MMJNEWS Hon. Steven K. Lubell Medical Marijuana Regulation and Safety Act Summary 10092015.pdf

7/23/2019 MMJNEWS Hon. Steven K. Lubell Medical Marijuana Regulation and Safety Act Summary 10092015.pdf

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State of California Medical Marijuana Regulation and Safety Act

Outline 10/09/2015 Hon. Steven K. Lubell (Ret.) Page 1

State of CaliforniaMedical Marijuana Regulation and Safety Act

Outline by Hon. Steven K. Lubell (Ret.)

On October 9, 2015, Edmund G. Brown Jr., the Governor of State of California, signed

into law Senate Bill 643 (Author: McGuire), Assembly Bill 266 (Author: Bonta), andAssembly Bill 243 (Author: Wood)

Governor Brown issued the following statement to the Members of the California StateAssembly upon the signing of the three bills.

Assembly Bill 243, Assembly Bill 266, and Senate Bill 643, establish along-overdue comprehensive regulatory framework for the production,transportation, and sale of medical marijuana.

While many of these new standards lake effect in January 1, 2018, stateagencies will begin working immediately with experts and stakeholders oncrafting clear guidelines, so local government, law enforcement, businesses,patients and health providers can prepare and adapt to the new regulatedsystem.

This new structure will make sure patients have access to medicalmarijuana, while ensuring a robust tracking system. This sends a clear andcertain signal to our federal counterparts that California is implementingrobust controls not only on paper, but in practice.

Under the Medical Marijuana Regulation and Safety Act(MMRSA)the Bureau ofMarijuana Regulation will be established within the California State Department ofConsumer Affairs. The MMRSA would require the Governor to appoint to theDepartment of Consumer Affairs, subject to confirmation by the Senate, a chief of theBureau of Medical Marijuana Regulation.

The state agencies that will be responsible for granting and renewing state Licenses andregulating the Licensees are as follows:

Department of Consumer Affairs: Dispensary, Distributor, Transporter

Department of Food and Agriculture: Cultivation, Track & Trace Program

Department of Public Health: Manufacturing and Testing

Department of Pesticides Regulation: Standards for Production and Labeling

Department of Fish and Wildlife: Environmental Standards

State Water Resources Control Board: Water Quality


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City of Los Angeles:

Business and Professions Code section 19321 (d) is added which provides as to City ofLos Angeles Proposition D that:

Issuance of a state license or a determination of compliance with local law

by the licensing authority shall in no way limit the ability of the City of LosAngeles to prosecute any person or entity for a violation of, or otherwiseenforce, Proposition D, approved by the voters of the City of Los Angeleson the May 21, 2013, ballot for the city, or the citys zoning laws. Nor may

issuance of a license or determination of compliance with local law by thelicensing authority be deemed to establish, or be relied upon, indetermining satisfaction with the immunity requirements of Proposition Dor local zoning law, in court or in any other context or forum.

The statewide Medical Marijuana Regulation and Safety Act will require a local permit,

license, or other authorization from the City of Los Angeles to engage in commercialcannabis activity after January 1, 2018. The issuance of a local permit, license, or otherauthorization from the City of Los Angeles is not authorized under Proposition DOrdinance No. 182580 which makes such activity an unpermitted used (Los AngelesMunicipal Code 45.19.6.2), subject to a limited immunity against prosecution basedupon the satisfaction of certain conditions. (Los Angeles Municipal Code 45.19.6.3Subdivisions AO).

Without an amendment or repeal of Proposition DOrdinance No. 182580 the statewideMedical Marijuana Regulation and Safety Act will require that all commercial cannabisactivity in the City of Los Angeles cease on January 1, 2018.

Proposition DOrdinance No. 182580 was a voter initiative. Proposition DOrdinance No. 182580 would need to be amended or repealed and replaced whichprovides for the City of Los Angeles to issue a local permit, license, or otherauthorization. (See, Los Angeles Municipal Code 45.19.6.9). Proposition D -Ordinance No. 182580 may be amended or repealed and replaced by one of threemethods, each of which requires a vote:

(1) Voter Initiative;

(2) Ordinance brought forward by the Los Angeles City Council,subject to adoption by a vote; or

(3) Amendment to the City Charter superseding Proposition DOrdinance No. 182580, subject to adoption by a Vote.


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Grandfathering of Vertical I ntegration Ordinances (Seed to Distribution):

The MMRSA provides for a grandfather provision to allow vertical integration (seed todistribution) as to commercial cannabis operations in those local jurisdictions that haveadopted a local ordinance, prior to July 1, 2015, which allows or requires qualifiedbusinesses to cultivate, manufacture, and dispense medical cannabis or medical cannabis

products, with all commercial cannabis activity being conducted by a single qualifiedbusiness. A commercial cannabis business will not be subject to license requirement thatrestricts a dispensary from maintaining a cultivation or manufacture site if the followingthree conditions are met: (1) The business was cultivating, manufacturing, and dispensingmedical cannabis or medical cannabis products on July 1, 2015, and has continuouslydone so since that date; (2) The business has been in full compliance with all applicablelocal ordinances; (3) The business is registered with the State Board of Equalization.

A business licensed pursuant to the grandfathering provision is not required to conduct allcultivation or manufacturing within the boundaries of the local jurisdiction. However all

cultivation and manufacturing of cannabis shall have commenced prior to July 1, 2015,and the commercial cannabis activity must have been in full compliance with applicablelocal ordinances.

Did the MMRSA change the Not for Profitmodel in the State of Cali fornia:

None of the three bills: Senate Bill 643 (Author: McGuire), Assembly Bill 266 (Author:Bonta), and Assembly Bill 243 (Author: Wood) which collectively make up the MedicalMarijuana Regulation and Safety Act specifically address the issue of profit.

Health and Safety Code section 11362.765 which specifically states that no individual orgroup may cultivate or distribute marijuana for a profit remains intact, and was notamended or repealed by the MMRSA.

Health and Safety Code section 11362.775 currently provides for a collective orcooperative model of a closed loop system from seed to distribution in what is oftenreferred to as a vertical integration model. Health and Safety Code section 11362.775stated as follows:

"Qualified patients, persons with valid identification cards, and thedesignated primary caregivers of qualified patients and persons withidentification cards, who associate within the State of California in order

collectively or cooperatively to cultivate marijuana for medicalpurposes, shall not solely on the basis of that fact be subject to statecriminal sanctions under Section 11357 [possession of marijuana or"concentrated cannabis"], 11358 [cultivation of marijuana], 11359


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[possession of marijuana for sale], 11360 [transporting, importing, selling,furnishing, or giving away marijuana], 11366 [maintaining a place for thesale, giving away, or use of marijuana], 11366.5 [making real propertyavailable for the manufacture, storage, or distribution of controlledsubstances], or 11570 [abatement of nuisance created by premises used for

manufacture, storage, or distribution of controlled substance]."

Health and Safety Code section 11362.775 is amended in the MMRSA to read:

(a) Subject to subdivision (b), qualified patients, persons with valididentification cards, and the designated primary caregivers of qualifiedpatients and persons with identification cards, who associate within theState of California in order collectively or cooperatively to cultivatecannabis for medical purposes, shall not solely on the basis of that fact besubject to state criminal sanctions under Section 11357, 11358, 11359,

11360, 11366, 11366.5, or 11570.

