Senate Standing Committee on Business, Professions and Economic Development

Senate Committee on Business, Professions and Economic Development will come to order. Good morning. The Senate continues to welcome the public, as you know, both in person and via the Teleconference service. For individuals wishing to provide public comment, the participant number is 877-226-8216 and the access code is 621-7161. We're holding our committee hearing as usual in our 1021 O Street location. All members of the committee should report to room 2100. So we will be in a position to establish a quorum. Since we're not at that point yet, we will continue as a subcommittee. We have eleven bills on today's agenda. There's one measure proposed for consent. It's file item number one, SCR 72. And so at this point, we will move to file item number two, AB eight. Do I have an author? I have authors. Welcome. Proceed when ready.

Good morning, Mr. Chair and members. In the past, if you wanted to buy a ticket to an event, you'd go to a box office at the venue or the ballpark. The box office would tell you what seats were available and the price that the tickets cost. You'd receive a paper ticket that you could then use to enter the venue or give them away, or sell them as they see fit. It was thought that the internet would make ticket selling even easier and promote greater transparency. However, it appears to many ticket buyers that exactly the opposite has happened. These days, you may not be able to find the final price or the cost of the ticket until you've been online, sometimes for hours and have finally snagged a ticket. You may then watch that ticket's cost increase with more fees added as you check past web page after web page until you finally get to the place to pay. Average ticket prices have more than tripled since the mid nineties, and the fees that are tacked onto each ticket can be as high as 78% of the ticket price. While consumers are certainly feeling the pinch, ticket retailers are doing just fine. Just last month, Ticketmaster Live Nation announced record profits, reporting a 2022, operating income up 125% from pre-pandemic levels to $732 million, and revenue up 44% to $16.7 billion. Now, while this is big business, the laws governing ticket retailers were passed before the Internet even existed, a fact that's become exceedingly clear as mega ticket sellers and resellers have used more of those rules to basically rip off consumers looking to see their favorite artists. Why do ticket sellers tack on new fees to your ticket purchase with each click of a web page? It's called drip pricing, and it was developed by behavioral scientists to get customers to pay more. Drip pricing is not negotiable. You must still pay those new fees or charges in order to purchase your tickets. In 2015, shortly before abandoning all in ticket prices, one ticket reseller did an experiment where half the shoppers saw all in pricing and half saw the lower base price with taxes and fees only added at the end. The latter strategy boosted revenue by 20%. Drip pricing works. When people get to the end of the process, they feel that they've locked into the purchase. They feel they've invested their time. They may be reluctant to start the process over, or reluctant to admit that they could have made a mistake, even when they might be spending more money than they had decided they wanted to spend. We need to update the law for how tickets are sold today. To make sure artists, performers and venues can reach fans and sell tickets in a transparent and easier way, AB Eight adds important new consumer protections. And I have my joint author, Assemblymember Jacqui Irwin, to talk about how the bill helps consumers.

Assemblymember, please proceed.

Thank you, Senator. List of frustrations that consumers have had with the ticketing industry is long since consumers have no choice but to put their trust in the ticketing industry. This monopolistic industry has become emboldened in their deceptive practices, depriving consumers of needed transparency in the ticket-purchasing process. In response to consumer frustrations, AB Eight will update current law providing consumers with transparency in the ticket purchasing process. Specifically, AB Eight will require the full price of a ticket and fees to be displayed prior to selecting the ticket for purchase, prohibiting a ticket price from increasing during the purchasing process. These consumer protection provisions will apply to all primary and ticket sellers, updating prior ticketing laws that exempted primary ticket brokers. Lastly, AB Eight will prohibit a ticket seller from charging more for a printed ticket if the event is a cell phone-free event. Through these needed provisions, AB Eight will protect consumers like me and you from outdated and deceptive marketplace practices that have financially harmed our constituents and ourselves. Ms. Friedman and I have worked on various amendments that have removed nearly all the opposition, and we look forward to continuing these conversations. With us this morning in support of AB Eight is Robert Harrell, executive director of the Consumer Federation of California, and Sandra Cushion, consumer advocate with CALPIRG.

Who wants to go first?

I can go first. Okay. Thank you, Chair and members. My name is Sandra Cushion and I am the consumer advocate with CALPIRG. We're the statewide consumer watchdog and advocacy group working to protect Californians and ensure a fair marketplace. And we're here today as proud co-sponsors of AB Eight. One of the most basic tenets of consumer protection is transparency. And complete pricing information specifically is critical to helping inform consumer's purchases and ensuring a fair marketplace. But more and more ticket sellers are violating this principle by blindsided consumers with hidden fees and other unfair tactics that can make it hard to find the true price of a ticket. AB Eight addresses this by ensuring a ticket's advertised price is the actual price and ensures that seat location information and refund policies are available to the consumer at the time of purchase. Additionally, AB Eight's most recent amendments will add language to better protect consumers from bots that can quickly buy large quantities of tickets and then resell them at inflated prices, often to the detriment of real-life consumers. Broad public support for ticket reform has been brewing for the last several years, and these reforms offered by AB Eight are long overdue. As we emerge from the worst days of the COVID pandemic, Californians are looking for more and more opportunities to enjoy live events. And as people rush to buy tickets for these events, the broken nature of the ticket-selling system is becoming more clear. AB Eight offers common sense solutions to this broken system. Consumers should know the true price of a ticket and should have control over what they do with their ticket. Thank you. And I respectfully ask for your aye vote.

Thank you. Next please.

Good morning, Mr. Chairman and members. Robert Harrell. I'm the executive director of the Consumer Federation of California and we're a co-sponsor of AB Eight. I'd like to thank the authors. I know this has been a long and arduous road. I'm old enough actually, to remember what Assemblymember Friedman referred to at the beginning, lining up at Music Plus on Sunday at 10 a.m. to get the tickets. The world has changed quite a bit and I will tell you, as someone who's been attending concerts, sporting events, theater events for decades, it has gotten incrementally and now exponentially more frustrating to go through that process. I have a twelve-year-old, she's a fan of K-pop. I will never get back the three-plus hours I spent desperately trying to get tickets to a show, ultimately having to go to the secondary market to get something at a small markup. And that alludes to what the big problem is in this industry. The big problem is that you have a monopoly. When Live Nation and Ticketmaster were allowed to merge around 2010 or so, there was a sort of consent decree that was part of this. Meaning essentially that they were going to behave in a certain way. They have not. And what you've seen is this just getting worse and worse and worse. So any issue that unites the Swifties and the Beehive in hostility towards that industry tells you something about what's really going on in the marketplace here. Assemblymembers Friedman and Irwin did a really good job of describing what we call Five Click Syndrome. This is science. They know that whether it's a hotel, a concert ticket, whatever purchase you want to make, once you get to that end of that process, you're locked into that purchase and therefore fees can be sprung on you. Terms and conditions that limit your ability to attend or to transfer a ticket to a friend or family member, they are all there. And we're all inclined because we've been trained you must click "I agree." If you don't click "I agree," you can't even update the software on your phone, let alone get a concert ticket. We are co-signers of the Ticket Buyer's Bill of Rights. There are some important principles in that. I won't go into the details of it. In a perfect world, this bill would have additional content on transferability and some other holdbacks, which are some issues where the monopoly manipulates the marketplace. But we think this is an important first step. We know conversations are going to continue. You have multiple bills in play here. We urge the committee to support this bill today. Thank you.

Thank you. Any other supporters in room 2100, please? Name, affiliation, position on the measure only. Thank you.

Jamie Minor, on behalf of StubHub, in a support if amended, position. Appreciate the work of the authors. We're disappointed to see the last round of amendments that removed a key consumer protection of the right to transfer and look forward to continued conversations on that piece.

Thank you. Next please. Thank you.

Thank you Mr. Chair, members and staff. Mitch Steiger with the California Labor Federation. We just wanted to clarify that with the most recent amendments, we have removed our opposition to the bill.

Thank you. Next please.

Good morning, Mr. Chair and Members. Robert Moutrie, California Chamber of Commerce. Happy at this point to for once agree with my colleague Mitch Steiger. Cal Chamber is removing opposition due to the recent amends around transferability.

Thank you. Thank you. Next please.

I'll put myself in the Tweener category, if you don't mind, Andrew Govenar, Govenar Lab Kits. On behalf of California's five Major League Baseball teams and the San Francisco 49ers and Major League Baseball, we're pleased to come here today and remove our opposition to AB Eight. After working with Assemblymembers Friedman and Irwin on removing two of the key provisions that we believe need to be removed from the bill. While we still have some technical amendments that we would like to see in the bill, we have removed opposition. The technical amendments we've actually asked of both AB Eight and SB 785 have to do with the fee transparency language. Right now it says advertiser display. We believe it should be during the purchase process because advertising a display. The price may change depending on how the person would like to receive the ticket. And this would be consistent with what we're living with other fee transparency bills across the country, and in addition, two other small amendments. But we will say removing those two key amendments were key to us removing our opposition. We believe that the holdback and the transferability and other portions that they had in the bill would have interrupted the ability for our teams to provide the fans with the best experience in California. We price our tickets at a price point to ensure that our fans can buy tickets at the right price. Removing those provisions would have interrupted that. So we appreciate the author removing those and we look forward to working with them on cleanup language on the bill. So thank you.

Thank you. Next, please.

Hi. Good morning, Mr. Chair and members of the committee. Marc Aprea. I'm here on behalf of AEG and its ticketing division, Access, or AXS. We know this committee was very involved in the development of Senate Bill 785 providing consumer protections for ticket buyers and ensuring that the rights of event presenters to determine how their tickets to their events are sold and not impinged upon. We support that measure. We also want to commend Assemblymembers Friedman and Irwin for amending AB Eight to strike several of the objectionable provisions in the bill while preserving a consumer-friendly all-in-price transparency provision, so that the first price consumers see will be the final price they pay. And that is a practice that Access currently abides by. Both SB 785 and AB Eight contain that all-in pricing transparency provision, and therefore, it is our view that AB Eight is not only not necessary, but also creates technical policy conflicts, confusion and chaptering out issues, and therefore respectfully ask that AB Eight be parked. As you know, we support SB 785 because it does important things to protect consumers and making sure that all ticket sellers are required to abide by the same rules. It modernizes and extends the current ticketing statute that currently applies only to ticket brokers in order to regulate all ticketing platforms, including original and resale, to provide comprehensive and uniform protection for fans and event presenters. It addresses some of the problems associated with speculative ticketing, it cracks down on the use of bots that deprive consumers of access to face-value tickets, and it cracks down on the fraudulent practice of using deceptive URLs. For all of the above reasons, we do not believe there is an ongoing need for AB Eight, and ask that you hold the bill in committee and that the authors identify problems that are not yet associated with Senate Bill 785 or any other measure, and come back and address those issues in 2024. Thank you, Mr. Chair.

I assume that's an opposition.

Actually, we're not taking an opposed position. I'm

I'm just trying to keep the right train on the right track. And that was a little confusing, but I've got it.

You can take it.

Next, please.

Good morning, Tim Lynch, on behalf of the Golden State Warriors, and with the last round of amendments, we have removed our opposition. Thank you.

Next, please.

Good morning, Mr. Chair Members, Mike Carpenter. On behalf of Live Nation and Ticketmaster. While I certainly associate with and agree with the comments of Mr. Aprea, I also want to thank the authors. It's a bit of a love fest. I agree with all of the proponents and with the authors that drip pricing, nontransparent pricing, is a huge problem. And so we completely agree with the authors and support what they've done on that and appreciate it. That said, we do have a few outstanding concerns that we've talked about with the authors' staffs, and we hope that can be addressed. We want to see a bill that bans the practice of speculative ticketing and requires resellers to have possession of a ticket before selling it. We'd like to close the six-ticket loophole in the bill that allows for industrial resellers to circumvent the bill just by purchasing six tickets to every event. We'd like to see consistent refund provisions. So, in other words, the way the bill is drafted now, a primary ticket platform is required to refund a ticket purchaser even if the ticket was sold on a secondary website. We don't think that makes sense. And as currently drafted, AB Eight requires the reintroduction of paper tickets for shows where one needs a phone. We are concerned about the reintroduction of paper tickets. While it can be inconvenient for a few patrons in those types of events, the reintroduction of paper tickets is essentially a gateway to a return of fraud. It was the advent of digital tickets, as the assemblymember pointed out, the statute was drafted before we had the internet. Digital tickets have reduced fraud substantially, and we hate to see the reintroduction of paper tickets. But with that, we hope to continue working with the authors to address these concerns and appreciate the amendments that they took in the assembly to deal with the concerns of the event presenters, the teams, and the artists.

Thank you. Let me just say, I try to be flexible during these hearings. As you know, I don't impose time limits. I let people have their say because I think that's the way committees should run, and I enjoy the interchange. However, we normally allow one or two supporters, lead witnesses, one or two lead opponents, and then everybody else states a name, affiliation, and a position on the bill. So as we move forward, I'm going to have to insist on this. We have eleven bills, one on consent, so ten bills. We have session at two, which means we have to adjourn before in order to get in our positions. It's like school. And then after session, we have a budget committee. So if we do not finish, you all will be back here this evening with all of the rest of us. So let's see if we can tighten it up. I've asked my colleagues to do the same with respect to their questions, and we will move through this thing as efficiently, as effectively, but as thoroughly as we need to do in order to properly hear and decide these bills. So any other supporters in room 2100? Guess we've exhausted those. Any in opposition in room 2100 to this measure, lead or otherwise? I don't know. I guess I scared them off. Okay, let's turn to the teleconference service moderator. If you would please prompt any individuals waiting to testify either in support or in opposition to AB Eight. We will begin with them.

Thank you. And if you'd like to speak in support or in opposition to, please press one, followed by the zero at this time on your touch-tone phone. Once again, if you'd like to speak in support of or in opposition to, please press one on your... one then followed by the zero on your touch-tone phone. And one moment, please. Thank.

We'll first go to line number 16, please go ahead.

Hi, I'm a USCw local seven 70 employee at LA cannabis company AB 1111

Think you have the wrong measure, ma'am. We're on AB eight. Next, please.

Okay. And once again, if you'd like to speak in support or opposition, please press one followed by the zero. At this time, and there are currently no other lines in queue.

Thank you. Moderator let's bring the matter back to the dais colleagues. Questions, any questions? Who moves the Bill? No questions. Let me just ask one. I was going to ask if the amendments that were proposed in the Assembly were accepted, but it sounds to me like there were amendments taken and amendments removed. Is that a fair statement Assembly Members?

There were certain amendments with the sports teams that were agreed to. But I do want to say, as you can see from the many, many stakeholders and the very long hours that our staff, the staffs of our two office spent with the stakeholders, that this is really like threading the needle and we're trying to get it just right. But at this point, this Bill is about transparency, and we will continue to work with the stakeholders, but it is truly a balancing act.

And is there a path for you? There were two bills pending, one in the Senate, one in the Assembly. Now they've switched. Is there a path forward with the two measures?

Yes, we are going to be meeting with the Senator this afternoon.

Perfect. Well, seeing no questions, some of your Members, would you like to close?

I'll just say that this Bill is absolutely necessary and we hear from all across the country people's dissatisfaction with the way they're being treated online by ticket sellers. This has become a much more modest proposal than it started out at, which is a little disappointing to me, honestly. But we are doing what we think we can do right now to start to address this problem. And with that, I would definitely appreciate the courtesy of allowing us to continue the conversation.

Well, we have a motion. As soon as we have a quorum, we'll take a vote. Nice job.

Thank you. Next item. Item number three, Assembly Bill 374, Assemblymember Haney.

Thank you, Chair Roth and Members AB 374 legalizes cannabis cafes by allowing the sale of non cannabis foods and soft drinks at licensed cannabis retailers. The legal cannabis business cannabis industry is struggling. Issues like oversaturation, high taxes, and a thriving black market are hurting cannabis businesses who follow the rules and pay taxes.

In 2021, California's legal cannabis sales reached 4 billion, while the state's illegal black market sales were projected to have exceeded 8 billion. These mom and pop small businesses are playing by the rules and paying taxes, but they are being crowded out by illegal black market businesses that don't follow the rules, don't pay taxes, and don't put in place the strict safety measures that we expect from cannabis retailers. Unfortunately, because of how our existing cannabis laws are written, these struggling small businesses can't diversify to stay competitive with the black market.

AB 374 allows local governments to authorize the preparation and sale of non-cannabis foods and soft drinks at licensed cannabis consumptions lounges. To be clear, this Bill does not allow coffee shops to sell cannabis. It only allows cannabis shops to sell coffee with pre-approval from local governments.

Ironically, how the law is written now, it requires cannabis shops to only sell drugs. We believe that if these businesses want to move away from that model and sell muffins and coffee, they should be able to. This Bill enjoyed broad bipartisan support in both the Assembly policy committees and on the Assembly floor.

I do want to say that cannabis lounges themselves were already included in Prop 64. It is not legal to smoke in public, on the streets, in front of your home and parks, or even in many cases, in your own apartment. So consumption lounges were included in Prop 64 because they created legal space for people to consume cannabis.

There's no reason that these lounges, if approved by local governments, shouldn't be able to also encourage other types of business opportunities and community and culture at the same time. With me today I have Ben Bleiman from the California Nightlife Association and Jerred Kiloh from the United Cannabis Business Association.

Gentlemen, please proceed.

Hello. Thanks for having me here today. My name is Ben Bleiman and I am the Chairman of California Nightlife Association, also known as Cal Night, which is a statewide adverse organization for entertainment and nightlife, and arts. We have members from San Diego to Sacramento and everywhere in between.

This is a really important measure for, I think, three reasons. The first is just the collapse of the retail market and the cannabis, the legal cannabis market in the state of California. A lot of this has to do with federal tax burdens, but the state has played a significant part in furthering this collapse, especially with the out-of-control illegal market, which is undercutting legal retailers at every turn.

The second reason is that you simply are not allowed to consume cannabis pretty much anywhere. In many places in the city of San Francisco. It is really only legal in a licensed lounge or in a home that you personally own.

Everywhere else is patently illegal right now. And this creates all sort of problems for renters, for people in subsidized government housing, and it also forces people to consume in areas that are a lot less safe, for example, in a living room where there may be miners present in an automobile, places that are not safe and not good places to consume. The third reason is that we are just adding entertainment and nightlife and muffins and coffees to existing lounges.

And that's awesome. So that's a really good reason to have this. I just want to say a quick note on the specifications that are required specifically in San Francisco for a consumption lounge. They are incredibly onerous and incredibly complicated. They involve industrial strength fans that suck out air, and we have very strict rules on it. My friend is currently building one in the city of San Francisco, and it's a $140,000 ventilation system in a 1000 square foot space.

So the rigorous needs for the rigorous rules on how to actually construct these consumption lounges go a long way toward reducing the amount of secondhand smoke and smoke that may be caused by those things. So thank you very much for hearing me out today and I appreciate the opportunity.

Thank you, sir. Next, please. Thank

you for the opportunity today. My name is Jerred Kiloh. I'm the President of the United Cannabis Business Association. We represent hundreds of licenses throughout the state of California. I'm here to advocate on the advancements of cannabis consumption. Tourism and having a safe and social place to consume and interact with like minded people is the same reason why people go to a bar and pay $12 for a drink.

It's to socialize. This same consumer could have bought a bottle of vodka and gone home and had the exact same drinks by themselves. Instead, they interact with people, and that's what drives the added cost associated with being at a bar.

The restrictive nature of our regulations is making it difficult to make the cannabis lounge an experience. If we don't normalize the legal consumption of cannabis, then the unregulated portion of the industry will. The speakeasies of the world will dominate the entertainment sector of cannabis and will continue to lose consumers to illegal products and the health concerns that will follow.

The culture of California cannabis is something tourists are traveling here to experience, and that full emergent as a culture is a major reason why we have cannabis tourism. We are seeing countries like Thailand that are embracing the cannabis tourists with lounges and entertainment. Only years ago, Thailand had very punitive consequences for cannabis use and possession.

The world is adapting to the new view of cannabis. You know what you're getting into. You enter a consumption lounge just like you know what you're getting into when you enter a hookah lounge or a cigar lounge.

You don't walk into a cigar lounge and say, why is everyone smoking? Cannabis lounges has some of the most advanced ventilation systems to scrub particulates out of the air. And that is already part of cannabis lounge regulations. Mitigating harm to our customers and employees is everyone's goal.

And studies have shown that particulate counts are lower inside with the scrubbing technology systems than the air outside of an urban city. Streets outside. So is it just safe or is it safer to be inside? We are all pushing people to hide in the shadows, to consume the legal products they just purchased.

They are already allowed to bring their own food and eat in these lounges. So we are not adding any unfamiliarity to this Bill. Locals and tourists alike need this safe place to consume cannabis, needs this allowance to show support of these legally obtained products and environment that supports its consumption. Thank you and respectfully ask for your aye vote. Thank you.

Any other support? Witnesses here in room 2100 please step forward. Name, affiliation, and position on the measure only, please.

Good morning, Mr. Chairman and Members. Amy Jenkins, on behalf of the California Cannabis Industry Association and support thank you.

Thank you. Next please.

Mr. Chair and Members. Rand Martin on behalf of The Parent Company in support of this Bill. Thank you.

Thank you. Next please.

Talia D'Amato on behalf of California Normal in support. Sorry.

Thank you. Next please.

Karen Woodson with Kiva Confections in support. Thank

Thank you. Next please.

Good morning, Sam Rodriguez on behalf of Good Farmers, Great Neighbors in support.

Thank you, sir. Next please.

Hi, Pamela Epstein with Garden of Eden in support.

Thank you, ma'am. Next please, sir.

Marvin Pineda with Social Equity California in support.

Thank you, sir. Any other support? Witnesses in room 2100. Seeing none. Let's move to opposition witnesses, lead or otherwise. First, let's take lead witnesses.

Good afternoon, Members and Chair. I'm Tim Gibbs with the American Lung Association. And I want to be clear. The second hand smoke emitted from marijuana smoke is dangerous. It has many of the same carcinogens and toxins as tobacco smoke. That's not up for debate. The science is rock solid in California. We have a long history of protecting workers. We're the first state to prohibit smoking in workplaces.

Many of the organizations opposed to this Bill were around in the pass that monumental legislation that led to a nationwide movement to protect workers. So given what we know about marijuana smoke that we know that marijuana smoke has many of the same carcinogens as tobacco smoke, why are we going to roll back the clock to return to putting workers health at risk? We keep hearing many of the same arguments that were used in the keep bars and restaurants full of smoke. We hear that proper ventilation can clean up secondhand smoke.

Unfortunately, that technology does not exist. There is no technology that will remove the health risks caused by indoor secondhand smoke exposure. Another argument we hear is that people who are working at cannabis bar know what they're getting into.

But we aren't just talking about a cannabis consumption lounge. We're talking about putting a whole new class of workers at risk. This Bill would bring kitchen staff, servers, baristas and performance artists into a toxic work environment. Jobs aren't always easy to come by. Everybody's situation is different. And not everybody can just quit a job and find a new one.

This Bill would lead to some people having to choose between their health and a good job. Do you really want to go back to the days of forcing workers to serve food in smoke-filled room? The state and intent of this Bill is to provide cannabis businesses with other economic opportunities, but that should not come at the expense of worker safety. We urge a no vote on this legislation.

Thank you. Next, please. Good

Good morning, Chairman Roth and Committee Assembly Members. My name is Laurie Dubin. I'm here to express my strong opposition to AB 374 on behalf of Be The Influence, which is the California nonprofit. When Californians voted for prop 64, we did so to decriminalize cannabis, to promote social justice, ending the failed war on drugs and mass incarceration that resulted. We did not. We did not vote for drugs with muffins and coffee.

Yes, voters approved of licensed cannabis dispensaries and retail stores where adults could purchase safe and regulated products. And some jurisdictions have allowed consumption lounges. But there was nothing in prop 64 on cannabis dispensaries becoming purveyors of coffee, muffin, other foods or grocers. It's safe to say that California voters did not envision or approve of stores turning into what in effect our restaurants, bars and cafes. We were told that if we voted for prop 64, the illegal market would go away. That hasn't happened.

As a result, the cannabis industry has sought relief in many forms tax breaks, easing of regulations to which the California Legislature has been accommodating to a great extent. But now the cannabis industry is seeking to expand their business model well beyond what was envisioned for prop 64 voters. While this may help the cannabis industry financially, AB 374 will encourage and promote more use more consumption to the detriment of public health and safety.

While we may have voted for legal access of adults to cannabis, we did not vote to further driving up consumption, turning stores into cannabis cafes, restaurants and bars. Please strike the right balance and vote no to AB 374. Thank you.

Thank you. Next please. Name, affiliation, and position on the Bill only, please.

Good morning, Mr. Chair and Members. Jamie Morgan with the American Heart Association. I align my comments with my colleague Tim Gibbs and urger no vote.

Thank you. Next please. Name, affiliation, and position on the measure only, please.

So I can't say anything else?

We've had two and two. Thank you. We're going to have to unfortunately do that today.

Well. Good morning. My name is Allie Bear and I am in opposition to AB 374 on behalf of Marin Residents for Public Health Cannabis Policy. Thank you.

Thank you, ma'am. Thanks for coming. Any other witnesses in opposition? Name, affiliation and position on the measure only, ma'am.

Good morning. My name is Adwoa Akyianu, a policy advocate with Youth Forward, a nonprofit youth advocacy group here in Sacramento, and we are in opposition to this Bill.

Thank you for joining us. Thank you for your comments. Any other witnesses in opposition? Seeing none. Let's turn to the teleconference service moderator. If you would please prompt any individuals waiting to testify either in support or in opposition to AB 374. We will take them now.

Thank you. And if you'd like to speak in support or in opposition too, please press one, followed by the zero at this time. And we will start with line number 28. Please go ahead. Yes.

My name is Eric Hepner from Cornerstone Wellness and I strongly support AB 374.

Thank you. Next, please.

And next we go to line number 37, please go ahead.

My name is Adam Hijazi. I'm on the Board of Directors of the Long Beach Collective Association and we strongly support.

Next please.

And next we'll go to line number 18. Please go ahead.

Sarah Armstrong, representing the California Division of Americans for Safe Access in strong support of this worthy Bill.

Thank you. Next, please.

Next we'll go to line number 25. Please go ahead.

Good Morning. My name is Jonathan Seco. I'm the Executive Director of The United Cannabis Business Association, and I here also representing Coachella Valley Cannabis Alliance Network, the Silicon Valley Cannabis Alliance, as well as the Montebello Cannabis Business Association, all in strong support of this Bill.

Thank you. Next, please. Next we go to line number 19. Please go ahead.

Hello. My name is Armen Paronyan. I'm the President of LA Cannabis Company and I strongly support AB 374. Thank you

Thank you. Next. Next we'll go to line number 20. Please go ahead.

Hello, my name is Carlos Delatorre from the UCBA Trade Association and I am in strong support of this Bill.

Thank you. Next, please.

Next we'll go to line number nine. Please go ahead.

Give me a second. Hi, my name is Millie Limon from Cornerstone Wellness and I strongly support AB 374.

Thank you you. Next, please. Next

Next we'll go to line number 38. Please go ahead.

Hi This is Cheryl with Cornerstone Wellness. I strongly support AB 374.

Next please.

Next we'll go to line number 22. Please go ahead.

Hi my name is Gabby Hernandez from Cornerstone Wellness and I strongly support AB 374.

Thank you. Next, please.

And next we'll go to line number 36. Please go ahead. Line 36, you are open.

Please go ahead. Hello, my name is Olivia Ross and I am representing San Francisco Cannabis Retailers Alliance, Angeles Emerald California minority alliance social equity LA. And we strongly support AB 374.

Thank you. Next, please. Next.

We'll go to line number 15. Please go ahead.

Hello. I'm Liz Williams with Americans for Non-Smokers Rights. And we're in strong opposition to the Bill.

Thank you, ma'am. Next, please.

And lastly, we'll go to line number eight. Please go ahead.

Hi my name is Veronica Questell from Cornerstone Wellness and I strongly oppose AB support. I strongly support sorry. AB 374.

Thank you. Next.

There are currently no more lines in queue. Please continue.

Thank you. Moderator let's bring the matter back to the deus questions from my colleagues. Colleagues questions, anybody with a question seeing none. It's your lucky day of some of them. Would you like to close?

Thank you so much, Mr. Chair. This is ultimately a local control measure. We built in a lot of local control into how we regulate cannabis. Except we have this one size fits all prohibition on any food or non cannabis infused drinks. It makes no sense. It's hurting the legal industry. It's making it harder for folks to use cannabis safely and in a healthy way. And with that, I respectfully ask for your aye vote.

Okay, when we get a quorum, we'll take a motion and we'll take a vote. Thank you for your presentation. Next up, we have a quorum. Let's call the roll and establish a quorum. You can stay for the vote. Assembly Member first quorum.

Roth here. Nguyen here. Alvarado-Gil here. Archuletta here. Asby here. Becker. Dodd. Eggman. Niello here. Smallwood-Cuevas here. Wahab here. Wilk. Okay.

Roth aye. Roth aye. Nguyen no. Alvarado-Gil aye. Archuleta aye. Ashby aye. Ashby aye. Becker. Dodd. Eggman. Glazer. Niello aye. Smallwood-Cuevas aye. Wahab aye. Wilk.

The vote is six to one. We'll hold the roll open for absent Members. Thank you, sir.

Next item. Item number four, AB 420, Asembly Member Aguiar-Curry, Cannabis, industrial hemp.

Thank you, Chairman Roth and senators. I would also like to thank the committee staff for their work on this Bill. AB 420 clarifies that the Medicinal and Adult Use Cannabis Regulation Safety Act does not prohibit a cannabis licensee from manufacturing, distributing or selling products that contain industrial hemp or hemp derived compounds or extracts. This Bill also contains needed cleanup language that will help protect the public from adulterated hemp products which are already illegal but can still be found across the state. Hemp and marijuana are both Members of the cannabis family, but hemp is legally regulated to not be intoxicating and has higher levels of CBD.

Given the similarities, many of the products made using hemp and cannabis are manufactured using similar processes and the products are similar too. For example, CBD products can be made from hemp or cannabis and are very popular among consumers. CBD is non-intoxicating or habit forming, and provides relief from pain, inflammation, anxiety, insomnia and other conditions.

CBD products derived from hemp are widely available online at grocery stores, gas stations, gyms and other common retail locations. However, CBD is also used in many cannabis products, but cannabis manufacturers, distributors and retailers can only work with cannabis-derived CBD. Cannabis-derived CBD is much more expensive because it is subject to stricter regulation and cannabis typically has a lower CBD content.

