SB 6 — CANNABIS REGULATION CHANGES

K.

submissions in response to a competitive grant, land lease or scholarship and related scoring materials and evaluation reports until finalists are publicly named or the award is announced;

[and] L.

information developed or obtained by the cannabis control division of the regulation and licensing department during an enforcement investigation HJCºSfl1ºor inspection relating to violations of the Cannabis Regulation Act, which investigation or inspection is pending»Sfl1»HJC ;

and [L.] M.

as otherwise provided by law."»HJC SECTION HJCº 2.»HJC HJCº1.»HJC Section 26-2C-1 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 1) is amended h g to read:

o t hr g e "26-2C-1.

SHORT TITLE.--[Sections 1 through 42 of this i k h r act] Chapter 26, Article 2C NMSA 1978 may be cited as the i s h "Cannabis Regulation Act"." , t, e u g e b l SECTION HJCº 3.»HJC HJCº2.»HJC Section 26-2C-2 NMSA 1978 e e h n d d i (being Laws 2021 (1st S.S.), Chapter 4, Section 2) is amended = = o h l ] b ,d to read:

i a º e r i = r "26-2C-2.

DEFINITIONS.--As used in the Cannabis t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 4 - e a n e d r e l u [ A d SJC/SB 6 Regulation Act:

[A.

"advertisement":

(1) means a statement or a depiction that is intended to induce the purchase of cannabis products and that is displayed in printed material or on a sign or other outdoor display or presented in a radio, television or other media broadcast or in digital media;

and (2) does not include:

(a) a sign or outdoor display or other statement permanently affixed to a licensed premises that is intended to induce the sale of a cannabis product produced or sold on the premises;

(b) a label affixed to a cannabis product or the covering, wrapper or container of a cannabis product;

or (c) an editorial or other material h g printed in a publication when the publication of the editorial o t hr or material was not paid for by a licensee and was not intended g e i k h r to promote the sale of cannabis products by a particular brand i s h or company;

, t, e u g B.] A.

e b l e e h (1) means all parts of the plant genus n d d i = = o h l ] b ,d Cannabis containing a delta-9-tetrahydrocannabinol i a º e r i = r concentration of more than three-tenths percent on a dry weight tbasis, ewhether wgrowing dor mnot; a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 5 - e a n e d r e l u [ A d SJC/SB 6 basis, whether growing or not;

or (b) the weight of any other ingredient combined with cannabis [products ] to prepare topical or oral administrations, food, drink or [another ] other product;

[C.B.

]"cannabis B.consumption area" means an area of a licensed premises where cannabis products may be served and consumed;

"cannabisC. consumption area" means an area of a licensed premises where cannabis products may be served h g and consumed;

o"cannabis tcourier" hrmeans [D.a person that SJC/SB 6 Page 2 transports commercial or medical cannabis products to consumers;

]D. C.

"cannabis courier" means a person that g e i k h r transports commercial or medical cannabis products to i s h [qualified patients, primary caregivers or reciprocal , t, e u g participants or directly to] consumers;

e b l e e h [E.

] D.

n d d i = = o h l ] b ,d (1) a cannabis testing laboratory;

i a º e r i = r (2) a cannabis manufacturer;

t(3) e w d m a ncannabis oproducer; d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 6 - e a n e d r e l u [ A d SJC/SB 6 (3) a cannabis producer;

[or ] (8) an integrated cannabis microbusiness;

[F.] E.

[G.F.

]"cannabis F.flowers" means only the flowers of a cannabis plant;

"cannabisG. flowers" means only the flowers h g of a cannabis plant;

o"cannabis tmanufacturer" hrmeans [H.a person that:

](1) G.manufactures cannabis products;

"cannabis(2) manufacturer"packages meanscannabis aproducts personfor gresale; e i k h r that:

iSJC/SB s6 hPage (1)3 manufacturesor (3) purchases, acquires, sells or transports wholesale cannabis products;products to other cannabis establishments;

,H. t, e u g (2) packages cannabis products for resale;

or e b l e e h [(3) has cannabis products tested by a n d d i = = o h l ] b ,d cannabis testing laboratory;

or i a º e r i = r (4)] (3) purchases, acquires, sells or t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 7 - e a n e d r e l u [ A d SJC/SB 6 transports wholesale cannabis products to other cannabis establishments;

[I.

] H.

[(2)(2) hastransports unprocessed cannabis productsonly testedto byother a cannabis testingestablishments; laboratory;

(3)]or (2)(3) transportssells unprocessed cannabis [products]wholesale; only to other cannabis establishments;

orI. [(4)] (3) sells cannabis [products] wholesale;

[J.

] I.

[K.J.

] J.

hK. g [L.

]"cannabis K.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;

"cannabisL. research laboratory" means a o t hr facility that produces or possesses cannabis products and all g e i k h r parts of the plant genus Cannabis for the purpose of studying i s h cannabis cultivation, characteristics or uses;

,"cannabis t,retailer" emeans ua gperson [M.that sells cannabis products to consumers;

]M. L.

"cannabis retailer"testing laboratory" means a personfacility that esamples, bcollects land etests e h sells cannabis products toand [qualifiedtransports patients,cannabis primaryproducts nfor dthe dpurpose iof =testing; = o h l ] b ,d caregivers or reciprocal participants or directly to] i a º e r i = r consumers;

tN. e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 8 - e a n e d r e l u [ A d SJC/SB 6 [N.

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

O.

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

P.] M.

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

[Q.

"cannabis training and education program" means a practical or academic curriculum offered by a New Mexico public post-secondary educational institution designed to prepare students for participation in the cannabis industry;

R.] N.

hSJC/SB g6 Page 4 (1) means the cultivation, production, o t hr possession, manufacture, storage, testing, researching, g e i k h r packaging and labeling, transportation, couriering, purchase i s h for resale, sale or consignment of cannabis products;

and , t, e u g (2) does not include activities related only e b l e e h to the medical cannabis program [to cannabis training and n d d i = = o h l ] b ,d education programs] or to the personal cultivation or use of i a º e r i = r cannabis productsproducts; ;

tO. e w d m a n o d m :

b"consumer" emeans da sperson ºtwenty-one oyears tof nage =or .227831.1AIColder Februarywho 13,legally 2024purchases, (1:48pm)acquires, sowns, kpossesses mor euses -a 9commercial -cannabis eproduct not for resale or a nperson ewho dholds ra emedical lcannabis uprogram [registry Aidentification dcard SJC/SBissued 6by [S.the department of health or is a reciprocal participant;

]P. O.

"consumer" means a person twenty-one years of age or older who legally purchases, acquires, owns, possesses or uses a commercial cannabis product [for a purpose other than] not for resale or a person who holds a medical cannabis program registry identification card issued by the department of health or is a reciprocal participant;

[T.

] P.

[U.Q.

] Q.

[V.R.

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

"cultivation"SJC/SB means6 anyPage activity5 involvingS. h g the planting, growing, harvesting, drying, curing, grading or o t hr trimming of cannabis;

g"department" emeans ithe kregulation hand rlicensing [W.department;

]T. S.

"department""director" means the regulationdirector andof ithe sdivision; h licensing department;

,U. t, e u g [X.

]"division" T.means the cannabis control division of the department;

"director"V. means the director of the e b l e e h division;

n d d i = = o h l ] b ,d [Y.

] U.

"division" means the cannabis control i a º e r i = r division of the department;

t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 10 - e a n e d r e l u [ A d SJC/SB 6 [Z.

