S.F. 406 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 1491XS (10) 89 ss/rh 1/ 46

S.F. 406 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 1491XS (10) 89 ss/rh 2/ 46

S.F. 406 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 1491XS (10) 89 ss/rh 3/ 46

S.F. 406 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 1491XS (10) 89 ss/rh 4/ 46

S.F. 406 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 1491XS (10) 89 ss/rh 5/ 46

S.F. 406 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 1491XS (10) 89 ss/rh 6/ 46

S.F. 406 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. REPEAL. Section 124.410, Code 2021, is repealed. 33 DIVISION II 34 RETAIL MARIJUANA 35 -7- LSB 1491XS (10) 89 ss/rh 7/ 46

S.F. 406 Sec. 21. NEW SECTION . 124F.6 Purpose and findings. 1 The general assembly finds all of the following: 2 1. Marijuana prohibition, like alcohol prohibition before 3 it, has been a wasteful and destructive failure. About half 4 of Americans admit to having used marijuana despite more than 5 eight decades of prohibition. 6 2. The prohibition of marijuana has had an unfair, disparate 7 impact on persons and communities of color. 8 3. The prohibition of marijuana diverts law enforcement 9 resources from violent and property crimes and subjects 10 civilians to unnecessary police interactions. 11 4. Keeping marijuana illegal deprives the state of 12 thousands of legal jobs and hundreds of millions of dollars in 13 tax revenue. 14 5. The use of marijuana should be legal for persons 15 twenty-one years of age or older and subject to taxation and 16 regulation. 17 Sec. 22. NEW SECTION . 124F.7 Definitions. 18 For the purposes of this subchapter: 19 1. “Division” means the alcoholic beverages division of the 20 department of commerce. 21 2. “Immature plant” means a nonflowering marijuana plant 22 that is no taller than eight inches and no wider than eight 23 inches, is produced from a cutting, clipping, or seedling, and 24 is in a cultivating container. 25 3. “License” means a license or registration issued pursuant 26 to this subchapter. 27 4. “Licensed premises” means the premises specified in an 28 application for a license under this subchapter, which are 29 owned or in possession of the licensee and within which the 30 licensee is authorized to cultivate, manufacture, distribute, 31 sell, or test retail marijuana and retail marijuana products in 32 accordance with this subchapter. 33 5. “Licensee” means a person licensed or registered pursuant 34 to this subchapter. 35 -8- LSB 1491XS (10) 89 ss/rh 8/ 46

S.F. 406 6. “Local jurisdiction” means a city or county. 1 7. “Local licensing authority” means, for any local 2 jurisdiction that has chosen to adopt a local licensing 3 requirement in addition to the state licensing requirements 4 of this subchapter, an authority designated by a municipal 5 or county ordinance, or resolution, or the governing body of 6 a municipality or county, or the board of commissioners of a 7 county if no such authority is designated. 8 8. “Location” means a particular parcel of land that may be 9 identified by an address or other descriptive means. 10 9. “Marijuana” means the same as defined in section 124.101. 11 10. “Marijuana accessories” means any equipment, products, 12 or materials of any kind which are used, intended for use, or 13 designed for use in planting, cultivating, growing, harvesting, 14 composting, manufacturing, compounding, converting, producing, 15 processing, preparing, testing, analyzing, packaging, 16 repackaging, storing, vaporizing, or containing marijuana, or 17 for ingesting, inhaling, or otherwise introducing marijuana 18 into the human body. 19 11. “Person” means a natural person, partnership, 20 association, company, corporation, limited liability company, 21 or organization; except that “person” does not include any 22 governmental organization. 23 12. “Retail marijuana” means all parts of the plant of the 24 genus Cannabis, whether growing or not, the seeds thereof; the 25 resin extracted from any part of the plant; and every compound, 26 manufacture, salt, derivative, mixture, or preparation of the 27 plant, its seeds or resin, including marijuana concentrate. 28 “Retail marijuana” does not include industrial hemp, nor does 29 it include fiber produced from the stalks, oil or cake made 30 from the seeds of the plant, sterilized seeds of the plant 31 which are incapable of germination, or the weight of any other 32 ingredient combined with marijuana to prepare topical or oral 33 administrations, food, drink, or other product. 34 13. “Retail marijuana cultivation facility” means an entity 35 -9- LSB 1491XS (10) 89 ss/rh 9/ 46

S.F. 406 licensed to cultivate, prepare, package, and sell marijuana to 1 retail marijuana stores, to marijuana product manufacturing 2 facilities, and to other marijuana cultivation facilities, but 3 not to consumers. 4 14. “Retail marijuana establishment” means a retail 5 marijuana store, a retail marijuana cultivation facility, or a 6 retail marijuana products manufacturer. 7 15. “Retail marijuana products” means concentrated marijuana 8 products and marijuana products that are comprised of marijuana 9 and other ingredients and are intended for use or consumption, 10 such as but not limited to edible products, ointments, and 11 tinctures. 12 16. “Retail marijuana products manufacturer” means an entity 13 licensed to purchase marijuana; manufacture, prepare, and 14 package marijuana products; and sell marijuana and marijuana 15 products to other marijuana product manufacturing facilities 16 and to retail marijuana stores, but not to consumers. 17 17. “Retail marijuana store” means an entity licensed 18 to purchase marijuana from marijuana cultivation facilities 19 and sell marijuana and to purchase marijuana products from 20 retail marijuana product manufacturing facilities and to sell 21 marijuana and marijuana products to consumers. 22 18. “Retail marijuana transporter” means an entity or person 23 licensed to transport retail marijuana and retail marijuana 24 products from one retail marijuana establishment to another 25 retail marijuana establishment and to temporarily store the 26 transported retail marijuana and retail marijuana products at 27 its licensed premises, but is not authorized to sell retail 28 marijuana or retail marijuana products under any circumstances. 29 Sec. 23. NEW SECTION . 124F.8 Applicability. 30 1. On or after July 1, 2022, an applicant may apply for 31 licensure of a retail marijuana establishment pursuant to this 32 subchapter. 33 2. a. Pursuant to subsection 1, an applicant shall complete 34 forms as provided by the division and shall pay the application 35 -10- LSB 1491XS (10) 89 ss/rh 10/ 46

S.F. 406 fee and the licensing fee. The division shall forward, within 1 seven days of the date of the application, one-half of the 2 application fee to the local jurisdiction unless the local 3 jurisdiction has prohibited the operation of retail marijuana 4 establishments. If the license is denied, the division shall 5 refund the licensing fee to the applicant. 6 b. The division shall act upon an application made pursuant 7 to subsection 1 no sooner than forty-five days and no later 8 than ninety days after the date of the application. The 9 division shall process applications in the order in which 10 completed applications are received by the division. 11 3. Any local jurisdiction may enact ordinances or 12 regulations governing the time, place, manner, and number of 13 retail marijuana establishments, which may include a local 14 licensing requirement, or may prohibit the operation of retail 15 marijuana establishments by ordinance or by a referred or 16 initiated measure. If a county acts through an initiated 17 measure, the proponents shall submit a petition signed by not 18 less than fifteen percent of the registered electors in the 19 county. 20 Sec. 24. NEW SECTION . 124F.9 Retail marijuana licensure. 21 1. The division shall develop and maintain a seed-to-sale 22 tracking system that tracks retail marijuana from either 23 seed or immature plant stage until the marijuana or retail 24 marijuana product is sold to a customer at a retail marijuana 25 establishment to ensure that no marijuana grown or processed 26 by a retail marijuana establishment is sold or otherwise 27 transferred except by a retail marijuana store. 28 2. The division shall adopt all rules necessary for the 29 implementation of this chapter. 30 3. Nothing in this subchapter shall be construed to be 31 a delegation to the division of the power to fix prices for 32 retail marijuana. 33 4. Nothing in this subchapter shall be construed to limit 34 a law enforcement agency’s ability to investigate unlawful 35 -11- LSB 1491XS (10) 89 ss/rh 11/ 46

S.F. 406 activity in relation to a retail marijuana establishment. A 1 law enforcement agency shall have the authority to conduct a 2 criminal history record check of a licensee and an employee of 3 a licensee during an investigation of unlawful activity related 4 to retail marijuana and retail marijuana products. 5 5. The division shall create a statewide licensure class 6 system for retail marijuana cultivation facilities. The 7 classifications may be based upon square footage of the 8 facility; lights, lumens, or wattage; canopy lighting; the 9 number of cultivating plants; a combination of the foregoing; 10 or other reasonable metrics. The division shall create a fee 11 structure for the licensure class system. 12 Sec. 25. NEW SECTION . 124F.10 State and local participation 13 in licensure. 14 1. When the division receives an application for an 15 initial license or a renewal of an existing license for 16 any retail marijuana establishment, the division shall 17 provide, within seven days of receipt of an application, 18 a copy of the application to the local jurisdiction in 19 which the establishment is to be located unless the local 20 jurisdiction has prohibited the operation of retail marijuana 21 establishments. The local jurisdiction shall determine whether 22 the application complies with local restrictions relating 23 to time, place, manner, and the number of retail marijuana 24 establishments allowed. The local jurisdiction shall inform 25 the division whether the application complies with local 26 restrictions. 27 2. A local jurisdiction may impose a separate local 28 licensing requirement as a part of its restrictions relating 29 to time, place, manner, and the number of retail marijuana 30 establishments allowed. A local jurisdiction may decline 31 to impose any local licensing requirements, but a local 32 jurisdiction shall notify the division that it either approves 33 or denies each application received by the local jurisdiction. 34 3. If a local jurisdiction issues a local license for 35 -12- LSB 1491XS (10) 89 ss/rh 12/ 46

S.F. 406 a retail marijuana establishment, a local jurisdiction may 1 schedule a public hearing on the application. If the local 2 jurisdiction schedules a hearing, it shall post and publish 3 public notice of the hearing not less than ten days prior 4 to the hearing. The local jurisdiction shall give public 5 notice by posting a sign in a conspicuous place on the license 6 applicant’s premises for which a local license application 7 has been made and by publication in a newspaper of general 8 circulation in the county in which the applicant’s premises are 9 located. 10 4. If a local jurisdiction does not issue local licenses, 11 the local jurisdiction may give public notice of the state 12 license application by posting a sign in a conspicuous place 13 on the state license applicant’s premises for which a state 14 license application has been made and by publication in a 15 newspaper of general circulation in the county in which the 16 applicant’s premises are located. 17 5. Applications for a state license under this subchapter 18 must be made to the division on forms prepared and furnished 19 by the division and must set forth such information as the 20 division may require to enable the division to determine 21 whether a state license should be granted. 22 6. The division shall deny a state license if the premises 23 on which the applicant proposes to conduct its business does 24 not meet the requirements of this subchapter. The division 25 may refuse or deny a license renewal, reinstatement, or 26 initial license issuance for good cause. For purposes of this 27 subsection, “good cause” means any of the following: 28 a. The licensee or applicant has violated, does not meet, 29 or has failed to comply with any of the terms, conditions, or 30 provisions of this subchapter, any rules promulgated pursuant 31 to this subchapter, or any supplemental local law, rules, or 32 regulations. 33 b. The licensee or applicant has failed to comply with any 34 special terms or conditions of the license pursuant to an order 35 -13- LSB 1491XS (10) 89 ss/rh 13/ 46

S.F. 406 of the division or local licensing authority. 1 c. The licensed premises have been operated in a manner that 2 adversely affects the public health or safety of the immediate 3 neighborhood in which the retail marijuana establishment is 4 located. 5 7. If the division denies a state license pursuant to 6 subsection 6, the applicant shall be entitled to a hearing 7 pursuant to section 17A.12 and judicial review pursuant to 8 section 17A.19. The division shall provide written notice of 9 the grounds for denial of the state license to the applicant 10 and to the local jurisdiction at least fifteen days prior to 11 the hearing. 12 Sec. 26. NEW SECTION . 124F.11 Establishment and owner 13 requirements. 14 1. An owner who is a natural person must have been either 15 of the following: 16 a. A resident of Iowa for at least one year prior to the 17 date of the application. 18 b. A United States citizen prior to the date of the 19 application. 20 2. A retail marijuana establishment may be composed of an 21 unlimited number of owners that have been residents of Iowa for 22 at least one year prior to the date of the application. 23 3. The division shall review the retail marijuana 24 establishment’s operating documents to ensure compliance with 25 this section. 26 Sec. 27. NEW SECTION . 124F.12 Retail marijuana 27 establishment licensure. 28 1. Local jurisdictions may adopt and enforce regulations 29 for retail marijuana establishments that are at least as 30 restrictive as the provisions of this subchapter and any rule 31 promulgated pursuant to this subchapter. 32 2. A retail marijuana establishment shall not operate 33 until the retail marijuana establishment is licensed by the 34 division pursuant to this subchapter and approved by the 35 -14- LSB 1491XS (10) 89 ss/rh 14/ 46

S.F. 406 relevant local jurisdiction. If an application is denied by 1 the local licensing authority, the division shall revoke the 2 state license. In connection with a license, the applicant 3 shall provide a complete and accurate application as required 4 by the division. 5 3. A retail marijuana establishment shall notify the 6 division in writing of the name, address, and date of birth of 7 a new owner, officer, or manager before the new owner, officer, 8 or manager begins managing, owning, working, or otherwise 9 associating with the establishment. The owner, officer, 10 manager, or employee shall pass a fingerprint-based criminal 11 history record check as required by the division and shall 12 obtain the required identification prior to managing, owning, 13 working, or otherwise associating with the establishment. 14 4. Before granting a state license, the division may 15 consider, except when this subchapter specifically provides 16 otherwise, the requirements of this subchapter and any 17 rules promulgated pursuant to this subchapter, and all other 18 reasonable restrictions that are or may be placed upon a 19 licensee by the division or local licensing authority. 20 5. a. Each license issued under this subchapter is separate 21 and distinct. It is unlawful for a person to exercise any 22 of the privileges granted under a license other than the 23 license that the person holds or for a licensee to allow any 24 other person to exercise the privileges granted under the 25 licensee’s license. A separate license shall be required for 26 each specific business or business entity and each geographical 27 location. 28 b. At all times, a licensee shall possess and maintain 29 possession of the premises for which the license is issued 30 through ownership, lease, rental, or other arrangement for 31 possession of the premises. 32 6. Each licensee shall manage the licensed premises 33 personally or employ a separate and distinct manager on 34 the premises and shall report the name of the manager to 35 -15- LSB 1491XS (10) 89 ss/rh 15/ 46

S.F. 406 the division and local licensing authority. The licensee 1 shall report any change in manager to the division and local 2 licensing authority within seven days after the change. 3 Sec. 28. NEW SECTION . 124F.13 License renewal. 4 1. Ninety days prior to the expiration date of an existing 5 license, the division shall notify a licensee of the expiration 6 date by first class mail at the licensee’s address of record 7 with the division. A licensee may apply for the renewal of 8 an existing license to the division not less than thirty days 9 prior to the date of expiration of the existing license. Upon 10 receipt of an application for renewal of an existing license 11 and any applicable fees, the division shall submit, within 12 seven days of the application, a copy of the application to 13 the local jurisdiction to determine whether the application 14 complies with all local restrictions on renewal of licenses. 15 The division shall not accept an application for renewal of a 16 license after the date of expiration, except as provided in 17 subsection 3. The division may extend the expiration date of 18 the license and accept a late application for renewal of a 19 license if the applicant has filed a timely renewal application 20 with the local licensing authority. The division or the local 21 licensing authority, in its discretion, and subject to the 22 requirements of this subsection and subsection 3 and based upon 23 reasonable grounds, may waive the thirty-day time requirements 24 set forth in this subsection. 25 2. The division may request additional fingerprints from a 26 licensee when there is a demonstrated investigative need. 27 3. a. Notwithstanding the provisions of subsection 1, 28 a licensee whose license has been expired for not more than 29 ninety days may file a late renewal application upon the 30 payment of a nonrefundable late application fee of five hundred 31 dollars to the division. A licensee who files a late renewal 32 application and pays the requisite fees may continue to operate 33 until the division takes final action to approve or deny 34 the licensee’s late renewal application unless the division 35 -16- LSB 1491XS (10) 89 ss/rh 16/ 46

S.F. 406 summarily suspends the license pursuant to chapter 17A, this 1 subchapter, and rules promulgated pursuant to this subchapter. 2 b. The division may administratively continue a license 3 and accept a later application for renewal of a license at the 4 discretion of the division. 5 Sec. 29. NEW SECTION . 124F.14 Classes of licenses. 6 For the purpose of regulating the cultivation, manufacture, 7 distribution, sale, and testing of retail marijuana and retail 8 marijuana products, the division in its discretion, upon 9 receipt of an application in the prescribed form, may issue and 10 grant to the applicant a license or registration in any of the 11 following classes, subject to the provisions and restrictions 12 provided by this subchapter: 13 1. Retail marijuana store license. 14 2. Retail marijuana cultivation facility license. 15 3. Retail marijuana products manufacturing license. 16 4. Occupational licenses and registrations for owners, 17 managers, operators, employees, contractors, and other support 18 staff employed by, working in, or having access to restricted 19 areas of the licensed premises, as determined by the division. 20 The division may take any action with respect to a registration 21 pursuant to this subchapter as it may with respect to a license 22 pursuant to this subchapter, in accordance with the procedures 23 established pursuant to this subchapter. 24 5. Retail marijuana transporter license. 25 Sec. 30. NEW SECTION . 124F.15 Retail marijuana store 26 license. 27 1. a. A retail marijuana store license shall be issued 28 by the division only to a person selling retail marijuana or 29 retail marijuana products pursuant to the terms and conditions 30 of this subchapter. 31 b. A retail marijuana store shall not accept any retail 32 marijuana purchased from a retail marijuana cultivation 33 facility unless the retail marijuana store is provided with 34 evidence that any applicable excise tax due was paid. 35 -17- LSB 1491XS (10) 89 ss/rh 17/ 46

