Amended in Assembly September 11, 2015

Amended in Assembly September 4, 2015

Amended in Assembly September 1, 2015

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 BillNo. 643


Introduced by Senator McGuire

February 27, 2015


An act amendbegin delete Section 2220.05 ofend deletebegin insert Sections 144, 2220.05, 2241.5, and 2242.1 of, to add Sections 19302.1, 19319, 19320, 19322, 19323, 19324, and 19325 to, to add Article 25 (commencing with Section 2525) to Chapter 5 of Division 2 of, and to add Article 6 (commencing with Section 19331), Article 7.5 (commencing with Section 19335), Article 8 (commencing with Section 19337), and Article 11 (commencing with Section 19348) to Chapter 3.5 of Division 8 of,end insert the Business and Professions Code, relating to medical marijuana.

LEGISLATIVE COUNSEL’S DIGEST

SB 643, as amended, McGuire. Medical marijuana.

begin delete

Existing

end delete

begin insert(1)end insertbegin insertend insertbegin insertExistingend insert 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 billbegin delete wouldend deletebegin insert would, among other things, set forth standards for a physician and surgeon prescribing medical cannabis andend insert requirebegin delete thatend delete the Medical Board of Californiabegin insert toend insert prioritize its investigative and prosecutorial resources to identify and discipline physicians and surgeons that have repeatedly recommended excessive cannabis to patients for medical purposes or repeatedly recommending cannabis to patients for medical purposes without a good faith examination, as specified.begin delete The bill would become operative only if AB 266 of the 2015-16 Regular Session is enacted and takes effect on or before January 1, 2016.end deletebegin insert The bill would require the Bureau of Medical Marijuana to require an applicant to furnish a full set of fingerprints for the purposes of conducting criminal history record checks. The bill would prohibit a physician and surgeon who recommends cannabis to a patient for a medical purpose from accepting, soliciting, or offering any form of remuneration from a facility licensed under the Medical Marijuana Regulation and Safety Act. The bill would make a violation of this prohibition a misdemeanor, and by creating a new crime, this bill would impose a state-mandated local program.end insert

begin insert

This bill would require the Governor, under the Medical Marijuana Regulation and Safety Act, to appoint, subject to confirmation by the Senate, a chief of the Bureau of Medical Marijuana Regulation. The act would require the Department of Consumer Affairs to have the sole authority to create, issue, renew, discipline, suspend, or revoke licenses for the transportation and storage, unrelated to manufacturing, of medical marijuana, and would authorize the department to collect fees for its regulatory activities and impose specified duties on this department in this regard. The act would require the Department of Food and Agriculture to administer the provisions of the act related to, and associated with, the cultivation, and transportation of, medical cannabis and would impose specified duties on this department in this regard. The act would require the State Department of Public Health to administer the provisions of the act related to, and associated with, the manufacturing and testing of medical cannabis and would impose specified duties on this department in this regard.

end insert
begin insert

This bill would authorize counties to impose a tax upon specified cannabis-related activity.

end insert
begin insert

This bill would require an applicant for a state license pursuant to the act to provide a statement signed by the applicant under penalty of perjury, thereby changing the scope of a crime and imposing a state-mandated local program.

end insert
begin insert

This bill would set forth standards for the licensed cultivation of medical cannabis, including, but not limited to, establishing duties relating to the environmental impact of cannabis and cannabis products. The bill would also establish state cultivator license types, as specified.

end insert
begin insert

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

end insert
begin insert

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

end insert
begin insert

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

end insert
begin insert

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

end insert
begin insert

(4) Existing constitutional provisions require that a statute that limits the right of access to the meeting of public bodies or the writings of public bodies or the writings of public officials and agencies be adopted with finding demonstrating the interest protected by the limitation and the need for protecting that interest. The bill would make legislative findings to that effect.

end insert
begin insert

(5) The bill would become operative only if AB 266 and AB 243 of the 2015-16 Regular Session are enacted and take effect on or before January 1, 2016.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

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

P4    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 144 of the end insertbegin insertBusiness and Professions Codeend insert
2begin insert is amended to read:end insert

3

144.  

(a) Notwithstanding any other provision of law, an agency
4designated in subdivision (b) shall require an applicant to furnish
5to the agency a full set of fingerprints for purposes of conducting
6criminal history record checks. Any agency designated in
7subdivision (b) may obtain and receive, at its discretion, criminal
8history information from the Department of Justice and the United
9States Federal Bureau of Investigation.

10(b) Subdivision (a) applies to the following:

11(1) California Board of Accountancy.

12(2) State Athletic Commission.

13(3) Board of Behavioral Sciences.

14(4) Court Reporters Board of California.

15(5) State Board of Guide Dogs for the Blind.

16(6) California State Board of Pharmacy.

17(7) Board of Registered Nursing.

18(8) Veterinary Medical Board.

19(9) Board of Vocational Nursing and Psychiatric Technicians.

20(10) Respiratory Care Board of California.

21(11) Physical Therapy Board of California.

22(12) Physician Assistant Committee of the Medical Board of
23California.

24(13) Speech-Language Pathology and Audiology and Hearing
25Aid Dispenser Board.

26(14) Medical Board of California.

27(15) State Board of Optometry.

28(16) Acupuncture Board.

29(17) Cemetery and Funeral Bureau.

30(18) Bureau of Security and Investigative Services.

31(19) Division of Investigation.

32(20) Board of Psychology.

33(21) California Board of Occupational Therapy.

34(22) Structural Pest Control Board.

35(23) Contractors’ State License Board.

36(24) Naturopathic Medicine Committee.

37(25) Professional Fiduciaries Bureau.

P5    1(26) Board for Professional Engineers, Land Surveyors, and
2Geologists.

begin insert

3(27) Bureau of Medical Marijuana Regulation.

end insert

4(c) For purposes of paragraph (26) of subdivision (b), the term
5“applicant” shall be limited to an initial applicant who has never
6been registered or licensed by the board or to an applicant for a
7new licensure or registration category.