] V.

[AA.W.

]"facility" W.means a building, space or grounds licensed for the production, storage, testing, manufacturing, distribution, sale or consumption of cannabis products;

"facility"X. means a building, space or grounds licensed for the production, [possession ] storage, testing, manufacturing, [or ] distribution, sale or consumption of [cannabis, cannabis extracts or] cannabis products;

[BB.

] X.

hY. g [CC.

]"homegrown" Y.or "homemade" means grown or made for purposes that are not for resale;

"homegrown"Z. or "homemade" means grown or o t hr made for purposes that are not [dependent or conditioned upon g e i k h r the provision or receipt of financial consideration] for i s h resale;

, t, e u g [DD.

"household" means a housing unit and includes e b l e e h any place in or around the housing unit at which an occupant of n d d i = = o h l ] b ,d the housing unit produces, manufactures, keeps or stores i a º e r i = r homegrown cannabis or homemade cannabis products;] t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 11 - e a n e d r e l u [ A d SJC/SB 6 Z.

SJC/SB 6 Page 6 (1) produced or manufactured outside New Mexico;

[EE.] AA.

[FF.BB.

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

"industryCC. standards" means the prevailing h g customary standards of business practice in the cannabis o t hr industry in jurisdictions within the United States;

g"integrated ecannabis imicrobusiness" kmeans ha rperson [GG.that is licensed to conduct one or more of the following:

](1) CC.production of cannabis at a single licensed premises;

"integratedprovided cannabisthat microbusiness"the means i s h a person thatshall isnot [authorizedpossess ]more licensedthan totwo conducthundred onetotal ormature morecannabis ,plants t,at eany uone gtime; of the following:

e b l e e h (1) production of cannabis at a single n d d i = = o h l ] b ,d licensed premises;

provided that the person shall not possess i a º e r i = r more than two hundred total mature cannabis plants at any one t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 12 - e a n e d r e l u [ A d SJC/SB 6 time;

SJC/SB 6 Page 7 (3) sales and transportation of [only ] cannabis products produced or manufactured by that person or another cannabis producer microbusiness or integrated cannabis microbusiness;

and (5) couriering of cannabis products [to qualified patients, primary caregivers or reciprocal participants or directly] to consumers;

[HH.DD.

] DD.

(1) all enclosed public and private areas at the location that are used in the business and includes h g cannabis consumption areasareas, , offices, kitchens, restrooms and o t hr storerooms;

g e i k h r (2) all areas outside of a building that are i s h specifically included in the license;

[for(3) theall production,areas ,of t,a estandalone ucannabis gconsumption manufacturing,area, wholesaleincluding saleretail and other areas, whether in enclosed or retailoutside salespaces, ofand including private or members-only clubs where cannabis eproducts bare lavailable efor esale hor products;consumption;

and]and n(4) dwith drespect ito =a =location othat his lspecifically ]licensed bfor ,dthe (3)production allof areascannabis outside of a standalonebuilding, cannabisthe iamount aof ºland ethat rthe ilicensee =owns, rleases consumptionor area,has includinga retailright andto otheroccupy areas,that whetheris identified in tthe eSJC/SB w6 dPage m8 aapplication nfor olicensure dfor mcultivation :of cannabis;

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 13 - e a n e d r e l u [ A d SJC/SB 6 enclosed or outside spaces, and including private or members- only clubs where cannabis products are available for sale or consumption;

and [(3)] (4) with respect to a location that is specifically licensed for the production of cannabis outside of a building, the [entire unit ] amount of land that [is created by subsection or partition of land that] the licensee owns, leases or has a right to occupy that is identified in the application for licensure for cultivation of cannabis;

[II.EE.

] EE.

[JJ.FF.

] FF.

hGG. g [KK.

]"medical GG.cannabis" means cannabis products used by a qualified patient or reciprocal participant in accordance with the Lynn and Erin Compassionate Use Act;

"medicalHH. cannabis" means cannabis o t hr products used by a qualified patient or reciprocal participant g e i k h r in accordance with the Lynn and Erin Compassionate Use Act;

i"medical scannabis hprogram" [LL.means the program created pursuant to the Lynn and Erin Compassionate Use Act;

]II. HH.

"medical cannabis program"registry" means the ,system t,by ewhich uthe gdepartment programof createdhealth pursuantapproves toor thedenies Lynnapplications and Erinissues Compassionateand Userenews eregistry bidentification lcards efor equalified hpatients Act;and primary caregivers;

nJJ. d d i = = o h l ] b ,d [MM.

] II.

"medical cannabis registry" means the i a º e r i = r system by which the department of health approves or denies t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 14 - e a n e d r e l u [ A d SJC/SB 6 applications and issues and renews registry identification cards for qualified patients and primary caregivers ;

[NN.

] JJ.

[OO.KK.

]"public KK.space" means any place to which the general public has access;

"publicLL. [place] space" means [a] any place 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;

highways;"qualified patient" means a resident of SJC/SB 6 Page 9 New Mexico who holds a registry identification card pursuant to the Lynn and Erin Compassionate Use Act;

streets;MM.

schools;"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;

places of amusement;

parks;

playgrounds;

and places used in connection with public passenger transportation];

[PP.

] LL.

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

o t hr [QQ.

] MM.

"reciprocal participant" means a person g e i k h r who is not a resident of New Mexico and who holds proof of i s h enrollment by a governmental regulatory authority to , t, e u g participate in the medical cannabis program of another state of e b l e e h the United States, the District of Columbia or a territory or n d d i = = o h l ] b ,d commonwealth of the United States in which the person resides i a º e r i = r or a person who holds proof of enrollment by a governmental t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 15 - e a n e d r e l u [ A d SJC/SB 6 regulatory authority of a New Mexico Indian nation, tribe or pueblo to participate in its medical cannabis program;

[RR.] OO.

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

[SS.PP.

] PP.

[TT.QQ.

] QQ.

and [UU.RR.

]"vertically RR.integrated cannabis establishment" SJC/SB 6 Page 10 means a person that is authorized to act as one or more of the following:

"vertically(1) integrateda cannabis hcourier; g establishment" means a person that is authorized to act as o t hr [any] one or more of the following:

g(2) e i k h r (1) a cannabis courier;manufacturer;

i(3) s h (2) a cannabis manufacturer;producer;

,and t,(4) e u g (3) a cannabis producer;retailer." SECTION 3.

and e b l e e h (4) a cannabis retailer." n d d i = = o h l ] b ,d SECTION HJCº 4.»HJC HJCº3.»HJC Section 26-2C-6 NMSA 1978 i a º e r i = r (being Laws 2021 (1st S.S.), Chapter 4, Section 6, as amended) tis eamended wto dread: m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 16 - e a n e d r e l u [ A d SJC/SB 6 is amended to read:

The division shall regulate [and administer and may collect fees in connection with the administration of] the following in accordance with the Uniform Licensing Act, unless otherwise provided in the Cannabis Regulation Act:

(1) commercial cannabis activityactivity; [and licensing related to commercial cannabis activity];

The division [shall follow the provisions of the h g Uniform Licensing Act when licensing or permitting] may issue, o t hr renew, deny, suspend or revoke licenses or discipline licensees g e i k h r for the following:

i s h (1) cannabis consumption areas;

, t, e u g (2) cannabis couriers;

eSJC/SB b6 lPage e11 e h (3) cannabis manufacturers;

n d d i = = o h l ] b ,d (4) cannabis producer microbusinesses;

i a º e r i = r (5) cannabis producers;

t(6) ecannabis wresearch dlaboratories; m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 17 - e a n e d r e l u [ A d SJC/SB 6 (6) cannabis research laboratories;

The division shall include a clear designation on all licenses [and permits ] that indicates whether the license [or permit ] is for medical cannabis activity, commercial cannabis activity or bothboth. [or for cannabis training and education 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 g consignment from a cannabis producer microbusiness or an o t hr integrated cannabis microbusinessmicrobusiness. [licensed pursuant the g e i k h r Cannabis Regulation Act].

i s h E.

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

A licensee shall notify the tdivision ewhen wthe dlicensee mbegins aSJC/SB n6 oPage d12 mor :ends operations pursuant to the license.

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 18 - e a n e d r e l u [ A d SJC/SB 6 division when the licensee begins or ends operations pursuant to the license.

The director shall not renew a license [issued pursuant 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 certain date:

[No ] A license shall not be transferable or assignable from a licensee to another person.

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

g e i k h r H.

A license shall not be subject to execution, i s h attachment, a security transaction, liens or receivership.

, t, e u g [H.] I.

Except for verification of age, the e b l e e h division shall not require licensees to request information n d d i = = o h l ] b ,d from consumers or impose any residency requirement upon i a º e r i = r consumers for the purchase of commercial cannabis productsproducts. t e w d m a n o d m :

bThe edivision dmay srequire ºlicensees oto trequest ninformation =from .227831.1AICSJC/SB February6 13,Page 202413 (1:48pm)consumers sfor kthe mpurchase eof -medical 19cannabis -products, ewhich amay ninclude ethe dpresentation rof elegal lidentification uissued [by Aan dauthorized SJC/SBgovernmental 6entity [pursuantor toother thedocuments commercialas cannabisrequired activity authorized by the Cannabismedical Regulationcannabis Act].program.

TheJ. division may require licensees to request information from consumers for the purchase of medical 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.] J.

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 premises of a cannabis establishment except as otherwise specifically provided for by [the Cannabis Regulation ] that h u act.

A licensee may conduct any lawful activity or any » r t h combination of lawful activities at a licensed premises g e l i [provided that the licensee is not a licensee pursuant to the h r i s h , Liquor Control Act] except that a cannabis licensee shall not e h t u g occupy any premises that also houses a business holding a e b l e e , gh license under the Liquor Control Act that allows the sale or n d d i = = o h l ] b ,d giving away of alcoholic beverages by the glass or package, i a º r e r = including growlers, to the public or to members of a private tclub eor wotherwise dallows mconsumption aof nalcohol oon dthe mpremises. :

b r e t º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 20 - e a n e d r e l u [ A d SJC/SB 6 club or otherwise allows consumption of alcohol on the premises.

Smoking in a cannabis consumption area on a licensed premises shall be allowed only if the cannabis consumption area is in a designated smoking area or in a standalone building from which smoke does not infiltrate SJC/SB 6 Page 14 other indoor workplaces or other indoor public places where smoking is otherwise prohibited pursuant to the Dee Johnson Clean Indoor Air Act.

[J.] L.

Licensees are specifically allowed to conduct other licensed activities, including activities pursuant to the Hemp Manufacturing Act [except for sales of alcoholic beverages] and the Liquor Control Act except for co-co-location location as specified in Subsection J of this section.

[K.] M.

A person properly licensed and in good standing pursuant to the Lynn and Erin Compassionate Use Act on h g the effective date of the Cannabis Regulation Act may continue o t hr to operate [under ] pursuant to that license for medical g e i k h r cannabis until comparable licenses for commercial cannabis i s h activity are available.

The division shall determine when , t, e u g retail sales of commercial cannabis products begin, but no e b l e e h later than April 1, 2022.

A facility of such a licensee, upon n d d i = = o h l ] b ,d issuance of the applicable cannabis establishment license, i a º e r i = r shall constitute licensed premises of the licensee and the tlicensee eshall wbe dentitled mto acontinued nand ouninterrupted doperations mof :the licensed premises.

bAs eto dactivity sunder ºthe omedical tcannabis nprogram, =the .227831.1AIClicensee Februaryshall 13,continue 2024to (1:48pm)operate sunder krules mpromulgated efor -the 21medical -cannabis eprogram auntil nthe edivision dpromulgates rrules efor lmedical ucannabis [activity, Aand da SJC/SBqualified 6patient, licenseeprimary caregiver or reciprocal participant shall not be entitledprohibited tofrom continuedpurchasing and uninterruptedobtaining operationscannabis ofproducts through the licensedmedical premises.cannabis SJC/SB 6 Page 15 program.

AsN. to activity under the medical cannabis program, the licensee shall continue to operate under rules promulgated for the medical cannabis program until the division promulgates rules for medical cannabis activity, [except that ] and a qualified patient, [a] primary caregiver [and a ] or reciprocal participant shall not be prohibited from purchasing and obtaining cannabis products [pursuant to ] through the medical cannabis program.

[L.] N.

(2) initially take reasonable measures to h g expeditiously incentivize increased production of cannabis o t hr plants to remedy a shortage of cannabis supply in the medical g e i k h r cannabis program;

i s h (3) after having first exhausted measures to , t, e u g increase production of cannabis plants to address the shortage e b l e e h of cannabis supply in the medical cannabis program, exclude n d d i = = o h l ] b ,d commercial cannabis activity from the scope of new licenses iissued to initial applicants for a ºvertically eintegrated rcannabis iestablishment, =cannabis rproducer, issuedintegrated tocannabis initialmicrobusiness, applicantscannabis forproducer amicrobusiness verticallyor integratedcannabis tmanufacturer elicense, wwhich dlimitation mshall be in force for a nperiod oof dat mleast :six months;

band e(4) drequire slicensees ºwho oare tlicensed nto =produce .227831.1AICcannabis Februaryto 13,produce 2024a (1:48pm)specified squota kof mmature ecannabis -plants 22to -be edesignated afor nuse ein dthe rmedical e l u [ A d SJC/SB 6 cannabisPage establishment,16 cannabis producer,program; 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 (4) require licensees who are licensed to produce cannabis to produce a specified quota of mature cannabis plants to be designated for use in the medical cannabis program;

[M.] O.

As used in this section, "shortage of cannabis supply in the medical cannabis program" means that the h u average number of cannabis plants in production in the medical » r t h cannabis program per qualified patient after [the effective g e l i date of the Cannabis Regulation Act] June 29, 2021 is h r i s h , substantially less than the average number of cannabis plants e h t u g in production in the medical cannabis program per qualified e b l e e , gh patient as of [the effective date of the Cannabis Regulation n d d i = = o h l ] b ,d Act] June 29, 2021, where:

i a º r e r = (1) the average number of cannabis plants in tproduction eafter wJune d29, m2021 is measured over a nperiod oof dthree mconsecutive :months;

band r(2) ethe taverage ºnumber oof tcannabis nplants =in .227831.1AIC February 13, 2024 (1:48pm) s k m e - 23 - e a n e d r e l u [ A d SJC/SB 6 production afteras [the effective date of the Cannabis Regulation Act] June 29, 2021 is measured over a period of three consecutive months;months immediately preceding June 29, 2021.

andP. (2) the average number of cannabis plants in production as of [the effective date of the Cannabis Regulation Act] June 29, 2021 is measured over a period of three consecutive months immediately preceding [the effective date of the Cannabis Regulation Act] June 29, 2021.

HJCº[N.A person who is a member of the New 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.

ASJC/SB person6 whoPage is17 aQ. member of the New 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.]»HJC HJCº HJCº N.»HJC HJCºP.»HJC A person who is a member of the New Mexico senate or the New Mexico house of representatives on the effective date of the Cannabis h u Regulation Act shall not apply for or be granted a license to » r t h engage in any commercial cannabis activity prior to July 1, g e l i h r 2026.»HJC i s h , HJCº P.»HJC HJCºQ.»HJC A medical cannabis legacy e h t u g nonprofit corporation that was required by the department of e b l e e , gh n d d i health to organize under the provisions of the Nonprofit = = o h l ] b ,d Corporation Act in order to qualify for a medical cannabis i a º r e r = license may be converted into a corporation under the Business t e w d m a n o d m :

bA rmedical ecannabis tlegacy ºnonprofit ocorporation tthat nwas =required .227831.1AICby Februarythe 13,department 2024of (1:48pm)health sto korganize munder ethe -provisions 24of -the eNonprofit Corporation Act in order to qualify for a nmedical ecannabis dlicense rmay ebe lconverted uinto [a Acorporation dunder SJC/SBthe 6Business Corporation Act, a limited liability company under the Limited Liability Company Act, a limited partnership under the Uniform Revised Limited Partnership Act or a partnership under the Uniform Partnership Act (1994) upon the nonprofit corporation's filing with the secretary of state of restated articles of incorporation, articles of organization, certificate of limited partnership or statement under Section 54-1A-105 NMSA 1978.

The conversion shall be approved pursuant to an agreement of conversion in the manner provided for the conversion of a limited liability company in Section 53-19-60.1 NMSA 1978." SECTION HJCº5.»HJC4. HJCº4.»HJC Section 26-2C-7 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 7) is amended to read:

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

[COMMERCIAL ] CANNABIS ACTIVITY LICENSING--LICENSING--APPLICATION-- APPLICATION--ISSUANCEISSUANCE AND DENIAL OF A LICENSE--SUSPENSION AND REVOCATION.-- hA. u [A.

AIn licensecarrying issuedout pursuantits tocommercial thecannabis Cannabisactivity »licensing rduties, tthe hdivision Regulationshall: Act shall not be subject to execution, attachment, a g e l i security transaction, liens or receivership.

h(1) rno ilater sthan hSeptember ,1, B.]2021, A.accept and begin processing license applications for cannabis SJC/SB 6 Page 18 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;

In carrying out its commercial cannabis e h t u g activity licensing duties, the division shall:

e b l e e , gh (1) no later than September 1, 2021, accept n d d i = = o h l ] b ,d and begin processing license applications for cannabis i a º r e r = producers, cannabis producer microbusinesses and any person t e w d m a n o d m :

b r e t º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 25 - e a n e d r e l u [ A d SJC/SB 6 properly licensed and in good standing as a licensed cannabis producer pursuant to the Lynn and Erin Compassionate Use Act;

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

n d d i = = o h l ] b ,d (a) for a cannabis producer, drip i a º e r i = r irrigation and water collection;

t(b) enatural wlighting dand menergy aefficiency nmeasures; o d m :

band e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 26 - e a n e d r e l u [ A d SJC/SB 6 (b)Page natural19 lighting(c) andrenewable energy efficiencygeneration. measures;

andB. (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.] B.

h g [D.] C.

The division shall deny an application for o t hr an initial license or renewal if [(1) ] the application does not g e i k h r include information required by the division or [(2) ] the i s h applicant does not meet the requirements of the Cannabis , t, e u g Regulation Act or rules promulgated in accordance with that e b l e e h act.

n d d i = = o h l ] b ,d D.

The division may refuse to issue, suspend or irevoke a ºlicense ein raccordance iwith =the rUniform revokeLicensing aAct licenseof HJCºinany person who does not meet the qualifications for licensure, who is not in compliance with the Cannabis Regulation Act or rules promulgated in accordance with that act or for whom one or more of the Uniformfollowing Licensingare tsubstantially erelated wto dthe mqualifications, afunctions nor oduties dof mthe :applicant's or licensee's business in New Mexico:

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 27 - e a n e d r e l u [ A d SJC/SB 6 Act»HJC of any person who does not meet the qualifications for licensure, who is not in compliance with the Cannabis Regulation Act or rules promulgated in accordance with that act or for whom one or more of the following are substantially related to the qualifications, functions or duties of the applicant's or licensee's business in New Mexico:

(2) a pending investigation or a felony indictment or conviction of the applicant or licensee or a controlling person of the applicant [has been convicted of an offense that is substantially related to the qualifications, functions or duties of the applicant's business provided that] or licensee in this state or another state or by the federal government involving fraud, deceit or embezzlement;

SJC/SB 6 Page 20 (3) a pending investigation or a felony h u indictment or conviction of the applicant or licensee or a » r t h controlling person of the applicant or licensee involving g e l i producing, manufacturing, distributing, selling or giving away h r i s h , illegal cannabis products;

e h t u g (4) the denial, suspension or revocation of a e b l e e , gh cannabis license in another state that would have the same n d d i = = o h l ] b ,d result if occurring in New Mexico;

i(5) a ºpending rinvestigation eor ra =felony (5)indictment or conviction for hiring, employing or otherwise using a pendingperson investigationyounger than eighteen years of age or a felonyperson tof eany wage dwho mis a nvictim oof dtrafficking, mforced :labor or other exploitation to produce, manufacture, transport or sell cannabis or a controlled substance;

b r e t º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 28 - e a n e d r e l u [ A d SJC/SB 6 indictment or conviction for hiring, employing or otherwise using a person younger than eighteen years of age or a person of any age who is a victim of trafficking, forced labor or other exploitation to produce, manufacture, transport or sell cannabis or a controlled substance;

SJC/SB 6 Page 21 E.

Production, manufacture, distribution, sale or h u possession of illegal cannabis product is grounds for denial, » r t h suspension or revocation of a license or for taking any other g e l i disciplinary action allowed by law or rule of the division.

h r i s h , F.

If the division determines after a review of e h t u g pertinent circumstances provided in Subsection D of this e b l e e , gh section that the applicant, licensee or controlling person [is] n d d i = = o h l ] b ,d otherwise [qualified ] meets the qualifications for [alicensure license]and ithat issuing a ºlicense rdoes enot rcompromise =the licensurestate's andcannabis thatprogram issuingor athe licensepublic [tohealth theor applicantsafety, would]the tdivision eshall wissue dthe mlicense aor nclose othe dsuspension mor :revocation case.

bG. r e t º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 29 - e a n e d r e l u [ A d SJC/SB 6 does not compromise the state's cannabis program or the public health or 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] issue the license or close the suspension or revocation case.

[E.A conviction for which the related sentence, including any term of probation or parole, has been completed for the production, possession, use, manufacture, distribution or sale or the possession with the intent to manufacture, distribute or sell 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.

ForThe purposesprovisions of Subsectionthe DUniform ofLicensing thisAct section,and the followingCriminal areOffender consideredEmployment substantiallyAct relatedshall togovern theconsideration qualifications,of functionscriminal orrecords dutiesrequired ofor apermitted personby seekingthe aCannabis license:Regulation Act.

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

(2)The adivision felonyshall convictiondeny foran hiring,application employingif an applicant, a controlling person or otherwisethe usingpremises for which a personSJC/SB younger6 thanPage eighteen22 yearslicense ofis agesought hdoes gnot to:qualify for licensure pursuant to the Cannabis Regulation Act.

oI. t hr (a) prepare for sale, transport or carry g e i k h r a controlled substance;

The division shall not license a person who has had a license that was issued pursuant to the Cannabis Regulation Act or ithe sLynn hand (b)Erin sell,Compassionate giveUse awayAct revoked by the division or offerthe todepartment sellof ahealth ,in t,the ethree uyears gimmediately controlledpreceding substancethe todate anyon person;which the person filed a new application.

andJ. e b l e e h (3) any other offense as determined by the n d d i = = o h l ] b ,d division.

iUnless otherwise provided in the Cannabis Regulation Act, a ºperson ewhose rlicense ihas =been rrevoked F.]may G.reapply for a license after a period of three years.

AThe convictiondivision formay whichconsider all of the relatedcircumstances sentence,resulting tin ethe wrevocation din mdetermining awhether nto oissue da mnew :license." SECTION 5.

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 30 - e a n e d r e l u [ A d SJC/SB 6 including any term of probation or parole, [is ] has been completed for the production, possession, use, manufacture, distribution or [dispensing ] sale or the possession with the intent to manufacture, distribute or [dispense ] sell 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 Uniform Licensing Act and the Criminal Offender Employment Act shall govern consideration of criminal records required or permitted by the Cannabis Regulation Act.

[G.] H.

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.] I.

The division shall not license a person who h g has had a license that was issued pursuant to the Cannabis o t hr Regulation Act or the Lynn and Erin Compassionate Use Act g e i k h r revoked by the division or the department of health in the i s h three years immediately preceding the date on which the person , t, e u g filed a new application.

e b l e e h [I.] J.

Unless otherwise provided in the Cannabis n d d i = = o h l ] b ,d Regulation Act, a person whose license has been revoked may i a º e r i = r reapply for a license after a period of three years.

The t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 31 - e a n e d r e l u [ A d SJC/SB 6 division may consider all of the circumstances resulting in the revocation in determining whether to issue a new license.

[J.

The division shall adopt rules providing for submission of an applicant's fingerprints to the federal bureau of investigation to conduct a national criminal history background check and to the department of public safety to conduct a state criminal history check for the following licensees:

(1) cannabis manufacturer;

(2) cannabis producer;

(3) cannabis producer microbusiness;

(4) cannabis research laboratory;

(5) cannabis retailer;

(6) cannabis testing laboratory;

(7) integrated cannabis microbusiness;

and (8) vertically integrated cannabis h g establishment.

o t hr K.

The division shall conduct national criminal g e i k h r history background checks and state criminal history checks on i s h the following:

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

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

t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 32 - e a n e d r e l u [ A d SJC/SB 6 (3) if the applicant is a corporation, each director and officer of the corporation;

and (4) any controlling person of the applicant.

L.

Arrest record information received from 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 directly involved in the decision affecting the applicant.

M.

Electronic live fingerprint scans may be used when conducting criminal history background checks.]" Sfl2ºSECTION 6.

"[NEW"CRIMINAL MATERIAL]HISTORY DRIVE-UPBACKGROUND WINDOWSCHECKS--PROCESSES PROHIBITED.--NoAND cannabisPROCEDURES.-- retailA. establishment shall sell any cannabis product from a drive-up window."»Sfl2 h g SECTION Sfl2º 7.»Sfl2 HJCºSfl2º6.»Sfl2»HJC HJCº5.»HJC o t hr A new section of the Cannabis Regulation Act is enacted to g e i k h r read:

i s h "[NEW MATERIAL ] CRIMINAL HISTORY BACKGROUND CHECKS-- , t, e u g PROCESSES AND PROCEDURES.-- e b l e e h n d d i A.

= = o h l ] b ,d (1) "director" means a person who serves on i a º e r i = r the corporate board of directors of a corporation licensed by tthe edivision was d m a ncannabis oestablishment; d m :

b(2) e"member dand smanager" ºincludes othose tpersons nwho =are .227831.1AICmembers Februaryin 13,or 2024managers (1:48pm)of sa klimited mliability ecompany -licensed 33by -the edivision as a ncannabis eestablishment dSJC/SB r6 ePage l23 uand [who Aare dresponsible SJC/SBfor 6 the divisionoperations asof athe cannabislimited establishment;liability company;

(2)(3) "member"officer" andmeans manager"a includespresident, thoseone personsor whomore arevice memberspresidents, ina orsecretary, managersa oftreasurer or a limitedsecretary-treasurer liabilityor companya licensedmember byof the divisionexecutive ascommittee, aif cannabisdifferent establishmentfrom andthese whonamed areofficers, responsibleof fora thecorporation operationslicensed ofby the limiteddivision liabilityas company;a cannabis establishment;

(3)and "officer"(4) "partner" means a president,person onewho oris more vice presidents, a secretary,co- aowner treasurer or a secretary- treasurer or a member of the executive committee, if different from these named officers, of a corporationbusiness licensed by the division as a cannabis establishment;establishment.

and (4) "partner" means a person who is a co-owner of a business licensed by the division as a cannabis establishment.

The division shall adopt rules providing the procedures to be followed for submission of an applicant's h g biometric HJCºdata scan»HJC HJCºdata»HJC to the department of o t hr public safety to conduct a state criminal history background g e i k h r check and for its submission of the biometric HJCºscan»HJCdata i s h HJCºdata»HJC to the federal bureau of investigation to conduct , t, e u g a national criminal history background check for the following e b l e e h n d d i cannabis establishments:

= = o h l ] b ,d (1) cannabis courier;

i a º e r i = r (2) cannabis manufacturer;

t(3) ecannabis wproducer; d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 34 - e a n e d r e l u [ A d SJC/SB 6 (3) cannabis producer;

SJC/SB 6 Page 24 (9) vertically integrated cannabis establishment;

h g (3) if the applicant for licensure is a o t hr limited liability company, each member and manager of the g e i k h r limited liability company;

i s h (4) if the applicant for licensure is a , t, e u g corporation, each director and officer of the corporation;

and e b l e e h (5) any controlling person of the applicant n d d i = = o h l ] b ,d for licensure, as defined in Section 26-2C-2 NMSA 1978.

i a º e r i = r D.

The division shall use the information from the t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 35 - e a n e d r e l u [ A d SJC/SB 6 criminal history background check to evaluate the applicant's qualifications for licensure.

E.

Arrest record information received from 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 directly involved in the decision affecting the applicant." HJCº SECTION Sfl2º8.»Sfl2 Sfl2º7.»Sfl2 Section 26-2C-9 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 9) is amended to read:

"26-2C-9.

APPLICATION AND LICENSING FEES.-- A.

Every application for the issuance or renewal of the following licenses shall be accompanied by a license fee [in the following specified amounts] as follows:

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

i s h (2) a cannabis testing laboratory license, up , t, e u g e b l to two thousand five hundred dollars ($2,500) per year and an e e h n d d i additional fee of up to one thousand dollars ($1,000) per year = = o h l ] b ,d for each additional licensed premises of the licensee;

i a º e r i = r (3) a cannabis manufacturer license, two t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 36 - e a n e d r e l u [ A d SJC/SB 6 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;

(4) a cannabis producer 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;

(5) a cannabis retailer 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;

(6) a cannabis research laboratory 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;

(7) a vertically integrated cannabis h u establishment license, seven thousand five hundred dollars » r t h ($7,500) per year and an additional fee of one thousand dollars g e l i h r ($1,000) per year for each licensed premises of the licensee;

i s h , (8) a cannabis producer microbusiness license, e h t u g e b l up to one thousand dollars ($1,000) per year;

e e , gh n d d i (9) an integrated cannabis microbusiness = = o h l ] b ,d license, up to two thousand five hundred dollars ($2,500) per i a º r e r = t e w d year and an additional fee of five hundred dollars ($500) per m a n o d m :

b r e t º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 37 - e a n e d r e l u [ A d SJC/SB 6 year for each licensed premises of the licensee;

and (10) a cannabis consumption area license, up to two thousand five hundred dollars ($2,500) per year.

B.

Except for cannabis producer microbusinesses and integrated cannabis microbusinesses, a licensee cultivating cannabis plants shall be assessed an additional annual fee no greater than fifty dollars ($50.00) per mature cannabis plant at the time of licensing or renewal.

C.

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.

Fees may be prorated for the remainder of the licensing year.

[TheThe initialdivision applicationshall feeuse and the annualinformation renewalfrom feethe forcriminal ahistory verticallybackground integratedcheck cannabisto establishmentevaluate license shall not exceed one hundred twenty-five thousand dollars ($125,000) for a license for both medical cannabis h u activity and commercial cannabis activity.] The initial » r t h application fee and the annualapplicant's renewalqualifications fee for alicensure. license or g e l i h r renewal of a license that authorizes only medical cannabis i s h , activity shall be one-half the fee applicable to a license e h t u g e b l authorizing both medical cannabis activity and commercial e e , gh n d d i cannabis activity.

= = o h l ] b ,d E.

IfArrest arecord cannabisinformation producerreceived microbusinessfrom orthe anfederal ibureau aof ºinvestigation rand ethe rdepartment =of tpublic esafety wshall dbe integratedconfidential, cannabisshall microbusinessnot entersbe intoconsidered a businesspublic mrecord apursuant nto othe dPublic mRecords :Act and shall SJC/SB 6 Page 25 not be disclosed to persons not directly involved in the decision affecting the applicant." SECTION 6.

bSection r26-2C-10 eNMSA t1978 º(being oLaws t2021 n(1st =S.S.), .227831.1AICChapter February4, 13,Section 202410) (1:48pm)is srepealed kand m e - 38 - e a nnew eSection d26-2C-10 rNMSA e1978 lis uenacted [to Aread: d SJC/SB 6 arrangement with another licensee with the purpose of or having the effect of evading the limitations of the licensee's license, [such] that 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.

F."26-2C-10.

TheCANNABIS divisionTRAINING shallAND collectEDUCATION allPROGRAMS-- renewalREGISTRATION fees,WITH includingDIVISION.--A theNew renewalMexico feespublic forpost- allsecondary licensededucational premises,institution atmay theoffer timea ofpractical renewalor ofacademic acurriculum license.designed to prepare students for participation in the cannabis industry.

G.The institution shall register its cannabis training and education program with the division, which shall include the information about the program on its website." SECTION 7.

TheSection fee26-2C-17 forNMSA the1978 issuance(being ofLaws a2021 cannabis(1st serverS.S.), permitChapter shall4, notSection exceed17) thirty-fiveis dollarsamended ($35.00).to read:

H.

The division shall deposit all fees collected pursuant to the Cannabis Regulation Act in the cannabis regulation fund."»HJC SECTION Sfl2º 9.»Sfl2 HJCºSfl2º8.»Sfl2»HJC HJCº6.»HJC Section 26-2C-10 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter h u 4, Section 10) is repealed and a new Section 26-2C-10 NMSA 1978 » r t h is enacted to read:

g e l i h r "26-2C-10.

[NEW MATERIAL ] CANNABIS TRAINING AND i s h , EDUCATION PROGRAMS--REGISTRATION WITH DIVISION.--A New Mexico e h t u g public post-secondary educational institution may offer a e b l e e , gh n d d i practical or academic curriculum designed to prepare students = = o h l ] b ,d for participation in the cannabis industry.

The institution i a º r e r = shall register its cannabis training and education program with t e w d m a n o d m :

b r e t º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 39 - e a n e d r e l u [ A d SJC/SB 6 the division, which shall include the information about the program on its website." SECTION Sfl2º 10.»Sfl2 HJCºSfl2º9.»Sfl2»HJC HJCº7.»HJC Section 26-2C-17 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 17) is amended to read:

(1) packages shall be resealable and child-SJC/SB resistant6 [compostablePage and26 recyclablechild-resistant; or made from recycled h g materials];

o t hr (2) packages and labels shall not be designed g e i k h r to be appealing to a child and shall not mimic the brand, i s h design, name, logo or colorway of a non-cannabis consumer , t, e u g product marketed to children;

e b l e e h (3) packages and labels shall not use cartoons n d d i = = o h l ] b ,d or symbols or images, including images of celebrities or i a º e r i = r celebrity likenesses, that are commonly used to market to tchildren; e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 40 - e a n e d r e l u [ A d SJC/SB 6 children;

and [(3)] (5) labels shall include:

(e) for cannabis products containing h g non-cannabis ingredients, a list of all ingredients and a oSJC/SB t6 hrPage 27 disclosure of nutritional information for the product or g e i k h r cannabis extract disclosed in the same manner required under i s h federal law for nutritional labeling for food for human , t, e u g consumption;

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

i(g) a ºlogo edesigned rby ithe =division rthat (g)is adistinctive logoin designeddesign, bycolor, thesize divisionand thatlocation tsuch ethat wthe dlogo mnotifies a nreasonable operson dthat mthe :package contains cannabis;

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 41 - e a n e d r e l u [ A d SJC/SB 6 is distinctive in design, color, size and location such that the logo notifies a reasonable person that the package contains cannabis;

and (j) other information as required by rules promulgated [pursuant to ] in accordance with the Cannabis Regulation Act." SECTION Sfl2º8. 11.»Sfl2 HJCºSfl2º10.»Sfl2»HJC HJCº8.»HJC Section 26-2C-18 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 18) is amended to read:

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

TESTING CANNABIS PRODUCTS--HEALTH AND SAFETY OF EMPLOYEES AND CONSUMERSCONSUMERS.-- .-- A.

A cannabis testing laboratory's testing of h g cannabis products shall comply with the requirements set forth o t hr in applicable law and rules.

g e i k h r B.

In consultation with the department of iSJC/SB s6 hPage 28 environment and consistent with industry standards, the , t, e u g division shall promulgate rules to:

e b l e e h (1) [ensure that testing of cannabis products n d d i = = o h l ] b ,d occurs] require all cannabis producers and cannabis i a º e r i = r manufacturers to have their cannabis products tested prior to tdistribution eto wcannabis dretailers mor afor nsales oby dintegrated mcannabis :microbusinesses;

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 42 - e a n e d r e l u [ A d SJC/SB 6 distribution to cannabis retailers or for sales by integrated cannabis microbusinesses;

(3) specify which persons bear the cost of testing commercial or medical cannabis productsproducts; [and medical cannabis];

(5) establish chain of custody protocols for the transportation of testing [sample transportation] samples;

(7) specify protocols for testing sample collection that ensure accurate test results, including requiring that testing samples be collected by laboratory staff h g trained in the collection of testing [sample collection] o t hr samples;

and g e i k h r (8) require destruction of a tested batch of i s h cannabis products if the testing samples from the tested batch , t, e u g indicate noncompliance with applicable health and safety e b l e e h standards promulgated by the division, unless remedial measures n d d i = = o h l ] b ,d can bring the cannabis products into compliance with theSJC/SB i6 aPage º29 ethe r i = r standards or the cannabis products can be used for research tpurposes. e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 43 - e a n e d r e l u [ A d SJC/SB 6 purposes.

Beginning no later than April 1, 2022, the division shall identify, in consultation with the department of environment, a set of updated certified reference materials HJCºforthat which»HJC HJCºthat»HJC laboratory testing [to] shall be measured against.

The division shall work cooperatively with the department of environment to implement inspection of cannabis establishments to ensure the health and safety of employees in accordance with the Occupational Health and Safety Act, [and ] to determine compliance with rules promulgated by the environmental improvement board and to protect the health and safety of consumers." SECTION Sfl2º12.»Sfl29. HJCºSfl2º11.»Sfl2»HJC HJCº9.»HJC Section 26-2C-20 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 20) is amended to read:

hSection g26-2C-20 "26-2C-20.NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 20) is amended to read:

ADVERTISING"26-2C-20. AND MARKETING RESTRICTIONS.-- o t hr A.

AsADVERTISING usedAND inMARKETING thisRESTRICTIONS.-- section,A. "advertising" does not g e i k h r mean:

iAs sused hin (1)this asection, sign"advertising" ordoes outdoornot displaymean: or other , t, e u g statement permanently affixed to a licensed premises that is e b l e e h n d d i intended to induce the sale of a cannabis product produced, = = o h l ] b ,d manufactured or sold on the licensed premises;

i(1) a ºsign eor routdoor idisplay =or rother (2)statement apermanently label affixed to a cannabislicensed productpremises orthat tis eintended wto dinduce mthe sale of a ncannabis oproduct dproduced, mmanufactured :or sold on the licensed premises;

b(2) ea dlabel saffixed ºto o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 44 - e a ncannabis eproduct dor r e l u [ A d SJC/SB 6 the covering, wrapper or container of a cannabis product;

or SJC/SB 6 Page 30 (3) an editorial or other material printed in a publication when the publication of the editorial or material was not paid for by a licensee and was not intended to promote the sale of cannabis products by a particular brand or company.

[A.] (1) prohibit the advertisement and marketing of cannabis products:

[(1)] (a) on radio, television or other broadcast media, internet pop-ups and mass transit vehicles;

provided that the division shall not prohibit advertising and marketing toto: [(a) ]:

or [(b) ] 2) persons twenty-one years of age or older who have solicited the advertising or marketing;

h g [(2)] (b) that are false, deceptive or o t hr misleading, including making unproven health benefit claims;

g e i k h r [(3)] (c) that are on billboards, i s h posters, handbills or other visual media that are located or , t, e u g can be viewed within three hundred feet of a school, daycare e b l e e h center or church;

n d d i = = o h l ] b ,d [(4)] (d) that depict consumption by i a º e r i = r children or other persons who appear to be younger than twenty-twenty-one tyears eof wage; d m a n o d m :

bSJC/SB e6 dPage s31 º(e) othat tuse npredatory =marketing .227831.1AICand Februaryadvertising 13,practices 2024targeting (1:48pm)minors; s k m e - 45 - e a n e d r e l u [ A d SJC/SB 6 one years of age;

[(5)]or (e)(f) that useare predatorydesigned marketingusing andcartoon advertisingcharacters practicesor targetingto minors;mimic any other product brand;

orand [(6)](2) (f)require: that are designed using cartoon characters or to mimic any other product brand;

(a) all advertisements and [B.]marketing (2)to require:accurately and legibly identify all persons responsible for its content;

[(1)]and (a)(b) all advertisements in print and marketingdigital communications to accuratelybe andplaced legiblyonly identifywhere allthe personsaudience responsibleis forreasonably itsexpected content;to be twenty-one years of age or older as determined by reliable, current audience composition data." SECTION 10.

and [(2)] (b) advertisements in print and digital communications to be placed only where the audience is reasonably expected to be twenty-one years of age or older as determined by reliable, current audience composition data." SECTION Sfl2º 13.»Sfl2 HJCºSfl2º12.»Sfl2»HJC HJCº 10.»HJC Section 26-2C-28 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 28) is amended to read:

h g "26-2C-28.

[UNLICENSED SALES OF ] TRAFFICKING CANNABIS oPRODUCTS--PENALTIES.-- t hr PRODUCTS --PENALTIES.-- g e i k h r A.

As used in this section, ["traffic" means the i s h (1) distribution, sale, barter or giving away of] "trafficking , t, e u g cannabis products" means to:

e b l e e h n d d i (1) produce, manufacture, distribute, courier = = o h l ] b ,d or sell illegal cannabis products;

or i a º e r i = r (2) [possession ] possess with intent to tmanufacture, edistribute, wcourier dor msell aillegal ncannabis oproducts. d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 46 - e a n e d r e l u [ A d SJC/SB 6 manufacture , distribute, courier or sell [barter or give away] illegal cannabis products.

Trafficking cannabis products applies only to quantities of more than fifteen ounces of cannabis flower, one hundred twenty grams of HJCºconcentrate»HJCcannabis HJCºcannabisextract extract»HJC or six grams of SJC/SB 6 Page 32 edibles.

[B.] C.

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

[C.] D.

In addition to the penalties provided in the Delinquency Act, a person under eighteen years of age who violates Subsection [B ] C of this section shall be subject to:

(1) attendance at a four-hour evidence-basedevidence- based drug education and legal rights program at no cost to the person;

or h g (2) four hours of community service.

o t hr [D.] E.

Except as otherwise provided in Section [14 g e i k h r of the Cannabis Regulation Act] 26-2C-14 NMSA 1978, a person i s h between eighteen and twenty-one years of age [or older] who , t, e u g violates Subsection [B ] C of this section is guilty of a e b l e e h n d d i misdemeanor and shall be sentenced pursuant to the provisions = = o h l ] b ,d of Section 31-19-1 NMSA 1978.

iF. a º e r i = r [E.

A person eighteen years of age or older who t e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 47 - e a n e d r e l u [ A d SJC/SB 6 violates Subsection B of this section and who conducts unlicensed cannabis product sales from a building, room or other area open to the public in a manner that would lead a reasonable person to believe that the area is a cannabis establishment licensed pursuant to the Cannabis Regulation Act is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.] F.

The provisions of the Forfeiture Act apply to the seizure, forfeiture and disposal of such property." SECTIONSJC/SB Sfl2º14.»Sfl26 HJCºSfl2º13.»Sfl2»HJCPage h33 gSECTION HJCº11.»HJC11. A new section of the Cannabis Regulation Act is o t hr enacted to read:

gA enew isection kof hthe rCannabis "[NEWRegulation MATERIALAct ] WHEN CANNABIS PRODUCT DEEMED i s h ADULTERATED.--A cannabis product is deemedenacted to beread: adulterated , t, e u g if:

e"WHEN bCANNABIS lPRODUCT eDEEMED eADULTERATED.--A hcannabis nproduct dis ddeemed ito A.be adulterated if:

itA. bears or contains mold, mildew or other = = o h l ] b ,d deleterious or poisonous substance that may render it injurious i a º e r i = r to health;

tit ebears wor dcontains mmold, amildew nor oother ddeleterious mor :poisonous substance that may render it injurious to health;

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 48 - e a n e d r e l u [ A d SJC/SB 6 B.

a substance has been substituted in whole or in part that is contrary to the ingredient list on the package unless a notification of substitution is adhered to the h g packaging;

o t hr G.

damage or inferiority has been concealed in anySJC/SB g6 ePage i34 kany h r manner;

i s h H.

a substance has been added so as to increase the , t, e u g cannabis product's bulk or weight, reduce its quality or e b l e e h strength or make it appear better or of greater value than it n d d i = = o h l ] b ,d is;

or i a º e r i = r I.

the cannabis product is a confectionery, it tcontains ealcohol wor dother mnon-nutritive aarticle nor osubstance dexcept mharmless :coloring, flavoring, natural gum, pectin or resinous glaze not in excess of four-tenths of one percent;

bprovided ethat d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 49 - e a nconfectionary emay dinclude rless ethan ltwo uand [one-fourth Apercent dby SJC/SBweight 6of contains alcohol orderived othersolely non-nutritivefrom articlethe oruse substanceof exceptflavoring harmlessextracts coloring,or flavoring,to naturalany gum,chewing pectingum orby resinousreason glazeof notits incontaining excessharmless ofnon-nutritive four-tenthsmasticatory ofsubstances." oneSECTION percent;12.

provided that a confectionary may include less than two and one-fourth percent by weight of alcohol derived solely from the use of flavoring extracts or to any chewing gum by reason of its containing harmless non-nutritive masticatory substances." SECTION Sfl2º 15.»Sfl2 HJCºSfl2º14.»Sfl2»HJC HJCº12.»HJC A new section of the Cannabis Regulation Act is enacted to read:

"[NEW"WHEN MATERIAL ] WHEN CANNABIS DEEMED MISBRANDED.--MISBRANDED.--Cannabis Cannabis is deemed to be misbranded if:

h g C.

it is an imitation of another cannabis product, o t hr unless its label bears, in type of uniform size and prominence, g e i k h r the word "imitation" and, immediately following, theSJC/SB name6 ofPage i35 sthe hname of the cannabis product imitated;

, t, e u g D.

its container is so made, formed or filled as to e b l e e h n d d i be misleading;

or = = o h l ] b ,d E.

the label otherwise does not conform to the i a º e r i = r requirements of Section 26-2C-17 NMSA 1978 and labeling rules tpromulgated eby wthe ddivision." mSECTION a13. n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 50 - e a n e d r e l u [ A d SJC/SB 6 promulgated by the division." SECTION Sfl2º 16.»Sfl2 HJCºSfl2º15.»Sfl2»HJC HJCº13.»HJC Section 26-2C-36 NMSA 1978 (being Laws 2021 (1st S.S.), Chapter 4, Section 36) is amended to read:

PUBLIC RECORDS AND OPEN MEETINGS.--MEETINGS.--Records HJCºExcept for information developed or obtained by the division during an enforcement investigation HJCºSfl1ºor inspection relating to violations of the Cannabis Regulation Act, which investigation or inspection is pending»Sfl1»HJC , records of the division are subject to the Inspection of Public Records Act.»HJC HJCºRecords of the division are public records subject to the Inspection of Public Records Act, except as provided in this section and other applicable provisions of law;

provided that the presence of nonpublic information that identifies confidential sources or confidential information may be redacted from a written record or digitally obscured in a h u visual or audio record.

A source who communicates information » r t h is confidential if the identity of the source is disclosed in g e l i h r the context of reporting an alleged violation of the Cannabis i s h , Regulation Act to the division.

Information is confidential if e h t u g it is developed or obtained by the division during an e b l e e , gh n d d i enforcement investigation or inspection related to violations = = o h l ] b ,d of the Cannabis Regulation Act.

Sources and information cease i a º r e r = to be confidential upon the issuance of a notice of tcontemplated eaction wby dthe mdivision. a n o d m :

bIf ra enotice tof ºcontemplated oaction tis nnot =issued .227831.1AICwithin Februarythirty 13,days 2024of (1:48pm)SJC/SB s6 kPage m36 ethe -disclosure 51of -the eidentity aof nthe esource din rthe econtext lof ureporting [an Aalleged dviolation SJC/SBof 6the contemplatedCannabis actionRegulation byAct to the division.division, the source shall not be confidential.

If a notice of contemplated action is not issued within thirty days of the disclosureinitiation of thean identityenforcement ofinvestigation theor sourceinspection inrelated theto contextviolations of reportingthe anCannabis allegedRegulation violationAct, of the Cannabisinformation Regulationdeveloped Actor toobtained by the division,division during the sourceenforcement investigation or inspection shall not be confidential.

If a notice of contemplated action is not issued within thirty days of the initiation of an enforcement investigation or inspection related to violations of the Cannabis Regulation Act, the information developed or obtained by the division during the enforcement investigation or inspection shall not be confidential.»HJC Rulemaking and other hearings of the division are subject to the Open Meetings Act." SECTION Sfl2º17.»Sfl214. HJCºSfl2º16.»Sfl2»HJC HJCº14.»HJC Section 30-22-14 NMSA 1978 (being Laws 1976, Chapter 15, Section 1, as amended) is amended to read:

Section 30-22-14 NMSA 1978 (being Laws 1976, Chapter 15, Section 1, as amended) is amended to read:

BRINGING CONTRABAND INTO PLACES OF h g IMPRISONMENT--PENALTIES--DEFINITIONS.-- o t hr g e A.

Bringing contraband into a prison consists of i k h r knowingly and voluntarily carrying, transporting or depositing i s h contraband onto the grounds of the penitentiary of New Mexico , t, e u g e b l or any other institution designated by the corrections e e h n d d i department for the confinement of adult prisoners.

Whoever = = o h l ] b ,d commits bringing contraband into a prison is guilty of a third i a º e r i = r degree felony.

tB. e w d m a n o d m :

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 52 - e a n e d r e l u [ A d SJC/SB 6 B.

Whoever commits bringing contraband into a jail is guilty of a fourth degree SJC/SB 6 Page 37 felony.

h g (3) an alcoholic beverage;

o t hr (4) a controlled substance, as defined in the g e i k h r Controlled Substances Act, or cannabis, as defined in the i s h Cannabis Regulation Act, but does not include a controlled , t, e u g substance or medical cannabis carried into a prison through e b l e e h regular prison channels and pursuant to the direction or n d d i = = o h l ] b ,d prescription of a [regularly ] licensed physician;

or i(5) aan ºelectronic ecommunication ror irecording =device rbrought (5)onto anthe electronicgrounds communicationof orthe recordinginstitution tfor ethe wpurpose dof mtransfer ato nor ouse dby ma :prisoner.

b e d s º o t n = .227831.1AIC February 13, 2024 (1:48pm) s k m e - 53 - e a n e d r e l u [ A d SJC/SB 6 device brought onto the grounds of the institution for the purpose of transfer to or use by a prisoner.

As used in this section, "electronic communication or recording device" means any type of SJC/SB 6 Page 38 instrument, device, machine or equipment that is designed to transmit or receive telephonic, electronic, digital, cellular, satellite or radio signals or communications or that is designed to have sound or image recording abilities or any part or component of such instrument, device, machine or equipment.

Nothing in this section shall prohibit the use of hearing aids, voice amplifiers or other equipment necessary to aid prisoners who have documented hearing or speech h u deficiencies or their visitors.

Rules for such devices shall » r t h be established by the warden or director of each jail, g e l i detention center and prison." h r i s h , HJCº SECTION HJCº16.»HJC15. HJCº15.»HJC Section 30-22-14.1 e h t u g NMSA 1978 (being Laws 1997, Chapter 44, Section 1) is amended e b l e e , gh to read: