California Cannabis pending law, Fall 2015- AB 266

California cannabis legislation 2015  AB 266

 

AB 266

 

Medical Cannabis Regulation and Control Act of 2015

 

SUBJECT: Medical cannabis.

SUMMARY: Establishes a joint state-local agency licensing and regulatory framework for medical cannabis under the Medical Cannabis Regulation and Control Act, and establishes the Office of Medical Cannabis Regulation within the Office of the Governor, the Division of Medical Cannabis Regulation within the State Board of Equalization, the Division of Medical Cannabis Manufacturing and Testing within the Department of Public Health, and the Division of Medical Cannabis Cultivation within the Department of Food and Agriculture, and sets forth the duties of the respective regulatory authorities.

 

This bill:

 

1) Establishes the Medical Cannabis Regulation and Control Act.

 

2) Creates, within the office of the Governor, the Office of Medical Cannabis Regulation (OMCR), under the supervision and control of the Director of the OMCR.

 

3) Requires the OMCR Director to consult with state agencies possessing expertise in licensure and enforcement when developing a regulatory framework pursuant to the provisions of this bill. Gives the OMCR overall executive authority and responsibility for implementation of all expects of MM regulation, as well as coordination and oversight of all activities.

 

4) Requires the OMCR to maintain a registry of all permit holders and maintain a record of all state licenses and “commercial cannabis activity of the permit holder throughout the length of licensure and for a minimum of seven years following the expiration of each license. Requires OMCR to make limited licensee information available to a licensee so that it may verify whether it is engaging in commercial cannabis activities with a properly licensed entity.

 

5) Establishes the following entities that are required to report and be directly accountable to the OMCR for their respective designated responsibilities within the regulatory and enforcement framework:

 

  1. a) The Division of Medical Cannabis Regulation, within the State Board of Equalization (BOE), administered by a person hired by the BOE to administer provisions of this bill related to dispensaries and transporters;
  2. b) The Division of Medical Cannabis Manufacturing and Testing, within DPH, administered by a person appointed by DPH to administer provisions of this bill related to manufacturing, testing, and certification of testing laboratories for MM and MM products; and
  3. c) The Division of Medical Cannabis Cultivation, within the Department of Food and Agriculture (DFA), administered by a person appointed by DFA to administer provisions of this bill pertaining to cultivation of MM.

 

6) Requires the California Environmental Protection Agency and the California Natural Resources Agency to coordinate and direct the following entities in the discharge of their designated regulatory responsibilities:

  1. a) The State Water Resources Control Board in promulgating regulations related to discharge into waterways, and diversion therefrom, resulting from MM cultivation; and,
  2. b) The Department of Fish and Wildlife in promulgating regulations for the protection of any species affected by cultivation activity, and regulations

for any cultivation-related development, including alteration of waterways.

  1. c) The Department of Pesticide Regulations in promulgating regulations consistent with the Food and Agricultural Code.

 

7) Requires the Department of Justice (DOJ) to conduct the following activities:

  1. a) Conduct criminal background checks of applicants for licensure;
  2. b) Develop uniform security standards for dispensaries and all phases of transport covered by provisions of this bill; and,
  3. c) Provide supplemental enforcement on an as-needed basis at the request of the OMCR.

 

8) Gives authority to OMCR and licensing authorities to implement provisions of this bill, including, but not limited to, establishing rules and regulations; prescribing, adopting, and enforcing emergency regulations as necessary; issuing state licenses to persons for the cultivation, distribution, manufacture, transportation, and retail sale of MM within the state; setting application, licensing, and renewal fees for state licenses; establishing standards for commercial cannabis activity; establishing procedures for the issuance, renewal, suspension, denial, and revocation of state licenses; imposing penalties; taking action with respect to an application for a state license; overseeing the operation of the Medical Cannabis Regulation Fund; and consulting with other state or local agencies, departments, representatives of the MM community, or public or private entities for the purposes of establishing statewide standards and regulations. Requires the public’s health and safety to be the highest priority for the OMCR and the licensing authorities in exercising licensing, regulatory, and disciplinary functions.

 

9) Requires the OMCR, by April 1, 2016, to convene a task force to advise the OMCR on the development of standards, recommending appropriate roles for each state entity, and recommending guidelines on communication and information sharing between state entities, and with local agencies. Requires the task force to submit a report on the standards, determinations, and guidelines for implementation of provisions of this bill to the Legislature and affected state entities by August 1, 2016. Requires the task force to be comprised of 15 members, each of whom is appointed to a two-year term, as specified.

 

10) Requires the task force to work with representatives of MM patient groups and physicians to, before July 1, 2016, establish best practices and guidelines to ensure qualifies patients have adequate access to MM and MM products. Requires the best practices and guidelines to be sent in a report to the Legislature and to all local authorities that have implemented local ordinances that ban exempt individuals from engaging in cultivation or possession of MM or MM products within their jurisdictions. Specifies that this provision remains in effect only until January 1, 2017, unless a later enacted statute deletes or extends that date.

 

11) Requires each task force member to serve on a voluntary basis and to be responsible for costs associated with participation. Specifies that the licensing authorities are not responsible for travel costs incurred by task force members or for otherwise compensating task force members for costs associated with their participation.

 

Recommending MM

12) Makes it unlawful for a physician who recommends MM to accept, solicit, or offer any form of remuneration from or to a MM facility issued a state license if the physician or his or her immediate family have a financial interest in that facility. Makes a violation of this provision a misdemeanor.

 

13) Requires the MBC to consult with the CMRP on developing and adopting medical guidelines for the appropriate administration and use of MM.

 

14) Prohibits a physician from recommending MM to a patient, unless that person is the patient’s attending physician.

 

15) Adds to the MBC’s list of cases to investigate, on a priority basis, a physician recommending MM to patients for medical purposes without a good faith prior examination of the patient and medical reason therefor.

 

16) Specifies that recommending MM to a patient for a medical purpose without an appropriate prior examination and a medical indication constitutes unprofessional conduct.

 

17) Specifies that a person who practices medicine who is employed by, or has any other agreement with, a mandatory commercial licensee acting pursuant to the provisions of this bill or a dispensary to provide recommendations for MM constitutes unprofessional conduct.

 

Enforcement and local control

 

18) Requires each licensing authority to work in conjunction with local agencies for the purposes of implementing, administering, and enforcing provisions of this bill, and any regulations adopted, and taking appropriate action against licensees and others who fail to comply with the bill’s provisions or regulations.

 

19) Specifies that peace officers of the California Highway Patrol (CHP), members of the University of California and California State University police departments, and peace officers of the Department of Parks and Recreation, as specified, may visit and inspect the premises of a licensee.

 

20) Requires the OMCR, by January 1, 2017, in consultation with local governments, to develop an enforcement framework that clarifies the enforcement roles of the state and local governments consistent with provisions of this bill. Specifies that local agencies are authorized to enforce any state statutory or regulatory standard. Specifies that a state agency is not required to enforce a city, county, city and county, or local law, ordinance, rule, or regulation regarding the site or operation of a facility or transporter issued a state license.

 

21) Gives cities full power and authority to enforce rules, regulations, and standards promulgated by the OMCR for facilities that are issued a state license and are located within the incorporated area of a city. Requires a city to further assume complete responsibility for any regulatory function relating to those licensees within 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. Gives counties full power and authority to enforce rules, regulations, and standards promulgated by the OMCR for licensed facilities located within the unincorporated area of a county.

 

22) Requires state agencies to collaborate with local agencies to enforce state standards and regulations to the extent it is within the scope of other statutory responsibilities of local agencies and to the extent that resources for enforcement are available to the local agencies. Allows a city, county, or city and county to adopt ordinances that establish additional standards, requirements, and regulations for local licenses and permits for commercial cannabis activity. Requires the state to preempt local ordinances for all conflicts between state and local standards, requirements, and regulations regarding health and safety, testing, security, and worker protections.

 

23) Allows the director of a licensing authority or a district attorney, county counsel, city attorney, or city prosecutor to bring an action to enjoin a violation or the threatened violation of any provision of this bill, including, but not limited to, a licensee’s failure to correct objectionable conditions. Requires a state or local agency to immediately notify the OMCR and the appropriate licensing authority of violations or arrests made for violations over which the licensing authority has jurisdiction that involve a licensee or licensed premises.

 

24) Requires the OMCR to establish procedures to provide any relevant state or local agencies and all licensing authorities, upon their request, with 24-hour access to information to verify a state license, track transportation manifests, and track the inventories of facilities issued a state license, as specified.

 

25) Prohibits the enforcement and local control provisions of this bill from superseding the provisions of Measure D, approved by the voters of the City of Los Angeles (L.A.) on the May 21, 2013, ballot, which provides potential limited immunity to MM businesses, as specified. Requires MM businesses within L.A. to continue to be subject to Measure D and any and all other applicable ordinances and regulations of L.A. Requires the BOE to enter into a memorandum of understanding with L.A. to establish protocols for the following:

  1. a) Tracking businesses granted immunity pursuant to Measure D;
  2. b) Tracking MM and MM products to and from L.A; and,
  3. c) Allowing for the legal transfer or MM and MM products from outside the jurisdiction of L.A. to within the city by licensees conducting commercial cannabis activities outside of the city.

 

26) Requires a person engaging in commercial cannabis activity without a license to be subject to civil penalties of up to twice the amount of the licensee fee for each violation. Allows the OMCR, licensing authority, or court to order the destruction of MM associated with the violation.

 

27) Specifies that, to the extent it they do not interfere with or violate the CUA, the provisions of this bill do not prevent a city, county, or city and county from doing any of the following:

  1. a) Adopting local ordinances, whether consistent or inconsistent with enforcement and local control provisions, that do the following:

AB 266 (Bonta) Page 7 of 18

  1. Regulate the location, operation, or establishment of a licensee or a person that cultivates, processes, possesses, stores, manufactures, tests, transports, distributes, or sells MM.
  2. Prohibit commercial MM activity within their jurisdiction.
  3. b) Providing for the administrative, civil, or criminal enforcement of the ordinances described in a.) above.
  4. c) Establishing a fee for the operation within its jurisdiction of any of the following:
  5. A licensee.
  6. Another person that cultivates, processes, possesses, stores, manufactures, tests, transports, distributes, or sells MM or MM products.

iii. A person exempt from licensure.

  1. d) Enacting and enforcing other laws and ordinances to preserve local control.

 

28) Requires CHP to establish protocols to determine whether a driver is operating a vehicle under the influence of MM and requires CHP to develop protocols setting forth best practices to assist law enforcement agencies.

 

Licensure

 

29) Requires DFA to license cultivators; BOE to license dispensaries and transporters; and DPH to license manufacturers and certified testing laboratories.

 

30) Specifies that the licensure provisions of this bill do not apply to: a) qualified patients, pursuant to the CUA, who cultivate, possess, store, manufacture, or transport MM exclusively for personal medical use but who do not provide, donate, sell, or distribute MM to any other person; or b) primary caregivers who cultivate, possess, store, manufacture, transport, donate, or provide MM exclusively for the personal medical purposes of no more than five specified qualified patients for whom he or she is the primary caregiver, but who does not receive remuneration for these activities except for compensation in full compliance with provisions of the MMP.

 

31) Specifies that, to the extent this provision does not interfere with or violate the CUA, exemption from licensure for qualified patients and primary caregivers does not limit or prevent a city, county, or city and county from regulating or banning the cultivation, storage, manufacture, transport, provision, or other activity by the exempt person, or impair the enforcement of that regulation or ban.

 

32) Requires licensing authorities to promulgate regulations for implementation and enforcement of licensure, including, among various requirements, an applicant’s qualifications and a state licensee’s employee qualifications, including training and screening.

 

33) Allows licensing authorities to issue state licenses only to qualified applicants engaging in commercial cannabis activity and prohibits, beginning January 1, 2018, a person from engaging in commercial cannabis activity without possessing a state license and a local permit. Requires local permits to be determined by local ordinances. Gives authority to revoke state licenses and local permits to the respective licensing authorities and local agencies. Prohibits a licensing authority from issuing a license to an applicant who proposes to operate within L.A., regardless of the activity for which the license is sought.

 

34) Requires an applicant for a state license to, among other requirements: pay a fee; register with the licensing authority; provide a written description of the scope of business of the proposed facility; provide evidence that the applicant and owner have been legal full-time residents of the state for not less than four years; provide detailed written operating procedures; submit the applicant’s fingerprints to the DOJ; and, provide any information required by the licensing authority.

 

35) Specifies that revocation of a state license or local license or permit terminates the ability of a MM business to operate within the state, unless the state license or local license or permit is reissued or reinstated by the proper entity. Requires licensing authorities to, by regulation, prescribe conditions upon which a person whose state license has previously been denied, suspended, or revoked may be issued a state license.

 

36) Requires each licensing authority to deny an application for licensure or renewal, or suspend or revoke a state license for various reasons, including, but not limited to, making untrue statements, conduct that constitutes fraud or gross negligence, failure to comply with any rule or regulation, failure to submit requested information, and if an applicant, or any of its officers, directors, or owners, have been convicted of a felony criminal conviction for the possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance, including a narcotic drug classified in Schedule II, III, IV, or V (but excluding marijuana), for drug trafficking involving a minor, a violent felony, a serious felony, a felony offense involving fraud or deceit, or any other felony that, in the licensing authority’s determination, would impair the applicant’s ability to appropriately operate as a state licensee. Allows a licensing authority, at its discretion, to issue a state license to an applicant that has obtained a certificate of rehabilitation (a Governor’s pardon).

 

Regulation of MM

 

37) Repeals existing law that allows qualified patients and their primary caregivers to collectively or cooperatively cultivate MM for medical purposes 180 days after the OMCR posts a notice on its Internet Web site that licensing authorities have commenced issuing provisional licenses, as specified.

 

38) Prohibits licensees, employees, or representatives of licensees from refusing, impeding, or interfering with an inspection pursuant to the provisions of this bill or local ordinance. Specifies that a violation of this provision is a misdemeanor punishable by up to one year in county jail and a fine up to $5,000 or by civil penalties of up to $5,000.

 

39) Requires all licensees holding cultivation or manufacturing licenses to send all MM and MM products to a licensed processor for processing and testing prior to retail or sale of MM or MM products to a dispensary, qualified patient, or caregiver. Requires MM and MM products to be tested by a certified testing laboratory, licensed by DPH, prior to retail sale or dispensing to test for potency, pesticides, mold, rodenticide, and other contaminants of MM dried flower and for potency and purity of MM extracts.

40) Requires BOE to adopt a MM and MM product track and trace process for reporting the movement of MM items throughout the distribution chain that also employs secure

packaging and that is capable of providing information that captures, at a minimum, the licensee receiving the product; the transaction date; and any other information deemed necessary by BOE for the taxation and regulation of MM and MM products.

 

41) Requires licensing authorities to develop a database containing the electronic shipping manifests to be designed to flag irregularities for a licensing authority to investigate.

 

42) Prohibits MM packages and labels from being made to be attractive to children. Requires MM product labels to include, but not limited to, the following statements: “Keep out of reach of children and animals”; “For medical use only”; “The intoxicating effects of this product may be delayed by up to two hours”; and warnings if nuts or other known allergens are used.

 

Cannabis employee certification and apprenticeship

 

43) Requires the Division of Labor Standards Enforcement (DLSE), within the Department of Industrial Relations (DIR), to maintain minimum standards for the competency and training of employees of a licensed cultivator or dispensary through a system of testing and certification; maintain an advisory committee and panels as necessary; adopt regulations; issue certification cards to certified employees; and establish registration fees. Requires, by January 1, 2017, the DSLE to develop a certification program for cannabis employees. Requires all employees performing work as cannabis employees to be certified by January 1, 2019.

 

Taxation

 

44) Allows the OMCR and other state agencies to assist state taxation authorities in the development of uniform policies for the state taxation of state licensees. States legislative intent to grant authority to the board of supervisors of a county to impose appropriate taxes on facilities licensed pursuant to provisions of this bill.

 

Reporting

 

45) Requires, on or before March 1 of each year, the director of the OMCR to prepare and submit to the Legislature an annual report on OMCR’s activities and post it on OMCR’s Internet Web site to include, but not be limited to:

  1. a) The amount of funds allocated and spent by OMCR and licensing authorities for MM licensing, enforcement, and administration;
  2. b) The number of state licenses issued, renewed, denied, suspended, and revoked, by state license category;
  3. c) The average time for processing state license applications, by state license category;
  4. d) The number and type of enforcement activities conducted by the licensing authorities and by local law enforcement agencies in conjunction with the licensing authorities or the OMCR; and,
  5. e) The number, type, and amount of penalties, fines, and other disciplinary actions taken by the licensing authorities.

 

Privacy

 

46) Deems as confidential any information identifying the names of qualified patients, their medical conditions, or the names of their primary caregivers received and contained in records kept by the OMCR or licensing authorities for the purposes of administering provisions of this bill, and prohibits disclosure pursuant to the California Public Records Act.

 

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