SB1430

SECTION 1. The legislature finds that Act 241, Session Laws of Hawaii 2015, codified as chapter 329D, Hawaii Revised Statutes, established a licensing framework for a statewide system of medical cannabis dispensaries to ensure access to medical cannabis for qualifying patients. Act 230, Session Laws of Hawaii 2016, Act 41, Session Laws of Hawaii 2017, and Act 116, Session Laws of Hawaii 2018, made further amendments.

The legislature further finds that additional amendments to the law are warranted to clarify legislative intent, to ensure smooth administration of the law, to allow for adequate patient access to medical cannabis, and to resolve issues that have arisen under the current law.

The purpose of this Act is to:

(1) Allow naturopathic physicians and physician assistants practicing under supervision to provide written certification for qualifying patients to improve patient access to medical cannabis;

(2) Allow licensed dispensaries to have manufacturing or processing facilities separate from their production facilities, while remaining subject to all regulations under the law;

(3) Provide a process for the voluntary or involuntary sale or transfer of a dispensary license;

(4) Allow dispensaries to operate on state and federal holidays;

(5) Allow a licensed dispensary to purchase medical cannabis or manufactured cannabis products from another licensed dispensary, with approval from the department of health, to ensure patient access to cannabis in the event of a crop failure;

(6) Allow remediation of any cannabis batch that fails laboratory testing standards as long as any final product passes such standards; and

(7) Allow licensed retail dispensaries to sell edible cannabis and cannabidiol products.

SECTION 2. Chapter 329D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§329D- Sale or transfer of dispensary license. (a) In the event of death, legal incapacity, or permanent disability of an individual dispensary licensee, the relevant entity licensee shall notify the department within thirty days of the individual licensee's inability to continue in the individual's capacity as a licensee, and shall provide to the department within another thirty days, a plan for the sale or transfer of the individual license to another individual who shall meet all the requirements under this chapter.

(b) In the event of a voluntary resignation by an individual licensee, termination of an individual licensee's employment with an entity licensee with or without cause, or any other permanent separation of the relationship between an individual licensee and an entity licensee, the relevant entity licensee shall submit a plan to the department for approval at least thirty days prior to any sale or transfer of the individual license to another individual who shall meet all the requirements under this chapter."

SECTION 3. Section 329-121, Hawaii Revised Statutes, is amended as follows:

1. By amending the definition of "physician" to read:

""Physician" means a person who is licensed to practice under chapter 453 and is licensed with authority to prescribe drugs and is registered under section 329-32. "Physician" [~~does not~~] shall include a physician assistant as described in section 453-5.3."

2. By amending the definition of "written certification" to read:

""Written certification" means the qualifying patient's medical records or a statement signed by a qualifying patient's physician, naturopathic physician, or advanced practice registered nurse, stating that in the physician's, naturopathic physician's, or advanced practice registered nurse's professional opinion, the qualifying patient has a debilitating medical condition and the potential benefits of the medical use of cannabis would likely outweigh the health risks for the qualifying patient. The department of health may require, through its rulemaking authority, that all written certifications comply with a designated form. "Written certifications" are valid for one year from the time of signing; provided that the department of health may allow for the validity of any written certification for up to three years if the qualifying patient's physician, naturopathic physician, or advanced practice registered nurse states that the patient's debilitating medical condition is chronic in nature."

3. By adding a new definition to be appropriately inserted and to read:

""Naturopathic physician" means a person who holds a current license issued under chapter 455 to practice naturopathic medicine, is licensed with authority to prescribe drugs, and is registered under section 329-32."

SECTION 4. Section 329-122, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) Notwithstanding any law to the contrary, the medical use of cannabis by a qualifying patient shall be permitted only if:

(1) The qualifying patient has been diagnosed by a physician, naturopathic physician, or advanced practice registered nurse as having a debilitating medical condition;

(2) The qualifying patient's physician, naturopathic physician, or advanced practice registered nurse has certified in writing that, in the physician's, naturopathic physician's, or advanced practice registered nurse's professional opinion, the potential benefits of the medical use of cannabis would likely outweigh the health risks for the particular qualifying patient; and

(3) The amount of cannabis possessed by the qualifying patient does not exceed an adequate supply."

