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AB-2810 Cannabis: cultivation licenses: Sun-Grown Cannabis Commission and Indoor-Grown Cannabis Commission.(2017-2018)



Current Version: 04/20/18 - Amended Assembly        


AB2810:v97#DOCUMENT

Amended  IN  Assembly  April 20, 2018
Amended  IN  Assembly  April 05, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2810


Introduced by Assembly Member Levine

February 16, 2018


An act to amend Section 26061 of the Business and Professions Code, and to add Chapter 2.5 (commencing with Section 65000) and Chapter 2.6 (commencing with Section 65100) to Part 2 of Division 22 of the Food and Agricultural Code, relating to cannabis, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 2810, as amended, Levine. Cannabis: cultivation licenses: Sun-Grown Cannabis Commission. Commission and Indoor-Grown Cannabis Commission.
(1) The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA), an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities.
Under existing law, the Department of Food and Agriculture may issue cannabis cultivation licenses to commercial cannabis businesses that differ depending on the size of the cultivation site and whether the site is indoor, outdoor, or mixed, including a Type 1C, or “specialty cottage,” license, which authorizes a licensee to engage in cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, of 2,500 square feet or less of total canopy size for mixed-light cultivation, up to 25 mature plants for outdoor cultivation, or 500 square feet or less of total canopy size for indoor cultivation, on one premises.
This bill would additionally authorize, as a Type IC, or “specialty cottage,” license, a licensee to engage in cultivation of 2,500 square feet or less of total canopy size for outdoor cultivation.
AUMA authorizes the Legislature to amend by majority vote certain provisions of the act to implement specified substantive provisions, provided that the amendments are consistent with and further the purposes and intent of AUMA.
This bill would state that the Legislature finds and declares that this bill implements substantive provisions of AUMA and is consistent with, and furthers the purposes and intent of, AUMA.
(2) Under existing law, the Legislature finds and declares that the agricultural and seafood industries are vitally important elements of the state’s economy. Existing law provides for various commissions and councils to promote the marketing and production of agricultural or seafood commodities.
This bill would create the Sun-Grown Cannabis Commission in the state government with a prescribed membership, and would specify the powers, duties, and responsibilities of the commission commission’s board of directors. The bill would authorize the commission board of directors would be authorized to, among other things, conduct research for specified purposes, assess and address the impact of local and state regulations on the cannabis products industries, and collect and disseminate market price information to prevent unfair trade practices. The bill would authorize the commission to levy assessments on cultivators, as defined, in amounts within unspecified ranges based on the weight or value of sun-grown cannabis marketed and would authorize the commission to expend those funds for purposes of implementing these provisions, thereby making an appropriation.
The bill would provide that these provisions, except as necessary to conduct an election, would not become operative until the cultivators vote in favor of these provisions, as prescribed. The bill would also provide for the suspension of the operation of these provisions and for concluding the operations of the commission under certain circumstances. The bill would authorize the commission to levy a civil penalty, as specified, on a person for rendering or furnishing false reports, secreting, destroying, or altering records, failing to furnish a report, or failing or refusing to furnish to the commission information concerning the names and addresses of persons to whom sun-grown cannabis was delivered or from whom sun-grown cannabis was received. The bill would authorize the commission to bring certain civil actions to enforce these provisions.
(3) This bill would create the Indoor-Grown Cannabis Commission in the state government with a prescribed membership, and would specify the powers, duties, and responsibilities of the commission’s board of directors. The bill would authorize the commission to, among other things, conduct research for specified purposes, assess and address the impact of local and state regulations on the indoor-grown cannabis industries, and collect and disseminate market price information to prevent unfair trade practices. The bill would authorize the commission to establish assessment rates for the marketing season for the administration and enforcement of these provisions by the commission based on the licensing fees collected by the Department of Food and Agriculture in the administration of the regulated cannabis cultivation program and would require the state licensing fees to be adjusted based on type and tier to include the cost of administration and enforcement of these provisions.
The bill would provide that these provisions, except as necessary to conduct an election, would not become operative until the cultivators vote in favor of these provisions, as prescribed. The bill would also provide for the suspension of the operation of these provisions and for concluding the operations of the commission under certain circumstances. The bill would make it unlawful for a person to render or furnish false reports, secrete, destroy, or alter records, fail to furnish a report, or fail or refuse to furnish to the commission information concerning the names and addresses of persons to whom indoor-grown cannabis was delivered or from whom indoor-grown cannabis was received. The bill would authorize the commission to bring certain civil actions to enforce these provisions.

Existing

(4) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

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

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

SEC. 2.

 Chapter 2.5 (commencing with Section 65000) is added to Part 2 of Division 22 of the Food and Agricultural Code, to read:
CHAPTER  2.5. Sun-Grown Cannabis Commission
Article  1. Declarations and General Provisions

65000.
 The Legislature finds and declares all of the following:
(a) The production and distribution of sun-grown cannabis constitute important industries that provide substantial and necessary revenues for the state. The cannabis industry in this state is expanding. The industry constitutes an important source of jobs for many people in the state.
(b) The maintenance and expansion of the sun-grown cannabis industry is necessary to ensure the consuming public of a continuous supply of these products and needed levels of income for those engaged in the sun-grown cannabis industry.
(c) Opportunity exists for continued growth and expansion of the sun-grown cannabis industry by creating new markets. The success of an expansion program is uniquely dependent on effective education and research, since the creation of new markets is a matter of educating and informing people of the use and availability of the commodity. The expansion of the sun-grown cannabis industry also provides an important source of jobs.
(d) Sun-grown cannabis and sun-grown cannabis products have the potential to be one of the leading segments of the state’s cannabis industry. To realize this potential, there is a need to make consumers aware of the high quality of sun-grown cannabis. The activities made possible by the establishment of the Sun-Grown Cannabis Commission will meet this need and further the interests of the industry and the state.
(e) The sun-grown cannabis industry has enjoyed success due to commitment by the industry to fund research that has led to improvements in quality and variety of cannabis available to consumers. The establishment of the Sun-Grown Cannabis Commission will continue to enhance this research effort and move the sun-grown cannabis industry towards its potential, resulting in increased consumer value, greater environmental protections, and enhanced returns to cultivators.

65001.
 The production and marketing of sun-grown cannabis produced in California is hereby declared to be affected with public interest. This chapter is enacted in the exercise of the police power of this state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state.

65002.
 The commission form of administration created by this chapter is uniquely situated to provide those engaged in the production of sun-grown cannabis the opportunity to avail themselves of the benefits of collective action in the broad fields of production, marketing research, quality and maturity standards, the collection and dissemination of crop volume and related statistics, and public education.

65003.
 (a) It shall be the policy of this state to preserve and encourage agricultural activities in the state, promote the consumption of agricultural commodities produced and harvested in California, provide for research, governance, and accountability, including the ability for agriculture to act collectively and to assess itself through the process of referendum.
(b) It shall be the policy of this state that the program authorized in this chapter shall engage in activities that are not more extensive in scope than is necessary to accomplish its purposes, and that the powers and duties of this program are designed to directly and materially advance the state’s interest in a stable, thriving agricultural industry. Further, this policy can be implemented most effectively by the collective actions authorized in this chapter while not preventing individuals from additionally engaging in self-help activities.

65004.
 No action taken by the commission, or by any person in accordance with this chapter or with rules or regulations adopted under this chapter, is a violation of the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), the Unfair Practices Act (Chapter 4 (commencing with Section 17000) of that Part 2), or any statutory or common law against monopolies or combinations in restraint of trade. Proof that any action complained of was done in compliance with this chapter shall be a complete defense to the action or proceeding.

65005.
 This chapter shall be liberally construed. If any provision of this chapter or the application thereof to any person or circumstances is held to be invalid, the invalidity shall not affect other provisions or applications of the chapter that can be given effect without the invalid provision or application, and to this end end, the provisions of the chapter are severable.

