Bill Text: CA AB1575 | 2015-2016 | Regular Session | Amended
Bill Title: Medical cannabis.
Spectrum: Moderate Partisan Bill (Democrat 4-1)
Status: (Failed) 2016-11-30 - From Senate committee without further action. [AB1575 Detail]
Download: California-2015-AB1575-Amended.html
BILL NUMBER: AB 1575 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 1, 2016
AMENDED IN SENATE JUNE 22, 2016
AMENDED IN SENATE JUNE 13, 2016
AMENDED IN ASSEMBLY APRIL 25, 2016
AMENDED IN ASSEMBLY APRIL 13, 2016
AMENDED IN ASSEMBLY APRIL 4, 2016
AMENDED IN ASSEMBLY MARCH 18, 2016
INTRODUCED BY Assembly Members Bonta, Cooley, Jones-Sawyer, Lackey,
and Wood
JANUARY 4, 2016
An act to amend Sections 19300, 19300.5, 19302,
19302.1, 19306, 19310, 19316, 19317,
19320, 19321, 19322, 19326, 19328,
19332, 19332.5, 19334, 19335,
19340, 19342, 19341, 19344, 19345,
19347, 19350, 19351, and 19360 of, to amend the
heading of Article 5 (commencing with Section 19326) of Chapter 3.5
of Division 8 of, to amend the heading of Chapter 3.5
(commencing with Section 19300) of Division 8 of, to amend and add
Section 19328 of, to add Sections 14235.5,
19310.5, 19319.5, and 19322.5 19322.5, and
19327.5 to, and to repeal Section 19318 of,
the Business and Professions Code, to amend Sections 12025
and Section 12029 of the Fish and Game Code, to
amend Section 52334 of the Food and Agricultural Code, and to amend
Sections 11362.765, 11362.775, and 11362.777 of the Health and Safety
Code, relating to medical cannabis.
LEGISLATIVE COUNSEL'S DIGEST
AB 1575, as amended, Bonta. Medical cannabis.
(1) Existing law requires the classification of goods and services
to conform to the classifications adopted by the United States
Patent and Trademark Office.
This bill would, notwithstanding that provision, for purposes of
those marks for which a certificate of registration is issued on or
after January 1, 2017, authorize the use of specified marks related
to medical cannabis goods and services that are lawfully in commerce
in the state.
(1)
(2) Existing law, the Medical Marijuana
Cannabis Regulation and Safety Act, establishes
the licensing and regulation of medical marijuana
cannabis by the Bureau of Medical Marijuana
Cannabis Regulation. The act requires the
Board of Equalization, in consultation with the
Department of Food and Agriculture, in consultation with the
bureau, to adopt a system track and
trace program for reporting the movement of commercial
cannabis and cannabis products. medical cannabis
items throughout the distribu tion chain, as specified.
The act defines various terms for these purposes.
This bill would rename the act as the Medical Cannabis
Regulation and Safety Act and would rename the licensing authority
the Bureau of Medical Cannabis Regulation and would
change certain definitions and make the bureau, commencing
January 1, 2023, subject to review by the appropriate policy
committees of the Legislature. The bill would also
require the State Board of Equalization, in conjunction
with the Department of Business Oversight, to form an advisory group
made up of representatives from financial institutions, nonbank
financial service providers, the medical cannabis industry, law
enforcement, and state and federal banking regulators to examine
strategies such as integrated point-of-sale systems with state track
and trace systems and other measures that will improve financial
monitoring of medical cannabis businesses. The bill would require the
board, in conjunction with the department, by July 1, 2017, to
submit a report to the Legislature with recommendations that will
improve financial monitoring of medical cannabis businesses.
After the Bureau of Medical Cannabis Regulation posts a notice on
its Internet Web site that the licensing authorities have commenced
issuing licenses pursuant to the act, the bill would provide that a
financial institution that provides financial services customarily
provided by financial institutions to other entities to a current
licensee under the act is exempt from any criminal law of the state,
provided that the financial institution has verified the licensee has
a valid license in good standing. The bill would authorize the
bureau to provide information to a financial institution to verify
the status of a licensee.
(2)
(3) Under the act, a city, county, or city and county
is authorized to adopt an ordinance that establishes standards,
requirements, and regulations for local licenses and permits for
commercial marijuana activity that exceed statewide standards. The
act, with certain exceptions, provides a city full power and
authority to enforce the provisions of the act for facilities issued
a state license that are located within the incorporated area of a
city, if delegated by the state.
The bill would generally prohibit a city, county, or city and
county from adopting an ordinance for packaging safety standards that
exceeds statewide standards and would require the State Department
of Public Health to establish uniform statewide packaging safety
standards. The bill would authorize a city to contract in writing
with the county in which it is located to arrange for the county to
fulfill any regulatory functions relating to licensees within the
city limits if the county agrees to assume such responsibility.
(3)
(4) Existing law requires a cultivator or
manufacturer cultivator, manufacturer, and all
licensees holding a producing dispensary license in addition to a
cultivator or manufacturing license to send all medical
marijuana cannabis and medical
marijuana cannabis products cultivated
and or manufactured to a distributor for
presale quality assurance and inspection.
inspection by a distributor and for batch testing by
a testing laboratory prior to distribution to a dispensary.
Under the act, all packaging and sealing of medical
marijuana or medical marijuana products is required to be completed
prior to their being transported or delivered to a licensee,
qualified patient, or caregiver.
This bill would exempt a cultivator from the requirement
of sending medical cannabis to a distributor for quality assurance
and inspection if the medical cannabis is to be used, sold, or
otherwise provided to a manufacturer for further manufacturing. The
bill also would require the Bureau of Medical Cannabis
Regulation to specify the manner in which medical cannabis and
medical cannabis products meant for wholesale purposes are required
to be packaged and sealed prior to transport, testing, quality
assurance, quality control testing, or distribution. The bill
would authorize the bureau to establish advertising, marketing,
signage, and other labeling requirements and restrictions, as
specified, and to place conditions on a license restricting
advertising, marketing, and other promotion by the licensee. The bill
would require, one year after the bureau posts a notice on its
Internet Web site that the licensing authorities have commenced
issuing licenses, that all advertisements for licensees include the
valid state license number of the licensee. The bill would prohibit a
licensee from displaying an advertisement that shows the consumption
of medical cannabis while driving or operating machinery.
(4)
(5) The act generally establishes categories
of licenses that may be issued and limits a licensee to holding a
state license in up to 2 separate license categories.
categories, except as specified. The act
provides that, upon licensure, a business shall not be subject to
that limitation in a jurisdiction that adopted a local ordinance,
prior to July 1, 2015, allowing or requiring qualified businesses to
cultivate, manufacture, and dispense medical marijuana or medical
marijuana products, with all commercial marijuana activity being
conducted by a single qualified business. The act repeals these
provisions on January 1, 2026.
This bill would, instead, repeal only the latter
provision effective January 1, 2026. would instead
make the above provision regarding the exemption in a jurisdiction
that adopted a local ordinance inoperative on January 1, 2026.
(5) The act specifically establishes a "nursery license," to be
issued by the Department of Food and Agriculture, for the cultivation
of medical marijuana solely as a nursery, and authorizes a licensee
with a nursery license to transport live plants.
This bill would specify that a licensee with a nursery license may
transport live immature plants to a licensed facility, subject to
specified tracking, security, and related requirements.
(6) The act specifically establishes a "dispensary license," to be
issued by the bureau, and requires a licensed dispensary to
implement sufficient security measures, including, at a
minimum, certain specified security measures, such as establishing
limited access areas accessible only to authorized dispensary
personnel. The act authorizes a dispensary to deliver in a city,
county, or city and county that does not explicitly prohibit delivery
by local ordinance. to both deter and prevent
unauthorized entrance into areas containing medical cannabis or
medical cannabis products and theft of medical cannabis or medical
cannabis products at the dispensary, including, but not limited to,
establishing limited access areas accessible only to authorized
dispensary personnel.
This bill would require dispensaries to implement the additional
security measure of requiring all medical cannabis and medical
cannabis products used for display purposes, samples, or immediate
sale to be stored out of reach of any individual who is not employed
by the dispensary. The bill would require the bureau to
establish specified regulations regarding delivery of medical
cannabis and medical cannabis products by a dispensary and specified
requirements for all dispensary employees who deliver medical
cannabis or medical cannabis products.
(7) The act requires the State Department of Public Health to
promulgate regulations governing the licensing of manufacturers.
This bill would require the department to establish minimum
security requirements for the storage of medical cannabis products at
the manufacturing site.
(7)
(8) The act prohibits a licensed testing laboratory
from acquiring or receiving medical cannabis products except from a
licensed facility licensee and
prohibits a licensed testing laboratory from distributing,
delivering, transferring, transporting, or dispensing medical
cannabis or medical cannabis products, as specified.
This bill would instead prohibit a licensed
testing laboratory from transferring or transporting medical cannabis
or medical cannabis products except to from
the licensed facility premises
from which the medical cannabis or medical cannabis products were
acquired or received.
(8)
(9) Under the act, each licensing authority is required
to establish a scale of application, licensing, and renewal fees
based on the cost of enforcing the act.
This bill would specify that these fees shall be in addition to,
and shall not limit, any fees or taxes imposed by any city, county,
or city and county in which the licensee operates.
(9) The act requires a licensed testing laboratory to analyze
samples of medical marijuana or medical marijuana products according
to either the most current version of the cannabis inflorescence
monograph published by the American Herbal Pharmacopoeia or a
scientifically valid methodology that, in the opinion of the
accrediting body, is demonstrably equal or superior.
This bill would, instead, require a licensed testing laboratory to
analyze samples in the final form in which the patient will consume
the medical cannabis or medical cannabis product using a
scientifically valid methodology approved by the accrediting body.
(10) Existing law authorizes the University of California to
create the California Marijuana Research Program, the purpose of
which is to develop and conduct studies intended to ascertain the
general medical safety and efficacy of marijuana, and if found
valuable, to develop medical guidelines for the appropriate
administration and use of marijuana.
This bill would provide that it is not a violation of state law or
any local ordinance or regulation for a business
business, with a valid business licenses, or research
institution that has state authorization to engage in the research of
medical cannabis, medical cannabis products, or devices used for the
medical use of cannabis or cannabis products, to possess, transport,
purchase, or otherwise obtain from a licensee who is
authorized to provide or deliver medical cannabis
legally obtain, as specified, small amounts of medical cannabis
or medical cannabis products to conduct research and development
related to medical cannabis or medical cannabis products. The bill
would require a business or research institution engaged in the
research of medical cannabis to obtain written authorization from its
local jurisdiction that it has met all requirements of the local
ordinance to conduct research on medical cannabis, medical cannabis
products, or devices used for the medical use of cannabis or cannabis
products. The bill would provide that it is not a violation of state
law for certain licensees a licensee
to sell medical cannabis or medical cannabis products in an amount
not to exceed 8 ounces per month to a business or research
institution engaged in the research of medical cannabis if the
business or research institution provides to the licensee a copy of
the written authorization to conduct research within their
its jurisdiction and a copy of the local
ordinance, zoning variance, conditional use permit, or other
authorization, and would require the licensee to keep on file
that written authorization for at least 3 years and make it available
upon request to local authorities for auditing purposes. The
bill would require all medical cannabis or medical cannabis products
subject to these provisions to be obtained from a licensee permitted
to dispense or deliver the medical cannabis or medical cannabis
product.
(11) Existing law imposes various civil penalties for a violation
of specified provisions of law in connection with the production or
cultivation of a controlled substance, including marijuana, on land
under the management of specified state and federal agencies or
within the ownership of a timberland production zone, as prescribed.
Existing law also imposes various civil penalties for a violation of
those specified provisions of law in connection with the production
or cultivation of a controlled substance, including marijuana, on
land that the person owns, leases, or otherwise uses or occupies with
the consent of the landowner.
The bill would provide that activities that are in full compliance
with the Medical Cannabis Regulation and Safety Act are not subject
to the above-described civil penalties.
(12)
(11) The California Seed Law regulates seed sold in
California, and prohibits a city, county, or district from adopting
or enforcing an ordinance that regulates plants, crops, or seeds
without the consent of the Secretary of Food and Agriculture.
This bill would provide that an ordinance that regulates cannabis
or marijuana, or medical cannabis or medical marijuana, as defined,
shall not require the consent of the secretary.
(13)
(12) Under existing law, collectives and
cooperatives 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 collectively or cooperatively
in order to cultivate cannabis for medical purposes
are not, solely on that basis, subject to certain criminal penalties,
including unauthorized possession, cultivation, and transportation
of marijuana. This exception for collectives and
cooperatives expires one year after the Bureau of Medical
Marijuana Cannabis Regulation posts a
notice on its Internet Web site that the bureau has commenced issuing
licenses pursuant to the act and existing law is repealed on the
date the bureau issues a license.
This bill would, instead, provide that the above
exception is repealed one year after the bureau posts its notice on
its Internet Web site. The bill would also
specify that a collective or cooperative subject to this
exception may operate on a for-profit basis, a not-for-profit basis,
or any combination thereof, but would provide the protections of the
exception to for-profit collectives and cooperatives only if they
have a valid Board of Equalization seller's permit and a valid local
license, permit, or other authorization. The bill would also
specify that a licensee under the act may operate on a for-profit
basis, a not-for-profit basis, or any combination thereof.
The bill would additionally provide that a collective or cooperative
that cultivates cannabis and manufactures medical cannabis products
is not, solely on that basis, subject to certain criminal penalties
if specified requirements are met, including that the collective or
cooperative is in possession of a valid sellers
seller's permit issued by the State Board of Equalization.
The bill would provide that it is unlawful to display an
advertisement, as defined, for 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 in order collectively or cooperatively to
cultivate cannabis for medical purposes, without first verifying a
valid Board of Equalization issued seller's permit. The bill would
make a violation of that provision an infraction, punishable by a
fine of $500. $500 for the first offense and
$1,000 for each subsequent offense. By creating a new crime,
the bill would impose a state-mandated local program. One
year after the bureau posts the above-described notice on its
Internet Web site, the bill would require all advertisements for
licensees to include the valid state license number of the licensee,
and would authorize the bureau to provide information to verify that
a state license is active and in good standing for purposes of
complying with this provision.
(14)
(13) Existing law provides that a qualified patient or
a person with an identification card, a designated primary caregiver,
and any individual who provides assistance to a qualified patient or
a person with an identification card, or his or her designated
primary caregiver, are not, solely on that basis, subject to certain
criminal penalties, including unauthorized possession, cultivation,
and transportation of marijuana. Existing law specifies that this
provision does not authorize any individual or group to cultivate or
distribute marijuana.
This bill would instead specify that this provision does not
authorize any individual or group to cultivate or distribute cannabis
in any manner other than set forth in the Medical Cannabis
Regulation and Safety Act or in the Compassionate Use Act of 1996.
(15) This bill would also make technical, nonsubstantive changes
to the provisions of the act, including changing the term marijuana
to cannabis throughout.
(16)
(14) The California Constitution requires the state to
reimburse local agencies and school districts for certain costs
mandated by the state. Statutory provisions establish procedures for
making that reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The heading of Chapter 3.5
(commencing with Section 19300) of Division 8 of the Business and
Professions Code is amended to read:
CHAPTER 3.5. MEDICAL CANNABIS REGULATION AND SAFETY ACT
SEC. 2. Section 19300 of the Business and
Professions Code is amended to read:
19300. This act shall be known and may be cited as the Medical
Cannabis Regulation and Safety Act.
SEC. 3. Section 19300.5 of the Business and
Professions Code is amended to read:
19300.5. For purposes of this chapter, the following definitions
shall apply:
(a) "Accrediting body" means a nonprofit organization that
requires conformance to ISO/IEC 17025 requirements and is a signatory
to the International Laboratory Accreditation Cooperation Mutual
Recognition Arrangement for Testing.
(b) "Applicant," for purposes of Article 4 (commencing with
Section 19319), means the following:
(1) (A) Owner or owners of a proposed facility.
(B) An "owner" means a person having an aggregate ownership
interest, other than a security interest, lien, or encumbrance, of 5
percent or more in the licensee or who has the power to direct, or
cause to be directed, the management or control of the licensee.
(2) If the applicant is a publicly traded company, "owner" means
the chief executive officer, a member of the board of directors, or a
person or entity with an aggregate ownership interest of 5 percent
or more. If the applicant is a nonprofit entity, "owner" means both
the chief executive officer and any member of the board of directors.
(c) "Batch" means a specific quantity of medical cannabis or
medical cannabis product that is intended to have uniform character
and quality, within specified limits, and is produced according to a
single manufacturing order during the same cycle of manufacture.
(d) "Bureau" means the Bureau of Medical Cannabis Regulation
within the Department of Consumer Affairs.
