HB 2 — CANNABIS REGULATION ACT

b e d s º o t 17n G.= .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 3 - e a n e d r e l u [ A d tetrahydrocannabinols or other substances from cannabis by extraction methods approved by the division;

"cannabisand»HJC flowers"(2) meansdoes onlynot include the flowersweight of aany wother lingredient ncombined dwith 18 cannabis plant;extract to prepare topical or oral administrations, food, drink or another product;

=G. = 19 a l H.

"cannabis flowers" means only the flowers of a cannabis plant;

H.

i a e r 20 (1) manufactures cannabis products;

a t m m 21 (2) packages cannabis products;

d r e 22 (3) has cannabis products tested by a cannabis c e s k 23 testing laboratory;

or e a n b 24 (4) purchases, acquires, sells or transports u [ wholesale cannabis products to other cannabis establishments;

.221014.5GLG - 4 - I.

h g J.

"cannabis producer microbusiness" means a o t h cannabis producer at a single licensed premises that possesses g e i k no more than two hundred total mature cannabis plants at any h r i s one time;

h K.

"cannabis product" means a product that is or , t e u g that contains cannabis or cannabis extract, including edible or e b l e e h topical products that may also contain other ingredients;

n d d i = = o h L.

"cannabis research laboratory" means a facility l ] b d i a º e that produces or possesses cannabis products and all parts of er ti 17= r the plant genus Cannabis for the purpose of studying cannabis wt le nw d 18m a n o cultivation, characteristics or uses;

=d =m 19: a l M.

"cannabisb retailer"e meansd as personº thato sellst in a= e.221014.5GLGAIC rApril 201, cannabis2021 products(3:02pm) tos qualifiedk patients,m primarye caregivers,- 4 - e a tn me md 21r reciprocale participantsl oru directly[ toA consumers;d M.

d"cannabis rretailer" emeans 22a N.person that sells cannabis products to qualified patients, primary caregivers, reciprocal participants or directly to consumers;

"cannabisN. server permit" means an authorization c e s k 23 that allows a person to directly offer, sell or serve cannabis e a n b 24 or cannabis products as part of commercial cannabis activity in u [ a cannabis consumption area;

.221014.5GLG"cannabis -server 5permit" -means O.an authorization that allows a person to directly offer, sell or serve cannabis or cannabis products as part of commercial cannabis activity in a cannabis consumption area;

O.

(1) means the cultivation, production, possession, manufacture, storage, testing, researching, labeling, transportation, couriering, purchase for resale, sale h g or consignment of cannabis products;

and o t h (2) does not include activities related only g e ti 17k to the medical cannabis program, to cannabis training and wh lr ni ds 18 education programs or to the personal cultivation or use of =h = 19 a l cannabis;

i, at e ru 20g S.

"consumer" means a person twenty-one years of ae tb ml me 21e h age or older who purchases, acquires, owns, possesses or uses a n d rd ei 22= = o h cannabis product for a purpose other than resale;

cl e] sb kd 23i a º e T.

"contaminant" means pesticides and other foreign er ai n= br 24 material, such as hair, insects or other similar adulterants, ut [e w d m a n o in harvested cannabis;

.221014.5GLGd -m 6: - U.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 5 - e a n e d r e l u [ A d U.

"dry weight basis", when used in the context of regulation of commercial cannabis activity, means a process by e t 17 which delta-9-tetrahydrocannabinol concentration is measured w l n d 18 relative to the aggregate weight of all parts of the plant = = 19 a l genus Cannabis, whether growing or not, including the leaves of i a e r 20 the plant, the flowers and buds of the plant, the seeds of the a t m m 21 plant, the resin of the plant and the stalks of the plant at dh rg e 22 the point of harvest by a licensee and with no moisture added co et sh k 23 to the harvested plant;

g e ai nk b 24 AA.

"facility" means a building, space or grounds uh [r i s licensed for the production, possession, testing, manufacturing .221014.5GLGh - 7 - or distribution of cannabis, cannabis extracts or cannabis , t e u g products;

e b l e e h BB.

"financial consideration" means value that is n d d i = = o h given or received, directly or indirectly, through sales, l ] b d i a º e barter, trade, fees, charges, dues, contributions or donations;

r i = r CC.

"homegrown" or "homemade" means grown or made t e w d m a n o for purposes that are not dependent or conditioned upon the provisiond orm receipt: of financial consideration;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 6 - e a n e d r e l u [ A d provision or receipt of financial consideration;

"industry standards" means the prevailing customary standards of business practice in the cannabis e t 17 industry in jurisdictions within the United States;

w l n d 18 GG.

"integrated cannabis microbusiness" means a = = 19 a l person that is authorized to conduct one or more of the i a e r 20 following:

a t m m 21 (1) production of cannabis at a single d r e 22 licensed premises;

provided that the person shall not possess c e s k 23 more than two hundred total mature cannabis plants at any one e a n b 24 time;

u [ (2) manufacture of cannabis products at a .221014.5GLG - 8 - single licensed premises;

h g (4) operation of only one retail o t h establishment;

and g e i k (5) couriering of cannabis products to h r i s qualified patients, primary caregivers, reciprocal participants h or directly to consumers;

, t e u g HH.

"licensed premises" means a location that e b l e e h includes:

n d d i = = o h (1) all enclosed public and private areas at l ] b d i a º e the location that are used in the business and includes r i = r offices, kitchens, restrooms and storerooms;

t e w d m a n o (2) all areas outside of a building that are specificallyd includedm in: the license for the production, manufacturing, wholesale sale or retail sale of cannabis e t 17 products;

andb we l n d 18s (3)º witho respectt ton a location that is = =.221014.5GLGAIC 19April a1, l2021 specifically(3:02pm) licenseds fork them productione of- cannabis7 outside- of i a e r 20 a building,n thee entired unitr ofe landl thatu is[ createdA byd aspecifically tincluded min mthe 21license subsectionfor or partition of land that the licenseeproduction, owns,manufacturing, leaseswholesale dsale r e 22 or hasretail asale rightof tocannabis occupy;products;

cand e(3) swith krespect 23to II.a location that is specifically licensed for the production of cannabis outside of a building, the entire unit of land that is created by subsection or partition of land that the licensee owns, leases or has a right to occupy;

"localII. jurisdiction" means a municipality, home e a n b 24 rule municipality or county;

u"local [jurisdiction" JJ.means a municipality, home rule municipality or county;

"manufacture"JJ. means to compound, blend, .221014.5GLG - 9 - extract, infuse, package or otherwise prepare a cannabis product;

"manufacture" means to compound, blend, extract, infuse, package or otherwise prepare a cannabis product;

"medical cannabis registry" means the system by which the department of health approves or denies applications and issues and renews registry identification cards for h g qualified patients;

o t h NN.

"primary caregiver" means a resident of New g e i k Mexico who is at least eighteen years of age and who is h r i s responsible for managing the well-being of a qualified patient h with respect to the medical use of cannabis pursuant to the , t e u g Lynn and Erin Compassionate Use Act;

e tb 17l e e h OO.

"public place" means a place to which the w l n d 18d i = = o h general public has access and includes hallways, lobbies and =l =] 19b d i a lº e other parts of apartment houses and hotels that do not r i a= e r 20 constitute rooms or apartments designed for actual residence;

a t me w d m 21a n o highways;

d rm e: 22 playgrounds;

andb placese usedd ins connectionº witho publict cn e= .221014.5GLGAIC April 1, 2021 (3:02pm) s k 23m passengere transportation;- 8 - e a n e d r e l u [ A d playgrounds;

eand aplaces nused bin 24connection PP.with public passenger transportation;

"qualifiedPP. patient" means a resident of New u [ Mexico who holds a registry identification card pursuant to the .221014.5GLG - 10 - Lynn and Erin Compassionate Use Act;

"qualified patient" means a resident of New Mexico who holds a registry identification card pursuant to the Lynn and Erin Compassionate Use Act;

"unprocessed" means unaltered from an original, e t 17 raw or natural state;

and wh lg n d 18 UU.

"vertically integrated cannabis establishment" =o =t 19h a l means a person that is authorized to act as any of the ig a e ri 20k following:

ah tr mi ms 21 (1) a cannabis courier;

dh r e 22 (2) a cannabis manufacturer;

c, t e su kg 23 (3) a cannabis producer;

and e ab nl be 24e h (4) a cannabis retailer.

un [d d i = = o h SECTION 3.

[NEW MATERIAL] DIVISION--POWERS AND DUTIES-- .221014.5GLGl -] 11b -d i a º e RULEMAKING--ADVISORY COMMITTEE CREATED--MEMBERSHIP--DUTIES.-- r i = r A.

