HB0089

HOUSE BILL 89

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Bill McCamley and Javier Martínez

AN ACT

RELATING TO CANNABIS; ENACTING THE CANNABIS REVENUE AND FREEDOM ACT; ENACTING THE CANNABIS TAX ACT; PROVIDING DUTIES AND POWERS OF THE REGULATION AND LICENSING DEPARTMENT, THE TAXATION AND REVENUE DEPARTMENT, THE NEW MEXICO DEPARTMENT OF AGRICULTURE AND THE DEPARTMENT OF HEALTH; CREATING THE CANNABIS CONTROL BOARD AND PROVIDING DUTIES AND POWERS; REVISING THE LYNN AND ERIN COMPASSIONATE USE ACT; REVISING SECTIONS OF LAW RELATED TO MARIJUANA; CREATING THE SUBSTANCE ABUSE PREVENTION AND BEHAVIORAL HEALTH FUND, THE DISTRICT ATTORNEY PUBLIC SAFETY FUND, THE PUBLIC DEFENDER PUBLIC SAFETY FUND AND THE CANNABIS REVENUE ECONOMIC DEVELOPMENT FUND; PROVIDING AND REVISING PENALTIES; MAKING APPROPRIATIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 48 of this act may be cited as the "Cannabis Revenue and Freedom Act".

SECTION 2. [NEW MATERIAL] PURPOSE.--The purpose of the Cannabis Revenue and Freedom Act is:

A. to eliminate problems caused by the prohibition and uncontrolled manufacture, possession and delivery of marijuana within New Mexico;

B. to protect the peace, health, safety and welfare of the people of this state by prioritizing the state's limited law enforcement resources in the most effective way;

C. to establish a comprehensive regulatory framework relating to marijuana;

D. to allow a person who is licensed by this state to legally manufacture and sell marijuana to a person who is twenty-one years of age or older, subject to the provisions of that act;

E. to provide a licensing and permitting system for industrial hemp and agricultural hemp seed production; and

F. together with existing provisions of law, to prevent:

(1) the distribution of marijuana to a person who is younger than twenty-one years of age;

(2) revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels;

(3) the diversion of marijuana from this state to other states;

(4) legal marijuana activity from being used as a cover for the trafficking of illegal drugs or for other illegal activity;

(5) violence and the use of firearms in the cultivation and distribution of marijuana;

(6) impaired driving and the exacerbation of other adverse public health consequences associated with the use of marijuana;

(7) the growing of marijuana on public land and the attendant public safety and environmental dangers posed by marijuana production on public land; and

(8) the possession and use of marijuana on federal property.

SECTION 3. [NEW MATERIAL] DEFINITIONS.--As used in the Cannabis Revenue and Freedom Act:

A. "advisory board' means the advisory board created pursuant to the Lynn and Erin Compassionate Use Act;

B. "agricultural hemp seed" means seed of the plant of the genus Cannabis that is intended for sale or is sold to or purchased by a licensed grower for planting;

C. "board" means the cannabis control board;

D. "consumer" means a person who purchases, acquires, owns, holds or uses marijuana items for a purpose other than resale;

E. "crop" means a contiguous field of industrial hemp grown pursuant to a single license;

F. "department" means the regulation and licensing department;

G. "financial consideration":

(1) means the value that is given or received, directly or indirectly, through sales, barter, trade, fees, charges, dues, contributions or donations; and

(2) does not mean the value in homegrown marijuana or homemade marijuana products that are grown or made by another person;

H. "grower" means a person that produces industrial hemp;

I. "handler" means a person that receives industrial hemp for processing into commodities, products or agricultural hemp seeds;

J. "homegrown" or "homemade" means grown or made by a person who is twenty-one years old or older for noncommercial purposes;

K. "household" means a housing unit and includes any place in or around the housing unit at which an occupant of the housing unit produces, processes, keeps or stores homegrown marijuana or homemade marijuana products;

L. "housing unit" means a house, an apartment, a mobile home, a group of rooms or a single room that is occupied as separate living quarters in which an occupant lives and eats separately from any other persons in the building who do not occupy the same housing unit, and which unit includes direct access from the outside of the building or through a common hall;

M. "immature marijuana plant" means a marijuana plant with no observable flowers or buds;

N. "industrial hemp":

(1) means:

(a) all non-seed parts and varieties of the plant of the genus Cannabis, whether growing or not, that contain a crop-wide average tetrahydrocannabinol concentration that does not exceed three-tenths percent on a dry weight basis; and

(b) any Cannabis sativa seed that is part of a growing crop, is retained by a grower for future planting or is for processing into or use as agricultural hemp seed; and

(2) does not mean industrial hemp commodities or products;

O. "license" means a license issued pursuant to the Cannabis Revenue and Freedom Act;

P. "licensed premises" means a location that is licensed pursuant to the Cannabis Revenue and Freedom Act and includes:

(1) all enclosed public and private areas at the location that are used in the business operated pursuant to a license at the location, including offices, kitchens, restrooms and storerooms;

(2) all areas outside of a building that the department has specifically licensed for the production, processing, wholesale sale or retail sale of marijuana items; and

(3) with respect to a location that the department has specifically licensed for the production of marijuana outside of a building, the entire unit of land that is created by subdivision or partition of land that the licensee owns, leases or has a right to occupy;

Q. "licensee" means a person who holds a license;

R. "licensee representative" means an owner, director, officer, manager, employee, agent or other representative of a licensee, to the extent that the person acts in a representative capacity;

S. "marijuana" means all parts of the plant cannabis, including any and all varieties, species and subspecies of the genus Cannabis, whether growing or not, but does not mean marijuana extracts, industrial hemp or industrial hemp commodities or products;

T. "marijuana consumption area" means an area within a marijuana retailer's licensed premises where marijuana items may be consumed;

U. "marijuana extract" means a product obtained by separating resins from marijuana by solvent extraction, using solvents other than vegetable glycerin, such as butane, hexane, isopropyl alcohol, ethanol or carbon dioxide;

V. "marijuana flowers" means only the flowers of a marijuana plant;

W. "marijuana items" means marijuana, marijuana products and marijuana extracts;

X. "marijuana leaves" means only the leaves of a marijuana plant;

Y. "marijuana processor" means a person who processes marijuana items in this state;

Z. "marijuana producer" means a person who produces marijuana in this state;

AA. "marijuana products" means products that contain marijuana or marijuana extracts and that are intended for human consumption, but does not mean marijuana by itself or a marijuana extract by itself;

BB. "marijuana retailer" means a person who sells marijuana items to a consumer in this state;

CC. "marijuana wholesaler" means a person who purchases marijuana items in this state for resale in this state to a person other than a consumer;

DD. "mature marijuana plant" means a marijuana plant that is not an immature marijuana plant;

EE. "medical cannabis program" means the regulated system allowing for the beneficial use of medical cannabis established in the Lynn and Erin Compassionate Use Act;

FF. "noncommercial" means not dependent or conditioned upon the provision or receipt of financial consideration;

GG. "person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or any legal or commercial entity;

HH. "personal production license" means "personal production license" as that phrase is defined in the Lynn and Erin Compassionate Use Act;

II. "processes":

(1) means:

(a) the processing, compounding or conversion of marijuana into marijuana products or marijuana extracts;

(b) the processing, compounding or conversion of marijuana, either directly or indirectly, by extraction from substances of natural origin or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis;

(d) the labeling or relabeling of a package or container of marijuana items; and

(2) does not mean:

(a) the drying of marijuana by a marijuana producer, if the marijuana producer is not otherwise processing marijuana; or

(b) the packaging and labeling of marijuana by a marijuana producer in preparation for delivery to a marijuana processor;

JJ. "produces" means the manufacture, planting, cultivation, growing or harvesting of marijuana, but does not include:

(1) the drying of marijuana by a marijuana processor, if the marijuana processor is not otherwise producing marijuana; or

(2) the cultivation and growing of an immature marijuana plant by a marijuana processor, marijuana wholesaler or marijuana retailer if the marijuana processor, marijuana wholesaler or marijuana retailer purchased or otherwise received the plant from a licensed marijuana producer;

KK. "public place" means a place to which the general public has access and includes hallways, lobbies and other parts of apartment houses and hotels that do not constitute rooms or apartments designed for actual residence; highways; streets; schools; places of amusement; parks; playgrounds; and places used in connection with public passenger transportation;

LL. "qualified patient" means "qualified patient" as that phrase is defined in the Lynn and Erin Compassionate Use Act; and

MM. "usable marijuana" means dried marijuana flowers and dried marijuana leaves and any mixture or preparation of those flowers or leaves.

SECTION 4. [NEW MATERIAL] LIMITATIONS--EXEMPTIONS--PERMISSIBLE CONDUCT.--The Cannabis Revenue and Freedom Act shall not:

A. be construed to:

(1) amend or affect in any way a state or federal law pertaining to employment matters;

(2) amend or affect in any way a state or federal law pertaining to landlord-tenant matters;

(3) prevent a recipient of or an applicant for a federal grant from prohibiting the manufacture, possession, delivery or use of marijuana items to the extent necessary to satisfy the federal grant's requirements;

(4) prevent a party or a person applying to be a party to a federal contract from prohibiting the manufacture, possession, delivery or use of marijuana items to the extent necessary to comply with the contract terms and conditions or to satisfy the federal contract's requirements;

(5) require a person to violate a federal law;

(6) exempt a person from a federal law or obstruct the enforcement of a federal law; or

(7) amend or affect in any way the Lynn and Erin Compassionate Use Act; and

B. apply to:

(1) the possession of usable marijuana by a person who is twenty-one years of age or older, if the total of usable marijuana does not exceed:

(a) two ounces at the person's household; or

(b) one ounce outside the person's household;

(2) the possession of up to seven grams of marijuana extract by a person who is twenty-one years of age or older;

(3) the production, processing, keeping or storing of homegrown marijuana at a household by one or more persons who are twenty-one years of age or older, if the total of homegrown marijuana at the household does not exceed at any given time:

(a) six marijuana plants per person; provided, however that no more than twelve marijuana plants may be present in one household;

(b) six immature marijuana plants; and

(4) the making, processing, keeping or storing of homemade marijuana products at a household by one or more persons who are twenty-one years of age or older, if the total of homemade marijuana products at the household does not exceed at any given time:

(a) sixteen ounces in solid form; or

(b) seventy-two ounces in liquid form;

(5) the delivery for noncommercial purposes by a person who is twenty-one years of age or older to another person who is twenty-one years of age or older of not more than one ounce of homegrown marijuana at any given time;

(6) the delivery for noncommercial purposes by a person who is twenty-one years of age or older to another person who is twenty-one years of age or older of:

(a) not more than sixteen ounces, at any given time, of homemade marijuana products in solid form; or

(b) not more than seventy-two ounces, at any given time, of homemade marijuana products in liquid form;

(7) the transport of homegrown marijuana, immature marijuana plants or homemade marijuana products as described in Paragraphs (2), (3) and (4) of this subsection by a person who is twenty-one years of age or older when that person is moving the person's residence to another location; or

(8) a person who acts pursuant to and in compliance with the Lynn and Erin Compassionate Use Act.

SECTION 5. [NEW MATERIAL] CANNABIS CONTROL BOARD--CREATED.--

A. The "cannabis control board" is created and is administratively attached to the department. The board shall consist of eleven members appointed by the governor with the advice and consent of the senate. All members of the board shall be residents of New Mexico and citizens of the United States and no more than six members shall be from the same political party. The board shall include:

(1) two members who are licensed pursuant to the Cannabis Revenue and Freedom Act;

(2) two members who are medical or public health professionals;

(3) one member who is a qualified patient in the medical cannabis program;

(4) one member who is an interested member of the public;

(5) one member who is a banking or finance professional;

(6) one member who is a representative of the regulation and licensing department;

(7) one member who is a representative of the New Mexico department of agriculture;

(8) one member who is a representative of the department of health; and

(9) one member who is a representative of the department of environment.

B. Members shall be appointed to five-year terms, except that initial appointments to the board shall be made by October 1, 2017, as follows:

(1) the two members who are medical or public health professionals and the member who is a banking or finance professional shall be appointed to one-year terms;

(2) the two members who are licensed pursuant to the Cannabis Revenue and Freedom Act shall be appointed to two-year terms;

(3) the member who is a qualified patient in the medical cannabis program and the member who is an interested member of the public shall be appointed to three-year terms;

(4) the members who represent the department of health and the department of environment shall be appointed to four-year terms; and

(5) the members who represent the regulation and licensing department and the New Mexico department of agriculture shall be appointed to five-year terms.

C. A vacancy on the board shall be filled by the governor within thirty days for the unexpired portion of the term in which the vacancy occurs. A person appointed to fill a vacancy shall meet all qualifications of the position vacated.

D. The board members shall elect a board chair by majority vote. The board shall meet at the call of the chair and at least once in each calendar quarter. Six members shall constitute a quorum of the board.

E. Board members are entitled to reimbursement as provided by the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance for their service on the board.

SECTION 6. [NEW MATERIAL] CANNABIS CONTROL BOARD--DUTIES.--The board shall:

A. regulate and provide oversight of the medical cannabis program and the marijuana program established in the Cannabis Revenue and Freedom Act;

B. by January 1, 2018, establish a medical cannabis subsidy program through which the department of health shall make distributions of a portion of cannabis tax revenue to qualified patients in the medical cannabis program and promulgate rules to govern the program;

C. by January 1, 2019, and in accordance with the State Rules Act, promulgate rules related to the medical cannabis program, including rules that:

(1) with consideration of the advisory board's recommendations, establish the amount of cannabis that constitutes an adequate supply, including amounts used for topical treatments;

(2) identify the forms of cannabis that are approved for use in the medical cannabis program;

(3) address the admission of a person into hospice care as a qualifying debilitating medical condition;

(4) identify criteria and procedures by which a medical condition, medical treatment or disease may be considered and approved for inclusion on the list of debilitating medical conditions included in the medical cannabis program. The procedures shall include a petition process and shall allow for public comment and public hearings before the advisory board;

(5) establish qualifications for a person to be licensed to produce, possess, distribute or dispense cannabis and establish procedures for the evaluation of license applications;

(6) identify the process by which a person may reapply for a license after the person's application was denied;

(7) establish a procedure by which a qualified patient may produce medical cannabis for the patient's personal use;

(8) develop a distribution system for medical cannabis that provides for:

(a) cannabis production facilities within New Mexico housed on secured grounds and operated by licensed producers; and

(b) distribution of medical cannabis to qualified patients or their primary caregivers to take place at locations that are designated by the board and that are not within three hundred feet of any school, church or daycare center;

(9) until June 30, 2019, restrict the number of mature cannabis plants a licensed producer may possess at any given time to:

(a) one thousand, between July 1, 2017 and June 30, 2018; and

(b) two thousand, between July 1, 2018 and June 30, 2019;

(10) provide that a qualified patient who holds a personal production license may sell those mature cannabis plants that the patient possesses in accordance with the patient's personal production license to a licensed producer participating in the medical cannabis program or to a marijuana producer, and that the licensed producer or the marijuana producer may sell those plants in accordance with applicable law and rules; and

(11) establish any additional duties and responsibilities of the advisory board;

D. by January 1, 2019, and in accordance with the State Rules Act, promulgate rules applicable to the medical cannabis program and the marijuana program established in the Cannabis Revenue and Freedom Act that:

(1) establish standards for the growing of medical cannabis and marijuana that address, in addition to any other relevant issues, the use of pesticides and other substances in the cultivation of cannabis;

(2) establish a system for tracking medical cannabis and marijuana plants; and

(3) identify the conditions under which interstate sales of medical cannabis or marijuana are permissible;

E. regulate the use of marijuana items for scientific, pharmaceutical, manufacturing, mechanical, industrial and other purposes;

F. prohibit all advertisement of marijuana items by licensed marijuana producers, marijuana processors, marijuana wholesalers or marijuana retailers;

G. until June 30, 2019, restrict the number of marijuana plants that a marijuana producer may possess at any given time to:

(1) one thousand, between July 1, 2017 and June 30, 2018; and

(2) two thousand, between July 1, 2018 and June 30, 2019; and

H. require documentation of the source of production and the tetrahydrocannabinol concentration for all marijuana items and medical cannabis.

SECTION 7. [NEW MATERIAL] DEPARTMENT--DUTIES.--

A. The department shall:

(1) in cooperation with the board, regulate the production, processing, sale, purchase, transportation and delivery of marijuana items;

(2) as necessary, assist with the investigation and prosecution of violations of state law related to marijuana items;

(3) in consultation with the New Mexico department of agriculture, the department of health and the board, adopt rules and prescribe forms necessary to implement the provisions of the Cannabis Revenue and Freedom Act; and

(4) on or before January 1, 2019:

(a) review available research and conduct or commission any additional research necessary to examine the influence of marijuana items on a person's ability to drive a vehicle and on the concentration of delta-9 tetrahydrocannabinol in a person's blood, taking into account all relevant factors; and

(b) present the results of the department's review and examination to the appropriate legislative interim committees and make recommendations to the legislature regarding any appropriate amendments to the Motor Vehicle Code.

B. Except as provided in the Cannabis Revenue and Freedom Act, the department shall not purchase, own, sell or possess any marijuana items.

SECTION 8. [NEW MATERIAL] NEW MEXICO DEPARTMENT OF AGRICULTURE--DUTIES--POWERS.--

A. The New Mexico department of agriculture shall:

(1) cooperate with the department and the department of health to the extent necessary for each department to carry out powers and duties pursuant to the Cannabis Revenue and Freedom Act;

(2) regulate industrial hemp production and possession and regulate commerce in industrial hemp commodities and products in this state;

(3) make information that identifies sellers of agricultural hemp seed available to growers; and

(4) promulgate rules necessary to carry out duties pursuant to that act.

B. The New Mexico department of agriculture may:

(1) establish labeling, quality and other necessary standards applicable to agricultural hemp seed;

(2) with at least three days' notice and during normal business hours, inspect or audit records required to be kept by growers and handlers for the purpose of ensuring compliance with:

(a) the Cannabis Revenue and Freedom Act and rules promulgated pursuant to that act;

(b) industrial hemp license or agricultural hemp seed production permit requirements; or

(3) inspect any crop during the crop growth phase and take a representative composite sample for field analysis;

(4) detain, seize or embargo a crop if the crop contains an average tetrahydrocannabinol concentration exceeding three-tenths percent on a dry weight basis;

(5) charge growers and handlers reasonable fees;

(6) refuse, suspend or cancel an industrial hemp license or an agricultural hemp seed production permit for a violation of the Cannabis Revenue and Freedom Act;

(7) refuse, suspend or cancel an industrial hemp license or an agricultural hemp seed production permit for violation of any New Mexico department of agriculture rule relating to agricultural operations or activities; and

(8) impose a civil penalty for a violation of:

(a) a license or permit requirement, term or condition;

(b) New Mexico department of agriculture rules relating to growing or handling industrial hemp; or

C. The New Mexico department of agriculture shall not impose a civil penalty pursuant to the Cannabis Revenue and Freedom Act that exceeds two thousand five hundred dollars ($2,500). The provisions of the Administrative Procedures Act shall apply when the New Mexico department of agriculture imposes a penalty pursuant to the Cannabis Revenue and Freedom Act or refuses, suspends or cancels an industrial hemp license or an agricultural hemp seed production permit.

D. The New Mexico department of agriculture shall not refuse, suspend or cancel an industrial hemp license or an agricultural hemp seed production permit on the basis that industrial hemp production or possession or commerce in industrial hemp commodities or products is prohibited by federal law.

E. Money collected by the New Mexico department of agriculture for industrial hemp license fees and agricultural hemp seed production permit fees is appropriated to the New Mexico department of agriculture for administrative purposes.

SECTION 9. [NEW MATERIAL] DEPARTMENT OF HEALTH--DUTIES.-- The department of health shall:

A. cooperate with the board, the department and the New Mexico department of agriculture to the extent necessary for each department to carry out powers and duties pursuant to the Cannabis Revenue and Freedom Act; and

B. administer the medical cannabis subsidy program established by the board.

SECTION 10. [NEW MATERIAL] NO LIABILITY FOR OFFICIAL ACTS.--Except as otherwise provided by law, the board, the department, the New Mexico department of agriculture and the department of health shall not be sued for performing or failing to perform duties pursuant to the Cannabis Revenue and Freedom Act.

SECTION 11. [NEW MATERIAL] DUTIES OF DEPARTMENTS--FEDERAL LAW--CONTRACT ENFORCEABILITY.--

A. The board, the department, the taxation and revenue department, the New Mexico department of agriculture and the department of health shall not refuse to perform any duty provided in the Cannabis Revenue and Freedom Act on the basis that manufacturing, distributing, dispensing, possessing or using marijuana is prohibited by federal law.

B. The department and the New Mexico department of agriculture shall not refuse, suspend or cancel a license or an agricultural hemp seed production permit on the basis that manufacturing, distributing, dispensing, possessing or using marijuana is prohibited by federal law.

C. A contract shall not be deemed unenforceable on the basis that manufacturing, distributing, dispensing, possessing or using marijuana is prohibited by federal law.

SECTION 12. [NEW MATERIAL] INDUSTRIAL HEMP LICENSE--AGRICULTURAL HEMP SEED PRODUCTION PERMIT.--

A. Industrial hemp production and possession and commerce in industrial hemp commodities and products are authorized in New Mexico. Industrial hemp and agricultural hemp seed are agricultural products that are subject to regulation by the New Mexico department of agriculture.

B. All growers and handlers shall hold an industrial hemp license. A grower or handler who is engaged in the production of agricultural hemp seed shall also hold an agricultural hemp seed production permit.

C. A person who seeks an industrial hemp license or an agricultural hemp seed production permit shall submit an application to the New Mexico department of agriculture that includes:

(1) the applicant's name and address;

(2) the name and address of the applicant's industrial hemp operation;

(3) the latitude and longitude and legal description for the property to be used for industrial hemp production;

(4) if the application is submitted by a grower, information sufficient to establish that the applicant's crop will be at least two and one-half acres in size; and

(5) any other information required by the New Mexico department of agriculture.

D. An industrial hemp license or agricultural hemp seed production permit is valid for three years and may be renewed as provided by New Mexico department of agriculture rules. The license or permit is a personal privilege that is not transferable.

E. An agricultural hemp seed production permit allows a grower or handler to produce and handle agricultural hemp seed for sale to licensed industrial hemp growers and handlers. An agricultural hemp seed seller shall ensure that the seller's seed complies with any standards established by the New Mexico department of agriculture.

F. Subject to New Mexico department of agriculture rules, a grower may, without an agricultural hemp seed production permit, retain seed from each crop to ensure a sufficient seed supply for the grower's use in a subsequent year. Seed retained by a grower shall not be sold or transferred and shall not be required to meet agricultural hemp seed standards.

SECTION 13. [NEW MATERIAL] LICENSES REQUIRED.--

A. A marijuana producer shall hold a production license issued by the department for the licensed premises at which the marijuana is produced.

B. A marijuana processor shall possess a processor license issued by the department for the licensed premises at which marijuana items are processed.

C. A marijuana wholesaler shall possess a wholesale license issued by the department for the licensed premises at which marijuana items are received, kept, stored or delivered.

D. A marijuana retailer shall possess a retail license issued by the department for the licensed premises on which marijuana items are sold. A marijuana retailer that sells and allows the consumption of marijuana items in a marijuana consumption area on the retailer's licensed premises shall possess an on-site consumption endorsement to the retailer's retail license.

SECTION 14. [NEW MATERIAL] DEPARTMENT LICENSING DUTIES.--

A. The department shall:

(1) beginning July 1, 2017, accept applications for licenses to produce, process and sell marijuana items within the state from licensed producers pursuant to the Lynn and Erin Compassionate Use Act; and

(2) beginning October 1, 2017, in accordance with the provisions of the Cannabis Revenue and Freedom Act, issue licenses to qualified applicants who are already licensed producers pursuant to the Lynn and Erin Compassionate Use Act.

B. Beginning July 1, 2019, the department shall:

(1) accept applications for licenses to produce, process and sell marijuana items within the state; and

(2) issue licenses to qualified applicants in accordance with the provisions of the Cannabis Revenue and Freedom Act.

C. The department shall not:

(1) unreasonably delay the processing of applications or the issuance of licenses; or

(2) approve a licensed premises that does not have defined boundaries or a licensed premises that is mobile; provided that the department may require that a licensed premises be enclosed by a wall, fence or other structure as a condition of issuing or renewing a license.

SECTION 15. [NEW MATERIAL] LICENSE TERMS--APPLICATION-- FEES.--

A. An application for a new or renewed license shall be submitted to the department on a form prescribed by the department. The application shall include:

(1) the applicant's name and address;

(2) the location of the place of business to be operated pursuant to the license;

(3) if the application is for a production license, the applicant's certification that, in addition to any other marijuana produced, the applicant will produce at least five hundred thousand grams of marijuana for use by qualified patients of the medical cannabis program; and

(4) any other information required by the department.

B. A license shall not be issued or renewed unless the applicant has complied with the provisions of the Cannabis Revenue and Freedom Act and rules promulgated pursuant to that act.

C. All licenses shall be issued or renewed for a period of one year, except that a license issued to an applicant for the first time may be issued for less than one year. The fee for a license that is issued for less than one year shall be the annual license fee provided in this section.

D. The department may deny an application that is not submitted on the prescribed form. If an application is denied pursuant to this subsection, the department shall provide the applicant an opportunity to be heard at a hearing held that is not subject to the Administrative Procedures Act.

E. Notwithstanding the provisions of Subsections B and C of this section, the department's cancellation of or denial of an application for a license is subject to the Administrative Procedures Act.

F. The department shall assess a nonrefundable fee not greater than five hundred dollars ($500) for processing a new or renewal license application.

G. For a new or renewal processor license, wholesale license or retail license, the department shall charge an annual license fee of not more than two thousand dollars ($2,000).

H. For a new or renewal production license, the department shall charge an annual license fee of:

(1) fifteen thousand dollars ($15,000), if the marijuana producer will possess up to one hundred fifty marijuana plants; and

(2) an additional five thousand dollars ($5,000) for each additional fifty marijuana plants the marijuana producer will possess; provided, however, that the maximum fee charged for a new or renewal production license shall not exceed forty-five thousand dollars ($45,000).

I. The annual license fees provided in this section are nonrefundable and shall be paid by an applicant upon the issuance of a license.

J. Money collected by the department for license fees is appropriated to the department for administrative purposes.

SECTION 16. [NEW MATERIAL] GROUNDS FOR DENYING A LICENSE APPLICATION.--

A. The department shall not issue a license to an applicant who is younger than twenty-one years of age.

B. The department may deny a license application if the department reasonably believes:

(1) that there are sufficient licensed premises in the locality set out in the application or that issuing a license in the locality set out in the application is not demanded by public interest or convenience. In determining whether there is a sufficient number of licensed premises in a locality, the department shall consider seasonal fluctuations in the locality's population and the needs of the locality during the peak seasons; or

(2) that the applicant:

(a) uses alcoholic beverages, habit- forming drugs, marijuana items or controlled substances to excess;

(b) has made false statements to the department;

(d) notwithstanding the provisions of Subsection C of this section, has been convicted of violating a federal law or the law of any state or any local government if the conviction is substantially related to the applicant's fitness and ability to lawfully carry out activities pursuant to the license;

(e) has failed to maintain a sanitary establishment;

(f) is not of good repute and moral character;

(g) has a record of noncompliance with the Cannabis Revenue and Freedom Act or rules promulgated pursuant to that act;

(h) is not the owner of the business proposed to be licensed or that additional ownership interests in the business proposed to be licensed have not been disclosed;

(i) has not demonstrated the financial responsibility necessary for the business proposed to be licensed; or

(j) is unable to understand provisions of the Cannabis Revenue and Freedom Act or other laws or rules relating to marijuana and marijuana items.

C. In determining whether the department may deny an application for a license, the department shall:

(1) consider whether an applicant who was previously convicted as described in Subparagraph (d) of Paragraph (2) of Subsection B of this section has completed the sentence, including any period of probation or parole, related to the conviction and can demonstrate fitness and ability to fulfill the responsibilities of a licensee; and

(2) not consider the prior conviction of the applicant or any owner, director, officer, manager, employee, agent or other representative of the applicant for:

(a) the manufacture of marijuana, if: 1) the date of the conviction is more than five years before the date of the application; and 2) the person has not been convicted more than once for the manufacture or delivery of marijuana;

(b) the delivery of marijuana to a person who was twenty-one years of age or older at the time of the delivery, if: 1) the date of the conviction is more than five years before the date of the application; and 2) the person has not been convicted more than once for the manufacture or delivery of marijuana; or

SECTION 17. [NEW MATERIAL] GROUNDS FOR SUSPENDING OR CANCELING A LICENSE.--The department may suspend or cancel a license if the department finds or reasonably believes:

A. that the licensee:

(1) has violated a provision of the Cannabis Revenue and Freedom Act or a rule promulgated pursuant to that act;

(2) has made a false representation or statement to the department to induce or prevent action by the department;

(3) has maintained an unsanitary establishment;

(4) is insolvent, or otherwise unable to manage the licensee's establishment;

(5) uses alcoholic beverages, habit-forming drugs, marijuana items or controlled substances to excess;

(6) has misrepresented a marijuana item sold by the licensee to a customer or to the public; or

(7) after receiving a license, is convicted of a felony or of violating any state law relating to marijuana or marijuana items or is convicted of a misdemeanor or violation of a municipal ordinance, if that violation is committed on the licensed premises; or

B. that there is any other reason that, in the department's opinion and based on public convenience or necessity, warrants canceling or suspending a license.

SECTION 18. [NEW MATERIAL] LIMITATION ON CIVIL AND CRIMINAL LIABILITY--LICENSEES AND REPRESENTATIVES.--A licensed marijuana producer, marijuana processor, marijuana wholesaler or marijuana retailer or a licensee representative of one of those licensees may produce, possess and deliver marijuana items subject to the provisions of the Cannabis Revenue and Freedom Act, and such production, possession or delivery of marijuana items shall not constitute a criminal or civil offense pursuant to New Mexico law.

SECTION 19. [NEW MATERIAL] CHARACTERISTICS OF A LICENSE--MULTIPLE LICENSES.--

A. A license issued by the department shall:

(1) be a personal privilege;

(2) be valid only for the period stated on the license;

(3) be transferred from the licensed premises for which the license was issued to another location only as provided for in the Cannabis Revenue and Freedom Act, rules promulgated pursuant to that act and any relevant municipal ordinance or local regulation;

(4) be void upon the licensee's death, except as provided in Subsection B of this section;

(5) not constitute property;

(6) not be alienable;

(7) not be subject to attachment or execution; and

(8) not descend by the laws of testate or intestate devolution.

B. The department may provide for procedures and conditions under which:

(1) marijuana items left by a deceased, insolvent or bankrupt licensee, or marijuana items that are subject to a security interest, may be foreclosed, sold under execution or otherwise disposed of;

(2) the business of a deceased, insolvent or bankrupt licensee may be operated for a reasonable period following the death, insolvency or bankruptcy; and

(3) a business licensed by the department that is subject to a security interest may be continued in business by a secured party for a reasonable period after a debtor's default on the indebtedness.

C. A person may hold more than one production license, processor license, wholesale license or retail license.

SECTION 20. [NEW MATERIAL] AGE RESTRICTION FOR SALE OR DELIVERY OF MARIJUANA ITEMS--PURCHASER IDENTIFICATION--DEFENSE.--

A. A licensed marijuana producer, marijuana processor, marijuana wholesaler or marijuana retailer or a licensee representative of one of those licensees shall not sell or deliver marijuana items to a person who is younger than twenty-one years of age. A person who violates this subsection is guilty of distribution to a minor as provided in Subsection A of Section 30-31-21 NMSA 1978.

B. If there is a reasonable doubt that a person is twenty-one years of age or older, before selling or delivering marijuana items to the person, a licensee or licensee representative shall require the person to produce one of the following forms of identification to verify the person's age:

(1) the person's passport;

(2) the person's motor vehicle operator's license that includes a photograph of the person, whether issued in this state or in another state;

(3) an identification card issued by the motor vehicle division of the taxation and revenue department;

(4) a United States military identification card; or

(5) any other identification card that was issued by a state or an Indian nation, tribe or pueblo that includes the person's:

(a) photograph;

(b) name;

(d) physical description.

C. A person shall not produce a form of identification as provided in this section that falsely indicates the person's age.

D. In an administrative or criminal prosecution of a licensee or licensee representative for the sale or delivery of marijuana items to a person younger than twenty-one years of age as prohibited in this section, the licensee or licensee representative shall not be found to have committed the relevant violation or crime unless it is demonstrated in the administrative or criminal proceeding that a reasonable person would have determined that the form of identification shown to the licensee or licensee representative and that is offered as evidence in the proceeding was altered or did not accurately describe the person to whom the licensee or licensee representative sold or delivered marijuana items.

SECTION 21. [NEW MATERIAL] DELIVERY OF MARIJUANA ITEMS.--A marijuana producer, marijuana processor or marijuana wholesaler may deliver marijuana items only to or on a licensed premises. The sale of marijuana items pursuant to a retail license shall be restricted to sales made on the licensed premises described in the license; provided that deliveries may be made by the marijuana retailer to consumers pursuant to bona fide orders received on the licensed premises prior to delivery.

SECTION 22. [NEW MATERIAL] INSPECTION OF LICENSEE BOOKS AND LICENSED PREMISES.--

A. The department may:

(1) after seventy-two hours' notice to the owner or the owner's agent, inspect a licensee's books; and

(2) at any time, inspect the licensed premises of a licensee to determine whether the licensee is in compliance with the provisions of the Cannabis Revenue and Freedom Act and rules promulgated pursuant to that act.

B. The department shall not require a licensee's books to be maintained on the licensed premises.

SECTION 23. [NEW MATERIAL] IMPORTING AND EXPORTING MARIJUANA ITEMS PROHIBITED--PENALTIES.--

A. Marijuana items shall not be imported into this state or exported from this state by any licensee or licensee representative.

B. A violation of Subsection A of this section is a:

(1) misdemeanor if the importation or exportation is for financial consideration; or

(2) petty misdemeanor if the importation or exportation is not for financial consideration.

SECTION 24. [NEW MATERIAL] MARIJUANA ITEMS AS A PRIZE PROHIBITED.--Marijuana items shall not be given as a prize, premium or consideration for a lottery, contest, game of chance or skill or competition of any kind.

SECTION 25. [NEW MATERIAL] PROVIDING MARIJUANA ITEMS TO AN INTOXICATED PERSON PROHIBITED--ALLOWING CONSUMPTION OF MARIJUANA ITEMS BY PERSONS WHO ARE YOUNGER THAN TWENTY-ONE YEARS OF AGE PROHIBITED.--

A. A person shall not sell, give or otherwise make available a marijuana item to a person who is visibly intoxicated.

B. A person who exercises control over private real property shall not:

(1) knowingly allow a person who is younger than twenty-one years of age to consume marijuana items on the property; or

(2) allow a person who is younger than twenty-one years of age and who consumes marijuana items on the property to remain on that property.

C. Subsection B of this section:

(1) applies only to a person who is present and in control of the location at the time the consumption occurs; and

(2) does not apply to the owner of rental property, or the agent of an owner of rental property, unless the consumption occurs in the individual unit in which the owner or agent resides.

SECTION 26. [NEW MATERIAL] LICENSEE MISREPRESENTATIONS--MAINTENANCE OF DISORDERLY ESTABLISHMENT.--

A. A person shall not make false representations or statements to the department to induce or prevent action by the department.

B. A licensee shall not maintain a noisy, lewd, disorderly or unsanitary establishment or supply impure or otherwise deleterious marijuana items.

C. A licensee shall not misrepresent marijuana items to any person.

SECTION 27. [NEW MATERIAL] UNDERAGE PERSONS--RESTRICTIONS ON PURCHASE OF MARIJUANA ITEMS AND PRESENCE ON LICENSED PREMISES--PENALTIES.--

A. A person who is younger than twenty-one years of age shall not purchase or attempt to purchase marijuana items.

B. Except as authorized by rule or as necessitated in an emergency, a person who is younger than twenty-one years of age shall not enter or attempt to enter any portion of a licensed premises that is posted or otherwise identified as being prohibited to the use of persons under the age of twenty-one years of age.

C. A person who violates Subsection A or B of this section is guilty of a misdemeanor.

D. In addition to any other penalty established by law, the court, with respect to a person who violates Subsection A of this section through the person's misrepresentation of the person's age:

(1) may order the person to perform community service; and

(2) shall order that the person's driving privileges and right to apply for driving privileges be suspended for a period not to exceed one year.

E. If a court issues an order suspending a person's driving privileges pursuant to Subsection D of this section, the court in its discretion and upon petition by the person may withdraw its order at any time.

F. If a person cited for a violation of Subsection A or B of this section fails to appear in court and if the person is at least thirteen years of age but younger than twenty-one years of age at the time the person fails to appear, in addition to any other penalty, the court shall issue an order to suspend the person's driving privileges.

G. The prohibitions in this section do not apply to a person who is younger than twenty-one years of age who is acting under the direction of the department or state or local law enforcement agencies for the purpose of investigating possible violations of laws prohibiting the sale of marijuana items to persons who are younger than twenty-one years of age.

SECTION 28. [NEW MATERIAL] COMPLIANCE WITH STANDARDS FOR MARIJUANA ITEMS.--

A. Marijuana items shall not be sold or offered for sale unless the marijuana items comply with the minimum standards established in the Cannabis Revenue and Freedom Act, rules promulgated pursuant to that act or other state law.

B. The department may require a marijuana producer,

marijuana processor or marijuana wholesaler to provide a laboratory analysis that demonstrates to the department's satisfaction that particular marijuana items comply with minimum standards.

C. Marijuana items offered for sale shall not be altered in any way by a person who is not licensed to alter the items.

D. The department may prohibit the sale of marijuana items for a reasonable period of time while it determines whether the marijuana items comply with established minimum standards.

SECTION 29. [NEW MATERIAL] MISLEADING MARKS OR LABELS--INJURIOUS OR ADULTERATED INGREDIENTS.--

A. A licensee shall not use or allow the use of a mark or label on the container of a marijuana item that is kept for sale if the container does not precisely and clearly indicate the nature of its contents or if the mark or label could deceive a person as to the nature, composition, quantity, age or quality of the marijuana item.

B. The board may prohibit a licensee from selling any brand of marijuana item that, in the board's judgment, is deceptively labeled or branded as to the marijuana item's content or contains injurious or adulterated ingredients.

SECTION 30. [NEW MATERIAL] EMPLOYMENT--MINIMUM AGE REQUIREMENT.--

A. A licensee shall not employ a person who is younger than twenty-one years of age in any part of a licensed premises.

B. During an inspection of a licensed premises, the department may require proof that a person who is performing work at the licensed premises is at least twenty-one years of age. If the person does not provide acceptable proof of age upon request, the department may require the person to immediately leave the licensed premises until the department receives acceptable proof of the person's age. This subsection does not apply to a person who is temporarily at the licensed premises to make a service, maintenance or repair call or for other purposes independent of operations of the licensed premises.

C. If a person performing work at a licensed premises does not provide proof of the person's age as requested by the department pursuant to Subsection B of this section, the department may request that the licensee provide proof that the person is twenty-one years of age or older. The licensee's failure to provide acceptable proof of age as requested shall be prima facie evidence that the licensee has allowed the person to perform work at the licensed premises in violation of the minimum age requirement.

SECTION 31. [NEW MATERIAL] MATURE MARIJUANA PLANTS.--Only a licensed marijuana producer and the producer's licensee representatives may possess or sell a mature marijuana plant.

SECTION 32. [NEW MATERIAL] EMPLOYMENT PROTECTIONS.--

A. Unless an employer establishes by a preponderance of the evidence that an employee's use of marijuana in compliance with the Cannabis Revenue and Freedom Act has impaired the employee's ability to perform the employee's job responsibilities, the employer shall not take any adverse employment action against the employee for:

(1) the employee's conduct that complies with that act; or

(2) the employee's drug test results that show the presence of marijuana components or metabolites.

B. For the purpose of this section, an employer may consider an employee's ability to perform the employee's job responsibilities to be impaired if, while working, the employee manifests specific articulable symptoms that decrease the employee's performance of the duties of the employee's job.

C. Nothing in this section shall:

(1) restrict an employer's ability to prohibit or take adverse employment action for the possession or use of intoxicating substances during work hours; or

(2) require an employer to commit any act that would cause the employer to violate federal law, or that would cause the loss of a federal contract or federal funding.

D. As used in this section, "adverse employment action" means an employer refusing to hire or employ, barring or discharging from employment, requiring an employee to retire from employment or discriminating against an employee with respect to compensation or the terms, conditions or privileges of employment.

SECTION 33. [NEW MATERIAL] PROTECTIONS FROM DISCRIMINATION.--

A. A landlord shall not refuse to lease to or evict a person from property solely based on the person's conduct that complies with the Cannabis Revenue and Freedom Act, unless failing to do so would cause the landlord to lose a monetary or licensing-related benefit pursuant to federal law; provided, however, that a landlord may prohibit a person from cultivating or smoking marijuana on the landlord's property.

B. Unless a person's conduct that complies with the Cannabis Revenue and Freedom Act creates an unreasonable danger to the safety of the person's dependent child as established by clear and convincing evidence, the person's conduct shall not alone:

(1) be a reason to deny the person's custody of or visitation or parenting time with the child; or

(2) create a presumption of the person's neglect or endangerment of the child.

SECTION 34. [NEW MATERIAL] RESTRICTION ON THE USE OF MARIJUANA ITEMS IN A PUBLIC PLACE--MARIJUANA RETAILER ON-SITE CONSUMPTION LICENSE ENDORSEMENT.--

A. A person shall not use a marijuana item in a public place except as provided in this section.

B. Pursuant to rules promulgated by the department, a marijuana retailer may apply for an on-site consumption endorsement to the retailer's marijuana retailer license to allow the sale of marijuana items for on-site consumption and the consumption of the marijuana items in a marijuana consumption area.

C. A person may purchase and consume marijuana items in a marijuana consumption area on the licensed premises of a marijuana retailer who has been issued an on-site consumption endorsement.

D. A person who violates Subsection A of this section is guilty of a misdemeanor.

SECTION 35. [NEW MATERIAL] MARIJUANA ITEMS IN A CORRECTIONAL FACILITY PROHIBITED.--

A. A person shall not knowingly and voluntarily carry, transport or deposit a marijuana item in an institution for the confinement of adult prisoners or in a juvenile detention facility.

B. A person who violates Subsection A of this section with respect to a prison is guilty of bringing contraband into a prison as provided in Subsection A of Section 30-22-14 NMSA 1978, and with respect to a jail, is guilty of bringing contraband into a jail as provided in Subsection B of Section 30-22-14 NMSA 1978.

SECTION 36. [NEW MATERIAL] HOMEGROWN MARIJUANA IN PUBLIC VIEW PROHIBITED.--

A. A person shall not produce, process, keep or store homegrown marijuana or homemade marijuana products if the homegrown marijuana or homemade marijuana products can be readily seen by normal unaided vision from a public place.

B. A person who violates Subsection A of this section is guilty of a misdemeanor.

SECTION 37. [NEW MATERIAL] CERTAIN HOMEMADE MARIJUANA EXTRACTS PROHIBITED.--A person shall not produce, process, keep or store a homemade marijuana extract if the extract is produced or processed using a volatile solvent such as butane, hexane, isopropyl alcohol, ethanol or carbon dioxide.

SECTION 38. [NEW MATERIAL] INCONSISTENT LOCAL LAWS AND ORDINANCES SUPERSEDED AND REPEALED.--Notwithstanding the provisions of Sections 39 and 40 of the Cannabis Revenue and Freedom Act, the provisions of that act shall operate uniformly throughout the state and shall be superior to and shall supersede all local laws or ordinances, including a law or ordinance of a home rule municipality, that are inconsistent or in conflict with that act. Any conflicting local laws or ordinances are repealed.

SECTION 39. [NEW MATERIAL] LOCAL GOVERNMENT AUTHORITY TO REGULATE MARIJUANA RETAILERS AND MARIJUANA WHOLESALERS.--

A. Municipalities and counties may adopt reasonable time, place and manner regulations related to nuisance aspects of a licensed marijuana retailer's or a marijuana wholesaler's business if the municipality or county makes specific findings that the business would cause adverse effects to occur.

B. The authority granted to municipalities and counties by this section is in addition to the authority granted to a municipality or county pursuant to its charter, state laws and the constitution of New Mexico.

SECTION 40. [NEW MATERIAL] LOCAL OPTION ELECTION--SALES NOT AFFECTED BY LOCAL OPTION.--

A. A municipality with a population greater than five thousand according to the most recent federal decennial census, whether or not the county in which that municipality is situated has held an election provided for in this section, or a county in the state may prohibit the operation of a licensed marijuana processor, marijuana producer, marijuana wholesaler or marijuana retailer upon the following terms and conditions:

(1) at any time after the effective date of the Cannabis Revenue and Freedom Act, the registered qualified electors of the municipality or county may petition the governing body by filing one or more petitions in the appropriate office to hold an election for the purpose of determining whether to prohibit the operations of a licensed marijuana processor, marijuana producer, marijuana wholesaler or marijuana retailer in the municipality or county. If the aggregate of the signatures of such electors on all the petitions equals or exceeds five percent of the number of registered voters of the municipality or county, the governing body shall call an election within seventy-five days of the verification of the petition. The date of the filing of the petition shall be the date of the filing of the last petition that brings the number of signatures up to the required five percent; provided, however, that the governing body shall refuse to recognize the petition if more than three months have elapsed between the date of the first signature and the filing of the last petition necessary to bring the number of signatures on the petition up to five percent;

(2) the election shall be called, conducted, counted and canvassed substantially in the manner provided by law for general elections within the county or special municipal elections within the municipality, except as otherwise provided in this section;

(3) the votes at the election shall be counted, returned and canvassed as provided for in the case of general elections within the county or special municipal elections within the municipality;

(4) except as otherwise provided in this section, contests, recounts and rechecks shall be permitted as provided for in the case of candidates for county office in general elections or as provided for in the case of special municipal elections within the municipality. Applications for contests, recounts or rechecks may be filed by any person who voted in the election and service shall be made upon the county clerk or municipal clerk as the case may be;

(5) if the majority of all of the votes cast at the election are cast in favor of the prohibition of the operations of a licensed marijuana processor, marijuana producer, marijuana retailer or marijuana wholesaler in the county or municipality, the chair of the governing body shall declare by order entered upon the records of the county or municipality that the county or municipality has approved the prohibition and shall notify the department of the election results;

(6) no election held pursuant to this section shall be held within forty-two days of any primary, general, municipal or school district election. If, within sixty days from the verification of any petition as provided in Paragraph (1) of this subsection, a primary, general, municipal or school election is held, the governing body may call an election for a day not less than sixty days after the primary, general, municipal or school election;

(7) if an election is held pursuant to this section in a county that contains within its limits a municipality of more than five thousand persons according to the most recent federal decennial census, it is not necessary for the registered qualified electors in the municipality to file a separate petition asking for a separate or different vote on the question of whether to prohibit the operations of a licensed marijuana processor, marijuana producer, marijuana retailer or marijuana wholesaler. The election in the county shall be conducted so as to separate the votes in the municipality from those in the remaining parts of the county. If the majority of the voters in the county, including the voters in the municipality, vote to prohibit the operations of a licensed marijuana processor, marijuana producer, marijuana retailer or marijuana wholesaler, the county shall not allow the prohibited operations; but if the majority of the votes in the municipality are in favor of allowing the operations of a licensed marijuana processor, marijuana producer, marijuana retailer or marijuana wholesaler, the municipality shall have allowed the approved operations in the municipality. Nothing contained in this paragraph shall prevent any municipality from having a separate election under the terms of this section; and

(8) any county or municipality that has voted to prohibit the operations of a licensed marijuana processor, marijuana producer, marijuana retailer or marijuana wholesaler may vote to discontinue the prohibition and to allow the previously prohibited operations in that county or municipality; the discontinuance shall become effective on the ninetieth day after the local option election is held as provided for in this paragraph.

B. The provisions of Subsection A of this section shall not prevent a person who resides in a municipality or county that has elected to prohibit the operations of a licensed marijuana processor, marijuana producer, marijuana retailer or marijuana wholesaler from possessing marijuana items that were purchased from licensed marijuana retailers for the person's personal use.

SECTION 41. [NEW MATERIAL] ENFORCEMENT--DUTY OF LAW ENFORCEMENT OFFICERS.--The state and local law enforcement officers in the state shall enforce the Cannabis Revenue and Freedom Act and shall assist the department with identifying violations of that act and with apprehending offenders. Any state or local law enforcement officer that has notice or knowledge of or reasonable belief regarding a violation of that act shall immediately notify the district attorney and provide the district attorney with the names and addresses of any witnesses to the violation and other information related to the violation.

SECTION 42. [NEW MATERIAL] CONVICTION OF LICENSEE--DUTY TO NOTIFY THE DEPARTMENT.--All court officials, district attorneys and municipal authorities in the state shall notify the department as soon as possible following the conviction of a person who is licensed pursuant to the Cannabis Revenue and Freedom Act for a violation of any provision of that act or of a state or local law that relates in any way to marijuana items. The notification shall include information about any acts, practices or other conduct of the licensee that may be subversive of the general welfare or contrary to the spirit of that act and shall make recommendations that the department could take to remedy the acts, practices or conduct of the licensee.

SECTION 43. [NEW MATERIAL] PROPERTY AND PLACES AS COMMON NUISANCES.--

A. For the purpose of the Cannabis Revenue and Freedom Act, a common nuisance is:

(1) a room, house, building, boat, structure or other place where marijuana items are sold, manufactured, bartered or given away in violation of state law;

(2) a room, house, building, boat, structure or other place where persons are permitted to resort for the purpose of using marijuana items in violation of state law;

(3) a place where marijuana items are kept for sale, barter or gift in violation of state law; or

(4) all marijuana items or property subject to confiscation pursuant to the Cannabis Revenue and Freedom Act that are kept and used in a place described in this section.

B. A person who maintains or assists in maintaining a common nuisance or who knowingly allows a common nuisance to exist in a place of which the person is the owner, manager or lessor is guilty of a violation of the Cannabis Revenue and Freedom Act.

SECTION 44. [NEW MATERIAL] LIEN ON PLACE USED TO UNLAWFULLY HANDLE MARIJUANA ITEMS.--Upon a showing that the owner of a building or premises has knowingly allowed the building or premises to be used or occupied for the manufacture, sale or possession of marijuana items in violation of the provisions of the Cannabis Revenue and Freedom Act, that building or premises is subject to a lien for and may be sold to pay all fines and costs assessed against the building's or premises' occupants for violations of that act. The district attorney of the county in which the building or premises is located shall enforce the lien immediately by civil action.

SECTION 45. [NEW MATERIAL] GOVERNOR'S AUTHORITY TO SUSPEND LICENSE.--In case of invasion, disaster, insurrection or riot or imminent danger thereof, the governor may, without notice, suspend a license that is in the affected area for the duration of the invasion, disaster, insurrection or riot or imminent danger thereof.

SECTION 46. [NEW MATERIAL] PENALTIES.--

A. Except as otherwise specifically provided in the Cannabis Revenue and Freedom Act:

(1) a violation of a provision of that act constitutes a misdemeanor; and

(2) a violation of a rule promulgated pursuant to that act constitutes a petty misdemeanor.

B. It is a misdemeanor for a person who is twenty-one years of age or older to possess, produce, process, keep, store or deliver marijuana items, usable marijuana or marijuana plants in excess of the quantities or amounts provided in Paragraphs (1) through (6) of Subsection B of Section 4 of the Cannabis Revenue and Freedom Act.

SECTION 47. [NEW MATERIAL] USE OF MARIJUANA WHILE DRIVING--PENALTY.--A person commits the offense of driving under the influence of intoxicating liquor or drugs as provided in Section 66-8-102 NMSA 1978 if the person uses any marijuana item while driving a motor vehicle upon a highway.

SECTION 48. [NEW MATERIAL] SEVERABILITY.--If any part or application of the Cannabis Revenue and Freedom Act is held invalid, unconstitutional or illegal, the remainder or its application to other situations or persons shall not be affected.

SECTION 49. [NEW MATERIAL] SUBSTANCE ABUSE PREVENTION AND BEHAVIORAL HEALTH FUND.--The "substance abuse prevention and behavioral health fund" is created in the state treasury. The fund consists of appropriations, other money deposited in the fund and money otherwise accruing to the fund. The department of health shall administer the fund, and money in the fund is appropriated to the department of health to establish, operate and maintain alcohol and substance abuse prevention, early intervention and treatment and related behavioral health services. Money in the fund shall be disbursed on warrants signed by the secretary of finance and administration pursuant to vouchers signed by the secretary of health or the secretary's designee. Any balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.

SECTION 50. [NEW MATERIAL] DISTRICT ATTORNEY PUBLIC SAFETY FUND.--The "district attorney public safety fund" is created in the state treasury. The fund consists of appropriations, other money deposited in the fund and money otherwise accruing to the fund. The administrative office of the district attorneys shall administer the fund, and money in the fund is appropriated to the administrative office of the district attorneys to support evidence-based arrest and incarceration diversion programs for low-level nonviolent drug related offenses and to support development of intoxicated driving detection programs. Money in the fund shall be disbursed on warrants signed by the secretary of finance and administration pursuant to vouchers signed by the director of the administrative office of the district attorneys or the director's designee. Any balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.

SECTION 51. [NEW MATERIAL] PUBLIC DEFENDER PUBLIC SAFETY FUND.--The "public defender public safety fund" is created in the state treasury. The fund consists of appropriations, other money deposited in the fund and money otherwise accruing to the fund. The public defender department shall administer the fund, and money in the fund is appropriated to the public defender for operations. Money in the fund shall be disbursed on warrants signed by the secretary of finance and administration pursuant to vouchers signed by the chief public defender or the chief's designee. Any balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.

SECTION 52. [NEW MATERIAL] CANNABIS REVENUE ECONOMIC DEVELOPMENT FUND.--The "cannabis revenue economic development fund" is created in the state treasury. The fund consists of appropriations, other money deposited in the fund and money otherwise accruing to the fund. The economic development department shall administer the fund. Money in the fund is appropriated to the economic development department for: training to support local entrepreneurs; local business development through small business development centers and community college and university programs; business growth and marketing programs through regional economic development organizations; and community reinvestment grant programs to support job training for and placement of formerly incarcerated persons. Money in the fund shall be disbursed on warrants signed by the secretary of finance and administration pursuant to vouchers signed by the secretary of economic development or the secretary's designee. Any balance remaining in the fund at the end of a fiscal year shall not revert to the general fund.

SECTION 53. [NEW MATERIAL] SHORT TITLE.--Sections 53 through 59 of this act may be cited as the "Cannabis Tax Act".

SECTION 54. [NEW MATERIAL] DEFINITIONS.--As used in the Cannabis Tax Act:

A. "county area" means that portion of a county located outside the boundaries of any municipality, except that for H class counties, "county area" means the entire county;

B. "department" means the taxation and revenue department;

C. "governing body" means:

(1) in the case of a municipality, the city council or city commission of a city, the board of trustees of a town or village or the board of county commissioners of H class counties; or

(2) in the case of a county, the county commission of a county or the county council of an H class county;

D. "marijuana items" means "marijuana items" as that term is defined in the Cannabis Revenue and Freedom Act; and

E. "marijuana retailer" means "marijuana retailer" as that term is defined in the Cannabis Revenue and Freedom Act.

SECTION 55. [NEW MATERIAL] IMPOSITION AND RATE OF CANNABIS TAX.--

A. There is imposed an excise tax on a marijuana retailer that sells marijuana items in this state on which the tax imposed by this section has not been paid. If the price paid does not represent the value of the marijuana item, the tax rate shall be applied to the reasonable value of the marijuana item at the time the item was purchased. The excise tax imposed by this section may be referred to as the "cannabis tax".

B. The rate of the cannabis tax is fifteen percent and is applied to the price paid for the marijuana item.

SECTION 56. [NEW MATERIAL] MUNICIPAL CANNABIS TAX.--

A. A majority of the members of the governing body of a municipality may enact an ordinance imposing an excise tax on a marijuana retailer that sells marijuana items in the municipality on which the tax imposed by this section has not been paid. The tax imposed pursuant to this section may be referred to as the "municipal cannabis tax".

B. The rate of the municipal cannabis tax is five percent and is applied to the price paid for the marijuana item. If the price paid does not represent the value of the marijuana item, the tax rate shall be applied to the reasonable value of the marijuana item at the time that the item was purchased.

C. The governing body of a municipality, at the time of enacting any ordinance imposing a municipal cannabis tax, may dedicate the revenue for municipal general purposes.

D. Any ordinance enacted under the provisions of Subsection A of this section shall include an effective date of either July 1 or January 1.

E. An ordinance imposing the municipal cannabis tax shall not go into effect until after an election is held and the majority of the voters of the municipality voting in the election vote in favor of imposing the tax. The governing body shall adopt a resolution calling for an election within seventy-five days of the date the ordinance is adopted on the question of imposing the tax. The question shall be submitted to the voters of the municipality as a separate question at a regular municipal election or at a special election called for that purpose by the governing body. A special municipal election shall be called, conducted and canvassed as provided in the Municipal Election Code. If the majority of the voters voting on the question approves the ordinance imposing the municipal cannabis tax, the ordinance shall become effective in accordance with the provisions of the Cannabis Tax Act. If the question of imposing the municipal cannabis tax fails, the governing body shall not again propose the imposition of the tax for a period of one year from the date of the election.

SECTION 57. [NEW MATERIAL] COUNTY CANNABIS TAX.--

A. The majority of the members of the governing body of a county may enact an ordinance imposing an excise tax on a marijuana retailer that sells marijuana items in the county area on which the tax imposed by this section has not been paid. The tax imposed pursuant to this section may be referred to as the "county cannabis tax".

B. The rate of the county cannabis tax is five percent and is applied to the price paid for the marijuana item. If the price paid does not represent the value of the marijuana item, the tax rate shall be applied to the reasonable value of the marijuana item at the time that the item was purchased.

C. The governing body of a county, at the time of enacting any ordinance imposing a county cannabis tax, may dedicate the revenue for county general purposes.

D. Any ordinance enacted under the provisions of Subsection A of this section shall include an effective date of either July 1 or January 1.

E. An ordinance imposing the county cannabis tax shall not go into effect until after an election is held and the majority of the qualified electors of the county area voting in the election vote in favor of imposing the tax. The governing body shall adopt a resolution calling for an election within seventy-five days of the date that the ordinance is adopted on the question of imposing the tax. The question may be submitted to the qualified electors and voted upon as a separate question at any special election called for that purpose by the governing body. The election on the question shall be called, held, conducted and canvassed in substantially the same manner as provided by law for general elections. If the question of imposing a county cannabis tax fails, the governing body shall not again propose a county cannabis tax for a period of one year after the election.

SECTION 58. [NEW MATERIAL] DATE PAYMENT DUE.--The taxes imposed pursuant to the Cannabis Tax Act are to be paid on or before the twenty-fifth day of the month following the month in which the taxable event occurs.

SECTION 59. [NEW MATERIAL] ADMINISTRATIVE CHARGE.--The department may deduct an amount not to exceed three percent of the proceeds of the municipal cannabis tax and county cannabis tax as a charge for the administrative costs of collection, which amount shall be retained by the department for use in administration of those taxes.

SECTION 60. A new section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] DISTRIBUTION--PUBLIC SCHOOL FUND FOR STATE EQUALIZATION GUARANTEE DISTRIBUTION--SUBSTANCE ABUSE PREVENTION AND BEHAVIORAL HEALTH FUND--CANNABIS REVENUE ECONOMIC DEVELOPMENT FUND--DISTRICT ATTORNEY PUBLIC SAFETY FUND--PUBLIC DEFENDER PUBLIC SAFETY FUND--DEPARTMENT OF HEALTH--CANNABIS TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to:

A. the public school fund to augment the appropriations for the state equalization guarantee distribution in an amount equal to forty percent of the net receipts attributable to the cannabis tax;

B. the substance abuse prevention and behavioral health fund in an amount equal to twenty-three percent of the net receipts attributable to the cannabis tax;

C. the cannabis revenue economic development fund in an amount equal to twenty percent of the net receipts attributable to the cannabis tax;

D. the district attorney public safety fund in an amount equal to seven and one-half percent of the net receipts attributable to the cannabis tax;

E. the public defender public safety fund in an amount equal to seven and one-half percent of the net receipts attributable to the cannabis tax; and

F. the department of health in an amount equal to two percent of the net receipts attributable to the cannabis tax to support qualified patients pursuant to the medical cannabis subsidy program."

SECTION 61. A new section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] TRANSFER--REVENUES FROM MUNICIPAL CANNABIS TAX AND COUNTY CANNABIS TAX.--

A. A transfer pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each municipality for which the department is collecting a municipal cannabis tax imposed by that municipality in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the net receipts attributable to the municipal cannabis tax, less any deduction for administrative costs determined and made by the department pursuant to the Cannabis Tax Act.

B. A transfer pursuant to Section 7-1-6.1 NMSA 1978 shall be made to each county for which the department is collecting a county cannabis tax imposed by that county in an amount, subject to any increase or decrease made pursuant to Section 7-1-6.15 NMSA 1978, equal to the net receipts attributable to the county cannabis tax, less any deduction for administrative costs determined and made by the department pursuant to the Cannabis Tax Act."

SECTION 62. Section 7-1-2 NMSA 1978 (being Laws 1965, Chapter 248, Section 2, as amended) is amended to read:

"7-1-2. APPLICABILITY.--The Tax Administration Act applies to and governs:

A. the administration and enforcement of the following taxes or tax acts as they now exist or may hereafter be amended:

(1) Income Tax Act;

(2) Withholding Tax Act;

(3) Venture Capital Investment Act;

(4) Gross Receipts and Compensating Tax Act and any state gross receipts tax;

(5) Liquor Excise Tax Act;

(6) Local Liquor Excise Tax Act;

(7) any municipal local option gross receipts tax;

(8) any county local option gross receipts tax;

(9) Special Fuels Supplier Tax Act;

(10) Gasoline Tax Act;

(11) petroleum products loading fee, which fee shall be considered a tax for the purpose of the Tax Administration Act;

(12) Alternative Fuel Tax Act;

(13) Cigarette Tax Act;

(14) Estate Tax Act;

(15) Railroad Car Company Tax Act;

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

(17) Corporate Income and Franchise Tax Act;

(18) Uniform Division of Income for Tax Purposes Act;

(19) Multistate Tax Compact;

(20) Tobacco Products Tax Act; [and]

(21) the telecommunications relay service surcharge imposed by Section 63-9F-11 NMSA 1978, which surcharge shall be considered a tax for the purposes of the Tax Administration Act; and

(22) the Cannabis Tax Act;

B. the administration and enforcement of the following taxes, surtaxes, advanced payments or tax acts as they now exist or may hereafter be amended:

(1) Resources Excise Tax Act;

(2) Severance Tax Act;

(3) any severance surtax;

(4) Oil and Gas Severance Tax Act;

(5) Oil and Gas Conservation Tax Act;

(6) Oil and Gas Emergency School Tax Act;

(7) Oil and Gas Ad Valorem Production Tax Act;

(8) Natural Gas Processors Tax Act;

(9) Oil and Gas Production Equipment Ad Valorem Tax Act;

(10) Copper Production Ad Valorem Tax Act;

(11) any advance payment required to be made by any act specified in this subsection, which advance payment shall be considered a tax for the purposes of the Tax Administration Act;

(12) Enhanced Oil Recovery Act;

(13) Natural Gas and Crude Oil Production Incentive Act; and

(14) intergovernmental production tax credit and intergovernmental production equipment tax credit;

C. the administration and enforcement of the following taxes, surcharges, fees or acts as they now exist or may hereafter be amended:

(1) Weight Distance Tax Act;

(2) the workers' compensation fee authorized by Section 52-5-19 NMSA 1978, which fee shall be considered a tax for purposes of the Tax Administration Act;

(3) Uniform Unclaimed Property Act (1995);

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

(5) the solid waste assessment fee authorized by the Solid Waste Act, which fee shall be considered a tax for purposes of the Tax Administration Act;

(6) the water conservation fee imposed by Section 74-1-13 NMSA 1978, which fee shall be considered a tax for the purposes of the Tax Administration Act; and

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

D. the administration and enforcement of all other laws, with respect to which the department is charged with responsibilities pursuant to the Tax Administration Act, but only to the extent that the other laws do not conflict with the Tax Administration Act."

SECTION 63. Section 7-1-6.15 NMSA 1978 (being Laws 1983, Chapter 211, Section 20, as amended by Laws 2015, Chapter 89, Section 1 and by Laws 2015, Chapter 100, Section 1) is amended to read:

"7-1-6.15. ADJUSTMENTS OF DISTRIBUTIONS OR TRANSFERS TO MUNICIPALITIES OR COUNTIES.--

A. The provisions of this section apply to:

(1) any distribution to a municipality pursuant to Section 7-1-6.4, 7-1-6.36 or 7-1-6.46 NMSA 1978;

(2) any transfer to a municipality with respect to any local option gross receipts tax or municipal cannabis tax imposed by that municipality;

(3) any transfer to a county with respect to any local option gross receipts tax or county cannabis tax imposed by that county;

(4) any distribution to a county pursuant to Section 7-1-6.16 or 7-1-6.47 NMSA 1978;

(5) any distribution to a municipality or a county of gasoline taxes pursuant to Section 7-1-6.9 NMSA 1978;

(6) any transfer to a county with respect to any tax imposed in accordance with the Local Liquor Excise Tax Act;

(7) any distribution to a county from the county government road fund pursuant to Section 7-1-6.26 NMSA 1978;

(8) any distribution to a municipality of gasoline taxes pursuant to Section 7-1-6.27 NMSA 1978; and

(9) any distribution to a municipality of compensating taxes pursuant to Section 7-1-6.55 NMSA 1978.

B. Before making a distribution or transfer specified in Subsection A of this section to a municipality or county for the month, amounts comprising the net receipts shall be segregated into two mutually exclusive categories. One category shall be for amounts relating to the current month, and the other category shall be for amounts relating to prior periods. The total of each category for a municipality or county shall be reported each month to that municipality or county. If the total of the amounts relating to prior periods is less than zero and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, then the following procedures shall be carried out:

(1) all negative amounts relating to any period prior to the three calendar years preceding the year of the current month, net of any positive amounts in that same time period for the same taxpayers to which the negative amounts pertain, shall be excluded from the total relating to prior periods. Except as provided in Paragraph (2) of this subsection, the net receipts to be distributed or transferred to the municipality or county shall be adjusted to equal the amount for the current month plus the revised total for prior periods; and

(2) if the revised total for prior periods determined pursuant to Paragraph (1) of this subsection is negative and its absolute value exceeds the greater of one hundred dollars ($100) or an amount equal to twenty percent of the average distribution or transfer amount for that municipality or county, the revised total for prior periods shall be excluded from the distribution or transfers and the net receipts to be distributed or transferred to the municipality or county shall be equal to the amount for the current month.

C. The department shall recover from a municipality or county the amount excluded by Paragraph (2) of Subsection B of this section. This amount may be referred to as the "recoverable amount".

D. Prior to or concurrently with the distribution or transfer to the municipality or county of the adjusted net receipts, the department shall notify the municipality or county whose distribution or transfer has been adjusted pursuant to Paragraph (2) of Subsection B of this section:

(1) that the department has made such an adjustment, that the department has determined that a specified amount is recoverable from the municipality or county and that the department intends to recover that amount from future distributions or transfers to the municipality or county;

(2) that the municipality or county has ninety days from the date notice is made to enter into a mutually agreeable repayment agreement with the department;

(3) that if the municipality or county takes no action within the ninety-day period, the department will recover the amount from the next six distributions or transfers following the expiration of the ninety days; and

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

E. No earlier than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall begin recovering the recoverable amount from a municipality or county as follows:

(1) the department may collect the recoverable amount by:

(a) decreasing distributions or transfers to the municipality or county in accordance with a repayment agreement entered into with the municipality or county; or

(b) except as provided in Paragraphs (2) and (3) of this subsection, if the municipality or county fails to act within the ninety days, decreasing the amount of the next six distributions or transfers to the municipality or county following expiration of the ninety-day period in increments as nearly equal as practicable and sufficient to recover the amount;

(2) if, pursuant to Subsection B of this section, the secretary determines that the recoverable amount is more than fifty percent of the average distribution or transfer of net receipts for that municipality or county, the secretary:

(a) shall recover only up to fifty percent of the average distribution or transfer of net receipts for that municipality or county; and

(b) may, in the secretary's discretion, waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance; and

(3) if, after application of a refund claim, audit adjustment, correction of a mistake by the department or other adjustment of a prior period, but prior to any recovery of the department pursuant to this section, the total net receipts of a municipality or county for the twelve-month period beginning with the current month are reduced or are projected to be reduced to less than fifty percent of the average distribution or transfer of net receipts, the secretary may waive recovery of any portion of the recoverable amount, subject to approval by the state board of finance.

F. No later than ninety days from the date notice pursuant to Subsection D of this section is given, the department shall provide the municipality or county adequate opportunity to review an application for a claim for refund that gave rise to the recoverable amount, exclusive of any amended returns that may be attached to the application, pursuant to Section 7-1-8.9 NMSA 1978.

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

H. The secretary is authorized to decrease a distribution or transfer to a municipality or county upon being directed to do so by the secretary of finance and administration pursuant to the State Aid Intercept Act or to redirect a distribution or transfer to the New Mexico finance authority pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement of the municipality or county and the New Mexico finance authority. Upon direction to decrease a distribution or transfer or notice to redirect a distribution or transfer to a municipality or county, the secretary shall decrease or redirect the next designated distribution or transfer, and succeeding distributions or transfers as necessary, by the amount of the state distributions intercept authorized by the secretary of finance and administration pursuant to the State Aid Intercept Act or by the amount of the state distribution intercept authorized pursuant to an ordinance or a resolution passed by the county or municipality and a written agreement with the New Mexico finance authority. The secretary shall transfer the state distributions intercept amount to the municipal or county treasurer or other person designated by the secretary of finance and administration or to the New Mexico finance authority pursuant to written agreement to pay the debt service to avoid default on qualified local revenue bonds or meet other local revenue bond, loan or other debt obligations of the municipality or county to the New Mexico finance authority. A decrease to or redirection of a distribution or transfer pursuant to this subsection that arose:

(1) prior to an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department takes precedence over any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, which may be made only from the net amount of the distribution or transfer remaining after application of the decrease or redirection pursuant to this subsection; and

(2) after an adjustment of a distribution or transfer of net receipts creating a recoverable amount owed to the department shall be subordinate to any collection of any recoverable amount pursuant to Paragraph (2) of Subsection B of this section.

I. Upon the direction of the secretary of finance and administration pursuant to Section 9-6-5.2 NMSA 1978, the secretary shall temporarily withhold the balance of a distribution to a municipality or county, net of any decrease or redirected amount pursuant to Subsection H of this section and any recoverable amount pursuant to Paragraph (2) of Subsection B of this section, that has failed to submit an audit report required by the Audit Act or a financial report required by Subsection F of Section 6-6-2 NMSA 1978. The amount to be withheld, the source of the withheld distribution and the number of months that the distribution is to be withheld shall be as directed by the secretary of finance and administration. A distribution withheld pursuant to this subsection shall remain in the tax administration suspense fund until distributed to the municipality or county and shall not be distributed to the general fund. An amount withheld pursuant to this subsection shall be distributed to the municipality or county upon direction of the secretary of finance and administration.

J. As used in this section:

(1) "amounts relating to the current month" means any amounts included in the net receipts of the current month that represent payment of tax due for the current month, correction of amounts processed in the current month that relate to the current month or that otherwise relate to obligations due for the current month;

(2) "amounts relating to prior periods" means any amounts processed during the current month that adjust amounts processed in a period or periods prior to the current month regardless of whether the adjustment is a correction of a department error or due to the filing of amended returns, payment of department-issued assessments, filing or approval of claims for refund, audit adjustments or other cause;

(3) "average distribution or transfer amount" means the following amounts; provided that a distribution or transfer that is negative shall not be used in calculating the amounts:

(a) the annual average of the total amount distributed or transferred to a municipality or county in each of the three twelve-month periods preceding the current month;

(b) if a distribution or transfer to a municipality or county has been made for less than three years, the total amount distributed or transferred in the year preceding the current month; or

(c) if a municipality or county has not received distributions or transfers of net receipts for twelve or more months, the monthly average of net receipts distributed or transferred to the municipality or county preceding the current month multiplied by twelve;

(4) "current month" means the month for which the distribution or transfer is being prepared; and

(5) "repayment agreement" means an agreement between the department and a municipality or county under which the municipality or county agrees to allow the department to recover an amount determined pursuant to Paragraph (2) of Subsection B of this section by decreasing distributions or transfers to the municipality or county for one or more months beginning with the distribution or transfer to be made with respect to a designated month. No interest shall be charged."

SECTION 64. Section 26-2B-1 NMSA 1978 (being Laws 2007, Chapter 210, Section 1) is amended to read:

"26-2B-1. SHORT TITLE.--[Sections 1 through 7 of this act] Chapter 26, Article 2B NMSA 1978 may be cited as the "Lynn and Erin Compassionate Use Act" in honor of Lynn Pierson and Erin Armstrong."

SECTION 65. Section 26-2B-3 NMSA 1978 (being Laws 2007, Chapter 210, Section 3) is amended to read:

"26-2B-3. DEFINITIONS.--As used in the Lynn and Erin Compassionate Use Act:

A. "adequate supply" means an amount of cannabis, in any form approved by the [department] cannabis control board, possessed by a qualified patient or collectively possessed by a qualified patient and the qualified patient's primary caregiver that is determined by rule of the [department] cannabis control board to be no more than reasonably necessary to ensure the uninterrupted availability of cannabis for a period of three months and that is derived solely from an intrastate source;

B. "debilitating medical condition" means:

(1) cancer;

(2) glaucoma;

(3) multiple sclerosis;

(4) damage to the nervous tissue of the spinal cord, with objective neurological indication of intractable spasticity;

(5) epilepsy;

(6) positive status for human immunodeficiency virus or acquired immune deficiency syndrome;

(7) admitted into hospice care in accordance with rules promulgated by the [department] cannabis control board; or

(8) any other medical condition, medical treatment or disease as approved by the [department] cannabis control board;

C. "department" means the department of health;

D. "licensed producer" means any person or association of persons within New Mexico that the [department] cannabis control board determines to be qualified to produce, possess, distribute and dispense cannabis pursuant to the Lynn and Erin Compassionate Use Act and that is licensed by the department;

E. "mature cannabis plant" means a harvestable female cannabis plant that is flowering;

F. "personal production license" means a license issued to a qualified patient that allows the qualified patient to produce medical cannabis for that qualified patient's personal use in accordance with cannabis control board rules;

[E.] G. "practitioner" means a person licensed in New Mexico to prescribe and administer drugs that are subject to the Controlled Substances Act;

[F.] H. "primary caregiver" means a resident of New Mexico who is at least eighteen years of age and who has been designated by the patient's practitioner as being necessary to take responsibility for managing the well-being of a qualified patient with respect to the medical use of cannabis pursuant to the provisions of the Lynn and Erin Compassionate Use Act;

[G.] I. "qualified patient" means a resident of New Mexico who has been diagnosed by a practitioner as having a debilitating medical condition and has received written certification and a registry identification card issued pursuant to the Lynn and Erin Compassionate Use Act; and

[H.] J. "written certification" means a statement in a patient's medical records or a statement signed by a patient's practitioner that, in the practitioner's professional opinion, the patient has a debilitating medical condition and the practitioner believes that the potential health benefits of the medical use of cannabis would likely outweigh the health risks for the patient. A written certification is not valid for more than one year from the date of issuance."

SECTION 66. Section 26-2B-6 NMSA 1978 (being Laws 2007, Chapter 210, Section 6) is amended to read:

"26-2B-6. ADVISORY BOARD CREATED--DUTIES.--The secretary of health shall establish an advisory board consisting of eight practitioners representing the fields of neurology, pain management, medical oncology, psychiatry, infectious disease, family medicine and gynecology. The practitioners shall be nationally board-certified in their area of specialty and knowledgeable about the medical use of cannabis. The members shall be chosen for appointment by the secretary from a list proposed by the New Mexico medical society. A quorum of the advisory board shall consist of three members. The advisory board shall:

A. review and recommend to the [department] cannabis control board for approval additional debilitating medical conditions that would benefit from the medical use of cannabis;

B. accept and review petitions to add medical conditions, medical treatments or diseases to the list of debilitating medical conditions that qualify for the medical use of cannabis;

C. convene at least twice per year to conduct public hearings and to evaluate petitions, which shall be maintained as confidential personal health information, to add medical conditions, medical treatments or diseases to the list of debilitating medical conditions that qualify for the medical use of cannabis;

D. issue recommendations to the cannabis control board concerning rules to be promulgated for the issuance of the registry identification cards; and

E. recommend quantities of cannabis that are necessary to constitute an adequate supply for qualified patients and primary caregivers."

SECTION 67. Section 26-2B-7 NMSA 1978 (being Laws 2007, Chapter 210, Section 7) is amended to read:

"26-2B-7. [REGISTRY IDENTIFICATION CARDS] DEPARTMENT RULES--DUTIES--REGISTRY IDENTIFICATION CARDS.--

A. No later than [October 1, 2007] October 1, 2017, and after consultation with the advisory board, the department shall promulgate rules in accordance with the State Rules Act to: [implement the purpose of the Lynn and Erin Compassionate Use Act. The rules shall:

(1) govern the manner in which]

(1) address how the department will [consider applications for] issue and renew registry identification cards [and for the renewal of identification cards] for qualified patients and primary caregivers;

[(2) define the amount of cannabis that is necessary to constitute an adequate supply, including amounts for topical treatments;

(3) identify criteria and set forth procedures for including additional medical conditions, medical treatments or diseases to the list of debilitating medical conditions that qualify for the medical use of cannabis. Procedures shall include a petition process and shall allow for public comment and public hearings before the advisory board;

(4) set forth additional]

(2) add medical conditions, medical treatments or diseases to the list of debilitating medical conditions that qualify for the medical use of cannabis as recommended by the advisory board and approved by the cannabis control board;

[(5) identify requirements for the licensure of producers and cannabis production facilities and set forth]

(3) establish procedures for producers and cannabis production facilities to obtain licenses;

[(6) develop a distribution system for medical cannabis that provides for:

(a) cannabis production facilities within New Mexico housed on secured grounds and operated by licensed producers; and

(b) distribution of medical cannabis to qualified patients or their primary caregivers to take place at locations that are designated by the department and that are not within three hundred feet of any school, church or daycare center] and

(4) provide that, for a new or renewal producer license, the department shall charge an annual license fee of:

(a) fifteen thousand dollars ($15,000), if the producer will possess up to one hundred fifty mature cannabis plants; and

(b) an additional five thousand dollars ($5,000) for each additional fifty mature cannabis plants the producer will possess; provided, however, that the maximum fee charged for a new or renewal producer license shall not exceed forty-five thousand dollars ($45,000).

[(7) determine additional duties and responsibilities of the advisory board; and

(8) be revised and updated as necessary.]

B. The department shall issue registry identification cards to a patient and to the primary caregiver, if any, for that patient [if any] who submit the following, in accordance with [the department's] applicable rules:

(1) a written certification;

(2) the name, address and date of birth of the patient;

(3) the name, address and telephone number of the patient's practitioner; and

(4) the name, address and date of birth of the patient's primary caregiver, if any.

C. The department shall verify the information contained in an application submitted [pursuant to] as provided in Subsection B of this section and shall approve or deny [an] the application within thirty days of receipt. The department may deny an application only if the applicant did not provide the information required [pursuant to] as provided in Subsection B of this section or if the department determines that the information provided is false. A person whose application has been denied shall not reapply for six months from the date of the denial unless otherwise authorized by [the department] rule.

D. The department shall issue a registry identification card within five days of approving an application, and [a] the card shall expire one year after the date of issuance. A registry identification card shall contain:

(1) the name, address and date of birth of the qualified patient and primary caregiver, if any;

(2) the date of issuance and expiration date of the registry identification card; and

(3) other information [that the department may require] as required by rule.

E. A person who possesses a registry identification card shall notify the department of any change in the person's name, address, qualified patient's practitioner, qualified patient's primary caregiver or change in status of the qualified patient's debilitating medical condition within ten days of the change.

F. Possession of or application for a registry identification card shall not constitute probable cause or give rise to reasonable suspicion for a governmental agency to search the person or property of the person possessing or applying for the card.

G. The department shall maintain a confidential file containing the names and addresses of the persons who have either applied for or received a registry identification card. Individual names on the list shall be confidential and not subject to disclosure, except:

(1) to authorized employees or agents of the department as necessary to perform the duties of the department pursuant to the provisions of the Lynn and Erin Compassionate Use Act;

(2) to authorized employees of state or local law enforcement agencies, but only for the purpose of verifying that a person is lawfully in possession of a registry identification card; or

(3) as provided in the federal Health Insurance Portability and Accountability Act of 1996."

SECTION 68. Section 30-31-2 NMSA 1978 (being Laws 1972, Chapter 84, Section 2, as amended) is amended to read:

"30-31-2. DEFINITIONS.--As used in the Controlled Substances Act:

A. "administer" means the direct application of a controlled substance by any means to the body of a patient or research subject by a practitioner or the practitioner's agent;

B. "agent" includes an authorized person who acts on behalf of a manufacturer, distributor or dispenser. It does not include a common or contract carrier, public warehouseperson or employee of the carrier or warehouseperson;

C. "board" means the board of pharmacy;

D. "bureau" means the narcotic and dangerous drug section of the criminal division of the United States department of justice, or its successor agency;

E. "controlled substance":

(1) means a drug or substance listed in Schedules I through V of the Controlled Substances Act or rules adopted thereto; and

(2) does not include industrial hemp or marijuana for the purpose of conduct that complies with the Cannabis Revenue and Freedom Act;

F. "counterfeit substance" means a controlled substance that bears the unauthorized trademark, trade name, imprint, number, device or other identifying mark or likeness of a manufacturer, distributor or dispenser other than the person who in fact manufactured, distributed or dispensed the controlled substance;

G. "deliver" means the actual, constructive or attempted transfer from one person to another of a controlled substance or controlled substance analog, whether or not there is an agency relationship;

H. "dispense" means to deliver a controlled substance to an ultimate user or research subject pursuant to the lawful order of a practitioner, including the administering, prescribing, packaging, labeling or compounding necessary to prepare the controlled substance for that delivery;

I. "dispenser" means a practitioner who dispenses and includes hospitals, pharmacies and clinics where controlled substances are dispensed;

J. "distribute" means to deliver other than by administering or dispensing a controlled substance or controlled substance analog;

K. "drug" or "substance" means substances recognized as drugs in the official United States pharmacopoeia, official homeopathic pharmacopoeia of the United States or official national formulary or any respective supplement to those publications. It does not include devices or their components, parts or accessories;

L. "hashish" means the resin extracted from any part of marijuana, whether growing or not, and every compound, manufacture, salt, derivative, mixture or preparation of such resins;

M. "manufacture" means the production, preparation, compounding, conversion or processing of a controlled substance or controlled substance analog by extraction from substances of natural origin or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis and includes any packaging or repackaging of the substance or labeling or relabeling of its container, except that this term does not include the preparation or compounding of a controlled substance:

(1) by a practitioner as an incident to administering or dispensing a controlled substance in the course of the practitioner's professional practice; or

(2) by a practitioner, or by the practitioner's agent under the practitioner's supervision, for the purpose of or as an incident to research, teaching or chemical analysis and not for sale;

N. "marijuana":

(1) means all parts of the plant cannabis, including any and all varieties, species and subspecies of the genus Cannabis, whether growing or not, the seeds thereof and every compound, manufacture, salt, derivative, mixture or preparation of the plant or its seeds; [It] and

(2) does not include:

(a) the mature stalks of the plant;

(b) hashish;

(d) fiber produced from the stalks;

(e) oil or cake made from the seeds of the plant;

(f) any other compound, manufacture, salt, derivative, mixture or preparation of the mature stalks, fiber, oil or cake; [or]

(g) the sterilized seed of the plant that is incapable of germination; or

(h) industrial hemp or industrial hemp commodities or products as defined in the Cannabis Revenue and Freedom Act;

O. "narcotic drug" means any of the following, whether produced directly or indirectly by extraction from substances of vegetable origin or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis:

(1) opium and opiate and any salt, compound, derivative or preparation of opium or opiate;

(2) any salt, compound, isomer, derivative or preparation that is a chemical equivalent of any of the substances referred to in Paragraph (1) of this subsection, except the isoquinoline alkaloids of opium;

(3) opium poppy and poppy straw, including all parts of the plant of the species Papaver somniferum L. except its seeds; or

(4) coca leaves and any salt, compound, derivative or preparation of coca leaves, any salt, compound, isomer, derivative or preparation that is a chemical equivalent of any of these substances except decocainized coca leaves or extractions of coca leaves that do not contain cocaine or ecgonine;

P. "opiate" means any substance having an addiction-forming or addiction-sustaining liability similar to morphine or being capable of conversion into a drug having addiction-forming or addiction-sustaining liability. "Opiate" does not include, unless specifically designated as controlled under Section 30-31-5 NMSA 1978, the dextrorotatory isomer of 3-methoxy-n-methylmorphinan and its salts, dextromethorphan. "Opiate" does include its racemic and levorotatory forms;

Q. "person" means an individual, partnership, corporation, association, institution, political subdivision, government agency or other legal entity;

R. "practitioner" means a physician, certified advanced practice chiropractic physician, doctor of oriental medicine, dentist, physician assistant, certified nurse practitioner, clinical nurse specialist, certified nurse-midwife, prescribing psychologist, veterinarian, euthanasia technician, pharmacist, pharmacist clinician or other person licensed or certified to prescribe and administer drugs that are subject to the Controlled Substances Act;

S. "prescription" means an order given individually for the person for whom is prescribed a controlled substance, either directly from a licensed practitioner or the practitioner's agent to the pharmacist, including by means of electronic transmission, or indirectly by means of a written order signed by the prescriber, bearing the name and address of the prescriber, the prescriber's license classification, the name and address of the patient, the name and quantity of the drug prescribed, directions for use and the date of issue and in accordance with the Controlled Substances Act or rules adopted thereto;

T. "scientific investigator" means a person registered to conduct research with controlled substances in the course of the person's professional practice or research and includes analytical laboratories;

U. "ultimate user" means a person who lawfully possesses a controlled substance for the person's own use or for the use of a member of the person's household or for administering to an animal under the care, custody and control of the person or by a member of the person's household;

V. "drug paraphernalia" means all equipment, products and materials of any kind that are used, intended for use or designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, injecting, ingesting, inhaling or otherwise introducing into the human body a controlled substance or controlled substance analog in violation of the Controlled Substances Act. It includes:

(1) kits used, intended for use or designed for use in planting, propagating, cultivating, growing or harvesting any species of plant that is a controlled substance or controlled substance analog or from which a controlled substance can be derived;

(2) kits used, intended for use or designed for use in manufacturing, compounding, converting, producing, processing or preparing controlled substances or controlled substance analogs;

(3) isomerization devices used, intended for use or designed for use in increasing the potency of any species of plant that is a controlled substance;

(4) testing equipment used, intended for use or designed for use in identifying or in analyzing the strength, effectiveness or purity of controlled substances or controlled substance analogs;

(5) scales or balances used, intended for use or designed for use in weighing or measuring controlled substances or controlled substance analogs;

(6) diluents and adulterants, such as quinine hydrochloride, mannitol, mannite dextrose and lactose, used, intended for use or designed for use in cutting controlled substances or controlled substance analogs;

(7) separation gins and sifters used, intended for use or designed for use in removing twigs and seeds from, or in otherwise cleaning and refining, marijuana;

(8) blenders, bowls, containers, spoons and mixing devices used, intended for use or designed for use in compounding controlled substances or controlled substance analogs;

(9) capsules, balloons, envelopes and other containers used, intended for use or designed for use in packaging small quantities of controlled substances or controlled substance analogs;

(10) containers and other objects used, intended for use or designed for use in storing or concealing controlled substances or controlled substance analogs;

(11) hypodermic syringes, needles and other objects used, intended for use or designed for use in parenterally injecting controlled substances or controlled substance analogs into the human body;

(12) objects used, intended for use or designed for use in ingesting, inhaling or otherwise introducing marijuana, cocaine, hashish or hashish oil into the human body, such as:

(a) metal, wooden, acrylic, glass, stone, plastic or ceramic pipes, with or without screens, permanent screens, hashish heads or punctured metal bowls;

(b) water pipes;

(d) smoking and carburetion masks;

(e) roach clips, meaning objects used to hold burning material, such as a marijuana cigarette, that has become too small to hold in the hand;

(f) miniature cocaine spoons and cocaine vials;

(g) chamber pipes;

(h) carburetor pipes;

(i) electric pipes;

(j) air-driven pipes;

(k) chilams;

(l) bongs; or

(m) ice pipes or chillers; and

(13) in determining whether an object is drug paraphernalia, a court or other authority should consider, in addition to all other logically relevant factors, the following:

(a) statements by the owner or by anyone in control of the object concerning its use;

(b) the proximity of the object, in time and space, to a direct violation of the Controlled Substances Act or any other law relating to controlled substances or controlled substance analogs;

(d) the existence of any residue of a controlled substance or controlled substance analog on the object;

(e) instructions, written or oral, provided with the object concerning its use;

(f) descriptive materials accompanying the object that explain or depict its use;

(g) the manner in which the object is displayed for sale; and

(h) expert testimony concerning its use;

W. "controlled substance analog" means a substance other than a controlled substance that has a chemical structure substantially similar to that of a controlled substance in Schedule I, II, III, IV or V or that was specifically designed to produce effects substantially similar to that of controlled substances in Schedule I, II, III, IV or V. Examples of chemical classes in which controlled substance analogs are found include the following:

(1) phenethylamines;

(2) N-substituted piperidines;

(3) morphinans;

(4) ecgonines;

(5) quinazolinones;

(6) substituted indoles; and

(7) arylcycloalkylamines.

Specifically excluded from the definition of "controlled substance analog" are those substances that are generally recognized as safe and effective within the meaning of the Federal Food, Drug, and Cosmetic Act or have been manufactured, distributed or possessed in conformance with the provisions of an approved new drug application or an exemption for investigational use within the meaning of Section 505 of the Federal Food, Drug, and Cosmetic Act;

X. "human consumption" includes application, injection, inhalation, ingestion or any other manner of introduction;

Y. "drug-free school zone" means a public school, parochial school or private school or property that is used for a public, parochial or private school purpose and the area within one thousand feet of the school property line, but it does not mean any post-secondary school; and

Z. "valid practitioner-patient relationship" means a professional relationship, as defined by the practitioner's licensing board, between the practitioner and the patient."

SECTION 69. Section 30-31-6 NMSA 1978 (being Laws 1972, Chapter 84, Section 6, as amended) is amended to read:

"30-31-6. SCHEDULE I.--The following controlled substances are included in Schedule I:

A. any of the following opiates, including their isomers, esters, ethers, salts, and salts of isomers, esters and ethers, unless specifically exempted, whenever the existence of these isomers, esters, ethers and salts is possible within the specific chemical designation:

(1) acetylmethadol;

(2) allylprodine;

(3) alphacetylmethadol;

(4) alphameprodine;

(5) alphamethadol;

(6) benzethidine;

(7) betacetylmethadol;

(8) betameprodine;

(9) betamethadol;

(10) betaprodine;

(11) clonitazene;

(12) dextromoramide;

(13) dextrorphan;

(14) diampromide;

(15) diethylthiambutene;

(16) dimenoxadol;

(17) dimepheptanol;

(18) dimethylthiambutene;

(19) dioxaphetyl butyrate;

(20) dipipanone;

(21) ethylmethylthiambutene;

(22) etonitazene;

(23) etoxeridine;

(24) furethidine;

(25) hydroxypethidine;

(26) ketobemidone;

(27) levomoramide;

(28) levophenacylmorphan;

(29) morpheridine;

(30) noracymethadol;

(31) norlevorphanol;

(32) normethadone;

(33) norpipanone;

(34) phenadoxone;

(35) phenampromide;

(36) phenomorphan;

(37) phenoperidine;

(38) piritramide;

(39) proheptazine;

(40) properidine;

(41) racemoramide; and

(42) trimeperidine;

B. any of the following opium derivatives, their salts, isomers and salts of isomers, unless specifically exempted, whenever the existence of these salts, isomers and salts of isomers is possible within the specific chemical designation:

(1) acetorphine;

(2) acetyldihydrocodeine;

(3) benzylmorphine;

(4) codeine methylbromide;

(5) codeine-N-oxide;

(6) cyprenorphine;

(7) desomorphine;

(8) dihydromorphine;

(9) etorphine;

(10) heroin;

(11) hydromorphinol;

(12) methyldesorphine;

(13) methyldihydromorphine;

(14) morphine methylbromide;

(15) morphine methylsulfonate;

(16) morphine-N-oxide;

(17) myrophine;

(18) nicocodeine;

(19) nicomorphine;

(20) normorphine;

(21) pholcodine; and

(22) thebacon;

C. any material, compound, mixture or preparation that contains any quantity of the following hallucinogenic substances, their salts, isomers and salts of isomers, unless specifically exempted, whenever the existence of these salts, isomers and salts of isomers is possible within the specific chemical designation:

(1) 3,4-methylenedioxy amphetamine;

(2) 5-methoxy-3,4-methylenedioxy amphetamine;

(3) 3,4,5-trimethoxy amphetamine;

(4) bufotenine;

(5) diethyltryptamine;

(6) dimethyltryptamine;

(7) 4-methyl-2,5-dimethoxy amphetamine;

(8) ibogaine;

(9) lysergic acid diethylamide;

(10) marijuana;

(11) mescaline;

(12) peyote, except as otherwise provided in the Controlled Substances Act;

(13) N-ethyl-3-piperidyl benzilate;

(14) N-methyl-3-piperidyl benzilate;

(15) psilocybin;

(16) psilocyn;

(17) tetrahydrocannabinols;

(18) hashish;

(19) synthetic cannabinoids, including:

(a) 1-[2-(4-(morpholinyl)ethyl]

-3-(1-naphthoyl)indole;

(b) 1-butyl-3-(1-napthoyl)indole;

(d) 1-pentyl-3-(1-naphthoyl)indole;

(e) 1-pentyl-3-(2-methoxyphenylacetyl) indole;

(f) cannabicyclohexanol (CP 47, 497 and homologues: 5-(1,1-dimethylheptyl)-2-[(1R,3S)

-3-hydroxycyclohexyl]-phenol (CP-47,497); and 5-(1,

1-dimethyloctyl)-2-[(1R,3S)-3-hydroxycyclohexyl]-phenol;

(g) 6aR,10aR)-9-(hydroxymethyl)

-6,6-dimethyl-3-(2-methyloctan-2-yl)-6a,7,10,

10a-tetrahydrobenzo[c]chromen-1-ol);

(h) dexanabinol, (6aS,10aS)

-9-(hydroxymethyl)-6,6-dimethyl-3-(2-methyloctan-2-yl)

-6a,7,10,10a-tetrahydrobenzo[c]chromen-1-ol;

(i) 1-pentyl-3-(4-chloro naphthoyl) indole;

(j) (2-methyl-1-propyl-1H-indol-3-yl)

-1-naphthalenyl-methanone; and

(k) 5-(1,1-dimethylheptyl)-2-(3-hydroxy cyclohexyl)-phenol;

(20) 3,4-methylenedioxymethcathinone;

(21) 3,4-methylenedioxypyrovalerone;

(22) 4-methylmethcathinone;

(23) 4-methoxymethcathinone;

(24) 3-fluoromethcathinone; and

(25) 4-fluoromethcathinone;

D. the enumeration of peyote as a controlled substance does not apply to the use of peyote in bona fide religious ceremonies by a bona fide religious organization, and members of the organization so using peyote are exempt from registration. Any person who manufactures peyote for or distributes peyote to the organization or its members shall comply with the federal Comprehensive Drug Abuse Prevention and Control Act of 1970 and all other requirements of law;

E. the enumeration of marijuana, tetrahydrocannabinols or chemical derivatives of tetrahydrocannabinol as Schedule I controlled substances does not apply to the use of marijuana, tetrahydrocannabinols or chemical derivatives of tetrahydrocannabinol by:

(1) a certified [patients] patient pursuant to the Controlled Substances Therapeutic Research Act [or by];

(2) a qualified [patients] patient pursuant to the provisions of the Lynn and Erin Compassionate Use Act; [and] or

(3) a person whose conduct complies with the Cannabis Revenue and Freedom Act; and

F. controlled substances added to Schedule I by rule adopted by the board pursuant to Section 30-31-3 NMSA 1978."

SECTION 70. Section 30-31-20 NMSA 1978 (being Laws 1972, Chapter 84, Section 20, as amended) is amended to read:

"30-31-20. TRAFFICKING CONTROLLED SUBSTANCES--VIOLATION.--

A. As used in the Controlled Substances Act, "traffic" means the:

(1) manufacture of a controlled substance enumerated in Schedules I through V or a controlled substance analog as defined in Subsection W of Section 30-31-2 NMSA 1978;

(2) distribution, sale, barter or giving away of:

(a) a controlled substance enumerated in Schedule I or II that is a narcotic drug;

(b) a controlled substance analog of a controlled substance enumerated in Schedule I or II that is a narcotic drug; or

(3) possession with intent to distribute:

(a) a controlled substance enumerated in Schedule I or II that is a narcotic drug;

(b) a controlled substance analog of a controlled substance enumerated in Schedule I or II that is a narcotic drug; or

B. Except as authorized by the Controlled Substances Act, it is unlawful for a person to intentionally traffic. A person who violates this subsection is:

(1) if the controlled substance is marijuana, guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978;

(2) for the first offense if the controlled substance is not marijuana, guilty of a second degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

[(2)] (3) for the second and subsequent offenses if the controlled substance is not marijuana, guilty of a first degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.

C. A person who knowingly violates Subsection B of this section within a drug-free school zone excluding private property residentially zoned or used primarily as a residence is guilty of:

(1) if the controlled substance is marijuana, a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978; or

(2) if the controlled substance is not marijuana, a first degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978."

SECTION 71. Section 30-31-22 NMSA 1978 (being Laws 1972, Chapter 84, Section 22, as amended) is amended to read:

"30-31-22. CONTROLLED OR COUNTERFEIT SUBSTANCES--DISTRIBUTION PROHIBITED.--

A. Except as authorized by the Controlled Substances Act, it is unlawful for a person to intentionally distribute or possess with intent to distribute a controlled substance or a controlled substance analog except a substance enumerated in Schedule I or II that is a narcotic drug, a controlled substance analog of a controlled substance enumerated in Schedule I or II that is a narcotic drug or methamphetamine, its salts, isomers and salts of isomers. A person who violates this subsection with respect to:

(1) marijuana or synthetic cannabinoids is:

[(a) for the first offense, guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978;

(b) for the second and subsequent offenses, guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978;

(c) for the first offense, if more than one hundred pounds is possessed with intent to distribute or distributed or both, guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(d) for the second and subsequent offenses, if more than one hundred pounds is possessed with intent to distribute or distributed or both, guilty of a second degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15] guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978;

(2) any other controlled substance enumerated in Schedule I, II, III or IV or a controlled substance analog of a controlled substance enumerated in Schedule I, II, III or IV except a substance enumerated in Schedule I or II that is a narcotic drug, a controlled substance analog of a controlled substance enumerated in Schedule I or II that is a narcotic drug or methamphetamine, its salts, isomers and salts of isomers, is:

(a) for the first offense, guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(b) for the second and subsequent offenses, guilty of a second degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(3) a controlled substance enumerated in Schedule V or a controlled substance analog of a controlled substance enumerated in Schedule V is guilty of a misdemeanor and shall be punished by a fine of not less than one hundred dollars ($100) or more than five hundred dollars ($500) or by imprisonment for a definite term not less than one hundred eighty days but less than one year, or both.

B. It is unlawful for a person to distribute gamma hydroxybutyric acid or flunitrazepam to another person without that person's knowledge and with intent to commit a crime against that person, including criminal sexual penetration. For the purposes of this subsection, "without that person's knowledge" means the person is unaware that a substance with the ability to alter that person's ability to appraise conduct or to decline participation in or communicate unwillingness to participate in conduct is being distributed to that person. Any person who violates this subsection is:

(1) for the first offense, guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(2) for the second and subsequent offenses, guilty of a second degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.

C. Except as authorized by the Controlled Substances Act, it is unlawful for a person to intentionally create or deliver, or possess with intent to deliver, a counterfeit substance. A person who violates this subsection with respect to:

(1) a counterfeit substance that is marijuana is guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978;

(2) a counterfeit substance enumerated in Schedule I, II, III or IV that is not marijuana is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

[(2)] (3) a counterfeit substance enumerated in Schedule V is guilty of a petty misdemeanor and shall be punished by a fine of not more than one hundred dollars ($100) or by imprisonment for a definite term not to exceed six months, or both.

D. A person who knowingly violates Subsection A or C of this section while within a drug-free school zone with respect to:

(1) marijuana or synthetic cannabinoids is

[(a) for the first offense, guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978;

(b) for the second and subsequent offenses, guilty of a second degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978;

(c) for the first offense, if more than one hundred pounds is possessed with intent to distribute or distributed or both, guilty of a second degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(d) for the second and subsequent offenses, if more than one hundred pounds is possessed with intent to distribute or distributed or both, guilty of a first degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15] guilty of a misdemeanor and shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978;

(a) for the first offense, guilty of a second degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(b) for the second and subsequent offenses, guilty of a first degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978;

(3) a controlled substance enumerated in Schedule V or a controlled substance analog of a controlled substance enumerated in Schedule V is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(4) the intentional creation, delivery or possession with the intent to deliver:

(a) a counterfeit substance enumerated in Schedule I, II, III or IV is guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

(b) a counterfeit substance enumerated in Schedule V is guilty of a misdemeanor and shall be punished by a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500) or by imprisonment for a definite term not less than one hundred eighty days but less than one year, or both.

E. Notwithstanding the provisions of Subsection A of this section, distribution of a small amount of marijuana or synthetic cannabinoids for no remuneration shall be treated as provided in Paragraph (1) of Subsection B of Section 30-31-23 NMSA 1978."

SECTION 72. Section 30-31-23 NMSA 1978 (being Laws 1972, Chapter 84, Section 23, as amended) is amended to read:

"30-31-23. CONTROLLED SUBSTANCES--POSSESSION PROHIBITED.--

A. It is unlawful for a person to intentionally [to] possess a controlled substance unless the substance was obtained pursuant to a valid prescription or order of a practitioner while acting in the course of professional practice or except as otherwise authorized by the Controlled Substances Act. It is unlawful for a person to intentionally [to] possess a controlled substance analog.

B. A person who violates this section with respect to:

(1) one ounce or less of marijuana or synthetic cannabinoids [is], for the first offense, [guilty of a petty misdemeanor and] shall be punished by a fine of [not less than] fifty dollars ($50.00) [or more than one hundred dollars ($100) and by imprisonment for not more than fifteen days], and, for the second and subsequent offenses, [guilty of a misdemeanor and] shall be punished by a fine of [not less than] one hundred dollars ($100) [or more than one thousand dollars ($1,000) or by imprisonment for a definite term less than one year, or both];

(2) more than one ounce and less than eight ounces of marijuana or synthetic cannabinoids [is guilty of a misdemeanor and] shall be punished by a fine of [not less than] one hundred dollars ($100) [or more than one thousand dollars ($1,000) or by imprisonment for a definite term less than one year, or both]; or

(3) eight ounces or more of marijuana or synthetic cannabinoids is guilty of a [fourth degree felony] misdemeanor and shall be sentenced pursuant to the provisions of Section [31-18-15] 31-19-1 NMSA 1978.

C. A minor who violates this section with respect to:

(1) synthetic cannabinoids shall:

(a) notwithstanding the provisions of Sections 32A-1-5 and 32A-2-19 NMSA 1978, be punished by a fine of fifty dollars ($50.00); and

(b) for a third or subsequent violation, the provisions of Section 32A-2-19 NMSA 1978 shall govern punishment of the minor; and

(2) the substances listed in [this subsection] Subparagraphs (a) and (b) of this paragraph is guilty of a petty misdemeanor and, notwithstanding the provisions of Sections 32A-1-5 and 32A-2-19 NMSA 1978, shall be punished by a fine not to exceed one hundred dollars ($100) or forty-eight hours of community service. For the third or subsequent violation [by a minor of this section] with respect to those substances, the provisions of Section 32A-2-19 NMSA 1978 shall govern punishment of the minor. [As used in this subsection, "minor" means a person who is less than eighteen years of age.] The provisions of this [subsection] paragraph apply to the following substances:

[(1) synthetic cannabinoids;

(2)] (a) any of the substances listed in Paragraphs (20) through (25) of Subsection C of Section 30-31-6 NMSA 1978; or

[(3)] (b) a substance added to Schedule I by a rule of the board adopted on or after [the effective date of this] March 31, 2011 [act] if the board determines that the pharmacological effect of the substance, the risk to the public health by abuse of the substance and the potential of the substance to produce psychic or physiological dependence liability is similar to the substances described in [Paragraph (1) or (2)] Subparagraph (a) of this [subsection] paragraph.

D. Except for those substances listed in Subsection E of this section, a person who violates this section with respect to any amount of any controlled substance enumerated in Schedule I, II, III or IV other than marijuana or a controlled substance analog of a substance enumerated in Schedule I, II, III or IV other than marijuana is guilty of a misdemeanor and shall be punished by a fine of not less than five hundred dollars ($500) or more than one thousand dollars ($1,000) or by imprisonment for a definite term less than one year, or both.

E. A person who violates this section with respect to phencyclidine as enumerated in Schedule III or a controlled substance analog of phencyclidine; methamphetamine, its salts, isomers or salts of isomers as enumerated in Schedule II or a controlled substance analog of methamphetamine, its salts, isomers or salts of isomers; flunitrazepam, its salts, isomers or salts of isomers as enumerated in Schedule I or a controlled substance analog of flunitrazepam, including naturally occurring metabolites, its salts, isomers or salts of isomers; gamma hydroxybutyric acid and any chemical compound that is metabolically converted to gamma hydroxybutyric acid, its salts, isomers or salts of isomers as enumerated in Schedule I or a controlled substance analog of gamma hydroxybutyric acid, its salts, isomers or salts of isomers; gamma butyrolactone and any chemical compound that is metabolically converted to gamma hydroxybutyric acid, its salts, isomers or salts of isomers as enumerated in Schedule I or a controlled substance analog of gamma butyrolactone, its salts, isomers or salts of isomers; 1-4 butane diol and any chemical compound that is metabolically converted to gamma hydroxybutyric acid, its salts, isomers or salts of isomers as enumerated in Schedule I or a controlled substance analog of 1-4 butane diol, its salts, isomers or salts of isomers; or a narcotic drug enumerated in Schedule I or II or a controlled substance analog of a narcotic drug enumerated in Schedule I or II is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.

F. Except for a minor [as defined in Subsection C of this section], a person who violates Subsection A of this section while within a posted drug-free school zone, excluding private property residentially zoned or used primarily as a residence and excluding a person in or on a motor vehicle in transit through the posted drug-free school zone, with respect to:

(1) one ounce or less of marijuana or synthetic cannabinoids [is], for the first offense, [guilty of a misdemeanor and] shall be punished by a fine of [not less than] one hundred dollars ($100) [or more than one thousand dollars ($1,000) or by imprisonment for a definite term less than one year, or both], and for the second or subsequent offense, is guilty of a [fourth degree felony] misdemeanor and shall be sentenced pursuant to the provisions of Section [31-18-15] 31-19-1 NMSA 1978;

(2) more than one ounce [and less than eight ounces] of marijuana or synthetic cannabinoids is guilty of a [fourth degree felony] misdemeanor and shall be sentenced pursuant to the provisions of Section [31-18-15] 31-19-1 NMSA 1978;

[(3) eight ounces or more of marijuana or synthetic cannabinoids is guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978;

(4)] (3) any amount of any other controlled substance enumerated in Schedule I, II, III or IV or a controlled substance analog of a substance enumerated in Schedule I, II, III or IV, except phencyclidine as enumerated in Schedule III, a narcotic drug enumerated in Schedule I or II or a controlled substance analog of a narcotic drug enumerated in Schedule I or II, is guilty of a fourth degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978; and

[(5)] (4) phencyclidine as enumerated in Schedule III, a narcotic drug enumerated in Schedule I or II, a controlled substance analog of phencyclidine or a controlled substance analog of a narcotic drug enumerated in Schedule I or II is guilty of a third degree felony and shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978.

G. For the purpose of this section, "minor" means a person who is younger than eighteen years of age."

SECTION 73. Section 30-31B-2 NMSA 1978 (being Laws 1989, Chapter 177, Section 2, as amended) is amended to read:

"30-31B-2. DEFINITIONS.--As used in the Drug Precursor Act:

A. "administer" means the direct application of a controlled substance by any means to the body of a patient or research subject by a practitioner or the practitioner's agent;

B. "agent" includes an authorized person who acts on behalf of a manufacturer, distributor or dispenser. "Agent" does not include a common or contract carrier, public warehouseperson or employee of the carrier or warehouseperson;

C. "board" means the board of pharmacy;

D. "bureau" means the bureau of narcotics and dangerous drugs of the United States department of justice or its successor agency;

E. "controlled substance":

(1) means a drug or substance listed in Schedules I through V of the Controlled Substances Act or regulations adopted thereto; and

(2) does not include industrial hemp or marijuana for the purpose of conduct that complies with the Cannabis Revenue and Freedom Act;

F. "controlled substance analog" means a substance other than a controlled substance that has a chemical structure substantially similar to that of a controlled substance in Schedule I, II, III, IV or V or that was specifically designed to produce effects substantially similar to that of controlled substances in Schedule I, II, III, IV or V. Examples of chemical classes in which controlled substance analogs are found include, but are not limited to, the following:

(1) phenethylamines;

(2) N-substituted piperidines;

(3) morphinans;

(4) ecgonines;

(5) quinazolinones;

(6) substituted indoles; and

(7) arylcycloalkylamines.

G. "deliver" means the actual, constructive or attempted transfer from one person to another of a controlled substance or controlled substance analog, whether or not there is an agency relationship;

I. "dispenser" means a practitioner who dispenses and includes hospitals, pharmacies and clinics where controlled substances are dispensed;

J. "distribute" means to deliver other than by administering or dispensing a controlled substance or controlled substance analog;

K. "drug" means substances recognized as drugs in the official United States pharmacopoeia, official homeopathic pharmacopoeia of the United States, official national formulary or any respective supplement to these publications. "Drug" does not include devices or their components, parts or accessories;

L. "drug precursor" means a substance, material, compound, mixture or preparation listed in Section 30-31B-3 NMSA 1978 or regulations adopted thereto or any of their salts or isomers. "Drug precursor" specifically excludes those substances, materials, compounds, mixtures or preparations that are prepared for dispensing pursuant to a prescription or over-the-counter distribution as a substance that is generally recognized as safe and effective within the meaning of the Federal Food, Drug, and Cosmetic Act or have been manufactured, distributed or possessed in conformance with the provisions of an approved new drug application or an exemption for investigational use within the meaning of Section 505 of the Federal Food, Drug, and Cosmetic Act, unless the board makes the findings required pursuant to Subsection B of Section 30-31B-4 NMSA 1978;

M. "immediate precursor" means a substance that is a compound commonly used or produced primarily as an immediate chemical intermediary used in the manufacture of a controlled substance, the control of which is necessary to prevent, curtail or limit the manufacture of controlled substances;

N. "license" means a license issued by the board to manufacture, possess, transfer or transport a drug precursor;

O. "manufacture" means the production, preparation, compounding, conversion or processing of a drug precursor by extraction from substances of natural origin, independently by means of chemical synthesis or by a combination of extraction and chemical synthesis and includes any packaging or repackaging of the substance or labeling or relabeling of its container, except that this term does not include the preparation or compounding of a controlled substance by a practitioner:

(1) as an incident to the practitioner's administering or dispensing of a controlled substance in the course of professional practice; or

(2) by the practitioner's agent under the practitioner's supervision for the purpose of or as an incident to research, teaching or chemical analysis and not for sale;

P. "person" includes an individual, sole proprietorship, partnership, corporation, association, the state or a political subdivision of the state or other legal entity;

Q. "possession" means to actively or constructively exercise dominion over;

R. "practitioner" means a physician, certified advanced practice chiropractic physician, dentist, veterinarian or other person licensed to prescribe and administer drugs that are subject to the Controlled Substances Act;

S. "prescription" means an order given individually for the person for whom is prescribed a controlled substance, either directly from the prescriber to the pharmacist or indirectly by means of a written order signed by the prescriber and in accordance with the Controlled Substances Act or regulations adopted thereto; and

T. "transfer" means the sale, possession with intent to sell, barter or giving away of a drug precursor."

SECTION 74. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2017.

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