Amended in Assembly August 18, 2015

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, begin delete and end delete to add Article 8 (commencing with Section 111658) to Chapter 6 of Part 5 of Division 104 of, the Health and Safety Code, begin insert to add Section 3094 to the Labor Code, and to add Section 2402.5 to the Vehicle Code, end insert 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 begin delete Regulation, and, beginning no later than July 1, 2018, would require the office to license and end delete begin insert Regulation. The bill would authorize the office to issue licenses for commercial marijuana activity and would require the office to end insert 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 begin delete conditional end delete 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 begin delete conditional end delete 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 begin delete conformance end delete begin insert compliance end insert with local zoning ordinances and other state and local requirements on January 1, 2016, to continue its operations until its application for begin delete conditional end delete licensure is approved or denied. The bill would set forth provisions related to the transportation, testing, and distribution of medical marijuana and medical marijuana products. 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 Regulation 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, begin delete among other things, that all marijuana grown, produced, distributed, and sold in the state, by January 1, 2022, meet standards equivalent to those for certified organic crops and end delete begin insert the Department of Food and Agriculture, in conjunction with the office, to make available a certified organic designation for medical marijuana by January 1, 2020, or, if the certified organic designation and organic certification program is not available by that date, to develop an equivalent program by January 1, 2022. The bill would also require end insert that the office establish “appellations of origin” for marijuana grown in the state.

begin delete

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

end delete

The bill would establish enforcement procedures and would authorize a city, county, or city and county to administer and enforce these provisions. begin delete The bill, by July 1, 2017, would require the office to report to the Legislature on the feasibility of developing a program to certify laboratories for the testing of medical marijuana and related products and the feasibility of developing a labeling requirement for edible marijuana products, as specified. end delete 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 county by ordinance, to impose a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing medical marijuana by an entity issued a begin delete conditional end delete 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, 2018, 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.

begin insert

(5) Existing law establishes the Division of Apprenticeship Standards, which audits and regulates apprenticeship programs for various trades, including electricians.

end insert begin insert

This bill would require the division to investigate, approve, or reject applications for apprenticeship employees of a licensed cultivation site or a licensed dispensing facility, as defined.

end insert begin insert

(6) Existing law establishes the Department of Motor Vehicles and the Department of the California Highway Patrol. Existing law also prohibits and establishes standards for driving under the influence of alcohol.

end insert begin insert

This bill would require the Department of Motor Vehicles, in consultation with the Department of the California Highway Patrol, to establish protocols to determine whether a driver is operating a vehicle under the influence of cannabis, and to develop protocols setting forth best practices to assist law enforcement agencies. The bill would require the Department of Motor Vehicles to prepare and submit a report, by September 1, 2016, that identifies best practices for the identification, detection, and apprehension of drivers operating a vehicle unsafely due to medical cannabis impairment.

end insert begin delete

(5)

end delete

begin insert (7) end insert  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.

begin delete

(6)

end delete

begin insert (8) end insert  This bill would provide that its provisions are severable.

begin delete

(7)

end delete

begin insert (9) end insert  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.

begin delete

(8)

end delete

begin insert (10) end insert  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. begin delete 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. end delete 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 begin delete conditional end delete 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.

begin insert

(b) “Delivery” means the commercial transfer of medical
marijuana or medical marijuana products from a dispensary, up
to an amount determined by the office, to a primary caregiver or
qualified patient, as defined in Section 11362.7 of the Health and
Safety Code, a testing laboratory, or to an event or location where
it will be used solely for promotional purposes. Delivery also
includes the use by a dispensary of a third party or any technology
platform that enables qualified patients or primary caregivers to
arrange for or facilitate the commercial transfer of medical
marijuana or medical marijuana products.

end insert begin delete

(b)

end delete

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

begin insert

(d) “Distribution” means procurement, sale, and transport of
medical marijuana and medical marijuana products purchased
and sold between licensed entities.

end insert begin insert

(e) “Distributor” means a person who is engaged in the business
of purchasing medical marijuana from a licensed cultivator or
medical marijuana products from a licensed manufacturer in order
to distribute to other licensees.

end insert begin delete

(c)

end delete

begin insert (f) end insert  “Fund” means the Medical Marijuana Regulation Fund
established pursuant to Section 18118.

begin insert

(g) “Labor peace agreement” means an agreement between a
licensee 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. The agreement shall provide a bona fide
labor organization access, at reasonable times, to areas in which
the applicant’s employees work, for the purpose of meeting with
employees to discuss their right to representation, employment
rights under state law, and terms and conditions of employment.
This type of agreement shall not mandate a particular method of
election or certification of the bona fide labor organization.

end insert begin delete

(d)

end delete

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

begin delete

(e)

end delete

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

begin delete

(f)

end delete

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

begin delete

(g)

end delete

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

begin delete

(h)

end delete

begin insert (l) end insert  “Marijuana” begin insert or “cannabis end insert begin insert ” end insert 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.

begin delete

(i)

end delete

begin insert (m) end insert  “Office” means the Office of Medical Marijuana Regulation
in the Business, Consumer begin delete Affairs, end delete begin insert Services, end insert 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)  begin delete Protection of the public shall be the highest priority end delete
begin insert Preservation of patients’ access to medical marijuana and the
protection of the public shall be the highest priorities end insert 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, begin insert testing, end insert 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.

(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 begin delete conditional end delete licenses to persons for the cultivation,
manufacture, transportation, storage, distribution, begin insert testing, end insert and sale
of medical marijuana within the state.

(c) Setting application, licensing, and renewal fees for
begin delete conditional end delete licenses issued pursuant to Section begin delete 18117. end delete begin insert 18114. end insert

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

(e) Establishing procedures for the issuance, renewal,
suspension, denial, and revocation of begin delete conditional end delete 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 begin delete conditional end delete
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 begin delete 18118. end delete begin insert 18115. end insert

(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 begin delete conditional end delete licenses.

(2) Procedures for appeal of fines and the appeal of denial,
suspension, or revocation of begin delete conditional end delete 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 begin delete conditional end delete 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 begin delete conditional end delete license unless the
applicant has met all of the requirements of this part, including the
requirements of subdivision begin delete (d) end delete begin insert (h) end insert 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.

18104.5.  

(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, begin insert representatives
of medical marijuana cultivators, end insert 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.

18105.  

(a) The chief shall keep a complete record of all
facilities issued a begin delete conditional end delete 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 licensees, 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 enforcement and state and local agencies, upon their
request, with 24-hour access to information to verify a begin delete conditional end delete
license, track transportation manifests, and track the inventories
of facilities issued a begin delete conditional end delete license.

begin delete

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. Immunity granted by Measure D
shall be sufficient to comply with the requirement of local approval
for licensure pursuant to Section 18110.

end delete begin insert

begin insert 18107. end insert   

Notwithstanding Section 18119, a licensed transporter
may transport medical marijuana products to an unlicensed
dispensing facility within the City of Los Angeles, provided the
following requirements are met:

(a) The licensed transporter shall comply with subdivisions (b)
and (c) of Section 18117, except that, in complying with paragraph
(2) of subdivision (b), the licensed transporter shall securely
transmit the manifest to the office and the unlicensed dispensing
facility that will receive the medical marijuana products.

(b) The licensed transporter shall record and maintain, in both
physical and electronic format, the following information with
respect to the delivery of medical marijuana products to the
unlicensed dispensing facility:

(1) The date of delivery.

(2) The address of delivery.

(3) The name of the individual who completed the delivery.

(4) The name of the individual at the facility who received the
delivery.

(5) The name of the owner or operator of the facility.

(6) The name of the facility, as reflected on any signage.

(7) The quantity, or weight, and variety of all medical marijuana
products delivered.

(8) The source of all medical marijuana delivered.

(9) The monetary amount charged and received for all medical
marijuana products delivered.

(c) The recorded information specified in subdivision (b) shall
be transmitted within five days to the City of Los Angeles, in a
manner to be determined and specified by the City of Los Angeles.

(d) The records required by this section shall be maintained
and made available in accordance with the regulations
promulgated by the office pursuant to Section 18140.

end insert begin insert

begin insert 18107.1. end insert   

(a) The office shall develop a database containing
the electronic shipping manifests, which shall include, but not be
limited to, the following information:

(1) The quantity, or weight, and variety of products shipped.

(2) The estimated times of departure and arrival.

(3) The quantity, or weight, and variety of products received.

(4) The actual time of arrival.

(5) A categorization of the product.

(b) The database shall be designed to flag irregularities for the
office to investigate. An authorized enforcement authority may, at
any time, inspect shipments and request documentation for current
inventory.

end insert begin insert

begin insert 18107.2. end insert   

(a) This part shall not be construed to authorize or
permit a licensee to transport or deliver, or cause to be transported
or delivered, marijuana or marijuana products outside the state,
unless authorized by federal law.

(b) A local jurisdiction shall not prevent transportation of
medical marijuana or medical marijuana products on public roads
by a licensee transporting medical marijuana or medical marijuana
products that acts in compliance with this part.

(c) A local jurisdiction shall not prevent delivery of medical
marijuana or medical marijuana products on public roads by a
licensee that acts in compliance with this part and applicable local
ordinances.

end insert

 

Chapter  2. begin delete Conditional end delete Licenses

 

18108.  

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

begin delete

(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.

end delete begin insert

(a) A qualified patient who cultivates, possesses, stores,
manufactures, or transports marijuana exclusively for his or her
personal medical use but who does not provide, donate, sell, or
distribute marijuana to any other person or entity is not, thereby,
engaged in commercial marijuana activity and is, therefore, exempt
from the licensure requirements of this part.

end insert begin insert

(b) A primary caregiver who cultivates, possesses, stores,
manufactures, transports, donates, or provides marijuana
exclusively for the personal medical purposes of 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, but 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
is not engaged in commercial marijuana activity and is, therefore,
exempt from the licensure requirements of this part.

end insert

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 begin delete conditional end delete 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.

begin delete

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, transportation, 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.

end delete

begin insert

begin insert 18110. end insert   

end insert begin insert

(a) The office may issue state licenses only to qualified
applicants engaging in commercial marijuana activity pursuant
to this chapter. Upon the date of implementation of regulations
by the office, no person shall engage in commercial marijuana
activity without possessing both a state license and a local permit,
license, or other authorization.

end insert begin insert

(b) Local permits shall be determined by local ordinances. The
office issuing state licenses shall have sole authority to revoke a
state license. Local agencies issuing local permits shall have sole
authority to revoke a local permit.

end insert begin insert

(c) Each applicant for a state license shall provide notice to
every affected local jurisdiction at the same time the state
application is filed. The office shall confirm with the applicant a
list of affected local jurisdictions, including those jurisdictions
affected by potential deliveries by the applicant.

end insert begin insert

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

end insert begin insert

(e) Even if a state license has been granted pursuant to this
chapter, a facility shall not operate in a local jurisdiction that
prohibits the establishment of that type of business. A facility shall
not commence activity under the authority of a state license until
the applicant has obtained, in addition to the state license, a license
or permit from the local jurisdiction in which he or she proposes
to operate, following the requirements of the applicable local
ordinances.

end insert begin insert

(f) If a local government agency notifies the office and provides
evidence that a licensee or applicant within its jurisdiction is in
violation of local ordinances relating to commercial marijuana
activities, the office shall schedule a hearing within 20 days to
determine whether the evidence is sufficient to constitute grounds
for the revocation of the state license.

end insert begin insert

(g) Revocation of a state license or local license or permit shall
terminate the ability of a medical marijuana business to operate
within California until the office or local jurisdiction reinstates
or reissues the state license or local license or permit.

end insert begin delete

(d)

end delete

begin insert (h) end insert  An applicant for a begin delete conditional end delete license shall do all of the
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 begin delete been
legal full-time residents of the state for not less than 12 months. end delete
begin insert their primary residence in California. end insert

(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.

begin insert

(7) For an applicant seeking a cultivation license, provide a
statement declaring the applicant is an “agricultural employer,”
as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
Labor Relations Act of 1975 (Part 3.5 (commencing with Section
1140) of Division 2 of the Labor Code), to the extent not prohibited
by law.

end insert begin delete

(7)

end delete

begin insert (8) end insert  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.

begin delete

(8)

end delete

begin insert (9) end insert  Provide a statement, signed by the applicant under penalty
of perjury, that the information provided is true.

begin delete

(9)

end delete

begin insert (10) end insert  Provide any other information required by the office.

begin delete

(e)

end delete

begin insert (i) end insert  Each location and each discrete use of a single location shall
require a begin delete conditional end delete license. Each application for a begin delete conditional end delete
license is separate and distinct, and the office may charge a separate
fee for each.

begin delete

(f)

end delete

begin insert (j) end insert  A begin delete conditional end delete license issued pursuant to this section shall be
valid for 12 months after the date of issuance. After the initial
12-month period, a begin delete conditional end delete license may be renewed for a period
of begin delete 24 end delete begin insert 12 end insert months. The office shall establish procedures for the
renewal of a begin delete conditional end delete license.

begin delete

(g)

end delete

begin insert (k) end insert  Notwithstanding any other law, the office shall not issue a
begin delete conditional end delete 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 begin delete 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. end delete
begin insert are end insert begin insert pending state or local administrative actions, judicial
proceedings, or other actions initiated against the applicant, by
a city, county, or city and county under an applicable local
ordinance, or who has been determined through those proceedings
to have violated a local ordinance related to commercial marijuana
activity. end insert

begin delete

(h)

end delete

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

begin insert

(m) A licensee shall not be licensed as a retailer of alcoholic
beverages pursuant to Division 9 (commencing with Section
23000).

end insert

18111.  

(a) Upon receipt of the application begin delete 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. end delete begin insert for licensure and the
applicable fee, the office shall make a thorough investigation to
determine whether the applicant and the premises for which a state
license is applied qualify for the state license and whether this
chapter has been complied with, and shall investigate all relevant
matters that may affect the public welfare and morals. end insert

begin insert

(b) The office shall deny an application if either the applicant
or the premises for which a state license is applied do not qualify
for licensure under this part.

end insert begin insert

(c) The office shall deny the application for licensure or renewal,
or suspend or revoke a state license, if any of the following
conditions apply:

end insert begin insert

(1) Conduct involving dishonesty, fraud, or deceit, with the
intent to substantially benefit himself, herself, or another, or
substantially injure another.

end insert begin insert

(2) Failure to comply with the provisions of this part or any
rule or regulation adopted pursuant to this part.

end insert begin insert

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

end insert begin insert

(4) Local agencies have notified the office and provided evidence
that a licensee or applicant within its jurisdiction is in violation
of local ordinances relating to commercial marijuana activities.

end insert begin insert

(5) 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 may submit documentation to the
office detailing its renewal requirements. Failure to submit an
ordinance or resolution to the office shall not impair the
enforceability of the ordinance or resolution. Ordinances or
resolutions that are not submitted pursuant to this subdivision
shall not be considered in denial of licensure pursuant to this part.

end insert begin insert

(6) Granting or continuation of a state license would be contrary
to the public’s safety.

end insert begin insert

(7) The applicant holding or seeking a state license has been
convicted of a misdemeanor involving moral turpitude, excluding
misdemeanors involving possession of a controlled substance.

end insert begin insert

(8) The application has failed to state with sufficient specificity
the jurisdiction and location at which the applicant proposes to
establish operations.

end insert begin insert

(9) The applicant, or any of its officers, directors, or owners,
is under 21 years of age.

end insert begin insert

(10) The applicant fails to provide notarized written proof that
the owner of real property or landlord has acknowledged and
consented to its tenant’s proposed cultivation or dispensing of
medical marijuana or medical marijuana products.

end insert begin insert

(11) The applicant has failed to provide information requested.

end insert begin insert

(12) Unless otherwise provided by this paragraph, the applicant
or any of its officers, directors, or owners, have been convicted of
a crime or act that is substantially related to the qualifications,
functions, or duties of the business or profession for which the
application is made or is convicted of a misdemeanor involving
moral turpitude, excluding misdemeanors involving possession of
a controlled substance. For purposes of this section, a conviction
means a plea or verdict of guilty or a conviction following a plea
of nolo contendere. An action that the office is permitted to take
following the establishment of a conviction, including, but not
limited to, the issuance, renewal, suspension, and revocation of a
license for commercial marijuana activity pursuant to this part,
shall be held in abeyance until after the time for appeal has
elapsed, or the judgment of conviction has been affirmed on appeal.
Action may be taken when an order granting probation is made
suspending the imposition of sentence.

end insert begin insert

(A) An applicant shall not be denied a state license if the denial
is based solely on any of the following:

end insert begin insert

(i) The applicant has been convicted of transporting a controlled
substance pursuant to Section 11352 or 11379 of the Health and
Safety Code prior to January 1, 2014, and the facts underlying the
conviction establish that the applicant did not transport the
controlled substance with the intent to sell or the intent to aid and
abet the commission of, or conspiracy to commit, a crime of
transportation of the controlled substance.

end insert begin insert

(ii) The applicant has been convicted of a felony that would not
be subject to criminal prosecution pursuant to Section 11362.5 or
11362.775 of the Health and Safety Code.

