Texas 2023 - 88th Regular

Texas House Bill HB1937 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R1506 MCF-D
2	2	By: González of Dallas H.B. No. 1937
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of the cultivation, manufacture,
8	8	processing, distribution, sale, testing, transportation, delivery,
9	9	transfer, possession, use, and taxation of cannabis and cannabis
10	10	products and local regulation of cannabis establishments;
11	11	authorizing the imposition of fees; requiring an occupational
12	12	license; creating a criminal offense; imposing a tax.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Subtitle C, Title 6, Health and Safety Code, is
15	15	amended by adding Chapter 491 to read as follows:
16	16	CHAPTER 491. REGULATION OF CANNABIS
17	17	SUBCHAPTER A. GENERAL PROVISIONS
18	18	Sec. 491.0001. DEFINITIONS. In this chapter:
19	19	(1) "Adult" means an individual 21 years of age or
20	20	older.
21	21	(2) "Cannabis" means the plant Cannabis sativa L.,
22	22	whether growing or not, the seeds of that plant, and every compound,
23	23	manufacture, salt, derivative, mixture, or preparation of that
24	24	plant or its seeds. The term includes cannabis concentrate. The
25	25	term does not include:
26	26	(A) the mature stalks of the plant or fiber
27	27	produced from the stalks;
28	28	(B) oil or cake made from the seeds of the plant;
29	29	(C) a compound, manufacture, salt, derivative,
30	30	mixture, or preparation of the mature stalks, fiber, oil, or cake;
31	31	(D) the sterilized seeds of the plant that are
32	32	incapable of beginning germination;
33	33	(E) hemp, as that term is defined by Section
34	34	121.001, Agriculture Code; or
35	35	(F) a consumable hemp product, as that term is
36	36	defined by Section 443.001.
37	37	(3) "Cannabis concentrate" means the resin extracted
38	38	from a part of the plant Cannabis sativa L. or a compound,
39	39	manufacture, salt, derivative, mixture, or preparation of the
40	40	resin.
41	41	(4) "Cannabis establishment" means an entity licensed
42	42	by the department under this chapter to process and dispense
43	43	cannabis and cannabis products to an adult.
44	44	(5) "Cannabis grower" means an entity licensed by the
45	45	department to cultivate cannabis for sale and distribution to a
46	46	cannabis establishment.
47	47	(6) "Cannabis product" means a product that contains
48	48	cannabis and is intended for use or consumption by humans,
49	49	including as an edible product or as a topical product, ointment,
50	50	oil, or tincture. The term includes products that consist of
51	51	cannabis and other ingredients.
52	52	(7) "Cannabis-related drug paraphernalia" means
53	53	equipment, a product, or material that is used or intended for use
54	54	in:
55	55	(A) planting, propagating, cultivating, growing,
56	56	harvesting, manufacturing, compounding, converting, producing,
57	57	processing, preparing, testing, analyzing, packaging, repackaging,
58	58	storing, or containing cannabis or a cannabis product; or
59	59	(B) introducing cannabis or a cannabis product
60	60	into the human body.
61	61	(8) "Cannabis secure transporter" means an entity
62	62	licensed by the department under this chapter to transport cannabis
63	63	from a cannabis grower to a cannabis establishment.
64	64	(9) "Cannabis testing facility" means an entity
65	65	licensed by the department under this chapter to analyze the safety
66	66	and potency of cannabis and cannabis products.
67	67	(10) "Commission" means the Texas Commission of
68	68	Licensing and Regulation.
69	69	(11) "Cultivate" means to propagate, breed, grow,
70	70	harvest, dry, cure, or separate parts of the cannabis plant by
71	71	manual or mechanical means.
72	72	(12) "Department" means the Texas Department of
73	73	Licensing and Regulation.
74	74	(13) "Executive director" means the executive
75	75	director of the department.
76	76	(14) "Marihuana" has the meaning assigned by Section
77	77	481.002.
78	78	(15) "Process" means to separate or otherwise prepare
79	79	parts of the cannabis plant and to compound, blend, extract,
80	80	infuse, or otherwise make or prepare cannabis concentrate or
81	81	cannabis products.
82	82	SUBCHAPTER B. PROTECTIONS FROM LEGAL ACTION RELATED TO CANNABIS
83	83	Sec. 491.0051. AUTHORIZED CONDUCT: PERSONAL USE OF
84	84	CANNABIS. An adult is authorized under this chapter to:
85	85	(1) use, possess, and transport not more than 2.5
86	86	ounces of cannabis, except that not more than 15 grams of that
87	87	amount may be in the form of cannabis concentrate;
88	88	(2) transfer without remuneration to another adult not
89	89	more than 2.5 ounces of cannabis, except that not more than 15 grams
90	90	of that amount may be in the form of cannabis concentrate and
91	91	provided that the transfer is not advertised or promoted to the
92	92	public;
93	93	(3) possess, store, or process on the premises of the
94	94	adult's private residence not more than 10 ounces of cannabis,
95	95	provided that the amount in excess of 2.5 ounces is stored in a
96	96	container or area equipped with locks or other security devices
97	97	that restrict access to the container or area;
98	98	(4) use, possess, process, transport, or transfer to
99	99	another adult without remuneration an amount of cannabis products
100	100	specified by rule of the commission as the allowable amount of
101	101	cannabis for purposes of this subdivision; and
102	102	(5) use, possess, transport, or transfer to another
103	103	adult without remuneration cannabis-related drug paraphernalia.
104	104	Sec. 491.0052. AUTHORIZED CONDUCT: RETAIL CANNABIS
105	105	OPERATIONS. This chapter authorizes the conduct of:
106	106	(1) a cannabis grower director, manager, or employee
107	107	who, acting within the scope of the grower's license:
108	108	(A) cultivates cannabis or produces cannabis
109	109	products for sale or transfer to a cannabis establishment; and
110	110	(B) possesses cannabis or cannabis-related drug
111	111	paraphernalia;
112	112	(2) a cannabis establishment director, manager, or
113	113	employee who, acting within the scope of the establishment's
114	114	license, possesses cannabis or cannabis products or transfers or
115	115	sells cannabis, cannabis products, or cannabis-related drug
116	116	paraphernalia to an adult;
117	117	(3) a cannabis secure transporter director, manager,
118	118	or employee who, acting within the scope of the secure
119	119	transporter's license, transports, transfers, or delivers cannabis
120	120	or cannabis products from a cannabis grower to a cannabis
121	121	establishment; and
122	122	(4) a cannabis testing facility director, manager, or
123	123	employee who, acting within the scope of the facility's license,
124	124	possesses or tests cannabis, cannabis products, or
125	125	cannabis-related drug paraphernalia.
126	126	Sec. 491.0053. PROTECTION FROM LEGAL ACTION FOR AUTHORIZED
127	127	CONDUCT. (a) A person is not subject to arrest, prosecution,
128	128	forfeiture of property, or penalty in any manner or denial of any
129	129	right or privilege, including any civil penalty or disciplinary
130	130	action by a court or occupational or professional licensing board
131	131	or bureau solely due to conduct authorized under Section 491.0051
132	132	or 491.0052.
133	133	(b) The fact that a person engages in conduct authorized by
134	134	Section 491.0051 or 491.0052 does not in itself constitute grounds
135	135	for denying, limiting, or restricting conservatorship or
136	136	possession of or access to a child under Title 5, Family Code.
137	137	Sec. 491.0054. PROHIBITION OF CANNABIS ON PRIVATE PROPERTY;
138	138	EXCEPTION. (a) Except as otherwise provided by Subsection (b), a
139	139	person may prohibit or restrict the possession, consumption,
140	140	cultivation, distribution, processing, sale, or display of
141	141	cannabis or cannabis products on property the person owns,
142	142	occupies, or manages.
143	143	(b) A person may not prohibit a residential tenant under a
144	144	lease agreement from possessing cannabis, cannabis products, or
145	145	cannabis-related drug paraphernalia or consuming cannabis by means
146	146	other than smoking on the premises.
147	147	Sec. 491.0055. CONDUCT NOT AUTHORIZED UNDER THIS CHAPTER.
148	148	This chapter does not authorize the following conduct:
149	149	(1) operating a motor vehicle while intoxicated or
150	150	otherwise violating Chapter 49, Penal Code;
151	151	(2) smoking or otherwise consuming cannabis in:
152	152	(A) a motor vehicle while the vehicle is on a
153	153	public road;
154	154	(B) an aircraft, while the aircraft is in flight
155	155	or in a public area;
156	156	(C) a watercraft, while the watercraft is on a
157	157	public waterway; or
158	158	(D) a public place, unless:
159	159	(i) the public place is an area designated
160	160	by the applicable political subdivision as an area where using
161	161	cannabis is permissible; and
162	162	(ii) the area described by Subparagraph (i)
163	163	is not accessible to persons younger than 21 years of age;
164	164	(3) possessing or consuming cannabis or cannabis
165	165	products or possessing cannabis-related drug paraphernalia:
166	166	(A) on the premises of a public or private
167	167	child-care facility, prekindergarten, or primary or secondary
168	168	school;
169	169	(B) on a school bus that serves a facility or
170	170	school described by Paragraph (A); or
171	171	(C) on the premises of a correctional facility,
172	172	as defined by Article 18A.251, Code of Criminal Procedure, or a
173	173	civil commitment facility; or
174	174	(4) separating resin from the cannabis plant by butane
175	175	extraction or another method that uses a substance with a
176	176	flashpoint below 100 degrees Fahrenheit in a public place or motor
177	177	vehicle or within the curtilage of a residential structure.
178	178	SUBCHAPTER C. DUTIES OF COMMISSION AND DEPARTMENT
179	179	Sec. 491.0101. DUTIES OF DEPARTMENT. The department shall
180	180	administer this chapter.
181	181	Sec. 491.0102. RULES; FEES. (a) The commission shall adopt
182	182	all necessary rules for the administration and enforcement of this
183	183	chapter, including rules imposing fees under this chapter in
184	184	amounts sufficient to cover the cost of administering this chapter.
185	185	(b) The commission by rule shall set application and license
186	186	fees under this chapter in amounts sufficient to administer this
187	187	chapter and may annually adjust the fees for inflation.
188	188	(c) A fee collected under this chapter shall be deposited to
189	189	the credit of the cannabis regulation account established under
190	190	Section 491.0251.
191	191	(d) The commission shall adopt rules for the reasonable
192	192	regulation of cannabis growers and cannabis establishments,
193	193	including rules that:
194	194	(1) restrict the use of dangerous pesticides;
195	195	(2) regulate the packaging and labeling of cannabis
196	196	products available at a cannabis establishment;
197	197	(3) restrict advertising and display of cannabis and
198	198	cannabis products;
199	199	(4) require recordkeeping and monitoring to track the
200	200	transfer of cannabis and cannabis products between license holders;
201	201	and
202	202	(5) require security measures, provided that the
203	203	security measures do not restrict the cultivation of cannabis
204	204	outdoors or in greenhouses.
205	205	Sec. 491.0103. TESTING, PACKAGING, AND LABELING STANDARDS.
206	206	(a) The commission by rule shall establish standards for:
207	207	(1) the operation of cannabis testing facilities;
208	208	(2) the testing of cannabis and cannabis products; and
209	209	(3) packaging and labeling requirements for cannabis
210	210	and cannabis products.
211	211	(b) In establishing standards for packaging and labeling
212	212	requirements under Subsection (a)(3), the commission shall require
213	213	that:
214	214	(1) cannabis and cannabis products be packaged in
215	215	opaque, resealable, child-resistant packaging that does not
216	216	resemble and may not be easily confused with typical packaging for
217	217	commercially sold candy;
218	218	(2) cannabis and cannabis products be clearly labeled;
219	219	and
220	220	(3) the label for a cannabis product disclose the
221	221	amount of cannabis contained in that product.
222	222	Sec. 491.0104. SECURE TRANSPORTATION OF CANNABIS. The
223	223	commission by rule shall establish standards applicable to cannabis
224	224	secure transporters, including standards to ensure all cannabis
225	225	establishments are properly served.
226	226	Sec. 491.0105. CONFLICT OF INTEREST. (a) A person who is
227	227	involved in the implementation, administration, or enforcement of
228	228	this chapter as a member of the commission, an employee of the
229	229	department, or a consultant to the commission or the department may
230	230	not also hold a pecuniary interest in any entity licensed by the
231	231	department under this chapter.
232	232	(b) A person who holds a pecuniary interest in a cannabis
233	233	testing facility or a cannabis secure transporter who holds a
234	234	license issued under this chapter may not hold a pecuniary interest
235	235	in any entity that holds a cannabis establishment or cannabis
236	236	grower license issued under this chapter.
237	237	(c) A person may not hold a pecuniary interest in more than
238	238	five entities that are licensed under this chapter as a cannabis
239	239	grower, except as provided by commission rule.
240	240	Sec. 491.0106. ANNUAL REPORT. The executive director shall
241	241	annually submit to the governor, the executive commissioner of the
242	242	Health and Human Services Commission, and the legislature a report
243	243	providing the following information regarding licensing and
244	244	regulation under this chapter:
245	245	(1) the number of applications received for each class
246	246	of license under this chapter;
247	247	(2) the number of licenses issued for each class of
248	248	license under this chapter;
249	249	(3) demographic information pertaining to license
250	250	holders;
251	251	(4) a description of any fines imposed on a license
252	252	holder or disciplinary actions taken against a license holder by
253	253	the department; and
254	254	(5) a statement of revenues and expenses of the
255	255	department related to the implementation, administration, and
256	256	enforcement of this chapter.
257	257	SUBCHAPTER D. LICENSING
258	258	Sec. 491.0151. LICENSE REQUIRED. A person must hold a
259	259	license issued by the department under this chapter to operate as a
260	260	cannabis grower, cannabis establishment, cannabis secure
261	261	transporter, or cannabis testing facility.
262	262	Sec. 491.0152. QUALIFICATIONS FOR LICENSURE. The
263	263	commission by rule shall provide for each class of license issued
264	264	under this chapter qualifications for licensure that are
265	265	demonstrably related to the operations authorized and duties
266	266	imposed under that class of license.
267	267	Sec. 491.0153. APPLICATION. (a) A person may apply for an
268	268	initial or renewal license under this chapter by submitting a form
269	269	prescribed by the department along with the application fee in an
270	270	amount set by the commission.
271	271	(b) The application must indicate the class of license
272	272	sought and include the name and address of the applicant, the name
273	273	and address of each of the applicant's directors, managers, and
274	274	employees, and any other information considered necessary by the
275	275	department to determine the applicant's eligibility for the
276	276	license.
277	277	Sec. 491.0154. ISSUANCE, RENEWAL, OR DENIAL OF LICENSE.
278	278	(a) The department shall issue or renew a license under this
279	279	chapter only if:
280	280	(1) the department determines the applicant meets the
281	281	qualifications for the class of license sought established under
282	282	Section 491.0152; and
283	283	(2) the applicant is in compliance with any applicable
284	284	local regulations.
285	285	(b) If the department denies the issuance or renewal of a
286	286	license under Subsection (a), the department shall give written
287	287	notice of the grounds for denial to the applicant.
288	288	(c) A license issued or renewed under this section expires
289	289	as determined by commission rule and the department in accordance
290	290	with Section 51.406, Occupations Code.
291	291	Sec. 491.0155. DUTY TO MAINTAIN QUALIFICATIONS. A license
292	292	holder shall maintain compliance at all times with the
293	293	qualifications for the applicable class of license established
294	294	under Section 491.0152.
