Control, Regulate, and Tax Marijuana Act of 2016- Confidential Draft

CONFIDENTIAL: DO NOT CIRCULATE

THE CONTROL, REGULATE, AND TAX MARIJUANA ACT

SECTION 1. Title.

This Act shall be known as “The Control, Regulate, and Tax Marijuana Act.”

SECTION 2. Findings and Declarations.

The People of the State of California hereby find and declare all of the following:

(a) Existing marijuana laws have failed to prevent minors from accessing marijuana.

(b) Millions of dollars of criminal justice and court resources are spent each year enforcing non-violent marijuana laws that could otherwise be spent preventing and solving violent crimes.

(c) Existing marijuana laws have created illegal production and distribution systems that have empowered organized crime and contributed to environmental degradation.

(e) Strictly controlling, regulating and taxing marijuana will save criminal justice resources, reduce crime, including violent crime, benefit the environment, and generate hundreds of millions of dollars in new revenue for California.

(f) In 1996, the People of California enacted the Compassionate Use Act of 1996 to allow seriously ill Californians to use marijuana for medical purposes when appropriate. However, medical marijuana remains unregulated and many patients for whom marijuana would be beneficial lack access to marijuana that is regulated, labeled, tested, and safe for consumption.

(g) Industrial hemp is produced in at least 30 nations to produce thousands of products including paper, textiles, food, oils, automotive parts, and personal care products. Millions of dollars in industrial hemp products are sold in California each year. Industrial hemp should be legal and regulated separately from the strains of cannabis with higher delta-9 tetrahydrocannabinol concentrations.

SECTION 3. Intents and Purposes.

The People of the State of California hereby declare that the intents and purposes of this Act are to:

(a) Take marijuana production and sales out of the hands of the illegal market and bring them under a strictly controlled, regulated, and taxed system.

(b) Strictly control the production, processing, manufacturing, transportation, distribution, and sale of marijuana through state licensing and regulation.

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Tamar Todd, 04/19/15,

Check how much?We should argue to LAO that by legalizing hemp we are upping the fiscal analysis.


(c) Allow licensed businesses that are regulated and controlled to provide marijuana that is tested, labeled, and securely packaged to adults twenty-one years of age and older and to medical marijuana patients.

(d) Regulate the production and distribution of medical marijuana and bring California’s existing medical marijuana system under state licensing, regulation, and control.

(e) Deny access to marijuana by persons younger than twenty-one years of age who are not medical marijuana patients.

(f) Prohibit advertising of marijuana targeted at persons younger than twenty-one years of age or in areas where persons younger than twenty-one years of age congregate.

(g) Not affect existing laws making it a felony to provide marijuana to a minor.

(h) Not affect existing laws making it a felony to cultivate marijuana on public lands or to cultivate marijuana while trespassing on private lands.

(i) Bring penalties for marijuana related conduct not made lawful herein involving persons twenty-one years of age and older in line with penalties related to alcohol for persons twenty-one years of age and older.

(j) Permit the use, possession, and production of marijuana within defined limits for personal use by persons twenty-one years of age and older.

(k) Authorize consideration of resentencing for anyone who is currently serving a sentence for an offense for which the penalty is reduced herein so long as the person does not pose a risk to public safety.

(l) Impose regulatory safeguards that guarantee strict environmental, workplace, food, and product safety standards for businesses engaged in the cultivation, processing, manufacturing, transporting, testing, and sale of marijuana.

(m) Ensure that the employees of marijuana businesses are well trained and certified.

(n) Tax the sale of marijuana in order to generate hundreds of millions of dollars in new revenue annually for education, treatment and prevention, community investment, environmental restoration, state parks, and localities.

(o) Permit localities to limit the number of marijuana-related businesses in their own jurisdictions, or to ban marijuana-related businesses through a vote of the people.

(p) Preserve scarce law enforcement resources to prevent and prosecute violent crime.

(q) Prohibit the consumption of marijuana in a public place unlicensed for such use, including near schools and other areas where children congregate.

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Depends on ultimate revenue allocation.


This depends on whether we include the employee training and certification provisions.


This depends on allowing for retroactivity


This depends on whether we end up reducing penalties for unlicensed commercial conduct.


(r) Not affect existing laws pertaining to driving or operating a vehicle or other device used for transportation under the influence of marijuana.

(s) Maintain the ability of public and private employers to enact and enforce workplace policies pertaining to marijuana.

(t) Prevent the illegal diversion of marijuana from California to other states or to the illegal market.

(u) Prevent illegal production or distribution of marijuana and any associated violence or other illegal activity, including the use of firearms.

(v) Not affect existing laws pertaining to marijuana use and possession on public lands.

(w) Not affect or amend the Compassionate Use Act of 1996.

(x) Allow industrial hemp to be grown as an agricultural product and regulated separately from the strains of cannabis with higher delta-9 tetrahydrocannabinol concentrations.

SECTION 4. Regulation of Marijuana.

Division 10 (commencing with Section 26000) is added to the Business and Professions Code, to read:

Division 10. Marijuana.

26000. Regulation of Marijuana.

The Legislature may enact legislation to implement this Division provided that the legislation is consistent with the intents and purposes of the Control, Regulate, and Tax Marijuana Act and with the requirements set forth in this Division. All provisions of this Division shall be liberally construed and interpreted to accomplish the intents and purposes of the Control, Regulate, and Tax Marijuana Act.

26010. Definitions.

As used in this Division, the following definitions shall apply:

(a) “Customer” means a person twenty-one years of age and older. (b) “Department” means the Department of Alcoholic Beverage Control, or any successor agency.

(c) “Locality” means a city or town, or, in reference to a location outside the boundaries of a city or town, a county.

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Do we need to say something else here in the unlikely event that we cannot give this additional responsibility to a Constitutionally created agency? Can and should we create separate division within the agency?


If we make a 60% or two thirds vote threshold for the Legislature do we need to reference that here as well as in the section on amendment at the end?


(d) “Manufacture” means to compound, blend, extract, infuse, or otherwise make or prepare a marijuana product.

(e) “Marijuana” means all parts of the plant genus Cannabis, whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin, including concentrated cannabis as defined in Section 11006.5 of the Health and Safety Code. It does not include:

(1) Industrial hemp, as defined in Section 11018.5 of the Health and Safety Code.

(2) 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.

(3) The weight of any other ingredient combined with marijuana to prepare topical or oral administrations, food, drink, or other product.

(f) “Marijuana producer” means an entity licensed by the Department to produce, transport, and package marijuana, to have marijuana tested by a marijuana testing licensee, and to sell marijuana to other marijuana establishments.

(g) “Marijuana distributor” means an entity licensed by the Department to store marijuana and to transport marijuana from a marijuana establishment to another marijuana establishment.

(h) “Marijuana establishment” means a marijuana cultivator, marijuana distributor, marijuana testing facility, marijuana micro business, marijuana product manufacturer, marijuana retailer, medical marijuana retailer, or other type of licensee created by the Department or the Legislature.

(i) “Marijuana micro business” means an entity licensed to produce less than 10,000 square feet of marijuana and to transport and package the marijuana and marijuana products, and to have marijuana tested by a marijuana testing licensee, and to sell and deliver the marijuana and marijuana products to other marijuana establishments and to customers.

(j) “Marijuana product manufacturer” means an entity licensed by the Department to purchase marijuana, manufacture, process, transport, and package marijuana and marijuana products, to have marijuana tested by a marijuana testing licensee, and to sell marijuana and marijuana products to other marijuana establishments.

(k) “Marijuana products” means products that are manufactured and that contain marijuana or an extract from marijuana or concentrated cannabis, including products that are comprised of marijuana and other ingredients that are intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures.

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(l) “Marijuana retailer” means an entity licensed by the Department to purchase and transport marijuana and marijuana products from marijuana establishments and to sell and deliver marijuana and marijuana products to customers.

(m) “Marijuana testing licensee” means an entity licensed by the Department to test marijuana and marijuana products, including for potency and harmful contaminants.

(n) “Medical marijuana patient” means a person who possesses a valid identification card issued pursuant to Section 11362.71 of the Health and Safety Code.

(o) “Medical marijuana retailer” means an entity licensed by the Department to purchase and transport marijuana and marijuana products from marijuana establishments and to sell and deliver marijuana and marijuana products to medical marijuana patients who are eighteen years of age or older.

(p) “Produce” means to plant, cultivate, harvest, dry, cure, trim, and separate the parts of any marijuana or any part thereof.

26020. Duties of Regulatory Agency.

(a) The Department shall implement, administer, and enforce this Division in a manner consistent with the intents and purposes of the Control, Regulate, and Tax Marijuana Act.

(b) The Department shall, in addition to all other necessary acts:

(1) Adopt rules and regulations, with input and assistance from other state and local government agencies where appropriate, for the production, manufacture, packaging, labeling, transporting, storage, distribution, delivery, testing, transfer, and sale of marijuana and marijuana products.

(2) Establish procedures for the application, issuance, renewal, suspension and revocation of a license to operate a marijuana establishment.

(3) Establish application, licensing, and renewal forms and fees.

(4) Approve or deny applications for licenses.

(5) Suspend, revoke, or fine licensees for good cause.

(6) Take any reasonable action with respect to applicants or licensees in accordance with procedures established pursuant to this Division.

(7) Establish a procedure for those persons and parties affected by decisions of the Department to protest and appeal those decisions.

(8) Adopt other rules and regulations necessary to carry out the duties conferred on the Department by this Division.

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(c) The Department shall have no power to license or otherwise regulate or restrict actions or conduct that is permitted under Sections 11362.1, 11362.2, and 11362.3 of the Health and Safety Code or under the Compassionate Use Act of 1996.

26030. Duties of Other State Regulatory Agencies.

(a) Relevant state regulatory agencies shall advise and assist the Department with the promulgation of regulations under this Division. Relevant state agencies include but are not necessarily limited to:

(1) California Department of Fish and Wildlife.

(2) California Department of Food and Agriculture.

(3) California Department of Pesticide Regulation.

(4) California Department of Forestry and Fire Protection.

(5) California Environmental Protection Agency.

(6) California Health and Human Services Agency.

(7) California Labor and Workforce Development Agency.

(8) California Natural Resource Agency.

(9) California State Board of Equalization.

(10) State of California Department of Industrial Relations.

(11) State of California Franchise Tax Board.

(b) State regulatory agencies shall issue applicable permits to qualified marijuana establishments and apply and enforce generally applicable state laws, rules, and regulations to marijuana establishments that are not in conflict with the provisions of this Division or with the rules and regulations of the Department, and are consistent with the intents and purposes of the Control, Regulate, and Tax Marijuana Act.

(c) State regulatory agencies may adopt rules and regulations specific to marijuana establishments that are not in conflict with the provisions of this Division or with the rules and regulations of the Department, and are consistent with the intents and purposes on the Control, Regulate, and Tax Marijuana Act.

26040. Regulations.

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This should include the state and regional water resources control boards.


Should this be a may or else more clearly limit the areas to which other agencies have to assist the ABC?


(a) Not later than May 1, 2018, the Department shall adopt rules and regulations necessary for the initial implementation of this Division, including but not necessarily limited to rules and regulations pertaining to:

(1) Procedures for the issuance, renewal, suspension, and revocation of licenses.

(2) Application, licensing, and renewal fees consistent with Section 26060.

(3) Qualifications for licensees and standards for employment that are directly and demonstrably related to the operation of a marijuana establishment.

(4) Requirements for the screening, hiring, training, and certification of employees of licensees consistent with Section 26210.

(5) Security requirements for marijuana establishments, including physical security, video and alarm requirements, procedures to limit access to facilities and to prevent diversion, and requirements for the secure storage and transport of marijuana and marijuana products, including transport manifests.

(6) Procedures to track marijuana and marijuana products produced, manufactured, transported, and sold by marijuana establishments to ensure that marijuana produced by marijuana establishments is not sold or otherwise transferred except by a marijuana establishment licensed to sell to another marijuana establishment, to a customer, or to a medical marijuana patient who is eighteen years of age or older and that all marijuana sold by a marijuana establishment was produced by marijuana establishment.

(7) Inspection, monitoring, and record-keeping requirements.

(8) Food and product safety requirements, including sanitation standards analogous to the California Retail Food Code for preparation, storage, handling and sale of food products.

(9) Testing requirements for marijuana and marijuana products for the active cannabinoid profile, constituent elements, and microbiological, bacterial, pathogenic yeast, and mold counts to ensure that marijuana and marijuana products are accurately labeled and do not contain contaminants that are injurious or harmful to health.

(10) Labeling and packaging standards and restrictions for marijuana and marijuana products that include at minimum the requirements set forth in Section 26090.

(11) Standards and restrictions for marijuana products that include at minimum the restrictions and requirements set forth in Section 26100.

(12) Health and safety requirements for the production, manufacture, transport, storage, and distribution of marijuana and marijuana products, including rules regarding the use of pesticides and restrictions on additives to marijuana products that are injurious to health.

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Anything in there that could cause a fed law issue?


Do we need to include something about independent contractors?


(13) Additives and ingredients approved or prohibited for inclusion in marijuana or marijuana products, including a prohibition on alcohol or tobacco additives to marijuana or marijuana products.

(14) Maximum potency standards for tetrahydrocannabinol in marijuana products and concentrated cannabis.

(15) Advertising, marketing, and signage requirements and restrictions, including restrictions on public signage, marketing, display, and advertising for marijuana and marijuana products that include at minimum the requirements set forth in Section 26080.

(16) Environmental protection requirements for the production, manufacture, transport, storage, and distribution of marijuana and marijuana products, to reduce energy usage and to protect clean water and environment, including protections related to land diversion and pond development, and agricultural discharges.

(17) Procedures and protocols for safe disposal of excess, contaminated, adulterated, or deteriorated marijuana and marijuana products.

(18) Restrictions on whether other products may be sold by licensees selling marijuana or marijuana products, including a prohibition on a marijuana establishment selling alcohol or tobacco in addition to marijuana or marijuana products.

(19) Production limits on the total amount of marijuana produced in California in connection with reducing illicit marijuana markets if limits are necessary.

(20) Requirements to prevent the sale of marijuana to persons under the age of twenty-one years, or to medical marijuana patients under the age of eighteen years, including a specification of the acceptable forms of identification that a marijuana establishment may accept when verifying the age of a customer or a medical marijuana patient.

(21) Prohibitions, restrictions, standards, and requirements set forth in Sections 26060, 26070, 26080, 26090, 26100, 26110, 26120, 26130, 26140, 26150, 26160, 26170, 26200, 26210, and 26220.

(22) Penalties for the failure to comply with this Division or with rules or regulations adopted pursuant to this Division.

(b) The Department may otherwise adopt, amend, and rescind rules and regulations relating to the implementation, administration, and enforcement of this Division, provided that the Department shall at all times maintain such rules and regulations sufficient to accomplish the intents and purposes of the Control, Regulate, and Tax Marijuana Act.

(c) The Department shall adopt, amend, and rescind all rules and regulations in accordance with the Administrative Procedure Act (Government Code, Title 2, Division 3, section 11340 et seq.), as amended, and the regulations promulgated thereunder.

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Need to decide if we want to do this and if so whether it applies to marijuana and marijuana products or just products and whether pure concentrates fall definitionaly under marijuana or marijuana products. This may give too much discretion to the Department. How do we keep them from setting potency levels that are unreasonably low?


26050. Types of Licenses.

(a) Notwithstanding any other provision of law, the Department shall have the authority to issue licenses that it deems necessary to carry out the intents and purposes of the Control, Regulate, and Tax Marijuana Act.

(b) The Department shall issue licenses pursuant to this authority, including but not necessarily limited to the following types of licenses:

(1) Marijuana producer licenses to acquire, produce, transport, and package marijuana, have marijuana tested by a marijuana testing licensee, and to sell marijuana to other marijuana establishments.

(2) Marijuana distributor licenses to acquire, store, transport, and deliver marijuana from a marijuana establishment to another marijuana establishment.

(3) Marijuana micro business licenses to acquire marijuana, produce marijuana on an area less than 10,000 square feet, and to transport and package the marijuana and marijuana products, and to have marijuana tested by a marijuana testing licensee, and to sell and deliver the marijuana and marijuana products to other marijuana establishments and to customers.

(4) Marijuana product manufacturer licenses to purchase marijuana, manufacture, process, transport, and package marijuana and marijuana products, have marijuana and marijuana products tested by a marijuana testing licensee, and to sell marijuana and marijuana products to other marijuana establishments.

(5) Marijuana retailer licenses to purchase and transport marijuana and marijuana products from marijuana establishments and to sell and deliver marijuana and marijuana products to customers.

(6) Marijuana testing licenses to test marijuana and marijuana products to analyze and certify safety and potency, and identify potentially harmful contaminants.

(7) Medical marijuana retailer licenses to purchase and transport marijuana and marijuana products from marijuana establishments and to sell and deliver marijuana and marijuana products to medical marijuana patients who are eighteen years of age or older.

26060. Marijuana Producer Licenses and Fees

(a) There shall be different tiers of marijuana producer licenses established by the Department based on either the area, in square feet, of marijuana production, or the annual gross profit of the marijuana producer licensee.

(b) In addition to fees established by the Department pursuant to Section 26040(a)(2):

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Consider whether we need to include “purchase” or “acquire” to producers and micro businesses. They will also need to obtain plants thus should we explicitly protect that here?


(1) A licensee that produces marijuana shall pay an annual fee of $1.00 per square foot of area used to produce marijuana.

(2) The fee amounts set forth in (b)(1) shall be adjusted by the Department annually for inflation.

(3) One half of the fees collected under (b) shall be deposited into the Special Account for Environmental Enforcement set forth in Section 26200.

(4) One half of the fees collected under (b) shall go to the locality in which the marijuana licensee is located.

26070. Appellations of Origin

The Department shall compile and update an official state list of California’s marijuana appellations and standards for when marijuana may be labelled as being produced according to the county and regional appellation.

26080. Protection of Minors.

No licensee shall:

(a) Sell marijuana or marijuana products to persons under the age of twenty-one years.

(b) Allow any person under the age of twenty-one years on the premises of a marijuana establishment.

(c) Employ or retain persons under the age of twenty-one years.

(d) Advertise marijuana or marijuana products in a manner intended to encourage persons under the age of twenty-one years to consume marijuana or marijuana products.

(e) Advertise marijuana or marijuana products within 1,000 feet of a school providing instruction in kindergarten or any grades 1 through 12.

(f) Advertise marijuana or marijuana products in areas where the advertising of alcohol or tobacco is prohibited or in a manner that is prohibited for the advertising of alcohol or tobacco.

26090. Labeling and Packaging of Marijuana and Marijuana Products

All marijuana and marijuana products sold shall be:

(a) Packaged in re-sealable child resistant packaging.

(b) Packaged in a manner that is not appealing to children.

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Need to determine what definition of school, preschool, daycare, sensitive use area etc that we are going to use?


Check whether this is a term legally specific to wine or not and whether there is a fed law issue with doing this. Another alternative would be not to use the term appellation and just say that it can be labeled by county or region where grown or produced.


Is it clear whether this would mean the city or the county?


Need to figure out in terms of definitions whether this includes just cultivation area or would also include process area as the definition of “produce” includes processing.Could also be of the whole licensed premises—but that might be difficult though for mixed use farms.


(c) Packaged in opaque materials so that the product is not visible through the packaging.

(d) Packaged in a manner to ensure that the product will not be mistaken as food not containing marijuana.

(e) Prominently include on the packaging: “ATTENTION: THIS PRODUCT CONTAINS MARIJUANA.”

(f) Prominently include on the packaging: “ATTENTION: KEEP OUT OF REACH OF CHILDREN AND ANIMALS.”

(g) Prominently labeled with the standard serving size, the number of servings in the package, and the amount of tetrahydrocannabinol and cannabidiol in each serving and in the package as a whole.

(h) Labeled with the ingredients contained in the product as well as a list of potential allergens and solvents used in the manufacturing of the product.

(i) Labeled with the manufacturing date and the name of the marijuana establishment licensee that manufactured the product.

(j) Labeled with information designed to educate the consumer or the medical marijuana patient about marijuana and marijuana products and their potential effects.

26100. Restrictions on Marijuana Products.

(a) Marijuana products shall be:

(1) Prohibited if the marijuana product is designed to be especially appealing to children, including, but not necessarily limited to, prohibitions on products that are easily confused with commercially sold candy or foods that do not contain marijuana.

(2) Produced and sold with a standardized dosage of cannabinoids not to exceed ten (10) milligrams tetrahydrocannabinol per serving.

(3) Delineated or scored into standardized serving sizes if the marijuana product contains more than one serving and is an edible marijuana product in solid form.

(4) Homogenized to ensure uniform disbursement of cannabinoids throughout the product.

(5) Manufactured and sold under sanitation standards analogous to the California Retail Food Code for preparation, storage, handling and sale of food products.

(6) Limited to non-potentially hazardous food as established by the State Department of Public Health pursuant to Section 114365.5 of Health and Safety Code.

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This might be too limiting. Would prohibit types of food that spoil and need refrigeration.


Federal law issue with requiring this?


(7) Provided to customers and medical marijuana patients with detailed written information about the potential effects of the marijuana product and directions as to how to consume the marijuana product.

(b) Marijuana included in a marijuana product manufactured in compliance with the regulations under this Division is not considered an adulterant under state law.

26110. Medical Marijuana

(a) Notwithstanding Section 26080(a) a medical marijuana retailer licensee may sell marijuana and marijuana products to a medical marijuana patient who is eighteen years of age or older.

(b) Notwithstanding Section 26080(b) a medical marijuana retailer licensee may allow a medical marijuana patient who is eighteen years of age or older on the premises of the licensed medical marijuana retailer.

(c) The Department may adopt higher potency standards for tetrahydrocannabinol in marijuana products and concentrated cannabis sold by medical marijuana retailer licensees than the standards adopted pursuant to Section 26040(a)(14) that account for the medical needs of medical marijuana patients.

(d) The Department may adopt a higher dosage standard than that set forth in Section 26100(a)(2) for marijuana products sold by medical marijuana retailer licensees that account for the medical needs of medical marijuana patients.

(e) The Department shall create incentive programs to support the development and availability of marijuana and marijuana products designed to meet the needs of medical marijuana patients, including but not necessarily limited to marijuana and marijuana products high in cannabidiol.

26120. Import/Export.

No licensee shall import or export marijuana or marijuana products to or from California until such time as such import or export is legal under federal law and the laws of the importing or exporting state.

26130. Necessity of a License

No person shall exercise the privilege or perform any act which a licensee may exercise or perform under the authority of a license unless the person is permitted to do so by a license issued pursuant to this division.

26140. Protections for Licensees.

(a) Actions and conduct by a licensee, its employees, and its agents that are permitted pursuant to a valid license issued by the Department, and by those who allow property to be used by a licensee, its employees, or its agents as permitted pursuant to a valid license issued by the

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Check re medical marijuana and home grow provisions and hemp provisions whether we need to explicitly make an exception for those sections. It should be ok because we expressly say elsewhere that the Department does not have authority over those areas.


Need to figure out whether pure concentrated cannabis fits within “marijuana” or “marijuana products.”


Department, are lawful under state and local law, and shall not be a violation of state or local law.

(b) No state or local government agency shall impose any criminal, civil, or administrative penalty on any licensee, its employees, or its agents, or on those who allow property to be used by a licensee, its employees, or its agents, solely for actions or conduct permitted pursuant to a valid license issued by the Department.

(c) Actions and conduct by a licensee, its employees, and its agents that are permitted pursuant to a valid license issued by the Department, and by those who allow property to be used by a licensee, its employees, or its agents as permitted pursuant to a valid license issued by the Department, shall not be a basis for seizure or forfeiture of any products, materials, equipment, property, or assets under state or local law.

(d) Notwithstanding any other law, except as otherwise provided in this Division and the rules adopted by the Department, a person acting in the person’s capacity as an employee of a marijuana establishment licensed to sell marijuana to customers or to medical marijuana patients who sells, furnishes, administers, or gives away, or offers to sell, furnish, administer, or give away marijuana to a person under the legal age to purchase, shall not be subject to penalty or prosecution if the person:

(1) Followed all the rules adopted by the Department pursuant to Section 26040(a)(20);

(2) Demanded identification from the recipient;

(3) Examined the identification to determine that the identification reasonably appeared to be a valid, unaltered government issued identification card with a current description and picture of the recipient, including the name and date of birth;

(4) Examined the photograph on the identification and determined that the recipient reasonably appeared to be the same person in the photograph; and

(5) Determined that the date of birth on the identification card indicated that the recipient was of legal age.

(e) Nothing in this section shall be construed or interpreted to:

(1) Prevent the Department from enforcing its rules and regulations against a licensee.

(2) Prevent a state or local government agency from enforcing a law, rule, or regulation that is not in conflict with the provisions of this Division or the rules and regulations of the Department, and is consistent with the intents and purposes of the Control, Regulate, and Tax Marijuana Act.

(3) Prevent a locality from enforcing a local zoning ordinance, local ordinance of general application, or local ordinance enacted pursuant to Section 26190.

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This is similar to the standard for alcohol licensees who sell accidentally to a minor.


26150. License Application.

(a) Not later than June 1, 2018, the Department shall begin to accept and process applications for licensure.

(b) Not later than June 1, 2018, a locality may identify for the Department potential applicants for licensure based on the applicants’ prior operation in that locality under the Compassionate Use Act and its implementing laws.

(c) Upon receipt of an application for licensure and any applicable fee, the Department shall make a thorough investigation to determine whether the applicant and the premises qualify for the license and have complied with the provisions of this Division.

(d) The Department shall issue a license if:

(1) The applicant is identified to the Department by a locality pursuant to subdivision (b);

(2) The applicant has submitted a complete application for licensure to the Department no later than July 1, 2018;

(3) The Department determines that an applicant and the premises qualify for the license and have complied with the provisions of this Division; and

(4) The applicant has paid all applicable fees.

(e) The Department shall process applications from and issue or deny licensure pursuant to (d) prior to processing other applications and issuing or denying other licenses.

(f) After the Department has taken action on all applications under subdivision (d), the Department shall process applications from applicants not identified to the Department under subdivision (d).

(g) The Department shall issue a license unless:

(1) Either the applicant or the premises for which the license is applied do not qualify for licensure under rules and regulations enacted by the Department pursuant to this Division.

(2) Issuance would result in or add to an undue concentration of licenses within a particular local jurisdiction or community.

(3) Issuance would conflict with any local zoning ordinance, local ordinance of general application, or local ordinance enacted pursuant to Section 26190.

(4) The applicant, or any of its owners, officers, directors, or board members has been sanctioned by the Department or by a locality for violation of a Department rule or local

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ordinance related to marijuana in the last three years or has had a marijuana establishment license revoked.

(5) The applicant has knowingly answered a question on the application or responded to a request for information falsely or failed to provide information requested.

(6) The applicant and any owners, officers, directors, and board members of the proposed establishment have not been full legal residents of the State of California for at least 24 months, unless the import and export of marijuana is legal under federal law.

(7) The applicant, or any of its owners, officers, directors, or board members is under the age of twenty-one years.

(8) The applicant, or any of its owners, officers, directors, or board members is a licensed physician making patient recommendations under the Compassionate Use Act of 1996, if the applicant is applying for a medical marijuana retail license.

(h) The Department may not consider a prior conviction for a marijuana offense of an applicant or any owners, officers, directors, or board members of the proposed marijuana establishment in its decision to grant or deny an application, unless:

(A) The sentence for the offense, including any term of probation, incarceration or supervised release, was not completed before the date of the application; or

(B) The offense involved distribution of marijuana to a minor.

(i) The Department may refuse to issue any license for premises located within 1,000 feet of a school providing instruction in kindergarten or any grades 1 through 12, or for premises in areas where the sale of alcohol or tobacco is restricted.

26160. Enforcement.

(a) The Department shall work in conjunction with state and local law enforcement agencies for the purposes of implementing, administering, and enforcing the Department’s rules and regulations and taking appropriate action against licensees and others who fail to comply with these rules and regulations or with state law.

(b) The Department or any district attorney, county counsel, city attorney, or city prosecutor may bring a legal action to enjoin a violation or potential violation of, or to compel compliance with, any provision of this Division or rules and regulations promulgated by the Department. The legal action shall be brought in the county in which the violation occurred or may occur. Any proceedings brought pursuant to this section shall conform to the requirements of Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure.

(c) State and local law enforcement agencies shall immediately notify the Department of any arrests made that involve a licensee or a licensed premises and actions or conduct under the

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This is something we should consider as the localities will like it—there are complaints with alcohol that the ABC does not move quickly enough to address problems and that the localities lack the power to act.


We need to figure out what term to use here and what is covered and what is not.


Need to decide if we want to take on the likely illegality of this. Many people in CA really want it but there is a strong argument that it is unconstitutional and it could lead to a challenge to the licensing system by an out of state resident.


Department’s jurisdiction. The Department shall promptly investigate whether such arrests warrant suspension or revocation of a license.

(d) Nothing in this Division shall be construed or interpreted to limit a state or local law enforcement agency’s ability to investigate unlawful activity in relation to a licensee or licensed premise.

(e) The Department shall keep a complete record of all licensees. This record shall be made available on the Department’s Internet website so as to permit state and local law enforcement to verify a marijuana establishment licensee.

26170. Review of Agency Action.

(a) The Department shall establish a procedure for those persons and parties affected by decisions of the Department to protest and appeal those decisions.

(b) An interested person may seek judicial review of any final decision of the Department.

(c) Any individual or entity may commence a legal action for a writ of mandate to compel the Department to perform the acts mandated by this Division.

26180. Limitations.

No license, fee, rule, regulation, or other action taken by the Department shall affect, or be interpreted or construed to affect, those limitations set forth in subdivisions (c) or (d) of Section 11362.1 of the Health and Safety Code.

26190. Local Control.

(a) A locality may adopt and enforce ordinances that regulate the location, operation, or establishment of an entity within that jurisdiction that is licensed or seeking licensure pursuant to this Division.

(b) A locality may adopt and enforce ordinances that ban the establishment of any entity within that jurisdiction that is licensed or seeking licensure pursuant to this Division, but only if such ordinance is adopted through a vote of the people in that locality pursuant to Chapter 2 and Chapter 3 of Division 9 of the Elections Code.

(c) Subdivisions (a) and (b) shall not be construed or interpreted to permit a locality to prohibit the transporting of marijuana or marijuana products through its jurisdiction by persons or entities licensed pursuant to this Division.

(d) Subdivisions (a) and (b) shall not be construed or interpreted to permit a locality to prohibit the transporting and delivery of marijuana or marijuana products by persons or entities licensed pursuant to this Division to customers or medical marijuana patients who are located within its jurisdiction.

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This likely undoes a number of local bans that prohibit delivery. Other options would be to remain silent on delivery but then we would have to decide how to answer whether it is allowed or not. Or we could get into the specific to say that delivery has to be done in a vehicle with no advertising, name, branding etc. Either was we are probably vulnerable.


Check that this is the correct provision.


Need to figure out how the limitations and language in 11362.1(c) and (d) about U21 intersect with the provisions in Division 10 that allow U21 medical marijuana patients to purchase.


(e) A locality may adopt and enforce ordinances to allow for the smoking, vaporizing, and ingesting of marijuana and marijuana products on the premises of a marijuana micro businesses, a marijuana retailer, or a medical marijuana retailer licensed by the Department if:

(1) Access to the area where marijuana consumption is allowed is restricted to persons twenty-one years of age and older, or in the case of a medical marijuana retailer the area where marijuana consumption is allowed is restricted to medical marijuana patients who are eighteen years of age or older;

(2) Marijuana consumption is not visible from any public place or non-age restricted area; and

(3) Sale or consumption of alcohol or tobacco is not allowed on the premises.

(f) A locality may establish a fee or tax for the operation of a marijuana establishment within its jurisdiction.

26200. Marijuana Regulation Fund.

(a) The Marijuana Regulation Fund (the “Regulation Fund”) is hereby created within the State Treasury.

(b) All fees collected pursuant to this Division shall be deposited into the Regulation Fund.

(c) A Special Account for Environmental Enforcement shall be established as an account within the Regulation Fund for costs incurred by agencies responsible for enforcing regulations related to the environmental impact of marijuana production, including the California Environmental Protection Agency, the California Department of Fish and Wildlife, the California Department of Forestry and Fire Protection, the California Department of Pesticide Regulation, and the California Department of Food and Agriculture.

(d) Notwithstanding Section 16305.7 of the Government Code, the Regulation Fund and the Special Account for Environmental Enforcement shall include any interest and dividends earned on the money in the Regulation Fund and the Special Account for Environmental Enforcement.

(e) Notwithstanding Section 13340 of the Government Code, all moneys within the Regulation Fund, except for the moneys in the Special Account for Environmental Enforcement, shall be allocated, upon appropriation by the Legislature, to the Department solely for the purposes of implementing, administering, and enforcing this Division, including but not necessarily limited to the costs incurred by the Department for its administrative expenses.

(f) Notwithstanding Section 13340 of the Government Code, all moneys within the Special Account for Environmental Enforcement shall be allocated, upon appropriation by the Legislature, solely for the purposes of set forth in subdivision (c).

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Not sure if “continually allocated” who would decide how much each agency gets from the Environmental Enforcement Fund.


Is it better to say upon appropriation by the Legislature or “continually allocated”?


I am not sure whether we need to explicitly say this or if it is true anyway as we don’t preempt this authority that would otherwise exist. We still need to consider a cap on total taxation and whether a locality could use a prohibitively high fee or tax to effectively ban and skirt the vote of the people requirement.What about a tax on the marijuana itself? Is that a given without explicit language?Would this allow a jurisdiction that bans to tax delivery to customers within its borders?


This is going to be in conflict with state laws that do not allow tobacco smoking in a workplace.


(g) All moneys collected as a result of penalties imposed under this Division shall be deposited directly into the General Fund, to be available upon appropriation.

(h) The Department may establish and administer a grant program to allocate moneys from the Regulation Fund, except for the moneys in the Special Account for Environmental Enforcement, to state and local government agencies for the purpose of assisting with marijuana regulation and the enforcement of this Division.

26210. Marijuana Establishment Certification and Apprenticeship Program

(a) Not later than May 1, 2018, the Division of Labor Standards Enforcement within the Department of Industrial Relations or its successor agency, in collaboration with the Department, shall adopt rules and regulations necessary to do all of the following:

(1) Maintain minimum standards of competency and training through a system of testing and certification for employees of a marijuana establishment licensed to produce, manufacture, or sell marijuana to customers or to medical marijuana patients.

(2) Develop a certification program for employees, including reasonable application and certification fees.

(3) Issue certification cards to employees who satisfy the minimum standards of competency and training and who apply and pay the application and certification fees.

(4) Establish penalties for the failure to comply with this Section or with rules or regulations adopted pursuant to this Section.

(b) Certification shall be required of all employees of a marijuana establishment licensed to produce, manufacture, or to sell marijuana to customers or to medical marijuana patients, except:

(1) Certification is not required for apprentices working as employees of marijuana establishments as part of an apprenticeship program approved by the Division of Labor Standards Enforcement within the Department of Industrial Relations or its successor agency.

(2) An uncertified person may perform work for which certification is otherwise required in order to obtain the necessary on-the-job experience for certification provided that the person is under the direct supervision of an employee who is certified pursuant to subdivision (a).

(c) The Division of Labor Standards Enforcement within the Department of Industrial Relations or its successor agency may develop additional criteria governing this Section.

(d) Subdivision (b) of this Section shall become operative on June 1, 2020.

26220. Control, Regulate, and Tax Marijuana Task Force.

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I believe that this is similar to the language that the UFCW will ask for.Not sure how this will work for trimmers or other temporary agricultural workers.Perhaps it should also only apply to businesses with more than a certain number of workers.I am overall concerned that it creates a bottle neck and requirements that are much more burdensome on the industry that other similar industries—no certification program required for people who sell wine or work in vineyards.


The Department may create a Control, Regulate, and Tax Marijuana Task Force (the “Task Force”) for the purpose of advising the Department on marijuana production, processing, manufacture, transport, distribution, testing, sales, and tax issues. The Task Force may include representatives from one or more of the following:

(a) The Department.

(b) California Department of Fish and Wildlife.

(c) California Department of Food and Agriculture.

(d) California Department of Pesticide Regulation.

(e) California Department of Forestry and Fire Protection.

(f) California Environmental Protection Agency.

(g) California Health and Human Services Agency.

(h) California Labor and Workforce Development Agency.

(i) California Natural Resource Agency.

(j) California State Board of Equalization.

(k) State of California Department of Industrial Relations.

(l) State of California Franchise Tax Board.

(m) The Office of the Attorney General.

(n) Local government agencies, including representative from rural counties.

(o) Local law enforcement.

(p) Medical professionals.

(q) Medical marijuana patient representatives.

(r) Experts in the production and distribution of marijuana.

(s) Other interested parties.

SECTION 5. Marijuana Tax.

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This should include the state and regional water resources control boards.


Shall?


Part 14.5 (Commencing with Section 34000) is added to Division 2 of the Revenue and Taxation Code, to read:

Part 14.5. Marijuana Tax.

34010. Definitions.

For purposes of this part:

(a) “Board” shall mean the Board of Equalization or its successor agency.

(b) “Department” shall have the same meaning as set forth in subdivision (b) of Section 26010 of the Business and Professions Code.

(c) “Tax Fund” means the Marijuana Tax Fund created by Section 34015.

(d) “Gross receipts” shall have the same meaning as set forth in Section 6012 of the Revenue and Taxation Code.

(e) “Marijuana” shall have the same meaning as set forth in subdivision (e) of Section 26010 of the Business and Professions Code.

(f) “Marijuana flowers” shall mean the dried flowers of the marijuana plant as defined by the Board.

(g) “Marijuana leaves” shall mean the dried leaves of the marijuana plant as defined by the Board.

(f) “Marijuana products” shall have the same meaning as set forth in subdivision (k) of Section 26010 of the Business and Professions Code.

(g) “Retail sale” shall have the same meaning as set forth in Section 6007 of the Revenue and Taxation Code.

34015. Marijuana Tax Fund.

(a) The Marijuana Tax Fund is hereby created in the State Treasury. The Tax Fund shall consist of all revenues deposited therein pursuant to this Part.

(b) Moneys in the Tax Fund may only be appropriated for the following purposes:

(1) Costs incurred by the Board for administering and collecting the taxes imposed by Sections 34020, 34030, and 34040.

(2) Costs incurred by the Department for implementing, administering, and enforcing Division 10 of the Business and Professions Code.

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Do we need to fund any other agencies as well?Should we put a limit on how much can go to (b)(1) and (b)(2)??


(3) Research pertaining to the implementation and effect of the Control, Regulate, and Tax Marijuana Act.

(4) Funding for the California Marijuana Research Program.

(5) The purposes set forth for each account in subdivision (c).

(c) The Tax Fund shall contain five separate accounts, as follows:

(1) The Treatment and Prevention Account, appropriated by the Controller to the State Department of Health Care Services, or its successor agency, in the following formula:

(A) Fifty percent (50%) for the development and ongoing funding of evidence-based substance abuse treatment and prevention services designed to reduce potential harms stemming from the misuse and abuse of drugs and alcohol by persons younger than twenty-one years of age. These services shall not rely on punitive sanctions and shall prioritize school retention and continued learning. Up to two percent (2%) of the fifty percent (50%) shall be allocated to a public university in California to evaluate the effectiveness of substance use disorder prevention and treatment modalities for persons younger than twenty-one years of age, and to recommend best practices in the fields of prevention and treatment for persons younger than twenty-one years of age.

(B) Fifty percent (50%) for the development and ongoing funding of evidence-based, community-based, voluntary substance abuse treatment interventions, including but not necessarily limited to services for persons with co-occurring mental health and substance use disorders, medication assisted treatments, and outreach and health programs for out-of treatment drug users. Up to two percent (2%) of the fifty percent (50%) shall be allocated to a public university in California to evaluate the effectiveness of substance use disorder prevention and treatment modalities, and to recommend best practices in the fields of prevention and treatment.

(2) The Education Account, appropriated by the Controller to the Department of Education, or its successor agency, to administer a grants program to public agencies aimed at improving outcomes for public school pupils in kindergarten and grades 1 to 12, inclusive, by reducing truancy, supporting students who are at risk of dropping out of school, and promoting alternatives to suspension or expulsion that focus on school retention, academic remediation, and professional care.

(3) The Safe Neighborhoods Account, appropriated by the Controller to the Board of State and Community Corrections, or its successor agency, to administer a grants program to public agencies aimed at supporting mental health treatment, substance abuse treatment, and diversion programs for people in the criminal justice system, with an emphasis on programs that reduce recidivism of people convicted or less serious crimes, and of those who have substance abuse and mental health problems.

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This is modeled on Prop. 47


This is modeled on Prop. 47


Check that this is the right way to do it. In CA2014 we said the Legislature appropriated per the tax consultants advice. Should it be Controller disbursing the funds instead?—this is what prop. 47 did. Seems better to not rely on the Legislature to have to do anything.


(4) The Protection of State Parks and Wildlife Account, appropriated by the Controller in the following formula:

(A) Twenty percent (20%) to the California Environmental Protection Agency and the Natural Resource Agency, or their successor agencies, for the restoration of clean air, water, and soil, and for the mitigation and cleanup of environmental harms when there is no financially responsible party.

(B) Forty percent (40%) to Department of Fish and Game, or its successor agency, for the management and operation of wildlife refuges, ecological reserves, and other lands owned or managed by the Department of Fish and Game for Wildlife Conservation.

(C) Forty percent (40%) to the Department of Parks and Recreation, or its successor agency, to develop and administer a program of grants to public agencies to enhance the operation, management, and restoration of urban river parkways providing recreational benefits and access to open space and wildlife areas to underserved urban communities.

(5) The Local Government Account, appropriated by the Controller to cities and counties to assist with law enforcement, fire protection, or other local programs addressing public health and safety issues that may be associated with the Control, Regulate, and Tax Marijuana Act, in proportion to the amount of marijuana cultivated and sold at retail under Division 10 of theBusiness and Professions Code within each jurisdiction relative to the rest of the state.

(d) No moneys in the Marijuana Tax Fund shall be used to supplant state or local General Fund moneys for any purpose.

34020. Square Foot Tax.

(a) A tax is hereby imposed upon on all persons required to be licensed to produce marijuana under Division 10 of the Business and Professions Code at a rate of $0.50 per plant cycle per square foot area used to produce marijuana beginning on June 1, 2021.

(b) This rate shall be adjusted by the Board annually for inflation.

34030. Weight Tax.

(a) A tax equal to $0.50 per gram of marijuana flowers is hereby imposed on all marijuana flowers produced by a person required to be licensed to produce marijuana under Division 10 of the Business and Professions Code beginning on June 1, 2021.

(b) A tax equal to $0.05 per gram of marijuana leaves is hereby imposed on all marijuana leaves produced by a person required to be licensed to produce marijuana under Division 10 of the Business and Professions Code beginning on June 1, 2021.

(c) The rates set forth in (a) and (b) shall be adjusted by the Board annually for inflation.

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I’m setting the cultivation tax a couple years out in order for the BOE to have time to figure out how to collect the tax and also in order to bring cultivators into the system and allow them to get established and to ensure that initial prices and costs are not too high.


Need a definition for plant cycle. The idea is that the tax is assessed each time the plant is harvested. So indoor grows that have more growing cycles would pay more.


There are different ways to do this in terms of rewarding localities that don’t ban. If we based the allocation on the # of licensees rather than the percent or amount grown or sold we would encourage little guys but that doesn’t really seem fair to a city like Oakland that wants to have 5 big guys. I am worried that this pay back as I have set forth here will encourage cities like Oakland to license all indoor cultivation to meet the consumption needs of its entire city so that it collects all the tax revenue. We could do the allocation by population, but a locality receives no money if it enacts a complete ban pursuant to the local ban provision in any one category of licensure.


We need to talk to the enviros about how to allocate this money.


34040. Retail Tax.

(a) In addition to the tax imposed under Chapter 2 (commencing with Section 6051) of Part 1 of this Division, a tax is hereby imposed upon all persons required to be licensed for retail sale under Division 10 of the Business and Professions Code at the rate of ten percent (10%) of the gross receipts of any such person from the retail sale of all marijuana or marijuana products sold at retail in this state beginning on June 1, 2018.

(b) For purposes of the application of the Sales and Use Tax under Part 1 of this Division, gross receipts, as defined in section 6012, shall include the tax levied under this Section.

34050. Collection and Administration.

(a) The Board shall administer and collect the tax imposed by Sections 34020, 34030, and 34040 pursuant to the Fee Collection Procedures Law (Part 30 of this Division, commencing with Section 55001). For purposes of Section 34020, the references in the Fee Collection Procedures Law to “fee” shall include the taxes imposed by Section 34020, 34030, and 34040 and references to “feepayer” shall mean any person liable for the payment of the taxes imposed by Section 34020, 34030, and 34040 and collected pursuant to that law.

(b) The taxes imposed by Section 34020, 34030, and 34040 are due and payable to the Board quarterly on or before the last day of the month following each quarterly period of three months. On or before the last day of the month following each quarterly period, a return for the preceding quarterly period shall be filed with the Board by each person required to be licensed for production or retail under Division 10 of the Business and Professions Code.

34060. Distribution of Funds.

(a) All monies raised pursuant to the taxes imposed by Sections 34020, 34030, and 34040 shall be deposited into the Fund.

(b) By July 15 of each fiscal year, the Controller shall disburse monies deposited in the Fund during the prior fiscal year as follows:

(1) Twenty percent (20%) shall be deposited in the Treatment and Prevention Account.

(2) Twenty percent (20%) shall be deposited in the Education Account.

(3) Twenty percent (20%) shall be deposited in the Safe Neighborhoods Account.

(4) Twenty percent (20%) shall be deposited in the Protection of State Parks and Wildlife Account.

(5) Twenty percent (20%) shall be deposited in the Local Government Account.

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The retail tax will commence with the first sales.


I am open to consolidating the three separate taxes into one retail tax that requires the BOE to adjust the rate every few years to maintain a certain revenue (as it does with the gas tax) pending consultation with a tax attorney as to how to best do this. The real difficulty will be determining what revenue level the BOE should be adjusting the tax rate to satisfy: 1) There is no current revenue stream as a baseline for us or the BOE to look to and projections of what revenue will be are incredibly uncertain; 2) We have no idea at what point—how many years out—revenue will steady and what point to lock in an amount for the BOE to adjust to. Prices might initially be very high, they might the plummet—we don’t really know what will happen or when it will happen; 3) the baseline revenue could have some dramatic changes in its future, such as when federal prohibition ends. The BOE would need to ability to reset its target revenue collection to account for this.


We need to decide whether to exempt this tax from all sales from medical marijuana retail licensees and only apply it to marijuana retail licensees. Right now I have the tax applying to both and exempt out from the tax medical marijuana patients who purchase from either a medical retailer or a general retailer.


(c) Any amount appropriated from any account specified in subdivision (b) that is not encumbered within the period prescribed by law shall revert to the account from which it was appropriated.

(d) The Controller shall appropriate from the Fund, before any funds are disbursed pursuant to subdivision (b), the following:

(1) Reasonable costs incurred by the Board for administering and collecting the taxes imposed by Sections 34020, 34030, and 34040.

(2) Reasonable costs incurred by the Department for implementing, administering, and enforcing Division 10 of the Business and Professions Code in excess of the monies available in the Marijuana Regulation Fund established in Section 26200 of the Business and Professions Code. The Department of Finance shall report to the Legislature annually until 2026 on the fiscal condition of the Marijuana Regulation Fund and make recommendations as appropriate for legislation to ensure its stable, self-sustaining operation.

(3) Three million dollars ($3,000,000) to a public university in California annually to research and evaluate the implementation and effect of the Control, Regulate, and Tax Marijuana Act until the year 2038. The recipients of these funds shall publish reports on their findings at a minimum of every two years and shall make the reports available to the public. The research funded pursuant to this subdivision shall include but not necessarily be limited to:

(A) Impacts on public health, including health costs associated with marijuana use.

(B) Health costs associated with the criminal prohibition of marijuana.

(C) The impact of treatment for maladaptive marijuana use and the effectiveness of different treatment modalities.

(D) Public safety issues related to marijuana use and the criminal prohibition of marijuana use.

(E) Marijuana use rates and maladaptive use rates for adults and youth, and diagnosis rates of marijuana-related substance-use disorders.

(F) Marijuana market prices, illicit market prices, tax structures and rates, including an evaluation of how to best tax marijuana based on potency, and the structure and function of licensed marijuana businesses.

(G) The economic impacts in the private and public sectors, including but not necessarily limited to job creation, workplace safety, revenues, taxes generated for state and local budgets, and criminal justice impacts including but not necessarily limited to impacts on law enforcement and public resources, short and long term consequences of involvement in the criminal justice system, and state and local government agency administrative costs and revenue.

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The Controller or the Legislature?


We could also give a set amount annually to DRE training before the money is dispersed to the funds if we think that will help with our DUI issues.


Do we need to say in what order the funds are dispersed under (d)?


(4) Ten million dollars ($10,000,000) to the California Marijuana Research Program established in Section 11362.9 of the Health and Safety Code annually to commission scientific research regarding the safety and efficacy of administering marijuana as part of medical treatment until the year 2028.

(5) Ten million dollars ($10,000,000) to the Governor’s Office of Business and Economic Development to establish small business administration training and regulatory compliance programs for potential marijuana establishment applicants and licensees until the year 2020.

34070. Procedures.

(a) The taxes imposed by Sections 34020, 34030, and 34040 shall be collected by the Board.

(b) The Board shall establish a procedure for the collection of the tax imposed by Section 34040 by June 1, 2018.

(c) The Board shall establish a procedure for the collection of the taxes imposed by Sections 34020 and 34030 by June 1, 2021.

(d) The Board shall submit a report to the Legislature by 2023 with recommendations to the Legislature for adjustments to the tax rate to achieve the goals of undercutting illicit market prices and discouraging use by persons younger than twenty-one years of age.

(e) The California Legislative Analyst’s Office shall regularly review the tax levels established under this section and make recommendations to the Legislature, as appropriate, regarding adjustments that would further the goals of undercutting illicit market prices and discouraging use by persons younger than twenty-one years of age.

(f) The Legislature may increase the tax rates imposed by Sections 34020, 34030, and 34040 or impose additional taxes on marijuana and marijuana products, so long as changes in tax rates and additional taxes are consistent with the intents and purposes of the Control, Regulate, and Tax Marijuana Act and further the goals of undercutting illegal market prices and discouraging use by persons younger than twenty-one years of age.

34080. Audit.

The Controller, pursuant to his or her statutory authority, shall periodically audit the Fund to ensure that those funds are used and accounted for in a manner consistent with this Part.

34090. Applicability.

(a) The tax imposed by Section 34020 shall be imposed on every square foot of marijuana produced in the state pursuant to rules and regulations promulgated by the Board, except for marijuana produced pursuant to Sections 11362.1 or 11362.5 of the Health and Safety Code.

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Should we make the timing of audits mandatory—every two years?


Unsure who we should give this money to. We could break it up and give some to CDFA to assist cultivators and some to the CA Office of Business and Economic Development. Or we could give it to the ABC to develop programs to help people comply with its regulations. Or it could go to localities. Not sure how much money we should put into this but whatever it is it will not be much money to spread all around the state.


(b) The tax imposed by Section 34030 shall be imposed on all marijuana flowers and all marijuana leaves produced in the state pursuant to rules and regulations promulgated by the Board, except for marijuana produced pursuant to Sections 11362.1 or 11362.5 of the Health and Safety Code.

(c) The tax imposed by Section 34040 shall apply to every retail sale of marijuana or marijuana products in the state, except for marijuana and marijuana products sold to a customer who:

(1) Possesses a valid identification card issued pursuant to Section 11362.71 of the Health and Safety Code; and

(2) Does not have income that exceeds the income level set forth for eligibility for Medi-Cal benefits under Section 14005.60(b) of the Welfare and Institutions Code.

SECTION 6. Start-up Loan.

(a) It is the intent of the People of the State of California that the Legislature provide a start-up loan of thirty million dollars ($30,000,000) from the General Fund, to be repaid with tax revenues on the retail sale of marijuana and marijuana products generated under this Act, in order to cover the initial implementation of this Act.

(b) There is hereby appropriated thirty million dollars ($30,000,000) from the General Fund as a loan for the start-up costs of regulation, tax collection and administration, and public education and outreach about this Act, to be allocated by the Director of Finance. These costs shall include:

(1) Costs to the Board of Equalization and the Department of Alcoholic Beverage Control to implement, administer, and enforce this Act;

(2) Costs to State Department of Health Care Services of an evidence-based prevention and education campaign about marijuana targeted at discouraging persons younger than twenty-one years of age from using marijuana.

(3) Costs to state and local agencies to administer business administration training programs and assistance to producers, distributors, and providers of medical marijuana under the Compassionate Use Act and its implementing laws on applying for licenses and coming into regulatory compliance.

(c) For purposes of repaying the loan, and notwithstanding anything to the contrary in Part 14.5 of Division 2 of the Revenue and Taxation Code, as set forth in this Act, the Controller shall transfer all tax revenues received by the Marijuana Tax Fund up to the amount of the loan provided by this section, including interest at the pooled money investment account rate, to the General Fund. The loan shall be repaid no later than June 1, 2024.

SECTION 7. Contracts.

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Do we need to spread this money to any other agencies or break down how much for (1), how much for (2), how much for (3)?


We need to consult with the ABC and the BOE about the amount of money they will need. Do we need to increase this amount and break down which agencies get what amount?


Do we need to direct the Board to issue rules and to how patients will be able to demonstrate their tax exempt status? Does the BOE issue them a card? Leave it up to the BOE to figure out? Could be implied that they have to come up with ruled for this since they are required to establish a procedure for the collection of the retail tax.We could also make it that you need to be enrolled in Medi-Cal and have to show participation in that program to get the tax deduction thereby alleviating the need of the BOE to determine who is eligible. As a precedent for this in Section 11362.755 of the Health and Safety Code, Medi-Cal patients are entitled to a reduction in fee for the medical marijuana identification card.


It is the public policy of the People of the State of California that contracts related to the operation of licenses under this Act should be enforceable and no contract entered into by a licensee, its employees, or its agents as permitted pursuant to a valid license issued by the Department of Alcoholic Beverage Control, or by those who allow property to be used by a licensee, its employees, or its agents as permitted pursuant to a valid license issued by the Department of Alcoholic Beverage Control, shall be deemed unenforceable on the basis that the actions or conduct permitted pursuant to the license are prohibited by federal law.

SECTION 8. Provision of Professional Services.

An attorney, accountant, insurance agent, real estate agent, security guard, or other person engaged in a profession subject to state licensure may not be subject to disciplinary action by the state bar association, other state professional board, or state licensing association for providing professional services or assistance to prospective or licensed marijuana establishments or others related to activity that the person reasonably believes is permitted by the provisions of this Act and the statutes, regulations, orders, and other state or local provisions implementing this Act. SECTION 9. Section 11018 and 11018.5 of the Health and Safety Code is hereby amended to read:

11018. Marijuana Defined“Marijuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds of that plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin. It does not include industrial hemp, as defined in Section 11018.5, except where the plant is cultivated or processed for purposes not expressly allowed for by Division 24 (commencing with Section 81000) of the Food and Agricultural Code. or the weight of any other ingredient combined with marijuana to prepare topical or oral administrations, food, drink, or other product.

SECTION 10. Sections 11362.1 is added to the Health and Safety Code, to read:

Section 11362.1. Personal Use of Marijuana.

(a) Notwithstanding any other provision of law, it is lawful under state and local law, and shall not be a violation of state or local law, for persons twenty-one years of age or older to:

(1) Possess, use, process, transport, purchase, obtain, smoke, ingest, or give away to a person twenty-one years of age or older marijuana paraphernalia or one ounce or less of marijuana, except that not more than four grams of the marijuana may be in the form of concentrated cannabis.

(2) Plant, cultivate, harvest, dry, or process six or fewer marijuana plants and the marijuana produced by the plants, provided that:

(A) The plants and any marijuana produced by the plants in excess of one ounce are kept at the person’s home or other private residence, or upon the grounds of that home or private

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We have to decide whether to include transport of the plants here. Seedling and seeds of course would need to be transported but they probably fall under one ounce and thus could be protected by (a)(1). Transport of larger plants is difficult because you would be unable to comply with the requirements that they be locked and not visible from a public place.


What to do about transport if anything. Or seedlings and seeds?


We need to think about how to address concentrated cannabis in terms of the title and summary. It is included in the definition of marijuana but also defined separately in the code. We would like to allow a lower possession limit for concentrates by do not want to pull it out so much so that the title and summary says we are legalizing marijuana and concentrated cannabis. This is what happened with our title and summary in 2014.How I have it hear is on proposed solution however it is a little odd because ideally you would be able to possess and ounce of marijuana and four grams of concentrate. We also need to decide how many grams to allow.


Decide if we need to more specifically define “local law” or “locality”


Still need to check that these sections have really been changed officially in the code following the hemp bill.


residence, are in a locked space, and are not visible by normal unaided vision from a public place; and

(B) Not more than six plants may be planted, cultivated, harvested, dried, or processed at a single home or private residence, or upon the grounds of that home or private residence, at one time.

(3) Assist another person who is twenty-one years of age or older, or allow property to be used, in any of the actions or conduct permitted under subdivision (a).

(b) Notwithstanding any other provision of law, the following penalties apply as follows:

(1) A person who cultivates plants pursuant to (a)(2)(A) that are visible from by normal unaided vision from a public place is guilty of an infraction punishable by no more than a two-hundred and fifty dollar ($250) fine.

(2) A person who cultivates plants pursuant to (a)(2)(A) that are not kept in a locked space secured from access by others is guilty of an infraction punishable by no more than a two-hundred and fifty dollar ($250) fine.

(3) A person guilty of a third or subsequent violation of (1) or (2) is guilty of a misdemeanor.

(4) A person who smokes or ingests marijuana in a public place is guilty of an infraction punishable by no more than a one hundred ($100) fine, unless such activity is permitted pursuant to Section 26190(e) of Division 10 of the Business and Professions code.

(c) Nothing in this section shall be construed or interpreted to permit:

(1) Marijuana to be smoked or ingested in any public place, unless permitted pursuant to Section 26190(e) of Division 10 of the Business and Professions code.

(2) Marijuana to be smoked in a location where smoking tobacco is prohibited.

(3) Marijuana to be smoked or ingested while driving, operating, or riding in the passenger compartment of a motor vehicle, boat, vessel, aircraft, or other vehicle or device used for transportation.

(4) The undertaking of any task that while impaired that would constitute negligence or professional malpractice.

(5) A person to give away any amount of marijuana as part of a business promotion or other commercial activity.

(6) The manufacture of concentrated cannabis by using a flammable gas, unless done pursuant to a license issued under Division 10 of the Business and Professions Code.

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Need to decide whether or not to define public place. It other areas of law it is definer pretty restrictively. However it is also hard to define it less restrictively.


Do we need to say except as allowed by Division 10 of the B&P Code? Presumably you also want licensees to cultivate out of public view and secure from access but they should be punished for violations pursuant to Division 10, not here.


We have to decide whether or not to define “private residence” or not. It can be tricky because of apartment buildings and multi-unit dwellings. It should generally be per kitchen. So a frat house would be one residence but an apartment building would be multi-residence. In Oregon we used the following definition: “A house, apartment, a mobile home, a group of rooms, or a single room that is occupied as a separate living quarters, in which the occupants live and eat separately from any other persons in the building and which have direct access from the outside of the building or through a common hall.”


(d) Nothing in this section shall be construed or interpreted to amend or affect:

(1) Laws prohibiting the sale, administering, furnishing, or giving away of marijuana, or the offering to sell, administer, furnish, or give away marijuana, to a person younger than twenty-one years of age.

(2) Laws prohibiting a person younger than twenty-one years of age from engaging in any of the actions or conduct otherwise permitted under subdivision (a).

(3) The ability of public and private employers to maintain, enact, and enforce workplace policies prohibiting or restricting actions or conduct otherwise permitted under subdivision (a) in the workplace or by their employees.

(4) The ability of a locality to regulate nuisance.

(5) Laws pertaining to driving or operating a motor vehicle, boat, vessel, aircraft, or other vehicle or device used for transportation under the influence of marijuana.

(6) The ability of a state or local government agency to prohibit or restrict actions or conduct otherwise permitted under subdivision (a) within a building owned, leased, or occupied by the state or local government agency.

(7) The ability of an individual or private entity to prohibit or restrict actions or conduct otherwise permitted under subdivision (a) on the individual’s or entity’s privately owned property.

(8) Laws pertaining to actions or conduct otherwise permitted under subdivision (a) on the grounds of, or within, any facility or institution under the jurisdiction of the Department of Corrections and Rehabilitation or the Division of Juvenile Justice, or on the grounds of, or within, any other facility or institution referenced in Section 4573 of the Penal Code.

(9) Laws pertaining to actions or conduct otherwise permitted under subdivision (a) on the grounds of, or within, a school providing instruction in kindergarten or any grades 1 through 12.

(10) Laws pertaining to the Compassionate Use Act of 1996.


Section 11362.2. Marijuana Paraphernalia Authorized.

Notwithstanding any other provision of law, it is lawful under state and local law, and shall not be a violation of state or local law, for persons twenty-one years of age or older to possess, transport, purchase, obtain, use, manufacture, or give away or sell to persons twenty-one years of age or older equipment, products, or materials designed to assist in the smoking, ingesting, using, growing, cultivating, producing, processing, manufacturing, testing, or distributing of

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This might be too broad –it is fair for there to be zoning of paraphernalia shops—no bong stores in a residential area—and thus if you opened one up you should be subject for civil penalties for not following zoning and business regulations. John Lovell raised this with the LAO with our 2014 language.The previous section already allow personal possession and use—is this really about sales? Is it important to say paraphernalia is authorized for protection under the CSA?


Need to figure out right language for nuisance. Generally applicable nuisance laws or are marijuana specific nuisance laws ok? It has to be strict enough so that localities can’t declare all GYO a nuisance but could say GYO in your yard next to a school on a hot summer day is a nuisance.


marijuana and products containing marijuana, provided that such equipment, products, or materials are used in compliance with Section 11362.1 and with Division 10 of the Business and Professions Code.


Section 11362.3. Penalties, Seizure, and Forfeiture.

(a) Notwithstanding any other provision of law, no criminal, civil or administrative penalty may be imposed on any person who is twenty-one years of age or older solely for actions or conduct permitted under Sections 11362.1 or 11362.2.

(b) Notwithstanding any other provision of law, the actions and conduct permitted under Sections 11362.1 and 11362.2 shall not be a basis for the seizure or forfeiture of any products, materials, equipment, property, or assets under state or local law.

SECTION 13. Section 11357 of the Health and Safety Code is hereby amended to read:

11357. (a) Except as authorized by law, every person twenty years of age or younger who possesses any concentrated cannabis and every person twenty-one years of age or older who possesses more than four grams of concentrated cannabis shall be punished by imprisonment in the county jail for a period of not more than one year or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment, except that such person may instead be punished pursuant to subdivision (h) of Section 1170 of the Penal Code if that person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code.

(b) Except as authorized by law, every person twenty years of age or younger who possesses not more than 28.5 grams of marijuana, other than concentrated cannabis, is guilty of an infraction punishable by a fine of not more than one hundred dollars ($100). Any person guilty under the age of eighteen years shall have the option of completing eight hours of drug awareness education in lieu of the one hundred dollar ($100) fine.

(c) Except as authorized by law, every person who possesses more than 28.5 grams of marijuana, other than concentrated cannabis, shall be punished by imprisonment in a county jail for a period of not more than six months or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment.

(d) Except as authorized by law, every person 18 years of age or over who possesses not more than 28.5 grams of marijuana, other than concentrated cannabis, upon the grounds of, or within, any school providing instruction in kindergarten or any of grades 1 through 12 during hours the school is open for classes or school-related programs is guilty of a misdemeanor and shall be punished by a fine of not more than five hundred dollars ($500), or by imprisonment in a county jail for a period of not more than 10 days, or both.

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If we make these changes we should consider whether we need to fund the drug education specifically through the tax revenue or say what type of education it should be. Otherwise it is unclear what will happen if the person opts for drug education but no programs exist.


Do we need to add in an exception for licenses under Division 10? Or does the “except as otherwise authorized by law” language cover it. There is also the affirmative protection language for licensees in Division 10.


(e) Except as authorized by law, every person under the age of 18 who possesses not more than 28.5 grams of marijuana, other than concentrated cannabis, upon the grounds of, or within, any school providing instruction in kindergarten or any of grades 1 through 12 during hours the school is open for classes or school-related programs is guilty of a misdemeanor an infraction and shall be subject to the following dispositions:(1) A fine of not more than two hundred fifty dollars ($250) one hundred dollars ($100), upon a finding that a first offense has been committed and completion of eight hours of drug awareness education.(2) A fine of not more than five hundred dollars ($500) three hundred dollars ($300) and completion of eight hours of drug awareness education., or commitment to a juvenile hall, ranch, camp, forestry camp, or secure juvenile home for a period of not more than 10 days, or both, upon a finding that a second or subsequent offense has been committed.


11358. Every person who plants, cultivates, harvests, dries, or processes any marijuana or any part thereof, except as otherwise provided by law, shall be punished by imprisonment in the county jail for a period of not more than one year or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment, except that such person may insteadbe punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code if:(1) The person plants, cultivates, harvests, dries, or processes any marijuana or any part thereof while trespassing on public or private land; or (2) The person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code.

SECTION 15. Section 11359 is deleted from the Health and Safety Code:

11359. Every person who possesses for sale any more than 28.5 grams of marijuana, except as otherwise provided by law, shall be punished by imprisonment in the county jail for a period of not more than one year or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment, except that such person may instead be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code if:(1) The person possesses marijuana for the purpose of exporting the marijuana for sale from the state to a jurisdiction where such import is illegal under the laws of that jurisdiction; or (2) The person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code.


11360. (a) Except as otherwise provided by this section or as authorized by law, 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 marijuana shall be punished by imprisonment in the county jail for a period of not more than one year or by a fine of not more than five hundred dollars ($500), or by

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Is this the right language? Do we need to better define it—what does “trespass” mean?


both such fine and imprisonment, except that such person may instead be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for a period of two, three, or four years if:(1) The person exports marijuana for sale from the state to a jurisdiction where such import is illegal under the laws of that jurisdiction; or (2) The person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code.

(b) Except as authorized by law, every person twenty years of age or younger who gives away, offers to give away, transports, offers to transport, or attempts to transport not more than 28.5 grams of marijuana, other than concentrated cannabis, is guilty of a misdemeanor an infraction and shall be punished by a fine of not more than one hundred dollars ($100). In any case in which a person is arrested for a violation of this subdivision and does not demand to be taken before a magistrate, such person shall be released by the arresting officer upon presentation of satisfactory evidence of identity and giving his written promise to appear in court, as provided in Section 853.6 of the Penal Code, and shall not be subjected to booking. Any person guilty who is under the age of eighteen years shall have the option of completing eight hours of drug awareness education in lieu of the one hundred dollar ($100) fine.


11366. (a) Every person who opens or maintains any place for the purpose of unlawfully selling, giving away, or using any controlled substance which is (1) specified in subdivision (b), (c), or (e), or paragraph (1) of subdivision (f) of Section 11054, specified in paragraph (13), (14), (15), or (20) of subdivision (d) of Section 11054, or specified in subdivision (b), (c), paragraph (1) or (2) of subdivision (d), or paragraph (3) of subdivision (e) of Section 11055, or (2) which is a narcotic drug classified in Schedule III, IV, or V, shall be punished by imprisonment in the county jail for a period of not more than one year or the state prison.

(b) Every person who opens or maintains any place for the purpose of unlawfully selling, giving away, or using any controlled substance which is (1) specified in subdivision (b), (c), or (e), or paragraph (1) of subdivision (f) of Section 11054 , specified in paragraph (13) , (14), (15), or (20) of subdivision (d) of Section 11054 , or specified in subdivision (b) , (c) , paragraph (1) or (2) of subdivision (d), or paragraph (3) of subdivision (e) of Section 11055 , or (2) which is a narcotic drug classified in Schedule III, IV, or V, shall be punished by imprisonment in the county jail for a period of not more than one year or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment, except that such person may instead be punished by imprisonment in the state prison that person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code.

SECTION 18. Section 11366.5 of the Health and Safety Code is hereby amended to read:

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(a) (1) Any person who has under his or her management or control any building, room, space, or enclosure, either as an owner, lessee, agent, employee, or mortgagee, who knowingly rents, leases, or makes available for use, with or without compensation, the building, room, space, or enclosure for the purpose of unlawfully manufacturing, storing, or distributing any controlled substance for sale or distribution, other than marijuana, shall be punished by imprisonment in the county jail for not more than one year, or pursuant to subdivision (h) of Section 1170 of the Penal Code.(2) Any person who has under his or her management or control any building, room, space, or enclosure, either as an owner, lessee, agent, employee, or mortgagee, who knowingly rents, leases, or makes available for use, with or without compensation, the building, room, space, or enclosure for the purpose of unlawfully manufacturing, storing, or distributing marijuana, shall be punished by imprisonment in the county jail for a period of not more than one year or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment, except that such person may instead be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code if the person has one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 of the Penal Code or for an offense requiring registration pursuant to subdivision (c) of Section 290 of the Penal Code.

(b) Any person who has under his or her management or control any building, room, space, or enclosure, either as an owner, lessee, agent, employee, or mortgagee, who knowingly allows the building, room, space, or enclosure to be fortified to suppress law enforcement entry in order to further the sale of any amount of cocaine base as specified in paragraph (1) of subdivision (f) of Section 11054, cocaine as specified in paragraph (6) of subdivision (b) of Section 11055, heroin, phencyclidine, amphetamine, methamphetamine, or lysergic acid diethylamide and who obtains excessive profits from the use of the building, room, space, or enclosure shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years.

