BILL ANALYSIS                                                                                                                                                                                                    Ó






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                                   THIRD READING 


          Bill No:  AB 2516
          Author:   Wood (D) 
          Amended:  8/1/16 in Senate
          Vote:     21 

           SENATE AGRICULTURE COMMITTEE:  5-0, 6/21/16
           AYES:  Galgiani, Cannella, Berryhill, Pan, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 8/11/16
           AYES:  Lara, Beall, Hill, McGuire, Mendoza
           NOES:  Bates, Nielsen

           ASSEMBLY FLOOR:  63-9, 6/1/16 - See last page for vote

           SUBJECT:   Medical cannabis:  state cultivator license types:   
                     specialty cottage type


          SOURCE:    California Growers Association
          
          DIGEST:  This bill creates a Type 1C, or specialty cottage,  
          medical marijuana cultivator license.

          ANALYSIS: 

          Existing law:

          1)Enacts the Medical Marijuana Regulation and Safety Act (Act)  
            was enacted in 2015 to create a comprehensive licensing and  
            regulatory framework for the cultivation, manufacture,  
            transportation, storage, distribution, sale, and testing of  
            medical marijuana.  









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          2)Establishes the Bureau of Medical Marijuana Regulation  
            (Bureau) within the Department of Consumer Affairs to regulate  
            and issue licenses for the transportation, storage,  
            distribution, and sale of medical marijuana.  

          3)Requires the California Department of Food and Agriculture  
            (CDFA) regulate and issue licenses for the cultivation of  
            medical marijuana through the Medical Cannabis Cultivation  
            Program, and the State Department of Public Health is required  
            to regulate the manufacturing and testing of medical marijuana  
            and labeling of medical marijuana edible products.  CDFA is  
            also responsible, in consultation with the Bureau, for  
            establishing a 'track and trace' program for reporting the  
            movement of medical marijuana throughout the distribution  
            chain (Business and Professions Code § 19300 et seq.).

          4)Requires the Department of Pesticide Regulation (DPR), in  
            consultation with CDFA, to develop standards for the use of  
            pesticides in cultivation.  Additionally, coordination among  
            CDFA, the Department of Fish and Wildlife, and the State Water  
            Resources Control Board is required to ensure that water  
            diversion and discharge associated with medical marijuana  
            cultivation do not affect instream flows necessary for fish  
            habitat.  On the local level, local authority regarding  
            medical marijuana is preserved by requiring persons engaged in  
            commercial medical marijuana activity to obtain both a state  
            license and a local permit, license or other local  
            authorization.

            Cultivator licenses issued by CDFA are categorized by lighting  
            source (indoor, outdoor, or mixed lighting source) and by  
            type: 

               Type 1:  Specialty - 5,000 square feet or less; up to 50  
          mature plants
               Type 2:  Small - between 5,001 and 10,000 square feet
               Type 3:  Larger growers - between 10,001 to 22,000 square  
                      feet for indoor or mixed lighting or up to an acre  
                      for outdoor
               Type 4:  Nursery

          5)Exempts persons growing marijuana for personal use from  
            licensing requirements if their growing operations are under  
            100 square feet, or 500 square feet for primary caregivers  







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            growing marijuana for the exclusive medical use of not more  
            than five patients (Health and Safety Code § 11362.777).

          This bill:

          1)Creates a Type 1C, or "specialty cottage" state cultivator  
            license issued by CDFA for medical marijuana cultivation using  
            a combination of natural and artificial lighting on a single  
            premises consisting of: 

             a)   2,500 square feet or less of total canopy size for  
               mixed-light cultivation; 
             b)   Up to 25 plants for outdoor cultivation; or 
             c)   500 square feet or less of total canopy size for indoor  
               cultivation.

          2)Clarifies that regulations adopted by CDFA, rather than "the  
            department," shall not be construed to supersede or limit the  
            authority of the State Water Resources Control Board, regional  
            water quality control boards, or the Department of Fish and  
            Wildlife to implement and enforce their responsibilities to  
            protect water quality, water supply, and natural resources.


