87R1282 GCB/CJC-D
	By: West	S.B. No. 269

	A BILL TO BE ENTITLED
	AN ACT
	relating to the regulation of the cultivation, manufacture,
	processing, distribution, sale, testing, transportation, delivery,
	transfer, possession, and use of cannabis and cannabis products and
	the allocation of tax revenue derived from cannabis and cannabis
	products; authorizing the imposition of fees; requiring an
	occupational license; creating a criminal offense.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  This Act may be cited as the Texas Regulation of
	Cannabis Act.
	SECTION 2.  Subtitle C, Title 6, Health and Safety Code, is
	amended by adding Chapter 491 to read as follows:
	CHAPTER 491. REGULATION OF CANNABIS
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 491.0001.  DEFINITIONS. In this chapter:
	(1)  "Adult" means an individual 21 years of age or
	older.
	(2)  "Cannabis" means the plant Cannabis sativa L.,
	whether growing or not, the seeds of that plant, and every compound,
	manufacture, salt, derivative, mixture, or preparation of that
	plant or its seeds. The term includes cannabis concentrate. The
	term does not include:
	(A)  the mature stalks of the plant or fiber
	produced from the stalks;
	(B)  oil or cake made from the seeds of the plant;
	(C)  a compound, manufacture, salt, derivative,
	mixture, or preparation of the mature stalks, fiber, oil, or cake;
	or
	(D)  the sterilized seeds of the plant that are
	incapable of beginning germination.
	(3)  "Cannabis concentrate" means the resin extracted
	from a part of the plant Cannabis sativa L. or a compound,
	manufacture, salt, derivative, mixture, or preparation of the
	resin.
	(4)  "Cannabis establishment" means an entity licensed
	by the department under this chapter to process and dispense
	cannabis and cannabis products to an adult.
	(5)  "Cannabis grower" means an entity licensed by the
	department to cultivate cannabis for sale and distribution to a
	cannabis establishment.
	(6)  "Cannabis product" means a product that contains
	cannabis and is intended for use or consumption by humans,
	including as an edible product or as a topical product, ointment,
	oil, or tincture. The term includes products that consist of
	cannabis and other ingredients.
	(7)  "Cannabis-related drug paraphernalia" means
	equipment, a product, or material that is used or intended for use
	in:
	(A)  planting, propagating, cultivating, growing,
	harvesting, manufacturing, compounding, converting, producing,
	processing, preparing, testing, analyzing, packaging, repackaging,
	storing, or containing cannabis or a cannabis product; or
	(B)  introducing cannabis or a cannabis product
	into the human body.
	(8)  "Cannabis secure transporter" means an entity
	licensed by the department under this chapter to transport cannabis
	from a cannabis grower to a cannabis establishment.
	(9)  "Cannabis testing facility" means an entity
	licensed by the department under this chapter to analyze the safety
	and potency of cannabis and cannabis products.
	(10)  "Commission" means the Texas Commission of
	Licensing and Regulation.
	(11)  "Cultivate" means to propagate, breed, grow,
	harvest, dry, cure, or separate parts of the cannabis plant by
	manual or mechanical means.
	(12)  "Department" means the Texas Department of
	Licensing and Regulation.
	(13)  "Executive director" means the executive
	director of the department.
	(14)  "Marihuana" has the meaning assigned by Section
	481.002.
	(15)  "Process" means to separate or otherwise prepare
	parts of the cannabis plant and to compound, blend, extract,
	infuse, or otherwise make or prepare cannabis concentrate or
	cannabis products.
	SUBCHAPTER B. PROTECTIONS FROM LEGAL ACTION RELATED TO CANNABIS
	Sec. 491.0051.  AUTHORIZED CONDUCT: PERSONAL USE OF
	CANNABIS.  An adult is authorized under this chapter to:
	(1)  use, possess, and transport not more than 2.5
	ounces of cannabis, except that not more than 15 grams of that
	amount may be in the form of cannabis concentrate;
	(2)  transfer without remuneration to another adult not
	more than 2.5 ounces of cannabis, except that not more than 15 grams
	of that amount may be in the form of cannabis concentrate and
	provided that the transfer is not advertised or promoted to the
	public;
	(3)  cultivate for personal use not more than 12
	cannabis plants in an area on the premises of the adult's private
	residence, provided that the cultivation occurs in an enclosed area
	that is:
	(A)  equipped with locks or other security devices
	that restrict access to the area; and
	(B)  not visible from a public place without the
	use of aircraft or optical aids;
	(4)  possess, store, or process on the premises of the
	adult's private residence not more than:
	(A)  the amount of cannabis produced from cannabis
	plants cultivated on the premises, provided that:
	(i)  not more than 12 cannabis plants are
	possessed, cultivated, or processed on the premises at one time;
	and
	(ii)  any amount of cannabis in excess of 2.5
	ounces is stored in a container or area equipped with locks or other
	security devices that restrict access to the contents of the
	container or area; and
	(B)  10 ounces of cannabis that were not produced
	from cannabis plants cultivated on the premises, provided that the
	amount in excess of 2.5 ounces is stored in a container or area
	described by Paragraph (A)(ii);
	(5)  use, possess, process, transport, or transfer to
	another adult without remuneration an amount of cannabis products
	specified by rule of the commission as the allowable amount of
	cannabis for purposes of this subdivision; and
	(6)  use, possess, transport, or transfer to another
	adult without remuneration cannabis-related drug paraphernalia.
	Sec. 491.0052.  AUTHORIZED CONDUCT: RETAIL CANNABIS
	OPERATIONS.  This chapter authorizes the conduct of:
	(1)  a cannabis grower director, manager, or employee
	who, acting within the scope of the grower's license:
	(A)  cultivates cannabis or produces cannabis
	products for sale or transfer to a cannabis establishment; and
	(B)  possesses cannabis or cannabis-related drug
	paraphernalia;
	(2)  a cannabis establishment director, manager, or
	employee who, acting within the scope of the establishment's
	license, possesses cannabis or cannabis products or transfers or
	sells cannabis, cannabis products, or cannabis-related drug
	paraphernalia to an adult;
	(3)  a cannabis secure transporter director, manager,
	or employee who, acting within the scope of the secure
	transporter's license, transports, transfers, or delivers cannabis
	or cannabis products from a cannabis grower to a cannabis
	establishment; and
	(4)  a cannabis testing facility director, manager, or
	employee who, acting within the scope of the facility's license,
	possesses or tests cannabis, cannabis products, or
	cannabis-related drug paraphernalia.
	Sec. 491.0053.  PROTECTION FROM LEGAL ACTION FOR AUTHORIZED
	CONDUCT. (a)  A person is not subject to arrest, prosecution,
	forfeiture of property, 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 solely due to conduct authorized under Section 491.0051
	or 491.0052.
	(b)  The fact that a person engages in conduct authorized by
	Section 491.0051 or 491.0052 does not in itself constitute grounds
	for denying, limiting, or restricting conservatorship or
	possession of or access to a child under Title 5, Family Code.
	Sec. 491.0054.  PROHIBITION OF CANNABIS ON PRIVATE PROPERTY;
	EXCEPTION.  (a)  Except as otherwise provided by Subsection (b), a
	person may prohibit or restrict the possession, consumption,
	cultivation, distribution, processing, sale, or display of
	cannabis or cannabis products on property the person owns,
	occupies, or manages.
	(b)  A person may not prohibit a residential tenant under a
	lease agreement from possessing cannabis, cannabis products, or
	cannabis-related drug paraphernalia or consuming cannabis by means
	other than smoking on the premises.
	Sec. 491.0055.  CONDUCT NOT AUTHORIZED UNDER THIS CHAPTER.
	This chapter does not authorize the following conduct:
	(1)  operating a motor vehicle while intoxicated or
	otherwise violating Chapter 49, Penal Code;
	(2)  smoking or otherwise consuming cannabis in:
	(A)  a motor vehicle while the vehicle is on a
	public road;
	(B)  an aircraft, while the aircraft is in flight
	or in a public area;
	(C)  a watercraft, while the watercraft is on a
	public waterway; or
	(D)  a public place, unless:
	(i)  the public place is an area designated
	by the applicable political subdivision as an area where using
	cannabis is permissible; and
	(ii)  the area described by Subparagraph (i)
	is not accessible to persons younger than 21 years of age;
	(3)  possessing or consuming cannabis or cannabis
	products or possessing cannabis-related drug paraphernalia:
	(A)  on the premises of a public or private
	child-care facility, prekindergarten, or primary or secondary
	school;
	(B)  on a school bus that serves a facility or
	school described by Paragraph (A); or
	(C)  on the premises of a correctional facility,
	as defined by Article 18A.251, Code of Criminal Procedure, or a
	civil commitment facility; or
	(4)  separating resin from the cannabis plant by butane
	extraction or another method that uses a substance with a
	flashpoint below 100 degrees Fahrenheit in a public place or motor
	vehicle or within the curtilage of a residential structure.
	SUBCHAPTER C. DUTIES OF DEPARTMENT
	Sec. 491.0101.  DUTIES OF DEPARTMENT. The department shall
	administer this chapter.
	Sec. 491.0102.  RULES; FEES.  (a)  The commission shall adopt
	all necessary rules for the administration and enforcement of this
	chapter, including rules imposing fees under this chapter in
	amounts sufficient to cover the cost of administering this chapter.
	(b)  The commission by rule shall set application and license
	fees under this chapter in amounts sufficient to administer this
	chapter and may annually adjust the fees for inflation.
	(c)  A fee collected under this chapter shall be deposited to
	the credit of the cannabis regulation account established under
	Section 491.0251.
	(d)  The commission shall adopt rules for the reasonable
	regulation of cannabis growers and cannabis establishments,
	including rules that:
	(1)  restrict the use of dangerous pesticides;
	(2)  regulate the packaging and labeling of cannabis
	products available at a cannabis establishment;
	(3)  restrict advertising and display of cannabis and
	cannabis products;
	(4)  restrict the maximum amount of
	tetrahydrocannabinol that may be contained in a cannabis product
	sold to a consumer;
	(5)  require recordkeeping and monitoring to track the
	transfer of cannabis and cannabis products between license holders;
	and
	(6)  require security measures, provided that the
	security measures do not restrict the cultivation of cannabis
	outdoors or in greenhouses.
	Sec. 491.0103.  TESTING, PACKAGING, AND LABELING STANDARDS.
	(a)  The commission by rule shall establish standards for:
	(1)  the operation of cannabis testing facilities;
	(2)  the testing of cannabis and cannabis products; and
	(3)  packaging and labeling requirements for cannabis
	and cannabis products.
	(b)  In establishing standards for packaging and labeling
	requirements under Subsection (a)(3), the commission shall require
	that:
	(1)  cannabis and cannabis products be packaged in
	opaque, resealable, child-resistant packaging that does not
	resemble and may not be easily confused with typical packaging for
	commercially sold candy;
	(2)  cannabis and cannabis products be clearly labeled;
	and
	(3)  the label for a cannabis product disclose the
	amount of cannabis contained in that product.
	Sec. 491.0104.  SECURE TRANSPORTATION OF CANNABIS. The
	commission by rule shall establish standards applicable to cannabis
	secure transporters, including standards to ensure all cannabis
	establishments are properly served.
	Sec. 491.0105.  CONFLICT OF INTEREST. (a)  A person who is
	involved in the implementation, administration, or enforcement of
	this chapter as a member of the commission, an employee of the
	department, or a consultant to the commission or the department may
	not also hold a pecuniary interest in any entity licensed by the
	department under this chapter.
	(b)  A person who holds a pecuniary interest in a cannabis
	testing facility or a cannabis secure transporter who holds a
	license issued under this chapter may not hold a pecuniary interest
	in any entity that holds a cannabis establishment or cannabis
	grower license issued under this chapter.
	(c)  A person may not hold a pecuniary interest in more than
	five entities that are licensed under this chapter as a cannabis
	grower, except as provided by department rule.
	Sec. 491.0106.  ANNUAL REPORT. The executive director shall
	annually submit to the governor a report providing the following
	information regarding licensing and regulation under this chapter:
	(1)  the number of applications received for each class
	of license under this chapter;
	(2)  the number of licenses issued for each class of
	license under this chapter;
	(3)  demographic information pertaining to license
	holders;
	(4)  a description of any fines imposed on a license
	holder or disciplinary actions taken against a license holder by
	the department; and
	(5)  a statement of revenues and expenses of the
	department related to the implementation, administration, and
	enforcement of this chapter.
