SB 402 — Creates the Cannabis Mentorship Pilot Program. (BDR 56-1064)

REQUIRES TWO-THIRDS MAJORITY VOTE EXEMPT (§§ 8, 9, 14) (Reprinted with amendments adopted on April 19, 2023) FIRST REPRINT S.B.

LegislativeLegExisting Counsel’slaw Digest:provides for the licensure and regulation of persons and establishments involved in the cannabis industry in this State by the Cannabis Compliance Board.

Existing law provides for the licensure and regulation of persons and establishments involved in the cannabis industry in this State by the Cannabis Compliance Board.

Section 21 of this bill makes a conforming change to reflect the addition of the provisions of section- 14.*SB402_R1* – 2 – conditionally approved to enter into a written mentorship agreement with a is proposed sponsor, which must be approved by the Board for participation in the Program.

Section 9 of this bill requires an applicant whose application is conditionally - *SB402* – 2 – which must be approved by the Board for participation in the Program.

sponsor, Section 10 of this bill provides that a sponsor is not subject to disciplinary action for any violation of the provisions of existing law governing cannabis that is committed by a participant during the mentorship period.

If, at the terminationconclusion of the mentorship period, a participant has satisfied the goals, benchmarks and performance metrics for the Program established by the Board by regulation, participantsection has11 successfullyrequires completedthe Board to issue the Program.antparticipant a certificate indicating that the ExistingparExisting law sets forth various requirements for the issuance of an adult-use cannabis establishment license.

Section 12 requires the applications for such licenses to be submitted and the licenses to be issued in accordance with the issuanceprocedures and requirements set forth under existing law for this bill provides an exception from provisions prohibiting the Board fromn 13 of anyaccepting otherapplications adult-useto operate a cannabis establishment license.for more than 10 business days in any 1 year for the acceptance of applications pursuant to section 12.

SectionExisting 13law ofimposes thisa bill10 providespercent anexcise exceptiontax fromon provisionseach prohibitingretail thesale Boardof fromcannabis acceptingor applicationscannabis toproducts operateby aan adult-use cannabis establishmentretail forstore moreor thancannabis 10consumption businesslounge daysand ina any15 1percent yearexcise fortax theon acceptanceeach wholesale sale of applicationscannabis pursuantby a medical cannabis cultivation facility or an adult-use cannabis cultivation facility to sectionanother 12.cannabis establishment.

Existing(NRS law372A.290) imposesSection a16 10 percent excise tax on each retail sale of cannabisthis orbill cannabisauthorizes products by an adult-use cannabis retail store or cannabis consumption lounge and a 15 percent excise tax on each wholesale sale of cannabis by a medical cannabis cultivation facility or an adult-use cannabis cultivation facility to another sponsor in the Program to apply for a transferable tax credit that may be applied to the excise taxes on cannabis.

Section 16 authorizes such an application to be made:made:o (1) at the commencement of the mentorship period in the amount equal to the costs of employing a participant for 2 years;

(1)and (2) at the commencementconclusion of the mentorship periodperiod, in the amount equalof to3 thepercent costs of employingthe atax participantowed for 2the years;1 year after the conclusion of the mentorship period.

and (2) at the termination of the mentorship period, in the amount of 3 percent of the tax owed for the 1 year after the termination of the mentorship period.

Under section 16, the amount of the transferable tax credits that the Board is authorized to approve in any fiscal year must not exceed $10,000,000 for the receivedduration transferable tax credits pursuant to section 16 to repay to the Department of Taxation any portion of the transferable4-year taxProgram. credits to which the person is not entitled if the person becomes ineligible for the tax credits after receiving the tax credits.

Section 17 of this bill requires a person who has of Taxation any portion of the transferable tax credits to which the person is nott entitled if the person becomes ineligible for the tax credits after receiving the tax credits.

Sections 19 and 20 of this bill make conforming changes to indicatemake theexisting properdefinitions placementrelated to the taxation of cannabis apply to sections 16-18.

- *SB402**SB402_R1* – 3 – THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

“Mentorship period” means the period commencing on the date a participant begins his or her employment for the sponsor with whom the participant has been placed under the Program and ending on the date on which thatthe employmentmentorship terminates,is completed, as set forth in the written mentorship agreement approved by the Board pursuant to section 9 of this act.

- *SB402**SB402_R1* – 4 – 4.

(a) Establish criteria to be used by the Board for determining whether an applicant is eligible to participate in the Program pursuant to subsection 3;3, which must, to the extent applicable, be the same criteria used by the Board for determining whether an applicant for the issuance or renewal of an adult-use cannabis establishment license for an independent cannabis consumption lounge qualifies as a social equity applicant pursuant to NRS 678B.323;

- *SB402_R1* – 5 – 2.

- *SB402* – 5 – (a) The date on which the applicant will commence employment with the proposed sponsor and the date on which the employmentmentorship will terminate,be completed, the duration of which must be 2 years;

A(Deleted sponsor is not subject to disciplinary action for any violation of the provisions of this title or the regulations adopted pursuant thereto committed by aamendment.) participantSec. during the mentorship period.