(e) "Cannabinoid" or "phytocannabinoid" means a chemical compound
that is unique to and derived from cannabis.
(f) "Cannabis" or "marijuana" means all parts of the plant
Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis,
whether growing or not; the seeds thereof; the resin, whether crude
or purified, extracted from any part of the plant; and every
compound, manufacture, salt, derivative, mixture, or preparation of
the plant, its seeds, or resin. "Cannabis" or "marijuana" also means
the separated resin, whether crude or purified, obtained from
marijuana. "Cannabis" or "marijuana" also means marijuana as defined
by Section 11018 of the Health and Safety Code as enacted by Chapter
1407 of the Statutes of 1972. "Cannabis" or "marijuana" does not
include the mature stalks of the plant, fiber produced from the
stalks, oil or cake made from the seeds of the plant, any other
compound, manufacture, salt, derivative, mixture, or preparation of
the mature stalks (except the resin extracted therefrom), fiber, oil,
or cake, or the sterilized seed of the plant that is incapable of
germination. For the purposes of this chapter, "cannabis" or
"marijuana" does not mean "industrial hemp" as defined by Section
11018.5 of the Health and Safety Code.
(g) "Cannabis concentrate" or "marijuana concentrate" means
manufactured cannabis that has undergone a process to concentrate the
cannabinoid active ingredient, thereby increasing the product's
potency. An edible medical cannabis product is not considered food,
as defined by Section 109935 of the Health and Safety Code, or a
drug, as defined by Section 109925 of the Health and Safety Code.
(h) "Caregiver" or "primary caregiver" has the same meaning as
that term is defined in Section 11362.7 of the Health and Safety
Code.
(i) "Certificate of accreditation" means a certificate issued by
an accrediting body to a licensed testing laboratory, entity, or site
to be registered in the state.
(j) "Chief" means Chief of the Bureau of Medical Cannabis
Regulation within the Department of Consumer Affairs.
(k) "Commercial cannabis activity" or "commercial marijuana
activity" includes cultivation, possession, manufacture, processing,
storing, laboratory testing, labeling, transporting, distribution,
provision, donation, or sale of medical cannabis or a medical
cannabis product, regardless of whether the activity is undertaken on
a for-profit or nonprofit basis, or any combination thereof, and
regardless of whether the activity is for compensation or is
gratuitous, except as set forth in Section 19319, related to
qualifying patients and primary caregivers.
(l) "Cultivation" means any activity involving the planting,
growing, harvesting, drying, curing, grading, or trimming of
cannabis.
(m) "Cultivation site" means a facility where medical cannabis is
planted, grown, harvested, dried, cured, graded, or trimmed, or that
does all or any combination of those activities, that is owned and
operated by a person who holds a valid state license and a valid
local license, permit, or other authorization.
(n) "Cultivator" means a person that conducts the planting,
growing, harvesting, drying, curing, grading, or trimming of medical
cannabis and that holds both a valid state license and a valid local
license, permit, or other authorization.
(o) "Delivery" means the commercial transfer of medical cannabis
or medical cannabis products from a dispensary, up to an amount
determined by the bureau, to a primary caregiver or qualified patient
as defined in Section 11362.7 of the Health and Safety Code, or a
testing laboratory. "Delivery" also includes the use by a dispensary
of any technology platform owned and controlled by the dispensary, or
independently licensed under this chapter, that enables qualified
patients or primary caregivers to arrange for or facilitate the
commercial transfer by a licensed dispensary of medical cannabis or
medical cannabis products.
(p) "Dispensary" means a commercial facility with a fixed
location, whether or not there is direct access by customers, where
medical cannabis or medical cannabis products are offered, either
individually or in any combination, for retail sale, including an
establishment that delivers, unless delivery is expressly prohibited
by local ordinance, medical cannabis and medical cannabis products as
part of a retail sale.
(q) "Dispensing" means any activity involving the retail sale of
medical cannabis or medical cannabis products from a dispensary.
(r) "Distribution" means the procurement, sale, and transport of
medical cannabis and medical cannabis products between entities
licensed pursuant to this chapter.
(s) "Distributor" means a person licensed under this chapter to
engage in the business of purchasing or taking custody of medical
cannabis from a licensed cultivator, or medical cannabis products
from a licensed manufacturer, for sale or transfer to a licensed
dispensary and who holds a valid state license pursuant to this
chapter and a valid local license, permit, or other authorization at
the physical location of the distributor.
(t) "Dried flower" means all dead medical cannabis that has been
harvested, dried, cured, or otherwise processed, excluding leaves and
stems.
(u) "Edible cannabis product" or "edible marijuana product" means
manufactured cannabis that is intended to be used, in whole or in
part, for human consumption, including, but not limited to, chewing
gum. An edible medical cannabis product is not considered food as
defined by Section 109935 of the Health and Safety Code or a drug as
defined by Section 109925 of the Health and Safety Code.
(v) "Fund" means the Medical Cannabis Regulation and Safety Act
Fund established pursuant to Section 19351.
(w) "Identification program" means the universal identification
certificate program for commercial medical cannabis activity
authorized by this chapter.
(x) "Labor peace agreement" means an agreement between a licensee
and a bona fide labor organization that, at a minimum, protects the
state's proprietary interests by prohibiting labor organizations and
members from engaging in picketing, work stoppages, boycotts, and any
other economic interference with the applicant's business. This
agreement means that the applicant has agreed not to disrupt efforts
by the bona fide labor organization to communicate with, and attempt
to organize and represent, the applicant's employees. The agreement
shall provide a bona fide labor organization access at reasonable
times to areas in which the applicant's employees work, for the
purpose of meeting with employees to discuss their right to
representation, employment rights under state law, and terms and
conditions of employment. This type of agreement shall not mandate a
particular method of election or certification of the bona fide labor
organization.
(y) "Licensee" means a person issued a state license under this
chapter to engage in commercial cannabis activity.
(z) "Licensing authority" means the state agency responsible for
the issuance, renewal, or reinstatement of the license, or the state
agency authorized to take disciplinary action against the licensee.
(aa) "Live plants" means living medical cannabis flowers and
plants, including seeds, immature plants, and vegetative stage
plants.
(ab) "Lot" means a batch, or a specifically identified portion of
a batch, having uniform character and quality within specified
limits. In the case of medical cannabis or a medical cannabis product
produced by a continuous process, "lot" means a specifically
identified amount produced in a unit of time or a quantity in a
manner that ensures its having uniform character and quality within
specified limits.
(ac) "Manufactured medical cannabis" or "manufactured medical
marijuana" means raw cannabis that has undergone a process whereby
the raw agricultural product has been transformed into a concentrate,
an edible cannabis product, or a topical product.
(ad) "Manufacturer" means a person that conducts the production,
preparation, propagation, or compounding of manufactured medical
cannabis, as described in subdivision (ac), or medical cannabis
products either directly or indirectly or by extraction methods, or
independently by means of chemical synthesis or by a combination of
extraction and chemical synthesis at a fixed location that packages
or repackages medical cannabis or medical cannabis products or labels
or relabels its container, that holds a valid state license pursuant
to this chapter, and that holds a valid local license, permit, or
other authorization.
(ae) "Manufacturing site" means a location that produces,
prepares, propagates, or compounds manufactured medical cannabis or
medical cannabis products, directly or indirectly, by extraction
methods, independently by means of chemical synthesis, or by a
combination of extraction and chemical synthesis, and is owned and
operated by a person that holds a valid state license pursuant to
this chapter and a valid local license, permit, or other
authorization.
(af) "Medical cannabis," "medical cannabis product," "cannabis
product," "medical marijuana," "medical marijuana product," or
"marijuana product" means a product containing cannabis, including,
but not limited to, concentrates and extractions, intended to be sold
for use by medical cannabis patients in California pursuant to the
Compassionate Use Act of 1996 (Proposition 215), found at Section
11362.5 of the Health and Safety Code. For the purposes of this
chapter, "medical cannabis" or "medical marijuana" does not include
"industrial hemp" as defined by Section 81000 of the Food and
Agricultural Code or Section 11018.5 of the Health and Safety Code.
(ag) "Nursery" means a licensee that produces only clones,
immature plants, seeds, and other agricultural products used
specifically for the planting, propagation, and cultivation of
medical cannabis.
(ah) "Permit," "local license," or "local permit" means an
official document granted by a local jurisdiction that specifically
authorizes a person to conduct commercial cannabis activity in the
local jurisdiction.
(ai) "Person" means an individual, firm, partnership, joint
venture, association, corporation, limited liability company, estate,
trust, business trust, receiver, syndicate, or any other group or
combination acting as a unit and includes the plural as well as the
singular number.
(aj) "State license" or "license" means a state license issued
pursuant to this chapter.
(ak) "Topical product" means a product manufactured such that its
final stage is in the form of a topical drug, as defined by the
Center for Drug Evaluation and Research under the federal Food and
Drug Administration. A topical product is not considered a drug as
defined by Section 109925 of the Health and Safety Code.
(al) "Testing laboratory" means a facility, entity, or site in the
state that offers or performs tests of medical cannabis or medical
cannabis products and that is both of the following:
(1) Accredited by an accrediting body that is independent from all
other persons involved in the medical cannabis industry in the
state.
(2) Licensed pursuant to this chapter.
(am) "Transport" means the transfer of medical cannabis or medical
cannabis products from the permitted business location of one
licensee to the permitted business location of another licensee, for
the purposes of conducting commercial cannabis activity authorized
pursuant to this chapter.
(an) "Transporter" means a person issued a state license by the
bureau to transport medical cannabis or medical cannabis products in
an amount above a threshold determined by the bureau between
facilities that have been issued a state license pursuant to this
chapter.
SEC. 4. Section 19302 of the Business and
Professions Code is amended to read:
19302. (a) There is in the Department of Consumer Affairs the
Bureau of Medical Cannabis Regulation, under the supervision and
control of the director. The director shall administer and enforce
the provisions of this chapter.
(b) Commencing January 1, 2023, the bureau shall be subject to
review by the appropriate policy committees of the Legislature.
SEC. 5. Section 19302.1 of the Business and
Professions Code is amended to read:
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 of Consumer Affairs with the approval of
the Director of Finance. The chief shall serve under the direction
and supervision of the Director of Consumer Affairs 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 cannabis 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 may create, issue, and suspend or revoke cultivation
licenses for violations of this chapter.
(f) 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. The State Department
of Public Health may create, issue, and suspend or revoke
manufacturing and testing licenses for a violation of this chapter.
The State Department of Public Health shall seek and include feedback
from the scientific community and cannabis testing industry when
promulgating testing regulations. The State Department of Public
Health shall review and update medical cannabis testing standards on
an annual basis, incorporating new testing technology, such as DNA
testing for contaminants.
SEC. 6. Section 19306 of the Business and
Professions Code is amended to read:
19306. (a) The bureau may convene an advisory committee to advise
the bureau and licensing authorities on the development of standards
and regulations pursuant to this chapter, including best practices
and guidelines to ensure qualified patients have adequate access to
medical cannabis and medical cannabis products. The advisory
committee members shall be determined by the chief.
(b) The advisory committee members may include, but are not
limited to, representatives of the medical cannabis industry,
representatives of medical cannabis cultivators, appropriate local
and state agencies, appropriate local and state law enforcement,
physicians, environmental and public health experts, and medical
cannabis patient advocates.
SEC. 7. Section 19310 of the Business and
Professions Code is amended to read:
19310. The licensing authority may, on its own motion at any time
before a penalty assessment is placed into effect and without any
further proceedings, review the penalty, but that review shall be
limited to its reduction.
SECTION 1. Section 14235.5 is added to the
Business and Professions Code , to read:
14235.5. Notwithstanding Section 14235, for purposes of those
marks for which a certificate of registration is issued on or after
January 1, 2017, the following classifications may be used for marks
related to medical cannabis goods and services that are lawfully in
commerce in the State of California:
(a) 500 for medical cannabis and medical cannabis products.
(b) 501 for services related to medical cannabis and medical
cannabis products.
SEC. 2. Section 19300.5 of the Business
and Professions Code is amended to read:
19300.5. For purposes of this chapter, the following definitions
shall apply:
(a) "Accrediting body" means a nonprofit organization that
requires conformance to ISO/IEC 17025 requirements and is a signatory
to the International Laboratory Accreditation Cooperation Mutual
Recognition Arrangement for Testing.
(b) "Applicant," for purposes of Article 4 (commencing
with Section 19320), includes the following:
(1) Owner or owners of the proposed
premises, including all persons or entities having ownership interest
other than a security interest, lien, or encumbrance on property
that will be used by the premises.
(2) If the owner is an entity, "owner" includes within the entity
each person participating in the direction, control, or management
of, or having a financial interest in, the proposed premises.
(3) If the applicant is a publicly traded company, "owner" means
the chief executive officer or any person or entity with an aggregate
ownership interest of 5 percent or more.
(2) An "owner" means the chief executive officer, a member of the
board of directors, a person having an aggregate ownership interest,
other than a security interest, lien, or encumbrance, of 10 percent
or more in the licensee, or a person who has the power to direct, or
cause to be directed, the management or control of the licensee. The
applicant shall disclose all persons having an aggregate ownership
interest, other than a security interest, lien, or encumbrance, of 1
percent or more in the licensee, at the time of application.
(c) "Batch" means a specific quantity of homogeneous medical
cannabis or medical cannabis product and is one of the following
types:
(1) "Harvest batch" means a specifically identified quantity of
dried flower or trim, leaves, and other cannabis plant matter that is
uniform in strain, harvested at the same time, and, if applicable,
cultivated using the same pesticides and other agricultural
chemicals, and harvested at the same time.
(2) "Manufactured cannabis batch" means either:
(A) An amount of cannabis concentrate or extract produced in one
production cycle using the same extraction methods and standard
operating procedures, and is from the same harvest batch.
(B) An amount of a type of manufactured cannabis produced in one
production cycle using the same formulation and standard operating
procedures.
(d) "Bureau" means the Bureau of Medical Cannabis Regulation
within the Department of Consumer Affairs.
(e) "Cannabinoid" or "phytocannabinoid" means a chemical compound
that is unique to and derived from cannabis.
(f) "Cannabis" means all parts of the plant Cannabis sativa
Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or
not; the seeds thereof; the resin, whether crude or purified,
extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of the plant,
its seeds, or resin. "Cannabis" also means the separated resin,
whether crude or purified, obtained from cannabis. "Cannabis" also
means marijuana as defined by Section 11018 of the Health and Safety
Code as enacted by Chapter 1407 of the Statutes of 1972. "Cannabis"
does not include the mature stalks of the plant, fiber produced from
the stalks, oil or cake made from the seeds of the plant, any other
compound, manufacture, salt, derivative, mixture, or preparation of
the mature stalks (except the resin extracted therefrom), fiber, oil,
or cake, or the sterilized seed of the plant which is incapable of
germination. For the purpose of this chapter, "cannabis" does not
mean "industrial hemp" as defined by Section 81000 of the Food and
Agricultural Code or Section 11018.5 of the Health and Safety Code.
(g) "Cannabis concentrate" means manufactured cannabis that has
undergone a process to concentrate one or more active cannabinoids,
thereby increasing the product's potency. Resin from granular
trichomes from a cannabis plant is a concentrate for purposes of this
chapter. A cannabis concentrate is not considered food, as defined
by Section 109935 of the Health and Safety Code, or a drug, as
defined by Section 109925 of the Health and Safety Code.
(h) "Certificate of accreditation" means a certificate issued by
an accrediting body to a testing laboratory.
(i) "Chief" means Chief of the Bureau of Medical Cannabis
Regulation within the Department of Consumer Affairs.
(j) "Commercial cannabis activity" includes cultivation,
possession, manufacture, processing, storing, laboratory testing,
labeling, transporting, distribution, donation, provision,
delivery, or sale of medical cannabis or a medical cannabis product,
regardless of whether the activity is undertaken on a
for-profit or nonprofit basis, or any combination thereof, and
regardless of whether the activity is for compensation or is
gratuitous, except as set forth in Section 19319, related to
qualifying patients and primary caregivers.
(k) "Cultivation" means any activity involving the planting,
growing, harvesting, drying, curing, grading, or trimming of medical
cannabis.
(l) "Cultivation site" means a location where medical cannabis is
planted, grown, harvested, dried, cured, graded, or trimmed, or that
does all or any combination of those activities.
(m) "Cultivator" means a person that conducts the planting,
growing, harvesting, drying, curing, grading, or trimming of medical
cannabis.
(m)
(n) "Delivery" means the commercial transfer of medical
cannabis or medical cannabis products from a dispensary, up to an
amount determined by the bureau bureau,
to a primary caregiver or qualified patient as defined in Section
11362.7 of the Health and Safety Code, or a testing laboratory.
"Delivery" also includes the use by a dispensary of any technology
platform owned and controlled by the dispensary, or independently
licensed under this chapter, that enables qualified patients or
primary caregivers to arrange for or facilitate the commercial
transfer by a licensed dispensary of medical cannabis or medical
cannabis products.
(n)
(o) "Dispensary" means a premises with a fixed
location, whether or not there is direct access by customers,
where medical cannabis, cannabis or
medical cannabis products, or devices for the use of medical
cannabis or medical cannabis products are offered, either
individually or in any combination, for retail sale, including an
establishment that delivers, pursuant to Section 19340, medical
cannabis and medical cannabis products as part of a retail sale.
(o)
(p) "Dispensing" means any activity involving the
retail sale of medical cannabis or medical cannabis products from a
dispensary.
(p)
(q) "Distribution" means the procurement, sale, and
transport of medical cannabis and medical cannabis products between
entities licensed pursuant to this chapter.
(q)
(r) "Distributor" means a person licensed under this
chapter to engage in the business of purchasing or taking
custody of medical cannabis from a licensed cultivator, or
medical cannabis products from a licensed manufacturer, for sale
or transfer to a licensed dispensary.
(r)
(s) "Dried flower" means all dead medical cannabis that
has been harvested, dried, cured, or otherwise processed, excluding
leaves and stems.
(s)
(t) "Edible cannabis product" means manufactured
cannabis that is intended to be used, in whole or in part, for human
consumption, including, but not limited to, chewing gum, but
excluding products set forth in Division 15 (commencing with Section
32501) of the Food and Agricultural Code. An edible medical cannabis
product is not considered food as defined by Section 109935 of the
Health and Safety Code or a drug as defined by Section 109925 of the
Health and Safety Code.
(t)
(u) "Fund" means the Medical Cannabis Regulation and
Safety Act Fund established pursuant to Section 19351.
(u)
(v) "Identification program" means the universal
identification certificate program for commercial medical cannabis
activity authorized by this chapter.
(v)
(w) "Labeling" means any label or other written,
printed, or graphic matter upon a medical cannabis product, or upon
its container or wrapper, or that accompanies any medical cannabis
product.
(w)
(x) "Labor peace agreement" means an agreement between
a licensee and a bona fide labor organization that, at a minimum,
protects the state's proprietary interests by prohibiting labor
organizations and members from engaging in picketing, work stoppages,
boycotts, and any other economic interference with the applicant's
business. This agreement means that the applicant has agreed not to
disrupt efforts by the bona fide labor organization to communicate
with, and attempt to organize and represent, the applicant's
employees. The agreement shall provide a bona fide labor organization
access at reasonable times to areas in which the applicant's
employees work, for the purpose of meeting with employees to discuss
their right to representation, employment rights under state law, and
terms and conditions of employment. This type of agreement shall not
mandate a particular method of election or certification of the bona
fide labor organization.
(x)
(y) "Licensee" means a person issued a state license
under this chapter to engage in commercial cannabis activity.
(y)
(z) "Licensing authority" means the state agency
responsible for the issuance, renewal, or reinstatement of the
license.
(z)
(aa) "Live plants" means living medical cannabis
flowers and plants, including seeds, immature plants, and vegetative
stage plants.
(aa)
(ab) "Local license, permit, or other authorization"
means an official document granted by a local jurisdiction that
specifically authorizes a person to conduct commercial cannabis
activity in the local jurisdiction.
(ab)
(ac) "Lot" means a batch or a specifically identified
portion of a batch.
(ac)
(ad) "Manufactured cannabis" means raw cannabis that
has undergone a process whereby the raw agricultural product has been
transformed into a concentrate, an edible product, or a topical
product.
(ad)
(ae) "Manufacturer" means a person that conducts the
production, preparation, propagation, or compounding of manufactured
medical cannabis, as described in subdivision (ae), or medical
cannabis products either directly or indirectly or by extraction
methods, or independently by means of chemical synthesis or by a
combination of extraction and chemical synthesis at a fixed location
that packages or repackages medical cannabis or medical cannabis
products or labels or relabels its container.
(ae)
(af) "Manufacturing site" means the premises that
produces, prepares, propagates, or compounds manufactured medical
cannabis or medical cannabis products, directly or indirectly, by
extraction methods, independently by means of chemical synthesis, or
by a combination of extraction and chemical synthesis, and is owned
and operated by a licensee for these activities.
(af)
(ag) "Medical cannabis," "medical cannabis product," or
"cannabis product" means a product containing cannabis, including,
but not limited to, concentrates and extractions, intended to be sold
for use by medical cannabis patients in California pursuant to the
Compassionate Use Act of 1996 (Proposition 215), found at Section
11362.5 of the Health and Safety Code. For the purposes of this
chapter, "medical cannabis" does not include "industrial hemp" as
defined by Section 81000 of the Food and Agricultural Code or Section
11018.5 of the Health and Safety Code.
(ag)
(ah) "Nursery" means a licensee that produces only
clones, immature plants, seeds, and other agricultural products used
specifically for the planting, propagation, and cultivation of
medical cannabis.
(ah)
(ai) "Person" means an individual, firm, partnership,
joint venture, association, corporation, limited liability company,
estate, trust, business trust, receiver, syndicate, or any other
group or combination acting as a unit and includes the plural as well
as the singular number.
(ai)
(aj) "Primary caregiver" has the same meaning as that
term is defined in Section 11362.7 of the Health and Safety Code.
(aj)
(ak) "State license" or "license" means a state license
issued pursuant to this chapter.
(ak)
(al) "Testing laboratory" means the premises where
tests are performed on medical cannabis or medical cannabis products
and that holds a valid certificate of accreditation.
(al)
(am) "Topical cannabis" means a product
manufactured such that its final stage is in the form of a topical
drug, as defined by the Center for Drug Evaluation and Research under
the federal Food and Drug Administration, and intended for
external use. A topical cannabis product is not considered a drug as
defined by Section 109925 of the Health and Safety Code.
(am)
(an) "Transport" means the transfer of medical cannabis
or medical cannabis products from the permitted business location of
one licensee to the permitted business location of another licensee,
for the purposes of conducting commercial cannabis activity
authorized pursuant to this chapter.
(an)
(ao) "Transporter" means a person who holds a license
by the bureau to transport medical cannabis or medical cannabis
products in an amount above a threshold determined by the bureau
between licensees that have been issued a license pursuant
to this chapter. licensees.
SEC. 3. Section 19302 of the Business
and Professions Code is amended to read:
19302. (a) There is in the Department of
Consumer Affairs the Bureau of Medical Cannabis Regulation, under the
supervision and control of the director. The director shall
administer and enforce the provisions of this chapter related to the
bureau.
(b) Commencing January 1, 2023, the bureau shall be subject to
review by the appropriate policy committees of the Legislature.
SEC. 4. Section 19302.1 of the Business
and Professions Code is amended to read:
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 of Consumer Affairs 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 of
Consumer Affairs 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 of Consumer Affairs may employ and appoint all
employees necessary to properly administer the work of the bureau, in
accordance with civil service laws and regulations. The Governor may
also appoint a deputy chief and an assistant chief counsel to the
bureau. These positions shall hold office at the pleasure of the
Governor.
(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, testing, distribution, and sale of medical cannabis
within the state and to collect fees in connection with activities
the bureau regulates. The bureau shall have the authority to create
licenses in addition to those identified in this chapter that the
bureau deems necessary to effectuate its duties under this chapter.
The State Department of Public Health shall seek and include
feedback from the scientific community and cannabis testing industry
when promulgating testing regulations. The State Department of Public
Health shall review and update medical cannabis testing standards on
an annual basis, incorporating new testing technology, such as DNA
testing for contaminants.
(e) The Department of Food and Agriculture shall administer the
provisions of this chapter related to and associated with the
cultivation of medical cannabis and will serve as lead agency for the
purpose of fulfilling the requirements of the California
Environmental Quality Act (Division 13 (commencing with Section
21000) of the Public Resources Code). The Department of Food and
Agriculture shall have the authority to create, issue, renew,
discipline, suspend, or revoke licenses for the cultivation of
medical cannabis and to collect fees in connection with activities it
regulates. The Department of Food and Agriculture shall have the
authority to create licenses in addition to those identified in this
chapter that it deems necessary to effectuate its duties under this
chapter.
(f) The State Department of Public Health shall administer the
provisions of this chapter related to and associated with the
manufacturing of medical cannabis. The State Department of Public
Health shall have the authority to create, issue, renew, discipline,
suspend, or revoke licenses for the manufacturing of medical cannabis
and medical cannabis products and to collect fees in connection with
activities it regulates. The State Department of Public Health shall
have the authority to create licenses in addition to those
identified in this chapter that it deems necessary to effectuate its
duties under this chapter.
SEC. 8. SEC. 5. Section 19310.5 is
added to the Business and Professions Code, to read:
19310.5. (a) It is the intent of the Legislature to enact a
statute that improves the medical cannabis industry's ability to
comply with federal law and regulations that would allow improved
access to banking services.
(b) (1) The State Board of Equalization, in conjunction with the
Department of Business Oversight, shall form an advisory group made
up of representatives from financial institutions, nonbank financial
service providers, the medical cannabis industry, law enforcement,
and federal banking regulators. By July 1, 2017, the board, in
conjunction with the department, shall submit a report to the
Legislature with recommendations from the advisory group that will
improve financial monitoring of medical cannabis businesses.
(2) A report submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code. The
requirement for submitting a report imposed in paragraph (1) is
inoperative on July 1, 2021, pursuant to Section 10231.5 of the
Government Code.
(c) The advisory group shall examine strategies, such as the use
of integrated point-of-sale systems with state track and trace
systems and other measures that will improve financial monitoring of
medical cannabis businesses.
SEC. 9. SEC. 6. Section 19316 of the
Business and Professions Code is amended to read:
19316. (a) (1) Pursuant to Section 7 of Article XI of the
California Constitution, a city, county, or city and county may,
except as described in paragraph (2), adopt ordinances that establish
additional standards, requirements, and regulations for local
licenses and permits for commercial cannabis activity. Standards,
requirements, and regulations regarding health and safety, testing,
security, and worker protections established by the state shall be
the minimum standards for all licensees statewide.
(2) Packaging safety standards shall be uniform across the state
and shall be established by the State Department of Public Health, in
accordance with Section 19347.
(3) For purposes of this subdivision, packaging safety standards
do not include packaging requirements related to appellations of
origin or other branding or marketing materials.
(b) For facilities issued a state license that are located within
the incorporated area of a city, the city shall have full power and
authority to enforce this chapter and the regulations promulgated by
the bureau or any licensing authority, if delegated by the state.
Notwithstanding Sections 101375, 101400, and 101405 of the Health and
Safety Code or any contract entered into pursuant thereto, or any
other law, the city shall further assume complete responsibility for
any regulatory function relating to those licensees within the city
limits that would otherwise be performed by the county or any county
officer or employee, including a county health officer, without
liability, cost, or expense to the county. A city may contract in
writing with the county in which it is located to arrange for the
county to fulfill any regulatory functions relating to those
licensees within the city limits if the county has agreed to assume
such responsibility.
(c) Nothing in this chapter, or any regulations promulgated
thereunder, shall be deemed to limit the authority or remedies of a
city, county, or city and county under any provision of law,
including, but not limited to, Section 7 of Article XI of the
California Constitution.
SEC. 10. Section 19318 of the Business and
Professions Code is repealed.
SEC. 7. Section 19317 of the Business
and Professions Code is amended to read:
19317. (a) The Notwithstanding any other
law, the actions of a licensee, its employees, and
its agents that are (1) permitted pursuant to both a state license
and a license or permit issued by the local jurisdiction following
the requirements of the applicable local ordinances, and (2)
conducted in accordance with the requirements of this chapter and
regulations adopted pursuant to this chapter, are not unlawful under
state law and shall not be an offense subject to arrest, prosecution,
or other sanction under state law, or be subject to a civil fine or
be a basis for seizure or forfeiture of assets under state law.
(b) The Notwithstanding any other law
, actions of a person who, in good faith, allows his
or her property to be used by a licensee, its employees, and its
agents, as permitted pursuant to both a state license and a local
license or permit following the requirements of the applicable local
ordinances, are not unlawful under state law and shall not be an
offense subject to arrest, prosecution, or other sanction under state
law, or be subject to a civil fine or be a basis for seizure or
forfeiture of assets under state law.
SEC. 11. SEC. 8. Section 19319.5 is
added to the Business and Professions Code, to read:
19319.5. (a) It is not a violation of this chapter or any other
state law, for a business business, with a
valid business license, or research institution engaged in the
research of medical cannabis, medical cannabis products, or devices
used for the medical use of cannabis or cannabis products, to
possess, transport, purchase, or otherwise legally obtain
from a licensee who is permitted to provide or deliver medical
cannabis pursuant to subdivisions (n) and (o) of Section 19300.7,
obtain, pursuant to this chapter, small amounts
of medical cannabis or medical cannabis products, not to exceed eight
ounces per month, as necessary to conduct research and development
related to medical cannabis or medical cannabis products in a city,
county, or city and county that expressly authorizes that activity by
local ordinance. ordinance, zoning variance,
conditional use permit, or any other express written authorization.
A business or research institution engaged in the research of
medical cannabis shall obtain written authorization from its local
jurisdiction that the business or institution has met all
requirements of the local ordinance
jurisdiction to conduct research on medical cannabis, medical
cannabis products, or devices used for the medical use of cannabis or
cannabis products.
(b) (1) It is not a violation of this
chapter or any other state law for a licensee, pursuant to
subdivisions (n) and (o) of Section 19300.7, licensee
to sell medical cannabis or medical cannabis products in an
amount not to exceed eight ounces per month to a business or research
institution engaged in the research of medical cannabis, if the
business or research institution provides to the licensee a copy of
the written authorization to conduct research within the business's
or institution's jurisdiction and a copy of the local
ordinance. ordinance, zoning variance, conditional use
permit, or any other express written authorization. The
licensee shall keep on file that written authorization for at least
three years and make it available upon request to local authorities
for auditing purposes.
(2) Medical cannabis or medical cannabis products subject to this
section shall only be obtained from a licensee who is permitted under
this chapter to dispense or deliver medical cannabis or medical
cannabis products.
(3) All medical cannabis and medical cannabis products purchased
for research purposes shall be subject to all requirements of the
track and trace program established pursuant to Section 19335.
(c) Notwithstanding subdivisions (a) and (b), it shall not be a
violation of this chapter or any other state law for the California
Marijuana Research Program authorized under Section 11362.9 of the
Health and Safety Code to obtain medical cannabis or medical cannabis
products from a licensee. All medical cannabis and medical cannabis
products obtained under this subdivision shall be reported to the
bureau and to the track and trace program established pursuant to
Section 19335.
SEC. 12. Section 19320 of the Business and
Professions Code, as added by Section 4 of Chapter 689 of the
Statutes of 2015, is amended 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. One year after
the Bureau of Medical Cannabis Regulation posts a notice on its
Internet Web site that the licensing authorities have commenced
issuing licenses, no person shall engage in commercial cannabis
activity without possessing both a state license and a local permit,
license, or other authorization. An entity seeking licensure pursuant
to this chapter shall obtain a local license, permit, or other
authorization prior to applying for state licensure. State licensing
entities shall not issue a license to any applicant that is unable to
provide documentation confirming authorization to operate from the
local government in which the applicant proposes to operate. 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. 13. Section 19320 of the Business and
Professions Code, as added by Section 8 of Chapter 719 of the
Statutes of 2015, is amended 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. One year after
the Bureau of Medical Cannabis Regulation posts a notice on its
Internet Web site that the licensing authorities have commenced
issuing licenses, no person shall engage in commercial cannabis
activity without possessing both a state license and a local permit,
license, or other authorization. An entity seeking licensure pursuant
to this chapter shall obtain a local license, permit, or other
authorization prior to applying for state licensure. State licensing
entities shall not issue a license to any applicant that is unable to
provide documentation confirming authorization to operate from the
local government in which the applicant proposes to operate. 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. 14. Section 19321 of the Business and
Professions Code is amended to read:
19321. (a) The Department of Consumer Affairs, the Department of
Food and Agriculture, and the State Department of Public Health shall
promulgate regulations for implementation of their respective
responsibilities in the administration of this chapter. The secretary
or director of each licensing authority may prescribe, adopt, and
enforce emergency regulations necessary to implement this chapter.
(b) A state license issued pursuant to this section shall be valid
for 12 months from the date of issuance. The state license shall be
renewed annually. Each licensing authority shall establish procedures
for the renewal of a state license.
(c) Notwithstanding subdivision (a) of Section 19320, a facility
or entity that is operating in compliance with local zoning
ordinances and other state and local requirements on or before
January 1, 2018, may continue its operations until its application
for licensure is approved or denied pursuant to this chapter. In
issuing licenses, the licensing authority shall prioritize a facility
or entity that can demonstrate to the licensing authority's
satisfaction that it was in operation and in good standing with the
local jurisdiction by January 1, 2016.
