BILL ANALYSIS Ó
AB 2545
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Date of Hearing: April 19, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 2545
(Bonta) - As Amended March 18, 2016
SUBJECT: Medical cannabis: agreements with tribal governments.
SUMMARY: Authorizes the Governor to enter into agreements
concerning medical cannabis with federally recognized sovereign
Indian tribes; authorizes the agreements to include provisions
regulating activities between licensees operating on and off the
land of federally recognized sovereign Indian tribes; and
authorizes the Governor to delegate to the chief of the Bureau
of Medical Marijuana Regulation (BMMR) authority to negotiate
the agreements.
EXISTING LAW:
1)Enacts the Medical Marijuana Regulation and Safety Act (Act),
which provides for the state licensure and regulation of
commercial cannabis activities, including cultivation,
possession, manufacture, processing, storing, laboratory
testing, labeling, transporting, distribution, and sale of
medical cannabis or medical cannabis products. (Business and
Professions Code (BPC) § 19300, et seq.)
2)Establishes the Bureau of Medical Marijuana Regulation
(Bureau) within the Department of Consumer Affairs (DCA), and
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requires the Bureau, the California Department of Public
Health (CDPH), and the California Department of Food and
Agriculture (CDFA) to administer the Act and promulgate
regulations for implementation of the act. (BPC § 19300, et
seq.)
3)Vests in the DCA the sole authority to create, issue, renew,
discipline, suspend, or revoke licenses for medical marijuana
activities, including licenses for dispensaries, distributors,
and transporters. Prohibits a licensee from holding more than
one license except as specified. (BPC §§ 19302.1, 19328)
4)Allows the Bureau to convene an advisory committee to advise
the Bureau and licensing authorities on the development of
standards and regulations, including best practices and
guidelines to ensure qualified patients have adequate access
to medical marijuana and medical marijuana products. (BPC §
19306)
5)Provides that the actions of a licensee permitted pursuant to
both a state license and a license or permit issued by the
local jurisdiction following the requirements of the
applicable local ordinances, and conducted in accordance with
the Act are not unlawful under state law. (BPC § 19317)
6)Prohibits a person from engaging in commercial cannabis
activity without possessing both a state license and a local
permit or other authorization upon the date of implementation
of regulations by the licensing authority. (BPC § 19320)
7)Requires the Bureau to deny an application if the applicant or
the premises do not qualify for licensure or fail to comply
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with the Act. (BPC § 19323)
8)Allows licensing authorities to take disciplinary action
against a licensee for any violation of any provision of the
law, and requires a licensing authority to inform the Bureau
upon suspension or revocation of a license. (BPC §§ 19313,
19313.5)
9)Provides that nothing shall be interpreted to supersede or
limit existing local authority for law enforcement activity,
enforcement of local zoning requirements or local ordinances,
or enforcement of local permit or licensing requirements.
(BPC § 19315)
10)Requires the CDFA to administer the provisions of the Act
related to the cultivation of medical cannabis; to create,
issue, and suspend or revoke cultivation licenses for
violations of the Act; and to promulgate regulations governing
the licensing of indoor and outdoor cultivation sites. (BPC §
19302.1, 19332)
11)Authorizes a county to impose a tax on the privilege of
cultivating, dispensing, producing, processing, preparing,
storing, providing, donating, selling, or distributing medical
cannabis or medical cannabis products by a licensee operating
pursuant to the Act, as specified. (BPC § 19348)
THIS BILL:
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1)Authorizes the Governor to enter into agreements concerning
medical cannabis with federally recognized sovereign Indian
tribes.
2)Defines "federally recognized sovereign Indian tribe" as any
Indian tribe, band, nation, or community wholly or partially
located within the geographical boundaries of the State that
the Secretary of the Interior acknowledges to exist as an
Indian tribe, as specified.
3)Specifies that agreements may include provisions regulating
activities between licensees operating on and off the land of
a federally recognized sovereign Indian tribe.
4)Authorizes the Governor to delegate to the Chief of the Bureau
the authority to negotiate agreements, as specified.
FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Counsel.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, "In 1996, California was the first state in the
nation to allow the use of medical cannabis after voters
approved Proposition 215, the California Compassionate Use Act.
Since then, 22 other states and the District of Columbia have
passed laws allowing for the medical or adult use of cannabis.
In 2015, California passed the Medical Marijuana Regulation and
Safety Act (MMRSA), the first comprehensive regulatory framework
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for medical cannabis in the state's history.
MMRSA is based on a system of dual licensure-all businesses must
have both a state and a local license. However, under current
law, tribal governments are sovereign entities, not subject to
the new regulatory scheme. Furthermore, tribal governments are
only subject to criminal law, not civil law, except as
negotiated between the State of California and the tribal
entity. Moreover, under MMRSA, licensed businesses can only
conduct business with other licensees. If businesses on
sovereign land are unable to obtain a state license, they would
be excluded from the state system and unable to interact with
the rest of the industry.
AB 2545 will guide California on a pathway to integrating tribal
governments and businesses on sovereign land into the rest of
the regulated market under the Act. It will also ensure that
medical cannabis businesses on sovereign lands comply with the
priorities laid out by the federal government."
Background. 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 sanction."
The Medical Marijuana Program Act. SB 420 (Vasconcellos),
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Chapter 875, Statutes of 2003, established the Medical Marijuana
Program Act (MMP). The MMP, among other things, required the
CDPH 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.
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
Section (USC) 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,
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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" medical marijuana 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 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
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
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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 (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.
Federally Recognized Tribes and Reservations. According to the
U.S. Department of the Interior Indian Affairs, a federally
recognized tribe is an American Indian or Alaska Native tribal
entity that is recognized as having a government-to-government
relationship with the United States, with the responsibilities,
powers, limitations, and obligations attached to that
designation, and is eligible for funding and services from the
Bureau of Indian Affairs. These tribes are recognized as
possessing certain inherent rights of self-government (e.g.,
tribal sovereignty) and are entitled to receive certain federal
benefits, services, and protections because of their special
relationship with the United States. At present, there are 566
federally recognized American Indian and Alaska Native tribes
and villages.
The U.S. Department of the Interior Indian Affairs defines a
federal Indian reservation as an area of land reserved for a
tribe or tribes under treaty or other agreement with the U.S.,
executive order, or federal statute or administrative action as
permanent tribal homelands, and where the federal government
holds title to the land in trust on behalf of the tribe.
Approximately 56.2 million acres are held in trust by the United
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States for various Indian tribes and individuals. There are
approximately 326 Indian land areas in the U.S. administered as
federal Indian reservations (i.e., reservations, pueblos,
rancherias, missions, villages, communities, etc.). Some
reservations are the remnants of a tribe's original land base.
Others were created by the federal government for the resettling
of Indian people forcibly relocated from their homelands. Not
every federally recognized tribe has a reservation. Federal
Indian reservations are generally exempt from state
jurisdiction, including taxation, except when Congress
specifically authorizes such jurisdiction.
The Relationship Between Federally Recognized Tribes and
Government. According to the U.S. Department of the Interior
Indian Affairs, because the Constitution vested the Legislative
Branch with plenary power over Indian Affairs, states have no
authority over tribal governments unless expressly authorized by
Congress. While federally recognized tribes generally are not
subordinate to states, they can have a government-to-government
relationship with these other sovereigns, as well. Furthermore,
federally recognized tribes possess both the right and the
authority to regulate activities on their lands independently
from state government control. They can enact and enforce
stricter or more lenient laws and regulations than those of the
surrounding or neighboring state(s) wherein they are located.
Yet, tribes frequently collaborate and cooperate with states
through compacts or other agreements on matters of mutual
concern such as environmental protection and law enforcement.
The 2013 Cole Memorandum. The Cole Memorandum indicates that
while cannabis remains a Schedule 1 drug, the federal government
is less inclined to intervene in states that have authorized
medical cannabis use with strong and effective regulatory and
enforcement systems that prioritize certain policies.
Specifically, the Cole Memorandum lists eight federal law
enforcement priorities where the federal Department of Justice
will focus its limited investigative and prosecutorial resources
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in all states. These eight priorities are as follows:
1)Preventing the distribution of marijuana to minors;
2)Preventing revenue from the sale of marijuana from going to
criminal enterprises, gangs, and cartels;
3)Preventing the diversion of marijuana from states where it is
legal under state law in some form to other states;
4)Preventing state-authorized marijuana activity from being used
as cover or pretext for the trafficking of other illegal drugs
or illegal activity;
5)Preventing violence and the use of firearms in the cultivation
and distribution of marijuana;
6)Preventing drugged driving and the exacerbation of other
adverse public health consequences associated with marijuana
use;
7)Preventing the growing of marijuana on public lands and the
attendant public safety and environmental dangers posed by
marijuana production on public lands; and,
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8)Preventing marijuana possession or use on federal property.
The 2014 Wilkinson Memorandum. In October 2014, the U.S.
Department of Justice published a memorandum regarding cannabis
issues on tribal lands. The statement reaffirmed that the Cole
Memorandum does not alter the authority or jurisdiction of the
U.S. to enforce federal law on sovereign lands; however, the
priorities listed in the 2013 Cole Memorandum will guide the
U.S. Attorneys' cannabis enforcement efforts on sovereign lands .
As such, in order for a state to have a complete and robust
regulatory system for medical cannabis operations, the system
should make certain that all businesses on sovereign lands
comply with the 2013 Cole Memorandum.
Current Related Legislation. AB 26 (Jones-Sawyer) of the
current legislative session requires a licensee under the Act to
institute and maintain a training program to educate, inform,
and train the licensee's agents and employees regarding
compliance with the Act, and requires the Bureau to approve and
regulate the training programs. STATUS: This bill is pending in
the Senate Committee on Business, Professions and Economic
Development.
AB 567 (Gipson) of the current legislative session, would
prohibit mobile, vehicular, or technology platforms that enable
qualified patients or primary caregivers to arrange for any
delivery with a third party; would provide that a dispensary
that employs or uses the services of any person under 21 years
of age for the sale or delivery of medical cannabis or medical
cannabis products is subject to suspension or revocation of
certain state or local licenses; and would require tax penalty
amnesty programs, for medical cannabis-related businesses, as
provided. STATUS: This bill is pending in the Senate Committee
on Health.
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AB 1548 (Wood) of the current legislative session, would impose
a tax in specified amounts on the distribution in this state by
a cultivator of marijuana to a licensed distributor, as
specified; require the licensed distributor to collect the tax
from the cultivator and remit it to the BOE; and require all
moneys, less refunds and costs of administration, to be
deposited into the Marijuana Production and Environment
Mitigation Fund, as specified. NOTE: This measure died in the
Assembly Committee on Revenue and Taxation.
AB 2385 (Jones-Sawyer) of the current legislative session
prohibits licensing authorities from requiring a local license,
permit, or other authorization, and would require the issuance
of a state license, if the authorities determine that the
applicant meets all of the requirements of the act, as
specified, in the City of Los Angeles. STATUS: This bill will
also be heard before the Assembly Committee on Business and
Professions during today's hearing.
AB 2516 (Wood) of the current legislative session provides for
the issuance of a Type 1C, or "specialty cottage," state
cultivator license, as specified, by the CDFA. STATUS: This
bill will also be heard before the Assembly Committee on
Business and Professions during today's hearing.
AB 2672 (Bonilla) of the current legislative session renames the
Medical Marijuana Regulation and Safety Act (Act) to the Medical
Cannabis Regulation and Safety Act; renames the Bureau of
Medical Marijuana Regulation (Bureau) to the Bureau of Medical
Cannabis Regulation; renames the Medical Marijuana Regulation
and Safety Act Fund (Fund) to the Medical Cannabis Regulation
and Safety Act Fund; renames the Medical Marijuana Fines and
Penalties Account (Account) to the Medical Cannabis Fines and
Penalties Account; and, makes other conforming changes
throughout the Business and Professions (BPC), Fish and Game
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(FGC), Government (GOV), Health and Safety (HSC), Revenue and
Taxation (RTC), and Water Codes (WAT). STATUS: This bill will
also be heard before the Assembly Committee on Business and
Professions during today's hearing.
AB 2679 (Cooley) of the current legislative session increases
the reporting requirements of the Bureau to include the number
of appeals of denial of state licenses or other disciplinary
actions taken by the licensing authorities, the number of
complaints submitted to the Bureau regarding licenses; and,
expands scope of the CMCR to include in its studies the effect
of marijuana on a person's motor skills. STATUS: This bill is
pending in the Assembly Committee on Appropriations.
Prior Related Legislation. AB 266 (Bonta, Cooley, Jones-Sawyer,
Lackey, and Wood), Chapter 689, Statutes of 2015, enacted the
Act for the licensure and regulation of medical marijuana and
established the Bureau within the DCA, under the supervision
and control of the Director of the DCA, and required the
Director to administer and enforce the provisions of the Act.
AB 266 also required the CDFA to administer the provisions of
the act related to cultivation, and required the CDPH to
administer the provisions of the Act related to manufacturing
and testing of medical cannabis. The bill also required the
BOE, in consultation with the CDFA, to adopt a system for
reporting the movement of commercial cannabis and cannabis
products.
AB 243 (Wood), Chapter 688, Statutes of 2015, required the CDFA,
the DPR, the CDPH, the DFW, and the SWRCB to promulgate
regulations or standards relating to medical marijuana and its
cultivation, as specified, required various state agencies to
take specified actions to mitigate the impact that marijuana
cultivation has on the environment, and established the Act
Fund.
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SB 643 (McGuire), Chapter 719, Statutes of 2015, set forth
standards for a physician and surgeon prescribing medical
cannabis, required the Medical Board of California to prioritize
its investigative and prosecutorial resources to identify and
discipline physicians and surgeons that have repeatedly
recommended excessive cannabis to patients for medical purposes
or repeatedly recommended cannabis to patients for medical
purposes without a good faith examination, as specified,
authorized counties to impose a tax upon specified
cannabis-related activity, and set forth standards for the
licensed cultivation of medical cannabis.
AMENDMENTS:
To ensure that there is parity between the requirements for
cannabis growing, dispensing, transporting, and selling both on
and off of tribal lands, an amendment will be added to the bill
to require that the agreements the Governor executes with tribes
must specify that tribes meet the same local and state licensure
requirements that other licensees who participate in the medical
cannabis industry are subject to.
REGISTERED SUPPORT:
None on file.
REGISTERED OPPOSITION:
None on file.
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Analysis Prepared by:Le Ondra Clark Harvey Ph.D. / B. & P. /
(916) 319-3301