05.01 Assembly Bill 1356 City of Orange
. City Manager's Office
emo �
To: Rick Otto, City Manager
From: Aaron Schulze, Senior Administrative Analyst ��
Date: May 7, 2019
Re: Assembly Bi111356
Assembly Bill 1356 (AB 1356) was introduced by Assembly Member Ting on February 22,
2019. The bill as currently written would apply to local jurisdictions where at least 50°Io of the
electorate voted in favor of Proposition 64, The Control, Regulate and Tax Adult Use of
Marijuana Act of 2016 (AUMA). As more than 50% of the electorate of the city of Orange voted
for AUMA, the bill would apply to our city. AB 1356 requires local jurisdictions to issue local
licenses authorizing retail cannabis commercial activity within the jurisdiction. The minimum
number of licenses required by the bill is 25°Io of the existing alcohol licenses or one license per
10,000 people in the jurisdiction, whichever is lower. The law does allow a local jurisdiction to
establish a lower amount of cannabis licenses by writing an ordinance and submitting it to a vote
of the electorate. AB 1356 is an active bill that is currently in the Appropriations Committee.
Attachments:
1. Bill Analysis �
2. Sample opposition letter
3. Assembly Bill 1356—full text
� 5I►y11°�
IT�M: � ' I DATE OF MEETING: - -
AB 1356
Page 1
Date of Hearing: May 8, 2019
� ASSIIVIBLY COMMITTEE ON APPROPRIATTONS
Lorena Gonzalez, Chair
AB 1356 (Ting) —As Axnended Apr� 30, 2019
Poficy Comtmttee: Business and Professions Vote: 12 -7
Urgency: No . State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This b�71 requires jurisdictions in whicli more than 50%of the electorate voted to approve the
legalization of adult-use cannabis to issue a minimum number of local licenses to authorize reta�
cam�abis commercial activity. The bi71 allows a jurisdiction to l'unnrt elig�bility for licenses to only
medicinal ficensees. It also:
1) Establishes a minimum of one reta� license issued for every four liquor licenses, unless that
ratio would result in m�re than one reta� ficense for every 10,000 people, in which case the
minimum is one reta�l ficense for every 10,000 people.
2) Allows a local government to issue a lower number of ficenses if an ordinance in�plementing
a lower number is submrtted to and approved by voters.
3) Provides for exceptions to the requirement to issue licenses if the electorate has, subsequent
to Proposition 64, rejected an ordinance authorizing reta�l carn�abis activity or approved a
prolubition on reta� cannabis activity.
FISCAL EFFECT:
Unknown, significant costs, potentially in the rn�7lions of dollars annually to the Bureau of
Carn�abis Control within the Department of Conswmer A$'airs to license an unknown number of
additional cannabis reta�ers (Cannabis Coxrtrol Fund). Fees fior ficensed retailers range from
$2,500 to $57,000.
COMMENTS:
1) Purpose. This b�l seeks to ensure a robust legal market for cannabis in local jurisdictions in
which a majority of voters supported carn�abis legaliration.
2) Background. Cannabis, though �legal under federal law, has been legal under state ]�w
since the passage of Proposition 215 in 1996. A package of three bi71s enacted together in
2015 created a comprehensive state regulatory structure for medical cannabis regulation.
With the passage of Proposition 64 of 2016, adutt-use carn�abis also became legal and
regulatary structures fur adult-use and medicinal cannabis were subsequently harmonized. As
of January 9, 2019, the "collective" cooperative model for medical marijuana dispensaries, as
authorized under Proposrtion 215,was fi�rmally sunset, and any dispensary that was in place
under the Compassionate Use Act was required to convert to the new regulatory system.
Current ]aw, both legislative statute and language passed through Proposition 64, allows a
locality to completely ban reta� cannabis its jurisdictions. Thus, there is currently no clear
AB 1356
Page 2
way to expand statewide access to medicinal car�nabis without first obtaining local
authorization for a j�isdiction without reta�.
