BILL ANALYSIS                                                                                                                                                                                                    Ó




           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                       AB 2679|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 


                                   THIRD READING 


          Bill No:  AB 2679
          Author:   Cooley (D), Jones-Sawyer (D), Wood (D), Bonta (D) and  
                    Lackey (R), et al.
          Amended:  8/19/16 in Senate
          Vote:     21 

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  8-0, 6/13/16
           AYES:  Hill, Bates, Block, Gaines, Galgiani, Jackson, Mendoza,  
            Wieckowski
           NO VOTE RECORDED:  Hernandez

           SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  8-0, 8/25/16  
            (Pursuant to Senate Rule 29.10)
           AYES:  Hill, Block, Gaines, Galgiani, Hernandez, Jackson,  
            Mendoza, Wieckowski
           NO VOTE RECORDED:  Bates

           ASSEMBLY FLOOR:  79-0, 5/5/16 (Consent) - See last page for  
            vote

           SUBJECT:   Medical marijuana:  regulation:  research


          SOURCE:    Cultivation Technologies, Inc.


          DIGEST:  This bill 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. 









                                                                    AB 2679  
                                                                    Page  2




          ANALYSIS:  


          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.)

          2)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))

          3)Requires each licensing authority to submit annual reports, as  
            specified, on the authority's activities to the Legislature  
            beginning on March 1, 2023, and post the reports on the  
            authority's Web site. (BPC § 19353)

          4)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 § 11362.9)

          5)Prohibits the manufacturing of any controlled substance, as  
            specified.  (Health and Safety Code § 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  








                                                                    AB 2679  
                                                                    Page  3



               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  
                    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.








                                                                    AB 2679  
                                                                    Page  4




                  (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  
                 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.









                                                                    AB 2679  
                                                                    Page  5



          5)Makes technical changes.
          
          Background

          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.

          The Center for Medicinal Cannabis Research. Seeing a need to  
          better understand the medical uses of marijuana, the Program 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  








                                                                    AB 2679  
                                                                    Page  6



          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. 

          Cannabis product manufacturing.  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.  


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          SUPPORT:   (Verified8/22/16)


          Cultivation Technologies, Inc. (source)
          California Cannabis Industry Association
          California Growers Association
          California NORML
          City of Oakland
          City of Wanut Creek
          League of California Cities
          Los Angeles Cannabis Task Force 
          Moxie Extracts
          MuniServices
          The Werc Shop


          OPPOSITION:   (Verified8/22/16)










                                                                    AB 2679  
                                                                    Page  7



          None received


          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 '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."

          ASSEMBLY FLOOR:  79-0, 5/5/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger  
            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,  
            McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
          NO VOTE RECORDED:  Beth Gaines









                                                                    AB 2679  
                                                                    Page  8



          Prepared by:Sarah Huchel / B., P. & E.D. / (916) 651-4104
          8/25/16 17:23:54


                                   ****  END  ****