Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor
March 10, 2021
The Honorable Richard Hilderbrand, Chairperson
Senate Committee on Public Health and Welfare
Statehouse, Room 445A-S
Topeka, Kansas 66612
And
The Honorable Larry Alley, Chairperson
Senate Committee on Federal and State Affairs
Statehouse, Room 136-E
Topeka, Kansas 66612
Dear Senators Hilderbrand and Alley:
SUBJECT: Fiscal Note for SB 92 by Senate Committee on Commerce
In accordance with KSA 75-3715a, the following fiscal note concerning SB 92 is
respectfully submitted to your committees.
SB 92 would create the Kansas Equal Access Act which would establish the Kansas
Medical Cannabis Agency and the Kansas Medical Cannabis Advisory Board. The Kansas
Department of Health and Environment (KDHE) would appoint the Director of the Agency who
would need to be confirmed by the Senate. The Director and agents would have the authority of
law enforcement officers.
The Director would begin accepting applications for identification cards and licenses on or
before January 1, 2022. There would be a fee limit of $25 for a patient identification card and
renewal of the card. Individuals who have been issued a patient or caregiver identification card
would be allowed to cultivate, purchase, possess, and use medical cannabis products as authorized
by rules and regulations. The bill contains the application process for a medical provider seeking
to recommend treatment with medical cannabis and allows for an application fee to be established
by the Director.
The Honorable Richard Hilderbrand and Larry Alley
Page 2—SB 92
A medical cannabis registry identification card issued by another state, district, territory,
commonwealth, or insular possession of the United States would be recognized by the Director.
No state or municipal law enforcement agency would provide any identifying information
concerning a patient or caregiver who holds an identification card issued to any federal law
enforcement agency or law enforcement agency of another jurisdiction for the purpose of any
investigation of a crime involving possession of cannabis. The Kansas Equal Access Act would
also prohibit discrimination as it pertains to the use of medical cannabis. The bill would:
1. Allow a commercial real property owner or a business owner to prohibit the consumption
of medical cannabis or medical cannabis products on the owners’ premises by smoking or
vaporizing;
2. Define the application process for a person seeking to operate a cultivation, testing
laboratory, processor, or dispensary facility and stipulate that the license will be issued by
the Director and an application fee may be required;
3. Require any owner, director, officer, or agent on an application for a facility license to be
fingerprinted and to submit to a state and national criminal history record check which
would be subject to a reasonable fee charged by the Kansas Bureau of Investigation;
4. Provide the reasons the Director could refuse to issue or renew, revoke, or suspend a facility
license;
5. Define the violations for which the Director could impose a civil penalty or suspend or
revoke a facility license;
6. Require the Director to establish and maintain an electronic database to monitor medical
cannabis from its seed source through its cultivation, testing, processing, distribution, and
dispensing;
7. Establish the Medical Cannabis Regulation Fund in the state treasury to be administered
by the Director of the Kansas Medical Cannabis Agency. Monies in the Medical Cannabis
Regulation Fund would be used for costs related to the regulation and enforcement of the
cultivation, possession, processing, and sale of medical cannabis by the Kansas Medical
Cannabis Agency;
8. Impose a privilege tax of 4.0 percent on the gross receipts received from the sale of medical
cannabis. Every licensed dispensary shall file a monthly return with the Director of
Taxation accompanied by a remittance for the full tax liability shown;
9. Establish the Medical Cannabis Revenues Fund in the state treasury. All moneys credited
to such fund shall be expended or transferred only for the purposes of medical cannabis
research, public health programs, mental health programs, telemedicine programs, drug
and alcohol abuse and prevention programs, elementary and secondary school health
programs, broadband or high-speed internet connectivity initiatives, expenditures from the
The Honorable Richard Hilderbrand and Larry Alley
Page 3—SB 92
state water plan fund and property tax relief for individuals who are 60 years of age or
older. The first $4.0 million credited to the Medical Cannabis Revenues Fund shall be
transferred by the Director of Accounts and Reports to the Operating Grant account of the
State General Fund in the Department of Commerce to be expended for the expansion of
broadband internet connectivity. The next $4.0 million credited to the Medical Cannabis
Revenues Fund shall be transferred to the Community Crisis Stabilization Centers Fund of
the Kansas Department for Aging and Disability Services. The next $4.0 million credited
to the Medical Cannabis Revenues Fund shall be transferred to the State Water Plan Fund;
10. Allow the board of education of a school district to prohibit the consumption of medical
cannabis on the premises of any school operated by such school district except by
individuals holding an identification card who consume medical cannabis through means
other than smoking or vaporizing. A student who is enrolled in a school district and who
is a patient holding an identification card would be permitted to consume medical cannabis
administered by the school nurse or such student’s parent or caregiver as recommended by
the student’s medical provider. No student would be denied participation in any curricular
or extracurricular activities solely on the basis that such student possesses or consumes
medical cannabis in accordance with the provisions of the Kansas Equal Access Act; and
11. Permit the governing body of a postsecondary educational institution to allow any student
enrolled, who is a patient holding an identification card, to possess and consume medical
cannabis in accordance with the provisions of the Kansas Equal Access Act. The student
would not be denied participation in any curricular or extracurricular activities solely on
the basis that the student possesses or consumes medical cannabis in accordance with the
provisions of the Kansas Equal Access Act.
The Kansas Department of Revenue indicates that enactment of SB 92 would have an
administrative fiscal effect on expenditures of $789,633 in FY 2022 from the Medical Cannabis
Revenues Fund. This would include increases to accounting and tax operations, testing of systems,
system development and project management expenses. KDHE estimates that patients will begin
making purchases of medical cannabis beginning July 1, 2023. A 4.0 percent gross receipts tax
on the sale of medical cannabis would be imposed and remitted to the Director of Taxation.
Moneys received would be deposited by the State treasurer into the Medical Cannabis Revenues
Fund. Sales tax would not be applied to the sale of medical cannabis due to the excise tax in Section
22 of the bill. Privilege tax revenues are estimated based on the assumption that the average each
patient would spend per year is $1,504 as shown below.
Fiscal # of % of Kansas Sales per Total Medical Total Revenue
Year Patients Population Registered Patient Cannabis Sales (4% Privilege Tax)
2022 -- -- -- -- --
2023 -- -- -- -- --
2024 14,567 0.5% $1,504 $21,908,768 $ 876,351
2025 29,133 1.0% $1,504 $43,816,032 $1,752,641
2026 58,266 2.0% $1,504 $87,632,064 $3,505,283
The Honorable Richard Hilderbrand and Larry Alley
Page 4—SB 92
KDHE indicates that enactment of SB 92 would increase expenditures by $150,715 from
the State General Fund for an additional 7.75 FTE positions for two months of FY 2021 and by
$5.7 million for an additional 22.00 FTE positions in FY 2022. The estimates include costs for
salaries and fringe benefits and for a web-based, information system with cloud storage that will
electronically establish patient and caregiver identification cards and provide access to the patient
system by law enforcement, physician community and others. The estimate includes the costs to
create a new program, develop a new information system, incorporate security and confidentiality
requirements, build out capacity to address access needs by law enforcement and develop the
capability for program evaluation and rules and regulations support. KDHE does not have
capabilities or knowledge to perform the law enforcement functions or the ability to estimate the
related costs. The agency estimates an increase in revenue from patient and caregiver registration
fees of $301,066 in FY 2022, $454,173 in FY 2023, and $913,523 in FY 2024.
The Office of Judicial Administration (OJA) indicates that enactment of SB 92 could have
a fiscal effect on Judiciary expenditures. Some of the bill’s provisions decriminalize actions that
could be charged as crimes under current law, which could result in fewer criminal cases being
filed. It is also possible that crimes that would be charged under the provision of current law would
still be charged, but the provisions of the bill could be asserted as a defense. However, OJA is
unable to determine an estimate on expenditures or revenues.
The Office of the Attorney General indicates that enactment of SB 92 would direct the
Attorney General to appoint an Assistant Attorney General, with the approval of the Secretary of
KDHE, to be the attorney for the Director of the Kansas Medical Cannabis Agency. The salary of
the Assistant Attorney General would be the responsibility of KDHE. There would likely be
numerous requests for interpretation by local law enforcement or other on elements of the bill’s
implementation and interaction with other state and federal statutes. The Office indicates that this
would result in additional staff time but is unable to determine a fiscal effect on expenditures.
The Kansas Bureau of Investigation (KBI) indicates that the bill does not specify the
number of licenses which would be permitted at one time and it does not identify the number of
individuals who would apply for identification cards and licenses in accordance with the Act. The
KBI is unable to estimate the number of requests for criminal history record checks which could
be submitted for processing. Any additional revenue received from the state and national criminal
history record check requests sent to the KBI would be offset by expenditures related to staffing
and maintenance of the required information technology systems and repositories necessary for
the maintenance and dissemination of criminal history record information in accordance with the
Act. The KBI lacks the information to accurately estimate the number of cases which would be
submitted for analysis to the KBI Forensic Laboratory or the resources needed for examination
and testing. Therefore, the fiscal effect on the Forensic Laboratory is unknown.
The Kansas Department for Aging and Disability Services (KDADS) indicates that the bill
could result in increased expenditures in the Drug and Alcohol Abuse and Prevention Program,
but the costs are unknown. KDADS would require an additional 1.00 FTE position to monitor the
marijuana addiction treatment rates. The position would be in the central office and the estimated
expenditures for salary and fringe benefits would be $83,000 from the State General Fund for FY
The Honorable Richard Hilderbrand and Larry Alley
Page 5—SB 92
2022. According to the bill, the agency could receive up to $4.0 million in revenue to be deposited
into the Crisis Stabilization Centers Fund in FY 2023.
The Office of the State Treasurer, the Department of Corrections and the Department of
Agriculture indicate that enactment of SB 92 would not have a fiscal effect on the agencies. The
Board of Pharmacy indicates that the fiscal effect on Board expenditures is unknown. The League
of Kansas Municipalities indicates that the bill would increase revenue to cities, however the
amount that would be collected from taxes and licensing fees is unknown. Any fiscal effect
associated with SB 92 is not reflected in The FY 2022 Governor’s Budget Report.
Sincerely,
Adam Proffitt
Director of the Budget
cc: Lynn Robinson, Department of Revenue
Willie Prescott, Office of the Attorney General
Paul Weisgerber, KBI
Debbie Thomas, Judiciary
Dan Thimmesch, Health & Environment
Lauren Tice Miller, Office of the Treasurer
Kellen Liebsch, Agriculture
Connie Hubbell, Aging & Disability Services
Alexandra Blasi, Board of Pharmacy
Wendi Stark, League of Municipalities
Randy Bowman, Corrections
Statutes affected: As introduced: 8-1567, 75-52, 21-5703, 21-5705, 21-5706, 21-5707, 21-5709, 21-5710, 21-6109, 23-3201, 38-2269, 44-501, 44-706, 44-1009, 44-1015, 65-1120, 79-5201, 79-5210