AB 266 Breakdown. The end of the cannabis industry as you know it.

I will be following this up with a more detailed response, but below is my initial breakdown of AB 266 being proposed by the legislature, and being supported by groups such as Americans for Safe Access, the Emerald growers Association, UFCW, and the California Cannabis Industry Association. This law will be the end of the industry as we know it and the provisional licensing requirement will ensure that all growers, producers, and manufacturers of cannabis will be completely fucked…. Enjoy. My comments are the bullet points in red….

SECTION 1.

 The Legislature finds and declares all of the following:

(a) The people of California enacted the Compassionate Use Act of 1996 to ensure that seriously ill Californians have access to cannabis for medical purposes. The Compassionate Use Act of 1996 urged the state and federal governments to implement a plan to provide for the safe and affordable distribution of medical cannabis to all patients in medical need of the drug.

(b) Federal enforcement authorities have recognized that in states that have authorized cannabis use and have enacted strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale, and possession of cannabis, conduct in compliance with those regulatory and enforcement systems is less likely to threaten federal priorities, and, thus, less likely to require federal enforcement intervention (See: Memorandum For All United States Attorneys—Guidance Regarding Marijuana Enforcement, by James M. Cole, Deputy Attorney General, August 29, 2013).

(c) Greater certainty and minimum statewide standards are urgently needed regarding the obligations of medical cannabis facilities, and for the imposition and enforcement of regulations to prevent unlawful cultivation and the diversion of cannabis to nonmedical use.

(d) The purpose of this act is to establish for California a robust medical cannabis regulatory and enforcement system to ensure that conduct in compliance with California’s medical cannabis laws does not threaten the federal priorities as set forth in the James M. Cole memorandum, and, therefore, does not require federal enforcement intervention.

(e) The California Constitution grants cities and counties the authority to make and enforce, within their borders, “all local police, sanitary, and other ordinances and regulations not in conflict with the general laws.” This inherent local police power includes broad authority to determine, for purposes of public health, safety, and welfare, the appropriate uses of land within the local jurisdiction’s borders. The police power, therefore, allows each city and county to determine whether or not a medical cannabis dispensary or other facility that makes medical cannabis available may operate within its borders. This authority has been upheld by City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th 729, and County of Los Angeles v. Hill (2011) 192 Cal.App.4th 861. Nothing in this act shall diminish, erode, or modify that authority.

(f) If a city or county determines that a dispensary or other facility that makes medical cannabis available may operate within its borders, then there is a need for the state to license these dispensaries and other facilities for the purpose of adopting and enforcing protocols for security standards at dispensaries and in the transportation of medical cannabis, as well as health and safety standards to ensure patient safety. This licensing requirement is not intended in any way nor shall it be construed to preempt local ordinances, regulations, or enforcement actions regarding the sale and use of medical cannabis, including, but not limited to, security, signage, lighting, and inspections.

(g) Nothing in this act or Article 2 (commencing with Section 11357) or Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety Code is intended to preempt any local ordinance regulating or banning the cultivation, processing, manufacturing, testing, transportation, distribution, provision, donation, or sale of medical cannabis, or to otherwise prevent or limit a city, county, or city and county from adopting or enforcing a zoning ordinance or other law, ordinance, or regulation that bans or regulates the location, operation, or establishment of any individual or other person that cultivates, processes, possesses, stores, manufactures, tests, transports, distributes, provides, donates, or sells cannabis.

• While local municipalities can ban alcohol, it is not clear if they can ban medicine. Can a town declare they do not want a pharmacy in town and force people to travel to get their prescribed medicines?

(h) Nothing in this act is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of cannabis in the workplace, or to affect the ability of employers to have policies restricting the use of cannabis by employees, or otherwise complying with federal law.

• This is a result of Ross vs. Raging Wire but I would beg to wonder why we are not including language to at least try and make it so patients were protected under CA law for using medical cannabis.

(i) Nothing in this act shall be construed to promote or facilitate the nonmedical, recreational possession, sale, or use of cannabis.

(j) Nothing in this act shall have a diminishing effect on the rights and protections granted to a patient or primary caregiver pursuant to the Compassionate Use Act of 1996.

SEC. 2.

Section 2220.05 of the Business and Professions Code is amended to read:

 

2220.05.

(a) In order to ensure that its resources are maximized for the protection of the public, the Medical Board of California shall prioritize its investigative and prosecutorial resources to ensure that physicians and surgeons representing the greatest threat of harm are identified and disciplined expeditiously. Cases involving any of the following allegations shall be handled on a priority basis, as follows, with the highest priority being given to cases in the first paragraph:

(1) Gross negligence, incompetence, or repeated negligent acts that involve death or serious bodily injury to one or more patients, such that the physician and surgeon represents a danger to the public.

(2) Drug or alcohol abuse by a physician and surgeon involving death or serious bodily injury to a patient.

(3) Repeated acts of clearly excessive prescribing, furnishing, or administering of controlled substances, or repeated acts of prescribing, dispensing, or furnishing of controlled substances  substances, or recommending cannabis to patients for medical purposes  without a good faith prior examination of the patient and medical reason therefor. However, in no event shall a physician and surgeon prescribing, furnishing, or administering controlled substances for intractable pain consistent with lawful prescribing, OR CANNABIS WAS RECOMMENDED, including, but not limited to, Sections 725, 2241.5, and 2241.6 of this code and Sections 11159.2 and 124961 of the Health and Safety Code, be prosecuted for excessive prescribing, OR RECOMMENDING CANNABIS, and prompt review of the applicability of these provisions shall be made in any complaint that may implicate these provisions.

• The “recommending of cannabis” should be included in the second half of this too anywhere it says “prescribing”

(4) Sexual misconduct with one or more patients during a course of treatment or an examination.

(5) Practicing medicine while under the influence of drugs or alcohol.

(b) The board may by regulation prioritize cases involving an allegation of conduct that is not described in subdivision (a). Those cases prioritized by regulation shall not be assigned a priority equal to or higher than the priorities established in subdivision (a).

(c) The Medical Board of California shall indicate in its annual report mandated by Section 2312 the number of temporary restraining orders, interim suspension orders, and disciplinary actions that are taken in each priority category specified in subdivisions (a) and (b).

SEC. 3.

Section 2242 of the Business and Professions Code is amended to read:

 

2242.

(a) Prescribing, dispensing, or furnishing dangerous drugs as defined in Section 4022 without an appropriate prior examination and a medical indication, constitutes unprofessional conduct. Prescribing or recommending medical cannabis to a patient for a medical purpose without an appropriate prior examination and a medical indication constitutes unprofessional conduct.

• This is undoubtedly a slippery slope

(b) No licensee shall be found to have committed unprofessional conduct within the meaning of this section if, at the time the drugs were prescribed OR CANNABIS WAS RECOMMENDED, dispensed, or furnished, any of the following applies:

(1) The licensee was a designated physician and surgeon or podiatrist serving in the absence of the patient’s physician and surgeon or podiatrist, as the case may be, and if the drugs were prescribed, OR CANNABIS WAS RECOMMENDED, dispensed, or furnished only as necessary to maintain the patient until the return of his or her practitioner, but in any case no longer than 72 hours.

(2) The licensee transmitted the order for the drugs to a registered nurse or to a licensed vocational nurse in an inpatient facility, and if both of the following conditions exist:

(A) The practitioner had consulted with the registered nurse or licensed vocational nurse who had reviewed the patient’s records.

(B) The practitioner was designated as the practitioner to serve in the absence of the patient’s physician and surgeon or podiatrist, as the case may be.

(3) The licensee was a designated practitioner serving in the absence of the patient’s physician and surgeon or podiatrist, as the case may be, and was in possession of or had utilized the patient’s records and ordered the renewal of a medically indicated prescription for an amount not exceeding the original prescription in strength or amount or for more than one refill.

(4) The licensee was acting in accordance with Section 120582 of the Health and Safety Code.

SEC. 4.

Section 2264 of the Business and Professions Code is amended to read:

 

2264.

(a)  The employing, directly or indirectly, the aiding, or the abetting of any unlicensed person or any suspended, revoked, or unlicensed practitioner to engage in the practice of medicine or any other mode of treating the sick or afflicted which requires a license to practice constitutes unprofessional conduct.

(b)  Employment by, or other agreement with, a mandatory commercial licensee acting pursuant to the Medical Cannabis Regulation and Control Act or a dispensary to provide recommendations for medical cannabis constitutes unprofessional conduct.

SEC. 5.

Article 25 (commencing with Section 2525) is added to Chapter 5 of Division 2 of the Business and Professions Code, to read:

 

Article  25. Recommending Medical Cannabis

2525.

 (a) It is unlawful for a physician and surgeon who recommends cannabis to a patient for a medical purpose to accept, solicit, or offer any form of remuneration from or to a facility issued a conditional license pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8, if the physician and surgeon or his or her immediate family have a financial interest in that facility.

(b) For the purposes of this section, “financial interest” shall have the same meaning as in Section 650.01.

(c) A violation of this section shall be a misdemeanor.

2525.1.

 The Medical Board of California shall consult with the California Marijuana Research Program, known as the Center for Medicinal Cannabis Research, authorized pursuant to Section 11362.9 of the Health and Safety Code, on developing and adopting medical guidelines for the appropriate administration and use of medical cannabis.

• So doctors will be issued guidelines from some college researchers instead of being able to use their own medical judgement? Weird….

2525.2.

 A physician and surgeon shall not recommend medical cannabis to a patient, unless that person is the patient’s attending physician, as defined by subdivision (a) of Section 11362.7 of the Health and Safety Code.

• The term “patient’s attending physician” can be a quite dangerous term if misinterpreted by the courts. In the United States and Canada, an attending physician (also known as an attending, rendering doc, or staff physician) is a physician (M.D. or D.O.) who has completed residency and practices medicine in a clinic or hospital, in the specialty learned during residency.

SEC. 6.

Chapter 3.5 (commencing with Section 19300) is added to Division 8 of the Business and Professions Code, to read:

 

CHAPTER  3.5. Medical Cannabis

Article  1. Definitions

19300.

 For purposes of this chapter, the following definitions shall apply:

(a) “Cannabinoid” means a chemical compound that is unique to and derived from cannabis, also known as phytocannabinoid.

(b) “Cannabis” means all parts of the plant Cannabis sativa L., 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” 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. “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.

(c) “Cannabis concentrate” means manufactured cannabis that has undergone a process to concentrate the cannabinoid active ingredient, thereby increasing the product’s potency.

(d) “Certified testing laboratory” means a laboratory that is certified by the State Department of Public Health to perform random sample testing of medical cannabis pursuant to the certification standards for these facilities promulgated by the department.

• It will be interesting to see how the DPH approaches this one. Gives a lot of power to a group that is about 50/50 on cannabis at best. Could result in some interesting certification protocols.

(e) “Commercial cannabis activity” means any cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of cannabis or cannabis product, or any Internet platform that facilitates any of these functions for the purpose of selling medical cannabis or medical cannabis products to qualified patients or caregivers, except as set forth in Section 19316.

• The term “selling” always gets a little tricky, especially when you consider the many get around terms that have been used in this industry over the years. I might use the term “retail distribution” or something.

(f) “Cultivation” means any activity involving the planting, growing, harvesting, drying, processing, or trimming of cannabis.

• So you have “processing” here. That may need to be more clearly defined, as its broad interpretation could mean processing into finished goods, which is a whole different deal…. Especially when there are license limitations ahead.

(g) “Delivery” means the commercial transfer of medical cannabis or medical cannabis products from a dispensary to a primary caregiver or qualified patient, as defined in Section 11362.7 of the Health and Safety Code.

• Only from a dispensary? That is odd considering it defines delivery service next.

(h) “Delivery service” means a person issued a state license by the State Department of Public Health pursuant to this chapter and a local license or permit, to deliver medical cannabis or medical cannabis products, up to an amount determined by the department, to patients, testing laboratories, or to events or locations where it will be used solely for promotional purposes. A delivery service shall not be required to obtain a transporter license.

• Can a dispensary hold a Delivery Service license? Can a cultivator or product manufacturer? Like farm to table deals?

(i) “Director” means the director of the Office of Marijuana Regulation.

• I am pretty sure I am going to get this job. (rolls eyes)

(j) “Dispensary” means a nonmobile, nonvehicular, non-Internet-based retail location that distributes medical cannabis or medical cannabis products and is owned and operated by a licensee for these activities pursuant to this chapter.

• So how does this work? Currently most dispensaries are not “owned and operated” by any one. Does that mean the corporation would be the licensee? How are these “not-for-profit” entities going to decide ownership after there is no not-for-profit requirement? It still seems to me that there is a need for the word “retail” in here. I mean, technically aren’t cultivators and manufacturers “distributing” cannabis too, just wholesale?

(k) “Dispensing” means any activity involving the retail sale of medical cannabis or medical cannabis products from a dispensary.

• Well there is the term retail….. at least it is in here somewhere.

(l) “Dried flower” means all dead medical cannabis that has been harvested, dried, cured, or otherwise processed.

• Odd… so all stems, leaves, and other byproduct material are classified as flowers too. Good to know. Here we are with the processed again too. Super.

(m) “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.

• Interesting to call out the chewing gum. Consumption could include smoking or vaping products too, correct? Definitions for consumption include “used or ingested.” Would “ingestion or sublingual consumption” be better?

(n) “Fund” means the Medical Cannabis Regulation Fund established pursuant to Section 19361.

(o) “Identification program” means the universal identification certificate program for licensees.

(p) “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.

• It is easy to see that UFCW and their posterboy Gavin Newsome got their language inserted. At least this one doesn’t use the term “labor union currently active in the cannabis industry” to cement their place. LOL. I dig unions, but man…. It is tough to justify that type of all for us and our membership only attitude sometimes.

(q) “Licensed cultivation site” means a person that plants, grows, cultivates, harvests, dries, or processes medical cannabis, or that does all or any combination of those activities, and that is issued a state license pursuant to this chapter and a local license or permit.

• Process again can get weird here. Surprised not to see the term “agriculture” in here since cultivation and propagation are definitely agricultural functions.

(r) “Licensed dispensing facility” means a person that provides medical cannabis, medical cannabis products, or devices for the use of medical cannabis or medical cannabis products, either individually or in any combination, that is issued a state license pursuant to this chapter and a local license or permit.

• Again I believe there is a need to include the term retail in this definition even if mentioned above. Interesting to see a facility called a “person” too. Am I reading it right with the “or devices for the use of medical cannabis” meaning that all head shops would also be included? So a wholesaler doesn’t “provide” too?

(s) “Licensed manufacturer” means a person that conducts the production, preparation, propagation, compounding, or processing of medical cannabis or medical cannabis products, either directly or indirectly or by extraction processes, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis, and includes a location that packages or repackages medical cannabis or medical cannabis products or labeling or relabeling of its container, and that has been issued a state license pursuant to this part.

• Propagation here would seem to be pointing to clones, but wouldn’t a licensed cultivator need to propagate too? If it is “and includes a location that packages or repackages medical cannabis…” wouldn’t that mean dispensaries would be excluded from packaging their own medicine? Everything has to be pre-packed or what?

(t) “Licensed transporter” means a person issued a state license by the Board of Equalization to transport medical cannabis or medical cannabis products above a limit determined by the board to and from facilities that have been issued a state license pursuant to this chapter.

• Is a transporter license in addition to other licenses? I mean can a grower transport his own product? Or is a transporter license required in addition to your grower license? More fees?

(u) “Licensee” means a person issued a state license under this chapter to engage in commercial cannabis activity.

• Having a license seems like a good idea if the terms are reasonable. They are not though.

(v) “Licensing authority” means the state agency responsible for granting and renewing state licenses and regulating the relevant licensees. For licensed cultivators, the licensing authority is the Division of Medical Cannabis Cultivation in the Department of Food and Agriculture. For dispensaries and transporters, the licensing authority is the State Board of Equalization. For licensed manufacturers and certified testing laboratories, the licensing authority is the Division of Medical Cannabis Manufacturing and Testing within the State Department of Public Health.

• Cultivators being licensed by the Department of Food and Ag seems awesome… it could also be problematic though. The State BOE is probably viable for dispensaries and transporters. Where are the delivery services? And then licensed manufacturers get the Department of Public Health. Interesting…. Sort of wondering what that will end up looking like, and why manufacturing is more “medical” than medical cultivation and medicine dispensing.

(w) “Live plants” means living medical cannabis flowers and plants, including seeds, immature plants, and vegetative stage plants.

(x) “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.

• Where are we at on suppositories? LOL. And what about chewing gum again?

(y) “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).

• “Sold for use” seems like it could face legal challenges, as it refers to Prop 215 as well where there is no mention of “sold to” anything really. We should only look as far as the petty word games used to try and overturn Obamacare to know that lack of clear definitions and meaning can be fateful to any law. We definitely have legal challenges to happen on both the pro and anti-cannabis sides of the argument.

(z) “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.

• So who are the nurseries licensed by then?

(aa) “Office” means the Office of Marijuana Regulation.

• I want an office…..

(ab) “Permit,” “local license,” or “local permit” means an official document granted by a local jurisdiction that authorizes a person to conduct commercial cannabis activity in the local jurisdiction.

• This is where the provisional licensing requirements could make an issue for those who process and manufacture items currently, as it will take a lot of time and political process to get any “permits, local licenses, and/or local permits” for the entire production sector of the industry. Certainly having to have one by a deadline could make it nearly impossible to overcome.

(ac) “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.

• Corporations are people my friend….

(ad) “State license ” or “license” means a state license issued pursuant to this chapter.

(ae) “Topical cannabis” means a manufactured product intended for external use.

(af) “Transport” means the commercial transfer of medical cannabis or medical cannabis products from the business location of one licensee to another licensee, for the purposes of conducting commercial cannabis activity authorized by licensees pursuant to this chapter.

Article  2. Administration

19301.

 This chapter shall be known, and may be cited, as the Medical Cannabis Regulation and Control Act.

19302.

There is hereby created within the office of the Governor, the Governor’s Office of Marijuana Regulation, under the supervision and control of the Director of the Office of Marijuana Regulation, who shall be appointed by the Governor. The Governor shall appoint the director at a salary to be fixed and determined by the director with the approval of the Director of Finance. The director shall serve in accordance with the State Civil Service Act (Part 2 (commencing with Section 18500) of Division 5 of Title 2 of the Government Code).

• Put in a good word for me…. LOL. But who does get this job could be a major issue for sure.

(b) The director shall be the appointing power of all employees within the office, and all heads of divisions, bureaus, and other employees in the office shall be responsible to the director for the proper carrying out of the duties and responsibilities of their respective positions.

(c) In developing a regulatory framework pursuant to this chapter, the director shall consult with state agencies possessing expertise in licensure and enforcement, including, but not limited to, the Department of Alcoholic Beverage Control and the Department of Consumer Affairs.

• Does the fact that this is 6^th state agency named so far worry anyone else?

(d) The office shall have overall executive authority and responsibility for implementation of all aspects of cannabis regulation pursuant to this chapter.

(e) The office shall coordinate and provide oversight of all activities described in this chapter. The office shall lead all state and local authorities regarding the tracking of medical cannabis, medical cannabis products, and licensees pursuant to this chapter. All departments and divisions specified in Section 19304 shall report directly to the office. Any information technology systems created to store and process data related to commercial cannabis licensing shall be integrated, and all licensing data shall be immediately available to each licensing authority and to the office.

• Broad sweeping power in this office….

19303.

 The office shall maintain a registry of all permit holders and shall 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. The office shall 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.

19304.

 (a) The following entities shall report to and be directly accountable to the office for their respective designated responsibilities within the regulatory and enforcement framework, as follows:

(1) The Division of Medical Cannabis Regulation, which is established within the State Board of Equalization, shall do all of the following:

(A) Be administered by a person who is appointed by the State Board of Equalization.

(B) Administer this chapter, as it pertains to commercial cannabis activity relating to dispensaries and transporters.

(2) The Division of Medical Cannabis Manufacturing and Testing, which is established within the State Department of Public Health, shall do all of the following:

(A) Be administered by a person who is appointed by the Governor.

(B) Administer this chapter, as it pertains to manufacturing, testing, and certification of testing laboratories for medical cannabis and medical cannabis products.

(3) The Division of Medical Cannabis Cultivation, which is established within the Department of Food and Agriculture, shall do all of the following:

(A) Be administered by a person who is appointed by the Governor.

(B) Administer this chapter as it pertains to cultivation of medical cannabis.

