SB 100 — CANNABIS REGULATION

] F.

h (4) a cannabis retailer;

g o (5) a cannabis research laboratory;

t hr g e i k (6) a vertically integrated cannabis h r i s establishment;

h , t, (7) a cannabis producer microbusiness;

or e u g e b l e e h (8) an integrated cannabis microbusiness;

[F.]n G.d d i = = o h [F.

] G.

l ] b ,d i a º e (1) means a product obtained by separating er i = r t 17e w d resins, tetrahydrocannabinols or other substances from cannabis wm la n o d 18m by: extraction methods approved by the division;

andb =e =d 19s (2)º doeso nott includen the= weight.222413.2AIC ofFebruary any14, other2022 a(4:16pm) ls ik am e r- 204 ingredient- combinede witha cannabisn extracte tod preparer topicale orl au t[ mA md 21STBTC/SB oralby administrations,extraction food,methods drinkapproved orby anotherthe product;division;

dand r(2) edoes 22not [G.]include H.the weight of any other ingredient combined with cannabis extract to prepare topical or oral administrations, food, drink or another product;

"cannabis[G. flowers" means only the flowers c e s k 23 of a cannabis plant;

e] aH. n b 24 [H.] I.

"cannabis manufacturer"flowers" means aonly personthe uflowers [of that:a cannabis plant;

.222413.2[H. - 4 - STBTC/SB 100 (1) manufactures cannabis products;

] I.

"cannabis manufacturer" means a person that:

(1) manufactures cannabis products;

[I.][I. J.

] J.

h (2) has unprocessed cannabis products tested g o by a cannabis testing laboratory;

t hr g e (3) transports unprocessed cannabis products i k h r i s only to other cannabis establishments;

or h , t, (4) sells cannabis products wholesale;

[J.]e K.u g e b l [J.

"cannabis] producerK. microbusiness" means a cannabis producer at a single licensed premises that possesses no more than [two hundred] one thousand total mature cannabis e t 17 plants at any one time;

w"cannabis lproducer microbusiness" means a e e h n d 18d [K.]i L.cannabis producer at a single licensed premises that possesses = = o h l ] b ,d i a º e no more than [two hundred ] one thousand total mature cannabis r i = r t e w d plants at any one time;

"cannabism product" means a productn thato isd =m =: 19 or that contains cannabis or cannabis extract, including edible a l i a e r 20 or topical products that may also contain other ingredients;

ab e d s º o t mn = .222413.2AIC February 14, 2022 (4:16pm) s k m 21e [L.]- M.5 - e a n e d r e l u [ A d STBTC/SB 100 [K.

"cannabis] researchL. laboratory" means a d r e 22 facility that produces or possesses cannabis products and all c e s k 23 parts of the plant genus Cannabis for the purpose of studying e a n b 24 cannabis cultivation, characteristics or uses;

u"cannabis [product" [M.]means N.a product that is or that contains cannabis or cannabis extract, including edible or topical products that may also contain other ingredients;

"cannabis[L. retailer" means a person that .222413.2 - 5 - STBTC/SB 100 sells cannabis products to qualified patients, primary caregivers or reciprocal participants or directly to consumers;

[N.]] O.M.

"cannabis research laboratory" means a facility that produces or possesses cannabis products and all parts of the plant genus Cannabis for the purpose of studying cannabis cultivation, characteristics or uses;

[M.

] N.

"cannabis retailer" means a person that sells cannabis products to qualified patients, primary caregivers or reciprocal participants or directly to consumers;

[N.

] O.

[O.][O. P.

"cannabis] serverP. permit education provider" means a person that provides cannabis server education courses and examinations;

[P.]"cannabis Q.server permit education provider" means a person that provides cannabis server education courses h and examinations;

"cannabisg testingo laboratory"[P. means a person that samples, collects and tests cannabis products and transports cannabis products for [the purpose of] testing;

[Q.]] R.Q.

"cannabis trainingtesting andlaboratory" education program" means a practicalt orhr academicg curriculume offeredi byk aperson Newthat Mexicosamples, publiccollects post-secondary educational institution and approvedtests bycannabis theproducts divisionand thath isr designedi tos preparetransports studentscannabis eproducts t 17 for participation[the inpurpose theof cannabis] industry;testing;

wh l, nt, d[Q. 18 [R.] S.

] R.

"cannabis training and education program" e u g e b l e e h means a practical or academic curriculum offered by a New n d d i = = o h Mexico public post-secondary educational institution and l ] b ,d i a º e approved by the division that is designed to prepare students r i = r t e w d for participation in the cannabis industry;

m a n o d m :

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 6 - e a n e d r e l u [ A d STBTC/SB [R.] S.

= = 19 (1) means the cultivation, production, a l i a e r 20 possession, manufacture, storage, testing, researching, a t m m 21 labeling, transportation, couriering, purchase for resale, sale d r e 22 or consignment of cannabis products;

and c e s k 23 (2) does not include activities related only e a n b 24 to the medical cannabis program, to cannabis training and u [ education programs or to the personal cultivation or use of .222413.2 - 6 - STBTC/SB 100 cannabis;

[S.][S. T.

] T.

[T.][T. U.

] U.

[U.][U. V.

] V.

h (1) means a person that controls a financial g o or voting interest of ten percent or more of, or an officer or t hr g e board member of, a cannabis establishment;

and i k h r i s (2) does not include a bank or licensed h , t, lending institution;

[V.]e W.u g e b l [V.

"cultivation"] meansW. any activity involving the planting, growing, harvesting, drying, curing, grading or trimming of cannabis;

"cultivation" means any activity involving e te 17h [W.]n X.d d i the planting, growing, harvesting, drying, curing, grading or = = o h l ] b ,d i a º e trimming of cannabis;

"department"r meansi the= regulationr andt e w l n d 18[W. licensing department;

=] =X. 19 [X.] Y.

"director""department" means the directorregulation ofand them a ln io ad em r: 20 division;

ab e d s º o t mn = .222413.2AIC February 14, 2022 (4:16pm) s k m 21e [Y.]- Z.7 - e a n e d r e l u [ A d STBTC/SB 100 licensing department;

"division"[X. means the cannabis control d r e 22 division of the department;

c] eY. s k 23 [Z.] AA.

"dry"director" weight basis", when used in the e a n b 24 context of regulation of commercial cannabis activity, means a u [ process by which delta-9-tetrahydrocannabinol concentration is .222413.2 - 7 - STBTC/SB 100 measured relative to the aggregatedirector weight of all parts of the plantdivision; genus Cannabis, whether growing or not, including the leaves of the plant, the flowers and buds of the plant, the seeds of the plant, the resin of the plant and the stalks of the plant at the point of harvest by a licensee and with no moisture added to the harvested plant;

[AA.][Y. BB.

"facility"] meansZ. a building, space or grounds licensed for the production, possession, testing, manufacturing or distribution of cannabis, cannabis extracts or cannabis products;

[BB.]"division" CC.means the cannabis control division of the department;

"financial[Z. consideration" means value that is given or received, directly or indirectly, through sales, barter, trade, fees, charges, dues, contributions or donations;

[CC.]] DD.AA.

"homegrown""dry orweight "homemade"basis", when used in the context of regulation of commercial cannabis activity, means growna orprocess madeby forwhich purposesdelta-9-tetrahydrocannabinol thatconcentration areis notmeasured dependentrelative orto conditionedthe uponaggregate eweight tof 17all parts of the provisionplant genus Cannabis, whether growing or receiptnot, including the leaves of financialthe consideration;plant, the flowers and buds of the plant, the seeds of the plant, the resin of the plant and the stalks of the plant at the point of harvest by a licensee and with no moisture added to the harvested plant;

w[AA. l n d 18 [DD.] EE.

"household"] meansBB. a housing unit and = = 19 includes any place in or around the housing unit at which an a l i a e r 20 occupant of the housing unit produces, manufactures, keeps or a t m m 21 stores homegrown cannabis or homemade cannabis products;

d"facility" rmeans ea 22building, [EE.]space FF.or grounds licensed for the production, possession, testing, h manufacturing or distribution of cannabis, cannabis extracts or g o cannabis products;

"immaturet cannabishr plant"g means a c e si k 23[BB. cannabis plant that has no observable flowers or buds;

e] aCC. n b 24 [FF.] GG.

"industry"financial standards"consideration" means thevalue prevailingh ur [i customarys standardsthat ofis businessgiven practiceor inreceived, thedirectly cannabisor .222413.2indirectly, -through 8h -, STBTC/SBt, 100sales, industrybarter, intrade, jurisdictionsfees, withincharges, thedues, Unitedcontributions States;or e u g e b l e e h donations;

[GG.]n HH.d d i = = o h [CC.

] DD.

"homegrown" or "homemade" means grown or l ] b ,d i a º e made for purposes that are not dependent or conditioned upon r i = r t e w d the provision or receipt of financial consideration;

m a n o d m :

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 8 - e a n e d r e l u [ A d STBTC/SB [DD.] EE.

"household" means a housing unit and includes any place in or around the housing unit at which an occupant of the housing unit produces, manufactures, keeps or stores homegrown cannabis or homemade cannabis products;

[EE.

] FF.

"immature cannabis plant" means a cannabis plant that has no observable flowers or buds;

[FF.

] GG.

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

[GG.

] HH.

provided that the person shall not possess more than [two hundred]hundred ] one thousand total mature cannabis plants at any one time;

h (2) manufacture of cannabis products at a g o single licensed premises;

t hr g e [(3) sales and transportation of only cannabis i k h r i s products produced or manufactured by that person;

h , t, (4)] (3) operation of only one retail e u g e b l establishment;

and e e h n d d i [(5)] (4) couriering of cannabis products to = = o h l ] b ,d i a º e qualified patients, primary caregivers or reciprocal er i = r t 17e w d participants or directly to consumers;

wm la n o d 18m [HH.]: II.

"licensedb premises"e meansd as locationº thato =t n = 19.222413.2AIC includes:February 14, 2022 (4:16pm) s k m e - 9 - e a n e d r e l u [ A d STBTC/SB 100 [HH.

a] lII. i a e r 20 (1) all enclosed public and private areas at a t m m 21 the location that are used in the business and includes d r e 22 offices, kitchens, restrooms and storerooms;

c"licensed epremises" smeans k 23 (2) all areas outside of a buildinglocation that areincludes: e a n b 24 specifically included in the license for the production, u [ manufacturing, wholesale sale, [or] retail sale or consumption .222413.2 - 9 - STBTC/SB 100 of cannabis products;

(1) all enclosed public and private areas at the location that are used in the business and includes offices, kitchens, restrooms and storerooms;

(2) all areas outside of a building that are specifically included in the license for the production, manufacturing, wholesale sale, [or ] retail sale or consumption of cannabis products;

"local jurisdiction" means a h municipality, home rule municipality or county;

[JJ.]g LL.o [JJ.

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

[KK.]"manufacture" MM.means to compound, blend, t hr g e i k extract, infuse, package or otherwise prepare a cannabis h r i s product;

"medicalh cannabis", meanst, cannabis[KK. products used by a qualified patient or reciprocal participant in accordance with the Lynn and Erin Compassionate Use Act;

[LL.]] NN.MM.

"medical cannabis" means cannabis program"e meansu theg e tb 17l programe createde pursuanth toproducts theused Lynnby anda Erinqualified Compassionatepatient Useor wreciprocal lparticipant n d 18d i = = o h in accordance with the Lynn and Erin Compassionate Use Act;

=l =] 19b [MM.],d OO.i a º e [LL.

"medical] cannabisNN. registry" means the a l i a e r 20 system by which the department of health approves or denies a t m m 21 applications and issues and renews registry identification d r e 22 cards for qualified patients;

c"medical cannabis program" means the r i = r t e sw kd 23program [NN.]created PP.pursuant to the Lynn and Erin Compassionate Use m a n o d m :

"primaryb caregiver"e meansd as residentº ofo et a n b= 24.222413.2AIC NewFebruary Mexico14, who2022 is(4:16pm) ats leastk eighteenm yearse of age and who is u [ responsible for managing the well-being of a qualified patient .222413.2 - 10 - STBTC/SBe 100a withn respecte tod ther medicale usel ofu cannabis[ pursuantA tod theSTBTC/SB Lynn and Erin Compassionate Use Act;

[OO.][MM.] QQ.OO.

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

[NN.

] PP.

"primary caregiver" means a resident of New Mexico who is at least eighteen years of age and who is responsible for managing the well-being of a qualified patient with respect to the medical use of cannabis pursuant to the Lynn and Erin Compassionate Use Act;

[OO.

] QQ.

and places used in connection with public h passenger transportation;

[PP.]g RR.o [PP.

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

[QQ.]"qualified SS.patient" means a resident of t hr g e New Mexico who holds a registry identification card pursuant to i k h r i s the Lynn and Erin Compassionate Use Act;

"reciprocalh participant", meanst, a[QQ. person who is not a resident of New Mexico and who holds proof of enrollment by a governmental regulatory authority to participate in the medical cannabis program of another state of e t 17 the United States, the District of Columbia or a territory or w l n d 18 commonwealth of the United States in which the person resides = = 19 or a person who holds proof of enrollment by a governmental a l i a e r 20 regulatory authority of a New Mexico Indian nation, tribe or a t m m 21 pueblo to participate in its medical cannabis program;

d] rSS. e 22 [RR.] TT.

"retail"reciprocal establishment"participant" means a locationperson ce u g e sb kl 23who atis whichnot cannabisa productsresident areof soldNew toMexico qualifiedand patients,who holds proof of e ae h n bd 24d primaryi caregiversenrollment andby reciprocala participantsgovernmental andregulatory directlyauthority to u= [= consumers;o h l ] b ,d i a º e participate in the medical cannabis program of another state of r i = r t e w d the United States, the District of Columbia or a territory or m a n o d m :

.222413.2b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 11 - e a n e d r e l u [ A d STBTC/SB 100 [SS.]commonwealth UU.of the United States in which the person resides or a person who holds proof of enrollment by a governmental regulatory authority of a New Mexico Indian nation, tribe or pueblo to participate in its medical cannabis program;

[RR.

] TT.

"retail establishment" means a location at which cannabis products are sold to qualified patients, primary caregivers and reciprocal participants and directly to consumers;

[SS.

] UU.

[TT.][TT. VV.

] VV.

and [UU.][UU. WW.

] WW.

h (2) a cannabis manufacturer;

g o (3) a cannabis producer;

and t hr g e i k (4) a cannabis retailer." h r i s SECTION 3.

Section 26-2C-3 NMSA 1978 (being Laws 2021 h , t, (1st S.S.), Chapter 4, Section 3) is amended to read:

e u g e b l e e h "26-2C-3.

DIVISION--POWERS AND DUTIES--RULEMAKING--JOINT n d d i = = o h POWERS AGREEMENT WITH DEPARTMENT OF ENVIRONMENT--ADVISORY l ] b ,d i a º e COMMITTEE CREATED--MEMBERSHIP–DUTIES.-- er i = r t 17e w d m a n o A.

The "cannabis control division" is created in w l n d 18m the: department to administer the Cannabis Regulation Act and = = 19 the licensing provisions of the Lynn and Erin Compassionate Use a l i a e r 20 Act and rules promulgated in accordance with those acts.

Rulesb ae d s º o t mn m= 21.222413.2AIC shallFebruary be14, adopted2022 and(4:16pm) promulgateds ask providedm ine the- State12 Rules- e a n e d r e 22l Act.u [ A d STBTC/SB the department to administer the Cannabis Regulation Act and the licensing provisions of the Lynn and Erin Compassionate Use Act and rules promulgated in accordance with those acts.

cRules eshall sbe kadopted 23and B.promulgated as provided in the State Rules Act.

NoB. later than January 1, 2022, the division e a n b 24 shall promulgate rules that are consistent with industry u [ standards necessary for the division to carry out its duties .222413.2 - 12 - STBTC/SB 100 pursuant to the Cannabis Regulation Act as follows:

No later than January 1, 2022, the division shall promulgate rules that are consistent with industry standards necessary for the division to carry out its duties pursuant to the Cannabis Regulation Act as follows:

h (a) inspection and monitoring of a g o cannabis establishment;

t hr g e (b) a cannabis establishment's i k h r i s recordkeeping and tracking of cannabis from seed until sale;

h , t, (c) prevention of the sale or diversion e u g e b l of cannabis products in commercial cannabis activity to a e e h n d d i person under the age of twenty-one;

= = o h l ] b ,d i a º e (d) labeling of cannabis products er i = r t 17e w d packaged, sold or distributed by a cannabis establishment;

and wm la n o d 18m (e): language for labels of cannabis = = 19 products regarding potential adverse effects;

ab le id s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 13 - e a n e d r 20e (4)l rulesu providing[ that:A d STBTC/SB 100 (e) language for labels of cannabis products regarding potential adverse effects;

a(4) trules mproviding mthat: 21 (a) a person who is twenty-one years old d r e 22 or older shall not purchase more than two ounces of cannabis, c e s k 23 sixteen grams of cannabis extract and eight hundred milligrams e a n b 24 of edible cannabis at one time;

and(a) ua [person (b)who asis totwenty-one commercialyears old or older shall not purchase more than two ounces of cannabis, sixteen grams of cannabis activity:extract and eight hundred milligrams of edible cannabis at one time;

.222413.2 - 13 - STBTC/SB 100 1) a consumer shall not possess more than two ounces of cannabis, sixteen grams of cannabis extract and eight(b) hundredas milligramsto ofcommercial edible cannabis outsideactivity: the consumer's private residence;

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;

provided that the division h may adopt requirements for apportionment and packaging of g o cannabis products;

t hr g e i k (5) rules on advertising and marketing of h r i s cannabis products;

h , t, (6) rules on how a licensee may display e u g e b l e e h cannabis products for sale;

(7)n proceduresd thatd promotei and= encourage= fullo participationh in(7) theprocedures cannabis industry governed by the Cannabis e t 17 Regulation Act by representatives of communities that havepromote beenand wencourage full l n] db 18,d disproportionatelyi harmeda byº ratese ofparticipation arrestin through the = = 19 enforcement of cannabis prohibitionsindustry ingoverned lawby andthe policy,Cannabis ruralr a l i a= e r 20t communitiese likelyw tod beRegulation impactedAct by cannabisrepresentatives productionof andcommunities athat thave mbeen m 21a agriculturaln producerso from economically disadvantaged d rm e: 22 communities;

cb e d s kº 23o (8)t proceduresn that= promote.222413.2AIC andFebruary encourage14, 2022 (4:16pm) s k m e - 14 - e a n be 24d racial,r ethnic,e genderl andu geographic[ diversityA andd NewSTBTC/SB Mexicodisproportionately uharmed [by residencyrates amongof licensearrest applicants,through licenseesthe enforcement of cannabis prohibitions in law and policy, rural communities likely to be impacted by cannabis .222413.2production -and 14agricultural -producers STBTC/SBfrom 100economically industrydisadvantaged employees;communities;

(8) procedures that promote and encourage racial, ethnic, gender and geographic diversity and New Mexico residency among license applicants, licensees and cannabis industry employees;

h u » r (10) in consultation with the economic t h g e development department, development of a technical assistance l i h r resource guide for rural New Mexico residents who are seeking i s h , e h to establish vertically integrated cannabis establishments, t u g e b l cannabis producer microbusinesses or integrated cannabis e e , gh n d d i microbusinesses;

= = o h l ] b ,d i a º r (11) in consultation with the department of e r = t 17e w d environment, rules to establish:

wm la n o d 18m (a): health and safety standards = = 19 applicable to the research, production and manufacture of a l i a e r 20 cannabis products;

ab r e t mº o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m 21e (b)- standards15 for- foode anda productn e d r e 22l u [ A d STBTC/SB 100 (a) health and safety standards applicable to the research, production and manufacture of cannabis products;

and(b) cstandards e s k 23 (c) which additives are approved for food and eproduct asafety napplicable bto 24 prohibited from inclusion in cannabis products;

providedand that(c) uwhich [additives nicotineare shallapproved befor prohibited;and prohibited from inclusion in cannabis products;

.222413.2provided -that 15nicotine -shall STBTC/SBbe 100prohibited; (12) in consultation with the New Mexico department of agriculture and the department of environment, rules to establish standards for quality control, inspection and testing of cannabis products for potency and contaminants, except for cannabis produced or harvested for research purposes and not for ingestion;

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

and h (13) in consultation with the state fire g o marshal's office of the homeland security and emergency t hr g e i k management department, rules with regard to health and safety h r i s of cannabis establishments.establishments .

h , t, C.

No later than January 1, 2022, the division e u g e b l e e h shall promulgate rules that are consistent with industry n d d i = = o h standards relating to cannabis training and education programs, l ] b ,d i a º e including:

er i = r t 17e w d (1) qualifications and procedures for wm la n o d 18m licensure;:

andb =e =d 19s (2)º physicalo security,t cybersecurityn and,= if.222413.2AIC aFebruary l14, i2022 a(4:16pm) es rk 20m applicable,e security- of16 information- collectede under the federal a tn me md 21r Healthe Insurancel Portabilityu and[ AccountabilityA Act of 1996 d rSTBTC/SB elicensure; 22 requirements.

cand e(2) sphysical ksecurity, 23cybersecurity D.and, if applicable, security of information collected under the federal Health Insurance Portability and Accountability Act of 1996 requirements.

NoD. later than January 1, 2022, the division e a n b 24 shall promulgate rules in consultation with the New Mexico u [ department of agriculture, the department of environment and .222413.2 - 16 - STBTC/SB 100 the office of the state engineer to establish:

No later than January 1, 2022, the division shall promulgate rules in consultation with the New Mexico department of agriculture, the department of environment and the office of the state engineer to establish:

h E.

The department may enter into a joint powers g o agreement with the department of environment to ensure the t hr g e health and safety of commercial facilities that produce edible i k h r i s or topical cannabis products.

h , t, [E.] F.

No later than January 1, 2022, the division e u g e b l shall adopt rules in consultation with the department of health e e h n d d i to establish standards and determinations on requirements for = = o h l ] b ,d i a º e reserving cannabis products for sale to qualified patients, er i = r t 17e w d primary caregivers and reciprocal participants.

wm la n o d 18m [F.]: G.

Theb division shall collect and publish = = 19 annually on the division's website, and present to the a l i a e rd 20s appropriateº interimo committee of the legislature, a report a t mn m= 21.222413.2AIC describingFebruary demographic14, data2022 on(4:16pm) license applicants, controlling d r e 22 persons and employees of cannabis establishments, including c e s k 23m race,e ethnicity,- gender,17 age,- residential status and whether e a n be 24d ther applicants,e persons,l employees or the locations where the u [ cannabisA productsd are produced, manufactured, sold, tested or .222413.2 - 17 - STBTC/SB 100 researched[F. are located in an underserved rural community, including tribal, acequia, land grant-merced or other rural historic communities.

] G.

The division shall collect and publish annually on the division's website, and present to the appropriate interim committee of the legislature, a report describing demographic data on license applicants, controlling persons and employees of cannabis establishments, including race, ethnicity, gender, age, residential status and whether the applicants, persons, employees or the locations where the cannabis products are produced, manufactured, sold, tested or researched are located in an underserved rural community, including tribal, acequia, land grant-merced or other rural historic communities.

The "cannabis regulatory advisory h committee" shall be created no later than September 1, 2021.

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

A person wm la n o d 18m appointed: to the cannabis regulatory advisory committee shall = = 19 not hold any ownership interest or investment in a licensed a l i a e r 20 person pursuant to the Cannabis Regulation Act;

providedb thatr ae t mº mo 21t then superintendent= may.222413.2AIC appointFebruary a14, person2022 who(4:16pm) holdss ank ownershipm e - 18 - e a n e d r e 22l u [ A d STBTC/SB appointed to the cannabis regulatory advisory committee shall not hold any ownership interest or investment in a licensed person aspursuant ato nonvotingthe member.Cannabis Regulation Act;

Theprovided cthat ethe ssuperintendent kmay 23appoint committeeSTBTCºa»STBTC shallSTBTCºone»STBTC consistperson ofwho theholds followingan members:ownership interest in a licensed STBTCºperson»STBTC STBTCºcannabis establishment and another person who holds an ownership interest in a licensed cannabis microbusiness.»STBTC as STBTCºa»STBTC nonvoting STBTCº member»STBTC STBTCºmembers»STBTC.

eThe acommittee nshall bconsist 24of (1) the chieffollowing publicmembers: defender or the chief u [ public defender's designee;

.222413.2(1) -the 18chief -public STBTC/SBdefender 100or (2) a district attorney appointed by the Newchief Mexicopublic districtdefender's attorneydesignee; association;

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

h (4) a county sheriff appointed by the g o executive director of the New Mexico association of counties;

t hr g e and i k h r i s (5) one member for each of the following h , t, groups or professional qualifications, appointed by the e u g e b l superintendent:

e e h n d d i = = o h (a) a cannabis policy advocacy l ] b ,d i a º e organization;

r i = r t e w d (b) a labor organization;

(c)m a qualifiedn patient;o d m :

(d)b ae stated ors localº agencyo witht relevantn expertise= as.222413.2AIC theFebruary director14, and2022 the(4:16pm) superintendents deemk m e t- 1719 appropriate;- e a n e d r e l u [ A d STBTC/SB 100 (c) a qualified patient;

w(d) la nstate d 18 (e) an Indian nation, tribe or pueblolocal =agency = 19 with relevant expertise as the director and the superintendent a l i a e r 20 deem appropriate;

a(e) tan mIndian mnation, 21tribe (f)or pueblo with relevant expertise inas publicthe health;director and the superintendent deem appropriate;

d(f) r e 22 (g) expertise in regulatingpublic commercialhealth; c e s k 23 activity for adult-use intoxicating substances;

e(g) a n b 24 (h) expertise andin experienceregulating incommercial cannabisactivity ufor [adult-use laboratoryintoxicating science;substances;

.222413.2(h) -expertise 19and -experience STBTC/SB 100 (i) expertise in environmentalcannabis laboratory science;

(i) expertise in environmental science;

h (l) expertise in other relevant areas as g o the director and the superintendent deem appropriate;

and t hr g e i k (m) previous experience as a cannabis h r i s retailer, cannabis producer or cannabis manufacturer and who is h , t, a nonvoting member.

e u g e b l e e h [H.] J.

The cannabis regulatory advisory committee n d d i = = o h shall elect from among its members a chair and such other l ] b ,d i a º e officers as it deems necessary.

The committee shall meet at r i = r t e w d the call of the chair, the director or the superintendent.

A majoritym of members currently serving constitutes a quorumn foro thed conductm of: business.

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 20 - e a n e d r e l u [ A d STBTC/SB majority of members currently serving constitutes a quorum for the conduct of business.

e t 17 [I.] K.

Public voting members of the cannabis w l n d 18 regulatory advisory committee are entitled to receive per diem = = 19 and mileage as provided for state employees pursuant to the Per a l i a e r 20 Diem and Mileage Act and shall receive no other compensation, a t m m 21 perquisite or allowance.

d r e 22 [J.] L.

c e s k 23 (1) monitor the supply and demand of cannabis e a n b 24 products produced in New Mexico by licensees and present u [ annually to the appropriate interim committee of the .222413.2 - 20 - STBTC/SB 100 legislature the impacts of supply on illicit cannabis products markets and adequate supply of cannabis products for qualified patients and reciprocal participants;

(2) request the department of public safety to h enforce the provisions of the Cannabis Regulation Act as deemed g o necessary;

and t hr g e (3) undertake studies and conduct courses of i k h r i s instruction for division employees that will improve the h , t, operations of the division and advance its purposes." e u g e b l SECTION 4.

Section 26-2C-5 NMSA 1978 (being Laws 2021 e e h n d d i (1st S.S.), Chapter 4, Section 5) is amended to read:

= = o h l ] b ,d i a º e "26-2C-5.

DEPARTMENT OF HEALTH--DUTIES--TRANSFER OF LICENSINGr DUTIES.--Excepti for= administrationr oft thee medicalw cannabisd registry,LICENSING theDUTIES.--Except power,for dutyadministration and authority of the department of health related to the medical cannabism programa shall be transferred to the division on [the effective date of e t 17 the Cannabis Regulation Act] June 29, 2021." w l n o d 18m SECTION: 5.

Sectionb 26-2C-6e NMSAd 1978s (beingº Lawso 2021t =n = 19.222413.2AIC (1stFebruary S.S.),14, Chapter2022 4,(4:16pm) Sections 6)k ism amendede - 21 - e a n e d r e l u [ A d STBTC/SB 100 cannabis registry, the power, duty and authority of the department of health related to read:the medical cannabis program shall be transferred to the division on [the effective date of the Cannabis Regulation Act] June 29, 2021." SECTION 5.

aSection l26-2C-6 iNMSA a1978 e(being rLaws 202021 "26-2C-6.(1st S.S.), Chapter 4, Section 6) is amended to read:

LICENSING"26-2C-6. CANNABIS ACTIVITIES--LIMITATIONS-- a t m m 21 MEDICAL CANNABIS LEGACY LICENSING--CANNABIS SHORTAGE FOR d r e 22 MEDICAL PROGRAM.-- c e s k 23 A.

TheLICENSING divisionCANNABIS shallACTIVITIES--LIMITATIONS-- regulateMEDICAL andCANNABIS administerLEGACY andLICENSING--CANNABIS eSHORTAGE aFOR nMEDICAL bPROGRAM.-- 24A. may collect fees in connection with the administration of:

uThe [division (1)shall commercialregulate cannabisand activityadminister and licensingmay .222413.2collect -fees 21in -connection STBTC/SBwith 100the relatedadministration toof: commercial cannabis activity;

(1) commercial cannabis activity and licensing related to commercial cannabis activity;

and (3) all aspects of cannabis relating to h cannabis training and education programs.

g o B.

The division shall follow the provisions of the t hr g e i k Uniform Licensing Act when licensing or permitting the h r i s following:

h , t, (1) cannabis consumption areas;

e u g e b l e e h (2) cannabis couriers;

n d d i = = o h (3) cannabis manufacturers;

l ] b ,d i a º e (4) cannabis producer microbusinesses;

r i = r t e w d m a n o (5) cannabis producers;

(6)d cannabism research: laboratories;

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 22 - e a n e d r e l u [ A d STBTC/SB (6) cannabis research laboratories;

e t 17 (9) cannabis testing laboratories;

w l n d 18 (10) cannabis training and education programs;

= = 19 (11) integrated cannabis microbusinesses;

and a l i a e r 20 (12) vertically integrated cannabis a t m m 21 establishments.

d r e 22 C.

The division shall include a clear designation c e s k 23 on all licenses and permits that indicates whether the license e a n b 24 or permit is for medical cannabis activity, commercial cannabis u [ activity or both or for cannabis training and education .222413.2 - 22 - STBTC/SB 100 programs.

The division shall issue a license to a cannabis retailer applicant at a discount if the applicant provides documentation of an agreement to accept cannabis products on h consignment from a cannabis producer microbusiness or an g o integrated cannabis microbusiness licensed pursuant the t hr g e Cannabis Regulation Act.

i k h r i s E.

A license is valid for twelve months from the h , t, date the license is issued and may be renewed annually, except e u g e b l that a license issued for a cannabis training and education e e h n d d i program is valid until terminated by the licensee or suspended = = o h l ] b ,d i a º e or revoked by the division.

r i = r t e w d F.

The director shall not renew a license issued pursuantm to the provisions of the Cannabis Regulation Act until the director receives notification from the secretary of taxation and revenue or the secretary's designee that on a en to 17d certainm date::

wb le d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 23 - e a n e d 18r (1)e l u [ A d STBTC/SB 100 pursuant to the licenseeprovisions isof notthe Cannabis Regulation Act until the director receives notification from the secretary of taxation and revenue or the secretary's designee that on a delinquentcertain taxpayer;date:

=(1) =the 19licensee andis anot l i a edelinquent rtaxpayer; 20 (2) there are no unfiled tax returns due from a t m m 21 engaging in business authorized by the license.

dand r(2) ethere 22are G.no unfiled tax returns due from engaging in business authorized by the license.

NoG. license shall be transferable or assignable c e s k 23 from a licensee to another person, except that a nonprofit e a n b 24 corporation that was incorporated in order to qualify for a u [ license as a licensed nonprofit producer pursuant to department .222413.2 - 23 - STBTC/SB 100 of health rules under the Lynn and Erin Compassionate Use Act may transfer its license in the following manner:

(1)No thelicense nonprofit corporation shall informbe thetransferable divisionor inassignable writingfrom ofa itslicensee desire to transferanother itsperson, licenseexcept tothat a for-profitnonprofit corporation asthat providedwas incorporated in Sectionorder 12to qualify for a license as a licensed nonprofit producer pursuant to department of thishealth 2022rules act;under the Lynn and Erin Compassionate Use Act may transfer its license in the following manner:

(2)(1) the nonprofit corporation shall specifyinform to the division in writing theof intendedits recipientdesire corporationto oftransfer theits license andto alla controllingh personsfor-profit corporation as provided in Section 12 of thethis recipient2022 corporation;u » r act;

(3)t theh controllingg personse of(2) the recipientnonprofit corporation shall providespecify anyto informationl toi h r i s the division thatin wouldwriting otherwisethe beintended requiredrecipient corporation of h , e h the license and all controlling persons of athe cannabisrecipient licenset applicant;u g e b l corporation;

(4)e upone receipt, ofgh then requiredd informationd fromi = = o h (3) the controlling persons of the recipient corporation,l the] eb t,d 17i divisiona º r corporation shall transferprovide any information to the licensedivision bythat issuinge newr license= wt le nw d 18would certificatesotherwise inbe required of the namecontrolling persons of thea recipientm corporation;a n o d m :

=b =r 19e (5)t theº divisiono shallt issuen a= statement.222413.2AIC toFebruary a14, l2022 i(4:16pm) as ek rm 20e both- the24 nonprofit- corporatione anda then newe licenseed statingr ae tl mu m[ 21A thatd theSTBTC/SB transfercannabis haslicense occurred;applicant;

d(4) rupon ereceipt 22of (6) the transferredrequired licenseinformation shallfrom remainthe incontrolling cpersons eof sthe krecipient 23corporation, effect for the samedivision periodshall thattransfer the nonprofitlicense corporation'sby eissuing anew nlicense bcertificates 24in licensethe wouldname haveof beenthe effective;recipient corporation;

and(5) u [ (7) the transferreddivision license shall beissue eligiblea .222413.2statement -to 24both -the STBTC/SBnonprofit 100corporation forand renewal on the samenew datelicensee stating that the nonprofittransfer corporation'shas licenseoccurred; would have been eligible for renewal.

