HB 1598-FN - AS AMENDED BY THE HOUSE

16Feb2022... 0207h

2022 SESSION

22-2787

04/05

HOUSE BILL 1598-FN

AN ACT legalizing the possession and use of cannabis.

SPONSORS: Rep. Abbas, Rock. 8; Rep. Doucette, Rock. 8; Rep. Espitia, Hills. 31; Rep. Rhodes, Ches. 15; Rep. Osborne, Rock. 4; Rep. Roy, Rock. 32; Rep. Conley, Straf. 13; Rep. McGuire, Merr. 29; Rep. Nunez, Hills. 37

COMMITTEE: Criminal Justice and Public Safety

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AMENDED ANALYSIS

This bill:

I.  Legalizes the possession and use of cannabis for persons 21 years of age and older.

II.  Authorizes the liquor commission to regulate and administer the cultivation, manufacture, testing, and retail sale of cannabis statewide, and makes an appropriation therefor.

III.  Authorizes a municipality to enact an ordinance prohibiting or limiting the number and type of cannabis establishments that may be permitted within the municipality and regulating the time, place, and manner of operation of a cannabis establishment permitted within the municipality.

IV.  Establishes the cannabis control fund and requires funds to be distributed to the department of health and human services, bureau of drug and alcohol services, for education tax relief, public safety agency training purposes, and children's behavioral health services.

V.  Makes an appropriation to the department of health and human services to create public media and social media campaigns to address some of the risks of cannabis use.

VI.  Authorizes the business finance authority to establish a state-chartered, single purpose depository bank to transact business with cannabis establishments licensed under this act, and makes an appropriation therefor.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

16Feb2022... 0207h 22-2787

04/05

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty Two

AN ACT legalizing the possession and use of cannabis.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1  Purpose and Findings.  The general court hereby finds that:

I.  The people of the state of New Hampshire find and declare that the use of cannabis by a person 21 years of age or older should be legal and subject to reasonable regulations.

II.  In the interest of the health and public safety of our citizenry, the people of the state of New Hampshire further find and declare that cannabis should be regulated in a manner similar to alcohol so that:

(a)  Individuals will be required to show proof of age before purchasing cannabis, and that the state shall protect the privacy of an individual's personally identifiable information in cannabis transactions.

(b)  Selling, distributing, or transferring cannabis to minors and other individuals under the age of 21 shall remain illegal.

(c)  Driving under the influence of cannabis or using cannabis while driving shall be illegal.

(d)  A retail cannabis store shall be operated by the state of New Hampshire.

(e)  Cannabis sold in this state shall be tested, labeled, and subject to additional regulations to ensure that consumers are informed and protected.

(f)  The state of New Hampshire shall not collect any transfer tax from any cannabis cultivator or retail sales tax from any consumer.

2  New Subparagraph; Application of Receipts; Cannabis Control Fund.  Amend RSA 6:12, I(b) by inserting after subparagraph (382) the following new subparagraph:

(383)  Moneys deposited in the cannabis control fund established in RSA 318-F:15.

3  Alcoholic Beverages; Statement From Purchaser as to Age.  Amend RSA 179:8, I(d) to read as follows:

(d)  A valid passport [from] issued by the United States or by a country with whom the United States maintains diplomatic relations.

4  Model Drug Dealer Liability Act; Definition of Illegal Drug.  Amend RSA 318-C:4, I to read as follows:

I.  "Illegal drug" means any drug which is a schedule I-IV drug under RSA 318-B, the possession, use, manufacture, sale, or transportation of which is not otherwise authorized by law.

5  New Chapter; Regulation of Cannabis.  Amend RSA by inserting after chapter 318-E the following new chapter:

CHAPTER 318-F

REGULATION OF CANNABIS

318-F:1  Definitions.  In this chapter:

I.  “Alternative treatment center” means an entity as defined in RSA 126-X:1, I.

II.  "Consumer" means a person 21 years of age or older who purchases cannabis or cannabis products for personal use by a person 21 years of age or older, but not for resale.

III.  "Commission" means the liquor commission, division of cannabis enforcement and licensing.

IV.  "Department" means the department of health and human services.

V.  “Disqualifying offense” means a violation of a state or federal controlled substances law that was classified as a felony in the jurisdiction in which the person was convicted, but not including:

(a)  An offense for which the sentence, including any term of probation, incarceration, or supervised release was completed 5 or more years earlier; or

(b)  An offense prior to the effective date of this chapter that consisted of cultivation or possession of an amount of cannabis not exceeding the possession limit.

VI.  “Immature cannabis plant” means a cannabis plant that has not flowered and that does not have buds that may be observed by unaided visual examination.

VII.  "Cannabis" means all parts of the plant of the genus cannabis whether growing or not, the seeds thereof, the resin extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or its resin, including cannabis concentrate.  "Cannabis" shall not include hemp, fiber produced from the stalks, oil, or cake made from the seeds of the plant, sterilized seed of the plant that is incapable of germination, or the weight of any other ingredient combined with cannabis to prepare topical or oral administrations, food, drink, or other product.

VIII.  "Cannabis accessories" or “cannabis paraphernalia” means any equipment, products, or materials of any kind that are used, intended for use, or designed for use in planting, propagating, cultivating, growing, harvesting, composting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, vaporizing, or containing cannabis, or for ingesting, inhaling, or otherwise introducing cannabis into the human body.

IX.  "Cannabis cultivation facility" or “cultivation facility” means an entity registered to cultivate, prepare, and package cannabis, and sell cannabis to retail cannabis stores, to cannabis product manufacturing facilities, and to other cannabis cultivation facilities, but not to consumers.  A cannabis cultivation facility shall not produce cannabis concentrates, tinctures, extracts, or other cannabis products.

X.  "Cannabis establishment" means a cannabis cultivation facility, a cannabis testing facility, a cannabis product manufacturing facility, a retail cannabis store, a cannabis transporter, or any other type of cannabis business authorized and registered by the commission.

XI.  "Cannabis product manufacturing facility" or “product manufacturing facility" means an entity registered to purchase cannabis, to manufacture, prepare, and package cannabis products, and sell cannabis and cannabis products to other cannabis product manufacturing facilities and to retail cannabis stores, but not to consumers.

