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AB-1014 Cannabis: retailers: delivery: vehicles.(2021-2022)

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Date Published: 01/21/2022 12:16 PM
AB1014:v98#DOCUMENT

Amended  IN  Assembly  January 24, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1014


Introduced by Assembly Member McCarty

February 18, 2021


An act to amend Section 26068 of, and to add Sections 26090.1, 26090.2, and 26090.3 to Section 26090.1 to, the Business and Professions Code, relating to cannabis.


LEGISLATIVE COUNSEL'S DIGEST


AB 1014, as amended, McCarty. Cannabis: retailers: delivery: vehicles.
The Control, Regulate and Tax Adult Use of Marijuana Act (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. 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. MAUCRSA generally defines delivery to mean the commercial transfer of cannabis or cannabis products to a customer, limits requires the delivery of cannabis or cannabis products to only be made only by a licensed retailer, microbusiness, or nonprofit, and establishes requirements for the delivery of cannabis and cannabis products, including that an employee of the licensee carry a copy of the licensee’s current license and a government-issued identification with a photo of the employee, such as a driver’s license.
MAUCRSA establishes the Department of Cannabis Control for the administration and enforcement of its provisions. MAUCRSA requires the department to establish a track and trace program for reporting the movement of cannabis and cannabis products throughout the distribution chain that utilizes a unique identifier and is capable of providing specified information. MAUCRSA requires the track and trace program to include an electronic seed to sale software tracking system with data points for the different stages of commercial activity, including, but not limited to, cultivation, harvest, processing, manufacturing, distribution, inventory, and sale.
This bill would also require the electronic seed to sale software tracking system to include delivery.
MAUCRSA also requires the Bureau of Cannabis Control department to establish minimum security and transportation safety requirements for the delivery of cannabis and cannabis products. Under existing administrative law, among other requirements, a licensed retailer’s delivery employee that is carrying cannabis goods for delivery is only allowed to travel in an enclosed motor vehicle. Under existing administrative law, among other requirements, a licensed retailer’s delivery employee is prohibited from carrying cannabis goods in the delivery vehicle with a value in excess of $5,000 at any time and the value of cannabis goods carried in the delivery vehicle for which a delivery order was not received and processed by the licensed retailer prior to the delivery employee departing from the licensed premises may not exceed $3,000.
This bill would require, on or before January 1, 2023, the regulations established by the bureau regarding the minimum security and transportation safety requirements to include regulations that would allow for different value tiers an increase in the value of cannabis goods to be carried during delivery of those cannabis goods to customers by employees of a licensed retailer based on the type of vehicle used for the delivery. The bill would require, on or before January 1, 2023, the bureau, in coordination with the Department of the California Highway Patrol, to develop transportation safety standards for all the different value tiers of cannabis goods carried during delivery to customers by employees of a licensed retailer based on the type of vehicle used for the delivery, as specified, and to develop a standardized inspection and certification process for each delivery vehicle based on the transportation safety standards developed pursuant to the bill, including the form of the certifications, to be implemented on and after January 1, 2024. retailer to $10,000, as specified. The bill would require a licensed retailer to provide their delivery employee certain hardware, tools, and supplies, access to healthcare benefits, and either a vehicle that meets certain requirements or reimbursement for certain costs for the use of the employee’s vehicle, as specified. The bill would also require a licensed retailer to maintain an automobile insurance policy to cover third-party liability of deliveries of cannabis goods by an employee who uses their own vehicle for the deliveries, as specified.

Under existing administrative law, a delivery employee of a licensed retailer may only carry cannabis goods in the delivery vehicle and may only perform deliveries for one licensed retailer at a time. Existing administrative law also requires a delivery employee of a licensed retailer to depart and return to the same licensed premises before taking possession of any cannabis goods from another licensee to perform deliveries.

This bill would codify those administrative law provisions.

