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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: COM DPA 9-1-0-1 | Third Read 32-19-8-0-1Senate: HHS W/D | RAGE DPA 6-1-0-0 | Third Read 24-2-4-0-0Final Read: 39-17-3-1-0 | Chapter: 124 |
HB4001: alternative nicotine products; regulation.
Sponsor: Representative Weninger, LD 13
Signed by the Governor
Overview
Establishes licensure requirements for the manufacture or distribution of alternative nicotine products.
History
The U.S. Food and Drug Administration (FDA) is responsible for protecting public health by ensuring the safety, efficacy and security of human drugs, biological products, medical devices and food supply. Additionally, the FDA maintains specific authority to oversee the distribution, sale and consumption of tobacco and nicotine products (21 U.S.C. § 387a).
The Prevent All Cigarette Trafficking (PACT) act mandates that any person shipping tobacco or nicotine products into Arizona for profit must register their business with the U.S. Attorney General and the Arizona Department of Revenue and submit monthly invoices of the products delivered (15 U.S.C. § 376).
The Department of Liquor Licenses and Control (DLLC), which consists of the State Liquor Board and the Office of the Director of the Department regulates the manufacture, distribution and sale of liquor in this state through the issuance of 21 license types or series. The Director (Director) of the DLLC is responsible for adopting administrative rules, ensuring licensee compliance, overseeing a specialized investigations unit and initiating regulatory actions to ensure public safety and the integrity of the marketplace (A.R.S. § 4-112).
Statute classifies knowingly selling or furnishing tobacco or vapor products to an individual under the age of 21 as a petty offense. Any person under the age of 21 who purchases or possesses these products is also guilty of a petty offense. Tobacco product applies to cigars, cigarettes or cigarette papers and smoking and chewing tobacco. Vapor product applies to noncombustible, tobacco-derived products using a heating element or battery to heat a liquid nicotine solution (A.R.S. § 13-3622).
Provisions
Director Responsibilities
1. Requires the Director to partner with DPS and local law enforcement to enforce laws against the sale or possession of alternative nicotine products by persons under the age of 21. (Sec. 3)
2. Adds that DLLC's investigations unit must investigate licensees alleged to have sold or distributed alternative nicotine products to persons under the age of 21. (Sec. 3)
3. Authorizes the Director to:
a. remove contaminated alternative nicotine products from the marketplace;
b. issue and enforce cease and desist orders against any person or entity that sells, distributes or manufactures alternative nicotine products without an appropriate license or permit;
c. accept and expend private grants for conducting education programs on the repercussions of the sale, use or possession of alternative nicotine products by persons under the age of 21; and
d. visit during occupied hours and inspect the premises of an alternative nicotine products licensee. (Sec. 3, 4)
Alternative Nicotine Products; Distributor License
4. Prohibits an individual, beginning January 1, 2028, from distributing alternative nicotine products for sale in Arizona without a license. (Sec. 8)
5. Specifies alternative nicotine products offered for sale must only be provided by a licensed manufacturer and must meet outlined requirements. (Sec. 8)
6. Provides citizenship and residency requirements for applicants for an alternative nicotine product distributor license. (Sec. 8)
7. Requires applicants that are a corporation or limited liability company to be qualified to do business in this state. (Sec. 8)
8. Requires applicants to hold a license that is issued to a corporation, limited liability company, partnership or out-of-state license through an agent who is a natural person. (Sec. 8)
9. Instructs applicants to file a license application on a form prescribed by the director and contain specified information. (Sec. 8)
10. Directs DLLC to issue a distributor license to qualified applicants 105 days of filing the application. (Sec. 8)
11. Provides requirements for a designated manager. (Sec. 8)
12. Outlines license issuance restrictions relating to applicants who have had a license revoked or have been convicted of a felony. (Sec. 8)
13. Allows applicants to appeal a license denial to the State Liquor Board. (Sec. 8)
14. Allows the Director to establish a fee for an alternative nicotine products distributor license. (Sec. 8)
15. Specifies the license is valid for one year. (Sec. 8)
16. Requires the license to be annually renewed with applicable late renewal penalty fees. (Sec. 8)
18. Subjects a person who distributes alternative nicotine products for sale without a license to a class 5 felony and:
a. must pay a fine of at least $10,000;
b. may not sell, give or furnish products for a period of one year; and
c. is subject to any other punishment deemed appropriate by the court. (Sec. 8)
20. Requires the court, on adjudication of a criminal proceeding, to order alternative nicotine products that are deemed contraband to be destroyed as a term of the disposition of the criminal proceeding. (Sec. 8)
21. Specifies all receipts derived from distributor license applications are appropriated to DLLC. (Sec. 8)
22. Instructs DLLC to deposit monies received in accordance with distributor licensure into the Liquor Licenses Fund. (Sec. 8)
23. Requires the amount deposited in the Liquor Licenses Fund to be without regard to the amount that is appropriated to DLLC by the Legislature. (Sec. 8)
Alternative Nicotine Products; Manufacturer License
24. Prohibits an individual, beginning January 1, 2028, from manufacturing alternative nicotine products for sale in Arizona without a license. (Sec. 8)
25. Provides requirements for licensed manufacturers for selling alternative nicotine products. (Sec. 8)
26. Provides citizenship and residency requirements for applicants for an alternative nicotine product manufacturer license. (Sec. 8)
27. Requires applicants that are a corporation or limited liability company to be qualified to do business in this state. (Sec. 8)
