By: King, et al. (Senate Sponsor - Perry) H.B. No. 46
         (In the Senate - Received from the House May 14, 2025;
  May 14, 2025, read first time and referred to Committee on State
  Affairs; May 26, 2025, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 9, Nays 0;
  May 26, 2025, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 46 By:  Perry
 
 
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 487.001, Health and Safety Code, is
  amended by adding Subdivision (5) to read as follows:
               (5)  "Owner" means any individual who, directly or
  indirectly, owns, actually or beneficially, any interest of a
  dispensing organization.
         SECTION 2.  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, and
  employees of each dispensing organization.
         SECTION 3.  Sections 487.101 and 487.102, Health and Safety
  Code, are 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.
         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,  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 4.  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, 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 5.  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 90th 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.
         SECTION 6.  Section 487.104, Health and Safety Code, is
  amended by adding Subsections (d), (e), (f), and (g) to read as
  follows:
         (d)  The department shall issue nine 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 approval under this
  subchapter.
         (e)  The department shall issue initial licenses to
  dispensing organizations under this section based on a competitive
  evaluation of applicant qualifications relative to other
  applicants.
         (f)  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.
         (g)  The director shall adopt rules to establish a timeline
  for reviewing and taking action on an application submitted under
  this section.
         SECTION 7.  Subchapter C, Chapter 487, Health and Safety
  Code, is amended by adding Sections 487.1045 and 487.1046 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 department shall adopt rules to:
               (1)  establish a minimum amount of dispensing activity
  in which a dispensing organization must engage to maintain a
  license under this chapter;
               (2)  monitor whether a dispensing organization is
  actively using a license issued under this subchapter to dispense
  low-THC cannabis and the amount of dispensing activity engaged in
  by the organization; and
               (3)  revoke the license of a dispensing organization
  that:
                     (A)  does not dispense low-THC cannabis within the
  time required by this section; or
                     (B)  after the 24-month period following initial
  licensure, discontinues dispensing low-THC cannabis or fails to
  meet the minimum dispensing activity requirement under Subdivision
  (1) during the term of a license.
         Sec. 487.1046.  LOCATION. (a)  A license holder may not
  operate as a dispensing organization or establish a satellite
  location within 1,000 feet of the premises of a school that exists
  on the date of the approval of the license holder's initial
  application for licensure as a dispensing organization or approval
  of a satellite location, as applicable.
         (b)  In this section, "school" and "premises" have the
  meanings assigned by Section 481.134.
         SECTION 8.  Sections 487.105(a) and (b), Health and Safety
  Code, are amended 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, 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, and employees pass a criminal history
  background check and are registered as required by Subchapter D.
         SECTION 9.  Section 487.107, Health and Safety Code, is
  amended by adding Subsection (c) to read as follows:
         (c)  A dispensing organization may not dispense to a person
  low-THC cannabis in a:
               (1)  package or container that contains more than a
  total of one gram of tetrahydrocannabinols; or
               (2)  medical device for pulmonary inhalation that
  contains more than one gram of tetrahydrocannabinols.
         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, 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.  Sections 169.001(3), (4), and (5), Occupations
  Code, are amended to read as follows:
               (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 10 milligrams [one percent by weight] of
  tetrahydrocannabinols in each dosage unit.
               (4)  "Medical use" means the ingestion, absorption, 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.
         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 is diagnosed with:
                           (i)  epilepsy;
                           (ii)  a seizure disorder;
                           (iii)  multiple sclerosis;
                           (iv)  spasticity;
                           (v)  amyotrophic lateral sclerosis;
                           (vi)  autism;
                           (vii)  cancer;
                           (viii)  an incurable neurodegenerative
  disease;
                           (ix)  post-traumatic stress disorder; [or]
                           (x)  a terminal illness or a condition for
  which a patient is receiving hospice care; or
                           (xi)  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; 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.
         SECTION 15.  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)  The executive commissioner of the Health and Human
  Services Commission shall adopt rules related to medical devices
  for pulmonary inhalation of low-THC cannabis. 
         SECTION 16.  Notwithstanding Section 487.1046, Health and
  Safety Code, as added by this Act, a licensed dispensing
  organization that, on the effective date of this Act, is operating
  in a location that is within 1,000 feet of the premises of a school
  may continue to operate in that location.
         SECTION 17.  Not later than April 1, 2026, the Department of
  Public Safety shall license at least nine dispensing organizations
  in accordance with Section 487.104, Health and Safety Code, as
  amended by this Act, including those already licensed and actively
  operating as of the effective date of this Act, provided at least
  nine 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.
         SECTION 18.  Not later than October 1, 2025:
               (1)  the Department of Public Safety shall adopt the
  rules necessary to implement Sections 487.1035 and 487.1045, Health
  and Safety Code, as added by this Act; and
               (2)  the executive commissioner of the Health and Human
  Services Commission shall adopt the rules necessary to implement
  Section 169.006, Occupations Code, as added by this Act.
         SECTION 19.  This Act takes effect September 1, 2025.
 
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