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 36-2850, Arizona Revised Statutes, is amended to read:
36-2850. 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 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 producer" means an entity that is licensed by the department to operate a single location at which the licensee may cultivate marijuana, process marijuana, 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.
23. 24. "Marijuana products product" means marijuana concentrate and products any product that are is composed of marijuana and other ingredients and that are is intended for use or consumption, including edible products, ointments and tinctures.
24. 25. "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. 26. "Nonprofit medical marijuana dispensary" has the same meaning prescribed in section 36-2801.
26. 27. "Nonprofit medical marijuana dispensary agent" has the same meaning prescribed in section 36-2801.
27. 28. "Open space" means a public park, public sidewalk, public walkway or public pedestrian thoroughfare.
28. 29. "Process" and "processing" mean to harvest, dry, cure, trim or separate parts of the marijuana plant.
29. 30. "Public place" has the same meaning prescribed in section 36-601.01.
30. 31. "Qualifying patient" has the same meaning prescribed in section 36-2801.
31. 32. "Smoke" means to inhale, exhale, burn, carry or possess any lighted marijuana or lighted marijuana products, whether natural or synthetic.
Sec. 2. 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, marijuana producers and marijuana testing facilities. Those rules shall include requirements for:
1. Licensing marijuana establishments, marijuana producers and marijuana testing facilities, including conducting investigations and background checks to determine eligibility for licensing for marijuana establishment, marijuana producer and marijuana testing facility applicants, except that:
(a) An application for a marijuana establishment license, marijuana producer 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 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.
(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) Beginning January 1, 2029, the department shall accept applications for marijuana producer licenses. Until January 1, 2032, the department shall accept applications only from entities that contracted on or before January 1, 2026 with a marijuana establishment, a nonprofit medical marijuana dispensary or a management company for a marijuana establishment or a nonprofit medical marijuana dispensary to have a right to cultivate marijuana or manufacture marijuana products and keep all or substantially all of the profits generated from that cultivation. Until January 1, 2032, the department shall prohibit the transfer or sublease of marijuana producer licenses and prohibit entities that lack a marijuana producer license from cultivating marijuana or manufacturing marijuana products at marijuana producer sites. Beginning in 2030, the department shall conduct an annual review of market conditions to determine whether consumers would benefit from the issuance of additional marijuana producer licenses. if market conditions are such that consumers would benefit from the issuance of additional marijuana producer licenses, the department shall issue an appropriate number of marijuana producer licenses during the year following the department's review. unless specifically identified in this chapter, the department shall not impose any restrictions or obligations on marijuana producers that are not imposed on marijuana establishments.
(g) (h) Licenses issued by the department to marijuana establishments, marijuana producers 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) (i) The department may not issue a marijuana establishment, marijuana producer or marijuana testing facility license to an applicant who has an ownership interest in an out-of-state marijuana establishment, marijuana producer 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, marijuana producers 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, marijuana producers and marijuana testing facilities.
4. Marijuana establishments and marijuana producers to safely cultivate, process and manufacture marijuana and marijuana products. 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, as applicable. 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 or marijuana producer.
(ii) The processing of marijuana and marijuana products by a marijuana establishment or marijuana producer.
(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, marijuana producer or related marijuana business entity or management company. The rules shall include prohibiting a marijuana establishment or marijuana producer 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 allowing 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 allow 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. The rules may not limit the distance between the delivery location and the originating designated retail location of the marijuana establishment.
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. The rules may not limit the number of vehicles that a marijuana establishment may use for delivery.
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 allow 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 or marijuana producers, either expressly or through requirements that make the operation of a marijuana establishment or marijuana producer 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 of health services 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, marijuana producers 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, marijuana producer or related marijuana business entity or management company.
2. A marijuana establishment or marijuana producer 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. 3. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2857, Arizona Revised Statutes, is amended to read:
36-2857. Localities; marijuana establishments, marijuana producers and marijuana testing facilities
A. A locality may:
1. Enact reasonable zoning regulations that limit the use of land for marijuana establishments, marijuana producers and marijuana testing facilities to specified areas.
2. Limit the number of marijuana establishments, marijuana producers or marijuana testing facilities, or 
both any combination thereof.
