Texas 2025 - 89th Regular

Texas House Bill HB1208 Compare Versions

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Old	New	Differences
1	1	89R530 LHC-D
2	2	By: González of Dallas H.B. No. 1208
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the regulation of the cultivation, manufacture,
10	10	processing, distribution, sale, testing, transportation, delivery,
11	11	transfer, possession, use, and taxation of cannabis and cannabis
12	12	products and local regulation of cannabis establishments;
13	13	authorizing the imposition of fees; requiring an occupational
14	14	license; creating a criminal offense; imposing a tax.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. Subtitle C, Title 6, Health and Safety Code, is
17	17	amended by adding Chapter 491 to read as follows:
18	18	CHAPTER 491. REGULATION OF CANNABIS
19	19	SUBCHAPTER A. GENERAL PROVISIONS
20	20	Sec. 491.0001. DEFINITIONS. In this chapter:
21	21	(1) "Adult" means an individual 21 years of age or
22	22	older.
23	23	(2) "Cannabis" means the plant Cannabis sativa L.,
24	24	whether growing or not, the seeds of that plant, and every compound,
25	25	manufacture, salt, derivative, mixture, or preparation of that
26	26	plant or its seeds. The term includes cannabis concentrate. The
27	27	term does not include:
28	28	(A) the mature stalks of the plant or fiber
29	29	produced from the stalks;
30	30	(B) oil or cake made from the seeds of the plant;
31	31	(C) a compound, manufacture, salt, derivative,
32	32	mixture, or preparation of the mature stalks, fiber, oil, or cake;
33	33	(D) the sterilized seeds of the plant that are
34	34	incapable of beginning germination;
35	35	(E) hemp, as that term is defined by Section
36	36	121.001, Agriculture Code; or
37	37	(F) a consumable hemp product, as that term is
38	38	defined by Section 443.001.
39	39	(3) "Cannabis concentrate" means the resin extracted
40	40	from a part of the plant Cannabis sativa L. or a compound,
41	41	manufacture, salt, derivative, mixture, or preparation of the
42	42	resin.
43	43	(4) "Cannabis establishment" means an entity licensed
44	44	by the department under this chapter to process and dispense
45	45	cannabis and cannabis products to an adult.
46	46	(5) "Cannabis grower" means an entity licensed by the
47	47	department to cultivate cannabis for sale and distribution to a
48	48	cannabis establishment.
49	49	(6) "Cannabis product" means a product that contains
50	50	cannabis and is intended for use or consumption by humans,
51	51	including as an edible product or as a topical product, ointment,
52	52	oil, or tincture. The term includes products that consist of
53	53	cannabis and other ingredients.
54	54	(7) "Cannabis-related drug paraphernalia" means
55	55	equipment, a product, or material that is used or intended for use
56	56	in:
57	57	(A) planting, propagating, cultivating, growing,
58	58	harvesting, manufacturing, compounding, converting, producing,
59	59	processing, preparing, testing, analyzing, packaging, repackaging,
60	60	storing, or containing cannabis or a cannabis product; or
61	61	(B) introducing cannabis or a cannabis product
62	62	into the human body.
63	63	(8) "Cannabis secure transporter" means an entity
64	64	licensed by the department under this chapter to transport cannabis
65	65	from a cannabis grower to a cannabis establishment.
66	66	(9) "Cannabis testing facility" means an entity
67	67	licensed by the department under this chapter to analyze the safety
68	68	and potency of cannabis and cannabis products.
69	69	(10) "Commission" means the Texas Commission of
70	70	Licensing and Regulation.
71	71	(11) "Cultivate" means to propagate, breed, grow,
72	72	harvest, dry, cure, or separate parts of the cannabis plant by
73	73	manual or mechanical means.
74	74	(12) "Department" means the Texas Department of
75	75	Licensing and Regulation.
76	76	(13) "Executive director" means the executive
77	77	director of the department.
78	78	(14) "Marihuana" has the meaning assigned by Section
79	79	481.002.
80	80	(15) "Process" means to separate or otherwise prepare
81	81	parts of the cannabis plant and to compound, blend, extract,
82	82	infuse, or otherwise make or prepare cannabis concentrate or
83	83	cannabis products.
84	84	SUBCHAPTER B. PROTECTIONS FROM LEGAL ACTION RELATED TO CANNABIS
85	85	Sec. 491.0051. AUTHORIZED CONDUCT: PERSONAL USE OF
86	86	CANNABIS. An adult is authorized under this chapter to:
87	87	(1) use, possess, and transport not more than 2.5
88	88	ounces of cannabis, except that not more than 15 grams of that
89	89	amount may be in the form of cannabis concentrate;
90	90	(2) transfer without remuneration to another adult not
91	91	more than 2.5 ounces of cannabis, except that not more than 15 grams
92	92	of that amount may be in the form of cannabis concentrate and
93	93	provided that the transfer is not advertised or promoted to the
94	94	public;
95	95	(3) possess, store, or process on the premises of the
96	96	adult's private residence not more than 10 ounces of cannabis,
97	97	provided that the amount in excess of 2.5 ounces is stored in a
98	98	container or area equipped with locks or other security devices
99	99	that restrict access to the container or area;
100	100	(4) use, possess, process, transport, or transfer to
101	101	another adult without remuneration an amount of cannabis products
102	102	specified by rule of the commission as the allowable amount of
103	103	cannabis for purposes of this subdivision; and
104	104	(5) use, possess, transport, or transfer to another
105	105	adult without remuneration cannabis-related drug paraphernalia.
106	106	Sec. 491.0052. AUTHORIZED CONDUCT: RETAIL CANNABIS
107	107	OPERATIONS. This chapter authorizes the conduct of:
108	108	(1) a cannabis grower director, manager, or employee
109	109	who, acting within the scope of the grower's license:
110	110	(A) cultivates cannabis or produces cannabis
111	111	products for sale or transfer to a cannabis establishment; and
112	112	(B) possesses cannabis or cannabis-related drug
113	113	paraphernalia;
114	114	(2) a cannabis establishment director, manager, or
115	115	employee who, acting within the scope of the establishment's
116	116	license, possesses cannabis or cannabis products or transfers or
117	117	sells cannabis, cannabis products, or cannabis-related drug
118	118	paraphernalia to an adult;
119	119	(3) a cannabis secure transporter director, manager,
120	120	or employee who, acting within the scope of the secure
121	121	transporter's license, transports, transfers, or delivers cannabis
122	122	or cannabis products from a cannabis grower to a cannabis
123	123	establishment; and
124	124	(4) a cannabis testing facility director, manager, or
125	125	employee who, acting within the scope of the facility's license,
126	126	possesses or tests cannabis, cannabis products, or
127	127	cannabis-related drug paraphernalia.
128	128	Sec. 491.0053. PROTECTION FROM LEGAL ACTION FOR AUTHORIZED
129	129	CONDUCT. (a) A person is not subject to arrest, prosecution,
130	130	forfeiture of property, or penalty in any manner or denial of any
131	131	right or privilege, including any civil penalty or disciplinary
132	132	action by a court or occupational or professional licensing board
133	133	or bureau solely due to conduct authorized under Section 491.0051
134	134	or 491.0052.
135	135	(b) The fact that a person engages in conduct authorized by
136	136	Section 491.0051 or 491.0052 does not in itself constitute grounds
137	137	for denying, limiting, or restricting conservatorship or
138	138	possession of or access to a child under Title 5, Family Code.
139	139	Sec. 491.0054. PROHIBITION OF CANNABIS ON PRIVATE PROPERTY;
140	140	EXCEPTION. (a) Except as otherwise provided by Subsection (b), a
141	141	person may prohibit or restrict the possession, consumption,
142	142	cultivation, distribution, processing, sale, or display of
143	143	cannabis or cannabis products on property the person owns,
144	144	occupies, or manages.
145	145	(b) A person may not prohibit a residential tenant under a
146	146	lease agreement from possessing cannabis, cannabis products, or
147	147	cannabis-related drug paraphernalia or consuming cannabis by means
148	148	other than smoking on the premises.
149	149	Sec. 491.0055. CONDUCT NOT AUTHORIZED UNDER THIS CHAPTER.
150	150	This chapter does not authorize the following conduct:
151	151	(1) operating a motor vehicle while intoxicated or
152	152	otherwise violating Chapter 49, Penal Code;
153	153	(2) smoking or otherwise consuming cannabis in:
154	154	(A) a motor vehicle while the vehicle is on a
155	155	public road;
156	156	(B) an aircraft, while the aircraft is in flight
157	157	or in a public area;
158	158	(C) a watercraft, while the watercraft is on a
159	159	public waterway; or
160	160	(D) a public place, unless:
161	161	(i) the public place is an area designated
162	162	by the applicable political subdivision as an area where using
163	163	cannabis is permissible; and
164	164	(ii) the area described by Subparagraph (i)
165	165	is not accessible to persons younger than 21 years of age;
166	166	(3) possessing or consuming cannabis or cannabis
167	167	products or possessing cannabis-related drug paraphernalia:
168	168	(A) on the premises of a public or private
169	169	child-care facility, prekindergarten, or primary or secondary
170	170	school;
171	171	(B) on a school bus that serves a facility or
172	172	school described by Paragraph (A); or
173	173	(C) on the premises of a correctional facility,
174	174	as defined by Article 18A.251, Code of Criminal Procedure, or a
175	175	civil commitment facility; or
176	176	(4) separating resin from the cannabis plant by butane
177	177	extraction or another method that uses a substance with a
178	178	flashpoint below 100 degrees Fahrenheit in a public place or motor
179	179	vehicle or within the curtilage of a residential structure.
180	180	SUBCHAPTER C. DUTIES OF COMMISSION AND DEPARTMENT
181	181	Sec. 491.0101. DUTIES OF DEPARTMENT. The department shall
182	182	administer this chapter.
183	183	Sec. 491.0102. RULES; FEES. (a) The commission shall adopt
184	184	all necessary rules for the administration and enforcement of this
185	185	chapter, including rules imposing fees under this chapter in
186	186	amounts sufficient to cover the cost of administering this chapter.
187	187	(b) The commission by rule shall set application and license
188	188	fees under this chapter in amounts sufficient to administer this
189	189	chapter and may annually adjust the fees for inflation.
190	190	(c) A fee collected under this chapter shall be deposited to
191	191	the credit of the cannabis regulation account established under
192	192	Section 491.0251.
193	193	(d) The commission shall adopt rules for the reasonable
194	194	regulation of cannabis growers and cannabis establishments,
195	195	including rules that:
196	196	(1) restrict the use of dangerous pesticides;
197	197	(2) regulate the packaging and labeling of cannabis
198	198	products available at a cannabis establishment;
199	199	(3) restrict advertising and display of cannabis and
200	200	cannabis products;
201	201	(4) require recordkeeping and monitoring to track the
202	202	transfer of cannabis and cannabis products between license holders;
203	203	and
204	204	(5) require security measures, provided that the
205	205	security measures do not restrict the cultivation of cannabis
206	206	outdoors or in greenhouses.
207	207	Sec. 491.0103. TESTING, PACKAGING, AND LABELING STANDARDS.
208	208	(a) The commission by rule shall establish standards for:
209	209	(1) the operation of cannabis testing facilities;
210	210	(2) the testing of cannabis and cannabis products; and
211	211	(3) packaging and labeling requirements for cannabis
212	212	and cannabis products.
213	213	(b) In establishing standards for packaging and labeling
214	214	requirements under Subsection (a)(3), the commission shall require
215	215	that:
216	216	(1) cannabis and cannabis products be packaged in
217	217	opaque, resealable, child-resistant packaging that does not
218	218	resemble and may not be easily confused with typical packaging for
219	219	commercially sold candy;
220	220	(2) cannabis and cannabis products be clearly labeled;
221	221	and
222	222	(3) the label for a cannabis product disclose the
223	223	amount of cannabis contained in that product.
224	224	Sec. 491.0104. SECURE TRANSPORTATION OF CANNABIS. The
225	225	commission by rule shall establish standards applicable to cannabis
226	226	secure transporters, including standards to ensure all cannabis
227	227	establishments are properly served.
228	228	Sec. 491.0105. CONFLICT OF INTEREST. (a) A person who is
229	229	involved in the implementation, administration, or enforcement of
230	230	this chapter as a member of the commission, an employee of the
231	231	department, or a consultant to the commission or the department may
232	232	not also hold a pecuniary interest in any entity licensed by the
233	233	department under this chapter.
234	234	(b) A person who holds a pecuniary interest in a cannabis
235	235	testing facility or a cannabis secure transporter who holds a
236	236	license issued under this chapter may not hold a pecuniary interest
237	237	in any entity that holds a cannabis establishment or cannabis
238	238	grower license issued under this chapter.
239	239	(c) A person may not hold a pecuniary interest in more than
240	240	five entities that are licensed under this chapter as a cannabis
241	241	grower, except as provided by commission rule.
242	242	Sec. 491.0106. ANNUAL REPORT. The executive director shall
243	243	annually submit to the governor, the executive commissioner of the
244	244	Health and Human Services Commission, and the legislature a report
245	245	providing the following information regarding licensing and
246	246	regulation under this chapter:
247	247	(1) the number of applications received for each class
248	248	of license under this chapter;
249	249	(2) the number of licenses issued for each class of
250	250	license under this chapter;
251	251	(3) demographic information pertaining to license
252	252	holders;
253	253	(4) a description of any fines imposed on a license
254	254	holder or disciplinary actions taken against a license holder by
255	255	the department; and
256	256	(5) a statement of revenues and expenses of the
257	257	department related to the implementation, administration, and
258	258	enforcement of this chapter.
259	259	SUBCHAPTER D. LICENSING
260	260	Sec. 491.0151. LICENSE REQUIRED. A person must hold a
261	261	license issued by the department under this chapter to operate as a
262	262	cannabis grower, cannabis establishment, cannabis secure
263	263	transporter, or cannabis testing facility.
264	264	Sec. 491.0152. QUALIFICATIONS FOR LICENSURE. The
265	265	commission by rule shall provide for each class of license issued
266	266	under this chapter qualifications for licensure that are
267	267	demonstrably related to the operations authorized and duties
268	268	imposed under that class of license.
269	269	Sec. 491.0153. APPLICATION. (a) A person may apply for an
270	270	initial or renewal license under this chapter by submitting a form
271	271	prescribed by the department along with the application fee in an
272	272	amount set by commission rule.
273	273	(b) The application must indicate the class of license
274	274	sought and include the name and address of the applicant, the name
275	275	and address of each of the applicant's directors, managers, and
276	276	employees, and any other information considered necessary by the
277	277	department to determine the applicant's eligibility for the
278	278	license.
279	279	Sec. 491.0154. ISSUANCE, RENEWAL, OR DENIAL OF LICENSE.
280	280	(a) The department shall issue or renew a license under this
281	281	chapter only if:
282	282	(1) the department determines the applicant meets the
283	283	qualifications for the class of license sought established under
284	284	Section 491.0152; and
285	285	(2) the applicant is in compliance with any applicable
286	286	local regulations.
287	287	(b) If the department denies the issuance or renewal of a
288	288	license under Subsection (a), the department shall give written
289	289	notice of the grounds for denial to the applicant.
290	290	(c) A license issued or renewed under this section expires
291	291	as determined by commission rule and the department in accordance
292	292	with Section 51.406, Occupations Code.
293	293	Sec. 491.0155. DUTY TO MAINTAIN QUALIFICATIONS. A license
294	294	holder shall maintain compliance at all times with the
295	295	qualifications for the applicable class of license established
296	296	under Section 491.0152.
297	297	Sec. 491.0156. LICENSE SUSPENSION OR REVOCATION. (a) The
298	298	department may at any time suspend or revoke a license issued under
299	299	this chapter if the department determines that the license holder
300	300	has not maintained the qualifications established under Section
301	301	491.0152 or has failed to comply with a duty imposed under this
302	302	chapter.
303	303	(b) The department shall give written notice to a license
304	304	holder of a license suspension or revocation under this section and
305	305	the grounds for the suspension or revocation. The notice must be
306	306	sent by certified mail, return receipt requested.
307	307	(c) After suspending or revoking a license issued under this
308	308	chapter, the department shall notify the Department of Public
309	309	Safety. The public safety director of the Department of Public
310	310	Safety may seize or place under seal all cannabis, cannabis
311	311	products, and cannabis-related drug paraphernalia owned or
312	312	possessed by the license holder. If the license is revoked, a
313	313	disposition may not be made of the seized or sealed cannabis,
314	314	cannabis products, or cannabis-related drug paraphernalia until
315	315	the time for administrative appeal of the order has elapsed or until
316	316	all appeals have been concluded. When a revocation order becomes
317	317	final, all cannabis, cannabis products, and cannabis-related drug
318	318	paraphernalia may be forfeited to the state as provided under
319	319	Subchapter E, Chapter 481.
320	320	(d) Chapter 2001, Government Code, applies to a proceeding
321	321	under this section.
322	322	Sec. 491.0157. CRIMINAL HISTORY BACKGROUND CHECK. (a) In
323	323	addition to satisfying the other requirements provided by
324	324	commission rule under this chapter, an applicant for a license
325	325	under this chapter must submit to the department a complete and
326	326	legible set of fingerprints, on a form prescribed by the
327	327	commission, for the purpose of obtaining criminal history record
328	328	information from the Department of Public Safety and the Federal
329	329	Bureau of Investigation.
330	330	(b) The department may deny a license to an applicant who
331	331	does not comply with the requirement of Subsection (a). Issuance of
332	332	a license by the department is conditioned on the department
333	333	obtaining the applicant's criminal history record information
334	334	under this section.
335	335	(c) The commission by rule shall establish criteria for
336	336	determining whether a person passes the criminal history background
337	337	check for purposes of this section. The rules adopted under this
338	338	section may not disqualify a person for licensure solely for a
339	339	conviction of an offense that involves the possession of marihuana
340	340	or the delivery of marihuana to a person 18 years of age or older.
341	341	SUBCHAPTER E. DUTIES OF LICENSE HOLDERS
342	342	Sec. 491.0201. DUTIES RELATING TO DISPENSING CANNABIS OR
343	343	CANNABIS PRODUCTS. Before dispensing cannabis or cannabis products
344	344	to an adult, a cannabis establishment must make reasonable efforts
345	345	to verify that:
346	346	(1) the person receiving the cannabis or cannabis
347	347	product is an adult;
348	348	(2) the cannabis or cannabis product complies with
349	349	department testing and labeling rules; and
350	350	(3) the amount dispensed is not greater than the
351	351	amount of cannabis or cannabis product allowed for personal use as
352	352	provided by Section 491.0051.
353	353	Sec. 491.0202. DUTIES RELATING TO SECURITY. (a) A license
354	354	holder shall ensure that the cultivation, processing, sale, or
355	355	display of cannabis, cannabis products, and cannabis-related drug
356	356	paraphernalia is not visible from a public place without the use of
357	357	optical aids or aircraft.
358	358	(b) A license holder may not cultivate, process, store, or
359	359	sell cannabis, cannabis products, or cannabis-related drug
360	360	paraphernalia at a location other than the physical address
361	361	approved by the department for the establishment under the license
362	362	issued to the establishment under this chapter.
363	363	(c) A license holder shall adopt reasonable security
364	364	measures necessary to restrict access to areas where cannabis,
365	365	cannabis products, or cannabis-related drug paraphernalia are
366	366	stored and to prevent theft of cannabis, cannabis products, and
367	367	cannabis-related drug paraphernalia.
368	368	Sec. 491.0203. LICENSE HOLDER OPERATIONS. (a) A license
369	369	holder may not employ or otherwise accept the services of a person
370	370	younger than 21 years of age.
371	371	(b) A cannabis establishment may not sell tobacco products,
372	372	as defined by Section 155.001, Tax Code.
373	373	Sec. 491.0204. MONTHLY SALES REPORT. A cannabis
374	374	establishment shall monthly submit a report to the comptroller
375	375	specifying the amount of cannabis sold, the number of cannabis
376	376	products sold, the number and types of cannabis-related drug
377	377	paraphernalia sold, and the amount of money collected in sales by
378	378	the establishment during the preceding month.
379	379	SUBCHAPTER F. FUNDING FOR REGULATION, OVERSIGHT, TESTING, AND
380	380	QUALITY CONTROL
381	381	Sec. 491.0251. CANNABIS REGULATION ACCOUNT. (a) The
382	382	cannabis regulation account is an account in the general revenue
383	383	fund administered by the department.
384	384	(b) The account consists of:
385	385	(1) money deposited to the credit of the account under
386	386	Section 166.0004, Tax Code; and
387	387	(2) fees deposited to the credit of the account under
388	388	Section 491.0102.
389	389	(c) Money in the account may be appropriated only to the
390	390	department for implementing and administering this chapter.
391	391	Sec. 491.0252. CANNABIS TESTING AND QUALITY CONTROL
392	392	ACCOUNT. (a) The cannabis testing and quality control account is
393	393	an account in the general revenue fund administered by the
394	394	Department of Public Safety.
395	395	(b) The account consists of money deposited to the credit of
396	396	the account under Section 166.0004, Tax Code.
397	397	(c) Money in the account may be appropriated only to the
398	398	Department of Public Safety for monitoring compliance with testing
399	399	and quality control requirements imposed on license holders by this
400	400	chapter or by commission rules adopted under this chapter.
401	401	Sec. 491.0253. CANNABIS ESTABLISHMENT REGULATION AND
402	402	OVERSIGHT LOCAL SHARE ACCOUNT; PAYMENT FROM ACCOUNT. (a) In this
403	403	section:
404	404	(1) "Account" means the cannabis establishment
405	405	regulation and oversight local share account created under this
406	406	section.
407	407	(2) "Fiscal year" means the fiscal year of a
408	408	qualifying local government.
409	409	(3) "Qualifying local government" means a
410	410	municipality or county in which at least one cannabis establishment
411	411	is located during any portion of the applicable fiscal year.
412	412	(b) The cannabis establishment regulation and oversight
413	413	local share account is an account in the general revenue fund
414	414	administered by the comptroller.
415	415	(c) The account consists of money deposited to the credit of
416	416	the account under Section 166.0004, Tax Code.
417	417	(d) Money in the account may be used by the comptroller only
418	418	to make a cannabis establishment regulation assistance payment to a
419	419	qualifying local government in the manner provided by this section.
420	420	(e) To serve the state purpose of ensuring that local
421	421	governments in which cannabis establishments are located may
422	422	effectively participate in the regulation and oversight of those
423	423	establishments, a qualifying local government is entitled to a
424	424	cannabis establishment regulation assistance payment from the
425	425	state for each fiscal year that the local government is a qualifying
426	426	local government.
427	427	(f) Except as provided by Subsection (j), the amount of the
428	428	cannabis establishment regulation assistance payment to which a
429	429	qualifying local government is entitled for a fiscal year is equal
430	430	to the cost incurred by the local government to enforce regulations
431	431	adopted under Subchapter G.
432	432	(g) Not later than April 1 of the year following the end of a
433	433	fiscal year for which a qualifying local government is entitled to a
434	434	cannabis establishment regulation assistance payment, the
435	435	qualifying local government may submit an application to the
436	436	comptroller to receive a cannabis establishment regulation
437	437	assistance payment for that fiscal year. The application must be
438	438	made on a form prescribed by the comptroller. The comptroller may
439	439	require the qualifying local government to submit any information
440	440	the comptroller needs to determine the amount of the cannabis
441	441	establishment regulation assistance payment to which the
442	442	qualifying local government is entitled.
443	443	(h) A qualifying local government that does not submit an
444	444	application to the comptroller by the date prescribed by Subsection
445	445	(g) is not entitled to a cannabis establishment regulation
446	446	assistance payment for the fiscal year for which that deadline
447	447	applies.
448	448	(i) The comptroller shall review each application by a local
449	449	government to determine whether the local government is entitled to
450	450	a cannabis establishment regulation assistance payment. If the
451	451	comptroller determines that the local government is entitled to the
452	452	payment, the comptroller shall remit the payment using available
453	453	money in the account to the qualifying local government not later
454	454	than the 30th day after the date the application for the payment is
455	455	made.
456	456	(j) If at the time a cannabis establishment regulation
457	457	assistance payment must be remitted to a qualifying local
458	458	government under Subsection (i) the comptroller determines the
459	459	available amount in the account is insufficient to make the
460	460	payment, the comptroller may reduce the amount of the payment to the
461	461	qualifying local government. If more than one payment must be
462	462	remitted at a time when the available amount in the account is
463	463	insufficient to make those payments, the comptroller shall make
464	464	reduced payments to each qualifying local government. The
465	465	comptroller shall allocate the reductions in the amount of the
466	466	payments in a manner that is proportionate to the number of cannabis
467	467	establishments in each qualifying local government.
468	468	(k) The comptroller shall adopt rules necessary to
469	469	implement this section.
470	470	SUBCHAPTER G. LOCAL REGULATION AND OVERSIGHT
471	471	Sec. 491.0301. DEFINITION. In this subchapter, "health
472	472	authority" has the meaning assigned by Section 431.002.
473	473	Sec. 491.0302. LOCAL AUTHORIZATION REQUIRED. A license
474	474	holder under this chapter may not operate in a county or
475	475	municipality without an order or ordinance adopted by the county or
476	476	municipality, as applicable, authorizing the operation of cannabis
477	477	growers, cannabis establishments, cannabis secure transporters, or
478	478	cannabis testing facilities in the county or municipality.
479	479	Sec. 491.0303. LOCAL REGULATION. A county or municipality
480	480	that authorizes the operation of cannabis growers, cannabis
481	481	establishments, or cannabis testing facilities in the county or
482	482	municipality may adopt regulations consistent with this chapter
483	483	governing the hours of operation, location, manner of conducting
484	484	business, and number of cannabis growers, cannabis establishments,
485	485	cannabis secure transporters, or cannabis testing facilities.
486	486	Sec. 491.0304. PUBLIC HEALTH INSPECTIONS. A health
487	487	authority may, on presenting appropriate credentials to the license
488	488	holder or employee of the cannabis establishment:
489	489	(1) enter at reasonable times the premises of a
490	490	cannabis establishment;
491	491	(2) enter a vehicle being used to transport cannabis;
492	492	or
493	493	(3) inspect at reasonable times, within reasonable
494	494	limits, and in a reasonable manner, the establishment or vehicle
495	495	and all equipment, finished and unfinished materials, containers,
496	496	and labeling of any item.
497	497	Sec. 491.0305. COMPLAINTS. (a) A county, municipality, or
498	498	health authority, as applicable, shall maintain a record of any
499	499	complaints made regarding the operations of a cannabis
500	500	establishment.
501	501	(b) A county, municipality, or health authority, as
502	502	applicable, shall investigate a complaint or refer the complaint to
503	503	the department, as appropriate.
504	504	SUBCHAPTER H. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS PRODUCT
505	505	TO MINORS PROHIBITED
506	506	Sec. 491.0351. DEFINITION. In this subchapter, "minor"
507	507	means a person younger than 21 years of age.
508	508	Sec. 491.0352. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS
509	509	PRODUCT TO MINORS PROHIBITED; PROOF OF AGE REQUIRED. (a) A person
510	510	commits an offense if the person, under the authority of this
511	511	chapter:
512	512	(1) sells, gives, or causes to be sold or given
513	513	cannabis or cannabis products to a minor; or
514	514	(2) sells, gives, or causes to be sold or given
515	515	cannabis or cannabis products to another person who intends to
516	516	deliver the cannabis or cannabis products to a minor.
517	517	(b) If an offense under this section occurs in connection
518	518	with a sale by an employee of the owner of a cannabis establishment,
519	519	the employee is criminally responsible for the offense and is
520	520	subject to prosecution.
521	521	(c) An offense under this section is a Class C misdemeanor.
522	522	(d) It is a defense to prosecution under Subsection (a)(1)
523	523	that the person to whom the cannabis or cannabis products were sold
524	524	or given presented to the defendant apparently valid proof of
525	525	identification.
526	526	(e) A proof of identification satisfies the requirements of
527	527	Subsection (d) if it contains a physical description and photograph
528	528	consistent with the person's appearance, purports to establish that
529	529	the person is 21 years of age or older, and was issued by a
530	530	governmental agency. The proof of identification may include a
531	531	driver's license issued by this state or another state, a passport,
532	532	or an identification card issued by a state or the federal
533	533	government.
534	534	SECTION 2. Section 122.103(c), Agriculture Code, is amended
535	535	to read as follows:
536	536	(c) A qualified applicant who along with the application
537	537	submits proof to the department that the applicant holds a license
538	538	under Chapter 487 or 491, Health and Safety Code, is not required to
539	539	pay an application fee, and the department shall issue the license
540	540	to the applicant within the time prescribed by Subsection (b).
541	541	SECTION 3. Section 411.093(a), Government Code, is amended
542	542	to read as follows:
543	543	(a) The Texas Department of Licensing and Regulation is
544	544	entitled to obtain criminal history record information as provided
545	545	by Subsection (b) that relates to:
546	546	(1) an applicant for or the holder of:
547	547	(A) a driver education instructor license under
548	548	Chapter 1001, Education Code;
549	549	(B) a license under Chapter 202, Occupations
550	550	Code;
551	551	(C) a license under Chapter 401, Occupations
552	552	Code;
553	553	(D) a license under Chapter 402, Occupations
554	554	Code; or
555	555	(E) an instructor license or motorcycle school
556	556	license under Chapter 662, Transportation Code;
557	557	(2) a person who is:
558	558	(A) an applicant for or the holder of a license
559	559	under Chapter 91, Labor Code; or
560	560	(B) a controlling person, as defined by Chapter
561	561	91, Labor Code, of an entity described by Paragraph (A); [or]
562	562	(3) a person who:
563	563	(A) is an applicant for or the holder of a license
564	564	under Chapter 455, Occupations Code; or
565	565	(B) has an interest described under Section
566	566	455.1525(e), Occupations Code, in an entity described by Paragraph
567	567	(A); or
568	568	(4) a person who is an applicant for or holds a license
569	569	issued under Chapter 491, Health and Safety Code, to be a cannabis
570	570	grower, cannabis establishment, cannabis secure transporter, or
571	571	cannabis testing facility, as defined by Section 491.0001, Health
572	572	and Safety Code.