The "cannabis control division" is created in thet departmente tow administerd them Cannabisa Regulationn Acto and the licensingdepartment provisionsto ofadminister the LynnCannabis andRegulation Erin Compassionate Use Act and rulesd promulgatedm in: accordance with those acts.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 9 - e a n e d r e l u [ A d the licensing provisions of the Lynn and Erin Compassionate Use Act and rules promulgated in accordance with those acts.

(2) security requirements for a cannabis e t 17 establishment;

w l n d 18 (3) requirements related to:

= = 19 a l (a) inspection and monitoring of a i a e r 20 cannabis establishment;

a t m m 21 (b) a cannabis establishment's d r e 22 recordkeeping and tracking of cannabis from seed until sale;

c e s k 23 (c) prevention of the sale or diversion e a n b 24 of cannabis products in commercial cannabis activity to a uh [g person under the age of twenty-one;

.221014.5GLGo -t 12h - (d) labeling of cannabis products g e i k packaged, sold or distributed by a cannabis establishment;

and h r i s (e) language for labels of cannabis h products regarding potential adverse effects;

, t e u g (4) rules providing that:

e b l e e h (a) a person who is twenty-one years old n d d i = = o h or older shall not purchase more than two ounces of cannabis, l ] b d i a º e sixteen grams of cannabis extract and eight hundred milligrams r i = r of edible cannabis at one time;

and t e w d m a n o (b) as to commercial cannabis activity:

1)d am consumer: shall not possess more than two ounces of cannabis, sixteen grams of cannabis extract and eight hundred milligrams of edible cannabis outside the consumer's private residence;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 10 - e a n e d r e l u [ A d 1) a consumer shall not possess more than two ounces of cannabis, sixteen grams of cannabis extract and eight hundred milligrams of edible cannabis outside the consumer's private residence;

and 3) e t 17 the division shall not limit the amount of tetrahydrocannabinol w l n d 18 concentration in a cannabis product;

provided that the division = = 19 a l may adopt requirements for apportionment and packaging of i a e r 20 cannabis products;

a t m m 21 (5) rules on advertising and marketing of d r e 22 cannabis products;

c e s k 23 (6) rules on how a licensee may display e a n b 24 cannabis products for sale;

u [ (7) procedures that promote and encourage full .221014.5GLG - 13 - participation in the cannabis industry governed by the Cannabis Regulation Act by representatives of communities that have been disproportionately harmed by rates of arrest through the enforcement of cannabis prohibitions in law and policy, rural communities likely to be impacted by cannabis production and agricultural producers from economically disadvantaged h g communities;

o t h (8) procedures that promote and encourage g e i k racial, ethnic, gender and geographic diversity and New Mexico h r i s residency among license applicants, licensees and cannabis h industry employees;

, t e u g (9) rules for a certification process to e b l e e h identify cannabis products for consumers from integrated n d d i = = o h cannabis microbusinesses or cannabis producer microbusinesses l ] b d i a º e or owned by representatives of communities that have been r i = r disproportionately harmed by rates of arrest through the t e tw 17d m a n o enforcement of cannabis prohibitions in law and policy and w l n d 18m underserved: communities that include tribal, acequia, land = = 19 a l grant-merced and other rural historic communities;

ib a e rd 20s (10)º ino consultation with the economic a t mn m= 21.221014.5GLGAIC developmentApril department,1, development2021 of(3:02pm) as technicalk assistancem d r e 22- resource11 guide- fore rurala Newn Mexicoe residentsd whor are seeking c e sl ku 23[ toA establishd verticallyunderserved integratedcommunities cannabisthat establishments,include etribal, aacequia, nland bgrant-merced 24and cannabisother producerrural microbusinesseshistoric orcommunities; integrated cannabis u [ microbusinesses;

.221014.5GLG(10) - 14 - (11) in consultation with the departmenteconomic development department, development of environment,a rulestechnical assistance resource guide for rural New Mexico residents who are seeking to establish:establish vertically integrated cannabis establishments, cannabis producer microbusinesses or integrated cannabis microbusinesses;

(11) in consultation with the department of environment, rules to establish:

(12) in consultation with the New Mexico department of agriculture and the department of environment, rules to establish standards for quality control, inspection h g and testing of cannabis products for potency and contaminants, o t h except for cannabis produced or harvested for research purposes g e i k and not for ingestion;

provided that all such rules and eh tr 17i s standards shall be consistent with the rules and standards for wh l n d 18 testing of medical cannabis products;

and =, =t 19e au lg (13) in consultation with the state fire ie ab l e re 20h marshal's office of the homeland security and emergency an td md mi 21= = o h management department, rules with regard to health and safety.

l ] b d ri ea 22º e C.

No later than January 1, 2022, the division cr ei s= kr 23 shall promulgate rules that are consistent with industry t e w d m a n bo 24 standards relating to cannabis training and education programs, ud [m including::

.221014.5GLGb e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 1512 - (1)e qualificationsa andn procedurese ford licensure;r e l u [ A d including:

(1) qualifications and procedures for licensure;

and (2) protocols to ensure licensees' compliance with state and local laws and ordinances governing food and product safety, occupational health and safety, environmental impacts, natural resource protection, water use and quality, water supply, hazardous materials, pesticide use and wastewater e t 17 discharge.

w l n d 18 E.

No later than January 1, 2022, the division = = 19 a l shall adopt rules in consultation with the department of health i a e r 20 to establish standards and determinations on requirements for ah tg m m 21 reserving cannabis products for sale to qualified patients, do rt eh 22 primary caregivers and reciprocal participants.

cg e si k 23 F.

The division shall collect and publish annually eh ar ni bs 24 on the division's website, and present to the appropriate uh [ interim committee of the legislature, a report describing .221014.5GLG, -t 16e -u g demographic data on license applicants, controlling persons and e b l e e h employees of cannabis establishments, including race, n d d i = = o h ethnicity, gender, age, residential status and whether the l ] b d i a º e applicants, persons, employees or the locations where the r i = r cannabis products are produced, manufactured, sold, tested or t e w d m a n o researched are located in an underserved rural community, includingd tribal,m acequia,: land grant-merced or other rural historic communities.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 13 - e a n e d r e l u [ A d including tribal, acequia, land grant-merced or other rural historic communities.

The committee shall advise the division on the development of rules pursuant to the Cannabis Regulation Act, including best practices and the promotion of economic and cultural diversity in licensing and employment opportunities and protection of public health and safety while ensuring a regulated environment for commercial cannabis activity that does not impose e t 17 unreasonable barriers that would perpetuate, rather than reduce w l n d 18 and eliminate, the illicit market for cannabis.

A person = = 19 a l appointed to the cannabis regulatory advisory committee shall i a e r 20 not hold any ownership interest or investment in a licensed a t m m 21 person pursuant to the Cannabis Regulation Act;

provided that d r e 22 the superintendent may appoint a person who holds an ownership c e s k 23 interest in a licensed person as a nonvoting member.

The e a n b 24 committee shall consist of the following members:

u [ (1) the chief public defender or the chief .221014.5GLG - 17 - public defender's designee;

(2) a district attorney appointed by the New h g Mexico district attorney association;

o t h Hfl1º (3) a municipal police chief appointed g e i k by the New Mexico association of chiefs of police;»Hfl1 h r i s Hfl1º(3)»Hfl1 Hfl1º(4)»Hfl1 a county sheriff h appointed by the executive director of the New Mexico , t e u g association of counties;

and (4)e b l e e h Hfl1º(4)»Hfl1 Hfl1º(5)»Hfl1 one member for n d d i = = o h each of the following groups or professional qualifications, l ] b d i a º e appointed by the superintendent:

r i = r (a) a cannabis policy advocacy t e w d m a n o organization;

(b)d am labor: organization;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 14 - e a n e d r e l u [ A d (b) a labor organization;

e t 17 (e) an Indian nation, tribe or pueblo w l n d 18 with relevant expertise as the director and the superintendent = = 19 a l deem appropriate;

i a e r 20 (f) expertise in public health;

a t m m 21 (g) expertise in regulating commercial d r e 22 activity for adult-use intoxicating substances;

c e s k 23 (h) expertise and experience in cannabis e a n b 24 laboratory science;

u [ (i) expertise in environmental science;

.221014.5GLG - 18 - (j) expertise in small business development;

and (m) previous experience as a cannabis retailer, cannabis producer or cannabis manufacturer and who is h g a nonvoting member.

o t h H.

The cannabis regulatory advisory committee shall g e i k elect from among its members a chair and such other officers as h r i s it deems necessary.

The committee shall meet at the call of h the chair, the director or the superintendent.

A majority of , t e u g members currently serving constitutes a quorum for the conduct e b l e e h of business.

Members shall serve at the pleasure of the n d d i = = o h superintendent.

l ] b d i a º e I.

Public voting members of the cannabis regulatory er ti 17= r advisory committee are entitled to receive per diem and mileage wt le nw d 18m a n o as provided for state employees pursuant to the Per Diem and =d =m 19: a l Mileage Act and shall receive no other compensation, perquisite i a e r 20 or allowance.

ab e d s º o t mn = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m 21e J.- 15 - e a n e d r e l u [ A d Mileage Act and shall receive no other compensation, perquisite or allowance.

J.

d r e 22 (1) monitor the supply and demand of cannabis c e s k 23 products produced in New Mexico by licensees and present e a n b 24 annually to the appropriate interim committee of the u [ legislature the impacts of supply on illicit cannabis products .221014.5GLG - 19 - markets and adequate supply of cannabis products for qualified patients and reciprocal participants;

The department of health shall monitor emerging scientific and medical information relevant to the health effects associated with the use of cannabis products and shall monitor changes in cannabis product use, opioid use and alcohol h g use patterns for children and adults within the state, broken o t h down by county, race and ethnicity.

g e ti 17k B.

No later than September 1, 2021, the secretary wh lr ni ds 18 of health shall appoint a "public health and safety advisory =h = 19 a l committee" composed of no more than fifteen professionals with i, at e ru 20g expertise related to cannabis products through work, training ae tb ml me 21e h or research in public health, epidemiology, medicine, medical n d rd ei 22= = o h toxicology, poison control, road safety, occupational safety, cl e] sb kd 23i a º e environmental safety and emergency medicine.

er ai n= br 24 C.

Beginning December 1, 2024, the public health ut [e w d m a n o and safety advisory committee shall provide to the legislature, .221014.5GLGd -m 20: - and the department of health shall publish on its website, an annual report on the health effects of legalizing cannabis products for adult use.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 16 - e a n e d r e l u [ A d and the department of health shall publish on its website, an annual report on the health effects of legalizing cannabis products for adult use.

e t 17 D.

In consultation with qualified patients and w l n d 18 primary caregivers, the department of health shall publish an = = 19 a l annual assessment report that shall include at a minimum an i a e r 20 evaluation of the affordability and accessibility of medical a t m m 21 cannabis.

dh rg e 22 E.

Public members of the public health and safety co et sh k 23 advisory committee are entitled to per diem and mileage as g e ai nk b 24 provided for state employees pursuant to the Per Diem and uh [r i s Mileage Act and shall receive no other compensation, perquisite .221014.5GLGh - 21 - or allowance.

, t e u g SECTION 5.

[NEW MATERIAL] DEPARTMENT OF HEALTH--DUTIES-- e b l e e h TRANSFER OF LICENSING DUTIES.--Except for administration of the n d d i = = o h medical cannabis registry, the power, duty and authority of the l ] b d i a º e department of health related to the medical cannabis program r i = r shall be transferred to the division on the effective date of t e w d m a n o the Cannabis Regulation Act.

SECTIONd 6.m :

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 17 - e a n e d r e l u [ A d SECTION 6.

and e t 17 (3) all aspects of cannabis relating to w l n d 18 cannabis training and education programs.

= = 19 a l B.

The division shall follow the provisions of the i a e r 20 Uniform Licensing Act when licensing or permitting the a t m m 21 following:

d r e 22 (1) cannabis consumption areas;

c e s k 23 (2) cannabis couriers;

e a n b 24 (3) cannabis manufacturers;

u [ (4) cannabis producer microbusinesses;

.221014.5GLG - 22 - (5) cannabis producers;

h g (8) cannabis servers;

o t h (9) cannabis testing laboratories;

g e i k (10) cannabis training and education programs;

h r i s (11) integrated cannabis microbusinesses;

and h (12) vertically integrated cannabis , t e u g establishments.

e b l e e h C.

The division shall include a clear designation n d d i = = o h on all licenses and permits that indicates whether the license l ] b d i a º e or permit is for medical cannabis activity, commercial cannabis r i = r activity or both or for cannabis training and education t e w d m a n o programs.

D.d m :

Theb divisione shalld issues aº licenseo tot an cannabis= retailer.221014.5GLGAIC applicantApril at1, a2021 discount(3:02pm) ifs thek applicantm provides e t- 17 documentation of an agreement to accept cannabis products on w l n d 18 consignment- frome a cannabisn producere microbusinessd orr ane = = 19 a l integratedu cannabis[ microbusinessA licensedd pursuantD. the i a e r 20 Cannabis Regulation Act.

The division shall issue a tlicense mto ma 21cannabis E.retailer applicant at a discount if the applicant provides documentation of an agreement to accept cannabis products on consignment from a cannabis producer microbusiness or an integrated cannabis microbusiness licensed pursuant the Cannabis Regulation Act.

AE. license is valid for twelve months from the d r e 22 date the license is issued and may be renewed annually, except c e s k 23 that a license issued for a cannabis training and education e a n b 24 program is valid until terminated by the licensee or suspended u [ or revoked by the division.

.221014.5GLGA -license 23is -valid F.for twelve months from the date the license is issued and may be renewed annually, except that a license issued for a cannabis training and education program is valid until terminated by the licensee or suspended or revoked by the division.

F.

No license shall be transferable or assignable h g from a licensee to another person.

The division shall not o t h allow a person that is licensed as any type of cannabis g e i k establishment other than a cannabis research laboratory to h r i s hold, directly or indirectly, a cannabis testing laboratory h license.

, t e u g H.

Except for verification of age, the division e tb 17l e e h shall not require licensees to request information from w l n d 18d i = = o h consumers or impose any residency requirement upon consumers =l =] 19b d i a lº e for the purchase of cannabis products pursuant to the r i a= e r 20 commercial cannabis activity authorized by the Cannabis a t me w d m 21a n o Regulation Act.

The division may require licensees to request d rm e: 22 information from consumers for the purchase of cannabis c e s k 23 products pursuant to the medical cannabis program, which may e a n b 24 include the presentation of legal identification issued by an u [ authorized governmental entity or other documents as required .221014.5GLG - 24 - by the medical cannabis program.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 19 - e a n e d r e l u [ A d information from consumers for the purchase of cannabis products pursuant to the medical cannabis program, which may include the presentation of legal identification issued by an authorized governmental entity or other documents as required by the medical cannabis program.

HJCºSmoking in a cannabis consumption area on a licensed premises shall be allowed only if the cannabis consumption area is in a designated smoking area or in a standalone building from which smoke does not infiltrate other indoor workplaces or h g other indoor public places where smoking is otherwise o t h prohibited pursuant to the Dee Johnson Clean Indoor Air g e i k Act.»HJC h r i s J.

Licensees are specifically allowed to conduct h other licensed activities, including activities pursuant to the , t e u g Hemp Manufacturing Act, except for sales of alcoholic e tb 17l e e h beverages.

w l n d 18d i = = o h K.

A person properly licensed and in good standing =l =] 19b d i a lº e pursuant to the Lynn and Erin Compassionate Use Act on the r i a= e r 20 effective date of the Cannabis Regulation Act may continue to a t me w d m 21a n o operate under that license for medical cannabis until d rm e: 22 comparable licenses for commercial cannabis activity are c e s k 23 available.

Theb divisione shalld determines whenº retailo salest ofn = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 20 - e a n be 24d commercialr cannabise productsl begin,u but[ noA laterd thancomparable Aprillicenses 1,for ucommercial [cannabis 2022.activity are available.

AThe facilitydivision ofshall suchdetermine awhen licensee,retail uponsales issuance of thecommercial .221014.5GLG - 25 - applicable cannabis establishmentproducts license,begin, shallbut constituteno licensedlater premisesthan ofApril the1, licensee2022. and the licensee shall be entitled to continued and uninterrupted operations of the licensed premises.

A facility of such a licensee, upon issuance of the applicable cannabis establishment license, shall constitute licensed premises of the licensee and the licensee shall be entitled to continued and uninterrupted operations of the licensed premises.

(1) require all cannabis establishment licensees to ensure that at least ten percent of their cannabis in stock on a monthly basis is designated for sale to qualified e t 17 patients, primary caregivers and reciprocal participants;

wh lg n d 18 (2) initially take reasonable measures to =o =t 19h a l expeditiously incentivize increased production of cannabis ig a e ri 20k plants to remedy a shortage of cannabis supply in the medical ah tr mi ms 21 cannabis program;

dh r e 22 (3) after having first exhausted measures to c, t e su kg 23 increase production of cannabis plants to address the shortage e ab nl be 24e h of cannabis supply in the medical cannabis program, exclude un [d d i = = o h commercial cannabis activity from the scope of new licenses .221014.5GLGl -] 26b -d i a º e issued to initial applicants for a vertically integrated cannabisr establishment,i cannabis= producer,r integrated cannabis microbusiness,establishment, cannabis producerproducer, microbusinessintegrated or cannabis manufacturert license,e whichw limitationd shallm bea inn forceo formicrobusiness, acannabis periodproducer ofmicrobusiness ator leastcannabis sixd months;m :

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 21 - e a n e d r e l u [ A d manufacturer license, which limitation shall be in force for a period of at least six months;

As used in this section, "shortage of cannabis e t 17 supply in the medical cannabis program" means that the average w l n d 18 number of cannabis plants in production in the medical cannabis = = 19 a l program per qualified patient after the effective date of the i a e r 20 Cannabis Regulation Act is substantially less than the average a t m m 21 number of cannabis plants in production in the medical cannabis d r e 22 program per qualified patient as of the effective date of the c e s k 23 Cannabis Regulation Act, where:

e a n b 24 (1) the average number of cannabis plants in uh [g production after the effective date of the Cannabis Regulation .221014.5GLGo -t 27h - Act is measured over a period of three consecutive months;

and g e i k (2) the average number of cannabis plants in h r i s production as of the effective date of the Cannabis Regulation h Act is measured over a period of three consecutive months , t e u g immediately preceding the effective date of the Cannabis e b l e e h Regulation Act.

SECTIONn 7.d d i = = o h SCWºN.

A person who is a member of the New Mexico l ] b d i a º e senate or the New Mexico house of representatives on the r i = r effective date of the Cannabis Regulation Act shall not apply t e w d m a n o for or be granted a license to engage in any commercial d m :

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 22 - e a n e d r e l u [ A d cannabis activity prior to July 1, 2026.»SCW SECTION 7.

(1) no later than September 1, 2021, accept and begin processing license applications for cannabis producers, cannabis producer microbusinesses and any person e t 17 properly licensed and in good standing as a licensed cannabis w l n d 18 producer pursuant to the Lynn and Erin Compassionate Use Act;

= = 19 a l (2) no later than January 1, 2022, accept and i a e r 20 begin processing license applications for all license types;

a t m m 21 (3) require as a condition of licensing d r e 22 pursuant to the Cannabis Regulation Act that the applicant c e s k 23 demonstrate that the applicant has a legal right to a e a n b 24 commercial water supply, water rights or another source of u [ water sufficient to meet the water needs as determined by the .221014.5GLG - 28 - division related to the license as evidenced by documentation h g from the office of the state engineer of a valid water right or o t h from a water provider that the use of water for cannabis g e i k production is compliant with that water provider's rules;

h r i s (4) if an applicant applies for a cannabis h producer license or a cannabis manufacturer license, in , t e u g addition to the requirements in Paragraph (3) of this e b l e e h subsection, require that the applicant submit a plan to use, or n d d i = = o h demonstrate to the division that the applicant cannot feasibly l ] b d i a º e use, energy and water reduction opportunities, including:

r i = r (a) for a cannabis producer, drip t e w d m a n o irrigation and water collection;

(b)d naturalm lighting: and energy efficiency measures;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 23 - e a n e d r e l u [ A d (b) natural lighting and energy efficiency measures;

and (5) allow commercial cannabis activity retail e t 17 sales no later than April 1, 2022 and otherwise allow w l n d 18 activities authorized by the Cannabis Regulation Act or the = = 19 a l medical cannabis program as of the time of licensure of a i a e r 20 licensee, so long as a minimum of twenty-five percent of a t m m 21 monthly cannabis sales are to qualified patients, primary d r e 22 caregivers and reciprocal participants or sold wholesale to c e s k 23 other licensees that meet or exceed the twenty-five percent e a n b 24 sales to qualified patients, primary caregivers and reciprocal u [ participants until December 31, 2022.

.221014.5GLG - 29 - C.

or (2) the applicant or a controlling person of h g the applicant has been convicted of an offense that is o t h substantially related to the qualifications, functions or g e i k duties of the applicant's business;

provided that if the h r i s division determines that the applicant or controlling person is h otherwise qualified for a license and that issuing a license to , t e u g the applicant would not compromise public safety, the division e b l e e h shall conduct a thorough review of the conviction, including n d d i = = o h the nature of the offense, surrounding circumstances and any el t] 17b d i a º e evidence of the applicant's or controlling person's wr li n= dr 18 rehabilitation following the conviction, and based on that =t =e 19w d m a ln o review, determine whether the applicant should be issued a id am e: r 20 license.

ab e d s º o t mn = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m 21e E.- 24 - e a n e d r e l u [ A d license.

ForE. purposes of Subsection D of this section, d r e 22 the following are considered substantially related to the c e s k 23 qualifications, functions or duties of a person seeking a e a n b 24 license:

uFor [purposes (1)of aSubsection felonyD convictionof involvingthis fraud,section, .221014.5GLGthe -following 30are -considered deceitsubstantially related to the qualifications, functions or embezzlement;duties of a person seeking a license:

(1) a felony conviction involving fraud, deceit or embezzlement;

A conviction for which the related sentence, including any term of probation or parole, is completed for the possession, use, manufacture, distribution or dispensing or the possession with the intent to manufacture, distribute or dispense cannabis is not considered substantially related to h g the qualifications, functions or duties of a person seeking a eo t 17h license and shall not be the sole ground on which an wg le ni dk 18 application is denied.

The division shall comply with the =h =r 19i as l provisions of the Criminal Offender Employment Act.

ih a e r 20 G.

The division shall deny an application if an a, t me mu 21g applicant, a controlling person or the premises for which a de rb l e 22e h license is sought does not qualify for licensure pursuant to cn ed sd ki 23= = o h the Cannabis Regulation Act.

el a] n b 24d i a º e H.

The division shall not license a person who has ur [i = r had a license that was issued pursuant to the Cannabis .221014.5GLGt -e 31w -d m a n o Regulation Act or the Lynn and Erin Compassionate Use Act revokedd bym the: division or the department of health in the three years immediately preceding the date on which the person filed a new application.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 25 - e a n e d r e l u [ A d revoked by the division or the department of health in the three years immediately preceding the date on which the person filed a new application.

e t 17 (2) cannabis producer;

w l n d 18 (3) cannabis producer microbusiness;

= = 19 a l (4) cannabis research laboratory;

i a e r 20 (5) cannabis retailer;

a t m m 21 (6) cannabis testing laboratory;

d r e 22 (7) integrated cannabis microbusiness;

and ch eg s k 23 (8) vertically integrated cannabis eo at nh b 24 establishment.

ug [e i k K.

The division shall conduct national criminal .221014.5GLGh -r 32i -s history background checks and state criminal history checks on h the following:

, t e u g (1) if an applicant is a limited partnership, e b l e e h each partner of the limited partnership;

n d d i = = o h (2) if the applicant is a limited liability l ] b d i a º e company, each member of the limited liability company;

r i = r (3) if the applicant is a corporation, each t e w d m a n o director and officer of the corporation;

and (4)d anym controlling: person of the applicant.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 26 - e a n e d r e l u [ A d (4) any controlling person of the applicant.

Electronic live fingerprint scans may be used e t 17 when conducting criminal history background checks.

w l n d 18 SECTION 8.

[NEW MATERIAL] LICENSEES--DISCIPLINARY = = 19 a l ACTIONS--SANCTIONS--CIVIL PENALTY.-- i a e r 20 A.

A violation of the provisions of the Cannabis a t m m 21 Regulation Act by a licensee is grounds for disciplinary d r e 22 action.

c e s k 23 B.

e a n b 24 (1) impose an intermediate sanction u [ established by rule;

.221014.5GLG - 33 - (2) impose a directed plan of correction;

h g and provided further that penalties and interest recovered o t h pursuant to the Cannabis Regulation Act on behalf of the state g e i k shall be remitted to the state treasurer for deposit in the h r i s current school fund;

or h (4) suspend or revoke the license.

, t e u g C.

The division shall promulgate rules specifying e b l e e h the criteria for imposition of sanctions and civil monetary n d d i = = o h penalties.

l ] b d i a º e D.

The provisions of this section do not apply to r i = r occupational health and safety rules promulgated pursuant to t e w d m a n o Section 3 of the Cannabis Regulation Act.

E.d m :

Ab persone aggrievedd bys anº actiono taken by the e t 17 division pursuant to this section may request and receive a w l n d= 18.221014.5GLGAIC hearingApril with1, the2021 superintendent(3:02pm) fors thek purposem ofe reviewing- =27 =- 19e a ln thee actiond inr accordancee withl theu Uniform[ LicensingA Act.d E.

iA person aggrieved by an action taken by the division pursuant to this section may request and receive a ehearing rwith 20the SECTIONsuperintendent 9.for the purpose of reviewing the action in accordance with the Uniform Licensing Act.

[NEWSECTION MATERIAL]9. APPLICATION AND LICENSING a t m m 21 FEES.-- d r e 22 A.

Every[NEW applicationMATERIAL] forAPPLICATION theAND issuanceLICENSING orFEES.-- renewalA. of c e s k 23 the following licenses shall be accompanied by a license fee in e a n b 24 the following specified amounts:

uEvery [application (1)for athe cannabisissuance courieror license,renewal upof tothe onefollowing .221014.5GLGlicenses -shall 34be -accompanied thousandby fivea hundredlicense dollars ($1,500) per year and an additional fee ofin upthe tofollowing onespecified thousandamounts: dollars ($1,000) per year for each additional licensed premises of the licensee;

(1) a cannabis courier license, up to one thousand five hundred dollars ($1,500) per year and an additional fee of up to one thousand dollars ($1,000) per year for each additional licensed premises of the licensee;

h g (4) a cannabis producer license, two thousand o t h five hundred dollars ($2,500) per year and an additional fee of g e i k one thousand dollars ($1,000) per year for each additional h r i s licensed premises of the licensee;

h (5) a cannabis retailer license, two thousand e, t 17e u g five hundred dollars ($2,500) per year and an additional fee of we b l ne de 18h one thousand dollars ($1,000) per year for each additional n d d i = = 19o ah l licensed premises of the licensee;

l ] b d i a º e r 20 (6) a cannabis research laboratory license, ar ti m= mr 21 two thousand five hundred dollars ($2,500) per year and an t e w d rm ea 22n o additional fee of one thousand dollars ($1,000) per year for cd em s: k 23 each additional licensed premises of the licensee;

e a n b 24e (7)d as verticallyº integratedo cannabist un [= establishment.221014.5GLGAIC license,April seven1, thousand2021 five(3:02pm) hundreds dollarsk .221014.5GLGm e - 3528 - ($7,500)e pera yearn ande and additionalr feee ofl oneu thousand[ dollarsA ($1,000)d per year for each additional licensed premises of the licensee;

(7) a vertically integrated cannabis establishment license, seven thousand five hundred dollars ($7,500) per year and an additional fee of one thousand dollars ($1,000) per year for each licensed premises of the licensee;

A licensee may increase the number of mature e t 17 plants licensed at the time of renewal and one other time per w l n d 18 year in increments of five hundred mature plants.

Fees may be =h =g 19 a l prorated for the remainder of the licensing year.

io at eh r 20 D.

The initial application fee and the annual ag te mi mk 21 renewal fee for a vertically integrated cannabis establishment dh r ei 22s license shall not exceed one hundred twenty-five thousand ch e s k 23 dollars ($125,000) for a license for both medical cannabis e, at ne bu 24g activity and commercial cannabis activity.

The initial ue [b l e e h application fee and the annual renewal fee for a license or .221014.5GLGn -d 36d -i = = o h renewal of a license that authorizes only medical cannabis l ] b d i a º e activity shall be one-half the fee applicable to a license r i = r authorizing both medical cannabis activity and commercial t e w d m a n o cannabis activity.

E.d m :

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 29 - e a n e d r e l u [ A d E.

e t 17 H.

The division shall deposit all fees collected w l n d 18 pursuant to the Cannabis Regulation Act in the cannabis = = 19 a l regulation fund.

i a e r 20 SECTION 10.

[NEW MATERIAL] CANNABIS TRAINING AND a t m m 21 EDUCATION PROGRAM LICENSING--SANCTIONS.-- d r e 22 A.

The division shall begin licensing cannabis c e s k 23 training and education programs no later than January 1, 2022.

e a n b 24 B.

The division may suspend a license for repeated u [ violations of the same serious and substantial rule promulgated .221014.5GLG - 37 - pursuant to the Cannabis Regulation Act pertaining to public health and safety.

SECTION 11.

[NEW MATERIAL] CANNABIS SERVER PERMITS-- CANNABIS SERVERS--PERMIT REQUIRED--APPLICATIONS--EDUCATION PROGRAM APPROVAL REQUIRED--ISSUANCE OR DENIAL OF A PERMIT OR APPROVAL--PENALTIES.-- A.

The division shall promulgate rules consistent with this section and industry standards for issuance of a cannabis server permit and licenses for a cannabis consumption area.

A cannabis research laboratory or an employee of the laboratory is not required to obtain or possess a cannabis server permit while performing activities authorized pursuant to a cannabis research laboratory.

The division shallmay issuesuspend cannabisa serverlicense permitsfor torepeated personsviolations twenty-oneof yearsthe ofsame ageserious orand oldersubstantial whorule satisfypromulgated theh requirementsg ofpursuant thisto sectionthe andCannabis rulesRegulation promulgatedAct bypertaining theto epublic o t 17h division.health and safety.

Ang applicante shalli providek proofSECTION of11. satisfactory w l n d 18 completion of a program provided by a cannabis server permit = = 19 a l education provider approved by the division.

A[NEW personMATERIAL] shallCANNABIS iSERVER aPERMITS-- eh r 20i nots beCANNABIS employedSERVERS--PERMIT asREQUIRED--APPLICATIONS--EDUCATION ah cannabisPROGRAM serverAPPROVAL onREQUIRED--ISSUANCE aOR licensedDENIAL premisesOF aA tPERMIT mOR m, 21t unlesse thatu persong obtainsAPPROVAL--PENALTIES.-- ae cannabisb serverl permite within d r e 22h thirtyA. days of employment.

cThe division shall promulgate rules consistent n d d i = = o h with this section and industry standards for issuance of a l ] b d i a º e scannabis kserver 23permit C.and licenses for a cannabis consumption r i = r area.

TheA cannabis serverresearch educationlaboratory programor curriculuman employee of the t e w d m a n bo 24laboratory shallis includenot therequired followingto subjects:obtain or possess a cannabis d m :

ub [e (1)d thes effectº cannabiso productst haven on= the.221014.5GLGAIC .221014.5GLGApril 1, 2021 (3:02pm) s k m e - 3830 - bodye anda behavior,n includinge thed effectr one al person'su ability[ toA operated aserver motorpermit vehiclewhile whenperforming underactivities theauthorized influencepursuant ofto a cannabis products;research laboratory.

B.

The division shall issue cannabis server permits to persons twenty-one years of age or older who satisfy the requirements of this section and rules promulgated by the division.

An applicant shall provide proof of satisfactory completion of a program provided by a cannabis server permit education provider approved by the division.

A person shall not be employed as a cannabis server on a licensed premises unless that person obtains a cannabis server permit within thirty days of employment.

C.

The cannabis server education program curriculum shall include the following subjects:

(1) the effect cannabis products have on the body and behavior, including the effect on a person's ability to operate a motor vehicle when under the influence of cannabis products;

(3) state laws concerning cannabis licensure, h g cannabis liability issues and driving under the influence of o t h cannabis;

g e i k (4) methods of recognizing problem cannabis h r i s product users and techniques for intervening with problem h cannabis product users;

, t e u g (5) methods of identifying false driver's e b l e e h licenses and other documents used as evidence of age and n d d i = = o h identity to prevent the sale of cannabis products to a person l ] b d i a º e under twenty-one years of age pursuant to the Cannabis er ti 17= r Regulation Act;

and wt le nw d 18m a n o (6) harm reduction practices related to =d =m 19: a l cannabis use.

ib e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 31 - e a n e d r 20e D.l u [ A d cannabis use.

AD. cannabis server permit is the property of the a t m m 21 state and shall be immediately returned to the division upon d r e 22 suspension or revocation or denial of renewal of a permit.

cA ecannabis sserver kpermit 23is E.the property of the state and shall be immediately returned to the division upon suspension or revocation or denial of renewal of a permit.

CannabisE. server permits shall be valid for a e a n b 24 period of three years from the date the permit is issued and u [ may be renewed upon providing proof that the permit holder has .221014.5GLG - 39 - successfully completed up to four and one-half hours of continuing education and an examination as determined by the division.

Cannabis server permits shall be valid for a period of three years from the date the permit is issued and may be renewed upon providing proof that the permit holder has successfully completed up to four and one-half hours of continuing education and an examination as determined by the division.