(b) This section shall remain in effect only until one year after the Bureauof Medical Marijuana Regulation posts a notice on its Internet Web site thatthe licensing authorities have commenced issuing licenses pursuant to theMedical Marijuana Regulation and Safety Act (Chapter 3.5 (commencingwith Section 19300) of Division 8 of the Business and Professions Code),and is repealed upon issuance of licenses.

The MMRSA did notamend or repeal Health and Safety Code 11362.765(a)whichprovides immunity from criminal liability as follows:

(a) Subject to the requirements of this article, the individuals specified insubdivision (b) shall not be subject, on that sole basis, to criminal liabilityunder Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570.However, nothing in this section shall authorize the individual to smoke orotherwise consume marijuana unless otherwise authorized by this article,

nor shall anything in this section authorize any individual or group tocultivate or distribute marijuana for profit.

If it was the intent of the Legislature and the Governor to change the not for

profit model to a for profit model then Health and Safety Code section11362.765 would need to be amended or repealed.


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L icense Categories:

An Applicant may apply for a state license to engage in commercial cannabis activity inmedical cannabis or medical cannabis products license categories as follows:

Cultivation

DistributionTesting

Manufacture

Dispensing

Number of L icenses that may be held: (A summary of license restrictions is attached.)Business and Professions Code section 19328 (a) is added. A licensee may only hold astate license in up to two separate license categories, as follows:

(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a Type 6 or 7 statelicense.

(2) Type 6 or 7 licensees, or a combination thereof, may also hold either a Type 1,1A, 1B, 2, 2A, or 2B state license.

(3) Type 6 or 7 licensees, or a combination thereof, may also hold a Type 10Astate license.

(4) Type 10A licensees may also hold either a Type 6 or 7 state license, or acombination thereof.

(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination thereof, may alsohold a Type 10A state license.

(6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A, or 2B state license,or a combination thereof.

(7) Type 11 licensees shall apply for a Type 12 state license, but shall not applyfor any other type of state license.

(8) Type 12 licensees may apply for a Type 11 state license.

(9) A Type 10A licensee may apply for a Type 6 or 7 state license and hold a 1,1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof if, under the 1, 1A, 1B, 2,2A, 2B, 3, 3A, 3B, 4 or combination of licenses thereof, no more than four acres


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of total canopy size of cultivation by the licensee is occurring throughout the stateduring the period that the respective licenses are valid. All cultivation pursuant tothis section shall comply with local ordinances. This paragraph shall becomeinoperative on January 1, 2026.

Except as provided above, a person or entity that holds a state license is prohibited fromlicensure for any other activity authorized under this chapter, and is prohibited fromholding an ownership interest in real property, personal property, or other assetsassociated with or used in any other license category.

Who can be an Applicant for a State L icense:

An Applicant for the annual state license under the Medical Marijuana Regulation andSafety Act must have an official document granted by a local jurisdiction that specificallyauthorizes a person to conduct the type of commercial cannabis activity applied for. Alocal jurisdiction may adopt ordinances that establish additional standards, requirements,

and regulations for local licenses and permits for commercial cannabis activity, but notless than the state standard. A local jurisdiction maintains the right to prohibitcommercial cannabis activity within their jurisdiction.

An Applicantfor licensing under Assembly Bill 266 (commencing with Business andProfessions Code Section 19319), means the following:

(1) Owner or owners of a proposed facility, including all persons or entities havingownership interest other than a security interest, lien, or encumbrance on propertythat will be used by the facility.

(2) If the owner is an entity, owner includes within the entity each personparticipating in the direction, control, or management of, or having a financialinterest in, the proposed facility.

(3) If the applicant is a publicly traded company, owner means the chief

executive officer or any person or entity with an aggregate ownership interest of 5percent or more.

A Person is defined in the Assembly Bill 266 (Bonta) to mean 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 aunit and includes the plural as well as the singular number.


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Description of Operating Procedures:

For applicants seeking licensure to cultivate, distribute, or manufacture medical cannabis,the application shall also include a detailed description of the applicants operating

procedures for all of the following, as required by the licensing authority:

(1) Cultivation.(2) Extraction and infusion methods.(3) The transportation process.(4) Inventory procedures.(5) Quality control procedures.

(A summary of the application requirements for a state license is attached.)

Basis for denial of an Application:

The state 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. The statelicensing authority may deny the application for licensure or renewal of a statelicense if the applicant or licensee has been convicted of an offense that issubstantially related to the qualifications, functions, or duties of the business or

profession for which the application is made, except that if the licensing authoritydetermines that the applicant or licensee is otherwise suitable to be issued a licenseand granting the license would not compromise public safety, the licensingauthority shall conduct a thorough review of the nature of the crime, conviction,circumstances, and evidence of rehabilitation of the applicant, and shall evaluatethe suitability of the applicant or licensee to be issued a license based on the

evidence found through the review.

In determining which offenses are substantially related to the qualifications,functions, or duties of the business or profession for which the application is made,the licensing authority shall include, but not be limited to, the following:

(A) A felony conviction for the illegal possession for sale, sale,manufacture, transportation, or cultivation of a controlledsubstance.

(B) A violent felony conviction, as specified in subdivision (c)of Section 667.5 of the Penal Code.


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(C) A serious felony conviction, as specified in subdivision (c)of Section 1192.7 of the Penal Code.

(D) A felony conviction involving fraud, deceit, or embezzlement.

An applicant, or any of its officers, directors, or owners, who is a licensedphysician making patient recommendations for medical cannabis pursuant toHealth and Safety Code Section 11362.7 are ineligible for a state license.

An applicant or any of its officers, directors, or owners who have been subject tofines or penalties for cultivation or production of a controlled substance on publicor private lands pursuant to Fish and Game Code Section 12025 or 12025.1 areineligible for a state license.

An applicant, or any of its officers, directors, or owners, previously sanctioned by alicensing authority or a local jurisdiction for unlicensed commercial medicalcannabis activities or had a license revoked in the three years immediately

preceding the date the application is filed are ineligible for a state license.

I ndividual Patient and Pr imary Caregiver Exemptions and Restr ictions:

A Qualified patient who cultivates, possesses, stores, manufactures, or transportscannabis exclusively for his or her personal medical use but who does not provide,donate, sell, or distribute cannabis to any other person or entity is not considered engagedin commercial cannabis activity and is exempt from state licensing requirements under

the MMRSA.

A Primary Caregiver who cultivates, possesses, stores, manufactures, transports, donates,or provides cannabis exclusively for the personal medical purposes of no more than fivespecified qualified patients for whom he or she is the primary caregiver within themeaning of Section 11362.7 of the Health and Safety Code, but who does not receiveremuneration for these activities except for compensation in full compliance withsubdivision (c) of Section 11362.765 of the Health and Safety Code is not engaged incommercial cannabis activity and is, therefore, exempt from state licensing requirementsunder the MMRSA.

Cultivation L imi tations on Quali fi ed Patients and Primary Caregivers:

Health and Safety Code section 1362.777 is added which restricts the size of a cultivationsite maintained by a qualified patient to a cultivation area that does not exceed 100 squarefeet and that the qualified patient only cultivates marijuana for her personal medical useand does not sell, distribute, donate, or provide marijuana to any other person or entity.


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The MMRSA restricts size of a cultivation site maintained by a primary caregivercultivating marijuana pursuant to Section 11362.5 to a cultivation area that does notexceed 500 square feet and the primary caregiver cultivates marijuana exclusively for thepersonal medical use of no more than five specified qualified patients for whom theprimary caregiver within the meaning of Section 11362.7, and does not receive

remuneration for these activities, except for compensation provided in full compliancewith subdivision (c) of Section 11362.765.

The Qualified Patient and Primary Caregiver exemptions set forth in the MMRSA doeslimit or prevent a local jurisdiction from regulating or banning the cultivation, storage,manufacture, transport, or other activity by a Qualified Patient and Primary Caregiver, orimpair the enforcement of a regulation or ban against a Qualified Patient and PrimaryCaregiver.

The issue has been raised of whether the Qualified Patient and Primary Caregiver

cultivation restrictions, and ability for a local jurisdiction to ban such activity are withinthe authority of a local jurisdiction to enforce, within their borders, all local, police,sanitary, and other ordinances and regulations (See, City of Riverside v. Inland Empire

Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th729)or- are theyimpermissible restrictions on the rights and amounts of medical cannabis a qualifiedpatients or primary caregiver can cultivate under The Compassionate Use Act of 1996(Proposition 215), a voter initiative. (Health and Safety Code Section 11362.5) (See,

People v. Kelly (2010) 47 Cal.4th

1008.)

Cultivation:

Type 1Type 4 Cultivation Licenses. Health and Safety Code Section 11362.777 isadded establishing a Medical Cannabis Cultivation Program underthe California StateDepartment of Food and Agriculture for the cultivation of medical marijuana.

A state licensed Cultivator may engage in Cultivation which is any activity involving

the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.Cultivation will be recognized as an agricultural activity.

No medical marijuana may be cultivated without first obtaining both a license, permit, orother entitlement, specifically permitting cultivation pursuant to the MMRSA provisions,from the local jurisdiction in which the cultivation will occur and a state license.

If a local jurisdiction does not have land use regulations or ordinances regulating orprohibiting the cultivation of marijuana, either expressly or otherwise under principles ofpermissive zoning, or chooses not to administer a conditional permit program pursuant tothis section, then commencing March 1, 2016, the state shall be the sole licensingauthority for medical marijuana cultivation applicants in that local jurisdiction.


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Health and Safety Code Section 11362.769 is added which provides that indoor andoutdoor medical marijuana cultivation shall be conducted in accordance with state andlocal laws related to land conversion, grading, electricity usage, water usage, waterquality, woodland and riparian habitat protection, agricultural discharges, and similarmatters under the coordinated efforts of the State Board of Forestry and Fire Protection,

the Department of Fish and Wildlife, the State Water Resources Control Board, theCalifornia regional water quality control boards, and traditional state law enforcementagencies so as to address the environmental impacts of medical marijuana cultivation.License applicants will be required to adhere to Regional Water Quality Control Boardorders as a condition to state licensure.

Plant Canopy Culti vation L imi ts are as fol lows:

The amount of cannabis that can be grown is determined by an agricultural term knownas plant canopywhich is the aggregate area of vegetative growth of live marijuanaplants.

Plant canopy limits are:(1) Type 1, or specialty outdoor, for outdoor cultivation using no artificial

lighting of less than 5,000 square feet of total canopy size on one premises,or up to 50 mature plants on non-contiguous plots.

(2) Type 1A, or specialty indoor, for indoor cultivation using exclusivelyartificial lighting of less than 5,000 square feet of total canopy size on onepremises.

(3) Type 1B, or specialty mixed-light, for cultivation using a combination ofnatural and supplemental artificial lighting at a maximum threshold to bedetermined by the licensing authority, of less than 5,000 square feet of totalcanopy size on one premises.

(4) Type 2, or small outdoor, for outdoor cultivation using no artificiallighting between 5,001 and 10,000 square feet of total canopy size on onepremises.

(5) Type 2A, or small indoor, for indoor cultivation using exclusivelyartificial lighting between 5,001 and 10,000 square feet of total canopy size

on one premises.

(6) Type 2B, or small mixed-light, for cultivation using a combination ofnatural and supplemental artificial lighting at a maximum threshold to bedetermined by the licensing authority, between 5,001 and 10,000 squarefeet of total canopy size on one premises.


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(7) Type 3, or outdoor, for outdoor cultivation using no artificial lightingbetween 10,001 and 44,000 square feet of total canopy on one premises.

(8) Type 3A, or indoor, for indoor cultivation using exclusively artificiallighting between 10,001 and 22,000 square feet of total canopy size on one

premises.

Type 4, or nursery, license for cultivation of medical cannabis solely as anursery. A Type 4 Nursery means a licensee that produces only clones, immatureplants, seeds, and other agricultural products used specifically for the planting,propagation, and cultivation of medical cannabis. No canopy limits are set forthfor a Type 4Nursery License. Type 4 licensees may transport live plants.

Unique Identi fi er and Track and Trace Program:There will be a universal identification program for commercial medical cannabis activity

authorized by the three bills in which permitted medical marijuana plants are identified atthe cultivation site and tracked through the distribution process. A unique identifier shallbe attached at the base of each plant. A unique identifier, such as, but not limited to, a ziptie, shall be issued for each medical marijuana plant. Unique identifiers will only beissued to those persons appropriately licensed.

The MMRSA adds Business and Professions Code Section 19335 which establishesunder the Department of Food and Agriculture a track and trace program for reporting themovement of medical marijuana items throughout the distribution chain that utilizes theunique identifier established pursuant to Health and Safety Code Section 11362.777, andprovides for there to be secure packaging that is capable of providing identifyinginformation that captures, at a minimum, all of the following information: (1) Thelicensee receiving the product; (2) the transaction date; and (3) the cultivator from whichthe product originates.

The Board of Equalization in consultation with the Department of Food and Agricultureis to adopt a system for reporting the movement of commercial cannabis and cannabisproducts.

Licensed cultivators and manufacturers shall package or seal all medical cannabis andmedical cannabis products in tamper-evident packaging and use a unique identifier, such

as a batch and lot number or bar code, to identify and track the medical cannabis ormedical cannabis products. All packaging and sealing shall be completed prior to medicalcannabis or medical cannabis products being transported or delivered to a licensee,qualified patient, or caregiver.


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Statewide Electroni c Database:

The Department of Food and Agriculture will create an electronic database using theunique identifier containing the electronic shipping manifests which shall include, but notbe limited to, the following information:

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

(B) The estimated times of departure and arrival.

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

(D) The actual time of departure and arrival.

(E) A categorization of the product.

(F) The license number and the unique identifier pursuant to Section 11362.777 ofthe Health and Safety Code issued by the licensing authority for all licenseesinvolved in the shipping process, including cultivators, transporters,distributors, and dispensaries.

The electronic database will be designed to flag irregularities and will require that theBureau of Medical Marijuana Regulation be immediately informed upon the finding of anirregularity or suspicious finding related to a licensee, applicant, or commercial cannabisactivity for investigatory purposes.