573	573	SECTION 4. Section 443.202(a), Health and Safety Code, is
574	574	amended to read as follows:
575	575	(a) This section does not apply to low-THC cannabis
576	576	regulated under Chapter 487 or cannabis regulated under Chapter
577	577	491.
578	578	SECTION 5. Section 443.2025(a), Health and Safety Code, is
579	579	amended to read as follows:
580	580	(a) This section does not apply to low-THC cannabis
581	581	regulated under Chapter 487 or cannabis regulated under Chapter
582	582	491.
583	583	SECTION 6. Section 481.062, Health and Safety Code, is
584	584	amended to read as follows:
585	585	Sec. 481.062. EXEMPTIONS. (a) The following persons are
586	586	not required to register and may possess a controlled substance
587	587	under this chapter [without registering with the Federal Drug
588	588	Enforcement Administration]:
589	589	(1) an agent or employee of a registered manufacturer,
590	590	distributor, analyzer, or dispenser of the controlled substance
591	591	[who is registered with the Federal Drug Enforcement Administration
592	592	and] acting in the usual course of business or employment;
593	593	(2) a common or contract carrier, a warehouseman, or
594	594	an employee of a carrier or warehouseman whose possession of the
595	595	controlled substance is in the usual course of business or
596	596	employment;
597	597	(3) an ultimate user or a person in possession of the
598	598	controlled substance under a lawful order of a practitioner or in
599	599	lawful possession of the controlled substance if it is listed in
600	600	Schedule V;
601	601	(4) an officer or employee of this state, another
602	602	state, a political subdivision of this state or another state, or
603	603	the United States who is lawfully engaged in the enforcement of a
604	604	law relating to a controlled substance or drug or to a customs law
605	605	and authorized to possess the controlled substance in the discharge
606	606	of the person's official duties;
607	607	(5) if the substance is tetrahydrocannabinol or one of
608	608	its derivatives:
609	609	(A) a Department of State Health Services
610	610	official, a medical school researcher, or a research program
611	611	participant possessing the substance as authorized under
612	612	Subchapter G; or
613	613	(B) a practitioner or an ultimate user possessing
614	614	the substance as a participant in a federally approved therapeutic
615	615	research program that the commissioner has reviewed and found, in
616	616	writing, to contain a medically responsible research protocol; [or]
617	617	(6) a dispensing organization licensed under Chapter
618	618	487 that possesses low-THC cannabis;
619	619	(7) a cannabis grower, cannabis establishment,
620	620	cannabis secure transporter, or cannabis testing facility licensed
621	621	under Chapter 491 that possesses cannabis or cannabis products; or
622	622	(8) a person who possesses cannabis or cannabis
623	623	products in accordance with Chapter 491.
624	624	(b) In this section, "cannabis" and "cannabis product" have
625	625	the meanings assigned to those terms by Section 491.0001.
626	626	SECTION 7. Section 481.111, Health and Safety Code, is
627	627	amended by adding Subsections (g) and (h) to read as follows:
628	628	(g) Sections 481.113, 481.116, 481.120, 481.121, and
629	629	481.125 do not apply to a person who engages in the acquisition,
630	630	possession, production, processing, cultivation, delivery,
631	631	transportation, disposal, transfer, or use of a raw material used
632	632	in or by-product created by the production or cultivation of
633	633	cannabis or cannabis products if the conduct is expressly
634	634	authorized by Subchapter B, Chapter 491.
635	635	(h) For purposes of Subsection (g), "cannabis" and
636	636	"cannabis product" have the meanings assigned to those terms by
637	637	Section 491.0001.
638	638	SECTION 8. Section 551.004, Occupations Code, is amended by
639	639	amending Subsection (a) and adding Subsection (a-1) to read as
640	640	follows:
641	641	(a) This subtitle does not apply to:
642	642	(1) a practitioner licensed by the appropriate state
643	643	board who supplies a patient of the practitioner with a drug in a
644	644	manner authorized by state or federal law and who does not operate a
645	645	pharmacy for the retailing of prescription drugs;
646	646	(2) a member of the faculty of a college of pharmacy
647	647	recognized by the board who is a pharmacist and who performs the
648	648	pharmacist's services only for the benefit of the college;
649	649	(3) a person who procures prescription drugs for
650	650	lawful research, teaching, or testing and not for resale;
651	651	(4) a home and community support services agency that
652	652	possesses a dangerous drug as authorized by Section 142.0061,
653	653	142.0062, or 142.0063, Health and Safety Code; [or]
654	654	(5) a dispensing organization[, as defined by Section
655	655	487.001, Health and Safety Code,] that cultivates, processes, and
656	656	dispenses low-THC cannabis, as authorized by Chapter 487, Health
657	657	and Safety Code, to a patient listed in the compassionate-use
658	658	registry established under that chapter;
659	659	(6) a cannabis grower, cannabis establishment,
660	660	cannabis secure transporter, or cannabis testing facility licensed
661	661	under Chapter 491, Health and Safety Code, that cultivates,
662	662	manufactures, processes, distributes, delivers, sells, tests,
663	663	transports, or dispenses cannabis or a cannabis product as
664	664	authorized by that chapter; or
665	665	(7) a person who transfers cannabis without
666	666	remuneration as authorized by Section 491.0051, Health and Safety
667	667	Code.
668	668	(a-1) For purposes of this section:
669	669	(1) "Cannabis," "cannabis establishment," "cannabis
670	670	grower," "cannabis product," "cannabis secure transporter," and
671	671	"cannabis testing facility" have the meanings assigned by Section
672	672	491.0001, Health and Safety Code.
673	673	(2) "Dispensing organization" and "low-THC cannabis"
674	674	have the meanings assigned by Section 487.001, Health and Safety
675	675	Code.
676	676	SECTION 9. Section 151.313(c), Tax Code, is amended to read
677	677	as follows:
678	678	(c) A product is a drug or medicine for purposes of this
679	679	section if the product:
680	680	(1) is intended for use in the diagnosis, cure,
681	681	mitigation, treatment, or prevention of disease, illness, injury,
682	682	or pain;
683	683	(2) is applied to the human body or is a product that a
684	684	human ingests or inhales;
685	685	(3) is not an appliance or device; [and]
686	686	(4) is not food; and
687	687	(5) is not cannabis or a cannabis product, as those
688	688	terms are defined by Section 491.0001, Health and Safety Code.
689	689	SECTION 10. Section 151.314, Tax Code, is amended by adding
690	690	Subsection (i) to read as follows:
691	691	(i) The exemption provided by Subsection (a) does not apply
692	692	to a cannabis product, as defined by Section 491.0001, Health and
693	693	Safety Code.
694	694	SECTION 11. Section 151.316, Tax Code, is amended by adding
695	695	Subsection (e) to read as follows:
696	696	(e) The exemption provided by Subsection (a)(5) does not
697	697	apply to cannabis, as defined by Section 491.0001, Health and
698	698	Safety Code.
699	699	SECTION 12. Subtitle E, Title 2, Tax Code, is amended by
700	700	adding Chapter 166 to read as follows:
701	701	CHAPTER 166. TAX ON CANNABIS AND RELATED PRODUCTS
702	702	Sec. 166.0001. DEFINITIONS. In this chapter, "cannabis"
703	703	and "cannabis product" have the meanings assigned by Section
704	704	491.0001, Health and Safety Code.
705	705	Sec. 166.0002. CANNABIS SALES TAX. (a) A tax is imposed on
706	706	each sale in this state of cannabis and cannabis products.
707	707	(b) The tax rate is 10 percent of the sales price of cannabis
708	708	or a cannabis product.
709	709	Sec. 166.0003. APPLICATION OF OTHER PROVISIONS OF CODE.
710	710	(a) The tax imposed under this chapter is in addition to the taxes
711	711	imposed under Chapter 151.
712	712	(b) Except as provided by this chapter:
713	713	(1) the tax imposed under this chapter is
714	714	administered, imposed, collected, and enforced in the same manner
715	715	as the taxes under Chapter 151 are administered, imposed,
716	716	collected, and enforced; and
717	717	(2) the provisions of Chapter 151 applicable to the
718	718	sales tax imposed under Subchapter C, Chapter 151, apply to the tax
719	719	imposed under this chapter.
720	720	Sec. 166.0004. DISPOSITION OF PROCEEDS. The comptroller
721	721	shall deposit the proceeds from the tax imposed under this chapter
722	722	as follows:
723	723	(1) 10 percent to the credit of the cannabis
724	724	regulation account under Section 491.0251, Health and Safety Code;
725	725	(2) 10 percent to the credit of the cannabis testing
726	726	and quality control account under Section 491.0252, Health and
727	727	Safety Code;
728	728	(3) 20 percent to the credit of the cannabis
729	729	establishment regulation and oversight local share account under
730	730	Section 491.0253, Health and Safety Code; and
731	731	(4) the remainder to the credit of the foundation
732	732	school fund.
733	733	SECTION 13. (a) Not later than July 1, 2026, the Texas
734	734	Commission of Licensing and Regulation shall adopt rules as
735	735	required to implement, administer, and enforce Chapter 491, Health
736	736	and Safety Code, as added by this Act.
737	737	(b) Not later than November 1, 2026, the Texas Department of
738	738	Licensing and Regulation shall begin licensing cannabis growers,
739	739	cannabis establishments, cannabis secure transporters, and
740	740	cannabis testing facilities in accordance with Chapter 491, Health
741	741	and Safety Code, as added by this Act, provided that the applicants
742	742	for a license have met all requirements for approval under Chapter
743	743	491, Health and Safety Code, as added by this Act.
744	744	SECTION 14. The changes in law made by this Act do not
745	745	affect tax liability accruing before the effective date of this
746	746	Act. That liability continues in effect as if this Act had not been
747	747	enacted, and the former law is continued in effect for the
748	748	collection of taxes due and for civil and criminal enforcement of
749	749	the liability for those taxes.
750	750	SECTION 15. This Act takes effect September 1, 2025.