Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                          HB 229.1
                                                 HOUSE BILL NO. 229
                                     INTRODUCED BY M. HOPKINS, C. FRIEDEL
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  A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING MARIJUANA LAWS; ALLOWING FOR A
  PROBATIONARY LICENSE FOR TESTING LABORATORIES; RESTRICTING THE TRANSPORTATION OF
  LABORATORY SAMPLES TO TESTING LABORATORIES; ALLOWING FOR A VARIANCE IN THE
  MEASUREMENT OF A SINGLE-SERVE EDIBLE MARIJUANA PRODUCT; AND AMENDING SECTIONS 16-
  12-104, 16-12-206, AND 16-12-224, MCA.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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          Section 1. Section 16-12-104, MCA, is amended to read:
          "16-12-104. Department responsibilities -- licensure. (1) The department shall establish and
  maintain a registry of persons who receive licenses under this chapter.
          (2)      (a) The department shall issue the following license types to persons who submit applications
  meeting the requirements of this chapter:
          (i)      cultivator license;
          (ii)     manufacturer license;
          (iii)    adult-use dispensary license or a medical marijuana dispensary license;
          (iv)     testing laboratory license.
          (v)      marijuana transporter license.
          (vi)     combined-use marijuana license.
          (b)      The department may establish other license types, subtypes, endorsements, and restrictions it
  considers necessary for the efficient administration of this chapter.
          (3)      A licensee may not cultivate hemp or engage in hemp manufacturing at a licensed premises.
          (4)      A person licensed to cultivate or manufacture marijuana or marijuana products is subject to the
  provisions contained in the Montana Pesticides Act provided for in Title 80, chapter 8.
          (5)      The department shall assess applications for licensure or renewal to determine if an applicant,
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68th Legislature 2023                                                                                              HB 229.1
  controlling beneficial owner, or a person with a financial interest in the applicant meets any of the criteria
  established in this chapter for denial of a license.
          (6)      A license issued pursuant to this chapter must be displayed by the licensee as provided for in
  rule by the department.
          (7)      (a) The Except as provided in subsection (8), the department shall review the information
  contained in an application or renewal submitted pursuant to this chapter and shall approve or deny an
  application:
          (i)      within 60 days of receiving the application or renewal and all related application materials from
  a former medical marijuana licensee or an existing licensee under this chapter; and
          (ii)     within 120 days of receiving the application and all related application materials from a new
  applicant.
          (b)      If the department fails to act on a completed application within the time allowed under
  subsection (7)(a), the department shall:
          (i)      reduce the cost of the licensing fee for a new applicant for licensure or endorsement or for a
  licensee seeking renewal of a license by 5% each week that the application is pending; and
          (ii)     allow a licensee to continue operation until the department takes final action.
          (c)      The department may not take final action on an application for a license or renewal of a license
  until the department has completed a satisfactory inspection as required by this chapter and related
  administrative rules.
          (d)      The department shall issue a license or endorsement within 5 days of approving an application
  or renewal.
          (8)      (a) The department may issue a probationary license under subsection (2)(a)(iv) only if:
          (i)      an applicant has completed the International Organization for Standardization accreditor initial
  assessment; and
          (ii)     there are no pending corrective actions to obtain International Organization for Standardization
  accreditation.
          (b)      A probationary license is valid for 90 days from the date of issue and is not eligible for renewal.
          (8)(9)   (a) Review of a rejection of an application or renewal may be conducted as a contested case
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68th Legislature 2023                                                                                              HB 229.1
  hearing before the department's office of dispute resolution pursuant to the provisions of the Montana
  Administrative Procedure Act.
          (b)      A person may appeal any decision of the department of revenue concerning the issuance,
  rejection, suspension, or revocation of a license provided for by this chapter to the district court in the county in
  which the person operates or proposes to operate. If a person operates or seeks to operate in more than one
  county, the person may seek judicial review in the district court with jurisdiction over actions arising in any of the
  counties where it operates or seeks to operate.
          (c)      An appeal pursuant to subsection (8)(b) (9)(b) must be made by filing a complaint setting forth
  the grounds for relief and the nature of relief demanded with the district court within 30 days following receipt of
  notice of the department's final decision.
          (9)(10) Licenses issued under this chapter must be renewed annually.
          (10)(11) (a) The department shall provide the names and phone numbers of persons licensed under
  this chapter and the city, town, or county where licensed premises are located to the public on the department's
  website. Except as provided in subsection (10)(b) (11)(b), the department may not disclose the physical
  location or address of a marijuana business.
          (b)      The department may share the physical location or address of a marijuana business with
  another state agency, political subdivision, and the state fire marshal.
          (11)(12) The department may not prohibit a cultivator, manufacturer, or adult-use dispensary licensee
  operating in compliance with the requirements of this chapter from operating at a shared location with a medical
  marijuana dispensary.
          (12)(13) The department may not adopt rules requiring a consumer to provide a licensee with
  identifying information other than government-issued identification to determine the consumer's age. A licensee
  that scans a person's driver's license using an electronic reader to determine the person's age:
          (a)      may only use data or metadata from the scan determine the person's age;
          (b)      may not transfer or sell that data or metadata to another party; and
          (c)      shall permanently delete any data or metadata from the scan within 180 days, unless otherwise
  provided for in this chapter or by the department.
          (13)(14) (a) Except as provided in subsection (13)(b) (14)(b), licenses issued by the department under
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68th Legislature 2023                                                                                             HB 229.1
  this chapter are nontransferable.
          (b)      A licensee may sell its marijuana business, including live plants, inventory, and material assets,
  to a person who is licensed by the department under the provisions of this chapter. The department may, in its
  discretion, issue a temporary license to the acquiring party to facilitate the transfer of the licensee's marijuana
  business.
          (14)(15) A person who is not a controlling beneficial owner in a licensee may not receive or otherwise
  obtain an ownership interest in a licensee that results in the person becoming a controlling beneficial owner
  unless the licensee notifies, in writing, the department of the proposed transaction and the department
  determines that the person qualifies for ownership under the provisions of this chapter."
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          Section 2. Section 16-12-206, MCA, is amended to read:
          "16-12-206. Testing laboratories -- licensing inspections. (1) A testing laboratory may:
          (a)      measure the tetrahydrocannabinol, tetrahydrocannabinolic acid, cannabidiol, and cannabidiolic
  acid content of marijuana and marijuana products; and
          (b)      test marijuana and marijuana products for pesticides, solvents, moisture levels, mold, mildew,
  and other contaminants. A testing laboratory may transport samples to be tested.
          (2)      A licensed testing laboratory shall employ a scientific director who is responsible for ensuring
  the achievement and maintenance of quality standards of practice. A scientific director must have the following
  minimum qualifications:
          (a)      a doctorate in chemical or biological sciences from a college or university accredited by a
  national or regional certifying authority and a minimum of 2 years of postdegree laboratory experience; or
          (b)      a master's degree in chemical or biological sciences from a college or university accredited by
  a national or regional certifying authority and a minimum of 4 years of postdegree laboratory experience.
          (3)      All owners and employees of a testing laboratory shall submit fingerprints to the department to
  facilitate a fingerprint and background check as set forth in 16-12-129. A testing laboratory may not be owned,
  operated, or staffed by a person who has been convicted of a felony offense.
          (4)      To qualify for licensure, a testing laboratory shall demonstrate that:
          (a)      staff members are proficient in operation of the laboratory equipment; and
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68th Legislature 2023                                                                                              HB 229.1
           (b)     the laboratory:
           (i)     maintains the equipment and instrumentation required by rule;
           (ii)    has all equipment and instrumentation necessary to certify results that meet the quality
  assurance testing requirements established by rule, including the ability to certify results at the required level of
  sensitivity;
           (iii)   meets insurance and bonding requirements established by rule;
           (iv)    has the capacity and ability to serve rural areas of the state; and
           (v)     has passed a proficiency program approved by the state laboratory that demonstrates it is able
  to meet all testing requirements.
           (5)     Except as provided in 16-12-209, a testing laboratory shall conduct tests of:
           (a)     samples of marijuana and marijuana products submitted by cultivators and manufacturers
  pursuant to 16-12-209 and related administrative rules prior to sale of the marijuana or marijuana products;
           (b)     samples of marijuana or marijuana products collected by the department during inspections of
  licensed premises; and
           (c)     samples submitted by consumers or registered cardholders.
           (6)     All samples submitted under subsections (5)(a) and (5)(b) must be collected by an employee of
  the testing lab. A testing lab may not use a third-party marijuana transporter for samples submitted under
  subsections (5)(a) and (5)(b)."
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           Section 3. Section 16-12-224, MCA, is amended to read:
           "16-12-224. Licensing of dispensaries. (1) Except as provided in 16-12-201(2), an applicant for a
  dispensary license shall demonstrate that the local government approval provisions in 16-12-301 have been
  satisfied in the jurisdiction where each proposed dispensary is located if the proposed dispensary would be
  located in a county in which the majority of voters voted against approval of Initiative Measure No. 190 in the
  November 3, 2020, general election.
           (2)     When evaluating an initial or renewal application, the department shall evaluate each proposed
  dispensary for compliance with the provisions of 16-12-207 and 16-12-210.
           (3)     An adult-use dispensary licensee may operate at a shared location with a medical marijuana
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68th Legislature 2023                                                                                           HB 229.1
  dispensary if the adult-use dispensary and medical marijuana dispensary are owned by the same person.
           (4)     A medical marijuana dispensary is authorized to sell exclusively to registered cardholders
  marijuana, marijuana products, and live marijuana plants.
           (5)     An adult-use dispensary is authorized to sell marijuana, marijuana products, and live marijuana
  plants to consumers or registered cardholders.
           (6)     The department shall charge a dispensary license fee for an initial application and at each
  renewal. The dispensary license fee is $5,000 for each location that a licensee operates as an adult-use
  dispensary or a medical marijuana dispensary.
           (7)     The department may adopt rules:
           (a)     for inspection of proposed dispensaries;
           (b)     for investigating owners or applicants for a determination of financial interest; and
           (c)     establishing or limiting the THC content of the marijuana or marijuana products that may be
  sold at an adult-use dispensary or medical marijuana dispensary.
           (8)     (a) Marijuana and marijuana products sold at a dispensary are regulated and sold on the basis
  of the concentration of THC in the products and not by weight.
           (b)     Except as provided in subsection (8)(c) (8)(d), for purposes of this chapter, a single package is
  limited to:
           (i)     for marijuana sold as flower, 1 ounce of usable marijuana. The total potential psychoactive
  THC of marijuana flower may not exceed 35%.
           (ii)    for a marijuana product sold as a capsule, no more than 100 milligrams of THC per capsule
  and no more than 800 milligrams of THC per package.
           (iii)   for a marijuana product sold as a tincture, no more than 800 milligrams of THC;
           (iv)    for a marijuana product sold as an edible or a food product, no more than 100 milligrams of
  THC. A single serving of an edible marijuana product may not exceed 10 milligrams of THC.
           (v)     for a marijuana product sold as a topical product, a concentration of no more than 6% THC and
  no more than 800 milligrams of THC per package;
           (vi)    for a marijuana product sold as a suppository or transdermal patch, no more than 100
  milligrams of THC per suppository or transdermal patch and no more than 800 milligrams of THC per package;
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68th Legislature 2023                                                                                          HB 229.1
  and
          (vii)    for any other marijuana product, no more than 800 milligrams of THC.
          (c)      There may be a deviation of 10% above or below the allowed amount on a single serving of an
  edible marijuana product under subsection (8)(a)(iv).
          (c)(d)   A dispensary may sell marijuana or marijuana products having higher THC potency levels than
  described in subsection (8) to registered cardholders.
          (9)      A licensee or employee is prohibited from conducting a transaction that would result in a
  consumer or registered cardholder exceeding the personal possession amounts set forth in 16-12-106 and 16-
  12-515."
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Statutes affected: 
HB0229_1.pdf: 16-12-104, 16-12-206, 16-12-224
HB0229_2.pdf: 16-12-104, 16-12-206, 16-12-224
HB0229_3.pdf: 16-12-104, 16-12-206, 16-12-224
HB0229_4.pdf: 16-12-104, 16-12-206, 16-12-224
Amended: 16-12-104, 16-12-206, 16-12-224
Introduced: 16-12-104, 16-12-206, 16-12-224