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 imposes duties on the Bureau of Cannabis Control in the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health with respect to the creation, issuance, denial, suspension, and revocation of licenses issued pursuant to MAUCRSA. MAUCRSA authorizes these licensing authorities to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, 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, which includes failure to comply with MAUCRSA.

MAUCRSA requires a licensed distributor, during transportation, to maintain a physical copy of a shipping manifest and a licensee receiving the shipment to maintain each electronic shipping manifest, and requires those manifests to be made available upon request to agents of the Department of Consumer Affairs and law enforcement officers.

Under MAUCRSA, transporting, or arranging for or facilitating the transport of, cannabis or cannabis product in violation of MAUCRSA is grounds for disciplinary action against the licensee.

This bill would prohibit a licensed distributor from transporting an amount of cannabis or cannabis products in excess of the amount stated on the shipping manifest.

This bill would prohibit a law enforcement officer from seizing cannabis or cannabis products for a violation of MAUCRSA, unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. The bill would also clarify that transportation for purposes of sale with a counterfeit shipping manifest is subject to existing provisions of criminal law relating to the unlawful transportation of cannabis and disciplinary action by the bureau.

MAUCRSA requires a licensee authorized to make deliveries to maintain a copy of the delivery request during deliveries and requires those delivery requests to be made available upon request of the licensing authority and law enforcement officers.

This bill would specify that the copy of the delivery request be physical or electronic.

This bill would authorize the bureau to prescribe citations that may be issued for the violations described above, and would prescribe the content of the citations and the method for challenging a citation. The bill would authorize the Department of the California Highway Patrol and local law enforcement agencies to issue those citations.

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, and further the purposes and intent of AUMA.

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 imposes duties on the Bureau of Cannabis Control in the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health with respect to the creation, issuance, denial, suspension, and revocation of licenses issued pursuant to MAUCRSA. MAUCRSA authorizes these licensing authorities to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, 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, which includes failure to comply with MAUCRSA.

MAUCRSA requires a licensed distributor, during transportation, to maintain a physical copy of a shipping manifest and a licensee receiving the shipment to maintain each electronic shipping manifest, and requires those manifests to be made available upon request to agents of the Department of Consumer Affairs and law enforcement officers.

Under MAUCRSA, transporting, or arranging for or facilitating the transport of, cannabis or cannabis product in violation of MAUCRSA is grounds for disciplinary action against the licensee.

This bill would prohibit a licensed distributor from transporting an amount of cannabis or cannabis products in excess of the amount stated on the shipping manifest, and would impose a fine of $500 for the first violation of this prohibition and, for each subsequent violation, would impose a fine that is incrementally increased by $50, as specified. manifest.

This bill would prohibit a law enforcement officer from seizing cannabis or cannabis products for a violation of MAUCRSA, unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. The bill would also clarify that transportation for purposes of sale with a counterfeit shipping manifest is subject to existing provisions of criminal law relating to the unlawful transportation of cannabis and disciplinary action by the bureau.

MAUCRSA requires a licensee authorized to make deliveries to maintain a copy of the delivery request during deliveries and requires those delivery requests to be made available upon request of the licensing authority and law enforcement officers.

This bill would specify that the copy of the delivery request be physical or electronic and would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation, would impose a fine that is incrementally increased by $50, as specified. electronic.

This bill would authorize the bureau to prescribe citations that may be issued for the violations described above, and would prescribe the content of the citations and the method for challenging a citation. The bill would authorize the Department of the California Highway Patrol and local law enforcement agencies to issue those citations.

AUMA authorizes the Legislature to amend its provisions with a ²/₃ vote of both houses to further its purposes and intent. 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, and further the purposes and intent of AUMA.

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 imposes duties on the Bureau of Cannabis Control in the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health with respect to the creation, issuance, denial, suspension, and revocation of licenses issued pursuant to MAUCRSA. MAUCRSA authorizes these licensing authorities to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, 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, which includes failure to comply with MAUCRSA.

MAUCRSA requires a licensed distributor, during transportation, to maintain a physical copy of a shipping manifest and a licensee receiving the shipment to maintain each electronic shipping manifest, and requires those manifests to be made available upon request to agents of the Department of Consumer Affairs and law enforcement officers.

This bill would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation would impose a fine that is incrementally increased by $50, as specified.

Under MAUCRSA, transporting, or arranging for or facilitating the transport of, cannabis or cannabis product in violation of MAUCRSA is grounds for disciplinary action against the licensee.

This bill would prohibit a licensed distributor from transporting an amount of cannabis in excess of the amount stated on the shipping manifest, and would impose a fine of $500 for the first violation of this prohibition and, for each subsequent violation, would impose a fine that is incrementally increased by $50, as specified.

This bill would prohibit a law enforcement officer from seizing cannabis for a violation of MAUCRSA, unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. The bill would also clarify that transportation for purposes of sale with a counterfeit shipping manifest is subject to existing provisions of criminal law relating to the unlawful transportation of cannabis and disciplinary action by the bureau.

MAUCRSA requires a licensee authorized to make deliveries to maintain a copy of the delivery request during deliveries and requires those delivery requests to be made available upon request of the licensing authority and law enforcement officers.

This bill would specify that the copy of the delivery request be physical or electronic and would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation, would impose a fine that is incrementally increased by $50, as specified.

Existing law establishes the Cannabis Fines and Penalties Account within the Cannabis Control Fund.

This bill would require these fine amounts to be deposited into the Cannabis Fines and Penalties Account.

AUMA authorizes the Legislature to amend its provisions with a ²/₃ vote of both houses to further its purposes and intent.

This bill would declare that its provisions further the purposes and intent of AUMA.

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 imposes duties on the Bureau of Cannabis Control in the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health with respect to the creation, issuance, denial, suspension, and revocation of licenses issued pursuant to MAUCRSA. MAUCRSA authorizes these licensing authorities to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, 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, which includes failure to comply with MAUCRSA.

MAUCRSA requires a licensed distributor, during transportation, to maintain a physical copy of a shipping manifest and a licensee receiving the shipment to maintain each electronic shipping manifest, and requires those manifests to be made available upon request to agents of the Department of Consumer Affairs and law enforcement officers.

This bill would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation would impose a fine that is incrementally increased by $50, as specified.

Under MAUCRSA, transporting, or arranging for or facilitating the transport of, cannabis or cannabis product in violation of MAUCRSA is grounds for disciplinary action against the licensee.

This bill would authorize a law enforcement officer who encounters a licensed distributor transporting an amount of cannabis or cannabis product that is significantly in excess, as defined by the bureau, of the amount stated on the shipping manifest to seize the entire shipment of cannabis or cannabis product for up to 2 days and to destroy that cannabis or cannabis product after consulting with the bureau and determining that there was a violation. prohibit a law enforcement officer from seizing cannabis for a violation of MAUCRSA, unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. The bill would also clarify that a transportation of cannabis or a cannabis product for purposes of sale with a counterfeit shipping manifest is subject to existing provisions of criminal law relating to the unlawful transportation of cannabis. cannabis and disciplinary action by the bureau.

MAUCRSA requires a licensee authorized to make deliveries to maintain a copy of the delivery request during deliveries and requires those delivery requests to be made available upon request of the licensing authority and law enforcement officers.

This bill would specify that the copy of the delivery request be physical or electronic and would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation, would impose a fine that is incrementally increased by $50, as specified.

Existing law establishes the Cannabis Fines and Penalties Account within the Cannabis Control Fund.

This bill would require these fine amounts to be deposited into the Cannabis Fines and Penalties Account.

AUMA authorizes the Legislature to amend its provisions with a ²/₃ vote of both houses to further its purposes and intent.

This bill would declare that its provisions further the purposes and intent of AUMA.

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 imposes duties on the Bureau of Cannabis Control in the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health with respect to the creation, issuance, denial, suspension, and revocation of licenses issued pursuant to MAUCRSA. MAUCRSA authorizes these licensing authorities to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, 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, which includes failure to comply with the provisions of the act. MAUCRSA.

MAUCRSA requires a licensed distributor, during transportation, to maintain a physical copy of a shipping manifest and a licensee receiving the shipment to maintain each electronic shipping manifest, and requires those manifests to be made available upon request to agents of the Department of Consumer Affairs and law enforcement officers.

This bill would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation would impose a fine that is incrementally increased by $50, as specified.

Under MAUCRSA, transporting, or arranging for or facilitating the transport of, cannabis or cannabis product in violation of MAUCRSA is grounds for disciplinary action against the licensee.

This bill would authorize a law enforcement officer who encounters a licensed distributor transporting an amount of cannabis or cannabis product that is significantly in excess, as defined by the bureau, of the amount stated on the shipping manifest to seize the entire shipment of cannabis or cannabis product for up to 2 days and to destroy that cannabis or cannabis product after consulting with the bureau and determining that there was a violation. The bill would also clarify that a transportation of cannabis or a cannabis product with a counterfeit shipping manifest is subject to existing provisions of law relating to the unlawful transportation of cannabis.

MAUCRSA requires a licensee authorized to make deliveries to maintain a copy of the delivery request during deliveries and requires those delivery requests to be made available upon request of the licensing authority and law enforcement officers.

This bill would specify that the copy of the delivery request be physical or electronic and would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation, would impose a fine that is incrementally increased by $50, as specified.

Existing law established establishes the Cannabis Fines and Penalties Account within the Cannabis Control Fund.

This bill would require these fine amounts to be deposited into the Cannabis Fines and Penalties Account.

AUMA authorizes the Legislature to amend its provisions with a ²/₃ vote of both houses to further its purposes and intent.

This bill would declare that its provisions further the purposes and intent of AUMA.

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 imposes duties on the Bureau of Cannabis Control in the Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health with respect to the creation, issuance, denial, suspension, and revocation of licenses issued pursuant to MAUCRSA. MAUCRSA authorizes these licensing authorities to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, 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, which includes failure to comply with the provisions of the act.

MAUCRSA requires a licensed distributor, during transportation, to maintain a physical copy of a shipping manifest and a licensee receiving the shipment to maintain each electronic shipping manifest, and requires those manifests to be made available upon request to agents of the Department of Consumer Affairs and law enforcement officers.

