SB 288 — CANNABIS REGULATION ACT

TheRegarding commissioncommercial shallcannabis notactivity, licensethe acommission dispensaryshall thatnot islimit located within three hundred feet from the perimeternumber of schoolplants grounds on which instruction is provided at any level from kindergarten through twelfth grade, a playground,cannabis aestablishment childmay carepossess, center,cultivate a youth center, a public park or amanufacture. library that was in existence at the time the dispensary was established at that location.

The commission shall not licenselimit athe dispensarytype unlessor thenumber dispensaryof agreeslicenses asissued apursuant conditionto ofthe itsCannabis licenseRegulation toAct acceptor cannabisthe itemstype onor consignmentnumber forof resalelicenses fromthat anya manufacturerlicensee ormay producerbe licensedissued pursuant to Section 6 of the Cannabis Regulation Act.

SECTIONK. 4.

[NEWThe MATERIAL]commission DEPARTMENTshall OFnot HEALTH--DUTIES--license ea tdispensary 17that PUBLICis HEALTHlocated ANDwithin SAFETYthree ADVISORYhundred COMMITTEE.--feet wfrom lthe nperimeter dof 18school A.grounds on which instruction is provided at any level from kindergarten through twelfth grade, a playground, a child care center, a youth center, a public park or a library that was in existence at the time the dispensary was established at that location.

TheL. department of health shall promulgate rules = = 19 a l to govern the medical cannabis subsidy program.

iThe commission shall not license a dispensary unless the dispensary agrees as a condition of its license to e rt 2017 B.accept cannabis items on consignment for resale from any w l n d 18 manufacturer or producer licensed pursuant to Section 6 of the = = 19 Cannabis Regulation Act.

Thea departmentl ofi health shall monitor emerging a te m m 21 scientific and medical information relevant to the health d r e20 22SECTION effects4. associated with cannabis use and shall monitor changes c e s k 23 in cannabis use patterns for children and adults within the e a n b 24 state, broken down by county, race and ethnicity.

u[NEW [MATERIAL] C.DEPARTMENT OF HEALTH--DUTIES-- a t m m 21 PUBLIC HEALTH AND SAFETY ADVISORY COMMITTEE.-- d r e 22 A.

The secretarydepartment of health shall appointmonitor aemerging "publicc .219045.2e -s 13k -23 healthscientific and safetymedical advisoryinformation committee"relevant composedto ofthe professionalshealth withe expertisea relatedn tob 24 effects associated with cannabis throughuse work,and trainingshall ormonitor researchchanges u [ in publiccannabis health,use epidemiology,patterns medicine,for medicalchildren toxicology,and poisonadults control,within roadthe safety,.220534.3 occupational- safety,13 environmental- safety,STBTC/SB laboratory288 testingstate, andbroken emergencydown medicine.by county, race and ethnicity.

D.B.

The secretary of health shall appoint a "public health and safety advisory committee" composed of professionals with expertise related to cannabis through work, training or research in public health, epidemiology, medicine, medical toxicology, poison control, road safety, occupational safety, environmental safety, laboratory testing and emergency medicine.

C.

e t 17 (4) percentage of emergency room visits and w l n d 18 outcomes;

e= t= 1719 (5) educational needs for children and adults;

wa l ni da 18e r 20 (6) consumer and product safety;

and =a =t 19m am l21 (7) percentage of poison control center calls.

id ar e r22 20D. E.

Public members of the committee are entitled to ac te ms mk 2123 per diem and mileage as provided for state employees in the Per de ra en 22b 24 Diem and Mileage Act.

cu e[ s k 23 SECTION 5.

[NEW MATERIAL] DEPARTMENT OF PUBLIC SAFETY-- e.220534.3 a- n14 b- 24STBTC/SB 288 REPORTING REQUIREMENTS.-- u [ A.

Within sixty days following the end of each .219045.2 - 14 - fiscal year, every police and sheriff's department shall report on a form approved by the department of public safety:

e t 17 C.

The department of public safety shall compile w l n d 18 the reports submitted and shall issue by November 1 of each e= t= 1719 year an annual report of all cannabis law violations in the wa l ni da 18e r 20 state.

The report shall aggregate the data for the state and =a =t 19m am l21 shall disaggregate the data by agency, race, ethnicity, age and id ar e r22 20 gender.

The department of public safety shall make all annual ac te ms mk 2123 reports submitted for previous fiscal years available on the de ra en 22b 24 department's website.

cu e[ s k 23 SECTION 6.

[NEW MATERIAL] LICENSING--LIMITATIONS.-- e.220534.3 a- n15 b- 24STBTC/SB 288 A.

The department of environment shall regulate and u [ license cannabis manufacturers, dual licensed dispensaries and .219045.2 - 15 - cannabis testing laboratories pursuant to rules promulgated by the commission.

provided that the minimum percentage shall be not less than twenty percent and not more than forty percent of total e t 17 cannabis products sold from the preceding twelve months' w l n d 18 operation of the manufacturer;

and e= t= 1719 (2) all medical cannabis products shall be wa l ni da 18e r 20 sold at a grade and quality determined by rule and a cannabis =a =t 19m am l21 testing laboratory to be suitable for medical consumption.

id ar e r22 20 C.

The New Mexico department of agriculture shall ac te ms mk 2123 regulate and license cannabis producers pursuant to rules de ra en 22b 24 promulgated by the board and shall begin issuing licenses no cu e[ s k 23 sooner than JuneApril 1, 2022 and shall regulate and issue licenses e.220534.3 a- n16 b- 24STBTC/SB 288 to persons who possess a valid dual license for both medical u [ and adult-use cannabis production no later than September 1, .219045.2 - 16 - 2021.

The department of environment may issue a dual license that provides for the manufacturing and sale of on-site e t 17 and off-site consumption of adult-use cannabis to a person that w l n d 18 holds a valid medical cannabis manufacturer or producer e= t= 1719 license;

provided that the person shall sell a minimum quantity wa l ni da 18e r 20 of medical cannabis products as provided in Subsection B of =a =t 19m am l21 this section and shall meet quality standards promulgated by id ar e r22 20 the department of environment.

ac te ms mk 2123 G.

The commission may issue a dispensary license to de ra en 22b 24 a person who holds a valid adult-use cannabis manufacturer or cu e[ s k 23 producer license or a valid dual license;

provided that the e.220534.3 a- n17 b- 24STBTC/SB 288 dispensary shall meet quality standards promulgated by the u [ commission for a dispensary;dispensary.

and provided further that a .219045.2 - 17 - dispensary shall not be located within one mile of previously established dispensaries located within the same county.

w l n d 18 (3) the applicant or a controlling person in = = 19 a l the applicant's entity has been convicted of an offense that is a l i a e r 20 substantially related to the qualifications, functions or a t m m 21 duties of the applicant entity's business;

provided that if the d r e 22 constituent agency determines that the controlling person and c e s k 23 the applicant entity are otherwise qualified for a license and e a n b 24 issuing a license to the applicant entity would not compromise u [ public safety, the constituent agency shall conduct a thorough .219045.2.220534.3 - 18 - STBTC/SB 288 review of the conviction, including the nature of the offense, surrounding circumstances and any evidence of the controlling person's rehabilitation following the conviction, and based on that review, determine whether the applicant entity should be issued a license;

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

and .219045.2.220534.3 - 19 - STBTC/SB 288 (2) a conviction for which the related sentence, including any term of probation or parole, is completed for the possession, use, manufacture, distribution or dispensing or the possession with the intent to manufacture, distribute or dispense a controlled substance is not considered substantially related to the qualifications, functions or duties of a person seeking a license and shall not be a ground on which an application is denied unless the offense involved the distribution of alcohol or a controlled substance to a minor.

The commission shall begin issuing licenses w l n d 18 for cannabis couriers no sooner than JanuarySeptember 1, 2021.

= = 19 a l SECTION 7.

[NEW MATERIAL] LICENSING FEES.-- a l i a e r 20 A.

.219045.2.220534.3 - 20 - STBTC/SB 288 (1) the fee shall be scaled to reflect the size of a business seeking or renewing a license;

The commission, the department of environment and the New Mexico department of healthagriculture shall deposit all fees collected pursuant to the Cannabis Regulation Act in the cannabis regulation fund.

[NEW MATERIAL] DISCIPLINARY PROCEEDINGS-- = = 19 a l APPLICATION OF UNIFORM LICENSING ACT.--In accordance with the a l i a e r 20 procedures contained in the Uniform Licensing Act, the a t m m 21 commission, the department of environment or the department of d r e 22 health may revoke or suspend any permanent or temporary license c e s k 23 held or applied for under the Cannabis Regulation Act upon e a n b 24 findings that the licensee or applicant:

engaged in fraud or deceit in procuring or .219045.2.220534.3 - 21 - STBTC/SB 288 attempting to procure a license;

and e t 17 (3) limit the location of a cannabis w l n d 18 establishment, which distance shall be three hundred feet or = = 19 a l more from the perimeter of school grounds on which instruction a l i a e r 20 is provided at any level from kindergarten through twelfth a t m m 21 grade, a playground, a child care center, a youth center, a d r e 22 public park or a library that was in existence at the time the c e s k 23 cannabis establishment was licensed.

u [ (1) prevent transportation of cannabis .219045.2.220534.3 - 22 - STBTC/SB 288 products on public roads by a licensee that transports cannabis products in compliance with the Cannabis Regulation Act;

[NEW MATERIAL] LOCALLICENSEE OPTION--EFFECTPROTECTIONS.-- OF LOCAL OPTION.-- A.

AConduct localby jurisdictiona inlicensee theor statea maylicensee prohibitrepresentative that is allowed pursuant to a license and conduct by ordinancea person who allows property to be used by a licensee or resolutiona thelicensee operationrepresentative offor conduct allowed pursuant to a licensedlicense dispensaryis withinlawful sixand monthsis followingnot thea effectivebasis datefor seizure or forfeiture of theany Cannabisproperty Regulationor Act.assets.

A local jurisdiction inshall thenot stateimpose thata hase byt ordinance17 criminal, civil or resolutionadministrative prohibitedpenalty theon operationa oflicensee or a licensedw el tn 17d dispensary18 maylicensee atrepresentative anyor timeon a person who allows property to = = 19 be used by ordinancea licensee or resolutiona allowlicensee therepresentative wpursuant to a l ni da 18e operationr of20 a licensedlicense, dispensary.solely for conduct allowed pursuant to a license.

=a =t 19m am l21 C.SECTION 11.

A[NEW localMATERIAL] jurisdictionTRANSPORT inVIA theCOURIER.-- stated mayr by i a e r22 20A. ordinance or resolution limit the sale of adult-use cannabis a t m m 21 for off-site consumption to sale in a licensed dispensary.

dOnly ra cannabis courier may courier cannabis c e 22s SECTIONk 11.23 products.

[NEW MATERIAL] LICENSEE PROTECTIONS.-- c e sa kn 23b A.24 B.

ConductA byconsumer awho licenseerequests orcourier aservice licenseeshall eu a[ nmaintain ba 24physical representativeor thatelectronic iscopy allowedof pursuantthe tocourier arequest license.220534.3 and- u23 [- conductSTBTC/SB by288 afor personthe whoduration allowsof propertytime tothat bethe usedconsumer bypossesses athe .219045.2cannabis -product 23that -was licenseepurchased orand areceived licenseeby representativecourier forand conductshall allowedmake pursuantthe tocopy aavailable licenseupon isrequest lawfulby andthe iscommission notor a basislaw forenforcement seizureofficer. or forfeiture of any property or assets.

B.

A local jurisdiction shall not impose a criminal, civil or administrative penalty on a licensee or a licensee representative or on a person who allows property to be used by a licensee or a licensee representative pursuant to a license, solely for conduct allowed pursuant to a license.

[NEW MATERIAL] TRANSPORTPROTECTION VIAOF COURIER.--UNDERAGE PERSON--TRAFFICKING--PENALTIES.-- A.

OnlyA licensee shall not employ a cannabisperson courieryounger maythan couriertwenty-one cannabisyears products.of age.

AExcept consumeras whoallowed requestsin courierthe serviceCannabis shallRegulation maintainAct a physical or electronic copy of the courierLynn requestand forErin theCompassionate durationUse ofAct, timea thatlicensee theshall consumernot possessessell thea cannabis product thatto wasa purchasedperson andyounger receivedthan bytwenty-one courieryears andof shallage. make the copy available upon request by the commission or e t 17 a law enforcement officer.

wThe lcommission nshall dsuspend 18or SECTIONrevoke 13.the license and may fine the licensee in an amount not to exceed ten thousand dollars ($10,000), or both, when the commission finds that any licensee or the licensee's employee or agent knowingly has sold, served or given any cannabis product to a e t 17 minor on two separate occasions within any twelve-month period.

[NEWw MATERIAL] PROTECTION OF UNDERAGE = = 19 a l PERSON--TRAFFICKING--PENALTIES.--n id a18 eC. r 20 A.

AThe establishment of all of the following facts = = 19 by a licensee shallprosecuted notfor employa violation of Subsection B of a personl youngeri a te mr m20 21this thansection twenty-oneshall yearsconstitute ofa age.defense that:

a t m m 21 (1) the purchaser falsely represented in d r e 22 B.writing;

Exceptby asproducing alloweda indriver's thelicense Cannabisbearing Regulationthe Act c e s k 23 orpurchaser's thephotograph; Lynn and Erin Compassionate Use Act, a licensee shall e a n b 24 not sell a cannabis product to a person younger than twenty-one u [ years of age.

Theby commissionproducing shalla suspendphotographic ore revokea then .219045.2b - 24 -identification licensecard andissued mayby fine the licenseemotor invehicle andivision amountof not to exceed ten thousand dollars ($10,000), or both, when the commissionu finds[ thattaxation anyand licenseerevenue ordepartment; the licensee's employee or agent knowingly has sold, served or given any cannabis product to a minor on two separate occasions within any twelve-month period.

C.or by producing a similar .220534.3 - 24 - STBTC/SB 288 identification card issued pursuant to the laws of this state, another state, the federal government or the government of an Indian nation, tribe or pueblo that the person was twenty-one years of age or older;

The(2) establishment of all of the followingpurchaser's factsappearance bywas asuch licenseethat prosecutedan forordinary, aprudent violationperson ofwould Subsectionbelieve Bthat ofthe thispurchaser sectionwas shalltwenty-one constituteyears aof defenseage that:or older;

and (3) the sale was made in good faith, relying upon the purchaser's false written representation, driver's license or identification card produced as provided in Paragraph (1) of this subsection, and with the reasonable belief that the purchaser falselywas representedactually intwenty-one writing;years of age or older.

by producing a driver's license bearing the purchaser's photograph;

by producing a photographic identification card issued by the motor vehicle division of the taxation and revenue department;

or by producing a similar identification card issued pursuant to the laws of this state, another state, the federal government or the government of an Indian nation, tribe or pueblo that the person was twenty-one e t 17 years of age or older;

w l n d 18 (2) the purchaser's appearance was such that = = 19 a l an ordinary, prudent person would believe that the purchaser i a e r 20 was twenty-one years of age or older;

and a t m m 21 (3) the sale was made in good faith, relying d r e 22 upon the purchaser's false written representation, driver's c e s k 23 license or identification card produced as provided in e a n b 24 Paragraph (1) of this subsection, and with the reasonable u [ belief that the purchaser was actually twenty-one years of age .219045.2 - 25 - or older.

A person who violates this subsection is guilty of a fourth degree e t 17 felony and shall be sentenced pursuant to Section 31-18-15 NMSA w l n d 18 1978.

= = 19 E.

For the purposes of this section, "traffic" a l i a e r 20 means the:

a t m m 21 (1) distribution, sale, barter or giving away d r e 22 of cannabis;

or c e s k 23 (2) possession with intent to distribute, e a n b 24 sell, barter or give away cannabis.

u [ SECTION 13.

[NEW MATERIAL] DISTRIBUTION AND TRANSPORT.-- .220534.3 - 25 - STBTC/SB 288 The Cannabis Regulation Act shall not be construed to authorize a licensee to transport or distribute, or cause to be transported or distributed, cannabis items outside the state, unless authorized by federal law.

[NEW MATERIAL] DISTRIBUTIONPACKAGING AND TRANSPORT.--LABELING.-- TheA. Cannabis Regulation Act shall not be construed to authorize a licensee to transport or distribute, or cause to be transported or distributed, cannabis items outside the state, e t 17 unless authorized by federal law.

wBefore lsale nto dthe 18public, SECTIONcannabis 15.items shall be labeled and placed in a resealable, child-resistant package.

[NEWB. MATERIAL] PACKAGING AND LABELING.-- = = 19 a l A.

BeforePackages saleand tolabels thefor public, cannabis items shall inot abe edesigned rto 20 be labeledappealing andto placed in a resealable,child. child-resistant package.

aC. t m m 21 B.

Packages and labels for cannabis items shall not d r e 22 be designed to be appealing to a child.

c e s k 23 C.

e a n b 24 (1) total tetrahydrocannabinol concentration u [ for the package;

.219045.2 - 26 - (2) for a package containing only cannabis flower, the net weight of cannabis in the package;

(3) identification of the licensee or licensees that produced or manufactured the cannabis item, the e t 17 date on which the cannabis was harvested, the type of cannabis w l n d 18 item and the date on which the cannabis item was manufactured = = 19 and packaged;

a l i a e r 20 (4) a list of pharmacologically active a t m m 21 ingredients;

d r e 22 (5) for cannabis products, a list of all c e s k 23 ingredients, and for edibles, a disclosure of nutritional e a n b 24 information for the product or cannabis extract, disclosed in u [ the same manner required under federal law for nutritional .220534.3 - 26 - STBTC/SB 288 labeling for food for human consumption;

and e t 17 (7) a warning of possible adverse effects of w l n d 18 consumption and the New Mexico poison and drug information = = 19 a l center phone number.

i a e r 20 SECTION 16.15.

