A BILL FOR AN ACT RELATING TO MEDICAL MARIJUANA.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Act 241, Session Laws of Hawaii 2015, codified as chapter 329D, Hawaii Revised Statutes, established a licensing scheme for a statewide system of medical marijuana dispensaries to ensure access to medical marijuana for qualifying patients. Act 230, Session Laws of Hawaii 2016, amended chapter 329D, Hawaii Revised Statutes, and other sections of the Hawaii Revised Statutes to clarify the system’s implementation. Generally, Act 241 required the department of health to announce the selection of medical marijuana dispensary licensees by April 15, 2016, and to allow retail dispensing of medical marijuana from July 15, 2016. However, the department of health has yet to issue to any medical marijuana dispensary licensee a notice to proceed with the planting or cultivation of medical marijuana, and has been unable to provide assurances that the dispensary program envisioned by Acts 241 and 230 will be implemented in the near future.
The legislature also finds that the delay in implementing the medical marijuana dispensing system is affecting patient access to medical marijuana. One cause of the delay is the department of health’s struggle to implement the computer tracking system required pursuant to Acts 241 and 230. The legislature notes that although the computer tracking system is intended to serve an important role in ensuring the safety of the product, patient, and public, the need for the system must be balanced against the patients’ need to receive their medicine. Recently, some medical marijuana dispensary programs on the mainland United States experienced failures of their computer tracking systems, but the affected jurisdictions fortunately had pre-determined alternative systems to track marijuana product sales during any tracking system shutdown. The legislature believes that the department of health should also have a pre-determined alternative system to track marijuana product sales so that qualified patients will have uninterrupted access to medical marijuana during any shutdown of the initial tracking system in this State.
The legislature further finds that, although laboratory testing of medical marijuana is necessary to ensure product and patient safety, testing should be performed within reasonable scope and tolerance levels. The State of Oregon has implemented testing standards that are appropriate, practical, and evidence-based. Unreasonably strict and expansive testing standards will lead to unnecessarily high production costs that will result in medical marijuana that is unaffordable for patient use and may push patients to use the black market instead of legal dispensaries.
The legislature believes that establishing the office of medical marijuana administration, to be responsible for implementing the medical marijuana dispensary system and administering the medical marijuana patient registry, will facilitate the efficient and fair implementation of the system.
Accordingly, the purpose of this Act is to:
(1) Establish the office of medical marijuana administration, which shall be responsible for implementing the medical marijuana dispensary system and administering the medical marijuana patient registry;
(2) Amend certain dates and deadlines in existing law to address the delays in implementation;
(3) Establish new deadlines for the department of health to implement the dispensary system, including deadlines for implementation of the department’s computer software tracking system and laboratory testing program;
(4) Provide for an alternative means to track marijuana sales during any shutdown of the department of health’s computer tracking system; and
(5) Amend requirements for laboratory standards and testing to ensure product and patient safety at reasonable tolerance levels with reasonable cost implications.
SECTION 2. Chapter 329D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
Ҥ329D- Office of medical marijuana administration; established; duties. (a) There is established within the department the office of medical marijuana administration, which shall report directly to the deputy director for health resources.
(b) The office of medical marijuana administration shall administer medical marijuana dispensary licensure and regulation pursuant to this chapter and the registration of qualifying patients pursuant to section 329-123.”
SECTION 3. Section 329-130, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
“(a) After December 31, [2018,] 2019, 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,] 2023, no primary caregiver shall be authorized to cultivate marijuana for any qualifying patient.”
SECTION 4. Section 329D-2, Hawaii Revised Statutes, is amended by amending subsection (j) to read as follows:
“(j) Notwithstanding subsection (d), the department shall determine whether, based on the qualifying patient need, additional dispensary licenses shall be offered to qualified applicants in the State after October 1, [2017;] 2018; provided that the department shall make available not more than one license per five hundred qualifying patients residing in any single county[.]; provided further that in considering whether to award a new license, the department shall consider an applicant’s capability to serve and supply medical marijuana to qualified patients in an underserved geographical area of a county.”
SECTION 5. Section 329D-6, Hawaii Revised Statutes, is amended by amending subsections (j) and (k) to read as follows:
“(j) The department shall establish, maintain, and control a computer software tracking system that shall have real time, [twenty-four hour] twenty-four-hour access to the data of all dispensaries.