	SUBCHAPTER D. LICENSING
	Sec. 491.0151.  LICENSE REQUIRED. A person must hold a
	license issued by the department under this chapter to operate as a
	cannabis grower, cannabis establishment, cannabis secure
	transporter, or cannabis testing facility.
	Sec. 491.0152.  QUALIFICATIONS FOR LICENSURE. The
	commission by rule shall provide for each class of license issued
	under this chapter qualifications for licensure that are
	demonstrably related to the operations authorized and duties
	imposed under that class of license.
	Sec. 491.0153.  APPLICATION. (a)  A person may apply for an
	initial or renewal license under this chapter by submitting a form
	prescribed by the department along with the application fee in an
	amount set by the commission.
	(b)  The application must indicate the class of license
	sought and include the name and address of the applicant, the name
	and address of each of the applicant's directors, managers, and
	employees, and any other information considered necessary by the
	department to determine the applicant's eligibility for the
	license.
	Sec. 491.0154.  ISSUANCE, RENEWAL, OR DENIAL OF LICENSE.
	(a)  The department shall issue or renew a license under this
	chapter only if:
	(1)  the department determines the applicant meets the
	qualifications for the class of license sought established under
	Section 491.0152; and
	(2)  the applicant is in compliance with any applicable
	local regulations.
	(b)  If the department denies the issuance or renewal of a
	license under Subsection (a), the department shall give written
	notice of the grounds for denial to the applicant.
	(c)  A license issued or renewed under this section expires
	as determined by the department in accordance with Section 411.511,
	Government Code.
	Sec. 491.0155.  DUTY TO MAINTAIN QUALIFICATIONS. A license
	holder shall maintain compliance at all times with the
	qualifications for the applicable class of license established
	under Section 491.0152.
	Sec. 491.0156.  LICENSE SUSPENSION OR REVOCATION. (a)  The
	department may at any time suspend or revoke a license issued under
	this chapter if the department determines that the license holder
	has not maintained the qualifications established under Section
	491.0152 or has failed to comply with a duty imposed under this
	chapter.
	(b)  The department shall give written notice to a license
	holder of a license suspension or revocation under this section and
	the grounds for the suspension or revocation. The notice must be
	sent by certified mail, return receipt requested.
	(c)  After suspending or revoking a license issued under this
	chapter, the department shall notify the Department of Public
	Safety. The public safety director of the Department of Public
	Safety may seize or place under seal all cannabis, cannabis
	products, and cannabis-related drug paraphernalia owned or
	possessed by the license holder. If the license is revoked, a
	disposition may not be made of the seized or sealed cannabis,
	cannabis products, or drug paraphernalia until the time for
	administrative appeal of the order has elapsed or until all appeals
	have been concluded. When a revocation order becomes final, all
	cannabis, cannabis products, and drug paraphernalia may be
	forfeited to the state as provided under Subchapter E, Chapter 481.
	(d)  Chapter 2001, Government Code, applies to a proceeding
	under this section.
	Sec. 491.0157.  CRIMINAL HISTORY BACKGROUND CHECK. (a)  In
	addition to satisfying the other requirements provided by
	commission rule under this chapter, an applicant for a license
	under this chapter must submit to the department a complete and
	legible set of fingerprints, on a form prescribed by the
	commission, for the purpose of obtaining criminal history record
	information from the Department of Public Safety and the Federal
	Bureau of Investigation.
	(b)  The department may deny a license to an applicant who
	does not comply with the requirement of Subsection (a). Issuance of
	a license by the department is conditioned on the department
	obtaining the applicant's criminal history record information
	under this section.
	(c)  The commission by rule shall establish criteria for
	determining whether a person passes the criminal history background
	check for purposes of this section. The rules adopted under this
	section may not disqualify a person for licensure solely for a
	conviction of an offense that involves the possession of marihuana
	or the delivery of marihuana to a person 18 years of age or older.
	SUBCHAPTER E. DUTIES OF LICENSE HOLDERS
	Sec. 491.0201.  DUTIES RELATING TO DISPENSING CANNABIS OR
	CANNABIS PRODUCTS. Before dispensing cannabis or cannabis products
	to an adult, a cannabis establishment must make reasonable efforts
	to verify that:
	(1)  the person receiving the cannabis or cannabis
	product is an adult;
	(2)  the cannabis or cannabis product complies with
	department testing and labeling rules; and
	(3)  the amount dispensed is not greater than the
	amount of cannabis or cannabis product allowed for personal use as
	provided by Section 491.0051.
	Sec. 491.0202.  DUTIES RELATING TO SECURITY. (a)  A license
	holder shall ensure that the cultivation, processing, sale, or
	display of cannabis, cannabis products, and cannabis-related drug
	paraphernalia is not visible from a public place without the use of
	optical aids or aircraft.
	(b)  A license holder may not cultivate, process, store, or
	sell cannabis, cannabis products, or cannabis-related drug
	paraphernalia at a location other than the physical address
	approved by the department for the establishment under the license
	issued to the establishment under this chapter.
	(c)  A license holder shall adopt reasonable security
	measures necessary to restrict access to areas where cannabis,
	cannabis products, or cannabis-related drug paraphernalia are
	stored and to prevent theft of cannabis, cannabis products, and
	cannabis-related drug paraphernalia.
	Sec. 491.0203.  LICENSE HOLDER OPERATIONS. (a)  A license
	holder may not employ or otherwise accept the services of a person
	younger than 21 years of age.
	(b)  A cannabis establishment may not sell tobacco products,
	as defined by Section 155.001, Tax Code.
	Sec. 491.0204.  MONTHLY SALES REPORT. A cannabis
	establishment shall monthly submit a report to the comptroller
	specifying the amount of cannabis sold, the number of cannabis
	products sold, the number and types of cannabis-related drug
	paraphernalia sold, and the amount of money collected in sales by
	the establishment during the preceding month.
	SUBCHAPTER F. FUNDING FOR REGULATION, TESTING, AND QUALITY CONTROL
	Sec. 491.0251.  CANNABIS REGULATION ACCOUNT. (a) The
	cannabis regulation account is an account in the general revenue
	fund administered by the department.
	(b)  The account consists of:
	(1)  money deposited to the credit of the account under
	Section 151.801, Tax Code; and
	(2)  fees deposited to the credit of the account under
	Section 491.0102.
	(c)  Money in the account may be appropriated only to the
	department for implementing and administering this chapter.
	Sec. 491.0252.  CANNABIS TESTING AND QUALITY CONTROL
	ACCOUNT. (a) The cannabis testing and quality control account is
	an account in the general revenue fund administered by the
	Department of Public Safety.
	(b)  The account consists of money deposited to the credit of
	the account under Section 151.801, Tax Code.
	(c)  Money in the account may be appropriated only to the
	Department of Public Safety for monitoring compliance with testing
	and quality control requirements imposed on license holders by this
	chapter or by commission rules adopted under this chapter.
	SUBCHAPTER G. LOCAL REGULATION
	Sec. 491.0301.  PROHIBITED LOCAL REGULATION. A political
	subdivision of this state may not enact, adopt, or enforce a rule,
	ordinance, order, resolution, or other regulation that prohibits or
	unreasonably restricts the cultivation, production, processing,
	dispensing, transportation, or possession of cannabis or cannabis
	products or the operation of a cannabis grower, cannabis
	establishment, cannabis secure transporter, or cannabis testing
	facility as authorized by this chapter.
	Sec. 491.0302.  PERMISSIBLE LOCAL REGULATION. A political
	subdivision may adopt regulations consistent with this chapter
	governing the hours of operation, location, manner of conducting
	business, and number of cannabis growers, cannabis establishments,
	or cannabis testing facilities.
	SUBCHAPTER H. SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS PRODUCT
	TO MINORS PROHIBITED
	Sec. 491.0351.  DEFINITION. In this subchapter, "minor"
	means a person younger than 21 years of age.
	Sec. 491.0352.  SALE OR DISTRIBUTION OF CANNABIS OR CANNABIS
	PRODUCT TO MINORS PROHIBITED; PROOF OF AGE REQUIRED.  (a)  A person
	commits an offense if the person, under the authority of this
	chapter:
	(1)  sells, gives, or causes to be sold or given
	cannabis or cannabis products to a minor; or
	(2)  sells, gives, or causes to be sold or given
	cannabis or cannabis products to another person who intends to
	deliver the cannabis or cannabis products to a minor.
