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 ****