H.F. 816 DIVISION I 1 CRIMINAL PENALTIES 2 Section 1. Section 124.401, subsection 1, unnumbered 3 paragraph 1, Code 2021, is amended to read as follows: 4 Except as authorized by this chapter or chapter 124E or 5 124F , it is unlawful for any person to manufacture, deliver, or 6 possess with the intent to manufacture or deliver, a controlled 7 substance, a counterfeit substance, a simulated controlled 8 substance, or an imitation controlled substance, or to act 9 with, enter into a common scheme or design with, or conspire 10 with one or more other persons to manufacture, deliver, or 11 possess with the intent to manufacture or deliver a controlled 12 substance, a counterfeit substance, a simulated controlled 13 substance, or an imitation controlled substance. 14 Sec. 2. Section 124.401, subsection 1, paragraph a, 15 subparagraph (6), Code 2021, is amended by striking the 16 subparagraph. 17 Sec. 3. Section 124.401, subsection 1, paragraph b, 18 subparagraph (6), Code 2021, is amended by striking the 19 subparagraph. 20 Sec. 4. Section 124.401, subsection 1, paragraph c, 21 subparagraph (5), Code 2021, is amended by striking the 22 subparagraph. 23 Sec. 5. Section 124.401, subsection 1, paragraph c, 24 subparagraph (9), Code 2021, is amended to read as follows: 25 (9) Any other controlled substance, counterfeit substance, 26 simulated controlled substance, or imitation controlled 27 substance classified in schedule I, II, or III, except as 28 provided in paragraph “d” , or in chapter 124E or 124F . 29 Sec. 6. Section 124.401, subsection 1, paragraph d, Code 30 2021, is amended to read as follows: 31 d. Violation of this subsection , with respect to any other 32 controlled substances, counterfeit substances, simulated 33 controlled substances, or imitation controlled substances 34 classified in schedule IV or V is an aggravated misdemeanor. 35 -1- LSB 1720YH (2) 89 ss/rh 1/ 48

H.F. 816 However, violation of this subsection involving fifty kilograms 1 or less of marijuana or involving flunitrazepam is a class “D” 2 felony. 3 Sec. 7. Section 124.401, subsection 5, unnumbered paragraph 4 2, Code 2021, is amended to read as follows: 5 If the controlled substance is marijuana, the punishment 6 shall be by imprisonment in the county jail for not more than 7 six months or by a fine of not more than one thousand dollars, 8 or by both such fine and imprisonment for a first offense. If 9 the controlled substance is marijuana and the person has been 10 previously convicted of a violation of this subsection in which 11 the controlled substance was marijuana, the punishment shall be 12 as provided in section 903.1, subsection 1 , paragraph “b” . If 13 the controlled substance is marijuana and the person has been 14 previously convicted two or more times of a violation of this 15 subsection in which the controlled substance was marijuana, 16 the person is guilty of an aggravated misdemeanor. This 17 subsection does not apply to the possession of marijuana which 18 is punishable pursuant to chapter 124F. 19 Sec. 8. Section 124.401G, unnumbered paragraph 1, Code 20 2021, is amended to read as follows: 21 Notwithstanding any provision of this chapter to the 22 contrary, a person shall not be guilty of an offense under 23 this chapter , including under section 124.401 or 124.410 , 24 for producing, possessing, using, harvesting, handling, 25 manufacturing, marketing, transporting, delivering, or 26 distributing the plant cannabis, if all of the following apply: 27 Sec. 9. Section 124.407, subsection 2, Code 2021, is amended 28 to read as follows: 29 2. a. Any person who violates this section and where the 30 controlled substance is any one a controlled substance other 31 than marijuana is guilty of a class “D” felony. 32 b. Any person who violates this section , and where the 33 controlled substance is marijuana only, is guilty of a serious 34 misdemeanor. 35 -2- LSB 1720YH (2) 89 ss/rh 2/ 48

H.F. 816 Sec. 10. Section 124.411, subsection 2, Code 2021, is 1 amended to read as follows: 2 2. For purposes of this section , an offense is considered 3 a second or subsequent offense, if, prior to the person’s 4 having been convicted of the offense, the offender has ever 5 been convicted under this chapter or under any state or federal 6 statute relating to narcotic drugs or cocaine, marijuana, 7 depressant, stimulant, or hallucinogenic drugs. 8 Sec. 11. Section 124.413, subsection 2, Code 2021, is 9 amended to read as follows: 10 2. This section shall not apply if : 11 a. The offense is found to be an accommodation pursuant to 12 section 124.410 ; or 13 b. The the controlled substance is marijuana. 14 Sec. 12. NEW SECTION . 124F.1 Definitions. 15 As used in this subchapter: 16 1. “Counterfeit substance” means the same as defined in 17 section 124.101. 18 2. “Imitation controlled substance” means the same as 19 defined in section 124.101. 20 3. “Marijuana” means the same as defined in section 124.101, 21 and includes a counterfeit substance, imitation controlled 22 substance, or simulated controlled substance containing a 23 detectable amount of marijuana. 24 4. “Simulated controlled substance” means the same as 25 defined in section 124.101. 26 Sec. 13. NEW SECTION . 124F.2 Marijuana —— penalties. 27 1. Except as otherwise provided in this subchapter and 28 chapter 124E, it is unlawful for any person to manufacture, 29 deliver, or possess with the intent to manufacture or deliver 30 marijuana, or to act with, enter into a common scheme or 31 design with, or conspire with one or more other persons to 32 manufacture, deliver, or possess with the intent to manufacture 33 or deliver marijuana. A violation of this subsection involving 34 the following amounts of marijuana shall be punishable as 35 -3- LSB 1720YH (2) 89 ss/rh 3/ 48

H.F. 816 follows: 1 a. More than twenty-two kilograms shall be a class “C” 2 felony. 3 b. More than two kilograms but not more than twenty-two 4 kilograms shall be a class “D” felony. 5 c. More than twelve ounces but not more than two kilograms 6 shall be an aggravated misdemeanor. 7 d. More than four ounces but not more than twelve ounces 8 shall be punishable as a serious misdemeanor. 9 e. Four ounces or less shall be punishable as a simple 10 misdemeanor, except as provided in section 124F.3. 11 2. a. It is unlawful for any person knowingly or 12 intentionally to possess marijuana unless such substance was 13 obtained directly from, or pursuant to, a valid prescription 14 or order of a practitioner while acting in the course of the 15 practitioner’s professional practice, or except as otherwise 16 authorized by this subsection. A violation of this subsection 17 involving the possession of the following amounts of marijuana 18 shall be punishable as follows: 19 (1) More than six ounces but not more than twelve ounces is 20 a serious misdemeanor. 21 (2) More than one-half ounce but not more than six ounces 22 is a simple misdemeanor. 23 (3) One-half ounce or less is not a criminal offense but 24 shall be assessed as a civil penalty in the amount of one 25 hundred dollars, except if the person is under twenty-one years 26 of age, the person commits a serious misdemeanor. 27 (a) The civil penalty shall be collected by the clerk of the 28 district court pursuant to section 602.8105, subsection 5. 29 (b) Any records relating to the civil penalty shall not 30 be displayed for public viewing on the Iowa court information 31 system. 32 (c) Any records relating to the civil penalty shall not 33 be kept in the criminal history data files maintained by the 34 department of public safety. Any records relating to the civil 35 -4- LSB 1720YH (2) 89 ss/rh 4/ 48

H.F. 816 penalty shall not be disseminated to other criminal or juvenile 1 justice agencies. 2 b. Notwithstanding paragraph “a” , a municipality may, by 3 ordinance, allow for the legal possession of marijuana. 4 3. a. A person shall not possess, and a retail marijuana 5 store not sell, in a single transaction, retail marijuana in 6 excess of the following amounts: 7 (1) For a resident of Iowa twenty-one years of age or older: 8 (a) Thirty grams of marijuana flower. 9 (b) Five grams of marijuana concentrate. 10 (c) Five hundred milligrams of tetrahydrocannabinol 11 contained in a product infused with marijuana. 12 (2) For a person twenty-one years of age or older who is not 13 a resident of Iowa: 14 (a) Fifteen grams of marijuana flower. 15 (b) Two and one-half grams of marijuana concentrate. 16 (c) Two hundred fifty milligrams of tetrahydrocannabinol 17 contained in a product infused with marijuana. 18 b. A person in possession of retail marijuana in excess of 19 the amounts specified in paragraph “a” equivalent to the amounts 20 specified in subsection 2, paragraph “a” , shall be subject to 21 the penalties in subsection 2, paragraph “a” . 22 c. A retail marijuana store in violation of this subsection 23 shall be subject to licensee discipline pursuant to section 24 124F.20. 25 d. For purposes of this subsection, “retail marijuana” and 26 “retail marijuana store” mean the same as defined in section 27 124F.7. 28 4. Upon the expiration of two years following a conviction 29 for a violation of subsection 2, paragraph “a” , subparagraph 30 (3), or for a violation of subsection 2, paragraph “b” , 31 subparagraph (2), a person may petition the court to expunge 32 the conviction, and if the person has had no other criminal 33 convictions, other than local traffic violations or simple 34 misdemeanor violations of chapter 321 during the two-year 35 -5- LSB 1720YH (2) 89 ss/rh 5/ 48

H.F. 816 period, the conviction shall be expunged as a matter of 1 law. The court shall enter an order that the record of the 2 conviction be expunged by the clerk of the district court. 3 Notwithstanding section 692.2, after receipt of notice from 4 the clerk of the district court that a record of conviction 5 has been expunged pursuant to this subsection, the record of 6 conviction shall be removed from the criminal history data 7 files maintained by the department of public safety. 8 Sec. 14. NEW SECTION . 124F.3 Delivery or possession with 9 the intent to deliver —— small amounts. 10 If the amount of marijuana delivered or possessed with 11 intent to deliver is one ounce or less and no remuneration was 12 provided, the defendant shall not be prosecuted for a violation 13 of this subchapter. 14 Sec. 15. NEW SECTION . 124F.4 Juvenile offenses. 15 The juvenile court shall have exclusive original 16 jurisdiction in a proceeding concerning a minor who is alleged 17 to have committed a violation of this subchapter. 18 Sec. 16. NEW SECTION . 124F.5 Marijuana use in public. 19 1. Marijuana shall not be consumed in areas open and 20 accessible to the public, including but not limited to public 21 transportation facilities, sporting or music venues, parks, 22 playgrounds, sidewalks and roads, outdoor cafes, or indoor but 23 public locations. 24 2. A person who violates this section commits a simple 25 misdemeanor punishable as a scheduled violation under section 26 805.8C, subsection 14. 27 3. Upon the expiration of two years following conviction 28 for a violation of subsection 1, a person may petition the 29 court to expunge the conviction, and if the person has had no 30 other criminal convictions, other than local traffic violations 31 or simple misdemeanor violations of chapter 321 during the 32 two-year period, the conviction shall be expunged as a matter 33 of law. The court shall enter an order that the record of the 34 conviction be expunged by the clerk of the district court. 35 -6- LSB 1720YH (2) 89 ss/rh 6/ 48

H.F. 816 Notwithstanding section 692.2, after receipt of notice from 1 the clerk of the district court that a record of conviction 2 has been expunged pursuant to this subsection, the record of 3 conviction shall be removed from the criminal history data 4 files maintained by the department of public safety. 5 Sec. 17. NEW SECTION . 321.284B Marijuana in motor vehicles. 6 1. A driver of a motor vehicle upon a public street or 7 highway shall not use marijuana in the passenger area of the 8 motor vehicle. “Passenger area” means the area designed to 9 seat the driver and passengers while the motor vehicle is in 10 operation and any area that is readily accessible to the driver 11 or a passenger while in their seating positions, including the 12 glove compartment. 13 2. A driver or passenger of or in a motor vehicle upon a 14 public street or highway shall not possess marijuana in the 15 passenger area of a motor vehicle except in a sealed, odor 16 proof, child resistant container. 17 3. For the purposes of this section, “marijuana” means the 18 same as defined in section 124.401. 19 4. A person who knowingly violates a provision of this 20 section is guilty of a simple misdemeanor. 21 Sec. 18. Section 602.8105, Code 2021, is amended by adding 22 the following new subsection: 23 NEW SUBSECTION . 5. The clerk of the district court shall 24 collect the civil penalty assessed pursuant to section 124F.2, 25 subsection 2, paragraph “a” , subparagraph (3). 26 Sec. 19. Section 805.8C, Code 2021, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 14. Marijuana violations. For marijuana 29 use in public violations under section 124F.5, the scheduled 30 fine is fifty dollars for a first violation, and one hundred 31 dollars for a second or subsequent violation. 32 Sec. 20. NEW SECTION . 901C.4 Felony offenses related to 33 marijuana —— expungement. 34 1. In addition to the expungement provisions available 35 -7- LSB 1720YH (2) 89 ss/rh 7/ 48

H.F. 816 to a defendant convicted of a misdemeanor marijuana offense 1 under chapter 124, upon application of a defendant convicted 2 of a felony offense under chapter 124 in the county where the 3 conviction occurred, related to the possession or transfer of 4 marijuana, the court shall enter an order expunging the record 5 of such a criminal case. 6 2. A person shall be granted an expungement of a record 7 under this section one time in the person’s lifetime. However, 8 the one application may request the expungement of records 9 relating to more than one offense under this section if the 10 offenses arose from the same transaction or occurrence, and the 11 application contains the offenses to be expunged. 12 3. The expunged record under this section is a confidential 13 record exempt from public access under section 22.7 but shall 14 be made available by the clerk of the district court upon court 15 order. 16 4. Notwithstanding section 692.2, after receipt of 17 notice from the clerk of the district court that a record of 18 conviction has been expunged under subsection 1, the record 19 of conviction shall be removed from the criminal history data 20 files maintained by the department of public safety if such a 21 record was maintained in the criminal history data files. 22 5. The supreme court may prescribe rules governing the 23 procedures applicable to the expungement of a criminal case 24 under this section. 25 6. This section applies to a felony conviction that occurred 26 prior to January 1, 2022. 27 Sec. 21. REPEAL. Section 124.410, Code 2021, is repealed. 28 DIVISION II 29 RETAIL MARIJUANA 30 Sec. 22. NEW SECTION . 124F.6 Purpose and findings. 31 The general assembly finds all of the following: 32 1. Marijuana prohibition, like alcohol prohibition before 33 it, has been a wasteful and destructive failure. About half 34 of Americans admit to having used marijuana despite more than 35 -8- LSB 1720YH (2) 89 ss/rh 8/ 48

H.F. 816 eight decades of prohibition. 1 2. The prohibition of marijuana has had an unfair, disparate 2 impact on persons and communities of color. 3 3. The prohibition of marijuana diverts law enforcement 4 resources from violent and property crimes and subjects 5 civilians to unnecessary police interactions. 6 4. Keeping marijuana illegal deprives the state of 7 thousands of legal jobs and hundreds of millions of dollars in 8 tax revenue. 9 5. The use of marijuana should be legal for persons 10 twenty-one years of age or older and subject to taxation and 11 regulation. 12 Sec. 23. NEW SECTION . 124F.7 Definitions. 13 For the purposes of this subchapter: 14 1. “Division” means the alcoholic beverages division of the 15 department of commerce. 16 2. “Immature plant” means a nonflowering marijuana plant 17 that is no taller than eight inches and no wider than eight 18 inches, is produced from a cutting, clipping, or seedling, and 19 is in a cultivating container. 20 3. “License” means a license or registration issued pursuant 21 to this subchapter. 22 4. “Licensed premises” means the premises specified in an 23 application for a license under this subchapter, which are 24 owned or in possession of the licensee and within which the 25 licensee is authorized to cultivate, manufacture, distribute, 26 sell, or test retail marijuana and retail marijuana products in 27 accordance with this subchapter. 28 5. “Licensee” means a person licensed or registered pursuant 29 to this subchapter. 30 6. “Local jurisdiction” means a city or county. 31 7. “Local licensing authority” means, for any local 32 jurisdiction that has chosen to adopt a local licensing 33 requirement in addition to the state licensing requirements 34 of this subchapter, an authority designated by a municipal 35 -9- LSB 1720YH (2) 89 ss/rh 9/ 48

H.F. 816 or county ordinance, or resolution, or the governing body of 1 a municipality or county, or the board of commissioners of a 2 county if no such authority is designated. 3 8. “Location” means a particular parcel of land that may be 4 identified by an address or other descriptive means. 5 9. “Marijuana” means the same as defined in section 124.101. 6 10. “Marijuana accessories” means any equipment, products, 7 or materials of any kind which are used, intended for use, or 8 designed for use in planting, cultivating, growing, harvesting, 9 composting, manufacturing, compounding, converting, producing, 10 processing, preparing, testing, analyzing, packaging, 11 repackaging, storing, vaporizing, or containing marijuana, or 12 for ingesting, inhaling, or otherwise introducing marijuana 13 into the human body. 14 11. “Person” means a natural person, partnership, 15 association, company, corporation, limited liability company, 16 or organization; except that “person” does not include any 17 governmental organization. 18 12. “Retail marijuana” means all parts of the plant of the 19 genus Cannabis, whether growing or not, the seeds thereof; the 20 resin extracted from any part of the plant; and every compound, 21 manufacture, salt, derivative, mixture, or preparation of the 22 plant, its seeds or resin, including marijuana concentrate. 23 “Retail marijuana” does not include industrial hemp, nor does 24 it include fiber produced from the stalks, oil or cake made 25 from the seeds of the plant, sterilized seeds of the plant 26 which are incapable of germination, or the weight of any other 27 ingredient combined with marijuana to prepare topical or oral 28 administrations, food, drink, or other product. 29 13. “Retail marijuana cultivation facility” means an entity 30 licensed to cultivate, prepare, package, and sell marijuana to 31 retail marijuana stores, to marijuana product manufacturing 32 facilities, and to other marijuana cultivation facilities, but 33 not to consumers. 34 14. “Retail marijuana establishment” means a retail 35 -10- LSB 1720YH (2) 89 ss/rh 10/ 48

H.F. 816 marijuana store, a retail marijuana cultivation facility, or a 1 retail marijuana products manufacturer. 2 15. “Retail marijuana products” means concentrated marijuana 3 products and marijuana products that are comprised of marijuana 4 and other ingredients and are intended for use or consumption, 5 such as but not limited to edible products, ointments, and 6 tinctures. 7 16. “Retail marijuana products manufacturer” means an entity 8 licensed to purchase marijuana; manufacture, prepare, and 9 package marijuana products; and sell marijuana and marijuana 10 products to other marijuana product manufacturing facilities 11 and to retail marijuana stores, but not to consumers. 12 17. “Retail marijuana store” means an entity licensed 13 to purchase marijuana from marijuana cultivation facilities 14 and sell marijuana and to purchase marijuana products from 15 retail marijuana product manufacturing facilities and to sell 16 marijuana and marijuana products to consumers. 17 18. “Retail marijuana transporter” means an entity or person 18 licensed to transport retail marijuana and retail marijuana 19 products from one retail marijuana establishment to another 20 retail marijuana establishment and to temporarily store the 21 transported retail marijuana and retail marijuana products at 22 its licensed premises, but is not authorized to sell retail 23 marijuana or retail marijuana products under any circumstances. 24 Sec. 24. NEW SECTION . 124F.8 Applicability. 25 1. On or after July 1, 2022, an applicant may apply for 26 licensure of a retail marijuana establishment pursuant to this 27 subchapter. 28 2. a. Pursuant to subsection 1, an applicant shall complete 29 forms as provided by the division and shall pay the application 30 fee and the licensing fee. The division shall forward, within 31 seven days of the date of the application, one-half of the 32 application fee to the local jurisdiction unless the local 33 jurisdiction has prohibited the operation of retail marijuana 34 establishments. If the license is denied, the division shall 35 -11- LSB 1720YH (2) 89 ss/rh 11/ 48

H.F. 816 refund the licensing fee to the applicant. 1 b. The division shall act upon an application made pursuant 2 to subsection 1 no sooner than forty-five days and no later 3 than ninety days after the date of the application. The 4 division shall process applications in the order in which 5 completed applications are received by the division. 6 3. Any local jurisdiction may enact ordinances or 7 regulations governing the time, place, manner, and number of 8 retail marijuana establishments, which may include a local 9 licensing requirement, or may prohibit the operation of retail 10 marijuana establishments by ordinance or by a referred or 11 initiated measure. If a county acts through an initiated 12 measure, the proponents shall submit a petition signed by not 13 less than fifteen percent of the registered electors in the 14 county. 15 Sec. 25. NEW SECTION . 124F.9 Retail marijuana licensure. 16 1. The division shall develop and maintain a seed-to-sale 17 tracking system that tracks retail marijuana from either 18 seed or immature plant stage until the marijuana or retail 19 marijuana product is sold to a customer at a retail marijuana 20 establishment to ensure that no marijuana grown or processed 21 by a retail marijuana establishment is sold or otherwise 22 transferred except by a retail marijuana store. 23 2. The division shall adopt all rules necessary for the 24 implementation of this chapter. 25 3. Nothing in this subchapter shall be construed to be 26 a delegation to the division of the power to fix prices for 27 retail marijuana. 28 4. Nothing in this subchapter shall be construed to limit 29 a law enforcement agency’s ability to investigate unlawful 30 activity in relation to a retail marijuana establishment. A 31 law enforcement agency shall have the authority to conduct a 32 criminal history record check of a licensee and an employee of 33 a licensee during an investigation of unlawful activity related 34 to retail marijuana and retail marijuana products. 35 -12- LSB 1720YH (2) 89 ss/rh 12/ 48

