Regular Session 2023-2024 Senate Bill 0773 P.N. 1191

HOUSE AMENDED

PRIOR PRINTER'S NOS. 860, 1105

PRINTER'S NO. 1191

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 REPORTED FROM COMMITTEE ON HEALTH, HOUSE OF REPRESENTATIVES,

AS AMENDED, OCTOBER 30, 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; in medical

marijuana organizations, further providing for APPLICATION

AND ISSUANCE, FOR limitations on permits and providing for

additional dispensary AND GROWER/PROCESSOR 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:

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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:

* * *

"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.

* * *

"DIVERSE GROUP." THE TERM SHALL MEAN THE SAME AS UNDER

SECTION 615(D).

* * *

"INDEPENDENT DISPENSARY." A DISPENSARY ISSUED A PERMIT TO

OPERATE IN THIS COMMONWEALTH AND THAT MEETS ALL OF THE

FOLLOWING:

(1) HAS NOT HAD THE DISPENSARY'S PERMIT REVOKED.

(2) HAS NOT ENTERED INTO A CHANGE OF CONTROL TRANSACTION

WITH ANY OTHER PERSON.

(3) IS NOT MATERIALLY THE SAME AS A MEDICAL MARIJUANA

ORGANIZATION IN THIS COMMONWEALTH THROUGH A PARENT COMPANY,

SUBSIDIARY OR SHARED AFFILIATION WITH ANOTHER ENTITY THAT

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HOLDS A PERMIT FROM THE DEPARTMENT UNDER THIS ACT OR THROUGH

THE SHARING OF PRINCIPALS, OFFICERS OR DIRECTORS, EMPLOYEES,

FACILITIES, EQUIPMENT, FINANCES OR CAPITAL.

"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. CHANGE OF

CONTROL TRANSACTION WITH ANY OTHER PERSON.

(3) Is not otherwise associated with or materially the

same as another MATERIALLY THE SAME AS A 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

PRINCIPALS, officers or directors, employees, facilities,

equipment, finances or capital.

* * *

"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. MORE THAN 5%, INCLUDING SUBSIDIARIES.

(4) COMMON OWNERSHIP OF 5% OR LESS IF THE PERSONS WITH

VOTING RIGHTS TO ELECT OR APPOINT ONE OR MORE MEMBERS OF THE

BOARD OF DIRECTORS OR OTHER GOVERNING BOARD.

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(5) COMMON MANAGEMENT, POLICIES, PRINCIPALS, OFFICERS,

DIRECTORS, EMPLOYEES, EQUIPMENT, FINANCES OR CAPITAL.

* * *

"Parent company." A company which directly or indirectly

controls any other permittee under this act.

* * *

"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.

* * *

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

SECTION 2. SECTIONS 606(A)(1) AND 616(5) OF THE ACT ARE

AMENDED TO READ:

SECTION 606. APPLICATION AND ISSUANCE.

(A) DUTY TO REPORT.--AN APPLICANT TO BE A GROWER/PROCESSOR

OR TO OPERATE A DISPENSARY IS UNDER A CONTINUING DUTY TO:

(1) REPORT TO THE DEPARTMENT ANY CHANGE IN FACTS OR

CIRCUMSTANCES REFLECTED IN THE APPLICATION OR ANY NEWLY

DISCOVERED OR OCCURRING FACT OR CIRCUMSTANCE WHICH IS

REQUIRED TO BE INCLUDED IN THE APPLICATION, INCLUDING A

CHANGE IN CONTROL OR CHANGE OF CONTROL TRANSACTION OF THE

MEDICAL MARIJUANA ORGANIZATION.

* * *

Section 616. Limitations on permits.

The following limitations apply to approval of permits for

grower/processors and dispensaries:

* * *

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

than five grower/processors may be issued permits as

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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.]

* * *

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

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.

SECTION 617. ADDITIONAL DISPENSARY AND GROWER/PROCESSOR PERMITS

AUTHORIZED.

(A) AUTHORIZATION.--

(1) AN INDEPENDENT GROWER/PROCESSOR THAT APPLIES AND

MEETS THE REQUIREMENTS UNDER SECTION 618 SHALL BE ISSUED ONE

DISPENSARY PERMIT.

(2) AN INDEPENDENT DISPENSARY THAT APPLIES AND MEETS THE

REQUIREMENTS UNDER SECTION 618 SHALL BE ISSUED ONE

GROWER/PROCESSOR PERMIT.

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

under this section shall 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.

(d) (C) Suspension or revocation prohibited.--The department

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

REVOKE 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 ENTERING INTO A CHANGE OF CONTROL

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TRANSACTION WITH ANY PERSON AT LEAST TWO YEARS 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

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.

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(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

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

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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 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

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.

(D) PERMIT FOR CLINICAL REGISTRANT.--NOTWITHSTANDING

SUBSECTION (C) OR SECTION 619, AN INDEPENDENT GROWER/PROCESSOR

OR INDEPENDENT DISPENSARY THAT APPLIES FOR A PERMIT TO CONVERT

TO A CLINICAL REGISTRANT UNDER SECTION 2002 SHALL SURRENDER A

GROWER/PROCESSOR PERMIT OR DISPENSARY PERMIT, OR BOTH,

PREVIOUSLY ISSUED TO THE INDEPENDENT GROWER/PROCESSOR OR

INDEPENDENT DISPENSARY.

SECTION 618. APPLICATION AND ISSUANCE OF ADDITIONAL PERMITS.

(A) APPLICATIONS.--

(1) THE DEPARTMENT SHALL DEVELOP A STANDARD APPLICATION

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FORM AND OPEN APPLICATIONS FOR PERMITS AUTHORIZED UNDER

SECTION 617 WITHIN 30 DAYS OF THE EFFECTIVE DATE OF THIS

PARAGRAPH.

(2) APPLICANTS UNDER THIS SECTION SHALL, WITHIN 60 DAYS

AFTER APPLICATIONS ARE POSTED, SUBMIT APPLICATIONS FOR

PERMITS AUTHORIZED UNDER SECTION 617.

(3) THE DEPARTMENT SHALL REVIEW APPLICATIONS FOR PERMITS

AUTHORIZED UNDER SECTION 617 WITHIN 45 DAYS OF RECEIPT OF AN

APPLICATION UNDER PARAGRAPH (1) FROM AN ELIGIBLE INDEPENDENT

GROWER/PROCESSOR OR INDEPENDENT DISPENSARY.

(4) AN APPLICATION FOR A PERMIT AUTHORIZED UNDER SECTION

617 SHALL REQUIRE:

(I) SUPPORTING DOCUMENTATION AND CERTIFICATION TO

THE DEPARTMENT THAT THE APPLICANT QUALIFIES AS AN

INDEPENDENT GROWER/PROCESSOR OR INDEPENDENT DISPENSARY.

(II) CERTIFICATION TO THE DEPARTMENT THAT THE

APPLICANT WILL NOT ENTER INTO A CHANGE OF CONTROL

TRANSACTION WITH ANY OTHER PERSON FOR A DURATION OF TWO

YEARS FROM THE DATE THE FIRST DISPENSARY LOCATION OR

GROWER/PROCESSOR LOCATION IS DEEMED OPERATIONAL BY THE

DEPARTMENT, UNLESS THE CHANGE OF CONTROL TRANSACTION

OCCURS AT LEAST ONE YEAR AFTER THE HOLDER OF THE PERMIT

BECOMES OPERATIONAL AND IS BETWEEN THE APPLICANT AND A

DIVERSE GROUP.

(III) ANY INFORMATION REQUIRED UNDER SECTION 602

THAT HAS SIGNIFICANTLY CHANGED SINCE THE APPLICANT

RECEIVED AN INITIAL PERMIT.

(B) ISSUANCE.--

(1) EXCEPT AS PROVIDED UNDER PARAGRAPH (3), THE

DEPARTMENT SHALL ISSUE PERMITS UNDER SECTION 617 WITHIN 60

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DAYS OF THE APPLICATION SUBMISSION DEADLINE UNDER SUBSECTION

(A)(2) TO ALL APPLICANTS THAT MEET THE MINIMUM REQUIREMENTS

FOR PERMITTING UNDER THIS CHAPTER. THE DEPARTMENT SHALL

NOTIFY AN APPLICANT FOR PERMITS AUTHORIZED UNDER SECTION 617

OF THE APPROVAL OF AN APPLICATION BY CERTIFIED MAIL OR EMAIL.

(2) IF AN APPLICATION UNDER THIS SECTION IS INCOMPLETE,

THE FOLLOWING APPLY:

(I) THE DEPARTMENT SHALL, WITHIN 15 DAYS OF

REVIEWING THE APPLICATION, NOTIFY THE APPLICANT BY

CERTIFIED MAIL OR EMAIL OF THE MISSING APPLICATION

MATERIALS.

(II) AN APPLICANT SHALL HAVE 15 DAYS FROM WHEN THE

NOTICE IS RECEIVED UNDER THIS PARAGRAPH TO PROVIDE

MISSING MATERIALS TO THE DEPARTMENT.

(III) AN APPLICANT'S FAILURE TO COMPLETE THE

APPLICATION BY THE DEADLINE UNDER SUBPARAGRAPH (II) SHALL

BE GROUNDS FOR DENIAL OF A PERMIT.

(3) IF AN APPLICATION UNDER THIS SECTION IS COMPLETE BUT

DOES NOT MEET THE MINIMUM CRITERIA FOR A PERMIT, THE

DEPARTMENT SHALL NOTIFY THE APPLICANT BY CERTIFIED MAIL OR

EMAIL OF THE DEFICIENCIES IN THE APPLICATION AND THE

FOLLOWING APPLY:

(I) AN APPLICANT SHALL HAVE 30 DAYS FROM THE DATE

THE NOTICE IS RECEIVED UNDER THIS PARAGRAPH TO PROVIDE

SUPPLEMENTAL APPLICATION MATERIALS TO THE DEPARTMENT.

(II) AN APPLICANT'S FAILURE TO PROVIDE THE

SUPPLEMENTAL APPLICATION MATERIALS TO THE DEPARTMENT BY

THE DEADLINE WILL BE GROUNDS FOR DENIAL OF THE ISSUANCE

OF A PERMIT.

(III) AN APPLICANT'S FAILURE TO MEET THE MINIMUM

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CRITERIA FOR A PERMIT AFTER PROVIDING SUPPLEMENTAL

APPLICATION MATERIALS TO THE DEPARTMENT SHALL BE GROUNDS

FOR DENIAL OF THE ISSUANCE OF A PERMIT.

(IV) THE DEPARTMENT MAY USE UP TO 30 ADDITIONAL DAYS

TO ISSUE DISPENSARY PERMITS TO APPLICANTS THAT MEET THE

MINIMUM CRITERIA FOR A PERMIT AFTER PROVIDING

SUPPLEMENTAL APPLICATION MATERIALS TO THE DEPARTMENT.

(4) IF THE DEPARTMENT DENIES AN APPLICATION FOR A

DISPENSARY PERMIT AUTHORIZED UNDER SECTION 617, 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 MINIMUM

CRITERIA TO BE ISSUED A DISPENSARY PERMIT.

(5) IN THE EVENT AN INDEPENDENT GROWER/PROCESSOR OR

INDEPENDENT DISPENSARY HAS NOT APPLIED FOR A PERMIT

AUTHORIZED UNDER SECTION 617 OR HAS RECEIVED A DENIAL FOR A

PERMIT AUTHORIZED UNDER SECTION 617, THE DEPARTMENT SHALL

ACCEPT NEW APPLICATIONS DURING AN APPLICATION PROCESS

SCHEDULED ANNUALLY BY THE DEPARTMENT. THE ANNUAL APPLICATION

PROCESS SHALL FOLLOW THE TIME LINES ESTABLISHED UNDER THIS

ACT.

