SB 577 — CANNABIS REGULATION ACT

u [ (1) manufacture and package cannabis items;

.214675.3 - 3 - SJC/SB 577 (2) have cannabis items tested by a cannabis testing laboratory;

and (3) buy, sell, consign or transport cannabis items;

K.

(1) manufacturecultivate andor packageprepare cannabis items;in a raw form for consumption;

and e e 17 (3) sell, consign or transport cannabis items;

eL. e n d 18 I.

= = l ] 19 (1) means a product that contains cannabis or a l r i 20 cannabis extracts, including edible or topical products that t e a t may also contain other ingredients;

and m m 21 e d r e 22 (2) does not include the weight of any other ce e r17 c 23 ingredient combined with cannabis or cannabis extracts to e ae n bd 2418 prepare topical or oral administrations, food, drink or another u= [= l ] 19 product;

.212180.9a -l 3r -i J.20 M.

"cannabis testing laboratory" means a facility t e a t that is licensed by the department of environment to collect, m m 21 e d transport and test cannabis items to analyze the strength or r e 22 c e r c 23 purity of the items;

K.e a n b 24 N.

u [ (1) means the cultivation, production, .214675.3 - 4 - SJC/SB 577 possession, manufacture, storage, testing, labeling, transportation, couriering, sale or consignment of cannabis and cannabis items;

L.O.

M.P.

e e 17 N.

"controlling person":

e e n d 18 (1) means an officer, board member or other = = l ] 19 natural person who has a financial or voting interest of ten a l r i 20 percent or greater in a cannabis establishment;

and t e a t (2) does not include a bank or licensed m m 21 e d r e 22 lending institution;

c e r c 23 O.

"cultivation" means any activity involving the e a n b 24 planting, growing, harvesting, drying, curing, grading or u [ trimming of cannabis;

.212180.9 - 4 - P.

"director" means the executive director of the cannabis control commission;

"controlling person":

(1) means an officer, board member or other natural person who has a financial or voting interest of ten percent or greater in a cannabis establishment;

and (2) does not include a bank or licensed lending institution;

e e 17 R.

"cultivation" means any activity involving the e e n d 18 planting, growing, harvesting, drying, curing, grading or = = l ] 19 trimming of cannabis;

a l r i 20 S.

"director" means the executive director of the t e a t cannabis control commission;

m m 21 e d T.

"dispensary" means an establishment licensed to r e 22 c e r c 23 sell medical cannabis for off-site consumption;

e a n b 24 U.

"dual licensed dispensary" means an u [ establishment licensed to sell both medical and adult-use .214675.3 - 5 - SJC/SB 577 cannabis for off-site consumption;

V.

R.W.

and (3) with respect to a location specifically licensed for the production of cannabis outside of a building, e e 17 the entire unit of land that is created by subdivision or e e n17 d 18 partition of land that the licensee owns, leases or has a right =e =e ln ]d 1918 to occupy;

a= = l r] i19 20X. S.

"licensee representative" means an owner, ta el ar ti 20 director, officer, manager, employee, agent or other mt m 21 e da rt e 22 representative of a licensee, to the extent that person acts in cm em r21 ce 23d a representative capacity;

r e a22 nc be 24r T.c 23 Y.

"local jurisdiction" means a municipality or a ue [a n b 24 county;

.212180.9u -[ 5Z. - U.

"lounge" means a facility licensed by the .214675.3 - 6 - SJC/SB 577 commission to sell cannabis items only for on-site consumption;

V.AA.

W.BB.

X.CC.

Y.DD.

"medical cannabis program" means the regulated e e 17 system allowing for the beneficial use of medical cannabis as e e n17 d 18 established in the Lynn and Erin Compassionate Use Act;

=e =e ln ]d 1918 Z.EE.

"medical cannabis registry" means the system by a= = l r] i19 20 which the department of health, pursuant to the Lynn and Erin ta el ar ti 20 Compassionate Use Act, receives applications for registry mt m 21 e da rt e 22 identification cards;

issues cm em r21 ce 23d and renews registry identification cards;

and maintains files r e a22 nc be 24r c 23 related to applicants for and recipients of registry ue [a n b 24 identification cards;

.212180.9u -[ 6FF. - AA.

"medical professional" means a person licensed .214675.3 - 7 - SJC/SB 577 pursuant to the Medical Practice Act or the Osteopathic Medicine Act;

GG.

BB.HH.

CC.II.

"qualified patient" means a New Mexico resident who has been diagnosed by a practitioner as having a debilitating medical condition and has received written e e 17 certification and a registry identification card as part of the e e n d 18 medical cannabis program;

e= e= 17l DD.] 19 JJ.

"safety-sensitive position" means a position in ea el nr di 1820 which performance by a person under the influence of drugs or =t =e la ]t 19 alcohol would constitute an immediate and direct threat of am lm r21 ie 20d injury or death to that person or to another;

tr e a22 tc EE.e r c 23 KK.

"state store" means a commission-operated m m 21 e da rn eb 2224 facility at which cannabis items are stored or offered for cu e[ r c 23 retail sale to the public;

e.214675.3 a- n8 b- 24SJC/SB FF.577 LL.

"usable cannabis" means dried cannabis flowers u [ and dried cannabis leaves and any mixture or preparation of .212180.9 - 7 - those flowers or leaves;

and GG.MM.

e e 17 (2) the secretary of health or a member of the e e n d 18 secretary's staff designated by the secretary in an advisory e= e= 17l ] 19 role;

ea el nr di 1820 (3) the director of the New Mexico department =t =e la ]t 19 of agriculture or a member of the director's staff designated am lm r21 ie 20d by the director in an advisory role;

and tr e a22 tc e r c 23 (4) five public members appointed by the m m 21 e da rn eb 2224 governor with the consent of the senate, including:

cu e[ r c 23 (a) one member who is engaged in the e.214675.3 a- n9 b- 24SJC/SB 577 active commercial cultivation of non-cannabis crops;

u [ (b) one member who is currently or has .212180.9 - 8 - previously served as a certified law enforcement officer;

and (c) one member who is a currently or formerly licensed physician.medical professional.

Public members shall reside in New Mexico,Mexico and shall not have a financial interest in any entity engaged in the commercial production, manufacture or sale of cannabis products, and no more than three public members may be from the same political party.

Public members of the commission shall not be e e 17 reimbursed as provided in the Per Diem and Mileage Act,Act; but shall be paid five hundred dollars ($500) per day for every day or portion of a day that the public member attends a commission meeting.

Theexcept e e n d 18 that during the period beginning July 1, 2019 and ending June = = l ] 19 30, 2023, public membermembers shall receivebe nopaid otherfive ehundred edollars 17a compensation,l perquisiter i 20 ($500) per day for every day or allowance.portion of a day that the t e a t public member attends a commission meeting.

eThe epublic nmember m m 21 e d 18shall E.receive no other compensation, perquisite or allowance.

Except as provided in the Lynn and Erin = = l ] 19 Compassionate Use Act, the commission shall have exclusive a l r ie 2022 authorityc to regulate and administer the testing, manufacture, t e ar tc packaging23 andE. transportation of cannabis items in the state.

mExcept mas 21provided ein dthe rLynn and Erin e 22a F.n b 24 Compassionate Use Act, the commission shall have exclusive u [ authority to regulate and administer the testing, manufacture, .214675.3 - 10 - SJC/SB 577 packaging and transportation of cannabis items in the state.

TheF. commission shall employ such personnel and c e r c 23 hire such consultants as are required to carry out its duties e a n b 24 pursuant to the Cannabis Regulation Act;

providedThe that the u [ commission shall not employ orsuch hirepersonnel aand personhire whosuch hasconsultants aas directare .212180.9required -to 9carry -out orits indirectduties financialpursuant interestto inthe aCannabis cannabisRegulation establishmentAct; or cannabis cultivation.

provided that the commission shall not employ or hire a person who has a direct or indirect financial interest in a cannabis establishment or cannabis cultivation.

Not later than DecemberMarch 31,1, 2019,2020, the commission shall promulgate or propose rules necessary to carry out the commission's duties as provided in the Cannabis Regulation Act, and those rules shall include:

(2) qualifications for licensure that are e e 17 directly and demonstrably related to the operation of a e e n d 18 cannabis establishment;

= = l ] 19 (3) security requirements for a cannabis a l r i 20 establishment;

t e a t (4) requirements related to:

em m 21 e 17d (a) inspection and monitoring of a r e 22 c e nr dc 1823 cannabis establishment;

=e =a ln ]b 1924 (b) a cannabis establishment's au l[ r i 20 recordkeeping and tracking of cannabis items;

t.214675.3 e- a11 t- SJC/SB 577 (c) prevention of the unauthorized sale m m 21 e d r e 22 or diversion of cannabis items in commercial cannabis activity;

c e r c 23 (d) labeling of cannabis items;

and e a n b 24 (e) language for labels of cannabis u [ items related to potential adverse effects;

.212180.9 - 10 - (5) a provision regarding whether a licensee that is a cannabis producer may produce any other products;

(6) rules developedon ina consultationlicensee's withadvertisement theand departmentmarketing of environmentcannabis toproducts establish:and on how a licensee may display cannabis products for sale;

(a)(7) healthprocedures that promote and safetyencourage standardsfull applicableparticipation toin the cultivationcannabis industry governed by the Cannabis Regulation Act by representatives of cannabiscommunities andthat have been disproportionately harmed by the manufactureenforcement of cannabis items;prohibitions in law and policy, including harms from disproportionate rates of related interactions with law e e 17 enforcement officers, arrests, incarceration and collateral e e n d 18 consequences;

(b)= standards= forl quality] control,19 inspection(8) andrules testingdeveloped in consultation with the a l r i 20 department of cannabisenvironment items;to establish:

(c)t standardse fora foodt and(a) producthealth and safety standards m m 21 e d applicable to the cultivation of cannabis and the manufacture r e 22 c e r c 23 of cannabis items;

e a n b 24 (b) standards for quality control, u [ inspection and testing of cannabis items;

.214675.3 - 12 - SJC/SB 577 (c) standards for food and product safety applicable to cannabis items;

and (7)(9) rules developed in consultation with the department of environment and proposed for adoption by the e e 17 board, on behalf of the New Mexico department of agriculture, e e n d 18 to establish:

= = l ] 19 (a) standards for the use of pesticides a l r i 20 in the manufacture of cannabis, including the maximum t e a t allowances for pesticides and other foreign material such as m m 21 e d r e 22 hair, insects or other similar adulterants, in harvested c e r c 23 cannabis;

e a n b 24 (b) environmental protections that apply u [ to all licensees;

.212180.9e -e 1117 - (c) protocols to ensure licensees' e e n d 18 compliance with state laws governing environmental impacts, = = l ] 19 natural resource protection, water quality, water supply, a l r i 20 hazardous materials, pesticide use and wastewater discharge;

t e a t and m m 21 e d (d) occupational health and safety r e 22 c e r c 23 standards for persons working in the cannabis industry.

e a n b 24 H.

Not later than June 1, 2020, the commission u [ shall offer cannabis items for retail sale to the public.

The .214675.3 - 13 - SJC/SB 577 commission may purchase materials, goods and services and may lease, purchase and equip, in the name of the state, stores, warehouses and other assets as necessary for, incidental to or related to the operation of the cannabis retail operations.

Except as provided in Subsection J of this section and Section 810 of the Cannabis Regulation Act, the commission may in its discretion operate state stores at any e e 17 location within the state and, subject to the Personnel Act and e e n d 18 within the limits of available appropriations and funds, may = = l ] 19 employ persons to sell cannabis items in the stores.

The a l r i 20 salaries of the persons shall not be governed by the amount of t e a t sales.

A person employed to sell cannabis items under the m m 21 e d r e 22 provisions of the Cannabis Regulation Act shall not sell c e r c 23 cannabis items except as may be legally obtained under the e a n b 24 provisions of the Cannabis Regulation Act.

u [ J.

The commission shall not locate a state store .212180.9e -e 1217 - within three hundred feet from the perimeter of school grounds e e n d 18 on which instruction is provided at any level from kindergarten = = l ] 19 through twelfth grade, a playground, a child care center, a a l r i 20 youth center, a public park or a library that was in existence t e a t at the time the commission established the state store at that m m 21 e d location.

r e 22 c e r c 23 K.

The commission may, in its discretion, open for e a n b 24 business at reasonable hours on any day, including Sunday or u [ legal holidays except for Easter, Thanksgiving and Christmas .214675.3 - 14 - SJC/SB 577 day.

The commission shall accept cannabis items on consignment for resale from personsmanufacturers or producers licensed pursuant to Section 46 of the Cannabis Regulation Act.

[NEW MATERIAL ] LICENSING--LIMITATIONS.--DEPARTMENT eOF eHEALTH--DUTIES-- 17PUBLIC HEALTH AND SAFETY ADVISORY COMMITTEE.-- A.

TheNot departmentlater ofthan environmentJanuary shall1, regulate2020, andthe edepartment eof nhealth dshall: 18 license cannabis producers and cannabis testing laboratories = = l ] 19 pursuant to rules promulgated by the commission.

The(1) aestablish l r i 20 department of environment shall begin issuing licenses for t e a tmedical cannabis producerssubsidy currentlyprogram producingby andwhich maintainingthe adepartment cropof mhealth mshall 21make edistributions dof ra eportion 22 of no less than four hundred fifty cannabis plantsexcise exclusivelytax crevenue eto rprovide c 23 for medical use and cannabis testing laboratories to licensedsick eand aindigent npersons bwho 24are dispensers,residents asof definedNew inMexico the Lynn and Erinwho Compassionatehave Usebeen udiagnosed [by Act,a nopractitioner sooneras thanhaving Decembera 31,debilitating 2019medical condition and noe latere than17 Januaryhave .212180.9received -written 13certification - 31, 2020, and shalla beginregistry issuinge licensese forn cannabisd producers18 andidentification cannabiscard testingissued laboratoriespursuant to otherthe personsLynn noand soonerErin than= January= 1,l 2021] and19 noCompassionate laterUse thanAct; January 31, 2021.

and a l r i 20 (2) promulgate rules to govern the medical t e a t cannabis subsidy program.

m m 21 e d B.

The department of health shall monitor emerging r e 22 c e r c 23 scientific and medical information relevant to the health e a n b 24 effects associated with cannabis use and shall monitor changes u [ in cannabis use patterns for children and adults within the .214675.3 - 15 - SJC/SB 577 state, broken down by county, race and ethnicity.

C.

Not later than September 1, 2019, 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 and emergency medicine.

D.

Beginning December 1, 2020, the public health and safety advisory committee shall provide to the legislature and the department of health shall publish on its website an annual report on the health effects of legalizing cannabis for adult use.

The report shall include the following elements relating to cannabis use:

(1) child access;

(2) road safety and driving while impaired;

e e 17 (3) workplace safety;

e e n d 18 (4) percentage of emergency room visits and = = l ] 19 outcomes;

a l r i 20 (5) educational needs for children and adults;

t e a t (6) consumer and product safety;

and m m 21 e d (7) percentage of poison control center calls.

r e 22 c e r c 23 E.

Public members of the committee are entitled to e a n b 24 per diem and mileage as provided for state employees in the Per u [ Diem and Mileage Act.

.214675.3 - 16 - SJC/SB 577 SECTION 5.

[NEW MATERIAL ] DEPARTMENT OF PUBLIC SAFETY-- REPORTING REQUIREMENTS.-- A.

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

(1) the total number of arrests and citations for cannabis-related violations broken down by:

(a) category and penalty level;

and (b) race, ethnicity, age and gender;

and (2) the number of motor vehicle accidents in which the driver of one of the vehicles tested positive for cannabis.

TheEach commissionlaw shallenforcement regulateagency andshall licensesubmit on-its siteannual consumptionreport ofto cannabisthe itemsdepartment inof apublic loungesafety. in conjunction with a cannabis producer license.

