Last week, Sen. Kimberly A. Lightford introduced Senate Bill 3940, which contains several miscellaneous cannabis regulations concerning craft growers, taxes, financial assistance, and more.

Craft grow changes include the repeal of provisions establishing cultivator taxes and craft grower taxes and a shared premises pilot program. The provision for the shared premises pilot program states, “The Department of Agriculture shall create a pilot program that shall allow craft growers to share premises with cultivation center. The Department shall adopt rules to that a craft grower may only locate within 1,500 feet another craft grower or cultivation center upon approval by the Department, that multiple craft growers may share a within a single cultivation center. A craft grower not share a premises with another craft grower outside of a cultivation center.” The Department of Agriculture shall adopt rules by January 1, 2025. Another craft grow provision includes rules concerning application of pesticides, stating, “Within one year after the effective date of this amendatory of the 103rd General Assembly, the Department shall adopt prohibiting the application of pesticides to cannabis in the flowering stage in a craft grower facility.”

SB3940 also would require the Department of Agriculture to license cannabis laboratories, stating, “The Department of Agriculture may suspend or revoke the license of, or impose other penalties upon cannabis testing facilities, cultivation centers, craft growers, infuser organizations, transporting organizations, their principal officers, Agents-in-Charge, and agents for violations of this Act and any rules adopted under this Act.”

SB3940 provides for the repeal of provisions establishing cultivator taxes and craft grower taxes, including amendments to the Retailers’ Occupation Tax Act and specifying that it is a purpose of the Act for the Department of Revenue to report certain cannabis-related tax and business district tax revenues, stating, “It is an official purpose within the meaning of this Section for the Department to publicly report the aggregate of tax revenues from a given tax return type that the allocates from a State fund or State trust fund to unit of local government, such as the amount of the allocation to each unit of local government of Cannabis Retailers’ Occupation Tax, County Cannabis Retailers’ Occupation Tax, or Business District Retailers’ Tax, notwithstanding that some units of local may have as few as one retailer reporting revenues a given tax return type in any given reporting period.”

Other provisions include making changes concerning confidentiality regarding the Office of Executive Inspector General, changes the name of the Local Cannabis Consumer Excise Tax Trust Fund to the Local Cannabis Retailers’ Occupation Tax Trust Fund. SB3940 would authorizes “the Department of Agriculture and the Department of Financial and Professional Regulation to establish, by rule, certain market protections,” and “The Department of Agriculture may establish, by rule, market protections that protect against unfair business practices, including, but not limited to, price-fixing, bid rigging, boycotts, agreements to not compete, exclusive arrangements for cannabis concentrate, cannabis flower, cannabis-infused products, and any product that is licensed under this Act to ensure all license types have equal access to the market without unfair competition.

In addition, SB3940 makes changes in provisions concerning limitations on the home rule powers of counties and municipalities, provides that the exemption in the Code relating to implementing the Cannabis Regulation and Tax Act shall be 8 years (instead of 5 years) after June 25, 2019, deletes a provision in the Tobacco Accessories and Smoking Herbs Control Act, which specifies that the sale and possession of marijuana and hashish is illegal, and adds and makes changes to various definitions.

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