An act to amend Sections 19322 and 19323 of, and to add Section 19326.5 to, the Business and Professions Code, relating to medical cannabis.

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


SECTION 1.
Section 19322 of the Business and Professions Code is amended to read:
19322.
(a) A person shall not submit an application for a state license issued by a licensing authority pursuant to this chapter unless that person has received a license, permit, or authorization from the local jurisdiction. An applicant for any type of state license issued pursuant to this chapter shall do all of the following:
(1) Electronically submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and arrests, and information as to the existence and content of a record of state or federal convictions and arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance, pending trial or appeal.
(A) The Department of Justice shall provide a response to the licensing authority pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.
(B) The licensing authority shall request from the Department of Justice subsequent notification service, as provided pursuant to Section 11105.2 of the Penal Code, for applicants.
(C) The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.
(2) Provide documentation issued by the local jurisdiction in which the proposed business is operating certifying that the applicant is or will be in compliance with all local ordinances and regulations.
(3) Provide evidence of the legal right to occupy and use the proposed location. For an applicant seeking a cultivator, distributor, manufacturing, testing, transporter, or dispensary license, provide a statement from the owner of real property or their agent where the cultivation, distribution, manufacturing, testing, transport, or dispensing of commercial medical cannabis activities will occur, as proof to demonstrate the landowner has acknowledged and consented to permit cultivation, distribution, manufacturing, testing, transport, or dispensary activities to be conducted on the property by the tenant applicant.
(4) If the application is for a cultivator or a dispensary, provide evidence that the proposed location is located beyond at least a 600-foot radius from a school, as required by Section 11362.768 of the Health and Safety Code.
(5) Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.
(6) (A) For an applicant with 20 or more employees, provide a statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement.
(B) For the purposes of this paragraph, “employee” does not include a supervisor.
(C) For purposes of this paragraph, “supervisor” means an individual having authority, in the interest of the licensee, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
(7) Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.
(8) Provide any other information required by the licensing authority.
(9) For an applicant seeking a cultivation license, provide a statement declaring the applicant is an “agricultural employer,” as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code), to the extent not prohibited by law.
(10) Pay all applicable fees required for licensure by the licensing authority.
(11) Provide proof of a bond to cover the costs of destruction of medical cannabis or medical cannabis products if necessitated by a violation of licensing requirements.
(b) For applicants seeking licensure to cultivate, distribute, manufacture, test, or dispense medical cannabis or medical cannabis products, the application shall also include a detailed description of the applicant’s operating procedures for all of the following, as required by the licensing authority:
(1) Cultivation.
(2) Extraction and infusion methods.
(3) The transportation process.
(4) Inventory procedures.
(5) Quality control procedures.
(6) Security protocols.
(c) On and after July 1, 2018, an applicant with 20 or more employees shall attest on the application that the applicant will implement an employee training program approved by the licensing authority within one year of licensure, pursuant to Section 19326.5.
SEC. 2.
Section 19323 of the Business and Professions Code is amended to read:
19323.
(a) A licensing authority shall deny an application if the applicant or the premises for which a state license is applied does not qualify for licensure under this chapter or the rules and regulations for the state license.
(b) A licensing authority may deny an application for licensure or renewal of a state license, or issue a conditional license, if any of the following conditions apply:
(1) Failure to comply with the provisions of this chapter or any rule or regulation adopted pursuant to this chapter, including, but not limited to, any requirement imposed to protect natural resources, instream flow, and water quality pursuant to subdivision (a) of Section 19332.
(2) Conduct that constitutes grounds for denial of licensure pursuant to Chapter 2 (commencing with Section 480) of Division 1.5.
(3) The applicant has failed to provide information required by the licensing authority.
(4) The applicant or licensee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, except that if the licensing authority determines that the applicant or licensee is otherwise suitable to be issued a license and granting the license would not compromise public safety, the licensing authority shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the applicant, and shall evaluate the suitability of the applicant or licensee to be issued a license based on the evidence found through the review. In determining which offenses are substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, the licensing authority shall include, but not be limited to, the following:
(A) A felony conviction for the illegal possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance.
(B) A violent felony conviction, as specified in subdivision (c) of Section 667.5 of the Penal Code.
(C) A serious felony conviction, as specified in subdivision (c) of Section 1192.7 of the Penal Code.
(D) A felony conviction involving fraud, deceit, or embezzlement.
(5) The applicant, or any of its officers, directors, or owners, is a licensed physician making patient recommendations for medical cannabis pursuant to Section 11362.7 of the Health and Safety Code.
(6) The applicant or any of its officers, directors, or owners has been subject to fines or penalties for cultivation or production of a controlled substance on public or private lands pursuant to Section 12025 or 12025.1 of the Fish and Game Code.
(7) The applicant, or any of its officers, directors, or owners, has been sanctioned by a licensing authority or a city, county, or city and county for unlicensed commercial cannabis activities or has had a license revoked under this chapter in the three years immediately preceding the date the application is filed with the licensing authority.
(8) Failure to obtain and maintain a valid seller’s permit required pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.
(9) The applicant or any of its officers, directors, owners, employees, or authorized agents have failed to comply with any operating procedure required pursuant to subdivision (b) of Section 19322.
(10) Conduct that constitutes grounds for disciplinary action pursuant to this chapter.
(c) On and after July 1, 2018, the licensing authority shall deny an application of an applicant with 20 or more employees unless the applicant attests on the application that the applicant will implement an employee training program approved by the licensing authority within one year of licensure, pursuant to Section 19326.5.
SEC. 3.
Section 19326.5 is added to the Business and Professions Code, to read:
19326.5.
(a) A licensee shall implement an employee training program to educate, inform, and train the licensee’s employees on compliance with this chapter. A licensee may employ or contract with a third-party provider to provide the employee training program. An employee training program shall include, but is not limited to, training on applicable statutory requirements, industry best practices, occupational health and safety standards, and workplace protections.
(b) (1) Each licensing authority shall adopt standards for the approval of employee training programs. Those standards shall prohibit approval of an employee training program provided by or through an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards.
Those standards shall also prohibit employee training programs provided by licensees except when a licensee provides a training program to its own employees.
(2) A licensing authority may approve a workplace training organization as a third-party provider of an employee training program. For purposes of this paragraph, a “workplace training organization” is a labor union organization representing wage earners or salaried employees for mutual aid and protection and for dealing collectively with cannabis employers. A licensing authority shall not be limited to approving workplace training organizations as third-party providers of employee training
programs.
programs
; however, a licensing authority shall not approve a third-party provider of an employee training program if the provider is a licensee, except as provided in paragraph (1).
(c) A licensing authority shall revoke the license of any licensee with 20 or more employees that fails to implement an employee training program as required by this section within one year of licensure.
(d) Each licensing authority shall charge a fee for approving an employee training program. Revenues collected pursuant to this subdivision shall be deposited in the appropriate fee account within the Medical
Marijuana
Cannabis
Regulation and Safety Act Fund established pursuant to Section
19350.
19351.
Total fees assessed shall not exceed the reasonable regulatory costs. Each licensing authority may adjust fees as needed, but no more than once per year, to generate sufficient revenue to cover the costs of employee training program approval.
(e) This section shall become operative on July 1, 2018.
SEC. 4.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

Summary: (1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, authorizes the use of marijuana for medical purposes. Existing law, the Medical
Marijuana
Cannabis
Regulation and Safety Act
(MMRSA),
(MCRSA),
enacted by the Legislature, establishes within the Department of Consumer Affairs the Bureau of Medical
Marijuana
Cannabis
Regulation, and provides for the state licensure and regulation of certain commercial
medical marijuana
cannabis
activities by the
Department of Consumer Affairs,
bureau,
the Department of Food and Agriculture, or the State Department of Public Health, as specified.
MMRSA
MCRSA
requires an applicant for state licensure to provide specified information and a statement, signed by the applicant under penalty of perjury, that the information is complete, true, and accurate.
MMRSA
MCRSA
authorizes a state licensing authority to deny an application
if specified conditions are met,
or issue a conditional license under certain conditions,
and requires a state licensee, among other things, to obtain applicable local licenses prior to commencing commercial cannabis activity and to keep accurate records of commercial cannabis activity.
This bill would require a licensee to implement, as specified, an employee training program for the licensee’s employees regarding compliance with
MMRSA,
MCRSA,
as specified. The bill would require an applicant with 20 or more employees to attest on the application that the applicant will implement an employee training program approved by the licensing authority within one year of licensure, as specified, thereby modifying the crime of perjury and imposing a state-mandated local program. The bill would require the licensing authority to deny an application of an applicant with 20 or more employees unless the applicant makes the above-mentioned attestation on the application. The bill would require each licensing authority to adopt standards for the approval of employee training programs. The bill would prohibit the licensing authority from approving a program provided by or through certain apprenticeship
programs.
programs and programs provided by a licensee under MCRSA, except as specified.
The bill would authorize the licensing authority to approve a workplace training organization, as defined, as a 3rd-party provider. The bill would require each licensing authority to charge a fee for approving an employee training program, as specified. The bill would require that the fees collected be deposited in the appropriate account within the Medical
Marijuana
Cannabis
Regulation and Safety Act Fund. The bill would authorize each licensing authority to adjust fees as needed once a year to cover the costs of employee training program approval. The bill would make these provisions operative on July 1, 2018.
(2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.