HOUSE OF REPRESENTATIVES

H.B. NO.

2707

TWENTY-EIGHTH LEGISLATURE, 2016

 

STATE OF HAWAII

 

 

 

 

 

 

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, established a licensing scheme for a statewide system of medical marijuana dispensaries to ensure access to medical marijuana for qualifying patients.

     The purpose of this Act is to:

     (1)  Clarify and amend statutes pertaining to the dispensary system consistent with guidance provided in the August 29, 2013, memorandum to all United States Attorneys from Deputy Attorney General James M. Cole regarding the exercise of federal prosecutorial discretion in states with laws authorizing marijuana cultivation and distribution for medical use;

     (2)  Ensure the efficient and responsible operation of medical marijuana dispensaries; and

     (3)  Further ensure access to medical marijuana for qualifying patients.

     SECTION 2.  Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§201-     Medical marijuana; economic and other data; collection.  (a)  The department shall continuously collect de-identified information regarding the medical marijuana registry and dispensary programs established pursuant to chapters 329 and 329D, including but not limited to information regarding the:

     (1)  Quantities of marijuana cultivated and dispensed;

     (2)  Number of qualifying patients;

     (3)  Geographic areas in which marijuana is cultivated and consumed;

     (4)  Prices of marijuana and related products;

     (5)  Number of employment opportunities related to marijuana; and

     (6)  Economic impact of marijuana cultivation and sales.

     (b)  Executive agencies shall cooperate with the department of business, economic development, and tourism to provide information required by the department pursuant to this section.

     (c)  The department shall provide the aggregated de-identified information to the department of health and the medical marijuana advisory commission established pursuant to section 329D-  .  The department shall provide any data analysis to the department of health or medical marijuana advisory commission upon request of either agency."

     SECTION 3.  Chapter 329D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§329D-     Medical marijuana advisory commission.  (a)  There is established within the department of health, for administrative purposes, a medical marijuana advisory commission.

     (b)  The commission shall advise the department regarding:

     (1)  Administrative rules related to medical marijuana;

     (2)  The number of medical marijuana dispensary licenses to be issued in the State;

     (3)  The operation of medical marijuana dispensaries; and

     (4)  The operation of the medical marijuana registry program.

     (c)  The commission shall comprise eleven members, who shall be appointed for four-year nonrenewable terms as follows:

     (1)  The senate president shall appoint two members;

     (2)  The house speaker shall appoint two members;

     (3)  The governor shall appoint three members; and

     (4)  The mayor of each county shall appoint one member,

provided that no member shall be an elected official or government official; provided further that the members appointed pursuant to paragraphs (3) and (4) shall be subject to the advice and consent of the senate.

     (d)  The members shall serve without compensation, but shall be reimbursed for necessary expenses incurred in carrying out their duties.

     (e)  The governor shall appoint a chairperson from among the members."

     SECTION 4.  Section 209E-2, Hawaii Revised Statutes, is amended by amending the definition of "eligible business activity" to read as follows:

     ""Eligible business activity" means the:

     (1)  Manufacture of tangible personal property, the wholesale sale of tangible personal property as described in section 237-4, or a service business as defined in this section;

     (2)  Production of agricultural products where the business is a producer as defined in section 237-5, or the processing of agricultural products, all or some of which were grown within an enterprise zone;

     (3)  Research, development, sale, or production of all types of genetically-engineered medical, agricultural, or maritime biotechnology products; or

     (4)  Production of electric power from wind energy for sale primarily to a public utility company for resale to the public[.],

provided that medical marijuana dispensary activities pursuant to chapter 329D shall not be considered an eligible business activity for the purposes of this chapter."

     SECTION 5.  Section 235-2.4, Hawaii Revised Statutes, is amended to read as follows:

     "§235-2.4  Operation of certain Internal Revenue Code provisions; sections 63 to 530.  (a)  Section 63 (with respect to taxable income defined) of the Internal Revenue Code shall be operative for the purposes of this chapter, subject to the following:

     (1)  Section 63(c)(1)(B) (relating to the additional standard deduction), 63(c)(1)(C) (relating to the real property tax deduction), 63(c)(1)(D) (relating to the disaster loss deduction), 63(c)(1)(E) (relating to the motor vehicle sales tax deduction), 63(c)(4) (relating to inflation adjustments), 63(c)(7) (defining the real property tax deduction), 63(c)(8) (defining the disaster loss deduction), 63(c)(9) (defining the motor vehicle sales tax deduction), and 63(f) (relating to additional amounts for the aged or blind) of the Internal Revenue Code shall not be operative for purposes of this chapter;

     (2)  Section 63(c)(2) (relating to the basic standard deduction) of the Internal Revenue Code shall be operative, except that the standard deduction amounts provided therein shall instead mean:

         (A)  $4,400 in the case of:

              (i)  A joint return as provided by section 235-93; or

             (ii)  A surviving spouse (as defined in section 2(a) of the Internal Revenue Code);

         (B)  $3,212 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code);

         (C)  $2,200 in the case of an individual who is not married and who is not a surviving spouse or head of household; or

         (D)  $2,200 in the case of a married individual filing a separate return;

     (3)  Section 63(c)(5) (limiting the basic standard deduction in the case of certain dependents) of the Internal Revenue Code shall be operative, except that the limitation shall be the greater of $500 or the individual's earned income; and

     (4)  The standard deduction amount for nonresidents shall be calculated pursuant to section 235-5.

