BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 643|
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THIRD READING
Bill No: SB 643
Author: McGuire (D)
Amended: 6/3/15
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 7-0, 4/20/15
AYES: Hill, Block, Galgiani, Hernandez, Jackson, Mendoza,
Wieckowski
NO VOTE RECORDED: Bates, Berryhill
SENATE GOVERNANCE & FIN. COMMITTEE: 5-1, 4/29/15
AYES: Hertzberg, Beall, Hernandez, Lara, Pavley
NOES: Nguyen
NO VOTE RECORDED: Moorlach
SENATE APPROPRIATIONS COMMITTEE: 5-1, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Nielsen
NO VOTE RECORDED: Bates
SUBJECT: Medical marijuana
SOURCE: Author
DIGEST: This bill enacts the Medical Marijuana Public Safety
and Environmental Protection Act. This bill establishes a
licensing and regulatory framework for the cultivation,
manufacture, transportation, storage, distribution and sale of
medical marijuana to be administered by an Office of Medical
Marijuana Regulation in the Business, Consumer Services Housing
Agency and enforced primarily at the local level.
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ANALYSIS:
Existing law:
1) Prohibits, under the Compassionate Use Act of 1996 (CUA), an
initiative measure, prosecution for the possession or
cultivation of marijuana of a patient or a patient's primary
caregiver who possesses or cultivates marijuana for the
personal medical purposes of the patient upon the written or
oral recommendation or approval of a physician. (Health and
Safety Code (HSC) § 11362.5)
2) Declares that the purposes of the CUA are to ensure that
seriously ill Californians have the right to obtain and use
marijuana for medical purposes where that medical use is
deemed appropriate and has been recommended by a physician
who has determined that the person's health would benefit
from the use of marijuana in the treatment of cancer,
anorexia, AIDS, chronic pain, spasticity, glaucoma,
arthritis, migraine, or any other illness for which marijuana
provides relief; to ensure that patients and their primary
caregivers who obtain and use marijuana for medical purposes
upon the recommendation of a physician, are not subject to
criminal prosecution or sanction; and to encourage the
federal and state governments to implement a plan to provide
for the safe and affordable distribution of marijuana to all
patients in medical need of marijuana. (HSC § 11362.5
(b)(1)(A) to (C))
3) Does not apply, relating to the possession and the
cultivation of marijuana, to a patient, or to a patient's
primary caregiver, who possesses or cultivates marijuana for
the personal medical purposes of the patient upon the written
or oral recommendation or approval of a physician. (HSC §
11362.5 (d))
4) Establishes the Medical Marijuana Program Act (MMPA), which
exempts qualified patients who hold an identification card
issued pursuant to the Medical Marijuana Program (MMP) and
the caregivers of those persons, from certain state criminal
sanctions related to the possession, cultivation,
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transportation, processing, or use of limited amounts of
marijuana, as specified. (HSC § 11362.7 et seq.)
5) Requires the California Department of Public Health (CDPH) to
establish and maintain a voluntary program for qualified
patients to apply for identification cards, and county health
departments to issue identification cards to qualified
patients and their caregivers. (HSC § 11362.71 (a) & (b))
6) Provides that persons with valid identification cards shall
not be subject to arrest for possession, transportation,
delivery, or cultivation of marijuana, absent evidence of
fraud. (HSC § 11362.71 (e))
7) Requires county health departments to issue serially numbered
identification cards to patients and caregivers containing
the following: a unique user identification number, an
expiration date, the county health department's name and
telephone number, photo identification of the cardholder, and
a toll-free CDPH telephone number enabling state and local
law enforcement officers to immediately verify the card's
validity. (HSC Section 11362.735 (a))
8) Prohibits medical marijuana dispensaries that possess,
cultivate, or distribute medical marijuana from being located
within a 600 foot radius of a school, and authorizes cities
and counties to further restrict the locations of medical
marijuana collectives. (HSC § 11362.768)
9) Provides that qualified patients, persons with valid
identification cards, and the designated primary caregivers
of qualified patients and persons with identification cards
who associate within the State of California in order to
cultivate marijuana for medical purposes, collectively or
cooperatively, shall not, solely on that basis, be subject to
state criminal sanctions for the possession, sale, transport,
or other proscribed acts relating to marijuana. (HSC §
11362.775)
10)Lists marijuana as a hallucinogenic substance in Schedule I
of the California Uniform Controlled Substances Act. (HSC §
11054 (d))
This bill:
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1)Enacts the Medical Marijuana Public Safety and Environmental
Protection Act (Act) and makes findings and declarations about
the need for greater statewide standards and an effective
statewide system for regulating and controlling medical
marijuana while clarifying that the Act shall not have a
diminishing effect on the rights and protections granted to a
patient or primary caregiver pursuant to the CUA nor shall be
construed to promote or facilitate the nonmedical,
recreational possession, sale, or use of marijuana.
2)Establishes the Office of Medical Marijuana Regulation
(Office) in the Business, Consumer Services Housing Agency
under the supervision and control of the Chief appointed by
the Governor, subject to confirmation by the Senate Committee
on Rules. Provides the Office with the authority to issue,
suspend, or revoke conditional licenses related to medical
marijuana in the state and collect fees in connection with
cultivation, manufacture, transportation, storage,
distribution and sale. Provides the Office the authority to
create, issue, suspend, or revoke other licenses in order to
protect patient health and the public and to facilitate the
regulation of medical marijuana.
3) Provides the Office the authority to implement the Act,
including, but not limited to, establishing rules or
regulations necessary to carry out the purposes and intent of
the Act so long as they shall not limit any authority of a
city, county, or city and county provided by law. Provides
the Office the authority for issuing conditional licenses to
persons for the cultivation, manufacture, transportation,
storage, distribution, and sale of medical marijuana within
the state; setting application, licensing, and renewal fees
for conditional licenses; establishing standards for the
cultivation, manufacturing, transportation, storage,
distribution, provision, donation, and sale of medical
marijuana and medical marijuana products; establishing
procedures for the issuance, renewal, suspension, denial, and
revocation of conditional licenses; imposing a penalty;
enforcing the licensing and regulatory requirements of the
Act; overseeing the operation of the Medical Marijuana
Regulation Fund and the Special Account for Environmental
Enforcement and; consulting with other state or local
agencies, departments, representatives of the medical
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marijuana community, or public or private entities for the
purposes of establishing statewide standards and regulations.
4) Provides that a person shall not sell or provide medical
marijuana to a patient or caregiver other than at a licensed
dispensing facility or through delivery from a licensed
dispensing facility unless otherwise authorized under the CUA
and MMPA. Provides that a person shall not grow medical
marijuana other than at a licensed cultivation site unless
otherwise authorized under the CUA and MMPA. Provides that a
person shall not manufacture medical marijuana or medical
marijuana products other than a licensed manufacturer unless
otherwise authorized under the CUA and MMPA. Provides that a
person other than a licensed transporter shall transport
medical marijuana from one facility issued a conditional
license to another.
5) Requires the Office, beginning no later than July 1, 2018, to
provide for and issue conditional licenses for all activity
authorized under the Act, including, but not limited to the
cultivation, processing, storage, transport and dispensing of
medical marijuana. Clarifies that the issuance of a
conditional license shall not, in and of itself, authorize
the recipient to begin business operations, but it does
certify, at a minimum, that the applicant has paid the state
conditional licensing fee, successfully passed a criminal
background check, and met the state residency requirements.
Prohibits a conditionally licensed facility from commencing
activity under the authority of that license until the
applicant has also obtained a license or permit from the
local jurisdiction in which he or she proposes to operate,
following the requirements of local ordinances.
6) Specifies that a conditional license is subject to the
restrictions of the local jurisdiction in which the facility
operates or proposes to operate. Clarifies that even if a
conditional license has been granted pursuant to the Act, a
facility shall not operate in a local jurisdiction that
prohibits the establishment of that type of business.
Authorizes local jurisdictions retain the power to assess
fees and taxes, as applicable, on facilities that are
conditionally licensed and the business activities of those
licensees.
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7) Outlines requirements for a licensed transporter, including
that it ship only to facilities issued a conditional license
and only in response to a request for a specific quantity and
variety; it complete a shipping manifest form prescribed by
the Office prior to transporting medical marijuana products
and that; it securely transmit a copy of the manifest to the
licensee that will receive the medical marijuana product as
well as to the Office prior to transport and that both
transporters and licensed facilities maintain each shipping
manifest and make it available to local code enforcement
officers, any other locally designated enforcement entity as
well as the Office upon request. Prohibits a local
jurisdiction from preventing transportation through or to a
facility issued a conditional license by a conditionally
licensed transporter acting in compliance with the Act.
8) Authorizes the Office to enforce the Act and requires the
Office to delegate the authority to enforce the Act,
including any regulations, to a city, county, or city and
county, upon request of that entity. Clarifies that nothing
in the Act shall be interpreted to supersede or limit
existing local authority for law enforcement activity,
enforcement of local zoning requirements, or enforcement of
local licensing and clarified that nothing in the Act shall
be interpreted to require the Office to undertake local law
enforcement responsibilities, enforce local zoning
requirements, or enforce local licensing requirements.
9) Specifies requirements for cultivation sites, prohibiting
them from being located in an area zoned residential and
requires the Office to notify local law enforcement of all
conditional licenses issued for cultivation sites in that
jurisdiction. Provides that no later than January 1, 2022,
all medical marijuana grown, produced, distributed and sold
in the state shall meet the certified organic standards.