This puts cannabis licensees at a disadvantage when selling their products. This restriction contributes to the struggle of cannabis licensees to stay afloat as they compete with the illegal market. AB 420 will enhance the viability of legal cannabis licensees in the marketplace by authorizing licensees to manufacture, distribute and sell hemp and hemp derived CBD and other products in compliance with current law.

We look forward to working with stakeholders, state agencies and committee staff as we address concerns about the best way to implement these changes. We are especially committed to further empowering our state regulators to attack the production and sale of illegal synthetic chemicals in the marketplace today. With me today is Pamela Epstein representing the California Cannabis Association and Caren Woodson of Kiva Confections. Welcome.

Welcome. Please proceed.

Thank you. Good morning, Chairman Roth, Members of the committee, and thank you, Assemblyman Aguilar. Curry for the continued leadership that brings us here today.

My name is Caren Woodson for Kiva Confections, and I'm also here on behalf of the California Cannabis Manufacturers Association to urge your support for 420. It goes without saying that we support all efforts to increase enforcement against the proliferation of intoxicating hemp products. But I'm here today to testify that cannabis manufacturers and our consumers would benefit greatly by the option to use hemp derived cannabinoids.

Several of Kiva's most popular products incorporate minor cannabinoids like CBD and CBN to create a tailored experience for the consumer. Our Midnight Blueberry Gummy combines THC, CBN, terpenes, and extracts to promote restful sleep. Likewise, our Sparkling Pear Gummy includes an unconventional ratio of two milligrams THC and six milligrams of CBD.

Both are incredibly popular products for consumers who prefer a low dose, but it is costly to source CBN and CBD from the closed loop cannabis market. First and foremost, cannabis is primarily bred to express THC instead of minor cannabinoids. And last year, given that roughly 15% of cultivators surrendered their licenses, resulted in even more scarce availability of these minor cannabinoids, and consumers are paying the price.

In April, Kiva was among the last of the major cannabis manufacturers in the state to raise the cost of our products containing minor cannabinoids. Contrary to the Assembly's to the Senate's analysis, integration is not a costly, dangerous, or complicated endeavor. 17 other states, including nine which use metric as their track entry system, already permit hemp integration into the cannabis supply chain.

And I speak confidently about this matter because Kiva produces products in those 17 states where we are allowed to use hemp inputs. Minor cannabinoids in those states source from hemp are roughly 20% to 50% cheaper than the same cannabinoids we source in cannabis. Without integration, consumer prices will continue to escalate and state revenues will continue to fall. AB 420 represents an absolute necessity and a step in the right direction, and I urge your support today. Thank you.

Thank you. Next, please.

Good morning, Chairman Roth and the rest of the committee. Thank you to Assembly Member Aguiar-Curry for leading the charge on this profoundly important issue.

My name is Pamela Epstein and I am the chief legal officer from Eden Enterprises and the President of the California Cannabis Industry. I'm here to express my support for AB 420, a Bill that strengthens the enforcement of AB 45 and promotes integration of hemp cannabinoids into the regulated supply chain.

As noted by the committee's analysis, the Department of Cannabis Controls hemp report, which was delayed six months, failed to provide a specific framework for including hemp into the cannabis marketplace as was directed by AB 45 and instead only offered a General contrast of cannabis and hemp regulations, along with desires for delay.

With the regulated cannabis industry in crisis, integration is imperative for the following reasons. First, integration of hemp cannabinoids benefits the overall supply chain. Minor cannabinoids, as you have heard, are in short supply, driving up the cost of products to consumers.

Manufacturers already produce CBD only products, low dose products, and max potency products in the same facility. The Department has yet to issue any statewide recalls due to mislabeled potency of THC and CBD. Incorporating hemp is similar to incorporating any other ingredient into a cannabis product, and metric has the functionality to handle it.

Integration maximizes facility utilization, reduces cost, and fosters innovation, making the industry more capable of competing with the illicit market. Second, integration promotes and protects public health and safety. The lack of enforcement has allowed the proliferation of intoxicating hemp cannabinoid products, posing severe public health and safety risks.

Consumers are offered unregulated, untested hemp products that are three to 33 times stronger in potency than legal regulated cannabis products. This is why the Cannabis Regulators Association wrote to Congress urging federal action to regulate intoxicating hemp derived products in the upcoming 2023 Farm Bill. Rogue intoxicating products have caused estimated losses at dispensaries as high as 30% and growing.

While the regulated industry mandates track and trace and quality control and assurance testing, intoxicating hemp products are often designed to be attractive to children and are manufactured using heavy metal and residual solvents with unenforced testing requirements.

Third, without integration, California will be unable to participate in interstate commerce. The Governor and the Department support interstate commerce with the passage of SB 1326 last year and a subsequent letter sent to the State's AG for an opinion regarding the legality of interstate commerce.

But without integration, California's regulated industry will struggle, due to high production costs and excessive fees compared to other regulated states, to lead the cannabis conversation and remain competitive, California must allow for integration. For these reasons, CCIA proudly supports AB 420 and looks forward to collaborate with the author and stakeholders on the outstanding issues, including testing parity, implementation of a per package and per serving caps, especially for edible hemp products, and further limitations on the production and sale of uber potent synthetic cannabinoids. I urge you for your aye vote today. Thank you.

Thank you. Are there any other witnesses in support in room 2100? Name, affiliation, and position on the measure only, please.

Pamela Lopez on behalf of California Normal, in support.

Thank you. Next, please.

Amy Jenkins on behalf of CannaCraft, in support. Thank you.

Good morning. Sam Rodriguez on behalf of Good Farmers, Great Neighbors, based in Santa Barbara County, in support

Thank you. Any other witnesses in support? Let's move to witnesses in opposition, lead or otherwise. Let's start with lead witnesses in opposition first. You may have two.

Good morning again. Laurie Dubin here with Be the Influence California nonprofit. Someone has to speak on behalf of youth and public health. Cannabis industry isn't doing it. Sure, they want to take over intoxicating hemp products and have it subject to less stringent regulations. It makes sense.

As you know, the Farm Bill loophole was created over a dozen states banned hemp. California did not follow this course of action, and what we have now is a plethora of hemp candies and flavored vapes that are attracted to children. And although AB 45 supposedly bans synthetic cannabinoids, it's rarely enforced worse at the time of consideration of AB 45.

The intent that the Bill would permit marketing of CBD, but not intoxicating products was crystal clear. You've heard a lot about CBD, CBD, CBD, low dose. If that were what we were talking about, I would not be here. Even the cannabis industry back then acknowledged concerns about these intoxicating hemp products. But now we have cannabis companies such as the international Conglomerate Cookies, which specializes in marketing products and designing them to attract youth. They're in the hemp line.

Their products, their hemp products by the name of Berry Pie, Honey Buns, Cereal, Milk. They sold out when introduced. There's one variant, THCP, that's 33 times more potent than traditional delta THC and poses the extreme health risk to children.

But the answer is not to let the cannabis company take over because they excel in continuing to market their products to attract kids. There are a few good things about this Bill. It takes the products away from gas stations and convenience stores.

There's now a legal age minimum requirement that was lacking, and it stops the synthetic process to develop. Synthetic cannabinoids, I think. We don't know. Right now, there are 24 different synthetic cannabinoids they're being added to every month. But this Bill does not require these products and these companies to play by the rules that the cannabis industry is subject to on marijuana.

If AB 1207 passes in its current form, it was already weakened. We're hoping, Senator Roth, that it's not going to be further weakened to take away flavored vapes and inhaled products. Then there's zero reason that the cannabis industry would not do the same for hemp.

It will continue with hemp to do what it's doing, to flavored baits with cannabis at a bare minimum. Please amend this Bill to follow the recommendations of the Public Health Institute. You should have received a letter dated June 21 to Senator Roth and committee Members, and that includes a hard cap limit of 1 package no more than 0.5 per serving of THC for any kind of hemp product, edibles inhaled products such as vapes.

This has been rejected by the cannabis industry and I hope it's amended to include this. And lastly, not enable the CDPH to authorize the marketing of artificially derived cannabis not present in nature. It does not have the staffing nor the depth of regulatory guidance that are needed to assess the safety of these chemically created cannabinoids for large scale consumption.

These are completely novel substances. We need major corrective action. We shouldn't simply be transferring these dangerous chemically synthesized products to the cannabis industry. And we can't rely on our state agencies to regulate and enforce they're not doing the job now with cannabis. They're not going to do it on hemp. Thank you very much.

Thank you, ma'am. Next, please.

Good morning again. I'd like to start with my position to oppose unless amended. So, good morning again, Senator Roth and committee Members. My name is Adwoa Akyianu. I'm a policy advocate with Youth Forward. Youth Forward is a Sacramento based nonprofit organization that advocates in support of youth health and well being.

Today, I'm here to express our concerns about AB 420 and about the larger effort to integrate hemp products into the cannabis marketplace. In 2016, when voters approved Proposition 64 and legalized cannabis, voters understood that cannabis would be heavily taxed and that the tax revenue from cannabis would be directed into youth substance abuse prevention, treatment, and other child and family services.

We are now seeing hemp products that are essentially identical or similar to products sold in cannabis dispensaries. However, these products do not carry the additional taxes approved by voters in Prop. 64. In our view, hemp products that serve the same purposes as cannabis products should be taxed and regulated just like cannabis products.

We are also concerned about the hemp products that are currently being sold in corner stores and that carry dangerously high levels of THC like properties and that do not have to follow the same regulations as cannabis products. We ask that this emerging industry be regulated and taxed according to the promises made by voters in Prop. 64. Thank you.

Thank you. Thank you very much. Any other opposition witnesses in room 2100? Name, affiliation, and position on the measure only, please.

Good morning, chair and Members. Genine Coleman with Origins Council respectfully oppose unless amended, and our concerns are outlined in your materials. Thank you.

Thank you, ma'am. Thanks for coming. Next.

Good morning again, Ali Baer in strong opposition to AB 420. Thank you.

Thank you. Thanks for joining us today. Any other witnesses in opposition in room 2100? Seeing none, let's turn to the teleconference line. Moderator, if you would please prompt any individuals waiting to testify either in support or in opposition to AB 420, 420, we will take them now.

Of course. Ladies and gentlemen, if you wish to comment and oppose or opposition, please press one, then zero. We'll be going to line 42. Please go ahead.

Hi, my name is Arnie Abramyan, representing the Armenian Trade and Labor Association, and we strongly oppose 42. Cannabis is already over taxed and overpriced.

Thank you, sir. And name, affiliation and position on the measure only. Appreciate your participation. Next, please.

There's currently no one else in the queue, Mr. Chair.

Thank you, moderator. Let's bring the matter back to the dais colleagues. Any questions? Senator Archuletta? It's been moved by Senator Archuleta. Any questions to my right? Seeing no. Hands up the motion. Well, first Assembly Member, would you like to close?

I'll just say a few words. First of all, thank you, and I will continue to work with the opposition. Anyway, the Bill came in the Assembly 79 to zero, and we've taken amendments to address many of the opposition's concerns by keeping synthetic chemicals out of hemp products and to help give DPH more authority over products coming into the state. We've been working on this Bill and these bills for five years. And it's constantly an evolving marketplace.

And as I present this Bill to you today, it will make products and practices safer and make it harder for criminals to sell illegal products. But that doesn't mean that our work is done. I assure you that I will continue to work with all the stakeholders to implement integration in a way that supports our legal hemp and cannabis industries.

Also have it further empowers our regulators to attack illegal products and protects public health. I commit that to all of you today. And I just think that one comment that was made that in the Bill THCP is illegal under this Bill as well. So with that, I respectfully ask for your aye vote.

Thank you. As I said, the motion been moved by Senator Archuleta. The motion is du pass to Senate Rules Committee. Please call the role.

Roth? Aye. Roth, aye. Nguyen? No. Nguyen, no. Alvarado-Gil? Aye. Alvarado-Gil, aye. Archuleta? Aye. Archuleta, aye. Ashby? Aye. Ashby, aye. Becker? Dodd? Eggman? Glazer? Niello? Smallwood-Cuevas? Wahab? Wilk?

Current vote is four to one. We'll hold the roll open for absent Members. Thank you. Thank you very much. Thank

Thank you Assembly Member. Next up is item number five, AB 687. Assembly Member Hart Assembly Member, you've been extraordinarily patient. Thank you for that patience.

Thank you Mr. Chair and Senators, I'm pleased to present AB 687, a measure to help cities and counties better track and regulate cannabis activity. Proposition 64, passed by the voters in 2016, established the State's Cannabis Track and Trace System. This software tracks commercial cannabis activity from seed to sale, and can provide key data for enforcement and deterrence of illegal sales and cultivation.

Local governments, who are often on the front lines of enforcement, unfortunately do not have access to this critical data set. They must either replicate cannabis data directly from licensees or regulate with limited information, making regulating cannabis costly and inefficient. AB 687 will direct the Department of Cannabis Control to provide local governments with access to the state's track and trace data.

The measure ensures the data is shared with public agencies that can aggregate, analyze, and provide necessary support for law enforcement to tackle illegal cannabis grows. Speaking in support of the Bill. With me today are Greg Turner and Kara Martinson representing the California Cannabis Authority.

Please proceed.

Good morning, Mr. Chair and Members of the committee. My name is Cara Martinson. I'm here on behalf of the California Cannabis Authority, or CCA, in support of this measure.

CCA is a local government Joint Towers Authority, a public agency that was established in 2018 by counties to assist local governments that were regulating businesses at the local level to provide them tools and additional information to help that regulatory process. Our Board of Directors, which is comprised of local officials honed in on data and access to data as really a critical component to local regulatory programs. This information is critical to validating transactions and informing compliance and enforcement efforts.

And it also helps to inform local policies and cannabis programs with the goal of bolstering the regulated marketplace and also conducting efficient enforcement. Since the passage of Prop. 64, CCA has been working with then the Department of Food and AG, which had managed the track and trace data set, then the Bureaus of Cannabis Control, and now the Department of Cannabis Control to figure out a way to efficiently share data between the state and local governments.

And unfortunately, we haven't been able to do that thus far, and that's why we're here today and what this Bill does. This Bill will provide access to track and trace data to regulators at the local level sharing this critical data set. It is protected information per Prop 64.

We are not changing any of that component. And the second component of the Bill adds zip code information for deliveries into the track and trace data set. Currently, it's just the county in which the transaction takes place.

This information is really insufficient. For example, in a county like LA that has 88 cities, just noting the county where the transaction takes place doesn't provide any necessary detail for tax purposes or compliance purposes. We do appreciate the committee's policy considerations, and we will continue to work with stakeholders and the Department to figure out the least expensive way to share this data in the most efficient manner. We request your aye vote. Thank you so much.

Thank you. Next, please.

I'm Greg Turner. I'm the Executive Director and council to CCA, and I'm just here to answer any technical questions that might come up. Thanks.

Okay, any other witnesses in support? Name, position, or affiliation and position on the measure only, please.

Good morning, Mr. Chair Members. Elizabeth Espinoza here on behalf of the Board of Supervisors in the county of Santa Barbara in support. Thank you.

Thank you. Next, please.

Good morning, Ada Waelder with the California State Association of Counties in support.

Thank you. Next, please.

Good morning. Leigh Kammerich with the Rural County Representatives of California in support.

Thank you. Any other supporters? Yes, ma'am.

I'm sorry, I was given the authority to also mention support on behalf of the county of Yolo. My colleague had to step out of the room. Thank you for your indulgence.

