HomeMy WebLinkAboutStaff Report 7394
City of Palo Alto (ID # 7394)
City Council Staff Report
Report Type: Action Items Meeting Date: 10/24/2016
City of Palo Alto Page 1
Summary Title: Personal Cultivation of Marijuana
Title: Adoption of an Emergency Ordinance of the Council of the City of Palo
Alto Adding Chapter 9.17 (Personal Cultivation of Marijuana) to Title 9
(Public Peace, Morals and Safety) of the Palo Alto Municipal Code to Prohibit
Outdoor Cultivation of Marijuana and Informational Update on Proposition
64 and Finding the Amendment Exempt from Review Under the California
Environmental Quality Act (CEQA) Pursuant to State CEQA Guidelines Section
15061(b)(3)
From: City Manager
Lead Department: City Attorney
Recommendation
Staff recommends that Council consider whether to adopt the attached emergency ordinance
(Attachment A) adding Chapter 9.17 (Personal Cultivation of Marijuana) to Title 9 (Public Peace,
Morals and Safety) of the Palo Alto Municipal Code to prohibit outdoor marijuana cultivation in
Palo Alto, effective immediately, and finding the amendment necessary exempt from review
under the California Environmental Quality Act. This action is consistent with prior Council
policy.
Executive Summary
The proposed emergency ordinance is consistent with the City’s existing land use policy
adopted on June 9, 1997, as an uncodified urgency Ordinance No. 4422, prohibiting the
establishment and operation of medical marijuana dispensaries under the City’s zoning
ordinance (Attachment B). The proposed ordinance would expressly prohibit outdoor
marijuana cultivation, effective immediately.
Proposition 64 (Attachment C), titled the Control, Regulate, and Tax Adult Use of Marijuana
(“AUMA”), is before California voters for approval on November 8, 2016. If approved, the
AUMA will authorize nonmedical use of marijuana by individuals age 21 and older, and create a
state licensing and regulatory system for commercial cultivation, testing, manufacture and
distribution of nonmedical marijuana and marijuana products.
City of Palo Alto Page 2
Under the AUMA, cities will retain the ability to regulate, and in most cases ban, activities
legalized by the AUMA. Commercial activities will not be authorized until state licenses are
issued. State licenses will likely not be issued until January 2018, giving cities ample time to
study potential effects and enact any appropriate local regulations.
Personal cultivation of marijuana, however, would become immediately lawful upon passage of
the AUMA. While cities will retain the ability to regulate cultivation any time after adoption of
the AUMA, cities that are concerned about the potential effects of personal cultivation may
wish to ban certain activities, particularly outdoor cultivation, before the AUMA is approved by
voters, pending further study and potential amendment of regulations at a later date. Doing so
will maintain the status quo and avoid confusion in the community, pending further study and
consideration of all of the issues.
The attached emergency ordinance would expressly prohibit outdoor marijuana cultivation,
effective immediately. The ordinance requires 8 votes for approval, and is effective until
repealed or amended. Council retains the authority to amend or repeal the ordinance at any
time.
Background
On November 8, 2016 the AUMA will come before voters, and, if passed, will legalize the use,
sale, and consumption of nonmedical marijuana by persons 21 years of age and older.
Effective upon passage, the AUMA will make it legal for adults to: (1) smoke or ingest marijuana
or marijuana products; (2) possess, process, transport, purchase, obtain, or give away to
persons 21 years of age or older, without any compensation, 28.5 grams of marijuana, or 8
grams of concentrated marijuana, including as contained in marijuana products; and (3)
possess, plant, cultivate, harvest, dry or process up to six living marijuana plants for personal
use.
Where previous legislation related to medical marijuana created a dual state and local licensing
scheme, the AUMA gives the state sole responsibility for regulating nonmedical marijuana
businesses. The state will have until January 1, 2018 to begin issuing licenses and permits to
those businesses recognized by the AUMA. Even so, a state license cannot be issued to an
applicant whose operations would violate the provisions of any local ordinance or regulation. It
will be the state’s onus to ensure an applicant is compliant with local law.
Local governments retain the authority regulate personal cultivation of nonmedical marijuana.
The AUMA provides that local governments can reasonably regulate, but cannot ban personal
indoor cultivation of up to six living marijuana plants within the person’s private residence. In
contrast, local governments are allowed to regulate or ban personal outdoor cultivation
operations. Such a ban cannot inhibit residents from growing the maximum number of plants in
a locked and enclosed greenhouse, however. In the absence of a local regulation or ban, the
AUMA does not limit the number of plants that may be grown outside.
City of Palo Alto Page 3
While the AUMA does not require cities to enact a regulatory scheme or ban by a certain date,
it is assumed that should the legislation pass and a city does not have a ban or regulatory
scheme governing personal cultivation by November 9, 2016, a person will be able to cultivate
marijuana for personal use without limitation, except those listed in the AUMA.
A detailed explanation of the AUMA and local regulatory authority has been prepared by the
California League of Cities, and is attached to this staff report. (Attachment D)
Discussion
On June 9, 1997, the Council adopted uncodified urgency Ordinance No. 4422, prohibiting the
establishment and operation of medical marijuana dispensaries under the City’s zoning
ordinance (Attachment B).
This urgency ordinance was drafted to address medical marijuana dispensaries, and does not
include an express prohibition against marijuana cultivation or nonmedical marijuana activities,
generally. While under principles of permissive zoning, marijuana cultivation is presumptively
prohibited in Palo Alto because it is not listed as a permitted activity in the City’s zoning code,
the AUMA does not contain the same protective language as prior medical marijuana legislation
with respect to permissive zoning. Moreover, the statute’s language seems to anticipate that
cities will adopt ordinances prohibiting the activities they wish to keep out. To avoid confusion
and preserve local control, staff recommends adding an express prohibition of all outdoor
marijuana cultivation.
As an emergency ordinance, pursuant to Palo Alto Municipal Code 2.04.270(d), the proposed
ordinance prohibiting outdoor cultivation will require 8 of 9 City Council votes to pass.
Timeline
If passed by voters, the AUMA will allow personal cultivation of marijuana as early as November
9, 2016. To maintain the status quo and avoid confusion pending further consideration of the
issues, staff recommends that the City Council adopt the proposed emergency ordinance
prohibiting outdoor marijuana cultivation. The attached ordinance is an emergency ordinance
that takes effect immediately upon adoption. It requires 8 votes for adoption.
Further, under the AUMA, marijuana businesses can only commence operations after receiving
a state license that confirms the proposed business is in compliance with the relevant local
laws. It is likely that the State will not begin issuing marijuana commercial business licenses
until January 1, 2018.
Accordingly, staff recommends that any zoning code amendments or regulatory laws related to
commercial marijuana businesses be developed and adopted at a later date, but prior to
January 1, 2018.
City of Palo Alto Page 4
Resource Impact
The staff does not anticipate a resource impact associated with this Ordinance. Any future
efforts to develop an alternate approach to regulating commercial marijuana businesses or
personal cultivation would require staff time and could result in zoning or licensing provisions
requiring additional staff resources.
Environmental Review
This proposed ordinance is not a project within the meaning of section 15378 of the California
Environmental Quality Act (“CEQA”) Guidelines because it has no potential for resulting in
physical change in the environment, either directly or ultimately. In the event that this
proposed ordinance is found to be a project under CEQA, it is subject to the CEQA exemption
contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have
no possibility of a significant effect on the environment in that this proposed ordinance simply
codifies an existing prohibition.
Attachments:
Attachment A - Emergency Ordinance of the Council of the City of Palo Alto Adding
Chapter 9.17 (Personal Cultivation of Marijuana) to Title 9 of the Palo Alto Municipal
Code (PDF)
Attachment B – Ordinance No. 4422 (PDF)
Attachment C – Text of Proposition 64 (PDF)
Attachment D – League of California Cities Memorandum Re: Proposition 64 (PDF)
NOT YET APPROVED
1
161011 sh Subject Matter File/Marijuana/ORD - Personal Marijuana Cultivation
Ordinance No. ____
Emergency Ordinance of the Council of the City of Palo Alto Adding
Chapter 9.17 (Personal Cultivation of Marijuana) to Title 9 (Public Peace,
Morals and Safety) of the Palo Alto Municipal Code to Prohibit Outdoor
Cultivation of Marijuana
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Recitals. The Council of the City of Palo Alto finds and
declares as follows:
A. Following passage of Proposition 215, entitled the “Compassionate Use Act of
1996,” California courts have held that there is a limited exception from criminal liability for
seriously ill persons who are in need of medical marijuana for specified medical purposes and
who obtain and use medical marijuana under limited, specified circumstances.
B. On June 9, 1997, the Palo Alto City Council adopted uncodified urgency
Ordinance No. 4422 declaring the establishment and operation of medical marijuana
dispensaries to be prohibited use under the City’s zoning ordinance.
C. On November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act
(“AUMA”) will come before California voters as Proposition 64. If passed, the AUMA will legalize
the use, sale, and consumption of nonmedical marijuana by persons 21 years of age and older.
D. In addition, the AUMA will create a state regulatory and licensing system
governing commercialization of nonmedical marijuana, but will preserve local governments’
authority to regulate personal cultivation. Specifically, local governments may prohibit
personal outdoor cultivation and reasonably regulate personal indoor cultivation of nonmedical
marijuana.
E. Neither medical nor nonmedical marijuana cultivation are listed in the City’s
zoning code as permitted or conditionally-permitted land uses and are, therefore, prohibited
under the principles of permissive zoning provisions. (City of Corona v. Naulls (2008) 166
Cal.App.4th 418, 431-433). Nevertheless, the AUMA does not expressly recognize the
application of permissive zoning principles like previous medical marijuana legislation.
F. In order to protect the public health, safety, and welfare, the City Council desires
to add Palo Alto Municipal Code Chapter 9.17 to prohibit, in express terms, all outdoor
cultivation of medical and nonmedical marijuana.
G. This Ordinance is not a project within the meaning of section 15378 of the
California Environmental Quality Act (“CEQA”) Guidelines because it has no potential for
resulting in physical change in the environment, either directly or ultimately. In the event that
this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption
contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have
no possibility of a significant effect on the environment in that this Ordinance simply clarified
existing local regulations.
NOT YET APPROVED
2
161011 sh Subject Matter File/Marijuana/ORD - Personal Marijuana Cultivation
SECTION 2. Chapter 9.17 (Personal Cultivation of Marijuana) is hereby added to
Title 9 (Public Peace, Morals and Safety) of the Palo Alto Municipal Code to read as follows:
Chapter 9.17
PERSONAL CULTIVATION OF MARIJUANA
9.17.010 Definitions.
(a) “Marijuana” means all parts of the plant Cannabis sativa L., Cannabis indica, or
Cannabis ruderalis whether growing or not; the seeds thereof; the resin extracted from any
part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation
of the plant, its seeds or resin.
(b) “Marijuana cultivation” shall have the same meaning as “cultivation” set forth in
California Business and Professions Code Section 19300.5(k) as that section may be amended
from time to time.
9.17.020 Prohibition.
Outdoor marijuana cultivation is prohibited in the City of Palo Alto.
9.17.030 Enforcement.
The City may enforce this section in any manner permitted by law. The violation of
this Chapter shall be and is hereby declared to be a public nuisance and shall, at the discretion
of the City, create a cause of action for injunctive relief.
SECTION 3. Severability. If any provision, clause, sentence or paragraph of this
ordinance, or the application to any person or circumstances, shall be held invalid, such
invalidity shall not affect the other provisions of this ordinance which can be given effect
without the invalid provision or application and, to this end, the provisions of this ordinance are
hereby declared to be severable.
SECTION 4. CEQA. The City Council finds and determines that this Ordinance is not
a project within the meaning of section 15378 of the California Environmental Quality Act
(“CEQA”) because it has no potential for resulting in physical change in the environment, either
directly or ultimately. In the event that this Ordinance is found to be a project under CEQA, it is
subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it
can be seen with certainty to have no possibility of a significant effect on the environment in
that this Ordinance simply clarifies existing local regulations.
//
//
//
NOT YET APPROVED
3
161011 sh Subject Matter File/Marijuana/ORD - Personal Marijuana Cultivation
SECTION 5. Effective Date. The City Council finds and declares that, for the reasons
provided in Section 1, this Ordinance is necessary as an emergency measure for preserving the
public peace, health, or safety. Pursuant to Palo Alto Municipal Code section 2.04.270(d), this
Ordinance shall take full force and effect immediately upon adoption by a vote of four-fifths of
the council members present.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Principal Attorney City Manager
... ---------------------------.~~-~ • •
E. It is necessary for the preservation of the public
peace, health and safety to enact as an urgency measure an
ordinance, declaratory of existing law, prohibiting the
establishment and operation of medical marijuana dispensaries. The
reasons for the urgency are as follows:
1. The City has in recent weeks received inquiries
about establishment of a medical marijuana dispensary in the City.
2. Such inquiries should be taken seriously,
inasmuch as nearby communities have also received such requests and
experienced high interest by persons wishing to establish such
facilities. The City of San Jose, for example, has recently
obtained a court order requiring closure of an illegal medical
marijuana dispensary, and is processing permit requests for two
other facilities for which applicatiuns were filed under a
recently -enacted ordinance regulating medical marijuana
dispensaries.
3. While the City's zoning ordinan.ce (Title 18, Palo
Alto Municipal Code~ allows various kinds of medical and related
uses as perm~tted or conditional uses in specified zoning
districts, it does net provide for the medicinal distribution of
marijuana. Because cultivat.ion and possession of marijuana in
California was illegal until passage of Proposition 215, facilities
dispensing medical marijuana are not an enumerated use under the
zoning ordinance.
4. Experience in other communkCles suggests th~t a
ntunber of regulat.ory issues should be carefully considered prior to
allowing establishment of medical marijuana dispensaries in order
to prevent crime and ensure compatibility with other uses,
including resident ial uses and schools. These issues include
security requirements I appropriate zoning designations and
development standards, and monitoring and reporting requirements.
Study of these issues and development of recommendations will
require prioritization with other projects currently being
undertaken by the Police Department and the Department of Planning
and Community Environment.
5. Because dispensation of medical marijuana is not
an activity currently addressed in the MUnicipal Code, the City can
expect to experience enfurcement problems if persons attemp~ to
dispense medical ~arijuana in Palo Altol in the absence of
regulations specifically governing such uses. In light of the
expressed interest in establishing a medical marijuana dispensary
in Palo Alto, and the time required to study and develop
appropriate regulations, an urgency ordinance is necessary to
provide a clear statement of existing law and to protect the public
peace, health and safety.
SECTION 2 . Def initions . F(;r the purposes of this
Ordinance, the following definition shall apply:
2
970603bck: OOBOS20
178 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 63 CONTINuED
of California or the Supreme Court of the United States. The reasonable fees and costs of defending the action shall be a charge on funds appropriated to the Department of Justice, which shall be satisfied promptly.
PROPOSITION 64
This initiative measure is submitted to the people in accordance with the provisions of Section 8 of Article II of the California Constitution.
This initiative measure amends, repeals, and adds sections to the Business and Professions Code, the Food and Agricultural Code, the Health and Safety Code, the Labor Code, the Revenue and Taxation Code, and the Water Code; therefore, existing provisions proposed to be deleted are printed in strikeout type and new provisions proposed to be added are printed in italic type to indicate that they are new.
PROPOSED LAW
SECTION 1. Title.
This measure shall be known and may be cited as the Control, Regulate and Tax Adult Use of Marijuana Act (“the Adult Use of Marijuana Act”).
SEC. 2. Findings and Declarations.
A. Currently in California, nonmedical marijuana use is unregulated, untaxed, and occurs without any consumer or environmental protections. The Control, Regulate and Tax Adult Use of Marijuana Act will legalize marijuana for those over 21 years old, protect children, and establish laws to regulate marijuana cultivation, distribution, sale and use, and will protect Californians and the environment from potential dangers. It establishes the Bureau of Marijuana Control within the Department of Consumer Affairs to regulate and license the marijuana industry.
B. Marijuana is currently legal in our state for medical use and illegal for nonmedical use. Abuse of the medical marijuana system in California has long been widespread, but recent bipartisan legislation signed by Governor Jerry Brown is establishing a comprehensive regulatory scheme for medical marijuana. The Control, Regulate and Tax Adult Use of Marijuana Act (hereafter called the Adult Use of Marijuana Act) will consolidate and streamline regulation and taxation for both nonmedical and medical marijuana.
C. Currently, marijuana growth and sale is not being taxed by the State of California, which means our state is missing out on hundreds of millions of dollars in potential tax revenue every year. The Adult Use of Marijuana Act will tax both the growth and sale of marijuana to generate hundreds of millions of dollars annually. The revenues will cover the cost of administering the new law and will provide funds to: invest in public health programs that educate youth to prevent and treat serious substance abuse; train local law enforcement to enforce the new law with a focus on DUI enforcement; invest in communities to reduce the illicit market and create job opportunities; and provide for environmental cleanup and restoration of public lands damaged by illegal marijuana cultivation.
D. Currently, children under the age of 18 can just as easily purchase marijuana on the black market as adults can. By legalizing marijuana, the Adult Use of Marijuana Act will incapacitate the black market, and move marijuana purchases into a legal structure with strict safeguards against children accessing it. The Adult Use of Marijuana Act prohibits the sale of nonmedical marijuana to those
exceeding one thousand dollars ($1,000), or by both that imprisonment and fine. The court, on forms prescribed by the Department of Justice, shall notify the department of persons subject to this section. However, the prohibition in this section may be reduced, eliminated, or conditioned as provided in Section 29855 or 29860.
SEC. 12. Interim Standards.
Notwithstanding the Administrative Procedure Act (APA), and in order to facilitate the prompt implementation of the Safety for All Act of 2016, the California Department of Justice may adopt interim standards without compliance with the procedures set forth in the APA. The interim standards shall remain in effect for no more than two years, and may be earlier superseded by regulations adopted pursuant to the APA. “Interim standards” means temporary standards that perform the same function as “emergency regulations” under the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), except that in order to provide greater opportunity for public comment on permanent regulations, the interim standards may remain in force for two years rather than 180 days.
SEC. 13. Amending the Measure.
This Act shall be broadly construed to accomplish its purposes. The provisions of this measure may be amended by a vote of 55 percent of the members of each house of the Legislature and signed by the Governor so long as such amendments are consistent with and further the intent of this Act.
SEC. 14. Conflicting Measures.
(a) In the event that this measure and another measure on the same subject matter, including but not limited to the regulation of the sale or possession of firearms or ammunition, shall appear on the same statewide ballot, the provisions of the other measure or measures shall be deemed to be in conflict with this measure. In the event that this measure receives a greater number of affirmative votes than a measure deemed to be in conflict with it, the provisions of this measure shall prevail in their entirety, and the other measure or measures shall be null and void.
(b) If this measure is approved by voters but superseded by law by any other conflicting measure approved by voters at the same election, and the conflicting ballot measure is later held invalid, this measure shall be self-executing and given full force and effect.
SEC. 15. Severability.
If any provision of this measure, or part of this measure, or the application of any provision or part to any person or circumstance, is for any reason held to be invalid or unconstitutional, the remaining provisions, or applications of provisions, shall not be affected, but shall remain in full force and effect, and to this end the provisions of this measure are severable.
SEC. 16. Proponent Standing.
Notwithstanding any other provision of law, if the State, government agency, or any of its officials fail to defend the constitutionality of this Act, following its approval by the voters, any other government employer, the proponent, or in their absence, any citizen of this State shall have the authority to intervene in any court action challenging the constitutionality of this Act for the purpose of defending its constitutionality, whether such action is in trial court, on appeal, or on discretionary review by the Supreme Court
63
64
Text of Proposed Laws | 179
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
cultivation licenses for the first five years. The Adult Use of Marijuana Act also protects consumers and small businesses by imposing strict anti-monopoly restrictions for businesses that participate in the nonmedical marijuana industry.
SEC. 3. Purpose and Intent.
The purpose of the Adult Use of Marijuana Act is to establish a comprehensive system to legalize, control and regulate the cultivation, processing, manufacture, distribution, testing, and sale of nonmedical marijuana, including marijuana products, for use by adults 21 years and older, and to tax the commercial growth and retail sale of marijuana. It is the intent of the people in enacting this act to accomplish the following:
(a) Take nonmedical marijuana production and sales out of the hands of the illegal market and bring them under a regulatory structure that prevents access by minors and protects public safety, public health, and the environment.
(b) Strictly control the cultivation, processing, manufacture, distribution, testing and sale of nonmedical marijuana through a system of state licensing, regulation, and enforcement.
(c) Allow local governments to enforce state laws and regulations for nonmedical marijuana businesses and enact additional local requirements for nonmedical marijuana businesses, but not require that they do so for a nonmedical marijuana business to be issued a state license and be legal under state law.
(d) Allow local governments to ban nonmedical marijuana businesses as set forth in this act.
(e) Require track and trace management procedures to track nonmedical marijuana from cultivation to sale.
(f) Require nonmedical marijuana to be comprehensively tested by independent testing services for the presence of contaminants, including mold and pesticides, before it can be sold by licensed businesses.
(g) Require nonmedical marijuana sold by licensed businesses to be packaged in child-resistant containers and be labeled so that consumers are fully informed about potency and the effects of ingesting nonmedical marijuana.
(h) Require licensed nonmedical marijuana businesses to follow strict environmental and product safety standards as a condition of maintaining their license.
(i) Prohibit the sale of nonmedical marijuana by businesses that also sell alcohol or tobacco.
(j) Prohibit the marketing and advertising of nonmedical marijuana to persons younger than 21 years old or near schools or other places where children are present.
(k) Strengthen the state’s existing medical marijuana system by requiring patients to obtain by January 1, 2018, a new recommendation from their physician that meets the strict standards signed into law by the Governor in 2015, and by providing new privacy protections for patients who obtain medical marijuana identification cards as set forth in this act.
(l) Permit adults 21 years and older to use, possess, purchase and grow nonmedical marijuana within defined limits for use by adults 21 years and older as set forth in this act.
(m) Allow local governments to reasonably regulate the cultivation of nonmedical marijuana for personal use by adults 21 years and older through zoning and other local
under 21 years old, and provides new resources to educate youth against drug abuse and train local law enforcement to enforce the new law. It bars marijuana businesses from being located within 600 feet of schools and other areas where children congregate. It establishes mandatory and strict packaging and labeling requirements for marijuana and marijuana products. And it mandates that marijuana and marijuana products cannot be advertised or marketed towards children.
E. There are currently no laws governing adult use marijuana businesses to ensure that they operate in accordance with existing California laws. Adult use of marijuana may only be accessed from the unregulated illicit market. The Adult Use of Marijuana Act sets up a comprehensive system governing marijuana businesses at the state level and safeguards local control, allowing local governments to regulate marijuana-related activities, to subject marijuana businesses to zoning and permitting requirements, and to ban marijuana businesses by a vote of the people within a locality.
F. Currently, illegal marijuana growers steal or divert millions of gallons of water without any accountability. The Adult Use of Marijuana Act will create strict environmental regulations to ensure that the marijuana is grown efficiently and legally, to regulate the use of pesticides, to prevent wasting water, and to minimize water usage. The Adult Use of Marijuana Act will crack down on the illegal use of water and punish bad actors, while providing funds to restore lands that have been damaged by illegal marijuana grows. If a business does not demonstrate they are in full compliance with the applicable water usage and environmental laws, they will have their license revoked.
G. Currently, the courts are clogged with cases of non-violent drug offenses. By legalizing marijuana, the Adult Use of Marijuana Act will alleviate pressure on the courts, but continue to allow prosecutors to charge the most serious marijuana-related offenses as felonies, while reducing the penalties for minor marijuana-related offenses as set forth in the act.
H. By bringing marijuana into a regulated and legitimate market, the Adult Use of Marijuana Act creates a transparent and accountable system. This will help police crackdown on the underground black market that currently benefits violent drug cartels and transnational gangs, which are making billions from marijuana trafficking and jeopardizing public safety.
