PRINTER'S NO. 1236
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1180
Session of
2021
INTRODUCED BY DELLOSO, SANCHEZ, SCHLOSSBERG, MERSKI, HILL-EVANS,
HOHENSTEIN, HARKINS, SCHWEYER, CIRESI, McNEILL, ISAACSON AND
GUZMAN, APRIL 15, 2021
REFERRED TO COMMITTEE ON LIQUOR CONTROL, APRIL 15, 2021
AN ACT
Amending the act of April 12, 1951 (P.L.90, No.21), entitled "An
act relating to alcoholic liquors, alcohol and malt and
brewed beverages; amending, revising, consolidating and
changing the laws relating thereto; regulating and
restricting the manufacture, purchase, sale, possession,
consumption, importation, transportation, furnishing, holding
in bond, holding in storage, traffic in and use of alcoholic
liquors, alcohol and malt and brewed beverages and the
persons engaged or employed therein; defining the powers and
duties of the Pennsylvania Liquor Control Board; providing
for the establishment and operation of State liquor stores,
for the payment of certain license fees to the respective
municipalities and townships, for the abatement of certain
nuisances and, in certain cases, for search and seizure
without warrant; prescribing penalties and forfeitures;
providing for local option, and repealing existing laws,"
providing for adult use cannabis; imposing certain gross
receipts tax and excise tax; and making related repeals.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of April 12, 1951 (P.L.90, No.21), known
as the Liquor Code, is amended by adding an article to read:
ARTICLE VIII-A
ADULT USE CANNABIS
Section 801-A. Purpose, findings and declarations.
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(a) Findings and declarations.--In the interest of the
efficient use of law enforcement resources, enhancing revenue
for public purposes and individual freedom, the people of this
Commonwealth find and declare that the use of cannabis should be
legal for individuals who are at least 21 years of age and
should be taxed.
(b) Additional findings and declarations.--In the interest
of the health and public safety of our citizenry, the people of
this Commonwealth further find and declare that cannabis should
be regulated in a manner similar to alcohol so that:
(1) individuals will have to show proof of age before
purchasing cannabis;
(2) selling, distributing or transferring cannabis to
minors and other individuals under 21 years of age shall
remain illegal;
(3) driving under the influence of cannabis shall remain
illegal;
(4) legitimate, State-operated stores and not criminal
actors will conduct sales of cannabis; and
(5) cannabis sold in this Commonwealth will be labeled
and subject to additional regulations to ensure that
consumers are informed and protected.
(c) Industrial hemp.--In the interest of enacting rational
policies for the treatment of all variations of the cannabis
plant, the people of this Commonwealth further find and declare
that industrial hemp should be regulated separately from strains
of cannabis with higher delta-9 tetrahydrocannabinol (THC)
concentrations.
(d) Matters of Statewide concern.--The people of this
Commonwealth further find and declare that it is necessary to
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ensure consistency and fairness in the application of this
article throughout this Commonwealth and that, therefore, the
matters addressed by this article are, except as specified in
this article, matters of Statewide concern.
Section 802-A. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Adult use cannabis." Cannabis ingested for any reason other
than medical purposes.
"Board." The Pennsylvania Liquor Control Board.
"Cannabis." The plant of the genus cannabis whether growing
or not, the parts and seeds thereof, the resin extracted from
any part of the plant, and every compound, manufacture, salt,
derivative, mixture or preparation of the plant, its seeds or
resin, including cannabis concentrate. The term does not include
industrial hemp or fiber produced from the stalks, oil or cake
made from the seeds of the plant, sterilized seed of the plant
that is incapable of germination or the weight of another
ingredient combined with cannabis to prepare topical or oral
administrations, food, drink or other product.
"Cannabis accessories." Equipment, products or materials
that are used, intended or designed for use in planting,
propagating, cultivating, growing, harvesting, composting,
manufacturing, compounding, converting, producing, processing,
preparing, testing, analyzing, packaging, repackaging, storing,
vaporizing or containing cannabis or for ingesting, inhaling or
otherwise introducing cannabis into the human body.
