2023 New Mexico Statutes › Chapter 26 - Drugs and Cosmetics › Article 2C - Cannabis Regulation › Section 26-2C-3 - Division; powers and duties; rulemaking; advisory committee created; membership; duties.

A. The "cannabis control division" is created in the department to administer the Cannabis Regulation Act and the licensing provisions of the Lynn and Erin Compassionate Use Act [Chapter 26, Article 2B NMSA 1978] and rules promulgated in accordance with those acts. Rules shall be adopted and promulgated as provided in the State Rules Act [Chapter 14, Article 4 NMSA 1978].
B. 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 as follows:
(1) qualifications and procedures for licensure; provided that qualifications shall be directly and demonstrably related to the operation of the applicable cannabis establishment;
(2) security requirements for a cannabis establishment;
(3) requirements related to:
(a) inspection and monitoring of a cannabis establishment;
(b) a cannabis establishment's recordkeeping and tracking of cannabis from seed until sale;
(c) prevention of the sale or diversion of cannabis products in commercial cannabis activity to a person under the age of twenty-one;
(d) labeling of cannabis products packaged, sold or distributed by a cannabis establishment; and
(e) language for labels of cannabis products regarding potential adverse effects;
(4) rules providing that:
(a) a person who is twenty-one years old or older shall not purchase more than two ounces of cannabis, sixteen grams of cannabis extract and eight hundred milligrams of edible cannabis at one time; and
(b) as to commercial cannabis activity: 1) a consumer shall not possess more than two ounces of cannabis, sixteen grams of cannabis extract and eight hundred milligrams of edible cannabis outside the consumer's private residence; 2) any cannabis in excess of the amounts described in Item 1) of this subparagraph shall be stored in the person's residence and shall not be visible from a public place; and 3) the division shall not limit the amount of tetrahydrocannabinol concentration in a cannabis product; provided that the division may adopt requirements for apportionment and packaging of cannabis products;
(5) rules on advertising and marketing of cannabis products;
(6) rules on how a licensee may display cannabis products for sale;
(7) procedures that promote and encourage full participation in the cannabis industry governed by the Cannabis Regulation Act by representatives of communities that have been disproportionately harmed by rates of arrest through the enforcement of cannabis prohibitions in law and policy, rural communities likely to be impacted by cannabis production and agricultural producers from economically disadvantaged communities;
(8) procedures that promote and encourage racial, ethnic, gender and geographic diversity and New Mexico residency among license applicants, licensees and cannabis industry employees;
(9) rules for a certification process to identify cannabis products for consumers from integrated cannabis microbusinesses or cannabis producer microbusinesses or owned by representatives of communities that have been disproportionately harmed by rates of arrest through the enforcement of cannabis prohibitions in law and policy and underserved communities that include tribal, acequia, land grant-merced and other rural historic communities;
(10) in consultation with the economic development department, development of a technical assistance resource guide for rural New Mexico residents who are seeking to establish vertically integrated cannabis establishments, cannabis producer microbusinesses or integrated cannabis microbusinesses;
(11) in consultation with the department of environment, rules to establish:
(a) health and safety standards applicable to the research, production and manufacture of cannabis products;
(b) standards for food and product safety applicable to cannabis products; and
(c) which additives are approved for and prohibited from inclusion in cannabis products; provided that nicotine shall be prohibited;
(12) in consultation with the New Mexico department of agriculture and the department of environment, rules to establish standards for quality control, inspection and testing of cannabis products for potency and contaminants, except for cannabis produced or harvested for research purposes and not for ingestion; provided that all such rules and standards shall be consistent with the rules and standards for testing of medical cannabis products; and
(13) in consultation with the state fire marshal's office of the homeland security and emergency management department, rules with regard to health and safety.
C. No later than January 1, 2022, the division shall promulgate rules that are consistent with industry standards relating to cannabis training and education programs, including:
(1) qualifications and procedures for licensure; and
(2) physical security, cybersecurity and, if applicable, security of information collected under the federal Health Insurance Portability and Accountability Act of 1996 requirements.
D. No later than January 1, 2022, the division shall promulgate rules in consultation with the New Mexico department of agriculture, the department of environment and the office of the state engineer to establish:
(1) environmental protections; and
(2) protocols to ensure licensees' compliance with state and local laws and ordinances governing food and product safety, occupational health and safety, environmental impacts, natural resource protection, water use and quality, water supply, hazardous materials, pesticide use and wastewater discharge.
E. No later than January 1, 2022, the division shall adopt rules in consultation with the department of health to establish standards and determinations on requirements for reserving cannabis products for sale to qualified patients, primary caregivers and reciprocal participants.
F. The division shall collect and publish annually on the division's website, and present to the appropriate interim committee of the legislature, a report describing demographic data on license applicants, controlling persons and employees of cannabis establishments, including race, ethnicity, gender, age, residential status and whether the applicants, persons, employees or the locations where the cannabis products are produced, manufactured, sold, tested or researched are located in an underserved rural community, including tribal, acequia, land grant-merced or other rural historic communities.
G. The "cannabis regulatory advisory committee" shall be created no later than September 1, 2021. The committee shall advise the division on the development of rules pursuant to the Cannabis Regulation Act, including best practices and the promotion of economic and cultural diversity in licensing and employment opportunities and protection of public health and safety while ensuring a regulated environment for commercial cannabis activity that does not impose unreasonable barriers that would perpetuate, rather than reduce and eliminate, the illicit market for cannabis. A person appointed to the cannabis regulatory advisory committee shall not hold any ownership interest or investment in a licensed person pursuant to the Cannabis Regulation Act; provided that the superintendent may appoint a person who holds an ownership interest in a licensed person as a nonvoting member. The committee shall consist of the following members:
(1) the chief public defender or the chief public defender's designee;
(2) a district attorney appointed by the New Mexico district attorney association;
(3) a municipal police chief appointed by the New Mexico association of chiefs of police;
(4) a county sheriff appointed by the executive director of the New Mexico association of counties; and
(5) one member for each of the following groups or professional qualifications, appointed by the superintendent:
(a) a cannabis policy advocacy organization;
(b) a labor organization;
(c) a qualified patient;
(d) a state or local agency with relevant expertise as the director and the superintendent deem appropriate;
(e) an Indian nation, tribe or pueblo with relevant expertise as the director and the superintendent deem appropriate;
(f) expertise in public health;
(g) expertise in regulating commercial activity for adult-use intoxicating substances;
(h) expertise and experience in cannabis laboratory science;
(i) expertise in environmental science;
(j) expertise in small business development;
(k) expertise in water resources;
(l) expertise in other relevant areas as the director and the superintendent deem appropriate; and
(m) previous experience as a cannabis retailer, cannabis producer or cannabis manufacturer and who is a nonvoting member.
H. The cannabis regulatory advisory committee shall elect from among its members a chair and such other officers as it deems necessary. The committee shall meet at the call of the chair, the director or the superintendent. A majority of members currently serving constitutes a quorum for the conduct of business. Members shall serve at the pleasure of the superintendent.
I. Public voting members of the cannabis regulatory advisory committee are entitled to receive per diem and mileage as provided for state employees pursuant to the Per Diem and Mileage Act [10-8-1 through 10-8-8 NMSA 1978] and shall receive no other compensation, perquisite or allowance.
J. The division shall:
(1) monitor the supply and demand of cannabis products produced in New Mexico by licensees and present annually to the appropriate interim committee of the legislature the impacts of supply on illicit cannabis products markets and adequate supply of cannabis products for qualified patients and reciprocal participants;
(2) request the department of public safety to enforce the provisions of the Cannabis Regulation Act as deemed necessary; and
(3) undertake studies and conduct courses of instruction for division employees that will improve the operations of the division and advance its purposes.
History:
Laws 2021 (1st S.S.), ch. 4, § 3.
ANNOTATIONS
Effective dates.
— Laws 2021 (1st S.S.), ch. 4 contained no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, was effective June 29, 2021, 90 days after adjournment of the legislature.
Temporary provisions.
— Laws 2021 (1st S.S.), ch. 4, § 70 provided:
A. On June 29, 2021, all functions, personnel, money, appropriations, records, furniture, equipment and other property of the department of health's medical cannabis program that are not part of the department's medical cannabis registry powers and duties shall be transferred to the regulation and licensing department.
B. On June 29, 2021, all contractual obligations and other agreements of the department of health as they pertain to the department's medical cannabis program that are not part of the department's medical cannabis registry powers and duties are binding on the regulation and licensing department.
C. Statutory references to the department of health that pertain to the department's medical cannabis program that are not part of the department's medical cannabis registry powers and duties shall be deemed to be references to the cannabis control division of the regulation and licensing department.
D. On June 29, 2021, any unexpended or unencumbered balance in the medical cannabis fund is transferred to the cannabis regulation fund.
E. Except to the extent any administrative rules are inconsistent with the provisions of this act, any administrative rules adopted by an officer, agency or other entity whose responsibilities have been transferred pursuant to the provisions of this act to another officer, agency or other entity remain in force until amended by the officer, agency or other entity to which the responsibility for the adoption of the rules has been transferred. To the extent any administrative rules are inconsistent with the provisions of this act, such rules are null and void.
No provision of New Mexico law authorizes the secretary of state to convert a nonprofit corporation medical cannabis producer to a domestic profit corporation or a limited liability company.
— The Nonprofit Corporation Act (NCA), 53-8-1 to 53-8-99 NMSA 1978, provides that nonprofit corporations can undergo specific types of transformations, namely a merger or consolidation into another nonprofit corporation, and the Limited Liability Company Act (LLC Act), 53-19-1 to 53-19-74 NMSA 1978, contains specific references to conversions from one business entity type to another, namely a corporation, partnership or limited partnership may be converted to a limited liability company (LLC) or an LLC may be converted to a corporation, partnership or limited partnership, but no provision of the NCA, LLC Act, or other provision of New Mexico law provides for other types of entity transformations, such as a conversion of a nonprofit corporation to another type of business entity like a profit corporation or LLC. Accordingly, the secretary of state cannot convert previously licensed nonprofit corporation medical cannabis producers to domestic profit corporations or LLCs.
Conversion of Medical Cannabis Distributors Nonprofits
(8/27/21), Att'y Gen. Adv. Ltr. 2021-10.