Distribution:

Type 11Distributor license. Business and Professions Code section 19334 is addedwhich provides that state licenses to be issued by the Department of Consumer Affairsinclude a Classification Type 11Distributor, license for the distribution of medical

cannabis and medical cannabis products from manufacturer to dispensary. A Type 11Distributor licensee shall hold a Type 12 Transporter license and register each locationwhere product is stored for the purposes of distribution.

A Type 11Distributor licensee shall not hold a license in a cultivation, manufacturing,dispensing, or testing license category and shall not own, or have an ownership interestin, a facility licensed in those categories other than a security interest, lien, orencumbrance on property that is used by a licensee. A Type 11 - Distributor licensee shallbe bonded and insured at a minimum level established by the licensing authority.

The MMRSA defines a Distributor to mean a person licensed under the MMRSA toengage in the business of purchasing medical cannabis from a licensed cultivator, ormedical cannabis products from a licensed manufacturer, for sale to a licenseddispensary.


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Distribution is defined to mean the procurement, sale, and transport of medicalcannabis and medical cannabis products between entities licensed pursuant to theMMRSA.

All licensees holding cultivation or manufacturing licenses are required to send all

medical cannabis and medical cannabis products cultivated or manufactured to a licensedDistributor for: (1) Quality Assurance and Inspection; and (2) Batch Testing by a licensedTesting laboratory prior to distribution to a state licensed dispensary.

Upon receipt of medical cannabis or medical cannabis products by a cultivation ormanufacturing licensee the Distributor shall first inspect the product to ensure the identityand quantity of the product and then ensure a random sample of the medical cannabis ormedical cannabis product is tested by a licensed Testing laboratory prior to distributingthe batch of medical cannabis or medical cannabis products.

Upon issuance of a certificate of analysis by the licensed Testing laboratory that themedical cannabis product is fit for manufacturing or retail, all medical cannabis andmedical cannabis products shall undergo a quality assurance review by the Distributorprior to distribution to ensure the quantity and content of the medical cannabis or medicalcannabis product, and for tracking and taxation purposes by the state.

Di rect contr acting between Cul tivators, Manufacturers and Dispensaries:

Licensed cultivators, manufacturers, and dispensaries may directly enter into contractswith one another indicating the price and quantity of medical cannabis or medicalcannabis products to be distributed. A licensed Distributor responsible for executing thecontract is authorized to collect a fee for the services rendered, including, but not limitedto, costs incurred by a licensed Testing Laboratory, as well as applicable state or localtaxes and fees.

Transportation:

Type 12Transporter License. Business and Professions Code section 19337 is addedwhich provides that only a Type 12 Transporter licensee is authorized to transportmedical cannabis and medical cannabis products between licensees. A Type 12Transporter licensee will be required to be bonded and insured. The Bureau of MedicalMarijuana Regulation shall establish minimum security requirements for the commercialtransportation and delivery of medical cannabis and products.

Cultivated medical cannabis and medical cannabis products may only be transported by aType 12 licensed Transporter who will transfer the cultivated medical cannabis from

the licensed Cultivator to the fixed location of a Type 11 licensed Distributor for

distribution, after laboratory testing, to either a licensed dispensary or manufacturer.


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Prior to transporting medical cannabis or medical cannabis products, a licensedtransporter of medical cannabis or medical cannabis products shall do both of thefollowing:

(1) Complete an electronic shipping manifest as prescribed by the Department ofFood and Agriculture. The shipping manifest must include the unique identifier, pursuantto Section 11362.777 of the Health and Safety Code, issued by the Department of Foodand Agriculture for the original cannabis product.

(2) Securely transmit the manifest to the bureau and the licensee that will receivethe medical cannabis product. The Bureau of Medical Marijuana Regulation shall informthe Department of Food and Agriculture of information pertaining to commercialcannabis activity for the purpose of the track and trace program identified in Business andProfessions Code Section 19335.

Upon receipt of the transported shipment, the licensee receiving the shipment shallelectronically submit to the Department of Food and Agriculture a record verifyingreceipt of the shipment and the details of the shipment.

I ntr astate Travel by Transporter

Business and Professions Code Section 19338 is added which provides that a localjurisdiction within the State of California cannot prevent the transportation of medicalcannabis or medical cannabis products on public roads by a licensee transporting medicalcannabis or medical cannabis products in compliance with state regulations.

Laboratory Testing of Medical Cannabis and Medical Cannabis Products:

Type 8 - Testing Laboratory License. Medical cannabis and medical cannabis productswill be required to be tested by a licensed testing laboratory, prior to retail sale ordispensing, as follows:

(1) Medical cannabis from dried flower shall, at a minimum, be tested forpotency, pesticides, mold, and other contaminants.

(2) Medical cannabis extracts shall, at a minimum, be tested for potencyand purity of the product.

A Testing laboratory means a facility, entity, or site in the state that offers or performstests of medical cannabis or medical cannabis products and that is both of the following:(1) Accredited by an accrediting body that is independent from all other persons involvedin the medical cannabis industry in the state and (2) Registered with the State Departmentof Public Health.


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Testing licensees shall have their facilities licensed according to regulations set forth bythe licensing agency. A testing licensee shall not hold alicense in another licensecategory of Assembly Bill 266 (Wood) and shall not own or have ownership interest in afacility licensed pursuant to Assembly Bill 266 (Wood).

Testing Standards:The MMRSA adds Business and Professions Code Section 19342 which provides:(a) For the purposes of testing medical cannabis or medical cannabis products, licenseesshall use a licensed testing laboratory that has adopted a standard operating procedureusing methods consistent with general requirements for the competence of testing andcalibration activities, including sampling, using standard methods established by theInternational Organization for Standardization, specifically ISO/IEC 17020 and ISO/IEC17025 to test medical cannabis and medical cannabis products that are approved by anaccrediting body that is a signatory to the International Laboratory AccreditationCooperation Mutual Recognition Arrangement.

(b) An agent of a licensed testing laboratory shall obtain samples according to astatistically valid sampling method for each lot.

(c) A licensed testing laboratory shall analyze samples according to either of thefollowing: (1) The most current version of the cannabis inflorescence monographpublished by the American Herbal Pharmacopoeia; (2) Scientifically valid methodologythat is demonstrably equal or superior to paragraph (1), in the opinion of the accreditingbody.

(d) If a test result falls outside the specifications authorized by law or regulation, thelicensed testing laboratory shall follow a standard operating procedure to confirm orrefute the original result.

(e) A licensed testing laboratory shall destroy the remains of the sample of medicalcannabis or medical cannabis product upon completion of the analysis.

L icensing Requi rements for Testing laboratory:

Business and Professions Code Section 19343 is added. A licensed testing laboratoryshall not handle, test, or analyze medical cannabis or medical cannabis products unlessthe licensed testing laboratory is:

(a) Is registered by the State Department of Public Health.

(b) Is independent from all other persons and entities involved in themedical cannabis industry.


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(c) Follows the methodologies, ranges, and parameters that are contained inthe scope of the accreditation for testing medical cannabis or medicalcannabis products. The testing lab shall also comply with any otherrequirements specified by the State Department of Public Health.

(d) Notifies the State Department of Public Health within one business dayafter the receipt of notice of any kind that its accreditation has been denied,suspended, or revoked.

