House File 442 - Introduced HOUSE FILE 442 BY KONFRST , JAMES , ZABNER , BAGNIEWSKI , WESSEL-KROESCHELL , OLSON , AMOS JR. , NIELSEN , STAED , STECKMAN , WILSON , EHLERT , TUREK , MATSON , SCHOLTEN , KRESSIG , BROWN-POWERS , LEVIN , KURTH , BAETH , COOLING , CAHILL , SRINIVAS , WILBURN , SCHEETZ , MADISON , ABDUL-SAMAD , B. MEYER , CROKEN , GJERDE , and BUCK A BILL FOR An Act relating to marijuana, including the manufacture, 1 delivery, and possession of marijuana, the licensure of 2 retail marijuana, and medical cannabis, providing fees, 3 including excise taxes, establishing funds, providing 4 penalties, and including effective date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1615YH (11) 90 ss/rh

H.F. 442 DIVISION I 1 MARIJUANA —— CRIMINAL PENALTIES 2 Section 1. Section 124.401, subsection 1, unnumbered 3 paragraph 1, Code 2023, 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 2023, is amended by striking the 16 subparagraph. 17 Sec. 3. Section 124.401, subsection 1, paragraph b, 18 subparagraph (6), Code 2023, is amended by striking the 19 subparagraph. 20 Sec. 4. Section 124.401, subsection 1, paragraph c, 21 subparagraph (5), Code 2023, is amended by striking the 22 subparagraph. 23 Sec. 5. Section 124.401, subsection 1, paragraph c, 24 subparagraph (9), Code 2023, 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 2023, 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 1615YH (11) 90 ss/rh 1/ 77

H.F. 442 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, paragraph b, Code 4 2023, is amended to read as follows: 5 b. 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 2023, 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 2023, 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 1615YH (11) 90 ss/rh 2/ 77

H.F. 442 Sec. 10. Section 124.411, subsection 2, Code 2023, 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 2023, 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. a. 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 1615YH (11) 90 ss/rh 3/ 77

H.F. 442 follows: 1 (1) More than fifty kilograms shall be a class “C” felony. 2 (2) More than two kilograms but not more than fifty 3 kilograms shall be a class “D” felony. 4 (3) More than twelve ounces but not more than two kilograms 5 shall be an aggravated misdemeanor. 6 (4) More than four ounces but not more than twelve ounces 7 shall be punishable as a serious misdemeanor. 8 (5) Four ounces or less shall be punishable as a simple 9 misdemeanor, except as provided in section 124F.3. 10 b. In addition to any other penalties provided in this 11 subsection, a person who is eighteen years of age or older 12 who unlawfully manufactures with the intent to distribute, 13 distributes, or possesses with the intent to distribute 14 marijuana to another person who is eighteen years of age or 15 older in or on, or within one thousand feet of, the real 16 property comprising a public or private elementary or secondary 17 school, public park, public swimming pool, public recreation 18 center, or on a marked school bus, may be sentenced up to an 19 additional term of confinement of five years. 20 2. It is unlawful for any person knowingly or intentionally 21 to possess marijuana unless such substance was obtained 22 directly from, or pursuant to, a valid prescription or order of 23 a practitioner while acting in the course of the practitioner’s 24 professional practice, or except as otherwise authorized by 25 this subsection. A violation of this subsection involving 26 the possession of the following amounts of marijuana shall be 27 punishable as follows: 28 a. More than six ounces but not more than twelve ounces is 29 a serious misdemeanor. 30 b. More than one-half ounce but not more than six ounces is 31 a simple misdemeanor. 32 c. One-half ounce or less is not a criminal offense but 33 shall be assessed as a civil penalty in the amount of one 34 hundred dollars, except if the person is under twenty-one years 35 -4- LSB 1615YH (11) 90 ss/rh 4/ 77

