Texas 2025 - 89th Regular

Texas House Bill HB2975 Compare Versions

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Old	New	Differences
1	1	89R5126 LHC-D
2	2	By: Bucy H.B. No. 2975
3	3
4	4
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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 or registration; creating a criminal offense; imposing a
15	15	tax.
16	16	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17	17	SECTION 1. This Act may be cited as the Texas Regulation of
18	18	Cannabis Act.
19	19	SECTION 2. Subtitle C, Title 6, Health and Safety Code, is
20	20	amended by adding Chapter 491 to read as follows:
21	21	CHAPTER 491. REGULATION OF CANNABIS
22	22	SUBCHAPTER A. GENERAL PROVISIONS
23	23	Sec. 491.0001. DEFINITIONS. In this chapter:
24	24	(1) "Adult" means an individual 21 years of age or
25	25	older.
26	26	(2) "Cannabis" means the plant Cannabis sativa L.,
27	27	whether growing or not, the seeds of that plant, and every compound,
28	28	manufacture, salt, derivative, mixture, or preparation of that
29	29	plant or its seeds. The term includes cannabis concentrate. The
30	30	term does not include:
31	31	(A) the mature stalks of the plant or fiber
32	32	produced from the stalks;
33	33	(B) oil or cake made from the seeds of the plant;
34	34	(C) a compound, manufacture, salt, derivative,
35	35	mixture, or preparation of the mature stalks, fiber, oil, or cake;
36	36	(D) the sterilized seeds of the plant that are
37	37	incapable of beginning germination;
38	38	(E) hemp, as that term is defined by Section
39	39	121.001, Agriculture Code; or
40	40	(F) a consumable hemp product, as that term is
41	41	defined by Section 443.001.
42	42	(3) "Cannabis concentrate" means the resin extracted
43	43	from a part of the plant Cannabis sativa L. or a compound,
44	44	manufacture, salt, derivative, mixture, or preparation of the
45	45	resin.
46	46	(4) "Cannabis establishment" means an entity licensed
47	47	by the department under this chapter to process and dispense
48	48	cannabis and cannabis products to an adult.
49	49	(5) "Cannabis grower" means an entity licensed by the
50	50	department to cultivate cannabis for sale and distribution to a
51	51	cannabis establishment.
52	52	(6) "Cannabis product" means a product that contains
53	53	cannabis and is intended for use or consumption by humans,
54	54	including as an edible product or as a topical product, ointment,
55	55	oil, or tincture. The term includes products that consist of
56	56	cannabis and other ingredients.
57	57	(7) "Cannabis-related drug paraphernalia" means
58	58	equipment, a product, or material that is used or intended for use
59	59	in:
60	60	(A) planting, propagating, cultivating, growing,
61	61	harvesting, manufacturing, compounding, converting, producing,
62	62	processing, preparing, testing, analyzing, packaging, repackaging,
63	63	storing, or containing cannabis or a cannabis product; or
64	64	(B) introducing cannabis or a cannabis product
65	65	into the human body.
66	66	(8) "Cannabis secure transporter" means an entity
67	67	licensed by the department under this chapter to transport cannabis
68	68	from a cannabis grower to a cannabis establishment.
69	69	(9) "Cannabis testing facility" means an entity
70	70	licensed by the department under this chapter to analyze the safety
71	71	and potency of cannabis and cannabis products.
72	72	(10) "Commission" means the Texas Commission of
73	73	Licensing and Regulation.
74	74	(11) "Cultivate" means to propagate, breed, grow,
75	75	harvest, dry, cure, or separate parts of the cannabis plant by
76	76	manual or mechanical means.
77	77	(12) "Department" means the Texas Department of
78	78	Licensing and Regulation.
79	79	(13) "Executive director" means the executive
80	80	director of the department.
81	81	(14) "Marihuana" has the meaning assigned by Section
82	82	481.002.
83	83	(15) "Process" means to separate or otherwise prepare
84	84	parts of the cannabis plant and to compound, blend, extract,
85	85	infuse, or otherwise make or prepare cannabis concentrate or
86	86	cannabis products.
87	87	SUBCHAPTER B. PROTECTIONS FROM LEGAL ACTION RELATED TO CANNABIS
88	88	Sec. 491.0051. AUTHORIZED CONDUCT: PERSONAL USE OF
89	89	CANNABIS. An adult is authorized under this chapter to:
90	90	(1) use, possess, and transport not more than 2 ounces
91	91	of cannabis, except that not more than 15 grams of that amount may
92	92	be in the form of cannabis concentrate;
93	93	(2) transfer without remuneration to another adult not
94	94	more than 2 ounces of cannabis, except that not more than 15 grams
95	95	of that amount may be in the form of cannabis concentrate and
96	96	provided that the transfer is not advertised or promoted to the
97	97	public;
98	98	(3) cultivate for personal use not more than 12
99	99	cannabis plants in an area on the premises of the adult's private
100	100	residence, provided that the cultivation occurs in an enclosed area
101	101	that is:
102	102	(A) equipped with locks or other security devices
103	103	that restrict access to the area; and
104	104	(B) not visible from a public place without the
105	105	use of aircraft or optical aids;
106	106	(4) possess, store, or process on the premises of the
107	107	adult's private residence not more than:
108	108	(A) the amount of cannabis produced from cannabis
109	109	plants cultivated on the premises, provided that:
110	110	(i) not more than 12 cannabis plants are
111	111	possessed, cultivated, or processed on the premises at one time;
112	112	and
113	113	(ii) any amount of cannabis in excess of 2
114	114	ounces is stored in a container or area equipped with locks or other
115	115	security devices that restrict access to the contents of the
116	116	container or area; and
117	117	(B) 10 ounces of cannabis that were not produced
118	118	from cannabis plants cultivated on the premises, provided that the
119	119	amount in excess of 2 ounces is stored in a container or area
120	120	described by Paragraph (A)(ii);
121	121	(5) use, possess, process, transport, or transfer to
122	122	another adult without remuneration an amount of cannabis products
123	123	specified by rule of the commission as the allowable amount of
124	124	cannabis for purposes of this subdivision; and
125	125	(6) use, possess, transport, or transfer to another
126	126	adult without remuneration cannabis-related drug paraphernalia.
127	127	Sec. 491.0052. AUTHORIZED CONDUCT: RETAIL CANNABIS
128	128	OPERATIONS. This chapter authorizes the conduct of:
129	129	(1) a cannabis grower director, manager, or employee
130	130	who, acting within the scope of the grower's license:
131	131	(A) cultivates cannabis or produces cannabis
132	132	products for sale or transfer to a cannabis establishment; and
133	133	(B) possesses cannabis or cannabis-related drug
134	134	paraphernalia;
135	135	(2) a cannabis establishment director, manager, or
136	136	employee who, acting within the scope of the establishment's
137	137	license, possesses cannabis or cannabis products or transfers or
138	138	sells cannabis, cannabis products, or cannabis-related drug
139	139	paraphernalia to an adult;
140	140	(3) a cannabis secure transporter director, manager,
141	141	or employee who, acting within the scope of the secure
142	142	transporter's license, transports, transfers, or delivers cannabis
143	143	or cannabis products from a cannabis grower to a cannabis
144	144	establishment; and
145	145	(4) a cannabis testing facility director, manager, or
146	146	employee who, acting within the scope of the facility's license,
147	147	possesses or tests cannabis, cannabis products, or
148	148	cannabis-related drug paraphernalia.
149	149	Sec. 491.0053. PROTECTION FROM LEGAL ACTION FOR AUTHORIZED
150	150	CONDUCT. (a) A person is not subject to arrest, prosecution,
151	151	forfeiture of property, or penalty in any manner or denial of any
152	152	right or privilege, including any civil penalty or disciplinary
153	153	action by a court or occupational or professional licensing board
154	154	or bureau solely due to conduct authorized under Section 491.0051
155	155	or 491.0052.
156	156	(b) The fact that a person engages in conduct authorized by
157	157	Section 491.0051 or 491.0052 does not in itself constitute grounds
158	158	for denying, limiting, or restricting conservatorship or
159	159	possession of or access to a child under Title 5, Family Code.
160	160	Sec. 491.0054. REGULATION OF CANNABIS ON PRIVATE PROPERTY.
161	161	(a) Except as otherwise provided by Subsection (b), a person may
162	162	prohibit or restrict the possession, consumption, cultivation,
163	163	distribution, processing, sale, or display of cannabis or cannabis
164	164	products on property the person owns, occupies, or manages.
165	165	(b) A person may not prohibit a residential tenant under a
166	166	lease agreement from possessing cannabis, cannabis products, or
167	167	cannabis-related drug paraphernalia or consuming cannabis by means
168	168	other than smoking on the premises.
169	169	(c) A person who allows the consumption of cannabis or a
170	170	cannabis product at a place of business the person owns, occupies,
171	171	or manages:
172	172	(1) may not allow a person younger than 21 years of age
173	173	to enter the business; and
174	174	(2) must post a sign at each entrance to the business
175	175	stating that a person younger than 21 years of age is not allowed to
176	176	enter the business.
177	177	Sec. 491.0055. CONDUCT NOT AUTHORIZED UNDER THIS CHAPTER.
178	178	This chapter does not authorize the following conduct:
179	179	(1) operating a motor vehicle while intoxicated or
180	180	otherwise violating Chapter 49, Penal Code;
181	181	(2) smoking or otherwise consuming cannabis in:
182	182	(A) a motor vehicle while the vehicle is on a
183	183	public road;
184	184	(B) an aircraft, while the aircraft is in flight
185	185	or in a public area;
186	186	(C) a watercraft, while the watercraft is on a
187	187	public waterway;
188	188	(D) a public place, unless:
189	189	(i) the public place is an area designated
190	190	by the applicable political subdivision as an area where using
191	191	cannabis is permissible; and
192	192	(ii) the area described by Subparagraph (i)
193	193	is not accessible to persons younger than 21 years of age; or
194	194	(E) any place accessible to persons younger than
195	195	21 years of age;
196	196	(3) possessing or consuming cannabis or cannabis
197	197	products or possessing cannabis-related drug paraphernalia:
198	198	(A) on the premises of a public or private
199	199	child-care facility, prekindergarten, or primary or secondary
200	200	school;
201	201	(B) on a school bus that serves a facility or
202	202	school described by Paragraph (A); or
203	203	(C) on the premises of a correctional facility,
204	204	as defined by Article 18A.251, Code of Criminal Procedure, or a
205	205	civil commitment facility; or
206	206	(4) separating resin from the cannabis plant by butane
207	207	extraction or another method that uses a substance with a
208	208	flashpoint below 100 degrees Fahrenheit in a public place or motor
209	209	vehicle or within the curtilage of a residential structure.
210	210	SUBCHAPTER C. DUTIES OF COMMISSION AND DEPARTMENT
211	211	Sec. 491.0101. DUTIES OF DEPARTMENT. The department shall
212	212	administer this chapter.
213	213	Sec. 491.0102. RULES; FEES. (a) The commission shall adopt
214	214	all necessary rules for the administration and enforcement of this
215	215	chapter, including rules imposing fees under this chapter in
216	216	amounts sufficient to cover the cost of administering this chapter.
217	217	(b) The commission by rule shall set application and license
218	218	fees under this chapter in amounts sufficient to administer this
219	219	chapter and may annually adjust the fees for inflation.
220	220	(c) A fee collected under this chapter shall be deposited to
221	221	the credit of the cannabis regulation account established under
222	222	Section 491.0301.
223	223	(d) The commission shall adopt rules for the reasonable
224	224	regulation of cannabis growers and cannabis establishments,
225	225	including rules that:
226	226	(1) restrict the use of dangerous pesticides;
227	227	(2) regulate the packaging and labeling of cannabis
228	228	products available at a cannabis establishment;
229	229	(3) restrict advertising and display of cannabis and
230	230	cannabis products;
231	231	(4) restrict the maximum amount of
232	232	tetrahydrocannabinol that may be contained in a cannabis product
233	233	sold to a consumer;
234	234	(5) require recordkeeping and monitoring to track the
235	235	transfer of cannabis and cannabis products between license holders;
236	236	and
237	237	(6) require security measures, provided that the
238	238	security measures do not restrict the cultivation of cannabis
239	239	outdoors or in greenhouses.
240	240	Sec. 491.0103. TESTING, PACKAGING, AND LABELING STANDARDS.
241	241	(a) The commission by rule shall establish standards for:
242	242	(1) the operation of cannabis testing facilities;
243	243	(2) the testing of cannabis and cannabis products; and
244	244	(3) packaging and labeling requirements for cannabis
245	245	and cannabis products.
246	246	(b) In establishing standards for packaging and labeling
247	247	requirements under Subsection (a)(3), the commission shall require
248	248	that:
249	249	(1) cannabis and cannabis products be packaged in
250	250	opaque, resealable, child-resistant packaging that does not
251	251	resemble and may not be easily confused with typical packaging for
252	252	commercially sold candy;
253	253	(2) cannabis and cannabis products be clearly labeled;
254	254	and
255	255	(3) the label for a cannabis product disclose the
256	256	amount of cannabis contained in that product.
257	257	Sec. 491.0104. SECURE TRANSPORTATION OF CANNABIS. The
258	258	commission by rule shall establish standards applicable to cannabis
259	259	secure transporters, including standards to ensure all cannabis
260	260	establishments are properly served.
261	261	Sec. 491.0105. CONFLICT OF INTEREST. (a) A person who is
262	262	involved in the implementation, administration, or enforcement of
263	263	this chapter as a member of the commission, an employee of the
264	264	department, or a consultant to the commission or the department may
265	265	not also hold a pecuniary interest in any entity licensed by the
266	266	department under this chapter.
267	267	(b) A person who holds a pecuniary interest in a cannabis
268	268	testing facility or a cannabis secure transporter who holds a
269	269	license issued under this chapter may not hold a pecuniary interest
270	270	in any entity that holds a cannabis establishment or cannabis
271	271	grower license issued under this chapter.
272	272	(c) A person may not hold a pecuniary interest in more than
273	273	five entities that are licensed under this chapter as a cannabis
274	274	grower, except as provided by commission rule.
275	275	Sec. 491.0106. ANNUAL REPORT. The executive director shall
276	276	annually submit to the governor a report providing the following
277	277	information regarding licensing and regulation under this chapter:
278	278	(1) the number of applications received for each class
279	279	of license under this chapter;
280	280	(2) the number of licenses issued for each class of
281	281	license under this chapter;
282	282	(3) demographic information pertaining to license
283	283	holders;
284	284	(4) a description of any fines imposed on a license
285	285	holder or disciplinary actions taken against a license holder by
286	286	the department; and
287	287	(5) a statement of revenues and expenses of the
288	288	department related to the implementation, administration, and
289	289	enforcement of this chapter.
290	290	SUBCHAPTER D. LICENSING
291	291	Sec. 491.0151. LICENSE REQUIRED. A person must hold a
292	292	license issued by the department under this chapter to operate as a
293	293	cannabis grower, cannabis establishment, cannabis secure
294	294	transporter, or cannabis testing facility.
295	295	Sec. 491.0152. QUALIFICATIONS FOR LICENSURE. The
296	296	commission by rule shall provide for each class of license issued
297	297	under this chapter qualifications for licensure that are
298	298	demonstrably related to the operations authorized and duties
299	299	imposed under that class of license.
300	300	Sec. 491.0153. APPLICATION. (a) A person may apply for an
301	301	initial or renewal license under this chapter by submitting a form
302	302	prescribed by the department along with the application fee in an
303	303	amount set by commission rule.
304	304	(b) The application must indicate the class of license
305	305	sought and include the name and address of the applicant, the name
306	306	and address of each of the applicant's directors, managers, and
307	307	employees, and any other information considered necessary by the
308	308	department to determine the applicant's eligibility for the
309	309	license.
310	310	Sec. 491.0154. ISSUANCE, RENEWAL, OR DENIAL OF LICENSE.
311	311	(a) The department shall issue or renew a license under this
312	312	chapter only if:
313	313	(1) the department determines the applicant meets the
314	314	qualifications for the class of license sought established under
315	315	Section 491.0152; and
316	316	(2) the applicant is in compliance with any applicable
317	317	local regulations.
318	318	(b) If the department denies the issuance or renewal of a
319	319	license under Subsection (a), the department shall give written
320	320	notice of the grounds for denial to the applicant.
321	321	(c) A license issued or renewed under this section expires
322	322	as determined by commission rule and the department in accordance
323	323	with Section 51.406, Occupations Code.
324	324	Sec. 491.0155. DUTY TO MAINTAIN QUALIFICATIONS. A license
325	325	holder shall maintain compliance at all times with the
326	326	qualifications for the applicable class of license established
327	327	under Section 491.0152.
328	328	Sec. 491.0156. LICENSE SUSPENSION OR REVOCATION. (a) The
329	329	department may at any time suspend or revoke a license issued under
330	330	this chapter if the department determines that the license holder
331	331	has not maintained the qualifications established under Section
332	332	491.0152 or has failed to comply with a duty imposed under this
333	333	chapter.
