HB 313 — CANNABIS REGULATION CHANGES

g o t hr (5) a cannabis research laboratory;

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 HGEICº [or]»HGEIC HGEICºor»HGEIC n d d i = = o h (8) an integrated cannabis microbusiness;

l ] b ,d i a º e HGEICº or r i = r t e w d m a n o (9) a cannabis nursery;nursery;»HGEIC d m :

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 4 - e a n e d r e l u [ A d F.

(1) means a product obtained by separating resins, tetrahydrocannabinols or other substances from cannabis e t 17 by extraction methods approved by the division;

and w l n d 18 (2) does not include the weight of any other = = 19 a l ingredient combined with cannabis extract to prepare topical or i a e r 20 oral administrations, food, drink or another product;

a t m m 21 G.

"cannabis flowers" means only the flowers of a d r e 22 cannabis plant;

c e s k 23 H.

e a n b 24 (1) manufactures cannabis products;

u [ [(2) packages cannabis products;

.223290.6 - 4 - (3)] (2) has cannabis products tested by a cannabis testing laboratory;

or [(4)] (3) purchases, acquires, sells or transports wholesale cannabis products to other cannabis h establishments;

g o t hr HGEICº I.

g e i k (1) cultivates cannabis plants for the sale of h r i s cannabis seeds and immature cannabis plants;

h , t, e u g (2) purchases, acquires, sells or transports e b l e e h wholesale cannabis seeds and immature cannabis plants to other n d d i = = o h cannabis establishments;

and l ] b ,d i a º e r i = r (3) sells cannabis seeds and immature cannabis t e w d m a n o plants to qualified patients, primary caregivers or reciprocal participantsd orm directly: to consumers;

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 5 - e a n e d r e l u [ A d participants or directly to consumers;»HGEIC [I.] J.HGEICºJ.»HGEIC HGEICºI.»HGEIC "cannabis producer" means a person that:

"cannabis producer" means a person that:

e t 17 (2) has unprocessed cannabis products tested w l n d 18 by a cannabis testing laboratory;

= = 19 a l (3) transports unprocessed cannabis products i a e r 20 only to other cannabis establishments;

or a t m m 21 (4) sells cannabis products wholesale;

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

] HGEICºK.»HGEIC HGEICºJ.»HGEIC "cannabis producer microbusiness" means a c e s k 23 cannabis producer at a single licensed premises that possesses e a n b 24 no more than [two hundred] HGEICº one thousandthousand»HGEIC HGEICºone-tenth of the»HGEIC total mature cannabis uHGEICºplants [ plants at any one time;time;»HGEIC HGEICºplant count limit set by the division for large cannabis producers;»HGEIC h [K.] HGEICºL.»HGEIC HGEICºK.»HGEIC "cannabis g o t hr product" means a product that is or that contains cannabis or g e i k cannabis extract, including edible or topical products that may h r i s also contain other ingredients;

.223290.6h -, 5t, -e [K.]u L.g [L.

] HGEICºM.»HGEIC HGEICºL.»HGEIC "cannabis product"e b l e e h research laboratory" means a productfacility that isproduces or thatn containsd d i = = o h possesses cannabis orproducts and all parts of the plant genus l ] b ,d i a º e r i = r Cannabis for the purpose of studying cannabis extract,cultivation, includingt ediblee w d m a n o characteristics or topicaluses productsHJCº thatand mayis alsonot containsubject otherto ingredients;plant d m :

[L.]b M.e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 6 - e a n e d r e l u [ A d limits»HJC ;

"cannabis[M.] researchHGEICºN.»HGEIC laboratory"HGEICºM.»HGEIC "cannabis retailer" means a facilityperson that producessells or possesses cannabis products andto allqualified partspatients, ofprimary thecaregivers plantor genusreciprocal Cannabisparticipants foror thedirectly purposeto ofconsumers; studying cannabis cultivation, characteristics or uses;

[M.][N. N.

] HGEICºO.»HGEIC HGEICºN.»HGEIC "cannabis retailer"server permit" means aan personauthorization that sellsallows cannabisa productsperson to qualifieddirectly patients,offer, primarysell caregivers or reciprocalserve participantscannabis or directlycannabis toproducts consumers;as part of commercial cannabis activity in a cannabis consumption area;

[N.][O. O.

"cannabis] serverHGEICºP.»HGEIC permit"HGEICºO.»HGEIC means"cannabis anserver authorizationpermit thateducation allowsprovider" means a person tothat directlyprovides offer, sell or serve cannabis orserver cannabiseducation productscourses asand partexaminations; of commercial cannabis activity in a cannabis consumption area;

[O.][P. P.

"cannabis] serverHGEICºQ.»HGEIC permitHGEICºP.»HGEIC education"cannabis provider"testing laboratory" means a person that providessamples, collects and tests cannabis serverproducts educationand coursestransports ecannabis tproducts 17for andh examinations;the purpose of testing;

wg lo nt dhr 18[Q. [P.] Q.

] HGEICºR.»HGEIC HGEICºQ.»HGEIC "cannabis testingg laboratory"e i k training and education program" means a =practical =or 19academic ah lr personi thats samples,curriculum collectsoffered andby testsa cannabisNew productsMexico andpublic ipost-secondary ah , t, e ru 20g transportseducational cannabisinstitution productsdesigned to prepare students for thee purposeb ofl testing;e e h participation in the cannabis industry;

an td md mi 21= [Q.]= R.o h [R.

"cannabis] trainingHGEICºS.»HGEIC andHGEICºR.»HGEIC education"commercial program"l d] rb e,d 22i means a practicalº or academic curriculum offered by a New c e sr ki 23= Mexicor public post-secondary educational institution designed e a n b 24 to prepare students for participation in the cannabis industry;activity":

ut [e [R.]w S.d m a n o (1) means the cultivation, production, d m :

"commercialb e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 7 - e a n e d r e l u [ A d possession, manufacture, storage, testing, researching, labeling, transportation, couriering, purchase for resale, sale or consignment of cannabis activity":products;

.223290.6 - 6 - (1) means the cultivation, production, possession, manufacture, storage, testing, researching, labeling, transportation, couriering, purchase for resale, sale or consignment of cannabis products;

[S.][S. T.

] HGEICºT.»HGEIC HGEICºS.»HGEIC "consumer" means a person twenty-one years of age or older who purchases, acquires, owns, possesses or uses a cannabis product for a purpose other than resale;

[T.][T. U.

] HGEICºU.»HGEIC HGEICºT.»HGEIC "contaminant" means pesticides and other foreign material, such as hair, insects or other similar adulterants, in harvested cannabis;

[U.][U. V.

] HGEICºV.»HGEIC HGEICºU.»HGEIC "controlling person":

h (1) means a person that controls a financial eg o t 17hr or voting interest of ten percent or more of, or an officer or wg le ni dk 18 board member of, a cannabis establishment;

and =h =r 19i as l (2) does not include a bank or licensed ih a, t, e ru 20g lending institution;

ae tb ml me 21e [V.]h W.[V.

"cultivation"] meansHGEICºW.»HGEIC anyHGEICºV.»HGEIC activity"cultivation" involvingn d rd ei 22= = o h means any activity involving the planting, growing, harvesting, drying,l curing,] gradingb or,d ci a º e sdrying, kcuring, 23grading or trimming of cannabis;

r i = r t e aw nd bm 24a [W.]n X.o [W.

"department"] meansHGEICºX.»HGEIC theHGEICºW.»HGEIC regulation"department" andd um [: licensing department;

.223290.6b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 78 - [X.]e Y.a n e d r e l u [ A d means the regulation and licensing department;

"director"[X. means the director of the division;

[Y.]] Z.HGEICºY.»HGEIC HGEICºX.»HGEIC "director" means the director of the division;

[Y.] HGEICºZ.»HGEIC HGEICºY.»HGEIC "division" means the cannabis control division of the department;

[Z.] AA.HGEICºAA.»HGEIC HGEICºZ.»HGEIC "dry weight basis", when used in the context of regulation of commercial cannabis activity, means a process by which delta-9- tetrahydrocannabinol concentration is measured relative to the aggregate weight of all parts of the plant 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;

"dry[AA. weight basis", when used in the context of regulation of commercial cannabis activity, means a process by which delta-9-tetrahydrocannabinol concentration is measured relative to the aggregate weight of all parts of the plant 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.]] BB.HGEICºBB.»HGEIC HGEICºAA.»HGEIC "facility" h means a building, space or grounds licensed for the production, g o t hr possession, testing, manufacturing or distribution of cannabis, g e i k cannabis extracts or cannabis products;

"facility"h meansr ai building,s space[BB. or grounds licensed for the production, possession, testing, manufacturing or distribution of cannabis, cannabis extracts or e t 17 cannabis products;

w] HGEICºCC.»HGEIC HGEICºBB.»HGEIC "financial h , t, e u g consideration" means value that is given or received, directly e b l e e h or indirectly, through sales, barter, trade, fees, charges, n d 18d [BB.]i CC.= = o h dues, contributions or donations;

"financial consideration" means value = = 19 a l that] isb given,d or received, directly or indirectly, through i a º e r[CC. 20 sales, barter, trade, fees, charges, dues, contributions or a t m m 21 donations;

d] HGEICºDD.»HGEIC HGEICºCC.»HGEIC "homegrown" r i = r t e 22w [CC.]d DD.m a n o or "homemade" means grown or made for purposes that are not d m :

"homegrown"b ore "homemade"d meanss grownº oro ct en s= k.223290.6AIC 23March made5, for2023 purposes(12:39pm) thats arek notm dependente or- conditioned9 upon- e a n be 24d r e l u [ A d dependent or conditioned upon the provision or receipt of financial consideration;

u[DD. [ [DD.] EE.

] HGEICºEE.»HGEIC HGEICºDD.»HGEIC "household" means a housing unit and .223290.6 - 8 - 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.][EE. FF.

] HGEICºFF.»HGEIC HGEICºEE.»HGEIC "immature cannabis plant" means a cannabis plant that has no observable flowers or buds;

[FF.][FF. GG.

] HGEICºGG.»HGEIC HGEICºFF.»HGEIC "industry standards" means the prevailing customary standards of business practice in the cannabis industry in jurisdictions within the United States;

[GG.][GG. HH.

] HGEICºHH.»HGEIC HGEICºGG.»HGEIC "integrated cannabis microbusiness" means a person that is authorized to h conduct one or more of the following:

g o t hr (1) production of cannabis at a single g e i k licensed premises;

provided that the person shall not possess h r i s more than [two hundred]hundred one] thousandHGEICºone thousand»HGEIC h , t, e u g HGEICºone-tenth of the»HGEIC total mature cannabis plantse b l e e h HGEICºplants at any one time;time;»HGEIC HGEICºplant count limit n d d i = = o h set by the division for large cannabis producers;»HGEIC l ] b ,d i a º e r i = r (2) manufacture of cannabis products at a t e w d m a n o single licensed premises;

(2)d manufacturem of: cannabis products at a e t 17 single licensed premises;

wb le d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 10 - e a n e d 18r e l u [ A d (3) sales and transportation of only cannabis = = 19 a l products produced or manufactured by that person;

i a e r 20 (4) operation of only one retail a t m m 21 establishment;

and d r e 22 (5) couriering of cannabis products to c e s k 23 qualified patients, primary caregivers or reciprocal e a n b 24 participants or directly to consumers;

u[HH. [ [HH.] II.

] HGEICºII.»HGEIC HGEICºHH.»HGEIC "licensed premises" means a location that .223290.6 - 9 - includes:

and h (3) with respect to a location that is g o t hr specifically licensed for the production of cannabis outside of g e i k a building, the entire unit of land that is created by h r i s subsection or partition of land that the licensee owns, leases h , t, or has a right to occupy;

[II.]e JJ.u g e b l e e h [II.

] HGEICºJJ.»HGEIC HGEICºII.»HGEIC "local n d d i = = o h jurisdiction" means a municipality, home rule municipality or l ] b ,d i a º e county;

[JJ.]r KK.i = r t e w d m a n o [JJ.

"manufacture"] meansHGEICºKK.»HGEIC toHGEICºJJ.»HGEIC compound, blend, e t 17 extract, infuse, package or otherwise prepare a cannabis w l n d 18m product;:

=b e d s º o t n = 19.223290.6AIC March 5, 2023 (12:39pm) s k m e - 11 - e a n e d r e l [KK.]u LL.[ A d "manufacture" means to compound, blend, extract, infuse, package or otherwise prepare a cannabis product;

"medical[KK. cannabis" means cannabis i a e r 20 products used by a qualified patient or reciprocal participant a t m m 21 in accordance with the Lynn and Erin Compassionate Use Act;

d] rHGEICºLL.»HGEIC eHGEICºKK.»HGEIC 22"medical [LL.]cannabis" MM.means cannabis products used by a qualified patient or reciprocal participant in accordance with the Lynn and Erin Compassionate Use Act;

"medical[LL. cannabis program" means the c e s k 23 program created pursuant to the Lynn and Erin Compassionate Use e a n b 24 Act;

u] [HGEICºMM.»HGEIC [MM.]HGEICºLL.»HGEIC NN."medical cannabis program" means the program created pursuant to the Lynn and Erin Compassionate Use Act;

"medical[MM. cannabis registry" means the .223290.6 - 10 - system by which the department of health approves or denies applications and issues and renews registry identification cards for qualified patients;

[NN.]] OO.HGEICºNN.»HGEIC HGEICºMM.»HGEIC "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;

"primary[NN. 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.]] PP.HGEICºOO.»HGEIC HGEICºNN.»HGEIC "primary caregiver" means a resident of New Mexico who is at least eighteen years of age and who is responsible for managing the h well-being of a qualified patient with respect to the medical g o t hr use of cannabis pursuant to the Lynn and Erin Compassionate Use g e i k Act;

"publich place"r meansi as place[OO. to which the general public has access and includes hallways, lobbies and other parts of apartment houses and hotels that do not constitute rooms or apartments designed for actual residence;

] HGEICºPP.»HGEIC HGEICºOO.»HGEIC "public h , t, e u g place" means a place to which the general public has access and e b l e e h includes hallways, lobbies and other parts of apartment houses n d d i = = o h and hotels that do not constitute rooms or apartments designed l ] b ,d i a º e for actual residence;

places of r i = r t e w d m a n o amusement;

and places used in connection withd publicm passenger: transportation;

[PP.]b QQ.e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 12 - e a n e d r e l u [ A d with public passenger transportation;

"qualified[PP. patient" means a resident of e t 17 New Mexico who holds a registry identification card pursuant to w l n d 18 the Lynn and Erin Compassionate Use Act;

=] =HGEICºQQ.»HGEIC 19HGEICºPP.»HGEIC "qualified patient" means a lresident [QQ.]of RR.New Mexico who holds a registry identification card pursuant to the Lynn and Erin Compassionate Use Act;

"reciprocal[QQ. participant" means a person i a e r 20 who is not a resident of New Mexico and who holds proof of a t m m 21 enrollment by a governmental regulatory authority to d r e 22 participate in the medical cannabis program of another state of c e s k 23 the United States, the District of Columbia or a territory or e a n b 24 commonwealth of the United States in which the person resides u [ or a person who holds proof of enrollment by a governmental .223290.6 - 11 - regulatory authority of a New Mexico Indian nation, tribe or pueblo to participate in its medical cannabis program;

[RR.]] SS.HGEICºRR.»HGEIC HGEICºQQ.»HGEIC "reciprocal participant" means a 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 the United States, the District of Columbia or a territory or commonwealth 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;

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

[SS.]] TT.HGEICºSS.»HGEIC HGEICºRR.»HGEIC "retail h establishment" means a location at which cannabis products are g o t hr sold to qualified patients, primary caregivers and reciprocal g e i k participants and directly to consumers;

"superintendent"h meansr thei superintendents of[SS. regulation and licensing;

[TT.]] UU.HGEICºTT.»HGEIC HGEICºSS.»HGEIC h , t, e u g "superintendent" means the superintendent of regulation and e b l e e h licensing;

"unprocessed"n meansd unalteredd fromi an= original,= rawo orh natural[TT. state;

and] [UU.]HGEICºUU.»HGEIC VV.HGEICºTT.»HGEIC l ] b ,d i a º e "unprocessed" means unaltered from an original, raw or natural r i = r t e w d m a n o state;

"verticallyand integratedd cannabism establishment": means a person that is authorized to act as any of the following:

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 13 - e a n e d r e l u [ A d [UU.] HGEICºVV.»HGEIC HGEICºUU.»HGEIC "vertically integrated cannabis establishment" means a person that is authorized to act as any of the following:

and e t 17 (4) a cannabis retailer." w l n d 18 SECTION 3.

A new section of the Cannabis Regulation Act = = 19 a l is enacted to read:

i a e r 20 "[NEW MATERIAL] EQUITY BUREAU--EQUITY INITIATIVES.--The a t m m 21 "equity bureau" is created in the division.

The equity bureau d r e 22 shall oversee the social and economic equity initiatives of the c e s k 23 division." e a n b 24 SECTION 4.

Section 26-2C-6 NMSA 1978 (being Laws 2021 u [ (1st S.S.), Chapter 4, Section 6) is amended to read:

.223290.6 - 12 - "26-2C-6.

LICENSING CANNABIS ACTIVITIES--LIMITATIONS-- h MEDICAL CANNABIS LEGACY LICENSING--CANNABIS SHORTAGE FOR g o t hr MEDICAL PROGRAM.-- g e i k A.

The division shall regulate and administer and h r i s may collect fees in connection with the administration of:

h , t, e u g (1) commercial cannabis activity and licensing e b l e e h related to commercial cannabis activity;

n d d i = = o h (2) the medical cannabis program, except for l ] b ,d i a º e the medical cannabis registry;

and r i = r t e w d m a n o (3) all aspects of cannabis relating to cannabisd trainingm and: education programs.

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 14 - e a n e d r e l u [ A d cannabis training and education programs.

e t 17 (3) cannabis manufacturers;

w l n d 18 (4) cannabis producer microbusinesses;

= = 19 a l (5) cannabis producers;

i a e r 20 (6) cannabis research laboratories;

a t m m 21 (7) cannabis retailers;

d r e 22 (8) cannabis servers;

c e s k 23 (9) cannabis testing laboratories;

e a n b 24 (10) cannabis training and education programs;

u [ (11) integrated cannabis microbusinesses;

and .223290.6 - 13 - (12) vertically integrated cannabis h establishments.

g o t hr C.] B.

The division shall include a clear g e i k designation on all licenses and permits that indicates whether h r i s the license or permit is for medical cannabis activity, h , t, commercial cannabis activity or both or for cannabis training e u g e b l e e h and education programs.

[D.]n C.d d i = = o h [D.

The] divisionC. 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 consignment from a cannabis producer microbusiness or an integrated cannabis microbusiness licensed pursuant the Cannabis Regulation Act.

[E.]The D.division shall issue a license to a l ] b ,d i a º e cannabis retailer applicant at a discount if the applicant r i = r t e w d m a n o provides documentation of an agreement to accept cannabis d m :

Ab licensee isd valids forº twelveo monthst fromn the= date.223290.6AIC theMarch license5, is2023 issued(12:39pm) ands mayk bem renewede annually,- except15 that- e a licensen issuede ford ar cannabise trainingl andu e[ tA 17d educationproducts programon isconsignment validfrom untila terminatedcannabis byproducer themicrobusiness licensee or wan lintegrated ncannabis dmicrobusiness 18licensed suspendedpursuant orthe revokedCannabis byRegulation theAct. division.

=[E. = 19 a l [F.] E.

The] directorD. shall not renew a license i a e r 20 issued pursuant to the provisions of the Cannabis Regulation a t m m 21 Act until the director receives notification from the secretary d r e 22 of taxation and revenue or the secretary's designee that on a c e s k 23 certain date:

eA alicense nis bvalid 24for (1)twelve months from the licenseedate the license is notissued and may be renewed annually, except that a delinquentlicense taxpayer;issued for a cannabis training and education program is valid until terminated by the licensee or suspended or revoked by the division.

u[F. [ and .223290.6 - 14 - (2) there are no unfiled tax returns due from engaging in business authorized by the license.

[G.]] F.E.

NoThe licensedirector shall benot transferablerenew ora assignablelicense issued pursuant to the provisions of the Cannabis Regulation Act until the director receives notification from athe licenseesecretary toof anothertaxation person.and revenue or the secretary's designee that on a certain date:

The(1) divisionthe shalllicensee not allow a person that is licensednot as any type of cannabis establishment other than a cannabisdelinquent researchtaxpayer; laboratory to hold, directly or indirectly, a cannabis testing laboratory license.

[H.]and G.(2) there are no unfiled tax returns due from h engaging in business authorized by the license.

Exceptg foro verificationt ofhr age,[G. the division shall not require licensees to request information from consumers or impose any residency requirement upon consumers for the purchase of cannabis products pursuant to the commercial cannabis activity authorized by the Cannabis Regulation Act.

The] divisionF. may require licensees to request information from consumers for the purchase of cannabis products pursuant to the medical cannabis program, which may e t 17 include the presentation of legal identification issued by an w l n d 18 authorized governmental entity or other documents as required = = 19 a l by the medical cannabis program.

iNo alicense shall be transferable or g e ri 20k [I.]assignable H.from a licensee to another person.

ExceptThe asdivision otherwiseh providedr ini thes shall not allow a tperson mthat mis 21licensed Cannabisas Regulationany Act,type theof divisionh shall, nott, limitcannabis theestablishment dother rthan a cannabis research e 22u numberg ofe licensedb premisesl ae licenseee mayh occupylaboratory to hold, directly or operateindirectly, ca ecannabis stesting kn 23d underd ai = = o h laboratory license.

Multiplel licensees] may occupy a single e a n b 24,d licensedi premises, and the division shall not place any u [ restriction or prohibition on the number of licensees occupying .223290.6 - 15 - a singleº licensede premises[H. or on the number of licensed premises of a cannabis establishment except as otherwise specifically provided for by the Cannabis Regulation Act.

A] licenseeG. may conduct any lawful activity or any combination of lawful activities at a licensed premises;

providedExcept thatfor verification of age, the licenseer isi not= [ar licenseet pursuante to]w occupyingd m a premisesn licensedo underdivision theshall provisionsnot ofrequire thelicensees Liquorto Controlrequest Act.information d m :

Smokingb ine ad cannabiss consumptionº areao ont an licensed= premises.223290.6AIC shallMarch be5, allowed2023 only(12:39pm) ifs thek cannabism consumptione area- is16 in- e a designatedn smokinge aread orr ine al standaloneu building[ fromA whichd smokefrom doesconsumers notor infiltrateimpose otherany indoorresidency workplacesrequirement orupon otherconsumers indoorfor publicthe placespurchase whereof smokingcannabis isproducts otherwise prohibited pursuant to the Deecommercial Johnsoncannabis Cleanactivity Indoorauthorized Airby the Cannabis Regulation Act.

The division may require licensees to request 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.

[I.] H.

Except as otherwise provided in the Cannabis Regulation Act, the division shall not limit the number of licensed premises a licensee may occupy or operate under a license.

Multiple licensees may occupy a single licensed premises, and the division shall not place any restriction or prohibition on the number of licensees occupying a single licensed premises or on the number of licensed h premises of a cannabis establishment except as otherwise u » r specifically provided for by the Cannabis Regulation Act.

A t h g e l i licensee may conduct any lawful activity or any combination of h r i s lawful activities at a licensed premises;

provided that the h , e h licensee is not [a licensee pursuant to ] occupying a premises t u g e b l e e , gh licensed under the provisions of the Liquor Control Act.

n d d i = = o h Smoking in a cannabis consumption area on a licensed premises l ] b ,d i a º r shall be allowed only if the cannabis consumption area is in a e r = t e w d m a n o designated smoking area or in a standalone building from which d m :

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 17 - e a n e d r e l u [ A d smoke does not infiltrate other indoor workplaces or other indoor public places where smoking is otherwise prohibited pursuant to the Dee Johnson Clean Indoor Air Act.

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

w l n d 18 [K.] J.

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

The division shall determine when retail sales of e a n b 24 commercial cannabis products begin, but no later than April 1, u [ 2022.