(6) the transferred license shall remain in effect for the same period that the nonprofit corporation's license would have been effective;

and (7) the transferred license shall be eligible for renewal on the same date that the nonprofit corporation's license would have been eligible for renewal.

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

t hr g e [H.] I.

Except for verification of age, the i k h r i s division shall not require licensees to request information h , t, from consumers or impose any residency requirement upon e u g e b l consumers for the purchase of cannabis products pursuant to the e e h n d d i commercial cannabis activity authorized by the Cannabis = = o h l ] b ,d i a º e Regulation Act.

The division may require licensees to request informationr fromi consumers= forr thet purchasee ofw cannabisd productsinformation pursuantfrom toconsumers thefor medical cannabis program, which may include the presentationpurchase of legalcannabis identificationm issueda byn ano authorizedd governmentalm entity: or other documents as required e t 17 by the medical cannabis program.

wb le d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 25 - e a n e d 18r [I.]e J.l u [ A d STBTC/SB 100 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.

Except[I. as otherwise provided in the = = 19 Cannabis Regulation Act, the division shall not limit the a l i a e r 20 number of licensed premises a licensee may occupy or operate a t m m 21 under a license.

Multiple] licenseesJ. may occupy a single d r e 22 licensed premises, and the division shall not place any c e s k 23 restriction or prohibition on the number of licensees occupying e a n b 24 a single licensed premises or on the number of licensed u [ premises of a cannabis establishment except as otherwise .222413.2 - 25 - STBTC/SB 100 specifically provided for by the Cannabis Regulation Act.

Except as otherwise provided in thisthe subsection,Cannabis aRegulation licenseeAct, maythe conductdivision anyshall lawfulnot activitylimit orthe anynumber combination of lawful activities at a licensed premises [provided that the licensee is not a licensee pursuantmay tooccupy theor Liquoroperate Controlunder Act].a license.

CannabisMultiple licensees may occupy a single licensed premises, and alcoholicthe beveragesdivision shall not beplace soldany restriction or consumedprohibition on the samenumber premises.of licensees occupying a single licensed premises or on the number of licensed premises of a cannabis establishment except as otherwise specifically provided for by the Cannabis Regulation Act.

K.Except as otherwise provided in this subsection , a licensee may conduct any lawful activity or any combination of lawful activities at a licensed premises [provided that the licensee h is not a licensee pursuant to the Liquor Control Act].

Smokingu in» ar cannabisCannabis consumptionand areaalcoholic onbeverages 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 infiltratebe othersold indoor workplaces or otherconsumed indoort publich placesg wheree smokingon is otherwise prohibited pursuant to the Deesame Johnsonpremises. Clean Indoor Air Act.

l i h r i s K.

Smoking in a cannabis consumption area on a h , e h licensed premises shall be allowed only if the cannabis t u g e b l consumption area is in a designated smoking area or in a e e , gh n d d i = = o h standalone building from which smoke does not infiltrate other l ] b ,d i a º r indoor workplaces or other indoor public places where smoking e r = t e w d is otherwise prohibited pursuant to the Dee Johnson Clean m a n o d m :

b r e t º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 26 - e a n e d r e l u [ A d STBTC/SB Indoor Air Act.

Licensees are specifically allowed to conduct other licensed activities, including activities e t 17 pursuant to the Hemp Manufacturing Act [except for sales of w l n d 18 alcoholic beverages] and the Liquor Control Act, except that a = = 19 licensee that also holds a license pursuant to the Liquor a l i a e r 20 Control Act shall not co-locate any cannabis- and alcohol- a t m m 21 related licensed activities.

d[K. r e 22 [K.] M.

A] personM. properly licensed and in good c e s k 23 standing pursuant to the Lynn and Erin Compassionate Use Act on e a n b 24 the effective date of the Cannabis Regulation Act may continue u [ to operate under that license for medical cannabis until .222413.2 - 26 - STBTC/SB 100 comparable licenses for commercial cannabis activity are available.

A person properly licensed and in good standing pursuant to the Lynn and Erin Compassionate Use Act on the effective date of the Cannabis Regulation Act may continue to operate under that license for medical cannabis until comparable licenses for commercial cannabis activity are available.

A facility of such a licensee, upon issuance of the h applicable cannabis establishment license, shall constitute g o licensed premises of the licensee and the licensee shall be t hr g e entitled to continued and uninterrupted operations of the i k h r i s licensed premises.

As to activity under the medical cannabis h , t, program, the licensee shall continue to operate under rules e u g e b l promulgated for the medical cannabis program until the division e e h n d d i promulgates rules for medical cannabis activity, except that a = = o h l ] b ,d i a º e qualified patient, a primary caregiver and a reciprocal r i = r t e w d participant shall not be prohibited from purchasing and obtainingm cannabisa productsn pursuanto tod them medical: cannabis program.

[L.]b N.e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 27 - e a n e d r e l u [ A d STBTC/SB 100 obtaining cannabis products pursuant to the medical cannabis program.

To[L. address a shortage of cannabis supply in e t 17 the medical cannabis program, the division may:

w] lN. n d 18 (1) require all cannabis establishment = = 19 licensees to ensure that at least ten percent of their cannabis a l i a e r 20 in stock on a monthly basis is designated for sale to qualified a t m m 21 patients, primary caregivers and reciprocal participants;

dTo raddress e 22 (2) initially take reasonable measures to c e s k 23 expeditiously incentivize increased production of cannabis e a n b 24 plants to remedy a shortage of cannabis supply in the medical ucannabis [program, cannabisthe program;division may:

.222413.2(1) -require 27all -cannabis STBTC/SBestablishment 100licensees (3) after having first exhausted measures to increaseensure productionthat ofat cannabisleast plantsten topercent address the shortage of their cannabis supply in thestock medicalon cannabisa program,monthly excludebasis commercialis cannabisdesignated activityfor fromsale the scope of new licenses issued to initialqualified applicantspatients, forprimary acaregivers verticallyand integratedreciprocal cannabisparticipants; establishment, cannabis producer, integrated cannabis microbusiness, cannabis producer microbusiness or cannabis manufacturer license, which limitation shall be in force for a period of at least six months;

and(2) (4)initially requiretake licenseesreasonable whomeasures are licensed to produceexpeditiously cannabisincentivize toincreased produceproduction a specified quota of mature cannabis plants to beremedy designateda forshortage useof cannabis supply in the medical cannabis program;

(3) after having first exhausted measures to increase production of cannabis plants to address the shortage of cannabis supply in the medical cannabis program, exclude commercial cannabis activity from the scope of new licenses h issued to initial applicants for a vertically integrated u » r cannabis establishment, cannabis producer, integrated cannabis t h g e microbusiness, cannabis producer microbusiness or cannabis l i h r i s manufacturer license, which limitation shall be in force for a h , e h period of at least six months;

and t u g e b l (4) require licensees who are licensed to e e , gh n d d i = = o h produce cannabis to produce a specified quota of mature l ] b ,d i a º r cannabis plants to be designated for use in the medical e r = t e w d cannabis program;

(a)m the division may require a licenseen too devoted nom more: than twenty-five percent of the licensee's cultivated cannabis plants on a monthly basis for use in the e t 17 medical cannabis program;

andb wr le t º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 28 - e a n e d 18r (b)e l u [ A d STBTC/SB (a) the division may require specifica =licensee =to 19devote trackingno more than twenty-five percent of the licensee's cultivated cannabis plants.plants on a monthly basis for use in the medical cannabis program;

aand l(b) ithe adivision emay rrequire 20specific [M.]tracking O.of cannabis plants.

As[M.] usedO. in this section, "shortage of a t m m 21 cannabis supply in the medical cannabis program" means that the d r e 22 average number of cannabis plants in production in the medical c e s k 23 cannabis program per qualified patient after the effective date e a n b 24 of the Cannabis Regulation Act is substantially less than the u [ average number of cannabis plants in production in the medical .222413.2 - 28 - STBTC/SB 100 cannabis program per qualified patient as of the effective date of the Cannabis Regulation Act, where:

(1)As used in this section, "shortage of cannabis supply in the medical cannabis program" means that the average number of cannabis plants in production in the medical cannabis program per qualified patient after the effective date of the Cannabis Regulation Act is measuredsubstantially overless athan periodthe average number of threecannabis consecutiveplants months;in production in the medical cannabis program per qualified patient as of the effective date of the Cannabis Regulation Act, where:

and(1) (2) the average number of cannabis plants in production asafter of the effective date of the Cannabis Regulation h Act is measured over a period of three consecutive monthsmonths; immediately preceding the effective date of the Cannabis Regulation Act.

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

Ae persone whoh isn ad memberd ofi the[N.] NewP. Mexico senate or the New Mexico house of representatives on the effective date of the Cannabis Regulation Act shall not apply for or be granted a license to engage in any commercial cannabis activity prior to July 1, 2026." SECTION 6.

SectionA 26-2C-7person NMSAwho 1978is (beinga Lawsmember 2021of the New Mexico = = o h l ] b ,d i a º e senate or the New Mexico house of representatives on the r i = r t 17e (1stw S.S.),d Chaptereffective 4,date Sectionof 7)the isCannabis amendedRegulation toAct read:shall not apply m a n o d m :

wb le d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 29 - e a n e d 18r "26-2C-7.e l u [ A d STBTC/SB 100 for or be granted a license to engage in any commercial cannabis activity prior to July 1, 2026." SECTION 6.

COMMERCIALSection CANNABIS26-2C-7 ACTIVITYNMSA LICENSING--1978 =(being =Laws 192021 APPLICATION--ISSUANCE(1st ANDS.S.), DENIALChapter OF4, ASection LICENSE--CRIMINAL7) HISTORYis aamended lto iread: a e r 20 RECORDS CHECKS.-- a t m m 21 A.

A"26-2C-7. license issued pursuant to the Cannabis d r e 22 Regulation Act shall not be subject to execution, attachment, a c e s k 23 security transaction, liens or receivership.

eCOMMERCIAL aCANNABIS nACTIVITY bLICENSING-- 24APPLICATION--ISSUANCE B.AND DENIAL OF A LICENSE--CRIMINAL HISTORY RECORDS CHECKS.-- A.

InA carryinglicense outissued itspursuant commercialto cannabisthe activityCannabis uRegulation [Act licensingshall duties,not thebe divisionsubject shall:to execution, attachment, a security transaction, liens or receivership.

.222413.2B. - 29 - STBTC/SB 100 (1) no later than September 1, 2021, accept and begin processing license applications for cannabis producers, cannabis producer microbusinesses and any person properly licensed and in good standing as a licensed cannabis producer pursuant to the Lynn and Erin Compassionate Use Act;

(2)In nocarrying laterout thanits Januarycommercial 1,cannabis 2022,activity acceptlicensing andduties, beginthe processingdivision licenseshall: applications for all license types;

(3)(1) requireno aslater athan conditionSeptember of1, licensing2021, pursuantaccept toand thebegin Cannabisprocessing Regulationlicense Actapplications thatfor thecannabis applicantproducers, demonstratecannabis thatproducer themicrobusinesses applicantand hasany aperson legalproperly rightlicensed toand ain commercialgood waterstanding supply, water rights or another source of water sufficient to meet the water needs as determined by the division related to the license as evidenced by documentation from the office of the state engineer of a validlicensed watercannabis righth orproducer frompursuant ato water provider that the useLynn ofand waterErin forCompassionate cannabisUse productionAct; is compliant with that water provider's rules;

eg to 17(2) (4)no iflater anthan applicantJanuary applies1, for2022, aaccept cannabisand wt lhr ng de 18 producer license or a cannabis manufacturer license, in = = 19 addition to the requirements in Paragraph (3) of this a l i ak ebegin rprocessing 20license subsection,applications requirefor thatall thelicense applicanttypes; submit a plan to use, or a t m m 21 demonstrate to the division that the applicant cannot feasibly d r e 22 use, energy and water reduction opportunities, including:

ch er i s kSTBTCº 23(3) (a)require foras a cannabiscondition producer,of driplicensing h , t, pursuant to the Cannabis Regulation Act that the applicant e u g e b l e e h demonstrate that the applicant has a legal right to a n d d i = = o h commercial water supply, water rights or another source of l ] b 24,d irrigationi anda º e water collection;sufficient to meet the water needs as determined by the r i = r t e w d m a n o division related to the license as evidenced by documentation d m :

ub [e (b)d naturals lightingº ando energyt .222413.2n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 30 - e a n e d r e l u [ A d STBTC/SB 100from efficiencythe measures;office of the state engineer of a valid water right or from a water provider that the use of water for cannabis production is compliant with that water provider's rules;»STBTC STBTCº (4)»STBTC STBTCº(3)»STBTC if an applicant applies for a cannabis producer license or a cannabis manufacturer license, STBTCºin addition to the requirements in Paragraph (3) of this subsection,»STBTC require that the applicant submit a plan to use, or demonstrate to the division that the applicant cannot feasibly use, energy and water reduction opportunities, including:

(a) for a cannabis producer, drip irrigation and water collection;

(b) natural lighting and energy efficiency measures;

and (5)h STBTCº (5)»STBTC STBTCº(4)»STBTC allow g o commercial cannabis activity retail sales no later than April t hr g e 1, 2022 and otherwise allow activities authorized by the i k h r i s Cannabis Regulation Act or the medical cannabis program as of h , t, the time of licensure of a licensee, so long as a minimum of e u g e b l twenty-five percent of monthly cannabis sales are to qualified e e h n d d i = = o h patients, primary caregivers and reciprocal participants or l ] b ,d i a º e sold wholesale to other licensees that meet or exceed the r i = r t e w d twenty-five percent sales to qualified patients, primary caregiversm anda reciprocaln participantso untild Decemberm 31,: 2022.

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 31 - e a n e d r e l u [ A d STBTC/SB 100 caregivers and reciprocal participants until December 31, 2022.

An application for licensure shall be signed by the applicant or, if the applicant is a corporation or other legal entity, signed by an officer or other person with legal authority to sign documents for the corporation or other legal e t 17 entity.

Once the division deems an application complete, the w l n d 18 division has ninety days to issue or deny a license = = 19 application.

a l i a e r 20 D.

The division shall deny an application for an a t m m 21 initial license or renewal if:

d r e 22 (1) the application does not include c e s k 23 information required by the division;

or e a n b 24 (2) the applicant or a controlling person of u [ the applicant has been convicted of an offense that is .222413.2 - 31 - STBTC/SB 100 substantially related to the qualifications, functions or duties of the applicant's business;

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

E.m a n o d m :

b r e t º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 32 - e a n e d r e l u [ A d STBTC/SB E.

(1) a felony conviction involving fraud, e t 17 deceit or embezzlement;

w l n d 18 (2) a felony conviction for hiring, employing = = 19 or otherwise using a person younger than eighteen years of age a l i a e r 20 to:

a t m m 21 (a) prepare for sale, transport or carry d r e 22 a controlled substance;

or c e s k 23 (b) sell, give away or offer to sell a e a n b 24 controlled substance to any person;

and u [ (3) any other offense as determined by the .222413.2 - 32 - STBTC/SB 100 division.

A conviction for which the related sentence, h including any term of probation or parole, is completed for the g o possession, use, manufacture, distribution or dispensing or the t hr g e possession with the intent to manufacture, distribute or i k h r i s dispense cannabis is not considered substantially related to h , t, the qualifications, functions or duties of a person seeking a e u g e b l license and shall not be the sole ground on which an e e h n d d i application is denied.

The division shall comply with the = = o h l ] b ,d i a º e provisions of the Criminal Offender Employment Act.

r i = r t e w d G.

The division shall deny an application if an applicant,m a controllingn persono ord them premises: for which a license is sought does not qualify for licensure pursuant to the Cannabis Regulation Act.

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 33 - e a n e d r e l u [ A d STBTC/SB 100 applicant, a controlling person or the premises for which a license is sought does not qualify for licensure pursuant to the Cannabis Regulation Act.

The division shall not license a person who has had a license that was issued pursuant to the Cannabis e t 17 Regulation Act or the Lynn and Erin Compassionate Use Act w l n d 18 revoked by the division or the department of health in the = = 19 three years immediately preceding the date on which the person a l i a e r 20 filed a new application.

a t m m 21 I.

