March 2, 2017

While state agencies work to implement Prop 64, the Adult Use of Marijuana Act (AUMA), bills covering a wide variety of cannabis-related topics are working through the legislative process. In addition to the bills listed below, there are numerous spot bills related to cultivation on tribal lands, extraction processes, edible products, licensing, and more. These bills were recently introduced and represent a starting point for legislation; it remains to be seen how legislative leadership and the Administration will reconcile legislation with a simultaneous regulatory process as state agencies undertake rulemaking.

CSAC is actively involved in the cannabis discussions at the legislature. Additionally, the CSAC Cannabis Working Group will hold its first meeting on March 16 in Sacramento; this group will help develop additional CSAC policy on cannabis issues, and will review legislation and proposed regulations. Please RSVP to Betsy Hammer (bhammer@counties.org) if you plan to attend this meeting.

The list below summarizes active cannabis bills:

AB 64 (Bonta) contains a variety of provisions. It adds clarity about for-profit and non-profit types of businesses operating under the Medical Cannabis Regulation and Safety Act (MCRSA), and makes changes to storefront access requirements and restrictions on advertising. AB 64 also makes changes to trademark laws and certain marks related to cannabis that are lawful under state law, and advances a $3 million loan from the state’s general fund to the California Highway Patrol for adopting protocols to determine driver impairment.

Licensing and Testing

AB 171 (Lackey) requires reporting on conditional licenses issued by the state.

AB 238 (Steinorth) relates to collective bargaining agreements and employees of licensed distributors.

AB 1527 (Cooley) would prohibit a former employee of a state or local licensing authority from being employed by a person or entity licensed under AUMA or MCRSA for at least one year.

SB 311 (Pan) relates to testing, and would authorize a licensee to perform testing of cannabis or cannabis products obtained from another licensee for the purpose of quality assurance.

Packaging and Advertising

AB 175 (Chau) would require manufacturers of edible cannabis products to submit packaging and labeling to the state for review of compliance with requirements of Prop 64, including child resistant packaging and labels that do not appeal to children.

AB 350 (Salas) specifies that cannabis products are deemed to appeal to children or easily confused with commercial candy if the product is in the shape of a person, animal, insect, fruit, or any other shape associated with candy.

SB 663 (Nielsen) specifies that a package or label of cannabis or cannabis products is deemed to be attractive to children if the package or label has specific characteristics, including resembling any candy, snack food, baked good, or beverage commercially sold without marijuana.

AB 420 (Wood) requires advertisements for medical cannabis to identify the responsible licensee.

SB 175 (McGuire) relates to labeling products with the name of the county where the cannabis was grown; this is currently required, but SB 175 would specify that the prohibitions include the use of similar sounding names that are likely to mislead consumers about the product’s origin.

State Requirements

AB 389 (Salas) would require the state to post a consumer guide on the regulation of medical and recreational cannabis online.

AB 1002 (Cooley) would rename the existing California Marijuana Research Program as the Center for Cannabis Research and would expand the purview of the program, including cultivation for research purposes and examining testing methods for detecting harmful contaminants in marijuana, including mold and bacteria.

AB 1135 (Wood) relates to public stakeholder input on disbursements to the Department of Health Care Services from the California Marijuana Tax Fund.

AB 1627 (Cooley) transfers the regulation of testing laboratories under AUMA from the State Department of Public Health to the Bureau of Marijuana Control.

Finance and Tax Issues

AB 963 (Gipson) addresses various aspects of taxation related to cannabis. It would require distributors to provide retailers with evidence of prepayment tax amounts collected, and then allow the retailers to credit the prepayments against the amounts due for the same period. AB 963 would authorize a system for prepayment of the excise tax that utilizes stamps or other markings. It also makes changes to taxable sales of medical cannabis products to persons with identification cards, including requiring county health departments to issue identification cards with the capability of storing data, and would limit the sales and use tax exemption for medical purchasers to only sales made with these types of cards. AB 963 would adjust the suspension, revocation, or denial of state permits in some cases related to taxation. Finally, the bill would extend the pilot program for combating criminal tax evasion until January 1, 2020 – with a Cannabis Criminal Enforcement Team to work on these issues specifically.

AB 844 (Burke) would change requirements for grantees applying for funding through the California Marijuana Tax Fund.

AB 1410 (Wood) relates to taxation and would require licensed distributors to collect cultivation taxes at the time of completion of quality assurance, inspection, and testing. It would require the licensed distributor to file the tax return, instead of the licensed cultivator, and all licensed distributors would need to obtain a separate permit for that work.

SB 148 (Wiener) would authorize the State Board of Equalization or a county to collect cash payments on behalf of other entities that are also due tax payments, upon agreement.

Public Safety

SB 698 (Hill) sets standards for driving under the influence, and would make the first violation punishable as an infraction, requiring successful completion of a three-month program and installation of an ignition interlock device for six months.

AB 903 (Cunningham) would amend AUMA by requiring the Highway Patrol to use funding from the California Marijuana Tax Fund to study the viability of standards for marijuana impairment.

AB 729 (Gray) would require license suspension for certain types of violations. It would also require licensees to post signs visible from public entrances to indicate “No Person Under 21 Allowed,” among other security measures; AB 729 also prohibits the sale or distribution of cannabis or cannabis products in a vending machine. The bill would authorize licensees and employees to refuse to sell cannabis to a person unable to produce adequate identification, and would authorize peace officers or local and state licensing authorities the ability to enter and conduct inspections. AB 729 also contains zoning restrictions, and would prohibit licensees from being located within a 600-foot radius of a playground, hospital, or church, unless a local authority or licensing authority specifies a different radius.

Interactions with the Federal Government

AB 845 (Wood) would, if federal law authorizes the prescription of a controlled substance containing cannabidiol, a physician to prescribe that substance in accordance with federal law.

AB 1578 (Jones-Sawyer) would prohibit a state or local agency from taking certain actions to assist a federal agency investigate, detain, detect, report or arrest a person for cannabis activity that is authorized by the state of California, unless ordered by a judge.