A facility of such a licensee, upon issuance of the .223290.6 - 16 - applicable cannabis establishment license, shall constitute h licensed premises of the licensee and the licensee shall be u » r entitled to continued and uninterrupted operations of the t h g e l i licensed premises.

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

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 18 - e a n e d r e l u [ A d program.

(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;

w l n d 18 (2) initially take reasonable measures to = = 19 a l expeditiously incentivize increased production of cannabis i a e r 20 plants to remedy a shortage of cannabis supply in the medical a t m m 21 cannabis program;

d r e 22 (3) after having first exhausted measures to c e s k 23 increase production of cannabis plants to address the shortage e a n b 24 of cannabis supply in the medical cannabis program, exclude u [ commercial cannabis activity from the scope of new licenses .223290.6 - 17 - issued to initial applicants for a vertically integrated h cannabis establishment, cannabis producer, integrated cannabis u » r microbusiness, cannabis producer microbusiness or cannabis t h g e l i manufacturer license, which limitation shall be in force for a h r i s period of at least six months;

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

(a)e ther division= mayt requiree aw licenseed tom devotea non moreo than(a) twenty-five percent of the licensee'sdivision cultivatedmay cannabisrequire plants on a monthlylicensee basisd form use: in the medical cannabis program;

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 19 - e a n e d r e l u [ A d to devote no more than twenty-five percent of the licensee's cultivated cannabis plants on a monthly basis for use in the medical cannabis program;

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

e a n b 24 (1) the average number of cannabis plants in u [ production after the effective date of the Cannabis Regulation .223290.6 - 18 - Act is measured over a period of three consecutive months;

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

t u g e b l e e , gh [N.] M.

A person who is a member of the New Mexico n d d i = = o h senate or the New Mexico house of representatives on the l ] b ,d i a º r effective date of the Cannabis Regulation Act shall not apply e r = t e w d m a n o for or be granted a license to engage in any commercial cannabisd activitym prior: to July 1, 2026.

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 20 - e a n e d r e l u [ A d cannabis activity prior to July 1, 2026.

The director shall suspend or revoke the license or permit and may fine the licensee in an amount not to exceed one thousand dollars ($1,000), or both, when the director finds that a licensee or the licensee's agent has made any material false statement or concealed any material facts in the e t 17 licensee's application for the license or permit granted w l n d 18 pursuant to the Cannabis Regulation Act or any rule promulgated = = 19 a l in accordance with that act.

A person aggrieved by an action i a e r 20 taken by the division pursuant to this subsection may request a t m m 21 and receive a hearing according to the procedures provided in d r e 22 Section 12 of this 2023 act before the disciplinary action c e s k 23 becomes effective."effective. e a n b 24 SECTION 5.

SectionHfl1º"»Hfl1 26-2C-8Hfl1ºO. NMSA 1978 (being Laws 2021 u [ (1st S.S.), Chapter 4, Section 8) is amended to read:

.223290.6The -division 19shall -promulgate "26-2C-8.rules to allow for the conversion of producer microbusiness and integrated cannabis microbusiness licenses to producer and h vertically integrated cannabis establishment licenses prior to u » r the expiration of the original license."»Hfl1 t h g e l i SECTION 5.

LICENSEES--DISCIPLINARYSection ACTIONS--SANCTIONS--26-2C-8 CIVILNMSA PENALTY.--1978 A.(being Laws 2021 h r i s (1st S.S.), Chapter 4, Section 8) is amended to read:

Ah violation, ofe theh provisions"26-2C-8. of the Cannabis Regulation Act by a licensee is grounds for disciplinary action.

B.LICENSEES--DISCIPLINARY ACTIONS--SANCTIONS-- t u g e b l e e , gh CIVIL PENALTY.-- n d d i = = o h A.

A violation of the provisions of the Cannabis l ] b ,d i a º r Regulation Act by a licensee is grounds for disciplinary e r = t e w d m a n o action.

d m :

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 21 - e a n e d r e l u [ A d B.

or e t 17 (4) suspend or revoke the license.

w l n d 18 C.

The division shall promulgate rules specifying = = 19 a l the criteria for imposition of sanctions and civil monetary i a e r 20 penalties.

a t m m 21 D.

The provisions of this section do not apply to dh r e 22 occupational health and safety rules promulgated pursuant to cg eo st khr 23 Section [3 of the Cannabis Regulation Act]Act ] 26-2C-3 NMSA 1978.

g e ai nk b 24 [E.

A person aggrieved by an action taken by the uh [r i s division pursuant to this section may request and receive a .223290.6h -, 20t, - hearing with the superintendent for the purpose of reviewing e u g e b l e e h the action in accordance with the Uniform Licensing Act.]" n d d i = = o h SECTION 6.

Section 26-2C-9 NMSA 1978 (being Laws 2021 l ] b ,d i a º e (1st S.S.), Chapter 4, Section 9) is amended to read:

r i = r t e w d m a n o "26-2C-9.

APPLICATION AND LICENSING FEES.-- A.d m :

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 22 - e a n e d r e l u [ A d A.

e t 17 (3) a cannabis manufacturer license, two w l n d 18 thousand five hundred dollars ($2,500) per year and an = = 19 a l additional fee of one thousand dollars ($1,000) per year for i a e r 20 each additional licensed premises of the licensee;

a t m m 21 (4) a cannabis producer license, two thousand dh r e 22 five hundred dollars ($2,500) per year and an additional fee of cu e» sr k 23 one thousand dollars ($1,000) per year for each additional et ah ng be 24l i licensed premises of the licensee;

uh [r i s (5) a cannabis retailer license, two thousand .223290.6h -, 21e -h five hundred dollars ($2,500) per year and an additional fee of t u g e b l e e , gh one thousand dollars ($1,000) per year for each additional n d d i = = o h licensed premises of the licensee;

l ] b ,d i a º r (6) a cannabis research laboratory license, twoe thousandr five= hundredt dollarse ($2,500)w perd yearm anda ann additionalo feetwo ofthousand onefive thousandhundred dollars ($1,000)($2,500) per year forand eachan additionald licensedm premises: of the licensee;

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 23 - e a n e d r e l u [ A d additional fee of one thousand dollars ($1,000) per year for each additional licensed premises of the licensee;

HGEICº (8) a cannabis nursery license, two thousand five hundred dollars ($2,500) per year and an additional fee of one thousand dollars ($1,000) per year for each additional licensed premises of the licensee;licensee;»HGEIC [(8)] HGEICº(9)»HGEIC HGEICº(8)»HGEIC a cannabis producer microbusiness license, up to one thousand dollars ($1,000) per year;

[(8)][(9)] (9)HGEICº(10)»HGEIC aHGEICº(9)»HGEIC cannabisan producerintegrated cannabis microbusiness e t 17 license, up to onetwo thousand five hundred dollars ($1,000)($2,500) per year;year and an additional fee of h five hundred dollars ($500) per year for each licensed premises g o t hr of the licensee;

wand lg ne di 18k [(9)][(10)] (10)HGEICº(11)»HGEIC anHGEICº(10)»HGEIC integrateda cannabish =r =i 19s acannabis lconsumption microbusinessarea, license, up to two thousand five hundred dollarsh i, at, e ru 20g ($2,500) per year and an additional fee of five hundred dollars a($2,500) t m m 21 ($500) per yearyear. for each licensed premises of the licensee;

ande db rl e 22 [(10)] (11) a cannabis consumption area, up to c e sh kB. 23 two thousand five hundred dollars ($2,500) per year.

Except for HJCº cannabis research n d d i = = o h laboratories,»HJC cannabis producer microbusinesses and l ] b ,d i a º e r i = r integrated cannabis microbusinesses, a licensee cultivating t e w d m a n bo 24cannabis B.plants shall be assessed an additional annual fee no d m :

Exceptb fore cannabisd producers microbusinessesº ando ut [n integrated= cannabis.223290.6AIC microbusinesses,March a5, licensee2023 cultivating(12:39pm) .223290.6s k m e - 2224 - cannabise plantsa shalln bee assessedd anr additionale annuall feeu no[ A d greater than fifty dollars ($50.00) per mature cannabis plant at the time of licensing or renewal.