     (b)  Section 68 (with respect to the overall limitation on itemized deductions) of the Internal Revenue Code shall be operative; provided that the thresholds shall be those that were operative for federal tax year 2009.

     (c)  Section 72 (with respect to annuities; certain proceeds of endowment and life insurance contracts) of the Internal Revenue Code shall be operative for purposes of this chapter and be interpreted with due regard to section 235-7(a), except that the ten per cent additional tax on early distributions from retirement plans in section 72(t) shall not be operative for purposes of this chapter.

     (d)  Section 85 (with respect to unemployment compensation) of the Internal Revenue Code shall be operative for purposes of this chapter, except that section 85(c) shall not be operative for purposes of this chapter.

     (e)  Section 108 (with respect to income from discharge of indebtedness) of the Internal Revenue Code shall be operative for purposes of this chapter, except that section 108(i) (relating to deferral and ratable inclusion of income arising from business indebtedness discharged by the reacquisition of a debt instrument) shall not be operative for purposes of this chapter.

     (f)  Section 121 (with respect to exclusion of gain from sale of principal residence) of the Internal Revenue Code shall be operative for purposes of this chapter, except that for the election under section 121(f), a reference to section 1034 treatment means a reference to section 235-2.4(s) in effect for taxable year 1997.

     (g)  Section 132 (with respect to certain fringe benefits) of the Internal Revenue Code shall be operative for purposes of this chapter, except that the provision in section 132(f)(2) that equalizes the dollar amounts for sections 132(f)(2)(A) and (B) shall not be operative and except that section 132(n) shall not apply to United States Department of Defense Homeowners Assistance Program payments authorized by the American Recovery and Reinvestment Act of 2009.

     (h)  Section 163 (with respect to interest) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that provisions in section 163(d)(4)(B) (defining net investment income to exclude dividends), section 163(e)(5)(F) (suspension of applicable high-yield discount obligation (AHYDO) rules) and section 163(i)(1) as it applies to debt instruments issued after January 1, 2010, (defining AHYDO) shall not be operative for the purposes of this chapter.

     (i)  Section 164 (with respect to taxes) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that:

     (1)  Section 164(a)(6) and (b)(6) shall not be operative for the purposes of this chapter;

     (2)  The deductions under section 164(a)(3) and (b)(5) shall not be operative for corporate taxpayers and shall be operative only for the following individual taxpayers:

         (A)  A taxpayer filing a single return or a married person filing separately with a federal adjusted gross income of less than $100,000;

         (B)  A taxpayer filing as a head of household with a federal adjusted gross income of less than $150,000; and

         (C)  A taxpayer filing a joint return or as a surviving spouse with a federal adjusted gross income of less than $200,000; and

     (3)  Section 164(a)(3) shall not be operative for any amounts for which the credit under section 235-55 has been claimed.

     (j)  Section 165 (with respect to losses) of the Internal Revenue Code shall be operative for purposes of this chapter, except that the amount prescribed by sections 165(h)(1) (relating to the limitation per casualty) of the Internal Revenue Code shall be a $100 limitation per casualty, and section 165(h)(3)(A) and (B) (both of which relate to special rules for personal casualty gains and losses in federally declared disasters) of the Internal Revenue Code shall not be operative for the purposes of this chapter.  Section 165 as operative for this chapter shall also apply to losses sustained from the sale of stocks or other interests issued through the exercise of the stock options or warrants granted by a qualified high technology business as defined in section 235-7.3.

     (k)  Section 168 (with respect to the accelerated cost recovery system) of the Internal Revenue Code shall be operative for purposes of this chapter, except that sections 168(j) (relating to property on Indian reservations), 168(k) (relating to the special allowance for certain property acquired during the period specified therein), 168(m) (relating to the special allowance for certain reuse and recycling property), and 168(n) (relating to the special allowance for qualified disaster assistance property) of the Internal Revenue Code shall not be operative for purposes of this chapter.

     (l)  Section 172 (with respect to net operating loss deductions) of the Internal Revenue Code shall be operative for purposes of this chapter, as further provided in section 235-7(d), except that section 172(b)(1)(J) and (j) (both of which relate to qualified disaster losses) of the Internal Revenue Code shall not be operative for purposes of this chapter.

     (m)  Section 179 (with respect to the election to expense certain depreciable business assets) of the Internal Revenue Code shall be operative for purposes of this chapter, except as provided in this subsection:

     (1)  The aggregate cost provided in section 179(b)(1) which may be taken into account under section 179(a) for any taxable year shall not exceed $25,000;

     (2)  The amount at which the reduction in limitation provided in section 179(b)(2) begins shall exceed $200,000 for any taxable year; and

     (3)  The following shall not be operative for purposes of this chapter:

         (A)  Defining section 179 property to include computer software in section 179(d)(1);

         (B)  Inflation adjustments in section 179(b)(5);

         (C)  Irrevocable election in section 179(c)(2); and

         (D)  Special rules for qualified disaster assistance property in section 179(e).

     (n)  Section 198A (with respect to the expensing of qualified disaster assistances expenses) of the Internal Revenue Code shall not be operative for purposes of this chapter.

     (o)  Section 219 (with respect to retirement savings) of the Internal Revenue Code shall be operative for the purpose of this chapter.  For the purpose of computing the limitation on the deduction for active participants in certain pension plans for state income tax purposes, adjusted gross income as used in section 219 as operative for this chapter means federal adjusted gross income.

     (p)  Section 220 (with respect to medical savings accounts) of the Internal Revenue Code shall be operative for the purpose of this chapter, but only with respect to medical services accounts that have been approved by the Secretary of the Treasury of the United States.

     (q)  Section 265 (with respect to expenses and interest relating to tax-exempt income) of the Internal Revenue Code shall be operative for purposes of this chapter; except that section 265(b)(3)(G) and (7) shall not be operative and section 265 shall not apply to expenses for royalties and other income derived from any patents, copyrights, and trade secrets by an individual or a qualified high technology business as defined in section 235-7.3.  Such expenses shall be deductible.

     (r)  Section 280E (with respect to expenditures in connection with the illegal sale of drugs) of the Internal Revenue Code shall be operative for the purposes of this chapter, except section 280E shall not be operative with respect to the production and sale of medical marijuana and manufactured marijuana products by dispensaries licensed under chapter 329D.

     [(r)] (s)  Section 382 (with respect to limitation on net operating loss carryforwards and certain built-in losses following ownership change) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that section 382(n) shall not be operative for purposes of this chapter.

     [(s)] (t)  Section 408A (with respect to Roth Individual Retirement Accounts) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that section 408A(d)(3)(A)(iii) shall not be operative for purposes of this chapter.  For the purposes of determining the aggregate amount of contributions to a Roth Individual Retirement Account or qualified rollover contribution to a Roth Individual Retirement Account from an individual retirement plan other than a Roth Individual Retirement Account, adjusted gross income as used in section 408A as operative for this chapter means federal adjusted gross income.

     [(t)] (u)  In administering the provisions of sections 410 to 417 (with respect to special rules relating to pensions, profit sharing, stock bonus plans, etc.), sections 418 to 418E (with respect to special rules for multiemployer plans), and sections 419 and 419A (with respect to treatment of welfare benefit funds) of the Internal Revenue Code, the department of taxation shall adopt rules under chapter 91 relating to the specific requirements under those sections and to other administrative requirements under those sections as may be necessary for the efficient administration of sections 410 to 419A.

     In administering sections 401 to 419A (with respect to deferred compensation) of the Internal Revenue Code, Public Law 93-406, section 1017(i), shall be operative for the purposes of this chapter.

     In administering section 402 (with respect to the taxability of beneficiary of employees' trust) of the Internal Revenue Code, the tax imposed on lump sum distributions by section 402(e) of the Internal Revenue Code shall be operative for the purposes of this chapter and the tax imposed therein is hereby imposed by this chapter at the rate determined under this chapter.

     [(u)] (v)  In administering section 403 (with respect to taxation of employee annuities) of the Internal Revenue Code, any funds that represent pre-tax employee deferrals or contributions that are distributed from the annuity and used solely to obtain retirement credits under the state employees' retirement system shall not be treated as a rollover for purposes of section 403(b)(8)(A) of the Internal Revenue Code, and those funds shall be subject to income tax under this chapter.

     [(v)] (w)  Section 451 (which provides general rules for taxable year of inclusion) of the Internal Revenue Code shall be operative, except that the provisions of sections 451(i)(3) and 451(i)(6), as they relate to a qualified electric utility, shall not be operative for purposes of this chapter.

     [(w)] (x)  In administering section 457 (with respect to compensation plans of state and local governments and tax-exempt organizations) of the Internal Revenue Code, any funds that represent pre-tax employee deferrals or contributions that are distributed from the deferred compensation plan and used solely to obtain retirement credits under the state employees' retirement system shall not be treated as a rollover for purposes of section 457(e)(16)(A) of the Internal Revenue Code and those funds shall be subject to income tax under this chapter.

     [(x)] (y)  Section 468B (with respect to special rules for designated settlement funds) of the Internal Revenue Code shall be operative for the purposes of this chapter and the tax imposed therein is hereby imposed by this chapter at a rate equal to the maximum rate in effect for the taxable year imposed on estates and trusts under section 235-51.

