HSB 646 (LSB 5404XD (13) 88)

SENATE/HOUSE FILE _____

BY  (PROPOSED GOVERNOR’S OFFICE OF DRUG CONTROL POLICY BILL)

A BILL FOR

An Act relating to the regulation of hemp, including by providing for testing methods and the regulation of hemp products, providing penalties, making penalties applicable, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
PRINCIPAL PROVISIONS 

    Section 1.  Section 204.2, Code 2020, is amended by adding the following new subsections:
   NEW SUBSECTION.  01.  “Consumable hemp product” means a hemp product that includes a substance that is metabolized or is otherwise subject to a biotransformative process when introduced into a human or animal body.
   a.  A consumable hemp product may be introduced into a human or animal body by ingestion, absorption, or inhalation by any device including but not limited to an electronic device.
   b.  A consumable hemp product may exist in a solid, liquid, or gaseous state.
   c.  A hemp product is deemed to be a consumable hemp product if it is any of the following:
   (1)  Designed by the processor, including the manufacturer, to be introduced into a human or animal body.
   (2)  Advertised as an item to be introduced into a human or animal body.
   (3)  Distributed, exported, or imported for sale or distribution to be introduced into a human or animal body.
   d.  “Consumable hemp product” includes but is not limited to any of the following:
   (1)  (a)  A combustible or noncombustible form of hemp that may be inhaled when used as part of a device including but not limited to any type of cigarette, cigarillo, cigar, or pipe.
   (b)  A noncombustible form of hemp that may be digested, such as food; internally absorbed, such as chew or snuff; or absorbed through the skin, such as a topical application.
   (2)  Hemp processed or otherwise manufactured, marketed, sold, or distributed as human or animal food, a human or animal food additive, a human or animal dietary supplement, or a human or animal drug.
   NEW SUBSECTION.  4A.  “Federal Food, Drug, and Cosmetic Act” means the Act so entitled as codified in 21 U.S.C. §301 et seq., including regulations adopted pursuant to that Act by the United States food and drug administration under the Code of Federal Regulations, Title 21.
   NEW SUBSECTION.  13.  “Total delta-9 tetrahydrocannabinol concentration” means the sum of the delta-9 tetrahydrocannabinol and delta-9 tetrahydrocannabinolic acid content expressed as a percentage and reported on a dry weight basis as determined according to a test as provided in section 204.8.
    Sec. 2.  Section 204.2, subsections 5, 6, and 8, Code 2020, are amended to read as follows:
   5.  a.  “Federal hemp law” means that part of Tit. X of the Agriculture Improvement Act of 2018, Pub. L. No. 115-334, that authorizes hemp production according to a state plan approved by the United States department of agriculture, as provided in §10113 of that Act, amending the Agricultural Marketing Act of 1946, 7 U.S.C. §1621 et seq., including by adding §297A through 297E. 
   b.  “Federal hemp law” includes rules adopted by the United States department of agriculture pursuant to the provisions described in paragraph “a”, including regulations provided in 7 C.F.R. pt. 990.
   6.  a.  “Hemp” means the plant cannabis sativa L. and any part of that plant, including the seeds thereof, and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a total delta-9 tetrahydrocannabinol concentration of not more than not exceeding three-tenths of one percent on a dry weight basis. 
   b.  “Hemp” also means a plant of the genus cannabis other than cannabis sativa L., with a total delta-9 tetrahydrocannabinol concentration of not more than not exceeding three-tenths of one percent on a dry weight basis, but only to the extent allowed by the department in accordance with applicable federal law, including the federal hemp law.
   8.  a.  “Hemp product” means an item derived from or made by processing hemp or parts of hemp, including but not limited to any item manufactured from hemp, including but not limited to such as cloth, cordage, fiber, food, fuel, paint, paper, particle board, plastic, hemp seed, seed meal, or seed oil.
   b.  “Hemp product” does not include any of the following:
   (1)  An item or part of an item with a maximum total delta-9 tetrahydrocannabinol concentration that exceeds exceeding three-tenths of one percent on a dry weight basis.
   (2)  Hemp seed that is capable of germination.
    Sec. 3.  NEW SECTION.  204.2A  Applicability —— other state law.
   This chapter does not limit the regulation of articles under other provisions of state law, including title IV and this title. 
    Sec. 4.  Section 204.7, subsection 9, Code 2020, is amended to read as follows:
   9.  a.  Except as otherwise provided in section 204.14A, all of the following apply:
   (1)  A person may engage in the retail sale of a hemp product if the all of the following apply: 
   (a)  The hemp was produced in this state or another state in compliance with the federal hemp law or other applicable federal law. A person may engage in the retail sale of a hemp product if the hemp was produced in another jurisdiction in compliance with applicable federal law and the laws of the other jurisdiction, if such law is substantially the same as applicable federal law.
   (b)  The hemp product is sold in compliance with the federal Food, Drug, and Cosmetic Act and other applicable federal law.
   b.  (2)  To the extent consistent with the federal Food, Drug, and Cosmetic Act and other applicable federal law, a derivative of hemp, including hemp-derived cannabidiol, may be added to cosmetics, personal care products, and products intended for human or animal consumption. The addition of such a derivative shall not be considered an adulteration of the product, unless otherwise provided in the federal Food, Drug, and Cosmetic Act and other applicable federal law.
   c.  (3)  A person may transport a hemp product within and through this state and may export a hemp product to any foreign nation, in accordance with applicable federal law and the law of the foreign nation.
   d.  b.  A hemp product complying with this subsection

paragraph “a” is not a controlled substance under chapter 124 or 453B.
    Sec. 5.  Section 204.8, subsection 1, paragraph c, Code 2020, is amended to read as follows:
   c.  The department shall provide the department of public safety any official test results of a sample that indicate a sample exceeds the maximum concentration of total delta-9 tetrahydrocannabinol in excess of concentration exceeding two percent on a dry weight basis. 
    Sec. 6.  Section 204.8, subsection 3, Code 2020, is amended to read as follows:
   3.  The official test shall be a composite test of the plants obtained by the department from a licensee’s crop site during the annual inspection and shall be conducted by a laboratory designated by the department. The sample must have a maximum concentration of test must indicate a total delta-9 tetrahydrocannabinol that does not exceed concentration not exceeding three-tenths of one percent on a dry weight basis. 
    Sec. 7.  Section 204.8, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  5.  A test conducted pursuant to this section must use decarboxylation or another similarly reliable analytical method as specified or approved by the United States department of agriculture, including as provided in 7 C.F.R. pt. 990.
    Sec. 8.  Section 204.9, subsection 2, paragraph b, Code 2020, is amended to read as follows:
   b.  The department of public safety or a local law enforcement agency may obtain a sample of plants that are part of the crop and provide for a test of that sample as provided in section 204.8. The department of public safety or a local law enforcement agency shall not impose, assess, or collect a fee for conducting an inspection or test under this section.
    Sec. 9.  Section 204.10, subsection 1, Code 2020, is amended to read as follows:
   1.  If a sample of a crop that is produced at a licensee’s crop site does not qualify as hemp indicates a total delta-9 tetrahydrocannabinol concentration exceeding three-tenths of one percent, but not exceeding two percent, according to an official test conducted pursuant to section 204.8, the department, in consultation with the department of public safety, shall order the disposal of the crop by destruction at the site or if necessary require the crop to be removed to another location for destruction.
    Sec. 10.  NEW SECTION.  204.14A  Consumable hemp products —— criminal offense.
   1.  Except as provided in subsection 3, a person shall not process or otherwise manufacture, transport, deliver, market, sell, distribute, possess, or use a consumable hemp product.
   2.  A person who violates subsection 1 is guilty of a serious misdemeanor.
   3.  Subsection 1 does not apply to the extent that the federal Food, Drug, and Cosmetic Act or other applicable federal law authorizes or recognizes the processing or manufacturing, transportation, delivery, marketing, sale, or distribution, possession, or use of a consumable hemp product for its intended use by a method for introduction into the body of a human or animal.
    Sec. 11.  NEW SECTION.  204.14B  Consumable hemp products —— notice.
   A person shall not sell a consumable hemp product on a retail basis unless the sale is authorized or recognized by the federal Food, Drug, and Cosmetic Act or other applicable federal law, and the person notifies retail purchasers of the consumable hemp product’s intended use. The notice shall be posted in a manner and format required by rules adopted by the department. However, the notice shall be posted in a conspicuous place where the consumable hemp product is offered for sale.
    Sec. 12.  Section 204.15, subsection 1, paragraph a, subparagraph (3), Code 2020, is amended to read as follows:
   (3)  Producing a crop on the licensee’s crop site with a maximum concentration of total delta-9 tetrahydrocannabinol that exceeds concentration exceeding three-tenths of one percent according to the results of an official test of a sample obtained from the licensed crop site pursuant to an inspection conducted under section 204.8.
    Sec. 13.  Section 204.15, subsection 1, paragraph b, Code 2020, is amended to read as follows:
   b.  It is conclusively presumed that a licensee acted with a culpable mental state greater than negligence, if the department obtains a sample of a crop produced on the licensee’s crop site and the official test results of the sample conducted pursuant to section 204.8 indicate a maximum concentration of total delta-9 tetrahydrocannabinol in excess of concentration exceeding two percent on a dry weight basis.
    Sec. 14.  Section 204.15, subsection 3, Code 2020, is amended to read as follows:
   3.  A licensee shall not participate in the negligent violation program, if a official test results of a sample of plants that are part of a crop produced on the licensee’s crop site exceeds a maximum concentration of two percent indicate a total delta-9 tetrahydrocannabinol on a dry weight basis concentration exceeding two percent.
    Sec. 15.  Section 718.6, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  A person who knowingly identifies a controlled substance, as defined in section 124.101, as hemp or a hemp product, as those terms are defined in section 204.2, to a law enforcement officer, commits a simple misdemeanor. However, if the controlled substance is an element or part of an element in the criminal offense for which the person may be charged, and that criminal offense is punishable as a serious or aggravated misdemeanor or a felony, the person commits a serious misdemeanor.
DIVISION II
COORDINATING PROVISIONS

    Sec. 16.  Section 124.101, Code 2020, is amended by adding the following new subsections:
   NEW SUBSECTION.  15A.  “Hemp” means the same as defined in section 204.2.
   NEW SUBSECTION.  15B.  “Hemp product” means the same as defined in section 204.2.
   NEW SUBSECTION.  30A.  “Total delta-9 tetrahydrocannabinol concentration” means the same as defined in section 204.2.
    Sec. 17.  Section 124.204, subsection 7, paragraph b, as enacted by 2019 Iowa Acts, chapter 130, section 23, is amended to read as follows:
   b.  (1)  Hemp as defined in section 204.2 that is or was produced in this state, or was produced in another state, in accordance with the provisions of chapter 204 with a maximum total delta-9 tetrahydrocannabinol concentration that does not exceed exceeding three-tenths of one percent on a dry weight basis.
   (2)  A hemp product as provided in chapter 204 with a maximum total delta-9 tetrahydrocannabinol concentration that does not exceed exceeding three-tenths of one percent on a dry weight basis.
    Sec. 18.  Section 124.401H, subsection 3, as enacted by 2019 Iowa Acts, chapter 130, section 25, is amended to read as follows:
   3.  The offense arises out of a test of a sample of plants that are part of a crop produced on the licensee’s crop site, and the test indicates that the sample does not qualify as hemp under section 204.8, and does not exceed a maximum concentration of two percent the test result indicates that the crop has a total delta-9 tetrahydrocannabinol on a dry weight basis concentration not exceeding two percent.
    Sec. 19.  Section 124.506, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  4A.  According to an order for the disposal of a crop that does not qualify as hemp as provided in section 204.10.
    Sec. 20.  Section 453B.1, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  10A.  “Total delta-9 tetrahydrocannabinol concentration” means the same as defined in section 204.2.
    Sec. 21.  Section 453B.18, subsection 3, as enacted by 2019 Iowa Acts, chapter 130, section 32, is amended to read as follows:
   3.  The offense arises out of a test of a sample of plants that are part of a crop produced on the licensee’s crop site, and the test indicates that the sample does not qualify as hemp under section 204.8, and it does not exceed a maximum concentration of two percent the test indicates that the crop has a total delta-9 tetrahydrocannabinol on a dry weight basis concentration not exceeding two percent.
DIVISION III
CONTINGENT EFFECTIVE DATE

    Sec. 22.  CONTINGENT EFFECTIVE DATE.
   1.  Except as provided in subsection 2, this Act takes effect on the date that chapter 204 is implemented as provided in 2019 Iowa Acts, chapter 130, section 18, subsection 1.
   2.  a.  If the department of agriculture and land stewardship, in cooperation with the department of public safety, determines that the United States department of agriculture must approve any amendment to an existing provision or new provision enacted in this Act as part of a state plan pursuant to section 204.3, the secretary of agriculture shall publish a notice of that fact in the Iowa administrative bulletin. The department of agriculture and land stewardship shall forward a copy of the statement to the Code editor prior to publication.
   b.  If a determination is made as provided in paragraph “a”, the amendment or new provision enacted in this Act takes effect on the publication date of the edition of the Iowa administrative bulletin that includes a statement by the secretary of agriculture of the department of agriculture and land stewardship certifying that the United States department of agriculture has approved the amendment or provision. The department of agriculture and land stewardship shall forward a copy of the statement to the Code editor prior to publication.
   3.  This section does not affect the implementation of provisions amended or enacted in 2019 Iowa Acts, chapter 130.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   BACKGROUND —— GENERAL. This bill amends a number of provisions enacted in 2019 Iowa Acts, chapter 130 (Iowa’s 2019 Act). Division I of that Act creates Code chapter 204, the “Iowa Hemp Act” (IHA) (see Code section 204.1), authorizing the production of a certain type of cannabis (sativa L.). Division II of that Act includes a number of coordinating provisions, including amendments that remove hemp from the list of schedule I controlled substances (see Code chapters 124 and 453B).
   BACKGROUND —— JURISDICTION OF THE UNITED STATES DEPARTMENT OF AGRICULTURE. Iowa’s 2019 Act was enacted after the enactment of the federal Agriculture Improvement Act of 2018, commonly known as the 2018 farm bill, including provisions allowing the production of hemp (7 U.S.C. §1639o et seq.). The IHA refers to these provisions as the “federal hemp law” (Code section 204.2). The federal hemp law allows states and tribes to assume primary regulatory authority over the production of hemp by submitting a plan for approval by the United States department of agriculture (USDA). The IHA assigns principal regulatory authority over hemp production to the department of agriculture and land stewardship (DALS), which must act in cooperation with the department of public safety (DPS). The USDA has published its interim rules to implement the federal hemp law (7 C.F.R. pt. 990). The USDA has neither approved nor disapproved Iowa’s state plan.
   BACKGROUND —— JURISDICTION OF THE UNITED STATES FOOD AND DRUG ADMINISTRATION. By its own terms, the federal hemp law does not affect or modify the federal Food, Drug, and Cosmetic Act (FDCA) (21 U.S.C. §301 et seq.), and therefore the authority of the United States food and drug administration (FDA) to regulate human and animal foods and additives, dietary supplements, human and veterinary drugs, and cosmetics is preserved (see 7 U.S.C. §1639r).
   BACKGROUND —— IMPLEMENTATION AND EFFECTIVE DATES. The provisions of Iowa’s 2019 Act that enacted the IHA took effect May 13, 2019, but will be implemented only if the USDA approves Iowa’s state plan. The implementation date is the publication date of the edition of the Iowa administrative bulletin (IAB) that includes a statement by DALS certifying approval (2019 Iowa Acts, chapter 130, section 18). The coordinating amendments will take effect on the IAB’s publication date and are therefore contingent on the IHA’s implementation (2019 Iowa Acts, chapter 130, section 33).
   DIVISION I —— PRINCIPAL PROVISIONS. The IHA follows the federal hemp law by defining hemp as a species of cannabis (e.g., sativa L.) having a maximum concentration of delta-9 tetrahydrocannabinol (THC) not exceeding three-tenths of 1 percent as calculated on a dry weight basis. The bill modifies the testing methodology in accordance with the USDA interim regulations. The bill requires testing that calculates a value produced from a process referred to as decarboxylation that determines the “total” potential delta-9 tetrahydrocannabinol which equals the sum of the THC and a related compound, tetrahydrocannabinolic acid (THC-A), reported on a dry weight basis (Code sections 204.2 and 204.8). 
   DIVISION I —— REGULATION OF HEMP PRODUCTS. The IHA defines a hemp product as derived from or made by processing hemp or parts of hemp. Generally, the IHA allows a person to engage in the retail sale of a hemp product so long as the hemp was produced in this state or another state in compliance with the federal hemp law (Code section 204.7(9)). The bill provides that the sale of a hemp product is authorized if allowed by the FDCA or other applicable federal law. 
   DIVISION I —— SPECIAL REGULATIONS APPLICABLE TO CONSUMABLE HEMP PRODUCTS. The bill amends the IHA by defining a consumable hemp product as a hemp product that may be introduced into a human or animal body either directly or via a device (e.g., a skin patch, pipe, cigarette, cigar, or cigarillo) (Code section 204.2). The bill prohibits a person from processing or otherwise manufacturing, transporting, delivering, marketing, selling, distributing, possessing, or using a consumable hemp product. A person violating the prohibition is guilty of a serious misdemeanor. This prohibition does not apply to the extent that the FDCA or other applicable federal law authorizes or recognizes the processing, manufacture, transportation, delivery, marketing, sale, distribution, possession, or use of a consumable hemp product for its intended use by a method for introduction into the body of a human or animal. The bill also requires a person who sells a consumable hemp product on a retail basis as authorized by the FDCA to notify retail purchasers of the consumable hemp product’s intended use. The notice must be posted in a manner and format required by rules adopted by DALS. 
   DIVISION I —— WRONGFULLY IDENTIFYING HEMP. The bill amends Code section 718.6 to prohibit a person from knowingly identifying a controlled substance as hemp or a hemp product to a law enforcement officer. Generally, the person who commits the offense is guilty of a simple misdemeanor. However, that person commits a serious misdemeanor if the criminal offense relating to the controlled substance for which the person may be charged is punishable as a serious or aggravated misdemeanor or a felony. 
   DIVISION II —— COORDINATING PROVISIONS. The bill makes changes to provisions in division II of the 2019 Iowa Act. Specifically, it includes provisions that account for the IHA’s new method of testing hemp based on the total sum of THC and THC-A compounds. It also provides for the disposal of a crop according to an order issued by DALS.
   APPLICABLE CIVIL PENALTIES. A person who violates a provision of the IHA is subject to a civil penalty of not less than $500 and not more than $2,000 with each day of a continuing offense considered as a separate offense (Code section 204.12). DALS or the attorney general may seek injunctive relief by petitioning a court (Code section 204.13). 
   CRIMINAL PENALTIES. A simple misdemeanor is punishable by confinement for no more than 30 days or a fine of at least $65 but not more than $625 or by both. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $315 but not more than $1,875.
   DIVISION III —— CONTINGENT EFFECTIVE DATE. The bill takes effect on the implementation date of Code chapter 204, unless DALS, acting in coordination with DPS, determines that the provisions must be submitted to the USDA for approval. In that case, the provisions take effect when DALS publishes a notice of the USDA’s approval in the IAB.