S.F. 265 Section 1. Section 204.7, subsection 8, paragraphs b and c, 1 Code 2023, are amended to read as follows: 2 b. A person manufacturing a consumable hemp product in this 3 state shall register with the department of inspections and 4 appeals on a form prescribed by the department of inspections 5 and appeals by rule . The registration form and information 6 required to be included on the registration form shall be 7 prescribed by rules adopted by the department of inspections 8 and appeals. The department of inspections and appeals may 9 impose a fee, established by the department of inspections and 10 appeals by rule, on a registrant not to exceed the cost of 11 processing the registration. The department of inspections and 12 appeals shall adopt rules for the revocation of a registration 13 issued to a manufacturer who manufactures a consumable hemp 14 product not in compliance with this chapter . 15 c. A person selling a consumable hemp product in this state 16 shall register with the department of inspections and appeals 17 on a form prescribed by the department of inspections and 18 appeals by rule and shall keep on the premises of the person’s 19 business a copy of the certificate of analysis issued pursuant 20 to section 204.8 for the hemp contained in the consumable 21 hemp products sold by the person . The registration form and 22 information required to be included on the registration form 23 shall be prescribed by rules adopted by the department of 24 inspections and appeals. However, the registration form shall 25 include the name and the street or road address of the person’s 26 established place of business. The department of inspections 27 and appeals may impose a fee, established by the department of 28 inspections and appeals by rule, on a registrant not to exceed 29 the cost of processing the registration. The department of 30 inspections and appeals shall adopt rules for the revocation of 31 a registration issued to a person who sells a consumable hemp 32 product not in compliance with this section . 33 Sec. 2. Section 204.7, subsection 8, Code 2023, is amended 34 by adding the following new paragraphs: 35 -1- LSB 2100XS (3) 90 da/ns 1/ 4

S.F. 265 NEW PARAGRAPH . 0d. For hemp contained in consumable hemp 1 products sold at retail, a registrant must keep copies of 2 certificates of analysis issued pursuant to section 204.8 at 3 the registrant’s established place of business described in 4 paragraph “c” . 5 NEW PARAGRAPH . 00d. (1) Except as provided in subparagraph 6 (2), a registrant must conduct in-person, face-to-face retail 7 sales of all consumable hemp products at the registrant’s 8 established place of business as described in paragraph “c” . 9 (2) The registrant may conduct in-person, face-to-face 10 sales of consumable hemp products at one or more temporary 11 locations if all of the following apply: 12 (a) Information regarding the registrant’s established 13 place of business has been included on registration forms as 14 provided in paragraph “c” for the last two complete registration 15 years. 16 (b) Rules adopted by the department of inspections and 17 appeals do not prohibit the use of the temporary location. 18 Sec. 3. ADMINISTRATIVE RULES. The department of 19 inspections and appeals shall submit a notice of intended 20 action to the administrative rules coordinator and the 21 Iowa administrative code editor pursuant to section 17A.4, 22 subsection 1, paragraph “a”, not later than September 1, 2023, 23 for the adoption of rules required to implement this Act. 24 Sec. 4. EFFECTIVE DATE. The section of this Act requiring 25 the department of inspections and appeals to submit a notice 26 of intended action for the adoption of rules, being deemed of 27 immediate importance, takes effect upon enactment. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 BACKGROUND. The “Iowa Hemp Act” (IHA) regulates the 32 production, manufacture, and sale of hemp, including the 33 manufacture and sale of consumable hemp products (CHP) in 34 this state (Code chapter 204) under authority granted to the 35 -2- LSB 2100XS (3) 90 da/ns 2/ 4

S.F. 265 department of agriculture and land stewardship (DALS) by the 1 federal government (Code section 204.3). Hemp is the plant 2 Cannabis sativa L., or any part of that plant, with a delta-9 3 tetrahydrocannabinol concentration (THC) of 0.3 percent or 4 less on a dry weight basis when tested and includes a product 5 derived from such hemp when manufactured (Code section 204.2). 6 Hemp or an associated hemp product meeting IHA requirements 7 is excluded from the list of controlled substances (Code 8 section 124.204). A CHP is a type of hemp product that 9 includes a substance metabolized or is otherwise subject to 10 a biotransformative process when introduced into the human 11 body (Code section 204.2 and amended Code section 204.7). The 12 IHA does not recognize a CHP that is inhaled (Code section 13 204.2). DALS regulates the production, harvest, processing, 14 transportation, and manufacture of hemp (21 IAC ch. 96) and 15 the department of inspections and appeals (DIA) regulates the 16 manufacture and sale of CHP (amended Code section 204.7 and 17 481 IAC ch. 32). A manufacturer or person engaged in the 18 retail sale of a CHP must register with DIA (amended Code 19 section 204.7(8)). A registration expires one year after being 20 approved (481 IAC 32.2(5)). 21 BILL’S PROVISIONS. The bill expressly authorizes DIA to 22 obtain information by registrants regarding their established 23 place of business, including the name and address of a 24 registrant engaged in the retail sale of CHP. In order to 25 enhance the readability of the Code, the bill moves a provision 26 that requires a registrant engaged in the retail sale of CHP 27 to keep certain records regarding THC levels of hemp used to 28 manufacture the CHP. The bill requires that when a registrant 29 makes an in-person, face-to-face retail sale of CHP, the sale 30 must be made at the registrant’s established place of business 31 as described on the registration form. However, the bill 32 provides for an exception subject to two conditions: (1) the 33 registrant’s established place of business must have been 34 included on a registration form for at least the prior two 35 -3- LSB 2100XS (3) 90 da/ns 3/ 4

S.F. 265 complete years, and (2) the temporary location must not be 1 prohibited by DIA rules. 2 APPLICABLE PENALTIES. DIA may revoke a registration issued 3 to a person who sells CHP in violation of the IHA (amended 4 Code section 204.7(8)(c)). A registrant violating the IHA is 5 subject to a civil penalty of not less than $500 and not more 6 than $2,500 (Code section 204.12). 7 ADMINISTRATIVE RULES AND EFFECTIVE DATE. The bill requires 8 DIA to begin the process of adopting rules required to 9 implement the bill’s provisions by September 1, 2023, and that 10 part of the bill takes effect upon enactment. 11 -4- LSB 2100XS (3) 90 da/ns 4/ 4