the watershed
22enforcement program to facilitate the investigation, enforcement,
23and prosecution of these offenses.

24(c) The department, in coordination with the State Water
25Resources Control Board, shall establish a permanent multiagency
26task force to address the environmental impacts of cannabis
27cultivation. The multiagency task force, to the extent feasible and
28subject to available resources, shall expand its enforcement efforts
29on a statewide level to ensure the reduction of adverse impacts of
30cannabis cultivation on fish and wildlife and their habitats
31throughout the state.

32(d) In order to facilitate the remediation and permitting of
33 cannabis cultivation sites, the department shall adopt regulations
34to enhance the fees on medical-cannabis-cultivation-related
35activities subject to Section 1602 for cannabis cultivation sites that
36require remediation. The fee schedule established pursuant to this
37subdivision shall not exceed the fee limits in Section 1609.

38begin insert

begin insertSEC. 35.end insert  

end insert

begin insertSection 52334 of the end insertbegin insertFood and Agricultural Codeend insertbegin insert is
39amended to read:end insert

P52   1

52334.  

begin insert(a)end insertbegin insertend insertNotwithstanding any other law, on and after January
21, 2015, a city, county, or district, including a charter city or
3county, shall not adopt or enforce an ordinance that regulates
4plants, crops, or seeds without the consent of the secretary. An
5ordinance enacted before January 1, 2015, shall be considered part
6of the comprehensive program of the department and shall be
7enforceable.

begin insert

8
(b) An ordinance that regulates cannabis or marijuana as
9defined in subdivision (f) of Section 19300.5 of the Business and
10Professions Code, or medical cannabis or medical marijuana, as
11 defined in subdivision (ag) of Section 19300.5 of the Business and
12Professions Code, shall not require the consent of the secretary.

end insert
13

begin deleteSEC. 33.end delete
14
begin insertSEC. 36.end insert  

Section 11352 of the Health and Safety Code is
15amended to read:

16

11352.  

(a) Except as otherwise provided in this division, every
17person who transports, imports into this state, sells, furnishes,
18administers, or gives away, or offers to transport, import into this
19state, sell, furnish, administer, or give away, or attempts to import
20into this state or transport (1) any controlled substance specified
21in subdivision (b), (c), or (e), or paragraph (1) of subdivision (f)
22of Section 11054, specified in paragraph (14), (15), or (20) of
23subdivision (d) of Section 11054, or specified in subdivision (b)
24or (c) of Section 11055, or specified in subdivision (h) of Section
2511056, or (2) any controlled substance classified in Schedule III,
26IV, or V which is a narcotic drug, unless upon the written
27prescription of a physician, dentist, podiatrist, or veterinarian
28licensed to practice in this state, shall be punished by imprisonment
29pursuant to subdivision (h) of Section 1170 of the Penal Code for
30three, four, or five years.

31(b) Notwithstanding the penalty provisions of subdivision (a),
32any person who transports a controlled substances specified in
33subdivision (a) within this state from one county to another
34noncontiguous county shall be punished by imprisonment pursuant
35to subdivision (h) of Section 1170 of the Penal Code for three, six,
36or nine years.

37(c) For purposes of this section, “transports” means to transport
38for sale.

39(d) This section does not preclude or limit the prosecution of
40an individual for aiding and abetting the commission of, or
P53   1conspiring to commit, or acting as an accessory to, any act
2prohibited by this section.

3(e) This section does not apply to commercial cannabis activity
4engaged in by a person or entity licensed pursuant to the Medical
5Cannabis Regulation and Safety Act (Chapter 3.5 (commencing
6with Section 19300) of Division 8 of the Business and Professions
7Code) and who is in full compliance with that act and all applicable
8local ordinances.

9

begin deleteSEC. 34.end delete
10
begin insertSEC. 37.end insert  

Section 11362.765 of the Health and Safety Code is
11amended to read:

12

11362.765.  

(a) Subject to the requirements of this article, the
13individuals specified in subdivision (b) shall not be subject, on
14that sole basis, to criminal liability under Section 11357, 11358,
1511359, 11360, 11366, 11366.5, or 11570. However, nothing in
16this section shall authorize the individual to smoke or otherwise
17consume cannabis unless otherwise authorized by this article, nor
18shall anything in this section authorize any individual or group to
19cultivate or distribute cannabis in any manner other than as set
20forth in this article, the Medical Cannabis Regulation and Safety
21Act (Chapter 3.5 (commencing with Section 19300) of Division
228 of the Business and Professions Code), or as described in the
23 Compassionate Use Act of 1996.

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

25(1) A qualified patient or a person with an identification card
26who transports or processes cannabis for his or her own personal
27medical use.

28(2) A designated primary caregiver who transports, processes,
29administers, delivers, or gives away cannabis for medical purposes,
30in amounts not exceeding those established in subdivision (a) of
31Section 11362.77, only to the qualified patient of the primary
32caregiver, or to the person with an identification card who has
33designated the individual as a primary caregiver.

34(3) An individual who provides assistance to a qualified patient
35 or a person with an identification card, or his or her designated
36primary caregiver, in administering medical cannabis to the
37qualified patient or person or acquiring the skills necessary to
38cultivate or administer cannabis for medical purposes to the
39qualified patient or person.

P54   1(c) A primary caregiver who receives compensation for actual
2expenses, including reasonable compensation incurred for services
3provided to an eligible qualified patient or person with an
4identification card to enable that person to use cannabis under this
5article, or for payment for out-of-pocket expenses incurred in
6providing those services, or both, shall not, on the sole basis of
7that fact, be subject to prosecution or punishment under Section
811359 or 11360.

9

begin deleteSEC. 35.end delete
10
begin insertSEC. 38.end insert  

Section 11362.775 of the Health and Safety Code is
11amended to read:

12

11362.775.  

(a) Subject to subdivision (b), qualified patients,
13persons with valid identification cards, and the designated primary
14caregivers of qualified patients and persons with identification
15cards, who associate within the State of California in order
16collectively or cooperatively to cultivate cannabis for medical
17purposes, shall not solely on the basis of that fact be subject to
18state criminal sanctions under Section 11357, 11358, 11359, 11360,
1911366, 11366.5, or 11570. A collective or cooperative that operates
20pursuant to this section may operate for profit, not for profit, or
21any combination thereof.

begin insert

22
(b) (1) It is unlawful to display an advertisement for qualified
23patients, persons with valid identification cards, and the designated
24primary caregivers of qualified patients and persons with
25identification cards, who associate within the state in order
26collectively or cooperatively to cultivate cannabis for medical
27purposes, without first verifying a valid Board of Equalization
28issued seller’s permit.

end insert
begin insert

29
(2) A violation of this subdivision is an infraction, punishable
30by a fine of five hundred dollars ($500).

end insert
begin insert

31
(3) For purposes of this section, “advertisement” means a
32notice, announcement or information in a public medium, including
33but not limited to, television, Internet Web site, billboard or printed
34publication, which promotes a location where medical cannabis
35is sold or dispensed or service that is involved in the delivery of
36medical cannabis.

end insert
begin delete

37(b)

end delete

38begin insert(c)end insert This section shall remain in effect only until one year after
39the Bureau of Medical Cannabis Regulation posts a notice on its
40Internet Web site that the licensing authorities have commenced
P55   1issuing licenses pursuant to the Medical Cannabis Regulation and
2Safety Act (Chapter 3.5 (commencing with Section 19300) of
3Division 8 of the Business and Professions Code), and is repealed
4upon that date.

5

begin deleteSEC. 36.end delete
6
begin insertSEC. 39.end insert  

Section 11362.777 of the Health and Safety Code is
7amended to read:

8

11362.777.  

(a) The Department of Food and Agriculture shall
9establish a Medical Cannabis Cultivation Program to be
10administered by the secretary and, except as specified in
11subdivision (c), shall administer this section as it pertains to the
12cultivation of medical cannabis. For purposes of this section and
13Chapter 3.5 (commencing with Section 19300) of Division 8 of
14the Business and Professions Code, medical cannabis is an
15agricultural product.

16(b) (1) A person or entity shall not cultivate medical cannabis
17without first obtaining both of the following:

18(A) A license, permit, or other entitlement, specifically
19permitting cultivation pursuant to these provisions, from the city,
20county, or city and county in which the cultivation will occur.

