SB1420 - 532R

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, title 3, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 3-109.03, to read:

START_STATUTE3-109.03. Marijuana for medical use; agricultural commodity; rules; definitions

A. Marijuana that is cultivated for medical use by a nonprofit medical marijuana dispensary or a designated caregiver is an agricultural commodity as defined in rule by the department and, beginning June 1, 2019, is subject to regulation under this title and the rules adopted pursuant to this title. The director may adopt any rules necessary relating to the cultivation of marijuana for medical use and required testing by independent third‑party laboratories of marijuana that is cultivated by a nonprofit medical marijuana dispensary or a designated caregiver for medical use.

B. For the purposes of this title, "Designated caregiver", "marijuana", "medical use" and "nonprofit medical marijuana dispensary" have the same meanings prescribed in section 36‑2801. END_STATUTE

Sec. 2. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 3-145, Arizona Revised Statutes, is amended to read:

START_STATUTE3-145. Mandatory and voluntary certification; sampling procedures; application; immunity; expiration; renewal

A. A person who that establishes, conducts or maintains a laboratory that provides agricultural laboratory services to agencies or departments of this state or its political subdivisions shall apply for a certificate from the state agricultural laboratory as proof that the laboratory so certified is in compliance with rules adopted by the director for the certification of such laboratories. Any other person providing agricultural laboratory services may apply for such a certificate.

B. A person providing guaranteed laboratory analysis information to distributors of commercial feed and whole seeds for consumption by livestock shall be certified under this section.

C. An individual who collects samples for the state agricultural laboratory or for any certified agricultural laboratory shall follow the sampling procedures established by the director.

D. A person that provides laboratory analysis of marijuana cultivated for medical use shall apply for a certificate from the state agricultural laboratory. the director shall adopt rules for the certification of laboratories that analyze marijuana cultivated for medical use, including the required sampling and testing of marijuana. Except as provided in section 36‑2806, a laboratory that is certified to analyze marijuana shall report the test results only to the nonprofit medical marijuana dispensary or designated caregiver that cultivates the marijuana, the department of health services and the state agricultural laboratory. Notwithstanding title 13, chapter 34, an employee of the department of agriculture or an employee of any contracted third‑party testing facility may not be charged with or prosecuted for possession of any amount of marijuana that is cultivated for medical use and that the employee is using as a sample for testing as required by this subsection and rules adopted pursuant to this title.

D. E. A certified laboratory shall report test results only to the party who provided that provides the original sample and, on request, to the state agricultural laboratory or as required by section 3‑2611.01.

E. F. A person who that desires a certificate pursuant to this section shall file with the state agricultural laboratory an application for a certificate accompanied by the application fee.

F. G. The application shall be on a form prescribed by the assistant director and furnished by the state agricultural laboratory and shall contain:

1. The name and location of the laboratory.

2. The name of the person owning the laboratory and the name of the person supervising the laboratory.

3. A description of the programs, services and functions provided by the laboratory.

4. Such other information as the assistant director deems necessary to carry out the purposes of this section.

G. H. The assistant director shall issue a certificate to an applicant if the assistant director is satisfied that the applicant has complied with the rules prescribing standards for certified laboratories.

H. I. A certificate expires one year after the date of issuance and shall be renewed upon on payment of the renewal application fee as prescribed in section 3‑146 and continued compliance with this article and the applicable rules. END_STATUTE

Sec. 3. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 3-201, Arizona Revised Statutes, is amended to read:

START_STATUTE3-201. Definitions

In this article, unless the context otherwise requires:

1. "Associate director" means the associate director of the division.

2. "Diseases" includes any fungus, bacterium, virus or other organism of any kind and any unknown cause that is or may be found to be injurious, or likely to be or to become injurious to any domesticated or cultivated plant, or to the product of any such plant.

3. "Division" means the plant services division of the Arizona department of agriculture.

4. "Noxious weed" means any species of plant that is, or is liable to be, detrimental or destructive and difficult to control or eradicate and shall include includes any species that the director, after investigation and hearing, shall determine determines to be a noxious weed.

