BILL ANALYSIS Ó
AB 1575
Page 1
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 1575
(Bonta) - As Amended April 4, 2016
NOTE: This bill is doubled-referred, and if passed by this
Committee, it will be referred to the Banking and Finance
Committee.
SUBJECT: Medical cannabis.
SUMMARY: Makes a number of changes to the Medical Marijuana
Regulation and Safety Act (Act) including: exempting a
cultivator from sending medical cannabis to a distributor for
inspection if it is to be used, sold or provided to another
manufacture for further manufacturing; requires the Bureau of
Medical Cannabis Regulation (Bureau) to specify the manner in
which medical cannabis meant for wholesale purposes is required
to be packaged and sealed prior to transport, testing, quality
assurance, quality control testing, or distribution; specifies
that licensees with a nursery license may transport live
immature plants; requires dispensaries to require all medical
cannabis used for specified purposes to be stored out of reach
of any individual who is not employed by the dispensary;
requires the Bureau to establish regulations regarding delivery
of medical cannabis by a dispensary; specifies that fees
established by a licensing entity shall not limit any fees of
taxes imposed by a local municipality; requires a licensed
testing laboratory to analyze samples in the final form of
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consumption using a valid methodology; specifies that it is not
a violation of state law or local ordinance or regulation for a
business or research institution with state authorization to
engage in the research of medical cannabis used for the medical
purposes; specifies that it is not a violation of state law for
certain licensees to sell medical cannabis under eight ounces;
provides that activities that are in full compliance with the
Medical Cannabis Regulation and Safety Act (Act) are not subject
to civil penalties as specified; provides that an ordinance that
regulates cannabis or medical cannabis shall not require the
consent of the Secretary of the California Department of Food
and Agriculture (CDFA); specifies that a collective or
cooperative may operate on a for-profit basis or not-for-profit
basis; declares that it is unlawful to display an advertisement
for qualified patients or caregivers without first verifying a
valid Board of Equalization (BOE) seller's permit; specifies
that no individual or group may cultivate or distribute cannabis
other than what is specified in the Act or the Compassionate Use
Act (CUA); exempts any commercial cannabis activity by a holder
of a state license who complies with the Act; and makes several
non-substantive changes.
EXISTING LAW:
1)Prohibits the possession, possession with intent to sell,
cultivation, sale, transportation, importation, or furnishing
of marijuana, except as otherwise provided by law. (Health
and Safety Code (HSC) §§ 11357, 11358, 11359, and 11360)
2)Prohibits prosecution of a patient or a patient's primary
caregiver, under the CUA, an initiative measure, for
possessing or cultivating marijuana for personal medical
purposes of the patient upon the written or oral
recommendation or approval of a physician. (HSC § 11362.5)
3)Provides that qualified patients, persons with valid
identification cards, and their designated primary caregivers
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who associate in order to collectively or cooperatively
cultivate marijuana, are not subject to criminal liability
solely on that basis, until one year after the Bureau begins
issuing licenses under the ACT. (HSC § 11362.775)
4)Enacts the Act, which provides for the state licensure and
regulation of commercial cannabis activities, including
cultivation, possession, manufacture, processing, storing,
laboratory testing, labeling, transporting, distribution, and
sale of medical cannabis or medical cannabis products.
(Business and Professions Code (BPC) § 19300 et seq.)
5)Establishes the Bureau within the Department of Consumer
Affairs (DCA), and requires the Bureau, the California
Department of Public Health (CDPH), and the CDFA to administer
the Act and promulgate regulations for implementation of the
act. (BPC § 19300 et seq.)
6)Vests in the DCA the sole authority to create, issue, renew,
discipline, suspend, or revoke licenses for medical marijuana
activities, including licenses for dispensaries, distributors,
and transporters. Prohibits a licensee from holding more than
one license except as specified. (BPC §§ 19302.1, 19328)
7)Allows the Bureau to convene an advisory committee to advise
the Bureau and licensing authorities on the development of
standards and regulations, including best practices and
guidelines to ensure qualified patients have adequate access
to medical marijuana and medical marijuana products. (BPC §
19306)
8)Provides that the actions of a licensee permitted pursuant to
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both a state license and a license or permit issued by the
local jurisdiction following the requirements of the
applicable local ordinances, and conducted in accordance with
the Act are not unlawful under state law. (BPC § 19317)
9)Prohibits a person from engaging in commercial cannabis
activity without possessing both a state license and a local
permit or other authorization upon the date of implementation
of regulations by the licensing authority. (BPC § 19320)
10)Requires an applicant for a state license to, among other
things, submit fingerprints to the Department of Justice, and
provide documentation, issued by the local jurisdiction,
certifying that the applicant is in compliance with all local
ordinances and regulations; evidence of the legal right to
occupy the proposed location; for applicants with 20 or more
employees, provide a statement that the applicant will enter
into, or already has entered into, a labor peace agreement; a
seller's permit number; and other specified information. (BPC
§ 19322)
11)Requires applicants seeking licensure to cultivate,
distribute, or manufacture medical cannabis, to include a
detailed description of the applicant's operating procedures
for all of the following as required by the licensing
authority: 1) cultivation; 2) extraction and infusion methods;
3) transportation procedures; 4) inventory procedures; and 5)
quality control procedures. (BPC § 19322)
12)Requires the Bureau to deny an application if the applicant
or the premises do not qualify for licensure or fail to comply
with the Act. (BPC § 19323)
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13)Allows licensing authorities to take disciplinary action
against a licensee for any violation of any provision in this
bill, and requires a licensing authority to inform the Bureau
upon suspension or revocation of a license. (BPC §§ 19313,
19313.5)
14)Provides that nothing shall be interpreted to supersede or
limit existing local authority for law enforcement activity,
enforcement of local zoning requirements or local ordinances,
or enforcement of local permit or licensing requirements.
(BPC § 19315)
15)Requires the CDPH to administer the provisions of the Act
related to the manufacturing and testing of medical cannabis
and to promulgate regulations governing the licensing of
manufacturers and testing laboratories. Requires the CDPH to
develop standards for the production and labeling of all
edible medical cannabis products. (BPC §§ 19332, 19341)
16)Requires all licensed cultivators and manufacturers to
package all medical cannabis and medical cannabis products in
tamper-evident packaging and to use a unique identifier to
identify and track the product, and requires the product to be
labeled as specified. (BPC § 19326)
17)Requires all licensees holding cultivation or manufacturing
licensees to send all medical cannabis and medical cannabis
products to a distributor for quality assurance and inspection
by the distribution licensee and for batch testing by a
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testing licensee prior to distribution to a dispensary. (BPC
§ 19326)
18)Requires the CDFA to administer the provisions of the Act
related to the cultivation of medical cannabis; to create,
issue, and suspend or revoke cultivation licenses for
violations of the Act; and to promulgate regulations governing
the licensing of indoor and outdoor cultivation sites. (BPC §
19302.1, 19332)
19)Requires the CDFA, in consultation with the Bureau, to
establish a track and trace program for reporting the movement
of medical marijuana items throughout the distribution chain
that use a unique identifier and secure packaging, and is
capable of providing specified information, including the
licensee receiving the product, the transaction date, and the
cultivator from which the product originates. (BPC § 19335)
20)Requires the CDFA to create an electronic database containing
the electronic shipping manifests which shall include the
quantity, or weight, and variety of products shipped and
received; estimated and actual times of departure and arrival;
and license number and unique identifiers issued by the
licensing authority for all licensees involved in the shipping
process. (BPC § 19335)
21)Requires the Bureau to establish minimum security
requirements for the commercial transportation and delivery of
medical cannabis and products. (BPC § 19334)
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22)Authorizes a county to impose a tax on the privilege of
cultivating, dispensing, producing, processing, preparing,
storing, providing, donating, selling, or distributing medical
cannabis or medical cannabis products by a licensee operating
pursuant to the Act, as specified. (BPC § 19348)
23)Provides for a General Fund or special fund loan, including
up to $10 million from the General Fund, to the Bureau to
support the initial regulatory activities authorized by Act.