Requires the Office to establish appellations of origin for
marijuana grown in California and work with county
agricultural commissioners to provide all the information and
forms required for conditional licensure as a cultivation
site in a single location.
10)Authorizes the board of supervisors of a county or the city
council of a city to impose, by ordinance, a tax on the
privilege of cultivating, dispensing, producing, processing,
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preparing, storing, providing, donating, selling, or
distributing marijuana by a licensee operating under the Act.
Authorizes the tax to be imposed for general governmental
purposes or for purposes specified in the ordinance.
Subjects a tax for these purposes to applicable voter
approval requirements imposed by law.
11)Requires the Office, on or before July 1, 2017, to report to
the Legislature on the feasibility of developing a program to
certify laboratories for the testing of medical marijuana and
related products and the feasibility of developing a labeling
requirement for edible marijuana products that incorporates
information on the cannabinoid content. Requires
conditionally licensed facilities to maintain supplier
information in order for recall procedures to be implemented,
if and when necessary and label all medical marijuana and
medical marijuana products according to certain requirements.
Sets forth certain health and safety requirements for
products sold in a conditionally licensed facility.
12)Requires, on or before July 1, 2016, the State Board of
Equalization to complete a report and submit it to the
Legislature and Governor's Office on the actual tax collected
actual tax collected on the sale of medical marijuana, using
the most current data available. States that the report
should also include expected tax revenues, under the existing
tax structure, for the years 2016 to 2021, inclusive.
Background
According to the author, since the voters of California passed
Proposition 215 in 1996, it has become clear that there needs to
be a comprehensive regulation bill from the Legislature that
oversees the cultivating, processing, manufacturing,
transportation, prescribing and sale of medical marijuana. The
author adds that the Legislature has worked hard over the last
couple of years to enact a regulatory program that will
recognize the voter's mandate, streamline the ability of the
industry to grow and sell a legal product and that this bill
contains much of that hard work as well as reflects the efforts
of many groups, individuals who have spent years working in this
industry.
The author notes that currently, there are virtually no rules
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and regulations on the cultivation side of the medical marijuana
industry, and it is important to bring this legal crop into the
regulatory framework expected for other commodities. The author
adds that the severe drought California is experiencing has only
made the need for his legislation all the more urgent.
This bill focuses on a number of key aspects of medical
marijuana cultivation and proposes regulatory changes for those
items.
Compassionate Use Act of 1996. Since the approval of the CUA,
Proposition 215, by voters in 1996, state law has allowed
Californians access to marijuana for medical purposes, and
prohibits punitive action against physicians for making medical
marijuana recommendations. The CUA established the right of
patients to obtain and use marijuana to treat specified
illnesses and any other illness for which marijuana provides
relief. The CUA prohibits prosecution for growing or using
marijuana for Californians who have the oral or written
recommendation of their doctors and for these patients'
caregivers. Additionally, the CUA specifically protects
physicians who recommend the use of marijuana to patients for
medical purposes and exempts qualified patients and their
primary caregivers from California drug laws prohibiting
possession and cultivation of marijuana.
The CUA is a very general law. While it establishes the right
of a patient to obtain medical marijuana pursuant to a
physician's recommendation, the initiative then simply
encourages the state and federal governments to "implement a
plan for safe and affordable distribution of marijuana [to
qualified patients]." It has been argued that very little has
been done to implement the initiative. Instead of a
comprehensive implementation plan, numerous uncoordinated bills
have been introduced in the Legislature. Further, the courts
have only provided a small measure of clarity and certainty in
this area.
Medical Marijuana Program. Established by SB 420 (Vasconcellos,
Chapter 875, Statutes of 2003) and administered by CDPH when the
Legislature sought to clarify Prop 215 and the CUA, the MMP
created a state-authorized medical marijuana identification card
(MMP Card), along with a registry database for verification of
qualified patients and their primary caregivers. Participation
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by patients and primary caregivers in this identification card
program is voluntary. The MMP Web-based registry allows law
enforcement and the public to verify the validity of a qualified
patient or primary caregiver's MMP Card as authorization to
possess, grow, transport, and/or use medical marijuana within
California.
Federal regulation. Even though California voters enacted the
CUA to permit the use of marijuana for medical purposes by
persons deemed qualified by their physicians, marijuana still is
an illegal drug both under federal and state law, and its use,
possession, distribution, cultivation, or sale carries criminal
penalties. In August of 2013, the U.S. Department of Justice
(USDOJ) issued a memorandum titled "Guidance Regarding Marijuana
Enforcement" to all U.S. Attorneys. The memorandum updated the
prior guidance given by USDOJ regarding marijuana enforcement
under the federal Controlled Substances Act, in light of state
ballot initiatives that legalize marijuana under state laws and
that provide for the possession and use of small amounts of
marijuana. While affirming that marijuana is still, at the
federal level, considered a dangerous drug and that the illegal
distribution and sale of marijuana is a serious crime, the
memorandum outlines enforcement priorities that are particularly
important to the federal government, including: preventing
distribution to minors; preventing revenue from marijuana from
going to criminal enterprises; preventing diversion to other
states where marijuana is not legal under state law; preventing
state-authorized marijuana from being a cover for trafficking in
other illegal drugs or illegal activity; preventing violence in
cultivating and distributing marijuana; preventing drugged
driving and other public health problems from marijuana use; and
preventing growing, possessing or using marijuana on public
lands or on federal property. The document clearly lays out the
federal expectation for the states that have legalized
marijuana, even if only for medical purposes, that they will
develop a robust system of regulation and enforcement, and that
such a system will reduce the likelihood of federal enforcement
activity.
Environmental concerns. California land, watersheds and some
species, particularly in the author's district, have been
significantly damaged as a result of certain marijuana
cultivation efforts. "Trespass grows", cultivating marijuana
without permission on public, tribal or privately owned land,
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have been associated with wildlife poisoning, use and dumping of
fertilizers and pesticides, illegal water diversions and water
pollution, logging and land disturbance, and severe problems
with garbage and human waste. These industrial-size marijuana
grows, taking place in the National Forests and on private
timberland in some of the state's most remote and ecologically
sensitive areas, are the subject of a recent study by the
California Department of Fish and Wildlife, "Impacts of Surface
Water Diversions for Marijuana Cultivation on Aquatic Habitat in
Four Northwestern California Watershed," which showed that
during drought conditions, water demand for marijuana
cultivation exceeded stream flow in three of four study
watersheds and that diminished stream flow from this
water-intensive activity is likely to have lethal to sub-lethal
effects on state and federally listed salmon and steelhead trout
and will cause further decline of sensitive amphibian species.
Other states. Currently, 23 States and the District of Columbia
have laws related to medical marijuana or create a cannabis
program or legal provisions to allow for the medical use of
marijuana. The experiences of other states have helped to
inform the current conversation in California. Notably, this
bill establishes standards for transport of medical marijuana
products and security surrounding transport, proper preparation
and labeling of edible medical marijuana products and
requirements for testing of products. Other states have
attempted to ensure safety for the transit of these products,
particularly given the high value of products and tendency
toward cash transactions in the industry.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
Ongoing costs, likely over $20 million per year to license
medical marijuana cultivators, transporters, and dispensaries
by the Office (special fund). For comparison, the California
State Board of Pharmacy, which licenses and regulates
pharmacists and pharmacies in the state has an annual budget
of about $20 million per year.
This bill creates the Office dedicated to licensing and
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enforcing licensing requirements on the medical marijuana
industry. The annual costs to operate the Office are highly
uncertain. For example, the number of medical marijuana
cultivators, transporters, and dispensaries that would apply
for licensure under this bill is not known, in part because it
is difficult to know how the licensing and regulatory
requirements in this bill will change current practices in the
medical marijuana industry.
Unknown costs for enforcement of this bill's requirements by
local governments (local funds and special funds). This bill
requires the Office to enforce its provisions, but requires
the Office to delegate enforcement authority to requesting
local agencies. How those responsibilities will be divided
between levels of government and how much funding the state
will make available to local governments for enforcement
activity is unknown at this time.
Unknown fee revenues to offset the costs to implement this
bill (special fund). This bill gives the Office broad
authority to set licensing fees sufficient to pay for the
Office's costs to operate the licensing program, costs
incurred by the Office or the Department of Justice to enforce
this bill, costs incurred by local law enforcement agencies to
enforce this bill, and costs incurred by state and local
environmental agencies for enforcement costs relating to
cultivation facilities. The fee revenues generated under this
bill will depend both on the allowed costs that are incurred
at the state and local level as well as the feasibility of
collecting sufficient fees from the medical marijuana
industry.
Unknown costs for the Department of Justice to conduct
criminal background checks of licensees (special fund). Under
current practice, applicants for a criminal background check
are required to pay the $65 cost to conduct a criminal
background check using fingerprint databases.
Ongoing costs of about $1 million per year for enforcement of
food and drug safety requirements on medical marijuana
products by CDPH (General Fund or fee revenues from
licensees).
SUPPORT: (Verified6/3/15)
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None received
OPPOSITION: (Verified6/3/15)
None received
Prepared by: Sarah Mason / B., P. & E.D. / (916) 651-4104
6/3/15 16:48:21
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