S.F. 406 2. Notwithstanding the provisions of this section, a 1 retail marijuana store licensee may also sell retail marijuana 2 products that are prepackaged and labeled as required by rules 3 of the division pursuant to section 124F.25. 4 3. a. A retail marijuana store shall not sell more than one 5 ounce of retail marijuana or its equivalent in retail marijuana 6 products, including retail marijuana concentrate, except for 7 nonedible, nonpsychoactive retail marijuana products, including 8 ointments, lotions, balms, and other nontransdermal topical 9 products during a single transaction to a person. 10 b. (1) Prior to initiating a sale, an employee of the 11 retail marijuana store making the sale shall verify that 12 the purchaser has a valid identification card showing the 13 purchaser is twenty-one years of age or older. If a person 14 under twenty-one years of age presents fraudulent proof of age, 15 any action relying on the fraudulent proof of age shall not be 16 grounds for the revocation or suspension of any license issued 17 under this subchapter. 18 (2) (a) If a retail marijuana store licensee or 19 employee has reasonable cause to believe that a person is 20 under twenty-one years of age and is exhibiting fraudulent 21 proof of age in an attempt to obtain any retail marijuana 22 or cannabidiol-infused product, the licensee or employee 23 is authorized to confiscate such fraudulent proof of age, 24 if possible, and shall, within seventy-two hours after the 25 confiscation, remit such fraudulent proof of age to a state 26 or local law enforcement agency. The failure to confiscate 27 such fraudulent proof of age or to remit such fraudulent proof 28 of age to a state or local law enforcement agency within 29 seventy-two hours after the confiscation shall not constitute a 30 criminal offense. 31 (b) If a retail marijuana store licensee or employee 32 believes that a person is under twenty-one years of age and 33 presents fraudulent proof of age in an attempt to obtain any 34 retail marijuana or retail cannabidiol-infused product, the 35 -18- LSB 1491XS (10) 89 ss/rh 18/ 46

S.F. 406 licensee or employee or any peace officer or police officer, 1 acting in good faith and upon probable cause based upon 2 reasonable grounds therefor, may detain and question such 3 person in a reasonable manner for the purpose of ascertaining 4 whether the person is guilty of any unlawful act regarding the 5 purchase of retail marijuana. The questioning of a person by a 6 licensee, employee, peace officer, or police officer does not 7 render the licensee, employee, peace officer, or police officer 8 civilly or criminally liable for slander, false arrest, false 9 imprisonment, malicious prosecution, or unlawful detention. 10 4. All retail marijuana and retail marijuana products 11 sold at a licensed retail marijuana store shall be packaged 12 and labeled as required by rules of the division pursuant to 13 section 124F.25. 14 5. a. A licensed retail marijuana store shall only 15 sell retail marijuana, retail marijuana products, marijuana 16 accessories, nonconsumable products such as apparel, and 17 marijuana-related products such as childproof packaging 18 containers, but shall be prohibited from selling or giving 19 away any consumable product, including but not limited to 20 cigarettes, alcohol, or an edible product that does not contain 21 marijuana, including but not limited to sodas, candies, or 22 baked goods. 23 b. A licensed retail marijuana store shall not sell any 24 retail marijuana or retail marijuana products that contain 25 nicotine or alcohol, if the sale of the alcohol would require a 26 license pursuant to chapter 123. 27 c. A licensed retail marijuana store shall not sell retail 28 marijuana or retail marijuana products over the internet nor 29 deliver retail marijuana or retail marijuana products to a 30 person who is not physically present in the retail marijuana 31 store’s licensed premises. 32 6. Retail marijuana or retail marijuana products shall not 33 be consumed on the premises of a retail marijuana store. 34 7. Notwithstanding any other provision of state law, sales 35 -19- LSB 1491XS (10) 89 ss/rh 19/ 46

S.F. 406 of retail marijuana and retail marijuana products are not 1 exempt from state or local sales tax. 2 Sec. 31. NEW SECTION . 124F.16 Retail marijuana cultivation 3 facility license. 4 1. A retail marijuana cultivation facility license shall 5 be issued by the division only to a person who cultivates 6 retail marijuana for sale and distribution to licensed retail 7 marijuana stores, retail marijuana products manufacturing 8 licensees, or other retail marijuana cultivation facilities. 9 2. A retail marijuana cultivation facility shall remit any 10 applicable excise tax due. 11 3. A retail marijuana cultivation facility shall track 12 the marijuana it cultivates from seed or immature plant to 13 wholesale purchase of the retail marijuana. Prior to delivery 14 of any retail marijuana that is sold, the retail marijuana 15 cultivation facility shall provide evidence that the facility 16 paid any applicable excise tax on the retail marijuana due. 17 4. A retail marijuana cultivation facility may provide, 18 except as required by section 124F.25, a sample of its products 19 to the state hygienic laboratory for testing and research 20 purposes. A retail marijuana cultivation facility shall 21 maintain a record of the sample provided to the state hygienic 22 laboratory and the testing results. 23 5. Retail marijuana or retail marijuana products shall not 24 be consumed on the premises of a retail marijuana cultivation 25 facility. 26 6. The division shall not issue more than twenty retail 27 marijuana cultivation facility licenses. 28 Sec. 32. NEW SECTION . 124F.17 Retail marijuana products 29 manufacturing license. 30 1. a. A retail marijuana products manufacturing license 31 shall be issued by the division to a person who manufactures 32 retail marijuana products pursuant to the terms and conditions 33 of this subchapter. 34 b. A retail marijuana products manufacturer may cultivate 35 -20- LSB 1491XS (10) 89 ss/rh 20/ 46

S.F. 406 its own retail marijuana if the manufacturer obtains a retail 1 marijuana cultivation facility license, or it may purchase 2 retail marijuana from a licensed retail marijuana cultivation 3 facility. A retail marijuana products manufacturer shall track 4 all of its retail marijuana from the point the retail marijuana 5 is either transferred from its retail marijuana cultivation 6 facility or from the point when the retail marijuana is 7 delivered to the retail marijuana products manufacturer from a 8 licensed retail marijuana cultivation facility to the point of 9 transfer to a licensed retail marijuana store. 10 c. A retail marijuana products manufacturer shall not 11 accept any retail marijuana purchased from a retail marijuana 12 cultivation facility unless the retail marijuana products 13 manufacturer is provided with evidence that any applicable 14 excise tax due was paid. 15 2. All retail marijuana products shall be prepared on 16 a licensed premises used exclusively for the manufacture 17 and preparation of retail marijuana or retail marijuana 18 products and using equipment that is used exclusively for the 19 manufacture and preparation of retail marijuana products; 20 except that, if permitted by the local jurisdiction, a 21 retail marijuana products manufacturing licensee may share 22 the same premises as a medical cannabidiol-infused products 23 manufacturing licensee so long as a virtual or physical 24 separation of inventory is maintained pursuant to rules 25 promulgated by the division. 26 3. All licensed premises on which retail marijuana products 27 are manufactured shall meet the sanitary standards for retail 28 marijuana product preparation promulgated pursuant to section 29 124F.25. 30 4. Retail marijuana or retail marijuana products shall not 31 be consumed on the premises of a retail marijuana products 32 manufacturing facility. 33 5. A retail marijuana products manufacturer may provide, 34 except as required by section 124F.25, a sample of its products 35 -21- LSB 1491XS (10) 89 ss/rh 21/ 46

S.F. 406 to the state hygienic laboratory for testing and research 1 purposes. A retail marijuana products manufacturer shall 2 maintain a record of what was provided to the state hygienic 3 laboratory and the results of the testing. 4 6. A licensed retail marijuana products manufacturer shall 5 package and label each product manufactured as required by 6 rules of the division pursuant to section 124F.25. 7 7. All retail marijuana products that require refrigeration 8 to prevent spoilage must be stored and transported in a 9 refrigerated environment. 10 8. The division shall not issue more than twenty retail 11 marijuana products manufacturer licenses. 12 Sec. 33. NEW SECTION . 124F.18 Retail marijuana transporter 13 license. 14 1. a. A retail marijuana transporter license shall be 15 issued by the division to a person to provide logistics, 16 distribution, and storage of retail marijuana and retail 17 marijuana products. Notwithstanding any other provisions of 18 law, a retail marijuana transporter license shall be valid for 19 two years from the date of issuance, but cannot be transferred 20 with a change of ownership. A licensed retail marijuana 21 transporter shall be responsible for the retail marijuana and 22 retail marijuana products once the transporter takes control 23 of the product. 24 b. A licensed retail marijuana transporter may contract with 25 multiple licensed retail marijuana establishments. 26 c. On or after July 1, 2022, all retail marijuana 27 transporters shall hold a valid retail marijuana transporter 28 license; except that an entity licensed pursuant to this 29 subchapter that provides its own distribution is not required 30 to hold a retail marijuana transporter license to transport and 31 distribute its products. The division shall begin accepting 32 applications after January 1, 2022. 33 2. A retail marijuana transporter licensee shall use a 34 seed-to-sale tracking system developed pursuant to section 35 -22- LSB 1491XS (10) 89 ss/rh 22/ 46

