BILL ANALYSIS Ó
AB 2672
Page 1
Date of Hearing: April 19, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 2672
(Bonilla) - As Amended April 5, 2016
SUBJECT: Medical cannabis.
SUMMARY: 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 (FGC), Government (GOV), Health and Safety
(HSC), Revenue and Taxation (RTC), and Water Codes (WAT).
EXISTING LAW:
1)Requires specified entities under the jurisdiction of the
Department of Consumer Affairs (DCA) to provide on their
Internet web sites specified information pursuant to the
California Public Records Act and the Information Practices
Act, which must include information on suspensions,
revocations and other enforcement actions against licensees
pursuant to the Administrative Procedure Act; specifies that
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personal information about a licensee is not to be included on
the web site. (BPC Section 27)
2)Specifies the board and bureaus in this state that are under
the jurisdiction of the DCA, including the Bureau. (BPC
Section 101)
3)Specifies that an applicant to become licensed by a board or
bureau, as specified, including the Bureau, under the
jurisdiction of the DCA must submit a full set of fingerprints
for the purposes of conducting criminal history record checks.
(BPC Section 144)
4)Establishes the Fund within the Professions and Vocations
Fund. (BPC Sections 205.1 and 19351)
5)Establishes the Act to provide 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; defines
several terms applicable to the Act; establishes the Bureau
within the DCA to be supervised and controlled by the director
of the DCA; authorizes the Governor to appoint a chief of the
Bureau, to be confirmed by the Senate; specifies that the DCA,
Department of Food and Agriculture (CDFA), and the Department
of Public Health (CDPH) have the authority to issue, renew,
discipline, suspend, or revoke licenses, as specified;
authorizes the Bureau to convene an advisory committee to
advise the Bureau, the DCA, CDFA and CDFA on the development
of standards and regulations; requires the CDFA to make
available a certified organic designation and organic
certification program; requires the CDFA to establish a track
and trace program for reporting the movement of medical
marijuana items throughout the distribution chain, as
specified, requires each licensing authority to establish a
scale of application, licensing, and renewal fees, based on
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the cost of enforcing the Act; appropriates $10 million, as
specified, from the Fund to the DCA to implement the Bureau.
(BPC Section 19300, et seq.)
6)Declares that the environmental impacts associated with
cultivation have increased, and unlawful water diversion for
irrigation have a detrimental effect on fish and wildlife and
their habitat; provides that cultivation sites may require
greater Department of Fish and Wildlife (CDFW) staff time and
personnel expenditures; requires the CDFW to establish the
watershed enforcement program; requires the CDFW to coordinate
with the State Water Resources Control Board (SWRCB) to
establish a permanent multiagency task force to address
environmental impacts, adopt regulations and a fee schedule.
(FGC Section 12029)
7)Subjects any agency, authority, board, bureau, commission,
conservancy, council, department, division, or office of state
government, except as specified, to sunset review by the Joint
Sunset Review Committee, or relevant policy committees. (GOV
Section 9147.7)
8)Provides that indoor and outdoor cultivation activities must
adhere to state and local laws, as specified; provides that
state agencies, as specified, must address environmental
impacts and coordinate enforcement efforts. (HSC Section
11362.769)
9)Provides that qualified patients, as specified, who associate
within the state in order to collectively or cooperatively
cultivate are not solely based on that fact subject to
criminal sanctions; provides that this section is repealed
upon issuance of licenses under the Act one year after the
licensing authorities begin granting licenses. (HSC Section
11362.775)
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10) Requires the CDFA to establish the Medical Cannabis
Cultivation Program (MCCP) to be administered by the secretary
of the CDFA, except as specified; specifies that a person or
entity who intends to cultivate must first obtain a license,
permit or other entitlement, as specified; specifies that a
person or entity must obtain a license, permit or other
entitlement pursuant to local provisions prior to applying for
state licensure; specifies that an application for a license
to cultivate cannot be submitted if it violates local
ordinances; authorizes local jurisdictions to issue or deny a
permit to cultivate; provides that a city, county to city and
count that issues or denies a conditional licensee to
cultivate must notify the CDFA; authorizes the secretary of
the CDFA to adopt and enforce regulations or emergency
regulations relating to implementing the MCCP; authorizes the
secretary of the CDFA to enter into a cooperative agreement
with a county agricultural commissioner to carry out
provisions; provides that the CDFA, in consultation with eh
Bureau, SWRCB, CDFW, and other state agencies as appropriate,
consider environmental impacts when developing the MCCP;
requires the CDFA to establish a program for the
identification of permitted plants at a cultivation site,
including identifiers and a fee structure; exempts a qualified
patient who cultivates for personal use, as specified. (HSC
Section 11362.777)
11) Requires the State Board of Equalization (BOE), in
consultation with the CDFA, to adopt a system for reporting
the movement of commercial cannabis and cannabis products
throughout the distribution chain, employing secure packaging
and be capable of providing information to the BOE. (RTC
Section 31020)
12) Expands the multiagency task force pilot project into a
permanent project the address the environmental impacts of
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cannabis cultivation on public and private lands in California
to ensure the reduction of adverse impacts throughout the
state. (WAT Section 13726)
THIS BILL:
13) Renames the act as the Medical Cannabis Regulation and
Safety Act and the bureau as the Bureau of Medical Cannabis
Regulation.
14) Renames the fund as the Medical Cannabis Regulation and
Safety Act Fund and the account as the Medical Cannabis Fines
and Penalties Account.
15) Makes conforming changes to the act and would replace the
term "marijuana" with the term "cannabis."
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, "The term marijuana derives from a folk term for
cannabis brought over by Mexican immigrants who sought refuge
from the Mexican Revolution. As the recreational use of smoking
cannabis and racial prejudice grew, propaganda against cannabis
featured false, lurid stories about African-American and Mexican
men committing outrageous acts of murder and mayhem. Marijuana
effectively became more associated with these false stereotypes
and less with a form of medicine. The term cannabis is a more
appropriate medical and botanical term as it does not carry the
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stigma that marijuana does."
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),
Chapter 875, Statutes of 2003, established the Medical Marijuana
Program Act (MMP). The MMP, among other things, required the
California Department of Public Health (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.
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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
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, 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.) 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.
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Center for Medicinal Cannabis Research. According to 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 continues, "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, which legalized the use of medical
marijuana. 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
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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.
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.
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
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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.
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 1575 (Bonta) of the current legislative session makes a
number of changes to the Act including, among others: specifies
that it is not a violation of state law for certain licensees to
sell medical cannabis under 8 ounces; specifies that no
individual or group may cultivate or distribute cannabis other
than what is specified in the Act or the Compassionate Use Act;
and, exempts any commercial cannabis activity by a holder of a
state license who complies with the Act. STATUS: This bill is
pending in the Assembly Committee on Banking and Finance.
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
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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 2545 (Bonta) of the current legislative session authorizes
the Governor to enter into agreements with federally recognized
sovereign Indian tribes, as defined; authorizes these agreements
to include provisions regulating activities between licensees
operating on and off the land of federally recognized sovereign
Indian tribes; authorizes the Governor to delegate to the chief
of the Bureau authority to negotiate these agreements. 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
(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
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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 CMCS 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.
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
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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.
REGISTERED SUPPORT:
None on file.
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Gabby Nepomuceno / B. & P. / (916) 319-3301