BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2516| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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. AB 2516 Page 2 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 AB 2516 Page 3 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 AB 2516 Page 4 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 AB 2516 Page 5 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 **** END **** AB 2516 Page 6