Supplemental (Phase 1)

There are two specific restrictions regarding ownership in an entity that is a TCUP licensee:

• A physician who is registered to prescribe medication in TCUP cannot also have an ownership interest in a dispensing organization.
• A person who has an ownership interest, as sole proprietor, partner, member or owner, cannot also have an ownership interest in another dispensing organization or application for another dispensing organization.

In both these scenarios, the applicant will need to divest themselves from one position or the other in order to remove the conflict. For applications that were submitted during the Phase I 2023 window, as part of their supplemental information, the applicant should include a statement explaining the resolution.

For example, the statement could be:

• Dr. Joe Sample is a registered physician in TCUP. He also holds a 10% ownership interest in the accompanying application. Dr. Sample will voluntarily revoke his registration in CUP and will end his practice of treating CUP patients in order to maintain ownership interest in the entity, should it be granted a license.

For purposes of the competitive selection process, only those individuals who will be involved in operational control of the entity need to be named at this time. Once conditional approval for a license is awarded, the department will conduct background checks as necessary at multiple levels of ownership.

Yes, applicants must demonstrate financial stability in a manner relevant to the application. 

If they are unable to provide the requested information, please submit a statement explaining this.

There are two specific restrictions regarding ownership in an entity that is a TCUP licensee:

• A physician who is registered to prescribe medication in TCUP cannot also have an ownership interest in a dispensing organization.
• A person who has an ownership interest, as sole proprietor, partner, member or owner, cannot also have an ownership interest in another dispensing organization or application for another dispensing organization.

In both these scenarios, the applicant will need to divest themselves from one position or the other in order to remove the conflict. For applications that were submitted during the Phase I 2023 window, as part of their supplemental information, the applicant should include a statement explaining the resolution.

For example, the statement could be:

• Dr. Joe Sample is a registered physician in TCUP. He also holds a 10% ownership interest in the accompanying application. Dr. Sample will voluntarily revoke his registration in TCUP and will end his practice of treating TCUP patients in order to maintain ownership interest in the entity, should it be granted a license.

To ensure statewide access, applicants may either stand up the cultivation site or a satellite location in their assigned Public Health Region. Additionally, according to House Bill 46, a “dispensing organization may not operate more than one satellite location in a public health region … until the dispensing organization operates one satellite location in each public health region.”

We have received several questions related to the process for supplementing Phase I applications. Recognizing that there is concern over applicants from 2023 attempting to take the opportunity to essentially submit a new application, we nevertheless believe targeted supplementation is warranted.

HB46 emphasizes three specific points:

• A refinement of the foundational directive for DPS; from issuing licenses only as necessary to ensure statewide access to issuing licenses in a manner that ensures patient access in each health region;
• Creation of the satellite location for storage and dispensing to patients at a local level;
• Specific admonishment for licensees to stand up operations within 24 months and continue engaged operation within the program.

The language that emphasizes these points are all new additions to Health and Safety Code Chapter 487, through the amendments in HB46; the language in these provisions were not in existence in 2023 when the application window was open. It is for this reason that the Department is allowing a supplement to – not a rewrite or a replacement of – the information provided in 2023.

If RSD staff determines that the supplemental information provided is responsive to one of these new additions under HB46, the information will be allowed and given appropriate weight by the selection committee. If the information is determined to be responsive only to information requested during the 2023 application window, the information will be discarded and only the information provided during the original application window will be considered. 

Only supplemental information should be provided; previous versions of exhibits will be considered. 

The Department will not be considering pickup or satellite locations for Phase 1 or Phase 2 applicants at this time. 

Site control is not required at the time of application.