Thank you, ma'am. Thanks for joining us. Any other support witnesses in room 2100? Seeing none. Let's turn to opposition, both lead and otherwise. First lead witnesses? There can be two.

Marvin Pineda. On behalf of Social Equity California, I would thank the Assembly Member. I think that there's some work that needs to be done on getting some of that data to local governments.

Current law already allows for local governments to have access to the track and trace data for law enforcement purposes. The concern that we have with the Bill is that the CCA, the California Cannabis Authority, the fee they charge is about half a million dollars to each local government that gets passed on to licensees and the Bill, it's currently written. It allows for the CCA to access all track and trace data.

So for any cannabis operator, they could have access to your patient data, sales data, anything related to your business. And what can the CCA do with that data? Could use it for any locally relevant research as stated in the Bill, or to look at your operations of commercial cannabis. It's very broad.

As currently written, we think the Bill is unnecessary. It's my understanding the Department of Cannabis Control is already working with some local governments to provide this access. Social equity cannabis operators are folks that have been formally incarcerated minorities.

They are having a difficult time competing with the listed market. This increases the cost for everybody in the supply chain and licensees and all. I think it's to benefit the California Cannabis Authority. The local governments don't have that way to run this databases. So again, it's catered for one entity and for those reasons we oppose the Bill.

Thank you, sir. Next, please.

Thank you for the opportunity again, Mr. Roth and the committee Members. I respect the opportunity to talk about this Bill because I think on one side of it, it's a very important part to track and trace delivery, but on another part, it's a data grab. The coalition of licensees that have been advocating for more track and trace data to be collected to better understand and regulate the canvas sector.

We have sent many letters to the DCC to make changes in the regulations to achieve this goal, as well as communicate to stakeholders city representatives, county cannabis directors, licensed delivery companies, CDTFA and legislators. So UCBA has been very vocal in advocating the accountability to delivery companies to enter a city so that state and local taxes are properly calculated and paid. So it's very hard to sit here and oppose something we desperately need and want.

But when the cost of achieving the oversight tool is packaged with a poison pill, the cost outweigh the benefits. CCA, a joint powers authority representing seven of the 58 counties, is attempting to hide the fact that this Bill is nothing more than attempt to force the state and its cannabis licensees to give up all the private data collected by the DCC and metric. We're talking about transactional data, customer data, personal data, business data, ownership data, everything.

Now, current law allows regulators to access metric, track and taste data on its local licensees only when an enforcement action is needed. But this attempt to collect the most valuable and sensitive information is nothing more than an attempt to monetize the world's largest canvas markets, intellectual property. It is not hard to see that some of the largest tech companies in the world make their profits off of customer and business data.

Tracking the movement of products, predicting the desires of customers is commonplace for someone like Amazon and is a reason it dominates global sales. But even Amazon doesn't have access to sensitive data that CCA is requiring the state to hand over. We're talking about Social Security numbers, home addresses, criminal records, all transactional data, just to name a few, all under the guise of helping regulate local delivery.

This isn't the first time this organization has tried to hide behind a needed regulatory change to steal the cannabis industry's data. AB 1525, a banking Bill on the face, was to protect banks from local enforcement actions for banking legal cannabis businesses. And UCBA was there to expose this attempt.

And the Governor removed the CCA provision in the signing of the needy banking reforms into law. So, yes, I am triggered at this second attempt, and hopefully the last from CCA, in trying to profit off the sensitive and valuable data collected in our canvas industry. Please vote no on 687.

Thank you, sir. Any other opposition witnesses in room 2100? Seeing none. Let's turn to the teleconference. Service moderator, if you would please prompt any individuals waiting to testify either in support or in opposition to Assembly Bill 687, we will take them now.

Of course. Ladies and gentlemen, once again, if you wish to make a comment in support or opposition, please press one, then zero. We'll be going to line 19. Please go ahead. 19. Your line is open.

Hi, Armen Paronyan, President of LA Cannabis Company. I strongly oppose Assembly Bill 687. Thank you.

Thank you. Next, please.

Next we go to line 20. Please go ahead. 20, your line is open.

Hello. Carlos de la Torre, Cornerstone Wellness in Los Angeles. And I strongly oppose AB 687.

Thank you. Next, please.

Next we will go to line nine. Please go ahead.

Hi. My name is Millie Limon. I'm from Cornerstone Wellness, and I strongly oppose AB 687.

Thank you. Next, please.

Next we will go to line 40. Please go ahead. Your line is open.

Hello, my name is Javier Montes, retail shop owner in Los Angeles in strong opposition.

Thank you, sir. Next, please.

Next we will go to line 23. Please go ahead.

Hi. My name is Alex Martin from Cornerstone Wellness and I strongly oppose AB 687.

Thank you. Next, please.

Next we will go to line 45. Please go ahead.

Hi. My name is Olivia Ross. I'm representing San Francisco Cannabis Retailers Alliance, Angeles Emerald, California Minority Alliance and Social Equity LA. And we strongly oppose this Bill.

Thank you, next. We will go to line 46. Please go ahead.

Hello. My name is Nicole Randa. I am calling from Cornerstone Wellness, and like my colleagues, I also strongly oppose EB six, eight, seven.

Thank you. Next, please.

Next we'll go to line 25. Please go ahead.

... My name is Jonatan Cvetko, Executive Director of the United Cannabis Business Association. Also ... in representation of the Long Beach Collective Association, the Coachella Valley Cannabis Alliance network, the Silicon Valley Cannabis Alliance, and the Montebello Cannabis Business Association, all in strong opposition to this Bill. Thank you.

Thank you. Next, please.

Next we will go to line eight, please go ahead. Your line is open. Next we'll go to line 22, please go ahead. Thank. Next, please.

Next we'll go to line 31. Please go ahead.

Hi. Good morning. This is Kika Keith with Gorilla RX Wellness Co as well as the Social Equity Owners and Workers Association, and we strongly oppose AB 687.

Thank you. Next, please.

Next we'll go to line 28. Please go ahead.

Hello. My name is Eric Hepner from Cornerstone Wellness and I strongly oppose AB 687.

Thank you, sir. Next, please.

Next we'll go to line 48. Please go ahead.

Hello. My name is Arnie Abramyan with Armenian Trade and Labor Association and we strongly oppose AB 687.

Thank you. Next, please.

Next we'll go to line 39. Please go ahead.

Thank you. I'm Louis Harris of Uncle Lou Farms, and I strongly oppose AB 687. Thank you.

Thank you. Next, please.

There's currently no one else in the queue, Mr. Chair.

Thank you, Moderator. We'll bring the matter back to the dais. Before I ask my Colleagues for questions, maybe, Assembly Member, I could ask you to just cover a couple of items for me.

One, what I think I understand the argument in opposition to be with respect to access to equal access to data, in other words, does a local government entity have to be a member of the Joint Powers Authority, California Cannabis Authority, in order to access the data? And then perhaps you could address the items in the policy issues for consideration section of the analysis, specifically access to appropriate data as opposed to the other, and then safety of the data that is going to be maintained in terms of access or inappropriate access.

And then the interoperability issue where the bill attempts to ask the DCC to support interoperability when we in fact, have multiple local jurisdictions that have their own IT systems that perhaps should be conforming those systems to our system at the state level.

Thank you for those questions. The answer to the first one is no. The local agencies do not have to be a member of the California Cannabis Association--Authority to get full access to the track and trace data through this bill, and the questions about data and how best to protect that, while at the same time providing the access that local governments require, I certainly am open to working with the stakeholders to find that right balance between the data that's necessary for local governments to more effectively tax and regulate legal cannabis.

As you've heard today, there's a struggle between the legal cannabis market and the illegal cannabis market, and we want to be able to help local governments to support legal cannabis operators.

Well, should the bill move forward, given the emphasis in this building on privacy and privacy issues this year and in years past, I would certainly ask that you do that. With respect to data breach, safety, and the scope of access, the implementation date, since we're dealing with some version of a computer system and IT and software and implementation, I'd ask that you consider whether the current date, assuming it provides one, is adequate, or if there should be a delay in implementation, and also consider the interoperability piece and which end of the process we need the interoperability to start first: local jurisdiction or here at the state level?

Colleagues. Questions? I guess I didn't generate any. Assembly Member, your lucky day. You can close.

Thank you, Mr. Chair. I respectfully request an aye vote.

Okay. Do we have a motion on Assembly Bill 687? Senator Wahab moves the bill. The motion is 'do pass to Senate Appropriations.' Please call the roll.

Roth? Aye. Roth, aye. Nguyen? Aye. Nguyen, aye. Alvarado-Gil? Aye. Alvarado-Gil, aye. Archuleta? Aye. Archuleta, aye. Ashby? Aye. Ashby, aye. Becker? Dodd? Eggman? Glazer? Niello? Aye. Niello, aye. Smallwood-Cuevas? Wahab? Aye. Wahab, aye. Wilk?

Bill has seven votes. We'll hold her open for absent Members. Thank you, sir.

Next item. Item number 6, AB 1111. One, one, one, one. Assemblymember Pellerin. Cannabis: small producer event sales license.

Thank you so much, Mr. Chair and Members. AB 1111 would provide small and equity cultivators with the opportunity to apply for a Department of Cannabis Control license that would authorize them to vend their products at licensed, state, temporary cannabis events. Under existing law, these events must be organized by a cannabis event organizer who is licensed through the DCC, and each individual event must receive authorization from both state and local government, thereby making sure there's local control.

These events are subject to extensive regulation, including regulations on packaging and labeling, track and trace, and prohibitions on underage sales. Additionally, each of these events must be authorized by the DCC at least 60 days before the event is scheduled to be held. While AB 1111 would most directly impact small and equity cannabis producers, its positive effects would extend to the local cannabis market as a whole.

Sales by craft producers at cannabis events will drive additional sales through licensed distribution and retail outlets. And craft producers selling at cannabis events will have a strong incentive to direct customers to legal retailers where they can buy more of the product that they purchase. With me to testify in support today is Genine Coleman, who's the Executive Director of Origins Council and Madison Shockley, President of Cannabis Equity Policy Council and the owner of CADRE, a licensed social equity retailer in Los Angeles.

Good afternoon. Please proceed.

Good afternoon, honorable Chair and Members. My name is Genine Coleman. I'm the founder and Executive Director of Origins Council.

We represent 800 small and independent licensed cannabis businesses across rural California. Predominantly our membership are historic, small-scale medical cannabis farming families who transitioned into the regulated market upon legalization. California's small cannabis farmers are world-renowned for producing the world's highest quality craft cannabis.

However, small and equity farmers currently face severe challenges in the legal cannabis market due to collapsing wholesale prices, high compliance costs, and barriers to entry and market access. In other sectors of specialty agriculture such as wine, beer and coffee, state and federal law provide appropriate opportunities for direct-to-consumer sales in a variety of familiar forms, including microbreweries, wine tastings, and farmers market sales. For small producers who lack access to vertical integration, marketing budgets, and sales teams, these allowances are critical to their success.

AB 1111 would conceptually mirror these approaches, but only within the specific, limited and highly controlled Temporary Cannabis Events framework that has been well established within California law since 2018. Temporary cannabis events are organized by cannabis event organizers, licensed by the Department of Cannabis Control, and each proposed event must also receive both an individual state license from the DCC and explicit authorization from the local jurisdiction in order to proceed. To provide some context according to a January 24th public records request from the DCC, between the years of 2018 and 2022, there were a total of 65 cannabis events held in California within only 16 different jurisdictions.

None of these cannabis events were held in Los Angeles or Orange County. Indicative of local control. AB 1111 would not change anything regarding how these events are regulated.

It would not affect the absolute local control that jurisdictions have to authorize and regulate events or ban events. Instead, AB 1111 would simply provide small and equity cultivators within a limited opportunity to vend in these events alongside nearly 2000 retail delivery and microbusiness licensees that currently hold this eligibility. We're proud of the broad coalition in support of this Bill, which includes more than 35 diverse organizations representing small producers, equity businesses, licensed cannabis retailers, patient and consumer advocates, veterans groups, and local governments.

We ask for your support today to provide equitable opportunity for California's world renowned craft cannabis producers. Thank you so much for the opportunity.

Thank you, ma'am. Next, please.

Hello. My name is Madison Shockley III. I'm a social equity retail licensee from Los Angeles and I serve as the President of the Cannabis Equity Policy Council, which represents over 400 social equity entrepreneurs and advocates across the state. Like small cannabis farmers, most equity licensees are small businesses that lack the scale and resources of large venture, capital-backed corporations.

And just like many small farmers, we struggle to get access to the market. And if we are so lucky to get into the market, the struggle to stay in business in the current market conditions is tremendous. That's why we are seeing most businesses hanging on by a thread or collapsing under the pressure.

Large corporations are running laps around us while we struggle year after year with the cost of red tape and operating compliantly. For social equity farmers both urban and rural, the opportunity to promote their brand at these farmers market events and sell directly to consumers can mean the difference in making payroll that month for a lot of these businesses. The state needs to do everything it can to help these businesses succeed, and this Bill is one of those solutions that will make a difference on the ground for small businesses.

I support the proposed equity definition amendments to this Bill because social equity can look different from community to community. The original equity definition from Senator Bradford's SB 1294 states that a local equity licensee means a person who has obtained a license from a local jurisdiction to engage in commercial cannabis activity within the jurisdictional boundaries of that jurisdiction and who meets the requirements of the jurisdiction's local equity program. This definition is the best option we currently have in legislation.

Now, over the past few years, we've watched as the established cannabis companies have opposed bills that would help smaller independent businesses be more competitive. This is another one of those instances. There's been a lot of fear mongering about the potential impact of this Bill to equity entrepreneurs.

Some will tell you that this Bill would undermine hundreds of equity entrepreneurs. But the lion's share of those equity entrepreneurs are in Los Angeles, where the city currently doesn't allow cannabis events at all. And as a small equity business, I'm proud to stand by small farmers and advocate for AB 1111 in hopes that it extends a lifeline to our social equity farmers and small outdoor farmers whose legacy we stand on today.

A lot of these businesses are barely holding on. This is something that the state can do to help those businesses survive. A lot of opponents to this Bill are coming out of Los Angeles.

I come out of Los Angeles, and LA doesn't even allow these events. And so holding up this Bill is holding up small farmers from doing these events in their local communities, which are often rural counties up in Northern California. And to have folks from LA prevent them from doing these events there because they're not allowed in Los Angeles, I think is not fair and is not healthy and is just putting down other cannabis companies while we need to be working together and supporting each other instead of putting each other down. Thank you.

Thank you for joining us today. Next please, in support.

Good afternoon. Sam Rodriguez, on behalf of Good Farmers Great Neighbors, sun grown cannabis farmers about 110 miles north of LA, in strong support.

Thank you, sir. Next, please.

Good afternoon. Lee Camerich with the Rural County Representatives of California in support.

Thank you. Next, please.

Good afternoon. Ada Waelder with the California State Association of Counties in support.

Thank you. Next, please.

Hi there. Pam Lopez on behalf of STIIIZY in support.

Thank you. Next, please.

Good afternoon. Karen Wilson on behalf of Kiva in support.

Thank you. Next please.

Chair Members. Range Martin on behalf of the parent company, one of those large companies that actually supports its small allies in support of this Bill.

Thank you, sir. Next please.

Izzy Swindler on behalf of Humboldt and Mendocino County Board of Supervisors in support.

Thanks. Next please.