(4) The California Environmental Protection Agency and the California Natural Resources Agency shall coordinate and direct the following entities in the discharge of their designated regulatory responsibilities:

• Here are the 7^th and 8^th agencies named….

(A) The State Water Resources Control Board shall promulgate regulations related to discharge into waterways, and diversion therefrom, resulting from cannabis cultivation.

(B) The Department of Fish and Wildlife shall promulgate regulations for the protection of any species affected by cultivation activity, and regulations for any cultivation-related development, including alteration of waterways.

• 9^th and 10th

(5) The Department of Justice shall conduct the following activities:

• 11^th agency…

(A) Perform criminal background checks of applicants for licensure.

(B) Develop uniform security standards for dispensaries and all phases of transport covered by this chapter.

(C) Provide supplemental enforcement on an as-needed basis at the request of the office.

19305.

 (a) The office and licensing authorities shall have the authority necessary for the implementation of this chapter, including, but not limited to, all of the following:

(1) Establishing rules or regulations necessary to carry out the purposes and intent of this chapter and to enable the office and licensing authorities to exercise the powers and perform the duties conferred by this chapter and in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. These rules and regulations shall not limit the authority of a city, county, or city and county specified in Article 3 (commencing with Section 19307), or specified in Section 7 of Article XI of the California Constitution, or any other law. For the performance of its duties, the office has the powers set forth in Article 2 (commencing with Section 11180) of Chapter 2 of Part 1 of Division 3 of Title 2 of the Government Code. The office shall review all regulations and guidance promulgated by licensing authorities in the administration of this chapter to ensure no duplication, overlap, or inconsistent regulations occur between licensing authorities.

• The whole damn state is full of inconsistencies in the law, so good luck.

(2) Issuing state licenses to persons for the cultivation, manufacture, transportation, and sale of medical cannabis within the state.

(3) Setting application, licensing, and renewal fees for state licenses issued pursuant to this chapter.

(4) Establishing standards for commercial cannabis activity.

(5) Establishing procedures for the issuance, renewal, suspension, denial, and revocation of state licenses.

(6) Imposing a penalty authorized by this chapter or any rule or regulation adopted pursuant to this chapter.

(7) Taking action with respect to an application for a state license in accordance with procedures established pursuant to this chapter.

(8) Overseeing the operation of the Medical Cannabis Regulation Fund, established pursuant to Section 19361.

(9) Consulting with other state or local agencies, departments, representatives of the medical cannabis community, or public or private entities for the purposes of establishing statewide standards and regulations.

(b) Protection of the public shall be the highest priority for the office and the licensing authorities in exercising the licensing, regulatory, and disciplinary functions pursuant to this chapter. Whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount.

• The list above is a massive undertaking of this office which at this time just does not exist. Strange that this entirely new entity and “office” are going to be capable of implementing all of these tasks effectively. Or that the many interworking parts are going to play nicely together in order to make the program flow. All it takes is one agency stick in the mud to throw off the whole deal.

19306.

 (a) The office, by March 1, 2016, shall convene a task force, which shall advise the office on the development of standards pursuant to this chapter. The task force shall be responsible for recommending to the office the appropriate roles of each state entity as it pertains to this chapter, and shall recommend guidelines on communication and information sharing between state entities, and with local agencies, for implementation of this chapter. Notwithstanding Section 10231.5 of the Government Code, the task force shall submit a report on these standards, determinations, and guidelines for implementation of this chapter to the Legislature and state entities affected by this chapter by August 1, 2016. The report submitted to the Legislature shall be submitted in compliance with Section 9795 of the Government Code.

• Tasks forces have always proven to be very productive. (rolls eyes)

(b) The task force shall be comprised of representatives of medical cannabis consumer advocates, environmental experts, public health experts, medical cannabis industry representatives, related regulatory authorities, labor, and law enforcement. The task force may also be comprised of representatives of the State Board of Equalization and Attorney General, and other state agencies, as deemed appropriate. The task force shall have a minimum of nine members, with one-third of the members appointed by the California State Assembly, one-third of the members appointed by the California State Senate, and one-third of the members appointed by the Governor. If there is an unequal divide between these three entities, the Governor shall make appointments for the difference.

• Yes. I am certain the Assembly, the Senate, and the Governor will appoint folks who really have the interests of patients and providers in mind. Scary…

(c) Task force members shall serve on a voluntary basis and shall be responsible for costs associated with their participation in the task force. The licensing authorities shall not be responsible for travel costs incurred by task force members or otherwise compensating task force members for costs associated with their participation in the task force.

Article  3. Enforcement and Local Control

19307.

 (a) Each licensing authority shall work in conjunction with law enforcement agencies for the purposes of implementing, administering, and enforcing this chapter, and any regulations adopted pursuant to this chapter and taking appropriate action against licensees and others who fail to comply with this chapter or the regulations adopted pursuant to this chapter.

• Always love law enforcement agencies to be involved. I thought we were talking civil matters though, right?

(b) The director and the persons employed by the licensing authorities for the administration and enforcement of this chapter are, for purposes of this chapter, peace officers in the enforcement of the penal provisions of this chapter, the regulations adopted pursuant to this chapter, and any other penal provisions of law prohibiting or regulating the cultivation, processing, storing, manufacturing, testing, transporting, or selling of medical cannabis. These persons may, while acting as peace officers, enforce any penal provisions of state law while in the course of their employment. GROSS

(c) The regulatory directors, persons employed by the licensing authorities for the administration and enforcement of this chapter, peace officers listed in Section 830.1 of the Penal Code, and officers listed in Section 830.6 of the Penal Code, while acting in the course and scope of their employment as peace officers, may, in enforcing this chapter, visit and inspect the premises of a licensee at any time during which the licensee is acting pursuant to the state license.

• Any time…. Awesome.

(d) Peace officers of the Department of the California Highway Patrol, members of the University of California and California State University police departments, and peace officers of the Department of Parks and Recreation, as defined in subdivisions (a), (b), (c), and (f) of Section 830.2 of the Penal Code, may, in enforcing this chapter, visit and inspect the premises of a licensee at any time during which the licensee is acting pursuant to the state license.

• Again with the “any time”

19308.

 (a) The office shall, in consultation with local governments, develop an enforcement framework that clarifies the enforcement roles of the state and local governments. Local agencies are authorized to enforce any state statutory or regulatory standard.

• Any local cop with an axe to grind can enforce whatever the fuck he wants really….

(b) A state agency is not required by this section 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.

19309.

 (a) 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 rules, regulations, and standards promulgated by the office. 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, without liability, cost, or expense to the county.

• City and County control powered by the state…. Interesting.

(b) For licensed facilities located within the unincorporated area of a county, the county shall have full power and authority to enforce this chapter and the rules, regulations, and standards promulgated by the office.

(c) It is the intent of the Legislature in enacting this chapter to provide for the statewide regulation of the commercial cannabis activity and the enforcement of laws relating to commercial cannabis activities without preempting city, county, or city and county ordinances regulating or banning these activities. This chapter is an exercise of the police powers of the state for the protection of the safety, welfare, health, peace, and morals of the people of the state.

• Bans are here to stay forever, cemented into the law.

(d) 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.

19310.

 (a) The director of a licensing authority or a district attorney, county counsel, city attorney, or city prosecutor may bring an action in the name of the people of the State of California to enjoin a violation or the threatened violation of any provision of this chapter, including, but not limited to, a licensee’s failure to correct objectionable conditions following notice or as a result of a rule promulgated pursuant to this chapter, and to assess and recover civil penalties in accordance with this chapter. The action shall be brought in the county in which the violation occurred or is threatened to occur. A proceeding for injunctive relief brought pursuant to this chapter shall conform to the requirements of Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure.

• That is a lot of people who can bring actions against cannabis providers….

(b) A state or local agency shall immediately notify the office 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. Notice shall be given within 10 days of the violation or arrest. The office or licensing authority shall promptly investigate as to whether grounds exist for suspension or revocation of the state license.

(c) This chapter shall not be construed to limit a law enforcement agency’s ability to investigate unlawful activity in relation to a state license.

(d) Nothing in this chapter shall prevent a city or other local governing body from taking action as specified in Section 11362.83 of the Health and Safety Code.

(e) The office shall establish procedures to provide state and local law enforcement, 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. This record shall allow state and local law enforcement to verify a state license and provide summary information on licensees consisting of the name of the licensee, the date the license was issued, the status of the license, and the licensee’s mailing address.

19311.

 (a) Licensing authorities and any relevant local agency may examine the books and records of a licensee and may visit and inspect the premises of a licensee as the licensing authority or local agency deems necessary to perform their duties under this chapter or local ordinance.

• So they can inspect at will with no cause or need for legal representation on behalf of the licensee.

(b) If the licensee or any employee of the licensee refuses, impedes, obstructs, or interferes with an inspection pursuant to this chapter or local ordinance, or if the licensee fails to maintain or provide the books and records required by this chapter, the license may be summarily suspended and the licensing authority shall commence proceedings for the revocation of the state license in accordance with this chapter.

(c) All cultivation and dispensing licensees shall be subject to an annual audit, as specified by the licensing authority, in order to ensure proper documentation is kept at each facility. The reasonable costs of the audit shall be paid for by the licensee.

• Why not the other licensees, as well? Yearly audit that I have to pay “reasonable fees” for. Hmm

19312.

 (a) This chapter shall in no way supersede the provisions of Measure D, approved by the voters of the City of Los Angeles on the May 21, 2013, ballot for the city, which granted medical cannabis businesses and dispensaries qualified immunity consistent with the terms of the measure and local ordinances. Notwithstanding the provisions of this part, cannabis businesses and dispensaries subject to the provisions of Measure D and its qualified immunity shall continue to be subject to the ordinances and regulations of the City of Los Angeles.

(b) It is the intent of the Legislature to recognize the unique circumstances of the City of Los Angeles with respect to Measure D and associated rules related to commercial cannabis activity.

• Why the LA situation is not subject to the same regulation as other cities is baffling. The union worked the shit out of this angle to protect their own. BTW… how is the Measure D deal working out? (rolls eyes)

19313.

 (a) The actions of a licensee or provisional licensee, its employees, and its agents, that are permitted pursuant to both a state license or provisional license and a license or permit issued by the local jurisdiction following the requirements of the applicable local ordinances, and that are 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 actions of a person who, in good faith and upon investigation, allows his or her property to be used by a licensee or provisional licensee, its employees, and its agents, as 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, 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.

