88R8983 MP-F     By: Moody H.B. No. 4439       A BILL TO BE ENTITLED   AN ACT   relating to the production, sale, distribution, delivery, and   regulation of consumable hemp products; creating a criminal   offense.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter A, Chapter 443, Health and Safety   Code, is amended by adding Section 443.005 to read as follows:          Sec. 443.005.  CONSUMABLE HEMP PRODUCTS ACCOUNT. (a) The   consumable hemp products account is an account in the general   revenue fund administered by the department.          (b)  The account consists of:                (1)  appropriations of money to the account by the   legislature;                (2)  public or private gifts, grants, or donations,   including federal funds, received for the account;                (3)  fees collected under this chapter or under Chapter   431 as it applies to consumable hemp products;                (4)  interest and income earned on the investment of   money in the account;                (5)  penalties for violations of this chapter or   Chapter 431 as it applies to consumable hemp products; and                (6)  funds from any other source deposited in the   account.          (c)  The department may accept appropriations and gifts,   grants, or donations from any source to administer and enforce this   chapter and Chapter 431 as it applies to consumable hemp products.   Money received under this subsection shall be deposited in the   account.          (d)  Money in the account may be appropriated only to the   department for the administration and enforcement of this chapter   and Chapter 431 as it applies to consumable hemp products.          SECTION 2.  Section 443.103, Health and Safety Code, is   amended to read as follows:          Sec. 443.103.  APPLICATION; ISSUANCE.  An individual or   establishment may apply for a license under this subchapter by   submitting an application to the department on a form and in the   manner prescribed by the department.  The application must be   accompanied by:                (1)  the physical address [a legal description] of each   location where the applicant intends to process hemp or manufacture   consumable hemp products [and the global positioning system   coordinates for the perimeter of each location];                (2)  written consent from the applicant or the property   owner if the applicant is not the property owner allowing the   department, the Department of Public Safety, and any other state or   local law enforcement agency to enter onto all premises where hemp   is processed or consumable hemp products are manufactured to   conduct a physical inspection or to ensure compliance with this   chapter and rules adopted under this chapter;                (3)  any fees required by the department to be   submitted with the application; and                (4)  any other information required by department rule.          SECTION 3.  Subchapter C, Chapter 443, Health and Safety   Code, is amended by adding Section 443.106 to read as follows:          Sec. 443.106.  EXPEDITED LICENSING PROCESS.  The department   by rule may provide an expedited licensing process for the   purchaser of a business that requires a license.          SECTION 4.  Section 443.151(c), Health and Safety Code, is   amended to read as follows:          (c)  Before material extracted from hemp by processing is   sold as, offered for sale as, or incorporated into a consumable hemp   product, the material must be tested, as required by the executive   commissioner, to determine:                (1)  the presence of harmful microorganisms; and                (2)  the presence or quantity of:                      (A)  any residual solvents used in processing, if   applicable; [and]                      (B)  any synthetic cannabinoid; and                      (C)  any other substance prescribed by the   department.          SECTION 5.  Section 443.152, Health and Safety Code, is   amended by adding Subsection (d) to read as follows:          (d)  The executive commissioner by rule may exclude a   substance that is generally recognized as having no risk of   contaminating a finished consumable hemp product, including a   microorganism or other substance that is inevitably destroyed or   removed while processing or manufacturing the product, from the   testing required under Section 443.151.          SECTION 6.  Section 443.201, Health and Safety Code, is   amended by adding Subsection (c) to read as follows:          (c)  A person may transport and deliver a consumable hemp   product to a consumer who purchased the product in compliance with   this chapter. The person transporting and delivering the   consumable hemp product shall maintain at all times while the   consumable hemp product is in the person's possession a record   sufficient to demonstrate that the transaction complies with this   chapter. The person transporting and delivering the consumable   hemp product is not required to:                (1)  obtain a license under Section 443.101, unless the   person processes or manufactures the product delivered; or                (2)  register under Section 443.2025, unless the person   sells the product delivered.          SECTION 7.  