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AB-858 Cannabis: cultivation.(2019-2020)

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Date Published: 02/20/2019 09:00 PM
AB858:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 858


Introduced by Assembly Member Levine

February 20, 2019


An act to amend Sections 26061 and 26063 of the Business and Professions Code, and to add Chapter 3.5 (commencing with Section 66000) to Part 2 of Division 22 of the Food and Agricultural Code, relating to cannabis, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 858, as introduced, Levine. Cannabis: cultivation.
(1) Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), approved by the voters at the November 8, 2016, statewide general election, regulates the cultivation, distribution, transport, storage, manufacturing, testing, processing, sale, and use of marijuana for nonmedical purposes by people 21 years of age and older. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities.
Under existing law, the Department of Food and Agriculture may issue cannabis cultivation licenses to commercial cannabis businesses that differ depending on the size of the cultivation site and whether the site is indoor, outdoor, or mixed, including a Type 1C, or “specialty cottage,” license, which authorizes a licensee to engage in cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold, to be determined by the licensing authority, of 2,500 square feet or less of total canopy size for mixed-light cultivation, up to 25 mature plants for outdoor cultivation, or 500 square feet or less of total canopy size for indoor cultivation, on one premises.
This bill would instead, for outdoor cultivation authorized by a Type 1C license, require the licensing authority to determine a maximum threshold of 2,500 square feet or less of total canopy size, with the option to meet an alternative maximum threshold to be determined by the licensing authority of up to 25 mature plants.
(2) MAUCRSA requires the department, no later than January 1, 2018, to establish standards by which a licensed cultivator may designate a county of origin for cannabis. MAUCRSA requires the department, no later than January 1, 2021, to establish a process by which cultivators may establish appellations for standards, practices, and varietals applicable to cannabis grown in certain geographical areas of California, instead of by county.
This bill would instead refer to those appellations as appellation of origin standards, practices, and varietals.
(3) Under existing law, the Legislature finds and declares that the agricultural and seafood industries are vitally important elements of the state’s economy. Existing law provides for various commissions and councils to promote the marketing and production of agricultural or seafood commodities.
This bill would create the Emerald Triangle Sun-Grown Cannabis Commission in the state government with a prescribed membership of eligible cultivators, as defined, in the Counties of Humboldt, Mendocino, and Trinity, known as the “Emerald Triangle,” and would specify the powers, duties, and responsibilities of the commission’s board of directors. The bill would authorize the commission to, among other things, conduct research for specified purposes, assess and address the impact of local and state regulations on the cannabis products industries, and collect and disseminate market price information to prevent unfair trade practices that are detrimental to the sun-grown cannabis and cannabis products industries in the Emerald Triangle. The bill would authorize the commission to levy assessments on all eligible cultivators in the Emerald Triangle, in amounts within unspecified ranges based on the weight or value of sun-grown cannabis marketed, and would continuously appropriate these funds to the commission for the purposes of implementing these provisions.
The bill would provide that these provisions, except as necessary to conduct an election, would not become operative until the eligible cultivators vote in favor of these provisions, as prescribed. The bill would also provide for the suspension of the operation of these provisions and for concluding the operations of the commission under certain circumstances. The bill would authorize the commission to levy a civil penalty, as specified, on a person for rendering or furnishing false reports, secreting, destroying, or altering records, failing to furnish a report, or failing or refusing to furnish to the commission information concerning the names and addresses of persons to whom sun-grown cannabis was delivered or from whom sun-grown cannabis was received. The bill would authorize the commission to bring certain civil actions to enforce these provisions.
(4) AUMA authorizes the Legislature to amend by majority vote certain provisions of the act to implement specified substantive provisions, provided that the amendments are consistent with and further the purposes and intent of AUMA.
This bill would state that the Legislature finds and declares that this bill implements substantive provisions of AUMA and is consistent with, and furthers the purposes and intent of, AUMA.
(5)  Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 26061 of the Business and Professions Code is amended to read:

