ASSEMBLY THIRD READING

ATR Bill Id:AB 1356

Author:(Ting)

As Amended Ver:May 16, 2019

2/3 vote

SUMMARY:

Requires a local jurisdiction in which more than 50% of the electorate voted in favor of Proposition 64 to issue a minimum number of local licenses that authorize medicinal cannabis commercial activity equal to one license for every six on-sale general license types for alcoholic beverage sales that are currently active in that jurisdiction.

Major Provisions

1. Requires a local jurisdiction in which more than 50% of the electorate of that local jurisdiction, as determined using election data from the Secretary of State, voted in favor of Proposition 64 at the November 8, 2016, statewide general election to issue a minimum number of local licenses that authorize medicinal retail cannabis commercial activity.
2. Sets a minimum number of local licenses for retail cannabis commercial activity that a local jurisdiction is required to issue pursuant to the bill at one license for every six on-sale general license types for alcoholic beverage sales that are currently active in that jurisdiction.
3. States that if the number of local licenses for retail commercial cannabis would result in a ratio greater than one local license for retail cannabis commercial activity for every 15,000 residents of the local jurisdiction, the minimum number of local licenses that the local jurisdiction is required to issue shall be determined by dividing the number of residents in the local jurisdiction by 15,000 and rounding down to the nearest whole number.
4. Authorizes a local jurisdiction to establish a lower amount of local licenses for retail cannabis commercial activity if it does all of the following:
   1. Creates a local ordinance or other local law that clearly specifies the level of participation in the retail commercial cannabis market the local jurisdiction will allow.
   2. Submits that ordinance or other local law to the electorate of that local jurisdiction at the next regularly scheduled local election following the operative date of this section.
   3. If the ordinance or other local law is approved by more than 50% of the electorate of that local jurisdiction voting on the issue, then the new ordinance or other local law shall become effective in that local jurisdiction.
5. Provides that if a local jurisdiction does not submit a local ordinance or other local law to the electorate, or that local ordinance or other local law fails to receive more than 50% of the approval of the electorate of that local jurisdiction voting on the issue, then the local jurisdiction shall have 120 days after the next regularly scheduled local election following the operative date to issue local licenses.
6. Exempt from the requirements of the bill any locality that has already submitted the question of whether to locally authorize cannabis commercial activity.

COMMENTS:

As of January 9, 2019, the collective and cooperative model for medical marijuana dispensaries, as authorized under Proposition 215, was formally sunset, and any dispensary that was in place under the Compassionate Use Act was required to convert to the new regulatory system under MAUCRSA. In the months following that transition date, many have reported that overall availability of storefront dispensaries offering cannabis intended for cannabis users has substantially dropped, and many have expressed concern that the state's new regulatory framework has insufficiently accommodated existing patients who use cannabis for medicinal purposes. Because the AUMA and MAUCRSA allow localities to completely ban retail within their jurisdictions, there is currently no clear way to expand statewide access to medicinal cannabis without first obtaining local authorization for jurisdictions without retail.

Supporters of this bill point to the general lack of authorized storefront retail across the state since the enactment of the AUMA. According to analysis by BDS Analytics and Arcview Market Research, the illicit market's share of cannabis sales in California increased from 74% in 2017 to 80% in 2018. Supporters point out that over 76% of cities ban medical storefronts, as do nearly 69% of counties.

The author of this bill contends that increasing the availability of cannabis commercial activity through retail licenses will help combat the black market by providing consistent alternatives to illicit actors across the state. The diminishment of availability and access for medicinal cannabis following the implementation of MAUCRSA is an arguably considerable purpose for overriding local governments' authority to ban retail cannabis sales, in support of promoting access to medicinal products by legitimate cannabis users. In its current form, the bill would require only medicinal cannabis licenses to be issued by local jurisdictions.

According to the Author:

"Californians voted for Prop. 64 to replace the illicit market with a legal system that would grant Californians safe access to cannabis products, while also creating good jobs and significant tax revenue. However, these goals can only be fully realized if enough licenses are granted to meet existing demand. This bill will ensure the legal market can succeed."

