AB 203 — Revises provisions relating to cannabis. (BDR 56-134)

- *AB203* – 4 – THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Chapter 678A of NRS is hereby amended by adding thereto athe newprovisions sectionset toforth read as follows:sections 1.3 and 1.7 of this act.

1.

The Social Equity Liaison is hereby created within the Board.

2.

The Executive Director shall appoint a person to serve in the position of Social Equity Liaison.

The Social Equity Liaison is in the unclassified service of the State and serves at the pleasure of the Executive Director.

3.

The person appointed pursuant to subsection 2 must be knowledgeable about issues concerning social equity in the cannabis industry.

4.

The Social Equity Liaison shall:

(a) Conduct community outreach and provide information concerning social equity in the cannabis industry to members of the Board and the public;

(b) Respond to questions from members of the Board and the public concerning issues relating to social equity in the cannabis industry;

and (c) Perform any other duties specified by the Executive Director.

5.

The Board shall post contact information for the Social Equity Liaison on the Internet website of the Board.

1.3.

“Label” means written or printed material affixed to or included with cannabis or a cannabis product to provide identification or other information.

Sec.

1.5.

“Packaging” means the immediate, consumer- facing wrapper or container in which cannabis or a cannabis product is packaged.

Sec.

1.7.

NRS 678A.010 is hereby amended to read as follows:

678A.010 As used in this title, unless the context otherwise requires, the words and terms defined in NRS 678A.020 to - *AB203_R1* – 4 – 678A.240, inclusive, and sections 1.3 and 1.7 of this act have the meanings ascribed to them in those sections.

Sec.

(b) Establishing such education, outreach, investigative and enforcement mechanisms as the Board deems necessary to ensure the compliance of a licensee or registrant with the provisions of this title.

- *AB203* – 5 – (2) A system to educate and advise licensees and registrants on compliance with the provisions of this title which may serve as an alternative to disciplinary action;

- *AB203_R1* – 5 – (g) Provisions governing the sales of products and commodities made from hemp, as defined in NRS 557.160, or containing cannabidiol by cannabis establishments.

Such requirements must not requirerequire: any package of cannabis or cannabis products which is sold at wholesale to contain any label other than a label necessary for the functionality of any computer software used for the seed- to-sale tracking of cannabis adopted by the Board.

(1) Any package of cannabis or cannabis products which is sold at wholesale to contain any label or tag other than a label or tag necessary for the functionality of any computer software used for the seed-to-sale tracking of cannabis adopted by the Board.

(2) A cannabis establishment to include any information on the label for cannabis or a cannabis product that is already included on the packaging of the cannabis or cannabis product.

(a) Establish penalties to be imposed for unlicensed cannabis activities, which may include, without limitation, the issuance of a - *AB203* – 6 – cease and desist order or citation, the imposition of an administrative fine or civil penalty and other similar penalties.

and - *AB203_R1* – 6 – (c) Satisfies requirements for the number of employees and annual gross revenue established by the Board by regulation.

(a) WithinOn 1,000the feetproperty of a public or private school that provides formal education traditionally associated with preschool or kindergarten through grade 12;

(b) WithinOn 300the feetproperty of a community facility;

or (c) WithinOn 300the feetproperty of an establishmentairport; that holds a nonrestricted gaming license described in subsection 1 or 2 of NRS 463.0177.

or (d) Except for a delivery conducted at an authorized private residence, within 1,500 feet of an establishment that holds a nonrestricted gaming license described in subsection 1 or 2 of NRS 463.0177.

- *AB203* – 7 – 3.

For the purposes of paragraph (d) of subsection 1, the distance must be measured in a straight line from the locationclosest points of the property line of the property at which the delivery of cannabis or a cannabis productproducts is transferredcompleted toand the consumerproperty toline of the closestestablishment pointthat ofholds thea propertynonrestricted linegaming oflicense adescribed school,in communitysubsection facility1 or gaming2 establishment.of NRS 463.0177.

(a) “Community“Authorized facility”private hasresidence” themeans meaninga ascribedresidential tounit itthat inis NRSnot: 678B.250.