26061.
 (a) The state cultivator license types to be issued by the Department of Food and Agriculture under this division shall include all of the following:
(1) Type 1, or “specialty outdoor,” for outdoor cultivation using no artificial lighting of less than or equal to 5,000 square feet of total canopy size on one premises, or up to 50 mature plants on noncontiguous plots.
(2) Type 1A, or “specialty indoor,” for indoor cultivation using exclusively artificial lighting of between 501 and 5,000 square feet of total canopy size on one premises.
(3) Type 1B, or “specialty mixed-light,” for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, of between 2,501 and 5,000 square feet of total canopy size on one premises.
(4) Type 1C, or “specialty cottage,” for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, of 2,500 square feet or less of total canopy size for mixed-light cultivation, 2,500 square feet or less of total canopy size for outdoor cultivation, with the option to meet an alternative maximum threshold to be determined by the licensing authority of up to 25 mature plants for outdoor cultivation, or 500 square feet or less of total canopy size for indoor cultivation, on one premises.
(5) Type 2, or “small outdoor,” for outdoor cultivation using no artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises.
(6) Type 2A, or “small indoor,” for indoor cultivation using exclusively artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises.
(7) Type 2B, or “small mixed-light,” for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises.
(8) Type 3, or “outdoor,” for outdoor cultivation using no artificial lighting from 10,001 square feet to one acre, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type.
(9) Type 3A, or “indoor,” for indoor cultivation using exclusively artificial lighting between 10,001 and 22,000 square feet, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type.
(10) Type 3B, or “mixed-light,” for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, between 10,001 and 22,000 square feet, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type.
(11) Type 4, or “nursery” for cultivation of cannabis solely as a nursery.
(b) Except as otherwise provided by law:
(1) Type 5, or “outdoor,” means for outdoor cultivation using no artificial lighting greater than one acre, inclusive, of total canopy size on one premises.
(2) Type 5A, or “indoor,” means for indoor cultivation using exclusively artificial lighting greater than 22,000 square feet, inclusive, of total canopy size on one premises.
(3) Type 5B, or “mixed-light,” means for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, greater than 22,000 square feet, inclusive, of total canopy size on one premises.
(c) No Type 5, Type 5A, or Type 5B cultivation licenses may be issued before January 1, 2023.
(d) Commencing on January 1, 2023, a Type 5, Type 5A, or Type 5B licensee may apply for and hold a Type 6 or Type 7 license and apply for and hold a Type 10 license. A Type 5, Type 5A, or Type 5B licensee shall not be eligible to apply for or hold a Type 8, Type 11, or Type 12 license.

SEC. 2.

 Section 26063 of the Business and Professions Code is amended to read:

26063.
 (a) No later than January 1, 2018, the Department of Food and Agriculture shall establish standards by which a licensed cultivator may designate a county of origin for cannabis. To be eligible for the designation, 100 percent of the cannabis shall be produced within the designated county, as defined by finite political boundaries.
(1) Cannabis shall not be advertised, marketed, labeled, or sold as grown in a California county when the cannabis was not grown in that county.
(2) The name of a California county, including any similar name that is likely to mislead consumers as to the origin of the product, shall not be used in the advertising, labeling, marketing, or packaging of cannabis products unless the cannabis contained in the product was grown in that county.
(b) No later than January 1, 2021, the Department of Food and Agriculture shall establish a process by which licensed cultivators may establish appellations appellation of origin standards, practices, and varietals applicable to cannabis grown in a certain geographical area in California, not otherwise specified in subdivision (a).

SEC. 3.

 Chapter 3.5 (commencing with Section 66000) is added to Part 2 of Division 22 of the Food and Agricultural Code, to read:
CHAPTER  3.5. Emerald Triangle Sun-Grown Cannabis Commission
Article  1. Declarations and General Provisions

66000.
 The Legislature finds and declares all of the following:
(a) The production of sun-grown cannabis in the tri-county area that includes the Counties of Humboldt, Mendocino, and Trinity, known as the “Emerald Triangle,” and distribution of sun-grown cannabis from the Emerald Triangle, including as an ingredient in cannabis products, constitute important industries that provide substantial and necessary revenues for the state. The cannabis industry in this state is expanding. The industry constitutes an important source of jobs for many people in the state, especially people in the Emerald Triangle, a high proportion of whom are from disadvantaged communities.
(b) The maintenance and expansion of the sun-grown cannabis industry in the Emerald Triangle, and local and statewide markets for sun-grown cannabis produced in the Emerald Triangle, is necessary to ensure the consuming public of a continuous supply of these products and needed levels of income for those engaged in the sun-grown cannabis industry in the Emerald Triangle.
(c) Opportunity exists for continued growth and expansion of the sun-grown cannabis industry in the Emerald Triangle by creating new markets. The success of an expansion program is uniquely dependent on effective education and research, since the creation of new markets is a matter of educating and informing people of the use and availability of the commodity. The expansion of the sun-grown cannabis industry in the Emerald Triangle also provides an important source of jobs for many people in the region, and serves to ensure the preservation of an agrarian society.
(d) The production of sun-grown cannabis in the Emerald Triangle has the potential to be one of the leading segments of the state’s cannabis industry. To realize this potential, there is a need to make consumers aware of the high quality of sun-grown cannabis from the Emerald Triangle. The activities made possible by the establishment of the Emerald Triangle Sun-Grown Cannabis Commission will meet this need and further the interests of the industry and the state.
(e) The sun-grown cannabis industry has enjoyed success due to commitment by the industry to fund research that has led to improvements in quality and variety of cannabis available to consumers. The establishment of the Emerald Triangle Sun-Grown Cannabis Commission will continue to enhance this research effort and move the sun-grown cannabis industry in the Emerald Triangle towards its potential, resulting in increased consumer value, greater environmental protections, and enhanced returns to cultivators.

