SB 765 — Marijuana Legalization and Regulation.

(e) Neither the Chief Executive Officer nor the spouse or any member of the immediate family of the Chief Executive Officer shall make any contribution to a candidate for office or officeholderat thelocal orStatelevel orcausesuchacontribution tobemadeontobemadeonhisorherbehalf. hisorherbehalf.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 13 General Assembly Of North Carolina Session 2021 "§ 18D-206.

Background investigations ofBoardof Board members and theChiefExecutiveOfficer.theChief ExecutiveOfficer.

No person shall be appointed to the Board or appointed by the Board who (i) has defraudedorattemptedto defraud anyfederal, state,orlocalgovernmentorgovernmentalagencystate,orlocal governmentor governmentalagency or authority by making or filing any report, document, or tax return required by statute or regulation that is fraudulent or contains a false representation of a material fact;

(b) Notwithstanding anyanyother other provision of law, in exercising anyanypower power conferred under this Chapter, the Commission may implement and maintain independent payroll and nonpayroll disbursement systems.

Upon agreement with the Office of State Budget and Management, the Commission maymayreport reportsummarylevel summary level detail on both payroll andnonpayrolltransactionstotheOfficeofStateBudgetandManagementthroughtheapplicableandnonpayrolltransactionstotheOfficeofStateBudget andManagementthroughthe applicable financial management system.

A nonpayroll disbursement system shall include all disbursements and expenditures, other than Page 14 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 payroll.

(a) Except as otherwise provided in this subsection, all funds collected bybythe the Board shall be paid directly and promptly into the General Fund.

(b) The net profits derived under the provisions of this Chapter shall be transferred bybythe the to the General Fund quarterly, within 50 days after the close of each quarter or as otherwise provided in the Current Operations Appropriations Act.

The Commission shall provideanyprovideanyrecords records and assistancenecessarytodeterminethelocalityassistancenecessarytodeterminethelocalitytowhichtaxrevenues to which taxrevenues are attributable.

On a quarterly basis, moneys in the Fund shall be paid to each locality entitled to the return of its tax revenues, and such payments shall be charged to the account of each such localitylocalityunder under the special fund created bybythis this subsection.

If errors are made in anyanysuch such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers, or to some otherfact,theerrorsshall becorrectedandadjustmentsmadeinthepaymentsforthenextquarter.

The exercise of the powers granted by this Chapter shall be in all respects for the benefit of the people of the State, for the increase of their commerce and prosperity, and for the improvement of their living conditions, and as the undertaking of activities in the furtherance of DRS45498-MLxf-140Senate Bill 765-First Edition Page 15 General Assembly Of North Carolina Session 2021 thepurposes oftheCommission constitutestheperformanceofconstitutes theperformanceof essential governmental functions, the Commission shall not be required to pay any State or local taxes or assessments upon any property acquired or used by the Commission under the provisions of this Chapter or upon the income therefrom, including sales and use taxes on the tangible personal property used in the operations of the Commission.

(1) The number of State licenses of each categorycategoryissued issued pursuant to this Chapter.

Page 16 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (4) A statement of revenues and expenses related to the implementation, administration, and enforcement of this Chapter.

(b) Nothing contained in this section shall prohibit the use or release of such information ordocumentsbytheBoardtoanygovernmentalorlaw-enforcementagency,orwhenconsidering the granting, denial, revocation, or suspension of a license or permit, or the assessment of any penalty against a licensee or permittee, nor shall this section prohibit the Board or its employees from compiling and disseminating to any member of the public aggregate statistical information pertaining to (i) tax collection, as long as such information does not reveal or disclose tax collection from anyanyidentified identified licensee;

(ii)thetotal amount ofretail marijuanaorretail marijuana products salesin theState bybymarijuanawholesaler marijuanawholesaler licensees collectively;

or (iii)thetotal amount of purchases or sales submitted bybylicensees, licensees, provided that such information does not identifyidentifythe the licensee.

The Board shall develop and adopt policies and procedures that afford its employees grievance rights, ensure that employment decisions shall be based upon the merit and fitness of applicants, and prohibit discrimination because of race, color, religion, national origin, sex, pregnancy, childbirth or DRS45498-MLxf-140Senate Bill 765-First Edition Page 17 General Assembly Of North Carolina Session 2021 related medical conditions, age, marital status, sexual orientation, gender identity, or disability.

Any licensee or applicant for any license granted by the Board shall have the right to be representedbyrepresentedbycounsel counsel at anyanyBoardhearingforwhichhe Boardhearingforwhichhe orshehas received notice.Thelicensee or applicant shall not be required to be represented by counsel during such hearing.

Page 18 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (d) Except as provided in this section, all local acts, including charter provisions and ordinances of counties, cities, and towns, inconsistent with any of the provisions of this Chapter, are repealed to the extent of such inconsistency.

(a) The Cannabis Public Health Advisory Council (the Advisory Council) is established as an advisorycouncil to theBoard.Thepurposeof theAdvisoryCouncil is toassessandmonitorto assess and monitor public health issues, trends, and impacts related to marijuana and marijuana legalization and makerecommendations regardinghealthwarnings,retailmarijuanaandretailmarijuanaproductsregardinghealthwarnings,retailmarijuanaand safetyretailmarijuanaproducts andsafetyand product composition, and public health awareness, programming, and related resource needs.