[NEW MATERIAL] CANNABIS PRODUCTS-- a t m m 21 APPEARANCE.-- d r e 22 A.

c e s k 23 (1) not be designed to appeal to children or e a n b 24 in such a way that the products could be easily confused with u [ commercially sold candy or foods that do not contain cannabis;

.219045.2(2) -be 27delineated -or (2)scored beinto producedstandardized andserving soldsizes, withif athe standardizedcannabis dosageproduct ofcontains cannabinoidsmore notthan toone exceedserving tenand milligramsis tetrahydrocannabinolan peredible serving;cannabis product in solid form;

(3) becontain delineateda oruniform scoreddisbursement intoof standardizede servingt sizes,17 ifcannabinoids throughout the cannabisproduct; product contains more than one serving and is an edible cannabis product in solid form;

w l n d 18 (4) containbe manufactured and sold under health and = = 19 sanitation standards established by the commission, with the a uniforml disbursementi a e r 20 assistance of cannabinoidsthe throughoutdepartment of environment, for the product;a t m m 21 preparation, storage, handling and sale of food products;

(5)and bed manufacturedr ande 22 (5) be sold underwith healthsufficient andinformation sanitationto standardsc establishede bys thek commission,23 withenable the assistanceinformed consumption of the departmentproduct, ofincluding environment,e fora n b 24 information on the preparation,potential storage,effects handlingof the product and saleu of[ fooddirections products;on how to consume the cannabis product.

and.220534.3 (6)- be27 sold- withSTBTC/SB sufficient288 informationB. to enable the informed consumption of the product, including information on the potential effects of the product and directions on how to consume the cannabis product.

eCannabis tor 17cannabis B.extracts included in a cannabis product that is manufactured in compliance with applicable law are not considered to be an adulterant under state law.

CannabisSECTION or16. cannabis extracts included in a w l n d 18 cannabis product that is manufactured in compliance with = = 19 a l applicable law are not considered to be an adulterant under i a e r 20 state law.

a[NEW tMATERIAL] mCANNABIS mMANUFACTURERS 21AND SECTIONTESTING 17.LABORATORIES--DEPARTMENT OF ENVIRONMENT--RULEMAKING.-- A.

[NEWThe MATERIAL]department CANNABISof MANUFACTURERSenvironment ANDshall dpromulgate rrules eto 22govern TESTINGthe LABORATORIES--DEPARTMENTlicensing OFof ENVIRONMENT--RULEMAKING.--a ccannabis emanufacturer sand ka 23cannabis A.testing laboratory.

The department of environment shall promulgateissue elicenses aas nfollows: b 24 rules to govern the licensing of a cannabis manufacturer and a u [ cannabis testing laboratory.

The department shall issue .219045.2 - 28 - licenses as follows:

and e t 17 (3) "cannabis testing laboratory" for a w l n d 18 licensee that tests cannabis products.

= = 19 B.

Except as otherwise provided by law, cannabis a l i a e r 20 shall not be sold unless a representative sample from every a t m m 21 five pounds of cannabis flower or each batch of cannabis has d r e 22 been tested by a cannabis testing laboratory to determine:

c e s k 23 (1) the chemical profile of the sample, e a n b 24 including:

u [ (a) delta-9-tetrahydrocannabinol;

e.220534.3 t- 1728 - STBTC/SB 288 (b) tetrahydrocannabinolic acid;

w l n d 18 (c) cannabidiol;

= = 19 a l (d) cannabidiolic acid;

i a e r 20 (e) cannabigerol;

and a t m m 21 (f) cannabinol;

and d r e 22 (2) that the presence of the following c e s k 23 contaminants does not exceed harmful levels:

e a n b 24 (a) residual solvents or chemicals, such u [ as butane, propane, methanol, methylene chloride, acetone, .219045.2 - 29 - benzene, toluene and trichloroethylene;

Residual levels of volatile organic compounds e t 17 shall not exceed harmful levels.

w l n d 18 D.

The testing required by this section shall be = = 19 performed in a manner consistent with general requirements for a l i a e r 20 the competence of testing and calibration activities, including a t m m 21 sampling, using validated methods to ensure conformity, d r e 22 competence and impartiality to test cannabis products.

c e s k 23 E.

Any pre-sale inspection, testing transfer or e a n b 24 transportation of cannabis products pursuant to this section u [ shall conform to a chain of custody protocol and any other e.220534.3 t- 1729 - STBTC/SB 288 requirements imposed by the commission in accordance with the w l n d 18 Cannabis Regulation Act.

= = 19 a l SECTION 18.17.

[NEW MATERIAL] TESTING CANNABIS PRODUCTS-- i a e r 20 DEPARTMENT OF ENVIRONMENT.-- a t m m 21 A.

A cannabis testing laboratory's testing of d r e 22 cannabis products shall comply with the requirements set forth c e s k 23 in applicable law and rules.

e a n b 24 B.

The commission shall develop rules and u [ procedures to:

.219045.2 - 30 - (1) ensure that testing of cannabis products occurs prior to distribution;

(4) ensure that testing samples are e t 17 transported and stored in a manner that prevents degradation, w l n d 18 contamination and tampering;

= = 19 (5) specify protocols for sample collection a l i a e r 20 that ensure that representative samples have been taken and a t m m 21 that require testing samples be collected by laboratory staff d r e 22 trained in sample collection;

and c e s k 23 (6) require destruction of a harvested batch e a n b 24 of cannabis or of cannabis products if the testing samples from u [ the batch or items indicate noncompliance with applicable e.220534.3 t- 1730 - STBTC/SB 288 health and safety standards promulgated by the commission, w l n d 18 unless remedial measures can bring the cannabis or cannabis = = 19 a l products into compliance with the standards.

i a e r 20 C.

Not later than January 1, 2022, the department a t m m 21 of environment shall identify and designate to the commission d r e 22 acceptable and accredited standards, where necessary to be used c e s k 23 by cannabis testing laboratories.

e a n b 24 SECTION 19.18.

[NEW MATERIAL] ADVERTISING AND MARKETING u [ RESTRICTIONS.--The commission shall promulgate rules that .219045.2 - 31 - explicitly:

e t 17 (3) that depicts consumption by children or w l n d 18 other persons younger than twenty-one years of age;

= = 19 (4) that is designed using cartoon characters a l i a e r 20 or to mimic any other product brand;

a t m m 21 (5) within three hundred feet of a school, d r e 22 church or daycare center;

c e s k 23 (6) that is in public transit vehicles or e a n b 24 stations;

u [ (7) that is in the form of an unsolicited e.220534.3 t- 1731 - STBTC/SB 288 internet pop-up;

or w l n d 18 (8) that is on publicly owned or operated = = 19 a l property;

and i a e r 20 B.

a t m m 21 (1) all advertisements and marketing to d r e 22 accurately and legibly identify the licensee responsible for c e s k 23 its content;

and e a n b 24 (2) print and digital communications u [ advertisements to be placed only where the audience is .219045.2 - 32 - reasonably expected to be twenty-one years of age or older, as determined by reliable, current audience composition data.

SECTION 20.19.

[NEW MATERIAL] CONTRACTS.--A contract related to operation of a license issued pursuant to the Cannabis Regulation Act is enforceable, and a contract entered into by a licensee or a licensee representative for conduct allowed pursuant to a license or entered into by a person who allows e t 17 property to be used by a licensee or a licensee representative w l n d 18 for conduct allowed pursuant to a license shall not be deemed = = 19 unenforceable on the basis that the conduct allowed pursuant to a l i a e r 20 the license is prohibited by federal law.

a t m m 21 SECTION 20.

[NEW MATERIAL] PROVISION OF PROFESSIONAL d r e 22 SERVICES.--A person engaged in a profession subject to state c e s k 23 licensure shall not be subject to disciplinary action because e a n b 24 the person provides professional services or assistance to u [ prospective or licensed cannabis establishments or another .220534.3 - 32 - STBTC/SB 288 person in connection with activity that the person reasonably believes complies with the Cannabis Regulation Act and rules promulgated pursuant to that act.

The provisions of this section shall not apply to an attorney licensed to practice law in this state.

[NEW MATERIAL] PROVISIONPROTECTIONS OFFOR PROFESSIONALTHE SERVICES.--AUSE personOF engagedCANNABIS.--A inperson or a professionlicensee subject to state licensure shall not be subject to disciplinaryarrest, actionprosecution, becausepenalty, thecivil personliability provides professional services or assistancedisciplinary toaction prospectiveby ora licensedbusiness cannabis establishments or anotherprofessional elicensing tentity 17and personshall innot connectionbe withdenied activityany thatright theor personprivilege reasonablysolely wfor lconduct nallowed dpursuant 18to believes complies with the Cannabis Regulation ActAct. and rules = = 19 a l promulgated pursuant to that act.

TheExcept provisionsby ofcourt thisorder, istate aand elocal rlaw 20enforcement sectionagencies shall not applycooperate towith anor attorneyprovide licensedassistance to practicethe lawUnited aStates tgovernment, mor many 21federal agency thereof, in thisenforcing state.the federal Controlled Substances Act solely for conduct that complies with the Cannabis Regulation Act or the Lynn and Erin e t 17 Compassionate Use Act.

The supreme court and any disciplinary w l n d r18 or character and fitness committees established by that court = = 19 are considered business or professional licensing entities for a l i a e 22r SECTION20 22.the purposes of this section.

[NEW MATERIAL] PROTECTIONS FOR THE USE OF c e s k 23 CANNABIS.--A person or a licenseet shallm notm be21 subjectSECTION to22. e a n b 24 arrest, prosecution, penalty, civil liability or disciplinary u [ action by a business or professional licensing entity and shall .219045.2 - 33 - not be denied any right or privilege solely for conduct allowed pursuant to the Cannabis Regulation Act.