66001.
 The production and marketing of sun-grown cannabis from the Emerald Triangle is hereby declared to be affected with public interest. Therefore, it is necessary and appropriate that these provisions be specifically applicable to the Counties of Humboldt, Mendocino, and Trinity. This chapter is enacted in the exercise of the police power of this state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state.

66002.
 The commission form of administration created by this chapter is uniquely situated to provide those engaged in the production of sun-grown cannabis from the Emerald Triangle the opportunity to avail themselves of the benefits of collective action in the broad fields of production, marketing research, quality and maturity standards, the collection and dissemination of crop volume and related statistics, and public education.

66003.
 (a) It shall be the policy of this state to preserve and encourage agricultural activities in the state, promote the consumption of agricultural commodities produced and harvested in California, provide for research, governance, and accountability, including the ability for agriculture to act collectively and to assess itself through the process of referendum.
(b) It shall be the policy of this state that the program authorized in this chapter shall engage in activities that are not more extensive in scope than is necessary to accomplish its purposes, and that the powers and duties of this program are designed to directly and materially advance the state’s interest in a stable, thriving agricultural industry. Further, this policy can be implemented most effectively by the collective actions authorized in this chapter while not preventing individuals from additionally engaging in self-help activities.

66004.
 No action taken by the commission, or by any person in accordance with this chapter or with rules or regulations adopted under this chapter, is a violation of the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), the Unfair Practices Act (Chapter 4 (commencing with Section 17000) of that Part 2), or any statutory or common law against monopolies or combinations in restraint of trade. Proof that any action complained of was done in compliance with this chapter shall be a complete defense to the action or proceeding.

66005.
 This chapter shall be liberally construed. If any provision of this chapter or the application thereof to any person or circumstances is held to be invalid, the invalidity shall not affect other provisions or applications of the chapter that can be given effect without the invalid provision or application, and to this end, the provisions of the chapter are severable.

66006.
 It is hereby declared as a matter of legislative determination that members of the commission are intended to represent and further the interests of the particular agricultural industry concerned and that this representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are elected or appointed to the commission, the particular agricultural industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.

Article  2. Definitions

66010.
 Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.

66011.
 “Books and records” mean books, records, contracts, documents, memoranda, papers, correspondence, or other written data pertaining to matters relating to the activities subject to the provisions of this chapter.

66012.
 “Bureau” means the Bureau of Cannabis Control.

66013.
 “Cannabis” has the same meaning as in subdivision (f) of Section 26001 of the Business and Professions Code.

66014.
 “Cannabis products” has the same meaning as in Section 11018.1 of the Health and Safety Code.

66015.
 “Commission” means the Emerald Triangle Sun-Grown Cannabis Commission.

66016.
 “Eligible cultivator” means any person who is engaged in the business of producing or causing to be produced for market sun-grown cannabis in the Emerald Triangle.

66017.
 “Emerald Triangle” means the Counties of Humboldt, Mendocino, and Trinity.

66018.
 “Ex officio member” means a nonvoting member of the commission board of directors.

66019.
 “Market” means to sell, barter, trade, purchase, acquire, or otherwise distribute cannabis or cannabis products.

66020.
 “Market development” includes, but is not limited to, trade, promotion, public education, dissemination of information on industry issues, and other matters, and activities for the prevention, modification, and removal of barriers that restrict the free flow of cannabis and cannabis products to market, and may include, but is not limited to, presentation of facts to local and state governmental agencies on matters that affect this chapter.

66021.
 “Market research” means any investigation, development, analysis, or implementation of information relating to the marketing of cannabis or cannabis products including, but not limited to, consumer trends, promotion, sales, and advertising.

66022.
 “Marketing season” or “fiscal year” means the period beginning March 1 of any year and extending through the last day of February of the following year.

66023.
 “Person” means an individual, partnership, corporation, limited liability company, or other business entity.

66024.
 “Production research” means research relating to the production and processing of cannabis, including, but not limited to, the development of new cannabis products and uses for these products.

66025.
 “Sun-grown cannabis” means cannabis cultivated outdoors under a California-issued “outdoor” or “Mixed-Light Tier 1” cannabis cultivation license that remains in good standing.

66026.
 “Sun-grown cannabis product” means a cannabis product that contains sun-grown cannabis as an ingredient.

66027.
 “Sun-grown cannabis from the Emerald Triangle” means sun-grown cannabis cultivated in the Emerald Triangle.

Article  3. The Emerald Triangle Sun-Grown Cannabis Commission

66030.
 (a) There is in state government the Emerald Triangle Sun-Grown Cannabis Commission. The commission board of directors shall be comprised of six eligible cultivators who only hold an outdoor cannabis cultivation license, two eligible cultivators who hold a California-issued cannabis cultivation license, specified in Section 66025, and one public member.
(b) The public member and the public member’s alternate shall be appointed to the commission board of directors by the secretary from nominees recommended by the commission board of directors.