     [(y)] (z)  Section 469 (with respect to passive activities and credits limited) of the Internal Revenue Code shall be operative for the purposes of this chapter.  For the purpose of computing the offset for rental real estate activities for state income tax purposes, adjusted gross income as used in section 469 as operative for this chapter means federal adjusted gross income.

     [(z)] (aa)  Sections 512 to 514 (with respect to taxation of business income of certain exempt organizations) of the Internal Revenue Code shall be operative for the purposes of this chapter as provided in this subsection.

     "Unrelated business taxable income" means the same as in the Internal Revenue Code, except that in the computation thereof sections 235-3 to 235-5, and 235-7 (except subsection (c)), shall apply, and in the determination of the net operating loss deduction there shall not be taken into account any amount of income or deduction that is excluded in computing the unrelated business taxable income.  Unrelated business taxable income shall not include any income from a legal service plan.

     For a person described in section 401 or 501 of the Internal Revenue Code, as modified by section 235-2.3, the tax imposed by section 235-51 or 235-71 shall be imposed upon the person's unrelated business taxable income.

     [(aa)] (bb)  Section 521 (with respect to cooperatives) and subchapter T (sections 1381 to 1388, with respect to cooperatives and their patrons) of the Internal Revenue Code shall be operative for the purposes of this chapter as to any cooperative fully meeting the requirements of section 421-23, except that Internal Revenue Code section 521 cooperatives need not be organized in Hawaii.

     [(bb)] (cc)  Sections 527 (with respect to political organizations) and 528 (with respect to certain homeowners associations) of the Internal Revenue Code shall be operative for the purposes of this chapter and the taxes imposed in each section are hereby imposed by this chapter at the rates determined under section 235-71.

     [(cc)] (dd)  Section 529 (with respect to qualified tuition programs) shall be operative for the purposes of this chapter, except that sections 529(c)(6) and 529(e)(3)(A)(iii) shall not be operative.

     [(dd)] (ee)  Section 529A (with respect to qualified ABLE programs) shall be operative for the purposes of this chapter, except that section 529A(c)(3) (with respect to additional tax for distributions not used for disability expenses) shall not be operative.

     [(ee)] (ff)  Section 530 (with respect to Coverdell education savings accounts) of the Internal Revenue Code shall be operative for the purposes of this chapter.  For the purpose of determining the maximum amount that a contributor could make to an education individual retirement account for state income tax purposes, modified adjusted gross income as used in section 530 as operative for this chapter means federal modified adjusted gross income as defined in section 530."

     SECTION 6.  Section 237-24.3, Hawaii Revised Statutes, is amended to read as follows:

     "§237-24.3  Additional amounts not taxable.  In addition to the amounts not taxable under section 237-24, this chapter shall not apply to:

     (1)  Amounts received from the loading, transportation, and unloading of agricultural commodities shipped for a producer or produce dealer on one island of this State to a person, firm, or organization on another island of this State.  The terms "agricultural commodity", "producer", and "produce dealer" shall be defined in the same manner as they are defined in section 147-1; provided that agricultural commodities need not have been produced in the State;

     (2)  Amounts received by the manager, submanager, or board of directors of:

         (A)  An association of owners of a condominium property regime established in accordance with chapter 514A or 514B; or

         (B)  A nonprofit homeowners or community association incorporated in accordance with chapter 414D or any predecessor thereto and existing pursuant to covenants running with the land,

          in reimbursement of sums paid for common expenses;

     (3)  Amounts received or accrued from:

         (A)  The loading or unloading of cargo from ships, barges, vessels, or aircraft, whether or not the ships, barges, vessels, or aircraft travel between the State and other states or countries or between the islands of the State;

         (B)  Tugboat services including pilotage fees performed within the State, and the towage of ships, barges, or vessels in and out of state harbors, or from one pier to another; and

         (C)  The transportation of pilots or governmental officials to ships, barges, or vessels offshore; rigging gear; checking freight and similar services; standby charges; and use of moorings and running mooring lines;

     (4)  Amounts received by an employee benefit plan by way of contributions, dividends, interest, and other income; and amounts received by a nonprofit organization or office, as payments for costs and expenses incurred for the administration of an employee benefit plan; provided that this exemption shall not apply to any gross rental income or gross rental proceeds received after June 30, 1994, as income from investments in real property in this State; and provided further that gross rental income or gross rental proceeds from investments in real property received by an employee benefit plan after June 30, 1994, under written contracts executed prior to July 1, 1994, shall not be taxed until the contracts are renegotiated, renewed, or extended, or until after December 31, 1998, whichever is earlier.  For the purposes of this paragraph, "employee benefit plan" means any plan as defined in section 1002(3) of title 29 of the United States Code, as amended;

     (5)  Amounts received for purchases made with United States Department of Agriculture food coupons under the federal food stamp program, and amounts received for purchases made with United States Department of Agriculture food vouchers under the Special Supplemental Foods Program for Women, Infants and Children;

     (6)  Amounts received by a hospital, infirmary, medical clinic, health care facility, pharmacy, or a practitioner licensed to administer the drug to an individual for selling prescription drugs or prosthetic devices to an individual; provided that this paragraph shall not apply to any amounts received for services provided in selling prescription drugs or prosthetic devices.  As used in this paragraph:

          "Prescription drugs" are those drugs defined under section 328-1 and dispensed by filling or refilling a written or oral prescription by a practitioner licensed under law to administer the drug and sold by a licensed pharmacist under section 328-16 or practitioners licensed to administer drugs; [and] provided that "prescription drugs" shall not include the medical use of marijuana pursuant to chapters 329 and 329D; and

          "Prosthetic device" means any artificial device or appliance, instrument, apparatus, or contrivance, including their components, parts, accessories, and replacements thereof, used to replace a missing or surgically removed part of the human body, which is prescribed by a licensed practitioner of medicine, osteopathy, or podiatry and [which] that is sold by the practitioner or [which] that is dispensed and sold by a dealer of prosthetic devices; provided that "prosthetic device" shall not mean any auditory, ophthalmic, dental, or ocular device or appliance, instrument, apparatus, or contrivance;

     (7)  Taxes on transient accommodations imposed by chapter 237D and passed on and collected by operators holding certificates of registration under that chapter;

     (8)  Amounts received as dues by an unincorporated merchants association from its membership for advertising media, promotional, and advertising costs for the promotion of the association for the benefit of its members as a whole and not for the benefit of an individual member or group of members less than the entire membership;

     (9)  Amounts received by a labor organization for real property leased to:

         (A)  A labor organization; or

         (B)  A trust fund established by a labor organization for the benefit of its members, families, and dependents for medical or hospital care, pensions on retirement or death of employees, apprenticeship and training, and other membership service programs.

          As used in this paragraph, "labor organization" means a labor organization exempt from federal income tax under section 501(c)(5) of the Internal Revenue Code, as amended;

    (10)  Amounts received from foreign diplomats and consular officials who are holding cards issued or authorized by the United States Department of State granting them an exemption from state taxes; and

    (11)  Amounts received as rent for the rental or leasing of aircraft or aircraft engines used by the lessees or renters for interstate air transportation of passengers and goods.  For purposes of this paragraph, payments made pursuant to a lease shall be considered rent regardless of whether the lease is an operating lease or a financing lease.  The definition of "interstate air transportation" is the same as in 49 U.S.C. section 40102."

     SECTION 7.  Section 329-43.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§329-43.5[]]  Prohibited acts related to drug paraphernalia.  (a)  It is unlawful for any person to use, or to possess with intent to use, drug paraphernalia to plant, propagate, cultivate, grow, harvest, manufacture, compound, convert, produce, process, prepare, test, analyze, pack, repack, store, contain, conceal, inject, ingest, inhale, or otherwise introduce into the human body a controlled substance in violation of this chapter.  Any person who violates this section is guilty of a class C felony and upon conviction may be imprisoned pursuant to section 706-660 and, if appropriate as provided in section 706-641, fined pursuant to section 706-640.

     (b)  It is unlawful for any person to deliver, possess with intent to deliver, or manufacture with intent to deliver, drug paraphernalia, knowing, or under circumstances where one reasonably should know, that it will be used to plant, propagate, cultivate, grow, harvest, manufacture, compound, convert, produce, process, prepare, test, analyze, pack, repack, store, contain, conceal, inject, ingest, inhale, or otherwise introduce into the human body a controlled substance in violation of this chapter.  Any person who violates this section is guilty of a class C felony and upon conviction may be imprisoned pursuant to section 706-660 and, if appropriate as provided in section 706-641, fined pursuant to section 706-640.

     (c)  Any person eighteen years of age or over who violates subsection (b) by delivering drug paraphernalia to a person or persons under eighteen years of age who are at least three years younger than that adult person is guilty of a class B felony and upon conviction may be imprisoned pursuant to section 706-660 and if appropriate as provided in section 706-641, fined pursuant to section 706-640.

     (d)  It is unlawful for any person to place in any newspaper, magazine, handbill, or other publication any advertisement, knowing, or under circumstances where one reasonably should know, that the purpose of the advertisement, in whole or in part, is to promote the sale of objects designed or intended for use as drug paraphernalia.  Any person who violates this section is guilty of a class C felony and upon conviction may be imprisoned pursuant to section 706-660 and, if appropriate as provided in section 706-641, fined pursuant to section 706-640.

     (e)  Subsections (a) and (b) shall not apply to a person who is authorized to cultivate, possess, or use medical marijuana pursuant to part IX of chapter 329 and who:

     (1)  Uses;

     (2)  Possesses with intent to use;

     (3)  Delivers;

     (4)  Possesses with intent to deliver; or

     (5)  Manufacturers with intent to deliver,

drug paraphernalia that is consistent with the cultivation, manufacture, possession, provision, sale, or use of medical marijuana or medical marijuana products authorized pursuant to part IX of chapter 329 or chapter 329D."

     SECTION 8.  Section 329-121, Hawaii Revised Statutes, is amended as follows:

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

     ""Health care professional" means:

     (1)  A physician licensed to practice under chapter 453 with authority to prescribe drugs and registered under section 329-32; or

     (2)  An advanced practice registered nurse with prescriptive authority as described in section 457-8.6."

     2.  By amending the definitions of "debilitating medical condition", "primary caregiver", "qualifying patient", and "written certification" to read:

     ""Debilitating medical condition" means:

     (1)  Cancer, glaucoma, positive status for human immunodeficiency virus, acquired immune deficiency syndrome, or the treatment of these conditions;

     (2)  A chronic or debilitating disease or medical condition or its treatment that produces one or more of the following:

         (A)  Cachexia or wasting syndrome;

         (B)  Severe pain;

         (C)  Severe nausea;

         (D)  Seizures, including those characteristic of epilepsy;

         (E)  Severe and persistent muscle spasms, including those characteristic of multiple sclerosis or Crohn's disease; or

         (F)  Post-traumatic stress disorder; or

     (3)  Any other medical condition approved by the department of health pursuant to administrative rules in response to a request from a [physician] health care professional or potentially qualifying patient.

     "Primary caregiver" means a person eighteen years of age or older, other than the qualifying patient and the qualifying patient's [physician,] health care professional, who has agreed to undertake responsibility for managing the well-being of the qualifying patient with respect to the medical use of marijuana.  In the case of a minor or an adult lacking legal capacity, the primary caregiver shall be a parent, guardian, or person having legal custody.

     "Qualifying patient" means a person who has been diagnosed by a [physician] health care professional as having a debilitating medical condition.

     "Written certification" means the qualifying patient's medical records or a statement signed by a qualifying patient's [physician,] health care professional, stating that in the [physician's] health care professional's professional opinion, the qualifying patient has a debilitating medical condition and the potential benefits of the medical use of marijuana 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 only one year from the time of signing."

     3.  By repealing the definition of "physician":

     [""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 include physician's assistant or advanced practice registered nurse with prescriptive authority as described in section 453-5.3 or 457-8.6."]

     SECTION 9.  Section 329-122, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsections (a) and (b) to read:

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

     (1)  The qualifying patient has been diagnosed by a [physician] health care professional as having a debilitating medical condition;

     (2)  The qualifying patient's [physician] health care professional has certified in writing that, in the [physician's] health care professional's professional opinion, the potential benefits of the medical use of marijuana would likely outweigh the health risks for the particular qualifying patient; and

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

     (b)  Subsection (a) shall not apply to a qualifying patient under the age of eighteen years, unless:

     (1)  The qualifying patient's [physician] health care professional has explained the potential risks and benefits of the medical use of marijuana to the qualifying patient and to a parent, guardian, or person having legal custody of the qualifying patient; and

     (2)  A parent, guardian, or person having legal custody consents in writing to:

         (A)  Allow the qualifying patient's medical use of marijuana;

         (B)  Serve as the qualifying patient's primary caregiver; and

         (C)  Control the acquisition of the marijuana, the dosage, and the frequency of the medical use of marijuana by the qualifying patient."

     2.  By amending subsection (d) to read:

     "(d)  For the purposes of this section, "transport" means the transportation of marijuana, usable marijuana, or any manufactured marijuana product between:

     (1)  A qualifying patient and the qualifying patient's primary caregiver; or

     (2)  The production centers and the retail dispensing locations under a dispensary licensee's license;

provided that "transport" does not include the interisland transportation of marijuana, usable marijuana, or any manufactured marijuana product[.], except for testing pursuant to section 329D-8 as permitted under section 329D-6(m) and subject to section 329D-6(j)."

     SECTION 10.  Section 329-123, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

     "(a)  [Physicians] Health care professionals 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 applicant, primary caregiver, and [physician] health care professional as specifically required or permitted by this chapter.  The form shall require the address of the location where the marijuana is grown and shall appear on the registry card issued by the department of health.  The certifying [physician] health care professional shall be required to have a bona fide [physician-patient] health care professional-patient relationship with the qualifying patient.  All current active medical marijuana 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.] health care professional.  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 11.  Section 329-126, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§329-126[]]  Protections afforded to a treating [physician.] health care professional.  No [physician] health care professional 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 marijuana for a qualifying patient; provided that:

     (1)  The [physician] health care professional has diagnosed the patient as having a debilitating medical condition, as defined in section 329-121;

     (2)  The [physician] health care professional has explained the potential risks and benefits of the medical use of marijuana, as required under section 329-122;

     (3)  The written certification is based upon the [physician's] health care professional'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] health care professional-patient relationship; and

     (4)  The [physician] health care professional has complied with the registration requirements of section 329-123."

     SECTION 12.  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] health care professional not covered under section 329-126 for the medical use of marijuana shall be a misdemeanor.  This penalty shall be in addition to any other penalties that may apply for the non-medical use of marijuana.  Nothing in this section is intended to preclude the conviction of any person under section 710-1060 or for any other offense under part V of chapter 710."

     SECTION 13.  Section 329D-1, Hawaii Revised Statutes, is amended by adding eight new definitions to be appropriately inserted and to read as follows:

     ""Accreditation body" means an impartial organization that is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement for Testing and that requires laboratories to conform to ISO/IEC 17025, the general requirements for the competence of laboratories established by the International Organization for Standardization and the International Electrotechnical Commission.

     "Batch" means the amount of marijuana or the amount of each type of manufactured marijuana product that is prepared for sale at one time.

     "Certificate of accreditation" means a certificate issued by an accreditation body for a laboratory facility, entity, or site to be registered in this State.

     "Certified laboratory" means a laboratory that is certified by the department to test marijuana and manufactured marijuana products for content, contamination, and consistency as provided in this chapter.

     "Enclosed indoor facility" means a permanent, stationary structure with a solid floor, rigid exterior walls that encircle the entire structure on all sides, and a roof that protects the entire interior area from any exterior view and elements of weather.  An enclosed indoor facility excludes a greenhouse or shade house that does not comply with these requirements.

     "Plant" means a marijuana plant having at least three distinguishable and distinct leaves, each leaf being at least three centimeters in diameter, and a readily observable root formation consisting of at least two separate and distinct roots, each being at least two centimeters in length.  Multiple stalks emanating from the same root ball or root system is considered part of the same single plant.

     "Service contractor" means any person or entity that a dispensary licensee has engaged to perform any work or service related to the planning, designing, construction, maintenance, repair, renovation, expansion, modernization, product testing, or security of a production center or retail dispensing location, other than the actual operation of a production center or retail dispensing location or the actual cultivating, dispensing, manufacturing, or selling marijuana or marijuana products.

     "Subcontracting operator" means any person or entity that a dispensary licensee has engaged to operate a production center or retail dispensing location or to perform any cultivating, dispensing, manufacturing, or selling of marijuana or marijuana products in relation to the operation of a production center or retail dispensing location."

     SECTION 14.  Section 329D-2, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§329D-2[]]  Medical marijuana dispensaries; authorized; licensure(a)  No person shall operate a medical marijuana dispensary unless the person has a license issued by the department pursuant to this chapter.

     (b)  The director of health shall grant medical marijuana dispensary licenses to allow dispensaries to produce, manufacture, and dispense marijuana and manufactured marijuana products pursuant to this chapter.

     (c)  Each medical marijuana dispensary license shall allow production, manufacture, and dispensing of marijuana and manufactured marijuana products only in the county for which the license is granted.

     (d)  The department shall issue eight dispensary licenses statewide; provided that three dispensary licenses shall be issued for the city and county of Honolulu, two dispensary licenses each shall be issued for the county of Hawaii and the county of Maui, and one dispensary license shall be issued for the county of Kauai; provided further that no dispensary license shall be issued for the county of Kalawao.

     (e)  No person may be granted a dispensary license in more than one county.

     (f)  Up to two production centers shall be allowed under each dispensary license[,]; provided that each production center shall be limited to no more than three thousand marijuana plants.

     (g)  A dispensary licensee may establish up to two retail dispensing locations under the licensee's dispensary license.

     (h)  Each dispensary licensee may commence dispensing medical marijuana and manufactured marijuana products to qualifying patients or primary caregivers no sooner than July 15, 2016, with approval by the department, in accordance with this chapter.

     (i)  Retail dispensing locations shall not be at the same location as the dispensary licensee's production centers.

     (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; provided that the department shall make available not more than one license per five hundred qualifying patients residing in any single county.

     (k)  Notwithstanding any other law to the contrary, a dispensary shall not be subject to the prescription requirement of section 329-38 or to the board of pharmacy licensure or regulatory requirements under chapter 461.

     (l)  A dispensary licensee may engage one or more subcontracting operators to operate or assist in the operation of production centers and retail dispensary locations authorized pursuant to this section; provided that at no time shall any subcontracting operator be employed by or under contract with more than one dispensary licensee to operate production centers or retail dispensary locations.

     (m)  A dispensary licensee may engage one or more service contractors to assist in the planning, design, construction, expansion, maintenance, modernization, product testing, renovation, repair, and security of production centers and retail dispensary locations authorized pursuant to this section."

     SECTION 15.  Section 329D-6, Hawaii Revised Statutes, is amended by amending as follows:

     1.  By amended subsection (e) to read:

     "(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 [Saturday.] Sunday.  Retail dispensing locations shall be closed on [Sundays and] official state and federal holidays."

     2.  By amending subsection "g" to read:

     "(g)  In all dispensary facilities, only the licensee, if an individual, the registered employees of the dispensary licensee, and the registered employees of the [subcontracted] subcontracting operator for a production center or retail dispensing [locations] location shall be permitted to touch or handle any marijuana or manufactured marijuana products, except that a qualifying patient or the primary caregiver of a qualifying patient may receive manufactured marijuana products at a retail dispensing location following completion of a sale."

