Bill Text: CA AB1610 | 2023-2024 | Regular Session | Amended

California Assembly Bill 1610

Bill Title: Cannabis: Department of Cannabis Control.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2023-07-06 - In committee: Set, second hearing. Hearing canceled at the request of author. [AB1610 Detail]

Download: California-2023-AB1610-Amended.html

Amended IN Senate July 05, 2023

Amended IN Assembly March 23, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 1610

Introduced by Assembly Member Jones-Sawyer

February 17, 2023

An act to amend Sections 26039.1, 26100, and 26110 of the Business and Professions Code, relating to cannabis.

LEGISLATIVE COUNSEL'S DIGEST

AB 1610, as amended, Jones-Sawyer. Cannabis: Department of Cannabis Control.

Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities.

Existing law establishes the Department of Cannabis Control within the Business, Consumer Services, and Housing Agency. Under existing law, the department is under the supervision and control of a director who is appointed by the Governor, subject to confirmation by the Senate.

AUMA authorizes the Legislature to amend by majority vote certain provisions of the act to implement specified substantive provisions, provided that the amendments are consistent with and further the purposes and intent of AUMA.

Existing law authorizes the department to issue a mandatory recall order and to require the licensee to immediately cease distribution of cannabis or a cannabis product and recall the cannabis or cannabis product, as specified. MAUCRSA prohibits cannabis and cannabis products from being sold unless a representative sample of specified batches has been tested by a licensed testing laboratory. Existing law subjects cannabis batches to quality assurance standards and testing prior to sale at a retailer, microbusiness, or nonprofit licensed as specified.

This bill would require the department to maintain on its internet website a record of all recall orders issued, as specified. The bill would require a testing laboratory to be subject to blind proficiency testing to ensure consistency of results across laboratories and would require the department, on or before January 1, 2025, to establish a standard laboratory blind proficiency test method, including standardized operating procedures, to be utilized by all testing laboratories. The bill would also subject testing laboratories to ~~annual~~ biennial, in-person audits by the department and would require the results of those audits to be posted on the department’s internet ~~website, as specified.~~ website. The bill would require the department, on or before January 1, 2025, to establish standard operating procedures for conducting audits, including frequency, manner, and notification requirements. This bill would require the department, on or before January 1, 2025, to establish quality assurance standards and testing procedures for products available for retail sale, as specified, to ensure consistency with presale laboratory ~~testing.~~ testing, and would authorize inspections of licensed retail premises for these purposes.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

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

SECTION 1.

Section 26039.1 of the Business and Professions Code is amended to read:

26039.1.

(a) When the department has evidence that cannabis or a cannabis product is adulterated or misbranded, the department shall notify the licensee. The licensee may conduct a voluntary recall of the affected cannabis or cannabis product and may remediate the cannabis or cannabis product, if approved by the department, or shall destroy the affected cannabis or cannabis product under the supervision of the department.

(b) The department may issue a mandatory recall order and require the licensee to immediately cease distribution of cannabis or a cannabis product and recall the cannabis or cannabis product if the department determines both of the following:

(1) The cultivation, manufacture, distribution, or sale of the cannabis or cannabis product creates or poses an immediate and serious threat to human life or health.

(2) Other procedures available to the department to remedy or prevent the occurrence of the situation would result in an unreasonable delay.

(c) The department shall provide the licensee an opportunity for an informal proceeding on the matter, as determined by the department, within five days, on the actions required by the order and on why the cannabis or cannabis product should not be recalled. Following the proceeding, the order shall be affirmed, modified, or set aside as determined appropriate by the department.

(d) The department’s powers set forth in this section expressly include the power to order movement, segregation, isolation, or destruction of cannabis or cannabis products, as well as the power to hold cannabis or cannabis products in place.

(e) If the department determines it is necessary, it may issue the mandatory recall order, may conduct the recall, and may use all appropriate measures to obtain reimbursement from the licensee for any and all costs associated with these orders. All funds obtained by the department from these efforts shall be deposited in the Cannabis Control Fund, and shall be available for use by the department upon appropriation by the Legislature.

(f) It is unlawful to move or allow to be moved cannabis or a cannabis product subject to an order issued pursuant to this section unless that person has first obtained written authorization from the department.

(g) The department shall maintain on its internet website a record of all recall orders ~~issued in the preceding ____ years.~~ it has issued. The record shall include for each instance the following information: the date, location, licensee name and license number, and whether the recall was voluntary or mandatory.

SEC. 2.

Section 26100 of the Business and Professions Code is amended to read:

26100.

(a) Except as otherwise provided by law, cannabis or cannabis products shall not be sold pursuant to a license provided for under this division unless a representative sample of the cannabis or cannabis products has been tested by a licensed testing laboratory.

(b) The department shall develop criteria to determine which batches shall be tested. All testing of the samples shall be performed on the final form in which the cannabis or cannabis product will be consumed or used.

(c) Testing of batches to meet the requirements of this division shall only be conducted by a licensed testing laboratory.

(d) For each batch tested, the testing laboratory shall issue a certificate of analysis for selected lots at a frequency determined by the department with supporting data, to report both of the following:

(1) Whether the chemical profile of the sample conforms to the labeled content of compounds, including, but not limited to, all of the following, unless limited through regulation by the department:

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(D) Cannabidiolic Acid (CBDA).

(E) The terpenes required by the department in regulation.

(F) Cannabigerol (CBG).

(G) Cannabinol (CBN).

(H) Other compounds or contaminants required by the department.

(2) That the presence of contaminants does not exceed the levels established by the department. In establishing the levels, the department shall consider the American Herbal Pharmacopoeia monograph, guidelines set by the Department of Pesticide Regulation pursuant to subdivision (c) of Section 26060, and any other relevant sources. For purposes of this paragraph, “contaminants” includes, but is 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.