H.F. 442 of age, the person shall complete a drug awareness program and 1 ten hours of unpaid community service, and shall notify the 2 person’s parents or legal guardian. 3 (1) The civil penalty shall be collected by the clerk of the 4 district court pursuant to section 602.8105, subsection 5. 5 (2) Any records relating to the civil penalty shall not 6 be displayed for public viewing on the Iowa court information 7 system. 8 (3) Any records relating to the civil penalty shall not 9 be kept in the criminal history data files maintained by the 10 department of public safety. Any records relating to the civil 11 penalty shall not be disseminated to other criminal or juvenile 12 justice agencies. 13 3. a. A retail marijuana store shall not sell retail 14 marijuana in excess of the following amounts in a single 15 transaction: 16 (1) Thirty grams of marijuana flower. 17 (2) Five hundred milligrams of tetrahydrocannabinol 18 contained in a product infused with marijuana. 19 b. A person shall not possess more than five ounces of 20 marijuana flower. 21 c. A person in possession of retail marijuana in excess of 22 the amounts specified in paragraph “a” equivalent to the amounts 23 specified in subsection 2, shall be subject to the penalties in 24 subsection 2. 25 d. A retail marijuana store in violation of this subsection 26 shall be subject to licensee discipline pursuant to section 27 124F.16. 28 e. For purposes of this subsection, “retail marijuana” and 29 “retail marijuana store” mean the same as defined in section 30 124F.4. 31 4. a. Upon the expiration of two years following a 32 conviction for a violation of subsection 2, paragraph “a” or 33 “b” , a person may petition the court to expunge the conviction, 34 and if the person has had no other criminal convictions, other 35 -5- LSB 1615YH (11) 90 ss/rh 5/ 77

H.F. 442 than local traffic violations or simple misdemeanor violations 1 of chapter 321 during the two-year period, the conviction 2 shall be expunged as a matter of law. The court shall enter 3 an order that the record of the conviction be expunged by the 4 clerk of the district court. Notwithstanding section 692.2, 5 after receipt of notice from the clerk of the district court 6 that a record of conviction has been expunged pursuant to this 7 subsection, the record of conviction shall be removed from the 8 criminal history data files maintained by the department of 9 public safety. 10 b. On the effective date of this Act, each court shall 11 review its records to identify persons who have been convicted 12 of an offense based on conduct allowed under this Act. Each 13 such conviction shall be expunged as a matter of law as 14 provided in paragraph “a” . 15 Sec. 14. NEW SECTION . 124F.3 Juvenile offenses. 16 The juvenile court shall have exclusive original 17 jurisdiction in a proceeding concerning a minor who is alleged 18 to have committed a violation of this subchapter. 19 Sec. 15. NEW SECTION . 321.284B Marijuana in motor vehicles. 20 1. A driver of a motor vehicle upon a public street or 21 highway shall not use marijuana in the passenger area of the 22 motor vehicle. “Passenger area” means the area designed to 23 seat the driver and passengers while the motor vehicle is in 24 operation and any area that is readily accessible to the driver 25 or a passenger while in their seating positions, including the 26 glove compartment. 27 2. A driver or passenger of or in a motor vehicle upon a 28 public street or highway shall not possess marijuana in the 29 passenger area of a motor vehicle except in a sealed, odor 30 proof, child resistant container. 31 3. For the purposes of this section, “marijuana” means the 32 same as defined in section 124.401. 33 4. A person who knowingly violates a provision of this 34 section is guilty of a simple misdemeanor. 35 -6- LSB 1615YH (11) 90 ss/rh 6/ 77

H.F. 442 Sec. 16. Section 321J.2, subsection 1, paragraph c, Code 1 2023, is amended to read as follows: 2 c. While Except as provided in section 321J.2C, any amount 3 of a controlled substance is present in the person, as measured 4 in the person’s blood or urine. 5 Sec. 17. NEW SECTION . 321J.2C Operating while under the 6 influence of marijuana. 7 1. A person shall not operate a motor vehicle in this state 8 while having fifty nanograms of tetrahydrocannabinol in the 9 person, as measured in the person’s blood. 10 2. A person who violates subsection 1 is guilty of a serious 11 misdemeanor, punishable as follows: 12 a. For a first offense, revocation of the person’s driver’s 13 license for a period of one hundred eighty days, except that if 14 the person refused to submit to chemical testing, the person’s 15 driver’s license shall be revoked for a period of one year. 16 b. For a second or subsequent offense, revocation of the 17 person’s driver’s license for a period of one year, except 18 that if the person refused to submit to chemical testing, the 19 person’s driver’s license shall be revoked for a period of two 20 years. 21 Sec. 18. Section 602.8105, Code 2022, 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 “c” , subparagraph (1). 26 Sec. 19. NEW SECTION . 901C.4 Felony offenses related to 27 marijuana —— expungement. 28 1. In addition to the expungement provisions available 29 to a defendant convicted of a misdemeanor marijuana offense 30 under chapter 124, upon application of a defendant convicted 31 of a felony offense under chapter 124 in the county where the 32 conviction occurred, related to the possession or transfer of 33 marijuana, the court shall enter an order expunging the record 34 of such a criminal case. 35 -7- LSB 1615YH (11) 90 ss/rh 7/ 77

H.F. 442 2. A person shall be granted an expungement of a record 1 under this section one time in the person’s lifetime. However, 2 the one application may request the expungement of records 3 relating to more than one nonviolent offense under this section 4 if the offenses arose from the same transaction or occurrence, 5 and the application contains the offenses to be expunged. 6 3. The expunged record under this section is a confidential 7 record exempt from public access under section 22.7 but shall 8 be made available by the clerk of the district court upon court 9 order. 10 4. Notwithstanding section 692.2, after receipt of 11 notice from the clerk of the district court that a record of 12 conviction has been expunged under subsection 1, the record 13 of conviction shall be removed from the criminal history data 14 files maintained by the department of public safety if such a 15 record was maintained in the criminal history data files. 16 5. The supreme court may prescribe rules governing the 17 procedures applicable to the expungement of a criminal case 18 under this section. 19 6. This section applies to a felony conviction that occurred 20 prior to January 1, 2024. 21 Sec. 20. REPEAL. Section 124.410, Code 2023, is repealed. 22 DIVISION II 23 RETAIL MARIJUANA 24 Sec. 21. NEW SECTION . 124F.4 Definitions. 25 For the purposes of this subchapter: 26 1. “Division” means the alcoholic beverages division of the 27 department of commerce. 28 2. “Immature plant” means a nonflowering marijuana plant 29 that is no taller than eight inches and no wider than eight 30 inches, is produced from a cutting, clipping, or seedling, and 31 is in a cultivating container. 32 3. “License” means a license or registration issued pursuant 33 to this subchapter. 34 4. “Licensed premises” means the premises specified in an 35 -8- LSB 1615YH (11) 90 ss/rh 8/ 77

H.F. 442 application for a license under this subchapter, which are 1 owned or in possession of the licensee and within which the 2 licensee is authorized to cultivate, manufacture, distribute, 3 sell, or test retail marijuana and retail marijuana products in 4 accordance with this subchapter. 5 5. “Licensee” means a person licensed or registered pursuant 6 to this subchapter. 7 6. “Local jurisdiction” means a county. 8 7. “Local licensing authority” means, for any local 9 jurisdiction that has chosen to adopt a local licensing 10 requirement in addition to the state licensing requirements 11 of this subchapter, an authority designated by a municipal 12 or county ordinance, or resolution, or the governing body of 13 a municipality or county, or the board of commissioners of a 14 county if no such authority is designated. 15 8. “Location” means a particular parcel of land that may be 16 identified by an address or other descriptive means. 17 9. “Marijuana” means the same as defined in section 124.101. 18 10. “Marijuana accessories” means any equipment, products, 19 or materials of any kind which are used, intended for use, or 20 designed for use in planting, cultivating, growing, harvesting, 21 composting, manufacturing, compounding, converting, producing, 22 processing, preparing, testing, analyzing, packaging, 23 repackaging, storing, vaporizing, or containing marijuana, or 24 for ingesting, inhaling, or otherwise introducing marijuana 25 into the human body. 26 11. “Person” means a natural person, partnership, 27 association, company, corporation, limited liability company, 28 or organization; except that “person” does not include any 29 governmental organization. 30 12. “Retail marijuana” means all parts of the plant of the 31 genus Cannabis, whether growing or not, the seeds thereof; the 32 resin extracted from any part of the plant; and every compound, 33 manufacture, salt, derivative, mixture, or preparation of the 34 plant, its seeds or resin, including marijuana concentrate. 35 -9- LSB 1615YH (11) 90 ss/rh 9/ 77