(b) The AdvisoryAdvisoryCouncil Council shall have a total membership of 21 members that shall consist of 17 nonlegislative citizen members and seven ex officio members.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 19 General Assembly Of North Carolina Session 2021 (1) To review multi-agency efforts to support collaboration and a unified approach on public health responses related to marijuana and marijuana legalization in the State and to develop recommendations as necessary.

The chairman shall submit to the Governor and the General Assembly an annual executive summary of the interim activity and work oftheAdvisoryCouncil nolaterthanthefirst daydayofeachregularsession ofeachregularsession of the General Assembly.

To whomwhomprivileges privileges conferred by licenses extend;

liabilityliabilityfor for violations of law.

The privilege of anyanylicensee licensee to cultivate, manufacture, transport, sell, or test retail marijuana or retail marijuana products shall extend to such licensee and to all agents or employees of such licensee for the purpose of operating under such license.

The licensee may be held liable for any violation of this Chapter or anyanyBoard Board rule committed bybysuch such agents or employees in connection with their employment.

(d) The privileges conferred by any license granted by the Board shall continue until the last day of the twelfth month next ensuing or the last day of the designated month and year of expiration, except the license maymaybe be sooner terminated for any cause for which the Board would be entitled to refuse to grant a license or by operation of law, voluntary surrender, or order of the Board.

The Board maymaygrant grant licenses for one year or for multiple years, not to exceed three years, based on the fees set by the Board pursuant to this Chapter.

The Board maymayprovide provide a discount for Page 20 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 two-year or three-year licenses, not to exceed five percent (5%) of the applicable license fee, which extends for one fiscal year and shall not be altered or rescinded during such period.

(2) The fee and civil penalty pursuant to subdivision (1) of this subsection to pay the fee in lieu of posting and publishing notice and reapplying, provided payment of the fee is made within 45 days following the 30 days specified in subdivision (1) of this subsection and is accompanied by a civil penaltypenaltyof of one hundred dollars ($100.00) or twenty-five percent (25%) of such fee, whichever is greater.

Notwithstanding the provisions of subsection (f) of this section, electronic records of licensed retail marijuana stores may be stored off site, provided that such records are readily retrievable and available for electronic inspection bybythe the Board or its special agents at the licensed premises.

For the purposes of a Board inspection of the records of anyanyretail retail marijuana store licensees, "reasonable hours" means the hours between 9 a.m.

At any other time of day, if the retail marijuana store licensee's DRS45498-MLxf-140Senate Bill 765-First Edition Page 21 General Assembly Of North Carolina Session 2021 records are not available for inspection, the licensee shall provide the records to a special agent of the Board within 24 hours after a request is made to inspect the records.

(a) The Board maymayissue issue marijuana manufacturingmanufacturingfacilitylicenses, facility licenses, which shall authorize the licensee to purchase or take possession of retail marijuana from a marijuana cultivation facility or another marijuana manufacturing facility;

Page 22 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (b) A marijuana testing facility may develop, research, or test retail marijuana and retail marijuana products for (i) that facility, (ii) another licensee, or (iii) a person who intends to use the retail marijuana or retail marijuana product for personal use as authorized by this Chapter.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 23 General Assembly Of North Carolina Session 2021 c.

EmployEmployor orallowtoallowto volunteer anypersonyoungeranyperson than21yearsofage.younger than21 yearsofage.

18D-208, a retail marijuana store licensee shall track all retail marijuana, retail marijuana products, immature marijuana plants, or marijuana seeds from the point at which the retail marijuana, retail marijuanamarijuanaproducts, products, immaturemarijuanaplants, ormarijuana seeds are delivered or transferred to the retail marijuana store by a marijuana wholesalertothepointatwhichtheretailmarijuana,retailmarijuanaproducts, immature marijuana plants, or marijuana seeds are sold to a consumer, delivered or transferred to a marijuana testing facility, or disposed of or destroyed.

(a) As used in this section, "interest" means an equity ownership interest or a partial equityequityownership ownership interest oranyoranyothertype othertype of financialinterest, includingincludingbut but not limitedto being an investor or serving in a management position.

Page 24 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (b) A temporarytemporarypermit permit granted pursuant to subsection (a) of this section may be revoked summarily by the Board for any cause set forth in G.S.

The Board maymayrefuse refuse to grant anyanylicense license if it has reasonable cause to believe that any of the following conditions is met:

Has defrauded or attempted to defraud the Board, or anyanyfederal, federal, state, or local government or governmental agency or authority, by making or filing any report, document, or tax return required by statute or rule that is fraudulent or contains a false representation of a material fact;

DRS45498-MLxf-140Senate Bill 765-First Edition Page 25 General Assembly Of North Carolina Session 2021 i.

(ii) character of, population of, numberofsimilarlicenses, andnumberofall licenses existent inintheparticular theparticular county, city, or town and the immediate neighborhood concerned;

(iii) effect that a new license may have on such county, city, town, or neighborhood in Page 26 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 conforming with the purposes of this Chapter;

(4) There exists any law, ordinance, or regulation of the United States, the State, or anyanypolitical political subdivision thereof that warrants refusal by the Board to grant any license.

(1) The licensee, or if the licensee is a partnership, any general partner thereof, or if the licensee is an association, any member thereof, or a limited partner of tenpercent(10%)ormorewithvotingrights,orifthelicenseeisacorporation, any officer, director, or shareholder owning ten percent (10%) or more of its capital stock, or if the licensee is a limited liability company, any member-manager or any member owning ten percent (10%) or more of the membership interest of the limited liabilityliabilitycompany, company, and anyanyof of the following conditions has been met:

DRS45498-MLxf-140Senate Bill 765-First Edition Page 27 General Assembly Of North Carolina Session 2021 a.

or (iv) failed or refused to complycomplywith withanyof any of the conditions or restrictions of the license granted by the Board.

Has allowed anyanyperson person whom he or she knew or had reason to believe was intoxicated to loiter upon such licensed premises.

Has upon the licensed premises (i) illegally possessed, distributed, sold, or used, or has knowinglyknowinglyallowed allowedanyemployee any employee or agent, or any other person, to illegally possess, distribute, sell, or use, controlled substances, imitation controlled substances, drug paraphernalia, or controlled paraphernalia;

Has failed to take reasonable measures to prevent an act of violence resulting in death or serious bodilybodilyinjury, injury, or a recurrence of such acts, Page 28 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 from occurring on (i) the licensed premises, (ii) any premises immediately adjacent to the licensed premises that is owned or leased by the licensee, or (iii) any portion of public property immediately adjacent to the licensed premises.

Hasbecomeameetingplaceorrendezvousforillegalgambling,illegalHasbecomeameetingplaceorrendezvousforillegal gambling,illegal users of narcotics, drunks, prostitutes, pimps, panderers, or habitual law violators or has become a place where illegal drugs are regularly used or distributed.

(ii) thelicensee has pendingpendinga a bona fide application for correction or appeal with respect to such taxes, penalties, or interest;

(a) Notwithstanding any provision of law to the contrary, the Board may summarily suspend anyanylicense license or permit if it has reasonable cause to believe that an act of violence resulting in death or serious bodily injury, or a recurrence of such acts, has occurred on (i) the licensed premises, (ii) anyanypremises premisesimmediatelyadjacent immediately adjacent to the licensed premises that is owned or leased by the licensee, or (iii) any portion of public property immediately adjacent to the licensed premises, and the Board finds that there exists a continuing threat to public safety and that summary suspension of the license or permit is justified to protect the health, safety, or welfare of the public.

(b) Prior to issuing an order of suspension pursuant to this section, special agents of the Board shall conduct an initial investigation and submit all findings to the Secretary of the Board DRS45498-MLxf-140Senate Bill 765-First Edition Page 29 General Assembly Of North Carolina Session 2021 within 48 hours of any such act of violence.

Such temporarytemporarysuspension suspension shall remain effective for a minimum of 48 hours.

(d) Service of any order of suspension issued pursuant to this section shall be made by a special agent of the Board in person and bybycertified certified mail to the licensee.

(2) A licensee has defrauded or attempted to defraud the Board, or any federal, state, or local government or governmental agency or authority, by making or filing any report, document, or tax return required bybystatute statute or regulation that is fraudulent or contains a willfulorknowingfalse representationofamaterial fact or has willfully deceived or attempted to deceive the Board, or any federal, state, or local government or governmental agency or authority, by making or maintaining business records required by statute or regulation that are false or fraudulent.

In addition, any subpoena for the production of documents issued to any person at the request of the licensee or the Board shall provide for the production of the documents sought within 10 working days, notwithstanding any provision of law to the Page 30 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 contrary.

(2) Designate the violations for which a waiver of a hearing and payment of a civil charge in lieu of suspension maymaybe be accepted for a first offense occurring within three years immediately preceding the date of the violation.

(5) Establish a schedule of offenses for which any penalty may be waived upon a showing that the licensee has had no prior violations within five years DRS45498-MLxf-140Senate Bill 765-First Edition Page 31 General Assembly Of North Carolina Session 2021 immediately preceding the date of the violation.

(c) Retail marijuana or retail marijuana products owned by or in the possession of or for sale by persons whose licenses have been terminated other than bybysuspension suspension or revocation may be disposed of in accordance with subsection (a) of this section within such time as the Board deems proper.

However, the Board may waive, for good cause shown, the requirement for a criminal history records search and completed personal data form for officers, directors, nonmanaging members, Page 32 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 orlimitedpartners of anyanyapplicant applicantcorporation,limitedliabilitycompany, corporation,limitedliabilitycompany,orlimitedpartnership.orlimitedpartnership.

however, all licensees shall file and maintain with the Board a current, accurate record of the information required bybythe the Board pursuant to subsection (a) of this section and notify the Board of any changes to such information in accordance with Board rules.

The Board shall set the amount of such increases on the basis of the consumer price index and shall not increase fees more than once everyeverythree three years.

No refund shall be made of anyanysuch such amount, however, unless made within three years from the date of collection of the same.

