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

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.

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

(1)(A)Owner or owners of a proposed facility.

(B)An “owner” means a person having an aggregate ownership interest, other than a security interest, lien, or encumbrance, of 5 percent or more in the licensee or who has the power to direct, or cause to be directed, the management or control of the licensee.

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

(c)“Batch” means a specific quantity of medical cannabis or medical cannabis product 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.

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

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

(f)“Cannabis” or “marijuana” 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” or “marijuana” also means the separated resin, whether crude or purified, obtained from marijuana. “Cannabis” or “marijuana” 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” or “marijuana” 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 that is incapable of germination. For the purposes of this chapter, “cannabis” or “marijuana” does not mean “industrial hemp” as defined by Section 11018.5 of the Health and Safety Code.

(g)“Cannabis concentrate” or “marijuana 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.

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

(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.

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

(k)“Commercial cannabis activity” or “commercial marijuana activity” includes cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, provision, donation, or sale of medical cannabis or a medical cannabis product, regardless of whether the activity is undertaken on a for-profit or nonprofit basis, or any combination thereof, and regardless of whether the activity is for compensation or is gratuitous, except as set forth in Section 19319, related to qualifying patients and primary caregivers.

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

(m)“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 is owned and operated by a person who holds a valid state license and a valid local license, permit, or other authorization.

(n)“Cultivator” means a person that conducts the planting, growing, harvesting, drying, curing, grading, or trimming of medical cannabis and that holds both a valid state license and a valid local license, permit, or other authorization.

(o)“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.

(p)“Dispensary” means a commercial facility with a fixed location, whether or not there is direct access by customers, where medical cannabis or medical cannabis products are offered, either individually or in any combination, for retail sale, including an establishment that delivers, unless delivery is expressly prohibited by local ordinance, medical cannabis and medical cannabis products as part of a retail sale.

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

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

(s)“Distributor” means a person licensed under this chapter to engage in the business of purchasing or taking custody of medical cannabis from a licensed cultivator, or medical cannabis products from a licensed manufacturer, for sale or transfer to a licensed dispensary and who holds a valid state license pursuant to this chapter and a valid local license, permit, or other authorization at the physical location of the distributor.

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

(u)“Edible cannabis product” or “edible marijuana 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.

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

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

(x)“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.

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

(z)“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 licensee.

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

(ab)“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.

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

(ad)“Manufacturer” means a person that conducts the production, preparation, propagation, or compounding of manufactured medical cannabis, as described in subdivision (ac), 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, permit, or other authorization.

(ae)“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 person that holds a valid state license pursuant to this chapter and a valid local license, permit, or other authorization.

(af)“Medical cannabis,” “medical cannabis product,” “cannabis product,” “medical marijuana,” “medical marijuana product,” or “marijuana 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” or “medical marijuana” 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.

(ag)“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.

(ah)“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.

(ai)“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.

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

(ak)“Topical product” means a product manufactured such that its final stage is in the form of a topical drug, as defined by the Center for Drug Evaluation and Research under the federal Food and Drug Administration. A topical product is not considered a drug as defined by Section 109925 of the Health and Safety Code.

(al)“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:

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

(2)Licensed pursuant to this chapter.

(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.

(an)“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.

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

(b)Commencing January 1, 2023, the bureau shall be subject to review by the appropriate policy committees of the Legislature.

(a)The Governor shall appoint a chief of the bureau, subject to confirmation by the Senate, at a salary to be fixed and determined by the Director of Consumer Affairs with the approval of the Director of Finance. The chief shall serve under the direction and supervision of the Director of Consumer Affairs and at the pleasure of the Governor.

(b)Every power granted to or duty imposed upon the director under this chapter may be exercised or performed in the name of the director by a deputy or assistant director or by the chief, subject to conditions and limitations that the director may prescribe. In addition to every power granted or duty imposed with this chapter, the director shall have all other powers and duties generally applicable in relation to bureaus that are part of the Department of Consumer Affairs.

(c)The director may employ and appoint all employees necessary to properly administer the work of the bureau, in accordance with civil service laws and regulations.

(d)The Department of Consumer Affairs shall have the sole authority to create, issue, renew, discipline, suspend, or revoke licenses for the transportation, storage unrelated to manufacturing activities, distribution, and sale of medical cannabis within the state and to collect fees in connection with activities the bureau regulates. The bureau may create licenses in addition to those identified in this chapter that the bureau deems necessary to effectuate its duties under this chapter.

(e)The Department of Food and Agriculture shall administer the provisions of this chapter related to and associated with the cultivation of medical cannabis. The Department of Food and Agriculture may create, issue, and suspend or revoke cultivation licenses for violations of this chapter.

(f)The State Department of Public Health shall administer the provisions of this chapter related to and associated with the manufacturing and testing of medical cannabis. The State Department of Public Health may create, issue, and suspend or revoke manufacturing and testing licenses for a violation of this chapter. The State Department of Public Health shall seek and include feedback from the scientific community and cannabis testing industry when promulgating testing regulations. The State Department of Public Health shall review and update medical cannabis testing standards on an annual basis, incorporating new testing technology, such as DNA testing for contaminants.

(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.

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

The licensing authority 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 that review shall be limited to its reduction.

