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AB-1461 Cannabis: testing laboratories.(2019-2020)

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Date Published: 04/22/2019 09:00 PM
AB1461:v97#DOCUMENT

Amended  IN  Assembly  April 22, 2019
Amended  IN  Assembly  March 28, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1461

Introduced by Assembly Member Quirk

February 22, 2019

An act to amend Sections 26104 and 26110 of the Business and Professions Code, relating to cannabis.


LEGISLATIVE COUNSEL'S DIGEST


AB 1461, as amended, Quirk. Cannabis: testing laboratories.
Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which includes the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative statute enacted by the voters at the November 8, 2016, statewide general election, provides for the licensure and regulation of commercial cannabis activity, including testing laboratories. Existing law prohibits the sale of cannabis or cannabis products unless a representative sample of the cannabis or cannabis product has been tested by a testing laboratory. Existing law requires a licensed distributor to store cannabis or cannabis product prior to and during testing by a licensed testing laboratory and, if the batch passes testing, to conduct a quality assurance review before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of the act.
This bill would amend AUMA by authorizing a manufacturer to arrange for a licensed testing laboratory to obtain a representative sample of each cannabis batch at the manufacturer’s licensed premises and, after receiving the certificate of analysis by the testing laboratory that the cannabis batch has passed the testing requirements, to perform the quality assurance review. The bill would require a licensed manufacturer who has the testing conducted and who conducts the quality assurance review to certify to a distributor that those actions have been taken and would authorize a distributor to rely on that certification and not perform the testing and quality assurance review. The bill would also require the bureau to adopt regulations to establish a process to test samples of random batches of cannabis or cannabis products that had testing and quality assurance performed at the licensed premises of the manufacturer to determine whether the product conforms with the certificate analysis provided to the distributor.
AUMA authorizes the Legislature to amend the act to further the purposes and intent of the act with a 2/3 vote of the membership of each house of the Legislature.
This bill would declare that its provisions further specified purposes and intent of AUMA.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 26104 of the Business and Professions Code is amended to read:

26104.
 (a) A licensed testing laboratory shall, in performing activities concerning cannabis and cannabis products, comply with the requirements and restrictions set forth in applicable law and regulations.
(b) The bureau shall develop procedures to do all of the following:
(1) Ensure that testing of cannabis and cannabis products occurs prior to distribution to retailers, microbusinesses, or nonprofits licensed under Section 26070.5.
(2) Specify how often licensees shall test cannabis and cannabis products, and that the cost of testing cannabis shall be borne by the licensed cultivators and the cost of testing cannabis products shall be borne by the licensed manufacturer, and that the costs of testing cannabis and cannabis products shall be borne by a nonprofit licensed under Section 26070.5.
(3) Require destruction of harvested batches whose testing samples indicate noncompliance with health and safety standards required by the bureau, unless remedial measures can bring the cannabis or cannabis products into compliance with quality assurance standards as specified by law and implemented by the bureau.
(4) Ensure that a testing laboratory employee takes the sample of cannabis or cannabis products from the distributor’s or manufacturer’s premises for testing required by this division and that the testing laboratory employee transports the sample to the testing laboratory.
(c) Except as provided in this division, a testing laboratory shall not acquire or receive cannabis or cannabis products except from a licensee in accordance with this division, and shall not distribute, sell, or dispense cannabis or cannabis products, from the licensed premises from which the cannabis or cannabis products were acquired or received. All transfer or transportation shall be performed pursuant to a specified chain of custody protocol.
(d) A testing laboratory may receive and test samples of cannabis or cannabis products from a qualified patient or primary caregiver with a valid physician’s recommendation for cannabis for medicinal purposes. A testing laboratory shall not certify samples from a qualified patient or primary caregiver for resale or transfer to another person or licensee. All tests performed by a testing laboratory for a qualified patient or primary caregiver shall be recorded with the name of the qualified patient or primary caregiver and the amount of cannabis or cannabis product received.
(e) A testing laboratory may receive and test samples of cannabis or cannabis products from a person over 21 years of age when the cannabis has been grown by that person and will be used solely for that person’s personal use, as authorized pursuant to Section 11362.1 of the Health and Safety Code. A testing laboratory shall not certify samples from the person over 21 years of age for resale or transfer to another person or licensee. All tests recorded pursuant to this subdivision shall be recorded with the name of the person submitting the sample and the amount of cannabis or cannabis product received.

SEC. 2.

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

26110.
 (a) Cannabis batches are subject to quality assurance and testing prior to sale at a retailer, microbusiness, or nonprofit licensed under Section 26070.5, except for immature cannabis plants and seeds, as provided for in this division.
(b) A licensee that holds a valid distributor license may act as the distributor for the licensee’s cannabis and cannabis products.
(c) The distributor shall store, as determined by the bureau, the cannabis batches on the premises of the distributor before testing and continuously until either of the following occurs:
(1) The cannabis batch passes the testing requirements pursuant to this division and is transported to a licensed retailer or to another licensed distributor.
(2) The cannabis batch fails the testing requirements pursuant to this division and is destroyed or transported to a manufacturer for remediation as allowed by the bureau or the State Department of Public Health.
(d) The distributor shall arrange for a testing laboratory to obtain a representative sample of each cannabis batch at the distributor’s licensed premises. After obtaining the sample, the testing laboratory representative shall maintain custody of the sample and transport it to the testing laboratory.
(e) Upon issuance of a certificate of analysis by the testing laboratory that the cannabis batch has passed the testing requirements pursuant to this division, the distributor shall conduct a quality assurance review before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division.
(f) (1) There shall be a quality assurance compliance monitor who is an employee or contractor of the bureau and who shall not hold a license in any category or own or have an ownership interest in a licensee or the premises of a licensee.
(2) The quality assurance compliance monitor shall conduct random quality assurance reviews at a distributor’s licensed premises before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division.
(3) The quality assurance compliance monitor shall have access to all records and test results required of a licensee by law in order to conduct quality assurance analysis and to confirm test results. All records of inspection and verification by the quality assurance compliance monitor shall be provided to the bureau. Failure to comply shall be noted by the quality assurance compliance monitor for further investigation. Violations shall be reported to the bureau. The quality assurance compliance monitor shall also verify the tax payments collected and paid under Sections 34011 and 34012 of the Revenue and Taxation Code are accurate. The monitor shall also have access to the inputs and assumptions in the track and trace system and shall be able to verify their accuracy and that they are commensurate with the tax payments.
(g) After testing, all cannabis and cannabis products fit for sale may be transported only from the distributor’s premises to the premises of another licensed distributor for further distribution, or to a licensed retailer, microbusiness, or nonprofit for retail sale.
(h) A licensee is not required to sell cannabis or cannabis products to a distributor and may directly contract for sale with a licensee authorized to sell cannabis and cannabis products to purchasers.
(i) A distributor performing services pursuant to this section may collect a fee from the licensee for the services provided. The fee may include, but is not limited to, the costs incurred for laboratory testing. A distributor may also collect applicable state or local taxes and fees.
(j) (1) A manufacturer may arrange for a licensed testing laboratory to obtain a representative sample of each cannabis batch at the manufacturer’s licensed premises and, after receiving the certificate of analysis by the testing laboratory that the cannabis batch has passed the testing requirements, may perform the quality assurance review required pursuant to subdivision (e). If a manufacturer arranges for testing and performs the quality assurance review pursuant to this subdivision, the manufacturer shall certify to a distributor that later takes charge of the cannabis or cannabis product that testing and quality assurance have been performed. Upon receiving that certification, the distributor may rely on that certification and not perform the testing and quality assurance required by this section.
(2) The bureau shall adopt regulations to establish a process authorizing testing of random batches of cannabis or cannabis products that have had testing and quality assurance performed pursuant to paragraph (1). Testing samples shall be collected at the licensed premises of the distributor. Testing shall be conducted by the same testing laboratory that issued the certificate of analysis to the manufacturer and only to determine whether the product conforms with the certificate of analysis provided to the distributor.
(k) This section does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality assurance of the product in conjunction with reasonable business operations. The testing conducted on the licensee’s premises by the licensee does not meet the testing requirements pursuant to this division.

SEC. 3.

 The Legislature finds and declares that this act furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016.