2. By amending subsection (e) to read:

"(e) The authorization for the medical use of cannabis in this section shall not apply to:

(1) The medical use of cannabis that endangers the health or well-being of another person;

(2) The medical use of cannabis:

(A) In a school bus, public bus, or any moving vehicle;

(B) In the workplace of one's employment;

(D) At any public park, public beach, public recreation center, recreation or youth center; or

(E) At any other place open to the public; provided that [a]:

(i) A qualifying patient shall not be prohibited from use of cannabis in private rooms or residences located in a state-licensed assisted living facility; and

(ii) A qualifying patient, primary caregiver, qualifying out-of-state patient, caregiver of a qualifying out-of-state patient, or an owner or employee of a medical cannabis dispensary licensed under chapter 329D shall not be prohibited from transporting cannabis or any manufactured cannabis product, as that term is defined in section 329D-1, in any public place; provided further that the cannabis or manufactured cannabis product shall be transported in a sealed container, not be visible to the public, and shall not be removed from its sealed container or consumed or used in any way while it is in the public place; and

(3) The use of cannabis by a qualifying patient, parent, primary caregiver, qualifying out-of-state patient, or caregiver of a qualifying out-of-state patient, for purposes other than medical use permitted by this part."

SECTION 5. Section 329-123, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Physicians, naturopathic physicians, or advanced practice registered nurses who issue written certifications shall provide, in each written certification, the name, address, patient identification number, and other identifying information of the qualifying patient. The department of health shall require, in rules adopted pursuant to chapter 91, that all written certifications comply with a designated form completed by or on behalf of a qualifying patient. The form shall require information from [~~the~~]:

(1) The applicant[,];

(2) The primary caregiver[,]; and

(3) The physician, naturopathic physician, or advanced practice registered nurse, as specifically required or permitted by this chapter. The form shall require the address of the location where the cannabis is grown and shall appear on the registry card issued by the department of health. The certifying physician, naturopathic physician, or advanced practice registered nurse shall be required to have a bona fide physician-patient relationship, bona fide naturopathic physician-patient relationship, or bona fide advanced practice registered nurse-patient relationship, as applicable, with the qualifying patient. All current active medical cannabis permits shall be honored through their expiration date.

(b) Qualifying patients shall register with the department of health. The registration shall be effective until the expiration of the certificate issued by the department of health and signed by the physician, naturopathic physician, or advanced practice registered nurse. Every qualifying patient shall provide sufficient identifying information to establish the personal identities of the qualifying patient and the primary caregiver. Qualifying patients shall report changes in information within ten working days. Every qualifying patient shall have only one primary caregiver at any given time. The department of health shall issue to the qualifying patient a registration certificate, and shall charge $35 per year."

SECTION 6. Section 329-126, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:

"§329-126 Protections afforded to a treating physician, naturopathic physician, or advanced practice registered nurse. (a) No physician, naturopathic physician, or advanced practice registered nurse shall be subject to arrest or prosecution, penalized in any manner, or denied any right or privilege for providing written certification for the medical use of cannabis for a qualifying patient; provided that:

(1) The physician, naturopathic physician, or advanced practice registered nurse has diagnosed the patient as having a debilitating medical condition, as defined in section 329-121;

(2) The physician, naturopathic physician, or advanced practice registered nurse has explained the potential risks and benefits of the medical use of cannabis, as required under section 329-122;

(3) The written certification is based upon the physician's, naturopathic physician's, or advanced practice registered nurse's professional opinion after having completed a full assessment of the patient's medical history and current medical condition made in the course of a bona fide physician-patient relationship, bona fide naturopathic physician-patient relationship, or bona fide advanced practice registered nurse-patient relationship, as applicable; and

(4) The physician, naturopathic physician, or advanced practice registered nurse has complied with the registration requirements of section 329-123."

SECTION 7. Section 329-128, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Notwithstanding any law to the contrary, fraudulent misrepresentation to a law enforcement official of any fact or circumstance relating to the issuance of a written certificate by a physician, naturopathic physician, or advanced practice registered nurse not covered under section 329-126 for the medical use of cannabis shall be a misdemeanor. This penalty shall be in addition to any other penalties that may apply for the non-medical use of cannabis."

SECTION 8. Section 329D-2, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:

"(f) Up to two production centers shall be allowed under each dispensary license; provided that[,] up to two separate manufacturing or processing facilities may be authorized which shall meet all requirements of any dispensary facility, but shall not be considered as production centers for the purposes of the two production center limit; provided further that, except as otherwise specified in subsection (k), each production center shall be limited to no more than three 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."

