87R3691 JSC-D
 
  By: Dominguez H.B. No. 1109
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the use of medical cannabis by veterans for
  post-traumatic stress disorder and the licensing of associated
  cultivating or dispensing organizations; authorizing fees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle C, Title 6, Health and Safety Code, is
  amended by adding Chapter 487A to read as follows:
  CHAPTER 487A. MEDICAL CANNABIS FOR CERTAIN VETERANS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 487A.001.  DEFINITIONS. In this chapter:
               (1)  "Commission" means the Health and Human Services
  Commission.
               (2)  "Cultivating or dispensing facility" means a
  facility that:
                     (A)  cultivates, processes, manufactures, or
  dispenses medical cannabis under this chapter; and
                     (B)  is owned or operated by a cultivating or
  dispensing organization licensed under Subchapter C.
               (3)  "Cultivating or dispensing organization" means an
  organization that cultivates, processes, manufactures, or
  dispenses medical cannabis under this chapter.
               (4)  "Executive commissioner" means the executive
  commissioner of the Health and Human Services Commission.
               (5)  "Historically underutilized business" has the
  meaning assigned by Section 2161.001, Government Code.
               (6)  "Medical cannabis" means the plant Cannabis sativa
  L. and any part of that plant or any compound, manufacture, salt,
  derivative, mixture, preparation, resin, or oil of that plant.
               (7)  "Post-traumatic stress disorder" means a disorder
  that:
                     (A)  meets the diagnostic criteria for
  posttraumatic stress disorder specified by the American
  Psychiatric Association in the Diagnostic and Statistical Manual of
  Mental Disorders, fifth edition, or a later edition adopted by the
  executive commissioner; and
                     (B)  results in an impairment of a person's
  functioning in the person's community, employment, family, school,
  or social group.
               (8)  "Psychoactive medication" means a medication that
  is prescribed for the treatment of symptoms of psychosis or other
  severe mental or emotional disorders and that is used to exercise an
  effect on the central nervous system to influence and modify
  behavior, cognition, or affective state when treating the symptoms
  of mental illness. The term includes the following categories when
  used as described by this subdivision:
                     (A)  antipsychotics or neuroleptics;
                     (B)  antidepressants;
                     (C)  agents for control of mania or depression;
                     (D)  antianxiety agents;
                     (E)  sedatives, hypnotics, or other
  sleep-promoting drugs; and
                     (F)  psychomotor stimulants.
               (9)  "Veteran" means an individual who has served in:
                     (A)  the army, navy, air force, coast guard, or
  marine corps of the United States;
                     (B)  the state military forces, as defined by
  Section 431.001, Government Code; or
                     (C)  a reserve component of the armed forces of
  the United States.
         Sec. 487A.002.  ADMINISTRATION BY COMMISSION; RULES. (a)
  The commission shall administer this chapter.
         (b)  The executive commissioner shall adopt any rules
  necessary for the administration and enforcement of this chapter.
  SUBCHAPTER B. PURCHASE OF MEDICAL CANNABIS
         Sec. 487A.051.  ELIGIBILITY; PURCHASER PERMIT REQUIRED. A
  veteran suffering from post-traumatic stress disorder is eligible
  to purchase medical cannabis from a cultivating or dispensing
  facility if the veteran is issued a purchaser permit under this
  subchapter.
         Sec. 487A.052.  APPLICATION. A veteran may apply to the
  commission for a purchaser permit by submitting a completed
  application form as prescribed by the commission and:
               (1)  proof of the veteran's military service; and
               (2)  proof of the veteran's post-traumatic stress
  disorder, including:
                     (A)  a written diagnosis from a physician;
                     (B)  the veteran's current prescription for a
  psychoactive medication; or
                     (C)  any other proof acceptable to the commission
  as provided by rule of the executive commissioner.
         Sec. 487A.053.  ISSUANCE OF PERMIT. The commission shall
  issue a purchaser permit to a veteran who submits an application
  under Section 487A.052 if the commission determines that the
  veteran is eligible for the permit.
