86R3599 JSC-D
By: RodrÃguez S.B. No. 1416
A BILL TO BE ENTITLED
AN ACT
relating to the use of medical cannabis by veterans for
post-traumatic stress disorder and the licensing of associated
cultivating or dispensing organizations; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 6, Health and Safety Code, is
amended by adding Chapter 488 to read as follows:
CHAPTER 488. MEDICAL CANNABIS FOR CERTAIN VETERANS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 488.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Health and Human Services
Commission.
(2) "Cultivating or dispensing facility" means a
facility that:
(A) cultivates, processes, manufactures, or
dispenses medical cannabis under this chapter; and
(B) is owned or operated by a cultivating or
dispensing organization licensed under Subchapter C.
(3) "Cultivating or dispensing organization" means an
organization that cultivates, processes, manufactures, or
dispenses medical cannabis under this chapter.
(4) "Executive commissioner" means the executive
commissioner of the Health and Human Services Commission.
(5) "Historically underutilized business" has the
meaning assigned by Section 2161.001, Government Code.
(6) "Medical cannabis" means the plant Cannabis sativa
L. and any part of that plant or any compound, manufacture, salt,
derivative, mixture, preparation, resin, or oil of that plant.
(7) "Post-traumatic stress disorder" means a disorder
that:
(A) meets the diagnostic criteria for
posttraumatic stress disorder specified by the American
Psychiatric Association in the Diagnostic and Statistical Manual of
Mental Disorders, fifth edition, or a later edition adopted by the
executive commissioner; and
(B) results in an impairment of a person's
functioning in the person's community, employment, family, school,
or social group.
(8) "Psychoactive medication" means a medication that
is prescribed for the treatment of symptoms of psychosis or other
severe mental or emotional disorders and that is used to exercise an
effect on the central nervous system to influence and modify
behavior, cognition, or affective state when treating the symptoms
of mental illness. The term includes the following categories when
used as described by this subdivision:
(A) antipsychotics or neuroleptics;
(B) antidepressants;
(C) agents for control of mania or depression;
(D) antianxiety agents;
(E) sedatives, hypnotics, or other
sleep-promoting drugs; and
(F) psychomotor stimulants.
(9) "Veteran" means an individual who has served in:
(A) the army, navy, air force, coast guard, or
marine corps of the United States;
(B) the state military forces, as defined by
Section 431.001, Government Code; or
(C) a reserve component of the armed forces of
the United States.
Sec. 488.002. ADMINISTRATION BY COMMISSION; RULES. (a)
The commission shall administer this chapter.
(b) The executive commissioner shall adopt any rules
necessary for the administration and enforcement of this chapter.
SUBCHAPTER B. PURCHASE OF MEDICAL CANNABIS
Sec. 488.051. ELIGIBILITY; PURCHASER PERMIT REQUIRED. A
veteran suffering from post-traumatic stress disorder is eligible
to purchase medical cannabis from a cultivating or dispensing
facility if the veteran is issued a purchaser permit under this
subchapter.
Sec. 488.052. APPLICATION. A veteran may apply to the
commission for a purchaser permit by submitting a completed
application form as prescribed by the commission and:
(1) proof of the veteran's military service; and
(2) proof of the veteran's post-traumatic stress
disorder, including:
(A) a written diagnosis from a physician;
(B) the veteran's current prescription for a
psychoactive medication; and
(C) any other proof acceptable to the commission
as provided by rule of the executive commissioner.
Sec. 488.053. ISSUANCE OF PERMIT. The commission shall
issue a purchaser permit to a veteran who submits an application
under Section 488.052 if the commission determines that the veteran
is eligible for the permit.
SUBCHAPTER C. CULTIVATING OR DISPENSING ORGANIZATION
Sec. 488.101. LICENSE REQUIRED. A cultivating or
dispensing organization may not cultivate, process, or dispense
medical cannabis for purposes of this chapter without a license
issued under this subchapter.
Sec. 488.102. ELIGIBILITY FOR LICENSE. To qualify for a
license under this subchapter, a cultivating or dispensing
organization must:
(1) have entered into a partnership in connection with
the establishment or operation of a cultivating or dispensing
facility with:
(A) a health system that owns or operates a
health care facility with at least 200 beds;
(B) a public university in this state; or
(C) a registered clinical research organization;
(2) show that a partnership described by Subdivision
(1) has equity partners at least 50 percent of which must:
(A) have experience in owning 15 or more private
cannabis investments;
(B) have experience in owning five or more
private health care ventures; and
(C) have resided in this state for five or more
years;
(3) have net cash assets that include an account with
at least $5 million held at a financial institution as defined by
Section 201.101, Finance Code; and
(4) have a management and operations team that meets
the requirements of Section 488.103.
Sec. 488.103. ORGANIZATION OR FACILITY MANAGEMENT OR
OPERATION TEAM. (a) At least one member of the cultivating or
dispensing organization's governing authority or at least one
manager of the organization's cultivating or dispensing facility
must:
(1) have at least three years' experience in legal
cannabis operations;
(2) have documented experience in the cultivation,
extraction, manufacturing, or dispensing of cannabis in at least
four jurisdictions in which cannabis is legal; and
(3) with respect to an organization that cultivates or
processes medical cannabis:
(A) have experience overseeing at least five
indoor or greenhouse cultivation and extraction facility
operations with a total flowering canopy of not less than 100,000
square feet; and
(B) demonstrate experience in extraction and
refinement of medical cannabis to create products in tightly
controlled ratios of tetrahydrocannabinol and cannabidiol.
(b) The operating team of the cultivating or dispensing
organization or a cultivating or dispensing facility of the
organization must:
(1) have at least six years' experience in legal
cannabis operations, collectively; and
(2) with respect to an organization that cultivates or
processes medical cannabis, have overseen the growth of at least
75,000 pounds of dry cannabis flower.
Sec. 488.104. LICENSE APPLICATION. (a) An eligible
cultivating or dispensing organization may apply for a license
under this subchapter by submitting an application, in the form
provided by the commission, along with the application fee
prescribed by Section 488.111.
(b) The application must:
(1) contain:
(A) the name and address of the applicant; and
(B) the name and address of each member of the
applicant's governing authority, as defined by Section 1.002,
Business Organizations Code;
(2) include a plan to hire a workforce for its
cultivating or dispensing facilities that, to the extent possible,
is composed of at least 33 percent veterans;
(3) include a plan to use technology and processes to
minimize water and electricity uses by the applicant's cannabis
cultivating and processing facilities while maintaining the
production of high quality medical cannabis;
(4) contain a detailed explanation of the applicant's
capability to cultivate and manufacture a sufficient amount of
quality-controlled medical cannabis to support the qualifying
veteran base in this state; and
(5) contain any other information considered
necessary by the commission to determine the applicant's
eligibility for the license.
Sec. 488.105. CRIMINAL HISTORY BACKGROUND CHECK. (a) An
applicant for the issuance or renewal of a license under this
subchapter shall provide to the Department of Public Safety the
applicant's name and the name of:
(1) each person who has a 20 percent equity interest in
the applicant; and
(2) each employee or prospective employee of each of
the applicant's cultivating or dispensing facilities.
(b) The Department of Public Safety shall conduct a criminal
history background check on each individual whose name is provided
to the department under Subsection (a). The public safety director
of the Department of Public Safety by rule shall:
(1) determine the manner by which an individual is
required to submit a complete set of fingerprints to the department
for purposes of a criminal history background check under this
section; and
(2) establish criteria for determining whether an
individual passes the criminal history background check for the
purposes of this section.
(c) After conducting a criminal history background check
under this section, the Department of Public Safety shall notify
the commission and the applicant organization or relevant facility
of the organization and the individual who is the subject of the
criminal history background check as to whether the individual
passed the criminal history background check.