Hfl1º C.

For producer licenses and vertically integrated cannabis establishment licenses that have been converted from producer microbusiness licenses or integrated cannabis establishment licenses, the division shall prorate fees for producer and vertically integrated cannabis establishment licenses and apply licensing fees already paid towards the prorated balance.»Hfl1 Hfl1ºC.»Hfl1 Hfl1ºD.»Hfl1 A licensee may increase the number of mature plants licensed at the time of renewal and one other time per year in increments of five hundred mature plants.

D.Hfl1º D.»Hfl1 Hfl1ºE.»Hfl1 [The initial application fee and the annual renewal fee for a vertically h integrated cannabis establishment license shall not exceed one g o t hr hundred twenty-five thousand dollars ($125,000) for a license g e i k for both medical cannabis activity and commercial cannabis h r i s activity.] The initial application fee and the annual renewal h , t, e u g fee for a license or renewal of a license that authorizes only e b l e e h medical cannabis activity shall be one-half the fee applicable n d d i = = o h to a license authorizing both medical cannabis activity and l ] b ,d i a º e r i = r commercial cannabis activity.

[Thet initiale applicationw feed andm the annual renewal fee for a verticallyn integratedo cannabisHfl1º establishmentE.»Hfl1 licenseHfl1ºF.»Hfl1 shallIf not exceed one hundred twenty-five thousand dollars ($125,000) for a license for both medical cannabis activityproducer andd commercialm cannabis: activity.] The initial application fee and the annual renewal fee for a license or renewal of a license that authorizes only medical cannabis activity shall be one-half the fee applicable to a license authorizing both medical cannabis activity and commercial e t 17 cannabis activity.

wb le d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 25 - e a n e d 18r E.e l u [ A d microbusiness or an integrated cannabis microbusiness enters into a business arrangement with another licensee with the purpose or having the effect of evading the limitations of the licensee's license, such licensee shall not be eligible for the lower fee prescribed in Subsection A of this section and shall pay the per-plant fee prescribed in Subsection B of this section.

IfHfl1º aF.»Hfl1 cannabisHfl1ºG.»Hfl1 producerThe microbusinessdivision orshall ancollect =all =renewal 19fees, aincluding l integrated cannabis microbusiness enters into a business i a e r 20 arrangement with another licensee with the purposerenewal orfees havingfor aall tlicensed mpremises, mat 21 the effecttime of evadingrenewal the limitations of the licensee's d r e 22 license, such licensee shall not be eligible for the lower fee c e s k 23 prescribed in Subsection A of this section and shall pay the e a nlicense. b 24 per-plant fee prescribed in Subsection B of this section.

uHfl1º [G.»Hfl1 F.Hfl1ºH.»Hfl1 The fee for the issuance of a cannabis server permit shall not exceed thirty- five dollars ($35.00).

Hfl1º H.»Hfl1 Hfl1ºI.»Hfl1 The division shall collectdeposit all renewalfees fees,collected .223290.6pursuant -to 23 - including the renewalCannabis feesRegulation forAct allin licensed premises, at the timecannabis ofregulation renewalfund." ofh aSECTION license.7.

G.Section 26-2C-12 NMSA 1978 (being Laws 2021 g o t hr (1st S.S.), Chapter 4, Section 12) is amended to read:

Theg feee fori thek issuance"26-2C-12. of a cannabis server permit shall not exceed thirty-five dollars ($35.00).

H.LOCAL CONTROL.-- h r i s A.

The division shall deposit all fees collected pursuant to the Cannabis Regulation Act in the cannabis regulation fund." SECTION 7.

Section 26-2C-12 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 12) is amended to read:

"26-2C-12.

LOCAL CONTROL.-- A.

h , t, e u g (1) adopt time, place and manner rules that do e b l e e h not conflict with the Cannabis Regulation Act or the Dee n d d i = = o h Johnson Clean Indoor Air Act, including rules that reasonably l ] b ,d i a º e limit density of licenses and operating times consistent with r i = r t e w d m a n o neighborhood uses;

and e t 17 (2) allow for the smoking, vaporizing and w l n d 18m ingesting: of cannabis products within an indoor or outdoor = = 19 a l cannabis consumption area if:

ib a e rd 20s (a)º unlesso licensedt pursuantn to= the.223290.6AIC LynnMarch a5, t2023 m(12:39pm) ms 21k andm Erine Compassionate- Use26 Act,- accesse toa then cannabise d r e 22l consumptionu area[ isA restrictedd to(2) personsallow twenty-onefor yearsthe smoking, vaporizing and ingesting of ccannabis eproducts swithin kan 23indoor ageor andoutdoor older;cannabis consumption area if:

and(a) eunless alicensed npursuant bto 24 (b) the cannabisLynn establishmentand orErin uCompassionate [Use integratedAct, cannabisaccess microbusinessto is located at a minimum .223290.6 - 24 - distance from a school or daycare center as determined by the localcannabis jurisdiction,consumption butarea whichis minimumrestricted distanceto shallpersons nottwenty-one beyears setof atage anyand moreolder; than three hundred feet from a school or daycare center that was in existence at the time the establishment or microbusiness was licensed.

and (b) the cannabis establishment or integrated cannabis microbusiness is located at a minimum distance from a school or daycare center as determined by the local jurisdiction, but which minimum distance shall not be set at any more than three hundred feet from a school or daycare center that was in existence at the time the establishment or microbusiness was licensed.

(1) prevent transportation of cannabis h products on public roads by a licensee that transports cannabis g o t hr products in compliance with the Cannabis Regulation Act;

g e i k (2) completely prohibit the operation of a h r i s licensee;

h , t, (3) prohibit or limit signage attached to or e u g e b l e e h located on licensed premises that identifies the premises as a n d d i = = o h cannabis establishment;

(4)l require] ab licensed,d premisesi [or a cannabisº consumptione area](4) torequire bea anylicensed morepremises than[or threea hundredcannabis feetr fromi a= er t 17e schoolw ord daycarem centera that was in existence at the time the w l n do 18consumption cannabisarea] establishmentto orbe integratedany cannabismore microbusinessthan wasthree =hundred =feet 19from a ld licensed;m :

ib e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 27 - e a n e d r 20e (5)l requireu an[ existingA licenseed school or daycare center that was in existence at athe licensedtime athe tcannabis mestablishment mor 21integrated premisescannabis tomicrobusiness relocate;was licensed;

or(5) drequire ran eexisting 22licensee (6)at prohibit a personlicensed frompremises producingto homegrownrelocate; c e s k 23 cannabis as provided for in the Cannabis Regulation Act." e a n b 24 SECTION 8.

Sectionor 26-2C-17(6) NMSAprohibit 1978a (beingperson Lawsfrom 2021producing uhomegrown [cannabis (1stas S.S.),provided Chapterfor 4,in Sectionthe 17)Cannabis isRegulation amendedAct." toSECTION read:8.

.223290.6Section -26-2C-17 25NMSA -1978 "26-2C-17.(being Laws 2021 (1st S.S.), Chapter 4, Section 17) is amended to read:

"26-2C-17.

The division shall promulgate rules consistent h with industry standards for cannabis products that establish g o t hr labeling and packaging requirements, including that:

g e i k (1) packages shall be resealable,Hfl2º child-opaque,»Hfl2 resistant,h r i s resealable, child-resistant, and, when possible,possible , compostable h , t, and recyclable or made from recycled materials;

e u g e b l e e h (2) packages and labels shall not be designed n d d i = = o h to be appealing to a child;child Hfl2º and shall not mimic the brand, l ] b ,d i a º e design, name, logo or colorway of a non-cannabis consumer r i = r t e w d m a n o product that has been traditionally marketed to children;

andd (3)m labels: shall include:

(a)b fore d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 28 - e a packagen containinge onlyd r e tl 17u cannabis[ leafA d (3) packages and labels shall not use cartoons or flower,symbols theor netimages, weightincluding images of cannabiscelebrities inor thecelebrity wlikenesses, lthat nare dcommonly 18used package;to market to minors»Hfl2 ;

= = 19 a l (b) identification of the licensee or i a e r 20 licensees that produced or manufactured the cannabis product, a t m m 21 the date on which the cannabis was harvested, the type of d r e 22 cannabis product and theHfl2º(3)»Hfl2 dateHfl2º(4)»Hfl2 onlabels whichshall theinclude: cannabis product was c e s k 23 manufactured and packaged;

e(a) for a npackage bcontaining 24only (c)cannabis potencyleaf andor pesticideflower, use;the net weight of cannabis in the package;

u(b) [identification (d)of athe listlicensee or licensees that produced or manufactured the cannabis product, the date on which the cannabis was harvested, the type of pharmacologicallycannabis activeproduct .223290.6and -the 26date -on ingredients;which the cannabis product was manufactured and packaged;

(e)(c) forpotency cannabis products containing non-cannabis ingredients, a list of all ingredients and apesticide disclosureuse; 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;

(f)(d) a warninglist ifof nutspharmacologically oractive otherh knowningredients; allergens are used in the item or in its manufacture;

(g)g ao logot designedhr by(e) thefor divisioncannabis thatproducts iscontaining distinctiveg ine design,i color,k sizenon-cannabis ingredients, a list of all ingredients and locationa suchh thatr i s disclosure of nutritional information for the logoproduct notifiesor ah reasonable, persont, thate u g cannabis extract disclosed in the packagesame containsmanner cannabis;required under e b l e e h federal law for nutritional labeling for food for human n d d i = = o h consumption;

l ] b ,d i a º e (f) a warning if nuts or other known r i = r t e w d m a n o allergens are used in the item or in its manufacture;

d m :

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 29 - e a n e d r e l u [ A d (g) a logo designed by the division that is distinctive in design, color, size and location such that the logo notifies a reasonable person that the package contains cannabis;

e t 17 (i) an expiration date;

and w l n d 18 (j) other information as required by = = 19 a l rules promulgated pursuant to the Cannabis Regulation Act." i a e r 20 SECTION 9.

Section 26-2C-28 NMSA 1978 (being Laws 2021 a t m m 21 (1st S.S.), Chapter 4, Section 28) is amended to read:

d r e 22 "26-2C-28.

UNLICENSED SALES OF CANNABIS--PENALTIES.-- c e s k 23 A.

e a n b 24 (1) distribution, sale, barter or giving away u [ of cannabis products;

or .223290.6h - 27 - (2) possession with intent to distribute, g o t hr sell, barter or give away cannabis products.

g e i k B.

Unless otherwise provided in the Cannabis h r i s Regulation Act or the Lynn and Erin Compassionate Use Act, it h , t, is unlawful for a person without a license to intentionally e u g e b l e e h traffic cannabis products.

n d d i = = o h C.

A person under eighteen years of age who l ] b ,d i a º e violates Subsection B of this section shall be subject to:

(1)r attendancei at= ar four-hourt evidence-basede drugw educationd andm legala rightsn programo (1) attendance at noa costfour-hour toevidence-based thed person;m :

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 30 - e a n e d r e l u [ A d drug education and legal rights program at no cost to the person;

Except as otherwise provided in Section [14 of the Cannabis Regulation Act] 26-2C-14 NMSA 1978, a person eighteen years of age or older who violates Subsection B of this section is guilty of a misdemeanor and shall be sentenced e t 17 pursuant to the provisions of Section 31-19-1 NMSA 1978.

w l n d 18 E.

A person eighteen years of age or older who = = 19 a l violates Subsection B of this section and who conducts i a e r 20 unlicensed cannabis product sales from a building, room or a t m m 21 other area open to the public in a manner that would lead a d r e 22 reasonable person to believe that the area is a cannabis c e s k 23 establishment licensed pursuant to the Cannabis Regulation Act e a n b 24 is guilty of a fourth degree felony and shall be sentenced u [ pursuant to the provisions of Section 31-18-15 NMSA 1978.

.223290.6h - 28 - F.

Cannabis and cannabis products seized by the u » r division or by a law enforcement agency as evidence of t h g e l i unlicensed activities in violation of Subsection B of this h r i s section shall be retained and disposed of pursuant to the h , e h Forfeiture Act." t u g e b l e e , gh SECTION 10.

Section 26-2C-31 NMSA 1978 (being Laws 2021 n d d i = = o h (1st S.S.), Chapter 4, Section 31) is amended to read:

l ] b ,d i a º r "26-2C-31.

UNLICENSED MANUFACTURING OF CANNABIS EXTRACT-- e r = t e w d m a n o UNLAWFUL SYNTHESIS OF TETRAHYDROCANNABINOL--PENALTY.--TETRAHYDROCANNABINOL A.--PENALTY.-- d m :

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 31 - e a n e d r e l u [ A d A.

e t 17 B.

It is unlawful to synthesize any w l n d 18 tetrahydrocannabinol without prior approval from the division = = 19 a l and sufficient scientific evidence showing that synthesized i a e r 20 tetrahydrocannabinol will not cause a significant threat to a t m m 21 public health and safety.

d r e 22 C.

A person who violates this section is guilty of c e s k 23 a fourth degree felony and shall be sentenced pursuant to the e a n b 24 provisions of Section 31-18-15 NMSA 1978." u [ SECTION 11.

A new section of the Cannabis Regulation Act .223290.6 - 29 - is enacted to read:

"[NEW MATERIAL] INVESTIGATIVE AUTHORITY AND POWERS.-- A.

To enforce the provisions of the Cannabis Regulation Act, the division is authorized to examine and require the production of pertinent records, books, information or evidence;

and require the presence of any person and require that person to testify under oath concerning the subject matter of the inquiry and to make a permanent record of the proceedings.

It is unlawful to synthesize any tetrahydrocannabinol without prior approval from the division and sufficient scientific evidence showing that synthesized tetrahydrocannabinol will not cause a significant threat to public health and safety.

C.

A person who violates this section is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978." SECTION 11.

A new section of the Cannabis Regulation Act h is enacted to read:

u » r "[NEW MATERIAL ] INVESTIGATIVE AUTHORITY AND POWERS.-- t h g e l i A.

To enforce the provisions of the Cannabis h r i s Regulation Act, the division is authorized to examine and h , e h require the production of pertinent records, books, information t u g e b l e e , gh or evidence;

and require the presence of any person and require n d d i = = o h that person to testify under oath concerning the subject matter l ] b ,d i a º r of the inquiry and to make a permanent record of the e r = t e w d m a n o proceedings.

d m :

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 32 - e a n e d r e l u [ A d B.

Any subpoena issued by the division shall state with reasonable certainty the nature of the evidence required to be produced, the time and place of the hearing, the nature of the inquiry or investigation and the consequences of failure e t 17 to obey the subpoena and shall bear the seal of the department w l n d 18 and be attested to by the director.

= = 19 a l D.

After service of a subpoena upon a person, if i a e r 20 the person neglects or refuses to appear or produce records or a t m m 21 other evidence in response to the subpoena or neglects or d r e 22 refuses to give testimony, as required, the division may invoke c e s k 23 the aid of the New Mexico district courts in the enforcement of e a n b 24 the subpoena.

In appropriate cases, the court shall issue its u [ order requiring the person to appear and testify or produce the .223290.6h - 30 - person's books or records and may, upon failure of the person u » r to comply with the order, punish the person for contempt.

t h g e l i E.

The division may exchange identification records h r i s and information with law enforcement agencies for official use.

h , e h Identification records received from the United States t u g e b l e e , gh department of justice, including identification records based n d d i = = o h on fingerprints, shall be used only to effectuate the licensing l ] b ,d i a º r purposes and provisions of the Cannabis Regulation Act.

The e r = t e w d m a n o department shall not disseminate such information except to otherd lawm enforcement: agencies for official use only." SECTION 12.

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 33 - e a n e d r e l u [ A d other law enforcement agencies for official use only." SECTION 12.

"[NEW MATERIAL]MATERIAL ] ADMINISTRATIVE PROCEEDINGS--COMPLAINTS-- INVESTIGATION--ORDER TO SHOW CAUSE--SERVICE--HEARINGS-- PROCEDURES--APPEAL.-- A.

Administrative hearings held pursuant to the e t 17 provisions of the Cannabis Regulation Act shall be conducted by w l n d 18 a hearing officer appointed by the director and shall be held = = 19 a l in the county in which the licensed premises is located, in the i a e r 20 county where the principal business address is listed on the a t m m 21 license or virtually with the consent of the licensee.

