Bill Summary for S 711 (2021-2022)

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Summary date: 

Aug 26 2021

Bill Information:

View NCGA Bill Details2021
Senate Bill 711 (Public) Filed Wednesday, April 7, 2021
Intro. by Rabon, Lee, Lowe.

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Bill summary

Senate committee substitute to the 4th edition makes the following changes.

Revises new Article 5H, the NC Compassionate Care Act, as follows. Adds to the Article's legislative purposes stated to include (1) prioritizing the protection of public health and safety in the creation of a system for the cultivation, processing, and selling of medical cannabis and (2) ensuring that the regulatory system created by the Article be nimble and able to respond quickly to changes in the rapidly evolving cannabis industry. 

Makes the following revisions to the Article's defined terms. Adds to the defined term physician to include a new requirement that the licensed physician have a valid DEA registration as well as an explicit requirement for the physician to have completed continuing medical education courses as required by new GS 90-113.114, as enacted. Adds to the indications that must be included in a physician's signed written certification: (1) the physician's DEA number; (2) the physician's national provider identification number, if applicable; and (3) any other information required by the Medical Cannabis Production Commission (Commission). 

Revises the membership of the Compassionate Use Advisory Board (Advisory Board), now consisting of 11 rather than 13 members. Now includes 7 gubernatorially appointed members, including a licensed medical doctor or doctor of osteopathy, a licensed medical doctor or doctor of osteopathy specializing in primary care, and a medical doctor or doctor of osteopathy board-certified to practice addiction medicine (replacing previous member criteria requiring a physician specializing in pain management, a general physician, a physician specializing in osteopathic medicine, and a physician who is board-certified to practice addiction medicine). No longer includes a gubernatorially appointed member representing a licensed supplier. Adds a new provision specifying that the Department of Health and Human Services (DHHS) is responsible for all administrative support and other services required by the Advisory Board. Makes technical changes. 

Revises the continuing education requirements for physicians and adds to physician restrictions as follows. Now requires a physician to complete a 10-hour continuing education course on prescribing medical cannabis before providing a written certification, and completing a three-hour supplemental continuing medical education course thereafter in any year in which the physician issues a written certification (replacing the previous requirement for a three-hour continuing medical education course on cannabis and an annual one-hour supplemental medical education course thereafter). Now describes required topics of the initial 10-hour continuing education course. Requires a physician to issue a written certification only for a patient with whom the physician has a bona fide physician-patient relationship. Adds a new requirement for a physician to have a physical office in the state in which to conduct in-person examinations. Now requires physicians to assess each patient for the initial and ongoing risk of mental health and substance abuse disorders and for the development of mental health and substance use disorders. Requires physicians to issue a written certification in the electronic cannabis registry database (rather than registering a written certification in the database electronically). Adds to the required patient education upon initial written certification and annually thereafter, education on the risk of impairment while operating a motor vehicle under the influence of cannabis or cannabis-infused products. Replaces the provisions regarding required reevaluations with the following. Now requires a physician to reevaluate a patient for whom the physician has issued a written certification as frequently as necessary to determine the efficacy of the use of cannabis as a treatment for the patient's particular medical condition, the appropriateness of the delivery method and dosage included in the written certification, and any adverse side effects, with reevaluation at least quarterly in the first year and at least annually thereafter. Requires the physician to check the patient's prescription history in the Controlled Substances Reporting System when renewing a written certification (similar to previous requirements). Authorizes the Commission to set a shorter interval for mandatory patient re-evaluations and set requirements for in-person physical examination during re-evaluations. Now requires physicians to update the medical cannabis registry database within three days (was, seven days) after any change is made to the original written certification. Adds a new directive for DHHS to monitor physician written certifications in the medical cannabis registry database for practices that could facilitate diversion or misuse of cannabis or other harm and refer cases to the NC Medical Board and the State Bureau of Investigation as appropriate. Authorizes DHHS to conduct outreach and education to physicians who represent statistical outliers in any manner of their issuing of written certifications. Deletes the prohibition against physicians who provide written certifications to qualified patients from being employed by or have any direct or indirect economic interest in a supplier or cannabis testing laboratory. Now bars a physician from advertising on the site of a medical cannabis center. Adds new authority for the Commission to adopt rules regarding physicians to ensure the protection of individuals with a debilitating medical condition, the prevention of diversion, and the integrity of the medical cannabis system. 

