SB173.DOC

SECTION 1. Section 328-1, Hawaii Revised Statutes, is amended by amending the definition of "food" to read as follows:

""Food" means:

(1) Articles used for food or drink by humans, dogs, or cats;

(2) Chewing gum; or

(3) Articles used for components of any such article.

"Food" does not include edible cannabis products, as defined in section 329D‑10."

SECTION 2. Section 329-121, Hawaii Revised Statutes, is amended by amending the definition of "adequate supply" to read as follows:

""Adequate supply" means an amount of marijuana jointly possessed between the qualifying patient and the primary caregiver that is not more than is reasonably necessary to ensure the uninterrupted availability of marijuana for the purpose of alleviating the symptoms or effects of a qualifying patient's debilitating medical condition; provided that an "adequate supply" shall not exceed: seven marijuana plants, whether immature or mature, seven marijuana seedlings, and four ounces of usable marijuana at any given time. The four ounces of usable marijuana shall include any combination of usable marijuana and manufactured marijuana products, as provided in chapter 329D, with the marijuana in the manufactured marijuana products being calculated using information provided pursuant to section 329D‑9(c). For the purposes of this definition, "plant" means a marijuana plant that is at least 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 at least 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. For the purposes of this definition, "seedling" means a marijuana plant that is less than twelve vertical inches in height from where the base of the stalk emerges from the growth medium to the tallest point, or less than twelve horizontal inches in width from the end of one branch to the end of another branch."

SECTION 3. Section 329-130, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) After December 31, 2018, a qualifying patient shall obtain medical marijuana or manufactured marijuana products only:

(1) From a dispensary licensed pursuant to chapter 329D; provided that the marijuana shall be purchased and paid for at the time of purchase; or

(2) By cultivating marijuana in an amount that does not exceed an adequate supply for the qualifying patient, pursuant to section 329-122.

[~~After December 31, 2018, no primary caregiver shall be authorized to cultivate marijuana for any qualifying patient.~~]"

SECTION 4. Section 329D-3, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The application shall be submitted to the department and shall include supporting documentation to establish the following:

(1) That the individual applicant:

(A) Has been a legal resident of the State for not less than five years preceding the date of application;

(B) Is not less than twenty-one years of age; and

(C) Has [~~had no~~] not served time in prison for a felony [~~convictions;~~] conviction in the five years immediately preceding the application date;

(2) That the applying entity:

(A) Has been organized under the laws of the State;

(B) Has a Hawaii tax identification number;

(D) Has a federal employer identification number;

(E) Is not less than fifty-one per cent held by Hawaii legal residents or entities wholly controlled by Hawaii legal residents who have been Hawaii legal residents for not less than five years immediately preceding the date the application was submitted;

(F) Has financial resources under its control of not less than $1,000,000 for each license applied for, plus not less than $100,000 for each retail dispensing location allowed under the license applied for, in the form of bank statements or escrow accounts, and that the financial resources have been under the control of the applying entity for not less than ninety days immediately preceding the date the application was submitted; and

(G) Is composed of principals or members, each of whom has [no] not served time in prison for a felony [~~convictions.~~] conviction in the five years immediately preceding the application date."

SECTION 5. Section 329D-6, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) Notwithstanding any other law to the contrary, including but not limited to sections 378-2 and 378-2.5, no dispensary shall employ a person [~~convicted of~~] who has served time in prison for a felony[.] conviction in the five years immediately preceding the employment. 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."

SECTION 6. 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~~] who has served time in prison for a felony[;] conviction in the five years immediately preceding the employment;

(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;

(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 7. Section 329D-9, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The department shall establish health, safety, and sanitation standards regarding the manufacture of manufactured marijuana products[.]; provided that any area within a dispensary or production center where marijuana will be manufactured into an edible cannabis product as defined in section 329D-10 shall comply with the food safety code adopted by the department."

SECTION 8. Section 329D-10, Hawaii Revised Statutes, is amended to read as follows:

"§329D-10 Types of manufactured marijuana products. (a) The types of medical marijuana products that may be manufactured and distributed pursuant to this chapter shall be limited to:

(1) Capsules;

(2) Lozenges;

(3) Pills;

(4) Oils and oil extracts;

(5) Tinctures;

(6) Ointments and skin lotions;

(7) Transdermal patches;

(8) Pre-filled and sealed containers used to aerosolize and deliver marijuana orally, such as with an inhaler or nebulizer; [~~and~~]

(9) Edible cannabis products; and

[~~(9)~~] (10) Other products as specified by the department.

(b) As used in this section[~~, "lozenge"~~]:

(1) "Edible cannabis products" means manufactured cannabis that is intended to be used, in whole or in part, for human consumption, including but not limited to chewing gum; and

(2) "Lozenge" means a small tablet manufactured in a manner to allow for the dissolving of its medicinal or therapeutic component slowly in the mouth."

SECTION 9. Section 329D-15, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) No person shall intentionally or knowingly enter or remain upon the premises of a medical marijuana retail dispensing location unless the individual is:

(1) An individual licensee or registered employee of the dispensary;

(2) A qualifying patient or primary caregiver of a qualifying patient;

(3) A government employee or official acting in the person's official capacity; or

(4) Previously included on a current department-approved list provided to the department by the licensee of those persons who are allowed into that dispensary's facilities for a specific purpose for that dispensary, including but not limited to construction, maintenance, repairs, legal counsel, or investors; provided that:

(A) The person has been individually approved by the department to be included on the list;

(B) The person is at least twenty-one years of age, as verified by a valid government issued identification card;

(C) The department has confirmed that the person has [no] not served time in prison for a felony [~~convictions;~~] conviction in the five years immediately preceding the entry upon the premises of the dispensary;

(D) The person is escorted by an individual licensee or registered employee of the dispensary at all times while in the dispensary facility;

(E) The person is only permitted within those portions of the dispensary facility as necessary to fulfill the person's purpose for entering;

(F) The person is only permitted within the dispensary facility during the times and for the duration necessary to fulfill the person's purpose for entering;

(G) The dispensary shall keep an accurate record of each person's first and last name, date and times upon entering and exiting the dispensary facility, purpose for entering, and the identity of the escort; and

(H) The approved list shall be effective for one year from the date of the department approval."

SECTION 10. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect upon its approval; provided that sections 1, 7, and 8 shall take effect on July 1, 2018.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	173
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII