BILL ANALYSIS Ó
AB 2679
Page 1
Date of Hearing: August 31, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 2679
(Cooley) - As Amended August 19, 2016
SUBJECT: Medical marijuana: regulation: research
SUMMARY: Exempts collectives or cooperatives that manufacture
medical cannabis products from certain criminal sanctions, if
specific requirements are met; requires agencies with regulatory
responsibilities under the Medical Cannabis Regulation and
Safety Act (MCRSA) to include additional information in their
existing reporting requirements to the Legislature, and,
authorizes the University of California (UC) to ascertain the
effect of marijuana on motor skills within its existing
authority to study the efficacy and safety of administering
medical marijuana. Specifically, this bill:
1)Prohibits a collective or cooperative that manufactures
medical cannabis products, as specified, from being subject to
state criminal sanctions, as specified, 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 nonflammable, nontoxic
solvents that are generally recognized as safe pursuant
to the federal Food, Drug, and Cosmetic Act, as
specified.
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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, as specified;
(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; and,
(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, as specified;
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d) The collective or cooperative is in possession of a
valid seller's permit issued by the Board of Equalization;
and,
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.
2)Defines "manufacturing" as the compounding, converting,
producing, deriving, processing or preparing, either directly
or indirectly by chemical extraction or independently by means
of chemical synthesis, medical cannabis products.
3)Requires licensing and regulatory entities with jurisdiction
over the MCRSA to include in their existing reporting
requirements to the Legislature the following: 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.
4)Authorizes the UC, pursuant to its existing authority to study
the efficacy and safety of administering medical marijuana, to
include studies to ascertain the effect of marijuana on motor
skills.
The Senate amendments exempt collectives or cooperatives that
manufacture cannabis by chemical extraction from specified
criminal sanctions.
EXISTING LAW:
1)Requires the California Department of Public Health (DPH) to
establish and maintain a program for a statewide
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identification card system for medical marijuana. Establishes
within DPH the Office of Medical Cannabis Safety to license
manufacturers of medical cannabis.
2)Establishes Proposition 215, also known as the Compassionate
Use Act of 1996, which exempts certain patients and their
primary caregivers from criminal liability under state law for
the possession and cultivation of marijuana.
3)Establishes the MCRSA (formerly referred to as the Medical
Marijuana Regulation and Safety Act) to regulate medical
cannabis in California, including its cultivation,
transportation, storage, distribution, and sale, as specified
in AB 243 (Wood), Chapter 688, Statutes of 2015; AB 266
(Bonta), Chapter 689, Statutes of 2015; and, SB 643 (McGuire),
Chapter 719, Statutes of 2015.
4)Establishes within the Department of Consumer Affairs the
Bureau of Medical Cannabis Regulation (Bureau) for the
licensure and regulation of medical cannabis.
5)Requires each licensing authority under MCRSA to prepare and
submit to the Legislature an annual report on specified
information, including the number of state licensees issued,
renewed, suspended or revoked; the number and type of
enforcement activities; and, the average time it takes to
process state license applications.
6)Establishes the Center for Medicinal Cannabis Research within
the UC to study the efficacy and safety of administering
marijuana as part of a medical treatment.
7)Exempts qualified patients, persons with valid identification
cards and designated primary caregivers of qualified patients
and persons with identification cards, who associate within
the State of California in order collectively or cooperatively
to cultivate cannabis for medical purposes from specified
criminal sanctions. Provides that this exemption is in effect
only until one year after the Bureau posts on its Internet
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Website that licensing authorities have commenced issuing
licenses, as specified.
8)Provides that any person 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
specified as a Schedule I through V drugs will be punished by
imprisonment for three, five, or seven years, and by a fine
not exceeding $50,000, as specified.
FISCAL EFFECT: According to the Assembly Appropriations
Committee analysis of a previous version of this bill which
included the reporting requirements, this bill will have minor
costs to DPH and the California Department of Food and
Agriculture to report specified information (fee-supported
special funds). This bill in its current form was not heard in
the Senate Appropriations Committee and was placed on second
reading file pursuant to Senate Rule 28.8, which indicates this
bill has negligible state costs.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, the MCRSA was
a huge step forward in regulating the medical cannabis
industry which has effectively operated in a legal gray area
since the Passage of Proposition 215. The MCRSA'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.
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2)BACKGROUND. Health & Safety Code Section 11358 provides that
the processing of any part of marijuana, except as provided by
law, is a criminal act. SB 420 (Vasconcellos), Chapter 875,
Statutes of 2003, exempted from specified criminal sanctions,
including criminal sanctions relating to processing, patients
with identification cards, and their designated primary
caregivers, who associate within the State of California in
order collectively or cooperatively to cultivate marijuana for
medical purposes. This exemption from criminal sanction
however, does not apply to the manufacturing of any controlled
substance (including cannabis) by chemical synthesis.
According to the authors, the lack of state protections
continues to impact manufacturers. For example, in mid-June
of this year, a medical cannabis manufacturer who was in
compliance with the local ordinance was raided on the
suspicion of conducting extraction by chemical synthesis.
Additionally, due to the illegal status of medical cannabis
manufacturing, local governments have faced difficulty in
differentiating between legitimate operators and illegitimate
ones, due to a lack of clear standards for conduct.
The authors also cite the decision in People v. Bergen (166
Cal.App.4th 161), as an illustration of the need for this
bill. In that case, the defendant manufactured concentrated
cannabis (hash oil or honey oil) by using butane to extract
the resin containing the psychoactive ingredient
tetrahydrocannabinol from marijuana plant material. The court
imposed a harsher penalty because of the use of chemicals in
producing the concentrated cannabis.
3)POLICY COMMENT. As drafted, this bill does not include a
requirement for the collective or cooperative to comply with
industry standards or any standard on the proper disposal of
waste associated with manufacturing medical cannabis products,
nor specify that staff comply with any training standards for
the use of manufacturing processes, including the proper
handling or storage of solvents or gasses. The authors may
wish to clarify their intent on these issues.
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4)SUPPORT. Supporters such as the Rural County Representatives
of California, the Urban Counties of California and the
California State Association of Counties state that this bill
would provide a criminal defense within the collective model
for cannabis manufacturers if these industry actors conform to
a variety of manufacturing standards. Counties believe this
is necessary to ensure the safety of manufacturing a variety
of medical marijuana products that pose danger to communities.
The City of Walnut Creek provides that this bill will help
prevent devastating incidents such as explosions due to
illegal production and operation, and this bill will clamp
down on the underground operators. The California Cannabis
Industry Association states that this bill will protect the
health and safety of medical cannabis patients while providing
medical cannabis businesses with transparency into state
processes associated with licensing, enforcement, and
administration by the various entities governing medical
cannabis.
SUPPORT
A Therapeutic Alternative
Americans for Safe Access
Cal Heritage
CalCann Holdings, LLC
California Cannabis Industry Association
California Cannabis Manufacturing Association
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California Growers Association
California NORML
California Police Chiefs Association
California State Association of Counties
City of Cathedral City
City of Coachella
City of Oakland
City of Walnut Creek
Clark Neubert LLP
Cultivation Technologies, Inc.
Dark Heart Nursery
Diagnostic Lab Corporation
Ease Solutions, Inc.
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League of California Cities
Los Angeles Cannabis Task Force
Moxie
MuniServices
Scientists and Farmers for Sensible Cannabis Legislation
Rural County Representatives of California
SCV Electric, Inc.
Southern Humboldt Community Alliance
Terra Tech
The Werc Shop
United Cannabis Business Association
United Food and Commercial Workers Western States Council
Urban Counties of California
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Vicente Sederberg LLC
Weedmaps
Wildcat, LLC
One individual
OPPOSITION
None on file.
Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916) 319-2097