  SUBCHAPTER C. CULTIVATING OR DISPENSING ORGANIZATION
         Sec. 487A.101.  LICENSE REQUIRED. A cultivating or
  dispensing organization may not cultivate, process, or dispense
  medical cannabis for purposes of this chapter without a license
  issued under this subchapter.
         Sec. 487A.102.  ELIGIBILITY FOR LICENSE. To qualify for a
  license under this subchapter, a cultivating or dispensing
  organization must:
               (1)  for the purposes of research described by Section
  487A.103, have entered into a partnership with:
                     (A)  a health system that owns or operates a
  health care facility with at least 200 beds;
                     (B)  a public university in this state; or
                     (C)  a registered clinical research organization;
               (2)  have sufficient net cash assets to ensure
  financial stability and continued operations;
               (3)  have sufficient documented experience in the
  cultivation, extraction, manufacturing, or dispensing of cannabis
  in a jurisdiction in which cannabis is legal; and
               (4)  demonstrate experience in extraction and
  refinement of medical cannabis to create products in tightly
  controlled ratios of tetrahydrocannabinol and cannabidiol.
         Sec. 487A.103.  MEDICAL CANNABIS RESEARCH. (a)  To maintain
  eligibility for a license under this subchapter, a cultivating or
  dispensing organization in conjunction with the other entity in a
  partnership described by Section 487A.102(1) shall conduct
  research on a continual basis to determine the potential risks and
  benefits of medical cannabis as a treatment for post-traumatic
  stress disorder.
         (b)  A cultivating or dispensing organization shall use the
  research conducted under Subsection (a) to provide the optimal
  ratios of tetrahydrocannabinol and cannabidiol for the treatment of
  post-traumatic stress disorder.
         (c)  The cultivating or dispensing organization shall make
  the findings, conclusions, data, and methodology of the research
  conducted under Subsection (a) available for peer review.
         Sec. 487A.104.  LICENSE APPLICATION. (a) An eligible
  cultivating or dispensing organization may apply for a license
  under this subchapter by submitting an application, in the form
  provided by the commission, along with the application fee
  prescribed by Section 487A.111.
         (b)  The application must:
               (1)  contain:
                     (A)  the name and address of the applicant; and
                     (B)  the name and address of each member of the
  applicant's governing authority, as defined by Section 1.002,
  Business Organizations Code;
               (2)  include a plan to hire a workforce for its
  cultivating or dispensing facilities that, to the extent possible,
  is composed of at least 33 percent veterans;
               (3)  include a plan to use technology and processes to
  minimize water and electricity uses by the applicant's cannabis
  cultivating and processing facilities while maintaining the
  production of high quality medical cannabis;
               (4)  contain a detailed explanation of the applicant's
  capability to cultivate and manufacture a sufficient amount of
  quality-controlled medical cannabis to support the qualifying
  veteran base in this state; and
               (5)  contain any other information considered
  necessary by the commission to determine the applicant's
  eligibility for the license.
         Sec. 487A.105.  CRIMINAL HISTORY BACKGROUND CHECK. (a) An
  applicant for the issuance or renewal of a license under this
  subchapter shall provide to the Department of Public Safety the
  applicant's name and the name of:
               (1)  each person who has a 20 percent equity interest in
  the applicant; and
               (2)  each employee or prospective employee of each of
  the applicant's cultivating or dispensing facilities.
         (b)  The Department of Public Safety shall conduct a criminal
  history background check on each individual whose name is provided
  to the department under Subsection (a). The public safety director
  of the Department of Public Safety by rule shall:
               (1)  require each individual whose name is provided to
  the department under Subsection (a) to submit a complete set of
  fingerprints to the department on a form prescribed by the
  department for purposes of a criminal history background check
  under this section; and
               (2)  establish criteria for determining whether an
  individual passes the criminal history background check for the
  purposes of this section.
         (c)  After conducting a criminal history background check
  under this section, the Department of Public Safety shall notify
  the commission and the applicant organization or relevant facility
  of the organization and the individual who is the subject of the
  criminal history background check as to whether the individual
  passed the criminal history background check.
         Sec. 487A.106.  APPROVAL OR DENIAL OF APPLICATION. (a) The
  commission shall approve the application and issue to the applicant
  a license under this subchapter if the commission determines that:
               (1)  the applicant meets the eligibility requirements
  of Section 487A.102;
               (2)  the applicant satisfies any additional criteria
  determined by the commission to be necessary to implement this
  chapter; and
               (3)  issuance of the license is necessary to ensure
  reasonable statewide access to, and the availability of, medical
  cannabis for qualifying veterans under Subchapter B.
         (b)  The commission shall approve or deny the application not
  later than the 120th day after the date of the filing of a completed
  application with payment of the required fees under Section
  487A.111.
         (c)  If the commission denies the application, the
  commission shall notify the applicant.
         (d)  An applicant whose application is denied is entitled to
  a hearing.  Chapter 2001, Government Code, applies to a hearing
  under this section.
         Sec. 487A.107.  ORGANIZATION PREFERENCES. The commission
  shall give preference to historically underutilized businesses in
  the issuance or renewal of licenses under this subchapter.
         Sec. 487A.108.  COMMENCEMENT OF OPERATIONS ON APPROVAL OF
  APPLICATION. If an organization's application is approved, a
  cultivating or dispensing facility owned or operated by the
  organization shall commence operations in this state not later than
  the 270th day after the date of the approval.
         Sec. 487A.109.  DUTY TO MAINTAIN ELIGIBILITY. Each license
  holder under this subchapter must maintain compliance at all times
  with the eligibility requirements of Section 487A.102 and continue
  to perform the research required under Section 487A.103.
         Sec. 487A.110.  TERM OF LICENSE; RENEWAL. (a) A license
  issued or renewed under this subchapter expires on the second
  anniversary of the date of issuance or renewal, as applicable.
         (b)  A license holder may apply for renewal of a license as
  prescribed by rule of the executive commissioner.
         Sec. 487A.111.  FEES. The executive commissioner by rule
  shall set application and licensing fees under this subchapter in
  amounts sufficient to cover the cost of administering and enforcing
  this chapter.
         Sec. 487A.112.  LICENSE SUSPENSION OR REVOCATION.  (a)  The
  commission may at any time suspend or revoke a license issued under
  this subchapter if the commission determines that:
               (1)  the license holder has not maintained the
  eligibility requirements described by Section 487A.102 or
  continued to perform research as required by Section 487A.103;
               (2)  the license holder has failed to comply with this
  chapter or a rule adopted under this chapter; or
               (3)  the license holder's cultivating or dispensing
  facility has failed to comply with this chapter or a rule adopted
  under this chapter.
         (b)  The commission shall give written notice to the license
  holder of a license suspension or revocation under this section and
  the grounds for the suspension or revocation.  The notice must be
  sent by certified mail, return receipt requested.
         (c)  An applicant whose license is suspended or revoked is
  entitled to a hearing.  Chapter 2001, Government Code, applies to a
  hearing under this section.
         (d)  After suspending or revoking a license issued under this
  subchapter, the commission shall notify the public safety director
  of the Department of Public Safety.  The director may seize or place
  under seal all medical cannabis and drug paraphernalia owned or
  possessed by the license holder.  If the commission orders the
  revocation of the license, a disposition may not be made of the
  seized or sealed medical cannabis or drug paraphernalia until the
  time for administrative appeal of the order has elapsed or until all
  appeals have been concluded.  When a revocation order becomes
  final, all medical cannabis and drug paraphernalia may be forfeited
  to the state as provided under Subchapter E, Chapter 481.
  SUBCHAPTER D.  CULTIVATING AND MANUFACTURING PRACTICES
         Sec. 487A.151.  POTENCY. Each medical cannabis product of a
  cultivating or dispensing facility must consistently test within
  five percent of the stated amount of tetrahydrocannabinol and
  cannabidiol on the label of the product.
         Sec. 487A.152.  SAFETY TESTING.  (a)  Medical cannabis
  products of a cultivating or dispensing facility must be tested for
  harmful substances, including microbials, pesticides, and residual
  solvents.
         (b)  The executive commissioner shall consult with the
  Department of Agriculture in adopting rules setting safety
  standards for medical cannabis made available through a dispensary
  under this chapter.
         Sec. 487A.153.  GOOD MANUFACTURING PRACTICES. Medical
  cannabis to be dispensed under this chapter must be produced using
  good manufacturing practices, as defined by executive commissioner
  rule.
  SUBCHAPTER E. DISPENSING REGULATIONS
         Sec. 487A.201.  FORM OF CANNABIS. (a)  Medical cannabis may
  be dispensed to veterans with a purchaser permit under Subchapter B
  only as a pill, patch, oil, or other derivative form that may be
  produced with consistent concentrations of tetrahydrocannabinol
  and cannabidiol.
         (b)  Edible cannabis products may not be in shapes or forms
  appealing to children.
         Sec. 487A.202.  LABELING.  Each product containing medical
  cannabis dispensed under this chapter must bear a label that
  clearly states the concentrations of tetrahydrocannabinol and
  cannabidiol in the product.
  SUBCHAPTER F. REQUIREMENTS FOR LICENSE HOLDERS AND FACILITIES
         Sec. 487A.251.  CHARITABLE DONATIONS. A license holder must
  annually donate at least five percent of the license holder's net
  profit to a nonprofit organization that focuses on getting veterans
  access to treatment for post-traumatic stress disorder.
         Sec. 487A.252.  LOCATION. A cultivating or dispensing
  facility owned or operated by a license holder may not be located
  within 1,000 feet of a primary or secondary school or day-care
  center that exists on the date of the license holder's initial
  application for licensure under Subchapter C.
         SECTION 2.  Section 122.103(c), Agriculture Code, is amended
  to read as follows:
         (c)  A qualified applicant who along with the application
  submits proof to the department that the applicant holds a license
  under Chapter 487 or 487A, Health and Safety Code, is not required
  to pay an application fee, and the department shall issue the
  license to the applicant within the time prescribed by Subsection
  (b).
         SECTION 3.  Section 411.0891(a), Government Code, is amended
  to read as follows:
         (a)  Subject to Section 411.087, the department is
  authorized to obtain and use criminal history record information
  maintained by the Federal Bureau of Investigation or the department
  that relates to a person who:
               (1)  is an applicant for or holds a registration issued
  by the director under Subchapter C, Chapter 481, Health and Safety
  Code, that authorizes the person to manufacture, distribute,
  analyze, or conduct research with a controlled substance;
               (2)  is an applicant for or holds a registration issued
  by the department under Chapter 487 or 487A, Health and Safety Code,
  to be a director, manager, or employee of a dispensing
  organization, as defined by Section 487.001, Health and Safety
  Code, or a cultivating or dispensing organization, as defined by
  Section 487A.001, Health and Safety Code;
               (3)  is an applicant for or holds an authorization
  issued by the department under Section 521.2476, Transportation
  Code, to do business in this state as a vendor of ignition interlock
  devices;
               (4)  is an applicant for or holds certification by the
  department as an inspection station or an inspector under
  Subchapter G, Chapter 548, Transportation Code, holds an inspection
  station or inspector certificate issued under that subchapter, or
  is the owner of an inspection station operating under that chapter;
  or
               (5)  is an applicant for or holds a certificate of
  registration issued by the department under Chapter 1956,
  Occupations Code, to act as a metal recycling entity.
         SECTION 4.  Section 411.502, Government Code, is amended to
  read as follows:
         Sec. 411.502.  APPLICABILITY.  This subchapter applies to a
  program, and persons regulated under the program, administered by
  the department under the following laws, including rules adopted
  under those laws:
               (1)  Section 411.0625;
               (2)  Chapter 487, Health and Safety Code;
               (3)  Chapter 487A, Health and Safety Code;
               (4)  Chapter 1702, Occupations Code;
               (5) [(4)]  Chapter 1956, Occupations Code;
               (6) [(5)]  Section 521.2476, Transportation Code; and
               (7) [(6)]  Subchapter G, Chapter 548, Transportation
  Code.
