(1) A retail marijuana cultivation facility license may be issued only to a person who cultivates retail marijuana for sale and distribution to licensed retail marijuana stores, retail marijuana products manufacturer licensees, retail marijuana hospitality and sales business, or other retail marijuana cultivation facilities. (2) A retail marijuana cultivation facility shall remit any applicable excise tax due in accordance with article 28.8 of title 39, based on the average wholesale prices set by the state licensing authority. (3) A retail marijuana cultivation facility shall track the marijuana it cultivates from seed or immature plant to wholesale purchase. Prior to delivery of any sold retail marijuana, the retail marijuana cultivation facility shall provide evidence that it paid any applicable excise tax on the retail marijuana due pursuant to article 28.8 of title 39. (4) A retail marijuana cultivation facility may provide, except as required by section 44- 10-203 (2)(d), a sample of its products to a facility that has a retail marijuana testing facility license from the state licensing authority for testing and research purposes. A retail marijuana cultivation facility shall maintain a record of what was provided to the testing facility, the identity of the testing facility, and the testing results. (5) Retail marijuana or retail marijuana products may not be consumed on the premises of a retail marijuana cultivation facility. (6) (a) A retail marijuana cultivation facility licensee may provide a retail marijuana sample and a retail marijuana concentrate sample to no more than five managers employed by the licensee for purposes of quality control and product development. A retail marijuana cultivation facility licensee may designate no more than five managers per calendar month as recipients of quality control and product development samples authorized pursuant to this subsection (6)(a). (b) An excise tax shall be levied and collected on the sample of unprocessed retail marijuana by a retail marijuana cultivation facility. The excise tax must be calculated based on the average market rate of the unprocessed retail marijuana. (c) A sample authorized pursuant to subsection (6)(a) of this section is limited to one gram of retail marijuana per batch as defined in rules promulgated by the state licensing authority, and one-quarter gram of a retail marijuana concentrate per batch as defined in rules promulgated by the state licensing authority; except that the limit is one-half gram of retail marijuana concentrate if the intended use of the final product is to be used in a device that can be used to deliver retail marijuana concentrate in a vaporized form to the person inhaling from the device. (d) A sample authorized pursuant to subsection (6)(a) of this section must be labeled and packaged pursuant to the rules promulgated pursuant to section 44-10-203 (2)(f) and (3)(b). (e) A sample provided pursuant to subsection (6)(a) of this section must be tracked with the seed-to-sale tracking system. Prior to a manager receiving a sample, a manager must be designated in the seed-to-sale tracking system as a recipient of quality control and product development samples. A manager receiving a sample must make a voluntary decision to be tracked in the seed-to-sale tracking system and is not a consumer pursuant to section 16 (5)(c) of article XVIII of the state constitution. The retail marijuana cultivation facility licensee shall maintain documentation of all samples and shall make the documentation available to the state licensing authority. (f) Prior to a manager receiving a sample pursuant to subsection (6)(a) of this section, a retail marijuana cultivation facility licensee shall provide a standard operating procedure to the manager explaining requirements pursuant to this section and personal possession limits pursuant to section 18-18-406. (g) A manager shall not: (I) Receive more than one ounce total of retail marijuana or eight grams of retail marijuana concentrate samples per calendar month, regardless of the number of licenses that the manager is associated with; or (II) Provide to or resell the sample to another licensed employee, a customer, or any other individual. (h) A retail marijuana cultivation facility licensee shall not: (I) Allow a manager to consume the sample on the licensed premises; or (II) Use the sample as a means of compensation to a manager. (i) The state licensing authority may establish additional inventory tracking and record keeping, including additional reporting required for implementation. The retail marijuana cultivation facility licensee shall maintain the information required by this subsection (6)(i) on the licensed premises for inspection by the state and local licensing authorities. (j) For purposes of this subsection (6) only, "manager" means an employee of the retail marijuana cultivation facility who holds a valid key license or associated key license and is currently designated pursuant to state licensing authority rules as the manager of the retail marijuana cultivation facility. (7) (a) The state licensing authority may issue a centralized distribution permit to a retail marijuana cultivation facility authorizing temporary storage on its licensed premises of retail marijuana concentrate and retail marijuana products received from a retail marijuana business for the sole purpose of transfer to the permit holder's commonly owned retail marijuana stores. Prior to exercising the privileges of a centralized distribution permit, a retail marijuana cultivation facility licensed pursuant to this section shall, at the time of application to the state licensing authority, send a copy of the application or supplemental application for a centralized distribution permit to the local jurisdiction in which the centralized distribution permit is proposed. The state licensing authority shall notify the local jurisdiction of its decision regarding the centralized distribution permit. (b) A retail marijuana cultivation facility shall not store retail marijuana concentrate or retail marijuana products pursuant to a centralized distribution permit for more than ninety days. (c) A retail marijuana cultivation facility shall not accept any retail marijuana concentrate or retail marijuana products pursuant to a centralized distribution permit unless the retail marijuana concentrate and retail marijuana products are packaged and labeled for sale to a consumer as required by rules promulgated by the state licensing authority pursuant to section 44-10-203 (2)(f) and (3)(b). (d) All retail marijuana concentrate and retail marijuana products stored and prepared for transport on a retail marijuana cultivation facility's licensed premises pursuant to a centralized distribution permit must only be transferred to a retail marijuana cultivation facility licensee's commonly owned retail marijuana stores. All transfers of retail marijuana concentrate and retail marijuana products by a retail marijuana cultivation facility pursuant to a centralized distribution permit are without consideration. (e) All security and surveillance requirements that apply to a retail marijuana cultivation facility apply to activities conducted pursuant to the privileges of a centralized distribution permit. (f) A retail marijuana cultivation facility shall track all retail marijuana concentrate and retail marijuana products possessed pursuant to a centralized distribution permit in the seed-to- sale tracking system from the point it is received from a retail marijuana business to the point of transfer to a retail marijuana cultivation facility licensee's commonly owned retail marijuana stores. (g) For purposes of this section only, "commonly owned" means licenses that have an ownership structure with at least one natural person with a minimum of five percent ownership in each license. (8) Notwithstanding any other provision of law to the contrary, a licensed retail marijuana cultivation facility may compensate its employees using performance-based incentives, including sales-based performance-based incentives. (9) An accelerator cultivator licensee may operate on the premises of a retail marijuana cultivation facility licensee if before each accelerator cultivator licensee operates, the retail marijuana cultivation facility licensee has its premises endorsed pursuant to rule and each accelerator cultivator licensee is approved to operate on that premises. (10) A retail marijuana cultivation facility licensee that hosts an accelerator cultivator licensee may, pursuant to rule, provide technical and compliance assistance to an accelerator cultivator licensee operating on its premises. A retail marijuana products manufacturer licensee that hosts an accelerator cultivator licensee may, pursuant to rule, provide capital assistance to an accelerator cultivator licensee operating on its premises. (11) A retail marijuana cultivation facility licensee that hosts an accelerator cultivator licensee, pursuant to rule and the state licensing authority discretion, may be eligible for incentives available through the department of revenue or the office of economic development and international trade, including but not limited to a reduction in application or license fees. (12) (a) In accordance with the rules promulgated by the state licensing authority, a retail marijuana cultivation facility may obtain genetic material from: (I) Another medical or retail marijuana cultivation facility; (II) A medical or retail marijuana testing facility; (III) A person licensed by, approved by, or permitted by another jurisdiction to possess or cultivate plants of the genus cannabis; or (IV) Any other source permitted by rule of the state licensing authority. (b) (I) A retail marijuana cultivation facility may sell, transfer, or ship genetic material to: (A) Another medical or retail marijuana cultivation facility; (B) A medical or retail marijuana testing facility; (C) A person licensed by, approved by, or permitted by another jurisdiction to possess or cultivate plants of the genus cannabis; or (D) Any other person permitted by rule of the state licensing authority. (II) Repealed. (III) For sales, transfers, or shipments to an individual, a retail marijuana cultivation facility shall establish processes and procedures to confirm that the purchasing or receiving individual is twenty-one years of age or older using an age verification process, such as authentication verification, biometric verification, or document verification. (IV) A licensed retail marijuana cultivation facility may accept payment online for the sale, transfer, or shipment of genetic material. (V) A licensed retail marijuana cultivation facility shall not transfer genetic material directly to consumers who are present on the licensed premises. (c) The state licensing authority may promulgate rules to implement this subsection (12) to set requirements for inventory tracking, reporting, and record keeping. In promulgating the rules and conducting enforcement actions under this subsection (12), the state licensing authority may: (I) Require inventory tracking of genetic material only when the genetic material is: (A) On the licensed premises of a medical marijuana or retail marijuana business; or (B) Being transferred between regulated marijuana businesses licensed pursuant to this article 10; (II) Only confirm the licensee has established processes and procedures to verify compliance with subsection (12)(b)(III) of this section; or (III) Monitor or take enforcement action associated with a licensee's genetic material activities that occur only on the licensed premises. (d) This subsection (12) does not limit the applicability of another state's law, the applicability of federal law, or enforcement by federal agencies. (13) (a) After obtaining passing test results required by subsection (4) of this section, a retail marijuana cultivation facility may transfer retail marijuana to a co-located medical marijuana cultivation facility with at least one identical controlling beneficial owner and change the designation of the retail marijuana to medical marijuana. Pursuant to section 44-10-502 (9)(a), after the medical marijuana cultivation facility enters the designation change into the seed-to-sale tracking system, the marijuana is medical marijuana and is the property of the medical marijuana cultivation facility. The marijuana that changed designation pursuant to this subsection (13)(a) shall not be transferred to the originating retail marijuana cultivation facility or any retail marijuana licensee, have its designation changed from medical marijuana to retail marijuana, or otherwise be treated as retail marijuana. (b) Both the medical marijuana cultivation facility and retail marijuana cultivation facility must remain at or under their respective regulated inventory limits before and after the designation is conducted pursuant to subsection (13)(a) of this section. (c) A transfer and change of designation of retail marijuana to medical marijuana pursuant to this subsection (13) is not a transaction that results in a right to refund of any retail marijuana excise tax incurred or paid prior to that transfer and change of designation. (13.5) (a) Starting January 1, 2023, after obtaining passing testing results, a retail marijuana cultivation facility may receive a transfer of medical marijuana from a co-located medical marijuana cultivation facility with at least one identical controlling beneficial owner and change the designation of the medical marijuana to retail marijuana. The retail marijuana cultivation facility shall enter the designation change into the seed-to-sale tracking system and, after the change is entered into the system, the marijuana is retail marijuana and is the property of the retail marijuana cultivation facility. The marijuana that changed designation pursuant to this subsection (13.5)(a) must not be transferred to the originating medical marijuana cultivation facility or any medical marijuana licensee, have its designation changed from retail marijuana back to medical marijuana, or otherwise be treated as medical marijuana. (b) (I) Notwithstanding subsection (13.5)(a) of this section to the contrary, a retail marijuana cultivation facility may receive a transfer of medical marijuana from a medical marijuana cultivation facility that is not co-located with the retail marijuana cultivation facility to change the designation of the medical marijuana to retail marijuana if: (A) The retail marijuana cultivation facility and medical marijuana cultivation facility have at least one identical controlling beneficial owner; and (B) The retail marijuana cultivation facility and medical marijuana cultivation facility cannot be co-located because the local jurisdiction prohibits the operation of either a medical marijuana cultivation facility or a retail marijuana cultivation facility. (II) Prior to receiving a transfer pursuant to this subsection (13.5)(b), the retail marijuana cultivation facility shall ensure that the medical marijuana passed all tests required by the state licensing authority in rule. (c) Both the retail marijuana cultivation facility and the medical marijuana cultivation facility shall remain at or under their respective regulated inventory limits before and after the transfer is conducted pursuant to this subsection (13.5). (d) The retail marijuana cultivation facility shall pay any retail marijuana excise tax pursuant to section 39-28.8-302. The retail marijuana cultivation facility shall notify the local licensing authority in the local jurisdiction where the transferor and transferee operate and pay any applicable excise tax on the transferred retail marijuana. (e) Pursuant to the requirements of this subsection (13.5), a retail marijuana cultivation facility may receive a virtual transfer of marijuana that is reflected in the seed-to-sale tracking system even if the marijuana is not physically moved or transferred. (14) (a) Beginning January 1, 2022, a retail marijuana cultivation facility licensee that cultivates retail marijuana outdoors may file a contingency plan for its outdoor cultivation operation to address how the licensee will respond when there is an adverse weather event. If the licensee files a contingency plan, the licensee shall also submit a copy of the plan to the local licensing authority in the local jurisdiction where the licensee operates. If the contingency plan is approved by the state licensing authority, the retail marijuana cultivation facility licensee may follow the contingency plan in the case of an adverse weather event. (b) After the state licensing authority approves a contingency plan, it shall notify the local licensing authority of the approval. The local licensing authority may enforce local land use and zoning laws and regulations regarding the contingency plan and may develop internal regulatory processes to evaluate contingency plans. (c) On and after January 1, 2023, a local licensing authority may require that an applicant for a retail marijuana cultivation facility license include a contingency plan with the application for the local licensing authority's review and approval.
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