66031.
 (a) The secretary may require the commission to correct or cease any existing activity or function that is determined by the secretary not to be in the public interest or that is in violation of this chapter.
(b) If the commission refuses or fails to cease those activities or functions or to make the corrections as required by the secretary, the secretary may, upon written notice, suspend all or a portion of the activities or functions of the commission until the time that the cessation or correction of activities or functions as required by the secretary has been accomplished by the commission.
(c) Actions of the commission in violation of the written notice are without legal force or effect. The secretary, to the extent feasible, shall issue the written notice before the commission enters into any contractual relationship affecting the existing or proposed activities or functions that are the subject of the written notice.
(d) Upon service of the written notice, the secretary shall notify the commission in writing of the specific acts that the secretary determines are not in the public interest or are in violation of this chapter, the secretary’s reasons for requiring a cessation or correction of specific existing or proposed activities or functions, and recommendations that will make the activities or functions acceptable.

66032.
 The commission or the secretary may bring an action for judicial relief from the secretary’s written notice, or from noncompliance by the commission with the written notice, as the case may be, in a court of competent jurisdiction, that may issue a temporary restraining order, permanent injunction, or other applicable relief.

66033.
 When the secretary is required to concur in a decision of the commission, the secretary shall respond to the commission within 15 working days from notification of the decision. The secretary’s response may be a requirement that additional information be provided.

66034.
 The commission shall reimburse the secretary for all expenditures incurred in carrying out the secretary’s duties and responsibilities pursuant to this chapter. However, a court may, if it finds that the secretary acted arbitrarily or capriciously in restricting the activities or functions of the commission, relieve the commission of the responsibility for payment of the secretary’s legal costs with regard to that action.

66035.
 Each member of the commission, except the ex officio members, shall select and have an alternate. Selection of the alternate shall be subject to the approval of the commission. The alternate shall, in the member’s absence, serve in place of the member and shall have and be able to exercise all the rights, privileges, and powers of the member when serving on the commission. In the event of a change in status making the member ineligible to serve, or due to death, removal, resignation, or disqualification of the member, the alternate shall act as a member of the commission until a qualified successor is elected or appointed.

66036.
 Any individual serving as a cultivator member and the individual’s alternate shall be an eligible cultivator during the entire term of office. No more than one member, and the member’s alternate, shall be employed by, represent, or be connected in a proprietary capacity with the same cultivator. However, cultivator membership in an agricultural nonprofit cooperative association or trade organization shall not be considered employment or being connected in a proprietary capacity.

66037.
 The public member and the public member’s alternate shall have all the rights, privileges, and powers of any other member of the commission. The public member shall not have any financial interest in the cannabis industry.

66038.
 The term of office of members and their alternates shall be for two years or until their successors have been elected and have qualified. However, of the first members of the commission, a portion of the cultivator members and their alternates shall serve for one year so that the terms shall be staggered. The determination of the term of each member and the member’s alternate shall be made by lot. The commission may establish term limits for members and their alternates pursuant to procedures established by the commission and concurred in by the secretary.

66039.
 Not less than five voting members shall constitute a quorum of the commission.

66040.
 The vote of a majority of the members present at a meeting at which there is a quorum shall constitute an act of the commission.

66041.
 The commission shall be, and is hereby declared and created as, a corporate body. It shall have the power to sue and be sued, to contract and be contracted with, and to have and possess all the powers of a corporation. It may adopt a corporate seal. Copies of its proceedings, records, and acts, when authenticated, shall be admissible in evidence in all courts of the state and shall be prima facie evidence of the truth of all statements therein.

66042.
 The secretary or the secretary’s representatives shall be notified and may attend meetings of the commission and any committee meetings of the commission.

66043.
 No member or alternate of the commission, or member of a committee established by the commission who is not a member of the commission, shall receive a salary. Each member of the commission and any alternate member serving in place of a member pursuant to this chapter, except ex officio members, and each member of a committee established by the commission who is not a member of the commission, shall receive necessary traveling expenses and meal allowances, as approved by the commission, and may receive an amount not to exceed one hundred dollars ($100) per day, as established by the commission. This amount shall be paid for each day spent in actual attendance at, or in traveling to and from, meetings of the commission or committees of the commission, or on assignment for the commission, as approved by the commission.

66044.
 All funds received by the assessments levied pursuant to this chapter or otherwise received by the commission shall be deposited in banks that the commission may designate and shall be disbursed by order of the commission through an agent or agents as it may designate. The agent or agents shall be bonded by a fidelity bond, executed by a surety company authorized to transact business in this state, in favor of the commission, in an amount of not less than twenty-five thousand dollars ($25,000).

66045.
 (a) The state is not liable for the acts of the commission or its contracts. Payments of all claims arising by reason of the administration of this chapter or acts of the commission are limited to the funds collected by the commission.
(b) No member, alternate, employee, or agent of the commission is personally liable for the contracts of the commission or for errors in judgment, mistakes, or other acts, either of commission or omission, except for their own individual acts of dishonesty or crime. Liability is several and not joint, and no member, alternate, or any employee or agent of the commission is liable individually for the default, act, or omission of any other member, alternate, or any employee or agent of the commission.

