BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 2385 Hearing Date: June 20,
2016
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|Author: |Jones-Sawyer |
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|Version: |May 12, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Sarah Huchel |
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Subject: Medical Marijuana Regulation and Safety Act: state
licenses: Measure D
SUMMARY: Exempts a commercial cannabis applicant from the local
licensure requirement as a condition of state licensure if the
applicant meets requirements specified by the City of Los
Angeles' Measure D and the Medical Marijuana Regulation and
Safety Act (Act).
Existing law:
1) Establishes the Bureau of Medical Marijuana Regulation
(Bureau) within the Department of Consumer Affairs (DCA) to
oversee the licensing and regulation of medical marijuana
pursuant to the Act. (Business and Professions Code (BPC)
Section 19300, et seq.)
2)Defines a "licensing authority" as 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. (BPC § 19300.5 (w))
3)Requires licensing authorities administering the Act to issue
state licenses only to qualified applicants with a license or
permit from the local jurisdiction in which he or she proposes
to operate, following the requirements of the applicable local
ordinance.
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This bill:
1)Exempts qualified applicants to engage in commercial cannabis
activity from the local licensing requirement for state
licensure if the licensing authority determines that the
applicant satisfies requirements of the Act and Measure D.
2)Establishes the following requirements pursuant to Measure D:
a) The applicant was operating in the City of Los Angeles
as a medical marijuana business by September 14, 2007, as
evidenced by a business tax registration certificate issued
by the City of Los Angeles on or before November 13, 2007.
b) The applicant registered with the City of Los Angeles
city clerk by November 13, 2007, in accordance with all of
the requirements of the City of Los Angeles' Interim
Control Ordinance.
c) The applicant obtained a City of Los Angeles business
tax registration for taxation as a medical marijuana
collective (class L050).
3)States that a state license issued pursuant to this bill 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 the City of Los
Angeles that obtain a license, permit, or other authorization
from the local jurisdiction.
4)States that the determination of the licensing authority that
an applicant for a state license meets Measure D criteria
shall be based on a written or electronic notification
provided to the licensing authority by the City of Los Angeles
that the applicant has met the criteria. If the City of Los
Angeles does not provide written or electronic notification to
the licensing authority confirming an applicant has met the
criteria, the licensing authority shall not issue a state
license.
5)States that if the voters of Los Angeles approve an initiative
after January 1, 2016, but prior to the time that the State of
California begins issuing state licenses, the City of Los
Angeles may issue local licenses to medical marijuana
AB 2385 (Jones-Sawyer) Page 3
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businesses in the City of Los Angeles, and the exemption for
local licensing in Los Angeles shall be superseded by the
local licensing requirements as enacted by that initiative.
FISCAL
EFFECT: This bill is keyed "fiscal" by the Legislative Counsel.
According to the Assembly Committee on Appropriations analysis
dated May 11, 2016, the fiscal impact of this bill to state
licensing authorities is expected to be minor and absorbable.
COMMENTS:
1. Purpose. This bill is sponsored by the United Food and
Commercial Workers (UFCW) Western States Council and the
United Cannabis Business Alliance Trade Association (UCBA).
According to the Author, "The City of Los Angeles failed
multiple times to regulate medical marijuana, but finally in
2013 it passed (Proposition D) Measure D. That ballot
measure allowed 135 dispensaries, all of which had been in
business since 2007, to remain open, while banning others.
However, the measure did not actually permit those 135
dispensaries to operate - which legal experts said, at the
time, the city could not do because marijuana remains illegal
under federal law. Measure D merely said the city would not
prosecute those 135 dispensaries.
"Under the recently enacted 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.
"However, the state will only grant them to businesses with
permits from their local jurisdictions. Because Los Angeles
doesn't issue permits, growers, testing labs and dispensaries
in L.A. are not currently eligible for state licenses.
"AB 2385 seeks to protect these 135 dispensaries from future
prosecution by allowing them to obtain a state issued medical
cannabis license, provided that they can demonstrate that they
have complied with specified Measure D requirements."
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2. California's Medical Marijuana Regulatory Background.
California began regulating medical marijuana with the
passage of the Compassionate Use Act in 1996, which exempted
patients and their primary caregivers from criminal liability
under state law for the possession and cultivation of
marijuana. In 2003, the Legislature authorized the formation
of medical marijuana cooperatives-nonprofit organizations
that cultivate and distribute marijuana for medical uses to
their members through dispensaries. Most recently, the
Medical Marijuana Regulation and Safety Act (Act) passed in
2015, which consisted of three separate bills enacted
together to license and regulate medical marijuana AB 243
(Wood, Chapter 688, Statues of 2015); AB 266 (Bonta, Chapter
689, Statutes of 2015); and SB 643 (McGuire, Chapter 719,
Statutes of 2015). These bills created a comprehensive state
licensing system for the commercial cultivation, manufacture,
retail sale, transport, distribution, delivery, and testing
of medical cannabis. Medical marijuana cooperatives will be
phased out under the Act and replaced by state licensed
businesses.
The Act went into effect on January 1, 2016, and licensure
requirements will follow when the regulatory entities
responsible for implementation pass necessary regulations.
The Act distributes state responsibilities among six
agencies:
The Bureau: responsible for licensing and
regulating dispensaries, transporters, and distributors.
Department of Fish and Wildlife (DFW): monitor and
reduce environmental impacts of marijuana cultivation.
State Water Resources Control Board (SWRCB):
regulate the environmental impacts of marijuana
cultivation on water quality and instream flows.
California Department of Food and Agriculture
(CDFA): regulate medical marijuana cultivation and issue
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licenses to growers.
Department of Public Health (DPH): develop and
enforce regulations and standards for medical marijuana
product manufacturers and testing laboratories.
Department of Pesticide Regulation (DPR): develop
pesticide use guidelines for the cultivation of medical
marijuana.
1. Arguments in Support. UFCW writes, "This legislation will
give state agencies direction to issue state licenses to
those medical marijuana businesses that are Measure D
compliant and will respect the Los Angeles voters' desire to
provide access to qualified patients who will continue to be
able to obtain medical marijuana. This legislation will
permit Measure D compliant medical marijuana businesses who
have been afforded limited immunity to continue to operate as
they have been since September 2007, and who have been
continuously operating in compliance with all local zoning,
environmental, and tax requirements as set forth in Measure
D."
2. Recommended Technical Amendment. Due to a chaptering error,
there are two identical sections of BPC § 19320. The
following amendment will delete the redundant section.
On page 4, delete lines 11-39, and delete pages 5 -6.
SUPPORT AND OPPOSITION:
Support:
United Food and Commercial Workers (UFCW) Western States Council
United Cannabis Business Alliance (UCBA) Trade Association
Opposition:
None on file as of June 14, 2016.
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