(BPC § 19351)
24)Requires the Bureau to establish a grant program to fund
activities by state and local law enforcement to remedy the
environmental effects of cannabis cultivation, payable from
fines and penalties charged pursuant to the Act after all
outstanding loans for the program are repaid. (BPC § 19351)
25)Directs the BOE to adopt a system, in consultation with the
CDFA, to report the movement of commercial cannabis and
cannabis products throughout the distribution chain, which
must not duplicate CDFA's track and trace program. (Revenue
and Taxation Code § 31020)
26)Requires, beginning March 1, 2023, and on or before March 1
of each following year, each licensing authority to prepare
and submit to the Legislature an annual report on the
authority's activities and post it on its Internet Web site,
as specified. (BPC § 19353)
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27)By January 1, 2017, requires the Division of Occupational
Safety and Health to convene an advisory committee to evaluate
whether there is a need to develop industry-specific
regulations related to the activities of licensed facilities.
(Labor Code § 147.5)
THIS BILL:
1)Renames the "Medical Marijuana Cannabis Regulation and Safety
Act" as the "Medical Cannabis Regulation and Safety Act."
2)Defines "cultivation site" as a facility where medical
cannabis is planted, grown, harvested, dried, cured, graded,
or trimmed, or that does all or any combination of those
activities, that is owned and operated by a person who holds a
valid state license and a valid local license, permit, or
other authorization.
3)Defines "cultivator" as a person that conducts the planting,
growing, harvesting, drying, curing, grading, or trimming of
medical cannabis and that holds both a valid state license and
a valid local license, permit, or other authorization.
4)Amends the definition of "dispensary" to include a commercial
facility with a fixed location, whether or not there is direct
access by customers, where cannabis or medical cannabis
products are offered, either individually or in any
combination, for retail sale, including an establishment that
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delivers, unless expressly prohibited by local ordinance,
medical cannabis and medical cannabis products as part of a
retail sale.
5)Amends the definition of "distributor" as a person engaged in
the business of purchasing medical cannabis from a licensed
cultivator, or medical cannabis products from a licensed
manufacturer, for sale to a licensed dispensary and who holds
a valid state license pursuant to this chapter and a valid
local license, permit, or other authorization.
6)Defines "licensee" as a person issued a state license under
this chapter to engage in commercial cannabis activity.
7)Defines "live plants" means living medical cannabis flowers
and plants, including seeds, immature plants, and vegetative
stage plants.
8)Defines "lot" as a batch, or a specifically identified portion
of a batch, having uniform character and quality within
specified limits. In the case of medical cannabis or a
medical cannabis product produced by a continuous process,
"lot" means a specifically identified amount produced in a
unit of time or a quantity in a manner that ensures uniform
character and quality within specified limits.
9)Defines "manufactured cannabis" or "manufactured marijuana"
means raw cannabis that has undergone a process whereby the
raw agricultural product has been transformed into a
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concentrate, an edible cannabis product, or a topical product.
10)Defines "topical product" as a product manufactured such that
its final stage is in the form of a topical drug, as defined
by the Center for Drug Evaluation and Research under the
federal Food and Drug Administration, and specifies that a
topical product is not considered a drug.
11)Defines "testing laboratory" as a facility, entity, or site
in the state that offers or performs tests of medical cannabis
or medical cannabis products and that is both of the
following:
a) Accredited by an accrediting body that is independent
from all other persons involved in the medical cannabis
industry in the state.
b) Registered with the CDPH.
12)Defines "transporter" as a person issued a state license by
the bureau to transport medical cannabis or medical cannabis
products in an amount above a threshold determined by the
bureau between facilities that have been issued a state
license pursuant to this chapter.
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13)Specifies that the State Department of Public Health may
create, issue, and suspend or revoke manufacturing and testing
licenses for a violation of this chapter.
14)Authorizes the advisory group to examine strategies, such as
the use of integrated point-of-sale systems with state track
and trace systems and other measures that will improve
financial monitoring of medical cannabis businesses.
15)Indicates that the Department of Business Oversight (DBO)
shall create an enhanced financial monitoring certification
for entities licensed pursuant to this chapter that further
enables those entities to comply with the federal banking
regulations under the federal Bank Secrecy Act. The DBO shall
consider including requirements to use electronic financial
monitoring that enables real-time sales inventory tracking and
other tools that allow a bank or credit union to readily
access information they are required to monitor under the
federal Bank Secrecy Act.