This bill would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation would impose a fine that is incrementally increased by $50, as specified.

Under MAUCRSA, transporting, or arranging for or facilitating the transport of, cannabis or cannabis product in violation of MAUCRSA is grounds for disciplinary action against the licensee. This

This bill would authorize a law enforcement officer who encounters a licensed distributor transporting an amount of cannabis or cannabis product that is significantly in excess, as defined by the bureau, of the amount stated on the shipping manifest to seize the entire shipment of cannabis or cannabis product for up to 2 days and to destroy that cannabis or cannabis product after consulting with the bureau and determining that there was a violation. The bill would also clarify that a transportation of cannabis or a cannabis product with a counterfeit shipping manifest is subject to existing provisions of law relating to the unlawful transportation of cannabis.

MAUCRSA requires the bureau to establish minimum security and safety requirements for the commercial distribution and delivery of cannabis and cannabis products.

This bill would require the bureau to furnish an identification card to all individuals transporting cannabis or cannabis products on behalf of a distributor and would require the person transporting the cannabis or cannabis product to carry a valid identification card at all times when transporting the cannabis or cannabis product.

MAUCRSA requires a licensee authorized to make deliveries to maintain a copy of the delivery request during deliveries and requires those delivery requests to be made available upon request of the licensing authority and law enforcement officers.

This bill would specify that the copy of the delivery request be physical or electronic and would impose a fine of $500 for the first violation of those requirements and, for each subsequent violation violation, would impose a fine that is incrementally increased by $50, as specified.

Existing law established the Cannabis Fines and Penalties Account within the Cannabis Control Fund.

This bill would require these fine amounts to be deposited into the Cannabis Fines and Penalties Account.

AUMA authorizes the Legislature to amend its provisions with a ²/₃ vote of both houses to further its purposes and intent.

This bill would declare that its provisions further the purposes and intent of the AUMA.

The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA), an initiative measure enacted by the approval of 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, consolidated the licensure and regulation of commercial medicinal and adult-use cannabis activities and authorizes a licensing authority to take disciplinary action against licensees. MAUCRSA provides that grounds for disciplinary action include, but are not limited to, certain actions, such as failure to comply with the provisions of MAUCRSA or any rule or regulation adopted under MAUCRSA.

This bill would make a nonsubstantive change to the provision regarding grounds for disciplinary action.

GOVERNOR'S VETO

GV Bill Id:AB 2255

Author:(Lackey)

As Enrolled Ver:September 5, 2018

2/3 vote

Original Committee Reference: B. & P.

SUMMARY: Existing law requires distributors of cannabis and cannabis products to maintain a physical shipping manifest and individuals receiving products to keep an electronic manifest, both of which must be available to law enforcement at their request. Existing law also requires licensees authorized to make deliveries to maintain a copy of the delivery request and to make it available to law enforcement upon request. Would allow law enforcement to seize and potentially destroy cannabis, in consultation with the Bureau of Cannabis Control (BCC), if a licensed distributor is found to be transporting cannabis or cannabis product that is significantly in excess of the amount stated on the shipping manifest. Clarifies that transportation of cannabis or cannabis product with a counterfeit shipping manifest is unlawful.

The Senate amendments:

1. Authorize the bureau to prescribe citations that may be issued for the violations described above, and would prescribe the content of the citations and the method for challenging a citation. The bill would authorize the Department of the California Highway Patrol and local law enforcement agencies to issue those citations.
2. Remove mandatory fine amounts for violations of this bill
3. Make other technical and clarifying changes

EXISTING LAW:

1. Establishes the Bureau of Cannabis Control, also referred to as the Bureau of Medical Cannabis Regulation (Bureau), under the Department of Consumer Affairs (DCA), to establish a comprehensive system to control and regulate the, distribution, transport, storage, processing, and sale of cannabis products. (Business and Professions Code (BPC) Section 26000 et seq.)
2. Establishes grounds for disciplinary action against licensees. (BPC Section 26030)
3. Sets requirements for licensure of marijuana related businesses. (BPC Section 26051.5)

THIS BILL:

1. Authorizes a law enforcement officer who encounters a licensed distributor transporting amounts of cannabis or cannabis product significantly in excess of the amount listed on the shipping manifest, to seize the entire shipment and potentially destroy it after consulting with the BCC.
2. Clarifies that transportation of cannabis with a counterfeit shipping manifest is a crime.
3. Requires a fine of $500 with additional penalties if a licensee fails to maintain a printed shipping manifest during transport, an electronic manifest during receipt, or a delivery order during delivery, of cannabis or cannabis products.
4. Requires the BCC to furnish an identification card to all individuals transporting cannabis or cannabis products and requires the person transporting the cannabis to make the identification card available to law enforcement upon request. Failure to do so shall be reported to the BCC, which may take administrative action.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose. This bill is author sponsored. According to the author, "Currently, there is no clarification of the consequences for a cannabis licensee's failure to present the appropriate documentation to a local or state law enforcement officer. This is problematic because law enforcement officers are unsure of what to do when they encounter a distributor or delivery driver without the appropriate documentation. This bill provides clarification and guidance to officers and will help ensure all licensed distributors and delivery drivers are reporting into the track and trace system and maintaining the appropriate shipping manifests. This bill establishes simple requirements which will assist officers in verifying licensed distribution and transportation and will help distinguish between legal and illegal activity."

Background. History of Legal Cannabis in California. In 1996, California voters passed Proposition 215, legalizing the use of medical cannabis (MC) in the state. In October 2015, nearly 20 years after the authorization of the use of MC, Governor Jerry Brown signed into law a trio of bills [AB 243 (Wood), Chapter 688, Statutes of 2015, AB 266 (Bonta, Cooley, Jones-Sawyer, Lackey, and Wood), Chapter 689, Statutes of 2015, and SB 643 (McGuire), Chapter 719, Statutes of 2015] collectively known as MCRSA. MCRSA established the state's first regulatory framework for MC. In 2016, the voters of California passed Proposition 64, the AUMA, to legalize the recreational use of cannabis in the state by 2018. In June 2017, AUMA and MCRSA were combined via the budget process to form one system for the regulation of Cannabis, MAUCRSA

GOVERNOR'S VETO MESSAGE:

This bill would authorize law enforcement agencies to issue citations for administrative violations of the Medical and Adult-Use Cannabis Regulation and Safety Act.

This bill is premature. The enforcement of the Act rests with the Bureau of Cannabis Control. It is their job to develop appropriate regulations—which they are currently doing—in partnership with the California Highway Patrol and other law enforcement entities.

If a new law is needed, I am confident that the Bureau of Cannabis Control will work with the Legislature to make the necessary changes.

Analysis Prepared by: Jimmy Fremgen / B. & P. / (916) 319-3301 FN: 0005304

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2255

Author:(Lackey)

As Amended Ver:August 20, 2018

Majority vote

Original Committee Reference: B. & P.

SUMMARY: Existing law requires distributors of cannabis and cannabis products to maintain a physical shipping manifest and individuals receiving products to keep an electronic manifest, both of which must be available to law enforcement at their request. Existing law also requires licensees authorized to make deliveries to maintain a copy of the delivery request and to make it available to law enforcement upon request. Would allow law enforcement to seize and potentially destroy cannabis, in consultation with the Bureau of Cannabis Control (BCC), if a licensed distributor is found to be transporting cannabis or cannabis product that is significantly in excess of the amount stated on the shipping manifest. Clarifies that transportation of cannabis or cannabis product with a counterfeit shipping manifest is unlawful.

The Senate amendments:

1. Authorize the bureau to prescribe citations that may be issued for the violations described above, and would prescribe the content of the citations and the method for challenging a citation. The bill would authorize the Department of the California Highway Patrol and local law enforcement agencies to issue those citations.
2. Remove mandatory fine amounts for violations of this bill
3. Make other technical and clarifying changes

EXISTING LAW:

1. Establishes the Bureau of Cannabis Control, also referred to as the Bureau of Medical Cannabis Regulation (Bureau), under the Department of Consumer Affairs (DCA), to establish a comprehensive system to control and regulate the, distribution, transport, storage, processing, and sale of cannabis products. (Business and Professions Code (BPC) Section 26000 et seq.)
2. Establishes grounds for disciplinary action against licensees. (BPC Section 26030)
3. Sets requirements for licensure of marijuana related businesses. (BPC Section 26051.5)

THIS BILL:

1. Authorizes a law enforcement officer who encounters a licensed distributor transporting amounts of cannabis or cannabis product significantly in excess of the amount listed on the shipping manifest, to seize the entire shipment and potentially destroy it after consulting with the BCC.
2. Clarifies that transportation of cannabis with a counterfeit shipping manifest is a crime.
3. Requires a fine of $500 with additional penalties if a licensee fails to maintain a printed shipping manifest during transport, an electronic manifest during receipt, or a delivery order during delivery, of cannabis or cannabis products.
4. Requires the BCC to furnish an identification card to all individuals transporting cannabis or cannabis products and requires the person transporting the cannabis to make the identification card available to law enforcement upon request. Failure to do so shall be reported to the BCC, which may take administrative action.

FISCAL EFFECT: Unknown. This bill has been keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose. This bill is author sponsored. According to the author, "Currently, there is no clarification of the consequences for a cannabis licensee's failure to present the appropriate documentation to a local or state law enforcement officer. This is problematic because law enforcement officers are unsure of what to do when they encounter a distributor or delivery driver without the appropriate documentation. This bill provides clarification and guidance to officers and will help ensure all licensed distributors and delivery drivers are reporting into the track and trace system and maintaining the appropriate shipping manifests. This bill establishes simple requirements which will assist officers in verifying licensed distribution and transportation and will help distinguish between legal and illegal activity."