I. The Adult Use of Marijuana Act creates a comprehensive regulatory structure in which every marijuana business is overseen by a specialized agency with relevant expertise. The Bureau of Marijuana Control, housed in the Department of Consumer Affairs, will oversee the whole system and ensure a smooth transition to the legal market, with licenses issued beginning in 2018. The Department of Consumer Affairs will also license and oversee marijuana retailers, distributors, and microbusinesses. The Department of Food and Agriculture will license and oversee marijuana cultivation, ensuring it is environmentally safe. The State Department of Public Health will license and oversee manufacturing and testing, ensuring consumers receive a safe product. The State Board of Equalization will collect the special marijuana taxes, and the Controller will allocate the revenue to administer the new law and provide the funds to critical investments.
J. The Adult Use of Marijuana Act ensures the nonmedical marijuana industry in California will be built around small and medium sized businesses by prohibiting large-scale
64
180 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(b) The weight of any other ingredient combined with marijuana to prepare topical or oral administrations, food, drink, or other product.
SEC. 4.2. Section 11018.1 is added to the Health and Safety Code, to read:
11018.1. Marijuana Products.
“Marijuana products” means marijuana that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing marijuana or concentrated cannabis and other ingredients.
SEC. 4.3. Section 11018.2 is added to the Health and Safety Code, to read:
11018.2. Marijuana Accessories.
“Marijuana accessories” means any equipment, products or materials of any kind which are used, intended for use, or designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, smoking, vaporizing, or containing marijuana, or for ingesting, inhaling, or otherwise introducing marijuana or marijuana products into the human body.
SEC. 4.4. Section 11362.1 is added to the Health and Safety Code, to read:
11362.1. (a) Subject to Sections 11362.2, 11362.3, 11362.4, and 11362.45, but notwithstanding any other provision of law, it shall be lawful under state and local law, and shall not be a violation of state or local law, for persons 21 years of age or older to:
(1) Possess, process, transport, purchase, obtain, or give away to persons 21 years of age or older without any compensation whatsoever, not more than 28.5 grams of marijuana not in the form of concentrated cannabis;
(2) Possess, process, transport, purchase, obtain, or give away to persons 21 years of age or older without any compensation whatsoever, not more than eight grams of marijuana in the form of concentrated cannabis, including as contained in marijuana products;
(3) Possess, plant, cultivate, harvest, dry, or process not more than six living marijuana plants and possess the marijuana produced by the plants;
(4) Smoke or ingest marijuana or marijuana products; and
(5) Possess, transport, purchase, obtain, use, manufacture, or give away marijuana accessories to persons 21 years of age or older without any compensation whatsoever.
(b) Paragraph (5) of subdivision (a) is intended to meet the requirements of subsection (f) of Section 863 of Title 21 of the United States Code (21 U.S.C. Sec. 863(f)) by authorizing, under state law, any person in compliance with this section to manufacture, possess, or distribute marijuana accessories.
(c) Marijuana and marijuana products involved in any way with conduct deemed lawful by this section are not contraband nor subject to seizure, and no conduct deemed lawful by this section shall constitute the basis for detention, search, or arrest.
SEC. 4.5. Section 11362.2 is added to the Health and Safety Code, to read:
laws, and only to ban outdoor cultivation as set forth in this act.
(n) Deny access to marijuana by persons younger than 21 years old who are not medical marijuana patients.
(o) Prohibit the consumption of marijuana in a public place unlicensed for such use, including near K–12 schools and other areas where children are present.
(p) Maintain existing laws making it unlawful to operate a car or other vehicle used for transportation while impaired by marijuana.
(q) Prohibit the cultivation of marijuana on public lands or while trespassing on private lands.
(r) Allow public and private employers to enact and enforce workplace policies pertaining to marijuana.
(s) Tax the growth and sale of marijuana in a way that drives out the illicit market for marijuana and discourages use by minors, and abuse by adults.
(t) Generate hundreds of millions of dollars in new state revenue annually for restoring and repairing the environment, youth treatment and prevention, community investment, and law enforcement.
(u) Prevent illegal production or distribution of marijuana.
(v) Prevent the illegal diversion of marijuana from California to other states or countries or to the illegal market.
(w) Preserve scarce law enforcement resources to prevent and prosecute violent crime.
(x) Reduce barriers to entry into the legal, regulated market.
(y) Require minors who commit marijuana-related offenses to complete drug prevention education or counseling and community service.
(z) Authorize courts to resentence persons who are currently serving a sentence for offenses for which the penalty is reduced by the act, so long as the person does not pose a risk to public safety, and to redesignate or dismiss such offenses from the criminal records of persons who have completed their sentences as set forth in this act.
(aa) Allow industrial hemp to be grown as an agricultural product, and for agricultural or academic research, and regulated separately from the strains of cannabis with higher delta-9 tetrahydrocannabinol concentrations.
SEC. 4. Personal Use.
SEC. 4.1. Section 11018 of the Health and Safety Code is amended to read:
11018. Marijuana.
“Marijuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin. It 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:
(a) Industrial hemp, as defined in Section 11018.5; or
64
Text of Proposed Laws | 181
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(4) Possess an open container or open package of marijuana or marijuana products while driving, operating, or riding in the passenger seat or compartment of a motor vehicle, boat, vessel, aircraft, or other vehicle used for transportation.
(5) Possess, smoke or ingest marijuana or marijuana products in or upon the grounds of a school, day care center, or youth center while children are present.
(6) Manufacture concentrated cannabis using a volatile solvent, unless done in accordance with a license under Chapter 3.5 (commencing with Section 19300) of Division 8 of, or Division 10 of, the Business and Professions Code.
(7) Smoke or ingest marijuana or marijuana products while driving, operating a motor vehicle, boat, vessel, aircraft, or other vehicle used for transportation.
(8) Smoke or ingest marijuana or marijuana products while riding in the passenger seat or compartment of a motor vehicle, boat, vessel, aircraft, or other vehicle used for transportation except as permitted on a motor vehicle, boat, vessel, aircraft, or other vehicle used for transportation that is operated in accordance with Section 26200 of the Business and Professions Code and while no persons under the age of 21 years are present.
(b) For purposes of this section, “day care center” has the same meaning as in Section 1596.76.
(c) For purposes of this section, “smoke” means to inhale, exhale, burn, or carry any lighted or heated device or pipe, or any other lighted or heated marijuana or marijuana product intended for inhalation, whether natural or synthetic, in any manner or in any form. “Smoke” includes the use of an electronic smoking device that creates an aerosol or vapor, in any manner or in any form, or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking in a place.
(d) For purposes of this section, “volatile solvent” means volatile organic compounds, including: (1) explosive gases, such as Butane, Propane, Xylene, Styrene, Gasoline, Kerosene, 02 or H2; and (2) dangerous poisons, toxins, or carcinogens, such as Methanol, Iso-propyl Alcohol, Methylene Chloride, Acetone, Benzene, Toluene, and Tri-chloro-ethylene.
(e) For purposes of this section, “youth center” has the same meaning as in Section 11353.1.
(f) Nothing in this section shall be construed or interpreted to amend, repeal, affect, restrict, or preempt laws pertaining to the Compassionate Use Act of 1996.
SEC. 4.7. Section 11362.4 is added to the Health and Safety Code, to read:
11362.4. (a) A person who engages in the conduct described in paragraph (1) of subdivision (a) of Section 11362.3 is guilty of an infraction punishable by no more than a one hundred dollar ($100) fine; provided, however, that persons under the age of 18 shall instead be required to complete four hours of a drug education program or counseling, and up to 10 hours of community service, over a period not to exceed 60 days once the drug education program or counseling and community service opportunity are made available to the person.
(b) A person who engages in the conduct described in paragraphs (2) through (4) of subdivision (a) of Section 11362.3 shall be guilty of an infraction punishable by no more than a two-hundred-fifty-dollar ($250) fine,
11362.2. (a) Personal cultivation of marijuana under paragraph (3) of subdivision (a) of Section 11362.1 is subject to the following restrictions:
(1) A person shall plant, cultivate, harvest, dry, or process plants in accordance with local ordinances, if any, adopted in accordance with subdivision (b).
(2) The living plants and any marijuana produced by the plants in excess of 28.5 grams are kept within the person’s private residence, or upon the grounds of that private residence (e.g., in an outdoor garden area), are in a locked space, and are not visible by normal unaided vision from a public place.
(3) Not more than six living plants may be planted, cultivated, harvested, dried, or processed within a single private residence, or upon the grounds of that private residence, at one time.
(b) (1) A city, county, or city and county may enact and enforce reasonable regulations to reasonably regulate the actions and conduct in paragraph (3) of subdivision (a) of Section 11362.1.
(2) Notwithstanding paragraph (1), no city, county, or city and county may completely prohibit persons engaging in the actions and conduct under paragraph (3) of subdivision (a) of Section 11362.1 inside a private residence, or inside an accessory structure to a private residence located upon the grounds of a private residence that is fully enclosed and secure.
(3) Notwithstanding paragraph (3) of subdivision (a) of Section 11362.1, a city, county, or city and county may completely prohibit persons from engaging in actions and conduct under paragraph (3) of subdivision (a) of Section 11362.1 outdoors upon the grounds of a private residence.
(4) Paragraph (3) shall become inoperative upon a determination by the California Attorney General that nonmedical use of marijuana is lawful in the State of California under federal law, and an act taken by a city, county, or city and county under paragraph (3) shall be deemed repealed upon the date of such determination by the Attorney General.
(5) For purposes of this section, “private residence” means a house, an apartment unit, a mobile home, or other similar dwelling.
SEC. 4.6. Section 11362.3 is added to the Health and Safety Code, to read:
11362.3. (a) Nothing in Section 11362.1 shall be construed to permit any person to:
(1) Smoke or ingest marijuana or marijuana products in any public place, except in accordance with Section 26200 of the Business and Professions Code.
(2) Smoke marijuana or marijuana products in a location where smoking tobacco is prohibited.
(3) Smoke marijuana or marijuana products within 1,000 feet of a school, day care center, or youth center while children are present at such a school, day care center, or youth center, except in or upon the grounds of a private residence or in accordance with Section 26200 of, or Chapter 3.5 (commencing with Section 19300) of Division 8 of, the Business and Professions Code and only if such smoking is not detectable by others on the grounds of such a school, day care center, or youth center while children are present.
64
182 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(e) Laws providing that it would constitute negligence or professional malpractice to undertake any task while impaired from smoking or ingesting marijuana or marijuana products.
(f) The rights and obligations of public and private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of marijuana in the workplace, or affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law.
(g) The ability of a state or local government agency to prohibit or restrict any of the actions or conduct otherwise permitted under Section 11362.1 within a building owned, leased, or occupied by the state or local government agency.
(h) The ability of an individual or private entity to prohibit or restrict any of the actions or conduct otherwise permitted under Section 11362.1 on the individual’s or entity’s privately owned property.
(i) Laws pertaining to the Compassionate Use Act of 1996.
SEC. 5. Use of Marijuana for Medical Purposes.
SEC. 5.1. Section 11362.712 is added to the Health and Safety Code, to read:
11362.712. (a) Commencing on January 1, 2018, a qualified patient must possess a physician’s recommendation that complies with Article 25 (commencing with Section 2525) of Chapter 5 of Division 2 of the Business and Professions Code. Failure to comply with this requirement shall not, however, affect any of the protections provided to patients or their primary caregivers by Section 11362.5.
(b) A county health department or the county’s designee shall develop protocols to ensure that, commencing upon January 1, 2018, all identification cards issued pursuant to Section 11362.71 are supported by a physician’s recommendation that complies with Article 25 (commencing with Section 2525) of Chapter 5 of Division 2 of the Business and Professions Code.
SEC. 5.2. Section 11362.713 is added to the Health and Safety Code, to read:
11362.713. (a) Information identifying the names, addresses, or social security numbers of patients, their medical conditions, or the names of their primary caregivers, received and contained in the records of the State Department of Public Health and by any county public health department are hereby deemed “medical information” within the meaning of the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code) and shall not be disclosed by the department or by any county public health department except in accordance with the restrictions on disclosure of individually identifiable information under the Confidentiality of Medical Information Act.
(b) Within 24 hours of receiving any request to disclose the name, address, or social security number of a patient, their medical condition, or the name of their primary caregiver, the State Department of Public Health or any county public health agency shall contact the patient and inform the patient of the request and if the request was made in writing, a copy of the request.
unless such activity is otherwise permitted by state and local law; provided, however, that persons under the age of 18 shall instead be required to complete four hours of drug education or counseling, and up to 20 hours of community service, over a period not to exceed 90 days once the drug education program or counseling and community service opportunity are made available to the person.
(c) A person who engages in the conduct described in paragraph (5) of subdivision (a) of Section 11362.3 shall be subject to the same punishment as provided under subdivision (c) or (d) of Section 11357.
(d) A person who engages in the conduct described in paragraph (6) of subdivision (a) of Section 11362.3 shall be subject to punishment under Section 11379.6.
(e) A person who violates the restrictions in subdivision (a) of Section 11362.2 is guilty of an infraction punishable by no more than a two-hundred-fifty-dollar ($250) fine.
(f) Notwithstanding subdivision (e), a person under the age of 18 who violates the restrictions in subdivision (a) of Section 11362.2 shall be punished under subdivision (a) of Section 11358.
(g) (1) The drug education program or counseling hours required by this section shall be mandatory unless the court makes a finding that such a program or counseling is unnecessary for the person or that a drug education program or counseling is unavailable.
(2) The drug education program required by this section for persons under the age of 18 must be free to participants and provide at least four hours of group discussion or instruction based on science and evidence-based principles and practices specific to the use and abuse of marijuana and other controlled substances.
(h) Upon a finding of good cause, the court may extend the time for a person to complete the drug education or counseling, and community service required under this section.
SEC. 4.8. Section 11362.45 is added to the Health and Safety Code, to read:
11362.45. Nothing in Section 11362.1 shall be construed or interpreted to amend, repeal, affect, restrict, or preempt:
(a) Laws making it unlawful to drive or operate a vehicle, boat, vessel, or aircraft, while smoking, ingesting, or impaired by, marijuana or marijuana products, including, but not limited to, subdivision (e) of Section 23152 of the Vehicle Code, or the penalties prescribed for violating those laws.
(b) Laws prohibiting the sale, administering, furnishing, or giving away of marijuana, marijuana products, or marijuana accessories, or the offering to sell, administer, furnish, or give away marijuana, marijuana products, or marijuana accessories to a person younger than 21 years of age.
(c) Laws prohibiting a person younger than 21 years of age from engaging in any of the actions or conduct otherwise permitted under Section 11362.1.
(d) Laws pertaining to smoking or ingesting marijuana or marijuana products on the grounds of, or within, any facility or institution under the jurisdiction of the Department of Corrections and Rehabilitation or the Division of Juvenile Justice, or on the grounds of, or within, any other facility or institution referenced in Section 4573 of the Penal Code.
64
Text of Proposed Laws | 183
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
SEC. 5.5. Section 11362.85 is added to the Health and Safety Code, to read:
11362.85. Upon a determination by the California Attorney General that the federal schedule of controlled substances has been amended to reclassify or declassify marijuana, the Legislature may amend or repeal the provisions of the Health and Safety Code, as necessary, to conform state law to such changes in federal law.
SEC. 6. Marijuana Regulation and Safety.
SEC. 6.1. Division 10 (commencing with Section 26000) is added to the Business and Professions Code, to read:
DIVISION 10. MARIJUANA
Chapter 1. General provisions and definitions
26000. (a) The purpose and intent of this division is to establish a comprehensive system to control and regulate the cultivation, distribution, transport, storage, manufacturing, processing, and sale of nonmedical marijuana and marijuana products for adults 21 years of age and over.
(b) In the furtherance of subdivision (a), this division expands the power and duties of the existing state agencies responsible for controlling and regulating the medical cannabis industry under Chapter 3.5 (commencing with Section 19300) of Division 8 to include the power and duty to control and regulate the commercial nonmedical marijuana industry.
(c) The Legislature may, by majority vote, enact laws to implement this division, provided such laws are consistent with the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.
26001. For purposes of this division, the following definitions shall apply:
(a) “Applicant” means the following:
(1) The owner or owners of a proposed licensee. “Owner” means all persons having (A) an aggregate ownership interest (other than a security interest, lien, or encumbrance) of 20 percent or more in the licensee and (B) the power to direct or cause to be directed, the management or control of the licensee.
(2) If the applicant is a publicly traded company, “owner” includes the chief executive officer and any member of the board of directors and any person or entity with an aggregate ownership interest in the company of 20 percent or more. If the applicant is a nonprofit entity, “owner” means both the chief executive officer and any member of the board of directors.
(b) “Bureau” means the Bureau of Marijuana Control within the Department of Consumer Affairs.
(c) “Child resistant” means designed or constructed to be significantly difficult for children under five years of age to open, and not difficult for normal adults to use properly.
(d) “Commercial marijuana activity” includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, labeling, transportation, distribution, delivery or sale of marijuana and marijuana products as provided for in this division.
(e) “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of marijuana.
(c) Notwithstanding Section 56.10 of the Civil Code, neither the State Department of Public Health, nor any county public health agency, shall disclose, nor shall they be ordered by agency or court to disclose, the names, addresses, or social security numbers of patients, their medical conditions, or the names of their primary caregivers, sooner than the 10th day after which the patient whose records are sought to be disclosed has been contacted.
(d) No identification card application system or database used or maintained by the State Department of Public Health or by any county department of public health or the county’s designee as provided in Section 11362.71 shall contain any personal information of any qualified patient, including, but not limited to, the patient’s name, address, social security number, medical conditions, or the names of their primary caregivers. Such an application system or database may only contain a unique user identification number, and when that number is entered, the only information that may be provided is whether the card is valid or invalid.
SEC. 5.3. Section 11362.755 of the Health and Safety Code is amended to read:
11362.755. (a) The department shall establish application and renewal fees for persons seeking to obtain or renew identification cards that are sufficient to cover the expenses incurred by the department, including the startup cost, the cost of reduced fees for Medi-Cal beneficiaries in accordance with subdivision (b), the cost of identifying and developing a cost-effective Internet Web-based system, and the cost of maintaining the 24-hour toll-free telephone number. Each county health department or the county’s designee may charge an additional a fee for all costs incurred by the county or the county’s designee for administering the program pursuant to this article.
(b) In no event shall the amount of the fee charged by a county health department exceed one hundred dollars ($100) per application or renewal.
(b) (c) Upon satisfactory proof of participation and eligibility in the Medi-Cal program, a Medi-Cal beneficiary shall receive a 50 percent reduction in the fees established pursuant to this section.
(d) Upon satisfactory proof that a qualified patient, or the legal guardian of a qualified patient under the age of 18, is a medically indigent adult who is eligible for and participates in the County Medical Services Program, the fee established pursuant to this section shall be waived.
(e) In the event the fees charged and collected by a county health department are not sufficient to pay for the administrative costs incurred in discharging the county health department’s duties with respect to the mandatory identification card system, the Legislature, upon request by the county health department, shall reimburse the county health department for those reasonable administrative costs in excess of the fees charged and collected by the county health department.
SEC. 5.4. Section 11362.84 is added to the Health and Safety Code, to read:
11362.84. The status and conduct of a qualified patient who acts in accordance with the Compassionate Use Act shall not, by itself, be used to restrict or abridge custodial or parental rights to minor children in any action or proceeding under the jurisdiction of family or juvenile court.
64
184 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(w) “Operation” means any act for which licensure is required under the provisions of this division, or any commercial transfer of marijuana or marijuana products.
(x) “Package” means any container or receptacle used for holding marijuana or marijuana products.
(y) “Person” includes any individual, firm, copartnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
(z) “Purchaser” means the customer who is engaged in a transaction with a licensee for purposes of obtaining marijuana or marijuana products.
(aa) “Sell,” “sale,” and “to sell” include any transaction whereby, for any consideration, title to marijuana is transferred from one person to another, and includes the delivery of marijuana or marijuana products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of marijuana or marijuana products by a licensee to the licensee from whom such marijuana or marijuana product was purchased.
(bb) “Testing service” means a laboratory, facility, or entity in the state, that offers or performs tests of marijuana or marijuana products, including the equipment provided by such laboratory, facility, or entity, and that is both of the following:
(1) Accredited by an accrediting body that is independent from all other persons involved in commercial marijuana activity in the state.
(2) Registered with the State Department of Public Health.
(cc) “Unique identifier” means an alphanumeric code or designation used for reference to a specific plant on a licensed premises.
(dd) “Unreasonably impracticable” means that the measures necessary to comply with the regulations require such a high investment of risk, money, time, or any other resource or asset, that the operation of a marijuana establishment is not worthy of being carried out in practice by a reasonably prudent business person.
(ee) “Youth center” shall have the same meaning as in Section 11353.1 of the Health and Safety Code.
Chapter 2. administration
26010. (a) The Bureau of Medical Marijuana Regulation established in Section 19302 is hereby renamed the Bureau of Marijuana Control. The director shall administer and enforce the provisions of this division in addition to the provisions of Chapter 3.5 (commencing with Section 19300) of Division 8. The director shall have the same power and authority as provided by subdivisions (b) and (c) of Section 19302.1 for purposes of this division.
(b) The bureau and the director shall succeed to and are vested with all the duties, powers, purposes, responsibilities, and jurisdiction vested in the Bureau of Medical Marijuana Regulation under Chapter 3.5 (commencing with Section 19300) of Division 8.
(c) In addition to the powers, duties, purposes, responsibilities, and jurisdiction referenced in subdivision (b), the bureau shall heretofore have the power, duty, purpose, responsibility, and jurisdiction to regulate commercial marijuana activity as provided in this division.
(f) “Customer” means a natural person 21 years of age or over.
(g) “Day care center” shall have the same meaning as in Section 1596.76 of the Health and Safety Code.
(h) “Delivery” means the commercial transfer of marijuana or marijuana products to a customer. “Delivery” also includes the use by a retailer of any technology platform owned and controlled by the retailer, or independently licensed under this division, that enables customers to arrange for or facilitate the commercial transfer by a licensed retailer of marijuana or marijuana products.
(i) “Director” means the Director of the Department of Consumer Affairs.
(j) “Distribution” means the procurement, sale, and transport of marijuana and marijuana products between entities licensed pursuant to this division.
(k) “Fund” means the Marijuana Control Fund established pursuant to Section 26210.
(l) “Kind” means applicable type or designation regarding a particular marijuana variant or marijuana product type, including, but not limited to, strain name or other grower trademark, or growing area designation.
(m) “License” means a state license issued under this division.
(n) “Licensee” means any person or entity holding a license under this division.
(o) “Licensing authority” means the state agency responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the licensee.
(p) “Local jurisdiction” means a city, county, or city and county.
(q) “Manufacture” means to compound, blend, extract, infuse, or otherwise make or prepare a marijuana product.
(r) “Manufacturer” means a person that conducts the production, preparation, propagation, or compounding of marijuana or marijuana products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages marijuana or marijuana products or labels or re-labels its container, that holds a state license pursuant to this division.
(s) “Marijuana” has the same meaning as in Section 11018 of the Health and Safety Code, except that it does not include marijuana that is cultivated, processed, transported, distributed, or sold for medical purposes under Chapter 3.5 (commencing with Section 19300) of Division 8.
(t) “Marijuana accessories” has the same meaning as in Section 11018.2 of the Health and Safety Code.
(u) “Marijuana products” has the same meaning as in Section 11018.1 of the Health and Safety Code, except that it does not include marijuana products manufactured, processed, transported, distributed, or sold for medical purposes under Chapter 3.5 (commencing with Section 19300) of Division 8.
(v) “Nursery” means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of marijuana.
64
Text of Proposed Laws | 185
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare.
(c) Regulations issued under this division shall be necessary to achieve the purposes of this division, based on best available evidence, and shall mandate only commercially feasible procedures, technology, or other requirements, and shall not unreasonably restrain or inhibit the development of alternative procedures or technology to achieve the same substantive requirements, nor shall such regulations make compliance unreasonably impracticable.
26014. (a) The bureau shall convene an advisory committee to advise the bureau and licensing authorities on the development of standards and regulations pursuant to this division, including best practices and guidelines that protect public health and safety while ensuring a regulated environment for commercial marijuana activity that does not impose such unreasonably impracticable barriers so as to perpetuate, rather than reduce and eliminate, the illicit market for marijuana.
(b) The advisory committee members shall include, but not be limited to, representatives of the marijuana industry, representatives of labor organizations, appropriate state and local agencies, public health experts, and other subject matter experts, including representatives from the Department of Alcoholic Beverage Control, with expertise in regulating commercial activity for adult-use intoxicating substances. The advisory committee members shall be determined by the director.
(c) Commencing on January 1, 2019, the advisory committee shall publish an annual public report describing its activities including, but not limited to, the recommendations the advisory committee made to the bureau and licensing authorities during the immediately preceding calendar year and whether those recommendations were implemented by the bureau or licensing authorities.
26015. A licensing authority may make or cause to be made such investigation as it deems necessary to carry out its duties under this division.
26016. For any hearing held pursuant to this division, except a hearing held under Chapter 4 (commencing with Section 26040), a licensing authority may delegate the power to hear and decide to an administrative law judge. Any hearing before an administrative law judge shall be pursuant to the procedures, rules, and limitations prescribed in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
26017. In any hearing before a licensing authority pursuant to this division, the licensing authority may pay any person appearing as a witness at the hearing at the request of the licensing authority pursuant to a subpoena, his or her actual, necessary, and reasonable travel, food, and lodging expenses, not to exceed the amount authorized for state employees.
26018. A licensing authority may on its own motion at any time before a penalty assessment is placed into effect, and without any further proceedings, review the penalty, but such review shall be limited to its reduction.
(d) Upon the effective date of this section, whenever “Bureau of Medical Marijuana Regulation” appears in any statute, regulation, or contract, or in any other code, it shall be construed to refer to the bureau.
26011. Neither the chief of the bureau nor any member of the Marijuana Control Appeals Panel established under Section 26040 shall do any of the following:
(a) Receive any commission or profit whatsoever, directly or indirectly, from any person applying for or receiving any license or permit under this division or Chapter 3.5 (commencing with Section 19300) of Division 8.
(b) Engage or have any interest in the sale or any insurance covering a licensee’s business or premises.
(c) Engage or have any interest in the sale of equipment for use upon the premises of a licensee engaged in commercial marijuana activity.
(d) Knowingly solicit any licensee for the purchase of tickets for benefits or contributions for benefits.
(e) Knowingly request any licensee to donate or receive money, or any other thing of value, for the benefit of any person whatsoever.
26012. (a) It being a matter of statewide concern, except as otherwise authorized in this division:
(1) The Department of Consumer Affairs shall have the exclusive authority to create, issue, renew, discipline, suspend, or revoke licenses for the transportation, storage unrelated to manufacturing activities, distribution, and sale of marijuana within the state.
(2) The Department of Food and Agriculture shall administer the provisions of this division related to and associated with the cultivation of marijuana. The Department of Food and Agriculture shall have the authority to create, issue, and suspend or revoke cultivation licenses for violations of this division.
(3) The State Department of Public Health shall administer the provisions of this division related to and associated with the manufacturing and testing of marijuana. The State Department of Public Health shall have the authority to create, issue, and suspend or revoke manufacturing and testing licenses for violations of this division.
(b) The licensing authorities and the bureau shall have the authority to collect fees in connection with activities they regulate concerning marijuana. The bureau may create licenses in addition to those identified in this division that the bureau deems necessary to effectuate its duties under this division.
(c) Licensing authorities shall begin issuing licenses under this division by January 1, 2018.
26013. (a) Licensing authorities shall make and prescribe reasonable rules and regulations as may be necessary to implement, administer and enforce their respective duties under this division in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Such rules and regulations shall be consistent with the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.
(b) Licensing authorities may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer and enforce their respective duties under this division. Any emergency regulation prescribed, adopted or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing
64
186 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
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, allows his or her property to be used by a licensee, its employees, and its agents, as permitted pursuant to a state license and any 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.
26038. (a) A person engaging in commercial marijuana activity without a license required by this division shall be subject to civil penalties of up to three times the amount of the license fee for each violation, and the court may order the destruction of marijuana associated with that violation in accordance with Section 11479 of the Health and Safety Code. Each day of operation shall constitute a separate violation of this section. All civil penalties imposed and collected pursuant to this section by a licensing authority shall be deposited into the General Fund except as provided in subdivision (b).
(b) If an action for civil penalties is brought against a licensee pursuant to this division by the Attorney General on behalf of the people, the penalty collected shall be deposited into the General Fund. If the action is brought by a district attorney or county counsel, the penalty shall first be used to reimburse the district attorney or county counsel for the costs of bringing the action for civil penalties, with the remainder, if any, to be deposited into the General Fund. If the action is brought by a city attorney or city prosecutor, the penalty collected shall first be used to reimburse the city attorney or city prosecutor for the costs of bringing the action for civil penalties, with the remainder, if any, to be deposited into the General Fund.
(c) Notwithstanding subdivision (a), criminal penalties shall continue to apply to an unlicensed person engaging in commercial marijuana activity in violation of this division.
Chapter 4. appeals
26040. (a) There is established in state government a Marijuana Control Appeals Panel which shall consist of three members appointed by the Governor and subject to confirmation by a majority vote of all of the members elected to the Senate. Each member, at the time of his or her initial appointment, shall be a resident of a different county from the one in which either of the other members resides. Members of the panel shall receive an annual salary as provided for by Chapter 6 (commencing with Section 11550) of Part 1 of Division 3 of Title 2 of the Government Code.
(b) The members of the panel may be removed from office by the Governor, and the Legislature shall have the power, by a majority vote of all members elected to each house, to remove any member from office for dereliction of duty, corruption or incompetency.
(c) A concurrent resolution for the removal of any member of the panel may be introduced in the Legislature only if 5 Members of the Senate, or 10 Members of the Assembly, join as authors.
26041. All personnel of the panel shall be appointed, employed, directed, and controlled by the panel consistent with state civil service requirements. The director shall furnish the equipment, supplies, and housing necessary for the authorized activities of the panel and shall perform
Chapter 3. enforCement
26030. Grounds for disciplinary action include:
(a) Failure to comply with the provisions of this division or any rule or regulation adopted pursuant to this division.
(b) Conduct that constitutes grounds for denial of licensure pursuant to Chapter 3 (commencing with Section 490) of Division 1.5.
(c) Any other grounds contained in regulations adopted by a licensing authority pursuant to this division.
(d) Failure to comply with any state law including, but not limited to, the payment of taxes as required under the Revenue and Taxation Code, except as provided for in this division or other California law.
(e) Knowing violations of any state or local law, ordinance, or regulation conferring worker protections or legal rights on the employees of a licensee.
(f) Failure to comply with the requirement of a local ordinance regulating commercial marijuana activity.
(g) The intentional and knowing sale of marijuana or marijuana products by a licensee to a person under the legal age to purchase or possess.
26031. Each licensing authority may suspend or revoke licenses, after proper notice and hearing to the licensee, if the licensee is found to have committed any of the acts or omissions constituting grounds for disciplinary action. The disciplinary proceedings under this chapter shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the director of each licensing authority shall have all the powers granted therein.
26032. Each licensing authority may take disciplinary action against a licensee for any violation of this division when the violation was committed by the licensee’s agent or employee while acting on behalf of the licensee or engaged in commercial marijuana activity.
26033. Upon suspension or revocation of a license, the licensing authority shall inform the bureau. The bureau shall then inform all other licensing authorities.
26034. Accusations against licensees under this division shall be filed within the same time limits as specified in Section 19314 or as otherwise provided by law.
26035. The director shall designate the persons employed by the Department of Consumer Affairs for purposes of the administration and enforcement of this division. The director shall ensure that a sufficient number of employees are qualified peace officers for purposes of enforcing this division.
26036. Nothing in this division shall be interpreted to supersede or limit state agencies from exercising their existing enforcement authority, including, but not limited to, under the Fish and Game Code, the Food and Agricultural Code, the Government Code, the Health and Safety Code, the Public Resources Code, the Water Code, or the application of those laws.
26037. (a) The actions of a licensee, its employees, and its agents that are (1) permitted under a license issued under this division and any applicable local ordinances and (2) conducted in accordance with the requirements of this division and regulations adopted pursuant to this division, are not unlawful under state law and shall not be an offense subject to arrest, prosecution, or other sanction
64
Text of Proposed Laws | 187
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(8) Type 3A—Cultivation; Indoor; Medium.
(9) Type 3B—Cultivation; Mixed-light; Medium.
(10) Type 4—Cultivation; Nursery.
(11) Type 5—Cultivation; Outdoor; Large.
(12) Type 5A—Cultivation; Indoor; Large.
(13) Type 5B—Cultivation; Mixed-light; Large.
(14) Type 6—Manufacturer 1.
(15) Type 7—Manufacturer 2.
(16) Type 8—Testing.
(17) Type 10—Retailer.
(18) Type 11—Distributor.
(19) Type 12—Microbusiness.
(b) All licenses issued under this division shall bear a clear designation indicating that the license is for commercial marijuana activity as distinct from commercial medical cannabis activity licensed under Chapter 3.5 (commencing with Section 19300) of Division 8. Examples of such a designation include, but are not limited to, “Type 1—Nonmedical,” or “Type 1NM.”
(c) A license issued pursuant to this division shall be valid for 12 months from the date of issuance. The license may be renewed annually.
(d) Each licensing authority shall establish procedures for the issuance and renewal of licenses.
(e) Notwithstanding subdivision (c), a licensing authority may issue a temporary license for a period of less than 12 months. This subdivision shall cease to be operative on January 1, 2019.
26051. (a) In determining whether to grant, deny, or renew a license authorized under this division, a licensing authority shall consider factors reasonably related to the determination, including, but not limited to, whether it is reasonably foreseeable that issuance, denial, or renewal of the license could:
(1) Allow unreasonable restraints on competition by creation or maintenance of unlawful monopoly power;
(2) Perpetuate the presence of an illegal market for marijuana or marijuana products in the state or out of the state;
(3) Encourage underage use or adult abuse of marijuana or marijuana products, or illegal diversion of marijuana or marijuana products out of the state;
(4) Result in an excessive concentration of licensees in a given city, county, or both;
(5) Present an unreasonable risk of minors being exposed to marijuana or marijuana products; or
(6) Result in violations of any environmental protection laws.
(b) A licensing authority may deny a license or renewal of a license based upon the considerations in subdivision (a).
(c) For purposes of this section, “excessive concentration” means when the premises for a retail license, microbusiness license, or a license issued under Section 26070.5 is located in an area where either of the following conditions exist:
(1) The ratio of a licensee to population in the census tract or census division in which the applicant premises are located exceeds the ratio of licensees to population in
such other mechanics of administration as the panel and the director may agree upon.
26042. The panel shall adopt procedures for appeals similar to the procedures used in Article 3 (commencing with Section 23075) and Article 4 (commencing with Section 23080) of Chapter 1.5 of Division 9 of the Business and Professions Code. Such procedures shall be adopted in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
26043. (a) When any person aggrieved thereby appeals from a decision of the bureau or any licensing authority ordering any penalty assessment, issuing, denying, transferring, conditioning, suspending or revoking any license provided for under this division, the panel shall review the decision subject to such limitations as may be imposed by the Legislature. In such cases, the panel shall not receive evidence in addition to that considered by the bureau or the licensing authority.
(b) Review by the panel of a decision of the bureau or a licensing authority shall be limited to the following questions:
(1) Whether the bureau or any licensing authority has proceeded without or in excess of its jurisdiction.
(2) Whether the bureau or any licensing authority has proceeded in the manner required by law.
(3) Whether the decision is supported by the findings.
(4) Whether the findings are supported by substantial evidence in the light of the whole record.
26044. (a) In appeals where the panel finds that there is relevant evidence which, in the exercise of reasonable diligence, could not have been produced or which was improperly excluded at the hearing before the bureau or licensing authority, it may enter an order remanding the matter to the bureau or licensing authority for reconsideration in the light of such evidence.
(b) Except as provided in subdivision (a), in all appeals, the panel shall enter an order either affirming or reversing the decision of the bureau or licensing authority. When the order reverses the decision of the bureau or licensing authority, the board may direct the reconsideration of the matter in the light of its order and may direct the bureau or licensing authority to take such further action as is specially enjoined upon it by law, but the order shall not limit or control in any way the discretion vested by law in the bureau or licensing authority.
26045. Orders of the panel shall be subject to judicial review under Section 1094.5 of the Code of Civil Procedure upon petition by the bureau or licensing authority or any party aggrieved by such order.
Chapter 5. liCensinG
26050. (a) The license classification pursuant to this division shall, at a minimum, be as follows:
(1) Type 1—Cultivation; Specialty outdoor; Small.
(2) Type 1A—Cultivation; Specialty indoor; Small.
(3) Type 1B—Cultivation; Specialty mixed-light; Small.
(4) Type 2—Cultivation; Outdoor; Small.
(5) Type 2A—Cultivation; Indoor; Small.
(6) Type 2B—Cultivation; Mixed-light; Small.
(7) Type 3—Cultivation; Outdoor; Medium.
64
188 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(c) Except as provided in subdivision (b), a person or entity may apply for and be issued more than one license under this division.
26054. (a) A licensee shall not also be licensed as a retailer of alcoholic beverages under Division 9 (commencing with Section 23000) or of tobacco products.
(b) No licensee under this division shall be located within a 600-foot radius of a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center that is in existence at the time the license is issued, unless a licensing authority or a local jurisdiction specifies a different radius. The distance specified in this section shall be measured in the same manner as provided in subdivision (c) of Section 11362.768 of the Health and Safety Code unless otherwise provided by law.
(c) It shall be lawful under state and local law, and shall not be a violation of state or local law, for a business engaged in the manufacture of marijuana accessories to possess, transport, purchase or otherwise obtain small amounts of marijuana or marijuana products as necessary to conduct research and development related to such marijuana accessories, provided such marijuana and marijuana products are obtained from a person or entity licensed under this division or Chapter 3.5 (commencing with Section 19300) of Division 8 permitted to provide or deliver such marijuana or marijuana products.
26054.1. (a) No licensing authority shall issue or renew a license to any person that cannot demonstrate continuous California residency from or before January 1, 2015. In the case of an applicant or licensee that is an entity, the entity shall not be considered a resident if any person controlling the entity cannot demonstrate continuous California residency from and before January 1, 2015.
(b) Subdivision (a) shall cease to be operative on December 31, 2019, unless reenacted prior thereto by the Legislature.
26054.2. (a) A licensing authority shall give priority in issuing licenses under this division to applicants that can demonstrate to the authority’s satisfaction that the applicant operated in compliance with the Compassionate Use Act and its implementing laws before September 1, 2016, or currently operates in compliance with Chapter 3.5 (commencing with Section 19300) of Division 8.
(b) The bureau shall request that local jurisdictions identify for the bureau potential applicants for licensure based on the applicants’ prior operation in the local jurisdiction in compliance with state law, including the Compassionate Use Act and its implementing laws, and any applicable local laws. The bureau shall make the requested information available to licensing authorities.
(c) In addition to or in lieu of the information described in subdivision (b), an applicant may furnish other evidence to demonstrate operation in compliance with the Compassionate Use Act or Chapter 3.5 (commencing with Section 19300) of Division 8. The bureau and licensing authorities may accept such evidence to demonstrate eligibility for the priority provided for in subdivision (a).
(d) This section shall cease to be operative on December 31, 2019, unless otherwise provided by law.
26055. (a) Licensing authorities may issue state licenses only to qualified applicants.
(b) Revocation of a state license issued under this division shall terminate the ability of the licensee to operate within
the county in which the applicant premises are located, unless denial of the application would unduly limit the development of the legal market so as to perpetuate the illegal market for marijuana or marijuana products.
(2) The ratio of retail licenses, microbusiness licenses, or licenses under Section 26070.5 to population in the census tract, division or jurisdiction exceeds that allowable by local ordinance adopted under Section 26200.
26052. (a) No licensee shall perform any of the following acts, or permit any such acts to be performed by any employee, agent, or contractor of such licensee:
(1) Make any contract in restraint of trade in violation of Section 16600;
(2) Form a trust or other prohibited organization in restraint of trade in violation of Section 16720;
(3) Make a sale or contract for the sale of marijuana or marijuana products, or to fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement or understanding that the consumer or purchaser thereof shall not use or deal in the goods, merchandise, machinery, supplies, commodities, or services of a competitor or competitors of such seller, where the effect of such sale, contract, condition, agreement or understanding may be to substantially lessen competition or tend to create a monopoly in any line of trade or commerce;
(4) Sell any marijuana or marijuana products at less than cost for the purpose of injuring competitors, destroying competition, or misleading or deceiving purchasers or prospective purchasers;
(5) Discriminate between different sections, communities, or cities or portions thereof, or between different locations in such sections, communities, cities or portions thereof in this state, by selling or furnishing marijuana or marijuana products at a lower price in one section, community, or city or any portion thereof, or in one location in such section, community, or city or any portion thereof, than in another, for the purpose of injuring competitors or destroying competition; or
(6) Sell any marijuana or marijuana products at less than the cost thereof to such vendor, or to give away any article or product for the purpose of injuring competitors or destroying competition.
(b) Any person who, either as director, officer or agent of any firm or corporation, or as agent of any person, violates the provisions of this chapter, assists or aids, directly or indirectly, in such violation is responsible therefor equally with the person, firm or corporation for which such person acts.
(c) A licensing authority may enforce this section by appropriate regulation.
(d) Any person or trade association may bring an action to enjoin and restrain any violation of this section for the recovery of damages.
26053. (a) The bureau and licensing authorities may issue licenses under this division to persons or entities that hold licenses under Chapter 3.5 (commencing with Section 19300) of Division 8.
(b) Notwithstanding subdivision (a), a person or entity that holds a state testing license under this division or Chapter 3.5 (commencing with Section 19300) of Division 8 is prohibited from licensure for any other activity, except testing, as authorized under this division.
64
Text of Proposed Laws | 189
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
individual square footage of separate cultivation areas, if any.
26056.5. The bureau shall devise protocols that each licensing authority shall implement to ensure compliance with state laws and regulations related to environmental impacts, natural resource protection, water quality, water supply, hazardous materials, and pesticide use in accordance with regulations, including but not limited to, the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code), the California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of Division 3 of the Fish and Game Code), lake or streambed alteration agreements (Chapter 6 (commencing with Section 1600) of Division 2 of the Fish and Game Code), the Clean Water Act (33 U.S.C. Sec. 1251 et seq.), the Porter-Cologne Water Quality Control Act (Division 7 (commencing with Section 13000) of the Water Code), timber production zones, wastewater discharge requirements, and any permit or right necessary to divert water.
26057. (a) The 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 division.
(b) The licensing authority may deny the application for licensure or renewal of a state license if any of the following conditions apply:
(1) Failure to comply with the provisions of this division, any rule or regulation adopted pursuant to this division, or any requirement imposed to protect natural resources, including, but not limited to, protections for instream flow and water quality.
(2) Conduct that constitutes grounds for denial of licensure under Chapter 2 (commencing with Section 480) of Division 1.5, except as otherwise specified in this section and Section 26059.
(3) Failure to provide information required by the licensing authority.
(4) The applicant or licensee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, except that if the licensing authority determines that the applicant or licensee is otherwise suitable to be issued a license, and granting the license would not compromise public safety, the licensing authority shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the applicant, and shall evaluate the 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 violent felony conviction, as specified in subdivision (c) of Section 667.5 of the Penal Code.
(B) A serious felony conviction, as specified in subdivision (c) of Section 1192.7 of the Penal Code.
(C) A felony conviction involving fraud, deceit, or embezzlement.
(D) A felony conviction for hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to
California until the licensing authority reinstates or reissues the state license.
(c) Separate licenses shall be issued for each of the premises of any licensee having more than one location, except as otherwise authorized by law or regulation.
(d) After issuance or transfer of a license, no licensee shall change or alter the premises in a manner which materially or substantially alters the premises, the usage of the premises, or the mode or character of business operation conducted from the premises, from the plan contained in the diagram on file with the application, unless and until prior written assent of the licensing authority or bureau has been obtained. For purposes of this section, material or substantial physical changes of the premises, or in the usage of the premises, shall include, but not be limited to, a substantial increase or decrease in the total area of the licensed premises previously diagrammed, or any other physical modification resulting in substantial change in the mode or character of business operation.
(e) Licensing authorities shall not approve an application for a state license under this division if approval of the state license will violate the provisions of any local ordinance or regulation adopted in accordance with Section 26200.
26056. An applicant for any type of state license issued pursuant to this division shall comply with the same requirements as set forth in Section 19322 unless otherwise provided by law, including electronic submission of fingerprint images, and any other requirements imposed by law or a licensing authority, except as follows:
(a) Notwithstanding paragraph (2) of subdivision (a) of Section 19322, an applicant need not provide documentation that the applicant has obtained a license, permit or other authorization to operate from the local jurisdiction in which the applicant seeks to operate;
(b) An application for a license under this division shall include evidence that the proposed location meets the restriction in subdivision (b) of Section 26054; and
(c) For applicants seeking licensure to cultivate, distribute, or manufacture nonmedical marijuana or marijuana products, the application shall also include a detailed description of the applicant’s operating procedures for all of the following, as required by the licensing authority:
(1) Cultivation.
(2) Extraction and infusion methods.
(3) The transportation process.
(4) The inventory process.
(5) Quality control procedures.
(6) The source or sources of water the applicant will use for the licensed activities, including a certification that the applicant may use that water legally under state law.
(d) The applicant shall provide a complete detailed diagram of the proposed premises wherein the license privileges will be exercised, with sufficient particularity to enable ready determination of the bounds of the premises, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, and common or shared entryways, and include a brief statement or description of the principal activity to be conducted therein, and, for licenses permitting cultivation, measurements of the planned canopy including aggregate square footage and
64
190 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
Board to ensure that individual and cumulative effects of water diversion and discharge associated with cultivation do not affect the instream flows needed for fish spawning, migration, and rearing, and the flows needed to maintain natural flow variability, and to otherwise protect fish, wildlife, fish and wildlife habitat, and water quality.
(d) The regulations promulgated by the Department of Food and Agriculture under this division shall, at a minimum, address in relation to commercial marijuana activity, the same matters described in subdivision (e) of Section 19332.
(e) The Department of Pesticide Regulation, in consultation with the State Water Resources Control Board, shall promulgate regulations that require that the application of pesticides or other pest control in connection with the indoor, outdoor, or mixed light cultivation of marijuana meets standards equivalent to Division 6 (commencing with Section 11401) of the Food and Agricultural Code and its implementing regulations.
26061. (a) The state cultivator license types to be issued by the Department of Food and Agriculture under this division shall include Type 1, Type 1A, Type 1B, Type 2, Type 2A, Type 2B, Type 3, Type 3A, Type 3B, Type 4, and Type 5, Type 5A, and Type 5B unless otherwise provided by law.
(b) Except as otherwise provided by law, Type 1, Type 1A, Type 1B, Type 2, Type 2A, Type 2B, Type 3, Type 3A, Type 3B and Type 4 licenses shall provide for the cultivation of marijuana in the same amount as the equivalent license type for cultivation of medical cannabis as specified in subdivision (g) of Section 19332.
(c) Except as otherwise provided by law:
(1) Type 5, or “outdoor,” means for outdoor cultivation using no artificial lighting greater than one acre, inclusive, of total canopy size on one premises.
(2) Type 5A, or “indoor,” means for indoor cultivation using exclusively artificial lighting greater than 22,000 square feet, inclusive, of total canopy size on one premises.
(3) Type 5B, or “mixed-light,” means for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, greater than 22,000 square feet, inclusive, of total canopy size on one premises.
(d) No Type 5, Type 5A, or Type 5B cultivation licenses may be issued before January 1, 2023.
(e) Commencing on January 1, 2023, a Type 5, Type 5A, or Type 5B licensee may apply for and hold a Type 6 or Type 7 license and apply for and hold a Type 10 license. A Type 5, Type 5A, or Type 5B licensee shall not be eligible to apply for or hold a Type 8, Type 11, or Type 12 license.
26062. The Department of Food and Agriculture, in conjunction with the bureau, shall establish a certified organic designation and organic certification program for marijuana and marijuana products in the same manner as provided in Section 19332.5.
26063. (a) The bureau shall establish standards for recognition of a particular appellation of origin applicable to marijuana grown or cultivated in a certain geographical area in California.
(b) Marijuana shall not be marketed, labeled, or sold as grown in a California county when the marijuana was not grown in that county.
furnish, administering, or giving any controlled substance to a minor.
(E) A felony conviction for drug trafficking with enhancements pursuant to Section 11370.4 or 11379.8.
(5) Except as provided in subparagraphs (D) and (E) of paragraph (4) and notwithstanding Chapter 2 (commencing with Section 480) of Division 1.5, a prior conviction, where the sentence, including any term of probation, incarceration, or supervised release, is completed, for possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance is not considered substantially related, and shall not be the sole ground for denial of a license. Conviction for any controlled substance felony subsequent to licensure shall be grounds for revocation of a license or denial of the renewal of a license.
(6) The applicant, or any of its officers, directors, or owners, has been subject to fines or penalties for cultivation or production of a controlled substance on public or private lands pursuant to Section 12025 or 12025.1 of the Fish and Game Code.
(7) The applicant, or any of its officers, directors, or owners, has been sanctioned by a licensing authority or a city, county, or city and county for unauthorized commercial marijuana activities or commercial medical cannabis activities, has had a license revoked under this division or Chapter 3.5 (commencing with Section 19300) of Division 8 in the three years immediately preceding the date the application is filed with the licensing authority, or has been sanctioned under Section 12025 or 12025.1 of the Fish and Game Code.
(8) Failure to obtain and maintain a valid seller’s permit required pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.
(9) Any other condition specified in law.
26058. Upon the denial of any application for a license, the licensing authority shall notify the applicant in writing.
26059. An applicant shall not be denied a state license if the denial is based solely on any of the following:
(a) A conviction or act that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made for which the applicant or licensee has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code.
(b) A conviction that was subsequently dismissed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the Penal Code or any other provision allowing for dismissal of a conviction.
Chapter 6. liCensed Cultivation sites
26060. (a) Regulations issued by the Department of Food and Agriculture governing the licensing of indoor, outdoor, and mixed-light cultivation sites shall apply to licensed cultivators under this division.
(b) Standards developed by the Department of Pesticide Regulation, in consultation with the Department of Food and Agriculture, for the use of pesticides in cultivation, and maximum tolerances for pesticides and other foreign object residue in harvested cannabis shall apply to licensed cultivators under this division.
(c) The Department of Food and Agriculture shall include conditions in each license requested by the Department of Fish and Wildlife and the State Water Resources Control
64
Text of Proposed Laws | 191
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(B) Information associated with the assigned unique identifier and licensee shall be included in the trace and track program specified in Section 26170.
(C) The department may charge a fee to cover the reasonable costs of issuing the unique identifier and monitoring, tracking, and inspecting each marijuana plant.
(D) The department may promulgate regulations to implement this section.
(3) The department shall take adequate steps to establish protections against fraudulent unique identifiers and limit illegal diversion of unique identifiers to unlicensed persons.
(d) Unique identifiers and associated identifying information administered by local jurisdictions shall adhere to the requirements set by the department and be the equivalent to those administered by the department.
(e) (1) This section does not apply to the cultivation of marijuana in accordance with Section 11362.1 of the Health and Safety Code or the Compassionate Use Act.
(2) Subdivision (b) does not apply to persons or entities licensed under either paragraph (3) of subdivision (a) of Section 26070 or subdivision (b) of Section 26070.5.
(f) “Department” for purposes of this section means the Department of Food and Agriculture.
Chapter 7. retailers and distributors
26070. Retailers and Distributors.
(a) State licenses to be issued by the Department of Consumer Affairs are as follows:
(1) “Retailer,” for the retail sale and delivery of marijuana or marijuana products to customers.
(2) “Distributor,” for the distribution of marijuana and marijuana products. A distributor licensee shall be bonded and insured at a minimum level established by the licensing authority.
(3) “Microbusiness,” for the cultivation of marijuana on an area less than 10,000 square feet and to act as a licensed distributor, Level 1 manufacturer, and retailer under this division, provided such licensee complies with all requirements imposed by this division on licensed cultivators, distributors, Level 1 manufacturers, and retailers to the extent the licensee engages in such activities. Microbusiness licenses that authorize cultivation of marijuana shall include conditions requested by the Department of Fish and Wildlife and the State Water Resources Control Board to ensure that individual and cumulative effects of water diversion and discharge associated with cultivation do not affect the instream flows needed for fish spawning, migration, and rearing, and the flow needed to maintain flow variability, and otherwise protect fish, wildlife, fish and wildlife habitat, and water quality.
(b) The bureau shall establish minimum security and transportation safety requirements for the commercial distribution and delivery of marijuana and marijuana products. The transportation safety standards established by the bureau shall include, but not be limited to, minimum standards governing the types of vehicles in which marijuana and marijuana products may be distributed and delivered and minimum qualifications for persons eligible to operate such vehicles.
(c) Licensed retailers and microbusinesses, and licensed nonprofits under Section 26070.5, shall implement security measures reasonably designed to prevent
(c) The name of a California county shall not be used in the labeling, marketing, or packaging of marijuana products unless the marijuana contained in the product was grown in that county.
26064. Each licensed cultivator shall ensure that the licensed premises do not pose an unreasonable risk of fire or combustion. Each cultivator shall ensure that all lighting, wiring, electrical and mechanical devices, or other relevant property is carefully maintained to avoid unreasonable or dangerous risk to the property or others.
26065. An employee engaged in the cultivation of marijuana under this division shall be subject to Wage Order No. 4-2001 of the Industrial Welfare Commission.
26066. Indoor and outdoor marijuana cultivation by persons and entities licensed under this division shall be conducted in accordance with state and local laws related to land conversion, grading, electricity usage, water usage, water quality, woodland and riparian habitat protection, agricultural discharges, and similar matters. State agencies, including, but not limited to, the State Board of Forestry and Fire Protection, the Department of Fish and Wildlife, the State Water Resources Control Board, the California regional water quality control boards, and traditional state law enforcement agencies, shall address environmental impacts of marijuana cultivation and shall coordinate when appropriate with cities and counties and their law enforcement agencies in enforcement efforts.
26067. (a) The Department of Food and Agriculture shall establish a Marijuana Cultivation Program to be administered by the Secretary of Food and Agriculture. The secretary shall administer this section as it pertains to the cultivation of marijuana. For purposes of this division, marijuana is an agricultural product.
(b) A person or entity shall not cultivate marijuana without first obtaining a state license issued by the department pursuant to this section.
(c) (1) The department, in consultation with, but not limited to, the bureau, the State Water Resources Control Board, and the Department of Fish and Wildlife, shall implement a unique identification program for marijuana. In implementing the program, the department shall consider issues including, but not limited to, water use and environmental impacts. In implementing the program, the department shall ensure that:
(A) Individual and cumulative effects of water diversion and discharge associated with cultivation do not affect the instream flows needed for fish spawning, migration, and rearing, and the flows needed to maintain natural flow variability. If a watershed cannot support additional cultivation, no new plant identifiers will be issued for that watershed.
(B) Cultivation will not negatively impact springs, riparian wetlands and aquatic habitats.
(2) The department shall establish a program for the identification of permitted marijuana plants at a cultivation site during the cultivation period. A unique identifier shall be issued for each marijuana plant. The department shall ensure that unique identifiers are issued as quickly as possible to ensure the implementation of this division. The unique identifier shall be attached at the base of each plant or as otherwise required by law or regulation.
(A) Unique identifiers will only be issued to those persons appropriately licensed by this section.
64
192 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
division is not feasible, or if the bureau determines such licenses are feasible, after the date a licensing agency commences issuing state nonprofit licenses.
(2) If the bureau determines such licenses are feasible, no temporary license issued under subdivision (b) shall be renewed or extended after the date on which a licensing agency commences issuing state nonprofit licenses.
(3) If the bureau determines that creation of nonprofit licenses under this division is not feasible, the bureau shall provide notice of this determination to all local jurisdictions that have issued temporary licenses under subdivision (b). The bureau may, in its discretion, permit any such local jurisdiction to renew or extend on an annual basis any temporary license previously issued under subdivision (b).
Chapter 8. distribution and transport
26080. (a) This division shall not be construed to authorize or permit a licensee to transport or distribute, or cause to be transported or distributed, marijuana or marijuana products outside the state, unless authorized by federal law.
(b) A local jurisdiction shall not prevent transportation of marijuana or marijuana products on public roads by a licensee transporting marijuana or marijuana products in compliance with this division.
Chapter 9. delivery
26090. (a) Deliveries, as defined in this division, may only be made by a licensed retailer or microbusiness, or a licensed nonprofit under Section 26070.5.
(b) A customer requesting delivery shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers.
(c) A local jurisdiction shall not prevent delivery of marijuana or marijuana products on public roads by a licensee acting in compliance with this division and local law as adopted under Section 26200.
Chapter 10. manufaCturers and testinG laboratories
26100. The State Department of Public Health shall promulgate regulations governing the licensing of marijuana manufacturers and testing laboratories. Licenses to be issued are as follows:
(a) “Manufacturing Level 1,” for sites that manufacture marijuana products using nonvolatile solvents, or no solvents.
(b) “Manufacturing Level 2,” for sites that manufacture marijuana products using volatile solvents.
(c) “Testing,” for testing of marijuana and marijuana products. Testing licensees shall have their facilities or devices licensed according to regulations set forth by the department. A testing licensee shall not hold a license in another license category of this division and shall not own or have ownership interest in a non-testing facility licensed pursuant to this division.
(d) For purposes of this section, “volatile solvents” shall have the same meaning as in subdivision (d) of Section 11362.3 of the Health and Safety Code unless otherwise provided by law or regulation.
26101. (a) Except as otherwise provided by law, no marijuana or marijuana products may be sold pursuant to a license provided for under this division unless a representative sample of such marijuana or marijuana
unauthorized entrance into areas containing marijuana or marijuana products and theft of marijuana or marijuana products from the premises. These security measures shall include, but not be limited to, all of the following:
(1) Prohibiting individuals from remaining on the licensee’s premises if they are not engaging in activity expressly related to the operations of the dispensary.
(2) Establishing limited access areas accessible only to authorized personnel.
(3) Other than limited amounts of marijuana used for display purposes, samples, or immediate sale, storing all finished marijuana and marijuana products in a secured and locked room, safe, or vault, and in a manner reasonably designed to prevent diversion, theft, and loss.
26070.5. (a) The bureau shall, by January 1, 2018, investigate the feasibility of creating one or more classifications of nonprofit licenses under this section. The feasibility determination shall be made in consultation with the relevant licensing agencies and representatives of local jurisdictions which issue temporary licenses pursuant to subdivision (b). The bureau shall consider factors including, but not limited to, the following:
(1) Should nonprofit licensees be exempted from any or all state taxes, licensing fees and regulatory provisions applicable to other licenses in this division?
(2) Should funding incentives be created to encourage others licensed under this division to provide professional services at reduced or no cost to nonprofit licensees?
(3) Should nonprofit licenses be limited to, or prioritize those, entities previously operating on a not-for-profit basis primarily providing whole-plant marijuana and marijuana products and a diversity of marijuana strains and seed stock to low-income persons?
(b) Any local jurisdiction may issue temporary local licenses to nonprofit entities primarily providing whole-plant marijuana and marijuana products and a diversity of marijuana strains and seed stock to low-income persons so long as the local jurisdiction:
(1) Confirms the license applicant’s status as a nonprofit entity registered with the California Attorney General’s Registry of Charitable Trusts and that the applicant is in good standing with all state requirements governing nonprofit entities;
(2) Licenses and regulates any such entity to protect public health and safety, and so as to require compliance with all environmental requirements in this division;
(3) Provides notice to the bureau of any such local licenses issued, including the name and location of any such licensed entity and all local regulations governing the licensed entity’s operation, and;
(4) Certifies to the bureau that any such licensed entity will not generate annual gross revenues in excess of two million dollars ($2,000,000).
(c) Temporary local licenses authorized under subdivision (b) shall expire after 12 months unless renewed by the local jurisdiction.
(d) The bureau may impose reasonable additional requirements on the local licenses authorized under subdivision (b).
(e) (1) No new temporary local licenses shall be issued pursuant to this section after the date the bureau determines that creation of nonprofit licenses under this
64
Text of Proposed Laws | 193
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(b) The State Department of Public Health shall develop procedures to:
(1) Ensure that testing of marijuana and marijuana products occurs prior to distribution to retailers, microbusinesses, or nonprofits licensed under Section 26070.5;
(2) Specify how often licensees shall test marijuana and marijuana products, and that the cost of testing marijuana shall be borne by the licensed cultivators and the cost of testing marijuana products shall be borne by the licensed manufacturer, and that the costs of testing marijuana and marijuana products shall be borne by a nonprofit licensed under Section 26070.5; and
(3) Require destruction of harvested batches whose testing samples indicate noncompliance with health and safety standards promulgated by the State Department of Public Health, unless remedial measures can bring the marijuana or marijuana products into compliance with quality assurance standards as promulgated by the State Department of Public Health.
26105. Manufacturing Level 2 licensees shall enact sufficient methods or procedures to capture or otherwise limit risk of explosion, combustion, or any other unreasonably dangerous risk to public safety created by volatile solvents. The State Department of Public Health shall establish minimum standards concerning such methods and procedures for Level 2 licensees.
26106. Standards for the production and labeling of all marijuana products developed by the State Department of Public Health shall apply to licensed manufacturers and microbusinesses, and nonprofits licensed under Section 26070.5 unless otherwise specified by the State Department of Public Health.
Chapter 11. Quality assuranCe, inspeCtion, and testinG
26110. (a) All marijuana and marijuana products shall be subject to quality assurance, inspection, and testing.
(b) All marijuana and marijuana products shall undergo quality assurance, inspection, and testing in the same manner as provided in Section 19326, except as otherwise provided in this division or by law.
Chapter 12. paCKaGinG and labelinG
26120. (a) Prior to delivery or sale at a retailer, marijuana and marijuana products shall be labeled and placed in a resealable, child resistant package.
(b) Packages and labels shall not be made to be attractive to children.
(c) All marijuana and marijuana product labels and inserts shall include the following information prominently displayed in a clear and legible fashion in accordance with the requirements, including font size, prescribed by the bureau or the State Department of Public Health:
(1) Manufacture date and source.
(2) The following statements, in bold print:
(A) For marijuana: “GOVERNMENT WARNING: THIS PACKAGE CONTAINS MARIJUANA, A SCHEDULE I CONTROLLED SUBSTANCE. KEEP OUT OF REACH OF CHILDREN AND ANIMALS. MARIJUANA MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. MARIJUANA USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF MARIJUANA IMPAIRS YOUR ABILITY
product has been tested by a certified testing service to determine:
(1) Whether the chemical profile of the sample conforms to the labeled content of compounds, including, but not limited to, all of the following:
(A) Tetrahydrocannabinol (THC).
(B) Tetrahydrocannabinolic Acid (THCA).
(C) Cannabidiol (CBD).
(D) Cannabidiolic Acid (CBDA).
(E) The terpenes described in the most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia.
(F) Cannabigerol (CBG).
(G) Cannabinol (CBN).
(2) That the presence of contaminants does not exceed the levels in the most current version of the American Herbal Pharmacopoeia monograph. For purposes of this paragraph, contaminants includes, but is not limited to, all of the following:
(A) Residual solvent or processing chemicals, including explosive gases, such as Butane, propane, 02 or H2, and poisons, toxins, or carcinogens, such as Methanol, Iso-propyl Alcohol, Methylene Chloride, Acetone, Benzene, Toluene, and Tri-chloro-ethylene.
(B) Foreign material, including, but not limited to, hair, insects, or similar or related adulterant.
(C) Microbiological impurity, including total aerobic microbial count, total yeast mold count, P. aeruginosa, aspergillus spp., s. aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A.
(b) Residual levels of volatile organic compounds shall satisfy standards of the cannabis inflorescence monograph set by the United States Pharmacopeia (U.S.P. Chapter 467).
(c) The testing required by paragraph (a) shall be performed in a manner consistent with general requirements for the competence of testing and calibrations activities, including sampling, using standard methods established by the International Organization for Standardization, specifically ISO/IEC 17020 and ISO/IEC 17025 to test marijuana and marijuana products that are approved by an accrediting body that is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Agreement.
(d) Any pre-sale inspection, testing transfer, or transportation of marijuana products pursuant to this section shall conform to a specified chain of custody protocol and any other requirements imposed under this division.
26102. A licensed testing service shall not handle, test, or analyze marijuana or marijuana products unless the licensed testing laboratory meets the requirements of Section 19343 or unless otherwise provided by law.
26103. A licensed testing service shall issue a certificate of analysis for each lot, with supporting data, to report the same information required in Section 19344 or unless otherwise provided by law.
26104. (a) A licensed testing service shall, in performing activities concerning marijuana and marijuana products, comply with the requirements and restrictions set forth in applicable law and regulations.
64
194 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(4) Homogenized to ensure uniform disbursement of cannabinoids throughout the product.
(5) Manufactured and sold under sanitation standards established by the State Department of Public Health, in consultation with the bureau, for preparation, storage, handling and sale of food products.
(6) Provided to customers with sufficient information to enable the informed consumption of such product, including the potential effects of the marijuana product and directions as to how to consume the marijuana product, as necessary.
(b) Marijuana, including concentrated cannabis, included in a marijuana product manufactured in compliance with law is not considered an adulterant under state law.
Chapter 14. proteCtion of minors
26140. (a) No licensee shall:
(1) Sell marijuana or marijuana products to persons under 21 years of age.
(2) Allow any person under 21 years of age on its premises.
(3) Employ or retain persons under 21 years of age.
(4) Sell or transfer marijuana or marijuana products unless the person to whom the marijuana or marijuana product is to be sold first presents documentation which reasonably appears to be a valid government-issued identification card showing that the person is 21 years of age or older.
(b) Persons under 21 years of age may be used by peace officers in the enforcement of this division and to apprehend licensees, or employees or agents of licensees, or other persons who sell or furnish marijuana to minors. Notwithstanding any provision of law, any person under 21 years of age who purchases or attempts to purchase any marijuana while under the direction of a peace officer is immune from prosecution for that purchase or attempt to purchase marijuana. Guidelines with respect to the use of persons under 21 years of age as decoys shall be adopted and published by the bureau in accordance with the rulemaking portion of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(c) Notwithstanding subdivision (a), a licensee that is also a dispensary licensed under Chapter 3.5 (commencing with Section 19300) of Division 8 may:
(1) Allow on the premises any person 18 years of age or older who possesses a valid identification card under Section 11362.71 of the Health and Safety Code and a valid government-issued identification card;
(2) Sell marijuana, marijuana products, and marijuana accessories to a person 18 years of age or older who possesses a valid identification card under Section 11362.71 of the Health and Safety Code and a valid government-issued identification card.
Chapter 15. advertisinG and marKetinG restriCtions
26150. For purposes of this chapter:
(a) “Advertise” means the publication or dissemination of an advertisement.
(b) “Advertisement” includes any written or verbal statement, illustration, or depiction which is calculated to induce sales of marijuana or marijuana products, including any written, printed, graphic, or other material, billboard, sign, or other outdoor display, public transit card, other periodical literature, publication, or in a radio or television
TO DRIVE AND OPERATE MACHINERY. PLEASE USE EXTREME CAUTION.”
(B) For marijuana products: “GOVERNMENT WARNING: THIS PRODUCT CONTAINS MARIJUANA, A SCHEDULE I CONTROLLED SUBSTANCE. KEEP OUT OF REACH OF CHILDREN AND ANIMALS. MARIJUANA PRODUCTS MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. THE INTOXICATING EFFECTS OF MARIJUANA PRODUCTS MAY BE DELAYED UP TO TWO HOURS. MARIJUANA USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF MARIJUANA PRODUCTS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE MACHINERY. PLEASE USE EXTREME CAUTION.”
(3) For packages containing only dried flower, the net weight of marijuana in the package.
(4) Identification of the source and date of cultivation, the type of marijuana or marijuana product and the date of manufacturing and packaging.
(5) The appellation of origin, if any.
(6) List of pharmacologically active ingredients, including, but not limited to, tetrahydrocannabinol (THC), cannabidiol (CBD), and other cannabinoid content, the THC and other cannabinoid amount in milligrams per serving, servings per package, and the THC and other cannabinoid amount in milligrams for the package total, and the potency of the marijuana or marijuana product by reference to the amount of tetrahydrocannabinol and cannabidiol in each serving.
(7) For marijuana products, a list of all ingredients and disclosure of nutritional information in the same manner as the federal nutritional labeling requirements in Section 101.9 of Title 21 of the Code of Federal Regulations.
(8) A list of any solvents, nonorganic pesticides, herbicides, and fertilizers that were used in the cultivation, production, and manufacture of such marijuana or marijuana product.
(9) A warning if nuts or other known allergens are used.
(10) Information associated with the unique identifier issued by the Department of Food and Agriculture.
(11) Any other requirement set by the bureau or the State Department of Public Health.
(d) Only generic food names may be used to describe the ingredients in edible marijuana products.
(e) In the event the bureau determines that marijuana is no longer a schedule I controlled substance under federal law, the label prescribed in subdivision (c) shall no longer require a statement that marijuana is a schedule I controlled substance.
Chapter 13. marijuana produCts
26130. (a) Marijuana products shall be:
(1) Not designed to be appealing to children or easily confused with commercially sold candy or foods that do not contain marijuana.
(2) Produced and sold with a standardized dosage of cannabinoids not to exceed ten (10) milligrams tetrahydrocannabinol (THC) per serving.
(3) Delineated or scored into standardized serving sizes if the marijuana product contains more than one serving and is an edible marijuana product in solid form.
64
Text of Proposed Laws | 195
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
of the advertised product bears an appellation of origin, and such appellation of origin appears in the advertisement;
(d) Advertise or market on a billboard or similar advertising device located on an Interstate Highway or State Highway which crosses the border of any other state;
(e) Advertise or market marijuana or marijuana products in a manner intended to encourage persons under the age of 21 years to consume marijuana or marijuana products;
(f) Publish or disseminate advertising or marketing containing symbols, language, music, gestures, cartoon characters or other content elements known to appeal primarily to persons below the legal age of consumption; or
(g) Advertise or market marijuana or marijuana products on an advertising sign within 1,000 feet of a day care center, school providing instruction in kindergarten or any grades 1 through 12, playground, or youth center.
26153. No licensee shall give away any amount of marijuana or marijuana products, or any marijuana accessories, as part of a business promotion or other commercial activity.
26154. No licensee shall publish or disseminate advertising or marketing containing any health-related statement that is untrue in any particular manner or tends to create a misleading impression as to the effects on health of marijuana consumption.
26155. (a) The provisions of subdivision (g) of Section 26152 shall not apply to the placement of advertising signs inside a licensed premises and which are not visible by normal unaided vision from a public place, provided that such advertising signs do not advertise marijuana or marijuana products in a manner intended to encourage persons under the age of 21 years to consume marijuana or marijuana products.
(b) This chapter does not apply to any noncommercial speech.
Chapter 16. reCords
26160. (a) A licensee shall keep accurate records of commercial marijuana activity.
(b) All records related to commercial marijuana activity as defined by the licensing authorities shall be maintained for a minimum of seven years.
(c) The bureau may examine the books and records of a licensee and inspect the premises of a licensee as the licensing authority, or a state or local agency, deems necessary to perform its duties under this division. All inspections shall be conducted during standard business hours of the licensed facility or at any other reasonable time.