(b)(1) “PrivateConnected, residence”rented, includes,leased withoutor limitation:adjacent to, leased by or otherwise located in the same building as an establishment that holds a nonrestricted gaming license described in subsection 1 or 2 of NRS 463.0177;

(1)or A(2) residentialOwned, unit,in aswhole definedor in NRSpart, 244.353535,operated, thatrented, isleased rentedor formanaged theby, purposesleased ofto transientor lodging,managed asfor: defined in NRS 244.35354.

(I) The holder of a nonrestricted restricted gaming license described in subsection 1 or 2 of NRS 463.0177 or the affiliate, as defined in NRS 78.412, of such a person;

or - *AB203_R1* – 7 – (II) A person who has been licensed, registered, found suitable or received a preliminary finding of suitability by the Nevada Gaming Commission.

(b) “Community facility” has the meaning ascribed to it in NRS 678B.250.

(c) “Private residence” includes, without limitation:

(1) A residential unit that is rented for the purposes of transient lodging, as defined in NRS 244.35354.

(d) “Residential unit” has the meaning ascribed to it in NRS 244.353535.

EachIf owner,the officerBoard andapproves board member of a joint-venture businessagreement andentered eachinto personpursuant whoto volunteerssubsection or1, worksthe atcannabis cultivation facility or contractscannabis toproduction providefacility laborshall fornotify the joint-venturelocal businessgovernmental mustjurisdiction obtainin andwhich maintainthe afacility cannabisis establishmentlocated agentof registrationthe card.approval.

Each owner, officer and board member of a joint-venture business and each person who volunteers or works at or contracts to provide labor for the joint-venture business must obtain and maintain a cannabis establishment agent registration card.

5.

A joint-venture business shall comply with all provisions of this title and the regulations adopted pursuant - *AB203_R1* – 8 – thereto applicable to a cannabis cultivation facility or cannabis production facility, as applicable.

- *AB203* – 8 – 5.

All operations of a joint-venture business must be conducted on the premises of the cannabis cultivation facility or cannabis production facility that is a party to the joint-venture agreement.

AAll cannabisoperations cultivationof facility or cannabis production facility that enters into a joint-venture agreementbusiness pursuantmust tobe thisconducted sectionon isthe subjectpremises to disciplinary action for any violation of the provisionscannabis ofcultivation thisfacility title or thecannabis regulationsproduction adoptedfacility pursuantthat theretois committeda byparty to the joint-venture business.agreement.

Such adverse effects may - *AB203* – 9 – include, without limitation, adverse effects on an owner or officer of the proposed joint-venture business.

- *AB203_R1* – 9 – Sec.

- *AB203* – 10 – (IV) Evidence that the applicant owns the property on which the proposed medical cannabis establishment will be located - *AB203_R1* – 10 – or has the written permission of the property owner to operate the proposed medical cannabis establishment on that property;

- *AB203* – 11 – (3) Previously had a cannabis establishment agent registration card for a cannabis executive revoked;

or - *AB203_R1* – 11 – (4) Previously had a cannabis establishment agent registration card for a cannabis receiver revoked;

- *AB203**AB203_R1* – 12 – Sec.

(IV) Evidence that the applicant owns the property on which the proposed adult-use cannabis establishment will be located - *AB203**AB203_R1* – 13 – or has the written permission of the property owner to operate the proposed adult-use cannabis establishment on that property;

- *AB203**AB203_R1* – 14 – 4.

- *AB203**AB203_R1* – 15 – (c) A cannabis establishment agent registration card for a cannabis receiver.

(1) As cannabis with the words “THIS PRODUCT CONTAINS CANNABIS” in bold type;type .

and[; (2) As required by the provisions of this chapter and chapters 678C and 678D of NRS.

(b)and] AreThe notprovisions presented in packaging that contains an image of athis cartoonsubparagraph character,do mascot,not actionapply figure,if balloonthose orwords toy,in exceptbold thattype -are *AB203*included –on 16 – such an item may appear in the logopackaging of the cannabis production facility which produced the product.

(2) As required by the provisions of this chapter and chapters 678C and 678D of NRS.

- *AB203_R1* – 16 – (b) Are not presented in packaging that contains an image of a cartoon character, mascot, action figure, balloon or toy, except that such an item may appear in the logo of the cannabis production facility which produced the product.

(f) Are labeled in a manner or presented in packaging which indicates the amount of THC in the product, measured in milligrams, and includes a statement that the product contains cannabis and its potency was tested with an allowable variance of the amount determined by the Board by regulation.

(h) Are labeled with:with [:] or presented in packaging that includes:

- *AB203_R1* – 17 – (d) Package all cannabis products produced by the cannabis production facility on the premises of the cannabis production facility.

- *AB203* – 17 – 4.

- *AB203_R1* – 18 – 7.

If the health authority, as defined in NRS 446.050, where a cannabis production facility, cannabis sales facility or cannabis - *AB203* – 18 – consumption lounge which sells edible cannabis products is located requires persons who handle food at a food establishment to obtain certification, the cannabis production facility, cannabis sales facility or cannabis consumption lounge shall ensure that at least one employee maintains such certification.

A cannabis production facility may produce and sell to a cannabis sales facility a non-infused pre-roll.

11.

[11.]11. 12.

- *AB203_R1* – 19 – (2) On or inside of a motor vehicle used for public transportation or any shelter for public transportation;

- *AB203* – 19 – (3) At a sports event to which persons who are less than 21 years of age are allowed entry;

and (2) Except as otherwise provided in subsection [12,]12, 13, the adult-useadult- use cannabis establishment license number or medical cannabis establishment license number of the cannabis establishment or any other unique identifier assigned to the cannabis establishment by the Board.

[12.]12. 13.

A cannabis establishment that holds more than one license may satisfy the requirement set forth in subparagraph (2) of paragraph (f) of subsection [11]11 12 if the cannabis establishment includes in all advertising conducted by the cannabis establishment:

[13.]13. 14.

Nothing in subsection [11]11 12 shall be construed to prohibit a local government, pursuant to chapter 244, 268 or 278 of NRS, from adopting an ordinance for the regulation of advertising relating to cannabis which is more restrictive than the provisions of subsection [11]11 12 relating to:

and - *AB203_R1* – 20 – (d) The content of any advertisement used by a cannabis establishment if the ordinance sets forth specific prohibited content for such an advertisement.

-14. *AB203* – 20 – [14.] 15.

[15.]15. 16.

[16.]16. 17.

In addition to any other penalties provided for by law, the Board may impose a civil penalty upon a cannabis establishment that violates the provisions of subsection [11]11 12 or [14]14 15 as follows:

[17.]17. 18.

As used in this sectionsection, [,“motor “motor]vehicle :used for public transportation” does not include a taxicab, as defined in NRS 706.124.

(a) “Motor vehicle used for public transportation” does not include a taxicab, as defined in NRS 706.124.

(b) “Non-infused pre-roll” means an individual cannabis cigarette or joint that has not been infused with concentrated cannabis.

- *AB203**AB203_R1* – 21 – [(a)] (1) The manner of protecting against diversion and theft without imposing an undue burden on cannabis establishments or compromising the confidentiality of consumers and holders of registry identification cards and letters of approval, as those terms are defined in NRS 678C.080 and 678C.070, respectively;

[(d)] (4) Provisions for the security of cannabis establishments, includingincluding, without limitation, requirements for the protection by a fully operational security alarm system of each cannabis establishment;

- *AB203**AB203_R1* – 22 – [9.] (i) Allow for any record relating to the delivery of cannabis or cannabis products that is required to be kept by a cannabis establishment to be created and maintained in an electronic format;

(c) If the Board requires a cannabis establishment to conduct a quarterly inventory, allow any employeeagent of the cannabis establishment who is not involved in the regular management of the inventory of the cannabis establishment to conduct the quarterly inventory.

Sec.3.

For the purposes of paragraph (c) of subsection 2, an agent of a cannabis establishment is involved in the regular management of the inventory of the cannabis establishment if the agent satisfies all of the following:

(a) The agent is responsible for the oversight of inventory of the cannabis establishment;

(b) The agent has been designated as an inventory agent in any computer software used for the seed-to-sale tracking of cannabis and cannabis products adopted by the Board;

and (c) The agent performs daily or routine tasks related to the inventory of the cannabis establishment in the inventory control system of the cannabis establishment.

- *AB203_R1* – 23 – Sec.

Except as otherwise provided in this section and NRS 678C.300, a person who holds a valid registry identification - *AB203* – 23 – card issued to the person pursuant to NRS 678C.230 or 678C.270 is exempt from state prosecution for:

and - *AB203_R1* – 24 – (3) A maximum allowable quantity of cannabis products as established by regulation of the Board.

- *AB203* – 24 – 5.

- *AB203_R1* – 25 – (a) The person who holds the registry identification card was cultivating, growing or producing cannabis in accordance with state law on or before July 1, 2013;

- *AB203* – 25 – 7.

and (c) Return for a refund cannabis, medical edible cannabis products or medical cannabis-infused products to the medical cannabis establishment from which the cannabis, medical edible - *AB203_R1* – 26 – cannabis products or medical cannabis-infused products were acquired.

A patient who holds a valid registry identification card, and the designated primary caregiver of such a patient, or the designated primary caregiver of a person who holds a letter of approval may - *AB203* – 26 – sell usable cannabis to a medical cannabis dispensary one time and may sell cannabis plants to a cultivation facility one time.

- *AB203_R1* – 27 – (a) The weight, concentration and content of THC in all cannabis and cannabis products that the dispensary sells is clearly and accurately stated on the product sold.

A medical cannabis dispensary may, but is not required to, track the purchases of cannabis for medical purposes by any person - *AB203* – 27 – to ensure that the person does not exceed the legal limits on the possession of cannabis for medical purposes, as set forth in NRS 678C.200.

(b) The third party or intermediary business does not advertise that it sells, offers to sell or appears to sell cannabis or cannabis - *AB203_R1* – 28 – products or allows the submission of an order for cannabis or cannabis products;

The fact that a person possesses a registry identification card or letter of approval issued to the person by the Division or its designee pursuant to NRS 678C.230 or 678C.270, a medical cannabis establishment license issued to the person by the Board or its designee pursuant to NRS 678B.210, a cannabis establishment agent registration card issued to the person by the Board or its designee pursuant to NRS 678B.340, a cannabis establishment agent registration card for a cannabis executive issued to the person by the Board or its designee pursuant to NRS 678B.350 or a cannabis establishment agent registration card for a cannabis receiver issued to the person by the Board pursuant to - *AB203* – 28 – NRS 678B.355 or has entered into a joint-venture agreement approved by the Board pursuant to section 5 of this act does not, alone:

- *AB203_R1* – 29 – Sec.

In addition to the provisions of subsections 1 and 5, no person may be subject to state prosecution for constructive - *AB203* – 29 – possession, conspiracy or any other criminal offense solely for being in the presence or vicinity of the adult use of cannabis in accordance with the provisions of this title.

- *AB203_R1* – 30 – (f) Delivers 2.5 ounces or less of usable cannabis or one-fourth of an ounce or less of concentrated cannabis without remuneration to a person who is 21 years of age or older so long as such delivery is not advertised or promoted to the public;

A person who holds an adult-use cannabis establishment license issued to the person pursuant to NRS 678B.250, a cannabis establishment agent registration card issued to the person pursuant to NRS 678B.340, a cannabis establishment agent registration card for a cannabis executive issued to the person pursuant to NRS 678B.350 or a cannabis establishment agent registration card for a - *AB203* – 30 – cannabis receiver issued to the person pursuant to NRS 678B.355, or who has entered into a joint-venture agreement approved by the Board pursuant to section 5 of this act, and confines his or her activities to those authorized by this title, and the regulations adopted by the Board pursuant thereto, is exempt from state prosecution for:

[1.] (a) At any time after a substance which is alleged to be marijuana is seized from a defendant by a peace officer, the law enforcement agency of which the officer is a member may, without the prior approval of the district court in the county in which the - *AB203_R1* – 31 – defendant is charged, destroy any amount of the substance that exceeds 10 pounds.

A sign which clearly and conspicuously shows the title or the case number of the matter, - *AB203* – 31 – proceeding or action to which the substance relates must appear next to the substance in any photograph taken.

The provisions of this chapter relating to the imposition, collection and remittance of the sales tax apply to a retailer who - *AB203_R1* – 32 – makes a retail sale of cannabis or cannabis products regardless of whether the retailer holds a license issued pursuant to title 56 of NRS.

In addition to any other penalty authorized by law, the Department may impose on any person who does not hold a license pursuant to title 56 of NRS and who sells cannabis or a cannabis product an administrative fine in the amount of the excise tax on cannabis for which the person who engaged in the sale of cannabis or a cannabis product would have been liable had the person engaged in the sale as an adult-use cannabis - *AB203* – 32 – cultivation facility, for a sale for the purpose of resale, or adult- use cannabis retail store, for a sale for the purpose of use or consumption.

372A.260 The provisions of chapter 360 of NRS relating to the payment, collection, administration and enforcement of taxes, including, without limitation, any provisions relating to the imposition of penalties and interest, shall be deemed to apply to the payment, collection, administration and enforcement of the excise tax on cannabis to the extent that those provisions do not conflict with the provisions of NRS 372A.200 to 372A.380, inclusive [.] , and section 20 of this act.

NRS(Deleted 372A.290by isamendment.) herebySec. amended to read as follows:

372A.290 1.

An excise tax is hereby imposed on the first wholesale sale in this State of cannabis by a medical cannabis cultivation facility to another cannabis establishment at the rate of 15 percent of:

(a) The fair market value at wholesale of the cannabis, if the sale is made to an affiliate of the medical cannabis cultivation facility;

or (b) The sales price of the cannabis, if the sale is made to a cannabis establishment that is not an affiliate of the medical cannabis cultivation facility.

 The excise tax imposed pursuant to this subsection is the obligation of the medical cannabis cultivation facility.

2.

An excise tax is hereby imposed on the first wholesale sale in this State of cannabis by an adult-use cannabis cultivation facility to another cannabis establishment at the rate of 15 percent of:

(a) The fair market value at wholesale of the cannabis, if the sale is made to an affiliate of the adult-use cannabis cultivation facility;

or (b) The sales price of the cannabis, if the sale is made to a cannabis establishment that is not an affiliate of the adult-use cannabis cultivation facility.

 The excise tax imposed pursuant to this subsection is the obligation of the adult-use cannabis cultivation facility.

3.

Except as otherwise provided in subsection 8, an excise tax is hereby imposed on each retail sale in this State of cannabis or cannabis products by an adult-use cannabis retail store or cannabis - *AB203* – 33 – consumption lounge at the rate of 10 percent of the sales price of the cannabis or cannabis products.

The excise tax imposed pursuant to this subsection:

(a) Is the obligation of the seller of the cannabis or cannabis product but may be recovered from the purchaser.

(b) Is separate from and in addition to any general state and local sales and use taxes that apply to retail sales of tangible personal property.

4.

The revenues collected from the excise tax imposed pursuant to subsection 1 must be distributed:

(a) To the Cannabis Compliance Board and to local governments in an amount determined to be necessary by the Board to pay the costs of the Board and local governments in carrying out the provisions of chapter 678C of NRS;

and (b) If any money remains after the revenues are distributed pursuant to paragraph (a), to the State Treasurer to be deposited to the credit of the State Education Fund.

5.

The revenues collected from the excise tax imposed pursuant to subsection 2 must be distributed:

(a) To the Cannabis Compliance Board and to local governments in an amount determined to be necessary by the Board to pay the costs of the Board and local governments in carrying out the provisions of chapter 678D of NRS;

and (b) If any money remains after the revenues are distributed pursuant to paragraph (a), to the State Treasurer to be deposited to the credit of the State Education Fund.

6.

For the purpose of subsections 4 and 5, a total amount of $5,000,000 of the revenues collected from the excise tax imposed pursuant to subsection 1 and the excise tax imposed pursuant to subsection 2 in each fiscal year shall be deemed sufficient to pay the costs of all local governments to carry out the provisions of chapters 678C and 678D of NRS.

The Board shall, by regulation, determine the manner in which local governments may be reimbursed for the costs of carrying out the provisions of chapters 678C and 678D of NRS.

7.

The revenues collected from the excise tax imposed pursuant to subsection 3 must be paid over as collected to the State Treasurer to be deposited to the credit of the State Education Fund.

8.

The excise tax imposed pursuant to subsection 3 does not apply to a sale of cannabis for the medical use of cannabis or a medical cannabis product to the holder of a registry identification card or letter of approval by an adult-use cannabis retail store that has been deemed to be a dual licensee pursuant to NRS 678D.490.

9.

The excise taxes imposed pursuant to this section do not apply to any sale of cannabis or a cannabis product that was - *AB203* – 34 – produced by a joint-venture business operating pursuant to a joint-venture agreement approved by the Board pursuant to section 5 of this act.

10.

As used in this section:

(a) “Adult-use cannabis cultivation facility” has the meaning ascribed to it in NRS 678A.025.

(b) “Affiliate” means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, a specified person.

(c) “Cannabis product” has the meaning ascribed to it in NRS 678A.120.

(d) “Letter of approval” has the meaning ascribed to it in NRS 678C.070.

(e) “Local government” has the meaning ascribed to it in NRS 360.640.

(f) “Medical cannabis cultivation facility” has the meaning ascribed to it in NRS 678A.170.

(g) “Medical cannabis establishment” has the meaning ascribed to it in NRS 678A.180.

(h) “Medical cannabis product” has the meaning ascribed to it in NRS 678A.200.

(i) “Medical use of cannabis” has the meaning ascribed to it in NRS 678A.215.

(j) “Registry identification card” has the meaning ascribed to it in NRS 678C.080.

(k) “Wholesale sale” means the first sale or transfer of cannabis by a cannabis cultivation facility to another cannabis establishment.

The term does not include a transfer of cannabis by a cannabis cultivation facility to another cannabis cultivation facility when both cannabis cultivation facilities share identical ownership.

Sec.

- *AB203_R1* – 33 – Sec.

- *AB203* – 35 – (a) “Cannabis” has the meaning ascribed to it in NRS 678A.085.

In addition to the functions and responsibilities set forth in subsection 1, the Investigation Division shall becollaborate primarilywith responsiblethe Cannabis Compliance Board and other state and local agencies, including, without limitation, law enforcement agencies, for the - *AB203_R1* – 34 – enforcement of criminal laws relating to unlicensed cannabis activities.

The State Fire Marshal Division shall execute, administer and enforce the provisions of chapter 477 of NRS and perform such duties and exercise such powers as may be conferred - *AB203* – 36 – upon it pursuant to chapter 477 of NRS and any other specific statute.

NRS(Deleted 618.9941by isamendment.) hereby- amended*AB203_R1* to– read35 as– follows:Sec.

618.9941 “Cannabis establishment” has the meaning ascribed to it in NRS 678A.095 [.] , except that the term does not include a cannabis sales facility, as defined in NRS 678A.130.

Sec.

-(a) *AB203*An –examination 37 – concerning cannabis;n of the federal laws and regulations (b)concerning Recommendationscannabis; as to whether and under what circumstances gaming licensees should be authorized to invest in cannabis establishments or otherwise work with the cannabis industry in this State;

(b) Recommendations as to whether and under what circumstances gaming licensees should be authorized to invest in cannabis establishments or otherwise work with the cannabis industry in this State;

H3. - *AB203*

In preparing the report required pursuant to subsection 1, the Cannabis Compliance Board and the Nevada Gaming Control Board shall consult with relevant research institutions and incorporate any relevant input received from such research institutions into the report.

4.

The Cannabis Compliance Board and the Nevada Gaming Commission may accept gifts, grants, donations, bequests and other sources of money to carry out the provisions of this section.

5.

As used in this section, “research institution” means a university, college or other organization which has as one of its principal purposes the conducting of medical, scientific or academic research.

H - *AB203_R1*