         SECTION 5.  Section 443.202(a), Health and Safety Code, is
  amended to read as follows:
         (a)  This section does not apply to low-THC cannabis
  regulated under Chapter 487 or medical cannabis regulated under
  Chapter 487A.
         SECTION 6.  Section 443.2025(a), Health and Safety Code, is
  amended to read as follows:
         (a)  This section does not apply to low-THC cannabis
  regulated under Chapter 487 or medical cannabis regulated under
  Chapter 487A.
         SECTION 7.  Section 481.062(a), Health and Safety Code, is
  amended to read as follows:
         (a)  The following persons may possess a controlled
  substance under this chapter without registering with the federal
  [Federal] Drug Enforcement Administration:
               (1)  an agent or employee of a manufacturer,
  distributor, analyzer, or dispenser of the controlled substance who
  is registered with the federal [Federal] Drug Enforcement
  Administration and acting in the usual course of business or
  employment;
               (2)  a common or contract carrier, a warehouseman, or
  an employee of a carrier or warehouseman whose possession of the
  controlled substance is in the usual course of business or
  employment;
               (3)  an ultimate user or a person in possession of the
  controlled substance under a lawful order of a practitioner or in
  lawful possession of the controlled substance if it is listed in
  Schedule V;
               (4)  an officer or employee of this state, another
  state, a political subdivision of this state or another state, or
  the United States who is lawfully engaged in the enforcement of a
  law relating to a controlled substance or drug or to a customs law
  and authorized to possess the controlled substance in the discharge
  of the person's official duties;
               (5)  if the substance is tetrahydrocannabinol or one of
  its derivatives:
                     (A)  a Department of State Health Services
  official, a medical school researcher, or a research program
  participant possessing the substance as authorized under
  Subchapter G; or
                     (B)  a practitioner or an ultimate user possessing
  the substance as a participant in a federally approved therapeutic
  research program that the commissioner has reviewed and found, in
  writing, to contain a medically responsible research protocol; [or]
               (6)  a dispensing organization licensed under Chapter
  487 that possesses low-THC cannabis;
               (7)  a cultivating or dispensing organization licensed
  under Subchapter C, Chapter 487A, that possesses medical cannabis;
  or
               (8)  an entity described by Section 487A.102(1) in
  partnership with a cultivating or dispensing organization licensed
  under Subchapter C, Chapter 487A, that possesses medical cannabis
  for the purpose of research conducted under Section 487A.103.
         SECTION 8.  Sections 481.111(e) and (f), Health and Safety
  Code, are amended to read as follows:
         (e)  Sections 481.120, 481.121, 481.122, and 481.125 do not
  apply to a person who engages in the acquisition, possession,
  production, cultivation, delivery, or disposal of a raw material
  used in or by-product created by the production or cultivation of
  low-THC cannabis or medical cannabis if the person:
               (1)  for an offense involving possession only of
  marihuana or drug paraphernalia, is a patient for whom low-THC
  cannabis is prescribed under Chapter 169, Occupations Code, or the
  patient's legal guardian, and the person possesses low-THC cannabis
  obtained under a valid prescription from a dispensing organization;
  [or]
               (2)  is a director, manager, or employee of a low-THC
  cannabis dispensing organization and the person, solely in
  performing the person's regular duties at the organization,
  acquires, possesses, produces, cultivates, dispenses, or disposes
  of:
                     (A)  in reasonable quantities, any low-THC
  cannabis or raw materials used in or by-products created by the
  production or cultivation of low-THC cannabis; or
                     (B)  any drug paraphernalia used in the
  acquisition, possession, production, cultivation, delivery, or
  disposal of low-THC cannabis;
               (3)  for an offense involving possession only of
  marihuana or drug paraphernalia, is a patient who holds a purchaser
  permit under Subchapter B, Chapter 487A;
               (4)  is a member of the governing authority, as defined
  by Section 1.002, Business Organizations Code, or a manager or
  employee of a medical cannabis cultivating or dispensing
  organization or facility and the person, solely in performing the
  person's duties at the organization or facility, acquires,
  possesses, produces, cultivates, delivers, or disposes of:
                     (A)  in reasonable quantities, any medical
  cannabis or raw materials used in or by-products created by the
  production or cultivation of medical cannabis; or
                     (B)  any drug paraphernalia used in the
  acquisition, possession, production, cultivation, delivery, or
  disposal of medical cannabis; or
               (5)  is a person associated with an entity described by
  Section 487A.102(1) in partnership with a medical cannabis
  cultivating or dispensing organization and solely in the
  performance of the person's duties performing research under
  Section 487A.103, the person acquires, possesses, produces,
  cultivates, delivers, or disposes of:
                     (A)  in reasonable quantities, any medical
  cannabis or raw materials used in or by-products created by the
  production or cultivation of medical cannabis; or
                     (B)  any drug paraphernalia used in the
  acquisition, possession, production, cultivation, delivery, or
  disposal of medical cannabis.
         (f)  For purposes of Subsection (e):
               (1)  ["Dispensing organization" has the meaning
  assigned by Section 487.001.
               [(2)]  "Low-THC cannabis" has the meaning assigned by
  Section 169.001, Occupations Code.
               (2)  "Low-THC cannabis dispensing organization" means
  a dispensing organization as defined by Section 487.001.
               (3)  "Medical cannabis" has the meaning assigned by
  Section 487A.001.
               (4)  "Medical cannabis cultivating or dispensing
  organization" means an organization licensed under Subchapter C,
  Chapter 487A.
         SECTION 9.  Section 551.004, Occupations Code, is amended by
  amending Subsection (a) and adding Subsection (a-1) to read as
  follows:
         (a)  This subtitle does not apply to:
               (1)  a practitioner licensed by the appropriate state
  board who supplies a patient of the practitioner with a drug in a
  manner authorized by state or federal law and who does not operate a
  pharmacy for the retailing of prescription drugs;
               (2)  a member of the faculty of a college of pharmacy
  recognized by the board who is a pharmacist and who performs the
  pharmacist's services only for the benefit of the college;
               (3)  a person who procures prescription drugs for
  lawful research, teaching, or testing and not for resale;
               (4)  a home and community support services agency that
  possesses a dangerous drug as authorized by Section 142.0061,
  142.0062, or 142.0063, Health and Safety Code; [or]
               (5)  a low-THC cannabis dispensing organization[, as
  defined by Section 487.001, Health and Safety Code,] that
  cultivates, processes, and dispenses low-THC cannabis, as
  authorized by a license issued under Subchapter C, Chapter 487,
  Health and Safety Code, to a patient listed in the
  compassionate-use registry established under that chapter; or
               (6)  a medical cannabis cultivating or dispensing
  organization that cultivates, manufactures, or dispenses medical
  cannabis, as authorized by a license issued under Subchapter C,
  Chapter 487A, Health and Safety Code, to a patient who holds a
  purchaser permit under Subchapter B of that chapter.
         (a-1)  For purposes of Subsections (a)(5) and (6):
               (1)  "Low-THC cannabis dispensing organization" means
  a dispensing organization as defined by Section 487.001, Health and
  Safety Code.
               (2)  "Medical cannabis cultivating or dispensing
  organization" means an organization licensed under Subchapter C,
  Chapter 487A, Health and Safety Code.
         SECTION 10.  Not later than July 1, 2022, the executive
  commissioner of the Health and Human Services Commission shall
  adopt all rules necessary to administer Chapter 487A, Health and
  Safety Code, as added by this Act, and provide copies of
  applications for prospective cultivating or dispensing
  organization licensees.
         SECTION 11.  After September 1, 2022, but not later than
  January 1, 2023, the Health and Human Services Commission shall
  begin accepting applications under Chapter 487A, Health and Safety
  Code, as added by this Act.
         SECTION 12.  This Act takes effect September 1, 2021.