XII.  "Cannabis products" means concentrated cannabis products and cannabis products that are comprised of cannabis and other ingredients and are intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures.

XIII.  "Cannabis testing facility" or “testing facility” means an entity registered to test cannabis for potency and contaminants.  

XIV.  “Cannabis transporter” means an entity registered to transport cannabis between cannabis establishments.

XV.  “Municipality" means a city, town, or an unincorporated place.

XVI.  “Possession limit” means:

(a)  Four ounces of cannabis in plant form.

(b)  Ten grams of concentrated cannabis, including hashish.

(c)  Cannabis-infused products containing THC purchased from a retail cannabis store which shall be limited to medical use only, for which the purchaser presents documentation permitting use of cannabis for medical purposes, and which shall not contain more than 2 grams of THC.  

XVII.  "Public place" means any place to which the general public has access.

XVIII.  "Retail cannabis store" or “retail store” means a state-operated facility that purchases cannabis from a cannabis cultivation facility, or purchases cannabis and cannabis products from a cannabis product manufacturing facility, and sells, transfers, and delivers cannabis and cannabis products to consumers.

XIX.  "Resident" means a natural person who:

(a)  Is domiciled in New Hampshire; and

(b)  Has maintained a place of abode in New Hampshire for at least the past 2 years, unless the individual was homeless and residing in New Hampshire for at least 51 percent of the last 2 years.

318-F:2  Personal Use of Cannabis.  

I.  Except as otherwise provided in this chapter, the following acts, if undertaken by a person 21 years of age or older, shall not be illegal under New Hampshire law or the law of any political subdivision of the state or be a basis for seizure or forfeiture of assets under New Hampshire law:

(a)  Possessing, consuming, using, displaying, obtaining, purchasing, processing, producing, or transporting an amount of cannabis that does not exceed the possession limit, except that no adult other than one who is acting in his or her capacity as a staffer of a cannabis product manufacturer may perform extractions using solvents other than water, glycerin, propylene glycol, vegetable oil, food-grade ethanol, or carbon dioxide.

(b)  Transferring an amount of cannabis that does not exceed the possession limit to a person who is 21 years of age or older without remuneration.  For purposes of this section, a transfer is for remuneration if cannabis is given away contemporaneously with another transaction between the same parties, if a gift of cannabis is offered or advertised in conjunction with an offer for sale of goods or services, or if the gift of cannabis is contingent upon a separate transaction for goods or services.

(c)  Transferring cannabis, including cannabis products, to a cannabis testing facility.

(d)  Controlling property where the acts described under this section occur.

(e)  Assisting another person who is 21 years of age or older in any of the acts described under this section.

II.  No law enforcement officer employed by an agency that receives state or local government funds shall expend any state or local resources, including the officer’s time, to effect any arrest or seizure of cannabis, or conduct any investigation, on the sole basis of activity the officer believes to constitute a violation of federal law if the officer has reason to believe that such activity is in compliance with this chapter, nor shall any such officer expend any state or local resources, including the officer’s time, to provide any information or logistical support related to such activity to any federal law enforcement authority or prosecuting entity.

318-F:3  Personal Cultivation Prohibited.  No person shall cultivate cannabis plants unless authorized by law to do so.

318-F:4  Smoking or Vaporizing of Cannabis in Public Prohibited; Penalty.  No person shall smoke or vaporize cannabis in an area accessible to the public.  Any person who violates this section shall be guilty of a violation, may be fined not more than $500, and shall forfeit all cannabis and cannabis products.

318-F:5  Smoking or Vaporizing of Cannabis in a Moving Vehicle Prohibited; Penalty.

I.  No operator or passenger shall consume cannabis while driving, attempting to drive, or permit a passenger in a motor vehicle to drive a motor vehicle on a way, or while operating or attempting to operate an off-highway recreational vehicle, snowmobile, boat, vessel, aircraft, or other motorized device used for transportation.

II.  No person shall smoke or vaporize cannabis while such person is a passenger in a motor vehicle that is being driven on any public way or boat, vessel, aircraft, or other motorized device used for transportation in or on any public way.

III.  Any person who violates this section who is the operator of a motor vehicle on a way, or while operating or attempting to operate an off-highway recreational vehicle, snowmobile, boat, vessel, aircraft, or other motorized device used for transportation, shall be guilty of a violation, may be fined not more than $500, and shall have his or her driver's license suspended for up to 3 months for the first offense, and shall be guilty of a misdemeanor, and may be fined not more than $1,000 and have his or her driver's license suspended for up to 6 months, or both, for a second or subsequent offense.

IV.  The license suspension as described in this section shall only apply a person who violates this section and who is the operator of the motor vehicle, recreational vehicle, snowmobile, boat, vessel, aircraft, or other motorized device used for transportation.

V.  When determining whether a person violated an offense under the section, the issue of whether the operator of the motor vehicle is impaired shall not be an element of the offense.  A person who consumes or permits another to consume cannabis in a motor vehicle, recreational vehicle, snowmobile, boat, vessel, aircraft, or other motorized device used for transportation he or she is operating shall be liable under this section without regard to fault.

VI.  In this section, “way” shall have the same meaning as in RSA 265-A:44.

318-F:6  Cannabis Accessories Authorized.

I.  Except as provided by this section, it shall not be illegal under New Hampshire law or be a basis for seizure or forfeiture of assets under New Hampshire law for a person 21 years of age or older to manufacture, possess, or purchase cannabis accessories, or to distribute or sell cannabis accessories to a person who is 21 years of age or older.

II.  Except as provided by this section, a person who is 21 years of age or older, or a business entity, may manufacture, possess, obtain, and purchase cannabis paraphernalia, and may distribute, deliver, or sell cannabis paraphernalia to a person who is 21 years of age or older.

III.  No person or entity shall manufacture, distribute, or sell cannabis accessories that violate reasonable regulations enacted by the commission.  Any person or entity that violates this paragraph shall be guilty of a violation for a first offense and subject to a fine of up to $1,000 and forfeiture of the cannabis accessories.  A person shall be guilty of a class A misdemeanor for a second or subsequent offense and shall forfeit the cannabis accessories.