Arguments in Support:

UDW/AFSCME Local 3930 is sponsoring this bill. According to the UDW, "UDW providers and their clients benefit greatly from using cannabis as a medicinal alternative, given how wide the spectrum of ailments is for elderly individuals and those with physical and/or intellectual or developmental disabilities. An IHSS provider living in Placer county should not have to drive up to an hour to and from Sacramento in order to purchase medicine for their clients, as this poses a substantial burden to their day-to-day priorities. AB 1356 would promote accessibility for those who use cannabis as a medicinal alternative, allowing Californians to reap the benefits they voted for in Proposition 64."

Arguments in Opposition:

The League of California Cities (League) opposes the bill. The League states that "AB 1356 fundamentally erodes the local regulatory authority of cities and counties, which is explicitly provided for in Proposition 64. In seeking to remove, a local government's ability to either approve retail cannabis shops at a different concentration level or prohibit them within its jurisdiction, this bill completely subverts the intent of the voters who approved Proposition 64. In essence, attempting to require cities to establish a [1 to 6] ratio of local retail cannabis licenses to liquor licenses removes the ability for locals to decide what is appropriate for their communities. By obligating such a ratio, AB 1356 proposes an arbitrary land use standard for individual cities and counties based on the results of a statewide ballot measure. Ultimately, it is questionable at best as to whether, under Proposition 64, the state even has the unilateral authority to impose such a requirement without voter approval."

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, "unknown, significant costs, potentially in the millions of dollars annually to the Bureau of Cannabis Control within the Department of Consumer Affairs to license an unknown number of additional cannabis retailers."

VOTES:

ASM BUSINESS AND PROFESSIONS: 12-7-1

YES: Low, Bloom, Chiu, Eggman, Gipson, Gloria, Grayson, Holden, McCarty, Medina, Mullin, Ting

NO: Brough, Cunningham, Dahle, Fong, Irwin, Obernolte, Quirk-Silva

ABS, ABST OR NV: Chen

ASM APPROPRIATIONS: 10-7-1

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Eggman, Gabriel, Eduardo Garcia, Quirk, Robert Rivas

NO: Bigelow, Brough, Diep, Fong, Maienschein, Obernolte, Petrie-Norris

ABS, ABST OR NV: Chau

UPDATED:

VERSION: May 16, 2019

CONSULTANT: Robert Sumner / B. & P. / (916) 319-3301 FN: 0000933

Date of Hearing: May 8, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1356

Author:(Ting) – As Amended Ver:April 30, 2019

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

SUMMARY:

This bill requires jurisdictions in which more than 50% of the electorate voted to approve the legalization of adult-use cannabis to issue a minimum number of local licenses to authorize retail cannabis commercial activity. The bill allows a jurisdiction to limit eligibility for licenses to only medicinal licensees. It also:

1. Establishes a minimum of one retail license issued for every four liquor licenses, unless that ratio would result in more than one retail license for every 10,000 people, in which case the minimum is one retail license for every 10,000 people.
2. Allows a local government to issue a lower number of licenses if an ordinance implementing a lower number is submitted to and approved by voters.
3. Provides for exceptions to the requirement to issue licenses if the electorate has, subsequent to Proposition 64, rejected an ordinance authorizing retail cannabis activity or approved a prohibition on retail cannabis activity.

FISCAL EFFECT:

Unknown, significant costs, potentially in the millions of dollars annually to the Bureau of Cannabis Control within the Department of Consumer Affairs to license an unknown number of additional cannabis retailers (Cannabis Control Fund). Fees for licensed retailers range from $2,500 to $57,000.

COMMENTS:

1. Purpose. This bill seeks to ensure a robust legal market for cannabis in local jurisdictions in which a majority of voters supported cannabis legalization.
2. Background. Cannabis, though illegal under federal law, has been legal under state law since the passage of Proposition 215 in 1996. A package of three bills enacted together in 2015 created a comprehensive state regulatory structure for medical cannabis regulation. With the passage of Proposition 64 of 2016, adult-use cannabis also became legal and regulatory structures for adult-use and medicinal cannabis were subsequently harmonized. As of January 9, 2019, the “collective” cooperative model for medical marijuana dispensaries, as authorized under Proposition 215, was formally sunset, and any dispensary that was in place under the Compassionate Use Act was required to convert to the new regulatory system.

Current law, both legislative statute and language passed through Proposition 64, allows a locality to completely ban retail cannabis its jurisdictions. Thus, there is currently no clear way to expand statewide access to medicinal cannabis without first obtaining local authorization for a jurisdiction without retail.

1. Support. United Domestic Workers of America, UDW/AFSCME Local 3930 is the sponsor of this bill. It is also supported by cannabis interests. According to the UDW, the passage of Proposition 64 exemplified California’s strong support for a legal cannabis market, one that would promote tax revenue to state and local governments and reduce black market activity. However, UDW maintains, some local governments have either refused to adopt proper licensing frameworks to create such markets or have established strict licensing structures that restrict the legal market from competing with its illegal competition. According to the Secretary of State, 393 out of 538 jurisdictions voted in favor of Proposition 64, yet over two-thirds of the state prohibit even a single cannabis retailer.
2. Opposition. The League of California Cities (League) and the California State Association of Counties opposes the bill. The League states:

This bill fundamentally erodes the local regulatory authority of cities and counties, which is explicitly provided for in Proposition 64. In seeking to remove a local government’s ability to either approve retail cannabis shops at a different concentration level or prohibit them within its jurisdiction, this bill completely subverts the intent of the voters who approved Proposition 64. In essence, attempting to require cities to establish a 1 to 4 ratio of local retail cannabis licenses to liquor licenses removes the ability for locals to decide what is appropriate for their communities. By obligating such a ratio, this bill proposes an arbitrary land use standard for individual cities and counties based on the results of a statewide ballot measure. Ultimately, it is questionable at best as to whether, under Proposition 64, the state even has the unilateral authority to impose such a requirement without voter approval.

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

Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Evan Low, Chair

ABPCA Bill Id:AB 1356

Author:(Ting) – As Amended Ver:April 4, 2019

SUBJECT: Cannabis: local jurisdictions: retail commercial cannabis activity.

SUMMARY: Requires a local jurisdiction in which more than 50 percent of the electorate voted in favor of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 to issue a minimum number of local licenses that authorize cannabis commercial activity equal to 25 percent of the number of on-sale general license types for alcoholic beverage sales that are currently active in that jurisdiction.

EXISTING LAW:

1. Enacts the Medicinal and Adult-Use Cannabis Regulation and Safety Act to provide for a comprehensive regulatory framework for the cultivation, distribution, transport, storage, manufacturing, processing, and sale of medicinal and adult-use cannabis. (Business and Professions Code (BPC) §§ 26000 et al.)
2. Defines an “A-license” as a state license issued for cannabis or cannabis products intended for adults 21 years of age and older and “M-license” as a state license for commercial cannabis activity involving medicinal cannabis. (BPC § 26001)
3. Provides for twenty total types of cannabis licenses including subtypes for cultivation, manufacturing, testing, retail, distribution, and microbusiness; requires each licensee except for testing laboratories to clearly designate whether their license is for adult-use or medicinal cannabis. (BPC § 26050)
4. Establishes the Bureau of Cannabis Control (BCC) within the Department of Consumer Affairs, previously named the Bureau of Marijuana Control, the Bureau of Medical Cannabis Regulation, and the Bureau of Medical Marijuana Regulation, for purposes of regulating microbusinesses, transportation, storage, distribution, testing, and sale of cannabis and cannabis products within the state. (BPC § 26010)
5. Requires the BCC to convene an advisory committee to advise state licensing authorities on the development of standards and regulations for legal cannabis, including best practices and guidelines that protect public health and safety while ensuring a regulated environment for commercial cannabis activity that does not impose such barriers so as to perpetuate, rather than reduce and eliminate, the illicit market for cannabis. (BPC § 26014)
6. Provides the Department of Food and Agriculture (CDFA) with responsibility for regulating cannabis cultivators. (BPC § 26060)
7. Provides the Department of Public Health (CDPH) with responsibility for regulating cannabis manufacturers. (BPC § 26130)
8. Establishes grounds for disciplinary action against cannabis licensees, including failures to comply with state licensing requirements as well as local laws and ordinances. (BPC § 26030)
9. Subjects cannabis businesses operating without a license to civil penalties of up to three times the amount of the license fee for each violation in addition to any criminal penalties. (BPC § 26038)
10. Expresses that state cannabis laws shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate cannabis businesses. (BPC § 26200(a))
11. Authorizes the Legislature to enact laws to implement the state’s regulatory scheme for cannabis, provided those laws are consistent with the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act (Proposition 64). (BPC § 26000)