S.F. 406 124F.25 to create shipping manifests documenting the transport 1 of retail marijuana and retail marijuana products throughout 2 the state. 3 Sec. 34. NEW SECTION . 124F.19 Retail marijuana use —— 4 protections. 5 1. No person shall be subject to arrest, prosecution, or 6 penalty in any manner, or be denied any right or privilege, 7 including but not limited to disciplinary action by a business, 8 occupational, or professional licensing board, solely for 9 conduct permitted under this subchapter. 10 2. a. Except as provided in this section, neither the state 11 nor any of its political subdivisions shall impose any penalty 12 or deny any benefit or entitlement for conduct permitted 13 under this subchapter or for the presence of cannabinoids or 14 cannabinoid metabolites in the urine, blood, saliva, breath, 15 hair, or other tissue or fluid of a person who is twenty-one 16 years of age or older. 17 b. Except as provided in this section, neither the state 18 nor any of its political subdivisions shall deny a driver’s 19 license, a professional license, housing assistance, social 20 services, or other benefits based on marijuana use or for the 21 presence of cannabinoids or cannabinoid metabolites in the 22 urine, blood, saliva, breath, hair, or other tissue or fluid of 23 a person who is twenty-one years of age or older. 24 3. No person shall be denied custody of or visitation with a 25 minor for acting in accordance with this subchapter, unless the 26 person’s behavior creates an unreasonable danger to the minor 27 that can be clearly articulated and substantiated. 28 4. Except as provided in this section, neither the state 29 nor any of its political subdivisions shall deny employment 30 or a contract to a person for engaging in conduct permitted 31 under this subchapter, for a prior conviction for a nonviolent 32 marijuana offense that does not involve distribution to minors, 33 or for testing positive for the presence of cannabinoids or 34 cannabinoid metabolites in the urine, blood, saliva, breath, 35 -23- LSB 1491XS (10) 89 ss/rh 23/ 46

S.F. 406 hair, or other tissue or fluid of the individual’s body. 1 5. For the purposes of medical care, including organ and 2 tissue transplants, the use of marijuana does not constitute 3 the use of an illicit substance or otherwise disqualify a 4 person from needed medical care and may only be considered with 5 respect to evidence-based clinical criteria. 6 6. Notwithstanding any other provision of law to the 7 contrary, unless there is a specific finding that the 8 individual’s use, cultivation, or possession of marijuana could 9 create a danger to the individual or another person, it shall 10 not be a violation of conditions of parole, probation, or 11 pretrial release to do any of the following: 12 a. Engage in conduct allowed by this subchapter. 13 b. Test positive for marijuana, delta-9 14 tetrahydrocannabinol, or any other cannabinoid or metabolite 15 of marijuana. 16 7. a. This section does not prevent a governmental employer 17 from disciplining an employee or contractor for ingesting 18 marijuana in the workplace or for working while impaired by 19 marijuana. 20 b. The protections provided by this section do not apply to 21 the extent that they conflict with a governmental employer’s 22 obligations under federal law or regulations or to the extent 23 that they would disqualify the entity from a monetary or 24 licensing-related benefit under federal law or regulations. 25 c. This section does not authorize any person to engage in, 26 and does not prevent the imposition of any civil, criminal, 27 discipline, or other penalties, including discipline or 28 termination by a governmental employer, any task while under 29 the influence of marijuana, when doing so would constitute 30 negligence or professional malpractice. 31 Sec. 35. NEW SECTION . 124F.20 Discipline. 32 In addition to any other sanctions prescribed by this 33 subchapter or rules promulgated pursuant to this subchapter, 34 the division has the power, on its own motion or upon 35 -24- LSB 1491XS (10) 89 ss/rh 24/ 46

S.F. 406 complaint, after investigation and opportunity for a public 1 hearing at which a licensee must be afforded an opportunity 2 to be heard, to fine a licensee or to suspend or revoke 3 a license issued by the division for a violation by the 4 licensee or by any of the agents or employees of the licensee 5 of the provisions of this subchapter, or any of the rules 6 promulgated pursuant to this subchapter, or of any of the 7 terms, conditions, or provisions of the license issued by the 8 division. The division has the power to administer oaths and 9 issue subpoenas to require the presence of persons and the 10 production of papers, books, and records necessary to the 11 determination of a hearing that the division is authorized to 12 conduct. The division shall conduct a contested case pursuant 13 to chapter 17A prior to imposing discipline, except in the case 14 of an emergency adjudication. 15 Sec. 36. NEW SECTION . 124F.21 Disposition of seized 16 materials. 17 1. This section shall apply in addition to any criminal, 18 civil, or administrative penalties and in addition to any 19 other penalties prescribed by this subchapter or any rules 20 promulgated pursuant to this subchapter. 21 2. A state or local agency shall not be required to 22 cultivate or care for any retail marijuana or retail marijuana 23 product belonging to or seized from a licensee. A state or 24 local agency shall not be authorized to sell marijuana or 25 retail marijuana. 26 3. If the division issues a final order imposing a 27 disciplinary action against a licensee pursuant to section 28 124F.20, then, in addition to any other remedies, the 29 division’s final order may specify that some or all of the 30 licensee’s marijuana or marijuana product is not retail 31 marijuana or a retail marijuana product and is an illegal 32 controlled substance. The final order may further specify that 33 the licensee shall lose any interest in any of the marijuana or 34 marijuana product even if the marijuana or marijuana product 35 -25- LSB 1491XS (10) 89 ss/rh 25/ 46

S.F. 406 previously qualified as retail marijuana or a retail marijuana 1 product. 2 4. On or before January 1, 2022, the division shall adopt 3 rules governing the implementation of this section. 4 Sec. 37. NEW SECTION . 124F.22 Inspection procedures. 5 1. A licensee shall keep a complete set of all records 6 necessary to show fully the business transactions of the 7 licensee, all of which shall be accessible at all times during 8 business hours for inspection and examination by the division 9 or its authorized representatives. The division may require 10 a licensee to furnish such information as necessary for the 11 proper administration of this subchapter and may require an 12 audit to be made of the books of account and records on such 13 occasions as necessary by an auditor selected by the division 14 who shall have access to all books and records of the licensee. 15 All associated expenses shall be paid by the licensee. 16 2. Any licensed premises, including any places of storage 17 where retail marijuana or retail marijuana products are stored, 18 cultivated, sold, dispensed, or tested shall be subject to 19 inspection by the state or local jurisdictions and their 20 investigators, during all business hours and during other times 21 when employees are present, for the purpose of inspection 22 or investigation. Access shall be required during business 23 hours for examination of any inventory or books and records 24 required to be kept by the licensees. If any part of the 25 licensed premises consists of a locked area, upon demand to 26 the licensee, such area shall be made available for inspection 27 without delay, and, upon request by authorized representatives 28 of the state or local jurisdiction, the licensee shall open the 29 area for inspection. 30 3. A licensee shall retain all books and records necessary 31 to show fully the business transactions of the licensee for 32 a period of the current tax year and the three immediately 33 preceding tax years. 34 Sec. 38. NEW SECTION . 124F.23 Marijuana excise tax. 35 -26- LSB 1491XS (10) 89 ss/rh 26/ 46

S.F. 406 1. An excise tax is imposed on consumers at the rate of 1 twenty percent of the sales price of each sale of retail 2 marijuana and retail marijuana products. 3 2. The tax imposed by this section shall be paid by the 4 consumer to the retail marijuana establishment. Each retail 5 marijuana establishment shall collect from the consumer the 6 full amount of the tax payable on each taxable sale. 7 3. On the fifteenth day of each month, each retail marijuana 8 establishment that sells retail marijuana to a consumer shall 9 pay the excise taxes due on the retail marijuana that the 10 retail marijuana establishment sold in the previous calendar 11 month to the division. 12 4. The retail marijuana excise tax shall be separately 13 itemized from a local marijuana excise tax on the receipt 14 provided to the purchaser. 15 Sec. 39. NEW SECTION . 124F.24 Occupational licensing —— 16 protections. 17 1. A person holding a professional or occupational license 18 shall not be subject to professional discipline for providing 19 advice or services related to retail marijuana establishments 20 or applications to operate retail marijuana establishments on 21 the basis that marijuana is illegal under federal law. 22 2. An applicant for a professional or occupational license 23 shall not be denied a license based on previous employment 24 related to retail marijuana establishments operating in 25 accordance with state law. 26 Sec. 40. NEW SECTION . 124F.25 Rulemaking. 27 1. The division shall, within one hundred eighty days of the 28 effective date of this Act, adopt rules for the implementation 29 of this subchapter. The rules shall not prohibit the operation 30 of retail marijuana establishments or require such a high 31 investment of risk, money, time, or other resource or asset 32 that the operation of a retail marijuana establishment is not 33 worthy of being carried out in practice by a reasonably prudent 34 businessperson. Such rules shall include all of the following: 35 -27- LSB 1491XS (10) 89 ss/rh 27/ 46