16)Authorizes the DBO may collect fees from applicants
requesting the enhanced financial monitoring certification in
an amount sufficient to fund the actual reasonable costs of
implementation, as specified.
17)Declares that it is not a violation of this chapter or any
other state law, for a business or research institution
engaged 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 legally obtain, pursuant to this chapter, small
amounts of medical cannabis or medical cannabis products, as
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determined by the Bureau but not to exceed eight ounces per
month, as necessary to conduct research and development
related to medical cannabis or medical cannabis products in a
city, county, or city and county that expressly authorizes
that activity by local ordinance.
18)Authorizes the bureau to promulgate regulations to establish
minimum qualifications for state authorization to conduct
research on medical cannabis or medical cannabis products and
all related protocols. The regulations shall include, but not
be limited to, the following:
a) The requirement for all medical cannabis and medical
cannabis products used for research purposes to be subject
to all requirements of the state's track and trace program
established pursuant to this chapter.
b) The requirement that all applicants pursuing state
authorization for research on medical cannabis or medical
cannabis products obtain permission to operate from the
local jurisdiction in which the applicant intends to
conduct the research. A person shall not conduct research
on medical cannabis or medical cannabis products without
approval from both the state and the local jurisdiction in
which the research is being conducted.
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c) The maximum amount of medical cannabis and medical
cannabis products that may be obtained per month for
research purposes. In no case shall a person approved to
conduct research on medical cannabis and medical cannabis
products obtain more than eight ounces per month for
research purposes.
19)Specifies that a cultivator is not required to send medical
cannabis to a distributor if the medical cannabis is to be
used, sold, or otherwise distributed by methods approved
pursuant to this chapter to a manufacturer for further
manufacturing.
20)Requires that upon receipt of medical cannabis or medical
cannabis product from a cultivator or a manufacturer, the
distributor shall first ensure a random sample of the medical
cannabis or medical cannabis product is tested by a testing
laboratory.
21)Authorizes the Bureau to promulgate regulations relating to
the amounts of each batch of medical cannabis or medical
cannabis product that a cultivator or manufacturer is required
to send to a distributor for inspection and a testing
laboratory for testing. The regulations shall focus on
reducing diversion, ensuring the quality of the product for
the health and safety of patients, and allowing for efficiency
in enforcement.
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22)Specifies that a business be registered with the BOE for tax
purposes.
23)Specifies that a Type 4 licensee may transport live immature
plants, subject to the tracking, security, and related
requirements, as specified.
24)Specifies that a dispensary may be one of the following:
a) "Storefront dispensary" for licensees who have a
dispensary with direct physical access for the public.
b) "Nonstorefront dispensary" for licensees who have a
dispensary that does not have a storefront with direct
physical access for the public.
c) "Special dispensary" for licensees who have no more than
three dispensary facilities.
25)Further specifies that any of the dispensaries listed above
may deliver in a city, county, or city and county that does
not expressly prohibit delivery by local ordinance.
26)Specifies that a "distributor," or "type 11 licensee," for
the distribution of medical cannabis and medical cannabis
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products from manufacturer to dispensary shall hold a Type 12,
or transporter, license and register each location where
product is stored for the purposes of distribution. A
distributor shall not hold a license in a cultivation,
manufacturing, dispensing, or testing license category and
shall not own, or have an ownership interest in, a facility
licensed in those categories other than a security interest,
lien, or encumbrance on property that is used by a licensee.
A distributor shall be bonded and insured at a minimum level
established by the licensing authority.
27)Specifies that a "transporter" or "type 12 licensee" for
transporters of medical cannabis or medical cannabis products
between licensees shall be bonded and insured at a minimum
level established by the licensing authority.
28)Authorizes the Bureau to establish both of the following:
a) Minimum security requirements for the commercial
transportation and delivery of medical cannabis and medical
cannabis products.
b) Advertising, marketing, signage, and other labeling
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requirements and restrictions, including a prohibition on
advertising, marketing, and other promotion of the medical
cannabis or medical cannabis products provided by a person
not in full compliance with this chapter.
29)Specifies that only generic food names may be used to
describe edible medical cannabis products, pursuant to
regulations promulgated by the CDPH.
30)Indicates that a person engaging in commercial cannabis
activity without a license and associated unique identifiers
required by this chapter shall be subject to civil penalties
of up to twice the amount of the license fee for each
violation, and the licensing authority, state or local
authority, or court may order the destruction of medical
cannabis associated with that violation. Each day of
operation shall constitute a separate violation of this
section. All civil penalties imposed and collected pursuant
to this section shall be deposited into the Medical Cannabis
Fines and Penalties Account.
31)Specifies if an action for civil penalties is brought against
a licensee by the Attorney General, the penalty collected
shall be deposited into the Medical Cannabis Fines and
Penalties Account.
32)Specifies that this section does not apply to commercial
cannabis activity engaged in by a person or entity licensed
pursuant to the Act and any person who is in full compliance
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with that act and all applicable local ordinances.
FISCAL EFFECT: Unknown. This bill has been keyed fiscal by the
Legislative Counsel.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, "In 1996, California was the first state in the
nation to allow the use of medical cannabis after voters
approved Proposition 215, the [CUA]. Since then, 22 other
states and the District of Columbia have passed laws allowing
for the medical or adult use of cannabis. In 2015, California
passed the [Act], the first comprehensive regulatory framework
for medical cannabis in the state's history.
AB 1575 is follow-up legislation to the [Act] in order to
strengthen its original intent and goals. The regulatory
framework balances local control with many of the needs of
existing medical cannabis businesses. The bill established a
licensing structure that prioritizes the protections of patient,
the public, and the environment, and local control. Based on
conversations with stakeholders, patients, and members of the
public, AB 1575 revises the [Act] to improve implementation of
the regulatory framework, and ease the transition for existing
operators, local governments, and the general public."
Background. The Compassionate Use Act of 1996 (CUA).
Proposition 215 was approved by California voters to exempt
certain patients and their primary caregivers from criminal
liability under state law for the possession and cultivation
of marijuana. Proposition 215 was enacted to "ensure that
seriously ill Californians have the right to obtain and use
marijuana for medical purposes where that medical use is
deemed appropriate and has been recommended by a physician who
has determined that the person's health would benefit from the
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use of marijuana," and to "ensure that patients and their
primary caregivers who obtain and use marijuana for medical
purposes upon the recommendation of a physician are not
subject to criminal prosecution or sanction."
The Medical Marijuana Program Act. SB 420 (Vasconcellos),
Chapter 875, Statutes of 2003, established the Medical Marijuana
Program Act (MMP). The MMP, among other things, required the
CDPH to establish and maintain a program for a statewide
identification card system. Medical marijuana identification
cards are intended to help law enforcement officers identify and
verify that cardholders are able to cultivate, possess, and
transport certain amounts of marijuana without being subject to
arrest under specific conditions. All counties participate in
the identification card program; however, participation by
patients and primary caregivers in the identification card
program is voluntary.
In 2008, the Attorney General issued guidelines to: 1) ensure
that marijuana grown for medical purposes remains secure and
does not find its way to non-patients or illicit markets, 2)
help law enforcement agencies perform their duties effectively
and in accordance with California law, and 3) help patients and
primary caregivers understand how they may cultivate, transport,
possess, and use medical marijuana under California law.
Since the passage of Proposition 215, a flood of medical
marijuana collectives and cooperatives have created a patchwork
of local regulations for these industries and with little
statewide involvement.
The Federal Controlled Substances Act. Despite the CUA and SB
420, marijuana is still illegal under federal law. Adopted in
1970, the Controlled Substances Act (CSA) established a federal
regulatory system designed to combat recreational drug abuse by
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making it unlawful to manufacture, distribute, dispense, or
possess any controlled substance. (Title 21 United States Code
Section (USC) 801, et seq.) Under California law, marijuana is
listed as a hallucinogenic substance in Schedule I of the
California Uniform Controlled Substances Act. Yet, the CUA
prohibits prosecution for obtaining, distributing, or using
marijuana for medical purposes. However, under the federal CSA,
it is unlawful for any person to manufacture, distribute,
dispense or possess a controlled substance, including marijuana,
whether or not it is for a medical purpose. As a result,
patients, caregivers, and dispensary operators, who engage in
activities relating to medical marijuana, may still vulnerable
to federal arrest and prosecution.
Congress has provided that states are free to regulate in the
area of controlled substances, including marijuana, provided
that state law does not positively conflict with the CSA.
(Title 21 USC Section 903.) Neither Proposition 215, nor the
MMP, conflicts with the CSA because medical marijuana use has
not been "legalized" medical marijuana in the state; instead,
California has tried to avoid this conflict by not pursuing the
state's powers to punish certain offenses when a physician has
recommended marijuana as a treatment for a serious medical
condition.
Center for Medicinal Cannabis Research. Health and Safety Code
section 11362.9 authorizes the creation of the Center for
Medical Cannabis Research (CMCR). According to information
obtained from the CMCR, "The [CMCR] was created in 2000 to
conduct clinical and pre-clinical studies of cannabinoids,
including smoked marijuana, to provide evidence one way or the
other to answer the question "Does marijuana have therapeutic
value?" To accomplish this objective, the CMCR issued calls for
applications from researchers at leading California
institutions, developed a close working relationship with state
and federal agencies to gain regulatory approvals, established
panels of nationally-recognized experts to rigorously review the
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merit of applications, and funded carefully designed studies
that have now been published in high impact scientific journals,
making significant contributions to the available literature on
cannabis and the cannabinoids."
The CMCR further states, "As a result of this program of
systematic research, we now have reasonable evidence that
cannabis is a promising treatment in selected pain syndromes
caused by injury or diseases of the nervous system, and possibly
for painful muscle spasticity due to multiple sclerosis.
Obviously more research will be necessary to elucidate the
mechanisms of action and the full therapeutic potential of
cannabinoid compounds. Meanwhile, the knowledge and new
findings from the CMCR provide a strong science-based context in
which policy makers and the public can discuss the place of
these compounds in medical care."
The Medical Marijuana Regulation and Safety Act. The Act
consisted of three separate bills which were enacted together
on Sept 11, 2015, to bring licensure and regulation to the
medical marijuana industry nearly 20 years after the passage
of Proposition 215 in 1996. The bills created a comprehensive
state licensing system for the commercial cultivation,
manufacture, retail sale, transport, distribution, delivery,
and testing of medical cannabis. In addition, the bills
affirm local control and require licensure by both a local
government and the state in order for a licensee to operate.
The Act went into effect on January 1, 2016, although
licensure requirements will not go into effect until the
regulatory entities responsible for implementing the act pass
necessary regulations.
Among other things, the Act establishes the new Bureau under the
DCA, which is responsible for licensing and regulating
dispensaries, transporters, and distributors. In addition,
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the CDPH is responsible for regulating manufacturers, testing
laboratories, and the production and labeling of edible
medical marijuana products. The CDFA is responsible for
regulating cultivation, and other state agencies, such as the
Department of Pesticide Regulation (DPR) and the State Water
Resources Control Board (SWRCB), are responsible for
developing environmental standards.
Under the Act, applicants seeking licensure to cultivate,
distribute, or manufacture medical cannabis are required to
include a detailed description of the applicant's operating
procedures for cultivation, extraction and infusion methods,
transportation process, inventory procedures, and quality
control procedures.
According to the author, this bill would make a number of
changes to the Act including:
1)Allowance of For-Profit Model- The bill permits medical
cannabis businesses to operate for-profit, not-for-profit, or
under any combination thereof. It also clarifies that
existing collectives may operate for profit.
2)Refinements to Licenses- The bill requires all testing to be
done on medicine in the form in which the patient will be
consuming it. The bill also revises the dispensary license by
allowing both storefront and non-storefront (e.g. not open to
the public) dispensaries to operate.
The bill allows direct transfer from cultivators to
dispensaries, and clarifies that a distributor can either
purchase or take custody of the medical cannabis. The bill
also requires that distributors would only have to obtain
local licenses for their facilities.
The bill requires nurseries to meet security standards for
transportation.
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3)Access to Banking- The bill requires the BOE to form an
advisory group of stakeholders to address access of medical
cannabis businesses to banking.
Requires the BOE to submit a report to the Legislature with
its findings. Requires the DBO to create financial monitoring
certification for licensees under the Act that further
compliance with federal banking laws and regulations.
Declares that it is not unlawful under state law for financial
institutions to offer banking services to licensed medical
cannabis businesses.
4)Research and Development- The bill allows for research
institutions and businesses to access limited amounts of
medical cannabis for research purposes. Businesses interested
in research and development (R&D) will have to be located in
jurisdictions with permissive local ordinances and receive
separate local authorization to conduct such R&D.
5)Patient Protection- The bill requires uniform packaging safety
standards to be developed by the CDPH, minimizing
inconsistencies across jurisdictions, while retaining local
control over advertising and appellations.
6)Advertising- The bill would require all licensees to submit
their license number when seeking advertising. Additionally,
the bill would declare it unlawful for existing collectives
and cooperatives to advertise should they not possess a valid
BOE Seller's Permit, and make the violation of that provision
an infraction punishable by a $500 fine.
7)Delivery- The bill requires standards be set for delivery
drivers, including registering information with the bureau.
It also clarifies that delivery is allowed unless expressly
prohibited by local government, and clarifies that delivery
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drivers do not need to know the patient's condition, and that
a card issued pursuant to SB 420 is valid in lieu of a
doctor's recommendation.
8)CDPH- The bill requires the DPH to include scientists from the
industry and testing labs in developing regulations. It also
requires the DPH to annually review and update their testing
standards based on the latest technology, including DNA
testing for contaminants. It requires the DPH to conduct
periodic audits of testing labs to verify their results.
9)Dual Licensure- The bill indicates that the local license must
be received prior to issuance of the state license. The bill
also notes that dual licensure is required one year following
the beginning of issuance of licenses, at the same time SB 420
sunsets, instead of upon issuance of regulations, which is
prior to issuance of licenses.
10)California Seed Law- The bill clarifies that local regulation
of medical cannabis under the Act is not pre-empted by
California's seed law, which requires the Secretary of CDFA
approval of all local ordinances that regulated seeds prior to
them becoming operative.
Current Related Legislation. AB 26 (Jones-Sawyer) of the
current legislative session requires a licensee under the Act to
institute and maintain a training program to educate, inform,
and train the licensee's agents and employees regarding
compliance with the Act, and requires the Bureau to approve and
regulate the training programs. STATUS: This bill is pending in
the Senate Committee on Business, Professions and Economic
Development.
AB 567 (Gipson) of the current legislative session, would
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prohibit mobile, vehicular, or technology platforms that enable
qualified patients or primary caregivers to arrange for any
delivery with a third party; would provide that a dispensary
that employs or uses the services of any person under 21 years
of age for the sale or delivery of medical cannabis or medical
cannabis products is subject to suspension or revocation of
certain state or local licenses; and would require tax penalty
amnesty programs, for medical cannabis-related businesses, as
provided. STATUS: This bill is pending in the Senate Committee
on Health.
AB 1548 (Wood) of the current legislative session, would impose
a tax in specified amounts on the distribution in this state by
a cultivator of marijuana to a licensed distributor, as
specified; require the licensed distributor to collect the tax
from the cultivator and remit it to the BOE; and require all
moneys, less refunds and costs of administration, to be
deposited into the Marijuana Production and Environment
Mitigation Fund, as specified. NOTE: This measure died in the
Assembly Committee on Revenue and Taxation.
AB 2385 (Jones-Sawyer) of the current legislative session
prohibits licensing authorities from requiring a local license,
permit, or other authorization, and would require the issuance
of a state license, if the authorities determine that the
applicant meets all of the requirements of the act, as
specified, in the City of Los Angeles. STATUS: This bill is
pending in the Assembly Committee on Business and Professions.
AB 2516 (Wood) of the current legislative session provides for
the issuance of a Type 1C, or "specialty cottage," state
cultivator license, as specified, by the CDFA. STATUS: This
bill is pending in the Assembly Committee on Agriculture.
AB 2545 (Bonta) of the current legislative session authorizes
the Governor to enter into agreements with federally recognized
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sovereign Indian tribes, as defined; authorizes these agreements
to include provisions regulating activities between licensees
operating on and off the land of federally recognized sovereign
Indian tribes; authorizes the Governor to delegate to the chief
of the Bureau authority to negotiate these agreements. STATUS:
This bill is pending in the Assembly Committee on Business and
Professions.
AB 2679 (Cooley) of the current legislative session increases
the reporting requirements of the Bureau to include the number
of appeals of denial of state licenses or other disciplinary
actions taken by the licensing authorities, the number of
complaints submitted to the Bureau regarding licenses; and,
expands scope of the CMCS to include in its studies the effect
of marijuana on a person's motor skills. STATUS: This bill is
pending in the Assembly Committee on Business and Professions.
Prior Related Legislation. AB 266 (Bonta, Cooley, Jones-Sawyer,
Lackey, and Wood), Chapter 689, Statutes of 2015, enacted the
Act for the licensure and regulation of medical marijuana and
established the Bureau within the DCA, under the supervision
and control of the Director of the DCA, and required the
Director to administer and enforce the provisions of the Act.
AB 266 also required the CDFA to administer the provisions of
the act related to cultivation, and required the CDPH to
administer the provisions of the Act related to manufacturing
and testing of medical cannabis. The bill also required the
BOE, in consultation with the CDFA, to adopt a system for
reporting the movement of commercial cannabis and cannabis
products.
AB 243 (Wood), Chapter 688, Statutes of 2015, required the CDFA,
the DPR, the CDPH, the DFW, and the SWRCB to promulgate
regulations or standards relating to medical marijuana and its
cultivation, as specified, required various state agencies to
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take specified actions to mitigate the impact that marijuana
cultivation has on the environment, and established the Act
Fund.
SB 643 (McGuire), Chapter 719, Statutes of 2015, set forth
standards for a physician and surgeon prescribing medical
cannabis, required the Medical Board of California to prioritize
its investigative and prosecutorial resources to identify and
discipline physicians and surgeons that have repeatedly
recommended excessive cannabis to patients for medical purposes
or repeatedly recommended cannabis to patients for medical
purposes without a good faith examination, as specified,
authorized counties to impose a tax upon specified
cannabis-related activity, and set forth standards for the
licensed cultivation of medical cannabis.
ARGUMENTS IN SUPPORT:
The California Cannabis Delivery Alliance writes in support, "We
have reached a workable compromise that will ensure our
businesses have an opportunity to be licensed. Our support is
limited to and based on proposed language that would amend BPC §
19334 to include "nonstorefront dispensary" for licensees who
have a dispensary that does not have a storefront with direct
physical access for the public."
AMENDMENTS:
1)In order to specify the business arrangements that are
permissible, the author should amend the bill as follows:
11362.775. (a) Subject to subdivision (b), qualified patients,
persons with valid identification cards, and the designated
primary caregivers of qualified patients and persons with
identification cards, who associate within the State of
California in order collectively or cooperatively to cultivate
cannabis for medical purposes, shall not solely on the basis
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of that fact be subject to state criminal sanctions under
Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570.
A collective or cooperative that operates pursuant to this
section may operate for profit, not for profit, or any
combination thereof. However, a collective or cooperative that
operates for profit only retains the protections pursuant to
this section if they possess a valid Board of Equalization
issued seller's permit and a valid local license, permit, or
other authorization.
2)As with other boards and bureaus under the DCA, the Bureau
does not have a sunset date nor is it subject to review by the
appropriate policy committees of the Legislature. Therefore,
the bill should be amended to specify that the Bureau is
subject to review by the appropriate policy committees of the
Legislature, commencing January 1, 2023, in order to allow the
Bureau time to establish its operations, and for the
Legislature to enact scheduled oversight of the Bureau.
REGISTERED SUPPORT:
California Cannabis Delivery Alliance
REGISTERED OPPOSITION:
1 individual
Analysis Prepared by:Le Ondra Clark Harvey Ph.D. / B. & P. /
(916) 319-3301
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