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CSHB 59(HSS): "An Act relating to marijuana concentrates; relating to marijuana establishments and to the licensing of marijuana establishments; relating to alcoholic beverages and marijuana; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 59(HSS)                                                                     
01 "An Act relating to marijuana concentrates; relating to marijuana establishments and                                    
02 to the licensing of marijuana establishments; relating to alcoholic beverages and                                       
03 marijuana; and providing for an effective date."                                                                        
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
06 to read:                                                                                                                
07       LEGISLATIVE INTENT. It is the intent of the legislature in order to implement the                                 
08 marijuana initiative in an orderly process                                                                              
09            (1)  to focus on the provisions related to growth and sale of marijuana and                                  
10 licensing of marijuana establishments not later than November 24, 2015;                                                 
11            (2)  to delay regulations relating to legal manufacture, delivery, possession,                               
12 possession with the intent to manufacture or deliver, sale, packaging, or display of marijuana                          
13 concentrates to not later than November 24, 2016, in response to the difficulties other                                 
14 jurisdictions have found in unintended consequences of regulations permitting marijuana                                 
01 concentrates; and                                                                                                       
02            (3)  during the period of the delay, that activities related to marijuana                                    
03 concentrates remain illegal and may form the basis for revocation of an establishment license                           
04 or for seizure or forfeiture of assets under state law.                                                                 
05    * Sec. 2. AS 04.16 is amended by adding a new section to read:                                                     
06            Sec. 04.16.165. Restriction on sale of marijuana on licensed premises. A                                   
07       licensee may not sell, offer for sale, furnish, or deliver marijuana on licensed premises.                        
08    * Sec. 3. AS 17.38.070(a) is amended to read:                                                                      
09            (a)  The [NOTWITHSTANDING ANY OTHER PROVISION OF LAW,                                                    
10       THE] following acts, when performed by a retail marijuana store with a current, valid                             
11       license [REGISTRATION], or a person 21 years of age or older who is acting in the                             
12       person's capacity as an owner, employee, or agent of a retail marijuana store, are                                
13       lawful and are [SHALL] not offenses [BE AN OFFENSE] under Alaska law or [BE]                              
14       a basis for seizure or forfeiture of assets under Alaska law:                                                     
15                 (1)  possessing, displaying, storing, or transporting marijuana or                                      
16       marijuana products, except that marijuana and marijuana products may not be                                       
17       displayed in a manner that is visible to the general public from a public right-of-way;                           
18                 (2)  delivering or transferring marijuana or marijuana products to a                                    
19       marijuana testing facility;                                                                                       
20                 (3)  receiving marijuana or marijuana products from a marijuana testing                                 
21       facility;                                                                                                         
22                 (4)  purchasing marijuana from a marijuana cultivation facility;                                        
23                 (5)  purchasing marijuana or marijuana products from a marijuana                                        
24       product manufacturing facility; and                                                                               
25                 (6)  delivering, distributing, or selling marijuana or marijuana products                               
26       to consumers.                                                                                                     
27    * Sec. 4. AS 17.38.070(b) is amended to read:                                                                      
28            (b)  The [NOTWITHSTANDING ANY OTHER PROVISION OF LAW,                                                    
29       THE] following acts, when performed by a marijuana cultivation facility with a                                    
30       current, valid license [REGISTRATION], or a person 21 years of age or older who is                            
31       acting in the person's capacity as an owner, employee, or agent of a marijuana                                    
01       cultivation facility, are lawful and are [SHALL] not offenses [BE AN OFFENSE]                             
02       under Alaska law or [BE] a basis for seizure or forfeiture of assets under Alaska law:                            
03                 (1)  cultivating, manufacturing, harvesting, processing, packaging,                                     
04       transporting, displaying, storing, or possessing marijuana;                                                       
05                 (2)  delivering or transferring marijuana to a marijuana testing facility;                              
06                 (3)  receiving marijuana from a marijuana testing facility;                                             
07                 (4)  delivering, distributing, or selling marijuana to a marijuana                                      
08       cultivation facility, a marijuana product manufacturing facility, or a retail marijuana                           
09       store;                                                                                                            
10                 (5)  receiving or purchasing marijuana from a marijuana cultivation                                     
11       facility; and                                                                                                     
12                 (6)  receiving marijuana seeds or immature marijuana plants from a                                      
13       person 21 years of age or older.                                                                                  
14    * Sec. 5. AS 17.38.070(c) is amended to read:                                                                      
15            (c)  The [NOTWITHSTANDING ANY OTHER PROVISION OF LAW,                                                    
16       THE] following acts, when performed by a marijuana product manufacturing facility                                 
17       with a current, valid license [REGISTRATION], or a person 21 years of age or older                            
18       who is acting in the person's capacity as an owner, employee, or agent of a marijuana                             
19       product manufacturing facility, are lawful and are [SHALL] not offenses [BE AN                            
20       OFFENSE] under Alaska law or [BE] a basis for seizure or forfeiture of assets under                               
21       Alaska law:                                                                                                       
22                 (1)  packaging, processing, transporting, manufacturing, displaying, or                                 
23       possessing marijuana or marijuana products;                                                                       
24                 (2)  delivering or transferring marijuana or marijuana products to a                                    
25       marijuana testing facility;                                                                                       
26                 (3)  receiving marijuana or marijuana products from a marijuana testing                                 
27       facility;                                                                                                         
28                 (4)  delivering or selling marijuana or marijuana products to a retail                                  
29       marijuana store or a marijuana product manufacturing facility;                                                    
30                 (5)  purchasing marijuana from a marijuana cultivation facility; and                                    
31                 (6)  purchasing of marijuana or marijuana products from a marijuana                                     
01       product manufacturing facility.                                                                                   
02    * Sec. 6. AS 17.38.090(a) is amended to read:                                                                      
03            (a)  Not later than nine months after February 24, 2015, the board shall adopt                               
04       regulations necessary for implementation of this chapter. The [SUCH] regulations                              
05       may [SHALL] not prohibit the operation of marijuana establishments, either expressly                          
06       or through regulations that make their operation unreasonably impracticable. The                              
07       [SUCH] regulations must [SHALL] include                                                                       
08                 (1)  procedures for the issuance, renewal, suspension, and revocation of                                
09       a license [REGISTRATION] to operate a marijuana establishment; the [, WITH                                
10       SUCH] procedures are subject to all requirements of AS 44.62 (Administrative                                  
11       Procedure Act);                                                                                                   
12                 (2)  a schedule of application, license [REGISTRATION], and renewal                                 
13       fees, provided, application fees may [SHALL] not exceed $5,000, with this upper                               
14       limit adjusted annually for inflation, unless the board determines a greater fee is                               
15       necessary to carry out its responsibilities under this chapter;                                                   
16                 (3)  qualifications for licensure [REGISTRATION] that are directly                                  
17       and demonstrably related to the operation of a marijuana establishment;                                           
18                 (4)  security requirements for marijuana establishments, including for                                  
19       the transportation of marijuana by marijuana establishments;                                                      
20                 (5)  requirements to prevent the sale or diversion of marijuana and                                     
21       marijuana products to persons under [THE AGE OF] 21 years of age;                                             
22                 (6)  labeling requirements for marijuana and marijuana products sold or                                 
23       distributed by a marijuana establishment;                                                                         
24                 (7)  health and safety regulations and standards for the manufacture of                                 
25       marijuana products and the cultivation of marijuana;                                                              
26                 (8)  reasonable restrictions on the advertising and display of marijuana                                
27       and marijuana products; and                                                                                       
28                 (9)  civil penalties for the failure to comply with regulations made                                    
29       under [PURSUANT TO] this chapter.                                                                             
30    * Sec. 7. AS 17.38.090 is amended by adding a new subsection to read:                                              
31            (c)  The board shall adopt regulations governing the manufacture, delivery,                                  
01       possession, possession with intent to manufacture or deliver, use, or display of                                  
02       marijuana concentrates. At a minimum, the regulations must include labeling and                                   
03       packaging requirements. The regulations may include                                                               
04                 (1)  prohibitions on combining marijuana concentrates with other                                        
05       addictive substances; or                                                                                          
06                 (2)  requirements to certify new products before they are available for                                 
07       retail.                                                                                                           
08    * Sec. 8. AS 17.38.100(a) is amended to read:                                                                      
09            (a)  Each application or renewal application for a license [REGISTRATION]                                
10       to operate a marijuana establishment shall be submitted to the board. A renewal                                   
11       application may be submitted up to 90 days before [PRIOR TO] the expiration of the                            
12       marijuana establishment's license [REGISTRATION].                                                             
13    * Sec. 9. AS 17.38.100(c) is amended to read:                                                                      
14            (c)  Upon receiving an application or renewal application for a marijuana                                    
15       establishment, the board shall immediately forward a copy of each application and half                            
16       of the license [REGISTRATION] application fee to the local regulatory authority for                           
17       the local government in which the applicant desires to operate the marijuana                                      
18       establishment, unless the local government has not designated a local regulatory                                  
19       authority under [PURSUANT TO] AS 17.38.110(c).                                                                
20    * Sec. 10. AS 17.38.100(d) is amended to read:                                                                     
21            (d)  Within [45 TO] 90 days after receiving an application or renewal                                        
22       application, the board shall issue an annual license [REGISTRATION] to the                                    
23       applicant unless the board finds the applicant is not in compliance with regulations                              
24       enacted under [PURSUANT TO] AS 17.38.090 or the board is notified by the                                      
25       relevant local government that the applicant is not in compliance with ordinances and                             
26       regulations adopted under [MADE PURSUANT TO] AS 17.38.110 and in effect at                                    
27       the time of application.                                                                                          
28    * Sec. 11. AS 17.38.100(e) is amended to read:                                                                     
29            (e)  If a local government has enacted a numerical limit on the number of                                    
30       marijuana establishments and a greater number of applicants seek licensure                                    
31       [REGISTRATIONS], the board shall solicit and consider input from the local                                        
01       regulatory authority as to the local government's preference or preferences for                                   
02       licensing [REGISTRATION].                                                                                     
03    * Sec. 12. AS 17.38.100(g) is amended to read:                                                                     
04            (g)  Every marijuana establishment license must [REGISTRATION SHALL]                                     
05       specify the location where the marijuana establishment will operate. A separate                                   
06       license is [REGISTRATION SHALL BE] required for each location at which a                                      
07       marijuana establishment operates.                                                                                 
08    * Sec. 13. AS 17.38.100 is amended by adding new subsections to read:                                              
09            (i)  A license issued under this section does not authorize a marijuana                                      
10       establishment to manufacture, deliver, possess, possess with intent to manufacture or                             
11       deliver, or display marijuana concentrates or products containing marijuana                                       
12       concentrates.                                                                                                     
13            (j)  The board may by regulation establish different types of licenses or license                            
14       endorsements.                                                                                                     
15            (k)  A marijuana retail store license issued under this section does not authorize                           
16       the sale, offering for sale, furnishing, or delivery of alcoholic beverages on licensed                           
17       premises.                                                                                                         
18            (l)  A license issued to a marijuana product manufacturing facility does not                                 
19       authorize a marijuana product manufacturing facility to combine marijuana with                                    
20       tobacco, nicotine, or alcohol, or a product containing tobacco, nicotine, or alcohol.                             
21    * Sec. 14. AS 17.38.110(c) is amended to read:                                                                     
22            (c)  A local government may designate a local regulatory authority that is                                   
23       responsible for processing applications submitted for a license [REGISTRATION] to                             
24       operate a marijuana establishment within the boundaries of the local government. The                              
25       local government may provide that the local regulatory authority may issue licenses if                        
26       [SUCH REGISTRATIONS SHOULD] the issuance by the local government become                                           
27       necessary because of a failure by the board to adopt regulations under [PURSUANT                              
28       TO] AS 17.38.090 or to accept or process applications under [IN ACCORDANCE                                    
29       WITH] AS 17.38.100.                                                                                               
30    * Sec. 15. AS 17.38.110(d) is amended to read:                                                                     
31            (d)  A local government may establish procedures for the issuance, suspension,                               
01       and revocation of a license [REGISTRATION] issued by the local government in                                  
02       accordance with (f) [OF THIS SECTION] or (g) of this section. These procedures                                    
03       shall be subject to all requirements of AS 44.62 (Administrative Procedure Act).                                  
04    * Sec. 16. AS 17.38.110(e) is amended to read:                                                                     
05            (e)  A local government may establish a schedule of annual operating,                                        
06       licensing [REGISTRATION], and application fees for marijuana establishments. The                          
07       [, PROVIDED, THE] application fee is [SHALL ONLY BE] due only if an                                       
08       application is submitted to a local government in accordance with (f) of this section,                        
09       and a license [REGISTRATION] fee is [SHALL ONLY BE] due only if a license                         
10       [REGISTRATION] is issued by a local government in accordance with (f) [OF THIS                                    
11       SECTION] or (g) of this section.                                                                                  
12    * Sec. 17. AS 17.38.110(f) is amended to read:                                                                     
13            (f)  If the board does not issue a license [REGISTRATION] to an applicant                                
14       within 90 days after [OF] receipt of the application filed in accordance with                                 
15       AS 17.38.100 and does not notify the applicant of the specific, permissible reason for                            
16       its denial, in writing and within that [SUCH] time period, or if the board has adopted                        
17       regulations under [PURSUANT TO] AS 17.38.090 and has accepted applications                                    
18       under [PURSUANT TO] AS 17.38.100 but has not issued any licenses                                          
19       [REGISTRATIONS] by 15 months after the effective date of this Act, the applicant                                  
20       may resubmit its application directly to the local regulatory authority under [,                              
21       PURSUANT TO] (c) of this section, and the local regulatory authority may issue an                                 
22       annual license [REGISTRATION] to the applicant. If an application is submitted to a                           
23       local regulatory authority under this subsection, the board shall forward to the local                            
24       regulatory authority the application fee paid by the applicant to the board upon request                          
25       by the local regulatory authority.                                                                                
26    * Sec. 18. AS 17.38.110(g) is amended to read:                                                                     
27            (g)  If the board does not adopt regulations required by AS 17.38.090, an                                    
28       applicant may submit an application directly to a local regulatory authority after [ONE                           
29       YEAR AFTER] February 24, 2016, [2015] and the local regulatory authority may                                  
30       issue an annual license [REGISTRATION] to the applicant.                                                      
31    * Sec. 19. AS 17.38.110(h) is amended to read:                                                                     
01            (h)  A local regulatory authority issuing a license [REGISTRATION] to an                                 
02       applicant shall do so within 90 days after [OF] receipt of the submitted or resubmitted                       
03       application unless the local regulatory authority finds and notifies the applicant that                           
04       the applicant is not in compliance with ordinances and regulations made under                                 
05       [PURSUANT TO] (b) of this section in effect at the time the application is submitted                              
06       to the local regulatory authority. The local government shall notify the board if an                              
07       annual license [REGISTRATION] has been issued to the applicant.                                               
08    * Sec. 20. AS 17.38.110(i) is amended to read:                                                                     
09            (i)  A license [REGISTRATION] issued by a local government in accordance                                 
10       with (f) [OF THIS SECTION] or (g) of this section has [SHALL HAVE] the same                                   
11       force and effect as a license [REGISTRATION] issued by the board in accordance                                
12       with AS 17.38.100. The holder of a license is [SUCH REGISTRATION SHALL] not                                   
13       [BE] subject to regulation or enforcement by the board during the term of that license                        
14       [REGISTRATION].                                                                                                   
15    * Sec. 21. AS 17.38.110(j) is amended to read:                                                                     
16            (j)  A subsequent or renewed license [REGISTRATION] may be issued under                                  
17       (f) of this section on an annual basis only upon resubmission to the local government                             
18       of a new application submitted to the board under [PURSUANT TO] AS 17.38.100.                                 
19    * Sec. 22. AS 17.38.110(k) is amended to read:                                                                     
20            (k)  A subsequent or renewed license [REGISTRATION] may be issued under                                  
21       (g) of this section on an annual basis if the board has not adopted regulations required                          
22       by AS 17.38.090 at least 90 days before [PRIOR TO] the date on [UPON] which the                       
23       [SUCH] subsequent or renewed license [REGISTRATION] would be effective or if                                  
24       the board has adopted regulations under [PURSUANT TO] AS 17.38.090 but has not,                               
25       at least 90 days after the adoption of the [SUCH] regulations, issued licenses under                      
26       [REGISTRATIONS PURSUANT TO] AS 17.38.100.                                                                         
27    * Sec. 23. AS 17.38.900 is amended by adding a new paragraph to read:                                              
28                 (15)  "marijuana concentrates" means an oil, liquid, or other substance                                 
29       created by extracting cannabinoids from marijuana for the purpose of increasing the                               
30       strength or proportion of the cannabinoids.                                                                       
31    * Sec. 24. AS 43.61.030(b) is amended to read:                                                                     
01            (b)  If a marijuana cultivation facility fails to pay the tax to the state, the                          
02       marijuana cultivation facility's license [REGISTRATION] may be revoked in                                     
03       accordance with procedures established under AS 17.38.090(a)(1).                                                  
04    * Sec. 25. AS 17.38.100(i) is repealed on the earlier of the following:                                            
05            (1)  November 24, 2016; or                                                                                   
06            (2)  the date the director of the Alcoholic Beverage Control Board notifies the                              
07 revisor of statutes that regulations adopted under AS 17.38.090(c) have taken effect.                                   
08    * Sec. 26. This Act takes effect immediately under AS 01.10.070(c).