UPDATE 5/29 – The Ammiano bill failed in the Assembly. See vote.
SACRAMENTO – Tom Ammiano’s medical marijuana regulation bill AB 1894 has been amended to clarify that local governments can regulate and/or prohibit MMJ facilities as they wish, to clarify that patients cultivating for personal use are not subject to its provisions, and to revise how local governments can tax the industry, among other provisions.
In specific, AB 1894 would establish a mandatory statewide registration system for commercial cannabis activities under the Alcoholic Beverages Commission.
Registered entities would be exempted from state criminal penalties for cultivation, processing, manufacturing, testing, transportation, distribution, donation, provision, or sale of medical cannabis.
The ABC would be empowered to set statewide minimum standards for commercial cultivation, manufacture, testing, transport, etc. and for the issuance, renewal and revocation of registrations. Deadline for promulgation of regulations is Jan 1, 2016. Prior to that, emergency regulations for registration must be implemented by July 1, 2015.
Identification information about patients, their medical conditions and caregivers would be protected from disclosure except as necessary for authorized employees to perform official duties pursuant to the act.
Registrants would have to comply with (1) security requirements; (2) testiing and labeling requirements, including cannabinoid profile and contaminant checks (3) health and safety regulations regarding biological or other contaminants (4) inspection and tracking requirements, including an electronic inventory tracking system allowing ABC to monitor inventory data at all stages (5) storage, packaging and transport protocols (6) advertising restrictions (7) sanitation standards for edibles, which are not to be produced in private homes; (8) pesticide standards (9) clean water and environment regulations, et al. Violations subject to civil penalties.
Applicants must not have convictions for serious or violent felonies or felonies involving deceit or fraud in past 5 years, and may not have been sanctioned for violation of local cannabis ordinances in past 3 years.
Applcations must include name and address, detailed operating procedures for the facility, evidence of legal right to occupy the location, and documentation of compliance with all local ordinances.
Registrants must retain records on name and address of all suppliers of cannabis, the location where cultivated, the amount and date received, banking records, etc. ABC and any state or local agency may examine books and records and visit and inspect premises as necessary.
ABC may establish appropriate fees sufficient to fund costs of enforcement.
Before that, ABC may provide for provisional registrations of entities already approved by cities or counties. Entities found to be operating in compliance with local regulations and AG guidelines for six months prior to Jan 1, 2015 are eligible for provisional registration immediately on payment of $5,000 registration fee. This $5K applies only for provisional registrations; regular registration fees will be set by ABC at whatever level is needed to cover total regulation costs. These are estimated at $15 million per year.
Transportation regs require completing a shipping manifest, sending it to ABC beforehand, and transporting it only in a locked, secure storage compartment securely affixed to interior of a vehicle staffed by two employees.
Taxation: County boards of supervisors may enact a tax on cultivation, dispensing, processing, storing, providing, donating(!), selling or distribution of cannabis to whatever extent and in whatever manner they see fit, subject to voter approval.
Physicians – No physician who recommends MMJ may be involved in regulated cannabis activities.
Section 2220.5 of Business and Professions Code is modified to explicitly include recommendations of medical marijuana in existing provisions governing disciplinary actions for prescribing of controlled substances.
Section 11362.775 of SB 420 is repealed 90 days after ABC posts notice that is accepting mandatory registration applications. This is the section of law that currently protects collectives from prosecution for sales, possession with intent, etc. SB 420 collective defense will therefore no longer be viable for dispensaries, but stronger legal protections will be provided for mandatory registrants under ABC.
In sum, AB 1894 involves more extensive regulatory requirements than SB 1262. Some of these, such as those governing labeling, product testing, pesticides and environmental protection appear to have public merit; others, such as those involving transportation, appear unnecessarily burdensome.
AB 1894 sets forth an elaborate state regulatory scheme under ABC; SB 1262 keeps most regulatory authority in hands of local governments.
AB 1894 provides commercial registrants with explicity legal protection from state criminal laws while repealing the SB 420 defense for dispensaries; SB 1262 seems to keep the possibility of criminal prosecution in place but doesn’t touch SB 420.
SB 1262 requires that all licensees certify prior approval by local governments; AB 1894 shifts the burden of proof, requiring that registrants not be in violation of local laws.
AB 1894 authorizes county taxation of cannabis activities with voter approval; SB 1262 is silent on the issue.
More so than SB 1262, AB 1894 appears to clearly fulfill the federal mandate for “strong and effective” state regulations. In practice, the implementation of either bill will depend on a host of unforeseeable decisions by courts, local governments, law enforcement, and state agencies, not to mention the federal government.