318-F:7  Regulation of Cannabis.  No later than October 1, 2022, the commission shall adopt rules, pursuant to RSA 541-A, for the registration and regulation of cannabis establishments.  No later than December 1, 2022, the commission shall adopt rules, pursuant to RSA 541-A, relative to:

I.  The registration and regulation of all other cannabis establishments.

II.  The manufacture and sale of cannabis accessories.

III.  The requirements for the transportation of cannabis between cannabis establishments, including documentation that shall accompany any cannabis being transported by cannabis cultivation facilities.

IV.  Procedures for the delivery of cannabis to consumers, including documentation that shall accompany any cannabis being transported to consumers.

V.  Procedures for hearings on civil fines and suspensions and revocations of licenses.

VI.  Reasonable security requirements for each type of cannabis establishment, which may be varied based on the size of the cannabis establishment.

VII.  Health and safety rules, including regarding the packaging and preparing of cannabis and restricting the use of pesticides that may be dangerous to cannabis consumers.

VIII.  Restrictions on the advertising, signage, marketing, and display of cannabis, including prohibiting the design of advertising, signage, and marketing that would target or appeal to minors.

IX.  Labeling requirements for cannabis products, including:

(a)  Mandating the disclosure of the THC content of each product.

(b)  Requirements for packaging to ensure it is not designed to appeal to minors.

(c)  Establishing the amount of THC that may be included in each serving of a cannabis product.

X.  Requirements for the testing of cannabis.

318-F:8  Registration Procedures for Cannabis Establishments.

I.  Each application for a registration to operate a cannabis establishment shall be submitted to the commission.

II.  Each application shall include both the fee established by the commission and a $250 fee for the municipality to review the application.

III.  The liquor commission shall:

(a)  Accept and process applications beginning no later than May 1, 2023 for cannabis cultivation facilities and beginning no later than August 1, 2023 for cannabis product manufacturing facilities, cannabis transporters, and cannabis testing facilities.

(b)  Immediately forward a copy of each application and the municipal fee to the municipality in which the applicant desires to operate the cannabis establishment.

(c)  Issue a registration to the applicant within 90 days after receipt of an application unless:

(1)  The commission finds the applicant is not in compliance with the requirements of this chapter or rules adopted under this chapter;

(2)  The commission is notified by the relevant municipality that the applicant is not in compliance with an ordinance adopted pursuant to this chapter and in effect at the time of application; or

(3)  More qualified applicants have applied than the number of registrations available in the municipality, and the applicant was not selected.

IV.  Each registration applies to a single parcel of real property.  Any additional address requires a separate application and registration.

V.  A renewal application may be submitted up to 90 days prior to the expiration of the cannabis establishment’s registration.  The renewal application shall be granted within 30 days of its submission unless the applicant has not paid the fee, the cannabis establishment’s registration is suspended or revoked, or the cannabis establishment has a pattern of violations of this law, the rules issued pursuant to it, or municipal regulations.

318-F:9  Enactment of Municipal Ordinances.  

I.  A municipality may enact an ordinance prohibiting or limiting the number and type of cannabis establishments that may be permitted within the municipality and regulating the time, place, and manner of operation of a cannabis establishment, which is permitted within the municipality.

II.  A municipality may enact an ordinance specifying the entity within the municipality that shall be responsible for reviewing applications submitted for a registration to operate a cannabis establishment within the municipality.  The entity designated by the municipality shall be responsible for indicating whether the application is in compliance with municipal ordinances.

318-F:10  Residency Required.  

I.  Except as provided in this section, any person applying for a cannabis establishment registration shall have been a resident, or shall have at least one director, officer, partner, member, or manager who has been a New Hampshire resident, for at least 3 years immediately preceding the date of application.

II.  This section shall not apply to an applicant for a testing facility registration.

318-F:11  Background Checks Required.

I.  A cannabis establishment shall conduct a state and federal background check prior to making a final offer of employment to a prospective manager or operator.

II.  No cannabis establishment shall employ any person who has been convicted of a disqualifying offense as an officer, director, general partner, member, or manager.  No person convicted of a disqualifying offense shall work as an officer, director, general partner, member, or manager of a cannabis establishment or serve on the board of a cannabis establishment.

318-F:12  Restrictions on Location.  No cannabis establishment shall operate, nor shall a prospective cannabis establishment apply for a registration, if the establishment would be located within 1,000 feet of the property line of a pre-existing public or private elementary or secondary school.

318-F:13  Proof of Purchaser's Identity.

I.  For the purposes of this chapter, any person or entity making the sale of cannabis or cannabis accessories to any purchaser whose age is in question may accept any official documentation listed in RSA 179:8 as proof that the purchaser is 21 years of age or older.

II.  The establishment of all of the following facts by a retail cannabis store or an agent or employee of a retail cannabis store making a sale of cannabis or cannabis accessories to a person under the age of 21 shall constitute an affirmative defense to any prosecution for such sale:

(a)  That the person presented what an ordinary and prudent person would believe to be valid documentation of a type listed in RSA 179:8.

(b)  That the sale was made in good faith relying upon such documentation and appearance in the reasonable belief that the person was 21 years of age or older.

318-F:14  Professional License Holder Immunity.  

I.  A holder of a professional or occupational license shall not be subject to professional discipline for providing advice or services related to cannabis establishments or applications to operate cannabis establishments on the basis that cannabis is illegal under federal law.

II.  An applicant for a professional or occupational license shall not be denied a license based on previous employment related to cannabis establishments operating in accordance with state law.

318-F:15  Cannabis Control Fund Established.

I.  There is established in the state treasury a nonlapsing fund to be known as the cannabis control fund.  Moneys credited to the fund shall include all moneys deposited into the fund by the commission pursuant to this chapter.

II.  Beginning July 1, 2023, and each biennium thereafter, the commission shall include the cost of administration of this chapter in the commission's efficiency expenditure request pursuant to RSA 9:4.  Appropriations for such costs shall be a charge against the fund.

III.  The commission shall credit all fees and civil penalties imposed under this chapter and all other related moneys received from public or private sources to the fund.