3) Support. United Domestic Workers of America, UDW/AFSCME Local 3930 is the sponsor
of this bill. It is also supported by cannabis interests. Accord'mg to the UDW, the passage of
Proposilion 64 exempfified California's strong support f+or a legal carn�abis market, one that
would promote ta.x revenue to sta.te and local governments and reduce black market activity.
However, UDW maintains, some local goveriunents ha.ve either refused to adopt proper
licensing frameworks to create such markets or have established sirict licensing structures
that restrict the legal market from cornpeting wrth its �legal competition. Accord'mg to the
Secretary of State, 393 out of 538 jurisdictions voted 'm favor ofProposition 64,yet over
two-thirds of the state prolvbrt even a single cannabis reta�er.
4) OpposiNon. The League of California Cities (League) and the California State Association
of Counties opposes the b�71. The League states:
This b�71 fundamentally erodes the local regulatory authority of cities and counties, which
is explicitly provided for in Proposition 64. In seeking to remove a local governmerrt's
ab�ity to either approve reta� cam�abis shops at a different concentration level or prohibit
them within rts jurisdiction, tivs b�l completely subverts the intent of the voters who
approved Proposfion 64. In essence, attempting to require cities to establish a 1 to 4
ratio of local reta� carn�abis licenses to fiquor licenses removes the ab�7ity for locals to
decide what is appropriate for their comnn�nities. By obligating such a ratio, tivs b�l
proposes an arbitrary land use standard for individual crties and counties based on the
resuultss of a statewide ballot measure. iJltimately, it is questionable at best as to whether,
under Proposition 64, the state even has the tm�7ateral authority to unpose such a
requirement without voter approvaL
Analysis Prepared by: Lisa Murawski /APPR /(916) 319-2081
*�*.CITX L�TTERHEAD***'
Da:te: �
Tt�e Honorable Lorena Gonzalez
' Chair, Assembly Committee on Appropriations
State Capitol Building, Room 5050
Sacramento, CA 95814
RE: AB 1356 (Tinc�) Cannabis: Local Jurisdiction: Retail Commercial Cannabis ActivitX
Notice of OPPOSITION (as Amended 4/30/19)
Dear Assemblymember Gonzalez:
The City/T.own of -: ��� respectfully opposes AB 1356 (Ting). Under this bill, if more tMan 50
percent of the voters of a local jurisdiction voted in favor of Proposition 64, these local jurisdictions would
be required to issue a minimum number of licenses authorizing retail cannabis activity within that
jurisdiction. More specifically, the bill requires these cities to issue a minimum of one retail cannabis
license for every four liquor licenses, or one retail cannabis license for every 10,000 residents.
�xisting law, under both the Medicinal and Adult-Use Cannabis Regulation and Safety Act(MAUCRSA)
and Proposition 64, states that local jurisdictions have the ability to adopt and enforce local ordinances to
regulate cannabis businesses. By removing local governments' ability to regulate brick and mortar retail
cannabis shops, AB 1356 undermines the very foundation of local control and thereby negates the
primary purpose of California's established dual licensing structure.
With regard to the measure's mandated 1-to-4 ratio, there is simply no nexus between a city's regulation
of citizens' access to retail commercial cannabis and the number of liquor establishments within a
community. By requiring such a ratio, AB 1356 proposes an arbitrary land use standard for individual
cities and counties based on the results of a statewide ballot measure.
In seeking to eliminate locals' authority to ban or regulate retail commercial cannabis businesses, AR
1356 would ultimately strip cities and counties of the ability to decide what is appropriate for their
communities—a premise that directly contravenes the framework understood by the voters when
approving Proposition 64.
For these reasons, the C„ity/Town of opposes AB 1356.