(e) Has established standard operating procedures that provide for adequatechain of custody controls for samples transferred to the licensed testinglaboratory for testing.

Certi fi cate of Analysis after Batch Testing:

Batch means a specific quantity of medical cannabis or medical cannabis products that

is intended to have uniform character and quality, within specified limits, and is producedaccording to a single manufacturing order during the same cycle of manufacture.

Lot means a batch, or a specifically identified portion of a batch, having uniform

character and quality within specified limits. In the case of medical cannabis or a medicalcannabis product produced by a continuous process, lot means a specifically identified

amount produced in a unit of time or a quantity in a manner that ensures its havinguniform character and quality within specified limits.

Business and Professions Code Section 19344 is added which provides that:

(a) A licensed testing laboratory shall issue a certificate of analysis for each lot,with supporting data, to report both of the following:

(1) Whether the chemical profile of the lot conforms to the specifications ofthe lot for compounds, including, but not limited to, all of the following:

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(C) Cannabidiol (CBD).

(D) Cannabidiolic Acid (CBDA).

(E) The terpenes described in the most current version of the cannabisinflorescence monograph published by the American Herbal

Pharmacopoeia.

(F) Cannabigerol (CBG).


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(G) Cannabinol (CBN).

(H) Any other compounds required by the State Department of PublicHealth.

(2) That the presence of contaminants does not exceed the levels that are

the lesser of either the most current version of the American HerbalPharmacopoeia monograph or the State Department of Public Health. Forpurposes of this paragraph, contaminants includes, but is not limited to, all of thefollowing:

(A)Residual solvent or processing chemicals.

(B)Foreign material, including, but not limited to, hair, insects, or similar orrelated adulterant.

(C)

Microbiological impurity, including total aerobic microbial count, totalyeast mold count, P. aeruginosa, aspergillus spp., s. aureus, aflatoxin B1,B2, G1, or G2, or ochratoxin A.

(D) Whether the batch is within specification for odor and appearance.

(b) Residual levels of volatile organic compounds shall be below the lesser ofeither the specifications set by the United States Pharmacopeia (U.S.P. Chapter 467) orthose set by the State Department of Public Health.

Source of Cannabis that a l icensed Testing L aboratory may test:Business and Professions Code Section 19345 is addedwith respect to the source ofCannabis that a licensed Testing Laboratory may test:

(a) A licensed testing laboratory shall not acquire or receive medical cannabis ormedical cannabis products except from a licensed facility in accordance with this chapter,and shall not distribute, sell, deliver, transfer, transport, or dispense medical cannabis ormedical cannabis products, from which the medical cannabis or medical cannabisproducts were acquired or received. All transfer or transportation shall be performedpursuant to a specified chain of custody protocol.

(b) A licensed testing laboratory may receive and test samples of medical cannabisor medical cannabis products from a qualified patient or primary caregiver only if he orshe presents his or her valid recommendation for cannabis for medical purposes from aphysician. A licensed testing laboratory shall not certify samples from a qualified patient


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or caregiver for resale or transfer to another party or licensee. All tests performed by alicensed testing laboratory for a qualified patient or caregiver shall be recorded with thename of the qualified patient or caregiver and the amount of medical cannabis or medicalcannabis product received.

(c) The State Department of Public Health shall develop procedures to ensure thattesting of cannabis occurs prior to delivery to dispensaries or any other business, specifyhow often licensees shall test cannabis and that the cost of testing shall be borne by thelicensed cultivators, and require destruction of harvested batches whose testing samplesindicate noncompliance with health and safety standards promulgated by the StateDepartment of Public Health, unless remedial measures can bring thecannabis intocompliance with quality assurance standards as promulgated by the State Department ofPublic Health.

(d) The State Department of Public Health shall establish a licensing fee, and

laboratories shall pay a fee to be licensed. Licensing fees shall not exceed the reasonableregulatory cost of the licensing activities.

Manufacturer:

Type 6Manufacturer 1 / Type 7Manufacturer 2 LicenseBusiness and Professions Code section 19341 is enacted. The State Department of PublicHealth shall promulgate regulations governing the licensing of cannabis manufacturers ofCannabis concentrates, Edible cannabis products, and Topical cannabis products.

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 atopical product.

Cannabis concentrate means manufactured cannabis that has undergone a process to

concentrate the cannabinoid active ingredient, thereby increasing the products potency.

Edible cannabis productmeans manufactured cannabis that is intended to be used, inwhole or in part, for human consumption, including, but not limited to, chewing gum. Anedible medical cannabis product under the MMRSA is not considered food as defined bySection 109935 of the Health and Safety Code or a drug as defined by Section 109925 ofthe Health and Safety Code. Business and Professions Code Section 19347 Subsection (a)

is added which provides that only generic food names may be used to describe ediblemedical cannabis products.

Topical cannabis means a product intended for external use. A topical cannabis product

is not considered a drug as defined by Section 109925 of the Health and Safety Code.


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A Manufactureris that person that conducts the production, preparation, propagation,or compounding of manufactured medical cannabis, or medical cannabis products eitherdirectly or indirectly or by extraction methods, or independently by means of chemicalsynthesis or by a combination of extraction and chemical synthesis at a fixed location thatpackages or repackages medical cannabis or medical cannabis products or labels or

relabels its container, that holds a valid state license pursuant to the MMRSA, and thatholds a valid local license or permit.

Manufacturing Licenses to be issued are as follows:

Type 6 Manufacturing level 1, for manufacturing sites that produce medicalcannabis products using nonvolatile solvents.

Type 7 Manufacturing level 2, for manufacturing sites that produce medical cannabisproducts using volatile solvents. The State Department of Public Health shall

limit the number of licenses of this type.

A Manufacturing site means a location that produces, prepares, propagates, orcompounds manufactured medical cannabis or medical cannabis products, directly orindirectly, by extraction methods, independently by means of chemical synthesis, or by acombination of extraction and chemical synthesis, and is owned and operated by alicensee for these activities.

A Manufacturer, subject to license, will be able at a Manufacturing site to produce,prepare, propagate, or compound manufactured medical cannabis or medical cannabisproducts, directly or indirectly, by extraction methods, independently by means ofchemical synthesis, or by a combination of extraction and chemical synthesis, and isowned and operated by a licensee for these activities.

Conflict:There is a conflict between a Type 6 Manufacturing Level 1 and Type 7 ManufacturingLevel 2 manufacturing licenses issued under the MMRSA.

Health & Safety Code 11379.6(a) was not amended or repealed which makes it astraight criminal felony for every person who manufactures, compounds, converts,produces, derives, processes, or prepares, either directly or indirectly by chemical

extraction or independently by means of chemical synthesis, any controlled substancespecified in Health and Safety Code Sections 11054, 11055, 11056, 11057, or 11058.


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The MMRSA did not amend the manufacturing criminal felony set forth Health & SafetyCode 11379.6(a) which states:

(a)

Except as otherwise provided by law, every person who manufactures,compounds, converts, produces, derives, processes, or prepares, either

directly or indirectly by chemical extraction or independently by means ofchemical synthesis, any controlled substance specified in Section 11054,11055, 11056, 11057, or 11058 shall be punished by imprisonmentpursuant to subdivision (h) of Section 1170 of the Penal Code for three,five, or seven years and by a fine not exceeding fifty thousand dollars($50,000).

