BILL NUMBER: SB 643	AMENDED
	BILL TEXT

	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

INTRODUCED BY   Senator McGuire

                        FEBRUARY 27, 2015

   An act amend  Section 2220.05 of   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,  the Business and Professions Code, relating
to medical marijuana.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 643, as amended, McGuire. Medical marijuana. 
    Existing 
    (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   would, among other things,
set forth standards for a physician and surgeon prescribing medical
cannabis and require  that  the Medical Board
of California  to  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.  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.   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 prohib   ition
a misdemeanor, and by creating a new crime, this bill would impose a
state-mandated local program.  
   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.  
   This bill would authorize counties to impose a tax upon specified
cannabis-related activity.  
   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.  
   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.  
   (2) This bill would provide that its provisions are severable.
 
   (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.  
   This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason. 

   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.  
   (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.  
   (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. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 144 of the   Business
and Professions Code   is amended to read: 
   144.  (a) Notwithstanding any other provision of law, an agency
designated in subdivision (b) shall require an applicant to furnish
to the agency a full set of fingerprints for purposes of conducting
criminal history record checks. Any agency designated in subdivision
(b) may obtain and receive, at its discretion, criminal history
information from the Department of Justice and the United States
Federal Bureau of Investigation.
   (b) Subdivision (a) applies to the following:
   (1) California Board of Accountancy.
   (2) State Athletic Commission.
   (3) Board of Behavioral Sciences.
   (4) Court Reporters Board of California.
   (5) State Board of Guide Dogs for the Blind.
   (6) California State Board of Pharmacy.
   (7) Board of Registered Nursing.
   (8) Veterinary Medical Board.
   (9) Board of Vocational Nursing and Psychiatric Technicians.
   (10) Respiratory Care Board of California.
   (11) Physical Therapy Board of California.
   (12) Physician Assistant Committee of the Medical Board of
California.
   (13) Speech-Language Pathology and Audiology and Hearing Aid
Dispenser Board.
   (14) Medical Board of California.
   (15) State Board of Optometry.
   (16) Acupuncture Board.
   (17) Cemetery and Funeral Bureau.
   (18) Bureau of Security and Investigative Services.
   (19) Division of Investigation.
   (20) Board of Psychology.
   (21) California Board of Occupational Therapy.
   (22) Structural Pest Control Board.
   (23) Contractors' State License Board.
   (24) Naturopathic Medicine Committee.
   (25) Professional Fiduciaries Bureau.
   (26) Board for Professional Engineers, Land Surveyors, and
Geologists. 
   (27) Bureau of Medical Marijuana Regulation. 
   (c) For purposes of paragraph (26) of subdivision (b), the term
"applicant" shall be limited to an initial applicant who has never
been registered or licensed by the board or to an applicant for a new
licensure or registration category.
   SECTION 1.   SEC. 2.   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
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) Repeated acts of clearly excessive recommending of cannabis to
patients for medical purposes, or repeated acts of recommending
cannabis to patients for medical purposes without a good faith prior
examination of the patient and a medical reason for the
recommendation.
   (5) Sexual misconduct with one or more patients during a course of
treatment or an examination.
   (6) 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. 3.    Section 2241.5 of the   Business
and Professions Code   is amended to read: 
   2241.5.  (a) A physician and surgeon may prescribe for, or
dispense or administer to, a person under his or her treatment for a
medical condition dangerous drugs or prescription controlled
substances for the treatment of pain or a condition causing pain,
including, but not limited to, intractable pain.
   (b) No physician and surgeon shall be subject to disciplinary
action for prescribing, dispensing, or administering dangerous drugs
or prescription controlled substances in accordance with this
section.
   (c) This section shall not affect the power of the board to take
any action described in Section 2227 against a physician and surgeon
who does any of the following:
   (1) Violates subdivision (b), (c), or (d) of Section 2234
regarding gross negligence, repeated negligent acts, or incompetence.

   (2) Violates Section 2241 regarding treatment of an addict.
   (3) Violates Section 2242  or 2525.3  regarding
performing an appropriate prior examination and the existence of a
medical indication for prescribing, dispensing, or furnishing
dangerous  drugs.   drugs or recommending
medical cannabis. 
   (4) Violates Section 2242.1 regarding prescribing on the Internet.

   (5) Fails to keep complete and accurate records of purchases and
disposals of substances listed in the California Uniform Controlled
Substances Act (Division 10 (commencing with Section 11000) of the
Health and Safety Code) or controlled substances scheduled in the
federal Comprehensive Drug Abuse Prevention and Control Act of 1970
(21 U.S.C. Sec. 801 et seq.), or pursuant to the federal
Comprehensive Drug Abuse Prevention and Control Act of 1970. A
physician and surgeon shall keep records of his or her purchases and
disposals of these controlled substances or dangerous drugs,
including the date of purchase, the date and records of the sale or
disposal of the drugs by the physician and surgeon, the name and
address of the person receiving the drugs, and the reason for the
disposal or the dispensing of the drugs to the person, and shall
otherwise comply with all state recordkeeping requirements for
controlled substances.
   (6) Writes false or fictitious prescriptions for controlled
substances listed in the California Uniform Controlled Substances Act
or scheduled in the federal Comprehensive Drug Abuse Prevention and
Control Act of 1970.
   (7) Prescribes, administers, or dispenses in violation of this
chapter, or in violation of Chapter 4 (commencing with Section 11150)
or Chapter 5 (commencing with Section 11210) of Division 10 of the
Health and Safety Code.
   (d) A physician and surgeon shall exercise reasonable care in
determining whether a particular patient or condition, or the
complexity of a patient's treatment, including, but not limited to, a
current or recent pattern of drug abuse, requires consultation with,
or referral to, a more qualified specialist.
   (e) Nothing in this section shall prohibit the governing body of a
hospital from taking disciplinary actions against a physician and
surgeon pursuant to Sections 809.05, 809.4, and 809.5.
   SEC. 4.    Section 2242.1 of the   Business
and Professions Code   is amended to read: 
   2242.1.  (a) No person or entity may prescribe, dispense, or
furnish, or cause to be prescribed, dispensed, or furnished,
dangerous drugs or dangerous devices, as defined in Section 4022, on
the Internet for delivery to any person in this state, without an
appropriate prior examination and medical indication, except as
authorized by Section 2242.
   (b) Notwithstanding any other provision of law, a violation of
this section may subject the person or entity that has committed the
violation to either a fine of up to twenty-five thousand dollars
($25,000) per occurrence pursuant to a citation issued by the board
or a civil penalty of twenty-five thousand dollars ($25,000) per
occurrence.
   (c) The Attorney General may bring an action to enforce this
section and to collect the fines or civil penalties authorized by
subdivision (b).
   (d) For notifications made on and after January 1, 2002, the
Franchise Tax Board, upon notification by the Attorney General or the
board of a final judgment in an action brought under this section,
shall subtract the amount of the fine or awarded civil penalties from
any tax refunds or lottery winnings due to the person who is a
defendant in the action using the offset authority under Section
12419.5 of the Government Code, as delegated by the Controller, and
the processes as established by the Franchise Tax Board for this
purpose. That amount shall be forwarded to the board for deposit in
the Contingent Fund of the Medical Board of California.
   (e) If the person or entity that is the subject of an action
brought pursuant to this section is not a resident of this state, a
violation of this section shall, if applicable, be reported to the
person's or entity's appropriate professional licensing authority.
   (f) Nothing in this section shall prohibit the board from
commencing a disciplinary action against a physician and surgeon
pursuant to Section  2242.   2242 or 2525.3.