Sincerely,
NAME
TITLE
CITX/TOWN of
. .
cc. Your Senator&Assernbly Member : s
AMENDED IN ASSEMBLY APRIL 30, 2019
AMENDED IN ASSEMBLY APRIL 4, 2019
CALIFORNIA LEGISLATURE-2019-20 REGULAR SESSION
ASSEMBLY BILL No. 1356
Introduced by Assembly Member Ting '
February 22, 2019
An act to amend Section 26200 of, and to add Section 26200.1 to,
the Business and Professions Code, relating to cannabis.
LEGISLATIVE COUNSEL'S DIGEST
AB 1356, as amended, Ting. Cannabis: local jurisdictions: retail
commercial cannabis activity. � �
The Control, Regulate and Tax Adult Use of Marijuana Act of 2016
(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,
including retail commercial cannabis activity. MAUCRSA gives the
Bureau of Cannabis Control in the Department of Consumer Affairs
the power, duty, purpose, responsibility, and jurisdiction to regulate
commercial cannabis activity in the state as provided by the act.
MAUCRSA does not supersede or limit the authority of a local
jurisdiction to adopt and enforce local ordinances to regulate commercial
cannabis businesses within that local jurisdiction.
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AB 1356 —2—
This bill, if more than 50% of the electorate of a local jurisdiction
voted in favor of AUMA, would require a local jurisdiction to issue a
minimum number of local licenses authorizin a '` -� ��a=����'
g
spec�ed retail cannabis commercial activity within that jurisdiction
that would be permitted by a retailer license issued under MAUCRSA.
The bill would require the minimum number of those local licenses
required to be issued in that jurisdiction to be 25% of the number of
currently active on-sale general licerises for alcoholic beverage sales
in that jurisdiction, as specified, unless the minimum number would
result in a ratio greater than one local license for retail cannabis
commercial activity for every 10,000 residents of the local jurisdiction,
in which case the bill would require the� minimum number to
be determined by dividing the number of residents in the local
jurisdiction by 10,000 and rounding down to the nearest whole number.
The bill would authorize a local jurisdiction to impose a fee on licensees
to cover the regulatory costs of issuing those local licenses. The bill
would exempt from these provisions a Zocal jurisdiction that, on o�
befo�e January 1, 2017, and until January 1, 2020, submitted to the
electo�ate of the local ju�isdiction a spec�ed local ordinance o�
�esolution relating to retail cannabis comme�cial activity that�eceived
a spec�ed vote of the electo�ate.
T�iis bill would allow any local jurisdiction subject to the requirements
of this bill that wants to establish a lower amount of these local licenses
to submit an ordinance or other law,�that clearly specifies the level of
participation in the retail commercial cannabis market it would allow,
to the electorate of that local jurisdiction at the next regularly scheduled
local election following the operative date of this bill. The bill would
provide that the local ordinance or other local law becomes effective if
approved by more than 50% of its electorate. The bill would require
the local jurisdiction to issue those licenses as otherwise required by
this bill within a specified period of time if a local jurisdiction subject
to the requirements of this bill does not submit a local ordinance or
other local law regarding the lower amount of licenses to the electorate,
or that local ordinance or other local law fails to receive more than 50%
of the approval of the electorate voting on the issue. The bill would
provide that these p�ovisions are prohibited f�om being construed to
�equi�e a local ju�isdiction to autho�ize adult-use �etail cannabis
commercial activity. By imposing additional requirements on local
jurisdictions the bill would impose a state-mandated local program.
97
—3— AB 1356
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.
AUMA authorizes the Legislature to amend its provisions with a 2/
vote of both houses to further its purposes and intent.
This bill would declare that its provisions further the purposes and
intent of AUMA.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of Califo�nia do enact as follows:
1 SECTION 1. Section 26200 of the Business and Professions
2 Code is amended to read:
3 26200. (a) (1) This division shall not be interpreted to
4 supersede or limit the authority of a local jurisdiction to adopt and
5 enforce local ordinances to regulate businesses licensed under this
6 division, including, but not limited to, local zoning and land use
7 requirements, business license requirements, and requirements
8 related to reducing exposure to secondhand smoke, or to completely
9 prohibit the establishment or operation of one or more types of
10 businesses licensed under this division within the local jurisdiction,
11 except as provided in Section 26200.1.
12 (2) This division shall not be interpreted to supersede or limit
13 existing local authority for law enforcement activity, enforcement
14 of local zoning requirements or local ordinances, or enforcement
15 of local license, permit, or other authorization requirements.
16 (b) This division shall not be interpreted to require a licensing
17 authority to undertake local law enforcement responsibilities,
18 enforce local zoning requirements, or enforce local licensing,
19 permitting, or other authorization requirements.
20 (c) A local jurisdiction shall notify the bureau upon revocation
21 of any local license, permit, or authorization for a licensee to
22 engage in commercial cannabis activity within the local
23 jurisdiction.Within 10 days of notification,the bureau shall inform
24 the relevant licensing authorities. Within 60 days of being so
25 informed by the bureau, the relevant licensing authorities shall
26 begin the process to determine whether a license issued to the
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AB 1356 —4—
1 licensee should be suspended or revoked pursuant to Chapter 3
2 (commencing with Section 26030).
3 (d) For .facilities issued a state license that are located within
4 the incorporated area of a city, the city shall have full power and
5 authority to enforce this division and the regulations promulgated
6 by the bureau or any licensing authority, if delegated by the state.
7 Notwithstanding Sections 101375, 101400, and 101405 of the
8 Health and Safety Code or any contract entered into pursuant
9 thereto, or any other law, the city shall assume complete
10 responsibility for any regulatory function pursuant to this division
11 within the city limits that would otherwise be performed by the
12 county or any county officer or employee, including a county
13 health officer, without liability, cost, or expense to the county.
14 (e) (1) This division does not prohibit the issuance of a state
15 temporary event license to a licensee authorizing onsite cannabis
, 16 sales to, and consumption by, persons 21 years of age or older at
17 a county fair event, district agricultural association event, or at
18 another venue expressly approved by a local jurisdiction for the
19 purpose of holding temporary events of this nature, provided that
20 the activities, at a minimum, comply with all the following:
21 (A) The requirements of paragraphs (1) to (3), inclusive, of
22 subdivision (g).
23 (B) All participants who are engaged in the onsite retail sale of
24 cannabis or cannabis products at the event are licensed under this
25 division to engage in that activity.
26 (C) The activities are otherwise consistent with regulations
27 promulgated and adopted by the bureau governing state temporary
28 event licenses.
29 (D) A state temporary event license shall only be issued in local
30 jurisdictions that authorize such events.
31 (E) A licensee who submits an application for a state temporary
32 event license shall, 60 days before the event, provide to the bureau
33 a list of all licensees that will be providing onsite sales of cannabis
34 or cannabis products at the event. If any changes occur in that list,
35 the licensee shall provide the bureau with a final updated list to
36 reflect those changes.A person shall not engage in the onsite retail
37 sale of cannabis or cannabis products, or in any way participate in
38 the event, who is not included in the list, including any updates,
39 provided to the bureau.
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—5— AB 1356
1 (2) The bureau may impose a civil penalty on any person who
2 violates this subdivision, or any regulations adopted by the bureau
3 governing state temporary event licenses, in an amount up to three
� 4 times the amount of the license fee for each violation, consistent
5 with Sections 26018 and 26038.
6 (3) The bureau may require the event and all participants to
7 cease operations without delay if in the opinion of the bureau or
8 local law enforcement it is necessary to protect the immediate
9 public health and safety of the people of the state. The bureau may
10 also require the event organizer to immediately expel from the
11 event any participant selling cannabis or cannabis products without
12 a license from the bureau that authorizes the participant to sell
13 cannabis or eannabis products. If the unlicensed participant does
14 not leave the event, the bureau may require the event and all.
