Fiscal Summary
Increase State Revenue - $13,100/FY18-19/General Fund
$1,820,500/FY19-20/General Fund
$2,727,300/FY20-21/General Fund
$3,628,300/FY21-22 and Subsequent Years/General Fund
$217,000/FY18-19/Medical Cannabis Commission
$281,900/FY19-20/Medical Cannabis Commission
$369,800/FY20-21/Medical Cannabis Commission
$361,200/FY21-22/Medical Cannabis Commission
$361,700/FY22-23 and Subsequent Years/
Medical Cannabis Commission
$400/FY18-19/Department of State
$200/FY19-20/Department of State
$200/FY20-21/Department of State
Not Significant/FY21-22 and Subsequent Years/
Department of State
$48,500/FY18-19/TBI
$952,900/FY19-20/TBI
$1,416,700/FY20-21/TBI
$1,859,000/FY21-22/TBI
$1,857,100/FY22-23 and Subsequent Years/TBI
$1,391,600/FY19-20/Office of Criminal Justice Programs
$2,087,400/FY20-21/Office of Criminal Justice Programs
$2,783,100/FY21-22 and Subsequent Years/
Office of Criminal Justice Programs
$927,700/FY19-20/Drug Court Treatment Programs
$1,391,600/FY20-21/Drug Court Treatment Programs
$1,855,400/FY21-22 and Subsequent Years/
Drug Court Treatment Programs
$1,391,600/FY19-20/Department of Intellectual and Developmental Disabilities
$2,087,400/FY20-21/Department of Intellectual and Developmental Disabilities
$2,783,100/FY21-22 and Subsequent Years/
Department of Intellectual and Developmental Disabilities
$1,855,400/FY19-20/Department of Mental Health and Substance Abuse Services
$2,783,200/FY20-21/Department of Mental Health and Substance Abuse Services
$3,710,900/FY21-22 and Subsequent Years/
Department of Mental Health and Substance Abuse Services
$1,855,400/FY19-20/Department of Education
$2,783,200/FY20-21/Department of Education
$3,710,900/FY21-22 and Subsequent Years/
Department of Education
Increase State Expenditures - $74,800/FY19-20/General Fund
$72,000/FY20-21 and Subsequent Years/General Fund
$168,000/FY18-19/Medical Cannabis Commission
$335,900/FY19-20 and Subsequent Years/
Medical Cannabis Commission
$74,200/FY8-19/Board of Pharmacy
$129,900/FY19-20 and Subsequent Years/
Board of Pharmacy
$30,700/FY18-19/TBI
$15,900/FY19-20/TBI
$15,900/FY20-21/TBI
$2,300/FY21-22/TBI
$1,000/FY22-23 and Subsequent Years/TBI
Decrease State Expenditures - $2,463,800 Incarceration*
Increase Local Revenue - $4,638,600/FY19-20
$6,957,900/FY20-21
$9,277,200/FY21-22 and Subsequent Years
Other Fiscal Impact - The Board of Pharmacy is required to be self-supporting over any two-year period. The Board had an annual surplus of $885,058 in FY15-16, an annual surplus of $620,117 in FY16-17, and a cumulative reserve balance of $2,601,038 on June 30, 2017.
Bill Summary
Under present law, it is a criminal offense for any person to manufacture, deliver, or sell cannabis (marijuana) except as provided in the Tennessee Legend Drug and Controlled Substance Research Act of 1984. The classification of the offense and severity of the offense depends on the amount of cannabis involved, as well as numerous aggravating and mitigating factors.
Generally, this bill decriminalizes the sale and possession of medical marijuana by a licensed medical cannabis establishment and creates rules and guidelines for such establishments, and also decriminalizes the use and possession of medical cannabis by a qualifying patient. This bill also establishes the medical cannabis commission.
MEDICAL CANNABIS ESTABLISHMENTS
Application and Licensure
Under this bill, a medical cannabis establishment (establishment) is a cultivation facility, testing facility, processing facility, dispensary, wholesaler, or other medical cannabis entity licensed by the medical cannabis commission. To be eligible for a license, a person seeking to own or operate an establishment must submit an application and fee to the commission, containing information such as:
(1) The legal name of the establishment;
(2) All owners, officers, and board members of the establishment, who must not have been convicted of a disqualifying felony offense and must be over 21 years of age, as well as other requirements detailed in this bill;
(3) The physical address where the establishment will be located, and the location must meet requirements detailed in this bill;
(4) Evidence that the applicant controls at least $250,000, or other amount as determined by the commission, to cover initial expenses of opening the establishment and complying with this bill;
(6) A signed statement from each owner and officer of the establishment indicating if the owner or officer is required to pay child support under an order of support and, if so, whether the owner or officer is in compliance with the order of support. This bill prohibits the commission from issuing a license for any establishment where an owner or officer is more than $500 in arrears on child support payments and the arrears are 90 days or more past due;
(7) Operating procedures for the establishment that are consistent with the commission's rules. The procedures must include adequate security, electronic verification, and inventory control measures; and
(8) Any other information as the commission may require and as detailed in this bill.
This bill requires the commission to submit the fingerprints of each applicant, and each person who is to be an owner, officer, or board member of an establishment, to the Tennessee bureau of investigation for use in a criminal history record check by the bureau. If no record of a disqualifying felony is identified, the bureau must send the fingerprints to the federal bureau of investigation for verification of each person's identity and request the federal bureau of investigation conduct a criminal history record check.
The commission will accept applications once each year.
Location and Ownership Requirements and Limitations
This bill specifies that each establishment must be located in a separate building or facility that is in a location zoned or designated for commercial, industrial, or agricultural use, comply with all local ordinances and regulations pertaining to zoning, land use, and signage; and meet other requirements regarding appearance as set forth in this bill.
This bill prohibits any person serving as an owner of a medical cannabis establishment from serving as an owner for any other type of medical cannabis establishment, with exceptions detailed in this bill
This bill prohibits any person who holds a license issued by the alcoholic beverage commission, or who is an owner of any entity that holds such a license from serving as an owner of a medical cannabis establishment.
The commission will determine the appropriate number of licenses to issues for each type of establishment.
Local Option Election
This bill authorizes the voters of any county or municipality, by local option election, to permit the retail sale of medical cannabis product at a licensed dispensary within the territorial limits of such county or municipality, by a majority vote, at an election held as described in this bill.
Legislative Bodies May Opt Out
Under this bill, the cultivation of medical cannabis at a licensed cultivation facility and the production of medical cannabis product at a licensed processing facility (medical cannabis facilities) will be authorized within the territorial limits of each county and municipality of this state. However, the legislative body of any county or municipality may opt out and restrict the establishment of cultivation or processing facilities by passage of a resolution or ordinance. However, the adoption of such resolution or ordinance will not serve to restrict the operation of any medical cannabis established in a county's unincorporated areas or in the territorial limits of the municipality prior to the passage of the resolution or ordinance. Any legislative body that has opted out may, at a later date, opt in by passage of a resolution or ordinance in the same manner as required to opt out.
Medical Cannabis Establishment Agent Registration Card
This bill prohibits a person from working or volunteering at an establishment as a medical cannabis establishment agent (agent) unless the person is registered with the commission. An establishment that wishes to employ or retain as a volunteer an agent must submit to the commission an application accompanied by information detailed in this bill, potential agent's fingerprints, and an application fee. The following criteria will disqualify a person from serving as a medical cannabis establishment agent:
(1) Being younger than 21 years of age;
(2) Having been convicted of a disqualifying felony offense; or
(3) Being more than $500 in arrears on child support payments where the arrears are 90 days or more past due.
Noncompliance and Revocation
If the commission receives a certification of noncompliance indicating that the owner or officer of a medical cannabis establishment or an agent is in arrears on child support payments, the commission must immediately suspend the license of the medical cannabis establishment of the owner or officer or the agent registration card and notify the owner or officer or agent of the reason for the suspension.
The commission will reinstate a medical cannabis establishment license or agent registration card that has been suspended if the commission receives written confirmation of the agent's reasonable or full compliance with the order of support from the department of human services, district attorney general, or court.
This bill specifies that the following will be grounds for the commission to immediately revoke a medical cannabis establishment license:
(1) Dispensing, delivering, or otherwise transferring cannabis to a person other than a medical cannabis establishment agent, another medical cannabis establishment, a patient who holds a valid registry identification card, or the designated caregiver of such a patient;
(2) Acquiring usable cannabis or mature cannabis plants from any person other than a medical cannabis establishment agent or another medical cannabis establishment;
(3) Dispensing an unauthorized form of medical cannabis or cannabis product to a qualifying patient or designated caregiver; or
(4) Violating a rule promulgated pursuant to this bill.
This bill specifies that the following will be grounds for the commission to immediately revoke an agent registration card:
(1) The commission of any disqualifying felony offense;
(2) Dispensing, delivering, or otherwise transferring cannabis to a person other than a medical cannabis establishment agent, another medical cannabis establishment, a patient who holds a valid registry identification card, or the designated caregiver of such a patient;
(3) Dispensing an unauthorized form of medical cannabis or cannabis product to a qualifying patient or designated caregiver; or
(4) Violating a rule promulgated pursuant to this bill. However, the rule must provide that a violation of the rule is grounds for immediate revocation of a medical cannabis establishment agent registration card.
Other Rules and Procedures
This bill details certain other rules and procedures that will apply to establishments, including:
(1) Ensuring that every cardholder consults with a qualified pharmacist prior to the first time cannabis products are dispensed to the cardholder in this state;
(2) Ensuring all cultivation or production of cannabis take place in an enclosed; locked facility at the physical address provided to the commission during the licensure process for the cultivation facility;
(3) Prohibiting any person to use cannabis or cannabis products on the property or premises of the establishment;
(4) Being available for reasonable inspection by the commission at any time;
(5) Having the capability to send data to and receive data from the electronic verification system established by the commission;
(6) Maintaining an inventory control system that meets the requirements of this bill and all requirements established by the commission; and
(7) Other rules and procedures as detailed in this bill.
QUALIFYING PATIENTS AND DESIGNATED CAREGIVERS
Under this bill, a qualifying patient is any Tennessee resident who has been diagnosed as having a debilitating medical condition, which is defined as:
(1) Cancer, multiple sclerosis, positive status for HIV, acquired immune deficiency syndrome, Hepatitis C, amyotrophic lateral sclerosis, post-traumatic stress disorder, severe arthritis, Crohn's disease, Parkinson's disease, schizophrenia;
(2) A chronic or debilitating disease or medical condition or its treatment that produces one or more of the following: cachexia or wasting syndrome; severe, debilitating, or chronic pain; severe nausea; seizures; severe and persistent muscle spasms; or
(3) Any other medical condition approved by the commission in response to a request from a practitioner or potentially qualifying patient or a proposal initiated by a member of the commission.
This bill also establishes requirements for non-resident cardholders.
This bill authorizes the commission to issue a registry identification card to a qualifying patient who is a resident of this state and who submits an application to the commission accompanied by information as detailed in this bill, including a written certification issued by a practitioner that includes a confirmation of diagnosis of a debilitating medical condition. If a qualifying patient is less than 18 years of age, the commission will issue a registry identification card to the person if the custodial parent or legal guardian with responsibility for healthcare decisions for the person complies with requirements detailed in this bill. This bill details procedures regarding the denial of an application and reapplication process.
This bill requires, upon issuing a registry identification card to a qualifying patient, the commission to also issue a registry identification card to each person identified as a designated caregiver by the qualifying patient; provided, that certain requirements are met, including that the designated caregiver:
(1) Is a resident of this state;
(2) Is at least 21 years of age or a parent or legal guardian of a qualifying patient;
(3) Has agreed in writing, in a form prescribed by the commission, to assist with the qualifying patient's medical use of cannabis product;
(4) Has not been convicted of a disqualifying felony offense; and
(5) Does not assist more than five qualifying patients with their medical use of cannabis product, unless the designated caregiver's qualifying patients each reside in or are admitted to a healthcare facility where the designated caregiver is employed.
The commission may deny the issuance of a registry identification card to a designated caregiver only if the designated caregiver does not meet the requirements specified in this bill or the qualifying patient notifies the commission that the patient no longer wishes the person to be the patient's designated caregiver.
This bill specifies that a qualifying patient or designated caregiver is presumed to be engaged in the medical use of cannabis pursuant to this bill if the person is in possession of a valid registry identification card, issued by this state or another and which must be displayed upon request of a law enforcement officer, and possesses an amount of cannabis product in an authorized form that does not exceed the allowable amount.
Cannabis product, paraphernalia, or other property seized from a qualifying patient or designated caregiver in connection with a claimed medical use of cannabis under this bill must be returned immediately upon the determination by a court that the qualifying patient or designated caregiver is entitled to the protections of this bill, as evidenced by a decision not to prosecute, dismissal of charges, or an acquittal.
PRACTITIONERS
This bill specifies that no practitioner will be subject to arrest or prosecution, penalized in any manner, or denied any right or privilege, including any disciplinary action by a professional licensing board, for providing written certification for the medical use of cannabis for a qualifying patient if:
(1) The practitioner has diagnosed, or confirmed the diagnosis of, the patient as having a debilitating medical condition;
(2) The practitioner has explained the potential risks and benefits of the medical use of cannabis;
(3) The written certification is based upon the practitioner'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 practitioner-patient relationship;
(4) The practitioner has not abused the practitioner's authority to provide written certifications or diagnoses of debilitating medical conditions, including confirmation of debilitative diagnoses; and
(5) The practitioner has complied with the registration requirements under this bill.
OFFENSES
Under this bill, it will be a Class E felony for a person to knowingly obtain or attempt to obtain any cannabis product for medical use by:
(1) Fraud, deceit, misrepresentation, embezzlement, or theft;
(2) The forgery or alteration of a practitioner's written certification;
(3) Furnishing fraudulent medical information or the concealment of a material fact;
(4) The use of a false name or patient identification number, or the giving of a false address; or
(5) The forgery or alteration of a state-issued registry identification card.
Under this bill, except in the case of a medical emergency, including seizures, it will be a Class C misdemeanor for a qualifying patient to use and a designated caregiver to administer any medical cannabis or cannabis product:
(1) In any public place;
(2) On any form of public transportation; or
(3) While a passenger in a motor vehicle.
This bill requires a qualifying patient to obtain cannabis product for medical use only from a licensed dispensary or a designated caregiver. A designated caregiver must obtain cannabis product only from a licensed dispensary. A qualifying patient or designated caregiver must only possess cannabis in an authorized form and in an authorized amount.
A qualifying patient or designated caregiver who knowingly violates the above provisions will commit a Class B misdemeanor.
This bill prohibits the arrest, prosecution, or penalty in any manner, or denial of any right or privilege, including any civil penalty or disciplinary action by a court or occupational or professional licensing board or bureau, for:
(1) Being in the presence or vicinity of the medical use of cannabis; or
(2) Allowing the person's property to be used for authorized activities.
THE MEDICAL CANNABIS COMMISSION
This bill creates the medical cannabis commission, which will consist of nine members. The members comprising the commission must be of excellent character and reputation, be at least 30 years of age, and have been residents of this state for at least five years preceding their appointment. In making appointments to the commission, the speakers of the senate and house must strive to ensure that at least one person serving on the board is 60 years of age or older and that at least one person serving on the commission is a member of a racial minority.
This bill specifies that the nine members will be appointed to the commission as follows:
(1) Three members, appointed by the governor as follows:
(A) One member who has demonstrated expertise and experience in the field of finance, industry, or commerce;
(B) One member who has demonstrated expertise and experience in law enforcement; and
(C) One member from the field of higher education who has demonstrated expertise and experience in horticulture;
(2) Three members, appointed by the speaker of the senate as follows:
(A) One member who is a healthcare professional licensed to practice medicine or osteopathic medicine in this state;
(B) One member who is a healthcare professional licensed to practice pharmacy in this state; and
(C) One member who has demonstrated expertise and experience in the field of finance, industry, or commerce; and
(3) Three members, appointed by the speaker of the house as follows:
(A) One member who is a healthcare professional licensed to practice medicine or osteopathic medicine in this state;
(B) One member who is a healthcare professional licensed to practice pharmacy in this state; and
(C) One member who meets the criteria of a qualifying patient.