All d r e 22 hearings are open to the public.

c e s k 23 B.

After a complaint has been filed and e a n b 24 investigated, the director may issue a signed order for the u [ person to appear at a hearing.

The director shall appoint a .223290.6h - 31 - hearing officer no later than ten days prior to the date set g o t hr for the hearing at which the licensee shall appear to explain g e i k why the licensee's license or permit should not be suspended or h r i s revoked or why the licensee should not be fined, or both.

h , t, C.

e u g e b l e e h (1) administer oaths;

n d d i = = o h (2) compel the attendance of witnesses and the l ] b ,d i a º e production of documents, records and physical exhibits in any hearingr heldi under= ther provisionst ofe thew Cannabisd Regulationm Acta byn theo issuancehearing andheld serviceunder the provisions of subpoenasthe andCannabis subpoenasRegulation ducesd tecum;m :

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 34 - e a n e d r e l u [ A d Act by the issuance and service of subpoenas and subpoenas duces tecum;

e t 17 (6) hold conferences for the settlement or w l n d 18 simplification of the issues by consent of the parties;

= = 19 a l (7) dispose of procedural requests or similar i a e r 20 matters;

and a t m m 21 (8) reopen the hearing for the taking of d r e 22 additional evidence at any time prior to the taking of an c e s k 23 appeal.

e a n b 24 D.

The director shall send a copy of the complaint u [ and a copy of the order to show cause to the licensee by .223290.6h - 32 - certified mail at least fourteen days before the date set for g o t hr the hearing on the order to show cause.

g e i k E.

If the licensee fails to appear without good h r i s cause at the time and place designated in the order to show h , t, cause for the hearing, the hearing officer shall order the e u g e b l e e h nonappearance of the licensee to be entered in the record of n d d i = = o h hearing and shall order the license or permit suspended or l ] b ,d i a º e revoked or the licensee fined, or both, on all the grounds r i = r t e w d m a n o alleged in the complaint and shall cause the record of hearing tod showm the: particulars in detail.

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 35 - e a n e d r e l u [ A d to show the particulars in detail.

If the licensee admits guilt on all grounds set out in the complaint, the hearing officer shall order the suspension or revocation of the license or permit or the licensee fined, or both, and cause a record of hearing to be made showing the facts and particulars of the director's order of suspension or revocation of the license or permit or fine of e t 17 the licensee, or both.

In such a case, there shall be no w l n d 18 review or appeal of the proceedings.

= = 19 a l G.

If the licensee appears at the hearing and does i a e r 20 not testify or denies guilt of any of the grounds set out in a t m m 21 the charge, the hearing shall proceed as follows:

d r e 22 (1) the hearing officer shall administer oaths c e s k 23 to all witnesses, the department shall cause all testimony and e a n b 24 evidence in support of the grounds alleged in the complaint to u [ be presented in the presence of the licensee and the hearing .223290.6h - 33 - officer shall allow the licensee or the licensee's attorney to u » r cross-examine all witnesses;

t h g e l i (2) the licensee shall be allowed to present h r i s testimony and evidence the licensee may have in denial or in h , e h mitigation of the grounds set out in the charge;

t u g e b l e e , gh (3) the department shall have the right to n d d i = = o h cross-examine the licensee or any witness testifying in the l ] b ,d i a º r licensee's favor;

(4)e ther department= shallt presente anyw evidenced orm testimonya inn rebuttalo of(4) thatthe produceddepartment byshall thepresent licensee;any evidence d m :

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 36 - e a n e d r e l u [ A d or testimony in rebuttal of that produced by the licensee;

(6) if the licensee is found guilty on any ground alleged and proved, the director shall make an order of suspension or revocation of the license or permit or fine of e t 17 the licensee, or both;

and w l n d 18 (7) the rules of evidence shall not be = = 19 a l required to be observed, but the order of suspension or i a e r 20 revocation or fine, or both, shall be based upon substantial, a t m m 21 competent and relevant evidence and testimony appearing in the d r e 22 record of hearing.

c e s k 23 H.

If a license is revoked, the licensee shall not e a n b 24 be issued or be the transferee of a license within two years of u [ the date of revocation.

.223290.6h - 34 - I.

The director may compromise a penalty for a u » r violation of the Cannabis Regulation Act or of a rule or order t h g e l i of the division when the director deems it is in the best h r i s interest of the state.

h , e h J.

A licensee aggrieved or adversely affected by an t u g e b l e e , gh order of suspension, revocation or fine shall have the right to n d d i = = o h appeal to the district court pursuant to the provisions of l ] b ,d i a º r Section 39-3-1.1 NMSA 1978.

e r = t e w d m a n o K.

No appeal shall have the effect of suspending thed operationm of: the order of suspension, revocation or fine, but the hearing officer may suspend the operation of the order of suspension, revocation or fine pending an appeal for good cause shown and upon such terms and conditions as the hearing officer may find are just in the hearing officer's discretion.

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 37 - e a n e d r e l u [ A d the operation of the order of suspension, revocation or fine, but the hearing officer may suspend the operation of the order of suspension, revocation or fine pending an appeal for good cause shown and upon such terms and conditions as the hearing officer may find are just in the hearing officer's discretion.

No admission of guilt, admission against e t 17 interest or transcript of testimony made or given in a hearing w l n d 18 pursuant to this section shall be received or used in criminal = = 19 a l proceedings in which the licensee is a defendant;

provided, i a e r 20 however, if the licensee commits perjury in a hearing, the a t m m 21 evidence shall be admissible in a perjury trial if otherwise d r e 22 competent and relevant." c e s k 23 SECTION 13.

A new section of the Cannabis Regulation Act e a n b 24 is enacted to read:

u [ "[NEW MATERIAL]MATERIAL ] SEIZURE AND DESTRUCTION OF CANNABIS AND .223290.6h -CANNABIS 35PRODUCT.-- -u CANNABIS» PRODUCT.--r A.

The division may issue an administrative hold on t h g e l i the movement of cannabis or cannabis product to prevent the h r i s destruction of evidence, diversion or other threat to public h , e h safety pending an investigation of an alleged violation of the t u g e b l e e , gh Cannabis Regulation Act or rules promulgated pursuant to that n d d i = = o h act.

l ] b ,d i a º r B.

An administrative hold issued pursuant to this e r = t e w d m a n o section may be lifted only by order of the division or by agreementd betweenm the: division and the licensee subject to the hold.

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 38 - e a n e d r e l u [ A d agreement between the division and the licensee subject to the hold.

The division may order the destruction of e t 17 cannabis or cannabis products subject to an embargo after w l n d 18 notice and opportunity for a hearing before the division.

A = = 19 a l hearing held pursuant to this section shall be held in i a e r 20 accordance with hearing procedures set forth in the Cannabis a t m m 21 Regulation Act.

d r e 22 E.

If cannabis or cannabis products are ordered c e s k 23 destroyed pursuant to this section, the licensee is responsible e a n b 24 for completing the destruction in coordination with the u [ division and in accordance with rules promulgated pursuant to .223290.6h - 36 - this section.

g o t hr F.

The licensee is responsible for all expenses g e i k related to the embargo and destruction of cannabis or cannabis h r i s products ordered pursuant to this section." h , t, SECTION 14.

A new section of the Cannabis Regulation Act e u g e b l e e h is enacted to read:

n d d i = = o h "[NEW MATERIAL]MATERIAL ] SUMMARY SUSPENSION.-- l ] b ,d i a º e A.

As used in this section, "full investigation" r i = r t e w d m a n o means a reasonable ascertainment of the underlying facts on whichd them division: action is based.

b e d s º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 39 - e a n e d r e l u [ A d which the division action is based.

When the division has objective and reasonable grounds to believe and finds, upon a full investigation, that the licensee is conducting itself in a way to pose an imminent threat to public health, safety or welfare Hfl1º or the licensee has been guilty of deliberate and willful violation of either the Cannabis Regulation Act or rules promulgated pursuant to that eact»Hfl1 t, 17 act, the division may summarily suspend the license pending a w l n d 18 final decision to be determined by the proceedings for = = 19 a l suspension or revocation that shall be instituted and i a e r 20 determined promptly.

a t m m 21 C.

When issuing an order for summary suspension, d r e 22 the division shall incorporate its findings of licensee conduct c e s k 23 that poses an imminent threat to public health, safety or e a n b 24 welfare or deliberate and willful violations by the licensee.

u [ D.

A license may be summarily suspended by the .223290.6h - 37 - division without notice pending any prosecution, investigation u » r or public hearing pursuant to the Cannabis Regulation Act or t h g e l i rules promulgated pursuant to that act." h r i s SECTION 15.

A new section of the Cannabis Regulation Act h , e h is enacted to read:

t u g e b l e e , gh "[NEW MATERIAL]MATERIAL ] AUTHORITY OF DIVISION.--The division has n d d i = = o h the authority over all matters relating to the issuance, l ] b ,d i a º r denial, suspension or revocation of licenses under the Cannabis e r = t e w d m a n o Regulation Act.

The division may request the department of publicd safetym to: provide investigatory and enforcement support as deemed necessary." SECTION 16.

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 40 - e a n e d r e l u [ A d public safety to provide investigatory and enforcement support as deemed necessary." SECTION 16.

Except as provided in Subsection B of this section, the assets of a corporation in the process of e t 17 dissolution shall be applied and distributed as follows:

w l n d 18 [A.] (1) all liabilities and obligations of = = 19 a l the corporation shall be paid and discharged, or adequate i a e r 20 provision shall be made therefor;

a t m m 21 [B.] (2) assets held by the corporation upon d r e 22 condition requiring return, transfer or conveyance, which c e s k 23 condition occurs by reason of the dissolution, shall be e a n b 24 returned, transferred or conveyed in accordance with such u [ requirements;

.223290.6h - 38 - [C.] (3) assets received and held by the g o t hr corporation subject to limitations permitting their use only g e i k for charitable, religious, eleemosynary, benevolent, h r i s educational or similar purposes, but not held upon a condition h , t, requiring return, transfer or conveyance by reason of the e u g e b l e e h dissolution, shall be transferred or conveyed to one or more n d d i = = o h nonprofit domestic or foreign corporations, nonprofit societies l ] b ,d i a º e or nonprofit organizations engaged in activities substantially r i = r t e w d m a n o similar to those of the dissolving corporation, pursuant to a pland ofm distribution: adopted as provided in the Nonprofit Corporation Act;

[D.]b (4)e otherd assets,s ifº any,o shallt ben distributed= in.223290.6AIC accordanceMarch with5, the2023 provisions(12:39pm) ofs thek articlesm ofe incorporation- or41 the- bylaws,e buta inn noe eventd mayr anye member,l formeru member,[ director,A formerd director,plan officerof or former officer receive directly or indirectly any distribution oradopted eas tprovided 17in portionthe ofNonprofit aCorporation distributionAct; of any assets;

and[D.] w(4) lother nassets, dif 18any, [E.]shall (5) any remaining assets may be =distributed =in 19accordance awith lthe distributedprovisions toof suchthe persons,articles nonprofitof societies,incorporation nonprofitor ithe abylaws, ebut rin 20no organizationsevent ormay nonprofitany domesticmember, orformer foreignmember, corporationsdirector, aformer tdirector, mofficer mor 21former whetherofficer forreceive profitdirectly or nonprofitindirectly asany maydistribution beor specifiedportion inof a plandistribution d r e 22 of distributionany adoptedassets; as provided in the Nonprofit c e s k 23 Corporation Act.

eand [E.] (5) any remaining assets may be distributed to such persons, nonprofit societies, nonprofit organizations or nonprofit domestic or foreign corporations whether for profit or nonprofit as may be specified in a nplan bof 24distribution B.adopted as provided in the Nonprofit Corporation Act.

AB. nonprofit corporation that was incorporated in u [ order to qualify for a license as a licensed nonprofit producer .223290.6 - 39 - pursuant to department of health rules under the Lynn and Erin Compassionate Use Act may dissolve itself and incorporate as a for-profit corporation pursuant to the Business Corporation Act.

TheA assetsnonprofit corporation that was incorporated in order to qualify for a license as a licensed nonprofit producer h pursuant to department of health rules under the nonprofitLynn corporationand shallErin beu applied» r Compassionate Use Act may HGEICºdissolve itself and distributedincorporate ast followsh ifg thee corporationl didi notas»HGEIC haveHGEICºconvert into»HGEIC a federalfor-profit taxcorporation exemptionh asr ai nonprofits corporation:pursuant to the Business Corporation Act.

(1)The allassets liabilitiesof andthe obligationsh of, thee h nonprofit corporation shall be paidapplied and dischargeddistributed oras adequatet provisionu shallg bee madeb forl paymente ande discharge;, gh follows if the corporation did not have a federal tax exemption n d d i = = o h as a nonprofit corporation:

(2)l assets] heldb by,d thei corporationa onº conditionr requiring(1) return,all transferliabilities orand conveyance,obligations whichof conditionthe occurse byr reason= oft thee dissolution,w d m a n o corporation shall be returned,paid transferredand discharged or conveyedadequate inprovision accordanced withm the: requirements;

(3)b assetsr received and held by the corporation subject to limitations permitting their use only e t 17º foro eleemosynary,t religious, benevolent, educational or similar w l n d 18 purposes, but not held on a condition requiring return, = =.223290.6AIC 19March a5, l2023 transfer(12:39pm) ors conveyancek bym reasone of- the42 dissolution,- shall be i a e r 20 transferred or conveyed to one or more nonprofit domestic a tn me m 21 corporations, nonprofit societies or nonprofit organizations d r e 22l engagedu in[ activitiesA substantiallyd similarshall tobe thosemade offor thepayment cand edischarge; s k 23 dissolving corporation, pursuant to a plan of distribution e a n b 24 adopted as provided in the Nonprofit Corporation Act;

u(2) [assets (4)held anyby remainingthe assetscorporation shallon becondition distributedrequiring .223290.6return, -transfer 40or -conveyance, towhich thecondition newoccurs for-profitby corporationreason accordingof tothe aHGEICºdissolution»HGEIC planHGEICºconversion»HGEIC of, distributionshall adoptedbe asreturned, providedtransferred or conveyed in theaccordance Nonprofitwith Corporationthe Act;requirements;

and(3) (5)assets inreceived noand eventheld shallby anythe member,corporation formersubject member,to director,limitations formerpermitting director,their officeruse oronly formerfor officereleemosynary, receivereligious, directlybenevolent, educational or indirectlysimilar anypurposes, distributionbut ornot portionheld ofon a distributioncondition ofrequiring anyreturn, assetstransfer or conveyance by reason of the nonprofitHGEICºdissolution»HGEIC corporation."HGEICºconversion»HGEIC -, 41shall -be 10transferred 12or 14conveyed 16to eone tor 17more wnonprofit ldomestic ncorporations, dnonprofit 18societies =or =nonprofit 19organizations aengaged lin iactivities asubstantially esimilar rto 20those aof tthe mHGEICºdissolving»HGEIC mHGEICºconverting»HGEIC 21corporation, dh rpursuant eto 22a cplan eof sdistribution kadopted 23as eprovided ain nthe bu 24» ur [Nonprofit .223290.6Corporation Act;

HGEICºand»HGEIC t h g e l i (4) any remaining assets shall be distributed h r i s to the new for-profit corporation according to a plan of h , e h distribution adopted as provided in the Nonprofit Corporation t u g e b l e e , gh Act HGEICº;

and»HGEIC HGEICº"»HGEIC n d d i = = o h HGEICº(5) in no event shall any member, l ] b ,d i a º r former member, director, former director, officer or former e r = t e w d m a n o officer receive directly or indirectly any distribution or d m :

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k m e - 43 - e a n e d r e l u [ A d portion of a distribution of any assets of the nonprofit corporation."»HGEIC - 44 - » g o » r h t i k l i g t h s , e h t l i w l b l e e , g n d l h = = b , a l º d i a r e r = , a t e d m a n o d m :

b r e t º o t n = .223290.6AIC March 5, 2023 (12:39pm) s k em e e a n e d r e l u [ A d