BILL ANALYSIS Ó
AB 2516
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2516 (Wood) - As Amended April 6, 2016
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|Policy |Agriculture |Vote:|7 - 2 |
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| |Business and Professions | |13 - 1 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill creates a "specialty cottage" license for eligible
medical cannabis cultivators. Specifically, this bill:
1)Creates a Type 1C, or "specialty cottage" license to be issued
by the California Department of Food and Agriculture (CDFA),
for cultivation using a combination of natural and
supplemental artificial lighting at a maximum threshold to be
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determined by the licensing authority, of 2,500 square feet or
less of total canopy size for outdoor cultivation, or 500
square feet or less of total canopy size for indoor
cultivation, on one premises.
2)Clarifies the role of the of the CDFA is not to supersede or
limit the authority of the State Water Resources Control Board
(SWRCB), regional water quality control boards, or the
Department of Fish and Wildlife (DFW) when implementing and
enforcing their statutory obligations or to adopting
regulations to protect water quality, water supply, and
natural resources.
FISCAL EFFECT:
1)Unknown costs to CDFA to develop regulations, review and issue
licenses, and enforce regulations as a result of more
cultivators participating in the regulated market. While this
bill does not expand the universe of potential licensed
cultivators, this new specialty cottage license is intended to
attract an unknown number of small cultivators who otherwise
may opt out of the regulated market altogether.
2)Existing law authorizes CDFA to establish a scale of license
fees, based on the size of the business, that would cover the
cost of licensing and enforcement activities. However, the
potentially broad appeal of this new license category could
result in the enforcement and licensing workload not scaling
proportionally to license fees, resulting in costs that exceed
fee revenue in the initial years of implementation.
COMMENTS:
1)Purpose. This bill is intended to help cottage farmers comply
with the provisions of the Medical Marijuana Regulation and
Safety Act (Act) by establishing a license that is more
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appropriate for their size and output. Supporters argue that
this will help encourage these cultivators to participate in
the regulatory structure put in place by the Act.
2)Background. The Act, which consisted of three separate bills
(243 (Wood), Chapter 688, Statutes of 2015; AB 266 (Bonta),
Chapter 689, Statutes of 2015; and, SB 643 (McGuire), Chapter
719, Statutes of 2015) was enacted to bring licensure and
regulation to the medical marijuana industry. The Act 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, 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 and the State Water Resources Control
Board, are responsible for developing environmental standards.
3)Size of the cottage industry. The precise size of the number
of cottage farmers is unknown, but is likely in the range of
tens of thousands statewide. This bill does not expand the
number of eligible cultivators who may participate in the
regulatory structure established by the Act. However, by
creating a license that is more in line with the size of
cottage farmers, this bill is more likely to bring these small
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cultivators into the regulatory framework established by the
Act. As a result, an intended impact of this bill is to
increase the number of cultivators covered by the Act.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081