	(b)  If an offense under this section occurs in connection
	with a sale by an employee of the owner of a cannabis establishment,
	the employee is criminally responsible for the offense and is
	subject to prosecution.
	(c)  An offense under this section is a Class C misdemeanor.
	(d)  It is a defense to prosecution under Subsection (a)(1)
	that the person to whom the cannabis or cannabis products were sold
	or given presented to the defendant apparently valid proof of
	identification.
	(e)  A proof of identification satisfies the requirements of
	Subsection (d) if it contains a physical description and photograph
	consistent with the person's appearance, purports to establish that
	the person is 21 years of age or older, and was issued by a
	governmental agency. The proof of identification may include a
	driver's license issued by this state or another state, a passport,
	or an identification card issued by a state or the federal
	government.
	SECTION 3.  Section 122.103(c), Agriculture Code, is amended
	to read as follows:
	(c)  A qualified applicant who along with the application
	submits proof to the department that the applicant holds a license
	under Chapter 487 or 491, Health and Safety Code, is not required to
	pay an application fee, and the department shall issue the license
	to the applicant within the time prescribed by Subsection (b).
	SECTION 4.  Subchapter F, Chapter 48, Education Code, is
	amended by adding Section 48.280 to read as follows:
	Sec. 48.280.  PUBLIC SCHOOL TEACHER SALARY SUPPORT ACCOUNT.
	(a) The public school teacher salary support account is an account
	in the general revenue fund administered by the agency.
	(b)  The account consists of money deposited to the account
	under Section 151.801, Tax Code.
	(c)  Money in the account may be appropriated only to the
	agency for the purpose of increasing public school teacher
	compensation.
	SECTION 5.  Section 411.0891(a), Government Code, is amended
	to read as follows:
	(a)  Subject to Section 411.087, the department is
	authorized to obtain and use criminal history record information
	maintained by the Federal Bureau of Investigation or the department
	that relates to a person who:
	(1)  is an applicant for or holds a registration issued
	by the director under Subchapter C, Chapter 481, Health and Safety
	Code, that authorizes the person to manufacture, distribute,
	analyze, or conduct research with a controlled substance;
	(2)  is an applicant for or holds a registration issued
	by the department under Chapter 487, Health and Safety Code, to be a
	director, manager, or employee of a dispensing organization, as
	defined by Section 487.001, Health and Safety Code;
	(2-a) is an applicant for or holds a license issued by
	the department under Chapter 491, Health and Safety Code, to be a
	cannabis grower, cannabis establishment, cannabis secure
	transporter, or cannabis testing facility, as defined by Section
	491.0001, Health and Safety Code;
	(3)  is an applicant for or holds an authorization
	issued by the department under Section 521.2476, Transportation
	Code, to do business in this state as a vendor of ignition interlock
	devices;
	(4)  is an applicant for or holds certification by the
	department as an inspection station or an inspector under
	Subchapter G, Chapter 548, Transportation Code, holds an inspection
	station or inspector certificate issued under that subchapter, or
	is the owner of an inspection station operating under that chapter;
	or
	(5)  is an applicant for or holds a certificate of
	registration issued by the department under Chapter 1956,
	Occupations Code, to act as a metal recycling entity.
	SECTION 6.  Section 411.502, Government Code, is amended to
	read as follows:
	Sec. 411.502.  APPLICABILITY. This subchapter applies to a
	program, and persons regulated under the program, administered by
	the department under the following laws, including rules adopted
	under those laws:
	(1)  Section 411.0625;
	(2)  Chapter 487, Health and Safety Code;
	(2-a) Chapter 491, Health and Safety Code;
	(3)  Chapter 1702, Occupations Code;
	(4)  Chapter 1956, Occupations Code;
	(5)  Section 521.2476, Transportation Code; and
	(6)  Subchapter G, Chapter 548, Transportation Code.
	SECTION 7.  Section 443.202(a), Health and Safety Code, is
	amended to read as follows:
	(a)  This section does not apply to low-THC cannabis
	regulated under Chapter 487 or cannabis regulated under Chapter
	491.
	SECTION 8.  Section 443.2025(a), Health and Safety Code, is
	amended to read as follows:
	(a)  This section does not apply to low-THC cannabis
	regulated under Chapter 487 or cannabis regulated under Chapter
	491.