"Cannabis cultivation facility." An entity licensed to
cultivate, prepare and package cannabis and sell cannabis to a
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retail cannabis store, cannabis product manufacturing facility
and other cannabis cultivation facility, but not to a consumer.
"Cannabis establishment." A cannabis cultivation facility, a
cannabis testing facility and a cannabis product manufacturing
facility.
"Cannabis product." A concentrated cannabis product and a
cannabis product that is comprised of cannabis and other
ingredients and is intended for use or consumption, including as
an edible product, ointment or tincture.
"Cannabis product manufacturing facility." An entity
licensed to:
(1) purchase cannabis;
(2) manufacture, prepare and package cannabis products;
and
(3) sell cannabis and cannabis products to other
cannabis product manufacturing facilities and retail cannabis
stores, but not to a consumer.
"Cannabis testing facility." An entity licensed to analyze
and certify the safety and potency of cannabis.
"Consumer." An individual who is at least 21 years of age
and purchases cannabis or cannabis products for personal use and
not for resale to others.
"Industrial hemp." The plant of the genus cannabis and any
part of the plant, whether growing or not, with a delta-9
tetrahydrocannabinol concentration (THC) that does not exceed
0.03% on a dry-weight basis.
"Locality." A county, municipality or city of this
Commonwealth.
"Pennsylvania farm." An agricultural business incorporated
as a sole proprietorship, partnership, limited liability company
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or Pennsylvania S corporation that operates an area of land and
building used for growing crops and rearing animals.
"Retail cannabis store." A retail establishment operated by
the board as provided under section 805-A.
Section 803-A. Personal use of cannabis.
Notwithstanding any other provision of law, the following
acts are not unlawful and are not an offense under the laws of
this Commonwealth or the law of a locality within this
Commonwealth or a basis for seizure or forfeiture of an asset
under Commonwealth law for an individual who is at least 21
years of age:
(1) Possessing, using, displaying, purchasing or
transporting cannabis accessories or cannabis.
(2) (i) Possessing, growing, processing or transporting
not more than six cannabis plants, including mature,
flowering plants.
(ii) Possessing the cannabis produced by the plants
under subparagraph (i) on the premises where the plants
were grown, if the growing takes place in an enclosed,
locked space and is not conducted openly or publicly, and
the cannabis is not made available for sale.
(3) Transferring of one ounce or less of cannabis
without remuneration to an individual who is at least 21
years of age.
(4) Consuming cannabis, provided that nothing in this
section shall be construed to permit consumption that is
conducted openly and publicly or in a manner that endangers
others.
(5) Assisting another individual who is at least 21
years of age in an act described in paragraph (1), (2), (3)
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or (4).
Section 804-A. Lawful operation of cannabis-related facilities.
Notwithstanding any other provision of law, the following
acts are not unlawful and are not an offense under the laws of
this Commonwealth or a basis for seizure or forfeiture of an
asset under Commonwealth law for an individual who is at least
21 years of age:
(1) Manufacture, possession or purchase of a cannabis
accessory or the sale of a cannabis accessory to an
individual who is at least 21 years of age.
(2) Any of the following:
(i) Possessing, displaying or transporting cannabis
or a cannabis product.
(ii) Purchasing cannabis from a cannabis cultivation
facility.
(iii) Purchasing cannabis or a cannabis product from
a cannabis product manufacturing facility.
(iv) Selling cannabis or a cannabis product to a
consumer, if:
(A) the individual conducting the activity
described in this paragraph acts in the capacity of
an employee or agent of a retail cannabis store or
the board; and
(B) the retail cannabis store utilizes a
transaction scan device to verify the age of any
individual who appears to be less than 35 years of
age before making a sale of cannabis products.
(3) Any of the following:
(i) Cultivating, harvesting, processing, packaging,
transporting, displaying or possessing cannabis.
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(ii) Delivering or transferring cannabis to a
cannabis testing facility.
(iii) Selling cannabis to a cannabis cultivation
facility, a cannabis product manufacturing facility or a
retail cannabis store.
(iv) Purchasing cannabis from a cannabis cultivation
facility, if the person conducting the activity described
in this paragraph has obtained a current, valid license
to operate a cannabis cultivation facility or acts in the
capacity of an owner, employee or agent of a licensed
cannabis cultivation facility.
(4) Any of the following:
(i) Packaging, processing, transporting,
manufacturing, displaying or possessing cannabis or
cannabis products.
(ii) Delivering or transferring cannabis or a
cannabis product to a cannabis testing facility.
(iii) Selling cannabis or a cannabis product to a
retail cannabis store or a cannabis product manufacturing
facility.
(iv) Purchasing of cannabis from a cannabis
cultivation facility.
(v) Purchasing of cannabis or a cannabis product
from a cannabis product manufacturing facility, if the
individual conducting the activities described in this
paragraph has obtained a current, valid license to
operate a cannabis product manufacturing facility or acts
in the capacity of an owner, employee or agent of a
licensed cannabis product manufacturing facility.
(5) Possessing, cultivating, processing, repackaging,
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storing, transporting, displaying, transferring or delivering
cannabis or cannabis products, if the person has obtained a
current, valid license to operate a cannabis testing facility
or acts in the capacity of an owner, employee or agent of a
licensed cannabis testing facility.
(6) Leasing or otherwise allowing the use of property
owned, occupied or controlled by a person, corporation or
other entity for an activity conducted lawfully in accordance
with paragraph (1), (2), (3), (4) or (5).
Section 805-A. General powers of board.
In addition to sections 207 and 208 the board has the
following powers and duties:
(1) Buy, import or have in its possession for sale, and
sell cannabis and cannabis products in the manner provided in
this article, provided the purchases are made subject to the
approval of the State Treasurer or the State Treasurer's
designated deputy. The board shall buy cannabis and cannabis
products at the lowest price and in the greatest variety
reasonably obtainable.
(2) Control the manufacture, possession, sale,
consumption, importation, use, storage, transportation and
delivery of cannabis and cannabis products in accordance with
the provisions of this act and fix the wholesale and retail
prices at which cannabis and cannabis products may be sold at
retail cannabis stores as follows:
(i) Prices must be proportional with prices paid by
the board to its suppliers and reflect any advantage
obtained through volume purchases by the board.
(ii) The board may establish a preferential price
structure for cannabis produced within this Commonwealth
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for the promotion of the cannabis.
(iii) The board may not purchase cannabis or a
cannabis product that is produced in a state, territory
or country prohibiting the importation of cannabis or a
cannabis product that is produced in this Commonwealth.
(3) Determine the municipalities within which retail
cannabis stores shall be established and the locations of the
stores within the municipalities.
(4) Through the Department of General Services as its
agent, lease, furnish and equip buildings, rooms and other
accommodations as required for the operation of this article.
(5) Appoint, fix the compensation and define the powers
and duties of the managers, officers, inspectors, examiners,
clerks and other employees as required for the operation of
this article, subject to the provisions of the act of April
9, 1929 (P.L.177, No.175), known as The Administrative Code
of 1929, and 71 Pa.C.S. Pt. III (relating to civil service
reform).
(6) Determine the nature, form and capacity of the
packages and original containers to be used for containing
cannabis and cannabis products.
(7) Perform any other act deemed necessary or advisable
for the purpose of carrying into effect this article and the
regulations promulgated under this article.
(8) Periodically promulgate regulations that are
consistent with this article as the board may deem necessary
for the efficient administration of this article. The board
shall publish regulations throughout this Commonwealth in the
manner it deems necessary and advisable or as may be provided
by law.
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(9) By regulation, provide for the use of a computerized
referral system to assist consumers in locating special items
at retail cannabis stores and for the use of electronic
transfer of funds and credit cards for the purchase of
cannabis and cannabis products at retail cannabis stores.
(10) Issue grants to various entities for cannabis
education and prevention efforts.
Section 806-A. Regulation of cannabis.
(a) Regulations.--Not later than July 1, 2022, the board
shall adopt regulations necessary for implementation of this
article. The regulations may not prohibit the operation of a
cannabis establishment, either expressly or through a regulation
that makes the operation unreasonably impracticable. The
regulations shall include:
(1) Procedures for the issuance, renewal, suspension and
revocation of a license to operate a cannabis establishment.
(2) A schedule of application and licensing fees,
including an annual $700 license renewal surcharge, provided
that an application fee may not exceed $5,000 with the upper
limit adjusted annually for inflation, unless the board
determines a greater fee is necessary to carry out its
responsibilities under this section.
(3) Qualifications for licensure that are directly and
demonstrably related to the operation of a cannabis
establishment.
(4) Security requirements for a cannabis establishment.
(5) Requirements to prevent the sale or diversion of
cannabis and a cannabis product to an individual who is less
than 21 years of age.
(6) Labeling requirements for cannabis and a cannabis
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product sold or distributed by a cannabis establishment.
(7) Health and safety regulations and standards for the
manufacture of a cannabis product and the cultivation of
cannabis.
(8) Restrictions on the advertising and display of
cannabis and a cannabis product.
(9) Civil penalties for the failure to comply with
regulations promulgated under this section.
(b) Individual privacy.--Notwithstanding subsection (a), the
board may not require a consumer to provide a retail cannabis
store with personal information other than government-issued
identification to determine the consumer's age, and a retail
cannabis store may not be required to acquire and record
personal information about a consumer other than information
typically acquired in a financial transaction conducted at a
retail liquor store.
(c) Taxation of adult use cannabis and cannabis products.--
(1) A gross receipts tax is imposed on the gross
receipts of a cannabis cultivation facility received from the
sale of adult use cannabis or cannabis products by a cannabis
cultivation facility to another cannabis cultivation
facility, cannabis product manufacturing facility or retail
cannabis store, to be paid by the cannabis cultivation
facility at the rate of 10%. The tax shall be charged against
and be paid by the cannabis cultivation facility 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.
(2) The tax under paragraph (1) shall not be levied on a
cannabis cultivation facility that partners with a
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Pennsylvania farm to grow or process cannabis for the
cannabis cultivation facility.
(3) An excise tax is imposed at the point of sale of
adult use cannabis or cannabis products at the rate of 19%. A
person required to collect the tax shall clearly provide
notice of the assessment of the tax to the consumer through
advertising or separate listing on a sales receipt or
invoice.
(4) The taxes imposed under this subsection shall be
administered in the same manner as the tax imposed under
Article XI of the act of March 4, 1971 (P.L.6, No.2), known
as the Tax Reform Code of 1971, except that estimated tax
payments under section 3003.2 of the Tax Reform Code of 1971
shall not be required. A cannabis cultivation facility shall
make quarterly payments under this section for each calendar
quarter at the rate prescribed in this subsection on the
gross receipts for the calendar quarter. The tax shall be due
and payable on the 20th day of January, April, July and
October for the preceding calendar quarter on a form
prescribed by the Department of Revenue.
(5) The Department of Revenue shall deposit 100% of all
money received from the tax imposed under this subsection
into the General Fund.
(d) Locality.--A locality shall enact an ordinance or
regulation:
(1) Specifying the entity within the locality that is
responsible for processing applications submitted for a
license to operate a cannabis establishment within the
boundaries of the locality.
(2) For the issuance of licenses should the issuance by
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the locality become necessary because of:
(i) a failure by the board to adopt regulations
under subsection (a); or
(ii) a failure by the board to process and issue
licenses as required by subsection (f).
(e) Ordinance or regulation.--A locality may enact an
ordinance or regulation, not in conflict with this section or
with a regulation promulgated under this section, which:
(1) Governs the time, place, manner and number of
cannabis establishment operations.
