AB 266 ANALYSIS AND BREAKDOWN. WHAT IS THIS ALL ABOUT?

So here is the second installment of the three laws being passed to govern medical cannabis in California. This one is a doozie. AB 266 is the law that lays out all of the licensing and the authorities granted to the different agencies responsible for licensing the industry. It spells out all of the nifty licensing schemes and how DISTRIBUTORS will be the gatekeepers between cutivators and manufacturers and dispensaries. So much fun!

I also broke down the companion law SB 643, which you can read HERE

So here is my take on AB 266 in all of it’s glory… Enjoy.

AB 266

SECTION 1. Section 27 of the Business and Professions Code is amended to read:

27. (a) Each entity specified in subdivisions (c), (d), and (e) shall provide on the Internet information regarding the status of every license issued by that entity in accordance with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). The public information to be provided on the Internet shall include information on suspensions and revocations of licenses issued by the entity and other related enforcement action, including accusations filed pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) taken by the entity relative to persons, businesses, or facilities subject to licensure or regulation by the entity. The information may not include personal information, including home telephone number, date of birth, or social security number. Each entity shall disclose a licensee’s address of record. However, each entity shall allow a licensee to provide a post office box number or other alternate address, instead of his or her home address, as the address of record. This section shall not preclude an entity from also requiring a licensee, who has provided a post office box number or other alternative mailing address as his or her address of record, to provide a physical business address or residence address only for the entity’s internal administrative use and not for disclosure as the licensee’s address of record or disclosure on the Internet.

  • There will be an Internet database of all licenses. Licensees can provide a PO Box for public record, but must also provide a physical location to the licensing authority.

(b) In providing information on the Internet, each entity specified in subdivisions (c) and (d) shall comply with the Department of Consumer Affairs’ guidelines for access to public records.

  • They have to follow the rules for public information….

(c) Each of the following entities within the Department of Consumer Affairs shall comply with the requirements of this section:

(1) The Board for Professional Engineers, Land Surveyors, and Geologists shall disclose information on its registrants and licensees.

(2) The Bureau of Automotive Repair shall disclose information on its licensees, including auto repair dealers, smog stations, lamp and brake stations, smog check technicians, and smog inspection certification stations.

(3) The Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Insulation shall disclose information on its licensees and registrants, including major appliance repair dealers, combination dealers (electronic and appliance), electronic repair dealers, service contract sellers, and service contract administrators.

(4) The Cemetery and Funeral Bureau shall disclose information on its licensees, including cemetery brokers, cemetery salespersons, cemetery managers, crematory managers, cemetery authorities, crematories, cremated remains disposers, embalmers, funeral establishments, and funeral directors.

(5) The Professional Fiduciaries Bureau shall disclose information on its licensees.

(6) The Contractors’ State License Board shall disclose information on its licensees and registrants in accordance with Chapter 9 (commencing with Section 7000) of Division 3. In addition to information related to licenses as specified in subdivision (a), the board shall also disclose information provided to the board by the Labor Commissioner pursuant to Section 98.9 of the Labor Code.

(7) The Bureau for Private Postsecondary Education shall disclose information on private postsecondary institutions under its jurisdiction, including disclosure of notices to comply issued pursuant to Section 94935 of the Education Code.

(8) The California Board of Accountancy shall disclose information on its licensees and registrants.

(9) The California Architects Board shall disclose information on its licensees, including architects and landscape architects.

(10) The State Athletic Commission shall disclose information on its licensees and registrants.

(11) The State Board of Barbering and Cosmetology shall disclose information on its licensees.

(12) The State Board of Guide Dogs for the Blind shall disclose information on its licensees and registrants.

(13) The Acupuncture Board shall disclose information on its licensees.

(14) The Board of Behavioral Sciences shall disclose information on its licensees, including licensed marriage and family therapists, licensed clinical social workers, licensed educational psychologists, and licensed professional clinical counselors.

(15) The Dental Board of California shall disclose information on its licensees.

(16) The State Board of Optometry shall disclose information regarding certificates of registration to practice optometry, statements of licensure, optometric corporation registrations, branch office licenses, and fictitious name permits of its licensees.

(17) The Board of Psychology shall disclose information on its licensees, including psychologists, psychological assistants, and registered psychologists.

(d) The State Board of Chiropractic Examiners shall disclose information on its licensees.

(e) The Structural Pest Control Board shall disclose information on its licensees, including applicators, field representatives, and operators in the areas of fumigation, general pest and wood destroying pests and organisms, and wood roof cleaning and treatment.

(f) The Bureau of Medical Marijuana Regulation shall disclose information on its licensees. (This was added to the existing list of businesses under the DCA authority)

(g)  “Internet” for the purposes of this section has the meaning set forth in paragraph (6) of subdivision (f) of Section 17538.

SEC. 2. Section 101 of the Business and Professions Code is amended to read:

101. The department is comprised of the following:

(a) The Dental Board of California.

(b) The Medical Board of California.

(c) The State Board of Optometry.

(d) The California State Board of Pharmacy.

(e) The Veterinary Medical Board.

(f) The California Board of Accountancy.

(g) The California Architects Board.

(h) The Bureau of Barbering and Cosmetology.

(i) The Board for Professional Engineers and Land Surveyors.

(j) The Contractors’ State License Board.

(k) The Bureau for Private Postsecondary Education.

(l) The Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Insulation.

(m) The Board of Registered Nursing.

(n) The Board of Behavioral Sciences.

(o) The State Athletic Commission.

(p) The Cemetery and Funeral Bureau.

(q) The State Board of Guide Dogs for the Blind.

(r) The Bureau of Security and Investigative Services.

(s) The Court Reporters Board of California.

(t) The Board of Vocational Nursing and Psychiatric Technicians.

(u) The Landscape Architects Technical Committee.

(v) The Division of Investigation.

(w) The Bureau of Automotive Repair.

(x) The Respiratory Care Board of California.

(y) The Acupuncture Board.

(z) The Board of Psychology.

(aa) The California Board of Podiatric Medicine.

(ab) The Physical Therapy Board of California.

(ac) The Arbitration Review Program.

(ad) The Physician Assistant Committee.

(ae) The Speech-Language Pathology and Audiology Board.

(af) The California Board of Occupational Therapy.

(ag) The Osteopathic Medical Board of California.

(ah) The Naturopathic Medicine Committee.

(ai) The Dental Hygiene Committee of California.

(aj) The Professional Fiduciaries Bureau.

(ak) The State Board of Chiropractic Examiners.

(al) The Bureau of Real Estate.

(am) The Bureau of Real Estate Appraisers.

(an) The Structural Pest Control Board.

(ao) The Bureau of Medical Marijuana Regulation. (This is where they add the new Bureau to the Department of Consumer Affairs)

(ap)  Any other boards, offices, or officers subject to its jurisdiction by law.

SEC. 3. Section 205.1 is added to the Business and Professions Code, to read:

205.1. Notwithstanding subdivision (a) of Section 205, the Medical Marijuana Regulation and Safety Act Fund is a special fund within the Professions and Vocations Fund, and is subject to subdivision (b) of Section 205.

  • This is where the licensing money goes….

SEC. 4. Chapter 3.5 (commencing with Section 19300) is added to Division 8 of the Business and Professions Code, to read:

CHAPTER  3.5. Medical Marijuana Regulation and Safety act

Article  1. Definitions

19300. This act shall be known and may be cited as the Medical Marijuana Regulation and Safety Act.

  • Everyone needs a name… You could call it “Pile of Shit”; but the real name is the Medical Marijuana Regulation and Safety Act, which people will eventually call MMRS I am sure.

19300.5. For purposes of this chapter, the following definitions shall apply:

(a) “Accrediting body” means a nonprofit organization that requires conformance to ISO/IEC 17025 requirements and is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement for Testing.

  • This will be the authority over the labs. The problem is due to Federal law, even these bodies have no idea what good standards and practices are for testing cannabis products yet.

(b) “Applicant,” for purposes of Article 4 (commencing with Section 19319), means the following:

(1) Owner or owners of a proposed facility, including all persons or entities having ownership interest other than a security interest, lien, or encumbrance on property that will be used by the facility.

  • If you own any part of the business at all you are officially an applicant. Failure to disclose ownership is a no no.

(2) If the owner is an entity, “owner” includes within the entity each person participating in the direction, control, or management of, or having a financial interest in, the proposed facility.

  • Even if your corporation is the owner, everyone who has any authority over the corporation is included as an owner.

(3) If the applicant is a publicly traded company, “owner” means the chief executive officer or any person or entity with an aggregate ownership interest of 5 percent or more.

  • If you go public, your CEO and any person with 5% of shares or more is an owner.

(c) “Batch” means a specific quantity of medical cannabis or medical cannabis products that is intended to have uniform character and quality, within specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture.

  • So a “batch” of weed will be all of the crop that is the same strain, grown under the same conditions, and harvested at the same time. For edibles and concentrates it will be the same type of product produced with the same raw materials.

(d) “Bureau” means the Bureau of Medical Marijuana Regulation within the Department of Consumer Affairs.

  • AKA your new overlords….

(e) “Cannabinoid” or “phytocannabinoid” means a chemical compound that is unique to and derived from cannabis.

  • This should get interesting…. We do not even really know what all of the cannabinoids are yet, or if they are indeed unique to cannabis only. But for now, THC, CBD, CBN, etc. will all be included.

(f) “Cannabis” means all parts of the plant Cannabis sativa Linnaeus., Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from marijuana. “Cannabis” also means marijuana as defined by Section 11018 of the Health and Safety Code as enacted by Chapter 1407 of the Statutes of 1972. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, “cannabis” does not mean “industrial hemp” as defined by Section 81000 of the Food and Agricultural Code or Section 11018.5 of the Health and Safety Code.

  • So get this….. Above “cannabinoid” is defined as “a chemical compound that is unique to and derived from cannabis;” but then industrial hemp is not defined as cannabis here, so therefore the fact that industrial hemp also contains THC, CBD, etc. means that those cannabinoids are not “unique to” cannabis. Dafuck?

(g) “Cannabis concentrate” means manufactured cannabis that has undergone a process to concentrate the cannabinoid active ingredient, thereby increasing the product’s potency. An edible medical cannabis product is not considered food, as defined by Section 109935 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.