(d) Licensees shall keep records identified by the licensing authorities on the premises of the location licensed. The licensing authorities may make any examination of the records of any licensee. Licensees shall also provide and deliver copies of documents to the licensing agency upon request.
(e) A licensee, or its agent or employee, that refuses, impedes, obstructs, or interferes with an inspection of the premises or records of the licensee pursuant to this section, has engaged in a violation of this division.
(f) If a licensee, or an agent or employee of a licensee, fails to maintain or provide the records required pursuant to this section, the licensee shall be subject to a citation
broadcast, or in any other media; except that such term shall not include:
(1) Any label affixed to any marijuana or marijuana products, or any individual covering, carton, or other wrapper of such container that constitutes a part of the labeling under provisions of this division.
(2) Any editorial or other reading material (e.g., news release) in any periodical or publication or newspaper for the publication of which no money or valuable consideration is paid or promised, directly or indirectly, by any licensee, and which is not written by or at the direction of the licensee.
(c) “Advertising sign” is any sign, poster, display, billboard, or any other stationary or permanently affixed advertisement promoting the sale of marijuana or marijuana products which are not cultivated, manufactured, distributed, or sold on the same lot.
(d) “Health-related statement” means any statement related to health, and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of marijuana or marijuana products and health benefits, or effects on health.
(e) “Market” or “Marketing” means any act or process of promoting or selling marijuana or marijuana products, including, but not limited to, sponsorship of sporting events, point-of-sale advertising, and development of products specifically designed to appeal to certain demographics.
26151. (a) All advertisements and marketing shall accurately and legibly identify the licensee responsible for its content.
(b) Any advertising or marketing placed in broadcast, cable, radio, print and digital communications shall only be displayed where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older, as determined by reliable, up-to-date audience composition data.
(c) Any advertising or marketing involving direct, individualized communication or dialogue controlled by the licensee shall utilize a method of age affirmation to verify that the recipient is 21 years of age or older prior to engaging in such communication or dialogue controlled by the licensee. For purposes of this section, such method of age affirmation may include user confirmation, birth date disclosure, or other similar registration method.
(d) All advertising shall be truthful and appropriately substantiated.
26152. No licensee shall:
(a) Advertise or market in a manner that is false or untrue in any material particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter, tends to create a misleading impression;
(b) Publish or disseminate advertising or marketing containing any statement concerning a brand or product that is inconsistent with any statement on the labeling thereof;
(c) Publish or disseminate advertising or marketing containing any statement, design, device, or representation which tends to create the impression that the marijuana originated in a particular place or region, unless the label
64
196 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
updates to third-party applications. The system should provide a test environment for third-party applications to access that mirrors the production environment.
Chapter 18. liCense fees
26180. Each licensing authority shall establish a scale of application, licensing, and renewal fees, based upon the cost of enforcing this division, as follows:
(a) Each licensing authority shall charge each licensee a licensure and renewal fee, as applicable. The licensure and renewal fee shall be calculated to cover the costs of administering this division. The licensure fee may vary depending upon the varying costs associated with administering the various regulatory requirements of this division as they relate to the nature and scope of the different licensure activities, including, but not limited to, the track and trace program required pursuant to Section 26170, but shall not exceed the reasonable regulatory costs to the licensing authority.
(b) The total fees assessed pursuant to this division shall be set at an amount that will fairly and proportionately generate sufficient total revenue to fully cover the total costs of administering this division.
(c) All license fees shall be set on a scaled basis by the licensing authority, dependent on the size of the business.
(d) The licensing authority shall deposit all fees collected in a fee account specific to that licensing authority, to be established in the Marijuana Control Fund. Moneys in the licensing authority fee accounts shall be used, upon appropriation by the Legislature, by the designated licensing authority for the administration of this division.
26181. The State Water Resources Control Board, the Department of Fish and Wildlife, and other agencies may establish fees to cover the costs of their marijuana regulatory programs.
Chapter 19. annual reports; performanCe audit
26190. Beginning on March 1, 2020, and on or before March 1 of each year thereafter, each licensing authority shall prepare and submit to the Legislature an annual report on the authority’s activities concerning commercial marijuana activities and post the report on the authority’s Internet Web site. The report shall include, but not be limited to, the same type of information specified in Section 19353, and a detailed list of the petitions for regulatory relief or rulemaking changes received by the office from licensees requesting modifications of the enforcement of rules under this division.
26191. (a) Commencing January 1, 2019, and by January 1 of each year thereafter, the California State Auditor’s Office shall conduct a performance audit of the bureau’s activities under this division, and shall report its findings to the bureau and the Legislature by July 1 of that same year. The report shall include, but not be limited to, the following:
(1) The actual costs of the program.
(2) The overall effectiveness of enforcement programs.
(3) Any report submitted pursuant to this section shall be submitted in compliance with Section 9795 of the Government Code.
(b) The Legislature shall provide sufficient funds to the California State Auditor’s Office to conduct the annual audit required by this section.
and fine of up to thirty thousand dollars ($30,000) per individual violation.
26161. (a) Every sale or transport of marijuana or marijuana products from one licensee to another licensee must be recorded on a sales invoice or receipt. Sales invoices and receipts may be maintained electronically and must be filed in such manner as to be readily accessible for examination by employees of the bureau or Board of Equalization and shall not be commingled with invoices covering other commodities.
(b) Each sales invoice required by subdivision (a) shall include the name and address of the seller and shall include the following information:
(1) Name and address of the purchaser.
(2) Date of sale and invoice number.
(3) Kind, quantity, size, and capacity of packages of marijuana or marijuana products sold.
(4) The cost to the purchaser, together with any discount applied to the price as shown on the invoice.
(5) The place from which transport of the marijuana or marijuana product was made unless transport was made from the premises of the licensee.
(6) Any other information specified by the bureau or the licensing authority.
Chapter 17. traCK and traCe system
26170. (a) The Department of Food and Agriculture, in consultation with the bureau and the State Board of Equalization, shall expand the track and trace program provided for under Article 7.5 (commencing with Section 19335) of Chapter 3.5 of Division 8 to include the reporting of the movement of marijuana and marijuana products throughout the distribution chain and provide, at a minimum, the same level of information for marijuana and marijuana products as required to be reported for medical cannabis and medical cannabis products, and in addition, the amount of the cultivation tax due pursuant to Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code. The expanded track and trace program shall include an electronic seed to sale software tracking system with data points for the different stages of commercial activity including, but not limited to, cultivation, harvest, processing, distribution, inventory, and sale.
(b) The department, in consultation with the bureau, shall ensure that licensees under this division are allowed to use third-party applications, programs and information technology systems to comply with the requirements of the expanded track and trace program described in subdivision (a) to report the movement of marijuana and marijuana products throughout the distribution chain and communicate such information to licensing agencies as required by law.
(c) Any software, database or other information technology system utilized by the department to implement the expanded track and trace program shall support interoperability with third-party cannabis business software applications and allow all licensee-facing system activities to be performed through a secure application programming interface (API) or comparable technology which is well documented, bi-directional, and accessible to any third-party application that has been validated and has appropriate credentials. The API or comparable technology shall have version control and provide adequate notice of
64
Text of Proposed Laws | 197
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
26211. (a) Funds for the initial establishment and support of the regulatory activities under this division, including the public information program described in subdivision (c), and for the activities of the Board of Equalization under Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code until July 1, 2017, or until the 2017 Budget Act is enacted, whichever occurs later, shall be advanced from the General Fund and shall be repaid by the initial proceeds from fees collected pursuant to this division, any rule or regulation adopted pursuant to this division, or revenues collected from the tax imposed by Sections 34011 and 34012 of the Revenue and Taxation Code, by January 1, 2025.
(1) Funds advanced pursuant to this subdivision shall be appropriated to the bureau, which shall distribute the moneys to the appropriate licensing authorities, as necessary to implement the provisions of this division, and to the Board of Equalization, as necessary, to implement the provisions of Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code.
(2) Within 45 days of this section becoming operative:
(A) The Director of Finance shall determine an amount of the initial advance from the General Fund to the Marijuana Control Fund that does not exceed thirty million dollars ($30,000,000); and
(B) There shall be advanced a sum of five million dollars ($5,000,000) from the General Fund to the State Department of Health Care Services to provide for the public information program described in subdivision (c).
(b) Notwithstanding subdivision (a), the Legislature shall provide sufficient funds to the Marijuana Control Fund to support the activities of the bureau, state licensing authorities under this division, and the Board of Equalization to support its activities under Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code. It is anticipated that this funding will be provided annually beginning on July 1, 2017.
(c) The State Department of Health Care Services shall establish and implement a public information program no later than September 1, 2017. This public information program shall, at a minimum, describe the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016, the scientific basis for restricting access of marijuana and marijuana products to persons under the age of 21 years, describe the penalties for providing access to marijuana and marijuana products to persons under the age of 21 years, provide information regarding the dangers of driving a motor vehicle, boat, vessel, aircraft, or other vehicle used for transportation while impaired from marijuana use, the potential harms of using marijuana while pregnant or breastfeeding, and the potential harms of overusing marijuana or marijuana products.
SEC. 6.2. Section 147.6 is added to the Labor Code, to read:
147.6. (a) By March 1, 2018, 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 licensees under Division 10 (commencing with Section 26000) of the Business and Professions Code, including but not limited to, whether specific requirements are needed to address exposure to second-hand marijuana smoke by employees at facilities where on-site consumption
Chapter 20. loCal Control
26200. (a) Nothing in this division shall be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction.
(b) Nothing in this division shall be interpreted to require a licensing authority to undertake local law enforcement responsibilities, enforce local zoning requirements, or enforce local licensing requirements.
(c) A local jurisdiction shall notify the bureau upon revocation of any local license, permit, or authorization for a licensee to engage in commercial marijuana activity within the local jurisdiction. Within 10 days of notification, the bureau shall inform the relevant licensing authorities. Within 10 days of being so informed by the bureau, the relevant licensing authorities shall commence proceedings under Chapter 3 (commencing with Section 26030) to determine whether a license issued to the licensee should be suspended or revoked.
(d) Notwithstanding paragraph (1) of subdivision (a) of Section 11362.3 of the Health and Safety Code, a local jurisdiction may allow for the smoking, vaporizing, and ingesting of marijuana or marijuana products on the premises of a retailer or microbusiness licensed under this division if:
(1) Access to the area where marijuana consumption is allowed is restricted to persons 21 years of age and older;
(2) Marijuana consumption is not visible from any public place or non-age restricted area; and
(3) Sale or consumption of alcohol or tobacco is not allowed on the premises.
26201. Any standards, requirements, and regulations regarding health and safety, environmental protection, testing, security, food safety, and worker protections established by the state shall be the minimum standards for all licensees under this division statewide. A local jurisdiction may establish additional standards, requirements, and regulations.
26202. (a) A local jurisdiction may enforce this division and the regulations promulgated by the bureau or any licensing authority if delegated the power to do so by the bureau or a licensing authority.
(b) The bureau or any licensing authority shall implement the delegation of enforcement authority in subdivision (a) through a memorandum of understanding between the bureau or licensing authority and the local jurisdiction to which enforcement authority is to be delegated.
Chapter 21. fundinG
26210. (a) The Medical Cannabis Regulation and Safety Act Fund established in Section 19351 is hereby renamed the Marijuana Control Fund.
(b) Upon the effective date of this section, whenever “Medical Cannabis Regulation and Safety Act Fund” appears in any statute, regulation, or contract, or in any other code, it shall be construed to refer to the Marijuana Control Fund.
64
198 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(d) “Marijuana” shall have the same meaning as set forth in Section 11018 of the Health and Safety Code and shall also mean medical cannabis.
(e) “Marijuana products” shall have the same meaning as set forth in Section 11018.1 of the Health and Safety Code and shall also mean medical concentrates and medical cannabis products.
(f) “Marijuana flowers” shall mean the dried flowers of the marijuana plant as defined by the board.
(g) “Marijuana leaves” shall mean all parts of the marijuana plant other than marijuana flowers that are sold or consumed.
(h) “Gross receipts” shall have the same meaning as set forth in Section 6012.
(i) “Retail sale” shall have the same meaning as set forth in Section 6007.
(j) “Person” shall have the same meaning as set forth in Section 6005.
(k) “Microbusiness” shall have the same meaning as set forth in paragraph (3) of subdivision (a) of Section 26070 of the Business and Professions Code.
(l) “Nonprofit” shall have the same meaning as set forth in Section 26070.5 of the Business and Professions Code.
34011. (a) Effective January 1, 2018, a marijuana excise tax shall be imposed upon purchasers of marijuana or marijuana products sold in this state at the rate of 15 percent of the gross receipts of any retail sale by a dispensary or other person required to be licensed pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code or a retailer, microbusiness, nonprofit, or other person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code to sell marijuana and marijuana products directly to a purchaser.
(b) Except as otherwise provided by regulation, the tax levied under this section shall apply to the full price, if nonitemized, of any transaction involving both marijuana or marijuana products and any other otherwise distinct and identifiable goods or services, and the price of any goods or services, if a reduction in the price of marijuana or marijuana products is contingent on purchase of those goods or services.
(c) A dispensary or other person required to be licensed pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code or a retailer, microbusiness, nonprofit, or other person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code shall be responsible for collecting this tax and remitting it to the board in accordance with rules and procedures established under law and any regulations adopted by the board.
(d) The excise tax imposed by this section shall be in addition to the sales and use tax imposed by the state and local governments.
(e) Gross receipts from the sale of marijuana or marijuana products for purposes of assessing the sales and use tax under Part 1 of this division shall include the tax levied pursuant to this section.
(f) No marijuana or marijuana products may be sold to a purchaser unless the excise tax required by law has been paid by the purchaser at the time of sale.
of marijuana is permitted under subdivision (d) of Section 26200 of the Business and Professions Code, and whether specific requirements are needed to address the potential risks of combustion, inhalation, armed robberies or repetitive strain injuries.
(b) By October 1, 2018, the advisory committee shall present to the board its findings and recommendations for consideration by the board. By October 1, 2018, the board shall render a decision regarding the adoption of industry-specific regulations pursuant to this section.
SEC. 6.3. Section 13276 of the Water Code is amended to read:
13276. (a) The multiagency task force, the Department of Fish and Wildlife and State Water Resources Control Board pilot project to address the Environmental Impacts of Cannabis Cultivation, assigned to respond to the damages caused by marijuana cultivation on public and private lands in California, shall continue its enforcement efforts on a permanent basis and expand them to a statewide level to ensure the reduction of adverse impacts of marijuana cultivation on water quality and on fish and wildlife throughout the state.
(b) Each regional board shall, and the State Water Resources Control Board may, address discharges of waste resulting from medical marijuana cultivation and commercial marijuana cultivation under Division 10 of the Business and Professions Code and associated activities, including by adopting a general permit, establishing waste discharge requirements, or taking action pursuant to Section 13269. In addressing these discharges, each regional board shall include conditions to address items that include, but are not limited to, all of the following:
(1) Site development and maintenance, erosion control, and drainage features.
(2) Stream crossing installation and maintenance.
(3) Riparian and wetland protection and management.
(4) Soil disposal.
(5) Water storage and use.
(6) Irrigation runoff.
(7) Fertilizers and soil.
(8) Pesticides and herbicides.
(9) Petroleum products and other chemicals.
(10) Cultivation-related waste.
(11) Refuse and human waste.
(12) Cleanup, restoration, and mitigation.
SEC. 7. Marijuana Tax.
SEC. 7.1. Part 14.5 (commencing with Section 34010) is added to Division 2 of the Revenue and Taxation Code, to read:
PART 14.5. MARIJUANA TAX
34010. For purposes of this part:
(a) “Board” shall mean the Board of Equalization or its successor agency.
(b) “Bureau” shall mean the Bureau of Marijuana Control within the Department of Consumer Affairs.
(c) “Tax Fund” means the California Marijuana Tax Fund created by Section 34018.
64
Text of Proposed Laws | 199
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(j) The tax imposed by this section shall be imposed on all marijuana cultivated in the state pursuant to rules and regulations promulgated by the board, but shall not apply to marijuana cultivated for personal use under Section 11362.1 of the Health and Safety Code or cultivated by a qualified patient or primary caregiver in accordance with the Compassionate Use Act.
(k) Beginning January 1, 2020, the rates set forth in subdivisions (a), (b), and (c) shall be adjusted by the board annually thereafter for inflation.
34013. (a) The board shall administer and collect the taxes imposed by this part pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001) of Division 2). For purposes of this part, the references in the Fee Collection Procedures Law to “fee” shall include the tax imposed by this part, and references to “feepayer” shall include a person required to pay or collect the tax imposed by this part.
(b) The board may prescribe, adopt, and enforce regulations relating to the administration and enforcement of this part, including, but not limited to, collections, reporting, refunds, and appeals.
(c) The board shall adopt necessary rules and regulations to administer the taxes in this part. Such rules and regulations may include methods or procedures to tag marijuana or marijuana products, or the packages thereof, to designate prior tax payment.
(d) The board may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer and enforce its duties under this division. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other provision of law, the emergency regulations adopted by the board may remain in effect for two years from adoption.
(e) Any person who fails to pay the taxes imposed under this part shall, in addition to owing the taxes not paid, be subject to a penalty of at least one-half the amount of the taxes not paid, and shall be subject to having its license revoked pursuant to Section 26031 of the Business and Professions Code or pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code.
(f) The board may bring such legal actions as are necessary to collect any deficiency in the tax required to be paid, and, upon the board’s request, the Attorney General shall bring the actions.
34014. (a) All persons required to be licensed involved in the cultivation and retail sale of marijuana or marijuana products must obtain a separate permit from the board pursuant to regulations adopted by the board. No fee shall be charged to any person for issuance of the permit. Any person required to obtain a permit who engages in business as a cultivator, dispensary, retailer, microbusiness or nonprofit pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code without a permit or after a permit has been canceled,
(g) The sales and use tax imposed by Part 1 (commencing with Section 6001) shall not apply to retail sales of medical cannabis, medical cannabis concentrate, edible medical cannabis products or topical cannabis as those terms are defined in Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code when a qualified patient or primary caregiver for a qualified patient provides his or her card issued under Section 11362.71 of the Health and Safety Code and a valid government-issued identification card.
34012. (a) Effective January 1, 2018, there is hereby imposed a cultivation tax on all harvested marijuana that enters the commercial market upon all persons required to be licensed to cultivate marijuana pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code or Division 10 (commencing with Section 26000) of the Business and Professions Code. The tax shall be due after the marijuana is harvested.
(1) The tax for marijuana flowers shall be nine dollars and twenty-five cents ($9.25) per dry-weight ounce.
(2) The tax for marijuana leaves shall be set at two dollars and seventy-five cents ($2.75) per dry-weight ounce.
(b) The board may adjust the tax rate for marijuana leaves annually to reflect fluctuations in the relative price of marijuana flowers to marijuana leaves.
(c) The board may from time to time establish other categories of harvested marijuana, categories for unprocessed or frozen marijuana or immature plants, or marijuana that is shipped directly to manufacturers. These categories shall be taxed at their relative value compared with marijuana flowers.
(d) The board may prescribe by regulation a method and manner for payment of the cultivation tax that utilizes tax stamps or state-issued product bags that indicate that all required tax has been paid on the product to which the tax stamp is affixed or in which the marijuana is packaged.
(e) The tax stamps and product bags shall be of the designs, specifications and denominations as may be prescribed by the board and may be purchased by any licensee under Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code or under Division 10 (commencing with Section 26000) of the Business and Professions Code.
(f) Subsequent to the establishment of a tax stamp program, the board may by regulation provide that no marijuana may be removed from a licensed cultivation facility or transported on a public highway unless in a state-issued product bag bearing a tax stamp in the proper denomination.
(g) The tax stamps and product bags shall be capable of being read by a scanning or similar device and must be traceable utilizing the track and trace system pursuant to Section 26170 of the Business and Professions Code.
(h) Persons required to be licensed to cultivate marijuana pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code or Division 10 (commencing with Section 26000) of the Business and Professions Code shall be responsible for payment of the tax pursuant to regulations adopted by the board. No marijuana may be sold unless the tax has been paid as provided in this part.
(i) All marijuana removed from a cultivator’s premises, except for plant waste, shall be presumed to be sold and thereby taxable under this section.
64
200 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(2) Inspections may be at any place at which marijuana or marijuana products are sold to purchasers, cultivated, or stored, or at any site where evidence of activities involving evasion of tax may be discovered.
(3) Inspections shall be requested or conducted no more than once in a 24-hour period.
(b) Any person who fails or refuses to allow an inspection shall be guilty of a misdemeanor. Each offense shall be punished by a fine not to exceed five thousand dollars ($5,000), or imprisonment not exceeding one year in a county jail, or both the fine and imprisonment. The court shall order any fines assessed be deposited in the California Marijuana Tax Fund.
(c) Upon discovery by the board or a law enforcement agency that a licensee or any other person possesses, stores, owns, or has made a retail sale of marijuana or marijuana products, without evidence of tax payment or not contained in secure packaging, the board or the law enforcement agency shall be authorized to seize the marijuana or marijuana products. Any marijuana or marijuana products seized by a law enforcement agency or the board shall within seven days be deemed forfeited and the board shall comply with the procedures set forth in Sections 30436 through 30449, inclusive.
(d) Any person who renders a false or fraudulent report is guilty of a misdemeanor and subject to a fine not to exceed one thousand dollars ($1,000) for each offense.
(e) Any violation of any provisions of this part, except as otherwise provided, is a misdemeanor and is punishable as such.
(f) All moneys remitted to the board under this part shall be credited to the California Marijuana Tax Fund.
34017. The Legislative Analyst’s Office shall submit a report to the Legislature by January 1, 2020, with recommendations to the Legislature for adjustments to the tax rate to achieve the goals of undercutting illicit market prices and discouraging use by persons younger than 21 years of age while ensuring sufficient revenues are generated for the programs identified in Section 34019.
34018. (a) The California Marijuana Tax Fund is hereby created in the State Treasury. The Tax Fund shall consist of all taxes, interest, penalties, and other amounts collected and paid to the board pursuant to this part, less payment of refunds.
(b) Notwithstanding any other law, the California Marijuana Tax Fund is a special trust fund established solely to carry out the purposes of the Control, Regulate and Tax Adult Use of Marijuana Act and all revenues deposited into the Tax Fund, together with interest or dividends earned by the fund, are hereby continuously appropriated for the purposes of the Control, Regulate and Tax Adult Use of Marijuana Act without regard to fiscal year and shall be expended only in accordance with the provisions of this part and its purposes.
(c) Notwithstanding any other law, the taxes imposed by this part and the revenue derived therefrom, including investment interest, shall not be considered to be part of the General Fund, as that term is used in Chapter 1 (commencing with Section 16300) of Part 2 of Division 4 of the Government Code, shall not be considered General Fund revenue for purposes of Section 8 of Article XVI of the California Constitution and its implementing statutes, and shall not be considered “moneys” for purposes of
suspended, or revoked, and each officer of any corporation which so engages in business, is guilty of a misdemeanor.
(b) The board may require every licensed dispensary, cultivator, microbusiness, nonprofit, or other person required to be licensed, to provide security to cover the liability for taxes imposed by state law on marijuana produced or received by the cultivator, microbusiness, nonprofit, or other person required to be licensed in accordance with procedures to be established by the board. Notwithstanding anything herein to the contrary, the board may waive any security requirement it imposes for good cause, as determined by the board. “Good cause” includes, but is not limited to, the inability of a cultivator, microbusiness, nonprofit, or other person required to be licensed to obtain security due to a lack of service providers or the policies of service providers that prohibit service to a marijuana business. A person may not commence or continue any business or operation relating to marijuana cultivation until any surety required by the board with respect to the business or operation has been properly prepared, executed and submitted under this part.
(c) In fixing the amount of any security required by the board, the board shall give consideration to the financial hardship that may be imposed on licensees as a result of any shortage of available surety providers.
