HCSHB2704--CANNABISFREEDOMACT SPONSOR: Hicks COMMITTEEACTION:Voted"DoPasswithHCS"bytheStanding CommitteeonPublicSafetybyavoteof5to4. ThefollowingisasummaryoftheHouseCommitteeSubstituteforHB 2704. Thisbillestablishesthe"CannabisFreedomAct". Undertheprovisionsofthisbill,taxpayersareauthorizedto conductbusinessunderthemedicalcannabisprovisionsofthe ConstitutionofMissouriorundertheprovisionsofthisbillmay deducttheamountthatwouldhavebeendeductedfromthe computationofthetaxpayer'sfederaltaxableincomeifsucha deductionwerenotdisallowedunder26U.S.C.Section280E,asin effectonJanuary1,2022,becauseofthestatusofmarijuanaasa controlledsubstanceunderfederallaw(Section143.121,RSMo). Nostateagencyshalldisclosetothefederalgovernment,any federalgovernmentemployee,oranyunauthorizedthirdparty,the statewidelistoranyindividualinformationofpersonswhohave appliedfororobtainedaqualifyingpatientidentification card,a qualifyingpatientcultivationidentification card,oraprimary caregiveridentification card,asthosecardsaredescribedin ArticleXIV,Section1oftheConstitutionofMissourirelatingto therighttoaccessmedicalmarijuana(Section191.255). Thisbillremovesmarijuanaandtetrahydrocannabinols (THC),as defined,fromthelistofcontrolledsubstancesandremoves marijuanafromtheoffensesofpossession,delivery,distribution, manufacture,andtraffickingofacontrolledsubstance(Sections 195.006,195.017,579.015,579.020,579.030,579.055,579.065,and 579.068). Currently,allowners,officers,managers,contractors,employees, andothersupportstaffoflicensedorcertifiedmedicalmarijuana facilitiesmustsubmitfingerprintstotheStateHighwayPatrolfor stateandfederalcriminalbackgroundchecks.Additionally,the DepartmentofHealthandSeniorServicesmayrequirefingerprint submissionsofowners,officers,managers,contractors,employees, andothersupportstaffforlicensureauthorizingthatpersonto ownorworkatamedicalmarijuanafacility. Thisbilladdsthat theCannabisEnforcementAuthoritywillrequireallofficers, managers,contractors,employees,andothersupportstaffof marijuanabusiness,andtheownersofthebusinesses,tobesubject tosuchfingerprinting (Section195.815). Thesesectionsestablishthe"CannabisFreedomAct".TheCannabis EnforcementAuthorityshallpromulgateallnecessaryrulesand regulationsfortheadministration ofthesesections. The provisionsofthesesectionsshallnotrestricttherightsof employerstomaintainadrug-andalcohol-freeworkplaceorrequire anyemployertoalloworaccommodatetheuseofmarijuana. These provisionsshallnotallowtheoperationofmotorvehicleswhile impairedbymarijuana,orallowindividualsundertheageof21to purchasemarijuana.Theseprovisionsdonotrestricttherightsof employers,schools,carefacilities,orcorrectionalfacilitiesto prohibitorregulateconductotherwiseallowedunderthese provisions. Theseprovisionslegalizethepossessionandconsumptionof marijuanaforpersonaluse,allowforanyone21yearsofageor oldertocultivateandpossessnomorethansixmature,flowering marijuanaplantsfornoncommercialuse,andallowsforthesaleof marijuanaproductstoconsumers21yearsofageorolder.Theuse orpossessionofmarijuanashallnotimpedeaperson'slegalright topossessafirearm. Itshallbelawfulforaperson21yearsof ageoroldertotransferorgiftmarijuanatoanotheradultorfor aparentorguardiantotransferorgiftmarijuanatoaperson under21yearsofageifthatpersonhasarecommendation bya physician. Marijuanafarmers,manufacturers, processors,anddistributors shallnotbesubjecttospecialzoningrequirementsorlicensing fees. Assetorcivilforfeitureshallnolongerbeusedinthestatein