21(B) A state license issued by the department pursuant to this
22section.

23(2) A person or entity shall not submit an application for a state
24license pursuant to this section unless that person or entity has
25received a license, permit, or other entitlement, specifically
26permitting cultivation pursuant to these provisions, from the city,
27county, or city and county in which the cultivation will occur.

28(3) A person or entity shall not submit an application for a state
29license pursuant to this section if the proposed cultivation of
30cannabis will violate the provisions of a local ordinance or
31regulation, or if medical cannabis is prohibited by the city, county,
32or city and county in which the cultivation is proposed to occur,
33either expressly or otherwise under principles of permissive zoning.

34(c) (1) Except as otherwise specified in this subdivision, and
35without limiting any other local regulation, a city, county, or city
36and county, through its current or future land use regulations or
37ordinance, may issue or deny a permit to cultivate medical cannabis
38pursuant to this section. A city, county, or city and county may
39inspect the intended cultivation site for suitability before issuing
40a permit. After the city, county, or city and county has approved
P56   1a permit, the applicant shall apply for a state medical cannabis
2cultivation license from the department. A locally issued cultivation
3permit shall only become active upon licensing by the department
4and receiving final local approval. A person shall not cultivate
5medical cannabis before obtaining both a license or permit from
6the city, county, or city and county and a state medical cannabis
7cultivation license from the department.

8(2) A city, county, or city and county that issues or denies
9conditional licenses to cultivate medical cannabis pursuant to this
10section shall notify the department in a manner prescribed by the
11secretary.

12(3) A city, county, or city and county’s locally issued conditional
13permit requirements must be at least as stringent as the
14department’s state licensing requirements.

15(d) (1) The secretary may prescribe, adopt, and enforce
16regulations relating to the implementation, administration, and
17enforcement of this section, including, but not limited to, applicant
18requirements, collections, reporting, refunds, and appeals.

19(2) The secretary may prescribe, adopt, and enforce any
20emergency regulations as necessary to implement this section. An
21emergency regulation prescribed, adopted, or enforced pursuant
22to this section shall be adopted in accordance with Chapter 3.5
23(commencing with Section 11340) of Part 1 of Division 3 of Title
242 of the Government Code, and, for purposes of that chapter,
25including Section 11349.6 of the Government Code, the adoption
26of the regulation is an emergency and shall be considered by the
27Office of Administrative Law as necessary for the immediate
28preservation of the public peace, health and safety, and general
29welfare.

30(3) The secretary may enter into a cooperative agreement with
31a county agricultural commissioner to carry out the provisions of
32this section, including, but not limited to, administration,
33investigations, inspections, licensing and assistance pertaining to
34the cultivation of medical cannabis. Compensation under the
35cooperative agreement shall be paid from assessments and fees
36collected and deposited pursuant to this section and shall provide
37reimbursement to the county agricultural commissioner for
38associated costs.

39(e) (1) The department, in consultation with, but not limited
40to, the Bureau of Medical Cannabis Regulation, the State Water
P57   1Resources Control Board, and the Department of Fish and Wildlife,
2shall implement a unique identification program for medical
3cannabis. In implementing the program, the department shall
4consider issues, including, but not limited to, water use and
5environmental impacts. In implementing the program, the
6department shall ensure that:

7(A) Individual and cumulative effects of water diversion and
8discharge associated with cultivation do not affect the instream
9flows needed for fish spawning, migration, and rearing, and the
10flows needed to maintain natural flow variability.

11(B) Cultivation will not negatively impact springs, riparian
12wetlands, and aquatic habitats.

13(2) The department shall establish a program for the
14identification of permitted medical cannabis plants at a cultivation
15site during the cultivation period. The unique identifier shall be
16attached at the base of each plant. A unique identifier, such as, but
17not limited to, a zip tie, shall be issued for each medical cannabis
18plant.

19(A) Unique identifiers shall only be issued to those persons
20appropriately licensed by this section.

21(B) Information associated with the assigned unique identifier
22and licensee shall be included in the trace and track program
23specified in Section 19335 of the Business and Professions Code.

24(C) The department may charge a fee to cover the reasonable
25costs of issuing the unique identifier and monitoring, tracking, and
26inspecting each medical cannabis plant.

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
31licenses, permits, or other entitlements to cultivate medical
32 cannabis pursuant to this section shall notify the department in a
33manner prescribed by the secretary.

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

38(g) This section does not apply to a qualified patient cultivating
39cannabis pursuant to Section 11362.5 if the area he or she uses to
40cultivate cannabis does not exceed 100 square feet and he or she
P58   1cultivates cannabis for his or her personal medical use and does
2not sell, distribute, donate, or provide cannabis to any other person
3or entity. This section does not apply to a primary caregiver
4cultivating cannabis pursuant to Section 11362.5 if the area he or
5she uses to cultivate cannabis does not exceed 500 square feet and
6he or she cultivates cannabis exclusively for the personal medical
7use of no more than five specified qualified patients for whom he
8or she is the primary caregiver within the meaning of Section
911362.7 and does not receive remuneration for these activities,
10except for compensation provided in full compliance with
11subdivision (c) of Section 11362.765. For purposes of this section,
12the area used to cultivate cannabis shall be measured by the
13aggregate area of vegetative growth of live cannabis plants on the
14premises. Exemption from the requirements of this section does
15not limit or prevent a city, county, or city and county from
16exercising its police authority under Section 7 of Article XI of the
17California Constitution.

18

begin deleteSEC. 37.end delete
19
begin insertSEC. 40.end insert  

Section 11379 of the Health and Safety Code is
20amended to read:

21

11379.  

(a) Except as otherwise provided in subdivision (b)
22and in Article 7 (commencing with Section 4110) of Chapter 9 of
23Division 2 of the Business and Professions Code, every person
24who transports, imports into this state, sells, furnishes, administers,
25or gives away, or offers to transport, import into this state, sell,
26furnish, administer, or give away, or attempts to import into this
27state or transport any controlled substance which is (1) classified
28in Schedule III, IV, or V and which is not a narcotic drug, except
29subdivision (g) of Section 11056, (2) specified in subdivision (d)
30of Section 11054, except paragraphs (13), (14), (15), (20), (21),
31(22), and (23) of subdivision (d), (3) specified in paragraph (11)
32of subdivision (c) of Section 11056, (4) specified in paragraph (2)
33or (3) of subdivision (f) of Section 11054, or (5) specified in
34subdivision (d) or (e), except paragraph (3) of subdivision (e), or
35specified in subparagraph (A) of paragraph (1) of subdivision (f),
36of Section 11055, unless upon the prescription of a physician,
37dentist, podiatrist, or veterinarian, licensed to practice in this state,
38shall be punished by imprisonment pursuant to subdivision (h) of
39Section 1170 of the Penal Code for a period of two, three, or four
40years.

P59   1(b) Notwithstanding the penalty provisions of subdivision (a),
2any person who transports any controlled substances specified in
3subdivision (a) within this state from one county to another
4noncontiguous county shall be punished by imprisonment pursuant
5to subdivision (h) of Section 1170 of the Penal Code for three, six,
6or nine years.

7(c) For purposes of this section, “transports” means to transport
8for sale.

9(d) Nothing in this section is intended to preclude or limit
10prosecution under an aiding and abetting theory, accessory theory,
11or a conspiracy theory.

12(e) This section does not apply to commercial cannabis activity
13engaged in by a person or entity licensed pursuant to the Medical
14Cannabis Regulation and Safety Act (Chapter 3.5 (commencing
15with Section 19300) of Division 8 of the Business and Professions
16Code) and who is in full compliance with that act and all applicable
17local ordinances.

18begin insert

begin insertSEC. 41.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant
19to Section 6 of Article XIII B of the California Constitution because
20the only costs that may be incurred by a local agency or school
21district will be incurred because this act creates a new crime or
22infraction, eliminates a crime or infraction, or changes the penalty
23for a crime or infraction, within the meaning of Section 17556 of
24the Government Code, or changes the definition of a crime within
25the meaning of Section 6 of Article XIII B of the California
26Constitution.

end insert


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