S.F. 406 a. Procedures for the issuance, renewal, suspension, and 1 revocation of a registration to operate a retail marijuana 2 establishment, subject to chapter 17A. 3 b. A schedule of reasonable application, registration, 4 and renewal fees, provided application fees shall not exceed 5 five thousand dollars, with this upper limit adjusted annually 6 for inflation, unless the division determines a greater fee 7 is necessary to carry out its responsibilities under this 8 subchapter. Fees shall be collected by the division and used 9 to administer this subchapter. 10 c. Qualifications for registration that are directly and 11 demonstrably related to the operation of a retail marijuana 12 establishment and that may not disqualify applicants solely for 13 marijuana offenses prior to the effective date of this Act. 14 d. Security requirements. 15 e. Requirements for the transportation and storage of retail 16 marijuana and retail marijuana products by retail marijuana 17 establishments. 18 f. Requirements for the delivery of retail marijuana and 19 retail marijuana products to consumers, including a prohibition 20 on business names, logos, and other identifying language or 21 images on delivery vehicles and a prohibition on delivering 22 retail marijuana and retail marijuana products to any address 23 located on land owned by the federal government or any address 24 on land or in a building leased by the federal government. 25 g. Employment and training requirements, including 26 requiring that each retail marijuana establishment create 27 an identification badge for each employee or agent. These 28 requirements shall not disqualify applicants solely for 29 marijuana offenses prior to the effective date of this Act. 30 h. Requirements designed to prevent the sale or diversion of 31 retail marijuana and retail marijuana products to persons under 32 the age of twenty-one. 33 i. Requirements for retail marijuana and retail 34 marijuana products sold or distributed by a retail marijuana 35 -28- LSB 1491XS (10) 89 ss/rh 28/ 46

S.F. 406 establishment, including prohibiting any misleading labeling 1 and requiring retail marijuana product labels to include all 2 of the following: 3 (1) The length of time it typically takes for the product 4 to take effect. 5 (2) A disclosure of ingredients and possible allergens. 6 (3) A nutritional fact panel. 7 (4) Requiring opaque, child resistant packaging, which must 8 be designed or constructed to be significantly difficult for 9 children under five years of age to open and not difficult for 10 adults to use properly as defined by 16 C.F.R. §1700.20. 11 (5) Requiring that edible retail marijuana products be 12 clearly identifiable, when practicable, with a standard symbol 13 indicating the retail marijuana product contains marijuana. 14 j. Health and safety regulations and standards for the 15 manufacture of retail marijuana products and both the indoor 16 and outdoor cultivation of retail marijuana by retail marijuana 17 establishments. 18 k. Restrictions on advertising, marketing, and signage 19 including but not limited to a prohibition on mass-market 20 campaigns that have a high likelihood of reaching minors. 21 l. Rules to create at least six tiers of retail marijuana 22 cultivation facilities, based on the size of the facility or 23 the number of plants cultivated, and whether the cultivation 24 occurs outdoors, indoors, or in a greenhouse. Security 25 regulations and licensing fees must vary based on the size of 26 the cultivation facility. 27 m. Restrictions or prohibitions on additives in retail 28 marijuana and retail marijuana-infused products, including but 29 not limited to those that are toxic or designed to make the 30 product more addictive. 31 n. Prohibitions on products that are designed to make the 32 product more appealing to children, including prohibiting the 33 use of any images designed or likely to appeal to minors, 34 including cartoons, toys, animals, or children, and any other 35 -29- LSB 1491XS (10) 89 ss/rh 29/ 46

S.F. 406 images, characters, or phrases that are popularly used to 1 advertise to children. 2 o. Restrictions on the use of pesticides that are injurious 3 to human health. 4 p. Rules governing visits to retail marijuana cultivation 5 facilities and retail marijuana product manufacturing 6 facilities, including requiring the retail marijuana 7 establishment to log visitors. 8 q. A definition of the amount of delta-9 9 tetrahydrocannabinol that constitutes a single serving 10 in a retail marijuana product. 11 r. Standards for the safe manufacture of marijuana extracts 12 and concentrates. 13 s. Requirements that educational materials be disseminated 14 to consumers who purchase retail marijuana-infused products. 15 t. Requirements for random sample testing to ensure quality 16 control, including by ensuring that retail marijuana and 17 retail marijuana-infused products are accurately labeled for 18 potency. Unless the division determines that remediation or 19 treatment is sufficient to ensure product safety, the testing 20 analysis must include testing for residual solvents, poisons, 21 or toxins; harmful chemicals; dangerous molds or mildew; filth; 22 and harmful microbials such as E. coli or salmonella and 23 pesticides. 24 u. Standards for the operation of marijuana testing 25 facilities, including requirements for equipment and 26 qualifications for personnel. 27 v. Civil penalties for the failure to comply with rules 28 adopted pursuant to this subchapter. Civil penalties shall 29 be collected by the division and used to administer this 30 subchapter. 31 w. Procedures for collecting taxes levied on retail 32 marijuana establishments. 33 x. Requirements for on-site consumption establishments, 34 including for security, ventilation, odor control, and 35 -30- LSB 1491XS (10) 89 ss/rh 30/ 46

S.F. 406 consumption by patrons. These rules may include a prohibition 1 on smoking indoors. 2 2. After consultation with researchers knowledgeable 3 about the risks and benefits of marijuana and providing an 4 opportunity for public comment, the division shall develop a 5 scientifically accurate safety information label or handout 6 or both, which shall be available to each adult-use marijuana 7 consumer. The label or handout shall include all of the 8 following: 9 a. Advice about the potential risks of marijuana, including 10 all of the following: 11 (1) The risks of driving under the influence of marijuana, 12 and the fact that doing so is illegal. 13 (2) Any adverse effects unique to younger adults, including 14 related to the developing mind. 15 (3) Potential adverse events and other risks. 16 (4) The risks of using marijuana during pregnancy and 17 breastfeeding. 18 b. The need to safeguard all retail marijuana and retail 19 marijuana products from children and pets. 20 3. The division shall review and update the safety 21 information materials at least once every two years to 22 ensure they remain accurate. The review period shall include 23 soliciting input from researchers knowledgeable about the 24 risks and benefits of marijuana and an opportunity for public 25 comment. 26 4. In order to ensure that individual privacy is protected, 27 the division shall not require a consumer to provide a 28 retail marijuana store with personal information other than 29 government-issued identification to determine the consumer’s 30 age, and a retail marijuana store shall not be required to 31 acquire and record personal information about consumers. 32 Sec. 41. NEW SECTION . 124F.26 Driving under the influence 33 of marijuana —— prohibited. 34 Nothing in this subchapter allows driving under the 35 -31- LSB 1491XS (10) 89 ss/rh 31/ 46

S.F. 406 influence of marijuana or while impaired by marijuana. 1 Sec. 42. NEW SECTION . 124F.27 Marijuana use by minors —— 2 prohibited. 3 Nothing in this subchapter allows the transfer of marijuana, 4 with or without remuneration, to a person under the age of 5 twenty-one years, or the use of marijuana by a person under the 6 age of twenty-one years. 7 Sec. 43. NEW SECTION . 124F.28 Private property and tenant 8 rights. 9 1. Except as provided in this section, the provisions of 10 this subchapter do not require any person, corporation, or any 11 other entity that occupies, owns, or controls a property to 12 allow the consumption, cultivation, display, sale, or transfer 13 of marijuana on or in that property. 14 2. a. Except as provided in this section, a landlord 15 or property manager shall not refuse to rent to a tenant 16 or otherwise discriminate against a tenant based on a past 17 conviction for a marijuana offense that would have been legal 18 under this chapter. 19 b. Except as provided in this section, in the case of 20 the rental of a residential dwelling, a landlord or property 21 manager shall not prohibit the possession of retail marijuana 22 or the consumption of retail marijuana by nonsmoking means. 23 c. The limitations in this subsection do not apply in any 24 of the following circumstances: 25 (1) The tenant is a roomer who is not leasing the entire 26 residential dwelling. 27 (2) The residence is incidental to detention or the 28 provision of medical, geriatric, educational, counseling, 29 religious, or similar services. 30 (3) The residence is a transitional housing or sober living 31 facility. 32 (4) Failing to prohibit marijuana possession or consumption 33 would violate federal law or regulations or cause a landlord 34 or property manager to lose a monetary or licensing-related 35 -32- LSB 1491XS (10) 89 ss/rh 32/ 46

