Amended in Assembly August 17, 2015

Amended in Senate June 3, 2015

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.

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 Business, Consumer Services, and Housing Agency the Office of Medical Marijuana Regulation, under the supervision and control of the Chief of the Office of Medical Marijuana Regulation, and, beginning no later than July 1, 2018, would require the office 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 begin insert and medical marijuana products end insert . 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 make moneys from the fund available upon appropriation to the office for the purposes of administering this act. The bill would also establish the Special Account for Environmental Enforcement within the Medical Marijuana begin insert Regulation end insert Fund. This account would contain money from fees assessed against licensed cultivation sites and would be available upon appropriation 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 require, among other things, that all marijuana grown, produced, distributed, and sold in the begin delete state meet the certified organic standards end delete begin insert state, end insert by January 1, 2022, begin insert end insert begin insert meet standards equivalent to those for certified organic crops end insert and that the begin delete bureau end delete begin insert office end insert 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 establish enforcement procedures and would authorize a city, county, or city and county to administer and enforce these provisions. The bill, by July 1, 2017, would require the office to report to the Legislature on the begin delete feasability end delete begin insert feasibility end insert of developing a program to certify laboratories for the testing of medical marijuana and related products and the begin delete feasability end delete begin insert feasibility end insert of developing a labeling requirement for edible marijuana products, as specified. 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 a begin delete city, county, or city and county, end delete begin insert county end insert by ordinance, to impose a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing begin insert medical end insert marijuana by an entity issued a conditional license. 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, after July 1, begin delete 2017, end delete begin insert 2018, end insert 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: no. 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 and local governments
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 commercial medical marijuana and not
preempt local government ordinances. 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) Illegal trespass grows on private and public property pose a
threat to public safety and the environment.

(m) 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.

(n) 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.

(o) 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) “Chief” means the Chief of the Office of Medical Marijuana
Regulation.

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

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

(d) “Licensed cultivation site” means a facility that plants,
grows, cultivates, harvests, dries, or processes medical marijuana
and that is issued begin insert both end insert a conditional license pursuant to this part
begin insert and a local license or permit end insert .

(e) “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 begin insert both end insert a conditional license
pursuant to this part begin insert and a local license or permit end insert .

(f) “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 begin insert both end insert a conditional license
pursuant to this part begin insert and a local license or permit end insert .

(g) “Licensed transporter” means an individual or entity issued
begin insert both end insert a conditional license by the office begin insert and a local license or
permit end insert to transport medical marijuana to and from facilities that
have been issued conditional licenses pursuant to this part or
medical marijuana products above a quantity limit established by
the office.

(h) “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.

(i) “Office” means the Office of Medical Marijuana Regulation
in the Business, Consumer Affairs, and Housing Agency.

18101.  

(a) There is hereby created in the Business, Consumer
Affairs, and Housing Agency the Office of Medical Marijuana
Regulation, under the supervision and control of the Chief of the
Office of Medical Marijuana Regulation.

(b) Protection of the public shall be the highest priority for the
office 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 office 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 office 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) (1) The Governor shall appoint the chief at a salary to be
fixed and determined by the secretary with the approval of the
Director of Finance. begin delete 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). end delete

(2) Appointment of the chief shall be subject to confirmation
by the Senate Committee on Rules.

(e) The duty of enforcing and administering this part shall be
vested in the chief. 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 office, including a system for the issuance of citations for
violations of this part, as specified in Section 18127.

(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 office 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 office
shall be advanced as a loan from the General Fund 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 office 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 office 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.
These rules and regulations shall not limit any authority of a city,
county, or city and county provided by law. For the performance
of its duties, the office 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, begin insert testing, end insert 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) Enforcing the licensing and regulatory requirement of this
part, subject to the requirements of Section 18126.

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

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

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

(j) 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.

18104.  

(a) On or before January 1, 2018, the office 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 office shall approve or deny an
application for a conditional license pursuant to this part.

(5) Qualifications for licensees.

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

(c) The office shall not issue a conditional license unless the
applicant has met all of the requirements of this part, including the
requirements of subdivision (d) of Section 18110, and has
demonstrated compliance with all applicable agricultural
requirements, consumer protection requirements, food and product
safety requirements, and environmental requirements, including,
but not limited to, applicable water quality standards.

begin insert

begin insert 18104.5. end insert   

(a) On or before April 1, 2016, the office shall
convene an advisory committee to advise the office on the
development of standards and regulations pursuant to this chapter.
The advisory committee shall recommend to the office the
appropriate roles of each state entity as it pertains to this chapter,
and shall recommend guidelines on communication and
information sharing between state entities, and with local agencies,
for implementation of this chapter.

(b) The advisory committee shall be comprised of gubernatorial
and legislative appointees, including, but not limited to,
representatives of the medical marijuana industry, appropriate
local and state agencies, appropriate local and state law
enforcement, physicians, environmental and public health experts,
and medical marijuana patient advocates.

(c) (1) The advisory committee shall submit a report on these
standards, determinations, and guidelines for implementation of
this chapter to the Legislature and state entities affected by this
chapter by August 1, 2016.

(2) The report submitted to the Legislature shall be submitted
in compliance with Section 9795 of the Government Code.

(3) The requirement for submitting a report imposed pursuant
to this subdivision is inoperative on January 1, 2020, pursuant to
Section 10231.5 of the Government Code.

end insert

18105.  

(a) The chief shall keep a complete record of all
facilities issued a conditional license.

(b) This record shall be made available on the office’s Internet
Web site.

(c) The office shall not disclose information that the office
determines is sensitive and should not be publicly disclosed,
including, but not limited to, the address or location of cultivation
sites.

(d) Upon request, the office shall provide summary information
on all begin delete licensed, end delete begin insert lice end insert begin insert nsees, end insert including, but not limited to, the name
of the licensee, the date the license was issued, the status of the
license, and the licensee’s mailing address.

18106.  

The office shall establish procedures to provide state
and local law begin delete enforcement, end delete begin insert enforcement and state and local
agencies, end insert 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. begin delete 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. end delete begin insert Immunity granted by Measure D shall
be sufficient to comply with the requirement of local approval end insert begin insert for
licensure pursuant to Section 18110. end insert

 

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 other than a licensed transporter shall not transport
medical marijuana from one facility issued a conditional license
to another.

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

18110.  

(a) Beginning no later than July 1, 2018, the office
shall provide for and shall issue conditional licenses. Conditional
licenses shall be required for all activity authorized under this
chapter, including, but not limited to, cultivation, processing,
storage, begin delete transport, end delete begin insert transportation, end insert 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) A conditionally licensed facility shall not commence activity
under the authority of a conditional license until the applicant has
also obtained a license or permit from the local jurisdiction in
which he or she proposes to operate, following the requirements
of local ordinances.

(d) An applicant for a conditional license shall do all begin insert of the end insert
following:

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

(2) Register with the office 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
office pursuant to paragraph (1) of subdivision (p) of Section 11105
of the Penal Code.

(C) The office 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 office.

(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 office 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 begin delete 36 end delete begin insert 24 end insert months. The office shall establish procedures for the
renewal of a conditional license.

(g) Notwithstanding any other law, the office 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 begin delete conformance end delete
begin insert compliance end insert 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 office, 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. A conditional license shall not be denied
solely on the basis of a prior conviction for a felony that was
committed after the enactment of the Compassionate Use begin delete Act, end delete begin insert Act
of 1996, end insert but which would not be a felony after the enactment of
the measure that added this part. The office, at its discretion, may
issue a license to an applicant that would be otherwise denied
pursuant to this begin delete subdivision end delete begin insert subdivision, with the exception of the
requirement of having been issued a conditional license, end insert 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 office 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 office determines any of the following:

(a) The applicant fails to meet the requirements of this part or
has had an applicable permit or license revoked or denied by an
applicable city, county, or city and county agency. 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 office
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 office, 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 office 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 office at a level sufficient to fund the reasonable costs of
all of the following:

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

(2) Costs incurred by the office 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 Resources Control 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. All moneys within the fund are available, upon
appropriation by the Legislature, to the office solely for the
purposes of fully funding and administering this part, including,
but not limited to, the costs incurred by the office 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 18117 shall be deposited in
this account. All moneys within the fund are available, upon
appropriation by the Legislature, to the office 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 office 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.

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 begin insert medical marijuana or end insert medical marijuana
products, a licensed transporter shall do both of the following:

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

(2) Securely transmit a copy of the manifest to the licensee that
will receive the begin insert medical marijuana or end insert medical marijuana product,
and to the office, 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 office
upon request.

