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SB1641 - 572R - S Ver
Senate Engrossed
marijuana producers;
licensure
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1641
AN
ACT
AMEnding sections 36-2850, 36-2854,
36-2857, 36-2858, 36-2859, 36-2860, 36-2861, 36-2864
and 36-2865, Arizona Revised Statutes; relating to marijuana.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section
1.
1. Subject
to the requirements of article IV, part 1, section 1, Constitution of
Arizona, section 36-2850, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2850.
Definitions
In this chapter, unless the context requires otherwise:
1. "Advertise," "advertisement"
and "advertising" mean any public communication in any medium that
offers or solicits a commercial transaction involving the sale, purchase or
delivery of marijuana or marijuana products.
2. "Child-resistant" means designed
or constructed to be significantly difficult for children under five years of
age to open
,
and not difficult for normal adults to
use properly.
3. "Consume," "consuming" and
"consumption" mean the act of ingesting, inhaling or otherwise
introducing marijuana into the human body.
4. "Consumer" means an individual who is
at least twenty-one years of age and who purchases marijuana or marijuana
products.
5. "Cultivate" and "cultivation"
mean to propagate, breed, grow, prepare and package marijuana.
6. "Deliver" and "delivery" mean
the transportation, transfer or provision of marijuana or marijuana products to
a consumer at a location other than the designated retail location of a
marijuana establishment.
7. "Department" means the department of
health services or its successor agency.
8. "Designated caregiver" has the same
meaning prescribed in section 36-2801.
9. "Dual licensee" means an entity that
holds both a nonprofit medical marijuana dispensary registration and a
marijuana establishment license.
10. "Early applicant" means either of the
following:
(a) An entity seeking to operate a marijuana
establishment in a county with fewer than two registered nonprofit medical
marijuana dispensaries.
(b) A nonprofit medical marijuana dispensary that is
registered and in good standing with the department.
11. "Employee," "employer,"
"health care facility," and "places of employment" have the
same meanings prescribed in
the smoke-free Arizona act,
section 36-601.01.
12. "Excluded felony offense" has the same
meaning prescribed in section 36-2801.
13. "Good standing" means that a nonprofit
medical marijuana dispensary is not the subject of a pending notice of intent
to revoke issued by the department.
14. "Independent third-party laboratory"
has the same meaning prescribed in section 36-2801.
15. "Industrial hemp" has the same meaning
prescribed in section 3-311.
16. "Licensee" means a person that obtains
a license pursuant to section 36-2854.
17. "Locality" means a city, town or
county.
18. "Manufacture" and
"manufacturing" mean to compound, blend, extract, infuse or otherwise
make or prepare a marijuana product.
19. "Marijuana":
(a) Means all parts of the plant of the genus
cannabis, whether growing or not, as well as the seeds from the plant, the
resin extracted from any part of the plant, and every compound, manufacture,
salt, derivative, mixture or preparation of the plant or its seeds or resin.
(b) Includes cannabis as defined in 13-3401.
(c) Does not include industrial hemp, the fiber
produced from the stalks of the plant of the genus cannabis, oil or cake made
from the seeds of the plant, sterilized seeds of the plant that are incapable
of germination, or the weight of any other ingredient combined with marijuana
to prepare topical or oral administrations, food, drink or other products.
20. "Marijuana concentrate":
(a) Means resin extracted from any part of a plant
of the genus cannabis and every compound, manufacture, salt, derivative,
mixture or preparation of that resin or tetrahydrocannabinol.
(b) Does not include industrial hemp or the weight
of any other ingredient combined with cannabis to prepare topical or oral
administrations, food, drink or other products.
21. "Marijuana establishment" means an
entity that is licensed by the department to operate all of the following:
(a) A single retail location at which the licensee
may sell marijuana and marijuana products to consumers, cultivate marijuana and
manufacture marijuana products.
(b) A single off-site cultivation location at
which the licensee may cultivate marijuana, process marijuana and manufacture
marijuana products, but from which marijuana and marijuana products may not be
transferred or sold to consumers.
(c) A single off-site location at which the
licensee may manufacture marijuana products and package and store marijuana and
marijuana products, but from which marijuana and marijuana products may not be
transferred or sold to consumers.
22. "Marijuana facility agent" means a
principal officer, board member or employee of a marijuana establishment or
marijuana testing facility who is at least twenty-one years of age and who has
not been convicted of an excluded felony offense.
23. "Marijuana
producer" means an entity that is licensed by the department to operate a
single location at which the licensee may cultivate marijuana, process
marijuana, manufacture marijuana products and package and store marijuana and
marijuana products but from which marijuana and marijuana products may not be
transferred or sold to consumers.
23.
24.
"Marijuana
products
product
" means
marijuana concentrate and
products
any
product
that
are
is
composed
of marijuana and other ingredients and that
are
is
intended for use or consumption, including edible products,
ointments and tinctures.
24.
25.
"Marijuana
testing facility" means the department or another entity that is licensed
by the department to analyze the potency of marijuana and test marijuana for
harmful contaminants.
25.
26.
"Nonprofit
medical marijuana dispensary" has the same meaning prescribed in section
36-2801.
26.
27.
"Nonprofit
medical marijuana dispensary agent" has the same meaning prescribed in
section 36-2801.
27.
28.
"Open
space" means a public park, public sidewalk, public walkway or public
pedestrian thoroughfare.
28.
29.
"Process"
and "processing" mean to harvest, dry, cure, trim or separate parts
of the marijuana plant.
29.
30.
"Public
place" has the same meaning prescribed in section 36-601.01.
30.
31.
"Qualifying
patient" has the same meaning prescribed in section 36-2801.
31.
32.
"Smoke"
means to inhale, exhale, burn, carry or possess any lighted marijuana or
lighted marijuana products, whether natural or synthetic.
END_STATUTE
Sec.
2.
2. Subject
to the requirements of article IV, part 1, section 1, Constitution of Arizona,
section 36-2854, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2854.
Rules; licensing; early applicants; fees; civil penalty; legal
counsel
A. The department shall adopt rules to implement and
enforce this chapter and regulate marijuana, marijuana products, marijuana
establishments
, marijuana producers
and marijuana testing
facilities. Those rules shall include requirements for:
1. Licensing marijuana establishments
,
marijuana producers
and marijuana testing facilities, including
conducting investigations and background checks to determine eligibility for
licensing for marijuana establishment
, marijuana producer
and marijuana testing facility applicants, except that:
(a) An application for a marijuana establishment
license
, marijuana producer license
or marijuana testing
facility license may not require the disclosure of the identity of any person
who is entitled to a share of less than ten percent of the profits of an
applicant that is a publicly traded corporation.
(b) The department may not issue more than one
marijuana establishment license for every ten pharmacies that have registered
under section 32-1929, that have obtained a pharmacy permit from the
Arizona board of pharmacy and that operate within this state.
(c) Notwithstanding subdivision (b) of this
paragraph, the department may issue a marijuana establishment license to not
more than two marijuana establishments per county that contains no registered
nonprofit medical marijuana dispensaries, or one marijuana establishment
license per county that contains one registered nonprofit medical marijuana
dispensary. Any license issued pursuant to this subdivision shall be
for a fixed county and
may not be
relocated outside of that county.
(d) The department shall accept applications for
marijuana establishment licenses from early applicants beginning January 19,
2021 through March 9, 2021. Not later than sixty days after
receiving an application pursuant to this subdivision, the department shall
issue a marijuana establishment license to each qualified early
applicant. If the department has not adopted final rules pursuant to
this section at the time marijuana establishment licenses are issued pursuant
to this subdivision, licensees shall comply with the rules adopted by the
department to implement chapter 28.1 of
this title except those that are inconsistent with this chapter.
(e) After issuing marijuana establishment licenses
to qualified early applicants, the department shall issue marijuana
establishment licenses available under subdivisions (b) and (c) of this
paragraph by random selection and according to rules adopted pursuant to this
section. At least sixty days before any random selection, the department shall
prominently
publicize the
random selection on its website and through other means of general distribution
intended to reach as many interested parties as possible and shall provide
notice through an email notification system to which interested parties can
subscribe.
(f) Notwithstanding subdivisions (b) and (c) of this
paragraph, and not later than six months after the department adopts final
rules to implement a social equity ownership program pursuant to paragraph 9 of
this subsection, the department shall issue twenty-six additional
marijuana establishment licenses to entities that are qualified pursuant to the
social equity ownership program.
(
g
) Beginning
January 1, 2029, the department shall accept applications for marijuana
producer licenses.� Until January 1, 2032, the department shall accept
applications only from entities that contracted on or before January 1, 2026
with a marijuana establishment, a nonprofit medical marijuana dispensary or a
management company for a marijuana establishment or a nonprofit medical
marijuana dispensary to have a right to cultivate marijuana or manufacture
marijuana products and keep all or substantially all of the profits generated
from that cultivation.� Until January 1, 2032, the department shall prohibit
the transfer or sublease of marijuana producer licenses and prohibit entities
that lack a marijuana producer license from cultivating marijuana or manufacturing
marijuana products at marijuana producer sites.� Beginning in
2032, the department
may issue additional
marijuana producer licenses. unless specifically identified in this
chapter, the department shall not impose any restrictions or obligations on
marijuana producers that are not imposed on marijuana establishments.
(g)
(
h
)
Licenses issued by the department to marijuana
establishments
, marijuana producers
and marijuana testing
facilities shall be valid for a period of two years.� A dual licensee's
initial renewal date, which will be the ongoing renewal date for both the dual
licensee's marijuana establishment license and nonprofit medical marijuana dispensary
registration, is the earlier of:
(i) The date of the marijuana establishment license
renewal.
(ii) The date of the nonprofit medical marijuana
dispensary registration renewal.
(h)
(
i
)
The department may not issue a marijuana
establishment
, marijuana producer
or marijuana testing
facility license to an applicant who has an ownership interest in an out-of-state
marijuana establishment
, marijuana producer
or marijuana
testing facility, or the other state's equivalent, that has had its license
revoked by the other state.
2. Licensing fees and renewal fees for marijuana
establishments
, marijuana producers
and marijuana testing
facilities in amounts that are reasonable and related to the actual cost of
processing applications for licenses and renewals and that do not exceed five
times the fees prescribed by the department to register or renew a nonprofit medical
marijuana dispensary.
3. The security of marijuana establishments
, marijuana producers
and marijuana testing facilities.
4. Marijuana establishments
and
marijuana producers
to safely cultivate, process and manufacture
marijuana and marijuana products. The department shall require
licensees to procure, develop, acquire and maintain a system to track marijuana
and marijuana products at all points of cultivation, manufacturing and sale
, as applicable
. The system developed and maintained pursuant
to this paragraph shall:
(a) Ensure an accurate accounting and reporting of
the production, processing and sale of marijuana and marijuana products.
(b) Ensure compliance with rules adopted by the
department.
(c) Be capable of tracking, at a minimum:
(i) The propagation of immature marijuana plants and
the production of marijuana by a marijuana establishment
or
marijuana producer
.
(ii) The processing of marijuana and marijuana
products by a marijuana establishment
or marijuana producer
.
(iii) The sale and purchase of marijuana and
marijuana products between licensees.
(iv) The transfer of marijuana and marijuana
products between premises for which licenses have been issued.
(v) The disposal of marijuana waste.
(vi) The identity of the person making the entry in
the system and the time, date and location of each entry into the system,
including any corrections or changes to that information.
(vii) Any other information that the department
determines is reasonably necessary to accomplish the duties, functions and
powers of the department.
(d) Contain a transactional stamp to ensure
accuracy, provide for chain of custody of the information and foreclose
tampering of the data, human error or intentional misreporting.
5. Tracking, testing, labeling consistent with
section 36-2854.01 and packaging marijuana and marijuana products,
including requirements that marijuana and marijuana products be:
(a) Sold to consumers in clearly and conspicuously
labeled containers that contain accurate warnings regarding the use of
marijuana or marijuana products.
(b) Placed in child-resistant packaging on
exit from a marijuana establishment.
6. Forms of government-issued identification that
are acceptable by a marijuana establishment verifying a consumer's age and
procedures related to verifying a consumer's age consistent with section 4-241.
Until the department adopts final rules related to verifying a consumer's age,
marijuana establishments shall comply with the proof of legal age requirements
prescribed in section 4-241.
7. The potency of edible marijuana products that may
be sold to consumers by marijuana establishments at reasonable levels on
consideration of industry standards, except that the rules:
(a) Shall limit the strength of edible marijuana
products to not more than ten milligrams of tetrahydrocannabinol per serving or
one hundred milligrams of tetrahydrocannabinol per package.
(b) Shall require that if a marijuana product
contains more than one serving, it must be delineated or scored into standard
serving sizes and homogenized to ensure uniform disbursement throughout the
marijuana product.
8. Ensuring the health, safety and training of
employees of marijuana establishments and marijuana testing facilities.
9. The creation and
implementation of a social equity ownership program to promote the ownership
and operation of marijuana establishments and marijuana testing facilities by
individuals from communities disproportionately impacted by the enforcement of
previous marijuana laws.
10. Prohibiting a marijuana testing facility from
having any direct or indirect familial relationship with or financial ownership
interest in a marijuana establishment
,
marijuana
producer
or related marijuana business entity or management
company. The rules shall include prohibiting a marijuana
establishment
or marijuana producer
from having any
direct or indirect familial relationship with or financial ownership interest
in a marijuana testing facility or related marijuana business entity or
management company.
11. Requiring marijuana establishments to display in
a conspicuous location a sign that warns pregnant women about the potential
dangers to fetuses caused by smoking or ingesting marijuana while pregnant or
to infants while breastfeeding and the risk of being reported to the department
of child safety during pregnancy or at the birth of the child by persons who
are required to report. The rules shall include the specific warning
language that must be included on the sign. The cost and display of
the sign required by rule shall be borne by the marijuana establishment.
B. The department may:
1. Subject to title 41, chapter 6, article 10, deny
any application submitted or deny,
suspend
or revoke, in whole or in part, any registration or license issued under this
chapter if the registered or licensed party or an officer, agent or employee of
the registered or licensed party does any of the following:
(a) Violates this chapter or any rule adopted
pursuant to this chapter.
