AB43: Bill Text

AB43,,6109 MARIJUANA TAX AND REGULATION

AB43,,6110 139.97 Definitions. In this subchapter:

AB43,,6111 (1) “Department” means the department of revenue.

AB43,,6112 (2) “Lot” means a definite quantity of marijuana or usable marijuana identified by a lot number, every portion or package of which is consistent with the factors that appear in the labeling.

AB43,,6113 (3) “Lot number” means a number that specifies the person who holds a valid permit under this subchapter and the harvesting or processing date for each lot.

AB43,,6114 (4) “Marijuana” has the meaning given in s. 961.70 (2).

AB43,,6115 (5) “Marijuana distributor” means a person in this state who purchases or receives usable marijuana from a marijuana processor and who sells or otherwise transfers the usable marijuana to a marijuana retailer for the purpose of resale to consumers.

AB43,,6116 (6) “Marijuana processor” means a person in this state who processes marijuana into usable marijuana, packages and labels usable marijuana for sale in retail outlets, and sells at wholesale or otherwise transfers usable marijuana to marijuana distributors.

AB43,,6117 (7) “Marijuana producer” means a person in this state who produces marijuana and sells it at wholesale or otherwise transfers it to marijuana processors.

AB43,,6118 (8) “Marijuana retailer” means a person in this state that sells usable marijuana at a retail outlet.

AB43,,6119 (9) “Microbusiness” means a marijuana producer that produces marijuana in one area that is less than 10,000 square feet and who also operates as any 2 of the following:

AB43,,6120 (a) A marijuana processor.

AB43,,6121 (b) A marijuana distributor.

AB43,,6122 (c) A marijuana retailer.

AB43,,6123 (10) “Permittee” means a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness that is issued a permit under s. 139.972.

AB43,,6124 (11) “Retail outlet” means a location for the retail sale of usable marijuana.

AB43,,6125 (12) “Sales price” has the meaning given in s. 77.51 (15b).

AB43,,6126 (13) “Usable marijuana” means marijuana that has been processed for human consumption and includes dried marijuana flowers, marijuana-infused products, and marijuana edibles.

AB43,,6127 139.971 Marijuana tax. (1) (a) An excise tax is imposed on a marijuana producer at the rate of 15 percent of the sales price on each wholesale sale or transfer in this state of marijuana to a marijuana processor. This paragraph applies to a microbusiness that transfers marijuana to a processing operation within the microbusiness.

AB43,,6128 (b) An excise tax is imposed on a marijuana retailer at the rate of 10 percent of the sales price on each retail sale in this state of usable marijuana, except that the tax does not apply to sales of usable marijuana to an individual who holds a valid tax exemption certificate issued under s. 73.17 (4).

AB43,,6129 (2) Each person liable for the taxes imposed under sub. (1) shall pay the taxes to the department no later than the 15th day of the month following the month in which the person’s tax liability is incurred and shall include with the payment a return on a form prescribed by the department.

AB43,,6130 (3) For purposes of this section, a marijuana producer may not sell marijuana directly to a marijuana distributor or marijuana retailer, and a marijuana retailer may purchase usable marijuana for resale only from a marijuana distributor. This subsection does not apply to a microbusiness that transfers marijuana or usable marijuana to another operation with the microbusiness.

AB43,,6131 139.972 Permits required. (1) (a) No person may operate in this state as a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness without first filing an application for and obtaining the proper permit from the department to perform such operations. In addition, no person may operate in this state as a marijuana producer or marijuana processor without first filing an application for and obtaining the proper permit under s. 94.56.

AB43,,6132 (b) This section applies to all officers, directors, agents, and stockholders holding 5 percent or more of the stock of any corporation applying for a permit under this section.

AB43,,6133 (c) Subject to ss. 111.321, 111.322, and 111.335, a permit under this section may not be granted to any person to whom any of the following applies:

AB43,,6134 1. The person has been convicted of a violent misdemeanor, as defined in s. 941.29 (1g) (b), at least 3 times.

AB43,,6135 2. The person has been convicted of a violent felony, as defined in s. 941.29 (1g) (a), unless pardoned.

AB43,,6136 3. During the preceding 3 years, the person has been committed under s. 51.20 for being drug dependent.

AB43,,6137 4. The person chronically and habitually uses alcohol beverages or other substances to the extent that his or her normal faculties are impaired. A person is presumed to chronically and habitually use alcohol beverages or other substances to the extent that his or her normal faculties are impaired if, within the preceding 3 years, any of the following applies:

AB43,,6138 a. The person has been committed for involuntary treatment under s. 51.45 (13).

AB43,,6139 b. The person has been convicted of a violation of s. 941.20 (1) (b).

AB43,,6140 c. In 2 or more cases arising out of separate incidents, a court has found the person to have committed a violation of s. 346.63 or a local ordinance in conformity with that section; a violation of a law of a federally recognized American Indian tribe or band in this state in conformity with s. 346.63; or a violation of the law of another jurisdiction, as defined in s. 340.01 (41m), that prohibits use of a motor vehicle while intoxicated, while under the influence of a controlled substance, a controlled substance analog, or a combination thereof, with an excess or specified range of alcohol concentration, or while under the influence of any drug to a degree that renders the person incapable of safely driving, as those or substantially similar terms are used in that jurisdiction’s laws.

AB43,,6141 5. The person has income that comes principally from gambling or has been convicted of 2 or more gambling offenses.

AB43,,6142 6. The person has been convicted of crimes relating to prostitution.

AB43,,6143 7. The person has been convicted of of crimes relating to loaning money or anything of value to persons holding licenses or permits pursuant to ch. 125.

AB43,,6144 8. The person is under the age of 21.

AB43,,6145 9. The person has not been a resident of this state continuously for at least 90 days prior to the application date.

AB43,,6146 (cm) An applicant with 20 or more employees may not receive a permit under this section to operate as a marijuana distributor or marijuana retailer unless the applicant certifies to the department that the applicant has entered into a labor peace agreement, as defined in s. 94.56 (1) (a), and will abide by the terms of the agreement as a condition of maintaining a valid permit under this section. The applicant shall submit to the department a copy of the page of the labor peace agreement that contains the signatures of the labor organization representative and the applicant.

****Note: This is reconciled s. 139.972 (1) (cm). This Section has been affected by drafts with the following LRB numbers: 23-1402/p2 and 23-0405/p2.

AB43,,6147 (cn) The department shall use a competitive scoring system to determine which applicants are eligible to receive a permit under this section. The department shall issue permits to the highest scoring applicants that it determines will best protect the environment; provide stable, family-supporting jobs to local residents; ensure worker and consumer safety; operate secure facilities; and uphold the laws of the jurisdictions in which they operate. The department shall, using criteria established by rule, score an applicant for a permit to operate as a marijuana retailer on the applicant’s ability to articulate a social equity plan related to the operation of a marijuana retail establishment. The department may deny a permit to an applicant with a low score as determined under this paragraph. The department may request that the applicant provide any information or documentation that the department deems necessary for purposes of making a determination under this paragraph.

AB43,,6148 (d) 1. Before the department issues a new or renewed permit under this section, the department shall give notice of the permit application to the governing body of the municipality where the permit applicant intends to operate the premises of a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness. No later than 30 days after the department submits the notice, the governing body of the municipality may file with the department a written objection to granting or renewing the permit. At the municipality’s request, the department may extend the period for filing objections.

AB43,,6149 2. A written objection filed under subd. 1. shall provide all the facts on which the objection is based. In determining whether to grant or deny a permit for which an objection has been filed under this paragraph, the department shall give substantial weight to objections from a municipality based on chronic illegal activity associated with the premises for which the applicant seeks a permit or the premises of any other operation in this state for which the applicant holds or has held a valid permit or license, the conduct of the applicant’s patrons inside or outside the premises of any other operation in this state for which the applicant holds or has held a valid permit or license, and local zoning ordinances. In this subdivision, “chronic illegal activity” means a pervasive pattern of activity that threatens the public health, safety, and welfare of the municipality, including any crime or ordinance violation, and that is documented in crime statistics, police reports, emergency medical response data, calls for service, field data, or similar law enforcement agency records.

AB43,,6150 (e) After denying a permit, the department shall immediately notify the applicant in writing of the denial and the reasons for the denial. After making a decision to grant or deny a permit for which a municipality has filed an objection under par. (d), the department shall immediately notify the governing body of the municipality in writing of its decision and the reasons for the decision.

AB43,,6151 (f) 1. The department’s denial of a permit under this section is subject to judicial review under ch. 227.

AB43,,6152 2. The department’s decision to grant a permit under this section regardless of an objection filed under par. (d) is subject to judicial review under ch. 227.

AB43,,6153 (g) The department shall not issue a permit under this section to any person who does not hold a valid certificate under s. 73.03 (50).

AB43,,6154 (2) Each person who applies for a permit under this section shall submit with the application a $250 fee. Each person who is granted a permit under this section shall annually pay to the department a $2,000 fee for as long as the person holds a valid permit under this section. A permit issued under this section is valid for one year and may be renewed, except that the department may revoke or suspend a permit prior to its expiration. A person is not entitled to a refund of the fees paid under this subsection if the person’s permit is denied, revoked, or suspended.

AB43,,6155 (3) The department may not issue a permit under this section to operate any premises which are within 500 feet of the perimeter of the grounds of any elementary or secondary school, playground, recreation facility, child care facility, public park, public transit facility, or library.

AB43,,6156 (4) Under this section, a separate permit is required for and issued to each class of permittee, and the permit holder may perform only the operations authorized by the permit. A permit issued under this section is not transferable from one person to another or from one premises to another. A separate permit is required for each place in this state where the operations of a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness occur, including each retail outlet. No person who has been issued a permit to operate as a marijuana retailer, or who has any direct or indirect financial interest in the operation of a marijuana retailer, shall be issued a permit to operate as a marijuana producer, marijuana processor, or marijuana distributor. A person who has been issued a permit to operate as a microbusiness is not required to hold separate permits to operate as a marijuana processor, marijuana distributor, or marijuana retailer, but shall specify on the person’s application for a microbusiness permit the activities that the person will be engaged in as a microbusiness.

AB43,,6157 (5) Each person issued a permit under this section shall post the permit in a conspicuous place on the premises to which the permit relates.

AB43,,6158 139.973 Regulation. (1) (a) No permittee may employ an individual who is under the age of 21 to work in the business to which the permit relates.

AB43,,6159 (b) Subject to ss. 111.321, 111.322, and 111.335, no permittee may employ an individual if any of the conditions under s. 139.972 (1) (c) 1. to 7. applies to the individual.

AB43,,6160 (2) A retail outlet shall sell no products or services other than usable marijuana or paraphernalia intended for the storage or use of usable marijuana.

AB43,,6161 (3) No marijuana retailer may allow a person who is under the age of 21 to enter or be on the premises of a retail outlet in violation of s. 961.71 (2m), unless that person is a qualifying patient, as defined in s. 73.17 (1) (d).

AB43,,6162 (4) The maximum amount of usable marijuana that a retail outlet may sell to an individual consumer in a single transaction may not exceed a permissible amount, as defined in s. 961.70 (3).

AB43,,6163 (4m) A marijuana retailer may not collect, retain, or distribute personal information regarding the retailer’s customers except that which is necessary to complete a sale of usable marijuana.

AB43,,6164 (5) No marijuana retailer may display any signage in a window, on a door, or on the outside of the premises of a retail outlet that is visible to the general public from a public right-of-way, other than a single sign that is no larger than 1,600 square inches identifying the retail outlet by the permittee’s business or trade name.

AB43,,6165 (6) No marijuana retailer may display usable marijuana in a manner that is visible to the general public from a public right-of-way.

AB43,,6166 (7) No marijuana retailer or employee of a retail outlet may consume, or allow to be consumed, any usable marijuana on the premises of the retail outlet.

AB43,,6167 (7m) A marijuana retailer may operate a retail outlet only between the hours of 8 a.m. and 8 p.m.

AB43,,6168 (8) Except as provided under sub. (5), no marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness may place or maintain, or cause to be placed or maintained, an advertisement of usable marijuana in any form or through any medium.

AB43,,6169 (9) (a) On a schedule determined by the department, every marijuana producer, marijuana processor, or microbusiness shall submit representative samples of the marijuana and usable marijuana produced or processed by the marijuana producer, marijuana processor, or microbusiness to a testing laboratory registered under s. 94.57 for testing marijuana and usable marijuana in order to certify that the marijuana and usable marijuana comply with standards prescribed by the department by rule, including testing for potency and for mold, fungus, pesticides, and other contaminants. The laboratory testing the sample shall destroy any part of the sample that remains after the testing.

AB43,,6170 (b) Marijuana producers, marijuana processors, and microbusinesses shall submit the results of the testing provided under par. (a) to the department in the manner prescribed by the department by rule.

AB43,,6171 (c) If a representative sample tested under par. (a) does not meet the standards prescribed by the department, the department shall take the necessary action to ensure that the entire lot from which the sample was taken is destroyed. The department shall promulgate rules to determine lots and lot numbers for purposes of this subsection and for the reporting of lots and lot numbers to the department.

AB43,,6172 (10) (a) A marijuana processor or a microbusiness that operates as a marijuana processor shall affix a label to all usable marijuana that the marijuana processor or microbusiness sells to marijuana distributors. The label may not be designed to appeal to persons under the age of 18. The label shall include all of the following:

AB43,,6173 1. The ingredients and the tetrahydrocannabinols concentration in the usable marijuana.

AB43,,6174 2. The producer’s business or trade name.

AB43,,6175 3. The producer’s permit number.

AB43,,6176 4. The harvest batch number of the marijuana.

AB43,,6177 5. The harvest date.

AB43,,6178 6. The strain name and product identity.

AB43,,6179 7. The net weight.

AB43,,6180 8. The activation time.

AB43,,6181 9. The name of laboratory performing any test, the test batch number, and the test analysis dates.

AB43,,6182 10. The logotype for recreational marijuana developed by the department of agriculture, trade and consumer protection under s. 100.145.

AB43,,6183 11. Warnings about the risks of marijuana use and pregnancy and risks of marijuana use by persons under the age of 18.

AB43,,6184 (b) No marijuana processor or microbusiness that operates as a marijuana processor may make usable marijuana using marijuana grown outside this state. The label on each package of usable marijuana may indicate that the usable marijuana is made in this state.

AB43,,6185 (11) (a) No permittee may sell marijuana or usable marijuana that contains more than 3 parts tetrahydrocannabinols to one part cannabidiol.

AB43,,6186 (b) No permittee may sell marijuana or usable marijuana that tests positive under sub. (9) (a) for mold, fungus, pesticides, or other contaminants if the contaminants, or level of contaminants, are identified by a testing laboratory to be potentially unsafe to the consumer.

AB43,,6187 (12) Immediately after beginning employment with a permittee, every employee of a permittee shall receive training, approved by the department, on the safe handling of marijuana and usable marijuana and on security and inventory accountability procedures.

AB43,,6188 (13) The department shall deposit all moneys received under this subchapter into the community reinvestment fund.

AB43,,6189 139.974 Records and reports. (1) Every permittee shall keep accurate and complete records of the production and sales of marijuana and usable marijuana in this state. The records shall be kept on the premises described in the permit and in such manner as to ensure permanency and accessibility for inspection at reasonable hours by the department’s authorized personnel. The department shall prescribe reasonable and uniform methods of keeping records and making reports and shall provide the necessary forms to permittees.

AB43,,6190 (2) If the department determines that any permittee’s records are not kept in the prescribed form or are in such condition that the department requires an unusual amount of time to determine from the records the amount of the tax due, the department shall give notice to the permittee that the permittee is required to revise the permittee’s records and keep them in the prescribed form. If the permittee fails to comply within 30 days, the permittee shall pay the expenses reasonably attributable to a proper examination and tax determination at the rate of $30 a day for each auditor used to make the examination and determination. The department shall send a bill for such expenses, and the permittee shall pay the amount of such bill within 10 days.

AB43,,6191 (3) If any permittee fails to file a report when due, the permittee shall be required to pay a late filing fee of $10. A report that is mailed is filed on time if it is mailed in a properly addressed envelope with postage prepaid, the envelope is officially postmarked, or marked or recorded electronically as provided under section 7502 (f) (2) (c) of the Internal Revenue Code, on the date due, and the report is actually received by the department or at the destination that the department prescribes within 5 days of the due date. A report that is not mailed is timely if it is received on or before the due date by the department or at the destination that the department prescribes. For purposes of this subsection, “mailed” includes delivery by a delivery service designated under section 7502 (f) of the Internal Revenue Code.

AB43,,6192 (4) Sections 71.78 (1), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m., relating to confidentiality of income, franchise, and gift tax returns, apply to any information obtained from any permittee under this subchapter on a tax return, report, schedule, exhibit, or other document or from an audit report relating to any of those documents, except that the department shall publish production and sales statistics.

AB43,,6193 139.975 Administration and enforcement. (1) The department shall administer and enforce this subchapter and promulgate rules necessary to administer and enforce this subchapter.

AB43,,6194 (2) The duly authorized employees of the department have all necessary police powers to prevent violations of this subchapter.

AB43,,6195 (3) Authorized personnel of the department of justice and the department of revenue, and any law enforcement officer, within their respective jurisdictions, may at all reasonable hours enter the premises of any permittee and examine the books and records to determine whether the tax imposed by this subchapter has been fully paid and may enter and inspect any premises where marijuana or usable marijuana is produced, processed, made, sold, or stored to determine whether the permittee is complying with this subchapter.

AB43,,6196 (4) The department may suspend or revoke the permit of any permittee who violates s. 100.30, any provision of this subchapter, or any rules promulgated under sub. (1). The department shall revoke the permit of any permittee who violates s. 100.30 3 or more times within a 5-year period.