S.F. 406 benefit under federal law or regulations. 1 d. After a warning, a landlord or property manager may 2 take action against a tenant if the tenant’s use of marijuana 3 creates an odor that interferes with a person’s peaceful 4 enjoyment of the person’s home or property. 5 Sec. 44. NEW SECTION . 124F.29 Contracts enforceable. 6 It is the public policy of this state that contracts related 7 to the operation of a retail marijuana establishment registered 8 pursuant to this subchapter should be enforceable. It is 9 the public policy of this state that no contract entered 10 into by a retail marijuana establishment or its employees 11 or agents as permitted pursuant to a valid registration, or 12 by those who allow property to be used by an establishment, 13 its employees, or its agents as permitted pursuant to a 14 valid registration, shall be unenforceable on the basis 15 that cultivating, obtaining, manufacturing, distributing, 16 dispensing, transporting, selling, possessing, or using 17 marijuana or hemp is prohibited by federal law. 18 Sec. 45. NEW SECTION . 124F.30 Law enforcement —— 19 limitations. 20 1. No law enforcement officer employed by an agency that 21 receives state or local government funds shall expend any state 22 or local resources, including the officer’s time, to effect any 23 arrest or seizure of marijuana, or conduct any investigation, 24 on the sole basis of activity the officer believes to 25 constitute a violation of federal law, if the officer has 26 reason to believe that such activity is in compliance with 27 this chapter, nor shall any such officer expend any state or 28 local resources, including the officer’s time, to provide any 29 information or logistical support related to such activity to 30 any federal law enforcement authority or prosecuting entity. 31 2. No agency or political subdivision of this state shall 32 rely on a violation of federal law related to marijuana as the 33 sole basis for taking an adverse action against a person. 34 Sec. 46. NEW SECTION . 124F.31 Apportionment of revenue. 35 -33- LSB 1491XS (10) 89 ss/rh 33/ 46

S.F. 406 Revenues generated in excess of the amount needed to 1 implement and enforce this subchapter by the marijuana excise 2 tax shall be distributed by the division every three months as 3 follows: 4 1. Seven percent to the Iowa department of public health for 5 use in evidence-based, voluntary programs for the prevention or 6 treatment of substance abuse. 7 2. Seventeen percent to the Iowa department of public health 8 for enhancement of the state’s mental health systems. 9 3. Up to one percent to the department of public safety 10 to fund impaired driving enforcement and drug recognition 11 training. If the entire one percent is not needed for 12 training, any excess shall be distributed to the general fund. 13 4. Seventy-five percent to the general fund. 14 Sec. 47. NEW SECTION . 423H.1 Definitions. 15 For the purposes of this chapter, unless the context 16 otherwise requires, “retail marijuana” , “retail marijuana 17 establishment” , and “retail marijuana product” mean the same as 18 defined in section 124F.7. 19 Sec. 48. NEW SECTION . 423H.2 Local marijuana excise tax. 20 1. A municipality may by ordinance adopt an excise tax at a 21 rate of no more than three percent of the sales price of each 22 sale of retail marijuana and retail marijuana products to a 23 consumer under the jurisdiction of the municipality pursuant 24 to chapter 124F, subchapter II. 25 2. A municipality shall provide notice of the imposition 26 of an excise tax under this section and the amount of the tax 27 to the department of revenue at least ninety days prior to 28 the first day of the tax quarter when the excise tax will be 29 collected. 30 3. A local marijuana excise tax imposed pursuant to this 31 section shall be paid by the consumer to the retail marijuana 32 establishment. Each retail marijuana establishment shall 33 collect from the consumer the full amount of the tax payable on 34 each taxable sale. 35 -34- LSB 1491XS (10) 89 ss/rh 34/ 46

S.F. 406 4. On the fifteenth day of each month, each retail marijuana 1 establishment that sells retail marijuana to a consumer 2 shall pay the local marijuana excise taxes due on the retail 3 marijuana that the retail marijuana establishment sold in the 4 previous calendar month to the municipality. 5 5. The local marijuana excise tax imposed by this section 6 is separate from and in addition to the marijuana excise tax 7 imposed pursuant to section 124F.23. The local marijuana 8 excise tax imposed pursuant to this section shall not be part 9 of the sales price to which the marijuana excise tax applies. 10 6. The local marijuana excise tax shall be separately 11 itemized from the marijuana excise tax imposed pursuant to 12 section 124F.23 on the receipt provided to the purchaser. 13 Sec. 49. NEW SECTION . 453B.17 Retail marijuana. 14 This chapter shall not apply to retail marijuana or retail 15 marijuana products produced or sold pursuant to chapter 124F. 16 Sec. 50. SUBCHAPTER DESIGNATIONS. 17 1. The Code editor is directed to create two new subchapters 18 in chapter 124F as follows: 19 a. Subchapter I shall be entitled “criminal penalties” and 20 include sections 124F.1 through 124F.5. 21 b. Subchapter II shall be entitled “retail marijuana” and 22 include sections 124F.6 through 124F.31. 23 2. The Code editor may modify subchapter titles if necessary 24 and is directed to correct internal references in the Code as 25 necessary due to enactment of this section. 26 Sec. 51. EFFECTIVE DATE. This Act takes effect January 27 1, 2022, except that the alcoholic beverages division of the 28 department of commerce may adopt rules for the implementation 29 of this Act prior to that date. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 DIVISION I —— CRIMINAL PENALTIES. This bill modifies 34 criminal penalties relating to marijuana by eliminating and 35 -35- LSB 1491XS (10) 89 ss/rh 35/ 46

S.F. 406 modifying certain criminal provisions in Code chapter 124 1 (uniform controlled substances Act), and transferring certain 2 criminal provisions from Code chapter 124 to new Code chapter 3 124F. 4 MANUFACTURE, DELIVERY, OR POSSESSION WITH INTENT TO DELIVER 5 MARIJUANA. The bill provides that an unauthorized person 6 commits a class “C” felony punishable by confinement for 7 no more than 10 years and a fine of at least $1,370 but not 8 more than $13,660 if the person violates new Code section 9 124F.2(1)(a) and the controlled substance involves more than 10 22 kilograms of marijuana. Currently, such a person commits 11 a class “B” felony punishable by confinement of no more than 12 50 years if the controlled substance involves more than 1,000 13 kilograms of a mixture or substance containing a detectable 14 amount of marijuana, or a class “B” felony punishable by 15 confinement of no more than 25 years if the controlled 16 substance involves more than 100 kilograms of marijuana but not 17 more than 1,000 kilograms. 18 The bill provides that an unauthorized person commits a 19 class “D” felony if the person violates new Code section 20 124F.2(1)(b) and the controlled substance involves more than 21 2 kilograms of marijuana but not more than 22 kilograms. A 22 class “D” felony is punishable by confinement for no more than 23 five years and a fine of at least $1,025 but not more than 24 $10,245. Currently, such a person commits a class “C” felony 25 if the controlled substance involves more than 50 kilograms of 26 marijuana but not more than 100 kilograms. 27 The bill provides that an unauthorized person commits an 28 aggravated misdemeanor if the person violates new Code section 29 124F.2(1)(c) and the controlled substance involves more than 30 12 ounces of marijuana but not more than 2 kilograms. An 31 aggravated misdemeanor is punishable by confinement for no more 32 than two years and a fine of at least $855 but not more than 33 $8,540. Currently, such a person commits a class “D” felony 34 if the controlled substance involves 50 kilograms or less of 35 -36- LSB 1491XS (10) 89 ss/rh 36/ 46

S.F. 406 marijuana. 1 The bill provides that an unauthorized person commits a 2 serious misdemeanor if the person violates new Code section 3 124F.2(1)(d) and the controlled substance involves more than 4 4 ounces of marijuana but not more than 12 ounces. A serious 5 misdemeanor is punishable by confinement for no more than one 6 year and a fine of at least $430 but not more than $2,560. 7 Currently, such a person commits a class “D” felony. 8 The bill provides that an unauthorized person commits a 9 simple misdemeanor if the person violates new Code section 10 124F.2(1)(e) and the controlled substance involves 4 ounces or 11 less of marijuana except as otherwise provided in the bill. A 12 simple misdemeanor is punishable by confinement for no more 13 than 30 days and a fine of at least $105 but not more than $855. 14 Currently, such a person commits a class “D” felony. 15 POSSESSION OF MARIJUANA. The bill provides that if a person 16 unlawfully possesses more than 6 ounces of marijuana but not 17 more than 12 ounces, the person commits a serious misdemeanor. 18 The bill provides that if a person unlawfully possesses more 19 than one-half ounce of marijuana but not more than 6 ounces, 20 the person commits a simple misdemeanor. 21 The bill provides that if a person 21 years of age or older 22 possesses one-half ounce or less of marijuana, the person 23 does not commit a criminal offense but shall be assessed a 24 civil penalty in the amount of $100. If the person is under 25 21 years of age, the offense shall be punishable as a serious 26 misdemeanor, which may be expunged after two years if the 27 person does not commit additional criminal violations other 28 than traffic offenses. The bill provides that any records 29 relating to the civil penalty shall not be displayed for public 30 viewing on the Iowa court information system and such records 31 shall not be kept in the criminal history files maintained by 32 the department of public safety. 33 The bill allows a municipality to adopt an ordinance to allow 34 for the legal possession of marijuana. 35 -37- LSB 1491XS (10) 89 ss/rh 37/ 46