     3.  By amended subsection (m) to read:

     "(m)  A dispensary shall not transport marijuana or manufactured marijuana products to another county or another island[.]; provided that this subsection shall not apply to the transportation of medical marijuana for testing pursuant to section 329D-8 and subject to section 329D-6(j)."

     SECTION 16.  Section 329D-8, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§329D-8[]]  Laboratory standards and testing; laboratory certification.  (a)  The department shall establish and enforce standards for laboratory-based testing of marijuana and manufactured marijuana products for content, contamination, and consistency.

     (b)  The department may certify laboratories that can test marijuana and manufactured marijuana products prior to the sale of marijuana and manufactured marijuana products.

     (c)  A certified laboratory shall issue to the dispensary licensee and the department a certificate of analysis for each batch of marijuana and manufactured marijuana products tested for that dispensary; provided that a certified laboratory may only test and report on those things for which it is certified.  The certificate of analysis shall include the results with supporting data for the following:

     (1)  The chemical profile of the batch for the following compounds:

         (A)  (delta 9) - Tetrahydrocannabinol (THC);

         (B)  Tetrahydrocannabinol Acid (THCA);

         (C)  Cannabidiol (CBD);

         (D)  Cannabidiolic Acid (CBDA);

         (E)  Cannabigerol (CBG);

         (F)  Cannabinol (CBN);

     (2)  The presence of the following contaminants, which shall not exceed the following levels:

         (A)  Pesticides regulated by the United States Environmental Protection Agency and approved by the state department of agriculture for use on marijuana and plants similar to marijuana:  1 part per million;

         (B)  Solvents:

              (i)  Butanes:  800 parts per million;

             (ii)  Heptanes:  500 parts per million;

            (iii)  Benzene:  1 part per million;

             (iv)  Toluene:  1 part per million;

              (v)  Hexane:  150 parts per million;

             (vi)  Total xylenes (m,o,p-xylene):  1 part per million;

         (C)  Any visible foreign or extraneous material that is not intended to be part of the product being produced, including but not limited to mold, hair, insects, metal, or plastic;

         (D)  Moisture content of plant material less than 15 per cent;

         (E)  Microbiological impurities, including but not limited to:

              (i)  Total viable aerobic bacteria in unprocessed and processed materials:  105 colony forming units per gram;

             (ii)  Total viable aerobic bacteria in carbon dioxide and solvent based extracts:  104 colony forming units per gram;

            (iii)  Total yeast and mold in unprocessed and processed materials:  105 colony forming units per gram;

             (iv)  Total yeast and mold in carbon dioxide and solvent based extracts:  102 colony forming units per gram;

              (v)  Total coliforms in unprocessed and processed materials:  103 colony forming units per gram;

             (vi)  Total coliforms in carbon dioxide and solvent based extracts:  102 colony forming units per gram;

            (vii)  E. coli (generic):  100 colony forming units per gram;

          (viiii)  Salmonella spp:  not detected in 1 gram;

             (ix)  Aspergillus fumigatus, aspergillus flavus, aspergillus niger, aspergillus terreus:  less than 1 colony forming unit per gram; and

     (3)  Additional testing requested at the discretion of the department."

     SECTION 17.  Section 329D-10, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(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; [and]

     (7)  Transdermal patches;

     (8)  Substances specifically designed to be inhaled; and

    [(7)] (9)  Other products as specified by the department."

     SECTION 18.  Section 329D-12, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§329D-12[]]  Background checks.  Each applicant and licensee for a medical marijuana dispensary license, including the individual applicant and all officers, directors, shareholders with at least twenty-five per cent ownership interest or more, members, and managers of an entity applicant; each employee of a medical marijuana dispensary; each [subcontracted] employee of a subcontracting operator performing work at a production center [and] or retail dispensing location [employee]; all officers, directors, shareholders with at least twenty-five per cent ownership interest or more in a [subcontracted] subcontracting operator performing work at a production center or retail dispensing location; and any person permitted to enter and remain in dispensary facilities pursuant to section 329D‑15(a)(4) or 329D-16(a)(3), shall be subject to background checks conducted by the department or its designee, including but not limited to criminal history record checks in accordance with section 846-2.7.  The person undergoing the background check shall provide written consent and all applicable processing fees to the department or its designee to conduct the background checks."

     SECTION 19.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 20.  This Act shall take effect on July 1, 2016; provided that section 5 shall apply to taxable years beginning after December 31, 2015.

 

INTRODUCED BY:

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Report Title:

Medical Marijuana; Dispensaries; Advisory Commission; Paraphernalia; Certification; Testing; Taxation

 

Description:

Establishes the medical cannabis advisory commission.  Amends various definitions and provisions relating to medical marijuana dispensary operations, paraphernalia, and testing.  Provides that advanced practice registered nurses may certify patients for medical marijuana use.  Excludes dispensaries from enterprise zone tax exemptions.  Excludes medical marijuana from certain federal tax provisions.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.