associationwithlegalmarijuanacultivation,use,sale,or possession. Ataxshallbeleviedonthesaleofmarijuanaandmarijuana productsataratenottoexceed4.225%.Alltaxrevenues collectedshallbedepositedintothe"CannabisFreedomFund",as establishedunderthebill,andusedtopayforcostsassociated withtheimplementation, administration, andenforcementofthe provisionsofthesesections. ExcessmoneysremainingintheFund shallbedividedinproportionsspecifiedinthebillbetween deputysheriffs,PeaceOfficerStandardsandTraining(POST) Commission,andvolunteerfireprotectionassociations,aswellas toprovidehelpforsmallbusinessloansandtotheDepartmentof HealthandSeniorServicestoestablishandadministerawork trainingprogram. Theseprovisionsshallnotprohibitanystateor localsalestaxes.Anysaleofmarijuanaformedicaluseshallnot besubjecttothetaxestablishedherein. Theseprovisionsestablishthe"CannabisEnforcementAuthority", undertheDepartmentofHealthandSeniorServices. TheAuthority shallhaveoversightandauditingresponsibilities andshall implementaninventorytrackingsystem.TheAuthorityshall requirebusinessrecordsbekeptforalltransactions. Inventory shallbetrackedandupdatedaftereachindividualsaleand reportedtotheAuthority. TheAuthorityshallrequireaseed-to- saletrackingsystemthattracksmarijuanafromeithertheseedor immatureplantstageuntilthemarijuanaormarijuanaproductis soldtoaconsumer,asdescribedinthebill. Theseprovisionsestablishthemarijuanabusinesslicense,which includesannuallicensesforthefollowingcategories:marijuana commercialgrowers,marijuanaprocessors,andmarijuanaretailers. Grower,processor,andretailer,prospectivelicenseesmustsubmit acomprehensiveapplicationforanannuallicense. TheAuthorityshalldevelopawebsiteformarijuanabusiness applications. Applicationsmustmeetgeneralrequirementsas providedinthebillandallapplicantsshallundergoabackground check.TheAuthorityshallreview,approveorreject,andmail suchapprovalorrejectionwithin90daysofreceiptofthe application. Alicensedcommercialgrowershallsellonlyatthewholesalelevel toalicensedretailer,grower,orprocessor. Licensedcommercial growersandprocessorsshallcompleteandsubmitmonthlyyieldand salesreportstotheAuthority,asdescribedinthebill.The Authorityshallhaveoversightandauditingresponsibility to ensureallmarijuanagrownbyalicensedcommercialgroweris accountedforandallmarijuanaprocessorsproducingproductswith marijuanaasanadditiveareincompliancewiththerequirementsof thebill. Inadditiontotheapplicationrequirementsestablishedunderthese provisions,licensedcommercialgrowersandprocessorsshall demonstratethattheyhaveabankaccountandshallprovidegrowth estimates,processingestimates,andpredictedelectricalandwater usagetogroworprocessmarijuana. TheAuthoritymayissuedifferentkindsofprocessorlicensesbased onthelevelofriskposedbythetypeofprocessingbeing conductedaseitheranonhazardousmarijuanaprocessorlicenseora hazardousmarijuanaprocessorlicense. TheAuthorityshall establishstandardsforlicensedprocessorsforthepreparationof ediblemarijuanaproducts. Amarijuanatransporterlicenseshallallowtheholdertotransport marijuanafromaMissouri-licensedmarijuanaretailer,licensed commercialgrowerfacility,orlicensedprocessorfacilitytoa Missouri-licensedmarijuanaretailer,licensedcommercialgrower facility,orlicensedprocessingfacility. Allmarijuanaor marijuanaproductsshallbetransportedinalockedcontainer labeledas"MarijuanaorDerivative". Nobusinessmayposses, sell,ortransfermarijuanawithoutavalidtransporterlicense. A transporterlicenseemaycontractwithmultiplemarijuana businesses. Atransporterlicenseeshallusetheseed-to-sale trackingsystempromulgatedbytheAuthority. TheAuthorityshall issuetransporteragentlicensestoindividualagents,employees, andownersofatransporterlicenseinorderforthatindividualto qualifytotransportmarijuana. Suchagentlicenseshallbe subjecttoanannualfeeof$100andshallbevalidforthreeyears oruntilthetransporterlicenseealertstheAuthoritythatthe agentisnolongeremployedbythelicensee. Thetransportation andinventorytrackingofmarijuanaandmarijuanaproductsshall complywithrequirementsasprovidedforinthebill. Inadditiontofailuretomeettherequirementsestablishedunder thebill,groundsfordenialforatemporaryorannuallicense shallinclude:unlawfulsalesorpurchases,fraudulentacts, falsifiedrecordsormisrepresentation totheAuthority,grossly inaccurateorfraudulentreporting,threateningorharmingany marijuanapatient,caregiver,consumer,medicalpractitioner,or employeeoftheAuthority,useofprohibitedsubstancesfor processinginresidentialareas,andendangeringpublichealthand safety. Ifmarijuanaisdecriminalized onafederallevel,anylicensed marijuanabusinessinthestatemayengageininterstatecommerce, andthestatemayenterintoanyinterstatecompactoragreement relatingtomarijuana(Sections196.3000to196.3048). Nobank,trustcompany,association,orcreditunionshallbe prohibited,penalized,haveanyadverseactiontakenagainstit,or otherwisediscouragedfromprovidingfinancialservicesto facilitieslicensedundertheprovisionsofthisbillorunder ArticleXIV,Section1oftheConstitutionofMissouriortoany serviceprovidertosuchafacilities. Furthermore,banks,trustcompanies,associations,andcredit unionsarepermittedtoreceivethesavingsof,makeloansto, depositthefundsof,andinvestfundsofcustomerswhooperateas afacilitylicensedundertheprovisionsofthisbillorunder ArticleXIV,Section1oftheConstitutionofMissouri. Nosuch institutionactingpursuanttothisbillshallbeliableunder statelawforcontractingwithsuchfacilities(Sections362.105, 369.144,369.326,370.064,and370.070). Anyconviction,remainingsentence,ongoingsupervision,orunpaid court-orderedrestitutionofanypersonincarcerated,onprobation orparole,orotherformofcommunitysupervisionresultingfroma convictionofanonviolentmarijuana-relatedoffenseshallhave suchconviction,remainingsentence,ongoingsupervision,orunpaid court-orderedrestitutionvacatedifthepersonfilesapetitionin thecourtinwhichthepersonwasconvictedoftheoffenseor violation. Thelawfulpossessionoruseofmarijuanashallnot resultinanypunitiveactionwithregardtoprobationorparole status.Noconditionofprobationorparoleshallconsistof restrictingthepossessionoruseofmarijuana,andnorevocation orextensionofprobationorparoleshallbeimposedasa consequenceofthelawfulpossessionoruseofmarijuana. Anypersonwhowasconvictedofanonviolentmarijuana-related offensemaypetitionthecourttohavesuchoffenseexpungedso longastheoffenseorviolationwasprosecutedunderthe jurisdictionofaMissouricourtandallnonviolentmarijuana- relatedoffensesarelistedinthepetitionofexpungement (Sections559.023,557.059,and610.135). Thisbillcontainspenaltyprovisions. Thefollowingisasummaryofthepublictestimonyfromthe committeehearing. Thetestimonywasbasedontheintroduced versionofthebill. PROPONENTS: Supporterssaythatthishasbeencomingforalong time.Thisismeanttolegalizemarijuanainthestate,andthe bodyneedstotalkaboutit.Thisisnotmeanttotakeawayfrom theinitiativepetitionprocess,butwehavemedicalmarijuana becauseofinitiativepetitionandbecauseitwentthatway,itis notsomethingthelegislaturecanfix.Thisincludeslegislation fromothermembersofthebodyfiledoverthelastfouryears.We arenotgoingtohavethislooklikeOklahoma,wheremarijuanais notlegalbecausethereisnoregulatoryframeworkbuttheir medicalmarijuanasituationwasdoneinaninitiativepetitionway. Oklahomaisstuckinwhatishappeningtherebecausethe legislaturefailedtoact,andthisbodyneedstoact.Wehave beentryingtopasslittlepiecesofmarijuanareformforalong time.Weneedtoregulatethisbutnottothepointwhereyouare hinderingbusiness. Theendresultiscomingnomatterwhat,sowe shouldbeabletotackleitasabodyanddoittherightwaythe firsttime.Thepieceaboutpossession/use ofmarijuanaandthe abilitytopossessafirearm:weshouldnotberegulatingpeople’s personalresponsibility. Weneedtoaddresscertainthingsinthe bill,thingsthatneedtobeironedout.Likeifthetaxonitis toohigh,itwillfueltheblackmarket.Samewithfixingthe issueforpeoplewhohavealreadyinvestedalotoftimeandmoney intojumpingthroughhoopstogetthemedicallicensesothatthey donothavetojumpthroughthesamehoopsagain.Itis unnecessary. HavingthelegislationnotgotoGeneralRevenue(GR) istoallowforlineitemssoyoucanseewherethemoneyisgoing. IfitgoestoGR,thereisnolineitemtotrackwhereitisgoing. Thereisnolimittohowmanydispensarylicensespeoplecanhave. Peopleshouldnothavetostayinprisonifmarijuanaislegalized iftheyarecaughtwithlessthanacertainamountandthereare somereallygoodandintelligentpeoplewhohavebeencaughtwith marijuana. MarijuanaisgoingtofloodMissourifromotherstates, likeCaliforniaandOklahoma,sowemightaswellgetitgoing here.Itisnowcheapertobuymarijuanaontheblackmarket becauseoftheinitiativeprocess. Anditburdenslawenforcement becausetheywerenotpartoftheconversationwhenitfirstwent through. Thewaytheyhavetoinquirenowaboutwhethersomeone hasamedicalcardtakesareallylongtimeandithindersthelaw enforcementprocess. Peoplechoosetositdownandrelaxwitha glassofwine,sotheycanchoosetositdownwithmarijuana. The priceoflegalmarijuanaisalmostdoublethepriceontheblack market,anditfuelsdrugcartelsandhumantrafficking. In2020 therewere10,000marijuanapossessionarrestsreportedtotheFBI andthisamountstolotsofmoneyspentenforcingtheselaws.The ballotinitiativemakesitsoonlyafewcorporationscancontrol thismarket.MissourishouldgotheMichiganroute.Thereismore thanonewaytogetthisdone.Itisnotenoughtoexpunge;ithas tobereentryservices. Oftheincarcerationpopulationfordrugs, 400%isminoritiesandtheyareasmallrepresentative ofthe trade.LegalMissouri2022isbadandtakesadigat pharmaceuticals anditcreatesmorehoopsandacorporatemonopoly. Thereisdevastationtomassiveportionsofthecommunitythrough thecriminalization. TheGovernorsaidhewantsthelegislatureto getthisdone;otherwisethisisgoingtogetdoneonaballot initiativeanditisgoingtobebad.Thisisanopportunityfor minoritygroups,includingfelons,togetinvolvedinthebusiness sideofthisindustry. Itmakesnosensethatabarownercould sellsomeoneafifthofJackDanielsbutcannotsellajoint. Medicalpatientsareabletogetoffcertainmedicationsbecause theynowhaveaccesstomedicalmarijuana,eventhoughtheindustry isveryfrustrating. Itismedicallybeneficialandweneedto thinkaboutpatients,andnotjustthepocketsofpeoplebeing lined.TheblackmarketisblowingupandMissouridollarsare goingtothewestcoastbecauseofthelimitedlicensing. Tax dollarsinMissouriandsalesdollarsaredollarsthatneedtobe kepthereandnotspentinCaliforniaandColoradoorOklahoma. Peopleinthebootheelarepoorandtheycannotafforddispensary prices.Cannabishaschangedlives.Parentscannotaffordtoget theirkids’medicationfromdispensariesandgetfood.Theycannot