Could These CA Cannabis Senate Bills Affect Your Business?

This entry was posted on Friday, July 9th, 2021 and is filed under Cannabis Law.

KVK recently published a blog post highlighting select cannabis-related bills that passed the California Assembly in June.  This post presents a similar exploration of California Senate bills, each of which is currently being considered in the Assembly.  The summaries below are based on information provided by California Legislative Information.

SB-311: Compassionate Access to Medical Cannabis Act or Ryan’s Law

Introduced by Senator Hueso, SB-311 would generally bar certain healthcare facilities from prohibiting or interfering with a terminally ill patient’s in-facility use of medicinal cannabis. Patients would have to provide the healthcare facility with a copy of their medical marijuana card or a written physician’s recommendation for medical marijuana use. Healthcare facilities would be empowered to reasonably restrict how patients store and use medicinal cannabis, to ensure others’ personal safety, state law compliance, and safe facility operations.

The department licensing a healthcare facility would not be able to enforce these provisions, and compliance would not be a condition for obtaining, retaining, or renewing a license.  In fact, if a regulatory agency, the U.S. Department of Justice (DOJ), or the federal Centers for Medicare and Medicaid Services (CMS) takes certain action (e.g. initiating an enforcement action against a healthcare facility related to the facility’s compliance with a state-regulated medical marijuana program), a facility may suspend compliance until the agency, DOJ, or CMS notifies the healthcare facility that it may resume permitting in-facility medicinal cannabis use.

SB-544: Cannabis Testing

Introduced by Senator Laird, SB-544 would require the Bureau of Cannabis Control (BCC), on or before January 1, 2023, to establish a standardized cannabinoids test method (including standardized operating procedures) to be used by all testing laboratories.

SB-603: Cannabis License Deferral and Waiver Fee Program: Tax Credit

Introduced by Senator Bradford, SB-603 would amend the California Business and Professions Code (BPC) by removing January 1, 2021 as the deadline for state licensing authorities to execute a program providing deferral or waiver for application, licensing, or renewal fees for needs-based applicants and licensees.  Rather, this bill would simply require state licensing authorities to execute the aforementioned fee deferral or waiver upon an appropriation in the annual Budget Act or another statute.

SB-603 would also add sections to the California Revenue and Taxation Code (RTC) establishing a new credit against taxes imposed by the Personal Income Tax Law and Corporation Tax Law.  The credit would equal the amount of state and local cannabis licensing fees paid or incurred by a local equity applicant or licensee not otherwise reimbursed by a grant or other funds.  The credit would be for each taxable year beginning on or after January 1, 2021 and before January 1, 2026.

SB-519: Controlled Substances: Decriminalization of Certain Hallucinogenic Substances 

Introduced by Senator Wiener, SB-519 would decriminalize the possession of the following substances, for personal use and social sharing, by and with persons at least twenty-one (21) years of age: (1) psilocybin, (2) psilocyn, (3) dimethyltryptamine (DMT), (4) ibogaine, (5) mescaline, (6) lysergic acid diethylamide (LSD), (7) ketamine, and (8) 3,4-methylenedioxymethamphetamine (MDMA).  Anyone in possession of these substances on school grounds, or possession by or sharing with persons under twenty-one (21) years of age would incur penalties. SB-519 would also repeal provisions prohibiting the cultivation, transfer, or transportation of any spores or mycelium capable of producing mushrooms or other material containing psilocybin or psilocyn.

Similar to the provision in law regarding cannabidiol, if a change in federal law decriminalizes the substances covered in this bill, or products derived from those substances, this bill would deem a physician, pharmacist, or other healing arts licensee who prescribes, furnishes, or dispenses any of the substances within the scope of their practice to be compliant with state law as well. Further, the California State Department of Public Health (SDPH) would have to convene a working group to research the regulation and use of the substances decriminalized by this bill, and make recommendations accordingly to the state legislature.

Current existing law prohibits the possession of drug paraphernalia. SB-519 would exempt from this prohibition against possessing drug paraphernalia, paraphernalia related to the substances decriminalized by this bill, including items used in testing and analyzing controlled substances.

Notably, SB-519 specifically excludes peyote, and peyote derivatives, from the list of substances to be decriminalized because of the plant’s nearly endangered status and special significance in Native American spirituality. Moreover, SB-519 intends to preserve continued Native American use and possession of peyote under federal law.

Have questions on how to prepare for these new bills? Email KVK.

By Patrick Babajanian, July 9, 2021