PART I

SECTION 1. The legislature finds that Hawaii's medical use of marijuana law was enacted on June 14, 2000, as Act 228, Session Laws of Hawaii 2000, to provide medical relief for seriously ill individuals in the State. While the current law recognizes the beneficial use of marijuana in treating or alleviating pain or other symptoms associated with certain debilitating illnesses, it is silent on how patients can obtain medical marijuana if they or their caregivers are unable to grow their own supply of medical marijuana. The legislature further finds that many of the State's nearly thirteen thousand qualifying patients lack the ability to grow their own supply of medical marijuana due to a number of factors, including disability and limited space to grow medical marijuana. As a result, a regulated statewide dispensary system for medical marijuana is urgently needed by qualifying patients in the State.

Accordingly, the purpose of this Act is to establish a regulated statewide dispensary system for medical marijuana to ensure safe and legal access to medical marijuana for qualifying patients.

PART II

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

medical marijuana dispensary system

§ -1 Definitions. As used in this chapter:

"Department" means the department of health.

"Manufacture" means the preparation, propagation, compounding, conversion, or processing of a substance containing marijuana or its principal psychoactive constituent tetrahydrocannabinol, either directly or indirectly, by a person other than a qualifying patient or primary caregiver for the qualifying patient's use, by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, and includes any packaging or repackaging of the substance or labeling or relabeling of its container.

"Manufactured marijuana product" means any capsule, lozenge, oil, or pill that has been manufactured using marijuana.

"Marijuana" shall have the same meaning as in section 329-121.

"Medical marijuana dispensary" or "dispensary" means an entity that holds a dispensary license and operates one or more cultivation sites, manufacture sites, and retail dispensing locations.

"Person" means an individual, firm, corporation, partnership, association, or any form of business or legal entity.

"Primary caregiver" shall have the same meaning as in section 329-121.

"Production" means the planting, cultivation, growing, or harvesting of marijuana. "Production" includes the manufacture of medical marijuana products pursuant to this chapter.

"Qualifying patient" shall have the same meaning as in section 329-121.

§ -2 Medical marijuana dispensaries; licensure; fees; inspection. (a) This section applies to the dispensing of marijuana for medical use, as defined in section 329-121.

(b) No person shall operate a dispensary unless the person:

(1) Has obtained a license from the department pursuant to this chapter; and

(2) Is a resident of the State.

(c) The department shall adopt rules, in accordance with chapter 91, to provide for the licensure and standards for dispensaries in this State and to implement this chapter.

(d) The director of health shall grant medical marijuana dispensary licenses to allow dispensaries licensed under this section to acquire, possess, cultivate, manufacture, deliver, transfer, transport, supply, sell, or dispense marijuana, or related supplies and educational materials, to registered qualifying patients.

(e) Each license shall allow acquisition, possession, cultivation, manufacture, transfer, transport, delivery, supply, sale, and dispensing of medical marijuana only in the county for which it is granted.

(f) There shall be up to one dispensary licenses granted in each county of the State; provided that there shall not be a dispensary license granted in the county of Kalawao. There shall be up to one cultivation sites and two dispensing locations allowed under each dispensary license.

(g) Each licensee granted a dispensary license pursuant to this section shall:

(1) Be a licensed health care provider organized in the State;

(2) Be a legal entity formed under the laws of the State;

(3) Not be a legal entity formed under the laws of any other state;

(4) Not be an insurance company or mutual benefit society, nor directly owned or controlled by an insurance company or mutual benefit society;

(5) Have obtained a Hawaii general excise tax license pursuant to section 237-9; and

(6) Be at least twenty-one years of age.

(h) The director of health shall approve an application for a dispensary license if the application meets all dispensary licensing requirements and criteria pursuant to this section and, if approved, shall issue the license to the dispensary within thirty days of receiving the application. The director shall issue dispensary licenses to qualifying applicants in the order in which applications are received.

(i) Dispensaries licensed pursuant to this section shall be open for business and have medical marijuana for sale to qualifying patients no later than one hundred eighty days from the date of license approval.

(j) The department of health shall commence accepting applications for the dispensary license that is applicable to each county beginning on July 15, 2015.

(k) A single applicant may be granted a dispensary license in more than one county if the dispensary meets all licensing requirements.

(l) Each person seeking licensure as a dispensary shall submit an application that includes the following:

(1) Documentation that demonstrates that the dispensary controls at least $2,000,000 for each license and at least $100,000 for each dispensing location allowed under the license or licenses applied for in the form of escrow accounts, letters of credit, surety bonds, bank statements, lines of credit, or the equivalent, to begin operating the dispensary; and that the dispensary has controlled the required amount for at least ninety days prior to the date the license application was submitted;

(2) Documentation that demonstrates the capacity of the dispensary to conduct chemical and pharmaceutical analysis of medical marijuana to ensure quality, consistency, purity, and potency of medication for at least days prior to the date the license application was submitted;

(3) A nonrefundable application fee of $25,000 shall be submitted to the department by check with the license application for each license applied for. An additional fee of $75,000 for each license approved, plus $25,000 for each retail dispensing location allowed under each approved license, shall be submitted by check to the department within fourteen days of approval;

(4) Documentation that demonstrates that the dispensary is a legal entity formed under the laws of the State; and

(5) A general excise tax license number.

(m) All dispensary licenses shall expire on June 30, 2025, and may be renewed by application submitted beginning on July 1, 2025.

(n) The department shall establish and collect an annual renewal fee of $50,000 from a medical marijuana dispensary license.

(o) All fees collected pursuant to this section shall be deposited in the medical marijuana registry and regulation special fund pursuant to section 321-30.1.

(p) Notwithstanding any other law to the contrary, no dispensary shall employ a person convicted of a felony anywhere in the United States.

(q) At least fifty-one per cent of the interests in a dispensary shall be held at all times by full-time Hawaii residents or entities wholly controlled by Hawaii residents who have documented Hawaii residency for at least five years immediately preceding the date of the license application. No more than per cent of the interests in a dispensary shall be held at any time by individuals who do not have documented Hawaii residency for at least years immediately preceding the date of the license application.

(r) Each individual or entity who holds twenty-five per cent or more interest in a dispensary shall:

(1) Be a principal officer or board member of the dispensary;

(2) Have been a Hawaii resident for at least five years immediately preceding the date of the license application;

(3) Be a legal resident of the State; and

(4) Maintain a full-time residence in the State.

(s) Dispensaries licensed pursuant to this section shall operate and maintain a real-time software system of accounting for the total amount of medical marijuana, including the equivalent physical weight of marijuana used to manufacture manufactured marijuana products, that a qualifying patient and primary caregiver purchase from all dispensing locations in the State.

(t) No samples or consumption of marijuana products shall be permitted on dispensary premises or within one thousand feet of the premises.

§ -3 Qualifying patients; limits; other states. (a) A qualifying patient shall be allowed to purchase a total limit of ounces of medical marijuana per month and a limit of ounces in any two week period.

(b) A qualifying patient may purchase medical marijuana from any dispensary location in the State.

(c) This section shall apply to qualifying patients from other states; provided that the patient provides a written certification, as defined in section 329-121, or similar documentation.

§ -4 Public education. (a) The department shall engage in a continuing education and training program to explain and clarify the purposes and requirements of this chapter. The program shall target community partner agencies, physicians and other health care providers, patients and caregivers, law enforcement agencies, individuals under eighteen years of age, law and policy makers, and the general public.

(b) The department shall employ at least one full time staff member whose qualifications and duties include the provision of medical marijuana health education.

§ -5 Manufacturing of medical marijuana products. (a) Any medical marijuana dispensary licensed by the department pursuant to this chapter shall be permitted to manufacture medical marijuana; provided that the dispensary shall also obtain any other state or county permits or licenses that may be necessary for a particular manufacturing activity.

(b) The department shall establish standards regarding the manufacture of medical marijuana products; provided that any area within a dispensary where marijuana will be manufactured into an ingestible form shall comply with the food safety code under chapter 11-50, Hawaii Administrative Rules.

(c) A manufacturer of a manufactured marijuana product shall calculate the equivalent physical weight of the marijuana that is used to manufacture the product and shall make the equivalency calculations available to the department and to a consumer of the manufactured marijuana product.

§ -6 Types of manufactured marijuana products. (a) The types of medical marijuana products that may be manufactured and dispensed pursuant to this chapter shall be limited to:

(1) Capsules;

(2) Lozenges;

(3) Oils; and

(4) Pills.

(b) As used in this section, "lozenge" means a small tablet manufactured in a manner to allow for the dissolving of its medicinal or therapeutic component slowly in the mouth.

§ -7 Advertising; packaging. (a) The department shall establish standards regarding the advertising and packaging of medical marijuana products; provided that the standards, at a minimum, shall require the use of packaging that:

(1) Is child-resistant and opaque so that the product cannot be seen from outside the packaging;

(2) Is clearly labeled with the phrase "For medical use only";

(3) Contains information about the contents and potency of the product; and

(4) In the case of manufactured marijuana products, lists the equivalent physical weight of the marijuana used to manufacture the amount of the product that is within the packaging, pursuant to section -5.

(b) Any capsule, lozenge, oil, or pill containing medical marijuana or its principal psychoactive constituent tetrahydrocannabinol shall be packaged so that one dose, serving, or single wrapped item contains no more than ten milligrams of tetrahydrocannabinol; provided that no product shall contain more than a total of milligrams of tetrahydrocannabinol.

(1) Do any commercial advertising; and

(2) Sell any products other than medical marijuana and manufactured medical marijuana products.

§ -8 Medical marijuana dispensary rules. The department shall adopt interim rules, which shall be exempt from chapter 91 and chapter 201M and be effective upon the effective date of this Act, that include but are not limited to the following:

(1) Any specific requirements regarding annual audits and reports pertaining to each dispensary that is licensed pursuant to this chapter;

(2) Security requirements for the operation of dispensaries; provided that the requirements, at a minimum, shall require for dispensaries:

(A) Presentation of valid identification as issued by the department pursuant to section 329-123, by a qualifying patient or caregiver, upon entering the premises;

(B) Video monitoring and recording of the premises;

(D) Exterior lighting; and

(E) Other reasonable security measures as deemed necessary by the department;

(3) Standards and criminal background checks for operators and employees of dispensaries; provided that the standards, at a minimum, shall exclude from licensure or employment any person convicted of any felony;

(4) The training and certification of operators and employees of dispensaries; provided that the department shall establish a training or certification program for dispensary employees;

(5) The types of medical marijuana products that dispensaries shall be authorized to grow, manufacture, sell, or provide pursuant to section -6;

(6) Standards and methodologies related to testing medical marijuana products for content, contamination, and consistency;

(7) The quantities of manufactured marijuana products that a dispensary may dispense to a qualifying patient or primary caregiver; provided that no dispensary shall sell or provide to a qualifying patient or primary caregiver any combination of marijuana and manufactured marijuana products that:

(A) During a period of fifteen consecutive days, exceeds the equivalent of four ounces of marijuana; or

(B) During a period of thirty consecutive days, exceeds the equivalent of eight ounces of marijuana;

(8) Dispensary inventory controls to prevent the unauthorized diversion of marijuana or the dispensing of medical marijuana or manufactured marijuana products to qualifying patients or primary caregivers in quantities that exceed limits established by this section; provided that the controls, at a minimum, shall include:

(A) A computer software tracking system that will allow the department to track all medical marijuana and medical marijuana product inventory from either seed or immature plant stage until the marijuana or marijuana product is sold to a customer or destroyed; and

(B) Product packaging standards sufficient to allow law enforcement personnel to reasonably determine the contents of an unopened package;

(9) The destruction or disposal of any marijuana products; provided that the department shall have a record on inventory that requires witness and reverse distribution for final disposal; and

(10) Any limitations to the size or format of any signs placed outside a dispensary; provided that no sign shall include the image of a cartoon character or other design intended to appeal to children;

provided that the interim rules shall apply up to the date of the department's adoption of final rules in accordance with chapter 91.

§ -9 Prohibited acts; exceeding limits; fraud; unlawful manufacturing of medical marijuana products. (a) It is unlawful for any qualifying patient or primary caregiver who visits more than one dispensary to knowingly or intentionally withhold information regarding prior dispensary visits for the purpose of obtaining quantities of medical marijuana or manufactured marijuana products that exceed limits established by this chapter.

(b) It is unlawful for any person to:

(1) Obtain or attempt to procure any medical marijuana or marijuana product from a dispensary by:

(A) Fraud, deceit, misrepresentation, embezzlement, or theft;

(B) The forgery or alteration of a medical marijuana permit;

(D) The use of a false name or patient identification number, or the giving of a false address; or

(E) The alteration of a state issued medical use of marijuana permit card;

(2) Furnish false or fraudulent material information in or omit any material information from any application, report, or other document required to be kept or filed under this chapter;

(3) Misapply or divert to the person's own use or other unauthorized or illegal use or to take, make away with, or secrete, with intent to misapply or divert to the person's own use or other unauthorized or illegal use, any marijuana that shall have come into the person's possession or under the person's care while working in a dispensary by virtue of the person's employment; or

(4) Make, distribute, possess, or sell any medical use of marijuana permit form whether blank, faxed, computer generated, photocopied, electronically transmitted, or reproduced in any other manner without the authorization of the department of health medical use of marijuana program.

(c) It is unlawful for any dispensary to use flammable solvents to extract tetrahydrocannabinol from marijuana for the purposes of manufacturing medical marijuana products.

(d) Any person who violates subsection (a) is guilty of a misdemeanor and subject to a fine of $500. Any person who violates subsection (b) is guilty of a class C felony. Any dispensary who violates subsection (c) is guilty of a class B felony.

§ -10 Revocation and suspension of license. (a) In addition to any other actions authorized by law, the department shall have the power to deny, revoke, or suspend any license applied for or issued by the department in accordance with this chapter, and to fine or otherwise discipline a licensee for any cause authorized by law, including but not limited to the following:

(1) Procuring a license through fraud, misrepresentation, or deceit;

(2) Professional misconduct, gross carelessness, or manifest incapacity;

(3) Violation of any of the provisions of this chapter or the rules adopted pursuant thereto;

(4) False, fraudulent, or deceptive advertising;

(5) Any other conduct constituting fraudulent or dishonest dealings;

(6) Failure to comply with a department order; and

(7) Making a false statement on any document submitted or required to be filed by this chapter, including furnishing false or fraudulent material information in any application.

(b) Any person who violates any of the provisions of this chapter or the rules adopted pursuant thereto shall be fined not less than $ nor more than $ for each violation.

(1) Dispense, sell, transfer, or otherwise dispose of any marijuana or manufactured marijuana products owned by or in the possession of the licensee; or

(2) Manufacture marijuana products,

until the time for taking an appeal has elapsed or until all appeals have been concluded. Upon a revocation order becoming final, all marijuana and manufactured marijuana products shall be forfeited to the State.

(d) All proceedings for denial, suspension, fine, or revocation of a license on any grounds specified in subsection (a) shall be conducted pursuant to chapter 91, including the right of judicial review.

§ -11 Medical marijuana zoning. (a) Medical marijuana dispensaries shall comply with all county zoning ordinances, rules, or regulations; provided that:

(1) A medical marijuana dispensary shall be permitted in any area in which agricultural production is permitted, except as provided within this chapter; and

(2) No medical marijuana dispensary shall be permitted within seven hundred fifty feet of the real property comprising a playground, public housing project or complex, or school.

(b) As used in this section:

"Playground" means any public outdoor facility, including any parking lot appurtenant thereto, that is intended for recreation, with any portion thereof containing three or more separate apparatus intended for the recreation of children, including but not limited to sliding boards, swing sets, and teeterboards.

"Public housing project or complex" means a housing project directly controlled, owned, developed, or managed by the Hawaii public housing authority pursuant to the federal or state low-rent public housing program.

"School" means any public or private preschool, kindergarten, elementary, intermediate, middle, secondary, high school, or university.

§ -12 Annual inspections, audits, and reports. (a) Each medical marijuana dispensary licensed pursuant to this chapter shall:

(1) Be subject to an annual announced inspection and unannounced inspections of its operations by the department; and

(2) Annually cause an independent financial audit, at the dispensary operator's own expense, to be conducted of the dispensary and shall submit the audit's findings to the department.

(b) The department shall report annually to the governor and the legislature on the establishment and regulation of medical marijuana dispensaries, including but not limited to the number and location of dispensaries licensed, the total licensing fees collected, and any licensing violations determined by the department.

§ -13 Cultivation of medical marijuana by qualifying patients and primary caregivers. Nothing in this chapter shall be construed as prohibiting a qualifying patient or primary caregiver from producing or manufacturing an adequate supply of medical marijuana pursuant to part IX of chapter 329.

§ -14 Coordination among state and federal agencies. The department shall initiate ongoing dialogue among relevant state and federal agencies to identify processes and policies that ensure the privacy of medical marijuana patients and the compliance of patients, caregivers, producers, and dispensaries with state laws and regulations related to medical marijuana.

§ -15 Criminal offenses; dispensary premises; penalties. (a) No person shall intentionally or knowingly enter or remain upon licensed dispensary premises unless the person is:

(1) An authorized operator or employee of the dispensary and is registered with the department's dispensary program;

(2) An adult patient or caregiver registered with the department's medical marijuana program;

(3) A government employee or official acting in the person's official capacity; or

(4) A person who has obtained written authorization from the department to be upon the premises.

(b) No operator or employee of a licensed dispensary shall intentionally, knowingly, or recklessly allow a person to enter or remain upon the licensed dispensary's premises unless that person is permitted pursuant to subsection (a).

§ -16 Prohibition of distribution of marijuana and marijuana products to minors; storage; penalties. (a) A person commits the offense of promoting marijuana to a minor if the person intentionally, knowingly, or recklessly distributes any amount of marijuana to a minor who is not a registered qualifying patient. Any person in violation of this subsection shall be guilty of a class B felony.

(b) A person commits the offense of failure to store marijuana if the person intentionally, knowingly, or recklessly leaves any amount of marijuana, marijuana product, or marijuana concentrate unattended by that person in premises occupied by a minor who is not a registered qualifying patient, unless the marijuana, marijuana product, or marijuana concentrate is securely locked in a container or location that a reasonable person would believe to be secure and inaccessible to a minor. Any person in violation of this subsection shall be guilty of a class C felony.

§ -17 Diversion from a dispensary; penalties. (a) A person commits diversion from a dispensary if the person is an operator or employee of a licensed medical marijuana dispensary and intentionally or knowingly diverts to the person's own use or other unauthorized or illegal use, or takes, makes away with, or secretes, with intent to divert to the person's own use or other unauthorized or illegal use, any marijuana, marijuana product, or marijuana concentrate under the person's possession, care, or custody.

(b) Any person in violation of this section shall be guilty of a class B felony.

§ -18 Prohibition against alteration or falsification of medical marijuana dispensary records. (a) A person commits the offense of falsification of medical marijuana records if the person intentionally, knowingly, or recklessly:

(1) Makes or causes a false entry in medical marijuana dispensary records;

(2) Alters, erases, obliterates, deletes, removes, or destroys a true entry in medical marijuana dispensary records;

(3) Omits a true entry in medical marijuana dispensary records in violation of a duty that the person knows to be imposed upon the person by law or by the nature of the person's position; or

(4) Prevents the making of a true entry or causes the omission thereof in medical marijuana dispensary records.

(b) Any person in violation of this section shall be guilty of a class C felony.

"Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or other similar capabilities.

"Information" means data, text, images, sounds, codes, computer programs, software, or databases.

"Medical marijuana dispensary records" means any inventory tracking records and other records of a licensed medical marijuana dispensary.

"Record" means information that is written, printed, or stored in an electronic or other medium and is retrievable in a perceivable form.

§ -19 Law enforcement; access to dispensary records. The department shall disclose information, documents, and other records regarding medical marijuana dispensaries to police departments, prosecutors' offices, the attorney general's office, and any other state, county, or federal agency engaged in the detection, investigation, or prosecution of violations of applicable state, county, and federal laws or regulations related to the operations or activities of a medical marijuana dispensary."

PART III

SECTION 3. Section 46-4, Hawaii Revised Statutes, is amended to read as follows:

"§46-4 County zoning. (a) This section and any ordinance, rule, or regulation adopted in accordance with this section shall apply to lands not contained within the forest reserve boundaries as established on January 31, 1957, or as subsequently amended.

Zoning in all counties shall be accomplished within the framework of a long-range, comprehensive general plan prepared or being prepared to guide the overall future development of the county. Zoning shall be one of the tools available to the county to put the general plan into effect in an orderly manner. Zoning in the counties of Hawaii, Maui, and Kauai means the establishment of districts of such number, shape, and area, and the adoption of regulations for each district to carry out the purposes of this section. In establishing or regulating the districts, full consideration shall be given to all available data as to soil classification and physical use capabilities of the land to allow and encourage the most beneficial use of the land consonant with good zoning practices. The zoning power granted herein shall be exercised by ordinance which may relate to:

(1) The areas within which agriculture, forestry, industry, trade, and business may be conducted;

(2) The areas in which residential uses may be regulated or prohibited;

(3) The areas bordering natural watercourses, channels, and streams, in which trades or industries, filling or dumping, erection of structures, and the location of buildings may be prohibited or restricted;

(4) The areas in which particular uses may be subjected to special restrictions;

(5) The location of buildings and structures designed for specific uses and designation of uses for which buildings and structures may not be used or altered;

(6) The location, height, bulk, number of stories, and size of buildings and other structures;

(7) The location of roads, schools, and recreation areas;

(8) Building setback lines and future street lines;

(9) The density and distribution of population;

(10) The percentage of a lot that may be occupied, size of yards, courts, and other open spaces;

(11) Minimum and maximum lot sizes; and

(12) Other regulations the boards or city council find necessary and proper to permit and encourage the orderly development of land resources within their jurisdictions.

The council of any county shall prescribe rules, regulations, and administrative procedures and provide personnel it finds necessary to enforce this section and any ordinance enacted in accordance with this section. The ordinances may be enforced by appropriate fines and penalties, civil or criminal, or by court order at the suit of the county or the owner or owners of real estate directly affected by the ordinances.

Any civil fine or penalty provided by ordinance under this section may be imposed by the district court, or by the zoning agency after an opportunity for a hearing pursuant to chapter 91. The proceeding shall not be a prerequisite for any injunctive relief ordered by the circuit court.

Nothing in this section shall invalidate any zoning ordinance or regulation adopted by any county or other agency of government pursuant to the statutes in effect prior to July 1, 1957.

The powers granted herein shall be liberally construed in favor of the county exercising them, and in such a manner as to promote the orderly development of each county or city and county in accordance with a long-range, comprehensive general plan to ensure the greatest benefit for the State as a whole. This section shall not be construed to limit or repeal any powers of any county to achieve these ends through zoning and building regulations, except insofar as forest and water reserve zones are concerned and as provided in subsections (c) and (d).

Neither this section nor any ordinance enacted pursuant to this section shall prohibit the continued lawful use of any building or premises for any trade, industrial, residential, agricultural, or other purpose for which the building or premises is used at the time this section or the ordinance takes effect; provided that a zoning ordinance may provide for elimination of nonconforming uses as the uses are discontinued, or for the amortization or phasing out of nonconforming uses or signs over a reasonable period of time in commercial, industrial, resort, and apartment zoned areas only. In no event shall such amortization or phasing out of nonconforming uses apply to any existing building or premises used for residential (single-family or duplex) or agricultural uses. Nothing in this section shall affect or impair the powers and duties of the director of transportation as set forth in chapter 262.

(b) Any final order of a zoning agency established under this section may be appealed to the circuit court of the circuit in which the land in question is found. The appeal shall be in accordance with the Hawaii rules of civil procedure.

(c) Each county may adopt reasonable standards to allow the construction of two single-family dwelling units on any lot where a residential dwelling unit is permitted.

(d) Neither this section nor any other law, county ordinance, or rule shall prohibit group living in facilities with eight or fewer residents for purposes or functions that are licensed, certified, registered, or monitored by the State; provided that a resident manager or a resident supervisor and the resident manager's or resident supervisor's family shall not be included in this resident count. These group living facilities shall meet all applicable county requirements not inconsistent with the intent of this subsection, including but not limited to building height, setback, maximum lot coverage, parking, and floor area requirements.

(e) Neither this section nor any other law, county ordinance, or rule shall prohibit the use of land for employee housing and community buildings in plantation community subdivisions as defined in section 205-4.5(a)(12); in addition, no zoning ordinance shall provide for the elimination, amortization, or phasing out of plantation community subdivisions as a nonconforming use.

(f) Neither this section nor any other law, county ordinance, or rule shall prohibit the use of land for medical marijuana dispensaries established and licensed pursuant to section -2; provided that the land is otherwise zoned for agriculture, manufacturing, or retail purposes."

PART IV

SECTION 4. Section 321-30.1, Hawaii Revised Statutes, is amended to read as follows:

"[[]§321-30.1[]] Medical marijuana registry and regulation special fund; established. (a) There is established within the state treasury the medical marijuana registry and regulation special fund. The fund shall be expended at the discretion of the director of health:

(1) To establish and regulate a system of medical marijuana dispensaries in the State;

[~~(1)~~] (2) To offset the cost of the processing and issuance of patient registry identification certificates and primary caregiver registration certificates;

[~~(2)~~] (3) To fund positions authorized by the legislature;

[~~(3)~~] (4) To establish and manage a secure and confidential database; and

[~~(4)~~] (5) For any other expenditure necessary, as authorized by the legislature, to implement [a] medical marijuana registry [~~program.~~] and regulation programs.

(b) The fund shall consist of all moneys derived from fees collected pursuant to subsection (c)[~~. All~~] and section -2. There is established within the medical marijuana registry and regulation special fund:

(1) A medical marijuana registry program subaccount, into which shall be deposited all fees collected pursuant to subsection (c) [~~shall be deposited into the medical marijuana registry special fund.~~]; and

(2) A medical marijuana dispensary program subaccount, into which shall be deposited all fees collected pursuant to section -2.

(c) The department, upon completion of the transfer of the medical use of marijuana program, shall charge a medical marijuana registration fee of no more than $35."

PART V

SECTION 5. Chapter 329, Hawaii Revised Statutes, is amended by adding two new sections to part IX to be appropriately designated and to read as follows:

"§329- Protections afforded to an owner or qualified employee of a licensed dispensary. (a) An owner or employee of a medical marijuana dispensary that is licensed under section -2 may assert the production or dispensing of medical marijuana as an affirmative defense to any prosecution involving marijuana under this part, chapter , or chapter 712; provided that the owner or employee strictly complied with the requirements of chapter .

(b) An owner or employee of a licensed medical marijuana dispensary not complying with the permitted scope of the production or dispensing of medical marijuana under chapter shall not be afforded the protections provided by subsection (a).

(c) No person shall be subject to arrest or prosecution for merely being in the presence or vicinity of a medical marijuana dispensary licensed and operating under chapter .

§329- Prohibited acts; flammable solvents. (a) No qualifying patient or primary caregiver shall use flammable solvents to extract tetrahydrocannabinol from marijuana plants.

(b) Any person who violates this section shall be guilty of a class B felony."

SECTION 6. Section 329-121, Hawaii Revised Statutes, is amended by amending the definition of "adequate supply" to read as follows:

""Adequate supply" means an amount of marijuana jointly possessed between the qualifying patient and the primary caregiver that is not more than is reasonably necessary to [~~assure~~] ensure the uninterrupted availability of marijuana for the purpose of alleviating the symptoms or effects of a qualifying patient's debilitating medical condition; provided that an "adequate supply" shall not exceed: seven marijuana plants, whether immature or mature, and four ounces of usable marijuana at any given time[.]; or any combination of usable marijuana and marijuana products manufactured pursuant to chapter that exceeds four ounces of usable marijuana or the equivalent of four ounces of usable marijuana, as calculated using information provided pursuant to section -7(a)(4)."

SECTION 7. Section 329-122, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The authorization for the medical use of marijuana in this section shall not apply to:

(1) The medical use of marijuana that endangers the health or well-being of another person;

(2) The medical use of marijuana:

(A) In a school bus, public bus, or any moving vehicle;

(B) In the workplace of one's employment;

(D) At any public park, public beach, public recreation center, recreation or youth center; or

(E) [~~Other~~] At any other place open to the public; provided that a qualifying patient, parent, primary caregiver, or an owner or employee of a medical marijuana dispensary licensed under section -2 shall not be prohibited from transporting medical marijuana in any public place; and

(3) The use of marijuana by a qualifying patient, parent, or primary caregiver for purposes other than medical use permitted by this part."

SECTION 8. Section 329-123, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Physicians who issue written certifications shall provide, in each written certification, the name, address, patient identification number, and other identifying information of the qualifying patient. The department of health shall require, in rules adopted pursuant to chapter 91, that all written certifications comply with a designated form completed by or on behalf of a qualifying patient. The form shall require information from the applicant, primary caregiver, and [~~primary care~~] physician as specifically required or permitted by this chapter. The form shall require the address of the location where the marijuana is grown and shall appear on the registry card issued by the department of health. [~~The certifying physician shall be required to be the qualifying patient's primary care physician.~~] The certifying physician shall be required to have a bona fide physician-patient relationship with the qualifying patient. All current active medical marijuana permits shall be honored through their expiration date."

PART VI

SECTION 9. Chapter 237, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§237-A Special general excise tax on marijuana sales by dispensaries. (a) There shall be levied, assessed, and collected on a marijuana dispensary that is licensed under chapter a general excise tax on marijuana sales in the State measured by the application of a rate of fifteen per cent against the gross proceeds of sale of marijuana.

(b) The tax imposed under this section shall be in addition to the retail marijuana special sales tax on marijuana sales under section 237-B.

§237-B Retail marijuana special sales tax. In lieu of the general excise tax under section 237-13, there shall be levied, assessed, and collected on a marijuana dispensary that is licensed under chapter , a retail marijuana special sales tax of ten per cent of the gross proceeds of sales by a marijuana dispensary."

PART VII

SECTION 10. There is appropriated out of the general revenues of the State of Hawaii the sum of $750,000 or so much thereof as may be necessary for fiscal year 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 to be deposited into the medical marijuana registry and regulation special fund established pursuant to section 321-30.1, Hawaii Revised Statutes.

SECTION 11. There is appropriated out of the medical marijuana registry and regulation special fund the sum of $ or so much thereof as may be necessary for fiscal year 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 to carry out the purposes of this Act, including the hiring of full-time equivalent (FTE) positions to carry out the purposes of the medical marijuana dispensary program established pursuant to this Act.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 12. Not later than July 1, 2016, the department of health shall establish and commence a repayment plan and schedule to repay to the general fund, the sums deposited into the medical marijuana registry and regulation special fund established pursuant to section 321-30.1, Hawaii Revised Statutes. The department of health shall only use moneys from the medical marijuana registry and regulation special fund to repay the general fund. The repayment schedule shall not extend beyond June 30, .

PART VIII

SECTION 13. Not later than March 15, 2016, the director of health shall submit a report and provide an informational briefing to the legislature concerning the progress of implementing the provisions of part II of this Act, including the status of rulemaking by the department of health pertaining to the licensure of medical marijuana dispensaries.

PART IX

SECTION 14. In codifying the new sections added by part VI of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 15. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 16. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 17. This Act shall take effect on January 7, 2059; provided that:

(1) Part VII shall take effect on July 1, 2050; and

(2) This Act shall be repealed on , and sections 46-4, 321-30.1, 329-122(c), and 329-123(a), and the definition of "adequate supply" in section 329-121, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day prior to the effective date of this Act.

HOUSE OF REPRESENTATIVES	H.B. NO.	321
TWENTY-EIGHTH LEGISLATURE, 2015		H.D. 1
STATE OF HAWAII		S.D. 2