Welf. & Inst. Code, § 4314

(a) The Director of State Hospitals may set aside and designate any space on the grounds of any of the institutions under the jurisdiction of the department that is not needed for other authorized purposes, to enable the institution to establish and maintain therein a store or canteen for the sale to or for the benefit of patients of the institution of candies, sundries, and other articles. The stores shall be conducted subject to the rules and regulations of the department and the rental, utility, and service charges shall be fixed as will reimburse the institutions for the cost thereof. The stores when conducted under the direction of a hospital administrator shall be operated on a nonprofit basis but any profits derived shall be deposited in the benefit fund of each institution as set forth in Section 4125.

(b) Before any store is authorized or established, the Director of State Hospitals shall first determine that the facilities are not being furnished adequately by private enterprise in the community where it is proposed to locate the store, and may hold public hearings or cause surveys to be made, to determine the same.

(c) The Director of State Hospitals may rent space to private individuals, for the maintenance of a store or canteen at any of these institutions upon any terms and subject to any regulations that are approved by the Department of General Services, in accordance with the provisions of Section 13109 of the Government Code. The terms imposed shall provide that the rental, utility, and service charges to be paid shall be fixed so as to reimburse the institution for the cost thereof and any additional charges required to be paid shall be deposited in the benefit fund of the institution as set forth in Section 4125.