  • This is a strange definition. Is keif a concentrate? And so edibles are not “foods” nor are they a “drug.” So what the fuck are they then?

(h) “Caregiver” or “primary caregiver” has the same meaning as that term is defined in Section 11362.7 of the Health and Safety Code.

  • “Primary caregiver” means the individual, designated by a qualified patient or by a person with an identification card, who has consistently assumed responsibility for the housing, health, or safety of that patient or person, and may include any of the following:
    • (1) In any case in which a qualified patient or person with an identification card receives medical care or supportive services, or both, from a clinic licensed pursuant to Chapter 1 (commencing with Section 1200) of Division 2, a health care facility licensed pursuant to Chapter 2 (commencing with Section 1250) of Division 2, a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01) of Division 2, a residential care facility for the elderly licensed pursuant to Chapter 3.2 (commencing with Section 1569) of Division 2, a hospice, or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725) of Division 2, the owner or operator, or no more than three employees who are designated by the owner or operator, of the clinic, facility, hospice, or home health agency, if designated as a primary caregiver by that qualified patient or person with an identification card.
    • (2) An individual who has been designated as a primary caregiver by more than one qualified patient or person with an identification card, if every qualified patient or person with an identification card who has designated that individual as a primary caregiver resides in the same city or county as the primary caregiver.
    • (3) An individual who has been designated as a primary caregiver by a qualified patient or person with an identification card who resides in a city or county other than that of the primary caregiver, if the individual has not been designated as a primary caregiver by any other qualified patient or person with an identification card.

(i) “Certificate of accreditation” means a certificate issued by an accrediting body to a licensed testing laboratory, entity, or site to be registered in the state.

  • Labs will need to be accredited, whatever that ends up meaning….

(j) “Chief” means Chief of the Bureau of Medical Marijuana Regulation within the Department of Consumer Affairs.

  • Call me “Chief.” This will be the person who gets to try and make all of these agencies work together. Probably make about $80k a year for a huge hassle.

(k) “Commercial cannabis activity” includes cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of medical cannabis or a medical cannabis product, except as set forth in Section 19319, related to qualifying patients and primary caregivers.

  • So basically everything is commercial cannabis activity that is not a patient growing, possessing, and using cannabis for themselves, or for a person they are a registered caregiver of. Don’t go sharing your joint, or you are engaged in commercial cannabis activity.

(l) “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

  • It is an interesting definition of cultivation…. What about manicuring or treating the plants? Grading? Like… this plant gets an “F” LOL.

(m) “Delivery” means the commercial transfer of medical cannabis or medical cannabis products from a dispensary, up to an amount determined by the bureau to a primary caregiver or qualified patient as defined in Section 11362.7 of the Health and Safety Code, or a testing laboratory. “Delivery” also includes the use by a dispensary of any technology platform owned and controlled by the dispensary, or independently licensed under this chapter, that enables qualified patients or primary caregivers to arrange for or facilitate the commercial transfer by a licensed dispensary of medical cannabis or medical cannabis products.

  • Yes… All delivery will have to be from a dispensary, and not any dispensary either. Only certain ones.

(n) “Dispensary” means a facility where medical cannabis, medical cannabis products, or devices for the use of medical cannabis or medical cannabis products are offered, either individually or in any combination, for retail sale, including an establishment that delivers, pursuant to express authorization by local ordinance, medical cannabis and medical cannabis products as part of a retail sale.

  • So wait…. Did they just make headshops dispensaries?
  • At least they found the courage to use the term “retail sale.”

(o) “Dispensing” means any activity involving the retail sale of medical cannabis or medical cannabis products from a dispensary.

  • Fair enough…. If you sell weed you have to be a dispensary. Period.

(p) “Distribution” means the procurement, sale, and transport of medical cannabis and medical cannabis products between entities licensed pursuant to this chapter.

  • You guys are going to love this part…. ALL PRODUCTS HAVE TO GO THROUGH A DISTRIBUTOR NOW.

(q) “Distributor” means a person licensed under this chapter to engage in the business of purchasing medical cannabis from a licensed cultivator, or medical cannabis products from a licensed manufacturer, for sale to a licensed dispensary.

  • Yup. No more direct vending. A “distributor” will buy your products, add a distribution fee to them, and then sell them to the dispensary…. I will show you where it makes this the law in a minute.

(r) “Dried flower” means all dead medical cannabis that has been harvested, dried, cured, or otherwise processed, excluding leaves and stems.

  • I prefer the term “dried flower clusters” myself; but whatever. So trim is not included.

(s) “Edible cannabis product” means manufactured cannabis that is intended to be used, in whole or in part, for human consumption, including, but not limited to, chewing gum. An edible medical cannabis product is not considered food as defined by Section 109935 of the Health and Safety Code or a drug as defined by Section 109925 of the Health and Safety Code.

  • So weird… Not a food and not a drug. Just a product intended for human consumption. I can eat hash. Does that make it an edible? Weird that they needed to throw chewing gum in there, as if that were a big thing or something. I guess they are saying you do not have to swallow it? The edible deal is going to get weird for sure….

(t) “Fund” means the Medical Marijuana Regulation and Safety Act Fund established pursuant to Section 19351.

  • Where your money goes…

(u) “Identification program” means the universal identification certificate program for commercial medical cannabis activity authorized by this chapter.

  • Everything and everyone will have an identification number and will be tracked.

(v) “Labor peace agreement” means an agreement between a licensee and a bona fide labor organization that, at a minimum, protects the state’s proprietary interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant’s business. This agreement means that the applicant has agreed not to disrupt efforts by the bona fide labor organization to communicate with, and attempt to organize and represent, the applicant’s employees. The agreement shall provide a bona fide labor organization access at reasonable times to areas in which the applicant’s employees work, for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. This type of agreement shall not mandate a particular method of election or certification of the bona fide labor organization.

  • So if you have over 20 employees you will need to let a Union come in and try to talk your staff into organizing. I am not anti-union in any way, but it is odd to see it codified into the law like this. What other industries is this required in? Seems like UFCW and the likes have their hands up lawmakers’ asses on this one. “Hi. I am Dan Rush. I am here to talk to you about our union.”

(w) “Licensing authority” means the state agency responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the license.

  • You have the Department of Food and Agriculture for cultivation; and the Department of Public Health for manufacturing and lab testing; and the Department of Consumer Affairs for dispensaries and everyone else. I am sure they will all work together fine. What ever is there to worry about?

(x) “Cultivation site” means a facility where medical cannabis is planted, grown, harvested, dried, cured, graded, or trimmed, or that does all or any combination of those activities, that holds a valid state license pursuant to this chapter, and that holds a valid local license or permit.

  • Why is this not in alphabetical order? Weird. This is the new term for your grow.

(y) “Manufacturer” means a person that conducts the production, preparation, propagation, or compounding of manufactured medical cannabis, as described in subdivision (ae), or medical cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages medical cannabis or medical cannabis products or labels or relabels its container, that holds a valid state license pursuant to this chapter, and that holds a valid local license or permit.

  • That covers a lot. Edibles, concentrates, topical preparation, and even just repackaging are all manufacturing.

(z) “Testing laboratory” means a facility, entity, or site in the state that offers or performs tests of medical cannabis or medical cannabis products and that is both of the following:

  • What is clear is that the current lab testing scene is inadequate and faulty. It is mostly bullshit. Will new standards and processes be enacted where all labs play by the same rules? Will the labs that also have interests in other companies begin to be investigated for their practices of giving their own companies better results than others?

(1) Accredited by an accrediting body that is independent from all other persons involved in the medical cannabis industry in the state.

  • What do these accrediting bodies know about cannabis?

(2) Registered with the State Department of Public Health.

(aa) “Transporter” means a person issued a state license by the bureau to transport medical cannabis or medical cannabis products in an amount above a threshold determined by the bureau between facilities that have been issued a state license pursuant to this chapter.

  • Transporting weed from spot to spot will become a big deal. What is interesting is you will have to transport it to a distributor, and then the distributor will have to transport it to the dispensary, or some shit like that…. It is complicated.

(ab) “Licensee” means a person issued a state license under this chapter to engage in commercial cannabis activity.

  • Get a license, hippie!

(ac) “Live plants” means living medical cannabis flowers and plants, including seeds, immature plants, and vegetative stage plants.

  • Basic stuff…. If it is alive it is a live plant.

(ad) “Lot” means a batch, or a specifically identified portion of a batch, having uniform character and quality within specified limits. In the case of medical cannabis or a medical cannabis product produced by a continuous process, “lot” means a specifically identified amount produced in a unit of time or a quantity in a manner that ensures its having uniform character and quality within specified limits.

  • So a lot is a portion of a batch, I guess. Or maybe the whole batch. Who knows? Do I need a lot number and a batch number? Maybe the batch is the weed, and if I make brownies and cookies those would be “lots” of that batch.

(ae) “Manufactured cannabis” means raw cannabis that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product.

  • So everyone making these products needs a manufacturing license….

(af) “Manufacturing site” means a location that produces, prepares, propagates, or compounds manufactured medical cannabis or medical cannabis products, directly or indirectly, by extraction methods, independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, and is owned and operated by a licensee for these activities.

  • This is what your kitchen or extraction lab is now called…

(ag) “Medical cannabis,” “medical cannabis product,” or “cannabis product” means a product containing cannabis, including, but not limited to, concentrates and extractions, intended to be sold for use by medical cannabis patients in California pursuant to the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code. For the purposes of this chapter, “medical cannabis” does not include “industrial hemp” as defined by Section 81000 of the Food and Agricultural Code or Section 11018.5 of the Health and Safety Code.

  • So everything intended for patient use is considered here… except for “industrial hemp.” So the hucksters on the industrial hemp CBD oil trip can continue their scams with no oversight. Super.

(ah) “Nursery” means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of medical cannabis.

  • Nurseries would seem to have the lightest regulations going. I am not sure about the “other agricultural products” angle. Going to have to wrap my head around what that could include. But looks like a good time to open a clone and seed company! It is also unclear if nurseries will need to use distributors too…

(ai) “Permit,” “local license,” or “local permit” means an official document granted by a local jurisdiction that specifically authorizes a person to conduct commercial cannabis activity in the local jurisdiction.

  • This is where most of us will likely get fucked, as local jurisdictions are not going to just roll over and start granting licenses for growing and making extractions, edibles, etc. The local government process is extremely difficult to overcome in most areas, and will be the ultimate downfall of many. While some cities and counties will license, be prepared for the fight of a lifetime in most areas… and this is where you will see bribes and corruption happening on a macro scale. Get ready to meet the FBI because they are watching this like hawks I am sure.

(aj) “Person” means an individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit and includes the plural as well as the singular number.

  • Corporations are people my friend….

(ak) “State license,” “license,” or “registration” means a state license issued pursuant to this chapter.

  • Get a license, hippie!

(al) “Topical cannabis” means a product intended for external use. A topical cannabis product is not considered a drug as defined by Section 109925 of the Health and Safety Code.

  • So what about a product like Full Extract Cannabis Oil that can be both ingested and used as a topical? I guess it will depend on how it is marketed?

(am) “Transport” means the transfer of medical cannabis or medical cannabis products from the permitted business location of one licensee to the permitted business location of another licensee, for the purposes of conducting commercial cannabis activity authorized pursuant to this chapter.

  • This will be a lot of paperwork. Like I said, you have mandated distributors now. So the producer will have to transport it to a distributor, and then the distributor has to transport it to the dispensary. I guess the distributor could transport directly from the producer to the dispensary, but what if you have several products to distribute? Do you have to transport them all individually? This is where your database of shipping manifests will come into play too… fun and exciting stuff.

19300.7. License classifications pursuant to this chapter are as follows:

  • The cultivation licenses were broke down in SB 643… the other licenses are detailed below. We will get there.

(a) Type 1 = Cultivation; Specialty outdoor; Small.

  • Outdoor up to 5,000 sq ft canopy

(b) Type 1A = Cultivation; Specialty indoor; Small.

  • Indoor up to 5,000 sq ft canopy

(c) Type 1B = Cultivation; Specialty mixed-light; Small.

  • Greenhouse with supplemental lighting up to 5,000 sq ft

(d) Type 2 = Cultivation; Outdoor; Small.

  • Outdoor over 5,000 sq ft up to 10,000 sq ft of canopy

(e) Type 2A = Cultivation; Indoor; Small.

  • Indoor over 5,000 sq ft up to 10,000 sq ft of canopy

(f) Type 2B = Cultivation; Mixed-light; Small.

  • Greenhouse with supplemental lighting over 5,000 sq ft up to 10,000 sq ft of canopy

(g) Type 3 = Cultivation; Outdoor; Medium.

  • Outdoor over 10,000 sq ft of canopy up to ONE ACRE

(h) Type 3A = Cultivation; Indoor; Medium.

  • Indoor over 10,000 sq ft up to 22,000 sq ft of canopy

(i) Type 3B = Cultivation; Mixed-light; Medium.

  • Greenhouse with supplemental lighting over 10,000 sq ft up to 22,000 sq ft of canopy

(j) Type 4 = Cultivation; Nursery.

  • Only produces clones and/or seed. Does not seem to have a limit on size.

(k) Type 6 = Manufacturer 1.

  • Produces products with non-volatile solvents

(l) Type 7 = Manufacturer 2.

  • Produces products with volatile solvents

(m) Type 8 = Testing.

  • Labs….

(n) Type 10 = Dispensary; General.

  • Weed stores…..

(o) Type 10A = Dispensary; No more than three retail sites.

  • Weed stores that do not have more than 3 stores and cannot deliver…

(p) Type 11 = Distribution.

  • Middle man… All transactions will happen through limited distributors now. Wait for it.

(q) Type 12 = Transporter.

  • You have to have a license to drive around with weed, making it easy for cops to tell if the ten pack in your trunk is legit or not.

Article  2. Administration

19302. There is in the Department of Consumer Affairs the Bureau of Medical Marijuana Regulation, under the supervision and control of the director. The director shall administer and enforce the provisions of this chapter.

  • So the new fandangled “Bureau of Medical Marijuana Regulation” will have its own chief, but ultimately it is a part of the Department of Consumer Affairs and will answer to their director, who is Awet Kidane, although who knows who it will be by time they get all this shit together.

19303. Protection of the public shall be the highest priority for the bureau in exercising its licensing, regulatory, and disciplinary functions under this chapter. Whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount.

  • Just like the NSA spying on you, the veil of “protecting the public” can be used to really do whatever they want if the situation calls for it.

19304. The bureau shall make and prescribe reasonable rules as may be necessary or proper to carry out the purposes and intent of this chapter and to enable it to exercise the powers and duties conferred upon it by this chapter, not inconsistent with any statute of this state, including particularly this chapter and Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For the performance of its duties, the bureau has the power conferred by Sections 11180 to 11191, inclusive, of the Government Code.

  • This officially grants the new Bureau of Medical Marijuana Regulation the same power realized by other Bureaus in the State.

19305. Notice of any action of the licensing authority required by this chapter to be given may be signed and given by the director or an authorized employee of the department and may be made personally or in the manner prescribed by Section 1013 of the Code of Civil Procedure.

  • Gives them the power to send out notices, as allowed by law.

19306. (a) The bureau may convene an advisory committee to advise the bureau and licensing authorities on the development of standards and regulations pursuant to this chapter, including best practices and guidelines to ensure qualified patients have adequate access to medical cannabis and medical cannabis products. The advisory committee members shall be determined by the chief.

  • They “may” convene an advisory committee to help them figure all of this out. They may not too, I guess. The committee will be determined by the Chief… wanna bet it has more cops and bureaucrats than industry stakeholders and patients?

(b) The advisory committee members may include, but not be limited to, representatives of the medical marijuana industry, representatives of medical marijuana cultivators, appropriate local and state agencies, appropriate local and state law enforcement, physicians, environmental and public health experts, and medical marijuana patient advocates.

  • “May include”…. Or may not. I am going to put my money that there will be a lot of cops, non-cannabis doctors, and overbearing bureaucrats on the committee. But what do I know?

19307. A licensing authority may make or cause to be made such investigation as it deems necessary to carry out its duties under this chapter.

  • They can investigate stuff….

19308. For any hearing held pursuant to this chapter, the director, or a licensing authority, may delegate the power to hear and decide to an administrative law judge. Any hearing before an administrative law judge shall be pursuant to the procedures, rules, and limitations prescribed in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

  • Licensing disputes and enforcement hearings will go in front of a judge…

19309. In any hearing before a licensing authority pursuant to this chapter, the licensing authority may pay any person appearing as a witness at the hearing at the request of the licensing authority pursuant to a subpoena, his or her actual, necessary, and reasonable travel, food, and lodging expenses, not to exceed the amount authorized for state employees.

  • They can cover their witnesses’ expenses for said hearings…

19310. The department may on its own motion at any time before a penalty assessment is placed into effect and without any further proceedings, review the penalty, but such review shall be limited to its reduction.

  • They can review their penalties if they think they screwed up and reduce it if they want to.

Article  3. Enforcement

19311. Grounds for disciplinary action include:

  • The stuff that will get you in trouble are:

(a) Failure to comply with the provisions of this chapter or any rule or regulation adopted pursuant to this chapter.

  • Not following the rules…

(b) Conduct that constitutes grounds for denial of licensure pursuant to Chapter 3 (commencing with Section 490) of Division 1.5.

  • If you do something that would have kept you from getting a license in the first place, they can discipline you accordingly.

(c) Any other grounds contained in regulations adopted by a licensing authority pursuant to this chapter.

  • Any other thing that the DCA, DFA and/or DPH come up with in their licensing programs.

(d) Failure to comply with any state law, except as provided for in this chapter or other California law.

  • ANY STATE LAW… taxes, child support, employment law, etc.

19312. Each licensing authority may suspend or revoke licenses, after proper notice and hearing to the licensee, if the licensee is found to have committed any of the acts or omissions constituting grounds for disciplinary action. The disciplinary proceedings under this chapter shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the director of each licensing authority shall have all the powers granted therein.

  • They can suspend your license and close your business if you are disciplined. You have certain rights to appeal as granted under State law.

19313. Each licensing authority may take disciplinary action against a licensee for any violation of this chapter when the violation was committed by the licensee’s agent or employee while acting on behalf of the licensee or engaged in commercial cannabis activity.

  • So not just you, but the actions of your employees are also grounds for discipline if they are on the clock working for you at the time.

19313.5. Upon suspension or revocation of a license, the licensing authority shall inform the bureau. The bureau shall then inform all other licensing authorities and the Department of Food and Agriculture.

  • Everybody is informed if your license gets suspended…

19314. All accusations against licensees shall be filed by the licensing authority within five years after the performance of the act or omission alleged as the ground for disciplinary action; provided, however, that the foregoing provision shall not constitute a defense to an accusation alleging fraud or misrepresentation as a ground for disciplinary action. The cause for disciplinary action in such case shall not be deemed to have accrued until discovery, by the licensing authority, of the facts constituting the fraud or misrepresentation, and, in such case, the accusation shall be filed within five years after such discovery.

  • They have 5 years from the incident to file charges, unless we are talking fraud or misrepresentation… then they have 5 years from when they found out about it.

19315. (a) Nothing in this chapter shall be interpreted to supersede or limit existing local authority for law enforcement activity, enforcement of local zoning requirements or local ordinances, or enforcement of local permit or licensing requirements.

  • Local cops and regulators can still fuck with you too…

(b) Nothing in this chapter shall be interpreted to require the Department of Consumer Affairs to undertake local law enforcement responsibilities, enforce local zoning requirements, or enforce local licensing requirements.

  • But if you locals make some crazy ass rules we are not responsible to enforce them…

(c) Nothing in this chapter shall be interpreted to supersede or limit state agencies from exercising their existing enforcement authority under the Fish and Game Code, the Water Code, the Food and Agricultural Code, or the Health and Safety Code.

  • All the other State enforcement agencies can still do their things too…

19316. (a) Pursuant to Section 7 of Article XI of the California Constitution, a city, county, or city and county may adopt ordinances that establish additional standards, requirements, and regulations for local licenses and permits for commercial cannabis activity. Any standards, requirements, and regulations regarding health and safety, testing, security, and worker protections established by the state shall be the minimum standards for all licensees statewide.

  • Local cities and counties can also make more rules for you to follow, but they must at least meet the minimum standards of State rules. So no… you cannot bribe your local official to make things easier for you, but they can make them more difficult (which they will)

(b) For facilities issued a state license that are located within the incorporated area of a city, the city shall have full power and authority to enforce this chapter and the regulations promulgated by the bureau or any licensing authority, if delegated by the state. Notwithstanding Sections 101375, 101400, and 101405 of the Health and Safety Code or any contract entered into pursuant thereto, or any other law, the city shall further assume complete responsibility for any regulatory function relating to those licensees within the city limits that would otherwise be performed by the county or any county officer or employee, including a county health officer, without liability, cost, or expense to the county.

  • If the city licenses you, the city has to deal with you and cannot make the county do it, or pay for it…

(c) Nothing in this chapter, or any regulations promulgated thereunder, shall be deemed to limit the authority or remedies of a city, county, or city and county under any provision of law, including, but not limited to, Section 7 of Article XI of the California Constitution.

  • This law does not limit cities and counties from enforcing their own laws in any way…

19317. (a) The actions of a licensee, its employees, and its agents that are (1) permitted pursuant to both a state license and a license or permit issued by the local jurisdiction following the requirements of the applicable local ordinances, and (2) conducted in accordance with the requirements of this chapter and regulations adopted pursuant to this chapter, are not unlawful under state law and shall not be an offense subject to arrest, prosecution, or other sanction under state law, or be subject to a civil fine or be a basis for seizure or forfeiture of assets under state law.

  • If you have a State and local license… and you follow every rule, you are not illegal and will not be arrested. The rest of you are fucked though. Sorry.

(b) The actions of a person who, in good faith, allows his or her property to be used by a licensee, its employees, and its agents, as permitted pursuant to both a state license and a local license or permit following the requirements of the applicable local ordinances, are not unlawful under state law and shall not be an offense subject to arrest, prosecution, or other sanction under state law, or be subject to a civil fine or be a basis for seizure or forfeiture of assets under state law.

  • Landlords and property owners renting space to State and local licensed business who are following all of our laws will not be in trouble or have your property taken… This sort of reminds me of the banking thing with the Feds. Will landlords be hesitant because it sort of forces them to police their tenants, in a sense? If your tenenats are following the rules we won’t take your building… Wait. How do I know if they are following the rules?

19318. (a) A person engaging in commercial cannabis activity without a license required by this chapter shall be subject to civil penalties of up to twice the amount of the license fee for each violation, and the court may order the destruction of medical cannabis associated with that violation in accordance with Section 11479 of the Health and Safety Code. Each day of operation shall constitute a separate violation of this section. All civil penalties imposed and collected pursuant to this section by a licensing authority shall be deposited into the Medical Cannabis Fines and Penalties Account established pursuant to Section 19351.

  • So if you are growing, producing, or selling weed stuff without a license you will have to pay up to twice whatever that licensing fee is for EACH violation (like each plant?); and they can destroy it; and each day you continue is a separate violation and fine. The money will go into the fund.
  • The good news is they did not bring up jail! So theoretically, it is a numbers game. You could set up 20 illegal grows and hope only a couple get busted, and use the others to pay the fines on those? Just thinking out loud here…

(b) If an action for civil penalties is brought against a licensee pursuant to this chapter by the Attorney General on behalf of the people, the penalty collected shall be deposited into the Medical Cannabis Fines and Penalties Account established pursuant to Section 19351. If the action is brought by a district attorney or county counsel, the penalty collected shall be paid to the treasurer of the county in which the judgment was entered. If the action is brought by a city attorney or city prosecutor, the penalty collected shall be paid to the treasurer of the city or city and county in which the judgment was entered. If the action is brought by a city attorney and is adjudicated in a superior court located in the unincorporated area or another city in the same county, the penalty shall be paid one-half to the treasurer of the city in which the complaining attorney has jurisdiction and one-half to the treasurer of the county in which the judgment is entered.

  • Basicallly… whoever busts you gets the money.

(c) Notwithstanding subdivision (a), criminal penalties shall continue to apply to an unlicensed person engaging in commercial cannabis activity in violation of this chapter, including, but not limited to, those individuals covered under Section 11362.7 of the Health and Safety Code.

  • Wait… I spoke too soon. They can still take your ass to jail if they want if you don’t have a license. I knew it was too good to be true.

Article  4. Licensing

19320. (a) Licensing authorities administering this chapter may issue state licenses only to qualified applicants engaging in commercial cannabis activity pursuant to this chapter. Upon the date of implementation of regulations by the licensing authority, no person shall engage in commercial cannabis activity without possessing both a state license and a local permit, license, or other authorization. A licensee shall not commence activity under the authority of a state license until the applicant has obtained, in addition to the state license, a license or permit from the local jurisdiction in which he or she proposes to operate, following the requirements of the applicable local ordinance.

  • The Department of Food and Ag, the Dpeartment of Public Health, and the Department of Consumer Affairs can issue license to those qualified.
  • The day that they implement licensing no one can be involved in any commercial activity without bot state and local approval.
  • You cannot operate until you get not just the State license, but also the local one.

(b) Revocation of a local license, permit, or other authorization shall terminate the ability of a medical cannabis business to operate within that local jurisdiction until the local jurisdiction reinstates or reissues the local license, permit, or other required authorization. Local authorities shall notify the bureau upon revocation of a local license. The bureau shall inform relevant licensing authorities.

  • If the locals revoke you, you cannot operate and they will inform the State…

(c) Revocation of a state license shall terminate the ability of a medical cannabis licensee to operate within California until the licensing authority reinstates or reissues the state license. Each licensee shall obtain a separate license for each location where it engages in commercial medical cannabis activity. However, transporters only need to obtain licenses for each physical location where the licensee conducts business while not in transport, or any equipment that is not currently transporting medical cannabis or medical cannabis products, permanently resides.

  • If the state revokes you, you also can’t operate no matter what the locals say.
  • Each location will have a separate license.
  • Transporters don’t need a license for everywhere they transport to and from.

(d) In addition to the provisions of this chapter, local jurisdictions retain the power to assess fees and taxes, as applicable, on facilities that are licensed pursuant to this chapter and the business activities of those licensees.

  • The locals can charge you more money as they see fit…

(e) Nothing in this chapter shall be construed to supersede or limit state agencies, including the State Water Resources Control Board and Department of Fish and Wildlife, from establishing fees to support their medical cannabis regulatory programs.

  • Other State agencies may charge you too, in addition to your licensing fees and taxes…

19321. (a) The Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health shall promulgate regulations for implementation of their respective responsibilities in the administration of this chapter.

  • Each of the Departments are responsible for regulating their own segment of the industry. What could go wrong there?

(b) A license issued pursuant to this section shall be valid for 12 months from the date of issuance. The license shall be renewed annually. Each licensing authority shall establish procedures for the renewal of a license.

  • Your license is only good for a year… gotta renew every year.

(c) Notwithstanding subdivision (a) of Section 19320, a facility or entity that is operating in compliance with local zoning ordinances and other state and local requirements on or before January 1, 2018, may continue its operations until its application for licensure is approved or denied pursuant to this chapter. In issuing licenses, the licensing authority shall prioritize any facility or entity that can demonstrate to the authority’s satisfaction that it was in operation and in good standing with the local jurisdiction by January 1, 2016.

  • Here we go… You have until January 1, 2018 to convince your city or county to allow you to exist, and if they do, you can continue to operate while we figure out licensing.
  • But if you are in compliance by January 1, 2016 (three months from now), you will get priority. So… basically only dispensaries.

(d) Issuance of a state license or a determination of compliance with local law by the licensing authority shall in no way limit the ability of the City of Los Angeles to prosecute any person or entity for a violation of, or otherwise enforce, Proposition D, approved by the voters of the City of Los Angeles on the May 21, 2013, ballot for the city, or the city’s zoning laws. Nor may issuance of a license or determination of compliance with local law by the licensing authority be deemed to establish, or be relied upon, in determining satisfaction with the immunity requirements of Proposition D or local zoning law, in court or in any other context or forum.

  • Here is the carve out for Prop D in Los Angeles. There are a lot of lawsuits happening down there. It is quite the clusterfuck really…

Article  5. Medical Marijuana Regulation

19326. (a) A person other than a licensed transporter shall not transport medical cannabis or medical cannabis products from one licensee to another licensee, unless otherwise specified in this chapter.

  • Only a licensed transporter can move weed around the state, making it easy to seize weed not in possession of a transporter.

(b) All licensees holding cultivation or manufacturing licenses shall send all medical cannabis and medical cannabis products cultivated or manufactured to a distributor, as defined in Section 19300.5, for quality assurance and inspection by the Type 11 licensee and for a batch testing by a Type 8 licensee prior to distribution to a dispensary. Those licensees holding a Type 10A license in addition to a cultivation license or a manufacturing license shall send all medical cannabis and medical cannabis products to a Type 11 licensee for presale inspection and for a batch testing by a Type 8 licensee prior to dispensing any product. The licensing authority shall fine a licensee who violates this subdivision in an amount determined by the licensing authority to be reasonable.

  • Got that? ALL cultivators and manufacturing must send their products to a DISTRBUTOR. Even if you are a dispensary who also cultivates you still have to send ALL of your cannabis to a DISTRIBUTOR to distribute back to you. The distributor is responsible for the testing, it seems.
  • You will be fined and/or disciplined if you don’t. DISTRIBUTORS!!!!!!!!!!!!!

(c) (1) Upon receipt of medical cannabis or medical cannabis products by a holder of a cultivation or manufacturing license, the Type 11 licensee shall first inspect the product to ensure the identity and quantity of the product and then ensure a random sample of the medical cannabis or medical cannabis product is tested by a Type 8 licensee prior to distributing the batch of medical cannabis or medical cannabis products.

  • When the DISTRIBUTOR receives your weed or weed accessories they must inspect it and make sure it is all there, and then take a random sample of it to send to a lab.

(2) Upon issuance of a certificate of analysis by the Type 8 licensee that the product is fit for manufacturing or retail, all medical cannabis and medical cannabis products shall undergo a quality assurance review by the Type 11 licensee prior to distribution to ensure the quantity and content of the medical cannabis or medical cannabis product, and for tracking and taxation purposes by the state. Licensed cultivators and manufacturers shall package or seal all medical cannabis and medical cannabis products in tamper-evident packaging and use a unique identifier, as prescribed by the Department of Food and Agriculture, for the purpose of identifying and tracking medical cannabis or medical cannabis products. Medical cannabis and medical cannabis products shall be labeled as required by Section 19347. All packaging and sealing shall be completed prior to medical cannabis or medical cannabis products being transported or delivered to a licensee, qualified patient, or caregiver.

  • After the lab send over a report saying the product is safe, the DISTRIBUTOR then must ensure the quantity and content of the weed and weed accessories are all there in a report to be used for tax purposes. Yes… the trim or hash you use for your products will need to be tested and then sold back to you by the DISTRIBUTOR.
  • Cultivators and Manufacturers must seal all products in tamper evident packaging with its identification code/number on it before giving it to the DISTRIBUTOR.
  • Everything must be labeled according to strict regulation
  • All products must be sealed, labeled, and packaged before being sent out to dispensaries for dispensing to patients and caregivers. So everything will need to be prepackaged??? That sucks.

(3) This section does not limit the ability of licensed cultivators, manufacturers, and dispensaries to directly enter into contracts with one another indicating the price and quantity of medical cannabis or medical cannabis products to be distributed. However, a Type 11 licensee responsible for executing the contract is authorized to collect a fee for the services rendered, including, but not limited to, costs incurred by a Type 8 licensee, as well as applicable state or local taxes and fees.

  • So growers and product manufacturers can make agreements with the dispensaries on price and whatnot; but the DISTRIBUTOR is responsible for executing the agreement and can add on a fee for his services, as well as for testing and taxes.

(d) Medical cannabis and medical cannabis products shall be tested by a registered testing laboratory, prior to retail sale or dispensing, as follows:

  • Here is what all products need to be tested for prior to being distributed:

(1) Medical cannabis from dried flower shall, at a minimum, be tested for concentration, pesticides, mold, and other contaminants.

  • Does “concentration” mean cannabinoid quantity?

(2) Medical cannabis extracts shall, at a minimum, be tested for concentration and purity of the product.

  • Define “purity” please…

(3) This chapter shall not prohibit a licensee from performing on-site testing for the purposes of quality assurance of the product in conjunction with reasonable business operations. On-site testing by the licensee shall not be certified by the State Department of Public Health.

  • You can still test the stuff yourself, but it is not certified by us…

(e) All commercial cannabis activity shall be conducted between licensees, when these are available.

  • When licenses are available all activity must be between licensed entities… So this could happen soon if they get their shit together?

19327. (a) A licensee shall keep accurate records of commercial cannabis activity.

  • Record keeping…. Paperwork.

(b) All records related to commercial cannabis activity as defined by the licensing authorities shall be maintained for a minimum of seven years.

  • Must keep paperwork for 7 years…

(c) The bureau may examine the books and records of a licensee and inspect the premises of a licensee as the licensing authority or a state or local agency deems necessary to perform its duties under this chapter. All inspections shall be conducted during standard business hours of the licensed facility or at any other reasonable time.

  • They can examine your books during reasonable hours…

(d) Licensees shall keep records identified by the licensing authorities on the premises of the location licensed. The licensing authorities may make any examination of the records of any licensee. Licensees shall also provide and deliver copies of documents to the licensing agency upon request.

  • Keep your records on site, so we can come see them anytime. We may also ask for you to send them to us.

(e) A licensee or its agent, or employee, that refuses, impedes, obstructs, or interferes with an inspection of the premises or records of the licensee pursuant to this section has engaged in a violation of this chapter.

  • If you do not comply you are in trouble…

(f) If a licensee or an employee of a licensee fails to maintain or provide the records required pursuant to this section, the licensee shall be subject to a citation and fine of thirty thousand dollars ($30,000) per individual violation.

  • If you do not keep the proper paperwork you can be fined $30k for each fuck up…

19328. (a) A licensee may only hold a state license in up to two separate license categories, as follows:

  • You get TWO licenses at the most, so choose wisely….

(1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a Type 6 or 7 state license.

  • Cultivators up to 10,000 sq ft of canopy can also have a manufacturing license…

(2) Type 6 or 7 licensees, or a combination thereof, may also hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license.

  • Manufacturers can own cultivation licenses up to 10,000 sq ft of canopy

(3) Type 6 or 7 licensees, or a combination thereof, may also hold a Type 10A state license.

  • Manufacturers can have a dispensary license with no more than 3 locations…

(4) Type 10A licensees may also hold either a Type 6 or 7 state license, or a combination thereof.

  • Dispensaries with no more than 3 locations can have a manufacturing license…

(5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination thereof, may also hold a Type 10A state license.

  • Cultivators of less than 10,000 sq ft of canopy can have a dispensary license of no more than 3 facilities…

(6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A, or 2B state license, or a combination thereof.

  • Dispensaries without more than 3 locations can have cultivation licenses under 10,000 sq ft of canopy…

(7) Type 11 licensees shall apply for a Type 12 state license, but shall not apply for any other type of state license.

  • DISTRIBUTORS must have a transport license but can’t have any other licenses…

(8) Type 12 licensees may apply for a Type 11 state license.

  • Transporters can apply to be DISTRIBUTORS too…

(9) A Type 10A licensee may apply for a Type 6 or 7 state license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination of licenses thereof, no more than four acres of total canopy size of cultivation by the licensee is occurring throughout the state during the period that the respective licenses are valid. All cultivation pursuant to this section shall comply with local ordinances. This paragraph shall become inoperative on January 1, 2026.

  • A dispensary with no more than 3 locations can apply for a manufacturing license AND hold any cultivation and/or nursey license IF the combination of these licenses does not exceed 4 acres of canopy.
  • It seems as this is to allow for San Jose, where vertical integration is mandatory.
  • It will only be allowed until 2026.

(b) Except as provided in subdivision (a), a person or entity that holds a state license is prohibited from licensure for any other activity authorized under this chapter, and is prohibited from holding an ownership interest in real property, personal property, or other assets associated with or used in any other license category.

  • You can only have licenses as described above, and cannot have any ownership in other licenses unauthorized above.

(c) (1) In a jurisdiction that adopted a local ordinance, prior to July 1, 2015, allowing or requiring qualified businesses to cultivate, manufacture, and dispense medical cannabis or medical cannabis products, with all commercial cannabis activity being conducted by a single qualified business, upon licensure that business shall not be subject to subdivision (a) if it meets all of the following conditions:

  • Here is the San Jose vertical integration deal….

(A) The business was cultivating, manufacturing, and dispensing medical cannabis or medical cannabis products on July 1, 2015, and has continuously done so since that date.

(B) The business has been in full compliance with all applicable local ordinances at all times prior to licensure.

(C) The business is registered with the State Board of Equalization.

  • So don’t lose your lease or get in shit with the city, and pay the BOE!

(2) A business licensed pursuant to paragraph (1) is not required to conduct all cultivation or manufacturing within the bounds of a local jurisdiction, but all cultivation and manufacturing shall have commenced prior to July 1, 2015, and have been in full compliance with applicable local ordinances.

  • If you are not necessarily required to cultivate but your local city or county said you could, then you can apply for more than 2 licenses also.

(d) This section shall remain in effect only until January 1, 2026, and as of that date is repealed.

  • All bets are off after this date though…

19329. A licensee shall not also be licensed as a retailer of alcoholic beverages pursuant to Division 9 (commencing with Section 23000).

  • No booze and weed license together…

19330. This chapter and Article 2 (commencing with Section 11357) and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety Code shall not interfere with an employer’s rights and obligations to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of cannabis in the workplace or affect the ability of employers to have policies prohibiting the use of cannabis by employees and prospective employees, or prevent employers from complying with state or federal law.

  • You have NO rights with your employer. They can still fire your ass for using weed.

Article  7. Licensed Distributors, Dispensaries, and Transporters

19334. (a) State licenses to be issued by the Department of Consumer Affairs are as follows:

  • Here are the businesses licensed under the Department of Consumer Affairs

(1) “Dispensary,” as defined in this chapter. This license shall allow for delivery pursuant to Section 19340.

  • Weed stores… including the ones that deliver.

(2) “Distributor,” for the distribution of medical cannabis and medical cannabis products from manufacturer to dispensary. A Type 11 licensee shall hold a Type 12, or transporter, license and register each location where product is stored for the purposes of distribution. A Type 11 licensee shall not hold a license in a cultivation, manufacturing, dispensing, or testing license category and shall not own, or have an ownership interest in, a facility licensed in those categories other than a security interest, lien, or encumbrance on property that is used by a licensee. A Type 11 licensee shall be bonded and insured at a minimum level established by the licensing authority.

  • DISTRIBUTORS…. You gotta also have a transporter license, but can’t have any other licenses.
  • You cannot have interests in other weed businesses at all
  • Gotta be licensed and bonded…

(3) “Transport,” for transporters of medical cannabis or medical cannabis products between licensees. A Type 12 licensee shall be bonded and insured at a minimum level established by the licensing authority.

  • Transporting can be its own business. Weird, right?

(4) “Special dispensary status” for dispensers who have no more than three licensed dispensary facilities. This license shall allow for delivery where expressly authorized by local ordinance.

  • If you do not have more than 3 weed stores you can deliver if the locals allow for it.

(b) The bureau shall establish minimum security requirements for the commercial transportation and delivery of medical cannabis and products.

  • The “Bureau” will let you know what kind of lock box you will need and how many people need to be in the car… etc.

(c) A licensed dispensary shall implement sufficient security measures to both deter and prevent unauthorized entrance into areas containing medical cannabis or medical cannabis products and theft of medical cannabis or medical cannabis products at the dispensary. These security measures shall include, but not be limited to, all of the following:

  • Restricted access areas and security measures are required…

(1) Preventing individuals from remaining on the premises of the dispensary if they are not engaging in activity expressly related to the operations of the dispensary.

  • No loitering…

(2) Establishing limited access areas accessible only to authorized dispensary personnel.

  • No customers where the weed is…

(3) Storing all finished medical cannabis and medical cannabis products in a secured and locked room, safe, or vault, and in a manner as to prevent diversion, theft, and loss, except for limited amounts of cannabis used for display purposes, samples, or immediate sale.

  • All the weed must be secured, except for displays…

(d) A dispensary shall notify the licensing authority and the appropriate law enforcement authorities within 24 hours after discovering any of the following:

  • Call the cops and the licensing authority if:

(1) Significant discrepancies identified during inventory. The level of significance shall be determined by the bureau.

  • A bunch of weed is missing… (what is a bunch will be defined later)

(2) Diversion, theft, loss, or any criminal activity involving the dispensary or any agent or employee of the dispensary.

  • If people steal stuff, or any other criminal incidents happen…

(3) The loss or unauthorized alteration of records related to cannabis, registered qualifying patients, primary caregivers, or dispensary employees or agents.

  • If your records get lost or fucked with…

(4) Any other breach of security.

  • And any other shit that is a security risk…

Article  9. Delivery

19340. (a) Deliveries, as defined in this chapter, can only be made by a dispensary and in a city, county, or city and county that does not explicitly prohibit it by local ordinance.

  • Only a dispensary with three locations or less can deliver and only to a city that does not prohibit it in their ordinance… Wait a second. You just said earlier that they can only deliver to “where expressly authorized by local ordinance.” Which is it?

(b) Upon approval of the licensing authority, a licensed dispensary that delivers medical cannabis or medical cannabis products shall comply with both of the following:

(1) The city, county, or city and county in which the licensed dispensary is located, and in which each delivery is made, do not explicitly by ordinance prohibit delivery, as defined in Section 19300.5.

  • Do they have to “not prohibit” it or “expressly authorize” it? Those are very different things…

(2) All employees of a dispensary delivering medical cannabis or medical cannabis products shall carry a copy of the dispensary’s current license authorizing those services with them during deliveries and the employee’s government-issued identification, and shall present that license and identification upon request to state and local law enforcement, employees of regulatory authorities, and other state and local agencies enforcing this chapter.

  • Papers please….

(c) A county shall have the authority to impose a tax, pursuant to Article 11 (commencing with Section 19348), on each delivery transaction completed by a licensee.

  • Counties can tax deliveries in their county…

(d) During delivery, the licensee shall maintain a physical copy of the delivery request and shall make it available upon request of the licensing authority and law enforcement officers. The delivery request documentation shall comply with state and federal law regarding the protection of confidential medical information.

  • You gotta have papers verifying you were requested to deliver it but they can’t include patient info…

(e) The qualified patient or primary caregiver requesting the delivery shall maintain a copy of the delivery request and shall make it available, upon request, to the licensing authority and law enforcement officers.

  • The patient/caregiver must also keep a copy of the paperwork to show cops and whatnot…

(f) A local jurisdiction shall not prevent carriage of medical cannabis or medical cannabis products on public roads by a licensee acting in compliance with this chapter.

  • A local jurisdiction cannot outlaw you driving through on a way to deliver stuff…

Article  10. Licensed Manufacturers and Licensed Laboratories

19341. The State Department of Public Health shall promulgate regulations governing the licensing of cannabis manufacturers and testing laboratories. Licenses to be issued are as follows:

  • DPH! DPH!…. (rolls eyes)

(a) “Manufacturing level 1,” for manufacturing sites that produce medical cannabis products using nonvolatile solvents.

  • So I am guessing if you make weed products with butter, oil, water hash, etc and do not use BHO you get a level 1 license…

(b) “Manufacturing level 2,” for manufacturing sites that produce medical cannabis products using volatile solvents. The State Department of Public Health shall limit the number of licenses of this type.

  • If you use butane or other volatile solvents in your product making you will need a level 2 license… I wonder if alcohol extraction is volatile or non volatile?

(c) “Testing,” for testing of medical cannabis and medical cannabis products. Testing licensees shall have their facilities licensed according to regulations set forth by the division. A testing licensee shall not hold a license in another license category of this chapter and shall not own or have ownership interest in a facility licensed pursuant to this chapter.

  • Steve Deangelo sells his stock in Steep Hill?… CW Analytics cuts ties with its many affiliated businesses?… The lab deal will be nuts. My hope is that they can get to a place where labs are all on the same page, but there are still no canna-labs that have the time or equipment to properly test the many different types of edibles on the market, so there is that…

19342. (a) For the purposes of testing medical cannabis or medical cannabis products, licensees shall use a licensed testing laboratory that has adopted a standard operating procedure using methods consistent with general requirements for the competence of testing and calibration activities, including sampling, using standard methods established by the International Organization for Standardization, specifically ISO/IEC 17020 and ISO/IEC 17025 to test medical cannabis and medical cannabis products that are approved by an accrediting body that is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement.

  • They are going to try hard to standardize this shit, but as we have seen thus far in other states, given there are no real standards set by the FDA or any other agency, it is not as easy as it sounds…

(b) An agent of a licensed testing laboratory shall obtain samples according to a statistically valid sampling method for each lot.

  • Standardized sampling procedures can help… How to select a bud? How many pounds can be considered the same batch?

(c) A licensed testing laboratory shall analyze samples according to either of the following:

  • Labs must follow one of these two deals:

(1) The most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia.

(2) Scientifically valid methodology that is demonstrably equal or superior to paragraph (1), in the opinion of the accrediting body.

(d) If a test result falls outside the specifications authorized by law or regulation, the licensed testing laboratory shall follow a standard operating procedure to confirm or refute the original result.

  • If they fail a product, they must double check their result before shitting on you…

(e) A licensed testing laboratory shall destroy the remains of the sample of medical cannabis or medical cannabis product upon completion of the analysis.

  • No smoking the weed samples you are testing…

19343. A licensed testing laboratory shall not handle, test, or analyze medical cannabis or medical cannabis products unless the licensed testing laboratory meets all of the following:

  • You can’t touch or test the weed unless you do the following:

(a) Is registered by the State Department of Public Health.

  • Register fool!

(b) Is independent from all other persons and entities involved in the medical cannabis industry.

  • No conflicts of interest…

(c) Follows the methodologies, ranges, and parameters that are contained in the scope of the accreditation for testing medical cannabis or medical cannabis products. The testing lab shall also comply with any other requirements specified by the State Department of Public Health.

  • Use the agreed upon standards, and follow any other rules the DPH comes up with…

(d) Notifies the State Department of Public Health within one business day after the receipt of notice of any kind that its accreditation has been denied, suspended, or revoked.

  • Tells on themselves if they get denied certification…

(e) Has established standard operating procedures that provide for adequate chain of custody controls for samples transferred to the licensed testing laboratory for testing.

  • Have adequate chain of custody protocols and records..

19344. (a) A licensed testing laboratory shall issue a certificate of analysis for each lot, with supporting data, to report both of the following:

  • Each identified lot will get test results…

(1) Whether the chemical profile of the lot conforms to the specifications of the lot for compounds, including, but not limited to, all of the following:

  • If the weed has the appropriate amounts of the following:

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(C) Cannabidiol (CBD).

(D) Cannabidiolic Acid (CBDA).

(E) The terpenes described in the most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia.

  • TERPS!!!!!

(F) Cannabigerol (CBG).

(G) Cannabinol (CBN).

(H) Any other compounds required by the State Department of Public Health.

  • And anything else we say…

(2) That the presence of contaminants does not exceed the levels that are the lesser of either the most current version of the American Herbal Pharmacopoeia monograph or the State Department of Public Health. For purposes of this paragraph, contaminants includes, but is not limited to, all of the following:

  • That the weed or weed accessory is not contaminated as follows:

(A) Residual solvent or processing chemicals.

  • Tane soup….

(B) Foreign material, including, but not limited to, hair, insects, or similar or related adulterant.

  • Dirty and gross stuff….

(C) Microbiological impurity, including total aerobic microbial count, total yeast mold count, P. aeruginosa, aspergillus spp., s. aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A.

  • Moldy bullshit…

(D) Whether the batch is within specification for odor and appearance.

  • Looks and smells alright…

(b) Residual levels of volatile organic compounds shall be below the lesser of either the specifications set by the United States Pharmacopeia (U.S.P. Chapter 467) or those set by the State Department of Public Health.

  • Pesticides and other growth additives and enhancers…

19345. (a) Except as provided in this chapter, a licensed testing laboratory shall not acquire or receive medical cannabis or medical cannabis products except from a licensed facility in accordance with this chapter, and shall not distribute, sell, deliver, transfer, transport, or dispense medical cannabis or medical cannabis products, from which the medical cannabis or medical cannabis products were acquired or received. All transfer or transportation shall be performed pursuant to a specified chain of custody protocol.

  • Labs can only test weed from licensed businesses…
  • Labs cannot do anything with the weed and weed accessories after they receive it.
  • Transport and transfer must be done lawfully…

(b) A licensed testing laboratory may receive and test samples of medical cannabis or medical cannabis products from a qualified patient or primary caregiver only if he or she presents his or her valid recommendation for cannabis for medical purposes from a physician. A licensed testing laboratory shall not certify samples from a qualified patient or caregiver for resale or transfer to another party or licensee. All tests performed by a licensed testing laboratory for a qualified patient or caregiver shall be recorded with the name of the qualified patient or caregiver and the amount of medical cannabis or medical cannabis product received.

  • Patients and caregivers can get stuff tested too…

(c) The State Department of Public Health shall develop procedures to ensure that testing of cannabis occurs prior to delivery to dispensaries or any other business, specify how often licensees shall test cannabis and that the cost of testing shall be borne by the licensed cultivators, and require destruction of harvested batches whose testing samples indicate noncompliance with health and safety standards promulgated by the State Department of Public Health, unless remedial measures can bring the cannabis into compliance with quality assurance standards as promulgated by the State Department of Public Health.

  • DPH will decide when weed is tested before going to dispensaries, how often it is tested, and that the costs shall be on the grower.
  • You will have to destroy your crop and/or products if they don’t pass testing unless you can figure out how to bring them into compliance.

(d) The State Department of Public Health shall establish a licensing fee, and laboratories shall pay a fee to be licensed. Licensing fees shall not exceed the reasonable regulatory cost of the licensing activities.

  • Labs will also pay fees…

19347. (a) Prior to delivery or sale at a dispensary, medical cannabis products shall be labeled and in a tamper-evident package. Labels and packages of medical cannabis products shall meet the following requirements:

  • Weed will be labeled in tamper evident packaging with the following info:

(1) Medical cannabis packages and labels shall not be made to be attractive to children.

  • No sexy packaging…

(2) All medical cannabis product labels shall include the following information, prominently displayed and in a clear and legible font:

  • You must write the following on EVERY package and product:

(A) Manufacture date and source.

(B) The statement “SCHEDULE I CONTROLLED SUBSTANCE.”

(C) The statement “KEEP OUT OF REACH OF CHILDREN AND ANIMALS” in bold print.

(D) The statement “FOR MEDICAL USE ONLY.”

(E) The statement “THE INTOXICATING EFFECTS OF THIS PRODUCT MAY BE DELAYED BY UP TO TWO HOURS.”

(F) The statement “THIS PRODUCT MAY IMPAIR THE ABILITY TO DRIVE OR OPERATE MACHINERY. PLEASE USE EXTREME CAUTION.”

(G) For packages containing only dried flower, the net weight of medical cannabis in the package.

(H) A warning if nuts or other known allergens are used.

  • Deez Nuts may have been used…

(I) List of pharmacologically active ingredients, including, but not limited to, tetrahydrocannabinol (THC), cannabidiol (CBD), and other cannabinoid content, the THC and other cannabinoid amount in milligrams per serving, servings per package, and the THC and other cannabinoid amount in milligrams for the package total.

  • So you have to give the product to a distributor and they have it tested. And then after that you have to put the results of those tests on the package? I don’t get it. Does the DISTRIBUTOR do this labeling for every product?

(J) Clear indication, in bold type, that the product contains medical cannabis.

(K) Identification of the source and date of cultivation and manufacture.

  • How is this different from (A)?

(L) Any other requirement set by the bureau.

  • … and anything else we want.

(M) Information associated with the unique identifier issued by the Department of Food and Agriculture pursuant to Section 11362.777 of the Health and Safety Code.

  • Number of the Beast….

(b) Only generic food names may be used to describe edible medical cannabis products.

  • No more sexy names for your shit, okay? So knock it off with the bullshit.

Article  14. Reporting

19353. Beginning on March 1, 2023, and on or before March 1 of each following year, each licensing authority shall prepare and submit to the Legislature an annual report on the authority’s activities and post the report on the authority’s Internet Web site. The report shall include, but not be limited to, the following information for the previous fiscal year:

  • Sure… give the agencies damn near a decade to comply with reporting.

(a) The amount of funds allocated and spent by the licensing authority for medical cannabis licensing, enforcement, and administration.

(b) The number of state licenses issued, renewed, denied, suspended, and revoked, by state license category.

(c) The average time for processing state license applications, by state license category.

(d) The number and type of enforcement activities conducted by the licensing authorities and by local law enforcement agencies in conjunction with the licensing authorities or the bureau.

(e) The number, type, and amount of penalties, fines, and other disciplinary actions taken by the licensing authorities.

19354. The bureau shall contract with the California Marijuana Research Program, known as the Center for Medicinal Cannabis Research, authorized pursuant to Section 11362.9 of the Health and Safety Code, to develop a study that identifies the impact that cannabis has on motor skills.

Article  15. Privacy

19355. (a) Information identifying the names of patients, their medical conditions, or the names of their primary caregivers received and contained in records kept by the office or licensing authorities for the purposes of administering this chapter are confidential and shall not be disclosed pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), except as necessary for authorized employees of the State of California or any city, county, or city and county to perform official duties pursuant to this chapter, or a local ordinance.

  • These weedhead patients deserve privacy as required by law…

(b) Information identifying the names of patients, their medical conditions, or the names of their primary caregivers received and contained in records kept by the bureau for the purposes of administering this chapter shall be maintained in accordance with Chapter 1 (commencing with Section 123100) of Part 1 of Division 106 of the Health and Safety Code, Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code, and other state and federal laws relating to confidential patient information.

(c) Nothing in this section precludes the following:

  • Privacy matters unless:

(1) Employees of the bureau or any licensing authorities notifying state or local agencies about information submitted to the agency that the employee suspects is falsified or fraudulent.

(2) Notifications from the bureau or any licensing authorities to state or local agencies about apparent violations of this chapter or applicable local ordinance.

(3) Verification of requests by state or local agencies to confirm licenses and certificates issued by the regulatory authorities or other state agency.

(4) Provision of information requested pursuant to a court order or subpoena issued by a court or an administrative agency or local governing body authorized by law to issue subpoenas.

(d) Information shall not be disclosed by any state or local agency beyond what is necessary to achieve the goals of a specific investigation, notification, or the parameters of a specific court order or subpoena.

  • You can only disclose the amount of info as minimum required…

SEC. 5. Section 9147.7 of the Government Code is amended to read:

  • This part just amends existing laws governing how agencies are overseen, and it is amended to specifically exclude the Bureau of Medical Marijuana Regulation from the hassles of sunshine laws and normal bureaucracy.

9147.7. (a) For the purpose of this section, “eligible agency” means any agency, authority, board, bureau, commission, conservancy, council, department, division, or office of state government, however denominated, excluding an agency that is constitutionally created or an agency related to postsecondary education, for which a date for repeal has been established by statute on or after January 1, 2011.

(b) The Joint Sunset Review Committee is hereby created to identify and eliminate waste, duplication, and inefficiency in government agencies. The purpose of the committee is to conduct a comprehensive analysis over 15 years, and on a periodic basis thereafter, of every eligible agency to determine if the agency is still necessary and cost effective.

(c) Each eligible agency scheduled for repeal shall submit to the committee, on or before December 1 prior to the year it is set to be repealed, a complete agency report covering the entire period since last reviewed, including, but not limited to, the following:

(1) The purpose and necessity of the agency.

(2) A description of the agency budget, priorities, and job descriptions of employees of the agency.

(3) Any programs and projects under the direction of the agency.

(4) Measures of the success or failures of the agency and justifications for the metrics used to evaluate successes and failures.

(5) Any recommendations of the agency for changes or reorganization in order to better fulfill its purpose.

(d) The committee shall take public testimony and evaluate the eligible agency prior to the date the agency is scheduled to be repealed. An eligible agency shall be eliminated unless the Legislature enacts a law to extend, consolidate, or reorganize the eligible agency. No eligible agency shall be extended in perpetuity unless specifically exempted from the provisions of this section. The committee may recommend that the Legislature extend the statutory sunset date for no more than one year to allow the committee more time to evaluate the eligible agency.

(e) The committee shall be comprised of 10 members of the Legislature. The Senate Committee on Rules shall appoint five members of the Senate to the committee, not more than three of whom shall be members of the same political party. The Speaker of the Assembly shall appoint five members of the Assembly to the committee, not more than three of whom shall be members of the same political party. Members shall be appointed within 15 days after the commencement of the regular session. Each member of the committee who is appointed by the Senate Committee on Rules or the Speaker of the Assembly shall serve during that committee member’s term of office or until that committee member no longer is a Member of the Senate or the Assembly, whichever is applicable. A vacancy on the committee shall be filled in the same manner as the original appointment. Three Assembly Members and three Senators who are members of the committee shall constitute a quorum for the conduct of committee business. Members of the committee shall receive no compensation for their work with the committee.

(f) The committee shall meet not later than 30 days after the first day of the regular session to choose a chairperson and to establish the schedule for eligible agency review provided for in the statutes governing the eligible agencies. The chairperson of the committee shall alternate every two years between a Member of the Senate and a Member of the Assembly, and the vice chairperson of the committee shall be a member of the opposite house as the chairperson.

(g) This section shall not be construed to change the existing jurisdiction of the budget or policy committees of the Legislature.

(h) This section shall not apply to the Bureau of Medical Marijuana Regulation.

  • See… The weed bureau is not required to comply with this shit.

SEC. 6. Section 11362.775 of the Health and Safety Code is amended to read:

11362.775. (a)  Subject to subdivision (b), qualified  patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards, who associate within the State of California in order collectively or cooperatively to cultivate cannabis  for medical purposes, shall not solely on the basis of that fact be subject to state criminal sanctions under Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570.

(b) This section shall remain in effect only until one year after the Bureau of Medical Marijuana Regulation posts a notice on its Internet Web site that the licensing authorities have commenced issuing licenses pursuant to the Medical Marijuana Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code), and is repealed upon issuance of licenses.

  • Did you see it? They just gave you ONE YEAR after the Bureau of Medical Marijuana Regulation posts on its website to shut down your collective or cooperative. This is where they kill the collective/cooperative model.

SEC. 7. Section 147.5 is added to the Labor Code, to read:

147.5. (a) By January 1, 2017, the Division of Occupational Safety and Health shall convene an advisory committee to evaluate whether there is a need to develop industry-specific regulations related to the activities of facilities issued a license pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code.

  • OSHA will decide if there need to be industry specific regulations for weed businesses..

(b) By July 1, 2017, the advisory committee shall present to the board its findings and recommendations for consideration by the board. By July 1, 2017, the board shall render a decision regarding the adoption of industry-specific regulations pursuant to this section.

  • Then they will make their decision 6 months later…

SEC. 8. Section 31020 is added to the Revenue and Taxation Code, to read:

31020. The board, in consultation with the Department of Food and Agriculture, shall adopt a system for reporting the movement of commercial cannabis and cannabis products throughout the distribution chain. The system shall not be duplicative of the electronic database administered by the Department of Food and Agriculture specified in Section 19335 of the Business and Professions Code. The system shall also employ secure packaging and be capable of providing information to the board. This system shall capture, at a minimum, all of the following:

  • The Department of Food and Agriculture will design a system for tracking all weed and weed products that have at a minimum the following info:

(a) The amount of tax due by the designated entity.

  • Of course amount of TAXES due are first on the list. Show me the money!

(b) The name, address, and license number of the designated entity that remitted the tax.

  • Who owes us this money?

(c) The name, address, and license number of the succeeding entity receiving the product.

  • Where did the weed that they owe us money for go?

(d) The transaction date.

  • When was the weed sold?

(e) Any other information deemed necessary by the board for the taxation and regulation of marijuana and marijuana products.

  • Any other info about where our money is…

SEC. 9. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

  • If any part of this is illegal the rest of it still stands…

SEC. 10. The Legislature finds and declares that Section 4 of this act, which adds Section 19355 to the Business and Professions Code, thereby imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

  • Normal disclosure laws do not apply to the weed game…

The limitation imposed under this act is necessary for purposes of compliance with the federal Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. Sec. 1320d et seq.), the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code), and the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Part 2 of Division 1 of the Insurance Code).

SEC. 11. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

  • If our law costs locals money we will pay it…

SEC. 12. This act shall become operative only if Senate Bill 643 and Assembly Bill 243 of the 2015–16 Regular Session are also enacted and become operative.

  • Unless all of the laws pass this law is irrelevant… and they will all pass.

Corporate Cannabis in a Conscious Culture

Weed will be legal for adults to use as they please soon enough. (#weedlegalbysummer)

One of the big fears I hear in the community is the “takeover of the cannabis market by big corporations.” There is usually a Monsanto reference or two in there, and usually the folks that are worried ponder if decriminalization is not a better option. So let me be clear on that point. It is not.

Decriminalizing cannabis does nothing to return cannabis to its rightful place as a safe, enjoyable, and helpful plant in our society. Settling for a decriminalized model still means weedheads are lesser people in the community. It still means cops can harass you because they smell weed. It means fines and civil penalties (including asset forfeiture) for those who choose to participate in the trade. It means people still being drug tested and losing their jobs, or kids, or standing in the community. All of that is unacceptable; and for what? To keep some nostalgic and romantic version of the outlaw environment and culture, a little higher prices, and to not turn over control of the industry to some large corporation?

For the record, there are some fairly large corporations that sell weed in the industry already. I mean, Harborside’s well-publicized $20 million plus a year in revenues and one hundred employees are hardly a mom and pop operation. Nor should they be. The reality is that in order to provide a large amount of goods to a growing population of people, it is going to take some big business know-how and fortitude to create and operate an infrastructure capable of providing good-old American grown weed products all over the globe. I do not think that the average weed grower and person who works in the industry understands the VAST untapped weed market that is currently being served by Mexican brick weed and the hay that gets shipped out of state.

Here is one thing that a legalized weed market will change….YOU WILL NOT BE ABLE TO SELL BAD WEED FOR TOO MUCH MONEY ANYMORE. Sorry….you will have to step your game up to compete in the marketplace; but we already see these free market principles happening in states with robust cannabis markets (which is why the hay gets shipped out of state). Weed is like $20-$25 and eighth in Denver due to the saturated marketplace there. Yet because a lot of the product is vertical, meaning the manufacturer is also the retailer, the margins still exist to allow most dispensaries there to make a living. But stores have closed there who could not compete, and products that are no good do not get bought. Pretty simple…grow better weed, or find a new gig.

The reality is that there will be large companies and corporations that enter the cannabis market. I do not see it being the end of the world. During the Prop. 19 debate I was chatting with Spearhead’s Michael Franti online about this issue, and he had some great insight. He stated that while there likely would be a corporatized cannabis market, that just like the foods he buys, there will also be organic small farmers, and small batch producers from which people can purchase their cannabis. He called it a personal choice issue, and one that we all face in almost every purchase of any commodity on the planet. There are cheaper, lower quality, mass produced options for nearly everything; and there are also higher quality, crafted, and independent choices available. There are evil corporations, and there are conscious corporations that are good stewards of their community. While corporate America leaves a lot to be desired on many fronts, there is a place for corporations in our society.

I mean, I cannot make my own car. As much as I would like to think I can, it is just not feasible. Is it impossible? No. Is it likely that a car I tried to make myself would be terrible because I do not have the proper equipment, labor force, resources, or intellectual knowledge to do it correctly? Yup. My car would suck big time. So it is easy to see how in order to feed the demand for consumer products and commodities, it often takes a large corporation to provide the needed infrastructure and mechanism to get the products to market to meet the demand.

Weed is not different. Let’s look at some numbers. It is estimated that about 9-10% of the population smokes weed regularly. That number is probably higher, since it is hard to get people to admit to criminal activity in polling, as well as the folks who may occasionally take a drag off their friend’s joint every once in a while, as well as the folks who may not consider themselves a “regular” user. Now the current market in states with medical cannabis access show that about 1-2% of the population qualify for medical cannabis in states where registration is mandatory. So what we can gather is that even in states with a great deal of medical cannabis access, there is still a HUGE untapped weed market. Only about one in five weedheads participate directly in the medical cannabis programs available. Obviously in states where there is no medical cannabis, or where the laws do not allow for dispensaries or access points, there is a much larger secondary black market that is fueling consumption. The point is that there are still A LOT of people in America getting their weed from less than stellar resources, and there is a lot of market potential for people who produce and sell weed. Add to that a percentage of the population will likely open up to using cannabis without the stigma or legal risks there are now, and you could see the market increase substantially.

There is no shortage of potential. Then add to that the possibility of a global supply chain, where places like Northern California lead the charge in product reputation, and you could see an incredible market growth potential. Do you have any idea how popular Budweiser is in Ireland? I didn’t either. But it just shows that when you open up a legalized global cannabis market, there will always be room for growth and prosperity for people who grow good weed, likely in places none of us ever imagined selling weed.

I like to compare the potential weed market to that of the wine industry, as it is easy to see how things correlate pretty easy. Now there are certainly big corporate wine making behemoths in the industry, and they provide products generally aimed at a lower price point, which lack in quality and taste. But the market is huge. There is a lot of money in the ghetto.

Two-Buck Chuck is a staple in many middle-class and low income houses, as it is a decent bottle of wine for an incredible value. It is likely not handcrafted in seasoned Oak barrels, or aged for years; but it is a great product for a person on a budget. But when that same person wants to celebrate a little, they might splurge for the $20 bottle of Stag’s Leap, or they may even go out to a big dinner and drop $300 on a bottle of Opus One. Now neither of these are a bad option. They are just choices that people make based on what they can afford, and what their preference priorities are. There is no wrong or right choice. I am sure the folks who have a job at the Two-Buck Chuck factory are just as happy as the people pulling the grapes for Stag’s Leap. And the reality is that our society NEEDS Two-Buck Chuck, or a lot of folks would not be able to have a casual bottle of wine, now and again.

So when I hear pot growers bellyache about their fears of being squeezed out of the market, I just do not get it. If you grow decent pot, and are not an asshole, you should be able to make a living in a legalized weed market. There will be more income to go around for everyone, and while prices will be lower for sure, it will be easier to grow and sell more to meet the difference. A lot of the major wine makers do not grow all of their own grapes. Often large corporate wine makers, like Mondavi, buy their grapes from a number of small batch grape farmers to make into products. This affords the farmer the ability to focus on his crop, rather than on trying to sell the crop in the marketplace. It is a symbiotic relationship that serves both purposes of filling the resources of the major corporation, while providing income to small batch independent farmers who are good at what they do. See how that could work?

But the one thing about cannabis is the established culture that has evolved as a result of prohibition. It is understandable that folks who have risked their lives and freedom to grow and sell weed would feel threatened by the possibility of “outsiders coming in an taking over.” Although, most of us were outsiders in this industry at one time or another. But in all reality, a lot of the culture will remain, and the folks who developed and created the beauty of that culture will likely be at the forefront of the evolution into a legalized and ordinary cannabis market. There will be winners and losers, and some folks will not make the cut; but overall, I firmly believe that those who have paid their dues will be rewarded in a legalized adult use cannabis market, and will be able to expand their horizons beyond their wildest dreams. It is easy to imagine a possible disaster, but can you imagine awesome success? If not, you should try to.

There is no reason that a corporate cannabis environment cannot possess and represent the morals, values, and conscious behavior that many see as synonymous with the cannabis movement. There are actually a lot of good corporations in the world that have found a way to balance the demands of the corporate shareholder needs and the moral and ethical values that we expect of our fellow humans, and their businesses. This is our market to win or lose, and believe that we have the ability to shape how our society views cannabis as it re-enters the mainstream and legal market. It is up to us to demand that cannabis corporations provide a higher standard of quality, and that they are conscious capitalists operating sustainably, and ethically. We can decide who succeeds and who fails by who we support, promote, and believe in. We can demand the balance that we want, and we can be the change we want to see in the world.

So put aside the boogie-man big bad wolf corporate Monsanto cannabis myth for a minute, and try to envision a legal cannabis market where we all do great, have awesome jobs, and nobody has to go to prison.

If you can figure out what that looks like, we can figure out how to get there. But weed will be legal soon, so it would be smart to get a head of the curve, and not resist adult use legalization; but embrace it and figure out where your place is in that market….because it IS coming.

Good People Do Good Business

One of the first things I look for in a client is who they are as a person. People with pure hearts and altruistic goals are generally better business people because they are better at understanding their environments. In business, it is easy to get caught up on the bottom line and make decisions based solely on that principle. What people do not understand often is that short-term gains can often lead to long-term real costs that are much more difficult to walk back.

For instance, pay rates of employees. It is easy to see how short-changing the staff can save money now. But at what cost? Employees who feel they are being compensated less than others doing the same job, or less than a fair living wage will ALWAYS underperform. Often companies do not see the daily struggles of the people who work for them, and do not see that the lousy $50 they saved the company by lessening a person’s raise, or limiting their hours, actually would have went a long way to helping a family have a nice night out, or fulfill a need. That results in more happy and healthy staff, that in-turn, are more excited to do a better job, which often results in more success for the entire organization.

While finances and money are an important part of any business, be sure that they are not the only principles driving executive decision making. It is our duty to be good people and to lift up our fellow man. Business owners have a great opportunity to do that, and empower their staff to do great things. This is a serious responsibility that business owners must calculate on top of the hard costs of doing business.

Good people will always be successful and do good business.