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AB-687 California Cannabis Authority.(2023-2024)

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Date Published: 06/20/2023 09:00 PM
AB687:v96#DOCUMENT

Amended  IN  Senate  June 20, 2023
Amended  IN  Assembly  April 11, 2023
Amended  IN  Assembly  March 16, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 687

Introduced by Assembly Member Hart

February 13, 2023

An act to amend Section 26067 of the Business and Professions Code, relating to cannabis.


LEGISLATIVE COUNSEL'S DIGEST


AB 687, as amended, Hart. California Cannabis Authority.
Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure, 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 establishes the Department of Cannabis Control within the Business, Consumer Services, and Housing Agency to administer the act.
Existing law requires the department to establish a track and trace program for reporting the movement of cannabis and cannabis products throughout the distribution chain and requires the program to capture certain information. Existing law requires the program to include an electronic seed to sale software tracking system with data points for the different stages of commercial activity. Existing law requires the department, upon the request of a state or local law enforcement agency, to allow access to or provide information contained within the database to assist law enforcement in their duties and responsibilities pursuant to MAUCRSA.
This bill would additionally require the track and trace program, if the sale of cannabis is conducted by delivery, to capture the ZIP Code of the delivery address. The bill would require the department to allow access to or to provide information contained within the electronic database to specified local agencies and agencies, including the California Cannabis Authority, created pursuant to a specified joint powers agreement, to have read access to the electronic database, including the track and trace program data, for the purpose of providing local agencies licensee and relevant transactional information in support of assisting those agencies in their duties and responsibilities as they relate to local taxation and regulation of cannabis and cannabis products, and for locally relevant research into the commercial cannabis marketplace. products. The bill would also require the department to provide full read access to the electronic database to the California Cannabis Authority or a local public agency composed of multiple public entities with certain demonstrated capabilities for the purpose of assisting that local agency in its duties regarding local taxation and regulation of cannabis and cannabis products as well as for locally relevant research on the local regulation, taxation, and operation of commercial cannabis. The bill would require any software, database, or other information technology system utilized by the department for the issuance, maintenance, or revocation of state licenses to support interoperability with the software of those specified the local agencies and the California Cannabis Authority, and allowed to or provided information contained within the electronic database pursuant to the bill’s provisions. The bill would require the those local agencies and the authority to maintain specified data privacy policies.
This bill would make legislative findings and declarations as to the necessity of a special statute for the California Cannabis Authority.
Vote: MAJORITY   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) It is imperative that the cannabis supply chain be taxed and regulated in a way that drives out the illicit market, as intended by the voters in enacting the Control, Regulate and Tax Adult Use of Marijuana Act.
(b) It is also imperative that the cannabis supply chain be taxed in a way that generates local revenue for those local jurisdictions that have shouldered the responsibility of licensing and regulating the cannabis supply chain for use in a myriad of local purposes, including restoring and repairing the environment, education, prevention, and treatment of youth substance use disorders, community investment, public safety, and inclusion and support of individuals and communities in California’s cannabis industry who are linked to populations or neighborhoods that were negatively or disproportionately impacted by cannabis criminalization as intended by the voters in enacting the Control, Regulate and Tax Adult Use of Marijuana Act.
(c) Though the Control, Regulate and Tax Adult Use of Marijuana Act was passed more than five years ago, California’s local governments continue to struggle with unlicensed commercial activity, whether illicit growers, or inversion and diversion to and from unregulated and untaxed markets. Central to any meaningful effort to minimize inversion and diversion of illicit cannabis is timely access to meaningful data on commercial cannabis activities that can be analyzed to provide government authorities actionable intelligence efficiently and effectively.
(d) The Control, Regulate and Tax Adult Use of Marijuana Act required the establishment of a comprehensive database of commercial cannabis activity known as “track and trace” to report the movement of cannabis and cannabis products throughout the distribution chain utilizing a unique identifier and providing a comprehensive collection of information about those product movements and required that data be made available to local government. governments.
(e) With the expansion of cannabis delivery, the need for information regarding local commercial cannabis activities becomes more acute.
(f) The state, however, has sequestered access to commercial cannabis supply chain data from local governments that governments, while for several years promising the delivery of periodic reports, which have been ineffective, untimely, and compound local government oversight efforts. Complete cannabis supply chain data, however, is vital to the efficient and effective operation of local cannabis regulatory and tax programs. Furthermore, the state’s track and trace program does not include destination ZIP Codes, making oversight and tax assignment more difficult.
(g) In absence of the state providing access to commercial cannabis data, some local governments have banded together to create the California Cannabis Authority (CCA), a joint powers authority created under state law, for the purpose of assisting local governments with regulating and taxing commercial cannabis, including to accumulate and analyze commercial cannabis data to assist local governments with their regulatory and tax functions. Through CCA, local governments have access to a data analytics platform that not only provides access to most track and trace data, but also comprehensive analytics designed to alert local regulators or tax officials to anomalies within the commercial distribution chain, provide the public aggregated and anonymized data regarding commercial cannabis activity in their jurisdictions, and support locally relevant cannabis public policy research. Through CCA, members are able to provide more efficient and effective oversight and taxation while providing the public insights on the value the industry provides to local communities.
(h) The purpose of this act is to achieve the goals of the Control, Regulate and Tax Adult Use of Marijuana Act by facilitating more efficient and effective local regulatory and tax programs, enhance local revenue realization for cannabis tax programs, reduce barriers to entry for industry participants, and improve compliance to drive out the illicit cannabis market.

SEC. 2.

 Section 26067 of the Business and Professions Code is amended to read:

26067.
 (a) The department shall 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 information that captures, at a minimum, all of the following:
(1) The licensee from which the product originates and the licensee receiving the product.
(2) The transaction date.
(3) The unique identifier or identifiers for the cannabis or cannabis product.
(4) The date of retail sale to a customer and whether the sale is conducted on the retail premises or by delivery. If the sale is conducted by delivery, the ZIP Code of the delivery address.
(5) Information relating to cannabis and cannabis products leaving the licensed premises in a delivery vehicle as determined by regulations adopted pursuant to subdivision (d) of Section 26068.
(b) (1) The department, in consultation with the California Department of Tax and Fee Administration, shall create an electronic database containing the electronic shipping manifests to facilitate the administration of the track and trace program, which shall include, but not be limited to, the following information:
(A) The variety and quantity or weight of cannabis or cannabis products shipped.
(B) The estimated times of departure and arrival.
(C) The variety and quantity or weight of cannabis or cannabis products received.
(D) The actual time of departure and arrival.
(E) A categorization and the unique identifier of the cannabis or cannabis product.
(F) The license number issued by the department for all licensees involved in the shipping process, including, but not limited to, cultivators, manufacturers, distributors, and retailers.
(2)  The database shall be designed to flag irregularities for the department to investigate.
(3) The department and state and local agencies may, at any time, inspect shipments and request documentation for current inventory.
(4) The California Department of Tax and Fee Administration shall have read access to the electronic database for the purpose of taxation and regulation of cannabis and cannabis products.
(5) Information received and contained in records kept by the department for the purposes of administering this chapter are confidential and shall not be disclosed pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), except as necessary for authorized employees of the State of California or any city, county, or city and county to perform official duties pursuant to this division or a local ordinance.
(6) Upon the request of a state or local law enforcement agency, the department shall allow access to or provide information contained within the database to assist law enforcement in their duties and responsibilities pursuant to this division.

(7)(A)The

(7) (A) For purposes of this paragraph, “qualified local agency” means any of the following:
(i) A city, county, or city and county.
(ii) The California Cannabis Authority formed on January 12, 2018, under a joint powers agreement entered into pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code.
(iii) Any public local agency composed of multiple public entities with a demonstrated capability to do all of the following:
(I) Aggregate and geoparse data in an electronic database for each city, county, or city and county licensing or taxing commercial cannabis.
(II) Provide visualization of the aggregated and geoparsed data for each city, county, or city and county.
(III) Distribute to any requesting local licensing agency jurisdictionally relevant commercial cannabis data in a readily usable format.
(B) The department shall allow the local agencies read access to or provide information contained within the electronic database, including the track and trace program data through a secure application programming interface (API) or comparable technology, 24 hours per day, 7 days per week, for the purpose of providing local agencies licensee and relevant transactional information in support of database to all qualified local agencies to assist the qualified local agency in its duties and responsibilities as they relate to local taxation and regulation of cannabis and cannabis products, and for locally relevant research into the commercial cannabis marketplace. products.

(B)

(C) Any software, database, or other information technology system utilized by the department for the issuance, maintenance, or revocation of state licenses shall support interoperability with the software of qualified local agencies to allow the exchange of state and local licensing information, notices, and other reporting required or authorized under this division, between the department and local agencies.

(C)Local agencies

(D) A qualified local agency shall maintain data privacy policies in accordance with state standards to ensure there is no unauthorized access of licensees’ data.

(D)For purposes of this subdivision, “local agency” means either of the following:

(i)The California Cannabis Authority formed on January 12, 2018, under a joint powers agreement entered into pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code.

(ii)Any public local agency composed of multiple public entities with a demonstrated capability to do all of the following:

(I)Aggregate and geoparse data in an electronic database for each city, county, or city and county licensing or taxing commercial cannabis.

(II)Provide visualization of the aggregated and geoparsed data for each city, county, or city and county.

(III)Distribute to any requesting local licensing agency jurisdictionally relevant commercial cannabis data in a readily usable format.

(E) The department shall provide the California Cannabis Authority or a local public agency comprised of multiple public entities satisfying the conditions of clause (iii) of subparagraph (A) with full read access to the electronic database, including the track and trace program data and records pertaining to the issuance, maintenance, or revocation of state licenses, for the purpose of assisting that local agency in its duties regarding local taxation and regulation of cannabis and cannabis products as well as for locally relevant research on the local regulation, taxation, and operation of commercial cannabis.

SEC. 3.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the California Cannabis Authority’s unique ability to provide access to cannabis data necessary for local governments to efficiently and effectively regulate and enforce cannabis licensing, the illicit market, and taxation programs, and the authority’s unique ability to support local governments in their regulation and enforcement efforts during a time of rapid expansion of the cannabis marketplace, including cannabis delivery.