end insert begin insert

(B) An applicant shall not be denied a state license under either
of the following conditions:

end insert begin insert

(i) The applicant has obtained a certificate of rehabilitation
pursuant to Chapter 3.5 (commencing with Section 4852.01) of
Title 6 of Part 3 of the Penal Code, for a crime or act that is
substantially related to the qualifications, functions, or duties of
the business or profession for which the application is made.

end insert begin insert

(ii) The applicant has been convicted of a misdemeanor, and
he or she has met all of the applicable requirements of the criteria
for rehabilitation developed by the office to evaluate the
rehabilitation of a person when considering the denial of license.

end insert begin insert

(C) In determining convictions that are substantially related to
the qualifications, functions, or duties of the business or profession
for which the application is made, the office shall include, but not
be limited to, the following:

end insert begin insert

(i) A felony conviction for the possession for sale, sale,
manufacture, transportation, or cultivation of a controlled
substance.

end insert begin insert

(ii) A violent felony, as specified in subdivision (c) of Section
667.5 of the Penal Code.

end insert begin insert

(iii) A serious felony as specified in subdivision (c) of Section
1192.7 of the Penal Code.

end insert begin insert

(iv) A felony offense involving fraud, deceit, or embezzlement.

end insert begin insert

(13) The applicant, or any of its officers, directors, or owners,
is a licensed physician making patient recommendations for
medical marijuana.

end insert begin insert

(14) The applicant or any of its officers, directors, or owners
has been subject to fines or penalties for cultivation or production
of a controlled substance on public or private lands pursuant to
Section 12025 of the Fish and Game Code.

end insert begin insert

(15) The applicant, or any of its officers, directors, or owners,
have been sanctioned by the office, or a city, county, or a city and
county for unlicensed commercial medical marijuana activities or
has had a license revoked under this part in the previous three
years.

end insert begin insert

(16) The proposed commercial marijuana activity will violate
any applicable local law or ordinance.

end insert begin insert

(17) The applicant has had 20 employees or more in the past
year and failed to enter into a labor peace agreement.

end insert begin insert

(18) The applicant or the owner is unable to show that he or
she has established domicile within the state.

end insert begin insert

(19) Failure to obtain and maintain a valid seller’s permit
required pursuant to Part 1 (commencing with Section 6001) of
the Revenue and Taxation Code.

end insert begin insert

(20) There are pending state or local administrative actions,
judicial proceedings, or other actions initiated against the
applicant, by a city, county, or city and county under an applicable
local ordinance, or who has been determined through those
proceedings to have violated a local ordinance related to
commercial marijuana activity, or who knowingly provides false
or fraudulent information on an application for licensure.

end insert begin insert

(d) Notwithstanding any other section of this part, the office
may grant a license to an applicant who has been convicted of a
crime if the office determines that the applicant is otherwise
suitable to be issued a state license and granting a license would
not compromise public safety. The office shall conduct a thorough
investigation of the nature of the crime, conviction, circumstances,
and evidence of rehabilitation of the applicant, and shall evaluate
the suitability of the applicant to be issued a state license based
on the evidence found through the investigation. In the evaluation,
public protection shall take priority over rehabilitation and, where
evidence of rehabilitation and public protection are in conflict,
public protection shall take precedence.

end insert begin insert

(e) Applicants shall be notified of a denied application, and
licensees of a suspended or revoked license shall be notified, in
writing via personal service or mail addressed to the address of
the applicant or licensee set forth in the application. The letter
shall contain the detailed reasons for which the application was
denied, the license was revoked, or the license was suspended. The
applicant or licensee shall have the right to appeal the denial,
suspension, or revocation and shall be given a hearing within 30
days of the appeal. On appeal, the decision shall be upheld unless
the applicant or licensee demonstrates that he or she is in fact
eligible for licensure and the application or licensee is in
compliance with this part.

end insert begin delete

(b)

end delete

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

begin insert

(g) All proceedings to deny, suspend, or revoke a 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.

end insert

begin delete

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 Act of
1996, 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 subdivision, with the exception of the requirement of having
been issued a conditional license, 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.

end delete

begin delete 18115. end delete
begin insert 18112. end insert   

(a) In addition to the provisions of this part, a
begin delete conditional end delete license shall be subject to the restrictions of the local
jurisdiction in which the facility operates or proposes to operate.
Even if a begin delete conditional end delete 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 begin delete conditionally end delete licensed pursuant to this part and the business
activities of those licensees.

begin delete 18116. end delete
begin insert 18113. end insert   

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

 

Chapter  3. Fees

 

begin delete 18117. end delete
begin insert 18114. end insert   

(a) The begin delete conditional end delete 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 begin delete conditional end delete licensing program and establishing health and
safety standards.

(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 begin delete conditional end delete 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.

begin delete 18118. end delete
begin insert 18115. end insert   

(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 begin delete 18117 end delete begin insert 18114 end insert 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 begin delete 18117 end delete begin insert 18114 end insert 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.

begin delete 18119. end delete
begin insert 18116. end insert   

(a) A facility issued a begin delete conditional end delete 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

 

begin delete

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 or 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 medical marijuana or 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 medical marijuana and 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 or medical
marijuana products 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.

end delete begin insert

begin insert 18117. end insert   

(a) A licensee authorized to transport, or transport
and deliver, medical marijuana and medical marijuana products
shall do so only as set forth in this chapter.

(b) Prior to transporting or delivering medical marijuana or
medical marijuana products, a licensee authorized to transport
or deliver medical marijuana or medical marijuana products shall
do both of the following:

(1) Complete an electronic shipping manifest as prescribed by
the office. All delivery shipping manifests shall not identify the
qualified patient or primary caregiver by name or address.

(2) Securely transmit the manifest to the office and the licensee
that will receive the medical marijuana product, as applicable,
prior to transport.