Article  4. Powers and Duties

66050.
 The powers and duties of the commission shall include, but not be limited to, the following:
(a) Elect a chairperson and other officers as it may deem advisable, and delegate duties as may be advisable.
(b) Adopt and, from time to time, alter, rescind, modify, and amend all proper and necessary rules, procedures, and orders for the exercise of its powers and the performance of its duties, including rules of procedure for appeals from any rule, procedure, or order of the commission.
(c) Administer and enforce this chapter, and do and perform all acts and exercise all powers incidental to or in connection with or deemed reasonably necessary, proper, or advisable to effectuate the purposes of this chapter.
(d) Employ or retain a person to serve at the pleasure of the commission as president and chief executive officer of the commission, and other personnel, including private legal counsel of its choice, necessary to carry out this chapter. The commission may fix the compensation for all employees of the commission. The commission may retain a management firm or the staff from any board, commission, or committee of the state government to perform the functions prescribed by this section under the direction of the commission.
(e) Establish offices, incur expenses, and enter into any and all contracts and agreements, and create liabilities and borrow funds in advance or receipt of assessments as may be necessary, at the discretion of the commission, for the proper administration and enforcement of this chapter and the performance of its duties.
(f) Maintain accurate books, records, and accounts of all its dealings, which shall be subject to an annual audit by an auditing firm selected by the commission with the concurrence of the secretary. A summary of the audit shall be reported to all persons subject to this chapter, a copy of which shall also be submitted to the department. In addition, the secretary may, as the secretary determines necessary, conduct or cause to be conducted a fiscal and compliance audit of the commission.
(g) Present facts to, and negotiate with, local and state agencies on matters affecting the cannabis and cannabis products industries.
(h) Appoint committees composed of both members and nonmembers of the commission.
(i) Assess and address the impact of local and state regulations on the cannabis products industries.
(j) Educate and instruct the consuming public with respect to cannabis and cannabis products, including, but not limited to, the uses, medicinal properties, and health value of these commodities, and the environmental protection and conservation issues relating to the production of cannabis.
(k) Educate and instruct the wholesale and retail trade with respect to proper methods of handling and marketing of cannabis and cannabis products, arrange for the performance of merchandising work providing display and other promotional materials, conduct market surveys and analysis, assist local and state agencies in addressing issues affecting market access, including, but not limited to, resolving phytosanitary issues, developing shipping protocols, limiting chemical residues, and addressing packaging, labeling, and other issues, and undertake any other similar activities that the commission may determine appropriate for the maintenance and expansion of present markets and the creation of new and larger markets for cannabis and cannabis products.
(l) Conduct, and contract with others to conduct, scientific and other research, including the study, analysis, dissemination, and accumulation of information obtained from research or elsewhere respecting the production, medicinal value, processing, storage, inspection, transportation, marketing, and distribution of, and cultural practices relating to, cannabis and cannabis products.
(m) Accept contributions of private, local, or state funds, and make contributions of commission funds, or match contributions, to other persons or to local or state agencies for purposes of promoting, enhancing, and maintaining the sun-grown cannabis and cannabis products industries in the Emerald Triangle.
(n) Cooperate with governmental or private entities in the resolution of emergencies arising in the industry and impacting the health and safety of the public or the continued stability of the industry.
(o) Collect information, including, but not limited to, industry crop statistics, and publish and distribute, without charge, a bulletin or other communication to persons subject to this chapter.
(p) Establish an assessment rate to defray operating costs of the commission.
(q) Establish an annual budget according to generally accepted accounting practices. The budget shall be concurred in by the secretary before disbursement of funds, except for disbursements made for the payment of employees.
(r) Submit to the secretary for the secretary’s concurrence an annual statement of contemplated activities authorized pursuant to this chapter.
(s) Keep confidential and not disclose, except when required by a court order after a hearing in a judicial proceeding involving this chapter, all information deemed proprietary or a trade secret by the commission. The commission shall establish procedures to provide cultivators access to communicate with other cultivators regarding noncommercial matters affecting the commission, so long as the access does not directly or indirectly release proprietary or trade secret information in the possession of the commission.
(t) Investigate and prosecute civil violations of this chapter and file complaints with appropriate law enforcement agencies or officers for suspected criminal violations of this chapter.
(u) Administer any program of activities authorized by this chapter upon the request of an authorized agent of the program.

66051.
 (a) The commission may collect and disseminate, to any and all interested parties, market price information based on sales that have occurred in order to prevent unfair trade practices that are detrimental to the sun-grown cannabis and cannabis products industries in the Emerald Triangle, including, but not limited to, deception and misinformation.
(b) The information reported under this section shall be kept confidential and shall not be made public under any circumstances. Only information that gives industry totals, averages, and other similar data in aggregate, nonindividualized form may be disclosed by the commission.
(c) The procedure for the collection and dissemination of information pursuant to this section shall be concurred in by the secretary.

Article  5. Referendum and Implementation

66060.
 (a) Within 90 days of the effective date of this chapter, the secretary shall establish a list of eligible cultivators.
(b) Any cultivator whose name does not appear on the list may be placed on the list by filing with the secretary a signed statement identifying the cultivator as an eligible cultivator. Failure to be on the list does not exempt the cultivator from paying assessments, and does not invalidate any industry votes conducted pursuant to this chapter.
(c) Proponents and opponents of the commission may contact cultivators on the list in a form and manner prescribed by the secretary if all expenses associated with those contacts are paid in advance.

66061.
 In determining whether this chapter is approved by eligible cultivators, the secretary shall find that at least 40 percent of the total number of cultivators on the list established pursuant to Section 66060 participated in the referendum, and that either one of the following has occurred:
(a) Sixty-five percent or more of the cultivators who voted in the referendum voted in favor of this chapter, and the cultivators so voting marketed a majority of the volume of sun-grown cannabis from the Emerald Triangle marketed in the preceding market season, or in the current marketing season if the harvest is completed before the vote, by all the cultivators who voted in the referendum.
(b) A majority of the cultivators who voted in the referendum voted in favor of this chapter, and the cultivators so voting marketed 65 percent or more of the volume of sun-grown cannabis from the Emerald Triangle marketed in the preceding marketing season, or in the current marketing season if the harvest is completed before the vote, by all the cultivators who voted in the referendum.

66062.
 The secretary shall establish a period in which to conduct the referendum that shall not be less than 10 days nor more than 60 days in duration, and may prescribe additional procedures to conduct the referendum. If the initial period established is less than 60 days, the secretary may extend the period. However, the total referendum period may not exceed 60 days.

66063.
 Nonreceipt of a ballot shall not invalidate the referendum.

66064.
 The secretary shall certify and give notice of a favorable vote to all eligible cultivators whose names and addresses are on file with the secretary if the secretary finds that a favorable vote has been given as provided in this chapter. The secretary shall certify and declare this chapter inoperative if the secretary finds that a favorable vote has not been given as provided in this chapter.

66065.
 Upon certification of the commission, the secretary shall call meetings of eligible cultivators for the purpose of nominating and electing the first members and alternates of the commission, or in the alternative, may conduct the elections by mail ballot. All cultivators on the list established pursuant to Section 66060 shall be given written notice of the election meetings at least 15 days before the meeting date, or reasonable notice of elections by mail ballot and a reasonable time period in which to return ballots.

66066.
 Subsequent to the first members and alternates elected to the commission, persons to be elected and appointed to the commission shall be selected pursuant to the nomination and election procedures established by the commission with the concurrence of the secretary.

66067.
 (a) Before the implementation referendum conducted by the secretary, the proponents of the commission shall deposit with the secretary the amount that the secretary deems necessary to defray the expenses of creating the commission, including, but not limited to, establishment of the list required by Section 66060 and conducting the referendum.
(b) Any funds remaining after paying expenses shall be returned to the proponents of the commission who deposited the funds with the secretary.
(c) The commission may reimburse the proponents of the commission for any funds deposited with the secretary that were used in carrying out this article and for any legal or other professional fees and costs incurred in establishing the commission.

Article  6. Assessments and Records

66070.
 (a) Before the beginning of each marketing season, or as soon as possible after the beginning of the marketing season, the commission shall establish assessments to be levied by the commission on eligible cultivators, as follows:
(1) A flat assessment of no less than ____ dollars ($____) and no more than ____ dollars ($____), as determined by the commission, based on the total number of pounds of sun-grown cannabis from the Emerald Triangle that all eligible cultivators marketed during the preceding marketing season.
(2) In addition, an assessment on each eligible cultivator of no less than ____ dollars ($____) and no more than ____ dollars ($____) per pound of sun-grown cannabis from the Emerald Triangle that the cultivator markets during the marketing season. In the discretion of the commission, this assessment may be established as a percent of the gross dollar value received by the cultivator for that cannabis rather than on a per pound basis. The assessment shall be established on a sliding scale that reduces the assessment by ____ dollars ($____) per pound, or the percentage equivalent if the assessment is a percent of gross dollar value, for every ____ pounds of that cannabis marketed in excess of ____ pounds.
(b) An assessment that is more than the amount provided for in this section shall not be charged unless and until a greater amount is approved by a majority of the commission and by approval of eligible cultivators, as determined pursuant to Section 66061.
(c) Notwithstanding Section 13340 of the Government Code, moneys collected pursuant to this section shall be continuously appropriated to the commission, without regard to fiscal year, for purposes of administering and enforcing this chapter.

66071.
 Every eligible cultivator shall keep complete and accurate records of all sun-grown cannabis produced, distributed, and marketed and records related to the sale of sun-grown cannabis or cannabis products. The records shall be in a simple form, and contain all information, that the commission shall prescribe. The records shall be preserved by cultivators for a period of five years and shall be offered and submitted for inspection at any reasonable time upon demand of the commission or its duly authorized agent.

66072.
 (a) All proprietary and trade secret information obtained by the commission from cultivators shall be confidential and shall not be disclosed except when required by a court order after a hearing in a judicial proceeding involving this chapter.
(b) In addition, and notwithstanding any other provision of law, all proprietary or trade secret information developed or gathered pursuant to this chapter by the commission, or by the department on behalf of the commission, from any source is confidential, shall not be considered a public record as that term is defined in Section 6252 of the Government Code, and shall not be disclosed by the commission or the secretary except when required by a court order after a hearing in a judicial proceeding involving this chapter.
(c) Information on volume shipments, crop value, and any other related information that is required for reports to governmental agencies, financial reports to the commission, or aggregate sales and inventory information, and other information that gives only totals, but excludes individual information, may be disclosed by the commission.
(d) The commission shall determine whether information is proprietary or a trade secret and not subject to disclosure. If the commission denies a request for disclosure of this information, the commission shall provide written justification for its decision to the person requesting the information, who may appeal the decision of the commission to the secretary.

66073.
 (a) Any assessment levied by the commission pursuant to this chapter is a personal debt of the cultivator on whom the assessment is levied and is due and payable at the time and in the manner prescribed by the commission.
(b) When the cultivator is a corporation, general or limited partnership, or trust, all of the directors and officers of the corporation, all of the members and managers of the limited liability company, all of the general and limited partners in the partnership, and all of the trustees of the trust, in their capacities as individuals shall be included, and any liability for violating this chapter, including, but not limited to, failing to pay assessments or file required reports, shall also include identical liability upon each director and officer of the corporation, each member and manager of the limited liability company, each general and limited partner in the partnership, and each trustee of the trust. Title to the assessments shall pass immediately to the commission and be remitted in the time and manner specified by the commission.

66074.
 Any person who fails to file a return, or remit or pay an assessment, within the time required by the commission shall pay to the commission a penalty of 10 percent of the amount of the assessment determined to be due, and in addition, 1.5 percent interest per month on the unpaid balance.

66075.
 In addition to any other penalty imposed, the commission may require any person who fails to submit records or pay an assessment or related charge pursuant to this article to furnish and maintain a surety bond in a form and amount, and for a period of time, specified by the commission as assurance that all payments to the commission will be made when due.

Article  7. Violations

66080.
 It is unlawful for any person to do any of the following:
(a) Willfully render or furnish a false report, statement, or record required by the commission or in any way to affect the delivery, receipt, processing, or marketing of sun-grown cannabis from the Emerald Triangle with the intent to avoid payment of assessments.
(b) Fail to render or furnish a report, statement, or record required by the commission.
(c) When engaged in the production, delivery, processing, marketing, or other activities related to sun-grown cannabis from the Emerald Triangle, or cannabis products containing sun-grown cannabis from the Emerald Triangle, fail or refuse to furnish to the commission, or its duly authorized agents, information concerning the name and address of the recipient or provider of the cannabis or cannabis products, and the quantity delivered or received.
(d) Secrete, destroy, or alter records required to be maintained under this chapter.

66081.
 The commission shall establish procedures for the purpose of according individuals aggrieved by its action or determinations an informal hearing before the commission, or before a committee of the commission designated for that purpose. Appeals from decisions of the commission may be made to the secretary. The determination of the secretary shall be subject to judicial review upon petition filed with the appropriate superior court.

66082.
 (a) The commission may commence civil action and use all remedies provided in law or equity for the enforcement of this chapter, including, but not limited to, the collection of assessments, penalties, and interest, and for obtaining injunctive relief or specific performance regarding this chapter and the procedures adopted pursuant to this chapter. A court shall issue to the commission any requested writ of attachment or injunctive relief upon a prima facie showing by verified complaint that a named defendant has violated this chapter or any other procedure of the commission, including, but not limited to, the nonpayment of assessments. No bond shall be required to be posted by the commission as a condition for the issuance of any writ of attachment or injunctive relief.
(b) A writ of attachment shall be issued pursuant to Chapter 4 (commencing with Section 484.010) of Title 6.5 of Part 2 of the Code of Civil Procedure, except that the showing specified in Section 485.010 of the Code of Civil Procedure is not required. Injunctive relief shall be issued pursuant to Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure, except that the showing of irreparable harm or inadequate remedy at law specified in Sections 526 and 527 of the Code of Civil Procedure is not required.
(c) Upon entry of any final judgment on behalf of the commission against any defendant, the court shall enjoin the defendant from conducting any type of business regarding cannabis or cannabis products until there is full compliance with and satisfaction of the judgment.
(d) Upon a favorable judgment for the commission, it shall be entitled to receive reimbursement for any reasonable attorney’s fees and other actual related costs. Venue for these actions may be established at the domicile or place of business of the defendant or in the county of the principal office of the commission. The commission may be sued only in the county of its principal office.

66083.
 Any action by the commission for any violation of this chapter shall be commenced within three years from the date of discovery of the alleged violation. Any action against the commission by any person shall be commenced within three years from the date of the act of which the person complains.