H.F. 816 5. The division shall create a statewide licensure class 1 system for retail marijuana cultivation facilities. The 2 classifications may be based upon square footage of the 3 facility; lights, lumens, or wattage; canopy lighting; the 4 number of cultivating plants; a combination of the foregoing; 5 or other reasonable metrics. The division shall create a fee 6 structure for the licensure class system. 7 Sec. 26. NEW SECTION . 124F.10 State and local participation 8 in licensure. 9 1. When the division receives an application for an 10 initial license or a renewal of an existing license for 11 any retail marijuana establishment, the division shall 12 provide, within seven days of receipt of an application, 13 a copy of the application to the local jurisdiction in 14 which the establishment is to be located unless the local 15 jurisdiction has prohibited the operation of retail marijuana 16 establishments. The local jurisdiction shall determine whether 17 the application complies with local restrictions relating 18 to time, place, manner, and the number of retail marijuana 19 establishments allowed. The local jurisdiction shall inform 20 the division whether the application complies with local 21 restrictions. 22 2. A local jurisdiction may impose a separate local 23 licensing requirement as a part of its restrictions relating 24 to time, place, manner, and the number of retail marijuana 25 establishments allowed. A local jurisdiction may decline 26 to impose any local licensing requirements, but a local 27 jurisdiction shall notify the division that it either approves 28 or denies each application received by the local jurisdiction. 29 3. If a local jurisdiction issues a local license for 30 a retail marijuana establishment, a local jurisdiction may 31 schedule a public hearing on the application. If the local 32 jurisdiction schedules a hearing, it shall post and publish 33 public notice of the hearing not less than ten days prior 34 to the hearing. The local jurisdiction shall give public 35 -13- LSB 1720YH (2) 89 ss/rh 13/ 48

H.F. 816 notice by posting a sign in a conspicuous place on the license 1 applicant’s premises for which a local license application 2 has been made and by publication in a newspaper of general 3 circulation in the county in which the applicant’s premises are 4 located. 5 4. If a local jurisdiction does not issue local licenses, 6 the local jurisdiction may give public notice of the state 7 license application by posting a sign in a conspicuous place 8 on the state license applicant’s premises for which a state 9 license application has been made and by publication in a 10 newspaper of general circulation in the county in which the 11 applicant’s premises are located. 12 5. Applications for a state license under this subchapter 13 must be made to the division on forms prepared and furnished 14 by the division and must set forth such information as the 15 division may require to enable the division to determine 16 whether a state license should be granted. 17 6. The division shall deny a state license if the premises 18 on which the applicant proposes to conduct its business does 19 not meet the requirements of this subchapter. The division 20 may refuse or deny a license renewal, reinstatement, or 21 initial license issuance for good cause. For purposes of this 22 subsection, “good cause” means any of the following: 23 a. The licensee or applicant has violated, does not meet, 24 or has failed to comply with any of the terms, conditions, or 25 provisions of this subchapter, any rules promulgated pursuant 26 to this subchapter, or any supplemental local law, rules, or 27 regulations. 28 b. The licensee or applicant has failed to comply with any 29 special terms or conditions of the license pursuant to an order 30 of the division or local licensing authority. 31 c. The licensed premises have been operated in a manner that 32 adversely affects the public health or safety of the immediate 33 neighborhood in which the retail marijuana establishment is 34 located. 35 -14- LSB 1720YH (2) 89 ss/rh 14/ 48

H.F. 816 7. If the division denies a state license pursuant to 1 subsection 6, the applicant shall be entitled to a hearing 2 pursuant to section 17A.12 and judicial review pursuant to 3 section 17A.19. The division shall provide written notice of 4 the grounds for denial of the state license to the applicant 5 and to the local jurisdiction at least fifteen days prior to 6 the hearing. 7 Sec. 27. NEW SECTION . 124F.11 Establishment and owner 8 requirements. 9 1. An owner who is a natural person must have been either 10 of the following: 11 a. A resident of Iowa for at least one year prior to the 12 date of the application. 13 b. A United States citizen prior to the date of the 14 application. 15 2. A retail marijuana establishment may be composed of an 16 unlimited number of owners that have been residents of Iowa for 17 at least one year prior to the date of the application. 18 3. The division shall review the retail marijuana 19 establishment’s operating documents to ensure compliance with 20 this section. 21 Sec. 28. NEW SECTION . 124F.12 Retail marijuana 22 establishment licensure. 23 1. Local jurisdictions may adopt and enforce regulations 24 for retail marijuana establishments that are at least as 25 restrictive as the provisions of this subchapter and any rule 26 promulgated pursuant to this subchapter. 27 2. A retail marijuana establishment shall not operate 28 until the retail marijuana establishment is licensed by the 29 division pursuant to this subchapter and approved by the 30 relevant local jurisdiction. If an application is denied by 31 the local licensing authority, the division shall revoke the 32 state license. In connection with a license, the applicant 33 shall provide a complete and accurate application as required 34 by the division. 35 -15- LSB 1720YH (2) 89 ss/rh 15/ 48

H.F. 816 3. A retail marijuana establishment shall notify the 1 division in writing of the name, address, and date of birth of 2 a new owner, officer, or manager before the new owner, officer, 3 or manager begins managing, owning, working, or otherwise 4 associating with the establishment. The owner, officer, 5 manager, or employee shall pass a fingerprint-based criminal 6 history record check as required by the division and shall 7 obtain the required identification prior to managing, owning, 8 working, or otherwise associating with the establishment. 9 4. Before granting a state license, the division may 10 consider, except when this subchapter specifically provides 11 otherwise, the requirements of this subchapter and any 12 rules promulgated pursuant to this subchapter, and all other 13 reasonable restrictions that are or may be placed upon a 14 licensee by the division or local licensing authority. 15 5. a. Each license issued under this subchapter is separate 16 and distinct. It is unlawful for a person to exercise any 17 of the privileges granted under a license other than the 18 license that the person holds or for a licensee to allow any 19 other person to exercise the privileges granted under the 20 licensee’s license. A separate license shall be required for 21 each specific business or business entity and each geographical 22 location. 23 b. At all times, a licensee shall possess and maintain 24 possession of the premises for which the license is issued 25 through ownership, lease, rental, or other arrangement for 26 possession of the premises. 27 6. Each licensee shall manage the licensed premises 28 personally or employ a separate and distinct manager on 29 the premises and shall report the name of the manager to 30 the division and local licensing authority. The licensee 31 shall report any change in manager to the division and local 32 licensing authority within seven days after the change. 33 Sec. 29. NEW SECTION . 124F.13 License renewal. 34 1. Ninety days prior to the expiration date of an existing 35 -16- LSB 1720YH (2) 89 ss/rh 16/ 48

H.F. 816 license, the division shall notify a licensee of the expiration 1 date by first class mail at the licensee’s address of record 2 with the division. A licensee may apply for the renewal of 3 an existing license to the division not less than thirty days 4 prior to the date of expiration of the existing license. Upon 5 receipt of an application for renewal of an existing license 6 and any applicable fees, the division shall submit, within 7 seven days of the application, a copy of the application to 8 the local jurisdiction to determine whether the application 9 complies with all local restrictions on renewal of licenses. 10 The division shall not accept an application for renewal of a 11 license after the date of expiration, except as provided in 12 subsection 3. The division may extend the expiration date of 13 the license and accept a late application for renewal of a 14 license if the applicant has filed a timely renewal application 15 with the local licensing authority. The division or the local 16 licensing authority, in its discretion, and subject to the 17 requirements of this subsection and subsection 3 and based upon 18 reasonable grounds, may waive the thirty-day time requirements 19 set forth in this subsection. 20 2. The division may request additional fingerprints from a 21 licensee when there is a demonstrated investigative need. 22 3. a. Notwithstanding the provisions of subsection 1, 23 a licensee whose license has been expired for not more than 24 ninety days may file a late renewal application upon the 25 payment of a nonrefundable late application fee of five hundred 26 dollars to the division. A licensee who files a late renewal 27 application and pays the requisite fees may continue to operate 28 until the division takes final action to approve or deny 29 the licensee’s late renewal application unless the division 30 summarily suspends the license pursuant to chapter 17A, this 31 subchapter, and rules promulgated pursuant to this subchapter. 32 b. The division may administratively continue a license 33 and accept a later application for renewal of a license at the 34 discretion of the division. 35 -17- LSB 1720YH (2) 89 ss/rh 17/ 48

H.F. 816 Sec. 30. NEW SECTION . 124F.14 Classes of licenses. 1 For the purpose of regulating the cultivation, manufacture, 2 distribution, sale, and testing of retail marijuana and retail 3 marijuana products, the division in its discretion, upon 4 receipt of an application in the prescribed form, may issue and 5 grant to the applicant a license or registration in any of the 6 following classes, subject to the provisions and restrictions 7 provided by this subchapter: 8 1. Retail marijuana store license. 9 2. Retail marijuana cultivation facility license. 10 3. Retail marijuana products manufacturing license. 11 4. Occupational licenses and registrations for owners, 12 managers, operators, employees, contractors, and other support 13 staff employed by, working in, or having access to restricted 14 areas of the licensed premises, as determined by the division. 15 The division may take any action with respect to a registration 16 pursuant to this subchapter as it may with respect to a license 17 pursuant to this subchapter, in accordance with the procedures 18 established pursuant to this subchapter. 19 5. Retail marijuana transporter license. 20 Sec. 31. NEW SECTION . 124F.15 Retail marijuana store 21 license. 22 1. a. A retail marijuana store license shall be issued 23 by the division only to a person selling retail marijuana or 24 retail marijuana products pursuant to the terms and conditions 25 of this subchapter. 26 b. A retail marijuana store shall not accept any retail 27 marijuana purchased from a retail marijuana cultivation 28 facility unless the retail marijuana store is provided with 29 evidence that any applicable excise tax due was paid. 30 2. Notwithstanding the provisions of this section, a 31 retail marijuana store licensee may also sell retail marijuana 32 products that are prepackaged and labeled as required by rules 33 of the division pursuant to section 124F.25. 34 3. a. A retail marijuana store shall not sell more than one 35 -18- LSB 1720YH (2) 89 ss/rh 18/ 48

