BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2679


                                                                    Page  1


          (Without Reference to File)

          CONCURRENCE IN SENATE AMENDMENTS
          AB  
          2679 (Cooley, et al.)


          As Amended  August 19, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |79-0  |(May 5, 2016)  |SENATE: |32-7  |(August 29,      |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 



           ------------------------------------------------------------------- 
          |               |     |               |                 |           |
          |               |     |               |                 |           |
          |COMMITTEE      |16-0 |(August 31,    |RECOMMENDATION:  |concur     |
          |VOTE:          |     |2016)          |                 |           |
          |               |     |               |                 |           |
          |               |     |               |                 |           |
          |               |     |               |                 |           |
          |               |     |               |                 |           |
           ------------------------------------------------------------------- 
          Health




          Original Committee Reference:  B. & P.


          SUMMARY:  Exempts collectives or cooperatives that manufacture  
          medical cannabis products from certain criminal sanctions, if  








                                                                    AB 2679


                                                                    Page  2


          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.


               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;








                                                                    AB 2679


                                                                    Page  3




                  (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;


             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.









                                                                    AB 2679


                                                                    Page  4



          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 University of California (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)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.


          2)Establishes within the Department of Consumer Affairs the  








                                                                    AB 2679


                                                                    Page  5


            Bureau of Medical Cannabis Regulation (Bureau) for the  
            licensure and regulation of medical cannabis.


          3)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.


          4)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.


          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 the Department of Public Health 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:  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  








                                                                    AB 2679


                                                                    Page  6


          functioning efficiently and that community input is being  
          effectively considered and tracked.  


          Health and 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.


          Analysis Prepared by:                                             
                          Rosielyn Pulmano / HEALTH / (916) 319-2097  FN:  
          0005022












                                                                    AB 2679


                                                                    Page  7