2021 -- S 0568 SUBSTITUTE A

========

LC002305/SUB A/3

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

____________

A N   A C T

RELATING TO FOOD AND DRUGS -- CANNABIS AUTHORIZATION, REGULATION

AND TAXATION

     Introduced By: Senators Miller, McCaffrey, Goodwin, Ruggerio, Coyne, Felag, Euer,
Sosnowski, Pearson, and Acosta

     Date Introduced: March 09, 2021

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 21 of the General Laws entitled "FOOD AND DRUGS" is hereby

amended by adding thereto the following chapter:

CHAPTER 28.11

THE CANNABIS AUTHORIZATION, REGULATION AND TAXATION ACT

     21-28.11-1. Short title.

     This chapter shall be known and may be cited as the "Cannabis Authorization, Regulation

and Taxation Act".

     21-28.11-2. Legislative intent.

     It is the intent of the general assembly in enacting this chapter to do the following:

     (1) To regulate cannabis in order to more effectively limit minors' access to cannabis.

     (2) To reduce criminal activity and violence associated with illegal cannabis cultivation,

smuggling and sale.

     (3) To provide for public health and safety.

     (4) To raise funds to address and discourage substance abuse, to encourage social justice

and support drug education and awareness.

     21-28.11-3. Definitions.

     For purposes of this chapter, the following words, terms and phrases shall have the

following meanings:

     (1) ''Cannabinoid'' means any of several compounds produced by cannabis plants that have

medical and psychotropic effects.

     (2) ''Cannabinoid profile" means amounts, expressed as the dry-weight percentages, of

delta-nine-tetrahydrocannabinol, cannabidiol, tetrehydrocannabinolic acid and cannabidiolic acid

in a cannabis product. Amounts of other cannabinoids may be required by the commission.

     (3) "Cannabis" or "Marijuana" has the same meaning as "Cannabis" as set forth in § 21-

28.6-3.

     (4) ''Cannabis concentrate'' means the resin extracted from any part of the plant of the genus

cannabis and every compound, manufacture, salt, derivative, mixture or preparation of that resin

but shall not include the weight of any other ingredient combined with cannabis to prepare cannabis

products.

     (5) ''Close associate'' means a person who holds a legally recognized financial interest in,

or is entitled to exercise power in, the business of an applicant or licensee and, by virtue of that

interest or power, is able to exercise a significant influence over the management or operation of a

cannabis establishment licensed under this chapter.

     (6) ''Consumer'' means a person who is at least twenty-one (21) years of age.

     (7) ''Controlling person'' means an officer, board member or other individual who has a

financial or voting interest of ten percent (10%) or greater in a cannabis establishment.

     (8) ''Commission'' means the Rhode Island cannabis control commission established by §

21-28.11-4.

     (9) "Craft cannabis cultivation" means a resident of the state licensed pursuant to the

provisions of § 21-28.11-5 to cultivate a limited quantity of cannabis as established by the

commission for sale to a licensed establishment or entity, but not to consumers.

     (10) ''Craft cannabis cultivator cooperative'' means a cannabis cultivator comprised of more

than one resident of the state organized as a limited liability company or limited liability partnership

under the laws of the state, or an appropriate business structure as determined by the commission,

and that is licensed to cultivate, obtain, manufacture, process, package and brand cannabis and

cannabis products in limited quantities as established by the commission pursuant to § 21-28.11-5

and authorized to sell and deliver cannabis to a licensed cannabis establishment or entity but not to

consumers.

     (11) ''Cultivation batch'' means a collection of cannabis plants from the same seed or plant

stock that are cultivated and harvested together, and receive an identical propagation and cultivation

treatment, including, but not limited to: growing media, ambient conditions, watering and light

regimes and agricultural or hydroponic inputs. The cannabis cultivator licensee shall assign and

LC002305/SUB A/3 - Page 2 of 88

record a unique, sequential alphanumeric identifier to each cultivation batch for the purposes of

production tracking, product labeling and product recalls.

     (12) ''Finished cannabis'' means a usable cannabis, cannabis resin or cannabis concentrate.

     (13) ''Hemp'' means the plant of the genus cannabis or any part of the plant, whether

growing or not, with a delta-9-tetrahydrocannabinol concentration that does not exceed three tenths

of one percent (0.3%) on a dry weight basis of any part of the plant of the genus cannabis, or per

volume or weight of cannabis product, or the combined per cent of delta-9-tetrahydrocannabinol

and tetrahydrocannabinolic acid in any part of the plant of the genus cannabis regardless of moisture

content.

     (14) ''Host community'' means a municipality in which a cannabis establishment or a

medical cannabis treatment center is located or in which an applicant has proposed locating a

cannabis establishment or a medical cannabis treatment center.

     (15) ''Independent testing laboratory'' means a laboratory that is licensed by the commission

and is:

     (i) Accredited to the most current International Organization for Standardization 17025 by

a third-party accrediting body that is a signatory to the International Laboratory Accreditation

Cooperation mutual recognition arrangement or that is otherwise approved by the commission;

     (ii) Independent financially from any medical cannabis treatment center or any licensee or

cannabis establishment for which it conducts a test; and

     (iii) Qualified to test cannabis in compliance with regulations promulgated by the

commission pursuant to this chapter. The term includes, but is not limited to, an independent testing

laboratory as provided in § 21-28.11-11.

     (16) ''Laboratory agent'' means an employee of an independent testing laboratory who

transports, possesses or tests cannabis.

     (17) ''Licensee'' means a person or entity licensed by the commission pursuant to the

provisions of this chapter. Any business structure recognized under title 7 of the general laws,

including but not limited to corporations, partnerships, limited partnerships, limited-liability

companies, and workers' cooperatives, which is otherwise qualified, is eligible to be considered by

the commission as an entity licensee.

     (18) ''Manufacture'' means to compound, blend, extract, infuse or otherwise make or

prepare a cannabis product.

     (19) ''Marijuana'' or ''Marihuana'' or "Cannabis" means all parts of any plant of the genus

cannabis, not excepted below and whether growing or not; the seeds thereof; and resin extracted

from any part of the plant; and every compound, manufacture, salt, derivative, mixture or

LC002305/SUB A/3 - Page 3 of 88

preparation of the plant, its seeds or resin including tetrahydrocannabinol; provided, however, that

''cannabis'' shall not include:

     (i) The mature stalks of the plant, fiber produced from the stalks, oil, or cake made from

the seeds of the plant, any other compound, manufacture, salt, derivative, mixture or preparation of

the mature stalks, fiber, oil or cake made from the seeds of the plant or the sterilized seed of the

plant that is incapable of germination;

     (ii) Hemp; or

     (iii) The weight of any other ingredient combined with cannabis to prepare topical or oral

administrations, food, drink or other products.

     (20) ''Marijuana accessories'' or "cannabis accessories" means equipment, products,

devices or materials of any kind that are intended or designed for use in planting, propagating,

cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing,

preparing, testing, analyzing, packaging, repackaging, storing, containing, ingesting, inhaling or

otherwise introducing cannabis into the human body.

     (21) ''Marijuana cultivator'' or "cannabis cultivator" means an entity licensed to cultivate,

process and package cannabis, to deliver cannabis to cannabis establishments and to transfer

cannabis to other cannabis establishments, but not to consumers.

     (22) ''Marijuana establishment'' or "cannabis establishment" means a cannabis cultivator,

independent testing laboratory, cannabis product manufacturer, cannabis retailer or any other type

of licensed cannabis-related business.

     (23) ''Marijuana product manufacturer'' or "cannabis product manufacturer" means an

entity licensed to obtain, manufacture, process and package cannabis and cannabis products, to

deliver cannabis and cannabis products to cannabis establishments and to transfer cannabis and

cannabis products to other cannabis establishments, but not to consumers.

     (24) ''Marijuana products'' or "cannabis products" means products that have been

manufactured and contain cannabis or an extract from cannabis, including concentrated forms of

cannabis and products composed of cannabis and other ingredients that are intended for use or

consumption, including edible products, beverages, topical products, ointments, oils and tinctures.

     (25) ''Marijuana retailer'' or "cannabis retailer" means an entity licensed to purchase and

deliver cannabis and cannabis products from cannabis establishments and to deliver, sell or

otherwise transfer cannabis and cannabis products to cannabis establishments and to consumers.

     (26) "Medical marijuana treatment center" or "Medical cannabis treatment center" includes

a compassion center, a medical marijuana emporium, or marijuana establishment licensee who

operates a treatment center, all as defined in § 21-28.6-3.

LC002305/SUB A/3 - Page 4 of 88

     (27) ''Mycotoxin'' means a secondary metabolite of a microfungus that is capable of causing

death or illness in humans and other animals. For the purposes of this chapter, mycotoxin shall

include alfatoxin B1, alfatoxin B2, alfatoxin G1, alfatoxin G2 and ochratoxin A.

     (28) ''Process'' or ''processing'' means to harvest, dry, cure, trim and separate parts of the

cannabis plant by manual or mechanical means, except it shall not include manufacture as defined

in this section.

     (29) ''Production batch'' means a batch of finished plant material, cannabis resin, cannabis

concentrate or cannabis-infused product made at the same time, using the same methods, equipment

and ingredients. The licensee shall assign and record a unique, sequential alphanumeric identifier

to each production batch for the purposes of production tracking, product labeling and product

recalls. All production batches shall be traceable to one or more cannabis cultivation batches.

     (30) ''Residual solvent'' means a volatile organic chemical used in the manufacture of a

cannabis product and that is not completely removed by practical manufacturing techniques.

     (31) ''Terpenoid'' means an isoprene that are the aromatic compounds found in cannabis,

including, but not limited to: limonene, myrcene, pinene, linalool, eucalyptol, Δ-terpinene, ß-

caryophyllene, caryophyllene oxide, nerolidol and phytol.

     (32) ''Unreasonable and impracticable'' means that the measures necessary to comply with

the regulations, ordinances or by-laws adopted pursuant to this chapter subject licensees to

unreasonable risk or require such a high investment of risk, money, time or any other resource or

asset that a reasonably prudent businessperson would not operate a cannabis establishment.

     21-28.11-4. Establishment of commission.

     (a) There is hereby established a cannabis control commission which shall consist of five

(5) commissioners appointed by the governor with the advice and consent of the senate as follows:

one of whom shall be nominated by the governor in consultation with the director of the department

of health and shall have a background in public health, mental health, substance use or toxicology;

one of whom shall be nominated by the governor in consultation with the attorney general and shall

have a background in public safety; one of whom shall be nominated by the governor in

consultation with the general treasurer and shall have experience in corporate management, finance

or securities; and two (2) of whom shall be nominated by the governor, of whom one shall have

professional experience in oversight or industry management, including commodities, production

or distribution in a regulated industry, and the other one of whom shall have a background in legal,

policy or social justice issues related to a regulated industry. The members of the commission shall

select and designate the chair of the commission. The chair shall serve in that capacity throughout

the term of his or her initial appointment and until a successor shall be appointed. Prior to

LC002305/SUB A/3 - Page 5 of 88

appointment to the commission, a background investigation shall be conducted into the financial

stability, integrity and responsibility of a candidate, including the candidate's reputation for good

character, and honesty.

     (b) Each commissioner shall be a resident of the state within ninety (90) days of

appointment, and while serving on the commission, shall not:

     (1) Hold, or be a candidate for, federal, state or local elected office;

     (2) Hold an appointed office in a federal, state or local government; or

     (3) Serve as an official in a political party. Not more than three (3) commissioners shall be

from the same political party.

     (c) Each commissioner shall serve for a term of five (5) years or until a successor is

appointed, and shall be eligible for reappointment; provided, however, that no commissioner shall

serve more than ten (10) years, and selection and designation of a chairperson shall occur at least

every five (5) years. A person appointed to fill a vacancy in the office of a commissioner shall be

appointed in a like manner and shall serve for only the unexpired term of that commissioner.

     (d) A commissioner may be removed with or without cause pursuant to the provisions of §

36-1-7. The governor shall remove a commissioner with advice and consent of the senate if the

commissioner:

     (1) Is guilty of malfeasance in office;

     (2) Substantially neglects the duties of a commissioner;

     (3) Is unable to discharge the powers and duties of the office;

     (4) Commits gross misconduct; or

     (5) Is convicted of a felony.

     (e) Commissioners shall receive salaries as determined by the governor in consultation with

the speaker of the house and the president of the senate. Commissioners shall devote their full time

and attention to the duties of their office.

     (f) The commission shall annually elect one of its members to serve as secretary and one

of its members to serve as treasurer. The secretary shall keep a record of the proceedings of the

commission and shall be the custodian and keeper of the records of all books, documents and papers

filed by the commission and of its minute book. The secretary shall cause copies to be made of all

minutes and other records and documents of the commission and shall certify that such copies are

true copies and all persons dealing with the commission may rely upon such certification. These

records shall also be subject to the provisions of title 38, "public records." The chair shall have and

exercise supervision and control over all the affairs of the commission. The chair shall preside at

all hearings at which the chair is present and shall designate a commissioner to act as chair in the

LC002305/SUB A/3 - Page 6 of 88

chair's absence. To promote efficiency in administration, the chair shall make such division or re-

division of the work of the commission among the commissioners as the chair deems expedient.

     (g) The commissioners shall, if so directed by the chair, participate in the hearing and

decision of any matter before the commission; provided, however, that at least two (2)

commissioners shall participate in the hearing and decision of matters other than those of formal or

administrative character coming before the commission; and provided further, that any such matter

may be heard, examined and investigated by an employee of the commission designated and

assigned by the chair, with the concurrence of one other commissioner. For all formal matters, a

majority of the commissioners is required to hear and approve all formal matters. Such employee

shall make a report in writing relative to the hearing, examination and investigation of every such

matter to the commission for its decision. For the purposes of hearing, examining and investigating

any such matter, such employee shall have all of the powers conferred upon a commissioner by this

section.

     (h) The commission shall appoint an executive director. The executive director shall serve

at the pleasure of the commission, shall receive such salary as may be determined by the

commission, and shall devote full time and attention to the duties of the office. The executive

director shall be a person with skill and experience in management, shall be the executive and

administrative head of the commission, and shall be responsible for administering and enforcing

the law relative to the commission and to each administrative unit thereof. The executive director

shall appoint and employ a chief financial and accounting officer and may, subject to the approval

of the commission, employ other employees, consultants, agents and advisors, including legal

counsel, and shall attend meetings of the commission. The chief financial and accounting officer

of the commission shall be in charge of its funds, books of account and accounting records. No

funds shall be transferred by the commission without the approval of the commission and the

signatures of the chief financial and accounting officer and the treasurer of the commission. In the

case of an absence or vacancy in the office of the executive director or in the case of disability as

determined by the commission, the commission may designate an acting executive director to serve

as executive director until the vacancy is filled or the absence or disability ceases. The acting

executive director shall have all of the powers and duties of the executive director and shall have

similar qualifications as the executive director.

     (i) The provisions of chapter 14 of title 36, the state code of ethics, shall apply to the

commissioners and to employees of the commission; provided, however, that the commission may

promulgate an internal code of ethics for all members and employees that may be more restrictive

than the provisions of chapter 14 of title 36. A copy of any internal code of ethics adopted or as

LC002305/SUB A/3 - Page 7 of 88

amended shall be filed with the state ethics commission. The internal code may include provisions

reasonably necessary to carry out the purposes of this section.

     (j) The cannabis control commission shall be a public body for the purposes of the open

meetings act, chapter 46 of title 42.

     (k) The commission shall, for the purposes of compliance with state finance law, operate

as a state agency and shall be subject to the laws applicable to agencies under the control of the

governor; provided, however, that the executive director may identify any additional instructions

or actions necessary for the department of administration to manage fiscal operations in the state

accounting system and meet statewide and other governmental accounting and audit standards. The

commission shall properly classify the commission's operating and capital expenditures, and shall

not include any salaries of employees in the commission's capital expenditures. Unless otherwise

exempted by law, the commission shall participate in any other available state administrative

services including, but not limited to, the state payroll system, the state retirement system, and state

purchases.

     (l) The commission shall not discriminate by considering race, color, religion, sex, sexual

orientation, gender identity or expression, age, national origin, or disability in granting, denying,

or revoking a license, nor shall any person, corporation, or business firm which is licensed pursuant

to the provisions of this chapter unlawfully discriminate against or segregate any person on these

grounds. All businesses licensed by the commission shall operate on a nondiscriminatory basis,

according to equal employment treatment and access to their services to all persons, except unless

otherwise exempted by the laws of the state. Any licensee, or retail sales permit holder who fails to

comply with this policy is subject to any disciplinary action that is consistent with the legal

authority and rules and regulations of the commission. The commission shall cooperate with the

state equal opportunity office to prevent any person, corporation, or business firm from

discriminating because of race, color, religion, sex, sexual orientation, gender identity or

expression, age, national origin, or disability or from participating in any practice which may have

a disparate effect on any protected class within the population. The state equal opportunity office

shall monitor the equal employment opportunity activities and affirmative action plans of the

commission.

     21-28.11-5. Powers and duties of the commission.

     (a) Subject to the state code of ethics and any internal ethics code adopted by the

commission, the commission shall have all the powers necessary or reasonable to carry out and

effectuate its purposes including, but not limited to, the power to:

     (1) Appoint officers and hire employees;

LC002305/SUB A/3 - Page 8 of 88

     (2) Establish and amend a plan of organization that it considers expedient;

     (3) Execute all instruments necessary or reasonable for accomplishing the purposes of this

chapter;

     (4) Enter into agreements or other transactions with a person, including, but not limited to,

a public entity or other governmental instrumentality or authority in connection with its powers and

duties under this chapter;

     (5) Appear on its own behalf before boards, commissions, departments or other agencies

of municipal, state or federal government;

     (6) Apply for and accept subventions, grants, loans, advances and contributions of money,

property, labor or other things of value from any source, to be held, used and applied for its

purposes;

     (7) Provide and pay for advisory services and technical assistance as may be necessary in

its judgment to carry out the purpose and intent of this chapter and fix the compensation of persons

providing such services or assistance;

     (8) Prepare, publish and distribute, with or without charge as the commission may

determine, such studies, reports, bulletins and other materials as the commission considers

appropriate;

     (9) Require an applicant for licensure under this chapter to apply for such licensure and

approve or disapprove any such application or other transactions, events and processes as provided

in this chapter;

     (10) Determine which applicants shall be awarded licenses;

     (11) Deny an application or limit, condition, restrict, revoke or suspend a license;

     (12) Establish a registration process;

     (13) Review data and market conditions on an annual basis to determine the maximum

number of licenses that shall be issued to meet the production demands to implement the provisions

of this chapter;

     (14) Conduct and administer procedures and hearings in compliance with the

Administrative Procedures Act, chapter 35 of title 42, for adoption of rules or regulations, issuance,

denial or revocation of licenses or permits; or for violation of the provisions of this chapter or the

rules and regulations adopted pursuant to the provisions of this chapter. The commissioner may

impose a civil penalty of not more than five thousand dollars ($5,000) and a suspension or

revocation of any license for each violation of the provisions of this chapter or the rules and/or

regulations promulgated pursuant to the provisions of this chapter;

     (15) Gather facts and information applicable to the commission's obligation to issue, deny,

LC002305/SUB A/3 - Page 9 of 88

suspend or revoke licenses and registrations for:

     (i) A violation of this chapter or any rule or regulation adopted by the commission;

     (ii) Willfully violating an order of the commission directed to a licensee or a person

required to be registered;

     (iii) The conviction of a criminal offense for the purpose of determining whether said

conviction substantially relates to the occupation or activity to which the license or registration

applies; or

     (iv) Any other action or conduct which would disqualify such a licensee from holding a

license;

     (16) Conduct investigations into the qualifications of all applicants for employment by the

commission and all applicants for licensure;

     (17) Receive from the state police, the department of attorney general or other criminal

justice agencies including, but not limited to, the Federal Bureau of Investigation and the Internal

Revenue Service, such criminal record information relating to criminal and background

investigations as necessary for the purpose of evaluating licensees, applicants for license, lab

agents, and any other employees or agents of a cannabis establishment, as determined by the

commission;

     (18) Be present, through its inspectors and agents, at any reasonable time, in cannabis

establishments for the purposes of exercising its oversight responsibilities;

     (19) Inspect cannabis establishments and have access to all equipment and supplies in a

cannabis establishment for the purpose of ensuring and enforcing compliance with this chapter and

all rules and regulations promulgated pursuant to this chapter;

     (20) Seize and remove from the premises of a cannabis establishment and impound any

cannabis, equipment, supplies, documents and records obtained or possessed in violation of this

chapter or the rules and regulations of the commission;

     (21) For cause, demand access to and inspect all papers, books and records of close

associates of a licensee whom the commission suspects is involved in the financing, operation or

management of the licensee; provided, however, that the inspection, examination, photocopying

and audit may take place on the affiliate's premises or elsewhere as practicable and in the presence

of the affiliate or its agent;

     (22) Require that the books and financials or other records or statements of a licensee be

kept in a manner that the commission considers proper;

     (23) Impose fees and civil penalties, as authorized by this chapter, and impose civil

penalties and sanctions for a violation of any rule or regulation promulgated by the commission;

LC002305/SUB A/3 - Page 10 of 88

     (24) Collect fees and civil penalties pursuant to the provisions of this chapter;

     (25) Conduct adjudicatory proceedings and promulgate regulations;

     (26) Refer cases for criminal prosecution to the appropriate federal, state or local

authorities;

     (27) Maintain an official internet website for the commission;

     (28) Monitor any federal activity regarding cannabis; and

     (29) Adopt, amend or repeal rules and regulations for the implementation, administration

and enforcement of this chapter.

     (b) The commission shall, adopt rules and regulations consistent with this chapter for the

administration, clarification and enforcement of provisions regulating and licensing cannabis

establishments. The rules and regulations shall include but not be limited to:

     (1) Methods and forms of application which an applicant for a license shall follow and

complete before consideration by the commission;

     (2) A schedule of application, license and renewal fees; provided, however, that fees may

be relative to the volume of business conducted or to be conducted by the cannabis establishment;

     (3) Qualifications for licensure and minimum standards for employment that are directly

and demonstrably related to the operation of a cannabis establishment and similar to qualifications

for licensure and employment standards in connection with the manufacture, distribution or sale of

alcoholic beverages as regulated under title 3 of the general laws; provided, that a criminal

conviction shall not automatically disqualify an individual or otherwise affect eligibility for

employment or licensure in connection with a cannabis establishment pursuant to § 21-28.11-21.1;

     (4) Procedures and policies to promote and encourage full participation in the regulated

cannabis industry by people from communities that have previously been disproportionately

harmed by cannabis prohibition and enforcement and to positively impact those communities;

     (5) Standards for the licensure of cannabis establishments, to include, but not be limited to,

utilization of the social equity assistance fund established pursuant to the provisions of § 21-28.11-

31;

     (6) Standards for the reporting or payment of licensure fees and taxes;

     (7) Requirements for the information to be furnished by an applicant or licensee;

     (8) Criteria for evaluation of the application for a license;

     (9) Requirements for the information to be furnished by a licensee to the licensee's

employees;

     (10) Requirements for fingerprinting or other method of identification of an applicant for

a license or a licensee;

LC002305/SUB A/3 - Page 11 of 88

     (11) Procedures and grounds for the revocation or suspension of a license or registration;

     (12) Minimum uniform standards of accounting procedures;

     (13) Requirements for record keeping by cannabis establishments and procedures to track

cannabis cultivated, processed, manufactured, delivered or sold by cannabis establishments;

     (14) Any necessary registration requirements for employees working at the cannabis

establishment;

     (15) Requirements that all cannabis establishment employees be properly trained in their

respective professions as necessary;

     (16) Procedures for the interim authorization of a cannabis establishment under this

chapter;

     (17) Minimum standards for the requirement that all licensees possess and operate an

interoperable publicly available application programming interface seed-to-sale tracking system

sufficient to ensure the appropriate track and trace of all cannabis cultivated, processed or

manufactured pursuant to this chapter;

     (18) Minimum security requirements for licensees sufficient to deter and prevent theft and

unauthorized entrance into areas containing cannabis, which may include ,but not be limited to, the

use of security personnel, security cameras, or alarms provided that the requirements shall not

prohibit the cultivation of cannabis outdoors or in greenhouses;

     (19) Minimum standards for liability insurance coverage or requirements that a certain

monetary sum be placed in escrow to be expended for potential liabilities;

     (20) Requirements and standards sufficient to ensure for the virtual separation of cannabis

cultivated, processed, manufactured, delivered or sold by a licensee that is also licensed as a

medical marijuana treatment center pursuant to the provisions of chapter 28.6 of title 21.

Requirements shall leverage seed-to-sale tracking technology and may allow for the appropriate

transfer or acquisition of cannabis seeds, clones, cuttings, plants or plant tissue between such

entities;

     (21) Requirements and procedures to prevent the sale, delivery or transfer of cannabis to

persons under twenty-one (21) years of age, or the purchase of cannabis on behalf of a person under

twenty-one (21) years of age, including a prohibition on persons under twenty-one (21) entering

cannabis establishments;

     (22) Standards for manufacturing or extracting cannabinoid oils or butane hash oil;

     (23) Health and safety standards, established in consultation with the department of health

and the department of environmental management, for the cultivation, processing, manufacturing

and distribution of cannabis, including standards regarding sanitation for the preparation, storage,

LC002305/SUB A/3 - Page 12 of 88

handling and sale of food products, including compliance with state sanitation requirements, and

health inspections; provided, however, that the authority to promulgate regulations pertaining to

the use of pesticides shall remain with the department of environmental management pursuant to

the provisions of chapter 25 of title 23;

     (24) Requirements for the packaging of cannabis and cannabis products that shall, at a

minimum:

     (i) Require the most current consumer product safety commission standards, set forth in 16

C.F.R. 1700 et seq.;

     (ii) Protect children from accidently ingesting cannabis or cannabis products, including by

making packaging certified child-resistant and resealable;

     (iii) Require the separation of each serving within a package containing multiple servings

shall be furnished in a manner that allows consumers and cardholders to easily identify a single

serving;

     (iv) Prohibit the use of bright colors, cartoon characters and other features designed to

appeal to minors;

     (v) Ensure that packaging is opaque or plain in design;

     (vi) Limit each serving size to no greater than ten milligrams (10 mg.) of delta-9-

tetrahydrocannabinol (Δ9-THC); and

     (vii) Prohibit any packaging that imitates or has a semblance to any existing branded

consumer products, including foods and beverages that do not contain cannabis;

     (25) Requirements for the potency or dosing limitations of edible cannabis products sold

by licensees;

     (26) Requirements for the labeling of a package containing cannabis or cannabis products

that shall, at a minimum, include:

     (i) A symbol or other easily recognizable mark issued by the commission that indicates the

package contains cannabis or a cannabis product;

     (ii) A symbol or other easily recognizable mark issued by the commission on the package

indicating to children that the product is harmful to children;

     (iii) The name and contact information of the cannabis cultivator or the cannabis product

manufacturer who produced the cannabis or cannabis product;

     (iv) The results of sampling, testing and analysis conducted by a licensed independent

testing laboratory;

     (v) A seal certifying the cannabis meets such testing standards;

     (vi) A unique batch number identifying the production batch associated with

LC002305/SUB A/3 - Page 13 of 88

manufacturing, processing, and cultivating;

     (vii) A list of ingredients and possible allergens;

     (viii) The amount of delta-9-tetrahydrocannabinol (Δ9-THC) in the package and in each

serving of a cannabis product as expressed in absolute terms and as a percentage of volume;

     (ix) The number of servings in a package if there are multiple servings;

     (x) A use-by date, if applicable; and

     (xi) The following statement, including capitalization: ''This product has not been analyzed

or approved by the FDA. There is limited information on the side effects of using this product, and

there may be associated health risks. Cannabis use during pregnancy and breast-feeding may pose

potential harm. It is against the law to drive or operate machinery when under the influence of this

product. KEEP THIS PRODUCT AWAY FROM CHILDREN.'';

     (27) Procedures and policies, in cooperation with the department of environmental

management, to promote and encourage full participation in the regulated cannabis industry by

farmers and businesses of all sizes, which shall include creating a schedule of cultivator license

fees commensurate with cultivation size and regulations to create a craft cannabis cultivator

cooperative system including, but not limited to, the following:

     (i) A limitation on ownership interests in a cannabis cultivator cooperative;

     (ii) A limit on the total cannabis produced by a craft cannabis cultivator by the number of

plants, surface area used for cultivation or output by weight; and

     (iii) A reasonable fee for licensure as a craft cannabis cultivator cooperative;

     (28) Requirements for the safe disposal of excess, contaminated, adulterated or deteriorated

cannabis, which shall consider policies which promote the recycling of such waste, including, but

not limited to, recycled industrial products;

     (29) Requirements for advertising, marketing and branding of cannabis and cannabis

products that shall, at a minimum, include, but shall not be limited to:

     (i) A prohibition on advertising, marketing and branding in such a manner that is deemed

to be deceptive, false or misleading;

     (ii) A prohibition on advertising, marketing and branding by means of television, radio,

internet, billboard or print publication unless at least eighty-five percent (85%) of the audience is

reasonably expected to be twenty-one (21) years of age or older, as determined by reliable, up-to-

date audience composition data;

     (iii) A prohibition on advertising, marketing and branding that utilizes statements, designs,

representations, pictures or illustrations that portray anyone less than twenty-one (21) years of age;

     (iv) A prohibition on advertising, marketing and branding including, but not limited to,

LC002305/SUB A/3 - Page 14 of 88

mascots, cartoons, brand sponsorships and celebrity endorsements, that is deemed to appeal to a

person less than twenty-one (21) years of age;

     (v) A prohibition on advertising, marketing and branding, including statements by a

licensee, that makes any false or misleading statements concerning other licensees and the conduct

and products of such other licensees;

     (vi) A prohibition on advertising, marketing and branding through certain identified

promotional items as determined by the commission, including giveaways, coupons or ''free'' or

''donated'' cannabis;

     (vii) A prohibition on advertising, marketing and branding by a licensee that asserts its

products are safe, other than labeling required pursuant to this chapter;

     (viii) A reasonable prohibition on timing and use of illuminated external signage, which

shall comply with all local ordinances and requirements, and a prohibition on neon signage;

     (ix) A prohibition of the use of vehicles equipped with radio or loud speakers for the

advertising of cannabis;

     (x) A prohibition on the use of radio or loudspeaker equipment in any cannabis

establishment for the purpose of attracting attention to the sale of cannabis;

     (xi) An allowance that a licensee may sponsor a charitable, sporting or similar event, but a

prohibition of advertising, marketing and branding at, or in connection with, such an event unless

at least eight-five percent (85%) of the audience is reasonably expected to be twenty-one (21) years

of age or older, as determined by reliable, up-to-date audience composition data;

     (xii) A requirement that the website of a cannabis establishment shall verify that the entrant

is at least twenty-one (21) years of age;

     (xiii) A prohibition on the use of unsolicited pop-up advertisements on the internet; and

     (xiv) A requirement that all advertising, marketing or branding materials for cannabis and

cannabis products contain a standard health warning developed by the department of health;

     (30) Procedures and requirements to enable the transfer of a license for a cannabis

establishment to another qualified person or to another suitable location with notification and

approval by the commission;

     (31) Requirements to establish a process allowing the commission to order a prohibition

on the sale of a cannabis product found especially appealing to persons under twenty-one (21) years

of age;

     (32) Requirements to establish a process allowing a cannabis product manufacturer to

voluntarily submit a product, its packaging and intended marketing to the commission for

preliminary determination whether the product is especially appealing to persons under twenty-one

LC002305/SUB A/3 - Page 15 of 88

(21) years of age;

     (33) Requirements that prohibit cannabis product manufacturers from altering or utilizing

commercially-manufactured food products when manufacturing cannabis products unless the food

product was commercially manufactured specifically for use by the cannabis product manufacturer

to infuse with cannabis; provided, however, that a commercially-manufactured food product may

be used as an ingredient in a cannabis product if: (i) It is used in a way that renders it unrecognizable

as the commercial food product in the cannabis product; and (ii) There is no statement or

advertisement indicating that the cannabis product contains the commercially-manufactured food

product; and

     (34) Energy and environmental standards for licensure and licensure renewal of cannabis

establishments licensed as a cannabis cultivator or cannabis product manufacturer.

     (c) In furtherance of the intent of this chapter, the commission may also adopt regulations

in accordance with this chapter which establish and provide for issuance of additional types or

classes of licenses to operate cannabis-related businesses, including: licenses that authorize only

limited cultivation by a craft cannabis cultivation or a craft cannabis cultivation operative,

processing, manufacture, possession or storage of cannabis or cannabis products, limited delivery

of cannabis or cannabis products to consumers, licenses that authorize the consumption of cannabis

or cannabis products on the premises where sold, licenses that authorize the consumption of

cannabis at special events in limited areas and for a limited time and licenses intended to facilitate

scientific research or education;

     (d) Regulations made pursuant to this section shall not:

     (1) Prohibit the operation of a cannabis establishment either expressly or through

regulations that make operation of a cannabis establishment unreasonable and impracticable;

     (2) Require a customer to provide a cannabis retailer with identifying information other

than identification to determine the customer's age, and shall not require the cannabis retailer to

acquire or record personal information about customers other than information typically required

in a retail transaction;

     (3) Prohibit a medical marijuana treatment center and a cannabis establishment from

operating at a shared location;

     (4) Prohibit cannabis establishments from transferring or acquiring cannabis seeds, clones,

cuttings, plants or plant tissue from other cannabis establishments or from medical cannabis

treatment centers or prohibit a cannabis establishment from transferring or otherwise selling

cannabis to a cannabis retailer, a cannabis product manufacturer or a cannabis cultivator; or

     (5) Prohibit cannabis establishments from using inorganic cultivation methods.

LC002305/SUB A/3 - Page 16 of 88

     (e) The commission shall administer and enforce the provisions of this chapter and the rules

and regulations relating to licensing in this chapter.

     (f) Each fiscal year the commission shall submit an annual finance plan to the governor,

the speaker of the house and the president of the senate, and updates to such plan.

     (g) The commission shall investigate, in conjunction with the department of health, the

effects of cannabis and cannabis products with a high potency of tetrahydrocannabinol on the

human body and recommend whether there should be restrictions on the potency of

tetrahydrocannabinol in cannabis and cannabis products.

     (h) The commission shall be subject to all the provisions of chapter 35 of title 42.

     (i) The commission shall annually submit a complete and detailed report of the

commission's activities, including a review of the implementation and enforcement of this chapter

and the governance structure established in this chapter, not more than ninety (90) days after the

end of the fiscal year to the governor, the attorney general, the treasurer, the speaker of the house,

and the president of the senate.

     (j) The commission shall annually review the tax rates established by this chapter and may

make recommendations to the general assembly, as appropriate, regarding any changes to the tax

rates that further the intent of this chapter. The commission may study cannabis commerce and

make recommendations to the general assembly regarding changes in the laws that further the intent

of this chapter by filing those recommendations with the governor, the speaker of the house, and

the president of the senate.

     (k) The commission shall deposit all license, registration and monetary penalties collected

pursuant to this chapter in the social equity assistance fund established pursuant to § 21-28.11-31.

     (l) The commission, shall work collaboratively with other state agencies and departments

to ensure that the production and distribution of cannabis is effectively regulated in the state in

furtherance of the intent of this act.

     21-28.11-6. Cannabis advisory board.

     (a)(1) There is hereby established a cannabis advisory board to study and make

recommendations to the Rhode Island cannabis control commission on the regulation and taxation

of cannabis. The board shall consist of the following: the executive director of the cannabis control

commission who shall serve as chair; the secretary of commerce or a designee; the state tax

administrator or a designee; the director of the department of health or a designee; the director of

the department of environmental management or a designee; the director of the department of

public safety or a designee; the director of the department of business regulation or a designee; two

(2) registered cardholders as defined in § 21-28.6-3, one to be appointed by the speaker of the house

LC002305/SUB A/3 - Page 17 of 88

and one to be appointed by the president of the senate; the executive director of the American Civil

Liberties Union of Rhode Island, Inc. or a designee; five (5) persons to be appointed by the

treasurer, one of whom shall have experience or expertise in cannabis cultivation, one of whom

shall have experience or expertise in cannabis retailing, one of whom shall have experience or

expertise in cannabis product manufacturing, one of whom shall have experience or expertise in

laboratory sciences and toxicology and one of whom shall have experience or expertise in providing

legal services to cannabis businesses; five (5) persons to be appointed by the governor, one of

whom shall have experience or expertise in minority business development, one of whom shall

have experience or expertise in economic development strategies for under-resourced communities,

one of whom shall have experience or expertise in farming or representing the interests of farmers,

one of whom shall have experience or expertise representing the interests of employers and one of

whom shall have experience or expertise in municipal law enforcement with advanced training in

impairment detection and evaluation; and five (5) persons to be appointed by the attorney general,

one of whom shall have experience or expertise in social welfare or social justice, one of whom

shall have experience or expertise in criminal justice reform to mitigate the disproportionate impact

of drug prosecutions on communities of color, one of whom shall have experience or expertise in

minority business ownership, one of whom shall have experience or expertise in women-owned

business ownership and one of whom shall have experience or expertise in the prevention and

treatment of substance use disorders. Members of the board shall serve for terms of two (2) years.

Members of the board shall serve without compensation but may be reimbursed for their expenses

actually and necessarily incurred in the discharge of their official duties. Members of the board

shall not be state employees by virtue of their service on the board. To take action at a meeting, a

majority of the members of the board must be present and voting to constitute a quorum.

     (2) The cannabis advisory board shall:

     (i) Consider all matters submitted to it by the commission;

     (ii) On its own initiative, recommend to the commission guidelines, rules and regulations

and any changes to guidelines, rules and regulations that the advisory board considers important or

necessary for the commission's review and consideration; and

     (iii) Advise on the preparation of regulations pursuant to this title.

     (3) The chair may appoint subcommittees in order to expedite the work of the board;

provided, however, that the chair shall appoint:

     (i) A subcommittee on public health to develop recommendations on products, labelling,

marketing, advertising, related public health issues, potency, which may include a recommended

maximum limit for individual servings of cannabis products, and packaging, which may include

LC002305/SUB A/3 - Page 18 of 88

the development and implementation of a public health warning to appear on cannabis products;

     (ii) A subcommittee on public safety and community mitigation to develop

recommendations on law enforcement, property, business and consumer issues;

     (iii) A subcommittee on the cannabis industry to develop recommendations on cultivation,

processing, manufacturing, transportation, distribution, seed-to-sale tracking and market stability;

and

     (iv) A subcommittee on market participation to develop recommendations on minority and

veteran-owned businesses, local agriculture and growing cooperatives.

     21-28.11-7. Licensed cannabis cultivators.

     (a) There shall be no new cannabis cultivators' licenses issued prior to July 1, 2023. This

prohibition shall not apply to cannabis cultivators licensed on or before July 1, 2021 pursuant to

chapter 28.6 of title 21.

     (b) A cannabis cultivator licensed pursuant to the provisions of § 21-28.11-8 engaged in

cultivation in compliance with the provisions of a license that authorizes only limited cultivation

pursuant to § 21-28.11-5(b), may acquire, possess, manufacture, cultivate, deliver, or transfer

cannabis to entities licensed pursuant to the provisions of this chapter and chapter 28.6 of title 21.

     (c) The commission shall promulgate regulations that govern how many cannabis plants,

mature and immature; how much wet cannabis; and how much usable cannabis a licensed cannabis

cultivator may possess. Every cannabis plant possessed by a licensed cannabis cultivator shall be

catalogued in a seed-to-sale inventory tracking system in accordance with regulations promulgated

by the commission.

     (d) Cannabis cultivators shall sell cannabis only to an entity licensed pursuant to the

provisions of this chapter or chapter 28.6 of title 21.

     (e) Notwithstanding any other provisions of the general laws, the manufacture of cannabis

using a solvent extraction process that includes the use of a compressed, flammable gas as a solvent

by a licensed cannabis cultivator shall not be subject to the protections of this chapter.

     (f) Cannabis cultivators shall be licensed to grow cannabis only at a location or locations

registered with the cannabis commission. The commission may promulgate regulations governing

where cultivators are allowed to grow. Cannabis cultivators shall abide by all local ordinances,

including zoning ordinances.

     (g) As a condition of licensing, cannabis cultivators shall consent and be subject to

reasonable inspection by the commission for the purposes of ensuring and enforcing compliance

with this chapter and all rules and regulations promulgated pursuant to this chapter, and the

provisions of § 28-5.1-14.

LC002305/SUB A/3 - Page 19 of 88

     (h) To qualify for issuance of a cannabis cultivator license under this section, an applicant

shall satisfy all qualifications established by the commission to include but not limited to:

     (1) Apply for a license in a manner prescribed by the commission;

     (2) Provide proof that the applicant is twenty-one (21) years of age or older and is a resident

of the state;

     (3) Undergo a criminal record background check pursuant to § 21-28.11-12.1 and on any

terms established by the commission;

     (4) Provide proof that the applicant is current and in compliance with all obligations for

filings and payments for taxes with the division of taxation;

     (5) Has provided a nonrefundable application fee pursuant to § 21-28.11-8; and

     (6) Prior to the issuance of any license and for any period of renewal, the applicant shall

submit an annual fee pursuant to § 21-28.11-8.

     (i) Persons issued cannabis cultivator licenses shall be subject to the following:

     (1) A licensed cannabis cultivator shall notify and request approval from the commission

of any change in his or her name or address within ten (10) days of the change. A licensed cannabis

cultivator who fails to notify the commission of any of these changes is responsible for a civil

infraction, punishable by a fine of no more than one hundred fifty dollars ($150).

     (2) When a licensed cannabis cultivator notifies the commission of any changes listed in

this subsection, the commission shall issue the licensed cannabis cultivator a new registry

identification card after the department approves the changes and receives from the licensee

payment of a fee specified in regulation.

     (3) If a licensed cannabis cultivator loses his or her license, he or she shall notify the

commission and submit a fee specified in regulation within ten (10) days of losing the card. The

commission shall issue a new license with a new random identification number.

     (4) A licensed cannabis cultivator has a continuing duty to notify the commission of any

criminal conviction(s) that occurs after the issuance of a license or registration. A criminal

conviction shall not automatically result in suspension or revocation of a license, but shall be

subject to § 21-28.11-12.1;

     (5) If a licensed cannabis cultivator violates any provision of this chapter or regulations

promulgated hereunder as determined by the commission, his or her issued license may be

suspended and/or revoked.

     (j) Immunity.

     (1) No licensed cannabis cultivator shall be subject to: arrest; prosecution; search or

seizure, except as authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (f)

LC002305/SUB A/3 - Page 20 of 88

of this section; or penalty in any manner, or denied any right or privilege, including, but not limited

to, civil penalty or disciplinary action by a business, occupational, or professional licensing board

or entity, solely for acting in accordance with this chapter or rules and regulations promulgated by

the commission.

     (2) No principal officers, board members, agents, volunteers, or employees of a licensed

cannabis cultivator shall be subject to arrest; prosecution; search or seizure, except as authorized

pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (f) of this section; or penalty in

any manner, or denied any right or privilege, including, but not limited to, civil penalty or

disciplinary action by a business, occupational, or professional licensing board or entity, solely for

working for or with a licensed cannabis cultivator to engage in acts permitted by this chapter or

rules and regulations promulgated by the commission.

     (3) No state employee shall be subject to arrest; prosecution; search or seizure, except as

authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (f) of this section; or

penalty in any manner, or denied any right or privilege, including, but not limited to, civil penalty,

disciplinary action, termination, or loss of employee or pension benefits, for any and all conduct

that occurs within the scope of his or her employment regarding the administration, execution,

and/or enforcement of this chapter or rules and regulations promulgated by the commission, and

the provisions of §§ 9-31-8 and 9-31-9 shall be applicable to this section.

     (k) Nothing in this section shall be construed as authorizing a cannabis cultivator to transfer

or sell cannabis to a consumer. A direct sale or transfer from a cannabis cultivator to a consumer is

prohibited.

     (l) A cannabis cultivator and all agents and employees of the cannabis cultivator shall

comply with all rules adopted by the commission and all applicable laws.

     (m) No cannabis or cannabis product shall be sold or otherwise marketed pursuant to this

chapter that has not first been tested by an independent testing laboratory and determined to meet

the commission's testing protocols issued pursuant to § 21-28.11-11.

     21-28.11-8. Cultivation tiers.

     (a) A cannabis cultivator shall be responsible for submitting an application for issuance of

a proper tier license pursuant to the provisions of this section. Cultivation tiers shall be based on

square footage of canopy. Fees shall vary for indoor and outdoor cultivation. The license types,

application fees and annual license fee shall be as follows until amended by the commission

pursuant to the provisions of this chapter.

License Types Application Fees Annual License Fee

(Indoor/Outdoor) (Indoor/Outdoor)

LC002305/SUB A/3 - Page 21 of 88

Limited quantity

(Craft and Craft Cooperative):

Up to 1,000 sq. ft. $80(I)/$40(O) $250(I)/$100(O)

Tier 1: 1,000 to 5, 000 sq. ft. $160 (I)/$80 (O) $1,000 (I)/$450 (O)

Tier 2: 5,001 to 10,000 sq. ft. $160 (I)/$80 (O) $2,000 (I)/$1,000 (O)

Tier 3: 10,001 to 20,000 sq. ft. $320 (I)/$160 (O) $4,000 (I)/$2,000 (O)

Tier 4: 20,001 to 30,000 sq. ft. $480 (I)/$240 (O) $6,000 (I)/$3,000 (O)

Tier 5: 30,001 to 40,000 sq. ft. $640 (I)/$320 (O) $8,000 (I)/$4,000 (O)

Tier 6: 40,001 to 50,000 sq. ft. $820 (I)/$400 (O) $10,000 (I)/$5,000 (O)

Tier 7: 50,001 to 60,000 sq. ft. $980 (I)/$480 (O) $12,000 (I)/$6,000 (O)

Tier 8: 60,001 to 70,000 sq. ft. $1,140 (I)/$560 (O) $14,000 (I)/$7,000 (O)

Tier 9: 70,001 to 80,000 sq. ft. $1,300 (I)/$640 (O) $16,000 (I)/$8,000 (O)

Tier 10: 80,001 to 90,000 sq. ft. $1,460 (I)/$720 (O) $18,000 (I)/$10,000 (O)

Tier 11: 90,001 to 100,000 sq. ft. $1,620 (I)/$800 (O) $20,000 (I)/$12,000 (O)

     (b) A cannabis cultivator may submit an application, in a time and manner determined by

the commission, to change the tier in which it is classified. A cannabis cultivator may change tiers

to either expand or reduce production.

     (c) In connection with the license renewal process for cannabis cultivators, the commission

will review the records of the cannabis cultivator during the six (6) months prior to the application

for renewal for an indoor cultivator. Except for limited quantity and tier 1 licenses, the commission

may reduce the cultivator licensee's maximum canopy to a lower tier if the cultivator licensee sold

less than seventy percent (70%) of what it produced during the six (6) months prior to the

application for renewal for an indoor cultivator or during the harvest season prior to the application

for renewal for an outdoor cultivator.

     (d) When determining whether to allow expansion or reduction of a cultivator licensee to

a different tier, the commission may consider factors including, but not limited to:

     (1) Cultivation and production history, including whether the plants/inventory suffered a

catastrophic event during the licensing period;

     (2) Tax payment history;

     (3) Existing inventory and inventory history;

     (4) Sales contracts; and

     (5) Any other factors relevant to ensuring responsible cultivation, production, and

inventory management.

     (e) The commission may adjust the tier designations and/or fees pursuant to the

LC002305/SUB A/3 - Page 22 of 88

commissions rule making authority and in accordance with the provisions of chapter 35 of title 42.

     (f) For purposes of this section, "canopy" means the total surface area within a cultivation

area, including indoor and outdoor cultivation areas, that is dedicated to the cultivation of mature

cannabis plants. The surface area of the canopy must be calculated in square feet and measured

using the outside boundaries of the area and must include all of the area within the boundaries. If

the surface area of the canopy consists of noncontiguous areas, each component area must be

separated by identifiable boundaries. If a tiered or shelving system is used in the cultivation area,

the surface area of each tier or shelf must be included in calculating the area of the canopy. The

canopy does not include the areas within the cultivation area that are used to cultivate immature

cannabis plants and seedlings and that are not used at any time to cultivate mature cannabis plants.

     21-28.11-9. Cannabis product manufacturer or wholesaler.

     (a) A cannabis product manufacturer or processor or wholesaler that does not hold a

cannabis cultivator's license shall have a cannabis product manufacturer's license issued by the

commission. A cannabis product manufacturer licensee may purchase cannabis from cultivators for

processing and shall only transfer or sell cannabis to other entities licensed pursuant to this chapter

or chapter 28.6 of title 21.

     (b) To qualify and hold a cannabis product manufacturer's license under this section the

applicant shall satisfy all qualifications established by the commission to include, but not be limited

to:

     (1) Apply for a license in a manner prescribed by the commission;

     (2) Provide proof that the applicant is twenty-one (21) years of age or older and is a resident

of the state;

     (3) Undergo a criminal record background check pursuant to § 21-28.11-12.1 and on any

terms established by the commission;

     (4) Provide proof that the applicant is current and in compliance with all obligations for

filings and payments for taxes with the division of taxation;

     (5) Has provided a nonrefundable application fee of three hundred dollars ($300); and

     (6) Prior to issuance of any license and for any period of renewal, the applicant shall submit

an annual fee of five thousand dollars ($5,000).

     (c) A cannabis product manufacturer or processor or wholesaler and all agents and

employees shall comply with all rules adopted by the commission and all applicable laws.

     (d) The commission may adjust the application fee or annual license fee pursuant to the

commission rule making authority and in accordance with the provisions of chapter 35 of title 42.

     (e) As a condition of licensing, cannabis product manufacturers or processors or

LC002305/SUB A/3 - Page 23 of 88

wholesalers shall consent and be subject to reasonable inspection by the commission for the

purposes of ensuring and enforcing compliance with this chapter and all rules and regulations

promulgated pursuant to this chapter, to include, but not be limited to, the provisions of § 28-5.1-

14.

     (f) Nothing in this section shall be construed as authorizing a cannabis product

manufacturer or processor or wholesaler to transfer or sell cannabis to a consumer. A direct sale or

transfer from a cannabis product manufacturer licensee to a consumer is prohibited.

     (g) No cannabis or cannabis product shall be sold or otherwise marketed pursuant to this

chapter that has not first been tested by an independent testing laboratory and determined to meet

the commission's testing protocols issued pursuant to § 21-28.11-11.

     (h) Persons issued cannabis product manufacturer licenses shall be subject to the following:

     (1) A licensed cannabis product manufacturer shall notify and request approval from the

commission of any change in his or her name or address within ten (10) days of the change. A

licensed cannabis product manufacturer who fails to notify the commission of any of these changes

is responsible for a civil infraction, punishable by a fine of no more than one hundred fifty dollars

($150).

     (2) When a licensed cannabis product manufacturer notifies the commission of any changes

listed in this subsection (h), the commission shall issue the licensed cannabis product manufacturer

a new registry identification card after the department approves the changes and receives from the

licensee payment of a fee specified in regulation.

     (3) If a licensed cannabis product manufacturer loses his or her license, he or she shall

notify the commission and submit a fee specified in regulation within ten (10) days of losing the

card. The commission shall issue a new license with a new random identification number.

     (4) A licensed cannabis product manufacturer has a continuing duty to notify the

commission of any criminal conviction(s) that occur after the issuance of a license or registration.

A criminal conviction shall not automatically result in suspension or revocation of a license, but

shall be subject to § 21-28.11-12.1;

     (5) If a licensed cannabis product manufacturer violates any provision of this chapter or

regulations promulgated hereunder as determined by the commission, his or her issued license may

be suspended and/or revoked.

