SEPTEMBER 2019 - Capitol Corner

Last-Minute Push for Cannabis Bills in the Legislature

California’s cannabis industry could be reshaped by a pile of bills still making their way through the current legislative cycle. But to get a shot at being signed into law by Governor Gavin Newsom, all remaining bills in California must pass the State Assembly or Senate by this Friday.  

Already, three major bills have been pushed back to 2020, including a bill that would have established charter banks and credit unions for licensed cannabis businesses, as well as one measure that would have authorized veterinarians to recommend cannabis for pets and another that would have created a new license type for cannabis consumption cafés and lounges. Another bill, which sought to bar passengers from smoking or vaping cannabis products in buses, limousines, and taxicabs—with an exception for limousines and buses whose passenger and driver compartments are completely sealed off and separately ventilated—was placed on inactive status. 

Nevertheless, there are still lots of big decisions coming in the next couple of days. And as the landscape for licensed cannabis sales continues to mature in the nation’s largest market, lawmakers are weighing a flurry of cannabis-related bills that, if signed into law, could have a significant impact on the state’s cannabis industry, as well as ripple effects across the country. 

Here are some of the most significant bills still up in the air: 

SB 305 - Last April, State Senator Ben Hueso (D) introduced the “Compassionate Access to Medical Cannabis Act,” also known as “Ryan’s Law,” in collaboration with former Santee Mayor Jim Bartell, who lost his 42-year-old son to pancreatic cancer. The measure seeks to facilitate terminally ill patients’ access to cannabis in healthcare facilities. If implemented, it would require healthcare centers to allow patients in palliative care to use their medical cannabis, as long as they show documentation of a doctor’s recommendation. The patients’ cannabis use would be included in their medical records. Smoking or vaping cannabis in medical facilities would remain prohibited. 

SB 581 - This bill, which is sponsored by the United Food and Commercial Workers Western States Council (UFCW) and is opposed by the California Cannabis Industry Association (CCIA), would require cannabis licensing agencies to post on their websites specific information about applicants and licensees—including labor law violations, enforcement actions, and convictions—by January 1, 2022. 

SB 595 -This bill, introduced by State Senator Steven Bradford (D), who represents a large part of southern Los Angeles County, would require the state’s cannabis licensing authorities to provide application and licensing fee deferrals or waivers to local social equity applicants and licensees. 

AB 37 - As Cannabis Wire reported this week, this bill, authored by Assemblymember Reginald Byron Jones-Sawyer Sr. of Los Angeles, would exempt commercial cannabis activity from a section of state law that prohibits the industry from deducting ordinary expenses such as rent, utilities, employee salaries, and employee health insurance premiums. 

AB 858 - If implemented, this bill would add a limit of 2,500 square feet of canopy for an outdoor grow to the California Department of Food and Agriculture (CDFA) Type1C cannabis cultivation license. According to Assemblymembers Bob Bonta (D), Ken Cooley (D), Reggie Jones-Sawyer (D), and Tom Lackey (R), who authored the bill, by placing a limit of 2,500 square feet of canopy for an outdoor grow, the Type 1C license will conform with all the outdoor cannabis license types. They and others who support the bill also argue that providing an updated definition of a Type 1C license will “help entry-level applicants, particularly social equity candidates, obtain a very basic license which has the flexibility to help them grow.” There is no official opposition to the bill on file. 

AB 1085 - This bill encourages the state’s “After School Education and Safety” programs, the “21st Century Community Learning Centers programs”, and the “21st Century High School After School Safety and Enrichment for Teens” programs to educate about and prevent substance abuse. To do so, the bill would require the Department of Health Care Services to enter into agreements with the California Department of Education to administer those programs, with funding from licensed cannabis sales. 

AB 1291 - This bill requires applicants who seek a license to participate in California’s cannabis industry, and who currently employ less than twenty employees, to provide a statement that they will enter into labor peace agreements within sixty days of employing twenty employees. The measure also requires applicants already employing twenty or more employees to provide a notarized statement that they will or already have entered into a labor peace agreement. In the most recent analysis of the bill, the State Assembly notes that, under current law, a cannabis license applicant must submit a statement that the applicant will enter into a labor peace agreement, or has already done so. However, the law does not set forth any specific timelines associated with that requirement. The Bureau of Cannabis Control regulations simply state that the agreement must be entered into “as soon as reasonably practicable.” The bill also takes into account that applicants may not have twenty employees at the time of their application, but could come to employ twenty employees after obtaining a license. To protect those employees, this bill would require a commitment that a labor peace agreement will be entered into within sixty days, in either scenario.

The Legislature will adjourn on September 13th until January 6, 2020.

Source: Cannabis Wire

California lawmaker pulls cannabis banking bill ahead of floor vote

A California bill that would authorize banks and credit unions to do business with cannabis companies on a limited basis has been pulled by its sponsor. Sen. Bob Hertzberg, D-Los Angeles, announced that he intends to make Senate Bill 51 a two-year bill, re-introducing the legislation in early 2020. “If we’re going to do this, we have to do it right,” Hertzberg said in prepared remarks. “We owe it to the dozens of cities, counties, and cannabis industry officials who have been supporting this effort to see it through.”

Though legal in California, marijuana remains an illegal substance under federal law, making federally-insured banks and credit unions reluctant to do business with cannabis companies. SB 51 would allow those financial institutions to accept deposits from, and issue “special purpose checks to, cannabis companies.”

The bill had the support of California Treasurer Fiona Ma, a co-sponsor of the legislation.

“I will continue to champion this issue on behalf of business investors as well as constituents that voted for a healthy, legal cannabis industry in California,” Ma said in prepared remarks. “I remain committed and am looking forward to working with Governor Newsom and Senator Hertzberg on SB 51 as a top priority for January when the Legislature reconvenes.”

Before it was pulled, SB 51 was set to be voted on on the Assembly floor.

“Because the bill contains an urgency clause and has already cleared a majority of legislative hurdles, there remains a path for it to go into effect in early 2020,” according to a statement from Hertzberg’s office.

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