S.F. 406 RETAIL MARIJUANA —— POSSESSION LIMITS. The bill establishes 1 possession limits for retail marijuana, defined in the 2 bill. The bill prohibits a resident of Iowa 21 years of 3 age or older from possessing more than 30 grams of marijuana 4 flower, 5 grams of marijuana concentrate, or 500 milligrams 5 of tetrahydrocannabinol contained in a product infused with 6 marijuana. Persons 21 years of age or older who are not 7 residents of Iowa may possess retail marijuana of no more 8 than 15 grams of marijuana flower, 2.5 grams of marijuana 9 concentrate, or 250 milligrams of tetrahydrocannabinol 10 contained in a product infused with marijuana. A person in 11 possession of retail marijuana in excess of amounts equivalent 12 to the amounts specified in the bill for the possession of 13 marijuana is subject to prosecution for a simple or serious 14 misdemeanor or a civil penalty. A retail marijuana store that 15 sells retail marijuana in excess of such amounts is subject to 16 a fine or other discipline imposed by the division. 17 Currently, if a person unlawfully possesses marijuana, the 18 person shall be punished by imprisonment in the county jail for 19 not more than six months or by a fine of not more than $1,000, 20 or by both for a first offense. If the person has previously 21 been convicted of marijuana possession, the person commits a 22 serious misdemeanor under current law, and if the person has 23 been convicted of marijuana possession two or more times, the 24 person commits an aggravated misdemeanor. 25 DELIVERY OR POSSESSION OF MARIJUANA —— SMALL AMOUNTS. If 26 the amount of marijuana delivered or possessed with intent to 27 deliver is one ounce or less and no remuneration was provided, 28 the defendant shall not be prosecuted for a violation of the 29 bill. 30 MARIJUANA USE IN PUBLIC. The bill prohibits the consumption 31 of marijuana in areas open and accessible to the public, 32 including but not limited to public transportation facilities, 33 sporting or music venues, parks, playgrounds, sidewalks and 34 roads, outdoor cafes, or indoor but public locations. A person 35 -38- LSB 1491XS (10) 89 ss/rh 38/ 46

S.F. 406 who violates this provision commits a simple misdemeanor 1 punishable as a scheduled violation in the amount of $50 for 2 a first offense and $100 for a second or subsequent offense. 3 This violation may be expunged after two years if the person 4 does not commit additional criminal violations other than 5 traffic offenses. 6 JUVENILE MARIJUANA OFFENSES. The bill specifies that the 7 juvenile court shall have exclusive original jurisdiction in a 8 proceeding concerning a minor who is alleged to have committed 9 a violation of the bill. 10 GATHERINGS WHERE CONTROLLED SUBSTANCES UNLAWFULLY USED. 11 The bill strikes a provision making it a serious misdemeanor 12 for a person to sponsor, promote, or aid in the sponsoring 13 or promoting of a meeting or gathering with the knowledge or 14 intent that marijuana be distributed, used, or possessed at the 15 meeting or gathering in violation of Code chapter 124. 16 ACCOMMODATION OFFENSE. The bill strikes a provision 17 allowing a prosecution for unlawful delivery or possession with 18 intent to deliver marijuana, if the prosecution proves that 19 the defendant delivered or possessed with intent to deliver 20 one-half ounce or less of marijuana which was not offered for 21 sale, the defendant is guilty of an accommodation offense 22 and rather than being sentenced for a class “D” felony under 23 Code section 124.401(1)(d), the person is sentenced for a 24 misdemeanor in violation of Code section 124.401(5). The bill 25 makes conforming changes to Code sections 124.401G (Iowa hemp 26 Act) and 124.413 (mandatory minimum sentences —— controlled 27 substances). 28 SECOND OR SUBSEQUENT OFFENSES. Currently, a person 29 convicted of a second or subsequent offense under Code chapter 30 124 may be punished by imprisonment for a period not to exceed 31 three times the term otherwise authorized, or fined not more 32 than three times the amount otherwise authorized. The bill 33 strikes the provision that allows for the use of a previous 34 marijuana conviction in determining if a person has been 35 -39- LSB 1491XS (10) 89 ss/rh 39/ 46

S.F. 406 convicted of a second or subsequent offense under Code chapter 1 124. 2 MARIJUANA IN MOTOR VEHICLES. The bill prohibits a driver 3 of a motor vehicle upon a public street or highway from using 4 marijuana in the passenger area of the motor vehicle. The bill 5 also prohibits a driver or passenger of or in a motor vehicle 6 upon a public street or highway from possessing marijuana in 7 the passenger area of a motor vehicle except in a sealed, odor 8 proof, child resistant container. The bill defines “passenger 9 area” as the area designed to seat the driver and passengers 10 while the motor vehicle is in operation and any area that is 11 readily accessible to the driver or a passenger while in their 12 seating positions, including the glove compartment. A person 13 who knowingly violates this provision of the bill is guilty of 14 a simple misdemeanor. A simple misdemeanor is punishable by 15 confinement for no more than 30 days and a fine of at least $105 16 but not more than $855. 17 DIVISION II —— RETAIL MARIJUANA. Division II of the 18 bill relates to the regulation of retail marijuana in Iowa. 19 The bill grants the alcoholic beverages division of the 20 department of commerce (division) the authority to regulate the 21 cultivation, production, transportation, testing, and sale of 22 retail marijuana and retail marijuana products, including by 23 issuing appropriate licenses and promulgating rules. 24 The bill requires the division to transfer half of any 25 application fee collected to the local jurisdiction in which 26 the retail marijuana establishment will be located. The 27 bill allows local jurisdictions to impose limitations on the 28 operation of retail marijuana establishments, including by 29 prohibiting their operation. 30 The bill directs the division to develop and maintain a 31 seed-to-sale tracking system to track retail marijuana from the 32 seed or immature plant stage until it is sold to a consumer at a 33 retail marijuana establishment. 34 LOCAL LICENSES. The bill requires the division to transmit 35 -40- LSB 1491XS (10) 89 ss/rh 40/ 46

S.F. 406 any application for a retail marijuana establishment it 1 receives to the local jurisdiction where the establishment 2 will be located within seven days of receipt unless the 3 local jurisdiction has prohibited the operation of retail 4 marijuana establishments. The local jurisdiction must then 5 inform the division whether the application complies with 6 any local restrictions on the operation of retail marijuana 7 establishments it may have imposed. The bill requires a person 8 to receive approval from both the division and the local 9 jurisdiction before operating a retail marijuana establishment. 10 A person whose application for a license is denied is entitled 11 to a hearing and judicial review pursuant to Code chapter 17A. 12 LICENSES. Ninety days prior to the expiration date of an 13 existing license, the division shall notify the licensee of the 14 expiration date by first class mail at the licensee’s address 15 of record with the division. A licensee may apply for the 16 renewal of an existing license to the division not less than 30 17 days prior to the date of expiration. 18 RETAIL MARIJUANA STORES. The bill allows a retail marijuana 19 store to purchase retail marijuana from a retail marijuana 20 cultivation facility. A retail marijuana store may also 21 sell prepackaged and labeled retail marijuana products. A 22 retail marijuana store must track all of its retail marijuana 23 and retail marijuana products from the point that they are 24 transferred to the retail marijuana store to the point of 25 sale. The bill prohibits a retail marijuana store from selling 26 more than one ounce of retail marijuana or its equivalent 27 in a single transaction to a person, excluding nonedible, 28 nonpsychoactive retail marijuana products. 29 Prior to initiating a sale, the bill requires a retail 30 marijuana store employee to verify that that purchaser has a 31 valid identification card showing that the person is 21 years 32 of age or older. If a purchaser presents a retail marijuana 33 store employee with fraudulent proof of age, any action taken 34 in reliance on that proof of age shall not be grounds for the 35 -41- LSB 1491XS (10) 89 ss/rh 41/ 46