(b) In any case where a licensee has changed its name or form of organization during a license period without any change being made in its ownership, and because of such change is DRS45498-MLxf-140Senate Bill 765-First Edition Page 33 General Assembly Of North Carolina Session 2021 required to pay an additional license fee for such period, the Board shall refund to such licensee the amount of such fee so paid in excess of the required license fee for such period.

(a) AnylocalityAnylocalitymaybyordinancelevyathreepercent mayby(3%)tax ordinancelevyathreepercenton (3%)taxonanysaletaxableunder any saletaxableunder G.S.

(c) Nothing in this section shall be construed to prohibit a localitylocalityfrom from imposing anyanytax tax authorized by law on a person or property regulated under this Chapter.

Upon written application by a person filing a return, the Commission may, if it Page 34 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 determines good cause exists, grant an extension to the end of the calendar month in which the tax is due, or for a period not exceeding 30 days.

18D-604 sells out his or her business or stock of goods or quits the business, such person shall make a final return and payment within 15 days after the date of selling orquittingor quitting the business.

(b) Whenever it is proved to the satisfaction of the Commission that any person has purchased taxable items that have been sold bybysuch such person in such manner as to be exempt from the tax, the Commission shall certify such facts for approval of a refund payment to such extent as may be proper.

(c) In the event purchases are returned to the seller bybythe the buyer after a tax imposed under G.S.

18D-604 has been collected or charged to the account of the buyer, the DRS45498-MLxf-140Senate Bill 765-First Edition Page 35 General Assembly Of North Carolina Session 2021 seller shall be entitled to a refund of the amount of tax so collected or charged in the manner prescribed by the Commission.

The Commission may require such person or the agents and employees of such person to give testimony or to answer interrogatories under oath administered by the Commission respecting taxable sales, the filingfilingofthereturn,and ofthereturn,andanyother anyrelevant otherrelevant information.

IfanyIfanypersonfails personfails to filearequiredreturn, refuses to provide required records, or refuses to answer interrogatories from the Commission, the Commission may make an estimated assessment based upon the information available to it and issue a memorandum of lien under subsection (c) of this section for the collection of any taxes, interest, or penalties.

If the person has no place of business or residence within the State, the memorandum maymaybe be filed in the Wake County Superior Court.

Page 36 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (3) If after filing a memorandum of lien the Commission determines that it is in the best interest of the State, it may place padlocks on the doors of any business enterprise that is delinquent in filing or paying any tax owed to the State.

If after three business days, the tax deficiency has not been satisfiedorsatisfactoryarrangementsforpaymentmade,theCommissionmaysatisfiedorsatisfactoryarrangementsforpaymentmade,the Commissionmay cause a writ of fieri facias to be issued.

Ifthe Commission determines thatthefilingthatthefilingwas was erroneous, it shall issue a certificate of release of the lien within seven days after such determination is made.

(a) Except as otherwise provided in this Chapter and notwithstanding anyanyother other provision of law, a person 21 years of age or older may lawfully possess on his or her person or in any public place not more than two ounces of marijuana or an equivalent amount of marijuana product as determined by rule promulgated by the Board.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 37 General Assembly Of North Carolina Session 2021 (a) A person 21 years of age or older may cultivate up to two mature marijuana plants and two immature marijuana plants for personal use at their place of residence;

ApersonmayonlyApersonmayonlycultivate cultivate marijuana plants pursuant to this section at such person's main place of residence.

(c) IftwoIf two ormorepersonsconspiretogetherto doanydoanyact actthat thatisis in violationviolationofsubsection ofsubsection (a) of this section, and one or more of such persons does any act to effect the object of the conspiracy, each of the parties to such conspiracy is guilty of a Class I felony.

(ii) a gift of marijuana is offered or advertised in conjunction with an offer forthesaleofgoodsforthesaleof goods orservices;

or (iii)agift(iii)a gift of marijuanais contingent upon a separate reciprocal transaction for goods or services.

(b) If any person who is not licensed sells, gives, or distributes any marijuana or marijuana products except as permitted by this Chapter or provided in subsection (c) of this Page 38 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 section, the person is guilty of a Class 1 misdemeanor.

AnyAnyperson person convicted of a violation of this subsection is guilty of a Class A1 misdemeanor.

(d) Any person who sells, except as otherwise provided in this Chapter, any marijuana or marijuana products to an individual who is younger than 21 years of age and at the time of the sale does not require the individual to present bona fide evidence of legal age indicating that the individual is 21 years of ageorolderis guilty of aviolation ofthis subsection.Bonafide evidence of legal age isorolderis limitedguiltyof toaviolationofthis anysubsection. evidence that is or reasonably appears to be an unexpired driver's license issued by any state of the United States or the District of Columbia,military identification card, United States passport or foreign government visa, unexpired special identification card issued by the Division of Motor Vehicles, or any other valid government-issued identification card bearing the individual's photograph, signature, height, weight, and date of birth, or which bears a photograph that reasonably appears to match the appearance of the purchaser.

