California Assembly Bill AB1575 Introduced / Bill

 BILL NUMBER: AB 1575INTRODUCED BILL TEXT INTRODUCED BY Assembly Members Bonta, Cooley, Jones-Sawyer, Lackey, and Wood JANUARY 4, 2016 An act to amend Sections 19300.5, 19316, 19321, 19326, 19332, 19334, 19340, 19342, 19344, and 19350 of, to amend and add Section 19328 of, and to add Sections 19310.5, 19319.5, and 19322.5 to, the Business and Professions Code, to amend Sections 12025 and 12029 of the Fish and Game Code, and to amend Sections 11352, 11362.765, 11362.775, and 11379 of the Health and Safety Code, relating to medical marijuana. LEGISLATIVE COUNSEL'S DIGEST AB 1575, as introduced, Bonta. Medical marijuana. (1) Existing law, the Medical Marijuana Regulation and Safety Act, establishes the licensing and regulation of medical marijuana. The act requires the Board of Equalization, in consultation with the Department of Food and Agriculture, to adopt a system for reporting the movement of commercial cannabis and cannabis products. This bill would also require the Board of Equalization to form an advisory group made up of representatives from financial institutions, the medical marijuana industry, and state and federal banking regulators to examine strategies, such as the use of automated kiosks for accepting cash payments, integrated point-of-sale systems with state track and trace systems, and other measures that will improve financial monitoring of medical marijuana businesses. The bill would require the board, by July 1, 2017, to submit a report to the Legislature with proposed changes to state law or regulations that will improve financial monitoring of medical marijuana businesses and compliance with federal law. (2) Under the act, a city, county, or city and county is authorized to adopt an ordinance that establishes standards, requirements, and regulations for local licenses and permits for commercial marijuana activity that exceed statewide standards. The bill would generally prohibit a city, county, or city and county from adopting an ordinance for packaging safety standards that exceeds statewide standards and would require the State Department of Public Health to establish uniform statewide packaging safety standards. (3) Under the act, all packaging and sealing of medical marijuana or medical marijuana products is required to be completed prior to their being transported or delivered to a licensee, qualified patient, or caregiver. This bill would require the Bureau of Medical Marijuana Regulation to specify the manner in which medical marijuana and medical marijuana products meant for wholesale purposes are required to be packaged and sealed prior to transport, testing, quality assurance, quality control testing, or distribution. (4) The act generally establishes categories of licenses that may be issued and limits a licensee to holding a state license in up to 2 separate license categories. The act provides that, upon licensure, a business shall not be subject to that limitation in a jurisdiction that adopted a local ordinance, prior to July 1, 2015, allowing or requiring qualified businesses to cultivate, manufacture, and dispense medical marijuana or medical marijuana products, with all commercial marijuana activity being conducted by a single qualified business. The act repeals these provisions on January 1, 2026. This bill would instead repeal only the latter provision effective January 1, 2026. (5) The act specifically establishes a "nursery license," to be issued by the Department of Food and Agriculture, for the cultivation of medical marijuana solely as a nursery, and authorizes a licensee with a nursery license to transport live plants. This bill would specify that a licensee with a nursery license may transport live immature plants, subject to specified tracking, security, and related requirements. (6) The act specifically establishes a "dispensary license," to be issued by the Department of Consumer Affairs, and requires a licensed dispensary to implement sufficient security measures, including, at a minimum, certain specified security measures, such as establishing limited access areas accessible only to authorized dispensary personnel. The act authorizes a dispensary to deliver in a city, county, or city and county that does not explicitly prohibit it by local ordinance. This bill would also establish a "virtual dispensary license" and would require dispensaries to implement the additional security measure of requiring all medical marijuana and medical marijuana products used for display purposes, samples, or immediate sale to be stored out of reach of any individual who is not employed by the dispensary. The bill would require the Bureau of Medical Marijuana Regulation to establish specified regulations regarding delivery of medical marijuana and medical marijuana products by a dispensary and specified requirements for all dispensary employees who deliver medical marijuana or medical marijuana products. (7) Under the act, each licensing authority is required to establish a scale of application, licensing, and renewal fees based on the cost of enforcing the act. This bill would specify that these fees shall be in addition to, and shall not limit, any fees or taxes imposed by any city, county, or city and county in which the licensee operates. (8) The act makes a license valid for 12 months from the date of issuance and requires that a license be renewed annually. This bill would, notwithstanding that provision, authorize the Bureau of Medical Marijuana Regulation to issue temporary permits for business events. (9) The act requires a licensed testing laboratory to analyze samples of medical marijuana or medical marijuana products according to either the most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia or a scientifically valid methodology that, in the opinion of the accrediting body, is demonstrably equal or superior. This bill would instead require a licensed testing laboratory to analyze samples in the final form in which the patient will consume the medical marijuana or medical marijuana product using a scientifically valid methodology approved by the accrediting body. (10) Existing law authorizes the University of California to create the California Marijuana Research Program, the purpose of which is to develop and conduct studies intended to ascertain the general medical safety and efficacy of marijuana, and if found valuable, to develop medical guidelines for the appropriate administration and use of marijuana. This bill would provide that it is not a violation of state law or any local ordinance or regulation for a business or research institution engaged in the research of medical marijuana, medical marijuana products, or devices used for the medical use of marijuana or marijuana products, to possess, transport, purchase, or otherwise obtain small amounts of medical marijuana or medical marijuana products to conduct research and development related to medical marijuana or medical marijuana products. The bill would require the Bureau of Medical Marijuana Regulation to issue a medical marijuana research permit. (11) Existing law imposes various civil penalties for a violation of specified provisions of law in connection with the production or cultivation of a controlled substance, including marijuana, on land under the management of specified state and federal agencies or within the ownership of a timberland production zone, as prescribed. Existing law also imposes various civil penalties for a violation of those specified provisions of law in connection with the production or cultivation of a controlled substance, including marijuana, on land that the person owns, leases, or otherwise uses or occupies with the consent of the landowner. The bill would provide that activities that are in compliance with the Medical Marijuana Regulation and Safety Act are not subject to the above-described civil penalties. (12) Under existing law, collectives and cooperatives that cultivate cannabis are not, solely on that basis, subject to certain criminal penalties, including unauthorized possession, cultivation, and transportation of marijuana. This exception for collectives and cooperatives expires one year after the Bureau of Medical Marijuana Regulation posts a notice on its Internet Web site that the bureau has commenced issuing licenses pursuant to the act and existing law is repealed on the date the bureau issues a license. This bill would instead provide that the above exception is repealed one year after the bureau posts its notice on its Internet Web site. The bill would also specify that a collective or cooperative subject to this exception may operate on a for-profit basis, a not-for-profit basis, or any combination thereof. The bill would also specify that a licensee under the act may operate on a for-profit basis, a not-for-profit basis, or any combination thereof. (13) Existing law provides that a qualified patient or a person with an identification card, a designated primary caregiver, and any individual who provides assistance to a qualified patient or a person with an identification card, or his or her designated primary caregiver, are not, solely on that basis, subject to certain criminal penalties, including unauthorized possession, cultivation, and transportation of marijuana. Existing law specifies that this provision does not authorize any individual or group to cultivate or distribute marijuana. This bill would instead specify that this provision does not authorize any individual or group to cultivate or distribute marijuana in any manner other than set forth in the Medical Marijuana Regulation and Safety Act or in the Compassionate Use Act of 1996. (14) Existing law makes it a crime to transport, import into this state, sell, furnish, administer, or give away, or offers to transport, import into this state, sell, furnish, administer, or give away, or attempt to import into this state or transport, or to transport for sale between counties of the state any controlled substance, including marijuana. This bill would except from these provisions any commercial marijuana activity by a holder of a state license under the Medical Marijuana Regulation and Safety Act. (15) This bill would also make technical, nonsubstantive changes to the provisions of the act. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19300.5 of the Business and Professions Code is amended to read: 19300.5. For purposes of this chapter, the following definitions shall apply: (a) "Accrediting body" means a nonprofit organization that requires conformance to ISO/IEC 17025 requirements and is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement for Testing. (b) "Applicant," for purposes of Article 4 (commencing with Section 19319), means the following: (1)  (A)    Owner or owners of a proposed  facility, including all persons or entities having ownership interest other than a security interest, lien, or encumbrance on property that will be used by the facility.   facility.   (2) If the owner is an entity, "owner" includes within the entity each person participating in the direction, control, or management of, or having a financial interest in, the proposed facility.   (B) An "owner" means any person having an aggregate ownership interest, other than a security interest, lien, or encumbrance, of 5 percent or more in the licensee and who has the power to direct, or cause to be directed, the management or control of the licensee.   (3)   (2)    If the applicant is a publicly traded company, "owner" means the chief executive officer  , any member of the board of directors,  or any person or entity with an aggregate ownership interest of 5 percent or more.  If the applicant is a nonprofit entity, "owner" means both the chief executive officer and any member of the board of directors.  (c) "Batch" means a specific quantity of medical  cannabis   marijuana  or medical  cannabis   marijuana  products that is intended to have uniform character and quality, within specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture. (d) "Bureau" means the Bureau of Medical Marijuana Regulation within the Department of Consumer Affairs. (e) "Cannabinoid" or "phytocannabinoid" means a chemical compound that is unique to and derived from cannabis. (f) "Cannabis"  or "marijuana"  means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis"  or "marijuana"  also means the separated resin, whether crude or purified, obtained from marijuana. "Cannabis"  or "marijuana   "  also means marijuana as defined by Section 11018 of the Health and Safety Code as enacted by Chapter 1407 of the Statutes of 1972. "Cannabis"  or "marijuana   "  does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, "cannabis"  or "marijuana   "  does not mean "industrial hemp" as defined by Section 81000 of the Food and Agricultural Code or Section 11018.5 of the Health and Safety Code. (g) "Cannabis concentrate"  or "marijuana concentrate   "  means manufactured  cannabis   marijuana  that has undergone a process to concentrate the cannabinoid active ingredient, thereby increasing the product's potency. An edible medical  cannabis   marijuana  product is not considered food, as defined by Section 109935 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code. (h) "Caregiver" or "primary caregiver" has the same meaning as that term is defined in Section 11362.7 of the Health and Safety Code. (i) "Certificate of accreditation" means a certificate issued by an accrediting body to a licensed testing laboratory, entity, or site to be registered in the state. (j) "Chief" means Chief of the Bureau of Medical Marijuana Regulation within the Department of Consumer Affairs. (k) "Commercial  cannabis   marijuana  activity" includes cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of medical  cannabis   marijuana  or a medical  cannabis   marijuana  product, except as set forth in Section 19319, related to qualifying patients and primary caregivers. (l) "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of  cannabis.   marijuana.  (m) "Delivery" means the commercial transfer of medical  cannabis   marijuana  or medical  cannabis   marijuana  products from a dispensary, up to an amount determined by the bureau to a primary caregiver or qualified patient as defined in Section 11362.7 of the Health and Safety Code, or a testing laboratory. "Delivery" also includes the use by a dispensary of any technology platform owned and controlled by the dispensary, or independently licensed under this chapter, that enables qualified patients or primary caregivers to arrange for or facilitate the commercial transfer by a licensed dispensary of medical  cannabis   marijuana  or medical  cannabis   marijuana  products. (n) "Dispensary" means a facility where medical  cannabis,   marijuana,  medical  cannabis   marijuana  products, or devices for the use of medical  cannabis   marijuana  or medical  cannabis   marijuana  products are offered, either individually or in any combination, for retail sale, including an establishment that delivers, pursuant to express authorization by local ordinance, medical  cannabis   marijuana  and medical  cannabis   marijuana  products as part of a retail sale.  "Dispensary" includes a virtual dispensary for purposes of regulation.  (o) "Dispensing" means any activity involving the retail sale of medical  cannabis   marijuana  or medical  cannabis   marijuana  products from a dispensary. (p) "Distribution" means the procurement, sale, and transport of medical  cannabis   marijuana  and medical  cannabis   marijuana  products between entities licensed pursuant to this chapter. (q) "Distributor" means a person licensed under this chapter to engage in the business of purchasing medical  cannabis   marijuana  from a licensed cultivator, or medical  cannabis   marijuana  products from a licensed manufacturer, for sale to a licensed dispensary. (r) "Dried flower" means all dead medical  cannabis   marijuana  that has been harvested, dried, cured, or otherwise processed, excluding leaves and stems. (s) "Edible  cannabis   marijuana  product" means manufactured  cannabis   marijuana  that is intended to be used, in whole or in part, for human consumption, including, but not limited to, chewing gum. An edible medical  cannabis   marijuana  product is not considered food as defined by Section 109935 of the Health and Safety Code or a drug as defined by Section 109925 of the Health and Safety Code. (t) "Fund" means the Medical Marijuana Regulation and Safety Act Fund established pursuant to Section 19351. (u) "Identification program" means the universal identification certificate program for commercial medical  cannabis   marijuana  activity authorized by this chapter. (v) "Labor peace agreement" means an agreement between a licensee and a bona fide labor organization that, at a minimum, protects the state's proprietary interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant's business. This agreement means that the applicant has agreed not to disrupt efforts by the bona fide labor organization to communicate with, and attempt to organize and represent, the applicant's employees. The agreement shall provide a bona fide labor organization access at reasonable times to areas in which the applicant's employees work, for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. This type of agreement shall not mandate a particular method of election or certification of the bona fide labor organization. (w) "Licensing authority" means the state agency responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the license. (x) "Cultivation site" means a facility where medical  cannabis   marijuana  is planted, grown, harvested, dried, cured, graded, or trimmed, or that does all or any combination of those activities, that holds a valid state license pursuant to this chapter, and that holds a valid local license or permit. (y) "Manufacturer" means a person that conducts the production, preparation, propagation, or compounding of manufactured medical  cannabis,   marijuana,  as described in subdivision (ae), or medical  cannabis   marijuana  products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages medical  cannabis   marijuana  or medical  cannabis   marijuana  products or labels or relabels its container, that holds a valid state license pursuant to this chapter, and that holds a valid local license or permit. (z) "Testing laboratory" means a facility, entity, or site in the state that offers or performs tests of medical  cannabis   marijuana  or medical  cannabis   marijuana  products and that is both of the following: (1) Accredited by an accrediting body that is independent from all other persons involved in the medical  cannabis   marijuana  industry in the state. (2) Registered with the State Department of Public Health. (aa) "Transporter" means a person issued a state license by the bureau to transport medical  cannabis   marijuana  or medical  cannabis   marijuana  products in an amount above a threshold determined by the bureau between facilities that have been issued a state license pursuant to this chapter. (ab) "Licensee" means a person issued a state license under this chapter to engage in commercial  cannabis   marijuana  activity. (ac) "Live plants" means living medical  cannabis   marijuana  flowers and plants, including seeds, immature plants, and vegetative stage plants. (ad) "Lot" means a batch, or a specifically identified portion of a batch, having uniform character and quality within specified limits. In the case of medical  cannabis   marijuana  or a medical  cannabis   marijuana  product produced by a continuous process, "lot" means a specifically identified amount produced in a unit of time or a quantity in a manner that ensures its having uniform character and quality within specified limits. (ae) "Manufactured cannabis"  or "manufactured marijuana   "  means raw  cannabis   marijuana  that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product. (af) "Manufacturing site" means a location that produces, prepares, propagates, or compounds manufactured medical  cannabis   marijuana  or medical  cannabis   marijuana  products, directly or indirectly, by extraction methods, independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, and is owned and operated by a licensee for these activities. (ag) "Medical cannabis," "medical cannabis product,"  or  "cannabis  product"   product," "medical marijuana," "medical marijuana product," or "marijuana product   "  means a product containing  cannabis,   marijuana,  including, but not limited to, concentrates and extractions, intended to be sold for use by medical  cannabis   marijuana  patients in California pursuant to the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code. For the purposes of this chapter, "medical cannabis"  or "medical marijuana   "  does not include "industrial hemp" as defined by Section 81000 of the Food and Agricultural Code or Section 11018.5 of the Health and Safety Code. (ah) "Nursery" means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of medical  cannabis.   marijuana.  (ai) "Permit," "local license," or "local permit" means an official document granted by a local jurisdiction that specifically authorizes a person to conduct commercial  cannabis   marijuana  activity in the local jurisdiction. (aj) "Person" means an individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit and includes the plural as well as the singular number. (ak) "State license," "license," or "registration" means a state license issued pursuant to this chapter. (al) "Topical cannabis"  or "topical marijuana   "  means a product intended for external use. A topical  cannabis   marijuana  product is not considered a drug as defined by Section 109925 of the Health and Safety Code. (am) "Transport" means the transfer of medical  cannabis   marijuana  or medical  cannabis   marijuana  products from the permitted business location of one licensee to the permitted business location of another licensee, for the purposes of conducting commercial  cannabis   marijuana  activity authorized pursuant to this chapter. SEC. 2. Section 19310.5 is added to the Business and Professions Code, to read: 19310.5. (a) It is the intent of the Legislature to enact a statute that improves the medical marijuana industry's ability to comply with federal law and regulations that would allow improved access to financial services. (b) (1) The State Board of Equalization shall form an advisory group made up of representatives from financial institutions, the medical marijuana industry, and state and federal banking regulators. By July 1, 2017, the board shall submit a report to the Legislature with proposed changes to state law or regulations that will improve financial monitoring of medical marijuana businesses and improve compliance with federal law. (2) A report submitted pursuant to paragraph (1) shall be submitted in compliance with Section 9795 of the Government Code. The requirment for submitting a report imposed in paragraph (1) is inoperative on July 1, 2021, pursuant to Section 10231.5 of the Government Code. (c) The advisory group shall examine strategies, such as the use of automated kiosks for accepting cash payments, integrated point-of-sale systems with state track and trace systems, and other measures that will improve financial monitoring of medical marijuana businesses. SEC. 3. Section 19316 of the Business and Professions Code is amended to read: 19316. (a)  Pursuant   (1)     Except as described in paragraph (2), and pursuant  to Section 7 of Article XI of the California Constitution, a city, county, or city and county may adopt ordinances that establish additional standards, requirements, and regulations for local licenses and permits for commercial  cannabis   marijuana  activity. Any standards, requirements, and regulations regarding health and safety, testing, security, and worker protections established by the state shall be the minimum standards for all licensees statewide.  (2) Packaging safety standards shall be uniform across the state and shall be established by the State Department of Public Health.   (3) For purposes of this subdivision, packaging safety standards do not include packaging requirements related to appellations of origin or other branding or marketing materials.  (b) For facilities issued a state license that are located within the incorporated area of a city, the city shall have full power and authority to enforce this chapter and the regulations promulgated by the bureau or any licensing authority, if delegated by the state. Notwithstanding Sections 101375, 101400, and 101405 of the Health and Safety Code or any contract entered into pursuant thereto, or any other law, the city shall further assume complete responsibility for any regulatory function relating to those licensees within the city limits that would otherwise be performed by the county or any county officer or employee, including a county health officer, without liability, cost, or expense to the county. (c) Nothing in this chapter, or any regulations promulgated thereunder, shall be deemed to limit the authority or remedies of a city, county, or city and county under any provision of law, including, but not limited to, Section 7 of Article XI of the California Constitution. SEC. 4. Section 19319.5 is added to the Business and Professions Code, to read: 19319.5. (a) (1) It shall not be a violation of this chapter or any other state law, and it shall not be a violation of any local ordinance or regulation for a business or research institution engaged in the research of medical marijuana, medical marijuana products, or devices used for the medical use of marijuana or marijuana products, to possess, transport, purchase, or otherwise obtain small amounts of medical marijuana or medical marijuana products, as determined by the bureau but not to exceed eight ounces per month, as necessary to conduct research and development related to medical marijuana or medical marijuana products. (2) Medical marijuana or medical marijuana products subject to this section shall be obtained only from a person or entity licensed pursuant to this chapter, who is permitted to provide or deliver the medical marijuana or medical marijuana product. The business or research institution shall obtain a medical marijuana research permit pursuant to subdivision (b). (b) The bureau shall issue a medical marijuana research permit to allow for permitholders to pursue the research described in subdivision (a). It is the intent of the Legislature to establish minimum requirements for the medical marijuana research permit, including the following: (1) The requirement for all medical marijuana and medical marijuana products used under a medical marijuana research permit to be subject to all requirements of the state's track and trace program established pursuant to this chapter. (2) The requirement that all applicants for a medical marijuana research permit obtain permission to operate from the local jurisdiction in which the applicant intends to conduct the research. (3) The maximum amount of medical marijuana and medical marijuana products that may be obtained per month for research purposes. In no case shall a permitholder obtain more than eight ounces per month for research purposes. SEC. 5. Section 19321 of the Business and Professions Code is amended to read: 19321. (a) The Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health shall promulgate regulations for implementation of their respective responsibilities in the administration of this chapter. (b)  A   Except as described in subdivision (e), a  license issued pursuant to this section shall be valid for 12 months from the date of issuance. The license shall be renewed annually. Each licensing authority shall establish procedures for the renewal of a license. (c) Notwithstanding subdivision (a) of Section 19320, a facility or entity that is operating in compliance with local zoning ordinances and other state and local requirements on or before January 1, 2018, may continue its operations until its application for licensure is approved or denied pursuant to this chapter. In issuing licenses, the licensing authority shall prioritize any facility or entity that can demonstrate to the authority's satisfaction that it was in operation and in good standing with the local jurisdiction by January 1, 2016. (d) Issuance of a state license or a determination of compliance with local law by the licensing authority shall in no way limit the ability of the City of Los Angeles to prosecute any person or entity for a violation of, or otherwise enforce, Proposition D, approved by the voters of the City of Los Angeles on the May 21, 2013, ballot for the city, or the city's zoning laws. Nor may issuance of a license or determination of compliance with local law by the licensing authority be deemed to establish, or be relied upon, in determining satisfaction with the immunity requirements of Proposition D or local zoning law, in court or in any other context or forum.  (e) The bureau may issue temporary permits for business events. It is the intent of the Legislature to establish minimum standards and requirements for temporary permits for medical marijuana and medical marijuana products.  SEC. 6. Section 19322.5 is added to the Business and Professions Code, to read: 19322.5. A licencee may operate as a for-profit business, as a not-for-profit entity, or as a combination of both. SEC. 7. Section 19326 of the Business and Professions Code is amended to read: 19326. (a) A person other than a licensed transporter shall not transport medical  cannabis   marijuana  or medical  cannabis   marijuana  products from one licensee to another licensee, unless otherwise specified in this chapter. (b) All licensees holding cultivation or manufacturing licenses shall send all medical cannabis   marijuana  and medical  cannabis   marijuana  products cultivated or manufactured to a distributor, as defined in Section 19300.5, for quality assurance and inspection by the Type 11 licensee and for a batch testing by a Type 8 licensee prior to distribution to a dispensary. Those licensees holding a Type 10A license in addition to a cultivation license or a manufacturing license shall send all medical  cannabis   marijuana  and medical  cannabis   marijuana  products to a Type 11 licensee for presale inspection and for a batch testing by a Type 8 licensee prior to dispensing any product. The licensing authority shall fine a licensee who violates this subdivision in an amount determined by the licensing authority to be reasonable. (c) (1) Upon receipt of medical  cannabis   marijuana  or medical  cannabis   marijuana  products by a holder of a cultivation or manufacturing license, the Type 11 licensee shall first inspect the product to ensure the identity and quantity of the product and then ensure a random sample of the medical  cannabis   marijuana  or medical  cannabis   marijuana  product is tested by a Type 8 licensee prior to distributing the  batch of medical cannabis or medical cannabis products.   batch.  (2) Upon issuance of a certificate of analysis by the Type 8 licensee that the product is fit for manufacturing or retail, all medical  cannabis   marijuana  and medical  cannabis   marijuana  products shall undergo a quality assurance review by the Type 11 licensee prior to distribution to ensure the quantity and content of the medical  cannabis   marijuana  or medical  cannabis   marijuana  product, and for tracking and taxation purposes by the state. Licensed cultivators and manufacturers shall package or seal all medical  cannabis   marijuana  and medical  cannabis   marijuana  products in tamper-evident packaging and use a unique identifier, as prescribed by the Department of Food and Agriculture, for the purpose of identifying and tracking medical  cannabis   marijuana  or medical  cannabis   marijuana  products. Medical  cannabis   marijuana  and medical  cannabis   marijuana  products shall be labeled as required by Section 19347  , except as otherwise specified in this chapter  . All packaging and sealing shall be completed prior to medical  cannabis   marijuana  or medical  cannabis   marijuana  products being transported or delivered to a licensee, qualified patient, or  caregiver.   caregiver, except as otherwise specified in this chapter. The bureau shall specify the manner in which medical marijuana and medical marijuana products meant for wholesale purposes shall be packaged and sealed prior to transport, testing, quality assurance, quality control testing, or distribution.  (3) This section does not limit the ability of licensed cultivators, manufacturers, and dispensaries to directly enter into contracts with one another indicating the price and quantity of medical  cannabis   marijuana  or medical  cannabis   marijuana  products to be distributed. However, a Type 11 licensee responsible for executing the contract is authorized to collect a fee for the services rendered, including, but not limited to, costs incurred by a Type 8 licensee, as well as applicable state or local taxes and fees. (d) Medical  cannabis   marijuana  and medical  cannabis   marijuana  products shall be tested by a registered testing laboratory, prior to retail sale or dispensing, as follows: (1) Medical  cannabis   marijuana  from dried flower shall, at a minimum, be tested for concentration, pesticides, mold, and other contaminants. (2) Medical  cannabis   marijuana  extracts shall, at a minimum, be tested for concentration and purity of the product. (3) This chapter shall not prohibit a licensee from performing on-site testing for the purposes of quality assurance of the product in conjunction with reasonable business operations. On-site testing by the licensee shall not be certified by the State Department of Public Health. (e) All commercial  cannabis   marijuana  activity shall be conducted between licensees, when these are available. SEC. 8. Section 19328 of the Business and Professions Code is amended to read: 19328. (a)  A   Except as specified in paragraph (9), a  licensee may only hold a state license in up to two separate license categories, as follows: (1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a Type 6 or 7 state license. (2) Type 6 or 7 licensees, or a combination thereof, may also hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license. (3) Type 6 or 7 licensees, or a combination thereof, may also hold a Type 10A state license. (4) Type 10A licensees may also hold either a Type 6 or 7 state license, or a combination thereof. (5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination thereof, may also hold a Type 10A state license. (6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A, or 2B state license, or a combination thereof. (7) Type 11 licensees shall apply for a Type 12 state license, but shall not apply for any other type of state license. (8) Type 12 licensees may apply for a Type 11 state license. (9) A Type 10A licensee may apply for a Type 6 or 7 state license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination of licenses thereof, no more than four acres of total canopy size of cultivation by the licensee is occurring throughout the state during the period that the respective licenses are valid. All cultivation pursuant to this section shall comply with local ordinances.  This paragraph shall become inoperative on January 1, 2026.   By January 1, 2025, the bureau shall review the appropriateness of continuing licensure under this paragraph and shall reports its recommendation for elimination or extension of these provisions to the Legislature.  (b) Except as provided in subdivision (a), a person or entity that holds a state license is prohibited from licensure for any other activity authorized under this chapter, and is prohibited from holding an ownership interest in real property, personal property, or other assets associated with or used in any other license category. (c) (1) In a jurisdiction that adopted a local ordinance, prior to July 1, 2015, allowing or requiring qualified businesses to cultivate, manufacture, and dispense medical  cannabis   marijuana  or medical  cannabis   marijuana  products, with all commercial  cannabis   marijuana  activity being conducted by a single qualified business, upon licensure that business shall not be subject to subdivision (a) if it meets all of the following conditions: (A) The business was cultivating, manufacturing, and dispensing medical  cannabis   marijuana  or medical  cannabis   marijuana  products on July 1, 2015, and has continuously done so since that date. (B) The business has been in full compliance with all applicable local ordinances at all times prior to licensure. (C) The business is registered with the State Board of Equalization. (2) A business licensed pursuant to paragraph (1) is not required to conduct all cultivation or manufacturing within the bounds of a local jurisdiction, but all cultivation and manufacturing shall have commenced prior to July 1, 2015, and have been in full compliance with applicable local ordinances. (d) This section shall remain in effect only until January 1, 2026, and as of that date is repealed. SEC. 9. Section 19328 is added to the Business and Professions Code, to read: 19328. (a) A licensee may only hold a state license in up to two separate license categories, as follows: (1) Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a Type 6 or 7 state license. (2) Type 6 or 7 licensees, or a combination thereof, may also hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license. (3) Type 6 or 7 licensees, or a combination thereof, may also hold a Type 10A state license. (4) Type 10A licensees may also hold either a Type 6 or 7 state license, or a combination thereof. (5) Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination thereof, may also hold a Type 10A state license. (6) Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A, or 2B state license, or a combination thereof. (7) Type 11 licensees shall apply for a Type 12 state license, but shall not apply for any other type of state license. (8) Type 12 licensees may apply for a Type 11 state license. (9) A Type 10A licensee may apply for a Type 6 or 7 state license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination of licenses thereof, no more than four acres of total canopy size of cultivation by the licensee is occurring throughout the state during the period that the respective licenses are valid. All cultivation pursuant to this section shall comply with local ordinances. (b) Except as provided in subdivision (a), a person or entity that holds a state license is prohibited from licensure for any other activity authorized under this chapter, and is prohibited from holding an ownership interest in real property, personal property, or other assets associated with or used in any other license category. (c) This section shall become operative on January 1, 2026. SEC. 10. Section 19332 of the Business and Professions Code is amended to read: 19332. (a) The Department of Food and Agriculture shall promulgate regulations governing the licensing of indoor and outdoor cultivation sites. (b) The Department of Pesticide Regulation, in consultation with the Department of Food and Agriculture, shall develop standards for the use of pesticides in cultivation, and maximum tolerances for pesticides and other foreign object residue in harvested  cannabis.   