(b) Has been, is or may continue to be in
substantial violation of the requirements for licensing or registration and, as
a result, the health or safety of the general public is
in i
mmediate danger.
2. Subject to title 41, chapter 6, article 10, and
unless another penalty is provided elsewhere in this chapter, assess a civil
penalty against a person that violates this chapter or any rule adopted
pursuant to this chapter in an amount not to exceed $2,000 for each violation.�
Each day a violation occurs constitutes a separate violation. In
determining the amount of a civil penalty assessed against a person, the
department shall consider all of the factors set forth in section 36-2816,
subsection H. All civil penalties collected by the department
pursuant to this paragraph shall be deposited in the smart and safe Arizona
fund established by section 36-2856.
3. At any time during
regular hours of operation, visit and inspect a marijuana establishment,
marijuana testing facility or dual licensee to determine if it complies with
this chapter and rules adopted pursuant to this chapter. The
department shall make at least one
unannounced
visit annually to each facility licensed pursuant to this chapter.
4. Adopt any other rules that are not expressly
stated in this section and that are necessary to ensure the safe and
responsible cultivation, sale, processing, manufacture, testing and transport
of marijuana and marijuana products.
C. Until the department adopts rules allowing and
regulating delivery by marijuana establishments pursuant to subsection D of
this section, delivery is unlawful under this chapter.
D. On or after January 1, 2023, the department may,
and not later than January 1, 2025 the department shall, adopt rules to allow
and regulate delivery by marijuana establishments.� The rules shall:
1. Require that delivery and the marijuana and
marijuana products to be delivered originate from a designated retail location
of a marijuana establishment and only after an order is made with the marijuana
establishment by a consumer. The rules may not limit the distance
between the delivery location and the originating designated retail location of
the marijuana establishment.
2. Prohibit delivery to any property owned or leased
by the United States, this state, a political subdivision of this state or the
Arizona board of regents.
3. Limit the amount of marijuana and marijuana
products based on retail price that may be in a delivery vehicle during a
single trip from the designated retail location of a marijuana
establishment.
4. Prohibit extra or unallocated marijuana or
marijuana products in delivery vehicles.
5. Require that deliveries be made only by marijuana
facility agents in unmarked vehicles that are equipped with a global
positioning system or similar location tracking system and video surveillance
and recording equipment, and that contain a locked compartment in which
marijuana and marijuana products must be stored.� The rules may not limit the
number of vehicles that a marijuana establishment may use for delivery.
6. Require delivery logs necessary to ensure
compliance with this subsection and rules adopted pursuant to this subsection.
7. Require inspections to ensure compliance with
this subsection and rules adopted pursuant to this subsection.
8. Include any other provisions necessary to ensure
safe and restricted delivery.
9. Require dual licensees to comply with the rules
adopted pursuant to this subsection.
E. Except as provided in subsection D of this
section, the department may not allow delivery of marijuana or marijuana
products under this chapter by any individual or entity. In addition
to any other penalty imposed by law, an individual or entity that delivers
marijuana or marijuana products in a manner that is not authorized by this
chapter shall pay a civil penalty of $20,000 per violation to the smart and
safe Arizona fund established by section 36-2856. This
subsection may be enforced by the attorney general.
F. All rules adopted by the department pursuant to
this section shall be consistent with the purpose of this chapter.
G. The department may not adopt any rule that:
1. Prohibits the operation of marijuana
establishments
or marijuana producers
, either expressly
or through requirements that make the operation of a marijuana establishment
or marijuana producer
unduly burdensome.
2. Prohibits or interferes with the ability of a
dual licensee to operate a marijuana establishment and a nonprofit medical
marijuana dispensary at shared locations.
H. Notwithstanding section 41-192, the
department may employ legal counsel and make an expenditure or incur an
indebtedness for legal services for the purposes of:
1. Defending this chapter or rules adopted pursuant
to this chapter.
2. Defending chapter 28.1 of this title or rules
adopted pursuant to chapter 28.1 of this title.
I. The department shall deposit all license fees,
application fees and renewal fees paid to the department pursuant to this
chapter in the smart and safe Arizona fund established by section 36-2856.
J. On request, the department of health services
shall share with the department of revenue information regarding a marijuana
establishment, marijuana testing facility or dual licensee, including its name,
physical address, cultivation site and transaction privilege tax license
number.
K. Notwithstanding any other law, the department
may:
1. License an independent third-party
laboratory to also operate as a marijuana testing facility.
2. Operate a marijuana testing facility.
L. The department shall maintain and publish a
current list of all marijuana establishments
, marijuana
producers
and marijuana testing facilities by name and license number.
M. Notwithstanding any other law, the issuance of an
occupational, professional or other regulatory license or certification to a
person by a jurisdiction or regulatory authority outside this state does not
entitle that person to be issued a marijuana establishment license, a marijuana
testing facility license, or any other license, registration or certification
under this chapter.
N. Until the department adopts rules as required by
subsection A, paragraph 10 of this section:
1. A marijuana testing facility is prohibited from
having any direct or indirect familial relationship with or financial ownership
interest in a marijuana establishment
, marijuana producer
or related marijuana business entity or management company.
2. A marijuana establishment
or
marijuana producer
is prohibited from having any direct or indirect
familial relationship with or financial ownership interest in a marijuana
testing facility or related marijuana business entity or management company.
END_STATUTE
Sec.
3.
3. Subject
to the requirements of article IV, part 1, section 1, Constitution of Arizona,
section 36-2857, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2857.
Localities; marijuana establishments, marijuana producers and
marijuana testing facilities
A. A locality may:
1. Enact reasonable zoning regulations that limit
the use of land for marijuana establishments
, marijuana
producers
and marijuana testing facilities to specified areas.
2. Limit the number of marijuana establishments
, marijuana producers
or marijuana testing facilities, or
both
any combination thereof
.
3. Prohibit marijuana establishments
,
marijuana producers
or marijuana testing facilities, or
both
any combination thereof
.
4. Regulate the time, place and manner of marijuana
establishment
, marijuana producer
and marijuana testing
facility operations.
5. Establish reasonable restrictions on public
signage regarding marijuana, marijuana establishments
, marijuana
producers
and marijuana testing facilities.
6. Prohibit or restrict delivery within
its
the locality's
jurisdiction.
B. A county may exercise its authority pursuant to
subsection A of this section only in unincorporated areas of the county.
C. A locality may not enact any ordinance,
regulation or rule that:
1. Is more restrictive than a comparable ordinance,
regulation or rule that applies to nonprofit medical marijuana dispensaries.
2. Makes the operation of a marijuana establishment
, marijuana producer
or marijuana testing facility unduly
burdensome if the locality has not prohibited marijuana establishments
, marijuana producers
or marijuana testing facilities.
3. Conflicts with this chapter or rules adopted
pursuant to this chapter.
4. Prohibits the transportation of marijuana by a
marijuana establishment
, marijuana producer
or marijuana
testing facility on public roads.
5. Restricts or interferes with the ability of a
dual licensee or an entity eligible to become a dual licensee to operate a
nonprofit medical marijuana dispensary and a marijuana establishment
cooperatively at shared locations.
6. Except as expressly authorized by this
section or section 36-2851, prohibits or restricts any conduct or
transaction allowed by this chapter, or imposes any liability or penalty in
addition to that prescribed by this chapter for any conduct or transaction
constituting a violation of this chapter.
7. Allows a marijuana establishment to locate within
five hundred feet of a public or private school, a child care facility or a
facility that provides preschool programs.
END_STATUTE
Sec.
4.
4. Subject
to the requirements of article IV, part 1, section 1, Constitution of
Arizona, section 36-2858, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2858.
Lawful operation of marijuana establishments, marijuana producers
and marijuana testing facilities
A. Except as specifically and expressly provided in
section 36-2857 and notwithstanding any other law, it is lawful and is
not an offense under the laws of this state or any locality, may not constitute
the basis for detention, search or arrest, and may not constitute the sole
basis for seizure or forfeiture of assets or the basis for imposing penalties
under the laws of this state or any locality for:
1. A marijuana establishment, or an agent acting on
behalf of a marijuana establishment, to:
(a) Possess marijuana or marijuana products.
(b) Purchase, sell or transport marijuana and
marijuana products to or from a marijuana establishment
or
marijuana producer
.
(c) Sell marijuana and marijuana products to
consumers, except that a marijuana establishment may not sell more than one
ounce of marijuana to a consumer in a single transaction, not more than five
grams of which may be in the form of marijuana concentrate.
(d) Cultivate, produce, test or process marijuana or
manufacture marijuana or marijuana products by any means, including chemical
extraction or chemical synthesis.
2. An agent acting on behalf of a marijuana
establishment to sell or otherwise transfer marijuana to an individual under
twenty-one years of age, if the agent reasonably verified that the individual
appeared to be twenty-one years of age or older by means of a government-issued
photographic identification in compliance with rules adopted pursuant to
section 36-2854, subsection A, paragraph 6.
3. A
marijuana producer, or an agent acting on behalf of a marijuana producer, to:
(
a
) Possess marijuana or marijuana products.
(
b
) Purchase, sell or transport marijuana and marijuana
products to or from a marijuana establishment or marijuana producer.
(
c
) Cultivate,
produce, test or process marijuana or marijuana products by any means,
including chemical extraction or chemical synthesis.
3.
4.
A
marijuana testing facility, or an agent acting on behalf of a marijuana testing
facility, to obtain, possess, process, repackage, transfer, transport or test
marijuana and marijuana products.
4.
5.
A
nonprofit medical marijuana dispensary or a marijuana establishment, or an
agent acting on behalf of a nonprofit medical marijuana dispensary or a
marijuana establishment, to sell or otherwise transfer marijuana or marijuana
products to a nonprofit medical marijuana dispensary, a marijuana establishment
or an agent acting on behalf of a nonprofit medical marijuana dispensary or a
marijuana establishment.
5.
6.
Any
individual, corporation or other entity to sell, lease or otherwise allow
property or goods that are owned, managed or controlled by the individual,
corporation or other entity to be used for any activity authorized by this
chapter, or to provide services to a marijuana establishment
,
or marijuana testing facility
,
or
an
agent
acting on behalf of a marijuana establishment or marijuana testing facility
,
in connection with any activity authorized by this chapter.
B. This section does not preclude the department
from imposing penalties against a marijuana establishment
,
marijuana producer
or marijuana testing facility for failing to comply
with this chapter or rules adopted pursuant to this chapter.
C. A marijuana establishment
or
marijuana producer
may be owned or operated by a publicly traded
company.
D. Notwithstanding any other law, a dual licensee:
1. May hold a marijuana establishment license and
operate a marijuana establishment pursuant to this chapter.
2. May operate on a for-profit basis if the dual
licensee promptly notifies the department and department of revenue and takes
any actions necessary to enable its for-profit operation, including
converting its corporate form and amending its organizational and operating
documents.
3. Must continue to hold both its marijuana
establishment license and nonprofit medical marijuana dispensary registration,
regardless of any change in ownership of the dual licensee, unless it
terminates its status as a dual licensee and forfeits either its marijuana
establishment license or nonprofit medical marijuana dispensary registration by
notifying the department of such a termination and forfeiture.
4. Is not required
to:
(a) Employ or
contract with a medical director.
(b) Obtain nonprofit
medical marijuana dispensary agent or marijuana facility agent registrations
for outside vendors that do not have regular, unsupervised access to the
interior of the dual licensee's premises.
(c) Have a single secure entrance as required by
section 36-2806, subsection C, but may be required to implement
appropriate security measures to deter and prevent the theft of marijuana and
to reasonably regulate customer access to the premises.
(d) Comply with any other provision of chapter 28.1
of this title or any rule adopted pursuant to chapter 28.1 of this title that
makes its operation as a dual licensee unduly burdensome.
E. Notwithstanding any other law, a dual licensee
that elects to operate on a for-profit basis pursuant to subsection D,
paragraph 2 of this section:
1. Is subject to the taxes imposed pursuant to title
43.
2. Is not required to submit its annual financial
statements or an audit report to the department for purposes of renewing its
nonprofit medical marijuana dispensary registration.
F. Notwithstanding any other law, a dual licensee
must conduct both of the following operations at a shared location:
1. Sell marijuana and marijuana products to
consumers pursuant to this chapter.
2. Dispense marijuana to registered qualifying
patients and registered designated caregivers pursuant to chapter 28.1 of this
title.
G. Notwithstanding chapter 28.1 of this title or any
rule adopted pursuant to chapter 28.1 of this title, a dual licensee may engage
in any act, practice, conduct or transaction allowed for a marijuana
establishment by this chapter.
H. Notwithstanding any other law:
1. An individual may be an applicant, principal
officer or board member of more than one marijuana establishment or more than
one dual licensee regardless of the establishment's location.
2. Two or more marijuana establishments
, marijuana producers
or dual licensees may designate a single
off-site location as prescribed in section 36-2850, paragraph 21, subdivision
(c) to be jointly used by those dual licensees
, marijuana
producers
or marijuana establishments.
I. Marijuana establishments,
marijuana
producers,
marijuana testing facilities and dual licensees that are
subject to applicable federal or state antidiscrimination laws may not pay
their employees differently based solely on a protected class status such as
sex, race, color, religion, national origin, age or disability. This
subsection does not expand or modify the jurisdictional reach, provisions or
requirements of any applicable antidiscrimination law.
END_STATUTE
Sec.
5.
5. Subject to the requirements of article IV, part
1, section 1, Constitution of Arizona, section 36-2859, Arizona Revised
Statutes, is amended to read:
START_STATUTE
36-2859.
Advertising; restrictions; warning; enforcement; civil penalty;
exception
A. A marijuana establishment
,
marijuana producer
or nonprofit medical marijuana dispensary may
advertise or authorize advertising for marijuana or marijuana products in
accordance with restrictions imposed by this section.
B. An individual or entity that sells marijuana
paraphernalia may advertise or authorize advertising for marijuana
paraphernalia in accordance with restrictions imposed by this section.
C. A marijuana establishment, a nonprofit medical
marijuana dispensary or an individual or entity that sells marijuana
paraphernalia may engage in advertising but may not do any of the following:
1. Advertise marijuana or marijuana products,
including marijuana paraphernalia, to individuals who are under twenty-one
years of age, including advertising:
(a) With names that resemble or imitate food or
drink brands that are marketed to children.
(b) With images or likenesses of toys, cartoons or
animated or fictional characters, including Santa Claus, that are designed to
appeal to or encourage individuals who are under twenty-one years of age
to consume marijuana or marijuana products.
(c) With images or visual representations of the
consumption of marijuana or marijuana products.
(d) With the potency or tetrahydrocannabinol levels
of the marijuana or marijuana product.
(e) In a medium that specifically appeals to
individuals who are under twenty-one years of age such that the
advertising has a special attractiveness to individuals who are under twenty-one
years of age beyond general attractiveness for individuals who are at least
twenty-one years of age.
2. Advertise at, on or within public airports,
public transportation shelters, public buses, public trains, public shuttles or
public trams.
3. Advertise electronically, via social media or on
a website, unless at least 73.6 percent of the audience is expected to be at
least twenty-one years of age.
4. Advertise any health-related statement or
statement regarding the effects of marijuana consumption on health that is
known to be untrue.
5. Sponsor any sporting event
unless
at least 73.6 percent of the audience is expected to be at least twenty-one
years of age or the sponsored organization provides written
approval. Any sponsorship acknowledgment shall be in accordance with
restrictions imposed by this section.
D. All advertising pursuant to this section
must contain the following conspicuous and legible
warning: "Do not use marijuana if you are under twenty-one
years of age or pregnant. Keep marijuana out of reach of
children." All printed warnings must occupy at least ten
percent of the advertising area and must be in black font on a white background,
except that billboard advertisement warnings shall be in a type size that is at
least ten percent of the largest type used in the advertisement.
E. A billboard advertisement under this section is
prohibited within one thousand radial feet of any child care center, church,
substance abuse recovery facility, public park, public playground or public or
private school that provides instruction to students in preschool or
kindergarten programs or any of grades one through twelve.� An individual or
entity that violates this subsection, on notification by the attorney general's
office, has thirty days to comply with these requirements. For
circumstances beyond the control of the billboard operator that may prevent
removal within the prescribed time frame, the advertisement must be removed as
soon as safely and legally practicable. An individual or entity that
does not comply with this subsection is subject to the civil penalties and
disciplinary action prescribed in this section.
F. An advertising platform may host advertising only
if all of the following apply:
1. The advertising is authorized by a marijuana
establishment
, marijuana producer
or nonprofit medical
marijuana dispensary.
2. The advertising accurately and legibly identifies
the marijuana establishment
, marijuana producer
or
nonprofit medical marijuana dispensary responsible for the content of the
advertising by name and license number or registration number.
3. The advertising contains a printed warning that
complies with subsection D of this section.
G. Any advertising under this chapter involving
direct, individualized communication or dialogue shall use a method of age
affirmation to verify that the recipient is at least twenty-one years of
age before engaging in that communication or dialogue.� For the purposes of
this subsection, that method of age affirmation may include user confirmation,
birth date disclosure or other similar registration methods.
H. It is unlawful for an individual or entity other
than a marijuana establishment or dual licensee to do any of the following in a
manner that is not authorized by this chapter or rules adopted by the
department pursuant to this chapter:
1. Facilitate the delivery of marijuana or marijuana
products.
2. Solicit or accept orders for marijuana or
marijuana products or operate a platform that solicits or accepts orders for
marijuana or marijuana products.
3. Operate a listing service related to the sale or
delivery of marijuana or marijuana products.
I. A marijuana establishment, a nonprofit medical
marijuana dispensary or an individual or entity that sells marijuana
paraphernalia and that violates this section, on notification by the department
or attorney general's office, has fourteen days to comply with the requirements
of this section.
J. A marijuana establishment
or
marijuana producer
that is found to be in violation of this section by
the attorney general is subject to disciplinary action by the department
pursuant to section 36-2854, subsection B.� A nonprofit medical marijuana
dispensary that is found to be in violation of this section by the attorney
general is subject to disciplinary action by the department pursuant to section
36-2816.
K. In addition to any other penalty imposed by law,
an individual or entity other than a marijuana establishment
,
marijuana producer
or nonprofit medical marijuana dispensary that
advertises marijuana or marijuana products, including marijuana paraphernalia,
in violation of this section or otherwise violates this section shall pay a
civil penalty of $20,000 per violation to the smart and safe Arizona fund
established by section 36-2856.
L. This section shall be enforced by the attorney
general.
M. For the purposes of this section, advertising
does not include a communication of a marijuana establishment or nonprofit
medical marijuana dispensary that is targeted only to the established customer
base or that is requested by a customer or potential customer pursuant to an
opt-in with an age affirmation.
END_STATUTE
Sec.
6.
6. Subject
to the requirements of article IV, part 1, section 1, Constitution of
Arizona, section 36-2860, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2860.
Packaging; restrictions on particular marijuana products
A. A marijuana establishment
or
marijuana producer
may not:
1. Package or label marijuana or marijuana products
in a false or misleading manner.
2. Manufacture or sell marijuana products that
resemble the form of a human, animal, insect, fruit, toy or cartoon.
3. Sell or advertise marijuana or marijuana products
with names that resemble or imitate food or drink brands marketed to children
,
or otherwise advertise marijuana or marijuana products
to children.
B. A marijuana establishment
or
marijuana producer
that violates this section is subject to disciplinary
action by the department pursuant to section 36-2854, subsection B.
END_STATUTE
Sec.
7.
7. Subject
to the requirements of article IV, part 1, section 1, Constitution of
Arizona, section 36-2861, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2861.
Contracts; professional services
A. It is the public
policy of this state that contracts related to marijuana establishments
, marijuana producers
and marijuana testing facilities are
enforceable.
B. A person that is
licensed, certified or registered by any department, agency or regulatory board
of this state is not subject to disciplinary action by that entity for
providing professional assistance to a prospective or
registered
licensed
marijuana establishment,
marijuana
producer,
marijuana testing facility or other person for any lawful
activity under this chapter.
END_STATUTE
Sec.
8.
8. Subject
to the requirements of article IV, part 1, section 1, Constitution of
Arizona, section 36-2864, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2864.
Transaction privilege tax; use tax; additional taxes prohibited;
exception
A. For
the
purposes of the
transaction privilege tax and use tax levied and collected pursuant to title
42, chapters 5 and 6, marijuana and marijuana products are tangible personal
property
as
defined in section 42-5001 and are
subject to the transaction privilege tax in the retail classification and use
tax.
B. Except as provided in subsection A of this
section and section 42-5452, this state and localities may not levy or
collect additional taxes of any kind on the sale of marijuana or marijuana
products and may not levy or collect any fees or assessments of any kind on the
sale of marijuana or marijuana products or on the licensing, operations or
activities of marijuana establishments
, marijuana producers
or marijuana testing facilities, unless the fee or assessment is of general
applicability to individuals or businesses that are not engaged in the sale of
marijuana or marijuana products.
C. The prohibition imposed by subsection B of this
section does not apply to uniform increases to the transaction privilege tax
rate for the retail classification or use tax rate by this state or a locality
or to uniform increases to fees or assessments allowed by subsection B of this
section.
END_STATUTE
Sec.
9.
9. Subject
to the requirements of article IV, part 1, section 1, Constitution of
Arizona, section 36-2865, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2865.
Enforcement of chapter; special action
A. If the department fails to adopt rules necessary
to implement this chapter on or before June 1, 2021, or fails to begin
accepting applications as provided in section 36-2854, subsection A,
paragraph 1, subdivision (d), any citizen may commence a special action in
superior court to compel the department to perform the actions mandated under
this chapter.
B. If the department fails to issue a license or
send a notice of denial within sixty days after receiving a complete marijuana
establishment application pursuant to section 36-2854, subsection A,
paragraph 1, subdivision (d), the applicant may commence a special action
in
superior court to compel the
department to perform the actions mandated under this chapter.
C. Notwithstanding chapter 28.1 of this title, if
the department fails to issue any marijuana establishment licenses pursuant to
section 36-2854, subsection A, paragraph 1, subdivision (d) on or before
April 5, 2021, each nonprofit medical marijuana dispensary in good standing may
begin to cultivate, produce, process, manufacture, transport and test marijuana
and marijuana products and may sell marijuana and marijuana products to
consumers until the department issues licenses to operate marijuana establishments. If
this occurs, nonprofit medical marijuana dispensaries in good standing shall:
1. Be treated as marijuana establishments for all
purposes under this chapter, and their nonprofit medical marijuana
establishment agents shall be treated as marijuana facility agents for all
purposes under this chapter.
2. Comply with the rules adopted by the department
to implement chapter 28.1 of this title, except those that are inconsistent
with this chapter.
D. If the department fails to begin
accepting applications as provided in section 36-2854, subsection A,
paragraph 1, subdivision (
g
), any citizen may commence a
special action in superior court to compel the department to perform the
required actions.
END_STATUTE
Sec.
10.
10.
Requirements for enactment; three-fourths vote
Pursuant to article IV, part 1,
section 1, Constitution of Arizona, sections 36-2850, 36-2854, 36-2857,
36-2858, 36-2859, 36-2860, 36-2861, 36-2864 and
36-2865, Arizona Revised Statutes, as amended by this act, are effective
only on the affirmative vote of at least three-fourths of the members of each
house of the legislature.