Regular Session 2021-2022 House Bill 2035 P.N. 2345

PRINTER'S NO. 2345

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2035

Session of

2021

INTRODUCED BY SHUSTERMAN, SANCHEZ, HILL-EVANS, McNEILL, PARKER,

KENYATTA, ROZZI, KINSEY, FRANKEL, ZIMMERMAN, LONGIETTI,

MALAGARI, GUENST, N. NELSON AND MADDEN, OCTOBER 29, 2021

REFERRED TO COMMITTEE ON HEALTH, OCTOBER 29, 2021

AN ACT

Amending the act of April 17, 2016 (P.L.84, No.16), entitled "An

act establishing a medical marijuana program; providing for

patient and caregiver certification and for medical marijuana

organization registration; imposing duties on the Department

of Health; providing for a tax on medical marijuana

organization gross receipts; establishing the Medical

Marijuana Program Fund; establishing the Medical Marijuana

Advisory Board; establishing a medical marijuana research

program; imposing duties on the Department of Corrections,

the Department of Education and the Department of Human

Services; and providing for academic clinical research

centers and for penalties and enforcement," adding and

amending provisions relating to farmer-growers by, in

preliminary provisions, further providing for definitions; in

program, further providing for program established and for

unlawful use of medical marijuana; in medical marijuana

organizations, further providing for medical marijuana

organizations, for permits, for granting of permit, for

application and issuance, for fees and other requirements and

for limitations on permits; in medical marijuana controls,

further providing for electronic tracking, providing for

farmer-growers and further providing for storage and

transportation; in tax on medical marijuana, further

providing for tax on medical marijuana; in Medical Marijuana

Advisory Board, further providing for advisory board; in

academic clinical research centers and clinical registrants,

further providing for clinical registrants; and, in

miscellaneous provisions, further providing for zoning.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definition of "medical marijuana

organization" in section 103 of the act of April 17, 2016

(P.L.84, No.16), known as the Medical Marijuana Act, is amended

and the section is amended by adding a definition to read:

Section 103. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Farmer-grower." A person, including a natural person,

corporation, partnership, association, trust or other entity, or

any combination thereof, which holds a farmer-grower permit from

the department under this act to grow medical marijuana. The

term does not include a health care medical marijuana

organization under Chapter 19.

* * *

"Medical marijuana organization." A dispensary, farmer-

grower or a grower/processor. The term does not include a health

care medical marijuana organization under Chapter 19.

* * *

Section 2. Sections 301(a)(8), 304(b)(3), 601, 602(a)

introductory paragraph and (1), 603(a) and (d) and 606(a)

introductory paragraph of the act are amended to read:

Section 301. Program established.

(a) Establishment.--A medical marijuana program for patients

suffering from serious medical conditions is established. The

program shall be implemented and administered by the department.

The department shall:

* * *

(8) Develop enforcement procedures, including announced

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and unannounced inspections of facilities of the

grower/processors, farmer-growers and dispensaries and all

records of the medical marijuana organizations.

* * *

Section 304. Unlawful use of medical marijuana.

* * *

(b) Unlawful use described.--It is unlawful to:

* * *

(3) Grow medical marijuana unless the grower/processor

or farmer-grower has received a permit from the department

under this act.

* * *

Section 601. Medical marijuana organizations.

The following entities shall be authorized to receive a

permit to operate as a medical marijuana organization to grow,

process or dispense medical marijuana:

(1) Grower/processors.

(2) Dispensaries.

(3) Farmer-growers.

Section 602. Permits.

(a) Application.--An application for a grower/processor,

farmer-grower or dispensary permit to grow, process or dispense

medical marijuana shall be in a form and manner prescribed by

the department and shall include:

(1) Verification of all principals, operators, financial

backers or employees of a medical marijuana grower/processor,

farmer-grower or dispensary.

* * *

Section 603. Granting of permit.

(a) General rule.--The department may grant or deny a permit

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to a grower/processor, farmer-grower or dispensary.