Regarding registry identification cards, adds new language limiting an individual to serving as a designated caregiver for up to two qualified patients. Authorizes the Commission to create exceptions by rule for the limit on the number of designated caregivers a qualified patient may have and exceptions to the limit on the number of qualified patients a designated caregiver can serve. Also authorizes the Commission to establish rules to allow a facility to serve as a designated caregiver. 

Regarding the medical cannabis registry database, deletes the provisions requiring DHHS to monitor the database and inform the Attorney General's Office of any findings of patterns of written certifications that are unusual and requiring the AG's office to determine if they should be reported to the State Bureau of Investigation and the appropriate sheriff for investigation of possible state or federal violations. Makes a technical correction to an internal cross-reference.

Now requires at least one (was, two) of the four medical cannabis centers a supplier can own and operate under the Article to be located in Tier 1 counties. Adds new restrictions to prohibit Commission members from owning, operating, having a direct or indirect financial interest in, or being employed by a licensed supplier or a licensed lab, or their subcontractors. Bars Commission members from being a qualified patient, a designated caregiver, or a physician who issues written certifications. 

Adds the following relating to the medical cannabis supply system the Commission must establish. Requires the Commission to adopt rules to regulate the supply system, to include without limitation 14 enumerated components including physical plant requirements, odor control and mitigation, security, sanitation and workplace safety conditions, reportable events, procedures for mandatory and voluntary recall of unsafe cannabis or cannabis-infused products, and transportation of cannabis and cannabis-infused products. Directs the Commission to establish, maintain, and control a computer software tracking system that traces cannabis from seed to sale and allows real time, 24-hour access by DHHS and the Commission to data from all production facilities, medical cannabis centers, and testing labs. Details further requirements of the tracking system. Explicitly requires medical cannabis suppliers to use the tracking system or integrate its own system with the system established by the Commission. Authorizes the Commission to contract to establish the tracking system, so long as the vendor does not have a direct or indirect financial interest in a medical cannabis supplier or testing lab. Makes organizational changes. 

Replaces the requirements of a supplier license application regarding required documentation demonstrating that the applicant possesses certain skills and experience, now requiring documentation demonstrating (1) requisite expertise in controlled environment agriculture and the ability to engage in growing or processing of cannabis, as well as product development, quality control, and inventory management of cannabis meeting standards that the Commission specifies by rule; (2) technical and technological ability to cultivate, produce, and distribute medical cannabis in a manner that meets Commission standards for production consistency and safe handling; and (3) ability to secure cannabis production, testing, resources, transportation, and personnel to operate as a safe and secure supplier in compliance with all state regulations in which the applicant has prior experience. Adds to the required components of the supplier license application, evidence of compliance with applicable laws and regulations of another state in which the applicant or proposed owners, officers, board members, or managers have engaged in medical or adult use of cannabis operations outside of the state. Now requires a supplier to begin selling cannabis and cannabis-infused products in medical cannabis centers within 270 days (was, within 180 days) of initiating cultivation. Makes technical corrections to internal cross-references in the provisions governing supplier restrictions. 

Now requires licensed suppliers to submit monthly rather than quarterly reports to DHHS on all financial transactions. Adds the following authorities. Authorizes DHHS to impose a fine of up to $10,000 on a supplier for any of ten enumerated violations, including endangering the health, safety, or security of a qualified patient; improperly disclosing confidential information of a qualified patient; and willfully impeding or obstructing an employee or agent of DHHS in the furtherance of their official duties. Clarifies that this fine is in addition to any other penalties imposed under the Article. Adds that multiple incidents resulting in more than one violation of the same provision can result in a fine for each violation up to the maximum. Specifies that each day a violation continues constitutes a distinct violation. Authorizes the Commission to establish criteria for fine amounts. Permits suppliers to appeal fines to the Commission. Requires the Commission to adopt rules governing the appeal of DHHS fines. Authorizes the Commission to require an audit of the financial transactions of a supplier to be conducted by an independent certified accountant, in its discretion. Specifies that DHHS reserves the right to select the accountant to be used. Makes costs associated with the audit the responsibility of the supplier. 

