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AB-2749 Cannabis: quality assurance and testing.(2019-2020)

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Date Published: 03/12/2020 09:00 PM
AB2749:v98#DOCUMENT

Amended  IN  Assembly  March 12, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2749


Introduced by Assembly Member Mark Stone

February 20, 2020


An act to amend Section 26110 of 26100 of, and to add Section 26102.5 to, the Business and Professions Code, relating to cannabis.


LEGISLATIVE COUNSEL'S DIGEST


AB 2749, as amended, Mark Stone. Cannabis: quality assurance and testing.
Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which includes the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative statute enacted by the voters at the November 8, 2016, statewide general election, provides for the licensure and regulation of commercial cannabis activity, including laboratory testing of cannabis and cannabis products. MAUCRSA requires cannabis batches to be subject to quality assurance and testing prior to sale at a retailer, microbusiness, or nonprofit, except as specified. Existing law requires cannabis or cannabis products to be tested by a licensed testing laboratory. Existing law requires the licensed testing laboratory to issue a certificate of analysis for each batch of cannabis or cannabis products tested, including reporting on a specified list of compounds and contaminants.

This bill would make a nonsubstantive change to the quality assurance and testing requirement.

This bill would require the bureau, on or before January 1, 2022, to establish specific testing standards for all specified compounds and contaminants. The bill would also require the bureau to post a notification on its internet website when a licensed testing laboratory is prohibited for more than 45 days from issuing certificates of analysis and to remove that notification immediately upon reinstatement of the licensed testing laboratory’s authorization to issue certificates of analysis if the licensed testing laboratory is otherwise in good standing.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

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


SECTION 1.

 Section 26100 of the Business and Professions Code is amended to read:

26100.
 (a) Except as otherwise provided by law, cannabis or cannabis products shall not be sold pursuant to a license provided for under this division unless a representative sample of the cannabis or cannabis products has been tested by a licensed testing laboratory.
(b) The bureau shall develop criteria to determine which batches shall be tested. All testing of the samples shall be performed on the final form in which the cannabis or cannabis product will be consumed or used.
(c) Testing of batches to meet the requirements of this division shall only be conducted by a licensed testing laboratory.
(d) For each batch tested, the testing laboratory shall issue a certificate of analysis for selected lots at a frequency determined by the bureau with supporting data, to report both of the following:
(1) Whether the chemical profile of the sample conforms to the labeled content of compounds, including, but not limited to, all of the following, unless limited through regulation by the bureau:
(A) Tetrahydrocannabinol (THC).
(B) Tetrahydrocannabinolic Acid (THCA).
(C) Cannabidiol (CBD).
(D) Cannabidiolic Acid (CBDA).
(E) The terpenes required by the bureau in regulation.
(F) Cannabigerol (CBG).
(G) Cannabinol (CBN).
(H) Any other compounds or contaminants required by the bureau.
(2) That the presence of contaminants does not exceed the levels established by the bureau. In establishing the levels, the bureau shall consider the American Herbal Pharmacopoeia monograph, guidelines set by the Department of Pesticide Regulation pursuant to subdivision (d) of Section 26060, and any other relevant sources. For purposes of this paragraph, “contaminants” includes, but is 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 impurities as identified by the bureau in regulation.
(e) A testing laboratory may amend a certificate of analysis to correct minor errors, as defined by the bureau.
(f) (1) Standards for residual levels of volatile organic compounds shall be established by the bureau.
(2) On or before January 1, 2022, the bureau shall establish specific testing standards for all compounds and contaminants specified in subdivision (d).
(g) The testing laboratory shall conduct all testing required by this section in a manner consistent with general requirements for the competence of testing and calibrations activities, including sampling and using verified methods.
(h) All testing laboratories performing tests pursuant to this section shall obtain and maintain ISO/IEC 17025 accreditation as required by the bureau in regulation.
(i) (1) 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.
(2) If a test result falls outside the specifications authorized by law or regulation, the testing laboratory may retest the sample if both of the following occur:
(A) The testing laboratory notifies the bureau, in writing, that the test was compromised due to equipment malfunction, staff error, or other circumstances allowed by the bureau.
(B) The bureau authorizes the testing laboratory to retest the sample.
(j) A testing laboratory shall destroy the remains of the sample of medical cannabis or medical cannabis product upon completion of the analysis, as determined by the bureau through regulations.
(k) Any presale inspection, testing transfer, or transportation of cannabis products pursuant to this section shall conform to a specified chain of custody protocol and any other requirements imposed under this division.
(l) This division does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality assurance of the product in conjunction with reasonable business operations. This division also does not prohibit a licensee from performing testing on the licensee’s premises of cannabis or cannabis products obtained from another licensee. Onsite testing by the licensee shall not be certified by the bureau and does not exempt the licensee from the requirements of quality assurance testing at a testing laboratory pursuant to this section.

SEC. 2.

 Section 26102.5 is added to the Business and Professions Code, to read:

26102.5.
 (a) The bureau shall post a notification on its internet website when a licensed testing laboratory is prohibited for more than 45 days from issuing certificates of analysis.
(b) The bureau shall remove the notification required pursuant to subdivision (a) immediately upon reinstatement of the licensed testing laboratory’s authorization to issue certificates of analysis if the licensed testing laboratory is otherwise in good standing.

SECTION 1.Section 26110 of the Business and Professions Code is amended to read:
26110.

(a)Cannabis batches shall be subject to quality assurance and testing prior to sale at a retailer, microbusiness, or nonprofit licensed under Section 26070.5, except for immature cannabis plants and seeds, as provided for in this division.

(b)A licensee that holds a valid distributor license may act as the distributor for the licensee’s cannabis and cannabis products.

(c)The distributor shall store, as determined by the bureau, the cannabis batches on the premises of the distributor before testing and continuously until either of the following occurs:

(1)The cannabis batch passes the testing requirements pursuant to this division and is transported to a licensed retailer or to another licensed distributor.

(2)The cannabis batch fails the testing requirements pursuant to this division and is destroyed or transported to a manufacturer for remediation as allowed by the bureau or the State Department of Public Health.

(d)The distributor shall arrange for a testing laboratory to obtain a representative sample of each cannabis batch at the distributor’s licensed premises. After obtaining the sample, the testing laboratory representative shall maintain custody of the sample and transport it to the testing laboratory.

(e)Upon issuance of a certificate of analysis by the testing laboratory that the cannabis batch has passed the testing requirements pursuant to this division, the distributor shall conduct a quality assurance review before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division.

(f)(1)There shall be a quality assurance compliance monitor who is an employee or contractor of the bureau and who shall not hold a license in any category or own or have an ownership interest in a licensee or the premises of a licensee.

(2)The quality assurance compliance monitor shall conduct random quality assurance reviews at a distributor’s licensed premises before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division.

(3)The quality assurance compliance monitor shall have access to all records and test results required of a licensee by law in order to conduct quality assurance analysis and to confirm test results. All records of inspection and verification by the quality assurance compliance monitor shall be provided to the bureau. Failure to comply shall be noted by the quality assurance compliance monitor for further investigation. Violations shall be reported to the bureau. The quality assurance compliance monitor shall also verify the tax payments collected and paid under Sections 34011 and 34012 of the Revenue and Taxation Code are accurate. The monitor shall also have access to the inputs and assumptions in the track and trace system and shall be able to verify their accuracy and that they are commensurate with the tax payments.

(g)After testing, all cannabis and cannabis products fit for sale may be transported only from the distributor’s premises to the premises of another licensed distributor for further distribution, or to a licensed retailer, microbusiness, or nonprofit for retail sale.

(h)A licensee is not required to sell cannabis or cannabis products to a distributor and may directly contract for sale with a licensee authorized to sell cannabis and cannabis products to purchasers.

(i)A distributor performing services pursuant to this section may collect a fee from the licensee for the services provided. The fee may include, but is not limited to, the costs incurred for laboratory testing. A distributor may also collect applicable state or local taxes and fees.

(j)This section does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality assurance of the product in conjunction with reasonable business operations. The testing conducted on the licensee’s premises by the licensee does not meet the testing requirements pursuant to this division.