(3) For edible cannabis products, that the milligrams per serving of THC does not exceed 10 milligrams per serving, plus or minus 12 percent. After January 1, 2022, the milligrams of THC per serving shall not deviate from 10 milligrams by more than 10 percent.

(e) A testing laboratory may amend a certificate of analysis to correct minor errors, as defined by the department.

(f) (1) Standards for residual levels of volatile organic compounds shall be established by the department.

(2) On or before January 1, 2023, the department shall establish a standard cannabinoids test method, including standardized operating procedures, that shall be utilized by all testing laboratories. The department may establish more than one method for use by testing laboratories and these standards may be developed through a reference laboratory.

(g) The testing laboratory shall conduct all testing required by this section in a manner consistent with general requirements for the competence of testing and calibrations activities, including sampling and using verified methods.

(h) All testing laboratories performing tests pursuant to this section shall obtain and maintain ISO/IEC 17025 accreditation as required by the department in regulation.

(i) The testing laboratory shall be subject to blind proficiency testing to ensure consistency of results across laboratories. On or before January 1, 2025, the department shall establish a standard laboratory blind proficiency test method, including standardized operating procedures, that shall be utilized by all testing laboratories.

(j) (1) 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.

(2) If a test result falls outside the specifications authorized by law or regulation, the testing laboratory may retest the sample if both of the following occur:

(A) The testing laboratory notifies the department, in writing, that the test was compromised due to equipment malfunction, staff error, or other circumstances allowed by the department.

(B) The department authorizes the testing laboratory to retest the sample.

(k) A testing laboratory shall destroy the remains of the sample of cannabis or cannabis product upon completion of the analysis, as determined by the department through regulations.

(l) A testing laboratory shall be subject to ~~annual~~ biennial, in-person audits by the department. On or before January 1, 2025, the department shall establish standard operating procedures for conducting audits, including frequency, manner, and notification requirements. The results of the audit, including any record of violation, shall be made available on the department’s internet ~~website for a period of ____ years.~~ website.

(m) Presale inspection, testing transfer, or transportation of cannabis or cannabis products pursuant to this section shall conform to a specified chain of custody protocol and any other requirements imposed under this division.

(n) This division does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality control of the product in conjunction with reasonable business operations. This division also does not prohibit a licensee from performing testing on the licensee’s premises of cannabis or cannabis products obtained from another licensee. Onsite testing by the licensee shall not be certified by the department and does not exempt the licensee from the requirements of compliance testing at a testing laboratory pursuant to this section.

SEC. 3.

Section 26110 of the Business and Professions Code is amended to read:

26110.

(a) Cannabis batches are subject to quality assurance standards and testing prior to sale at a retailer, microbusiness, or nonprofit licensed under Section 26070.5, except for immature cannabis plants and seeds, as provided for in this division.

(b) A licensee that holds a valid distributor license may act as the distributor for the licensee’s cannabis and cannabis products.

(c) The distributor shall store, as determined by the department, the cannabis batches on the premises of the distributor before testing and continuously until either of the following occurs:

(1) The cannabis batch passes the testing requirements pursuant to this division and is transported to a licensed retailer or to another licensed distributor.

(2) The cannabis batch fails the testing requirements pursuant to this division and is destroyed or transported to a manufacturer for remediation as allowed by the department.

(d) The distributor shall arrange for a testing laboratory to obtain a representative sample of each cannabis batch at the distributor’s licensed premises. After obtaining the sample, the testing laboratory representative shall maintain custody of the sample and transport it to the testing laboratory.

(e) Upon issuance of a certificate of analysis by the testing laboratory that the cannabis batch has passed the testing requirements pursuant to this division, the distributor shall conduct a quality assurance review before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division.

(f) (1) There shall be a quality assurance compliance monitor who is an employee or contractor of the department and who shall not hold a license in any category or own or have an ownership interest in a licensee or the premises of a licensee.

(2) The quality assurance compliance monitor shall conduct random quality assurance reviews at a distributor’s licensed premises before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division. The quality assurance compliance monitor may also conduct random quality assurance reviews at a retailer’s licensed premises for the same purpose.

(3) The quality assurance compliance monitor shall have access to all records and test results required of a licensee by law in order to conduct quality assurance analysis and to confirm test results. All records of inspection and verification by the quality assurance compliance monitor shall be provided to the department. Failure to comply shall be noted by the quality assurance compliance monitor for further investigation. Violations shall be reported to the department. The quality assurance compliance monitor shall also verify the tax payments collected and paid under Sections 34011 and 34012 of the Revenue and Taxation Code are accurate. The monitor shall also have access to the inputs and assumptions in the track and trace system and shall be able to verify their accuracy and that they are commensurate with the tax payments.

(g) After testing, all cannabis and cannabis products fit for sale may be transported only from the distributor’s premises to the premises of another licensed distributor for further distribution, or to a licensed retailer, microbusiness, or nonprofit for retail sale.

(h) A licensee is not required to sell cannabis or cannabis products to a distributor and may directly contract for sale with a licensee authorized to sell cannabis and cannabis products to purchasers.

(i) A distributor performing services pursuant to this section may collect a fee from the licensee for the services provided. The fee may include, but is not limited to, the costs incurred for laboratory testing. A distributor may also collect applicable state or local taxes and fees.

(j) This section does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality control of the product in conjunction with reasonable business operations. The testing conducted on the licensee’s premises by the licensee does not meet the testing requirements pursuant to this division.

(k) On or before January 1, 2025, the department shall establish quality assurance standards and testing procedures for products available for retail sale. Procedures shall include, but are not limited to, laboratory testing of products that are available for retail sale to ensure consistency with presale laboratory testing.