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Medical Cannabis Tennessee

SB O854

Senator Janice Bowling

Medical Cannabis

BILL SUMMARY

This bill establishes a framework within which to authorize access to medical cannabis on a regulated basis for patients with qualifying medical conditions and that licenses and regulates the processes for cultivation, production, distribution, transport, selling, and acquiring cannabis for medical use and research.

MEDICAL CANNABIS CARD - PATIENT and CAREGIVER

This bill prohibits a person from acquiring, possessing, or using a medical cannabis product without a valid medical cannabis card issued pursuant to this bill. A medical cannabis card may only be issued to: qualified patient (defined as a resident of this state who is at least 18 years of age, has been diagnosed with a qualifying condition, and has met the requirements of this bill to obtain a card); or to a qualifying caregiver (a caregiver is defined as a resident of this state who is 18 years of age or older; meets the regulatory requirements under this bill; and has agreed to assist with the medical use of cannabis of another person with, or by applying for, a medical cannabis card). In order to qualify for and obtain a medical cannabis card from the commission, a patient must, among other things: complete and sign a written application form, subject to the penalties of perjury; pay an application fee of $65.00, or other amount as determined by the medical cannabis commission (created by this bill); and submit the patient's medical records from a healthcare provider confirming that the patient has been diagnosed with a qualifying medical condition. Such records must be reviewed and accepted by the commission as adequate proof that the patient requesting the card has been so diagnosed. This bill sets out in detail the requirements for a diagnosis of a qualifying condition by a healthcare provider. This bill also establishes the requirements for the issuance of a medical cannabis card to a parent or legal guardian of a minor for use by the minor. One such requirement is that the submission of proof that the parent or legal guardian has qualified as a caregiver. Under this bill, a qualified patient may designate a caregiver to assist with the purchase and use of medical cannabis. If a qualified patient is under 18 years of age, only a caregiver may purchase or administer cannabis to the qualified patient. When a qualified patient has a designated caregiver, only the designated caregiver is authorized to purchase cannabis; a patient with a designated caregiver is not authorized to purchase cannabis. In order to qualify for and obtain a medical cannabis card, a caregiver must, among other things: pay an application fee of $65.00, or other amount as determined by the commission, and identify each patient for whom the caregiver provides care, including a confirmation of the caregiver relationship in writing from each qualified patient. This bill limits a caregiver to providing care for no more than 10 qualified patients at any given time. A registered caregiver may lawfully acquire and possess medical cannabis, but not use medical cannabis without the caregiver actually being diagnosed with a qualifying medical condition and issued a medical cannabis card as a qualified patient. In order for a caregiver to act on behalf of a minor or adult patient to purchase, possess, and administer medical cannabis, the caregiver must obtain the caregiver medical cannabis card, and the patient must have a valid patient medical cannabis card, issued by the commission. A caregiver may receive compensation from the qualified patient or other entity for any services provided to the qualified patient. A medical cannabis card will be valid for two years. This bill establishes the renewal process for a card and requires the commission to promulgate appropriate rules regarding the application, issuance, and denial process for cards. This bill specifies that the rules may not prohibit the issuance or use of a medical cannabis card based on an arrest for any felony or misdemeanor unless the arrest is for a violation of this bill. This bill specifies that the state will recognize and give reciprocity to medical cannabis cards issued in other states, and that a cardholder from another state is allowed temporary access to dispensaries in this state under the conditions authorized by the commission by rule. PATIENT REGISTRY SYSTEM and TRACKING This bill requires the commission to create and utilize a patient registry system, by June 1, 2022. The system will consist of, among other things, application forms and procedures for obtaining all patient and caregiver medical cannabis cards; and an integrated, electronic system for tracking the application process and the status of medical cannabis cards. The department of agriculture and law enforcement will have access to the patient registry in order to avoid counterfeiting of cards, minimize illegal usage, and to attain maximum compliance with this bill. Under this bill, by no later than September 30, 2021, the commission must ensure that a process is available for healthcare providers to electronically report a qualifying diagnosis as part of the patient medical cannabis card registry process. This bill requires the commission to procure and utilize a secure, online system for patient registration, license registration, and managed medical wellness seed-to-sale tracking. All data related to the implementation of this bill, including, but not limited to, application forms, licensing information, registration of