Yes. That applies to a controlled substance. The sticking point is that under California state law, medical marijuana is no longer a controlled substance but a legal product. Much like Viocdin is a controlled substance if Joe Schome sells it to me but is not if I have a prescription and go to Walgreens and get it.
Under that law a Walgreens within 1,000 feet of a school would not be doing anything illegal.
Under Federal law, a dispensary near a school is illegal. But under Federal law a dispensary not near a school is illegal. Under the law you quoted that would just mean that the Feds could opt for harsher penalties against the dispensary owner if they were closer to a school. Regardless, they could arrest them either way.
That is a lot of gray areas that needs to be settled.