California BCC Amends Regulations Regarding Owner Conviction History
By Christina Sava, Kelsey Middleton
Nov 24, 2020
On October 16, the California Bureau of Cannabis Control (BCC) issued a notice of proposed rulemaking affecting sections of the BCC regulations related to the assessment of an applicant or licensee’s criminal convictions. The proposed amendments to the regulations are in response to the passage of AB 2138, a bill that aims to remove barriers to obtaining professional license and employment for Californians with past criminal convictions or disciplinary actions, provided they can demonstrate rehabilitation. The provisions of AB 2138 became operative on July 1, 2020. AB 2138 amended the license application process for the BCC and other bureaus within the Department of Consumer Affairs (DCA).
Notably, the amendments prohibit licensing agencies from requiring applicants for licensure to disclose information or documentation regarding the applicant’s criminal history, although applicants may disclose convictions voluntarily. The BCC may still conduct background checks, but limits the lookback period to the preceding seven years unless the crime falls into certain categories. If a bureau denies an application based on criminal history, it must provide the applicant with notice of the denial that includes a reason for the denial, as well as instructions on how to appeal the decision and the process for receiving a copy of the applicant’s conviction history.
In addition to clarifying procedure around criminal convictions, the BCC is authorized to deny, suspend, or revoke a license because of professional misconduct or discipline taken by another licensing board, non-BCC bureau, or jurisdiction within the last seven years. AB 2138 amends Business and Professions Code (BPC) Section 481 to include more specific criteria by which licensing agencies within the DCA may determine whether a crime or professional misconduct is substantially related to the qualifications, functions, or duties of the profession (these criteria are described below). Persons in authoritative roles such as attorneys general, administrative law judges, respondents, and their legal counsel are also advised that they must use the listed criteria to determine whether the crime, act, or professional misconduct is substantially related to the California cannabis industry.
BCC has not scheduled a public hearing on the proposed action but it will hold a hearing upon written request by any interested person received at least 15 days before the close of the comment period. Any interested person may submit written comments regarding the proposed rule changes by mail or email before the comment period closes at 5:00 PM on December 1, 2020.
The BCC Text of Proposed Regulations effectuating AB 2138 provides the following key changes:
Section 5002. Annual License Application Requirements
BCC will no longer mandate the submission of information about an owner’s convictions. Instead, owners may voluntarily submit information regarding any past convictions alongside any mitigating information the BCC can use to determine whether a conviction is substantially related to the qualifications to operate a cannabis business, or as evidence of rehabilitation.
Mitigating information is that which an owner would like BCC to consider that demonstrates the owner’s fitness for licensure. BCC intends to expand mitigating information to include proof of a dismissal pursuant to applicable sections of the California Penal Code, in addition to a certificate of rehabilitation and detailed letters of reference from employers, instructors, or professional counselors.
Section 5017. Substantially Related Offenses and Criteria for Rehabilitation
Proposed amendments to Section 5017 add professional misconduct to the offenses which BCC may consider when denying licensure, and outline the criteria by which BCC will evaluate whether an applicant or licensee has been convicted of a criminal offense, act, or professional misconduct that is substantially related to the qualifications, functions, or duties of the cannabis business for which the application is made. The criteria to be considered are the nature and gravity of the offense, the number of years that have elapsed since the date of the offense, and the nature and duties of the license the applicant seeks or the licensee holds.
Other notable changes for the BCC include clarifying that conviction means a judgment following a plea or verdict of guilty or a plea of nolo contendere or finding of guilt, and considering convictions when potentially suspending or revoking a license, not just when denying a new license.
The existing criteria for demonstrating and evaluating rehabilitation remain unchanged. The criteria to be considered are the nature and gravity of the act, professional misconduct, or offense; whether a felony conviction is based on a cannabis penal code provision which is no longer considered a felony offense; the applicant’s criminal record as a whole; subsequent convictions or misconduct; the time that has elapsed; and the extent to which an applicant has complied with terms of parole, probation, restitution, or any other sanctions lawfully imposed against the applicant.
Section 5021. Denial of License
If a license is denied due to an owner’s conviction history, BCC will notify the applicant of the process for requesting a copy of the owner’s conviction history and provide instructions on how to question the accuracy or completeness of the record in accordance with applicable sections of the California Penal Code.
Section 5600. Cannabis Event Organizer License
Owners and applicants for Cannabis Event Organizer licenses will no longer be required to submit a detailed description of owner convictions. Like annual license applicants and licensees, applicants for cannabis event organizer applications or licenses may voluntarily submit information regarding any past convictions alongside any mitigating information regarding the owner’s criminal history, to assist the BCC in determining whether the conviction is substantially related to the cannabis event organizer license, or as evidence of rehabilitation. BCC adds that an owner’s decision not to disclose any criminal history or mitigating information will not be a factor in the decision to grant or deny a license. Additionally, BCC will accept proof of a dismissal pursuant to applicable sections of the California Penal Code as mitigating information.
AB 2138 is an important step forward for Californians with criminal convictions. In the cannabis context, the amendments to the Bureau’s regulations help clarify the criteria by which the Bureau will evaluate relatedness and rehabilitation, and simplify the owner application submittal process by eliminating the requirement to disclose convictions upfront. The seven-year look-back limitation is likely to benefit applicants who may have convictions related to the tumultuous early days of medical cannabis in California.
If you need help understanding how these amendments apply to you or in submitting evidence of rehabilitation to any of California’s cannabis licensing agencies, our office is here to help! Contact us today.