THIS BILL:

1. Requires a local jurisdiction in which more than 50 percent of the electorate of that local jurisdiction, as determined using election data from the Secretary of State, voted in favor of Proposition 64 at the November 8, 2016, statewide general election to issue a minimum number of local licenses that authorize adult-use retail cannabis commercial activity or medicinal retail cannabis commercial activity within the jurisdiction.
2. Authorizes a local jurisdiction required to authorize retail cannabis commercial activity to impose a fee on licensees to cover the regulatory costs of issuing those local licenses.
3. Sets a minimum number of local licenses for retail cannabis commercial activity that a local jurisdiction is required to issue pursuant to the bill at 25 percent of the number of on-sale general license types for alcoholic beverage sales that are currently active in that jurisdiction.
4. States that if the number of local licenses for retail commercial cannabis would result in a ratio greater than one local license for retail cannabis commercial activity for every 10,000 residents of the local jurisdiction, the minimum number of local licenses that the local jurisdiction is required to issue shall be determined by dividing the number of residents in the local jurisdiction by 10,000 and rounding down to the nearest whole number.
5. Authorizes a local jurisdiction to establish a lower amount of local licenses for retail cannabis commercial activity if it does all of the following:
   1. Creates a local ordinance or other local law that clearly specifies the level of participation in the retail commercial cannabis market the local jurisdiction will allow.
   2. Submits that ordinance or other local law to the electorate of that local jurisdiction at the next regularly scheduled local election following the operative date of this section.
   3. If the ordinance or other local law is approved by more than 50 percent of the electorate of that local jurisdiction voting on the issue, then the new ordinance or other local law shall become effective in that local jurisdiction.
6. Provides that if a local jurisdiction does not submit a local ordinance or other local law to the electorate, or that local ordinance or other local law fails to receive more than 50 percent of the approval of the electorate of that local jurisdiction voting on the issue, then the local jurisdiction shall have 120 days after the next regularly scheduled local election following the operative date to issue local licenses.

FISCAL EFFECT: Unknown; this bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

Purpose. This bill is sponsored by United Domestic Workers of America, UDW/AFSCME Local 3930. According to the author:

Californians voted for Prop. 64 to replace the illicit market with a legal system that would grant Californians safe access to cannabis products, while also creating good jobs and significant tax revenue. However, these goals can only be fully realized if enough licenses are granted to meet existing demand. This bill will ensure the legal market can succeed.

Background.

Early History of Cannabis Regulation in California. Consumption of cannabis was first made lawful in California in 1996 when voters approved Proposition 215, or the Compassionate Use Act. Proposition 215 protected qualified patients and caregivers from prosecution relating to the possession and cultivation of cannabis for medicinal purposes, if recommended by a physician. The initiative prohibited physicians from being punished or denied any right or privilege for making a medicinal cannabis recommendation to a patient. Proposition 215 also included findings and declarations encouraging the federal and state governments to implement a plan to provide for the safe and affordable distribution of cannabis to patients with medical needs.

The regulatory scheme for medicinal cannabis was further refined by SB 420 (Vasconcellos) in 2003, which established the state’s Medical Marijuana Program (MMP.) Under the MMP, qualified patients were eligible to obtain a voluntary medical marijuana patient card, which could be used to verify that the patient or a caregiver had authorization to cultivate, possess, transport, or use medicinal cannabis. The MPP’s identification cards were intended to help law enforcement officers identify and verify that cardholders were allowed to cultivate, possess, or transport limited amounts of cannabis without being subject to arrest. The MMP also created protections for qualified patients and primary caregivers from prosecution for the formation of collectives and cooperatives for medicinal cannabis cultivation.

