Bill Text: AZ HB2828 | 2022 | Fifty-fifth Legislature 2nd Regular | Introduced


Bill Title: Department of marijuana regulation

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2022-06-23 - Introduced in House and read first time [HB2828 Detail]

Download: Arizona-2022-HB2828-Introduced.html

 

 

 

REFERENCE TITLE: department of marijuana regulation

 

 

 

 

State of Arizona

House of Representatives

Fifty-fifth Legislature

Second Regular Session

2022

 

 

 

HB 2828

 

Introduced by

Representative Bowers

 

 

AN ACT

 

Amending sections 36-2801, 36-2803, 36-2817, 36-2821, 36-2850 and 36-2856, Arizona Revised Statutes; amending title 36, Arizona Revised Statutes, by adding chapter 28.3; amending title 41, chapter 27, article 2, Arizona Revised Statutes, by adding section 41-3030.04; appropriating monies; 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:

START_STATUTE36-2801. 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. "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.

3. "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. "Department" means the department of health services marijuana regulation or its successor agency.

5. "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. "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. "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. "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. "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. "Marijuana" means all parts of any plant of the genus cannabis, whether growing or not, and the seeds of such plant.

11. "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. "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. "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. "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. "Qualifying patient" means a person who has been diagnosed by a physician as having a debilitating medical condition.

16. "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.

17. "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. "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. "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. "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. END_STATUTE

Sec. 2. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2803, Arizona Revised Statutes, is amended to read:

START_STATUTE36-2803. Rulemaking; notice; testing of marijuana and marijuana products; 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, 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 marijuana regulation 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 marijuana regulation 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. 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. 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. 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. Beginning January 1, 2023, the department shall 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. The department may contract for proficiency testing with laboratories that have a national or international accreditation.

J. For the purposes of subsections H and I 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. The department shall adopt rules that prescribe reasonable time frames for testing marijuana and marijuana products. END_STATUTE

Sec. 3. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2817, Arizona Revised Statutes, is amended to read:

START_STATUTE36-2817. 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 of health services 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 of marijuana regulation 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 of marijuana regulation shall distribute grants pursuant to this paragraph on or before June 30, 2021.

6. $2,000,000 to the department of health services marijuana regulation 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 of health services 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 of health services 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 of health services 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 of health services 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 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. END_STATUTE

Sec. 4. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2821, Arizona Revised Statutes, is amended to read:

START_STATUTE36-2821. Medical marijuana testing advisory council; membership; duties; report; definitions

A. The director shall establish a medical marijuana testing advisory council to assist and make recommendations to the director regarding administering and implementing this chapter. The director or the director's designee shall serve as the chairperson of the advisory council and shall appoint the following additional members to the council:

1. The president or executive director of a statewide nonprofit association representing the marijuana dispensaries, or the person's designee.

2. The president or executive director of a statewide nonprofit cannabis testing association, or the person's designee.

3. The president or executive director of a medical marijuana trade association that does not primarily consist of dispensaries or cannabis laboratory testing facility owners, or the person's designee.

4. A representative of a nonprofit medical marijuana dispensary who is employed by the dispensary to cultivate medical marijuana and who has at least three years of medical marijuana cultivation experience.

5. A representative of an Arizona-based nonprofit medical marijuana dispensary that produces medical marijuana concentrates and that has been regularly sending products for testing who has at least three years of medical marijuana extraction experience.

6. A representative of an Arizona-based nonprofit medical marijuana dispensary that is primarily focused on producing medical marijuana edibles who has at least three years of medical marijuana edible production experience.

7. An owner of an Arizona-based cannabis testing laboratory.

8. A laboratory scientist who holds a doctorate or a bachelor of science degree and who has at least three years of experience in cannabis laboratory testing.

9. A registered qualifying patient.

10. A registered designated caregiver.

11. A representative of the department of public safety.

12. A licensed health care provider who specializes in treating substance use disorders and who has at least five years of experience.

13. One university faculty member from each university under the jurisdiction of the Arizona board of regents who is has an academic appointment in the chemistry department or another related analytical lab testing area to function as an independent subject matter experts expert.

14. A representative of a laboratory that conducts proficiency testing for laboratories in this state.

B. The medical marijuana testing advisory council shall make recommendations and consult with the director regarding:

1. Establishing a required testing program.

2. Testing and potency standards for medical marijuana.

3. Procedural requirements for collecting, storing and testing samples of medical marijuana.

4. Reporting results to patients and the department.

5. Remediation and disposal requirements for medical marijuana that fails to meet testing standards.

6. Additional items as necessary.

C. The advisory council shall annually review the marijuana testing programs under this chapter and chapter 28.2 of this title and, on or before the second Monday in January of each year, shall submit to the president of the senate, the speaker of the house of representatives, the health and human services committee chairpersons of the senate and the house of representatives, or their successor committees, and the director of the department of health services marijuana regulation a report that does not disclose any identifying information and that includes at least the following:

1. An assessment as to whether an analyte should be removed from the required statutory testing panel.

2. The number of statements of deficiencies relating to testing that were issued to each nonprofit medical marijuana dispensary, third-party independent laboratory, marijuana establishment and marijuana testing facility in the preceding year, the remediation efforts made to address each deficiency and the resolution of each statement of deficiency. The information may not disclose any identifying information but shall delineate the information by entity.

3. Any other recommendations on improving the testing programs.

D. Members of the advisory council are not eligible to receive compensation but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2.

E. For the purposes of this section, "marijuana establishment" and "marijuana testing facility" have the same meanings prescribed in section 36-2850. END_STATUTE

Sec. 5. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2850, Arizona Revised Statutes, is amended to read:

START_STATUTE36-2850. 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 marijuana regulation or its successor agency.

8. "Designated caregiver" has the same meaning prescribed in section 36-2801.

9. "Dual licensee" means an entity that holds both a nonprofit medical marijuana dispensary registration and a marijuana establishment license.

10. "Early applicant" means either of the following:

(a) An entity seeking to operate a marijuana establishment in a county with fewer than two registered nonprofit medical marijuana dispensaries.

(b) A nonprofit medical marijuana dispensary that is registered and in good standing with the department.

11. "Employee," "employer," "health care facility," and "places of employment" have the same meanings prescribed in the smoke-free Arizona act, section 36-601.01.

12. "Excluded felony offense" has the same meaning prescribed in section 36-2801.

13. "Good standing" means that a nonprofit medical marijuana dispensary is not the subject of a pending notice of intent to revoke issued by the department.

14. "Independent third-party laboratory" has the same meaning prescribed in section 36-2801.

15. "Industrial hemp" has the same meaning prescribed in section 3-311.

16. "Licensee" means a person that obtains a license pursuant to section 36-2854.

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

18. "Manufacture" and "manufacturing" mean to compound, blend, extract, infuse or otherwise make or prepare a marijuana product.

19. "Marijuana":

(a) Means all parts of the plant of the genus cannabis, whether growing or not, as well as the seeds from the plant, the resin extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture or preparation of the plant or its seeds or resin.

(b) Includes cannabis as defined in 13-3401.

(c) Does not include industrial hemp, the fiber produced from the stalks of the plant of the genus cannabis, oil or cake made from the seeds of the plant, sterilized seeds of the plant that are incapable of germination, or the weight of any other ingredient combined with marijuana to prepare topical or oral administrations, food, drink or other products.

20. "Marijuana concentrate":

(a) Means resin extracted from any part of a plant of the genus cannabis and every compound, manufacture, salt, derivative, mixture or preparation of that resin or tetrahydrocannabinol.

(b) Does not include industrial hemp or the weight of any other ingredient combined with cannabis to prepare topical or oral administrations, food, drink or other products.

21. "Marijuana establishment" means an entity that is licensed by the department to operate all of the following:

(a) A single retail location at which the licensee may sell marijuana and marijuana products to consumers, cultivate marijuana and manufacture marijuana products.

(b) A single off-site cultivation location at which the licensee may cultivate marijuana, process marijuana and manufacture marijuana products, but from which marijuana and marijuana products may not be transferred or sold to consumers.

(c) A single off-site location at which the licensee may manufacture marijuana products and package and store marijuana and marijuana products, but from which marijuana and marijuana products may not be transferred or sold to consumers.

22. "Marijuana facility agent" means a principal officer, board member or employee of a marijuana establishment or marijuana testing facility who is at least twenty-one years of age and who has not been convicted of an excluded felony offense.

23. "Marijuana 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.

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.

27. "Open space" means a public park, public sidewalk, public walkway or public pedestrian thoroughfare.

28. "Process" and "processing" mean to harvest, dry, cure, trim or separate parts of the marijuana plant.

29. "Public place" has the same meaning prescribed in section 36-601.01.

30. "Qualifying patient" has the same meaning prescribed in section 36-2801.

31. "Smoke" means to inhale, exhale, burn, carry or possess any lighted marijuana or lighted marijuana products, whether natural or synthetic. END_STATUTE

Sec. 6. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2856, Arizona Revised Statutes, is amended to read:

START_STATUTE36-2856. Smart and safe Arizona fund; 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.

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 and the department of public safety 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. END_STATUTE

Sec. 7. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, title 36, Arizona Revised Statutes, is amended by adding chapter 28.3, to read:

CHAPTER 28.3

DEPARTMENT OF MARIJUANA REGULATION

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE36-2891. Definitions

In this chapter, unless the context otherwise requires:

1. "Department" means the department of marijuana regulation.

2. "Director" means the director of the department. END_STATUTE

START_STATUTE36-2892. Department of marijuana regulation; director appointment

A. The department of marijuana regulation is established for the purpose of administering chapters 28.1 and 28.2 of this title.

B. The operation and control of the department are the responsibility of the director.

C. The governor shall appoint the director with the advice and consent of the senate. The director serves at the pleasure of the governor. The director is eligible to receive compensation pursuant to section 38-611. END_STATUTE

START_STATUTE36-2893. Director's duties

A. The director is directly responsible to the governor for the operation and control of the department.

B. The director shall:

1. Adopt rules as necessary to carry out the duties and requirements of chapters 28.1 and 28.2 of this title.

2. Employ, determine the conditions of employment and prescribe the duties and powers of administrative, professional, technical, secretarial, clerical and other persons as necessary to perform the department's duties and contract for the services of outside advisors, consultants and aides as reasonably necessary.

3. Contract with or assist other departments, agencies and institutions of the state and local governments to further the department's purposes, objectives and programs.

4. Advise and make recommendations to the governor and the legislature on all matters concerning the department's objectives.

5. Delegate the administrative functions, duties and powers as the director deems necessary to carry out the efficient operation of the department. END_STATUTE

Sec. 8. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3030.04, to read:

START_STATUTE41-3030.04. Department of marijuana regulation; termination July 1, 3030

A. The department of marijuana regulation terminates on July 1, 2030.

B. Title 36, chapter 28.3 and this section are repealed on January 1, 2031. END_STATUTE

Sec. 9. Succession; transfer; effect

A. As provided by this act, the department of marijuana regulation succeeds to the authority, powers, duties and responsibilities of the department of health services relating to the regulation of marijuana pursuant to title 36, chapters 28.1 and 28.2, Arizona Revised Statutes.

B. This act does not alter the effect of any actions that were taken or impair the valid obligations of the department of health services relating to the regulation of marijuana pursuant to title 36, chapters 28.1 and 28.2, Arizona Revised Statutes, in existence before January 1, 2023.

C. Administrative rules and orders that were adopted by the department of health services relating to the regulation of marijuana pursuant to title 36, chapters 28.1 and 28.2, Arizona Revised Statutes, continue in effect until superseded by administrative action by the department of marijuana regulation.

D. All administrative matters, contracts and judicial and quasi-judicial actions, whether completed, pending or in process, of the department of health services relating to the regulation of marijuana pursuant to title 36, chapters 28.1 and 28.2, Arizona Revised Statutes, on January 1, 2023 are transferred to and retain the same status with the department of marijuana regulation.

E. All certificates, licenses, registrations, permits and other indicia of qualification and authority that were issued by the department of health services relating to the regulation of marijuana pursuant to title 36, chapters 28.1 and 28.2, Arizona Revised Statutes, retain their validity for the duration of their terms of validity as provided by law.

F. All equipment, records, furnishings and other property, all data and investigative findings, all obligations and all appropriated monies that remain unexpended and unencumbered on January 1, 2023 of the department of health services relating to the regulation of marijuana pursuant to title 36, chapters 28.1 and 28.2, Arizona Revised Statutes, are transferred to the department of marijuana regulation.

G. All personnel who are under the state personnel system and employed by the department of health services relating to the regulation of marijuana pursuant to title 36, chapters 28.1 and 28.2, Arizona Revised Statutes, are transferred to comparable positions and pay classifications in the respective administrative units of the department of marijuana regulation on January 1, 2023.

Sec. 10. Conforming legislation

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

Sec. 11. Purpose

Pursuant to section 41-2955, subsection E, Arizona Revised Statutes, the legislature establishes the department of marijuana regulation to promote the safe use of marijuana in this state.

Sec. 12. Effective date

This act is effective from and after December 31, 2022.

Sec. 13. Requirements for enactment; three-fourths vote

Pursuant to article IV, part 1, section 1, Constitution of Arizona, sections 36-2801, 36-2803, 36-2817, 36-2821, 36-2850 and 36-2856, Arizona Revised Statutes, as amended by this act, and title 36, chapter 28.3, 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.

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