Sec. 488.106. APPROVAL OR DENIAL OF APPLICATION. (a) The
commission shall approve the application and issue to the applicant
a license under this subchapter if the commission determines that:
(1) the applicant meets the eligibility requirements
of Section 488.102;
(2) the applicant satisfies any additional criteria
determined by the commission to be necessary to implement this
chapter; and
(3) issuance of the license is necessary to ensure
reasonable statewide access to, and the availability of, medical
cannabis for qualifying veterans under Subchapter B.
(b) The commission shall approve or deny the application not
later than the 120th day after the date of the filing of a completed
application with payment of the required fees under Section
488.111.
(c) If the commission denies the application, the
commission shall notify the applicant.
(d) If an applicant requests a hearing on the application
not later than the 30th day after the date of notification under
Subsection (c), the applicant is entitled to a hearing not later
than the 60th day after the date of the request.
Sec. 488.107. ORGANIZATION PREFERENCES. The commission
shall give preference to historically underutilized businesses in
the issuance or renewal of licenses under this subchapter.
Sec. 488.108. COMMENCEMENT OF OPERATIONS ON APPROVAL OF
APPLICATION. If an organization's application is approved, a
cultivating or dispensing facility owned or operated by the
organization shall commence operations in this state not later than
the 270th day after the date of the approval.
Sec. 488.109. DUTY TO MAINTAIN ELIGIBILITY. Each license
holder under this subchapter must maintain compliance at all times
with the eligibility requirements of Section 488.102.
Sec. 488.110. TERM OF LICENSE; RENEWAL. (a) A license
issued or renewed under this subchapter expires on the second
anniversary of the date of issuance or renewal, as applicable.
(b) A license holder may apply for renewal of a license as
prescribed by rule of the executive commissioner.
Sec. 488.111. FEES. (a) The executive commissioner by rule
shall set application and licensing fees under this subchapter in
amounts sufficient to cover the cost of administering and enforcing
this chapter.
(b) In adopting rules under Subsection (a), the executive
commissioner shall:
(1) set an application fee in an amount that is at
least $10,000 but not more than $25,000;
(2) set an initial licensing fee in an amount that is
at least $250,000 but not more than $1 million; and
(3) set an annual licensing renewal fee in an amount
that is at least $15,000 but not more than $25,000.
Sec. 488.112. LICENSE SUSPENSION OR REVOCATION. (a) The
commission may at any time suspend or revoke a license issued under
this subchapter if the commission determines that:
(1) the license holder has not maintained the
eligibility requirements described by Section 488.102;
(2) the license holder has failed to comply with this
chapter or a rule adopted under this chapter; or
(3) the license holder's cultivating or dispensing
facility has failed to comply with this chapter or a rule adopted
under this chapter.
(b) The commission shall give written notice to the license
holder of a license suspension or revocation under this section and
the grounds for the suspension or revocation. The notice must be
sent by certified mail, return receipt requested.
(c) After suspending or revoking a license issued under this
subchapter, the commission shall notify the public safety director
of the Department of Public Safety. The director may seize or place
under seal all medical cannabis and drug paraphernalia owned or
possessed by the license holder. If the commission orders the
revocation of the license, a disposition may not be made of the
seized or sealed medical cannabis or drug paraphernalia until the
time for administrative appeal of the order has elapsed or until all
appeals have been concluded. When a revocation order becomes
final, all medical cannabis and drug paraphernalia may be forfeited
to the state as provided under Subchapter E, Chapter 481.
(d) Chapter 2001, Government Code, applies to a proceeding
under this section.
SUBCHAPTER D. CULTIVATING AND MANUFACTURING PRACTICES
Sec. 488.151. POTENCY. Each medical cannabis product of a
cultivating or dispensing facility must consistently test within
five percent of the stated amount of tetrahydrocannabinol and
cannabidiol on the label of the product.
Sec. 488.152. SAFETY TESTING. (a) Medical cannabis
products of a cultivating or dispensing facility must be tested for
harmful substances, including microbials, pesticides, and residual
solvents.
(b) The executive commissioner shall consult with the
Department of Agriculture in adopting rules setting safety
standards for medical cannabis made available through a dispensary
under this chapter.
Sec. 488.153. GOOD MANUFACTURING PRACTICES. Medical
cannabis to be dispensed under this chapter must be produced using
good manufacturing practices, as defined by executive commissioner
rule.
SUBCHAPTER E. DISPENSING REGULATIONS
Sec. 488.201. FORM OF CANNABIS. (a) Medical cannabis may
be dispensed to veterans with a purchaser permit under Subchapter B
only as a pill, patch, oil, or other derivative form that may be
produced with consistent concentrations of tetrahydrocannabinol
and cannabidiol.
(b) Edible cannabis products may not be in shapes or forms
appealing to children.
Sec. 488.202. LABELING. Each product containing medical
cannabis dispensed under this chapter must bear a label that
clearly states the concentrations of tetrahydrocannabinol and
cannabidiol in the product.
SUBCHAPTER F. REQUIREMENTS FOR LICENSEES AND FACILITIES
Sec. 488.251. CHARITABLE DONATIONS. A license holder must
annually donate at least five percent of the license holder's net
profit to a nonprofit organization that focuses on getting veterans
access to treatment for post-traumatic stress disorder.
Sec. 488.252. LOCATION. A cultivating or dispensing
facility owned or operated by a license holder may not be located
within 1,000 feet of a primary or secondary school or day-care
center that exists on the date of the license holder's initial
application for licensure under Subchapter C.
SECTION 2. Section 481.062(a), Health and Safety Code, is
amended to read as follows:
(a) The following persons may possess a controlled
substance under this chapter without registering with the federal
[Federal] Drug Enforcement Administration:
(1) an agent or employee of a manufacturer,
distributor, analyzer, or dispenser of the controlled substance who
is registered with the federal [Federal] Drug Enforcement
Administration and acting in the usual course of business or
employment;
(2) a common or contract carrier, a warehouseman, or
an employee of a carrier or warehouseman whose possession of the
controlled substance is in the usual course of business or
employment;
(3) an ultimate user or a person in possession of the
controlled substance under a lawful order of a practitioner or in
lawful possession of the controlled substance if it is listed in
Schedule V;
(4) an officer or employee of this state, another
state, a political subdivision of this state or another state, or
the United States who is lawfully engaged in the enforcement of a
law relating to a controlled substance or drug or to a customs law
and authorized to possess the controlled substance in the discharge
of the person's official duties;
(5) if the substance is tetrahydrocannabinol or one of
its derivatives:
(A) a Department of State Health Services
official, a medical school researcher, or a research program
participant possessing the substance as authorized under
Subchapter G; or
(B) a practitioner or an ultimate user possessing
the substance as a participant in a federally approved therapeutic
research program that the commissioner has reviewed and found, in
writing, to contain a medically responsible research protocol; [or]
(6) a dispensing organization licensed under Chapter
487 that possesses low-THC cannabis; or
(7) a cultivating or dispensing organization licensed
under Subchapter C, Chapter 488, that possesses medical cannabis.
