87R5442 JSC-D
 
  By: González of Dallas H.B. No. 3248
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of the cultivation, manufacture,
  processing, distribution, sale, testing, transportation, delivery,
  transfer, possession, use, and taxation of cannabis and cannabis
  products and local regulation of cannabis establishments;
  authorizing the imposition of fees; requiring an occupational
  license; creating a criminal offense; imposing a tax.
         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 491 to read as follows:
  CHAPTER 491. REGULATION OF CANNABIS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 491.0001.  DEFINITIONS. In this chapter:
               (1)  "Adult" means an individual 21 years of age or
  older.
               (2)  "Cannabis" means the plant Cannabis sativa L.,
  whether growing or not, the seeds of that plant, and every compound,
  manufacture, salt, derivative, mixture, or preparation of that
  plant or its seeds. The term includes cannabis concentrate. The
  term does not include:
                     (A)  the mature stalks of the plant or fiber
  produced from the stalks;
                     (B)  oil or cake made from the seeds of the plant;
                     (C)  a compound, manufacture, salt, derivative,
  mixture, or preparation of the mature stalks, fiber, oil, or cake;
  or
                     (D)  the sterilized seeds of the plant that are
  incapable of beginning germination.
               (3)  "Cannabis concentrate" means the resin extracted
  from a part of the plant Cannabis sativa L. or a compound,
  manufacture, salt, derivative, mixture, or preparation of the
  resin.
               (4)  "Cannabis establishment" means an entity licensed
  by the department under this chapter to process and dispense
  cannabis and cannabis products to an adult.
               (5)  "Cannabis grower" means an entity licensed by the
  department to cultivate cannabis for sale and distribution to a
  cannabis establishment.
               (6)  "Cannabis product" means a product that contains
  cannabis and is intended for use or consumption by humans,
  including as an edible product or as a topical product, ointment,
  oil, or tincture. The term includes products that consist of
  cannabis and other ingredients.
               (7)  "Cannabis-related drug paraphernalia" means
  equipment, a product, or material that is used or intended for use
  in:
                     (A)  planting, propagating, cultivating, growing,
  harvesting, manufacturing, compounding, converting, producing,
  processing, preparing, testing, analyzing, packaging, repackaging,
  storing, or containing cannabis or a cannabis product; or
                     (B)  introducing cannabis or a cannabis product
  into the human body.
               (8)  "Cannabis secure transporter" means an entity
  licensed by the department under this chapter to transport cannabis
  from a cannabis grower to a cannabis establishment.
               (9)  "Cannabis testing facility" means an entity
  licensed by the department under this chapter to analyze the safety
  and potency of cannabis and cannabis products.
               (10)  "Commission" means the Texas Commission of
  Licensing and Regulation.
               (11)  "Cultivate" means to propagate, breed, grow,
  harvest, dry, cure, or separate parts of the cannabis plant by
  manual or mechanical means.
               (12)  "Department" means the Texas Department of
  Licensing and Regulation.
               (13)  "Executive director" means the executive
  director of the department.
               (14)  "Marihuana" has the meaning assigned by Section
  481.002.
               (15)  "Process" means to separate or otherwise prepare
  parts of the cannabis plant and to compound, blend, extract,
  infuse, or otherwise make or prepare cannabis concentrate or
  cannabis products.
  SUBCHAPTER B. PROTECTIONS FROM LEGAL ACTION RELATED TO CANNABIS
         Sec. 491.0051.  AUTHORIZED CONDUCT: PERSONAL USE OF
  CANNABIS.  An adult is authorized under this chapter to:
               (1)  use, possess, and transport not more than 2.5
  ounces of cannabis, except that not more than 15 grams of that
  amount may be in the form of cannabis concentrate;
               (2)  transfer without remuneration to another adult not
  more than 2.5 ounces of cannabis, except that not more than 15 grams
  of that amount may be in the form of cannabis concentrate and
  provided that the transfer is not advertised or promoted to the
  public;
               (3)  possess, store, or process on the premises of the
  adult's private residence not more than 10 ounces of cannabis,
  provided that the amount in excess of 2.5 ounces is stored in a
  container or area equipped with locks or other security devices
  that restrict access to the container or area;
               (4)  use, possess, process, transport, or transfer to
  another adult without remuneration an amount of cannabis products
  specified by rule of the commission as the allowable amount of
  cannabis for purposes of this subdivision; and
               (5)  use, possess, transport, or transfer to another
  adult without remuneration cannabis-related drug paraphernalia.
         Sec. 491.0052.  AUTHORIZED CONDUCT: RETAIL CANNABIS
  OPERATIONS.  This chapter authorizes the conduct of:
               (1)  a cannabis grower director, manager, or employee
  who, acting within the scope of the grower's license:
                     (A)  cultivates cannabis or produces cannabis
  products for sale or transfer to a cannabis establishment; and
                     (B)  possesses cannabis or cannabis-related drug
  paraphernalia;
               (2)  a cannabis establishment director, manager, or
  employee who, acting within the scope of the establishment's
  license, possesses cannabis or cannabis products or transfers or
  sells cannabis, cannabis products, or cannabis-related drug
  paraphernalia to an adult;
               (3)  a cannabis secure transporter director, manager,
  or employee who, acting within the scope of the secure
  transporter's license, transports, transfers, or delivers cannabis
  or cannabis products from a cannabis grower to a cannabis
  establishment; and
               (4)  a cannabis testing facility director, manager, or
  employee who, acting within the scope of the facility's license,
  possesses or tests cannabis, cannabis products, or
  cannabis-related drug paraphernalia.
         Sec. 491.0053.  PROTECTION FROM LEGAL ACTION FOR AUTHORIZED
  CONDUCT. (a)  A person is not subject to arrest, prosecution,
  forfeiture of property, or penalty in any manner or denial of any
  right or privilege, including any civil penalty or disciplinary
  action by a court or occupational or professional licensing board
  or bureau solely due to conduct authorized under Section 491.0051
  or 491.0052.
         (b)  The fact that a person engages in conduct authorized by
  Section 491.0051 or 491.0052 does not in itself constitute grounds
  for denying, limiting, or restricting conservatorship or
  possession of or access to a child under Title 5, Family Code.
         Sec. 491.0054.  PROHIBITION OF CANNABIS ON PRIVATE PROPERTY;
  EXCEPTION.  (a)  Except as otherwise provided by Subsection (b), a
  person may prohibit or restrict the possession, consumption,
  cultivation, distribution, processing, sale, or display of
  cannabis or cannabis products on property the person owns,
  occupies, or manages.
         (b)  A person may not prohibit a residential tenant under a
  lease agreement from possessing cannabis, cannabis products, or
  cannabis-related drug paraphernalia or consuming cannabis by means
  other than smoking on the premises.
         Sec. 491.0055.  CONDUCT NOT AUTHORIZED UNDER THIS CHAPTER.
  This chapter does not authorize the following conduct:
               (1)  operating a motor vehicle while intoxicated or
  otherwise violating Chapter 49, Penal Code;
               (2)  smoking or otherwise consuming cannabis in:
                     (A)  a motor vehicle while the vehicle is on a
  public road;
                     (B)  an aircraft, while the aircraft is in flight
  or in a public area;
                     (C)  a watercraft, while the watercraft is on a
  public waterway; or
                     (D)  a public place, unless:
                           (i)  the public place is an area designated
  by the applicable political subdivision as an area where using
  cannabis is permissible; and
                           (ii)  the area described by Subparagraph (i)
  is not accessible to persons younger than 21 years of age;
               (3)  possessing or consuming cannabis or cannabis
  products or possessing cannabis-related drug paraphernalia:
                     (A)  on the premises of a public or private
  child-care facility, prekindergarten, or primary or secondary
  school;
                     (B)  on a school bus that serves a facility or
  school described by Paragraph (A); or
                     (C)  on the premises of a correctional facility,
  as defined by Article 18A.251, Code of Criminal Procedure, or a
  civil commitment facility; or
               (4)  separating resin from the cannabis plant by butane
  extraction or another method that uses a substance with a
  flashpoint below 100 degrees Fahrenheit in a public place or motor
  vehicle or within the curtilage of a residential structure.
  SUBCHAPTER C. DUTIES OF DEPARTMENT
         Sec. 491.0101.  DUTIES OF DEPARTMENT. The department shall
  administer this chapter.
         Sec. 491.0102.  RULES; FEES.  (a)  The commission shall adopt
  all necessary rules for the administration and enforcement of this
  chapter, including rules imposing fees under this chapter in
  amounts sufficient to cover the cost of administering this chapter.
         (b)  The commission by rule shall set application and license
  fees under this chapter in amounts sufficient to administer this
  chapter and may annually adjust the fees for inflation.
         (c)  A fee collected under this chapter shall be deposited to
  the credit of the cannabis regulation account established under
  Section 491.0251.
         (d)  The commission shall adopt rules for the reasonable
  regulation of cannabis growers and cannabis establishments,
  including rules that:
               (1)  restrict the use of dangerous pesticides;
               (2)  regulate the packaging and labeling of cannabis
  products available at a cannabis establishment;
               (3)  restrict advertising and display of cannabis and
  cannabis products;
               (4)  require recordkeeping and monitoring to track the
  transfer of cannabis and cannabis products between license holders;
  and
               (5)  require security measures, provided that the
  security measures do not restrict the cultivation of cannabis
  outdoors or in greenhouses.
         Sec. 491.0103.  TESTING, PACKAGING, AND LABELING STANDARDS.  
  (a)  The commission by rule shall establish standards for:
               (1)  the operation of cannabis testing facilities;
               (2)  the testing of cannabis and cannabis products; and
               (3)  packaging and labeling requirements for cannabis
  and cannabis products.
         (b)  In establishing standards for packaging and labeling
  requirements under Subsection (a)(3), the commission shall require
  that:
               (1)  cannabis and cannabis products be packaged in
  opaque, resealable, child-resistant packaging that does not
  resemble and may not be easily confused with typical packaging for
  commercially sold candy;
               (2)  cannabis and cannabis products be clearly labeled;
  and
               (3)  the label for a cannabis product disclose the
  amount of cannabis contained in that product.
         Sec. 491.0104.  SECURE TRANSPORTATION OF CANNABIS. The
  commission by rule shall establish standards applicable to cannabis
  secure transporters, including standards to ensure all cannabis
  establishments are properly served.
         Sec. 491.0105.  CONFLICT OF INTEREST. (a)  A person who is
  involved in the implementation, administration, or enforcement of
  this chapter as a member of the commission, an employee of the
  department, or a consultant to the commission or the department may
  not also hold a pecuniary interest in any entity licensed by the
  department under this chapter.
         (b)  A person who holds a pecuniary interest in a cannabis
  testing facility or a cannabis secure transporter who holds a
  license issued under this chapter may not hold a pecuniary interest
  in any entity that holds a cannabis establishment or cannabis
  grower license issued under this chapter.
         (c)  A person may not hold a pecuniary interest in more than
  five entities that are licensed under this chapter as a cannabis
  grower, except as provided by department rule.
         Sec. 491.0106.  ANNUAL REPORT. The executive director shall
  annually submit to the governor, the executive commissioner of the
  Health and Human Services Commission, and the legislature a report
  providing the following information regarding licensing and
  regulation under this chapter:
               (1)  the number of applications received for each class
  of license under this chapter;
               (2)  the number of licenses issued for each class of
  license under this chapter;
               (3)  demographic information pertaining to license
  holders;
               (4)  a description of any fines imposed on a license
  holder or disciplinary actions taken against a license holder by
  the department; and
               (5)  a statement of revenues and expenses of the
  department related to the implementation, administration, and
  enforcement of this chapter.
  SUBCHAPTER D. LICENSING
         Sec. 491.0151.  LICENSE REQUIRED. A person must hold a
  license issued by the department under this chapter to operate as a
  cannabis grower, cannabis establishment, cannabis secure
  transporter, or cannabis testing facility.
         Sec. 491.0152.  QUALIFICATIONS FOR LICENSURE. The
  commission by rule shall provide for each class of license issued
  under this chapter qualifications for licensure that are
  demonstrably related to the operations authorized and duties
  imposed under that class of license.
         Sec. 491.0153.  APPLICATION. (a)  A person may apply for an
  initial or renewal license under this chapter by submitting a form
  prescribed by the department along with the application fee in an
  amount set by the commission.
         (b)  The application must indicate the class of license
  sought and include the name and address of the applicant, the name
  and address of each of the applicant's directors, managers, and
  employees, and any other information considered necessary by the
  department to determine the applicant's eligibility for the
  license.
         Sec. 491.0154.  ISSUANCE, RENEWAL, OR DENIAL OF LICENSE.  
  (a)  The department shall issue or renew a license under this
  chapter only if:
               (1)  the department determines the applicant meets the
  qualifications for the class of license sought established under
  Section 491.0152; and
               (2)  the applicant is in compliance with any applicable
  local regulations.
         (b)  If the department denies the issuance or renewal of a
  license under Subsection (a), the department shall give written
  notice of the grounds for denial to the applicant.
         (c)  A license issued or renewed under this section expires
  as determined by the department in accordance with Section 411.511,
  Government Code.
         Sec. 491.0155.  DUTY TO MAINTAIN QUALIFICATIONS. A license
  holder shall maintain compliance at all times with the
  qualifications for the applicable class of license established
  under Section 491.0152.
         Sec. 491.0156.  LICENSE SUSPENSION OR REVOCATION. (a)  The
  department may at any time suspend or revoke a license issued under
  this chapter if the department determines that the license holder
  has not maintained the qualifications established under Section
  491.0152 or has failed to comply with a duty imposed under this
  chapter.
         (b)  The department shall give written notice to a 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)  After suspending or revoking a license issued under this
  chapter, the department shall notify the Department of Public
  Safety. The public safety director of the Department of Public
  Safety may seize or place under seal all cannabis, cannabis
  products, and cannabis-related drug paraphernalia owned or
  possessed by the license holder. If the license is revoked, a
  disposition may not be made of the seized or sealed cannabis,
  cannabis products, 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
  cannabis, cannabis products, and drug paraphernalia may be
  forfeited to the state as provided under Subchapter E, Chapter 481.
         (d)  Chapter 2001, Government Code, applies to a proceeding
  under this section.
         Sec. 491.0157.  CRIMINAL HISTORY BACKGROUND CHECK. (a)  In
  addition to satisfying the other requirements provided by
  commission rule under this chapter, an applicant for a license
  under this chapter must submit to the department a complete and
  legible set of fingerprints, on a form prescribed by the
  commission, for the purpose of obtaining criminal history record
  information from the Department of Public Safety and the Federal
  Bureau of Investigation.
         (b)  The department may deny a license to an applicant who
  does not comply with the requirement of Subsection (a). Issuance of
  a license by the department is conditioned on the department
  obtaining the applicant's criminal history record information
  under this section.
         (c)  The commission by rule shall establish criteria for
  determining whether a person passes the criminal history background
  check for purposes of this section. The rules adopted under this
  section may not disqualify a person for licensure solely for a
  conviction of an offense that involves the possession of marihuana
  or the delivery of marihuana to a person 18 years of age or older.
  SUBCHAPTER E. DUTIES OF LICENSE HOLDERS
         Sec. 491.0201.  DUTIES RELATING TO DISPENSING CANNABIS OR
  CANNABIS PRODUCTS. Before dispensing cannabis or cannabis products
  to an adult, a cannabis establishment must make reasonable efforts
  to verify that:
               (1)  the person receiving the cannabis or cannabis
  product is an adult;
               (2)  the cannabis or cannabis product complies with
  department testing and labeling rules; and
               (3)  the amount dispensed is not greater than the
  amount of cannabis or cannabis product allowed for personal use as
  provided by Section 491.0051.
         Sec. 491.0202.  DUTIES RELATING TO SECURITY. (a)  A license
  holder shall ensure that the cultivation, processing, sale, or
  display of cannabis, cannabis products, and cannabis-related drug
  paraphernalia is not visible from a public place without the use of
  optical aids or aircraft.
         (b)  A license holder may not cultivate, process, store, or
  sell cannabis, cannabis products, or cannabis-related drug
  paraphernalia at a location other than the physical address
  approved by the department for the establishment under the license
  issued to the establishment under this chapter.
         (c)  A license holder shall adopt reasonable security
  measures necessary to restrict access to areas where cannabis,
  cannabis products, or cannabis-related drug paraphernalia are
  stored and to prevent theft of cannabis, cannabis products, and
  cannabis-related drug paraphernalia.
         Sec. 491.0203.  LICENSE HOLDER OPERATIONS. (a)  A license
  holder may not employ or otherwise accept the services of a person
  younger than 21 years of age.
         (b)  A cannabis establishment may not sell tobacco products,
  as defined by Section 155.001, Tax Code.
         Sec. 491.0204.  MONTHLY SALES REPORT. A cannabis
  establishment shall monthly submit a report to the comptroller
  specifying the amount of cannabis sold, the number of cannabis
  products sold, the number and types of cannabis-related drug
  paraphernalia sold, and the amount of money collected in sales by
  the establishment during the preceding month.
  SUBCHAPTER F. FUNDING FOR REGULATION, OVERSIGHT, TESTING, AND
  QUALITY CONTROL
         Sec. 491.0251.  CANNABIS REGULATION ACCOUNT. (a) The
  cannabis regulation account is an account in the general revenue
  fund administered by the department.
         (b)  The account consists of:
               (1)  money deposited to the credit of the account under
  Section 166.0004, Tax Code; and
               (2)  fees deposited to the credit of the account under
  Section 491.0102.
         (c)  Money in the account may be appropriated only to the
  department for implementing and administering this chapter.
         Sec. 491.0252.  CANNABIS TESTING AND QUALITY CONTROL
  ACCOUNT. (a) The cannabis testing and quality control account is
  an account in the general revenue fund administered by the
  Department of Public Safety.
         (b)  The account consists of money deposited to the credit of
  the account under Section 166.0004, Tax Code.
         (c)  Money in the account may be appropriated only to the
  Department of Public Safety for monitoring compliance with testing
  and quality control requirements imposed on license holders by this
  chapter or by commission rules adopted under this chapter.
         Sec. 491.0253.  CANNABIS ESTABLISHMENT REGULATION AND
  OVERSIGHT LOCAL SHARE ACCOUNT; PAYMENT FROM ACCOUNT. (a) In this
  section:
               (1)  "Account" means the cannabis establishment
  regulation and oversight local share account created under this
  section.
               (2)  "Fiscal year" means the fiscal year of a
  qualifying local government.
               (3)  "Qualifying local government" means a
  municipality or county in which at least one cannabis establishment
  is located during any portion of the applicable fiscal year.
         (b)  The cannabis establishment regulation and oversight
  local share account is an account in the general revenue fund
  administered by the comptroller.
         (c)  The account consists of money deposited to the credit of
  the account under Section 166.0004, Tax Code.
         (d)  Money in the account may be used by the comptroller only
  to make a cannabis establishment regulation assistance payment to a
  qualifying local government in the manner provided by this section.
         (e)  To serve the state purpose of ensuring that local
  governments in which cannabis establishments are located may
  effectively participate in the regulation and oversight of those
  establishments, a qualifying local government is entitled to a
  cannabis establishment regulation assistance payment from the
  state for each fiscal year that the local government is a qualifying
  local government.
         (f)  Except as provided by Subsection (j), the amount of the
  cannabis establishment regulation assistance payment to which a
  qualifying local government is entitled for a fiscal year is equal
  to the cost incurred by the local government to enforce regulations
  adopted under Subchapter G.
         (g)  Not later than April 1 of the year following the end of a
  fiscal year for which a qualifying local government is entitled to a
  cannabis establishment regulation assistance payment, the
  qualifying local government may submit an application to the
  comptroller to receive a cannabis establishment regulation
  assistance payment for that fiscal year. The application must be
  made on a form prescribed by the comptroller. The comptroller may
  require the qualifying local government to submit any information
  the comptroller needs to determine the amount of the cannabis
  establishment regulation assistance payment to which the
  qualifying local government is entitled.
         (h)  A qualifying local government that does not submit an
  application to the comptroller by the date prescribed by Subsection
  (g) is not entitled to a cannabis establishment regulation
  assistance payment for the fiscal year for which that deadline
  applies.
         (i)  The comptroller shall review each application by a local
  government to determine whether the local government is entitled to
  a cannabis establishment regulation assistance payment. If the
  comptroller determines that the local government is entitled to the
  payment, the comptroller shall remit the payment using available
  money in the account to the qualifying local government not later
  than the 30th day after the date the application for the payment is
  made.
         (j)  If at the time a cannabis establishment regulation
  assistance payment must be remitted to a qualifying local
  government under Subsection (i) the comptroller determines the
  available amount in the account is insufficient to make the
  payment, the comptroller may reduce the amount of the payment to the
  qualifying local government. If more than one payment must be
  remitted at a time when the available amount in the account is
  insufficient to make those payments, the comptroller shall make
  reduced payments to each qualifying local government. The
  comptroller shall allocate the reductions in the amount of the
  payments in a manner that is proportionate to the number of cannabis
  establishments in each qualifying local government.
         (k)  The comptroller shall adopt rules necessary to
  implement this section.
  SUBCHAPTER G. LOCAL REGULATION AND OVERSIGHT
         Sec. 491.0301.  DEFINITION.  In this subchapter, "health
  authority" has the meaning assigned by Section 431.002.
         Sec. 491.0302.  LOCAL AUTHORIZATION REQUIRED. A license
  holder under this chapter may not operate in a county or
  municipality without an order or ordinance adopted by the county or
  municipality, as applicable, authorizing the operation of cannabis
  growers, cannabis establishments, cannabis secure transporters, or
  cannabis testing facilities in the county or municipality.
         Sec. 491.0303.  LOCAL REGULATION. A county or municipality
  that authorizes the operation of cannabis growers, cannabis
  establishments, or cannabis testing facilities in the county or
  municipality may adopt regulations consistent with this chapter
  governing the hours of operation, location, manner of conducting
  business, and number of cannabis growers, cannabis establishments,
  cannabis secure transporters, or cannabis testing facilities.
         Sec. 491.0304.  PUBLIC HEALTH INSPECTIONS. A health
  authority may, on presenting appropriate credentials to the license
  holder or employee of the cannabis establishment:
               (1)  enter at reasonable times the premises of a
  cannabis establishment;
               (2)  enter a vehicle being used to transport cannabis;
  or
               (3)  inspect at reasonable times, within reasonable
  limits, and in a reasonable manner, the establishment or vehicle
  and all equipment, finished and unfinished materials, containers,
  and labeling of any item.
         Sec. 491.0305.  COMPLAINTS. (a)  A county, municipality, or
  health authority, as applicable, shall maintain a record of any
  complaints made regarding the operations of a cannabis
  establishment.
         (b)  A county, municipality, or health authority, as
  applicable, shall investigate a complaint or refer the complaint to
  the department, as appropriate.
  SUBCHAPTER H. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS PRODUCT
  TO MINORS PROHIBITED
         Sec. 491.0351.  DEFINITION. In this subchapter, "minor"
  means a person younger than 21 years of age.
         Sec. 491.0352.  SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS
  PRODUCT TO MINORS PROHIBITED; PROOF OF AGE REQUIRED.  (a)  A person
  commits an offense if the person, under the authority of this
  chapter:
               (1)  sells, gives, or causes to be sold or given
  cannabis or cannabis products to a minor; or
               (2)  sells, gives, or causes to be sold or given
  cannabis or cannabis products to another person who intends to
  deliver the cannabis or cannabis products to a minor.
         (b)  If an offense under this section occurs in connection
  with a sale by an employee of the owner of a cannabis establishment,
  the employee is criminally responsible for the offense and is
  subject to prosecution.
         (c)  An offense under this section is a Class C misdemeanor.
         (d)  It is a defense to prosecution under Subsection (a)(1)
  that the person to whom the cannabis or cannabis products were sold
  or given presented to the defendant apparently valid proof of
  identification.
         (e)  A proof of identification satisfies the requirements of
  Subsection (d) if it contains a physical description and photograph
  consistent with the person's appearance, purports to establish that
  the person is 21 years of age or older, and was issued by a
  governmental agency. The proof of identification may include a
  driver's license issued by this state or another state, a passport,
  or an identification card issued by a state or the federal
  government.
         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 491, 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, 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;
               (2-a)  is an applicant for or holds a license issued
  under Chapter 491, Health and Safety Code, to be a cannabis grower,
  cannabis establishment, cannabis secure transporter, or cannabis
  testing facility, as defined by Section 491.0001, 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;
               (2-a) Chapter 491, Health and Safety Code;
               (3)  Chapter 1702, Occupations Code;
               (4)  Chapter 1956, Occupations Code;
               (5)  Section 521.2476, Transportation Code; and
               (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 cannabis regulated under Chapter
  491.
         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 cannabis regulated under Chapter
  491.
         SECTION 7.  Section 481.062, Health and Safety Code, is
  amended to read as follows:
         Sec. 481.062.  EXEMPTIONS. (a)  The following persons are
  not required to register and may possess a controlled substance
  under this chapter [without registering with the Federal Drug
  Enforcement Administration]:
               (1)  an agent or employee of a registered manufacturer,
  distributor, analyzer, or dispenser of the controlled substance
  [who is registered with the 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 cannabis grower, cannabis establishment,
  cannabis secure transporter, or cannabis testing facility licensed
  under Chapter 491 that possesses cannabis or cannabis products; or
               (8)  a person who possesses cannabis or cannabis
  products in accordance with Chapter 491.
         (b)  In this section, "cannabis" and "cannabis product" have
  the meanings assigned to those terms by Section 491.0001.
         SECTION 8.  Section 481.111, Health and Safety Code, is
  amended by adding Subsections (g) and (h) to read as follows:
         (g)  Sections 481.113, 481.116, 481.120, 481.121, and
  481.125 do not apply to a person who engages in the acquisition,
  possession, production, processing, cultivation, delivery,
  transportation, disposal, transfer, or use of a raw material used
  in or by-product created by the production or cultivation of
  cannabis or cannabis products if the conduct is expressly
  authorized by Subchapter B, Chapter 491.
         (h)  For purposes of Subsection (g), "cannabis" and
  "cannabis product" have the meanings assigned to those terms by
  Section 491.0001.
         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 dispensing organization[, as defined by Section
  487.001, Health and Safety Code,] that cultivates, processes, and
  dispenses low-THC cannabis, as authorized by Chapter 487, Health
  and Safety Code, to a patient listed in the compassionate-use
  registry established under that chapter;
               (6)  a cannabis grower, cannabis establishment,
  cannabis secure transporter, or cannabis testing facility licensed
  under Chapter 491, Health and Safety Code, that cultivates,
  manufactures, processes, distributes, delivers sells, tests,
  transports, or dispenses cannabis or a cannabis product as
  authorized by that chapter; or
               (7)  a person who transfers cannabis without
  remuneration as authorized by Section 491.0051, Health and Safety
  Code.
         (a-1)  For purposes of this section:
               (1)  "Cannabis," "cannabis establishment," "cannabis
  grower," "cannabis product," "cannabis secure transporter," and
  "cannabis testing facility" have the meanings assigned by Section
  491.0001, Health and Safety Code.
               (2)  "Dispensing organization" and "low-THC cannabis"
  have the meanings assigned by Section 487.001, Health and Safety
  Code.
         SECTION 10.  Section 151.313(c), Tax Code, is amended to
  read as follows:
         (c)  A product is a drug or medicine for purposes of this
  section if the product:
               (1)  is intended for use in the diagnosis, cure,
  mitigation, treatment, or prevention of disease, illness, injury,
  or pain;
               (2)  is applied to the human body or is a product that a
  human ingests or inhales;
               (3)  is not an appliance or device; [and]
               (4)  is not food; and
               (5)  is not cannabis or a cannabis product, as those
  terms are defined by Section 491.0001, Health and Safety Code.
         SECTION 11.  Section 151.314, Tax Code, is amended by adding
  Subsection (i) to read as follows:
         (i)  The exemption provided by Subsection (a) does not apply
  to a cannabis product, as defined by Section 491.0001, Health and
  Safety Code.
         SECTION 12.  Section 151.316, Tax Code, is amended by adding
  Subsection (e) to read as follows:
         (e)  The exemption provided by Subsection (a)(5) does not
  apply to cannabis, as defined by Section 491.0001, Health and
  Safety Code.
         SECTION 13.  Subtitle E, Title 2, Tax Code, is amended by
  adding Chapter 166 to read as follows:
               CHAPTER 166. TAX ON CANNABIS AND RELATED PRODUCTS
         Sec. 166.0001.  DEFINITIONS. In this chapter, "cannabis"
  and "cannabis product" have the meanings assigned by Section
  491.0001, Health and Safety Code.
         Sec. 166.0002.  CANNABIS SALES TAX. (a) A tax is imposed on
  each sale in this state of cannabis and cannabis products.
         (b)  The tax rate is 10 percent of the sales price of cannabis
  or a cannabis product.
         Sec. 166.0003.  APPLICATION OF OTHER PROVISIONS OF CODE.
  (a)  The tax imposed under this chapter is in addition to the taxes
  imposed under Chapter 151.
         (b)  Except as provided by this chapter:
               (1)  the tax imposed under this chapter is
  administered, imposed, collected, and enforced in the same manner
  as the taxes under Chapter 151 are administered, imposed,
  collected, and enforced; and
               (2)  the provisions of Chapter 151 applicable to the
  sales tax imposed under Subchapter C, Chapter 151, apply to the tax
  imposed under this chapter.
         Sec. 166.0004.  DISPOSITION OF PROCEEDS. The comptroller
  shall deposit the proceeds from the tax imposed under this chapter
  as follows:
               (1)  10 percent to the credit of the cannabis
  regulation account under Section 491.0251, Health and Safety Code;
               (2)  10 percent to the credit of the cannabis testing
  and quality control account under Section 491.0252, Health and
  Safety Code;
               (3)  20 percent to the credit of the cannabis
  establishment regulation and oversight local share account under
  Section 491.0253, Health and Safety Code; and
               (4)  the remainder to the credit of the foundation
  school fund.
         SECTION 14.  (a) Not later than July 1, 2022, the Texas
  Commission of Licensing and Regulation shall adopt rules as
  required to implement, administer, and enforce Chapter 491, Health
  and Safety Code, as added by this Act.
         (b)  Not later than November 1, 2022, the Texas Department of
  Licensing and Regulation shall begin licensing cannabis growers,
  cannabis establishments, cannabis secure transporters, and
  cannabis testing facilities in accordance with Chapter 491, Health
  and Safety Code, as added by this Act, provided that the applicants
  for a license have met all requirements for approval under Chapter
  491, Health and Safety Code, as added by this Act.
         SECTION 15.  The changes in law made by this Act do not
  affect tax liability accruing before the effective date of this
  Act. That liability continues in effect as if this Act had not been
  enacted, and the former law is continued in effect for the
  collection of taxes due and for civil and criminal enforcement of
  the liability for those taxes.
         SECTION 16.  This Act takes effect September 1, 2021.