SF 265 (LSB 2100XS (3) 90)

SENATE FILE 265

BY  ZAUN

A BILL FOR

An Act regulating consumable hemp products, including by providing for in-person, face-to-face sales, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 204.7, subsection 8, paragraphs b and c, Code 2023, are amended to read as follows:
   b.  A person manufacturing a consumable hemp product in this state shall register with the department of inspections and appeals on a form prescribed by the department of inspections and appeals by rule.  The registration form and information required to be included on the registration form shall be prescribed by rules adopted by the department of inspections and appeals. The department of inspections and appeals may impose a fee, established by the department of inspections and appeals by rule, on a registrant not to exceed the cost of processing the registration. The department of inspections and appeals shall adopt rules for the revocation of a registration issued to a manufacturer who manufactures a consumable hemp product not in compliance with this chapter.
   c.  A person selling a consumable hemp product in this state shall register with the department of inspections and appeals on a form prescribed by the department of inspections and appeals by rule and shall keep on the premises of the person’s business a copy of the certificate of analysis issued pursuant to section 204.8 for the hemp contained in the consumable hemp products sold by the person.  The registration form and information required to be included on the registration form shall be prescribed by rules adopted by the department of inspections and appeals. However, the registration form shall include the name and the street or road address of the person’s established place of business. The department of inspections and appeals may impose a fee, established by the department of inspections and appeals by rule, on a registrant not to exceed the cost of processing the registration. The department of inspections and appeals shall adopt rules for the revocation of a registration issued to a person who sells a consumable hemp product not in compliance with this section.
    Sec. 2.  Section 204.7, subsection 8, Code 2023, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  0d.  For hemp contained in consumable hemp products sold at retail, a registrant must keep copies of certificates of analysis issued pursuant to section 204.8 at the registrant’s established place of business described in paragraph “c”.
   NEW PARAGRAPH.  00d.  (1)  Except as provided in subparagraph (2), a registrant must conduct in-person, face-to-face retail sales of all consumable hemp products at the registrant’s established place of business as described in paragraph “c”.
   (2)  The registrant may conduct in-person, face-to-face sales of consumable hemp products at one or more temporary locations if all of the following apply:
   (a)  Information regarding the registrant’s established place of business has been included on registration forms as provided in paragraph “c” for the last two complete registration years.
   (b)  Rules adopted by the department of inspections and appeals do not prohibit the use of the temporary location.
    Sec. 3.  ADMINISTRATIVE RULES.  The department of inspections and appeals shall submit a notice of intended action to the administrative rules coordinator and the Iowa administrative code editor pursuant to section 17A.4, subsection 1, paragraph “a”, not later than September 1, 2023, for the adoption of rules required to implement this Act.
    Sec. 4.  EFFECTIVE DATE.  The section of this Act requiring the department of inspections and appeals to submit a notice of intended action for the adoption of rules, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   BACKGROUND. The “Iowa Hemp Act” (IHA) regulates the production, manufacture, and sale of hemp, including the manufacture and sale of consumable hemp products (CHP) in this state (Code chapter 204) under authority granted to the department of agriculture and land stewardship (DALS) by the federal government (Code section 204.3). Hemp is the plant Cannabis sativa L., or any part of that plant, with a delta-9 tetrahydrocannabinol concentration (THC) of 0.3 percent or less on a dry weight basis when tested and includes a product derived from such hemp when manufactured (Code section 204.2). Hemp or an associated hemp product meeting IHA requirements is excluded from the list of controlled substances (Code section 124.204). A CHP is a type of hemp product that includes a substance metabolized or is otherwise subject to a biotransformative process when introduced into the human body (Code section 204.2 and amended Code section 204.7). The IHA does not recognize a CHP that is inhaled (Code section 204.2). DALS regulates the production, harvest, processing, transportation, and manufacture of hemp (21 IAC ch. 96) and the department of inspections and appeals (DIA) regulates the manufacture and sale of CHP (amended Code section 204.7 and 481 IAC ch. 32). A manufacturer or person engaged in the retail sale of a CHP must register with DIA (amended Code section 204.7(8)). A registration expires one year after being approved (481 IAC 32.2(5)).
   BILL’S PROVISIONS. The bill expressly authorizes DIA to obtain information by registrants regarding their established place of business, including the name and address of a registrant engaged in the retail sale of CHP. In order to enhance the readability of the Code, the bill moves a provision that requires a registrant engaged in the retail sale of CHP to keep certain records regarding THC levels of hemp used to manufacture the CHP. The bill requires that when a registrant makes an in-person, face-to-face retail sale of CHP, the sale must be made at the registrant’s established place of business as described on the registration form. However, the bill provides for an exception subject to two conditions: (1) the registrant’s established place of business must have been included on a registration form for at least the prior two complete years, and (2) the temporary location must not be prohibited by DIA rules.
   APPLICABLE PENALTIES. DIA may revoke a registration issued to a person who sells CHP in violation of the IHA (amended Code section 204.7(8)(c)). A registrant violating the IHA is subject to a civil penalty of not less than $500 and not more than $2,500 (Code section 204.12).
   ADMINISTRATIVE RULES AND EFFECTIVE DATE. The bill requires DIA to begin the process of adopting rules required to implement the bill’s provisions by September 1, 2023, and that part of the bill takes effect upon enactment.