(c) Conduct that is within the scope of a license issued pursuant to this chapter and permitted by local ordinance but not fully in compliance with this chapter shall be subject to the enforcement provisions of this chapter and shall not be subject to the penal provisions of state law generally prohibiting cannabis-related activity, unless and until the license is revoked.

(d) This section shall not be deemed to limit the authority or remedies of a city, county, or city and county under any provision of law, including, without limitation, Section 7 of Article XI of the California Constitution.

19314.

 (a) A person engaging in commercial cannabis activity and operating an unlicensed facility, building, structure, vehicle, mobile unit, or location in violation of this chapter shall be subject to civil penalties of up to twice the amount of the license fee for each violation, and the office, licensing 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 19361.

• So if you are caught growing without a license you have to pay twice the licensing fee EVERY day. Seems legit.

(b) If an action for civil penalties is brought by the Attorney General, the penalty collected shall be deposited into the General Fund. 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 in which the judgment was entered.

19315.

 (a) This chapter does not, nor do Article 2 (commencing with Section 11357) and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety Code, prevent a city, county, or city and county from doing any of the following:

(1) Adopting local ordinances inconsistent with this chapter that do the following:

(A) Regulate the location, operation, or establishment of a licensee or a person that cultivates, processes, possesses, stores, manufactures, tests, transports, distributes, or sells medical cannabis.

(B) Prohibit commercial cannabis activity within their jurisdiction.

(2) Providing for the administrative, civil, or criminal enforcement of the ordinances described in paragraph (1).

(3) Establishing a fee or tax for the operation of a licensee within its jurisdiction.

(4) Enacting and enforcing other laws or ordinances pursuant to the authority granted by Section 7 of Article XI of the California Constitution.

(b) Nothing in this chapter or in Article 2 (commencing with Section 11357) or Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety Code, shall prevent a city, county, or city and county from adopting or enforcing a zoning ordinance or other law, ordinance, or regulation that bans or regulates the location, operation, or establishment of a licensee or other person that engages in commercial cannabis activity.

• Good to know the league of cities got their way and that municipalities can make their own rules for everything.

Article  4. Licensure

19316.

 (a) This chapter shall not apply to, and shall have no diminishing effect on the protections granted to, a patient or a primary caregiver pursuant to the Compassionate Use Act of 1996.

(b) (1) A patient who cultivates, possesses, stores, manufactures, or transports cannabis exclusively for his or her personal medical use but who does not provide, donate, sell, or distribute cannabis to any other person is not, thereby, engaged in commercial cannabis activity and is, therefore, exempt from the licensure requirements of this chapter.

(2) A primary caregiver who cultivates, possesses, stores, manufactures, transports, donates, or provides cannabis exclusively for the personal medical purposes of no more than five specified qualified patients for whom he or she is the primary caregiver within the meaning of Section 11362.7 of the Health and Safety Code but who does not receive remuneration for these activities except for compensation in full compliance with subdivision (c) of Section 11362.765 of the Health and Safety Code is not engaged in commercial cannabis activity and is, therefore, exempt from the licensure requirements of this chapter.

• So no more than 5 patients per caregiver. Where did this arbitrary number come from? Are other caregivers limited as such? What does this accomplish?

(c) Exemption from the license requirements of this chapter shall 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.

• We get it… you can ban everything if you want.

19317.

 The state shall have the right and authority to conduct state licensure activities and to regulate commercial cannabis activity pursuant to this chapter. Local governments have the right and authority to grant permits and regulate commercial cannabis activity within their jurisdiction pursuant to local ordinances. In the exercise of these rights and powers, the state and each of its agencies, and all local agencies, are hereby deemed not to be engaged in activities requiring licensure under this chapter.

• So any agencies…. Quagmire for sure.

19318.

 (a) Licensing authorities shall issue state licenses to qualified applicants engaging in commercial cannabis activity pursuant to this chapter. Beginning January 1, 2018, no person shall engage in commercial cannabis activity without possessing a state license and a local permit. For purposes of this section, “state license” includes a provisional license issued pursuant to Article 6 (commencing with Section 19330).

• 2018? Bajeezus…. We should be knee deep in adult use regulations by then.

(b) Local permits shall be determined by local ordinances. Licensing authorities issuing state licenses shall have sole authority to revoke a state license. Local agencies issuing local permits shall have sole authority to revoke a local permit.

• Double the permits. Double the fun.

(c) The issuance of a state license shall not, in and of itself, authorize the recipient to begin business operations. The state license shall certify, at a minimum, that the applicant has paid the state licensing fee, successfully passed a criminal background check, and met state residency requirements.

(d) Even if a state license has been granted pursuant to this chapter, a facility shall not operate in a local jurisdiction that prohibits the establishment of that type of business. A facility 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 ordinances.

• The dead horse being beaten here means you cannot operate where there is a ban. Yeah… We got that the last 19 times you said it.

(e) If a local government agency notifies the office or a licensing authority and provides evidence that a licensee or applicant within its jurisdiction is in violation of local ordinances relating to commercial cannabis activities, the licensing authority shall revoke the state license within 20 working days.

• So if the locals get a stick up their ass you are fucked at the state too. Good to know.

(f) Revocation of either a state or local license shall terminate the ability of a medical cannabis business to operate within California.

19319.

 (a) On or before July 1, 2017, a licensing authority shall promulgate regulations for implementation and enforcement of this chapter, including, but not limited to, all of the following:

• So before July 2017 (rolls eyes) they will have regulations figured out for the most part.

(1) A description of the various specific forms of commercial cannabis activity to be authorized by the various types of licenses.

(2) Procedures for the issuance, renewal, suspension, denial, and revocation of a state license.

(3) Procedures for appeal of fines and the appeal of denial, suspension, or revocation of a state license.

(4) Application, licensing, and renewal forms and fees.

(5) Time periods, not to exceed 90 days, by which the licensing authority shall approve or deny an application for a state license. The failure of the licensing authority to act upon an application for licensure within the time prescribed shall not be deemed approval of the application.

(6) Qualifications for licensees.

(7) Security requirements, including, but not limited to, procedures for limiting access to facilities and for the screening of employees.

(8) Requirements to ensure that all licensees and certified testing laboratories conform with applicable standards equivalent to state statutory environmental, agricultural, consumer protection, and food and product safety requirements. These standards shall be in addition, and not limited, to any other state and local requirements.

• Going to have to be a lot of work done to standardize labs before this is relevant.

(b) Each state license application approved by the respective licensing authority pursuant to this chapter is separate and distinct.

(c) A state license application approved by a licensing authority pursuant to this chapter shall be valid for a period not to exceed one year from the date of approval unless revoked or suspended earlier than that date pursuant to this chapter or the rules or regulations adopted pursuant to this chapter.

(d) Each licensing authority may adopt regulations for additional licenses for cannabis activity within its statutory jurisdiction pursuant to this chapter, as deemed necessary.

(e) Each state license application approved by a licensing authority shall be reported to the office within 24 hours of its approval.

(f) A licensing authority shall not issue a state license unless the applicant has met all of the requirements of this chapter.

(g) Each licensing authority shall adopt regulations as needed to implement the relevant licensing program within one year following the establishment of provisional licenses, pursuant to Section 19330. The regulations shall not limit the authority of a city, county, or city and county pursuant to Section 7 of Article XI of the California Constitution or any other law. The regulations shall do all of the following:

• Provisional licensing is where things will get ugly for sure….

(1) Establish procedures for approval or denial of applications for state licensure for each and every aspect of commercial cannabis activity, including, but not limited to, cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, and sale of cannabis.

(2) Establish applicant qualifications.

(3) Establish state licensee employee qualifications, including, but not limited to, training and screening requirements.

• Wanna bet UFCW’s apprentice program is one of the training requirements?

(4) Establish state licensee security requirements, including, but not limited to, procedures to limit access to facilities and to prevent diversion of product to nonmedical use.

(5) Establish procedures and protocols for identifying, managing, and disposing of contaminated, adulterated, deteriorated, or excess product.

(6) Establish advertising, marketing, signage, and labeling requirements and restrictions.

(7) Establish procedures for the suspension, revocation, or surrender of a state license, and establishing related fines and penalties to be assessed against licensees for violations of this chapter.

• All of this law, and virtually nothing is really spelled out and left up to bureaucrats to decide.

19320.

 (a) An applicant for a state license shall do all of the following:

(1) Pay the fee or fees required by this chapter for each state license for which an application is submitted.

(2) Register with the licensing authority on forms prescribed by the licensing authority. The forms shall contain sufficient information to identify the licensee, including all of the following:

(A) Name of the owner or owners of a proposed facility, including all persons or entities having an ownership interest other than a security interest, lien, or encumbrance on property that will be used by the applicant.

(B) The name, address, and date of birth of each principal officer and board member.

(C) The address and telephone number of the proposed facility.

(3) In the case of a dispensary, provide the name and address of each licensed cultivation site and licensed manufacturer from which the dispensary will acquire or obtain medical cannabis or medical cannabis products.

• So how does a dispensary declare what licensed grower will provide cannabis if none are licensed before them?

(4) Provide a description, in writing, of the scope of business of the proposed facility.

(5) Provide evidence that the applicant and owner have been legal full-time residents of the state for not less than two years.

• What other businesses require this type of residency threshold?

(6) Provide detailed operating procedures, in writing, for the proposed facility, which shall include, but not be limited to, procedures for facility and operational security, prevention of diversion, employee screening, storage of medical cannabis, personnel policies, and recordkeeping procedures.

(7) Submit the applicant’s fingerprint images as follows:

(A) For purposes of this paragraph, “applicant” means the owner or owners of a proposed facility, including all persons or entities having an ownership interest other than a security interest, lien, or encumbrance on property that will be used by the facility. If the owner is an entity, fingerprints shall be submitted for each person participating in the direction, control, or management of, or having a financial interest in, the proposed facility.

(B) The applicant shall 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.

(C) 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.

(D) 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.

(E) The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.

(8) If applicable, provide documentation that the applicant will be in compliance with all local ordinances and regulations, including, but not limited to, an entity granted immunity under Measure D, approved by the voters of the City of Los Angeles at the May 21, 2013, general election.

(9) Provide evidence of the legal right to occupy and use an established location, including that, if the proposed facility is a cultivator or a dispensary, that the proposed facility is located beyond at least a 600-foot radius from a school, or, if applicable, an immunity from prosecution for that occupancy or use pursuant to Measure D, approved by the voters of the City of Los Angeles at the May 21, 2013, general election.

