Texas 2025 - 89th Regular

Texas House Bill HB5307 Compare Versions

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Old	New	Differences
1	1	89R15965 LHC-F
2	2	By: Talarico H.B. No. 5307
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 the local regulation of cannabis establishments;
13	13	providing for expunction of records relating to certain
14	14	decriminalized conduct; authorizing the imposition of fees;
15	15	requiring an occupational license; creating a criminal offense;
16	16	imposing a tax.
17	17	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
18	18	ARTICLE 1. SHORT TITLE
19	19	SECTION 1.01. This Act may be cited as the Texas Regulation
20	20	of Cannabis Act.
21	21	ARTICLE 2. REGULATION AND TAXATION OF CANNABIS
22	22	SECTION 2.01. Subtitle C, Title 6, Health and Safety Code,
23	23	is amended by adding Chapter 491 to read as follows:
24	24	CHAPTER 491. REGULATION OF CANNABIS
25	25	SUBCHAPTER A. GENERAL PROVISIONS
26	26	Sec. 491.0001. DEFINITIONS. In this chapter:
27	27	(1) "Adult" means an individual 21 years of age or
28	28	older.
29	29	(2) "Cannabis" means the plant Cannabis sativa L.,
30	30	whether growing or not, the seeds of that plant, and every compound,
31	31	manufacture, salt, derivative, mixture, or preparation of that
32	32	plant or its seeds. The term includes cannabis concentrate. The
33	33	term does not include:
34	34	(A) the mature stalks of the plant or fiber
35	35	produced from the stalks;
36	36	(B) oil or cake made from the seeds of the plant;
37	37	(C) a compound, manufacture, salt, derivative,
38	38	mixture, or preparation of the mature stalks, fiber, oil, or cake;
39	39	(D) the sterilized seeds of the plant that are
40	40	incapable of beginning germination;
41	41	(E) hemp, as that term is defined by Section
42	42	121.001, Agriculture Code; or
43	43	(F) a consumable hemp product, as that term is
44	44	defined by Section 443.001.
45	45	(3) "Cannabis concentrate" means the resin extracted
46	46	from a part of the plant Cannabis sativa L. or a compound,
47	47	manufacture, salt, derivative, mixture, or preparation of the
48	48	resin.
49	49	(4) "Cannabis establishment" means an entity licensed
50	50	by the department under this chapter to process and dispense
51	51	cannabis and cannabis products to an adult.
52	52	(5) "Cannabis grower" means an entity licensed by the
53	53	department to cultivate cannabis for sale and distribution to a
54	54	cannabis establishment.
55	55	(6) "Cannabis product" means a product that contains
56	56	cannabis and is intended for use or consumption by humans,
57	57	including as an edible product or as a topical product, ointment,
58	58	oil, or tincture. The term includes products that consist of
59	59	cannabis and other ingredients.
60	60	(7) "Cannabis-related drug paraphernalia" means
61	61	equipment, a product, or material that is used or intended for use
62	62	in:
63	63	(A) planting, propagating, cultivating, growing,
64	64	harvesting, manufacturing, compounding, converting, producing,
65	65	processing, preparing, testing, analyzing, packaging, repackaging,
66	66	storing, or containing cannabis or a cannabis product; or
67	67	(B) introducing cannabis or a cannabis product
68	68	into the human body.
69	69	(8) "Cannabis secure transporter" means an entity
70	70	licensed by the department under this chapter to transport cannabis
71	71	from a cannabis grower to a cannabis establishment.
72	72	(9) "Cannabis testing facility" means an entity
73	73	licensed by the department under this chapter to analyze the safety
74	74	and potency of cannabis and cannabis products.
75	75	(10) "Commission" means the Texas Commission of
76	76	Licensing and Regulation.
77	77	(11) "Cultivate" means to propagate, breed, grow,
78	78	harvest, dry, cure, or separate parts of the cannabis plant by
79	79	manual or mechanical means.
80	80	(12) "Department" means the Texas Department of
81	81	Licensing and Regulation.
82	82	(13) "Executive director" means the executive
83	83	director of the department.
84	84	(14) "Marihuana" has the meaning assigned by Section
85	85	481.002.
86	86	(15) "Process" means to separate or otherwise prepare
87	87	parts of the cannabis plant and to compound, blend, extract,
88	88	infuse, or otherwise make or prepare cannabis concentrate or
89	89	cannabis products.
90	90	SUBCHAPTER B. PROTECTIONS FROM LEGAL ACTION RELATED TO CANNABIS
91	91	Sec. 491.0051. AUTHORIZED CONDUCT: PERSONAL USE OF
92	92	CANNABIS. An adult is authorized under this chapter to:
93	93	(1) use, possess, and transport not more than 2.5
94	94	ounces of cannabis, except that not more than 15 grams of that
95	95	amount may be in the form of cannabis concentrate;
96	96	(2) transfer without remuneration to another adult not
97	97	more than 2.5 ounces of cannabis, except that not more than 15 grams
98	98	of that amount may be in the form of cannabis concentrate and
99	99	provided that the transfer is not advertised or promoted to the
100	100	public;
101	101	(3) cultivate for personal use not more than 12
102	102	cannabis plants in an area on the premises of the adult's private
103	103	residence, provided that the cultivation occurs in an enclosed area
104	104	that is:
105	105	(A) equipped with locks or other security devices
106	106	that restrict access to the area; and
107	107	(B) not visible from a public place without the
108	108	use of aircraft or optical aids;
109	109	(4) possess, store, or process on the premises of the
110	110	adult's private residence not more than:
111	111	(A) the amount of cannabis produced from cannabis
112	112	plants cultivated on the premises, provided that:
113	113	(i) not more than 12 cannabis plants are
114	114	possessed, cultivated, or processed on the premises at one time;
115	115	and
116	116	(ii) any amount of cannabis in excess of 2.5
117	117	ounces is stored in a container or area equipped with locks or other
118	118	security devices that restrict access to the contents of the
119	119	container or area; and
120	120	(B) 10 ounces of cannabis that were not produced
121	121	from cannabis plants cultivated on the premises, provided that the
122	122	amount in excess of 2.5 ounces is stored in a container or area
123	123	described by Paragraph (A)(ii);
124	124	(5) use, possess, process, transport, or transfer to
125	125	another adult without remuneration an amount of cannabis products
126	126	specified by rule of the commission as the allowable amount of
127	127	cannabis for purposes of this subdivision; and
128	128	(6) use, possess, transport, or transfer to another
129	129	adult without remuneration cannabis-related drug paraphernalia.
