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SB-398 Cannabis licenses: cannabis licensing agreements: labor peace agreement license requirement: medical marijuana identification cards.(2021-2022)

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Date Published: 04/12/2021 02:00 PM
SB398:v97#DOCUMENT

Amended  IN  Senate  April 12, 2021
Amended  IN  Senate  March 11, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 398


Introduced by Senator Skinner
(Principal coauthor: Assembly Member Ting)
(Coauthors: Senators Bradford and Wiener)

February 11, 2021


An act to amend Sections 26051.5 and 26055 of, and to add Sections 26055.5, 26203, and 26247 to, the Business and Professions Code, and to amend Section 11362.71 of the Health and Safety Code, and to add Section 34011.5 to the Revenue and Taxation Code, relating to cannabis, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 398, as amended, Skinner. Cannabis licenses: cannabis licensing agreements: cannabis excise tax. labor peace agreement license requirement: medical marijuana identification cards.

(1)The

The Control, Regulate and Tax Adult Use of Marijuana Act (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, including retail commercial cannabis activity. MAUCRSA gives the Bureau of Cannabis Control in the Department of Consumer Affairs the power, duty, purpose, responsibility, and jurisdiction to regulate commercial cannabis activity in the state as provided by the act, and does not supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate commercial cannabis businesses within that local jurisdiction. MAUCRSA reserves to a local jurisdiction, defined as a city, city and county, or county, specified powers regarding commercial cannabis activity, including adopting and enforcing local ordinances regulating commercial cannabis activity or prohibiting that activity.
This bill would authorize a local jurisdiction to enter into a cannabis licensing agreement with the bureau to require the bureau to administer local commercial cannabis licensing, permitting, or other regulatory activities on behalf of the local jurisdiction. The bill would require the agreement to meet specified conditions, including that the agreement expires no less than 5 years from its operative date, and would require the local jurisdiction designate applicable zoning areas for commercial cannabis activity.
This bill would require the bureau to provide notice to local licensees or permitholders of the transition from local administration to state administration, as provided, and would require the bureau to begin accepting new applications for local cannabis licenses within 15 days of entering into a cannabis licensing agreement. The bill would additionally authorize the bureau to impose penalties, not to exceed specified unspecified amounts, on a local jurisdiction for violation of a cannabis licensing agreement, and would require the bureau to deposit any penalties collected into the Cannabis Fines and Penalties Account.
This bill, prior to expiration of the agreement, would require the local jurisdiction to either establish its own licensing and regulatory framework for commercial cannabis activity, or upon consent of the bureau, renew the agreement by ordinance or resolution. The bill would specify impose unspecified monetary penalties if the local jurisdiction or the bureau terminate the agreement prior to expiration. By requiring the bureau to pay a penalty to a local jurisdiction from the Cannabis Fines and Penalties Account, the bill would make an appropriation.

(2)Existing law imposes an excise tax on upon purchasers of cannabis or cannabis products sold in this state at the rate of 15% of the average market price of any retail sale by a cannabis retailer, and a separate cultivation tax on harvested cannabis that enters the commercial market, as specified. Existing law provides those taxes are in addition to any other tax imposed by a city, county, or city and county. Existing law requires revenues from those taxes to be deposited into the California Cannabis Tax Fund, and continuously appropriates that tax fund for specified purposes. Existing law requires the California Department of Tax and Fee Administration to administer and collect the taxes.

This bill would impose an additional excise tax upon purchasers of cannabis or cannabis products sold in a local jurisdiction that entered into a cannabis licensing agreement at the rate of 6% of the average market price of any retail sale by a cannabis retailer. The bill would require the Controller to allocate moneys collected from the excise tax to the department and the bureau for administrative costs associated with these provisions, and to each local jurisdiction in a cannabis licensing agreement with the bureau, as specified. The bill would require the local jurisdiction to use the excise tax revenue for the local jurisdiction’s medical marijuana identification card program, substance use disorder programs, prisoner reentry programs, and racial or social justice programs, and would authorize up to 40% of the moneys to be allocated in the local jurisdiction’s general fund.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.

(3)Existing

Existing law places requirements on applicants for state cannabis licenses, including that the an applicant provides with 20 or more employees provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement. Existing law requires an applicant with less than 20 employees that has not yet entered into a labor peace agreement to provide a notarized statement as part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee. Existing law requires an applicant to provide a statement, signed by the applicant under penalty of perjury, that the information is complete, true, and accurate.
This bill would specify that the applicant, bill, beginning January 1, 2022, must abide by and maintain the terms of the instead would require that an applicant with 10 or more employees demonstrate that it has already entered into, and abides by the terms of, a labor peace agreement, and will maintain the labor peace agreement for the duration of the license, as provided. license. The bill, beginning January 1, 2022, would require an applicant with less than 10 employees that has not yet entered into a labor peace agreement to provide a notarized statement as part of its application indicating that the applicant will enter into, and abide by the terms of, a labor peace agreement within 60 days of employing its 10th employee and will maintain the labor peace agreement for the duration of the license. By expanding the crime of perjury, this bill would impose a state-mandated local program.

(4)Existing

Existing law, the California Cannabis Equity Act of 2018, requires the Bureau of Cannabis Control in the Department of Consumer Affairs to administer a grant program to assist with the development of a local jurisdiction’s local equity program or to assist applicants and licensees in a local jurisdiction’s equity program, and authorizes the bureau to provide technical assistance to the local equity program.
This bill would require the bureau to establish a stakeholder oversight committee to ensure fair and equitable distribution of grants authorized under the act and to develop model guidelines for local equity programs.

(5)Existing

Existing law, the Compassionate Use Act of 1996, an initiative measure, enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, prohibits prosecution for the possession or cultivation of marijuana of a patient or a patient’s primary caregiver who possesses or cultivates marijuana for the personal medical purposes of the patient upon the written or oral recommendation or approval of a physician. Existing law, the Medical Marijuana Program Act, establishes a voluntary identification card program administered by the State Department of Public Health to exempt qualified patients who hold an identification card issued pursuant to the program, and the caregivers of those persons, from certain state criminal sanctions related to the possession, cultivation, transportation, processing, or use of limited amounts of marijuana, as specified.
This bill would require the department to adopt regulations to ensure the affordable and timely access to identification cards issued under the act.
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.

(6)AUMA

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.
This bill would declare that its provisions further the purposes and intent of AUMA.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NOYES  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) In 2016, 57 percent of California voters approved Proposition 64, The Control, Regulate and Tax Adult Use of Marijuana Act, which legalized the adult use of cannabis and was designed to replace California’s illicit cannabis market with a regulated legal industry. However, most cities and counties still have not allowed legal cannabis businesses to open, in part because of the burdensome and complicated regulatory framework that Proposition 64 requires.
(b) According to a 2019 study, California’s illegal cannabis industry is valued at over $7 billion annually. By contrast, the Legislative Analyst’s Office (LAO) estimates that the legal market was worth about $3.3 billion in the same year.
(c) As of February 2021, only 23 of 58 counties allow some form of retail cannabis activity, according to the LAO.
(d) As of February 2021, only 150 of 482 cities allow some form of retail cannabis activity, according to the LAO.
(e) Additionally, the LAO estimates that the state’s annual revenue would increase by $600 million to $1 billion if all cities and counties licensed cannabis businesses in their jurisdiction.
(f) This bill furthers the intent of Proposition 64 as outlined in Section 3 of the initiative by streamlining the cannabis licensing process to increase access to the regulated cannabis market. Specifically, the bill furthers the following intents of the initiative:
(1) Take nonmedical marijuana production and sales out of the hands of the illegal market and bring them under a regulatory structure that prevents access by minors and protects public safety, public health, and the environment.
(2) Strictly control the cultivation, processing, manufacture, distribution, testing, and sale of nonmedical marijuana through a system of state licensing, regulation, and enforcement.
(3) Allow local governments to enforce state laws and regulations for nonmedical marijuana businesses and enact additional local requirements for nonmedical marijuana businesses, but not require that they do so for a nonmedical marijuana business to be issued a state license and be legal under state law.
(4) Allow local governments to reasonably regulate the cultivation of nonmedical marijuana for personal use by adults 21 years and older through zoning and other local laws, and only to ban outdoor cultivation as set forth in this act.
(5) Tax the growth and sale of marijuana in a way that drives out the illicit market for marijuana and discourages use by minors, and abuse by adults.
(6) Generate hundreds of millions of dollars in new state revenue annually for restoring and repairing the environment, youth treatment and prevention, community investment, and law enforcement.
(7) Reduce barriers to entry into the legal, regulated market.

SEC. 2.

 Section 26051.5 of the Business and Professions Code is amended to read:

26051.5.
 (a) An applicant for any type of state license issued pursuant to this division shall do all of the following:
(1) Require that each owner electronically submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all applicants for any type of state license issued pursuant to this division, for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and state and federal arrests, and also information as to the existence and content of a record of state or federal convictions and arrests for which the Department of Justice establishes that the person is free on bail or on their own recognizance pending trial or appeal.
(A) Notwithstanding any other law, the Bureau of Cannabis Control, the Department of Food and Agriculture, and the State Department of Public Health may obtain and receive, at their discretion, criminal history information from the Department of Justice and the Federal Bureau of Investigation for an applicant for any state license under this division, including any license established by a licensing authority by regulation pursuant to subdivision (b) of Section 26012.
(B) When received, the Department of Justice shall transmit fingerprint images and related information received pursuant to this section to the Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the licensing authority.
(C) The Department of Justice shall provide a response to the licensing authority pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.
(D) The licensing authority shall request from the Department of Justice subsequent notification service, as provided pursuant to Section 11105.2 of the Penal Code, for applicants.
(E) The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.
(2) Provide evidence of the legal right to occupy and use the proposed location and provide a statement from the landowner of real property or that landowner’s agent where the commercial cannabis activity will occur, as proof to demonstrate the landowner has acknowledged and consented to permit commercial cannabis activities to be conducted on the property by the tenant applicant.
(3) Provide evidence that the proposed location is in compliance with subdivision (b) of Section 26054.
(4) Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.
(5) (A) (i) (I) Prior to January 1, 2022, for an applicant with 20 or more employees, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement.
(II) Beginning January 1, 2022, for an applicant with 10 or more employees, the applicant shall demonstrate that it has already entered into and abides by the terms of a labor peace agreement and that it will maintain the labor peace agreement for the duration of the license.
(ii) (I) Prior to January 1, 2022, for an applicant with less than 20 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee.
(II) Beginning January 1, 2022, for an applicant with less than 10 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th 10th employee, and will maintain the labor peace agreement for the duration of the license.
(iii)  Nothing in this paragraph shall be construed to limit the authority of the Bureau of Cannabis Control, the Department of Food and Agriculture, and the State Department of Public Health to revoke or suspend a license for a violation of this paragraph.
(B) For the purposes of this paragraph, “employee” does not include a supervisor.
(C) For the purposes of this paragraph, “supervisor” means an individual having authority, in the interest of the applicant, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
(6) Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.
(7) Provide any other information required by the licensing authority.
(8) For an applicant seeking a cultivation license, provide a statement declaring the applicant is an “agricultural employer,” as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code), to the extent not prohibited by law.
(9) Pay all applicable fees required for licensure by the licensing authority.
(10) Provide proof of a bond to cover the costs of destruction of cannabis or cannabis products if necessitated by a violation of licensing requirements.
(11) (A) Provide a statement, upon initial application and application for renewal, that the applicant employs, or will employ within one year of receiving or renewing a license, one supervisor and one employee who have successfully completed a Cal-OSHA 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course. This paragraph shall not be construed to alter or amend existing requirements for employers to provide occupational safety and health training to employees.
(B) An applicant with only one employee shall not be subject to subparagraph (A).
(C) For purposes of this paragraph “employee” has the same meaning as provided in subparagraph (B) of paragraph (5) and “supervisor” has the same meaning as provided in subparagraph (C) of paragraph (5).
(b) An applicant shall also include in the application a detailed description of the applicant’s operating procedures for all of the following, as required by the licensing authority:
(1) Cultivation.
(2) Extraction and infusion methods.
(3) The transportation process.
(4) Inventory procedures.
(5) Quality control procedures.
(6) Security protocols.
(7) For applicants seeking licensure to cultivate, the source or sources of water the applicant will use for cultivation, as provided in subdivisions (a) to (c), inclusive, of Section 26060.1. For purposes of this paragraph, “cultivation” as used in Section 26060.1 shall have the same meaning as defined in Section 26001. The Department of Food and Agriculture shall consult with the State Water Resources Control Board and the Department of Fish and Wildlife in the implementation of this paragraph.
(c) The applicant shall also provide a complete detailed diagram of the proposed premises wherein the license privileges will be exercised, with sufficient particularity to enable ready determination of the bounds of the premises, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, and common or shared entryways, and include a brief statement or description of the principal activity to be conducted therein, and, for licenses permitting cultivation, measurements of the planned canopy, including aggregate square footage and individual square footage of separate cultivation areas, if any, roads, water crossings, points of diversion, water storage, and all other facilities and infrastructure related to the cultivation.
(d) Provide a complete list of every person with a financial interest in the person applying for the license as required by the licensing authority. For purposes of this subdivision, “persons with a financial interest” does not include persons whose only interest in a licensee is an interest in a diversified mutual fund, blind trust, or similar instrument.

SEC. 3.

 Section 26055 of the Business and Professions Code is amended to read:

26055.
 (a) Licensing authorities may issue state licenses only to qualified applicants.
(b) Revocation of a state license issued under this division shall terminate the ability of the licensee to operate pursuant to that license within California until a new license is obtained.
(c) A licensee shall not change or alter the premises in a manner which materially or substantially alters the premises, the usage of the premises, or the mode or character of business operation conducted from the premises, from the plan contained in the diagram on file with the application, unless and until written approval by the licensing authority has been obtained. For purposes of this section, material or substantial physical changes of the premises, or in the usage of the premises, shall include, but not be limited to, a substantial increase or decrease in the total area of the licensed premises previously diagrammed, or any other physical modification resulting in substantial change in the mode or character of business operation.
(d) Licensing authorities shall not approve an application for a state license under this division if approval of the state license will violate the provisions of any local ordinance or regulation adopted in accordance with Section 26200.
(e) An applicant may voluntarily provide proof of a license, permit, or other authorization from the local jurisdiction verifying that the applicant is in compliance with the local jurisdiction. An applicant that voluntarily submits a valid, unexpired license, permit, or other authorization from the local jurisdiction shall be presumed to be in compliance with all local ordinances unless the licensing authority is notified otherwise by the local jurisdiction. The licensing authority shall notify the contact person for the local jurisdiction of any applicant that voluntarily submits a valid, unexpired license, permit, or other authorization from the local jurisdiction.
(f) (1) A local jurisdiction shall provide to the bureau a copy of any ordinance or regulation related to commercial cannabis activity and the name and contact information for the person who will serve as the contact for state licensing authorities regarding commercial cannabis activity within the jurisdiction. If a local jurisdiction does not provide a contact person, the bureau shall assume that the clerk of the legislative body of the local jurisdiction is the contact person.
(2) Whenever there is a change in a local ordinance or regulation adopted pursuant to Section 26200 or a change in the contact person for the jurisdiction, the local jurisdiction shall provide that information to the bureau.
(3) The bureau shall share the information required by this subdivision with the other licensing authorities.
(g) (1) The licensing authority shall deny an application for a license under this division for a commercial cannabis activity that the local jurisdiction has notified the bureau is prohibited in accordance with subdivision (f). The licensing authority shall notify the contact person for the local jurisdiction of each application denied due to the local jurisdiction’s indication that the commercial cannabis activity for which a license is sought is prohibited by a local ordinance or regulation.
(2) Prior to issuing a state license under this division for any commercial cannabis activity, if an applicant has not provided adequate proof of compliance with local laws pursuant to subdivision (e):
(A) The licensing authority shall notify the contact person for the local jurisdiction of the receipt of an application for commercial cannabis activity within their jurisdiction.
(B) A local jurisdiction may notify the licensing authority that the applicant is not in compliance with a local ordinance or regulation. In this instance, the licensing authority shall deny the application.
(C) A local jurisdiction may notify the licensing authority that the applicant is in compliance with all applicable local ordinances and regulations. In this instance, the licensing authority may proceed with the licensing process.
(D) If the local jurisdiction does not provide notification of compliance or noncompliance with applicable local ordinances or regulations, or otherwise does not provide notification indicating that the completion of the local permitting process is still pending, within 60 business days of receiving the inquiry from a licensing authority submitted pursuant to subparagraph (A), the licensing authority shall make a rebuttable presumption that the applicant is in compliance with all local ordinances and regulations adopted in accordance with Section 26200, except as provided in subparagraphs (E) and (F).
(E) At any time after expiration of the 60-business-day period set forth in subparagraph (D), the local jurisdiction may provide written notification to the licensing authority that the applicant or licensee is not in compliance with a local ordinance or regulation adopted in accordance with Section 26200. Upon receiving this notification, the licensing authority shall not presume that the applicant or licensee has complied with all local ordinances and regulations adopted in accordance with Section 26200, and may commence disciplinary action in accordance with Chapter 3 (commencing with Section 26030). If the licensing authority does not take action against the licensee before the time of the renewal of the license, the license shall not be renewed until and unless the local jurisdiction notifies the licensing authority that the licensee is once again in compliance with local ordinances.
(F) A presumption by a licensing authority pursuant to this paragraph that an applicant has complied with all local ordinances and regulations adopted in accordance with Section 26200 shall not prevent, impair, or preempt the local government from enforcing all applicable local ordinances or regulations against the applicant, nor shall the presumption confer any right, vested or otherwise, upon the applicant to commence or continue operating in any local jurisdiction except in accordance with all local ordinances or regulations.
(3) For purposes of this section, “notification” includes written notification or access by a licensing authority to a local jurisdiction’s registry, database, or other platform designated by a local jurisdiction, containing information specified by the licensing authority, on applicants to determine local compliance.
(4) This subdivision shall not apply to applicants of commercial cannabis licenses in local jurisdictions under a valid cannabis licensing agreement pursuant to Section 26203.
(h) Without limiting any other statutory exemption or categorical exemption, Division 13 (commencing with Section 21000) of the Public Resources Code does not apply to the adoption of an ordinance, rule, or regulation by a local jurisdiction that requires discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity. To qualify for this exemption, the discretionary review in any such law, ordinance, rule, or regulation shall include any applicable environmental review pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code. This subdivision shall become inoperative on July 1, 2021.
(i) A local or state public agency may charge and collect a fee from a person proposing a project pursuant to subdivision (a) of Section 21089 of the Public Resources Code.

SEC. 4.

