Senate File 73 - Introduced SENATE FILE 73 BY PETERSEN , TRONE GARRIOTT , CELSI , BOULTON , DOTZLER , JOCHUM , T. TAYLOR , DONAHUE , KNOX , BENNETT , WEINER , WINCKLER , and GIDDENS A BILL FOR An Act relating to marijuana, including the manufacture, 1 delivery, and possession of marijuana and the licensure of 2 retail marijuana, providing fees, including excise taxes, 3 establishing funds, and including penalties. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1506XS (3) 90 ss/rh

S.F. 73 DIVISION I 1 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 1506XS (3) 90 ss/rh 1/ 46

S.F. 73 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. 9 If the controlled substance is marijuana and the person has 10 been previously convicted of a violation of this subsection in 11 which the controlled substance was marijuana, the punishment 12 shall be as provided in section 903.1, subsection 1 , paragraph 13 “b” . If the controlled substance is marijuana and the person 14 has been previously convicted two or more times of a violation 15 of this subsection in which the controlled substance was 16 marijuana, the person is guilty of an aggravated misdemeanor. 17 This subsection does not apply to the possession of marijuana 18 which 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 1506XS (3) 90 ss/rh 2/ 46

S.F. 73 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. 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 1506XS (3) 90 ss/rh 3/ 46

S.F. 73 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 1506XS (3) 90 ss/rh 4/ 46

S.F. 73 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), a person may petition the court to expunge the conviction, 31 and if the person has had no other criminal convictions, other 32 than local traffic violations or simple misdemeanor violations 33 of chapter 321 during the two-year period, the conviction 34 shall be expunged as a matter of law. The court shall enter 35 -5- LSB 1506XS (3) 90 ss/rh 5/ 46

S.F. 73 an order that the record of the conviction be expunged by the 1 clerk of the district court. Notwithstanding section 692.2, 2 after receipt of notice from the clerk of the district court 3 that a record of conviction has been expunged pursuant to this 4 subsection, the record of conviction shall be removed from the 5 criminal history data files maintained by the department of 6 public safety. 7 Sec. 14. NEW SECTION . 124F.3 Delivery or possession with 8 the intent to deliver —— small amounts. 9 If the amount of marijuana delivered or possessed with 10 intent to deliver is one ounce or less and no remuneration was 11 provided, the defendant shall not be prosecuted for a violation 12 of this subchapter. 13 Sec. 15. NEW SECTION . 124F.4 Juvenile offenses. 14 The juvenile court shall have exclusive original 15 jurisdiction in a proceeding concerning a minor who is alleged 16 to have committed a violation of this subchapter. 17 Sec. 16. NEW SECTION . 124F.5 Marijuana use in public. 18 1. Marijuana shall not be consumed in areas open and 19 accessible to the public, including but not limited to public 20 transportation facilities, sporting or music venues, parks, 21 playgrounds, sidewalks and roads, outdoor cafes, or indoor but 22 public locations. 23 2. A person who violates this section commits a simple 24 misdemeanor punishable as a scheduled violation under section 25 805.8C, subsection 15. 26 3. Upon the expiration of two years following conviction 27 for a violation of subsection 1, a person may petition the 28 court to expunge the conviction, and if the person has had no 29 other criminal convictions, other than local traffic violations 30 or simple misdemeanor violations of chapter 321 during the 31 two-year period, the conviction shall be expunged as a matter 32 of law. The court shall enter an order that the record of the 33 conviction be expunged by the clerk of the district court. 34 Notwithstanding section 692.2, after receipt of notice from 35 -6- LSB 1506XS (3) 90 ss/rh 6/ 46