growiftheyarerenters.Theveteranswhocommitsuicideevery day,itismorethan22,whichisthecommonnumber.Thereasonit ismoreisbecausethealcoholandopioidstheyconsumekillthem. Veteransshouldnothavetopayformedicationatall.Theyareon afixedincome. TestifyingforthebillwereRepresentative Hicks;AlexandraNicole Sprenz;AllenIler;AndrewBeavers,CultacareLLC;Clayton Utterback;DanielRaySuddarth;DeidreWoods;EldonOrr;Erianne Hartley;JCBlackmon;JeffreySutton;JohnHirt;JosephAlanMoore; JoshWilson;KaceyLeighKlingel;KaitlynSpears;KimberlyRDenny; LoganThomasHada;MarianneHada;MaryCremer;RichardGCrossman; SarahSmith;TaylorWilson;ThomasGrellner,NewHorizonsFarms; TravisKeithRuch;WilliamABuchanan;ZacharyJHarrington;Mark Powell;DanDziga;RandyDaleJohnson;AmyPowell;JamesJanes; KathyL.Kitrel;MegonCody;AmericansforProsperity;MatthewD. Kitrel;CandyAnnHenry;ErikShelquist;MichaelDesmond;Sya Collins;DanielA.Jones;ArlenP.McGee;TimothyGilio;Jonathan Touert;ChristinaThompson;GamalE.Castile;TimothyGoosey;Kyle Duff;JeremiahOakley;DylanGrisham;EricMcCauley;Brandon Sportsman;JenniferGoll;BrandiOrtegaLopez,MarryPottinsSupply LLC;SteveBurrus;RichardBreland;DebraNash;RebeccaA.Groom; JoshJ.Loftis,HomeGrowSolutionsMissouriLLC;ShaynaWells; StewartWells;MatthewNeal;VernonMcClanahan,Eleveated LifestylesLLC;RicSadler,JeffGro;GabrielLange;AdelaWisdom; AaronWisdom;ChrisHammann;KimberlyKowalski;Wendy&Coltyn Turner;JohnT.Grady;ChrisBell;JamesThomas;JeannineGriggs; KatAllison;MatthewOvercast;BrennanEngland,Minoritiesfor MedicalMarijuana;ShaneW.Burks;JoaniHarshman,HarshmanLaw Firm;AngelSmith;DominicPrater;JeanettiaAnderson;Nellie Williams;PaulCallicoat,SarcoxieNursery;WendyCallicoat, SarcoxieNursery;LukeBarber;andJeffBueckendorf. OPPONENTS: Thosewhoopposethebillsaythatthereisyouth marijuanauseinColoradoaswellasimpaireddrivinginColorado. MarijuanaisinvolvedinoneoutofeveryfourroaddeathsinCO. Thesearesocialconcerns. TheseissuesareinIllinoisaswellas Colorado. Emergencyroomvisitsareontheriserelatedtothisin thosestates,too.Thisisgoingtodisproportionately impact lowerincomepeopleintheworkindustry. Itisawell-regulated industrybyDHSS.Theyareverystrictbuttheykeepitwell- regulated. ThereisnoregulationinOklahoma;itisliketheWild West.ThereisalargegroupofChinesenationalsinvolvedinthe marijuanatradeinOklahoma. Thatmoneycomingbackintothe economyofOklahoma,theyareconvincedthatitisgoingback overseastoChina.Thereisreallynodifferencebetweenthe medicalmarketinOklahoma;itmightaswellbearecreational market.Ifyoudonothaveanyenforcementmechanism,youare goingtohaveaproblem. Ourcurrentmarket:38growsinMissouri thatareupandrunning. Thelimitwas60anditisprobablygoing togrowalittle.Whatwehaveseenhererecentlyisthecurrent supplyout-pacesdemand.Poundsofmarijuanaaresellingfor $1600,anditisprobablygoingtogodownto$800apoundwhenyou reachcapacity. Theblackmarkethasbeenaroundforalongtime. Itoperatesbecausestatestaxatsuchahighrate.Hereyoucan produceatsuchahighlevelandqualitythatyoucanprobably drivetheblackmarketout.IfyouopenthemarketinMissouri, youaregoingtohaveverysimilarconsequencestoOklahoma. You havetothinkabouthowthisisgoingtoaffectlawenforcement. Ifyougivethemlotsmoreworktodobutdonotincreasetheir funding,youareessentiallydefundingthem.Thisneedstobe regulatedanditisnodifferentfromDEAregulatingthe pharmaceutical industry. Ittakesnorequirementsbasicallytoget amedicalmarijuanacard.Thereisnoenforcementinthebill,so, eveniftherearerules,thereisnoincentivetofollowthem becausenothingwillhappen.Itisgoingtotravelacrossstate