SENATE BILL 274
56th legislature - STATE OF NEW MEXICO - second session, 2024
Katy M. Duhigg
RELATING TO CANNABIS ENFORCEMENT; CREATING THE COMPLIANCE BUREAU IN THE OFFICE OF THE SUPERINTENDENT OF REGULATION AND LICENSING; PROVIDING POWERS AND DUTIES; PROVIDING FOR ENFORCEMENT OF THE CANNABIS REGULATION ACT, INCLUDING EMBARGO, SEIZURE AND DESTRUCTION OF ILLEGAL, ADULTERATED OR DANGEROUSLY OR FRAUDULENTLY MISBRANDED CANNABIS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Regulation and Licensing Department Act is enacted to read:
"[NEW MATERIAL] COMPLIANCE BUREAU--COMPLIANCE INSPECTORS--CERTIFIED LAW ENFORCEMENT OFFICERS.--
A. The "compliance bureau" is created in the office of the superintendent.
B. The superintendent shall employ compliance inspectors to investigate and enforce laws and rules of the cannabis control division. Inspectors shall be certified law enforcement officers who report to the superintendent or the person to whom the superintendent has delegated oversight duties of compliance inspectors; provided that the superintendent shall not delegate final employment decisions.
C. A compliance inspector has the same power as other law enforcement officers, including the power to undertake a lawful warrantless search and seizure and the power to arrest someone for trafficking illegal cannabis. Any warrant for the arrest of a person shall be issued upon sworn complaint.
D. The compliance bureau shall investigate alleged or suspected violations of the Cannabis Regulation Act as directed by the cannabis control division or the superintendent and may investigate on its own initiative and report its findings to the division and superintendent.
E. The superintendent may require compliance inspectors to receive training related to law enforcement specific to cannabis regulation and enforcement, which is in addition to training required for law enforcement certification."
SECTION 2. A new section of the Cannabis Regulation Act is enacted to read:
"[NEW MATERIAL] ENFORCEMENT--DIVISION AND COMPLIANCE BUREAU--ADMINISTRATIVE HOLDS--EMBARGO AND RECALL, SEIZURE AND CONDEMNATION--PROCEDURES--PENALTIES.--
A. The division or the compliance bureau of the department may carry out announced or unannounced inspections.
B. The division may:
(1) respond to tips or allegations of wrongdoing or initiate an investigation on the division's own initiative of an alleged or suspected violation of the Cannabis Regulation Act; provided that the division shall refer possible criminal violations to the compliance bureau and shall assist the bureau in the investigation and carrying out of inspections; and
(2) issue an administrative hold on the movement of cannabis products that are or are suspected of being adulterated or dangerously or fraudulently misbranded.
C. The compliance bureau shall investigate cases referred to it by the division or superintendent or on the bureau's own initiative and may:
(1) embargo or seize a cannabis product alleged or suspected of being an illegal cannabis product or, on the determination of the division, a cannabis product that is adulterated or so misbranded as to be dangerous or fraudulent and may seize the premises where the cannabis product is produced, manufactured or stored as provided in a warrant; and
(2) petition the district court for injunctive or other equitable relief.
D. The division shall give sufficient notice to the licensee of the division's decision to issue an administrative hold on the licensee's cannabis products. An administrative hold shall not be in place for longer than necessary to complete the division's or the compliance bureau's investigation; provided that an administrative hold on misbranded cannabis products that are not considered dangerous or fraudulent shall last only as long as it takes the licensee to relabel and repackage the cannabis products as ordered by the division.
E. The division may issue a recall order for cannabis products embargoed for adulteration or dangerous or fraudulent misbranding.
F. When the compliance bureau embargoes a cannabis product, the bureau shall affix to the cannabis product a tag or other appropriate marking giving notice that the cannabis product is or is suspected of being an illegal cannabis product or is adulterated or dangerously or fraudulently misbranded and that the cannabis product shall not be sold, removed or otherwise disposed of.
G. When the compliance bureau embargoes or seizes a cannabis product or a premises, the bureau shall give written notice to the licensee of the grounds for the seizure.
H. Neither the division nor the compliance bureau shall be required to care for embargoed or seized cannabis products.
I. A licensee aggrieved by an embargo or seizure may request an administrative hearing within ten calendar days from the date the embargo was issued or the seizure was executed. The hearing shall be held before a hearing officer as provided by rule. The final agency decision may be appealed pursuant to Section 39-3-1.1 NMSA 1978.
J. When the determination is made that an embargoed or seized cannabis product is illegal, adulterated or dangerously or fraudulently misbranded, the division shall petition the district court for condemnation of the cannabis product.
K. If the district court orders condemnation, the compliance bureau shall destroy the cannabis product at the licensee's expense.
L. The New Mexico department of agriculture, the department of environment and other state agencies with relevant expertise shall cooperate with the division and the compliance bureau at either entity's request.
M. A person who intentionally, knowingly or recklessly removes, conceals, destroys or disposes of a cannabis product subject to an administrative hold or embargo is guilty of a fourth degree felony and shall be sentenced as provided in Section 31-18-15 NMSA 1978.
N. In addition to the actions provided in this section, after an administrative hearing pursuant to the Uniform Licensing Act, the division may take disciplinary action against a licensee, including:
(1) suspension or revocation of the license;
(2) imposition of an administrative penalty not to exceed ten thousand dollars ($10,000); or
(3) any other disciplinary action allowed under that act or rule of the division."
SECTION 3. APPROPRIATION.--Three hundred twenty-five thousand dollars ($325,000) is appropriated from the general fund to the regulation and licensing department for expenditure in fiscal year 2025 to create the compliance bureau in the office of the superintendent of regulation and licensing, including staff, office space, furnishings, equipment and supplies. Any unexpended or unencumbered balance remaining at the end of fiscal year 2025 shall revert to the general fund.
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