IV.  After deducting appropriations charged to the fund for the cost of administration of this chapter, and after repayment to the general fund of any funds initially appropriated to the liquor commission, the allocation of remaining funds, subject to appropriation, shall be as follows:

(a)  The sum of $25,000,000 annually to the department of health and human services, bureau of drug and alcohol services for use in evidence-based, voluntary programs for substance use-related education, prevention, treatment, and recovery that includes mental health treatment that is contributing to substance use disorder, and for scientifically and medically accurate public education campaigns educating youth and adults about the health and safety risks of alcohol, tobacco, cannabis, and other substances, including education campaigns separately targeting youth and adults that provide medically and scientifically accurate information about the health and safety risks posed by cannabis use, including driving under the influence of cannabis.

(b)  Of the remaining funds:

(1)  Ninety percent to offset the education tax imposed on all persons and property taxable pursuant to RSA 76:8.  In the event the funds generated exceeds the amount the commissioner of the department of revenue is authorized to generate, the funds in subparagraph (b)(1) shall be used as follows:

(A) Seventy-five percent annually to the department of health and human services, bureau of drug and alcohol services, for use in evidence-based, voluntary programs for substance use-related education, prevention, treatment, and recovery that includes mental health treatment that is contributing to substance misuse, and for scientifically and medically accurate public education campaigns educating youth and adults about the health and safety risks of alcohol, tobacco, cannabis, and other substances, including education campaigns separately targeting youth and adults that provide medically and scientifically accurate information about the health and safety risks posed by cannabis use, including driving under the influence of cannabis.

(B)  Twenty-five percent to public safety agencies, including police, fire, and rescue agencies, for the hiring and training of additional drug recognition experts, for advanced roadside impaired driving enforcement training, and to assist in responding to drug overdose incidents.

(2)  Five percent to public safety agencies, including police, fire, and rescue agencies, for the hiring and training of additional drug recognition experts, for advanced roadside impaired driving enforcement training, and to assist in responding to drug overdose incidents.

(3)  Five percent annually to the department of health and human services, division for behavioral health, bureau of children's behavioral health to be used for children’s behavioral health services.

318-F:16  Availability of Banking Services.

I.  Not later than 6 months after the effective date of this section, the liquor commission shall conduct and complete a study on the availability of financial institutions that will provide banking and financial services to cannabis establishments authorized by this chapter and service providers for such persons, and for other purposes.  The commission shall conduct one or more public hearings to gather information relevant to the topic of this study, including receiving information from financial institutions authorized to conduct business within New Hampshire with respect to whether they intend to offer such banking and financial services, including but not limited to: any banking business as that term is defined in RSA 383-B:3-301; any financial product or service permitted to be provided by a state or national bank or a federal or state credit union; and the authorizing, processing, clearing, settling, billing, transferring for deposit, transmitting, delivering, instructing to be delivered, reconciling, collecting, or otherwise effectuating or facilitating of payments or funds, where such payments or funds are made or transferred by any means, including the use of credit cards, debit cards, other payment cards, or other access devices, accounts, original or substitute checks, or electronic funds transfers.  The commission shall make a determination, after public hearing, whether cannabis establishments authorized to conduct activities pursuant to this chapter shall have reasonable and effective access to such financial services within New Hampshire with respect to such activities.  The commission shall make a further determination, after public hearing, whether financial institutions that may provide such financial services, or any other ancillary service provider, will be reasonably likely to comply with all laws and regulations issued under the federal Bank Secrecy Act, 31 U.S.C. section 5311, et seq., including the filing of required suspicious activity reports.  The commission shall make such other findings and determinations as it deems necessary and appropriate to complete the study required by this paragraph.

II.  Upon completion of the study required by paragraph I, the commission shall issue and publish a final report of its analysis and determinations.  The commission shall provide a copy of the report to the governor, the speaker of the house of representatives, and the senate president.

318-F:17  Contingent Financial Services.

I.  If the study and report required by RSA 318-F:16 does not make an affirmative determination that cannabis establishments authorized to conduct activities pursuant to this chapter shall have reasonable and effective access to such financial services within New Hampshire with respect to such activities, then the commission shall be authorized to provide written notice to the commissioner of the banking department and the executive director of the business finance authority that the commission has been unable to make such an affirmative determination.

II.  Upon receipt of the notice described in paragraph I, the business finance authority shall be authorized to incorporate, own, and operate a single purpose depository bank in accordance with this section.  The single purpose depository bank shall be created as a body corporate and politic under RSA 293-A, having a distinct legal existence separate from the state and not constituting a department of state government, having the powers and jurisdiction enumerated in this section and such other and additional powers as shall be conferred upon it by the legislature.  The single purpose depository bank is hereby deemed to be a public instrumentality and the exercise by the bank of the powers conferred upon it by the legislature shall be deemed and held to be the performance of public and essential governmental functions of the state.

(a)  The authority shall be authorized to file an application with the banking department in accordance with RSA 383-A:3-305, with the authority as organizer of the single purpose depository bank within the meaning of RSA 383-A:3-302.

(b)  The organizational instrument of the single purpose depository bank shall be articles of incorporation consistent with the requirements of RSA 293-A:2.02, and shall state that the name of the proposed bank shall be the “New Hampshire Public Bank” and that the purpose of the corporation is to serve as state-chartered depository bank with all the powers of a depository bank under RSA 383-B, with the sole exception that the deposits accepted by the bank shall only be deposits of the commission with respect to the proceeds realized from the commission’s conduct of cannabis activities pursuant to this chapter.  These powers shall include the power to invest or deposit funds for its own account moneys that it may receive or hold under this section.  The organizational instrument shall prohibit the bank from soliciting, receiving, or accepting deposits from any person other than the commission with respect to the cannabis activities conducted by the commission.  Notwithstanding RSA 383-A:5-502, the organizational instrument shall state that the board of directors of the bank shall consist solely of the executive director of the business finance authority, the attorney general of the state, and the state treasurer, each of whom shall serve as directors ex officio with voting powers.  The organizational instrument shall include such other provisions as deemed appropriate by the authority and as may be required by the banking department consistent with the public purposes of this section.

(c)  The banking department shall conduct an investigation of the authority’s application consistent with RSA 383-A and RSA 383-B.

(d)  Upon the filing of the organizational instrument in accordance with RSA 383-A:3-312, the sum of $10,000,000 for the fiscal year ending June 30, 2023 is hereby appropriated to the business finance authority for the sole purpose of providing the initial capitalization of the proposed bank.  Such appropriation shall be exempt from the requirements of RSA 162-A:30.  The governor is authorized to draw a warrant for said sum from any money in the treasury not otherwise appropriated.

(e)  It is the intent of this chapter to protect directors, officers, trustees, officials, and employees of the proposed bank who may become subject to claims and civil actions arising from acts committed or performed in the course of their official duties under this section, and all such persons shall be eligible for protection under and consistent with RSA 99-D.

6  The Liquor Commission; Liquor Investigator Training.  Amend RSA 176:9 to read as follows:

176:9  Liquor Investigator; Training.

I.  The commission may, subject to rules adopted by the director of personnel, employ and dismiss liquor investigators.  Liquor investigators shall, under the direction of the commission, investigate any or all matters arising under this title.  The commission may select and retain additional investigators through a competitive bidding process approved by the governor and the executive council.  Any such contract with a third-party agent shall be for consulting services relating to marketing and regulation of cannabis for purposes of cultivation, manufacturing, testing, and retail sale.

II.  Any new liquor investigator employed by the commission under this section after August 13, 1985, shall, within 6 months of employment, satisfactorily complete a preparatory police training program as provided by RSA 106-L:6, unless he or she has already completed such a program.

III.  The commissioner, deputy commissioner, assistant, or liquor investigator may enter any place where liquor, beverages, tobacco products, e-cigarettes, or cannabis are sold [or], manufactured, or cultivated at any time, and may examine any license or permit issued or purported to have been issued under the terms of this title.  They shall make complaints for violations of this title.

7  New Paragraph; The Liquor Commission; Commission to Sell.  Amend RSA 176:11 by inserting after paragraph II the following new paragraph:

III.(a)  It shall be the duty of the commission to buy and have in its possession cannabis for sale in the manner provided in this title.  Such cannabis shall be free from adulteration and misbranding within the meaning of the provisions of RSA 146.  All cannabis sold for medicinal use shall conform to the standards and tests for such cannabis under New Hampshire law at the time of sale.  All purchases of cannabis shall be made by the commission directly and not through the department of administrative services.  The commission shall be subject to all the provisions of RSA 9.

(b)  In the event that the commission determines New Hampshire cannabis revenues are being diverted by actions taken by persons holding any type of cannabis license, the commission may take such marketing or merchandising action, or both, as it deems necessary, including sanctions against the competing entities.

8  New Paragraph; The Liquor Commission; Rulemaking.  Amend RSA 176:14 by inserting after paragraph IX the following new paragraph:

IX-a.  Cannabis licenses, including:

(a)  Separate licenses for cultivation, manufacturing, and testing of cannabis, and dual licenses as the commission may approve.  There shall be no more than 15 cannabis cultivation facilities licensed at any time.

(b)  Requirements and restrictions for each type of license.

(c)  Procedures and forms to apply for or renew a license.

(d)  Safekeeping of licenses.

(e)  Authorized expansion of a licensed facility and procedures for authorization.

(f)  Procedures to approve exceptions of license requirements, restrictions, and limitations.

(g)  Training and continuing education required or recommended for licensees

IX-b.  Cannabis licensee operations, including:

(a)  Procedures for on-premises and off-premises licensees to purchase cannabis.

(b)  Credit and billing procedures, including fees for late payment.

(c)  Bailment requirements, including fees.

(d)  Restrictions on packaging, promotions, signage, and operating hours.

(e)  Relations between types of licensees.

(f)  Collection of additional fees required under RSA 178:6, VI, RSA 178:8, IV, and RSA 178:26.

9  Controlled Drug Act; Definitions.  Amend the introductory paragraph in RSA 318-B:1, X-a(k) to read as follows:

(k)  Objects used or intended for use or customarily intended for use in ingesting, inhaling, or otherwise introducing [marijuana,] cocaine[, hashish, or hashish oil] into the human body, such as:

10  Controlled Drug Act; Penalties.  Amend the introductory paragraph in RSA 318-B:26, I to read as follows:

I.  Any person who manufactures, sells, prescribes, administers, or transports or possesses with intent to sell, dispense, or compound any controlled drug, controlled drug analog or any preparation containing a controlled drug, except as authorized in this chapter or as otherwise authorized by law; or manufactures, sells, or transports or possesses with intent to sell, dispense, compound, package or repackage (1) any substance which he or she represents to be a controlled drug, or controlled drug analog, or (2) any preparation containing a substance which he or she represents to be a controlled drug, or controlled drug analog, shall be sentenced as follows, except as otherwise provided in this section:

11  Controlled Drug Act; Penalties.  Amend the introductory paragraph in RSA 318-B:26, II to read as follows:

II.  Any person who knowingly or purposely obtains, purchases, transports, or possesses actually or constructively, or has under his control, any controlled drug or controlled drug analog, or any preparation containing a controlled drug or controlled drug analog, except as authorized in this chapter or as otherwise authorized by law, shall be sentenced as follows, except as otherwise provided in this section:

12  Controlled Drug Act; Penalties.  Amend RSA 318-B:26, II(c)-(e) to read as follows:

(c)  In the case of more than 3/4 ounce of marijuana or more than 5 grams of hashish, including any adulterants or dilutants[,] is possessed by a person who is under 21 years of age, or, in the case of an amount exceeding the possession limit defined in RSA 318-F:1 possessed by a person who is 21 years of age or older, the person shall be guilty of a misdemeanor.  [In the case of marijuana-infused products possessed by persons under the age of 21 or marijuana-infused products as defined in RSA 318-B:2-e, other than a personal-use amount of a regulated marijuana-infused product as defined in RSA 318-B:2-c, I(b), that are possessed by a person 21 years of age or older, the person shall be guilty of a misdemeanor.]

(d)  In the case of 3/4 ounce or less of marijuana or 5 grams or less of hashish, including any adulterants or dilutants, that is possessed by a person who is under 21 years of age, the person shall be guilty of a violation pursuant to RSA 318-B:2-c.  [In the case of a person 21 years of age or older who possesses a personal-use amount of a regulated marijuana-infused product as defined in RSA 318-B:2-c, I(b), the person shall be guilty of a violation pursuant to RSA 318-B:2-c.]

(e)  In the case of a residual amount of a controlled [substance,] drug, other than marijuana [as defined in RSA 318-B:1, XXIX-a], a person shall be guilty of a misdemeanor if the person is not part of a service syringe program under RSA 318-B:43.

13  Controlled Drug Act; Penalties.  Amend RSA 318-B:26, III(a) to read as follows:

(a)  [Except as provided in RSA 318-B:2-c,] Controls any premises or vehicle where he or she knows a controlled drug or its analog, other than marijuana, is illegally kept or deposited;

14  Personal Possession of Marijuana.  Amend RSA 318-B:2-c to read as follows:

318-B:2-c  [Personal] Possession of Marijuana by a Person Under 21 Years of Age.

[I.]  In this section:  

[(a)] I.  "Marijuana" includes the leaves, stems, flowers, and seeds of all species of the plant genus cannabis, but shall not include the resin extracted from any part of such plant and every compound, manufacture, salt, derivative, mixture, or preparation from such resin including hashish, and further, shall not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks, fiber, oil or cake, or the sterilized seed of such plant which is incapable of germination.

[(b)  "Personal-use amount of a regulated marijuana-infused product" means one or more products that is comprised of marijuana, marijuana extracts, or resins and other ingredients and is intended for use or consumption, such as, but not limited to, edible products, ointments, and tinctures, which was obtained from a state where marijuana sales to adults are legal and regulated under state law, and which is in its original, child-resistant, labeled packaging when it is being stored, and which contains a total of no more than 300 milligrams of tetrahydrocannabinol.]

II.  Except as provided in RSA 126-X, any person under 21 years of age who knowingly possesses 3/4 of an ounce or less of marijuana, including adulterants or dilutants, shall be guilty of a violation, and subject to the penalties provided in paragraph V.

III.  Except as provided in RSA 126-X, any person under 21 years of age who knowingly possesses 5 grams or less of hashish, including adulterants or dilutants, shall be guilty of a violation, and subject to the penalties provided in paragraph V.

IV.  [Except as provided in RSA 126-X, any person 21 years of age or older possessing a personal-use amount of a regulated marijuana-infused product shall be guilty of a violation, and subject to the penalties provided in paragraph V.  Persons 18 years of age or older and under 21 years of age who knowingly possess marijuana-infused products shall be guilty of a misdemeanor.

V.](a)  Except as provided in this paragraph, any person 18 years of age or older who is convicted of violating paragraph II or III[, or any person 21 years of age or older who is convicted of violating paragraph IV] shall be subject to a fine of $100 for a first or second offense under this paragraph, or a fine of up to $300 for any subsequent offense within any 3-year period; however, any person convicted based upon a complaint which alleged that the person had 3 or more prior convictions for violations of paragraph II[,] or III[ or IV], or under reasonably equivalent offenses in an out-of-state jurisdiction since the effective date of this paragraph, within a 3-year period preceding the fourth offense shall be guilty of a class B misdemeanor.  The offender shall forfeit the marijuana[, regulated marijuana-infused products,] or hashish to the state.  A court shall waive the fine for a single conviction within a 3-year period upon proof that person has completed a substance abuse assessment by a licensed drug and alcohol counselor within 60 days of the conviction.  A person who intends to seek an assessment in lieu of the fine shall notify the court, which shall schedule the matter for review after 180 days.  Should proof of completion of an assessment be filed by or before that time, the court shall vacate the fine without a hearing unless requested by a party.

(b)  Any person under 18 years of age who is convicted of violating paragraph II or III shall forfeit the marijuana or hashish and shall be subject to a delinquency petition under RSA 169-B:6.

[VI.] V.(a)  Except as provided in this section, no person shall be subject to arrest for a violation of paragraph II[,] or III[, or IV] and shall be released provided the law enforcement officer does not have lawful grounds for arrest for a different offense.

(b)  Nothing in this chapter shall be construed to prohibit a law enforcement agency from investigating or charging a person for a violation of RSA 265-A.

(c)  Nothing in this chapter shall be construed as forbidding any police officer from taking into custody any minor who is found violating paragraph II[,] or III[, or IV].

(d)  Any person under 21 years of age who is in possession of an identification card, license, or other form of identification issued by the state or any state, country, city, or town, or any college or university, who fails to produce the same upon request of a police officer or who refuses to truthfully provide his or her name, address, and date of birth to a police officer who has informed the person that he or she has been found to be in possession of what appears to the officer to be 3/4 of an ounce or less of marijuana[, a personal-use amount of a regulated marijuana-infused product,] or 5 grams or less of hashish, may be arrested for a violation of paragraph II[,] or III[, or IV].

[VII.] VI.  All fines imposed pursuant to this section shall be deposited into the alcohol abuse prevention and treatment fund established in RSA 176-A:1 and utilized for evidence-informed substance abuse prevention programs.

[VIII.] VII.(a)  No record that includes personally identifiable information resulting from a violation of this section shall be made accessible to the public, federal agencies, or agencies from other states or countries.

(b)  Every state, county, or local law enforcement agency that collects and reports data for the Federal Bureau of Investigation Uniform Crime Reporting Program shall collect data on the number of violations of paragraph II[,] or III[, or IV].  The data collected pursuant to this paragraph shall be available to the public.  A law enforcement agency may update the data annually and may make this data available on the agency's public Internet website.

15  Alcohol or Drug Impairment; Possession of Drugs.  Amend RSA 265-A:43 to read as follows:

265-A:43  Possession of Drugs.  Any person who drives on any way a vehicle while knowingly having in his or her possession or in any part of the vehicle a controlled drug or controlled drug analog in violation of the provisions of RSA 318-B shall be guilty of a misdemeanor, and his or her license shall be revoked or his or her right to drive denied for a period of 60 days and at the discretion of the court for a period not to exceed 2 years.  This section shall not apply to the possession of marijuana or hashish as provided in RSA 318-B:2-c[, or a personal-use amount of a regulated marijuana-infused product as defined in RSA 318-B:2-c, I(b)].