65006.
 It is hereby declared as a matter of legislative determination that members of the commission are intended to represent and further the interest interests of the particular agricultural industry concerned and that this representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are elected or appointed to the commission, the particular agricultural industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.

Article  2. Definitions

65010.
 Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.

65011.
 “Books and records” mean books, records, contracts, documents, memoranda, papers, correspondence, or other written data pertaining to matters relating to the activities subject to the provisions of this chapter.

65012.
 “Bureau” means the Bureau of Cannabis Control.

65013.
 “Cannabis” has the same meaning as in subdivision (f) of Section 26001 of the Business and Professions Code.

65014.
 “Cannabis products” has the same meaning as in Section 11018.1 of the Health and Safety Code.

65015.
 “Commission” means the Sun-Grown Cannabis Commission.

65016.
 “Cultivator” means any person who is engaged in the business of producing, or causing to be produced, cannabis for market and issued an “outdoor” or “Mixed-Light Tier 1” license by the department and remains in good standing.

65017.
 “Department” means the Department of Food and Agriculture.

65018.
 “Ex officio member” means a nonvoting member of the commission board of directors.

65019.
 “Market” means to sell, barter, trade, purchase, acquire, or otherwise distribute cannabis or cannabis products.

65020.
 “Market development” includes, but is not limited to, trade, promotion, public education, dissemination of information on industry issues, and other matters, and activities for the prevention, modification, and removal of barriers that restrict the free flow of cannabis and cannabis products to market, and may include, but is not limited to, presentation of facts to local and state governmental agencies on matters that affect this chapter.

65021.
 “Market research” means any investigation, development, analysis, or implementation of information relating to the marketing of cannabis or cannabis products including, but not limited to, consumer trends, promotion, sales, and advertising.

65022.
 “Marketing season” or “fiscal year” means the period beginning March 1 of any year and extending through the last day of February of the following year.

65023.
 “Person” means an individual, partnership, corporation, limited liability company, or other business entity.

65024.
 “Production research” means research relating to the production and processing of cannabis, including, but not limited to, the development of new cannabis products and uses for these products.

65025.
 “Secretary” means the Secretary of Food and Agriculture.

65026.
 “Sun-grown” means cultivated outdoors pursuant to a California-issued “outdoor” or “Mixed-Light Tier 1” cannabis cultivation license.

Article  3. The Sun-Grown Cannabis Commission

65030.
 (a) There is in state government the Sun-Grown Cannabis Commission. The commission board of directors shall be comprised of six cultivators who only hold an outdoor cannabis cultivation license, two cultivators who hold a California-issued cannabis cultivation license specified in Section 65016, and one public member.
(b) The public member and his or her alternate shall be appointed to the commission board of directors by the secretary from nominees recommended by the commission board of directors.

65031.
 (a) The secretary may require the commission to correct or cease any existing activity or function that is determined by the secretary not to be in the public interest or that is in violation of this chapter.
(b) If the commission refuses or fails to cease those activities or functions or to make the corrections as required by the secretary, the secretary may, upon written notice, suspend all or a portion of the activities or functions of the commission until the time that the cessation or correction of activities or functions as required by the secretary has been accomplished by the commission.
(c) Actions of the commission in violation of the written notice are without legal force or effect. The secretary, to the extent feasible, shall issue the written notice prior to the commission entering into any contractual relationship affecting the existing or proposed activities or functions that are the subject of the written notice.
(d) Upon service of the written notice, the secretary shall notify the commission in writing of the specific acts that the secretary determines are not in the public interest or are in violation of this chapter, his or her reasons for requiring a cessation or correction of specific existing or proposed activities or functions, and recommendations that will make the activities or functions acceptable.

65032.
 The commission or the secretary may bring an action for judicial relief from the secretary’s written notice, or from noncompliance by the commission with the written notice, as the case may be, in a court of competent jurisdiction, that may issue a temporary restraining order, permanent injunction, or other applicable relief.

65033.
 When the secretary is required to concur in a decision of the commission, the secretary shall give his or her response to the commission within 15 working days from notification of the decision. The secretary’s response may be a requirement that additional information be provided.

65034.
 The commission shall reimburse the secretary for all expenditures incurred in carrying out his or her duties and responsibilities pursuant to this chapter. However, a court may, if it finds that the secretary acted arbitrarily or capriciously in restricting the activities or functions of the commission, relieve the commission of the responsibility for payment of the secretary’s legal costs with regard to that action.

65035.
 Each member of the commission, except the ex officio members, shall have an alternate member selected by the member, subject to approval by the commission. An alternate shall, in the absence of the member for whom he or she is an alternate, serve in place of the member and shall have and be able to exercise all the rights, privileges, and powers of the member when serving on the commission. In the event of a change in status making a member ineligible to serve, or due to death, removal, resignation, or disqualification, of a member, the alternate shall act as a member of the commission until a qualified successor is elected or appointed.

65036.
 Any individual serving as a cultivator member and his or her alternate member shall be a cultivator during the entire term of office. No more than one member and his or her alternate member shall be employed by, represent, or be connected in a proprietary capacity with the same cultivator. However, cultivator membership in an agricultural nonprofit cooperative association or trade organization shall not be considered employment or being in a proprietary capacity.

65037.
 The public member and his or her alternate member shall have all the rights, privileges, and powers of any other member of the commission. The public member shall not have any financial interest in the cannabis industry.

65038.
 The term of office of members and alternate members shall be for two years or until their successors have been elected and have qualified. However, of the first members of the commission, a portion of the cultivator members and their alternate members shall serve for one year so that the terms shall be staggered. The determination of the term of each member and his or her corresponding alternate member shall be made by lot. The commission may establish term limits for members and alternate members pursuant to procedures established by the commission and concurred in by the secretary.

65039.
 Not less than five voting members shall constitute a quorum of the commission.

65040.
 The vote of a majority of the members present at a meeting at which there is a quorum shall constitute an act of the commission.

65041.
 The commission shall be, and is hereby declared and created as, a corporate body. It shall have the power to sue and be sued, to contract and be contracted with, and to have and possess all the powers of a corporation. It may adopt a corporate seal. Copies of its proceedings, records, and acts, when authenticated, shall be admissible in evidence in all courts of the state and shall be prima facie evidence of the truth of all statements therein.

65042.
 The secretary or his or her representatives shall be notified and may attend meetings of the commission and any committee meetings of the commission.

65043.
 No member or alternate member of the commission, or member of a committee established by the commission who is not a member of the commission, shall receive a salary. Each member of the commission and any alternate member serving in place of his or her member, except ex officio members, and each member of a committee established by the commission who is not a member of the commission, shall receive necessary traveling expenses and meal allowances, as approved by the commission, and may receive an amount not to exceed one hundred dollars ($100) per day, as established by the commission. This amount shall be paid for each day spent in actual attendance at, or in traveling to and from, meetings of the commission or committees of the commission, or on assignment for the commission, as approved by the commission.

65044.
 All funds received by the assessments levied pursuant to this chapter or otherwise received by the commission shall be deposited in banks that the commission may designate and shall be disbursed by order of the commission through an agent or agents as it may designate. The agent or agents shall be bonded by a fidelity bond, executed by a surety company authorized to transact business in this state, in favor of the commission, in an amount of not less than twenty-five thousand dollars ($25,000).

65045.
 (a) The state is not liable for the acts of the commission or its contracts. Payments of all claims arising by reason of the administration of this chapter or acts of the commission are limited to the funds collected by the commission.
(b) No member, alternate member, employee, or agent of the commission is personally liable for the contracts of the commission or for errors in judgment, mistakes, or other acts, either of commission or omission, except for his or her own individual acts of dishonesty or crime. Liability is several and not joint, and no member, alternate member, or any employee or agent of the commission is liable individually for the default, act, or omission of any other member, alternate member, or any employee or agent of the commission.

Article  4. Powers and Duties

65050.
 The powers and duties of the commission shall include, but not be limited to, the following:
(a) Elect a chairperson and other officers as it may deem advisable, and delegate duties as may be advisable.
(b) Adopt and from time to time and, from time to time, alter, rescind, modify, and amend all proper and necessary rules, procedures, and orders for the exercise of its powers and the performance of its duties, including rules of procedure for appeals from any rule, procedure, or order of the commission.
(c) Administer and enforce this chapter, and do and perform all acts and exercise all powers incidental to or in connection with or deemed reasonably necessary, proper, or advisable to effectuate the purposes of this chapter.
(d) Employ or retain a person to serve at the pleasure of the commission as president and chief executive officer of the commission, and other personnel, including private legal counsel of its choice, necessary to carry out this chapter. The commission may fix the compensation for all employees of the commission. The commission may retain a management firm or the staff from any board, commission, or committee of the state government to perform the functions prescribed by this section under the direction of the commission.
(e) Establish offices, incur expenses, and enter into any and all contracts and agreements, and create liabilities and borrow funds in advance or receipt of assessments as may be necessary, at the discretion of the commission, for the proper administration and enforcement of this chapter and the performance of its duties.
(f) Maintain accurate books, records, and accounts of all its dealings, which shall be subject to an annual audit by an auditing firm selected by the commission with the concurrence of the secretary. A summary of the audit shall be reported to all persons subject to this chapter, a copy of which shall also be submitted to the department. In addition, the secretary may, as he or she determines necessary, conduct or cause to be conducted a fiscal and compliance audit of the commission.
(g) Present facts to, and negotiate with, local and state agencies on matters affecting the cannabis and cannabis products industries.
(h) Appoint committees composed of both members and nonmembers of the commission.
(i) Assess and address the impact of local and state regulations on the cannabis products industries.
(j) Educate and instruct the consuming public with respect to cannabis and cannabis products, including, but not limited to, the uses, medicinal properties, and health value of these commodities, and the environmental protection and conservation issues relating to the production of cannabis.
(k) Educate and instruct the wholesale and retail trade with respect to proper methods of handling and marketing of cannabis and cannabis products, arrange for the performance of merchandising work providing display and other promotional materials, conduct market surveys and analysis, assist local and state agencies in addressing issues affecting market access, including, but not limited to, resolving phytosanitary issues, developing shipping protocols, limiting chemical residues, and addressing packaging, labeling, and other issues, and undertake any other similar activities that the commission may determine appropriate for the maintenance and expansion of present markets and the creation of new and larger markets for cannabis and cannabis products.
(l) Conduct, and contract with others to conduct, scientific and other research, including the study, analysis, dissemination, and accumulation of information obtained from research or elsewhere respecting the production, medicinal value, processing, storage, inspection, transportation, marketing, and distribution of, and cultural practices relating to, cannabis and cannabis products.
(m) Accept contributions of private, local, or state funds, and make contributions of commission funds, or match contributions, to other persons or to local or state agencies for purposes of promoting, enhancing, and maintaining the sun-grown cannabis and cannabis products industries.
(n) Cooperate with governmental or private entities in the resolution of emergencies arising in the industry and impacting the health and safety of the public or the continued stability of the industry.
(o) Collect information, including, but not limited to, industry crop statistics, and publish and distribute, without charge, a bulletin or other communication to persons subject to this chapter.
(p) Establish an assessment rate to defray operating costs of the commission.
(q) Establish an annual budget according to generally accepted accounting practices. The budget shall be concurred in by the secretary prior to before disbursement of funds, except for disbursements made for the payment of employees.
(r) Submit to the secretary for his or her concurrence an annual statement of contemplated activities authorized pursuant to this chapter.
(s) Keep confidential and not disclose, except when required by a court order after a hearing in a judicial proceeding involving this chapter, all information deemed proprietary or a trade secret by the commission. The commission shall establish procedures to provide cultivators access to communicate with other cultivators regarding noncommercial matters affecting the commission so long as the access does not directly or indirectly release proprietary or trade secret information in the possession of the commission.
(t) Investigate and prosecute civil violations of this chapter and file complaints with appropriate law enforcement agencies or officers for suspected criminal violations of this chapter.
(u) Administer any program of activities authorized by this chapter upon the request of an authorized agent of the program.

65051.
 (a) The commission may collect and disseminate, to any and all interested parties, market price information based on sales that have occurred in order to prevent unfair trade practices that are detrimental to the sun-grown cannabis and cannabis products industries, including, but not limited to, deception and misinformation.
(b) The information reported under this section shall be kept confidential and shall not be made public under any circumstances. Only information that gives industry totals, averages, and other similar data in aggregate, nonindividualized form may be disclosed by the commission.
(c) The procedure for the collection and dissemination of information pursuant to this section shall be concurred in by the secretary.

Article  5. Referendum and Implementation

65060.
 (a) Within 90 days of the effective date of this chapter, the secretary shall establish a list of cultivators eligible to vote on implementation of this chapter.
(b) Any cultivator whose name does not appear on the appropriate list may have his or her name placed on the list by filing with the secretary a signed statement identifying himself or herself as a cultivator. Failure to be on the list does not exempt the person from paying assessments, and does not invalidate any industry votes conducted pursuant to this chapter.
(c) Proponents and opponents of the commission may contact cultivators on the lists in a form and manner prescribed by the secretary if all expenses associated with those contacts are paid in advance.

65061.
 In determining whether this chapter is approved by cultivators, the secretary shall find that at least 40 percent of the total number of cultivators from the list established by the secretary participated in the referendum, and that either one of the following has occurred:
(a) Sixty-five percent or more of the cultivators who voted in the referendum voted in favor of this chapter, and the cultivators so voting marketed a majority of the volume of sun-grown cannabis marketed in the preceding market season, or in the current marketing season if the harvest is completed prior to the vote, by all the cultivators who voted in the referendum.
(b) A majority of the cultivators who voted in the referendum voted in favor of this chapter, and the cultivators so voting marketed 65 percent or more of the volume of sun-grown cannabis marketed in the preceding marketing season, or in the current marketing season if the harvest is completed prior to the vote, by all the cultivators who voted in the referendum.

65062.
 The secretary shall establish a period in which to conduct the referendum that shall not be less than 10 days nor more than 60 days in duration, and may prescribe additional procedures to conduct the referendum. If the initial period established is less than 60 days, the secretary may extend the period. However, the total referendum period may not exceed 60 days.

65063.
 Nonreceipt of a ballot shall not invalidate the referendum.

65064.
 The secretary shall certify and give notice of a favorable vote to all cultivators whose names and addresses are on file with the secretary if he or she finds that a favorable vote has been given as provided in this chapter. The secretary shall certify and declare this chapter inoperative if he or she finds that a favorable vote has not been given as provided in this chapter.

65065.
 Upon certification of the commission, the secretary shall call meetings of cultivators for the purpose of nominating and electing the first members and alternate members of the commission, or in the alternative, may conduct the elections by mail ballot. All cultivators on the secretary’s list shall be given written notice of the election meetings at least 15 days prior to before the meeting date, or reasonable notice of elections by mail ballot and a reasonable time period in which to return ballots.

65066.
 Subsequent to the first members and alternate members elected to the commission, persons to be elected and appointed to the commission shall be selected pursuant to the nomination and election procedures established by the commission with the concurrence of the secretary.

65067.
 (a) Prior to Before the implementation referendum conducted by the secretary, the proponents of the commission shall deposit with the secretary the amount that the secretary deems necessary to defray the expenses of creating the commission, including, but not limited to, preparing the necessary cultivator list and conducting the referendum.
(b) Any funds remaining after paying expenses shall be returned to the proponents of the commission who deposited the funds with the secretary.
(c) The commission may reimburse the proponents of the commission for any funds deposited with the secretary that were used in carrying out this article and for any legal or other professional fees and costs incurred in establishing the commission.

Article  6. Assessments and Records

65070.
 (a) Prior to Before the beginning of each marketing season, or as soon as possible thereafter, the commission shall establish assessment rates for the marketing season for the administration and enforcement of this chapter, as follows:
(1) An annual assessment on cultivators of not less than ____ dollars ($____) and not more than ____ dollars ($____), as determined by the commission, based on the number of pounds of sun-grown cannabis marketed during the preceding marketing season.
(2) In addition, cultivators shall pay an assessment not less than____ dollars ($____) and not greater than____ dollars ($____) per pound of sun-grown cannabis marketed by cultivators. In the discretion of the commission, this assessment may be established as a percent of the gross dollar value received by cultivators for that cannabis rather than on a per pound basis. The assessment shall be established on a sliding scale that decreases the assessment by ____ dollars ($____) per pound, or the percentage equivalent if the assessment is a percent of gross dollar value, for every ____ pounds of that cannabis marketed by cultivators in excess of ____ pounds.
(b) An assessment greater than the amount provided for in this section shall not be charged unless and until a greater amount is approved by a majority of the commission and by eligible cultivators in accordance with the voting requirements specified in Section 65061.
(c) Moneys collected pursuant to this section shall be continuously appropriated to the commission, without regard to fiscal year, for purposes of administering this chapter.

65071.
 Every cultivator shall keep complete and accurate records of sun-grown cannabis produced, distributed, and marketed and records related to the sale of sun-grown cannabis or sun-grown cannabis products. The records shall be in simple form and contain information as the commission shall prescribe. The records shall be preserved by cultivators for a period of five years and shall be offered and submitted for inspection at any reasonable time upon demand of the commission or its duly authorized agent.

65072.
 (a) All proprietary and trade secret information obtained by the commission from cultivators shall be confidential and shall not be disclosed except when required by a court order after a hearing in a judicial proceeding involving this chapter.
(b) In addition, and notwithstanding any other provision of law, all proprietary or trade secret information developed or gathered pursuant to this chapter by the commission, or by the department on behalf of the commission, from any source is confidential, shall not be considered a public record as that term is defined in Section 6252 of the Government Code, and shall not be disclosed by the commission or the secretary except when required by a court order after a hearing in a judicial proceeding involving this chapter.
(c) Information on volume shipments, crop value, and any other related information that is required for reports to governmental agencies, financial reports to the commission, or aggregate sales and inventory information, and other information that give only totals, but excludes individual information, may be disclosed by the commission.
(d) The commission shall determine whether information is proprietary or a trade secret and not subject to disclosure. If the commission denies a request for disclosure of this information, the commission shall provide written justification for its decision to the person requesting the information, who may appeal the decision of the commission to the secretary.

65073.
 (a) Any assessment levied by the commission, pursuant to this chapter, is a personal debt of every person so assessed and is due and payable in the time and manner prescribed by the commission.
(b) When the cultivator is a corporation, general or limited partnership, or trust, all of the directors and officers of the corporation, all of the members and managers of the limited liability company, all of the general and limited partners in the partnership, and all of the trustees of the trust, in their capacities as individuals shall be included, and any liability for violating this chapter, including, but not limited to, failing to pay assessments or file required reports, shall also include identical liability upon each director and officer of the corporation, each member and manager of the limited liability company, each general and limited partner in the partnership, and each trustee of the trust. Title to the assessments shall pass immediately to the commission and be remitted in the time and manner specified by the commission.

65074.
 Any person who fails to file a return, or remit or pay an assessment, within the time required by the commission shall pay to the commission a penalty of 10 percent of the amount of the assessment determined to be due, and in addition, 1.5 percent interest per month on the unpaid balance.

65075.
 In addition to any other penalty imposed, the commission may require any person who fails to submit records or pay an assessment or related charge pursuant to this article to furnish and maintain a surety bond in a form and amount, and for a period of time, specified by the commission as assurance that all payments to the commission will be made when due.

Article  7. Violations

65080.
 It is unlawful for any person to do any of the following:
(a) Willfully render or furnish a false report, statement, or record required by the commission or in any way to affect the delivery, receipt, processing, or marketing of sun-grown cannabis with the intent to avoid payment of assessments.
(b) Fail to render or furnish a report, statement, or record required by the commission.
(c) When engaged in the production, delivery, processing, marketing, or other activities related to sun-grown cannabis or sun-grown cannabis products, fail or refuse to furnish the commission, or its duly authorized agents, information concerning the names and addresses of the persons to whom sun-grown cannabis was delivered or from whom sun-grown cannabis has been received, and the quantity delivered or received.
(d) Secrete, destroy, or alter records required to be maintained under this chapter.

65081.
 The commission shall establish procedures for the purpose of according individuals aggrieved by its action or determinations an informal hearing before the commission, or before a committee of the commission designated for that purpose. Appeals from decisions of the commission may be made to the secretary. The determination of the secretary shall be subject to judicial review upon petition filed with the appropriate superior court.

65082.
 (a) The commission may commence civil action and use all remedies provided in law or equity for the enforcement of this chapter, including, but not limited to, the collection of assessments, penalties, and interest, and for obtaining injunctive relief or specific performance regarding this chapter and the procedures adopted pursuant to this chapter. A court shall issue to the commission any requested writ of attachment or injunctive relief upon a prima facie showing by verified complaint that a named defendant has violated this chapter or any other procedure of the commission, including, but not limited to, the nonpayment of assessments. No bond shall be required to be posted by the commission as a condition for the issuance of any writ of attachment or injunctive relief.
(b) A writ of attachment shall be issued pursuant to Chapter 4 (commencing with Section 484.010) of Title 6.5 of Part 2 of the Code of Civil Procedure, except that the showing specified in Section 485.010 of the Code of Civil Procedure is not required. Injunctive relief shall be issued pursuant to Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure, except that the showing of irreparable harm or inadequate remedy at law specified in Sections 526 and 527 of the Code of Civil Procedure is not required.
(c) Upon entry of any final judgment on behalf of the commission against any defendant, the court shall enjoin the defendant from conducting any type of business regarding cannabis or cannabis products until there is full compliance with and satisfaction of the judgment.
(d) Upon a favorable judgment for the commission, it shall be entitled to receive reimbursement for any reasonable attorney’s fees and other actual related costs. Venue for these actions may be established at the domicile or place of business of the defendant or in the county of the principal office of the commission. The commission may be sued only in the county of its principal office.

65083.
 Any action by the commission for any violation of this chapter shall be commenced within three years from the date of discovery of the alleged violation. Any action against the commission by any person shall be commenced within three years from the date of the act of which the person complains.

65084.
 The termination of this chapter shall not affect or waive any right, duty, obligation, or liability that has arisen or that may thereafter arise in connection with this chapter, release or extinguish any violation of this chapter, or affect or impair any right or remedies of the commission with respect to any violation.

Article  8. Continuation or Suspension and Termination

65090.
 Every five years, commencing with the 2024 marketing season, the secretary shall hold a hearing to determine whether the operation of this chapter should be continued. If the secretary finds, after the hearing, that a substantial question exists among eligible persons regarding whether the operation of this chapter should be continued, the secretary shall submit the chapter to a reapproval referendum. If a reapproval referendum is required, the operation of this chapter shall continue in effect if the secretary finds that a majority of the eligible cultivators voting in the referendum voted in favor of continuing this chapter. In finding whether the commission is continued pursuant to this article, the vote of any nonprofit agricultural cooperative marketing association that is authorized by its members to so vote shall be considered to be the approval or rejection by the individual members thereof, or the individual stockholders therein. No bond or security shall be required for any referendum required by this chapter; however, this shall not apply to the advance deposit of funds required by the department to cover the actual cost of a referendum.

65091.
 If the secretary finds, after conducting a hearing pursuant to Section 65090, that no substantial question exists, or that a favorable vote has been given after a referendum, the secretary shall so certify and this chapter shall remain operative. If the secretary finds that a favorable vote has not been given after a referendum vote, he or she shall so certify and declare the operation of this chapter and the commission suspended upon the expiration of the then current then-current marketing season. Thereupon, the operations of the committee shall be wound up and concluded and funds distributed in the manner provided in Section 65093.

