Marijuana Policy Project

TAXATION AND REGULATION OF MARIJUANA BILL

         WHEREAS more than seven decades of arresting marijuana users has failed to prevent marijuana use; a study published in the American Journal of Public Health compared marijuana usage rates in the United States with rates in the Netherlands, where adults’ marijuana use and sales are de facto legal, found "no evidence to support claims that criminalization reduces [marijuana] use;" and

         WHEREAS more than 100 million adults in the United States, including the last three presidents, have used marijuana, and data from the 2010 Monitoring the Future Survey show that despite prohibition, more than 80% of 12th graders find marijuana “fairly easy” or “easy” to obtain; and

         WHEREAS more than 50,000 people have been killed in drug cartel and crackdown-related violence since the beginning of the crackdown on cartels in Mexico in 2006 and, according to the federal Office of National Drug Control Policy, 60% of drug cartel profits come from marijuana sales in the United States; and

         WHEREAS in June 2005, 530 economists, including three Nobel Laureates, endorsed a study on the costs of marijuana prohibition by Harvard professor Dr. Jeffrey Miron which estimated that taxing and regulating marijuana would yield $10-14 billion in increased revenues and savings, and which called for “an open and honest debate about marijuana prohibition," adding, "We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods;" and

         WHEREAS heads of state in countries that have been scarred by drug cartel violence are beginning to call for a re-examination of drug policies, with former president of Mexico Vicente Fox calling for marijuana to be legally sold, and past and current presidents of three Latin American countries — Cesar Gaviria of Colombia, Fernando Henrique Cardoso of Brazil, and Felipe Calderon and Ernesto Zedillo of Mexico — calling for a discussion on decriminalizing marijuana; and

         WHEREAS the lack of marijuana market regulation ensures that marijuana production and distribution are in the hands of unlicensed growers, who are untaxed, unmonitored, and often cultivate on state or federal lands, and the product is not controlled or regulated for safety concerns; and

         WHEREAS there were more than 858,000 arrests for marijuana offenses in the United States in 2009, which is more than the entire adult population of [xxlarge city in the state where the bill is proposed or xxState]; and

         WHEREAS just over 8,100 suspects were booked by federal law enforcement in 2004 — about one percent of all marijuana arrests — demonstrating that nearly all marijuana arrests occur on the state level, and thus, state legislative action has the capacity to significantly change policy; and

         WHEREAS while there were more than [xxState statistic] arrests for marijuana offenses in [xxState] in [xxmost recent YEAR with available data], thousands of serious crimes went unsolved; the clearance rates for homicide, rape, and robbery were only xx%, xx%, and xx% in [xxState] in [xxyear]; and

         WHEREAS there is an alarming racial disparity in marijuana arrests in [xxState], with African Americans arrested at nearly [xx] times the rate of whites in [xxmost recent YEAR with available data], although their marijuana usage rates were very similar; and

         WHEREAS removing state criminal penalties for adults aged 21 and older who use or cultivate small amounts of marijuana, and from regulated providers, would allow police to spend more time preventing and investigating serious crimes like murder, rape, assault, robbery, burglary, and driving under the influence of alcohol and other drugs and would create substantial savings now; and

         WHEREAS states are not required to enforce federal law or to prosecute people for engaging in activities prohibited by federal law, and may choose whether or not to impose state criminal penalties on conduct;

 Therefore,

 

Section 1. [xxapplicable title of state law, probably the one including drug offenses] is hereby amended by adding thereto a new chapter consisting of the provisions set forth as sections 2 to 25, inclusive, of this act.

 

Section 2. As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 3 to 13, inclusive, of this act have the meanings ascribed to them in those sections.

 

Section 3. “Department” means the [xxState department of revenue].

 

Section 4. "Marijuana" means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. It does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted from it), fiber, oil, or cake, or the sterilized seed of the plant that is incapable of germination.

 

Section 5. “Marijuana paraphernalia” means equipment, products, and materials which are used or intended for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, ingesting, inhaling, or otherwise introducing marijuana into the human body.

 

Section 6. “Public place” means any street, alley, park, sidewalk, public building other than individual dwellings, or any place of business or assembly open to or frequented by the public, and any other place to which the public has access.

 

Section 7. “Retailer” means an entity that is either:

1. registered pursuant to sections 27 to 48, inclusive, of this act to be exempt from state penalties for purchasing marijuana from a wholesaler and selling marijuana and marijuana paraphernalia to customers who are 21 years of age or older; or

2. exempt from state penalties under section 32 (7) due to the department not issuing registrations.

 

Section 8. “Safety compliance facility” means an entity that is either:

1. registered pursuant to sections 27 to 48, inclusive, of this act to be exempt from state penalties for providing one or both of the following services: training, including related to cultivation of marijuana, safe handling of marijuana, and security and inventory procedures; or testing marijuana for potency and contaminants; or

2. exempt from state penalties under section 33 (4) due to the department not issuing registrations.

 

Section 9. “Smoking” means heating to at least the point of combustion, causing plant material to burn. It does not include vaporizing, which means heating below the point of combustion and resulting in a vapor or mist.

 

Section 10. “State prosecution” means prosecution initiated or maintained by the State of [xxState] or an agency or political subdivision of the State of [xxState].

 

Section 11. “Verification system” means a phone or Web-based system that is operational 24 hours each day that law enforcement personnel shall use to verify registry identification zip ties and that shall be established and maintained by the department pursuant to section 16.

 

Section 12. “Wholesaler” means an entity that is either:

1. registered pursuant to sections 27 to 48, inclusive, of this act to be exempt from state penalties for

cultivating, preparing, packaging, and selling marijuana to a retailer or another wholesaler, but not selling marijuana to the general public; or

2. exempt from state penalties under section 33 (7) due to the department not issuing registrations. 

 

Section 13. “Zip tie" means a fastener capable of being attached to a plant, which is produced by or at the direction of the department.

 
Section 14. Except as otherwise provided in this chapter:

     1. A person who is 21 years of age or older is exempt from arrest, civil or criminal penalty, seizure or forfeiture of assets, discipline by any state or local licensing board, and state prosecution for the following acts:

(a) Actually and constructively using, obtaining, purchasing, transporting, or possessing one ounce or less of marijuana and three marijuana seedlings or cuttings or less. As used herein, “one ounce or less of marijuana” includes one ounce or less of marijuana, or any mixture or preparation thereof, including but not limited to five grams or less of hashish. The weight of any non-marijuana ingredients combined with marijuana, such as in a preparation for topical administration or for consumption as food or drink, shall not count toward the one-ounce limit.

     (b) Controlling any premises or vehicle where up to one ounce or less of marijuana and three marijuana seedlings or cuttings or less per person who is 21 years of age or older is possessed, processed, or stored. 

     (c) Using, obtaining, purchasing, transporting, or possessing, actually or constructively, marijuana paraphernalia.

     (d) Selling marijuana seeds to a wholesaler.

     (e) Manufacturing, possessing, or producing marijuana paraphernalia.

     (f) Selling marijuana paraphernalia to retailers, wholesalers, or persons who are 21 years of age or older.

     (g) Transferring one ounce or less of marijuana and three marijuana seedlings or cuttings or less without remuneration to a person who is 21 years of age or older.

     (h) Aiding and abetting another person who is 21 years of age or older in the possession or use of one ounce or less of marijuana or in the cultivation of three or fewer marijuana plants.

     (i) Aiding and abetting another person who is 21 years of age or older in the possession or use of marijuana paraphernalia.

     (j) Cultivating three or fewer marijuana plants.

     (k) Controlling the premises where no more than five other adults 21 years of age or older cultivate marijuana plants, with the total number of plants not exceeding 18 in any dwelling unit.

     (l) Assisting with the cultivation of marijuana plants that are cultivated at the same location for adults 21 years of age or older, with the total number of plants not exceeding 18 in any dwelling unit.

     (m) Any combination of the acts described in paragraphs (a) to (l), inclusive.

     2. A retailer or any person who is 21 years of age or older and acting in his or her capacity as an owner, employee, or agent of a retailer who acts in compliance with the provisions of this chapter is exempt from arrest, civil or criminal penalty, seizure or forfeiture of assets, discipline by any state or local licensing board, and state prosecution for the following acts:

     (a) Transporting or possessing, actually or constructively, marijuana, including seedlings or cuttings, that was purchased from a wholesaler.

     (b) Possessing marijuana paraphernalia.

     (c) Obtaining or purchasing marijuana from a wholesaler.

     (d) Manufacturing, possessing, producing, obtaining, or purchasing marijuana paraphernalia.

     (e) Selling, transferring, or delivering marijuana, including seedlings or cuttings, which originates from a wholesaler, or marijuana paraphernalia to any person who is 21 years of age or older.

     (f) Aiding and abetting any person who is 21 years of age or older in the possession or use of one ounce or less of marijuana and three or fewer marijuana seedlings or cuttings.

     (g) Aiding and abetting any person who is 21 years of age or older in the possession or use of marijuana paraphernalia.

     (h) Controlling any premises or vehicle where marijuana and marijuana paraphernalia is possessed, sold, or deposited in a manner that is not in conflict with this chapter or department regulations.

     (i) Any combination of the acts described in paragraphs (a) to (h), inclusive.

     3. A wholesaler or any person who is 21 years of age or older and acting in his or her capacity as an owner, employee, or agent of a wholesaler who acts in compliance with the provisions of this chapter is exempt from arrest, civil or criminal penalty, seizure or forfeiture of assets, discipline by any state or local licensing board, and state prosecution for the following acts:

     (a) Cultivating, packing, processing, transporting, or manufacturing marijuana.

     (b) Producing marijuana-infused products, including tinctures, oils, and edible or potable goods.

     (c) Transporting or possessing marijuana that was produced by the wholesaler or another wholesaler.

     (d) Transporting or possessing marijuana seeds.

     (e) Possessing, transporting, selling, or producing marijuana paraphernalia.

     (f) Selling marijuana to a retailer or a wholesaler.

     (g) Purchasing marijuana from a wholesaler.

     (h) Purchasing marijuana seeds from a person who is 21 years of age or older.

     (i) Controlling any premises or vehicle where marijuana and marijuana paraphernalia is possessed, manufactured, sold, or deposited in a manner that is not in conflict with this chapter or department regulations.