• 600 ft and the feds still say 1000 ft. Way to go.

(10) Provide a statement, signed by the applicant under penalty of perjury, that the information provided is true.

(11) (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.

• Forced unionization for businesses over 20 employees? Where else does this happen? Maybe an organization will limit who it hires to stay below this threshold? Good to know UFCW lobbying is this effective though.

(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.

(12) Provide any other information required by the licensing authority.

(13) 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.

(14) For an applicant seeking a cultivation or dispensary license, provide a notarized statement from the owner of real property or landlord where the cultivation or dispensing commercial medical cannabis activities will occur, as proof to demonstrate the landowner has acknowledged and consented to permit cultivation or dispensary activities to be conducted on the property by the tenant applicant.

(b) Each location and each discrete use of a single location shall require a separate state license. Each application for a state license is separate and distinct, and the licensing authority may charge a separate fee for each.

(c) For applicants seeking a state license to cultivate and manufacture, the application shall also include a detailed description of the operating procedures for all of the following, as applicable:

(1) Cultivation.

(2) Extraction and infusion methods.

(3) The transportation process.

(4) Inventory procedures.

(5) Quality control procedures.

19321.

 (a) Upon receipt of an application for licensure and the applicable fee, each licensing authority shall make a thorough investigation to determine whether the applicant and the premises for which a state license is applied qualify for the state license and whether this chapter has been complied with, and shall investigate all matters connected therewith that may affect the public welfare and morals.

(b) A licensing authority shall deny an application if either the applicant or the premises for which a state license is applied do not qualify for licensure under this chapter.

(c) A licensing authority may place reasonable conditions upon licensure if grounds exist for denial of the state license, and the licensing authority finds those grounds may be removed by the imposition of those conditions. However, the limitations set forth in paragraph (15) of subdivision (d) shall not be waived.

(d) Each licensing authority shall deny the application for licensure or renewal, or suspend or revoke a state license, if any of the following conditions apply:

(1) An entity making or authorizing in any manner or by any means a written or oral statement that is untrue or misleading and that is known, or that by exercise of reasonable care should be known, to be untrue or misleading.

(2) Conduct that constitutes fraud.

(3) Conduct constituting gross negligence.

(4) Failure to comply with the provisions of this chapter or any rule or regulation adopted pursuant to this chapter.

(5) Conduct that constitutes grounds for denial of licensure pursuant to Chapter 2 (commencing with Section 480) of Division 1.5.

(6) Local agencies have notified the licensing authority or the office and provided evidence that a licensee or applicant within its jurisdiction is in violation of local ordinances relating to medical cannabis activities.

(7) The applicant fails to meet the requirements of this chapter or any regulation adopted pursuant to this chapter or any applicable city, county, or city and county ordinance or regulation. If a local government adopts an ordinance or resolution authorizing medical cannabis to be cultivated, manufactured, stored, distributed, or sold within its jurisdiction, it shall submit to the office documentation detailing their renewal requirements.

(8) Granting or continuation of a state license would be contrary to the public welfare or morals.

(9) The applicant holding or seeking a state license has violated any law prohibiting conduct involving moral turpitude.

(10) The application has failed to state with sufficient specificity the jurisdiction and location at which the applicant proposes to establish operations.

(11) The applicant, or any of its officers, directors, or owners, is under 21 years of age.

(12) The applicant fails to provide notarized written proof that the owner of real property or landlord has acknowledged and consented to its tenant’s proposed cultivation or dispensing of medical cannabis or medical cannabis products.

(13) The applicant has failed to provide information requested.

(14) The applicant, or any of its officers, directors, or owners, has been convicted of a felony criminal conviction for drug trafficking involving a minor, felonies subject to enhancements Section 11370.4 or 11379.8 of the Health and Safety Code, a violent felony, as specified in subdivision (c) of Section 667.5 of the Penal Code, a serious felony as specified in subdivision (c) of Section 1192.7 of the Penal Code, 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. The licensing authority may, at its discretion, issue a state license to an applicant that has obtained a certificate of rehabilitation pursuant to Section 4852.13 of the Penal Code.

• This is super unclear and leaves a lot of former “marijuana crimes” up to interpretation. I am pretty sure that I would be excluded from the industry because I was arrested and convicted for a crime of doing exactly what is being licensed here. That amazes me.

(15) The applicant, or any of its officers, directors, or owners, is a licensed physician making patient recommendations for medical cannabis.

(16) The applicant, or any of its officers, directors, or owners, has been sanctioned by a licensing authority, the office, or a city, county, or a city and county for unlicensed commercial medical cannabis activities or has had a license revoked under this chapter in the previous three years.

(17) The applicant, or any of its officers, directors, or owners, has been subject to fines or penalty for cultivation or production of a controlled substance on public or private lands pursuant to Section 12025 of the Fish and Game Code.

(18) The proposed commercial medical cannabis activity will violate any applicable local law or ordinance.

(19) The applicant has had 20 employees or more in the past year and failed to enter into a labor peace agreement.

• (rolls eyes)

(20)  The applicant or the owner is unable to establish that he or she has been a resident of the state for not less than 2 years.

(e) Applicants shall be notified of a denied application in writing via personal service or mail addressed to the address of the applicant or licensee set forth in the application. The denial letter shall contain the detailed reasons for which the application was denied. The applicant shall have the right to appeal the denial and be given a hearing within 30 days of the appeal. On appeal, the decision shall be upheld unless the applicant demonstrates that the applicant is in fact eligible for licensure and the application is in compliance with this chapter.

19323.

 (a) Provided the applicant has not committed an act or crime constituting grounds for the denial of licensure under Section 19321, a licensing authority may issue a state license and send a proof of issuance to the applicant.

(b) A licensing authority shall, by regulation, prescribe conditions upon which a person whose state license has previously been denied, suspended, or revoked, may be issued a state license.

19324.

 The office may adopt regulations to limit the number of state licenses issued pursuant to this chapter upon a finding that the otherwise unrestricted issuance of state licenses is dangerous to the public health and safety.

• So there will be a cap on the amount of licenses issued, similar to liquor licenses.

Article  5. Regulation of Medical Cannabis

19325.

 (a) Except as provided in Section 11362.5 of, and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of, the Health and Safety Code, a person shall not sell medical cannabis to a patient or caregiver other than at a licensed dispensing facility or through delivery from a licensed dispensing facility.

• So only a dispensary can deliver? Then what was the definition of delivery service meant to accomplish?

(b) Except as provided in Section 11362.5 of, and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of, the Health and Safety Code, a person shall not grow medical cannabis other than at a licensed cultivation site.

(c) Except as provided in Section 11362.5 of, and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of, the Health and Safety Code, a person other than a licensed manufacturer shall not manufacture medical cannabis or medical cannabis products.

(d) A person other than a licensed transporter shall not transport medical cannabis from one facility issued a state license to another.

(e) A licensed manufacturer may obtain medical cannabis from a licensed cultivator and may furnish medical cannabis products to a licensed dispensary.

(f) Medical cannabis and medical cannabis products shall be tested by a certified testing laboratory.

• Should get interesting….

(g) For purposes of this section, “license” includes a provisional license issued pursuant to Section 19330.

• Dun-dun-dun….

(h) This section shall become operative on July 1, 2017.

19326.

 (a) A licensee shall not cultivate, process, store, manufacture, transport, or sell medical cannabis in the state unless accurate records are kept at the licensed premises of the growing, processing, storing, manufacturing, transporting, or selling by the licensee.

(b) A licensee shall keep, at the licensed premises, accurate records of the specific commercial cannabis activity conducted by the licensee. The records shall include, at a minimum, all of the following for each batch of product:

(1) The name and address of the supplier.

(2) The dates on which the product was received.

(3) The amounts, form, and batch and lot number.

(4) The location of the cultivation site.

(5) The name of the employee who received the product.

(6) Records demonstrating compliance by the licensee with state and federal rules and regulations regarding reporting and taxation of income received.

(7) Receipts for all expenditures incurred by the licensee and banking records, if any, for all funds obtained or expended in the performance of any activity under the authority of the state license.

(c) Records shall be kept for a minimum of seven years.

(d) The office and an appropriate state or local agency may examine the books and records of a state licensee and may visit and inspect the premises of a state licensee, as the office or state or local agency deems necessary to perform its duties under this chapter.

(e) Books or records requested by the office or an appropriate state or local agency shall be provided by the licensee no later than five business days after the request is made.

(f) The office or a state or local agency may enter and inspect the premises of a facility issued a state license between the hours of 8 a.m. and 8 p.m. on any day that the facility is open, or at any reasonable time, to ensure compliance and enforcement of the provisions of this chapter or a local ordinance.

(g) If a licensee or an employee of a licensee refuses, impedes, obstructs, or interferes with an inspection pursuant to this section, the state license may be summarily suspended and the licensing authority shall directly commence proceedings for the revocation of the state license.

(h) If a licensee or an employee of a licensee fails to maintain or provide the books and records required pursuant to this section, the licensee shall be subject to a civil fine of fifteen thousand dollars ($15,000) per individual violation.

(i) All cultivation and dispensing licensees shall be subject to an annual audit, as specified by the licensing authority, in order to ensure proper documentation is kept at each site or facility. The reasonable costs of the audit shall be paid for by the licensee.

• Gives a lot of power to regulators without any need for just cause…. And not to mention, forces people to incriminate themselves as long as weed is still federally illegal.

19327.

 (a) A licensee may only hold a state license in up to two separate license categories, as follows:

• This is a real shit show. Why they would complicate matters in this way is beyond ridiculous.

(1) Type 1, 1A, and 5 licensees may apply for type 6A, 6B, 7A, and 7B licenses or type 10, 11, and 12 licenses.

(2) Type 6A, 6B, 7A, and 7B licensees may apply for type 1, 1A, and 5 licenses or type 10, 10D, 11, 11D, 12, and 12D licenses.

(3) Type 10, 11, and 12 licensees may apply for type 1, 1A, and 5 licenses or type 6A, 6B, 7A, and 7B licenses.

(4) Type 10D, 11D, and 12D licensees may apply for type 6A, 6B, 7A, and 7B licenses.

(b) Types 2, 2A, 3, 3A, 4, and 8 licensees shall not hold licenses in any other category.

(c) Type 9 licensees may apply only for one additional license from either the cultivation, manufacturing, or dispensing category.

(d) It is the intent of the Legislature to further develop which licensees may hold more than one license type.

• Are you confused yet?

19328.

 Each licensing authority shall make recommendations to the Legislature pertaining to the establishment of an appeals and judicial review process for persons aggrieved by a final decision of the licensing authority.

19329.

 This chapter and Article 2 (commencing with Section 11357) and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety Code do not require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of cannabis in the workplace or affect the ability of employers to have policies restricting the use of cannabis by employees, or prevent employers from complying with federal law.

Article  6. Provisional Licensing

19330.

 (a) Each licensing authority shall, as soon as practicable following January 1, 2016, allow a qualified applicant for licensure to apply for and receive a provisional license to engage in commercial cannabis activity so as to ensure an adequate supply of medical cannabis upon full implementation of this chapter.

• Here is where the law will die. MOST local municipalities do not have regulations in place for production. It will take incredible political capital and desire to get these local laws passed, and most will either fail completely or take upwards of a year plus to accomplish. Have you ever seen thousands of growers dig up their money and try to bribe their local officials? This will be exciting. Considering most municipalities these days are actively trying to ban production, it blows my mind that somehow lawmakers believe anything will be “practicable” about this process.

(b) Each licensing authority shall establish appropriate fees not to exceed the reasonable regulatory costs to the licensing authority for the issuance of a provisional license under its jurisdiction.

(c) Each licensing authority shall, if the applicant meets all the requirements in this section, issue a provisional license to individuals and entities that the licensing authority determines were, during the three months prior to January 1, 2016, regularly cultivating, processing, manufacturing, transporting, or distributing medical cannabis collectively or cooperatively in full compliance with any applicable local ordinance, and to continue to do so until the licensee’s application for a state license has been approved or denied under this chapter, but no later than 90 days after the licensing authority begins accepting applications for regular state licenses. The licensing authority may consult with relevant local agencies in making a determination on whether a provisional license applicant is in compliance with applicable ordinances.

• This is where the industry dies completely. NO ONE who grows or manufactures products are licensed or are in full compliance with any local ordinance, and none will be by this deadline. Sorry. You are all fucked. Thanks for playing. No more weed for anyone. Go home. The party is over. Here is where corruption will become king and everyone will be absolutely 100% fucked. This is your poison pill. Not sure what they don’t get about that, or how anyone in our industry does not see that and still supports this shit.

(d) To qualify for a provisional license, an applicant shall disclose to the appropriate licensing authority all of the following information in writing:

(1) The names, addresses, and dates of birth of each principal officer, owner, or board member.

(2) The common street address and assessor’s parcel number of the property at which the licensee conducts activity under the authority of the license.

(3) The common street address and assessor’s parcel number of the property at which cultivation activity was or is to be conducted.

(4) For the three months prior to January 1, 2016, the quantity of cannabis cultivated, processed, manufactured, tested, transported, or sold at a location, and the quantity expected to be cultivated, processed, manufactured, tested, transported, or sold from January 1, 2016, to July 1, 2016, inclusive. The licensee shall make its records of current activity, and activity for the three months prior to January 1, 2016, available to the licensing authority upon request.

• Yeah. I know you didn’t even know our grow existed a few months ago, but we grew 200 pounds that we want to report to you. No big deal, right? We are good, right?

(5) For an applicant seeking a cultivation or dispensary license, a notarized statement from the owner of real property or landlord where the cultivation or dispensing of commercial cannabis activities will occur, as proof to demonstrate the landowner has acknowledged and consented to permit cultivation or dispensary activities to be conducted on the property by the tenant applicant.

(e) Upon receipt of the application materials and fee, if the applicant meets all the requirements of this section and if the applicant has not committed any act or crime constituting grounds for the denial of licensure, the licensing authority shall issue a provisional license and send a proof of issuance to the applicant.

(f) Notwithstanding any other provision of this section, a licensing authority shall not issue a provisional license to an individual or entity, or for a premises, against whom there are pending state or local administrative or judicial proceedings or actions initiated by a city, county, or city and county under an applicable local ordinance, or who has been determined through those proceedings to have violated a local ordinance related to cannabis activity, or that knowingly provides false or fraudulent information on an application for licensure.

(g) Entities that are provided immunity under Measure D, approved by the voters of the City of Los Angeles at the May 21, 2013, general election, shall be considered the equivalent of entities that are registered, permitted, or licensed as a medical cannabis business, dispensary, or other entity involved in providing medical cannabis to patients under a local ordinance and shall be considered in compliance with a local ordinance for the purposes of this section.

(h) A provisional licensee shall comply with all standards and requirements applicable to a licensee under this chapter, including, but not limited to, the production, recordkeeping, security, and transportation requirements and standards.

(i) Beginning July 1, 2017, all commercial cannabis activity shall be conducted between licensees of commercial cannabis activity. If the licensing authority has not promulgated its respective regulations by that date, the licensing authority shall provide an extension for all provisional licenses for applicants abiding by the provisions of this chapter.

Article  7. Licensed Cultivation Sites

19332.

 (a) The Division of Medical Cannabis Cultivation in the Department of Food and Agriculture shall promulgate regulations governing the licensing of cultivation sites. For purposes of this chapter, the Secretary of the Department of Food and Agriculture shall declare medical cannabis to be an agricultural product. The department shall develop standards for the production and labeling of all edible medical cannabis products, standards for the use of pesticides and rodenticides in cultivation, and, in consultation with the State Department of Public Health, maximum tolerances for pesticides, rodenticides, and other foreign object residue in harvested cannabis.

• So if cannabis is an agricultural product, what other types of ag products can be banned? Can a City tell you that you cannot grow green beans?

(b) The Department of Food and Agriculture shall have the authority necessary for the implementation of this chapter. Department 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 analogous to Division 5 (commencing with Section 12001).

(2) Require that the application of pesticides or other pest control in connection with the indoor or outdoor cultivation of medical cannabis shall meet standards analogous to Division 6 (commencing with Section 11401) of the Food and Agricultural Code and its implementing regulations.

(3) Require that indoor and outdoor cannabis cultivation by licensees is conducted in accordance with state and local laws and best practices related to land conversion, grading, electricity usage, water usage, agricultural discharges, and similar matters.

(c) State licenses to be issued by the Division of Medical Cannabis Cultivation are as follows:

(1) Type 1, or “specialty outdoor,” for outdoor cultivation of less than 5,000 square feet of total area on one property. Maximum of 50 mature plants on the property.

(2) Type 1A, or “specialty indoor,” for indoor cultivation of less than 5,000 square feet of total area on one property. Maximum of 50 mature plants on the property.

(3) Type 2, or “small outdoor,” for outdoor cultivation between 5,001 and 10,000 square feet of total area on one property. Maximum of 99 mature plants on the property.

(4) Type 2A, or “small indoor,” for indoor cultivation between 5,001 and 10,000 square feet of total area on one property. Maximum of 99 mature plants on the property.

(5) Type 3, or “medium outdoor,” for outdoor cultivation between 10,001 and 30,000 square feet of total area on one property. Maximum of 299 mature plants on the property. The Division of Medical Cannabis Cultivation shall limit the number of licenses allowed of this type.

(6) Type 3A, or “medium indoor,” for indoor cultivation between 10,001 and 30,000 square feet of total area on one property. Maximum of 299 mature plants on the property. The Division of Medical Cannabis Cultivation shall limit the number of licenses allowed of this type.

(7) Type 4, or “large outdoor,” for outdoor cultivation greater than 30,001 square feet of total area on one property. Maximum of 500 mature plants on the property. The Division of Medical Cannabis Cultivation shall limit the number of licenses allowed of this type.

(8) Type 5, or “nursery,” for cultivation of medical cannabis solely as a nursery. Type 5 licensees may transport live plants.

• Who decided these arbitrary numbers? I am guessing “total area” does not mean plant canopy.

(d) All license fees collected by the division pursuant to this chapter shall be deposited into the Medical Cannabis Cultivation Fees Account, which is hereby established within the fund. All moneys within this account are available upon appropriation by the Legislature to the division solely for the purposes of fully funding and administering this chapter, including, but not limited to, the costs incurred by the division for its administrative expenses and costs and the costs of regulation.

(e) It is the intent of the Legislature to establish appropriate protocols for the collection of the specific location of cultivation sites.

Article  8. Licensed Dispensing Facilities

19334.

 (a) The State Board of Equalization shall promulgate regulations governing the licensing and regulation of wholesalers, dispensing facilities, and transporters. State enforcement shall be conducted in coordination with local authorities.

(b) State licenses to be issued by the State Board of Equalization are as follows:

(1) Type 9, or “wholesale,” for the storage of medical cannabis or medical cannabis products. Maximum storage shall be two pounds of dried flower or 200 individual units per medical cannabis product.

• 2 pounds? I got that stored right now at the house.

(2) Type 10, or “small dispensary,” for dispensaries with 1-50 employees, including management.

(3) Type 10D, or “small dispensary-delivery,” for dispensaries with the same restrictions as Type 10; also allows for delivery.

(4) Type 11, or “medium dispensary,” for dispensaries with 51-100 employees, including management.

(5) Type 11D, or “medium dispensary-delivery,” for dispensaries with the same restrictions as Type 11; also allows for delivery.

(6) Type 12, or “large dispensary,” for dispensaries with 100 employees or more, including management.

(7) Type 12D, or “large dispensary-delivery,” for dispensaries with the same restrictions as Type 12; also allows for delivery.

(8) Type 13, or “transport,” for transporters of medical cannabis and medical cannabis products.

• Such a weird breakdown…. Ugh.

Article  9. Licensed Transporters

19336.

 (a) A licensee authorized to transport, or transport and deliver, medical cannabis and medical cannabis products shall do so only as set forth in this chapter.

(b) Prior to transporting or delivering medical cannabis or medical cannabis products, a licensee authorized to transport or deliver medical cannabis or medical cannabis products shall do both of the following:

(1) Complete an electronic shipping manifest as prescribed by the licensing authority. All delivery shipping manifests shall not identify the qualified patient or primary caregiver by name or address.

(2) Securely transmit the manifest to the licensing authority and the licensee that will receive the medical cannabis product, as applicable.

(c) During transportation or delivery, the licensed transporter shall maintain a physical copy of the shipping manifest and make it available upon request to agents of the licensing authority, local law enforcement officers, or any other designated enforcement agency.

(d) The licensee receiving the shipment shall maintain each electronic shipping manifest and shall make it available upon request to agents of the licensing authority, local law enforcement officers, or any other designated enforcement agency.

(e) Upon receipt of the transported shipment, a licensee shall submit to the licensing agency a record verifying receipt of the shipment and the details of the shipment.

19337.

 (a) Transported and delivered medical cannabis or medical cannabis products shall be transported only in a storage compartment that is securely affixed to the interior of the transporting vehicle and that is not visible from outside the vehicle. This requirement shall only apply to licensees transporting medical cannabis or medical cannabis products with a total retail value of at least an amount equal to a statewide monetary threshold, which shall be adopted by regulation by the licensing authority after review by the task force and the office.

(b) A vehicle transporting medical cannabis or medical cannabis products shall travel only directly between licensed facilities, unless otherwise authorized under its license.

(c) All transport or delivery vehicles shall be staffed with a minimum of two employees. At least one employee shall remain with the vehicle at all times when the vehicle contains medical cannabis. This requirement shall only apply to licensees transporting medical cannabis or medical cannabis products with a total retail value of at least an amount equal to a statewide monetary threshold, which shall be adopted by regulation by the licensing authority after review by the task force and the office.

(d) Each transport or delivery team member shall possess documentation of licensing and a government-issued identification card at all times when transporting or delivering medical cannabis and shall produce it upon the request of agents of any regulatory authority or a law enforcement official.

• And they just send OxyContin through the mail. Awesome.

19338.

 (a) The licensing authority shall develop a database containing the electronic shipping manifests, which shall include, but not be limited to, the following information:

(1) The quantity, or weight, and variety of products shipped.

(2) The estimated times of departure and arrival.

(3) The quantity, or weight, and variety of products received.

(4) The actual time of arrival.

(5) A categorization of the product.

(b) The database shall be designed to flag irregularities for a regulatory authority to investigate. An authorized enforcement authority may, at any time, inspect shipments and request documentation for current inventory.

19339.

 (a) This chapter shall not be construed to authorize or permit a licensee to transport or deliver, or cause to be transported or delivered, cannabis or cannabis products outside the state, unless authorized by federal law.

(b) A local jurisdiction shall not prevent transportation of medical cannabis or medical cannabis products on public roads by a licensee transporting medical cannabis or medical cannabis products that acts in compliance with this chapter and applicable local ordinances.

19340.

 (a) All mobile, vehicular, and Internet-based delivery services are prohibited except as authorized by this chapter.

(b) Upon approval of the licensing authority, a licensee authorized to provide delivery services shall abide by the following:

(1) The city, county, or city and county in which the premises of the licensee is located, and in which each delivery is made, must specifically permit delivery service by ordinance referring to this section.

(2) All employees delivering medical cannabis or medical cannabis products must carry a current license authorizing those services with them during deliveries, and must present that license upon request to state and local law enforcement, employees of regulatory authorities, and other state and local agencies enforcing this chapter.

(c) A city, county, or city and county shall have the authority to impose a tax, pursuant to Section 19355, on each delivery transaction completed by a licensee.

(d) Whenever a licensing authority has knowledge that a licensee has transported or delivered, or arranged or facilitated the transport or delivery of, medical cannabis or medical cannabis products in violation of this chapter, the licensing authority shall summarily suspend that facility’s license and shall without delay commence proceedings for the revocation of the license in accordance with this chapter.

(e) All license fees collected by the licensing authority pursuant to this chapter shall be deposited into the Medical Cannabis Retail Fees Account, which is hereby established within the fund. All moneys within the Medical Cannabis Retail Fees Account are available upon appropriation to the State Board of Equalization, solely for the purposes of fully funding and administering this chapter, including, but not limited to, the costs incurred by the board for its administrative expenses and costs and the costs of regulation.

• So basically, fuck your delivery service…..

Article  10. Licensed Manufacturers and Certified Laboratories

19342.

 (a) The Division of Medical Cannabis Manufacturing and Testing within the State Department of Public Health shall promulgate regulations governing the licensing of cannabis manufacturers.

(b) Licenses to be issued by the division are as follows:

(1) Type 6A, or “small manufacturing level 1,” for manufacturing sites that use a maximum of XXX pounds of medical cannabis each year to produce medical cannabis products, using nonvolatile solvents.

(2) Type 6B, or “small manufacturing level 2,” for manufacturing sites that use a maximum of XXX pounds of medical cannabis each year to produce medical cannabis products, using volatile solvents.

(3) Type 7A, or “large manufacturing level 1,” for manufacturing sites that use a maximum of XXX pounds of medical cannabis each year to produce medical cannabis products, using nonvolatile solvents. The division shall limit the number of licenses of this type.

(4) Type 7B, or “large manufacturing level 2,” for manufacturing sites that use a maximum of XXX pounds of medical cannabis each year to produce medical cannabis products, using volatile solvents. The division shall limit the number of licenses of this type.

(5) Type 8, or “testing,” for testing of medical cannabis and medical cannabis products. Type 8 licensees shall have their facilities certified according to regulations set forth by the division.

(c) All license fees collected by the division pursuant to this chapter shall be deposited into the Medical Cannabis Manufacturing and Testing Fees Account, which is hereby established within the fund. All moneys within the Medical Cannabis Manufacturing and Testing Fees Account are available upon appropriation by the Legislature to the division, solely for the purposes of fully funding and administering this chapter, including, but not limited to, the costs incurred by the division for its administrative expenses and costs and the costs of regulation.

• Super…. What is an XXX is anyone’s guess. Like I said… ZERO licenses for cultivation or manufacturing currently exist, so everyone is fucked come provisional licensing and there will be no weed for anyone to sell. Stupidest shit ever. Shame on those supporting this bullshit.

19343.

 (a) The State Department of Public Health shall promulgate standards for certification of testing laboratories to perform random sample testing of all medical cannabis products, including standards for onsite testing.

(b) Certification of testing laboratories shall be 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.

(c) These requirements shall apply to all entities, including third-party laboratories, engaged in the testing of medical cannabis pursuant to this chapter.

• And none of them can still test food right, and their results all still vary by up to 40%. SHIT SHOW.

19344.

 (a) A laboratory certified by the department to perform random sample testing of medical cannabis products shall not acquire, process, possess, store, transfer, transport, or dispense medical cannabis for any purpose other than those authorized by Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety Code. All transfer or transportation shall be performed pursuant to a specified chain of custody protocol.

(b) A laboratory certified by the department to perform random sample testing of medical cannabis products shall not acquire, process, possess, store, transfer, transport, or dispense medical cannabis plants or medical cannabis products except through a patient, primary caregiver, or a facility issued a state license. All transfer or transportation shall be performed pursuant to a specified chain of custody protocol.

(c) The department shall develop procedures to ensure that testing of cannabis occurs prior to delivery to dispensaries or any other business, and specify how often licensees shall test cannabis, that the cost of testing shall be borne by the licensed cultivators, and requiring destruction of harvested batches whose testing samples indicate noncompliance with health and safety standards promulgated by the department, unless remedial measures can bring the cannabis into compliance with quality assurance standards as promulgated by the department.

(d) The department shall establish a certification fee, and laboratories shall pay a fee to be certified. Certification fees shall not exceed the reasonable regulatory cost of the certification activities.

(e) All certification fees collected by the department pursuant to this chapter shall be deposited into the Medical Cannabis Manufacturing and Testing Fees Account, which is hereby established within the fund.

• So labs cannot test patient medicine. Only licensed medicine. Doesn’t say how much of the medicine is required to be tested. Should get interesting for sure.

19345.

 (a) The Division of Medical Cannabis Manufacturing and Testing within the State Department of Public Health shall promulgate the following standards:

(1) Health and safety standards applicable to all medical cannabis, and medical cannabis products, including maximum potency standards.

(2) Standards for licensed manufacturers of medical cannabis and medical cannabis products, including, but not limited to, edible products.

(b) At a minimum, the standards required by this section shall do all of the following:

(1) Prescribe sanitation standards analogous to the California Retail Food Code (Part 7 (commencing with Section 113700) of Division 104 of the Health and Safety Code) for food preparation, storage, handling, and sale of edible medical cannabis products. For purposes of this chapter, edible medical cannabis products are deemed to be unadulterated food products.

(2) Require that edible medical cannabis products produced, distributed, provided, donated, or sold by licensees shall be limited to nonpotentially hazardous food, as established by the State Department of Public Health pursuant to Section 114365.5 of the Health and Safety Code.

(3) Require that facilities in which edible medical cannabis products are prepared shall be constructed in accordance with applicable building standards, health and safety standards, and other state laws.

(4) Require that all edible medical cannabis products shall be packaged at the original point of preparation.

(c) No person shall engage in the manufacture, packing, or holding of processed food containing edible cannabis unless the person has a valid registration from the department pursuant to Section 110460 of the Health and Safety Code. Health and safety standards prescribed by this section or promulgated through regulation may be enforced by local environmental health departments.

• Always nice to kick the edible folks around a little more than everyone else.

19346.

 (a) Prior to sale or distribution at a licensed dispensing facility, edible medical cannabis products shall be labeled and in a tamper-evident package. Labels and packages of edible medical cannabis products shall meet the following requirements:

(1) Edible medical cannabis packages and labels shall not be made to be attractive to children.

(2) All edible 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 “KEEP OUT OF REACH OF CHILDREN AND ANIMALS” in bold print.

(C) The statement “FOR MEDICAL USE ONLY.”

(D) The statement “THE INTOXICATING EFFECTS OF THIS PRODUCT MAY BE DELAYED BY UP TO TWO HOURS.”

(E) Net weight of medical cannabis in the package.

(F) A warning if nuts or other known allergens are used and the total weight, in ounces or grams, of medical cannabis in the package.

(G) List of pharmacologically active ingredients, including, but not limited to, tetrahydrocannabinol (THC) and cannabidiol (CBD) content, the THC amount in milligrams per serving, servings per package, and the THC amount in milligrams for the package total.

(H) Clear indication, in bold type, that the product contains medical cannabis.

(I) Identification of the source and date of cultivation and manufacture.

(J) The name and location of the licensed dispensing facility providing the product.

(K) The date of sale.

(L) Any other requirement set by the department.

(b) Only generic food names may be used to describe edible medical cannabis products.

• So the whole edible game is changed. At least the edibles I produce already meet most of these requirements, unlike most of these sexy bitches out here. Welcome to the world of medical. There are  bunch of weird requirements here that are just overkill.

Article  11. Cannabis Employee Certification and Apprenticeship

19350.

 

• AKA the UFCW owns you chapter….

 

 This article applies only to cultivation sites and dispensaries.

• Why?

19351.

 The Division of Labor Standards Enforcement shall do all of the following:

(a) Maintain minimum standards for the competency and training of employees of a licensed cultivator or dispensary through a system of testing and certification.

(b) Maintain an advisory committee and panels as necessary to carry out its functions under this article. There shall be employer representation on the committee and panels.

(c) Adopt regulations as determined to be necessary to implement this article.

(d) Issue certification cards to employees certified pursuant to this article.

(e) Establish registration fees in an amount reasonably necessary to implement this article, not to exceed twenty-five dollars ($25) for the initial registration. There shall be no fee for annual renewal of registration. Fees collected for cultivation sites and dispensaries shall be placed into the Medical Cannabis Cultivation Fee Account and the Medical Cannabis Retail Fee Account, respectively.

19352.

 (a) By January 1, 2017, the Division of Labor Standards Enforcement shall develop a certification program for cannabis employees. Commencing January 1, 2019, except as provided in subdivision (c), certification shall be required of all persons who perform work as cannabis employees.

(b) Individuals desiring to be certified shall submit an application for certification and examination.

(c) (1) Certification is not required for registered apprentices working as cannabis employees as part of a state-approved apprenticeship program. An apprentice who is within one year of completion of his or her term of apprenticeship shall be permitted to take the certification examination and, upon passing the examination, shall be certified immediately upon completion of the term of apprenticeship.

(2) Commencing January 1, 2019, an uncertified person may perform work for which certification is otherwise required in order to acquire the necessary on-the-job experience for certification provided that the person shall be under the direct supervision of a cannabis employee certified pursuant to this section who is responsible for supervising no more than one uncertified person.

(3) The Division of Labor Standards Enforcement may develop additional criteria governing this subdivision.

• ROLLS EYES

19353.

 (a) The following shall constitute additional grounds for disciplinary proceedings, including suspension or revocation of the license issued pursuant to this chapter:

(1) The licensee willfully employs one or more uncertified persons to perform work as cannabis employees in violation of this article.

(2) The licensee willfully fails to provide adequate supervision of uncertified workers.

(3) The licensee willfully fails to provide adequate supervision of apprentices.

(b) The Labor Commissioner shall maintain a process for referring cases to the appropriate regulatory authority when it has been determined that a violation of this section has likely occurred. The Labor Commissioner shall have a memorandum of understanding with the regulatory authorities in furtherance of this section.

(c) Upon receipt of a referral by the Labor Commissioner alleging a violation under this section, the appropriate licensing authority shall open an investigation. Disciplinary action against the licensee shall be initiated within 60 days of the receipt of the referral. The licensing authority may initiate disciplinary action against a licensee upon his or her own investigation, the filing of a complaint, or a finding that results from a referral from the Labor Commissioner alleging a violation under this section. Failure of the employer or employee to provide evidence of certification or apprentice status shall create a rebuttable presumption of violation of this section.

(d) This section shall become operative on January 1, 2019.

• By January 2019 no one will give a shit….

Article  12. Taxation

19355.

 The office and other state agencies may assist state taxation authorities in the development of uniform policies for the state taxation of state licensees.

• Show me the money…. Want to see a fight? Watch this.

19356.

 (a) (1) In addition to any authority otherwise provided by law, the board of supervisors of a county may impose, by ordinance, a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing cannabis by a licensee operating pursuant to this chapter. The tax may be imposed for general governmental purposes or for purposes specified in the ordinance by the board of supervisors.

(2) The board of supervisors shall specify in the ordinance proposing the tax the activities subject to the tax, the applicable rate or rates, the method of apportionment, and the manner of collection of the tax. A tax imposed pursuant to this section is a tax and not a fee or special assessment, and the tax is not required to be apportioned on the basis of benefit to any person or property or be applied uniformly to all taxpayers or all real property.

(3) A tax imposed by a county pursuant to this section by a county may include a transactions and use tax imposed solely for cannabis or cannabis products, which shall otherwise conform to Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code. Notwithstanding Section 7251.1 of the Revenue and Taxation Code, the tax may be imposed at any rate specified by the board of supervisors, and the tax rate authorized by this section shall not be considered for purposes of the combined tax rate limitation established by that section.

(4) The tax authorized by this section may be imposed upon any or all of the activities set forth in paragraph (1), regardless of whether the activity is undertaken individually, collectively, or cooperatively, and regardless of whether the activity is for compensation or gratuitously, as determined by the board of supervisors.

(5) The board of supervisors shall specify whether the tax applies throughout the entire county or within the unincorporated area of the county.

(b) In addition to any other method of collection authorized by law, the board of supervisors may provide for the collection of the tax imposed pursuant to this section in the same manner, and subject to the same penalties and priority of lien, as other charges and taxes fixed and collected by the county.

(c) Any tax imposed pursuant to this section shall be subject to applicable voter approval requirements imposed by any other law.

(d) For purposes of this section, “cannabis” shall have the same meanings as the definition set forth in Section 19300.

(e) This section does not limit or prohibit the levy or collection or any other fee, charge, or tax, or any license or service fee or charge upon, or related to, the activities set forth in subdivision (a), as otherwise provided by law. This section shall not be construed as a limitation upon the taxing authority of any county as provided by other law.

Article  13. Funding

19360.

 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 or renewal fee. The licensure or 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, but shall not exceed the reasonable regulatory costs to the licensing authority.

(b) The total fees assessed pursuant to this chapter, including, but not limited to, provisional license fees set forth in Section 19330, 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.

• Fees will vary across the state. Super.

19361.

 (a) The Medical Cannabis Regulation Fund is hereby established within the State Treasury. Notwithstanding Section 16305.7 of the Government Code, the fund shall include any interest and dividends earned on the moneys in the fund.

(b) 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 office, for the purposes of funding the enforcement grant program pursuant to subdivision (c).

(c) (1) The office 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.

(d) Funds for the establishment and support of the regulatory activities pursuant to this chapter may 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.

• Yes. Why earmark the funds for education or anything silly like that?

Article  14. Reporting

19363.

 On or before March 1 of each year, the director shall prepare and submit to the Legislature an annual report on the office’s activities and post the report on the office’s Internet Web site. The report shall include, but not be limited to, the following information for the previous fiscal year:

(a) The amount of funds allocated and spent by the office and licensing authorities for medical cannabis licensing, enforcement, and administration.

(b) The number of state licenses issued, renewed, denied, suspended, and revoked, by state license category.

(c) The average time for processing state license applications, by state license category.

(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 office.

(e) The number, type, and amount of penalties, fines, and other disciplinary actions taken by the licensing authorities.

Article  15. Privacy

19365.

 (a) Information identifying the names of patients, their medical conditions, or the names of their primary caregivers received and contained in records kept by the office or licensing authorities for the purposes of administering this chapter 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.

(b) Nothing in this section precludes the following:

(1) Employees of any of the office or licensing authorities notifying state or local agencies about information submitted to the agency that the employee suspects is falsified or fraudulent.

(2) Notifications from any of the office or licensing authorities to state or local agencies about apparent violations of this chapter or applicable local ordinance.

(3) Verification of requests by state or local agencies to confirm licenses and certificates issued by the regulatory authorities or other state agency.

(4) Provision of information requested pursuant to a court order or subpoena issued by a court or an administrative agency or local governing body authorized by law to issue subpoenas.

(c) Information shall not be disclosed by any state or local agency beyond what is necessary to achieve the goals of a specific investigation, notification, or the parameters of a specific court order or subpoena.

SEC. 7.

Section 11362.775 of the Health and Safety Code is amended to read:

 

11362.775.

Qualified (a)  Subject to subdivision (b), qualified  patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards, who associate within the State of California in order to  collectively or cooperatively to  cultivate marijuana 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.

(b) This section shall remain in effect only until 180 days after the Division of Medical Cannabis Regulation within the State Board of Equalization posts a notice on its Internet Web site that the licensing authorities have commenced issuing provisional licenses pursuant to the Medical Cannabis Regulation and Control Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code), and as of that date is repealed.

• And SB 420 dies its slow death…..

SEC. 8.

Section 147.5 is added to the Labor Code, to read:

 

147.5.

 (a) By January 1, 2017, the Division of Occupational Safety and Health shall convene an advisory committee to evaluate whether there is a need to develop industry-specific regulations related to the activities of facilities issued a license pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code.

(b) By July 1, 2017, the advisory committee shall present to the board its findings and recommendations for consideration by the board. By July 1, 2017, the board shall render a decision regarding the adoption of industry-specific regulations pursuant to this section.

SEC. 9.

Section 3094 is added to the Labor Code, to read:

 

3094.

 The Division of Apprenticeship Standards shall investigate, approve, or reject applications for apprenticeship programs for employees of a licensee subject to Article 11 (commencing with Section 19350) of Chapter 3.5 of Division 8 of the Business and Professions Code. The Division of Apprenticeship Standards shall adopt regulations necessary to implement and regulate the establishment of the apprenticeship programs described in this section.

• I own a school in Massachusetts, and still think this is bullshit….

SEC. 10.

Section 2402.5 is added to the Vehicle Code, to read:

 

2402.5.

 The Department of the California Highway Patrol shall establish protocols to determine whether a driver is operating a vehicle under the influence of cannabis, and shall develop protocols setting forth best practices to assist law enforcement agencies. The costs to the Department of the California Highway Patrol of implementing this subdivision shall, upon appropriation by the Legislature, be paid for with appropriations from moneys in the Fines and Penalties Account of the Medical Cannabis Regulation Fund.

• Way to let the CHP determine their own standards. (rolls eyes)

SEC. 11.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 12.

 The Legislature finds and declares that Section 6 of this act, which adds Chapter 3.5 (commencing with Section 19300) to Division 8 of the Business and Professions Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

It is necessary to maintain the confidentiality of patient and physician information provided to the regulatory authorities in order to protect the private medical information of patients who use medical cannabis and to preserve the essential confidentiality of the physician and patient relationship.

SEC. 13.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, 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.

However, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.