S.F. 406 revocation or suspension of a license. 1 The bill allows a retail marijuana store to provide to the 2 state hygienic laboratory a sample of its products for testing 3 and research purposes. The retail marijuana store shall 4 maintain a record of what was provided to the laboratory and 5 the results of the testing. 6 The bill prohibits a retail marijuana store from selling 7 any products other than retail marijuana, retail marijuana 8 products, marijuana accessories, nonconsumable products such as 9 apparel, and marijuana products such as childproof packaging 10 containers. 11 RETAIL MARIJUANA CULTIVATION. The bill allows the division 12 to issue up to 20 retail marijuana cultivation facility 13 licenses to persons who cultivate retail marijuana for sale 14 and distribution to retail marijuana stores, manufacturers, 15 or other cultivation facilities. The bill requires a retail 16 marijuana cultivation facility to remit any applicable tax due. 17 The bill also requires a retail marijuana cultivation facility 18 to track the marijuana it cultivates from seed or immature 19 plant to wholesale purchase. 20 RETAIL MARIJUANA PRODUCTS MANUFACTURING LICENSES. The bill 21 allows the division to issue up to 20 retail marijuana products 22 manufacturing licenses to persons who manufacture retail 23 marijuana products. The bill requires a retail marijuana 24 products manufacturer to track all of its retail marijuana from 25 the point it is either transferred from its retail marijuana 26 cultivation facility or the point when it is delivered to the 27 retail marijuana products manufacturer from a retail marijuana 28 cultivation facility to the point of transfer to a retail 29 marijuana store. 30 The bill requires retail marijuana products to be 31 manufactured and prepared in a facility that only manufactures 32 retail marijuana products, except that premises may be shared 33 with a medical cannabidiol-infused products manufacturer so 34 long as a virtual or physical separation of inventory is 35 -42- LSB 1491XS (10) 89 ss/rh 42/ 46

S.F. 406 maintained. 1 RETAIL MARIJUANA TRANSPORTATION. The bill allows the 2 division to issue a retail marijuana transporter license to 3 a person to provide logistics, distribution, and storage of 4 retail marijuana and retail marijuana products. The bill 5 requires a retail marijuana transporter to use the seed-to-sale 6 tracking system to create shipping manifests documenting the 7 transport of retail marijuana and retail marijuana products. 8 RETAIL MARIJUANA USE —— PROTECTIONS. The bill prohibits 9 the state and its political subdivisions from taking certain 10 actions against a person on the basis that the person has 11 engaged in conduct allowed by the bill. The state and its 12 political subdivisions shall not prosecute a person, deny a 13 person a professional license, deny a person a benefit or 14 entitlement, deny a person custody or visitation of a child, 15 deny a person employment or a contract, or deny a person 16 medical care on the basis that the person has engaged in 17 conduct allowed by the bill. The bill also prohibits the 18 state or a political subdivision from denying employment 19 or a contract to a person on the basis of a person’s prior 20 conviction of a nonviolent marijuana offense that does not 21 involve distribution to a minor. The bill excludes engaging 22 in conduct allowed by the bill from being classified as a 23 violation of a condition of parole, probation, or pretrial 24 release unless there is a specific finding that the conduct 25 could create a danger to the individual or another person. 26 The bill does not prohibit a governmental employer from 27 disciplining an employee or contractor for ingesting marijuana 28 at work or working while impaired by marijuana, nor does it 29 prohibit a licensing board from imposing a penalty on a person 30 for engaging in conduct that would constitute negligence or 31 professional malpractice. The protections of the bill do not 32 apply to the extent that they conflict with a governmental 33 employer’s obligations under federal law or would disqualify 34 a governmental employer from a monetary or licensing-related 35 -43- LSB 1491XS (10) 89 ss/rh 43/ 46

S.F. 406 benefit under federal law. 1 FEES. The bill allows the division to collect and charge 2 fees. The bill sets the application fee for a person applying 3 for a new retail marijuana establishment license at $5,000, 4 which shall be divided evenly between the division and the 5 local jurisdiction where the license is proposed to be issued. 6 The bill permits a local jurisdiction to impose operating fees 7 on retail marijuana establishments to which it has granted a 8 license. 9 LICENSE DISCIPLINE. The bill permits the division, on its 10 own motion or complaint, and after investigation, notice, 11 a public hearing, and opportunity to be heard, to suspend 12 or revoke a license if the licensee or any of its agents or 13 employees violate a provision of the bill or a rule promulgated 14 by the division. The division may administer oaths and issue 15 subpoenas to require the presence of persons and the production 16 of documents. The division may impose discipline pursuant to 17 rules and Code chapter 17A. 18 INSPECTION. The bill requires a licensee to keep a complete 19 set of all records necessary to show fully the business 20 transactions of the licensee, all of which shall be open at all 21 times during business hours for the inspection and examination 22 by the division or its duly authorized representatives. 23 The bill requires the licensed premises of a retail 24 marijuana establishment, including any places of storage 25 where retail marijuana or retail marijuana products are 26 stored, cultivated, sold, dispensed, or tested to be subject 27 to inspection by the state or local jurisdictions and their 28 investigators, during all business hours and other times 29 of apparent activity, for the purpose of inspection or 30 investigation. 31 STATE EXCISE TAX. The bill imposes an excise tax on 32 consumers at the rate of 20 percent of the sale price on 33 each sale of retail marijuana. The tax shall be paid by the 34 consumer to the retail marijuana establishment at the time 35 -44- LSB 1491XS (10) 89 ss/rh 44/ 46

S.F. 406 of sale, and each retail marijuana establishment shall remit 1 the tax collected to the division on the 15th day of each 2 month. Revenues generated by the excise tax shall be used to 3 administer the retail marijuana program. Excess funds shall be 4 distributed as provided by the bill to the Iowa department of 5 public health, the department of public safety, and the general 6 fund of the state. 7 OCCUPATIONAL LICENSING PROTECTIONS. The bill prohibits a 8 professional or occupational licensing board from imposing 9 discipline on a licensee for providing services related to 10 retail marijuana establishments. The bill also prohibits a 11 professional or occupational licensing board from denying a 12 license to a person based on a person’s past employment with a 13 retail marijuana establishment. 14 RULEMAKING. The bill requires the alcoholic beverages 15 division to adopt rules within 180 days of the effective date 16 of the bill to adopt rules for the implementation of the bill. 17 The rules shall not prohibit the operation of retail marijuana 18 establishments or make the operation of retail marijuana 19 establishments so costly as to be impractical. Required rules 20 include but are not limited to rules relating to applications, 21 fees, licensure, security requirements, labeling requirements, 22 health and safety requirements, restrictions on advertising, 23 cultivation, testing, and penalties. The division shall also 24 develop and regularly update safety materials to be distributed 25 upon the sale of retail marijuana. 26 ACTS PROHIBITED. The bill does not allow driving while under 27 the influence of or impaired by marijuana and does not allow 28 the transfer of marijuana to a person under 21 years of age or 29 the possession of marijuana by a person under 21 years of age. 30 PROPERTY RIGHTS. The bill does not require the owner of 31 a property to allow the consumption, cultivation, display, 32 sale, or transfer of marijuana at that property. However, in 33 the case of a residential dwelling, a landlord or property 34 manager shall not prohibit the possession of retail marijuana 35 -45- LSB 1491XS (10) 89 ss/rh 45/ 46

S.F. 406 or the consumption of retail marijuana by means other than 1 smoking except under certain circumstances. The bill allows 2 a landlord to take action against a tenant after a warning if 3 the tenant’s use of marijuana creates an odor that interferes 4 with the peaceful enjoyment of property by other tenants. The 5 bill prohibits a landlord from discriminating against a tenant 6 or applicant on the basis of a past conviction of a marijuana 7 offense that would have been legal under the bill. 8 CONTRACTS. The bill states that it is the public policy 9 of the state that contracts relating to retail marijuana 10 shall not be unenforceable on the basis that the production, 11 distribution, and possession of marijuana is prohibited by 12 federal law. 13 LAW ENFORCEMENT. The bill prohibits law enforcement 14 agencies from expending resources on the investigation of or 15 arrest for activity related to marijuana that is in violation 16 of federal law if the officer performing the investigation 17 or arrest has reason to believe that the activity complies 18 with the requirements of the bill. The bill also prohibits 19 an agency or political subdivision of the state from taking 20 an adverse action against a person on the sole basis that the 21 person has violated a federal law related to marijuana. 22 LOCAL EXCISE TAX. The bill allows a municipality to adopt 23 by ordinance an excise tax of no more than 3 percent on retail 24 marijuana sold in the municipality. The bill requires a 25 municipality to inform the department of revenue at least 90 26 days prior to the first day of the tax quarter when the excise 27 tax will be collected. The tax shall be paid by the consumer 28 to the retail marijuana establishment at the time of sale, 29 and each retail marijuana establishment shall remit the tax 30 collected to the municipality on the 15th day of each month. 31 The bill takes effect January 1, 2022, except that the 32 alcoholic beverages division may adopt rules prior to that date 33 for the implementation of the bill. 34 -46- LSB 1491XS (10) 89 ss/rh 46/ 46