66084.
 The termination of this chapter shall not affect or waive any right, duty, obligation, or liability in connection with this chapter that has arisen or may arise after termination, shall not release or extinguish any violation of this chapter, and shall not affect or impair any right or remedies of the commission with respect to any violation.

Article  8. Continuation or Suspension and Termination

66090.
 Every five years, commencing with the 2025 marketing season, the secretary shall hold a hearing to determine whether the operation of this chapter should be continued. If the secretary finds, after the hearing, that a substantial question exists among eligible cultivators regarding whether the operation of this chapter should be continued, the secretary shall submit the chapter to a reapproval referendum. If a reapproval referendum is required, the operation of this chapter shall continue in effect if the secretary finds that a majority of the eligible cultivators voting in the referendum voted in favor of continuing this chapter. In finding whether the commission is continued pursuant to this article, the vote of any nonprofit agricultural cooperative marketing association that is authorized by its members to vote in the referendum shall be considered to be the approval or rejection by the individual members of the cooperative or the individual stockholders of the cooperative. No bond or security shall be required for any referendum required by this chapter; however, this shall not apply to the advance deposit of funds required by the department to cover the actual cost of a referendum.

66091.
 If the secretary finds, after conducting a hearing pursuant to Section 66090, that no substantial question exists, or that a favorable vote has been given after a referendum, the secretary shall certify that finding and this chapter shall remain operative. If the secretary finds that a favorable vote has not been given after a referendum vote, the secretary shall certify that finding and declare the operation of this chapter and the commission suspended upon the expiration of the then-current marketing season. Upon a finding that a favorable vote has not been given, the operations of the commission shall be wound up and concluded and funds distributed in the manner provided in Section 66093.

66092.
 (a) Upon a finding by a two-thirds vote of the commission that this chapter has not tended to effectuate its declared purpose, the commission may recommend to the secretary that this chapter be suspended. However, any suspension shall not become effective until the expiration of the then-current marketing season.
(b) Alternatively, the secretary may be petitioned to suspend this chapter. The petition must be signed by no less than 2 percent of the eligible cultivators, by number, who produced no less than 20 percent of the volume of sun-grown cannabis from the Emerald Triangle in the immediately preceding marketing season.
(c) The secretary shall, upon receipt of a recommendation pursuant to subdivision (a), and may, after holding a hearing on a petition submitted pursuant to subdivision (b), hold a referendum among the eligible cultivators to determine if the commission shall be suspended. However, the secretary shall not hold a referendum as a result of the petition unless the petitioner shows by a preponderance of the evidence that this chapter has not tended to effectuate its declared purposes.
(d) The secretary shall establish a referendum period that shall not be less than 10 days nor more than 60 days in duration. The secretary may prescribe additional procedures as may be necessary to conduct the referendum. At the close of the referendum period, the secretary shall tabulate the ballots filed during the period. If at least 40 percent of the total number of cultivators from the list established pursuant to Section 66060 participate in the referendum, the secretary shall suspend this chapter if the secretary finds either of the following has occurred:
(1) Sixty-five percent or more of the cultivators who voted in the referendum voted in favor of suspension, and the cultivators voting in favor of suspension marketed the majority of the total quantity of sun-grown cannabis from the Emerald Triangle marketed in the preceding marketing season by all of the cultivators who participated in the referendum.
(2) A majority of the cultivators who voted in the referendum voted in favor of suspension, and the cultivators voting in favor of suspension marketed 65 percent or more of the total quantity of sun-grown cannabis from the Emerald Triangle marketed in the preceding marketing season by all of the cultivators who voted in the referendum.

66093.
 After the effective date of suspension of this chapter, the operation of the commission shall be wound up and concluded and all moneys held by the commission not required to defray the expenses of concluding and terminating the operations of the commission shall be returned on a pro rata basis to all persons from whom assessments were collected in the immediately preceding marketing season. However, if the commission finds that the amounts returnable are such that it would be impractical or administratively burdensome to calculate and refund the moneys to the assessment payers, any funds remaining after payment of all expenses of winding up and terminating operations shall be withdrawn from the approved depository and paid to another program conducted or used to fund activities related to the subject matter of this chapter.

66094.
 Upon suspension of this chapter, the commission shall mail a copy of the notice of suspension to all cultivators affected by the suspension whose names and addresses are on file.

SEC. 4.

 The Legislature finds and declares that Sections 1 and 2 of this act, amending Sections 26061 and 26063 of the Business and Professions Code, implement Section 6.1 of the Control, Regulate and Tax Adult Use of Marijuana Act and are consistent with, and further the purposes and intent of, that act as stated in Section 3 of that act.

SEC. 5.

  The Legislature finds and declares that Section 3 of this act, which adds Sections 66050, 66051, and 66072 to the Food and Agricultural Code, 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:
In order to protect the private, confidential, proprietary, or trade secret information of a person subject to this act, it is necessary that this act limit the public’s right of access to that information.