(c) During transportation or delivery, the licensed transporter
shall maintain a physical copy of the shipping manifest and shall
make it available upon request to office, local law enforcement
officers, or any other designated enforcement agency.

(d) The licensee receiving the shipment shall maintain each
electronic shipping manifest and shall make it available upon
request to agents of the office, local law enforcement officers, or
any other locally designated enforcement agency.

(e) Upon receipt of the transported shipment, a licensee shall
submit to the office a record verifying receipt of the shipment and
the details of the shipment.

(f) Notwithstanding any other law or the wage orders of the
Industrial Welfare Commission, a driver employed to transport
medical marijuana or medical marijuana products shall be entitled
to overtime pay pursuant to Section 510 of the Labor Code.

end insert begin insert

begin insert 18118. end insert   

An entity licensed pursuant to Sections 18109 to 18113,
inclusive, may transport between licensees medical marijuana or
medical marijuana products with a total retail value, weight of
medical marijuana, and weight of medical marijuana products,
below the statewide threshold, which shall be adopted by regulation
by the office after review by the advisory committee and the office.

end insert begin insert

begin insert 18119. end insert   

(a) Transported and delivered medical marijuana or
medical marijuana products shall be transported only in a storage
compartment that is securely affixed to the interior of the
transporting vehicle and that is not visible from outside the vehicle.
This requirement shall only apply to licensees transporting medical
marijuana or medical marijuana products with a total retail value
of at least an amount equal to a statewide monetary threshold,
which shall be adopted by regulation by the office after review by
the advisory committee and the office.

(b) A vehicle transporting medical marijuana or medical
marijuana products shall travel only directly between licensed
facilities authorized to receive the shipment, unless otherwise
authorized under its license. All transport and deliveries shall be
conducted between 8:00 a.m. and 8:00 p.m. Transportation and
delivery of shipments do not have to be completed in a single day.

(c) All transport or delivery vehicles shall be staffed with a
minimum of two direct employees of the licensee. At least one
employee shall remain with the vehicle at all times when the vehicle
contains medical marijuana. This requirement shall only apply to
licensees transporting medical marijuana or medical marijuana
products with a total retail value of at least an amount equal to a
statewide monetary threshold, which shall be adopted by regulation
by the office after review by the advisory committee and the office.

(d) Each transport or delivery 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 upon the request of agents of the
office or a law enforcement official.

(e) This section shall be enforced by the Department of the
California Highway Patrol in collaboration with local agencies.

end insert

 

Chapter  5. Enforcement

 

18124.  

begin delete A state agency end delete begin insert The office end insert 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 begin delete conditional end delete 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, city
prosecutor, the Attorney General, or the office 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.

 

begin insert

Chapter   begin insert 6. end insert begin insert Tiered end insert begin insert Licensing and Vertical Integration end insert

end insert

 

begin insert

begin insert 18131. end insert   

(a) A licensee may only hold a state license in up to
two separate license categories, as follows:

(1) Type 1, 1A, 1B, 2, 2A, and 2B licensees, or a combination
thereof, may apply for a Type 6 or 7 state license, or a combination
thereof.

(2) Type 6 and 7 licensees, or a combination thereof, may apply
for a Type 1, 1A, 1B, 2, 2A, and 2B state license, or a combination
thereof.

(3) Type 6 and 7 licensees, or a combination thereof, may apply
for a Type 10A state license.

(4) Type 10A licensees may apply for a Type 6 and 7 state
license, or a combination thereof.

(5) Type 1, 1A, 1B, 2, 2A, and 2B licensees, or a combination
thereof, may apply for a Type 10A state license.

(6) Type 10A licensees, may apply for Type 1, 1A, 1B, 2, 2A,
and 2B state license, or a combination thereof.

(7) Type 11 licensees may apply for a Type 12 state license.

(8) Type 12 licensees may apply for a Type 11 state license.

(b) State licenses to be issued by the office are as follows:

(1) Type 1, or “specialty outdoor,” for outdoor cultivation using
no artificial lighting of 5,000 square feet or less of total canopy
size on one premises, or up to 50 mature plants on noncontiguous
plots.

(2) Type 1A, or “specialty indoor,” for indoor cultivation using
exclusively artificial lighting of 5,000 square feet or less of total
canopy size on one premises.

(3) Type 1B, or “specialty mixed-light,” for cultivation using
a combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the office, than 5,000
square feet or less of total canopy size on one premises.

(4) Type 2, or “small outdoor,” for outdoor cultivation using
no artificial lighting between 5,001 and 10,000 square feet of total
canopy size on one premises.

(5) Type 2A, or “small indoor,” for indoor cultivation using
exclusively artificial lighting between 5,001 and 10,000 square
feet of total canopy size on one premises.

(6) Type 2B, or “small mixed-light,” for cultivation using a
combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the office, between 5,001
and 10,000 square feet of total canopy size on one premises.

(7) Type 3, or “outdoor,” for outdoor cultivation using no
artificial lighting between 10,001 and 44,000 square feet of total
canopy size on one premises. The office shall limit the number of
licenses allowed of this type.

(8) Type 3A, or “indoor,” for indoor cultivation using
exclusively artificial lighting between 10,001 and 22,000 square
feet of total canopy size on one premises. The office shall limit the
number of licenses allowed of this type.

(9) Type 3B, or “mixed-light,” for cultivation using a
combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the office, between 10,001
and 22,000 square feet of total canopy size on one premises. The
office shall limit the number of licenses allowed of this type.

(10) Type 4, or “nursery,” for cultivation of medical marijuana
solely as a nursery. Type 4 licensees may transport live plants.

(c) The office shall promulgate regulations governing the
licensing of marijuana manufacturers.