Without the adoption of a formal framework to provide for state licensure and regulation of medicinal cannabis, a proliferation of informally regulated cannabis collectives and cooperatives were largely left to the enforcement of local governments. As a result, a patchwork of local regulations was created with little statewide involvement. More restrictive laws and ordinances by cities and counties were ultimately upheld by the California Supreme Court in City of Riverside v. Inland Empire Patients (2013) 56 Cal. 4^th 729, which held that state law did not expressly or implicitly limit the inherent authority of a local jurisdiction, by its own ordinances, to regulate the use of its land, including the authority to provide that facilities for the distribution of medicinal cannabis be prohibited from operating within its borders.

Even after several years of allowable cannabis cultivation and consumption under state law, a lack of a uniform regulatory framework led to persistent problems across the state. Cannabis’s continued illegality under the federal Controlled Substances Act, which classifies cannabis as a Schedule I drug ineligible for prescription, generated periodic enforcement activities by the United States Department of Justice. The constant threat of action by the federal government created apprehension among California’s cannabis community.

A document issued by the United States Attorney General in 2013 known as the “Cole memorandum” indicated that the existence of a strong and effective state regulatory system, and a cannabis operation’s compliance with such a system, could allay the threat of federal enforcement interests. Federal prosecutors were urged under the memo to review cannabis cases on a case-by-case basis and consider whether a cannabis operation was in compliance with a strong and effective state regulatory system prior to prosecution. The memo was followed by Congress’s passage of the Rohrabacher-Farr amendment, which prohibits the United States Department of Justice from interceding in state efforts to implement medicinal cannabis.

MCRSA. After several attempts to improve the state’s regulation of cannabis, the Legislature passed the Medical Marijuana Regulation and Safety Act—subsequently retitled the Medical Cannabis Regulation and Safety Act (MCRSA)—in 2015. MCRSA consisted of a package of legislation: AB 243 (Wood); AB 266 (Bonta, Cooley, Jones-Sawyer, Lackey, and Wood); and SB 643 (McGuire). 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 BCC within the Department of Consumer Affairs, the CDPH, and the CDFA, with implementation relying on each agency’s area of expertise.

MCRSA vested authority for:

• The BCC to license and regulate dispensaries, distributors, transporters, and (subsequently) testing laboratories, and to provide oversight for the state’s regulatory framework;
• The CDPH to license and regulate manufacturers; and
  
• The CDFA to license and regulate cultivators.

While entrusting state agencies to promulgate extensive regulations governing the implementation of the state’s cannabis laws, MCRSA fully preserved local control. Under MCRSA, local governments may establish their own ordinances to regulate medicinal cannabis activity. Local jurisdictions may also choose to ban cannabis establishments altogether.

AUMA. Not long after the Legislature enacted MCRSA, California voters passed Proposition 64, the Adult Use of Marijuana Act (AUMA). The passage of the AUMA legalized cannabis for non-medicinal adult use in a private home or licensed business; allowed adults 21 and over to possess and give away up to approximately one ounce of cannabis and up to eight grams of concentrate; and permitted the personal cultivation of up to six plants. The law retained prohibitions against smoking in or operating a vehicle while under the effects of cannabis, possessing cannabis at a school or other child oriented facility while kids are present, growing in an unlocked or public place, and providing cannabis to minors.

The proponents of the AUMA sought to make use of much of the regulatory framework and authorities set out by MCRSA while making a few notable changes to the structure still being implemented. In addition, the AUMA approved by the voters adopted the January 1, 2018 deadline for state implementation of non-medicinal cannabis in addition to the regulations required in MCRSA that were scheduled to take effect on the same date. The same agencies given authority under MCRSA remained responsible for implementing regulations for adult use.

Under the AUMA, the BCC within the Department of Consumer Affairs continues to serve as the lead regulatory agency for all cannabis, both medicinal and non-medicinal. The AUMA includes 19 different license types compared to the original 17 in MCRSA, and provides the Department of Consumer Affairs (and the BCC) with exclusive authority to license and regulate the transportation of cannabis. The AUMA also authorizes vertical integration models which allows for the holding of multiple license types, as previously prohibited under MCRSA. Additionally, while MCRSA required both a state and local license to operate, the AUMA only stipulated a state license; however, the state is also directed not to issue a license to an applicant if it would “violate the provisions of any local ordinance or regulation.”

The language of the AUMA allows for legislative modifications that “implement” or “give practical effect” to the law by a majority vote. However, what constitutes “implementing” has been interpreted to be limited. Consequently, proposed changes to the voters’ intent in the AUMA require a two-thirds vote and of those, some may be deemed to require voter approval.

MAUCRSA. In the spring of 2017, SB 94 (Committee on Budget and Fiscal Review) was introduced to reconcile the distinct systems for the regulation, licensing, and enforcement of legal cannabis that had been established under the respective authorities of MCRSA and the AUMA. The single consolidated system established by the bill—known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA)—created a unified series of cannabis laws and deleted redundant code sections no longer necessary due to the combination of the two systems. MAUCRSA also clarified a number of components, including but not limited to licensing, local control, taxation, testing, and edibles.

Regulations. On January 16, 2019, the state’s three cannabis licensing authorities—the BCC, the CDPH, and the CDFA—officially announced that the Office of Administrative Law had approved final cannabis regulations promulgated by the three agencies respectively. These final regulations replaced emergency regulations that had previously been in place, and made various changes to earlier requirements following the public rulemaking process. The adoption of final rules provided a sense of finality to the state’s long history in providing for the regulation of lawful cannabis sale and use.

Availability of Medicinal Cannabis. As of January 9, 2019, the collective and cooperative model for medical marijuana dispensaries, as authorized under Proposition 215, was formally sunset, and any dispensary that was in place under the Compassionate Use Act was required to convert to the new regulatory system under MAUCRSA. In the months following that transition date, many have reported that overall availability of storefront dispensaries offering cannabis intended for cannabis users has substantially dropped, and many have expressed concern that the state’s new regulatory framework has insufficiently accommodated existing patients who use cannabis for medicinal purposes. Because the AUMA and MAUCRSA allow localities to completely ban retail within their jurisdictions, there is currently no clear way to expand statewide access to medicinal cannabis without first obtaining local authorization for jurisdictions without retail.

Supporters of this bill point to the general lack of authorized storefront retail across the state since the enactment of the AUMA. According to analysis by BDS Analytics and Arcview Market Research, the illicit market’s share of cannabis sales in California increased from 74% in 2017 to 80% in 2018. Supporters point out that over 80 percent of cities—and over 70 percent of counties—ban adult use storefront retail of cannabis. The numbers are not substantively different for medicinal cannabis; over 76 percent of cities ban medical storefronts, as do nearly 69 percent of counties.

The author of this bill contends that increasing the availability of cannabis commercial activity through retail licenses will help combat the black market by providing consistent alternatives to illicit actors across the state. While this is point is certainly arguable, there was also inherent in Proposition 64 the assurance that notwithstanding statewide legalization and regulation, local jurisdictions would retain the authority to ban cannabis. It is not certain whether competition with the black market is an overwhelmingly important enough cause so as to preempt the voters’ expectations for local control. However, the diminishment of availability and access for medicinal cannabis following the implementation of MAUCRSA is a somewhat more considerable purpose for overriding local governments’ authority to ban retail cannabis sales, in support of promoting access to medicinal products by legitimate cannabis users.

Current Related Legislation. AB 228 (Aguiar-Curry) would authorize cannabis businesses to sell products containing CBD derived from hemp. This bill is pending in the Assembly Appropriations Committee.

AB 286 (Bonta) would reduce the excise tax rate on cannabis and suspend the cannabis cultivation tax until June 1, 2022. This bill is pending in the Assembly Business and Professions Committee.

AB 545 (Low) would require the Bureau of Cannabis Control to undergo sunset review. This bill is pending on the Assembly Floor.

AB 1288 (Cooley) would require cannabis delivery to be included in track and trace. This bill is pending in the Assembly Appropriations Committee.

AB 1465 (Bloom) would create a new license type for a cannabis consumption cafe/lounge. This bill is pending in the Assembly Business and Professions Committee.

AB 1530 (Cooley) would have authorized local governments to ban the delivery of cannabis to addresses within its jurisdiction. This bill failed passage in the Assembly Business and Professions Committee.

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

ARGUMENTS IN SUPPORT:

UDW/AFSCME Local 3930 is sponsoring this bill. According to the UDW, “the passage of AUMA exemplified California’s strong support for a legal cannabis market, one that would promote tax revenue to state and local governments and reduce black market activity. However, certain local governments have either refused to adopt proper licensing frameworks to create such markets, or have established strict licensing structures that restrict the legal market from competing with its illegal competition. According to the Secretary of State, 393 out of 538 jurisdictions voted in favor of Proposition 64, yet over two-thirds of our state prohibit even a single cannabis retailer. UDW providers and their clients benefit greatly from using cannabis as a medicinal alternative, given how wide the spectrum of ailments is for elderly individuals and those with physical and/or intellectual or developmental disabilities. An IHSS provider living in Placer county should not have to drive up to an hour to and from Sacramento in order to purchase medicine for their clients, as this poses a substantial burden to their day-to-day priorities. AB 1356 would promote accessibility for those who use cannabis as a medicinal alternative, allowing Californians to reap the benefits they voted for in Proposition 64.”

ARGUMENTS IN OPPOSITION:

The League of California Cities (League) opposes the bill. The League states that “AB 1356 fundamentally erodes the local regulatory authority of cities and counties, which is explicitly provided for in Proposition 64. In seeking to remove, a local government’s ability to either approve retail cannabis shops at a different concentration level or prohibit them within its jurisdiction, this bill completely subverts the intent of the voters who approved Proposition 64. In essence, attempting to require cities to establish a 1 to 4 ratio of local retail cannabis licenses to liquor licenses removes the ability for locals to decide what is appropriate for their communities. By obligating such a ratio, AB 1356 proposes an arbitrary land use standard for individual cities and counties based on the results of a statewide ballot measure. Ultimately, it is questionable at best as to whether, under Proposition 64, the state even has the unilateral authority to impose such a requirement without voter approval.”

AMENDMENTS:

1. To add language to the bill expressly providing that the licenses for commercial cannabis activity required under this bill do not need to involve recreational cannabis and that only medicinal cannabis activity must be accommodated by a jurisdiction in which a majority of voters supported Proposition 64:

Amend the bill as follows:

26200.1. (a) (1) Except as provided in subdivision (d), every local jurisdiction shall comply with the requirements of this subdivision if more than 50 percent of the electorate of that local jurisdiction, as determined using election data from the Secretary of State, voted in favor of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016, an initiative measure enacted as Proposition 64 at the November 8, 2016, statewide general election.

(2) A local jurisdiction described in paragraph (1) shall issue a minimum number of local licenses that authorize medicinal retail cannabis commercial activity, or a combination of medicinal retail cannabis commercial activity and adult-use retail cannabis commercial activity, within the jurisdiction that would be permitted by a retailer license described in Section 26070, as determined by paragraph (3). A local jurisdiction may impose a fee on licensees to cover the regulatory costs of issuing those local licenses.

…

…

(f) Nothing in this section shall be construed to require a local jurisdiction to authorize adult-use retail cannabis commercial activity.

1. To exempt from the requirements of this bill any locality that has already submitted the question of whether to locally authorize cannabis commercial activity so as not to require that jurisdiction to present the issues to voters again in order to be exempt from the bill’s provisions:

Add a new subdivision to the bill that reads as follows:

(d) A local jurisdiction that submitted a local ordinance or other local law to the electorate between January 1, 2017 and January 1, 2020 is exempt from this section if either of the following applies:

(1) The local ordinance or other local law submitted to the electorate authorized retail cannabis commercial activity, and the local ordinance or other local law was not approved by the electorate.

(2) The local ordinance or other local law submitted to the electorate prohibited retail cannabis commercial activity, and the local ordinance or other local law was approved by the electorate.

REGISTERED SUPPORT:

United Domestic Workers of America, UDW/AFSCME Local 3930 (Sponsor)
Americans for Safe Access
Association of Cannabis Professionals
CalAsian Chamber of Commerce
California Cannabis Industry Association
California Hispanic Chambers of Commerce
Cannabis Distribution Association
CannaCraft
High Desert Cannabis Association
SEIU State Council
Southern California Coalition
Veterans Cannabis Group
Weedmaps

REGISTERED OPPOSITION:

California State Association of Counties
League of California Cities
Rural County Representatives of California
Smart Approaches to Marijuana California

Analysis Prepared by: Robert Sumner / B. & P. / (916) 319-3301