	SECTION 9.  Section 481.062, Health and Safety Code, is
	amended to read as follows:
	Sec. 481.062.  EXEMPTIONS. (a)  The following persons are
	not required to register and may possess a controlled substance
	under this chapter [without registering with the Federal Drug
	Enforcement Administration]:
	(1)  an agent or employee of a registered manufacturer,
	distributor, analyzer, or dispenser of the controlled substance
	[who is registered with the Federal Drug Enforcement Administration
	and] acting in the usual course of business or employment;
	(2)  a common or contract carrier, a warehouseman, or
	an employee of a carrier or warehouseman whose possession of the
	controlled substance is in the usual course of business or
	employment;
	(3)  an ultimate user or a person in possession of the
	controlled substance under a lawful order of a practitioner or in
	lawful possession of the controlled substance if it is listed in
	Schedule V;
	(4)  an officer or employee of this state, another
	state, a political subdivision of this state or another state, or
	the United States who is lawfully engaged in the enforcement of a
	law relating to a controlled substance or drug or to a customs law
	and authorized to possess the controlled substance in the discharge
	of the person's official duties;
	(5)  if the substance is tetrahydrocannabinol or one of
	its derivatives:
	(A)  a Department of State Health Services
	official, a medical school researcher, or a research program
	participant possessing the substance as authorized under
	Subchapter G; or
	(B)  a practitioner or an ultimate user possessing
	the substance as a participant in a federally approved therapeutic
	research program that the commissioner has reviewed and found, in
	writing, to contain a medically responsible research protocol; [or]
	(6)  a dispensing organization licensed under Chapter
	487 that possesses low-THC cannabis;
	(7)  a cannabis grower, cannabis establishment,
	cannabis secure transporter, or cannabis testing facility licensed
	under Chapter 491 that possesses cannabis or cannabis products; or
	(8)  a person who possesses cannabis or cannabis
	products in accordance with Chapter 491.
	(b)  In this section, "cannabis" and "cannabis product" have
	the meanings assigned to those terms by Section 491.0001.
	SECTION 10.  Section 481.111, Health and Safety Code, is
	amended by adding Subsections (g) and (h) to read as follows:
	(g)  Sections 481.120, 481.121, and 481.125 do not apply to a
	person who engages in the acquisition, possession, production,
	processing, cultivation, delivery, transportation, disposal,
	transfer, or use of a raw material used in or by-product created by
	the production or cultivation of cannabis or cannabis products if
	the conduct is expressly authorized by Subchapter B, Chapter 491.
	(h)  For purposes of Subsection (g), "cannabis" and
	"cannabis product" have the meanings assigned to those terms by
	Section 491.0001.
	SECTION 11.  Section 551.004, Occupations Code, is amended
	by amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  This subtitle does not apply to:
	(1)  a practitioner licensed by the appropriate state
	board who supplies a patient of the practitioner with a drug in a
	manner authorized by state or federal law and who does not operate a
	pharmacy for the retailing of prescription drugs;
	(2)  a member of the faculty of a college of pharmacy
	recognized by the board who is a pharmacist and who performs the
	pharmacist's services only for the benefit of the college;
	(3)  a person who procures prescription drugs for
	lawful research, teaching, or testing and not for resale;
	(4)  a home and community support services agency that
	possesses a dangerous drug as authorized by Section 142.0061,
	142.0062, or 142.0063, Health and Safety Code; [or]
	(5)  a dispensing organization[, as defined by Section
	487.001, Health and Safety Code,] that cultivates, processes, and
	dispenses low-THC cannabis, as authorized by Chapter 487, Health
	and Safety Code, to a patient listed in the compassionate-use
	registry established under that chapter;
	(6)  a cannabis grower, cannabis establishment,
	cannabis secure transporter, or cannabis testing facility licensed
	under Chapter 491, Health and Safety Code, that cultivates,
	manufactures, processes, distributes, delivers sells, tests,
	transports, or dispenses cannabis or a cannabis product as
	authorized by that chapter; or
	(7)  a person who transfers cannabis without
	remuneration as authorized by Section 491.0051, Health and Safety
	Code.