borders,sowearegoingtofloodthemarketsofArkansas,Kansas, Texas,etc.Wearegoingtocreatesuchavolumeofmarijuanaso itisnotgoingtostayhere.Thereshouldbealimitonlicenses forgrowinginMissouri. Puttingarecreationalmarketona department,itisgoingtobeatrainwreck.Securityregulations: cannabisfacilitiesmustemploysecuritymanagers,whohavetomake thefacilitiesassecureaspossiblewhilestillbeingcost effective. DHSSrequiresthis,butthereisnotanythinglikethis inthebill.Itisnotcheaporfastbutitisnecessarytokeep theindustrysafe.Therearedefinitelygoingtobearmed robberiesatsomepointsinceithashappenedineveryotherstate. Licensecaps:thereisnoperfectnumber,butthemorelicensesyou have,themorelikelyitisthattherewillbenowaytoregulate it.Therearejustnotenoughpeopletodoit.Departmentof Agriculturewillhavetohireinvestigator/regulators togoaround thestatetodothis.Possessionlimits:thereneedstobea reasonablepossessionlimit.Thereisnothinginthebillthat requiresmandatorytesting,sothisisahugepublicsafety concern. Productsindispensarieshavetobetestedtobesure theyaresafe.Itisalsonotjusttheproductitselfthatcould becontaminated;itcouldbethepackaging,too.Thereare10 licensedtestingfacilitiesinMissouri,andaboutsixareupand running. TheytestallthemedicalmarijuanainMissouri. Forthe medicalmarijuana,thetestersgointothelabtodothetesting, andthatisnotsomethingrequiredbythebill.Thebillsays growerscansendsamplestoalab.90daysforthestatetoturn aroundunlimitedlicensesisunreasonableandunrealistic. Barely anylicenseesareabletoturnaprofit.Followtherevenueifyou wanttodeterminehowmanylicenseswouldbeappropriate. There arealreadytoomanylicensesandthereisanoversupply.Opening thisuptounlimitedlicenseswillexpandtheblackmarketand decreasequality. Peoplearebuyingreallycheapmarijuanain Oklahomaandsellingithigherinotherstates.Thereare175,000 patientsandcaregiversinMissouri(formedicalmarijuana). There havebeennearly400licenseissuedtodate.Whycan’tcurrent medicalmarijuanalicenseesapplyforarecreationallicenseuntil 2024?Theproductalsoneedstobetestedbecauseyouwanttomake suretheproductsaresafe.Thereisnowaytohaveallthe testingandsecuritymeasures,whicharenecessarybutdefinitely expensive,andhavealow-pricedproduct. TestifyingagainstthebillwereJamesAlicie;EricZahnd,Missouri AssociationofProsecutingAttorneys;MissouriCatholicConference; ArnieC.AcDienoff;MissouriStateMedicalAssociation;Stephen Nitter,MissouriAssociationOfOsteopathicPhysiciansandSurgeons (MAOPS);MissouriChapter,AmericanAcademyofPediatrics;Joe Patterson;NatalieBrown,EKGLabs;JohnPennington,Proper Cannabis;JoeDelia,U.S.Canna;EricWalter,MoCannTrade;Brooke Foster,CocoDispensaries;andGavinWalker. OTHERS:Otherstestifyingonthebillsaythatthereisalotof specific,regulatoryprovisionlanguageinthebill,anditisto avoidthe“wildwest”situationinOklahoma. Thereisallsortof informationthathastobeshownandprovenbeforeyoucangeta license. Thereasonthereisanoversupplyisbecausethisisnot acommoditymarketproductorwhateverhesaid.Thisproposal pushesthestatetowardhavingthat.DepartmentofAgriculturewas chosenspecificallybecauseitalreadyregulateshemp,whichisthe sameplant.Thereisalackofeducation,understanding, and somethingelsetounderstandtheparametersoftheconstitutional provisionofmarijuana. TestifyingonthebillwereDamienJohnson;BrianRiegel,South PointHemp;KevinHalderman;EapenThampy,CanamoSolutions, FederalStorage,andBlueLine. Writtentestimonyhasbeensubmittedforthisbill.Thefull writtentestimonycanbefoundunderTestimonyonthebillpageon theHousewebsite.