§ 35 — Registering of registered organizations

§ 35. Registering of registered organizations. 1. (a) An applicant for\nregistration as a registered organization under section thirty-four of\nthis article shall include such information prepared in such manner and\ndetail as the board may require, including but not limited to:\n (i) a description of the activities in which it intends to engage as a\nregistered organization;\n (ii) that the applicant:\n (A) is of good moral character;\n (B) possesses or has the right to use sufficient land, buildings, and\nother premises, which shall be specified in the application, and\nequipment to properly carry on the activity described in the\napplication, or in the alternative posts a bond of not less than two\nmillion dollars;\n (C) is able to maintain effective security and control to prevent\ndiversion, abuse, and other illegal conduct relating to the cannabis;\nand\n (D) is able to comply with all applicable state laws and regulations\nrelating to the activities in which it intends to engage under the\nregistration;\n (iii) that the applicant has entered into a labor peace agreement with\na bona fide labor organization that is actively engaged in representing\nor attempting to represent the applicant's employees and the maintenance\nof such a labor peace agreement shall be an ongoing material condition\nof certification;\n (iv) the applicant's status as a for-profit business entity or\nnot-for-profit corporation; and\n (v) the application shall include the name, residence address and\ntitle of each of the officers and directors and the name and residence\naddress of any person or entity that is a member of the applicant. Each\nsuch person, if an individual, or lawful representative if a legal\nentity, shall submit an affidavit with the application setting forth:\n (A) any position of management, interest or ownership during the\npreceding ten years of a ten per centum or greater interest in any other\ncannabis business, or applicant, located in or outside this state,\nmanufacturing or distributing drugs including indirect management,\ninterest, or ownership of parent companies, subsidiaries, or affiliates;\n (B) whether such person or any such business has been convicted of a\nfelony or had a registration or license suspended or revoked in any\nadministrative or judicial proceeding, and if applicable, the history of\nviolations or administrative penalties with respect to any license to\ncultivate, manufacture, distribute or sell adult-use cannabis or medical\ncannabis; and\n (C) such other information as the board may reasonably require.\n 2. The applicant shall be under a continuing duty to report to the\noffice any change in facts or circumstances reflected in the application\nor any newly discovered or occurring fact or circumstance which is\nrequired to be included in the application.\n 3. (a) The board shall grant a registration or amendment to a\nregistration under this section if they are satisfied that:\n (i) the applicant will be able to maintain effective control against\ndiversion of cannabis;\n (ii) the applicant will be able to comply with all applicable state\nlaws;\n (iii) the applicant and its officers are ready, willing and able to\nproperly carry on the manufacturing or distributing activity for which a\nregistration is sought;\n (iv) the applicant possesses or has the right to use sufficient land,\nbuildings and equipment to properly carry on the activity described in\nthe application;\n (v) it is in the public interest that such registration be granted,\nincluding but not limited to:\n (A) whether the number of registered organizations in an area will be\nadequate or excessive to reasonably serve the area;\n (B) whether the registered organization is a minority and/or woman\nowned business enterprise, a service-disabled veteran-owned business, or\nfrom communities disproportionally impacted by the enforcement of\ncannabis prohibition;\n (C) whether the registered organization provides education and\noutreach to practitioners;\n (D) whether the registered organization promotes the research and\ndevelopment of medical cannabis and patient outreach;\n (E) the affordability of medical cannabis products offered by the\nregistered organization;\n (F) whether the registered organization is culturally, linguistically,\nand medically competent to provide services to unserved and underserved\nareas; and\n (G) whether the registered organization promotes racial, ethnic, and\ngender diversity in their workforce;\n (vi) the applicant and its managing officers are of good moral\ncharacter;\n (vii) the applicant has entered into a labor peace agreement with a\nbona fide labor organization that is actively engaged in representing or\nattempting to represent the applicant's employees; and the maintenance\nof such a labor peace agreement shall be an ongoing material condition\nof registration; and\n (viii) the applicant satisfies any other conditions as determined by\nthe board.\n (b) If the board is not satisfied that the applicant should be issued\na registration, he or she shall notify the applicant in writing of those\nfactors upon which further evidence is required. Within thirty days of\nthe receipt of such notification, the applicant may submit additional\nmaterial to the board or demand a hearing, or both.\n (c) The fee for a registration under this section shall be an amount\ndetermined by the board in regulations; provided, however, if the\nregistration is issued for a period greater than two years the fee shall\nbe increased, pro rata, for each additional month of validity.\n (d) Registrations issued under this section shall be effective only\nfor the registered organization and shall specify:\n (i) the name and address of the registered organization;\n (ii) which activities of a registered organization are permitted by\nthe registration;\n (iii) the land, buildings and facilities that may be used for the\npermitted activities of the registered organization; and\n (iv) such other information as the board shall reasonably provide to\nassure compliance with this article.\n (e) Upon application of a registered organization, a registration may\nbe amended to allow the registered organization to relocate within the\nstate or to add or delete permitted registered organization activities\nor facilities. The fee for such amendment shall be determined by the\nboard in regulation and be based off the administrative burden to\nprocess and review the amendment by the office, provided no fee shall be\ngreater than two thousand dollars.\n 4. A registration issued under this section shall be valid for two\nyears from the date of issue, except that in order to facilitate the\nrenewals of such registrations, the board may upon the initial\napplication for a registration, issue some registrations which may\nremain valid for a period of time greater than two years but not\nexceeding an additional eleven months.\n 5. (a) An application for the renewal of any registration issued under\nthis section shall be filed with the board not more than six months nor\nless than four months prior to the expiration thereof. A late-filed\napplication for the renewal of a registration may, in the discretion of\nthe board, be treated as an application for an initial license.\n (b) The application for renewal shall include such information\nprepared in the manner and detail as the board may require, including\nbut not limited to:\n (i) any material change in the circumstances or factors listed in\nsubdivision one of this section; and\n (ii) every known charge or investigation, pending or concluded during\nthe period of the registration, by any governmental or administrative\nagency with respect to:\n (A) each incident or alleged incident involving the theft, loss, or\npossible diversion of medical cannabis manufactured or distributed by\nthe applicant; and\n (B) compliance by the applicant with the laws of the state with\nrespect to the cultivation, manufacture, distribution, or sale of\nmedical cannabis or adult-use cannabis, where applicable.\n (c) An applicant for renewal shall be under a continuing duty to\nreport to the board any change in facts or circumstances reflected in\nthe application or any newly discovered or occurring fact or\ncircumstance which is required to be included in the application and to\nobtain approval prior to any material change in management, interest or\nownership.\n (d) If the board is not satisfied that the registered organization\napplicant is entitled to a renewal of the registration, the board shall\nwithin a reasonably practicable time as determined by the executive\ndirector, serve upon the registered organization or its attorney of\nrecord in person or by registered or certified mail an order directing\nthe registered organization to show cause why its application for\nrenewal should not be denied. The order shall specify in detail the\nrespects in which the applicant has not satisfied the board that the\nregistration should be renewed.\n (e) Within a reasonably practicable time as determined by the board of\nsuch order, the applicant may submit additional material to the board or\ndemand a hearing or both; if a hearing is demanded the board shall fix a\ndate as soon as reasonably practicable.\n 6. (a) The board shall renew a registration unless he or she\ndetermines and finds that:\n (i) the applicant is unlikely to maintain or be able to maintain\neffective control against diversion;\n (ii) the applicant is unlikely to comply with all state laws\napplicable to the activities in which it may engage under the\nregistration;\n (iii) it is not in the public interest to renew the registration\nbecause the number of registered organizations in an area is excessive\nto reasonably serve the area;\n (iv) the applicant has either violated or terminated its labor peace\nagreement; or\n (v) the applicant has substantively violated the laws of another\njurisdiction, in which they operate or have operated a cannabis license\nor registration, related to the operation of a cannabis business.\n (b) For purposes of this section, proof that a registered\norganization, during the period of its registration, has failed to\nmaintain effective control against diversion, violates any provision of\nthis article, or has knowingly or negligently failed to comply with\napplicable state laws relating to the activities in which it engages\nunder the registration, may constitute grounds for suspension,\ntermination or limitation of the registered organization's registration\nor as determined by the board. The registered organization shall also\nbe under a continuing duty to report to the office any material change\nor fact or circumstance to the information provided in the registered\norganization's application.\n 7. The board may suspend or terminate the registration of a registered\norganization, on grounds and using procedures under this article\nrelating to a license, to the extent consistent with this article. The\nboard shall suspend or terminate the registration in the event that a\nregistered organization violates or terminates the applicable labor\npeace agreement. Conduct in compliance with this article which may\nviolate conflicting federal law, shall not be grounds to suspend or\nterminate a registration.\n 8. A registered organization that manufactures medical cannabis may\nhave no more than four dispensing sites wholly owned and operated by\nsuch registered organization. Such registered organization may have an\nadditional four dispensing sites; provided, however, that the first two\nadditional dispensing sites shall be located in underserved or unserved\ngeographic locations, as determined by the board. The board shall ensure\nthat such registered organizations and dispensing sites are\ngeographically distributed across the state and that their ownership\nreflects the demographics of the state.\n 9. In coordination with the chief equity officer the board shall\nregister additional registered organizations to provide services to\nunserved and underserved areas of the state. Pursuant to the social and\neconomic equity plan established by section eighty-seven of this\nchapter, those additional registered organizations shall be reflective\nof the demographics of the state, be representative of communities\ndisproportionately impacted by cannabis prohibition, and be culturally,\nlinguistically, and medically competent to serve unserved and\nunderserved areas of the state. The board shall actively promote racial,\nethnic, and gender diversity when registering additional registered\norganizations.\n