TheA commissionlaw shallenforcement beginagency issuingthat licensesdoes fornot loungesissue toa licensedcitation dispensers,or asmake definedan inarrest thefor Lynna andcannabis Erinlaw Compassionateviolation Use Act, no sooner than December 31, 2019 and no later than January 31, 2020 and shall beginreport issuingthat licensesfact forin loungese toe other17 personsits noannual soonerreport. than January 1, 2021 and no later than January 31, 2021.

e e n d 18 C.

The department of public safety shall compile = = l ] 19 the reports submitted and shall issue by November 1 of each a l r i 20 year an annual report of all cannabis law violations in the t e a t state.

The report shall aggregate the data for the state and m m 21 e d shall disaggregate the data by agency, race, ethnicity, age and r e 22 c e r c 23 gender.

The department of public safety shall make all annual e a n b 24 reports submitted for previous fiscal years available on the u [ department's website.

.214675.3 - 17 - SJC/SB 577 SECTION 6.

[NEW MATERIAL ] LICENSING--LIMITATIONS.-- A.

The department of environment shall regulate and license cannabis manufacturers and cannabis testing laboratories pursuant to rules promulgated by the commission.

B.

The department of environment shall begin issuing licenses:

(1) for cannabis manufacturers currently manufacturing medical cannabis products, no sooner than July 1, 2020;

provided that:

(a) the department shall condition renewal of a license for cannabis manufacturers currently manufacturing medical cannabis products upon a requirement that the manufacturer sell a minimum amount of medical cannabis products as a percentage of total cannabis products sold.

The department shall determine the minimum percentage by rule;

provided that the minimum percentage shall be not less than e e 17 twenty percent and not more than forty percent of total e e n d 18 cannabis products sold from the preceding twelve months' = = l ] 19 operation of the manufacturer;

and a l r i 20 (b) all medical cannabis products shall t e a t be sold at a grade and quality determined by regulation to be m m 21 e d suitable for medical consumption and cannabis testing r e 22 c e r c 23 laboratories to licensed dispensers as defined in Section e a n b 24 26-2B-3 NMSA;

and u [ (2) for cannabis manufacturing to other .214675.3 - 18 - SJC/SB 577 persons, no sooner than July 1, 2021.

The New Mexico department of healthagriculture shall regulate and license commercial, medical and on-site consumption of cannabis itemsproducers as provided in the Lynn and Erin Compassionate Use Act and pursuant to rules promulgated by the commission.board.

The New Mexico department of agriculture shall begin issuing licenses for cannabis producers currently producing and maintaining a crop of no less than four hundred fifty cannabis plants exclusively for medical use by licensed medical patients, as defined in the Lynn and Erin Compassionate Use Act, no sooner than July 1, 2020 and shall begin issuing licenses for cannabis producers to other persons no sooner than July 1, 2021.

The board,commission through the New Mexico department of e e 17 agriculture, shall regulate and license commercialon- andsite medicalconsumption eof e n d 18 cannabis cultivationitems asin provideda forlounge in theconjunction Cannabiswith Regulationa =cannabis =producer lor ]manufacturer 19license. Act.

aThe lcommission rshall ibegin 20issuing E.licenses for lounges to licensed dispensers as defined in Section 26-2B-3 NMSA 1978 no sooner e e 17 than July 1, 2020 and shall begin issuing licenses for lounges e e n d 18 to other persons no sooner than July 1, 2021.

The= board,= throughl the] New19 MexicoE. department of t e a t agriculture, shall regulate and license collective medical m m 21 e d r e 22 cannabis cultivation.

OnThe Decembercommission 31,may 2019,issue thea board,dual onmedical cand ea l r ci 2320 behalfadult-use ofcannabis andsale throughlicense theto Newa Mexicoperson departmentthat ofholds agriculture,both a t e a nt bvalid 24adult-use shallcannabis issuemanufacturer rulesor andproducer shalllicense beginand issuinga licensesm tom authorize21 ue [d collectivevalid medical cannabis cultivation.manufacturer or producer license;

Ther rulese 22 c e r c 23 provided that the person shall .212180.9sell -a 14minimum -quantity includeof procedurese that:a n b 24 medical product as provided in Subsection B of this section and u [ shall meet quality standards promulgated by the commission;

(1)and allow.214675.3 not- more19 than- fiveSJC/SB qualified577 patients,provided asfurther definedthat ina thedual Lynnlicensed anddispensary Erinshall Compassionatenot Usebe Act,located towithin cultivatetwenty-five cannabismiles togetherof at a designatedstate licensedstore location;located within the same county.

(2)Every providelicense thatissued thepursuant licensedto locationthis subsection shall notexpire containon moreJuly than1, four2025. mature female cannabis plants and a combined total of twelve seedlings and male plants multiplied by the number of qualified patients who are members of the medical cannabis collective;

and (3) allow members of a medical cannabis collective to either destroy or sell cannabis in excess of the combined total adequate supply of the members, as defined in the Lynn and Erin Compassionate Use Act, to a person licensed to produce medical cannabis.

The commissiondepartment mayof proposehealth rulesshall toregulate theand boardlicense e e 17 for adoption regarding the regulatingdispensing andof licensingmedical ofcannabis eitems eas nprovided din 18the commercialLynn and medicalErin cannabisCompassionate cultivationUse asAct providedand forpursuant into =rules =promulgated lby ] 19 the Cannabiscommission. Regulation Act.

a l r i 20 G.

AThe licenseboard, isthrough valid for twelve months from the tNew eMexico adepartment tof dateagriculture, itshall isregulate issued and maylicense becannabis renewedproducers. annually or as provided m m 21 e d r e 22 for in the rules promulgated by the commission.

c e r c 23 H.

AThe constituentboard, agencythrough maythe denyNew anMexico applicationdepartment forof eagriculture, ashall nregulate band 24 an initial license orcollective renewalmedical if:cannabis cultivation.

uOn [December (1)31, 2019, the applicantboard, hason violatedbehalf anyof provisionand .212180.9through - 15 - of the LynnNew andMexico Erindepartment Compassionateof Useagriculture, Actshall orissue therules Cannabisand Regulationshall Actbegin orissuing alicenses ruleto promulgatedauthorize pursuantcollective tomedical thosecannabis acts;cultivation.

The rules shall e e 17 include procedures that:

e e n d 18 (1) allow not more than five qualified = = l ] 19 patients, as defined in the Lynn and Erin Compassionate Use a l r i 20 Act, to cultivate cannabis together at a designated licensed t e a t location or pursuant to an agreement with a cannabis producer m m 21 e d at the licensed location of that cannabis producer;

r e 22 c e r c 23 (2) provide that the licensed location shall e a n b 24 not contain more than four mature female cannabis plants and a u [ combined total of twelve seedlings and male plants multiplied .214675.3 - 20 - SJC/SB 577 by the number of qualified patients who are members of the medical cannabis collective;

provided that if the medical cannabis collective's plants are grown at a location operated by a cannabis producer, the total number of plants at the location, including the medical cannabis collective's plants, shall not exceed the total number of plants authorized for that location;

and (3) provide that members of a medical cannabis collective shall destroy cannabis produced in excess of the combined total adequate supply of the members, as defined in the Lynn and Erin Compassionate Use Act;

provided that if the medical cannabis collective's plants are grown at a cannabis producer's licensed location, the medical cannabis collective may enter into an agreement with the cannabis producer to sell cannabis produced in excess of the combined total adequate supply of the members to the cannabis producer;

and provided e e 17 further that if the medical cannabis collective enters into an e e n d 18 agreement with a licensed medical cannabis manufacturer, the = = l ] 19 medical cannabis collective may sell excess cannabis only to a l r i 20 that manufacturer.

t e a t I.

The commission may propose rules to the board m m 21 e d for adoption regarding the regulating and licensing of cannabis r e 22 c e r c 23 producers as provided for in the Cannabis Regulation Act.

e a n b 24 J.

A license is valid for twelve months from the u [ date it is issued and may be renewed annually or as provided .214675.3 - 21 - SJC/SB 577 for in the rules promulgated by the commission.