Sec.

If, at the terminationconclusion of the mentorship period, a participant has met the goals, benchmarks and performance metrics established by the Board by regulation to determine whether a participant has successfully completed the Program, the Board shall issue to the participant a certificate indicating that the participant has successfully completed the Program.

- *SB402_R1* – 6 – Sec.

Not later than October 1, 2027, the Board shall, for a period of 10 business days, accept applications for the issuance of an adult-use cannabis establishment license for a cannabis production facility from participants who have been - *SB402* – 6 – issued a certificate pursuant to section 11 of this act.

For the initial issuance of a medical cannabis establishment license for a medical cannabis dispensary...............................................................$30,000 For the renewal of a medical cannabis establishment license for a medical cannabis dispensary...................................................................5,000 For the initial issuance of a medical cannabis establishment license for a medical cannabis cultivation facility ......................................................3,000 For the renewal of a medical cannabis establishment license for a medical cannabis cultivation facility ......................................................1,000 For the initial issuance of a medical cannabis establishment license for a medical cannabis production facility......................................................3,000 - *SB402_R1* – 7 – For the renewal of a medical cannabis establishment license for a medical cannabis production facility......................................................1,000facility....................................................$1,000 For the initial issuance of a medical cannabis establishment license for a medical cannabis independent testing laboratory...................................5,000 - *SB402* – 7 – For the renewal of a medical cannabis establishment license for a medical cannabis independent testing laboratory.................................$3,000laboratory...................................3,000 For the initial issuance of an adult-use cannabis establishment license for an adult-use cannabis retail store..................................................20,000 For the renewal of an adult-use cannabis establishment license for an adult-use cannabis retail store....................................................6,600 For the initial issuance of an adult-use cannabis establishment license for an adult-use cannabis cultivation facility .....................................30,000 For the renewal of an adult-use cannabis establishment license for an adult-use cannabis cultivation facility .....................................10,000 For the initial issuance of an adult-use cannabis establishment license for an adult-use cannabis production facility.....................................10,000 For the renewal of an adult-use cannabis establishment license for an adult-use cannabis production facility.......................................3,300 For the initial issuance of an adult-use cannabis establishment license for an adult-use cannabis independent testing laboratory..................15,000 For the renewal of an adult-use cannabis establishment license for an adult-use cannabis independent testing laboratory....................5,000 For the initial issuance of an adult-use cannabis establishment license for a retail cannabis consumption lounge.................................................10,000 For the renewal of an adult-use cannabis establishment license for a retail cannabis consumption lounge.................................................10,000 For the initial issuance of an adult-use cannabis establishment license for an independent cannabis consumption lounge ..................................10,000 For the renewal of an adult-use cannabis establishment license for an independent cannabis consumption lounge ..................................10,000 - *SB402_R1* – 8 – For the initial issuance of an adult-use cannabis establishment license for an adult-use cannabis distributor..................................................15,000distributor................................................$15,000 For the renewal of an adult-use cannabis establishment license for an adult-use cannabis distributor....................................................5,000 - *SB402* – 8 – For each person identified in an application for the initial issuance of a cannabis establishment agent registration card..........................$150card............................150 For each person identified in an application for the renewal of a cannabis establishment agent registration card.............................................................150 8 2.

and - *SB402_R1* – 9 – (b) If any excess revenue remains after paying the costs described in paragraph (a), such excess revenue must be paid over to the State Treasurer to be deposited to the credit of the State Education Fund.

- *SB402* – 9 – Sec.

(b) At the terminationconclusion of the mentorship period, in the amount of 3 percent of the tax owed for the 1 year after the terminationconclusion of the mentorship period.

(a) If approval of the application would cause the total amount of transferable tax credits approved pursuant to subsection 2 for a fiscal year to exceed the sum of $10,00,000.$10,000,000.

- *SB402_R1* – 10 – 6.

A person who is found to have submitted any false statement, representation or certification in any document - *SB402* – 10 – submitted for the purpose of obtaining transferable tax credits or who otherwise becomes ineligible for transferable tax credits after receiving the transferable tax credits pursuant to section 16 of this act shall repay to the Department any portion of the transferable tax credits to which the person is not entitled.

(b) Preserve those records for 4 years or until any litigation or prosecution pursuant to NRS 372A.200 to 372A.380, inclusive, and - *SB402_R1* – 11 – sections 16, 17 and 18 of this act is finally determined, whichever is longer;

- *SB402* – 11 – 2.

- *SB402_R1* – 12 – (n) The proceeds of the tax imposed pursuant to subsection 3 of NRS 372A.290;

- *SB402* – 12 – (p) The money identified in subsection 5 of NRS 445B.640;

- *SB402_R1* – 13 – regulations required by section 7 of this act on or before May 31, 2024.

23.