Bona fide evidence of legal age is limited to any evidence that is or reasonably appears to be an unexpired driver's license issued byanystate of the United States or the District of Columbia,militaryidentification card, United States passport or foreign government visa, unexpired special identification card issued by the Division of Motor Vehicles, or any other valid government-issued identification card bearing the individual's photograph, signature, height, weight, and date of birth, or which bears a photograph that reasonably appears to match the appearance of the purchaser.

(b) Any person 18 years of age or older who violates subsection (a) of this section is subject to a civil penalty of no more than twenty-five dollars ($25.00) and shall be ordered to DRS45498-MLxf-140Senate Bill 765-First Edition Page 39 General Assembly Of North Carolina Session 2021 enter a substance abuse treatment or education program or both, if available, that in the opinion of the court best suits the needs of the accused.

(b) Anypersonwhopurchasesfor,orotherwisegives,provides,orassistsintheprovisionAnypersonwhopurchasesfor,orotherwise gives,provides,orassistsintheprovision of retail marijuana or retail marijuana products to, another person when he or she knows or has reason to know that such person is younger than 21 years of age, except by any federal, State, or local law enforcement officer when possession of marijuana or marijuana products is necessary in the performance of his or her duties, is guilty of a Class A1 misdemeanor.

Using orconsumingmarijuanaormarijuanaorconsuming marijuanaormarijuana productswhilein amotorvehicle being driven upon a public highway;

"Passenger area" does not include the trunk of anyanypassenger passenger vehicle;

(b) It is unlawful foranyforanypersonto personto useorconsumemarijuanaormarijuanaproducts while driving a motor vehicle upon a public highwayhighwayof of the State or while being a passenger in a motor vehicle being driven upon a public highway of the State.

Page 40 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (c) A judge or jury may make a permissive inference that a person has consumed marijuana or marijuana products in violation of this section if (i) an open container is located within the passenger area of the motor vehicle, (ii) the marijuana or marijuana products in the open container have been at least partially removed, and (iii) the appearance, conduct, speech, or other physical characteristic of such person, excluding odor, is consistent with the consumption of marijuana or marijuana products.

Consumingmarijuanaormarijuanaproducts,orofferingConsuming tomarijuanaor another,marijuanaproducts,oroffering intoanother,in public place;

(c) AnyAnyperson person convicted of a violation of this sectionis guiltyguiltyof of a Class 1 misdemeanor.

The transportation of retail marijuana or retail marijuana products in any motor vehicle that is being used, or is licensed, for the transportation of passengers for hire is prohibited, except when carried in the possession of a passenger who is being transported for compensation at the regular rate and fare charged other passengers.Anyperson convictedofconvicted of aviolation ofthis section is guilty of a Class A1 misdemeanor.

No person shall maintain, aid, abet, or knowingly associate with DRS45498-MLxf-140Senate Bill 765-First Edition Page 41 General Assembly Of North Carolina Session 2021 others in maintaining a common nuisance.

AnyAnyperson person convicted of a violation of this subsection is guilty of a Class A1 misdemeanor.

Any office, store, shop, restaurant, dance hall, theater, poolroom, clubhouse, storehouse, warehouse, dwellingdwellinghouse, house, apartment, orbuilding orstructureof anykind that is (i)substantially altered from its original status by means of reinforcement with the intent to impede, deter, or delaylawfulentrybyalawenforcementofficerintosuchstructure;(ii)beingusedforthepurpose of illegally manufacturing or distributing marijuana;

(b) Marijuana cultivation facility licensees, marijuana manufacturing facility licensees, marijuana wholesaler licensees, and retail marijuana store licensees maymayengage engage in the displaydisplayof of outdoor retail marijuana or retail marijuana products advertising on lawfully erected signs, provided that such display is done in accordance with G.S.

Page 42 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (b) Any person convicted of a violation of this section is guilty of a Class A1 misdemeanor.

(f) Upon violation of a term or condition, the court maymayenter enter an adjudication of guilt and proceed as otherwise provided.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 43 General Assembly Of North Carolina Session 2021 "§ 18D-800.

(1) Cultivate, manufacture, transport, sell, or test any retail marijuana or retail marijuanaproducts of a kind otherthanthat which suchlicensesuchlicenseorthis orthis Chapter authorizes him or her to cultivate, manufacture, transport, sell, or test.

18D-800, no retail marijuana store licensee or his agent or employee shall consume any retail marijuana or retail marijuana products while on dutyandinapositionthatisinvolvedinthesellingofretailmarijuanaorretailmarijuanaproductsdutyandinapositionthatisinvolvedinthesellingofretailmarijuanaorretailmarijuana products to consumers.

AnyAnyperson person convicted of a violation of this section is guilty of a Class A1 misdemeanor.

Page 44 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 No person subject to the jurisdiction of the Board shall induce, attempt to induce, or consent to any licensee selling, renting, lending, buying for, or giving to any person any advertising materials or decorations under circumstances prohibited by this Chapter or Board rules.

The Board, upon proof of anyanysolicitation solicitation in violation of this subsection, maymaysuspend suspend or terminate the sale of the retail marijuana or retail marijuana products that were the subject matter of the unlawful solicitation or promotion.

In addition, the Board maymaysuspend suspend or terminate the sale of all retail marijuana or retail marijuana products manufactured or distributed by either the employer or principal of such solicitor, the broker, or by the owner of the brand unlawfully solicited or promoted.

AnyAnyperson person convicted of a violation of this subsection is guilty of a Class A1 misdemeanor.

(c) In the case of a false or fraudulent return, where willful intent exists to defraud the State of any tax due on retail marijuana or retail marijuana products, a civil penalty of fifty DRS45498-MLxf-140Senate Bill 765-First Edition Page 45 General Assembly Of North Carolina Session 2021 percent (50%) of the amount of the proper tax due shall be assessed.

18D-604 or this section is not paid by the bank on which it is drawn, and the person that tendered the check fails to paypaythe the Commission the amount due within five days after the Commission gives it notice that such check was returned unpaid, the person by which such check was tendered is guilty of a Class A1 misdemeanor.

(a) No law enforcement officer may lawfully stop, search, or seize any person, place, or thing solely on the basis of the odor of marijuana and no evidence discovered or obtained Page 46 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 pursuant to a violation of this subsection, including evidence discovered or obtained with the person's consent, shall be admissible in any trial, hearing, or other proceeding.

In those cases where no person is found in possession of such articles, the return shall so state and a copy of the warrant shall be posted on the door of the buildings or room where the articles were found, or if there is no door, then in anyanyconspicuous conspicuous placeupon thepremises.

In caseofseizureof anyanyitem item for anyanyoffense offense involving its forfeiture where it is impracticable to remove such item to a place of safe storage from the place where seized, the seizing officer may destroy such item only as necessary to prevent use of all or any part thereof.

In case of seizure of any quantity of marijuana or marijuana products for any offense involving forfeiture of the same, the seizing officer may destroy them to prevent the use of all or any part thereof for the purpose of unlawful cultivation or manufacture of marijuana or marijuana products or anyanyother other violation of this Chapter.

(c) Upon the return of the warrant as provided in this section, the court shall fix a time not less than 10 days, unless waived by the accused in writing, and not more than 30 days DRS45498-MLxf-140Senate Bill 765-First Edition Page 47 General Assembly Of North Carolina Session 2021 thereafter, for the hearing on such return to determine whether or not the articles seized, or any part thereof, were used or in any manner kept, stored, or possessed in violation of this Chapter.

Failure to maintain on a conveyance or vehicle a permit or other indicia of permission issued bybythe the Board authorizing the transportation of retail marijuana or retail marijuana products within the State when other Board rules applicable to such transportation have been complied with shall not be cause for deeming such retail marijuana or retail marijuana products contraband.

(b) In addition to the penalties imposed by this Chapter for violations, any court before whom any person is convicted of a violation of any provision of this Chapter may require such defendant to execute bond based upon his or her ability to pay, with approved security, in the penaltypenaltyof of not more than one thousand dollars ($1,000), with the condition that the defendant will not violate any of the provisions of this Chapter for the term of one year.

Page 48 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (c) Theprovisions ofthis Chaptershall not prevent the BoardfromBoard from suspending, revoking, or refusing to continue the license of any person convicted of a violation of any provision of this Chapter.

Except as otherwise provided in this Chapter or otherwise provided by law, the program shall require a licensee, prior to selling or distributing retail marijuana or a retail marijuana product to a consumeror to anotherlicensee, to submit a representativesample ofthe retail marijuana orretail marijuana product, not to exceed ten percent (10%) of the total harvest or batch, to a licensed marijuana testing facilityfacilityfor for testing to ensure that the retail marijuana or retail marijuana product does not exceed the maximum level of allowable contamination for any contaminant that is injurious to health and for which testing is required and to ensure correct labeling.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 49 General Assembly Of North Carolina Session 2021 "§ 18D-1001.

(b) MandatoryMandatorytesting testing of retail marijuana and retail marijuana products under this section shall include testing for all of the following:

(d) If the results of a mandatory test conducted pursuant to this section indicate that the tested retail marijuana or retail marijuana product exceeds the maximum level of allowable tetrahydrocannabinol (THC) or contamination for any contaminant that is injurious to health and for which testing is required, the marijuana testing facility shall immediately quarantine, document, and properlyproperlydestroy destroy the retail marijuana or retail marijuana product and within seven days of completing the test shall notify the Board of the test results.

(1) The retail marijuana or retail marijuana product has previously undergone testing in accordance with this Chapter and rules adopted pursuant to this Chapter at the direction of another licensee and that testing demonstrated that the retail marijuana or retail marijuana product does not exceed the maximum Page 50 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 level of allowable tetrahydrocannabinol (THC) or contamination for any contaminant that is injurious to health and for which testing is required.

(4) The retail marijuana or retail marijuana product has not undergone anyanyfurther further processing, manufacturing, or alteration subsequent to the performance of the prior testing under subsection (a) of this section.

(f) Licensees shall be required to destroydestroyharvested harvested batches of retail marijuana or batches of retail marijuana products whose testing samples indicate noncompliance with the health and safety standards required by this Chapter and the rules adopted by the Board pursuant to this Chapter, unless remedial measures can bring the retail marijuana or retail marijuana products into compliance with such required health and safety standards.

CONSUMPTION OF MARIJUANA IMPAIRS COGNITION AND YOUR ABILITY TO DRIVE AND DRS45498-MLxf-140Senate Bill 765-First Edition Page 51 General Assembly Of North Carolina Session 2021 MAY BE HABIT FORMING.

(a) In addition to all other applicable provisions of this Chapter, edible retail marijuana products and other retail marijuana products deemed applicable by the Commission to be sold or offered for sale bybya a licensee to a consumer in accordance with all of the following requirements:

Page 52 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (4) Shall be manufactured in a manner that results in the amount of marijuana concentrate within the product being homogeneous throughout the product or throughout each element of the product that contains marijuana concentrate.

(c) A licensee shall not advertise (i) through anyanymeans means unless at least eighty-five percent (85%) of the audience is reasonably expected to be 21 years of age or older, as determined by reliable,up-to-dateaudiencecomposition dataor(ii)ontelevisionortheradio at anyanytimeoutside timeoutside of regular school hours for elementary and secondary schools.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 53 General Assembly Of North Carolina Session 2021 (f) Advertising or marketing used by or on behalf of a licensee shall meet all of the following requirements:

(1) Shall accuratelyaccuratelyand andlegiblyidentifythe legibly identify the licensee responsible for its content by adding, at a minimum, the licensee's license number, and shall include the statement "For use by adults 21 years of age and older." (2) Shall not be misleading, deceptive, or false.

(g) Any advertising or marketing involving direct, individualized communication or dialogue controlled by the licensee shall utilize a method of age affirmation to verify that the recipient is 21 yearsofageorolderbeforeengagingyearsofageorolderbeforeengagingin in that communicationordialoguecontrolledcommunication ordialogue controlled by the licensee.

(b) However,(i)ifthereis no buildingbuildingorstructureona orstructureonaplaygroundplayground orsimilarrecreational or child-centered facility, the measurement shall be from the nearest edge of the sign face upon which the advertisement is placed to the property line of such playground or similar recreational or child-centered facility and (ii) if a public, private, or parochial school providing grades kindergarten through 12 education is located across the road from a sign, the measurement shall be from the nearest edge of the sign face upon which the advertisement is placed to the nearest edge of a building or structure located on such real property across the road.

(c) IfatIf at the timethe advertisementwas displayed, theadvertisement was morethan1,000 feet from (i) a public, private, or parochial school or an institution of higher education;

(1) Signs placed by licensees upon the property on which the licensed premises are located so long as such signs do not display imagery of marijuana or the Page 54 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 use of marijuana or utilize long luminous gas-discharge tubes that contain rarefied neon or other gases.

There is hereby created in the State Treasury a special nonreverting fund to be known as the Cannabis Equity Business Loan Fund, referred to in this section as "the Fund." All funds appropriated forsuch purposeand anygifts, donations, grants, bequests,bequests,and and otherfunds received on its behalf shall be paid into the State Treasury and credited to the Fund.

Any moneys remaining in the Fund, includingincludinginterest interest thereon, at the endof each fiscal year shall not revert to the General Fund but shall remain in the Fund.

Working with the selected CDFI, the Commission shall DRS45498-MLxf-140Senate Bill 765-First Edition Page 55 General Assembly Of North Carolina Session 2021 establish monitoring and accountability mechanisms for businesses receiving funding and shall report annually the number of businesses funded;

On or before December 1 of each year, the Commission shall report to the SecretarySecretaryof of Public Safety, the Governor, the Senate Appropriations/Base Budget Committee, and the House Committee on Appropriations, on such other matters regarding the Fund as the Commission may deem appropriate, including the amount of fundingcommitted to projects from the Fund, or other items as may be requested by any of the foregoing persons to whom such report is to be submitted." SECTION 2.2.

(b) A bank that provides a financial service to a licensed marijuana establishment, and the officers, directors, and employees of that bank, shall not be held liable pursuant to any State law or regulation solelysolelyfor for providing such a financial service or for further investing anyanyincome income derived from such a financial service.

(b) A credit union that provides a financial service to a licensed marijuana establishment, and the officers, directors, and employees of that credit union, shall not be held liable pursuant to anyanyState State law or regulation solelysolelyfor for providing such a financial service or for further investing any income derived from such a financial service.

The Cannabis Control Commission may start accepting applications for licenses under this act on JulyJuly1, 1, 2024, and shall, from JulyJuly1, 1, 2024, until December 31, 2024, give preference to qualified social equityequityapplicants, applicants, as determined bybyrules rules adopted bybythe the Board of Directors of the Commission in accordance with this act.

however, no retail marijuana store licensee may sell retail marijuana or retail marijuana products to a consumer prior to Page 56 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 January 1, 2025.

18D-202, as created by this Part, and publish resources to assist social equity applicants bybyJanuary1, January 1, 2024.

The plan shall include the estimated cost of implementation and anyanypotential potential source of funds to cover such cost and shall be submitted to the Governor and the General Assembly by November 1, 2022.

The Board of Governors of the University of North Carolina and theStateBoardofCommunitytheStateBoardofCommunityColleges Colleges determinewhat, ifany,ifany,additional additionalevidence-basedeffortsevidence-basedefforts should be undertaken for college-age individuals to promote education and prevention strategies relating to marijuana.

The plan shall include the estimated cost of implementation and any DRS45498-MLxf-140Senate Bill 765-First Edition Page 57 General Assembly Of North Carolina Session 2021 potential source of funds to cover such cost and shall be submitted to the Governor and the General Assembly by November 1, 2022.

Sections 2.4through2.13ofthisact areeffectivewhentheybecomeareeffectivewhen theybecome law.

– To buybuyindustrial industrial hemp grown in compliance with State or federal law and to sell such industrial hemp to a person who (i) processes industrial hemp in compliance with State or federal law or (ii) sells industrial hemp to a person who processes industrial hemp in compliance with State or federal law.

This term includes an Page 58 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 industrial hemp extract that has not completed all stages of processing needed to convert into a hemp product.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 59 General Assembly Of North Carolina Session 2021 (d) The Commissioner shall be responsible for monitoring the industrial hemp grown, dealt, or processed by a person registered pursuant to this Article and shall provide for random testing of the industrial hemp, at the cost of the grower, dealer, or processor, for compliance with tetrahydrocannabinol limits and for other appropriate purposes established pursuant to this Article.

(g) The Commissioner shall advise the Attorney General of the United States and the State Bureau of Investigation or the chief law enforcement officer of the appropriate county or city when, with a culpable mental state greater than negligence, a grower grows, a dealer deals in, or a processor processes any Cannabis sativa with a concentration of tetrahydrocannabinol that is greater than that allowed bybyfederal federal law or a processor produces a Cannabis sativa product.

A registration shall authorize Page 60 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 industrial hemp growth, dealingin, orprocessingonlyorprocessingonlyat at thelocation specified in the registration.

(5) If required by the Commissioner, destroy, at the cost of the grower, dealer, or processor and in a manner approved of and verified bybythe the Commissioner, any Cannabis sativa that the grower grows, the dealer deals in, or the processor processes that has been tested and, following any re-sampling and retesting as authorized pursuant to the provisions of this Article, is found to have a DRS45498-MLxf-140Senate Bill 765-First Edition Page 61 General Assembly Of North Carolina Session 2021 concentration of tetrahydrocannabinol that is greater than that allowed by federal law, or any Cannabis sativa product that the processor produces.

(d) A person who grows, deals in, or processes industrial hemp and who negligently fails to register pursuant to this Article shall complycomplywith with any corrective action plan established bybythe the Commissioner in accordance with the provisions of subsection (e) of this section.

(b) Any laboratory seeking to test industrial hemp or hemp products in the State shall applyapplyto to theCommissionerforalicenseonaform providedprovidedbytheCommissioner. by theCommissioner.At aminimum, the application shall include all of the following:

At aminimum, the application shall include all of the following:

Page 62 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (4) AsignedstatementthattheapplicantAsigned statementthattheapplicant has nodirect ororindirect indirect financialinterest in a grower, processor, or dealer or in any other entity that may benefit from the production, manufacture, sale, purchase, or use of industrial hemp or a hemp product.

(5) Documentation that the laboratorylaboratoryis is accredited pursuant to standard ISO/IEC 17025 of the International Organization for Standardization by a third-party accrediting body.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 63 General Assembly Of North Carolina Session 2021 The following definitions apply in this Article:

Upon completion of the order of expungement, the court Page 64 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 shall order the expunction.

(e) AnyAnyother other applicable State or local government agencyagencyshall shall expunge from its records entries made as a result of the conviction ordered expunged under this section.

If the quantity of the controlled substance exceeds one and one-half ounces (avoirdupois) of marijuana, or three-twentieths of an ounce (avoirdupois) of the extracted resin of marijuana, commonly known as hashish, or if the controlled substance consists of any quantity of synthetic tetrahydrocannabinols or tetrahydrocannabinols isolated DRS45498-MLxf-140Senate Bill 765-First Edition Page 65 General Assembly Of North Carolina Session 2021 from the resin of marijuana, the violation shall be punishable as a Class I felony.

90-95(a)(1) on property used for a child care center, or for an elementary or secondarysecondaryschool school or within 1,000 feet of the boundaryboundaryof of real propertypropertyused used for a child care center, or for an elementary or secondary school shall be punished as a Class E felon.

… (h) Notwithstanding anyanyother other provision of law, the following provisions apply except as otherwise provided in this Article:

Page 66 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 (a) As used in this Article, "drug paraphernalia" means all equipment, products and materials of anyanykind kind that are used to facilitate, or intended or designed to facilitate, violations of the Controlled Substances Act, including planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, and concealing controlled substances and injecting, ingesting, inhaling, or otherwise introducing controlled substances into the human body.

DRS45498-MLxf-140Senate Bill 765-First Edition Page 67 General Assembly Of North Carolina Session 2021 (1) At the rate of forty cents (40¢) for each gram, or fraction thereof, of harvested marijuana stems and stalks that have been separated from and are not mixed with any other parts of the marijuana plant.

SAVINGS CLAUSE AND EFFECTIVE DATE Page 68 DRS45498-MLxf-140Senate Bill 765-First Edition General Assembly Of North Carolina Session 2021 SECTION 6.1.

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