H.F. 2605 DIVISION I 1 IOWA HEMP ACT 2 Section 1. Section 204.2, Code 2024, is amended by adding 3 the following new subsections: 4 NEW SUBSECTION . 01. “Advertise” means to present a 5 commercial message in any medium, including but not limited 6 to print, radio, television, sign, display, label, tag, or 7 articulation. 8 NEW SUBSECTION . 6A. “Distribute” means to transfer 9 possession. 10 NEW SUBSECTION . 15A. “Registrant” means a person who is 11 registered with the department of health and human services 12 pursuant to section 204.7. 13 Sec. 2. Section 204.2, subsection 2, paragraph c, Code 2024, 14 is amended to read as follows: 15 c. A hemp product is deemed to be a consumable hemp product 16 if it is any of the following all of the following apply : 17 (1) It is any of the following: 18 (a) Designed by the processor, including the manufacturer, 19 to be introduced into the human body. 20 (2) (b) Advertised as an item to be introduced into the 21 human body. 22 (3) (c) Distributed, exported, or imported , offered for 23 sale , or distribution sold to be introduced into the human 24 body. 25 (2) Its maximum tetrahydrocannabinol concentration is less 26 than or equal to the maximum tetrahydrocannabinol concentration 27 allowed under section 124.204, subsection 7. 28 Sec. 3. Section 204.7, subsection 8, paragraph a, 29 subparagraph (3), Code 2024, is amended to read as follows: 30 (3) The consumable hemp product complies with packaging 31 and labeling requirements, which shall be established by rules 32 adopted by the department of health and human services by rule . 33 Sec. 4. Section 204.7, subsection 8, paragraph a, Code 2024, 34 is amended by adding the following new subparagraphs: 35 -1- LSB 5341HV (2) 90 da/ns 1/ 11

H.F. 2605 NEW SUBPARAGRAPH . (4) The consumable hemp product complies 1 with restrictions upon the sale or other distribution of a 2 consumable hemp product established by rules adopted by the 3 department of health and human services. 4 NEW SUBPARAGRAPH . (5) The consumable hemp product meets 5 requirements for total delta-9 tetrahydrocannabinol potency on 6 a per serving and per container basis, as set forth by rules 7 adopted by the department of health and human services. 8 Sec. 5. Section 204.7, subsection 8, Code 2024, is amended 9 by adding the following new paragraph: 10 NEW PARAGRAPH . 0b. (1) A person is engaged in the retail 11 sale of a consumable hemp product, if any of the following 12 apply: 13 (a) The person offers to distribute a consumable hemp 14 product to a consumer in exchange for consideration. 15 (b) The person is an owner of a business that distributes 16 consumable hemp products to consumers in exchange for 17 consideration. 18 (c) The person is a business that distributes consumable 19 hemp products to consumers in exchange for consideration and 20 presents a consumable hemp product to a consumer in the form 21 of a gift. 22 (2) A person, including a business, is engaged in the sale 23 of a consumable hemp product regardless of whether the person 24 is registered with the department of health and human services 25 as provided in this section. 26 Sec. 6. Section 204.12, subsection 1, Code 2024, is amended 27 to read as follows: 28 1. A Unless another civil penalty is otherwise provided in 29 this chapter, a person who violates a provision of this chapter 30 is subject to a civil penalty of not less than five hundred 31 dollars and not more than two thousand five hundred dollars. 32 The department shall impose, assess, and collect the civil 33 penalty. Each day that a continuing violation occurs may be 34 considered a separate offense. 35 -2- LSB 5341HV (2) 90 da/ns 2/ 11

H.F. 2605 Sec. 7. Section 204.14A, Code 2024, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 1A. A person shall not possess, use, 3 manufacture, market, transport, deliver, or distribute a 4 consumable hemp product if it is capable of inhalation by using 5 either method described in subsection 1, paragraph “b” or “c” . 6 Sec. 8. Section 204.14A, subsection 2, Code 2024, is amended 7 to read as follows: 8 2. A person who violates subsection 1 or 1A is guilty of a 9 serious misdemeanor. 10 Sec. 9. NEW SECTION . 204.14B Sale of consumable hemp 11 product —— failure to register —— civil penalty. 12 1. A person engaged in the retail sale of a consumable 13 hemp product in this state without being registered with the 14 department of health and human services as required in section 15 204.7 shall be subject to a civil penalty of not more than ten 16 thousand dollars. The department of health and human services 17 shall impose, assess, and collect the civil penalty. Each day 18 that a continuing violation occurs may be considered a separate 19 offense. 20 2. All civil penalties collected under this section shall be 21 deposited into the general fund of the state. 22 3. A person in violation of this section is not also subject 23 to a civil penalty as provided in section 204.12. 24 Sec. 10. NEW SECTION . 204.14C Sale of consumable hemp 25 product —— failure to register —— criminal penalty. 26 1. a. A person engaged in the retail sale of a consumable 27 hemp product who is not registered with the department of 28 health and human services as required in section 204.7 commits 29 a serious misdemeanor. 30 b. A person engaged in the retail sale of an item advertised 31 as a consumable hemp product that is not a consumable hemp 32 product commits a serious misdemeanor. 33 2. This section shall be presumed not to be in conflict with 34 or limit a prosecution for a violation of any other provision 35 -3- LSB 5341HV (2) 90 da/ns 3/ 11

H.F. 2605 of law, including but not limited to chapter 124 or 21 U.S.C. 1 ch. 13. 2 Sec. 11. NEW SECTION . 204.14D Persons under legal age —— 3 criminal offense. 4 1. A person shall not sell, give, or otherwise distribute 5 a consumable hemp product to a person under twenty-one years 6 of age. 7 2. A person who violates subsection 1 is guilty of a simple 8 misdemeanor. 9 Sec. 12. NEW SECTION . 204.14E Persons under legal age —— 10 scheduled violation and community service. 11 1. A person under twenty-one years of age shall not consume, 12 possess, purchase, or attempt to purchase a consumable hemp 13 product. 14 2. A person who violates subsection 1 shall be subject to a 15 scheduled violation in the form of a civil penalty pursuant to 16 section 805.8C, subsection 3, paragraph “d” . 17 3. In addition to the imposition of a civil penalty as 18 provided in subsection 2, a person who violates subsection 1 19 shall be subject to a court appearance as provided in section 20 805.10. The court shall sentence the person to perform a 21 specified number of hours of unpaid community service as deemed 22 appropriate by the court subject to the following: 23 a. For a first violation, eight hours, unless waived by the 24 court. 25 b. For a second offense, twelve hours. 26 c. For a third or subsequent offense, sixteen hours. 27 4. A person who violates this section is not subject to a 28 civil penalty as provided in section 204.12. 29 5. A person does not violate subsection 1 by possessing 30 a consumable hemp product if the person is employed by a 31 registrant and the person is possessing the consumable hemp 32 product as part of their employment. 33 Sec. 13. NEW SECTION . 204.14F Persons under legal age —— 34 exception —— cooperation with department of public safety or 35 -4- LSB 5341HV (2) 90 da/ns 4/ 11

H.F. 2605 local law enforcement agency. 1 1. a. A person who would otherwise act to commit an offense 2 under section 204.14D is not guilty of that offense if the 3 person acts under the direction or consent of the department 4 of public safety or a local law enforcement agency as part of 5 an enforcement investigation. 6 b. A person who would otherwise act to commit a violation 7 under section 204.14E is not subject to that offense if the 8 person acts under the direction or consent of the department 9 of public safety or a local law enforcement agency as part of 10 an enforcement investigation. 11 2. In enforcing this section, the department of public 12 safety or a local law enforcement agency shall take all 13 measures necessary to ensure that a consumable hemp product 14 is not introduced into the body of a person under the age of 15 twenty-one. 16 3. Notwithstanding chapter 22, any personal information 17 identifying the person committing an offense or violation as 18 described in this section shall be confidential. 19 Sec. 14. NEW SECTION . 204.15A Hemp products —— order of 20 confiscation and disposal. 21 1. The department of health and human services may order the 22 confiscation and disposal of a hemp product based on any of the 23 following: 24 a. It is falsely advertised, sold, or distributed as a 25 consumable hemp product. 26 b. It exceeds the maximum tetrahydrocannabinol concentration 27 allowed under section 124.204, subsection 7, or this chapter. 28 c. It is a consumable hemp product manufactured, sold, 29 or distributed by a person who is not registered with the 30 department of health and human services as is required in 31 section 204.7. 32 2. The department of health and human services shall act 33 in consultation with the department of public safety. The 34 department of health and human services may request assistance 35 -5- LSB 5341HV (2) 90 da/ns 5/ 11

H.F. 2605 from the department of public safety or a local law enforcement 1 agency as necessary to carry out the provisions of this 2 section. The department of health and human services, upon 3 request, shall deliver any sample of the item to the department 4 of public safety or a local law enforcement agency. 5 3. A person required to be registered with the department of 6 health and human services as provided in section 204.7 shall 7 pay the department of health and human services all actual 8 and reasonable costs of the destruction of the item. If that 9 department assumes any amount of the costs, it may charge that 10 amount to the person. 11 Sec. 15. Section 805.8C, subsection 3, Code 2024, is amended 12 by adding the following new paragraph: 13 NEW PARAGRAPH . d. (1) For violations of section 204.14E, 14 the scheduled fine is as follows: 15 (a) If the violation is a first offense, the scheduled fine 16 is seventy dollars. 17 (b) If the violation is a second offense, the scheduled fine 18 is one hundred thirty-five dollars. 19 (c) If the violation is a third or subsequent offense, the 20 scheduled fine is three hundred twenty-five dollars. 21 (2) The fine shall be imposed as a civil penalty. 22 (3) The crime services surcharge under section 911.1 shall 23 not be added to the penalty, and the court costs pursuant to 24 section 805.9, subsection 6, shall not be imposed. 25 (4) Notwithstanding section 805.12, any civil penalty paid 26 under this subsection shall be retained by the city or county 27 enforcing the violation. 28 Sec. 16. Section 805.10, subsection 1, Code 2024, is amended 29 by adding the following new paragraph: 30 NEW PARAGRAPH . e. When a violation charged involves the 31 consumption, possession, purchase, or attempt to purchase of 32 a consumable hemp product as provided in section 204.14E, for 33 which there is a community service sentence. 34 DIVISION II 35 -6- LSB 5341HV (2) 90 da/ns 6/ 11

H.F. 2605 REGULATION OF ALCOHOLIC BEVERAGES 1 Sec. 17. Section 123.49, subsection 2, Code 2024, is amended 2 by adding the following new paragraph: 3 NEW PARAGRAPH . l. Sell, give, or otherwise supply any 4 alcoholic beverage containing tetrahydrocannabinol as described 5 in chapter 124, including any isomers, derivatives, or analogs 6 of tetrahydrocannabinol, whether naturally occurring or 7 synthesized, to any person on the licensed premises. 8 Sec. 18. NEW SECTION . 123.49A Restriction on alcoholic 9 beverages containing tetrahydrocannabinol. 10 A holder of a license, permit, or certificate of compliance 11 issued by the department under this chapter shall not 12 manufacture, import, or sell at wholesale in this state an 13 alcoholic beverage containing tetrahydrocannabinol as described 14 in chapter 124, including any isomers, derivatives, or analogs 15 of tetrahydrocannabinol, whether naturally occurring or 16 synthesized. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 BACKGROUND. This bill amends Code chapter 204, the 21 “Iowa Hemp Act” (IHA) (Code section 204.1), authorizing 22 the production of a certain type of cannabis (sativa L.) 23 and the sale of products processed from hemp (Code section 24 204.7). Hemp is defined as composed of a species of cannabis 25 (sativa L.) having a maximum concentration of delta-9 26 tetrahydrocannabinol (THC) that does not exceed three-tenths of 27 1 percent on a dry weight basis (Code section 204.2). 28 The IHA removed hemp from the list of schedule I controlled 29 substances and the excise tax imposed on the sale of controlled 30 substances (see Code chapters 124 and 453B). The applicable 31 criminal penalty for an offense under those Code chapters 32 ranges from imprisonment for not more than six months or a fine 33 of not more than $1,000 to 50 years imprisonment and a fine 34 of not more than $1 million (see Code sections 124.401 and 35 -7- LSB 5341HV (2) 90 da/ns 7/ 11