Background. History of Legal Cannabis in California. In 1996, California voters passed Proposition 215, legalizing the use of medical cannabis (MC) in the state. In October 2015, nearly 20 years after the authorization of the use of MC, Governor Jerry Brown signed into law a trio of bills [AB 243 (Wood), Chapter 688, Statutes of 2015, AB 266 (Bonta, Cooley, Jones-Sawyer, Lackey, and Wood), Chapter 689, Statutes of 2015, and SB 643 (McGuire), Chapter 719, Statutes of 2015] collectively known as MCRSA. MCRSA established the state's first regulatory framework for MC. In 2016, the voters of California passed Proposition 64, the AUMA, to legalize the recreational use of cannabis in the state by 2018. In June 2017, AUMA and MCRSA were combined via the budget process to form one system for the regulation of Cannabis, MAUCRSA

Analysis Prepared by: Jimmy Fremgen / B. & P. / (916) 319-3301 FN: 0004810

 THIRD READING  

Bill No: AB 2255

Author:

:

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/18/18

AYES: Hill, Fuller, Allen, Dodd, Galgiani, Glazer, Hernandez, Pan, Wilk

SENATE PUBLIC SAFETY COMMITTEE: 7-0, 6/26/18

AYES: Skinner, Anderson, Bradford, Jackson, Mitchell, Stone, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 78-0, 5/29/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill authorizes the Bureau of Cannabis Control to prescribe the form and content of citations that may be issued for specified violations; prohibits a licensed distributor from transporting an amount of cannabis or cannabis products in excess of the amount stated on the shipping manifest; and authorizes the Department of the California Highway Patrol and local law enforcement agencies to issue citations prescribed by this bill.

Senate Floor Amendments of 8/20/18 delete provisions of the bill that conflict with the Bureau of Cannabis Control’s Disciplinary Guidelines, includes cannabis products in references to cannabis, and makes technical amendments.

ANALYSIS:

Existing law:

1. Establishes the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to establish a comprehensive system to control and regulate the cultivation, distribution, transport, storage, manufacturing, processing, and sale of both medicinal and adult-use cannabis. (Business and Professions Code (BPC) § 26000)
2. Establishes the Bureau of Cannabis Control (Bureau) within the Department of Consumer Affairs (DCA) as having the sole authority to create, issue, deny, renew, discipline, suspend, or revoke licenses for microbusinesses, transportation, storage unrelated to manufacturing activities, distribution, testing, and sale of cannabis and cannabis products within the state. (BPC §§ 26010, 26012)
3. Establishes grounds for disciplinary action, including failure to comply with the provisions of the Act or any rule or regulation adopted pursuant to this division. (BPC § 26030 (a))
4. Authorizes each licensing authority to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, after proper notice and hearing to the licensee, if the licensee is found to have committed any acts or omissions constituting grounds for disciplinary actions. (BPC §26031(a))
5. Authorizes each licensing authority to take disciplinary action against a licensee for any violation of the Act when the violation was committed by the licensee’s officers, directors, owners, agents, or employees while acting on behalf of the licensee or engaged in commercial cannabis activity. (BPC §26031(c))
6. Authorizes the Bureau to issue a citation containing an assessment of an administrative fine of up to $5,000, and/or an order of abatement fixing a reasonable time for abatement of the violation. (Title 16 California Code of Regulations (CCR) § 5802)
7. Requires the licensed distributor to maintain a physical copy of the shipping manifest during transportation and make it available upon request to agents of the DCA and law enforcement officers. (BPC § 26070 (f))
8. Requires licensee receiving the cannabis shipment to maintain each electronic shipping manifest and make it available upon request to the DCA and any law enforcement officers. (BPC § 26070 (g))
9. Requires the Bureau to consider the “Bureau of Cannabis Control Disciplinary Guidelines November 2017,” in reaching a decision on a disciplinary action under the Act and the Administrative Procedures Act. Deviation from these guidelines and orders, including the standard terms of probation, is appropriate where the Bureau in its sole discretion determines that the facts of the particular case warrant such a deviation, e.g., the presence of mitigating factors, the age of the case, or evidentiary problems. (16 CCR § 5814).

This bill:

1. Authorizes the Bureau to prescribe the form and content of citations that may be issued for specified transportation-related MAUCRSA violations.
2. Prohibits a distributor from transporting an amount of cannabis in excess, as defined by the Bureau, of the amount stated on the shipping manifest.
3. Requires a citation to include, at a minimum, all of the following:
   1. Space for the name and address of the person cited.
   2. The violation for which the citation is issued.
   3. The date, time, and location of the violation.
   4. The process for paying the fine imposed for the violation, as determined by the Bureau.
   5. The process for contesting the violation, including an Internet Web site address and telephone number.
   6. Space for the name, badge number, and signature of the citing law enforcement officer.
   7. A space for the person who is cited to sign, acknowledging receipt of the citation.
   8. Any other information required or prescribed by the Bureau.
4. Authorizes the Department of the California Highway Patrol and local law enforcement agencies to issue citations prescribed by this bill.
5. Requires the issuing officer to provide the original of the citation to the issuing law enforcement agency and a copy of the citation to the person who has been cited. The issuing law enforcement agency shall submit a copy of the citation to the Bureau in a manner prescribed by the Bureau.
6. Permits a citation issued pursuant to this bill to be challenged pursuant to the procedures prescribed in MAUCRSA.
7. Prohibits a licensed distributor from transporting an amount of cannabis or cannabis products in excess, as defined by the Bureau, of the amount stated on the shipping manifest.
8. Prohibits a law enforcement officer from seizing cannabis or cannabis products for a violation of this bill unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred.
9. States that transportation for purposes of sale with a counterfeit shipping manifest is punishable according to existing laws, including civil fines and imprisonment, and is also subject to disciplinary action by the Bureau.
10. Specifies that licensees must maintain a physical or electronic copy of the delivery request.
11. Makes legislative declarations that this bill implements and furthers the purposes and intent of the Act.
12. Makes technical changes.

Background

Cannabis regulatory background. Cannabis was first legalized in California for medical consumption by Proposition 215, also known as the Compassionate Use Act, in 1996. Proposition 215 protected qualified patients and primary caregivers from prosecution related to the possession and cultivation of cannabis for medicinal purposes.

The Legislature passed the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015. MCRSA established, for the first time, a comprehensive statewide licensing and regulatory framework for the cultivation, manufacture, transportation, testing, distribution, and sale of medicinal cannabis to be administered by the newly established Bureau within DCA, the Department of Public Health, and the Department of Food and Agriculture, with implementation relying on each agency’s area of expertise.

Shortly following the passage of MCRSA in November 2016, California voters passed Proposition 64, the "Control, Regulate and Tax Adult Use of Marijuana Act" (Proposition 64), which legalized adult-use cannabis.

Less than a year later in June 2017, the California State Legislature passed a budget trailer bill, SB 94 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2017), that integrated MCRSA with Proposition 64 to create MAUCRSA.

Existing crimes. This bill also specifically highlights that transporting cannabis with a counterfeit shipping manifest for purposes of sale is punishable according to existing laws, which includes imprisonment. This is a significant departure from the administrative fines defined in the rest of this bill. According to Legislative Counsel, however, reference to this penalty does not create a new crime, as this is already considered illegal. It is unclear why the other offenses in this bill were not included.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/17/18)

Association of Orange County Deputy Sheriffs

California Peace Officers’ Association

California Statewide Law Enforcement Association

Cannabis Distribution Association

Eaze Solutions, Inc.

Fraternal Order of Police

Hardcar Security

Long Beach Police Officers Association

River Distributing Company

Sacramento County Deputy Sheriffs’ Association

The Werc Shop

OPPOSITION: (Verified 8/17/18)

None received

ARGUMENTS IN SUPPORT: The Cannabis Distribution Association writes, “AB 2255 would prohibit a licensed distributor from transporting an amount of cannabis in excess of the amount stated on the shipping manifest …. AB 2255 would also prohibit a law enforcement officer from seizing cannabis for a violation of MAUCRSA, unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. The legal clarification this legislation also provides protects legitimate operators from having products seized unnecessarily.”

ASSEMBLY FLOOR: 78-0, 5/29/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

Prepared by:

8/21/18 18:57:47

**** END ****

 THIRD READING  

Bill No: AB 2255

Author:

:

Vote:

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/18/18

AYES: Hill, Fuller, Allen, Dodd, Galgiani, Glazer, Hernandez, Pan, Wilk

SENATE PUBLIC SAFETY COMMITTEE: 7-0, 6/26/18

AYES: Skinner, Anderson, Bradford, Jackson, Mitchell, Stone, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 78-0, 5/29/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill establishes administrative fines for violations of the Medicinal and Adult-Use Cannabis Regulation and Safety Act related to transportation violations. This bill authorizes the Bureau of Cannabis Control to prescribe the form and content of citations that may be issued for the violations described in this bill, and authorizes the Department of the California Highway Patrol and local law enforcement agencies to issue citations prescribed by this bill.