28. Requires applicants to hold a license that is issued to a corporation, limited liability company, partnership or out-of-state license through an agent who is a natural person. (Sec. 8)
29. Instructs applicants to file a license application on a form prescribed by the director and contain specified information. (Sec. 8)
30. Allows applicants to provide to DLLC an updated product catalog while the application is pending approval. (Sec. 8)
31. Adds that the submittal of an updated product catalog is supplementary, does not render an application incomplete and does not affect the validity of a license. (Sec. 8)
32. Directs DLLC to issue a manufacturer license to qualified applicants within 105 days of filing the application. (Sec. 8)
33. Requires the application to contain a specified notarized attestation that is signed under penalty of perjury that for each alternative nicotine product that is identified in the manufacturer's product catalog. (Sec. 8)
34. Provides requirements for a designated manager. (Sec. 8)
35. Outlines license issuance restrictions relating to applicants who have had a license revoked or have been convicted of a felony. (Sec. 8)
36. Allows applicants to appeal a license denial to the State Liquor Board. (Sec. 8)
37. Allows the Director to establish a fee for an alternative nicotine products manufacturer license. (Sec. 8)
38. Specifies the license is valid for one year. (Sec. 8)
39. Requires the license to be annually renewed with applicable late renewal penalty fees. (Sec. 8)
40. Instructs a licensee to pay an annual fee, in an amount as determined by the director, for each stockkeeping unit of each alternative nicotine product that the licensee will manufacture and that is for sale in this state. (Sec. 8)
41. Specifies a license to distribute alternative nicotine products for sale is not transferrable and may not be leased or subleased. (Sec. 8)
42. Allows DLLC to conduct a compliance audit. (Sec. 8)
43. Allows DLLC to request a notarized attestation that the manufacturer licensee's products that are sold in Arizona were imported in conformity with all U.S. customs and border requirements, whether the notarized attestation was provided by the manufacturer or another entity. (Sec. 8)
44. Subjects a person who manufacturers alternative nicotine products for sale without a license to a class 5 felony and:
a. must pay a fine of at least $10,000;
b. may not sell, give or furnish products for a period of one year; and
c. is subject to any other punishment deemed appropriate by the court. (Sec. 8)
45. Allows unlawfully manufactured alternative nicotine products to be deemed contraband and seized as evidence in a criminal proceeding. (Sec. 8)
46. Requires the court, on adjudication of a criminal proceeding, to order alternative nicotine products that are deemed contraband to be destroyed as a term of the disposition of the criminal proceeding. (Sec. 8)
47. Specifies all receipts derived from manufacturer license applications are appropriated to DLLC. (Sec. 8)
48. Instructs DLLC to deposit monies received in accordance with manufacturer licensure into the Liquor Licenses Fund. (Sec. 8)
49. Requires the amount deposited in the Liquor Licenses Fund to be without regard to the amount that is appropriated to DLLC by the Legislature. (Sec. 8)
Alternative Nicotine Products Marketing
50. Prohibits a person from marketing, advertising or selling alternative nicotine products in containers that:
a. depict a cartoon character that mimics a character primarily aimed at entertaining;
b. mimic a trademark of a product or includes a symbol that is primarily marketed to minors;
c. include the image or name of a celebrity; or
d. are meant to disguise the appearance of the alternative nicotine product. (Sec. 8)
51. Stipulates alternative nicotine products unlawfully sold or offered for sale may be deemed contraband and subject to seizure and destruction. (Sec. 8)
52. Classifies a violation of the marketing restrictions as a class 3 misdemeanor. (Sec. 8)
Sale and Identification Requirements
53. Requires the retailer questioning whether an individual purchasing, attempting to purchase or procuring an alternative nicotine product is under the age of 21 to:
a. demand and review the validity of the identification; and
b. confirm the photograph and date of birth of the individual. (Sec. 8)
54. Outlines the written instruments that constitute the only acceptable forms of identification. (Sec. 8)
Licensure Revocation, Suspension
55. Outlines the grounds allowing the director to suspend, revoke or refuse to renew a distributor or manufacturer of alternative notice products license. (Sec. 8)
Tobacco Product Violations
56. Requires the court to order a person or enterprise that violates tobacco age purchasing and furnishing requirements to attend a court-approved tobacco retailer education course and pay a fine of at least $500, but not more than $750. (Sec. 9)
57. Establishes escalating criminal penalties and sales bans for enterprises that commit multiple violations at the same location within 24 months. (Sec. 9)
58. Stipulates, for enterprises ordered to attend a tobacco retailer educational course, the persons who must attend the course. (Sec. 9)
Miscellaneous
59. Makes it unlawful, beginning January 1, 2028, for a retailer of alternative nicotine products to purchase the products from an unlicensed distributor or an unlicensed manufacturer of alternative nicotine products. (Sec. 7)
60. Replaces vapor products with alternative nicotine products to statutory provisions relating to unlawfully furnishing tobacco products to underage persons and possessing, accepting or receiving tobacco products. (Sec. 9, 10)
61. Defines alternative nicotine product as any noncombustible product that contains nicotine and that is intended for human consumption, whether chewed, absorbed, dissolved, ingested, inhaled or consumed by any other means. (Sec. 2)
62. Excludes, as an alternative nicotine product, tobacco products or any product regulated as a drug or device by the FDA. (Sec. 2)
63. Includes a definition of nicotine and retailer of alternative nicotine products. (Sec. 2)
64. Includes a delayed effective date. (Sec. 11)
65. Makes technical and conforming changes. (Sec. 1-7)
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69. Initials PB HB 4001
70. 2/4/2026 Page 0 Signed by the Governor
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