Regular Session 2023-2024 Senate Bill 0773 P.N. 1105

PRIOR PRINTER'S NO. 860

PRINTER'S NO. 1105

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

773

Session of

2023

INTRODUCED BY GEBHARD, STEFANO, BARTOLOTTA, ROBINSON, COSTA,

CULVER, LAUGHLIN AND LANGERHOLC, JUNE 8, 2023

AS AMENDED ON THIRD CONSIDERATION, SEPTEMBER 19, 2023

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," in preliminary

provisions, further providing for definitions; and, in

medical marijuana organizations, further providing for

limitations on permits and providing for additional

dispensary permits authorized, for application and issuance

of additional dispensary permits and for limitations on other

additional permits or licenses.; AND, IN ACADEMIC CLINICAL

RESEARCH CENTERS AND CLINICAL REGISTRANTS, FURTHER PROVIDING

FOR DEFINITIONS.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 103 of the act of April 17, 2016 (P.L.84,

No.16), known as the Medical Marijuana Act, is amended by adding

definitions to read:

Section 103. Definitions.

The following words and phrases when used in this act shall

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have the meanings given to them in this section unless the

context clearly indicates otherwise:

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"Change of control transaction." The consolidation, merger

or acquisition by a person or group of persons acting in concert

of more than 20% of:

(1) a medical marijuana organization's securities or

other ownership interests, with the exception of any

ownership interest of the person that existed at the time of

the issuance of the initial medical marijuana organization's

permit and payment of the initial permit; or

(2) the securities or other ownership interests of a

corporation or other form of business entity which owns

directly or indirectly 20% of the securities or other

ownership interests of the medical marijuana organization.

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"Independent grower/processor." A grower/processor awarded a

permit to operate in this Commonwealth that meets all of the

following criteria as of the effective date of this definition:

(1) Has not had its permit revoked .

(2) Has not entered into a merger, acquisition or other

change of control transaction with any other entity that was

awarded a grower/processor permit, a dispensary permit or a

clinical registrant permit in this Commonwealth .

(3) Is not otherwise associated with or materially the

same as another medical marijuana organization in this

Commonwealth through a parent company or subsidiary of

another entity that holds a permit from the department under

this act or through the sharing of officers or directors,

employees, facilities, equipment, finances or capital.

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"Materially the same." A person who shares any of the

following with another person:

(1) Profits or losses.

(2) Common valuation, in the case of a publicly traded

company.

(3) Common ownership of 5% or greater, including

subsidiaries.

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"Parent company." A company which directly or indirectly

controls any other permittee under this act.

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"Person." A natural person, corporation, foundation,

organization, business trust, estate, limited liability company,

licensed corporation, trust, partnership, limited liability

partnership, association or other form of legal business entity.

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Section 2. Section 616(5) of the act is amended to read:

Section 616. Limitations on permits.

The following limitations apply to approval of permits for

grower/processors and dispensaries:

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(5) [No] Except as provided under section 617, no more

than five grower/processors may be issued permits as

dispensaries. If the number of growers/processors is

increased under section 1202, no more than 20% of the total

number of growers/processors may also be issued permits as

dispensaries.

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Section 3. The act is amended by adding sections to read:

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Section 617. Additional dispensary permits authorized.

(a) Authorization.--An independent grower/processor that

applies and meets the requirements under section 618 shall be

issued two dispensary permits.

(b) Rights and privileges.--The dispensary permits issued

under this section shall have all the rights and privileges

afforded to dispensaries operating as medical marijuana

organizations under section 601(2). CARRY THE SAME RIGHTS,

PRIVILEGES AND OBLIGATIONS AS DISPENSARY PERMITS ISSUED UNDER

THIS CHAPTER.

PERMITS ISSUED UNDER THIS SECTION SHALL BE SUBJECT TO THE

REQUIREMENTS IN CHAPTER 8.

may not suspend, revoke or withdraw a permit or fail to renew

the permit of an entity that receives a dispensary permit under

this section due to the entity ceasing to qualify as an

independent grower/processor after the holder of the dispensary

permit becomes operational in this Commonwealth. NOTHING IN THIS

SECTION SHALL PROHIBIT THE DEPARTMENT FROM TAKING ACTION FOR A

VIOLATION OF SECTION 618(A)(4).

Section 618. Application and issuance of additional dispensary

permits.

(a) Applications.--

(1) The department shall develop a standard application

form and make the form available to independent

grower/processors that apply for dispensary permits

authorized under section 617.

(2) The department shall, within 30 days of the

effective date of this paragraph, accept applications from

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independent grower/processors for dispensary permits

authorized under section 617.

(3) The department shall review applications for

dispensary permits authorized under section 617 within 30

days of receipt of an application under paragraph (1) from an

eligible independent grower/processor.

(4) THE DEPARTMENT SHALL REQUIRE AN APPLICANT FOR A

DISPENSARY PERMIT AUTHORIZED UNDER SECTION 617 TO CERTIFY TO

THE DEPARTMENT IN THE APPLICATION THAT THE APPLICANT WILL NOT

ENTER INTO A MERGER, ACQUISITION, CHANGE OF CONTROL

TRANSACTION OR OTHERWISE BECOME ASSOCIATED WITH OR MATERIALLY

THE SAME AS ANOTHER MEDICAL MARIJUANA ORGANIZATION, ENTITY OR

PERSON THAT HOLDS A PERMIT FROM THE DEPARTMENT FOR A DURATION

OF ONE YEAR FROM THE DATE ON WHICH THE INDEPENDENT

GROWER/PROCESSOR RECEIVES AN OPERATIONAL CERTIFICATE FROM THE

DEPARTMENT.

(b) Issuance.--

(1) The department shall issue dispensary permits within

15 days of review of applications received under this section

to all applicants that meet the minimum requirements for

permitting UNDER THIS CHAPTER . The department shall notify an

applicant for dispensary perm its authorized under section 617

of the approval of an application by certified mail or email.

(2) If an applicant under this section does not meet the

minimum criteria for permitting, the department shall notify

the applicant by certified mail or email within 15 days of

review of the application which shall include deficiencies in

the application and unmet requirements.

(3) If the department denies an application for

dispensary perm its authorized under section 617, no later

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than 15 days after completing the review under subsection (a)

(2), the department shall notify the applicant of the denial

by certified mail or email. The notice shall include each

deficiency in the application that does not meet the

requirements to be issued a permit under this act.

(4) If the department determines that an application is

complete but lacks sufficient information upon which to make

a determination, the department shall notify the applicant in

writing of the factors that require additional information

and documentation. The following apply:

(i) Except as provided under subparagraph (iv), an

applicant has 30 days from the mailing date of the notice

under this paragraph to provide the requested information

and documentation to the department.

(ii) An applicant's failure to provide the requested

information to the department by the deadline may be

grounds for denial of the issuance of the dispensary

permit.

(iii) Nothing in this paragraph requires the

department to request additional or supplemental

information from an applicant if the application is

deemed complete under paragraph (1).

(iv) Upon showing of good cause, the department may

extend the deadline in subparagraph (i) one time for up

to an additional 15 days.

(v) The department shall issue MAKE A DETERMINATION

ON THE ISSUANCE OF the dispensary permit within 15 days

of receipt of the requested information or documentation

required to make a determination.

(5) Upon request for inspection or reinspection for an

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operational certificate, the department shall inspect the

dispensary location within 30 days of request by certified

mail or email.

(6) Appeals to the issuance or denials of dispensary

permits under this section must be responded to by the

department within 30 days of submittal.

dispensary permit under this section shall remit at the time of

application:

(1) A nonrefundable application review fee in the amount

of $5,000. A subsequent application for a denied application

under this section shall not incur an additional application

review fee.

(2) A permitting fee in the amount of $30,000 which

shall be considered earned by the department upon the

issuance of a dispensary permit. The permitting fee shall be

held by the department until a dispensary permit is issued by

the department or the applicant notifies the department by

certified mail or email that the applicant is abandoning the

application and that the applicant requests the return of the

$30,000 permitting fee.

(1) AN INDEPENDENT GROWER/PROCESSOR APPLYING FOR:

(I) AN INI TIAL APPLICATION FEE IN THE AMOUNT OF

$5,000. THE FEE IS NONREFUNDABLE.

