BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1262 (Correa) - Medical marijuana: regulation of physicians,
dispensaries, and cultivation sites.
Amended: May 7, 2014 Policy Vote: B&P 9-0, Health 6-0
Urgency: No Mandate: Yes
Hearing Date: May 23, 2014 Consultant: Brendan McCarthy
SUSPENSE FILE. AS AMENDED.
Bill Summary: SB 1262 would require medical marijuana
dispensaries and cultivation sites to be licensed by the
Department of Public Health and would place certain regulatory
requirements on dispensaries and cultivations sites.
Fiscal Impact (as approved on May 23, 2014):
One-time costs of about $900,000 to develop and adopt
regulations and provide training to new staff by the
Department of Consumer Affairs (General Fund).
Ongoing costs of about $1.1 million per year to process
license applications, conduct spot inspections to verify
compliance with regulatory requirements, review complaints,
and assess civil penalties (special fund).
Minor anticipated costs to review and update existing
guidelines for physicians regarding medical marijuana by the
Medical Board of California (Contingent Fund of the Medical
Board).
Background: Under the Compassionate Use Act of 1996 (a voter
approved initiative measure), state law prohibits the criminal
prosecution of a patient with specified illnesses or a caregiver
for possession or cultivation of marijuana upon the
recommendation of a physician.
Under current law, the Department of Public Health operates a
program under which individuals can apply for an identification
card for the use of medical marijuana.
Proposed Law: SB 1262 would require medical marijuana
dispensaries and cultivation sites to be licensed by the
SB 1262 (Correa)
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Department of Public Health and would place certain regulatory
requirements on dispensaries and cultivations sites.
Specific provisions of the bill would:
Make it unlawful for a physician who recommends medical
marijuana to accept, solicit, or offer any remuneration from
or to a medical marijuana dispensary if the physician or his
or her family members have a financial interest in the
facility;
Require the Medical Board of California to consult with the
California Marijuana Research Program on medical guidelines
for medical marijuana use;
Prohibit the sale or cultivation of marijuana except as
authorized under the Compassionate Use Act at a licensed
facility;
Specify information that a license applicant must provide
to the Department of Public Health;
Authorize the Department to impose a regulatory fee on
licensees;
Require criminal background checks of license applicants;
Authorize the Department to deny a license for past
criminal convictions related to the operation of a
dispensary;
Place limitations on advertising for medical marijuana;
Require licensed facilities to implement specified security
measures;
Specify that licensees are subject to local government
restrictions;
Authorize civil penalties up to $35,000 per violation of
the bill's requirements.
Related Legislation:
AB 604 (Ammiano) would require the Department of Alcohol
Beverage Control to regulate the cultivation and sale of
medical marijuana. That bill is pending in the Senate Public
Safety Committee.
AB 1894 (Ammiano) is substantially similar to AB 604. That
bill is pending in the Assembly Appropriations Committee.
Staff Comments: Prop 26 limits the imposition of fees by
legislative action. Under Proposition 26, state agencies may
impose fees on regulated entities to perform licensing
activities and enforce licensing requirements.
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The only costs that may be incurred by a local agency relate to
crimes and infractions. Such costs are not reimbursable by the
state under the California Constitution.
Committee amendments: require the Department of Consumer Affairs
rather than the Department of Public Health to license
dispensaries and enforce provisions of the bill.