SB 34

Bill Subjects

Abstract

(1) The Control, Regulate and Tax Adult Use of Marijuana Act (AUMA) , an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) , among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing administrative law prohibits a retailer licensee from providing free cannabis goods to any person or allowing individuals who are not employed by the retailer to provide free cannabis goods to any person on the licensed premises. Existing administrative law provides an exception to this prohibition for specified medicinal retailer and microbusiness licensees to provide access to medicinal cannabis patients who have difficulty accessing medicinal cannabis goods, as specified. This bill, the Dennis Peron and Brownie Mary Act, would similarly authorize, on and after a specified date, licensees that are authorized to make retail sales to provide free cannabis or cannabis products to a medicinal cannabis patient or the patient's primary caregiver if specified requirements are met, including that the cannabis or cannabis products otherwise meet specified requirements of MAUCRSA. The bill would authorize those licensees to contract with an individual or organization to coordinate the provision of free medicinal cannabis and medicinal cannabis products on the retailer's premises. (2) Existing law deems information contained in a physician's recommendation to use cannabis for medical purposes to be "medical information" within the meaning of the Confidentiality of Medical Information Act, and prohibits a licensee from disclosing this information except, among other exceptions, as necessary for the state or any city, county, or city and county to perform certain official duties. Existing law, the Medical Marijuana Program (MMP) , requires counties to administer an identification card program for qualified patients that possess or cultivate cannabis for personal medical purposes. Existing law deems identification cards issued to those qualified patients to be "medical information" within the meaning of the Confidentiality of Medical Information Act, and likewise prohibits a licensee from disclosing these identification cards, subject to the same exceptions. This bill would additionally except from these prohibitions against disclosure the disclosure of the medical information described above as necessary for the state or any city, county, or city and county to perform official duties pursuant to the Sales and Use Tax Law and pursuant to provisions relating to cannabis taxes. (3) Existing sales and use tax laws impose use taxes on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, presumes tangible personal property purchased outside the state that is stored, used, or consumed in this state is purchased for use in this state, and provides various exemptions from those taxes. This bill, on and after a specified operative date, and until 5 years after that operative date, would exempt from the use tax the storage, use, or other consumption in this state of medicinal cannabis or medicinal cannabis products that are donated, for no consideration, under specified circumstances. The bill would require the exemption to apply only if the cannabis retailer certifies in writing, as specified, that the medicinal cannabis or medicinal cannabis product will be used as specified. The bill would make a licensee that uses the donated medicinal cannabis or medicinal cannabis product in some other manner, or for some other purpose, liable for the payment of use tax and subject to having their license suspended. The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws. Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions. This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill. (4) AUMA imposes an excise tax on the purchase of cannabis and cannabis products, as defined, at the rate of 15% of the average market price of any retail sale by a cannabis retailer. The bill would require that these provisions not be construed to impose an excise tax upon medicinal cannabis, or medicinal cannabis products, donated for no consideration to a medicinal cannabis patient, as specified. (5) AUMA imposes a cultivation tax on all harvested cannabis that enters the commercial market upon all cultivators. Existing law defines entering the commercial market to mean cannabis or cannabis products, except for immature cannabis plants and seeds, that complete and comply with specified quality assurance review and testing. This bill, on and after a specified operative date, and until 5 years after that operative date, would prohibit the cultivation tax from being imposed on medicinal cannabis designated for donation by a cultivator in the track and trace system. The bill would require a licensee that certifies in writing that the medicinal cannabis or a medicinal cannabis product will be donated to a medicinal cannabis patient and sells or uses the medicinal cannabis or medicinal cannabis product in some manner or for some purpose other than donation be liable for the cultivation tax. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program. The bill would specify that the certification in writing relieves the cultivator that donates the medicinal cannabis from liability for the cultivation tax and the distributor from liability for collecting the cultivation only if the certification is taken in good faith. The bill would prohibit a distributor from collecting or remitting the cultivation tax for medicinal cannabis or medicinal cannabis products designated for donation by the cultivator. The bill would require a cultivator to keep records of any medicinal cannabis or medicinal cannabis products designated for donation. The bill would require that the cannabis tax provisions not be construed to impose a cultivation tax upon medicinal cannabis or medicinal cannabis products designated for donation by a cultivator. (6) The bill would require the Legislative Analyst's Office, in order to enable the Legislature to determine whether the use tax exemption and the cultivation tax exemption provided by the bill are meeting, failing to meet, or exceeding a specified goal and objective, to collect certain data regarding the tax exemptions from specified entities, and to submit a report containing the data to the Legislature and the Governor annually each year that the tax exemptions are in effect. (7) This bill would provide that the provisions of the act are severable. (8) This bill would incorporate additional changes to Section 26001 of the Business and Professions Code proposed by SB 185 to be operative only if this bill and SB 185 are enacted and this bill is enacted last. (9) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (10) The Control, Regulate and Tax Adult Use of Marijuana Act, an initiative measure, authorizes the Legislature to amend the act to further the purposes and intent of the act with a 23 vote of the membership of both houses of the Legislature, except as provided. This bill would declare that its provisions further specified purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.