(d) Licenses to be issued by the office to marijuana
manufacturers are as follows:

(1) Type 6, or “manufacturing level 1,” for manufacturing sites
that produce medical marijuana products using nonvolatile
solvents.

(2) Type 7, or “manufacturing level 2,” for manufacturing sites
that produce medical marijuana products using volatile solvents.
The office shall limit the number of licenses of this type.

(3) Type 8, or “testing,” for testing of medical marijuana and
medical marijuana products. Type 8 licensees shall have their
facilities certified licensed according to regulations set forth by
the office. A Type 8 licensee shall not hold a license in another
license category of this part and shall not own or have ownership
interest in a facility licensed pursuant to this part.

(e) State licenses to be issued by the office for dispensing and
distributing are as follows:

(1) Type 10, or “dispensary,” for the retail of medical marijuana
and medical marijuana products. This license shall allow for
delivery where expressly authorized by local ordinance.

(2) Type 10A or “special dispensary status,” for dispensers
who have no more than three licensed dispensary facilities. This
license shall allow for delivery where expressly authorized by local
ordinance.

(3) Type 11, or “distributor,” for the certification of the content
of all medical marijuana or medical marijuana products and
distribution licensees. A Type 11 licensee shall hold a Type 12, or
transporter, license and register each facility location where
product is stored for the purposes of distribution. A Type 11
licensee shall not hold a license in a cultivation, manufacturing,
dispensing, or testing license category and shall not own, or have
an ownership interest in, a facility licensed in those categories
other than a security interest, lien, or encumbrance on property
that is used by a licensee. A Type 11 licensee shall be bonded and
insured at a minimum level established by the office.

(4) Type 12, or “transport,” for transporters of medical
marijuana or medical marijuana products. A Type 12 licensee
shall be bonded and insured at a minimum level established by
the office.

end insert

 

Chapter   begin delete 6. end delete begin insert 7. end insert Cultivation Sites

 

begin delete

18133.  

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

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

end delete begin insert

begin insert 18132. end insert   

(a) Not later than January 1, 2020, the Department of
Food and Agriculture, in conjunction with the office, shall make
available a certified organic designation and organic certification
program for medical marijuana, if permitted under federal law.

(b) If the certified organic designation and organic certification
program is not available to medical marijuana by January 1, 2020,
the Department of Food and Agriculture, in conjunction with the
office, shall develop an equivalent program with standards for
designation and certification for medical marijuana by January
1, 2022.

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

(d) It is unlawful for medical marijuana to be marketed, labeled,
or sold as grown in a California county when the medical
marijuana was not grown in that county.

(e) It is unlawful to use the name of a California county in the
labeling, marketing, or packaging of medical marijuana products
unless the product was grown in that county.

end insert

begin delete 18134. end delete
begin insert 18133. end insert   

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

 

Chapter   begin delete 7. end delete begin insert 8. end insert Regulation of Medical Marijuana

 

begin insert

begin insert 18134. end insert   

This part and Article 2 (commencing with Section
11357) and Article 2.5 (commencing with Section 11362.7) of
Chapter 6 of Division 10 of the Health and Safety Code shall not
interfere with an employer’s rights and obligations to maintain a
drug and alcohol free workplace or require an employer to permit
or accommodate the use, consumption, possession, transfer,
display, transportation, sale, or growth of marijuana in the
workplace or affect the ability of employers to have policies
prohibiting the use of marijuana by employees and prospective
employees, or prevent employers from complying with state or
federal law.

end insert

begin delete 18136. end delete
begin insert 18135. end insert   

(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:

begin insert end insert

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. 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.

begin insert 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.

begin delete 18137. end delete
begin insert 18136. end insert   

(a) A facility issued a begin delete conditional end delete license shall
implement sufficient security measures to both deter and prevent
unauthorized entrance into areas containing medical marijuana or
medical marijuana products and theft of medical marijuana or
medical marijuana products 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 medical marijuana and medical marijuana
products 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 begin delete conditional end delete 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 delete 18138. end delete
begin insert 18137. end insert   

(a) A licensed cultivation site or licensed dispensing
facility shall display the begin delete conditional end delete 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
begin delete conditional end delete licenses issued for cultivation sites, manufacturers,
and dispensaries in that jurisdiction.

begin delete 18140. end delete
begin insert 18138. end insert   

(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 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.

(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.

begin delete 18141. end delete
begin insert 18139. end insert   

(a) The actions of a licensee, its employees, and its
agents, that are permitted pursuant to a begin delete conditional end delete 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 begin delete conditional end delete
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.

begin delete 18142. end delete
begin insert 18140. end insert   

(a) A licensee shall not cultivate, process, store,
manufacture, transport, begin insert test, end insert or sell medical marijuana in the state
unless accurate records are kept at the licensed premises of the
growing, processing, storing, manufacturing, transporting, begin insert testing, end insert
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 begin delete conditional end delete license. A licensee
who has a begin delete conditional end delete license for more than one premises may
keep all records at one of the begin delete conditionally end delete 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 begin delete conditional end delete licensee and may visit and
inspect the premises of a begin delete conditional end delete 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 begin delete conditional end delete 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 begin delete conditional end delete 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 begin delete conditional end delete license may be summarily suspended and the
office shall directly commence proceedings for the revocation of
the begin delete conditional end delete 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.

 

begin insert

Chapter   begin insert 9. end insert begin insert Apprenticeship Program end insert

end insert

 

begin insert

begin insert 18141. end insert   

This chapter applies only to cultivation sites and
dispensaries.

end insert begin insert

begin insert 18142. end insert   

The Division of Labor Standards Enforcement shall do
all of the following:

(a) Maintain minimum standards for the competency and
training of employees of a licensed cultivator or dispensary through
a system of testing and certification.

(b) Maintain an advisory committee and panels as necessary
to carry out its functions under this chapter. There shall be
employer representation on the committee and panels.

(c) Adopt regulations as determined to be necessary to
implement this chapter.

(d) Issue certification cards to employees certified pursuant to
this chapter.

(e) Establish registration fees in an amount reasonably
necessary to implement this chapter, not to exceed twenty-five
dollars ($25) for the initial registration. There shall be no fee for
annual renewal of registration. Fees collected for cultivation sites
and dispensaries shall be placed into the Medical Marijuana
Regulation Fund.

end insert begin insert

begin insert 18143. end insert   

(a) By January 1, 2017, the Division of Labor
Standards Enforcement shall develop a certification program for
marijuana employees. Commencing January 1, 2019, except as
provided in subdivision (c), certification shall be required of all
persons who perform work as marijuana employees.

(b) Individuals desiring to be certified shall submit an
application for certification and examination.

(c) (1) Certification is not required for registered apprentices
working as marijuana employees as part of a state-approved
apprenticeship program. An apprentice who is within one year of
completion of his or her term of apprenticeship shall be permitted
to take the certification examination and, upon passing the
examination, shall be certified immediately upon completion of
the term of apprenticeship.

(2) Commencing January 1, 2019, an uncertified person may
perform work for which certification is otherwise required in order
to acquire the necessary on-the-job experience for certification
provided that the person shall be under the direct supervision of
a marijuana employee certified pursuant to this section who is
responsible for supervising no more than one uncertified person.

(3) The Division of Labor Standards Enforcement may develop
additional criteria governing this subdivision.

end insert begin insert

begin insert 18144. end insert   

(a) The following shall constitute additional grounds
for disciplinary proceedings, including suspension or revocation
of the license issued pursuant to this part:

(1) The licensee willfully employs one or more uncertified
persons to perform work as marijuana employees in violation of
this chapter.

(2) The licensee willfully fails to provide adequate supervision
of uncertified workers.

(3) The licensee willfully fails to provide adequate supervision
of apprentices.

(b) The Labor Commissioner shall maintain a process for
referring cases to the office when it has been determined that a
violation of this section has likely occurred. The Labor
Commissioner shall have a memorandum of understanding with
the regulatory authorities office in furtherance of this section.

(c) Upon receipt of a referral by the Labor Commissioner
alleging a violation under this section, the office shall open an
investigation. Disciplinary action against the licensee shall be
initiated within 60 days of the receipt of the referral. The office
may initiate disciplinary action against a licensee upon his or her
own investigation, the filing of a complaint, or a finding that results
from a referral from the Labor Commissioner alleging a violation
under this section. Failure of the employer or employee to provide
evidence of certification or apprentice status shall create a
rebuttable presumption of violation of this section.

(d) This section shall become operative on January 1, 2019.

end insert

 

begin insert

Chapter   begin insert 10. end insert begin insert Tracking Program end insert

end insert

 

begin insert

begin insert 18145. end insert   

On or before March 1, 2016, the chief shall submit a
request for proposal to the public regarding a tracking program
for medical marijuana and medical marijuana products as part
of the antidiversion effort. The office shall choose a supplier and
begin full implementation of the program prior to the issuance of
state licenses pursuant to this part.

end insert

SEC. 6.  

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

23028.  

(a) (1) A county may impose a tax on the privilege of
cultivating, dispensing, producing, processing, preparing, storing,
providing, donating, selling, or distributing medical marijuana or
medical marijuana products 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 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.

(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.

(4) 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 is declaratory of existing law and does not limit
or prohibit the levy or collection of 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.
This section shall not be construed as a limitation upon the taxing
authority of a county as provided by law.

(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.

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 begin delete conditional end delete 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 begin delete conditional end delete license,
for the possession, cultivation, processing, packaging, storage,
transportation, begin insert testing, end insert sale, or distribution of medical marijuana
to a facility holding a begin delete conditional end delete 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
begin delete 18141 end delete begin insert 18139 end insert 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 purposes 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.

(b) “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.

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

begin delete

111659.  

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

111660.  

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:

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

(b) 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, 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.

(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 office.

end delete begin insert

begin insert 111659. end insert   

(a) The office shall promulgate regulations for
implementation and enforcement, including requirements to ensure
that all licensees and certified testing laboratories conform with
applicable standards equivalent to state statutory environmental,
agricultural, consumer protection, and food and product safety
requirements. These standards shall be in addition, and not limited,
to any other state and local requirements.

(b) Medical marijuana and medical marijuana products shall
be tested by a certified testing laboratory, prior to retail sale or
dispensing, as follows:

(1) Medical marijuana from dried flower shall, at a minimum,
be tested for potency, pesticides, mold, rodenticide, and other
contaminants.

(2) Medical marijuana extracts shall, at a minimum, be tested
for potency and purity of the product.

(3) This article shall not prohibit a licensee from performing
onsite testing for the purposes of quality assurance of the product
in conjunction with reasonable business operations. Onsite testing
by the licensee shall not be certified by the office.

(c) The office shall promulgate standards for certification of
testing laboratories to perform random sample testing of all
medical marijuana and medical marijuana products, including
standards for onsite testing.

(d) 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 17020 and ISO/IEC 17025.

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

(f) A laboratory certified by the office to perform random sample
testing of medical marijuana or medical marijuana products shall
not acquire or receive medical marijuana or medical marijuana
products except from a licensed facility in accordance with this
article, and shall not distribute, sell, deliver, transfer, transport,
or dispense medical marijuana or medical marijuana products
except to the licensed facility from which the medical marijuana
or medical marijuana products were acquired or received. All
transfer or transportation shall be performed pursuant to a
specified chain of custody protocol.

(g) The office shall develop procedures to ensure that testing
of marijuana occurs prior to delivery to dispensaries or any other
business, and specify how often licensees shall test marijuana, that
the cost of testing shall be borne by the licensed cultivators, and
requiring destruction of harvested batches whose testing samples
indicate noncompliance with health and safety standards
promulgated by the office, unless remedial measures can bring
the marijuana into compliance with quality assurance standards
as promulgated by the office.