	(a-1)  For purposes of this section:
	(1)  "Cannabis," "cannabis establishment," "cannabis
	grower," "cannabis product," "cannabis secure transporter," and
	"cannabis testing facility" have the meanings assigned by Section
	491.0001, Health and Safety Code.
	(2)  "Dispensing organization" and "low-THC cannabis"
	have the meanings assigned by Section 487.001, Health and Safety
	Code.
	SECTION 12.  Section 151.801, Tax Code, is amended by
	amending Subsection (a) and adding Subsection (c-5) to read as
	follows:
	(a)  Except as otherwise provided by this section [for the
	amounts allocated under Subsections (b), (c), (c-2), and (c-3)],
	all proceeds from the collection of the taxes imposed by this
	chapter shall be deposited to the credit of the general revenue
	fund.
	(c-5)  The proceeds from the collection of the taxes imposed
	by this chapter on the sale, storage, use, or other consumption of
	cannabis and cannabis products shall be deposited as follows:
	(1)  33 percent to the credit of the cannabis
	regulation account under Section 491.0251, Health and Safety Code;
	(2)  33 percent to the credit of the cannabis testing
	and quality control account under Section 491.0252, Health and
	Safety Code; and
	(3)  the remainder to the credit of the public school
	teacher salary support account under Section 48.280, Education
	Code.
	SECTION 13.  Section 151.801(d), Tax Code, as effective
	September 1, 2021, is amended to read as follows:
	(d)  The comptroller shall determine the amount to be
	deposited to the state highway fund under Subsection (b) according
	to available statistical data indicating the estimated average or
	actual consumption or sales of lubricants used to propel motor
	vehicles over the public roadways. The comptroller shall determine
	the amounts to be deposited to the accounts under Subsection (c)
	according to available statistical data indicating the estimated or
	actual total receipts in this state from taxable sales of sporting
	goods, and according to the specific amounts provided in the
	General Appropriations Act in accordance with Subsection (c-1).
	The comptroller shall determine the amount to be deposited to the
	fund under Subsection (c-2) according to available statistical data
	indicating the estimated or actual total receipts in this state
	from taxes imposed on sales at retail of fireworks. The comptroller
	shall determine the amount to be deposited to the account under
	Subsection (c-3) according to available statistical data
	indicating the estimated or actual total receipts in this state
	from taxable sales of horse feed, horse supplements, horse tack,
	horse bedding and grooming supplies, and other taxable expenditures
	directly related to horse ownership, riding, or boarding. The
	comptroller shall determine the amounts to be deposited to the
	accounts under Subsection (c-5) according to available statistical
	data indicating the estimated or actual total receipts in this
	state from taxable sales of cannabis and cannabis products. If
	satisfactory data are not available, the comptroller may require
	taxpayers who make taxable sales or uses of those lubricants, of
	sporting goods, of fireworks, [or] of horse feed, horse
	supplements, horse tack, horse bedding and grooming supplies, or
	other taxable expenditures directly related to horse ownership,
	riding, or boarding, or of cannabis and cannabis products to report
	to the comptroller as necessary to make the allocation required by
	Subsection (b), (c), (c-2), [or] (c-3), or (c-5).
	SECTION 14.  Section 151.801(e), Tax Code, is amended by
	adding Subdivision (6) to read as follows:
	(6)  "Cannabis" and "cannabis product" have the
	meanings assigned by Section 491.0001, Health and Safety Code.
	SECTION 15.  (a) Not later than July 1, 2022, the Texas
	Commission of Licensing and Regulation shall adopt rules as
	required to implement, administer, and enforce Chapter 491, Health
	and Safety Code, as added by this Act.
	(b)  Not later than November 1, 2022, the Texas Department of
	Licensing and Regulation shall begin licensing cannabis growers,
	cannabis establishments, cannabis secure transporters, and
	cannabis testing facilities in accordance with Chapter 491, Health
	and Safety Code, as added by this Act, provided that the applicants
	for a license have met all requirements for approval under Chapter
	491, Health and Safety Code, as added by this Act.
	SECTION 16.  The changes in law made by this Act do not
	affect tax liability accruing before the effective date of this
	Act. That liability continues in effect as if this Act had not been
	enacted, and the former law is continued in effect for the
	collection of taxes due and for civil and criminal enforcement of
	the liability for those taxes.
	SECTION 17.  This Act takes effect September 1, 2021.