Except[NEW byMATERIAL] courtPROTECTIONS order,FROM stated andr locale law22 enforcementDISCRIMINATION agenciesFOR shallTHE notUSE cooperateOF withCANNABIS orOR provideMEDICAL assistanceCANNABIS.-- toc thee Uniteds Statesk government,23 orA. any federal agency thereof, in enforcing the federal Controlled Substances Act solely for conduct that complies with the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act.

TheNo supremeeducational courtinstitution andshall anyrefuse disciplinaryto e a n b 24 enroll or characterotherwise andpenalize fitnessa committeesperson establishedfor byconduct thatallowed courtu are[ consideredpursuant businessto the Cannabis Regulation Act or professionalthe licensingLynn entitiesand forErin .220534.3 - 33 - STBTC/SB 288 Compassionate Use Act, unless failing to do so would cause the purposeseducational ofinstitution thisto section.lose a monetary or licensing-related benefit under federal law or regulation.

B.

A person may prohibit or restrict any of the actions or conduct otherwise allowed under Section 24 of the Cannabis Regulation Act on that person's privately owned property.

C.

A person shall not be denied custody of or visitation or parenting time with a child for conduct allowed under Section 24 of the Cannabis Regulation Act or under the Lynn and Erin Compassionate Use Act, unless the court determines that the person's behavior is contrary to the best interests of the child pursuant to Sections 40-4-9 and 40-4-9.1 NMSA 1978.

[NEW MATERIAL] PROTECTIONS FROM DISCRIMINATION FOR THE USE OF CANNABIS OR MEDICAL CANNABIS.-- A.

No educational institution shall refuse to enroll or otherwise penalize a person for conduct allowed pursuant to the Cannabis Regulation Act or the Lynn and Erin e t 17 Compassionate Use Act, unless failing to do so would cause the w l n d 18 educational institution to lose a monetary or licensing-related = = 19 a l benefit under federal law or regulation.

i a e r 20 B.

A person may prohibit or restrict any of the a t m m 21 actions or conduct otherwise allowed under Section 25 of the d r e 22 Cannabis Regulation Act on that person's privately owned c e s k 23 property.

e a n b 24 C.

A person shall not be denied custody of or u [ visitation or parenting time with a child for conduct allowed .219045.2 - 34 - under Section 25 of the Cannabis Regulation Act or under the Lynn and Erin Compassionate Use Act, unless the court determines that the person's behavior is contrary to the best interests of the child pursuant to Sections 40-4-9 and 40-4-9.1 NMSA 1978.

SECTION 24.

e t 17 (1) restrict an employer's ability to prohibit w l n d 18 or take adverse employment action against an employee for the = = 19 possession or use of intoxicating substances at work during a l i a e r 20 work hours;

a t m m 21 (2) require an employer to commit any act that d r e 22 would cause the employer to be in violation of federal law or c e s k 23 that would result in the loss of a federal contract or federal e a n b 24 funding;

or u [ (3) prevent or infringe upon the rights of an e.220534.3 t- 1734 - STBTC/SB 288 employer to adopt and implement a written zero-tolerance policy w l n d 18 regarding the use of cannabis.

A zero-tolerance policy may = = 19 a l permit the discipline or termination of an employee on the i a e r 20 basis of a positive drug test that indicates any amount of a t m m 21 delta-9-tetrahydrocannabinol or delta-9-tetrahydrocannabinol d r e 22 metabolite.

c e s k 23 B.

Every workplace shall post signs warning of the e a n b 24 potential impairment effects of cannabis, any discipline or u [ penalty an employee may receive for using cannabis while at .219045.2 - 35 - work or for coming to work impaired and a statement that possession or use of cannabis is prohibited pursuant to federal law.

or discriminating against an employee e t 17 in compensation or in terms, conditions or privileges of w l n d 18 employment.

= = 19 SECTION 25.24.

[NEW MATERIAL] PERSONAL USE OF CANNABIS.-- a l i a e r 20 A.

The following conduct is lawful for a person who a t m m 21 is twenty-one years of age or older and shall not constitute d r e 22 grounds for detention, search or arrest of a person, and c e s k 23 cannabis items that relate to the conduct are not contraband or e a n b 24 subject to seizure or forfeiture pursuant to the Controlled u [ Substances Act or the Forfeiture Act;

provided that the person e.220534.3 t- 1735 - STBTC/SB 288 has proof that the cannabis items were purchased from a w l n d 18 licensed dispensary or are authorized pursuant to the medical = = 19 a l cannabis program:

i a e r 20 (1) possessing, using, being under the a t m m 21 influence of, displaying, purchasing, obtaining or transporting d r e 22 not more than two ounces of cannabis or sixteen grams of c e s k 23 cannabis extracts;

e a n b 24 (2) transferring, without financial u [ consideration, to a person who is twenty-one years of age or .219045.2 - 36 - older not more than two ounces of cannabis or sixteen grams of cannabis extracts;

(4) transporting cannabis as described in Paragraph (2) of this subsection when the person is moving the e t 17 person's residence to another location or for purposes of w l n d 18 testing or manufacturing;

= = 19 (5) smoking, ingesting or otherwise consuming a l i a e r 20 cannabis or cannabis items;

a t m m 21 (6) possessing, using, displaying, purchasing, d r e 22 obtaining, manufacturing, transporting or giving away to a c e s k 23 person twenty-one years of age or older cannabis paraphernalia;

e a n b 24 and u [ (7) assisting another person who is twenty-one e.220534.3 t- 1736 - STBTC/SB 288 years of age or older in, or allowing property to be used in, w l n d 18 any of the acts described in Paragraphs (1) through (6) of this = = 19 a l subsection.

i a e r 20 B.

Paragraphs (6) and (7) of Subsection A of this a t m m 21 section meet the requirements of 21 U.S.C.

Section 863(f) by d r e 22 authorizing, under state law, any person in compliance with c e s k 23 this section to manufacture, possess or distribute cannabis e a n b 24 paraphernalia.

u [ SECTION 26.

[NEW MATERIAL] LIMITS ON PERSONAL .219045.2 - 37 - CONSUMPTION--PENALTY.-- A.

Nothing in Section 25 of the Cannabis Regulation Act shall be construed to restrict the ability of an individual or private entity to prohibit conduct otherwise allowed in Section 25 of the Cannabis Regulation Act on the individual's or private entity's privately owned property.

NoParagraphs person(6) shalland smoke(7) cannabisof orSubsection consumeA cannabisof itemsthis insection ameet publicthe place.requirements of 21 U.S.C.

C.Section 863(f) by authorizing, under state law, any person in compliance with this section to manufacture, possess or distribute cannabis paraphernalia.

ASECTION person25. who violates Subsection B of this section shall be subject to a civil penalty of fifty dollars ($50.00).

SECTION[NEW 27.MATERIAL] LIMITS ON PERSONAL CONSUMPTION--PENALTY.-- A.

[NEWNothing MATERIAL]in UNLICENSEDSection SALES24 OFof CANNABIS--the PENALTIES.--Cannabis A.Regulation Act shall be construed to restrict the ability of an individual or private entity to prohibit conduct otherwise allowed in Section 24 of the Cannabis Regulation Act on the individual's or private entity's privately owned property.

ExceptB. as allowed in the Cannabis Regulation Act, the Lynn and Erin Compassionate Use Act or Chapter 76, Article 24 NMSA 1978, it is unlawful for a person without a e t 17 license to intentionally distribute cannabis items.

wNo lperson nshall dsmoke 18cannabis B.or consume e t 17 cannabis items in a public place.

Aw person under eighteen years of age who = = 19 a l violatesn Subsectiond A18 ofC. this section shall:

iA aperson ewho rviolates 20Subsection (1)B forof athis first= violation,= 19 section shall be subject to:to a civil penalty of fifty dollars a l i a e r 20 ($50.00).

a t m m 21 (a)SECTION a26. fine of one hundred dollars d r e 22 ($100);

c[NEW eMATERIAL] sUNLICENSED kSALES 23OF (b)CANNABIS-- attendanced atr ae four-hour22 drugPENALTIES.-- c e as nk b23 24A. education program;

Except as allowed in the Cannabis Regulation e a n b 24 Act, the Lynn and Erin Compassionate Use Act or Chapter 76, u [ (c)Article four24 hoursNMSA of1978, communityit service;is unlawful for a person without a .220534.3 - 37 - STBTC/SB 288 license to intentionally distribute cannabis items.

.219045.2It -is 38unlawful - (2) for a secondperson violation,to besell subjector to:deliver cannabis items from a drive-up window.

(a)B. a fine of two hundred fifty dollars ($250);

A person under eighteen years of age who violates Subsection A of this section shall:

(1) for a first violation, be subject to:

(a) a fine of one hundred dollars ($100);

and(2) (3) for a thirdsecond or subsequent violation, be subject to:

(a) a fine of onetwo thousandhundred fifty dollars ($1,000);($250);

and (c)e nott less17 than(c) onefour hundred hours of community service.service;

C.and w l n d 18 (3) for a third or subsequent violation, be = = 19 subject to:

Aa personl eighteeni yearsa ofe ager or20 older(a) whoa violatesfine Subsection A of thisone sectionthousand isdollars guilty of a e t 17m misdemeanorm and21 shall($1,000); be sentenced pursuant to the provisions w l n d 18 of Section 31-19-1 NMSA 1978.

=d =r 19e 22 (b) attendance at a lfour-hour SECTIONdrug 28.c e s k 23 education program;

[NEW MATERIAL] CANNABIS WITHIN RESTRICTED i a e r 20 AREA--PENALTY.--Except as allowed in the Cannabis Regulation a t m m 21 Act or the Lynn and Erin Compassionate Use Act, a person shall d r e 22 not possess or intentionally distribute any amount of a c e s k 23 cannabis item within three hundred feet of the perimeter of e a n b 24 school(c) groundsnot onless whichthan instructionone ishundred providedhours atof any level u [ fromcommunity kindergartenservice. through twelfth grade, a playground, a child .219045.2 - 39 - care center, a youth center, a public park or a library unless the person is a qualified patient or is in or upon or traveling to or from the grounds of a private residence, as an invitee or resident.

A.220534.3 person- who38 violates- thisSTBTC/SB section288 isC. guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.

SECTIONA 29.person eighteen years of age or older who violates Subsection A of this section is guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.

[NEWSECTION MATERIAL]27. UNLAWFUL POSSESSION OF CANNABIS--PENALTIES.--Except as allowed in the Lynn and Erin Compassionate Use Act:

A.[NEW MATERIAL] CANNABIS WITHIN RESTRICTED AREA--PENALTY.--Except as allowed in the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act, a person shall not possess or intentionally distribute any amount of a cannabis item within three hundred feet of the perimeter of school grounds on which instruction is provided at any level from kindergarten through twelfth grade, a playground, a child care center, a youth center, a public park or a library unless the person is a qualified patient or is in or upon or traveling to or from the grounds of a private residence, as an invitee or resident.

aA person eighteenwho yearsviolates ofthis agesection oris olderguilty of a misdemeanor and youngershall thanbe twenty-onesentenced yearspursuant ofto agethe shallprovisions note possesst cannabis17 items.of Section 31-19-1 NMSA 1978.

w l n d 18 SECTION 28.

[NEW MATERIAL] UNLAWFUL POSSESSION OF = = 19 CANNABIS--PENALTIES.--Except as allowed in the Lynn and Erin a l i a e r 20 Compassionate Use Act:

a t m m 21 A.

a person eighteen years of age or older and d r e 22 younger than twenty-one years of age shall not possess cannabis c e s k 23 items.

A person who violates this subsection shall be subject e a n b 24 to:

u [ (1) a fine of seventy-five dollars ($75.00);

.220534.3 - 39 - STBTC/SB 288 (2) attendance at a four-hour drug education program;

and (3) four hours of community service;

B.

a person younger than eighteen years of age shall not possess cannabis items.

(1) a fine of seventy-fivefifty dollars ($75.00);($50.00);

and e t 17 (3) four hours of community service;

wand lC. n d 18 B.

aor personas youngerallowed thanin eighteenthe yearsCannabis ofRegulation ageAct, =a =person 19twenty-one ayears lof age or older shall not possess cannabis items.containing more than three-tenths percent tetrahydrocannabinol except pursuant to a certificate of purchase issued by a licensed dispensary.

A person who violates this i a e r 20 subsection shall be subject to:

a t m m 21 (1) a fine of fifty dollars ($50.00);

d r e 22 (2) attendance at a four-hour drug education c e s k 23 program;

and e a n b 24 (3) four hours of community service;

and u [ C.

or as allowed in the Cannabis Regulation Act, a .219045.2 - 40 - person twenty-one years of age or older shall not possess cannabis containing more than three-tenths percent tetrahydrocannabinol except pursuant to a certificate of purchase issued by a licensed dispensary.

e t 17 (1) one ounce of cannabis or eight grams of w l n d 18 cannabis extracts or less, shall be subject to a civil penalty = = 19 of five hundred dollars ($500);

a l i a e r 20 (2) more than one ounce of cannabis or eight a t m m 21 grams of cannabis extracts but not more than sixteen ounces of d r e 22 cannabis or one hundred twenty-eight grams of cannabis c e s k 23 extracts, is guilty of a petty misdemeanor and shall be subject e a n b 24 to a fine in an amount not more than five hundred dollars u [ ($500);

or .220534.3 - 40 - STBTC/SB 288 (3) more than sixteen ounces of cannabis or one hundred twenty-eight grams of cannabis extracts, is guilty e t 17 of a fourth degree felony and shall be sentenced to twelve w l n d 18 months imprisonment and subject to a fine of not more than five = = 19 a l thousand dollars ($5,000).

i a e r 20 SECTION 30.29.

[NEW MATERIAL] UNLICENSED MANUFACTURING OF a t m m 21 CANNABIS EXTRACTS--PENALTY.--Except as permitted by the Lynn d r e 22 and Erin Compassionate Use Act, it is unlawful for any person c e s k 23 to use volatile solvents to manufacture cannabis extracts e a n b 24 without a license issued pursuant to the Cannabis Regulation u [ Act or the Lynn and Erin Compassionate Use Act.

A person who .219045.2 - 41 - violates this section shall be subject to a civil penalty of four hundred fifty dollars ($450).

SECTION 31.30.

[NEW MATERIAL] WRITIMPORTS OFAND MANDAMUS.--AnyEXPORTS.-- personA. may commence a legal action for a writ of mandamus to compel the commission to perform its duties pursuant to the Cannabis Regulation Act.

Notwithstanding the provisions any other provision of law, the governor shall enter into agreements with e t 17 other jurisdictions within or outside of the United States for w l n d 18 the purposes of cross-jurisdictional delivery of cannabis items = = 19 between this state and other jurisdictions.

Such agreements a l i a e r 20 shall:

a t m m 21 (1) ensure enforceable public health and d r e 22 safety standards;

c e s k 23 (2) include a system to regulate and track the e a n b 24 interstate or international delivery of cannabis items;

and u [ (3) ensure that any cannabis items delivered .220534.3 - 41 - STBTC/SB 288 into this state, prior to sale to a consumer, are tested, packaged and labeled pursuant to New Mexico statutes and rules.

B.

Notwithstanding any other provision of law and in accordance with the agreement as described in Subsection A of this section:

(1) a licensee permitted to courier cannabis items may deliver cannabis items to a person located in, and authorized to receive cannabis items by, another jurisdiction in the United States or internationally;

and (2) a licensee permitted to receive cannabis items may receive cannabis items from a person located in, and authorized to export cannabis items by, another jurisdiction in the United States or internationally.

C.

This section shall take effect on the earlier date on which:

(1) federal law is amended to allow for the e t 17 interstate or international transfer of cannabis items between w l n d 18 authorized cannabis-related businesses;

or = = 19 (2) the United States department of justice a l i a e r 20 issues an opinion or memorandum allowing or tolerating the a t m m 21 interstate or international transfer of cannabis items between d r e 22 cannabis-related businesses as authorized by state law.

c e s k 23 SECTION 31.

[NEW MATERIAL] INDIAN NATIONS, TRIBES AND e a n b 24 PUEBLOS--INTERGOVERNMENTAL AGREEMENTS.-- u [ A.

The commission may enter into one or more .220534.3 - 42 - STBTC/SB 288 intergovernmental agreements with any tribal government to efficiently coordinate the cross-jurisdictional administration of the laws of this state and the laws of tribal governments relating to the use of cannabis items set forth in the Lynn and Erin Compassionate Use Act and the Cannabis Regulation Act.

The agreements may include, without limitation, provisions relating to:

(1) criminal and civil law enforcement;

(2) regulatory issues relating to the possession, delivery, production, processing or use of cannabis items;

(3) the administration of laws relating to taxation;

(4) any immunity, preemption or conflict of law relating to the possession, delivery, production, processing or use of cannabis items;

and e t 17 (5) the resolution of any disputes between a w l n d 18 tribal government and the state, which may include, without = = 19 limitation, the use of mediation or other nonjudicial a l i a e r 20 processes.

a t m m 21 B.

An agreement entered into pursuant to this d r e 22 section shall:

c e s k 23 (1) provide for the preservation of public e a n b 24 health and safety;

u [ (2) ensure the security of cannabis .220534.3 - 43 - STBTC/SB 288 establishments and the corresponding facilities on tribal land;

(3) establish provisions regulating business involving cannabis that passes between tribal land and nontribal land in New Mexico;

and (4) be negotiated in good faith, which shall respect and protect state and tribal sovereign immunity.

C.

As used in this section, "tribal government" means a federally recognized Indian nation, tribe or pueblo located wholly or partially in the state.

[NEW MATERIAL] WRIT OF MANDAMUS.--Any person may commence a legal action for a writ of mandamus to compel the commission to perform its duties pursuant to the Cannabis Regulation Act.

SECTION 33.

The fund consists of appropriations, gifts, e t 17 grants, donations and fees collected pursuant to the Cannabis w l n d 18 Regulation Act.

Any unexpended or unencumbered balance = = 19 a l remaining at the end of a fiscal year shall revert to the i a e r 20 general fund.

a t m m 21 B.

The commission shall administer the fund, and d r e 22 money in the fund is appropriated to the commission to support c e s k 23 the commission in its duties established in the Cannabis e ta 17n b 24 Regulation Act.

Money from the fund shall not be used for wu l[ n d 18 capital expenditures.

=.220534.3 =- 1944 a- lSTBTC/SB 288 C.

Money in the fund shall be disbursed on warrants i a e r 20 signed by the secretary of finance and administration pursuant a t m m 21 to vouchers signed by the director or the director's authorized d r e 22 representative.

c e s k 23 SECTION 33.

[NEW MATERIAL] EXEMPTION FROM CRIMINAL AND e a n b 24 CIVIL PENALTIES--RESEARCHERS.--A person shall not be subject to u [ arrest or prosecution, penalized in any manner or denied any .219045.2 - 42 - right or privilege solely because the person produced, possessed, distributed, dispensed or purchased cannabis from a person licensed pursuant to the Lynn and Erin Compassionate Use Act or the Cannabis Regulation Act if the person produced, possessed, distributed, dispensed or purchased the cannabis solely for the purpose of research conducted pursuant to the Lynn and Erin Compassionate Use Act or the Cannabis Regulation Act.

[NEW MATERIAL] ROADEXEMPTION SAFETYFROM FUND.--CRIMINAL A.AND CIVIL PENALTIES--RESEARCHERS.--A person shall not be subject to arrest or prosecution, penalized in any manner or denied any right or privilege solely because the person produced, possessed, distributed, dispensed or purchased cannabis from a person licensed pursuant to the Lynn and Erin Compassionate Use Act or the Cannabis Regulation Act if the person produced, possessed, distributed, dispensed or purchased the cannabis solely for the purpose of research conducted pursuant to the Lynn and Erin Compassionate Use Act or the Cannabis Regulation Act.

TheSECTION "road35. safety fund" is created in the state treasury.

The[NEW fundMATERIAL] consistsROAD ofSAFETY moneyFUND.-- transferrede fromt the17 cannabisA. excise tax, appropriations, other money deposited in the fund and money otherwise accruing to the fund.

The department"road of public safety shallfund" administeris thecreated fund, and money in the fundstate isw subjectl ton appropriationd to18 thetreasury. department of public safety for the purposes described in this section.

eThe tfund 17consists Anyof unexpendedmoney ortransferred unencumberedfrom balancethe remaining= at= the19 endcannabis ofexcise wtax, lappropriations, nother dmoney 18deposited in a fiscall yeari shalla note revertr to20 the generalfund and money otherwise accruing to the fund.

MoneyThe in = = 19 a lt them fundm shall21 bedepartment disbursedof onpublic warrantssafety signedshall byadminister the secretaryfund, iand ad r e r22 20money ofin financethe andfund administrationis pursuantsubject to vouchersappropriation signedto bythe adepartment tc me ms 21k the23 secretary of public safety orfor the secretary'spurposes authorizeddescribed din rthis esection. 22 representative.

c e sa kn 23b B.24 Any unexpended or unencumbered balance remaining at the end of u [ a fiscal year shall not revert to the general fund.

Money in .220534.3 - 45 - STBTC/SB 288 the fund isshall subjectbe todisbursed appropriationon warrants signed by ethe asecretary nof bfinance 24and administration pursuant to vouchers signed by the departmentsecretary of public safety for:or the secretary's authorized representative.

uB. [ (1) research to determine whether a driver is .219045.2 - 43 - operating a vehicle while impaired, including impairment by the use of cannabis items;

Money in the fund is subject to appropriation by the department of public safety for:

(1) research to determine whether a driver is operating a vehicle while impaired, including impairment by the use of cannabis items;

e t 17 SECTION 35.36.

[NEW MATERIAL] SHORT TITLE.--Sections 3536 w l n d 18 through 4142 of this act may be cited as the "Cannabis Tax Act".

= = 19 SECTION 36.37.

[NEW MATERIAL] DEFINITIONS.--As used in the a l i a e r 20 Cannabis Tax Act:

a t m m 21 A.

d r e 22 (1) means all parts of the plant Cannabis c e s k 23 sativa Linnaeus, whether growing or not;

the seeds of the e ta 17n b 24 plant;

and wu l[ n d 18 every compound, manufacture, salt, derivative, mixture or =.220534.3 =- 1946 a- lSTBTC/SB 288 preparation of the plant, its seeds or its resin;

and i a e r 20 (2) does not include:

a t m m 21 (a) the mature stalks of the plant;

d r e 22 fiber produced from the stalks;

oil or cake made from the seeds c e s k 23 of the plant;

any other compound, manufacture, salt, e a n b 24 derivative, mixture or preparation of the mature stalks, fiber, u [ oil or cake;

or the sterilized seed of the plant that is .219045.2 - 44 - incapable of germination;

and e t 17 (2) does not include the weight of any other w l n d 18 ingredient combined with cannabis extract to prepare topical or = = 19 oral administrations, food, drink or another product;

a l i a e r 20 C.

"cannabis items" means cannabis, cannabis a t m m 21 products and cannabis extracts;

d r e 22 D.

c e s k 23 (1) means a product that contains cannabis or e ta 17n b 24 cannabis extracts, including edible or topical products that wu l[ n d 18 may also contain other ingredients;

and =.220534.3 =- 1947 a- lSTBTC/SB 288 (2) does not include the weight of any other i a e r 20 ingredient combined with cannabis or cannabis extracts to a t m m 21 prepare topical or oral administrations, food, drink or another d r e 22 product;

and c e s k 23 E.

"department" means the taxation and revenue e a n b 24 department.

u [ SECTION 37.38.

[NEW MATERIAL] CANNABIS EXCISE TAX.-- .219045.2 - 45 - A.

e t 17 C.

w l n d 18 (1) retail sales of medical cannabis products = = 19 sold to a qualified patient or to a primary caregiver who a l i a e r 20 presents a registry identification card issued pursuant to the a t m m 21 Lynn and Erin Compassionate Use Act at the time of the sale;

or d r e 22 (2) receipts of cannabis producers from c e s k 23 selling cannabis wholesale.

e ta 17n b 24 SECTION 38.39.

[NEW MATERIAL] MUNICIPAL CANNABIS TAX.-- wu l[ n d 18 A.

There is imposed an excise tax at a rate of two =.220534.3 =- 1948 a- lSTBTC/SB 288 percent on the sale of cannabis items in the municipality on i a e r 20 which the tax imposed by this section has not been paid.

The a t m m 21 tax imposed pursuant to this section may be referred to as the d r e 22 "municipal cannabis tax".

c e s k 23 B.

The governing body of the municipality may e a n b 24 dedicate the revenue for any municipal purpose.

u [ SECTION 39.40.

[NEW MATERIAL] COUNTY CANNABIS TAX.-- .219045.2 - 46 - A.

SECTION 40.

[NEW MATERIAL] DATE PAYMENT DUE.--The taxes imposed pursuant to the Cannabis Tax Act are to be paid on or before the twenty-fifth day of the month following the month in which the taxable event occurs.

[NEW MATERIAL] INTERPRETATIONDATE OFPAYMENT ACT--DUE.--The ADMINISTRATIONtaxes ANDe ENFORCEMENTt OF17 TAX.--Theimposed departmentpursuant shallto administerthe andCannabis enforceTax theAct collectionare ofto thebe cannabispaid exciseon tax,or municipalw cannabisl taxn andd county18 cannabisbefore taxthe pursuanttwenty-fifth today eof tthe 17month following the Taxmonth Administrationin Act.= = 19 which the taxable event occurs.

wa l ni da 18e r 20 SECTION 42.

A[NEW newMATERIAL] sectionINTERPRETATION OF ACT-- a t m m 21 ADMINISTRATION AND ENFORCEMENT OF TAX.--The department shall d r e 22 administer and enforce the collection of the Taxcannabis Administrationexcise Actc =e =s 19k a23 ltax, ismunicipal enactedcannabis tax and county cannabis tax pursuant to read:e a n b 24 the Tax Administration Act.

iu a[ eSECTION r43. 20 "[NEW MATERIAL] DISTRIBUTION--CANNABIS EXCISE TAX.-- a t m m 21 A.

A distributionnew pursuantsection toof Section 7-1-6.1 NMSA d r e 22 1978 shall be made to the localTax DWIAdministration grantAct fund.220534.3 in- an49 amount- cSTBTC/SB e288 sis kenacted 23 equal to sixread: percent of the net receipts attributable to the e a n b 24 cannabis excise tax.

u"[NEW [MATERIAL] B.DISTRIBUTION--CANNABIS EXCISE TAX.-- A.

A distribution pursuant to Section 7-1-6.1 NMSA .219045.2 - 47 - 1978 shall be made to the roadlocal safetyDWI grant fund in an amount equal to twosix percent of the net receipts attributable to the cannabis excise tax."tax. SECTION 43.

B.

A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the road safety fund in an amount equal to two percent of the net receipts attributable to the cannabis excise tax." SECTION 44.

A transfer pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality for which the department is e t 17 collecting a municipal cannabis tax imposed by that w l n d 18 municipality in an amount, subject to any increase or decrease = = 19 made pursuant to Section 7-1-6.15 NMSA 1978, equal to the net a l i a e r 20 receipts attributable to the municipal cannabis tax.

a t m m 21 B.

A transfer pursuant to Section 7-1-6.1 NMSA 1978 d r e 22 shall be made to each county for which the department is c e s k 23 collecting a county cannabis tax imposed by that county in an e ta 17n b 24 amount, subject to any increase or decrease made pursuant to wu l[ n d 18 Section 7-1-6.15 NMSA 1978, equal to the net receipts =.220534.3 =- 1950 a- lSTBTC/SB 288 attributable to the county cannabis tax." i a e r 20 SECTION 44.45.

Section 7-1-2 NMSA 1978 (being Laws 1965, a t m m 21 Chapter 248, Section 2, as amended by Laws 2019, Chapter 47, d r e 22 Section 1 and by Laws 2019, Chapter 53, Section 10 and also by c e s k 23 Laws 2019, Chapter 270, Section 1) is amended to read:

e a n b 24 "7-1-2.

APPLICABILITY.--The Tax Administration Act u [ applies to and governs:

.219045.2 - 48 - A.

(4) Gross Receipts and Compensating Tax Act, Interstate Telecommunications Gross Receipts Tax Act and Leased e t 17 Vehicle Gross Receipts Tax Act;

w l n d 18 (5) Liquor Excise Tax Act;

= = 19 (6) Local Liquor Excise Tax Act;

a l i a e r 20 (7) any municipal local option gross receipts a t m m 21 tax or municipal compensating tax;

d r e 22 (8) any county local option gross receipts tax c e s k 23 or county compensating tax;

e ta 17n b 24 (9) Special Fuels Supplier Tax Act;

wu l[ n d 18 (10) Gasoline Tax Act;

=.220534.3 =- 1951 a- lSTBTC/SB 288 (11) petroleum products loading fee, which fee i a e r 20 shall be considered a tax for the purpose of the Tax a t m m 21 Administration Act;

d r e 22 (12) Alternative Fuel Tax Act;

c e s k 23 (13) Cigarette Tax Act;

e a n b 24 (14) Estate Tax Act;

u [ (15) Railroad Car Company Tax Act;

.219045.2 - 49 - (16) Investment Credit Act, rural job tax credit, Laboratory Partnership with Small Business Tax Credit Act, Technology Jobs and Research and Development Tax Credit Act, Film Production Tax Credit Act, Affordable Housing Tax Credit Act and high-wage jobs tax credit;

e t 17 (20) Tobacco Products Tax Act;

w l n d 18 (21) the telecommunications relay service = = 19 surcharge imposed by Section 63-9F-11 NMSA 1978, which a l i a e r 20 surcharge shall be considered a tax for the purposes of the Tax a t m m 21 Administration Act;

[and] d r e 22 (22) the Insurance Premium Tax Act;

c e s k 23 (23) the Health Care Quality Surcharge Act;

e ta 17n andb w24 land nu d[ 18 (24) the Cannabis Tax Act;

=.220534.3 =- 1952 a- lSTBTC/SB 288 B.

the administration and enforcement of the i a e r 20 following taxes, surtaxes, advanced payments or tax acts as a t m m 21 they now exist or may hereafter be amended:

d r e 22 (1) Resources Excise Tax Act;

c e s k 23 (2) Severance Tax Act;

e a n b 24 (3) any severance surtax;

u [ (4) Oil and Gas Severance Tax Act;

.219045.2 - 50 - (5) Oil and Gas Conservation Tax Act;

(11) any advance payment required to be made by any act specified in this subsection, which advance payment e t 17 shall be considered a tax for the purposes of the Tax w l n d 18 Administration Act;

= = 19 (12) Enhanced Oil Recovery Act;

a l i a e r 20 (13) Natural Gas and Crude Oil Production a t m m 21 Incentive Act;

and d r e 22 (14) intergovernmental production tax credit c e s k 23 and intergovernmental production equipment tax credit;

e ta 17n b 24 C.

the administration and enforcement of the wu l[ n d 18 following taxes, surcharges, fees or acts as they now exist or =.220534.3 =- 1953 a- lSTBTC/SB 288 may hereafter be amended:

i a e r 20 (1) Weight Distance Tax Act;

a t m m 21 (2) the workers' compensation fee authorized d r e 22 by Section 52-5-19 NMSA 1978, which fee shall be considered a c e s k 23 tax for purposes of the Tax Administration Act;

e a n b 24 (3) Uniform Unclaimed Property Act (1995);

u [ (4) 911 emergency surcharge and the network .219045.2 - 51 - and database surcharge, which surcharges shall be considered taxes for purposes of the Tax Administration Act;

and (7) the gaming tax imposed pursuant to the e t 17 Gaming Control Act;

and w l n d 18 D.

the administration and enforcement of all other = = 19 laws, with respect to which the department is charged with a l i a e r 20 responsibilities pursuant to the Tax Administration Act, but a t m m 21 only to the extent that the other laws do not conflict with the d r e 22 Tax Administration Act." c e s k 23 SECTION 45.46.

Section 7-1-6.15 NMSA 1978 (being Laws 1983, e ta 17n b 24 Chapter 211, Section 20, as amended by Laws 2015, Chapter 89, wu l[ n d 18 Section 1 and by Laws 2015, Chapter 100, Section 1) is amended =.220534.3 =- 1954 a- lSTBTC/SB 288 to read:

i a e r 20 "7-1-6.15.

ADJUSTMENTS OF DISTRIBUTIONS OR TRANSFERS TO a t m m 21 MUNICIPALITIES OR COUNTIES.-- d r e 22 A.

c e s k 23 (1) any distribution to a municipality e a n b 24 pursuant to Section 7-1-6.4, 7-1-6.36 or 7-1-6.46 NMSA 1978;

u [ (2) any transfer to a municipality with .219045.2 - 52 - respect to any local option gross receipts tax or municipal cannabis tax imposed by that municipality;

e t 17 (6) any transfer to a county with respect to w l n d 18 any tax imposed in accordance with the Local Liquor Excise Tax = = 19 Act;

a l i a e r 20 (7) any distribution to a county from the a t m m 21 county government road fund pursuant to Section 7-1-6.26 NMSA d r e 22 1978;

c e s k 23 (8) any distribution to a municipality of e ta 17n b 24 gasoline taxes pursuant to Section 7-1-6.27 NMSA 1978;

and wu l[ n d 18 (9) any distribution to a municipality of =.220534.3 =- 1955 a- lSTBTC/SB 288 compensating taxes pursuant to Section 7-1-6.55 NMSA 1978.

i a e r 20 B.

Before making a distribution or transfer a t m m 21 specified in Subsection A of this section to a municipality or d r e 22 county for the month, amounts comprising the net receipts shall c e s k 23 be segregated into two mutually exclusive categories.

One e a n b 24 category shall be for amounts relating to the current month, u [ and the other category shall be for amounts relating to prior .219045.2 - 53 - periods.

(1) all negative amounts relating to any e t 17 period prior to the three calendar years preceding the year of w l n d 18 the current month, net of any positive amounts in that same = = 19 time period for the same taxpayers to which the negative a l i a e r 20 amounts pertain, shall be excluded from the total relating to a t m m 21 prior periods.

Except as provided in Paragraph (2) of this d r e 22 subsection, the net receipts to be distributed or transferred c e s k 23 to the municipality or county shall be adjusted to equal the e ta 17n b 24 amount for the current month plus the revised total for prior wu l[ n d 18 periods;

and =.220534.3 =- 1956 a- lSTBTC/SB 288 (2) if the revised total for prior periods i a e r 20 determined pursuant to Paragraph (1) of this subsection is a t m m 21 negative and its absolute value exceeds the greater of one d r e 22 hundred dollars ($100) or an amount equal to twenty percent of c e s k 23 the average distribution or transfer amount for that e a n b 24 municipality or county, the revised total for prior periods u [ shall be excluded from the distribution or transfers and the .219045.2 - 54 - net receipts to be distributed or transferred to the municipality or county shall be equal to the amount for the current month.

Prior to or concurrently with the distribution or transfer to the municipality or county of the adjusted net e t 17 receipts, the department shall notify the municipality or w l n d 18 county whose distribution or transfer has been adjusted = = 19 pursuant to Paragraph (2) of Subsection B of this section:

a l i a e r 20 (1) that the department has made such an a t m m 21 adjustment, that the department has determined that a specified d r e 22 amount is recoverable from the municipality or county and that c e s k 23 the department intends to recover that amount from future e ta 17n b 24 distributions or transfers to the municipality or county;

wu l[ n d 18 (2) that the municipality or county has ninety =.220534.3 =- 1957 a- lSTBTC/SB 288 days from the date notice is made to enter into a mutually i a e r 20 agreeable repayment agreement with the department;

a t m m 21 (3) that if the municipality or county takes d r e 22 no action within the ninety-day period, the department will c e s k 23 recover the amount from the next six distributions or transfers e a n b 24 following the expiration of the ninety days;

and u [ (4) that the municipality or county may .219045.2 - 55 - inspect, pursuant to Section 7-1-8.9 NMSA 1978, an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application.

(1) the department may collect the recoverable e t 17 amount by:

w l n d 18 (a) decreasing distributions or = = 19 transfers to the municipality or county in accordance with a a l i a e r 20 repayment agreement entered into with the municipality or a t m m 21 county;

or d r e 22 (b) except as provided in Paragraphs (2) c e s k 23 and (3) of this subsection, if the municipality or county fails e ta 17n b 24 to act within the ninety days, decreasing the amount of the wu l[ n d 18 next six distributions or transfers to the municipality or =.220534.3 =- 1958 a- lSTBTC/SB 288 county following expiration of the ninety-day period in i a e r 20 increments as nearly equal as practicable and sufficient to a t m m 21 recover the amount;

d r e 22 (2) if, pursuant to Subsection B of this c e s k 23 section, the secretary determines that the recoverable amount e a n b 24 is more than fifty percent of the average distribution or u [ transfer of net receipts for that municipality or county, the .219045.2 - 56 - secretary:

and (3) if, after application of a refund claim, audit adjustment, correction of a mistake by the department or e t 17 other adjustment of a prior period, but prior to any recovery w l n d 18 of the department pursuant to this section, the total net = = 19 receipts of a municipality or county for the twelve-month a l i a e r 20 period beginning with the current month are reduced or are a t m m 21 projected to be reduced to less than fifty percent of the d r e 22 average distribution or transfer of net receipts, the secretary c e s k 23 may waive recovery of any portion of the recoverable amount, e ta 17n b 24 subject to approval by the state board of finance.

wu l[ n d 18 F.

No later than ninety days from the date notice =.220534.3 =- 1959 a- lSTBTC/SB 288 pursuant to Subsection D of this section is given, the i a e r 20 department shall provide the municipality or county adequate a t m m 21 opportunity to review an application for a claim for refund d r e 22 that gave rise to the recoverable amount, exclusive of any c e s k 23 amended returns that may be attached to the application, e a n b 24 pursuant to Section 7-1-8.9 NMSA 1978.

u [ G.

On or before September 1 of each year beginning .219045.2 - 57 - in 2016, the secretary shall report to the state board of finance and the legislative finance committee the total recoverable amount waived pursuant to Subparagraph (b) of Paragraph (2) and Paragraph (3) of Subsection E of this section for each municipality and county in the prior fiscal year.

The secretary is authorized to decrease a distribution or transfer to a municipality or county upon being directed to do so by the secretary of finance and administration pursuant to the State Aid Intercept Act or to e t 17 redirect a distribution or transfer to the New Mexico finance w l n d 18 authority pursuant to an ordinance or a resolution passed by = = 19 the county or municipality and a written agreement of the a l i a e r 20 municipality or county and the New Mexico finance authority.

a t m m 21 Upon direction to decrease a distribution or transfer or notice d r e 22 to redirect a distribution or transfer to a municipality or c e s k 23 county, the secretary shall decrease or redirect the next e ta 17n b 24 designated distribution or transfer, and succeeding wu l[ n d 18 distributions or transfers as necessary, by the amount of the =.220534.3 =- 1960 a- lSTBTC/SB 288 state distributions intercept authorized by the secretary of i a e r 20 finance and administration pursuant to the State Aid Intercept a t m m 21 Act or by the amount of the state distribution intercept d r e 22 authorized pursuant to an ordinance or a resolution passed by c e s k 23 the county or municipality and a written agreement with the New e a n b 24 Mexico finance authority.

The secretary shall transfer the u [ state distributions intercept amount to the municipal or county .219045.2 - 58 - treasurer or other person designated by the secretary of finance and administration or to the New Mexico finance authority pursuant to written agreement to pay the debt service to avoid default on qualified local revenue bonds or meet other local revenue bond, loan or other debt obligations of the municipality or county to the New Mexico finance authority.

(1) prior to an adjustment of a distribution e t 17 or transfer of net receipts creating a recoverable amount owed w l n d 18 to the department takes precedence over any collection of any = = 19 recoverable amount pursuant to Paragraph (2) of Subsection B of a l i a e r 20 this section, which may be made only from the net amount of the a t m m 21 distribution or transfer remaining after application of the d r e 22 decrease or redirection pursuant to this subsection;

and c e s k 23 (2) after an adjustment of a distribution or e ta 17n b 24 transfer of net receipts creating a recoverable amount owed to wu l[ n d 18 the department shall be subordinate to any collection of any =.220534.3 =- 1961 a- lSTBTC/SB 288 recoverable amount pursuant to Paragraph (2) of Subsection B of i a e r 20 this section.

a t m m 21 I.

Upon the direction of the secretary of finance d r e 22 and administration pursuant to Section 9-6-5.2 NMSA 1978, the c e s k 23 secretary shall temporarily withhold the balance of a e a n b 24 distribution to a municipality or county, net of any decrease u [ or redirected amount pursuant to Subsection H of this section .219045.2 - 59 - and any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, that has failed to submit an audit report required by the Audit Act or a financial report required by Subsection F of Section 6-6-2 NMSA 1978.

A distribution withheld pursuant to this subsection shall remain in the tax administration suspense fund e t 17 until distributed to the municipality or county and shall not w l n d 18 be distributed to the general fund.

An amount withheld = = 19 pursuant to this subsection shall be distributed to the a l i a e r 20 municipality or county upon direction of the secretary of a t m m 21 finance and administration.

d r e 22 J.

c e s k 23 (1) "amounts relating to the current month" e ta 17n b 24 means any amounts included in the net receipts of the current wu l[ n d 18 month that represent payment of tax due for the current month, =.220534.3 =- 1962 a- lSTBTC/SB 288 correction of amounts processed in the current month that i a e r 20 relate to the current month or that otherwise relate to a t m m 21 obligations due for the current month;

d r e 22 (2) "amounts relating to prior periods" means c e s k 23 any amounts processed during the current month that adjust e a n b 24 amounts processed in a period or periods prior to the current u [ month regardless of whether the adjustment is a correction of a .219045.2 - 60 - department error or due to the filing of amended returns, payment of department-issued assessments, filing or approval of claims for refund, audit adjustments or other cause;

(a) the annual average of the total amount distributed or transferred to a municipality or county e t 17 in each of the three twelve-month periods preceding the current w l n d 18 month;

= = 19 (b) if a distribution or transfer to a a l i a e r 20 municipality or county has been made for less than three years, a t m m 21 the total amount distributed or transferred in the year d r e 22 preceding the current month;

or c e s k 23 (c) if a municipality or county has not e ta 17n b 24 received distributions or transfers of net receipts for twelve wu l[ n d 18 or more months, the monthly average of net receipts distributed =.220534.3 =- 1963 a- lSTBTC/SB 288 or transferred to the municipality or county preceding the i a e r 20 current month multiplied by twelve;

a t m m 21 (4) "current month" means the month for which d r e 22 the distribution or transfer is being prepared;

and c e s k 23 (5) "repayment agreement" means an agreement e a n b 24 between the department and a municipality or county under which u [ the municipality or county agrees to allow the department to .219045.2 - 61 - recover an amount determined pursuant to Paragraph (2) of Subsection B of this section by decreasing distributions or transfers to the municipality or county for one or more months beginning with the distribution or transfer to be made with respect to a designated month.

No interest shall be charged." SECTION 46.47.

e t 17 A.

"adjusted gross income" means adjusted gross w l n d 18 income as defined in Section 62 of the Internal Revenue Code, = = 19 as that section may be amended or renumbered;

a l i a e r 20 B.

a t m m 21 (1) means, for estates and trusts, that part d r e 22 of the estate's or trust's income defined as taxable income and c e s k 23 upon which the federal income tax is calculated in the Internal e ta 17n b 24 Revenue Code for income tax purposes plus, for taxable years wu l[ n d 18 beginning on or after January 1, 1991, the amount of the net =.220534.3 =- 1964 a- lSTBTC/SB 288 operating loss deduction allowed by Section 172(a) of the i a e r 20 Internal Revenue Code, as that section may be amended or a t m m 21 renumbered, and taken by the taxpayer for that year;

d r e 22 (2) means, for taxpayers other than estates or c e s k 23 trusts, that part of the taxpayer's income defined as adjusted e a n b 24 gross income plus, for taxable years beginning on or after u [ January 1, 1991, the amount of the net operating loss deduction .219045.2 - 62 - allowed by Section 172(a) of the Internal Revenue Code, as that section may be amended or renumbered, and taken by the taxpayer for that year;

(3) includes, for all taxpayers, any other income of the taxpayer not included in adjusted gross income but upon which a federal tax is calculated pursuant to the Internal Revenue Code for income tax purposes, except amounts for which a calculation of tax is made pursuant to Section 55 of the Internal Revenue Code, as that section may be amended or e t 17 renumbered;

"base income" also includes interest received on a w l n d 18 state or local bond;

[and] = = 19 (4) includes, for all taxpayers, an amount a l i a e r 20 deducted pursuant to Section 7-2-32 NMSA 1978 in a prior a t m m 21 taxable year if:

d r e 22 (a) such amount is transferred to c e s k 23 another qualified tuition program, as defined in Section 529 of e ta 17n b 24 the Internal Revenue Code, not authorized in the Education wu l[ n d 18 Trust Act;

or =.220534.3 =- 1965 a- lSTBTC/SB 288 (b) a distribution or refund is made for i a e r 20 any reason other than:

1) to pay for qualified higher a t m m 21 education expenses, as defined pursuant to Section 529 of the d r e 22 Internal Revenue Code;

or 2) upon the beneficiary's death, c e s k 23 disability or receipt of a scholarship;

and e a n b 24 (5) excludes, for taxpayers who conduct lawful u [ businesses pursuant to the laws of the state, subtracting an .219045.2 - 63 - amount equal to any expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed by Section 280E of the Internal Revenue Code, as that section may be amended or renumbered;

"department" means the taxation and revenue department, the secretary or any employee of the department e t 17 exercising authority lawfully delegated to that employee by the w l n d 18 secretary;

= = 19 E.

"fiduciary" means a guardian, trustee, executor, a l i a e r 20 administrator, committee, conservator, receiver, individual or a t m m 21 corporation acting in any fiduciary capacity;

d r e 22 F.