ANALYSIS:

Existing law:

1. Establishes the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to establish a comprehensive system to control and regulate the cultivation, distribution, transport, storage, manufacturing, processing, and sale of both medicinal and adult-use cannabis. (Business and Professions Code (BPC) § 26000)
2. Establishes the Bureau of Cannabis Control (Bureau) within the Department of Consumer Affairs (DCA) as having the sole authority to create, issue, deny, renew, discipline, suspend, or revoke licenses for microbusinesses, transportation, storage unrelated to manufacturing activities, distribution, testing, and sale of cannabis and cannabis products within the state. (BPC §§ 26010, 26012)
3. Establishes grounds for disciplinary action, including failure to comply with the provisions of the Act or any rule or regulation adopted pursuant to this division. (BPC § 26030 (a))
4. Authorizes each licensing authority to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, after proper notice and hearing to the licensee, if the licensee is found to have committed any acts or omissions constituting grounds for disciplinary actions. (BPC §26031(a))
5. Authorizes each licensing authority to take disciplinary action against a licensee for any violation of the Act when the violation was committed by the licensee’s officers, directors, owners, agents, or employees while acting on behalf of the licensee or engaged in commercial cannabis activity. (BPC §26031(c))
6. Requires a licensed distributor, prior to transporting cannabis or cannabis products, to complete an electronic shipping manifest, which shall include the unique identifier, and securely transmit the manifest to the Bureau and the licensee that will receive the cannabis product. (BPC § 26070 (b))
7. Requires the licensed distributor to maintain a physical copy of the shipping manifest during delivery and make it available upon request to DCA agents and law enforcement officers. The licensee receiving the shipment shall submit to the licensing authority a record verifying receipt of the shipment and the details of the shipment, and maintain each shipping manifest and make it available upon request to DCA agents and any law enforcement. (BPC § 26070)
8. States that transporting, or arranging for or facilitating the transport of, cannabis or cannabis products in violation of the Act is grounds for disciplinary action against the license. (BPC § 26070 (i))
9. Requires employees of a retailer, microbusiness, or nonprofit delivering cannabis or cannabis products to carry a copy of the licensee’s current license and a government-issued identification with a photo of the employee, such as a driver’s license. The employee shall present that license and identification upon request to state and local law enforcement, employees of regulatory authorities, and other state and local agencies enforcing this division. (BPC § 26090 (b))
10. Requires the licensee to maintain a copy of the delivery request during delivery and make it available upon request of the licensing authority and law enforcement officers. (BPC § 26090 (c))
11. Authorizes the Bureau to issue a citation containing an assessment of an administrative fine of up to $5,000, and/or an order of abatement fixing a reasonable time for abatement of the violation. (Title 16 California Code of Regulations (CCR) § 5802)
12. Requires the Bureau to consider the “Bureau of Cannabis Control Disciplinary Guidelines November 2017,” in reaching a decision on a disciplinary action under the Act and the Administrative Procedures Act. Deviation from these guidelines and orders, including the standard terms of probation, is appropriate where the Bureau in its sole discretion determines that the facts of the particular case warrant such a deviation, e.g., the presence of mitigating factors, the age of the case, or evidentiary problems. (16 CCR § 5814).

This bill:

1. Establishes the following disciplinary actions to be taken against a licensee who is found to have committed the following acts or omissions:
   1. Failure during transportation to maintain a physical copy of the shipping manifest and make it available upon request to agents of the DCA and any law enforcement officers is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
   2. Failure to maintain an electronic shipping manifest and make it available upon request to agents of the DCA and any law enforcement officers is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
   3. Failure during delivery to maintain a copy of a compliant delivery request and make it available upon request of the licensing authority and law enforcement officers as required in subdivision (c) of Section 26090 is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
   4. Transportation of an amount of cannabis in excess of the amount stated on the shipping manifest is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
      
2. Requires fines to be deposited into the Cannabis Fines and Penalties Account.
3. Authorizes the Bureau to prescribe the form and content of citations that may be issued for the violations described in this bill.
4. Requires a citation to include, at a minimum, all of the following:
   1. Space for the name and address of the person cited.
   2. The violation for which the citation is issued.
   3. The date, time, and location of the violation.
   4. The process for paying the fine imposed for the violation, as determined by the Bureau.
   5. The process for contesting the violation, including an Internet Web site address and telephone number.
   6. The date by which the violation is required to be challenged or paid, as determined by the Bureau.
   7. Space for the name, badge number, and signature of the citing law enforcement officer.
   8. A space for the person who is cited to sign, acknowledging receipt of the citation.
   9. Any other information required or prescribed by the Bureau.
5. Authorizes the Department of the California Highway Patrol and local law enforcement agencies to issue citations prescribed by this bill.
6. Requires the issuing officer to provide the original of the citation to the issuing law enforcement agency and a copy of the citation to the person who has been cited. The issuing law enforcement agency shall submit a copy of the citation to the Bureau in a manner prescribed by the Bureau.
7. Permits a citation issued pursuant to this bill to be challenged pursuant to the procedures prescribed in MAUCRSA.
8. Prohibits a licensed distributor from transporting an amount of cannabis in excess, as defined by the Bureau, of the amount stated on the shipping manifest.
9. Prohibits a law enforcement officer from seizing cannabis for a violation of this bill unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred.
10. States that transportation for purposes of sale with a counterfeit shipping manifest is punishable according to existing laws, including civil fines and imprisonment, and is also subject to disciplinary action by the Bureau.
11. Specifies that licensees must maintain a physical or electronic copy of the delivery request.
12. Makes legislative declarations that this bill furthers the purposes and intent of the Act.
13. Makes technical changes.

Background

Cannabis regulatory background. Cannabis was first legalized in California for medical consumption by Proposition 215, also known as the Compassionate Use Act, in 1996. Proposition 215 protected qualified patients and primary caregivers from prosecution related to the possession and cultivation of cannabis for medicinal purposes.

The Legislature passed the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015. MCRSA established, for the first time, a comprehensive statewide licensing and regulatory framework for the cultivation, manufacture, transportation, testing, distribution, and sale of medicinal cannabis to be administered by the newly established Bureau within DCA, the Department of Public Health, and the Department of Food and Agriculture, with implementation relying on each agency’s area of expertise.

Shortly following the passage of MCRSA in November 2016, California voters passed Proposition 64, the "Control, Regulate and Tax Adult Use of Marijuana Act" (Proposition 64), which legalized adult-use cannabis.

Less than a year later in June 2017, the California State Legislature passed a budget trailer bill, SB 94 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2017), that integrated MCRSA with Proposition 64 to create MAUCRSA.

On May 18, 2018, the Administration readopted emergency regulations implementing MAUCRSA that initially went into effect in December 2017.

Disciplinary Guidelines. Included in the regulations was a directive to the Bureau to consider the “Bureau of Cannabis Control Disciplinary Guidelines 2017 (disciplinary guidelines),” a document that sets parameters for discipline based on the cause of action. The regulations state that the guidelines are only suggestions, and the Bureau may deviate from them when it determines, in its sole discretion, that the particular case warrants a change.

The disciplinary guidelines recommend that the offenses described in this bill merit a “Tier 1” punishment, which are suggested for violations which are potentially harmful. The minimum recommended punishment is a stayed revocation, 5- to 15-day suspension, a fine (as determined by a fine formula, the minimum result of which is $1,000) or a combination of a suspension and fine. The maximum recommended punishment is revocation.

The author has not shared how the fines in this bill were developed, but they are lower than those recommended by the Disciplinary Guidelines.

Existing crimes. This bill also specifically highlights that transporting cannabis with a counterfeit shipping manifest for purposes of sale is punishable according to existing laws, which includes imprisonment. This is a significant departure from the administrative fines defined in the rest of this bill. According to Legislative Counsel, however, reference to this penalty does not create a new crime, as this is already considered illegal. It is unclear why the other offenses in this bill were not included.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/7/18)

Association of Orange County Deputy Sheriffs

California Peace Officers’ Association

California Statewide Law Enforcement Association

Cannabis Distribution Association

Eaze Solutions, Inc.

Fraternal Order of Police

Hardcar Security

Long Beach Police Officers Association

River Distributing Company

Sacramento County Deputy Sheriffs’ Association

The Werc Shop

OPPOSITION: (Verified 8/7/18)

Blackbird

ARGUMENTS IN SUPPORT: The Cannabis Distribution Association writes, “AB 2255 would prohibit a licensed distributor from transporting an amount of cannabis in excess of the amount stated on the shipping manifest, and imposes a fine of $500 for the first violation of this prohibition and, for each subsequent violation, would impose a fine that is incrementally increased by $50. AB 2255 would also prohibit a law enforcement officer from seizing cannabis for a violation of MAUCRSA, unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. The legal clarification this legislation also provides protects legitimate operators from having products seized unnecessarily.”

ARGUMENTS IN OPPOSITION: Blackbird is concerned about the severity of the penalties in this bill, stating in part that “a large distributor making thousands of deliveries across the state annually could face a substantial accumulation of fines, at $500 or more each, on a relatively small number of mistakes.” And further, “The Bureau has avoided imposing fines as a routine action. The Bureau currently has the authority to impose administrative fines on noncompliant licensees as they deem appropriate, but they do not make them mandatory as this bill would.”

ASSEMBLY FLOOR: 78-0, 5/29/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

Prepared by:

8/8/18 12:45:33

**** END ****

SENATE COMMITTEE ON PUBLIC SAFETY

Senator Nancy Skinner, Chair

2017 - 2018 Regular

Bill No: AB 2255 Hearing Date: June 26, 2018

Subject: Cannabis: Distribution: Deliveries: Violations

HISTORY

Source: Author

Prior Legislation: None

Support: California Police Chiefs Association; California Statewide Law Enforcement Association; California Peace Officers’ Association; Cannabis Distribution Association; Hardcar Security; River Distributing Company; The Werc Shop

Opposition: Blackbird Logistics

Assembly Floor Vote: 78 - 0

PURPOSE

The purpose of this bill is to establish administrative fines for violations of the Medicinal and Adult-Use Cannabis Regulation and Safety Act related to transportation violations.

Existing law establishes the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to establish a comprehensive system to control and regulate the cultivation, distribution, transport, storage, manufacturing, processing, and sale of both medicinal and adult-use cannabis. (Business and Professions Code (BPC) § 26000)

Existing law establishes the Bureau of Cannabis Control (Bureau) within the Department of Consumer Affairs (DCA) as having the sole authority to create, issue, deny, renew, discipline, suspend, or revoke licenses for microbusinesses, transportation, storage unrelated to manufacturing activities, distribution, testing, and sale of cannabis and cannabis products within the state. (BPC §§ 26010, 26012)

Existing law establishes grounds for disciplinary action, including failure to comply with the provisions of the Act or any rule or regulation adopted pursuant to this division.
(BPC § 26030 (a))

Existing law authorizes each licensing authority to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, after proper notice and hearing to the licensee, if the licensee is found to have committed any acts or omissions constituting grounds for disciplinary actions. (BPC §26031(a))

Existing law authorizes each licensing authority to take disciplinary action against a licensee for any violation of the Act when the violation was committed by the licensee’s officers, directors, owners, agents, or employees while acting on behalf of the licensee or engaged in commercial cannabis activity. (BPC §26031(c))

Existing law establishes the following license types related to the sale and distribution of cannabis and cannabis products:

1. “Retailer,” for the retail sale and delivery of cannabis or cannabis products to customers. A retailer shall have a licensed premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.
2. “Distributor,” for the distribution of cannabis and cannabis products. A distributor licensee shall be bonded and insured. (BPC § 26070 (a))

Existing law requires a licensed distributor, prior to transporting cannabis or cannabis products, to complete an electronic shipping manifest, which shall include the unique identifier, and securely transmit the manifest to the Bureau and the licensee that will receive the cannabis product. (BPC § 26070 (b))

Existing law requires the licensed distributor to maintain a physical copy of the shipping manifest during delivery and make it available upon request to DCA agents and law enforcement officers. The licensee receiving the shipment shall submit to the licensing authority a record verifying receipt of the shipment and the details of the shipment, and maintain each shipping manifest and make it available upon request to DCA agents and any law enforcement. (BPC § 26070)

Existing law states that transporting, or arranging for or facilitating the transport of, cannabis or cannabis products in violation of the Act is grounds for disciplinary action against the license. (BPC § 26070 (i))

Existing law requires employees of a retailer, microbusiness, or nonprofit delivering cannabis or cannabis products to carry a copy of the licensee’s current license and a government-issued identification with a photo of the employee, such as a driver’s license. The employee shall present that license and identification upon request to state and local law enforcement, employees of regulatory authorities, and other state and local agencies enforcing this division. (BPC § 26090 (b))

Existing law requires the licensee to maintain a copy of the delivery request during delivery and make it available upon request of the licensing authority and law enforcement officers. The delivery request documentation shall comply with state and federal law regarding the protection of confidential medical information. (BPC § 26090 (c))

Existing law requires a distributor, prior to transporting cannabis goods, to generate a shipping manifest through the track and trace system for the following activities:

1. Testing and sampling;
2. Sale of cannabis goods to a licensee;
3. Destruction or disposal of cannabis goods;
4. Any other activity, as required by the Bureau or by any other licensing authority. (Title 16, Code of California Regulations (CCR) § 5314 (a))

Existing law authorizes the Bureau to issue a citation containing an assessment of an administrative fine of up to $5,000, and/or an order of abatement fixing a reasonable time for abatement of the violation. (16 CCR § 5802)

Existing law requires the Bureau to consider the “Bureau of Cannabis Control Disciplinary Guidelines November 2017,” in reaching a decision on a disciplinary action under the Act and the Administrative Procedures Act. Deviation from these guidelines and orders, including the standard terms of probation, is appropriate where the Bureau in its sole discretion determines that the facts of the particular case warrant such a deviation, e.g., the presence of mitigating factors, the age of the case, or evidentiary problems. (16 CCR § 5814).

Existing law states that, except as otherwise provided 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 cannabis shall be punished as follows:

1. Provides that persons under the age of 18 years shall be punished in a different manner, as specified, as those over 18.
2. Provides that 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, or by both such fine and imprisonment.
3. Provides that a person 18 years of age or over may be punished by imprisonment pursuant provisions of the Penal Code for a period of two, three, or four years for specified aggravating circumstances.
4. Provides that 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 cannabis, other than concentrated cannabis, is guilty of an infraction and shall be punished by a fine of not more than one hundred dollars. In any case in which a person is arrested for a violation of this law and does not demand to be taken before a magistrate, that 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 specified, and shall not be subjected to booking. (Health and Safety Code § 11360)

This bill prohibits a law enforcement officer from seizing cannabis for a violation of this bill unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred.

This bill establishes the following disciplinary actions to be taken against a licensee who is found to have committed the following acts or omissions:

1. Failure during transportation to maintain a physical copy of the shipping manifest and make it available upon request to agents of the DCA and any law enforcement officers is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
2. Failure to maintain an electronic shipping manifest and make it available upon request to agents of the DCA and any law enforcement officers is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
3. Failure during delivery to maintain a copy of a compliant delivery request and make it available upon request of the licensing authority and law enforcement officers as required in subdivision (c) of Section 26090 is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
4. Transportation of an amount of cannabis in excess of the amount stated on the shipping manifest is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
   

This bill requires fines to be deposited into the Cannabis Fines and Penalties Account.

This bill prohibits a licensed distributor from transporting an amount of cannabis in excess, as defined by the Bureau, of the amount stated on the shipping manifest.

This bill states that transportation for purposes of sale with a counterfeit shipping manifest is punishable according to existing laws, including civil fines and imprisonment, and is also subject to disciplinary action by the Bureau.

This bill specifies that licensees must maintain a physical or electronic copy of the delivery request.

This bill makes Legislative declarations that this bill furthers the purposes and intent of the Act.

This bill makes technical changes.

COMMENTS

1. Need for This Bill

According to the author:

Currently, there is no clarification of the consequences for a cannabis licensee’s failure to present the appropriate documentation to a local or state law enforcement officer. This is problematic because law enforcement officers are unsure of what to do when they encounter a distributor or delivery driver without the appropriate documentation. This bill provides clarification and guidance to officers and will help ensure all licensed distributors and delivery drivers are reporting into the track and trace system and maintaining the appropriate shipping manifests. This bill establishes simple requirements which will assist officers in verifying license distribution and transportation and will help distinguish between legal and illegal activity.

2. Cannabis Regulatory Background

Cannabis was first legalized in California for medical consumption by Proposition 215, also known as the Compassionate Use Act, in 1996. Proposition 215 protected qualified patients and primary caregivers from prosecution related to the possession and cultivation of cannabis for medicinal purposes.

The Legislature passed the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015. MCRSA established, for the first time, a comprehensive statewide licensing and regulatory framework for the cultivation, manufacture, transportation, testing, distribution, and sale of medicinal cannabis to be administered by the newly established Bureau within Department of Consumer Affairs, the Department of Public Health, and the Department of Food and Agriculture, with implementation relying on each agency’s area of expertise.

Shortly following the passage of MCRSA in November 2016, California voters passed Proposition 64, the "Control, Regulate and Tax Adult Use of Marijuana Act" (Prop 64), which legalized adult-use cannabis.

Less than a year later in June 2017, the California State Legislature passed a budget trailer bill, SB 94 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2017), that integrated MCRSA with Prop 64 to create MAUCRSA.

On May 18, 2018, the Administration readopted emergency regulations implementing MAUCRSA that initially went into effect in December 2017.

3. Seizure of Cannabis for a Violation of the Medicinal and Adult-Use Cannabis Regulation Act.

The Fourth Amendment of the United States Constitution protects the right of people to be secure in their persons, property, and documentation from unreasonable searches and seizures unless permitted by warrants upon probable cause. Article 1, Section 13 of the California Constitution declares that,

The right of the people to be secure in their persons, houses, papers, and effects against unreasonable seizures and searches may not be violated; and a warrant may not issue except on probable cause, supported by oath or affirmation, particularly describing the place to be searched and the persons and things to be seized.^[1]

The Supreme Court affirmed in Agnello v. United States that searches conducted without warrants have been held unlawful “notwithstanding facts unquestionably showing probable cause” (Agnello v. U.S. (1925) 269 U. S. 20, 269 U. S. 33). Katz v. U.S. further emphasized that searches and seizers without a warrant issued by a judge or magistrate are considered to be unreasonable (Katz v. U.S. (1967) 389 U.S. 347, 357).

This bill provides that a law enforcement officer shall not seize cannabis for a violation of the MAUCRSA unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. This would not allow seizure merely for a violation of the civil and licensing provisions of MAURCRSA they would need to have additional evidence that a crime has been committed. However, there are criminal penalties for transporting cannabis illegally or for suing a counterfeit shipping manifest so these could be the basis for seizure under this section. Is it appropriate to allow seizure for these offenses?

4. Civil Penalties for Licensing Violations

This bill imposes civil penalties for MAUCRSA violations. The appropriateness of these penalties were discussed in and are the jurisdiction of the Senate Committee on Business Professions and Economic Development.

-- END –

1. “Law Section,” accessed June 11, 2018, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%2013.&article=I. ↑

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Jerry Hill, Chair

2017 - 2018 Regular

Bill No: Hearing Date: June 18, 2018

Subject:

SUMMARY:

Establishes administrative fines for violations of the Medicinal and Adult-Use Cannabis Regulation and Safety Act related to transportation violations.

Existing law:

