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