(2) Establishes procedures for the issuance, suspension
and revocation of a license issued by the locality.
(3) Establishes a schedule of annual operating,
licensing and application fees for cannabis establishments,
provided the application fees are only due if applications
are submitted to a locality and a licensing fee is only due
if a license is issued by a locality.
(4) Establishes civil penalties for violation of an
ordinance or regulation governing the time, place and manner
of a cannabis establishment that may operate in the locality.
(f) License application.--Each application for an annual
license to operate a cannabis establishment must be submitted to
the board. The board shall:
(1) Begin accepting and processing applications on
October 1, 2022.
(2) Immediately forward a copy of an application and
half of the license application fee to the locality in which
the applicant desires to operate the cannabis establishment.
(3) Issue an annual license to the applicant between 45
and 90 days after receipt of an application, unless the board
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finds the applicant is not in compliance with regulations
enacted under subsection (a) or the board is notified by the
relevant locality that the applicant is not in compliance
with ordinances and regulations in effect at the time of
application. If a locality enacted a limit on the number of
cannabis establishments in the locality and a greater number
of applicants seek licenses in the locality, the board shall
solicit and consider input from the locality as to the
locality's preference or preferences for licensure.
(4) Upon denial of an application, notify the applicant
in writing of the specific reason for the denial.
(g) Resubmission of application to locality.--
(1) If the board does not issue a license to an
applicant within 90 days of receipt of the application filed
and does not notify the applicant of the specific reason for
the denial, in writing and within the time period, the
applicant may resubmit the application directly to the
locality, and the locality may issue an annual license to the
applicant.
(2) A locality issuing a license to an applicant shall
do so within 90 days of receipt of the resubmitted
application unless the locality finds and notifies the
applicant that the applicant is not in compliance with
ordinances and regulations in effect at the time the
application is resubmitted and the locality shall notify the
board if an annual license has been issued to the applicant.
(3) If an application is submitted to a locality under
this subsection, the board shall forward to the locality the
application fee paid by the applicant to the board upon
request by the locality.
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(4) A license issued by a locality in accordance with
this subsection has the same force and effect as a license
issued by the board and the holder of the license is not
subject to regulation or enforcement by the board during the
term of the license.
(5) A subsequent or renewed license may be issued under
this subsection on an annual basis only upon resubmission to
the locality of a new application submitted to the board.
(6) This subsection shall not be construed to limit the
relief available to an aggrieved party.
Section 807-A. Diversity goals.
(a) Goals.--It is the intent and goal of the General
Assembly that the board promote diversity and the participation
by diverse groups in the activities authorized under this
article. In order to further this goal, the board shall adopt
and implement policies to ensure that:
(1) Diverse groups are accorded equal opportunity in the
licensing process.
(2) Licensees promote the participation of diverse
groups in their operations by affording equal access to
employment opportunities.
(b) Duties of board.--To facilitate participation by diverse
groups in the activities authorized under this article, the
board shall:
(1) Conduct necessary and appropriate outreach,
including, if necessary, consulting with other Commonwealth
agencies to identify diverse groups who may qualify for
participation in activities under this article.
(2) Provide sufficient and continuous notice of the
participation opportunities afforded under this article by
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publishing notice on the board's publicly accessible Internet
website.
(3) Include in the applications for license under this
article language to encourage applicants to utilize and give
consideration to diverse groups for contracting or
professional services opportunities.
(c) Reports.--No later than March 1, 2022, and each March 1
thereafter, the board shall submit a report to the chairperson
and minority chairperson of the Law and Justice Committee of the
Senate and the chairperson and minority chairperson of the
Liquor Control Committee of the House of Representatives
summarizing the participation and utilization of diverse groups
in the activities authorized under this article. The report
shall include:
(1) The participation level, by percentage, of diverse
groups in the activities authorized under this article.
(2) A summary of how diverse groups are utilized by
licensees, including in the provision of goods or services.
(3) Any other information the board deems appropriate.
(d) Definitions.--The following words and phrases when used
in this section shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Disadvantaged business." As defined in 74 Pa.C.S. § 303(b)
(relating to diverse business participation).
"Diverse group." A disadvantaged business, minority-owned
business, women-owned business, service-disabled veteran-owned
small business or veteran-owned small business that has been
certified by a third-party certifying organization.
"Minority-owned business." As defined in 74 Pa.C.S. §
303(b).
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"Service-disabled veteran-owned small business." As defined
in 51 Pa.C.S. § 9601 (relating to definitions).
"Third-party certifying organization." As defined in 74
Pa.C.S. § 303(b).
"Veteran-owned small business." As defined in 51 Pa.C.S. §
9601.
"Women-owned business." As defined in 74 Pa.C.S. § 303(b).
Section 808-A. Cannabis clean slate.
(a) General rule.--A person who has been arrested for,
charged with or convicted under section 13(a)(31) of the act of
April 14, 1972 (P.L.233, No.64), known as The Controlled
Substance, Drug, Device and Cosmetic Act, shall have the
person's criminal history related to the criminal proceeding
expunged in accordance with subsection (b).
(b) Expungement process.--The following shall apply:
(1) The Administrative Office of Pennsylvania Courts
shall, within six months of the effective date of this
article, transmit to the Pennsylvania State Police central
repository all records related to an arrest or conviction
under subsection (a) for expungement.
(2) If the Pennsylvania State Police determines a record
transmitted under paragraph (1) is not eligible for
expungement, the Pennsylvania State Police shall notify the
Administrative Office of Pennsylvania Courts of the
determination within 30 days of receiving the information.
(3) Upon expiration of the 30-day period, the
Administrative Office of Pennsylvania Courts shall provide to
the court of common pleas in which the arrest or adjudication
occurred a list of all records eligible for expungement.
(4) Within 30 days of receiving the list, the court of
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common pleas shall order the expungement of all criminal
history records received under this section and all
administrative records of the Department of Transportation
relating to the criminal history records received under this
section.
(c) Release of inmates.--A court of common pleas that has
received an expungement order for a person currently
incarcerated for the crime for which the court received the
expungement order shall transmit to the appropriate county
correctional institution or State correctional institution, as
defined under 61 Pa.C.S. § 102 (relating to definitions), an
order for the immediate release or discharge of the person whose
record has been ordered to be expunged.
(d) Motor vehicle operation privileges.--The Bureau of Motor
Vehicles shall reinstate a person's suspended or revoked motor
vehicle operation privileges that were suspended or revoked as a
result of a person's conviction that has been expunged under
this section.
(e) Reinstatement of license or registration.--A license or
registration that has been suspended or revoked under section 23
of The Controlled Substance, Drug, Device and Cosmetic Act due
to an arrest or conviction that has been expunged under this
section shall be reinstated.
Section 809-A. Employment provisions.
(a) Cannabis in workplace.--No employer shall be required to
permit or accommodate the use, consumption, possession,
transfer, display, transportation, sale or growing of cannabis
in the workplace.
(b) Random drug tests.--A random drug test showing the mere
presence of a nonintoxicating level of cannabis may not be the
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basis of the termination of employment or any other disciplinary
action against the employee.
(c) Construction.--Nothing in this article shall be
construed to affect the ability of an employer to adopt and
enforce policies restricting the use of cannabis by employees in
the workplace.
Section 2. Repeals are as follows:
The General Assembly finds that the repeals under this
section are necessary to effectuate the addition of Article
VIII-A of the act:
(1) Section 4(1)(iii)16 and (iv) of the act of April 14,
1972 (P.L.233, No.64), known as The Controlled Substance,
Drug, Device and Cosmetic Act, are repealed.
(2) Section 13(a)(30) and (31) of The Controlled
Substance, Drug, Device and Cosmetic Act are repealed insofar
as they are inconsistent with Article VIII-A of the act.
(3) All acts and parts of acts are repealed insofar as
they are inconsistent with this act.
Section 3. This act shall take effect in 30 days.
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