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AB-2866 Cannabis regulation.(2017-2018)

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Date Published: 04/20/2018 04:00 AM
AB2866:v96#DOCUMENT

Amended  IN  Assembly  April 19, 2018
Amended  IN  Assembly  April 04, 2018
Amended  IN  Assembly  March 23, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2866


Introduced by Assembly Member Cooper

February 16, 2018


An act to amend Section 26151 of the Business and Professions Code, and to amend Section 11366.5 of the Health and Safety Code, relating to cannabis, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 2866, as amended, Cooper. Cannabis regulation.
(1) The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA), an initiative statute 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. AUMA authorizes legislative amendment of its provisions with a 2/3 vote of both houses, without submission to the voters, to further its purposes and intent.
Existing law, as part of AUMA, requires all advertisements and marketing relating to the sale of cannabis or cannabis products, as specified, to accurately and legibly identify the licensee responsible for its content, by adding, at a minimum, the licensee’s license number.
This bill would make a violation of that provision requirement by a cannabis-related business licensee, or by a licensed or unlicensed cannabis-related business using a fictitious license number, subject to a civil penalty of $10,000 per incident. incident, but would require a business to be provided 48 hours to correct its first violation prior to being subject to the civil penalty. The bill would continuously appropriate the funds from these civil penalties to the Department of Justice Board of State and Community Corrections to provide grants to cities, counties, and cities and counties to fund cannabis control officers, as provided, thereby making an appropriation. The bill would declare that these provisions further the purposes and intent of AUMA.
(2) Existing law prohibits a person who has under his or her management or control any building, room, space, or enclosure, either as an owner, lessee, agent, employee, or mortgagee, from knowingly renting, leasing, or making available for use, with or without compensation, the building, room, space, or enclosure for the purpose of unlawfully manufacturing, storing, or distributing any controlled substance for sale or distribution, punishable by imprisonment in a county jail for not more than one year, or by imprisonment in a county jail for 16 months, or 2 or 3 years. Under existing law, cannabis is a Schedule I controlled substance.

This bill would require, in the case of cannabis, a person who commits the above-described offense and who obtains excessive profits, as defined, from the use of the building, room, space, or enclosure to be punished by imprisonment in a county jail for 2, 3, or 4 years. By creating a new crime, the bill would impose a state-mandated local program.

Except as provided by law, existing law makes it a crime to transport, import, sell, furnish, administer, or give away any cannabis. Existing law makes all moneys, negotiable instruments, or securities used or intended to be used to facilitate a violation of this provision subject to forfeiture.
This bill would, in addition to any other penalty, if the controlled substance is cannabis that is being sold or distributed in violation of state or local law, require that any excessive profits, as defined, obtained from the use of a building, room, space, or enclosure in violation of the above specified law, be subject to seizure. The bill would appropriate funds seized to the Board of State and Community Corrections to provide grants to cities, counties, and cities and counties to fund cannabis control officers, as provided, thereby making an appropriation. By increasing the punishment for a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 26151 of the Business and Professions Code is amended to read:

26151.
 (a) (1) All advertisements and marketing shall accurately and legibly identify the licensee responsible for its content, by adding, at a minimum, the licensee’s legitimate active license number.
(2) A technology platform shall not display an advertisement by a licensee on an Internet Web page unless the advertisement displays the license number of the licensee.
(3) An outdoor advertising company subject to the Outdoor Advertising Act (Chapter 2 (commencing with Section 5200) of Division 3) shall not display an advertisement by a licensee unless the advertisement displays the license number of the licensee.
(b) Any advertising or marketing placed in broadcast, cable, radio, print, and digital communications shall only be displayed where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older, as determined by reliable, up-to-date audience composition data.
(c) Any advertising or marketing involving direct, individualized communication or dialogue controlled by the licensee shall utilize a method of age affirmation to verify that the recipient is 21 years of age or older before engaging in that communication or dialogue controlled by the licensee. For purposes of this section, that method of age affirmation may include user confirmation, birth date disclosure, or other similar registration method.
(d) All advertising shall be truthful and appropriately substantiated.
(e) (1) A violation of paragraph (1) of subdivision (a) by a cannabis-related business licensee, or by a licensed or unlicensed cannabis-related business using a fictitious license number, that has entered into an agreement for advertisement or marketing, is subject to a civil penalty of ten thousand dollars ($10,000) per incident. incident, except that a business shall be provided 48 hours to correct its first violation prior to being made subject to the civil penalty. This subdivision does not apply to a cannabis-related business licensee using a suspended or expired license number that is otherwise legitimate. This subdivision applies to all licensees specified in Section 26050.
(2) Notwithstanding subdivision (b) of Section 26038, all civil fines collected pursuant to paragraph (1) are hereby continuously appropriated to the Department of Justice Board of State and Community Corrections to provide grants to cities, counties, and cities and counties to fund cannabis control officers. Funds shall be made available by the department board upon application by a city, county, or city and county, subject to the following:
(A) The city, county, or city and county shall have an ordinance allowing cannabis businesses to operate within its jurisdiction.
(B) There shall be an active cannabis business either operating within the jurisdiction or a cannabis business with a license application currently pending within the jurisdiction. The department may approve a grant before a cannabis business is active, but shall not release the funding until the cannabis business is operating.
(C) Cities, counties, or cities and counties that enact an ordinance allowing cannabis businesses after January 1, 2019, shall have priority for funding.

SEC. 2.

 Section 11366.5 of the Health and Safety Code is amended to read:

11366.5.
 (a) Any person who has under his or her management or control any building, room, space, or enclosure, either as an owner, lessee, agent, employee, or mortgagee, who knowingly rents, leases, or makes available for use, with or without compensation, the building, room, space, or enclosure for the purpose of unlawfully manufacturing, storing, or distributing any controlled substance for sale or distribution shall be punished by imprisonment in the county jail for not more than one year, or pursuant to subdivision (h) of Section 1170 of the Penal Code.
(b) Any person who has under his or her management or control any building, room, space, or enclosure, either as an owner, lessee, agent, employee, or mortgagee, who knowingly allows the building, room, space, or enclosure to be fortified to suppress law enforcement entry in order to further the sale of any amount of cocaine base as specified in paragraph (1) of subdivision (f) of Section 11054, cocaine as specified in paragraph (6) of subdivision (b) of Section 11055, heroin, phencyclidine, amphetamine, methamphetamine, or lysergic acid diethylamide and who obtains excessive profits from the use of the building, room, space, or enclosure shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years.
(c) Any person who violates subdivision (a) after previously being convicted of a violation of subdivision (a) shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years.

(d)If the controlled substance described in subdivision (a) is cannabis, any person who violates subdivision (a) and who obtains excessive profits from the use of the building, room, space, or enclosure shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years.

(d) If the controlled substance described in subdivision (a) is cannabis that is being sold or distributed in violation of state or local law, in addition to any other penalties, any excessive profits obtained from the use of the building, room, space, or enclosure in violation of subdivision (a) shall be subject to seizure and the funds seized shall be appropriated to the Board of State and Community Corrections to provide grants to cities, counties, and cities and counties to fund cannabis control officers as specified in subdivision (e) of Section 26151 of the Business and Professions Code.
(e) For the purposes of this section, “excessive profits” means the receipt of consideration of a value substantially higher than fair market value.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SEC. 4.

 The Legislature finds and declares that Section 1 of this act furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.