          Comments
          
          Cultivator licenses. Currently, cultivator licenses are divided  
          into categories based on size of the growing site and type of  
          lighting (indoor/outdoor/mixed).  Multiple license types provide  
          for greater regulatory specificity, since, for instance, small  
          indoor growers (5,000 square feet or less) would require  
          different regulatory and environmental considerations than large  
          outdoor growers (22,000 square feet or less).  Medical marijuana  
          cultivation laws were developed in part to mitigate  
          environmental impact, improve the safety of neighborhoods, and  
          bring the cultivation of marijuana into compliance with current  
          agricultural farming regulations on water, soil, and air  
          quality, among others.

          Cottage growers.  Type 1 licenses encompass the smallest group,  
          or "specialty" operations.  However, according to the author,  
          there are some growers who represent a smaller subsection that  
          grow very few plants on relatively small parcels of land in  
          order to provide supplementary income or are part of a larger  







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          diversified farm.  These operations fit into the category of  
          "cottage," which is already currently used for other commodities  
          and products in state law.  For example, "cottage food  
          operations" are businesses located within private homes that do  
          not gross more than $35,000 annually and do not have more than  
          one full-time employee, among other specifications. These  
          entities are afforded regulations that better match their  
          "cottage" operations.  This bill seeks to provide similar  
          accommodations for the unique needs of small "specialty cottage"  
          medical marijuana growers.
          
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Senate Appropriations Committee, this bill  
          would incur unknown costs to CDFA to develop regulations, review  
          and issue licenses, and enforce regulations resulting from an  
          increase in cultivators participating in the regulated market. 

          CDFA is authorized under current law to establish a scale of  
          license fees, based on business size, which would cover the cost  
          of licensing and enforcement activities. However, the  
          potentially broad appeal of the new license category proposed by  
          this bill could result in costs associated with enforcement and  
          licensing workload exceeding fee revenue in the initial years of  
          implementation.  


          SUPPORT:   (Verified8/12/16)


          California Growers Association (source)
          Americans for Safe Access
          Consortium Management Group
          Humboldt County Board of Supervisors
          Mendocino County Board of Supervisors
          Sonoma County Board of Supervisors

          OPPOSITION:   (Verified8/12/16)


          None received

          ARGUMENTS IN SUPPORT:  According to the author, "Last year the  







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          legislature developed the Medical Marijuana Regulation and  
          Safety Act (MMRSA) in an effort to address the environmental,  
          public health, and public safety concerns that have developed  
          within the cannabis industry.  The key to this new framework's  
          success is ensuring that new and existing businesses get  
          licensed and come into regulatory compliance.  

          Current law lumps all cannabis cultivation sites that are  
          5,000ft2 or less into one license.  AB 2516 would create a  
          cottage sublicense and encourage the Department of Food and  
          Agriculture to develop regulations that are appropriate for the  
          thousands of small growers that currently grow much less than  
          5,000ft2.  This addition rounds out the cultivator licensing  
          structure so that the MMRSA accurately reflects the business  
          activity going on throughout the state."

          ASSEMBLY FLOOR:  63-9, 6/1/16
          AYES:  Achadjian, Alejo, Arambula, Atkins, Baker, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chávez, Chiu, Chu, Cooley, Dababneh, Daly, Dodd, Eggman,  
            Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin,  
            Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, McCarty, Medina, Mullin, Nazarian, O'Donnell,  
            Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Weber, Wilk, Williams,  
            Wood, Rendon
          NOES:  Travis Allen, Bigelow, Beth Gaines, Gatto, Grove, Harper,  
            Mathis, Melendez, Patterson
          NO VOTE RECORDED:  Cooper, Dahle, Hadley, Jones, Mayes,  
            Obernolte, Wagner, Waldron

          Prepared by:Anne Megaro / AGRI. / (916) 651-1508
          8/15/16 19:39:53


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