     (j) Any combination of the acts described in paragraphs (a) to (i), inclusive.

     4. A safety compliance facility or any person who is 21 years of age or older and acting in his or her capacity as an owner, employee, or agent of a safety compliance facility who acts in compliance with the provisions of this chapter shall not be subject to state prosecution; search, except by the department pursuant to section 47(3)(i); seizure; or penalty in any manner or be denied any right or privilege, including but not limited to civil penalty or disciplinary action by a court or business licensing board or entity, solely for acting in accordance with this act and department regulations to provide the following services:

     (a) Acquiring or possessing marijuana obtained from wholesalers, retailers, or, if the quantity is no more than one ounce per person, adults 21 years of age or older;

     (b) Transporting or possessing marijuana obtained from wholesalers, retailers, or, if the quantity is no more than one ounce per person, adults 21 years of age or older;

     (c) Returning marijuana to wholesalers, retailers, or, if the quantity is no more than one ounce per person, adults 21 years of age or older;

     (d) Receiving compensation for analytical testing, including for contaminants or potency; and

     (e) Any combination of the acts described in paragraphs (a) to (d), inclusive.

     5. The acts listed in subsections 1 through 4, when undertaken in compliance with the provisions of this chapter, are lawful under [xxState] law.

     6. Except as otherwise provided in subsection 7, in a prosecution for selling, transferring, delivering, giving, or otherwise furnishing marijuana or marijuana paraphernalia to any person who is under 21 years of age, it is a complete defense if:

     (a) The person who sold, gave, or otherwise furnished marijuana or marijuana paraphernalia to a person who is under 21 years of age was a retailer or was acting in his or her capacity as an owner, employee, or agent of a retailer at the time the marijuana or marijuana paraphernalia was sold, given, or otherwise furnished to the person; and

     (b) Before selling, giving, or otherwise furnishing marijuana or marijuana paraphernalia to a person who is under 21 years of age, the person who sold, gave, or otherwise furnished the marijuana or marijuana paraphernalia, or a staffer or agent of the retailer, was shown a document which appeared to be issued by an agency of a federal, state, tribal, or foreign sovereign government and which indicated that the person to whom the marijuana or marijuana paraphernalia was sold, given, or otherwise furnished was 21 years of age or older at the time the marijuana or marijuana paraphernalia was sold, given, or otherwise furnished to the person.

     7. The complete defense set forth in subsection 6 does not apply if:

     (a) The document which was shown to the person who sold, gave, or otherwise furnished the marijuana or marijuana paraphernalia was counterfeit, forged, altered, or issued to a person other than the person to whom the marijuana or marijuana paraphernalia was sold, given, or otherwise furnished; and

     (b) Under the circumstances, a reasonable person would have known or suspected that the document was counterfeit, forged, altered, or issued to a person other than the person to whom the marijuana or marijuana paraphernalia was sold, given, or otherwise furnished.

 

Section 15. 1. Unless obtaining a zip tie was not reasonably practicable, an adult who is 21 or older who manufactures or cultivates marijuana plants without a zip tie affixed to or within 12 inches of each plant is responsible for a civil violation punishable by a fine of up to $500 for one plant without a zip tie, or up to $1,000 for two or three plants without a zip tie. For purposes of illustration and not limitation, it is not reasonably practicable for an adult to obtain a zip tie if any of the following are true:

     (a) On the date when law enforcement encountered the plant or plants, the department’s website did not list any location meeting the requirements of Section 16 and in the same zip code as the adult’s residence where zip ties could be obtained.

     (b) On any day within 30 days preceding the day when law enforcement encountered the plant or plants, the department’s website did not list any location meeting the requirements of Section 16 and in the same zip code as the adult’s residence where zip ties could be obtained.

     (c) The adult or a person acting on the adult’s behalf attempted to purchase a zip tie from a location listed on the department’s website within 30 days prior to the law enforcement encounter, but the location did not have a sufficient number of zip ties available, was not open during the posted hours, or the location did not meet the requirements of Section 16.

      2. The manufacture or cultivation of three or fewer marijuana plants by an adult who is 21 or older in a location that is contrary to this subparagraph is a misdemeanor punishable by a fine of up to $1,000, up to 10 days in jail, or both. 

     (a) Cultivation shall not occur in a location where the marijuana plants are subject to public view without the use of binoculars, aircraft, or other optical aids.

     (b) Marijuana that is cultivated outdoors must be cultivated in an enclosed location, such as a fenced-in area.

     (c) Cultivation may only occur on property lawfully in possession of the cultivator or with the consent of the person in lawful possession of the real property.

     (d) If one or more persons under 21 years of age live in or are guests at the property where marijuana is cultivated, reasonable precautions must be taken to prevent their access to marijuana plants. For purposes of illustration and not limitation, cultivating marijuana in a locked closet, room, or fully enclosed area that the person or persons under 21 years of age do not possess a key to constitutes reasonable precautions.

 

Section 16. 1. Within 120 days of the effective date of this act, the department shall establish a means for residents of [xxState] to anonymously obtain zip ties with the payment of a $100 fee per year per plant. The locations selling zip ties may be operated by state or local government agencies or private businesses. Zip ties may be sold by automated machines or by people.

     2. Zip tie purchasers must be allowed to choose whether to pay with cash or credit card. The department may allow additional methods of payment.

     3. The department shall ensure that there is at least one indoor location selling zip ties in each zip code that is open least 35 daytime or evening hours each week and at least four daytime or evening hours per week on weekends.

     4. The department shall post a list of all locations where zip ties may be purchased on its website, including the hours when zip ties may be purchased. The department shall retain an archived list of all locations that were posted to its website on each date for each zip code for at least 90 days.

     5. Persons purchasing zip ties shall not be subject to surveillance by video cameras or still photography.

     6. Each purchaser of a zip tie shall be required to provide his or her date of birth and to attest that he or she is a resident of [xxState].

     7. The department and the vendor or machine may not require the applicant to disclose any additional identifying information to obtain a zip tie, including names, social security numbers, or addresses.

     8. Each zip tie shall include a random identification number and an expiration date, which shall be one year after it is issued.

     9. Within 120 days of the effective date of this act, the department shall establish a phone or Web-based verification system that is operational 24 hours each day, which law enforcement personnel can use to verify registry identification zip ties. The verification system must allow law enforcement personnel to enter in a registry identification number to determine whether or not the number corresponds with an ID zip tie that has not expired.

 

Section 17. The provisions of this chapter do not exempt any person from arrest, civil or criminal penalty, seizure or forfeiture of assets, discipline by any state or local licensing board, and state prosecution for, nor may she or he establish an affirmative defense based on this act to charges arising from, any of the following acts:

     1.  Driving, operating, or being in actual physical control of a vehicle or a vessel under power or sail while impaired by marijuana.

     2.  Possessing marijuana if the person is a prisoner.

     3.  Possessing marijuana or possessing drug paraphernalia if the possession of the marijuana or drug paraphernalia is discovered because the person engaged or assisted in the use of marijuana in:

     (a) Any local detention facility, county jail, state prison, reformatory, or other correctional facility, including, without limitation, any facility for the detention of juvenile offenders; or

     (b) Any preschool, elementary school, junior high school, or high school.

 

Section 18. 1. Smoking marijuana shall be prohibited in all public places.

2. A person who smokes marijuana in such an indoor public place shall be guilty of a petty misdemeanor, and may be punished as follows:

(a) by a fine of not more than two hundred fifty dollars ($250), imprisonment for a term not exceeding 10 days, or both for the first violation;

(b) by a fine of not more than five hundred dollars ($500), imprisonment for a term not exceeding 30 days, or both, for the second or subsequent violation.

3. A person who smokes marijuana in an outdoor public place shall be liable for a civil penalty of one hundred fifty dollars ($150).

4. Municipalities may impose additional fines equivalent to local fines for the consumption of alcohol in an outdoor public place.

 

Section 19. The provisions of this chapter do not require employers to accommodate the use or possession of marijuana, or being under the influence of marijuana, in a place of employment.

 

Section 20.The provisions of this chapter do not prevent a landlord from prohibiting the cultivation of marijuana on the rental premises.

 

Section 21. A landlord or innkeeper may prohibit the smoking of marijuana on the rented property or rooms if the landlord or innkeeper posts a notice. 

 

Section 22. Any person who falsely represents himself or herself to be 21 years of age or older in order to obtain any marijuana or marijuana paraphernalia pursuant to this chapter is guilty of a misdemeanor.

 

Section 23. This act shall, by operation of law, expunge the conviction of anyone previously convicted of possession of one ounce or less of marijuana or possession of marijuana paraphernalia, provided that person was 21 years of age or older at the time of conviction.

 

Section 24. [xxNOTE: Remove if state does not have a medical marijuana program; also add an exception to the zip tie requirement if the state has a medical marijuana program.] Nothing contained herein shall be construed to repeal or modify any law concerning the medical use of marijuana or tetrahydrocannabinol in other forms, such as Marinol.

 

Section 25. [xxapplicable title of state law with criminal penalties for marijuana] is hereby amended by adding thereto a new section, reading as follows:

[xxapplicable reference to state law] The penalties provided for in this chapter do not apply to those exempted from criminal penalties pursuant to sections 2 through 24 or 50 through 55 of this act.

 

Section 26. [xxapplicable title of state law] is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 27 to 48, inclusive, of this act.

 

Section 27. As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 28 through 31 of this act have the meanings ascribed to them in those sections.

 

Section 28. “Marijuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. It does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant that is incapable of germination.

 

Section 29. “Retailer” means an entity that is either:

1. registered pursuant to sections 27 to 48, inclusive, of this act to be exempt from state penalties for

purchasing marijuana from a wholesaler and selling marijuana and marijuana paraphernalia to customers who are 21 years of age or older; or

2. exempt from state penalties under section 32 (7) due to the department not issuing registrations. 

 

Section 30. “Safety compliance facility” means an entity that is either:

1. registered pursuant to sections 27 to 48, inclusive, of this act to be exempt from state penalties for

providing one or both of the following services: training, including related to cultivation of marijuana, safe handling of marijuana, and security and inventory procedures; or testing marijuana for potency and contaminants; or

2. exempt from state penalties under section 34 (4) due to the department not issuing registrations. 

 

Section 31. “Wholesaler” means an entity that is either:

1. registered pursuant to sections 27 to 48, inclusive, of this act to be exempt from state penalties for cultivating, preparing, packaging, and selling marijuana to a retailer or another wholesaler, but not selling marijuana to the general public; or

2. exempt from state penalties under section 33 (7) due to the department not issuing registrations. 

 
Section 32. Except as otherwise provided in section 35 of this act:

     1. A person or an entity may apply, in accordance with the provisions of this chapter and the regulations adopted pursuant thereto, for the issuance of a registration exempting the entity from state prosecution and penalties for operating as a retailer pursuant to the provisions of this chapter.

     2. Each applicant for a retailer registration shall submit application materials required by the department and a non-refundable fee in an amount determined by the department, not to exceed $5,000.

     3. By one year after the effective date of this act, the department shall have issued at least one retailer registration per county. By two years after the effective date of this act, the department shall have issued a number of retailer registrations that are no fewer than one valid and outstanding retailer registration for every 25,000 residents of the county per county, provided a sufficient number of qualified applicants exist. If more qualifying applicants apply than the department will register, the department shall implement a competitive scoring process to determine to which applicants to grant registrations, which may be varied for geographic distribution. The scoring system shall take into account the applicant and managing officers’ applicable experience, training, and expertise; the applicant’s plan for security and diversion prevention; any criminal, civil, or regulatory issues encountered by other entities the applicant and managing officers have controlled or managed; and the suitability of the proposed location.

     4. If at any time after two years after the effective date of this act, there are fewer than one valid and outstanding retailer registration for every 25,000 residents of the county per county, the department shall accept and process applications for retailer registrations.

     5. The fee for the initial issuance of a registration as a retailer is $10,000.

     6. A registration as a retailer may be renewed annually for a $5,000 fee. The renewal application may be submitted up to 120 days before the expiration of the retailer registration. If the department fails to approve a valid renewal application, it shall be deemed granted 60 days after its submission.

     7. If at any time beginning 18 months after the effective date of this act, the department has failed to begin issuing retailer registrations or has ceased issuing retailer registrations or renewals as required by this chapter, a retail registration shall not be required to operate as a retailer for any person or entity that operates in a location zoned for retail use that satisfies the requirements set forth in this chapter and any regulations adopted pursuant to the chapter.

 

Section 33. Except as otherwise provided in section 35 of this act:

     1. An entity may apply, in accordance with the provisions of this chapter and the regulations adopted pursuant thereto, for the issuance of a registration exempting the entity from state prosecution and penalties for operating as a wholesaler pursuant to the provisions of this chapter.

     2. Each applicant for a wholesaler registration shall submit application materials required by the department and a non-refundable fee in an amount determined by the department, not to exceed $5,000.

     3. By 300 days after the effective date of this act, the department shall have issued at least five wholesaler registrations, provided that qualified applicants exist. By two years after the effective date of this act, the department shall have issued at least [xxfive wholesaler registrations per 500,000 people in the state]. If more qualifying applicants apply than the department will register, the department shall implement a competitive scoring process to determine to which applicants to grant registrations, which may be varied for geographic distribution. The scoring system shall take into account the applicant and managing officers’ applicable experience, training, and expertise; the applicant’s plan for security and diversion prevention; any criminal, civil, or regulatory issues encountered by other entities the applicant and managing officers have controlled or managed; and the suitability of the proposed location.

     4. If at any time after two years after the effective date of this act, there are fewer valid wholesaler registrations than specified in paragraph 3, the department shall accept and process applications for wholesaler registrations. In addition, the department may, at its discretion, grant additional wholesaler registrations.

     5. The fee for the initial issuance of a registration as a wholesaler is $10,000.

     6. A registration as a wholesaler may be renewed annually for a $5,000 fee. The renewal application may be submitted up to 120 days before the expiration of the wholesaler registration. If the department fails to approve a valid renewal application, it shall be deemed granted 60 days after its submission.

     7. If at any time beginning 18 months after the effective date of this act, the department has failed to begin issuing wholesaler registrations or has ceased issuing wholesaler registrations in accordance with this chapter, a wholesaler registration shall not be required to operate as a wholesaler for any person or entity that operates in a location zoned for agricultural or industrial use that satisfies the requirements set forth in this chapter and any regulations adopted pursuant to the chapter.

 

Section 34. Except as otherwise provided in section 35 of this act:

     1. An entity may apply, in accordance with the provisions of this chapter and the regulations adopted pursuant thereto, for the issuance of a registration exempting the entity from state prosecution and penalties for operating as a safety compliance facility pursuant to the provisions of this chapter.

     2. Each applicant for a safety compliance facility registration shall submit application materials required by the department and a non-refundable fee in an amount determined by the department, not to exceed $5,000.

    3. If a qualified applicant exists, the department shall grant a two-year registration to at least two safety compliance facilities within one year of the effective date of this act, provided that each facility pays a $5,000 fee. If more qualifying applicants apply than the department will register, the department shall implement a competitive scoring process to determine to which applicants to grant registrations, which may be varied for geographic distribution. The scoring system shall take into account the applicant and managing officers’ applicable experience, training, and expertise; the applicant’s plan for security and diversion prevention; any criminal, civil, or regulatory issues encountered by other entities the applicant and managing officers controlled or managed; the applicant’s plan for services; and the suitability of the proposed location.

     4. If at any time after two years after the effective date of this act, there are fewer than two valid safety compliance facility registrations, the department shall accept and process applications for safety compliance facility registrations. In addition, the department may, at its discretion, grant additional safety compliance facility registrations.

     5. A safety compliance facility registration may be renewed bi-annually for a $5,000 fee. The renewal application may be submitted up to 120 days before the expiration of the registration. If the department fails to approve a valid renewal application, it shall be deemed granted 60 days after its submission.

 

Section 35. A retailer, wholesaler, or safety compliance facility may not operate, and a prospective retailer, wholesaler, or safety compliance facility may not apply for a registration if any of the following are true:

     a. the entity would be located within 500 feet of the property line of a pre-existing public school, private school, or structure used primarily for religious services or worship; or

     b. the entity sells intoxicating liquor for consumption on the premises.

 

Section 36. Nothing shall prohibit local governments from enacting ordinances or regulations not in conflict with this section or with department rules regulating the time, place, and manner of wholesaler, retailer, or safety compliance facility operations, provided that no local government may prohibit wholesaler, retailer, or safety compliance facility operation altogether, either expressly or though the enactment of ordinances or regulations which make wholesaler, retailer, or safety compliance facility operation impracticable.

 

Section 37. No retailer, wholesaler, or other person may advertise the sale of marijuana in a manner contrary to the regulations established by the department.

 

Section 38. A retailer shall:

     1. Include a safety insert with all marijuana sold. The safety insert may, at the department’s discretion, be developed and approved by the department and include, but not be limited to, information on:

      a. methods for administering marijuana;
      b. any potential dangers stemming from the use of marijuana; and
      c. how to recognize what may be problematic usage of marijuana and obtain appropriate services or treatment for problematic usage.

    2. Sell marijuana in its original wholesaler packaging without making any changes or repackaging.

 
Section 39. A wholesaler must create a unique package and label for its marijuana identifying itself as the producer. The packaging shall include:

     1. The name or registration number of the wholesaler.

     2. If a safety compliance facility is operational, the potency of the marijuana, as determined by testing by a safety compliance facility, represented by the percentage of tetrahydrocannabinol by mass.

     3. A “Produced On” date which reflects the date that the wholesaler finished drying and processing the marijuana and placed it in its packaging.

     4. Warnings that state: “Consumption of marijuana impairs your ability to drive a car or operate machinery,” “Keep away from children,” and “Possession of marijuana is illegal outside of [xxState] and under federal law,” unless federal or state laws have changed.

 

Section 40. All marijuana cultivated by wholesalers shall be cultivated only in one or more enclosed, locked facilities, each of which must have been registered with the department, unless the department has ceased issuing or failed to begin issuing registrations. An “enclosed, locked facility” may include a building, room, greenhouse, fully enclosed fenced-in area, or other location enclosed on all sides and equipped with locks or other security devices that permit access only by:

(a)   employees, agents, or owners of the wholesaler, all of whom must be 21 years of age or older;

(b)   government employees performing their official duties;

(c)   contractors performing labor that does not include marijuana cultivation, packaging, or processing; contractors must be accompanied by an employee, agent, or owner of the wholesaler when they are in areas where marijuana is being grown or stored; or

(d)   members of the media, elected officials, and other individuals over the age of 21 touring the facility, if they are accompanied by an employee, agent, or owner of the wholesaler.

 

Section 41. A wholesaler or any person who is acting in his or her capacity as an owner, employee, or agent of a wholesaler must have documentation when transporting marijuana on behalf of the wholesaler that specifies the amount of marijuana being transported, the registry identification number of the wholesaler, the date the marijuana is being transported, and the registry identification number of the intended retailer or other wholesaler. If the retailer or wholesaler does not have a registration number because the department has ceased issuing registry identification certificates or has failed to begin issuing registry identification certificates, the retailer or wholesaler may instead use a number of its choosing that it consistently uses on documentation in place of a registry identification number.

 

 Section 42. 1. A retailer shall not:

     (a) Sell, give, or otherwise furnish marijuana or marijuana paraphernalia to any person who is under 21 years of age.

     (b) Allow any person who is under 21 years of age to be present inside any room where marijuana is stored or sold by the retailer unless the person who is under 21 years of age is a government employee performing his or her official duties, an elected official, a member of the media, or a contractor performing labor that does not include marijuana cultivation, packaging, or processing.

     (c) Sell, give, or otherwise furnish more than one ounce of marijuana or more than three seedlings or cuttings of marijuana to a person in a single transaction.

     (d) Knowingly and willfully sell, give, or otherwise furnish an amount of marijuana to a person that would cause that person to possess more than one ounce of marijuana or more than three marijuana plants, seedlings, or clones.

     (e) Purchase marijuana, other than marijuana seeds, from any person other than a wholesaler.

     (f) Violate regulations issued by the department.

     2. In addition to any other penalty provided pursuant to specific statutes, a retailer who violates this section is guilty of a misdemeanor and shall be punished by a fine of not more than $1,000.

     3. Except as otherwise provided in this subsection, in a prosecution for a violation of Sec. 42 (1) (a) or (b), it is a complete defense that before allowing a person who is under 21 years of age into the room where marijuana is sold or stored, a staff member for the retailer was shown a document which appeared to be issued by an agency of a federal, state, tribal, or foreign sovereign government and which indicated that the person who was allowed onto the premises of the retailer was 21 years of age or older at the time the person was allowed onto the premises of the retailer. The complete defense set forth in this subsection does not apply if:

     (a) The document which was shown to the person who allowed the person who is under 21 years of age onto the premises of the retailer was counterfeit, forged, altered, or issued to a person other than the person who was allowed onto the premises of the retailer; and

     (b) Under the circumstances, a reasonable person would have known or suspected that the document was counterfeit, forged, altered, or issued to a person other than the person who was allowed onto the premises.

     4. As used in this section, “marijuana paraphernalia” means equipment, products, and materials which are used or intended for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, ingesting, inhaling, or otherwise introducing marijuana into the human body.

 

Section 43. 1. A wholesaler shall not:

     (a) Allow any person who is under 21 years of age to be present on the premises of any of its enclosed, locked facilities where marijuana is cultivated or in any room where the wholesaler stores or processes marijuana unless the person is a department employee or public safety officer performing his or her duties, an elected official, a member of the media, or a contractor performing labor unrelated to marijuana cultivation, packaging, or processing.

     (b) Sell, give, or otherwise furnish marijuana to any person other than a retailer, wholesaler, safety compliance facility, or a staff member acting on behalf of a retailer, wholesaler, or safety compliance facility.

     (c) Purchase marijuana, other than marijuana seeds, from any person other than a wholesaler.

     (d) Purchase or sell, give, or otherwise furnish marijuana in any manner other than as is exempted from state penalties pursuant to the provisions of this chapter and any regulations adopted pursuant thereto.

     2. In addition to any other penalty provided pursuant to specific statutes, a person who violates this section is guilty of a misdemeanor and shall be punished by a fine of not more than $1,000.

     3. Except as otherwise provided in this subsection, in a prosecution for a violation of Sec. 43 (1)(a), it is a complete defense that before allowing the person who is under 21 years of age onto the premises, a staff member of the wholesaler was shown a document which appeared to be issued by an agency of a federal, state, tribal, or foreign sovereign government and which indicated that the person who was allowed onto the premises of the wholesaler was 21 years of age or older at the time the person was allowed onto the premises of the wholesaler. The complete defense set forth in this subsection does not apply if:

     (a) The document which was shown to the person who allowed the person who is under 21 years of age onto the premises of the wholesaler was counterfeit, forged, altered, or issued to a person other than the person who was allowed onto the premises of the wholesaler; and

     (b) Under the circumstances, a reasonable person would have known or suspected that the document was counterfeit, forged, altered, or issued to a person other than the person who was allowed onto the premises.

 

Section 44. 1. The department may suspend or terminate the registration of a retailer, wholesaler, or safety compliance facility that commits multiple or serious violations of this act or reasonable regulations issued pursuant to it.

2. If the department has ceased issuing registrations or has not begun issuing registrations, and a retailer, wholesaler, or safety compliance facility lacks a registration as a result, any city or county where the retailer, wholesaler, or safety compliance facility is operating may file for an injunction in ___ Court if the retailer has committed multiple or serious violations of this act or regulations issued pursuant to it.

 

Section 45. An excise tax is hereby levied upon wholesalers and must be collected respecting all marijuana sold to retailers at the rate of either $50 per ounce or proportionate part thereof, or an amount that the department may set that adjusts the initial $50 per ounce rate for inflation or deflation based on the Consumer Price Index.

 

Section 46. The department shall apportion the money remitted to the department from registration fees and taxes collected pursuant to this chapter in the following manner:

     1. The department shall retain sufficient money to defray the entire cost of administration of this chapter.

     2. After retaining sufficient money to defray the entire cost of administration of this chapter pursuant to subsection 1, the department shall remit the remaining money to the [xxState] General Fund, 40 percent of which must be distributed to the [xxState health agency] for use in voluntary programs for the prevention or treatment of the abuse of alcohol, tobacco, or controlled substances, and 10 percent of which must be spent on clinical research into the medical efficacy of marijuana.

 

Section 47. 1. The department is responsible for administering and carrying out the provisions of this chapter.

     2. The department may adopt regulations that are necessary and convenient to administer and carry out the provisions of this chapter.

     3. The department shall adopt regulations that:

     (a) Set forth the procedures for the application for and issuance of registrations to retailers, wholesalers, and safety compliance testing facilities, including the content and form for an application to be registered as a retailer, wholesaler, or safety compliance facility.

     (b) Specify the procedures for the collection of taxes levied pursuant to this chapter.

     (c) Specify the content, form, and timing of reports which must be completed by each retailer, wholesaler, and safety compliance facility and which must be available for inspection by the department. The reports shall include information on sales, expenses, inventory, and taxes and shall be retained for at least one year after the forms’ completion.

     (d) Specify the requirements for the packaging and labeling of marijuana, including those in section 39.

     (e) Specify the requirements for the safety insert to be included with marijuana by retailers, including those in section 38, if the department chooses to do so.

     (f) Establish reasonable security requirements for wholesalers and retailers.

     (g) Require the posting or display of the registration of a retailer, wholesaler, or safety compliance facility.

     (h) Establish restrictions on advertising for the sale of marijuana, which shall be in compliance with the [xxState] and U.S. Constitution. These restrictions may not prevent appropriate signs on the property of the retailer or wholesaler, listings in business directories including phone books, listings in publications focused on marijuana, or the sponsorship of health or not-for-profit charity or advocacy events.

     (i) Establish procedures for inspecting and auditing the records or premises of a retailer, wholesaler, or safety compliance facility.

     (j) Set a schedule of civil fines for violations of this act and regulations issued pursuant to the act.

     (k) Set forth the procedures for hearings on civil fines and suspensions and revocation of a registration as a retailer, wholesaler, or safety compliance facility for a violation of any provision of this chapter or the regulations adopted pursuant to this chapter.

     (l) Establish reasonable environmental controls to ensure that any registered wholesalers, retailers, and safety compliance facilities minimize any harm to the environment, adjoining and nearby landowners, and persons passing by. This may include restrictions on the use of pesticides.

     (m) Establish rules requiring wholesalers and retailers to create identification cards for their employees and providing for the contents of the identification cards.

     (n) Establish rules for the safe transportation of marijuana.

     4. The department shall make available free of charge all forms for applications and reports.

     5. The department shall issue all registrations as required by sections 27 through 48.

     6. Except as provided in this paragraph, the department shall keep the name and address of each wholesaler, retailer, and safety compliance facility and each owner, employee, or agent of a wholesaler, retailer, and safety compliance facility confidential and refuse to disclose this information to any individual or public or private entity, except as necessary for authorized employees of the department to perform official duties of the department pursuant to this chapter. The department may confirm to a state or local law enforcement officer that a retailer, wholesaler, or safety compliance facility holds a valid registration if the law enforcement officer inquires about the specific location or entity.

 

Section 48. 1. The department shall adopt regulations to implement this act and shall begin accepting applications for retailers, wholesalers, and safety compliance facilities within 180 days of the effective date of this act.

     2. If the department fails to adopt regulations to implement this act and begin processing applications for retailers and wholesalers within 180 days of the effective date of this act, any citizen may commence an action in a court of competent jurisdiction to compel the department to perform the actions mandated pursuant to the provisions of this act. 

 

Section 49. [xxapplicable title of state law] is hereby amended by adding thereto a new chapter to consist of the provisions set forth as Sections 50 to 55, inclusive, of this act.

 

Section 50. As used in this chapter, unless the context otherwise requires, the words and terms defined in section 51 have the meanings ascribed to them in that section.

 

Section 51. “Industrial Hemp” means any low-tetrahydrocannabinal oil-seed and fiber variety of Cannabis satvia L. with a delta-9-tetrahydrocannabinol concentration that does not exceed 0.3% on a dry weight basis.

 

Section 52. Notwithstanding any other provision of law, it is not a violation of state or local law for a person to plant, grow, harvest, possess, process, sell, and buy industrial hemp if that person does so in compliance with any rules and regulations promulgated by the [xxState agency overseeing agricultural matters] as required in section 54.

 

Section 53. Notwithstanding any other provision of law, it is not a violation of state or local law for any person to purchase and possess any material or product made, in part or in entirety, with industrial hemp.

 

Section 54. [xxState agency overseeing agricultural matters] shall promulgate rules and regulations necessary to register a person to plant, grow, harvest, possess, process, sell, and buy industrial hemp and set reasonable fees in accordance with this provision.         

 

Section 55. If any provision of this act, or the application thereof to any person, thing, or circumstance is held invalid, such invalidity shall not affect the provisions or application of this act which can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable.

 

Section 56. Annual reports.

(a) (1) The governor shall appoint a 12-member advisory committee comprised of: one member of the House of Representatives; one representative of the department; one member of the Senate; one physician with experience in medical marijuana issues; one economist; one board member or principal officer of a registered safety compliance facility; one individual with experience in policy development or implementation in the field of marijuana policy; one public health professional; one sociologist; one attorney familiar with First Amendment law; one expert in criminal justice; and one researcher.

(2) The oversight committee shall meet at least two times per year for the purpose of collecting information, evaluating the effects of this act, and making recommendations to the department, including regarding:

(a) The content of safety inserts;

(b) Whether additional warning labels should be added;

(c) Strategies for educating physicians and the public about research relating to marijuana's benefits and risks;

(d) Any effect on organized crime in the state;

(e) Quality control and labeling standards;

(f) Recommendations on restrictions on advertising; and

(g) Recommendations for reporting and data monitoring related to beneficial and adverse effects of marijuana;

(h) An update on the latest research related to driving under the influence of marijuana, along with recommendations regarding policies for roadside sobriety tests and any recommended changes to driving under the influence statutes.

(3) The department shall submit to the legislature an annual report by the first Thursday of every year, including:

(a) the direct revenue and costs related to implementing this act, including revenue from taxes, fines, and fees;

(b) the number of registrations suspended and revoked, and the nature of revocations;

(c) the numbers of zip ties sold annually; and

(d) the findings of the oversight committee.

 

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