BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 2679 Hearing Date: August 25,
2016
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|Author: |Cooley |
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|Version: |August 19, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Sarah Huchel |
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Subject: Medical marijuana: regulation: research
SUMMARY: Requires marijuana licensing authorities to include annual
reports about the number of appeals for license denials,
disciplinary actions, and complaints. Authorizes the University
of California's California Marijuana Research Program (Program)
to develop and conduct studies to ascertain the effect of
marijuana on motor skills and creates a safe harbor for
collectives and cooperatives using specified manufacturing
processes to create medical cannabis products.
NOTE : The Senate floor amendments of 8/19/16 constitute a
rewrite and this measure has been referred to this Committee
pursuant to Senate Rule 29.10 (b) for consideration. The
Committee may, by a vote of the majority, either: (1) hold
the bill, or (2) return the bill to the Senate floor for
consideration, or (3) re-refer the bill to fiscal committee
pursuant to Joint Rule 10.5.
The Senate floor amendments add language to create a safe
harbor for collectives and cooperatives using specified
manufacturing processes to create medical cannabis products.
Existing law:
1) Establishes the Bureau of Medical Marijuana (Bureau) to
oversee the licensing and regulation of medical marijuana.
(Business and Professions Code (BPC) Section 19300, et seq.)
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2) Defines "cannabis" to be all parts of the cannabis plant for
specified species, whether growing or not; the seeds thereof;
the resin, whether crude or purified, extracted from any part
of the plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds,
or resin. (BPC § 19300.5 (f))
3) Defines a "licensing authority" as the state agency
responsible for the issuance, renewal, or reinstatement of
the license, or the state agency authorized to take
disciplinary action against the license. (BPC § 19300.5 (w))
4) Requires each licensing authority to submit annual reports on
the authority's activities to the Legislature beginning on
March 1, 2023, and post the reports on the authority's Web
site. Requires the report to include, but not be limited to,
the following information for the previous fiscal year:
a) The amount of funds allocated and spent by the licensing
authority for medical cannabis licensing, enforcement, and
administration;
b) The number of state licenses issued, renewed, denied,
suspended, and revoked, by state license category;
c) The average time for processing state license
applications, by state license category;
d) The number and type of enforcement activities conducted
by the licensing authorities and by local law enforcement
agencies in conjunction with the licensing authorities or
the Bureau; and,
e) The number, type, and amount of penalties, fines, and
other disciplinary actions taken by the licensing
authorities. (BPC § 19353)
5) Establishes the Program within the University of California
to conduct studies intended to ascertain the general medical
safety and efficacy of marijuana and develop medical
guidelines for its appropriate administration and use.
(Health and Safety Code (HSC) § 11362.9)
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6) Subjects every person, except as otherwise provided by law,
who manufactures, compounds, converts, produces, derives,
processes, or prepares, either directly or indirectly by
chemical extraction or independently by means of chemical
synthesis, any controlled substance to punishment by
imprisonment and by a fine.
(HSC § 11379.6)
This bill:
1)Requires each licensing authority to include the following
additional information in its annual report to the
Legislature:
a) The number of appeals from the denial of state licenses
or other disciplinary actions taken by the licensing
authority and the average time spent on these appeals; and,
b) The number of complaints submitted by citizens or
representatives of cities or counties regarding licensees,
provided as both a comprehensive statewide number and by
geographical region.
2)Authorizes the Program to develop and conduct studies to
ascertain the effect of marijuana on motor skills.
3)Prohibits a collective or cooperative manufacturing medical
cannabis products and operating pursuant to this bill from
state criminal sanctions if the collective or cooperative
abides by all of the following requirements:
a) The collective or cooperative does either or both of
the following:
i) Utilizes only manufacturing processes that are
either solventless or that employ only nonflammable,
nontoxic solvents that are generally recognized as safe
pursuant to the federal Food, Drug, and Cosmetic Act.
ii) Utilizes only manufacturing processes that use
solvents exclusively within a closed-loop system that
meets all of the following requirements:
(1) The system uses only solvents that are
AB 2679 (Cooley) Page 4
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generally recognized as safe pursuant to the federal
Food, Drug, and Cosmetic Act.
