HB 331 — CANNABIS LICENSE BACKGROUND CHECK

HOUSEFIFTY-SIXTH BILL 331 56TH LEGISLATURE -STATEOFNEWMEXICO- FIRST SESSION, 2023 INTRODUCEDFebruary BY17, Tara2023 L.Mr.

LujanSpeaker: and Cliff R.

PirtleYour 6COMMERCE 8& 10ECONOMIC ANDEVELOPMENT ACTCOMMITTEE RELATING, TOto CANNABISwhom REGULATION;has been referred HOUSE BILL 331 has had it under consideration and reports same with recommendation that it DO PASS , and thence referred to the JUDICIARY COMMITTEE .

PROVIDINGRespectfully FORsubmitted, STATEDoreen CRIMINALY. HISTORY CHECKS AND NATIONAL CRIMINAL HISTORY BACKGROUND CHECKS AS A CONDITION OF ELIGIBILITY FOR LICENSURE.

15Gallegos, BEChair ITAdopted ENACTEDNot BYAdopted THE(Chief LEGISLATUREClerk) OF(Chief THEClerk) STATEDate OFThe NEWroll MEXICO:call vote was 10 For 0 Against Yes:

SECTION10 1.No:

Section0 26-2C-7Excused: NMSA 1978 (being Laws 2021 e t 17 (1st S.S.), Chapter 4, Section 7) is amended to read:

wLente lAbsent: n d 18 "26-2C-7.

COMMERCIALNone CANNABISZ:\CommRep\HB0331CE1.wpd ACTIVITY LICENSING-- = = 19 a l APPLICATION--ISSUANCE AND DENIAL OF A LICENSE.-- i a e r 20 A.

A license issued pursuant to the Cannabis a t m m 21 Regulation Act shall not be subject to execution, attachment, a d r e 22 security transaction, liens or receivership.

c e s k 23 B.

In carrying out its commercial cannabis activity e a n b 24 licensing duties, the division shall:

u [ (1) [no later than September 1, 2021] accept .224308.1 and [begin processing] process 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) no later than January 1, 2022, accept and begin processing license applications for all license types;

(3)] (2) require as a condition of licensing pursuant to the Cannabis Regulation Act that the applicant demonstrate that the applicant has a legal right to a commercial water 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 valid water right or from a water provider that the use of water for cannabis production is compliant with that water provider's rules;

and e t 17 [(4)] (3) if an applicant applies for a w l n d 18 cannabis producer license, [or a cannabis manufacturer license = = 19 a l in addition to the requirements in Paragraph (3) of this i a e r 20 subsection] require that the applicant 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:

c e s k 23 (a) [for a cannabis producer] drip e a n b 24 irrigation and water collection;

u [ (b) natural lighting and energy .224308.1 - 2 - efficiency measures;

and (c) renewable energy generation.

[and (5) allow commercial cannabis activity retail sales no later than April 1, 2022 and otherwise allow activities authorized by the Cannabis Regulation Act or the medical cannabis program as of the time of licensure of a licensee, so long as a minimum of twenty-five percent of monthly cannabis sales are to qualified patients, primary caregivers and reciprocal participants or sold wholesale to other licensees that meet or exceed the twenty-five percent sales to qualified patients, primary caregivers and reciprocal participants until December 31, 2022.] C.

Once the division deems an application complete, the division has ninety days to issue or deny a license application.

D.

The division shall deny an application for an e t 17 initial license or renewal if:

w l n d 18 (1) the application does not include = = 19 a l information required by the division;

or i a e r 20 (2) the applicant or a controlling person of a t m m 21 the applicant has been convicted of an offense that is d r e 22 substantially related to the qualifications, functions or c e s k 23 duties of the applicant's business;

provided that if the e a n b 24 division determines that the applicant or controlling person is u [ otherwise qualified for a license and that issuing a license to .224308.1 - 3 - the applicant would not compromise public safety, the division shall conduct a thorough review of the conviction, including the nature of the offense, surrounding circumstances and any evidence of the applicant's or controlling person's rehabilitation following the conviction, and based on that review, determine whether the applicant should be issued a license.

E.

For purposes of Subsection D of this section, the following are considered substantially related to the qualifications, functions or duties of a person seeking a license:

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

(2) a felony conviction for hiring, employing or otherwise using a person younger than eighteen years of age to:

e t 17 (a) prepare for sale, transport or carry w l n d 18 a controlled substance;

or = = 19 a l (b) sell, give away or offer to sell a i a e r 20 controlled substance to any person;

and a t m m 21 (3) any other offense as determined by the d r e 22 division.

c e s k 23 F.

A conviction for which the related sentence, e a n b 24 including any term of probation or parole, is completed for the u [ possession, use, manufacture, distribution or dispensing or the .224308.1 - 4 - possession with the intent to manufacture, distribute or dispense cannabis is not considered substantially related to the qualifications, functions or duties of a person seeking a license and shall not be the sole ground on which an application is denied.

The division shall comply with the provisions of the Criminal Offender Employment Act.

G.

The division shall deny an application if an applicant, a controlling person or the premises for which a license is sought does not qualify for licensure pursuant to the Cannabis Regulation Act.

H.