NY State Senate Bill 2015-S7250

Senate Bill S7250

2015-2016 Legislative Session

Relates to organizations registered to sell, deliver, distribute or dispense medical marihuana

download bill text pdf

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 11, 2016	referred to health

2015-S7250 (ACTIVE) - Details

See Assembly Version of this Bill:: A9507
Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §§3364 & 3365, Pub Health L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S1088
2019-2020: S1025

2015-S7250 (ACTIVE) - Summary

Relates to permitting registered organizations to sell, deliver, distribute or receive medical marihuana to or from another registered organization.

2015-S7250 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S7250

 TITLE OF BILL :  An act to amend the public health law, in relation
to organizations registered to sell, deliver, distribute or dispense
medical marihuana

 PURPOSE :

To allow registered organizations to contract for facilities,
equipment, or services; and repeal the requirement that registered
organizations be vertically integrated.

 SUMMARY OF PROVISIONS :

Section 1: Amends subdivisions 4, 6, and 13 and adds new subdivisions
14 and 15 to section 3364 of Public Health Law. Allows a registered
organization to contract with persons or entities.to provide
facilities, equipment, or services related to the registered
organization's functions or activities. All laws applicable to the
registered organization shall apply to the contractor. Allows a
registered organization to sell, deliver, distribute, or receive
medical marihuana to or from another registered organization.

Section 2: Amends Subdivisions 1, 3, 8 and 9 of section 3365 of Public
Health Law to remove references capping the number of registered
organizations at five and dispensaries per organization at four.

Section 3: Effective date.

 JUSTIFICATION :

The Department of Health has authorized just five registered
organizations (R0s), with four dispensaries each, to provide medical
marihuana.  Nor are the registered organizations allowed to contract
out any part of the production and distribution processes. They must
own every part of the operation from growing to dispensing, a system
of mandatory vertical integration that the State would normally
discourage. Almost every element of the manufacturing/retailing
economy operates through companies that are not vertically integrated
and includes contracting out segments of operations.

This places significant burdens on the RO business model. For example,
ROs produce medical marihuana in one location and distributes it
else-where to be dispensed, but cannot simply ship its product with a
shipper (no matter how secure) like any other manufacturer. Instead,
the RO must own the delivery trucks itself and directly employ the
drivers. This bill allows the RO to contract out some of its functions
while ensuring that all laws applicable to the RO apply to the
contractors as well.

The bill removes both the limit on the numbers of ROs and dispensaries
and the requirement that ROs be vertically integrated.

In order to allow non-integration, the bill allows a registered
organization to sell, deliver, distribute, or receive medical
marihuana to or from another registered organization. There are many
strains of medical marihuana targeting different diseases and age
groups. A patient in a rural area may be certified for a particular
strain only to discover that no dispensary in the region carries it.
Allowing ROs to sell, deliver, or distribute to, or receive medical
marihuana from other ROs will help get critically important medicine
to patients who would otherwise struggle with long-distance travel and
geographic disparities.



This bill is a significant step towards expanding patient access by
ensuring adequate supply and statewide availability of medical
marihuana.

 LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
Immediately.

2015-S7250 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7250

                            I N  S E N A T E

                             April 11, 2016
                               ___________

Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health  law,  in  relation  to  organizations
  registered to sell, deliver, distribute or dispense medical marihuana

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions 4, 6 and 13 of  section  3364  of  the  public
health  law, as added by chapter 90 of the laws of 2014, are amended and
two new subdivisions 14 and 15 are added to read as follows:
  4. (a) A registered organization may lawfully, in  good  faith,  sell,
deliver, distribute or dispense medical marihuana to a certified patient
or designated caregiver upon presentation to the registered organization
of  a  valid  registry identification card for that certified patient or
designated caregiver. When presented with  the  registry  identification
card, the registered organization shall provide to the certified patient
or designated caregiver a receipt, which shall state: the name, address,
and  registry  identification number of the registered organization; the
name and registry identification number of the certified patient and the
designated caregiver (if any); the date  the  marihuana  was  sold;  any
recommendation or limitation by the practitioner as to the form or forms
of  medical  marihuana or dosage for the certified patient; and the form
and the quantity of medical marihuana sold. The registered  organization
shall  retain a copy of the registry identification card and the receipt
for six years.
  (b) The [proprietor of a] registered organization shall file or  cause
to  be  filed any receipt and certification information with the depart-
ment by electronic means on a real time basis as the commissioner  shall
require by regulation. When filing receipt and certification information
electronically  pursuant to this paragraph, the proprietor of the regis-
tered  organization  shall  dispose  of  any   electronically   recorded
prescription  information  in  such  manner as the commissioner shall by
regulation require.
  6. When a registered  organization  sells,  delivers,  distributes  or
dispenses  medical  marihuana to a certified patient or designated care-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD13605-01-6