* * *

(d) Regions.--The department shall establish a minimum of

three regions within this Commonwealth for the purpose of

granting permits to grower/processors, farmer-growers and

dispensaries and enforcing this act. The department shall

approve permits for grower/processors and dispensaries in a

manner which will provide an adequate amount of medical

marijuana to patients and caregivers in all areas of this

Commonwealth. The department shall consider the following when

issuing a permit:

(1) Regional population.

(2) The number of patients suffering from serious

medical conditions.

(3) The types of serious medical conditions.

(4) Access to public transportation.

(5) Any other factor the department deems relevant.

Section 606. Application and issuance.

(a) Duty to report.--An applicant to be a grower/processor

or farmer-grower or to operate a dispensary is under a

continuing duty to:

* * *

Section 3. Section 607 of the act is amended by adding a

paragraph to read:

Section 607. Fees and other requirements.

The following apply:

* * *

(2.1) For a farmer-grower:

(i) An initial application fee in the amount of

$2,500 shall be paid. The fee is nonrefundable.

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(ii) A fee for a permit as a farmer-grower in the

amount of $2,500 shall be paid. The permit shall be valid

for one year. Applicants shall submit the permit fee at

the time of submission of the application. The fee shall

be returned if the permit is not granted.

(iii) A renewal fee for the permit as a

grower/processor in the amount of $2,500 shall be paid

and shall cover renewal for all locations. The renewal

fee shall be returned if the renewal is not granted.

(iv) An application to renew a permit must be filed

with the department not more than six months nor less

than four months prior to expiration.

(v) All fees shall be paid by certified check or

money order.

(vi) Before issuing an initial permit under this

paragraph, the department shall verify that the applicant

has enough capital as determined by the department, which

must be on deposit with a financial institution.

* * *

Section 4. Section 616 introductory paragraph of the act is

amended and the section is amended by adding paragraphs to read:

Section 616. Limitations on permits.

The following limitations apply to approval of permits for

grower/processors, farmer-growers and dispensaries:

* * *

(8) The department shall promulgate regulations

initially limiting the number of farmer-grower permits issued

under this act. The number of farmer-grower permits issued

shall be determined by the department.

(9) The department may not issue more than one

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individual farmer-grower permit to one person.

(10) A farmer-grower may only provide medical marijuana

to a grower/processor holding a valid permit under this act.

Section 5. Section 701(d) introductory paragraph of the act

is amended, subsections (a) and (d) are amended by adding

paragraphs and the section is amended by adding a subsection to

read:

Section 701. Electronic tracking.

(a) Requirement.--A grower/processor or dispensary must

implement an electronic inventory tracking system which shall be

directly accessible to the department through its electronic

database that electronically tracks all medical marijuana on a

daily basis. The system shall include tracking of all of the

following:

* * *

(6) For a grower/processor, a purchase-to-sale tracking

system that tracks medical marijuana procured from a farmer-

grower for processing until the medical marijuana is sold to

a dispensary.

(a.1) Requirement for farmer-growers.--A farmer-grower must

implement an inventory tracking system which shall be accessible

to the department. The system shall include tracking of all of

the following:

(1) The number of medical marijuana plants located on a

site used for growing or cultivating medical marijuana.

(2) The number of medical marijuana plants located on a

site used for growing or cultivating medical marijuana that

have been successfully cultivated for sale to a

grower/processor.

(3) The number of medical marijuana plants located on a

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site used for growing or cultivating medical marijuana that

are unfit for cultivation and marked for disposal as plant

waste.

(4) A system to track the plant waste resulting from the

growth of medical marijuana or other disposal, including the

name and address of any disposal service.

(5) A weekly log of each week's beginning inventory,

acquisitions, amounts sold, disbursements, disposals and

ending inventory. The tracking system shall include prices

paid and amounts collected from grower/processors.

(6) Sites used for growing or cultivating medical

marijuana must be certified, inspected and permitted by and

registered with the department. The failure to permit

inspection by the department shall be a violation of this

chapter.

* * *

(d) Reports.--Within one year of the issuance of the first

permit to a grower/processor, farmer-grower or dispensary, and

every three months thereafter in a form and manner prescribed by

the department, the following information shall be provided to

the department, which shall compile the information and post it

on the department's publicly accessible Internet website:

* * *

(2.1) The amount of medical marijuana sold by a farmer-

grower during each three-month period.

(2.2) The price of amounts of medical marijuana sold by

a farmer-grower as determined by the department.

* * *

Section 6. The act is amended by adding a section to read:

Section 702.1. Farmer-growers.

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(a) Authorization.--Subject to subsection (b), a farmer-

grower may obtain seed and plant material from a

grower/processor within this Commonwealth to grow medical

marijuana in accordance with department regulations.

(b) Limitations.--A farmer-grower may only grow, store or

harvest medical marijuana in an enclosed, secure area which:

(1) is delineated to a single site at the address

identified on the permit issued by the department;

(2) does not exceed two acres of land;

(3) includes locking systems and other security and

surveillance features required by the department; and

(4) is located within this Commonwealth.

Section 7. Sections 703 introductory paragraph and (9),

901(a) and (f), 1201(j)(5)(iv), 2002(b)(8) and 2107 of the act

are amended to read:

Section 703. Storage and transportation.

The department shall develop regulations relating to the

storage and transportation of medical marijuana among

grower/processors and farmer-growers, testing laboratories and

dispensaries which ensure adequate security to guard against in-

transit losses. The tracking system developed by the department

shall include all transportation and storage of medical

marijuana. The regulations shall provide for the following:

* * *

(9) Transporting medical marijuana to a grower/processor

or farmer-grower, approved laboratory or dispensary.

Section 901. Tax on medical marijuana.

(a) Tax imposed.--A tax is imposed on the gross receipts of

a grower/processor received from the sale of medical marijuana

by a grower/processor to a dispensary, to be paid by the

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grower/processor, at the rate of 5%[.], unless the medical

marijuana was purchased from a farmer-grower, in which case the

tax imposed on the gross receipts shall be at a rate of 1%. The

tax shall be charged against and be paid by the grower/processor

and shall not be added as a separate charge or line item on any

sales slip, invoice, receipt or other statement or memorandum of

the price paid by a dispensary, patient or caregiver.

* * *

(f) Information.--A grower/processor or farmer-grower that

sells medical marijuana shall provide to the Department of

Revenue information required by the department.

Section 1201. Advisory board.

* * *

(j) Duties.--The advisory board shall have the following

duties:

* * *

(5) The written report under paragraph (4) shall include

recommendations and findings as to the following:

* * *

(iv) Whether to change, add or reduce the number of

growers/processors, farmer-growers or dispensaries.

* * *

Section 2002. Clinical registrants.

* * *

(b) Requirements.--The following shall apply to clinical

registrants:

* * *

(8) A grower/processor facility owned by a clinical

registrant may sell its medical marijuana products only to

the clinical registrant's dispensary facilities and the

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dispensary facilities of other clinical registrants. The

facility may sell seeds, medical marijuana plants and medical

marijuana products to, or exchange seeds, medical marijuana

plants and medical marijuana products with, any other

grower/processor facility or farmer-grower holding a permit

under Chapter 6 or this chapter.

* * *

Section 2107. Zoning.

The following apply:

(1) A grower/processor shall meet the same municipal

zoning and land use requirements as other manufacturing,

processing and production facilities that are located in the

same zoning district.

(1.1) A farmer-grower shall meet the same municipal

zoning and land use requirements as other agricultural

operations that are located in the same zoning district.

(2) A dispensary shall meet the same municipal zoning

and land use requirements as other commercial facilities that

are located in the same zoning district.

Section 8. This act shall take effect in 60 days.

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