By: King, Moody, Oliverson, et al. H.B. No. 46

A BILL TO BE ENTITLED

AN ACT

relating to the medical use of low-THC cannabis under and the administration of the Texas Compassionate-Use Program; requiring registration.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 487.053(a), Health and Safety Code, is amended to read as follows:

(a) The department shall:

(1) issue or renew a license to operate as a dispensing organization to each applicant who satisfies the requirements established under this chapter; and

(2) register directors, owners, managers, members, and employees of each dispensing organization.

SECTION 2. Section 487.054, Health and Safety Code, is amended by adding Subsections (c) and (d) to read as follows:

(c) Information within the registry regarding patient identification, including the fact that a person is listed as a patient in the registry, is confidential and may only be accessed by the department, registered physicians, and dispensing organizations for the purposes of this chapter. Confidential information under this subsection may not be disclosed except as authorized under this chapter and is not subject to disclosure under Chapter 552, Government Code.

(d) Notwithstanding Subsection (c), on request by a patient, the department may release patient information contained in the registry to the patient or a person designated by the patient.

SECTION 3. Section 487.101, Health and Safety Code, is amended to read as follows:

Sec. 487.101. LICENSE REQUIRED. (a) A license issued by the department under this chapter is required to operate a dispensing organization.

(b) A dispensing organization licensed under this chapter is not required to apply for an additional license for the use of a satellite location for secure storage of low-THC cannabis if:

(1) the address of the satellite location was included in the application; or

(2) the dispensing organization obtains approval from the department under Section 487.1035.

SECTION 4. Section 487.102, Health and Safety Code, is amended to read as follows:

Sec. 487.102. ELIGIBILITY FOR LICENSE. An applicant for a license to operate as a dispensing organization is eligible for the license if:

(1) as determined by the department, the applicant possesses:

(A) the technical and technological ability to cultivate and produce low-THC cannabis;

(B) the ability to secure:

(i) the resources and personnel necessary to operate as a dispensing organization; and

(ii) premises reasonably located to allow patients listed on the compassionate-use registry access to the organization through existing infrastructure;

(C) the ability to maintain accountability for the raw materials, the finished product, and any by-products used or produced in the cultivation or production of low-THC cannabis to prevent unlawful access to or unlawful diversion or possession of those materials, products, or by-products; and

(D) the financial ability to maintain operations for not less than two years from the date of application;

(2) each director, owner, manager, member, or employee of the applicant is registered under Subchapter D; and

(3) the applicant satisfies any additional criteria determined by the director to be necessary to safely implement this chapter.

SECTION 5. Section 487.103(b), Health and Safety Code, is amended to read as follows:

(b) The application must include:

(1) the name and address of the applicant;

(2)[,] the name and address of each of the applicant's directors, owners, managers, members, and employees;

(3) the address of any satellite location that will be used by the applicant for secure storage of low-THC cannabis under Section 487.1035;[,] and

(4) any other information considered necessary by the department to determine the applicant's eligibility for the license.

SECTION 6. Subchapter C, Chapter 487, Health and Safety Code, is amended by adding Section 487.1035 to read as follows:

Sec. 487.1035. SATELLITE LOCATIONS. (a) A dispensing organization licensed under this chapter may operate one or more satellite locations in addition to the organization's primary location to securely store low-THC cannabis for distribution.

(b) A satellite location must be approved by the department before a dispensing organization may operate the location. A dispensing organization may apply for approval in the form and manner prescribed by the department.

(c) The department must act on an application submitted under Subsection (b) not later than the 180th day after the date the application is submitted to the department.

(d) The director shall adopt rules regarding the design and security requirements for satellite locations.

(e) A dispensing organization may not operate more than one satellite location in a public health region designated under Section 121.007 until the dispensing organization operates one satellite location in each public health region.

(f) A location previously approved by the department as a patient pickup location before September 1, 2025, is considered to be approved as a satellite location under Subsection (b) for purposes of this section and is permitted to:

(1) operate as a patient pickup location; and

(2) securely store low-THC cannabis for distribution.

SECTION 7. Section 487.104, Health and Safety Code, is amended by amending Subsection (b) and adding Subsections (b-1), (d), (d-1), (e), and (f) to read as follows:

(b) Except as provided by Subsection (b-1), if [If] the department denies the issuance or renewal of a license under Subsection (a), the applicant is entitled to a hearing. Chapter 2001, Government Code, applies to a proceeding under this section.

(b-1) If the department denies the issuance of a license under this section to an applicant that has never held a license under this section, the applicant is not entitled to a hearing.

(d) The department shall issue 15 licenses under this section to dispensing organizations in this state provided that the department receives applications from a sufficient number of applicants meeting the requirements for eligibility under this subchapter.

(d-1) The department shall issue initial licenses to dispensing organizations under this section based on a competitive evaluation of applicant qualifications relative to other applicants.

(e) The department shall issue and renew licenses under this section in a manner that ensures adequate access to low-THC cannabis for patients registered in the compassionate-use registry in each public health region designated under Section 121.007.

(f) The director shall adopt rules to establish a timeline for reviewing and taking action on an application submitted under this section.

SECTION 8. Subchapter C, Chapter 487, Health and Safety Code, is amended by adding Section 487.1045 to read as follows:

Sec. 487.1045. REQUIREMENT OF LICENSE HOLDER TO BEGIN AND MAINTAIN OPERATIONS. (a) An applicant issued a license to operate a dispensing organization must begin dispensing low-THC cannabis not later than 24 months after the date the license is issued and continue dispensing low-THC cannabis during the term of a license issued under this subchapter.

(b) The director shall adopt rules to:

(1) monitor whether a dispensing organization is using a license issued under this subchapter to dispense low-THC cannabis; and

(2) revoke the license of a dispensing organization that does not dispense low-THC cannabis within the time required by this section or that discontinues dispensing low-THC cannabis during the term of a license.

SECTION 9. Section 487.105, Health and Safety Code, is amended by amending Subsections (a) and (b) and adding Subsection (c-1) to read as follows:

(a) An applicant for the issuance or renewal of a license to operate as a dispensing organization shall provide the department with the applicant's name and the name of each of the applicant's directors, owners, managers, members, and employees.

(b) Before a dispensing organization licensee hires a manager or employee for the organization, the licensee must provide the department with the name of the prospective manager or employee. The licensee may not transfer the license to another person before that prospective applicant and the applicant's directors, owners, managers, members, and employees pass a criminal history background check and are registered as required by Subchapter D.

(c-1) This section does not apply to a director, owner, manager, member, or employee who does not exercise direct control over the daily operations of the dispensing organization.

SECTION 10. Subchapter C, Chapter 487, Health and Safety Code, is amended by adding Section 487.1071 to read as follows:

Sec. 487.1071. CANNABINOIDS ELIGIBLE FOR DISPENSING. (a) In this section, "phytocannabinoid" means a chemical substance:

(1) created naturally by a plant of the species Cannabis sativa L. that is separated from the plant by a mechanical or chemical extraction process;

(2) created naturally by a plant of the species Cannabis sativa L. that binds to or interacts with the cannabinoid receptors of the endocannabinoid system; or

(3) produced by decarboxylation from a naturally occurring cannabinoid acid without the use of a chemical catalyst.

(b) A dispensing organization may not dispense a low-THC cannabis product that contains a cannabinoid that is not a phytocannabinoid.

SECTION 11. Section 487.151(a), Health and Safety Code, is amended to read as follows:

(a) An individual who is a director, owner, manager, member, or employee of a dispensing organization must apply for and obtain a registration under this section.

SECTION 12. Section 487.201, Health and Safety Code, is amended to read as follows:

Sec. 487.201. COUNTIES AND MUNICIPALITIES MAY NOT PROHIBIT LOW-THC CANNABIS. A municipality, county, or other political subdivision may not enact, adopt, or enforce a rule, ordinance, order, resolution, or other regulation that prohibits the cultivation, production, storage, dispensing, or possession of low-THC cannabis, as authorized by this chapter.

SECTION 13. Section 169.001, Occupations Code, is amended by adding Subdivisions (2) and (6) and amending Subdivisions (3), (4), and (5) to read as follows:

(2) "Executive commissioner" means the executive commissioner of the Health and Human Services Commission.

(3) "Low-THC 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 that contains not more than one percent by weight of tetrahydrocannabinols in each dosage unit.

(4) "Medical use" means the ingestion, absorption, inhalation, or insertion by a means of administration other than by smoking of a prescribed amount of low-THC cannabis by a person for whom low-THC cannabis is prescribed under this chapter.

(5) "Smoking" means burning or igniting a substance and inhaling the smoke. The term does not include inhaling a medication or other substance that is otherwise aerosolized or vaporized for administration by pulmonary inhalation.

(6) "Veteran" means a person 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) an auxiliary service of one of those branches of the armed forces.

SECTION 14. Section 169.003, Occupations Code, is amended to read as follows:

Sec. 169.003. PRESCRIPTION OF LOW-THC CANNABIS. (a) A physician described by Section 169.002 may prescribe low-THC cannabis to a patient if:

(1) the patient is a permanent resident of the state;

(2) the physician complies with the registration requirements of Section 169.004; and

(3) the physician certifies to the department that:

(A) the patient:

(i) is diagnosed with:

(a) [(i)] epilepsy;

(b) [(ii)] a seizure disorder;

(c) [(iii)] multiple sclerosis;

(d) [(iv)] spasticity;

(e) [(v)] amyotrophic lateral sclerosis;

(f) [(vi)] autism;

(g) [(vii)] cancer;

(h) [(viii)] an incurable neurodegenerative disease;

(i) [(ix)] post-traumatic stress disorder; [or]

(j) a condition that causes chronic pain, for which a physician would otherwise prescribe an opioid;

(k) glaucoma;

(l) traumatic brain injury;

(m) spinal neuropathy;

(n) Crohn's disease or other inflammatory bowel disease;

(o) degenerative disc disease;

(p) a terminal illness or a condition for which a patient is receiving hospice or palliative care;

(q) [(x)] a medical condition that is approved for a research program under Subchapter F, Chapter 487, Health and Safety Code, and for which the patient is receiving treatment under that program; or

(r) a medical condition designated by the Department of State Health Services under Subsection (c); or

(ii) is an honorably discharged veteran who would benefit from medical use to address a medical condition; and

(B) the physician determines the risk of the medical use of low-THC cannabis by the patient is reasonable in light of the potential benefit for the patient.

(b) Each prescription issued by a physician to a patient for low-THC cannabis:

(1) may only provide for a 90-day supply of low-THC cannabis based on the dosage prescribed to the patient; and

(2) may provide up to four refills of a 90-day supply of low-THC cannabis.

(c) The Department of State Health Services may designate medical conditions for which a physician may prescribe low-THC cannabis under this section. The executive commissioner shall adopt rules for the approval of medical conditions under this section.

(d) If a patient is diagnosed with a medical condition not listed in Subsection (a)(3)(A)(i), a physician may submit to the Department of State Health Services a request for the department to designate the condition as a medical condition for which a physician may prescribe low-THC cannabis under this section. The request must be accompanied by medical evidence such as peer-reviewed published research demonstrating that low-THC cannabis may be beneficial to treat that medical condition. The executive commissioner by rule shall prescribe the manner in which a physician may submit a request under this subsection.

SECTION 15. Chapter 169, Occupations Code, is amended by adding Section 169.0031 to read as follows:

Sec. 169.0031. PRESCRIPTION MONITORING. (a) For each prescription issued for low-THC cannabis under this chapter, the physician must submit prescribing information to the Texas State Board of Pharmacy to be included in the official prescription information under Section 481.076, Health and Safety Code, in the same manner as for a prescription issued under Section 481.074 of that code.

(b) Information submitted to the Texas State Board of Pharmacy under this section may be accessed only as provided under Section 481.076, Health and Safety Code.

(c) The Texas State Board of Pharmacy may adopt rules to implement this section.

SECTION 16. Chapter 169, Occupations Code, is amended by adding Section 169.006 to read as follows:

Sec. 169.006. ADMINISTRATION OF LOW-THC CANNABIS BY PULMONARY INHALATION. (a) A physician may prescribe pulmonary inhalation of an aerosol or vapor as a means of administration of low-THC cannabis if the physician determines that based on the patient's condition there is a medical necessity for that means of administration.

(b) Notwithstanding any other provision of this chapter, low-THC cannabis prescribed under Subsection (a) for pulmonary inhalation may exceed one percent by weight of tetrahydrocannabinols in each dosage unit of the substance to be aerosolized or vaporized. The prescription under Subsection (a) must specify the amount of tetrahydrocannabinols in each dosage unit to be administered by pulmonary inhalation that is medically necessary based on the patient's condition.

(c) The executive commissioner shall adopt rules:

(1) related to medical devices for pulmonary inhalation of low-THC cannabis; and

(2) establishing a reasonable timeline for reviewing and granting approval for medical devices for pulmonary inhalation.

SECTION 17. Not later than October 1, 2025:

(1) the director of the Department of Public Safety shall adopt the rules necessary to implement the changes in law made by this Act to Chapter 487, Health and Safety Code; and

(2) the executive commissioner of the Health and Human Services Commission shall adopt the rules necessary to implement Section 169.003, Occupations Code, as amended by this Act, and Section 169.006, Occupations Code, as added by this Act.

SECTION 18. Provided that applicants for a license to operate as a dispensing organization have met the requirements for approval provided by Subchapter C, Chapter 487, Health and Safety Code, as amended by this Act, the Department of Public Safety shall:

(1) not later than December 1, 2025, license at least nine new dispensing organizations from applications submitted before July 1, 2025; and

(2) not later than April 1, 2026, in addition to any licenses issued by the Department of Public Safety under Subdivision (1) of this section, license at least three new dispensing organizations from applications submitted at any time.

SECTION 19. (a) Not later than December 1, 2025, the Texas State Board of Pharmacy shall adopt rules to implement Section 169.0031, Occupations Code, as added by this Act.

(b) Section 169.0031, Occupations Code, as added by this Act, applies only to a prescription issued on or after January 1, 2026.

SECTION 20. This Act takes effect September 1, 2025.