S. 7250                             2

giver, it shall provide to that individual a safety insert,  which  will
be  developed  and  approved by the commissioner and include, but not be
limited to, information on:
  (a) methods for administering medical marihuana in individual doses,
  (b) any potential dangers stemming from the use of medical marihuana,
  (c) how to recognize what may be problematic usage of medical marihua-
na  and  obtain appropriate services or treatment for problematic usage,
and
  (d)  other  information  as  determined   by   the   commissioner   IN
REGULATIONS.
  13.  The  commissioner  is  authorized to make [rules and] regulations
restricting the advertising and marketing of  medical  marihuana,  which
shall  be consistent with the federal regulations governing prescription
drug advertising and marketing.
  14. A REGISTERED ORGANIZATION MAY CONTRACT WITH A PERSON OR ENTITY  TO
PROVIDE FACILITIES, EQUIPMENT OR SERVICES THAT ARE PART OF OR INCIDENTAL
TO  THE  REGISTERED  ORGANIZATION'S  FUNCTIONS  OR ACTIVITIES UNDER THIS
SECTION. ALL LAWS AND REGULATIONS APPLICABLE TO THE REGISTERED ORGANIZA-
TION SHALL APPLY TO THE CONTRACT. THE REGISTERED ORGANIZATION AND  OTHER
PARTIES  TO  THE  CONTRACT SHALL EACH BE RESPONSIBLE AND ACCOUNTABLE FOR
COMPLIANCE WITH SUCH  LAWS  AND  REGULATIONS  UNDER  THE  CONTRACT.  THE
COMMISSIONER MAY MAKE REGULATIONS CONSISTENT WITH THIS TITLE RELATING TO
CONTRACTS AND PARTIES TO CONTRACTS UNDER THIS SUBDIVISION.
  15.  A  REGISTERED  ORGANIZATION  MAY  LAWFULLY,  IN GOOD FAITH, SELL,
DELIVER, OR DISTRIBUTE MEDICAL MARIHUANA TO  A  REGISTERED  ORGANIZATION
AND  MAY  ACQUIRE  MEDICAL  MARIHUANA FROM A REGISTERED ORGANIZATION, IN
ACCORDANCE WITH THE REGISTRATION OF BOTH REGISTERED ORGANIZATIONS.
  S 2. Subdivisions 1, 3, 8 and 9 of section 3365 of the  public  health
law,  as added by chapter 90 of the laws of 2014, are amended to read as
follows:
  1. Application for initial registration. (a) An applicant  for  regis-
tration  as a registered organization under section thirty-three hundred
sixty-four of this title shall include such information prepared in such
manner and detail as the commissioner may  require,  including  but  not
limited to:
  (i) a description of the activities in which it intends to engage as a
registered organization;
  (ii) that the applicant:
  (A) is of good moral character;
  (B)  possesses or has the right to use sufficient land, buildings, and
other premises (which shall be specified in the application) and  equip-
ment  to  properly  carry on the activity OR ACTIVITIES described in the
application, or in the alternative posts a bond of  not  less  than  two
million dollars;
  (C)  is  able  to  maintain  effective security and control to prevent
diversion, abuse, and other illegal conduct relating to the marihuana;
  (D) is able to comply with all applicable state laws  and  regulations
relating  to  the  activities  in  which  it intends to engage under the
registration;
  (iii) that the applicant has entered into a labor peace agreement with
a bona-fide labor organization that is actively engaged in  representing
or attempting to represent the applicant's employees. The maintenance of
such  a  labor peace agreement shall be an ongoing material condition of
certification.
  (iv) the applicant's status under subdivision one of  section  thirty-
three hundred sixty-four of this title; and