K.

A constituent agency may deny an application for an initial license or renewal if:

(1) the applicant has violated any provision of the Lynn and Erin Compassionate Use Act or the Cannabis Regulation Act or a rule promulgated pursuant to those acts;

provided that if the e e 17 constituent agency determines that the controlling person and e e n d 18 the applicant entity are otherwise qualified for a license and = = l ] 19 issuing a license to the applicant entity would not compromise a l r i 20 public safety, the constituent agency shall conduct a thorough et e 17a t review of the conviction, including the nature of the offense, em em n21 e d 18 surrounding circumstances and any evidence of the controlling =r =e l22 ]c 19e r c 23 person's rehabilitation following the conviction, and based on e a ln rb i24 20 that review, determine whether the applicant entity should be tu e[ a t issued a license;

mor m.214675.3 21- e22 d- rSJC/SB e577 22 (5) the applicant or a controlling person in c e r c 23 the applicant's entity has been penalized for a violation of e a n b 24 the Cannabis Regulation Act or the Lynn and Erin Compassionate uUse [Act Usein Act;the three years immediately preceding the date on which the application was filed.

orL. .212180.9 - 16 - (6) the applicant or a controlling person in the applicant's entity has had a license issued pursuant to the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act revoked by a constituent agency or the New Mexico department of agriculture in the three years immediately preceding the date on which the application was filed.

I.For the purposes of Subsection K of this section:

For the purposes of Subsection H of this section:

1) prepare for sale, transport or carry a e e 17 controlled substance;

or 2) sell, give away or offer to sell a e e n17 d 18 controlled substance to any person;

and =e =e ln ]d 1918 (c) any other offense as determined by a= = l r] i19 20 the commission by rule, except as provided in Paragraph (2) of ta el ar ti 20 this subsection;

and mt m 21 e da rt e 22 (2) a conviction for which the related cm em r21 ce 23d sentence, including any term of probation or parole, is r e a22 nc be 24r c 23 completed for the possession, use, manufacture, distribution or ue [a n b 24 dispensing or the possession with the intent to manufacture, .212180.9u -[ 17 - distribute or dispense a controlled substance is not considered .214675.3 - 23 - SJC/SB 577 substantially related to the qualifications, functions or duties of a person seeking a license and shall not be thea sole ground on which an application is denied unless the offense involved the distribution of alcohol or a controlled substance to a minor.

J.M.

K.N.

The commission shall regulate and license cannabis couriers.

The commission shall begin issuing licenses for cannabis couriers no sooner than December 31, 2019.

O.

L.e e 17 P.

Any person properly licensed and in good e e n d 18 standing pursuant to the Lynn and Erin Compassionate Use Act on e= e= 17l ] 19 the effective date of the enactment of the Cannabis Regulation ea el nr di 1820 Act shall be issued a license under the provisions of the =t =e la ]t 19 Cannabis Regulation Act allowing the licensee to continue to am lm r21 ie 20d conduct medical cannabis activity only.

The licensee shall tr e a22 tc e r c 23 continue to operate under rules promulgated for the medical m m 21 e da rn eb 2224 cannabis program until the commission and the department of cu e[ r c 23 environment promulgate rules regulating medical cannabis e.214675.3 a- n24 b- 24SJC/SB 577 activity.

u [ SECTION 5.7.

[NEW MATERIAL ] LICENSING FEES.-- .212180.9 - 18 - A.

The fees shall be reasonably calculated to cover the cost of administering and enforcing the programs established in the Cannabis Regulation Act.Act;

provided that:

(1) the fee shall be scaled to reflect the size of a business seeking or renewing a license;

and (2) for a license or renewal of a license that authorizes only medical cannabis activity, the fee shall not exceed one-half of the fee charged for a license or renewal of a license for a similarly sized business that authorizes both commercial and medical cannabis activities.

The commission, the department of environment e e 17 and the department of health shall deposit all fees collected e e n d 18 pursuant to the Cannabis Regulation Act in the cannabis = = l ] 19 regulation fund.

a l r i 20 C.

The board, on behalf of the New Mexico t e a t department of agriculture, shall establish application and m m 21 e d licensing fees applicable to licenses for cannabis cultivation.

r e 22 c e r c 23 The fees shall be reasonably calculated to cover the cost of e a n b 24 administering and enforcing the programs established pursuant u [ to the Cannabis Regulation Act.

e.214675.3 e- 1725 - SJC/SB 577 SECTION 6.8.

[NEW MATERIAL ] DISCIPLINARY PROCEEDINGS-- e e n d 18 APPLICATION OF UNIFORM LICENSING ACT.--In accordance with the = = l ] 19 procedures contained in the Uniform Licensing Act, the a l r i 20 commission, the department of environment or the department of t e a t health may revoke or suspend any permanent or temporary license m m 21 e d r e 22 held or applied for under the Cannabis Regulation Act upon c e r c 23 findings that the licensee or applicant:

e a n b 24 A.

engaged in fraud or deceit in procuring or u [ attempting to procure a license;

.212180.9 - 19 - B.

has violated any provision of the Cannabis Regulation Act or rules promulgated by the commission or the e e 17 board, on behalf of the New Mexico department of agriculture.

e e n d 18 SECTION 7.9.

[NEW MATERIAL ] LOCAL CONTROL.-- = = l ] 19 A.

a l r i 20 (1) adopt reasonable time, place and manner t e a t rules that do not conflict with the Cannabis Regulation Act;

m m 21 e d r e 22 (2) prohibit, in accordance with the Cannabis c e r c 23 Regulation Act, the operation of a state store;store or a dual e a n b 24 licensed dispensary;

and u [ (3) limit the location of a cannabis .214675.3 - 26 - SJC/SB 577 establishment or state store as determined by the local e e 17 jurisdiction, but which distance shall be three hundred feet or e e n d 18 more from the perimeter of school grounds on which instruction = = l ] 19 is provided at any level from kindergarten through twelfth a l r i 20 grade, a playground, a child care center, a youth center, a t e a t public park or a library that was in existence at the time the m m 21 e d r e 22 cannabis establishment was licensed.

c e r c 23 B.

A local jurisdiction shall not prevent e a n b 24 transportation of cannabis items on public roads by a licensee u [ that transports cannabis items in compliance with the Cannabis .212180.9 - 20 - Regulation Act or prohibit the personal possession of cannabis items authorized pursuant to the Cannabis Regulation Act.

SECTION 8.

[NEW MATERIAL ] LOCAL OPTION--EFFECT OF LOCAL OPTION.-- A.

A municipality or a county in the state may prohibit by ordinance or resolution the operation of a state store or lounge within six months following the effective date of the Cannabis Regulation Act.

A municipalitylocal orjurisdiction ashall countynot: in the state that has by ordinance or resolution prohibited the operation of a state store or lounge may at any time by ordinance or resolution allow the operation of a state store or lounge.

(1) prevent transportation of cannabis products on public roads by a licensee that transports cannabis products in compliance with the Cannabis Regulation Act;

(2) prohibit the personal production of cannabis or cannabis products made without the use of volatile solvents for personal use provided for in the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act;

or (3) prohibit the operation of a medical- e e 17 cannabis-only retail business.

e e n d 18 SECTION 10.

[NEW MATERIAL ] LOCAL OPTION--EFFECT OF LOCAL = = l ] 19 OPTION.-- a l r i 20 A.

A municipality or a county in the state may t e a t prohibit by ordinance or resolution the operation of a state m m 21 e d store within six months following the effective date of the r e 22 c e r c 23 Cannabis Regulation Act.

e a n b 24 B.

A municipality or a county in the state that has u [ by ordinance or resolution prohibited the operation of a state .214675.3 - 27 - SJC/SB 577 store may at any time by ordinance or resolution allow the operation of a state store.

A municipality or a county in the state thatmay has by ordinance or resolution allowedlimit the operationsale of aadult-use statecannabis storefor oroff-site loungeconsumption pursuant to Subsectionsale Bin of this section shall not later prohibit the operation of a state storestore. or lounge by e e 17 ordinance or resolution.

eD. e n d 18 SECTION 9.

[NEWA MATERIALmunicipality ]or LICENSEEa PROTECTIONS.--county =in =the lstate ]that 19has A.by ordinance or resolution allowed the operation of a state store pursuant to Subsection B of this section shall not later prohibit the operation of a state store by ordinance or resolution.

ConductSECTION by11. a licensee or a licensee a l r i 20 representative that is allowed pursuant to a license and t e a t conduct by a person who allows property to be used by a m m 21 e d r e 22 licensee or a licensee representative for conduct allowed c e r c 23 pursuant to a license is lawful, not a violation of state or e a n b 24 local law and is not a basis for seizure or forfeiture of any u [ property or assets under state or local law.

.212180.9[NEW -MATERIAL 21] -LICENSEE B.PROTECTIONS.-- A.

TheConduct stateby or a locallicensee governmentor shall not impose a criminal,licensee civilrepresentative orthat administrativeis penaltyallowed onpursuant ato licensee or a licenseelicense representativeand orconduct onby a person who allows property to be used by a licensee or a licensee representative for conduct allowed pursuant to a license,license solelyis forlawful, conductnot alloweda pursuantviolation toof state or e e 17 local law and is not a license.basis for seizure or forfeiture of any e e n d 18 property or assets under state or local law.

SECTION= 10.= l ] 19 B.

The state or a local government shall not impose a l r i 20 a criminal, civil or administrative penalty on a licensee or a t e a t licensee representative or on a person who allows property to m m 21 e d be used by a licensee or a licensee representative pursuant to r e 22 c e r c 23 a license, solely for conduct allowed pursuant to a license.

e a n b 24 SECTION 12.

[NEW MATERIAL ] TRANSPORT VIA COURIER.-- u [ A.

Only a cannabis retailer, cannabis microbusiness .214675.3 - 28 - SJC/SB 577 or cannabis courier may courier cannabis products.

B.

A consumer who requests courier service shall maintain a physical or electronic copy of the courier request for the duration of time that the consumer possesses the cannabis product that was purchased and received by courier and shall make the copy available upon request by the commission or a law enforcement officer.

SECTION 13.

(2) a state agency from enforcing a law or e e 17 rule that does not conflict with the Cannabis Regulation Act or e e n d 18 rules promulgated pursuant to that act;

or e= e= 17l ] 19 (3) a local jurisdiction from enforcing a ea el nr di 1820 local ordinance that does not conflict with the Cannabis =t =e la ]t 19 Regulation Act or rules promulgated pursuant to that act.

am lm r21 ie 20d C.

A person who is eighteen years of age or older tr e a22 tc e r c 23 shall not intentionally traffic cannabis.

A person who m m 21 e da rn eb 2224 violates this subsection, if the amount is:

cu e[ r c 23 (1) one-half ounce of cannabis or four grams e.214675.3 a- n29 b- 24SJC/SB 577 of cannabis extracts or less, shall be subject to a civil u [ penalty of fifty dollars ($50.00);

.212180.9 - 22 - (2) more than one-half ounce of cannabis or four grams of cannabis extracts but no more than one pound of cannabis or one hundred twenty-eight grams of cannabis extracts, is guilty of a petty misdemeanor and shall be sentenced to a fine in an amount not less than five hundred dollars ($500) and not more than one thousand dollars ($1,000);

e e 17 D.

For the purposes of this section, "traffic" e e n d 18 means the:

e= e= 17l ] 19 (1) distribution, sale, barter or giving away ea el nr di 1820 of cannabis;

or =t =e la ]t 19 (2) possession with intent to distribute, am lm r21 ie 20d sell, barter or give away cannabis.

tr e a22 tc e r c 23 SECTION 11.14.

[NEW MATERIAL ] DISTRIBUTION AND TRANSPORT.-- m m 21 e da rn eb 2224 The Cannabis Regulation Act shall not be construed to authorize cu e[ r c 23 a licensee to transport or distribute, or cause to be e.214675.3 a- n30 b- 24SJC/SB 577 transported or distributed, cannabis items outside the state, u [ unless authorized by federal law.

.212180.9 - 23 - SECTION 12.15.

Before sale or consignment to the commissionpublic or transportconsignment ofto a cannabis item, the commission, cannabis itemitems shall be labeled and placed in a resealable, child-resistant package.

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

e= e= 17l ] 19 (4) a list of pharmacologically active ea el nr di 1820 ingredients;

=t =e la ]t 19 (5) for cannabis products, a list of all am lm r21 ie 20d ingredients and a disclosure of nutritional information for the tr e a22 tc e r c 23 product or cannabis extract, disclosed in the same manner m m 21 e da rn eb 2224 required under federal law for nutritional labeling for food cu e[ r c 23 for human consumption;

e.214675.3 a- n31 b- 24SJC/SB 577 (6) a warning, if nuts or other known u [ allergens are used in the item or in its manufacture;

and .212180.9 - 24 - (7) a warning of possible adverse effects of consumption and the New Mexico poison and drug information center phone number.

SECTION 13.16.

(3) be delineated or scored into standardized serving sizes, if the cannabis product contains more than one e e 17 serving and is an edible cannabis product in solid form;

(4)e bee homogenizedn tod ensure18 uniform(4) econtain ea 17uniform disbursement of = = l ] 19 cannabinoids throughout the product;

ea el nr di 1820 (5) be manufactured and sold or consigned to =t =e la ]t 19 the commission under health and sanitation standards am lm r21 ie 20d established by the commission, with the assistance of the tr e a22 tc e r c 23 department of environment, for the preparation, storage, m m 21 e da rn eb 2224 handling and sale of food products;

and cu e[ r c 23 (6) be sold or consigned to the commission e.214675.3 a- n32 b- 24SJC/SB 577 with sufficient information to enable the informed consumption u [ of the product, including information on the potential effects .212180.9 - 25 - of the product and directions on how to consume the cannabis product.

SECTION 14.17.

The commission, with the assistance of the department of environment, shall promulgate rules to govern the licensing of a cannabis producermanufacturer and a cannabis testing laboratory.

The departmentcommission of environment shall issue licenses as follows:

(1) "cannabis producermanufacturing level 1" for a site that manufactures cannabis extracts using nonvolatile e e 17 solvents or no solvents;

e e 17n d 18 (2) "cannabis producermanufacturing level 2" for a site= e= el n] d19 18site that manufactures cannabis extracts using volatile a l r i 20 solvents;

=and =t le ] 19 and a lt r i 20 (3) "cannabis testing laboratory" for a tm em a21 te d licensee that tests cannabis items.products.

mAn mowner 21or eperson dwith r e 22 B.c e r c 23 an ownership interest in a laboratory license shall not own or e a n b 24 have ownership interest in a non-laboratory facility licensed u [ pursuant to the Cannabis Regulation Act.

Except.214675.3 as- otherwise33 provided- bySJC/SB law,577 aB. cannabis c e r c 23 item shall not be sold or consigned to the commission by a e a n b 24 licensee unless a representative sample of the cannabis item u [ has been tested by a cannabis testing laboratory to determine:

.212180.9Except -as 26otherwise -provided (1)by whetherlaw, thea chemicalcannabis profileproduct shall not be sold by a licensee unless a representative sample of the samplecannabis conformsproduct tohas thebeen labeledtested contentby ofa compounds,cannabis including:testing laboratory to determine:

(1) whether the chemical profile of the sample conforms to the labeled content of compounds, including:

(a) residual solvents or chemicals, e e 17 including explosive gases such as butane, propane and hydrogen, e e n d 18 and poisons, toxins or carcinogens such as methanol, methylene = = l ] 19 chloride, acetone, benzene, toluene and trichloroethylene;

a l r i 20 (b) foreign material, including hair, et e 17a t insects or other similar adulterants;

and em em n21 e d 18 (c) microbiological impurity, including =r =e l22 ]c 19e r c 23 total aerobic microbial count;

e a ln rb i24 20 pseudomonas aeruginosa;

staphylococcus tu e[ a t aureus;

m.214675.3 m- 2134 e- dSJC/SB r577 e 22 C.

Residual levels of volatile organic compounds c e r c 23 shall not exceed harmful levels.

e a n b 24 D.

The testing required by this section shall be u [ performed in a manner consistent with general requirements for .212180.9 - 27 - the competence of testing and calibration activities, including sampling, using standard methods to ensure conformity, competence and impartiality to test cannabis items.products.

Any pre-sale inspection, testing transfer or transportation of cannabis itemsproducts pursuant to this section shall conform to a chain of custody protocol and any other requirements imposed by the departmentcommission of environment in accordance with the Cannabis Regulation Act.

SECTION 15.18.

[NEW MATERIAL ] TESTING CANNABIS ITEMS--PRODUCTS-- DEPARTMENT OF ENVIRONMENT.-- A.

A cannabis testing laboratory's testing of cannabis itemsproducts shall comply with the requirements set forth e e 17 in applicable law and rules.

e e n d 18 B.

The commission shall promulgatedevelop rules and provide= to= thel department] of19 environment rules and procedures to:

a l r i 20 (1) ensure that testing of cannabis itemsproducts et e 17a t occurs prior to sale;distribution to cannabis retailers or cannabis m m 21 e d microbusinesses;

r e 22 c e nr dc 1823 (2) specify how often licensees shall test =e =a ln ]b 1924 cannabis items;products;

andu a[ l r i 20 (3) requirespecify destructionwhich ofentities abear harvestedthe batchcost t e a t of cannabis.214675.3 or- of35 cannabis- itemsSJC/SB if577 the testing samplescannabis from m m 21 e d r e 22 the batch or items indicate noncompliance with applicable c e r c 23 health and safetymedical standardscannabis; promulgated by the commission, e a n b 24 unless remedial measures can bring the cannabis or cannabis u [ items into compliance with the standards.

.212180.9and -(4) 28require -destruction SECTIONof 16.a harvested batch of cannabis or of cannabis products if the testing samples from the batch or items indicate noncompliance with applicable health and safety standards promulgated by the commission, unless remedial measures can bring the cannabis or cannabis products into compliance with the standards.

[NEWC. MATERIAL ] CONTRACTS.--A contract related to operation of a license 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 property to be used by a licensee or a licensee representative for conduct allowed pursuant to a license, shall not be deemed unenforceable on the basis that the conduct allowed pursuant to the license is prohibited by federal law.

SECTIONNot 17.later than January 1, 2020, the department of environment shall identify and designate to the commission acceptable and accredited standards, where necessary to be used by laboratories.

[NEW MATERIAL ] PROVISION OF PROFESSIONAL SERVICES.--An attorney, accountant, insurance agent, real estate agent, security guard or other person engaged in a profession subject to state licensure shall not be subject to disciplinary action by a professional association, a state professional board or a state licensing entity because the professional provides professional services or assistance to e e 17 prospective or licensed cannabis establishments or another e e n d 18 person in connection with activity that the professional = = l ] 19 reasonably believes complies with the Cannabis Regulation Act a l r i 20 and rules promulgated pursuant to that act.

t e a t SECTION 18.

[NEW MATERIAL ] MEDICAL CANNABIS PROVISIONS m m 21 e d r e 22 UNAFFECTED.--Nothing in the Cannabis Regulation Act shall be c e r c 23 construed to:

e a n b 24 A.

limit a privilege or right of a qualified u [ patient or a primary caregiver participating in the medical .212180.9 - 29 - cannabis program or a person issued a permit to operate as a medical cannabis licensed producer or to be a director, officer or employee of a medical cannabis licensed producer;

or B.

allow a medical cannabis licensed producer to purchase cannabis items in a manner or from a source not authorized under the Lynn and Erin Compassionate Use Act.

[NEW MATERIAL ] PROTECTIONSADVERTISING FORAND THEMARKETING USERESTRICTIONS.-- OFA. CANNABIS.--A person or a licensee shall not be subject to arrest, prosecution, penalty, civil liability or disciplinary action by a business or professional licensing entity and shall not be denied any right or privilege solely for conduct allowed pursuant to the Cannabis Regulation Act.

ExceptThe bycommission court order, state and local law enforcement agencies shall notpromulgate cooperaterules with or provide assistance to the United States government, or any federal agency thereof, in enforcing the federal Controlled Substances Act solely for conduct that eexplicitly: e 17 complies with the Cannabis Regulation Act or the Lynn and Erin e e n d 18 Compassionate Use Act.

The(1) Newprohibit Mexicothe supremeadvertisement court and anymarketing =e = l ] 19 disciplinary or character and fitness committees established by a l r i 20 that court are considered business or professional licensing t e a17 t entities for the purposes of thiscannabis section.products:

me m 21 e n d r18 e(a) 22on SECTIONa 20.billboard, radio, television or = = l ] 19 other broadcast media;

[NEWa MATERIALl ]r PROTECTIONSi FROM20 c(b) ethat ris cfalse, 23deceptive DISCRIMINATIONor FORt THEe USEa OFt CANNABISmisleading, ORincluding MEDICALmaking CANNABIS.--unproven ehealth abenefit nclaims; b 24 A.

Am schoolm shall21 note refused to(c) enrollthat ordepicts otherwiseconsumption uby [children penalizer ae person22 solelyc fore conductr allowedc pursuant23 to the .212180.9 - 30 - Cannabis Regulation Act or theother Lynnpersons andyounger Erinthan Compassionatetwenty-one Useyears Act,of unlessage; failing to do so would cause the school to lose a monetary or licensing-related benefit under federal law or regulation.

e a n b 24 (d) that is designed using cartoon u [ characters or to mimic any other product brand;

.214675.3 - 36 - SJC/SB 577 (e) within three hundred feet of a school, church or daycare center;

(f) that is in public transit vehicles or stations;

(g) that is in the form of an unsolicited internet pop-up;

or (h) that is on publicly owned or operated property;

and (2) require:

(a) all advertisements and marketing to accurately and legibly identify the licensee responsible for its content;

and (b) print and digital communications advertisements to be placed only where the audience is reasonably expected to be twenty-one years of age or older, as determined by reliable, current audience composition data.

e e 17 B.

Upon a determination by the New Mexico attorney e e n d 18 general that the use of cannabis, other than as provided for in = = l ] 19 the Lynn and Erin Compassionate Use Act, is lawful in the state a l r i 20 under federal law, Subparagraph (a) of Paragraph (1) of t e a t Subsection A of this section shall cease to be in effect.

m m 21 e d SECTION 20.

[NEW MATERIAL ] CONTRACTS.--A contract related r e 22 c e r c 23 to operation of a license is enforceable, and a contract e a n b 24 entered into by a licensee or a licensee representative for u [ conduct allowed pursuant to a license or entered into by a .214675.3 - 37 - SJC/SB 577 person who allows property to be used by a licensee or a licensee representative for conduct allowed pursuant to a license, shall not be deemed unenforceable on the basis that the conduct allowed pursuant to the license is prohibited by federal law.

SECTION 21.

[NEW MATERIAL ] PROVISION OF PROFESSIONAL SERVICES.--An accountant, insurance agent, real estate agent, security guard or other person engaged in a profession subject to state licensure shall not be subject to disciplinary action by a professional association, a state professional board or a state licensing entity because the professional provides professional services or assistance to prospective or licensed cannabis establishments or another person in connection with activity that the professional reasonably believes complies with the Cannabis Regulation Act and rules promulgated pursuant to that act.

The provisions of this section shall not apply to e e 17 an attorney licensed to practice law in this state.

e e n d 18 SECTION 22.

[NEW MATERIAL ] PROTECTIONS FOR THE USE OF = = l ] 19 CANNABIS.--A person or a licensee shall not be subject to a l r i 20 arrest, prosecution, penalty, civil liability or disciplinary t e a t action by a business or professional licensing entity and shall m m 21 e d r e 22 not be denied any right or privilege solely for conduct allowed c e r c 23 pursuant to the Cannabis Regulation Act.

Except by court e a n b 24 order, state and local law enforcement agencies shall not u [ cooperate with or provide assistance to the United States .214675.3 - 38 - SJC/SB 577 government, or 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.

The New Mexico supreme court and any disciplinary or character and fitness committees established by that court are considered business or professional licensing entities for the purposes of this section.

SECTION 23.

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

A school shall not refuse to enroll or otherwise penalize a person for conduct allowed pursuant to the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act, unless failing to do so would cause the school to lose a monetary or licensing-related benefit under federal law or regulation.

A person may prohibit or restrict any of the e e 17 actions or conduct otherwise allowed under Section 2225 of the e e n d 18 Cannabis Regulation Act on that person's privately owned = = l ] 19 property.

a l r i 20 C.

A person shall not be denied custody of or t e a t visitation or parenting time with a child for conduct allowed m m 21 e d under Section 2225 of the Cannabis Regulation Act or under the r e 22 c e r c 23 Lynn and Erin Compassionate Use Act, unless the person'scourt behaviore createsa ann immediateb danger24 todetermines that the safetyperson's ofbehavior theis childcontrary asto establishedthe bybest clearu and[ convincinginterests evidence.of the child.

For.214675.3 the- purposes39 of- thisSJC/SB subsection,577 aSECTION determination24. that behavior creates an "immediate danger" shall not be based solely on e e 17 whether, when or how often a person uses cannabis or medical e e n d 18 cannabis.

=[NEW =MATERIAL l ] 19EMPLOYMENT SECTIONPROTECTIONS.-- 21.A.

[NEWIt MATERIALshall ]be EMPLOYMENTunlawful PROTECTIONS.--to take an adverse employment action against an employee who is not acting in a lsafety-sensitive rposition ibased 20on A.conduct allowed under the Lynn and Erin Compassionate Use Act.

NothingB. in the Cannabis Regulation Act shall t e a t prevent or infringe upon the rights of an employer to m m 21 e d r e 22 adopt and implement a zero-tolerance policy regarding the use c e r c 23 of cannabis.

ANothing zero-tolerancein policythis maysection permitshall: the discipline e a n b 24 or termination of an employee on the basis of a positive drug u [ test that indicates any amount of THC or THC metabolites.

.212180.9(1) -restrict 31an -employer's B.ability to prohibit or take adverse employment action against an employee for the possession or use of intoxicating substances at work during work hours;

Nothing(2) inrequire the Cannabis Regulation Act shall prevent or prohibit an employer fromto adoptingcommit andany enforcingact polices and procedures that providewould forcause disciplinethe upemployer to andbe includingin terminationviolation of anfederal employeelaw for possession or usethat ofwould cannabisresult atin the workplaceloss where use of cannabisa substantivelyfederal impactscontract the employee's ability to perform the employee's job duties or wherefederal usefunding; of recreational cannabis creates any risk to the safety of persons or property.

C.or (3) prevent or infringe upon the rights of an employer to adopt and implement a written zero-tolerance policy e e 17 regarding the use of cannabis.

ForA zero-tolerance policy may e e n d 18 permit the purposesdiscipline or termination of thisan section,employee "THC"on meansthe delta-9-tetrahydrocannabinol.= = l ] 19 basis of a positive drug test that indicates any amount of a l r i 20 delta-9-tetrahydrocannabinol or delta-9-tetrahydrocannabinol t e a t metabolite.

SECTIONm 22.m 21 e d C.

As used in this section, "adverse employment r e 22 c e r c 23 action" means refusing to hire or employ a person;

barring or e a n b 24 discharging a person from employment;

requiring a person to u [ retire from employment;

or discriminating against an employee .214675.3 - 40 - SJC/SB 577 in compensation or in terms, conditions or privileges of employment.

D.

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

SECTION 25.

Notwithstanding any other provision of law, the following conduct is lawful for a person who is twenty-one years of age or older and shall not constitute grounds for detention, search or arrest of a person and cannabis items that relate to the conduct are not contraband or subject to seizure e e 17 or forfeiture pursuant to the Controlled Substances Act or the e e n d 18 Forfeiture Act;

provided that the person has proof that the =e =e l17 ] 19 cannabis items were purchased from a state store or are a llicensed re ie 20n d 18 dispensary or are authorized pursuant to the medical cannabis = = l ] 19 program:

ta el ar ti 20 (1) possessing, using, being under the mt m 21 e da rt e 22 influence of, displaying, purchasing, obtaining or transporting cm em r21 ce 23d not more than one-halfone ounce of cannabis or foureight grams of cannabis r e a22 nc be 24r cannabisc 23 extracts;

ue [a n b 24 (2) transferring, without financial .212180.9u -[ 32 - consideration, to a person who is twenty-one years of age or .214675.3 - 41 - SJC/SB 577 older not more than one-halfone ounce of cannabis or foureight grams of cannabis extracts;

and e e 17 (7) assisting another person who is twenty-one e e n17 d 18 years of age or older in, or allowing property to be used in, =e =e ln ]d 1918 any of the acts described in Paragraphs (1) through (6) of this a= = l r] i19 20 subsection.

ta el ar ti 20 B.

Paragraphs (6) and (7) of Subsection A of this mt m 21 e da rt e 22 section are intended to meet the requirements of 21 U.S.C.

cm em r21 ce 23d Section 863(f) by authorizing, under state law, any person in r e a22 nc be 24r c 23 compliance with this section to manufacture, possess or ue [a n b 24 distribute cannabis paraphernalia.

.212180.9u -[ 33 - SECTION 23.26.

[NEW MATERIAL ] LIMITS ON PERSONAL .214675.3 - 42 - SJC/SB 577 CONSUMPTION--PENALTIES.-- A.

Nothing in Section 2225 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 2225 of the Cannabis Regulation Act on the individual's or private entity's privately owned property.

e e 17 SECTION 24.27.

[NEW MATERIAL ] UNLICENSED SALES OF CANNABIS-- e e n17 d 18 PENALTIES.-- =e =e ln ]d 1918 A.

Except as allowed in the Cannabis Regulation a= = l r] i19 20 Act, the Lynn and Erin Compassionate Use Act or Chapter 76, ta el ar ti 20 Article 24 NMSA 1978, it is unlawful for a person without a mt m 21 e da rt e 22 license to intentionally distribute cannabis items.

cm em r21 ce 23d B.

A person under eighteen years of age who r e a22 nc be 24r c 23 violates Subsection A of this section shall:

ue [a n b 24 (1) for a first violation, be subject to:

.212180.9u -[ 34 - (a) a fine of one hundred dollars .214675.3 - 43 - SJC/SB 577 ($100);

(a) a fine of one thousand dollars e e 17 ($1,000);

e e n17 d 18 (b) attendance at a four-hour drug =e =e ln ]d 1918 education program;

a= = l r] i19 20 (c) not less than one hundred hours of ta el ar ti 20 community service;

and mt m 21 e da rt e 22 (d) restorative justice mediation.

cm em r21 ce 23d C.

A person eighteen years of age or older who r e a22 nc be 24r c 23 violates Subsection A of this section is guilty of a ue [a n b 24 misdemeanor and shall be sentenced pursuant to the provisions .212180.9u -[ 35 - of Section 31-19-1 NMSA 1978.

.214675.3 - 44 - SJC/SB 577 D.

SECTION 25.28.

[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 e e 17 resident.

A person who violates this section is guilty of a e e n17 d 18 misdemeanor and shall be sentenced pursuant to the provisions =e =e ln ]d 1918 of Section 31-19-1 NMSA 1978.

a= = l r] i19 20 SECTION 26.29.

[NEW MATERIAL ] UNLAWFUL POSSESSION OF ta el ar ti 20 CANNABIS--PENALTIES.--Except as allowed in the Lynn and Erin mt m 21 e da rt e 22 Compassionate Use Act:

cm em r21 ce 23d A.

a person eighteen years of age or older and r e a22 nc be 24r c 23 younger than twenty-one years of age shall not possess cannabis ue [a n b 24 items.

A person who violates this subsection shall be subject .212180.9u -[ 36 - to:

.214675.3 - 45 - SJC/SB 577 (1) a fine of seventy-five dollars ($75.00);

or as allowed in the Cannabis Regulation Act, a person twenty-one years of age or older shall not possess e e 17 cannabis containing more than three-tenths percent e e n17 d 18 tetrahydrocannabinol except pursuant to a certificate of =e =e ln ]d 1918 purchase issued by a state store or adual-licensed validdispensary. medical license.

A= a= l r] i19 20A person who violates this subsection, if the amount is:

ta el ar ti 20 (1) one-halfone ounce of cannabis or foureight grams mof mt 21 e da rt e 22 of cannabis extracts or less, shall be subject to a civil cpenalty em rm c21 23e penaltyd of five hundred dollars ($500);

r e a22 nc be 24r c 23 (2) more than one-halfone ounce of cannabis or ueight [e foura n b 24 grams of cannabis extracts but not more than one pound of .212180.9u -[ 37 - cannabis or one hundred twenty-eight grams of cannabis .214675.3 - 46 - SJC/SB 577 extracts, is guilty of a petty misdemeanor and shall be sentenced to a fine in an amount not less than one thousand dollars ($1,000) and not more than five thousand dollars ($5,000);

SECTION 27.30.

[NEW MATERIAL ] UNLICENSED PRODUCTION OF CANNABIS--PENALTIES.--Except as allowed in the Cannabis Regulation Act or the Lynn and Erin Compassionate Use Act:

A person who violates this e e 17 subsection shall be subject to:

e e n17 d 18 (1) a fine of fifty dollars ($50.00);

or =e =e ln ]d 1918 (2) attendance at a four-hour drug education a= = l r] i19 20 program or four hours of community service;

ta el ar ti 20 B.

a person eighteen years of age or older and mt m 21 e da rt e 22 younger than twenty-one years of age shall not produce cm em r21 ce 23d cannabis.

A person who violates this subsection shall be r e a22 nc be 24r c 23 subject to a civil penalty of fifty dollars ($50.00);

and ue [a n b 24 C.

a person twenty-one years of age or older shall .212180.9u -[ 38 - not possess any cannabis plant.

In addition to any criminal .214675.3 - 47 - SJC/SB 577 penalty, a person who violates this subsection shall be subject to a civil penalty of two hundred fifty dollars ($250).

SECTION 28.31.

SECTION 29.32.

[NEW MATERIAL ] DESTRUCTION OF ARREST AND CONVICTION RECORDS--PROCEDURE--RETROACTIVE.-- A.

Records held by a court, an agency of the state or a local jurisdiction that relate to a person's arrest or conviction for possession of one ounce or less of cannabis in violation of Section 30-31-23 NMSA 1978 shall not be kept e e 17 beyond two years from the date of the person's conviction or e e n d 18 from the date of the person's arrest if there was no = = l ] 19 conviction.

If the person was a juvenile at the time of the a l r i 20 arrest or conviction, the records shall be retained until the t e a t offender is eighteen years of age and shall then be destroyed.

m m 21 e d r e 22 The records shall also be removed from any statewide criminal c e r c 23 databases.

e a n b 24 B.

If a person whose records would be subject to u [ destruction pursuant to Subsection A of this section is .214675.3 - 48 - SJC/SB 577 incarcerated for an offense listed in that subsection at the time the person's records would be destroyed, the two-year record retention period shall begin upon the person's release from incarceration.

C.

Records held by a court, an agency of the state or a local jurisdiction that relate to a person's arrest for trafficking cannabis in violation of Section 30-31-20 NMSA 1978, distribution of cannabis, possession with intent to distribute cannabis in violation of Section 30-31-22 NMSA 1978 or possession of more than one ounce of cannabis in violation of Section 30-31-23 NMSA 1978 shall not be kept beyond two years from the date of the person's arrest if there was no conviction.

If the person was a juvenile at the time of the arrest, the records shall be retained until the offender is eighteen years of age and shall then be destroyed.

The records shall also be removed from any statewide criminal databases.

e e 17 D.

For the purpose of this section, "records" e e n d 18 includes records of arrests resulting in a criminal proceeding = = l ] 19 and records relating to other offenses charged in the a l r i 20 accusatory pleading, whether the defendant was acquitted, t e a t convicted or the charges were dismissed.

m m 21 e d SECTION 33.

[NEW MATERIAL ] RECALL OR DISMISSAL OF r e 22 c e r c 23 SENTENCES--INCARCERATED PERSONS.-- e a n b 24 A.

Within thirty days following the effective date u [ of the Cannabis Regulation Act, a corrections facility, a .214675.3 - 49 - SJC/SB 577 county jail or a juvenile corrections facility in which a person is currently incarcerated for possession of one ounce or less of marijuana in violation of Section 30-31-23 NMSA 1978 or possession of drug paraphernalia, or that would have resulted in a lesser offense if that act had been in effect at the time of the offense, shall notify the court that the convicted person's case should be reopened to consider possible recall or dismissal of the person's sentence.

B.

A court shall reopen a case pursuant to Subsection A of this section and recall the person's sentence or dismiss the person's sentence because it is legally invalid, unless the court determines that doing so would pose an unreasonable risk of danger to public safety.

C.

A person who is resentenced pursuant to this section shall be given credit against the person's new sentence for time already served.

e e 17 D.

A person who is resentenced pursuant to this e e n d 18 section shall not be sentenced to a term longer than the = = l ] 19 person's original sentence and shall not have any charges a l r i 20 reinstated that were originally dismissed pursuant to a t e a t negotiated plea agreement.

m m 21 e d E.

A person who has completed the person's sentence r e 22 c e r c 23 for a conviction, whether by trial or negotiated plea, who e a n b 24 would not have been guilty of an offense or who would have been u [ guilty of a lesser offense if the Cannabis Regulation Act had .214675.3 - 50 - SJC/SB 577 been in effect at the time of the offense may notify the court in writing to have the conviction dismissed and sealed because the prior conviction is now legally invalid or redesignated as an infraction.

The court shall redesignate the conviction as an infraction or dismiss and seal the conviction as legally invalid because of the enactment of the Cannabis Regulation Act unless the court makes a finding that the conviction is not legally invalid or was not redesignated as an infraction pursuant to that act.

F.

The court clerk shall notify the department of public safety that a case has been dismissed.

Upon notice, the department of public safety shall erase the arrest record pertaining to the offense;

provided that, if the arrest included multiple charges, only the related charge shall be erased.

G.

Nothing in this section is intended to diminish e e 17 or abrogate any rights or remedies otherwise available to a e e n d 18 person who was convicted of or incarcerated for an offense.

= = l ] 19 H.

The provisions of this section shall apply a l r i 20 equally to juvenile delinquency adjudications and convictions t e a t of a juvenile person if the juvenile would not have been guilty m m 21 e d of an offense or would have been guilty of a lesser offense as r e 22 c e r c 23 provided in the Cannabis Regulation Act.

e a n b 24 I.

No fee or cost of any kind shall be imposed u [ against a person whose sentence is reviewed pursuant to this .214675.3 - 51 - SJC/SB 577 section.

SECTION 34.

SECTION 30.35.

[NEW MATERIAL ] CANNABIS REGULATION FUND.-- e e 17 A.

The "cannabis regulation fund" is created in the e e n d 18 state treasury.

The fund consists of appropriations, gifts, = = l ] 19 grants, donations and fees collected pursuant to the Cannabis a l r i 20 Regulation Act.

Any unexpended or unencumbered balance t e a t remaining at the end of any fiscal year shall revert to the m m 21 e d r e 22 general fund.

c e r c 23 B.

The commission shall administer the fund, and e a n b 24 money in the fund is appropriated to the commission to support u [ the commission in its duties established in the Cannabis .212180.9 - 39 - Regulation Act.

Money from the fund shall not be used for e e 17 capital expenditures.

e e n d 18 C.

Money in the fund shall be disbursed on warrants = = l ] 19 signed by the secretary of finance and administration pursuant a l r i 20 to vouchers signed by the director or the director's authorized t e a t representative.