3. Prohibit marijuana establishments,
marijuana producers or marijuana testing facilities, or both any combination thereof.
4. Regulate the time, place and manner of marijuana establishment, marijuana producer and marijuana testing facility operations.
5. Establish reasonable restrictions on public signage regarding marijuana, marijuana establishments, marijuana producers and marijuana testing facilities.
6. Prohibit or restrict delivery within its the locality's jurisdiction.
B. A county may exercise its authority pursuant to
subsection A of this section only in unincorporated areas of the county.
C. A locality may not enact any ordinance, regulation or rule that:
1. Is more restrictive than a comparable ordinance, regulation or rule that applies to nonprofit medical marijuana dispensaries.
2. Makes the operation of a marijuana establishment, marijuana producer or marijuana testing facility unduly burdensome if the locality has not prohibited marijuana establishments, marijuana producers or marijuana testing facilities.
3. Conflicts with this chapter or rules adopted pursuant to this chapter.
4. Prohibits the transportation of marijuana by a marijuana establishment, marijuana producer or marijuana testing facility on public roads.
5. Restricts or interferes with the ability of a dual licensee or an entity eligible to become a dual licensee to operate a nonprofit medical marijuana dispensary and a marijuana establishment cooperatively at shared locations.
6. Except as expressly authorized by this
section or section 36-2851, prohibits or restricts any conduct or
transaction allowed by this chapter, or imposes any liability or penalty in
addition to that prescribed by this chapter for any conduct or transaction
constituting a violation of this chapter.
7. Allows a marijuana establishment to locate within five hundred feet of a public or private school, a child care facility or a facility that provides preschool programs.
Sec. 4. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2858, Arizona Revised Statutes, is amended to read:
36-2858. Lawful operation of marijuana establishments, marijuana producers and marijuana testing facilities
A. Except as specifically and expressly provided in section 36-2857 and notwithstanding any other law, it is lawful and is not an offense under the laws of this state or any locality, may not constitute the basis for detention, search or arrest, and may not constitute the sole basis for seizure or forfeiture of assets or the basis for imposing penalties under the laws of this state or any locality for:
1. A marijuana establishment, or an agent acting on behalf of a marijuana establishment, to:
(a) Possess marijuana or marijuana products.
(b) Purchase, sell or transport marijuana and marijuana products to or from a marijuana establishment or marijuana producer.
(c) Sell marijuana and marijuana products to consumers, except that a marijuana establishment may not sell more than one ounce of marijuana to a consumer in a single transaction, not more than five grams of which may be in the form of marijuana concentrate.
(d) Cultivate, produce, test or process marijuana or manufacture marijuana or marijuana products by any means, including chemical extraction or chemical synthesis.
2. An agent acting on behalf of a marijuana establishment to sell or otherwise transfer marijuana to an individual under twenty-one years of age, if the agent reasonably verified that the individual appeared to be twenty-one years of age or older by means of a government-issued photographic identification in compliance with rules adopted pursuant to section 36-2854, subsection A, paragraph 6.
3. A marijuana producer, or an agent acting on behalf of a marijuana producer, to:
(a) Possess marijuana or marijuana products.
(b) Purchase, sell or transport marijuana and marijuana products to or from a marijuana establishment or marijuana producer.
(c) Cultivate, produce, test or process marijuana or marijuana products by any means, including chemical extraction or chemical synthesis.
3. 4. A marijuana testing facility, or an agent acting on behalf of a marijuana testing facility, to obtain, possess, process, repackage, transfer, transport or test marijuana and marijuana products.
4. 5. A nonprofit medical marijuana dispensary or a marijuana establishment, or an agent acting on behalf of a nonprofit medical marijuana dispensary or a marijuana establishment, to sell or otherwise transfer marijuana or marijuana products to a nonprofit medical marijuana dispensary, a marijuana establishment or an agent acting on behalf of a nonprofit medical marijuana dispensary or a marijuana establishment.
5. 6. Any individual, corporation or other entity to sell, lease or otherwise allow property or goods that are owned, managed or controlled by the individual, corporation or other entity to be used for any activity authorized by this chapter, or to provide services to a marijuana establishment, or marijuana testing facility, or an agent acting on behalf of a marijuana establishment or marijuana testing facility, in connection with any activity authorized by this chapter.
B. This section does not preclude the department from imposing penalties against a marijuana establishment, marijuana producer or marijuana testing facility for failing to comply with this chapter or rules adopted pursuant to this chapter.
C. A marijuana establishment or marijuana producer may be owned or operated by a publicly traded company.
D. Notwithstanding any other law, a dual licensee:
1. May hold a marijuana establishment license and operate a marijuana establishment pursuant to this chapter.
2. May operate on a for-profit basis if the dual licensee promptly notifies the department and department of revenue and takes any actions necessary to enable its for-profit operation, including converting its corporate form and amending its organizational and operating documents.
3. Must continue to hold both its marijuana establishment license and nonprofit medical marijuana dispensary registration, regardless of any change in ownership of the dual licensee, unless it terminates its status as a dual licensee and forfeits either its marijuana establishment license or nonprofit medical marijuana dispensary registration by notifying the department of such a termination and forfeiture.
4. Is not required to:
(a) Employ or contract with a medical director.
(b) Obtain nonprofit medical marijuana dispensary agent or marijuana facility agent registrations for outside vendors that do not have regular, unsupervised access to the interior of the dual licensee's premises.
(c) Have a single secure entrance as required by section 36-2806, subsection C, but may be required to implement appropriate security measures to deter and prevent the theft of marijuana and to reasonably regulate customer access to the premises.
(d) Comply with any other provision of chapter 28.1 of this title or any rule adopted pursuant to chapter 28.1 of this title that makes its operation as a dual licensee unduly burdensome.
E. Notwithstanding any other law, a dual licensee that elects to operate on a for-profit basis pursuant to subsection D, paragraph 2 of this section:
1. Is subject to the taxes imposed pursuant to title 43.
2. Is not required to submit its annual financial statements or an audit report to the department for purposes of renewing its nonprofit medical marijuana dispensary registration.
F. Notwithstanding any other law, a dual licensee must conduct both of the following operations at a shared location:
1. Sell marijuana and marijuana products to consumers pursuant to this chapter.
2. Dispense marijuana to registered qualifying patients and registered designated caregivers pursuant to chapter 28.1 of this title.
G. Notwithstanding chapter 28.1 of this title or any rule adopted pursuant to chapter 28.1 of this title, a dual licensee may engage in any act, practice, conduct or transaction allowed for a marijuana establishment by this chapter.
H. Notwithstanding any other law:
1. An individual may be an applicant, principal officer or board member of more than one marijuana establishment or more than one dual licensee regardless of the establishment's location.
2. Two or more marijuana establishments, marijuana producers or dual licensees may designate a single off-site location as prescribed in section 36-2850, paragraph 21, subdivision (c) to be jointly used by those dual licensees, marijuana producers or marijuana establishments.
I. Marijuana establishments, marijuana producers, marijuana testing facilities and dual licensees that are subject to applicable federal or state antidiscrimination laws may not pay their employees differently based solely on a protected class status such as sex, race, color, religion, national origin, age or disability. This subsection does not expand or modify the jurisdictional reach, provisions or requirements of any applicable antidiscrimination law.
Sec. 5. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2859, Arizona Revised Statutes, is amended to read:
36-2859. Advertising; restrictions; warning; enforcement; civil penalty; exception
A. A marijuana establishment, marijuana producer or nonprofit medical marijuana dispensary may advertise or authorize advertising for marijuana or marijuana products in accordance with restrictions imposed by this section.
B. An individual or entity that sells marijuana paraphernalia may advertise or authorize advertising for marijuana paraphernalia in accordance with restrictions imposed by this section.
C. A marijuana establishment, a nonprofit medical marijuana dispensary or an individual or entity that sells marijuana paraphernalia may engage in advertising but may not do any of the following:
1. Advertise marijuana or marijuana products, including marijuana paraphernalia, to individuals who are under twenty-one years of age, including advertising:
(a) With names that resemble or imitate food or drink brands that are marketed to children.
(b) With images or likenesses of toys, cartoons or animated or fictional characters, including Santa Claus, that are designed to appeal to or encourage individuals who are under twenty-one years of age to consume marijuana or marijuana products.
(c) With images or visual representations of the consumption of marijuana or marijuana products.
(d) With the potency or tetrahydrocannabinol levels of the marijuana or marijuana product.
(e) In a medium that specifically appeals to individuals who are under twenty-one years of age such that the advertising has a special attractiveness to individuals who are under twenty-one years of age beyond general attractiveness for individuals who are at least twenty-one years of age.
2. Advertise at, on or within public airports, public transportation shelters, public buses, public trains, public shuttles or public trams.
3. Advertise electronically, via social media or on a website, unless at least 73.6 percent of the audience is expected to be at least twenty-one years of age.
4. Advertise any health-related statement or statement regarding the effects of marijuana consumption on health that is known to be untrue.
5. Sponsor any sporting event unless at least 73.6 percent of the audience is expected to be at least twenty-one years of age or the sponsored organization provides written approval. Any sponsorship acknowledgment shall be in accordance with restrictions imposed by this section.
D. All advertising pursuant to this section must contain the following conspicuous and legible warning: "Do not use marijuana if you are under twenty-one years of age or pregnant. Keep marijuana out of reach of children." All printed warnings must occupy at least ten percent of the advertising area and must be in black font on a white background, except that billboard advertisement warnings shall be in a type size that is at least ten percent of the largest type used in the advertisement.
E. A billboard advertisement under this section is prohibited within one thousand radial feet of any child care center, church, substance abuse recovery facility, public park, public playground or public or private school that provides instruction to students in preschool or kindergarten programs or any of grades one through twelve. An individual or entity that violates this subsection, on notification by the attorney general's office, has thirty days to comply with these requirements. For circumstances beyond the control of the billboard operator that may prevent removal within the prescribed time frame, the advertisement must be removed as soon as safely and legally practicable. An individual or entity that does not comply with this subsection is subject to the civil penalties and disciplinary action prescribed in this section.
F. An advertising platform may host advertising only if all of the following apply:
1. The advertising is authorized by a marijuana establishment, marijuana producer or nonprofit medical marijuana dispensary.
2. The advertising accurately and legibly identifies the marijuana establishment, marijuana producer or nonprofit medical marijuana dispensary responsible for the content of the advertising by name and license number or registration number.
3. The advertising contains a printed warning that complies with subsection D of this section.
G. Any advertising under this chapter involving direct, individualized communication or dialogue shall use a method of age affirmation to verify that the recipient is at least twenty-one years of age before engaging in that communication or dialogue. For the purposes of this subsection, that method of age affirmation may include user confirmation, birth date disclosure or other similar registration methods.
H. It is unlawful for an individual or entity other than a marijuana establishment or dual licensee to do any of the following in a manner that is not authorized by this chapter or rules adopted by the department pursuant to this chapter:
1. Facilitate the delivery of marijuana or marijuana products.
2. Solicit or accept orders for marijuana or marijuana products or operate a platform that solicits or accepts orders for marijuana or marijuana products.
3. Operate a listing service related to the sale or delivery of marijuana or marijuana products.
I. A marijuana establishment, a nonprofit medical marijuana dispensary or an individual or entity that sells marijuana paraphernalia and that violates this section, on notification by the department or attorney general's office, has fourteen days to comply with the requirements of this section.
J. A marijuana establishment or marijuana producer that is found to be in violation of this section by the attorney general is subject to disciplinary action by the department pursuant to section 36-2854, subsection B. A nonprofit medical marijuana dispensary that is found to be in violation of this section by the attorney general is subject to disciplinary action by the department pursuant to section 36-2816.
K. In addition to any other penalty imposed by law, an individual or entity other than a marijuana establishment, marijuana producer or nonprofit medical marijuana dispensary that advertises marijuana or marijuana products, including marijuana paraphernalia, in violation of this section or otherwise violates this section shall pay a civil penalty of $20,000 per violation to the smart and safe Arizona fund established by section 36-2856.
L. This section shall be enforced by the attorney general.
M. For the purposes of this section, advertising does not include a communication of a marijuana establishment or nonprofit medical marijuana dispensary that is targeted only to the established customer base or that is requested by a customer or potential customer pursuant to an opt-in with an age affirmation.
Sec. 6. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2860, Arizona Revised Statutes, is amended to read:
36-2860. Packaging; restrictions on particular marijuana products
A. A marijuana establishment or marijuana producer may not:
1. Package or label marijuana or marijuana products in a false or misleading manner.
2. Manufacture or sell marijuana products that resemble the form of a human, animal, insect, fruit, toy or cartoon.
3. Sell or advertise marijuana or marijuana products with names that resemble or imitate food or drink brands marketed to children, or otherwise advertise marijuana or marijuana products to children.
B. A marijuana establishment or marijuana producer that violates this section is subject to disciplinary action by the department pursuant to section 36-2854, subsection B.
Sec. 7. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2861, Arizona Revised Statutes, is amended to read:
36-2861. Contracts; professional services
A. It
is the public policy of this state that contracts related to marijuana
establishments, marijuana producers and marijuana testing
facilities are enforceable.
B. A person that is licensed, certified or registered by any department, agency or regulatory board of this state is not subject to disciplinary action by that entity for providing professional assistance to a prospective or registered licensed marijuana establishment, marijuana producer, marijuana testing facility or other person for any lawful activity under this chapter.
Sec. 8. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2864, Arizona Revised Statutes, is amended to read:
36-2864. Transaction privilege tax; use tax; additional taxes prohibited; exception
A. For the purposes of the
transaction privilege tax and use tax levied and collected pursuant to title
42, chapters 5 and 6, marijuana and marijuana products are tangible personal
property as defined in section 42-5001 and are
subject to the transaction privilege tax in the retail classification and use
tax.
B. Except as provided in subsection A of this section and section 42-5452, this state and localities may not levy or collect additional taxes of any kind on the sale of marijuana or marijuana products and may not levy or collect any fees or assessments of any kind on the sale of marijuana or marijuana products or on the licensing, operations or activities of marijuana establishments, marijuana producers or marijuana testing facilities, unless the fee or assessment is of general applicability to individuals or businesses that are not engaged in the sale of marijuana or marijuana products.
C. The prohibition imposed by subsection B of this section does not apply to uniform increases to the transaction privilege tax rate for the retail classification or use tax rate by this state or a locality or to uniform increases to fees or assessments allowed by subsection B of this section.
Sec. 9. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-2865, Arizona Revised Statutes, is amended to read:
36-2865. Enforcement of chapter; special action
A. If the department fails to adopt rules necessary to implement this chapter on or before June 1, 2021, or fails to begin accepting applications as provided in section 36-2854, subsection A, paragraph 1, subdivision (d), any citizen may commence a special action in superior court to compel the department to perform the actions mandated under this chapter.
B. If the department fails to issue a license or send a notice of denial within sixty days after receiving a complete marijuana establishment application pursuant to section 36-2854, subsection A, paragraph 1, subdivision (d), the applicant may commence a special action in superior court to compel the department to perform the actions mandated under this chapter.
C. Notwithstanding chapter 28.1 of this title, if the department fails to issue any marijuana establishment licenses pursuant to section 36-2854, subsection A, paragraph 1, subdivision (d) on or before April 5, 2021, each nonprofit medical marijuana dispensary in good standing may begin to cultivate, produce, process, manufacture, transport and test marijuana and marijuana products and may sell marijuana and marijuana products to consumers until the department issues licenses to operate marijuana establishments. If this occurs, nonprofit medical marijuana dispensaries in good standing shall:
1. Be treated as marijuana establishments for all purposes under this chapter, and their nonprofit medical marijuana establishment agents shall be treated as marijuana facility agents for all purposes under this chapter.
2. Comply with the rules adopted by the department to implement chapter 28.1 of this title, except those that are inconsistent with this chapter.
D. If the department fails to begin accepting applications as provided in section 36-2854, subsection A, paragraph 1, subdivision (g), any citizen may commence a special action in superior court to compel the department to perform the required actions.
Sec. 10. Requirements for enactment; three-fourths vote
Pursuant to article IV, part 1, section 1, Constitution of Arizona, sections 36-2850, 36-2854, 36-2857, 36-2858, 36-2859, 36-2860, 36-2861, 36-2864 and 36-2865, Arizona Revised Statutes, as amended by this act, are effective only on the affirmative vote of at least three-fourths of the members of each house of the legislature.