Amended in Senate April 6, 2015

Senate BillNo. 643


Introduced by Senator McGuire

February 27, 2015


begin deleteAn act relating to medical marijuana. end deletebegin insertAn act to amend Section 2220.05 of, to add Article 25 (commencing with Section 2525) to Chapter 5 of Division 2 of, and to add Part 5 (commencing with Section 18100) to Division 7 of, the Business and Professions Code, to add Section 23028 to the Government Code, and to amend Section 11362.775 of, and to add Article 8 (commencing with Section 111658) to Chapter 6 of Part 5 of Division 104 of, the Health and Safety Code, relating to medical marijuana, and making an appropriation therefor.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 643, as amended, McGuire. Medical marijuana.

begin insert

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 6, 1996, statewide general election, authorizes the use of marijuana for medical purposes. Existing law enacted by the Legislature requires the establishment of a program for the issuance of identification cards to qualified patients so that they may lawfully use marijuana for medical purposes, and requires the establishment of guidelines for the lawful cultivation of marijuana grown for medical use. Existing law provides for the licensure of various professions by the Department of Consumer Affairs. Existing law, the Sherman Food, Drug, and Cosmetic Law, provides for the regulation of food, drugs, devices, and cosmetics, as specified. A violation of that law is a crime.

end insert
begin insert

This bill would establish within the Department of Consumer Affairs a Bureau of Medical Marijuana Regulation, under the supervision and control of the Chief of the Bureau of Medical Marijuana Regulation, and would require the bureau to license and regulate dispensing facilities, cultivation sites, transporters, and manufacturers of medical marijuana and medical marijuana products, subject to local ordinances. The bill would require a background check of applicants for licensure, as defined, to be administered by the Department of Justice, and submission of a statement signed by an applicant, under penalty of perjury, that the information on his or her application is true, thereby creating a crime and imposing a state-mandated local program. Violation of the provisions related to applying for a conditional license would be punishable by a civil fine of up to $35,000 for each individual violation, or as otherwise specified.

end insert
begin insert

The bill would make conditional licenses subject to the restrictions of the local jurisdiction in which the facility operates or proposes to operate. The bill would authorize a facility or entity that is operating in conformance with local zoning ordinances and other state and local requirements on January 1, 2016, to continue its operations until its application for conditional licensure is approved or denied. The bill would set forth provisions related to the transportation, testing, and distribution of medical marijuana. The bill would prohibit the distribution of any form of advertising for physician recommendations for medical marijuana, unless the advertisement bears a specified notice and requires that the advertisement meet specified requirements and not be fraudulent, deceitful, or misleading.

end insert
begin insert

The bill would establish the Medical Marijuana Regulation Fund and would require the deposit of specified fees collected pursuant to this act into the fund. The bill would continuously appropriate moneys from the fund to the bureau for the purposes of administering this act, thereby making an appropriation. The bill would also establish the Special Account for Environmental Enforcement within the Medical Marijuana Fund. This account would contain money from fees assessed against licensed cultivation sites and would be continuously appropriated for the enforcement of environmental regulations relating to licensed cultivation sites. The bill would require the deposit of penalty moneys collected pursuant to this bill into the General Fund.

end insert
begin insert

The bill would ban cultivation sites in areas zoned residential and would require, among other things, that all marijuana grown, produced, distributed, and sold in the state meet the certified organic standards by January 1, 2022, and that the bureau establish “appellations of origin” for marijuana grown in the state.

end insert
begin insert

The bill would provide that it shall not supersede provisions of Measure D, as approved by the voters of the City of Los Angeles, or other similar measures, as specified.

end insert
begin insert

The bill would authorize a city, county, or city and county to administer and enforce these provisions. The bill would require the bureau to establish quality assurance protocols by January 1, 2018, to ensure uniform testing standards of medical marijuana, and would require licensees to comply with these provisions. The bill would further set forth provisions regulating edible medical marijuana products, as specified. By adding these provisions to the Sherman Food, Drug, and Cosmetic Law, a violation of which is a crime, the bill would impose a state-mandated local program.

end insert
begin insert

(2) Existing law, the Medical Practice Act, provides for the licensure and regulation of physicians and surgeons by the Medical Board of California. Existing law requires the board to prioritize investigations and prosecutions of physicians and surgeons representing the greatest threat of harm, as specified. Existing law identifies the cases that are to be given priority, which include cases of repeated acts of excessively prescribing, furnishing, or administering controlled substances without a good faith prior examination of the patient. Existing law provides that a violation of the Medical Practice Act is a crime.

end insert
begin insert

This bill would require the board to consult with the Center for Medicinal Cannabis Research on developing and adopting medical guidelines for the appropriate administration and use of marijuana.

end insert
begin insert

The bill would also make it a misdemeanor for a physician and surgeon who recommends marijuana to a patient for a medical purpose to accept, solicit, or offer any remuneration from or to a licensed dispensing facility in which the physician and surgeon or his or her immediate family has a financial interest. By creating a new crime, the bill would impose a state-mandated local program.

end insert
begin insert

The bill would provide that specified acts of recommending marijuana for medical purposes without a good faith examination are among the types of cases that should be given priority for investigation and prosecution by the board, as described above. The bill would further prohibit a physician and surgeon from recommending medical marijuana to a patient unless that person is the patient’s attending physician, as defined. Because a violation of that provision would be a crime, the bill would impose a state-mandated local program.

end insert
begin insert

(3) Existing law authorizes the legislative body of a city or county to impose various taxes, including a transactions and use tax at a rate of 0.25%, or a multiple thereof, if approved by the required vote of the legislative body and the required vote of qualified voters, and limits the combined rate of transactions and use taxes within a city or county to 2%.

end insert
begin insert

This bill would authorize the board of supervisors of a county or the city council of a city to impose a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing marijuana or products containing marijuana. The bill would authorize the tax to be imposed for either general or specific governmental purposes. The bill would require a tax imposed pursuant to this authority to be subject to any applicable voter approval requirement.

end insert
begin insert

(4) Existing law exempts qualified patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards from certain crimes, including possession of concentrated cannabis and marijuana, cultivation of marijuana, and possession of marijuana for sale.

end insert
begin insert

This bill would also exempt from those crimes an employee, officer, or board member of a licensed cultivation site or a licensed dispensing facility, except as specified.

end insert
begin insert

(5) Existing law imposes sales and use taxes, as specified, to be collected by the State Board of Equalization.

end insert
begin insert

This bill would require the State Board of Equalization, on or before July 1, 2016, to compile a report that includes the actual tax collected on the sale of medical marijuana, using the most current data available, and the expected tax revenues, under the existing tax structure, for the years 2016 to 2021, inclusive, and to submit that report to the Legislature and Governor’s Office.

end insert
begin insert

(6) This bill would provide that its provisions are severable.

end insert
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(7) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

end insert
begin insert

This bill would make legislative findings to that effect.

end insert
begin insert

(8) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert
begin delete

Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the voters at the November 6, 1996, statewide general election, authorizes the use of marijuana for medical purposes. Existing law enacted by the Legislature, commonly referred to as the Medical Marijuana Program Act, requires the establishment of a program for the issuance of identification cards to qualified patients so that they may lawfully use marijuana for medical purposes, and requires the establishment of guidelines for the lawful cultivation of marijuana grown for medical use.

end delete
begin delete

This bill would express the Legislature’s intent to enact legislation that would, among other things, reaffirm and clarify aspects of the Medical Marijuana Program Act, regulate the cultivation of medical marijuana, and authorize and appropriate adequate funding for the Board of Equalization to undertake a study, as specified, in order to make recommendations on the best way to levy and collect fees to regulate the cultivation and sale of medical marijuana.

end delete

Vote: majority. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

The people of the State of California do enact as follows:

P5    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertThis act shall be known, and may be cited, as the
2Medical Marijuana Public Safety and Environmental Protection
3Act.end insert

4begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

The Legislature finds and declares all of the following:

end insert
begin insert

5(a) In 1996, the people of the State of California enacted the
6Compassionate Use Act of 1996, codified in Section 11362.5 of
7the Health and Safety Code. The people of the State of California
8declared that their purpose in enacting the measure was, among
9other things, “to ensure that seriously ill Californians have the
10right to obtain and use marijuana for medical purposes where that
11medical use is deemed appropriate and has been recommended
12by a physician who has determined that the person’s health would
13benefit from the use of marijuana in the treatment of cancer,
14anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis,
15migraine, or any other illness for which marijuana provides relief.”

end insert
begin insert

16(b) The Compassionate Use Act of 1996 called on state
17government to implement a plan for the safe and affordable
P6    1distribution of marijuana to all patients in medical need of
2marijuana, while ensuring that nothing in that act would be
3construed to condone the diversion of marijuana for nonmedical
4purposes.

end insert
begin insert

5(c) In 2003, the Legislature enacted the Medical Marijuana
6Program Act (MMPA), codified in Article 2.5 (commencing with
7Section 11362.7) of Chapter 6 of Division 10 of the Health and
8Safety Code.

end insert
begin insert

9(d) Greater certainty and minimum statewide standards are
10urgently needed regarding the obligations of medical marijuana
11facilities, and for the imposition and enforcement of regulations
12to prevent unlawful cultivation and the diversion of marijuana to
13nonmedical use.

end insert
begin insert

14(e) Despite the passage of the Compassionate Use Act of 1996
15and the MMPA, because of the lack of an effective statewide system
16for regulating and controlling medical marijuana, cities, counties,
17and local law enforcement officials have been confronted with
18uncertainty about the legality of some medical marijuana
19cultivation and distribution activities. The current state of affairs
20makes law enforcement difficult and endangers patient safety
21because of an inability to monitor the supply of medical marijuana
22in the state and the lack of quality control, testing, and labeling
23requirements.

end insert
begin insert

24(f) The California Constitution grants cities and counties the
25authority to make and enforce, within their borders, “all local
26police, sanitary, and other ordinances and regulations not in
27conflict with the general laws.” This inherent local police power
28includes broad authority to determine, for purposes of public
29health, safety, and welfare, the appropriate uses of land within the
30local jurisdiction’s borders. The police power, therefore, allows
31each city and county to determine whether or not a medical
32marijuana dispensary or other facility that makes medical
33marijuana available may operate within its borders. This authority
34has been upheld by City of Riverside v. Inland Empire Patients
35Health and Wellness Center, Inc. (2013) 56 Cal.4th 729 and
36County of Los Angeles v. Hill (2011) 192 Cal.App.4th 861. Nothing
37in this act shall diminish, erode, or modify that authority.

end insert
begin insert

38(g) If a city or county determines that a dispensary or other
39facility that makes medical marijuana available may operate within
40its borders, then there is a need for the state to license these
P7    1dispensaries and other facilities for the purpose of adopting and
2enforcing protocols for security standards at dispensaries and in
3the transportation of medical marijuana, as well as health and
4safety standards to ensure patient safety. This licensing
5requirement is not intended in any way nor shall it be construed
6to preempt local ordinances, regulations, or enforcement actions
7regarding the sale and use of medical marijuana, including, but
8not limited to, security, signage, lighting, and inspections.

end insert
begin insert

9(h) Greater oversight, uniformity, and enforcement are urgently
10needed regarding the obligations and rights of medical marijuana
11cultivators, transporters, and distribution facilities.

end insert
begin insert

12(i) Marijuana has widely accepted medical applications that
13make it inappropriate to be classified as a Schedule I controlled
14substance in the State of California.

end insert
begin insert

15(j) For the protection of Californians, the state must act to
16regulate and control medical marijuana and not preempt local
17government ordinances. Cities and counties should be allowed to
18impose local taxes and enact zoning regulations and other
19restrictions applicable to the cultivation, transportation, and
20distribution of medical marijuana based on local needs.

end insert
begin insert

21(k) For the protection of California’s environment and its
22natural resources, all efforts must be made to prevent and mitigate
23the harmful environmental impacts that can be associated with
24some marijuana cultivation.

end insert
begin insert

25(l) The North Coast Regional Water Quality Control Board is
26currently in the process of promulgating regulations that would
27create a 3-tiered system for cultivator wastewater discharge
28 permits. A similar permitting system would assist the state in
29controlling damaging wastewater runoff from cultivation sites,
30while minimizing the burden on smaller cultivators.

end insert
begin insert

31(m) Nothing in this act shall have a diminishing effect on the
32rights and protections granted to a patient or primary caregiver
33pursuant to the Compassionate Use Act of 1996.

end insert
begin insert

34(n) Nothing in this act shall be construed to promote or facilitate
35the nonmedical, recreational possession, sale, or use of marijuana.

end insert
36begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 2220.05 of the end insertbegin insertBusiness and Professions Codeend insert
37begin insert is amended to read:end insert

38

2220.05.  

(a) In order to ensure that its resources are maximized
39for the protection of the public, the Medical Board of California
40shall prioritize its investigative and prosecutorial resources to
P8    1ensure that physicians and surgeons representing the greatest threat
2of harm are identified and disciplined expeditiously. Cases
3involving any of the following allegations shall be handled on a
4priority basis, as follows, with the highest priority being given to
5cases in the first paragraph:

6(1) Gross negligence, incompetence, or repeated negligent acts
7that involve death or serious bodily injury to one or more patients,
8such that the physician and surgeon represents a danger to the
9public.

10(2) Drug or alcohol abuse by a physician and surgeon involving
11death or serious bodily injury to a patient.

12(3) Repeated acts of clearly excessive prescribing, furnishing,
13or administering of controlled substances, or repeated acts of
14prescribing, dispensing, or furnishing of controlledbegin delete substancesend delete
15begin insert substances, or recommending marijuana to patients for medical
16purposes,end insert
without a good faith prior examination of the patient
17and medical reason therefor. However, in no event shall a physician
18and surgeon prescribing, furnishing, or administering controlled
19substances for intractable pain consistent with lawful prescribing,
20including, but not limited to, Sections 725, 2241.5, and 2241.6 of
21this code and Sections 11159.2 and 124961 of the Health and
22Safety Code, be prosecuted for excessive prescribing and prompt
23review of the applicability of these provisions shall be made in
24any complaint that may implicate these provisions.

25(4) Sexual misconduct with one or more patients during a course
26of treatment or an examination.

27(5) Practicing medicine while under the influence of drugs or
28alcohol.

29(b) The board may by regulation prioritize cases involving an
30allegation of conduct that is not described in subdivision (a). Those
31cases prioritized by regulation shall not be assigned a priority equal
32to or higher than the priorities established in subdivision (a).

33(c) The Medical Board of California shall indicate in its annual
34report mandated by Section 2312 the number of temporary
35restraining orders, interim suspension orders, and disciplinary
36actions that are taken in each priority category specified in
37subdivisions (a) and (b).

38begin insert

begin insertSEC. 4.end insert  

end insert

begin insertArticle 25 (commencing with Section 2525) is added
39to Chapter 5 of Division 2 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert,
40to read:end insert

begin insert

P9    1 

2Article begin insert25.end insert  Recommending Medical Marijuana
3

 

4

begin insert2525.end insert  

(a) It is unlawful for a physician and surgeon who
5recommends marijuana to a patient for a medical purpose to
6accept, solicit, or offer any form of remuneration from or to a
7facility issued a conditional license pursuant to Part 5
8(commencing with Section 18100) of Division 7, if the physician
9and surgeon or his or her immediate family have a financial
10interest in that facility.

11(b) For the purposes of this section, “financial interest” shall
12have the same meaning as in Section 650.01.

13(c) A violation of this section shall be a misdemeanor.

14

begin insert2525.1.end insert  

The Medical Board of California shall consult with
15the California Marijuana Research Program, known as the Center
16for Medicinal Cannabis Research, authorized pursuant to Section
1711362.9 of the Health and Safety Code, on developing and adopting
18medical guidelines for the appropriate administration and use of
19medical marijuana.

20

begin insert2525.2.end insert  

A physician and surgeon shall not recommend medical
21marijuana to a patient, unless that person is the patient’s attending
22physician, as defined by subdivision (a) of Section 11362.7 of the
23Health and Safety Code.

end insert
24begin insert

begin insertSEC. 5.end insert  

end insert

begin insertPart 5 (commencing with Section 18100) is added to
25Division 7 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert, to read:end insert

begin insert

26 

27PART begin insert5.end insert  Medical Marijuana

28

28 

29Chapter  begin insert1.end insert General Provisions
30

 

31

begin insert18100.end insert  

For purposes of this part, the following definitions shall
32apply:

33(a) “Bureau” means the Bureau of Medical Marijuana
34Regulation in the Department of Consumer Affairs.

35(b) “Certified testing laboratory” means a laboratory that is
36certified by the bureau to perform random sample testing of
37medical marijuana pursuant to the certification standards for these
38facilities promulgated by the bureau.

39(c) “Chief” means the Chief of the Bureau of Medical Marijuana
40Regulation.

P10   1(d) “Department” means the Department of Consumer Affairs.

2(e) “Director” means the Director of Consumer Affairs.

3(f) “Dispensary” means a distribution operation that provides
4medical marijuana or medical marijuana derived products to
5patients and caregivers.

6(g) “Fund” means the Medical Marijuana Regulation Fund
7established pursuant to Section 18118.

8(h) “Licensed cultivation site” means a facility that plants,
9grows, cultivates, harvests, dries, or processes medical marijuana
10and that is issued a conditional license pursuant to this part.