16  Appropriation; Liquor Commission.  The sum of $14,000,000 for the fiscal year ending June 30, 2023 is hereby appropriated to the liquor commission for the cost of administration of RSA 318-F.  The governor is authorized to draw a warrant for said sum from any money in the treasury not otherwise appropriated.

17  Appropriation; Department of Health and Human Services.  The sum of $150,000 for the fiscal year ending June 30, 2023 is hereby appropriated to the department of health and human services to create public media and social media campaigns which would be launched prior to the availability of cannabis for purchase from a cannabis retail store to address growing false perceptions of harmlessness and the impact of cannabis use for youth, safe storage of cannabis and use around children, increased motor vehicle accident risks, increased risk of psychosis, and potential risks of use during pregnancy.

18  Repeal.  RSA 318-B:1, X-a(g), relative to separation gins and sifters used or intended for use with cannabis, is repealed.  

19  Effective Date.  This act shall take effect upon its passage.

LBA

22-2787

Amended 3/11/22

HB 1598-FN- FISCAL NOTE

AS AMENDED BY THE HOUSE (AMENDMENT #2022-0207h)

AN ACT legalizing the possession and use of cannabis.

FISCAL IMPACT:      [ X ] State              [ X ] County               [ X ] Local              [    ] None

METHODOLOGY:

The Banking Department makes the following assumptions concerning the fiscal impact of this bill:

• The Banking Department will charge the proposed state bank an assessment as it does for all state-chartered banks the Banking Department examines.  The amount of assessment is based on each bank’s assets proportionally.  The amount of assessment charged to the proposed state bank is indeterminable until such time as pro forma financial reports are generated.
• The Banking Department assumes that it will be able to bill the state bank for visitations and examinations and such charges would be paid by the State’s general fund.  Since the bank would be a newly chartered bank, the Department will conduct a visitation within the first 6 months of charting, and one complete exam annually through FY 2025.  Thereafter, the state bank would be examined every 18 months or more if necessary, pursuant to RSA 383:9-d.
• The cost of the visitation shall be the per diem rate as calculated pursuant to RSA 383:11.  The Banking Department used the current per diem rate for period of 32.5 days for the 6-month visitation.  The cost of each annual examination shall be the per diem rate for period 65 days for each annual examination. The 65-day estimate is the minimum estimated length of each examination.  If problems are discovered during the examination, more time will be required. Based upon the complexity of the cannabis-related state bank and potential federal issues, additional examination staff and time may be required.
• The Banking Department assumed an increase in the examiner per diem fee due to inflation at 4% for the applicable years.

Based on these assumptions, the Banking Department estimated the fiscal impact of the bill as follows.

FY 2023: One six-month visitation at 32.5 examiner days, 32.5 days x $944.32    $30,690

One annual examination 65 days x $944.32                          $61,381

Additional department resources                                                Indeterminable

                Total:  In excess of $92,071        

 FY 2024: One annual examination 65 days x $982.09                      $63,875

Additional department resources                                                  Indeterminable

                           Total:   In excess of $63,875         

 FY 2025: One annual examination 65 days x $1021.37                                         $66,389

             Additional department resources                                                 Indeterminable

                          Total:   In excess of $66,389     

The New Hampshire Business Finance Authority indicates this bill directs the State to spend six months identifying if private market conventional banking services will be available to support the cannabis activities authorized by the legislation. If private market conventional banking services are unavailable the legislation directs the NH Business Finance Authority (BFA) to create a state-chartered bank for the limited purpose of providing essential banking services for the state-owned and operated cannabis operations.  The bill would capitalize the bank with an initial appropriation of $10,000,000. Since the special purpose bank would be established under the BFA, no additional state funding would be provided for its operations without further legislative action.  The BFA notes this section of the bill is only activated if the private market conventional banking sector cannot provide banking services for the state-owned cannabis operations. Therefore, the likelihood of incurring the $10,000,000 expense is described as indeterminable.

The Liquor Commission indicates this bill would assign cannabis sale and licensure responsibilities to the Liquor Commission including the responsibility to set up a retail store operations system, regulate the licensing and enforcement of the provisions within the bill and provide the revenues that will be earmarked for various agencies and public health and law enforcement functions.  The bill appropriates the sum of $14,000,000 for the fiscal year ending June 30, 2023 to the Commission for the administration of RSA 318-F.  The Commission believes the $14,000,000 appropriation is not adequate to accomplish the expectations set out in the bill.  The Commission has provided a proposed budget reflecting the projected costs to implement a retail operation and license and enforce the provisions of the bill.  This budget is based on the following assumptions:

• The Commission assumes it will open and operate 10 separate retail locations for the sale of cannabis.  These stores would not be located within existing liquor and wine outlets and be separately branded to keep the cannabis operations separate from alcohol operations.  This would involve leasing locations in communities with ordinances that allow for cannabis store operations, equipping locations with furniture and equipment necessary for the operation of retail outlets and the enforcement of the requirements of the bill.
• Since the Commission would not use existing liquor stores to sell cannabis the program would require new staff dedicated to the cannabis mission.  The Commission’s best staffing estimate assumes a total of 70 new positions within the agency at an annual salary and benefit cost of $5.1 million in FY 2023, $5.3 million in FY 2024 and $5.5 million in FY 2024.  Fifty of the positions would be in store operations and 20 positions would be in administration, finance, markets and enforcement and marketing.
• The Commission would expand and build within the existing warehouse owned by the Commission to accommodate new administrative personnel.
• Because the sale of cannabis is not currently lawful in New Hampshire the Commission has no historical data to use for revenue projections.  At this time the Commission is not able to predict what revenues would be generated.
• The budget figures for the first year will be significantly larger due the costs associated with acquiring facilities, equipment and personnel.
• The Commission has not proposed the days or hours of operations of the cannabis outlets but anticipates they would closely mirror the liquor and wine outlet days and hours of operation.
• The Commission proposes to enter into a contract with an organization with expertise to advise the Commission on product selection, aid in training cannabis store personnel and purchase the cannabis on behalf of the commission for resale and distribution to the 10 state owned stores.  The duties and responsibilities would be subject to the terms and conditions established in a published RFP and subject to approval by Governor and the Executive Council.  
• While the bill would establish a new 4th division of cannabis enforcement and licensing, the Commission believes the existing 3 division organization is a viable and preferred organizational model for this bill and would place these new duties and personnel within the existing 3 division system.  The Commission's proposed budget assumes the new duties and personnel would be integrated into the existing divisions of Administration, Enforcement and Licensing, and Marketing, Merchandising and Warehouse.
• Based on the experienced gained from operating of liquor and wine outlets, the cannabis outlets would be staffed by 5 full-time personnel consisting of a manager, assistant manager and three clerks.  The commission would not use part time personnel until such time as retail sales operations warrant.
• Cannabis staff would undergo training to be able to answer questions and the contract expert would assume the duties to train or obtain training for all cannabis personnel.
• Additional personnel within the Division of Enforcement and Licensing would be responsible for management oversight of the cannabis outlets and monitoring of cannabis outlet operations to ensure the continuing public integrity of the operations.

