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SB 288 CANNABIS REGULATION ACT

Current Location: SJC
Referrals: SJC/SJC/SFC

[3] STBTC/SJC/SFC-STBTC [14] DNP-CS/DP-SJC

SB 288 PDF  |  SB 288 FIR


Scheduled on - Date:  Time:   Location:

3/10/2021 [14]STBTC - Do Not Pass - Committee Substitute Do Pass Senate Judiciary (SJC)
2/01/2021 [3] - Sent to location Senate Tax, Business and Transportation (STBTC)
Synopsis:

 Senate Bill 288 (SB 288) enacts the Cannabis Regulation Act and the Cannabis Tax Act and legalizes, regulates, and taxes recreational marijuana for people 21 or older. SB 288 creates a state agency, Cannabis Control Commission to oversee state-controlled cannabis sales. The bill establishes the Cannabis Regulation Fund and the Road Safety Fund and imposes a 2% excise tax. SB makes an appropriation and declares an emergency.

Analysis:

 Senate Bill 288 (SB 288) enacts the Cannabis Regulation Act, a comprehensive proposal to legalize cannabis for people 21 years old and over. The bill provides possession, use, and purchase up to 2 ounces of cannabis. SB 288 proposes the governing of state-controlled cannabis sales and creates the Cannabis Regulation Fund and the Road Safety Fund (RSF). The bill creates a 2% excise tax with distributions to the Local DWI Grant Fund and RSF. The bill allows cities and counties to opt-out of allowing retail marijuana sales.  SB 288 makes technical, conforming statute changes.

1. SB 288 creates the Cannabis Control Commission (CCC) as a state agency.  It consists of politically mixed members who serve in advisory roles and as cannabis industry experts. Five of the eight members are appointed by the governor with consent of the senate, and the remainder represent the New Mexico Environment Department (NMED), Department of Health (NMDOH), Department of Agriculture (NMDA). With the exception of the provisions of the Lynn and Erin Compassionate Use Act (LECUA), the CCC will regulate and administer the testing, manufacturing, packaging and transportation of cannabis items. By September 1, 2021, CCC must establish rules including license issuance, security for establishments, product labeling and advertisement. LECUA will be regulated by NMED.
2. In consultation with NMED, CCC will establish health and safety standards and quality control standards for cannabis products.  
3.  In consultation with the NMDA and the NMED, the Division must establish rules regarding use of pesticides, environmental protections, compliance with environmental laws, and occupational health and safety standards for employees in the cannabis industry.  
4. Dispensaries within 300 feet of child-related locations, i.e., schools, childcare centers, parks, and libraires are prohibited.
5. DOH is required to appoint a Public Health and Safety Advisory Committee that will provide annual reports on the health and safety issues.
5. The bill requires annual reporting by police and sheriff’s departments to the Department of Public Safety (DPS) regarding cannabis-related violations and demographic data. DPS will compile and publish the reports.
6. NMED will regulate and license manufacturers, adult-use and medical cannabis dual-licensed dispensaries, and testing labs. Licenses will be issued beginning September 1, 2022. 
7. Commercial cannabis licensees must sell to both medical cannabis patients and other consumers at percentages to be determined by NMED. Products are to meet quality standards.
8. NMDA will regulate producers and begin license issuance by June 1, 2022.
9. CCC will regulate lounges for on-site cannabis use. They will license couriers (a person who transports cannabis directly to consumer) after 2021.
10. CCC is allowed to determine license fees, but such fees must be scaled to reflect the size of the business.  Fees collected go to the Cannabis Regulation Fund.
11. Licenses may be revoked or suspended in cases of fraud, felony convictions, or violations of the Act.
12. Dispensaries within one mile of each other in the same county will not be licensed.
13. Applications may be denied if (a) the applicant or controlling person in the entity has been convicted of an offense substantially related to the qualifications, functions or duties of the business (i.e., fraud, deceit, embezzlement, hiring underage persons to engage in controlled substances); (b) violated this Act; (c) an offense involving distribution of alcohol or controlled substance to a minor; or (d) the applicant has had a medical cannabis license revoked in the past three years.  However, the CCC has discretion to review the conviction and any rehabilitation of the applicant, and convictions relating to controlled substances are not to be the sole ground on which to deny a license.  
14. Allows local jurisdictions to adopt by ordinance or resolution, time, place and manner rules, limit the location of a cannabis establishment or state school, and prohibit the operation of a state store or a dual licensed dispensary.  Local jurisdictions can’t prevent the transportation of cannabis that complies with the Act, prohibit the personal production of cannabis for personal use or prohibit the operation of a medical cannabis-only retail business. 
15. Licensees are afforded legal protections against forfeiture or other penalties for those who adhere to the Act.  
16. Licensees must not employ persons younger than 21 or sell cannabis products to persons younger than 21.  A violation for this can result in a fine up to $10,000 and revocation of license.  The bill provides a list of affirmative defenses.  A person who is 18 or older and intentionally traffics (sells, gives away or possesses with the intent to distribute) marijuana to a minor is guilty of a fourth-degree felony.  
18. SB 288 provides rules on labeling cannabis items, such as child-resistant packaging, must not appeal to children, list the ingredients and display warnings.  Cannabinoids must not exceed 10 milligrams tetrahydrocannabinol per serving.  
19. NMED must create rules to govern the licensing of a cannabis manufacturer and cannabis testing laboratory.  
20. CCC will promulgate rules regarding restrictions of advertising and marketing of cannabis products.  Before a cannabis product is sold, a sample of the product must be tested by a cannabis testing laboratory to determine if the chemical profile conforms to its label and whether there are harmful levels of contaminants.  
21. The legislation provides that contracts and professional services are not subject to criminal or civil discipline for conduct allowed under the Act.  Except by court order, state and local law enforcement agencies shall not cooperate with the US government in enforcing federal drug laws for conduct that complies with the Act.
22. School are prohibited from refusing to enroll or penalize a person for conduct allowed under the Act, unless it would cause the school to lose a monetary or licensing-related benefit under federal law or regulation.  A person may prohibit cannabis activity on their own property.  A person can’t be denied custody of or visitation or parenting time with a child for conduct allowed under the Act unless the court determines that the person’s behavior is contrary to the best interests of the child. 
23. Employers cannot take adverse employment action against an employee based on conduct allowed under the medical marijuana act.  However, an employer may prohibit or take adverse action against an employee for the possession or use of intoxicating substances at work; implement a zero-tolerance policy regarding cannabis.  Employers can be required to commit an act that would cause them to violate federal law or would result in a loss of a federal contract or funding.  Workplaces must post signs of the risks of cannabis and possible disciplinary action.  
24. The bill provides that an adult 21 years or older may possess, use, purchase up to 2 ounces of cannabis and give another adult up to 2 ounces of cannabis or cannabis paraphernalia.  Smoking cannabis or consuming cannabis items in public is not allowed; the penalty for this is a $50 civil fine.  A minor (a person under 18) who sells cannabis without a license or illegally possesses cannabis is subject to fines, educational programs and community service.  An adult who sells cannabis without a license is guilty of a misdemeanor.  Possessing or distributing cannabis within 300 feet of certain areas is a misdemeanor crime.  A person 18-21 who illegally possess cannabis or produces cannabis is subject to fines, educational programs, and community service.  An adult who possesses more cannabis than the Act allows is subject to a civil penalty to a fourth-degree felony, depending on amount possessed.  Manufacturing cannabis extracts without a license results in a civil fine.
25. The Cannabis Regulation Fund administered by CCC to support its duties established by the Act.
26. The Road Safety Fund is administered by DPS for implementing best practices in law enforcement around cannabis use and misuse and for the training and purchasing of roadside impairment tests.
27. SB 288 enacts the Cannabis Tax Act and imposes a 2% excise tax and 2% municipal and county government excise taxes. 
28. The distribution of the Cannabis Excise Tax
•	Local DWI Grant Fund: 6%
•	Road Safety Fund: 2%
29. Taxpayers who comply with the Act are prohibited from claiming business expenses or credits on their federal income tax returns.
30.  Wholesale cannabis producers and medical marijuana are exempt from Gross Receipts Tax (GRT).
31. All state agencies are compelled to cooperate with CCC.

The bill amends numerous sections of law to comport with the changes created by the Act, such as eliminating references to marijuana and hashish as a controlled substance in the criminal code (possession or distribution of synthetic cannabinoids is still a crime) and possession of drug paraphernalia.  

SB 288 declares an emergency.

Amendments:

Current Law:Currently, the sale of cannabis is only permitted to those in possession of a medical cannabis card; otherwise, criminal penalties are imposed for the possession or distribution of marijuana and for the possession of drug paraphernalia.