Utah Legislature HB0435

Utah Legislature HB0435

Chief Sponsor: Jennifer Dailey-Provost
Senate Sponsor: ____________

8 General Description:
9 This bill amends provisions related to the processing and dispensing of medical
10 cannabis.
11 Highlighted Provisions:
12 This bill:
13 ▸ prohibits the inclusion of a certain oil in medical cannabis products;
14 ▸ requires the inclusion of synthetic additives on the label of a medical cannabis
15 product;
16 ▸ addresses allowed delivery of medical cannabis shipments by a medical cannabis
17 pharmacy; and
18 ▸ makes technical and conforming changes.
19 Money Appropriated in this Bill:
20 None
21 Other Special Clauses:
22 None
23 Utah Code Sections Affected:
25 4-41a-602, as last amended by Laws of Utah 2020, Chapter 12
26 4-41a-603, as last amended by Laws of Utah 2020, Chapter 12
27 26-61a-305, as last amended by Laws of Utah 2020, Chapter 12


29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 4-41a-602 is amended to read:
31 4-41a-602. Cannabis product — Labeling and child-resistant packaging.
32 (1) For any cannabis product that a cannabis processing facility processes or produces
33 and for any raw cannabis that the facility packages, the facility shall:
34 (a) label the cannabis or cannabis product with a label that:
35 (i) clearly and unambiguously states that the cannabis product or package contains
36 cannabis;
37 (ii) clearly displays the amount of total composite tetrahydrocannabinol and
38 cannabidiol in the labeled container;
39 (iii) has a unique identification number that:
40 (A) is connected to the inventory control system; and
41 (B) identifies the unique cannabis product manufacturing process the cannabis
42 processing facility used to manufacture the cannabis product;
43 (iv) identifies the cannabinoid extraction process that the cannabis processing facility
44 used to create the cannabis product;
45 (v) does not display an image, word, or phrase that the facility knows or should know
46 appeals to children; and
47 (vi) discloses each:
48 (A) active or potentially active ingredient, in order of prominence[,];
49 (B) synthetic additive; and
50 (C) possible allergen; and
51 (b) package the raw cannabis or cannabis product in a medicinal dosage form in a
52 container that:
53 (i) is tamper evident and tamper resistant;
54 (ii) does not appeal to children;
55 (iii) does not mimic a candy container;
56 (iv) is opaque;
57 (v) complies with child-resistant effectiveness standards that the United States
58 Consumer Product Safety Commission establishes; and

59 (vi) includes a warning label that states: “WARNING: Cannabis has intoxicating
60 effects and may be addictive. Do not operate a vehicle or machinery under its influence. KEEP
61 OUT OF REACH OF CHILDREN. This product is for medical use only. Use only as directed
62 by a qualified medical provider.”
63 (2) For any cannabis or cannabis product that the cannabis processing facility processes
64 into a gelatinous cube, gelatinous rectangular cuboid, or lozenge in a cube or rectangular
65 cuboid shape, the facility shall:
66 (a) ensure that the label described in Subsection (1)(a) does not contain a photograph or
67 other image of the content of the container; and
68 (b) include on the label described in Subsection (1)(a) a warning about the risks of
69 over-consumption.
70 (3) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
71 Administrative Rulemaking Act to establish:
72 (a) a standard labeling format that:
73 (i) complies with the requirements of this section; and
74 (ii) ensures inclusion of a pharmacy label; and
75 (b) additional requirements on packaging for cannabis and cannabis products to ensure
76 safety and product quality.
77 Section 2. Section 4-41a-603 is amended to read:
78 4-41a-603. Cannabis product — Product quality.
79 (1) As used in this section, “MCT oil” means a supplement made from medium-chain
80 triglycerides.
81 [(1)] (2) A cannabis processing facility:
82 (a) may not produce a cannabis product in a physical form that:
83 (i) the facility knows or should know appeals to children;
84 (ii) is designed to mimic or could be mistaken for a candy product; or
85 (iii) for a cannabis product used in vaporization, includes a candy-like flavor or another
86 flavor that the facility knows or should know appeals to children; [and]
87 (b) may not include MCT oil in a medical cannabis product; and
88 [(b)] (c) notwithstanding Subsection [(1)] (2)(a)(iii), may produce a concentrated oil
89 with a flavor that the department approves to facilitate minimizing the taste or odor of