Based on the assumptions above, the Commission prepared the budget estimates below.  Due to timing, the estimated annual costs will not necessarily align with State fiscal years as it will take time to locate and fit up retail and office space and hire and train staff.

It is assumed that the ongoing operating costs will increase based on inflation in the future years.

The Department of Health and Human indicates the bill provides that $25,000,000 will be appropriated annually to the Department of Health and Human Services, Bureau of Drug and Alcohol Services (BDAS) for use in evidenced-based, voluntary programs for substance use related education, prevention and treatment and recovery programs that include mental health treatment and to fund public education campaigns for youth and adults about the safety risks of alcohol, tobacco, cannabis and other substances and risks posed by cannabis use including driving under the influence.  The bill also provides that additional funds be to allocated on a percentage basis to Department for said programs and for children's behavioral health services.

The bill makes a general fund appropriation $150,000 in FY 2023 to the Department of Health and Human Services to create a public and social media campaign in the year prior to the sale of cannabis for recreational use in New Hampshire to provide education on impact for youth, safe storage of cannabis, risks of use of cannabis around children, increased incidents motor vehicle accidents, risks of use during pregnancy, increased risks of mental health conditions including psychosis.  The Department estimates that the proposed appropriation may not be sufficient to cover the cost of a comprehensive public and social media campaign.

The Department estimates the cost of the components of this bill to be indeterminable, however estimates the need for a Program Specialist IV position will be necessary to implement the provisions at an estimated cost of $65,000 in FY 2024 and $68,000 in FY 2025.  Additionally, the bill may have impacts on the state’s Therapeutic Cannabis Program.  Nearly every state that has legalized adult-use cannabis has been able to maintain the viability of its medical/therapeutic cannabis program.  Typically with adult-use legalization, a medical cannabis program will experience a decrease in patient registration as a certain number of patients choose to access the non-State Registry-based market.

The Department of Safety, Division of State Police indicates the impact to law enforcement in general would increase.  The bill would likely result in an increase in impaired drivers, toxicology testing, black market sales and the investigation of crimes related to cannabis establishments.  These enforcement issues would impact local and state law enforcement and lead to a need for increases in manpower and training.

The New Hampshire Municipal Association indicates legalization of cannabis is likely to affect municipal expenditures, primarily for law enforcement. There may be a reduction in expenditures related to drug enforcement because sale, possession, and use of cannabis by adults will no longer be illegal.  At the same time, if legalization results in an increase in usage, there may be an increase in expenditures related to impaired driving enforcement, overdose response, and preventing sale to minors.  These effects are speculative and not capable of estimate.  Therefore, the Association cannot estimate the effect on municipal expenditures.   In addition, the bill calls for a distribution of funds to public safety agencies to offset these expenditures, but it does not indicate how those funds would be allocated as among state, county, and municipal agencies. Further, the amount of such distributions would depend on the amount of funds available after administrative expenses and the $25 million annual distribution to the Department of Health and Human Services.  The Association cannot estimate the amount of any increase in municipal revenues.

This bill contains penalties that may have an impact on the New Hampshire judicial and correctional systems.  There is no method to determine how many charges, or fewer charges, would be brought as a result of the changes contained in this bill to determine the fiscal impact on expenditures.  However, the entities impacted have provided the potential costs associated with these penalties below.

This bill contains penalties that will have an indeterminable impact on the Judicial Branch system.  There is no method to determine how many charges, or how many fewer charges, would be brought as a result of the changes contained in this bill to determine the fiscal impact on expenditures.  In the past the Judicial Branch has used averaged caseload data based on time studies to estimate the fiscal impact of proposed legislation.  The per case data on costs for routine criminal cases currently available to the Judicial Branch are based on studies of judicial and clerical weighted caseload times for processing average routine criminal cases that are more than fifteen years old so the data does not have current validity.  A new case study is being conducted  and updated estimates will be available in the future.

Many offenses are prosecuted by local and county prosecutors.  When the Department of Justice has investigative and prosecutorial responsibility or is involved in an appeal, the Department may be able to absorb the cost within its existing budget.  However, if the Department needs to prosecute significantly more cases or handle more appeals, then costs will increase by an indeterminable amount.  

As noted earlier, the bill appropriates the sum of $14,000,000 for the biennium ending June 30, 2023 to the Liquor Commission for the administration of RSA 318-F.  The bill also appropriates the sum of $10,000,000 to the Business Finance Authority to provide the initial capitalization of a state-chartered, single purpose depository bank to transact business with cannabis establishments licensed under this act.  Finally, the bill appropriates $150,000 to the Department of Health and Human Services to create public media and social media campaigns.

It is assumed that any fiscal impact would not occur until after FY 2022.

AGENCIES CONTACTED:

Liquor Commission, Judicial Branch, Judicial Council, New Hampshire Association of Counties, New Hampshire Municipal Association, New Hampshire Business Finance Authority, and the Departments of Justice, Safety, Health and Human Services, Banking and Corrections