18121.  

(a) Transported begin insert medical marijuana and end insert 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 begin insert or medical
marijuana products end insert shall not have external markings or other
indications that it is transporting medical marijuana.

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

(d) The provisions of this section only apply to a licensed
transporter.

18122.  

(a) All transport vehicles carrying medical marijuana
with a retail value greater than ten thousand dollars ($10,000) 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 office 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.

(e) The requirements of this section shall only apply to a licensed
transporter.

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

18126.  

(a) The office may enforce all of the requirements of
this part, including any regulations adopted pursuant to this part.

(b) The office shall delegate the authority to enforce the
requirements of this part, including any regulations, to a city,
county, or city and county, upon request of that entity.

(c) Nothing in this part shall be interpreted to supersede or limit
existing local authority for law enforcement activity, enforcement
of local zoning requirements, or enforcement of local licensing
requirements.

(d) Nothing in this part shall be interpreted to require the office
to undertake local law enforcement responsibilities, enforce local
zoning requirements, or enforce local licensing requirements.

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 office’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, begin delete or end delete
city begin delete prosecutor end delete begin insert prosecutor, the Attorney General, or the office end insert 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

18132.  

(a) The office 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.

end delete

18133.  

(a) No later than January 1, 2022, all medical marijuana
grown, produced, distributed, and sold in the state shall meet begin delete the
certified organic standards. end delete begin insert standards equivalent to those for
certified organic crops. Certification shall be by the office or an
independent third party that contracts with the office for the
purpose of certifying medical marijuana as organic. end insert

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

18134.  

The office shall work with county agricultural
begin delete commissioners, offices end delete begin insert commissioners end insert 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. begin insert Marijuana is a Schedule I drug according
to the federal Controlled Substances Act. Activity related to
marijuana use is subject to federal prosecution, without protections
provided by state law. end insert

(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 begin insert medical end insert marijuana begin insert or
medical marijuana products end insert and theft of begin insert medical end insert marijuana begin insert or
medical marijuana products end insert 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 begin insert medical end insert marijuana begin insert and medical
marijuana products end insert in a secured and locked room, safe, or vault,
and in a manner as to prevent diversion, theft, and loss, except for
limited amounts of marijuana used for display purposes, samples,
or immediate sale.

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

(1) Significant discrepancies identified during inventory. The
level of significance shall be determined by the office.

(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.

begin insert

begin insert 18138. end insert   

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

(b) The office shall notify local law enforcement of all
conditional licenses issued for cultivation sites, manufacturers,
and dispensaries in that jurisdiction.

end insert

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 office for the
purposes of administering this part begin delete 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. end delete begin insert shall be maintained
in accordance with Chapter 1 (commencing with Section 123100)
of Part 1 of Division 106 of the Health and Safety Code, Part 2.6
(commencing with Section 56) of Division 1 of the Civil Code, and
other state and federal laws relating to confidential patient
information. end insert

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

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

(B) Notifications from the office 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 office 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 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 office or a local agency delegated the authority to
enforce the licensing requirements of this part may examine the
books and records of a conditional licensee and may visit and
inspect the premises of a conditional licensee, as the office or local
agency deems necessary to perform its duties under this part.

(c) Books or records requested by the office or a local agency
delegated the authority to enforce licensing requirements of this
part shall be provided by the conditional licensee no later than five
business days after the request is made.

(d) The office or a local agency delegated the authority to
enforce the licensing requirements of this part 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
office shall directly commence proceedings for the revocation of
the conditional license.

(f) If 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.

(g) The office or a local agency delegated the authority to
enforce the licensing requirement of this part may, at its discretion,
require a licensee to contract for an independent audit of the records
required under this section. The licensee shall be liable for all costs
associated with such an audit.

SEC. 6.  

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

23028.  

(a) (1) A begin delete city, county, or city and county, end delete begin insert county end insert may
impose a tax on the privilege of cultivating, dispensing, producing,
processing, preparing, storing, providing, donating, selling, or
distributing begin insert medical end insert marijuana begin insert or medical marijuana products end insert 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 begin delete or city council end delete 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 begin delete supervisors or city council. end delete begin insert supervisors. end insert

begin insert

(3) In addition to any other method of collection authorized by
law, the board of supervisors 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 county. A tax imposed pursuant
to this section is a tax and not a fee or special assessment. The
board of supervisors shall specify whether the tax applies
throughout the entire county or within the unincorporated area of
the county.

end insert begin delete

(3)

end delete

begin insert (4) end insert  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 begin insert is declaratory of existing law and end insert does not limit
or prohibit the levy or collection begin delete or end delete begin insert of end insert 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 begin delete law,
including Section 37100.5. end delete begin insert law. end insert This section shall not be construed
as a limitation upon the taxing authority of a begin delete city, county, or city
and end delete county as provided by law.

begin insert

(e) A tax imposed pursuant to this section is not a sales and use
tax subject to Part 1.5 (commencing with Section 7200) of Division
2 of the Revenue and Taxation Code or a transactions and use tax
subject to Chapter 2 (commencing with Section 7285) of Part 1.7
of Division 2 of the Revenue and Taxation Code. This subdivision
shall not preclude imposition of any other tax authorized under
this section upon the privilege of selling, storing, using, or
consuming medical marijuana.

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 begin delete purpose end delete begin insert purposes end insert of this article, the following
definitions shall apply:

(a) “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.

begin delete

(b) “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.

end delete begin delete

(c)

end delete

begin insert (b) end insert  “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.

begin delete

(d)

end delete

begin insert (c) end insert  “Office” means the Office of Medical Marijuana Regulation
in the Business, Consumer Affairs, and Housing Agency.

begin delete

(e) “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.

end delete

111659.  

On or before July 1, 2017, the office shall report to
the Legislature on the begin delete feasability end delete begin insert feasibility end insert of developing a
program to certify laboratories for the testing of medical marijuana
and related products and the begin delete feasability end delete begin insert feasibility end insert of developing
a labeling requirement for edible marijuana products that
incorporates information on the cannabinoid content.

111660.  

begin delete (a) end delete begin delete   end delete 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
both of the following:

begin delete

(1)

end delete

begin insert (a) end insert  Maintaining supplier information in order for recall
procedures to be implemented, if and when necessary.

begin delete

(2)

end delete

begin insert (b) end insert  Labeling of all medical marijuana and medical marijuana
products that shall, at a minimum, include the following:

begin delete

(A)

end delete

begin insert (1) end insert  List of pharmacologically active ingredients, including, but
not limited to, tetrahydrocannabinol (THC) and cannabidiol (CBD)
content, begin delete clear recommended dosage, and the size or volume of the
recommended dose. end delete begin insert the quantity of active ingredients per serving,
and the total amount within the package. For purposes of this
paragraph, the office shall determine the appropriate size of one
serving. end insert

begin delete

(B)

end delete

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

begin delete

(C)

end delete

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

begin delete

(D)

end delete

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

begin delete

(E)

end delete

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

begin delete

(F)

end delete

begin insert (6) end insert  The date of sale.

begin delete

(G)

end delete

begin insert (7) end insert  Any other requirements set by the office.

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.

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

(f) Prior to sale or distribution at a licensed dispensing facility,
edible medical marijuana products shall be labeled and in begin delete an
opaque and end delete begin insert a end insert 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)  begin delete All end delete begin insert In addition to the labeling requirements set forth in
Section 111660, end insert edible medical marijuana product labels shall
include the following information, prominently displayed and in
a clear and legible font:

(A) Manufacture date and source.

begin delete

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

end delete begin delete

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

end delete begin delete

(D)

end delete

begin insert (B) end insert  Net weight of medical marijuana in package.

begin delete

(E)

end delete

begin insert (C) end insert  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.

begin delete

(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.

end delete begin delete

(G)

end delete

begin insert (D) end insert  Any other requirement set by the office.

(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.

begin insert

begin insert 111663. end insert   

All facilities issued a conditional license pursuant to
Part 5 (commencing with Section 18100) of Division 7 of the
Business and Professions Code that conduct business related to
food or food-based products shall be subject to requirements
equivalent to those of the California Retail Food Code and other
applicable laws, as determined by the office.

end insert

SEC. 9.  

On or before July 1, 2016, the State Board of
Equalization shall compile a report on the estimated 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.

SEC. 13.  

The amendments made to Section 11362.775 of the
Health and Safety Code by this act shall become operative on July
1, begin delete 2017. end delete begin insert 2018. end insert