   SEC. 5.    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 Cannabis


   2525.  (a) It is unlawful for a physician and surgeon who
recommends cannabis to a patient for a medical purpose to accept,
solicit, or offer any form of remuneration from or to a facility
issued a state license pursuant to Chapter 3.5 (commencing with
Section 19300) of Division 8, 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 punishable
by up to one year in county jail and a fine of up to five thousand
dollars ($5,000) or by civil penalties of up to five thousand dollars
($5,000) and shall constitute unprofessional conduct.
   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
cannabis.
   2525.2.  An individual who possesses a license in good standing to
practice medicine or osteopathy issued by the Medical Board of
California or the Osteopathic Medical Board of California shall not
recommend medical cannabis 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.
   2525.3.  Recommending medical cannabis to a patient for a medical
purpose without an appropriate prior examination and a medical
indication constitutes unprofessional conduct.
   2525.4.  It is unprofessional conduct for any attending physician
recommending medical cannabis to be employed by, or enter into any
other agreement with, any person or entity dispensing medical
cannabis.
   2525.5.  (a) A person shall not distribute any form of advertising
for physician recommendations for medical cannabis in California
unless the advertisement bears the following notice to consumers:

   NOTICE TO CONSUMERS: The Compassionate Use Act of 1996 ensures
that seriously ill Californians have the right to obtain and use
cannabis 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 cannabis.
Recommendations must come from an attending physician as defined in
Section 11362.7 of the Health and Safety Code. Cannabis is a Schedule
I drug according to the federal Controlled Substances Act. Activity
related to cannabis use is subject to federal prosecution, regardless
of the protections provided by state law.

   (b) Advertising for attending physician recommendations for
medical cannabis shall meet all of the requirements in 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. 
   SEC. 6.    Section 19302.1 is added to the  
Business and Professions Code   , to r   ead:
 
   19302.1.  (a) The Governor shall appoint a chief of the bureau,
subject to confirmation by the Senate, at a salary to be fixed and
determined by the director with the approval of the Director of
Finance. The chief shall serve under the direction and supervision of
the director and at the pleasure of the Governor.
   (b) Every power granted to or duty imposed upon the director under
this chapter may be exercised or performed in the name of the
director by a deputy or assistant director or by the chief, subject
to conditions and limitations that the director may prescribe. In
addition to every power granted or duty imposed with this chapter,
the director shall have all other powers and duties generally
applicable in relation to bureaus that are part of the Department of
Consumer Affairs.
   (c) The director may employ and appoint all employees necessary to
properly administer the work of the bureau, in accordance with civil
service laws and regulations.
   (d) The Department of Consumer Affairs shall have the sole
authority to create, issue, renew, discipline, suspend, or revoke
licenses for the transportation, storage unrelated to manufacturing
activities, distribution, and sale of medical marijuana within the
state and to collect fees in connection with activities the bureau
regulates. The bureau may create licenses in addition to those
identified in this chapter that the bureau deems necessary to
effectuate its duties under this chapter.
   (e) The Department of Food and Agriculture shall administer the
provisions of this chapter related to and associated with the
cultivation of medical cannabis. The Department of Food and
Agriculture shall have the authority to create, issue, and suspend or
revoke cultivation licenses for violations of this chapter. The
State Department of Public Health shall administer the provisions of
this chapter related to and associated with the manufacturing and
testing of medical cannabis. 
   SEC. 7.    Section 19319 is added to the  
Business and Professions Code   , to read:  
   19319.  (a) A qualified patient, as defined in Section 11362.7 of
the Health and Safety Code, who cultivates, possesses, stores,
manufactures, or transports cannabis exclusively for his or her
personal medical use but who does not provide, donate, sell, or
distribute cannabis to any other person is not thereby engaged in
commercial cannabis activity and is therefore exempt from the
licensure requirements of this chapter.
   (b) A primary caregiver who cultivates, possesses, stores,
manufactures, transports, donates, or provides cannabis 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 exempt from the licensure
requirements of this chapter. 
   SEC. 8.    Section 19320 is added to the  
Business and Professions Code   , to read:  
   19320.  (a) Licensing authorities administering this chapter may
issue state licenses only to qualified applicants engaging in
commercial cannabis activity pursuant to this chapter. Upon the date
of implementation of regulations by the licensing authority, no
person shall engage in commercial cannabis activity without
possessing both a state license and a local permit, license, or other
authorization. A licensee 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 ordinance.
   (b) Revocation of a local license, permit, or other authorization
shall terminate the ability of a medical cannabis business to operate
within that local jurisdiction until the local jurisdiction
reinstates or reissues the local license, permit, or other required
authorization. Local authorities shall notify the bureau upon
revocation of a local license. The bureau shall inform relevant
licensing authorities.
   (c) Revocation of a state license shall terminate the ability of a
medical cannabis licensee to operate within California until the
licensing authority reinstates or reissues the state license. Each
licensee shall obtain a separate license for each location where it
engages in commercial medical cannabis activity. However,
transporters only need to obtain licenses for each physical location
where the licensee conducts business while not in transport, or any
equipment that is not currently transporting medical cannabis or
medical cannabis products, permanently resides.
   (d) In addition to the provisions of this chapter, local
jurisdictions retain the power to assess fees and taxes, as
applicable, on facilities that are licensed pursuant to this chapter
and the business activities of those licensees.
   (e) Nothing in this chapter shall be construed to supersede or
limit state agencies, including the State Water Resources Control
Board and Department of Fish and Wildlife, from establishing fees to
support their medical cannabis regulatory programs. 
   SEC. 9.    Section 19322 is added to the  
Business and Professions Code   , to read:  
   19322.  (a) A person or entity shall not submit an application for
a state license issued by the department pursuant to this chapter
unless that person or entity has received a license, permit, or
authorization by a local jurisdiction. An applicant for any type of
state license issued pursuant to this chapter shall do all of the
following:
   (1) 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.
   (A) The Department of Justice shall provide a response to the
licensing authority pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code.
   (B) The licensing authority shall request from the Department of
Justice subsequent notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for applicants.
   (C) The Department of Justice shall charge the applicant a fee
sufficient to cover the reasonable cost of processing the requests
described in this paragraph.
   (2) Provide documentation issued by the local jurisdiction in
which the proposed business is operating certifying that the
applicant is or will be in compliance with all local ordinances and
regulations.
   (3) Provide evidence of the legal right to occupy and use the
proposed location. For an applicant seeking a cultivator,
distributor, manufacturing, or dispensary license, provide a
statement from the owner of real property or their agent where the
cultivation, distribution, manufacturing, or dispensing commercial
medical cannabis activities will occur, as proof to demonstrate the
landowner has acknowledged and consented to permit cultivation,
distribution, manufacturing, or dispensary activities to be conducted
on the property by the tenant applicant.
   (4) If the application is for a cultivator or a dispensary,
provide evidence that the proposed location is located beyond at
least a 600 foot radius from a school, as required by Section
11362.768 of the Health and Safety Code.
   (5) Provide a statement, signed by the applicant under penalty of
perjury, that the information provided is complete, true, and
accurate.
   (6) (A) For an applicant with 20 or more employees, provide a
statement that the applicant will enter into, or demonstrate that it
has already entered into, and abide by the terms of a labor peace
agreement.
   (B) For the purposes of this paragraph, "employee" does not
include a supervisor.
   (C) For purposes of this paragraph, "supervisor" means an
individual having authority, in the interest of the licensee, to
hire, transfer, suspend, lay off, recall, promote, discharge, assign,
reward, or discipline other employees, or responsibility to direct
them or to adjust their grievances, or effectively to recommend such
action, if, in connection with the foregoing, the exercise of that
authority is not of a merely routine or clerical nature, but requires
the use of independent judgment.
   (7) Provide the applicant's seller's permit number issued pursuant
to Part 1 (commencing with Section 6001) of Division 2 of the
Revenue and Taxation Code or indicate that the applicant is currently
applying for a seller's permit.
   (8) Provide any other information required by the licensing
authority.
   (9) 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.
   (10) For an applicant seeking licensure as a testing laboratory,
register with the State Department of Public Health and provide any
information required by the State Department of Public Health.
   (11) Pay all applicable fees required for licensure by the
licensing authority.
   (b) For applicants seeking licensure to cultivate, distribute, or
manufacture medical cannabis, the application shall also include a
detailed description of the applicant's operating procedures for all
of the following, as required by the licensing authority:
   (1) Cultivation.
   (2) Extraction and infusion methods.
   (3) The transportation process.
   (4) Inventory procedures.
   (5) Quality control procedures. 
   SEC. 10.    Section 19323 is added to the  
Business and Professions Code   , to read:  
   19323.  (a) The licensing authority 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 chapter.
   (b) The licensing authority may deny the application for licensure
or renewal of a state license if any of the following conditions
apply:
   (1) Failure to comply with the provisions of this chapter or any
rule or regulation adopted pursuant to this chapter, including but
not limited to, any requirement imposed to protect natural resources,
instream flow, and water quality pursuant to subdivision (a) of
Section 19332.
   (2) Conduct that constitutes grounds for denial of licensure
pursuant to Chapter 2 (commencing with Section 480) of Division 1.5.
   (3) A local agency has notified the licensing authority that a
licensee or applicant within its jurisdiction is in violation of
state rules and regulation relating to commercial cannabis
activities, and the licensing authority, through an investigation,
has determined that the violation is grounds for termination or
revocation of the license. The licensing authority shall have the
authority to collect reasonable costs, as determined by the licensing
authority, for investigation from the
               licensee or applicant.
   (4) The applicant has failed to provide information required by
the licensing authority.
   (5) The applicant or licensee has been convicted of an offense
that is substantially related to the qualifications, functions, or
duties of the business or profession for which the application is
made, except that if the licensing authority determines that the
applicant or licensee is otherwise suitable to be issued a license
and granting the license would not compromise public safety, the
licensing authority shall conduct a thorough review of the nature of
the crime, conviction, circumstances, and evidence of rehabilitation
of the applicant, and shall evaluate the suitability of the applicant
or licensee to be issued a license based on the evidence found
through the review. In determining which offenses are substantially
related to the qualifications, functions, or duties of the business
or profession for which the application is made, the licensing
authority shall include, but not be limited to, the following:
   (A) A felony conviction for the illegal possession for sale, sale,
manufacture, transportation, or cultivation of a controlled
substance.
   (B) A violent felony conviction, as specified in subdivision (c)
of Section 667.5 of the Penal Code.
   (C) A serious felony conviction, as specified in subdivision (c)
of Section 1192.7 of the Penal Code.
   (D) A felony conviction involving fraud, deceit, or embezzlement.
   (6) The applicant, or any of its officers, directors, or owners,
is a licensed physician making patient recommendations for medical
cannabis pursuant to Section 11362.7 of the Health and Safety Code.
   (7) 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 or 12025.1 of the Fish and Game Code.
   (8) The applicant, or any of its officers, directors, or owners,
has been sanctioned by a licensing authority or a city, county, or
city and county for unlicensed commercial medical cannabis activities
or has had a license revoked under this chapter in the three years
immediately preceding the date the application is filed with the
licensing authority.
   (9) Failure to obtain and maintain a valid seller's permit
required pursuant to Part 1 (commencing with Section 6001) of
Division 2 of the Revenue and Taxation Code. 
   SEC. 11.    Section 19324 is added to the  
Business and Professions Code   , to read:  
   19324.  Upon the denial of any application for a license, the
licensing authority shall notify the applicant in writing. Within 30
days of service of the notice, the applicant may file a written
petition for a license with the licensing authority. Upon receipt of
a timely filed petition, the licensing authority shall set the
petition for hearing. The hearing shall be conducted in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of Division
3 of Title 2 of the Government Code, and the director of each
licensing authority shall have all the powers granted therein. 
   SEC. 12.    Section 19325 is added to the  
Business and Professions Code   , to read:  
   19325.  An applicant shall not be denied a state license if the
denial is based solely on any of the following:
   (a) A conviction or act that is substantially related to the
qualifications, functions, or duties of the business or profession
for which the application is made for which the applicant or licensee
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.
   (b) A conviction that was subsequently dismissed pursuant to
Section 1203.4, 1203.4a, or 1203.41 of the Penal Code. 
   SEC. 13.    Article 6 (commencing with Section 19331)
is added to Chapter 3.5 of Division 8 of the   Business and
Professions Code   , to read:  

      Article 6.  Licensed Cultivation Sites


   19331.  The Legislature finds and declares all of the following:
   (a) The United States Environmental Protection Agency has not
established appropriate pesticide tolerances for, or permitted the
registration and lawful use of, pesticides on cannabis crops intended
for human consumption pursuant to the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. 136 et seq.).
   (b) The use of pesticides is not adequately regulated due to the
omissions in federal law, and cannabis cultivated in California for
California patients can and often does contain pesticide residues.
   (c) Lawful California medical cannabis growers and caregivers urge
the Department of Pesticide Regulation to provide guidance, in
absence of federal guidance, on whether the pesticides currently used
at most cannabis cultivation sites are actually safe for use on
cannabis intended for human consumption.
   19332.  (a) The Department of Food and Agriculture shall
promulgate regulations governing the licensing of indoor and outdoor
cultivation sites.
   (b) The Department of Pesticide Regulation, in consultation with
the Department of Food and Agriculture, shall develop standards for
the use of pesticides in cultivation, and maximum tolerances for
pesticides and other foreign object residue in harvested cannabis.
   (c) The State Department of Public Health shall develop standards
for the production and labeling of all edible medical cannabis
products.
   (d) The Department of Food and Agriculture, in consultation with
the Department of Fish and Wildlife and the State Water Resources
Control Board, shall ensure that individual and cumulative effects of
water diversion and discharge associated with cultivation do not
affect the instream flows needed for fish spawning, migration, and
rearing, and the flows needed to maintain natural flow variability.
   (e) The Department of Food and Agriculture shall have the
authority necessary for the implementation of the regulations it
adopts pursuant to this chapter. The regulations shall do all of the
following:
   (1) Provide that weighing or measuring devices used in connection
with the sale or distribution of medical cannabis are required to
meet standards equivalent to Division 5 (commencing with Section
12001).
   (2) Require that cannabis cultivation by licensees is conducted in
accordance with state and local laws related to land conversion,
grading, electricity usage, water usage, agricultural discharges, and
similar matters. Nothing in this chapter, and no regulation adopted
by the department, shall be construed to supersede or limit the
authority of the State Water Resources Control Board, regional water
quality control boards, or the Department of Fish and Wildlife to
implement and enforce their statutory obligations or to adopt
regulations to protect water quality, water supply, and natural
resources.
   (3) Establish procedures for the issuance and revocation of unique
identifiers for activities associated with a cannabis cultivation
license, pursuant to Article 8 (commencing with Section 19337). All
cannabis shall be labeled with the unique identifier issued by the
Department of Food and Agriculture.
   (4) Prescribe standards, in consultation with the bureau, for the
reporting of information as necessary related to unique identifiers,
pursuant to Article 8 (commencing with Section 19337).
   (f) The Department of Pesticide Regulation, in consultation with
the State Water Resources Control Board, shall promulgate regulations
that require that the application of pesticides or other pest
control in connection with the indoor or outdoor cultivation of
medical cannabis meets standards equivalent to Division 6 (commencing
with Section 11401) of the Food and Agricultural Code and its
implementing regulations.
   (g) State cultivator license types issued by the Department of
Food and Agriculture include:
   (1) Type 1, or "specialty outdoor," for outdoor cultivation using
no artificial lighting of less than or equal to 5,000 square feet 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 less than or equal to 5,000 square
feet 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 licensing authority, of
less than or equal to 5,000 square feet 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, inclusive,
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,
inclusive, 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 licensing authority,
between 5,001 and 10,000 square feet, inclusive, of total canopy size
on one premises.
   (7) Type 3, or "outdoor," for outdoor cultivation using no
artificial lighting from 10,001 square feet to one acre, inclusive,
of total canopy size on one premises. The Department of Food and
Agriculture 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,
inclusive, of total canopy size on one premises. The Department of
Food and Agriculture 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 licensing authority, between 10,001
and 22,000 square feet, inclusive, of total canopy size on one
premises. The Department of Food and Agriculture shall limit the
number of licenses allowed of this type.
   (10) Type 4, or "nursery," for cultivation of medical cannabis
solely as a nursery. Type 4 licensees may transport live plants.
   19332.5.  (a) Not later than January 1, 2020, the Department of
Food and Agriculture in conjunction with the bureau, shall make
available a certified organic designation and organic certification
program for medical marijuana, if permitted under federal law and the
National Organic Program (Section 6517 of the federal Organic Foods
Production Act of 1990 (7 U.S.C. Sec. 6501 et seq.)), and Article 7
(commencing with Section 110810) of Chapter 5 of Part 5 of Division
104 of the Health and Safety Code.
   (b) The bureau may establish appellations of origin for marijuana
grown in California.
   (c) 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.
   (d) 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.
   19333.  An employee engaged in commercial cannabis cultivation
activity shall be subject to Wage Order 4-2001 of the Industrial
Welfare Commission. 
   SEC. 14.    Article 7.5 (commencing with Section
19335) is added to Chapter 3.5 of Division 8 of the  
Business and Professions Code  , to read:  

      Article 7.5.  Unique Identifier and Track and Trace Program


   19335.  (a) The Department of Food and Agriculture, in
consultation with the bureau, shall establish a track and trace
program for reporting the movement of medical marijuana items
throughout the distribution chain that utilizes a unique identifier
pursuant to Section 11362.777 of the Health and Safety Code and
secure packaging and is capable of providing information that
captures, at a minimum, all of the following:
   (1) The licensee receiving the product.
   (2) The transaction date.
   (3) The cultivator from which the product originates, including
the associated unique identifier, pursuant to Section 11362.777 of
the Health and Safety Code.
   (b) (1) The Department of Food and Agriculture shall create an
electronic database containing the electronic shipping manifests
which shall include, but not be limited to, the following
information:
   (A) The quantity, or weight, and variety of products shipped.
   (B) The estimated times of departure and arrival.
   (C) The quantity, or weight, and variety of products received.
   (D) The actual time of departure and arrival.
   (E) A categorization of the product.
   (F) The license number and the unique identifier pursuant to
Section 11362.777 of the Health and Safety Code issued by the
licensing authority for all licensees involved in the shipping
process, including cultivators, transporters, distributors, and
dispensaries.
   (2) (A) The database shall be designed to flag irregularities for
all licensing authorities in this chapter to investigate. All
licensing authorities pursuant to this chapter may access the
database and share information related to licensees under this
chapter, including social security and individual taxpayer
identifications notwithstanding Section 30.
   (B) The Department of Food and Agriculture shall immediately
inform the bureau upon the finding of an irregularity or suspicious
finding related to a licensee, applicant, or commercial cannabis
activity for investigatory purposes.
   (3) Licensing authorities and state and local agencies may, at any
time, inspect shipments and request documentation for current
inventory.
   (4) The bureau shall have 24-hour access to the electronic
database administered by the Department of Food and Agriculture.
   (5) The Department of Food and Agriculture shall be authorized to
enter into memoranda of understandings with licensing authorities for
data sharing purposes, as deemed necessary by the Department of Food
and Agriculture.
   (6) Information received and contained in records kept by the
Department of Food and Agriculture or licensing authorities for the
purposes of administering this section are confidential and shall not
be disclosed pursuant to the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of the
Government Code), except as necessary for authorized employees of the
State of California or any city, county, or city and county to
perform official duties pursuant to this chapter or a local
ordinance.
   (7) Upon the request of a state or local law enforcement agency,
licensing authorities shall allow access to or provide information
contained within the database to assist law enforcement in their
duties and responsibilities pursuant to this chapter.
   19336.  (a) Chapter 4 (commencing with Section 55121) of Part 30
of Division 2 of the Revenue and Taxation Code shall apply with
respect to the bureau's collection of the fees, civil fines, and
penalties imposed pursuant to this chapter.
   (b) Chapter 8 (commencing with Section 55381) of Part 30 of
Division 2 of the Revenue and Taxation Code shall apply with respect
to the disclosure of information under this chapter. 
   SEC. 15.    Article 8 (commencing with Section 19337)
is added to Chapter 3.5 of Division 8 of the   Business and
Professions Code   , to read:  

      Article 8.  Licensed Transporters


   19337.  (a) A licensee authorized to transport medical cannabis
and medical cannabis products between licenses shall do so only as
set forth in this chapter.
   (b) Prior to transporting medical cannabis or medical cannabis
products, a licensed transporter of medical cannabis or medical
cannabis products shall do both of the following:
   (1) Complete an electronic shipping manifest as prescribed by the
licensing authority. The shipping manifest must include the unique
identifier, pursuant to Section 11362.777 of the Health and Safety
Code, issued by the Department of Food and Agriculture for the
original cannabis product.
   (2) Securely transmit the manifest to the bureau and the licensee
that will receive the medical cannabis product. The bureau shall
inform the Department of Food and Agriculture of information
pertaining to commercial cannabis activity for the purpose of the
track and trace program identified in Section 19335.
   (c) During transportation, the licensed transporter shall maintain
a physical copy of the shipping manifest and make it available upon
request to agents of the Department of Consumer Affairs and law
enforcement officers.
   (d) The licensee receiving the shipment shall maintain each
electronic shipping manifest and shall make it available upon request
to the Department of Consumer Affairs and any law enforcement
officers.
   (e) Upon receipt of the transported shipment, the licensee
receiving the shipment shall submit to the licensing agency a record
verifying receipt of the shipment and the details of the shipment.
   (f) Transporting, or arranging for or facilitating the transport
of, medical cannabis or medical cannabis products in violation of
this chapter is grounds for disciplinary action against the license.
   19338.  (a) This chapter shall not be construed to authorize or
permit a licensee to transport or cause to be transported cannabis or
cannabis products outside the state, unless authorized by federal
law.
   (b) A local jurisdiction shall not prevent transportation of
medical cannabis or medical cannabis products on public roads by a
licensee transporting medical cannabis or medical cannabis products
in compliance with this chapter. 
   SEC. 16.    Article 11 (commencing with Section
19348) is added to Chapter 3.5 of Division 8 of the 
Business and Professions Code   , to read:  

      Article 11.  Taxation


   19348.  (a) (1) A county may impose a tax on the privilege of
cultivating, dispensing, producing, processing, preparing, storing,
providing, donating, selling, or distributing medical cannabis or
medical cannabis products by a licensee operating pursuant to this
chapter.
   (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), as 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 gratuitous, as determined
by the board of supervisors.
   (b) A tax imposed pursuant to this section shall be subject to
applicable voter approval requirements imposed by law.
   (c) 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.
   (d) This section shall not be construed to authorize a county to
impose a sales or use tax in addition to the sales and use tax
imposed under an ordinance conforming to the provisions of Sections
7202 and 7203 of the Revenue and Taxation Code. 
   SEC. 17.    The provisions of this act are severable.
If any provision of this act or its application is held invalid,
that invalidity shall not affect other provisions or applications
that can be given effect without the invalid provision or
application. 
   SEC. 18.    The Legislature finds and declares that
Section 14 of this act, which adds Section 19335 to the Business and
Professions Code, thereby imposes a limitation on the public's right
of access to the meetings of public bodies or the writings of public
officials and agencies within the meaning of Section 3 of Article I
of the California Constitution. Pursuant to that constitutional
provision, the Legislature makes the following findings to
demonstrate the interest protected by this limitation and the need
for protecting that interest:  
   The limitation imposed under this act is necessary for purposes of
compliance with the federal Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. Sec. 1320d et seq.), the
Confidentiality of Medical Information Act (Part 2.6 (commencing with
Section 56) of Division 1 of the Civil Code), and the Insurance
Information and Privacy Protection Act (Article 6.6 (commencing with
Section 791) of Part 2 of Division 1 of the Insurance Code). 
   SEC. 19.   No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution for certain costs that may be incurred by a local agency
or school district because, in that regard, 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.  
   However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.
   SEC. 2.   SEC. 20.   This act shall
become operative only if Assembly Bill 266  and Assembly Bill 243
 of the 2015-16 Session  is   are 
enacted and  takes   take  effect on or
before January 1, 2016.