SB 118: Cannabis: licenses: criminal records.

Session Year: 2017-2018
House: Senate

Version:

(1)The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA), an initiative statute approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances.

The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. MAUCRSA generally divides responsibility for the state licensure and regulation of commercial cannabis activity among state licensing authorities depending on the type of license classification sought by the applicant. MAUCRSA authorizes licensing authorities to create new state licenses relating to commercial cannabis activity that the licensing authorities deem necessary to effectuate their duties under MAUCRSA by adopting regulations to that effect. MAUCRSA requires an applicant to electronically submit fingerprint images to the Department of Justice for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and arrests. Existing law requires the Department of Justice to provide a response to the licensing authority, as provided.

This bill would specify that the Bureau of Cannabis Control, the Department of Food and Agriculture, and the State Department of Public Health may obtain and receive, at their discretion, criminal history information from the Department of Justice and the United States Federal Bureau of Investigation for an applicant for any state license under MAUCRSA, including any license established by a licensing authority by regulation pursuant to the authority described above. The bill would require the Department of Justice to forward all requests for federal criminal history record information to the Federal Bureau of Investigation for these purposes and to review the information and compile and disseminate a response to the licensing authority.

This bill would appropriate the sum of $10,700,000 in augmentation of Item 8570-001-3288 of Section 2.00 of the Budget Act of 2017, from the Cannabis Control Fund to the Department of Food and Agriculture for state costs in the 201718 fiscal year to supply proprietary plant and package radio-frequency identification tags, to be used by licensees to track cannabis and cannabis-related products, as specified.

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

This bill would declare that its provisions implement specified substantive provisions of AUMA.