34015. (a) The marijuana excise tax and cultivation tax imposed by this part is due and payable to the board quarterly on or before the last day of the month following each quarterly period of three months. On or before the last day of the month following each quarterly period, a return for the preceding quarterly period shall be filed with the board by each person required to be licensed for cultivation or retail sale under Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code using electronic media. Returns shall be authenticated in a form or pursuant to methods as may be prescribed by the board. If the cultivation tax is paid by stamp pursuant to subdivision (d) of Section 34012 the board may by regulation determine when and how the tax shall be paid.
(b) The board may require every person engaged in the cultivation, distribution or retail sale of marijuana and marijuana products required to be licensed pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code to file, on or before the 25th day of each month, a report using electronic media respecting the person’s inventory, purchases, and sales during the preceding month and any other information as the board may require to carry out the purposes of this part. Reports shall be authenticated in a form or pursuant to methods as may be prescribed by the board.
34016. (a) Any peace officer or board employee granted limited peace officer status pursuant to paragraph (6) of subdivision (a) of Section 830.11 of the Penal Code, upon presenting appropriate credentials, is authorized to enter any place as described in paragraph (3) and to conduct inspections in accordance with the following paragraphs, inclusive.
(1) Inspections shall be performed in a reasonable manner and at times that are reasonable under the circumstances, taking into consideration the normal business hours of the place to be entered.
64
Text of Proposed Laws | 201
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
findings at a minimum of every two years and shall make the reports available to the public. The bureau shall select the universities to be funded. The research funded pursuant to this subdivision shall include but not necessarily be limited to:
(1) Impacts on public health, including health costs associated with marijuana use, as well as whether marijuana use is associated with an increase or decrease in use of alcohol or other drugs.
(2) The impact of treatment for maladaptive marijuana use and the effectiveness of different treatment programs.
(3) Public safety issues related to marijuana use, including studying the effectiveness of the packaging and labeling requirements and advertising and marketing restrictions contained in the act at preventing underage access to and use of marijuana and marijuana products, and studying the health-related effects among users of varying potency levels of marijuana and marijuana products.
(4) Marijuana use rates, maladaptive use rates for adults and youth, and diagnosis rates of marijuana-related substance use disorders.
(5) Marijuana market prices, illicit market prices, tax structures and rates, including an evaluation of how to best tax marijuana based on potency, and the structure and function of licensed marijuana businesses.
(6) Whether additional protections are needed to prevent unlawful monopolies or anti-competitive behavior from occurring in the nonmedical marijuana industry and, if so, recommendations as to the most effective measures for preventing such behavior.
(7) The economic impacts in the private and public sectors, including, but not necessarily limited to, job creation, workplace safety, revenues, taxes generated for state and local budgets, and criminal justice impacts, including, but not necessarily limited to, impacts on law enforcement and public resources, short and long term consequences of involvement in the criminal justice system, and state and local government agency administrative costs and revenue.
(8) Whether the regulatory agencies tasked with implementing and enforcing the Control, Regulate and Tax Adult Use of Marijuana Act are doing so consistent with the purposes of the act, and whether different agencies might do so more effectively.
(9) Environmental issues related to marijuana production and the criminal prohibition of marijuana production.
(10) The geographic location, structure, and function of licensed marijuana businesses, and demographic data, including race, ethnicity, and gender, of license holders.
(11) The outcomes achieved by the changes in criminal penalties made under the Control, Regulate and Tax Adult Use of Marijuana Act for marijuana-related offenses, and the outcomes of the juvenile justice system, in particular, probation-based treatments and the frequency of up-charging illegal possession of marijuana or marijuana products to a more serious offense.
(c) The Controller shall next disburse the sum of three million dollars ($3,000,000) annually to the Department of the California Highway Patrol beginning fiscal year 2018–2019 until fiscal year 2022–2023 to establish and adopt protocols to determine whether a driver is operating a vehicle while impaired, including impairment by the use of marijuana or marijuana products, and to establish and
subdivisions (a) and (b) of Section 8 of Article XVI of the California Constitution and its implementing statutes.
34019. (a) Beginning with fiscal year 2017–2018 the Department of Finance shall estimate revenues to be received pursuant to Sections 34011 and 34012 and provide those estimates to the Controller no later than June 15 of each year. The Controller shall use these estimates when disbursing funds pursuant to this section. Before any funds are disbursed pursuant to subdivisions (b), (c), (d), and (e) of this section, the Controller shall disburse from the Tax Fund to the appropriate account, without regard to fiscal year, the following:
(1) Reasonable costs incurred by the board for administering and collecting the taxes imposed by this part; provided, however, such costs shall not exceed 4 percent of tax revenues received.
(2) Reasonable costs incurred by the bureau, the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health for implementing, administering, and enforcing Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code and Division 10 (commencing with Section 26000) of the Business and Professions Code to the extent those costs are not reimbursed pursuant to Section 26180 of the Business and Professions Code or pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code. This paragraph shall remain operative through fiscal year 2022–2023.
(3) Reasonable costs incurred by the Department of Fish and Wildlife, the State Water Resources Control Board, and the Department of Pesticide Regulation for carrying out their respective duties under Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code to the extent those costs are not otherwise reimbursed.
(4) Reasonable costs incurred by the Controller for performing duties imposed by the Control, Regulate and Tax Adult Use of Marijuana Act, including the audit required by Section 34020.
(5) Reasonable costs incurred by the State Auditor for conducting the performance audit pursuant to Section 26191 of the Business and Professions Code.
(6) Reasonable costs incurred by the Legislative Analyst’s Office for performing duties imposed by Section 34017.
(7) Sufficient funds to reimburse the Division of Labor Standards Enforcement and the Division of Occupational Safety and Health within the Department of Industrial Relations and the Employment Development Department for the costs of applying and enforcing state labor laws to licensees under Chapter 3.5 (commencing with Section 19300) of Division 8 and Division 10 (commencing with Section 26000) of the Business and Professions Code.
(b) The Controller shall next disburse the sum of ten million dollars ($10,000,000) to a public university or universities in California annually beginning with fiscal year 2018–2019 until fiscal year 2028–2029 to research and evaluate the implementation and effect of the Control, Regulate and Tax Adult Use of Marijuana Act, and shall, if appropriate, make recommendations to the Legislature and Governor regarding possible amendments to the Control, Regulate and Tax Adult Use of Marijuana Act. The recipients of these funds shall publish reports on their
64
202 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
care providers, juvenile and family courts, and others to recognize and reduce risks related to substance use, and the early signs of problematic use and of substance use disorders.
(B) Grants to schools to develop and support student assistance programs, or other similar programs, designed to prevent and reduce substance use, and improve school retention and performance, by supporting students who are at risk of dropping out of school and promoting alternatives to suspension or expulsion that focus on school retention, remediation, and professional care. Schools with higher than average dropout rates should be prioritized for grants.
(C) Grants to programs for outreach, education and treatment for homeless youth and out-of-school youth with substance use disorders.
(D) Access and linkage to care provided by county behavioral health programs for youth, and their families and caregivers, who have a substance use disorder or who are at risk for developing a substance use disorder.
(E) Youth-focused substance use disorder treatment programs that are culturally and gender competent, trauma-informed, evidence-based and provide a continuum of care that includes screening and assessment (substance use disorder as well as mental health), early intervention, active treatment, family involvement, case management, overdose prevention, prevention of communicable diseases related to substance use, relapse management for substance use and other co-occurring behavioral health disorders, vocational services, literacy services, parenting classes, family therapy and counseling services, medication-assisted treatments, psychiatric medication and psychotherapy. When indicated, referrals must be made to other providers.
(F) To the extent permitted by law and where indicated, interventions shall utilize a two-generation approach to addressing substance use disorders with the capacity to treat youth and adults together. This would include supporting the development of family-based interventions that address substance use disorders and related problems within the context of families, including parents, foster parents, caregivers and all their children.
(G) Programs to assist individuals, as well as families and friends of drug using young people, to reduce the stigma associated with substance use including being diagnosed with a substance use disorder or seeking substance use disorder services. This includes peer-run outreach and education to reduce stigma, anti-stigma campaigns, and community recovery networks.
(H) Workforce training and wage structures that increase the hiring pool of behavioral health staff with substance use disorder prevention and treatment expertise. Provide ongoing education and coaching that increases substance use treatment providers’ core competencies and trains providers on promising and evidenced-based practices.
(I) Construction of community-based youth treatment facilities.
(J) The departments may contract with each county behavioral health program for the provision of services.
(K) Funds shall be allocated to counties based on demonstrated need, including the number of youth in the county, the prevalence of substance use disorders among adults, and confirmed through statistical data, validated
adopt protocols setting forth best practices to assist law enforcement agencies. The department may hire personnel to establish the protocols specified in this subdivision. In addition, the department may make grants to public and private research institutions for the purpose of developing technology for determining when a driver is operating a vehicle while impaired, including impairment by the use of marijuana or marijuana products.
(d) The Controller shall next disburse the sum of ten million dollars ($10,000,000) beginning fiscal year 2018–2019 and increasing ten million dollars ($10,000,000) each fiscal year thereafter until fiscal year 2022–2023, at which time the disbursement shall be fifty million dollars ($50,000,000) each year thereafter, to the Governor’s Office of Business and Economic Development, in consultation with the Labor and Workforce Development Agency and the State Department of Social Services, to administer a community reinvestments grants program to local health departments and at least 50 percent to qualified community-based nonprofit organizations to support job placement, mental health treatment, substance use disorder treatment, system navigation services, legal services to address barriers to reentry, and linkages to medical care for communities disproportionately affected by past federal and state drug policies. The office shall solicit input from community-based job skills, job placement, and legal service providers with relevant expertise as to the administration of the grants program. In addition, the office shall periodically evaluate the programs it is funding to determine the effectiveness of the programs, shall not spend more than 4 percent for administrative costs related to implementation, evaluation and oversight of the programs, and shall award grants annually, beginning no later than January 1, 2020.
(e) The Controller shall next disburse the sum of two million dollars ($2,000,000) annually to the University of California San Diego Center for Medicinal Cannabis Research to further the objectives of the center including the enhanced understanding of the efficacy and adverse effects of marijuana as a pharmacological agent.
(f) By July 15 of each fiscal year beginning in fiscal year 2018–2019, the Controller shall, after disbursing funds pursuant to subdivisions (a), (b), (c), (d), and (e), disburse funds deposited in the Tax Fund during the prior fiscal year into sub-trust accounts, which are hereby created, as follows:
(1) Sixty percent shall be deposited in the Youth Education, Prevention, Early Intervention and Treatment Account, and disbursed by the Controller to the State Department of Health Care Services for programs for youth that are designed to educate about and to prevent substance use disorders and to prevent harm from substance use. The State Department of Health Care Services shall enter into interagency agreements with the State Department of Public Health and the State Department of Education to implement and administer these programs. The programs shall emphasize accurate education, effective prevention, early intervention, school retention, and timely treatment services for youth, their families and caregivers. The programs may include, but are not limited to, the following components:
(A) Prevention and early intervention services including outreach, risk survey and education to youth, families, caregivers, schools, primary care health providers, behavioral health and substance use disorder service providers, community and faith-based organizations, foster
64
Text of Proposed Laws | 203
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
General Fund appropriations to the Department of Fish and Wildlife and the Department of Parks and Recreation shall not be reduced below the levels provided in the Budget Act of 2014 (Chapter 25 of the Statutes of 2014).
(3) Twenty percent shall be deposited into the State and Local Government Law Enforcement Account and disbursed by the Controller as follows:
(A) To the Department of the California Highway Patrol for conducting training programs for detecting, testing and enforcing laws against driving under the influence of alcohol and other drugs, including driving under the influence of marijuana. The department may hire personnel to conduct the training programs specified in this subparagraph.
(B) To the Department of the California Highway Patrol to fund internal California Highway Patrol programs and grants to qualified nonprofit organizations and local governments for education, prevention and enforcement of laws related to driving under the influence of alcohol and other drugs, including marijuana; programs that help enforce traffic laws, educate the public in traffic safety, provide varied and effective means of reducing fatalities, injuries and economic losses from collisions; and for the purchase of equipment related to enforcement of laws related to driving under the influence of alcohol and other drugs, including marijuana.
(C) To the Board of State and Community Corrections for making grants to local governments to assist with law enforcement, fire protection, or other local programs addressing public health and safety associated with the implementation of the Control, Regulate and Tax Adult Use of Marijuana Act. The board shall not make any grants to local governments which have banned the cultivation, including personal cultivation under paragraph (3) of subdivision (b) of Section 11362.2 of the Health and Safety Code, or retail sale of marijuana or marijuana products pursuant to Section 26200 of the Business and Professions Code or as otherwise provided by law.
(D) For purposes of this paragraph, the Department of Finance shall determine the allocation of revenues between the agencies; provided, however, beginning in fiscal year 2022–2023 the amount allocated pursuant to subparagraph (A) shall not be less than ten million dollars ($10,000,000) annually and the amount allocated pursuant to subparagraph (B) shall not be less than forty million dollars ($40,000,000) annually. In determining the amount to be allocated before fiscal year 2022–2023 pursuant to this paragraph, the Department of Finance shall give initial priority to subparagraph (A).
(g) Funds allocated pursuant to subdivision (f) shall be used to increase the funding of programs and purposes identified and shall not be used to replace allocation of other funding for these purposes.
(h) Effective July 1, 2028, the Legislature may amend this section by majority vote to further the purposes of the Control, Regulate and Tax Adult Use of Marijuana Act, including allocating funds to programs other than those specified in subdivisions (d) and (f). Any revisions pursuant to this subdivision shall not result in a reduction of funds to accounts established pursuant to subdivisions (d) and (f) in any subsequent year from the amount allocated to each account in fiscal year 2027–2028. Prior to July 1, 2028, the Legislature may not change the allocations to programs specified in subdivisions (d) and (f).
assessments or submitted reports prepared by the applicable county to demonstrate and validate need.
(L) The departments shall periodically evaluate the programs they are funding to determine the effectiveness of the programs.
(M) The departments may use up to 4 percent of the moneys allocated to the Youth Education, Prevention, Early Intervention and Treatment Account for administrative costs related to implementation, evaluation and oversight of the programs.
(N) If the Department of Finance ever determines that funding pursuant to marijuana taxation exceeds demand for youth prevention and treatment services in the state, the departments shall provide a plan to the Department of Finance to provide treatment services to adults as well as youth using these funds.
(O) The departments shall solicit input from volunteer health organizations, physicians who treat addiction, treatment researchers, family therapy and counseling providers, and professional education associations with relevant expertise as to the administration of any grants made pursuant to this paragraph.
(2) Twenty percent shall be deposited in the Environmental Restoration and Protection Account, and disbursed by the Controller as follows:
(A) To the Department of Fish and Wildlife and the Department of Parks and Recreation for the cleanup, remediation, and restoration of environmental damage in watersheds affected by marijuana cultivation and related activities including, but not limited to, damage that occurred prior to enactment of this part, and to support local partnerships for this purpose. The Department of Fish and Wildlife and the Department of Parks and Recreation may distribute a portion of the funds they receive from the Environmental Restoration and Protection Account through grants for purposes specified in this paragraph.
(B) To the Department of Fish and Wildlife and the Department of Parks and Recreation for the stewardship and operation of state-owned wildlife habitat areas and state park units in a manner that discourages and prevents the illegal cultivation, production, sale and use of marijuana and marijuana products on public lands, and to facilitate the investigation, enforcement and prosecution of illegal cultivation, production, sale, and use of marijuana or marijuana products on public lands.
(C) To the Department of Fish and Wildlife to assist in funding the watershed enforcement program and multiagency taskforce established pursuant to subdivisions (b) and (c) of Section 12029 of the Fish and Game Code to facilitate the investigation, enforcement, and prosecution of these offenses and to ensure the reduction of adverse impacts of marijuana cultivation, production, sale, and use on fish and wildlife habitats throughout the state.
(D) For purposes of this paragraph, the Secretary of the Natural Resources Agency shall determine the allocation of revenues between the departments. During the first five years of implementation, first consideration should be given to funding purposes specified in subparagraph (A).
(E) Funds allocated pursuant to this paragraph shall be used to increase and enhance activities described in subparagraphs (A), (B), and (C), and not replace allocation of other funding for these purposes. Accordingly, annual
64
204 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code.
(b) (a) Except as authorized by law, every person who possesses possession of not more than 28.5 grams of marijuana, other than or not more than four grams of concentrated cannabis, is guilty of an infraction punishable by a fine of not more than one hundred dollars ($100). or both, shall be punished or adjudicated as follows:
(1) Persons under the age of 18 shall be guilty of an infraction and shall be required to:
(A) Upon a finding that a first offense has been committed, complete four hours of drug education or counseling and up to 10 hours of community service over a period not to exceed 60 days.
(B) Upon a finding that a second offense or subsequent offense has been committed, complete six hours of drug education or counseling and up to 20 hours of community service over a period not to exceed 90 days.
(2) Persons at least 18 years of age but less than 21 years of age shall be guilty of an infraction and punishable by a fine of not more than one hundred dollars ($100).
(c) (b) Except as authorized by law, every person who possesses possession of more than 28.5 grams of marijuana, or more than four grams of other than concentrated cannabis, shall be punished as follows:
(1) Persons under the age of 18 who possess more than 28.5 grams of marijuana or more than four grams of concentrated cannabis, or both, shall be guilty of an infraction and shall be required to:
(A) Upon a finding that a first offense has been committed, complete eight hours of drug education or counseling and up to 40 hours of community service over a period not to exceed 90 days.
(B) Upon a finding that a second or subsequent offense has been committed, complete 10 hours of drug education or counseling and up to 60 hours of community service over a period not to exceed 120 days.
(2) Persons 18 years of age or over who possess more than 28.5 grams of marijuana, or more than four grams of concentrated cannabis, or both, shall be punished by imprisonment in a county jail for a period of not more than six months or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment.
(d) (c) Except as authorized by law, every person 18 years of age or over who possesses not more than 28.5 grams of marijuana, or not more than four grams of other than concentrated cannabis, upon the grounds of, or within, any school providing instruction in kindergarten or any of grades 1 through 12 during hours the school is open for classes or school-related programs is guilty of a misdemeanor and shall be punished by a as follows:
(1) A fine of not more than two hundred fifty dollars ($250), upon a finding that a first offense has been committed.
(2) A fine of not more than five hundred dollars ($500), or by imprisonment in a county jail for a period of not more than 10 days, or both, upon a finding that a second or subsequent offense has been committed.
(e) (d) Except as authorized by law, every person under the age of 18 who possesses not more than 28.5 grams of
34020. The Controller shall periodically audit the Tax Fund to ensure that those funds are used and accounted for in a manner consistent with this part and as otherwise required by law.
34021. The taxes imposed by this part shall be in addition to any other tax imposed by a city, county, or city and county.
34021.5. (a) (1) A county may impose a tax on the privilege of cultivating, manufacturing, producing, processing, preparing, storing, providing, donating, selling, or distributing marijuana or marijuana products by a licensee operating under Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code.
(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, if necessary, and the manner of collection of the tax. The tax may be imposed for general governmental purposes or for purposes specified in the ordinance by the board of supervisors.
(3) 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. A tax imposed pursuant to this section is a tax and not a fee or special assessment. The board of supervisors shall specify whether the tax applies throughout the entire county or within the unincorporated area of the county.
(4) The tax authorized by this section may be imposed upon any or all of the activities set forth in paragraph (1), as specified in the ordinance, regardless of whether the activity is undertaken individually, collectively, or cooperatively, and regardless of whether the activity is for compensation or gratuitous, as determined by the board of supervisors.
(b) A tax imposed pursuant to this section shall be subject to applicable voter approval requirements imposed by law.
(c) This section is declaratory of existing law and does not limit or prohibit the levy or collection of any other fee, charge, or tax, or a 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 a county as provided by law.
(d) This section shall not be construed to authorize a county to impose a sales or use tax in addition to the sales and use tax imposed under an ordinance conforming to the provisions of Sections 7202 and 7203 of the Revenue and Taxation Code.
SEC. 8. Criminal Offenses, Records, and Resentencing.
SEC. 8.1. Section 11357 of the Health and Safety Code is amended to read:
11357. Possession. (a) Except as authorized by law, every person who possesses any concentrated cannabis shall be punished by imprisonment in the county jail for a period of not more than one year or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment, except that such person may instead be punished pursuant to subdivision (h) of Section 1170 of the Penal Code if that person has one or more prior
64
Text of Proposed Laws | 205
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(E) Violation of Section 374.8 of the Penal Code relating to hazardous substances or Section 25189.5, 25189.6, or 25189.7 of the Health and Safety Code relating to hazardous waste;
(F) Violation of Section 2080 of the Fish and Game Code relating to endangered and threatened species or Section 3513 of the Fish and Game Code relating to the Migratory Bird Treaty Act; or
(G) Intentionally or with gross negligence causing substantial environmental harm to public lands or other public resources.
SEC. 8.3. Section 11359 of the Health and Safety Code is amended to read:
11359. Possession for Sale.
Every person who possesses for sale any marijuana, except as otherwise provided by law, shall be punished as follows:
(a) Every person under the age of 18 who possesses marijuana for sale shall be punished in the same manner provided in paragraph (1) of subdivision (b) of Section 11357.
(b) Every person 18 years of age or over who possesses marijuana for sale shall be punished by imprisonment in a county jail for a period of not more than six months or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment.
(c) Notwithstanding subdivision (b), a person 18 years of age or over who possesses marijuana for sale may be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code if:
(1) The person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code;
(2) The person has two or more prior convictions under subdivision (b); or
(3) The offense occurred in connection with the knowing sale or attempted sale of marijuana to a person under the age of 18 years.
(d) Notwithstanding subdivision (b), a person 21 years of age or over who possesses marijuana for sale may be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code if the offense involves knowingly hiring, employing, or using a person 20 years of age or younger in unlawfully cultivating, transporting, carrying, selling, offering to sell, giving away, preparing for sale, or peddling any marijuana.
SEC. 8.4. Section 11360 of the Health and Safety Code is amended to read:
11360. Unlawful Transportation, Importation, Sale, or Gift.
(a) Except as otherwise provided by this section or as authorized by law, every person who transports, imports into this state, sells, furnishes, administers, or gives away, or offers to transport, import into this state, sell, furnish, administer, or give away, or attempts to import into this state or transport any marijuana shall be punished as follows:
(1) Persons under the age of 18 years shall be punished in the same manner as provided in paragraph (1) of subdivision (b) of Section 11357.
marijuana, or not more than four grams of other than concentrated cannabis, upon the grounds of, or within, any school providing instruction in kindergarten or any of grades 1 through 12 during hours the school is open for classes or school-related programs is guilty of a misdemeanor an infraction and shall be punished in the same manner provided in paragraph (1) of subdivision (b). subject to the following dispositions:
(1) A fine of not more than two hundred fifty dollars ($250), upon a finding that a first offense has been committed.
(2) A fine of not more than five hundred dollars ($500), or commitment to a juvenile hall, ranch, camp, forestry camp, or secure juvenile home for a period of not more than 10 days, or both, upon a finding that a second or subsequent offense has been committed.
SEC. 8.2. Section 11358 of the Health and Safety Code is amended to read:
11358. Planting, Harvesting, or Processing.
Every person who plants, cultivates, harvests, dries, or processes any marijuana plants, or any part thereof, except as otherwise provided by law, shall be punished as follows:
(a) Every person under the age of 18 who plants, cultivates, harvests, dries, or processes any marijuana plants shall be punished in the same manner provided in paragraph (1) of subdivision (b) of Section 11357.
(b) Every person at least 18 years of age but less than 21 years of age who plants, cultivates, harvests, dries, or processes not more than six living marijuana plants shall be guilty of an infraction and a fine of not more than one hundred dollars ($100).
(c) Every person 18 years of age or over who plants, cultivates, harvests, dries, or processes more than six living marijuana plants shall be punished by imprisonment in a county jail for a period of not more than six months or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment.
(d) Notwithstanding subdivision (c), a person 18 years of age or over who plants, cultivates, harvests, dries, or processes more than six living marijuana plants, or any part thereof, except as otherwise provided by law, shall may be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code if:
(1) The person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code;
(2) The person has two or more prior convictions under subdivision (c); or
(3) The offense resulted in any of the following:
(A) Violation of Section 1052 of the Water Code relating to illegal diversion of water;
(B) Violation of Section 13260, 13264, 13272, or 13387 of the Water Code relating to discharge of waste;
(C) Violation of Fish and Game Code Section 5650 or Section 5652 of the Fish and Game Code relating to waters of the state;
(D) Violation of Section 1602 of the Fish and Game Code relating to rivers, streams and lakes;
64
206 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
(a) Records of any court of this state, any public or private agency that provides services upon referral under Section 1000.2 of the Penal Code, or of any state agency pertaining to the arrest or conviction of any person for a violation of subdivision (b), (c), (d), or (e) of Section 11357 or subdivision (b) of Section 11360, or pertaining to the arrest or conviction of any person under the age of 18 for a violation of any provision of this article except Section 11357.5, shall not be kept beyond two years from the date of the conviction, or from the date of the arrest if there was no conviction, except with respect to a violation of subdivision (e) (d) of Section 11357, or any other violation by a person under the age of 18 occurring upon the grounds of, or within, any school providing instruction in kindergarten or any of grades 1 through 12 during hours the school is open for classes or school-related programs, the records shall be retained until the offender attains the age of 18 years at which time the records shall be destroyed as provided in this section. Any court or agency having custody of the records, including the statewide criminal databases, shall provide for the timely destruction of the records in accordance with subdivision (c), and such records must also be purged from the statewide criminal databases. As used in this subdivision, “records pertaining to the arrest or conviction” shall include records of arrests resulting in the criminal proceeding and records relating to other offenses charged in the accusatory pleading, whether defendant was acquitted or charges were dismissed. The two-year period beyond which records shall not be kept pursuant to this subdivision shall not apply to any person who is, at the time at which this subdivision would otherwise require record destruction, incarcerated for an offense subject to this subdivision. For such persons, the two-year period shall begin to run from the date the person is released from custody. The requirements of this subdivision do not apply to records of any conviction occurring prior to January 1, 1976, or records of any arrest not followed by a conviction occurring prior to that date, or records of any arrest for an offense specified in subdivision (c) of Section 1192.7, or subdivision (c) of Section 667.5 of the Penal Code.
(b) This subdivision applies only to records of convictions and arrests not followed by conviction occurring prior to January 1, 1976, for any of the following offenses:
(1) Any violation of Section 11357 or a statutory predecessor thereof.
(2) Unlawful possession of a device, contrivance, instrument, or paraphernalia used for unlawfully smoking marijuana, in violation of Section 11364, as it existed prior to January 1, 1976, or a statutory predecessor thereof.
(3) Unlawful visitation or presence in a room or place in which marijuana is being unlawfully smoked or used, in violation of Section 11365, as it existed prior to January 1, 1976, or a statutory predecessor thereof.
(4) Unlawfully using or being under the influence of marijuana, in violation of Section 11550, as it existed prior to January 1, 1976, or a statutory predecessor thereof.
Any person subject to an arrest or conviction for those offenses may apply to the Department of Justice for destruction of records pertaining to the arrest or conviction if two or more years have elapsed since the date of the conviction, or since the date of the arrest if not followed by a conviction. The application shall be submitted upon a form supplied by the Department of Justice and shall be
(2) Persons 18 years of age or over shall be punished by imprisonment in a county jail for a period of not more than six months or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment.
(3) Notwithstanding paragraph (2), a person 18 years of age or over may be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for a period of two, three or four years if:
(A) The person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code;
(B) The person has two or more prior convictions under paragraph (2);
(C) The offense involved the knowing sale, attempted sale, or the knowing offer to sell, furnish, administer or give away marijuana to a person under the age of 18 years; or
(D) The offense involved the import, offer to import, or attempted import into this state, or the transport for sale, offer to transport for sale, or attempted transport for sale out of this state, of more than 28.5 grams of marijuana or more than four grams of concentrated cannabis.
(b) Except as authorized by law, every person who gives away, offers to give away, transports, offers to transport, or attempts to transport not more than 28.5 grams of marijuana, other than concentrated cannabis, is guilty of an infraction misdemeanor and shall be punished by a fine of not more than one hundred dollars ($100). In any case in which a person is arrested for a violation of this subdivision and does not demand to be taken before a magistrate, such person shall be released by the arresting officer upon presentation of satisfactory evidence of identity and giving his or her written promise to appear in court, as provided in Section 853.6 of the Penal Code, and shall not be subjected to booking.
(c) For purposes of this section, “transport” means to transport for sale.
(d) This section does not preclude or limit prosecution for any aiding and abetting or conspiracy offenses.
SEC. 8.5. Section 11361.1 is added to the Health and Safety Code, to read:
11361.1. (a) The drug education and counseling requirements under Sections 11357, 11358, 11359, and 11360 shall be:
(1) Mandatory, unless the court finds that such drug education or counseling is unnecessary for the person, or that a drug education or counseling program is unavailable;
(2) Free to participants, and the drug education provides at least four hours of group discussion or instruction based on science and evidence-based principles and practices specific to the use and abuse of marijuana and other controlled substances.
(b) For good cause, the court may grant an extension of time not to exceed 30 days for a person to complete the drug education and counseling required under Sections 11357, 11358, 11359, and 11360.
SEC. 8.6. Section 11361.5 of the Health and Safety Code is amended to read:
11361.5. Destruction of Arrest and Conviction Records; Procedure; Exceptions.
64
Text of Proposed Laws | 207
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
than two years have elapsed from the date of the conviction or arrest without conviction.
SEC. 8.7. Section 11361.8 is added to the Health and Safety Code, to read:
11361.8. (a) A person currently serving a sentence for a conviction, whether by trial or by open or negotiated plea, who would not have been guilty of an offense, or who would have been guilty of a lesser offense under the Control, Regulate and Tax Adult Use of Marijuana Act had that act been in effect at the time of the offense may petition for a recall or dismissal of sentence before the trial court that entered the judgment of conviction in his or her case to request resentencing or dismissal in accordance with Sections 11357, 11358, 11359, 11360, 11362.1, 11362.2, 11362.3, and 11362.4 as those sections have been amended or added by that act.
(b) Upon receiving a petition under subdivision (a), the court shall presume the petitioner satisfies the criteria in subdivision (a) unless the party opposing the petition proves by clear and convincing evidence that the petitioner does not satisfy the criteria. If the petitioner satisfies the criteria in subdivision (a), the court shall grant the petition to recall the sentence or dismiss the sentence because it is legally invalid unless the court determines that granting the petition would pose an unreasonable risk of danger to public safety.
(1) In exercising its discretion, the court may consider, but shall not be limited to evidence provided for in subdivision (b) of Section 1170.18 of the Penal Code.
(2) As used in this section, “unreasonable risk of danger to public safety” has the same meaning as provided in subdivision (c) of Section 1170.18 of the Penal Code.
(c) A person who is serving a sentence and is resentenced pursuant to subdivision (b) shall be given credit for any time already served and shall be subject to supervision for one year following completion of his or her time in custody or shall be subject to whatever supervision time he or she would have otherwise been subject to after release, whichever is shorter, unless the court, in its discretion, as part of its resentencing order, releases the person from supervision. Such person is subject to parole supervision under Section 3000.08 of the Penal Code or post-release community supervision under subdivision (a) of Section 3451 of the Penal Code by the designated agency and the jurisdiction of the court in the county in which the offender is released or resides, or in which an alleged violation of supervision has occurred, for the purpose of hearing petitions to revoke supervision and impose a term of custody.
(d) Under no circumstances may resentencing under this section result in the imposition of a term longer than the original sentence, or the reinstatement of charges dismissed pursuant to a negotiated plea agreement.
(e) A person who has completed his or her sentence for a conviction under Sections 11357, 11358, 11359, and 11360, whether by trial or open or negotiated plea, who would not have been guilty of an offense or who would have been guilty of a lesser offense under the Control, Regulate and Tax Adult Use of Marijuana Act had that act been in effect at the time of the offense, may file an application before the trial court that entered the judgment of conviction in his or her case to have the conviction dismissed and sealed because the prior conviction is now legally invalid or redesignated as a misdemeanor or infraction in accordance with Sections 11357, 11358,
accompanied by a fee, which shall be established by the department in an amount which will defray the cost of administering this subdivision and costs incurred by the state under subdivision (c), but which shall not exceed thirty-seven dollars and fifty cents ($37.50). The application form may be made available at every local police or sheriff’s department and from the Department of Justice and may require that information which the department determines is necessary for purposes of identification.
The department may request, but not require, the applicant to include a self-administered fingerprint upon the application. If the department is unable to sufficiently identify the applicant for purposes of this subdivision without the fingerprint or without additional fingerprints, it shall so notify the applicant and shall request the applicant to submit any fingerprints which may be required to effect identification, including a complete set if necessary, or, alternatively, to abandon the application and request a refund of all or a portion of the fee submitted with the application, as provided in this section. If the applicant fails or refuses to submit fingerprints in accordance with the department’s request within a reasonable time which shall be established by the department, or if the applicant requests a refund of the fee, the department shall promptly mail a refund to the applicant at the address specified in the application or at any other address which may be specified by the applicant. However, if the department has notified the applicant that election to abandon the application will result in forfeiture of a specified amount which is a portion of the fee, the department may retain a portion of the fee which the department determines will defray the actual costs of processing the application, provided the amount of the portion retained shall not exceed ten dollars ($10).
Upon receipt of a sufficient application, the Department of Justice shall destroy records of the department, if any, pertaining to the arrest or conviction in the manner prescribed by subdivision (c) and shall notify the Federal Bureau of Investigation, the law enforcement agency which arrested the applicant, and, if the applicant was convicted, the probation department which investigated the applicant and the Department of Motor Vehicles, of the application.
(c) Destruction of records of arrest or conviction pursuant to subdivision (a) or (b) shall be accomplished by permanent obliteration of all entries or notations upon the records pertaining to the arrest or conviction, and the record shall be prepared again so that it appears that the arrest or conviction never occurred. However, where (1) the only entries upon the record pertain to the arrest or conviction and (2) the record can be destroyed without necessarily effecting the destruction of other records, then the document constituting the record shall be physically destroyed.
(d) Notwithstanding subdivision (a) or (b), written transcriptions of oral testimony in court proceedings and published judicial appellate reports are not subject to this section. Additionally, no records shall be destroyed pursuant to subdivision (a) if the defendant or a codefendant has filed a civil action against the peace officers or law enforcement jurisdiction which made the arrest or instituted the prosecution and if the agency which is the custodian of those records has received a certified copy of the complaint in the civil action, until the civil action has finally been resolved. Immediately following the final resolution of the civil action, records subject to subdivision (a) shall be destroyed pursuant to subdivision (c) if more
64
208 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
stalks, except the resin or flowering tops extracted produced therefrom, fiber, oil, or cake, or the sterilized seed, or any component of the seed, of the plant that is incapable of germination.
(b) The possession, use, purchase, sale, cultivation, processing, manufacture, packaging, labeling, transporting, storage, distribution, use and transfer of industrial hemp shall not be subject to the provisions of this division or of Division 10 (commencing with Section 26000) of the Business and Professions Code, but instead shall be regulated by the Department of Food and Agriculture in accordance with the provisions of Division 24 (commencing with Section 81000) of the Food and Agricultural Code, inclusive.
SEC. 9.2. Section 81000 of the Food and Agricultural Code is amended to read:
81000. Definitions.
For purposes of this division, the following terms have the following meanings:
(a) “Board” means the Industrial Hemp Advisory Board.
(b) “Commissioner” means the county agricultural commissioner.
(c) “Established agricultural research institution” means a public or private institution or organization that maintains land for agricultural research, including colleges, universities, agricultural research centers, and conservation research centers. any institution that is either:
(1) A public or private institution or organization that maintains land or facilities for agricultural research, including colleges, universities, agricultural research centers, and conservation research centers; or
(2) An institution of higher education (as defined in Section 1001 of the Higher Education Act of 1965 (20 U.S.C. 1001)) that grows, cultivates or manufactures industrial hemp for purposes of research conducted under an agricultural pilot program or other agricultural or academic research.
(d) “Industrial hemp” has the same meaning as that term is defined in Section 11018.5 of the Health and Safety Code.
(e) “Secretary” means the Secretary of Food and Agriculture.
(f) “Seed breeder” means an individual or public or private institution or organization that is registered with the commissioner to develop seed cultivars intended for sale or research.
(g) “Seed cultivar” means a variety of industrial hemp.
(h) “Seed development plan” means a strategy devised by a seed breeder, or applicant seed breeder, detailing his or her planned approach to growing and developing a new seed cultivar for industrial hemp.
SEC. 9.3. Section 81006 of the Food and Agricultural Code is amended to read:
81006. Industrial Hemp Growth Limitations; Prohibitions; Imports; Laboratory Testing.
(a) (1) Except when grown by an established agricultural research institution or a registered seed breeder, industrial hemp shall be grown only as a densely planted fiber or oilseed crop, or both, in acreages of not less than five acres one-tenth of an acre at the same time and no portion of an
11359, 11360, 11362.1, 11362.2, 11362.3, and 11362.4 as those sections have been amended or added by that act.
(f) The court shall presume the petitioner satisfies the criteria in subdivision (e) unless the party opposing the application proves by clear and convincing evidence that the petitioner does not satisfy the criteria in subdivision (e). Once the applicant satisfies the criteria in subdivision (e), the court shall redesignate the conviction as a misdemeanor or infraction or dismiss and seal the conviction as legally invalid as now established under the Control, Regulate and Tax Adult Use of Marijuana Act.
(g) Unless requested by the applicant, no hearing is necessary to grant or deny an application filed under subdivision (e).
(h) Any felony conviction that is recalled and resentenced under subdivision (b) or designated as a misdemeanor or infraction under subdivision (f) shall be considered a misdemeanor or infraction for all purposes. Any misdemeanor conviction that is recalled and resentenced under subdivision (b) or designated as an infraction under subdivision (f) shall be considered an infraction for all purposes.
(i) If the court that originally sentenced the petitioner is not available, the presiding judge shall designate another judge to rule on the petition or application.
(j) Nothing in this section is intended to diminish or abrogate any rights or remedies otherwise available to the petitioner or applicant.
(k) Nothing in this and related sections is intended to diminish or abrogate the finality of judgments in any case not falling within the purview of the Control, Regulate and Tax Adult Use of Marijuana Act.
(l) A resentencing hearing ordered under the Control, Regulate and Tax Adult Use of Marijuana Act shall constitute a “post-conviction release proceeding” under paragraph (7) of subdivision (b) of Section 28 of Article I of the California Constitution (Marsy’s Law).
(m) The provisions of this section shall apply equally to juvenile delinquency adjudications and dispositions under Section 602 of the Welfare and Institutions Code if the juvenile would not have been guilty of an offense or would have been guilty of a lesser offense under the Control, Regulate and Tax Adult Use of Marijuana Act.
(n) The Judicial Council shall promulgate and make available all necessary forms to enable the filing of the petitions and applications provided in this section.
SEC. 9. Industrial Hemp.
SEC. 9.1. Section 11018.5 of the Health and Safety Code is amended to read:
11018.5. Industrial Hemp.
(a) “Industrial hemp” means a fiber or oilseed crop, or both, that is limited to nonpsychoactive types of the plant Cannabis sativa L. and the seed produced therefrom, having no more than three-tenths of 1 percent tetrahydrocannabinol (THC) contained in the dried flowering tops, whether growing or not; and that is cultivated and processed exclusively for the purpose of producing the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant;, the resin extracted from any part of the plant; and or any other every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or mature
64
Text of Proposed Laws | 209
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
shall indicate the date and location of samples taken, and shall state the Global Positioning System coordinates and total acreage of the crop. If the laboratory test report indicates a percentage content of THC that is equal to or less than three-tenths of 1 percent, the words “PASSED AS CALIFORNIA INDUSTRIAL HEMP” shall appear at or near the top of the laboratory test report. If the laboratory test report indicates a percentage content of THC that is greater than three-tenths of 1 percent, the words “FAILED AS CALIFORNIA INDUSTRIAL HEMP” shall appear at or near the top of the laboratory test report.
(5) If the laboratory test report indicates a percentage content of THC that is equal to or less than three-tenths of 1 percent, the laboratory shall provide the person who requested the testing not less than 10 original copies signed by an employee authorized by the laboratory and shall retain one or more original copies of the laboratory test report for a minimum of two years from its date of sampling.
(6) If the laboratory test report indicates a percentage content of THC that is greater than three-tenths of 1 percent and does not exceed 1 percent, the registrant that grows industrial hemp shall submit additional samples for testing of the industrial hemp grown.
(7) A registrant that grows industrial hemp shall destroy the industrial hemp grown upon receipt of a first laboratory test report indicating a percentage content of THC that exceeds 1 percent or a second laboratory test report pursuant to paragraph (6) indicating a percentage content of THC that exceeds three-tenths of 1 percent but is less than 1 percent. If the percentage content of THC exceeds 1 percent, the destruction shall take place within 48 hours after receipt of the laboratory test report. If the percentage content of THC in the second laboratory test report exceeds three-tenths of 1 percent but is less than 1 percent, the destruction shall take place as soon as practicable, but no later than 45 days after receipt of the second test report.
(8) A registrant that intends to grow industrial hemp and who complies with this section shall not be prosecuted for the cultivation or possession of marijuana as a result of a laboratory test report that indicates a percentage content of THC that is greater than three-tenths of 1 percent but does not exceed 1 percent.
(9) Established agricultural research institutions shall be permitted to cultivate or possess industrial hemp with a laboratory test report that indicates a percentage content of THC that is greater than three-tenths of 1 percent if that cultivation or possession contributes to the development of types of industrial hemp that will comply with the three-tenths of 1 percent THC limit established in this division.
(10) Except for an established agricultural research institution, a registrant that grows industrial hemp shall retain an original signed copy of the laboratory test report for two years from its date of sampling, make an original signed copy of the laboratory test report available to the department, the commissioner, or law enforcement officials or their designees upon request, and shall provide an original copy of the laboratory test report to each person purchasing, transporting, or otherwise obtaining from the registrant that grows industrial hemp the fiber, oil, cake, or seed, or any component of the seed, of the plant.
(g) If, in the Attorney General’s opinion issued pursuant to Section 8 of the act that added this division, it is determined that the provisions of this section are not sufficient to comply with federal law, the department, in
acreage of industrial hemp shall include plots of less than one contiguous acre.
(2) Registered seed breeders, for purposes of seed production, shall only grow industrial hemp as a densely planted crop in acreages of not less than one-tenth of an two acres at the same time and no portion of the acreage of industrial hemp shall include plots of less than one contiguous acre.
(3) Registered seed breeders, for purposes of developing a new California seed cultivar, shall grow industrial hemp as densely as possible in dedicated acreage of not less than one-tenth of an acre and in accordance with the seed development plan. The entire area of the dedicated acreage is not required to be used for the cultivation of the particular seed cultivar.
(b) Ornamental and clandestine cultivation of industrial hemp is prohibited. All plots shall have adequate signage indicating they are industrial hemp.
(c) Pruning and tending of individual industrial hemp plants is prohibited, except when grown by an established agricultural research institution or when the action is necessary to perform the tetrahydrocannabinol (THC) testing described in this section.
(d) Culling of industrial hemp is prohibited, except when grown by an established agricultural research institution, when the action is necessary to perform the THC testing described in this section, or for purposes of seed production and development by a registered seed breeder.
(e) Industrial hemp shall include products imported under the Harmonized Tariff Schedule of the United States (2013) of the United States International Trade Commission, including, but not limited to, hemp seed, per subheading 1207.99.03, hemp oil, per subheading 1515.90.80, oilcake, per subheading 2306.90.01, true hemp, per heading 5302, true hemp yarn, per subheading 5308.20.00, and woven fabrics of true hemp fibers, per subheading 5311.00.40.
(f) Except when industrial hemp is grown by an established agricultural research institution, a registrant that grows industrial hemp under this section shall, before the harvest of each crop and as provided below, obtain a laboratory test report indicating the THC levels of a random sampling of the dried flowering tops of the industrial hemp grown.
(1) Sampling shall occur as soon as practicable when the THC content of the leaves surrounding the seeds is at its peak and shall commence as the seeds begin to mature, when the first seeds of approximately 50 percent of the plants are resistant to compression.
(2) The entire fruit-bearing part of the plant including the seeds shall be used as a sample. The sample cut shall be made directly underneath the inflorescence found in the top one-third of the plant.
(3) The sample collected for THC testing shall be accompanied by the following documentation:
(A) The registrant’s proof of registration.
(B) Seed certification documentation for the seed cultivar used.
(C) The THC testing report for each certified seed cultivar used.
(4) The laboratory test report shall be issued by a laboratory registered with the federal Drug Enforcement Administration, shall state the percentage content of THC,
64
210 | Text of Proposed Laws
TEXT OF PROPOSED LAWS PROPOSITION 64 CONTINuED
that are in addition to the protections provided for in this act or that otherwise expand the legal rights of such employees or workers of licensees under Sections 6 to 6.3, inclusive, of this act shall be deemed to be consistent with and further the purposes and intent of this act. The Legislature may by majority vote amend, add, or repeal any provisions to further reduce the penalties for any of the offenses addressed by this act. Except as otherwise provided, the provisions of the act may be amended by a two-thirds vote of the Legislature to further the purposes and intent of the act.
SEC. 11. Construction and Intepretation.
The provisions of this act shall be liberally construed to effectuate the purposes and intent of the Control, Regulate and Tax the Adult Use of Marijuana Act; provided, however, no provision or provisions of this act shall be interpreted or construed in a manner to create a positive conflict with federal law, including the federal Controlled Substances Act, such that the provision or provisions of this act and federal law cannot consistently stand together.
SEC. 12. Severability.
If any provision in this act, or part thereof, or the application of any provision or part to any person or circumstance is held for any reason to be invalid or unconstitutional, the remaining provisions and parts shall not be affected, but shall remain in full force and effect, and to this end the provisions of this act are severable.
SEC. 13. Conflicting Initiatives.
In the event that this measure and another measure or measures concerning the control, regulation, and taxation of marijuana, medical marijuana, or industrial hemp appear on the same statewide election ballot, the provisions of the other measure or measures shall be deemed to be in conflict with this measure. In the event that this measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other measure shall be null and void.
PROPOSITION 65
This initiative measure is submitted to the people in accordance with the provisions of Section 8 of Article II of the California Constitution.
This initiative measure adds sections to the Public Resources Code; therefore, new provisions proposed to be added are printed in italic type to indicate that they are new.
PROPOSED LAW
SECTION 1. Title.
This act shall be known and may be cited as the Environmental Fee Protection Act.
SEC. 2. Findings and Declarations.
The people of the State of California find and declare as follows:
(a) In 2014, the California State Legislature enacted a ban on plastic carryout bags after lobbying by special interests including the California Grocers Association.
(b) The law further mandated that stores sell every paper or reusable carryout bag they provide to consumers for a minimum of 10 cents. Stores can charge even more if they so choose, and the grocers and retailers are specifically
consultation with the board, shall establish procedures for this section that meet the requirements of federal law.
SEC. 9.4. Section 81007 of the Food and Agricultural Code is repealed.
81007. (a) Except as provided in subdivision (b) or as necessary to perform testing pursuant to subdivision (f) of Section 81006, the possession, outside of a field of lawful cultivation, of resin, flowering tops, or leaves that have been removed from the hemp plant is prohibited.
(b) The presence of a de minimis amount, or insignificant number, of hemp leaves or flowering tops in hemp bales that result from the normal and appropriate processing of industrial hemp shall not constitute possession of marijuana.
SEC. 9.5. Section 81008 of the Food and Agricultural Code is amended to read:
81008. Attorney General Reports; Requirements.
(a) Not later than January 1, 2019, or five years after the provisions of this division are authorized under federal law, whichever is later, the Attorney General shall report to the Assembly and Senate Committees on Agriculture and the Assembly and Senate Committees on Public Safety the reported incidents, if any, of the following:
(1) A field of industrial hemp being used to disguise marijuana cultivation.
(2) Claims in a court hearing by persons other than those exempted in subdivision (f) of Section 81006 that marijuana is industrial hemp.
(b) A report submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
(c) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2023, or four years after the date that the report is due, whichever is later.
SEC. 9.6. Section 81010 of the Food and Agricultural Code is amended to read:
81010. Operation of Division.
(a) This division, and Section 221 shall not become operative unless authorized under federal law on January 1, 2017.
(b) The possession, use, purchase, sale, production, manufacture, packaging, labeling, transporting, storage, distribution, use, and transfer of industrial hemp shall be regulated in accordance with this division. The Bureau of Marijuana Control has authority to regulate and control plants and products that fit within the definition of industrial hemp but that are produced, processed, manufactured, tested, delivered, or otherwise handled pursuant to a license issued under Division 10 (commencing with Section 26000) of the Business and Professions Code.
SEC. 10. Amendment.
This act shall be broadly construed to accomplish its purposes and intent as stated in Section 3. The Legislature may by majority vote amend the provisions of this act contained in Sections 5 to 5.5, inclusive, and Sections 6 to 6.3, inclusive, to implement the substantive provisions of those sections, provided that such amendments are consistent with and further the purposes and intent of this act as stated in Section 3. Amendments to this act that enact protections for employees and other workers of licensees under Sections 6 to 6.3, inclusive, of this act
64
65
1
MEMORANDUM1
To: League of California Cities’ City Managers Department
League of California Cities’ City Attorneys Department
From: League Staff
Date: September 26, 2016
Re: The Control, Regulate and Tax Adult Use of Marijuana Act
On November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act (“AUMA” or
“Act”) will come before California voters as Proposition 64. If passed, the AUMA will legalize
the nonmedical use of marijuana by persons 21 years of age and over, and the personal
cultivation of up to six marijuana plants. In addition, the AUMA will create a state regulatory
and licensing system governing the commercial cultivation, testing, and distribution of
nonmedical marijuana, and the manufacturing of nonmedical marijuana products. The regulatory
system governing these commercial marijuana activities largely mirrors the Medical Marijuana
Regulation and Safety Act (“MMRSA”), but there are key differences. This memorandum will
provide an overview of the AUMA, highlight the ways in which the AUMA differs from the
MMRSA, and identify the issues that cities will need to take action on if the AUMA passes.
I. Overview of the AUMA
A. Personal Nonmedical Marijuana Use
The AUMA makes it legal for persons 21 years of age or older to: (1) smoke or ingest marijuana
or marijuana products; (2) possess, process, transport, purchase, obtain, or give away to persons
21 years of age or older, without any compensation, 28.5 grams of marijuana, or 8 grams of
concentrated marijuana, including as contained in marijuana products; and (3) possess, plant,
cultivate, harvest, dry or process up to six living marijuana plants for personal use.2 The AUMA
requires that marijuana in excess of 28.5 grams that is produced by plants kept pursuant to the personal
cultivation provision of the Act be kept in a locked space on the grounds of a private residence that is not
visible from a public place.3
Although persons 21 years of age or older may use and possess nonmedical marijuana under the
Act, their ability to engage in these activities is not unfettered. The AUMA prohibits the smoking
1 DISCLAIMER: These materials are not offered as or intended to be legal advice. Readers should seek the advice
of an attorney when confronted with legal issues. Attorneys should perform an independent evaluation of the issues
raised in these materials. 2 Health & Saf. Code § 11362.2(a). 3 Health & Saf. Code § 11362.2(a)(2).
1400 K Street, Suite 400 Sacramento, California 95814
Phone: 916.658.8200 Fax: 916.658.8240
www.cacities.org
2
of marijuana: (1) in any public place, except where a local jurisdiction has authorized use on the
premises of a retailer or microbusiness in accordance with Business and Professions Code
section 26200; (2) where smoking tobacco is prohibited; (3) within 1,000 feet of a school, day
care center, or youth center while children are present; and (3) while driving, or riding in the
passenger seat of, any vehicle used for transportation.4 Moreover, individuals cannot possess
marijuana on school grounds, in day care centers, or in youth centers while children are present,
or possess an open container of marijuana or marijuana products while driving, operating, or
riding in any vehicle used for transportation.5 The AUMA further provides that cities may
prohibit possession and smoking in buildings owned, leased, or occupied by the city, and that
employers, including cities, may maintain a drug and alcohol free workplace by prohibiting the
use, consumption, possession, transfer, transportation, sale, display or growth of marijuana in the
workplace.6
1. Personal Cultivation
The AUMA provides that local governments can reasonably regulate, but cannot ban, personal
indoor cultivation of up to six living marijuana plants within the person’s private residence.7 The
Act defines private residence as “a house, an apartment unit, a mobile home, or other similar
dwelling unit.”8 This includes cultivation in a greenhouse on the same property as the residence
that is not physically part of the home, as long as it is fully enclosed, secure, and not visible from
a public space.9
The AUMA completely protects the ability of local governments to regulate, and to ban, personal
outdoor cultivation operations.10 However, it purports to repeal any ordinance that bans outdoor
cultivation upon the California Attorney General’s determination that nonmedical use of
marijuana is lawful under federal law.11
B. Commercial Nonmedical Marijuana Activity
Under the AUMA, California will have a comprehensive state regulatory system for nonmedical
marijuana that governs the industry from “seed to sale.” The Bureau of Marijuana Control,
currently the Bureau of Medical Cannabis Regulation, which is within the Department of
Consumer Affairs, will have primary responsibility for administering and enforcing the
AUMA.12
The AUMA divides state licensing and enforcement responsibilities among three agencies: (1)
the Department of Consumer Affairs, which will issue licenses for marijuana the transportation,
4 Health & Saf. Code § 11362.3(7)-(8). 5 Health & Saf. Code §§ 11362.3(3), 11362.3(4). 6 Health & Saf. Code § 11362.45 (f)-(g). 7 Health & Saf. Code §§ 11362.1(a)(3), 11362.2. 8 Health & Saf. Code § 11362.2(5). 9 Health & Saf. Code § 11362.2(a)(2). 10 Health & Saf. Code § 11362.2(b)(3). 11 Health & Saf. Code § 11362.2(b)(4). 12 Bus. & Prof. Code § 26010.
3
storage, distribution, and sale of marijuana;13 (2) the Department of Food and Agriculture will
issue marijuana cultivation licenses, which will administer the provisions of the AUMA related
to the cultivation of marijuana;14 and (3) the Department of Public Health, which will issue
licenses for marijuana manufacturers and testing laboratories.15 Each of these state licensing
authorities is responsible for creating regulations governing their respective areas of
responsibility, and must begin issuing licenses by January 1, 2018.16
A state marijuana license will be valid for one year.17 A separate state license is required for each
commercial marijuana business location.18 With the exception of testing facilities, any person or
entity licensed under the AUMA may apply for and be issued more than one type of state
license.19
1. Local Control
All nonmedical marijuana businesses must have a state license.20 A state license cannot issue to
an applicant whose operations would violate the provisions of any local ordinance or
regulation.21 However a state applicant need not provide documentation that the applicant has a
local license or permit.
The AUMA does not limit the authority of a local jurisdiction to adopt and enforce local
ordinances regulating or completely prohibiting state-licensed marijuana businesses.22 Local
jurisdictions may establish “standards, requirements, and regulations regarding health and safety,
environmental protection, testing, security, food safety, and worker protections that exceed state
standards.”23
2. Local Enforcement
Like the MMRSA, the AUMA establishes a dual enforcement scheme for commercial marijuana
activities that violate either state or local laws. The state licensing authorities will enforce state
statutes and regulations. State authorities can suspend or revoke state licenses,24 pursue civil
penalties against violating businesses in an amount equal to three times the applicable licensing
fee per violation,25 or may prosecute violators criminally.26 Local authorities will be responsible
13 Bus. & Prof. Code § 26012(a)(1). 14 Bus. & Prof. Code § 26012(a)(2). 15 Bus. & Prof. Code § 26012(3). 16 Bus. & Prof. Code §§ 26012(c), 26013 (a). 17 Bus. & Prof. Code § 26050(c). 18 Bus. & Prof. Code § 26055(c). 19 Bus. & Prof. Code § 26053. 20 Bus. & Prof. Code § 26038.) 21 Bus. & Prof. Code § 26055(e). 22 Bus. & Prof. Code § 26200(a). But see, Bus. & Prof. Code §§ 19340(f), 26080(b), 26090(c) [prohibiting cities
from preventing the use of public roads to lawfully transport or deliver nonmedical marijuana]. 23 Bus. & Prof. Code § 26201. 24 Bus. & Prof. Code § 2603. 25 Bus. & Prof. Code § 26038(a) 26 Bus. & Prof. Code § 26038(c).
4
for enforcing local ordinances and regulations.27 For state-licensed facilities operating within a
city, a city may have authority to enforce state law and regulations “if delegated the power to do
so by the [B]ureau [of Marijuana Control] or a licensing authority.”28
II. Key Differences Between the AUMA and MMRSA
A. Licensing
The MMRSA established dual licensing of medical marijuana businesses, requiring both local
approval and a state license in order for a business to operate legally.29 Specifically, the MMRSA
requires applicants to provide the relevant state licensing entity with documentation proving their
compliance with local ordinances and regulations.30
The AUMA does not require an applicant to provide evidence of local permission prior to being
issued a state license.31 Instead, the AUMA prohibits state licensing entities from approving
licenses for activities that would violate local ordinances.32 Thus, state licensing officials bear
the onus of evaluating local regulatory compliance.
Under this system, the AUMA allows a nonmedical marijuana business licensed by the state to
operate within city limits unless the city’s municipal code prohibits the use. Cities that wish to
regulate or prohibit nonmedical marijuana businesses will need to do so before the State begins
issuing licenses, either by enacting a nonmedical marijuana ordinance/regulation or by amending
an existing medical marijuana ordinance/regulation to include nonmedical marijuana within its
scope.
B. License Revocation
Under the MMRSA, revocation of a local license or permit unilaterally terminates the ability of
the medical marijuana business to operate in the jurisdiction issuing the permit, until such time as
the local permitting entity reinstates it.33
Under the AUMA, if a local jurisdiction revokes a local license, permit, or authorization for a
licensee to engage in commercial marijuana activity within the local jurisdiction, the Bureau of
Marijuana Control must initiate proceedings to determine whether the state license issued should
be suspended or revoked within ten days of being notified by the local jurisdiction of the local
revocation.34 Note, however, that, even if the state license is not suspended or revoked
immediately, the business cannot operate within the local jurisdiction once local revocation
occurs.
27 Bus. & Prof. Code § 26200 (b). 28 Bus. & Prof. Code § 23202(a). 29 Bus. & Prof. Code § 19320(b). 30 Bus. & Prof. Code § 19322(a). 31 Bus. & Prof. Code § 26056. 32 Bus. & Prof. Code § 26055(e). 33 Bus. & Prof. Code § 19320(d). 34 Bus. & Prof. Code § 26200(c).
5
C. Personal, Indoor Cultivation
Under the MMRSA, local governments possess the power to regulate and completely ban
personal, indoor cultivation.35 Under the AUMA local governments can “reasonably regulate”
indoor cultivation of up to six marijuana plants for personal use, but cannot ban it.36
D. Personal Outdoor Cultivation
Under the MMRSA local governments can prohibit all outdoor cultivation. Under the AUMA
local governments can prohibit all outdoor cultivation, until such time as the Attorney General
determines that the use of nonmedical marijuana is lawful in the State of California under federal
law.37 Upon such determination, the AUMA purports to repeal all local bans on outdoor
cultivation.38
E. Amendment
Any portion of the MMRSA can be amended at any time, if there is sufficient political support
within the Legislature for making substantive changes to the regulatory structure. Under some
circumstances, an amendment to the MMRSA by the Legislature might arguably violate The
Compassionate Use Act of 1996 (adopted by the voters as Proposition 215), which
decriminalized the personal use of medical marijuana.39
Under the AUMA, the Legislature may amend Sections 5 (relating to the use of medical
marijuana for medical purposes) and 6 (relating to state licensing) and the provisions relating to
penalties by majority vote. The Legislature may amend any other provision of the Act by a 2/3
vote. Any amendment must further the purposes and intent of the AUMA. The purpose and
intent of the Act include allowing local governments to ban nonmedical marijuana businesses.
F. Taxation
The AUMA imposes new state taxes on medical and nonmedical marijuana in the following
manner:
Effective January 1, 2018, the AUMA imposes an excise tax at the rate of 15% of gross
retail sales receipts.40
o This tax will be in addition to existing state and local sales tax.41 Given that state
and local sales taxes can range from 7-10%, the combined excise tax + sales tax at
the retail level could approach 25%;
35 Health & Saf. Code § 11362.777(g); Maral v. City of Live Oak (2013) 221 Cal.App.4th 975, 984; Kirby v. County
of Fresno (2015) 242 Cal.App.4th 940, 969-970. 36 Bus. & Prof. Code § 11362.2(b)(1). 37 Bus. & Prof. Code § 11362.2(b)(4). 38 Bus. & Prof. Code § 11362.2(b)(4). 39 Health & Saf. Code § 11362.5. 40 Rev. & Tax Code § 34011(a).
6
Effective January 1, 2018, the AUMA imposes a separate cultivation tax on all harvested
marijuana as follows:42
o $9.25 per dry-weight ounce on all marijuana flowers;
o $2.75 per dry-weight ounce on all marijuana leaves;
The AUMA prohibits imposition of state and local sales taxes on medical marijuana.43
The AUMA exempts marijuana cultivated for personal use from taxation.44
The AUMA does not pre-empt local taxation.45 However, the AUMA’s estimated cumulative tax
rate of nearly 35% on the purchase of nonmedical marijuana has potentially troubling
implications for local governments. A high state tax rate by itself may depress sales and
stimulate the black market. Any local taxation of marijuana should be governed by an awareness
that a high retail sales tax rate, imposed on an industry that, until recently, has not been regulated
at all, might stimulate black market activity and compromise the anticipated yield of revenue. In
order to avoid such a result, cities might consider imposing an excise tax on discrete commercial
nonmedical marijuana activities rather than on retail sales. New taxes on marijuana require
compliance with Proposition 218.
1. Allocation of State Tax Revenues
After repaying certain state agencies for marijuana regulatory costs not covered by license fees,
and making certain grants to universities for research and development and the Governor’s
Office of Business and Economic Development, the AUMA distributes the remaining tax
revenue as follows:
60% for youth programs, substance abuse education, prevention and treatment;
20% for environmental cleanup and remediation; and
20% for state and local programs that reduce DUI and grant programs designed to reduce
negative health impacts resulting from marijuana legalization
G. Deliveries
Under the MMRSA, medical marijuana deliveries can only be made from a state-licensed
dispensary in a city, county, or city and county that does not explicitly prohibit it by local
ordinance.46 A delivery person must carry a copy of the dispensary’s state-issued license, a
government ID, and a copy of the delivery request.47 The patient or caregiver requesting the
delivery must also maintain a copy of the delivery request.48 Dispensaries and delivery people
who comply with MMRSA are immune from prosecution for marijuana transportation.49
41 Rev. & Tax Code § 34011(d). 42 Rev. & Tax Code § 34012. 43 Rev. & Tax Code § 34011(g). 44 Rev. & Tax Code § 34012(j). 45 Rev. & Tax Code § 34021. 46 Bus. & Prof. Code § 19340(a). 47 Bus. & Prof. Code §§ 19340(b)(2), 19340(d). 48 Bus. & Prof. Code § 19340(e). 49 Bus. & Prof. Code § 19317(f).
7
Under the AUMA, deliveries can be made by a state-licensed retailer, microbusiness, or
nonprofit unless they are prohibited by local ordinance.50 Although the AUMA does require a
customer requesting delivery to maintain a copy of the delivery request, there is no express
requirement that delivery people carry or maintain any records.51 Moreover, unlike the MMRSA,
the AUMA does not require that deliveries come from a dispensary. Instead, it states that
“Deliveries, as defined in this division, may only be made by a licensed retailer or microbusiness,
or a licensed nonprofit under Section 26070.5.”52 Thus, there is at least some question regarding
whether deliveries may be made from non-retail locations by retail employees.
Under both the MMRSA and the AUMA, local jurisdictions can ban or regulate deliveries within
their borders.53 However, local jurisdictions cannot prevent a delivery service from using public
roads to simply pass through its jurisdiction from a licensed dispensary to a delivery location
outside of its boundaries.54
III. Local Regulatory Options55
The AUMA preserves the authority of a city to adopt business regulations and land use
regulations for nonmedical marijuana activities.56
A. Personal Marijuana Cultivation
Under the AUMA local governments can regulate or ban all personal, outdoor cultivation, until
such time as the Attorney General determines that the use of nonmedical marijuana is lawful in
the State of California under federal law. In addition, local governments can “reasonably
regulate,” but cannot ban, personal, indoor cultivation. Nothing in the AUMA requires a city to
enact an ordinance or regulation by a certain date. However, assuming that the AUMA passes, if
a city does not have a ban or regulatory scheme governing personal, outdoor cultivation or a
regulatory scheme governing personal, indoor cultivation in place before November 9, 2016, a
person may legally engage in personal cultivation of up to six marijuana plants at his or her
private residence.
50 Bus. & Prof. Code §26090(a). 51 Bus. & Prof. Code §26090(b). 52 Bus. & Prof. Code § 26090(a). 53 Bus. & Prof. Code §§ 19340(a), 19316(a), 26200. 54 Bus. & Prof. Code §§ 19340(f), 26080(b), 26090(c). 55 For a thorough discussion of the various marijuana regulatory options that a city may consider, see McEwen,
Medical Marijuana-Revisited After New State Laws (Spring 2016) <http://www.cacities.org/Resources-
Documents/Member-Engagement/Professional-Departments/City-Attorneys/Library/2016/Spring-2016/5-2016-
Spring-Medical-Marijuana-%E2%80%93-Revisited-After>. In addition, sample ordinances may be found on the
League’s website, at: http://www.cacities.org/Policy-Advocacy/Hot-Issues/Medical-Marijuana. But note: the
regulatory schemes discussed in the McEwen paper and posted on the League’s website pertain to medical
marijuana businesses under the MMRSA and may need to be modified to comply with the requirements of the
AUMA. 56 Health & Saf. Code § 11362.2; Bus. & Prof. Code §§ 26201, 26200(a).
8
B. Nonmedical Marijuana Businesses
The AUMA recognizes a range of businesses, including dispensaries, cultivators, manufacturers,
distributors, transporters, and testing laboratories. Cities may expressly ban, adopt business
regulations, or adopt land use regulations pertaining to any or all of these businesses.
Again, the AUMA does not require a city to enact a regulatory scheme or ban by a certain date.
However, assuming that the AUMA passes in November, if a city wishes to regulate or ban
marijuana businesses before marijuana businesses may legally operate within the city, the
regulations or ban will need to take effect before the state begins issuing nonmedical marijuana
business licenses. The League anticipates that cities have until January 1, 2018 to enact bans or
regulations relating to nonmedical marijuana businesses, because: (1) nonmedical marijuana
businesses cannot operate in any city without a state license;57 (2) the state licensing agencies in
charge of implementing the AUMA have stated that they anticipate that they will not begin
issuing licenses under the MMRSA until January 2018, and it is unlikely that said agencies will
be able to begin issuing licenses under the AUMA before they begin issuing licenses under the
MMRSA; and (3) the AUMA does not require state agencies to issue licenses until January 1,
2018.58 It is not the League’s position that state licensing agencies cannot issue licenses before
January 1, 2018, just that it is unlikely that they will do so.
C. Caution Against Use of Permissive Zoning
Under a permissive zoning code, any use not enumerated in the code is presumptively prohibited,
unless an authorized city official finds that the proposed use is substantially the same in character
and intensity as those land uses listed in the code.59 Although the MMRSA upheld a city’s
authority to rely on permissive zoning to prohibit medical marijuana land uses, it is unlikely that
cities will succeed in arguing that nonmedical marijuana land uses are prohibited by permissive
zoning under the AUMA. This is so because: (1) the statutory language in the AUMA regarding
local control seems to anticipate that a city will adopt an ordinance explicitly prohibiting and/or
regulating nonmedical marijuana businesses (rather than relying on the silence of its Code to
argue for a prohibited use);60 (2) the AUMA does not contain the same protective language as the
57 Bus. & Prof. Code § 26038. 58 Bus. & Prof. Code § 26012 (c). 59 See City of Corona v. Naulls (2008) 166 Cal.App.4th 418, 433-436. See also County of Los Angeles v. Hill (2011)
192 Cal.App.4th 861, 871 [holding that “medical marijuana dispensaries and pharmacies are not ‘similarly situated’
for public health and safety purposes”]; City of Monterey v. Carrnshimba (2013) 215 Cal.App.4th 1068, 1091
[holding that a medical marijuana dispensary was not substantially similar to the listed commercial use
classifications for personal services, retail sales, pharmacies and medical supplies]; County of Tulare v. Nunes
(2013) 215 Cal.App.4th 1188, 1205 [holding that a medical marijuana collective did not qualify as an “agricultural”
land use because “marijuana is a controlled substance and is not treated as a mere crop or horticultural product under
the law”]. 60 Bus. & Prof Code § 26200 [“Nothing in this division shall be interpreted to supersede or limit the authority of a
local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including,
but not limited to, local zoning and land use requirements, business license requirements, and requirements related
9
MMRSA with respect to permissive zoning;61 and (3) the AUMA explicitly designates
nonmedical marijuana as an agricultural product—thus if a city’s permissive zoning code
authorizes agricultural uses, the city may be precluded from arguing that marijuana is
prohibited.62 Therefore, cities that wish to ban all or some nonmedical marijuana activities
should adopt express prohibitions, even if they operate under a permissive zoning code.
IV. What actions need to be taken?
At this time city officials should: (1) review the city’s municipal code; (2) consider whether they
wish to regulate the personal cultivation of nonmedical marijuana indoors; (3) consider whether
they wish to regulate or ban the personal cultivation of nonmedical marijuana outdoors; (4)
consider whether they wish to enact business regulations of nonmedical marijuana businesses;
(5) consider whether they wish to enact land use regulations of nonmedical marijuana
businesses; (6) consider whether they wish to enact local taxes on marijuana; and (7) comply
with Proposition 218 if they decide to enact local taxes on marijuana.
Cities should prioritize considering or enacting ordinances regulating personal nonmedical
marijuana cultivation, because it will be legal under state law on November 9, 2016 if the
AUMA passes, whereas nonmedical marijuana businesses will not be able to operate lawfully
until the state licensing system becomes operational (likely in late 2017). Although cultivation
for personal use will be legal as of November 9, 2016 if the AUMA is approved by voters,
local governments will not lose any regulatory authority if they do not have an ordinance in
place addressing personal cultivation before the election. Locals will retain the ability to
regulate personal cultivation and to enact related ordinances at any time after the election.
The only change the AUMA will make in this area is to prohibit local bans of indoor
cultivation for personal use. No ordinance enacted prior to the election can prevent this
change in the law.
to reducing exposure to second hand smoke, or to completely prohibit the establishment or operation of one or more
types of businesses licensed under this division within the local jurisdiction.”] (emphasis added). 61 Compare Health & Saf. Code § 11362.777(b)(3) [a “person or entity shall not submit an application for a state
license . . . if the proposed cultivation of marijuana will violate the provisions of any local ordinance or regulation,
or if medical marijuana is prohibited by the city, county, or city and county in which the cultivation is proposed to
occur, either expressly or otherwise under principles of permissive zoning”] with Bus. & Prof Code § 26205(e)
[“Licensing authorities shall not approve an application for a state license under this division if approval of the state
license will violate the provisions of any local ordinance or regulation adopted in accordance with Section 26200.”]. 62 Bus. & Prof. Code § 26067(a).