(1) The computer software tracking system shall collect data relating to:
[(1)] (A) The total amount of marijuana in possession of all dispensaries from either seed or immature plant state, including all plants that are derived from cuttings or cloning, until the marijuana, marijuana plants, or manufactured marijuana product is sold or destroyed pursuant to section 329D-7;
[(2)] (B) The total amount of manufactured marijuana product inventory, including the equivalent physical weight of marijuana that is used to manufacture manufactured marijuana products, purchased by a qualifying patient and primary caregiver from all retail dispensing locations in the State in any fifteen day period;
[(3)] (C) The amount of waste produced by each plant at harvest; and
[(4)] (D) The transport of marijuana and manufactured marijuana products between production centers and retail dispensing locations, including tracking identification issued by the tracking system, the identity of the person transporting the marijuana or manufactured marijuana 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: [the]
(A) The department shall publicly solicit at least three proposals for the computer software tracking system; and [the]
(B) The selection of the computer software tracking system shall be approved by the director of the department and the chief information officer[.];
(3) Notwithstanding any other provision of this subsection to the contrary, once the department has authorized a licensed dispensary to commence sales of marijuana or manufactured marijuana products, if the department’s computer software tracking system is inoperable or is not functioning properly, the department shall immediately implement an alternate tracking system that will enable qualified patients to purchase marijuana or manufactured marijuana products from a licensed dispensary on a temporary basis. The alternate tracking system shall operate as follows:
(A) The department shall immediately notify all licensed dispensaries that the computer software tracking system is inoperable;
(B) During the period in which the computer software tracking system is inoperable, licensed dispensaries shall be authorized to continue with the sale of marijuana and manufactured marijuana products to qualifying patients under the alternate tracking system, as follows:
(i) A qualifying patient shall be authorized to purchase marijuana or a manufactured marijuana product from the licensed dispensary at which the patient’s last purchase of marijuana or a manufactured marijuana product was made prior to the computer software tracking system becoming inoperable, which shall thereafter be the designated dispensary for that qualifying patient;
(ii) A qualifying patient shall not be authorized to make a purchase from any other licensed dispensary unless the patient obtains written authorization from the department to make a purchase from a licensed dispensary other than their designated dispensary;
(iii) A qualifying patient who has not made any purchase from a licensed dispensary prior to the computer software tracking system being declared inoperable shall designate one licensed dispensary for purchases and shall not be authorized to make purchases from any other licensed dispensary, subject to clause (ii);
(iv) A qualifying patient shall not purchase any marijuana or manufactured marijuana product that exceeds the limitations established by section 329D-13; and
(C) Once the computer software tracking system is operational and functioning to meet the requirements of this subsection, the department shall 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 marijuana, marijuana plants, and manufactured marijuana 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 marijuana or manufactured marijuana product is sold or destroyed pursuant to section 329D-7; [and]
(3) Allow the licensed dispensary’s retail dispensing location to submit to the department in real time for the total amount of marijuana and manufactured marijuana product purchased by a qualifying patient and primary caregiver 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 marijuana or manufactured marijuana products, if the maximum allowable amount of marijuana 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).”
SECTION 6. Section 329D-7, Hawaii Revised Statutes, is amended to read as follows:
Ҥ329D-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;
(C) Ability to comply with the security requirements developed pursuant to paragraph (6);
(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; provided that recordings shall be retained for not less than forty-five days;
(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; provided that recordings shall be retained for not less than forty-five 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 marijuana and manufactured marijuana products between production centers and retail dispensing locations;
(8) Standards and criminal background checks to ensure the reputable and responsible character and fitness of all license applicants, licensees, employees, subcontractors and their employees, and prospective employees of medical marijuana dispensaries to operate a dispensary; provided that the standards, at a minimum, shall exclude from licensure or employment any person convicted of any felony;
(9) The training and certification of operators and employees of production centers and dispensaries;
(10) The types of manufactured marijuana products that dispensaries shall be authorized to manufacture and sell pursuant to sections 329D-9 and 329D-10;
(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-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 marijuana and manufactured marijuana 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; and
(4) For the testing for microbiological impurities, consider the benefits of organically grown marijuana that features the use of bacteria in lieu of pesticides.”
SECTION 8. Section 329D-27, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:
“(b) No later than January 4, 2016, the department shall adopt interim rules, which shall be exempt from chapter 91 and chapter 201M, to effectuate the purposes of this chapter; provided that the interim rules shall remain in effect until July 1, [2018,] 2020, or until rules are adopted pursuant to subsection (a), whichever occurs sooner.
(c) The department may amend the interim rules, and the amendments shall be exempt from chapters 91 and 201M, to effectuate the purposes of this chapter; provided that any amended interim rules shall remain in effect until July 1, [2018,] 2020, or until rules are adopted pursuant to subsection (a), whichever occurs sooner.”
SECTION 9. Act 241, Session Laws of Hawaii 2015, is amended by amending section 14 to read as follows:
“SECTION 14. For the purposes of effectuating this Act, the personnel hired and the contracts entered into by the department of health, pursuant to this Act, shall be exempt from chapter 76, Hawaii Revised Statutes, for a period beginning on July 1, 2015, and ending on June 30, [2017;] 2020; provided that:
(1) All personnel actions taken pursuant to this Act by the department of health after June 30, [2017,] 2020, shall be subject to chapter 76, Hawaii Revised Statutes, as appropriate; and
(2) Any employee hired by the department of health to effectuate this Act, who occupies a position exempt from civil service on July 1, [2017,] 2020, shall:
(A) Be appointed to a civil service position; and
(B) Not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges;
provided that the employee possesses the minimum qualifications and public employment requirements for the class or position to which appointed; provided further that subsequent changes in status shall be made pursuant to applicable civil service and compensation laws.”
SECTION 10. All appropriations records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the office of health care assurance relating to the functions transferred to the office of medical marijuana administration shall be transferred with the functions to which they relate.
SECTION 11. Employees performing duties related to medical marijuana dispensary licensure and regulation pursuant to chapter 329D, Hawaii Revised Statutes, and relating to the registration of qualifying patients pursuant to section 329-123, Hawaii Revised Statutes, shall be transferred to the office of medical marijuana administration without loss of salary, seniority (except as prescribed by applicable collective bargaining agreements), retention points, prior service credit, any vacation and sick leave credits previously earned, and other rights, benefits, and privileges, in accordance with state personnel laws and this Act; provided that the employees possess the minimum qualifications and public employment requirements for the class or position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.
Any employee who, prior to this Act, is exempt from civil service and is transferred as a consequence of this Act may retain the employee’s exempt status, but shall not be appointed to a civil service position as a consequence of this Act. An exempt employee who is transferred by this Act shall not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges as a consequence of this Act; provided that the employees possess legal and public employment requirements for the position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable employment and compensation laws.
SECTION 12. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 14. This Act shall take effect on June 29, 2017.