334	334	(b) The department shall give written notice to a license
335	335	holder of a license suspension or revocation under this section and
336	336	the grounds for the suspension or revocation. The notice must be
337	337	sent by certified mail, return receipt requested.
338	338	(c) After suspending or revoking a license issued under this
339	339	chapter, the department shall notify the Department of Public
340	340	Safety. The public safety director of the Department of Public
341	341	Safety may seize or place under seal all cannabis, cannabis
342	342	products, and cannabis-related drug paraphernalia owned or
343	343	possessed by the license holder. If the license is revoked, a
344	344	disposition may not be made of the seized or sealed cannabis,
345	345	cannabis products, or cannabis-related drug paraphernalia until
346	346	the time for administrative appeal of the order has elapsed or until
347	347	all appeals have been concluded. When a revocation order becomes
348	348	final, all cannabis, cannabis products, and cannabis-related drug
349	349	paraphernalia may be forfeited to the state as provided under
350	350	Subchapter E, Chapter 481.
351	351	(d) Chapter 2001, Government Code, applies to a proceeding
352	352	under this section.
353	353	Sec. 491.0157. CRIMINAL HISTORY BACKGROUND CHECK. (a) In
354	354	addition to satisfying the other requirements provided by
355	355	commission rule under this chapter, an applicant for a license
356	356	under this chapter must submit to the department a complete and
357	357	legible set of fingerprints, on a form prescribed by the
358	358	commission, for the purpose of obtaining criminal history record
359	359	information from the Department of Public Safety and the Federal
360	360	Bureau of Investigation.
361	361	(b) The department may deny a license to an applicant who
362	362	does not comply with the requirement of Subsection (a). Issuance of
363	363	a license by the department is conditioned on the department
364	364	obtaining the applicant's criminal history record information
365	365	under this section.
366	366	(c) The commission by rule shall establish criteria for
367	367	determining whether a person passes the criminal history background
368	368	check for purposes of this section. The rules adopted under this
369	369	section may not disqualify a person for licensure solely for a
370	370	conviction of an offense that involves the possession of marihuana
371	371	or the delivery of marihuana to a person 18 years of age or older.
372	372	SUBCHAPTER E. DUTIES OF LICENSE HOLDERS
373	373	Sec. 491.0201. DUTIES RELATING TO DISPENSING CANNABIS OR
374	374	CANNABIS PRODUCTS. Before dispensing cannabis or cannabis products
375	375	to an adult, a cannabis establishment must make reasonable efforts
376	376	to verify that:
377	377	(1) the person receiving the cannabis or cannabis
378	378	product is an adult, including by requiring the person receiving
379	379	the cannabis or cannabis product to present proof of identification
380	380	that satisfies the requirements of Section 491.0402(e) before
381	381	receiving the cannabis or product;
382	382	(2) the cannabis or cannabis product complies with
383	383	department testing and labeling rules; and
384	384	(3) the amount dispensed is not greater than the
385	385	amount of cannabis or cannabis product allowed for personal use as
386	386	provided by Section 491.0051.
387	387	Sec. 491.0202. DUTIES RELATING TO SECURITY. (a) A license
388	388	holder shall ensure that the cultivation, processing, sale, or
389	389	display of cannabis, cannabis products, and cannabis-related drug
390	390	paraphernalia is not visible from a public place without the use of
391	391	optical aids or aircraft.
392	392	(b) A license holder may not cultivate, process, store, or
393	393	sell cannabis, cannabis products, or cannabis-related drug
394	394	paraphernalia at a location other than the physical address
395	395	approved by the department for the establishment under the license
396	396	issued to the establishment under this chapter.
397	397	(c) A license holder shall adopt reasonable security
398	398	measures necessary to restrict access to areas where cannabis,
399	399	cannabis products, or cannabis-related drug paraphernalia are
400	400	stored and to prevent theft of cannabis, cannabis products, and
401	401	cannabis-related drug paraphernalia.
402	402	Sec. 491.0203. LICENSE HOLDER OPERATIONS. (a) A license
403	403	holder may not employ or otherwise accept the services of a person
404	404	younger than 21 years of age.
405	405	(b) A cannabis establishment may not sell tobacco products,
406	406	as defined by Section 155.001, Tax Code.
407	407	(c) A cannabis establishment may sell cannabis or cannabis
408	408	products only between the hours of 10 a.m. and 9 p.m. each day.
409	409	(d) A cannabis establishment:
410	410	(1) may not allow a person younger than 21 years of age
411	411	to enter the establishment; and
412	412	(2) must post a sign at each entrance to the
413	413	establishment stating that a person younger than 21 years of age is
414	414	not allowed to enter the establishment.
415	415	Sec. 491.0204. MONTHLY SALES REPORT. A cannabis
416	416	establishment shall monthly submit a report to the comptroller
417	417	specifying the amount of cannabis sold, the number of cannabis
418	418	products sold, the number and types of cannabis-related drug
419	419	paraphernalia sold, and the amount of money collected in sales by
420	420	the establishment during the preceding month.
421	421	SUBCHAPTER F. REGISTRATION OF CERTAIN INDIVIDUALS
422	422	Sec. 491.0251. REGISTRATION REQUIRED. (a) An individual
423	423	who is an employee of a cannabis establishment that dispenses
424	424	cannabis or a cannabis product must apply for and obtain a
425	425	registration under this section.
426	426	(b) An applicant for a registration under this section must:
427	427	(1) be at least 21 years of age;
428	428	(2) submit a complete set of fingerprints to the
429	429	department in the manner required by department rule;
430	430	(3) pass a fingerprint-based criminal history
431	431	background check as required by Section 491.0157; and
432	432	(4) submit to the department a fee in an amount
433	433	prescribed by department rule.
434	434	(c) A registration expires on the second anniversary of the
435	435	date of the registration's issuance, unless suspended or revoked
436	436	under rules adopted under this chapter.
437	437	SUBCHAPTER G. FUNDING FOR REGULATION AND OVERSIGHT
438	438	Sec. 491.0301. CANNABIS REGULATION ACCOUNT. (a) The
439	439	cannabis regulation account is an account in the general revenue
440	440	fund administered by the department.
441	441	(b) The account consists of fees deposited to the credit of
442	442	the account under Section 491.0102.
443	443	(c) Money in the account may be appropriated only to the
444	444	department for implementing and administering this chapter.
445	445	Sec. 491.0302. CANNABIS ESTABLISHMENT REGULATION AND
446	446	OVERSIGHT LOCAL SHARE ACCOUNT; PAYMENT FROM ACCOUNT. (a) In this
447	447	section:
448	448	(1) "Account" means the cannabis establishment
449	449	regulation and oversight local share account created under this
450	450	section.
451	451	(2) "Fiscal year" means the fiscal year of a
452	452	qualifying local government.
453	453	(3) "Qualifying local government" means a
454	454	municipality or county in which at least one cannabis establishment
455	455	is located during any portion of the applicable fiscal year.
456	456	(b) The cannabis establishment regulation and oversight
457	457	local share account is an account in the general revenue fund
458	458	administered by the comptroller.
459	459	(c) The account consists of money deposited to the credit of
460	460	the account under Section 166.0005, Tax Code.
461	461	(d) Money in the account may be used by the comptroller only
462	462	to make a cannabis establishment regulation assistance payment to a
463	463	qualifying local government in the manner provided by this section.
464	464	(e) To serve the state purpose of ensuring that local
465	465	governments in which cannabis establishments are located may
466	466	effectively participate in the regulation and oversight of those
467	467	establishments, a qualifying local government is entitled to a
468	468	cannabis establishment regulation assistance payment from the
469	469	state for each fiscal year that the local government is a qualifying
470	470	local government.
471	471	(f) Except as provided by Subsection (j), the amount of the
472	472	cannabis establishment regulation assistance payment to which a
473	473	qualifying local government is entitled for a fiscal year is equal
474	474	to the cost incurred by the local government to enforce regulations
475	475	adopted under Subchapter H.
476	476	(g) Not later than April 1 of the year following the end of a
477	477	fiscal year for which a qualifying local government is entitled to a
478	478	cannabis establishment regulation assistance payment, the
479	479	qualifying local government may submit an application to the
480	480	comptroller to receive a cannabis establishment regulation
481	481	assistance payment for that fiscal year. The application must be
482	482	made on a form prescribed by the comptroller. The comptroller may
483	483	require the qualifying local government to submit any information
484	484	the comptroller needs to determine the amount of the cannabis
485	485	establishment regulation assistance payment to which the
486	486	qualifying local government is entitled.
487	487	(h) A qualifying local government that does not submit an
488	488	application to the comptroller by the date prescribed by Subsection
489	489	(g) is not entitled to a cannabis establishment regulation
490	490	assistance payment for the fiscal year for which that deadline
491	491	applies.
492	492	(i) The comptroller shall review each application by a local
493	493	government to determine whether the local government is entitled to
494	494	a cannabis establishment regulation assistance payment. If the
495	495	comptroller determines that the local government is entitled to the
496	496	payment, the comptroller shall remit the payment using available
497	497	money in the account to the qualifying local government not later
498	498	than the 30th day after the date the application for the payment is
499	499	made.
500	500	(j) If at the time a cannabis establishment regulation
501	501	assistance payment must be remitted to a qualifying local
502	502	government under Subsection (i) the comptroller determines the
503	503	available amount in the account is insufficient to make the
504	504	payment, the comptroller may reduce the amount of the payment to the
505	505	qualifying local government. If more than one payment must be
506	506	remitted at a time when the available amount in the account is
507	507	insufficient to make those payments, the comptroller shall make
508	508	reduced payments to each qualifying local government. The
509	509	comptroller shall allocate the reductions in the amount of the
510	510	payments in a manner that is proportionate to the number of cannabis
511	511	establishments in each qualifying local government.
512	512	(k) The comptroller shall adopt rules necessary to
513	513	implement this section.
514	514	SUBCHAPTER H. LOCAL REGULATION AND OVERSIGHT
515	515	Sec. 491.0351. DEFINITION. In this subchapter, "health
516	516	authority" has the meaning assigned by Section 431.002.
517	517	Sec. 491.0352. PROHIBITED LOCAL REGULATION. A political
518	518	subdivision of this state may not enact, adopt, or enforce a rule,
519	519	ordinance, order, resolution, or other regulation that prohibits or
520	520	unreasonably restricts the cultivation, production, processing,
521	521	dispensing, transportation, or possession of cannabis or cannabis
522	522	products or the operation of a cannabis grower, cannabis
523	523	establishment, cannabis secure transporter, or cannabis testing
524	524	facility as authorized by this chapter.
525	525	Sec. 491.0353. PERMISSIBLE LOCAL REGULATION. A political
526	526	subdivision may adopt regulations consistent with this chapter
527	527	governing the hours of operation, location, manner of conducting
528	528	business, and number of cannabis growers, cannabis establishments,
529	529	or cannabis testing facilities.
530	530	Sec. 491.0354. PUBLIC HEALTH INSPECTIONS. A health
531	531	authority may, on presenting appropriate credentials to the license
532	532	holder or employee of the cannabis establishment:
533	533	(1) enter at reasonable times the premises of a
534	534	cannabis establishment;
535	535	(2) enter a vehicle being used to transport cannabis;
536	536	or
537	537	(3) inspect at reasonable times, within reasonable
538	538	limits, and in a reasonable manner the establishment or vehicle and
539	539	all equipment, finished and unfinished materials, containers, and
540	540	labeling of any item.
541	541	Sec. 491.0355. COMPLAINTS. (a) A political subdivision or
542	542	health authority shall maintain a record of any complaints made to
543	543	the political subdivision or health authority regarding the
544	544	operations of a cannabis establishment.
545	545	(b) A political subdivision or health authority shall
546	546	investigate a complaint or refer the complaint to the department,
547	547	as appropriate.
548	548	SUBCHAPTER I. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS PRODUCT
549	549	TO MINORS PROHIBITED
550	550	Sec. 491.0401. DEFINITION. In this subchapter, "minor"
551	551	means a person younger than 21 years of age.
552	552	Sec. 491.0402. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS
553	553	PRODUCT TO MINORS PROHIBITED; PROOF OF AGE REQUIRED. (a) A person
554	554	commits an offense if the person, under the authority of this
555	555	chapter:
556	556	(1) sells, gives, or causes to be sold or given
557	557	cannabis or a cannabis product to a minor; or
558	558	(2) sells, gives, or causes to be sold or given
559	559	cannabis or a cannabis product to another person who intends to
560	560	deliver the cannabis or cannabis product to a minor.
561	561	(b) If an offense under this section occurs in connection
562	562	with a sale by an employee of the owner of a cannabis establishment,
563	563	the employee is criminally responsible for the offense and is
564	564	subject to prosecution.
565	565	(c) An offense under this section is:
566	566	(1) a Class A misdemeanor if it is shown on the trial
567	567	of the offense that the minor to whom the cannabis or cannabis
568	568	product was sold or given was younger than 18 years of age; and
569	569	(2) a Class B misdemeanor if it is shown on the trial
570	570	of the offense that the minor to whom the cannabis or cannabis
571	571	product was sold or given was at least 18 years of age but younger
572	572	than 21 years of age.
573	573	(d) It is a defense to prosecution under Subsection (a)(1)
574	574	that the person to whom the cannabis or cannabis product was sold or
575	575	given presented to the defendant apparently valid proof of
576	576	identification.
577	577	(e) A proof of identification satisfies the requirements of
578	578	Subsection (d) if it contains a physical description and photograph
579	579	consistent with the person's appearance, purports to establish that
580	580	the person is 21 years of age or older, and was issued by a
581	581	governmental agency. The proof of identification may include a
582	582	driver's license issued by this state or another state, a passport,
583	583	or an identification card issued by a state or the federal
584	584	government.
585	585	SECTION 3. Section 122.103(c), Agriculture Code, is amended
586	586	to read as follows:
587	587	(c) A qualified applicant who along with the application
588	588	submits proof to the department that the applicant holds a license
589	589	under Chapter 487 or 491, Health and Safety Code, is not required to
590	590	pay an application fee, and the department shall issue the license
591	591	to the applicant within the time prescribed by Subsection (b).
592	592	SECTION 4. Section 411.0891(a), Government Code, is amended
593	593	to read as follows:
594	594	(a) The department may obtain as provided by Subsection
595	595	(a-1) criminal history record information that relates to a person
596	596	who:
597	597	(1) is an applicant for or holds a registration issued
598	598	by the director under Subchapter C, Chapter 481, Health and Safety
599	599	Code, that authorizes the person to manufacture, distribute,
600	600	analyze, or conduct research with a controlled substance;
601	601	(2) is an applicant for or holds a registration issued
602	602	by the department under Chapter 487, Health and Safety Code, to be a
603	603	director, manager, or employee of a dispensing organization, as
604	604	defined by Section 487.001, Health and Safety Code;
605	605	(2-a) is an applicant for or holds a license issued
606	606	under Chapter 491, Health and Safety Code, to be a cannabis grower,
607	607	cannabis establishment, cannabis secure transporter, or cannabis
608	608	testing facility, as defined by Section 491.0001, Health and Safety
609	609	Code;
610	610	(3) is an applicant for or holds an authorization
611	611	issued by the department under Section 521.2476, Transportation
612	612	Code, to do business in this state as a vendor of ignition interlock
613	613	devices;
614	614	(4) is an applicant for or holds certification by the
615	615	department as an inspection station or an inspector under
616	616	Subchapter G, Chapter 548, Transportation Code, holds an inspection
617	617	station or inspector certificate issued under that subchapter, or
618	618	is the owner of an inspection station operating under that chapter;
619	619	(5) is an applicant for or holds a certificate of
620	620	registration issued by the department under Chapter 1956,
621	621	Occupations Code, to act as a metal recycling entity;
622	622	(6) is an applicant for or holds a license to carry a
623	623	handgun issued by the department under Subchapter H, or is an
624	624	applicant for or holds a certification as an instructor issued by
625	625	the department under this chapter;
626	626	(7) is an applicant for or holds a Capitol access pass
627	627	issued by the department under Section 411.0625; or
628	628	(8) is an applicant for or holds a license or
629	629	commission issued by the department under Chapter 1702, Occupations
630	630	Code.
631	631	SECTION 5. Section 434.017(a), Government Code, is amended
632	632	to read as follows:
633	633	(a) The fund for veterans' assistance is a special fund in
634	634	the state treasury outside the general revenue fund. The fund is
635	635	composed of:
636	636	(1) money transferred to the fund at the direction of
637	637	the legislature;
638	638	(2) gifts and grants contributed to the fund;
639	639	(3) the earnings of the fund;
640	640	(4) money transferred to the fund from proceeds of the
641	641	lottery game operated under Section 466.027 or transferred to the
642	642	fund under Section 466.408(b);
643	643	(5) money deposited to the credit of the fund under
644	644	Section 502.1746, Transportation Code;
645	645	(6) money deposited to the credit of the fund under
646	646	Sections 521.008 and 522.0295, Transportation Code;
647	647	(7) money deposited to the credit of the fund under
648	648	Section 12.007, Parks and Wildlife Code; [and]
649	649	(8) money deposited to the credit of the fund under
650	650	Section 411.1741; and
651	651	(9) money deposited to the credit of the fund under
652	652	Section 166.0005, Tax Code.
653	653	SECTION 6. Section 443.202(a), Health and Safety Code, is
654	654	amended to read as follows:
655	655	(a) This section does not apply to low-THC cannabis
656	656	regulated under Chapter 487 or cannabis regulated under Chapter
657	657	491.
658	658	SECTION 7. Section 443.2025(a), Health and Safety Code, is
659	659	amended to read as follows:
660	660	(a) This section does not apply to low-THC cannabis
661	661	regulated under Chapter 487 or cannabis regulated under Chapter
662	662	491.
663	663	SECTION 8. Subchapter E, Chapter 461A, Health and Safety
664	664	Code, is amended by adding Section 461A.205 to read as follows:
665	665	Sec. 461A.205. CHEMICAL DEPENDENCY PREVENTION, TREATMENT,
666	666	AND REHABILITATION ACCOUNT. (a) The chemical dependency
667	667	prevention, treatment, and rehabilitation account is an account in
668	668	the general revenue fund administered by the department.
669	669	(b) The account consists of money deposited to the account
670	670	under Section 166.0005, Tax Code.
671	671	(c) Money in the account may be appropriated only to the
672	672	department for purposes related to the prevention, treatment, and
673	673	rehabilitation of chemical dependency.
674	674	SECTION 9. Section 481.062, Health and Safety Code, is
675	675	amended to read as follows:
676	676	Sec. 481.062. EXEMPTIONS. (a) The following persons are
677	677	not required to register and may possess a controlled substance
678	678	under this chapter [without registering with the Federal Drug
679	679	Enforcement Administration]:
680	680	(1) an agent or employee of a registered manufacturer,
681	681	distributor, analyzer, or dispenser of the controlled substance
682	682	[who is registered with the Federal Drug Enforcement Administration
683	683	and] acting in the usual course of business or employment;
684	684	(2) a common or contract carrier, a warehouseman, or
685	685	an employee of a carrier or warehouseman whose possession of the
686	686	controlled substance is in the usual course of business or
687	687	employment;
688	688	(3) an ultimate user or a person in possession of the
689	689	controlled substance under a lawful order of a practitioner or in
690	690	lawful possession of the controlled substance if it is listed in
691	691	Schedule V;
692	692	(4) an officer or employee of this state, another
693	693	state, a political subdivision of this state or another state, or
694	694	the United States who is lawfully engaged in the enforcement of a
695	695	law relating to a controlled substance or drug or to a customs law
696	696	and authorized to possess the controlled substance in the discharge
697	697	of the person's official duties;
698	698	(5) if the substance is tetrahydrocannabinol or one of
699	699	its derivatives:
700	700	(A) a Department of State Health Services
701	701	official, a medical school researcher, or a research program
702	702	participant possessing the substance as authorized under
703	703	Subchapter G; or
704	704	(B) a practitioner or an ultimate user possessing
705	705	the substance as a participant in a federally approved therapeutic
706	706	research program that the commissioner has reviewed and found, in
707	707	writing, to contain a medically responsible research protocol; [or]
708	708	(6) a dispensing organization licensed under Chapter
709	709	487 that possesses low-THC cannabis;
710	710	(7) a cannabis grower, cannabis establishment,
711	711	cannabis secure transporter, or cannabis testing facility licensed
712	712	under Chapter 491 that possesses cannabis or cannabis products; or
713	713	(8) a person who possesses cannabis or cannabis
714	714	products in accordance with Chapter 491.
715	715	(b) In this section, "cannabis" and "cannabis product" have
716	716	the meanings assigned to those terms by Section 491.0001.
717	717	SECTION 10. Section 481.111, Health and Safety Code, is
718	718	amended by adding Subsections (g) and (h) to read as follows:
719	719	(g) Sections 481.113, 481.116, 481.120, 481.121, and
720	720	481.125 do not apply to a person who engages in the acquisition,
721	721	possession, production, processing, cultivation, delivery,
722	722	transportation, disposal, transfer, or use of a raw material used
723	723	in or by-product created by the production or cultivation of
724	724	cannabis or cannabis products if the conduct is expressly
725	725	authorized by Subchapter B, Chapter 491.
726	726	(h) For purposes of Subsection (g), "cannabis" and
727	727	"cannabis product" have the meanings assigned to those terms by
728	728	Section 491.0001.
729	729	SECTION 11. Section 551.004, Occupations Code, is amended
730	730	by amending Subsection (a) and adding Subsection (a-1) to read as
731	731	follows:
732	732	(a) This subtitle does not apply to:
733	733	(1) a practitioner licensed by the appropriate state
734	734	board who supplies a patient of the practitioner with a drug in a
735	735	manner authorized by state or federal law and who does not operate a
736	736	pharmacy for the retailing of prescription drugs;
737	737	(2) a member of the faculty of a college of pharmacy
738	738	recognized by the board who is a pharmacist and who performs the
739	739	pharmacist's services only for the benefit of the college;
740	740	(3) a person who procures prescription drugs for
741	741	lawful research, teaching, or testing and not for resale;
742	742	(4) a home and community support services agency that
743	743	possesses a dangerous drug as authorized by Section 142.0061,
744	744	142.0062, or 142.0063, Health and Safety Code; [or]
745	745	(5) a dispensing organization[, as defined by Section
746	746	487.001, Health and Safety Code,] that cultivates, processes, and
747	747	dispenses low-THC cannabis, as authorized by Chapter 487, Health
748	748	and Safety Code, to a patient listed in the compassionate-use
749	749	registry established under that chapter;
750	750	(6) a cannabis grower, cannabis establishment,
751	751	cannabis secure transporter, or cannabis testing facility licensed
752	752	under Chapter 491, Health and Safety Code, that cultivates,
753	753	manufactures, processes, distributes, delivers, sells, tests,
754	754	transports, or dispenses cannabis or a cannabis product as
755	755	authorized by that chapter; or
756	756	(7) a person who transfers cannabis without
757	757	remuneration as authorized by Section 491.0051, Health and Safety
758	758	Code.
759	759	(a-1) For purposes of this section:
760	760	(1) "Cannabis," "cannabis establishment," "cannabis
761	761	grower," "cannabis product," "cannabis secure transporter," and
762	762	"cannabis testing facility" have the meanings assigned by Section
763	763	491.0001, Health and Safety Code.
764	764	(2) "Dispensing organization" and "low-THC cannabis"
765	765	have the meanings assigned by Section 487.001, Health and Safety
766	766	Code.
767	767	SECTION 12. Section 151.313(c), Tax Code, is amended to
768	768	read as follows:
769	769	(c) A product is a drug or medicine for purposes of this
770	770	section if the product:
771	771	(1) is intended for use in the diagnosis, cure,
772	772	mitigation, treatment, or prevention of disease, illness, injury,
773	773	or pain;
774	774	(2) is applied to the human body or is a product that a
775	775	human ingests or inhales;
776	776	(3) is not an appliance or device; [and]
777	777	(4) is not food; and
778	778	(5) is not cannabis or a cannabis product, as those
779	779	terms are defined by Section 491.0001, Health and Safety Code.
780	780	SECTION 13. Section 151.314, Tax Code, is amended by adding
781	781	Subsection (i) to read as follows:
782	782	(i) The exemption provided by Subsection (a) does not apply
783	783	to a cannabis product, as defined by Section 491.0001, Health and
784	784	Safety Code.
785	785	SECTION 14. Section 151.316, Tax Code, is amended by adding
786	786	Subsection (e) to read as follows:
787	787	(e) The exemption provided by Subsection (a)(5) does not
788	788	apply to cannabis, as defined by Section 491.0001, Health and
789	789	Safety Code.
790	790	SECTION 15. Subtitle E, Title 2, Tax Code, is amended by
791	791	adding Chapter 166 to read as follows:
792	792	CHAPTER 166. TAX ON CANNABIS AND RELATED PRODUCTS
793	793	Sec. 166.0001. DEFINITIONS. In this chapter, "cannabis"
794	794	and "cannabis product" have the meanings assigned by Section
795	795	491.0001, Health and Safety Code.
796	796	Sec. 166.0002. APPLICABILITY. This section does not apply
797	797	to low-THC cannabis regulated under Chapter 487, Health and Safety
798	798	Code.
799	799	Sec. 166.0003. CANNABIS SALES TAX. (a) A tax is imposed on
800	800	each sale in this state of cannabis and cannabis products.
801	801	(b) The tax rate is:
802	802	(1) 20 percent of the sales price of cannabis or a
803	803	cannabis product for a sale from a cannabis establishment to a
804	804	consumer; or
805	805	(2) 15 percent of the sales price of cannabis or a
806	806	cannabis product for a sale from a cannabis grower to a cannabis
807	807	establishment.
808	808	Sec. 166.0004. APPLICATION OF OTHER PROVISIONS OF CODE.
809	809	(a) The tax imposed under this chapter is in addition to the taxes
810	810	imposed under Chapter 151.
811	811	(b) Except as provided by this chapter:
812	812	(1) the tax imposed under this chapter is
813	813	administered, imposed, collected, and enforced in the same manner
814	814	as the taxes under Chapter 151 are administered, imposed,
815	815	collected, and enforced; and
816	816	(2) the provisions of Chapter 151 applicable to the
817	817	sales tax imposed under Subchapter C, Chapter 151, apply to the tax
818	818	imposed under this chapter.
819	819	Sec. 166.0005. DISPOSITION OF PROCEEDS. The comptroller
820	820	shall deposit the proceeds from the tax imposed under this chapter
821	821	as follows:
822	822	(1) 10 percent to the credit of the cannabis
823	823	establishment regulation and oversight local share account under
824	824	Section 491.0302, Health and Safety Code;
825	825	(2) 15 percent to the credit of the chemical
826	826	dependency prevention, treatment, and rehabilitation account under
827	827	Section 461A.205, Health and Safety Code;
828	828	(3) 25 percent to the credit of the fund for veterans'
829	829	assistance under Section 434.017, Government Code; and
830	830	(4) the remainder to the credit of the permanent
831	831	school fund.
832	832	SECTION 16. (a) Not later than July 1, 2026, the Texas
833	833	Commission of Licensing and Regulation shall adopt rules as
834	834	required to implement, administer, and enforce Chapter 491, Health
835	835	and Safety Code, as added by this Act.
836	836	(b) Not later than November 1, 2026, the Texas Department of
837	837	Licensing and Regulation shall begin licensing cannabis growers,
838	838	cannabis establishments, cannabis secure transporters, and
839	839	cannabis testing facilities in accordance with Chapter 491, Health
840	840	and Safety Code, as added by this Act, provided that the applicants
841	841	for a license have met all requirements for approval under Chapter
842	842	491, Health and Safety Code, as added by this Act.
843	843	SECTION 17. The changes in law made by this Act do not
844	844	affect tax liability accruing before the effective date of this
845	845	Act. That liability continues in effect as if this Act had not been
846	846	enacted, and the former law is continued in effect for the
847	847	collection of taxes due and for civil and criminal enforcement of
848	848	the liability for those taxes.
849	849	SECTION 18. This Act takes effect September 1, 2025.