90 cannabis.
91 [(2)] (3) A cannabis product may vary in the cannabis product’s labeled cannabinoid
92 profile by up to 10% of the indicated amount of a given cannabinoid, by weight.
93 [(3)] (4) The department shall adopt by rule, in accordance with Title 63G, Chapter 3,
94 Utah Administrative Rulemaking Act, human safety standards for the manufacturing of
95 cannabis products that are consistent with best practices for the use of cannabis.
96 Section 3. Section 26-61a-305 is amended to read:
97 26-61a-305. Maximum number of licenses — Home delivery medical cannabis
98 pharmacies.
99 (1) (a) Except as provided in Subsections (1)(b) or (d), if a sufficient number of
100 applicants apply, the department shall issue 14 medical cannabis pharmacy licenses in
101 accordance with this section.
102 (b) If fewer than 14 qualified applicants apply for a medical cannabis pharmacy
103 license, the department shall issue a medical cannabis pharmacy license to each qualified
104 applicant.
105 (c) The department may issue the licenses described in Subsection (1)(a) in two phases
106 in accordance with this Subsection (1)(c).
107 (i) Using one procurement process, the department may issue eight licenses to an initial
108 group of medical cannabis pharmacies and six licenses to a second group of medical cannabis
109 pharmacies.
110 (ii) If the department issues licenses in two phases in accordance with this Subsection
111 (1)(c), the department shall:
112 (A) divide the state into no less than four geographic regions;
113 (B) issue at least one license in each geographic region during each phase of issuing
114 licenses; and
115 (C) complete the process of issuing medical cannabis pharmacy licenses no later than
116 July 1, 2020.
117 (d) (i) The department may issue licenses to operate a medical cannabis pharmacy in
118 addition to the licenses described in Subsection (1)(a) if the department determines, in
119 consultation with the Department of Agriculture and Food and after an annual or more frequent
120 analysis of the current and anticipated market for medical cannabis, that each additional license

121 is necessary to provide an adequate supply, quality, or variety of medical cannabis to medical
122 cannabis cardholders.
123 (ii) The department shall:
124 (A) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
125 make rules to establish criteria and processes for the consultation, analysis, and application for
126 a license described in Subsection (1)(d)(i);
127 (B) before November 30, 2020, report on the rules described in Subsection
128 (1)(d)(ii)(A) to the Executive Appropriations Committee of the Legislature; and
129 (C) report to the Executive Appropriations Committee of the Legislature before each
130 time the department issues an additional license under Subsection (1)(d)(i) regarding the results
131 of the consultation and analysis described in Subsection (1)(d)(i) and the application of the
132 criteria described in Subsection (1)(d)(ii)(A) to the intended licensee.
133 (2) (a) If there are more qualified applicants than there are available licenses for
134 medical cannabis pharmacies, the department shall:
135 (i) evaluate each applicant and award the license to the applicant that best
136 demonstrates:
137 (A) experience with establishing and successfully operating a business that involves
138 complying with a regulatory environment, tracking inventory, and training, evaluating, and
139 monitoring employees;
140 (B) an operating plan that will best ensure the safety and security of patrons and the
141 community;
142 (C) positive connections to the local community;
143 (D) the suitability of the proposed location and the location’s accessibility for
144 qualifying patients;
145 (E) the extent to which the applicant can increase efficiency and reduce the cost of
146 medical cannabis for patients; and
147 (F) a strategic plan described in Subsection 26-61a-304(7) that has a comparatively
148 high likelihood of success; and
149 (ii) ensure a geographic dispersal among licensees that is sufficient to reasonably
150 maximize access to the largest number of medical cannabis cardholders.
151 (b) In making the evaluation described in Subsection (2)(a), the department may give

152 increased consideration to applicants who indicate a willingness to:
153 (i) operate as a home delivery medical cannabis pharmacy that accepts electronic
154 medical cannabis orders that the state central patient portal facilitates; and
155 (ii) accept payments through:
156 (A) a payment provider that the Division of Finance approves, in consultation with the
157 state treasurer, in accordance with Section 26-61a-603; or
158 (B) a financial institution in accordance with Subsection 26-61a-603(4).
159 (3) The department may conduct a face-to-face interview with an applicant for a
160 license that the department evaluates under Subsection (2).
161 (4) (a) The department may designate a medical cannabis pharmacy as a home delivery
162 medical cannabis pharmacy if the department determines that the medical cannabis pharmacy’s
163 operating plan demonstrates the functional and technical ability to:
164 (i) safely conduct transactions for medical cannabis shipments;
165 (ii) accept electronic medical cannabis orders that the state central patient portal
166 facilitates; and
167 (iii) accept payments through:
168 (A) a payment provider that the Division of Finance approves, in consultation with the
169 state treasurer, in accordance with Section 26-61a-603; or
170 (B) a financial institution in accordance with Subsection 26-61a-603(4).
171 (b) An applicant seeking a designation as a home delivery medical cannabis pharmacy
172 shall identify in the applicant’s operating plan any information relevant to the department’s
173 evaluation described in Subsection (4)(a), including:
174 (i) the name and contact information of the payment provider;
175 (ii) the nature of the relationship between the prospective licensee and the payment
176 provider;
177 (iii) the processes of the following to safely and reliably conduct transactions for
178 medical cannabis shipments:
179 (A) the prospective licensee; and
180 (B) the electronic payment provider or the financial institution described in Subsection
181 (4)(a)(iii); and
182 (iv) the ability of the licensee to comply with the department’s rules regarding the

183 secure transportation and delivery of medical cannabis or medical cannabis product to a
184 medical cannabis cardholder.
185 (c) Notwithstanding any county or municipal ordinance, a medical cannabis pharmacy
186 that the department designates as a home delivery medical cannabis pharmacy may deliver
187 medical cannabis shipments in accordance with this chapter.
188 (d) A home delivery medical cannabis pharmacy may not deliver a medical cannabis
189 shipment within a 35-mile radius of a home delivery medical cannabis pharmacy that is located
190 within a county of the third through sixth class.

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