SECTION 3. Sections 481.111(e) and (f), Health and Safety
Code, are amended to read as follows:
(e) Sections 481.120, 481.121, 481.122, and 481.125 do not
apply to a person who engages in the acquisition, possession,
production, cultivation, delivery, or disposal of a raw material
used in or by-product created by the production or cultivation of
low-THC cannabis or medical cannabis if the person:
(1) for an offense involving possession only of
marihuana or drug paraphernalia, is a patient for whom low-THC
cannabis is prescribed under Chapter 169, Occupations Code, or the
patient's legal guardian, and the person possesses low-THC cannabis
obtained under a valid prescription from a dispensing organization;
[or]
(2) is a director, manager, or employee of a low-THC
cannabis dispensing organization and the person, solely in
performing the person's regular duties at the organization,
acquires, possesses, produces, cultivates, dispenses, or disposes
of:
(A) in reasonable quantities, any low-THC
cannabis or raw materials used in or by-products created by the
production or cultivation of low-THC cannabis; or
(B) any drug paraphernalia used in the
acquisition, possession, production, cultivation, delivery, or
disposal of low-THC cannabis;
(3) for an offense involving possession only of
marihuana or drug paraphernalia, is a patient who holds a purchaser
permit under Subchapter B, Chapter 488; or
(4) is a member of the governing authority, as defined
by Section 1.002, Business Organizations Code, or a manager or
employee of a medical cannabis cultivating or dispensing
organization or facility and the person, solely in performing the
person's duties at the organization or facility, acquires,
possesses, produces, cultivates, delivers, or disposes of:
(A) in reasonable quantities, any medical
cannabis or raw materials used in or by-products created by the
production or cultivation of medical cannabis; or
(B) any drug paraphernalia used in the
acquisition, possession, production, cultivation, delivery, or
disposal of medical cannabis.
(f) For purposes of Subsection (e):
(1) ["Dispensing organization" has the meaning
assigned by Section 487.001.
[(2)] "Low-THC cannabis" has the meaning assigned by
Section 169.001, Occupations Code.
(2) "Low-THC cannabis dispensing organization" means
a dispensing organization as defined by Section 487.001.
(3) "Medical cannabis" has the meaning assigned by
Section 488.001.
(4) "Medical cannabis cultivating or dispensing
organization" means an organization licensed under Subchapter C,
Chapter 488.
SECTION 4. Section 551.004, Occupations Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) This subtitle does not apply to:
(1) a practitioner licensed by the appropriate state
board who supplies a patient of the practitioner with a drug in a
manner authorized by state or federal law and who does not operate a
pharmacy for the retailing of prescription drugs;
(2) a member of the faculty of a college of pharmacy
recognized by the board who is a pharmacist and who performs the
pharmacist's services only for the benefit of the college;
(3) a person who procures prescription drugs for
lawful research, teaching, or testing and not for resale;
(4) a home and community support services agency that
possesses a dangerous drug as authorized by Section 142.0061,
142.0062, or 142.0063, Health and Safety Code; [or]
(5) a low-THC cannabis dispensing organization[, as
defined by Section 487.001, Health and Safety Code,] that
cultivates, processes, and dispenses low-THC cannabis, as
authorized by a license issued under Subchapter C, Chapter 487,
Health and Safety Code, to a patient listed in the
compassionate-use registry established under that chapter; or
(6) a medical cannabis cultivating or dispensing
organization that cultivates, manufactures, or dispenses medical
cannabis, as authorized by a license issued under Subchapter C,
Chapter 488, Health and Safety Code, to a patient who holds a
purchaser permit under Subchapter B of that chapter.
(a-1) For purposes of Subsections (a)(5) and (6):
(1) "Low-THC cannabis dispensing organization" means
a dispensing organization as defined by Section 487.001, Health and
Safety Code.
(2) "Medical cannabis cultivating or dispensing
organization" means an organization licensed under Subchapter C,
Chapter 488, Health and Safety Code.
SECTION 5. Not later than July 1, 2020, the executive
commissioner of the Health and Human Services Commission shall
adopt all rules necessary to administer Chapter 488, Health and
Safety Code, as added by this Act, and provide copies of
applications for prospective cultivating or dispensing
organization licensees.
SECTION 6. After September 1, 2020, but not later than
January 1, 2021, the Health and Human Services Commission shall
begin accepting applications under Chapter 488, Health and Safety
Code, as added by this Act.
SECTION 7. This Act takes effect September 1, 2019.