130	130	Sec. 491.0052. AUTHORIZED CONDUCT: RETAIL CANNABIS
131	131	OPERATIONS. This chapter authorizes the conduct of:
132	132	(1) a cannabis grower director, manager, or employee
133	133	who, acting within the scope of the grower's license:
134	134	(A) cultivates cannabis or produces cannabis
135	135	products for sale or transfer to a cannabis establishment; and
136	136	(B) possesses cannabis or cannabis-related drug
137	137	paraphernalia;
138	138	(2) a cannabis establishment director, manager, or
139	139	employee who, acting within the scope of the establishment's
140	140	license, possesses cannabis or cannabis products or transfers or
141	141	sells cannabis, cannabis products, or cannabis-related drug
142	142	paraphernalia to an adult;
143	143	(3) a cannabis secure transporter director, manager,
144	144	or employee who, acting within the scope of the secure
145	145	transporter's license, transports, transfers, or delivers cannabis
146	146	or cannabis products from a cannabis grower to a cannabis
147	147	establishment; and
148	148	(4) a cannabis testing facility director, manager, or
149	149	employee who, acting within the scope of the facility's license,
150	150	possesses or tests cannabis, cannabis products, or
151	151	cannabis-related drug paraphernalia.
152	152	Sec. 491.0053. PROTECTION FROM LEGAL ACTION FOR AUTHORIZED
153	153	CONDUCT. (a) A person is not subject to arrest, prosecution,
154	154	forfeiture of property, or penalty in any manner or denial of any
155	155	right or privilege, including any civil penalty or disciplinary
156	156	action by a court or occupational or professional licensing board
157	157	or bureau solely due to conduct authorized under Section 491.0051
158	158	or 491.0052.
159	159	(b) The fact that a person engages in conduct authorized by
160	160	Section 491.0051 or 491.0052 does not in itself constitute grounds
161	161	for denying, limiting, or restricting conservatorship or
162	162	possession of or access to a child under Title 5, Family Code.
163	163	Sec. 491.0054. PROHIBITION OF CANNABIS ON PRIVATE PROPERTY;
164	164	EXCEPTION. (a) Except as otherwise provided by Subsection (b), a
165	165	person may prohibit or restrict the possession, consumption,
166	166	cultivation, distribution, processing, sale, or display of
167	167	cannabis or cannabis products on property the person owns,
168	168	occupies, or manages.
169	169	(b) A person may not prohibit a residential tenant under a
170	170	lease agreement from possessing cannabis, cannabis products, or
171	171	cannabis-related drug paraphernalia or consuming cannabis by means
172	172	other than smoking on the premises.
173	173	Sec. 491.0055. CONDUCT NOT AUTHORIZED UNDER THIS CHAPTER.
174	174	This chapter does not authorize the following conduct:
175	175	(1) operating a motor vehicle while intoxicated or
176	176	otherwise violating Chapter 49, Penal Code;
177	177	(2) smoking or otherwise consuming cannabis in:
178	178	(A) a motor vehicle while the vehicle is on a
179	179	public road;
180	180	(B) an aircraft, while the aircraft is in flight
181	181	or in a public area;
182	182	(C) a watercraft, while the watercraft is on a
183	183	public waterway; or
184	184	(D) a public place, unless:
185	185	(i) the public place is an area designated
186	186	by the applicable political subdivision as an area where using
187	187	cannabis is permissible; and
188	188	(ii) the area described by Subparagraph (i)
189	189	is not accessible to persons younger than 21 years of age;
190	190	(3) possessing or consuming cannabis or cannabis
191	191	products or possessing cannabis-related drug paraphernalia:
192	192	(A) on the premises of a public or private
193	193	child-care facility, prekindergarten, or primary or secondary
194	194	school;
195	195	(B) on a school bus that serves a facility or
196	196	school described by Paragraph (A); or
197	197	(C) on the premises of a correctional facility,
198	198	as defined by Article 18A.251, Code of Criminal Procedure, or a
199	199	civil commitment facility; or
200	200	(4) separating resin from the cannabis plant by butane
201	201	extraction or another method that uses a substance with a
202	202	flashpoint below 100 degrees Fahrenheit in a public place or motor
203	203	vehicle or within the curtilage of a residential structure.
204	204	SUBCHAPTER C. DUTIES OF COMMISSION AND DEPARTMENT
205	205	Sec. 491.0101. DUTIES OF DEPARTMENT. The department shall
206	206	administer this chapter.
207	207	Sec. 491.0102. RULES; FEES. (a) The commission shall adopt
208	208	all necessary rules for the administration and enforcement of this
209	209	chapter, including rules imposing fees under this chapter in
210	210	amounts sufficient to cover the cost of administering this chapter.
211	211	(b) The commission by rule shall set application and license
212	212	fees under this chapter in amounts sufficient to administer this
213	213	chapter and may annually adjust the fees for inflation.
214	214	(c) A fee collected under this chapter shall be deposited to
215	215	the credit of the cannabis regulation account established under
216	216	Section 491.0251.
217	217	(d) The commission shall adopt rules for the reasonable
218	218	regulation of cannabis growers and cannabis establishments,
219	219	including rules that:
220	220	(1) restrict the use of dangerous pesticides;
221	221	(2) regulate the packaging and labeling of cannabis
222	222	products available at a cannabis establishment;
223	223	(3) restrict advertising and display of cannabis and
224	224	cannabis products;
225	225	(4) restrict the maximum amount of
226	226	tetrahydrocannabinol that may be contained in a cannabis product
227	227	sold to a consumer;
228	228	(5) require recordkeeping and monitoring to track the
229	229	transfer of cannabis and cannabis products between license holders;
230	230	and
231	231	(6) require security measures, provided that the
232	232	security measures do not restrict the cultivation of cannabis
233	233	outdoors or in greenhouses.