1. Establishes the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to establish a comprehensive system to control and regulate the cultivation, distribution, transport, storage, manufacturing, processing, and sale of both medicinal and adult-use cannabis. (Business and Professions Code (BPC) § 26000)
2. Establishes the Bureau of Cannabis Control (Bureau) within the Department of Consumer Affairs (DCA) as having the sole authority to create, issue, deny, renew, discipline, suspend, or revoke licenses for microbusinesses, transportation, storage unrelated to manufacturing activities, distribution, testing, and sale of cannabis and cannabis products within the state. (BPC §§ 26010, 26012)
3. Establishes grounds for disciplinary action, including failure to comply with the provisions of the Act or any rule or regulation adopted pursuant to this division.
   (BPC § 26030 (a))
4. Authorizes each licensing authority to suspend, revoke, place on probation with terms and conditions, or otherwise discipline licenses issued by that licensing authority and fine a licensee, after proper notice and hearing to the licensee, if the licensee is found to have committed any acts or omissions constituting grounds for disciplinary actions. (BPC §26031(a))
5. Authorizes each licensing authority to take disciplinary action against a licensee for any violation of the Act when the violation was committed by the licensee’s officers, directors, owners, agents, or employees while acting on behalf of the licensee or engaged in commercial cannabis activity. (BPC §26031(c))
6. Establishes the following license types related to the sale and distribution of cannabis and cannabis products:
   1. “Retailer,” for the retail sale and delivery of cannabis or cannabis products to customers. A retailer shall have a licensed premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.
   2. “Distributor,” for the distribution of cannabis and cannabis products. A distributor licensee shall be bonded and insured. (BPC § 26070 (a))
7. Requires a licensed distributor, prior to transporting cannabis or cannabis products, to complete an electronic shipping manifest, which shall include the unique identifier, and securely transmit the manifest to the Bureau and the licensee that will receive the cannabis product. (BPC § 26070 (b))
8. Requires the licensed distributor to maintain a physical copy of the shipping manifest during delivery and make it available upon request to DCA agents and law enforcement officers. The licensee receiving the shipment shall submit to the licensing authority a record verifying receipt of the shipment and the details of the shipment, and maintain each shipping manifest and make it available upon request to DCA agents and any law enforcement. (BPC § 26070)
9. States that transporting, or arranging for or facilitating the transport of, cannabis or cannabis products in violation of the Act is grounds for disciplinary action against the license. (BPC § 26070 (i))
10. Requires employees of a retailer, microbusiness, or nonprofit delivering cannabis or cannabis products to carry a copy of the licensee’s current license and a government-issued identification with a photo of the employee, such as a driver’s license. The employee shall present that license and identification upon request to state and local law enforcement, employees of regulatory authorities, and other state and local agencies enforcing this division. (BPC § 26090 (b))
11. Requires the licensee to maintain a copy of the delivery request during delivery and make it available upon request of the licensing authority and law enforcement officers. The delivery request documentation shall comply with state and federal law regarding the protection of confidential medical information. (BPC § 26090 (c))
12. Requires a distributor, prior to transporting cannabis goods, to generate a shipping manifest through the track and trace system for the following activities:
    1. Testing and sampling;
    2. Sale of cannabis goods to a licensee;
    3. Destruction or disposal of cannabis goods;
    4. Any other activity, as required by the Bureau or by any other licensing authority. (Title 16, Code of California Regulations (CCR) § 5314 (a))
13. Authorizes the Bureau to issue a citation containing an assessment of an administrative fine of up to $5,000, and/or an order of abatement fixing a reasonable time for abatement of the violation. (16 CCR § 5802)
14. Requires the Bureau to consider the “Bureau of Cannabis Control Disciplinary Guidelines November 2017,” in reaching a decision on a disciplinary action under the Act and the Administrative Procedures Act. Deviation from these guidelines and orders, including the standard terms of probation, is appropriate where the Bureau in its sole discretion determines that the facts of the particular case warrant such a deviation, e.g., the presence of mitigating factors, the age of the case, or evidentiary problems. (16 CCR § 5814).
15. States that, except as otherwise provided 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 cannabis shall be punished as follows:
    1. Persons under the age of 18 years shall be punished in a different manner, as specified, as those over 18.
    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, or by both such fine and imprisonment.
    3. A person 18 years of age or over may be punished by imprisonment pursuant provisions of the Penal Code for a period of two, three, or four years for specified aggravating circumstances.
    4. 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 cannabis, other than concentrated cannabis, is guilty of an infraction and shall be punished by a fine of not more than one hundred dollars. In any case in which a person is arrested for a violation of this law and does not demand to be taken before a magistrate, that 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 specified, and shall not be subjected to booking. (Health and Safety Code § 11360)

This bill:

1. Establishes the following disciplinary actions to be taken against a licensee who is found to have committed the following acts or omissions:
   1. Failure during transportation to maintain a physical copy of the shipping manifest and make it available upon request to agents of the DCA and any law enforcement officers is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
   2. Failure to maintain an electronic shipping manifest and make it available upon request to agents of the DCA and any law enforcement officers is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
   3. Failure during delivery to maintain a copy of a compliant delivery request and make it available upon request of the licensing authority and law enforcement officers as required in subdivision (c) of Section 26090 is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
   4. Transportation of an amount of cannabis in excess of the amount stated on the shipping manifest is punishable by a fine of five hundred dollars ($500) for the first violation, a fine of five hundred fifty dollars ($550) for the second violation, and a fine of six hundred dollars ($600) for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by fifty dollars ($50) from the fine imposed for the previous violation.
      
2. Requires fines to be deposited into the Cannabis Fines and Penalties Account.
3. Prohibits a licensed distributor from transporting an amount of cannabis in excess, as defined by the Bureau, of the amount stated on the shipping manifest.
4. Prohibits a law enforcement officer from seizing cannabis for a violation of this bill unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred.
5. States that transportation for purposes of sale with a counterfeit shipping manifest is punishable according to existing laws, including civil fines and imprisonment, and is also subject to disciplinary action by the Bureau.
6. Specifies that licensees must maintain a physical or electronic copy of the delivery request.
7. Makes Legislative declarations that this bill furthers the purposes and intent of the Act.
8. Makes technical changes.

FISCAL EFFECT:

This bill is keyed fiscal by the Legislative Counsel. According to the Assembly Appropriations Committee analysis dated May 23, 2018, this bill has minor and absorbable one-time and ongoing costs to the Bureau (Cannabis Control Fund) to define excess amount of cannabis and enforce this law, as necessary.

COMMENTS:

1. Purpose. This bill is Author sponsored. According to the Author’s office, “Currently, there is no clarification of the consequences for a cannabis licensee’s failure to present the appropriate documentation to a local or state law enforcement officer. This is problematic because law enforcement officers are unsure of what to do when they encounter a distributor or delivery driver without the appropriate documentation.”
2. Cannabis Regulatory Background. Cannabis was first legalized in California for medical consumption by Proposition 215, also known as the Compassionate Use Act, in 1996. Proposition 215 protected qualified patients and primary caregivers from prosecution related to the possession and cultivation of cannabis for medicinal purposes.

The Legislature passed the Medical Cannabis Regulation and Safety Act (MCRSA) in 2015. MCRSA established, for the first time, a comprehensive statewide licensing and regulatory framework for the cultivation, manufacture, transportation, testing, distribution, and sale of medicinal cannabis to be administered by the newly established Bureau within Department of Consumer Affairs, the Department of Public Health, and the Department of Food and Agriculture, with implementation relying on each agency’s area of expertise.

Shortly following the passage of MCRSA in November 2016, California voters passed Proposition 64, the "Control, Regulate and Tax Adult Use of Marijuana Act" (Prop 64), which legalized adult-use cannabis.

Less than a year later in June 2017, the California State Legislature passed a budget trailer bill, SB 94 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2017), that integrated MCRSA with Prop 64 to create MAUCRSA.

On May 18, 2018, the Administration readopted emergency regulations implementing MAUCRSA that initially went into effect in December 2017.

1. Disciplinary Guidelines. Included in the regulations was a directive to the Bureau to consider the “Bureau of Cannabis Control Disciplinary Guidelines 2017 (disciplinary guidelines),” a document that sets parameters for discipline based on the cause of action. The regulations state that the guidelines are only suggestions, and the Bureau may deviate from them when it determines, in its sole discretion, that the particular case warrants a change.

The disciplinary guidelines recommend that the offenses described in this bill merit a “Tier 1” punishment, which are suggested for violations which are potentially harmful. The minimum recommended punishment is a stayed revocation, 5 to 15-day suspension, a fine (as determined by a fine formula, the minimum result of which is $1,000) or a combination of a suspension and fine. The maximum recommended punishment is revocation.

The Author has not shared how the fines in this bill were developed, but they are lower than those recommended by the Disciplinary Guidelines.

1. Existing crimes. This bill also specifically highlights that transporting cannabis with a counterfeit shipping manifest for purposes of sale is punishable according to existing laws, which includes imprisonment. This is a significant departure from the administrative fines defined in the rest of this bill. According to Legislative Counsel, however, reference to this penalty does not create a new crime, as this is already considered illegal. It is unclear why the other offenses in this bill were not included.
2. Related Legislation. SB 1451 (Fuller) of 2018 establishes minimum penalties within the recommendations of the Disciplinary Guidelines for cannabis licensees who furnish cannabis or cannabis products to unauthorized individuals. (Status: This bill is currently pending in the Assembly Business and Professions Committee.)
3. Arguments in Support. The Cannabis Distribution Association writes, “AB 2255 would prohibit a licensed distributor from transporting an amount of cannabis in excess of the amount stated on the shipping manifest, and imposes a fine of $500 for the first violation of this prohibition and, for each subsequent violation, would impose a fine that is incrementally increased by $50. AB 2255 would also prohibit a law enforcement officer from seizing cannabis for a violation of MAUCRSA, unless the seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred. The legal clarification this legislation also provides protects legitimate operators from having products seized unnecessarily.”
4. Arguments in Opposition. Blackbird is concerned about the severity of the penalties in this bill, stating in part that “a large distributor making thousands of deliveries across the state annually could face a substantial accumulation of fines, at $500 or more each, on a relatively small number of mistakes.” And further, “The Bureau has avoided imposing fines as a routine action. The Bureau currently has the authority to impose administrative fines on noncompliant licensees as they deem appropriate, but they do not make them mandatory as this bill would.”

NOTE:

Double-referral to Committee on Senate Public Safety, second.

SUPPORT AND OPPOSITION:

Support:

California Peace Officers’ Association

Cannabis Distribution Association

Eaze Solutions, Inc.

Opposition:

Blackbird

-- END --

Date of Hearing: May 23, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2255

Author:(Lackey) – As Amended Ver:April 26, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill establishes fines and penalties for unauthorized distribution of cannabis. Specifically, this bill:

1. Prohibits the transportation of an excess amount of cannabis and requires distributors to maintain necessary shipping documents. The bill also requires the Bureau of Cannabis Control to define what constitutes an excess amount.
2. Establishes fines for failure to maintain shipping manifests and copies of delivery requests, as well as for transportation of an excess amount of cannabis, and provides fines are deposited in the Cannabis Fines and Penalties Account.
3. Prohibits a law enforcement officer from seizing cannabis for specified cannabis transport violations unless otherwise authorized by law or if an officer has probable cause to believe a criminal violation has occurred.
4. Provides that transportation with a counterfeit shipping manifest for purposes of sale is punishable by a fine or jail time, and is also subject to disciplinary action by the bureau.

FISCAL EFFECT:

Minor and absorbable one-time and ongoing costs to the Bureau of Cannabis Control (Cannabis Control Fund) to define excess amount of cannabis and enforce this law, as necessary.

COMMENTS:

1. Purpose. According to the author, this bill provides guidance to public safety officers and will help ensure all licensed distributors and delivery drivers report into state tracking systems and maintain the appropriate shipping manifests.
2. Background. In 1996, California voters passed Proposition 215, legalizing the use of medical cannabis in the state. SB 847 (Vasconcellos), Chapter 750, Statutes of 1999, established the UC Center for Medical Cannabis Research, which this bill renames to the California Cannabis Research Program. The state began regulating cannabis in 2016 and later that year California voters passed Proposition 64, which legalized the recreational use of cannabis beginning this year. The state began issuing licenses for cannabis businesses on January 1, 2018. The Bureau of Cannabis Control and other departments share regulatory authority over various parts of the cannabis industry.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing:

Counsel: David Billingsley

ASSEMBLY COMMITTEE ON PUBLIC SAFETY

Reginald Byron Jones-Sawyer, Sr., Chair

ABPCA Bill Id:AB 2255

Author:(Lackey) – As Amended Ver:April 16, 2018

As Proposed to be Amended in Committee

SUMMARY: Establishes a fine schedule for regulatory violations regarding the manifests that are required when cannabis is transported for commercial purposes by licensed distributors. Clarifies that transportation of cannabis for purposes of sale with a counterfeit shipping manifest is unlawful, and punishable under existing law.

Specifically, this bill:

1. States that failure of a licensed cannabis distributor to maintain a physical copy of the shipping manifest and make it available upon request to agents of the Department of Consumer Affairs and any law enforcement officers, as specified, during transportation of cannabis, is punishable by a fine.
   
2. Provides that failure of a licensed cannabis distributor to maintain an electronic shipping manifest and make it available upon request to agents of the Department of Consumer Affairs and any law enforcement officers as specified, is punishable by a fine.
   
3. States that failure of a licensed cannabis distributor to maintain a copy of a compliant delivery request during delivery and make it available upon request of the licensing authority and law enforcement officers is punishable by a fine.
   
4. Specifies that transportation of an amount of cannabis in excess, as defined by the bureau, of the amount, stated on the shipping manifest is punishable by a fine.
   
5. Establishes a fine schedule for the violations described above as $500 for the first violation, a fine of $550 for the second violation, and a fine of $600 for the third violation. Each subsequent violation after the third violation shall be subject to a fine that is incrementally increased by $50 from the fine imposed for the previous violation.
   
6. States that fines collected pursuant to this bill shall be deposited into the Cannabis Fines and Penalties Account, as specified.
   
7. Clarifies that transportation of cannabis or cannabis product, for purposes of sale, with a counterfeit shipping manifest is a crime.
8. Requires a fine of $500 with additional penalties if a licensee fails to maintain a printed shipping manifest during transport, an electronic manifest during receipt, or a delivery order during delivery, of cannabis or cannabis products.

EXISTING LAW:

1. Establishes the Bureau of Cannabis Control, also referred to as the Bureau of Medical Cannabis Regulation (Bureau), under the Department of Consumer Affairs (DCA), to establish a comprehensive system to control and regulate the, distribution, transport, storage, processing, and sale of cannabis products. (Business and Professions Code (BPC) Section 26000 et seq.)
   
2. Establishes grounds for disciplinary action against licensees. (BPC Section 26030)
   
3. Sets requirements for licensure of marijuana related businesses. (BPC Section 26051.5)
   
4. Requires that prior to transporting cannabis or cannabis products, a licensed distributor do both of the following: (Business and Prof. Code, § 26070, subd. (e)(1)-(2).)
   
   1. Complete an electronic shipping manifest as prescribed by the licensing authority. The shipping manifest shall include the unique identifier, issued by the Department of Food and Agriculture for the original cannabis product; and
      
   2. Securely transmit the manifest to the bureau and the licensee that will receive the cannabis product. The bureau shall inform the Department of Food and Agriculture of information pertaining to commercial cannabis activity for the purpose of the track and trace program.
      
5. Requires that during transportation, the licensed distributor maintain a physical copy of the shipping manifest and make it available upon request to agents of the Department of Consumer Affairs and law enforcement officers. (Business and Prof. Code, § 26070, subd. (f).)
   
6. Requires the licensee receiving the shipment to maintain each electronic shipping manifest and shall make it available upon request to the Department of Consumer Affairs and any law enforcement officers. (Business and Prof. Code, § 26070, subd. (g).
   
7. States that upon receipt of the transported shipment, the licensee receiving the shipment shall submit to the licensing authority a record verifying receipt of the shipment and the details of the shipment. ((Business and Prof. Code, § 26070, subd. (h).)
8. States that it shall not be a violation of state or local law, for persons 21 years of age or older to: (Health and Saf., § 11362.1, subd. (a)(1)-(5).)
   
   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.
      
9. States that except as authorized by law, every person 18 years of age or older, who transports or imports into this state or attempts to import into this state or transport any cannabis shall be punished as follows: (Health and Saf. Code, § 11360, subd (a)(2)-(3).)
   
   1. 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; or
      
   2. Persons 18 years of age or over may be punished by imp period of two, three, or four years in county jail (realignment) if:
      
      1. The person has one or more prior convictions for specified serious felony offenses or is required to register as a sex offender;
         
      2. The person has two or more prior convictions for unlawful sale of more than one ounce of marijuana;
         
      3. The offense involved the knowing sale, attempted sale, or the knowing offer to sell, furnish, administer, or give away cannabis to a person under the age of 18 years; or
         
      4. 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 cannabis or more than four grams of concentrated cannabis.
10. Established a joint state-local agency licensing and regulatory framework for medical cannabis under the Medical Cannabis Regulation and Control Act. (Business and Prof. Code, §§ 19300-19355.)
    
11. States that the actions of a licensee, its employees, and its agents 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 if they are all of the following: (Business and Prof. Code, § 26032, subd. (a)(1)-(3).)
    
    1. Permitted pursuant to a state license;
       
    2. Permitted pursuant to a local authorization, license, or permit issued by the local jurisdiction, if any; and,
       
    3. Conducted in accordance with the requirements of this division and regulations adopted pursuant to this division.
       
12. States that 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, as specified. (Business and Prof. Code, § 26038.)

FISCAL EFFECT:

Unknown

COMMENTS:

1. Author's Statement: According to the author, “Currently, there is no clarification of the consequences for a cannabis licensee’s failure to present the appropriate documentation to a local or state law enforcement officer. This is problematic because law enforcement officers are unsure of what to do when they encounter a distributor or delivery driver without the appropriate documentation. This bill provides clarification and guidance to officers and will help ensure all licensed distributors and delivery drivers are reporting into the track and trace system and maintaining the appropriate shipping manifests. This bill establishes simple requirements which will assist officers in verifying licensed distribution and transportation and will help distinguish between legal and illegal activity.”
   
2. Proposition 215, Medical Marijuana: Proposition 215, the California Compassionate Use Act, was enacted by the voters and took effect on Nov. 6, 1996 as California Health & Safety Code 11362.5. The law makes it legal for patients and their designated primary caregivers to possess and cultivate marijuana for their personal medical use if they have the recommendation or approval of a California-licensed physician.

SB 420, a legislative statute, went into effect on January 1, 2004 as California H&SC 11362.7-.83. This law broadens Prop. 215 to transportation and other offenses in certain circumstances; allows patients to form medical cultivation “collectives” or “cooperatives”; and establishes a voluntary state ID card system run through county health departments.

In 2015, the California Legislature passed the Medical Marijuana Regulation and Safety Act (MMRSA or MCRSA), establishing permitting for marijuana cultivation and dispensaries, etc. at the state level (with local approval). (http://www.canorml.org/medical-marijuana/patients-guide-to-california-law)

1. Proposition 64 (Adult Use of Marijuana Act) was passed by the voters on November 8, 2016: As a result of the passage of Proposition 64, adults, aged 21 years or older, are allowed to possess and use marijuana for recreational purposes. The measure created two new taxes, one levied on cultivation and the other on retail price. Revenue from the taxes will be spent on drug research, treatment, and enforcement, health and safety grants addressing marijuana, youth programs, and preventing environmental damage resulting from illegal marijuana production.
   
   Proposition 64 allows adults to possess up to an ounce of marijuana.  Adults are also allowed to cultivate up to six marijuana plants inside their homes. Marijuana packaging is now required to provide the net weight, origin, age, and type of the product, as well as the milligram amount per serving of tetrahydrocannabinol and other cannabinoids.
   
   The Bureau of Cannabis Control has the authority to issue, discipline, suspend, or revoke licenses for transportation, storage unrelated to manufacturing activities, distribution, testing, and sale of cannabis and cannabis products within the state. (Business and Prof. Code, § 26012, subd. (a)(1).) A distributor’s license is needed to transport marijuana for commercial purposes. A distributor license allows transportation of cannabis goods, arranging for laboratory testing, conducting quality assurance review of cannabis goods to ensure they comply with all packaging and labeling requirements, and storage of cannabis goods. There is a more limited distributor license which is for transportation only. That license allows transportation of cannabis goods between licensed cultivators, manufacturers, and distributors, but does not allow transportation cannabis goods to retailer except for immature live plants and seeds being transported from a licensed nursery. (http://bcc.ca.gov/law_regs/lic_reg_overview.pdf) Transportation vehicles must have an alarm system. Medicinal and adult-use cannabis products may be transported together if they are clearly identified. The licensee must generate a shipping manifest prior to transporting cannabis. (Id.)
   

This bill would establish a fine schedule for regulatory violations regarding the manifests that are required when cannabis is transported for commercial purposes.

Transportation of marijuana for purposes of sale is still illegal after Proposition 215 and Proposition 64, unless the transportation takes place by licensed operators acting within the regulatory structure governing transportation of marijuana for commercial purposes. This bill states that transportation of cannabis for purposes of sale with a counterfeit manifest is punishable under that existing law.

Transportation of cannabis for personal use is not illegal, as long as it is an amount that is otherwise allowed to be possessed under the law.

1. Amendments Proposed to be Adopted in Committee:
   
   1. Specify that a licensed distributor shall not transport an amount of cannabis in excess of the amount stated on the shipping manifest.
      
   2. Punish transportation of marijuana in excess of the amount stated on the shipping manifest with a graduated fine in the same manner as the other regulatory violations in this bill.
      
   3. Delete language authorizing seizure of marijuana when a law enforcement officer encounters a licensed distributor transporting an amount of cannabis or cannabis product that is significantly in excess, as defined by the bureau, of the amount stated on the shipping manifest may seize the entire shipment of cannabis or cannabis product for up to two days.
      
   4. State that a law enforcement officer shall not seize cannabis for a violation of marijuana regulations, unless a seizure is otherwise authorized by law and the officer has probable cause to believe a criminal cannabis violation has occurred.
      
   5. Specify that transportation of cannabis for purposes of sale with a counterfeit shipping manifest is criminally punishable as unlawful transportation and is also subject to disciplinary action by the bureau.
      
2. Argument in Support: According to the California Peace Officers Association, “AB 2255 will provide crucial guidance to law enforcement officers regarding cannabis transportation violations. By allowing law enforcement officers to issue a fine to licensee violators, it helps ensure licensees will participate in legal cannabis transportation and eliminate illegal activity. By requiring delivery drivers to maintain an identification card, issued by the Bureau, it helps impede the potential counterfeiting of licensee materials by illegal actors. This bill will also allow officers to remove potentially illegal cannabis product from the market, which will curtail the illegal transportation of excess product. This bill greatly assists the legal cannabis actors by eliminating avenues for the illicit market to operate.
   
   “The main priority of our law enforcement officers is to ensure the safety and protection of our communities. Having cannabis legalized has only made it more accessible for people to consume, therefore more product is being transported on a daily basis. This bill will without a doubt help keep violators accountable.”
   
3. Argument in Opposition: According to Blackbird, “Section 5314 of the Bureau of Cannabis Regulation emergency regulations lays out the requirements for a shipping manifest. While the regulations require that a shipping manifest accompany the transported product, they do not require a physical copy or that a physical copy be maintained.
   
   “Shipping manifests are required to be entered into the state’s track and trace system before shipment is initiated and even requires that an email copy be sent to the Bureau if access to the track and trace system is not available.
   
   “The licensee at either end of the distribution is already subject to discipline by the bureau for failure to follow the regulations. Discipline can include revocation of the license. That level of enforcement is sufficient, either to ensure compliance or weed out bad actors.
   
   “Adding yet another cost to licensees increases the financial burdens that are beginning to weigh down this industry. The desire to lure gray area actors into the sunlight is made a little more difficult every time a new cost or new requirement is imposed.
   
   “We would also assert that the system needs time to be implemented and for problems to be identified before we begin seeking solutions. Licensees are scrambling to comply with hundreds of new regulations without additional statutory requirements being added to the mix.”
   
4. Related Legislation:
   
   1. SB 1451 (Fuller), would impose specific penalties on licensees that sells or furnishes cannabis to underage users and/or allows consumption of cannabis on a licensed premises by underage users. SB 1451 is pending hearing in the Senate Appropriations Committee.
      
   2. AB 2520 (Cooper), would establish the California Illegal Marijuana Task Force. AB 2520 is awaiting hearing in the Assembly Business and Professions Committee.
      
5. Prior Legislation:
   
   1. SB 94 (Committee on Budget and Fiscal Review), Chapter 27, Statutes of 2017, combined Adult Use of Marijuana Act (AUMA) and (MCRSA) into one system for the regulation of cannabis, resulting in MAUCRSA.
      
   2. AB 64 (Bonta), of the 2017-2018 Legislative Session, would have reconciled a number of differences between MCRSA and AUMA to provide clarity in regulation and enforcement of both medical and recreational cannabis. AB 64 was held in the Senate Appropriations Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Peace Officers Association
California Statewide Law Enforcement Association
Cannabis Distribution Association
Hardcar Security
River Distributing
The Werc Shop

Opposition

Blackbird

Analysis Prepared by:

David Billingsley / PUB. S. / (916) 319-3744

Date of Hearing: April 10, 2017

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Evan Low, Chair

ABPCA Bill Id:AB 2255

Author:(Lackey) – As Amended Ver:March 23, 2018

NOTE: This bill is double-referred, and if passed by this Committee, it will be referred to the Assembly Committee on Public Safety.

SUBJECT: Distribution: deliveries: violations.

SUMMARY: Existing law requires distributors of cannabis and cannabis products to maintain a physical shipping manifest and individuals receiving products to keep an electronic manifest, both of which must be available to law enforcement at their request. Existing law also requires licensees authorized to make deliveries to maintain a copy of the delivery request and to make it available to law enforcement upon request. Under this bill, violation of these requirements would result in a $500 fine with an increase of $50 for subsequent violations. The bill would also requires the Bureau of Cannabis Control (BCC) to furnish an identification card to all individuals transporting cannabis products and failure to provide the card to law enforcement upon request may result in administrative action by the BCC. Also would allow law enforcement to seize and potentially destroy cannabis, in consultation with the BCC, if a licensed distributor is found to be transporting cannabis or cannabis product that is significantly in excess of the amount stated on the shipping manifest. Clarifies that transportation of cannabis or cannabis product with a counterfeit shipping manifest is unlawful.

EXISTING LAW:

1. Establishes the Bureau of Cannabis Control, also referred to as the Bureau of Medical Cannabis Regulation (Bureau), under the Department of Consumer Affairs (DCA), to establish a comprehensive system to control and regulate the, distribution, transport, storage, , processing, and sale of cannabis products. (Business and Professions Code (BPC) Section 26000 et seq.)
2. Establishes grounds for disciplinary action against licensees. (BPC Section 26030)
3. Sets requirements for licensure of marijuana related businesses. (BPC Section 26051.5)

THIS BILL:

1. Authorizes a law enforcement officer who encounters a licensed distributor transporting amounts of cannabis or cannabis product significantly in excess of the amount listed on the shipping manifest, to seize the entire shipment and potentially destroy it after consulting with the BCC.
2. Clarifies that transportation of cannabis with a counterfeit shipping manifest is a crime.
3. Requires a fine of $500 with additional penalties if a licensee fails to maintain a printed shipping manifest during transport, an electronic manifest during receipt, or a delivery order during delivery, of cannabis or cannabis products.
4. Requires the BCC to furnish an identification card to all individuals transporting cannabis or cannabis products and requires the person transporting the cannabis to make the identification card available to law enforcement upon request. Failure to do so shall be reported to the BCC, which may take administrative action.

FISCAL EFFECT: Unknown. This bill has been keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose. This bill is author sponsored. According to the author, “Currently, there is no clarification of the consequences for a cannabis licensee’s failure to present the appropriate documentation to a local or state law enforcement officer. This is problematic because law enforcement officers are unsure of what to do when they encounter a distributor or delivery driver without the appropriate documentation. This bill provides clarification and guidance to officers and will help ensure all licensed distributors and delivery drivers are reporting into the track and trace system and maintaining the appropriate shipping manifests. This bill establishes simple requirements which will assist officers in verifying licensed distribution and transportation and will help distinguish between legal and illegal activity.”

Background. History of Legal Cannabis in California. In 1996, California voters passed Proposition 215, legalizing the use of medical cannabis (MC) in the state. In October 2015, nearly 20 years after the authorization of the use of MC, Governor Jerry Brown signed into law a trio of bills [AB 243 (Wood), Chapter 688, Statutes of 2015, AB 266 (Bonta, Cooley, Jones-Sawyer, Lackey, and Wood), Chapter 689, Statutes of 2015, and SB 643 (McGuire), Chapter 719, Statutes of 2015] collectively known as MCRSA. MCRSA established the state's first regulatory framework for MC. In 2016, the voters of California passed Proposition 64, the AUMA, to legalize the recreational use of cannabis in the state by 2018. In June 2017, AUMA and MCRSA were combined via the budget process to form one system for the regulation of Cannabis, MAUCRSA

Current Related Legislation. SB 1451 (Fuller) of the current legislative session, imposes specific penalties on licensees that sells or furnishes cannabis to underage users and/or allows consumption of cannabis on a licensed premises by underage users.

Prior Related Legislation. SB 94 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2017) of the current legislative session, combined AUMA and MCRSA into one system for the regulation of cannabis, resulting in MAUCRSA.

AB 64 (Bonta, Cooley, Jones-Sawyer, Lackey, Wood) of the current legislative session seeks to reconcile a number of differences between MCRSA and AUMA to provide clarity in regulation and enforcement of both medical and recreational cannabis. STATUS: This bill was passed by the Assembly Committee on Business and Professions on April 18, 2017 and was held in the Senate Committee on Appropriations.

ARGUMENTS IN SUPPORT:

“The California Peace Officers’ Association (CPOA) is pleased to support AB 2255 (Lackey). CPOA is appreciative of Mr. Lackey’s efforts to combat the cannabis transportation offenses that law enforcement expects in a post Prop-64 California”

“Hardcar wholeheartedly agrees with the premise of AB 2255, which will allow officers to remove certain illegal cannabis product from the market, thereby curtailing the illegal transportation of excess product. This bill greatly assists the legal cannabis actors by eliminating avenues for the illicit market to operate. We request your support for AB 2255 and appreciate the Committee’s time and consideration for these important matters.”

ARGUMENTS IN OPPOSITION:

None on file

POLICY ISSUE(S) FOR CONSIDERATION:

The Bureau does not currently have staff dedicated to the creation of an identification card program for cannabis distributors nor the budget authority to create such a position. The issuance of such a standardized card is outside the scope of current responsibility for the Bureau. In consultation with the author and to address these concerns, committee amendments strike the relevant section. The clarification that the use of a counterfeit shipping manifest is unlawful as well as the requirement to maintain an accurate manifest during transport should serve to address the concern over the ability of law enforcement to verify the legality of the transport of cannabis products.

IMPLEMENTATION ISSUES:

There is no standard set for how law enforcement would determine, in consultation with the Bureau, whether to destroy seized cannabis. Additionally, it is unclear if, in the case of inappropriate seizure, if the cannabis seized would be able to be returned to the licensee or what the mechanism for doing so would be. The author is encouraged to consult with stakeholders to address these concerns.

AMENDMENTS:

In Section 26070 strike (b)(2) and renumber accordingly

REGISTERED SUPPORT:

California Peace Officers’ Association

Hardcar

REGISTERED OPPOSITION:

None on file

Analysis Prepared by: Jimmy Fremgen / B. & P. / (916) 319-3301