medical cannabis card holders and caregivers, compliance, and the status of cannabis research programs must be maintained in a secure system developed or procured by the commission. This bill requires the commission to provide annual written reports no later than July 31 of each year, with the first due no later than July 31, 2022, tracking implementation of this bill. MEDICAL CANNABIS COMMISSION This bill creates the Tennessee medical cannabis commission, to consist of 12 members. By August 30, 2021, the governor, speaker of the senate, and speaker of the house of representatives must make initial appointments. This bill sets out the qualifications for being a commission member. This bill requires: (1) The governor to appoint: (A) One person with professional experience in industrial or agricultural systems management, including commodities, manufacturing, or distribution in a regulated industry; (B) One person with professional experience in legal or social justice issues related to a regulated industry; (C) One person with professional experience in public health, mental health, substance use, toxicology, biochemistry, or medical research and (D) One person with professional experience in the field of law enforcement and peace officer standards (POST) certification; (2) The speaker of the senate to appoint: (A) One person with experience in multiple crop development and agricultural practices; (B) One person with experience in complex agriculture, health, science, business, or government systems; (C) One person who is a licensed pharmacist; and (D) One person with professional experience in the field of law enforcement and POST certification; and (3) The speaker of the house of representatives to appoint: (A) One person with experience in public or rural land use management; (B) One person who is a physician licensed to practice in this state; (C) One person who is licensed to practice law in this state; and (D) One person with professional experience in agricultural lending or banking or with state-chartered banks or credit unions. This bill prohibits a person from both serving on the commission and being a registered lobbyist. If a registered lobbyist is appointed or otherwise named as a member of the commission, the person must terminate all employment and business association as a lobbyist. Commission members appointed by the governor will serve an initial term of two years and may be reappointed to a full term of four years. Commission members appointed by the speaker of the senate will serve an initial term of three years and may be reappointed to a full term of four years. Commission members appointed by the speaker of the house of representatives will serve a full term of four years. The full term for each member of the commission is four years, and each member may be reappointed for one additional full term at the pleasure of the appointing authority. A commissioner may not serve more than two full consecutive four-year terms. If a vacancy occurs, the appointing authority will appoint a person to fill the vacancy for the unexpired term. Each member of the commission will receive $700 for each meeting of the commission that the member attends and will be reimbursed for their actual and necessary expenses incurred in connection with their official duties. For administrative and rulemaking purposes and for the purpose of issuing provisional licenses (discussed below), this bill requires the commission to hold a minimum of two regularly scheduled meetings each month in the first 12 months commencing no later than October 15, 2021. After that, this bill requires the commission to meet at least once each month in Nashville and to hold such other meetings as may be necessary for the commission to transact and perform its official duties and functions. The commission may hold a special meeting at any time it deems necessary and advisable in the performance of its official duties. This bill authorizes the commission to appoint an executive director and assistant director to serve at the pleasure of the commission. The commission will establish the executive director's salary. The office of the executive director will be in Nashville. This bill sets out the qualifications for and duties of the executive director. The assistant director, if licensed to practice law in this state, may also be designated by the commission to serve as a hearing officer. The executive director and assistant director are to be reimbursed for travel expenses. This bill directs the commission to coordinate with the department of agriculture to appoint a chief inspection and enforcement officer who will serve under the commissioner of agriculture. This bill details the qualifications for the chief inspection and enforcement officer. Such officer will be reimbursed for travel expenses. The executive director, the chief inspection and enforcement officer, and all other inspection and enforcement personnel must be employed only on a full-time basis. This bill requires the commission to retain legal counsel familiar with requirements of this bill and medical cannabis licensing and best practices in other states. A violation of this bill's provisions governing prohibited conduct by commission members will be a Class C misdemeanor. This commission will be scheduled for termination under the governmental entity review laws on June 30, 2023. POWERS and DUTIES OF THE COMMISSION This bill authorizes the commission to promulgate rules; grant or refuse licenses concerning medical cannabis; suspend, revoke, or restrict such licenses or fine the licensee for a violation; take any action with respect to a registration pursuant to this bill; and hear, make determinations, and delegate authority at hearings regarding licenses, as detailed by the full text of this bill. This bill requires the commission to maintain the confidentiality of reports or other information obtained from a licensee; develop forms, licenses, identification cards, and applications as necessary or convenient in the discretion of the commission; and prepare and transmit annual report accounting to the governor for the efficient discharge of all responsibilities assigned by law or directive to the commission. Under this bill, the commission has the power to issue commission and letter rulings, at the commission's discretion. Such rulings will be statements regarding the substantive applications of law and procedure that affect the rights and duties of licensees and other members of the public. This bill details the requirements, effect, requests for, and process of revocation and modification of such rulings. The commission may set a reasonable fee for issuing commission and letter rulings. The full text of this bill lists various subjects for which the commission is required to promulgate rules (see Section 20 of this bill). LICENSING/PHASE ONE LICENSES In order to facilitate an initial level of product availability and avoid a program delay dependent on rulemaking, this bill requires the commission to expeditiously review and issue approved provisional phase one licenses no later than April 1, 2022. By June 1, 2022, the commission must expeditiously review and commence approval of all medical cannabis card requests that meet the requirements of this bill. This bill further requires the commission to move expeditiously to promulgate rules by June 1, 2022. This bill prohibits a licensee from dispensing or selling medical cannabis products to a qualified patient who is known to be pregnant. The cultivation, processing, transportation, manufacturing, packaging, dispensing, sale, and use of any form of medical cannabis is subject to licensing under this bill. This bill requires the commission to license all medical cannabis providers to ensure statewide patient access to pharmaceutical grade medical cannabis and medical cannabis-infused products to ensure compliance with this bill. This bill requires the commission to issue provisional licenses in advance of the June 1, 2022, rulemaking deadline. A provisional phase one license will not be finally approved or denied until after an onsite inspection of all facilities pursuant to rules promulgated by the commission. This bill sets out in detail the requirements governing provisional phase one licenses, including the payment of an application fee of $85,000 for certain licenses, the categorizing of the licenses as urban omni licenses and rural vertically integrated (RUVI) licenses, and the limit on the number of such licenses that will be issued (See SECTION 13 of the bill). INSPECTION and ENFORCEMENT This bill requires the department to perform all statutory and regulatory inspection and enforcement requirements under this bill. This bill specifies that costs related to department staffing needs and implementation and enforcement of this bill are to be borne by the commission. This bill establishes the protocols for product testing. PREEMPTION and LOCAL BAN This bill specifies that the state will preemptively regulate medical cannabis from seed to sale to use and reasonably regulate and control all aspects of industry to meet the stated intent of this bill. Any county or municipality seeking to ban the cultivation, processing, manufacture, or sale of medical cannabis within its jurisdiction may do so by a two-thirds vote of the local legislative body, if such occurs by April 1, 2022. Patients residing in a county that has banned the cultivation, processing, manufacturing, or sale of medical cannabis may seek delivery of medical cannabis from a licensed medical cannabis dispensary or other form of delivery service or software platform outside the county or municipality. TAXATION and MEDICAL CANNABIS FUND This bill: (1) Authorizes a county or municipality to tax the sale of medical cannabis at a rate not to exceed 2.1 percent; (2) Imposes a state tax of 9 percent on the sales price of medical cannabis when sold at retail in this state; and (3) Imposes an excise tax, equal to 10 percent of the net earnings for the next preceding fiscal year for business done by medical cannabis licensees in this state during that fiscal year. This tax will not apply to RUVI licensees. This bill creates a medical cannabis fund, in which will be moneys collected pursuant to this bill and any moneys appropriated to the fund by the general assembly for the initial operation of the commission. This bill specifies that tax collected from the retail sale of medical cannabis will be apportioned and allocated in the following manner: (1) Five percent to the POST commission for opioid and methamphetamine drug enforcement training purposes; (2) 25 percent to the department of agriculture for programs and grants administered by the department that facilitate agricultural development in this state, including, but not limited to, the agriculture enterprise fund and the Tennessee agricultural enhancement program; (3) 20 percent to the department of economic and community development for community and rural development program grants administered by the department; (4) 45 percent to the medical cannabis fund; and (5) Five percent to the department of veteran's services for programs administered by the department that provide treatment for veterans diagnosed with post-traumatic stress disorder. Upon a determination by the general assembly that the commission has established sufficient revenues for the administration of this bill, the general assembly will direct the department of revenue to transfer any excess balance in the medical cannabis fund to the general fund to repay any appropriation made by the general assembly in the implementation of this bill. This bill states that notwithstanding any law to the contrary, electronic payment and filing requirements for taxes levied under this bill and the provisions relating to taxes and licenses in present law are waived, and a medical cannabis establishment may file a return in paper form and remit payments in cash or other form approved by the department of revenue. This bill authorizes the commissioner of revenue to require that any such paper filing be accompanied by a manual handling fee, not to exceed $25.00, that is reasonably calculated by the department to account for the additional cost of preparing, printing, receiving, reviewing, and processing any paper filing. MEDICAL CANNABIS TRACKING SYSTEM This bill requires the commission to develop and maintain a managed medical wellness track and trace system that tracks medical cannabis from either seed or immature plant stage until the medical cannabis and medical cannabis-infused product is sold to a customer at a medical cannabis wellness dispensary to ensure that no medical cannabis is sold or otherwise transferred except by a medical cannabis wellness dispensary. The full text of this bill details the requirements of such system, including the ability to store and provide access to certain information. MEDICAL CANNABIS CULTIVATION OPERATIONS This bill requires the commission to create a statewide licensure class system and corresponding fee structure for medical cannabis cultivation operations. "Medical cannabis cultivation operation" means licensed premises on which a person cultivates medical cannabis for sale and distribution to a medical cannabis wellness dispensary, a medical cannabis-infused products manufacturer, or another medical cannabis cultivation operation. This bill lists what such classifications may be based upon. The commission may establish limitations upon medical cannabis production through one or more methods, including placing or modifying a limit on the number of licenses that the commission issues, by class or overall. This bill requires medical cannabis cultivation operations to track their operations from cultivation to wholesale transfer or destruction. This bill provides that a medical cannabis cultivation operation may be contiguous with the licensee's medical cannabis wellness dispensary or a medical cannabis-infused products manufacturer operated by a license. For purposes of this bill, a medical cannabis wellness dispensary is a person who is licensed to operate a business that sells medical cannabis to registered patients or caregivers and does not mean a caregiver. A medical cannabis-infused products manufacturer means a licensed premises where medical cannabis-infused products are produced. OTHER PROVISIONS This bill specifies that it does not: (1) Require an insurer to pay for or reimburse a person for costs associated with the medical use of cannabis; (2) Require any employer to allow the medical use of cannabis in the workplace or to modify the job or working conditions of a person who engages in the medical use of cannabis that are based upon the reasonable business purposes of the employer; (3) Limit the ability of an employer to establish, continue, or enforce a drug-free workplace program or policy; (4) Delegate the commission the power to fix or set prices for medical cannabis; or (5) Limit a law enforcement agency's ability to investigate unlawful activity in relation to a medical cannabis establishment. This bill also provides that: (1) A medical cannabis-infused product must be manufactured with equipment used exclusively for the manufacture and preparation of medical cannabis-infused products; (2) A medical cannabis manufacturer may sell products only to a medical cannabis wellness dispensary or to another medical cannabis-infused products manufacturer and may not label or package a medical cannabis-infused product in a manner that violates federal trademark law or regulation; and (3) A person who has any financial interest in a medical cannabis testing facility must not hold any license or have any financial interest in another type of medical cannabis establishment. QUALIFYING CONDITIONS The following are qualifying conditions for purposes of the medical use of cannabis under this bill: cancer; glaucoma; epilepsy; HIV/AIDS; Crohn's disease; muscular sclerosis; opioid addiction; renal failure; severe nausea or chronic pain; any medical condition producing cachexia, persistent muscle spasm, or seizures; post-traumatic stress syndrome; chronic radiculopathy; severe psoriasis; post-laminectomy syndrome; psoriatic arthritis; complex pain syndrome, including trigeminal neuralgia, amyotrophic lateral sclerosis (ALS), and Parkinson's disease; end-of-life pain management or palliative care; traumatic brain injury, Tourette syndrome, autism spectrum disorder, fibromyalgia, sickle cell anemia; terminal conditions; and the following conditions if the patient is younger than 18 years of age: cerebral palsy, cystic fibrosis; osteogenesis imperfecta; and muscular dystrophy. This bill provides that the commission may, by rule, add other qualifying conditions.

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