Talia D'Amato on behalf of California Normal, also in support. Thank you.

Thank you.

Amy Jenkins on behalf of the California Cannabis Industry Association and CannaCraft in support.

Thank you, ma'am. Any other witnesses in support? Now let's turn to witnesses in opposition, lead or otherwise. First lead witnesses in opposition. If there are any. We get two.

Good afternoon, Chairman Roth and Committee Assembly Members. I am, again, Ali Baer representing Marin Residents for Public Health Cannabis Policies, and I am in strong opposition of AB 1111. If enacted, AB 1111 will undermine the intent of Proposition 64 to protect children and youth from cannabis marketing.

While most Californians voted for Prop 64, many of us did so to protect communities of color from incarceration rather than to encourage increased consumption. Interestingly, California in Sausalito, known for its Sausalito salty culture, recently voted no by 75% against local cannabis retail storefronts, while they also were one of the largest proponents of Prop 64. In addition to public health and safety concerns like drugged driving, the National Institute of Drug Abuse shows that cannabis is the drug other than alcohol that is most often found in the blood of drivers involved in crashes.

Other than this major public health and safety concern, one key reason for the resounding no vote in Sausalito was the need to protect youth from the misperception that cannabis is harmless. Data shows that high potency cannabis products are causing an alarming increase in both addiction and mental health illnesses, including psychosis and suicidality, in both adults and youth. Yet despite this data, the cannabis industry blatantly targets youth with products like Lucky Charms, colored cannabis, marshmallow treats, and smell-proof school backpacks.

We oppose AB 1111 primarily because it will further expose youth to this type of cannabis marketing at temporary events like fairs and festivals and farmers markets. Normalizing cannabis consumption at family events further generates the misconception that cannabis is harmless, despite increasing data proving that today's high-potency THC is definitely not. Please do not sacrifice our public health and safety by allowing the cannabis industry to turn family-oriented events into new marketing and consumption opportunities. Please vote no on AB 1111. Thank you very much.

Thank you for joining us, ma'am. Next please.

Thank you for this third opportunity to communicate today. So this is the third time this Bill has been brought to the legislator over the past five years, and each year it's highly divisive. It's cultivators who are trying to monopolize the entire supply chain by undermining the purpose and intent of Prop 64 by obliterating the line between license types and taking a self-serving approach to where the line is drawn.

These clearly defined roles are a checks and balance built throughout the supply chain to properly regulate and enforce the intent of Prop 64, and there are a thousand retailers that would object that this does not further that intent. Not a single economic calculation, estimation, postulation, or even fabrication has been provided to establish the benefits of this Bill to a system that is struggling to find a competitive price that will entice consumers away from an illicit and unregulated market. If this Bill talked about opening new markets instead of redistributing the limited and existing revenue, then we can talk about raising all ships.

Why would we allow thousands of cultivators to flood existing retail markets? A report from CDTFA just came out saying that almost 300 retailers did not file their first quarter excise taxes, showing the trend that demand for legally priced products is waning. We removed cultivation taxes through AB 195 in an effort to support the cultivation sector of the supply chain. Now we're being asked once again to prop up the cultivation sector by giving preferential treatment to one portion of the supply chain at the depriment of another.

We don't need the oversupply created by the cultivators to now be an oversupply of retailers in existing retail markets. If we were able to look past the violations of Prop 64 and we humor the idea of thousands of cultivators flooding existing retail markets, we have asked the author for ten possible amendments to get a more equitable and equal playing field for all special event retailers and none of them were accepted. One amendment asked for a limitation on the number of days any one location could be open for special event retail.

So we don't have a perpetual farmers market every weekend. Where are the resources for enforcing the 60,000 days these temporary retailers will be entering the marketplace? I don't see a budget that oversees all the diversion opportunities in this appropriation analysis. Now, I'm not pointing a finger to any one cultivator, but when the majority of the flower grown in the state doesn't end up in the regulated market, then I'm just following the statistical probabilities that not all of them are following the law.

Before we have another handout or bailout to the sector of the supply chain that keeps growing ten times more product than is purchased by the legal cannabis market, let's start lowering the costs and hardships to the consumer facing portion of the cannabis industry before we kick open the door for cultivators to divert their excessive production to consumers who will be confused about why this cultivator was a legal retailer one day and the next day they are delivering unregulated canvas products to their door for half the cost of the regulated market. If you haven't heard yet, Mendocino County has had multiple farmers markets in the last nine months where multiple farmers were displayed and where retailers were there to accept the payments and do all the retail sales.

So the system is currently working, but this group would like to have it all and cut out social equity and mom and pop legacy retailers that have also struggled through illegalization for their own personal gain. Let's make it clear: Los Angeles is the largest retail market in the state and we have been in close communication with all city council members in an effort to increase the number of possible licenses that would include special events. So when you hear that Los Angeles is not included in the special events sector currently, well, we're looking at four to six months before they are.

And I don't want to have to go to the city of Los Angeles, which I've already done, and make them create legislation and regulations to limit or enforce no outside retailers inside the city of Los Angeles. We are also asking multiple cities, eleven of which have had special events, that also have very robust retail markets. Now, if we're going to ask those currently existing retail markets where all the special events are currently approved, to now have the undue competition that is definitely there from thousands of cultivators moving into those communities.

If I had a line outside my door waiting for demand to come into my legal retail space, then I would accept the fact that we need as many retailers in the state as possible. This does not raise all ships. It puts a lot of pressure on social equity applicants.

And I'm unfortunate to say that I thought we had already established two of our opposition to this Bill to come up and speak. And unfortunately, one of the Members of our social equity groups, who's also a retailer in Los Angeles, would also like to communicate about this. But he will be here to only say, "me too."

Thank you for your opportunity to discuss this. This is a highly divisive Bill, and I do not think we should be favoring one sector of the supply chain at the detriment of the other. Please vote no on AB 1111 for the third time. Thank you.

Thank you. Next, please. Name, affiliation, position on the Bill?

Laurie Dubin, affiliated with Be The Influence, in opposition of 1111. Thank you.

Thank you, ma'am. Next, please.

Charles Lockett, social equity operator in Los Angeles, Board Member of Social Equity Owners and Operators, and we're in opposition of Bill AB 1111.

Thank you for joining us today. Any other opposition witnesses in room 2100? Seeing none. Let's turn to the teleconference service. Moderator, please prompt anyone on the line wishing to testify either in support or in opposition to this measure and we'll take them now.

Of course. Ladies and gentlemen, if you wish to make a comment, in support or opposition, please press one, then zero. We'll be going to line 34. Please go ahead.

Hi. My name is Joanna Stranikin. I'm a UFCW local seven seven employee at LA Cannabis Company. I oppose AB 1111.

Next we go into line 53, please go ahead.

My name is Sheena Broom, and I am here on behalf of Gorilla and I oppose of this Bill.

Next we go into line 54. Please go ahead.

Hi, Diana Delgado, on behalf of First Day Foundation, Inc, in opposition to AB 1111. Thank you.

Next please.

Go into line 44, please go ahead.

Isabel Feliz on behalf of La Población de Buena Salud. AB 1111.

Thank you. Next, please.

Next, please.

Next, we go into line 12. Please go ahead.

From Cornerstone Wellness and I strongly oppose.

Thank you. Next, please.

Next, we go into line 49. Please go ahead.

Hello. My name is Eric Hepner. I'm from UFCW and I strongly oppose Bill AB 1111.

Thank you. Next, please.

Next, we'll be going to line 25. Please go ahead.

Hello. My name is Jonatan Cvetko. On behalf of the United Cannabis Business Association, the Long Beach Collective Association, the Coachella Valley Cannabis Alliance Network, the Silicon Valley Cannabis Alliance, and the Montebello Cannabis Business Association, we all strongly oppose AB 1111. Thank you.

Thank you. Next, please.

Next, we're going to line 27. Please go ahead.

Hi. My name is Keenan Trotter, a USCW Local 770 employee at LA Cannabis Company. I oppose AB 1111.

Thank you. Next, please.

Next, we go into line 19. Please, go ahead.

Hello. My name is Armen Paronyan, President of LA Cannabis Company, and I strongly oppose AB 1111. Thank you.

Thank you. Next.

Next we're going to line 23. Please go ahead.

Hi. My name is Alex Martin. I'm from Cornerstone Wellness. I strongly oppose AB 1111.

Thank you. Next, Moderator.

Next, we'll be going to line 8. Please go ahead.

Hi. This is Baronique Questow with Cornerstone Wellness strongly opposing AB 1111.

Thank you. Next, please.

Next, we're going to line 58. Please go ahead.

Hi. This is Kelsey Fernandez with Marin Healthy Youth Partnerships. I oppose AB 1111. Thank you.

Thank you, ma'am. Next, please.

Next, we'll be going to line 20. Please go ahead.

Hello. Carlos de la Torre with staff representing the UCBA Trade Association in the Higher Path, and I strongly oppose AB 1111.

Thank you. Next, please.

Next, we're going to line 46. Please go ahead.

Hello. My name is Nicole Randa. I am a member of the UFCW cannabis workers union, and like the CBA, I also strongly oppose AB 1111.

Thank you. Next, please.

Next, we'll go to line 13. Please go ahead.

Hello. My name is Lynette Medino Rhianna. I am a UFCW Local 770 employee at LA Cannabis Company. I strongly oppose AB 1111.

Thank you. Next witness, please.

Next, we'll go to line 48. Please go ahead.

Hi. My name is Arnold Abramyan, Armenian Trade and Labor Association, and we strongly oppose 1111.

Thank you. Next, please.

Next, we'll go to line 56. Please go ahead.

Hi. My name is Olivia Ross on behalf of San Francisco Cannabis Retailers Alliance, Angeles Emeralds, California Minority Alliance, and Social Equity LA, and we strongly oppose AB 1111.

Thank you. Next witness.

Next, we'll go to line 57. Please go ahead.

Hi. My name is James Dardy. I'm calling from Life Development Group in Los Angeles. I'm calling to say that I strongly oppose AB 1111. Thank you.

Thank you. Next.

Next we'll go to line 22. Please go ahead.

Hi. My name is Gabby Hernandez from Cornerstone Wellness, and I strongly oppose AB 1111.

Thank you. Next witness.

Next, we'll go to line 40. Please go ahead.

Hello. My name is Javier Montes, retail shop owner in Los Angeles and recently licensed in the City of Corona, strongly opposing AB 1111.

Okay, thank you. Next, please.

Next, we'll go to line 55. Please go ahead. Next we'll go to line 61. Please go ahead.

Hi. My name is Martin Gutierrez from the Healing Tree in Lake Elsinore and I strongly oppose AB 1111.

Thank you. Next, please.

Next, we'll go to line 16. Please go ahead. Next we'll go to line 31. Please go ahead. 31, your line is open.

Next, please.

Next, we'll go to line 26. Please go ahead.

Hi. My name is Rolene Hernandez, a UFCW Local 770 employee at LA Cannabis Company, and I oppose AB 1111.

Next, we'll go to line 11. Please go ahead.

Hi. My name is Alondra Garcia. I'm a UFBW Local 770 employee at LA Cannabis Company and I oppose AB 1111.

Thank you. Next witness, please.

Next, we'll go to line 39. Please go ahead.

Okay. Yes. My name is Louis Harris with Uncle Louie's Farms, and I oppose this. Thank you.

Thank you. Next.

Next we go to line 63. Please go ahead.

This is Ivan Teran Reyes, Los Amigos de la Comunidad from Imperial County opposing AB 1111. Thank you.

Thank you. Next, please.

Next we'll go to line 62. Please go ahead.

Hi. My name is Sarah. I am a UFCW Local 770 employee at LA Cannabis Company. I oppose AB 1111.

Thank you. Next witness, please.

And there's currently no one else in the queue, Mr. Chair.

Thank you, Moderator. Let's bring the matter back to the dais to my Colleagues for questions. Any questions?

Mr. Chair?

Yes, ma'am.

I just received a text message from the advocate for UFCW. She's trying to call in but was not able to get in. She asked me to clarify for the Committee that UFCW is neutral on this bill.

Thank you. Senator Ashby.

I mean, I think I want to speak. Okay. First of all, this is a great author. You have a wonderful author who I can see what you are trying to do here and I applaud that effort. Having worked at the local level for the last twelve years, I've walked through cannabis implementation all the way from medicinal to where we are now in Sacramento--has been a bit of a front runner in a lot of these issues and does host these events and is one of the large cities that does it.

I actually have quite a bit of experience in this area, although I'm not sure this is something anyone ever sets out to work on intentionally, but it's kind of one of those things we still have to work out, and I think the problem with this bill is that both sides want the same thing and they don't agree on whether or not this will make it better or this will make it worse, and I really think that's the issue.

I think most people agree that we want to make sure we get the equity folks a chance in, and I know at the local level, we made a lot of decisions that I personally felt were going to hurt the equity community.

One of those, though, was flooding the market. Sometimes when you have too much in the market, it floods out the people that you're really trying to elevate up inside of that market. That definitely happened in Sacramento and it's very difficult to recuperate from because you can't just kick people out of the market once they're in.

And so what's challenging about this is you have Mr. Shockley get up and speak, who very eloquently talks about being an equity provider or grower and retailer, et cetera, who's for this, and then you hear from several equity folks both on the phone and here in person who are opposed, and I think that's because it's unclear whether or not implementation of this will hurt or help the equity groups that have taken a lot of personal financial risk to jump into this market, and then you hear from Mr.--I don't know if it's Kylo.

Is it Kylo? Mr. Kylo, who very clearly lays out the policy argument, and for me, your words are really--that's very succinct with what I think most city folks would say. I know that there were several people in favor who said this supports local control but it really doesn't because if you switch your licensing to the state, then the state is the oversight entity and at the local level there are different oversights for retailers versus growers.

But on the other hand, a lot of times growers and some cities and regions haven't gotten into the place where vertical integration is really possible for everybody, but that would be ideally the way to do this. I mean, ideally the way the State of California should set out to achieve these goals about the market and rightsizing the market is through vertical integration where the growers are working with the retailers who are working with all the different groups, right? And especially as we get into delivery and all these other aspects that are still ahead of us in this emerging market.

But I'm having a really hard time with how adding 4,000 new entities licensed by the state would help equity. Mr. Shockley's comments were so strong, but I just am having a hard time with believing that this in implementation--I know here in Sacramento actually think it would knock out equity providers who've done the extra work to get that retail license or to move themselves into a vertical integration system with somebody else who has a retail license, and then they're being the grower.

So I wish it was clearer, at least to me. Maybe I'm just a new Senator and not seeing it real clearly, but from my local hat, I'm having a hard time seeing how this supports local decision making because it doesn't. It takes code enforcement and local business licensing completely out of the mix. So no local oversight for standards. It does allow the permitting, but permitting is just about events.

That's not like an ongoing deal where you're coming out and making sure people are paying their taxes and being held to the same standards as the other people who are allowed to be doing retail. So I do think it's a slippery slope. I think it pulls away from local control, and ultimately, I guess for me, at the end of the day, I think it hurts the equity entities, which is what I'm trying to cast my vote for.

So I'm going to lay off today, but I'll keep my eyes on it and see if there are changes made or other people up here have advice and if it comes to the Senate floor, and I think there's been some change to it because I really appreciate what you're trying to do. I see that very clearly.

Yeah, it's really keeping it small, keeping it local, supporting our local equity cultivators and giving them an opportunity to sell directly to consumers, and what was said earlier, this is not going to occur at a farmers' market alongside of you selling, buying your vegetables.

This is going to be a special event that's highly regulated. Only people 21 and over can come in. There's packaging regulations as well, and limitations on how much people can buy, limiting it to an ounce.

So that's why we're feeling that this kind of an event will then entice somebody then to say, 'hey, I like that. That helped with that pain in my back I've been experiencing, so I'm going to go to the retail store and buy some more.'

Sure. We do have those kinds of events in Sacramento. They are permitted here. It's just that I think adding those additional 4,000 businesses would hurt the companies that are already in the mix that are trying to feed that market. So that's just where I'm at.

Yeah, and I get it because the events won't occur unless the local jurisdiction says, 'yes, we want them there,' and so if Sacramento didn't want them, then they don't have to--

Exactly.

Assembly Member, let me just ask a quick question. Did you explore reducing the number of total event days below 32 to see if that addressed any of the objections?

We arrived at 32. Do we have--yeah.

Mr. Chair, Mark Smith on behalf of Origins Council, Principle. Testified earlier. We arrived at 32 days because of an Assembly B&P Committee amendment request. Originally, we proposed the ability to do this at temporary licensed cannabis events no more than twelve times a year. So one a month. The B&P Committee suggested eight events.

Events may be as long as four days. So eight events times four days leads to 32 days total. So the 32 days reflect the amendment that was requested by the Assembly B&P Committee.

I see. Thank you. Well, we don't negotiate amendments from the dais, but I just was curious. Thank you. Colleagues, any other questions? Senator Becker.

Thank you. I just wanted to first, I also have a tremendous amount of respect for the author and appreciate what you're trying to do here. I also, however, have concerns.

It just feels like this is not my area of expertise, I'll admit, but it feels like we've had a lot of conversations about how retail is struggling. We've also had a lot of conversations about how the state is struggling and enforcement is struggling. So just kind of on those pieces, it feels like the wrong time to do this.

We're trying to get the retail market to compete with the illicit market, and again, we're struggling to do that, but we have a lot of stuff we're trying to do over this current session and then we all know how the state is struggling in enforcement.

So adding a lot of other significant regulations that seem pretty complicated, it just doesn't feel like this is a time. I do have a concern. I do appreciate the comments that were made by the opposition of potentially having this at a farmers' market and whether that opens that opportunity or not, I appreciate what you're saying.

That makes me feel better that it's sort of a separate kind of special event, but with limitations, but again, I just still have concerns. I'm just not sure this is the right opportunity. So I apologize. I do have to leave for a budget briefing, but I'll probably be staying off of this, but I'll look forward--I'll be open to it going forward.

Thank you, Senator. Any other questions? Seeing none, Assembly Member, would you like to close?

Yes. Thank you. So, as I previously said, this is a bill that's going to help our local, small equity cultivators. This is not going to drive out retailers. It's actually going to drive business to the retailers. Think about going wine tasting. You enjoyed that bottle of wine that you had or that sip that you had and you're taking down the label and then you're going to go to your local retail outlet and buy some more of it for an event you're going to do.

So this is what we're hoping to plant these seeds and allow for our local, small growers to stay in business. So I respectfully ask for your aye vote.

Let's see if we have a motion. Do we have a motion on the bill? We have a motion by Senator Archuleta. The motion is 'do pass to Senate Appropriations.' Please call the roll.

Roth? Aye. Roth, aye. Nguyen? No. Nguyen, no. Alvarado-Gil? Archuleta? Aye. Archuleta, aye. Ashby? Becker? Dodd? Eggman? Glazer? Niello? Aye. Niello, aye. Smallwood-Cuevas? Wahab? Wilk?

Current vote is three to one. We'll hold the roll open for absent Members. Thank you.

Thank you very much.

Item Number Seven: Assembly Bill 1182. Assembly Member Petrie-Norris. Proceed when ready.

Good afternoon, Mr. Chair and committee Members. Pleased to join you today to present AB 1182. The goal of AB 1182 is to maximize the federal dollars that California receives over the next several years as part of the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022, particularly for climate infrastructure projects and climate innovation.

As we all know, the IRA and the IJA represent a truly unprecedented opportunity for California. This historic multitrillion dollar investment, as I said, is a historic opportunity. There's billions and billions, hundreds of billions of dollars on the table for California, for a number of our pressing priorities to rebuild our transportation infrastructure, rebuild our water infrastructure and critically, to invest in climate infrastructure and to incentivize climate innovation and the kinds of innovations that are critical both for California to achieve our climate goals and also to ensure that we are the birthplace for the breakthroughs and the innovations that are going to enable us to achieve our climate goals on a global scale.

So in order for us to make the Hut promise a reality, we've got to ensure transparency, efficiency and effectiveness of State IIja and IRA funding across tax, fee and rate programs in the context of our state's ambitious energy and climate goals. And to do that, we need a comprehensive plan. AB 1182 will require the Department of Finance, in conjunction with the Governor's annual budget planning process, to create and submit a decarbonization funding plan to the Joint Legislative Committee on Climate Change.

In doing so, AB 1182 will provide information about how effective our state's current processes and procedures are at providing stakeholders with access to federal and state funding. I believe this information is absolutely critical for the Legislature as well as the public in the planning of projects necessary to build the climate infrastructure that we need to achieve carbon neutrality and to ensure that California delivers on our clean energy and climate goals. So pleased to be joined today by Mik Skvarla, who is joining us from the California Council for Environmental and Economic Balance.

Please proceed.

Hi. My name is Mik Skvarla. I'm here on behalf of the California Council for Environmental and Economic Balance, a business labor organization here. California's commitment to climate change is world leading, and this unprecedented opportunity, once in a lifetime, once in a generation opportunity from the Feds highlight the opportunity for us to pursue and receive these funds if we can leverage some of the state incentives which are siloed across multiple agencies, boards, departments, commissions. And what we're asking for in AB 1182 is an annual kind of look back as part of the budget process in order to allow us, the Legislature and the public to better interact with the multitude of funds in order to ensure that we're leveraging these things effectively and efficiently, bringing more home to California where we do have the ambition and we have the plans.

In the Scoping plan, the Integrated Energy Policy Report, the Iper and so on, from the electrical infrastructure, transportation to the decarbonization of our industries and residential and commercial spaces. It's absolutely needed in order to kind of meet the moment and leverage those dollars. So to that end.

We are here in support, and urge the committee's support and here to answer any technical questions if needed.

Thank you for joining us. Any other witnesses in support? Seeing none, let's turn to witnesses in opposition, lead or otherwise, here in room 2100.

Any witnesses in opposition? Okay, let's go to the teleconference service moderator. Please prompt anyone waiting on the line to testify either in support or in opposition to Assembly Bill 1182, and we will move forward with them.

Ladies and gentlemen, to comment on AB 1182, please press one, then zero. At this time. Mr. Chair, we have no callers in queue.

Okay, let's bring the matter back to the dais and my colleagues for questions. Any questions? Okay, I think I'll give this one to Senator Ashby, Senator Archuleta, but thank you for your effort. Assembly Member, would you like to close?

I will just close by respectfully asking for your aye vote.

It's your lucky day. We do have a motion by Senator Ashby. The motion is due passed to Senate Appropriations. Please call the roll.

Roth aye. Nguyen. Alvarado-Gil aye. Archuleta aye. Ashby aye. Becker. Dodd. Eggman. Glazer. Niello no. Smallwood-Cuevas aye. Wahab. Wilk.

Current vote is five to one. We'll hold the roll open for absent Members. Thank you, ma'am. Next up, item number eight, Assembly Bill 1369. Assembly Member Bauer-Kahan.

Hi Members. How are you? Happy Monday.

Here to present AB 1369, a Bill that expands healthcare options for terminally ill patients. This Bill came to me when a dear friend of mine's husband was terminally ill with a very rare type of cancer. He has two beautiful children, about my kids age, and was given very little time to live.

He was told he had no options. There was only one other person in the country, in New York, who might have been able to help give him a little more time with his kids in order to get that care. He got on a plane, incredibly sick, traveled to New York, ended up in the emergency room, hospitalized from the travel and what that did to his body, and eventually was able to see the doctor.

When my friend walked in with her husband to the doctor, the doctor said, god, I wish you were somewhere else in California. You could have done this via telehealth. She called me, as you could imagine, very shortly thereafter, to say, how is this possible? How did this state make me travel with my dying husband to get the care he needed? And that began the journey that is AB 1369.

He's no longer with us, but we can do for other people what we didn't do for him, which was give him the dignity to get a second opinion, to get a second chance. Without getting on a plane and almost losing those extra months because the travel was too hard on his body. So this Bill is really simple.

It allows terminally ill patients to seek telehealth out of state for their last options. With me today in support is Kelly Goss with the ALS Association who will also be reading a statement from an impacted person. Kelly?

Thank you Assemblywoman. Thank you Chairman Roth and Members of the committee. My name is Kelly Goss, I'm with the ALS Association and I'm pleased to provide comments and support of AB 1369 which creates a narrow exemption to allow virtual care for outstate physicians who are licensed in another state for a small and highly vulnerable patient group such as those living with ALS. As you may know, ALS is a rare terminal progressive neurodegenerative disease in which one's body continually loses muscle functionality until or death.

The mean survival time is two to five years from diagnosis and the progression rate and range and variance of symptoms that present varies among patients. But one thing is clear people with ALS become increasingly dependent on round the clock care as their disease progresses and their mobility declines so such that travel even to a local ALS clinic for care can be grueling and sometimes even impossible. Needless to say, not surprisingly telehealth has been a game changer for this patient population in conjunction with physical assessment and evaluation and it's an effective tool in providing care especially when access to facilities is limited for those who reside in rural areas and when in person visits aren't necessary.

Telehealth eliminates the physical burdens and the safety risks of travel for immunocompromised terminally ill patients and greatly reduces travel costs to patients and caregivers who must accompany them. Many ALS clinics within California and there are close to 30 clinics and elsewhere continue to utilize telehealth for this very reason. It's not uncommon for terminally ill patients including ALS patients to receive in person care from out of state provider.

In the statement that provided to the committee previously we talked about the reasons why. The primary reasons are when treatment is only available outside of California as is the case with many rare diseases and maybe the case with someone's friend that she mentioned to obtain an unbiased second opinion. This is key, particularly for ALS patients.

And you will hear from the testimony that we have on that in that they are seeking in being diagnosed with a terminal illness, they are seeking a second independent opinion which would be independent and not in consultation with a California physician and talking to a specialist located elsewhere because they want to hear some form of hope in some sort of treatment that may be available or that will at least improve their quality of life while they're still here with us, or to maintain an existing patient doctor relationship. This also comes into play oftentimes for somebody who travels out of state frequently or recently relocated here for those who travel out of state frequently it happens when you travel like you go to school out of state would be a common example if we were to pass AB 1369. Telehealth would also become very beneficial, particularly for the ALS population where somebody could get an initial screening rather than having to do that initial consultation by having to physically travel across the country and to maintain continuity of care.

So typically, for example, an ALS patient would receive goes to clinic quarterly. They could reduce the number of visits in half, for example, if they were able to do some consultation via telehealth instead of always having to physically travel. Because why is this also needed? Because the burdens associated with the travel also, particularly for ALS includes physical but also just the financial and the emotional burden of having to travel for the caregiver and the cost to provide care for those dependents left behind that can't travel.

I mean, the cost factor is enormous and what we're really talking about here is equitable access. We're talking about a patient population that but for their mobility cannot go out of physically travel out of state and therefore they don't receive the same level of care in terms of their options available to them as somebody that can physically travel out of state to see an out doctor who's licensed elsewhere. And so it is an equitable issue and I hope that you'll remember that as we think about ways to resolve this and pass this Bill, time delay is also an issue.

So even if a doctor out of state wanted to become licensed here, time delay is a factor and somebody who's terminally ill doesn't necessarily have that time or luxury to wait for it. And then oftentimes keep in mind too, is that when we're talking about specialists for somebody who's a terminal disease, oftentimes they're treating multiple patients from multiple states but only a handful from any particular state. And so how do we structure this so that the onerous isn't on the doctor to have to get a license in all 40 states or at the very least, how are we adopting some greater level of flexibility here in California so that the doctor can become in compliance? And so these are things we need to think about as we try to come to a consensus on how do we make it so that patient access is equitable and fair and that we're doing what we can to assist those who are terminally ill here in California.

So I'll just close by just saying that the limitations by providing virtual access to care in a greater sense, we can actually help more patients in California and we are going to see at least the ALS population increase over time with new therapies that are currently coming to market, which we're grateful for. And on behalf I'll just say on behalf of the association, on behalf of Dance or any more questions that you may have about this Bill, but thank you and we urge your support.

Thank you. Next.

Good afternoon, Mr. Chair and Members. Alex Khan. I'm privileged to represent the ALS Association in Sacramento. With your privilege, with your permission, I should say, been asked to read the statement of Colleen Decker. She's a mother in San Diego who's caring for her son with ALS and that's the reason she couldn't travel this morning. Our son Tyler was diagnosed with ALS at the young age of only 26.

His diagnosis was absolutely devastating to him and our family. He felt so isolated. After initial consultations with in state providers in which we weren't totally satisfied with the recommended treatment plan and relationship being established we sought consultation from a neurologist across the country who was known to work with younger patients.

In meeting with this out of state provider we saw an immediate positive response from Tyler so we knew this was the best provider match for his treatment. However, doing so has required us to physically travel across the country at least a few times a year, which is physically grueling, especially on Tyler and to a lesser extent on the rest of us and also financially challenging. Having access to telehealth for consultations in between physical visitations would greatly help us eliminate some of the burdens of having to travel long distance for every single visit.

With a horrible disease like ALS which cripples one's mobility. My son Tyler and other patients should be entitled to the same access to care from out of state providers as those who can physically travel out of state to receive care. AB 1369 intends to allow virtual care with out of state specialists for the purpose of improving the quality of life for patients like Tyler and it gives us greater hope of potentially extending his life.

On behalf of my son and family and all other families impacted by ALS and other terminal diseases I urge your support for AB 1369.

Any other witnesses and support in room 2100?

Alex Khan on behalf of the California Chronic Care Coalition in support.

Thank you, sir. Any other witnesses in support Room 2100? Seeing none, let's turn to witnesses in opposition, lead or otherwise here in room 2100. Please proceed.

Thank you. Mr. Chairman, Aaron Bone with the Medical Board of California. While we recognize and respect the tragic circumstances that preceded the introduction of AB 1369 I regret to say that we must strongly oppose this Bill and with its approach toward patient care and access.

The requirement to obtain a license to practice medicine in California is the bedrock of how patients are protected from negligent, incompetent or unscrupulous physicians. Under current law, any qualified physician, regardless of where they live may obtain a license to practice medicine in California, including through telehealth. This allows them to treat Californians from anywhere in the world.

We thoroughly review applicants to ensure that they have the appropriate education and. Training and have passed the required exams. We also review any recent history of criminal convictions or discipline from other jurisdictions.

These steps are critical to ensure that the physician meets the minimum requirements approved by the Legislature to help ensure that they treat our patients safely. Patients also have a second option under current law. If an out of state physician chooses not to get a license here or is not qualified, they may consult on the diagnosis and treatment of that patient alongside a California licensed physician who is in charge of that patient's care.

In fact, out of state physicians may consult with a California licensee while their own license application is under review. These options are available right now under current law to provide Californians access to an outofstate physician who will meet their needs. Most importantly, these current options ensure patients receive care from someone who has been vetted by the state's licensing authorities.

If a physician can practice here without a California license, our board would be unable to act against that physician if they harmed their patients. Senators, this Bill is not necessary, and it places fragile patients at risk from physicians who are unfit to practice in the state. The terms in the Bill that define which patients and physicians are eligible are vague and, for example, do not rule out physicians who have been disciplined by another state medical board.

This exacerbates the risks to patients. For these reasons, we respectfully urge the committee to not approve this Bill. Thank you.

Thank you. Next, please. Any other witnesses in opposition in the room? Seeing none, let's turn to the teleconference service moderator. Please prompt any individuals waiting on the teleconference line to testify either in support or in opposition to the measure. We'll take them.

Of course. Ladies and gentlemen, if you should make a comment in support or opposition, please press one, then zero now. And we do have a few that have just queued up. One moment while line number is taken.

We'll start with line 65, please go ahead.

Thank you. My name is Emily Stauffer, and I'm with the Every Life Foundation for Rare Diseases. And we are in strong support of this Bill.

Thank you, ma'am. Next, please.

Next we're going to line 24. Please go ahead.

Good afternoon, Chairman Roth and Members of the committee. My name is Terri Thorfinnson. I'm from the Osteopathic medical board.

Our board is in strong opposition to this Bill because it does not include any public safety protections. In specific, I want to emphasize what the medical board testimony said about the board lacks jurisdiction completely. There is no one under this Bill that will oversee this Bill.

They'll not look at the doctor's notes. They'll not determine eligibility. The boards are out of it. In terms of patients, they have no recourse to sue because the doctor is out of state unless they become an established patient out of state. The vagueness of the Bill also is problematic. The language says disease or condition immediately life threatening.

It doesn't say rare disease. It could be any disease which then any doctor could claim through a telemedicine relationship that they're treating a patient with a life threatening disease. The Bill is not narrow enough to create a narrow exception if this is what the Bill is trying to do.

The other thing is that the doctor involved in verifying is going to be verifying with HIPAA privacy information for eligibility. And they're not really supervising. It's not their license. And this Bill just doesn't narrow enough and restrict. It doesn't even require the doctor that's out of state to have the specialty of the disease that is required.

It just would open telemedicine and those out of state that don't want to get a license to just walk into the state, treat patients and nobody would know because nobody's in charge of this Bill. Creating my final note is, creating license exemption is a slippery slope. The license itself is the public safety protection. To exempt it means you eliminate that protection. This Bill needs more work, and we would respectfully urge a no vote. Thank you.

And there's currently no one else in the queue, Mr. Chair.

Thank you. Next, please.

Thank you, Mr. Moderator. Let's bring the matter back to the dais. Remember, obviously there may be some issues that you could continue to work with to narrow the covered conditions to potentially require physicians to be licensed in good standing in the state where they're practicing, presumably via telehealth out here in California.

Frankly, the opposition's comments speak to me about the potential need for a compact. And I wonder how the boards would feel about a compact having to ease these matters for patients across the board. I assume there'll be opposition to that, and I'm not suggesting that at this point in time.

I will tell you that my former partner I won't mention his name a couple of years ago was diagnosed with a very rare form of cancer. He fought that. He exhausted. Fortunately, he's still alive. He fought that. He exhausted all of his options here in the state of California, up and down the state. He did his own search. He found one clinical trial in the state of New York. One clinical trial.

And having telehealth available to him would have precluded a bunch of extra work on his part at the point of initial consult, review of lab tests, a whole bunch of other tests that I never knew existed to decide whether he qualified for the clinical trial. And of course, if he did, then he would have to transport himself and his family to the East Coast for the four or five or six months that the clinical trial was projected to take. So I think there ought to be a way to put some guardrails around this Bill, if the Bill needs guardrails, but to protect the patient.

But my gosh, it seems to me what you're talking about are situations where there are few options. And I'm certain that at the point in time when my friend, my former law partner, was looking at clinical trials, he was not researching whether the physician who was engaged in the clinical trial at a rather well known hospital in the state of New York had ever had a disciplinary action, because that was not going to save his life. So good for you for bringing the Bill.

Colleagues, any questions? Bill has been moved by Senator Eggman. The motion is due pass to Senate Appropriations.

Roth.

Aye.

Roth aye. Nguyen. Alvarado-Gil. Archuleta.

Aye.

Archuleta aye. Ashby. Becker. Dodd. Eggman. Glazer. Eggman.

Aye.

Eggman aye. Glazer. Niello.

Aye.

Niello aye. Smallwood-Cuevas. Wahab. Wilk.

Aye.

Wilk aye.

Bill has five votes. We'll hold the roll open for absent Members.

Thank you, Senators.

Okay, next item number nine. AB 1616.

Assembly Member Lackey. California Cannabis Tax Fund.

All right, well, thank you, Mr. Chair, for allowing me to present AB 1616. It'll allow municipalities that have not yet allowed the cultivation or retail sell of cannabis access grants for enforcement against illicit cannabis cultivation within their jurisdiction.

Illicit cannabis growers are a major problem in this entire state, but especially in two of the counties that I represent in LA County and San Bernardino County. While both of these counties are walled off from resources to combat the pillaging of our natural resources and the exploitation of laborers, the illicit market is poison everybody. Our water is being stolen and the water is also being poisoned.

While these terrible conditions have facilitated the early death of at least 32 cannabis farm workers that went unreported to state authorities, the illicit cultivation results in unregulated and untaxed merchandise is being sold to consumers on the street. We're leaving money on the table and injecting steroids to the illicit market by boosting the supply of unsafe products sold in California and states who have not yet moved towards legalization drug cartels exploit our permissive status, using it as cover for illegal operations. They know we're not serious about enforcement.

County sheriffs are our only line of defense, and without the state to back them up, they are left playing the game of whacka mole. From cultivation site to cultivation site, enforcement of the illicit market is a key component of uplifting the legal market. AB 1616 strengthens this essential pillar for an industry that is consistently held by the throat of inflexible state regulations.

California has led the nation in promoting cannabis legalization, but drags their feet when it comes to making moves that promote the life force of that industry. This market needs tools to frustrate attempts by the malevolent actors to denigrate the integrity of our products. AB 1616 rightly recognizes all municipalities are partners in combating illicit cannabis cultivation so that we can work together.

I have Amy Jenkins representing the California Cannabis Industry Association, and she'll provide testimony on the need for enforcement. As an industry expert, she can answer any questions you may have. Go ahead.

Amy Jenkins on behalf of the California Cannabis Industry Association, we're pleased to support AB 1616 and want to thank the author for his unwavering support for the legal industry. The lack of enforcement against the unlicensed cannabis market, as you've heard many times, has been a major obstacle to the success of the industry. This was actually emphasized in a committee hearing you held in March of this year, where panelists talked about that being one of the primary concerns.

Prop 64, among many things, did aim to eradicate the illicit market and provide a reasonable pathway to licenseure. Yet two thirds of the cannabis purchases still occur in the illicit market, and legal sales continue to decline. Recent data from the California Department of Tax and Fee Administration reveals a significant drop in cannabis tax collections, leading to seven consecutive quarters of falling revenue in the state.

These alarming numbers underscore the urgent need to stabilize the licensed cannabis market and invest more resources in combating illicit activity. Addressing the opposition's concerns, it is important to clarify this Bill does not propose diverting funds away from after school programs, job placement, mental health treatment, drug prevention, education, addiction treatment, or law enforcement training. Prop 64 allocated tax revenues into three very distinct buckets, as the graph describes, and AB 1616 focuses on one part of the local enforcement grant bucket only by asking that we simply prioritize grants that go to addressing illicit cultivation and retail.

These are grants that are awarded to local governments. There is absolutely zero specificity in the proposition in terms of criteria beyond funding law enforcement, fire protection, and public safety and health. So that's really all that we try to do is say, can we prioritize illicit market when evaluating the grant applications and also expand it? And the reason we want to expand it, and this was a tough call for CCIA, is because this is now a matter of statewide concern.

Whether you are in a locally authorized jurisdiction or not. Illicit market affects all legal businesses. So we also understand that there was a lack of reporting requirements required in the Bill. This omission was intentional. It's not required in 64, and we wanted to operate within the spirit of the law as currently written and approved by the voters. So again, we appreciate your consideration of this Bill today. Actually, I did ask RCRC to come forward and make a few comments. It is strongly supported by local government as well.

Thank you. Next, please.

Thank you. Good afternoon. Leigh Kammerich with the Rural County Representatives of California.

RCRC supports AB 1616 and we thank the author for introducing and leading this effort. A commonality and high priority amongst our 40 Member counties is the need for more resources for enforcement activities to reduce unlicensed cannabis operations. There is additional capacity for the Board of State and Community Corrections to award available funds if eligibility criteria is expanded.

AB 1616, as mentioned, would not impact the 80% of the allocation three monies dedicated for youth programs and environmental protection. Instead, it would make the remaining public safety related funding available for local governments more impactful. And it does this by prioritizing local enforcement efforts that could ultimately, as the author mentioned, support the license regulated industry. And for these reasons, we are happy to support and ask for your aye vote.

Thank you. Any other witnesses and support? Name, affiliation, and position on the measure, please.

Nicole Wordelman on behalf of San Bernardino County in support.

Thank you. Next, please.

Ada Waelder with the California State Association of Counties in Support.

Thank you. Next.

Mr. Chair and members, Rand Martin, on behalf of the parent company, we implore you to give us these additional resources to fight the illicit market and support AB 1616. Thank you.

Thank you. Next, please. Name, affiliation, position on the measure only.

Jerred Kiloh with the United Cannabis Business Association in Support.

Thank you. Any other witnesses in support? Now let's turn to witnesses in opposition, lead or otherwise. Are there any opposition witnesses in the room? Lead witnesses first.

Good afternoon, Chair and Members. My name is Dr. Margiana Petersen-Rockney, and I'm a researcher at UC Berkeley, where I conduct Department of Cannabis Control funded research on cultivation bans at the local level. AB 1616 is about the expansion of enforcement funding support to counties and cities that ban cannabis and cultivation, which is two thirds of them, meaning that residents in those localities don't have a pathway to permitting and legal markets.

Research suggests that 1616 would have negative consequences, especially for rural people and minority communities, perpetuating harms of the war on drugs. Our research findings suggest that cultivation bans and enforcement are often designed and implemented in divisive terms. In practice, this means that poor communities and communities of color are targeted for enforcement.

Funneling more funds to law enforcement will aggravate local tensions and further marginalize Californians who have been excluded from the benefits of legalization enforcement. First, approaches which 1616 would prioritize do not achieve their stated goals. More funding for law enforcement will not eliminate illicit cultivation in the future, just like the War on Drugs did not eliminate it in the past.

Instead, enforcement first approaches forfeit our most useful tool for controlling cannabis civil regulation. This Bill would drive cultivation further underground, where civil regulation isn't possible, with negative consequences for labor, communities and the environment. When cannabis is met only by law enforcement, we lose the chance to educate, cultivators and fix problems.

In line with California voters intent in Proposition 64 to treat cannabis as a legal, civilly regulated crop, californians deserve a chance to be made aware of and remediate issues without high punitive, fines and significant legal consequences. So what can be done? Instead of AB 1616, an evidencebased approach to reduce holistic cultivation would first, facilitate an accessible path to permitting for small scale and medical cultivators across the state. Second, would regulate cannabis cultivation as a civil, not criminal, matter, and provide cultivators with pedagogy, not punishment.

And third, any state resources that go towards law enforcement should be matched by funding for environmental remediation. Enforcement without remediation compounds environmental problems. Enforcement alone in places where permitting isn't possible will replicate the War on Drugs with negative consequences for Californians. Thank you.

Thank you. Next, please.

Good afternoon. My name is Emi Young, and I'm an attorney with the ACLU of Northern California. In 2016, Californians voted to adopt Proposition 64, a ballot initiative intended to legalize the use and cultivation of marijuana and to move California away from the failed policies of the War on Drugs.

One of the key components of Proposition 64 was that counties and cities that bought into the idea of legalizing cannabis businesses and cultivation would directly benefit from the tax dollars that came from the industry via grants from the Public Health and Safety Grant Program. This program, the Public Health and Safety Grant Program, has been used to Fund youth substance abuse intervention and job training programs in places like Sacramento and the city of Merced. It's also been used to Fund mental health services and substance abuse prevention in counties like Contra Costa and in Riverside, and to Fund data collection and study of racial disparities in local cannabis enforcement in places like Los Angeles.

All this to say, in contrary to what the proponents of the Bill said, the Public Health and Safety Grant Program is directly contributing to current substance abuse and youth job training programs in places around the state. Now, as the committee analysis noted, money for all of these programs is at risk. If AB 1616 is adopted, 1616 would go against the will of the voters by taking money away from counties and cities that have welcomed the legal cannabis industry and sending it to places that have banned all commercial activity.

In doing so, it undermines the will of the voters and removes one of the key incentives for local governments to permit legal cannabis businesses. And because 1616 explicitly prioritizes law enforcement first approaches to crack down on unlawful cultivation and sale, it takes money away from public health programs and diverts it in favor of enforcement and prosecution. This approach is precisely what the voters rejected in 2016 and will have devastating consequences for communities of color and banned counties who are and always have been the primary targets of drug enforcement and over policing.

For these reasons, we respectfully oppose AB 1616 and urge the Members of the Committee to do the same. Thank you.

Thank you. Any other opposition witnesses in room 2100? Name, affiliation, position on the measure only, please.

Duke Cooney on behalf of ACLU, California Action in opposition.

Thank you. Next, please.

Chair Armand Feliciano on behalf of Asian Law Caucus in opposition.

Thank you, sir. Any other opposition witnesses? Let's move to the teleconference line. Moderator please prompt anyone there who wishes to testify in support or in opposition to the measure. We'll take them now.

Of course. Ladies and gentlemen, if you wish to make a comment in support or opposition, you may press one, then zero at this time. There's currently no one queuing up, Mr. Chair.

Thank you, Mr. Moderator. Let's bring it back to the dais. Let me just kick this off real quick.

I'm one who believes we need more enforcement. I'm disappointed that the state hasn't been able to step up to properly Fund and staff enforcement activities around the illegal cannabis operations around the state. My concern, or at least my question, has to do with the phrase in the Bill the Board shall prioritize local governments whose programs seek to address the unlawful cultivation and sale of cannabis.

Prioritizes the word that I've focused on. And since we're talking about the public safety related activity piece allocation. 313.5 million excise tax paid by operators in the cannabis space.

Does that mean that local governments that have not permitted any cannabis operation at all, and there are apparently several of them, who want to address unlawful cultivation and sale of cannabis and send in a grant will be prioritized over those local governments who have law enforcement concerns related to the legitimate and perhaps illegitimate cannabis activities permitted in their jurisdiction. Can someone address that? Because that doesn't quite seem equitable to me.

Mr. Chairman, I appreciate the question. I think the expectation was that we were trying to prioritize. So the language is very vague in 64, and I'm sure that doesn't surprise you.

It says for public safety, fire protection, and other public health and safety programs in furtherance of Mccursa. I don't think our expectation was to prioritize, at least when it was drafted, was to prioritize law enforcement necessarily in unregulated jurisdictions. It was simply directing the BSCC when reviewing grant applications, to consider funding programs and efforts that seek to address illicit market activity.

But I appreciate how you're looking at it, that was not how we were trying to draft it. The fact of the matter is the vast majority of the local grants that have gone out are not going towards illicit market activity and they are going to very worthy programs. But there is 340,000,000 that was approved in the last budget act.

It's 60% of the allocation, three bucket that's already going to a lot of those programs. And we're trying to figure out how to invest more resources into addressing illicit market activity because we've all been discussing this for some time and there's just very, very limited resources.

Well, I understand that the fact that a local jurisdiction doesn't permit cannabis activity within its borders could very well be impacted by cannabis activity in other jurisdictions. And therefore a pot of money, even though the pot of money comes from the cannabis jurisdictions perhaps should be open to those that have not permitted it because of the spillover or other impact. However, the term prioritize to me means prioritize, and that's a problem.

So we're not negotiating amendments because we don't do that. But I'm just letting you know what my concerns are and I guess I should be facing the author when I do this. That was never the intent, that was never the intent to prioritize that.

I assume that to be the case and I assume it can be cleaned up. I'll be supporting the measure today, but let me open it up for questions. Senator Wilk.

Thank you. Mr. Chair, comment and then a question. I'd love to take the opponents and bring them down to our district and put them in a helicopter to see how out of control this is.

We got Mexican cartels, we got Chinese gangs, we got the Russian Armenians, and it's thousands of illegal grows. People have been murdered. They're polluting our water supply by digging out pool size holes and putting it with illegal pesticides.

They're stealing water. It's completely out of control and they're concerned about grant funding. There's not going to be any grant funding till we there's other things we need to do, but we got to get this under control as well. And so I want to salute you for doing this. Bill do have a couple of questions for you, Ms. Jenkins, if you don't mind.

Number one, because I just want to hear it again because I read it and again, the opponent said that this diverts grant funding away from the programs that they care about. So I just want you to, again, articulate that that's not correct.

So the BSCC, so I read the language in Prop 64 is very broad, but it falls under the law enforcement bucket, which is 20% of an allocation, three bucket, which is supposed to be going to address primarily public safety. But because Prop 64 was so vague in how they wrote the criteria, what the BSCC has done is they've expanded the grant program and they're allocating for all different kinds of purposes and very, very little money is actually going to address illicit market. And I just want to say, too, that when I say illicit activity, we're not changing criminal penalties here.

That was all established in 64. This could be code enforcement. This could be a program that is designed to educate consumers on the distinction between illicit retail and legal retail. So it's just simply, when looking at grant applications, can we focus and prioritize on things that aim to address the unlicensed market? That was the intent of the bill.

Well, you're a very good advocate because you already answered my follow up question. So I appreciate that. And when appropriate, I'd like to move the Bill. Mr. Chair.

Thank you. Thank you, Senator. Any other questions?

Oh one other thing, Mr. Chair. I'm sorry.

Yes sir.

If anybody wants to see it, I have video on my phone of these illicit. Because, I want to give thanks to Attorney General Bonta for coming down to our district, and we took a helicopter ride, and I think he was shocked by what he saw. But I do have some video on my phone I'm happy to share with any Senator who would like to see it.

Thank you, Senator. I see no other questions. Sure. The Assembly Member will take another look at some of the language as it moves forward, which I hope it will. The motions by Senator Wilk and the motion is dupassed to Senate Public Safety Committee. Please call the role.

Could I? Could I please?

Oh, absolutely. I apologize.

I ask to close, because there are some things that were said that I think are really kind of unfair. This is not an enforcement first Bill. It's an enforcement at all Bill. Right now, the only aspect that's being enforced in the nature of cannabis are those within the regulated space. And I think that that's misguided.

I'm not saying that they don't deserve to be enforced, but I'm saying that the priority is misguided. Prop 64 is being completely exploited by these illicit marketeers, and everybody with power in the state level is ignoring it. It's time to change that.

And this actually moves the ball in the direction that we can change the momentum and that we can actually help defeat the success by those who are completely dominating the cannabis market. Everybody, they are dominating in a very, very big way. And we're being complicit. We're saying it's okay. I'm saying it's not okay. This is your chance to show that it's not okay. And please don't be an ally to the illicit market. And that's my close.

Thank you for the close. The motion is due pass to Senate public safety. Please call the role.

Roth.

Aye.

Nguyen aye. Alvarado-Gil. Archuleta.

Roth aye. Nguyen.

Aye.

Aye.

Archuleta aye. Ashby. Becker. Dodd.

Aye.

Dodd aye. Eggman. Glazer. Niello.

Aye.

Niello aye. Smallwood-Cuevas. Wahab. Wilk.

Aye.

Wilk aye.

Bill has six votes. We'll hold the roll open for absent Members. Next up, item number ten. AB seventeen zero three, assembly member Carrillo state Athletic Commission boxing. Proceed when ready.

Thank you. This thing on?

It's on.

Okay. Thank you, Mr. Chair and Members.

Very proud to present Assembly Bill 1703, which will return the California State Athletic Commission back to firm financial footing. For those who may not be familiar with the California State Athletic Commission, it oversees fighting sports in our state. The commission plays a crucial role in ensuring the safety and welfare of athletes, enforcing rules and regulations for events, and investigating and disciplining any violations of those rules.

The commission is facing significant financial difficulties and faces insolvency. The Commission is funded by a portion of the revenue from events under its jurisdiction and had to turn to its reserves. During the past three and a half years of the pandemic, the commission's revenues have returned to pre-pandemic levels, but due to projected one time costs and depleted reserves, this amount is insufficient to prevent insolvency.

The Bill would modestly increase the cap of gate revenue fees that can be collected, raising it for the first time since the year 2000. This will ensure the commission's continued operation with no need for intervention with taxpayer dollars. Taxpayer dollars. Here to talk more about the need for this policy and answer any additional technical questions is Peter Villegas, Chair of the California State Athletic Commission.

Thank you. Assembly Member.

Good to see you again, sir.

Please proceed.

The commission only collects the max fee of $100,000 when the contest or exhibition reaches or exceeds $2 million in gross ticket sales. The last time the commission increased the cap of $100,000 was in the year 2000.

The Commission estimates that the increase of the cap will bring in additional 300,000 per year in revenue, and the increase in the cap will not impact athletes, managers, or others associated with the athletes team. The fees will be paid only by the promoters. The California State Athletic Commission hopes that the committee will vote to approve the cap increase, as it is vital to the commission's fund.

Increasing the cap is the best way for the commission to increase its revenue to ensure the commission remains solvent without impacting many of its licensees. And I thank you for your time and consideration. Thank you, sir.

Next. Any other supporters in room 2100? Okay, let's turn to opposition. Lead or otherwise.

Any opposition in room 2100? We're on a roll. Turn to the teleconference service. Moderator please prompt any individuals waiting to testify in support or in opposition to this measure.

We'll take them now. Ladies and gentlemen, if you wish to make a comment in support or opposition, please press one and zero. And there's currently no one queuing up at this time Mr. Chair.

Thank you. Moderator let's bring the measure back to the deus and my colleagues for questions. Senator Archuleta.

Thank you, Assembly Member, for bringing this forward. Being a fan of the sport, I've been able to attend quite a few events over my time, and I'm really glad that we're going forward, because I know the professionalism that is there in the sport, the care and maintenance of the boxers and everything they do in all aspects. And I think to continue it, this is a great way to go. So I applaud you for bringing it forward and I will move the Bill at the appropriate time.

Thank you, Senator Archuleta. Any other questions? Seeing none. Assembly Member, would you like to close?

Thank you. Mr. Chair, the Bill has a bipartisan support with no registered opposition. Respectfully request an aye vote.

Thank you very much. Motion by Senator Archuletta is due passed to Senate Appropriations company. Please call the roll.

Roth aye. Nguyen aye. Alvarado-Gil aye. Archuleta aye. Ashby aye. Becker. Dodd ae. Eggman. Glazer. Niello aye. Smallwood-Cuevas. Wahab. Wilk aye.

Bill has seven votes. We'll hold the row open for absent Members. Mr. Chair.

At this time we will be hearing from Chair Ross on AB 1262 on behalf of Assemblymember Berman, which is item 11.

Thank you, Madam Chair. Colleagues, this is the Sunset Bill for the Professional Fiduciaries Bureau. In summary, the measure extends the sunset date for the Professional Fiduciaries Bureau until January 1, 2028.

It repeals something that we call a reverse sunset clause, which, in the event the Bureau goes away, would transfer the responsibilities to its Advisory Committee. And the reason for repealing that is, if the sunset goes away, the Legislature would determine where the duties and responsibilities would fall. It also staggers Advisory Committee Member term limits. So there's some order to the terming out and reappointment and makes other technical clarifying and confirming changes. Respectfully ask for an aye vote.

Thank you. Let's move on to any lead witnesses in support. Any sponsors or lead witnesses? Seen none. We'll move to any other witnesses in support of AB 1262? Seen none. We'll move on to any lead opposition. Please come on forward.

Chair and Members. Not informal opposition, but with concerns that we're hoping the Committee would address as the Bill moves forward. I'm Jerry Desmond with the Professional Fiduciary Association of California, co-sponsors of the original legislation in 2006, and agree with each of the statements about what the Bill would accomplish as expressed by the Chair and by the author.

And as the Bill moves forward, if we have a concern, it's that one of the issues that's been brought up in the joint legislative sunset review previously, and in the current sunset review earlier this year, is whether the licensure fees will support the Bureau. And what we've seen just very recently, I think it was June 15, was the Bureau announced a regulatory proposal to significantly increase what we think are already exorbitant fees paid by the licensed population. 841 licensed professional fiduciaries currently pay $700 a year.

The proposal is for those who continue their license to pay $1,300 a year. I mean. That caused some to say, I'd rather go have my attorney license with the state bar for 550 or so and be exempt from the Licensure Act rather than pay $1300.

And we also think that the impact will be negative on the Bureau itself. The licensed population will diminish with retired inactive status. Those trained to enter into the profession would have exorbitant fees as well.

So we're urging that the legislation include other provisions that are brought to attention by the regulatory act, by the Bureau. And they include, first, to make sure that the exemptions that are there for enrolled agents, CPAs, and others, it be very clear that they only have that exemption when they're operating pursuant to their registration. The second is to place into the legislation, into the act the authority for the Legislature to establish the fees going forward so that like almost every other bureau or border commission at DCA, that the Legislature would need to change the laws to raise these fees so you can look at it and see what changes are necessary.

And then the third to reduce the burden on the bureau that is placed by law is to actually lessen the load and avoid duplication by saying if there's a court finding or order that determines that a fiduciary has breached a fiduciary duty, has abused an elder, or has committed some kind of fraud, that is determinative of the issue. And the Bureau doesn't have to take the extra steps to do another investigation. So we think some reasonable steps added to the Bill will address what we've seen with the regulation that has just been proposed by the Bureau that doesn't need any authority to be acted upon when they have the hearing on August 2.

We appreciate that consideration, and we've already talked to the author's office and the people working on the Bill to see if those kinds of provisions could be added, perhaps as it moves forward to the next committee. We appreciate the consideration.

Thank you. Any other witnesses in opposition seeing none. Moderator, would you please prompt to see if individuals are waiting to testify in support or opposition of AB 1262?

Of course. Ladies and gentlemen, if you wish to make a comment in support or opposition, please press one, then zero. At this time, there's currently no one queuing up at this time Madam Chair.

Thank you. At this time, I'm going to bring it back to discussions with committee Members. There's a motion, Senator Roth, would you like to close?

Just to say that, unfortunately, fees in these special Fund funded operations are a continuing problem in the State of California that I would dearly like to fix before I leave this building. I'm not sure I'll be able to do that, but we'll continue to work with those that are concerned about those. Efficiency in the disciplinary process, particularly where the criminal activity is involved, is something that I'm very interested in. And the other issues that were mentioned again. We will continue to work to try to resolve these issues respectfully. Ask for an aye vote.

Thank you. The Bill has been moved. The motion is due pass to Senate. Please call the roll.

Roth? Roth aye. Nguyen? Nguyen aye. Alvarado-Gil? Archuleta? Archuleta aye. Asby? Ashby aye. Becker. Dodd? Dodd aye. Eggman? Eggman aye. Glazer? Glazer aye. Niello aye. Smallwood-Cuevas? Wahab? Wilk aye.

Nine votes. Nine-zero.

Did you do that? No. Okay, let's start at the beginning and call the consent file. File item number one. SCR number 72. Is there a motion? Excuse me, Senator Archuleta moves the consent file. Please call the roll.

Roth aye. Nguyen aye. Alvarado-Gil aye. Archuletta aye. Ashby aye. Becker. Dodd aye. Eggman. Glazer aye. Niello aye. Smallwood-Cuevas. Wahab. Wilk aye. Alvarado-Gil aye.

Did you get Senator Eggman consent? Eggman aye. We have ten votes on the consent calendar. We'll hold the roll open for absent Members. File item number two AB 8. Assemblymember Friedman. We need we need a motion by Senator Wahab. Senator Wahab made the motion. The motion is due passed to the Senate Judiciary Committee. Please call the roll.

Roth aye. Nguyen aye. Alvarado-Gil aye. Archuletta aye. Ashby aye. Becker. Dodd aye. Eggman aye. Glazer aye. Niello aye. Smallwood-Cuevas. Wahab. Wilk aye.

Bill has ten votes. We'll hold the roll open for absent Members. Moving on to item number three. Assemblymember Haney AB 374. Current vote is six to one.

Chair voting aye. Archuleta aye. Becker. dodd aye. Eggman aye. Glazer aye. Wilk aye.

Current vote eleven to one. Will hold the roll open for absent Members. Moving on to item number four. Assemblymember Aguiar-Curry. Assembly Bill 420. Current vote is four to one.

Chair voting aye. Becker. Dodd aye. Eggman aye. Glazer aye. Niello. Smallwood-Cuevas. Wahab aye. Wilk aye.

Current vote is nine to one. We'll hold the roll open for absent Members. Moving on to item number five. Assemblymember Hart AB 687. Current vote is 7-0.

Chair voting aye. Becker. Dodd aye. Eggman aye. Glazer. This is item number five. Hart. Glazer aye. Smallwood-Cuevas. Wilk aye.

Current vote is 11-0. We'll hold the row open for absent Members. Next item. Item number six AB 1111 by Assemblymember Pellerin. The current vote is three to one. Chair voting aye.

Avarada Gill. Ashby. Becker. Dodd. Dodd. I eggman. Eggman I glazer neela. Sorry. Smallwood cuevas. Wahab wahab I wilk aye. Wilk I.

Current vote is seven to one. We'll hold the roll open for absent Members. Wait.

Seven to one?

You just did. Number six. Seven to one. Seven to one. Hold the roll open for absent Members. Item number seven. Assemblymember Petrie-Norris. Assembly Bill 1182. Current vote is five to one.

Chair voting aye. Becker aye. Dodd aye. Eggman aye. Glazer aye. wahab aye. Wilk no. Nguyen no. Was that a change in vote? No, she just didn't vote.

Okay well, what's your count? My count is ten to 3, 10 to three. The vote is ten to three. That Bill is out. Next item. Item number eight. Assemblymember Bauer-Kahan AB 1369. Current vote is five to zero.

Chair voting aye. When I alvarada Gill. Ashby. Becker. Becker. I dodd. Dodd. I laser. Aye. Laser I smallwood Cravis Wahab no wahab. No. I'm sorry. Someone with Cravis. No wahab. Ashby. Ashby.