HB48.DOC

SECTION 1. Section 329D-7, Hawaii Revised Statutes, is amended to read as follows:

"§329D-7 Medical marijuana dispensary rules. The department shall establish standards with respect to:

(1) The number of medical marijuana dispensaries that shall be permitted to operate in the State;

(2) A fee structure for the submission of applications and renewals of licenses to dispensaries; provided that the department shall consider the market conditions in each county in determining the license renewal fee amounts;

(3) Criteria and procedures for the consideration and selection, based on merit, of applications for licensure of dispensaries; provided that the criteria shall include but not be limited to an applicant's:

(A) Ability to operate a business;

(B) Financial stability and access to financial resources; provided that applicants for medical marijuana dispensary licenses shall provide documentation that demonstrates control of not less than $1,000,000 in the form of escrow accounts, letters of credit, surety bonds, bank statements, lines of credit or the equivalent to begin operating the dispensary;

(D) Capacity to meet the needs of qualifying patients;

(E) Ability to comply with criminal background check requirements developed pursuant to paragraph (8); and

(F) Ability to comply with inventory controls developed pursuant to paragraph (13);

(4) Specific requirements regarding annual audits and reports required from each production center and dispensary licensed pursuant to this chapter;

(5) Procedures for announced and unannounced inspections by the department or its agents of production centers and dispensaries licensed pursuant to this chapter; provided that inspections for license renewals shall be unannounced;

(6) Security requirements for the operation of production centers and retail dispensing locations; provided that, at a minimum, the following shall be required:

(A) For production centers:

(i) Video monitoring and recording of the premises;

(ii) Fencing that surrounds the premises and that is sufficient to reasonably deter intruders and prevent anyone outside the premises from viewing any marijuana in any form;

(iii) An alarm system; and

(iv) Other reasonable security measures to deter or prevent intruders, as deemed necessary by the department;

(B) For retail dispensing locations:

(i) Presentation of a valid government-issued photo identification and a valid identification as issued by the department pursuant to section 329-123, by a qualifying patient or caregiver, upon entering the premises;

(ii) Video monitoring and recording of the premises;

(iii) An alarm system;

(iv) Exterior lighting; and

(v) Other reasonable security measures as deemed necessary by the department;

(7) Security requirements for the transportation of marijuana and manufactured marijuana products between production centers and retail dispensing locations;

(8) Standards and criminal background checks to ensure the reputable and responsible character and fitness of all license applicants, licensees, employees, subcontractors and their employees, and prospective employees of medical marijuana dispensaries to operate a dispensary; provided that the standards, at a minimum, shall exclude from licensure or employment any person convicted of any felony;

(9) The training and certification of operators and employees of production centers and dispensaries;

(10) The types of manufactured marijuana products that dispensaries shall be authorized to manufacture and sell pursuant to sections 329D-9 and 329D-10; provided that:

(A) The manufacture and sale of manufactured marijuana products shaped to appeal to minors, including but not limited to products that are in the distinct shape of a human, animal, or fruit, shall be prohibited; provided further that this subparagraph shall not apply to products that have geometric shapes or products that are simply fruit flavored; and

(B) The use of additives in manufactured marijuana products, including but not limited to those that are toxic, shall be prohibited if the use of the additive is designed to achieve any of the following purposes:

(i) Making the product more addictive;

(ii) Making the product more appealing to minors; or

(iii) Misleading consumers;

provided further that this subparagraph shall not apply to the use of common baking and cooking items;

(11) Laboratory standards related to testing marijuana and manufactured marijuana products for content, contamination, and consistency;

(12) The quantities of marijuana and manufactured marijuana products that a dispensary may sell or provide to a qualifying patient or primary caregiver; provided that no dispensary shall sell or provide to a qualifying patient or primary caregiver any combination of marijuana and manufactured products that:

(A) During a period of fifteen consecutive days, exceeds the equivalent of four ounces of marijuana; or

(B) During a period of thirty consecutive days, exceeds the equivalent of eight ounces of marijuana;

(13) Dispensary and production center inventory controls to prevent the unauthorized diversion of marijuana or manufactured marijuana products or the distribution of marijuana or manufactured marijuana products to qualifying patients or primary caregivers in quantities that exceed limits established by this chapter; provided that the controls, at a minimum, shall include:

(A) A computer software tracking system as specified in section 329D-6(j) and (k); and

(B) Product packaging standards sufficient to allow law enforcement personnel to reasonably determine the contents of an unopened package;

(14) Limitation to the size or format of signs placed outside a retail dispensing location or production center; provided that the signage limitations, at a minimum, shall comply with section 329D-6(o)(2) and shall not include the image of a cartoon character or other design intended to appeal to children;

(15) The disposal or destruction of unwanted or unused marijuana and manufactured marijuana products;

(16) The enforcement of the following prohibitions against:

(A) The sale or provision of marijuana or manufactured marijuana products to unauthorized persons;

(B) The sale or provision of marijuana or manufactured marijuana products to qualifying patients or primary caregivers in quantities that exceed limits established by this chapter;

(C) Any use or consumption of marijuana or manufactured marijuana products on the premises of a retail dispensing location or production center; and

(D) The distribution of marijuana or manufactured marijuana products, for free, on the premises of a retail dispensing location or production center;

(17) The establishment of a range of penalties for violations of this chapter or rule adopted thereto; and

(18) A process to recognize and register patients who are authorized to purchase, possess, and use medical marijuana in another state, United States territory, or the District of Columbia as qualifying patients in this State; provided that this registration process may commence no sooner than January 1, 2018."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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HOUSE OF REPRESENTATIVES	H.B. NO.	48
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII