Bill Text: AZ HB2050 | 2022 | Fifty-fifth Legislature 2nd Regular | Engrossed
Bill Title: Licensing; marijuana establishments
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2022-06-23 - House final reading FAILED, voting: (34-24-2-0) [HB2050 Detail]
Download: Arizona-2022-HB2050-Engrossed.html
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Senate Engrossed House Bill
telecommunications fund; report; posting (now: licensing; marijuana establishments) |
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State of Arizona House of Representatives Fifty-fifth Legislature Second Regular Session 2022
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HOUSE BILL 2050 |
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An Act
amending sections 36-2801, 36-2801.01, 36-2803, 36-2803.01, 36-2804.02, 36-2804.05, 36-2817, 36-2822, 36-2854, 36-2854.01 and 36-2856, Arizona Revised Statutes; amending title 36, chapter 28.2, Arizona Revised Statutes, by adding sections 36-2866 and 36-2867; relating to marijuana.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2801, Arizona Revised Statutes, is amended to read:
36-2801. Definitions
In this chapter, unless the context otherwise requires:
1. "Allowable amount of marijuana":
(a) With respect to a qualifying patient, means:
(i) Two and one-half ounces of usable marijuana.
(ii) If the qualifying patient's registry identification card states that the qualifying patient is authorized to cultivate marijuana, twelve marijuana plants contained in an enclosed, locked facility, except that the plants are not required to be in an enclosed, locked facility if the plants are being transported because the qualifying patient is moving.
(b) With respect to a designated caregiver, for each patient assisted by the designated caregiver under this chapter, means:
(i) Two and one-half ounces of usable marijuana.
(ii) If the designated caregiver's registry identification card provides that the designated caregiver is authorized to cultivate marijuana, twelve marijuana plants contained in an enclosed, locked facility, except that the plants are not required to be in an enclosed, locked facility if the plants are being transported because the designated caregiver is moving.
(c) Does not include marijuana that is incidental to medical use, but is not usable marijuana.
2. "Batch" means all of the following:
(a) When referring to cultivated marijuana, a specific lot of strain-specific marijuana that is grown from one or more seeds or cuttings, that is cultivated using the same growing practices and that is harvested at the same location at the same time and cured under similar conditions.
(b) When referring to marijuana products, a specific amount of a marijuana product that is infused, manufactured, extracted or prepared for sale from the same set of ingredients and that may include a combination of multiple strains.
(c) When referring to the testing of cultivated marijuana by an independent third-party laboratory, an amount that is derived from a batch of cultivated marijuana that is prepared and delivered to the independent third-party laboratory at the same time for testing.
(d) When referring to the testing of marijuana products by an independent third-party laboratory, a set of marijuana products that is infused, manufactured, extracted or prepared for sale from the same set of ingredients and that is prepared and delivered to the independent third-party laboratory at the same time for testing.
2. 3. "Cardholder" means a qualifying patient, a designated caregiver, a nonprofit medical marijuana dispensary agent or a independent third-party laboratory agent who has been issued and possesses a valid registry identification card.
4. "Cultivation site" means the location where marijuana may be cultivated, infused or prepared for sale by and for a nonprofit medical marijuana dispensary.
3. 5. "Debilitating medical condition" means one or more of the following:
(a) Cancer, glaucoma, positive status for human immunodeficiency virus, acquired immune deficiency syndrome, hepatitis C, amyotrophic lateral sclerosis, Crohn's disease or agitation of Alzheimer's disease or the treatment of these conditions.
(b) A chronic or debilitating disease or medical condition or its treatment that produces one or more of the following:
(i) Cachexia or wasting syndrome.
(ii) Severe and chronic pain.
(iii) Severe nausea.
(iv) Seizures, including those characteristic of epilepsy.
(v) Severe and persistent muscle spasms, including those characteristic of multiple sclerosis.
(c) Any other medical condition or its treatment added by the department pursuant to section 36-2801.01.
4. 6. "Department" means the department of health services or its successor agency.
5. 7. "Designated caregiver" means a person who:
(a) Is at least twenty-one years of age.
(b) Has agreed to assist with a patient's medical use of marijuana.
(c) Has not been convicted of an excluded felony offense.
(d) Assists not more than five qualifying patients with the medical use of marijuana.
(e) May receive reimbursement for actual costs incurred in assisting a registered qualifying patient's medical use of marijuana if the registered designated caregiver is connected to the registered qualifying patient through the department's registration process. The designated caregiver may not be paid any fee or compensation for service as a caregiver. Payment for costs under this subdivision does not constitute an offense under title 13, chapter 34 or under title 36, chapter 27, article 4.
6. 8. "Enclosed, locked facility" means a closet, room, greenhouse or other enclosed area that is equipped with locks or other security devices that permit allow access only by a cardholder.
7. 9. "Excluded felony offense" means:
(a) A violent crime as defined in section 13-901.03, subsection B, that was classified as a felony in the jurisdiction where the person was convicted.
(b) A violation of a state or federal controlled substance law that was classified as a felony in the jurisdiction where the person was convicted but does not include:
(i) An offense for which the sentence, including any term of probation, incarceration or supervised release, was completed ten or more years earlier.
(ii) An offense involving conduct that would be immune from arrest, prosecution or penalty under section 36-2811, except that the conduct occurred before December 14, 2010 or was prosecuted by an authority other than the state of Arizona.
8. 10. "Independent third-party laboratory" means an entity that has a national or international accreditation and that is certified by the department to analyze marijuana cultivated for medical use.
9. 11. "Independent third-party laboratory agent" means an owner, employee or volunteer of a certified independent third-party laboratory who is at least twenty-one years of age and who has not been convicted of an excluded felony offense.
10. 12. "Marijuana" means all parts of any plant of the genus cannabis, whether growing or not, and the seeds of such a plant.
11. 13. "Medical use" means the acquisition, possession, cultivation, manufacture, use, administration, delivery, transfer or transportation of marijuana or paraphernalia relating to the administration of marijuana to treat or alleviate a registered qualifying patient's debilitating medical condition or symptoms associated with the patient's debilitating medical condition.
12. 14. "Nonprofit medical marijuana dispensary" means a not-for-profit entity that acquires, possesses, cultivates, manufactures, delivers, transfers, transports, supplies, sells or dispenses marijuana or related supplies and educational materials to cardholders. A nonprofit medical marijuana dispensary may receive payment for all expenses incurred in its operation.
13. 15. "Nonprofit medical marijuana dispensary agent" means a principal officer, board member, employee or volunteer of a nonprofit medical marijuana dispensary who is at least twenty-one years of age and has not been convicted of an excluded felony offense.
14. 16. "Physician" means a doctor of medicine who holds a valid and existing license to practice medicine pursuant to title 32, chapter 13 or its successor, a doctor of osteopathic medicine who holds a valid and existing license to practice osteopathic medicine pursuant to title 32, chapter 17 or its successor, a naturopathic physician who holds a valid and existing license to practice naturopathic medicine pursuant to title 32, chapter 14 or its successor or a homeopathic physician who holds a valid and existing license to practice homeopathic medicine pursuant to title 32, chapter 29 or its successor.
15. 17. "Qualifying patient" means a person who has been diagnosed by a physician as having a debilitating medical condition.
16. 18. "Registry identification card" means a document issued by the department that identifies a person as a registered qualifying patient, a registered designated caregiver, a registered nonprofit medical marijuana dispensary agent or a registered independent third-party laboratory agent.
19. "Strain" means marijuana that has the same phenotype, cultivar or physiological makeup.
17. 20. "Usable marijuana":
(a) Means the dried flowers of the marijuana plant, and any mixture or preparation thereof.
(b) Does not include:
(i) The seeds, stalks and roots of the plant.
(ii) The weight of any non-marijuana ingredients combined with marijuana and prepared for consumption as food or drink.
18. 21. "Verification system" means a secure, password-protected, web-based system that is established and maintained by the department and that is available to law enforcement personnel and nonprofit medical marijuana dispensary agents on a twenty-four-hour basis for verifying registry identification cards.
19. 22. "Visiting qualifying patient" means a person:
(a) Who is not a resident of Arizona or who has been a resident of Arizona less than thirty days.
(b) Who has been diagnosed with a debilitating medical condition by a person who is licensed with authority to prescribe drugs to humans in the state of the person's residence or, in the case of a person who has been a resident of Arizona less than thirty days, the state of the person's former residence.
20. 23. "Written certification" means a document dated and signed by a physician, stating that in the physician's professional opinion the patient is likely to receive therapeutic or palliative benefit from the medical use of marijuana to treat or alleviate the patient's debilitating medical condition or symptoms associated with the debilitating medical condition. The physician must:
(a) Specify the qualifying patient's debilitating medical condition in the written certification.
(b) Sign and date the written certification only in the course of a physician-patient relationship after the physician has completed a full assessment of the qualifying patient's medical history.
Sec. 2. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2801.01, Arizona Revised Statutes, is amended to read:
36-2801.01. Addition of debilitating medical conditions
The public may petition the department to add debilitating medical conditions or treatments to the list of debilitating medical conditions set forth in section 36-2801, paragraph 3 5. The department shall consider petitions in the manner required by department rule, including public notice and hearing. The department shall approve or deny a petition within one-hundred-eighty one hundred eighty days of after its submission. The approval or denial of a petition is a final decision of the department subject to judicial review pursuant to title 12, chapter 7, article 6. Jurisdiction and venue are vested in the superior court.
Sec. 3. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2803, Arizona Revised Statutes, is amended to read:
36-2803. Rulemaking; notice; testing of marijuana and marijuana products; batches; batch numbers; fees
A. The department shall adopt rules:
1. Governing the manner in which the department considers petitions from the public to add debilitating medical conditions or treatments to the list of debilitating medical conditions set forth in section 36-2801, paragraph 3 5, including public notice of, and an opportunity to comment in a public hearing on, petitions.
2. Establishing the form and content of registration and renewal applications submitted under this chapter.
3. Governing the manner in which the department considers applications for and renewals of registry identification cards.
4. Governing nonprofit medical marijuana dispensaries to protect against diversion and theft without imposing an undue burden on nonprofit medical marijuana dispensaries or compromising the confidentiality of cardholders, including:
(a) The manner in which the department considers applications for and renewals of registration certificates.
(b) Minimum oversight requirements for nonprofit medical marijuana dispensaries.
(c) Minimum recordkeeping requirements for nonprofit medical marijuana dispensaries.
(d) Minimum security requirements for nonprofit medical marijuana dispensaries, including requirements to protect each registered nonprofit medical marijuana dispensary location by a fully operational security alarm system.
(e) Procedures for suspending or revoking the registration certificate of nonprofit medical marijuana dispensaries that violate this chapter or the rules adopted pursuant to this section.
5. Establishing application and renewal fees for registry identification cards, nonprofit medical marijuana dispensary registration certificates and independent third-party laboratory certificates, according to the following:
(a) The total amount of all fees shall generate revenues that are sufficient to implement and administer this chapter, except that fee revenue may be offset or supplemented by private donations.
(b) Nonprofit medical marijuana dispensary application fees may not exceed $5,000.
(c) Nonprofit medical marijuana dispensary renewal fees may not exceed $1,000.
(d) The total amount of revenue generated from nonprofit medical marijuana dispensary application and renewal fees, registry identification card fees for nonprofit medical marijuana dispensary agents and independent third-party laboratory agents and application and renewal fees for independent third-party laboratories shall be sufficient to implement and administer this chapter, including the verification system, except that the fee revenue may be offset or supplemented by private donations.
(e) The department may establish a sliding scale of patient application and renewal fees that are based on a qualifying patient's household income and that are reasonable and related to the actual costs of processing applications and renewals.
(f) The department may consider private donations under section 36-2817 to reduce application and renewal fees.
B. The department of health services shall adopt rules that require each nonprofit medical marijuana dispensary 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 nonprofit medical marijuana dispensary. The rules shall also require each certifying physician to attest that the physician has provided information to each qualifying female patient that warns 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.
C. The department is authorized to adopt the rules set forth in subsections A and B of this section and shall adopt those rules pursuant to title 41, chapter 6.
D. The department of health services shall post prominently on its public website a warning 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.
E. Before selling or dispensing marijuana or marijuana products to registered qualified patients or registered designated caregivers, nonprofit medical marijuana dispensaries shall test marijuana and marijuana products for medical use to determine unsafe levels of contamination, including unsafe levels of microbial contamination, heavy metals, pesticides, fungicides, growth regulators and residual solvents and confirm the potency of the marijuana to be dispensed. The dried flowers of the marijuana plant are not required to be tested for residual solvents. If a nonprofit medical marijuana dispensary's test results for heavy metals comply with the prescribed requirements for a period of six consecutive months, heavy metal testing for that dispensary's marijuana and marijuana products is required only on a quarterly basis.
F. A nonprofit medical marijuana dispensary must separate each specific lot of cultivated marijuana into one batch before testing the marijuana in accordance with subsection E of this section. Each batch must consist of only one strain of cultivated marijuana. A nonprofit medical marijuana dispensary must separate marijuana products into one batch before testing the marijuana products in accordance with subsection E of this section. The sample that is provided to an independent third-party laboratory to comply with the testing requirements in subsection E of this section must be derived from the same batch.
G. An independent third-party laboratory that conducts testing in accordance with subsection E of this section shall upload to the department's online portal within five calendar days after completing the testing the laboratory-approved certificate of analysis that provides the details of the laboratory test results that were conducted in accordance with subsection E of this section.
H. A nonprofit medical marijuana dispensary shall assign each batch a unique batch number. Each unique batch number shall be all of the following:
1. Documented and maintained in the cultivation site or nonprofit medical marijuana dispensary records for at least two years and be available to the department on request.
2. Provided to the independent third-party laboratory for conducting testing in accordance with subsection E of this section.
3. Included on the batch label.
I. A nonprofit medical marijuana dispensary may not reuse a unique batch number.
J. A nonprofit medical marijuana dispensary shall provide the nonprofit medical marijuana dispensary's registration certificate number and the unique batch number to the independent third-party laboratory when conducting testing in accordance with subsection E of this section.
F. K. Nonprofit medical marijuana dispensaries shall:
1. Provide test results to a registered qualifying patient or designated caregiver immediately on request.
2. Display in a conspicuous location a sign that notifies patients of their right to receive the certified independent third-party laboratory test results for marijuana and marijuana products for medical use.
G. L. The department shall adopt rules to certify and regulate independent third-party laboratories that analyze marijuana cultivated for medical use. The department shall establish certification fees for laboratories pursuant to subsection A of this section. In order to be certified as an independent third-party laboratory that is allowed to test marijuana and marijuana products for medical use pursuant to this chapter, an independent third-party laboratory:
1. Must meet requirements established by the department, including reporting and health and safety requirements.
2. May not have any direct or indirect familial or financial relationship with or interest in a nonprofit medical marijuana dispensary or related medical marijuana business entity or management company, or any direct or indirect familial or financial relationship with a designated caregiver for whom the laboratory is testing marijuana and marijuana products for medical use in this state.
3. Must have a quality assurance program and standards.
4. Must have an adequate chain of custody and sample requirement policies.
5. Must have an adequate records retention process to preserve records.
6. Must establish procedures to ensure that results are accurate, precise and scientifically valid before reporting the results.
7. Must be accredited by a national or international accreditation association or other similar accrediting entity, as determined by the department.
8. Must establish policies and procedures for disposal and reverse distribution of samples that are collected by the laboratory.
H. M. Through December 31, 2022, the department may conduct proficiency testing and remediate problems with independent third-party laboratories that are certified and regulated pursuant to this chapter and marijuana testing facilities that are licensed and regulated pursuant to chapter 28.2 of this title.
I. N. Beginning January 1, 2023, the department shall conduct proficiency testing and remediate problems with require independent third-party laboratories that are certified and regulated pursuant to this chapter and marijuana testing facilities that are licensed and regulated pursuant to chapter 28.2 of this title to conduct proficiency testing that is commercially available by contracting with a proficiency testing provider that has national or international accreditation. The department shall supervise remediation as needed. The department may contract for proficiency testing with laboratories that have a national or international accreditation.
J. O. For the purposes of subsections H M and I N of this section, remediation may include assessing civil penalties and suspending or revoking a laboratory's certification or a marijuana testing facility's license.
K. P. The department shall adopt rules that prescribe reasonable time frames for testing marijuana and marijuana products.
Sec. 4. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2803.01, Arizona Revised Statutes, is amended to read:
36-2803.01. New dispensary registration certificates; issuance; priority; requirements; definition
A. Beginning on April 1, 2020, The department shall issue all new nonprofit medical marijuana dispensary registration certificates in the following order of priority based on the dispensary's geographic area as described in the registration certificate application:
1. The geographic area had a registered nonprofit medical marijuana dispensary move from the geographic area and the geographic area is at least twenty-five miles from another dispensary that has been issued a dispensary registration certificate.
2. The geographic area is at least twenty-five miles from another dispensary that has been issued a dispensary registration certificate.
3. According to rule, if there are no dispensary registration certificate applications as described in paragraph 1 or 2 of this subsection.
B. If the department receives multiple applications as described in subsection A, paragraph 1 of this section from previously approved nonprofit medical marijuana dispensary locations, the department shall approve the certificate for the application that serves the most qualifying patients within five miles of the proposed dispensary location. If the department receives multiple applications as described in subsection A, paragraph 2 of this section or if there are no applications from previously approved dispensary locations, the department may issue the registration certificate by random drawing.
C. A nonprofit medical marijuana dispensary that receives a registration certificate pursuant to subsection A, paragraph 1 or 2 of this section on or after April 1, 2020 must open the dispensary at the approved location within eighteen months after the application is approved or the registration certificate becomes invalid.
D. A nonprofit medical marijuana dispensary that is issued a registration certificate pursuant to subsection A, paragraph 1 or 2 of this section may relocate only as follows:
1. If the dispensary is located within a city or town, only within that city or town.
2. If the dispensary is located within an unincorporated area, only within the unincorporated area of the county where the dispensary is located but not within twenty-five miles from another dispensary that has been issued a dispensary registration certificate.
E. On or before twenty-one days after the effective date of this section, the department shall determine both:
1. The number of marijuana establishment licenses pursuant to section 36-2854 that are available to be issued.
2. Whether there are any counties in this state in which there are no registered nonprofit medical marijuana dispensaries operating.
F. During the period beginning twenty-two days after the effective date of this section for the following thirty days, the department shall accept and process applications for new nonprofit medical marijuana dispensary registration certificates from applicants that pay the applicable fee and to which both of the following apply:
1. The department stipulated or admitted that the applicant delivered an application to the department for a nonprofit medical marijuana dispensary registration certificate on or after January 1, 2017.
2. The applicant sought a registration certificate for a facility located in either:
(a) A county where, at the time of application, there was no registered nonprofit medical marijuana dispensary.
(b) A location where, at the time of application, there was not a registered nonprofit medical marijuana dispensary located within twenty-five miles.
G. An individual may not be an applicant, principal officer or board member on more than five applications for a nonprofit medical marijuana dispensary registration certificate that are submitted pursuant to subsection F of this section.
H. If there are any remaining counties in this state without a registered nonprofit medical marijuana dispensary that has been issued a registration certificate after the implementation of this section and section 36-2854, during the period beginning december 1, 2022 through December 31, 2022, the department shall accept applications to register nonprofit medical marijuana dispensaries and issue registration certificates in those remaining counties.
E. I. For the purposes of this section, "geographic area" means a city, town or unincorporated area of a county.
Sec. 5. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2804.02, Arizona Revised Statutes, is amended to read:
36-2804.02. Registration of qualifying patients and designated caregivers; fee waiver
A. A qualifying patient may apply to the department for a registry identification card by submitting:
1. Written certification issued by a physician within the ninety days immediately preceding the date of application.
2. The application fee.
3. An application, including:
(a) The name, mailing address, residence address and date of birth of the qualifying patient, except that if the applicant is homeless no address is required.
(b) The name, address and telephone number of the qualifying patient's physician.
(c) The name, address and date of birth of the qualifying patient's designated caregiver, if any.
(d) A statement signed by the qualifying patient pledging not to divert marijuana to anyone who is not allowed to possess marijuana pursuant to this chapter.
(e) A signed statement from the designated caregiver, if any, agreeing to be the patient's designated caregiver and pledging not to divert marijuana to anyone who is not allowed to possess marijuana pursuant to this chapter.
(f) A designation as to who will be allowed to cultivate marijuana plants for the qualifying patient's medical use if a registered nonprofit medical marijuana dispensary is not operating within twenty-five miles of the qualifying patient's home.
B. The application for a qualifying patient's registry identification card shall ask whether the patient would like the department to notify him the patient of any clinical studies needing human subjects for research on the medical use of marijuana. The department shall notify interested patients if it is notified of studies that will be conducted in the United States.
C. A veteran of the armed forces of the United States who has been honorably discharged and who has been a resident of this state for at least one year is exempt from the application fee prescribed by subsection A of this section.
Sec. 6. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2804.05, Arizona Revised Statutes, is amended to read:
36-2804.05. Denial of registry identification card; notification
A. The department may deny an application or renewal of a qualifying patient's registry identification card only if the applicant:
1. Does not meet the requirements requirement of section 36-2801, paragraph 15 17.
2. Does not provide the information required.
3. Previously had a registry identification card revoked for violating this chapter.
4. Provides false information.
B. The department may deny an application or renewal of a designated caregiver's registry identification card if the applicant:
1. Does not meet the requirements of section 36-2801, paragraph 5 7.
2. Does not provide the information required.
3. Previously had a registry identification card revoked for violating this chapter.
4. Provides false information.
C. The department may deny a registry identification card to a nonprofit medical marijuana dispensary agent if:
1. The agent applicant does not meet the requirements of section 36-2801, paragraph 13 15.
2. The applicant or dispensary did not provide the required information.
3. The agent applicant previously had a registry identification card revoked for violating this chapter.
4. The applicant or dispensary provides false information.
D. The department may conduct a criminal records check of each designated caregiver or nonprofit medical marijuana dispensary agent applicant to carry out this section.
E. The department shall notify the registered nonprofit medical marijuana dispensary in writing of the reason for denying a registry identification card to a nonprofit medical marijuana dispensary agent.
F. The department shall notify the qualifying patient in writing of the reason for denying a registry identification card to the qualifying patient's designated caregiver.
G. Denial of an application or renewal is considered a final decision of the department subject to judicial review pursuant to title 12, chapter 7, article 6. Jurisdiction and venue for judicial review are vested in the superior court.
Sec. 7. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2817, Arizona Revised Statutes, is amended to read:
36-2817. Medical marijuana fund; private donations; fund transfers; use of monies
A. The medical marijuana fund is established consisting of fees collected, civil penalties imposed and private donations received under this chapter. The department shall administer the fund. Monies in the fund are continuously appropriated.
B. The director of the department may accept and spend private grants, gifts, donations, contributions and devises to assist in carrying out this chapter.
C. Monies in the medical marijuana fund may be used to provide grants for marijuana clinical trials conducted pursuant to section 36-2822.
D. Monies in the medical marijuana fund do not revert to the state general fund at the end of a fiscal year.
E. On November 30, 2020, the director of the department shall transfer the following sums from the medical marijuana fund for the following purposes:
1. $15,000,000 to the Arizona teachers academy fund established by section 15-1655.
2. $10,000,000 to the department to fund the formation and operation of councils, commissions and programs dedicated to improving public health, including teen suicide prevention, the maternal mortality review program, improving youth health, substance abuse prevention, addressing adverse childhood experiences, the Arizona poison control system established pursuant to section 36-1161, the Arizona health improvement plan, the child fatality review team established pursuant to section 36-3501 and the chronic pain self management program.
3. $10,000,000 to the governor's office of highway safety to distribute grants for the following purposes:
(a) Reducing impaired driving, including conducting training programs and purchasing equipment for detecting, testing and enforcing laws against driving, flying or boating while impaired.
(b) Equipment, training and personnel costs for dedicated traffic enforcement.
4. $2,000,000 to the department to implement, carry out and enforce chapter 28.2 of this title.
5. $4,000,000 to the department to distribute grants to qualified nonprofit entities that will provide outreach to individuals who may be eligible to file petitions for expungement pursuant to section 36-2862 and will assist with the expungement petition process. The department shall distribute grants pursuant to this paragraph on or before June 30, 2021.
6. $2,000,000 to the department of health services
to develop and implement, in conjunction with the
department of economic security and other state agencies, 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. For the purposes of this paragraph, "marijuana
establishment" and "marijuana testing facility" have the same
meanings prescribed in section 36-2850.
7. $1,000,000 to the department to fund programs and grants to qualified nonprofit organizations for education and community outreach related to chapter 28.2 of this title.
8. $1,000,000 to the smart and safe Arizona fund established by section 36-2856.
F. After all costs incurred to implement, carry out and enforce this chapter and the rules adopted pursuant to this chapter are paid for fiscal year 2021-2022, the department shall transfer from the medical marijuana fund the following sums for the following purposes:
1. $1,250,000 to the department for suicide prevention.
2. $1,250,000 to the Arizona health care cost containment system for suicide prevention.
3. $2,000,000 to the institute for mental health research for research to improve mental health services, research and education in this state.
4. $2,000,000 to the department for the primary care provider loan repayment program and the rural private primary care provider loan repayment program established by chapter 21 of this title. The department shall prioritize rural providers in the areas of mental health care and behavioral health care if feasible and appropriate.
5. $2,000,000 to the board of medical student loans for the purposes of title 15, chapter 13, article 7. The board shall prioritize students who intend to practice in the area of psychiatry or other areas of practice that treat mental illness if feasible and appropriate.
6. $5,000,000 to county public health departments, in proportion to the population of each county, for the purposes of addressing important public health issues and communities affected by drug addiction and incarceration.
7. $1,000,000 to the department for the health care directives registry established pursuant to section 36-3291.
G. Monies transferred pursuant to subsection F of this section do not revert to the state general fund.
H. The director shall make a onetime transfer of $250,000 from the medical marijuana fund to the department to provide grants for marijuana research studies pursuant to section 36-2812.
I. The director may use monies in the medical marijuana fund to contract with laboratories pursuant to section 36-2803, subsection I N to comply with the proficiency testing requirements of this chapter for independent third-party laboratories and marijuana testing facilities. On or before July 1 of each year, the department shall report to the joint legislative budget committee expenditures made pursuant to this subsection for the preceding fiscal year.
Sec. 8. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2822, Arizona Revised Statutes, is amended to read:
36-2822. Arizona biomedical research centre; medical marijuana fund; smart and safe Arizona fund; grants; marijuana clinical trials; requirements
A. The Arizona biomedical research centre in the department shall provide competitive grants from monies in the medical marijuana fund established by section 36-2817 or the smart and safe Arizona fund established by section 36-2856 for marijuana clinical trials that are approved by the United States food and drug administration for evaluating both the safety and efficacy of using marijuana in humans and researching the impacts of marijuana interactions with prescription drugs, nonprescription drugs and illicit drugs.
B. Clinical trials funded pursuant to subsection A of this section shall be conducted by Arizona-based researchers from nonprofit organizations or universities, be approved by the United States food and drug administration, the United States drug enforcement administration and an institutional review board and be publishable in peer-reviewed medical and public health journals. The centre shall prioritize randomized controlled clinical trials that study the treatment of autism, epilepsy, post-traumatic stress disorder and pain.
C. Notwithstanding title 13, chapter 34, a person who receives a grant for a marijuana clinical trial pursuant to this section and any of the person's employees working on the clinical trial may not be charged with or prosecuted for possession of marijuana that is cultivated for medical use when the person is working on the clinical trial.
D. The Arizona biomedical research centre may shall provide up to $5,000,000 annually for five consecutive years from the medical marijuana fund established by section 36-2817 or the smart and safe Arizona fund established by section 36-2856, or a combination of both funds, to administer and award competitive grants pursuant to this section. The centre may not use more than five percent of these monies for administrative purposes.
Sec. 9. 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:
(i) 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.
(ii) Any other law, beginning October 1, 2022, a licensee may apply for a nonprofit medical marijuana dispensary registration certificate to become a dual licensee if the licensee notifies the department and submits the applicable fee, and a nonprofit medical marijuana dispensary may apply for a marijuana establishment license to become a dual licensee if the nonprofit medical marijuana dispensary notifies the department and submits the applicable fee. On notification and payment of the applicable fee pursuant to this item, The department shall issue the applicable nonprofit medical marijuana dispensary registration certificate or marijuana establishment license.
(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) Licenses issued by the department to marijuana establishments 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) Beginning September 29, 2021, the department may not issue a marijuana establishment or marijuana testing facility license to an applicant who has an ownership interest in an out-of-state marijuana establishment 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 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.
4. Marijuana establishments to safely cultivate, process and manufacture marijuana and marijuana products. Not later than December 31, 2023, 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. 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 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 or related marijuana business entity or management company. The rules shall include prohibiting a marijuana establishment 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 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 $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 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 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.
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 or related marijuana business entity or management company.
2. A marijuana establishment 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.
Sec. 10. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2854.01, Arizona Revised Statutes, is amended to read:
36-2854.01. Marijuana products; labeling; packaging
Not later than December 31, 2023, any marijuana product packaging labeled for sale shall include a consumer scannable tetrahydrocannabinol quick response code or similar technology linking to a webpage 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.
4. The complete independent third-party laboratory certificate of analysis that is provided to the department pursuant to section 36-2803 if the marijuana product is tested pursuant to section 36-2803, or the complete marijuana testing facility certificate of analysis.
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.
Sec. 11. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2856, Arizona Revised Statutes, is amended to read:
36-2856. Smart and safe Arizona fund; grants; disposition of monies; exemption
A. The smart and safe Arizona fund is established consisting of all monies deposited pursuant to sections 36-2854, 42-5452 and 42-5503, private donations and interest earned on those monies. Monies in the fund are continuously appropriated. Monies in the fund and its accounts may not be transferred to any other fund except as provided in this section, do not revert to the state general fund and are exempt from the provisions of section 35-190 relating to the lapsing of appropriations. The state treasurer shall administer the fund.
B. All monies in the smart and safe Arizona fund must first be spent, and the state treasurer shall transfer monies from the fund, to pay:
1. The actual reasonable costs incurred by the department to implement, carry out and enforce this chapter and rules adopted pursuant to this chapter and to provide grants for marijuana clinical trials conducted pursuant to section 36-2822.
2. The actual reasonable costs incurred by the department of revenue to impose and enforce the tax authorized and levied by section 42-5452.
3. The actual
reasonable costs incurred by the supreme court and the department 
of public safety to process
petitions for expungement and expungement orders pursuant to section 36-2862
and to otherwise implement section 36-2862.
4. The actual reasonable costs incurred by the state treasurer to administer the fund.
5. Any other mandatory expenditure of state revenues required by this chapter to implement or enforce the provisions of this chapter.
C. The state treasurer may prescribe forms necessary to make transfers from the smart and safe Arizona fund pursuant to subsection B of this section.
D. On or before June 30 and December 31 of each year, the state treasurer shall transfer all monies in the smart and safe Arizona fund in excess of the amounts paid pursuant to subsection B of this section as follows:
1. 33 Thirty-three percent to community college districts and provisional community college districts, but not to community college tuition financing districts established pursuant to section 15-1409, for the purposes of investing in and providing workforce development programs, job training, career and technical education, and science, technology, engineering and math mathematics programs, as follows:
(a) 15 Fifteen percent of the 33 thirty-three percent divided equally between each community college district.
(b) 0.5 percent of the 33 thirty-three percent divided equally between each provisional community college district, if one or more provisional community college districts exist.
(c) The remainder to community college districts and provisional community colleges districts in proportion to each district's full-time equivalent student enrollment percentage of the total statewide audited full-time equivalent student enrollment in the preceding fiscal year prescribed in section 15-1466.01.
2. 31.4 percent to municipal police departments, municipal fire departments, fire districts established pursuant to title 48, chapter 5 and county sheriffs' departments in proportion to the number of enrolled members for each such agency in the public safety personnel retirement system established by title 38, chapter 5, article 4 and the public safety personnel defined contribution retirement plan established by pursuant to title 38, chapter 5, article 4.1, for personnel costs.
3. 25.4 percent to the Arizona highway user revenue fund established by section 28-6533.
4. 10 Ten percent to the justice reinvestment fund established by section 36-2863.
5. 0.2 percent to the attorney general to use to enforce this chapter, or to grant to localities to enforce this chapter.
E. The monies transferred and received pursuant to this section:
1. Are in addition to any other appropriation, transfer or other allocation of monies and may not supplant, replace or cause a reduction in other funding sources.
2. Are not considered local revenues for the purposes of article IX, sections 20 and 21, Constitution of Arizona.
Sec. 12. 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 36-2866 and 36-2867, to read:
36-2866. Complaints; disclosure of information; confidentiality
A. A complaint that relates to compliance with this chapter, chapter 28.1 of this title or the rules adopted pursuant to this chapter and chapter 28.1 of this title and that is submitted to the department regarding an independent third-party laboratory, a marijuana testing facility, a nonprofit medical marijuana dispensary or a marijuana establishment is available to the public after the department determines that there is a reasonable basis to proceed to investigate the complaint, except that the name of the complainant shall be confidential if requested by the complainant.
B. Unless otherwise prohibited by federal or state law, the department may disclose the information in a complaint described in subsection A of this section to an officer of the court pursuant to a court order, to a department or agency of this state or the federal government, to a law enforcement agency or to a county medical examiner if the disclosure of this information is necessary and pertinent to an investigation or proceeding. The recipient of information disclosed pursuant to this subsection shall maintain the confidentiality of the complainant's name.
36-2867. Sample collection and testing
B. Notwithstanding title 13, chapter 34, a third-party contractor may not be charged with or prosecuted for possession of marijuana or marijuana products that are collected for the purposes of a contract with the department pursuant to this section.
Sec. 13. Rulemaking exemption
Notwithstanding any other law, for the purposes of this act, the department of health services is exempt from the rulemaking requirements of title 41, chapters 6 and 6.1, Arizona Revised Statutes, for one year after the effective date of this act.
Sec. 14. Requirements for enactment; three-fourths vote
Pursuant to article IV, part 1, section 1, Constitution of Arizona, sections 36-2801, 36-2801.01, 36-2803, 36-2803.01, 36-2804.02, 36-2804.05, 36-2817, 36-2822, 36-2854, 36-2854.01 and 36-2856, Arizona Revised Statutes, as amended by this act, and sections 36-2866 and 36-2867, Arizona Revised Statutes, as added by this act, are effective only on the affirmative vote of at least three-fourths of the members of each house of the legislature.
Sec. 15. Emergency
This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.
