REFERENCE TITLE: marijuana; regulation; taxation

 

 

 

State of Arizona

House of Representatives

Fifty-first Legislature

Second Regular Session

2014

 

 

HB 2558

 

Introduced by

Representatives Gallego, Cardenas, Larkin, Steele, Senator Gallardo: Representatives Campbell, Gabaldón, Gonzales, Mendez, Quezada, Saldate, Sherwood, Senator Hobbs

 

 

AN ACT

 

Amending title 36, Arizona Revised Statutes, by adding chapter 28.2; relating to the regulation of marijuana.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 


Be it enacted by the Legislature of the State of Arizona:

Section 1.  Title 36, Arizona Revised Statutes, is amended by adding chapter 28.2, to read:

CHAPTER 28.2

REGULATION AND TAXATION OF MARIJUANA

ARTICLE 1.  GENERAL PROVISIONS

START_STATUTE36-2821.  Definitions

In this chapter, unless the context otherwise requires:

1.  "Consumer" means a person who is at least twenty‑one years of age and who purchases marijuana or marijuana products for personal use or use by persons who are at least twenty‑one years of age, but not for resale to others.

2.  "Department" means the department of health services.

3.  "Industrial hemp" means the plant of the genus cannabis and any part of that plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration that does not exceed three‑tenths per cent on a dry weight basis.

4.  "Local regulatory authority" means the office or entity that is designated by a city, town or county to process marijuana establishment applications.

5.  "Locality" means a city, town or county.

6.  "Marijuana":

(a)  Means all parts of the plant of the genus cannabis, the seeds of the plant, the resin extracted from any part of the plant and every compound, manufacture, salt, derivative, mixture or preparation of the plant, its seeds or its resin, including marijuana concentrate.

(b)  Does not include industrial hemp or fiber produced from the stalks, oil or cake made from the seeds of the plant, a sterilized seed of the plant that is incapable of germination or the weight of any other ingredient combined with marijuana to prepare topical or oral administrations, food, drink or another product.

7.  "Marijuana accessories" means any equipment, products or materials of any kind that are used, intended for use or designed for use in planting, propagating, cultivating, growing, harvesting, composting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, vaporizing or containing marijuana, or for ingesting, inhaling or otherwise introducing marijuana into the human body.

8.  "Marijuana cultivation facility" means an entity that is registered to cultivate, prepare and package marijuana and sell marijuana to retail marijuana stores, to marijuana product manufacturing facilities and to other marijuana cultivation facilities, but not to consumers.

9.  "Marijuana establishment" means a marijuana cultivation facility, a marijuana testing facility, a marijuana product manufacturing facility or a retail marijuana store.

10.  "Marijuana product manufacturing facility" means an entity that is registered to purchase marijuana, manufacture, prepare and package marijuana products and sell marijuana and marijuana products to other marijuana product manufacturing facilities and to retail marijuana stores, but not to consumers.

11.  "Marijuana products" means concentrated marijuana products and marijuana products that are composed of marijuana and other ingredients and that are intended for use or consumption, including edible products, ointments and tinctures.

12.  "Marijuana testing facility" means an entity that is registered to analyze and certify the safety and potency of marijuana.

13.  "Public place" means any place to which the general public has access.

14.  "Retail marijuana store" means an entity that is registered to purchase marijuana from marijuana cultivation facilities and marijuana and marijuana products from marijuana product manufacturing facilities and to sell marijuana and marijuana products to consumers.

15.  "Unreasonably impracticable" means that the measures necessary to comply with the rules adopted by the department require such a high investment of risk, money, time or any other resource or asset that the operation of a marijuana establishment is not worthy of being carried out in practice by a reasonably prudent businessperson. END_STATUTE

START_STATUTE36-2822.  Marijuana; personal use; forfeiture prohibited

A.  Notwithstanding any other law, except as otherwise provided in this chapter, a person who is at least twenty‑one years of age may:

1.  Possess, consume, use, display, purchase or transport marijuana accessories or one ounce or less of marijuana.

2.  Possess, grow, process or transport not more than five marijuana plants and the marijuana produced by the plants on the premises where the plants were grown.

3.  Transfer one ounce or less of marijuana and up to five immature marijuana plants to a person who is at least twenty‑one years of age without remuneration.

4.  Assist another person who is at least twenty‑one years of age in any of the acts described in this subsection.

B.  Marijuana and marijuana accessories that are in the possession of a person who is at least twenty‑one years of age pursuant to subsection A of this section are not subject to seizure or forfeiture in this state or any political subdivision of this state. END_STATUTE

START_STATUTE36-2823.  Personal cultivation; requirements; civil penalty

A.  It is unlawful for a person who is at least twenty‑one years of age to cultivate a marijuana plant unless:

1.  The marijuana plant is cultivated in a location where the plant is not subject to public view without the use of binoculars, aircraft or other optical aids.

2.  The person takes reasonable precautions to ensure that the plant is secure from unauthorized access and access by a person who is under twenty‑one years of age.

3.  The marijuana cultivation occurs only on property that is lawfully in possession of the cultivator or with the consent of the person who is in lawful possession of the property.

B.  A person who violates this section is subject to a civil penalty of up to seven hundred fifty dollars. END_STATUTE

START_STATUTE36-2824.  Public smoking prohibited; civil penalty

It is unlawful for a person to smoke marijuana in a public place.  A person who violates this section is subject to a civil penalty of up to five hundred dollars. END_STATUTE

START_STATUTE36-2825.  False identification; violation; classification

A.  A person who is under twenty‑one years of age may not present or offer to a marijuana establishment or the marijuana establishment's agent or employee any written instrument or oral evidence of age that is false, fraudulent or not actually the person's own for the purpose of either:

1.  Purchasing, attempting to purchase or otherwise procuring or attempting to procure marijuana.

2.  Gaining access to a marijuana establishment.

B.  A person who violates this section is guilty of a class 1 misdemeanor. END_STATUTE

START_STATUTE36-2826.  Marijuana accessories

Notwithstanding any other law, in this state and any political subdivision of this state, a person who is at least twenty‑one years of age may manufacture, possess and purchase marijuana accessories and distribute and sell marijuana accessories to a person who is at least twenty‑one years of age. END_STATUTE

START_STATUTE36-2827.  Marijuana establishment; authorization; limitation; forfeiture prohibited

A.  Notwithstanding any other law, a person who is at least twenty‑one years of age and who is acting in the person's capacity as an owner, employee or agent of a retail marijuana store with a current and valid registration or a retail marijuana store with a current and valid registration may do all of the following in this state and any political subdivision of this state:

1.  Possess, display, store and transport marijuana and marijuana products, if the marijuana and marijuana products are not displayed in a manner that is visible to the general public from a public right‑of‑way.

2.  Purchase marijuana from a marijuana cultivation facility.

3.  Purchase marijuana and marijuana products from a marijuana product manufacturing facility.

4.  Deliver, distribute and sell marijuana and marijuana products to consumers.

5.  Lease or otherwise allow the use of property owned, occupied or controlled by any person, corporation or other entity for any of the activities conducted lawfully pursuant to this subsection.

B.  Notwithstanding any other law, a person who is at least twenty‑one years of age and who is acting in the person's capacity as an owner, employee or agent of a marijuana cultivation facility with a current and valid registration or a marijuana cultivation facility with a current and valid registration may do all of the following in this state and any political subdivision of this state:

1.  Cultivate, harvest, process, package, transport, display, store and possess marijuana.

2.  Deliver and transfer marijuana to a marijuana testing facility.

3.  Deliver, distribute and sell marijuana to a marijuana cultivation facility, a marijuana product manufacturing facility and a retail marijuana store.

4.  Receive and purchase marijuana from a marijuana cultivation facility.

5.  Receive marijuana seeds and immature marijuana plants from a person who is at least twenty‑one years of age.

6.  Lease or otherwise allow the use of property owned, occupied or controlled by any person, corporation or other entity for any of the activities conducted lawfully pursuant to this subsection.

C.  Notwithstanding any other law, a person who is at least twenty‑one years of age and who is acting in the person's capacity as an owner, employee or agent of a marijuana product manufacturing facility with a current and valid registration or a marijuana product manufacturing facility with a current and valid registration may do all of the following in this state and any political subdivision of this state:

1.  Package, process, transport, manufacture, display and possess marijuana and marijuana products.

2.  Deliver and transfer marijuana and marijuana products to a marijuana testing facility.

3.  Deliver and sell marijuana and marijuana products to a retail marijuana store and a marijuana product manufacturing facility.

4.  Purchase marijuana from a marijuana cultivation facility.

5.  Purchase marijuana and marijuana products from a marijuana product manufacturing facility.

6.  Lease or otherwise allow the use of property owned, occupied or controlled by any person, corporation or other entity for any of the activities conducted lawfully pursuant to this subsection.

D.  Notwithstanding any other law, a person who is at least twenty‑one years of age and who is acting in the person's capacity as an owner, employee or agent of a marijuana testing facility with a current and valid registration or a marijuana testing facility with a current and valid registration may do all of the following in this state and any political subdivision of this state:

1.  Possess, cultivate, process, repackage, store, transport or display marijuana.

2.  Receive marijuana from a marijuana cultivation facility, a marijuana retail store, a marijuana products manufacturer or a person who is at least twenty‑one years of age.

3.  Return marijuana to a marijuana cultivation facility, a marijuana retail store, a marijuana product manufacturing facility or a person who is at least twenty‑one years of age.

4.  Lease or otherwise allow the use of property owned, occupied or controlled by any person, corporation or other entity for any of the activities conducted lawfully pursuant to this subsection.

E.  A marijuana cultivation facility may not produce marijuana concentrates, tinctures, extracts or other marijuana products.

F.  Any items that are lawfully in the possession of a person who is at least twenty‑one years of age and who is acting in the person's capacity as an owner, employee or agent of a marijuana establishment pursuant to this section or of a marijuana establishment pursuant to this section are not subject to seizure or forfeiture in this state or any political subdivision of this state.

G.  This section does not prevent the imposition of penalties for violating this chapter or rules adopted by the department or a locality pursuant to this chapter. END_STATUTE

START_STATUTE36-2828.  Marijuana establishment; registration; application

A.  Each application or renewal application for an annual registration to operate a marijuana establishment must be submitted to the department. A renewal application may be submitted up to ninety days before the expiration of the marijuana establishment's registration.

B.  The department shall begin accepting and processing applications to operate marijuana establishments one year after the effective date of this section.

C.  On receiving an application or renewal application for a marijuana establishment, the department shall immediately forward a copy of each application and half of the registration application fee to the local regulatory authority for the locality in which the applicant desires to operate the marijuana establishment, unless the locality has not designated a local regulatory authority.

D.  At least forty‑five but not more than ninety days after receiving an application or renewal application for a marijuana establishment, the department shall issue an annual registration to the applicant, unless the department finds that the applicant is not in compliance with rules enacted by the department.

E.  If an application is denied, the department shall notify the applicant in writing of the specific reason for the denial.

F.  Every applicant for a marijuana establishment registration shall specify the location where the marijuana establishment will operate.  A separate registration is required for each location at which a marijuana establishment operates.

G.  Marijuana establishments and the books and records maintained and created by marijuana establishments are subject to inspection by the department. END_STATUTE

START_STATUTE36-2829.  Underage possession; forfeiture; drug awareness program; civil penalty

Notwithstanding section 13‑3405, a person who is under twenty‑one years of age and who is found to possess one ounce or less of marijuana shall forfeit the marijuana and complete up to four hours of instruction in a drug awareness program.  If the person does not complete the drug awareness program within one year, the person is subject to a civil penalty of up to three hundred dollars. END_STATUTE

START_STATUTE36-2830.  Applicability of chapter

This chapter does not:

1.  Require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace or affect the ability of employers to have policies restricting the use of marijuana by employees or to discipline employees who are under the influence of marijuana in the workplace.

2.  Allow driving under the influence of marijuana or driving while impaired by marijuana or supersede laws related to driving under the influence of marijuana or driving while impaired by marijuana.

3.  Permit the transfer of marijuana, with or without remuneration, to a person who is under twenty‑one years of age or allow a person who is under twenty‑one years of age to purchase, possess, use, transport, grow or consume marijuana.

4.  Prohibit a person, employer, school, hospital, detention facility or corporation or any other entity that occupies, owns or controls a property from prohibiting or otherwise regulating the possession, consumption, use, display, transfer, distribution, sale, transportation or growing of marijuana on or in that property.

5.  Limit any privileges or rights of a medical marijuana patient, primary caregiver or medical marijuana dispensary under chapter 28.1 of this title. END_STATUTE

START_STATUTE36-2831.  Research

Scientific and medical researchers who have previously published may purchase, possess and securely store marijuana for purposes of conducting research. Scientific and medical researchers may administer and distribute marijuana to a research participant who is at least twenty‑one years of age after receiving informed consent from the research participant. END_STATUTE

START_STATUTE36-2832.  Marijuana regulation fund; transfer

The marijuana regulation fund is established consisting of fees and taxes collected and civil penalties imposed under this chapter. The department shall administer the fund and shall use the monies in the fund for implementation and enforcement of this chapter. Monies in the fund are continuously appropriated.  Monies in the fund shall not be transferred to any other fund except as provided in section 36‑2833. END_STATUTE

START_STATUTE36-2833.  Excise tax; deposit; distribution

A.  An excise tax is levied on the sale or transfer of marijuana from a marijuana cultivation facility to a retail marijuana store or marijuana product manufacturing facility.  Each marijuana cultivation facility shall pay an excise tax at the rate of fifty dollars per ounce, or proportionate part thereof, on marijuana that is sold or transferred from a marijuana cultivation facility to a retail marijuana store or marijuana product manufacturing facility.

B.  The department may adjust the rate annually to account for inflation or deflation based on the consumer price index published by the United States department of labor, bureau of labor statistics.

C.  On the fifteenth day of each month, each marijuana cultivation facility shall pay to the department the excise taxes due on the marijuana that the marijuana cultivation facility transferred or sold in the prior calendar month.  The department shall deposit monies collected pursuant to this subsection in the marijuana regulation fund.

D.  Revenues generated by the tax imposed pursuant to this section in excess of the amount needed to implement and enforce this chapter in any fiscal year must be distributed every three months as follows:

1.  Thirty per cent to the department of education.

2.  Ten per cent to the department of health services for use in voluntary programs for the treatment of alcohol, tobacco and marijuana abuse.

3.  Ten per cent to the department of health services for a scientifically and medically accurate public education campaign educating youth and adults about the health and safety risks of alcohol, tobacco and marijuana.

4.  Fifty per cent to the state general fund. END_STATUTE

START_STATUTE36-2834.  Rulemaking; prohibition

A.  Not later than one hundred eighty days after the effective date of this section, the department shall adopt rules necessary for implementation of this chapter.  The rules may not prohibit the operation of marijuana establishments, either expressly or through rules that make the operation of a marijuana establishment unreasonably impracticable.  The rules must include:

1.  Procedures for the issuance, renewal, suspension and revocation of a registration to operate a marijuana establishment consistent with the requirements of title 41, chapter 6.

2.  A schedule of application, registration and renewal fees. Application fees may not exceed five thousand dollars, adjusted annually for inflation, unless the department determines a greater fee is necessary to carry out the department's responsibilities under this chapter.

3.  Qualifications for registration that are directly and demonstrably related to the operation of a marijuana establishment.

4.  Security requirements for marijuana establishments, including for the transportation of marijuana by marijuana establishments.

5.  Requirements to prevent the sale or diversion of marijuana and marijuana products to persons who are under twenty‑one years of age.

6.  Labeling requirements for marijuana and marijuana products that are sold or distributed by a marijuana establishment.

7.  Health and safety regulations and standards for the manufacture of marijuana products and both the indoor and outdoor cultivation of marijuana by marijuana establishments.

8.  Restrictions on the advertising and display of marijuana and marijuana products.

9.  Civil penalties for the failure to comply with rules adopted pursuant to this chapter.

10.  Procedures for collecting taxes levied on marijuana cultivation facilities.

B.  In order to ensure that individual privacy is protected, the department may not require a consumer to provide a retail marijuana store with personal information other than government‑issued identification to determine the consumer's age, and a retail marijuana store is not required to acquire and record personal information about consumers. END_STATUTE

Sec. 2.  Conforming legislation

The legislative council staff shall prepare proposed legislation conforming the Arizona Revised Statutes to the provisions of this act for consideration in the fifty‑second legislature, first regular session.

Sec. 3.  Requirements for enactment; two-thirds vote

Pursuant to article IX, section 22, Constitution of Arizona, this act is effective only on the affirmative vote of at least two-thirds of the members of each house of the legislature and is effective immediately on the signature of the governor or, if the governor vetoes this act, on the subsequent affirmative vote of at least three-fourths of the members of each house of the legislature.