The felony statute Health & Safety Code 11379.6(a) requires amendment or repeal tobe consistent with the Type 6Manufacturer 1 / Type 7Manufacturer 2 Licensecontemplated under the MMRSA.

Labeling

Business and Professions Code Section 19347 is added setting forth labeling requirementof cannabis products:

(a) Prior to delivery or sale at a dispensary, medical cannabis products shall be labeledand in a tamper-evident package. Labels and packages of medical cannabis products shallmeet the following requirements:

(1) Medical cannabis packages and labels shall not be made to be attractive to

children.(2) All medical cannabis product labels shall include the following information,

prominently displayed and in a clear and legible font:

(A) Manufacture date and source.

(B) The statement SCHEDULE I CONTROLLED SUBSTANCE.

(C) The statement KEEP OUT OF REACH OF CHILDREN AND ANIMALS

in bold print.

(D) The statement FOR MEDICAL USE ONLY.

(E) The statement THE INTOXICATING EFFECTS OF THIS PRODUCT MAY

BE DELAYED BY UP TO TWO HOURS.


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(F) The statement THIS PRODUCT MAY IMPAIR THE ABILITY TO DRIVE

OR OPERATE MACHINERY. PLEASE USE EXTREME CAUTION.

(G) For packages containing only dried flower, the net weight of medical cannabisin the package.

(H) A warning if nuts or other known allergens are used.

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

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

(K) Identification of the source and date of cultivation and manufacture.(L) Any other requirement set by the bureau.

(M) Information associated with the unique identifier issued by the Department ofFood and Agriculture pursuant to Section 11362.777 of the Health and SafetyCode.

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

Dispensary:

Type 10Dispensary License. A Dispensary is defined to mean a facility wheremedical cannabis, medical cannabis products, or devices for the use of medical cannabisor medical cannabis products are offered, either individually or in any combination, forretail sale, including an establishment that delivers, pursuant to express authorization bylocal ordinance, medical cannabis and medical cannabis products as part of a retail sale.

Dispensing is defined to mean any activity involving the retail sale of medical cannabisor medical cannabis products from a dispensary.

A Type 10 Dispensary licensee may operate a physical retail establishment that makes

retail sales of medical cannabis or medical cannabis products from a fixed location.Deliveries may originate from the fixed location of the Dispensary license to QualifiedPatients and their Primary Caregivers, if so expressly authorized by a local ordinance.


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A Type 10 Dispensary licensee for the retail of medical cannabis or medical cannabisproducts is prohibited from engaging in the cultivation of medical cannabis or themanufacture of medical cannabis products.

A Type 10A Special Dispensary Statuslicense, is an operator of no more than 3

dispensaries, who may apply for a Type 6 (Manufacturing Level 1) or Type 7(Manufacturing Level 2) state license and hold a Type 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4cultivation license or combination thereof if, under the Type 1, 1A, 1B, 2, 2A, 2B, 3, 3A,3B, 4 or combination of cultivation licenses thereof, with no more than four acres of totalcanopy size of cultivation by the Type 10A Special Dispensary Status licenseeoccurring throughout the state during the period that the respective licenses are valid. Allcultivation pursuant to a Type 10A Special Dispensary Statuslicense shall comply withlocal ordinances.The Type 10A Special Dispensary Status license provision becomesinoperative on January 1, 2026.

Secur ity and Safety Measures:Business and Professions Code section 19334 (c) is added. A licensed dispensary shallimplement sufficient security measures to both deter and prevent unauthorized entranceinto areas containing medical cannabis or medical cannabis products and theft of medicalcannabis or medical cannabis products at the dispensary. These security measures shallinclude, but not be limited to, all of the following:

(1) Preventing individuals from remaining on the premises of the dispensary if they arenot engaging in activity expressly related to the operations of the dispensary.

(2) Establishing limited access areas accessible only to authorized dispensary personnel.

(3) Storing all finished medical cannabis and medical cannabis products in a secured andlocked room, safe, or vault, and in a manner as to prevent diversion, theft, and loss,except for limited amounts of cannabis used for display purposes, samples, or immediatesale.

Business and Professions Code section 19334 (d) is added. A dispensary shall notify thelicensing authority and the appropriate law enforcement authorities within 24 hours afterdiscovering any of the following:

(1) Significant discrepancies identified during inventory. The level of significance shallbe determined by the bureau.

(2) Diversion, theft, loss, or any criminal activity involving the dispensary or any agent oremployee of the dispensary.


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(3) The loss or unauthorized alteration of records related to cannabis, registeredqualifying patients, primary caregivers, or dispensary employees or agents.

(4) Any other breach of security.

Delivery:Business and Professions Code section 19340 is added. Delivery means thecommercial transfer of medical cannabis or medical cannabis products from adispensary, up to an amount determined by the Bureau of Medical Marijuana Regulationto a primary caregiver or qualified patient as defined in Section 11362.7 of the Health andSafety Code, or a testing laboratory. Delivery also includes the use by a dispensary of

any technology platform owned and controlled by the dispensary, or independentlylicensed the MMRSA, that enables qualified patients or primary caregivers to arrange foror facilitate the commercial transfer by a licensed dispensary of medical cannabis ormedical cannabis products.

The MMRSA adds Business and Professions Code Section 19340 which providesconditions that Deliveries that be made by a state licensed Dispensary and in localjurisdiction that does not explicitly prohibit it by local ordinance on the condition that thelocal jurisdiction in which the licensed dispensary is located, and the local jurisdiction inwhich each delivery is made, do not explicitly by ordinance prohibit delivery. A localjurisdiction shall not prevent carriage of medical cannabis or medical cannabis productson public roads by a licensee acting in compliance with the MMRSA.

Taxation:

A county may impose a tax on the privilege of cultivating, dispensing, producing,processing, preparing, storing, providing, donating, selling, or distributing medicalcannabis or medical cannabis products by a licensee operating pursuant state regulations.The board of supervisors shall specify in the ordinance proposing the tax the activitiessubject to the tax, the applicable rate or rates, the method of apportionment, if necessary,and the manner of collection of the tax. The tax may be imposed for generalgovernmental purposes or for purposes specified in the ordinance by the board ofsupervisors. A county may impose a tax on the privilege of cultivating, dispensing,producing, processing, preparing, storing, providing, donating, selling, or distributingmedical cannabis or medical cannabis products by a licensee operating pursuant to stateregulations. Any tax imposed shall be subject to applicable voter approval requirements

imposed by law. Under the California Constitution no local government may impose,extend, or increase any general tax unless and until that tax is submitted to the electorateand approved by a majority vote. No local government may impose, extend, or increaseany special tax unless and until that tax is submitted to the electorate and approved by atwothirds vote.


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Medical Board of Calif ornia:

Business and Professions Code section 2220.05 is amended to read:(a) In order to ensure that its resources are maximized for the protection of the public, theMedical Board of California shall prioritize its investigative and prosecutorial resourcesto ensure that physicians and surgeons representing the greatest threat of harm are

identified and disciplined expeditiously. Cases involving any of the following allegationsshall be handled on a priority basis, as follows, with the highest priority being given tocases in the first paragraph:

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

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

(3) Repeated acts of clearly excessive prescribing, furnishing, or administering ofcontrolled substances, or repeated acts of prescribing, dispensing, or furnishing ofcontrolled substances without a good faith prior examination of the patient and medicalreason therefor. However, in no event shall a physician and surgeon prescribing,furnishing, or administering controlled substances for intractable pain consistent withlawful prescribing, including, but not limited to, Sections 725, 2241.5, and 2241.6 of thiscode and Sections 11159.2 and 124961 of the Health and Safety Code, be prosecuted forexcessive prescribing and prompt review of the applicability of these provisions shall bemade in any complaint that may implicate these provisions.

(4) Repeated acts of clearly excessive recommending of cannabis to patients for medicalpurposes, or repeated acts of recommending cannabis to patients for medical purposeswithout a good faith prior examination of the patient and a medical reason for therecommendation.

(5) Sexual misconduct with one or more patients during a course of treatment or anexamination.

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

It will be unlawful for a physician or surgeon who recommends cannabis to a patient for amedical purpose to accept, solicit, or offer any form of remuneration from or to a facilityissued a state license, if the physician and surgeon or his or her immediate family have afinancial interest in that facility.


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Labor Peace Agreement 20 or more employees:

Licensees with 20 or more employees, must provide a statement that the applicant willenter into, or demonstrate that his has already entered into, and abide by the terms of alabor peace agreement. A Labor peace agreement means an agreement between alicensee and a bona fide labor organization that, at a minimum, protects the states

proprietary interests by prohibiting labor organizations and members from engaging inpicketing, work stoppages, boycotts, and any other economic interference with theapplicants business. This agreement means that the applicant has agreed not to disruptefforts by the bona fide labor organization to communicate with, and attempt to organizeand represent, the applicants employees. The agreement shall provide a bona fidelabororganization access at reasonable times to areas in which the applicants 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 typeof agreement shall not mandate a particular method of election or certification of the bonafide labor organization.

Privacy:

Business and Professions Code section 19355 is added. (a) Information identifying thenames of patients, their medical conditions, or the names of their primary caregiversreceived and contained in records kept by the office or licensing authorities for thepurposes of administering this chapter are confidential and shall not be disclosed pursuantto the California Public Records Act (Chapter 3.5 (commencing with Section 6250) ofDivision 7 of Title 1 of the Government Code), except as necessary for authorizedemployees of the State of California or any city, county, or city and county to performofficial duties pursuant to this chapter, or a local ordinance.

(b) Information identifying the names of patients, their medical conditions, or the namesof their primary caregivers received and contained in records kept by the bureau for thepurposes of administering this chapter shall be maintained in accordance with Chapter 1(commencing with Section 123100) of Part 1 of Division 106 of the Health and SafetyCode, Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code, and otherstate and federal laws relating to confidential patient information.

(c) Nothing in this section precludes the following:

(1) Employees of the bureau or any licensing authorities notifying state or local

agencies about information submitted to the agency that the employee suspects isfalsified or fraudulent.

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


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

(4) Provision of information requested pursuant to a court order or subpoenaissued by a court or an administrative agency or local governing body authorized by law

to issue subpoenas.

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

_____________________


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Medical Marijuana Regulation and Safety Act

State License Types

License Type: Cultivation

Issuing Authority: Department of Food and Agriculture

(1) Type 1, or specialty outdoor, for outdoor cultivation using no artificial lightingof less than 5,000 square feet of total canopy size on one premises, or up to 50mature plants on non-contiguous plots.

(2) Type 1A, or specialty indoor, for indoor cultivation using exclusively artificiallighting of less than 5,000 square feet of total canopy size on one premises.

(3) Type 1B, or specialty mixed-light, for cultivation using a combination of naturaland supplemental artificial lighting at a maximum threshold to be determined bythe licensing authority, of less than 5,000 square feet of total canopy size on onepremises.

(4) Type 2, or small outdoor, for outdoor cultivation using no artificial lightingbetween 5,001 and 10,000 square feet of total canopy size on one premises.

(5) Type 2A, or small indoor, for indoor cultivation using exclusively artificiallighting between 5,001 and 10,000 square feet of total canopy size on onepremises.

(6) Type 2B, or small mixed-light, for cultivation using a combination of naturaland supplemental artificial lighting at a maximum threshold to be determined bythe licensing authority, between 5,001 and 10,000 square feet of total canopy sizeon one premises.

(7) Type 3, or outdoor, for outdoor cultivation using no artificial lighting between10,001 and 44,000 square feet of total canopy on one premises. The Division ofMedical Cannabis Cultivation shall limit the number of licenses allowed of thistype. (1 acre = 43,560 square feet)

(8) Type 3A, or indoor, for indoor cultivation using exclusively artificial lightingbetween 10,001 and 22,000 square feet of total canopy size on one premises. TheDivision of Medical Cannabis Cultivation shall limit the number of licensesallowed of this type.


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(9) Type 3B, or mixed-light," for cultivation using a combination of natural andsupplemental artificial lighting at a maximum threshold to be determined by thelicensing authority, between 10,001 and 22,000 square feet of total canopysize onone premises. The Division of Medical Cannabis Cultivation shall limit thenumber of licenses allowed of this type

(10) Type 4, or nursery, for cultivation of medical cannabis solely as a nursery.Type 4 licensees may transport live plants.

_____________________

License Type: Manufacturers and Licensed Laboratories

Issuing Authority: Department of Public Health

(1) Type 6, or manufacturing level 1, for manufacturing sites that produce medicalcannabis products using nonvolatile solvents.

(2) Type 7, or manufacturing level 2, for manufacturing sites that producemedical cannabis products using volatile solvents. The Division shall limit thenumber of licenses of this type.

(3) Type 8, or testing, for testing of medical cannabis and medical cannabisproducts. Type 8 (testing) licensees shall have their facilities licensed accordingto regulations set forth by the division. A Type 8 (testing) licensee shall not hold alicense in another license category of this chapter and shall not own or haveownership interest in a laboratory licensed pursuant to this chapter.

_____________________

License Type: Distributors, Dispensaries, and Transporters

Issuing Authority: Bureau of Marijuana Regulation

(1) Type 10, or dispensary, for the retail of medical cannabis or medical cannabisproducts. This license shall allow for delivery where expressly authorized by localordinance.

(2) Type 10A, or special dispensary status, for dispensers who have no more thanthree licensed dispensary facilities. This license shall allow for delivery whereexpressly authorized by local ordinance.

(3) Type 11, or distributor, for the certification of the content of all medicalcannabis or medical cannabis products and distribution between licensees.


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A Type 11 licensee shall hold a Type 12 license, or transporter license, andregister each laboratory location where product is stored for the purposes ofdistribution. A Type 11 licensee shall not hold a license in any cultivation,manufacturing, dispensing, or testing license category and shall not own, or havean ownership interest in, a laboratory licensed to these categories pursuant to this

chapter other than a security interest, lien, or encumbrance on property that is usedby a licensee. A Type 11 license shall be bonded and insured at a level no less theminimum established by the licensing authorities.

(4) Type 12, or transport, for transporters of medical cannabis or medical cannabisproducts. A Type 12 license shall be bonded and insured at a level no less theminimum established by the licensing authorities.

_____________________

Medical Marijuana Regulation and Safety ActLicense Restrictions

A Licensee may hold a state license in up to two separate license categories, as follows:

(1) Type 1 (specialty outdoor), 1A (specialty indoor), 1B (specialty mixed-light),Type 2 (small outdoor), Type 2A (small indoor), and Type 2B (small mixed-light)licensees, or a combination thereof, may apply for a Type 6 (manufacturing level1) or Type 7 (manufacturing level 2) state license, or a combination thereof.

(2) Type 6 (manufacturing level 1) and Type 7 (manufacturing level 2), or acombination thereof, may apply for a Type 1 (specialty outdoor), 1A (specialtyindoor), 1B (specialty mixed-light), Type 2 (small outdoor), Type 2A (smallindoor), and Type 2B (small mixed-light) or a combination thereof.

(3) Type 6 (manufacturing level 1) and Type 7 (manufacturing level 2), or acombination thereof, may apply for a Type 10A (special dispensary status) statelicense.

(4) Type 10A (special dispensary status) may apply for a Type 6 (manufacturing level1) and Type 7 (manufacturing level 2), state license, or a combination thereof.

(5) Type 1 (specialty outdoor), 1A (specialty indoor), 1B (specialty mixed-light),Type 2 (small outdoor), Type 2A (small indoor), and Type 2B (small mixed-light)licensees, or a combination thereof, may apply for a Type 10A (special dispensarystatus) state license.


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(6)

Type 10A (special dispensary status) state licensees may apply for Type 1(specialty outdoor), 1A (specialty indoor), 1B (specialty mixed-light), Type 2(small outdoor), Type 2A (small indoor), and Type 2B (small mixed-light) statelicense, or a combination thereof.

(7)

Type 11 (distributor) licensees may apply for a Type 12 (transport) license.

(8)

Type 12 (transport) licensees may apply for a Type 11 (distributor) license.

A Type 10 dispensary license for the retail of medical cannabis or medical

cannabis products is prohibited from engaging in cultivation of medical cannabis or themanufacture of medical cannabis products.

A Type 10A special dispensary status licensee, which is the operator of no morethan 3 dispensaries, may apply for a Type 6 (Manufacturing Level 1) or Type 7

(Manufacturing Level 2) state license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 orcombination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination oflicenses thereof, no more than four acres of total canopy size of cultivation by thelicensee is occurring throughout the state during the period that the respective licenses arevalid. All cultivation pursuant to this section shall comply with local ordinances.Thisprovision becomes inoperative on January 1, 2026.

Ownership Prohibition:

A person or entity that holds a state license is prohibited from holding an ownershipinterest in real property, personal property, or other assets associated or used in any other

license category, except as set in the MMRSA. A Type 11 Distributor licensee shall nothold a license in a cultivation, manufacturing, dispensing, or testing license category andshall not own, or have an ownership interest in, a facility licensed to any of thosecategories other than a security interest, lien, or income or encumbrance on the propertythat is used by a licensee.

_____________________


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Medical Marijuana Regulation and Safety Act

Application Requirements

Application required are set forth in Business and Professions Code section 19322 whichis added to read:

19322 (a) A person or entity shall not submit an application for a state license issued bythe department pursuant to this chapter unless that person or entity has received a license,permit, or authorization by a local jurisdiction. An applicant for any type of state licenseissued pursuant to this chapter shall do all of the following:

(1) Electronically submit to the Department of Justice fingerprint images andrelated information required by the Department of Justice for the purpose of obtaininginformation as to the existence and content of a record of state or federal convictions andarrests, 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 isfree on bail or on his or her own recognizance, pending trial or appeal.

(A) The Department of Justice shall provide a response to the licensing authoritypursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(B) The licensing authority shall request from the Department of Justicesubsequent notification service, as provided pursuant to Section 11105.2 of thePenal Code, for applicants.

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

(2) Provide documentation issued by the local jurisdiction in which the proposedbusiness is operating certifying that the applicant is or will be in compliance with all localordinances and regulations.

(3) Provide evidence of the legal right to occupy and use the proposed location.For an applicant seeking a cultivator, distributor, manufacturing, or dispensary license,provide a statement from the owner of real property or their agent where the cultivation,distribution, manufacturing, or dispensing commercial medical cannabis activities will

occur, as proof to demonstrate the landowner has acknowledged and consented to permitcultivation, distribution, manufacturing, or dispensary activities to be conducted on theproperty by the tenant applicant.


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(4) If the application is for a cultivator or a dispensary, provide evidence that theproposed location is located beyond at least a 600-foot radius from a school, as requiredby Section 11362.768 of the Health and Safety Code.

(5) Provide a statement, signed by the applicant under penalty of perjury, that the

information provided is complete, true, and accurate.

(6) (A) For an applicant with 20 or more employees, provide a statement that theapplicant will enter into, or demonstrate that it has already entered into, and abide by theterms of a labor peace agreement.

(B) For the purposes of this paragraph, employee does not include a supervisor.

(C) For purposes of this paragraph, supervisor means an individual having

authority, in the interest of the licensee, to hire, transfer, suspend, lay off, recall, promote,

discharge, assign, reward, or discipline other employees, or responsibility to direct themor to adjust their grievances, or effectively to recommend such action, if, in connectionwith the foregoing, the exercise of that authority is not of a merely routine or clericalnature, but requires the use of independent judgment.

(7) Provide the applicants sellers permit number issued pursuant to Part 1

(commencing with Section 6001) of Division 2 of the Revenue and Taxation Code orindicate that the applicant is currently applying for a sellers permit.

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

(9) For an applicant seeking a cultivation license, provide a statement declaringthe applicant is an agricultural employer, as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section1140) of Division 2 of the Labor Code), to the extent not prohibited by law.

(10) For an applicant seeking licensure as a testing laboratory, register with theState Department of Public Health and provide any information required by the StateDepartment of Public Health.

(11) Pay all applicable fees required for licensure by the licensing authority.

19322 (b) For applicants seeking licensure to cultivate, distribute, or manufacturemedical cannabis, the application shall also include a detailed description of the


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applicants operating procedures for all of the following, as required by the licensing

authority:

(1) Cultivation.

(2) Extraction and infusion methods.

(3) The transportation process.(4) Inventory procedures.

(5) Quality control procedures.

_____________________

Disclaimer:

This Outline of Senate Bill 643 (Author:McGuire), Assembly Bill 266 (Author:Bonta), andAssembly Bill 243 (Author:Wood) is subject to further amendment as the analysis of each of the

regulatory bills evolves. As such, please do not rely upon this analysis, without further review of

the specific facts and circumstances as they may apply to your individual circumstance. ThisOutline is provided for educational purposes only. Legal Disclaimer: No legal advice is

intended to be given, or attorney/client relationship established, by the providing of this Outline.

Consult with an Attorney of your choice with respect to questions regarding any mattercontained herein.

Honorable Steven K. Lubell (Ret.)Telephone Los Angeles: (818) 937-1219Telephone Mendocino: (707) [email protected]
mailto:[email protected]:[email protected]:[email protected]

Documents

MMJNEWS Hon. Steven K. Lubell Medical Marijuana Regulation and Safety Act Summary 10092015.pdf