65092.
 (a) Upon a finding by a two-thirds vote of the commission that this chapter has not tended to effectuate its declared purpose, the commission may recommend to the secretary that this chapter be suspended. However, any suspension shall not become effective until the expiration of the then current then-current marketing season.
(b) Alternatively, the secretary may be petitioned to suspend this chapter. The petition must be signed by not less than 2 percent of the cultivators, by number, who produced not less than 20 percent of the volume of sun-grown cannabis in the immediately preceding marketing season.
(c) The secretary shall, upon receipt of the recommendation to suspend this chapter from the commission, and may, after holding a hearing on the petition to suspend this chapter, hold a referendum among the cultivators to determine if the commission shall be suspended. However, the secretary shall not hold a referendum as a result of the petition unless the petitioner shows by a preponderance of the evidence that this chapter has not tended to effectuate its declared purposes.
(d) The secretary shall establish a referendum period that shall not be less than 10 days nor more than 60 days in duration. The secretary may prescribe additional procedures as may be necessary to conduct the referendum. At the close of the referendum period, the secretary shall tabulate the ballots filed during the period. If at least 40 percent of the total number of cultivators from the lists established by the secretary participate in the referendum, the secretary shall suspend this chapter if he or she finds either of the following has occurred:
(1) Sixty-five percent or more of the cultivators who voted in the referendum voted in favor of suspension, and the cultivators so voting marketed the majority of the total quantity of sun-grown cannabis marketed in the preceding marketing season by all of the cultivators who participated in the referendum.
(2) A majority of the cultivators who voted in the referendum voted in favor of suspension, and the cultivators so voting marketed 65 percent or more of the total quantity of sun-grown cannabis marketed in the preceding marketing season by all of the cultivators who voted in the referendum.

65093.
 After the effective date of suspension of this chapter, the operation of the commission shall be wound up and concluded and all moneys held by the commission not required to defray the expenses of concluding and terminating the operations of the committee shall be returned on a pro rata basis to all persons from whom assessments were collected in the immediately preceding marketing season. However, if the commission finds that the amounts returnable are such that it would be impractical or administratively burdensome to calculate and refund the moneys to the assessment payers, any funds remaining after payment of all expenses of winding up and terminating operations shall be withdrawn from the approved depository and paid to another program conducted or used to fund activities related to the subject matter of this chapter.

65094.
 Upon suspension of this chapter, the commission shall mail a copy of the notice of suspension to all cultivators affected by the suspension whose names and addresses are on file.

SEC. 3.

 Chapter 2.6 (commencing with Section 65100) is added to Part 2 of Division 22 of the Food and Agricultural Code, to read:
CHAPTER  2.6. Indoor-Grown Cannabis Commission
Article  1. Declarations and General Provisions

65100.
 The Legislature finds and declares all of the following:
(a) The cultivation, processing, manufacturing, distribution, testing, and selling of indoor-grown cannabis constitutes an important part of the cannabis industry that provides substantial and necessary revenues for the state. The cannabis industry constitutes an important source of jobs for many people in the state.
(b) The maintenance and expansion of the indoor-grown cannabis segment of the cannabis industry is necessary to ensure the consuming public of a continuous supply of regulated, tested indoor-grown cannabis.
(c) Opportunity exists for continued growth and expansion of the indoor-grown cannabis segment of the cannabis industry by supporting the current cultivators and creating new markets. The success of an expansion program is uniquely dependent on effective education and research. The creation of new markets is a matter of educating people about the science of the cannabis plant, of its various uses, and availability of the commodity. The quality and availability of the education is directly reliant on research. The continued growth and expansion will be driven by both agriculture and scientific opportunities, providing job growth within the indoor-grown cannabis segment.
(d) Indoor-grown cannabis has the potential to be one of the leading segments of the state’s cannabis industry. To realize this potential, there is a need to increase consumers’ awareness of the quality and high value of indoor-grown cannabis. The activities made possible by the establishment of the Indoor-Grown Cannabis Commission will meet this need and further the interests of the industry and the state.

65101.
 The cultivation, processing, manufacturing, distribution, testing, selling, and marketing of indoor-grown cannabis produced in California is hereby declared to be affected with public interest. This chapter is enacted in the exercise of the police power of this state for the purpose of protecting the health, peace, safety, and general welfare of the people of this state.

65102.
 The commission form of administration created by this chapter is uniquely situated to provide those engaged in the cultivation, processing, manufacturing, distribution, testing, selling, and marketing of indoor-grown cannabis the opportunity to avail themselves of the benefits of collective action in the broad fields of cultivation, processing, manufacturing, distribution, testing, retail, research, quality and maturity standards, the collection, dissemination, and selling of crop volume and related statistics, and public education.

65103.
 (a) It shall be the policy of this state to preserve and encourage agricultural activities in the state, promote agricultural commodities produced and harvested in California, provide for research, governance, and accountability, including the ability for agriculture to act collectively, and to assess itself through the process of referendum.
(b) It shall be the policy of this state that the program authorized in this chapter shall engage in activities that are not more extensive in scope than is necessary to accomplish its purposes, and that the powers and duties of this program are designed to directly and materially advance the state’s interest in a stable, thriving agricultural industry. Further, this policy can be implemented most effectively by the collective actions authorized in this chapter while not preventing individuals from additionally engaging in self-study or individual activities that further themselves.

65104.
 No action taken by the commission, or by any person in accordance with this chapter or with rules or regulations adopted under this chapter, is a violation of the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), the Unfair Practices Act (Chapter 4 (commencing with Section 17000) of that Part 2), or any statutory or common law against monopolies or combinations in restraint of trade. Proof that any action complained of was done in compliance with this chapter shall be a complete defense to the action or proceeding.

65105.
 This chapter shall be liberally construed. If any provision of this chapter or the application thereof to any person or circumstances is held to be invalid, the invalidity shall not affect other provisions or applications of the chapter that can be given effect without the invalid provision or application, and to this end, the provisions of the chapter are severable.

65106.
 It is hereby declared as a matter of legislative determination that members of the commission are intended to represent and further the interests of the indoor-grown cannabis segment of the cannabis industry concerned and that this representation and furtherance is intended to serve the public interest. Accordingly, the Legislature finds that, with respect to persons who are elected or appointed to the commission, the particular agricultural industry concerned is tantamount to, and constitutes, the public generally within the meaning of Section 87103 of the Government Code.

Article  2. Definitions

65110.
 Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.

65111.
 “Books and records” mean books, records, contracts, documents, memoranda, papers, correspondence, or other written data pertaining to matters relating to the activities subject to the provisions of this chapter.

65112.
 “Bureau” means the Bureau of Cannabis Control.

65113.
 “Cannabis” means all parts of the plant Cannabis sativa Linnaeus, whether growing or not, the seeds thereof, the resin extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or its resin. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination.

65114.
 “Cannabis products” means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, edible, topical, or other product containing cannabis or concentrated cannabis and other ingredients.

65115.
 “Commission” means the Indoor-Grown Cannabis Commission.

65116.
 “Cultivator” means any person licensed to plant, grow, harvest, dry, cure, grade, or trim cannabis.

65117.
 “Department” means the Department of Food and Agriculture.

65118.
 “Ex officio member” means a nonvoting member of the commission board of directors.

65119.
 “Indoor-grown” means cultivation of cannabis within a permanent structure using exclusively artificial light or within any type of structure using artificial light at a rate above twenty-five watts per square foot.

65120.
 “License holder” means any individual or entity that has obtained a license from the state of California to engage in cannabis activities.

65121.
 “Manufacture” means to compound, blend, extract, infuse, or otherwise make or prepare a cannabis product. The term “manufacture” includes the extraction processes, infusion processes, packaging or repackaging of cannabis products, and labeling or relabeling the packages of cannabis products. The term “manufacture” does not include any of the following:
(a) The repacking of cannabis products from a bulk shipping container by a distributor or dispensary where the product’s original packaging and labeling is not otherwise altered.
(b) The placing of cannabis products into opaque packaging at a retail premises for purpose of complying with Section 26070.1 of the Business and Professions Code.
(c) The collection of the glandular trichomes that are dislodged from the cannabis plant incident to cultivation activities.

65122.
 “Manufacturing” or “manufacturing operation” means all aspects of the extraction processes, infusion processes, or both, including processing, preparing, holding, storing, packaging, or labeling of cannabis products. “Manufacturing” or “manufacturing operation” also includes any processing, preparing, holding, or storing of cannabis product components and ingredients.

65123.
 “Market” means to sell, barter, trade, purchase, acquire, or otherwise distribute cannabis or cannabis products.

65124.
 “Market development” includes, but is not limited to, trade, promotion, public education, dissemination of information on industry issues, and other matters, and activities for the prevention, modification, and removal of barriers that restrict the free flow of cannabis, indoor-grown cannabis, or cannabis products to market, and may include, but is not limited to, presentation of facts to local and state governmental agencies on matters that affect this chapter.

65125.
 “Marketing season” or “fiscal year” means one year designated for reporting or analysis, or both, of production.

65126.
 “Person” means an individual, partnership, corporation, limited liability company, or other business entity.

65127.
 “Process” means all activities associated with drying, curling, grading, trimming, storing, packaging, and labeling of nonmanufactured cannabis products.

65128.
 “Secretary” means the Secretary of Food and Agriculture.

65129.
 “Selling” means retail store front or delivery of cannabis.

65130.
 “Testing” means licensed by the state to test cannabis.

Article  3. The Indoor-Grown Cannabis Commission

65131.
 (a) There is in state government the Indoor-Grown Cannabis Commission. The commission board of directors shall be comprised of 21 total members, with 17 of the members being cultivators, three being state cannabis licenseholders, and one public member.
(b) The public member and his or her alternate shall be appointed to the commission board of directors by the secretary from nominees recommended by the commission board of directors.

65132.
 (a) The secretary may require the commission to correct or cease any existing activity or function that is determined by the secretary not to be in the public interest or that is in violation of this chapter.
(b) If the commission refuses or fails to cease those activities or functions or to make the corrections as required by the secretary, the secretary may, upon written notice, suspend all or a portion of the activities or functions of the commission until the time that the cessation or correction of activities or functions as required by the secretary has been accomplished by the commission.
(c) Actions of the commission in violation of the written notice are without legal force or effect. The secretary, to the extent feasible, shall issue the written notice prior to the commission entering into any contractual relationship affecting the existing or proposed activities or functions that are the subject of the written notice.
(d) Upon service of the written notice, the secretary shall notify the commission in writing of the specific acts that the secretary determines are not in the public interest or are in violation of this chapter, his or her reasons for requiring a cessation or correction of specific existing or proposed activities or functions, and recommendations that will make the activities or functions acceptable.

65133.
 The commission or the secretary may bring an action for judicial relief from the secretary’s written notice, or from noncompliance by the commission with the written notice, as the case may be, in a court of competent jurisdiction, that may issue a temporary restraining order, permanent injunction, or other applicable relief.

65134.
 When the secretary is required to concur in a decision of the commission, the secretary shall give his or her response to the commission within 15 working days from notification of the decision. The secretary’s response may be a requirement that additional information be provided.

65135.
 The commission shall reimburse the secretary for all reasonable expenditures incurred in carrying out his or her duties and responsibilities pursuant to this chapter. However, a court may, if it finds that the secretary acted arbitrarily or capriciously in restricting the activities or functions of the commission, relieve the commission of the responsibility for payment of the secretary’s legal costs with regard to that action.

65136.
 Each member of the commission, except the ex officio members, shall have an alternate member selected by the member, subject to approval by the commission. An alternate shall, in the absence of the member for whom he or she is an alternate, serve in place of the member and shall have and be able to exercise all the rights, privileges, and powers of the member when serving on the commission. In the event of a change in status making a member ineligible to serve, or due to death, removal, resignation, or disqualification, of a member, the alternate shall act as a member of the commission until a qualified successor is elected or appointed.

65137.
 Any individual serving as a cultivator member and his or her alternate member shall be a cultivator during the entire term of office. No more than one member and his or her alternate member shall be employed by, represent, or be connected in a proprietary capacity with the same cultivator. However, cultivator membership in an agricultural nonprofit cooperative association or trade organization shall not be considered employment or being in a proprietary capacity.

65138.
 Any individual or entity serving as a state cannabis license member must hold a license from the state of California to engage in cannabis activity. This section shall not prevent an individual or entity holding a cultivation license from serving as a state cannabis license member.

65139.
 The public member and his or her alternate member shall have all the rights, privileges, and powers of any other member of the commission. The public member shall not have be a licenseholder in the cannabis industry.

65140.
 The term of office of members and alternate members shall be for two years or until their successors have been elected and have qualified. However, of the first members of the commission, a portion of the cultivator members and their alternate members shall serve for one year so that the terms shall be staggered. The determination of the term of each member and his or her corresponding alternate member shall be made by lot. The commission may establish term limits for members and alternate members pursuant to procedures established by the commission and concurred in by the secretary.

65141.
 Not less than 11 voting members shall constitute a quorum of the commission.

65142.
 The vote of a majority of the members present at a meeting at which there is a quorum shall constitute an act of the commission.

65143.
 The commission shall be, and is hereby declared and created as, a corporate body. It shall have the power to sue and be sued, to contract and be contracted with, and to have and possess all the powers of a corporation. It may adopt a corporate seal. Copies of its proceedings, records, and acts, when authenticated, shall be admissible in evidence in all courts of the state and shall be prima facie evidence of the truth of all statements therein.

65144.
 The secretary or his or her representatives shall be notified and may attend meetings of the commission and any committee meetings of the commission.

65145.
 No member or alternate member of the commission, or member of a committee established by the commission who is not a member of the commission, shall receive a salary. Each member of the commission and any alternate member serving in place of his or her member, except ex officio members, and each member of a committee established by the commission who is not a member of the commission, shall receive necessary traveling expenses and meal allowances, as approved by the commission, and may receive an amount not to exceed one hundred dollars ($100) per day, as established by the commission. This amount shall be paid for each day spent in actual attendance at, or in traveling to and from, meetings of the commission or committees of the commission, or on assignment for the commission, as approved by the commission.

65146.
 All funds received by the assessments levied pursuant to this chapter or otherwise received by the commission shall be deposited in banks that the commission may designate and shall be disbursed by order of the commission through an agent or agents as it may designate. The agent or agents shall be bonded by a fidelity bond, executed by a surety company authorized to transact business in this state, in favor of the commission, in an amount of not less than twenty-five thousand dollars ($25,000).

65147.
 (a) The state is not liable for the acts of the commission or its contracts. Payments of all claims arising by reason of the administration of this chapter or acts of the commission are limited to the funds collected by the commission.
(b) No member, alternate member, employee, or agent of the commission is personally liable for the contracts of the commission or for errors in judgment, mistakes, or other acts, either of commission or omission, except for his or her own individual acts of dishonesty or crime. Liability is several and not joint, and no member, alternate member, or any employee or agent of the commission is liable individually for the default, act, or omission of any other member, alternate member, or any employee or agent of the commission.

Article  4. Powers and Duties

65150.
 The powers and duties of the commission shall include, but not be limited to, the following:
(a) Elect a chairperson and other officers as it may deem advisable, and delegate duties as may be advisable.
(b) Adopt and, from time to time, alter, rescind, modify, and amend all proper and necessary rules, procedures, and orders for the exercise of its powers and the performance of its duties, including rules of procedure for appeals from any rule, procedure, or order of the commission.
(c) Administer and enforce this chapter, and do and perform all acts and exercise all powers incidental to or in connection with or deemed reasonably necessary, proper, or advisable to effectuate the purposes of this chapter.
(d) Employ or retain a person to serve at the pleasure of the commission as president and chief executive officer of the commission, and other personnel, including private legal counsel of its choice, necessary to carry out this chapter. The commission may fix the compensation for all employees of the commission. The commission may retain a management firm or the staff from any board, commission, or committee of the state government to perform the functions prescribed by this section under the direction of the commission.
(e) Establish offices, incur expenses, and enter into any and all contracts and agreements, and create liabilities and borrow funds in advance or receipt of assessments as may be necessary, at the discretion of the commission, for the proper administration and enforcement of this chapter and the performance of its duties.
(f) Maintain accurate books, records, and accounts of all its dealings, which shall be subject to an annual audit by an auditing firm selected by the commission with the concurrence of the secretary. A summary of the audit shall be reported to all persons subject to this chapter, a copy of which shall also be submitted to the department. In addition, the secretary may, as he or she determines necessary, conduct or cause to be conducted a fiscal and compliance audit of the commission.
(g) Present facts to, and negotiate with, local and state agencies on matters affecting the cannabis and the indoor-grown cannabis industries.
(h) Appoint committees. A committee may be composed of both members and nonmembers of the commission.
(i) Assess and address the impact of local and state regulations on the cannabis and the indoor-grown cannabis industries.
(j) Educate and instruct the consuming public with respect to cannabis and indoor-grown cannabis, including, but not limited to, the uses, medicinal properties, and health value of these commodities, environmental protection and conservation issues relating to the production of cannabis, and legal marketing efforts.
(k) Educate and instruct the cultivation, processing, manufacturing, distribution, testing, and retail trades with respect to proper methods of cultivating, processing, manufacturing, distributing, marketing, and selling of cannabis and indoor-grown cannabis. Educate and provide information for merchandising cannabis and indoor-grown cannabis, providing displays and other promotional materials. Create education around packaging, labeling, and communication to consumers.
(l) Conduct market surveys and analysis. Assist local and state agencies addressing issues affecting market access, including, but not limited to, resolving phytosanitary issues, developing shipping protocols, and best practices for distribution.
(m) Conduct, and contract with others to conduct, scientific and other research, including the study, analysis, dissemination, and accumulation of information obtained from research or elsewhere respecting the cultivation, processing, manufacturing, distribution, testing, medicinal value, marketing, selling, and cultural practices relating to the cannabis industry.
(n) Undertake any other similar activities that the commission may determine appropriate for the maintenance and expansion of present markets and the creation of new and larger markets for cannabis and indoor-grown cannabis.
(o) Accept contributions of private, local, or state funds, and make contributions of commission funds, or match contributions, to other persons or to local or state agencies for purposes of promoting, enhancing, and maintaining the cannabis and indoor-grown cannabis industries.
(p) Cooperate with governmental or private entities in the resolution of emergencies arising in the cannabis industry and impacting the health and safety of the public or the continued stability of the cannabis industry.
(q) Collect information, including, but not limited to, about the cannabis industry, and publish and distribute, without charge, a bulletin or other communication to persons subject to this chapter.
(r) Establish an assessment rate to defray operating costs of the commission.
(s) Establish an annual budget according to generally accepted accounting practices. The budget shall be concurred in by the secretary before disbursement of funds, except for disbursements made for the payment of employees.
(t) Submit to the secretary for his or her concurrence an annual statement of contemplated activities authorized pursuant to this chapter.
(u) Keep confidential and not disclose, except when required by a court order after a hearing in a judicial proceeding involving this chapter, all information deemed proprietary or a trade secret by the commission. The commission shall establish procedures to provide cultivators access to communicate with other cultivators regarding noncommercial matters affecting the commission so long as the access does not directly or indirectly release proprietary or trade secret information in the possession of the commission.
(v) Investigate and prosecute civil violations of this chapter and file complaints with appropriate law enforcement agencies or officers for suspected criminal violations of this chapter.
(w) Administer any program of activities authorized by this chapter upon the request of an authorized agent of the program.

65151.
 (a) The commission may collect and disseminate, to any and all interested parties, market price information based on sales that have occurred in order to prevent unfair trade practices that are detrimental to the indoor-grown cannabis and cannabis products industries, including, but not limited to, deception and misinformation.
(b) The information reported under this section shall be kept confidential and shall not be made public under any circumstances. Only information that gives industry totals, averages, and other similar data in aggregate, nonindividualized form may be disclosed by the commission.
(c) The procedure for the collection and dissemination of information pursuant to this section shall be concurred in by the secretary.

Article  5. Referendum and Implementation

65160.
 (a) Within 90 days of the effective date of this chapter, the secretary shall establish a list of cultivators eligible to vote on implementation of this chapter.
(b) Any cultivator whose name does not appear on the appropriate list may have his or her name placed on the list by filing with the secretary a signed statement identifying himself or herself as a cultivator. Failure to be on the list does not exempt the person from paying assessments, and does not invalidate any industry votes conducted pursuant to this chapter.
(c) Proponents and opponents of the commission may contact cultivators on the lists in a form and manner prescribed by the secretary if all expenses associated with those contacts are paid in advance.

65161.
 In determining whether this chapter is approved by cultivators, the secretary shall find that at least 40 percent of the total number of cultivators from the list established by the secretary participated in the referendum, and that 65 percent or more of the cultivators who voted in the referendum voted in favor of this chapter.

65162.
 The secretary shall establish a period in which to conduct the referendum that shall not be less than 10 days nor more than 60 days in duration and may prescribe additional procedures to conduct the referendum. If the initial period established is less than 60 days, the secretary may extend the period. However, the total referendum period may not exceed 60 days.

65163.
 Nonreceipt of a ballot shall not invalidate the referendum.

65164.
 The secretary shall certify and give notice of a favorable vote to all cultivators whose names and addresses are on file with the secretary if he or she finds that a favorable vote has been given as provided in this chapter. The secretary shall certify and declare this chapter inoperative if he or she finds that a favorable vote has not been given as provided in this chapter.

65165.
 Upon certification of the commission, the secretary shall call meetings of cultivators for the purpose of nominating and electing the first members and alternate members of the commission, or in the alternative, may conduct the elections by mail ballot. All cultivators on the secretary’s list shall be given written notice of the election meetings at least 15 days before the meeting date, or reasonable notice of elections by mail ballot and a reasonable time period in which to return ballots.

65166.
 Subsequent to the first members and alternate members elected to the commission, persons to be elected and appointed to the commission shall be selected pursuant to the nomination and election procedures established by the commission with the concurrence of the secretary.

65167.
 (a) Before the implementation referendum conducted by the secretary, the proponents of the commission shall deposit with the secretary the amount that the secretary deems necessary to defray the expenses of creating the commission, including, but not limited to, preparing the necessary cultivator list and conducting the referendum.
(b) Any funds remaining after paying expenses shall be returned to the proponents of the commission who deposited the funds with the secretary.
(c) The commission may reimburse the proponents of the commission for any funds deposited with the secretary that were used in carrying out this article and for any legal or other professional fees and costs incurred in establishing the commission.

Article  6. Assessments and Records

65170.
 (a) The commission shall establish assessment rates for the marketing season for the administration and enforcement of this chapter, based on the licensing fees collected by the department in the administration of the regulated cannabis cultivation program.
(b) State licensing fees shall be adjusted based on the type and tier to include the cost of administration and enforcement of this chapter.

65171.
 Every cultivator shall keep complete and accurate records of indoor-grown cannabis produced and distributed. The records shall be in simple form and contain information as the commission shall prescribe. The records shall be preserved by cultivators for a period of seven years and shall be offered and submitted for inspection at any reasonable time upon demand of the commission or its duly authorized agent.