234	234	Sec. 491.0103. TESTING, PACKAGING, AND LABELING STANDARDS.
235	235	(a) The commission by rule shall establish standards for:
236	236	(1) the operation of cannabis testing facilities;
237	237	(2) the testing of cannabis and cannabis products; and
238	238	(3) packaging and labeling requirements for cannabis
239	239	and cannabis products.
240	240	(b) In establishing standards for packaging and labeling
241	241	requirements under Subsection (a)(3), the commission shall require
242	242	that:
243	243	(1) cannabis and cannabis products be packaged in
244	244	opaque, resealable, child-resistant packaging that does not
245	245	resemble and may not be easily confused with typical packaging for
246	246	commercially sold candy;
247	247	(2) cannabis and cannabis products be clearly labeled;
248	248	and
249	249	(3) the label for a cannabis product disclose the
250	250	amount of cannabis contained in that product.
251	251	Sec. 491.0104. SECURE TRANSPORTATION OF CANNABIS. The
252	252	commission by rule shall establish standards applicable to cannabis
253	253	secure transporters, including standards to ensure all cannabis
254	254	establishments are properly served.
255	255	Sec. 491.0105. CONFLICT OF INTEREST. (a) A person who is
256	256	involved in the implementation, administration, or enforcement of
257	257	this chapter as a member of the commission, an employee of the
258	258	department, or a consultant to the commission or the department may
259	259	not also hold a pecuniary interest in any entity licensed by the
260	260	department under this chapter.
261	261	(b) A person who holds a pecuniary interest in a cannabis
262	262	testing facility or a cannabis secure transporter who holds a
263	263	license issued under this chapter may not hold a pecuniary interest
264	264	in any entity that holds a cannabis establishment or cannabis
265	265	grower license issued under this chapter.
266	266	(c) A person may not hold a pecuniary interest in more than
267	267	five entities that are licensed under this chapter as a cannabis
268	268	grower, except as provided by commission rule.
269	269	Sec. 491.0106. ANNUAL REPORT. The executive director shall
270	270	annually submit to the governor a report providing the following
271	271	information regarding licensing and regulation under this chapter:
272	272	(1) the number of applications received for each class
273	273	of license under this chapter;
274	274	(2) the number of licenses issued for each class of
275	275	license under this chapter;
276	276	(3) demographic information pertaining to license
277	277	holders;
278	278	(4) a description of any fines imposed on a license
279	279	holder or disciplinary actions taken against a license holder by
280	280	the department; and
281	281	(5) a statement of revenues and expenses of the
282	282	department related to the implementation, administration, and
283	283	enforcement of this chapter.
284	284	SUBCHAPTER D. LICENSING
285	285	Sec. 491.0151. LICENSE REQUIRED. A person must hold a
286	286	license issued by the department under this chapter to operate as a
287	287	cannabis grower, cannabis establishment, cannabis secure
288	288	transporter, or cannabis testing facility.
289	289	Sec. 491.0152. QUALIFICATIONS FOR LICENSURE. The
290	290	commission by rule shall provide for each class of license issued
291	291	under this chapter qualifications for licensure that are
292	292	demonstrably related to the operations authorized and duties
293	293	imposed under that class of license.
294	294	Sec. 491.0153. APPLICATION. (a) A person may apply for an
295	295	initial or renewal license under this chapter by submitting a form
296	296	prescribed by the department along with the application fee in an
297	297	amount set by commission rule.
298	298	(b) The application must indicate the class of license
299	299	sought and include the name and address of the applicant, the name
300	300	and address of each of the applicant's directors, managers, and
301	301	employees, and any other information considered necessary by the
302	302	department to determine the applicant's eligibility for the
303	303	license.
304	304	Sec. 491.0154. ISSUANCE, RENEWAL, OR DENIAL OF LICENSE.
305	305	(a) The department shall issue or renew a license under this
306	306	chapter only if:
307	307	(1) the department determines the applicant meets the
308	308	qualifications for the class of license sought established under
309	309	Section 491.0152; and
310	310	(2) the applicant is in compliance with any applicable
311	311	local regulations.
312	312	(b) If the department denies the issuance or renewal of a
313	313	license under Subsection (a), the department shall give written
314	314	notice of the grounds for denial to the applicant.
315	315	(c) A license issued or renewed under this section expires
316	316	as determined by commission rule and the department in accordance
317	317	with Section 51.406, Occupations Code.
318	318	Sec. 491.0155. DUTY TO MAINTAIN QUALIFICATIONS. A license
319	319	holder shall maintain compliance at all times with the
320	320	qualifications for the applicable class of license established
321	321	under Section 491.0152.
322	322	Sec. 491.0156. LICENSE SUSPENSION OR REVOCATION. (a) The
323	323	department may at any time suspend or revoke a license issued under
324	324	this chapter if the department determines that the license holder
325	325	has not maintained the qualifications established under Section
326	326	491.0152 or has failed to comply with a duty imposed under this
327	327	chapter.
328	328	(b) The department shall give written notice to a license
329	329	holder of a license suspension or revocation under this section and
330	330	the grounds for the suspension or revocation. The notice must be
331	331	sent by certified mail, return receipt requested.
332	332	(c) After suspending or revoking a license issued under this
333	333	chapter, the department shall notify the Department of Public
334	334	Safety. The public safety director of the Department of Public
335	335	Safety may seize or place under seal all cannabis, cannabis
336	336	products, and cannabis-related drug paraphernalia owned or
337	337	possessed by the license holder. If the license is revoked, a
338	338	disposition may not be made of the seized or sealed cannabis,
339	339	cannabis products, or cannabis-related drug paraphernalia until
340	340	the time for administrative appeal of the order has elapsed or until
341	341	all appeals have been concluded. When a revocation order becomes
342	342	final, all cannabis, cannabis products, and cannabis-related drug
343	343	paraphernalia may be forfeited to the state as provided under
344	344	Subchapter E, Chapter 481.
345	345	(d) Chapter 2001, Government Code, applies to a proceeding
346	346	under this section.
347	347	Sec. 491.0157. CRIMINAL HISTORY BACKGROUND CHECK. (a) In
348	348	addition to satisfying the other requirements provided by
349	349	commission rule under this chapter, an applicant for a license
350	350	under this chapter must submit to the department a complete and
351	351	legible set of fingerprints, on a form prescribed by the
352	352	commission, for the purpose of obtaining criminal history record
353	353	information from the Department of Public Safety and the Federal
354	354	Bureau of Investigation.
355	355	(b) The department may deny a license to an applicant who
356	356	does not comply with the requirement of Subsection (a). Issuance of
357	357	a license by the department is conditioned on the department
358	358	obtaining the applicant's criminal history record information
359	359	under this section.
360	360	(c) The commission by rule shall establish criteria for
361	361	determining whether a person passes the criminal history background
362	362	check for purposes of this section. The rules adopted under this
363	363	section may not disqualify a person for licensure solely for a
364	364	conviction of an offense that involves the possession of marihuana
365	365	or the delivery of marihuana to a person 18 years of age or older.
366	366	SUBCHAPTER E. DUTIES OF LICENSE HOLDERS
367	367	Sec. 491.0201. DUTIES RELATING TO DISPENSING CANNABIS OR
368	368	CANNABIS PRODUCTS. Before dispensing cannabis or cannabis products
369	369	to an adult, a cannabis establishment must make reasonable efforts
370	370	to verify that:
371	371	(1) the person receiving the cannabis or cannabis
372	372	product is an adult;
373	373	(2) the cannabis or cannabis product complies with
374	374	department testing and labeling rules; and
375	375	(3) the amount dispensed is not greater than the
376	376	amount of cannabis or cannabis product allowed for personal use as
377	377	provided by Section 491.0051.
378	378	Sec. 491.0202. DUTIES RELATING TO SECURITY. (a) A license
379	379	holder shall ensure that the cultivation, processing, sale, or
380	380	display of cannabis, cannabis products, and cannabis-related drug
381	381	paraphernalia is not visible from a public place without the use of
382	382	optical aids or aircraft.
383	383	(b) A license holder may not cultivate, process, store, or
384	384	sell cannabis, cannabis products, or cannabis-related drug
385	385	paraphernalia at a location other than the physical address
386	386	approved by the department for the establishment under the license
387	387	issued to the establishment under this chapter.
388	388	(c) A license holder shall adopt reasonable security
389	389	measures necessary to restrict access to areas where cannabis,
390	390	cannabis products, or cannabis-related drug paraphernalia are
391	391	stored and to prevent theft of cannabis, cannabis products, and
392	392	cannabis-related drug paraphernalia.
393	393	Sec. 491.0203. LICENSE HOLDER OPERATIONS. (a) A license
394	394	holder may not employ or otherwise accept the services of a person
395	395	younger than 21 years of age.
396	396	(b) A cannabis establishment may not sell tobacco products,
397	397	as defined by Section 155.001, Tax Code.
398	398	Sec. 491.0204. MONTHLY SALES REPORT. A cannabis
399	399	establishment shall monthly submit a report to the comptroller
400	400	specifying the amount of cannabis sold, the number of cannabis
401	401	products sold, the number and types of cannabis-related drug
402	402	paraphernalia sold, and the amount of money collected in sales by
403	403	the establishment during the preceding month.
404	404	SUBCHAPTER F. FUNDING FOR REGULATION, OVERSIGHT, TESTING, AND
405	405	QUALITY CONTROL
406	406	Sec. 491.0251. CANNABIS REGULATION ACCOUNT. (a) The
407	407	cannabis regulation account is an account in the general revenue
408	408	fund administered by the department.
409	409	(b) The account consists of:
410	410	(1) money deposited to the credit of the account under
411	411	Section 166.0004, Tax Code; and
412	412	(2) fees deposited to the credit of the account under
413	413	Section 491.0102.
414	414	(c) Money in the account may be appropriated only to the
415	415	department for implementing and administering this chapter.
416	416	Sec. 491.0252. CANNABIS TESTING AND QUALITY CONTROL
417	417	ACCOUNT. (a) The cannabis testing and quality control account is
418	418	an account in the general revenue fund administered by the
419	419	Department of Public Safety.
420	420	(b) The account consists of money deposited to the credit of
421	421	the account under Section 166.0004, Tax Code.
422	422	(c) Money in the account may be appropriated only to the
423	423	Department of Public Safety for monitoring compliance with testing
424	424	and quality control requirements imposed on license holders by this
425	425	chapter or by commission rules adopted under this chapter.
426	426	Sec. 491.0253. CANNABIS ESTABLISHMENT REGULATION AND
427	427	OVERSIGHT LOCAL SHARE ACCOUNT; PAYMENT FROM ACCOUNT. (a) In this
428	428	section:
429	429	(1) "Account" means the cannabis establishment
430	430	regulation and oversight local share account created under this
431	431	section.
432	432	(2) "Fiscal year" means the fiscal year of a
433	433	qualifying local government.
434	434	(3) "Qualifying local government" means a
435	435	municipality or county in which at least one cannabis establishment
436	436	is located during any portion of the applicable fiscal year.
437	437	(b) The cannabis establishment regulation and oversight
438	438	local share account is an account in the general revenue fund
439	439	administered by the comptroller.
440	440	(c) The account consists of money deposited to the credit of
441	441	the account under Section 166.0004, Tax Code.
442	442	(d) Money in the account may be used by the comptroller only
443	443	to make a cannabis establishment regulation assistance payment to a
444	444	qualifying local government in the manner provided by this section.
445	445	(e) To serve the state purpose of ensuring that local
446	446	governments in which cannabis establishments are located may
447	447	effectively participate in the regulation and oversight of those
448	448	establishments, a qualifying local government is entitled to a
449	449	cannabis establishment regulation assistance payment from the
450	450	state for each fiscal year that the local government is a qualifying
451	451	local government.
452	452	(f) Except as provided by Subsection (j), the amount of the
453	453	cannabis establishment regulation assistance payment to which a
454	454	qualifying local government is entitled for a fiscal year is equal
455	455	to the cost incurred by the local government to enforce regulations
456	456	adopted under Subchapter G.
457	457	(g) Not later than April 1 of the year following the end of a
458	458	fiscal year for which a qualifying local government is entitled to a
459	459	cannabis establishment regulation assistance payment, the
460	460	qualifying local government may submit an application to the
461	461	comptroller to receive a cannabis establishment regulation
462	462	assistance payment for that fiscal year. The application must be
463	463	made on a form prescribed by the comptroller. The comptroller may
464	464	require the qualifying local government to submit any information
465	465	the comptroller needs to determine the amount of the cannabis
466	466	establishment regulation assistance payment to which the
467	467	qualifying local government is entitled.
468	468	(h) A qualifying local government that does not submit an
469	469	application to the comptroller by the date prescribed by Subsection
470	470	(g) is not entitled to a cannabis establishment regulation
471	471	assistance payment for the fiscal year for which that deadline
472	472	applies.
473	473	(i) The comptroller shall review each application by a local
474	474	government to determine whether the local government is entitled to
475	475	a cannabis establishment regulation assistance payment. If the
476	476	comptroller determines that the local government is entitled to the
477	477	payment, the comptroller shall remit the payment using available
478	478	money in the account to the qualifying local government not later
479	479	than the 30th day after the date the application for the payment is
480	480	made.
481	481	(j) If at the time a cannabis establishment regulation
482	482	assistance payment must be remitted to a qualifying local
483	483	government under Subsection (i) the comptroller determines the
484	484	available amount in the account is insufficient to make the
485	485	payment, the comptroller may reduce the amount of the payment to the
486	486	qualifying local government. If more than one payment must be
487	487	remitted at a time when the available amount in the account is
488	488	insufficient to make those payments, the comptroller shall make
489	489	reduced payments to each qualifying local government. The
490	490	comptroller shall allocate the reductions in the amount of the
491	491	payments in a manner that is proportionate to the number of cannabis
492	492	establishments in each qualifying local government.
493	493	(k) The comptroller shall adopt rules necessary to
494	494	implement this section.
495	495	SUBCHAPTER G. LOCAL REGULATION AND OVERSIGHT
496	496	Sec. 491.0301. DEFINITION. In this subchapter, "health
497	497	authority" has the meaning assigned by Section 431.002.
498	498	Sec. 491.0302. PROHIBITED LOCAL REGULATION. A political
499	499	subdivision of this state may not enact, adopt, or enforce a rule,
500	500	ordinance, order, resolution, or other regulation that prohibits or
501	501	unreasonably restricts the cultivation, production, processing,
502	502	dispensing, transportation, or possession of cannabis or cannabis
503	503	products or the operation of a cannabis grower, cannabis
504	504	establishment, cannabis secure transporter, or cannabis testing
505	505	facility as authorized by this chapter.
506	506	Sec. 491.0303. PERMISSIBLE LOCAL REGULATION. A political
507	507	subdivision may adopt regulations consistent with this chapter
508	508	governing the hours of operation, location, manner of conducting
509	509	business, and number of cannabis growers, cannabis establishments,
510	510	or cannabis testing facilities.
511	511	Sec. 491.0304. PUBLIC HEALTH INSPECTIONS. A health
512	512	authority may, on presenting appropriate credentials to the license
513	513	holder or employee of the cannabis establishment:
514	514	(1) enter at reasonable times the premises of a
515	515	cannabis establishment;
516	516	(2) enter a vehicle being used to transport cannabis;
517	517	or
518	518	(3) inspect at reasonable times, within reasonable
519	519	limits, and in a reasonable manner, the establishment or vehicle
520	520	and all equipment, finished and unfinished materials, containers,
521	521	and labeling of any item.
522	522	Sec. 491.0305. COMPLAINTS. (a) A political subdivision or
523	523	health authority shall maintain a record of any complaints made to
524	524	the political subdivision or health authority regarding the
525	525	operations of a cannabis establishment.
526	526	(b) A political subdivision or health authority shall
527	527	investigate a complaint or refer the complaint to the department,
528	528	as appropriate.
529	529	SUBCHAPTER H. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS PRODUCT
530	530	TO MINORS PROHIBITED
531	531	Sec. 491.0351. DEFINITION. In this subchapter, "minor"
532	532	means a person younger than 21 years of age.
533	533	Sec. 491.0352. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS
534	534	PRODUCT TO MINORS PROHIBITED; PROOF OF AGE REQUIRED. (a) A person
535	535	commits an offense if the person, under the authority of this
536	536	chapter:
537	537	(1) sells, gives, or causes to be sold or given
538	538	cannabis or cannabis products to a minor; or
539	539	(2) sells, gives, or causes to be sold or given
540	540	cannabis or cannabis products to another person who intends to
541	541	deliver the cannabis or cannabis products to a minor.
542	542	(b) If an offense under this section occurs in connection
543	543	with a sale by an employee of the owner of a cannabis establishment,
544	544	the employee is criminally responsible for the offense and is
545	545	subject to prosecution.
546	546	(c) An offense under this section is a Class C misdemeanor.
547	547	(d) It is a defense to prosecution under Subsection (a)(1)
548	548	that the person to whom the cannabis or cannabis products were sold
549	549	or given presented to the defendant apparently valid proof of
550	550	identification.
551	551	(e) A proof of identification satisfies the requirements of
552	552	Subsection (d) if it contains a physical description and photograph
553	553	consistent with the person's appearance, purports to establish that
554	554	the person is 21 years of age or older, and was issued by a
555	555	governmental agency. The proof of identification may include a
556	556	driver's license issued by this state or another state, a passport,
557	557	or an identification card issued by a state or the federal
558	558	government.