(2) The system is designed to recapture and
contain solvents during the manufacturing process, and
otherwise prevent the off-gassing of solvents into the
ambient atmosphere to mitigate the risks of ignition
and explosion during the manufacturing process.
(3) A licensed engineer certifies that the
system was commercially manufactured, safe for its
intended use, and built to codes of recognized and
generally accepted good engineering practices,
including, but not limited to, the American Society of
Mechanical Engineers, the American National Standards
Institute, Underwriters Laboratories, the American
Society for Testing and Materials, or Occupational
Safety and Health Administration Nationally Recognized
Testing Laboratories.
(4) The system has a certification document
that contains the signature and stamp of a
professional engineer and the serial number of the
extraction unit being certified.
b) The collective or cooperative receives and maintains
approval from the local fire official for the closed-loop
system, other equipment, the extraction operation, and the
facility.
c) The collective or cooperative meets required fire,
safety, and building code requirements in one or more of
the following:
i) The California Fire Code.
ii) The National Fire Protection Association
standards.
iii) International Building Code.
iv) The International Fire Code.
v) Other applicable standards, including complying with
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all applicable fire, safety, and building codes in
processing, handling, and storage of solvents or gasses.
d) The collective or cooperative is in possession of a
valid seller's permit issued by the State Board of
Equalization.
e) The collective or cooperative is in possession of a
valid local license, permit, or other authorization
specific to the manufacturing of medical cannabis products,
and in compliance with any additional conditions imposed by
the city or county issuing the local license, permit, or
other authorization.
4)Defines "manufacturing" as compounding, converting, producing,
deriving, processing, or preparing, either directly or
indirectly by chemical extraction or independently by means of
chemical synthesis, medical cannabis products.
5)Makes technical changes.
FISCAL
EFFECT:
According to the Assembly Appropriations Committee analysis
dated April 27, 2016, (prior to the recent amendments), this
bill will have minor costs to the California Department of
Public Health (CDPH) and the California Department of Food and
Agriculture (CDFA) to report specified information
(fee-supported special funds).
This measure was not heard in Senate Appropriations Committee
and was placed on second reading file pursuant to Senate Rule
28.8.
COMMENTS:
1. Purpose. This bill is sponsored by Cultivation Technologies,
Inc. According to the Author, "The Medical Cannabis
Regulation and Safety Act was a huge step forward in
regulating the medical cannabis industry which has
effectively operated in a legal gray area since the passage
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of Prop. 215. The Act's passage last year created a robust
administrative and regulatory structure at the state and
local level over this industry. As the Bureau ramps up
licensure programs and puts regulations in place, it is
important that local governments have clarification about
what types of manufacturing and extraction are allowed. With
this bill, we have set new standards for medical cannabis
manufacturers to follow and have provided new clarity for
local governments when issuing local licenses. Additionally,
accountability and oversight is important to ensure that this
new Bureau is functioning efficiently and that community
input is being effectively considered and tracked."
2. California's Medical Marijuana Regulatory Background.
California began regulating medical marijuana with the
passage of the Compassionate Use Act in 1996, which exempted
patients and their primary caregivers from criminal liability
under state law for the possession and cultivation of
marijuana. In 2003, the Legislature authorized the formation
of medical marijuana cooperatives-nonprofit organizations
that cultivate and distribute marijuana for medical uses to
their members through dispensaries. Most recently, the
Medical Marijuana Regulation and Safety Act (Act) passed in
2015, which consisted of three separate bills enacted
together to license and regulate medical marijuana (AB 243
(Wood, Chapter 688, Statues of 2015); AB 266, (Bonta, Chapter
689, Statutes of 2015); and SB 643 (McGuire, Chapter 719,
Statutes of 2015)). These bills created a comprehensive
state licensing system for the commercial cultivation,
manufacture, retail sale, transport, distribution, delivery,
and testing of medical cannabis. Medical marijuana
cooperatives will be phased out under the Act and replaced by
state-licensed businesses.
This bill will require these entities to annually report to
the Legislature the number of appeals from the denial of
state licenses or other disciplinary actions, the average
time spent on these appeals, and the number of complaints
submitted by citizens or representatives of cities or
counties regarding licensees, provided as both a
comprehensive statewide number and by geographical region.
3. The Center for Medicinal Cannabis Research. Seeing a need to
better understand the medical uses of marijuana, the Program
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was established in 1999 within the Center for Medicinal
Cannabis Research (Center) to determine the efficacy and
safety of administering medical marijuana (SB 847,
Vasconcellos, Chapter 750, Statutes of 1999). The Center
continues to coordinate and support cannabis research, and
focusses on marijuana's potential medicinal benefits for
diseases and conditions identified by the National Academy of
Sciences, Institute of Medicine Report and by the Workshop on
the Medical Utility of Marijuana, National Institutes of
Health. The Center reports that it will be assisting in
evaluating the effects of cannabis on driving, as requested
in AB 266 (Bonta), and on appropriate prescribing practices,
pursuant to SB 643 (McGuire).
This bill authorizes the Center to develop and conduct
studies to ascertain the effect of marijuana on motor skills.
4. Cannabis Product Manufacturing. This bill permits
manufacturing processes that either do not use solvents or
use only those solvents generally recognized as safe within
an approved closed-loop system. Closed-loop extraction are
those enclosed systems in which highly pressurized solvent is
sprayed on cannabis to extract resin.
Current law establishes criminal penalties for anyone who
manufactures compounds, converts, produces, derives,
processes, or prepares, either directly or indirectly by
chemical extraction or independently by means of chemical
synthesis, any controlled substance, including cannabis.
This bill provides a means for cannabis collectives or
cooperatives to manufacture cannabis products without fear of
prosecution if they adhere to the safety standards
established in this bill. These standards will be replaced
by those established for licensing manufacturing facilities
once the Act is in place.
5. Arguments in Support. The Los Angeles Cannabis Task Force
writes in support, "In 2015, California passed the Medical
Cannabis Regulation and Safety Act (MCRSA), the first
regulatory framework for medical cannabis in the state's
history. However, until MCRSA licenses are issued in 2018,
current medical cannabis manufacturers cannot operate
legally, as they were not protected under the old
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'collective' model.
"Despite the well-known existence of medical cannabis
manufacturers, local governments have been stymied in
attempting to properly license and regulate them. Local
governments have faced difficulty in differentiating between
legitimate operators and illegitimate ones, due to a lack of
any clear standards for conduct. In these instances, the
MCRSA requirement that licenses are first obtained at the
local level, before applying for a state license, breaks
down.
"The solution to both of these quandaries is AB 2679, which
would impose rigorous, professional standards that will only
be attainable by the legitimate operators who will be seeking
a state license under MCRSA. With this change, we provide a
path to licensure for industry, clarity to local governments,
and an immediate positive impact on the lives of
manufacturers."
SUPPORT AND OPPOSITION:
Support:
Cultivation Technologies, Inc. (Sponsor)
Americans for Safe Access
CalCann Holdings, LLC
Cal Heritage
California Cannabis Industry Association
California Growers Association
California NORML
California State Association of Counties
City of Cathedral City, California
City of Oakland
City of Wanut Creek
Clark Neubert LLP
Dark Heart Nursery
Diagnostic Lab Corporation
League of California Cities
Los Angeles Cannabis Task Force
Moxie Extracts
MuniServices
Rural County Representatives of California
Scientists and Framers for Sensible Cannabis Legislation
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SCV Electric, Inc.
Southern Humboldt Community Alliance
Terra Tech Corp.
A Therapeutic Alternative
UCBA Trade Association
Urban Counties of California
Vicente Sederberg LLC
Weedmaps
The Werc Shop
Wildcat LLC
Opposition:
None on file as of 8/24/16.
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