8

begin deleteSECTION 1.end delete
9begin insertSEC. 2.end insert  

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

11

2220.05.  

(a) In order to ensure that its resources are maximized
12for the protection of the public, the Medical Board of California
13shall prioritize its investigative and prosecutorial resources to
14ensure that physicians and surgeons representing the greatest threat
15of harm are identified and disciplined expeditiously. Cases
16involving any of the following allegations shall be handled on a
17priority basis, as follows, with the highest priority being given to
18cases in the first paragraph:

19(1) Gross negligence, incompetence, or repeated negligent acts
20that involve death or serious bodily injury to one or more patients,
21such that the physician and surgeon represents a danger to the
22public.

23(2) Drug or alcohol abuse by a physician and surgeon involving
24death or serious bodily injury to a patient.

25(3) Repeated acts of clearly excessive prescribing, furnishing,
26or administering of controlled substances, or repeated acts of
27prescribing, dispensing, or furnishing of controlled substances
28without a good faith prior examination of the patient and medical
29reason therefor. However, in no event shall a physician and surgeon
30prescribing, furnishing, or administering controlled substances for
31intractable pain consistent with lawful prescribing, including, but
32not limited to, Sections 725, 2241.5, and 2241.6 of this code and
33Sections 11159.2 and 124961 of the Health and Safety Code, be
34prosecuted for excessive prescribing and prompt review of the
35applicability of these provisions shall be made in any complaint
36that may implicate these provisions.

37(4) Repeated acts of clearly excessive recommending of cannabis
38to patients for medical purposes, or repeated acts of recommending
39cannabis to patients for medical purposes without a good faith
P6    1prior examination of the patient and a medical reason for the
2recommendation.

3(5) Sexual misconduct with one or more patients during a course
4of treatment or an examination.

5(6) Practicing medicine while under the influence of drugs or
6alcohol.

7(b) The board may by regulation prioritize cases involving an
8allegation of conduct that is not described in subdivision (a). Those
9cases prioritized by regulation shall not be assigned a priority equal
10to or higher than the priorities established in subdivision (a).

11(c) The Medical Board of California shall indicate in its annual
12report mandated by Section 2312 the number of temporary
13restraining orders, interim suspension orders, and disciplinary
14actions that are taken in each priority category specified in
15subdivisions (a) and (b).

16begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 2241.5 of the end insertbegin insertBusiness and Professions Codeend insert
17begin insert is amended to read:end insert

18

2241.5.  

(a) A physician and surgeon may prescribe for, or
19dispense or administer to, a person under his or her treatment for
20a medical condition dangerous drugs or prescription controlled
21substances for the treatment of pain or a condition causing pain,
22including, but not limited to, intractable pain.

23(b) No physician and surgeon shall be subject to disciplinary
24action for prescribing, dispensing, or administering dangerous
25drugs or prescription controlled substances in accordance with this
26section.

27(c) This section shall not affect the power of the board to take
28any action described in Section 2227 against a physician and
29surgeon who does any of the following:

30(1) Violates subdivision (b), (c), or (d) of Section 2234 regarding
31gross negligence, repeated negligent acts, or incompetence.

32(2) Violates Section 2241 regarding treatment of an addict.

33(3) Violates Section 2242begin insert or 2525.3end insert regarding performing an
34appropriate prior examination and the existence of a medical
35indication for prescribing, dispensing, or furnishing dangerous
36begin delete drugs.end deletebegin insert drugs or recommending medical cannabis.end insert

37(4) Violates Section 2242.1 regarding prescribing on the Internet.

38(5) Fails to keep complete and accurate records of purchases
39and disposals of substances listed in the California Uniform
40Controlled Substances Act (Division 10 (commencing with Section
P7    111000) of the Health and Safety Code) or controlled substances
2scheduled in the federal Comprehensive Drug Abuse Prevention
3and Control Act of 1970 (21 U.S.C. Sec. 801 et seq.), or pursuant
4to the federal Comprehensive Drug Abuse Prevention and Control
5Act of 1970. A physician and surgeon shall keep records of his or
6her purchases and disposals of these controlled substances or
7dangerous drugs, including the date of purchase, the date and
8records of the sale or disposal of the drugs by the physician and
9surgeon, the name and address of the person receiving the drugs,
10and the reason for the disposal or the dispensing of the drugs to
11the person, and shall otherwise comply with all state recordkeeping
12requirements for controlled substances.

13(6) Writes false or fictitious prescriptions for controlled
14substances listed in the California Uniform Controlled Substances
15Act or scheduled in the federal Comprehensive Drug Abuse
16Prevention and Control Act of 1970.

17(7) Prescribes, administers, or dispenses in violation of this
18chapter, or in violation of Chapter 4 (commencing with Section
1911150) or Chapter 5 (commencing with Section 11210) of Division
2010 of the Health and Safety Code.

21(d) A physician and surgeon shall exercise reasonable care in
22determining whether a particular patient or condition, or the
23complexity of a patient’s treatment, including, but not limited to,
24a current or recent pattern of drug abuse, requires consultation
25with, or referral to, a more qualified specialist.

26(e) Nothing in this section shall prohibit the governing body of
27a hospital from taking disciplinary actions against a physician and
28surgeon pursuant to Sections 809.05, 809.4, and 809.5.

29begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 2242.1 of the end insertbegin insertBusiness and Professions Codeend insert
30begin insert is amended to read:end insert

31

2242.1.  

(a) No person or entity may prescribe, dispense, or
32furnish, or cause to be prescribed, dispensed, or furnished,
33dangerous drugs or dangerous devices, as defined in Section 4022,
34on the Internet for delivery to any person in this state, without an
35appropriate prior examination and medical indication, except as
36authorized by Section 2242.