 Section 26055.5 is added to the Business and Professions Code, to read:

26055.5.
 (a) The bureau shall administer commercial cannabis licensing, permitting, or other regulatory activities on behalf of a local jurisdiction pursuant to a cannabis licensing agreement entered into under Section 26203, and in accordance with the requirements in that section.
(b) (1) Local cannabis licenses or permits approved by the local jurisdiction prior to the operative date of the cannabis licensing agreement shall remain valid until expiration of the license or permit.
(2) The bureau shall provide notice of the transition from local administration to state administration of the local cannabis licensing or permitting, and requirements for license or permit renewal, to current licensees or permit holders at 90, 60, 30, and 15 days before the date of license or permit renewal.
(c) The bureau shall begin accepting new applications for local cannabis licenses or permits within 15 days of entering into a cannabis licensing agreement.
(d) The bureau shall not issue a local cannabis license or permit to an applicant who does not comply with local permitting, zoning, or other applicable local requirements.
(e) The bureau may impose a penalty, not to exceed one-half of the total amount of tax revenues allocated to the local jurisdiction pursuant to the agreement, ____, on a local jurisdiction for violation of a cannabis licensing agreement. The bureau shall deposit any penalties collected under this subdivision into the Cannabis Fines and Penalties Account.

SEC. 5.

 Section 26203 is added to the Business and Professions Code, to read:

26203.
 (a) A local jurisdiction may enter into a cannabis licensing agreement with the bureau to require the bureau to administer any local commercial cannabis licensing, permitting, or other regulatory activities on behalf of the local jurisdiction, if all the following requirements are met:
(1) The agreement contains all of the following:
(A) The local jurisdiction authorizes the bureau to administer all cannabis licensing, permitting, or regulatory activities within the jurisdiction.
(B) The local jurisdiction retains all regulatory responsibilities that are not cannabis specific, including, but not limited to, discretionary and ministerial land use decisions, business license requirements, design review, environmental safety, and related enforcement.
(C) The agreement expires no less than five years after it becomes operative.
(i) The local jurisdiction agrees to either establish its own licensing and regulatory framework for commercial cannabis activity prior to the expiration of the cannabis licensing agreement, or upon consent of the bureau, renew the agreement by ordinance or resolution.
(ii) If the agreement is not renewed, the local jurisdiction and the bureau shall publish the licensing and regulatory transition process and the dates on which it will take place on their respective internet websites.
(2) The local jurisdiction repeals any current or pending local taxes on cannabis or cannabis products, and agrees not to impose new local taxes on cannabis or cannabis products.
(3) The local jurisdiction designates applicable zoning areas for commercial cannabis activity.
(4) The local jurisdiction posts a list of local permits that are not cannabis specific but may be necessary for a cannabis licensee operating in the jurisdiction on its internet website and provides the list to the bureau. The local jurisdiction agrees to submit any changes in local permitting requirements to the bureau within 24 hours of the change.
(5) The local jurisdiction enters the cannabis licensing agreement by ordinance or resolution. The local jurisdiction shall submit a copy of the ordinance or resolution to the bureau.
(b) (1) The local jurisdiction may terminate a cannabis licensing agreement prior to its expiration date only if the local jurisdiction pays a penalty, within six months of termination, equal to the amount of tax revenue allocated to the local jurisdiction under Section 34011.5 of the Revenue and Taxation Code. ____. The bureau shall deposit moneys collected pursuant to this subdivision into the Cannabis Fines and Penalties Account.
(2) If the bureau terminates the agreement before its expiration, the bureau shall pay a penalty from the Cannabis Fines and Penalties Account to the local jurisdiction, within six months of termination, equal to the amount of tax revenue allocated to the local jurisdiction under Section 34011.5 of the Revenue and Taxation Code. ____.

(c)(1)A local jurisdiction in a cannabis licensing agreement shall use excise tax revenue allocated to it pursuant to Section 34011.5 of the Revenue and Taxation Code, as follows:

(A)Forty percent of moneys may be allocated to the local jurisdiction’s general fund.

(B)Sixty percent of moneys shall be used to fund the local jurisdiction’s medical marijuana identification card program, substance use disorder programs, prisoner reentry programs, in-home supportive services, and racial or social justice programs.

(2)Beginning on January 1, 2023, and each year thereafter, each local jurisdiction in a cannabis licensing agreement shall submit an annual report to the Legislature and the bureau on the local jurisdiction’s spending of cannabis tax revenues received under Section 34011.5 of the Revenue and Taxation Code.

SEC. 6.

 Section 26247 is added to the Business and Professions Code, to read:

26247.
 By January 1, 2023, the bureau shall establish a stakeholder oversight committee to ensure fair and equitable distribution of grants authorized under this chapter and to develop model guidelines for local equity programs.

SEC. 7.

 Section 11362.71 of the Health and Safety Code is amended to read:

11362.71.
 (a) (1) The department shall establish and maintain a voluntary program for the issuance of identification cards to qualified patients who satisfy the requirements of this article and voluntarily apply to the identification card program.
(2) The department shall establish and maintain a 24-hour, toll-free telephone number that will enable state and local law enforcement officers to have immediate access to information necessary to verify the validity of an identification card issued by the department, until a cost-effective Internet Web-based system can be developed for this purpose.
(b) Every county health department, or the county’s designee, shall do all of the following:
(1) Provide applications upon request to individuals seeking to join the identification card program.
(2) Receive and process completed applications in accordance with Section 11362.72.
(3) Maintain records of identification card programs.
(4) Utilize protocols developed by the department pursuant to paragraph (1) of subdivision (d).
(5) Issue identification cards developed by the department to approved applicants and designated primary caregivers.
(c) The county board of supervisors may designate another health-related governmental or nongovernmental entity or organization to perform the functions described in subdivision (b), except for an entity or organization that cultivates or distributes cannabis.
(d) The department shall develop all of the following:
(1) Protocols that shall be used by a county health department or the county’s designee to implement the responsibilities described in subdivision (b), including, but not limited to, protocols to confirm the accuracy of information contained in an application and to protect the confidentiality of program records.
(2) Application forms that shall be issued to requesting applicants.
(3) An identification card that identifies a person authorized to engage in the medical use of cannabis and an identification card that identifies the person’s designated primary caregiver, if any. The two identification cards developed pursuant to this paragraph shall be easily distinguishable from each other.
(e) A person or designated primary caregiver in possession of a valid identification card shall not be subject to arrest for possession, transportation, delivery, or cultivation of medicinal cannabis in an amount established pursuant to this article, unless there is probable cause to believe that the information contained in the card is false or falsified, the card has been obtained by means of fraud, or the person is otherwise in violation of the provisions of this article.
(f) It shall not be necessary for a person to obtain an identification card in order to claim the protections of Section 11362.5.
(g) The department shall, by January 1, 2023, adopt regulations to ensure affordable and timely access to identification cards issued under this section.

SEC. 8.Section 34011.5 is added to the Revenue and Taxation Code, to read:
34011.5.

(a)Beginning January 1, 2022, a cannabis licensing agreement excise tax shall be imposed upon purchasers of cannabis or cannabis products sold in a local jurisdiction that entered into a cannabis licensing agreement pursuant to Section 26203 of the Business and Professions Code at the rate of 6 percent of the average market price of any retail sale by a cannabis retailer.

(b)The tax imposed in subdivision (a) shall be in addition to all other taxes imposed under this part.

(c)The tax imposed in subdivision (a) shall be collected and administered in accordance with the cannabis excise tax imposed pursuant to Section 34011.

(d)The Controller shall allocate moneys collected from the cannabis licensing agreement excise tax imposed in this section in the following order:

(1)To the bureau and the department for administrative costs associated with administering this section and cannabis licensing agreements pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.

(2)To each local jurisdiction in a cannabis licensing agreement with the bureau, in an amount equal to the percentage share of tax revenues collected, minus administrative costs, from each local jurisdiction under this section.

SEC. 9.SEC. 8.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 9.

 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. 10.

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