559	559	SECTION 2.02. Subchapter C, Chapter 42, Human Resources
560	560	Code, is amended by adding Section 42.069 to read as follows:
561	561	Sec. 42.069. CHILD-CARE SERVICES PROGRAM SUPPORT ACCOUNT.
562	562	(a) The child-care services program support account is an account
563	563	in the general revenue fund administered by the department.
564	564	(b) The account consists of money deposited to the account
565	565	under Section 166.0004, Tax Code.
566	566	(c) Money in the account may be appropriated only to the
567	567	department for the purpose of increasing subsidy funding for the
568	568	child-care services program.
569	569	SECTION 2.03. Subtitle E, Title 2, Tax Code, is amended by
570	570	adding Chapter 166 to read as follows:
571	571	CHAPTER 166. TAX ON CANNABIS AND RELATED PRODUCTS
572	572	Sec. 166.0001. DEFINITIONS. In this chapter, "cannabis"
573	573	and "cannabis product" have the meanings assigned by Section
574	574	491.0001, Health and Safety Code.
575	575	Sec. 166.0002. CANNABIS SALES TAX. (a) A tax is imposed on
576	576	each sale in this state of cannabis and cannabis products.
577	577	(b) The tax rate is 10 percent of the sales price of cannabis
578	578	or a cannabis product.
579	579	Sec. 166.0003. APPLICATION OF OTHER PROVISIONS OF CODE.
580	580	(a) The tax imposed under this chapter is in addition to the taxes
581	581	imposed under Chapter 151.
582	582	(b) Except as provided by this chapter:
583	583	(1) the tax imposed under this chapter is
584	584	administered, imposed, collected, and enforced in the same manner
585	585	as the taxes under Chapter 151 are administered, imposed,
586	586	collected, and enforced; and
587	587	(2) the provisions of Chapter 151 applicable to the
588	588	sales tax imposed under Subchapter C, Chapter 151, apply to the tax
589	589	imposed under this chapter.
590	590	Sec. 166.0004. DISPOSITION OF PROCEEDS. The comptroller
591	591	shall deposit the proceeds from the tax imposed under this chapter
592	592	as follows:
593	593	(1) 10 percent to the credit of the cannabis
594	594	regulation account under Section 491.0251, Health and Safety Code;
595	595	(2) 10 percent to the credit of the cannabis testing
596	596	and quality control account under Section 491.0252, Health and
597	597	Safety Code;
598	598	(3) 20 percent to the credit of the cannabis
599	599	establishment regulation and oversight local share account under
600	600	Section 491.0253, Health and Safety Code; and
601	601	(4) the remainder to the credit of the child-care
602	602	services program support account under Section 42.069, Human
603	603	Resources Code.
604	604	ARTICLE 3. EXPUNCTION
605	605	SECTION 3.01. Subchapter A, Chapter 55A, Code of Criminal
606	606	Procedure, is amended by adding Article 55A.007 to read as follows:
607	607	Art. 55A.007. CERTAIN DECRIMINALIZED CANNABIS-RELATED
608	608	OFFENSES. A person to whom this subchapter applies is entitled to
609	609	the expunction of all records and files related to the arrest,
610	610	including, as applicable, any records and files related to a
611	611	conviction of the offense, if:
612	612	(1) the person is convicted of or placed on deferred
613	613	adjudication community supervision under Subchapter C, Chapter
614	614	42A, for the offense for which the person was arrested;
615	615	(2) the person was arrested for an offense under
616	616	Section 481.116, 481.121, or 481.125, Health and Safety Code, that:
617	617	(A) was committed before September 1, 2025; and
618	618	(B) involved only conduct that would have been
619	619	authorized under Section 491.0051 of that code if that conduct had
620	620	occurred on or after September 1, 2025; and
621	621	(3) as applicable:
622	622	(A) the person's sentence, including any term of
623	623	confinement or period of community supervision imposed and payment
624	624	of all fines and costs imposed, is finally discharged; or
625	625	(B) the person received a dismissal and discharge
626	626	under Article 42A.111 for the offense.
627	627	SECTION 3.02. Article 55A.251, Code of Criminal Procedure,
628	628	is amended to read as follows:
629	629	Art. 55A.251. FILING OF PETITION. (a) A person who is
630	630	entitled to expunction of records and files under Article 55A.002,
631	631	55A.004, or 55A.005 or Subchapter B, or a person who is eligible for
632	632	expunction of records and files under Article 55A.101, may, subject
633	633	to Article 55A.252, file an ex parte petition for expunction in a
634	634	district court for the county in which:
635	635	(1) the petitioner was arrested; or
636	636	(2) the offense was alleged to have occurred.
637	637	(b) A person who is entitled to expunction of records and
638	638	files under Article 55A.007 may file an ex parte petition for
639	639	expunction in the court that convicted the person or placed the
640	640	person on deferred adjudication community supervision.
641	641	SECTION 3.03. Article 55A.257, Code of Criminal Procedure,
642	642	is amended to read as follows:
643	643	Art. 55A.257. DEPARTMENT OF PUBLIC SAFETY MAY FILE PETITION
644	644	ON PERSON'S BEHALF. The director of the Department of Public Safety
645	645	or the director's authorized representative may file on behalf of a
646	646	person described by Article 55A.251(a) [55A.251] or 55A.256 an ex
647	647	parte petition for expunction in a district court for the county in
648	648	which:
649	649	(1) the person was arrested; or
650	650	(2) the offense was alleged to have occurred.
651	651	SECTION 3.04. Subchapter H, Chapter 55A, Code of Criminal
652	652	Procedure, is amended by adding Article 55A.3565 to read as
653	653	follows:
654	654	Art. 55A.3565. RETENTION AND INSPECTION OF CERTAIN RECORDS
655	655	AFTER EXPUNCTION OF DECRIMINALIZED CANNABIS-RELATED OFFENSE. (a)
656	656	This article applies only to records and files for which an
657	657	expunction order has been issued on the basis of an entitlement
658	658	under Article 55A.007.
659	659	(b) Notwithstanding any other law, the law enforcement
660	660	agency, the prosecuting attorney responsible for investigating the
661	661	offense for which the expunction order was issued, and the clerk of
662	662	the applicable court may retain the records and files relating to
663	663	the arrest for the offense, including any records and files related
664	664	to a conviction of the offense, to be used only:
665	665	(1) for the investigation or prosecution of another
666	666	offense arising out of the same transaction for which the person who
667	667	is the subject of the order was arrested; or
668	668	(2) by the office of the governor in determining
669	669	whether to issue a pardon or commute a sentence.
670	670	(c) The records and files for which the expunction order was
671	671	issued are not open for inspection by anyone, except that the
672	672	records and files are open for inspection by the person who is the
673	673	subject of the order or for the purposes described by Subsection
674	674	(b).
675	675	ARTICLE 4. CONFORMING CHANGES
676	676	SECTION 4.01. Section 122.103(c), Agriculture Code, is
677	677	amended to read as follows:
678	678	(c) A qualified applicant who along with the application
679	679	submits proof to the department that the applicant holds a license
680	680	under Chapter 487 or 491, Health and Safety Code, is not required to
681	681	pay an application fee, and the department shall issue the license
682	682	to the applicant within the time prescribed by Subsection (b).
683	683	SECTION 4.02. Article 102.006(b), Code of Criminal
684	684	Procedure, is amended to read as follows:
685	685	(b) The fees under Subsection (a) or the fee under
686	686	Subsection (a-1), as applicable, shall be waived if:
687	687	(1) the petitioner seeks expunction of a criminal
688	688	record that relates to an arrest for an offense of which the person
689	689	was acquitted, other than an acquittal for an offense described by
690	690	Article 55A.151, and the petition for expunction is filed not later
691	691	than the 30th day after the date of the acquittal; or
692	692	(2) the petitioner is entitled to expunction under
693	693	Article 55A.007.
694	694	SECTION 4.03. Section 411.093(a), Government Code, is
695	695	amended to read as follows:
696	696	(a) The Texas Department of Licensing and Regulation is
697	697	entitled to obtain criminal history record information as provided
698	698	by Subsection (b) that relates to:
699	699	(1) an applicant for or the holder of:
700	700	(A) a driver education instructor license under
701	701	Chapter 1001, Education Code;
702	702	(B) a license under Chapter 202, Occupations
703	703	Code;
704	704	(C) a license under Chapter 401, Occupations
705	705	Code;
706	706	(D) a license under Chapter 402, Occupations
707	707	Code; or
708	708	(E) an instructor license or motorcycle school
709	709	license under Chapter 662, Transportation Code;
710	710	(2) a person who is:
711	711	(A) an applicant for or the holder of a license
712	712	under Chapter 91, Labor Code; or
713	713	(B) a controlling person, as defined by Chapter
714	714	91, Labor Code, of an entity described by Paragraph (A); [or]
715	715	(3) a person who:
716	716	(A) is an applicant for or the holder of a license
717	717	under Chapter 455, Occupations Code; or
718	718	(B) has an interest described under Section
719	719	455.1525(e), Occupations Code, in an entity described by Paragraph
720	720	(A); or
721	721	(4) a person who is an applicant for or holds a license
722	722	issued under Chapter 491, Health and Safety Code, to be a cannabis
723	723	grower, cannabis establishment, cannabis secure transporter, or
724	724	cannabis testing facility, as defined by Section 491.0001, Health
725	725	and Safety Code.
726	726	SECTION 4.04. Section 443.202(a), Health and Safety Code,
727	727	is amended to read as follows:
728	728	(a) This section does not apply to low-THC cannabis
729	729	regulated under Chapter 487 or cannabis regulated under Chapter
730	730	491.
731	731	SECTION 4.05. Section 443.2025(a), Health and Safety Code,
732	732	is amended to read as follows:
733	733	(a) This section does not apply to low-THC cannabis
734	734	regulated under Chapter 487 or cannabis regulated under Chapter
735	735	491.
736	736	SECTION 4.06. Section 481.062, Health and Safety Code, is
737	737	amended to read as follows:
738	738	Sec. 481.062. EXEMPTIONS. (a) The following persons are
739	739	not required to register and may possess a controlled substance
740	740	under this chapter [without registering with the Federal Drug
741	741	Enforcement Administration]:
742	742	(1) an agent or employee of a registered manufacturer,
743	743	distributor, analyzer, or dispenser of the controlled substance
744	744	[who is registered with the Federal Drug Enforcement Administration
745	745	and] acting in the usual course of business or employment;
746	746	(2) a common or contract carrier, a warehouseman, or
747	747	an employee of a carrier or warehouseman whose possession of the
748	748	controlled substance is in the usual course of business or
749	749	employment;
750	750	(3) an ultimate user or a person in possession of the
751	751	controlled substance under a lawful order of a practitioner or in
752	752	lawful possession of the controlled substance if it is listed in
753	753	Schedule V;
754	754	(4) an officer or employee of this state, another
755	755	state, a political subdivision of this state or another state, or
756	756	the United States who is lawfully engaged in the enforcement of a
757	757	law relating to a controlled substance or drug or to a customs law
758	758	and authorized to possess the controlled substance in the discharge
759	759	of the person's official duties;
760	760	(5) if the substance is tetrahydrocannabinol or one of
761	761	its derivatives:
762	762	(A) a Department of State Health Services
763	763	official, a medical school researcher, or a research program
764	764	participant possessing the substance as authorized under
765	765	Subchapter G; or
766	766	(B) a practitioner or an ultimate user possessing
767	767	the substance as a participant in a federally approved therapeutic
768	768	research program that the commissioner has reviewed and found, in
769	769	writing, to contain a medically responsible research protocol; [or]
770	770	(6) a dispensing organization licensed under Chapter
771	771	487 that possesses low-THC cannabis;
772	772	(7) a cannabis grower, cannabis establishment,
773	773	cannabis secure transporter, or cannabis testing facility licensed
774	774	under Chapter 491 that possesses cannabis or cannabis products; or
775	775	(8) a person who possesses cannabis or cannabis
776	776	products in accordance with Chapter 491.
777	777	(b) In this section, "cannabis" and "cannabis product" have
778	778	the meanings assigned to those terms by Section 491.0001.
779	779	SECTION 4.07. Section 481.111, Health and Safety Code, is
780	780	amended by adding Subsections (g) and (h) to read as follows:
781	781	(g) Sections 481.113, 481.116, 481.120, 481.121, and
782	782	481.125 do not apply to a person who engages in the acquisition,
783	783	possession, production, processing, cultivation, delivery,
784	784	transportation, disposal, transfer, or use of a raw material used
785	785	in or by-product created by the production or cultivation of
786	786	cannabis or cannabis products if the conduct is expressly
787	787	authorized by Subchapter B, Chapter 491.
788	788	(h) For purposes of Subsection (g), "cannabis" and
789	789	"cannabis product" have the meanings assigned to those terms by
790	790	Section 491.0001.
791	791	SECTION 4.08. Section 551.004, Occupations Code, is amended
792	792	by amending Subsection (a) and adding Subsection (a-1) to read as
793	793	follows:
794	794	(a) This subtitle does not apply to:
795	795	(1) a practitioner licensed by the appropriate state
796	796	board who supplies a patient of the practitioner with a drug in a
797	797	manner authorized by state or federal law and who does not operate a
798	798	pharmacy for the retailing of prescription drugs;
799	799	(2) a member of the faculty of a college of pharmacy
800	800	recognized by the board who is a pharmacist and who performs the
801	801	pharmacist's services only for the benefit of the college;
802	802	(3) a person who procures prescription drugs for
803	803	lawful research, teaching, or testing and not for resale;
804	804	(4) a home and community support services agency that
805	805	possesses a dangerous drug as authorized by Section 142.0061,
806	806	142.0062, or 142.0063, Health and Safety Code; [or]
807	807	(5) a dispensing organization[, as defined by Section
808	808	487.001, Health and Safety Code,] that cultivates, processes, and
809	809	dispenses low-THC cannabis, as authorized by Chapter 487, Health
810	810	and Safety Code, to a patient listed in the compassionate-use
811	811	registry established under that chapter;
812	812	(6) a cannabis grower, cannabis establishment,
813	813	cannabis secure transporter, or cannabis testing facility licensed
814	814	under Chapter 491, Health and Safety Code, that cultivates,
815	815	manufactures, processes, distributes, delivers sells, tests,
816	816	transports, or dispenses cannabis or a cannabis product as
817	817	authorized by that chapter; or
818	818	(7) a person who transfers cannabis without
819	819	remuneration as authorized by Section 491.0051, Health and Safety
820	820	Code.
821	821	(a-1) For purposes of this section:
822	822	(1) "Cannabis," "cannabis establishment," "cannabis
823	823	grower," "cannabis product," "cannabis secure transporter," and
824	824	"cannabis testing facility" have the meanings assigned by Section
825	825	491.0001, Health and Safety Code.
826	826	(2) "Dispensing organization" and "low-THC cannabis"
827	827	have the meanings assigned by Section 487.001, Health and Safety
828	828	Code.
829	829	SECTION 4.09. Section 151.313(c), Tax Code, is amended to
830	830	read as follows:
831	831	(c) A product is a drug or medicine for purposes of this
832	832	section if the product:
833	833	(1) is intended for use in the diagnosis, cure,
834	834	mitigation, treatment, or prevention of disease, illness, injury,
835	835	or pain;
836	836	(2) is applied to the human body or is a product that a
837	837	human ingests or inhales;
838	838	(3) is not an appliance or device; [and]
839	839	(4) is not food; and
840	840	(5) is not cannabis or a cannabis product, as those
841	841	terms are defined by Section 491.0001, Health and Safety Code.
842	842	SECTION 4.10. Section 151.314, Tax Code, is amended by
843	843	adding Subsection (i) to read as follows:
844	844	(i) The exemption provided by Subsection (a) does not apply
845	845	to a cannabis product, as defined by Section 491.0001, Health and
846	846	Safety Code.
847	847	SECTION 4.11. Section 151.316, Tax Code, is amended by
848	848	adding Subsection (e) to read as follows:
849	849	(e) The exemption provided by Subsection (a)(5) does not
850	850	apply to cannabis, as defined by Section 491.0001, Health and
851	851	Safety Code.
852	852	ARTICLE 5. TRANSITION; EFFECTIVE DATE
853	853	SECTION 5.01. (a) Not later than July 1, 2026, the Texas
854	854	Commission of Licensing and Regulation shall adopt rules as
855	855	required to implement, administer, and enforce Chapter 491, Health
856	856	and Safety Code, as added by this Act.
857	857	(b) Not later than November 1, 2026, the Texas Department of
858	858	Licensing and Regulation shall begin licensing cannabis growers,
859	859	cannabis establishments, cannabis secure transporters, and
860	860	cannabis testing facilities in accordance with Chapter 491, Health
861	861	and Safety Code, as added by this Act, provided that the applicants
862	862	for a license have met all requirements for approval under Chapter
863	863	491, Health and Safety Code, as added by this Act.
864	864	SECTION 5.02. The changes in law made by this Act do not
865	865	affect tax liability accruing before the effective date of this
866	866	Act. That liability continues in effect as if this Act had not been
867	867	enacted, and the former law is continued in effect for the
868	868	collection of taxes due and for civil and criminal enforcement of
869	869	the liability for those taxes.
870	870	SECTION 5.03. The changes in law made by this Act to Chapter
871	871	55A, Code of Criminal Procedure, apply to an expunction of arrest
872	872	records and files relating to an offense that was committed before
873	873	the effective date of this Act.
874	874	SECTION 5.04. This Act takes effect September 1, 2025.