(2) the division shall suspend a cannabis h g server permit for a period of one year when the division finds o t h that the cannabis server is guilty of a second offense of g e ti 17k selling, serving or dispensing a cannabis product to a person wh lr ni ds 18 under twenty-one years of age in violation of the Cannabis =h = 19 a l Regulation Act arising separately from the incident giving rise i, at e ru 20g to the cannabis server's first offense;

ae tb ml me 21e h (3) the division shall permanently revoke a n d rd ei 22= = o h cannabis server permit when it finds that the cannabis server cl e] sb kd 23i a º e is guilty of a third offense of selling, serving or dispensing er ai n= br 24 a cannabis product to a person under twenty-one years of age in ut [e w d m a n o violation of the Cannabis Regulation Act arising separately .221014.5GLGd -m 40: - from the incidents giving rise to the cannabis server's first and second offenses;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 32 - e a n e d r e l u [ A d from the incidents giving rise to the cannabis server's first and second offenses;

[NEW MATERIAL]MATERIAL ] LOCAL CONTROL.-- A.

and (2) allow for the smoking, vaporizing and ingesting of cannabis products within an indoor or outdoor e t 17 cannabis consumption area if:

w l n d 18 (a) unless licensed pursuant to the Lynn = = 19 a l and Erin Compassionate Use Act, access to the cannabis i a e r 20 consumption area is restricted to persons twenty-one years of a t m m 21 age and older;

and dh rg e 22 (b) the cannabis establishment or co et sh k 23 integrated cannabis microbusiness is located at a minimum g e ai nk b 24 distance from a school or daycare center as determined by the uh [r i s local jurisdiction, but which minimum distance shall not be set .221014.5GLGh - 41 - at any more than three hundred feet from a school or daycare , t e u g center that was in existence at the time the establishment or e b l e e h microbusiness was licensed.

n d d i = = o h B.

l ] b d i a º e (1) prevent transportation of cannabis r i = r products on public roads by a licensee that transports cannabis t e w d m a n o products in compliance with the Cannabis Regulation Act;

(2)d completelym prohibit: the operation of a licensee;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 33 - e a n e d r e l u [ A d (2) completely prohibit the operation of a licensee;

(4) require a licensed premises or a cannabis consumption area to be any more than three hundred feet from a school or daycare center that was in existence at the time the cannabis establishment or integrated cannabis microbusiness was e t 17 licensed;

w l n d 18 (5) require an existing licensee at a licensed = = 19 a l premises to relocate;

or i a e r 20 (6) prohibit a person from producing homegrown a t m m 21 cannabis as provided for in the Cannabis Regulation Act.

d r e 22 SECTION 13.

[NEW MATERIAL] LICENSEE PROTECTIONS.-- c e s k 23 A.

Conduct by a licensee or a licensee e a n b 24 representative that is allowed pursuant to a license and u [ conduct by a person that allows property to be used by a .221014.5GLG - 42 - licensee or a licensee representative for conduct allowed pursuant to a license is lawful, not a violation of state or local law and is not a basis for seizure or forfeiture of any h g property or assets under state or local law.

o t h B.

The state or a local jurisdiction shall not g e i k impose a criminal, civil or administrative penalty on a h r i s licensee, a licensee representative or a person that allows h property to be used by a licensee or a licensee representative , t e u g pursuant to a license, solely for conduct allowed pursuant to a e b l e e h license.

n d d i = = o h SECTION 14.

[NEW MATERIAL] PROTECTION OF UNDERAGE l ] b d i a º e PERSONS--PROVIDING CANNABIS PRODUCTS TO MINORS--PENALTIES.-- r i = r A.

Except as allowed pursuant to the Cannabis t e w d m a n o Regulation Act, it is a violation of that act for a person, including a person licensed pursuant to the provisions of that act, or an employee, agent or lessee of that person, if the e t 17 person knows or has reason to know that the person is violating w l n d 18m the: provisions of this section, to knowingly and intentionally:

=b e d s º o t n = 19.221014.5GLGAIC aApril l1, (1)2021 sell,(3:02pm) serves ork givem cannabise products- to34 a- ie a n e d r 20e l u [ A d including a person underlicensed twenty-onepursuant yearsto the provisions of agethat act, or allowan aemployee, personagent underor alessee tof mthat mperson, 21if twenty-onethe yearsperson ofknows ageor has reason to consumeknow cannabisthat productsthe onperson is violating the dprovisions rof ethis 22section, licensedto premises;knowingly and intentionally:

c(1) esell, sserve kor 23give (2) buy cannabis products forto or procure the e a nperson bunder 24twenty-one saleyears or service of cannabisage productsor toallow a person under twenty-twenty-one uyears [of oneage yearsto ofconsume age;cannabis products on the licensed premises;

.221014.5GLG(2) -buy 43cannabis -products (3)for deliveror procure the sale or service of cannabis products to a person under twenty-onetwenty- one years of age;

(3) deliver cannabis products to a person under twenty-one years of age;

The division shall suspend or revoke the license and may fine the licensee in an amount not to exceed ten h g thousand dollars ($10,000), or both, when the division finds o t h that a licensee or the licensee's employee or agent knowingly g e i k has sold, served or given any cannabis product to a person h r i s under twenty-one years of age.

h D.

The establishment of all of the following facts , t e u g by a licensee prosecuted for a violation of Subsection D of e tb 17l e e h this section and a cannabis server for a violation of w l n d 18d i = = o h Subsection F of Section 11 of the Cannabis Regulation Act shall =l =] 19b d i a lº e constitute a defense:

r i a= e r 20 (1) that the purchaser falsely represented in a t me w d m 21a n o writing;

by producing a driver's license bearing the d rm e: 22 purchaser's photograph;

byb producinge ad photographics cº eo st kn 23= identification.221014.5GLGAIC cardApril issued1, by2021 the(3:02pm) motors vehiclek divisionm ofe the- 35 - e a n be 24d taxationr ande revenuel department;u [ A d purchaser's photograph;

or by producing a similarphotographic u [ identification card issued pursuantby to the lawsmotor ofvehicle thisdivision state, .221014.5GLG - 44 - another state, the federal government or the government of an Indian nation, tribe or pueblo that the persontaxation wasand twenty-onerevenue yearsdepartment; of age or older;

or by producing a similar identification card issued pursuant to the laws of this state, another state, the federal government or the government of an Indian nation, tribe or pueblo that the person was twenty-one years of age or older;

e t 17 (2) a state agency from enforcing a law or wh lg n d 18 rule that does not conflict with the Cannabis Regulation Act or =o =t 19h a l rules promulgated pursuant to that act;

or ig a e ri 20k (3) a local jurisdiction from enforcing a ah tr mi ms 21 local ordinance that does not conflict with the Cannabis dh r e 22 Regulation Act or rules promulgated pursuant to that act.

c, t e su kg 23 SECTION 15.

[NEW MATERIAL] TRANSPORT VIA COURIER.-- e ab nl be 24e h A.

A vertically integrated cannabis establishment, un [d d i = = o h cannabis retailer or integrated cannabis microbusiness may .221014.5GLGl -] 45b -d i a º e courier cannabis products.

r i = r B.

A courier may accept payment for services using t e w d m a n o any legal method of payment or payment on delivery.

SECTIONd 16.m :

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 36 - e a n e d r e l u [ A d SECTION 16.

e t 17 (1) packages shall be resealable, w l n d 18 child-resistant, compostable and recyclable or made from = = 19 a l recycled materials;

i a e r 20 (2) packages and labels shall not be designed a t m m 21 to be appealing to a child;

and d r e 22 (3) labels shall include:

c e s k 23 (a) for a package containing only e a n b 24 cannabis leaf or flower, the net weight of cannabis in the uh [g package;

.221014.5GLGo -t 46h - (b) identification of the licensee or g e i k licensees that produced or manufactured the cannabis product, h r i s the date on which the cannabis was harvested, the type of h cannabis product and the date on which the cannabis product was , t e u g manufactured and packaged;

e b l e e h (c) potency and pesticide use;

n d d i = = o h (d) a list of pharmacologically active l ] b d i a º e ingredients;

r i = r (e) for cannabis products containing t e w d m a n o non-cannabis ingredients, a list of all ingredients and a disclosured ofm nutritional: information for the product or cannabis extract disclosed in the same manner required under federal law for nutritional labeling for food for human consumption;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 37 - e a n e d r e l u [ A d disclosure of nutritional information for the product or cannabis extract disclosed in the same manner required under federal law for nutritional labeling for food for human consumption;

e t 17 (g) a logo designed by the division that w l n d 18 is distinctive in design, color, size and location such that = = 19 a l the logo notifies a reasonable person that the package contains i a e r 20 cannabis;

a t m m 21 (h) a warning of possible adverse d r e 22 effects of consumption and the New Mexico poison and drug c e s k 23 information center phone number;

e a n b 24 (i) an expiration date;

and u [ (j) other information as required by .221014.5GLG - 47 - rules promulgated pursuant to the Cannabis Regulation Act.

h g B.

In consultation with the department of o t h environment and consistent with industry standards, the g e i k division shall promulgate rules to:

h r i s (1) ensure that testing of cannabis products h occurs prior to distribution to cannabis retailers or sales by , t e u g integrated cannabis microbusinesses;

e b l e e h (2) specify how often licensees shall test n d d i = = o h cannabis products;

l ] b d i a º e (3) specify which persons bear the cost of r i = r testing cannabis products and medical cannabis;

t e tw 17d m a n o (4) provide for recordkeeping;

w l n d 18m (5): establish chain of custody protocols for = = 19 a l testing sample transportation;

ib a e rd 20s (6)º ensureo thatt testingn samples= are.221014.5GLGAIC aApril t1, m2021 m(3:02pm) 21s transportedk andm storede in- a38 manner- thate preventsa degradation,n e d r e 22l contamination,u tampering[ orA diversion;d (5) establish chain of custody protocols for testing sample transportation;

c(6) e s k 23 (7) specify protocols for testing sample e a n b 24 collection that ensure accurate test results, including u [ requiring that testing samples beare collectedtransported byand laboratorystored staffin .221014.5GLGa -manner 48that -prevents traineddegradation, incontamination, testingtampering sampleor collection;diversion;

(7) specify protocols for testing sample collection that ensure accurate test results, including requiring that testing samples be collected by laboratory staff trained in testing sample collection;

The division shall work cooperatively with the h g department of environment to implement inspection of cannabis o t h establishments to ensure the health and safety of employees in g e i k accordance with the Occupational Health and Safety Act and to eh tr 17i s determine compliance with rules promulgated by the wh l n d 18 environmental improvement board.

=, =t 19e au lg SECTION 19.

[NEW MATERIAL] RESEARCHING CANNABIS-- ie ab l e re 20h RECORDKEEPING.-- an td md mi 21= = o h A.

A cannabis research laboratory's research of l ] b d ri ea 22º e cannabis shall comply with the requirements set forth in cr ei s= kr 23 applicable law and rules.

t e w d m a n bo 24 B.

The division shall develop rules and procedures ud [m consistent: with industry standards to provide for recordkeeping .221014.5GLG - 49 - to ensure that cannabis products are not removed from the cannabis research laboratory premises.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 39 - e a n e d r e l u [ A d consistent with industry standards to provide for recordkeeping to ensure that cannabis products are not removed from the cannabis research laboratory premises.

e t 17 (2) that are false, deceptive or misleading, w l n d 18 including making unproven health benefit claims;

= = 19 a l (3) that are on billboards, posters, handbills i a e r 20 or other visual media that are located or can be viewed within ah tg m m 21 three hundred feet of a school, daycare center or church;

do rt eh 22 (4) that depict consumption by children or cg e si k 23 other persons who appear to be younger than twenty-one years of eh ar ni bs 24 age;

uh [ (5) that use predatory marketing and .221014.5GLG, -t 50e -u g advertising practices targeting minors;

or e b l e e h (6) that are designed using cartoon characters n d d i = = o h or to mimic any other product brand;

and l ] b d i a º e B.

r i = r (1) all advertisements and marketing to t e w d m a n o accurately and legibly identify all persons responsible for its content;d m :

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 40 - e a n e d r e l u [ A d content;

[NEW MATERIAL] CONTRACTS.--A contract related to the operation of a license is enforceable, and a contract entered into by a licensee or a licensee representative for conduct allowed pursuant to a cannabis establishment license or entered into by a person who allows property to be used by a e t 17 licensee or a licensee representative for conduct allowed w l n d 18 pursuant to a license shall not be deemed unenforceable on the = = 19 a l basis that the conduct allowed pursuant to the license is i a e r 20 prohibited by federal law.

a t m m 21 SECTION 22.

[NEW MATERIAL] PROVISION OF PROFESSIONAL d r e 22 SERVICES.--An attorney, accountant, insurance agent, real c e s k 23 estate agent, security guard or other person engaged in a e a n b 24 profession subject to state licensure shall not be subject to u [ disciplinary action by a professional association, a state .221014.5GLG - 51 - professional board or a state licensing entity because the professional provides professional services or assistance to h g prospective or licensed cannabis establishments or another o t h person in connection with activity that the professional g e i k reasonably believes complies with the Cannabis Regulation Act h r i s and rules promulgated pursuant to that act.

h SECTION 23.

[NEW MATERIAL]MATERIAL ] MEDICAL CANNABIS PROVISIONS , t e u g UNAFFECTED.--Nothing in the Cannabis Regulation Act shall be e b l e e h construed to limit a privilege or right of a qualified patient, n d d i = = o h a primary caregiver or a reciprocal participant participating l ] b d i a º e in the medical cannabis program or the use, dispensing, r i = r possession, prescribing, storage or transport of a prescription t e w d m a n o drug containing cannabis that is approved pursuant to the Federald Food,m Drug,: and Cosmetic Act.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 41 - e a n e d r e l u [ A d Federal Food, Drug, and Cosmetic Act.

[NEW MATERIAL] PROTECTIONS FOR THE USE OF CANNABIS.-- e t 17 A.

Conduct allowed pursuant to the Cannabis w l n d 18 Regulation Act shall not in itself constitute grounds for a = = 19 a l holder of a professional or occupational license to be subject i a e r 20 to professional discipline for providing advice or services a t m m 21 related to cannabis establishments or applications to operate d r e 22 cannabis establishments on the basis that cannabis is illegal c e s k 23 under federal law.

e a n b 24 B.

An applicant for a professional or occupational u [ license shall not be denied a license based solely on previous .221014.5GLG - 52 - employment related to cannabis establishments.

A person shall not be denied parental rights or custody of or visitation with a minor child by the state or local government based solely on conduct that is lawful pursuant to the Cannabis Regulation Act unlessHJCº.»HJC HJCºunless the person's behavior is such that it creates an unreasonable danger to the minor child that can be established by clear and convincing evidence.evidence.»HJC HJCºNothing in this subsection prevents law enforcement, the children, youth and families h g department or the courts from acting in the best interests of o t h the minor child.»HJC g e i k D.

D.A person currently under parole, probation or h r i s other state supervision or released awaiting trial or other h hearing shall not be punished or otherwise penalized based , t e u g solely on conduct that is lawful pursuant to the Cannabis e b l e e h Regulation Act unless prohibition on the use or possession of n d d i = = o h cannabis has been a specific condition of parole, probation or l ] b d i a º e other state supervision or release awaiting trial or other r i = r hearing.

At persone currentlyw underd parole,m probation or other state supervision or released awaiting trial or other hearing shall not be punished or otherwise penalized based solely on conduct that is lawful pursuant to the Cannabis Regulation Act unless prohibition on the use or possession of cannabis has been a specificn conditiono ofE. parole, probation or other state supervision or release awaiting trial or other hearing.

eA tperson 17shall E.not be denied eligibility in d m :

Ab persone shalld nots beº deniedo eligibilityt inn w= l.221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 42 - e a n e d 18r e l u [ A d public assistance programs or denied health care based solely = = 19 a l on conduct that is lawful pursuant to the Cannabis Regulation i a e r 20 Act unless required by federal law.

a t m m 21 SECTION 25.

[NEW MATERIAL] PERSONAL USE OF CANNABIS.-- d r e 22 A.

The following conduct is lawful for a person who c e s k 23 is twenty-one years of age or older and shall not constitute e a n b 24 grounds for detention, search or arrest of a person or search u [ of property, and cannabis products that relate to the conduct .221014.5GLG - 53 - are not contraband or subject to seizure or forfeiture pursuant to the Controlled Substances Act or the Forfeiture Act:

(3) transferring, without financial consideration, to a person who is twenty-one years of age or older not more than the amount of cannabis lawfully purchased h g and obtained pursuant to the Cannabis Regulation Act or the o t h medical cannabis program;

g e i k (4) ingesting or otherwise consuming cannabis eh tr 17i s or cannabis products purchased and obtained pursuant to the wh l n d 18 Cannabis Regulation Act or the medical cannabis program;

=, =t 19e au lg (5) possessing, using, displaying, purchasing, ie ab l e re 20h obtaining or manufacturing cannabis extract using nonvolatile an td md mi 21= = o h solvents, alcohol or carbon dioxide or no solvents;

l ] b d ri ea 22º e (6) manufacturing, transporting or giving away cr ei s= kr 23 to a person twenty-one years of age or older cannabis t e w d m a n bo 24 paraphernalia;

ud [m (7): assisting another person who is twenty-one .221014.5GLG - 54 - years of age or older in, or allowing property to be used in, any of the acts described in Paragraphs (1) through (6) of this subsection;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 43 - e a n e d r e l u [ A d (7) assisting another person who is twenty-one years of age or older in, or allowing property to be used in, any of the acts described in Paragraphs (1) through (6) of this subsection;

and provided further that if the person does not exceed the maximum number of cannabis plants, the person may possess the cannabis produced by the cannabis plants notwithstanding any weight e t 17 limits;

and w l n d 18 (10) transporting homegrown cannabis or mature = = 19 a l or immature cannabis plants when the person is moving the i a e r 20 person's residence to another location or for purposes of ah tg m m 21 testing or manufacturing.

do rt eh 22 B.

Paragraph (6) of Subsection A of this section is cg e si k 23 intended to meet the requirements of 21 U.S.C.

Section 863(f) eh ar ni bs 24 by authorizing under state law any person in compliance with uh [ this section to manufacture, possess or distribute cannabis .221014.5GLG, -t 55e -u g paraphernalia.

e b l e e h C.

None of the following shall, individually or in n d d i = = o h combination with each other, constitute reasonable articulable l ] b d i a º e suspicion of a crime and is not a basis to stop, detain or r i = r search a person:

t e w d m a n o (1) the odor of cannabis or cannabis extract ord ofm burnt: cannabis or cannabis extract;

(2)b thee possessiond ofs orº theo suspiciont ofn possession= of.221014.5GLGAIC cannabisApril without1, evidence2021 of(3:02pm) quantitys ink excessm ofe two- ounces44 of- cannabis,e sixteena gramsn ofe cannabisd extractr ande eightl hundredu milligrams[ A d or of edibleburnt cannabis;cannabis or cannabis extract;

or(2) (3) the possession of multipleor containersthe suspicion of possession of cannabis without evidence of quantity in excess of two ounces of cannabis, sixteen grams of cannabis extract andHJCºand»HJC HJCºor»HJC eight hundred milligrams of edible cannabis.cannabis;

or (3) the possession of multiple containers of cannabis without evidence of quantity in excess of two ounces of cannabis, sixteen grams of cannabis extract HJCº and»HJC HJCº or»HJC eight hundred milligrams of edible cannabis.

Paragraph (1) of Subsection A and Subsection C e t 17 of this section shall not apply when a law enforcement officer w l n d 18 is investigating whether a person is operating a vehicle or = = 19 a l watercraft while intoxicated or under the influence of or i a e r 20 impaired by alcohol or a drug or any combination thereof in a t m m 21 violation of Section 66-8-102 or 66-13-3 NMSA 1978.

d r e 22 SECTION 26.

[NEW MATERIAL] LIMITS ON PERSONAL USE-- c e s k 23 PENALTIES.-- e a n b 24 A.

Nothing in Section 25 of the Cannabis Regulation u [ Act shall be construed to:

.221014.5GLG - 56 - (1) allow a person to smoke cannabis products h g in a public place, except in a cannabis consumption area;

or o t h (2) restrict the ability of a person to g e i k prohibit conduct otherwise allowed in the Cannabis Regulation h r i s Act on the person's privately owned property.

h B.

A person who violates Paragraph (1) of , t e u g Subsection A of this section shall be subject to a civil e b l e e h penalty of fifty dollars ($50.00).

n d d i = = o h C.

As used in this section, "smoke" means to l ] b d i a º e inhale, exhale, burn or carry any lighted or heated device or r i = r pipe or any other lighted or heated cannabis products intended t e w d m a n o for inhalation, whether natural or synthetic, in any manner or ind anym form.:

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 45 - e a n e d r e l u [ A d in any form.

A person less than eighteen years of age, the family of a person less than eighteen years of age or a person legally obligated to care for and support a person less than e t 17 eighteen years age who is subject to the fines pursuant to w l n d 18 Subsection B of this section shall not be required to pay any = = 19 a l fees or fines pursuant to the Cannabis Regulation Act.

i a e r 20 SECTION 27.

[NEW MATERIAL] PERSONAL PRODUCTION OF a t m m 21 CANNABIS--PENALTIES.-- d r e 22 A.

Unless otherwise provided in the Cannabis c e s k 23 Regulation Act, it is unlawful for a person without a license e a n b 24 to intentionally produce cannabis products except as provided u [ in this section.

.221014.5GLG - 57 - B.

and (2) more than twelve mature or immature cannabis plants is guilty of a fourth degree felony and may be h g sentenced as provided in Section 31-18-15 NMSA 1978.

o t h C.

A person who is eighteen years of age or older g e i k but less than twenty-one years of age who intentionally h r i s produces:

h (1) up to six mature or immature cannabis , t e u g plants shall be issued a penalty assessment pursuant to Section e b l e e h 31-19A-1 NMSA 1978 and is subject to a fine of fifty dollars n d d i = = o h ($50.00);

el t] 17b d i a º e (2) more than six mature or immature cannabis wr li n= dr 18 plants and up to twelve mature or immature cannabis plants is =t =e 19w d m a ln o guilty of a misdemeanor and shall be sentenced pursuant to the id am e: r 20 provisions of Section 31-19-1 NMSA 1978;

andb ae td ms mº 21o (3)t moren than= twelve.221014.5GLGAIC matureApril or1, immature2021 d(3:02pm) rs ek 22m cannabise plants- is46 guilty- ofe a fourthn degreee felonyd andr shall c e sl ku 23[ beA sentencedd pursuant to the provisions of Section 31-18-1531-19-1 e a n b 24 NMSA 1978.1978;

uand [(3) D.more than twelve mature or immature cannabis plants is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.

AD. person who is less than eighteen years of age .221014.5GLG - 58 - who intentionally produces cannabis products is guilty of civil violation and shall be subject to:

A person who is less than eighteen years of age who intentionally produces cannabis products is guilty of civil violation and shall be subject to:

Unless otherwise provided in the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act, it h g is unlawful for a person without a license to intentionally eo t 17h traffic cannabis products.

wg le ni dk 18 C.

A person under eighteen years of age who =h =r 19i as l violates Subsection B of this section shall be subject to:

ih a e r 20 (1) attendance at a four-hour evidence-based a, t me mu 21g drug education and legal rights program at no cost to the de rb l e 22e h person;

or cn ed sd ki 23= = o h (2) four hours of community service.

el a] n b 24d i a º e D.

Except as otherwise provided in Section 14 of ur [i = r the Cannabis Regulation Act, a person eighteen years of age or .221014.5GLGt -e 59w -d m a n o older who violates Subsection B of this section is guilty of a misdemeanord andm shall: be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 47 - e a n e d r e l u [ A d misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.

[NEW MATERIAL]MATERIAL ] CANNABIS WITHIN RESTRICTED AREA--PENALTY.--Unless otherwise allowed in the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act, a person shall not possess or intentionally distribute any amount of a cannabis product on the premises of a school or daycare e t 17 center unless the person is a qualified patient, a primary w l n d 18 caregiver or a reciprocal participant;

provided that this = = 19 a l section shall not apply to a person who possesses a cannabis i a e r 20 product for authorized purposes on the premises of a licensed a t m m 21 cannabis training and education program.

A person who violates d r e 22 this section is guilty of a misdemeanor and shall be sentenced ch eg s k 23 pursuant to the provisions of Section 31-19-1 NMSA 1978.

eo at nh b 24 SECTION 30.

[NEW MATERIAL] UNLAWFUL POSSESSION OF ug [e i k CANNABIS--PENALTIES.--Except as allowed in the Cannabis .221014.5GLGh -r 60i -s Regulation Act and the Lynn and Erin Compassionate Use Act:

h A.

a person under twenty-one years of age shall not , t e u g possess cannabis products.

A person who violates this e b l e e h subsection is guilty of a civil violation and shall be subject n d d i = = o h to:

l ] b d i a º e (1) attendance at a four-hour evidence-based r i = r drug education and legal rights program at no cost to the t e w d m a n o person;

or (2)d fourm hours: of community service;

b e d s º o t n = .221014.5GLGAIC April 1, 2021 (3:02pm) s k m e - 48 - e a n e d r e l u [ A d (2) four hours of community service;