(c) Any person who violates subdivision (a) after previously being convicted of a violation of subdivision (a) shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for two, three, or four years.

(d) For the purposes of this section, “excessive profits” means the receipt of consideration of a value substantially higher than fair market value.

SECTION 19. Section 11361.3 is added to the Health and Safety Code, to read:

11361.3 (a) A person currently serving a sentence for a conviction, whether by trial or by plea, who would not have been guilty of an offense or who would have been guilty of a lesser offense under the Control, Regulate, and Tax Marijuana Act had that Act been in effect at the time of the offense may petition for a recall of sentence before the trial court that entered the judgment of conviction in his or her case to request resentencing in accordance with Sections 11357, 11358, 11359, 11360, 11366, and 11366.5 of the Health and Safety Code, as those sections have been added or amended by the Control, Regulate, and Tax Marijuana Act.

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This potentially has a cost associated with it as it required factual hearings in court—might impact LAO analysis.If we include retroactivity we should also probably include some funding for it to cover the costs of attorneys, court time, probation and parole. Many of the resentencings will require hearings. People will need attorneys to represent them.This retroactivity language is based on addressing people who are currently incarcerated, people who are on probation, and people who have priors. If we only want to deal with priors—changing olds felony records—we might be able to do it more simply through changes to Penal Code Sections 17(b) and 1203.4. Whether a simpler options is available needs to be more fully explored.


(b) Upon receiving a petition under subdivision (a), the court shall determine whether the petitioner satisfies the criteria in subdivision (a). If the petitioner satisfies the criteria in subdivision (a), the petitioner’s sentence shall be recalled and the petitioner resentenced to misdemeanor or infraction or the petitioner’s sentence expunged depending on the underlying conduct of the offense pursuant to Sections 11357, 11358, 11359, 11360, 11366, and 11366.5 unless the court, in its discretion, determines that resentencing the petitioner would pose an unreasonable risk of danger to public safety. In exercising its discretion, the court may consider all of the following:(1) The petitioner’s criminal conviction history, including the type of crimes committed, the extent of injury to victims, the length of prior prison commitments, and the remoteness of the crimes.(2) The petitioner’s disciplinary record and record of rehabilitation while incarcerated.(3) Any other evidence the court, within its discretion, determines to be relevant in deciding whether a new sentence would result in an unreasonable risk of danger to public safety.(c) “Unreasonable risk of danger to public safety” means an unreasonable risk that the petitioner will commit a new violent felony within the meaning of clause (iv) of subparagraph(C) of paragraph (2) of subdivision (e) of Section 667.(d) A person who is resentenced pursuant to subdivision (b) shall be given credit for time served and shall be subject to parole for one year following completion of his or her sentence if the underlying sentence was for a felony, unless the court, in its discretion, as part of its resentencing order, releases the person from parole. Such person is subject to Section 3000.08 parole supervision by the Department of Corrections and Rehabilitation and the jurisdiction of the court in the county in which the parolee is released or resides, or in which an alleged violation of supervision has occurred, for the purpose of hearing petitions to revoke parole and impose a term of custody.(e) Under no circumstances may resentencing under this section result in the imposition of a term longer than the original sentence.47(f) A person who has completed his or her sentence for a conviction, whether by trial or plea, who would not have been guilty of an offense or who would have been guilty of a lesser offense under the Control, Regulate, and Tax Marijuana Act had that Act been in effect at the time of the offense, may file an application before the trial court that entered the judgment of conviction in his or her case to have the felony or misdemeanor convictions that are for conduct that is no longer an offense expunged, felony convictions designated as misdemeanors, and misdemeanor convictions designated as infractions. (g) If the application satisfies the criteria in subdivision (f), the court shall expunge or re-designate the offense.(h) Unless requested by the applicant, or if the court determines that a factual hearing is warranted, no hearing is necessary to grant or deny an application filed under subdivision (f).(i) The provisions of this section shall not apply to persons who have one or more prior convictions for an offense specified in clause (iv) of subparagraph (C) of paragraph (2) of subdivision (e) of Section 667 or for an offense requiring registration pursuant to subdivision (c) of Section 290.(j) Any petition or application under this section shall be filed within three years after the effective date of the act that added this section or at a later date upon a showing of good cause.(k) Any felony conviction that is recalled and resentenced under subdivision (b) or designated as a misdemeanor under subdivision (g) shall be considered a misdemeanor for all purposes,

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Not sure if we address convictions that go away entirely. A prior felony for growing a plant at home which would now be completely legal.


In most cases it is going to require an underlying determination of the facts to see if the person qualifies for reduction.


except that such resentencing shall not permit that person to own, possess, or have in his or her custody or control any firearm or prevent his or her conviction under Chapter 2 (commencing with Section 29800) of Division 9 of Title 4 of Part 6.(l) If the court that originally sentenced the petitioner is not available, the presiding judge shall designate another judge to rule on the petition or application.(m) Nothing in this section is intended to diminish or abrogate any rights or remedies otherwise available to the petitioner or applicant.(n) Nothing in this and related sections is intended to diminish or abrogate the finality of judgments in any case not falling within the purview of the Control, Regulate, and Tax Marijuana Act.(o) A resentencing hearing ordered under this act shall constitute a “post-conviction release proceeding” under paragraph (7) of subdivision (b) of Section 28 of Article I of the California Constitution (Marsy’s Law).(p) The provisions of this Section shall apply equally to juvenile delinquency adjudications and dispositions under Section 602 of the Welfare and Institutions Code if the juvenile would not have been guilty of an offense or would have been guilty of a lesser offense under the Control, Regulate, and Tax Marijuana Act.4SECTION 20. Section 11362.775 of the Health and Safety Code is hereby amended to read:

11362.775. (a) 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 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. (b) The amendments to this Section take effect 365 days after the Department of Alcoholic Beverage Control begins issuing licenses under subdivision (f) of Section 26150 of Division 10 of the Business and Professions Code.

SECTION 21. Controlled Substance.

Marijuana shall not be considered a controlled substance for the purposes of Health and Safety Code Sections 11100 through 11250.

SECTION 22. Amendment.

Except as otherwise provided herein, this Act may be amended either by a subsequent measure submitted to a vote of the People at a statewide election, or by a statute passed by a sixty percent (60%) vote of the members of each house of the Legislature and signed by the Governor so long as the amendments are consistent with and further the intents of this Act. The Legislature may by majority vote amend, add, or repeal provisions to further reduce the penalties for any of the offenses addressed by this Act.

SECTION 23. Conflicting Measures.

This Act is intended to be comprehensive. In the event that this Act and one or more measures relating to the same subject appear on the same statewide ballot, the provisions of the other

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We need to decide by what standard we want to allow for amendment? To the extent we are including more details that we care about, there is now much more for the Legislature to change—of course there is also a greater chance that we screwed something up that will need to be changed. For example—I am not sure it would be contrary to the intents and purposes of the Act for the legislature to pass a law requiring exclusions from licensing for any prior marijuana conviction—we limit that in the Act but it is not central to its intents and purposes nor is it listed in the intents and purposes (and we don’t want to have to list it there). Especially for issues where we might be taking a political hit should we be allowing the Legislature to easily make changes? We should discuss making it 60% or two thirds.


Not sure about this. Do we need to exempt from drug registration for prescriptions etc. like Oregon did?Doesn’t seem like we necessarily need this as all our licensing and regulatory language says that it trumps any other state law.


This section will have to take effect after licenses are issued as we will need to make sure that medical marijuana entities have the legal protection of a license before we take away the protection afforded by this section.An overlap of time would be good in terms of when licenses are issued and when this amendment takes effect—need to account for delay in implementation and the issuance of a license and also that it may take the ABC time to process applications and issue licenses.The medical bills also get rid of collectives and cooperatives entirely but are also more permissive about bringing all current entities into the new system through provisional licenses.


measure or measures shall be deemed to be in conflict with this Act. In the event that this Act receives a greater number of affirmative votes than a measure deemed to be in conflict with it, the provisions of this Act shall prevail in their entirety, and the other measure or measures shall be null and void.

SECTION 24. Industrial Hemp.

The possession, use, purchase, sale, cultivation, processing, manufacture, packaging, labeling, transporting, storage, distribution, use, and transfer of industrial hemp shall be regulated as a legal agricultural commodity through the California Department of Food and Agriculture. The Department of Alcoholic Beverage Control has authority to regulate and control plants and products that fit within the definition of industrial hemp but that are cultivated, processed, manufactured, tested, delivered, or otherwise handled pursuant to a license issued under Division 10 of the Business and Professions Code.

SECTION 25. Severability.

If any provision in this Act, or part thereof, or the application of any provision or part to any person or circumstance is held for any reason to be invalid or unconstitutional, the remaining provisions and parts shall not be affected, but shall remain in full force and effect, and to this end the provisions of this Act are severable.

SECTION 26. Defense of Act.

(a) In recognition of the proponents’ direct and personal stake in defending this Act, the People of the State of California grant formal authority to those proponents to defend this Act in any legal proceeding.

(b) The proponents of this Act may exercise their authority to defend this Act by either:

(1) Intervening in a legal proceeding; or

(2) Defending the Act on behalf of the People and the State in the event that the State declines to defend the Act, or declines to appeal an adverse judgment against the Act, in which case the proponents shall:

(A) Act as agents of the People and the State;

(B) Be subject to all ethical, legal, and fiduciary duties applicable to such parties in such proceeding; and

(C) Take and be subject to the Oath of Office prescribed by Article XX, Section 3 of the California Constitution for the limited purpose of acting on behalf of the People and the State in such legal proceeding.

SECTION 27. Effective Date.

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Do we need this? This came from the Sutton Law Firm as a result of the Prop. 8 litigation.


Except as otherwise provided herein, the provisions of this Act shall become operative on January 1, 2017.

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Control, Regulate, and Tax Marijuana Act of 2016- Confidential Draft

Documents

Transcript of Control, Regulate, and Tax Marijuana Act of 2016- Confidential Draft