     (i) Immunity.

     (1) No licensed cannabis product manufacturer shall be subject to: arrest; prosecution;

search or seizure, except as authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by

subsection (e) of this section; or penalty in any manner, or denied any right or privilege, including,

LC002305/SUB A/3 - Page 24 of 88

but not limited to, civil penalty or disciplinary action by a business, occupational, or professional

licensing board or entity, solely for acting in accordance with this chapter or rules and regulations

promulgated by the commission.

     (2) No principal officers, board members, agents, volunteers, or employees of a licensed

cannabis product manufacturer or wholesaler shall be subject to arrest; prosecution; search or

seizure, except as authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (e)

of this section; or penalty in any manner, or denied any right or privilege, including, but not limited

to, civil penalty or disciplinary action by a business, occupational, or professional licensing board

or entity, solely for working for or with a licensed cannabis product manufacturer or wholesaler to

engage in acts permitted by this chapter or rules and regulations promulgated by the commission.

     (3) No state employee shall be subject to arrest; prosecution; search or seizure, except as

authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (e) of this section; or

penalty in any manner, or denied any right or privilege, including, but not limited to, civil penalty,

disciplinary action, termination, or loss of employee or pension benefits, for any and all conduct

that occurs within the scope of his or her employment regarding the administration, execution,

and/or enforcement of this chapter or rules and regulations promulgated by the commission, and

the provisions of §§ 9-31-8 and 9-31-9 shall be applicable to this section.

     21-28.11-10. Cannabis retail sales license.

     (a) A cannabis retailer shall have a cannabis retail sales license issued by the commission.

A cannabis retail sales licensee may purchase and deliver cannabis and cannabis products from

cannabis establishments and deliver, sell or otherwise transfer cannabis and cannabis products to

cannabis establishments and to consumers.

     (b) The commission shall determine the maximum number of licenses, however a

minimum of three (3) licenses for retail sales of cannabis shall be granted for issuance in each

municipality except for any municipality which has elected against the granting of any licenses

pursuant to the provisions of § 21-28.11-15. One-third (1/3) of all licenses for retail sales in each

municipality shall be reserved for an applicant referred to in § 21-28.11-31(d).

     (c) The commission may grant one additional license for every twenty thousand (20,000)

inhabitants in excess of thirty thousand (30,000) inhabitants, except for any municipality which has

elected against the granting of any licenses pursuant to the provisions of § 21-28.11-15.

     (d) To qualify for issuance of a cannabis retail sales license under this section, an applicant

shall satisfy all qualifications established by the commission to include, but not be limited to:

     (1) Apply for a license in a manner prescribed by the commission;

     (2) Provide proof that the applicant is twenty-one (21) years of age or older and is a resident

LC002305/SUB A/3 - Page 25 of 88

of the state;

     (3) Undergo a criminal record background check pursuant to § 21-28.11-12.1 and on any

terms established by the commission;

     (4) Provide proof that the applicant is current and in compliance with all obligations for

filings and payments for taxes with the division of taxation;

     (5) That the proposed location for the retail sale of cannabis complies with provisions of

municipal zoning and regulations or has been approved by the municipality;

     (6) Has provided a nonrefundable application fee of five hundred dollars ($500); and

     (7) Prior to issuance of any license and for any period of renewal, the applicant shall submit

an annual fee of twenty thousand dollars ($20,000).

     (e) A cannabis retail sales licensee and all agents and employees shall comply with all rules

adopted by the commission and all applicable laws to include, but not be limited to, the provisions

of §§ 28-5.1-14 and 21-28.11-12.1;

     (f) The commission may adjust the application fee or annual license fee pursuant to the

commission's rule making authority and in accordance with the provisions of chapter 35 of title 42.

     (g) As a condition of licensing, cannabis retailers shall consent and be subject to reasonable

inspection by the commission for the purposes of ensuring and enforcing compliance with this

chapter and all rules and regulations promulgated pursuant to this chapter, to include, but not be

limited to, the provisions of § 28-5.1-14.

     (h) No cannabis or cannabis product shall be sold or otherwise marketed pursuant to this

chapter that has not first been tested by an independent testing laboratory and determined to meet

the commission's testing protocols issued pursuant to § 21-28.11-11.

     (i) Persons issued cannabis retail licenses shall be subject to the following:

     (1) A licensed cannabis retailer shall notify and request approval from the commission of

any change in his or her name or address within ten (10) days of the change. A licensed cannabis

retailer who fails to notify the commission of any of these changes is responsible for a civil

infraction, punishable by a fine of no more than one hundred fifty dollars ($150).

     (2) When a licensed cannabis retailer notifies the commission of any changes listed in this

subsection, the commission shall issue the licensed cannabis retailer a new registry identification

card after the department approves the changes and receives from the licensee payment of a fee

specified in regulation.

     (3) If a licensed cannabis retailer loses his or her license, he or she shall notify the

commission and submit a fee specified in regulation within ten (10) days of losing the card. The

commission shall issue a new license with a new random identification number.

LC002305/SUB A/3 - Page 26 of 88

     (4) A licensed cannabis retailer has a continuing duty to notify the commission of any

criminal conviction(s) that occur after the issuance of a license or registration. A criminal

conviction shall not automatically result in suspension or revocation of a license, but shall be

subject to § 21-28.11-12.1;

     (5) If a licensed cannabis retailer violates any provision of this chapter or regulations

promulgated hereunder as determined by the commission, his or her issued license may be

suspended and/or revoked.

     (j) Compassions centers authorized pursuant to § 21-28.6-12 shall not be exempt from the

requirements of § 21-28.11-10.

     (i) Immunity

     (1) No licensed cannabis retailer shall be subject to: arrest; prosecution; search or seizure,

except as authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (g) of this

section; or penalty in any manner, or denied any right or privilege, including, but not limited to,

civil penalty or disciplinary action by a business, occupational, or professional licensing board or

entity, solely for acting in accordance with this chapter or rules and regulations promulgated by the

commission.

     (2) No principal officers, board members, agents, volunteers, or employees of a licensed

cannabis retailer shall be subject to arrest; prosecution; search or seizure, except as authorized

pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (g) of this section; or penalty in

any manner, or denied any right or privilege, including, but not limited to, civil penalty or

disciplinary action by a business, occupational, or professional licensing board or entity, solely for

working for or with a licensed cannabis retailer to engage in acts permitted by this chapter or rules

and regulations promulgated by the commission.

     (3) No state employee shall be subject to arrest; prosecution; search or seizure, except as

authorized pursuant to § 21-28.11-5(a)(18) through (21) and by subsection (g) of this section; or

penalty in any manner, or denied any right or privilege, including, but not limited to, civil penalty,

disciplinary action, termination, or loss of employee or pension benefits, for any and all conduct

that occurs within the scope of his or her employment regarding the administration, execution,

and/or enforcement of this chapter or rules and regulations promulgated by the commission, and

the provisions of §§ 9-31-8 and 9-31-9 shall be applicable to this section.

     21-28.11-11. Independent testing laboratories -- Licensure and oversight.

     (a)(1) The commission shall promulgate regulations for the licensure and oversight of

independent testing laboratories, and shall establish testing protocols for the sampling, testing and

analysis of cannabis, finished cannabis and cannabis products in consultation with the department

LC002305/SUB A/3 - Page 27 of 88

of health. Such regulations shall be based on the most recent standards as issued by the United

States Pharmacopeial Convention and shall address sampling and analysis to characterize the

cannabinoid profile and biological and chemical contaminants, including, but not limited to,

terpenoids, pesticides, plant growth regulators, metals, microbiological contaminants, mycotoxins,

and residual solvents introduced through cultivation of cannabis plants and post-harvest processing

and handling of cannabis, cannabis products and ingredients.

     (2) No cannabis or cannabis product shall be sold or otherwise marketed pursuant to this

chapter that has not first been tested by an independent testing laboratory and determined to meet

the commission's testing protocols issued pursuant to subsection (a)(1) of this section.

     (3) A licensed independent testing laboratory shall transport, store, possess, and test

cannabis in compliance with regulations promulgated by the commission. Nothing in this section

shall be construed as authorizing an independent testing laboratory to transfer or sell cannabis to a

consumer. A direct sale or transfer from an independent testing laboratory licensee to a consumer

is prohibited.

     (4) An independent testing laboratory shall report any results indicating contamination to

the commission, the department of health and the department of environmental management within

seventy-two (72) hours of identification.

     (5) No laboratory agent or employee of an independent testing laboratory shall receive

direct or indirect financial compensation, other than such reasonable contractual fees to conduct

such testing, from any entity for which it is conducting testing pursuant to this chapter.

     (6) No individual who possesses an interest in or is a laboratory agent employed by an

independent testing laboratory, and no immediate family member of that individual, shall possess

an interest in or be employed by a cannabis establishment.

     (b) To qualify for issuance of an independent testing laboratory license under this section,

an applicant shall satisfy all qualifications established by the commission to include, but not be

limited to:

     (1) Apply for a license in a manner prescribed by the commission;

     (2) Provide proof that the applicant is twenty-one (21) years of age or older and is a resident

of the state;

     (3) Undergo a criminal record background check pursuant to § 21-28.11-12.1 and on any

terms established by the commission;

     (4) Provide proof that the applicant is current and in compliance with all obligations for

filings and payments for taxes with the division of taxation;

     (5) Provide a nonrefundable application fee of three hundred dollars ($300) and apply for

LC002305/SUB A/3 - Page 28 of 88

a testing license from the commission prior to testing, processing or transporting cannabis; and

     (6) Prior to the issuance of any license and for any period of renewal, the applicant shall

submit an annual fee of five thousand dollars ($5,000).

     (c) Independent testing laboratories shall be responsible for ensuring the following, as

related to laboratory agents:

     (1)A laboratory agent shall be registered with the commission prior to volunteering or

working at an independent testing laboratory;

     (2) An independent testing laboratory shall apply to the commission for a registration card

for each affiliated laboratory agent by submitting, at a minimum, the name, address, and date of

birth of the laboratory agent.

     (3) A laboratory agent shall undergo a criminal background check pursuant to § 21-28.11-

12.1 and on terms established by the commission, prior to volunteering or working at an

independent testing laboratory. Laboratory agents shall also have a continuing duty to notify the

commission of any criminal conviction(s) that occur after the issuance of a registration card. A

criminal conviction shall not automatically result in suspension or revocation of registration, but

shall be subject to § 21-28.11-12.1;

     (4) An independent testing laboratory shall notify the commission within one business day

if a laboratory agent ceases to be associated with the laboratory, and the laboratory agent's

registration card shall be immediately revoked.

     (d) An independent testing laboratory and all agents and employees shall comply with all

rules adopted by the commission and all applicable laws.

     (e) The commission may adjust the application fee or annual license fee pursuant to the

commission's rule making authority and in accordance with the provisions of chapter 35 of title 42.

     (f) As a condition of licensing, cannabis independent testing laboratories shall consent and

be subject to reasonable inspection by the commission for the purposes of ensuring and enforcing

compliance with this chapter and all rules and regulations promulgated pursuant to this chapter, to

include, but not be limited to, the provisions of § 28-5.1-14.

     (g) Persons issued independent testing laboratory licenses shall be subject to the following:

     (1) A licensed independent testing laboratory shall notify and request approval from the

commission of any change in his or her name or address within ten (10) days of the change. A

licensed independent testing laboratory who fails to notify the commission of any of these changes

is responsible for a civil infraction, punishable by a fine of no more than one hundred fifty dollars

($150).

     (2) When a licensed independent testing laboratory notifies the commission of any changes

LC002305/SUB A/3 - Page 29 of 88

listed in this subsection (g), the commission shall issue the licensed independent testing laboratory

a new registry identification card after the department approves the changes and receives from the

licensee payment of a fee specified in regulation.

     (3) If a licensed independent testing laboratory loses his or her license, he or she shall notify

the commission and submit a fee specified in regulation within ten (10) days of losing the card. The

commission shall issue a new license with a new random identification number.

     (4) A licensed independent testing laboratory has a continuing duty to notify the

commission of any criminal conviction(s) that occur after the issuance of a license or registration.

A criminal conviction shall not automatically result in suspension or revocation of a license, but

shall be subject to § 21-28.11-12.1;

     (5) If a licensed independent testing laboratory violates any provision of this chapter or

regulations promulgated hereunder as determined by the commission, his or her issued license may

be suspended and/or revoked.

     (h) Immunity.

     (1) No licensed cannabis independent testing laboratory shall be subject to: arrest;

prosecution; search or seizure, except as authorized pursuant to § 21-28.11-5(a)(18) through (a)(21)

and by subsection (f) of this section; or penalty in any manner, or denied any right or privilege,

including, but not limited to, civil penalty or disciplinary action by a business, occupational, or

professional licensing board or entity, solely for acting in accordance with this chapter.

     (2) No principal officers, board members, agents, volunteers, or employees of a licensed

cannabis independent testing laboratory shall be subject to arrest; prosecution; search or seizure,

except as authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (f) of this

section; or penalty in any manner, or denied any right or privilege, including, but not limited to,

civil penalty or disciplinary action by a business, occupational, or professional licensing board or

entity, solely for working for or with a licensed cannabis cultivator to engage in acts permitted by

this chapter.

     (3) No state employee shall be subject to arrest; prosecution; search or seizure, except as

authorized pursuant to § 21-28.11-5(a)(18) through (a)(21) and by subsection (f) of this section; or

penalty in any manner, or denied any right or privilege, including, but not limited to, civil penalty,

disciplinary action, termination, or loss of employee or pension benefits, for any and all conduct

that occurs within the scope of his or her employment regarding the administration, execution,

and/or enforcement of this chapter, and the provisions of §§ 9-31-8 and 9-31-9 shall be applicable

to this section.

     21-28.11-12. Licenses for handlers and employees.

LC002305/SUB A/3 - Page 30 of 88

     The commission may promulgate rules and regulations to establish the registration or

licensing of an individual who performs work for or on behalf of a person or entity licensed

pursuant to the provisions of this chapter to include, but not be limited to, employees, independent

contractors, transporters, security personnel, quality control or testing personnel, packagers and

sales personnel. Individuals registered or licensed pursuant to this section shall be required to

comply with all rules adopted by the commission and all applicable laws.

     21-28.11-12.1. Criminal record information- Permitted use.

     (a) The commission shall require all applicants for license and registration under this

chapter to undergo a national criminal background check prior to issuing any license or registration.

The applicant shall apply to the bureau of criminal identification of the department of attorney

general, department of public safety division of state police, or local police department for a

national background check that shall include fingerprints submitted to the Federal Bureau of

Investigation. Upon the discovery of any criminal record information, the bureau of criminal

identification of the department of attorney general, department of public safety division of state

police, or the local police department shall inform the applicant, in writing, of the nature of the

criminal record information. The bureau of criminal identification of the department of attorney

general, department of public safety division of state police, or the local police department shall

also inform the commission, in writing of the nature of the criminal record information. In those

situations in which no criminal record information has been found, the bureau of criminal

identification of the department of attorney general, department of public safety division of state

police, or the local police department shall inform the applicant and the commission, in writing, of

this fact. The applicant shall be responsible for any expense associated with the national

background check.

     (b) All applicants for license or registration have a duty to truthfully and fully disclose prior

criminal convictions to the commission and any information the commission requests related to

said convictions. If issued a license or registration by the commission, licensees have a continuing

duty to truthfully and fully disclose any subsequent criminal convictions to the commission, and

any information the commission requests related to said convictions. Failure to do so may result in

the denial, suspension, or revocation of a license or registration, and criminal prosecution.

     (c) "Conviction" as used throughout this chapter shall mean judgments of conviction

entered by a court subsequent to a finding of guilty or a plea of guilty; and instances where the

defendant has entered a plea of nolo contendere and has received a sentence of probation or a

suspended sentence or incarceration or a fine.

     (d) No person shall be disqualified to practice, pursue, or engage in any business or activity

LC002305/SUB A/3 - Page 31 of 88

licensed or registered by the commission pursuant to the provisions of this chapter, solely or in

part, because of a prior conviction of a crime or crimes unless:

     (1) The underlying crime or crimes involved the distribution of a controlled substance,

including cannabis, to a minor; or

     (2) The underlying crime or crimes substantially relate to the occupation to which the

license or registration applies. Any other state law to the contrary will be superseded by this

provision.

     (e) No occupational license or registration issued by the commission shall be suspended or

revoked, solely or in part, because of a prior or subsequent conviction of a crime or crimes unless

the underlying crime or crimes substantially relate to the occupation to which the license or

registration applies. Any other state law to the contrary will be superseded by this provision.

     (f) In determining if a conviction substantially relates to the occupation for which the

license or registration is sought, the commission shall consider:

     (1) The state's legitimate interest in equal access to employment for individuals who have

had past contact with the criminal justice system;

     (2) The state's legitimate interest in protecting the property and the safety and welfare of

specific individuals or the general public; and

     (3) The relationship of the crime or crimes to the ability, capacity, and fitness required to

perform the duties and discharge the responsibilities of the position of employment or occupation.

     (g) A person who has been convicted of a crime or crimes that substantially relate to the

occupation for which a license is sought shall not be disqualified from the occupation if the person

can show competent evidence of sufficient rehabilitation and present fitness to perform the duties

of the occupation for which the license is sought. The commission shall consider the time elapsed

since the conviction when determining sufficient rehabilitation, as well as any evidence presented

by the applicant regarding:

     (1) Completion of a period of at least two (2) years after release from imprisonment, or at

least two (2) years after the sentencing date for a probation sentence or suspended sentence not

accompanied by incarceration, without subsequent conviction or pending criminal charge;

     (2) The nature, seriousness, and relevance of the crime or crimes for which convicted;

     (3) All circumstances relative to the crime or crimes, including mitigating circumstances

surrounding the commission of the crime or crimes;

     (4) The age of the person at the time the crime or crimes were committed;

     (5) Claims that the criminal record information is in error or inadmissible; and

     (6) All other competent evidence of rehabilitation and present fitness presented, including,

LC002305/SUB A/3 - Page 32 of 88

but not limited to, letters of reference by persons who have been in contact with the applicant since

the applicant's release from any state or federal correctional institution.

     (h) The following criminal records may not be used in connection with any application for

a license or registration submitted pursuant to the provisions of this chapter:

     (1) Juvenile adjudications;

     (2) Records of arrest not followed by a conviction;

     (3) Convictions that have been, pursuant to law, annulled or expunged;

     (4) Misdemeanor convictions for which no jail sentence can be imposed;

     (5) A conviction that does not substantially relate to the occupation for which the license

or registration is sought, as determined by subsection (f) of this section.

     (i) If a commission intends to deny, suspend, or revoke an occupational license, permit, or

registration solely or in part because of the individual's prior conviction of a crime that is

determined to be substantially related to the occupation for which the license or registration applies,

the commission shall notify the individual in writing of the following prior to the final decision:

     (1) The specific conviction(s) that form the basis for the potential denial, suspension, or

revocation and the rationale for deeming the conviction substantially related to the occupation or

activity;

     (2) A copy of the conviction history report, if any, on which the commission relies;

     (3) A statement that the applicant may provide evidence of mitigation or rehabilitation, as

described in subsection (g) of this section; and

     (4) Instructions on how to respond to the potential denial, suspension, or revocation.

     (j) After receiving the notice of potential denial, suspension, or revocation, the individual

shall have thirty (30) business days to respond.

     (k) If a commission denies, suspends, or revokes a license or registration solely or in part

because of the applicant's substantially related conviction, the commission shall issue a final written

decision that addresses the following:

     (1) The specific conviction(s) that form the basis for the denial, suspension, or revocation

and the rationale for deeming the conviction(s) substantially related to the occupation or activity;

     (2) A copy of the conviction history report, if any, on which the commission relies;

     (3) The process for appealing the decision in accordance with chapter 35 of title 42; and

     (4) The earliest date the person may reapply for license or registration which shall not be

longer than two (2) years from the date of the final decision.

     (m) Notwithstanding any general or special law to the contrary, except as otherwise

provided in this chapter, any prior conviction for a crime that has been decriminalized, or is eligible

LC002305/SUB A/3 - Page 33 of 88

for expungement pursuant to § 12-1.3-5, cannot serve as grounds, either solely or in part, for denial,

suspension or revocation of a license or registration pursuant to § 21-28.11-5(a)(11).

     21-28.11-12.2. Labor peace agreement -- Requirements.

     (a) The commission shall require all applicants for cannabis retail sales licenses to submit

an attestation signed by a bona fide labor organization stating that the applicant has entered into a

labor peace agreement with such bona fide labor organization. The maintenance of a labor peace

agreement with such bona fide labor organization by a licensed cannabis retailer shall be an ongoing

material condition of the license for the cannabis retailer. Failure to enter or to make a good faith

effort to enter, into a collective bargaining agreement within two hundred (200) days of the opening

of an establishment of licensed cannabis retailer shall result in the suspension or revocation of the

licensed cannabis retailer's license.

     (b) In ranking retail sale license applications, the commission shall give priority to the

following, regardless of whether there is any competition among applications for a particular

license:

     (1) Applicants that include a significantly involved person or persons lawfully residing in

Rhode Island for at least five (5) years as of the date of the application.

     (2) Applicants that are party to a collective bargaining agreement with a labor organization

that currently represents, or is actively seeking to represent cannabis workers in Rhode Island.

     (3) Applicants that are party to a collective bargaining agreement with a labor organization

that currently represents cannabis workers in another state.

     (4) Applicants that submit an attestation affirming that they will use best efforts to utilize

building trades' labor organizations in the construction or retrofit of the facilities associated with

the licensed entity.

     (5) Applicants that submit an attestation affirming that they have a project labor agreement,

or will utilize a project labor agreement, which is a form of pre-hire collective bargaining agreement

covering terms and conditions of a specific project, including labor issues and worker grievances

associated with any construction or retrofit of facilities, or other applicable project, associated with

the licensed entity.

     21-28.11-13. Taxes.

     (a) The following taxes are imposed on the retail sale of cannabis pursuant to the provisions

of this chapter by individuals licensed pursuant to § 21-28.11-10.

     (1) Sales tax pursuant to the provisions of § 44-18-18;

     (2) A state cannabis excise tax equal to ten percent (10%) of each retail sale as defined in

§ 44-18-8; and

LC002305/SUB A/3 - Page 34 of 88

     (3) A local cannabis excise tax equal to three percent (3%) of each retail sale as defined in

§ 44-18-8.

     (b) The assessment, collection and enforcement of the sales tax pursuant to § 44-18-18, the

state cannabis excise tax, and the local cannabis excise tax shall be pursuant to the provisions of

chapters 18 and 19 of title 44 and paid to the tax administrator by the retailer at the time and in the

manner prescribed for sales tax in § 44-19-10. The retailer shall add the taxes imposed by this

chapter to the sales price or charge, and when added the taxes constitute a part of the price or charge,

is a debt from the consumer or user to the retailer, and is recoverable at law in the same manner as

other debts.

     (c) All sums received by the division of taxation under this section as local cannabis excise

tax or associated amounts as penalties, forfeitures, interest, costs of suit, and fines shall be

distributed at least quarterly and credited and paid by the state treasurer to the city or town where

the cannabis is delivered.

     21-28.11-14. Municipal fees.

     No fee, tax, charge or expense shall be assessed or collected from an individual licensed

pursuant to the provisions of § 21-28.11-10 except for local cannabis excise tax pursuant to § 21-

28.11-13 and any other fee, tax, charge or expense generally assessed or collected from residents

or businesses located in the municipality.

     21-28.11-15. Local option.

     (a) Every city or town, prior to the election to be conducted on November 8, 2022, may by

resolution of the city or town council, cause to be printed on the ballot in an election held on or

before November 8, 2022, the following question: "Shall retail cannabis licenses be issued for the

sale of recreational cannabis in this town (or city)?".

     (b) Upon the adoption of a resolution by the city or town council pursuant to the provisions

of subsection (a) of this section, the commission shall not issue any license for the retail sale of

cannabis pursuant to the provisions of § 21-28.11-10 unless and until the electors of the city or

town vote to approve the retail sale of cannabis for recreational use.

     (c) If a majority of ballots cast on which the electors indicated their choice is against

granting the license, then no license pursuant to § 21-28.11-10 shall be issued by the commission

for retail sales in the city or town.

     21-28.11-16. Local control.

     (a) A city or town may adopt ordinances and by-laws that impose reasonable safeguards

on the operation of cannabis establishments, provided they are not unreasonable and impracticable

and are not in conflict with this chapter or with regulations made pursuant to this chapter and that:

LC002305/SUB A/3 - Page 35 of 88

     (1) Govern the time, place and manner of cannabis establishment operations and of any

business dealing in cannabis accessories, except that zoning ordinances or by-laws shall not operate

to:

     (i) Prevent the conversion of a medical marijuana treatment center licensed or registered

not later than July 1, 2021, engaged in the cultivation, manufacture or sale of cannabis or cannabis

products to a cannabis establishment engaged in the same type of activity under this chapter; or

     (ii) Limit the number of cannabis establishments below the limits established pursuant to

this chapter;

     (2) Restrict the licensed cultivation, processing and manufacturing of cannabis that is a

public nuisance;

     (3) Establish reasonable restrictions on public signs related to cannabis establishments;

provided, however, that if a city or town enacts an ordinance or by-law more restrictive than the

commission's standard, than the local ordinance or by-law shall not impose a standard for signage

more restrictive than those applicable to retail establishments that sell alcoholic beverages within

that city or town;

     (4) Establish a civil penalty for violation of an ordinance or by-law enacted pursuant to this

subsection, similar to a penalty imposed for violation of an ordinance or by-law relating to alcoholic

beverages.

     (b) Notwithstanding the provisions of § 21-28.11-15, the council or highest governing

elected body of a city or town shall, upon the filing with the city or town clerk of a petition signed

by not fewer than ten percent (10%) of the number of voters of such city or town voting at the state

election preceding the filing of the petition and conforming to the provisions of the general laws

relating to initiative petitions at the municipal level, request that the question of whether to allow,

in such city or town, the sale of cannabis and cannabis products for consumption on the premises

where sold be submitted to the voters of such city or town at the next biennial state election. If a

majority of the votes cast in the city or town are not in favor of allowing the consumption of

cannabis or cannabis products on the premises where sold, such city or town shall be taken to have

not authorized the consumption of cannabis and cannabis products on the premises where sold.

     (c) No city or town shall prohibit the transportation of cannabis or cannabis products or

adopt an ordinance or by-law that makes the transportation of cannabis or cannabis products

unreasonable and impracticable.

     (d) If an ordinance or by-law shall be submitted for approval pursuant to subsection (a),

the following procedures shall be followed:

     (1) The city solicitor or town counsel shall prepare a fair and concise summary of the

LC002305/SUB A/3 - Page 36 of 88

proposed ordinance or by-law which shall make clear the number and types of cannabis

establishments which shall be permitted to operate under the proposed ordinance and by-law and

shall be included on the ballot.

     (2) A ballot shall be prepared asking ''Shall this [city or town] adopt the following [by-law

or ordinance]? [solicitor/counsel summary] [full text of by-law or ordinance].''

     (3) If the majority of the votes cast in answer to the question are in the affirmative, the city

or town may adopt the by-law or ordinance, but if the majority of votes cast is in the negative, the

city or town shall not adopt the by-law or ordinance.

     (4) A ballot question under this subsection may be placed on the ballot at a regular or

special election held by the city or town by a vote of the board of selectmen or by the city or town

council, with the approval of the mayor or chief executive officer of a city that does not have a

mayor, and subject to a municipal charter, if applicable.

     21-28.11-17. General conditions for licenses.

     (a) Upon receipt of a complete cannabis establishment license application and the

application fee, the commission shall forward a copy of the application to the city or town in which

the cannabis establishment is to be located, determine whether the applicant and the premises

qualify for the license and has complied with this chapter and shall, within ninety (90) days:

     (1) Issue the appropriate license; or

     (2) Send to the applicant a notice of rejection setting forth specific reasons why the

commission did not approve the license application.

     (b) The commission shall approve a cannabis establishment license application and issue a

license if:

     (1) The prospective cannabis establishment has submitted an application in compliance

with regulations made by the commission, the applicant satisfies the requirements established by

the commission, the applicant is in compliance with this chapter and the regulations made by the

commission and the applicant has paid the required fee;

     (2) The commission is not notified by the applicant that the city or town in which the

proposed cannabis establishment will be located that the proposed cannabis establishment is not in

compliance with an ordinance in effect at the time of application;

     (3) The property where the proposed cannabis establishment is to be located, at the time

the license application is received by the commission, is not located within five hundred (500) feet

of a pre-existing public or private school providing education in kindergarten or any of grades one

through twelve (12), unless a city or town adopts an ordinance or by-law that reduces the distance

requirement;

LC002305/SUB A/3 - Page 37 of 88

     (4) The applicant, and any agents or employees of the applicant as required by the

commission pursuant to its rules and regulations, have undergone a criminal background check

pursuant to § 21-28.11-12.1 and on terms established by the commission; and

     (5) As a condition of licensing, cannabis establishments shall consent and be subject to

reasonable inspection by the commission for the purposes of ensuring and enforcing compliance

with this chapter and all rules and regulations promulgated pursuant to this chapter, to include, but

not be limited to, the provisions of § 28-5.1-14.

     (c) In addition to requirements established by regulation or by a city or town pursuant to

this chapter, a cannabis establishment shall:

     (1) Secure every entrance to the establishment in order that access to areas containing

cannabis is restricted to employees and others permitted by the cannabis establishment to access

the area and to agents of the commission or state and local law enforcement officers and emergency

personnel; and

     (2) Secure its inventory and equipment during and after operating hours to deter and

prevent theft of cannabis, cannabis products and cannabis accessories.

     (d) No cannabis establishment may cultivate, process, test, store or manufacture cannabis

or cannabis products at any location other than at a physical address approved by the commission

and within an area that is enclosed and secured in a manner that prevents access by persons not

permitted by the cannabis establishment to access the area. A greenhouse or outdoor cannabis

cultivation area shall have sufficient security measures to demonstrate that outdoor areas are not

readily accessible by unauthorized individuals, including perimeter security fencing designed to

prevent unauthorized entry.

     (e) No cannabis establishment shall allow cultivation, processing, manufacture, sale or

display of cannabis or cannabis products to be visible from a public place without the use of

binoculars, aircraft or other optical aids, as determined by the commission.

     (f) No cannabis establishment shall refuse representatives of the commission the right at

any time of operation to inspect the entire licensed premises or to audit the books and records of

the cannabis establishment for the purposes of ensuring and enforcing compliance with this chapter

and all rules and regulations promulgated by the commission pursuant to this chapter.

     (g) No cannabis establishment shall allow any person under twenty-one (21) years of age

to volunteer or work for the cannabis establishment.

     (h) No cannabis establishment shall cultivate, manufacture, sell or otherwise transact

business with any products containing cannabinoids other than those that were produced,

distributed and taxed in compliance with this chapter.

LC002305/SUB A/3 - Page 38 of 88

     (i) All cannabis establishments shall be subject to any regulations promulgated by the

commission that specify how cannabis shall be tested, including but not limited to, potency,