How To Get A Dispensary License In Texas

Texas is one of the 40-plus states that has enacted some form of medical marijuana law. It is evident that the Texas Compassionate Use Program (TCUP) benefits some patients, but its restrictions on who can use medical cannabis, what types of products are offered, and where those products can be obtained are rather stringent.

Despite the program’s expansion in 2019, there are probably more than a million Texans with serious conditions who could benefit from medical cannabis but are currently unable to access it.

In this blog, we will understand the TCUP, as well as how to apply for a license in Texas:

The Texas Compassionate Use Program (TCUP)

A limited commercial medical cannabis program was established in 2015 after the Texas Legislature approved the Texas Compassionate Use Act was signed. The act  made non-smoking cannabis products containing no more than 0.5% THC and at least 10% CBD available to patients with intractable epilepsy who had been given prescriptions by two doctors who were board-certified in the specialty. It also permitted the cultivation, processing, and sale of cannabis products to registered patients by at least three vertically integrated regulated dispensing businesses.

The state passed House Bill 3703 in 2019, extending the list of conditions that qualify for medical cannabis to include a wider range of epilepsy and seizure disorders, as well as autism, multiple sclerosis, and other incurable neurodegenerative diseases.

While the two-physician prescription requirement was removed by HB 3703, the requirement that patients acquire a prescription from a board-certified specialist in the relevant specialty was still in place. It also changed the definition of low-THC cannabis to keep the 0.5% THC cap but remove the 10% CBD potency restriction. Three vertically integrated dispensing organizations are the only ones to which the Texas Department of Public Safety (DPS) has granted licenses thus far.

What Are Texas’ Cannabis Laws?

Despite changing its position in recent years to permit the legal use of marijuana for medical purposes, Texas has not yet decriminalized marijuana.

The severity of the fines and repercussions for breaking Texas marijuana laws depend on the person’s location at the time of their arrest for marijuana possession. Those who have used marijuana in the past are prohibited from leaving the county while on probation. They must undergo regular drug tests, and are not allowed to drink alcohol or go to bars.

Even for a first offense, the costs of a marijuana conviction, including legal fees, drug testing, probation fines, charges, and court costs, might exceed $5,000.

Can I Apply For A Cannabis Dispensary License In Texas

The Compassionate Use Program dispensing organization license online application is officially open, according to an announcement from the Texas Department of Public Safety’s Regulatory Services Division.

The RSD’s form can be used to submit applications for the new medical marijuana dispensary licenses. The application window will close on April 28

Applicants who previously applied for a cannabis retail license may reapply with an updated application form; there are no application fees for repeat candidates.

The Compassionate Use Program Basics

  • The “Dispensing Organization” license in Texas covers cultivation, processing, and dispensing. Unlike several other states, Texas does not currently provide various levels of licenses. The licensed business in Texas is required to manage the complete seed-to-sale operation, a practice known as “vertical integration.”
  • The Texas Department of Public Safety (“DPS”) is accountable for managing licenses, including its issue, suspension, renewal, and revocation, as well as its director/manager/employee registrations and compliance/enforcement. 
  • Every director, manager, or employee of a dispensary organization is required to apply for and get a registration after passing a criminal background check based on fingerprints.

Licensing Fee Breakup

Application Fee – $7,356

License Fee – $488,520 for 2-years

License Renewal Fee – $318,511 every 2 years thereafter

How To Apply For A License Under The TCUP

  • Complete the application form
  • Produce Proof of Ownership – All franchise tax accounts must be current, and the company must be registered to conduct business in Texas or be a Texas organization. The Texas Secretary of State’s office and the Texas Office of the Comptroller can issue the necessary documentation for this program.
  • Fill out the Form RSD-303 applications for every director, manager, and employee
  • Proof of mandatory general liability insurance with limits of $1,000,000 per occurrence, $2,000,000 general aggregate, and $1,000,000 for product liability, as well as third-party property damage and personal injuries to third parties, including bodily injury, property damage, and product liability.
  • Finally, pay the Application Fee ($7,356)

Bottom Line

To stand out from the competition, the application must include specific details that illustrate the applicant possesses the abilities, expertise, security procedures, and technological know-how required to meet patients’ needs for health and safety. It is also an indication that the applicant adheres to rules, prevents abuse, misuse, and diversion, and sustains operations.

Good luck to all those applying!

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