H.F. 442 “Retail marijuana” does not include industrial hemp, nor does 1 it include fiber produced from the stalks, oil or cake made 2 from the seeds of the plant, sterilized seeds of the plant 3 which are incapable of germination, or the weight of any other 4 ingredient combined with marijuana to prepare topical or oral 5 administrations, food, drink, or other product. 6 13. “Retail marijuana cultivation facility” means an entity 7 licensed to cultivate, prepare, package, and sell marijuana to 8 retail marijuana stores, to marijuana product manufacturing 9 facilities, and to other marijuana cultivation facilities, but 10 not to consumers. 11 14. “Retail marijuana establishment” means a retail 12 marijuana store, a retail marijuana cultivation facility, or a 13 retail marijuana products manufacturer. 14 15. “Retail marijuana products” means concentrated marijuana 15 products and marijuana products that are comprised of marijuana 16 and other ingredients and are intended for use or consumption, 17 such as but not limited to edible products, ointments, and 18 tinctures. 19 16. “Retail marijuana products manufacturer” means an entity 20 licensed to purchase marijuana; manufacture, prepare, and 21 package marijuana products; and sell marijuana and marijuana 22 products to other marijuana product manufacturing facilities 23 and to retail marijuana stores, but not to consumers. 24 17. “Retail marijuana store” means an entity licensed 25 to purchase marijuana from marijuana cultivation facilities 26 and sell marijuana and to purchase marijuana products from 27 retail marijuana product manufacturing facilities and to sell 28 marijuana and marijuana products to consumers. 29 18. “Retail marijuana transporter” means an entity or person 30 licensed to transport retail marijuana and retail marijuana 31 products from one retail marijuana establishment to another 32 retail marijuana establishment and to temporarily store the 33 transported retail marijuana and retail marijuana products at 34 its licensed premises, but is not authorized to sell retail 35 -10- LSB 1615YH (11) 90 ss/rh 10/ 77

H.F. 442 marijuana or retail marijuana products under any circumstances. 1 Sec. 22. NEW SECTION . 124F.5 Applicability. 2 1. On or after July 1, 2024, an applicant may apply for 3 licensure of a retail marijuana establishment pursuant to this 4 subchapter. 5 2. a. Pursuant to subsection 1, an applicant shall complete 6 forms as provided by the division and shall pay the application 7 fee and the licensing fee. The division shall forward, within 8 seven days of the date of the application, one-half of the 9 application fee to the local jurisdiction unless the local 10 jurisdiction has prohibited the operation of retail marijuana 11 establishments. If the license is denied, the division shall 12 refund the licensing fee to the applicant. 13 b. The division shall act upon an application made pursuant 14 to subsection 1 no sooner than forty-five days and no later 15 than ninety days after the date of the application. The 16 division shall process applications in the order in which 17 completed applications are received by the division. 18 3. a. Any local jurisdiction may enact ordinances or 19 regulations governing the time, place, manner, and number of 20 retail marijuana establishments, which may include a local 21 licensing requirement, or may prohibit the operation of retail 22 marijuana establishments by ordinance or by a referred or 23 initiated measure. If a county acts through an initiated 24 measure, the proponents shall submit a petition signed by not 25 less than fifteen percent of the registered electors in the 26 county. 27 b. If a county prohibits the operation of retail marijuana 28 establishments, the county shall, upon receipt of a petition 29 signed by fifteen percent of the registered voters in the 30 county, submit to the voters of the county the question of 31 whether the operation of retail marijuana establishments should 32 be allowed in the county at the next general election. 33 Sec. 23. NEW SECTION . 124F.6 Retail marijuana licensure. 34 1. The division shall develop and maintain a seed-to-sale 35 -11- LSB 1615YH (11) 90 ss/rh 11/ 77

H.F. 442 tracking system that tracks retail marijuana from either 1 seed or immature plant stage until the marijuana or retail 2 marijuana product is sold to a customer at a retail marijuana 3 establishment to ensure that no marijuana grown or processed 4 by a retail marijuana establishment is sold or otherwise 5 transferred except by a retail marijuana store. 6 2. The division shall adopt all rules necessary for the 7 implementation of this chapter. 8 3. Nothing in this subchapter shall be construed to be 9 a delegation to the division of the power to fix prices for 10 retail marijuana. 11 4. Nothing in this subchapter shall be construed to limit 12 a law enforcement agency’s ability to investigate unlawful 13 activity in relation to a retail marijuana establishment. A 14 law enforcement agency shall have the authority to conduct a 15 criminal history record check of a licensee and an employee of 16 a licensee during an investigation of unlawful activity related 17 to retail marijuana and retail marijuana products. 18 5. The division shall create a statewide licensure class 19 system for retail marijuana cultivation facilities. The 20 classifications may be based upon square footage of the 21 facility; lights, lumens, or wattage; canopy lighting; the 22 number of cultivating plants; a combination of the foregoing; 23 or other reasonable metrics. The division shall create a fee 24 structure for the licensure class system. 25 Sec. 24. NEW SECTION . 124F.7 State and local participation 26 in licensure. 27 1. When the division receives an application for an 28 initial license or a renewal of an existing license for 29 any retail marijuana establishment, the division shall 30 provide, within seven days of receipt of an application, 31 a copy of the application to the local jurisdiction in 32 which the establishment is to be located unless the local 33 jurisdiction has prohibited the operation of retail marijuana 34 establishments. The local jurisdiction shall determine whether 35 -12- LSB 1615YH (11) 90 ss/rh 12/ 77

H.F. 442 the application complies with local restrictions relating 1 to time, place, manner, and the number of retail marijuana 2 establishments allowed. The local jurisdiction shall inform 3 the division whether the application complies with local 4 restrictions. 5 2. A local jurisdiction may impose a separate local 6 licensing requirement as a part of its restrictions relating 7 to time, place, manner, and the number of retail marijuana 8 establishments allowed. A local jurisdiction may decline 9 to impose any local licensing requirements, but a local 10 jurisdiction shall notify the division that it either approves 11 or denies each application received by the local jurisdiction. 12 3. If a local jurisdiction issues a local license for 13 a retail marijuana establishment, a local jurisdiction may 14 schedule a public hearing on the application. If the local 15 jurisdiction schedules a hearing, it shall post and publish 16 public notice of the hearing not less than ten days prior 17 to the hearing. The local jurisdiction shall give public 18 notice by posting a sign in a conspicuous place on the license 19 applicant’s premises for which a local license application 20 has been made and by publication in a newspaper of general 21 circulation in the county in which the applicant’s premises are 22 located. 23 4. If a local jurisdiction does not issue local licenses, 24 the local jurisdiction may give public notice of the state 25 license application by posting a sign in a conspicuous place 26 on the state license applicant’s premises for which a state 27 license application has been made and by publication in a 28 newspaper of general circulation in the county in which the 29 applicant’s premises are located. 30 5. Applications for a state license under this subchapter 31 must be made to the division on forms prepared and furnished 32 by the division and must set forth such information as the 33 division may require to enable the division to determine 34 whether a state license should be granted. 35 -13- LSB 1615YH (11) 90 ss/rh 13/ 77

H.F. 442 6. The division shall deny a state license if the premises 1 on which the applicant proposes to conduct its business does 2 not meet the requirements of this subchapter. The division 3 may refuse or deny a license renewal, reinstatement, or 4 initial license issuance for good cause. For purposes of this 5 subsection, “good cause” means any of the following: 6 a. The licensee or applicant has violated, does not meet, 7 or has failed to comply with any of the terms, conditions, or 8 provisions of this subchapter, any rules promulgated pursuant 9 to this subchapter, or any supplemental local law, rules, or 10 regulations. 11 b. The licensee or applicant has failed to comply with any 12 special terms or conditions of the license pursuant to an order 13 of the division or local licensing authority. 14 c. The licensed premises have been operated in a manner that 15 adversely affects the public health or safety of the immediate 16 neighborhood in which the retail marijuana establishment is 17 located. 18 d. The licensed premises are located within two thousand 19 feet of real property comprising a school, child care facility, 20 or public park. 21 7. If the division denies a state license pursuant to 22 subsection 6, the applicant shall be entitled to a hearing 23 pursuant to section 17A.12 and judicial review pursuant to 24 section 17A.19. The division shall provide written notice of 25 the grounds for denial of the state license to the applicant 26 and to the local jurisdiction at least fifteen days prior to 27 the hearing. 28 8. The division shall give primary preference to applicants 29 for licensure who are currently licensed as a medical 30 cannabidiol manufacturer or medical cannabidiol dispensary 31 pursuant to chapter 124E. The division shall also prioritize 32 applicants for licensure that are businesses that are 33 majority-owned by persons who are women, citizens or permanent 34 legal residents of Iowa, or disabled veterans. 35 -14- LSB 1615YH (11) 90 ss/rh 14/ 77

H.F. 442 9. The division shall issue licenses to businesses that 1 are majority-owned by persons who are racial minorities in a 2 proportion that meets or exceeds the percentage of persons in 3 this state who are racial minorities according to the most 4 recent federal decennial census. 5 Sec. 25. NEW SECTION . 124F.8 Establishment and owner 6 requirements. 7 1. An owner who is a natural person must have been either 8 of the following: 9 a. A resident of Iowa for at least one year prior to the 10 date of the application. 11 b. A United States citizen prior to the date of the 12 application. 13 2. A retail marijuana establishment may be composed of an 14 unlimited number of owners that have been residents of Iowa for 15 at least one year prior to the date of the application. 16 3. A retail marijuana establishment shall not interfere 17 with the creation of or participation in a labor organization, 18 as defined in section 216.2, by employees of the retail 19 marijuana establishment. 20 4. The division shall review the retail marijuana 21 establishment’s operating documents to ensure compliance with 22 this section. 23 Sec. 26. NEW SECTION . 124F.9 Retail marijuana establishment 24 licensure. 25 1. Local jurisdictions may adopt and enforce regulations 26 for retail marijuana establishments that are at least as 27 restrictive as the provisions of this subchapter and any rule 28 promulgated pursuant to this subchapter. 29 2. A retail marijuana establishment shall not operate 30 until the retail marijuana establishment is licensed by the 31 division pursuant to this subchapter and approved by the 32 relevant local jurisdiction. If an application is denied by 33 the local licensing authority, the division shall revoke the 34 state license. In connection with a license, the applicant 35 -15- LSB 1615YH (11) 90 ss/rh 15/ 77

H.F. 442 shall provide a complete and accurate application as required 1 by the division. 2 3. A retail marijuana establishment shall notify the 3 division in writing of the name, address, and date of birth of 4 a new owner, officer, or manager before the new owner, officer, 5 or manager begins managing, owning, working, or otherwise 6 associating with the establishment. The owner, officer, 7 manager, or employee shall pass a fingerprint-based criminal 8 history record check as required by the division and shall 9 obtain the required identification prior to managing, owning, 10 working, or otherwise associating with the establishment. 11 The division shall not deny licensure to a retail marijuana 12 establishment on the basis that an owner, officer, manager, 13 or employee has been convicted of a crime other than a 14 violent crime, as defined in section 915.10, if the person has 15 completed any term of probation or parole imposed by the court. 16 4. Before granting a state license, the division may 17 consider, except when this subchapter specifically provides 18 otherwise, the requirements of this subchapter and any 19 rules promulgated pursuant to this subchapter, and all other 20 reasonable restrictions that are or may be placed upon a 21 licensee by the division or local licensing authority. 22 5. a. Each license issued under this subchapter is separate 23 and distinct. It is unlawful for a person to exercise any 24 of the privileges granted under a license other than the 25 license that the person holds or for a licensee to allow any 26 other person to exercise the privileges granted under the 27 licensee’s license. A separate license shall be required for 28 each specific business or business entity and each geographical 29 location. 30 b. At all times, a licensee shall possess and maintain 31 possession of the premises for which the license is issued 32 through ownership, lease, rental, or other arrangement for 33 possession of the premises. 34 6. Each licensee shall manage the licensed premises 35 -16- LSB 1615YH (11) 90 ss/rh 16/ 77

H.F. 442 personally or employ a separate and distinct manager on 1 the premises and shall report the name of the manager to 2 the division and local licensing authority. The licensee 3 shall report any change in manager to the division and local 4 licensing authority within seven days after the change. 5 Sec. 27. NEW SECTION . 124F.10 License renewal. 6 1. Ninety days prior to the expiration date of an existing 7 license, the division shall notify a licensee of the expiration 8 date by first class mail at the licensee’s address of record 9 with the division. A licensee may apply for the renewal of 10 an existing license to the division not less than thirty days 11 prior to the date of expiration of the existing license. Upon 12 receipt of an application for renewal of an existing license 13 and any applicable fees, the division shall submit, within 14 seven days of the application, a copy of the application to 15 the local jurisdiction to determine whether the application 16 complies with all local restrictions on renewal of licenses. 17 The division shall not accept an application for renewal of a 18 license after the date of expiration, except as provided in 19 subsection 3. The division may extend the expiration date of 20 the license and accept a late application for renewal of a 21 license if the applicant has filed a timely renewal application 22 with the local licensing authority. The division or the local 23 licensing authority, in its discretion, and subject to the 24 requirements of this subsection and subsection 3 and based upon 25 reasonable grounds, may waive the thirty-day time requirements 26 set forth in this subsection. 27 2. The division may request additional fingerprints from a 28 licensee when there is a demonstrated investigative need. 29 3. a. Notwithstanding the provisions of subsection 1, 30 a licensee whose license has been expired for not more than 31 ninety days may file a late renewal application upon the 32 payment of a nonrefundable late application fee of five hundred 33 dollars to the division. A licensee who files a late renewal 34 application and pays the requisite fees may continue to operate 35 -17- LSB 1615YH (11) 90 ss/rh 17/ 77

H.F. 442 until the division takes final action to approve or deny 1 the licensee’s late renewal application unless the division 2 summarily suspends the license pursuant to chapter 17A, this 3 subchapter, and rules adopted pursuant to this subchapter. 4 b. The division may administratively continue a license 5 and accept a later application for renewal of a license at the 6 discretion of the division. 7 Sec. 28. NEW SECTION . 124F.11 Classes of licenses. 8 For the purpose of regulating the cultivation, manufacture, 9 distribution, sale, and testing of retail marijuana and retail 10 marijuana products, the division in its discretion, upon 11 receipt of an application in the prescribed form, may issue and 12 grant to the applicant a license or registration in any of the 13 following classes, subject to the provisions and restrictions 14 provided by this subchapter: 15 1. Retail marijuana store license. 16 2. Retail marijuana cultivation facility license. 17 3. Retail marijuana products manufacturing license. 18 4. Occupational licenses and registrations for owners, 19 managers, operators, employees, contractors, and other support 20 staff employed by, working in, or having access to restricted 21 areas of the licensed premises, as determined by the division. 22 The division may take any action with respect to a registration 23 pursuant to this subchapter as it may with respect to a license 24 pursuant to this subchapter, in accordance with the procedures 25 established pursuant to this subchapter. 26 5. Retail marijuana transporter license. 27 Sec. 29. NEW SECTION . 124F.12 Retail marijuana store 28 license. 29 1. a. A retail marijuana store license shall be issued 30 by the division only to a person selling retail marijuana or 31 retail marijuana products pursuant to the terms and conditions 32 of this subchapter. 33 b. A retail marijuana store shall not accept any retail 34 marijuana purchased from a retail marijuana cultivation 35 -18- LSB 1615YH (11) 90 ss/rh 18/ 77

H.F. 442 facility unless the retail marijuana store is provided with 1 evidence that any applicable excise tax due was paid. 2 2. Notwithstanding the provisions of this section, a 3 retail marijuana store licensee may also sell retail marijuana 4 products that are prepackaged and labeled as required by rules 5 of the division pursuant to section 124F.21. 6 3. a. A retail marijuana store shall not sell more than one 7 ounce of retail marijuana or its equivalent in retail marijuana 8 products, including retail marijuana concentrate, except for 9 nonedible, nonpsychoactive retail marijuana products, including 10 ointments, lotions, balms, and other nontransdermal topical 11 products to a person. 12 b. (1) Prior to initiating a sale, an employee of the 13 retail marijuana store making the sale shall verify that 14 the purchaser has a valid identification card showing the 15 purchaser is twenty-one years of age or older. If a person 16 under twenty-one years of age presents fraudulent proof of age, 17 any action relying on the fraudulent proof of age shall not be 18 grounds for the revocation or suspension of any license issued 19 under this subchapter. 20 (2) (a) If a retail marijuana store licensee or 21 employee has reasonable cause to believe that a person is 22 under twenty-one years of age and is exhibiting fraudulent 23 proof of age in an attempt to obtain any retail marijuana 24 or cannabis-infused product, the licensee or employee is 25 authorized to confiscate such fraudulent proof of age, if 26 possible, and shall, within seventy-two hours after the 27 confiscation, remit such fraudulent proof of age to a state 28 or local law enforcement agency. The failure to confiscate 29 such fraudulent proof of age or to remit such fraudulent proof 30 of age to a state or local law enforcement agency within 31 seventy-two hours after the confiscation shall not constitute a 32 criminal offense. 33 (b) If a retail marijuana store licensee or employee 34 believes that a person is under twenty-one years of age and 35 -19- LSB 1615YH (11) 90 ss/rh 19/ 77