11(i) “Licensed dispensing facility” means a dispensary or other
12facility that provides medical marijuana, medical marijuana
13products, or devices for the use of medical marijuana or medical
14marijuana products that is issued a conditional license pursuant
15to this part.

16(j) “Licensed manufacturer” means a person who extracts,
17prepares, derives, produces, compounds, or repackages medical
18marijuana or medical marijuana products into consumable and
19nonconsumable forms and that is issued a conditional license
20pursuant to this part.

21(k) “Licensed transporter” means an individual or entity issued
22a conditional license by the bureau to transport medical marijuana
23to and from facilities that have been issued conditional licenses
24pursuant to this part.

25(l) “Marijuana” means all parts of the plant Cannabis sativa,
26cannabis indica, or cannabis ruderalis, whether growing or not;
27the seeds thereof; the resin, whether crude or purified, extracted
28from any part of the plant; and every compound, manufacture,
29salt, derivative, mixture, or preparation of the plant, its seeds, or
30resin. “Marijuana” does not include the mature stalks of the plant,
31fiber produced from the stalks, oil or cake made from the seeds of
32the plant, any other compound, manufacture, salt, derivative,
33mixture, or preparation of the mature stalks (except the resin
34extracted therefrom), fiber, oil, or cake, or the sterilized seed of
35the plant which is incapable of germination. “Marijuana” also
36means marijuana, as defined by Section 11018 of the Health and
37Safety Code.

38(m) “Trespass grows” means illicit marijuana cultivation on
39public or private land without the explicit permission of the land
40owner.

P11   1

begin insert18101.end insert  

(a) There is hereby created in the Department of
2Consumer Affairs the Bureau of Medical Marijuana Regulation,
3under the supervision and control of the Chief of the Bureau of
4Medical Marijuana Regulation.

5(b) Protection of the public shall be the highest priority for the
6bureau in exercising its licensing, regulatory, and disciplinary
7functions. Whenever the protection of the public is inconsistent
8with other interests sought to be promoted, the protection of the
9public shall be paramount.

10(c) The bureau shall have the authority to issue, suspend, or
11revoke conditional licenses for the cultivation, manufacture,
12transportation, storage, distribution, and sale of medical marijuana
13within the state and to collect fees in connection with these actions.
14The bureau shall have the authority to create, issue, suspend, or
15revoke other licenses in order to protect patient health and the
16public and to facilitate the regulation of medical marijuana.

17(d) The Governor shall appoint the chief at a salary to be fixed
18and determined by the director with the approval of the Director
19of Finance. The chief shall serve in accordance with the State Civil
20Service Act (Part 2 (commencing with Section 18500) of Division
215 of Title 2 of the Government Code).

22(e) The duty of enforcing and administering this part shall be
23vested in the chief, who is responsible to the director. The chief
24may adopt and enforce those rules and regulations that he or she
25determines are reasonably necessary to carry out the purposes of
26this part and declaring the policy of the bureau, including a system
27for the issuance of citations for violations of this part, as specified
28in Section 18126.

29(f) The chief, as necessary to carry out the provisions of this
30part, and in accordance with the State Civil Service Act (Part 2
31(commencing with Section 18500) of Division 5 of Title 2 of the
32Government Code), may appoint and fix the compensation of
33personnel, including, but not limited to, clerical, inspection,
34investigation, and auditing personnel, as well as an assistant chief.
35These personnel shall perform their respective duties under the
36supervision and the direction of the chief.

37(g) Every power granted to, or duty imposed upon, the chief
38under this part may be exercised or performed in the name of the
39chief by a deputy or assistant chief, subject to conditions and
40limitations that the chief prescribes.

P12   1(h) The bureau shall exercise its authority pursuant to this part
2consistent with Section 1 of the act that added this section and
3consistent with the provisions of this part.

4

begin insert18102.end insert  

Funds for the establishment and support of the bureau
5shall be advanced as a loan by the department and shall be repaid
6by the initial proceeds from fees collected pursuant to this part or
7any rule or regulation adopted pursuant to this part.

8

begin insert18103.end insert  

The bureau shall have the authority necessary for the
9implementation of this part, including, but not limited to, all of the
10following:

11(a) Establishing rules or regulations necessary to carry out the
12purposes and intent of this part and to enable the bureau to
13exercise the powers and perform the duties conferred upon it by
14this part and in accordance with Chapter 3.5 (commencing with
15Section 11340) of Part 1 of Division 3 of Title 2 of the Government
16Code. For the performance of its duties, the bureau has the powers
17as set forth in Article 2 (commencing with Section 11180) of
18Chapter 2 of Part 1 of Division 3 of Title 2 of the Government
19Code.

20(b) Issuing conditional licenses to persons for the cultivation,
21manufacture, transportation, storage, distribution, and sale of
22medical marijuana within the state.

23(c) Setting application, licensing, and renewal fees for
24conditional licenses issued pursuant to Section 18117.

25(d) Establishing standards for the cultivation, manufacturing,
26transportation, storage, distribution, provision, donation, and sale
27of medical marijuana and medical marijuana products.

28(e) Establishing procedures for the issuance, renewal,
29suspension, denial, and revocation of conditional licenses.

30(f) Imposing a penalty authorized by this part or any rule or
31regulation adopted pursuant to this part.

32(g) Taking action with respect to an application for a conditional
33 license in accordance with procedures established pursuant to this
34part.

35(h) Overseeing the operation of the Medical Marijuana
36Regulation Fund and the Special Account for Environmental
37Enforcement, established pursuant to Section 18118.

38(i) Consulting with other state or local agencies, departments,
39representatives of the medical marijuana community, or public or
P13   1private entities for the purposes of establishing statewide standards
2and regulations.

3(j) Certifying laboratories to perform testing of medical
4marijuana.

5

begin insert18104.end insert  

(a) On or before January 1, 2018, the bureau shall
6promulgate regulations for implementation and enforcement of
7this part, including, but not limited to, all of the following:

8(1) Procedures for the issuance, renewal, suspension, denial,
9and revocation of conditional licenses.

10(2) Procedures for appeal of fines and the appeal of denial,
11suspension, or revocation of conditional licenses.

12(3) Application, licensing, and renewal forms and fees.

13(4) A time period in which the bureau shall approve or deny an
14application for a conditional license pursuant to this part.

15(5) Qualifications for licensees.

16(6) Standards for certification of testing laboratories to perform
17random sample testing of all medical marijuana products,
18including standards for onsite testing.

19(A) Certification of testing laboratories shall be consistent with
20general requirements for the competence of testing and calibration
21activities, including sampling, using standard methods established
22by the International Organization for Standardization, specifically
23ISO/IEC 17025.

24(B) These requirements shall apply to all entities, including
25third-party laboratories, engaged in the testing of medical
26marijuana pursuant to this part.

27(7) Requirements to ensure conformance with standards
28analogous to state statutory environmental, agricultural, consumer
29protection, and food and product safety requirements. At a
30minimum, these standards shall do all of the following:

31(A) Prescribe sanitation standards analogous to the California
32Retail Food Code (Part 7 (commencing with Section 113700) of
33Division 104 of the Health and Safety Code) for food preparation,
34storage, handling, and sale of edible medical marijuana products.

35(B) Require that edible medical marijuana products produced,
36distributed, provided, donated, or sold by licensees shall be limited
37to nonpotentially hazardous food, as established by the State
38Department of Public Health pursuant to Section 114365.5.

39(C) Require that facilities in which edible medical marijuana
40products are prepared shall be constructed in accordance with
P14   1 applicable building standards, health and safety standards, and
2other state laws.

3(D) Provide that weighing or measuring devices used in
4connection with the sale or distribution of medical marijuana are
5required to meet standards analogous to Division 5 (commencing
6with Section 12001).

7(E) Require that the application of pesticides or other pest
8control in connection with the indoor or outdoor cultivation of
9medical marijuana shall meet standards analogous to Division 6
10(commencing with Section 11401) of the Food and Agricultural
11Code and its implementing regulations.

12(b) On or before July 1, 2017, the bureau shall also promulgate
13regulations for minimum statewide health and safety standards
14and quality assurance standards associated with the cultivation,
15transport, storage, manufacture, and sale of all medical marijuana
16produced in this state. Consistent with Section 18126, local
17agencies shall have primary responsibility for enforcement of these
18standards in accordance with bureau regulations.

19(c) The bureau, in consultation with the Division of Labor
20Standards Enforcement, shall adopt regulations establishing
21worker safety standards for entities licensed pursuant to this part.

22(d) The bureau, in consultation with the State Water Resources
23Control Board, shall adopt regulations to ensure that commercial
24medical marijuana activity licensed pursuant to this part does not
25threaten the state’s environment and watersheds and is otherwise
26in conformance with the California Environmental Quality Act.

27(e) The bureau shall not issue a conditional license unless the
28applicant has met all of the requirements of this part, including
29 the requirements of paragraph (4) of subdivision (d) of Section
3018110.

31

begin insert18105.end insert  

The chief shall keep a complete record of all facilities
32issued a conditional license. This record shall be made available
33on the bureau’s Internet Web site.

34

begin insert18106.end insert  

The bureau shall establish procedures to provide state
35and local law enforcement, upon their request, with 24-hour access
36to information to verify a conditional license, track transportation
37manifests, and track the inventories of facilities issued a conditional
38license.

39

begin insert18107.end insert  

This part shall in no way supersede the provisions of
40Measure D, approved by the voters of the City of Los Angeles on
P15   1the May 21, 2013, ballot for the city, or any similar measure in
2other jurisdictions, which grants medical marijuana businesses
3and dispensaries qualified immunity consistent with the terms of
4the measure and local ordinances. Notwithstanding the provisions
5of this part, marijuana businesses and dispensaries subject to the
6provisions of Measure D or other similar qualified immunity shall
7continue to be subject to the ordinances and regulations of the
8relevant local jurisdiction.

9 

10Chapter  begin insert2.end insert Conditional Licenses
11

 

12

begin insert18108.end insert  

The following persons are exempt from the requirement
13of licensure under this part:

14(a) A patient who cultivates, possesses, stores, manufactures,
15or transports marijuana exclusively for his or her personal medical
16use and who does not sell, distribute, donate, or provide marijuana
17to any other person or entity.

18(b) A primary caregiver who cultivates, possesses, stores,
19manufactures, transports, or provides marijuana exclusively for
20the personal medical purposes to no more than five specified
21qualified patients for whom he or she is the primary caregiver
22within the meaning of Section 11362.7 of the Health and Safety
23Code and who does not receive remuneration for these activities,
24except for compensation in full compliance with subdivision (c)
25of Section 11362.765 of the Health and Safety Code. Nothing in
26this section shall permit primary caregivers to organize themselves
27as cooperatives or collectives of caregivers.

28

begin insert18109.end insert  

(a) Except as provided in Section 11362.5 of, and
29Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
30Division 10 of, the Health and Safety Code, a person shall not sell
31or provide medical marijuana to a patient or caregiver other than
32at a licensed dispensing facility or through delivery from a licensed
33dispensing facility.

34(b) Except as provided in Section 11362.5 of, and Article 2.5
35(commencing with Section 11362.7) of Chapter 6 of Division 10
36of, the Health and Safety Code, a person shall not grow medical
37marijuana other than at a licensed cultivation site.

38(c) Except as provided in Section 11362.5 of, and Article 2.5
39(commencing with Section 11362.7) of Chapter 6 of Division 10
40of, the Health and Safety Code, a person shall not manufacture
P16   1medical marijuana or medical marijuana products other than a
2licensed manufacturer.

3(d) A person shall not transport medical marijuana from one
4facility issued a conditional license to another, other than a
5licensed transporter.

6(e) A licensed manufacturer may obtain medical marijuana
7from a licensed cultivator and may furnish medical marijuana
8products to a licensed dispensary.

9(f) To meet the requirements of Article 8 (commencing with
10Section 111658) of Chapter 6 of Part 5 of Division 104 of the
11Health and Safety Code, medical marijuana and medical marijuana
12products shall be tested by a certified testing laboratory.

13

begin insert18110.end insert  

(a) Beginning no later than July 1, 2018, the bureau
14shall provide for and shall issue conditional licenses. Conditional
15licenses shall be issued for all activity authorized under this
16chapter, including, but not limited to, cultivation, processing,
17storage, transport, and dispensing of medical marijuana.

18(b) The issuance of a conditional license shall not, in and of
19itself, authorize the recipient to begin business operations. The
20conditional license shall certify, at a minimum, that the applicant
21has paid the state conditional licensing fee, successfully passed a
22criminal background check, and met the state residency
23requirements.

24(c) In order to begin business operations pursuant to this
25chapter, an applicant shall, in addition to the conditional license,
26obtain a license or permit from the local jurisdiction in which he
27or she proposes to operate, following the requirements of the
28applicable local ordinances.

29(d) An applicant for a conditional license shall do all following:

30(1) Pay the fee or fees required by this part for each license
31being applied for.

32(2) Register with the bureau on forms prescribed by the chief.
33The forms shall contain sufficient information to identify the
34licensee, including all of the following:

35(A) Name of the owner or owners of a proposed facility,
36including all persons or entities having an ownership interest other
37than a security interest, lien, or encumbrance on property that will
38be used by the applicant.

39(B) The name, address, and date of birth of each principal
40officer and board member.

P17   1(C) The address and telephone number of the proposed facility.

2(D) In the case of a cultivation site, the GPS coordinates of the
3site.

4(3) Describe, in writing, the scope of business of the proposed
5facility.

6(4) Provide evidence that the applicant and owner have been
7legal full-time residents of the state for not less than 12 months.

8(5) Provide detailed operating procedures, in writing, for the
9proposed facility, which shall include, but not be limited to,
10procedures for facility and operational security, prevention of
11 diversion, employee screening, storage of medical marijuana,
12personnel policies, and recordkeeping procedures.

13(6) Provide evidence that the applicant has received all required
14environmental permits, including compliance with the California
15Environmental Quality Act, and wastewater discharge permits.

16(7) Provide the applicant’s fingerprint images. For purposes
17of this paragraph, “applicant” means the owner or owners of a
18proposed facility, including all persons or entities having an
19ownership interest other than a security interest, lien, or
20encumbrance on property that will be used by the facility.

21(A) The applicant shall electronically submit to the Department
22of Justice fingerprint images and related information required by
23the Department of Justice for the purpose of obtaining information
24as to the existence and content of a record of state or federal
25convictions and arrests, and information as to the existence and
26content of a record of state or federal convictions and arrests for
27which the Department of Justice establishes that the person is free
28on bail, or on his or her own recognizance, pending trial or appeal.

29(B) The Department of Justice shall provide a response to the
30bureau pursuant to paragraph (1) of subdivision (p) of Section
3111105 of the Penal Code.

32(C) The bureau shall request from the Department of Justice
33subsequent notification service, as provided pursuant to Section
3411105.2 of the Penal Code, for persons described in subparagraph
35(A).

36(D) The Department of Justice shall charge the applicant a fee
37sufficient to cover the reasonable cost of processing the requests
38described in this paragraph.

39(8) Provide a statement, signed by the applicant under penalty
40of perjury, that the information provided is true.

P18   1(9) Provide any other information required by the bureau.

2(e) Each location and each discrete use of a single location
3shall require a conditional license. Each application for a
4conditional license is separate and distinct, and the bureau may
5charge a separate fee for each.

6(f) A conditional license issued pursuant to this section shall
7be valid for 12 months after the date of issuance. After the initial
812-month period, a conditional license may be renewed for a
9period of 36 months. The bureau shall establish procedures for
10the renewal of a conditional license.

11(g) Notwithstanding any other law, the bureau shall not issue
12a conditional license to an individual or entity, or for a premise,
13against whom there is a pending state or local administrative or
14judicial proceeding, against whom there is an action initiated by
15a city, county, or city and county under a local ordinance, or who
16has been determined to have violated an applicable local
17ordinance.

18(h) A facility or entity that is operating in conformance with
19local zoning ordinances and other state and local requirements
20on January 1, 2016, may continue its operations until its
21application for conditional licensure is approved or denied
22pursuant to this part.

23

begin insert18111.end insert  

(a) Upon receipt of the application materials and fee
24required in Section 18110, the bureau, provided the applicant has
25not committed an act or crime constituting grounds for the denial
26of licensure under Section 18112, may issue the conditional license
27and send a proof of issuance to the applicant.

28(b) The chief shall, by regulation, prescribe conditions upon
29which a person whose conditional license has previously been
30denied, suspended, or revoked, may be issued a conditional license.

31

begin insert18112.end insert  

(a) An application for a conditional license shall be
32denied and a conditional license shall be suspended or revoked
33for a past felony conviction for the possession for sale, sale,
34manufacture, transportation, or cultivation of a controlled
35substance, a felony criminal conviction for drug trafficking, a
36felony conviction for embezzlement, a felony conviction involving
37fraud or deceit, or any violent or serious felony conviction pursuant
38to subdivision (c) of Section 667.5 of, or subdivision (c) of Section
391192.7 of, the Penal Code. The bureau, at its discretion, may issue
40a license to an applicant that would be otherwise denied pursuant
P19   1to this subdivision if the applicant has obtained a certificate of
2rehabilitation, pursuant to Section 4852.13 of the Penal Code.

3(b) The chief, upon his or her determination, may deny, suspend,
4or revoke a conditional license when a conditional licensee,
5applicant, or employee, partner, officer, or member of an entity
6conditionally licensed does any of the following:

7(1) Making or authorizing in any manner or by any means a
8written or oral statement that is untrue or misleading and that is
9known, or that by exercise of reasonable care should be known,
10to be untrue or misleading.

11(2) Any other conduct that constitutes fraud.

12(3) Conduct constituting gross negligence.

13(4) Failure to comply with the provisions of this part, Article 8
14(commencing with Section 111658) of Chapter 6 of Part 5 of
15Division 104 of the Health and Safety Code, or any rule or
16regulation adopted pursuant to this part.

17(5) Conduct that constitutes grounds for denial of licensure
18pursuant to Chapter 2 (commencing with Section 480) of Division
191.5.

20

begin insert18113.end insert  

(a) Upon denying, suspending, or revoking a
21conditional license, the chief shall notify the applicant or licensee,
22in writing, by personal service or mail addressed to the address
23of the applicant or licensee set forth in the application. The
24applicant or licensee shall be given a hearing within 30 days
25thereafter if he or she files with the bureau a written request for
26hearing. Otherwise, the denial, suspension, or revocation is deemed
27affirmed.

28(b) All proceedings to deny, suspend, or revoke a conditional
29license shall be conducted pursuant to Chapter 5 (commencing
30with Section 11500) of Part 1 of Division 3 of Title 2 of the
31Government Code.

32

begin insert18114.end insert  

An application for or renewal of a conditional license
33shall not be approved if the bureau determines any of the following:

34(a) The applicant fails to meet the requirements of this part or
35any regulation adopted pursuant to this part or any applicable
36city, county, or city and county ordinance or regulation. If a local
37government adopts an ordinance or resolution authorizing medical
38marijuana to be cultivated, manufactured, stored, distributed, or
39sold within its jurisdiction, it shall submit to the bureau
40documentation detailing their renewal requirements.

P20   1(b) The applicant, or any of its officers, directors, owners,
2members, or shareholders, is a minor.

3(c) The applicant has knowingly answered a question or request
4for information falsely on the application form or failed to provide
5information requested.

6(d) The applicant, or any of its officers, directors, owners,
7members, or shareholders has been sanctioned by the bureau, a
8city, county, or city and county, for medical marijuana activities
9conducted in violation of this part or any applicable local
10ordinance or has had a license revoked in the previous five years.

11(e) The proposed cultivation, processing, possession, storage,
12manufacturing, testing, transporting, distribution, provision, or
13sale of medical marijuana will violate any applicable local law
14or ordinance.

15(f) The applicant or the owner is unable to establish that he or
16she has been a resident of the state for not less than 12 months.

17

begin insert18115.end insert  

(a) In addition to the provisions of this part, a
18conditional license shall be subject to the restrictions of the local
19jurisdiction in which the facility operates or proposes to operate.
20Even if a conditional license has been granted pursuant to this
21part, a facility shall not operate in a local jurisdiction that prohibits
22the establishment of that type of business.

23(b) In addition to the provisions of this part, local jurisdictions
24retain the power to assess fees and taxes, as applicable, on
25facilities that are conditionally licensed pursuant to this part and
26the business activities of those licensees.

27

begin insert18116.end insert  

The bureau may adopt regulations to limit the number
28of conditional licenses issued pursuant to this part upon a finding
29that the otherwise unrestricted issuance of conditional licenses is
30dangerous to the public health and safety.

31 

32Chapter  begin insert3.end insert Fees
33

 

34

begin insert18117.end insert  

(a) The conditional licensing fee shall be established
35by the bureau at a level sufficient to fund the reasonable costs of
36all of the following:

37(1) Administrative costs incurred by the bureau in overseeing
38the conditional licensing program, establishing health and safety
39standards, and certifying the required testing laboratories.

P21   1(2) Costs incurred by the bureau or the Department of Justice
2for enforcement of the provisions of this part.

3(3) Costs incurred by law enforcement and other public safety
4entities for enforcing the provisions of this part in their jurisdiction.

5(b) In addition to the conditional licensing fee required pursuant
6to subdivision (a), a cultivation facility shall be assessed a fee in
7a sufficient amount to cover the reasonable regulatory costs of
8enforcing the environmental impact provisions relating to those
9cultivation facilities. This fee shall be distributed, as necessary
10and in proportion to its regulatory function, between the following
11agencies responsible for enforcing the regulations relating to the
12environmental impact of licensed cultivation sites:

13(1) The State Water Board.

14(2) The Department of Fish and Wildlife.

15(3) The Department of Forestry and Fire Protection.

16(4) The Department of Pesticide Regulation.

17(5) The Department of Food and Agriculture.

18(6) Local law enforcement.

19

begin insert18118.end insert  

(a) The Medical Marijuana Regulation Fund is hereby
20established within the State Treasury. Notwithstanding Section
2116305.7 of the Government Code, the fund shall include any
22interest and dividends earned on the money in the fund.

23(b) Except as provided in subdivision (c), all fees collected
24pursuant to this part shall be deposited into the Medical Marijuana
25Regulation Fund. Notwithstanding Section 13340 of the
26Government Code, all moneys within the fund are hereby
27continuously appropriated, without regard to fiscal year, to the
28bureau solely for the purposes of fully funding and administering
29this part, including, but not limited to, the costs incurred by the
30bureau for its administrative expenses.

31(c) The Special Account for Environmental Enforcement is
32hereby established as an account within the Medical Marijuana
33Regulation Fund. Notwithstanding Section 16305.7 of the
34Government Code, the account shall include any interest and
35dividends earned on the money in the account. All fees collected
36pursuant to subdivision (b) of Section 18112 shall be deposited in
37this account. Notwithstanding Section 13340 of the Government
38Code, all moneys within the fund are hereby continuously
39appropriated, without regard to fiscal year, to the bureau for
40distribution to the entities listed in subdivision (b) of Section 18117
P22   1to be used to enforce the environmental regulation of licensed
2cultivation sites.

3(d) All moneys collected as a result of penalties imposed under
4this part shall be deposited directly into the General Fund, to be
5available upon appropriation.

6(e) The bureau may establish and administer a grant program
7to allocate moneys from the Medical Marijuana Regulation Fund
8to state and local entities for the purpose of assisting with medical
9marijuana regulation and the enforcement of this part and other
10state and local laws applicable to licensees.

11

begin insert18119.end insert  

(a) A facility issued a conditional license shall not
12acquire, cultivate, process, possess, store, manufacture, distribute,
13sell, deliver, transfer, transport, or dispense medical marijuana
14for any purpose other than those authorized by Article 2.5
15(commencing with Section 11362.7) of Chapter 6 of Division 10
16of the Health and Safety Code.

17(b) A licensed dispensing facility shall not acquire, cultivate,
18process, possess, store, manufacture, distribute, sell, deliver,
19transfer, transport, or dispense medical marijuana plants or
20medical marijuana products except through a licensed cultivation
21site or a licensed manufacturer.

22 

23Chapter  begin insert4.end insert Transportation of Medical Marijuana
24

 

25

begin insert18120.end insert  

(a) A licensed transporter shall ship only to facilities
26issued a conditional license and only in response to a request for
27a specific quantity and variety from those facilities.

28(b) Prior to transporting medical marijuana products, a licensed
29transporter shall do both of the following:

30(1) Complete a shipping manifest using a form prescribed by
31the bureau.

32(2) Securely transmit a copy of the manifest to the licensee that
33will receive the medical marijuana product, and to the bureau,
34prior to transport.

35(c) The licensed transporter making the shipment and the
36licensee receiving the shipment shall maintain each shipping
37manifest and make it available to local code enforcement officers,
38any other locally designated enforcement entity, and the bureau
39upon request.

40

begin insert18121.end insert  

(a) Transported medical marijuana products shall:

P23   1(1) Be transported only in a locked, safe, and secure storage
2compartment that is securely affixed to the interior of the
3transporting vehicle.

4(2) Not be visible from outside the vehicle.

5(b) A vehicle transporting medical marijuana products shall
6travel directly from one licensed facility to another licensed facility
7authorized to receive the shipment.

8

begin insert18122.end insert  

(a) All transport vehicles shall be staffed with a
9minimum of two employees. At least one transport team member
10shall remain with the vehicle at all times when the vehicle contains
11medical marijuana.

12(b) Each transport team member shall have access to a secure
13form of communication by which each member can communicate
14with personnel at the licensed facility at all times when the vehicle
15contains medical marijuana.

16(c) Each transport team member shall possess documentation
17of licensing and a government-issued identification card at all
18times when transporting or delivering medical marijuana and shall
19produce it to any representative of the bureau or law enforcement
20upon request.

21(d) This part shall not be construed to authorize or permit a
22licensee to transport, or cause to be transported, medical
23marijuana or medical marijuana products outside the state.

24

begin insert18123.end insert  

A local jurisdiction shall not prevent transportation
25through or to a facility issued a conditional license, by a
26conditionally licensed transporter who acts in compliance with
27this part.

28 

29Chapter  begin insert5.end insert Enforcement
30

 

31

begin insert18124.end insert  

A state agency is not required by this section to enforce
32a city, county, city and county, or local law, ordinance, rule, or
33regulation regarding the site or operation of a facility issued a
34conditional license.

35

begin insert18125.end insert  

The bureau may assist state taxation authorities in the
36development of uniform policies for the state taxation of licensees.

37

begin insert18126.end insert  

(a) For facilities issued a conditional license that are
38located within the incorporated area of a city, the city shall have
39full power and authority to enforce this part and Article 8
40(commencing with Section 111658) of Chapter 6 of Part 5 of
P24   1Division 104 of the Health and Safety Code and the rules,
2regulations, and standards promulgated by the bureau. The city
3shall further assume complete responsibility for any regulatory
4function relating to those licensees within the city limits that would
5otherwise be performed by the county or any county officer or
6employee, without liability, cost, or expense to the county.

7(b) For licensed facilities located within the unincorporated
8area of a county, the county shall have full power and authority
9to enforce this part and Article 8 (commencing with Section
10111658) of Chapter 6 of Part 5 of Division 104 of the Health and
11Safety Code and the rules, regulations, and standards promulgated
12by the bureau.

13

begin insert18127.end insert  

(a) A willful violation of Section 18110, including an
14attempt to falsify information on an application or to otherwise
15defraud or mislead a state or local agency in the course of the
16application process, shall be punishable by a civil fine of up to
17thirty-five thousand dollars ($35,000) for each individual violation.

18(b) A technical violation of Section 18110 shall, at the bureau’s
19discretion, be punishable by a civil fine of up to ten thousand
20dollars ($10,000) for each individual violation.

21

begin insert18128.end insert  

A district attorney, county counsel, city attorney, or
22city prosecutor may bring an action to enjoin a violation or the
23threatened violation of any provision of this part, including, but
24not limited to, a licensee’s failure to correct objectionable
25conditions following notice or as a result of a rule promulgated
26pursuant to this part. The action shall be brought in the county in
27which the violation occurred or is threatened to occur. A
28proceeding brought pursuant to this part shall conform to the
29requirements of Chapter 3 (commencing with Section 525) of Title
307 of Part 2 of the Code of Civil Procedure. Nothing in this section
31shall diminish the authority of a local government to take requisite
32enforcement actions pertaining to its own ordinances or
33regulations.

34

begin insert18129.end insert  

Nothing in this part shall prevent a city or other local
35governing body from taking action as specified in Section 11362.83
36of the Health and Safety Code.

37

begin insert18130.end insert  

This part shall not be construed to limit a law
38enforcement agency’s ability to investigate unlawful activity in
39relation to a facility issued a conditional license.

 

P25   1Chapter  begin insert6.end insert Cultivation Sites
2

 

3

begin insert18131.end insert  

A licensed cultivation site shall not be located in an
4area zoned residential.

5

begin insert18132.end insert  

(a) The bureau shall notify local law enforcement of
6all conditional licenses issues for cultivation sites in that
7jurisdiction.

8(b) A licensed cultivation site shall display the state license in
9a manner so as to be available and easily read at the location.

10(c) The bureau shall work with and assist state and local law
11enforcement to eliminate trespass grows in the state.

12

begin insert18133.end insert  

(a) No later than January 1, 2022, all medical
13marijuana grown, produced, distributed, and sold in the state shall
14meet the certified organic standards.

15(b) The bureau shall establish appellations of origin for
16marijuana grown in California.

17

begin insert18134.end insert  

The bureau shall work with county agricultural
18commissioners, offices to provide all the information and forms
19required for conditional licensure as a cultivation site in a single
20location, including state licensure, local requirements in that
21jurisdiction, and environmental requirements.

22 

23Chapter  begin insert7.end insert Regulation of Medical Marijuana
24

 

25

begin insert18136.end insert  

(a) A person shall not distribute any form of advertising
26for physician recommendations for medical marijuana in
27California unless the advertisement bears the following notice to
28consumers:


30NOTICE TO CONSUMERS: The Compassionate Use Act of
311996 ensures that seriously ill Californians have the right to obtain
32and use marijuana for medical purposes where medical use is
33deemed appropriate and has been recommended by a physician
34who has determined that the person’s health would benefit from
35the use of medical marijuana. Physicians are licensed and
36regulated by the Medical Board of California and arrive at the
37decision to make this recommendation in accordance with accepted
38standards of medical responsibility.


P26   1(b) Advertising for physician recommendations for medical
2marijuana shall meet all requirements of Section 651. Price
3advertising shall not be fraudulent, deceitful, or misleading,
4including statements or advertisements of bait, discounts,
5premiums, gifts, or statements of a similar nature.

6

begin insert18137.end insert  

(a) A facility issued a conditional license shall
7implement sufficient security measures to both deter and prevent
8unauthorized entrance into areas containing marijuana and theft
9of marijuana at those facilities. These security measures shall
10include, but not be limited to, all of the following:

11(1) Preventing individuals from remaining on the premises of
12the facility if they are not engaging in activity expressly related to
13the operations of the facility.

14(2) Establishing limited access areas accessible only to
15authorized facility personnel.

16(3) Storing all finished marijuana in a secured and locked room,
17 safe, or vault, and in a manner as to prevent diversion, theft, and
18loss.

19(b) A facility issued a conditional license shall notify appropriate
20law enforcement authorities within 24 hours after discovering any
21of the following:

22(1) Discrepancies identified during inventory.

23(2) Diversion, theft, loss, or any criminal activity involving the
24facility or a facility agent.

25(3) The loss or unauthorized alteration of records related to
26marijuana, registered qualifying patients, personal caregivers, or
27facility agents.

28(4) Any other breach of security.

29(c) A licensed cultivation site shall weigh, inventory, and
30account for on video, all medical marijuana to be transported
31prior to its leaving its origination location. Within eight hours
32after arrival at the destination, the licensed dispensing facility
33shall reweigh, reinventory, and account for on video, all
34transported marijuana.

35

begin insert18138.end insert  

(a) The bureau shall require an annual audit of all
36facilities issued a conditional license to cultivate, manufacture,
37process, transport, store, or sell medical marijuana. The
38reasonable costs of the audit shall be paid for by the licensee.

39(b) Completed audit reports shall also be submitted by the
40licensee to local code enforcement offices, or the appropriate
P27   1locally designated enforcement entity, within 30 days of the
2completion of the audit.

3(c) It is the responsibility of each facility issued a conditional
4license to develop a robust quality assurance protocol that includes
5all of the provisions of this part.

6

begin insert18139.end insert  

(a) A laboratory certified by the bureau to perform
7random sample testing of medical marijuana products shall not
8acquire, process, possess, store, transfer, transport, or dispense
9medical marijuana for any purpose other than those authorized
10by Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
11Division 10 of the Health and Safety Code. All transfer or
12transportation shall be performed pursuant to a specified chain
13of custody protocol.

14(b) A laboratory certified by the bureau to perform random
15sample testing of medical marijuana products shall not acquire,
16process, possess, store, transfer, transport, or dispense medical
17marijuana plants or medical marijuana products except through
18a patient, primary caregiver, or a facility issued a conditional
19license. All transfer or transportation shall be performed pursuant
20to a specified chain of custody protocol.

21

begin insert18140.end insert  

(a) Information identifying the names of patients, their
22medical conditions, or the names of their primary caregivers
23received and contained in records kept by the bureau for the
24purposes of administering this part are confidential and exempt
25from the California Public Records Act (Chapter 3.5 (commencing
26with Section 6250) of Division 7 of Title 1 of the Government Code)
27and are not subject to disclosure to an individual or private entity,
28except as necessary for authorized employees of the state to
29perform official duties pursuant to this part.

30(b) (1) Nothing in this section shall preclude any of the
31following:

32(A) Bureau employees notifying state or local agencies about
33information submitted to the bureau that the employee suspects is
34falsified or fraudulent.

35(B) Notifications from the bureau to state or local agencies of
36apparent violations of this part or an applicable local ordinance.

37(C) Verification of requests by state or local agencies to confirm
38licenses and certificates issued by the bureau or other state agency.

P28   1(D) Providing information requested pursuant to a court order
2or subpoena issued by a court, an administrative agency, or local
3governing body authorized by law to issue subpoenas.

4(2) Information shall not be disclosed beyond what is necessary
5to achieve the goals of a specific investigation or notification or
6the parameters of a specific court order or subpoena.

7

begin insert18141.end insert  

(a) The actions of a licensee, its employees, and its
8agents, that are permitted pursuant to a conditional license and
9that are conducted in accordance with the requirements of this
10part and regulations adopted pursuant to this part, are not unlawful
11under state law and shall not be an offense subject to arrest or
12prosecution.

13(b) The actions of a person who, in good faith and upon
14investigation, allows his or her property to be used by a licensee,
15its employees, and its agents, as permitted pursuant to a conditional
16license, are not unlawful under state law and shall not be an
17offense subject to arrest or prosecution.

18(c) This section shall not be deemed to limit the authority or
19remedies of a city, county, or city and county under any provision
20of law, including, without limitation, Section 7 of Article XI of the
21California Constitution.

22

begin insert18142.end insert  

(a) A licensee shall not cultivate, process, store,
23manufacture, transport, or sell medical marijuana in the state
24unless accurate records are kept at the licensed premises of the
25growing, processing, storing, manufacturing, transporting, or
26selling by the licensee in the state. These records shall include the
27name and address of the supplier of marijuana received or
28possessed by the licensee, the location at which the marijuana was
29cultivated, the amount of marijuana received, the form in which
30it is received, the name of the employee receiving it, and the date
31of receipt. These records shall also include receipts for all
32expenditures incurred by the licensee and banking records, if any,
33for all funds obtained or expended in the performance of any
34activity under the authority of the conditional license. A licensee
35who has a conditional license for more than one premises may
36keep all records at one of the conditionally licensed premises.
37Required records shall be kept for a period of seven years from
38the date of the transaction.

39(b) The bureau and an appropriate state or local agency may
40examine the books and records of a conditional licensee and may
P29   1visit and inspect the premises of a conditional licensee, as the
2bureau or state or local agency deems necessary to perform its
3duties under this part.

4(c) Books or records requested by the bureau or an appropriate
5state or local agency shall be provided by the conditional licensee
6no later than five business days after the request is made.

7(d) The bureau or a state or local agency may enter and inspect
8the premises of a facility issued a conditional license between the
9hours of 8 a.m. and 8 p.m. on any day that the facility is open, or
10at any reasonable time, to ensure compliance and enforcement of
11the provisions of this part or a local ordinance.

12(e) If a licensee or an employee of a licensee refuses, impedes,
13obstructs, or interferes with an inspection pursuant to subdivision
14(d), the conditional license may be summarily suspended and the
15bureau shall directly commence proceedings for the revocation of
16the conditional license.

17(f) If a licensee or an employee of a licensee fails to maintain
18or provide the books and records required pursuant to this section,
19the licensee shall be subject to a civil fine of fifteen thousand
20dollars ($15,000) per individual violation.

end insert
21begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 23028 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
22read:end insert

begin insert
23

begin insert23028.end insert  

(a) (1) In addition to any authority otherwise provided
24by law, the board of supervisors of a county or the city council of
25a city may impose, by ordinance, a tax on the privilege of
26cultivating, dispensing, producing, processing, preparing, storing,
27providing, donating, selling, or distributing marijuana by a licensee
28operating pursuant to Chapter 18 (commencing with Section
2926000) of Division 9 of the Business and Professions Code. The
30tax may be imposed for general governmental purposes or for
31purposes specified in the ordinance by the board of supervisors
32or city council.

33(2) The board of supervisors or city council shall specify in the
34ordinance proposing the tax the activities subject to the tax, the
35applicable rate or rates, the method of apportionment, and the
36manner of collection of the tax. A tax imposed pursuant to this
37section is a tax and not a fee or special assessment, and the tax is
38not required to be apportioned on the basis of benefit to any person
39or property or be applied uniformly to all taxpayers or all real
40property.

P30   1(3) A tax imposed by a city or county pursuant to this section
2may include a transactions and use tax imposed solely for
3marijuana or marijuana products, which shall otherwise conform
4to Part 1.6 (commencing with Section 7251) of Division 2 of the
5Revenue and Taxation Code. Notwithstanding Section 7251.1 of
6the Revenue and Taxation Code, the tax may be imposed at any
7rate specified by the board of supervisors or city council, and the
8tax rate authorized by this section shall not be considered for
9purposes of the combined tax rate limitation established by that
10section.

11(4) The tax authorized by this section may be imposed upon any
12or all of the activities set forth in paragraph (1), regardless of
13whether the activity is undertaken individually, collectively, or
14cooperatively, and regardless of whether the activity is for
15compensation or gratuitously, as determined by the board of
16supervisors or city council.

17(5) The board of supervisors shall specify whether the tax
18applies throughout the entire county or within the unincorporated
19area of the county.

20(b) In addition to any other method of collection authorized by
21law, the board of supervisors or city council may provide for the
22collection of the tax imposed pursuant to this section in the same
23manner, and subject to the same penalties and priority of lien, as
24other charges and taxes fixed and collected by the city or county.

25(c) Any tax imposed pursuant to this section shall be subject to
26applicable voter approval requirements imposed by law.

27(d) For purposes of this section, “marijuana” shall have the
28meanings set forth in Section 18100 of the Business and Professions
29Code.

30(e) This section does not limit or prohibit the levy or collection
31or any other fee, charge, or tax, or any license or service fee or
32charge upon, or related to, the activities set forth in subdivision
33(a) as otherwise provided by law. This section shall not be
34construed as a limitation upon the taxing authority of a city or
35county as provided law.

end insert
36begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 11362.775 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
37amended to read:end insert

38

11362.775.  

begin insert(a)end insertbegin insertend insert Qualified patients, persons with valid
39identification cards, and the designated primary caregivers of
40qualified patients and persons with identification cards, who
P31   1begin delete associate within the State of California in order collectively or
2cooperatively toend delete
cultivate marijuana for medical purposes, shall
3not solely on the basis of that fact be subject to state criminal
4sanctions under Section 11357, 11358, 11359, 11360, 11366,
511366.5, or 11570.

begin insert

6(b) An individual employee, officer, or board member of a
7facility issued a conditional license pursuant to Part 5
8(commencing with Section 18100) of Division 7 of the Business
9and Professions Code shall not be subject to state criminal
10sanctions under Section 11357, 11358, 11359, 11360, 11366,
1111366.5, or 11570 and any successor statutes, based solely on
12holding a conditional license, for the possession, cultivation,
13processing, packaging, storage, transportation, sale, or distribution
14of medical marijuana to a facility holding a conditional license
15pursuant to Part 5 (commencing with Section 18100) of Division
167 of the Business and Professions Code or directly to a qualified
17patient, a person with a valid identification card, or the designated
18primary caregiver of a qualified patient or person with a valid
19identification card, within the state, unless the information
20contained on the licensing paperwork is false or falsified, the
21license has been obtained by means of fraud, or the person is
22otherwise in violation of Part 5 (commencing with Section 18100)
23of Division 7 of the Business and Professions Code.

end insert
begin insert

24(c) This section shall not diminish the protections of Section
2518141 of the Business and Professions Code.

end insert
26begin insert

begin insertSEC. 8.end insert  

end insert

begin insertArticle 8 (commencing with Section 111658) is added
27to Chapter 6 of Part 5 of Division 104 of the end insert
begin insertHealth and Safety
28Code
end insert
begin insert, to read:end insert

begin insert

29 

30Article begin insert8.end insert  Medical Marijuana
31

 

32

begin insert111658.end insert  

For purpose of this article, the following definitions
33shall apply:

34(a) “Bureau” means the Bureau of Medical Marijuana
35Regulations in the Department of Consumer Affairs.

36(b) “Certified testing laboratories” means a laboratory that is
37certified by the bureau to perform random sample testing of
38medical marijuana for patients, primary caregivers, and facilities
39issued conditional licenses pursuant to Part 5 (commencing with
40Section 18100) of Division 7 of the Business and Professions Code,
P32   1pursuant to the certification standards for those facilities
2promulgated by the bureau.

3(c) “Edible medical marijuana product” means medical
4 marijuana or a medical marijuana-derived product that is ingested
5or meant to be ingested through the mouth and into the digestive
6system.

7(d) “Marijuana” means all parts of the plant Cannabis sativa
8L. sativa, cannabis indica, or cannabis ruderalis, whether growing
9or not; the seeds thereof; the resin, whether crude or purified,
10extracted from any part of the plant; and every compound,
11manufacture, salt, derivative, mixture, or preparation of the plant,
12its seeds, or resin. “Marijuana” does not include the mature stalks
13of the plant, fiber produced from the stalks, oil or cake made from
14the seeds of the plant, any other compound, manufacture, salt,
15derivative, mixture, or preparation of the mature stalks (except
16the resin extracted therefrom), fiber, oil, or cake, or the sterilized
17seed of the plant which is incapable of germination. “Marijuana”
18also means marijuana, as defined by Section 11018.

19(e) “Labor peace agreement” means an agreement between an
20entity and a bona fide labor organization that, at a minimum,
21protects the state’s proprietary interests by prohibiting labor
22organizations and members from engaging in picketing, work
23stoppages, boycotts, and any other economic interference with the
24applicant’s business. This agreement means that the applicant has
25agreed not to disrupt efforts by the bona fide labor organization
26to communicate with, and attempt to organize and represent, the
27applicant’s employees.

28(f) “Representative samples” means samples taken from each
29batch or shipment of medical marijuana received from a licensed
30cultivation site or any other source if intended for sale.

31

begin insert111659.end insert  

The bureau, by July 1, 2017, shall accomplish both
32of the following:

33(a) Establish quality assurance protocols to ensure uniform
34testing standards for all medical marijuana sold via dispensaries
35or other facilities, or cultivated or manufactured by facilities, that
36are issued a conditional license pursuant to Part 5 (commencing
37with Section 18100) of Division 7 of the Business and Professions
38Code.

39(b) In consultation with outside entities at its discretion, develop
40a list of certified testing laboratories that can perform uniform
P33   1testing in compliance with this article, and post that list on its
2Internet Web site.

3

begin insert111660.end insert  

(a) A facility issued a conditional license pursuant
4to Part 5 (commencing with Section 18100) of Division 7 of the
5Business and Professions Code shall bear the responsibility for
6contracting with certified testing laboratories for regular,
7systematic testing of representative samples of all medical
8marijuana cultivated or intended for sale or distribution, and shall
9bear the cost of that testing.

10(b) A facility issued a conditional license pursuant to Part 5
11(commencing with Section 18100) of Division 7 of the Business
12and Professions Code shall maintain records of testing reports
13for seven years, either on site in a digital format or at a secure
14off-site location in either digital or paper format. These facilities
15shall provide results of test reports to local code enforcement
16officers, any other locally designated enforcement entity, and the
17bureau upon request.

18

begin insert111661.end insert  

Quality assurance protocols shall be required between
19all licensed cultivation sites, licensed manufacturers, and licensed
20dispensing facilities to guarantee safe and reliable medicinal
21marijuana delivery to all patients. These quality assurance
22protocols shall include:

23(a) Providing supplier information to dispensaries in order for
24recall procedures to be implemented, if and when necessary.

25(b) Safety testing of all medical marijuana prior to packaging
26for sale and patient exposure to identify and eliminate
27microbiological contaminants and chemical residue.

28(c) Labeling of all medical marijuana and medical marijuana
29products that shall, at a minimum, include the following:

30(1) List of pharmacologically active ingredients, including, but
31not limited to, tetrahydrocannabinol (THC) and cannabidiol (CBD)
32content, clear recommended dosage, and the size or volume of the
33recommended dose.

34(2) Clear indication, in bold font, that the product contains
35medical marijuana.

36(3) The statement “FOR MEDICAL USE ONLY. KEEP OUT
37OF REACH OF CHILDREN AND ANIMALS” in bold print.

38(4) Identification of the source and date of cultivation and
39manufacture.

P34   1(5) The name and location of the dispensary providing the
2product.

3(6) The date of sale.

4(7) Any other requirements set by the bureau.

5

begin insert111662.end insert  

For purposes of this article, edible medical marijuana
6products are deemed to be unadulterated food products. In addition
7to the quality assurance standards provided in Section 111661,
8all edible medical marijuana products shall comply with the
9following requirements:

10(a) Baked edible medical marijuana products, including, but
11not limited to, brownies, bars, cookies, and cakes, tinctures, and
12other edible medical marijuana products that do not require
13refrigeration or hot holding may be manufactured, sold, or
14otherwise distributed at facilities issued a conditional license
15pursuant to Part 5 (commencing with Section 18100) of Division
167 of the Business and Professions Code.

17(b) A facility issued a conditional license pursuant to Part 5
18(commencing with Section 18100) of Division 7 of the Business
19and Professions Code shall have an owner or employee who has
20successfully passed an approved and accredited food safety
21certification examination as specified in Sections 113947.1,
22113947.2, and 113947.3 prior to selling, manufacturing, or
23distributing edible medical marijuana products requiring
24refrigeration or hot holding.

25(c) Individuals manufacturing or selling edible medical
26marijuana products shall thoroughly wash their hands before
27commencing production and before handling finished edible
28medical marijuana products.

29(d) All edible medical marijuana products sold for direct
30consumption and infused with marijuana concentrate shall be
31individually wrapped at the original point of preparation. The
32products shall be packaged in a fashion that does not exceed a
33single dosage for one individual.

34(e) Products containing tetrahydrocannabinol (THC) shall be
35prepared in compliance with maximum potency standards for THC
36and THC concentrates set forth in the bureau’s regulations.

37(f) Prior to sale or distribution at a licensed dispensing facility,
38edible medical marijuana products shall be labeled and in an
39opaque and tamper evident package. Labels and packages of edible
40medical marijuana products shall meet the following requirements:

P35   1(1) Edible medical marijuana packages and labels shall not be
2made to be attractive to children.

3(2) All edible medical marijuana product labels shall include
4the following information, prominently displayed and in a clear
5and legible font:

6(A) Manufacture date and source.

7(B) The statement “KEEP OUT OF REACH OF CHILDREN
8AND ANIMALS” in bold print.

9(C) The statement “FOR MEDICAL USE ONLY.”

10(D) Net weight of medical marijuana in package.

11(E) A warning if nuts or other known allergens are used and
12shall include the total weight, in ounces or grams, of medical
13marijuana in the package.

14(F) List of pharmacologically active ingredients, including, but
15not limited to, tetrahydrocannabinol (THC) and cannabidiol (CBD)
16content, clear recommended dosage, and the size or volume of
17recommended dose.

18(G) Any other requirement set by the bureau.

19(g) Photos or images of food are not allowed on edible medical
20marijuana product packages or labels.

21(h) Only generic food names may be used to describe edible
22medical marijuana products.

end insert
23begin insert

begin insertSEC. 9.end insert  

end insert

begin insertOn or before July 1, 2016, the State Board of
24Equalization shall compile a report on the actual tax collected on
25the sale of medical marijuana, using the most current data
26available. The report should also include expected tax revenues,
27under the existing tax structure, for the years 2016 to 2021,
28inclusive. This report shall be submitted to the Legislature and the
29Governor’s Office pursuant to Section 9795 of the Government
30Code.end insert

31begin insert

begin insertSEC. 10.end insert  

end insert
begin insert

The provisions of this act are severable. If any
32provision of this act or its application is held invalid, that invalidity
33shall not affect other provisions or applications that can be given
34effect without the invalid provision or application.

end insert
35begin insert

begin insertSEC. 11.end insert  

end insert
begin insert

The Legislature finds and declares that Section 5 of
36this act imposes a limitation on the public’s right of access to the
37meetings of public bodies or the writings of public officials and
38agencies within the meaning of Section 3 of Article I of the
39California Constitution. Pursuant to that constitutional provision,
40the Legislature makes the following findings to demonstrate the
P36   1interest protected by this limitation and the need for protecting
2that interest:

end insert
begin insert

3The limitation imposed under this act is necessary for purposes
4of compliance with the federal Health Insurance Portability and
5Accountability Act of 1996 (42 U.S.C. Sec. 1320d et seq.), the
6Confidentiality of Medical Information Act (Part 2.6 (commencing
7with Section 56) of Division 1 of the Civil Code), and the Insurance
8Information and Privacy Protection Act (Article 6.6 (commencing
9with Section 791) of Part 2 of Division 1 of the Insurance Code).

end insert
10begin insert

begin insertSEC. 12.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant
11to Section 6 of Article XIII B of the California Constitution because
12the only costs that may be incurred by a local agency or school
13district will be incurred because this act creates a new crime or
14infraction, eliminates a crime or infraction, or changes the penalty
15for a crime or infraction, within the meaning of Section 17556 of
16the Government Code, or changes the definition of a crime within
17the meaning of Section 6 of Article XIII B of the California
18Constitution.

end insert
begin delete
19

SECTION 1.  

It is the intent of the Legislature to enact
20legislation that would do all of the following:

21(1) Protect the residents of California, private property, public
22lands, and waterways from trespass cultivation of medical
23marijuana.

24(2) Reaffirm and clarify aspects of the Medical Marijuana
25Program Act.

26(3) Regulate the cultivation of medical marijuana and authorize
27the collection of fees.

28(4) Authorize and appropriate adequate funding for the Board
29of Equalization to undertake a study of the results of legislation
30recently passed in Colorado and the State of Washington in order
31to make recommendations on the best way to levy and collect fees
32to regulate the cultivation and sale of medical marijuana.

33(5) Authorize the creation of appellations of origin for medical
34marijuana cultivated in California.

end delete


O

    98