Unless otherwise provided in the Cannabis d r e 22 Regulation Act, a person whose license has been revoked may c e s k 23 reapply for a license after a period of three years.

The e a n b 24 division may consider all of the circumstances resulting in the u [ revocation in determining whether to issue a new license.

.222413.2 - 33 - STBTC/SB 100 [J.

The division shall adopt rules providing for submission of an applicant's fingerprints to the federal bureau h of investigation to conduct a national criminal history g o background check and to the department of public safety to t hr g e i k conduct a state criminal history check for the following h r i s licensees:

h , t, (1) cannabis manufacturer;

e u g e b l e e h (2) cannabis producer;

n d d i = = o h (3) cannabis producer microbusiness;

l ] b ,d i a º e (4) cannabis research laboratory;

r i = r t e w d (5) cannabis retailer;

(6)m cannabisa testingn laboratory;o d m :

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 34 - e a n e d r e l u [ A d STBTC/SB (6) cannabis testing laboratory;

The division shall conduct national criminal e t 17 history background checks and state criminal history checks on w l n d 18 the following:

= = 19 (1) if an applicant is a limited partnership, a l i a e r 20 each partner of the limited partnership;

a t m m 21 (2) if the applicant is a limited liability d r e 22 company, each member of the limited liability company;

c e s k 23 (3) if the applicant is a corporation, each e a n b 24 director and officer of the corporation;

and u [ (4) any controlling person of the applicant.] .222413.2 - 34 - STBTC/SB 100 J.

To investigate the suitability of an applicant for licensure for the medical cannabis program or commercial h cannabis activity, the division shall have access to criminal g o history records information furnished by the department of t hr g e public safety and the federal bureau of investigation, subject i k h r i s to any restrictions imposed by federal law.

h , t, K.

An applicant for a license to conduct commercial e u g e b l cannabis activity shall undergo a state and federal criminal e e h n d d i history records check, and the applicant shall submit an = = o h l ] b ,d i a º e electronic set of fingerprints to the department of public r i = r t e w d safety for that purpose.

The department of public safety shall conductm a check of state records and forward the fingerprints to the federal bureau of investigation for a national criminal history records check to determine the existence and content of a record of convictions and arrests in this state or other law enforcement jurisdictions and to generate a criminal history e t 17 records check in accordance with rules of the department of w l n o d 18m public: safety and regulations of the federal bureau of = = 19 investigation.

Theb departmente ofd publics safetyº shallo reviewt an l= i.222413.2AIC February 14, 2022 (4:16pm) s k m e - 35 - e a n e d r 20e thel informationu obtained[ fromA thed criminalSTBTC/SB history100 conduct a check of state records and forward the fingerprints to the federal bureau of investigation for a tnational mcriminal mhistory 21records check to determine the existence and shallcontent compileof a record of convictions and providearrests thatin informationthis state or other law enforcement jurisdictions and to generate a criminal history records check in accordance with rules of the ddepartment rof epublic 22safety division.and regulations of the federal bureau of investigation.

The divisiondepartment of public safety shall usereview the information resultingobtained c e s k 23 from the fingerprint-based criminal history records check toand eshall acompile n b 24 investigate and determineprovide whetherthat aninformation applicant is qualified to uthe [division. hold a cannabis license.

.222413.2The -division 35shall -use STBTC/SBthe 100information L.resulting from the fingerprint-based criminal history records check to investigate and determine whether an applicant is qualified to hold a cannabis license.

[ArrestL. record] Criminal history information received from the department of public safety or the federal bureau of investigation [and the department of public safety] shall be confidential, shall not be considered a public record pursuant to the Public Records Act and shall not be disclosed to [persons not] anyone other than public employees directly involved in the decision affecting the applicant.

[M.[Arrest record] Criminal history information received from the department of public safety or the federal h bureau of investigation [and the department of public safety ] g o shall be confidential, shall not be considered a public record t hr g e i k pursuant to the Public Records Act and shall not be disclosed h r i s to [persons not ] anyone other than public employees directly h , t, involved in the decision affecting the applicant.

e u g e b l e e h Sfl1ºM.

A license issued pursuant to the Cannabis n d d i = = o h Regulation Act is revocable if a licensee is using water to l ] b ,d i a º e which the licensee does not have a legal right.

The division r i = r t e w d m a n o and the office of the state engineer shall develop a guide for d m :

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 36 - e a n e d r e l u [ A d STBTC/SB water providers and cannabis licensees on water rights and the legal use of water.»Sfl1 [M.

e t 17 B.

w l n d 18 (1) impose an intermediate sanction = = 19 established by rule;

a l i a e r 20 (2) impose a directed plan of correction;

a t m m 21 (3) assess a civil monetary penalty dh r e 22 established by rule;

provided that a civil monetary penalty cg eo s k 23 shall not exceed ten thousand dollars ($10,000) per violation;

et ahr ng be 24 and provided further that penalties and interest recovered ui [k h r i s pursuant to the Cannabis Regulation Act on behalf of the state .222413.2h -, 36t, - STBTC/SB 100 shall be remitted to the state treasurer for deposit in the e u g e b l current school fund;

or e e h n d d i (4) suspend or revoke the license.

= = o h l ] b ,d i a º e C.

Repeated violations of serious and substantial r i = r t e w d rules pertaining to public health and safety may result in licensem suspension.a n o d m :

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 37 - e a n e d r e l u [ A d STBTC/SB 100 license suspension.

The provisions of this section do not apply to occupational health and safety rules promulgated pursuant to Section [3 of the Cannabis Regulation Act]Act ] 26-2C-3 NMSA 1978.

A person aggrieved by an action taken by the division pursuant to this section may request and receive a hearing with the superintendent for the purpose of reviewing the action in accordance with the Uniform Licensing Act." e t 17 SECTION 8.

Section 26-2C-10 NMSA 1978 (being Laws 2021 w l n d 18 (1st S.S.), Chapter 4, Section 10) is amended to read:

= = 19 "26-2C-10.

CANNABIS TRAINING AND EDUCATION PROGRAM a l i a e r 20 LICENSING [SANCTIONS]--MANDATORY[SANCTIONS EDUCATION--PROVIDERS.--]--MANDATORY aEDUCATION--PROVIDERS.-- t m m 21 A.

The division shall begin licensing cannabis dh r e 22 training and education programs no later than January 1, 2022.

cg eo s k 23 [B.

The division may suspend a license for repeated et ahr ng be 24i k violations of the same serious and substantial rule promulgated uh [r i s pursuant to the Cannabis Regulation Act pertaining to public .222413.2h -, 37t, - STBTC/SB 100 health and safety.] e u g e b l e e h B.

The division may provide by rule for mandatory n d d i = = o h education for licensees and employees of licensees.

l ] b ,d i a º e Certificates of completion of mandatory education shall be r i = r t e w d m a n o maintained by each licensee for employees and open to inspectiond bym the: division.

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 38 - e a n e d r e l u [ A d STBTC/SB inspection by the division.

Except as allowed pursuant to the Cannabis 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 18 the provisions of this section, to knowingly and intentionally:

= = 19 (1) sell, serve or give cannabis products to a a l i a e r 20 person under twenty-one years of age or allow a person under a t m m 21 twenty-one years of age to consume cannabis products on the dh r e 22 licensed premises;

cg eo s k 23 (2) buy cannabis products for or procure the et ahr ng be 24 sale or service of cannabis products to a person under twenty- ui [k h r i s one years of age;

.222413.2h -, 38t, - STBTC/SB 100 (3) deliver cannabis products to a person e u g e b l under twenty-one years of age;

or e e h n d d i (4) aid or assist a person under twenty-one = = o h l ] b ,d i a º e years of age to buy, otherwise procure or be served cannabis r i = r t e w d products.

B.m a n o d m :

Ab licenseee shalld nots employº ao persont youngern than= twenty-one.222413.2AIC yearsFebruary of14, age2022 to(4:16pm) engages ink am medicale or- commercial39 cannabis- activitye except that if a licenseen employede ad personr youngere thanl twenty-oneu years[ ofA age,d butSTBTC/SB not100 youngerB. than eighteen years of age, before the effective date of this 2022 act, that person may continue employment in the same position with that licensee.

A licensee shall not employ a person younger than twenty-one years of age to engage in a medical or commercial cannabis activity except that if a licensee employed a person younger than twenty-one years of age, but not younger than eighteen years of age, before the effective date of this act, that person may continue employment in the same position with that licensee.

The division shall suspend or revoke the license e t 17 and may fine the licensee in an amount not to exceed ten w l n d 18 thousand dollars ($10,000), or both, when the division finds = = 19 that a licensee or the licensee's employee or agent knowingly a l i a e r 20 has sold, served or given any cannabis product to a person a t m m 21 under twenty-one years of age.

dh r e 22 D.

The establishment of all of the following facts cg eo s k 23 by a licensee prosecuted for a violation of Subsection [D][D ] A of et ahr ng be 24i k this section and a cannabis server for a violation of uh [r i s Subsection F of Section [11 of the Cannabis Regulation Act]Act .222413.2] -h 39, -t, STBTC/SB 100 26-2C-11 NMSA 1978 shall constitute a defense:

e u g e b l e e h (1) that the purchaser falsely represented in n d d i = = o h writing;

by producing a driver's license bearing the l ] b ,d i a º e purchaser's photograph;

by producing a photographic r i = r t e w d identification card issued by the motor vehicle division of the taxationm anda revenuen department;o d m :

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 40 - e a n e d r e l u [ A d STBTC/SB taxation and revenue department;

and (3) that the sale was made in good faith, relying upon the purchaser's false written representation, driver's license or identification card produced as provided in e t 17 Paragraph (1) of this subsection, and with the reasonable w l n d 18 belief that the purchaser was actually twenty-one years of age = = 19 or older.

a l i a e r 20 E.

Nothing in this section shall be construed or a t m m 21 interpreted to prevent:

dh r e 22 (1) the division from enforcing its rules cg eo s k 23 against a licensee;

et ahr ng be 24 (2) a state agency from enforcing a law or ui [k h r i s rule that does not conflict with the Cannabis Regulation Act or .222413.2h -, 40t, - STBTC/SB 100 rules promulgated pursuant to that act;

or e u g e b l (3) a local jurisdiction from enforcing a e e h n d d i local ordinance that does not conflict with the Cannabis = = o h l ] b ,d i a º e Regulation Act or rules promulgated pursuant to that act." r i = r t e w d SECTION 10.

Section 7-1-6.68 NMSA 1978 (being Laws 2021 (1stm S.S.),a Chaptern 4,o Sectiond 50)m is: amended to read:

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 41 - e a n e d r e l u [ A d STBTC/SB 100 (1st S.S.), Chapter 4, Section 50) is amended to read:

A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, in an amount equal to thirty-three and thirty-three hundredths percent of the net receipts attributable to the cannabis excise tax from [cannabis retailers]retailers ] business locations within the municipality as reported pursuant to Section 7-42-4 NMSA 1978.

e t 17 B.

A distribution pursuant to Section 7-1-6.1 NMSA w l n d 18 1978 shall be made to each county in an amount equal to thirty- = = 19 three and thirty-three hundredths percent of the net receipts a l i a e r 20 attributable to the cannabis excise tax from [cannabis a t m m 21 retailers] business locations within the county area of the dh r e 22 county as reported pursuant to Section 7-42-4 NMSA 1978.1978 .

cg eo s k 23 C.

The department may deduct an amount not to et ahr ng be 24i k exceed three percent of the distributions made pursuant to this uh [r i s section for the reasonable costs for administering the .222413.2h -, 41t, - STBTC/SB 100 distributions.

e u g e b l e e h D.

As used in this section, "county area" means n d d i = = o h that portion of a county located outside the boundaries of any l ] b ,d i a º e municipality." r i = r t e w d SECTION 11.

Section 7-42-4 NMSA 1978 (being Laws 2021 (1stm S.S.),a Chaptern 4,o Sectiond 46)m is: amended to read:

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 42 - e a n e d r e l u [ A d STBTC/SB (1st S.S.), Chapter 4, Section 46) is amended to read:

(1) if the cannabis product is received by the purchaser at the New Mexico business location of the cannabis e t 17 retailer, the location of the cannabis retailer;

w l n d 18 (2) if the cannabis product is not received by = = 19 the purchaser at a business location of the cannabis retailer, a l i a e r 20 the location indicated by instructions for delivery to the a t m m 21 purchaser, or the purchaser's donee, when known to the cannabis dh r e 22 retailer;

cg eo s k 23 (3) if Paragraphs (1) and (2) of this et ahr ng be 24 subsection do not apply, the location indicated by an address ui [k h r i s for the purchaser available from the business records of the .222413.2h -, 42t, - STBTC/SB 100 cannabis retailer that are maintained in the ordinary course of e u g e b l business;

provided that use of the address does not constitute e e h n d d i bad faith;

= = o h l ] b ,d i a º e (4) if Paragraphs (1) through (3) of this subsectionr doi not= apply,r thet locatione forw thed purchasersubsection obtaineddo duringnot consummationapply, of the sale,location includingfor the addresspurchaser ofm a purchaser'sn paymento instrumentd ifm no: other address is available;

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 43 - e a n e d r e l u [ A d STBTC/SB 100 obtained during consummation of the sale, including the address of a purchaser's payment instrument if no other address is available;

e t 17 "[NEW MATERIAL] CONVERSION OF MEDICAL CANNABIS NONPROFIT w l n d 18 CORPORATIONS TO FOR-PROFIT STATUS--TIME LIMITATION.-- = = 19 A.

Until December 1, 2023, a nonprofit corporation a l i a e r 20 that was incorporated in order to qualify for a license as a a t m m 21 licensed nonprofit producer pursuant to department of health dh r e 22 rules under the Lynn and Erin Compassionate Use Act may convert cu e» sr k 23 to a for-profit corporation as follows:

et ah ng be 24 (1) the terms and conditions of the conversion ul [i h r i s from nonprofit to for-profit corporation shall be approved by .222413.2h -, 43e -h STBTC/SB 100 all members of the board of directors of the nonprofit t u g e b l corporation;

e e , gh n d d i = = o h (2) an agreement of conversion shall set forth l ] b ,d i a º r the terms and conditions of any ownership interests in the for- e r = t e w d profit corporation;

and (3)m the assets of the nonprofit corporation shall be applied and distributed as follows if the corporation did not have a federaln taxo exemptiond asm a: nonprofit corporation:

b r e t º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 44 - e a n e d r e l u [ A d STBTC/SB (3) the assets of the nonprofit corporation shall be applied and distributed as follows if the corporation did not have a federal tax exemption as a nonprofit corporation:

(b) assets held by the corporation upon condition requiring return, transfer or conveyance, which condition occurs by reason of the dissolution, shall be returned, transferred or conveyed in accordance with such e t 17 requirements;

w l n d 18 (c) assets received and held by the = = 19 corporation subject to limitations permitting their use only a l i a e r 20 for charitable, religious, eleemosynary, benevolent, a t m m 21 educational or similar purposes, but not held upon a condition d r e 22 requiring return, transfer or conveyance by reason of the ch eu s» kr 23 dissolution, shall be transferred or conveyed to one or more et ah ng be 24 nonprofit domestic corporations, nonprofit societies or ul [i h r nonprofit organizations engaged in activities substantially .222413.2i -s 44h -, STBTC/SBe 100h similar to those of the dissolving corporation, pursuant to a t u g e b l plan of distribution adopted as provided in the Nonprofit e e , gh n d d i Corporation Act;

and = = o h l ] b ,d i a º r (d) any remaining assets shall be e r = t e w d distributed to the new for-profit corporation according to a planm ofa distributionn adoptedo asd providedm in: the Nonprofit Corporation Act.

b r e t º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 45 - e a n e d r e l u [ A d STBTC/SB 100 plan of distribution adopted as provided in the Nonprofit Corporation Act.

(3) a statement of the number of votes cast by e t 17 the members of the board of directions of the nonprofit w l n d 18 corporation;

and = = 19 (4) a statement that the articles of a l i a e r 20 incorporation of the nonprofit corporation are to be canceled a t m m 21 as of the date the conversion takes effect.

dh r e 22 C.

The filing of articles of incorporation for a cg eo s k 23 for-profit corporation resulting from a conversion pursuant to et ahr ng be 24i k this section cancels the articles of organization of the uh [r i s nonprofit corporation as of the date the conversion takes .222413.2h -, 45t, - STBTC/SB 100 effect.

e u g e b l e e h D.

A conversion takes effect when the articles of n d d i = = o h incorporation of the converted corporation are filed with the l ] b ,d i a º e secretary of state or at any later date specified in the filed document."r -i 46= -r 8t 10 12 14 16 e t 17 w l n d 18document." = = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 e a n bo 24d um [: .222413.2

b e d s º o t n = .222413.2AIC February 14, 2022 (4:16pm) s k m e - 46 - e a n e d r e l u [ A d