H.F. 816 ounce of retail marijuana or its equivalent in retail marijuana 1 products, including retail marijuana concentrate, except for 2 nonedible, nonpsychoactive retail marijuana products, including 3 ointments, lotions, balms, and other nontransdermal topical 4 products during a single transaction to a person. 5 b. (1) Prior to initiating a sale, an employee of the 6 retail marijuana store making the sale shall verify that 7 the purchaser has a valid identification card showing the 8 purchaser is twenty-one years of age or older. If a person 9 under twenty-one years of age presents fraudulent proof of age, 10 any action relying on the fraudulent proof of age shall not be 11 grounds for the revocation or suspension of any license issued 12 under this subchapter. 13 (2) (a) If a retail marijuana store licensee or 14 employee has reasonable cause to believe that a person is 15 under twenty-one years of age and is exhibiting fraudulent 16 proof of age in an attempt to obtain any retail marijuana 17 or cannabidiol-infused product, the licensee or employee 18 is authorized to confiscate such fraudulent proof of age, 19 if possible, and shall, within seventy-two hours after the 20 confiscation, remit such fraudulent proof of age to a state 21 or local law enforcement agency. The failure to confiscate 22 such fraudulent proof of age or to remit such fraudulent proof 23 of age to a state or local law enforcement agency within 24 seventy-two hours after the confiscation shall not constitute a 25 criminal offense. 26 (b) If a retail marijuana store licensee or employee 27 believes that a person is under twenty-one years of age and 28 presents fraudulent proof of age in an attempt to obtain any 29 retail marijuana or retail cannabidiol-infused product, the 30 licensee or employee or any peace officer or police officer, 31 acting in good faith and upon probable cause based upon 32 reasonable grounds therefor, may detain and question such 33 person in a reasonable manner for the purpose of ascertaining 34 whether the person is guilty of any unlawful act regarding the 35 -19- LSB 1720YH (2) 89 ss/rh 19/ 48

H.F. 816 purchase of retail marijuana. The questioning of a person by a 1 licensee, employee, peace officer, or police officer does not 2 render the licensee, employee, peace officer, or police officer 3 civilly or criminally liable for slander, false arrest, false 4 imprisonment, malicious prosecution, or unlawful detention. 5 4. All retail marijuana and retail marijuana products 6 sold at a licensed retail marijuana store shall be packaged 7 and labeled as required by rules of the division pursuant to 8 section 124F.25. 9 5. a. A licensed retail marijuana store shall only 10 sell retail marijuana, retail marijuana products, marijuana 11 accessories, nonconsumable products such as apparel, and 12 marijuana-related products such as childproof packaging 13 containers, but shall be prohibited from selling or giving 14 away any consumable product, including but not limited to 15 cigarettes, alcohol, or an edible product that does not contain 16 marijuana, including but not limited to sodas, candies, or 17 baked goods. 18 b. A licensed retail marijuana store shall not sell any 19 retail marijuana or retail marijuana products that contain 20 nicotine or alcohol, if the sale of the alcohol would require a 21 license pursuant to chapter 123. 22 c. A licensed retail marijuana store shall not sell retail 23 marijuana or retail marijuana products over the internet nor 24 deliver retail marijuana or retail marijuana products to a 25 person who is not physically present in the retail marijuana 26 store’s licensed premises. 27 6. Retail marijuana or retail marijuana products shall not 28 be consumed on the premises of a retail marijuana store. 29 7. Notwithstanding any other provision of state law, sales 30 of retail marijuana and retail marijuana products are not 31 exempt from state or local sales tax. 32 Sec. 32. NEW SECTION . 124F.16 Retail marijuana cultivation 33 facility license. 34 1. A retail marijuana cultivation facility license shall 35 -20- LSB 1720YH (2) 89 ss/rh 20/ 48

H.F. 816 be issued by the division only to a person who cultivates 1 retail marijuana for sale and distribution to licensed retail 2 marijuana stores, retail marijuana products manufacturing 3 licensees, or other retail marijuana cultivation facilities. 4 2. A retail marijuana cultivation facility shall remit any 5 applicable excise tax due. 6 3. A retail marijuana cultivation facility shall track 7 the marijuana it cultivates from seed or immature plant to 8 wholesale purchase of the retail marijuana. Prior to delivery 9 of any retail marijuana that is sold, the retail marijuana 10 cultivation facility shall provide evidence that the facility 11 paid any applicable excise tax on the retail marijuana due. 12 4. A retail marijuana cultivation facility may provide, 13 except as required by section 124F.25, a sample of its products 14 to the state hygienic laboratory for testing and research 15 purposes. A retail marijuana cultivation facility shall 16 maintain a record of the sample provided to the state hygienic 17 laboratory and the testing results. 18 5. Retail marijuana or retail marijuana products shall not 19 be consumed on the premises of a retail marijuana cultivation 20 facility. 21 6. The division shall not issue more than twenty retail 22 marijuana cultivation facility licenses. 23 Sec. 33. NEW SECTION . 124F.17 Retail marijuana products 24 manufacturing license. 25 1. a. A retail marijuana products manufacturing license 26 shall be issued by the division to a person who manufactures 27 retail marijuana products pursuant to the terms and conditions 28 of this subchapter. 29 b. A retail marijuana products manufacturer may cultivate 30 its own retail marijuana if the manufacturer obtains a retail 31 marijuana cultivation facility license, or it may purchase 32 retail marijuana from a licensed retail marijuana cultivation 33 facility. A retail marijuana products manufacturer shall track 34 all of its retail marijuana from the point the retail marijuana 35 -21- LSB 1720YH (2) 89 ss/rh 21/ 48

H.F. 816 is either transferred from its retail marijuana cultivation 1 facility or from the point when the retail marijuana is 2 delivered to the retail marijuana products manufacturer from a 3 licensed retail marijuana cultivation facility to the point of 4 transfer to a licensed retail marijuana store. 5 c. A retail marijuana products manufacturer shall not 6 accept any retail marijuana purchased from a retail marijuana 7 cultivation facility unless the retail marijuana products 8 manufacturer is provided with evidence that any applicable 9 excise tax due was paid. 10 2. All retail marijuana products shall be prepared on 11 a licensed premises used exclusively for the manufacture 12 and preparation of retail marijuana or retail marijuana 13 products and using equipment that is used exclusively for the 14 manufacture and preparation of retail marijuana products; 15 except that, if permitted by the local jurisdiction, a 16 retail marijuana products manufacturing licensee may share 17 the same premises as a medical cannabidiol-infused products 18 manufacturing licensee so long as a virtual or physical 19 separation of inventory is maintained pursuant to rules 20 promulgated by the division. 21 3. All licensed premises on which retail marijuana products 22 are manufactured shall meet the sanitary standards for retail 23 marijuana product preparation promulgated pursuant to section 24 124F.25. 25 4. Retail marijuana or retail marijuana products shall not 26 be consumed on the premises of a retail marijuana products 27 manufacturing facility. 28 5. A retail marijuana products manufacturer may provide, 29 except as required by section 124F.25, a sample of its products 30 to the state hygienic laboratory for testing and research 31 purposes. A retail marijuana products manufacturer shall 32 maintain a record of what was provided to the state hygienic 33 laboratory and the results of the testing. 34 6. A licensed retail marijuana products manufacturer shall 35 -22- LSB 1720YH (2) 89 ss/rh 22/ 48

H.F. 816 package and label each product manufactured as required by 1 rules of the division pursuant to section 124F.25. 2 7. All retail marijuana products that require refrigeration 3 to prevent spoilage must be stored and transported in a 4 refrigerated environment. 5 8. The division shall not issue more than twenty retail 6 marijuana products manufacturer licenses. 7 Sec. 34. NEW SECTION . 124F.18 Retail marijuana transporter 8 license. 9 1. a. A retail marijuana transporter license shall be 10 issued by the division to a person to provide logistics, 11 distribution, and storage of retail marijuana and retail 12 marijuana products. Notwithstanding any other provisions of 13 law, a retail marijuana transporter license shall be valid for 14 two years from the date of issuance, but cannot be transferred 15 with a change of ownership. A licensed retail marijuana 16 transporter shall be responsible for the retail marijuana and 17 retail marijuana products once the transporter takes control 18 of the product. 19 b. A licensed retail marijuana transporter may contract with 20 multiple licensed retail marijuana establishments. 21 c. On or after July 1, 2022, all retail marijuana 22 transporters shall hold a valid retail marijuana transporter 23 license; except that an entity licensed pursuant to this 24 subchapter that provides its own distribution is not required 25 to hold a retail marijuana transporter license to transport and 26 distribute its products. The division shall begin accepting 27 applications after January 1, 2022. 28 2. A retail marijuana transporter licensee shall use a 29 seed-to-sale tracking system developed pursuant to section 30 124F.25 to create shipping manifests documenting the transport 31 of retail marijuana and retail marijuana products throughout 32 the state. 33 Sec. 35. NEW SECTION . 124F.19 Retail marijuana use —— 34 protections. 35 -23- LSB 1720YH (2) 89 ss/rh 23/ 48

H.F. 816 1. No person shall be subject to arrest, prosecution, or 1 penalty in any manner, or be denied any right or privilege, 2 including but not limited to disciplinary action by a business, 3 occupational, or professional licensing board, solely for 4 conduct permitted under this subchapter. 5 2. a. Except as provided in this section, neither the state 6 nor any of its political subdivisions shall impose any penalty 7 or deny any benefit or entitlement for conduct permitted 8 under this subchapter or for the presence of cannabinoids or 9 cannabinoid metabolites in the urine, blood, saliva, breath, 10 hair, or other tissue or fluid of a person who is twenty-one 11 years of age or older. 12 b. Except as provided in this section, neither the state 13 nor any of its political subdivisions shall deny a driver’s 14 license, a professional license, housing assistance, social 15 services, or other benefits based on marijuana use or for the 16 presence of cannabinoids or cannabinoid metabolites in the 17 urine, blood, saliva, breath, hair, or other tissue or fluid of 18 a person who is twenty-one years of age or older. 19 3. No person shall be denied custody of or visitation with a 20 minor for acting in accordance with this subchapter, unless the 21 person’s behavior creates an unreasonable danger to the minor 22 that can be clearly articulated and substantiated. 23 4. Except as provided in this section, neither the state 24 nor any of its political subdivisions shall deny employment 25 or a contract to a person for engaging in conduct permitted 26 under this subchapter, for a prior conviction for a nonviolent 27 marijuana offense that does not involve distribution to minors, 28 or for testing positive for the presence of cannabinoids or 29 cannabinoid metabolites in the urine, blood, saliva, breath, 30 hair, or other tissue or fluid of the individual’s body. 31 5. For the purposes of medical care, including organ and 32 tissue transplants, the use of marijuana does not constitute 33 the use of an illicit substance or otherwise disqualify a 34 person from needed medical care and may only be considered with 35 -24- LSB 1720YH (2) 89 ss/rh 24/ 48

H.F. 816 respect to evidence-based clinical criteria. 1 6. Notwithstanding any other provision of law to the 2 contrary, unless there is a specific finding that the 3 individual’s use, cultivation, or possession of marijuana could 4 create a danger to the individual or another person, it shall 5 not be a violation of conditions of parole, probation, or 6 pretrial release to do any of the following: 7 a. Engage in conduct allowed by this subchapter. 8 b. Test positive for marijuana, delta-9 9 tetrahydrocannabinol, or any other cannabinoid or metabolite 10 of marijuana. 11 7. a. This section does not prevent a governmental employer 12 from disciplining an employee or contractor for ingesting 13 marijuana in the workplace or for working while impaired by 14 marijuana. 15 b. The protections provided by this section do not apply to 16 the extent that they conflict with a governmental employer’s 17 obligations under federal law or regulations or to the extent 18 that they would disqualify the entity from a monetary or 19 licensing-related benefit under federal law or regulations. 20 c. This section does not authorize any person to engage in, 21 and does not prevent the imposition of any civil, criminal, 22 discipline, or other penalties, including discipline or 23 termination by a governmental employer, any task while under 24 the influence of marijuana, when doing so would constitute 25 negligence or professional malpractice. 26 Sec. 36. NEW SECTION . 124F.20 Discipline. 27 In addition to any other sanctions prescribed by this 28 subchapter or rules promulgated pursuant to this subchapter, 29 the division has the power, on its own motion or upon 30 complaint, after investigation and opportunity for a public 31 hearing at which a licensee must be afforded an opportunity 32 to be heard, to fine a licensee or to suspend or revoke 33 a license issued by the division for a violation by the 34 licensee or by any of the agents or employees of the licensee 35 -25- LSB 1720YH (2) 89 ss/rh 25/ 48

H.F. 816 of the provisions of this subchapter, or any of the rules 1 promulgated pursuant to this subchapter, or of any of the 2 terms, conditions, or provisions of the license issued by the 3 division. The division has the power to administer oaths and 4 issue subpoenas to require the presence of persons and the 5 production of papers, books, and records necessary to the 6 determination of a hearing that the division is authorized to 7 conduct. The division shall conduct a contested case pursuant 8 to chapter 17A prior to imposing discipline, except in the case 9 of an emergency adjudication. 10 Sec. 37. NEW SECTION . 124F.21 Disposition of seized 11 materials. 12 1. This section shall apply in addition to any criminal, 13 civil, or administrative penalties and in addition to any 14 other penalties prescribed by this subchapter or any rules 15 promulgated pursuant to this subchapter. 16 2. A state or local agency shall not be required to 17 cultivate or care for any retail marijuana or retail marijuana 18 product belonging to or seized from a licensee. A state or 19 local agency shall not be authorized to sell marijuana or 20 retail marijuana. 21 3. If the division issues a final order imposing a 22 disciplinary action against a licensee pursuant to section 23 124F.20, then, in addition to any other remedies, the 24 division’s final order may specify that some or all of the 25 licensee’s marijuana or marijuana product is not retail 26 marijuana or a retail marijuana product and is an illegal 27 controlled substance. The final order may further specify that 28 the licensee shall lose any interest in any of the marijuana or 29 marijuana product even if the marijuana or marijuana product 30 previously qualified as retail marijuana or a retail marijuana 31 product. 32 4. On or before January 1, 2022, the division shall adopt 33 rules governing the implementation of this section. 34 Sec. 38. NEW SECTION . 124F.22 Inspection procedures. 35 -26- LSB 1720YH (2) 89 ss/rh 26/ 48

H.F. 816 1. A licensee shall keep a complete set of all records 1 necessary to show fully the business transactions of the 2 licensee, all of which shall be accessible at all times during 3 business hours for inspection and examination by the division 4 or its authorized representatives. The division may require 5 a licensee to furnish such information as necessary for the 6 proper administration of this subchapter and may require an 7 audit to be made of the books of account and records on such 8 occasions as necessary by an auditor selected by the division 9 who shall have access to all books and records of the licensee. 10 All associated expenses shall be paid by the licensee. 11 2. Any licensed premises, including any places of storage 12 where retail marijuana or retail marijuana products are stored, 13 cultivated, sold, dispensed, or tested shall be subject to 14 inspection by the state or local jurisdictions and their 15 investigators, during all business hours and during other times 16 when employees are present, for the purpose of inspection 17 or investigation. Access shall be required during business 18 hours for examination of any inventory or books and records 19 required to be kept by the licensees. If any part of the 20 licensed premises consists of a locked area, upon demand to 21 the licensee, such area shall be made available for inspection 22 without delay, and, upon request by authorized representatives 23 of the state or local jurisdiction, the licensee shall open the 24 area for inspection. 25 3. A licensee shall retain all books and records necessary 26 to show fully the business transactions of the licensee for 27 a period of the current tax year and the three immediately 28 preceding tax years. 29 Sec. 39. NEW SECTION . 124F.23 Marijuana excise tax. 30 1. An excise tax is imposed on consumers at the rate of 31 twenty percent of the sales price of each sale of retail 32 marijuana and retail marijuana products. 33 2. The tax imposed by this section shall be paid by the 34 consumer to the retail marijuana establishment. Each retail 35 -27- LSB 1720YH (2) 89 ss/rh 27/ 48

H.F. 816 marijuana establishment shall collect from the consumer the 1 full amount of the tax payable on each taxable sale. 2 3. On the fifteenth day of each month, each retail marijuana 3 establishment that sells retail marijuana to a consumer shall 4 pay the excise taxes due on the retail marijuana that the 5 retail marijuana establishment sold in the previous calendar 6 month to the division. 7 4. The retail marijuana excise tax shall be separately 8 itemized from a local marijuana excise tax on the receipt 9 provided to the purchaser. 10 Sec. 40. NEW SECTION . 124F.24 Occupational licensing —— 11 protections. 12 1. A person holding a professional or occupational license 13 shall not be subject to professional discipline for providing 14 advice or services related to retail marijuana establishments 15 or applications to operate retail marijuana establishments on 16 the basis that marijuana is illegal under federal law. 17 2. An applicant for a professional or occupational license 18 shall not be denied a license based on previous employment 19 related to retail marijuana establishments operating in 20 accordance with state law. 21 Sec. 41. NEW SECTION . 124F.25 Rulemaking. 22 1. The division shall, within one hundred eighty days of the 23 effective date of this Act, adopt rules for the implementation 24 of this subchapter. The rules shall not prohibit the operation 25 of retail marijuana establishments or require such a high 26 investment of risk, money, time, or other resource or asset 27 that the operation of a retail marijuana establishment is not 28 worthy of being carried out in practice by a reasonably prudent 29 businessperson. Such rules shall include all of the following: 30 a. Procedures for the issuance, renewal, suspension, and 31 revocation of a registration to operate a retail marijuana 32 establishment, subject to chapter 17A. 33 b. A schedule of reasonable application, registration, 34 and renewal fees, provided application fees shall not exceed 35 -28- LSB 1720YH (2) 89 ss/rh 28/ 48

H.F. 816 five thousand dollars, with this upper limit adjusted annually 1 for inflation, unless the division determines a greater fee 2 is necessary to carry out its responsibilities under this 3 subchapter. Fees shall be collected by the division and used 4 to administer this subchapter. 5 c. Qualifications for registration that are directly and 6 demonstrably related to the operation of a retail marijuana 7 establishment and that may not disqualify applicants solely for 8 marijuana offenses prior to the effective date of this Act. 9 d. Security requirements. 10 e. Requirements for the transportation and storage of retail 11 marijuana and retail marijuana products by retail marijuana 12 establishments. 13 f. Requirements for the delivery of retail marijuana and 14 retail marijuana products to consumers, including a prohibition 15 on business names, logos, and other identifying language or 16 images on delivery vehicles and a prohibition on delivering 17 retail marijuana and retail marijuana products to any address 18 located on land owned by the federal government or any address 19 on land or in a building leased by the federal government. 20 g. Employment and training requirements, including 21 requiring that each retail marijuana establishment create 22 an identification badge for each employee or agent. These 23 requirements shall not disqualify applicants solely for 24 marijuana offenses prior to the effective date of this Act. 25 h. Requirements designed to prevent the sale or diversion of 26 retail marijuana and retail marijuana products to persons under 27 the age of twenty-one. 28 i. Requirements for retail marijuana and retail 29 marijuana products sold or distributed by a retail marijuana 30 establishment, including prohibiting any misleading labeling 31 and requiring retail marijuana product labels to include all 32 of the following: 33 (1) The length of time it typically takes for the product 34 to take effect. 35 -29- LSB 1720YH (2) 89 ss/rh 29/ 48

H.F. 816 (2) A disclosure of ingredients and possible allergens. 1 (3) A nutritional fact panel. 2 (4) Requiring opaque, child resistant packaging, which must 3 be designed or constructed to be significantly difficult for 4 children under five years of age to open and not difficult for 5 adults to use properly as defined by 16 C.F.R. §1700.20. 6 (5) Requiring that edible retail marijuana products be 7 clearly identifiable, when practicable, with a standard symbol 8 indicating the retail marijuana product contains marijuana. 9 j. Health and safety regulations and standards for the 10 manufacture of retail marijuana products and both the indoor 11 and outdoor cultivation of retail marijuana by retail marijuana 12 establishments. 13 k. Restrictions on advertising, marketing, and signage 14 including but not limited to a prohibition on mass-market 15 campaigns that have a high likelihood of reaching minors. 16 l. Rules to create at least six tiers of retail marijuana 17 cultivation facilities, based on the size of the facility or 18 the number of plants cultivated, and whether the cultivation 19 occurs outdoors, indoors, or in a greenhouse. Security 20 regulations and licensing fees must vary based on the size of 21 the cultivation facility. 22 m. Restrictions or prohibitions on additives in retail 23 marijuana and retail marijuana-infused products, including but 24 not limited to those that are toxic or designed to make the 25 product more addictive. 26 n. Prohibitions on products that are designed to make the 27 product more appealing to children, including prohibiting the 28 use of any images designed or likely to appeal to minors, 29 including cartoons, toys, animals, or children, and any other 30 images, characters, or phrases that are popularly used to 31 advertise to children. 32 o. Restrictions on the use of pesticides that are injurious 33 to human health. 34 p. Rules governing visits to retail marijuana cultivation 35 -30- LSB 1720YH (2) 89 ss/rh 30/ 48

H.F. 816 facilities and retail marijuana product manufacturing 1 facilities, including requiring the retail marijuana 2 establishment to log visitors. 3 q. A definition of the amount of delta-9 4 tetrahydrocannabinol that constitutes a single serving 5 in a retail marijuana product. 6 r. Standards for the safe manufacture of marijuana extracts 7 and concentrates. 8 s. Requirements that educational materials be disseminated 9 to consumers who purchase retail marijuana-infused products. 10 t. Requirements for random sample testing to ensure quality 11 control, including by ensuring that retail marijuana and 12 retail marijuana-infused products are accurately labeled for 13 potency. Unless the division determines that remediation or 14 treatment is sufficient to ensure product safety, the testing 15 analysis must include testing for residual solvents, poisons, 16 or toxins; harmful chemicals; dangerous molds or mildew; filth; 17 and harmful microbials such as E. coli or salmonella and 18 pesticides. 19 u. Standards for the operation of marijuana testing 20 facilities, including requirements for equipment and 21 qualifications for personnel. 22 v. Civil penalties for the failure to comply with rules 23 adopted pursuant to this subchapter. Civil penalties shall 24 be collected by the division and used to administer this 25 subchapter. 26 w. Procedures for collecting taxes levied on retail 27 marijuana establishments. 28 x. Requirements for on-site consumption establishments, 29 including for security, ventilation, odor control, and 30 consumption by patrons. These rules may include a prohibition 31 on smoking indoors. 32 2. After consultation with researchers knowledgeable 33 about the risks and benefits of marijuana and providing an 34 opportunity for public comment, the division shall develop a 35 -31- LSB 1720YH (2) 89 ss/rh 31/ 48

H.F. 816 scientifically accurate safety information label or handout 1 or both, which shall be available to each adult-use marijuana 2 consumer. The label or handout shall include all of the 3 following: 4 a. Advice about the potential risks of marijuana, including 5 all of the following: 6 (1) The risks of driving under the influence of marijuana, 7 and the fact that doing so is illegal. 8 (2) Any adverse effects unique to younger adults, including 9 related to the developing mind. 10 (3) Potential adverse events and other risks. 11 (4) The risks of using marijuana during pregnancy and 12 breastfeeding. 13 b. The need to safeguard all retail marijuana and retail 14 marijuana products from children and pets. 15 3. The division shall review and update the safety 16 information materials at least once every two years to 17 ensure they remain accurate. The review period shall include 18 soliciting input from researchers knowledgeable about the 19 risks and benefits of marijuana and an opportunity for public 20 comment. 21 4. In order to ensure that individual privacy is protected, 22 the division shall not require a consumer to provide a 23 retail marijuana store with personal information other than 24 government-issued identification to determine the consumer’s 25 age, and a retail marijuana store shall not be required to 26 acquire and record personal information about consumers. 27 Sec. 42. NEW SECTION . 124F.26 Driving under the influence 28 of marijuana —— prohibited. 29 Nothing in this subchapter allows driving under the 30 influence of marijuana or while impaired by marijuana. 31 Sec. 43. NEW SECTION . 124F.27 Marijuana use by minors —— 32 prohibited. 33 Nothing in this subchapter allows the transfer of marijuana, 34 with or without remuneration, to a person under the age of 35 -32- LSB 1720YH (2) 89 ss/rh 32/ 48

H.F. 816 twenty-one years, or the use of marijuana by a person under the 1 age of twenty-one years. 2 Sec. 44. NEW SECTION . 124F.28 Private property and tenant 3 rights. 4 1. Except as provided in this section, the provisions of 5 this subchapter do not require any person, corporation, or any 6 other entity that occupies, owns, or controls a property to 7 allow the consumption, cultivation, display, sale, or transfer 8 of marijuana on or in that property. 9 2. a. Except as provided in this section, a landlord 10 or property manager shall not refuse to rent to a tenant 11 or otherwise discriminate against a tenant based on a past 12 conviction for a marijuana offense that would have been legal 13 under this chapter. 14 b. Except as provided in this section, in the case of 15 the rental of a residential dwelling, a landlord or property 16 manager shall not prohibit the possession of retail marijuana 17 or the consumption of retail marijuana by nonsmoking means. 18 c. The limitations in this subsection do not apply in any 19 of the following circumstances: 20 (1) The tenant is a roomer who is not leasing the entire 21 residential dwelling. 22 (2) The residence is incidental to detention or the 23 provision of medical, geriatric, educational, counseling, 24 religious, or similar services. 25 (3) The residence is a transitional housing or sober living 26 facility. 27 (4) Failing to prohibit marijuana possession or consumption 28 would violate federal law or regulations or cause a landlord 29 or property manager to lose a monetary or licensing-related 30 benefit under federal law or regulations. 31 d. After a warning, a landlord or property manager may 32 take action against a tenant if the tenant’s use of marijuana 33 creates an odor that interferes with a person’s peaceful 34 enjoyment of the person’s home or property. 35 -33- LSB 1720YH (2) 89 ss/rh 33/ 48

H.F. 816 Sec. 45. NEW SECTION . 124F.29 Contracts enforceable. 1 It is the public policy of this state that contracts related 2 to the operation of a retail marijuana establishment registered 3 pursuant to this subchapter should be enforceable. It is 4 the public policy of this state that no contract entered 5 into by a retail marijuana establishment or its employees 6 or agents as permitted pursuant to a valid registration, or 7 by those who allow property to be used by an establishment, 8 its employees, or its agents as permitted pursuant to a 9 valid registration, shall be unenforceable on the basis 10 that cultivating, obtaining, manufacturing, distributing, 11 dispensing, transporting, selling, possessing, or using 12 marijuana or hemp is prohibited by federal law. 13 Sec. 46. NEW SECTION . 124F.30 Law enforcement —— 14 limitations. 15 1. No law enforcement officer employed by an agency that 16 receives state or local government funds shall expend any state 17 or local resources, including the officer’s time, to effect any 18 arrest or seizure of marijuana, or conduct any investigation, 19 on the sole basis of activity the officer believes to 20 constitute a violation of federal law, if the officer has 21 reason to believe that such activity is in compliance with 22 this chapter, nor shall any such officer expend any state or 23 local resources, including the officer’s time, to provide any 24 information or logistical support related to such activity to 25 any federal law enforcement authority or prosecuting entity. 26 2. No agency or political subdivision of this state shall 27 rely on a violation of federal law related to marijuana as the 28 sole basis for taking an adverse action against a person. 29 Sec. 47. NEW SECTION . 124F.31 Apportionment of revenue. 30 Revenues generated in excess of the amount needed to 31 implement and enforce this subchapter by the marijuana excise 32 tax shall be deposited in the marijuana tax cash fund created 33 pursuant to section 124F.32. 34 Sec. 48. NEW SECTION . 124F.32 Marijuana tax cash fund. 35 -34- LSB 1720YH (2) 89 ss/rh 34/ 48

H.F. 816 1. A marijuana tax cash fund is created under the control 1 of the division. Moneys in the fund may be appropriated by the 2 general assembly as provided in subsection 2. 3 2. Moneys in the marijuana tax cash fund shall be 4 appropriated exclusively for the following purposes: 5 a. Training, funding, and oversight of law enforcement 6 officers. 7 b. Substance use disorder services. 8 c. Programs for the benefit of Iowa youth, including grants 9 to public schools. 10 d. Emergency prevention, public education, and public health 11 services. 12 3. Notwithstanding section 12C.7, subsection 2, interest 13 or earnings on moneys deposited in the marijuana tax cash 14 fund shall be credited to the marijuana tax cash fund. 15 Notwithstanding section 8.33, moneys credited to the marijuana 16 tax cash fund shall not revert at the close of a fiscal year. 17 Sec. 49. NEW SECTION . 423H.1 Definitions. 18 For the purposes of this chapter, unless the context 19 otherwise requires, “retail marijuana” , “retail marijuana 20 establishment” , and “retail marijuana product” mean the same as 21 defined in section 124F.7. 22 Sec. 50. NEW SECTION . 423H.2 Local marijuana excise tax. 23 1. A municipality may by ordinance adopt an excise tax at a 24 rate of no more than three percent of the sales price of each 25 sale of retail marijuana and retail marijuana products to a 26 consumer under the jurisdiction of the municipality pursuant 27 to chapter 124F, subchapter II. 28 2. A municipality shall provide notice of the imposition 29 of an excise tax under this section and the amount of the tax 30 to the department of revenue at least ninety days prior to 31 the first day of the tax quarter when the excise tax will be 32 collected. 33 3. A local marijuana excise tax imposed pursuant to this 34 section shall be paid by the consumer to the retail marijuana 35 -35- LSB 1720YH (2) 89 ss/rh 35/ 48

H.F. 816 establishment. Each retail marijuana establishment shall 1 collect from the consumer the full amount of the tax payable on 2 each taxable sale. 3 4. On the fifteenth day of each month, each retail marijuana 4 establishment that sells retail marijuana to a consumer 5 shall pay the local marijuana excise taxes due on the retail 6 marijuana that the retail marijuana establishment sold in the 7 previous calendar month to the municipality. 8 5. The local marijuana excise tax imposed by this section 9 is separate from and in addition to the marijuana excise tax 10 imposed pursuant to section 124F.23. The local marijuana 11 excise tax imposed pursuant to this section shall not be part 12 of the sales price to which the marijuana excise tax applies. 13 6. The local marijuana excise tax shall be separately 14 itemized from the marijuana excise tax imposed pursuant to 15 section 124F.23 on the receipt provided to the purchaser. 16 Sec. 51. NEW SECTION . 453B.17 Retail marijuana. 17 This chapter shall not apply to retail marijuana or retail 18 marijuana products produced or sold pursuant to chapter 124F. 19 Sec. 52. SUBCHAPTER DESIGNATIONS. 20 1. The Code editor is directed to create two new subchapters 21 in chapter 124F as follows: 22 a. Subchapter I shall be entitled “criminal penalties” and 23 include sections 124F.1 through 124F.5. 24 b. Subchapter II shall be entitled “retail marijuana” and 25 include sections 124F.6 through 124F.32. 26 2. The Code editor may modify subchapter titles if necessary 27 and is directed to correct internal references in the Code as 28 necessary due to enactment of this section. 29 Sec. 53. EFFECTIVE DATE. This Act takes effect January 30 1, 2022, except that the alcoholic beverages division of the 31 department of commerce may adopt rules for the implementation 32 of this Act prior to that date. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -36- LSB 1720YH (2) 89 ss/rh 36/ 48

H.F. 816 the explanation’s substance by the members of the general assembly. 1 DIVISION I —— CRIMINAL PENALTIES. This bill modifies 2 criminal penalties relating to marijuana by eliminating and 3 modifying certain criminal provisions in Code chapter 124 4 (uniform controlled substances Act), and transferring certain 5 criminal provisions from Code chapter 124 to new Code chapter 6 124F. 7 MANUFACTURE, DELIVERY, OR POSSESSION WITH INTENT TO DELIVER 8 MARIJUANA. The bill provides that an unauthorized person 9 commits a class “C” felony punishable by confinement for 10 no more than 10 years and a fine of at least $1,370 but not 11 more than $13,660 if the person violates new Code section 12 124F.2(1)(a) and the controlled substance involves more than 13 22 kilograms of marijuana. Currently, such a person commits 14 a class “B” felony punishable by confinement of no more than 15 50 years if the controlled substance involves more than 1,000 16 kilograms of a mixture or substance containing a detectable 17 amount of marijuana, or a class “B” felony punishable by 18 confinement of no more than 25 years if the controlled 19 substance involves more than 100 kilograms of marijuana but not 20 more than 1,000 kilograms. 21 The bill provides that an unauthorized person commits a 22 class “D” felony if the person violates new Code section 23 124F.2(1)(b) and the controlled substance involves more than 24 2 kilograms of marijuana but not more than 22 kilograms. A 25 class “D” felony is punishable by confinement for no more than 26 five years and a fine of at least $1,025 but not more than 27 $10,245. Currently, such a person commits a class “C” felony 28 if the controlled substance involves more than 50 kilograms of 29 marijuana but not more than 100 kilograms. 30 The bill provides that an unauthorized person commits an 31 aggravated misdemeanor if the person violates new Code section 32 124F.2(1)(c) and the controlled substance involves more than 33 12 ounces of marijuana but not more than 2 kilograms. An 34 aggravated misdemeanor is punishable by confinement for no more 35 -37- LSB 1720YH (2) 89 ss/rh 37/ 48

H.F. 816 than two years and a fine of at least $855 but not more than 1 $8,540. Currently, such a person commits a class “D” felony 2 if the controlled substance involves 50 kilograms or less of 3 marijuana. 4 The bill provides that an unauthorized person commits a 5 serious misdemeanor if the person violates new Code section 6 124F.2(1)(d) and the controlled substance involves more than 7 4 ounces of marijuana but not more than 12 ounces. A serious 8 misdemeanor is punishable by confinement for no more than one 9 year and a fine of at least $430 but not more than $2,560. 10 Currently, such a person commits a class “D” felony. 11 The bill provides that an unauthorized person commits a 12 simple misdemeanor if the person violates new Code section 13 124F.2(1)(e) and the controlled substance involves 4 ounces or 14 less of marijuana except as otherwise provided in the bill. A 15 simple misdemeanor is punishable by confinement for no more 16 than 30 days and a fine of at least $105 but not more than $855. 17 Currently, such a person commits a class “D” felony. 18 POSSESSION OF MARIJUANA. The bill provides that if a person 19 unlawfully possesses more than 6 ounces of marijuana but not 20 more than 12 ounces, the person commits a serious misdemeanor. 21 The bill provides that if a person unlawfully possesses more 22 than one-half ounce of marijuana but not more than 6 ounces, 23 the person commits a simple misdemeanor. 24 The bill provides that if a person 21 years of age or older 25 possesses one-half ounce or less of marijuana, the person 26 does not commit a criminal offense but shall be assessed a 27 civil penalty in the amount of $100. If the person is under 28 21 years of age, the offense shall be punishable as a serious 29 misdemeanor, which may be expunged after two years if the 30 person does not commit additional criminal violations other 31 than traffic offenses. The bill provides that any records 32 relating to the civil penalty shall not be displayed for public 33 viewing on the Iowa court information system and such records 34 shall not be kept in the criminal history files maintained by 35 -38- LSB 1720YH (2) 89 ss/rh 38/ 48

H.F. 816 the department of public safety. 1 The bill allows a municipality to adopt an ordinance to allow 2 for the legal possession of marijuana. 3 RETAIL MARIJUANA —— POSSESSION LIMITS. The bill establishes 4 possession limits for retail marijuana, defined in the 5 bill. The bill prohibits a resident of Iowa 21 years of 6 age or older from possessing more than 30 grams of marijuana 7 flower, 5 grams of marijuana concentrate, or 500 milligrams 8 of tetrahydrocannabinol contained in a product infused with 9 marijuana. Persons 21 years of age or older who are not 10 residents of Iowa may possess retail marijuana of no more 11 than 15 grams of marijuana flower, 2.5 grams of marijuana 12 concentrate, or 250 milligrams of tetrahydrocannabinol 13 contained in a product infused with marijuana. A person in 14 possession of retail marijuana in excess of amounts equivalent 15 to the amounts specified in the bill for the possession of 16 marijuana is subject to prosecution for a simple or serious 17 misdemeanor or a civil penalty. A retail marijuana store that 18 sells retail marijuana in excess of such amounts is subject to 19 a fine or other discipline imposed by the division. 20 Currently, if a person unlawfully possesses marijuana, the 21 person shall be punished by imprisonment in the county jail for 22 not more than six months or by a fine of not more than $1,000, 23 or by both for a first offense. If the person has previously 24 been convicted of marijuana possession, the person commits a 25 serious misdemeanor under current law, and if the person has 26 been convicted of marijuana possession two or more times, the 27 person commits an aggravated misdemeanor. 28 DELIVERY OR POSSESSION OF MARIJUANA —— SMALL AMOUNTS. If 29 the amount of marijuana delivered or possessed with intent to 30 deliver is one ounce or less and no remuneration was provided, 31 the defendant shall not be prosecuted for a violation of the 32 bill. 33 MARIJUANA USE IN PUBLIC. The bill prohibits the consumption 34 of marijuana in areas open and accessible to the public, 35 -39- LSB 1720YH (2) 89 ss/rh 39/ 48

H.F. 816 including but not limited to public transportation facilities, 1 sporting or music venues, parks, playgrounds, sidewalks and 2 roads, outdoor cafes, or indoor but public locations. A person 3 who violates this provision commits a simple misdemeanor 4 punishable as a scheduled violation in the amount of $50 for 5 a first offense and $100 for a second or subsequent offense. 6 This violation may be expunged after two years if the person 7 does not commit additional criminal violations other than 8 traffic offenses. 9 JUVENILE MARIJUANA OFFENSES. The bill specifies that the 10 juvenile court shall have exclusive original jurisdiction in a 11 proceeding concerning a minor who is alleged to have committed 12 a violation of the bill. 13 GATHERINGS WHERE CONTROLLED SUBSTANCES UNLAWFULLY USED. 14 The bill strikes a provision making it a serious misdemeanor 15 for a person to sponsor, promote, or aid in the sponsoring 16 or promoting of a meeting or gathering with the knowledge or 17 intent that marijuana be distributed, used, or possessed at the 18 meeting or gathering in violation of Code chapter 124. 19 ACCOMMODATION OFFENSE. The bill strikes a provision 20 allowing a prosecution for unlawful delivery or possession with 21 intent to deliver marijuana, if the prosecution proves that 22 the defendant delivered or possessed with intent to deliver 23 one-half ounce or less of marijuana which was not offered for 24 sale, the defendant is guilty of an accommodation offense 25 and rather than being sentenced for a class “D” felony under 26 Code section 124.401(1)(d), the person is sentenced for a 27 misdemeanor in violation of Code section 124.401(5). The bill 28 makes conforming changes to Code sections 124.401G (Iowa hemp 29 Act) and 124.413 (mandatory minimum sentences —— controlled 30 substances). 31 SECOND OR SUBSEQUENT OFFENSES. Currently, a person 32 convicted of a second or subsequent offense under Code chapter 33 124 may be punished by imprisonment for a period not to exceed 34 three times the term otherwise authorized, or fined not more 35 -40- LSB 1720YH (2) 89 ss/rh 40/ 48

H.F. 816 than three times the amount otherwise authorized. The bill 1 strikes the provision that allows for the use of a previous 2 marijuana conviction in determining if a person has been 3 convicted of a second or subsequent offense under Code chapter 4 124. 5 MARIJUANA IN MOTOR VEHICLES. The bill prohibits a driver 6 of a motor vehicle upon a public street or highway from using 7 marijuana in the passenger area of the motor vehicle. The bill 8 also prohibits a driver or passenger of or in a motor vehicle 9 upon a public street or highway from possessing marijuana in 10 the passenger area of a motor vehicle except in a sealed, odor 11 proof, child resistant container. The bill defines “passenger 12 area” as the area designed to seat the driver and passengers 13 while the motor vehicle is in operation and any area that is 14 readily accessible to the driver or a passenger while in their 15 seating positions, including the glove compartment. A person 16 who knowingly violates this provision of the bill is guilty of 17 a simple misdemeanor. A simple misdemeanor is punishable by 18 confinement for no more than 30 days and a fine of at least $105 19 but not more than $855. 20 EXPUNGEMENT. The bill provides that upon application by a 21 defendant convicted of a felony offense under Code chapter 124 22 (controlled substances) related to the possession or transfer 23 of marijuana prior to January 1, 2022, the court shall enter an 24 order expunging the record of such a criminal case. A person 25 may only seek an expungement once, but an application may 26 request the expungement of multiple offenses if the offenses 27 arose from the same transaction or occurrence. Under current 28 law, misdemeanor marijuana offenses may be expunged pursuant to 29 Code section 901C.3 (misdemeanor expungement). 30 DIVISION II —— RETAIL MARIJUANA. Division II of the 31 bill relates to the regulation of retail marijuana in Iowa. 32 The bill grants the alcoholic beverages division of the 33 department of commerce (division) the authority to regulate the 34 cultivation, production, transportation, testing, and sale of 35 -41- LSB 1720YH (2) 89 ss/rh 41/ 48

H.F. 816 retail marijuana and retail marijuana products, including by 1 issuing appropriate licenses and promulgating rules. 2 The bill requires the division to transfer half of any 3 application fee collected to the local jurisdiction in which 4 the retail marijuana establishment will be located. The 5 bill allows local jurisdictions to impose limitations on the 6 operation of retail marijuana establishments, including by 7 prohibiting their operation. 8 The bill directs the division to develop and maintain a 9 seed-to-sale tracking system to track retail marijuana from the 10 seed or immature plant stage until it is sold to a consumer at a 11 retail marijuana establishment. 12 LOCAL LICENSES. The bill requires the division to transmit 13 any application for a retail marijuana establishment it 14 receives to the local jurisdiction where the establishment 15 will be located within seven days of receipt unless the 16 local jurisdiction has prohibited the operation of retail 17 marijuana establishments. The local jurisdiction must then 18 inform the division whether the application complies with 19 any local restrictions on the operation of retail marijuana 20 establishments it may have imposed. The bill requires a person 21 to receive approval from both the division and the local 22 jurisdiction before operating a retail marijuana establishment. 23 A person whose application for a license is denied is entitled 24 to a hearing and judicial review pursuant to Code chapter 17A. 25 LICENSES. Ninety days prior to the expiration date of an 26 existing license, the division shall notify the licensee of the 27 expiration date by first class mail at the licensee’s address 28 of record with the division. A licensee may apply for the 29 renewal of an existing license to the division not less than 30 30 days prior to the date of expiration. 31 RETAIL MARIJUANA STORES. The bill allows a retail marijuana 32 store to purchase retail marijuana from a retail marijuana 33 cultivation facility. A retail marijuana store may also 34 sell prepackaged and labeled retail marijuana products. A 35 -42- LSB 1720YH (2) 89 ss/rh 42/ 48

H.F. 816 retail marijuana store must track all of its retail marijuana 1 and retail marijuana products from the point that they are 2 transferred to the retail marijuana store to the point of 3 sale. The bill prohibits a retail marijuana store from selling 4 more than one ounce of retail marijuana or its equivalent 5 in a single transaction to a person, excluding nonedible, 6 nonpsychoactive retail marijuana products. 7 Prior to initiating a sale, the bill requires a retail 8 marijuana store employee to verify that that purchaser has a 9 valid identification card showing that the person is 21 years 10 of age or older. If a purchaser presents a retail marijuana 11 store employee with fraudulent proof of age, any action taken 12 in reliance on that proof of age shall not be grounds for the 13 revocation or suspension of a license. 14 The bill allows a retail marijuana store to provide to the 15 state hygienic laboratory a sample of its products for testing 16 and research purposes. The retail marijuana store shall 17 maintain a record of what was provided to the laboratory and 18 the results of the testing. 19 The bill prohibits a retail marijuana store from selling 20 any products other than retail marijuana, retail marijuana 21 products, marijuana accessories, nonconsumable products such as 22 apparel, and marijuana products such as childproof packaging 23 containers. 24 RETAIL MARIJUANA CULTIVATION. The bill allows the division 25 to issue up to 20 retail marijuana cultivation facility 26 licenses to persons who cultivate retail marijuana for sale 27 and distribution to retail marijuana stores, manufacturers, 28 or other cultivation facilities. The bill requires a retail 29 marijuana cultivation facility to remit any applicable tax due. 30 The bill also requires a retail marijuana cultivation facility 31 to track the marijuana it cultivates from seed or immature 32 plant to wholesale purchase. 33 RETAIL MARIJUANA PRODUCTS MANUFACTURING LICENSES. The bill 34 allows the division to issue up to 20 retail marijuana products 35 -43- LSB 1720YH (2) 89 ss/rh 43/ 48

H.F. 816 manufacturing licenses to persons who manufacture retail 1 marijuana products. The bill requires a retail marijuana 2 products manufacturer to track all of its retail marijuana from 3 the point it is either transferred from its retail marijuana 4 cultivation facility or the point when it is delivered to the 5 retail marijuana products manufacturer from a retail marijuana 6 cultivation facility to the point of transfer to a retail 7 marijuana store. 8 The bill requires retail marijuana products to be 9 manufactured and prepared in a facility that only manufactures 10 retail marijuana products, except that premises may be shared 11 with a medical cannabidiol-infused products manufacturer so 12 long as a virtual or physical separation of inventory is 13 maintained. 14 RETAIL MARIJUANA TRANSPORTATION. The bill allows the 15 division to issue a retail marijuana transporter license to 16 a person to provide logistics, distribution, and storage of 17 retail marijuana and retail marijuana products. The bill 18 requires a retail marijuana transporter to use the seed-to-sale 19 tracking system to create shipping manifests documenting the 20 transport of retail marijuana and retail marijuana products. 21 RETAIL MARIJUANA USE —— PROTECTIONS. The bill prohibits 22 the state and its political subdivisions from taking certain 23 actions against a person on the basis that the person has 24 engaged in conduct allowed by the bill. The state and its 25 political subdivisions shall not prosecute a person, deny a 26 person a professional license, deny a person a benefit or 27 entitlement, deny a person custody or visitation of a child, 28 deny a person employment or a contract, or deny a person 29 medical care on the basis that the person has engaged in 30 conduct allowed by the bill. The bill also prohibits the 31 state or a political subdivision from denying employment 32 or a contract to a person on the basis of a person’s prior 33 conviction of a nonviolent marijuana offense that does not 34 involve distribution to a minor. The bill excludes engaging 35 -44- LSB 1720YH (2) 89 ss/rh 44/ 48

H.F. 816 in conduct allowed by the bill from being classified as a 1 violation of a condition of parole, probation, or pretrial 2 release unless there is a specific finding that the conduct 3 could create a danger to the individual or another person. 4 The bill does not prohibit a governmental employer from 5 disciplining an employee or contractor for ingesting marijuana 6 at work or working while impaired by marijuana, nor does it 7 prohibit a licensing board from imposing a penalty on a person 8 for engaging in conduct that would constitute negligence or 9 professional malpractice. The protections of the bill do not 10 apply to the extent that they conflict with a governmental 11 employer’s obligations under federal law or would disqualify 12 a governmental employer from a monetary or licensing-related 13 benefit under federal law. 14 FEES. The bill allows the division to collect and charge 15 fees. The bill sets the application fee for a person applying 16 for a new retail marijuana establishment license at $5,000, 17 which shall be divided evenly between the division and the 18 local jurisdiction where the license is proposed to be issued. 19 The bill permits a local jurisdiction to impose operating fees 20 on retail marijuana establishments to which it has granted a 21 license. 22 LICENSE DISCIPLINE. The bill permits the division, on its 23 own motion or complaint, and after investigation, notice, 24 a public hearing, and opportunity to be heard, to suspend 25 or revoke a license if the licensee or any of its agents or 26 employees violate a provision of the bill or a rule promulgated 27 by the division. The division may administer oaths and issue 28 subpoenas to require the presence of persons and the production 29 of documents. The division may impose discipline pursuant to 30 rules and Code chapter 17A. 31 INSPECTION. The bill requires a licensee to keep a complete 32 set of all records necessary to show fully the business 33 transactions of the licensee, all of which shall be open at all 34 times during business hours for the inspection and examination 35 -45- LSB 1720YH (2) 89 ss/rh 45/ 48

H.F. 816 by the division or its duly authorized representatives. 1 The bill requires the licensed premises of a retail 2 marijuana establishment, including any places of storage 3 where retail marijuana or retail marijuana products are 4 stored, cultivated, sold, dispensed, or tested to be subject 5 to inspection by the state or local jurisdictions and their 6 investigators, during all business hours and other times 7 of apparent activity, for the purpose of inspection or 8 investigation. 9 STATE EXCISE TAX. The bill imposes an excise tax on 10 consumers at the rate of 20 percent of the sale price on 11 each sale of retail marijuana. The tax shall be paid by the 12 consumer to the retail marijuana establishment at the time 13 of sale, and each retail marijuana establishment shall remit 14 the tax collected to the division on the 15th day of each 15 month. Revenues generated by the excise tax shall be used to 16 administer the retail marijuana program. Excess funds shall be 17 deposited in the marijuana tax cash fund, created in the bill. 18 Moneys in the marijuana tax cash fund may be appropriated by 19 the general assembly for purposes enumerated in the bill. 20 OCCUPATIONAL LICENSING PROTECTIONS. The bill prohibits a 21 professional or occupational licensing board from imposing 22 discipline on a licensee for providing services related to 23 retail marijuana establishments. The bill also prohibits a 24 professional or occupational licensing board from denying a 25 license to a person based on a person’s past employment with a 26 retail marijuana establishment. 27 RULEMAKING. The bill requires the alcoholic beverages 28 division to adopt rules within 180 days of the effective date 29 of the bill to adopt rules for the implementation of the bill. 30 The rules shall not prohibit the operation of retail marijuana 31 establishments or make the operation of retail marijuana 32 establishments so costly as to be impractical. Required rules 33 include but are not limited to rules relating to applications, 34 fees, licensure, security requirements, labeling requirements, 35 -46- LSB 1720YH (2) 89 ss/rh 46/ 48

H.F. 816 health and safety requirements, restrictions on advertising, 1 cultivation, testing, and penalties. The division shall also 2 develop and regularly update safety materials to be distributed 3 upon the sale of retail marijuana. 4 ACTS PROHIBITED. The bill does not allow driving while under 5 the influence of or impaired by marijuana and does not allow 6 the transfer of marijuana to a person under 21 years of age or 7 the possession of marijuana by a person under 21 years of age. 8 PROPERTY RIGHTS. The bill does not require the owner of 9 a property to allow the consumption, cultivation, display, 10 sale, or transfer of marijuana at that property. However, in 11 the case of a residential dwelling, a landlord or property 12 manager shall not prohibit the possession of retail marijuana 13 or the consumption of retail marijuana by means other than 14 smoking except under certain circumstances. The bill allows 15 a landlord to take action against a tenant after a warning if 16 the tenant’s use of marijuana creates an odor that interferes 17 with the peaceful enjoyment of property by other tenants. The 18 bill prohibits a landlord from discriminating against a tenant 19 or applicant on the basis of a past conviction of a marijuana 20 offense that would have been legal under the bill. 21 CONTRACTS. The bill states that it is the public policy 22 of the state that contracts relating to retail marijuana 23 shall not be unenforceable on the basis that the production, 24 distribution, and possession of marijuana is prohibited by 25 federal law. 26 LAW ENFORCEMENT. The bill prohibits law enforcement 27 agencies from expending resources on the investigation of or 28 arrest for activity related to marijuana that is in violation 29 of federal law if the officer performing the investigation 30 or arrest has reason to believe that the activity complies 31 with the requirements of the bill. The bill also prohibits 32 an agency or political subdivision of the state from taking 33 an adverse action against a person on the sole basis that the 34 person has violated a federal law related to marijuana. 35 -47- LSB 1720YH (2) 89 ss/rh 47/ 48

H.F. 816 LOCAL EXCISE TAX. The bill allows a municipality to adopt 1 by ordinance an excise tax of no more than 3 percent on retail 2 marijuana sold in the municipality. The bill requires a 3 municipality to inform the department of revenue at least 90 4 days prior to the first day of the tax quarter when the excise 5 tax will be collected. The tax shall be paid by the consumer 6 to the retail marijuana establishment at the time of sale, 7 and each retail marijuana establishment shall remit the tax 8 collected to the municipality on the 15th day of each month. 9 The bill takes effect January 1, 2022, except that the 10 alcoholic beverages division may adopt rules prior to that date 11 for the implementation of the bill. 12 -48- LSB 1720YH (2) 89 ss/rh 48/ 48