Modifies and adds to the restrictions set forth for medical cannabis centers. Previously, required an individual to be 18 years of age or older to enter a medical cannabis center unless the individual is a registry identification cardholder. Now provides that entry is strictly limited to qualified patients, designated caregivers, and persons whose job duties require their presence at the center, including employees and contractors of the center and state employees with an inspection or regulatory role. Authorizes the Commission to set other limitations necessary to protect the public. Adds a new requirement for medical cannabis center employees to be 21 or older. Adds a new prohibition against consuming cannabis or cannabis-infused products on the site of the medical cannabis center. Prohibits cannabis, cannabis-infused products, and paraphernalia from being visible to the public from the outside of the medical cannabis center. Authorizes the Commission to establish rules to allow the delivery of cannabis, cannabis-infused products, and paraphernalia used to administer cannabis products by medical cannabis centers to the home of a qualified patient or designated caregiver in a manner that ensures public safety, the safety of persons delivering the products, and the prevention of diversion. 

Changes the required content of the rules DHHS is directed to adopt regarding the testing of cannabis and cannabis-infused products. Now requires the adoption of standards for testing cannabis and cannabis-infused products to specifically include active ingredient analyses; potency analyses; homogeneity requirements; and specifying of prohibited concentrations of heavy metals, pesticides, residual solvents, microbiological contaminants, mycotoxins, and other contaminants that are injurious to human health (was, including specifying prohibited concentrations of heavy metals, pesticides, microbes, and other contaminants that are injurious to human health only). Adds that the standards and requirements necessary for an independent testing lab to be licensed must also include such for the renewal, suspension, and revocation of the license. Now requires inclusion of the amount of the licensing fee payable to DHHS by an independent testing lab (was, a fee schedule for independent testing labs). 

Expands the advertising restrictions by adding the following. Enumerates eight prohibited activities of medical cannabis suppliers and medical cannabis centers, including (1) distributing handbills in public areas; (2) advertising on television, radio, print, digital, or electronic media; (3) publicly sponsoring sporting events, concerts, or other community or cultural events; and (4) selling or giving away promotional products such as t-shirts or any other items containing the name of the medical cannabis center. Adds authority for the Commission to take against against a licensee or designated retailer who engages in non-conforming signage or advertising, including specifying a period of time by which the licensee or designated retailer must cease or remove the non-compliant signage or advertising or risk a fine, suspension, or both. Makes organizational changes.

Adds to the label requirements for cannabis and cannabis-infused products sold that medical cannabis centers must adhere to, adding to the required information the batch number and the harvest number from which cannabis originates, the name of the qualified patient, the name of the physician who issued the written certification, and the recommended dose according to the written certification. 

Regarding the NC Cannabis Research Program required to be created by UNC, adds authority for the UNC System to possess, transport, store, test, and dispose of cannabis as necessary to conduct scientific research, subject to requirements of the Commission.

Changes the nine required components of the annual reports required of DHHS regarding the effectiveness of the medical cannabis program operated under the Article. Now includes (1) the number of written certifications provided by physicians and the percentage distribution by areas of physician specialty; (2) the nature and percentage distribution of delivery methods of cannabis and cannabis-infused products used and the average daily doses dispensed per delivery method; and (3) the number of physicians providing written certifications for qualifying patients and the percentage distribution of their areas of specialty (previously, did not include the percentage distribution of their areas of specialty). No longer includes a requirement for the report to include the efficacy of or satisfaction with cannabis and cannabis-infused products on a yes-no questionnaire as submitted by qualifying patients in a voluntary, anonymous survey, which may be conducted online or through medical cannabis centers. Instead of requiring the annual reports to begin in 2022, now requires reports beginning in the first year in which cannabis or cannabis-infused products are sold in medical cannabis centers. Authorizes DHHS to develop a methodologically valid survey to be taken by qualified patients to determine the effects of the use of medical cannabis. Allows the Commission to require completion of the survey by each patient dispensed medical cannabis in order to assure the methodological validity of survey results and avoid selection bias. Requires patient survey results to be reported with no individually identifying information. 

Modifies the directives regarding the initial appointments made to the Advisory Board under new GS 90-113.113 to reflect the revised membership of the Advisory Board. 

Eliminates the uncodified provision requiring the NC Medical Board to approve a continuing education medical course and supplemental medical education course on cannabis and cannabis-infused products within 30 days of the date the act becomes law.