BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2385


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          Date of Hearing:  April 20, 2016


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                           Susan Talamantes Eggman, Chair


          AB 2385  
          (Jones-Sawyer) - As Amended April 5, 2016


          SUBJECT:  Medical Marijuana Regulation and Safety Act:  state  
          licenses:  Measure D.


          SUMMARY:  Amends the recently-enacted Medical Marijuana  
          Regulation and Safety Act to clarify state licensing  
          requirements for commercial cannabis activity in the City of Los  
          Angeles.  Specifically, this bill:  


          1)Prohibits, with regard to commercial cannabis activity in the  
            City of Los Angeles (Los Angeles) and notwithstanding any  
            other provision of the Medical Marijuana Regulation and Safety  
            Act (MMRSA), state licensing authorities from requiring a  
            local license, permit, or other authorization.



          2)Requires state licensing authorities to issue a state license  
            to engage in commercial cannabis activity in Los Angeles only  
            if the licensing authorities determine the applicant satisfies  
            all 
          of the requirements of the MMRSA and demonstrates that it meets  
            all of the following criteria established by Measure D,  
            approved by the voters of Los Angeles at the May 21, 2013,  
            general election:








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             a)   The applicant was operating in Los Angeles as a medical  
               marijuana (MM) business by September 14, 2007, as evidenced  
               by a business tax registration certificate issued by Los  
               Angeles on or before November 13, 2007;



             b)   The applicant registered with the Los Angeles city clerk  
               by November 13, 2007, in accordance with all of the  
               requirements of the Los Angeles' Interim Control Ordinance;  
               and,



             c)   The applicant obtained a Los Angeles business tax  
               registration for taxation as an MM collective, as  
               specified.



          3)Provides that a state license issued, pursuant to the  
            provisions of 1) and 2), above, for commercial cannabis  
            activity shall have the same force and effect and shall confer  
            the same benefits and responsibilities as licenses issued to  
            licensees outside of Los Angeles that obtain a license,  
            permit, or other authorization from the local jurisdiction.



          4)Provides that the exemption for local licensing in Los Angeles  
            as outlined in 1) through 3), above, shall be superseded if  
            the voters of Los Angeles approve an initiative that  
            authorizes Los Angeles to issue local licenses to MM  
            businesses after January 1, 2016, but prior to the time that  
            the State of California begins issuing state licenses.









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          EXISTING LAW:  


          1)Prohibits, pursuant to the Compassionate Use Act (CUA, also  
            known as Proposition 215), criminal prosecution of a qualified  
            patient with specified illnesses, or a patient's primary  
            caregiver, for the possession or cultivation of MM upon the  
            written or oral recommendation or approval of an attending  
            physician. 

          2)Provides, pursuant to MMRSA, for the licensing and regulation  
            by both state and local governments of MM and its cultivation.  


          3)Allows licensing authorities administering the MMRSA to issue  
            state licenses only to qualified applicants engaging in  
            commercial cannabis activity, pursuant to the MMRSA.  

          4)Prohibits any person, upon the date of implementation of  
            regulations by the licensing authority, from engaging in  
            commercial cannabis activity without possessing both a state  
            license and a local permit, license, or other authorization.  

          5)Prohibits a person or entity from submitting an application  
            for a state license, unless that person or entity has received  
            a license, permit, or authorization by a local jurisdiction.

          6)Prohibits a licensee from commencing activity under the  
            authority of a state license until the applicant has obtained,  
            in addition to the state license, a license or permit from the  
            local jurisdiction in which he or she proposes to operate,  
            following the requirements of the applicable local ordinance.

          7)Provides that issuance of a state license or a determination  
            of compliance with local law by the licensing authority shall  
            in no way limit the ability of Los Angeles to prosecute any  
            person or entity for a violation of, or otherwise enforce,  








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            Proposition D, nor may issuance of a license or determination  
            of compliance with local law by the licensing authority be  
            deemed to establish, or be relied upon, in determining  
            satisfaction with the immunity requirements of Proposition D,  
            as specified.

          8)Defines "licensing authority" to mean the state agency  
            responsible for the issuance, renewal, or reinstatement of the  
            license, or the state agency authorized to take disciplinary  
            action against the license.

          FISCAL EFFECT:  This bill is keyed fiscal.


          COMMENTS:  


          1)Bill Summary.  This bill clarifies that existing MM businesses  
            operating in Los Angeles in compliance with that city's MM  
            ordinance, which does not require a local license, may operate  
            under a state license without having to obtain a local  
            license.  



            This bill prohibits state licensing authorities from requiring  
            a local permit from these MM businesses.  Instead, this bill  
            requires state licensing authorities to issue a state license  
            only 


            if the licensing authorities determine the applicant meets the  
            requirements of the MMRSA and demonstrates that it meets  
            specified criteria established by Measure D, which Los Angeles  
            voters approved in 2013.  



            This bill contains a mechanism that would eliminate this local  








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            licensing exemption for Los Angeles if Los Angeles voters  
            approve an initiative that authorizes Los Angeles to issue  
            local licenses to MM businesses after January 1, 2016, but  
            prior to the time that the state begins issuing state  
            licenses.  





            This bill is sponsored by the United Food and Commercial  
            Workers, Western States Council and the UCBA Trade  
            Association.





          2)Author's Statement.  According to the author, "Under the  
            Medical Marijuana Regulation and Safety Act (MMRSA),  
            California will start issuing licenses to medical cannabis  
            businesses after January 1, 2018.  MMRSA requires a license,  
            permit or other authorization from a local jurisdiction in  
            order to apply and receive a state license.   
           


            "This legislation will give state agencies direction to issue  
            state licenses to respect the will 


            of Los Angeles voters, which is to permit patients to be able  
            to obtain medical marijuana.  This legislation will permit  
            Measure D-compliant medical marijuana businesses to continue  
            to operate as they have been in compliance with local zoning,  
            environmental, and tax requirements."











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          3)Background.  Last year, the Legislature approved three  
            measures that collectively established the MMRSA:  AB 243  
            (Wood), Chapter 688, Statutes of 2015; AB 266 (Bonta, et al),  
            Chapter 689, Statutes of 2015; and, SB 643 (McGuire), Chapter  
            719, Statutes of 2015.  The MMRSA established a regulatory  
            framework for the cultivation, manufacturing, transport,  
            distribution, sale and product safety of MM.



            Voters approved the CUA in 1996, well before the enactment of  
            the MMRSA.  The CUA established the right of patients to  
            obtain and use MM to treat specified illnesses, including any  
            illness for which it provides relief.  The CUA prohibits  
            prosecution for cultivating or possessing MM for qualified  
            patients and their primary caregivers.  Additionally, the CUA  
            exempts qualified patients and their primary caregivers from  
            California drug laws prohibiting possession and cultivation of  
            MM.





          4)Measure D.  After passage of the CUA, but before the MMRSA was  
            approved, many local jurisdictions established MM ordinances,  
            including Los Angeles.  Los Angeles voters approved Measure D  
            on May 21, 2013, which generally prohibited the operation or  
            establishment of MM businesses but provided limited immunity  
            for MM businesses that met the following four requirements: 



             a)   Were timely registered with the city clerk under Los  
               Angeles' 2007 Interim Control Ordinance;



             b)   Timely applied for registration under Los Angeles' 2010  








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               Medical Marijuana Ordinance, as amended by the 2011  
               Temporary Urgency Ordinance;



             c)   Registered under Measure M regarding taxation of medical  
               marijuana in 2011 or 2012; and,



             d)   Complied with other operating and location restrictions,  
               pursuant to Measure D.



            Since passage of Measure D, 716 medical marijuana businesses  
            have been closed across Los Angeles.  The City Attorney's  
            Office has also filed 365 criminal cases against 1,444  
            defendants.





          5)Related Legislation.  AB 21 (Wood, et al.), Chapter 1,  
            Statutes of 2016, amended the MMRSA to clarify the authority  
            of cities and counties to regulate medical marijuana  
            cultivation in their jurisdictions.
          


          6)Previous Legislation.  SB 643 (McGuire), Chapter 719, Statutes  
            of 2015; AB 243 (Wood), Chapter 688, Statutes of 2015; and, AB  
            266 (Bonta, et al.), Chapter 689, Statutes of 2015, were a  
            package of bills that comprised the MMRSA, which provided for  
            the licensing and regulation by both state and local entities  
            of MM and its cultivation.










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          7)Arguments in Support.  The United Food and Commercial Workers,  
            Western States Council, and the UCBA Trade Association,  
            co-sponsors of this measure, write, "In 2013, over 63% of the  
            City of Los Angeles voters passed Measure D allowing  
            approximately 
          135 dispensaries to remain open while banning others.  Under  
            Measure D, the City of Los Angeles does not actually issue  
            permits or licenses to those 135 dispensaries; instead, the  
            city gave the right to assert limited immunity to these  
            medical marijuana operators.

            "As medical marijuana business operators start to apply for  
            state licenses after January 1, 2018, the California  
            Department of Consumer Affairs, the Department of Food and  
            Agriculture, and the Department of Public Health will need  
            proof from operators in the city of Los Angeles that they are  
            Measure D compliant?This legislation will ensure that the  
            state does not issue licenses to operators that are not  
            following Measure D requirements."





          8)Arguments in Opposition.  None on file.
           


           9)Double-Referral.  This bill is double-referred to the Business  
            and Professions Committee, where it is scheduled to be heard  
            on April 19, 2016.



          REGISTERED SUPPORT / OPPOSITION:











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          Support


          UCBA Trade Association [SPONSOR]


          United Food and Commercial Workers, Western States Council  
          [SPONSOR]




          Opposition


          None on file




          Analysis Prepared by:Angela Mapp / L. GOV. / (916) 319-3958