HOUSE OF REPRESENTATIVES |
H.B. NO. |
2260 |
THIRTY-FIRST LEGISLATURE, 2022 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO CANNABIS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that amendments to the State's medical use of cannabis law and medical cannabis dispensary system law are necessary to facilitate the administration of the laws, ensure qualifying patients' access to cannabis, resolve issues that have arisen under existing law, and clarify legislative intent.
The purpose of this Act is to:
(1) Amend the circumstances under which medical cannabis may be transported by and between dispensaries;
(2) Increase the allowable number of plants for production centers;
(3) Increase the number of production centers that may be allowed under a dispensary license;
(4) Increase the number of retail dispensing locations that may be allowed under a dispensary license;
(5) Redefine the term "medical cannabis production center" to include any series of structures located within the same secured perimeter fence-line;
(6) Require the department of health to establish the fee structure for the submission of applications for additional production centers and retail dispensing locations and for dispensary-to-dispensary sales; and
(7) Amend the department of health's duties with respect to the establishment of standards for manufactured cannabis products.
SECTION 2. Section 329-122, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:
"(f) For the purposes of this section,
"transport" means the transportation of cannabis, usable cannabis, or
any manufactured cannabis product between:
(1) A qualifying patient and the qualifying
patient's primary caregiver;
(2) A qualifying out-of-state patient under
eighteen years of age and the caregiver of a qualifying out-of-state patient;
(3) The production centers and the retail
dispensing locations under a dispensary licensee's license; [or]
(4) Dispensaries, to the extent authorized by
section 329D-6(r); or
[(4)] (5) A production center, retail dispensing
location, qualifying patient, primary caregiver, qualifying out‑of-state
patient, or caregiver of a qualifying out-of-state patient and
a certified laboratory for the purpose of laboratory testing; provided
that a qualifying patient, primary caregiver, qualifying out‑of-state
patient, or caregiver of a qualifying out-of-state patient may only transport
up to one gram of cannabis per test to a certified laboratory for laboratory
testing and may only transport the product if the qualifying patient, primary
caregiver, qualifying out-of-state patient, or caregiver of a qualifying
out-of-state patient:
(A) Secures an appointment for testing at a certified laboratory;
(B) Obtains confirmation, which may be electronic, that includes the specific time and date of the appointment and a detailed description of the product and amount to be transported to the certified laboratory for the appointment; and
(C) Has the confirmation, which may be electronic, available during transport.
For purposes of interisland
transportation, "transport" of cannabis, usable cannabis, or any manufactured
cannabis product, by any means is allowable only between dispensaries
to the extent authorized by section 329D-6(r) and between a production center
or retail dispensing location and a certified laboratory for the sole
purpose of laboratory testing pursuant to section 329D-8, as permitted under
section 329D-6(m) and subject to section 329D‑6(j), and with the
understanding that state law and its protections do not apply outside of the
jurisdictional limits of the State. Allowable
transport pursuant to this section does not include interisland transportation
by any means or for any purpose between a [qualified] qualifying
patient, primary caregiver, qualifying out-of-state patient, or
caregiver of a qualifying out-of-state patient and any other entity
or individual, including an individual who is a [qualified] qualifying
patient, primary caregiver, qualifying out-of-state patient, or
caregiver of a qualifying out-of-state patient."
SECTION 3. Section 329D-1, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "medical cannabis dispensary" to read:
""Medical
cannabis dispensary" or "dispensary" means a person licensed by
the State pursuant to this chapter to own, operate, or subcontract [up to
two] no more than three production centers and [up to two] no
more than three retail dispensing locations."
2. By amending the definition of "medical cannabis production center" to read:
""Medical
cannabis production center" or "production center" means a farm
or [facility] series of structures located within the same secured
perimeter fence-line wholly owned, operated, or subcontracted by a person
licensed by the State pursuant to this chapter as a medical cannabis dispensary
that produces cannabis and manufactured cannabis products [solely] to
supply cannabis and manufactured cannabis products to one or more of the retail
dispensing locations of [the] any licensed medical cannabis
dispensary."
SECTION 4. Section 329D-2, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (f) and (g) to read:
"(f) [Up to two] No more than three
production centers shall be allowed under each dispensary license; provided that,
except as otherwise specified in subsection (k), each production center shall be
limited to no more than [three] five thousand cannabis
plants. For purposes of this subsection,
"plant" means a cannabis plant that is greater than twelve vertical inches
in height from where the base of the stalk emerges from the growth medium to the
tallest point of the plant, or greater than twelve horizontal inches in width
from the end of one branch to the end of another branch; provided that multiple
stalks emanating from the same root ball or root system shall be considered
part of the same single plant.
(g) A dispensary licensee may establish [up
to two] no more than three retail dispensing locations under the licensee's dispensary
license, except as otherwise specified in subsection (l)."
2. By amending subsections (k) and (l) to read:
"(k) Notwithstanding any provision of
subsection (f) to the contrary, the department may [determine whether] allow
any dispensary [licensees shall be allowed] licensee an additional
two thousand five hundred cannabis plants at each of the licensee's
production centers[. In]; provided that the licensee shall not be allowed
more than two production centers; provided further that in no case shall a
licensee be allowed more than [five] seven thousand five hundred
plants at a single production center.
(l) Notwithstanding any provision of subsection (g)
to the contrary, the department may determine whether dispensary licensees
shall be allowed [one] no more than two additional retail
dispensing [location] locations per licensee. In considering whether to allow additional
retail dispensing locations, the department shall consider the licensee's
capability to serve and supply medical cannabis to [qualified] qualifying
patients in a rural or underserved geographical area of a county. For purposes of this subsection, a
"rural or underserved geographical area" shall be determined by
considering the number of registered medical cannabis patients that reside
within a certain zip code compared to the quantity of medical cannabis that the
closest production center and retail dispensing location have the capability to
provide."
SECTION 5. Section 329D-4, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (c) to read:
"(c) [A] Pursuant to section 329D-7(2), a
nonrefundable application fee [of $5,000] for each license application shall be submitted to the
department by certified or cashier's check.
Within seven days of approval, a dispensary license fee [of $75,000]
for each license approved shall be submitted to the department by certified or
cashier's check or the department shall issue a license to the next qualified
applicant."
2. By amending subsection (n) to read:
"(n) [A] Pursuant to section 329D-7(2), a
dispensary license may be renewed annually by payment of an annual renewal fee [of
$50,000] and subject to verification by the department through an
unannounced inspection that the individual licensee and entity licensee
continue to meet all licensing requirements from the date the initial licenses
were issued."
SECTION 6. Section 329D-6, Hawaii Revised Statutes, is amended to read as follows:
"§329D-6 Dispensary
operations. (a) No person shall operate a dispensary, [nor]
or engage in the production, manufacture, or sale of cannabis or
manufactured cannabis products, unless the person has obtained a license from
the department pursuant to this chapter.
(b) No dispensary licensee, its officers,
employees, or agents shall provide written certification for the use of medical
cannabis or manufactured cannabis products for any person.
(c) No person under the age of twenty-one shall
be employed by a dispensary licensee.
(d) Notwithstanding any other law to the contrary,
including [but not limited to] sections 378-2 and 378-2.5, dispensaries:
(1) Shall deny employment to any individual who has been:
(A) Convicted of murder in any degree;
(B) Convicted of a class A or class B felony; or
(C) Convicted of a class C felony involving trafficking, distributing, or promoting a schedule I or II controlled substance other than cannabis within the last ten years; and
(2) May deny employment to any individual who has been convicted of a class C felony involving:
(A) Fraud, deceit, misrepresentation, embezzlement, or theft; or
(B) Endangering the welfare of a minor.
Employment under this chapter shall be exempt from section 378‑2(a)(1),
as it relates to arrest and court record discrimination, and section 378-2.5.
(e) Retail dispensing locations shall not be open for retail sales before 8:00 a.m. or after 8:00 p.m., Hawaii‑Aleutian Standard Time, Monday through Sunday.
(f) All dispensary facilities, including [but
not limited to] production centers and retail dispensing locations, shall
be enclosed indoor facilities and shall maintain twenty-four hour security
measures, including [but not limited to] an alarm system, video
monitoring and recording on the premises, and exterior lighting. A dispensary licensee who intends to utilize,
as a production center, an enclosed indoor facility that includes a roof that
is partially or completely transparent or translucent, as provided under
section 329D-1, shall notify the department of that intention [prior to]
before altering or constructing the facility. Production centers shall remain locked at all
times. Retail dispensing locations shall
remain locked at all times, other than business hours as authorized by
subsection (e), and shall only be opened for authorized persons.
(g) In all dispensary facilities, only the licensee, if an individual, registered employees of the dispensary licensee, registered employees of a subcontracted production center or retail dispensing location, employees of a certified laboratory for testing purposes, state employees authorized by the director of health, and law enforcement and other government officials acting in their official capacity shall be permitted to touch or handle any cannabis or manufactured cannabis products, except that a qualifying patient, primary caregiver, qualifying out‑of‑state patient, or caregiver of a qualifying out-of-state patient may receive manufactured cannabis products at a retail dispensing location following completion of a sale.
(h) A dispensary shall provide the department
with the address, tax map key number, and a copy of the premises lease, if
applicable, of the proposed location of a production center allowed under a
license for a county [not] no later than thirty days [prior to]
before any medical cannabis or manufactured cannabis products being
produced or manufactured at that production center.
(i) A dispensary shall provide the department with
the address, tax map key number, and a copy of the premises lease, if applicable,
of the proposed location of each retail dispensing location allowed under a
license [not] no less than sixty days [prior to] before
opening for business.
(j) The department shall establish, maintain, and control a computer software tracking system that shall have real time, twenty-four-hour access to the data of all dispensaries.
(1) The computer software tracking system shall
collect data relating to:
(A) The total amount of cannabis in possession of all dispensaries from either seed or immature plant state, including all plants that are derived from cuttings or cloning, until the cannabis, cannabis plants, or manufactured cannabis product is sold or destroyed pursuant to section 329D-7;
(B) The total amount of manufactured cannabis product inventory, including the equivalent physical weight of cannabis that is used to manufacture manufactured cannabis products, purchased by a qualifying patient, primary caregiver, qualifying out-of-state patient, and caregiver of a qualifying out-of-state patient from all retail dispensing locations in the State in any fifteen‑day period;
(C) The amount of waste produced by each plant at harvest; and
(D) The transport of cannabis and manufactured
cannabis products between production centers and retail dispensing locations[,]
and as authorized by subsection (r), including tracking identification
issued by the tracking system, the identity of the person transporting the
cannabis or manufactured cannabis products, and the make, model, and license
number of the vehicle being used for the transport;
(2) The procurement of the computer software tracking system established pursuant to this subsection shall be exempt from chapter 103D; provided that:
(A) The department shall publicly solicit at least three proposals for the computer software tracking system; and
(B) The selection of the computer software tracking system shall be approved by the director of the department and the chief information officer; and
(3) Notwithstanding any other provision of this subsection to the contrary, once the department has authorized a licensed dispensary to commence sales of cannabis or manufactured cannabis products, if the department's computer software tracking system is inoperable or is not functioning properly, as an alternative to requiring dispensaries to temporarily cease operations, the department may implement an alternate tracking system that will enable a qualifying patient, primary caregiver, qualifying out-of-state patient, and caregiver of a qualifying out-of-state patient to purchase cannabis or manufactured cannabis products from a licensed dispensary on a temporary basis. The department shall seek input regarding the alternate tracking system from medical cannabis licensees. The alternate tracking system may operate as follows:
(A) The department may immediately notify all licensed dispensaries that the computer software tracking system is inoperable; and
(B) Once the computer software tracking system is operational and functioning to meet the requirements of this subsection, the department may notify all licensed dispensaries, and the alternate tracking system in this subsection shall be discontinued.
(k) A dispensary licensed pursuant to this
chapter shall purchase, operate, and maintain a computer software tracking system
that shall:
(1) Interface with the department's computer software tracking system established pursuant to subsection (j);
(2) Allow each licensed dispensary's production center to submit to the department in real time, by automatic identification and data capture, all cannabis, cannabis plants, and manufactured cannabis product inventory in possession of that dispensary from either seed or immature plant state, including all plants that are derived from cuttings or cloning, until the cannabis or manufactured cannabis product is sold or destroyed pursuant to section 329D-7;
(3) Allow the licensed dispensary's retail dispensing location to submit to the department in real time for the total amount of cannabis and manufactured cannabis product purchased by a qualifying patient, primary caregiver, qualifying out-of-state patient, and caregiver of a qualifying out-of-state patient from the dispensary's retail dispensing locations in the State in any fifteen day period; provided that the software tracking system shall impose an automatic stopper in real time, which cannot be overridden, on any further purchases of cannabis or manufactured cannabis products, if the maximum allowable amount of cannabis has already been purchased for the applicable fifteen day period; provided further that additional purchases shall not be permitted until the next applicable period; and
(4) Allow the licensed dispensary to submit all data
required by this subsection to the department and permit the department to
access the data if the department's computer software tracking system is not
functioning properly and sales are made pursuant to the alternate tracking
system under subsection (j).
(l) No free samples of cannabis or manufactured cannabis
products shall be provided at any time, and no consumption of cannabis or
manufactured cannabis products shall be permitted on any dispensary premises.
(m) [A] Except as authorized by subsection
(r), a dispensary shall not transport cannabis or manufactured cannabis
products to another county or another island; provided that this subsection
shall not apply to the transportation of cannabis or any manufactured cannabis
product solely for the purposes of laboratory testing pursuant to section
329D-8, and subject to subsection (j)[;], if no certified laboratory is
located in the county or on the island where the dispensary is located; provided
further that a dispensary shall only transport samples of cannabis and manufactured
cannabis products for laboratory testing for purposes of this subsection in an
amount and manner prescribed by the department, in rules adopted pursuant to this
chapter, and with the understanding that state law and its protections do not
apply outside of the jurisdictional limits of the State.
(n) A dispensary shall be prohibited from
off-premises delivery of cannabis or manufactured cannabis products to a qualifying
patient, primary caregiver, qualifying out-of-state patient, or caregiver of a
qualifying out-of-state patient.
(o) A dispensary shall not:
(1) Display
cannabis or manufactured cannabis products in windows or in public view; or
(2) Post
any signage other than a single sign no greater than one thousand six hundred square
inches bearing only the business or trade name in text without any pictures or
illustrations; provided that if any applicable law or ordinance restricting
outdoor signage is more restrictive, that law or ordinance shall govern.
(p) No cannabis or manufactured cannabis products
shall be transported to, from, or within any federal fort or arsenal, national
park or forest, any other federal enclave, or any other property possessed or
occupied by the federal government.
(q) A dispensary licensed pursuant to this chapter shall be prohibited from providing written certification pursuant to section 329-122 for the use of medical cannabis for any person.
(r) The department may authorize a dispensary to
purchase cannabis and manufactured cannabis products from another dispensary in
a manner prescribed by the department by rules adopted pursuant to this chapter
and chapter 91; provided that:
(1) The purchasing dispensary establishes to the
department's satisfaction that:
(A) The
purchase is necessary to ensure that qualifying patients have continuous access
to cannabis for medical use; or
(B) The
cannabis and manufactured cannabis products are for medical, scientific, or
other legitimate purposes approved by the State;
(2) The selling dispensary may transport no more
than three hundred twenty ounces of cannabis or manufactured cannabis products
to the purchasing dispensary within a
period;
(3) The cannabis and manufactured cannabis
products are transported between the dispensaries for medical, scientific, or other
legitimate purposes approved by the State; and
(4) Nothing in this subsection shall relieve any dispensary of its responsibilities and obligations under this chapter and chapter 329."
SECTION 7. Section 329D-7, Hawaii Revised Statutes, is amended to read as follows:
"§329D-7 Medical cannabis dispensary rules. The department shall establish standards with respect to:
(1) The
number of medical cannabis dispensaries that shall be permitted to operate in
the State;
(2) A
fee structure for [the]:
(A) 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;
(B) The
submission of applications for each additional production center and each additional
retail dispensing location; and
(C) Dispensary-to-dispensary
sales authorized by section 329D-6(r);
(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 cannabis dispensary licenses
shall provide documentation that demonstrates control of [not] no
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;
(C) Ability to comply with the security requirements developed pursuant to paragraph (6);
(D) Capacity to meet the needs of qualifying patients and qualifying out-of-state 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; provided that recordings shall be retained for fifty days;
(ii) Fencing that surrounds the premises and that is sufficient to reasonably deter intruders and prevent anyone outside the premises from viewing any cannabis 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, or section 329-123.5 by a qualifying out-of-state patient or caregiver of a qualifying out-of-state patient, upon entering the premises;
(ii) Video monitoring and recording of the premises; provided that recordings shall be retained for fifty days;
(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 cannabis and manufactured cannabis products between production centers and retail dispensing locations, between dispensaries as authorized by section 329D‑6(r), and between a production center, retail dispensing location, qualifying patient, primary caregiver, qualifying out-of-state patient, or caregiver of a qualifying out-of-state patient and a certified laboratory, pursuant to section 329‑122(f);
(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 cannabis 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 cannabis products that dispensaries shall be authorized to manufacture and sell pursuant to sections 329D-9 and 329D-10;
(11) Laboratory standards related to testing cannabis and manufactured cannabis products for content, contamination, and consistency;
(12) The quantities of cannabis and manufactured cannabis products that a dispensary may sell or provide to a qualifying patient, primary caregiver, qualifying out‑of-state patient, or caregiver of a qualifying out-of-state patient; provided that no dispensary shall sell or provide to a qualifying patient, primary caregiver, qualifying out-of-state patient, or caregiver of a qualifying out-of-state patient any combination of cannabis and manufactured products that:
(A) During a period of fifteen consecutive days, exceeds the equivalent of four ounces of cannabis; or
(B) During a period of thirty consecutive days, exceeds the equivalent of eight ounces of cannabis;
(13) Dispensary and production center inventory controls to prevent the unauthorized diversion of cannabis or manufactured cannabis products or the distribution of cannabis or manufactured cannabis products to a qualifying patient, primary caregiver, qualifying out‑of-state patient, or caregiver of a qualifying out-of-state patient 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 cannabis and manufactured cannabis products;
(16) The enforcement of the following prohibitions against:
(A) The sale or provision of cannabis or manufactured cannabis products to unauthorized persons;
(B) The sale or provision of cannabis or manufactured cannabis products to a qualifying patient, primary caregiver, qualifying out-of-state patient, or caregiver of a qualifying out‑of‑state patient in quantities that exceed limits established by this chapter;
(C) Any use or consumption of cannabis or manufactured cannabis products on the premises of a retail dispensing location or production center; and
(D) The distribution of cannabis or manufactured cannabis 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 cannabis in another state, a United States territory, or the District of Columbia as qualifying out-of-state patients; provided that this registration process may commence no sooner than January 1, 2018."
SECTION 8. Section 329D-9, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The department shall establish health,
safety, manufacturing, and [sanitation] product stability standards
regarding the manufacture of manufactured cannabis products."
SECTION 9. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act shall take effect on July 1, 2060.
Report Title:
DOH; Medical Cannabis; Transportation; Dispensaries; Production Centers; Retail Dispensing Locations
Description:
Amends the circumstances under which medical cannabis may be transported by and between dispensaries. Increases the allowable number of plants for production centers. Increases the number of production centers that may be allowed under a dispensary license. Increases the number of retail dispensing locations that may be allowed under a dispensary license. Redefines the term "medical cannabis production center" to include any series of structures located within the same secured perimeter fence-line. Requires the department of health to establish the fee structure for the submission of applications for additional production centers and retail dispensing locations and for dispensary-to-dispensary sales. Amends the department of health's duties with respect to the establishment of standards for manufactured cannabis products. Effective 7/1/2060. (HD1)
The summary description
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not legislation or evidence of legislative intent.