S.F. 73 the clerk of the district court that a record of conviction 1 has been expunged pursuant to this subsection, the record of 2 conviction shall be removed from the criminal history data 3 files maintained by the department of public safety. 4 Sec. 17. NEW SECTION . 321.284B Marijuana in motor vehicles. 5 1. A driver of a motor vehicle upon a public street or 6 highway shall not use marijuana in the passenger area of the 7 motor vehicle. “Passenger area” means the area designed to 8 seat the driver and passengers while the motor vehicle is in 9 operation and any area that is readily accessible to the driver 10 or a passenger while in their seating positions, including the 11 glove compartment. 12 2. A driver or passenger of or in a motor vehicle upon a 13 public street or highway shall not possess marijuana in the 14 passenger area of a motor vehicle except in a sealed, odor 15 proof, child resistant container. 16 3. For the purposes of this section, “marijuana” means the 17 same as defined in section 124.401. 18 4. A person who knowingly violates a provision of this 19 section is guilty of a simple misdemeanor. 20 Sec. 18. Section 602.8105, Code 2023, is amended by adding 21 the following new subsection: 22 NEW SUBSECTION . 5. The clerk of the district court shall 23 collect the civil penalty assessed pursuant to section 124F.2, 24 subsection 2, paragraph “a” , subparagraph (3). 25 Sec. 19. Section 805.8C, Code 2023, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 15. Marijuana violations. For marijuana 28 use in public violations under section 124F.5, the scheduled 29 fine is fifty dollars for a first violation, and one hundred 30 dollars for a second or subsequent violation. 31 Sec. 20. REPEAL. Section 124.410, Code 2023, is repealed. 32 DIVISION II 33 RETAIL MARIJUANA 34 Sec. 21. NEW SECTION . 124F.6 Purpose and findings. 35 -7- LSB 1506XS (3) 90 ss/rh 7/ 46

S.F. 73 The general assembly finds all of the following: 1 1. Marijuana prohibition, like alcohol prohibition before 2 it, has been a wasteful and destructive failure. About half 3 of Americans admit to having used marijuana despite more than 4 eight decades of prohibition. 5 2. The prohibition of marijuana has had an unfair, disparate 6 impact on persons and communities of color. 7 3. The prohibition of marijuana diverts law enforcement 8 resources from violent and property crimes and subjects 9 civilians to unnecessary police interactions. 10 4. Keeping marijuana illegal deprives the state of 11 thousands of legal jobs and hundreds of millions of dollars in 12 tax revenue. 13 5. The use of marijuana should be legal for persons 14 twenty-one years of age or older and subject to taxation and 15 regulation. 16 Sec. 22. NEW SECTION . 124F.7 Definitions. 17 For the purposes of this subchapter: 18 1. “Division” means the alcoholic beverages division of the 19 department of commerce. 20 2. “Immature plant” means a nonflowering marijuana plant 21 that is no taller than eight inches and no wider than eight 22 inches, is produced from a cutting, clipping, or seedling, and 23 is in a cultivating container. 24 3. “License” means a license or registration issued pursuant 25 to this subchapter. 26 4. “Licensed premises” means the premises specified in an 27 application for a license under this subchapter, which are 28 owned or in possession of the licensee and within which the 29 licensee is authorized to cultivate, manufacture, distribute, 30 sell, or test retail marijuana and retail marijuana products in 31 accordance with this subchapter. 32 5. “Licensee” means a person licensed or registered pursuant 33 to this subchapter. 34 6. “Local jurisdiction” means a city or county. 35 -8- LSB 1506XS (3) 90 ss/rh 8/ 46