(6) APPEALS TO THE ISSUANCE OR DENIALS OF DISPENSARY

PERMITS UNDER THIS SECTION MUST BE RESPONDED TO BY THE

DEPARTMENT WITHIN 45 DAYS OF SUBMITTAL.

(7) AN INDEPENDENT GROWER/PROCESSOR OR INDEPENDENT

DISPENSARY ISSUED A PERMIT UNDER SECTION 617 SHALL NOTIFY THE

DEPARTMENT WHEN THE INDEPENDENT GROWER/PROCESSOR OR

INDEPENDENT DISPENSARY LOCATION IS OPERATIONAL.

(8) UPON NOTIFICATION UNDER PARAGRAPH (7), THE

DEPARTMENT SHALL SCHEDULE AN INSPECTION TO DETERMINE IF THE

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MEDICAL MARIJUANA ORGANIZATION FACILITY IS OPERATIONAL TO THE

SATISFACTION OF THE DEPARTMENT. NOTHING IN THIS SECTION SHALL

PROHIBIT THE DEPARTMENT FROM DETERMINING THAT THE INSPECTED

LOCATION FAILS TO BE OPERATIONAL.

(1) An independent grower/processor applying for A

DISPENSARY PERMIT SHALL PAY :

(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 DISPENSARY

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.

(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) AN INDEPENDENT DISPENSARY APPLYING FOR A

GROWER/PROCESSOR PERMIT SHALL PAY:

(I) AN INITIAL APPLICATION FEE IN THE AMOUNT OF

$10,000. THE FEE IS NONREFUNDABLE.

(II) A PERMIT FEE OF $200,000. THE PERIOD OF THE

PERMIT IS ONE YEAR. AN APPLICANT SHALL SUBMIT THE PERMIT

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FEE AT THE TIME OF SUBMISSION OF THE APPLICATION. THE FEE

SHALL BE RETURNED IF THE APPLICATION IS NOT GRANTED.

(III) A RENEWAL FEE FOR THE PERMIT AS A

GROWER/PROCESSOR IN THE AMOUNT OF $10,000. THE FEE SHALL

COVER THE RENEWAL FOR ALL LOCATIONS. THE RENEWAL FEE

SHALL BE RETURNED IF THE RENEWAL IS NOT GRANTED. AN

APPLICATION TO REVIEW 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) (3) All fees under paragraph (1) THIS SUBSECTION

shall be paid by certified check or money order.

(3) (4) Fees payable under paragraph (1) THIS SUBSECTION

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

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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

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 fee under subsection (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.

(D) REGIONS.--AN INDEPENDENT GROWER/PROCESSOR MAY APPLY FOR

A DISPENSARY PERMIT UNDER THIS SECTION IN ANY REGION ESTABLISHED

UNDER SECTION 603(D).

(e) Certification violation.--If an independent

grower/processor enters into a merger, acquisition or other OR

INDEPENDENT DISPENSARY ENTERS INTO A change of control

transaction with another entity in violation of subsection (a)

(4) THIS ACT , the contract or agreement executed with the other

entity for the merger, acquisition or other change of control

transaction shall be void. CHANGE OF CONTROL TRANSACTION SHALL

BE VOID, UNLESS THE CHANGE OF CONTROL TRANSACTION OCCURS AT

LEAST ONE YEAR AFTER THE PERMITTEE BECOMES OPERATIONAL AND THE

MERGER IS BETWEEN A PERMIT HOLDER AND A DIVERSE GROUP.

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 OR INDEPENDENT

DISPENSARY from applying for and receiving additional permits or

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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:

* * *

"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.

* * *

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

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