This bill provides for staggered initial terms of six years, thereafter, terms will be for six years.
This bill specifies that the members of the commission who are appointed by the speakers of the senate and the house of representatives will receive annual compensation in the sum of $6,000 per year, which will be payable in monthly installments out of the state treasury. All members will be reimbursed for their actual and necessary expenses incurred in connection with their official duties as members.
The commission will appoint and fix a salary for a director. The director must be at least 30 years of age, have been a citizen and resident of this state for at least five years prior to appointment, and must be licensed to practice law in this state. This bill details the duties of the director. This bill authorizes the director to appoint an assistant director, who will perform such duties and functions which may be assigned by the director or the commission. This bill authorizes the commission to appoint a chief law enforcement officer, whose duties are detailed in this bill, and to employ such attorneys, inspectors, agents, officers, and clerical assistance as may be necessary for the effective administration and enforcement of this bill.
This bill specifies that all fees authorized by this bill will be paid into the general fund and credited to a separate account for the commission. Funds in this account must be used solely for the implementation and enforcement of this bill by the commission, subject to the approval of the commissioner of finance and administration with the approval of the governor. This bill also requires the director, the chief law enforcement officer, and all other law enforcement personnel to be employed only on a full-time basis.
This bill specifies restrictions based on financial, familial, or property interests in any medical cannabis establishments, as well as on lobbying for or receiving gifts from establishments.
This bill authorizes the commission to have and exercise the following functions, duties, and powers:
(1) Issue all licenses for the cultivation, processing, testing, transportation, sale, and dispensing of medical cannabis and cannabis product, and to revoke any license authorized by this bill under certain conditions;
(2) Refuse to issue a license or registration card under certain conditions;
(3) Conduct investigations and audits for enforcing and preventing violations;
(4) Summon any applicant for a license or registration card and also to summon and examine witnesses, and to administer oaths to such applicants and witnesses in making any investigation;
(5) Promulgate necessary rules; and
(6) Other functions, duties, and powers as detailed in this bill.
This bill requires the director of the commission to file an annual report with the state and local government and the health and welfare committees of the senate and the state government and the health committees of the house no later than March 1 detailing with specificity each rule promulgated during the previous year together with the rationale for promulgating the rule.
TAXES
This bill specifies that the sales and use tax exemption that applies to prescription drugs will not apply to medical cannabis products. The retail sale of such products will be taxed at 5 percent of the sales price. Tax collected from the retail sale of the products will be apportioned and allocated as follows:
(1) 10 percent to the Tennessee bureau of investigation to be used for drug enforcement purposes;
(2) 5 percent to sheriffs' offices throughout the state to be used for drug training, including training related to this bill;
(3) 5 percent to police departments throughout the state to be used for drug training, including training related to this bill;
(4) 15 percent to the department of intellectual and developmental disabilities;
(5) 20 percent to the department of mental health and substance abuse services;
(6) 20 percent to the department of education for K-12 educational purposes;
(7) 15 percent to the account in the general fund established for the exclusive use of the department of mental health and substance abuse services to assist existing veterans treatment court programs, and to create and establish veterans treatment court programs; and
(8) 10 percent to the drug court treatment program resources fund to be administered by the department of mental health and substance abuse services, to support drug court treatment programs.
This bill specifies that local tax with respect to medical cannabis products that are subject to state tax will be imposed at the rate of 2 percent.
MISCELLANEOUS
This bill continues the authorization for cannabidiol of less than a certain percentage for use, or study of use, in treating certain conditions. This provision will take effect July 1, 2018. For rulemaking and other administrative purposes, including local elections, this bill will take effect upon becoming law. For all other purposes, this bill will take effect January 1, 2019.