5. "Nursery" means real property or other premises on or in which nursery stock is propagated, grown or cultivated or from which source nursery stock is offered for distribution or sale.

6. "Nursery stock" includes all trees, shrubs, vines, cacti, agaves, succulents, herbaceous plants whether annuals, biennials or perennials, bulbs, corms, rizomes, roots, decorative plant material, flowers, fruit pits or seeds, cuttings, buds, grafts, scions and other plants intended for sale, gift or propagation, either cultivated or collected in the wild, except seeds as regulated by article 2 of this chapter, fruit and vegetables regulated by chapter 3, articles 2 and 4 of this title and cotton plants.

7. "Pests" includes all noxious weeds, insects, diseases, mites, spiders, nematodes and other animal or plant organisms found to be injurious, or likely to be or to become injurious, to any domesticated, cultivated, native or wild plant, or to the product of any such plant.

8. "Plant" or "crop" includes:

(a) Every kind of vegetation, whether wild or domesticated, and any part thereof of that vegetation, as well as seed, fruit or other another natural product of such that vegetation.

(b) Marijuana that is cultivated for medical use by a nonprofit medical marijuana dispensary or a designated caregiver.

9. "Shipment" includes anything that is brought into the this state or that is transported within the this state and that may be the host or may contain or carry or may be susceptible of containing, carrying or having present on, in or about it any plant pest or plant disease. END_STATUTE

Sec. 4. Subject to the requirements of article 10, part 1, section 1, Constitution of Arizona, section 3-231, Arizona Revised Statutes, is amended to read:

START_STATUTE3-231. Definitions

In this article, unless the context otherwise requires:

1. "Advertisement" means all representations, other than those on the label, made in any manner relating to seed within the scope of this article.

2. "Agricultural seed":

(a) Means the seeds of grass, forage, cereal, and fiber crops and any other kinds of seeds commonly recognized within this state as agricultural seeds, lawn seeds and mixtures of such seeds., and

(b) May include noxious-weed seeds when if the department determines that such the seed is being used as agricultural seed.

(c) Includes seeds of marijuana that is cultivated for medical use by a nonprofit medical marijuana dispensary or a designated caregiver.

3. "Cease and desist order" means an administrative order that is provided by law restraining the sale, use, disposition and movement of a definite amount of seed.

4. "Certified seed" or "registered seed" means seed that has been produced and labeled in accordance with the procedures and in compliance with the rules and regulations of an officially recognized seed-certifying agency.

5. "Custom application" means an application of pesticide to a seed by a pesticide applicator who that does not hold title to the seed.

6. "Dealer" means any person who that sells seed.

7. "Division" means the environmental services division of the Arizona department of agriculture.

8. "Established plant, warehouse, or place of business" means any permanent office headquarters maintained by an importer, broker, seller or authorized manufacturer's agent, or any permanent warehouse, building or structure in or from which a permanent business is operated, at which stocks of agricultural seed, vegetable seed or ornamental plant seed regulated by this article are sold, distributed, processed, mixed, stored or kept.

9. "Hybrid" means the first generation seed of a crossbreed that is produced by controlling pollination and by combining two or more inbred lines, or one inbred or a single crossbreed with an open pollinated variety, or two varieties or species, except open pollinated varieties of corn (zea mays). The second generation, or subsequent generations from such crosses, shall not be regarded as crosses. Hybrid designations shall be treated as variety names. Any kinds or varieties that have pure seed which that is less than ninety‑five per cent percent but more than seventy‑five per cent percent hybrid seed as a result of incompletely controlled pollination in a cross shall be labeled to show the percentage of pure seed that is hybrid seed, or shall be labeled with a statement such as "contains from seventy‑five per cent percent to ninety‑five per cent percent hybrid seed". No one kind of seed shall be labeled as hybrid if the pure seed contains less than seventy-five per cent percent hybrid seed.

10. "Inoculant" means a commercial preparation containing nitrogen‑fixing bacteria that is applied to seed.

11. "Kind" means one or more related species or subspecies which that singly or collectively are known by one common name, such as corn, oats, alfalfa and timothy.

12. "Label" means any label or other written, printed or graphic representations, in any form whatsoever, accompanying or pertaining to any seed whether in bulk or in containers and includes representations or invoices.

13. "Labeler" means any person whose name and address appear on the label pertaining to or attached to a lot or container of agricultural, vegetable or ornamental plant seed that is sold, offered for sale, exposed for sale or transported for sowing purposes.

14. "License" means an Arizona state seed license that is obtained from the department.

15. "Lot" means a definite quantity of seed that is identified by a lot number or other mark, every portion or bag of which is uniform within recognized tolerances for the factors which that appear in the labeling.

16. "Noxious-weed seeds" means "prohibited noxious-weed seeds" and "restricted noxious-weed seeds" as defined as follows and the following as listed in the rules adopted under this article: .

(a) "Prohibited noxious-weed seeds", which are the seeds of perennial or annual weeds which that, when established, are highly destructive and difficult to control by ordinary good cultural practice and the seed of which is prohibited by this article subject to recognized tolerances.

(b) "Restricted noxious-weed seeds", which are all noxious-weed seed not classified as prohibited noxious-weed seed.

17. "Ornamental plant seed" means the seed of any plant that is used for decorative or ornamental purposes and includes flower seed.

18. "Person" means any individual, partnership, corporation, company, society or association.

19. "Pure seed", "germination" and other seed labeling and testing terms in common usage shall be defined as in the federal seed act (53 Stat. 1275; 7 United States Code sections 1551 through 1611) and the rules and regulations promulgated under that act.

20. "Record" means all information relating to the shipment or shipments involved and includes a file sample of each lot of seed.

21. "Sell" means to offer for sale, expose for sale, possess for sale, exchange, barter or trade.

22. "Treated" means that the seed has received an application of a substance or process that is designed to reduce, control or repel certain disease organisms, insects or other pests attacking such seeds or seedlings growing from the seeds.

23. "Type" means either a group of varieties so similar that the individual varieties cannot be clearly differentiated except under special conditions or, when used with a variety name, seed of the variety named, which may be mixed with seed of other varieties of the same kind and of similar character. If type is designated, the designation may be associated with the name of the kind but in all cases shall be clearly associated with the word "type". If the type designation does not include a variety name, it shall include a name that describes a group of varieties of similar character, and the pure seed shall be at least ninety per cent percent of one or more varieties that all of which conform to the type designation.

24. "Variety" means a subdivision of a kind characterized by growth, yield, plant, fruit, seed or other characteristics by which it can be differentiated from other plants of the same kind.

25. "Vegetable seeds" means seeds of those crops which that are grown in gardens and on truck farms and that are generally known and sold under the name of vegetable seeds in this state.

26. "Weed seeds" means the seeds of all plants that are generally recognized as weeds within this state and includes noxious-weed seeds. END_STATUTE

Sec. 5. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 3-364, Arizona Revised Statutes, is amended to read:

START_STATUTE3-364. Inspection powers; notification requirements

A. The director may enter at reasonable times into or on or through any public or private property for the purpose of ascertaining compliance or noncompliance with any rules or orders adopted or issued under this article. If practicable, and if notice will not inhibit the director's ability to enforce this article, the director or the director's agent shall notify the owner, operator or lessee of the property when entering on the property.

B. The director may enter at reasonable times into or on a private property where marijuana is cultivated for medical use for the purpose of ascertaining compliance or noncompliance with any rules or orders adopted or issued under this title. If practicable, and if notice will not inhibit the director's ability to enforce this article, the director or the director's agent shall notify the nonprofit medical marijuana dispensary or the designated caregiver when entering on the property.

B. C. Within five days after the inspection the director shall inform any alleged violator in writing if the director anticipates an enforcement action. The notice of a potential enforcement action shall indicate the nature of the alleged violation and the last possible date for issuing a citation under section 3‑368, subsection F. If in the course of an investigation the department identifies any additional alleged violator, the director shall inform the additional alleged violator within five days of after initiating the new investigation. The notice of a potential enforcement action against the additional alleged violator shall indicate the nature of the alleged violation and the last possible date for issuing a citation or notice of de minimis violation under section 3‑368, subsection F. If the director does not issue a notice of a potential enforcement action, the director shall inform the alleged violator within fifteen days after the inspection that the director does not anticipate any enforcement action. END_STATUTE

Sec. 6. 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

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, for the purpose of protecting 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.

(d) Minimum security requirements for nonprofit medical marijuana dispensaries, including requirements for protection of 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 and nonprofit medical marijuana dispensary registration certificates, according to the following:

(a) The total amount of all fees shall generate revenues 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.

(d) The total amount of revenue from nonprofit medical marijuana dispensary application and renewal fees and registry identification card fees for nonprofit medical marijuana dispensary agents shall be sufficient to implement and administer the nonprofit medical marijuana dispensary provisions of 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 based on a qualifying patient's household income.

(f) (e) 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. END_STATUTE

Sec. 7. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2804.01, Arizona Revised Statutes, is amended to read:

START_STATUTE36-2804.01. Registration of nonprofit medical marijuana dispensary agents; notices; civil penalty; classification

A. A nonprofit medical marijuana dispensary agent shall be registered with the department before being employed by or volunteering or working at a nonprofit medical marijuana dispensary. A registered nonprofit medical marijuana dispensary agent may use that registration to be employed by or volunteer at any registered nonprofit medical marijuana dispensary that is owned by the same corporation and that has the same board of directors or the same principal officers. The registered nonprofit medical marijuana dispensary agent shall inform the department within ten days after beginning employment or volunteer work at a different nonprofit medical marijuana dispensary of the dispensary's name and location. A nonprofit medical marijuana dispensary agent may be employed or volunteer with a single registration at multiple nonprofit medical marijuana dispensaries that are owned by the same corporation with the same board of directors or the same principal officers.

B. A nonprofit medical marijuana dispensary may apply to the department for a registry identification card for a nonprofit medical marijuana dispensary agent by submitting:

1. The name, address and date of birth of the prospective nonprofit medical marijuana dispensary agent.

2. A nonprofit medical marijuana dispensary agent application.

3. A statement signed by the prospective nonprofit medical marijuana dispensary agent pledging not to divert marijuana to anyone who is not allowed to possess marijuana pursuant to this chapter.

4. The application fee.

C. A registered nonprofit medical marijuana dispensary shall notify the department within ten days after a nonprofit medical marijuana dispensary agent ceases to be employed by or volunteer at the registered nonprofit medical marijuana dispensary.

D. No A person who has been convicted of an excluded felony offense may not be a nonprofit medical marijuana dispensary agent.

E. The department may conduct a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92-544 in order to carry out this section. END_STATUTE

Sec. 8. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2806, Arizona Revised Statutes, is amended to read:

START_STATUTE36-2806. Registered nonprofit medical marijuana dispensaries; inspection; testing; requirements; immunity

A. A registered nonprofit medical marijuana dispensary shall be operated on a not-for-profit basis. The bylaws of a registered nonprofit medical marijuana dispensary shall contain such provisions relative to the disposition of revenues and receipts to establish and maintain its nonprofit character. A registered nonprofit medical marijuana dispensary need not be recognized as tax-exempt by the internal revenue service and is not required to incorporate pursuant to title 10, chapter 19, article 1.

B. The operating documents of a registered nonprofit medical marijuana dispensary shall include procedures for the oversight of the registered nonprofit medical marijuana dispensary and procedures to ensure accurate recordkeeping.

C. A registered nonprofit medical marijuana dispensary shall have a single secure entrance and shall implement appropriate security measures to deter and prevent the theft of marijuana and unauthorized entrance into areas containing marijuana.

D. A registered nonprofit medical marijuana dispensary is prohibited from acquiring, possessing, cultivating, manufacturing, delivering, transferring, transporting, supplying or dispensing marijuana for any purpose except to assist registered qualifying patients with the medical use of marijuana directly or through the registered qualifying patients' designated caregivers.

E. All cultivation of marijuana must take place in an enclosed, locked facility at a physical address provided to the department during the registration process, which can only be accessed by registered nonprofit medical marijuana dispensary agents who are associated in the registry with the nonprofit medical marijuana dispensary.

F. A registered nonprofit medical marijuana dispensary may acquire usable marijuana or marijuana plants from a registered qualifying patient or a registered designated caregiver only if the registered qualifying patient or registered designated caregiver receives no compensation for the marijuana.

G. A nonprofit medical marijuana dispensary shall not permit allow any person to consume marijuana on the property of a nonprofit medical marijuana dispensary.

H. Registered nonprofit medical marijuana dispensaries are subject to reasonable inspection by the department. The department shall:

1. Give reasonable notice of an inspection under this subsection.

2. Establish inspection protocols for nonprofit medical marijuana dispensaries that include the inspection of dispensary premises beginning June 1, 2019 for sanitary conditions for storing and processing medical marijuana and for the existence of mold in any building operated by the dispensary.

3. Establish remediation requirements for nonprofit medical marijuana dispensary premises where an inspection violation is found.

I. Beginning June 1, 2019, the department shall collect samples of each medical marijuana product being sold for testing to confirm that the product does not include mold, PATHOGENIC BACTERIA OR OTHER HARMFUL ADULTERANTS and is labeled correctly and that the disclosure document included with the product reflects any chemical used in producing the medical marijuana product and the actual contents of the product. The department may contract with a third‑party independent laboratory to collect and test the medical marijuana product samples. If a medical marijuana product is not labeled correctly or a disclosure document is not accurate based on the results of the testing, the product shall be returned to the nonprofit medical marijuana dispensary and shall be labeled correctly before being dispensed.

J. All medical marijuana products that are dispensed by a nonprofit medical marijuana dispensary shall be dispensed in childproof containers and have the registered qualifying patient's name and registry identification card number indicated on the label. The medical marijuana product shall include a written disclosure that lists all chemical compounds used during the cultivation of the product as tested pursuant to title 3.

K. Notwithstanding title 13, chapter 34, an employee of the department or an employee of any contracted third‑party testing facility may not be charged with or prosecuted for possession of any amount of marijuana that is cultivated for medical use and that the employee is using as a sample for testing as required by subsection I of this section and the rules adopted pursuant to that subsection.END_STATUTE

Sec. 9. Appropriation; Arizona department of agriculture; medical marijuana fund

A. The sum of $2,000,000 is appropriated from the medical marijuana fund established by section 36‑2817, Arizona Revised Statutes, in fiscal year 2018‑2019 to the Arizona department of agriculture for the purpose of regulating marijuana as an agricultural commodity.

B. The appropriation made in subsection A of this section is exempt from the provisions of section 35-190, Arizona Revised Statutes, relating to lapsing of appropriations.

Sec. 10. Department of agriculture; exemption from rulemaking

For the purposes of section 3-109.03, Arizona Revised Statutes, as added by this act, and sections 3-145, 3-201, 3-231 and 3-364, Arizona Revised Statutes, as amended by this act, the department of agriculture is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act.

Sec. 11. Short title

This act may be cited as the "Medical Marijuana Reform Act".

Sec. 12. Requirements for enactment; three-fourths vote

Pursuant to article IV, part 1, section 1, Constitution of Arizona, section 3‑109.03, Arizona Revised Statutes, as added by this act, sections 3‑145, 3‑201, 3‑231, 3‑364, 36‑2803, 36‑2804.01 and 36‑2806, Arizona Revised Statutes, as amended by this act, and section 10 of this act are effective only on the affirmative vote of at least three-fourths of the members of each house of the legislature.

Sec. 13. 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.