37(b) Notwithstanding any other provision of law, a violation of
38this section may subject the person or entity that has committed
39the violation to either a fine of up to twenty-five thousand dollars
40($25,000) per occurrence pursuant to a citation issued by the board
P8    1or a civil penalty of twenty-five thousand dollars ($25,000) per
2occurrence.

3(c) The Attorney General may bring an action to enforce this
4section and to collect the fines or civil penalties authorized by
5subdivision (b).

6(d) For notifications made on and after January 1, 2002, the
7Franchise Tax Board, upon notification by the Attorney General
8or the board of a final judgment in an action brought under this
9section, shall subtract the amount of the fine or awarded civil
10penalties from any tax refunds or lottery winnings due to the person
11who is a defendant in the action using the offset authority under
12Section 12419.5 of the Government Code, as delegated by the
13Controller, and the processes as established by the Franchise Tax
14Board for this purpose. That amount shall be forwarded to the
15board for deposit in the Contingent Fund of the Medical Board of
16California.

17(e) If the person or entity that is the subject of an action brought
18pursuant to this section is not a resident of this state, a violation
19of this section shall, if applicable, be reported to the person’s or
20entity’s appropriate professional licensing authority.

21(f) Nothing in this section shall prohibit the board from
22commencing a disciplinary action against a physician and surgeon
23pursuant to Sectionbegin delete 2242.end deletebegin insert 2242 or 2525.3.end insert

24begin insert

begin insertSEC. 5.end insert  

end insert

begin insertArticle 25 (commencing with Section 2525) is added
25to Chapter 5 of Division 2 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert,
26to read:end insert

begin insert

27 

28Article begin insert25.end insert  Recommending Medical Cannabis
29

 

30

begin insert2525.end insert  

(a) It is unlawful for a physician and surgeon who
31recommends cannabis to a patient for a medical purpose to accept,
32solicit, or offer any form of remuneration from or to a facility
33issued a state license pursuant to Chapter 3.5 (commencing with
34Section 19300) of Division 8, if the physician and surgeon or his
35or her immediate family have a financial interest in that facility.

36(b) For the purposes of this section, “financial interest” shall
37have the same meaning as in Section 650.01.

38(c) A violation of this section shall be a misdemeanor punishable
39by up to one year in county jail and a fine of up to five thousand
P9    1dollars ($5,000) or by civil penalties of up to five thousand dollars
2($5,000) and shall constitute unprofessional conduct.

3

begin insert2525.1.end insert  

The Medical Board of California shall consult with
4the California Marijuana Research Program, known as the Center
5for Medicinal Cannabis Research, authorized pursuant to Section
611362.9 of the Health and Safety Code, on developing and adopting
7medical guidelines for the appropriate administration and use of
8medical cannabis.

9

begin insert2525.2.end insert  

An individual who possesses a license in good standing
10to practice medicine or osteopathy issued by the Medical Board
11of California or the Osteopathic Medical Board of California shall
12not recommend medical cannabis to a patient, unless that person
13is the patient’s attending physician, as defined by subdivision (a)
14of Section 11362.7 of the Health and Safety Code.

15

begin insert2525.3.end insert  

Recommending medical cannabis to a patient for a
16medical purpose without an appropriate prior examination and a
17medical indication constitutes unprofessional conduct.

18

begin insert2525.4.end insert  

It is unprofessional conduct for any attending physician
19recommending medical cannabis to be employed by, or enter into
20any other agreement with, any person or entity dispensing medical
21cannabis.

22

begin insert2525.5.end insert  

(a) A person shall not distribute any form of
23advertising for physician recommendations for medical cannabis
24in California unless the advertisement bears the following notice
25to consumers:


27NOTICE TO CONSUMERS: The Compassionate Use Act of
281996 ensures that seriously ill Californians have the right to obtain
29and use cannabis for medical purposes where medical use is
30deemed appropriate and has been recommended by a physician
31who has determined that the person’s health would benefit from
32the use of medical cannabis. Recommendations must come from
33an attending physician as defined in Section 11362.7 of the Health
34and Safety Code. Cannabis is a Schedule I drug according to the
35federal Controlled Substances Act. Activity related to cannabis
36use is subject to federal prosecution, regardless of the protections
37provided by state law.


39(b) Advertising for attending physician recommendations for
40medical cannabis shall meet all of the requirements in Section
P10   1651. Price advertising shall not be fraudulent, deceitful, or
2misleading, including statements or advertisements of bait,
3discounts, premiums, gifts, or statements of a similar nature.

end insert
4begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 19302.1 is added to the end insertbegin insertBusiness and
5Professions Code
end insert
begin insert, to read:end insert

begin insert
6

begin insert19302.1.end insert  

(a) The Governor shall appoint a chief of the bureau,
7subject to confirmation by the Senate, at a salary to be fixed and
8determined by the director with the approval of the Director of
9Finance. The chief shall serve under the direction and supervision
10of the director and at the pleasure of the Governor.

11(b) Every power granted to or duty imposed upon the director
12under this chapter may be exercised or performed in the name of
13the director by a deputy or assistant director or by the chief, subject
14to conditions and limitations that the director may prescribe. In
15addition to every power granted or duty imposed with this chapter,
16the director shall have all other powers and duties generally
17applicable in relation to bureaus that are part of the Department
18of Consumer Affairs.

19(c) The director may employ and appoint all employees
20necessary to properly administer the work of the bureau, in
21accordance with civil service laws and regulations.

22(d) The Department of Consumer Affairs shall have the sole
23authority to create, issue, renew, discipline, suspend, or revoke
24licenses for the transportation, storage unrelated to manufacturing
25activities, distribution, and sale of medical marijuana within the
26state and to collect fees in connection with activities the bureau
27regulates. The bureau may create licenses in addition to those
28identified in this chapter that the bureau deems necessary to
29effectuate its duties under this chapter.

30(e) The Department of Food and Agriculture shall administer
31the provisions of this chapter related to and associated with the
32 cultivation of medical cannabis. The Department of Food and
33Agriculture shall have the authority to create, issue, and suspend
34or revoke cultivation licenses for violations of this chapter. The
35State Department of Public Health shall administer the provisions
36of this chapter related to and associated with the manufacturing
37and testing of medical cannabis.

end insert
38begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 19319 is added to the end insertbegin insertBusiness and Professions
39Code
end insert
begin insert, to read:end insert

begin insert
P11   1

begin insert19319.end insert  

(a) A qualified patient, as defined in Section 11362.7
2of the Health and Safety Code, who cultivates, possesses, stores,
3manufactures, or transports cannabis exclusively for his or her
4personal medical use but who does not provide, donate, sell, or
5distribute cannabis to any other person is not thereby engaged in
6commercial cannabis activity and is therefore exempt from the
7licensure requirements of this chapter.

8(b) A primary caregiver who cultivates, possesses, stores,
9manufactures, transports, donates, or provides cannabis exclusively
10for the personal medical purposes of no more than five specified
11qualified patients for whom he or she is the primary caregiver
12within the meaning of Section 11362.7 of the Health and Safety
13Code, but who does not receive remuneration for these activities
14except for compensation in full compliance with subdivision (c)
15of Section 11362.765 of the Health and Safety Code, is exempt
16from the licensure requirements of this chapter.

end insert
17begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 19320 is added to the end insertbegin insertBusiness and Professions
18Code
end insert
begin insert, to read:end insert

begin insert
19

begin insert19320.end insert  

(a) Licensing authorities administering this chapter
20may issue state licenses only to qualified applicants engaging in
21commercial cannabis activity pursuant to this chapter. Upon the
22date of implementation of regulations by the licensing authority,
23no person shall engage in commercial cannabis activity without
24possessing both a state license and a local permit, license, or other
25authorization. A licensee shall not commence activity under the
26authority of a state license until the applicant has obtained, in
27addition to the state license, a license or permit from the local
28jurisdiction in which he or she proposes to operate, following the
29requirements of the applicable local ordinance.

30(b) Revocation of a local license, permit, or other authorization
31shall terminate the ability of a medical cannabis business to
32operate within that local jurisdiction until the local jurisdiction
33reinstates or reissues the local license, permit, or other required
34authorization. Local authorities shall notify the bureau upon
35revocation of a local license. The bureau shall inform relevant
36licensing authorities.

37(c) Revocation of a state license shall terminate the ability of a
38medical cannabis licensee to operate within California until the
39licensing authority reinstates or reissues the state license. Each
40licensee shall obtain a separate license for each location where it
P12   1engages in commercial medical cannabis activity. However,
2transporters only need to obtain licenses for each physical location
3where the licensee conducts business while not in transport, or
4any equipment that is not currently transporting medical cannabis
5or medical cannabis products, permanently resides.

6(d) In addition to the provisions of this chapter, local
7jurisdictions retain the power to assess fees and taxes, as
8applicable, on facilities that are licensed pursuant to this chapter
9and the business activities of those licensees.

10(e) Nothing in this chapter shall be construed to supersede or
11limit state agencies, including the State Water Resources Control
12Board and Department of Fish and Wildlife, from establishing
13fees to support their medical cannabis regulatory programs.

end insert
14begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 19322 is added to the end insertbegin insertBusiness and Professions
15Code
end insert
begin insert, to read:end insert

begin insert
16

begin insert19322.end insert  

(a) A person or entity shall not submit an application
17for a state license issued by the department pursuant to this chapter
18unless that person or entity has received a license, permit, or
19authorization by a local jurisdiction. An applicant for any type of
20state license issued pursuant to this chapter shall do all of the
21following:

22(1) Electronically submit to the Department of Justice fingerprint
23images and related information required by the Department of
24Justice for the purpose of obtaining information as to the existence
25and content of a record of state or federal convictions and arrests,
26and information as to the existence and content of a record of state
27or federal convictions and arrests for which the Department of
28Justice establishes that the person is free on bail or on his or her
29own recognizance, pending trial or appeal.

30(A) The Department of Justice shall provide a response to the
31licensing authority pursuant to paragraph (1) of subdivision (p)
32of Section 11105 of the Penal Code.

33(B) The licensing authority shall request from the Department
34of Justice subsequent notification service, as provided pursuant
35to Section 11105.2 of the Penal Code, for applicants.

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

39(2) Provide documentation issued by the local jurisdiction in
40which the proposed business is operating certifying that the
P13   1applicant is or will be in compliance with all local ordinances and
2regulations.

3(3) Provide evidence of the legal right to occupy and use the
4proposed location. For an applicant seeking a cultivator,
5distributor, manufacturing, or dispensary license, provide a
6statement from the owner of real property or their agent where
7the cultivation, distribution, manufacturing, or dispensing
8commercial medical cannabis activities will occur, as proof to
9demonstrate the landowner has acknowledged and consented to
10permit cultivation, distribution, manufacturing, or dispensary
11activities to be conducted on the property by the tenant applicant.

12(4) If the application is for a cultivator or a dispensary, provide
13evidence that the proposed location is located beyond at least a
14600 foot radius from a school, as required by Section 11362.768
15of the Health and Safety Code.

16(5) Provide a statement, signed by the applicant under penalty
17of perjury, that the information provided is complete, true, and
18accurate.

19(6) (A) For an applicant with 20 or more employees, provide
20a statement that the applicant will enter into, or demonstrate that
21it has already entered into, and abide by the terms of a labor peace
22agreement.

23(B) For the purposes of this paragraph, “employee” does not
24include a supervisor.

25(C) For purposes of this paragraph, “supervisor” means an
26individual having authority, in the interest of the licensee, to hire,
27transfer, suspend, lay off, recall, promote, discharge, assign,
28reward, or discipline other employees, or responsibility to direct
29them or to adjust their grievances, or effectively to recommend
30such action, if, in connection with the foregoing, the exercise of
31that authority is not of a merely routine or clerical nature, but
32requires the use of independent judgment.

33(7) Provide the applicant’s seller’s permit number issued
34pursuant to Part 1 (commencing with Section 6001) of Division 2
35of the Revenue and Taxation Code or indicate that the applicant
36is currently applying for a seller’s permit.

37(8) Provide any other information required by the licensing
38authority.

39(9) For an applicant seeking a cultivation license, provide a
40statement declaring the applicant is an “agricultural employer,”
P14   1as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural
2Labor Relations Act of 1975 (Part 3.5 (commencing with Section
31140) of Division 2 of the Labor Code), to the extent not prohibited
4by law.

5(10) For an applicant seeking licensure as a testing laboratory,
6register with the State Department of Public Health and provide
7any information required by the State Department of Public Health.

8(11) Pay all applicable fees required for licensure by the
9licensing authority.

10(b) For applicants seeking licensure to cultivate, distribute, or
11manufacture medical cannabis, the application shall also include
12a detailed description of the applicant’s operating procedures for
13all of the following, as required by the licensing authority:

14(1) Cultivation.

15(2) Extraction and infusion methods.

16(3) The transportation process.

17(4) Inventory procedures.

18(5) Quality control procedures.

end insert
19begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 19323 is added to the end insertbegin insertBusiness and
20Professions Code
end insert
begin insert, to read:end insert

begin insert
21

begin insert19323.end insert  

(a) The licensing authority shall deny an application
22if either the applicant or the premises for which a state license is
23applied do not qualify for licensure under this chapter.

24(b) The licensing authority may deny the application for
25licensure or renewal of a state license if any of the following
26conditions apply:

27(1) Failure to comply with the provisions of this chapter or any
28rule or regulation adopted pursuant to this chapter, including but
29not limited to, any requirement imposed to protect natural
30resources, instream flow, and water quality pursuant to subdivision
31(a) of Section 19332.

32(2) Conduct that constitutes grounds for denial of licensure
33pursuant to Chapter 2 (commencing with Section 480) of Division
341.5.

35(3) A local agency has notified the licensing authority that a
36licensee or applicant within its jurisdiction is in violation of state
37rules and regulation relating to commercial cannabis activities,
38and the licensing authority, through an investigation, has
39determined that the violation is grounds for termination or
40revocation of the license. The licensing authority shall have the
P15   1authority to collect reasonable costs, as determined by the licensing
2authority, for investigation from the licensee or applicant.

3(4) The applicant has failed to provide information required by
4the licensing authority.

5(5) The applicant or licensee has been convicted of an offense
6that is substantially related to the qualifications, functions, or
7duties of the business or profession for which the application is
8made, except that if the licensing authority determines that the
9applicant or licensee is otherwise suitable to be issued a license
10and granting the license would not compromise public safety, the
11licensing authority shall conduct a thorough review of the nature
12of the crime, conviction, circumstances, and evidence of
13rehabilitation of the applicant, and shall evaluate the suitability
14of the applicant or licensee to be issued a license based on the
15evidence found through the review. In determining which offenses
16are substantially related to the qualifications, functions, or duties
17of the business or profession for which the application is made,
18the licensing authority shall include, but not be limited to, the
19following:

20(A) A felony conviction for the illegal possession for sale, sale,
21manufacture, transportation, or cultivation of a controlled
22 substance.

23(B) A violent felony conviction, as specified in subdivision (c)
24of Section 667.5 of the Penal Code.

25(C) A serious felony conviction, as specified in subdivision (c)
26of Section 1192.7 of the Penal Code.

27(D) A felony conviction involving fraud, deceit, or embezzlement.

28(6) The applicant, or any of its officers, directors, or owners,
29is a licensed physician making patient recommendations for
30medical cannabis pursuant to Section 11362.7 of the Health and
31Safety Code.

32(7) The applicant or any of its officers, directors, or owners has
33been subject to fines or penalties for cultivation or production of
34a controlled substance on public or private lands pursuant to
35Section 12025 or 12025.1 of the Fish and Game Code.

36(8) The applicant, or any of its officers, directors, or owners,
37has been sanctioned by a licensing authority or a city, county, or
38city and county for unlicensed commercial medical cannabis
39activities or has had a license revoked under this chapter in the
P16   1three years immediately preceding the date the application is filed
2with the licensing authority.

3(9) Failure to obtain and maintain a valid seller’s permit
4required pursuant to Part 1 (commencing with Section 6001) of
5Division 2 of the Revenue and Taxation Code.

end insert
6begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 19324 is added to the end insertbegin insertBusiness and
7Professions Code
end insert
begin insert, to read:end insert

begin insert
8

begin insert19324.end insert  

Upon the denial of any application for a license, the
9licensing authority shall notify the applicant in writing. Within 30
10days of service of the notice, the applicant may file a written
11petition for a license with the licensing authority. Upon receipt of
12a timely filed petition, the licensing authority shall set the petition
13for hearing. The hearing shall be conducted in accordance with
14Chapter 5 (commencing with Section 11500) of Part 1 of Division
153 of Title 2 of the Government Code, and the director of each
16licensing authority shall have all the powers granted therein.

end insert
17begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 19325 is added to the end insertbegin insertBusiness and
18Professions Code
end insert
begin insert, to read:end insert

begin insert
19

begin insert19325.end insert  

An applicant shall not be denied a state license if the
20denial is based solely on any of the following:

21(a) A conviction or act that is substantially related to the
22qualifications, functions, or duties of the business or profession
23for which the application is made for which the applicant or
24licensee has obtained a certificate of rehabilitation pursuant to
25Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part
263 of the Penal Code.

27(b) A conviction that was subsequently dismissed pursuant to
28Section 1203.4, 1203.4a, or 1203.41 of the Penal Code.

end insert
29begin insert

begin insertSEC. 13.end insert  

end insert

begin insertArticle 6 (commencing with Section 19331) is added
30to Chapter 3.5 of Division 8 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert,
31to read:end insert

begin insert

32 

33Article begin insert6.end insert  Licensed Cultivation Sites
34

 

35

begin insert19331.end insert  

The Legislature finds and declares all of the following:

36(a) The United States Environmental Protection Agency has not
37established appropriate pesticide tolerances for, or permitted the
38registration and lawful use of, pesticides on cannabis crops
39intended for human consumption pursuant to the Federal
40Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 136 et seq.).

P17   1(b) The use of pesticides is not adequately regulated due to the
2omissions in federal law, and cannabis cultivated in California
3for California patients can and often does contain pesticide
4residues.

5(c) Lawful California medical cannabis growers and caregivers
6urge the Department of Pesticide Regulation to provide guidance,
7in absence of federal guidance, on whether the pesticides currently
8used at most cannabis cultivation sites are actually safe for use
9on cannabis intended for human consumption.

10

begin insert19332.end insert  

(a) The Department of Food and Agriculture shall
11promulgate regulations governing the licensing of indoor and
12outdoor cultivation sites.

13(b) The Department of Pesticide Regulation, in consultation
14with the Department of Food and Agriculture, shall develop
15standards for the use of pesticides in cultivation, and maximum
16tolerances for pesticides and other foreign object residue in
17harvested cannabis.

18(c) The State Department of Public Health shall develop
19standards for the production and labeling of all edible medical
20cannabis products.

21(d) The Department of Food and Agriculture, in consultation
22with the Department of Fish and Wildlife and the State Water
23Resources Control Board, shall ensure that individual and
24cumulative effects of water diversion and discharge associated
25with cultivation do not affect the instream flows needed for fish
26spawning, migration, and rearing, and the flows needed to maintain
27natural flow variability.

28(e) The Department of Food and Agriculture shall have the
29authority necessary for the implementation of the regulations it
30adopts pursuant to this chapter. The regulations shall do all of the
31following:

32(1) Provide that weighing or measuring devices used in
33connection with the sale or distribution of medical cannabis are
34required to meet standards equivalent to Division 5 (commencing
35with Section 12001).

36(2) Require that cannabis cultivation by licensees is conducted
37in accordance with state and local laws related to land conversion,
38grading, electricity usage, water usage, agricultural discharges,
39and similar matters. Nothing in this chapter, and no regulation
40adopted by the department, shall be construed to supersede or
P18   1limit the authority of the State Water Resources Control Board,
2regional water quality control boards, or the Department of Fish
3and Wildlife to implement and enforce their statutory obligations
4or to adopt regulations to protect water quality, water supply, and
5natural resources.

6(3) Establish procedures for the issuance and revocation of
7unique identifiers for activities associated with a cannabis
8cultivation license, pursuant to Article 8 (commencing with Section
919337). All cannabis shall be labeled with the unique identifier
10issued by the Department of Food and Agriculture.

11(4) Prescribe standards, in consultation with the bureau, for
12the reporting of information as necessary related to unique
13identifiers, pursuant to Article 8 (commencing with Section 19337).

14(f) The Department of Pesticide Regulation, in consultation with
15the State Water Resources Control Board, shall promulgate
16regulations that require that the application of pesticides or other
17pest control in connection with the indoor or outdoor cultivation
18of medical cannabis meets standards equivalent to Division 6
19(commencing with Section 11401) of the Food and Agricultural
20Code and its implementing regulations.

21(g) State cultivator license types issued by the Department of
22Food and Agriculture include:

23(1) Type 1, or “specialty outdoor,” for outdoor cultivation using
24no artificial lighting of less than or equal to 5,000 square feet of
25total canopy size on one premises, or up to 50 mature plants on
26 noncontiguous plots.

27(2) Type 1A, or “specialty indoor,” for indoor cultivation using
28exclusively artificial lighting of less than or equal to 5,000 square
29feet of total canopy size on one premises.

30(3) Type 1B, or “specialty mixed-light,” for cultivation using
31a combination of natural and supplemental artificial lighting at a
32maximum threshold to be determined by the licensing authority,
33of less than or equal to 5,000 square feet of total canopy size on
34one premises.

35(4) Type 2, or “small outdoor,” for outdoor cultivation using
36no artificial lighting between 5,001 and 10,000 square feet,
37inclusive, of total canopy size on one premises.

38(5) Type 2A, or “small indoor,” for indoor cultivation using
39exclusively artificial lighting between 5,001 and 10,000 square
40feet, inclusive, of total canopy size on one premises.

P19   1(6) Type 2B, or “small mixed-light,” for cultivation using a
2combination of natural and supplemental artificial lighting at a
3maximum threshold to be determined by the licensing authority,
4between 5,001 and 10,000 square feet, inclusive, of total canopy
5size on one premises.

6(7) Type 3, or “outdoor,” for outdoor cultivation using no
7artificial lighting from 10,001 square feet to one acre, inclusive,
8of total canopy size on one premises. The Department of Food and
9Agriculture shall limit the number of licenses allowed of this type.

10(8) Type 3A, or “indoor,” for indoor cultivation using
11exclusively artificial lighting between 10,001 and 22,000 square
12feet, inclusive, of total canopy size on one premises. The
13Department of Food and Agriculture shall limit the number of
14licenses allowed of this type.

15(9) Type 3B, or “mixed-light,” for cultivation using a
16combination of natural and supplemental artificial lighting at a
17maximum threshold to be determined by the licensing authority,
18between 10,001 and 22,000 square feet, inclusive, of total canopy
19size on one premises. The Department of Food and Agriculture
20shall limit the number of licenses allowed of this type.

21(10) Type 4, or “nursery,” for cultivation of medical cannabis
22solely as a nursery. Type 4 licensees may transport live plants.

23

begin insert19332.5.end insert  

(a) Not later than January 1, 2020, the Department
24of Food and Agriculture in conjunction with the bureau, shall
25make available a certified organic designation and organic
26certification program for medical marijuana, if permitted under
27federal law and the National Organic Program (Section 6517 of
28the federal Organic Foods Production Act of 1990 (7 U.S.C. Sec.
296501 et seq.)), and Article 7 (commencing with Section 110810)
30of Chapter 5 of Part 5 of Division 104 of the Health and Safety
31Code.

32(b) The bureau may establish appellations of origin for
33marijuana grown in California.

34(c) It is unlawful for medical marijuana to be marketed, labeled,
35or sold as grown in a California county when the medical
36marijuana was not grown in that county.

37(d) It is unlawful to use the name of a California county in the
38labeling, marketing, or packaging of medical marijuana products
39unless the product was grown in that county.

P20   1

begin insert19333.end insert  

An employee engaged in commercial cannabis
2cultivation activity shall be subject to Wage Order 4-2001 of the
3Industrial Welfare Commission.

end insert
4begin insert

begin insertSEC. 14.end insert  

end insert

begin insertArticle 7.5 (commencing with Section 19335) is added
5to Chapter 3.5 of Division 8 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert,
6to read:end insert

begin insert

7 

8Article begin insert7.5.end insert  Unique Identifier and Track and Trace Program
9

 

10

begin insert19335.end insert  

(a) The Department of Food and Agriculture, in
11consultation with the bureau, shall establish a track and trace
12program for reporting the movement of medical marijuana items
13throughout the distribution chain that utilizes a unique identifier
14pursuant to Section 11362.777 of the Health and Safety Code and
15secure packaging and is capable of providing information that
16captures, at a minimum, all of the following:

17(1) The licensee receiving the product.

18(2) The transaction date.

19(3) The cultivator from which the product originates, including
20the associated unique identifier, pursuant to Section 11362.777
21of the Health and Safety Code.

22(b) (1) The Department of Food and Agriculture shall create
23an electronic database containing the electronic shipping manifests
24which shall include, but not be limited to, the following
25information:

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

27(B) The estimated times of departure and arrival.

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

29(D) The actual time of departure and arrival.

30(E) A categorization of the product.

31(F) The license number and the unique identifier pursuant to
32Section 11362.777 of the Health and Safety Code issued by the
33licensing authority for all licensees involved in the shipping
34process, including cultivators, transporters, distributors, and
35dispensaries.

36(2) (A) The database shall be designed to flag irregularities
37for all licensing authorities in this chapter to investigate. All
38licensing authorities pursuant to this chapter may access the
39database and share information related to licensees under this
P21   1chapter, including social security and individual taxpayer
2identifications notwithstanding Section 30.

3(B) The Department of Food and Agriculture shall immediately
4inform the bureau upon the finding of an irregularity or suspicious
5finding related to a licensee, applicant, or commercial cannabis
6activity for investigatory purposes.

7(3) Licensing authorities and state and local agencies may, at
8any time, inspect shipments and request documentation for current
9inventory.

10(4) The bureau shall have 24-hour access to the electronic
11database administered by the Department of Food and Agriculture.

12(5) The Department of Food and Agriculture shall be authorized
13to enter into memoranda of understandings with licensing
14authorities for data sharing purposes, as deemed necessary by the
15Department of Food and Agriculture.

16(6) Information received and contained in records kept by the
17Department of Food and Agriculture or licensing authorities for
18the purposes of administering this section are confidential and
19shall not be disclosed pursuant to the California Public Records
20Act (Chapter 3.5 (commencing with Section 6250) of Division 7
21of Title 1 of the Government Code), except as necessary for
22authorized employees of the State of California or any city, county,
23or city and county to perform official duties pursuant to this
24chapter or a local ordinance.

25(7) Upon the request of a state or local law enforcement agency,
26licensing authorities shall allow access to or provide information
27contained within the database to assist law enforcement in their
28duties and responsibilities pursuant to this chapter.

29

begin insert19336.end insert  

(a) Chapter 4 (commencing with Section 55121) of
30Part 30 of Division 2 of the Revenue and Taxation Code shall
31apply with respect to the bureau’s collection of the fees, civil fines,
32and penalties imposed pursuant to this chapter.

33(b) Chapter 8 (commencing with Section 55381) of Part 30 of
34Division 2 of the Revenue and Taxation Code shall apply with
35respect to the disclosure of information under this chapter.

end insert
36begin insert

begin insertSEC. 15.end insert  

end insert

begin insertArticle 8 (commencing with Section 19337) is added
37to Chapter 3.5 of Division 8 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert,
38to read:end insert

begin insert

P22   1 

2Article begin insert8.end insert  Licensed Transporters
3

 

4

begin insert19337.end insert  

(a) A licensee authorized to transport medical cannabis
5and medical cannabis products between licenses shall do so only
6as set forth in this chapter.

7(b) Prior to transporting medical cannabis or medical cannabis
8products, a licensed transporter of medical cannabis or medical
9cannabis products shall do both of the following:

10(1) Complete an electronic shipping manifest as prescribed by
11the licensing authority. The shipping manifest must include the
12unique identifier, pursuant to Section 11362.777 of the Health and
13Safety Code, issued by the Department of Food and Agriculture
14for the original cannabis product.

15(2) Securely transmit the manifest to the bureau and the licensee
16that will receive the medical cannabis product. The bureau shall
17inform the Department of Food and Agriculture of information
18pertaining to commercial cannabis activity for the purpose of the
19track and trace program identified in Section 19335.

20(c) During transportation, the licensed transporter shall
21maintain a physical copy of the shipping manifest and make it
22available upon request to agents of the Department of Consumer
23Affairs and law enforcement officers.

24(d) The licensee receiving the shipment shall maintain each
25electronic shipping manifest and shall make it available upon
26request to the Department of Consumer Affairs and any law
27enforcement officers.

28(e) Upon receipt of the transported shipment, the licensee
29receiving the shipment shall submit to the licensing agency a record
30verifying receipt of the shipment and the details of the shipment.

31(f) Transporting, or arranging for or facilitating the transport
32of, medical cannabis or medical cannabis products in violation of
33this chapter is grounds for disciplinary action against the license.

34

begin insert19338.end insert  

(a) This chapter shall not be construed to authorize
35or permit a licensee to transport or cause to be transported
36cannabis or cannabis products outside the state, unless authorized
37by federal law.

38(b) A local jurisdiction shall not prevent transportation of
39medical cannabis or medical cannabis products on public roads
P23   1by a licensee transporting medical cannabis or medical cannabis
2products in compliance with this chapter.

end insert
3begin insert

begin insertSEC. 16.end insert  

end insert

begin insertArticle 11 (commencing with Section 19348) is added
4to Chapter 3.5 of Division 8 of the end insert
begin insertBusiness and Professions Codeend insertbegin insert,
5to read:end insert

begin insert

6 

7Article begin insert11.end insert  Taxation
8

 

9

begin insert19348.end insert  

(a) (1) A county may impose a tax on the privilege of
10cultivating, dispensing, producing, processing, preparing, storing,
11providing, donating, selling, or distributing medical cannabis or
12medical cannabis products by a licensee operating pursuant to
13this chapter.

14(2) The board of supervisors shall specify in the ordinance
15proposing the tax the activities subject to the tax, the applicable
16rate or rates, the method of apportionment, if necessary, and the
17manner of collection of the tax. The tax may be imposed for general
18governmental purposes or for purposes specified in the ordinance
19by the board of supervisors.

20(3) In addition to any other method of collection authorized by
21law, the board of supervisors may provide for the collection of the
22tax imposed pursuant to this section in the same manner, and
23subject to the same penalties and priority of lien, as other charges
24and taxes fixed and collected by the county. A tax imposed pursuant
25to this section is a tax and not a fee or special assessment. The
26board of supervisors shall specify whether the tax applies
27throughout the entire county or within the unincorporated area of
28the county.

29(4) The tax authorized by this section may be imposed upon any
30or all of the activities set forth in paragraph (1), as specified in
31the ordinance, regardless of whether the activity is undertaken
32individually, collectively, or cooperatively, and regardless of
33whether the activity is for compensation or gratuitous, as
34determined by the board of supervisors.

35(b) A tax imposed pursuant to this section shall be subject to
36applicable voter approval requirements imposed by law.

37(c) This section is declaratory of existing law and does not limit
38or prohibit the levy or collection of any other fee, charge, or tax,
39or a license or service fee or charge upon, or related to, the
40activities set forth in subdivision (a) as otherwise provided by law.
P24   1This section shall not be construed as a limitation upon the taxing
2authority of a county as provided by law.

3(d) This section shall not be construed to authorize a county to
4impose a sales or use tax in addition to the sales and use tax
5imposed under an ordinance conforming to the provisions of
6Sections 7202 and 7203 of the Revenue and Taxation Code.

end insert
7begin insert

begin insertSEC. 17.end insert  

end insert
begin insert

The provisions of this act are severable. If any
8provision of this act or its application is held invalid, that invalidity
9shall not affect other provisions or applications that can be given
10effect without the invalid provision or application.

end insert
11begin insert

begin insertSEC. 18.end insert  

end insert
begin insert

The Legislature finds and declares that Section 14
12of this act, which adds Section 19335 to the Business and
13Professions Code, thereby imposes a limitation on the public’s
14right of access to the meetings of public bodies or the writings of
15public officials and agencies within the meaning of Section 3 of
16Article I of the California Constitution. Pursuant to that
17constitutional provision, the Legislature makes the following
18findings to demonstrate the interest protected by this limitation
19and the need for protecting that interest:

end insert
begin insert

20The limitation imposed under this act is necessary for purposes
21of compliance with the federal Health Insurance Portability and
22Accountability Act of 1996 (42 U.S.C. Sec. 1320d et seq.), the
23Confidentiality of Medical Information Act (Part 2.6 (commencing
24with Section 56) of Division 1 of the Civil Code), and the Insurance
25Information and Privacy Protection Act (Article 6.6 (commencing
26with Section 791) of Part 2 of Division 1 of the Insurance Code).

end insert
27begin insert

begin insertSEC. 19.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant
28to Section 6 of Article XIII B of the California Constitution for
29certain costs that may be incurred by a local agency or school
30district because, in that regard, this act creates a new crime or
31infraction, eliminates a crime or infraction, or changes the penalty
32for a crime or infraction, within the meaning of Section 17556 of
33the Government Code, or changes the definition of a crime within
34the meaning of Section 6 of Article XIII B of the California
35Constitution.

end insert
begin insert

36However, if the Commission on State Mandates determines that
37this act contains other costs mandated by the state, reimbursement
38to local agencies and school districts for those costs shall be made
39pursuant to Part 7 (commencing with Section 17500) of Division
404 of Title 2 of the Government Code.

end insert
P25   1

begin deleteSEC. 2.end delete
2begin insertSEC. 20.end insert  

This act shall become operative only if Assembly
3Bill 266begin insert and Assembly Bill 243end insert of the 2015-16 Sessionbegin delete isend deletebegin insert areend insert
4 enacted andbegin delete takesend deletebegin insert takeend insert effect on or before January 1, 2016.



O

    91