(a)Licensing authorities administering this chapter may issue state licenses only to qualified applicants engaging in commercial cannabis activity pursuant to this chapter. One year after the Bureau of Medical Cannabis Regulation posts a notice on its Internet Web site that the licensing authorities have commenced issuing licenses, no person shall engage in commercial cannabis activity without possessing both a state license and a local permit, license, or other authorization. An entity seeking licensure pursuant to this chapter shall obtain a local license, permit, or other authorization prior to applying for state licensure. State licensing entities shall not issue a license to any applicant that is unable to provide documentation confirming authorization to operate from the local government in which the applicant proposes to operate. 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.

(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.

(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.

(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.

(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.

(a)Licensing authorities administering this chapter may issue state licenses only to qualified applicants engaging in commercial cannabis activity pursuant to this chapter. One year after the Bureau of Medical Cannabis Regulation posts a notice on its Internet Web site that the licensing authorities have commenced issuing licenses, no person shall engage in commercial cannabis activity without possessing both a state license and a local permit, license, or other authorization. An entity seeking licensure pursuant to this chapter shall obtain a local license, permit, or other authorization prior to applying for state licensure. State licensing entities shall not issue a license to any applicant that is unable to provide documentation confirming authorization to operate from the local government in which the applicant proposes to operate. 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.

(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.

(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.

(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.

(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.

(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. The secretary or director of each licensing authority may prescribe, adopt, and enforce emergency regulations necessary to implement this chapter.

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

(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 a facility or entity that can demonstrate to the licensing authority’s satisfaction that it was in operation and in good standing with the local jurisdiction by January 1, 2016.

(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 state 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.

(a)A person or entity shall not submit an application for a state license pursuant to this chapter unless that person or entity first receives a license, permit, or authorization specific to commercial cannabis activity from a local jurisdiction. An applicant for any type of state license issued pursuant to this chapter shall do all of the following:

(1)Electronically submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and arrests, and information as to the existence and content of a record of state or federal convictions and arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance, pending trial or appeal.

(A)The Department of Justice shall provide a response to the licensing authority pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(B)The licensing authority shall request from the Department of Justice subsequent notification service, as provided pursuant to Section 11105.2 of the Penal Code, for applicants.

(C)The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.

(2)Provide documentation issued by the local jurisdiction in which the proposed business is operating certifying that the applicant is or will be in compliance with all local ordinances and regulations.

(3)Provide evidence of the legal right to occupy and use the proposed location. For an applicant seeking a cultivator, distributor, manufacturing, or dispensary license, provide a statement from the owner of real property or their agent where the cultivation, distribution, manufacturing, or dispensing commercial medical cannabis activities will occur, as proof to demonstrate the landowner has acknowledged and consented to permit cultivation, distribution, manufacturing, or dispensary activities to be conducted on the property by the tenant applicant.

(4)If the application is for a cultivator or dispensary license, provide evidence that the proposed location is located beyond at least a 600-foot radius from a school, as required by Section 11362.768 of the Health and Safety Code.

(5)Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.

(6)(A)For an applicant with 20 or more employees, provide a statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement.

(B)For the purposes of this paragraph, “employee” does not include a supervisor.

(C)For purposes of this paragraph, “supervisor” means an individual having authority, in the interest of the licensee, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

(7)Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.

(8)Provide any other information required by the licensing authority.

(9)For an applicant seeking a cultivation license, provide a statement declaring the applicant is an “agricultural employer,” as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code), to the extent not prohibited by law.

(10)For an applicant seeking licensure as a testing laboratory, register with the State Department of Public Health and provide any information required by the State Department of Public Health.

(11)Pay all applicable fees required for licensure by the licensing authority.

(b)For applicants seeking licensure to cultivate, distribute, or manufacture medical cannabis or medical cannabis products, the application shall also include a detailed description of the applicant’s operating procedures for all of the following, as required by the licensing authority:

(1)Cultivation.

(2)Extraction and infusion methods.

(3)The transportation process.

(4)Inventory procedures.

(5)Quality control procedures.

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

(b)(1)A cultivator or a manufacturer shall send 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 distributor and for a batch testing by a testing laboratory prior to distribution to a dispensary, except as provided in paragraph (2). Those licensees holding a Type 10A license in addition to a cultivation license or a manufacturing license shall send medical cannabis and medical cannabis products to a distributor for presale inspection and for a batch testing by a testing laboratory 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.

(2)A cultivator is not required to send medical cannabis to a distributor if the medical cannabis is to be used, sold, or otherwise distributed by methods approved pursuant to this chapter to a manufacturer for further manufacturing.

(c)(1)Upon receipt of medical cannabis or medical cannabis products from a cultivator or a manufacturer, the distributor shall first ensure a random sample of the medical cannabis or medical cannabis product is tested by a testing laboratory.

(2)Upon issuance of a certificate of analysis by the testing laboratory that the product is fit for manufacturing or retail, the cultivator or manufacturer shall send medical cannabis and medical cannabis products from the approved associated batch to the distributor. All medical cannabis and medical cannabis products shall then undergo a quality assurance review by the distributor prior to distribution to ensure the identity, quality, and content of the medical cannabis or medical cannabis product, and for tracking and taxation purposes by the state. 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, except as otherwise specified in this chapter. 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, except as otherwise specified in this chapter. The bureau shall specify the manner in which medical cannabis and medical cannabis products meant for wholesale purposes shall be packaged and sealed prior to transport, testing, quality assurance, quality control testing, or distribution.

(3)This section does not limit the ability of a cultivator, manufacturer, or dispensary 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 distributor responsible for executing the contract is authorized to collect a fee for the services rendered, including, but not limited to, costs incurred by a testing laboratory, as well as applicable state or local taxes and fees.

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

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

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

(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.

(e)All commercial cannabis activity shall be conducted between licensees.

(f)The bureau shall promulgate regulations relating to the amounts of each batch of medical cannabis or medical cannabis product that a cultivator or manufacturer is required to send to a distributor for inspection and a testing laboratory for testing. The regulations shall focus on reducing diversion, ensuring the quality of the product for the health and safety of patients, and allowing for efficiency in enforcement.

(a)Except as specified in paragraph (9), a licensee may only hold a state license in up to two separate license categories, as follows:

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

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

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

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

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

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

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

(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. By January 1, 2025, the bureau shall review the appropriateness of continuing licensure under this paragraph and shall report its recommendation for elimination or extension of these provisions to the Legislature.

(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.

(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:

(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 for tax purposes.

(2)A business licensed pursuant to paragraph (1) is not required to conduct all cultivation or manufacturing within the bounds of a single 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.

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

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

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

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

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

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

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

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

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

(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.

(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.

(c)This section shall become operative on January 1, 2026.

(a)The Department of Food and Agriculture shall promulgate regulations governing the licensing of indoor and outdoor cultivation sites.

(b)The Department of Pesticide Regulation, in consultation with the Department of Food and Agriculture, shall develop standards for the use of pesticides in cultivation, and maximum tolerances for pesticides and other foreign object residue in harvested cannabis.

(c)The State Department of Public Health shall develop standards for the production and labeling of all edible medical cannabis products.

(d)The Department of Food and Agriculture, in consultation with the Department of Fish and Wildlife and the State Water Resources Control Board, shall ensure that individual and cumulative effects of water diversion and discharge associated with cultivation do not affect the instream flows needed for fish spawning, migration, and rearing, and the flows needed to maintain natural flow variability.

(e)The Department of Food and Agriculture shall have the authority necessary to implement the regulations it adopts pursuant to this chapter. The regulations shall do all of the following:

(1)Provide that weighing or measuring devices used in connection with the sale or distribution of medical cannabis are required to meet standards equivalent to Division 5 (commencing with Section 12001).

(2)Require that medical cannabis cultivation by licensees is conducted in accordance with state and local laws related to land conversion, grading, electricity usage, water usage, agricultural discharges, and similar matters. Nothing in this chapter, and no regulation adopted by the department, shall be construed to supersede or limit the authority of the State Water Resources Control Board, regional water quality control boards, or the Department of Fish and Wildlife to implement and enforce their statutory obligations or to adopt regulations to protect water quality, water supply, and natural resources.

(3)Establish procedures for the issuance and revocation of unique identifiers for activities associated with a medical cannabis cultivation license, pursuant to Article 8 (commencing with Section 19337). All medical cannabis shall be labeled with the unique identifier issued by the Department of Food and Agriculture.

(4)Prescribe standards, in consultation with the bureau, for the reporting of information as necessary related to unique identifiers, pursuant to Article 8 (commencing with Section 19337).

(f)The Department of Pesticide Regulation, in consultation with the State Water Resources Control Board, shall promulgate regulations that require that the application of pesticides or other pest control in connection with the indoor or outdoor cultivation of medical cannabis meets standards equivalent to Division 6 (commencing with Section 11401) of the Food and Agricultural Code and its implementing regulations.

(g)State cultivator license types issued by the Department of Food and Agriculture include:

(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 less than or equal to 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 less than or equal to 5,000 square feet of total canopy size on one premises.

(4)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.

(5)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.

(6)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.

(7)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.

(8)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.

(9)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.

(10)Type 4, or “nursery,” for cultivation of medical cannabis solely as a nursery. A Type 4 licensee may transport live immature plants to a licensed facility, subject to the tracking, security, and related requirements in accordance with Article 7 (commencing with Section 19334), Article 7.5 (commencing with Section 19335), and Article 8 (commencing with Section 19337).

(a)The Department of Food and Agriculture shall promulgate regulations governing the licensing of indoor and outdoor cultivation sites.

(b)The Department of Pesticide Regulation, in consultation with the Department of Food and Agriculture, shall develop standards for the use of pesticides in cultivation, and maximum tolerances for pesticides and other foreign object residue in harvested cannabis.

(c)The State Department of Public Health shall develop standards for the production and labeling of all edible medical cannabis products.

(d)The Department of Food and Agriculture, in consultation with the Department of Fish and Wildlife and the State Water Resources Control Board, shall ensure that individual and cumulative effects of water diversion and discharge associated with cultivation do not affect the instream flows needed for fish spawning, migration, and rearing, and the flows needed to maintain natural flow variability.

(e)The Department of Food and Agriculture shall have the authority necessary to implement the regulations it adopts pursuant to this chapter. The regulations shall do all of the following:

(1)Provide that weighing or measuring devices used in connection with the sale or distribution of medical cannabis are required to meet standards equivalent to Division 5 (commencing with Section 12001).