295	295	Sec. 491.0156. LICENSE SUSPENSION OR REVOCATION. (a) The
296	296	department may at any time suspend or revoke a license issued under
297	297	this chapter if the department determines that the license holder
298	298	has not maintained the qualifications established under Section
299	299	491.0152 or has failed to comply with a duty imposed under this
300	300	chapter.
301	301	(b) The department shall give written notice to a license
302	302	holder of a license suspension or revocation under this section and
303	303	the grounds for the suspension or revocation. The notice must be
304	304	sent by certified mail, return receipt requested.
305	305	(c) After suspending or revoking a license issued under this
306	306	chapter, the department shall notify the Department of Public
307	307	Safety. The public safety director of the Department of Public
308	308	Safety may seize or place under seal all cannabis, cannabis
309	309	products, and cannabis-related drug paraphernalia owned or
310	310	possessed by the license holder. If the license is revoked, a
311	311	disposition may not be made of the seized or sealed cannabis,
312	312	cannabis products, or cannabis-related drug paraphernalia until
313	313	the time for administrative appeal of the order has elapsed or until
314	314	all appeals have been concluded. When a revocation order becomes
315	315	final, all cannabis, cannabis products, and cannabis-related drug
316	316	paraphernalia may be forfeited to the state as provided under
317	317	Subchapter E, Chapter 481.
318	318	(d) Chapter 2001, Government Code, applies to a proceeding
319	319	under this section.
320	320	Sec. 491.0157. CRIMINAL HISTORY BACKGROUND CHECK. (a) In
321	321	addition to satisfying the other requirements provided by
322	322	commission rule under this chapter, an applicant for a license
323	323	under this chapter must submit to the department a complete and
324	324	legible set of fingerprints, on a form prescribed by the
325	325	commission, for the purpose of obtaining criminal history record
326	326	information from the Department of Public Safety and the Federal
327	327	Bureau of Investigation.
328	328	(b) The department may deny a license to an applicant who
329	329	does not comply with the requirement of Subsection (a). Issuance of
330	330	a license by the department is conditioned on the department
331	331	obtaining the applicant's criminal history record information
332	332	under this section.
333	333	(c) The commission by rule shall establish criteria for
334	334	determining whether a person passes the criminal history background
335	335	check for purposes of this section. The rules adopted under this
336	336	section may not disqualify a person for licensure solely for a
337	337	conviction of an offense that involves the possession of marihuana
338	338	or the delivery of marihuana to a person 18 years of age or older.
339	339	SUBCHAPTER E. DUTIES OF LICENSE HOLDERS
340	340	Sec. 491.0201. DUTIES RELATING TO DISPENSING CANNABIS OR
341	341	CANNABIS PRODUCTS. Before dispensing cannabis or cannabis products
342	342	to an adult, a cannabis establishment must make reasonable efforts
343	343	to verify that:
344	344	(1) the person receiving the cannabis or cannabis
345	345	product is an adult;
346	346	(2) the cannabis or cannabis product complies with
347	347	department testing and labeling rules; and
348	348	(3) the amount dispensed is not greater than the
349	349	amount of cannabis or cannabis product allowed for personal use as
350	350	provided by Section 491.0051.
351	351	Sec. 491.0202. DUTIES RELATING TO SECURITY. (a) A license
352	352	holder shall ensure that the cultivation, processing, sale, or
353	353	display of cannabis, cannabis products, and cannabis-related drug
354	354	paraphernalia is not visible from a public place without the use of
355	355	optical aids or aircraft.
356	356	(b) A license holder may not cultivate, process, store, or
357	357	sell cannabis, cannabis products, or cannabis-related drug
358	358	paraphernalia at a location other than the physical address
359	359	approved by the department for the establishment under the license
360	360	issued to the establishment under this chapter.
361	361	(c) A license holder shall adopt reasonable security
362	362	measures necessary to restrict access to areas where cannabis,
363	363	cannabis products, or cannabis-related drug paraphernalia are
364	364	stored and to prevent theft of cannabis, cannabis products, and
365	365	cannabis-related drug paraphernalia.
366	366	Sec. 491.0203. LICENSE HOLDER OPERATIONS. (a) A license
367	367	holder may not employ or otherwise accept the services of a person
368	368	younger than 21 years of age.
369	369	(b) A cannabis establishment may not sell tobacco products,
370	370	as defined by Section 155.001, Tax Code.
371	371	Sec. 491.0204. MONTHLY SALES REPORT. A cannabis
372	372	establishment shall monthly submit a report to the comptroller
373	373	specifying the amount of cannabis sold, the number of cannabis
374	374	products sold, the number and types of cannabis-related drug
375	375	paraphernalia sold, and the amount of money collected in sales by
376	376	the establishment during the preceding month.
377	377	SUBCHAPTER F. FUNDING FOR REGULATION, OVERSIGHT, TESTING, AND
378	378	QUALITY CONTROL
379	379	Sec. 491.0251. CANNABIS REGULATION ACCOUNT. (a) The
380	380	cannabis regulation account is an account in the general revenue
381	381	fund administered by the department.
382	382	(b) The account consists of:
383	383	(1) money deposited to the credit of the account under
384	384	Section 166.0004, Tax Code; and
385	385	(2) fees deposited to the credit of the account under
386	386	Section 491.0102.
387	387	(c) Money in the account may be appropriated only to the
388	388	department for implementing and administering this chapter.
389	389	Sec. 491.0252. CANNABIS TESTING AND QUALITY CONTROL
390	390	ACCOUNT. (a) The cannabis testing and quality control account is
391	391	an account in the general revenue fund administered by the
392	392	Department of Public Safety.
393	393	(b) The account consists of money deposited to the credit of
394	394	the account under Section 166.0004, Tax Code.
395	395	(c) Money in the account may be appropriated only to the
396	396	Department of Public Safety for monitoring compliance with testing
397	397	and quality control requirements imposed on license holders by this
398	398	chapter or by commission rules adopted under this chapter.
399	399	Sec. 491.0253. CANNABIS ESTABLISHMENT REGULATION AND
400	400	OVERSIGHT LOCAL SHARE ACCOUNT; PAYMENT FROM ACCOUNT. (a) In this
401	401	section:
402	402	(1) "Account" means the cannabis establishment
403	403	regulation and oversight local share account created under this
404	404	section.
405	405	(2) "Fiscal year" means the fiscal year of a
406	406	qualifying local government.
407	407	(3) "Qualifying local government" means a
408	408	municipality or county in which at least one cannabis establishment
409	409	is located during any portion of the applicable fiscal year.
410	410	(b) The cannabis establishment regulation and oversight
411	411	local share account is an account in the general revenue fund
412	412	administered by the comptroller.
413	413	(c) The account consists of money deposited to the credit of
414	414	the account under Section 166.0004, Tax Code.
415	415	(d) Money in the account may be used by the comptroller only
416	416	to make a cannabis establishment regulation assistance payment to a
417	417	qualifying local government in the manner provided by this section.
418	418	(e) To serve the state purpose of ensuring that local
419	419	governments in which cannabis establishments are located may
420	420	effectively participate in the regulation and oversight of those
421	421	establishments, a qualifying local government is entitled to a
422	422	cannabis establishment regulation assistance payment from the
423	423	state for each fiscal year that the local government is a qualifying
424	424	local government.
425	425	(f) Except as provided by Subsection (j), the amount of the
426	426	cannabis establishment regulation assistance payment to which a
427	427	qualifying local government is entitled for a fiscal year is equal
428	428	to the cost incurred by the local government to enforce regulations
429	429	adopted under Subchapter G.
430	430	(g) Not later than April 1 of the year following the end of a
431	431	fiscal year for which a qualifying local government is entitled to a
432	432	cannabis establishment regulation assistance payment, the
433	433	qualifying local government may submit an application to the
434	434	comptroller to receive a cannabis establishment regulation
435	435	assistance payment for that fiscal year. The application must be
436	436	made on a form prescribed by the comptroller. The comptroller may
437	437	require the qualifying local government to submit any information
438	438	the comptroller needs to determine the amount of the cannabis
439	439	establishment regulation assistance payment to which the
440	440	qualifying local government is entitled.
441	441	(h) A qualifying local government that does not submit an
442	442	application to the comptroller by the date prescribed by Subsection
443	443	(g) is not entitled to a cannabis establishment regulation
444	444	assistance payment for the fiscal year for which that deadline
445	445	applies.
446	446	(i) The comptroller shall review each application by a local
447	447	government to determine whether the local government is entitled to
448	448	a cannabis establishment regulation assistance payment. If the
449	449	comptroller determines that the local government is entitled to the
450	450	payment, the comptroller shall remit the payment using available
451	451	money in the account to the qualifying local government not later
452	452	than the 30th day after the date the application for the payment is
453	453	made.
454	454	(j) If at the time a cannabis establishment regulation
455	455	assistance payment must be remitted to a qualifying local
456	456	government under Subsection (i) the comptroller determines the
457	457	available amount in the account is insufficient to make the
458	458	payment, the comptroller may reduce the amount of the payment to the
459	459	qualifying local government. If more than one payment must be
460	460	remitted at a time when the available amount in the account is
461	461	insufficient to make those payments, the comptroller shall make
462	462	reduced payments to each qualifying local government. The
463	463	comptroller shall allocate the reductions in the amount of the
464	464	payments in a manner that is proportionate to the number of cannabis
465	465	establishments in each qualifying local government.
466	466	(k) The comptroller shall adopt rules necessary to
467	467	implement this section.
468	468	SUBCHAPTER G. LOCAL REGULATION AND OVERSIGHT
469	469	Sec. 491.0301. DEFINITION. In this subchapter, "health
470	470	authority" has the meaning assigned by Section 431.002.
471	471	Sec. 491.0302. LOCAL AUTHORIZATION REQUIRED. A license
472	472	holder under this chapter may not operate in a county or
473	473	municipality without an order or ordinance adopted by the county or
474	474	municipality, as applicable, authorizing the operation of cannabis
475	475	growers, cannabis establishments, cannabis secure transporters, or
476	476	cannabis testing facilities in the county or municipality.
477	477	Sec. 491.0303. LOCAL REGULATION. A county or municipality
478	478	that authorizes the operation of cannabis growers, cannabis
479	479	establishments, or cannabis testing facilities in the county or
480	480	municipality may adopt regulations consistent with this chapter
481	481	governing the hours of operation, location, manner of conducting
482	482	business, and number of cannabis growers, cannabis establishments,
483	483	cannabis secure transporters, or cannabis testing facilities.
484	484	Sec. 491.0304. PUBLIC HEALTH INSPECTIONS. A health
485	485	authority may, on presenting appropriate credentials to the license
486	486	holder or employee of the cannabis establishment:
487	487	(1) enter at reasonable times the premises of a
488	488	cannabis establishment;
489	489	(2) enter a vehicle being used to transport cannabis;
490	490	or
491	491	(3) inspect at reasonable times, within reasonable
492	492	limits, and in a reasonable manner, the establishment or vehicle
493	493	and all equipment, finished and unfinished materials, containers,
494	494	and labeling of any item.
495	495	Sec. 491.0305. COMPLAINTS. (a) A county, municipality, or
496	496	health authority, as applicable, shall maintain a record of any
497	497	complaints made regarding the operations of a cannabis
498	498	establishment.
499	499	(b) A county, municipality, or health authority, as
500	500	applicable, shall investigate a complaint or refer the complaint to
501	501	the department, as appropriate.
502	502	SUBCHAPTER H. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS PRODUCT
503	503	TO MINORS PROHIBITED
504	504	Sec. 491.0351. DEFINITION. In this subchapter, "minor"
505	505	means a person younger than 21 years of age.
506	506	Sec. 491.0352. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS
507	507	PRODUCT TO MINORS PROHIBITED; PROOF OF AGE REQUIRED. (a) A person
508	508	commits an offense if the person, under the authority of this
509	509	chapter:
510	510	(1) sells, gives, or causes to be sold or given
511	511	cannabis or cannabis products to a minor; or
512	512	(2) sells, gives, or causes to be sold or given
513	513	cannabis or cannabis products to another person who intends to
514	514	deliver the cannabis or cannabis products to a minor.
515	515	(b) If an offense under this section occurs in connection
516	516	with a sale by an employee of the owner of a cannabis establishment,
517	517	the employee is criminally responsible for the offense and is
518	518	subject to prosecution.
519	519	(c) An offense under this section is a Class C misdemeanor.
520	520	(d) It is a defense to prosecution under Subsection (a)(1)
521	521	that the person to whom the cannabis or cannabis products were sold
522	522	or given presented to the defendant apparently valid proof of
523	523	identification.
524	524	(e) A proof of identification satisfies the requirements of
525	525	Subsection (d) if it contains a physical description and photograph
526	526	consistent with the person's appearance, purports to establish that
527	527	the person is 21 years of age or older, and was issued by a
528	528	governmental agency. The proof of identification may include a
529	529	driver's license issued by this state or another state, a passport,
530	530	or an identification card issued by a state or the federal
531	531	government.
532	532	SECTION 2. Section 122.103(c), Agriculture Code, is amended
533	533	to read as follows:
534	534	(c) A qualified applicant who along with the application
535	535	submits proof to the department that the applicant holds a license
536	536	under Chapter 487 or 491, Health and Safety Code, is not required to
537	537	pay an application fee, and the department shall issue the license
538	538	to the applicant within the time prescribed by Subsection (b).
539	539	SECTION 3. Section 411.0891(a), Government Code, is amended
540	540	to read as follows:
541	541	(a) Subject to Section 411.087, the department is
542	542	authorized to obtain and use criminal history record information
543	543	maintained by the Federal Bureau of Investigation or the department
544	544	that relates to a person who:
545	545	(1) is an applicant for or holds a registration issued
546	546	by the director under Subchapter C, Chapter 481, Health and Safety
547	547	Code, that authorizes the person to manufacture, distribute,
548	548	analyze, or conduct research with a controlled substance;
549	549	(2) is an applicant for or holds a registration issued
550	550	by the department under Chapter 487, Health and Safety Code, to be a
551	551	director, manager, or employee of a dispensing organization, as
552	552	defined by Section 487.001, Health and Safety Code;
553	553	(2-a) is an applicant for or holds a license issued
554	554	under Chapter 491, Health and Safety Code, to be a cannabis grower,
555	555	cannabis establishment, cannabis secure transporter, or cannabis
556	556	testing facility, as defined by Section 491.0001, Health and Safety
557	557	Code;
558	558	(3) is an applicant for or holds an authorization
559	559	issued by the department under Section 521.2476, Transportation
560	560	Code, to do business in this state as a vendor of ignition interlock
561	561	devices;
562	562	(4) is an applicant for or holds certification by the
563	563	department as an inspection station or an inspector under
564	564	Subchapter G, Chapter 548, Transportation Code, holds an inspection
565	565	station or inspector certificate issued under that subchapter, or
566	566	is the owner of an inspection station operating under that chapter;
567	567	or
568	568	(5) is an applicant for or holds a certificate of
569	569	registration issued by the department under Chapter 1956,
570	570	Occupations Code, to act as a metal recycling entity.
571	571	SECTION 4. Section 411.502, Government Code, is amended to
572	572	read as follows:
573	573	Sec. 411.502. APPLICABILITY. This subchapter applies to a
574	574	program, and persons regulated under the program, administered by
575	575	the department under the following laws, including rules adopted
576	576	under those laws:
577	577	(1) Section 411.0625;
578	578	(2) Chapter 487, Health and Safety Code;
579	579	(2-a) Chapter 491, Health and Safety Code;
580	580	(3) Chapter 1702, Occupations Code;
581	581	(4) Chapter 1956, Occupations Code;
582	582	(5) Section 521.2476, Transportation Code; and
583	583	(6) Subchapter G, Chapter 548, Transportation Code.
584	584	SECTION 5. Section 443.202(a), Health and Safety Code, is
585	585	amended to read as follows:
586	586	(a) This section does not apply to low-THC cannabis
587	587	regulated under Chapter 487 or cannabis regulated under Chapter
588	588	491.
589	589	SECTION 6. Section 443.2025(a), Health and Safety Code, is
590	590	amended to read as follows:
591	591	(a) This section does not apply to low-THC cannabis
592	592	regulated under Chapter 487 or cannabis regulated under Chapter
593	593	491.
594	594	SECTION 7. Section 481.062, Health and Safety Code, is
595	595	amended to read as follows:
596	596	Sec. 481.062. EXEMPTIONS. (a) The following persons are
597	597	not required to register and may possess a controlled substance
598	598	under this chapter [without registering with the Federal Drug
599	599	Enforcement Administration]:
600	600	(1) an agent or employee of a registered manufacturer,
601	601	distributor, analyzer, or dispenser of the controlled substance
602	602	[who is registered with the Federal Drug Enforcement Administration
603	603	and] acting in the usual course of business or employment;
604	604	(2) a common or contract carrier, a warehouseman, or
605	605	an employee of a carrier or warehouseman whose possession of the
606	606	controlled substance is in the usual course of business or
607	607	employment;
608	608	(3) an ultimate user or a person in possession of the
609	609	controlled substance under a lawful order of a practitioner or in
610	610	lawful possession of the controlled substance if it is listed in
611	611	Schedule V;
612	612	(4) an officer or employee of this state, another
613	613	state, a political subdivision of this state or another state, or
614	614	the United States who is lawfully engaged in the enforcement of a
615	615	law relating to a controlled substance or drug or to a customs law
616	616	and authorized to possess the controlled substance in the discharge
617	617	of the person's official duties;
618	618	(5) if the substance is tetrahydrocannabinol or one of
619	619	its derivatives:
620	620	(A) a Department of State Health Services
621	621	official, a medical school researcher, or a research program
622	622	participant possessing the substance as authorized under
623	623	Subchapter G; or
624	624	(B) a practitioner or an ultimate user possessing
625	625	the substance as a participant in a federally approved therapeutic
626	626	research program that the commissioner has reviewed and found, in
627	627	writing, to contain a medically responsible research protocol; [or]
628	628	(6) a dispensing organization licensed under Chapter
629	629	487 that possesses low-THC cannabis;
630	630	(7) a cannabis grower, cannabis establishment,
631	631	cannabis secure transporter, or cannabis testing facility licensed
632	632	under Chapter 491 that possesses cannabis or cannabis products; or
633	633	(8) a person who possesses cannabis or cannabis
634	634	products in accordance with Chapter 491.
635	635	(b) In this section, "cannabis" and "cannabis product" have
636	636	the meanings assigned to those terms by Section 491.0001.
637	637	SECTION 8. Section 481.111, Health and Safety Code, is
638	638	amended by adding Subsections (g) and (h) to read as follows:
639	639	(g) Sections 481.113, 481.116, 481.120, 481.121, and
640	640	481.125 do not apply to a person who engages in the acquisition,
641	641	possession, production, processing, cultivation, delivery,
642	642	transportation, disposal, transfer, or use of a raw material used
643	643	in or by-product created by the production or cultivation of
644	644	cannabis or cannabis products if the conduct is expressly
645	645	authorized by Subchapter B, Chapter 491.
646	646	(h) For purposes of Subsection (g), "cannabis" and
647	647	"cannabis product" have the meanings assigned to those terms by
648	648	Section 491.0001.
649	649	SECTION 9. Section 551.004, Occupations Code, is amended by
650	650	amending Subsection (a) and adding Subsection (a-1) to read as
651	651	follows:
652	652	(a) This subtitle does not apply to:
653	653	(1) a practitioner licensed by the appropriate state
654	654	board who supplies a patient of the practitioner with a drug in a
655	655	manner authorized by state or federal law and who does not operate a
656	656	pharmacy for the retailing of prescription drugs;
657	657	(2) a member of the faculty of a college of pharmacy
658	658	recognized by the board who is a pharmacist and who performs the
659	659	pharmacist's services only for the benefit of the college;
660	660	(3) a person who procures prescription drugs for
661	661	lawful research, teaching, or testing and not for resale;
662	662	(4) a home and community support services agency that
663	663	possesses a dangerous drug as authorized by Section 142.0061,
664	664	142.0062, or 142.0063, Health and Safety Code; [or]
665	665	(5) a dispensing organization[, as defined by Section
666	666	487.001, Health and Safety Code,] that cultivates, processes, and
667	667	dispenses low-THC cannabis, as authorized by Chapter 487, Health
668	668	and Safety Code, to a patient listed in the compassionate-use
669	669	registry established under that chapter;
670	670	(6) a cannabis grower, cannabis establishment,
671	671	cannabis secure transporter, or cannabis testing facility licensed
672	672	under Chapter 491, Health and Safety Code, that cultivates,
673	673	manufactures, processes, distributes, delivers, sells, tests,
674	674	transports, or dispenses cannabis or a cannabis product as
675	675	authorized by that chapter; or
676	676	(7) a person who transfers cannabis without
677	677	remuneration as authorized by Section 491.0051, Health and Safety
678	678	Code.
679	679	(a-1) For purposes of this section:
680	680	(1) "Cannabis," "cannabis establishment," "cannabis
681	681	grower," "cannabis product," "cannabis secure transporter," and
682	682	"cannabis testing facility" have the meanings assigned by Section
683	683	491.0001, Health and Safety Code.
684	684	(2) "Dispensing organization" and "low-THC cannabis"
685	685	have the meanings assigned by Section 487.001, Health and Safety
686	686	Code.
687	687	SECTION 10. Section 151.313(c), Tax Code, is amended to
688	688	read as follows:
689	689	(c) A product is a drug or medicine for purposes of this
690	690	section if the product:
691	691	(1) is intended for use in the diagnosis, cure,
692	692	mitigation, treatment, or prevention of disease, illness, injury,
693	693	or pain;
694	694	(2) is applied to the human body or is a product that a
695	695	human ingests or inhales;
696	696	(3) is not an appliance or device; [and]
697	697	(4) is not food; and
698	698	(5) is not cannabis or a cannabis product, as those
699	699	terms are defined by Section 491.0001, Health and Safety Code.
700	700	SECTION 11. Section 151.314, Tax Code, is amended by adding
701	701	Subsection (i) to read as follows:
702	702	(i) The exemption provided by Subsection (a) does not apply
703	703	to a cannabis product, as defined by Section 491.0001, Health and
704	704	Safety Code.
705	705	SECTION 12. Section 151.316, Tax Code, is amended by adding
706	706	Subsection (e) to read as follows:
707	707	(e) The exemption provided by Subsection (a)(5) does not
708	708	apply to cannabis, as defined by Section 491.0001, Health and
709	709	Safety Code.
710	710	SECTION 13. Subtitle E, Title 2, Tax Code, is amended by
711	711	adding Chapter 166 to read as follows:
712	712	CHAPTER 166. TAX ON CANNABIS AND RELATED PRODUCTS
713	713	Sec. 166.0001. DEFINITIONS. In this chapter, "cannabis"
714	714	and "cannabis product" have the meanings assigned by Section
715	715	491.0001, Health and Safety Code.
716	716	Sec. 166.0002. CANNABIS SALES TAX. (a) A tax is imposed on
717	717	each sale in this state of cannabis and cannabis products.
718	718	(b) The tax rate is 10 percent of the sales price of cannabis
719	719	or a cannabis product.
720	720	Sec. 166.0003. APPLICATION OF OTHER PROVISIONS OF CODE.
721	721	(a) The tax imposed under this chapter is in addition to the taxes
722	722	imposed under Chapter 151.
723	723	(b) Except as provided by this chapter:
724	724	(1) the tax imposed under this chapter is
725	725	administered, imposed, collected, and enforced in the same manner
726	726	as the taxes under Chapter 151 are administered, imposed,
727	727	collected, and enforced; and
728	728	(2) the provisions of Chapter 151 applicable to the
729	729	sales tax imposed under Subchapter C, Chapter 151, apply to the tax
730	730	imposed under this chapter.
731	731	Sec. 166.0004. DISPOSITION OF PROCEEDS. The comptroller
732	732	shall deposit the proceeds from the tax imposed under this chapter
733	733	as follows:
734	734	(1) 10 percent to the credit of the cannabis
735	735	regulation account under Section 491.0251, Health and Safety Code;
736	736	(2) 10 percent to the credit of the cannabis testing
737	737	and quality control account under Section 491.0252, Health and
738	738	Safety Code;
739	739	(3) 20 percent to the credit of the cannabis
740	740	establishment regulation and oversight local share account under
741	741	Section 491.0253, Health and Safety Code; and
742	742	(4) the remainder to the credit of the foundation
743	743	school fund.
744	744	SECTION 14. (a) Not later than July 1, 2024, the Texas
745	745	Commission of Licensing and Regulation shall adopt rules as
746	746	required to implement, administer, and enforce Chapter 491, Health
747	747	and Safety Code, as added by this Act.
748	748	(b) Not later than November 1, 2024, the Texas Department of
749	749	Licensing and Regulation shall begin licensing cannabis growers,
750	750	cannabis establishments, cannabis secure transporters, and
751	751	cannabis testing facilities in accordance with Chapter 491, Health
752	752	and Safety Code, as added by this Act, provided that the applicants
753	753	for a license have met all requirements for approval under Chapter
754	754	491, Health and Safety Code, as added by this Act.
755	755	SECTION 15. The changes in law made by this Act do not
756	756	affect tax liability accruing before the effective date of this
757	757	Act. That liability continues in effect as if this Act had not been
758	758	enacted, and the former law is continued in effect for the
759	759	collection of taxes due and for civil and criminal enforcement of
760	760	the liability for those taxes.
761	761	SECTION 16. This Act takes effect September 1, 2023.