15 participants to cease operations immediately. ,
16 (4) The order by the bureau for the event to cease operations
17 pursuant to paragraph (3) does not entitle the event organizer or
18 any participant in the event to a hearing or an appeal of the
19 decision. Chapter 3 (commencing with Section 490) of Division
20 1.5 and Chapter 4 (commencing with Section� 26040) of this
21 division shall not apply to the order by the bureau for the event to
22 cease operations pursuant to paragraph (3).
23 (5) The smoking of cannabis or cannabis products at temporary
24 events authorized pursuant to this subdivision is prohibited in
25 locations where smoking is prohibited.For purposes of this section,
26 "smoking" has the same meaning as defined in subdivision (c) of
27 Section 22950.5.
28 (� This division, or any regulations promulgated thereunder,
29 shall not be deemed to limit the authority or remedies of a city,
30 county, or city and county under any provision of law, including,
31 but not limited to, Section 7 of Article XI of the California.
32 Constitution. .
33 (g) Notwithstanding paragraph(1) of subdivision(a)of Section
34 11362.3 of the Health and Safety Code, a local jurisdiction may
35 allow for the smoking, vaporizing, and ingesting of cannabis or
36 cannabis products on the premises of a retailer or microbusiness
37 licensed under this division if all of the following are met:
38 (1) Access to the area where cannabis consumption is allowed
39 is restricted to persons 21 years of age or older.
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AB 1356 —6—
1 (2) Cannabis consumption is not visible from any public place
2 or nonage-restricted area.
3 (3) Sale or consumption of alcohol or tobacco is not allowed
4 on the premises.
5 (h) This division shall not be interpreted to supersede Section
6 6404.5 of the Labor Code.
7 SEC. 2. Section 26200.1 is added to the Business and
8 Professions Code, to read:
9 26200.1. (a) (1) �Except as p�ovided in subdivision (d),
10 a local jurisdiction shall comply with the requirements of this
11 subdivision if more than 50 percent of the electorate of that local
12 jurisdiction, as determined using election data from the Secretary
13 of State, voted in favor of the Control, Regulate and Tax Adult
14 Use of Marijuana Act of 2016, an initiative measure enacted as
15 Proposition 64 at the November 8,2016, statewide general election.
16 (2) A local jurisdiction described in paragraph (1) shall issue a
17 minimum number of local licenses that authoriz� ��'--'` --�� --���='
18 medicinal retail cannabis
19 commercial� activity, o� a combination of inedicinal retail
20 cannabis commercial activity and adult-use retail cannabis
21 commercial activity, within the jurisdiction that would be permitted
22 by a retailer license described in Section 26070, as determined by
23 paragraph (3). A local jurisdiction may impose a fee on licensees
24 to cover the regulatory costs of issuing those local licenses.
25 (3) (A) Except as provided in subparagraph (C), the minimum
26 number of local licenses for retail cannabis commercial activity
27 that a local jurisdiction is required to issue pursuant to paragraph
28 (2) is 25 percent of the number of on-sale general license types
29 for alcoholic beverage sales that are currently active in that
30 jurisdiction, as determined pursuant to subparagraph (B).
31 (B) (i) (I) If the local jurisdiction is a city, the number of
32 on-sale general licenses for alcoholic beverages shall be determined
33 by adding all of the currently active licenses issued in the
34 jurisdiction that are of a license type listed in subclause (II). If the
35 local jurisdiction is a county,the number of on-sale general licenses
36 for alcoholic beverages shall be determined by adding all of the
37 currently active licenses issued in the unincorporated regions of
38 the county that are of a license type listed in subclause (II).
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—7— AB 1356
1 , (II) For purposes of subclause(I), the following on-sale general
2 license types shall be counted: Types 47, 47D, 48, 48D, 57, 57D,
3 68, 70, 71, 71D, 75,-�5� 75D, 78, and 78D.
4 (ii) The number determined in clause (i) shall be divided by
5 four and rounded up to the nearest whole number using generally
6 accepted mathematical rounding practices.
7 (iii) If the number of local licenses for retail commercial
8 cannabis determined in clause (ii) would result in a ratio equal to,
9 or fewer than, one local license for retail cannabis commercial
10 activity for every 10,000 residents of the local jurisdiction, the
11 number determined in clause (ii) shall be the minimum number of
12 local licenses the jurisdiction is required to issue pursuant to
13 paragraph (2).
14 (C) Notwithstanding subparagraphs (A) and(B), if the number
15 of local licenses for retail commercial cannabis determined in
16 clause (ii) of subparagraph (B)would result in a ratio greater than
17 Qne local license for retail cannabis commercial activity for every
18 10,000 residents of the local jurisdiction,the minimum number of
19 local licenses that the local jurisdiction is required to issue pursuant
20 to paragraph (2) shall be determined by dividing the number of
21 residents in the local jurisdiction by 10,000 and rounding down to
22 the nearest whole number.
23 (b) Notwithstanding subdivision (a), a local jurisdiction
24 described in paragraph(1) of subdivision(a)that wants to establish
25 a lower amount of local licenses for retail cannabis commercial
26 activity than required by subdivision (a) shall do all of the
27 following:
28 (1) Create a local ordinance or other local law that clearly
29 specifies the level of participation in the retail commercial cannabis
30 market the local jurisdiction will allow.
31 (2) Submit that ordinance or other local law to the electorate of
32 that local jurisdiction at the next regularly scheduled local election
33 following the operative date of this section.
34 (3) If the ordinance or other local law is approved by more than
35 50 percent of the electorate of that local jurisdiction voting on the
36 issue, then the new ordinance or other local law shall become
37 effective in that local jurisdiction.
38 (c) If a local jurisdiction described in paragraph (1) of
39 subdivision (a) does not submit a local ordinance or other local
40 law to the electorate as described in subdivision (b), or that local
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AB 1356 —8—
1 ordinance or other local law fails to receive more than 50 percent
2 of the approval of the electorate of that local jurisdiction voting
3 on the issue as described in subdivision (b), then the local
4 jurisdiction shall have 120 days after the next regularly scheduled
5 local election following the operative date of this section to issue
6 local licenses in compliance with subdivision (a). �
7 (d) A local jurisdiction is exempt from this section if eithe� of
8 the following applies:
9 (1) On o�afte�JanuaYy 1, 2017, and until.Ianua�y 1, 2020, the
10 local jurisdiction submitted to the electo�ate of the local
11 jurisdiction a local ordinance o� �esolution that autho�izes �etail
12 cannabis comme�cial activity, and a majority of the electorate
13 voted not to approve the local o�dinance or�esolution.
14 (2) On or after January 1, 2017, and until.Ianuary 1, 2020, the
15 local jurisdiction submitted to the electoYate of the local
16 jurisdiction a Zocal ordinance or resolution that prohibits retail
17 cannabis commercial activity, and a majority of the electorate
18 voted to approve the local ordinance o� resolution.
19 �
20 (e) For purposes of this section, all of the following shall apply:
21 (1) "Electorate of a county" means the electorate of the
22 unincorporated area of the county.
23 (2) "Local jurisdiction" means a city, county, or a city and a
24 county.
25 (3) "Local license" means any license, permit, or other
26 authorization from the local jurisdiction.
27 (� This section shall not be const�ued to require a local
28 jurisdiction to authorize adult-use retail cannabis commercial
29 activity.
30 SEC. 3. No reimbursement is required by this act pursuant to
31 Section 6 ofArticle XIIIB of the California Constitution because
32 a local agency or school district has the authority to levy service
33 charges, fees, or assessments sufficient to pay for the program or
34 level of service mandated by this act,within the meaning of Section
35 17556 of the Government Code.
36 SEC. 4. The Legislature finds and declares that this act furthers
37 the purposes and intent of the Control, Regulate and Tax Adult
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1 Use of Marijuana Act as stated in subdivisions (u) and (x) of
2 Section 3 of that act.
O
97