SECTION 9. Section 329D-3, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) A dispensary license shall not be sold or otherwise transferred from one person to another person[.] without approval from the department as provided in section 329D- ."

SECTION 10. Section 329D-6, Hawaii Revised Statutes, is amended to read as follows:

"§329D-6 Dispensary operations. (a) No person shall operate a dispensary, nor 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.

(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. [~~Retail dispensing locations shall be closed on official state and federal holidays.~~]

(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 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 later than thirty days prior to 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 less than sixty days prior to 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;

(D) The transport of cannabis and manufactured cannabis products between production centers and retail dispensing locations[,] and as permitted 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 permitted pursuant to 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] Except for dispensary-to-dispensary sales as provided in subsection (r), 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) In the event of a crop failure of cannabis plants that could affect patient access, the department may permit a dispensary to purchase medical cannabis and manufactured cannabis products from another dispensary in an amount and manner prescribed by the department by rules adopted pursuant to this chapter and chapter 91; provided that:

(1) The purchasing dispensary documents the failure of the cannabis crops and submits the documentation to the department;

(2) The selling dispensary is permitted by the department to transport cannabis or manufactured cannabis products to another county or another island, for the limited purpose of completing its sale to the purchasing dispensary pursuant to this subsection, in an amount and manner prescribed by the department by rules adopted pursuant to this chapter and chapter 91 and with the understanding that state law and its protections do not apply outside of the jurisdictional limits of the State; and

(3) Nothing in this subsection shall relieve any dispensary of its responsibilities and obligations under this chapter and chapter 329."

SECTION 11. Section 329D-8, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The department shall establish and enforce standards for laboratory-based testing of cannabis and manufactured cannabis products for content, contamination, and consistency; provided that in establishing these standards, the department shall:

(1) Review and take guidance from the testing programs and standards utilized in other jurisdictions;

(2) Consider the impact of the standards on the retail cost of the product to the qualifying patient;

(3) Review and take guidance from the testing programs and standards for pesticides under the regulations of the United States Environmental Protection Agency;

(4) Consider processes that allow any batch of cannabis or manufactured cannabis products that fails testing standards to be remediated and manufactured as long as any final cannabis or manufactured cannabis product passes testing standards;

(5) For the testing for microbiological impurities, consider the benefits of organically grown cannabis that features the use of bacteria in lieu of pesticides; and

[~~(5)~~] (6) Include permission for qualifying patients and primary caregivers to obtain testing services directly from certified laboratories on the island where the qualifying patient and primary caregiver reside."

SECTION 12. Section 329D-10, Hawaii Revised Statutes, is amended to read as follows:

"§329D-10 Types of manufactured cannabis products. (a) The types of medical cannabis 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 cannabis orally, such as with an inhaler or nebulizer; provided that containers need not be manufactured by the licensed dispensary but shall be filled with cannabis, cannabis oils, or cannabis extracts manufactured by the licensed dispensary; shall not contain nicotine, tobacco-related products, or any other non-cannabis derived products; and shall be designed to be used with devices used to provide safe pulmonary administration of manufactured cannabis products;

(9) Devices that provide safe pulmonary administration; provided that:

(A) The heating element of the device, if any, is made of inert materials such as glass, ceramic, or stainless steel, and not of plastic or rubber;

(B) The device is distributed solely for use with single-use, pre-filled, tamper-resistant, sealed containers that do not contain nicotine or other tobacco products;

(C) The device is used to aerosolize and deliver cannabis by inhalation, such as an inhaler, medical-grade nebulizer, or other similar medical grade volitization device;

(D) There is a temperature control on the device that is regulated to prevent the combustion of cannabis oil; and

(E) The device need not be manufactured by the licensed dispensary; [~~and~~]

(10) Edible cannabis products;

(11) Cannabidiol products; and

(12) Other products as specified by the department.

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

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

"Edible cannabis products" means food products intended for human consumption that are infused with any cannabinoid extracted from the cannabis plant as regulated by administrative rules of the department.

"Cannabidiol products" means any products derived from the cannabis sativa which contain cannabidiol, including cannabidiol derived from hemp as defined in the Agriculture Improvement Act of 2018, P.L. 115-334."

SECTION 13. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 14. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 15. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1430
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII