CS/HB 226 CANNABIS LICENSURE BACKGROUND CHECKS

Rep Tara L. Lujan

Actions: [3] HCPAC/HJC-HCPAC [8] DNP-CS/DP-HJC

Scheduled: Not Scheduled

 House Bill 226 (HB 226):  This legislative act is related to the regulation of cannabis in the state of New Mexico. The act addresses various aspects of the licensing process for commercial cannabis activities and introduces provisions for state and national criminal history checks as a condition for eligibility for licensure. 

 House Bill 226 (HB 226):  A license issued under the Cannabis Regulation Act is protected from execution, attachment, security transactions, liens, or receivership.
•	The division is responsible for accepting and processing license applications.
•	Applicants must demonstrate legal access to a sufficient water supply.
•	Cannabis producer applicants must submit plans for energy and water reduction.
•	The division must issue or deny a license within 90 days of deeming an application complete.
•	An application may be denied if it lacks required information or if the applicant or controlling person has a relevant criminal conviction.
•	The division may review convictions to determine the applicant's qualification and rehabilitation.
•	Certain felony convictions related to fraud, deceit, embezzlement, hiring minors for drug-related activities, and other offenses are considered substantially related to licensure.
•	Applicants, partners, members, directors, officers, and controlling persons must undergo state and national criminal history checks.
•	The division shall require fingerprints and bear the costs of obtaining criminal history information.
•	Criminal history information obtained by the division is confidential and restricted to evaluating the applicant's eligibility.
•	Electronic live fingerprint scans may be used for criminal history background checks.
•	"Applicant" refers to a person seeking licensure.

 

 Committee Substitute February 4, 2024, in HCPAC

HCPACcs/HB 226:  This legislation is related to Cannabis Regulations:
Section 1:  Is amended to read – “26-2C-2.  Definitions as used in the Cannabis Regulation Act:
The following terms are defined in this act:  Advertisement, Applicant, cannabis consumption area, cannabis courier, cannabis establishment, cannabis extract, cannabis flowers, cannabis manufacturer, cannabis producer, cannabis producer microbusiness, cannabis product, cannabis research laboratory, cannabis retailer, cannabis server permit, cannabis server permit education provider, cannabis testing laboratory, cannabis training and education program, commercial cannabis activity, consumer, contaminant, controlling person, cultivation, department, director, division, dry weight basis, facility, financial consideration, homegrown or homemade, household, immature cannabis plant, industry standard, integrated cannabis microbusiness,  licensed premises, licensee, medical cannabis, medical cannabis registry, primary caregiver, public place, qualified patient, reciprocal participant, retail establishment, superintendent, unprocessed, vertically integrated cannabis.

Section 2:  Creates a division called, “cannabis control division”.  This section details the powers and duties of the new division, in conjunction with explaining rulemaking, and membership of the newly created division.  
•	No later than January 1, 2022, the division shall promulgate rules that are consistent with industry standards necessary for the division to carry out its duties pursuant to the Cannabis Regulation Act.
•	The division shall create the “cannabis regulatory advisory committee”.
o	A person appointed to the committee shall not hold any ownership interest or investment in a licensed person pursuant to the Cannabis Regulatory Act.
o	The committee shall consist of the following members:  The chief public defender, a district attorney appointed by the New Mexico district attorney association.  A municipal police chief, county sheriff.  Additional members shall be appointed by the superintendent from other groups with professional qualifications.

Section 3: Explains and defines – Commercial Cannabis Activity Licensing – Application – Issuance and Denial of Licenses:
•	When a license is issued, it shall not be subject to execution, attachment, a security transaction, liens or receivership.  This section details the responsibilities of the division, such as, “monitoring the supply and demand of cannabis products in New Mexico by licensees and present annually to the appropriate interim committee of the legislature.  
•	The division shall deny an application for an initial license or renewal if: (1) the application does not include information required by the division (2) the applicant or the controlling person has been convicted of an offense that is substantially related to the qualifications, function or duties of the applicant’s business.  This section details exactly what would qualify as reasons for an applicant’s denial.
•	All applicants must submit to a criminal background check.