Amended in Senate May 6, 2015

Amended in Senate April 6, 2015

Senate Bill No. 643

Introduced by Senator McGuire

February 27, 2015

An 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.

LEGISLATIVE COUNSEL’S DIGEST

SB 643, as amended, McGuire. Medical marijuana.

(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.

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.

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.

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.

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.

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.

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.

(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.

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.

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.

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.

(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%.

This bill would authorize begin delete the board of supervisors of a county or the city council of a city end delete begin insert a city, county, or city and county, by ordinance, end insert to impose a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing marijuana begin delete or products containing marijuana end delete begin insert by an entity issued a conditional license end insert . 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.

(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.

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.

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

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.

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

(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.

This bill would make legislative findings to that effect.

(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.

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

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

This act shall be known, and may be cited, as the
Medical Marijuana Public Safety and Environmental Protection
Act.

SEC. 2.  

The Legislature finds and declares all of the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 3.  

Section 2220.05 of the Business and Professions Code
is amended to read:

2220.05.  

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

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

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

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

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

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

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

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

SEC. 4.  

Article 25 (commencing with Section 2525) is added
to Chapter 5 of Division 2 of the Business and Professions Code,
to read:

 

Article 25.  Recommending Medical Marijuana

 

2525.  

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

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

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

2525.1.  

The Medical Board of California shall consult with
the California Marijuana Research Program, known as the Center
for Medicinal Cannabis Research, authorized pursuant to Section
11362.9 of the Health and Safety Code, on developing and adopting
medical guidelines for the appropriate administration and use of
medical marijuana.

2525.2.  

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

SEC. 5.  

Part 5 (commencing with Section 18100) is added to
Division 7 of the Business and Professions Code, to read:

 

PART 5.  Medical Marijuana

 

Chapter  1. General Provisions

 

18100.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

18101.  

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

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

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

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

(e) The duty of enforcing and administering this part shall be
vested in the chief, who is responsible to the director. The chief
may adopt and enforce those rules and regulations that he or she
determines are reasonably necessary to carry out the purposes of
this part and declaring the policy of the bureau, including a system
for the issuance of citations for violations of this part, as specified
in Section begin delete 18126. end delete begin insert 18127. end insert

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

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

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

18102.  

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

18103.  

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

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

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

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

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

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

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

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

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

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

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

18104.  

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

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

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

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

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

(5) Qualifications for licensees.

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

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

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

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

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

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

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

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

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

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

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

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

(e) The bureau shall not issue a conditional license unless the
applicant has met all of the requirements of this part, including the
requirements of begin delete paragraph (4) of end delete subdivision (d) of Section 18110.

18105.  

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

18106.  

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

18107.  

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

 

Chapter  2. Conditional Licenses

 

18108.  

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

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

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

18109.  

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

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

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

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

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

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

18110.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(B) The Department of Justice shall provide a response to the
bureau pursuant to paragraph (1) of subdivision (p) of Section
11105 of the Penal Code.

(C) The bureau shall request from the Department of Justice
subsequent notification service, as provided pursuant to Section
11105.2 of the Penal Code, for persons described in subparagraph
(A).

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

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

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

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

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

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

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

18111.  

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

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

18112.  

(a) An application for a conditional license shall be
denied and a conditional license shall be suspended or revoked for
a past felony conviction for the possession for sale, sale,
manufacture, transportation, or cultivation of a controlled
substance, a felony criminal conviction for drug trafficking, a
felony conviction for embezzlement, a felony conviction involving
fraud or deceit, or any violent or serious felony conviction pursuant
to subdivision (c) of Section 667.5 of, or subdivision (c) of Section
1192.7 of, the Penal Code. The bureau, at its discretion, may issue
a license to an applicant that would be otherwise denied pursuant
to this subdivision if the applicant has obtained a certificate of
rehabilitation, pursuant to Section 4852.13 of the Penal Code.

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

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

(2) Any other conduct that constitutes fraud.

(3) Conduct constituting gross negligence.

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

(5) Conduct that constitutes grounds for denial of licensure
pursuant to Chapter 2 (commencing with Section 480) of Division
1.5.

18113.  

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

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

18114.  

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

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

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

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

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

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

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

18115.  

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

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

18116.  

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

 

Chapter  3. Fees

 

18117.  

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

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

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

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

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

(1) The State Water begin insert Resources Control end insert Board.

(2) The Department of Fish and Wildlife.

(3) The Department of Forestry and Fire Protection.

(4) The Department of Pesticide Regulation.

(5) The Department of Food and Agriculture.

(6) Local law enforcement.

18118.  

(a) The Medical Marijuana Regulation Fund is hereby
established within the State Treasury. Notwithstanding Section
16305.7 of the Government Code, the fund shall include any
interest and dividends earned on the money in the fund.

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

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

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

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

18119.  

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

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

 

Chapter  4. Transportation of Medical Marijuana

 

18120.  

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

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

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

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

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

18121.  

(a) Transported medical marijuana products shall:

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

(2) Not be visible from outside the vehicle.

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

18122.  

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

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

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

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

18123.  

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

 

Chapter  5. Enforcement

 

18124.  

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

18125.  

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

18126.  

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

(b) For licensed facilities located within the unincorporated area
of a county, the county shall have full power and authority to
enforce this part and Article 8 (commencing with Section 111658)
of Chapter 6 of Part 5 of Division 104 of the Health and Safety
Code and the rules, regulations, and standards promulgated by the
bureau.

18127.  

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

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

18128.  

A district attorney, county counsel, city attorney, or
city prosecutor may bring an action to enjoin a violation or the
threatened violation of any provision of this part, including, but
not limited to, a licensee’s failure to correct objectionable
conditions following notice or as a result of a rule promulgated
pursuant to this part. The action shall be brought in the county in
which the violation occurred or is threatened to occur. A proceeding
brought pursuant to this part shall conform to the requirements of
Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of
the Code of Civil Procedure. Nothing in this section shall diminish
the authority of a local government to take requisite enforcement
actions pertaining to its own ordinances or regulations.

18129.  

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

18130.  

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

 

Chapter  6. Cultivation Sites

 

begin delete

18131.  

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

end delete

18132.  

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

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

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

18133.  

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

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

18134.  

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

 

Chapter  7. Regulation of Medical Marijuana

 

18136.  

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

NOTICE TO CONSUMERS: The Compassionate Use Act of
1996 ensures that seriously ill Californians have the right to obtain
and use marijuana for medical purposes where medical use is
deemed appropriate and has been recommended by a physician
who has determined that the person’s health would benefit from
the use of medical marijuana. Physicians are licensed and regulated
by the Medical Board of California and arrive at the decision to
make this recommendation in accordance with accepted standards
of medical responsibility.

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

18137.  

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

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

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

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

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

(1) Discrepancies identified during inventory.

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

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

(4) Any other breach of security.

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

18138.  

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

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

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

18139.  

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

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

18140.  

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

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

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

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

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

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

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

18141.  

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

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

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

18142.  

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

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

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

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

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

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

begin delete

SEC. 6.  

Section 23028 is added to the Government Code, to
read:

23028.  

(a) (1) In addition to any authority otherwise provided
by law, the board of supervisors of a county or the city council of
a city may impose, by ordinance, a tax on the privilege of
cultivating, dispensing, producing, processing, preparing, storing,
providing, donating, selling, or distributing marijuana by a licensee
operating pursuant to Chapter 18 (commencing with Section 26000)
of Division 9 of the Business and Professions Code. The tax may
be imposed for general governmental purposes or for purposes
specified in the ordinance by the board of supervisors or city
council.

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

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

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

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

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

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

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

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

end delete

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 23028 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 23028. end insert   

(a) (1) A city, county, or city and county, may impose
a tax on the privilege of cultivating, dispensing, producing,
processing, preparing, storing, providing, donating, selling, or
distributing marijuana by a licensee operating pursuant to Part
5 (commencing with Section 18100) of Division 7 of the Business
and Professions Code.

(2) The board of supervisors or city council shall specify in the
ordinance proposing the tax the activities subject to the tax, the
applicable rate or rates, the method of apportionment, if necessary,
and the manner of collection of the tax. The tax may be imposed
for general governmental purposes or for purposes specified in
the ordinance by the board of supervisors or city council.

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

(b) A tax imposed pursuant to this section shall be subject to
applicable voter approval requirements imposed by law.

(c) For purposes of this section, “marijuana” has the same
meaning as the term “marijuana product” set forth in Section
111658 of the Health and Safety Code.

(d) This section does not limit or prohibit the levy or collection
or any other fee, charge, or tax, or a license or service fee or
charge upon, or related to, the activities set forth in subdivision
(a) as otherwise provided by law, including Section 37100.5. This
section shall not be construed as a limitation upon the taxing
authority of a city, county, or city and county as provided by law.

end insert

SEC. 7.  

Section 11362.775 of the Health and Safety Code is
amended to read:

11362.775.  

(a) Qualified patients, persons with valid
identification cards, and the designated primary caregivers of
qualified patients and persons with identification cards, who
cultivate marijuana for medical purposes, shall not solely on the
basis of that fact be subject to state criminal sanctions under
Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570.

(b) An individual employee, officer, or board member of a
facility issued a conditional license pursuant to Part 5 (commencing
with Section 18100) of Division 7 of the Business and Professions
Code shall not be subject to state criminal sanctions under Section
11357, 11358, 11359, 11360, 11366, 11366.5, or 11570 and any
successor statutes, based solely on holding a conditional license,
for the possession, cultivation, processing, packaging, storage,
transportation, sale, or distribution of medical marijuana to a
facility holding a conditional license pursuant to Part 5
(commencing with Section 18100) of Division 7 of the Business
and Professions Code or directly to a qualified patient, a person
with a valid identification card, or the designated primary caregiver
of a qualified patient or person with a valid identification card,
within the state, unless the information contained on the licensing
paperwork is false or falsified, the license has been obtained by
means of fraud, or the person is otherwise in violation of Part 5
(commencing with Section 18100) of Division 7 of the Business
and Professions Code.

(c) This section shall not diminish the protections of Section
18141 of the Business and Professions Code.

SEC. 8.  

Article 8 (commencing with Section 111658) is added
to Chapter 6 of Part 5 of Division 104 of the Health and Safety
Code, to read:

 

Article 8.  Medical Marijuana

 

111658.  

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

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

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

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

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

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

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

111659.  

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

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

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

111660.  

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

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

111661.  

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

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

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

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

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

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

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

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

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

(6) The date of sale.

(7) Any other requirements set by the bureau.

111662.  

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

(a) Baked edible medical marijuana products, including, but not
limited to, brownies, bars, cookies, and cakes, tinctures, and other
edible medical marijuana products that do not require refrigeration
or hot holding may be manufactured, sold, or otherwise distributed
at facilities issued a conditional license pursuant to Part 5
(commencing with Section 18100) of Division 7 of the Business
and Professions Code.

(b) A facility issued a conditional license pursuant to Part 5
(commencing with Section 18100) of Division 7 of the Business
and Professions Code shall have an owner or employee who has
successfully passed an approved and accredited food safety
certification examination as specified in Sections 113947.1,
113947.2, and 113947.3 prior to selling, manufacturing, or
distributing edible medical marijuana products requiring
refrigeration or hot holding.

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

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

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

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

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

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

(A) Manufacture date and source.

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

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

(D) Net weight of medical marijuana in package.

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

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

(G) Any other requirement set by the bureau.

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

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

SEC. 9.  

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

SEC. 10.  

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

SEC. 11.  

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

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

SEC. 12.  

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