Bill Amendment: AZ SB1121 | 2021 | Fifty-fifth Legislature 1st Regular
Bill Title: Marijuana; security
Status: 2021-05-28 - Governor Vetoed [SB1121 Detail]
Download: Arizona-2021-SB1121-SENATE_-_Appropriations_-_Strike_Everything.html
Fifty-fifth Legislature Appropriations
First Regular Session S.B. 1121
COMMITTEE ON APPROPRIATIONS
SENATE AMENDMENTS TO S.B. 1121
(Reference to printed bill)
Strike everything after the enacting clause and insert:
"Section 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:
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, " "excluded felony
offense," "independent third-party laboratory,"
"nonprofit medical marijuana dispensary," "nonprofit medical
marijuana dispensary agent," and "qualifying patient" have has the same meanings
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.
12. 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.
13. 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.
14. 17. "Locality" means a city, town or county.
15. 18. "Manufacture" and "manufacturing" mean to compound, blend, extract, infuse or otherwise make or prepare a marijuana product.
16. 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.
17. 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.
18. 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.
19. 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.
20. 23. "Marijuana products" means marijuana concentrate and products that are composed of marijuana and other ingredients and that are intended for use or consumption, including edible products, ointments and tinctures.
21. 24. "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. "Nonprofit medical marijuana dispensary" has the same meaning prescribed in section 36-2801.
26. "Nonprofit medical marijuana dispensary agent" has the same meaning prescribed in section 36-2801.
22. 27. "Open space" means a public park, public sidewalk, public walkway or public pedestrian thoroughfare.
23. 28. "Process" and "processing" mean to harvest, dry, cure, trim or separate parts of the marijuana plant.
24. 29. "Public place" has the same meaning prescribed in the smoke-free Arizona act, section 36-601.01.
30. "Qualifying patient" has the same meaning prescribed in section 36-2801.
31. "Required information" means the secured data identifier that contains a time, date and location stamp denoting the time, date and location at which the data was collected, an operator's identification denoting the name and the marijuana facility agent number of the operator who uploaded and inputted the data from the monitoring device into the central database or in person, and a programming note stamp report describing any correction or change to the data uploaded from the monitoring device or approved persons.
32. "Safety orange" means a bright orange color comprising a dominant wavelength of more than five hundred ninety-five and less than six hundred five nanometers, a luminance factor of at least forty percent and an excitation purity of at least eight-five percent.
33. "Secured data identifier" means a transactional stamp or report that contains required information to ensure accuracy, provide a chain of custody of the information and foreclose tampering of the data, the monitoring devices, human error and intentional misreporting.
25. 34. "Smoke" means to inhale, exhale, burn, carry or possess any lighted marijuana or lighted marijuana products, whether natural or synthetic.
Sec. 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:
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 and marijuana testing facilities. Those rules shall include requirements for:
1. Licensing marijuana establishments and marijuana testing facilities, including conducting investigations and background checks to determine eligibility for licensing for marijuana establishment and marijuana testing facility applicants, except that:
(a) An application for a marijuana establishment 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 prior
to 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 no 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 but not later than December 31, 2021, the department shall issue twenty-six additional marijuana establishment licenses to entities that are qualified pursuant to the social equity ownership program.
(g) Licenses issued by the department to marijuana establishments and marijuana testing facilities shall be valid for a period of two years.
2. Licensing fees and renewal fees for marijuana establishments 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 and marijuana testing facilities, including requiring a security system that includes all of the following:
(a) Video cameras that cover all rooms indoors and the entire property outdoors.
(b) Digital video recorders that can store at least sixty days of security video history.
(c) A radio frequency identification name tag for each employee with tracking capability to monitor the location of the employee when on-site and to alert management or a control room of the licensee when the employee is in an unauthorized location in the facility. A licensee must maintain a list of authorized access locations by employee and the employee's compliance to approved locations to prevent diversion.
4. Marijuana establishments to safely cultivate, process and manufacture marijuana and marijuana products. The department shall procure, develop, acquire and maintain a system for use by licensees to track marijuana and marijuana products at all points of cultivation, manufacturing and sale in a manner in which the data and the secured data identifier are stored in the central database and are subject to security protocols to ensure chain of custody of the information and to foreclose tampering with either the monitoring device data or the paired secure transactional stamp. 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.
(ii) The processing of marijuana and marijuana products by a marijuana establishment.
(iii) The sale of marijuana and marijuana products by a marijuana establishment to a consumer.
(iv) The sale and purchase of marijuana and marijuana products between licensees.
(v) The transfer of marijuana and marijuana products between premises for which licenses have been issued.
(vi) The disposal of marijuana waste.
(vii) Any other information that the department determines is reasonably necessary to accomplish the duties, functions and powers of the department.
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 upon consideration of industry standards, except that the rules:
(a) Shall limit the strength of edible marijuana products to no 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. At all times marijuana product manufacturing or testing shall occur pursuant to written operating procedures. Combustible solvents are prohibited in the manufacture of marijuana products.
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 consistent with section 36-2854.02.
10. The diversion of marijuana and marijuana products from licensees to persons who are not authorized to possess marijuana.
11. The importation and exportation of marijuana and marijuana products from this state.
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 immediate 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 $1,000 for each violation. Each day a violation occurs constitutes a separate violation. The maximum amount of any assessment is $25,000 for any thirty-day period. 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 permitting 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 no not later than January 1, 2025 the department shall, adopt rules to permit 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.
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.
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 permit 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, either expressly or through requirements that make the operation of a marijuana establishment 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 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 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.
Sec. 3. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, title 36, chapter 28.2, Arizona Revised Statutes, is amended by adding sections 36-2854.01 and 36-2854.02, to read:
36-2854.01. Marijuana products; labeling; packaging; department approval; marijuana waste
A. Any marijuana product packaging labeled for sale shall include a safety warning by placing a safety orange color band that encompasses circumference of the marijuana product at an opening point of the marijuana product. The color band shall be at least one-half inch in width and include bold black text of at least twelve-point font reading "for adult use only" and "contains THC" and a consumer scannable tetrahydrocannabinol quick response code linking to a web page that displays all of the following for the specific marijuana product:
1. The date of harvest of the marijuana.
2. The tetrahydrocannabinol strain of the marijuana.
3. The tetrahydrocannabinol extraction method used to extract the tetrahydrocannabinol from the marijuana.
4. A laboratory report of impurities containing at least heavy metals and agrochemicals.
5. The date of manufacture of the marijuana product.
6. The distribution chain, including at least a point of intended sale.
7. A warning that states, "Using marijuana during pregnancy could cause birth defects or other health issues to your unborn child."
B. A LICENSEE SHALL SUBMIT A LABEL OR PACKAGE INTENDED FOR USE ON A marijuana PRODUCT TO THE DEPARTMENT FOR APPROVAL before THE LICENSEE may sell or transfer any marijuana product USING THE LABEL OR PACKAGE. Before APPROVING A LABEL OR PACKAGE, THE DEPARTMENT SHALL DETERMINE THAT THE LABEL or package IS NOT ATTRACTIVE TO MINORS AND DOES NOT CONTAIN ANY INACCURATE OR MISLEADING INFORMATION.
C. Marijuana waste shall be disposed of in the same manner as biohazardous medical waste. Marijuana and marijuana products packaged for disposal shall be placed in a safety orange container that has a tamper-resistant seal and reads "marijuana waste product" and "potentially dangerous".
36-2854.02. Social equity ownership program; qualified applicants; requirements; definition
A. Any license issued pursuant to section 36-2854, subsection A, paragraph 1, subdivision (f) shall be issued by lottery to qualified applicants. Each qualified applicant who is an individual with more than a ten percent ownership interest shall successfully complete a program on business development and regulatory compliance provided by the department.
B. Of the twenty-six licenses issued pursuant to section 36-2854 subsection A, paragraph 1, subdivision (f):
1. Seven licenses shall be issued to qualified applicants as defined in subsection E, paragraph 3 of this section.
2. Nineteen licenses shall be issued to qualified applicants as defined in subsection E, paragraphs 1 and 2 of this section.
C. A license issued pursuant to section 36-2854, subsection A, paragraph 1, subdivision (f) may be transferred only to another qualified applicant for the first five years of the license. After five years, a license that is initially issued pursuant to section 36-2854, subsection A, paragraph 1, subdivision (f) may be transferred to any other person who qualifies for a marijuana establishment license pursuant to this chapter.
D. The department:
1. May not charge an applicant an application fee of more than $2,500.
2. Shall require each applicant to demonstrate that the applicant has at least $500,000 in liquid capital, as defined in section 6-851, in the name of the applicant or a principal officer or board member of the applicant. This requirement may be satisfied by a statement from a federally insured deposit institution verifying the liquid capital, by a letter of credit in the amount of $500,000 issued by a federally insured depository institution or by a statement from the qualified applicant.
E. For the purposes of this section, "qualified applicant" means any of the following
1. An individual from a community that was disproportionally impacted by the enforcement of previous marijuana laws.
2. A company that is at least twenty-five percent owned, directly or indirectly, by an individual from a community that was disproportionally impacted by the enforcement of previous marijuana laws.
3. A company that is at least forty percent owned, directly or indirectly, by a nonprofit corporation that is incorporated in this state and that meets both of the following:
(a) Has been incorporated for at least five years.
(b) Provides four or more of the following programs to communities that were disproportionally impacted by the enforcement of previous marijuana laws:
(i) Job training and workforce development programs.
(ii) Business development and technical assistance programs.
(iii) Mental health and trauma treatment programs.
(iv) Residential substance abuse prevention treatment programs.
(v) Reentry and recidivism prevention programs.
(vi) Domestic violence shelters and prevention programs.
(vii) Transitional and supportive housing programs.
(viii) Social justice, judicial reform and expungement assistance programs.
Sec. 4. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2855, Arizona Revised Statutes, is amended to read:
36-2855. Marijuana facility agents; registration; renewal; fingerprinting; card; employment notification; training; rules
A. A marijuana facility agent shall be registered with the department before working at a marijuana establishment or marijuana testing facility.
B. A person who wishes to be registered as a marijuana facility agent or renew the person's registration as a marijuana facility agent shall:
1. Submit a completed application on a form prescribed by the department and pay a nonrefundable fee that is reasonable and related to the actual cost of processing applications submitted pursuant to this section.
2. Submit evidence that the applicant holds a current level I fingerprint clearance card issued pursuant to section 41-1758.07, or submit a full set of the applicant's fingerprints for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation without disclosing that the records check is related to this chapter and acts allowed by this chapter. The department of public safety shall destroy each set of fingerprints after the criminal records check is completed.
C. If the department determines that an applicant meets the criteria for registration under this chapter and rules adopted pursuant to this chapter, the department shall issue the applicant a marijuana facility agent card that is valid for two years.
D. A registered marijuana facility agent may be employed by or associated with any marijuana establishment or marijuana testing facility. A marijuana establishment or marijuana testing facility shall promptly notify the department when it employs or becomes associated with a new marijuana facility agent. A marijuana facility agent shall promptly notify the department when the marijuana facility agent is employed by or becomes associated with a marijuana establishment or marijuana testing facility and when the marijuana facility agent is no longer employed by or associated with a marijuana establishment or marijuana testing facility.
E. A nonprofit medical marijuana dispensary agent of a dual licensee who has applied to be registered as a marijuana facility agent may serve as a marijuana facility agent of that dual licensee until the department has approved or rejected the agent's application.
F. the department shall provide, at no cost to the licensees operating under the social equity ownership program, a marijuana facility agent training program on regulatory compliance.
F. G. The department shall adopt rules to implement this section.
Sec. 5. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2857, Arizona Revised Statutes, is amended to read:
36-2857. Localities; marijuana establishments and marijuana testing facilities
A. A locality may:
1. Enact reasonable zoning regulations that limit the use of land for marijuana establishments and marijuana testing facilities to specified areas.
2. Limit
the number of marijuana establishments or marijuana testing facilities, or 
both.
3. Prohibit marijuana establishments or marijuana testing facilities, or both.
4. Regulate the time, place and manner of marijuana establishment and marijuana testing facility operations.
5. Establish reasonable restrictions on public signage regarding marijuana, marijuana establishments and marijuana testing facilities.
6. Prohibit
or restrict delivery within its jurisdiction.
B. Notwithstanding subsection A of this section, a locality shall allow at least one marijuana establishment whose license is issued pursuant to section 36-2854, subsection a, paragraph 1, subdivision (f) to operate within its jurisdiction, subject to the same ordinances and rules that apply to nonprofit medical marijuana dispensaries.
B. C. A county may exercise
its authority pursuant to subsection A of this section only in unincorporated
areas of the county.
C. D. 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 or marijuana testing facility unduly burdensome if the locality has not prohibited marijuana establishments 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 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.
Sec. 6. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2858, Arizona Revised Statutes, is amended to read:
36-2858. Lawful operation of marijuana establishments 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.
(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 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. 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. 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 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 or marijuana testing facility for failing to comply with this chapter or rules adopted pursuant to this chapter.
C. A marijuana establishment 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. May Is not be 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 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 or dual licensees may designate a single off-site location as prescribed in section 36-2850, paragraph 18 21, subdivision (c) to be jointly used by those dual licensees or marijuana establishments.
I. Marijuana establishments, 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 anti-discrimination antidiscrimination law.
Sec. 7. Requirements for enactment; three-fourths vote
Pursuant to article IV, part 1, section 1, Constitution of Arizona, this act is effective only on the affirmative vote of at least three-fourths of the members of each house of the legislature."
Amend title to conform