marijuana.  (c) The State Department of Public Health shall develop standards for the production and labeling of all edible medical  cannabis   marijuana  products. (d) The Department of Food and Agriculture, in consultation with the Department of Fish and Wildlife and the State Water Resources Control Board, shall ensure that individual and cumulative effects of water diversion and discharge associated with cultivation do not affect the instream flows needed for fish spawning, migration, and rearing, and the flows needed to maintain natural flow variability. (e) The Department of Food and Agriculture shall have the authority necessary for the implementation of the regulations it adopts pursuant to this chapter. The regulations shall do all of the following: (1) Provide that weighing or measuring devices used in connection with the sale or distribution of medical  cannabis   marijuana  are required to meet standards equivalent to Division 5 (commencing with Section 12001). (2) Require that  cannabis   marijuana  cultivation by licensees is conducted in accordance with state and local laws related to land conversion, grading, electricity usage, water usage, agricultural discharges, and similar matters. Nothing in this chapter, and no regulation adopted by the department, shall be construed to supersede or limit the authority of the State Water Resources Control Board, regional water quality control boards, or the Department of Fish and Wildlife to implement and enforce their statutory obligations or to adopt regulations to protect water quality, water supply, and natural resources. (3) Establish procedures for the issuance and revocation of unique identifiers for activities associated with a  cannabis   marijuana  cultivation license, pursuant to Article 8 (commencing with Section 19337). All  cannabis   marijuana  shall be labeled with the unique identifier issued by the Department of Food and Agriculture. (4) Prescribe standards, in consultation with the bureau, for the reporting of information as necessary related to unique identifiers, pursuant to Article 8 (commencing with Section 19337). (f) The Department of Pesticide Regulation, in consultation with the State Water Resources Control Board, shall promulgate regulations that require that the application of pesticides or other pest control in connection with the indoor or outdoor cultivation of medical  cannabis   marijuana  meets standards equivalent to Division 6 (commencing with Section 11401) of the Food and Agricultural Code and its implementing regulations. (g) State cultivator license types issued by the Department of Food and Agriculture include: (1) Type 1, or "specialty outdoor," for outdoor cultivation using no artificial lighting of less than or equal to 5,000 square feet of total canopy size on one premises, or up to 50 mature plants on noncontiguous plots. (2) Type 1A, or "specialty indoor," for indoor cultivation using exclusively artificial lighting of less than or equal to 5,000 square feet of total canopy size on one premises. (3) Type 1B, or "specialty mixed-light," for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, of less than or equal to 5,000 square feet of total canopy size on one premises. (4) Type 2, or "small outdoor," for outdoor cultivation using no artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises. (5) Type 2A, or "small indoor," for indoor cultivation using exclusively artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises. (6) Type 2B, or "small mixed-light," for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises. (7) Type 3, or "outdoor," for outdoor cultivation using no artificial lighting from 10,001 square feet to one acre, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type. (8) Type 3A, or "indoor," for indoor cultivation using exclusively artificial lighting between 10,001 and 22,000 square feet, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type. (9) Type 3B, or "mixed-light," for cultivation using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority, between 10,001 and 22,000 square feet, inclusive, of total canopy size on one premises. The Department of Food and Agriculture shall limit the number of licenses allowed of this type. (10) Type 4, or "nursery," for cultivation of medical  cannabis   marijuana  solely as a nursery. Type 4 licensees may transport live  plants.   immature plants, subject to the tracking, security, and related requirements of Sections 19334 to 19338, inclusive.  SEC. 11. Section 19334 of the Business and Professions Code is amended to read: 19334. (a) State licenses to be issued by the Department of Consumer Affairs are as follows: (1)  (A)    "Dispensary," as defined in this chapter. This license shall allow for delivery pursuant to Section 19340.  (B) "Virtual Dispensary" for a license to permit the retail sale of medical marijuana and medical marijuana products without the requirement of operating a storefront. All virtual dispensaries shall maintain a commercial facility at which all licensed activities are performed under the license, with the exception of direct delivery to a qualified patient or primary caregiver. Virtual dispensaries shall be subject to all of the provisions of this chapter that relate to dispensaries unless specifically excluded.  (2) "Distributor," for the distribution of medical  cannabis   marijuana  and medical  cannabis   marijuana  products from manufacturer to dispensary. A Type 11 licensee shall hold a Type 12, or transporter, license and register each location where product is stored for the purposes of distribution. A Type 11 licensee shall not hold a license in a cultivation, manufacturing, dispensing, or testing license category and shall not own, or have an ownership interest in, a facility licensed in those categories other than a security interest, lien, or encumbrance on property that is used by a licensee. A Type 11 licensee shall be bonded and insured at a minimum level established by the licensing authority. (3) "Transport," for transporters of medical  cannabis   marijuana  or medical  cannabis   marijuana  products between licensees. A Type 12 licensee shall be bonded and insured at a minimum level established by the licensing authority. (4) "Special dispensary status" for dispensers who have no more than three licensed dispensary facilities. This license shall allow for delivery where expressly authorized by local ordinance. (b) The bureau shall establish minimum security requirements for the commercial transportation and delivery of medical  cannabis   marijuana  and  medical marijuana  products. (c) A licensed dispensary shall implement sufficient security measures to both deter and prevent unauthorized entrance into areas containing medical  cannabis   marijuana  or medical  cannabis   marijuana  products and theft of medical  cannabis   marijuana  or medical  cannabis   marijuana  products at the dispensary. These security measures shall include, but not be limited to, all of the following: (1) Preventing individuals from remaining on the premises of the dispensary if they are not engaging in activity expressly related to the operations of the dispensary. (2) Establishing limited access areas accessible only to authorized dispensary personnel. (3) Storing all finished medical  cannabis   marijuana  and medical  cannabis   marijuana  products in a secured and locked room, safe, or vault, and in a manner as to prevent diversion, theft, and loss, except for limited amounts of  cannabis   marijuana  used for display purposes, samples, or immediate sale.  (4) Requiring all medical marijuana and medical marijuana products used for display purposes, samples, or immediate sale to be stored out of reach of any individual who is not employed by the dispensary.  (d) A dispensary shall notify the licensing authority and the appropriate law enforcement authorities within 24 hours after discovering any of the following: (1) Significant discrepancies identified during inventory. The level of significance shall be determined by the bureau. (2) Diversion, theft, loss, or any criminal activity involving the dispensary or any agent or employee of the dispensary. (3) The loss or unauthorized alteration of records related to  cannabis,   marijuana,  registered qualifying patients, primary caregivers, or dispensary employees or agents. (4) Any other breach of security. SEC. 12. Section 19340 of the Business and Professions Code is amended to read: 19340. (a) Deliveries, as defined in this chapter, can only be made by a dispensary and in a city, county, or city and county that does not explicitly prohibit it by local ordinance. (b) Upon approval of the licensing authority, a licensed dispensary that delivers medical  cannabis   marijuana  or medical  cannabis   marijuana  products shall comply with both of the following: (1) The city, county, or city and county in which the licensed dispensary is located, and in which each delivery is made, do not explicitly by ordinance prohibit  delivery, as defined in Section 19300.5.   delivery.  (2) All employees of a dispensary delivering medical  cannabis   marijuana  or medical  cannabis   marijuana  products shall carry a copy of the dispensary's current license authorizing those services with them during deliveries and the employee's government-issued identification, and shall present that license and identification upon request to state and local law enforcement, employees of regulatory authorities, and other state and local agencies enforcing this chapter. (c) A county shall have the authority to impose a tax, pursuant to Article 11 (commencing with Section 19348), on each delivery transaction completed by a licensee. (d) During delivery, the licensee shall maintain a physical copy of the delivery request and shall make it available upon request of the licensing authority and law enforcement officers. The delivery request documentation shall comply with state and federal law regarding the protection of confidential medical information. (e) The qualified patient or primary caregiver requesting the delivery shall maintain a copy of the delivery request and shall make it available, upon request, to the licensing authority and law enforcement officers. (f) A local jurisdiction shall not prevent carriage of medical  cannabis   marijuana  or medical  cannabis   marijuana  products on public roads by a licensee acting in compliance with this chapter.  (g) The bureau shall establish the following regulations regarding the delivery of medical marijuana and medical marijuana products:   (1) Employee training standards that ensure qualified patients and primary caregivers have adequate information regarding the medical marijuana or medical marijuana products that a dispensary delivers, and to provide employees with information regarding state and federal laws and regulations.   (2) Protocols to provide qualified patients and primary caregivers with information regarding laws, regulations, and policies relevant to providing medical marijuana or medical marijuana products to qualified patients and primary caregivers in the local jurisdiction in which the dispensary is located and the area in which the medical marijuana or medical marijuana products are being delivered.   (3) A system for registering and maintaining the status of all delivery personnel of dispensaries, including protocols for suspending the registrations of individuals who move out of this state, who discontinue employment at a dispensary, or who are under suspension or inspection by a dispensary or local or state law enforcement. This system shall be made available to local and state law enforcement, qualified patients, primary caregivers, and any other entity deemed appropriate by the bureau. Any fees associated with registration of delivery personnel shall be set by the bureau and shall not exceed the reasonable amount necessary to cover the costs to regulate the delivery personnel and maintain the system.   (4) The operating hours for delivery.   (5) A requirement that each dispensary employee who delivers medical marijuana or medical marijuana products contract with only one dispensary at time.   (6) Minimum requirements for patient information that is stored by each delivery operation, including, but not limited to, the contact information for the patient and, if applicable, his or her primary caregiver, the physician's recommendation, and the condition for which the medical marijuana or medical marijuana product is being recommended. All identifying information obtained about a qualified patient or primary caregiver shall be obtained and stored in compliance with the privacy and security rules of the Health Insurance Portability and Accountability Act (HIPAA).   (h) The bureau shall establish requirements for all dispensary employees who deliver medical marijuana or medical marijuana products, including, but not limited to, the following:   (1) Possession of a valid driver's license issued by the Department of Motor Vehicles.   (2) Provide the bureau with a current address.   (3) Provide the bureau with necessary automobile and insurance information.   (4) Registration with the bureau.  SEC. 13. Section 19342 of the Business and Professions Code is amended to read: 19342. (a) For the purposes of testing medical  cannabis   marijuana  or medical  cannabis   marijuana  products, licensees shall use a licensed testing laboratory that has adopted a standard operating procedure using methods consistent with general requirements for the competence of testing and calibration activities, including sampling, using standard methods established by the International Organization for Standardization, specifically ISO/IEC 17020 and ISO/IEC 17025 to test medical  cannabis   marijuana  and medical  cannabis   marijuana  products that are approved by an accrediting body that is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement. (b) An agent of a licensed testing laboratory shall obtain samples according to a statistically valid sampling method for each lot. (c) A licensed testing laboratory shall analyze samples according to  either of  the following:  (1) The most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia.   (2) Scientifically valid methodology that is demonstrably equal or superior to paragraph (1), in the opinion of the accrediting body.   (1) In the final form which the patient will consume the medical marijuana or medical marijuana product, including moisture content and other attributes.   (2) A scientifically valid methodology approved by the accrediting body.  (d) If a test result falls outside the specifications authorized by law or regulation, the licensed testing laboratory shall follow a standard operating procedure to confirm or refute the original result. (e) A licensed testing laboratory shall destroy the remains of the sample of medical  cannabis   marijuana  or medical  cannabis   marijuana  product upon completion of the analysis. SEC. 14. Section 19344 of the Business and Professions Code is amended to read: 19344. (a) A licensed testing laboratory shall issue a certificate of analysis for each lot, with supporting data, to report both of the following: (1) Whether the chemical profile of the lot conforms to the specifications of the lot for compounds, including, but not limited to, all of the following: (A) Tetrahydrocannabinol (THC). (B) Tetrahydrocannabinolic Acid (THCA). (C) Cannabidiol (CBD). (D) Cannabidiolic Acid (CBDA). (E) The terpenes described in the most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia. (F) Cannabigerol (CBG). (G) Cannabinol (CBN). (H) Any other compounds required by the State Department of Public Health. (2) That the presence of contaminants does not exceed the levels that are the lesser of either the most current version of the American Herbal Pharmacopoeia monograph or the State Department of Public Health. For purposes of this paragraph, contaminants includes, but is not limited to, all of the following: (A) Residual solvent or processing chemicals. (B) Foreign material, including, but not limited to, hair, insects, or similar or related adulterant. (C) Microbiological impurity, including total aerobic microbial count, total yeast mold count, P. aeruginosa, aspergillus spp., s. aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A. (D) Whether the batch is within specification for odor and appearance. (b) Residual levels of volatile organic compounds shall be below  the lesser of either the specifications set by the United States Pharmacopeia (U.S.P. Chapter 467) or  those set by the State Department of Public Health. SEC. 15. Section 19350 of the Business and Professions Code is amended to read: 19350. Each licensing authority shall establish a scale of application, licensing, and renewal fees, based upon the cost of enforcing this chapter, as follows: (a) Each licensing authority shall charge each licensee a licensure and renewal fee, as applicable. The licensure and renewal fee shall be calculated to cover the costs of administering this chapter. The licensure fee may vary depending upon the varying costs associated with administering the various regulatory requirements of this chapter as they relate to the nature and scope of the different licensure activities, including, but not limited to, the track and trace program required pursuant to Section 19335, but shall not exceed the reasonable regulatory costs to the licensing authority. (b) The total fees assessed pursuant to this chapter shall be set at an amount that will fairly and proportionately generate sufficient total revenue to fully cover the total costs of administering this chapter. (c) All  state  license fees shall be set on a scaled basis by the licensing authority, dependent on the size of the business. (d) The licensing authority shall deposit all fees collected  pursuant to this chapter  in a fee account specific to that licensing authority, to be established in the Medical Marijuana Regulation and Safety Act Fund. Moneys in the licensing authority fee accounts shall be used, upon appropriation of the Legislature, by the designated licensing authority for the administration of this chapter.  (e) The fees established by licensing authorities pursuant to this chapter shall be in addition to, and shall not limit, any fees or taxes imposed by a city, county, or city and county in which the licensee operates.  SEC. 16. Section 12025 of the Fish and Game Code is amended to read: 12025. (a) In addition to any penalties imposed by any other law, a person found to have violated the code sections described in paragraphs (1) to (11), inclusive, in connection with the production or cultivation of a controlled substance on land under the management of the Department of Parks and Recreation, the Department of Fish and Wildlife, the Department of Forestry and Fire Protection, the State Lands Commission, a regional park district, the United States Forest Service, or the United States Bureau of Land Management, or within the respective ownership of a timberland production zone, as defined in Chapter 6.7 (commencing with Section 51100) of Part 1 of Division 1 of Title 5 of the Government Code, of more than 50,000 acres, or while trespassing on other public or private land in connection with the production or cultivation of a controlled substance, shall be liable for a civil penalty as follows: (1) A person who violates Section 1602 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation. (2) A person who violates Section 5650 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation. (3) A person who violates Section 5652 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation. (4) A person who violates subdivision (a) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation. (5) A person who violates paragraph (1) of subdivision (h) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation. (6) A person who violates subdivision (b) of Section 374.8 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than forty thousand dollars ($40,000) for each violation. (7) A person who violates Section 384a of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation. (8) A person who violates subdivision (a) of Section 4571 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation. (9) A person who violates Section 4581 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation. (10) A person who violates Section 2000 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation. (11) A person who violates Section 2002 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation. (b) (1) In addition to any penalties imposed by any other law, a person found to have violated the code sections described in this subdivision in connection with the production or cultivation of a controlled substance on land that the person owns, leases, or otherwise uses or occupies with the consent of the landowner shall be liable for a civil penalty as follows: (A) A person who violates Section 1602 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation. (B) A person who violates Section 5650 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation. (C) A person who violates Section 5652 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation. (D) A person who violates subdivision (a) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation. (E) A person who violates paragraph (1) of subdivision (h) of Section 374.3 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation. (F) A person who violates subdivision (b) of Section 374.8 of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than twenty thousand dollars ($20,000) for each violation. (G) A person who violates Section 384a of the Penal Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation. (H) A person who violates subdivision (a) of Section 4571 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation. (I) A person who violates Section 4581 of the Public Resources Code in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation. (J) A person who violates Section 2000 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation. (K) A person who violates Section 2002 in connection with the production or cultivation of a controlled substance is subject to a civil penalty of not more than eight thousand dollars ($8,000) for each violation. (2) Each day that a violation of a code section described in this subdivision occurs or continues to occur shall constitute a separate violation. (c) The civil penalty imposed for each separate violation pursuant to this section is in addition to any other civil penalty imposed for another violation of this section, or any violation of any other law. (d) All civil penalties imposed or collected by a court for a separate violation pursuant to this section shall not be considered to be fines or forfeitures, as described in Section 13003, and shall be apportioned in the following manner: (1) Thirty percent shall be distributed to the county in which the violation was committed pursuant to Section 13003. The county board of supervisors shall first use any revenues from those penalties to reimburse the costs incurred by the district attorney or city attorney in investigating and prosecuting the violation. (2) (A) Thirty percent shall be distributed to the investigating agency to be used to reimburse the cost of any investigation directly related to the violations described in this section. (B) If the department receives reimbursement pursuant to this paragraph for activities funded pursuant to subdivision (f) of Section 4629.6 of the Public Resources Code, the reimbursement funds shall be deposited into the Timber Regulation and Forest Restoration Fund, created by Section 4629.3 of the Public Resources Code, if there is an unpaid balance for a loan authorized by subdivision (f) of Section 4629.6 of the Public Resources Code. (3) Forty percent shall be deposited into the Timber Regulation and Forest Restoration Fund, created by Section 4629.3 of the Public Resources Code, and used for grants authorized pursuant to Section 4629.6 of the Public Resources Code that improve forest health by remediating former marijuana growing operations. (e) Civil penalties authorized pursuant to this section may be imposed administratively by the department if all of the following occur: (1) The chief deputy director or law enforcement division assistant chief in charge of marijuana-related enforcement issues a complaint to any person or entity on which an administrative civil penalty may be imposed pursuant to this section. The complaint shall allege the act or failure to act that constitutes a violation, any facts related to natural resources impacts, the provision of law authorizing the civil penalty to be imposed, and the proposed penalty amount. (2) The complaint and order is served by personal notice or certified mail and informs the party served that the party may request a hearing not later than 20 days from the date of service. If a hearing is requested, it shall be scheduled before the director or his or her designee, which designee shall not be the chief deputy or assistant chief issuing the complaint and order. A request for a hearing shall contain a brief statement of the material facts the party claims support his or her contention that no administrative penalty should be imposed or that an administrative penalty of a lesser amount is warranted. A party served with a complaint pursuant to this subdivision waives his or her right to a hearing if a hearing is not requested within 20 days of service of the complaint, in which case the order imposing the administrative penalty shall become final. (3) The director, or his or her designee, shall control the nature and order of hearing proceedings. Hearings shall be informal in nature, and need not be conducted according to the technical rules relating to evidence. The director or his or her designee shall issue a final order within 45 days of the close of the hearing. A copy of the final order shall be served by certified mail upon the party served with the complaint. (4) A party may obtain review of the final order by filing a petition for a writ of mandate with the superior court within 30 days of the date of service of the final order. The administrative penalty shall be due and payable to the department within 60 days after the time to seek judicial review has expired, or, where the party did not request a hearing of the order, within 20 days after the order imposing an administrative penalty becomes final. (5) The department may adopt regulations to implement this subdivision. (f) All administrative penalties imposed or collected by the department for a separate violation pursuant to this section shall not be considered to be fines or forfeitures, as described in Section 13003, and shall be deposited into the Timber Regulation and Forest Restoration Fund, created by Section 4629.3 of the Public Resources Code, to repay any unpaid balance of a loan authorized by subdivision (f) of Section 4629.6 of the Public Resources Code. Any remaining funds from administrative penalties collected pursuant to this section shall be apportioned in the following manner: (1) Fifty percent shall be deposited into the Timber Regulation and Forest Restoration Fund for grants authorized pursuant to subdivision (h) of Section 4629.6 of the Public Resources Code, with priority given to grants that improve forest health by remediating former marijuana growing operations. (2) Fifty percent shall be deposited into the Fish and Game Preservation Fund. (g) Any civil penalty imposed pursuant to this section for the violation of an offense described in paragraph (4), (5), or (6) of subdivision (a) or subparagraph (D), (E), or (F) of paragraph (1) of subdivision (b) for which the person was convicted shall be offset by the amount of any restitution ordered by a criminal court. (h) For purposes of this section, "controlled substance" has the same meaning as defined in Section 11007 of the Health and Safety Code.  (i) This section does not apply to any activity in compliance with the Medical Marijuana Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code).  SEC. 17. Section 12029 of the Fish and Game Code is amended to read: 12029. (a) The Legislature finds and declares all of the following: (1) The environmental impacts associated with marijuana cultivation have increased, and unlawful water diversions for marijuana irrigation have a detrimental effect on fish and wildlife and their habitat, which are held in trust by the state for the benefit of the people of the state. (2) The remediation of existing marijuana cultivation sites is often complex and the permitting of these sites requires greater department staff time and personnel expenditures. The potential for marijuana cultivation sites to significantly impact the state's fish and wildlife resources requires immediate action on the part of the department's lake and streambed alteration permitting staff. (b) In order to address unlawful water diversions and other violations of the Fish and Game Code associated with marijuana cultivation, the department shall establish the watershed enforcement program to facilitate the investigation, enforcement, and prosecution of these offenses. (c) The department, in coordination with the State Water Resources Control Board, shall establish a permanent multiagency task force to address the environmental impacts of marijuana cultivation. The multiagency task force, to the extent feasible and subject to available Resources, shall expand its enforcement efforts on a statewide level to ensure the reduction of adverse impacts of marijuana cultivation on fish and wildlife and their habitats throughout the state. (d) In order to facilitate the remediation and permitting of marijuana cultivation sites, the department shall adopt regulations to enhance the fees on  any entity   medical-cannabis-cultivation-   related activities  subject to Section 1602 for marijuana cultivation sites that require remediation. The fee schedule established pursuant to this subdivision shall not exceed the fee limits in Section 1609. SEC. 18. Section 11352 of the Health and Safety Code is amended to read: 11352. (a) Except as otherwise provided in this division, every person who transports, imports into this state, sells, furnishes, administers, or gives away, or offers to transport, import into this state, sell, furnish, administer, or give away, or attempts to import into this state or transport (1) any controlled substance specified in subdivision (b), (c), or (e), or paragraph (1) of subdivision (f) of Section 11054, specified in paragraph (14), (15), or (20) of subdivision (d) of Section 11054, or specified in subdivision (b) or (c) of Section 11055, or specified in subdivision (h) of Section 11056, or (2) any controlled substance classified in Schedule III, IV, or V which is a narcotic drug, unless upon the written prescription of a physician, dentist, podiatrist, or veterinarian licensed to practice in this state, shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for three, four, or five years. (b) Notwithstanding the penalty provisions of subdivision (a), any person who transports  any   a  controlled substances specified in subdivision (a) within this state from one county to another noncontiguous county shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for three, six, or nine years. (c) For purposes of this section, "transports" means to transport for sale. (d) This section does not preclude or limit the prosecution of an individual for aiding and abetting the commission of, or conspiring to commit, or acting as an accessory to, any act prohibited by this section.  (e) This section does not apply to commercial marijuana activity engaged in by a person or entity licensed pursuant to the Medical Marijuana Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code).  SEC. 19. Section 11362.765 of the Health and Safety Code is amended to read: 11362.765. (a) Subject to the requirements of this article, the individuals specified in subdivision (b) shall not be subject, on that sole basis, to criminal liability under Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570. However, nothing in this section shall authorize the individual to smoke or otherwise consume marijuana unless otherwise authorized by this article, nor shall anything in this section authorize any individual or group to cultivate or distribute marijuana  for profit.   in any manner other than as set forth in the Medical Marijuana Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300)   of Division 8 of the Business and Professions Code) or as described in the Compassionate Use Act of 1996.  (b) Subdivision (a) shall apply to all of the following: (1) A qualified patient or a person with an identification card who transports or processes marijuana for his or her own personal medical use. (2) A designated primary caregiver who transports, processes, administers, delivers, or gives away marijuana for medical purposes, in amounts not exceeding those established in subdivision (a) of Section 11362.77, only to the qualified patient of the primary caregiver, or to the person with an identification card who has designated the individual as a primary caregiver. (3) Any individual who provides assistance to a qualified patient or a person with an identification card, or his or her designated primary caregiver, in administering medical marijuana to the qualified patient or person or acquiring the skills necessary to cultivate or administer marijuana for medical purposes to the qualified patient or person. (c) A primary caregiver who receives compensation for actual expenses, including reasonable compensation incurred for services provided to an eligible qualified patient or person with an identification card to enable that person to use marijuana under this article, or for payment for out-of-pocket expenses incurred in providing those services, or both, shall not, on the sole basis of that fact, be subject to prosecution or punishment under Section 11359 or 11360. SEC. 20. Section 11362.775 of the Health and Safety Code is amended to read: 11362.775. (a) Subject to subdivision (b), qualified patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards, who associate within the State of California in order collectively or cooperatively to cultivate  cannabis   marijuana  for medical purposes, shall not solely on the basis of that fact be subject to state criminal sanctions under Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570.  A collective or cooperative that operates pursuant to this section may operate for   profit, not for profit, or any combination thereof.  (b) This section shall remain in effect only until one year after the Bureau of Medical Marijuana Regulation posts a notice on its Internet Web site that the licensing authorities have commenced issuing licenses pursuant to the Medical Marijuana Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code), and is repealed upon  issuance of licenses.   that date.  SEC. 21. Section 11379 of the Health and Safety Code is amended to read: 11379. (a) Except as otherwise provided in subdivision (b) and in Article 7 (commencing with Section  4211)   4110)  of Chapter 9 of Division 2 of the Business and Professions Code, every person who transports, imports into this state, sells, furnishes, administers, or gives away, or offers to transport, import into this state, sell, furnish, administer, or give away, or attempts to import into this state or transport any controlled substance which is (1) classified in Schedule III, IV, or V and which is not a narcotic drug, except subdivision (g) of Section 11056, (2) specified in subdivision (d) of Section 11054, except paragraphs (13), (14), (15), (20), (21), (22), and (23) of subdivision (d), (3) specified in paragraph (11) of subdivision (c) of Section 11056, (4) specified in paragraph (2) or (3) of subdivision (f) of Section 11054, or (5) specified in subdivision (d) or (e), except paragraph (3) of subdivision (e), or specified in subparagraph (A) of paragraph (1) of subdivision (f), of Section 11055, unless upon the prescription of a physician, dentist, podiatrist, or veterinarian, licensed to practice in this state, shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for a period of two, three, or four years. (b) Notwithstanding the penalty provisions of subdivision (a), any person who transports any controlled substances specified in subdivision (a) within this state from one county to another noncontiguous county shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for three, six, or nine years. (c) For purposes of this section, "transports" means to transport for sale. (d) Nothing in this section is intended to preclude or limit prosecution under an aiding and abetting theory, accessory theory, or a conspiracy theory.  (e) This section does not apply to commercial marijuana activity engaged in by a person or entity licensed pursuant to the Medical Marijuana Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code).