H.F. 2605 453B.12). 1 In order for cannabis to be classified as hemp and not 2 a controlled substance, a person must comply with IHA 3 requirements. The IHA in turn must satisfy certification 4 requirements adopted by the United States department of 5 agriculture (USDA) under the federal Agriculture Improvement 6 Act of 2018 (federal hemp law) (Pub. L. No. 115-334), which 7 allows states and tribes to assume primary regulatory 8 authority over its production, including harvest, storage, 9 and distribution. The IHA and the USDA has designated Iowa’s 10 department of agriculture and land stewardship (DALS) as 11 primarily responsible for regulating hemp production in 12 cooperation with the department of public safety (DPS). 13 The IHA defines a hemp product as derived from or made by 14 processing hemp or parts of hemp. Generally, the IHA allows a 15 person to engage in the retail sale of a hemp product so long 16 as the hemp was produced in this state or another state in 17 compliance with the federal hemp law (Code section 204.7). By 18 its own terms, the federal hemp law is not construed to affect 19 or modify certain federal law, including the federal Food, 20 Drug, and Cosmetic Act (21 U.S.C. §301 et seq.). Generally, 21 the United States food and drug administration (FDA) regulates 22 human foods and additives, dietary supplements, drugs, and 23 cosmetics (see 7 U.S.C. §1639r), but the FDA has not adopted 24 a comprehensive regulatory framework. In the meantime, 25 the IHA recognizes a consumable hemp product (CHP) that is 26 metabolized when introduced into the human body, including by 27 ingestion or absorption but excluding inhalation (Code sections 28 204.2 and 204.14A). A person is prohibited from possessing, 29 using, manufacturing, marketing, transporting, delivering, or 30 distributing harvested hemp or a hemp product if the intended 31 use is introduction into the body by an article that utilizes 32 an electronic, chemical, or mechanical process, or a device 33 such as a cigarette, cigar, cigarillo, or pipe. 34 The IHA requires a person manufacturing or selling a CHP to 35 -8- LSB 5341HV (2) 90 da/ns 8/ 11

H.F. 2605 register with the department of health and human services (HHS) 1 (Code section 204.7 and 641 IAC ch. 156). HHS’s regulations 2 include packaging and labeling requirements. 3 A person violating the IHA is subject to a civil penalty 4 of not less than $500 and not more than $2,000 (Code section 5 204.12). DALS may impose, assess, and collect the civil 6 penalty (Code section 204.12). DALS in cooperation with 7 DPS or a local law enforcement agency (county sheriff or 8 municipal police department) may also confiscate and destroy 9 illegally produced hemp. DALS or the attorney general may seek 10 injunctive relief in order to restrain a person violating the 11 Code chapter by petitioning the district court (Code section 12 204.13). The injunction could address either hemp or a hemp 13 product. 14 BILL’S PROVISIONS —— CONSUMABLE HEMP PRODUCTS (THC POTENCY). 15 The bill authorizes HHS to adopt rules regulating the sale of 16 consumable hemp products. The bill also authorizes HHS to 17 adopt rules setting forth the THC potency of consumable hemp 18 products on a per serving and per container basis (amended Code 19 section 204.7). 20 BILL’S PROVISIONS —— CONSUMABLE HEMP PRODUCTS (USE IN 21 INHALATION —— CRIMINAL PENALTY). The bill prohibits a 22 person from possessing, using, manufacturing, marketing, 23 transporting, delivering, or distributing a CHP if it is 24 capable of inhalation by using an article or device (Code 25 section 204.14A). A person in violation of the provision is 26 guilty of a serious misdemeanor. A serious misdemeanor is 27 punishable by confinement for no more than one year and a fine 28 of at least $430 but not more than $2,560. 29 BILL’S PROVISIONS —— CONSUMABLE HEMP PRODUCTS (CRIMINAL AND 30 CIVIL PENALTY FOR FAILURE TO REGISTER). The bill provides 31 that a person engaged in the retail sale of a CHP who is not 32 registered with HHS commits both a serious misdemeanor and 33 is subject to a civil penalty assessed as an administrative 34 remedy (new Code sections 204.14B and 204.14C). The civil 35 -9- LSB 5341HV (2) 90 da/ns 9/ 11

H.F. 2605 penalty cannot exceed $10,000, with each day of a violation 1 constituting a separate offense. 2 BILL’S PROVISIONS —— CONSUMABLE HEMP PRODUCTS (SALE TO 3 MINORS —— CRIMINAL PENALTY AND SCHEDULED VIOLATION). The bill 4 provides that a person who sells or otherwise distributes 5 a CHP to a person under the age of 21 is guilty of a simple 6 misdemeanor (new Code section 204.14D). A simple misdemeanor 7 is punishable by confinement for no more than 30 days and a 8 fine of at least $105 but not more than $855. The bill also 9 provides that a person under the age of 21 is prohibited from 10 possessing or purchasing a CHP (new Code section 204.14E). The 11 penalty is a scheduled violation. The first offense is subject 12 to a scheduled fine of $75, the second offense is subject to 13 a scheduled fine of $135, and the third and each subsequent 14 offense is subject to a scheduled fine of $325. Each fine is 15 a civil penalty (amended Code section 805.8C). In addition, 16 the person subject to the violation may also be sentenced to 17 perform a number of hours of community service; ranging from 18 8 to 16 hours depending upon the number of previous offenses 19 committed. The bill provides an exception for an offense 20 committed by a person under the age of 21 acting in cooperation 21 with the DPS or a local law enforcement agency (new Code 22 section 204.14F). 23 BILL’S PROVISIONS —— CONSUMABLE HEMP PRODUCTS (CONFISCATION 24 AND DISPOSAL). The bill authorizes HHS to order the 25 confiscation and disposal of a hemp product under three 26 circumstances: it is falsely advertised, sold, or distributed 27 as a consumable hemp product; it exceeds the maximum THC limit; 28 or it is a consumable hemp product manufactured, sold, or 29 distributed by a person who is not registered as required (Code 30 section 204.7). The person may be assessed costs associated 31 with the order (Code section 204.15A). 32 BILL’S PROVISIONS —— CONSUMABLE HEMP PRODUCTS (REGULATION 33 OF ALCOHOLIC BEVERAGES). The bill regulates persons engaged 34 in the business of selling alcoholic beverages (wine, beer, or 35 -10- LSB 5341HV (2) 90 da/ns 10/ 11

H.F. 2605 spirits) in this state, including under a license, permit, or 1 certificate issued by the department of revenue (Code chapter 2 123). The bill prohibits such a person from manufacturing, 3 selling, giving, importing, or otherwise supplying any 4 alcoholic beverage containing tetrahydrocannabinol. By 5 operation of law, a person violating these provisions is 6 subject to criminal penalties set forth under Code sections 7 123.90 and 123.91. 8 -11- LSB 5341HV (2) 90 da/ns 11/ 11