65172.
 (a) All proprietary and trade secret information obtained by the commission from cultivators shall be confidential and shall not be disclosed except when required by a court order after a hearing in a judicial proceeding involving this chapter.
(b) In addition, and notwithstanding any other provision of law, all proprietary or trade secret information developed or gathered pursuant to this chapter by the commission, or by the department on behalf of the commission, from any source is confidential, shall not be considered a public record as that term is defined in Section 6252 of the Government Code, and shall not be disclosed by the commission or the secretary except when required by a court order after a hearing in a judicial proceeding involving this chapter.
(c) Information on volume shipments, crop value, and any other related information that is required for reports to governmental agencies, financial reports to the commission, or aggregate sales and inventory information, and other information that give only totals, but excludes individual information, may be disclosed by the commission.
(d) The commission shall determine whether information is proprietary or a trade secret and not subject to disclosure. If the commission denies a request for disclosure of this information, the commission shall provide written justification for its decision to the person requesting the information, who may appeal the decision of the commission to the secretary.

Article  7. Violations

65180.
 It is unlawful for any person to do any of the following:
(a) Willfully render or furnish a false report, statement, or record required by the commission or in any way to affect the cultivation, processing, manufacturing, distribution, testing, sales, marketing, or receipt of indoor-grown cannabis with the intent to avoid payments to the state.
(b) Fail to render or furnish a report, statement, or record required by the commission.
(c) When engaged in the cultivation, processing, manufacturing, distribution, sales, or other activities related to indoor-grown cannabis, fail or refuse to furnish the commission, or its duly authorized agents, information concerning the names and addresses of the persons to whom indoor-grown cannabis was delivered or from whom indoor-grown cannabis has been received, and the quantity delivered or received.
(d) Secrete, destroy, or alter records required to be maintained under this chapter.

65181.
 The commission shall establish procedures for the purpose of according individuals aggrieved by its action or determinations an informal hearing before the commission, or before a committee of the commission designated for that purpose. Appeals from decisions of the commission may be made to the secretary. The determination of the secretary shall be subject to judicial review upon petition filed with the appropriate superior court.

65182.
 (a) The commission may commence civil action and use all remedies provided in law or equity for the enforcement of this chapter, including, but not limited to, the collection of assessments, penalties, and interest, and for obtaining injunctive relief or specific performance regarding this chapter and the procedures adopted pursuant to this chapter. A court shall issue to the commission any requested writ of attachment or injunctive relief upon a prima facie showing by verified complaint that a named defendant has violated this chapter or any other procedure of the commission, including, but not limited to, the nonpayment of assessments. No bond shall be required to be posted by the commission as a condition for the issuance of any writ of attachment or injunctive relief.
(b) A writ of attachment shall be issued pursuant to Chapter 4 (commencing with Section 484.010) of Title 6.5 of Part 2 of the Code of Civil Procedure, except that the showing specified in Section 485.010 of the Code of Civil Procedure is not required. Injunctive relief shall be issued pursuant to Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure, except that the showing of irreparable harm or inadequate remedy at law specified in Sections 526 and 527 of the Code of Civil Procedure is not required.
(c) Upon entry of any final judgment on behalf of the commission against any defendant, the court shall enjoin the defendant from conducting any type of business regarding cannabis or indoor-grown cannabis until there is full compliance with and satisfaction of the judgment.
(d) Upon a favorable judgment for the commission, it shall be entitled to receive reimbursement for any reasonable attorney’s fees and other actual related costs. Venue for these actions may be established at the domicile or place of business of the defendant or in the county of the principal office of the commission. The commission may be sued only in the county of its principal office.

65183.
 Any action by the commission for any violation of this chapter shall be commenced within three years from the date of discovery of the alleged violation. Any action against the commission by any person shall be commenced within three years from the date of the act of which the person complains.

65184.
 The termination of this chapter shall not affect or waive any right, duty, obligation, or liability that has arisen or that may thereafter arise in connection with this chapter, release or extinguish any violation of this chapter, or affect or impair any right or remedies of the commission with respect to any violation.

Article  8. Continuation or Suspension and Termination

65190.
 Every five years, commencing with the 2024 marketing season, the secretary shall hold a hearing to determine whether the operation of this chapter should be continued. If the secretary finds, after the hearing, that a substantial question exists among eligible persons regarding whether the operation of this chapter should be continued, the secretary shall submit the chapter to a reapproval referendum. If a reapproval referendum is required, the operation of this chapter shall continue in effect if the secretary finds that a majority of the eligible cultivators voting in the referendum voted in favor of continuing this chapter. In finding whether the commission is continued pursuant to this article, the vote of any nonprofit agricultural cooperative marketing association that is authorized by its members to so vote shall be considered to be the approval or rejection by the individual members thereof, or the individual stockholders therein. No bond or security shall be required for any referendum required by this chapter; however, this shall not apply to the advance deposit of funds required by the department to cover the actual cost of a referendum.

65191.
 If the secretary finds, after conducting a hearing pursuant to Section 65090, that no substantial question exists, or that a favorable vote has been given after a referendum, the secretary shall so certify and this chapter shall remain operative. If the secretary finds that a favorable vote has not been given after a referendum vote, he or she shall so certify and declare the operation of this chapter and the commission suspended upon the expiration of the then-current marketing season. Thereupon, the operations of the committee shall be wound up and concluded and funds distributed in the manner provided in Section 65093.

65192.
 (a) Upon a finding by a two-thirds vote of the commission that this chapter has not tended to effectuate its declared purpose, the commission may recommend to the secretary that this chapter be suspended. However, any suspension shall not become effective until the expiration of the then-current marketing season.
(b) Alternatively, the secretary may be petitioned to suspend this chapter. The petition must be signed by not less than 2 percent of the cultivators, by number, who hold licenses to cultivate indoor-grown cannabis in the immediately preceding marketing season.
(c) The secretary shall, upon receipt of the recommendation to suspend this chapter from the commission, and may, after holding a hearing on the petition to suspend this chapter, hold a referendum among the cultivators to determine if the commission shall be suspended. However, the secretary shall not hold a referendum as a result of the petition unless the petitioner shows by a preponderance of the evidence that this chapter has not tended to effectuate its declared purposes.
(d) The secretary shall establish a referendum period that shall not be less than 10 days nor more than 60 days in duration. The secretary may prescribe additional procedures as may be necessary to conduct the referendum. At the close of the referendum period, the secretary shall tabulate the ballots filed during the period. If at least 40 percent of the total number of cultivators from the lists established by the secretary participate in the referendum, the secretary shall suspend this chapter if he or she finds either of the following has occurred:
(1) Sixty-five percent or more of the cultivators who voted in the referendum voted in favor of suspension.
(2) The cultivators who voted in the referendum marketed 65 percent or more of the total quantity of indoor-grown cannabis marketed in the preceding marketing season by all of the cultivators who voted in the referendum.

65193.
 After the effective date of suspension of this chapter, the operation of the commission shall be wound up and concluded and all moneys held by the commission not required to defray the expenses of concluding and terminating the operations of the committee shall be returned on a pro rata basis to all persons from whom assessments were collected in the immediately preceding marketing season. However, if the commission finds that the amounts returnable are such that it would be impractical or administratively burdensome to calculate and refund the moneys to the assessment payers, any funds remaining after payment of all expenses of winding up and terminating operations shall be withdrawn from the approved depository and paid to another program conducted or used to fund activities related to the subject matter of this chapter.

65194.
 Upon suspension of this chapter, the commission shall mail a copy of the notice of suspension to all cultivators affected by the suspension whose names and addresses are on file.

SEC. 3.SEC. 4.

 The Legislature finds and declares that Section 1 of this act amending Section 26061 of the Business and Professions Code implements substantive provisions of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 and is consistent with, and furthers the purposes and intent of, that act.

SEC. 4.SEC. 5.

 The Legislature finds and declares that Section 2 of this act, which adds Sections 65050, 65051, and 65072 to the Food and Agricultural Code, and Section 3 of this act, which adds Sections 65150, 65151, and 65172 to the Food and Agricultural Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
In order to protect the private, confidential, proprietary, or trade secret information of a person subject to this act, it is necessary that this act limit the public’s right of access to that information.