(2)Require that medical cannabis cultivation by licensees is conducted in accordance with state and local laws related to land conversion, grading, electricity usage, water usage, agricultural discharges, and similar matters. Nothing in this chapter, and no regulation adopted by the department, shall be construed to supersede or limit the authority of the State Water Resources Control Board, regional water quality control boards, or the Department of Fish and Wildlife to implement and enforce their statutory obligations or to adopt regulations to protect water quality, water supply, and natural resources.

(3)Establish procedures for the issuance and revocation of unique identifiers for activities associated with a medical cannabis cultivation license, pursuant to Article 8 (commencing with Section 19337). All medical cannabis shall be labeled with the unique identifier issued by the Department of Food and Agriculture.

(4)Prescribe standards, in consultation with the bureau, for the reporting of information as necessary related to unique identifiers, pursuant to Article 8 (commencing with Section 19337).

(f)The Department of Pesticide Regulation, in consultation with the State Water Resources Control Board, shall promulgate regulations that require that the application of pesticides or other pest control in connection with the indoor or outdoor cultivation of medical cannabis meets standards equivalent to Division 6 (commencing with Section 11401) of the Food and Agricultural Code and its implementing regulations.

(g)State cultivator license types issued by the Department of Food and Agriculture include:

(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 less than or equal to 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 less than or equal to 5,000 square feet of total canopy size on one premises.

(4)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.

(5)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.

(6)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.

(7)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.

(8)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.

(9)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.

(10)Type 4, or “nursery,” for cultivation of medical cannabis solely as a nursery. A Type 4 licensee may transport live immature plants to a licensed facility, subject to the tracking, security, and related requirements in accordance with Article 7 (commencing with Section 19334), Article 7.5 (commencing with Section 19335), and Article 8 (commencing with Section 19337).

(a)Not later than January 1, 2020, the Department of Food and Agriculture in conjunction with the bureau, shall make available a certified organic designation and organic certification program for medical cannabis, if permitted under federal law and the National Organic Program (Section 6517 of the federal Organic Foods Production Act of 1990 (7 U.S.C. Sec. 6501 et seq.)), and Article 7 (commencing with Section 110810) of Chapter 5 of Part 5 of Division 104 of the Health and Safety Code.

(b)The bureau may establish appellations of origin for medical cannabis grown in California.

(c)It is unlawful for medical cannabis to be marketed, labeled, or sold as grown in a California county when the medical cannabis was not grown in that county.

(d)It is unlawful to use the name of a California county in the labeling, marketing, or packaging of medical cannabis products unless the product was grown in that county.

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

(1)(A)“Dispensary,” as defined in this chapter.

(B)A dispensary may be one of the following:

(i)“Storefront dispensary” for licensees who have a brick and mortar dispensary with direct physical access for the public.

(ii)“Nonstorefront dispensary” for licensees who have a brick and mortar dispensary that does not have a storefront with direct physical access for the public.

(C)Any of the dispensaries listed in subparagraph (B) may deliver in a city, county, or city and county that does not expressly prohibit delivery by local ordinance.

(2)“Distributor,” or “Type 11 licensee,” for the distribution of medical cannabis and medical cannabis products from manufacturer to dispensary. A distributor shall hold a Type 12, or transporter, license and register each location where product is stored for the purposes of distribution. A distributor 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 distributor shall be bonded and insured at a minimum level established by the licensing authority.

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

(b)The bureau shall establish both of the following:

(1)Minimum security requirements for the commercial transportation and delivery of medical cannabis and medical cannabis products.

(2)Advertising, marketing, signage, and other labeling requirements and restrictions, including a prohibition on advertising, marketing, and other promotion of the medical cannabis or medical cannabis products provided by a person engaging in commercial cannabis activity but not in full compliance with this chapter.

(A)The bureau may provide information to verify a state license is active and in good standing for purposes of complying with this paragraph.

(B)One year after the bureau posts a notice on its Internet Web site that the licensing authorities have commenced issuing licenses pursuant to the Medical Cannabis Regulation and Safety Act, all advertisements for licensees under this chapter shall include the valid state license number of the licensee.

(c)A 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:

(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.

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

(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.

(4)Requiring all medical cannabis and medical cannabis products used for display purposes, samples, or immediate sale to be stored out of reach of any individual who is not employed by the dispensary.

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

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

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

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

(4)Any other breach of security.

(a)The Department of Food and Agriculture, in consultation with the bureau, shall establish a track and trace program for reporting the movement of medical cannabis items throughout the distribution chain that utilizes a unique identifier pursuant to Section 11362.777 of the Health and Safety Code and secure packaging and is capable of providing information that captures, at a minimum, all of the following:

(1)The licensee receiving the product.

(2)The transaction date.

(3)The cultivator from which the product originates, including the associated unique identifier, pursuant to Section 11362.777 of the Health and Safety Code.

(b)(1)The Department of Food and Agriculture shall create an electronic database containing the electronic shipping manifests, which shall include, but not be limited to, the following information:

(A)The quantity, or weight, and variety of products shipped.

(B)The estimated times of departure and arrival.

(C)The quantity, or weight, and variety of products received.

(D)The actual time of departure and arrival.

(E)A categorization of the product.

(F)The license number and the unique identifier pursuant to Section 11362.777 of the Health and Safety Code issued by the licensing authority for all licensees involved in the shipping process, including cultivators, transporters, distributors, and dispensaries.

(2)(A)The database shall be designed to flag irregularities for all licensing authorities in this chapter to investigate. Notwithstanding Section 30, all licensing authorities pursuant to this chapter may access the database and share information related to licensees under this chapter, including social security and individual taxpayer identifications.

(B)The Department of Food and Agriculture shall immediately inform the bureau upon the finding of an irregularity or suspicious finding related to a licensee, applicant, or commercial cannabis activity for investigatory purposes.

(3)Licensing authorities and state and local agencies may, at any time, inspect shipments and request documentation for current inventory.

(4)The bureau shall have 24-hour access to the electronic database administered by the Department of Food and Agriculture.

(5)The Department of Food and Agriculture may enter into a memorandum of understanding with a licensing authority for data sharing purposes, as deemed necessary by the Department of Food and Agriculture.

(6)Information received and contained in records kept by the Department of Food and Agriculture or licensing authorities for the purposes of administering this section 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.

(7)Upon the request of a state or local law enforcement agency, licensing authorities shall allow access to or provide information contained within the database to assist law enforcement in their duties and responsibilities pursuant to this chapter.

(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.

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

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

(1)In the final form which the patient will consume the medical cannabis or medical cannabis product, including moisture content and other attributes.

(2)A scientifically valid methodology approved by the accrediting body.

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

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

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

(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:

(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.

(F)Cannabigerol (CBG).

(G)Cannabinol (CBN).

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

(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 include, but are not limited to, all of the following:

(A)Residual solvent or processing chemicals.

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

(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.

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

(b)Residual levels of volatile organic compounds shall be below those set by the State Department of Public Health. The State Department of Public Health shall conduct periodic audits of the results of testing laboratories to verify their accuracy.

(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 transfer or transport medical cannabis or medical cannabis products, except to the licensed facility 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.

(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.

(c)The State Department of Public Health shall develop procedures to ensure that testing of cannabis occurs prior to transport 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.

(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.

(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:

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

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

(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.

(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.

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

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

(L)Any other requirement set by the State Department of Public Health.

(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.

(b)Only generic food names may be used to describe edible medical cannabis products, pursuant to regulations promulgated by the State Department of Public Health.

Each licensing authority shall establish a scale of application, licensing, and renewal fees, based upon the cost of enforcing this chapter, as follows:

(a)Each licensing authority shall charge each licensee a licensure and renewal fee, as applicable. The licensure and renewal fee shall be calculated to cover the costs of administering this chapter. The licensure fee may vary depending upon the varying costs associated with administering the various regulatory requirements of this chapter as they relate to the nature and scope of the different licensure activities, including, but not limited to, the track and trace program required pursuant to Section 19335, but shall not exceed the reasonable regulatory costs to the licensing authority.

(b)The total fees assessed pursuant to this chapter shall be set at an amount that will fairly and proportionately generate sufficient total revenue to fully cover the total costs of administering this chapter.

(c)All state license fees shall be set on a scaled basis by the licensing authority, dependent on the size of the business.

(d)The licensing authority shall deposit all fees collected pursuant to this chapter in a fee account specific to that licensing authority, to be established in the Medical Cannabis Regulation and Safety Act Fund. Moneys in the licensing authority fee accounts shall be used, upon appropriation of the Legislature, by the designated licensing authority for the administration of this chapter.

(e)The fees established by licensing authorities pursuant to this chapter shall be in addition to, and shall not limit, any fees or taxes imposed by a city, county, or city and county in which the licensee operates.

(a)The Medical Cannabis Regulation and Safety Act Fund is hereby established within the State Treasury. Moneys in the fund shall be available upon appropriation by the Legislature. Notwithstanding Section 16305.7 of the Government Code, the fund shall include any interest and dividends earned on the moneys in the fund.

(b)(1)Funds for the establishment and support of the regulatory activities pursuant to this chapter shall be advanced as a General Fund or special fund loan, and shall be repaid by the initial proceeds from fees collected pursuant to this chapter or any rule or regulation adopted pursuant to this chapter, by January 1, 2022. Should the initial proceeds from fees not be sufficient to repay the loan, moneys from the Medical Cannabis Fines and Penalties Account shall be made available to the bureau, by appropriation of the Legislature, to repay the loan.

(2)Funds advanced pursuant to this subdivision shall be appropriated to the bureau, which shall distribute the moneys to the appropriate licensing authorities, as necessary to implement the provisions of this chapter.

(3)The Director of Finance may provide an initial operating loan from the General Fund to the Medical Cannabis Regulation and Safety Act Fund that does not exceed ten million dollars ($10,000,000).

(c)Except as otherwise provided, all moneys collected pursuant to this chapter as a result of fines or penalties imposed under this chapter shall be deposited directly into the Medical Cannabis Fines and Penalties Account, which is hereby established within the fund, and shall be available, upon appropriation by the Legislature to the bureau, for the purposes of funding the enforcement grant program pursuant to subdivision (d).

(d)(1)The bureau shall establish a grant program to allocate moneys from the Medical Cannabis Fines and Penalties Account to state and local entities for the following purposes:

(A)To assist with medical cannabis regulation and the enforcement of this chapter and other state and local laws applicable to cannabis activities.

(B)For allocation to state and local agencies and law enforcement to remedy the environmental impacts of cannabis cultivation.

(2)The costs of the grant program under this subdivision shall, upon appropriation by the Legislature, be paid for with moneys in the Medical Cannabis Fines and Penalties Account.

(3)The grant program established by this subdivision shall only be implemented after the loan specified in subdivision (b) is repaid.

(a)A person engaging in commercial cannabis activity without a license and associated unique identifiers 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 licensing authority, state or local authority, or court may order the destruction of medical cannabis associated with that violation. Each day of operation shall constitute a separate violation of this section. All civil penalties imposed and collected pursuant to this section shall be deposited into the Medical Cannabis Fines and Penalties Account, established pursuant to Section 19351, except as provided in subdivision (b).

(b)If an action for civil penalties is brought against a licensee pursuant to this chapter by the Attorney General, the penalty collected shall be deposited into the Medical Cannabis Fines and Penalties Account. 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.

(c)Notwithstanding subdivision (a), criminal penalties shall continue to apply to an unlicensed person or entity 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.

(a)In addition to any penalties imposed by any other law, a person found to have violated the code sections described in paragraphs (1) to (11), inclusive, in connection with the production or cultivation of a controlled substance on land under the management of the Department of Parks and Recreation, the Department of Fish and Wildlife, the Department of Forestry and Fire Protection, the State Lands Commission, a regional park district, the United States Forest Service, or the United States Bureau of Land Management, or within the respective ownership of a timberland production zone, as defined in Chapter 6.7 (commencing with Section 51100) of Part 1 of Division 1 of Title 5 of the Government Code, of more than 50,000 acres, or while trespassing on other public or private land in connection with the production or cultivation of a controlled substance, shall be liable for a civil penalty as follows:

(1)A person who violates Section 1602 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(2)A person who violates Section 5650 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation.

(3)A person who violates Section 5652 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation.

(4)A person who violates subdivision (a) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation.

(5)A person who violates paragraph (1) of subdivision (h) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation.

(6)A person who violates subdivision (b) of Section 374.8 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation.

(7)A person who violates Section 384a of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(8)A person who violates subdivision (a) of Section 4571 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(9)A person who violates Section 4581 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(10)A person who violates Section 2000 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(11)A person who violates Section 2002 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(b)(1)In addition to any penalties imposed by any other law, a person found to have violated the code sections described in this subdivision in connection with the production or cultivation of a controlled substance on land that the person owns, leases, or otherwise uses or occupies with the consent of the landowner shall be liable for a civil penalty as follows:

(A)A person who violates Section 1602 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation.

(B)A person who violates Section 5650 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation.

(C)A person who violates Section 5652 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation.

(D)A person who violates subdivision (a) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation.

(E)A person who violates paragraph (1) of subdivision (h) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation.

(F)A person who violates subdivision (b) of Section 374.8 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation.

(G)A person who violates Section 384a of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation.

(H)A person who violates subdivision (a) of Section 4571 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation.

(I)A person who violates Section 4581 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation.

(J)A person who violates Section 2000 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation.

(K)A person who violates Section 2002 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation.

(2)Each day that a violation of a code section described in this subdivision occurs or continues to occur shall constitute a separate violation.

(c)The civil penalty imposed for each separate violation pursuant to this section is in addition to any other civil penalty imposed for another violation of this section, or any violation of any other law.

(d)All civil penalties imposed or collected by a court for a separate violation pursuant to this section shall not be considered to be fines or forfeitures, as described in Section 13003, and shall be apportioned in the following manner:

(1)Thirty percent shall be distributed to the county in which the violation was committed pursuant to Section 13003. The county board of supervisors shall first use any revenues from those penalties to reimburse the costs incurred by the district attorney or city attorney in investigating and prosecuting the violation.

(2)(A)Thirty percent shall be distributed to the investigating agency to be used to reimburse the cost of any investigation directly related to the violations described in this section.

(B)If the department receives reimbursement pursuant to this paragraph for activities funded pursuant to subdivision (f) of Section 4629.6 of the Public Resources Code, the reimbursement funds shall be deposited into the Timber Regulation and Forest Restoration Fund, created by Section 4629.3 of the Public Resources Code, if there is an unpaid balance for a loan authorized by subdivision (f) of Section 4629.6 of the Public Resources Code.

(3)Forty percent shall be deposited into the Timber Regulation and Forest Restoration Fund, created by Section 4629.3 of the Public Resources Code, and used for grants authorized pursuant to Section 4629.6 of the Public Resources Code that improve forest health by remediating former cannabis growing operations.

(e)Civil penalties authorized pursuant to this section may be imposed administratively by the department if all of the following occur:

(1)The chief deputy director or law enforcement division assistant chief in charge of cannabis-related enforcement issues a complaint to any person or entity on which an administrative civil penalty may be imposed pursuant to this section. The complaint shall allege the act or failure to act that constitutes a violation, any facts related to natural resources impacts, the provision of law authorizing the civil penalty to be imposed, and the proposed penalty amount.

(2)The complaint and order is served by personal notice or certified mail and informs the party served that the party may request a hearing not later than 20 days from the date of service. If a hearing is requested, it shall be scheduled before the director or his or her designee, which designee shall not be the chief deputy or assistant chief issuing the complaint and order. A request for a hearing shall contain a brief statement of the material facts the party claims support his or her contention that no administrative penalty should be imposed or that an administrative penalty of a lesser amount is warranted. A party served with a complaint pursuant to this subdivision waives his or her right to a hearing if a hearing is not requested within 20 days of service of the complaint, in which case the order imposing the administrative penalty shall become final.

(3)The director, or his or her designee, shall control the nature and order of hearing proceedings. Hearings shall be informal in nature, and need not be conducted according to the technical rules relating to evidence. The director or his or her designee shall issue a final order within 45 days of the close of the hearing. A copy of the final order shall be served by certified mail upon the party served with the complaint.

(4)A party may obtain review of the final order by filing a petition for a writ of mandate with the superior court within 30 days of the date of service of the final order. The administrative penalty shall be due and payable to the department within 60 days after the time to seek judicial review has expired, or, where the party did not request a hearing of the order, within 20 days after the order imposing an administrative penalty becomes final.

(5)The department may adopt regulations to implement this subdivision.

(f)All administrative penalties imposed or collected by the department for a separate violation pursuant to this section shall not be considered to be fines or forfeitures, as described in Section 13003, and shall be deposited into the Timber Regulation and Forest Restoration Fund, created by Section 4629.3 of the Public Resources Code, to repay any unpaid balance of a loan authorized by subdivision (f) of Section 4629.6 of the Public Resources Code. Any remaining funds from administrative penalties collected pursuant to this section shall be apportioned in the following manner:

(1)Fifty percent shall be deposited into the Timber Regulation and Forest Restoration Fund for grants authorized pursuant to subdivision (h) of Section 4629.6 of the Public Resources Code, with priority given to grants that improve forest health by remediating former cannabis growing operations.

(2)Fifty percent shall be deposited into the Fish and Game Preservation Fund.

(g)Any civil penalty imposed pursuant to this section for the violation of an offense described in paragraph (4), (5), or (6) of subdivision (a) or subparagraph (D), (E), or (F) of paragraph (1) of subdivision (b) for which the person was convicted shall be offset by the amount of any restitution ordered by a criminal court.

(h)For purposes of this section, “controlled substance” has the same meaning as defined in Section 11007 of the Health and Safety Code.

(i)This section does not apply to any activity in full compliance with the Medical Cannabis Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code).

(a)The Legislature finds and declares all of the following:

(1)The environmental impacts associated with cannabis cultivation have increased, and unlawful water diversions for cannabis irrigation have a detrimental effect on fish and wildlife and their habitat, which are held in trust by the state for the benefit of the people of the state.

(2)The remediation of existing cannabis cultivation sites is often complex and the permitting of these sites requires greater department staff time and personnel expenditures. The potential for cannabis cultivation sites to significantly impact the state’s fish and wildlife resources requires immediate action on the part of the department’s lake and streambed alteration permitting staff.

(b)In order to address unlawful water diversions and other violations of the Fish and Game Code associated with cannabis cultivation, the department shall establish the watershed enforcement program to facilitate the investigation, enforcement, and prosecution of these offenses.

(c)The department, in coordination with the State Water Resources Control Board, shall establish a permanent multiagency task force to address the environmental impacts of cannabis cultivation. The multiagency task force, to the extent feasible and subject to available resources, shall expand its enforcement efforts on a statewide level to ensure the reduction of adverse impacts of cannabis cultivation on fish and wildlife and their habitats throughout the state.

(d)In order to facilitate the remediation and permitting of cannabis cultivation sites, the department shall adopt regulations to enhance the fees on medical-cannabis-cultivation-related activities subject to Section 1602 for cannabis cultivation sites that require remediation. The fee schedule established pursuant to this subdivision shall not exceed the fee limits in Section 1609.

(a)Subject to subdivision (d), 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. A collective or cooperative that operates pursuant to this section may operate for profit, not for profit, or any combination thereof. A collective or cooperative that operates for profit shall only retain the protections of this section if it possesses a valid, Board of Equalization-issued sellers permit and a valid local license, permit, or other authorization.

(b)(1)It is unlawful for 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 in order collectively or cooperatively to cultivate cannabis for medical purposes, to submit for placement an advertisement that fails to include in the text of the advertisement the collective or cooperative’s valid State Board of Equalization issued seller’s permit number.

(2)A violation of this subdivision is an infraction, punishable by a fine of five hundred dollars ($500).

(3)For purposes of this section, “advertisement” means a notice, announcement, or information in a public medium, including, but not limited to, television, Internet Web site, billboard, or printed publication, that promotes a location where medical cannabis is sold or dispensed or a service that is involved in the delivery of medical cannabis.

(c)A collective or cooperative that operates pursuant to this section and manufactures medical cannabis products shall not, solely on the basis of that fact, be subject to state criminal sanctions under Section 11379.6 if the collective or cooperative abides by all of the following requirements:

(1)Utilizes only nonvolatile solvents, as provided in the Medical Cannabis Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code) or any regulations adopted pursuant to that act.

(2)Is in possession of a valid sellers permit issued by the State Board of Equalization.

(3)Is in possession of a valid local license, permit, or other authorization specific to the manufacturing of medical cannabis products.

(4)For purposes of this subdivision, “manufacturing” includes compounding, converting, producing, deriving, processing, or preparing, either directly or indirectly by chemical extraction or independently by means of chemical synthesis, medical cannabis products.

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

(a)The Department of Food and Agriculture shall establish a Medical Cannabis Cultivation Program to be administered by the secretary and, except as specified in subdivision (c), shall administer this section as it pertains to the cultivation of medical cannabis. For purposes of this section and Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code, medical cannabis is an agricultural product.

(b)(1)A person or entity shall not cultivate medical cannabis without first obtaining both of the following:

(A)A license, permit, or other entitlement, specifically permitting cultivation pursuant to these provisions, from the city, county, or city and county in which the cultivation will occur.

(B)A state license issued by the department pursuant to this section.

(2)A person or entity shall not submit an application for a state license pursuant to this section unless that person or entity has received a license, permit, or other entitlement, specifically permitting cultivation pursuant to these provisions, from the city, county, or city and county in which the cultivation will occur.

(3)A person or entity shall not submit an application for a state license pursuant to this section if the proposed cultivation of cannabis will violate the provisions of a local ordinance or regulation, or if medical cannabis is prohibited by the city, county, or city and county in which the cultivation is proposed to occur, either expressly or otherwise under principles of permissive zoning.

(c)(1)Except as otherwise specified in this subdivision, and without limiting any other local regulation, a city, county, or city and county, through its current or future land use regulations or ordinance, may issue or deny a permit to cultivate medical cannabis pursuant to this section. A city, county, or city and county may inspect the intended cultivation site for suitability before issuing a permit. After the city, county, or city and county has approved a permit, the applicant shall apply for a state medical cannabis cultivation license from the department. A locally issued cultivation permit shall only become active upon licensing by the department and receiving final local approval. A person shall not cultivate medical cannabis before obtaining both a license or permit from the city, county, or city and county and a state medical cannabis cultivation license from the department.

(2)A city, county, or city and county that issues or denies conditional licenses to cultivate medical cannabis pursuant to this section shall notify the department in a manner prescribed by the secretary.

(3)A city, county, or city and county’s locally issued conditional permit requirements must be at least as stringent as the department’s state licensing requirements.

(d)(1)The secretary may prescribe, adopt, and enforce regulations relating to the implementation, administration, and enforcement of this section, including, but not limited to, applicant requirements, collections, reporting, refunds, and appeals.

(2)The secretary may prescribe, adopt, and enforce any emergency regulations as necessary to implement this section. An emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare.

(3)The secretary may enter into a cooperative agreement with a county agricultural commissioner to carry out the provisions of this section, including, but not limited to, administration, investigations, inspections, licensing and assistance pertaining to the cultivation of medical cannabis. Compensation under the cooperative agreement shall be paid from assessments and fees collected and deposited pursuant to this section and shall provide reimbursement to the county agricultural commissioner for associated costs.

(e)(1)The department, in consultation with, but not limited to, the Bureau of Medical Cannabis Regulation, the State Water Resources Control Board, and the Department of Fish and Wildlife, shall implement a unique identification program for medical cannabis. In implementing the program, the department shall consider issues, including, but not limited to, water use and environmental impacts. In implementing the program, the department shall ensure that:

(A)Individual and cumulative effects of water diversion and discharge associated with cultivation do not affect the instream flows needed for fish spawning, migration, and rearing, and the flows needed to maintain natural flow variability.

(B)Cultivation will not negatively impact springs, riparian wetlands, and aquatic habitats.

(2)The department shall establish a program for the identification of permitted medical cannabis plants at a cultivation site during the cultivation period. The unique identifier shall be attached at the base of each plant. A unique identifier, such as, but not limited to, a zip tie, shall be issued for each medical cannabis plant.

(A)Unique identifiers shall only be issued to those persons appropriately licensed by this section.

(B)Information associated with the assigned unique identifier and licensee shall be included in the trace and track program specified in Section 19335 of the Business and Professions Code.

(C)The department may charge a fee to cover the reasonable costs of issuing the unique identifier and monitoring, tracking, and inspecting each medical cannabis plant.

(3)The department shall take adequate steps to establish protections against fraudulent unique identifiers and limit illegal diversion of unique identifiers to unlicensed persons.

(f)(1)A city, county, or city and county that issues or denies licenses, permits, or other entitlements to cultivate medical cannabis pursuant to this section shall notify the department in a manner prescribed by the secretary.

(2)Unique identifiers and associated identifying information administered by a city, county, or city and county shall adhere to the requirements set by the department and be the equivalent to those administered by the department.

(g)This section does not apply to a qualified patient cultivating cannabis pursuant to Section 11362.5 if the area he or she uses to cultivate cannabis does not exceed 100 square feet and he or she cultivates cannabis for his or her personal medical use and does not sell, distribute, donate, or provide cannabis to any other person or entity. This section does not apply to a primary caregiver cultivating cannabis pursuant to Section 11362.5 if the area he or she uses to cultivate cannabis does not exceed 500 square feet and he or she cultivates cannabis exclusively for the personal medical use of no more than five specified qualified patients for whom he or she is the primary caregiver within the meaning of Section 11362.7 and does not receive remuneration for these activities, except for compensation provided in full compliance with subdivision (c) of Section 11362.765. For purposes of this section, the area used to cultivate cannabis shall be measured by the aggregate area of vegetative growth of live cannabis plants on the premises. Exemption from the requirements of this section does not limit or prevent a city, county, or city and county from exercising its police authority under Section 7 of Article XI of the California Constitution.