(d) Issuance of a state license or a determination of compliance
with local law by the licensing authority shall in no way limit the
ability of the City of Los Angeles to prosecute any person or entity
for a violation of, or otherwise enforce, Proposition D, approved by
the voters of the City of Los Angeles on the May 21, 2013, ballot for
the city, or the city's zoning laws. Nor may issuance of a state
license or determination of compliance with local law by the
licensing authority be deemed to establish, or be relied upon, in
determining satisfaction with the immunity requirements of
Proposition D or local zoning law, in court or in any other context
or forum.
SEC. 15. Section 19322 of the Business and
Professions Code is amended to read:
19322. (a) A person or entity shall not submit an application for
a state license pursuant to this chapter unless that person or
entity first receives a license, permit, or authorization specific to
commercial cannabis activity from 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 dispensary license,
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 valid 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 or medical cannabis products, 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. 9. Section 19320 of the Business
and Professions Code is amended to read:
19320. (a) All commercial cannabis activity shall be conducted
between licensees, except as otherwise provided in this chapter.
(b) 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,
One year after the Bureau of Medical Cannabis Regulation posts a
notice on its Internet Web site that the licensing authorities have
commenced issuing licenses, no person shall engage in
commercial cannabis activity without possessing both a state license
and a local permit, license, or other authorization. An entity
seeking licensure pursuant to this chapter shall obtain a local
license, permit, or other authorization prior to applying for state
licensure. State licensing entities shall not issue a license to any
applicant that is unable to provide documentation confirming
authorization to operate from the local government in which the
applicant proposes to operate. 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 local license,
permit, or other authorization from the local jurisdiction in which
he or she proposes to operate, following the requirements of the
applicable local ordinance.
(c) 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 where any equipment that is not currently transporting medical
cannabis or medical cannabis products permanently resides.
(d) 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
authorization. Local authorities shall notify the bureau upon
revocation of a local license, permit, or other authorization. The
bureau shall inform relevant licensing authorities.
(e) 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.
(f) 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.
(g) Nothing in this chapter shall be construed to supersede or
limit state agencies, including the Department of Food and
Agriculture, the State Water Resources Control Board, and the
Department of Fish and Wildlife, from establishing fees to support
their medical cannabis regulatory programs.
SEC. 10. Section 19322 of the Business
and Professions Code is amended to read:
19322. (a) A person or entity shall not submit an
application for a state license issued by a licensing authority
pursuant to this chapter unless that person has received
or entity first receives a license, permit, or
authorization specific to commercial cannabis activity
from the 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, testing, transporter, or dispensary
license, provide a statement from the owner of real property or their
agent where the cultivation, distribution, manufacturing, testing,
transport, or dispensing of commercial medical cannabis activities
will occur, as proof to demonstrate the landowner has acknowledged
and consented to permit cultivation, distribution, manufacturing,
testing, transport, 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 valid 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) Pay all applicable fees required for licensure by the
licensing authority.
(11) Provide proof of a bond to cover the costs of destruction of
medical cannabis or medical cannabis products if necessitated by a
violation of licensing requirements.
(b) For applicants seeking licensure to cultivate, distribute,
manufacture, test, or dispense medical cannabis or medical cannabis
products, 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.
(6) Security protocols.
SEC. 16. SEC. 11. Section 19322.5 is
added to the Business and Professions Code, to read:
19322.5. A licensee may operate as a for-profit business, as a
not-for-profit entity, or as a combination of both.
SEC. 17. SEC. 12. The heading of
Article 5 (commencing with Section 19326) of Chapter 3.5 of Division
8 of the Business and Professions Code is amended to read:
Article 5. Medical Cannabis Regulation
SEC. 18. Section 19326 of the Business and
Professions Code is amended to read:
19326. (a) A person other than a transporter shall not transport
medical cannabis or medical cannabis products from one licensee to
another licensee, unless otherwise specified in this chapter.
(b) (1) A cultivator or a manufacturer shall send medical cannabis
and medical cannabis products cultivated or manufactured to a
distributor, as defined in Section 19300.5, for quality assurance and
inspection by the distributor and for a batch testing by a testing
laboratory prior to distribution to a dispensary, except as provided
in paragraph (2). Those licensees holding a Type 10A license in
addition to a cultivation license or a manufacturing license shall
send medical cannabis and medical cannabis products to a distributor
for presale inspection and for a batch testing by a testing
laboratory prior to dispensing any product. The licensing authority
shall fine a licensee who violates this subdivision in an amount
determined by the licensing authority to be reasonable.
(2) A cultivator is not required to send medical cannabis to a
distributor if the medical cannabis is to be used, sold, or otherwise
distributed by methods approved pursuant to this chapter to a
manufacturer for further manufacturing.
(c) (1) Upon receipt of medical cannabis or medical cannabis
products from a cultivator or a manufacturer, the distributor shall
first ensure a random sample of the medical cannabis or medical
cannabis product is tested by a testing laboratory.
(2) Upon issuance of a certificate of analysis by the testing
laboratory that the product is fit for manufacturing or retail, the
cultivator or manufacturer shall send medical cannabis and medical
cannabis products from the approved associated batch to the
distributor. All medical cannabis and medical cannabis products shall
then undergo a quality assurance review by the distributor prior to
distribution to ensure the identity, quality, and content of the
medical cannabis or medical cannabis product, and for tracking and
taxation purposes by the state. Cultivators and manufacturers shall
package or seal all medical cannabis and medical cannabis products in
tamper-evident packaging and use a unique identifier, as prescribed
by the Department of Food and Agriculture, for the purpose of
identifying and tracking medical cannabis or medical cannabis
products. Medical cannabis and medical cannabis products shall be
labeled as required by Section 19347, except as otherwise specified
in this chapter. All packaging and sealing shall be completed prior
to medical cannabis or medical cannabis products being transported or
delivered to a licensee, qualified patient, or caregiver, except as
otherwise specified in this chapter. The bureau shall specify the
manner in which medical cannabis and medical cannabis products meant
for wholesale purposes shall be packaged and sealed prior to
transport, testing, quality assurance, quality control testing, or
distribution.
(3) This section does not limit the ability of a cultivator,
manufacturer, or dispensary to directly enter into contracts with one
another indicating the price and quantity of medical cannabis or
medical cannabis products to be distributed. However, a distributor
responsible for executing the contract is authorized to collect a fee
for the services rendered, including, but not limited to, costs
incurred by a testing laboratory, as well as applicable state or
local taxes and fees.
(d) Medical cannabis and medical cannabis products shall be tested
by a testing laboratory, prior to retail sale or dispensing, as
follows:
(1) Medical cannabis from dried flower shall, at a minimum, be
tested for concentration, pesticides, mold, and other contaminants.
(2) Medical cannabis extracts shall, at a minimum, be tested for
concentration and purity of the product.
(3) This chapter shall not prohibit a licensee from performing
on-site testing for the purposes of quality assurance of the product
in conjunction with reasonable business operations. On-site testing
by the licensee shall not be certified by the State Department of
Public Health.
(e) All commercial cannabis activity shall be conducted between
licensees.
(f) The bureau shall promulgate regulations relating to the
amounts of each batch of medical cannabis or medical cannabis product
that a cultivator or manufacturer is required to send to a
distributor for inspection and a testing laboratory for testing. The
regulations shall focus on reducing diversion, ensuring the quality
of the product for the health and safety of patients, and allowing
for efficiency in enforcement.
SEC. 19. Section 19328 of the Business and
Professions Code is amended to read:
19328. (a) Except as specified in paragraph (9), a licensee may
only hold a state license in up to two separate license categories,
as follows:
(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a
Type 6 or 7 state license.
(2) Type 6 or 7 licensees, or a combination thereof, may also hold
either a Type 1, 1A, 1B, 2, 2A, or 2B state license.
(3) Type 6 or 7 licensees, or a combination thereof, may also hold
a Type 10A state license.
(4) Type 10A licensees may also hold either a Type 6 or 7 state
license, or a combination thereof.
(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
thereof, may also hold a Type 10A state license.
(6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A, or 2B
state license, or a combination thereof.
(7) Type 11 licensees shall apply for a Type 12 state license, but
shall not apply for any other type of state license.
(8) Type 12 licensees may apply for a Type 11 state license.
(9) A Type 10A licensee may apply for a Type 6 or 7 state license
and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof
if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination of
licenses thereof, no more than four acres of total canopy size of
cultivation by the licensee is occurring throughout the state during
the period that the respective licenses are valid. All cultivation
pursuant to this section shall comply with local ordinances. By
January 1, 2025, the bureau shall review the appropriateness of
continuing licensure under this paragraph and shall report its
recommendation for elimination or extension of these provisions to
the Legislature.
(b) Except as provided in subdivision (a), a person or entity that
holds a state license is prohibited from licensure for any other
activity authorized under this chapter, and is prohibited from
holding an ownership interest in real property, personal property, or
other assets associated with or used in any other license category.
(c) (1) In a jurisdiction that adopted a local ordinance, prior to
July 1, 2015, allowing or requiring qualified businesses to
cultivate, manufacture, and dispense medical cannabis or medical
cannabis products, with all commercial cannabis activity being
conducted by a single qualified business, upon licensure that
business shall not be subject to subdivision (a) if it meets all of
the following conditions:
(A) The business was cultivating, manufacturing, and dispensing
medical cannabis or medical cannabis products on July 1, 2015, and
has continuously done so since that date.
(B) The business has been in full compliance with all applicable
local ordinances at all times prior to licensure.
(C) The business is registered with the State Board of
Equalization for tax purposes.
(2) A business licensed pursuant to paragraph (1) is not required
to conduct all cultivation or manufacturing within the bounds of a
single local jurisdiction, but all cultivation and manufacturing
shall have commenced prior to July 1, 2015, and have been in full
compliance with applicable local ordinances.
(d) This section shall remain in effect only until January 1,
2026, and as of that date is repealed.
SEC. 20. Section 19328 is added to the Business
and Professions Code, to read:
19328. (a) A licensee may only hold a state license in up to two
separate license categories, as follows:
(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a
Type 6 or 7 state license.
(2) Type 6 or 7 licensees, or a combination thereof, may also hold
either a Type 1, 1A, 1B, 2, 2A, or 2B state license.
(3) Type 6 or 7 licensees, or a combination thereof, may also hold
a Type 10A state license.
(4) Type 10A licensees may also hold either a Type 6 or 7 state
license, or a combination thereof.
(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
thereof, may also hold a Type 10A state license.
(6) Type 10A
licensees may apply for Type 1, 1A, 1B, 2, 2A, or 2B state license,
or a combination thereof.
(7) Type 11 licensees shall apply for a Type 12 state license, but
shall not apply for any other type of state license.
(8) Type 12 licensees may apply for a Type 11 state license.
(9) A Type 10A licensee may apply for a Type 6 or 7 state license
and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof
if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination of
licenses thereof, no more than four acres of total canopy size of
cultivation by the licensee is occurring throughout the state during
the period that the respective licenses are valid. All cultivation
pursuant to this section shall comply with local ordinances.
(b) Except as provided in subdivision (a), a person or entity that
holds a state license is prohibited from licensure for any other
activity authorized under this chapter, and is prohibited from
holding an ownership interest in real property, personal property, or
other assets associated with or used in any other license category.
(c) This section shall become operative on January 1, 2026.
SEC. 21. Section 19332 of the Business and
Professions Code, as added by Section 1 of Chapter 688 of the
Statutes of 2015, is amended to read:
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 to implement 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 medical 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 medical cannabis
cultivation license, pursuant to Article 8 (commencing with Section
19337). All medical 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. A Type 4 licensee may transport live immature
plants to a licensed facility, subject to the tracking, security, and
related requirements in accordance with Article 7 (commencing with
Section 19334), Article 7.5 (commencing with Section 19335), and
Article 8 (commencing with Section 19337).
SEC. 22. Section 19332 of the Business and
Professions Code, as added by Section 13 of Chapter 719 of the
Statutes of 2015, is amended to read:
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 to implement 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 medical 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 medical cannabis
cultivation license, pursuant to Article 8 (commencing with Section
19337). All medical 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. A Type 4 licensee may transport live immature
plants to a licensed facility, subject to the tracking, security, and
related requirements in accordance with Article 7 (commencing with
Section 19334), Article 7.5 (commencing with Section 19335), and
Article 8 (commencing with Section 19337).
SEC. 23. Section 19332.5 of the Business and
Professions Code is amended to read:
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 cannabis, 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 medical
cannabis grown in California.
(c) It is unlawful for medical cannabis to be marketed, labeled,
or sold as grown in a California county when the medical cannabis 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 cannabis products unless
the product was grown in that county.
SEC. 24. Section 19334 of the Business and
Professions Code is amended to read:
19334. (a) State licenses to be issued by the Department of
Consumer Affairs are as follows:
(1) (A) "Dispensary," as defined in this chapter.
(B) A dispensary may be one of the following:
(i) "Storefront dispensary" for licensees who have a brick and
mortar dispensary with direct physical access for the public.
(ii) "Nonstorefront dispensary" for licensees who have a brick and
mortar dispensary that does not have a storefront with direct
physical access for the public.
(C) Any of the dispensaries listed in subparagraph (B) may deliver
in a city, county, or city and county that does not expressly
prohibit delivery by local ordinance.
(2) "Distributor," or "Type 11 licensee," for the distribution of
medical cannabis and medical cannabis products from manufacturer to
dispensary. A distributor shall hold a Type 12, or transporter,
license and register each location where product is stored for the
purposes of distribution. A distributor shall not hold a license in a
cultivation, manufacturing, dispensing, or testing license category
and shall not own, or have an ownership interest in, a facility
licensed in those categories other than a security interest, lien, or
encumbrance on property that is used by a licensee. A distributor
shall be bonded and insured at a minimum level established by the
licensing authority.
(3) "Transporter" or "Type 12 licensee" for transporters of
medical cannabis or medical cannabis products between licensees. A
transporter shall be bonded and insured at a minimum level
established by the licensing authority.
(b) The bureau shall establish both of the following:
(1) Minimum security requirements for the commercial
transportation and delivery of medical cannabis and medical cannabis
products.
(2) Advertising, marketing, signage, and other labeling
requirements and restrictions, including a prohibition on
advertising, marketing, and other promotion of the medical cannabis
or medical cannabis products provided by a person engaging in
commercial cannabis activity but not in full compliance with this
chapter.
(A) The bureau may provide information to verify a state license
is active and in good standing for purposes of complying with this
paragraph.
(B) One year after the bureau posts a notice on its Internet Web
site that the licensing authorities have commenced issuing licenses
pursuant to the Medical Cannabis Regulation and Safety Act, all
advertisements for licensees under this chapter shall include the
valid state license number of the licensee.
(c) A dispensary shall implement sufficient security measures to
both deter and prevent unauthorized entrance into areas containing
medical cannabis or medical cannabis products and theft of medical
cannabis or medical cannabis products at the dispensary. These
security measures shall include, but not be limited to, all of the
following:
(1) Preventing individuals from remaining on the premises of the
dispensary if they are not engaging in activity expressly related to
the operations of the dispensary.
(2) Establishing limited access areas accessible only to
authorized dispensary personnel.
(3) Storing all finished medical cannabis and medical cannabis
products in a secured and locked room, safe, or vault, and in a
manner as to prevent diversion, theft, and loss, except for limited
amounts of cannabis used for display purposes, samples, or immediate
sale.
(4) Requiring all medical cannabis and medical cannabis products
used for display purposes, samples, or immediate sale to be stored
out of reach of any individual who is not employed by the dispensary.
(d) A dispensary shall notify the licensing authority and the
appropriate law enforcement authorities within 24 hours after
discovering any of the following:
(1) Significant discrepancies identified during inventory. The
level of significance shall be determined by the bureau.
(2) Diversion, theft, loss, or any criminal activity involving the
dispensary or any agent or employee of the dispensary.
(3) The loss or unauthorized alteration of records related to
cannabis, registered qualifying patients, primary caregivers, or
dispensary employees or agents.
(4) Any other breach of security.
SEC. 25. Section 19335 of the Business and
Professions Code is amended to read:
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 cannabis 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.
Notwithstanding Section 30, 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.
(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 may enter into a
memorandum of understanding with a licensing authority 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.
SEC. 13. Section 19326 of the Business
and Professions Code is amended to read:
19326. (a) A person other than a transporter shall not transport
medical cannabis or medical cannabis products from one licensee to
another licensee, unless otherwise specified in this chapter.
(b) (1) All cultivators, manufacturers, and licensees holding a
producing dispensary license in addition to a cultivation or
manufacturing license shall send all medical cannabis and medical
cannabis products cultivated or manufactured to a distributor, as
defined in Section 19300.5, for presale quality assurance and
inspection by a distributor and for a batch testing by a testing
laboratory prior to distribution to a dispensary.
(2) Notwithstanding paragraph (1), a cultivator shall not be
required to send medical cannabis to a distributor if the medical
cannabis is to be used, sold, or otherwise distributed by methods
approved pursuant to this chapter by a manufacturer for further
manufacturing.
(c) (1) Upon receipt of medical cannabis or medical cannabis
products from a cultivator, manufacturer, or a licensee holding a
producing dispensary license in addition to a cultivation or a
manufacturing license, the distributor shall first inspect the
product to ensure the identity and quantity of the product and ensure
a random sample of the medical cannabis or medical cannabis product
is tested by a testing laboratory.
(2) Upon issuance of a certificate of analysis by the testing
laboratory that the product is fit for dispensing
dispensing, medical cannabis and medical cannabis products
shall undergo a quality assurance review by the distributor prior to
distribution to ensure the quantity and content of the medical
cannabis or medical cannabis product, and for tracking and taxation
purposes by the state. The bureau shall specify the manner in
which medical cannabis and medical cannabis products meant for
wholesale purposes shall be packaged and sealed prior to transport,
testing, quality assurance, quality control testing, or distribution.
(3) This
section does not limit the ability of licensed cultivators,
manufacturers, and dispensaries to directly enter into contracts with
one another indicating the price and quantity of medical cannabis or
medical cannabis products to be distributed. However, a distributor
responsible for executing the contract is authorized to collect a fee
for the services rendered, including, but not limited to, costs
incurred by a testing laboratory, as well as applicable state or
local taxes and fees.
(d) Medical cannabis and medical cannabis products shall be tested
by a licensed testing laboratory, prior to dispensing, pursuant to
Section 19344.
(e) This chapter shall not prohibit a licensee from performing
testing on the licensee's premises for the purposes of quality
assurance of the product in conjunction with reasonable business
operations. On-site testing by the licensee shall not be certified by
the Bureau of Medical Cannabis Regulation.
(f) The bureau shall promulgate regulations relating to the
amounts of each batch of medical cannabis or medical cannabis product
that a cultivator or manufacturer is required to send to a
distributor for inspection and a testing laboratory for testing. The
regulations shall focus on reducing diversion, ensuring the quality
of the product for the health and safety of patients, and allowing
for efficiency in enforcement.
SEC. 14. Section 19327.5 is added to the
Business and Professions Code , to read:
19327.5. (a) (1) The bureau may establish advertising, marketing,
signage, and other labeling requirements and restrictions, including
a prohibition on advertising, marketing, and other promotion of
medical cannabis or medical cannabis products provided by a person
engaging in commercial cannabis activity but not in full compliance
with this chapter.
(2) The bureau may place conditions on a license restricting
advertising, marketing, and other promotion by the licensee.
(b) (1) One year after the bureau posts a notice on its Internet
Web site that the licensing authorities have commenced issuing
licenses pursuant to the Medical Cannabis Regulation and Safety Act,
all advertisements for licensees under this chapter shall include the
valid state license number of the licensee.
(2) The bureau may provide information to verify a state license
is active and in good standing for purposes of complying with this
section.
(c) A licensee under this chapter shall not display an
advertisement that shows the consumption of medical cannabis while
driving or operating machinery.
SEC. 15. Section 19328 of the Business
and Professions Code is amended to read:
19328. (a) Except as provided in paragraphs (9) and (10), a
licensee may only hold a state license in up to two separate license
categories, as follows:
(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a
Type 6 or 7 state license.
(2) Type 6 or 7 licensees, or a combination thereof, may also hold
either a Type 1, 1A, 1B, 2, 2A, or 2B state license.
(3) Type 6 or 7 licensees, or a combination thereof, may also hold
a Type 10A state license.
(4) Type 10A licensees may also hold either a Type 6 or 7 state
license, or a combination thereof.
(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination
thereof, may also hold a Type 10A state license.
(6) Type 10A licensees may hold a Type 1, 1A, 1B, 2, 2A, or 2B
state license, or a combination thereof.
(7) Type 11 licensees shall also hold a Type 12 state license, but
shall not hold any other type of state license.
(8) Type 12 licensees may hold a Type 11 state license.
(9) A Type 10A licensee may hold a Type 6 or 7 state license and
may also hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination
thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or
combination of licenses thereof, no more than four acres of total
canopy size of cultivation by the licensee is occurring throughout
the state during the period that the respective licenses are valid.
All cultivation pursuant to this section shall comply with local
ordinances. This paragraph shall become inoperative on January 1,
2026.
(10) All cultivators and manufacturers may hold a Type 12
transporter license. All cultivators and manufacturers who are issued
Type 12 transporter licenses shall comply with the following:
(A) Cultivators shall only transport medical cannabis from a
cultivation site to a manufacturer or a distributor.
(B) Manufacturers shall only transport medical cannabis and
medical cannabis products as follows:
(i) Between a cultivation site and a manufacturing site.
(ii) Between a manufacturing site and a manufacturing site.
(iii) Between a manufacturing site and a distributor.
(b) Except as provided in subdivision (a), a person or entity that
holds a state license is prohibited from licensure for any other
activity authorized under this chapter, and is prohibited from
holding an ownership interest in real property, personal property, or
other assets associated with or used in any other license category.
(c) (1) In a jurisdiction that adopted a local ordinance, prior to
July 1, 2015, requiring qualified businesses to cultivate,
manufacture, and dispense medical cannabis or medical cannabis
products, with all commercial cannabis activity being conducted by a
single qualified business, upon licensure that business shall not be
subject to subdivision (a) if it meets all of the following
conditions:
(A) The business was cultivating, manufacturing, and dispensing
medical cannabis or medical cannabis products on January 1, 2016, and
has continuously done so since that date.
(B) The business has been in full compliance with all applicable
local ordinances at all times prior to licensure.
(C) The business is registered with the State Board of
Equalization for tax purposes.
(2) A business licensed pursuant to paragraph (1) is not required
to conduct all cultivation or manufacturing within the bounds of a
local jurisdiction, but all cultivation and manufacturing shall have
commenced prior to January 1, 2016, and have been in full compliance
with applicable local ordinances.
(d)
(3) This section subdivision
shall remain in effect only until
become inoperative on January 1, 2026, and as of that
date is repealed. 2026.
SEC. 16. Section 19332 of the Business
and Professions Code is amended to read:
19332. (a) The Department of Food and Agriculture shall
promulgate regulations governing the licensing of indoor and outdoor
commercial cultivation sites.
(b) The Department of Pesticide Regulation shall develop
guidelines for the use of pesticides in the cultivation of cannabis
and residue in harvested cannabis.
(c) The Department of Food and Agriculture shall serve as the lead
agency for purposes of the California Environmental Quality Act
(Division 13 (commencing with Section 21000) of the Public Resources
Code) related to the licensing of cannabis cultivation.
(d) Pursuant to Section 13149 of the Water Code, the State Water
Resources Control Board, in consultation with the Department of Fish
and Wildlife and the Department of Food and Agriculture, shall ensure
that individual and cumulative effects of water diversion and
discharge associated with cultivation of cannabis 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 medical cannabis cultivation by
licensees is conducted in accordance with state and local laws.
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 medical
cannabis cultivation license, pursuant to Article 8 (commencing with
Section 19337). All medical 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 shall require that the
application of pesticides or other pest control in connection with
the indoor or outdoor cultivation of medical cannabis complies with
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 may 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, if
the licensee also holds a Type 12 transporter license issued pursuant
to this chapter.
SEC. 17. Section 19334 of the Business
and Professions Code is amended to read:
19334. (a) State licenses to be issued by the Department of
Consumer Affairs are as follows:
(1) (A) "Dispensary," Type 10 license as
defined in this chapter. This license shall allow for delivery
pursuant to Section 19340.
(B) A dispensary may be one of the following:
(i) "Storefront dispensary" for licensees who have a brick and
mortar dispensary with direct physical access for the public.
(ii) "Nonstorefront dispensary" for licensees who have a brick and
mortar dispensary that does not have a storefront with direct
physical access for the public.
(2) "Distributor," Type 11 license for the distribution of medical
cannabis and medical cannabis products from manufacturer to
dispensary. A distributor licensee shall hold a Type 12 or
transporter license. Each location where product is stored for the
purposes of distribution must be individually licensed. A distributor
licensee shall not hold a license in a cultivation, manufacturing,
dispensing, or testing license category and shall not own, or have an
ownership interest in, premises licensed in those categories other
than a security interest, lien, or encumbrance on property that is
used by a licensee. A distributor shall be bonded and insured at a
minimum level established by the licensing authority.
(3) (A) "Producing dispensary," Type 10A for
dispensers who have no more than three licensed dispensary
facilities and wish to hold either a cultivation or manufacturing
license or both. This license shall allow for delivery where
expressly authorized by local ordinance. Each dispensary must be
individually licensed.
(B) A producing dispensary may be one of the following:
(i) "Storefront producing dispensary" for licensees who have a
brick and mortar producing dispensary with direct physical access for
the public.
(ii) "Nonstorefront producing dispensary" for licensees who have a
brick and mortar producing dispensary that does not have a
storefront with direct physical access for the public.
(4) "Transport," Type 12 license for transporters of medical
cannabis or medical cannabis products between licensees. A Type 12
licensee shall be bonded and insured at a minimum level established
by the licensing authority.
(b) The bureau shall establish minimum security requirements for
the commercial transportation, storage, and delivery of medical
cannabis and medical cannabis products.
(c) The State Department of Public Health shall establish minimum
security requirements for the storage of medical cannabis products at
the manufacturing site.
(d)
(c) A licensed dispensary shall implement sufficient
security measures to both deter and prevent unauthorized entrance
into areas containing medical cannabis or medical cannabis products
and theft of medical cannabis or medical cannabis products at the
dispensary. These security measures shall include, but not be limited
to, all of the following:
(1) Preventing individuals from remaining on the premises of the
dispensary if they are not engaging in activity expressly related to
the operations of the dispensary.
(2) Establishing limited access areas accessible only to
authorized dispensary personnel.
(3) Storing all finished medical cannabis and medical cannabis
products in a secured and locked room, safe, or vault, and in a
manner as to prevent diversion, theft, and loss, except for limited
amounts of cannabis used for display purposes, samples, or immediate
sale.
(4) Requiring all medical cannabis and medical cannabis products
used for display purposes, samples, or immediate sale to be stored
out of reach of any individual who is not employed by the dispensary.
(e)
(d) A dispensary shall notify the licensing authority
and the appropriate law enforcement authorities within 24 hours after
discovering any of the following:
(1) Significant discrepancies identified during inventory. The
level of significance shall be determined by the bureau.
(2) Diversion, theft, loss, or any criminal activity pertaining to
the operation of the dispensary.
(3) Diversion, theft, loss, or any criminal activity by any agent
or employee of the dispensary pertaining to the operation of the
dispensary.
(4) The loss or unauthorized alteration of records related to
medical cannabis or medical cannabis products, registered qualifying
patients, primary caregivers, or dispensary employees or agents.
(5) Any other breach of security.
SEC. 26. SEC. 18. Section 19340 of
the Business and Professions Code is amended to read:
19340. (a) Deliveries, as defined in this chapter, can only be
made by a dispensary and in a city, county, or city and county that
does not explicitly prohibit it by local ordinance.
(b) Upon approval of the licensing authority, a licensed
dispensary that delivers medical cannabis or medical cannabis
products shall comply with both of the following:
(1) The city, county, or city and county in which the licensed
dispensary is located, and in which each delivery is made, do not, by
ordinance, explicitly prohibit delivery.
(2) All employees of a dispensary delivering medical cannabis or
medical cannabis products shall carry a copy of the dispensary's
current license authorizing those services with them during
deliveries and the employee's government-issued identification, and
shall present that license and identification upon request to state
and local law enforcement, employees of regulatory authorities, and
other state and local agencies enforcing this chapter.
(c) A county shall have the authority to impose a tax, pursuant to
Article 11 (commencing with Section 19348), on each delivery
transaction completed by a licensee.
(d) During delivery, the licensee shall maintain a physical copy
of the delivery request and shall make it available upon request of
the licensing authority and law enforcement officers. The delivery
request documentation shall comply with state and federal
law regarding the protection of confidential medical information.
all applicable privacy laws and regulations.
(e) The qualified patient or primary caregiver requesting the
delivery shall maintain a copy of the delivery request and shall make
it available, upon request, to the licensing authority and law
enforcement officers.
(f) A local jurisdiction shall not prevent carriage of medical
cannabis or medical cannabis products on public roads by a licensee
acting in compliance with this chapter.
(g) The bureau shall establish the following regulations regarding
the delivery of medical cannabis and medical cannabis products:
(1) Employee training standards that ensure qualified patients and
primary caregivers have adequate information regarding the medical
cannabis or medical cannabis products that a dispensary delivers, and
to provide employees with information regarding state and federal
laws and regulations.
(2) Protocols to provide qualified patients and primary caregivers
with information regarding laws, regulations, and local ordinances
relevant to providing medical cannabis or medical cannabis products
to qualified patients and primary caregivers in the local
jurisdiction in which the dispensary is located and the local
jurisdiction in which the qualified patients and primary caregivers
are located.
(3) A system for registering and maintaining the status of all
delivery personnel of dispensaries, including protocols for
suspending the registrations of individuals who move out of this
state, who discontinue employment at a dispensary, or who are under
suspension or inspection by a dispensary or local or state agencies.
This system shall be made available to local and state law
enforcement, qualified patients, primary caregivers, and any other
entity deemed appropriate by the bureau. Any fees associated with
registration of delivery personnel shall be set by the bureau and
shall not exceed the reasonable amount necessary to cover the costs
to regulate the delivery personnel and maintain the system.
(4) The operating hours for delivery.
(5) A requirement that any person who delivers medical cannabis or
medical cannabis products be employed by or contract with only one
dispensary at a time.
(6) Minimum requirements for patient information that is stored by
each delivery operation, including, but not limited to, the contact
information for the patient and, if applicable, his or her primary
caregiver, the physician's recommendation, and the identification
card issued pursuant to Article 2.5 (commencing with Section 11362.7)
of Chapter 6 of Division 10 of the Health and Safety Code. All
identifying information obtained about a qualified patient or primary
caregiver shall be obtained and stored in compliance with
the Confidentiality of Medical Information Act (Part 2.6 (commencing
with Section 56) of Division 1 of the Civil Code) and all other
confidential and must be maintained and disclosed
pursuant to applicable privacy laws and regulations.
(h) The bureau shall establish requirements for all dispensary
employees who deliver medical cannabis or medical cannabis products,
including, but not limited to, the following:
(1) Possession of a valid driver's license issued by the
Department of Motor Vehicles.
(2) Provide the bureau with a current address.
(3) Provide the bureau with necessary automobile and insurance
information.
(4) Registration with the bureau.
SEC. 27. Section 19342 of the Business and
Professions Code is amended to read:
19342. (a) For the purposes of testing medical cannabis or
medical cannabis products, licensees shall use a licensed testing
laboratory that has adopted a standard operating procedure using
methods consistent with general requirements for the competence of
testing and calibration activities, including sampling, using
standard methods established by the International Organization for
Standardization, specifically ISO/IEC 17020 and ISO/IEC 17025 to test
medical cannabis and medical cannabis products that are approved by
an accrediting body that is a signatory to the International
Laboratory Accreditation Cooperation Mutual Recognition Arrangement.
(b) An agent of a testing laboratory shall obtain samples
according to a statistically valid sampling method for each lot.
(c) A testing laboratory shall analyze samples according to the
following:
(1) In the final form which the patient will consume the medical
cannabis or medical cannabis product, including moisture content and
other attributes.
(2) A scientifically valid methodology approved by the accrediting
body.
(d) If a test result falls outside the specifications authorized
by law or regulation, the testing laboratory shall follow a standard
operating procedure to confirm or refute the original result.
(e) A testing laboratory shall destroy the remains of the sample
of medical cannabis or medical cannabis product upon completion of
the analysis.
SEC. 28. Section 19344 of the Business and
Professions Code is amended to read:
19344. (a) A testing laboratory shall issue a certificate of
analysis for each lot, with supporting data, to report both of the
following:
(1) Whether the chemical profile of the lot conforms to the
specifications of the lot for compounds, including, but not limited
to, all of the following:
(A) Tetrahydrocannabinol (THC).
(B) Tetrahydrocannabinolic Acid (THCA).
(C) Cannabidiol (CBD).
(D) Cannabidiolic Acid (CBDA).
(E) The terpenes described in the most current version of the
cannabis inflorescence monograph published by the American Herbal
Pharmacopoeia.
(F) Cannabigerol (CBG).
(G) Cannabinol (CBN).
(H) Any other compounds required by the State Department of Public
Health.
(2) That the presence of contaminants does not exceed the levels
that are the lesser of either the most current version of the
American Herbal Pharmacopoeia monograph or the State Department of
Public Health. For purposes of this paragraph, contaminants include,
but are not limited to, all of the following:
(A) Residual solvent or processing chemicals.
(B) Foreign material, including, but not limited to, hair,
insects, or similar or related adulterant.
(C) Microbiological impurity, including total aerobic microbial
count, total yeast mold count, P. aeruginosa, aspergillus spp., s.
aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A.
(D) Whether the batch is within specification for odor and
appearance.
(b) Residual levels of volatile organic compounds shall be below
those set by the State Department of Public Health. The State
Department of Public Health shall conduct periodic audits of the
results of testing laboratories to verify their accuracy.
SEC. 29. Section 19345 of the Business and
Professions Code is amended to read:
19345. (a) Except as provided in this chapter, a licensed testing
laboratory shall not acquire or receive medical cannabis or medical
cannabis products except from a licensed facility in accordance with
this chapter, and shall not transfer or transport medical cannabis or
medical cannabis products, except to the licensed facility from
which the medical cannabis or medical cannabis products were acquired
or received. All transfer or transportation shall be performed
pursuant to a specified chain of custody protocol.
(b) A licensed testing laboratory may receive and test samples of
medical cannabis or medical cannabis products from a qualified
patient or primary caregiver only if he or she presents his or her
valid recommendation for cannabis for medical purposes from a
physician. A licensed testing laboratory shall not certify samples
from a qualified patient or caregiver for resale or transfer to
another party or licensee. All tests
performed by a licensed testing laboratory for a
qualified patient or caregiver shall be recorded with the name of the
qualified patient or caregiver and the amount of medical cannabis or
medical cannabis product received.
(c) The State Department of Public Health shall develop procedures
to ensure that testing of cannabis occurs prior to transport to
dispensaries or any other business, specify how often licensees shall
test cannabis and that the cost of testing shall be borne by the
licensed cultivators, and require destruction of harvested batches
whose testing samples indicate noncompliance with health and safety
standards promulgated by the State Department of Public Health,
unless remedial measures can bring the cannabis into compliance with
quality assurance standards as promulgated by the State Department of
Public Health.
(d) The State Department of Public Health shall establish a
licensing fee, and laboratories shall pay a fee to be licensed.
Licensing fees shall not exceed the reasonable regulatory cost of the
licensing activities.
SEC. 30. Section 19347 of the Business and
Professions Code is amended to read:
19347. (a) Prior to delivery or sale at a dispensary, medical
cannabis products shall be labeled and in a tamper-evident package.
Labels and packages of medical cannabis products shall meet the
following requirements:
(1) Medical cannabis packages and labels shall not be made to be
attractive to children.
(2) All medical cannabis product labels shall include the
following information, prominently displayed and in a clear and
legible font:
(A) Manufacture date and source.
(B) The statement "SCHEDULE I CONTROLLED SUBSTANCE."
(C) The statement "KEEP OUT OF REACH OF CHILDREN AND ANIMALS" in
bold print.
(D) The statement "FOR MEDICAL USE ONLY."
(E) The statement "THE INTOXICATING EFFECTS OF THIS PRODUCT MAY BE
DELAYED BY UP TO TWO HOURS."
(F) The statement "THIS PRODUCT MAY IMPAIR THE ABILITY TO DRIVE OR
OPERATE MACHINERY. PLEASE USE EXTREME CAUTION."
(G) For packages containing only dried flower, the net weight of
medical cannabis in the package.
(H) A warning if nuts or other known allergens are used.
(I) List of pharmacologically active ingredients, including, but
not limited to, tetrahydrocannabinol (THC), cannabidiol (CBD), and
other cannabinoid content, the THC and other cannabinoid amount in
milligrams per serving, servings per package, and the THC and other
cannabinoid amount in milligrams for the package total.
(J) Clear indication, in bold type, that the product contains
medical cannabis.
(K) Identification of the source and date of cultivation and
manufacture.
(L) Any other requirement set by the State Department of Public
Health.
(M) Information associated with the unique identifier issued by
the Department of Food and Agriculture pursuant to Section 11362.777
of the Health and Safety Code.
(b) Only generic food names may be used to describe edible medical
cannabis products, pursuant to regulations promulgated by the State
Department of Public Health.
SEC. 31. Section 19350 of the Business and
Professions Code is amended to read:
19350. Each licensing authority shall establish a scale of
application, licensing, and renewal fees, based upon the cost of
enforcing this chapter, as follows:
(a) Each licensing authority shall charge each licensee a
licensure and renewal fee, as applicable. The licensure and renewal
fee shall be calculated to cover the costs of administering this
chapter. The licensure fee may vary depending upon the varying costs
associated with administering the various regulatory requirements of
this chapter as they relate to the nature and scope of the different
licensure activities, including, but not limited to, the track and
trace program required pursuant to Section 19335, but shall not
exceed the reasonable regulatory costs to the licensing authority.
(b) The total fees assessed pursuant to this chapter shall be set
at an amount that will fairly and proportionately generate sufficient
total revenue to fully cover the total costs of administering this
chapter.
(c) All state license fees shall be set on a scaled basis by the
licensing authority, dependent on the size of the business.
(d) The licensing authority shall deposit all fees collected
pursuant to this chapter in a fee account specific to that licensing
authority, to be established in the Medical Cannabis Regulation and
Safety Act Fund. Moneys in the licensing authority fee accounts shall
be used, upon appropriation of the Legislature, by the designated
licensing authority for the administration of this chapter.
(e) The fees established by licensing authorities pursuant to this
chapter shall be in addition to, and shall not limit, any fees or
taxes imposed by a city, county, or city and county in which the
licensee operates.
SEC. 32. Section 19351 of the Business and
Professions Code is amended to read:
19351. (a) The Medical Cannabis Regulation and Safety Act Fund is
hereby established within the State Treasury. Moneys in the fund
shall be available upon appropriation by the Legislature.
Notwithstanding Section 16305.7 of the Government Code, the fund
shall include any interest and dividends earned on the moneys in the
fund.
(b) (1) Funds for the establishment and support of the regulatory
activities pursuant to this chapter shall be advanced as a General
Fund or special fund loan, and shall be repaid by the initial
proceeds from fees collected pursuant to this chapter or any rule or
regulation adopted pursuant to this chapter, by January 1, 2022.
Should the initial proceeds from fees not be sufficient to repay the
loan, moneys from the Medical Cannabis Fines and Penalties Account
shall be made available to the bureau, by appropriation of the
Legislature, to repay the loan.
(2) Funds advanced pursuant to this subdivision shall be
appropriated to the bureau, which shall distribute the moneys to the
appropriate licensing authorities, as necessary to implement the
provisions of this chapter.
(3) The Director of Finance may provide an initial operating loan
from the General Fund to the Medical Cannabis Regulation and Safety
Act Fund that does not exceed ten million dollars ($10,000,000).
(c) Except as otherwise provided, all moneys collected pursuant to
this chapter as a result of fines or penalties imposed under this
chapter shall be deposited directly into the Medical Cannabis Fines
and Penalties Account, which is hereby established within the fund,
and shall be available, upon appropriation by the Legislature to the
bureau, for the purposes of funding the enforcement grant program
pursuant to subdivision (d).
(d) (1) The bureau shall establish a grant program to allocate
moneys from the Medical Cannabis Fines and Penalties Account to state
and local entities for the following purposes:
(A) To assist with medical cannabis regulation and the enforcement
of this chapter and other state and local laws applicable to
cannabis activities.
(B) For allocation to state and local agencies and law enforcement
to remedy the environmental impacts of cannabis cultivation.
(2) The costs of the grant program under this subdivision shall,
upon appropriation by the Legislature, be paid for with moneys in the
Medical Cannabis Fines and Penalties Account.
(3) The grant program established by this subdivision shall only
be implemented after the loan specified in subdivision (b) is repaid.
SEC. 33. Section 19360 of the Business and
Professions Code is amended to read:
19360. (a) A person engaging in commercial cannabis activity
without a license and associated unique identifiers required by this
chapter shall be subject to civil penalties of up to twice the amount
of the license fee for each violation, and the licensing authority,
state or local authority, or court may order the destruction of
medical cannabis associated with that violation. Each day of
operation shall constitute a separate violation of this section. All
civil penalties imposed and collected pursuant to this section shall
be deposited into the Medical Cannabis Fines and Penalties Account,
established pursuant to Section 19351, except as provided in
subdivision (b).
(b) If an action for civil penalties is brought against a licensee
pursuant to this chapter by the Attorney General, the penalty
collected shall be deposited into the Medical Cannabis Fines and
Penalties Account. If the action is brought by a district attorney or
county counsel, the penalty collected shall be paid to the treasurer
of the county in which the judgment was entered. If the action is
brought by a city attorney or city prosecutor, the penalty collected
shall be paid to the treasurer of the city or city and county in
which the judgment was entered. If the action is brought by a city
attorney and is adjudicated in a superior court located in the
unincorporated area or another city in the same county, the penalty
shall be paid one-half to the treasurer of the city in which the
complaining attorney has jurisdiction and one-half to the treasurer
of the county in which the judgment is entered.
(c) Notwithstanding subdivision (a), criminal penalties shall
continue to apply to an unlicensed person or entity engaging in
commercial cannabis activity in violation of this chapter, including,
but not limited to, those individuals covered under Section 11362.7
of the Health and Safety Code.
SEC. 34. Section 12025 of the Fish and Game
Code is amended to read:
12025. (a) In addition to any penalties imposed by any other law,
a person found to have violated the code sections described in
paragraphs (1) to (11), inclusive, in connection with the production
or cultivation of a controlled substance on land under the management
of the Department of Parks and Recreation, the Department of Fish
and Wildlife, the Department of Forestry and Fire Protection, the
State Lands Commission, a regional park district, the United States
Forest Service, or the United States Bureau of Land Management, or
within the respective ownership of a timberland production zone, as
defined in Chapter 6.7 (commencing with Section 51100) of Part 1 of
Division 1 of Title 5 of the Government Code, of more than 50,000
acres, or while trespassing on other public or private land in
connection with the production or cultivation of a controlled
substance, shall be liable for a civil penalty as follows:
(1) A person who violates Section 1602 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than ten thousand dollars ($10,000) for
each violation.
(2) A person who violates Section 5650 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than forty thousand dollars ($40,000) for
each violation.
(3) A person who violates Section 5652 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than forty thousand dollars ($40,000) for
each violation.
(4) A person who violates subdivision (a) of Section 374.3 of the
Penal Code in connection with the production or cultivation of a
controlled substance is subject to a civil penalty of not more than
forty thousand dollars ($40,000) for each violation.
(5) A person who violates paragraph (1) of subdivision (h) of
Section 374.3 of the Penal Code in connection with the production or
cultivation of a controlled substance is subject to a civil penalty
of not more than forty thousand dollars ($40,000) for each violation.
(6) A person who violates subdivision (b) of Section 374.8 of the
Penal Code in connection with the production or cultivation of a
controlled substance is subject to a civil penalty of not more than
forty thousand dollars ($40,000) for each violation.
(7) A person who violates Section 384a of the Penal Code in
connection with the production or cultivation of a controlled
substance is subject to a civil penalty of not more than ten thousand
dollars ($10,000) for each violation.
(8) A person who violates subdivision (a) of Section 4571 of the
Public Resources Code in connection with the production or
cultivation of a controlled substance is subject to a civil penalty
of not more than ten thousand dollars ($10,000) for each violation.
(9) A person who violates Section 4581 of the Public Resources
Code in connection with the production or cultivation of a controlled
substance is subject to a civil penalty of not more than ten
thousand dollars ($10,000) for each violation.
(10) A person who violates Section 2000 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than ten thousand dollars ($10,000) for
each violation.
(11) A person who violates Section 2002 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than ten thousand dollars ($10,000) for
each violation.
(b) (1) In addition to any penalties imposed by any other law, a
person found to have violated the code sections described in this
subdivision in connection with the production or cultivation of a
controlled substance on land that the person owns, leases, or
otherwise uses or occupies with the consent of the landowner shall be
liable for a civil penalty as follows:
(A) A person who violates Section 1602 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than eight thousand dollars ($8,000) for
each violation.
(B) A person who violates Section 5650 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than twenty thousand dollars ($20,000) for
each violation.
(C) A person who violates Section 5652 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than twenty thousand dollars ($20,000) for
each violation.
(D) A person who violates subdivision (a) of Section 374.3 of the
Penal Code in connection with the production or cultivation of a
controlled substance is subject to a civil penalty of not more than
twenty thousand dollars ($20,000) for each violation.
(E) A person who violates paragraph (1) of subdivision (h) of
Section 374.3 of the Penal Code in connection with the production or
cultivation of a controlled substance is subject to a civil penalty
of not more than twenty thousand dollars ($20,000) for each
violation.
(F) A person who violates subdivision (b) of Section 374.8 of the
Penal Code in connection with the production or cultivation of a
controlled substance is subject to a civil penalty of not more than
twenty thousand dollars ($20,000) for each violation.
(G) A person who violates Section 384a of the Penal Code in
connection with the production or cultivation of a controlled
substance is subject to a civil penalty of not more than ten thousand
dollars ($10,000) for each violation.
(H) A person who violates subdivision (a) of Section 4571 of the
Public Resources Code in connection with the production or
cultivation of a controlled substance is subject to a civil penalty
of not more than eight thousand dollars ($8,000) for each violation.
(I) A person who violates Section 4581 of the Public Resources
Code in connection with the production or cultivation of a controlled
substance is subject to a civil penalty of not more than eight
thousand dollars ($8,000) for each violation.
(J) A person who violates Section 2000 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than eight thousand dollars ($8,000) for
each violation.
(K) A person who violates Section 2002 in connection with the
production or cultivation of a controlled substance is subject to a
civil penalty of not more than eight thousand dollars ($8,000) for
each violation.
(2) Each day that a violation of a code section described in this
subdivision occurs or continues to occur shall constitute a separate
violation.
(c) The civil penalty imposed for each separate violation pursuant
to this section is in addition to any other civil penalty imposed
for another violation of this section, or any violation of any other
law.
(d) All civil penalties imposed or collected by a court for a
separate violation pursuant to this section shall not be considered
to be fines or forfeitures, as described in Section 13003, and shall
be apportioned in the following manner:
(1) Thirty percent shall be distributed to the county in which the
violation was committed pursuant to Section 13003. The county board
of supervisors shall first use any revenues from those penalties to
reimburse the costs incurred by the district attorney or city
attorney in investigating and prosecuting the violation.
(2) (A) Thirty percent shall be distributed to the investigating
agency to be used to reimburse the cost of any investigation directly
related to the violations described in this section.
(B) If the department receives reimbursement pursuant to this
paragraph for activities funded pursuant to subdivision (f) of
Section 4629.6 of the Public Resources Code, the reimbursement funds
shall be deposited into the Timber Regulation and Forest Restoration
Fund, created by Section 4629.3 of the Public Resources Code, if
there is an unpaid balance for a loan authorized by subdivision (f)
of Section 4629.6 of the Public Resources Code.
(3) Forty percent shall be deposited into the Timber Regulation
and Forest Restoration Fund, created by Section 4629.3 of the Public
Resources Code, and used for grants authorized pursuant to Section
4629.6 of the Public Resources Code that improve forest health by
remediating former cannabis growing operations.
(e) Civil penalties authorized pursuant to this section may be
imposed administratively by the department if all of the following
occur:
(1) The chief deputy director or law enforcement division
assistant chief in charge of cannabis-related enforcement issues a
complaint to any person or entity on which an administrative civil
penalty may be imposed pursuant to this section. The complaint shall
allege the act or failure to act that constitutes a violation, any
facts related to natural resources impacts, the provision of law
authorizing the civil penalty to be imposed, and the proposed penalty
amount.
(2) The complaint and order is served by personal notice or
certified mail and informs the party served that the party may
request a hearing not later than 20 days from the date of service. If
a hearing is requested, it shall be scheduled before the director or
his or her designee, which designee shall not be the chief deputy or
assistant chief issuing the complaint and order. A request for a
hearing shall contain a brief statement of the material facts the
party claims support his or her contention that no administrative
penalty should be imposed or that an administrative penalty of a
lesser amount is warranted. A party served with a complaint pursuant
to this subdivision waives his or her right to a hearing if a hearing
is not requested within 20 days of service of the complaint, in
which case the order imposing the administrative penalty shall become
final.
(3) The director, or his or her designee, shall control the nature
and order of hearing proceedings. Hearings shall be informal in
nature, and need not be conducted according to the technical rules
relating to evidence. The director or his or her designee shall issue
a final order within 45 days of the close of the hearing. A copy of
the final order shall be served by certified mail upon the party
served with the complaint.
(4) A party may obtain review of the final order by filing a
petition for a writ of mandate with the superior court within 30 days
of the date of service of the final order. The administrative
penalty shall be due and payable to the department within 60 days
after the time to seek judicial review has expired, or, where the
party did not request a hearing of the order, within 20 days after
the order imposing an administrative penalty becomes final.
(5) The department may adopt regulations to implement this
subdivision.
(f) All administrative penalties imposed or collected by the
department for a separate violation pursuant to this section shall
not be considered to be fines or forfeitures, as described in Section
13003, and shall be deposited into the Timber Regulation and Forest
Restoration Fund, created by Section 4629.3 of the Public Resources
Code, to repay any unpaid balance of a loan authorized by subdivision
(f) of Section 4629.6 of the Public Resources Code. Any remaining
funds from administrative penalties collected pursuant to this
section shall be apportioned in the following manner:
(1) Fifty percent shall be deposited into the Timber Regulation
and Forest Restoration Fund for grants authorized pursuant to
subdivision (h) of Section 4629.6 of the Public Resources Code, with
priority given to grants that improve forest health by remediating
former cannabis growing operations.
(2) Fifty percent shall be deposited into the Fish and Game
Preservation Fund.
(g) Any civil penalty imposed pursuant to this section for the
violation of an offense described in paragraph (4), (5), or (6) of
subdivision (a) or subparagraph (D), (E), or (F) of paragraph (1) of
subdivision (b) for which the person was convicted shall be offset by
the amount of any restitution ordered by a criminal court.
(h) For purposes of this section, "controlled substance" has the
same meaning as defined in Section 11007 of the Health and Safety
Code.
(i) This section does not apply to any activity in full compliance
with the Medical Cannabis Regulation and Safety Act (Chapter 3.5
(commencing with Section 19300) of Division 8 of the Business and
Professions Code).
SEC. 35. Section 12029 of the Fish and Game
Code is amended to read:
12029. (a) The Legislature finds and declares all of the
following:
(1) The environmental impacts associated with cannabis cultivation
have increased, and unlawful water diversions for cannabis
irrigation have a detrimental effect on fish and wildlife and their
habitat, which are held in trust by the state for the benefit of the
people of the state.
(2) The remediation of existing cannabis cultivation sites is
often complex and the permitting of these sites requires greater
department staff time and personnel expenditures. The potential for
cannabis cultivation sites to significantly impact the state's fish
and wildlife resources requires immediate action on the part of the
department's lake and streambed alteration permitting staff.
(b) In order to address unlawful water diversions and other
violations of the Fish and Game Code associated with cannabis
cultivation, the department shall establish the watershed enforcement
program to facilitate the investigation, enforcement, and
prosecution of these offenses.
(c) The department, in
coordination with the State Water Resources Control Board, shall
establish a permanent multiagency task force to address the
environmental impacts of cannabis cultivation. The multiagency task
force, to the extent feasible and subject to available resources,
shall expand its enforcement efforts on a statewide level to ensure
the reduction of adverse impacts of cannabis cultivation on fish and
wildlife and their habitats throughout the state.
(d) In order to facilitate the remediation and permitting of
cannabis cultivation sites, the department shall adopt regulations to
enhance the fees on medical-cannabis-cultivation-related activities
subject to Section 1602 for cannabis cultivation sites that require
remediation. The fee schedule established pursuant to this
subdivision shall not exceed the fee limits in Section 1609.
SEC. 19. Section 19341 of the Business
and Professions Code is amended to read:
19341. The State Department of Public Health shall promulgate
regulations governing the licensing of manufacturers. The State
Department of Public Health shall establish minimum security
requirements for the storage of medical cannabis products at the
manufacturing site. The State Department of Public Health shall
develop standards for the manufacturing and labeling of all
manufactured medical cannabis products. Licenses to be issued are as
follows:
(a) "Manufacturing level 1," for manufacturing sites that produce
medical cannabis products using nonvolatile solvents.
(b) "Manufacturing level 2," for manufacturing sites that produce
medical cannabis products using volatile solvents. The State
Department of Public Health shall limit the number of licenses of
this type.
SEC. 20. Section 19344 of the Business
and Professions Code is amended to read:
19344. (a) A testing laboratory shall issue a certificate of
analysis for each lot, with supporting data, to report both of the
following:
(1) Whether the chemical profile of the lot conforms to the
specifications of the lot for compounds, including, but not limited
to, all of the following, unless limited through regulation by the
bureau:
(A) Tetrahydrocannabinol (THC).
(B) Tetrahydrocannabinolic Acid (THCA).
(C) Cannabidiol (CBD).
(D) Cannabidiolic Acid (CBDA).
(E) Terpenes required by the bureau in a regulation.
(F) Cannabigerol (CBG).
(G) Cannabinol (CBN).
(H) Any other compounds or contaminants required by the bureau.
(2) That the presence of contaminants does not exceed the levels
set by the bureau. In setting the levels, the bureau shall consider
the American Herbal Pharmacopoeia monograph, guidelines set by the
Department of Pesticide Regulation pursuant to subdivision (b) of
Section 19332, and any other relevant sources.
sources, including, but not limited to:
(A) Residual solvent or processing chemicals.
(B) Foreign material, including, but not limited to, hair,
insects, or similar or related adulterant.
(C) Microbiological impurities as identified by the bureau in
regulation.
(b) Residual levels of volatile organic compounds shall be below
the lesser of either the specifications set by the
United States Pharmacopeia (U.S.P. Chapter 467) or those
set by the bureau.
(c) The bureau shall conduct periodic audits of the results of
testing laboratories to verify their accuracy.
SEC. 21. Section 19345 of the Business
and Professions Code is amended to read:
19345. (a) Except as provided in this chapter, a licensed
testing laboratory shall not acquire or receive medical
cannabis or medical cannabis products except from a licensee in
accordance with this chapter, and shall not distribute,
sell, deliver, transfer, transport, or dispense
transfer or transport medical cannabis or medical cannabis
products, from the licensed premises the medical cannabis or medical
cannabis products were acquired or received. All transfer or
transportation shall be performed pursuant to a specified chain of
custody protocol.
(b) A licensed testing laboratory may receive and test
samples of medical cannabis or medical cannabis products from a
qualified patient or primary caregiver only if he or she presents his
or her valid recommendation for cannabis for medical purposes from a
physician. A licensed testing laboratory shall not
certify samples from a qualified patient or caregiver for resale or
transfer to another party or licensee. All tests performed by a
licensed testing laboratory for a qualified patient or
caregiver shall be recorded with the name of the qualified patient or
caregiver and the amount of medical cannabis or medical cannabis
product received.
(c) The bureau shall develop procedures related to all of the
following:
(1) Ensuring that testing of medical cannabis and medical cannabis
products occurs prior to delivery transport
to dispensaries or any other business.
(2) Specifying how often licensees shall test medical cannabis and
medical cannabis products.
(3) Requiring the destruction of harvested batches whose testing
samples indicate noncompliance with health and safety standards
required by state law, unless remedial measures can bring the medical
cannabis or medical cannabis products into compliance with quality
assurance standards as specified by state law.
(d) Cultivators and manufacturers shall pay all costs related to
and associated with the testing of medical cannabis and medical
cannabis products required by this chapter.
SEC. 22. Section 19350 of the Business
and Professions Code is amended to read:
19350. Each licensing authority shall establish a scale of
application, licensing, and renewal fees, based upon the cost of
enforcing this chapter, as follows:
(a) Each licensing authority shall charge each licensee a
licensure and renewal fee, as applicable. The licensure and renewal
fee shall be calculated to cover the costs of administering this
chapter. The licensure fee may vary depending upon the varying costs
associated with administering the various regulatory requirements of
this chapter as they relate to the nature and scope of the different
licensure activities, including, but not limited to, the track and
trace program required pursuant to Section 19335, but shall not
exceed the reasonable regulatory costs to the licensing authority.
(b) The total fees assessed pursuant to this chapter shall be set
at an amount that will fairly and proportionately generate sufficient
total revenue to fully cover the total costs of administering this
chapter.
(c) All license fees shall be set on a scaled basis by the
licensing authority, dependent on the size of the business. License
fees shall cover the costs of administering the track and trace
program managed by the Department of Food and Agriculture, as
identified in Article 7.5 (commencing with Section 19335).
(d) The licensing authority shall deposit all fees collected in a
fee account specific to that licensing authority, to be established
in the Medical Cannabis Regulation and Safety Act Fund. Moneys in the
licensing authority fee accounts shall be used, upon appropriation
of the Legislature, by the designated licensing authority for the
administration of this chapter.
(e) The fees established by licensing authorities pursuant to this
chapter shall be in addition to, and shall not limit, any fees or
taxes imposed by a city, county, or city and county in which the
licensee operates.
SEC. 23. Section 19351 of the Business
and Professions Code is amended to read:
19351. (a) The Medical Cannabis Regulation and Safety Act Fund is
hereby established within the State Treasury. Moneys in the fund
shall be available upon appropriation by the Legislature.
Notwithstanding Section 16305.7 of the Government Code, the fund
shall include any interest and dividends earned on the moneys in the
fund.
(b) (1) Funds for the establishment and support of the regulatory
activities pursuant to this chapter shall be advanced as a General
Fund or special fund loan, and shall be repaid by the initial
proceeds from fees collected pursuant to this chapter or any rule or
regulation adopted pursuant to this chapter, by January 1, 2022.
Should the initial proceeds from fees not be sufficient to repay the
loan, moneys from the Medical Cannabis Fines and Penalties Account
shall be made available to the bureau, by appropriation of the
Legislature, to repay the loan.
(2) Funds advanced pursuant to this subdivision shall be
appropriated to the bureau, which shall distribute the moneys to the
appropriate licensing authorities, as necessary to implement the
provisions of this chapter.
(3) The Director of Finance may provide an initial operating loan
from the General Fund to the Medical Cannabis Regulation and Safety
Act Fund that does not exceed ten million dollars ($10,000,000).
(c) Except as otherwise provided, all moneys collected pursuant to
this chapter as a result of fines or penalties imposed under this
chapter shall be deposited directly into the Medical Cannabis Fines
and Penalties Account, which is hereby established within the fund,
and shall be available, upon appropriation by the Legislature to the
bureau, for the purposes of funding the enforcement grant program
pursuant to subdivision (d).
(d) (1) The bureau shall establish a grant program to allocate
moneys from the Medical Cannabis Fines and Penalties Account to state
and local entities for the following purposes:
(A) To assist with medical cannabis regulation and the enforcement
of this chapter and other state and local laws applicable to
cannabis activities.
(B) For allocation to state and local agencies and law enforcement
to remedy the environmental impacts of cannabis cultivation.
(2) The costs of the grant program under this subdivision shall,
upon appropriation by the Legislature, be paid for with moneys in the
Medical Cannabis Fines and Penalties Account.
(3) The grant program established by this subdivision shall only
be implemented after the loan specified in this section
subdivision (b) is repaid.
SEC. 24. Section 19360 of the Business
and Professions Code is amended to read:
19360. (a) A person engaging in commercial cannabis activity
without a license and associated unique identifiers required by this
chapter shall be subject to civil penalties of up to twice the amount
of the license fee for each violation, and the department, state or
local authority, or court may order the destruction of medical
cannabis associated with that violation. A violator shall be
responsible for the cost of the destruction of medical cannabis
associated with his or her violation, in addition to any amount
covered by a bond required as a condition of licensure. Each day of
operation shall constitute a separate violation of this section. All
civil penalties imposed and collected pursuant to this section by a
licensing authority shall be deposited into the Medical Cannabis
Fines and Penalties Account established pursuant to Section
19351. 19351, except as provided in subdivision (b).
(b) If an action for civil penalties is brought against a licensee
pursuant to this chapter by the Attorney General on behalf of the
people, the penalty collected shall be deposited into the Medical
Cannabis Fines and Penalties Account. If the action is brought by a
district attorney or county counsel, the penalty collected shall be
paid to the treasurer of the county in which the judgment was
entered. If the action is brought by a city attorney or city
prosecutor, the penalty collected shall be paid to the treasurer of
the city or city and county in which the judgment was entered. If the
action is brought by a city attorney and is adjudicated in a
superior court located in the unincorporated area or another city in
the same county, the penalty shall be paid one-half to the treasurer
of the city in which the complaining attorney has jurisdiction and
one-half to the treasurer of the county in which the judgment is
entered.
(c) Notwithstanding subdivision (a), criminal penalties shall
continue to apply to an unlicensed person or entity engaging in
commercial cannabis activity in violation of this chapter,
including, but not limited to, those individuals covered under
Section 11362.7 of the Health and Safety Code.
SEC. 25. Section 12029 of the Fish and
Game Code is amended to read:
12029. (a) The Legislature finds and declares all of the
following:
(1) The environmental impacts associated with cannabis cultivation
have increased, and unlawful water diversions for cannabis
irrigation have a detrimental effect on fish and wildlife and their
habitat, which are held in trust by the state for the benefit of the
people of the state.
(2) The remediation of existing cannabis cultivation sites is
often complex and the permitting of these sites requires greater
department staff time and personnel expenditures. The potential for
cannabis cultivation sites to significantly impact the state's fish
and wildlife resources requires immediate action on the part of the
department's lake and streambed alteration permitting staff.
(b) In order to address unlawful water diversions and other
violations of the Fish and Game Code associated with cannabis
cultivation, the department shall establish the watershed enforcement
program to facilitate the investigation, enforcement, and
prosecution of these offenses.
(c) The department, in coordination with the State Water Resources
Control Board and the Department of Food and Agriculture, shall
establish a permanent multiagency task force to address the
environmental impacts of cannabis cultivation. The multiagency task
force, to the extent feasible and subject to available resources,
shall expand its enforcement efforts on a statewide level to ensure
the reduction of adverse impacts of cannabis cultivation on fish and
wildlife and their habitats throughout the state.
(d) In order to facilitate the remediation and permitting of
cannabis cultivation sites, the department may adopt regulations to
enhance the fees on any entity medical
cannabis cultivation related activities subject to Section 1602
for cannabis cultivation sites that require remediation. The fee
schedule established pursuant to this subdivision shall not exceed
the fee limits in Section 1609.
SEC. 36. SEC. 26. Section 52334 of
the Food and Agricultural Code is amended to read:
52334. (a) Notwithstanding any other law, on and after January 1,
2015, a city, county, or district, including a charter city or
county, shall not adopt or enforce an ordinance that regulates
plants, crops, or seeds without the consent of the secretary. An
ordinance enacted before January 1, 2015, shall be considered part of
the comprehensive program of the department and shall be
enforceable.
(b) An ordinance that regulates cannabis or marijuana as defined
in subdivision (f) of Section 19300.5 of the Business and Professions
Code, or medical cannabis or medical marijuana, as defined in
subdivision (ag) of Section 19300.5 of the Business and Professions
Code, shall not require the consent of the secretary.
SEC. 37. SEC. 27. Section 11362.765
of the Health and Safety Code is amended to read:
11362.765. (a) Subject to the requirements of this article, the
individuals specified in subdivision (b) shall not be subject, on
that sole basis, to criminal liability under Section 11357, 11358,
11359, 11360, 11366, 11366.5, or 11570. However, nothing in this
section shall authorize the individual to smoke or otherwise consume
cannabis unless otherwise authorized by this article, nor shall
anything in this section authorize any individual or group to
cultivate or distribute cannabis in any manner other than as set
forth in this article, the Medical Cannabis Regulation and Safety Act
(Chapter 3.5 (commencing with Section 19300) of Division 8 of the
Business and Professions Code), or as described in the Compassionate
Use Act of 1996.
(b) Subdivision (a) shall apply to all of the following:
(1) A qualified patient or a person with an identification card
who transports or processes cannabis for his or her own personal
medical use.
(2) A designated primary caregiver who transports, processes,
administers, delivers, or gives away cannabis for medical purposes,
in amounts not exceeding those established in subdivision (a) of
Section 11362.77, only to the qualified patient of the primary
caregiver, or to the person with an identification card who has
designated the individual as a primary caregiver.
(3) An individual who provides assistance to a qualified patient
or a person with an identification card, or his or her designated
primary caregiver, in administering medical cannabis to the qualified
patient or person or acquiring the skills necessary to cultivate or
administer cannabis for medical purposes to the qualified patient or
person.
(c) A primary caregiver who receives compensation for actual
expenses, including reasonable compensation incurred for services
provided to an eligible qualified patient or person with an
identification card to enable that person to use cannabis under this
article, or for payment for out-of-pocket expenses incurred in
providing those services, or both, shall not, on the sole basis of
that fact, be subject to prosecution or punishment under Section
11359 or 11360.
SEC. 38. Section 11362.775 of the Health and
Safety Code is amended to read:
11362.775. (a) Subject to subdivision (d), 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
collectively or cooperatively to cultivate cannabis for medical
purposes, shall not solely on the basis of that fact be subject to
state criminal sanctions under Section 11357, 11358, 11359, 11360,
11366, 11366.5, or 11570. A collective or cooperative that operates
pursuant to this section may operate for profit, not for profit, or
any combination thereof. A collective or cooperative that operates
for profit shall only retain the protections of this section if it
possesses a valid, Board of Equalization-issued sellers permit and a
valid local license, permit, or other authorization.
(b) (1) It is unlawful for 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 in order collectively or cooperatively to
cultivate cannabis for medical purposes, to submit for placement an
advertisement that fails to include in the text of the advertisement
the collective or cooperative's valid State Board of Equalization
issued seller's permit number.
(2) A violation of this subdivision is an infraction, punishable
by a fine of five hundred dollars ($500).
(3) For purposes of this section, "advertisement" means a notice,
announcement, or information in a public medium, including, but not
limited to, television, Internet Web site, billboard, or printed
publication, that promotes a location where medical cannabis is sold
or dispensed or a service that is involved in the delivery of medical
cannabis.
(c) A collective or cooperative that operates pursuant to this
section and manufactures medical cannabis products shall not, solely
on the basis of that fact, be subject to state criminal sanctions
under Section 11379.6 if the collective or cooperative abides by all
of the following requirements:
(1) Utilizes only nonvolatile solvents, as provided in the Medical
Cannabis Regulation and Safety Act (Chapter 3.5 (commencing with
Section 19300) of Division 8 of the Business and Professions Code) or
any regulations adopted pursuant to that act.
(2) Is in possession of a valid sellers permit issued by the State
Board of Equalization.
(3) Is in possession of a valid local license, permit, or other
authorization specific to the manufacturing of medical cannabis
products.
(4) For purposes of this subdivision, "manufacturing" includes
compounding, converting, producing, deriving, processing, or
preparing, either directly or indirectly by chemical extraction or
independently by means of chemical synthesis, medical cannabis
products.
(d) This section shall remain in effect only until one year after
the Bureau of Medical Cannabis Regulation posts a notice on its
Internet Web site that the licensing authorities have commenced
issuing licenses pursuant to the Medical Cannabis Regulation and
Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8
of the Business and Professions Code), and is repealed upon that
date.
SEC. 39. Section 11362.777 of the Health and
Safety Code is amended to read:
11362.777. (a) The Department of Food and Agriculture shall
establish a Medical Cannabis Cultivation Program to be administered
by the secretary and, except as specified in subdivision (c), shall
administer this section as it pertains to the cultivation of medical
cannabis. For purposes of this section and Chapter 3.5 (commencing
with Section 19300) of Division 8 of the Business and Professions
Code, medical cannabis is an agricultural product.
(b) (1) A person or entity shall not cultivate medical cannabis
without first obtaining both of the following:
(A) A license, permit, or other entitlement, specifically
permitting cultivation pursuant to these provisions, from the city,
county, or city and county in which the cultivation will occur.
(B) A state license issued by the department pursuant to this
section.
(2) A person or entity shall not submit an application for a state
license pursuant to this section unless that person or entity has
received a license, permit, or other entitlement, specifically
permitting cultivation pursuant to these provisions, from the city,
county, or city and county in which the cultivation will occur.
(3) A person or entity shall not submit an application for a state
license pursuant to this section if the proposed cultivation of
cannabis will violate the provisions of a local ordinance or
regulation, or if medical cannabis is prohibited by the city, county,
or city and county in which the cultivation is proposed to occur,
either expressly or otherwise under principles of permissive zoning.
(c) (1) Except as otherwise specified in this subdivision, and
without limiting any other local regulation, a city, county, or city
and county, through its current or future land use regulations or
ordinance, may issue or deny a permit to cultivate medical cannabis
pursuant to this section. A city, county, or city and county may
inspect the intended cultivation site for suitability before issuing
a permit. After the city, county, or city and county has approved a
permit, the applicant shall apply for a state medical cannabis
cultivation license from the department. A locally issued cultivation
permit shall only become active upon licensing by the department and
receiving final local approval. A person shall not cultivate medical
cannabis before obtaining both a license or permit from the city,
county, or city and county and a state medical cannabis cultivation
license from the department.
(2) A city, county, or city and county that issues or denies
conditional licenses to cultivate medical cannabis pursuant to this
section shall notify the department in a manner prescribed by the
secretary.
(3) A city, county, or city and county's locally issued
conditional permit requirements must be at least as stringent as the
department's state licensing requirements.
(d) (1) The secretary may prescribe, adopt, and enforce
regulations relating to the implementation, administration, and
enforcement of this section, including, but not limited to, applicant
requirements, collections, reporting, refunds, and appeals.
(2) The secretary may prescribe, adopt, and enforce any emergency
regulations as necessary to implement this section. An emergency
regulation prescribed, adopted, or enforced pursuant to this section
shall be adopted in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, and, for purposes of that chapter, including Section 11349.6 of
the Government Code, the adoption of the regulation is an emergency
and shall be considered by the Office of Administrative Law as
necessary for the immediate preservation of the public peace, health
and safety, and general welfare.
(3) The secretary may enter into a cooperative agreement with a
county agricultural commissioner to carry out the provisions of this
section, including, but not limited to, administration,
investigations, inspections, licensing and assistance pertaining to
the cultivation of medical cannabis. Compensation under the
cooperative agreement shall be paid from assessments and fees
collected and deposited pursuant to this section and shall provide
reimbursement to the county agricultural commissioner for associated
costs.
(e) (1) The department, in consultation with, but not limited to,
the Bureau of Medical Cannabis Regulation, the State Water Resources
Control Board, and the Department of Fish
and Wildlife, shall implement a unique identification
program for medical cannabis. In implementing the program, the
department shall consider issues, including, but not limited to,
water use and environmental impacts. In implementing the program, the
department shall ensure that:
(A) 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.
(B) Cultivation will not negatively impact springs, riparian
wetlands, and aquatic habitats.
(2) The department shall establish a program for the
identification of permitted medical cannabis plants at a cultivation
site during the cultivation period. The unique identifier shall be
attached at the base of each plant. A unique identifier, such as, but
not limited to, a zip tie, shall be issued for each medical cannabis
plant.
(A) Unique identifiers shall only be issued to those persons
appropriately licensed by this section.
(B) Information associated with the assigned unique identifier and
licensee shall be included in the trace and track program specified
in Section 19335 of the Business and Professions Code.
(C) The department may charge a fee to cover the reasonable costs
of issuing the unique identifier and monitoring, tracking, and
inspecting each medical cannabis plant.
(3) The department shall take adequate steps to establish
protections against fraudulent unique identifiers and limit illegal
diversion of unique identifiers to unlicensed persons.
(f) (1) A city, county, or city and county that issues or denies
licenses, permits, or other entitlements to cultivate medical
cannabis pursuant to this section shall notify the department in a
manner prescribed by the secretary.
(2) Unique identifiers and associated identifying information
administered by a city, county, or city and county shall adhere to
the requirements set by the department and be the equivalent to those
administered by the department.
(g) This section does not apply to a qualified patient cultivating
cannabis pursuant to Section 11362.5 if the area he or she uses to
cultivate cannabis does not exceed 100 square feet and he or she
cultivates cannabis for his or her personal medical use and does not
sell, distribute, donate, or provide cannabis to any other person or
entity. This section does not apply to a primary caregiver
cultivating cannabis pursuant to Section 11362.5 if the area he or
she uses to cultivate cannabis does not exceed 500 square feet and he
or she cultivates cannabis exclusively for the personal medical use
of no more than five specified qualified patients for whom he or she
is the primary caregiver within the meaning of Section 11362.7 and
does not receive remuneration for these activities, except for
compensation provided in full compliance with subdivision (c) of
Section 11362.765. For purposes of this section, the area used to
cultivate cannabis shall be measured by the aggregate area of
vegetative growth of live cannabis plants on the premises. Exemption
from the requirements of this section does not limit or prevent a
city, county, or city and county from exercising its police authority
under Section 7 of Article XI of the California Constitution.
SEC. 28. Section 11362.775 of the
Health and Safety Code is amended to read:
11362.775. (a) Subject to subdivision (b),
(d), 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 collectively or cooperatively to cultivate
cannabis for medical purposes, shall not solely on the basis of that
fact be subject to state criminal sanctions under Section 11357,
11358, 11359, 11360, 11366, 11366.5, or 11570. A collective or
cooperative that operates pursuant to this section may operate for
profit, not for profit, or any combination thereof. A
collective or cooperative that operates for profit shall only retain
the protections of this section if it possesses a valid, State Board
of Equalization-issued seller 's permit and a valid local
license, permit, or other authorization.
(b) (1) It is unlawful for 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 in order collectively or cooperatively to
cultivate cannabis for medical purposes, to submit for placement an
advertisement that fails to include in the text of the advertisement
the collective's or cooperative's valid State Board of
Equalization-issued seller's permit number.
(2) A violation of this subdivision is an infraction, punishable
by a fine of five hundred dollars ($500) for the first violation and
one thousand dollars ($1,000) for each subsequent violation. Actions
pursuant to this section may be brought by the Attorney General in
the name of the people of the state, by a district attorney, by a
city attorney, or by a city prosecutor in a city or city and county
having a full-time prosecutor.
(3) For purposes of this section, "advertisement" means a notice,
announcement, or information in a public medium, including, but not
limited to, television, Internet Web site, billboard, or printed
publication, that promotes a location where medical cannabis is sold
or dispensed or a service that is involved in the delivery of medical
cannabis.
(c) A collective or cooperative that operates pursuant to this
section and manufactures medical cannabis products shall not, solely
on the basis of that fact, be subject to state criminal sanctions
under Section 11379.6 if the collective or cooperative abides by all
of the following requirements:
(1) Utilizes only manufacturing processes that are either
solventless or employ only nonflammable, nontoxic, food grade
solvents as provided in the Medical Cannabis Regulation and Safety
Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the
Business and Professions Code) or pursuant to any regulations
adopted pursuant to that act.
(2) Is in possession of a valid seller's permit issued by the
State Board of Equalization.
(3) Is in possession of a valid local license, permit, or other
authorization specific to the manufacturing of medical cannabis
products.
(4) For purposes of this subdivision, "manufacturing" includes
compounding, converting, producing, deriving, processing, or
preparing, either directly or indirectly by chemical extraction or
independently by means of chemical synthesis, medical cannabis
products.
(b)
(d) This section shall remain in effect only until one
year after the Bureau of Medical Cannabis Regulation posts a notice
on its Internet Web site that the licensing authorities have
commenced issuing licenses pursuant to the Medical Cannabis
Regulation and Safety Act (Chapter 3.5 (commencing with Section
19300) of Division 8 of the Business and Professions Code).
(c)
(e) This section is repealed one year after the date
upon which the notice is posted pursuant to subdivision (b).
(d).
SEC. 29. Section 11362.777 of the
Health and Safety Code is amended to read:
11362.777. (a) The Department of Food and Agriculture shall
establish a Medical Cannabis Cultivation Program to be administered
by the secretary and, except as specified in subdivision (c), shall
administer this section as it pertains to the commercial cultivation
of medical cannabis. For purposes of this section and Chapter 3.5
(commencing with Section 19300) of Division 8 of the Business and
Professions Code, medical cannabis is an agricultural product.
(b) (1) A person or entity shall not cultivate medical cannabis
without first obtaining both of the following:
(A) A license, permit, or other entitlement, specifically
permitting cultivation pursuant to these provisions, from the city,
county, or city and county in which the cultivation will occur.
(B) A state license issued by the department pursuant to this
section.
(2) A person or entity shall not submit an application for a state
license pursuant to this section unless that person or entity has
received a license, permit, or other entitlement, specifically
permitting cultivation pursuant to these provisions, from the city,
county, or city and county in which the cultivation will occur.
(3) A person or entity shall not submit an application for a state
license pursuant to this section if the proposed cultivation of
cannabis will violate the provisions of any local ordinance or
regulation, or if medical cannabis is prohibited by the city, county,
or city and county in which the cultivation is proposed to occur,
either expressly or otherwise under principles of permissive zoning.
(c) (1) Except as otherwise specified in this subdivision, and
without limiting any other local regulation, a city, county, or city
and county, through its current or future land use regulations or
ordinance, may issue or deny a permit to cultivate medical cannabis
pursuant to this section. A city, county, or city and county may
inspect the intended cultivation site for suitability before issuing
a permit. After the city, county, or city and county has approved a
permit, the applicant shall apply for a state medical cannabis
cultivation license from the department. A locally issued cultivation
permit shall only become active upon licensing by the department and
receiving final local approval. A person shall not cultivate medical
cannabis before obtaining both a permit a
license, permit, or other authorization from the city, county,
or city and county and a state medical cannabis cultivation license
from the department.
(2) A city, county, or city and county that issues or denies
conditional licenses to cultivate medical cannabis pursuant to this
section shall notify the department in a manner prescribed by the
secretary.
(3) A city, county, or city and county's locally issued
conditional permit requirements must be at least as stringent as the
department's state licensing requirements.
(d) (1) The secretary may prescribe, adopt, and enforce
regulations relating to the implementation, administration, and
enforcement of this part, section,
including, but not limited to, applicant requirements, collections,
reporting, refunds, and appeals.
(2) The secretary may prescribe, adopt, and enforce any emergency
regulations as necessary to implement this part.
section. Any emergency regulation prescribed, adopted, or
enforced pursuant to this section shall be adopted in accordance with
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code, and, for purposes of that chapter,
including Section 11349.6 of the Government Code, the adoption of
the regulation is an emergency and shall be considered by the Office
of Administrative Law as necessary for the immediate preservation of
the public peace, health and safety, and general welfare.
(3) The secretary may enter into a cooperative agreement with a
county agricultural commissioner to carry out the provisions of this
chapter, section, including, but not
limited to, administration, investigations, inspections, licensing
and assistance pertaining to the cultivation of medical cannabis.
Compensation under the cooperative agreement shall be paid from
assessments and fees collected and deposited pursuant to this
chapter section and shall provide reimbursement
to the county agricultural commissioner for associated costs.
(e) (1) The department, in consultation with, but not limited to,
the Bureau of Medical Cannabis Regulation, the State Water Resources
Control Board, and the Department of Fish and Wildlife, shall
implement a unique identification program for medical cannabis. In
implementing the program, the department shall consider issues,
including, but not limited to, water use and environmental impacts.
In implementing the program, the department shall ensure compliance
with Section 19332.2 of the Business and Professions Code.
(2) The department shall establish a program for the
identification of permitted medical cannabis plants at a cultivation
site during the cultivation period. The unique identifier shall be
attached at the base of each plant. A unique identifier, such as, but
not limited to, a zip tie, shall be issued for each medical cannabis
plant.
(A) Unique identifiers will only be issued to those persons
appropriately licensed by this section.
(B) Information associated with the assigned unique identifier and
licensee shall be included in the trace and track program specified
in Section 19335 of the Business and Professions Code.
(C) The department may charge a fee to cover the reasonable costs
of issuing the unique identifier and monitoring, tracking, and
inspecting each medical cannabis plant.
(D) The department may promulgate regulations to implement this
section.
(3) The department shall take adequate steps to establish
protections against fraudulent unique identifiers and limit illegal
diversion of unique identifiers to unlicensed persons.
(f) (1) A city, county, or city and county that issues or denies
licenses, permits, or other entitlements to cultivate medical
cannabis pursuant to this section shall notify the department in a
manner prescribed by the secretary.
(2) Unique identifiers and associated identifying information
administered by a city, county, or city and county shall adhere to
the requirements set by the department and be the equivalent to those
administered by the department.
(g) This section does not apply to a qualified patient cultivating
cannabis pursuant to Section 11362.5 if the area he or she uses to
cultivate cannabis does not exceed 100 square feet and he or she
cultivates cannabis for his or her personal medical use and does not
sell, distribute, donate, or provide cannabis to any other person or
entity. This section does not apply to a primary caregiver
cultivating cannabis pursuant to Section 11362.5 if the area he or
she uses to cultivate cannabis does not exceed 500 square feet and he
or she cultivates cannabis exclusively for the personal medical use
of no more than five specified qualified patients for whom he or she
is the primary caregiver within the meaning of Section 11362.7 and
does not receive remuneration for these activities, except for
compensation provided in full compliance with subdivision (c) of
Section 11362.765. For purposes of this section, the area used to
cultivate cannabis shall be measured by the aggregate area of
vegetative growth of live cannabis plants on the premises. Exemption
from the requirements of this section does not limit or prevent a
city, county, or city and county from exercising its police authority
under Section 7 of Article XI of the California Constitution.
SEC. 40. SEC. 30. No reimbursement
is required by this act pursuant to Section 6 of Article XIII B of
the California Constitution because the only costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or
infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution.
