BILL ANALYSIS Ó
AB 2385
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GOVERNOR'S VETO
AB
2385 (Jones-Sawyer)
As Enrolled September 7, 2016
2/3 vote
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|ASSEMBLY: |55-16 |(May 19, 2016) |SENATE: |30-9 |(August 23, |
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|ASSEMBLY: |60-14 |(August 29, | | | |
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Original Committee Reference: B. & P.
SUMMARY: Prohibits a person from engaging in commercial
cannabis activity without possessing both a state license and a
local permit, license, or other authorization one year after the
bureau posts a notice on its Internet Web site that the
licensing authorities have commenced issuing licenses. This
bill also prohibits licensing authorities from requiring a local
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license, permit, or other authorization, and requires the
issuance of a state license, if the authorities determine, as
specified, that the applicant meets all of the requirements of
Medical Cannabis Regulation and Safety Act and specified
criteria relating to Measure D, which was approved by the voters
of the City of Los Angeles at the May 21, 2013, general
election. This bill further provides that a license issued
pursuant to the above provision has the same force and effect,
and confers the same benefits and responsibilities, as licenses
issued to licensees not subject to the above-described
exception. This bill requires the exemption to the local
licensing requirement provided by these provisions to be
superseded by a subsequent initiative authorizing the City of
Los Angeles to issue local licenses to medical marijuana
businesses in the city if the voters of Los Angeles approve the
initiative prior to the time the State of California begins
issuing state licenses.
The Senate amendments amend Business and Professions Code
Section 19320 as follows:
1)One year after the Bureau of Medical Cannabis Regulation posts
a notice on its Internet Web site that the licensing
authorities have commenced issuing licenses, no person shall
engage in commercial cannabis activity without possessing both
a state license and a local permit, license, or other
authorization. An entity seeking licensure pursuant to this
chapter shall obtain a local license, permit, or other
authorization prior to applying for state licensure. State
licensing entities shall not issue a license to any applicant
that is unable to provide documentation confirming
authorization to operate from the local government in which
the applicant proposes to operate.
2)With regard to commercial cannabis activity in the City of Los
Angeles, the licensing authorities shall not require a local
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license, permit, or other authorization and shall issue a
state license to engage in commercial cannabis activity only
if the licensing authorities determine the applicant satisfies
all of the requirements of this act and demonstrates that it
meets all of the following criteria established by Measure D,
approved by the voters of the City of Los Angeles at the May
21, 2013, general election:
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)A state license issued 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)The determination of the licensing authority that an applicant
for a state license meets the criteria, as specified, 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
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licensing authority confirming an applicant has met the
criteria, the licensing authority shall not issue a state
license.
5)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, that authorizes the
City of Los Angeles to issue local licenses to medical
marijuana businesses in Los Angeles, the exemption for local
licensing in Los Angeles, as specified, shall be superseded by
the local licensing requirements as enacted by that initiative
FISCAL EFFECT: According to Assembly Appropriations Committee,
as amended, the fiscal impact to state licensing authorities is
expected to be minor and absorbable (fee-supported special
funds).
Specifically, AB 243 (Wood), Chapter 688, Statutes of 2015, one
of the bills establishing Medical Marijuana Regulation and
Safety Act (MMRSA), appropriated $10 million General Fund to the
Medical Marijuana Regulation and Safety Act Fund for start-up
activities. MMRSA requires each licensing authority for medical
marijuana, including the Bureau of Medical Marijuana Regulation
within the Department of Consumer Affairs, the California
Department of Public Health, and the California Department of
Food and Agriculture, to charge fees commensurate with
regulatory costs. Further, each licensing authority is required
to generate sufficient fee revenue to cover the specific
licensure program administered by that authority.
Implementation-related Budget Change Proposals proposed in the
2016-17 Governor's Budget are being considered through the
budget process. Any work associated with licensing operations
in the City of Los Angeles is expected to be absorbed within the
existing workload plan.
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COMMENTS: 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 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 sanctions."
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
California Department of Public Health 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.
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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
making it unlawful to manufacture, distribute, dispense, or
possess any controlled substance. (Title 21 United States Code
(USC) Section 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" 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.
The Center for Medicinal Cannabis Research. Health and Safety
Code Section 11362.9 authorizes the creation of the Center for
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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
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
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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
Department of Consumer Affairs, which is responsible for
licensing and regulating dispensaries, transporters, and
distributors. In addition, the California Department of Public
Health is responsible for regulating manufacturers, testing
laboratories, and the production and labeling of edible medical
marijuana products. The California Department of Food and
Agriculture 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.
Measure D. The City of Los Angeles attempted multiple times to
regulate medical marijuana, and in 2013 it passed a ballot
measure, Measure D, which 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 because, according to federal law,
marijuana is an illegal substance. Rather, Measure D specified
the city would not prosecute those 135 dispensaries.
Enforcement Against Medical Cannabis Businesses in Los Angeles.
Many Los Angeles based medical cannabis entities have not paid
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taxes and have opened and closed at different locations, on many
occasions, to avoid prosecution by law enforcement. According
to the author, since 2013, 716 medical marijuana businesses have
been closed across the City of Los Angeles. The City Attorney's
Office has also filed 365 criminal cases against 1,444
defendants.
Ineligibility for State Licensure. The recently enacted Act
requires a license, permit, or other authorization from a local
jurisdiction in order to apply and receive a state license. Los
Angeles does not issue permits, thus, growers, testing labs, and
dispensaries in Los Angles are not currently eligible for state
licenses. As such, the provisions of this bill specify only
those who have adhered to Measure D requirements will be
eligible to be issued a state medical cannabis license.
GOVERNOR'S VETO MESSAGE:
I am returning Assembly Bill 2385 without my signature.
This bill requires California agencies to issue medical cannabis
licenses to Measure D compliant dispensaries in the City of Los
Angeles.
This bill is inconsistent with dual licensing requirement
established last year by the Medical Cannabis Regulation and
Safety Act.
Analysis Prepared by:
Le Ondra Clark Harvey Ph.D. / B. & P. / (916)
319-3301 FN:
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