Section 443.2025, Health and Safety Code, is   amended by amending Subsections (b), (d), and (f) and adding   Subsection (d-1) to read as follows:          (b)  A person may not sell or distribute consumable hemp   products [containing cannabidiol at retail] in this state, other   than products generally recognized as safe by the United States   Food and Drug Administration, unless the person registers with the   department each location owned, operated, or controlled by the   person at which those products are sold. A person is not required   to register a location associated with an employee or independent   contractor described by Subsection (d).          (d)  Except as provided by Subsection (d-1), a [A] person is   not required to register with the department under Subsection (b)   if the person is:                (1)  an employee of a registrant; or                (2)  an independent contractor of a registrant who   sells the registrant's products to consumers [at retail].          (d-1)  A person is required to register with the department   under Subsection (b) if the person, as an employee or independent   contractor of a person located outside this state who is not a   registrant, sells or distributes products covered by Subsection (b)   in this state.          (f)  The department by rule may adopt a registration fee   schedule that establishes reasonable fee amounts for the   registration of:                (1)  a single location at which consumable hemp   products [containing cannabidiol] are sold; and                (2)  multiple locations at which consumable hemp   products [containing cannabidiol] are sold under a single   registration.          SECTION 8.  Section 443.204, Health and Safety Code, is   amended to read as follows:          Sec. 443.204.  RULES RELATED TO SALE OF CONSUMABLE HEMP   PRODUCTS. (a) Rules adopted by the executive commissioner   regulating the sale of consumable hemp products must to the extent   allowable by federal law reflect the following principles:                (1)  hemp-derived cannabinoids, including cannabidiol,   are not considered controlled substances or adulterants;                (2)  products containing one or more hemp-derived   cannabinoids, such as cannabidiol, intended for ingestion are   considered foods, not controlled substances or adulterated   products;                (3)  consumable hemp products must be packaged and   labeled in the manner provided by Section 443.205; and                (4)  the processing or manufacturing of a consumable   hemp product for smoking is prohibited.          (b)  The department shall propose any rules necessary to   incorporate and implement a change to this chapter, a federal   statute, or a federal regulation not later than the 90th day after   the effective date of the change. The department may also adopt the   proposed rules as emergency rules. If a change to this chapter, a   federal statute, or a federal regulation creates a conflict with   department rules, the amended chapter, statute, or regulation   controls until the department's rules incorporating and   implementing the change take effect.          SECTION 9.  Section 443.205(a), Health and Safety Code, is   amended to read as follows:          (a)  Before a consumable hemp product, including hemp plant   material, that contains or is marketed as containing hemp-derived   [more than trace amounts of] cannabinoids may be distributed or   sold, the product must be:                (1)  labeled in the manner provided by this subchapter,   including [section with] the following information:                      (A) [(1)]  batch or lot identification number;                      (B) [(2)]  batch or lot date;                      (C) [(3)]  product name;                      (D) [(4)]  a uniform resource locator (URL) that   provides or links to a certificate of analysis for the product or   each hemp-derived ingredient of the product;                      (E) [(5)]  the name of the product's   manufacturer; and                      (F) [(6)]  a certification that the delta-9   tetrahydrocannabinol concentration of the product or each   hemp-derived ingredient of the product is not more than 0.3   percent; and                (2)  prepackaged or placed at the time of sale in   packaging or a container that is:                      (A)  tamper-evident;                      (B)  child-resistant; and                      (C)  if the product contains multiple servings or   consists of multiple products purchased in one transaction,   resealable in a manner that allows the child-resistant mechanism to   remain intact.          SECTION 10.  Subchapter E, Chapter 443, Health and Safety   Code, is amended by adding Sections 443.2055, 443.2056, 443.208,   443.209, and 443.210 to read as follows:          Sec. 443.2055.  CONSUMABLE HEMP PRODUCT AND PACKAGING THAT   IS ATTRACTIVE TO CHILDREN PROHIBITED. (a) An edible consumable   hemp product that contains or is marketed as containing   hemp-derived cannabinoids may not be in the shape of a human,   animal, fruit, or cartoon or in another shape that is attractive to   children.          (b)  The packaging of an edible consumable hemp product that   contains or is marketed as containing hemp-derived cannabinoids may   not:                (1)  be in the shape of a human, animal, fruit, or   cartoon or in another shape that is attractive to children; or                (2)  depict an image of a human, animal, fruit, or   cartoon or another image that is attractive to children.          (c)  In this section, a cartoon includes a depiction of an   object, person, animal, creature, or any similar caricature that:                (1)  uses comically exaggerated features and   attributes;                (2)  assigns human characteristics to animals, plants,   or other objects; or                (3)  has unnatural or extra-human abilities, such as   imperviousness to pain or injury, x-ray vision, tunneling at very   high speeds, or transformation.          Sec. 443.2056.  PACKAGING THAT IS MISLEADING PROHIBITED.   The packaging and labeling of consumable hemp products, including   hemp plant material, that contain or are marketed as containing   hemp-derived cannabinoids may not depict any statement, artwork, or   design that would likely mislead a person to believe the package   does not contain a hemp-derived cannabinoid.          Sec. 443.208.  SALE OF CONSUMABLE HEMP PRODUCTS TO PERSONS   YOUNGER THAN 21 YEARS OF AGE PROHIBITED; PROOF OF AGE REQUIRED.  (a)     A person commits an offense if the person, with criminal   negligence, sells a consumable hemp product, including hemp plant   material, that contains or is marketed as containing hemp-derived   cannabinoids, to a person who is younger than 21 years of age.          (b)  An employee of the owner of a store in which consumable   hemp products, including hemp plant material, that contain or are   marketed as containing hemp-derived cannabinoids, are sold at   retail is criminally responsible and subject to prosecution for an   offense under this section that occurs in connection with a sale by   the employee.          (c)  An offense under this section is a Class C misdemeanor.          (d)  It is a defense to prosecution under Subsection (a) that   the person to whom the consumable hemp product was sold presented to   the defendant apparently valid proof of identification.          (e)  A proof of identification satisfies the requirements of   Subsection (d) if it contains a physical description and photograph   consistent with the person's appearance, purports to establish that   the person is 21 years of age or older, and was issued by a   governmental agency. The proof of identification may include a   driver's license issued by this state or another state, a passport,   or an identification card issued by a state or the federal   government.          (f)  It is an exception to the application of Subsection (a)   that the person to whom the consumable hemp product was sold is at   least 18 years of age and presented at the time of purchase a valid   military identification card of the United States military forces   or the state military forces.          (g)  A person who owns, manages, or operates an Internet   website that contains an e-commerce platform on which consumable   hemp products, including hemp plant material, that contain or are   marketed as containing hemp-derived cannabinoids are sold at retail   or offered for retail sale must:                (1)  require a consumer accessing the e-commerce   platform to state affirmatively that the person is at least 21 years   of age; and                (2)  prior to completing a purchase on the e-commerce   platform, verify a consumer's age by:                      (A)  using a reliable online age verification   service; or                      (B)  obtaining and examining a copy of a valid   government-issued identification.          Sec. 443.209.  SALE OF CERTAIN CONSUMABLE HEMP PRODUCTS TO   PERSONS YOUNGER THAN 21 YEARS OF AGE. (a) The department by rule   shall adopt a list of hemp-derived cannabinoids that are exempt   from the requirements of Sections 443.205(a)(2), 443.2055, and   443.208.          (b)  The list adopted under Subsection (a):                (1)  must include cannabidiol; and                (2)  may include cannabinoid quantity thresholds.          (c)  Notwithstanding Subsection (a), Sections   443.205(a)(2), 443.2055, and 443.208 apply to any consumable hemp   product that contains:                (1)  a hemp-derived cannabinoid not included on the   list adopted under Subsection (a); or                (2)  a quantity of a hemp-derived cannabinoid that   exceeds the applicable threshold established under Subsection   (b)(2).          Sec. 443.210.  APPLICABILITY OF PENALTIES TO CERTAIN   RETAILERS. Notwithstanding another provision of this subchapter, a   retailer of consumable hemp products is not liable for a penalty   under this subchapter if the retailer proves by a preponderance of   the evidence that the violation was unintentional and due to the   retailer's good faith reliance on a representation made by a   manufacturer, processor, or distributor of consumable hemp   products.          SECTION 11.  Notwithstanding any other law, a retailer may   possess, transport, or sell a consumable hemp product that becomes   part of the retailer's inventory before rules required to implement   the changes in law made by this Act become effective unless the   product:                (1)  is unsafe for consumption based on the presence or   quantity of heavy metals, pesticides, harmful microorganisms, or   residual solvents; or                (2)  has a delta-9 tetrahydrocannabinol concentration   that exceeds the concentration allowed by federal law for hemp.          SECTION 12.  Not later than December 1, 2023, the Department   of State Health Services shall adopt the list of hemp-derived   cannabinoids that may be sold to persons younger than 21 years of   age as required by Section 443.209, Health and Safety Code, as added   by this Act.          SECTION 13.  This Act takes effect September 1, 2023.