Senate Bill 534 establishes a comprehensive regulatory framework for medical cannabis in the state by creating the Office of Medical Cannabis Regulation under the Department of Health Services. This office will oversee a registry for patients and caregivers authorized to use medical cannabis products, which include oils, tinctures, and edibles, but explicitly exclude products intended for smoking. The bill outlines licensing requirements for cannabis growers, processors, and testing laboratories, stipulating that applicants must be state residents without recent felony convictions. It also sets operational guidelines, including security measures and advertising restrictions, to ensure compliance and safety in handling medical cannabis.

The legislation mandates that only licensed dispensaries, which must pay an annual fee of $5,000, can sell or transfer medical cannabis products to patients and caregivers. It requires that a majority of the principal officers or board members of dispensaries be state residents and prohibits individuals with certain criminal convictions from holding these positions. The bill also enhances the existing Prescription Drug Monitoring Program (PDMP) by including medical cannabis records and eliminating the sunset provision for PDMP requirements, ensuring they remain effective beyond 2030. Additionally, it establishes a statewide seed-to-sale database to track cannabis products and decriminalizes the possession and distribution of medical cannabis products when conducted in compliance with the new regulations, while excluding certain items from the definition of drug paraphernalia when used in accordance with the medical cannabis program.