(h) The office shall establish a certification fee, and laboratories
shall pay a fee to be certified. Certification fees shall not exceed
the reasonable regulatory cost of the certification activities.

(i) All certification fees collected by the office pursuant to this
chapter shall be deposited into the Medical Marijuana Regulation
Fund. All moneys in the Medical Marijuana Regulation Fund that
are attributable to this section shall be available to the office upon
appropriation of the Legislature solely for the purpose of fully
funding administration of this article, including, but not limited
to, the costs incurred by the office for the administrative expenses
and costs and the costs of regulation.

end insert begin insert

begin insert 111660. end insert   

(a) The office shall promulgate the following public
health standards:

(1) Health and safety standards applicable to all medical
marijuana and medical marijuana products, including maximum
potency standards for medical marijuana products.

(2) Standards for licensed manufacturers of medical marijuana
and medical marijuana products, including, but not limited to,
edible products.

(b) At a minimum, the standards required by this section shall
do all of the following:

(1) Prescribe sanitation standards equivalent to the California
Retail Food Code (Part 7 (commencing with Section 113700)) for
food preparation, storage, handling, and sale of edible medical
marijuana products. For purposes of this article, edible medical
marijuana products are deemed to be unadulterated food products.

(2) 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.

(3) 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.

(4) Require that all edible medical marijuana products shall be
packaged at the original point of preparation.

(c) No person shall engage in the manufacture, packing, or
holding of processed food containing edible marijuana unless the
person has a valid registration from the office pursuant to Sections
18109 to 18113, inclusive, of the Business and Professions Code.
Health and safety standards prescribed by this section or
promulgated through regulation may be enforced by local
environmental health departments.

end insert begin insert

begin insert 111661. end insert   

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

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

(2) All medical marijuana product labels shall include the
following information, shall be prominently displayed, and shall
be 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) The statement “THE INTOXICATING EFFECTS OF THIS
PRODUCT MAY BE DELAYED BY UP TO TWO HOURS.”

(E) The statement “THIS PRODUCT MAY IMPAIR THE
ABILITY TO DRIVE OR OPERATE MACHINERY. PLEASE USE
EXTREME CAUTION.”

(F) For packages containing only dried marijuana, the net
weight of medical marijuana in the package.

(G) A warning if nuts or other known allergens are used.

(H) List of pharmacologically active ingredients, including, but
not limited to, tetrahydrocannabinol (THC), cannabidiol (CBD),
and other cannabinoid content, the THC and other cannabinoid
amount in milligrams per serving, servings per package, and the
THC and other cannabinoid amount in milligrams for the package
total.

(I) Clear indication, in bold type, that the product contains
medical marijuana.

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

(K) The date of sale.

(L) Any other requirement set by the office.

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

end insert

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 begin delete conditional end delete license pursuant to Part 5
(commencing with Section 18100) of Division 7 of the Business
and Professions Code.

(b) A facility issued a begin delete conditional end delete 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 office’s regulations.

(f) Prior to sale or distribution at a licensed dispensing facility,
edible medical marijuana products shall be labeled and in a 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) In addition to the labeling requirements set forth in Section
111660, 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) Net weight of medical marijuana in package.

(C) 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.

(D) 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.

111663.  

All facilities issued a begin delete conditional end delete 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.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 3094 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 3094. end insert   

The Division of Apprenticeship Standards shall
investigate, approve, or reject applications for apprenticeship
programs for employees of a licensee subject to Sections 18141
to 18144, inclusive, of the Business and Professions Code. The
Division of Apprenticeship Standards shall adopt regulations
necessary to implement and regulate the establishment of the
apprenticeship programs described in this section.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 2402.5 is added to the end insert begin insert Vehicle Code end insert begin insert , to read: end insert

begin insert

begin insert 2402.5. end insert   

(a) The Department of the California Highway Patrol
shall establish protocols to determine whether a driver is operating
a vehicle under the influence of marijuana, and shall develop
protocols setting forth best practices to assist law enforcement
agencies. The costs to the Department of the California Highway
Patrol of implementing this subdivision shall, upon appropriation
by the Legislature, be paid for with appropriations from moneys
in the Medical Marijuana Regulation Fund.

(b) (1) Department of Motor Vehicles, in consultation with the
Department of the California Highway Patrol, shall prepare a
report to the Office of Medical Marijuana Regulation, the Senate,
and the Assembly that identifies best practices for the identification,
detection, and apprehension of drivers operating a vehicle unsafely
due to marijuana impairment.

(2) It is the intent of the Legislature that Department of Motor
Vehicles use various resources, including, but not limited to, peer
reviewed research and drug recognition experts to prepare the
report.

(3) The report shall include, but not be limited to, an
identification of roadside tests that enhance the ability of law
enforcement officers to detect marijuana impairment and specific
indicators that correlate performance on roadside testing with the
inability of a driver to safely operate a motor vehicle.

(4) Publication of the report shall not occur until the Department
of the California Highway Patrol concurs with its findings.

(5) The report shall be provided no later than September 1,
2016.

(6) The Department of Motor Vehicles and the Department of
the California Highway Patrol are authorized to contract for
consultation services necessary to complete the report and receive
reimbursement for the costs of consultation services from the
Medical Marijuana Regulation Fund.

end insert

begin delete SEC. 9. end delete
begin insert SEC. 11. end insert   

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.

begin delete SEC. 10. end delete
begin insert SEC. 12. end insert   

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.

begin delete SEC. 11. end delete
begin insert SEC. 13. end insert   

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).

begin delete SEC. 12. end delete
begin insert SEC. 14. end insert   

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.

begin delete SEC. 13. end delete
begin insert SEC. 15. end insert   

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