The Control, Regulate and Tax Adult Use of Marijuana Act 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 both houses of the Legislature.
This bill would declare that its provisions further specified purposes and intent of the act.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Fifty-four percent of California’s legal adult-use cannabis consumers utilize delivery as their only option for purchasing cannabis goods in the state.
(b) For medical users, delivery offers greater patient access to medical cannabis goods for those who are unable to travel to a retailer.
(c) The net impact of delivery reduces traffic given that drivers take multiple orders on each trip, reducing individual trips to retailers by consumers.
(d) The illicit market, subjecting Californians to untested cannabis goods, is found to be three times the size of the regulated markets according to a 2019 audit.
(e) Over 75 percent of illicit market retailers are delivery operations, thereby making it very difficult for local and state enforcement officers to track them down.
(f) The organized and established illicit market delivery operators are carrying cannabis goods inventory valued at over $25,000 in each unregulated vehicle to speed their deliveries, thus creating a major competitive disadvantage for the licensed operators that are subjected to the $3,000 to $5,000 inventory limitations on their regulated vehicles.
(g) To take cannabis production and sales out of the hands of the illegal market and bring them under the regulatory structure that prevents access by minors and protects public safety, public health, and the environment, it is necessary to increase the value of cannabis goods to be carried by delivery employees of licensees and to enact additional safeguards and requirements to ensure the safe operation of those employees.

SEC. 2.

 Section 26068 of the Business and Professions Code is amended to read:

26068.
 (a) The department, in consultation with the California Department of Tax and Fee Administration, shall ensure that the track and trace program can also track and trace the amount of the cultivation tax due pursuant to Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code. The track and trace program shall include an electronic seed to sale software tracking system with data points for the different stages of commercial activity, including, but not limited to, cultivation, harvest, processing, manufacturing, distribution, inventory, and sale. sale, and delivery.
(b) The department shall ensure that licensees under this division are allowed to use third-party applications, programs, and information technology systems to comply with the requirements of the expanded track and trace program described in subdivision (a) to report the movement of cannabis and cannabis products throughout the distribution chain and communicate the information to licensing agencies as required by law.
(c) Any software, database, or other information technology system utilized by the department to implement the expanded track and trace program shall support interoperability with third-party cannabis business software applications and allow all licensee-facing system activities to be performed through a secure application programming interface (API) or comparable technology that is well documented, bi-directional, and accessible to any third-party application that has been validated and has appropriate credentials. The API or comparable technology shall have version control and provide adequate notice of updates to third-party applications. The system should provide a test environment for third-party applications to access that mirrors the production environment.

SEC. 2.SEC. 3.

 Section 26090.1 is added to the Business and Professions Code, to read:

26090.1.
 (a) On or before January 1, 2023, the regulations established by the bureau pursuant to Section 26070 regarding the minimum security and transportation safety requirements shall include regulations consistent with this section that would allow for different value tiers an increase in the value of cannabis goods to be carried during delivery of those cannabis goods to customers by employees of a licensed retailer based on the type of vehicle used for the delivery. retailer, pursuant to subdivision (b).

(b)The different value tiers shall be based on the following vehicle types and requirements:

(1)For cars, the maximum value of cannabis goods that can be carried during delivery of those cannabis goods to customers by an employee of a licensed retailer in each car is fifteen thousand dollars ($15,000). The value of cannabis goods carried in any car for which a delivery order was not received and processed by the licensed retailer prior to the delivery employee departing from the licensed premise may not exceed ten thousand dollars ($10,000).

(2)For cargo vans, the maximum value of cannabis goods that can be carried during delivery of those cannabis goods to customers by an employee of a licensed retailer in each cargo van is twenty-five thousand dollars ($25,000). The value of cannabis goods carried in any cargo van for which a delivery order was not received and processed by the licensed retailer prior to the delivery employee departing from the licensed premise may not exceed seventeen thousand dollars ($17,000).

(b) The maximum value of cannabis goods that can be carried during delivery of those cannabis goods by an employee of a licensed retailer in a vehicle is ten thousand dollars ($10,000). The maximum value of cannabis goods carried during delivery pursuant to this section may include any of the following:
(1) Cannabis goods for which a delivery order was received and processed by the licensed retailer prior to the delivery employee departing from the licensed premise.
(2) Cannabis goods for which a delivery order was not received and processed by the licensed retailer prior to the delivery employee departing from the licensed premise.
(3) A combination of cannabis goods described in paragraphs (1) and (2).
(c) The value of the cannabis goods shall be determined using the current retail price of all cannabis goods carried by, or within the delivery vehicle of, the licensed retailer’s delivery employee.
(d) (1) A licensed retailer shall provide their delivery employee all required hardware, tools, and supplies, including, but not limited to, a dedicated GPS monitoring device, a secured case to hold cannabis products while on delivery, a method to lock the case to the interior of vehicle, and a dashboard camera if required by local ordinance or regulation.
(2) If a delivery employee uses their own vehicle for the delivery of cannabis goods, the employing licensed retailer shall reimburse the employee for all legally required costs associated with conducting business with that vehicle under state and federal law.
(3) If a licensed retailer provides vehicle to their employee for delivery of cannabis goods, the vehicle shall meet the following requirements:
(A) The vehicle is less than 10 model years old.
(B) The vehicle is in good working condition and has an up-to-date registration with the Department of Motor Vehicles to operate the vehicle with a clean title.
(C) The vehicle has no outstanding vehicle recalls, no major cracks or obstructions in its windshields, and has working headlights, taillights, and other required safety features.
(4) A licensed retailer shall provide access to healthcare benefits for all full-time employees by providing a subsidy to allow employees to purchase health insurance through Covered California, access to group health insurance policies, or other methods.
(5) A licensed retailer shall maintain a hired and nonowned automobile insurance policy with a minimum limit of one million dollars ($1,000,000) per incident to cover third-party liability of deliveries of cannabis goods on the licensee’s behalf by an employee who use their own vehicle for the deliveries.

(d)

(e) For purposes of this section, both of the following definitions shall apply:
(1) “Cannabis goods” means cannabis, cannabis products, or both.
(2) “Covered California” means the California Health Benefit Exchange, codified in Title 22 (commencing with Section 100500) of the Government Code.

(2)

(3) “Licensed retailer” means a licensee that has been issued a retail license pursuant to this division, including a retailer, microbusiness, or nonprofit.

SEC. 3.Section 26090.2 is added to the Business and Professions Code, to read:
26090.2.

(a)On or before January 1, 2023, the bureau, in coordination with the Department of the California Highway Patrol, shall develop transportation safety standards for all the different value tiers of cannabis goods carried during delivery to customers by employees of a licensed retailer based on the type of vehicle used for the delivery, as specified in Section 26090.1, consistent with this section.

(b)The transportation safety standards shall include, but are not limited to, the following:

(1)Qualifications for persons eligible to operate vehicles, including, but not limited to, the following:

(A)Minimum age.

(B)Established employment with a licensed retailer.

(2)Security features required for each vehicle type, which may include, but are not limited to, the following:

(A)Inventory security, such as lockboxes or compartments.

(B)Security video or surveillance requirements.

(C)Identity verification requirements for customer delivery.

(D)Global Positioning System (GPS) tracking.

(E)Identification requirements for vehicles that connect with a retailer’s license, such as ensuring drivers have information to provide law enforcement to show the vehicle is a delivery vehicle of a licensed retailer.

(c)The bureau shall develop a standardized inspection and certification process for each delivery vehicle of a licensed retailer based on the transportation safety standards developed pursuant to this section, including the form of the certifications, to be implemented on and after January 1, 2024.

(d)For purposes of this section, both of the following definitions shall apply:

(1)“Cannabis goods” means cannabis, cannabis products, or both.

(2)“Licensed retailer” means a licensee that has been issued a retail license pursuant to this division, including a retailer, microbusiness, or nonprofit.

SEC. 4.Section 26090.3 is added to the Business and Professions Code, to read:
26090.3.

(a)A delivery employee of a licensed retailer shall only carry cannabis goods in the delivery vehicle and shall only perform deliveries for one licensed retailer at a time. A delivery employee of a licensed retailer shall depart and return to the same licensed premises before taking possession of any cannabis goods from another licensee to perform deliveries.

(b)For purposes of this section, both of the following definitions shall apply:

(1)“Cannabis goods” means cannabis, cannabis products, or both.

(2)“Licensed retailer” means a licensee that has been issued a retail license pursuant to this division, including a retailer, microbusiness, or nonprofit.

SEC. 5.SEC. 4.

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