S. 7250                             3

  (v)  the  application  shall  include  the name, residence address and
title of each of the officers and directors and the name  and  residence
address  of any person or entity that is a member of the applicant. Each
such person, if an individual, or lawful representative if a legal enti-
ty, shall submit an affidavit with the application setting forth:
  (A)  any  position of management or ownership during the preceding ten
years of a ten per centum or greater interest  in  any  other  business,
located in or outside this state, manufacturing or distributing drugs;
  (B)  whether  such person or any such business has been convicted of a
felony or had a registration or license  suspended  or  revoked  in  any
administrative or judicial proceeding; and
  (C) such other information as the commissioner may reasonably require.
  3. Granting of registration. (a) The commissioner shall grant a regis-
tration  or  amendment to a registration under this section if he or she
is satisfied that:
  (i) the applicant will be able to maintain effective  control  against
diversion of marihuana;
  (ii)  the  applicant  will be able to comply with all applicable state
laws;
  (iii) the applicant and its officers are ready, willing  and  able  to
properly carry on the manufacturing or distributing activity for which a
registration is sought;
  (iv)  the applicant possesses or has the right to use sufficient land,
buildings and equipment to properly carry on the activity OR  ACTIVITIES
described in the application;
  (v)  it  is  in the public interest that such registration be granted;
the commissioner may consider whether the number of registered organiza-
tions in an area will be adequate or excessive to reasonably  serve  the
area;
  (vi) the applicant and its managing officers are of good moral charac-
ter;
  (vii)  the  applicant  has entered into a labor peace agreement with a
bona-fide labor organization that is actively engaged in representing or
attempting to represent the applicant's employees; and
  (viii) the applicant satisfies any other conditions as  determined  by
the commissioner.
  (b)  If the commissioner is not satisfied that the applicant should be
issued a registration, he or she shall notify the applicant  in  writing
of  those factors upon which further evidence is required. Within thirty
days of the receipt of such notification, the applicant may submit addi-
tional material to the commissioner or demand a hearing, or both.
  (c) The fee for a registration under this section shall be  a  reason-
able  amount  determined  by  the  department  in regulations; provided,
however, if the registration is issued for a  period  greater  than  two
years the fee shall be increased, pro rata, for each additional month of
validity.
  (d)  Registrations  issued  under this section shall be effective only
for the registered organization and shall specify:
  (i) the name and address of the registered organization;
  (ii) which activities of a registered organization  are  permitted  by
the registration;
  (iii)  the  land,  buildings  and  facilities that may be used for the
permitted activities of the registered organization; and
  (iv) such other  information  as  the  commissioner  shall  reasonably
provide to assure compliance with this title.

S. 7250                             4

  (e)  Upon application of a registered organization, a registration may
be amended to allow the registered organization to relocate  within  the
state  or  to add or delete permitted registered organization activities
or facilities. The fee for such amendment shall  be  two  hundred  fifty
dollars.
  8.  The  department  shall  begin issuing registrations for registered
organizations as soon as practicable after the [certifications]  CERTIF-
ICATION  required  by  section thirty-three hundred sixty-nine-b of this
title [are] IS given.
  9. The commissioner shall register  [no  more  than  five]  registered
organizations [that manufacture medical marihuana with no more than four
dispensing  sites wholly owned and operated by such registered organiza-
tion] AND FACILITIES TO PROMOTE REASONABLE ACCESS TO  MEDICAL  MARIHUANA
IN  THE INTEREST OF CERTIFIED PATIENTS AND THE PUBLIC.  The commissioner
shall ensure that [such] registered organizations and  dispensing  sites
are  geographically  distributed  across the state AND SHALL NOT REQUIRE
THAT DISPENSING SITES BE OWNED OR OPERATED BY THE  REGISTERED  ORGANIZA-
TION  LICENSED  TO  MANUFACTURE  MEDICAL  MARIHUANA. [The commission may
register additional registered organizations.]
  S 3. This act shall take effect immediately; provided that the  amend-
ments  to  title 5-a of article 33 of the public health law made by this
act shall not affect the expiration and repeal of such title  and  shall
expire and be deemed repealed therewith.

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