(II) A PERMIT FEE OF $30,000 FOR EACH LOCATION. THE

PERIOD OF THE PERMIT SHALL BE ONE YEAR. AN APPLICANT

SHALL SUBMIT THE PERMIT FEE AT THE TIME OF SUBMISSION OF

THE APPLICATION. THE FEE SHALL BE RETURNED IF THE

APPLICATION IS NOT GRANTED.

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(III) A RENEWAL FEE FOR THE PERMIT AS A DISPENSARY

IN THE AMOUNT OF $5,000. THE FEE SHALL BE RETURNED IF THE

RENEWAL IS NOT GRANTED AND SHALL COVER RENEWAL FOR ALL

LOCATIONS. 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.

(IV) A FEE OF $250 WHEN AMENDING THE APPLICATION TO

INDICATE RELOCATION WITHIN THIS COMMONWEALTH OR THE

ADDITION OR DELETION OF APPROVED ACTIVITIES BY THE

MEDICAL MARIJUANA ORGANIZATION.

(2) ALL FEES UNDER PARAGRAPH (1) SHALL BE PAID BY

CERTIFIED CHECK OR MONEY ORDER.

(3) FEES PAYABLE UNDER PARAGRAPH (1) SHALL BE DEPOSITED

INTO THE FUND.

(d) Regions.--

(1) An independent grower/processor may apply for a

dispensary permit under this section in any region

established under section 603(d).

(2) The department may limit the number of dispensary

permits issued under this section to each independent

grower/processor in accordance with the following :

(i) The department may limit the number of

dispensary permits issued under this section to one

dispensary permit per independent grower/processor for

any region established under section 603(d).

(ii) If a single independent grower/processor

applies for two dispensary permits in the same region

established under section 603(d) and the department

determines that issuing the dispensary permits to the

applicant would not be in the best interests of medical

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marijuana patients, the department shall notify the

applicant within seven days of the department's

determination and allow the applicant to submit a new

application for a different region without remittance of

an additional application review fee under subsection (c)

(1) (C)(1)(I) .

(iii) Nothing in this paragraph shall be construed

to modify the allowable dispensary permits for each

independent grower/processor under section 617.

(E) CERTIFICATION VIOLATION.--IF AN INDEPENDENT

GROWER/PROCESSOR ENTERS INTO A MERGER, ACQUISITION OR OTHER

CHANGE OF CONTROL TRANSACTION WITH ANOTHER ENTITY IN VIOLATION

OF SUBSECTION (A)(4), THE CONTRACT OR AGREEMENT EXECUTED WITH

THE OTHER ENTITY FOR THE MERGER, ACQUISITION OR OTHER CHANGE OF

CONTROL TRANSACTION SHALL BE VOID.

Section 619. Limitations on other additional permits or

licenses.

Notwithstanding the provisions of section 617 or 618, nothing

in section 617 or 618 shall be construed to limit an entity that

qualifies as an independent grower/processor from applying for

and receiving additional permits or licenses under any other

provisions of this act upon the release of additional permits or

licenses by the department or the Commonwealth.

SECTION 4. SECTION 2001 OF THE ACT IS AMENDED BY ADDING A

DEFINITION TO READ:

SECTION 2001. DEFINITIONS.

THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER

SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE

CONTEXT CLEARLY INDICATES OTHERWISE:

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"ACCREDITED MEDICAL SCHOOL." AN INSTITUTION LOCATED WITHIN

THIS COMMONWEALTH THAT IS ACCREDITED BY THE LIAISON COMMITTEE OF

MEDICAL EDUCATION OR THE COMMISSION ON OSTEOPATHIC COLLEGE

ACCREDITATION OR HAS GAINED PRE-ACCREDITATION OR PROVISIONAL

ACCREDITATION SO THAT THE INSTITUTION IS AUTHORIZED TO ENROLL

STUDENTS AND IS AFFILIATED WITH AN ACCREDITED INSTITUTION OF

HIGHER EDUCATION LOCATED WITHIN THIS COMMONWEALTH.

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Section 4 5. This act shall take effect in 60 120 days.

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