(3)This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA), an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. MAUCRSA generally divides responsibility for the state licensure and regulation of commercial cannabis activity among the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health and requires those state licensing authorities to begin issuing licenses by January 1, 2018. AUMA authorizes the Legislature to amend its provisions with a ²/₃ vote of both houses to further its purposes and intent.MAUCRSA imposes various requirements on the delivery of cannabis and cannabis products, including requiring during delivery a licensee to maintain a physical copy of the delivery request, as specified, and to make it available upon request of the licensing authority and law enforcement officers. MAUCRSA defines delivery for these purposes to mean the commercial transfer of cannabis or cannabis products to a customer and to include the use by a retailer of any technology platform owned and controlled by the retailer.This bill would revise the requirement that a licensee maintain a copy of the delivery request during delivery so that the request is not required to be physical. The bill would redefine delivery to include the use by a retailer of any technology platform regardless of whether the technology platform is owned and controlled by the retailer.MAUCRSA requires the driver of a vehicle transporting cannabis or cannabis products to be directly employed by a licensee authorized to transport cannabis or cannabis products.This bill instead would require the driver of a vehicle transporting or transferring cannabis or cannabis products to be directly employed by a licensee authorized to transport or transfer cannabis or cannabis products.MAUCRSA authorizes a person to apply for and be issued more than one license provided the licensed premises are separate and distinct.This bill would remove the condition that the licensed premises be separate and distinct.MAUCRSA prohibits licensing authorities from approving an application for a state licenses if approval will violate the provisions of a local ordinance or regulation regulating licensees. MAUCRSA authorizes an applicant to voluntarily provide proof of a license, permit, or other authorization from the local jurisdiction verifying the applicant is in compliance with the local jurisdiction. MAUCRSA requires the licensing authority to notify the local jurisdiction of an applicant, as specified, and to make certain determinations with regard to the application based on the response of the local jurisdiction.This bill would require the licensing authority to presume that an applicant that voluntarily submits a valid, unexpired license, permit, or other authorization from the local jurisdiction is in compliance with all local ordinances unless the licensing authority is notified otherwise by the local jurisdiction. The bill would require the licensing authority to notify the local jurisdiction of the submission, as specified. The bill would make the requirements on the licensing authority with regard to notifying local jurisdictions and making specified application determinations contingent upon an applicant not providing adequate proof of compliance with local law.MAUCRSA requires an application for a cultivation license submitted before January 1, 2019, to identify a source of water supply. MAUCRSA requires, if the water supply includes a diversion and the application is submitted before January 1, 2019, the application to identify the point of diversion and the maximum amount to be diverted by including a copy of one of a list of specified documents, some of which must be filed with the State Water Resources Control Board before July 1, 2017.This bill instead would require that a specified statement of water diversion and use, a pending application for a permit to appropriate water, and documentation demonstrating that the diversion is authorized under a riparian right and that no diversion occurred during a specified time period, be submitted to the State Water Resources Control Board on or before October 31, 2017, and that documentation demonstrating that the diversion is subject to certain exceptions to a specified filing requirement be submitted to the State Water Resources Control Board on or before January 1, 2019.MAUCRSA requires that a licensed medicinal cannabis manufacturer only manufacture cannabis products for sale by a medicinal cannabis retailer.This bill would repeal those provisions.MAUCRSA prohibits an adult-use cannabis licensee from allowing any person under 21 years of age on its premises.This bill would make an exception to this prohibition if the licensee holds a medicinal license and the licensed premises for the adult-use cannabis license and the medicinal license are the same.MAUCRSA authorizes a medicinal cannabis licensee to allow on its premises any person 18 years of age or older who possesses a valid government-issued identification card and either a valid physicians recommendation or a valid county-issued identification card for medicinal cannabis.This bill would additionally authorize a medicinal cannabis licensee to allow a person 21 years of age or older on its premises if the licensee holds an adult-use license and the licensed premises for the medicinal cannabis license and the adult-use license are the same. The bill would additionally authorize a medicinal cannabis licensee to allow on its premises a specified person possessing a recommendation for a person for whom he or she is a primary caregiver. The bill would authorize a medicinal cannabis licensee to sell cannabis, cannabis products, and cannabis accessories to a specified person who possesses a valid recommendation for a person for whom he or she is a primary caregiver. The bill would authorize the bureau to establish requirements for the purchase of cannabis, cannabis products, or cannabis accessories by a primary caregiver to ensure that the status of a person as a primary caregiver is verified.MAUCRSA authorizes 3 or more natural persons, who are engaged in the cultivation of a cannabis product, to form an association for the purpose of engaging in any activity in connection with a list of specified cannabis-related activities. MAUCRSA authorizes an association to enter into all necessary and proper contracts and agreements and to make all necessary and proper stipulations and arrangements with another cannabis cooperative or association that is formed in this or in any other state for the cannabis cooperative and more economical carrying on of its business or any part of its business.This bill would remove the authorization to enter into contracts and agreements and make stipulations and arrangements with another cannabis cooperative or association that is formed in another state.MAUCRSA establishes in state government a Cannabis Control Appeals Panel to review specified decisions of licensing authorities appealed by any person aggrieved by those decisions. MAUCRSA requires that the panel consist of two member appointed by the Legislature and three members appointed by the Governor, as specified. MAUCRSA authorizes the Governor to remove a member of the panel from office and authorizes the Legislature to remove a member from office for specified reasons. MAUCRSA establishes the Cannabis Control Fund. Under existing law, licensing fees received by the state licensing authorities under MAUCRSA are deposited into the Cannabis Control Fund and fine and penalty moneys collected under MAUCRSA generally deposited into the Cannabis Fines and Penalties Account within the fund.This bill would specify the Governor may only remove from office a member of the panel appointed by the Governor. The bill would require specified annual salaries to be paid to the chairperson and members of the panel. This bill would appropriate $250,000 from the Cannabis Control Fund to the Cannabis Control Appeals Panel to be used for costs associated with additional panel members provided by MAUCRSA.Existing law requires the unlawful possession of not more than 4 grams of concentrated cannabis be punished, as specified.This bill would instead require the unlawful possession of not more than 8 grams of concentrated cannabis be punished, as specified.Existing law imposes a cultivation tax on all harvested cannabis that enters the commercial market upon all cultivators. Existing law requires the tax to be due after the cannabis is harvested and enters the commercial market. Existing law defines the phrase enters the commercial market, for these purposes, as cannabis or cannabis product that has completed and complies with all quality assurance, inspection, and testing.This bill would redefine the phrase enters the commercial market as cannabis or cannabis product, except for immature cannabis plants and seeds, that completes and complies with a quality assurance review and testing.Existing law requires a cannabis retailer to provide a purchaser with an invoice, receipt, or other document that displays the cannabis excise tax separately from the price, as specified, and includes a specified statement regarding the inclusion of the cultivation and excise taxes in the total amount of the invoice.This bill would remove the requirement that the document display the cannabis excise tax separately from the price and would remove from the specified statement on the invoice that the cannabis cultivation tax is included in the total amount of the invoice. The bill would authorize the California Department of Tax and Fee Administration to prescribe other means to display the cannabis excise tax on an invoice, receipt, or other document from a cannabis retailer given to the purchaser.MAUCRSA requires the Department of Food and Agriculture, in consultation with the Bureau of Cannabis Control, to establish a track and trace program for reporting the movement of cannabis and cannabis products throughout the distribution chain that utilizes a unique identifier to be issued for each cannabis plant. Existing law requires all cultivation tax applicable to a unique identifier to be paid upon the first sale or transfer of unprocessed cannabis by a cultivator to a manufacturer, except as provided.This bill would remove the requirement that all cultivation tax applicable to a unique identifier be paid upon the first sale or transfer of unprocessed cannabis by a cultivator to a manufacturer, as specified.Existing law requires that a person required to be licensed who fails to pay the taxes imposed on cannabis be subject to a penalty of at least one-half the amount of the taxes not paid.This bill would authorize relieving a person of this penalty if the California Department of Tax and Fee Administration finds that the persons failure to make a timely return or payment is due to reasonable cause and circumstances beyond the persons control, and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect.This bill would declare that its provisions further specified purposes and intent of the AUMA.This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Discussed in Hearing