S.F. 73 7. “Local licensing authority” means, for any local 1 jurisdiction that has chosen to adopt a local licensing 2 requirement in addition to the state licensing requirements 3 of this subchapter, an authority designated by a municipal 4 or county ordinance, or resolution, or the governing body of 5 a municipality or county, or the board of commissioners of a 6 county if no such authority is designated. 7 8. “Location” means a particular parcel of land that may be 8 identified by an address or other descriptive means. 9 9. “Marijuana” means the same as defined in section 124.101. 10 10. “Marijuana accessories” means any equipment, products, 11 or materials of any kind which are used, intended for use, or 12 designed for use in planting, cultivating, growing, harvesting, 13 composting, manufacturing, compounding, converting, producing, 14 processing, preparing, testing, analyzing, packaging, 15 repackaging, storing, vaporizing, or containing marijuana, or 16 for ingesting, inhaling, or otherwise introducing marijuana 17 into the human body. 18 11. “Person” means a natural person, partnership, 19 association, company, corporation, limited liability company, 20 or organization; except that “person” does not include any 21 governmental organization. 22 12. “Retail marijuana” means all parts of the plant of the 23 genus Cannabis, whether growing or not, the seeds thereof; the 24 resin extracted from any part of the plant; and every compound, 25 manufacture, salt, derivative, mixture, or preparation of the 26 plant, its seeds or resin, including marijuana concentrate. 27 “Retail marijuana” does not include industrial hemp, nor does 28 it include fiber produced from the stalks, oil or cake made 29 from the seeds of the plant, sterilized seeds of the plant 30 which are incapable of germination, or the weight of any other 31 ingredient combined with marijuana to prepare topical or oral 32 administrations, food, drink, or other product. 33 13. “Retail marijuana cultivation facility” means an entity 34 licensed to cultivate, prepare, package, and sell marijuana to 35 -9- LSB 1506XS (3) 90 ss/rh 9/ 46

S.F. 73 retail marijuana stores, to marijuana product manufacturing 1 facilities, and to other marijuana cultivation facilities, but 2 not to consumers. 3 14. “Retail marijuana establishment” means a retail 4 marijuana store, a retail marijuana cultivation facility, or a 5 retail marijuana products manufacturer. 6 15. “Retail marijuana products” means concentrated marijuana 7 products and marijuana products that are comprised of marijuana 8 and other ingredients and are intended for use or consumption, 9 such as but not limited to edible products, ointments, and 10 tinctures. 11 16. “Retail marijuana products manufacturer” means an entity 12 licensed to purchase marijuana; manufacture, prepare, and 13 package marijuana products; and sell marijuana and marijuana 14 products to other marijuana product manufacturing facilities 15 and to retail marijuana stores, but not to consumers. 16 17. “Retail marijuana store” means an entity licensed 17 to purchase marijuana from marijuana cultivation facilities 18 and sell marijuana and to purchase marijuana products from 19 retail marijuana product manufacturing facilities and to sell 20 marijuana and marijuana products to consumers. 21 18. “Retail marijuana transporter” means an entity or person 22 licensed to transport retail marijuana and retail marijuana 23 products from one retail marijuana establishment to another 24 retail marijuana establishment and to temporarily store the 25 transported retail marijuana and retail marijuana products at 26 its licensed premises, but is not authorized to sell retail 27 marijuana or retail marijuana products under any circumstances. 28 Sec. 23. NEW SECTION . 124F.8 Applicability. 29 1. On or after July 1, 2024, an applicant may apply for 30 licensure of a retail marijuana establishment pursuant to this 31 subchapter. 32 2. a. Pursuant to subsection 1, an applicant shall complete 33 forms as provided by the division and shall pay the application 34 fee and the licensing fee. The division shall forward, within 35 -10- LSB 1506XS (3) 90 ss/rh 10/ 46

S.F. 73 seven days of the date of the application, one-half of the 1 application fee to the local jurisdiction unless the local 2 jurisdiction has prohibited the operation of retail marijuana 3 establishments. If the license is denied, the division shall 4 refund the licensing fee to the applicant. 5 b. The division shall act upon an application made pursuant 6 to subsection 1 no sooner than forty-five days and no later 7 than ninety days after the date of the application. The 8 division shall process applications in the order in which 9 completed applications are received by the division. 10 3. Any local jurisdiction may enact ordinances or 11 regulations governing the time, place, manner, and number of 12 retail marijuana establishments, which may include a local 13 licensing requirement, or may prohibit the operation of retail 14 marijuana establishments by ordinance or by a referred or 15 initiated measure. If a county acts through an initiated 16 measure, the proponents shall submit a petition signed by not 17 less than fifteen percent of the registered electors in the 18 county. 19 Sec. 24. NEW SECTION . 124F.9 Retail marijuana licensure. 20 1. The division shall develop and maintain a seed-to-sale 21 tracking system that tracks retail marijuana from either 22 seed or immature plant stage until the marijuana or retail 23 marijuana product is sold to a customer at a retail marijuana 24 establishment to ensure that no marijuana grown or processed 25 by a retail marijuana establishment is sold or otherwise 26 transferred except by a retail marijuana store. 27 2. The division shall adopt all rules necessary for the 28 implementation of this chapter. 29 3. Nothing in this subchapter shall be construed to be 30 a delegation to the division of the power to fix prices for 31 retail marijuana. 32 4. Nothing in this subchapter shall be construed to limit 33 a law enforcement agency’s ability to investigate unlawful 34 activity in relation to a retail marijuana establishment. A 35 -11- LSB 1506XS (3) 90 ss/rh 11/ 46

S.F. 73 law enforcement agency shall have the authority to conduct a 1 criminal history record check of a licensee and an employee of 2 a licensee during an investigation of unlawful activity related 3 to retail marijuana and retail marijuana products. 4 5. The division shall create a statewide licensure class 5 system for retail marijuana cultivation facilities. The 6 classifications may be based upon square footage of the 7 facility; lights, lumens, or wattage; canopy lighting; the 8 number of cultivating plants; a combination of the foregoing; 9 or other reasonable metrics. The division shall create a fee 10 structure for the licensure class system. 11 Sec. 25. NEW SECTION . 124F.10 State and local participation 12 in licensure. 13 1. When the division receives an application for an 14 initial license or a renewal of an existing license for 15 any retail marijuana establishment, the division shall 16 provide, within seven days of receipt of an application, 17 a copy of the application to the local jurisdiction in 18 which the establishment is to be located unless the local 19 jurisdiction has prohibited the operation of retail marijuana 20 establishments. The local jurisdiction shall determine whether 21 the application complies with local restrictions relating 22 to time, place, manner, and the number of retail marijuana 23 establishments allowed. The local jurisdiction shall inform 24 the division whether the application complies with local 25 restrictions. 26 2. A local jurisdiction may impose a separate local 27 licensing requirement as a part of its restrictions relating 28 to time, place, manner, and the number of retail marijuana 29 establishments allowed. A local jurisdiction may decline 30 to impose any local licensing requirements, but a local 31 jurisdiction shall notify the division that it either approves 32 or denies each application received by the local jurisdiction. 33 3. If a local jurisdiction issues a local license for 34 a retail marijuana establishment, a local jurisdiction may 35 -12- LSB 1506XS (3) 90 ss/rh 12/ 46

S.F. 73 schedule a public hearing on the application. If the local 1 jurisdiction schedules a hearing, it shall post and publish 2 public notice of the hearing not less than ten days prior 3 to the hearing. The local jurisdiction shall give public 4 notice by posting a sign in a conspicuous place on the license 5 applicant’s premises for which a local license application 6 has been made and by publication in a newspaper of general 7 circulation in the county in which the applicant’s premises are 8 located. 9 4. If a local jurisdiction does not issue local licenses, 10 the local jurisdiction may give public notice of the state 11 license application by posting a sign in a conspicuous place 12 on the state license applicant’s premises for which a state 13 license application has been made and by publication in a 14 newspaper of general circulation in the county in which the 15 applicant’s premises are located. 16 5. Applications for a state license under this subchapter 17 must be made to the division on forms prepared and furnished 18 by the division and must set forth such information as the 19 division may require to enable the division to determine 20 whether a state license should be granted. 21 6. The division shall deny a state license if the premises 22 on which the applicant proposes to conduct its business does 23 not meet the requirements of this subchapter. The division 24 may refuse or deny a license renewal, reinstatement, or 25 initial license issuance for good cause. For purposes of this 26 subsection, “good cause” means any of the following: 27 a. The licensee or applicant has violated, does not meet, 28 or has failed to comply with any of the terms, conditions, or 29 provisions of this subchapter, any rules promulgated pursuant 30 to this subchapter, or any supplemental local law, rules, or 31 regulations. 32 b. The licensee or applicant has failed to comply with any 33 special terms or conditions of the license pursuant to an order 34 of the division or local licensing authority. 35 -13- LSB 1506XS (3) 90 ss/rh 13/ 46

S.F. 73 c. The licensed premises have been operated in a manner that 1 adversely affects the public health or safety of the immediate 2 neighborhood in which the retail marijuana establishment is 3 located. 4 7. If the division denies a state license pursuant to 5 subsection 6, the applicant shall be entitled to a hearing 6 pursuant to section 17A.12 and judicial review pursuant to 7 section 17A.19. The division shall provide written notice of 8 the grounds for denial of the state license to the applicant 9 and to the local jurisdiction at least fifteen days prior to 10 the hearing. 11 Sec. 26. NEW SECTION . 124F.11 Establishment and owner 12 requirements. 13 1. An owner who is a natural person must have been either 14 of the following: 15 a. A resident of Iowa for at least one year prior to the 16 date of the application. 17 b. A United States citizen prior to the date of the 18 application. 19 2. A retail marijuana establishment may be composed of an 20 unlimited number of owners that have been residents of Iowa for 21 at least one year prior to the date of the application. 22 3. The division shall review the retail marijuana 23 establishment’s operating documents to ensure compliance with 24 this section. 25 Sec. 27. NEW SECTION . 124F.12 Retail marijuana 26 establishment licensure. 27 1. Local jurisdictions may adopt and enforce regulations 28 for retail marijuana establishments that are at least as 29 restrictive as the provisions of this subchapter and any rule 30 promulgated pursuant to this subchapter. 31 2. A retail marijuana establishment shall not operate 32 until the retail marijuana establishment is licensed by the 33 division pursuant to this subchapter and approved by the 34 relevant local jurisdiction. If an application is denied by 35 -14- LSB 1506XS (3) 90 ss/rh 14/ 46

S.F. 73 the local licensing authority, the division shall revoke the 1 state license. In connection with a license, the applicant 2 shall provide a complete and accurate application as required 3 by the division. 4 3. A retail marijuana establishment shall notify the 5 division in writing of the name, address, and date of birth of 6 a new owner, officer, or manager before the new owner, officer, 7 or manager begins managing, owning, working, or otherwise 8 associating with the establishment. The owner, officer, 9 manager, or employee shall pass a fingerprint-based criminal 10 history record check as required by the division and shall 11 obtain the required identification prior to managing, owning, 12 working, or otherwise associating with the establishment. 13 4. Before granting a state license, the division may 14 consider, except when this subchapter specifically provides 15 otherwise, the requirements of this subchapter and any 16 rules promulgated pursuant to this subchapter, and all other 17 reasonable restrictions that are or may be placed upon a 18 licensee by the division or local licensing authority. 19 5. a. Each license issued under this subchapter is separate 20 and distinct. It is unlawful for a person to exercise any 21 of the privileges granted under a license other than the 22 license that the person holds or for a licensee to allow any 23 other person to exercise the privileges granted under the 24 licensee’s license. A separate license shall be required for 25 each specific business or business entity and each geographical 26 location. 27 b. At all times, a licensee shall possess and maintain 28 possession of the premises for which the license is issued 29 through ownership, lease, rental, or other arrangement for 30 possession of the premises. 31 6. Each licensee shall manage the licensed premises 32 personally or employ a separate and distinct manager on 33 the premises and shall report the name of the manager to 34 the division and local licensing authority. The licensee 35 -15- LSB 1506XS (3) 90 ss/rh 15/ 46

S.F. 73 shall report any change in manager to the division and local 1 licensing authority within seven days after the change. 2 Sec. 28. NEW SECTION . 124F.13 License renewal. 3 1. Ninety days prior to the expiration date of an existing 4 license, the division shall notify a licensee of the expiration 5 date by first class mail at the licensee’s address of record 6 with the division. A licensee may apply for the renewal of 7 an existing license to the division not less than thirty days 8 prior to the date of expiration of the existing license. Upon 9 receipt of an application for renewal of an existing license 10 and any applicable fees, the division shall submit, within 11 seven days of the application, a copy of the application to 12 the local jurisdiction to determine whether the application 13 complies with all local restrictions on renewal of licenses. 14 The division shall not accept an application for renewal of a 15 license after the date of expiration, except as provided in 16 subsection 3. The division may extend the expiration date of 17 the license and accept a late application for renewal of a 18 license if the applicant has filed a timely renewal application 19 with the local licensing authority. The division or the local 20 licensing authority, in its discretion, and subject to the 21 requirements of this subsection and subsection 3 and based upon 22 reasonable grounds, may waive the thirty-day time requirements 23 set forth in this subsection. 24 2. The division may request additional fingerprints from a 25 licensee when there is a demonstrated investigative need. 26 3. a. Notwithstanding the provisions of subsection 1, 27 a licensee whose license has been expired for not more than 28 ninety days may file a late renewal application upon the 29 payment of a nonrefundable late application fee of five hundred 30 dollars to the division. A licensee who files a late renewal 31 application and pays the requisite fees may continue to operate 32 until the division takes final action to approve or deny 33 the licensee’s late renewal application unless the division 34 summarily suspends the license pursuant to chapter 17A, this 35 -16- LSB 1506XS (3) 90 ss/rh 16/ 46

S.F. 73 subchapter, and rules promulgated pursuant to this subchapter. 1 b. The division may administratively continue a license 2 and accept a later application for renewal of a license at the 3 discretion of the division. 4 Sec. 29. NEW SECTION . 124F.14 Classes of licenses. 5 For the purpose of regulating the cultivation, manufacture, 6 distribution, sale, and testing of retail marijuana and retail 7 marijuana products, the division in its discretion, upon 8 receipt of an application in the prescribed form, may issue and 9 grant to the applicant a license or registration in any of the 10 following classes, subject to the provisions and restrictions 11 provided by this subchapter: 12 1. Retail marijuana store license. 13 2. Retail marijuana cultivation facility license. 14 3. Retail marijuana products manufacturing license. 15 4. Occupational licenses and registrations for owners, 16 managers, operators, employees, contractors, and other support 17 staff employed by, working in, or having access to restricted 18 areas of the licensed premises, as determined by the division. 19 The division may take any action with respect to a registration 20 pursuant to this subchapter as it may with respect to a license 21 pursuant to this subchapter, in accordance with the procedures 22 established pursuant to this subchapter. 23 5. Retail marijuana transporter license. 24 Sec. 30. NEW SECTION . 124F.15 Retail marijuana store 25 license. 26 1. a. A retail marijuana store license shall be issued 27 by the division only to a person selling retail marijuana or 28 retail marijuana products pursuant to the terms and conditions 29 of this subchapter. 30 b. A retail marijuana store shall not accept any retail 31 marijuana purchased from a retail marijuana cultivation 32 facility unless the retail marijuana store is provided with 33 evidence that any applicable excise tax due was paid. 34 2. Notwithstanding the provisions of this section, a 35 -17- LSB 1506XS (3) 90 ss/rh 17/ 46

S.F. 73 retail marijuana store licensee may also sell retail marijuana 1 products that are prepackaged and labeled as required by rules 2 of the division pursuant to section 124F.25. 3 3. a. A retail marijuana store shall not sell more than one 4 ounce of retail marijuana or its equivalent in retail marijuana 5 products, including retail marijuana concentrate, except for 6 nonedible, nonpsychoactive retail marijuana products, including 7 ointments, lotions, balms, and other nontransdermal topical 8 products during a single transaction to a person. 9 b. (1) Prior to initiating a sale, an employee of the 10 retail marijuana store making the sale shall verify that 11 the purchaser has a valid identification card showing the 12 purchaser is twenty-one years of age or older. If a person 13 under twenty-one years of age presents fraudulent proof of age, 14 any action relying on the fraudulent proof of age shall not be 15 grounds for the revocation or suspension of any license issued 16 under this subchapter. 17 (2) (a) If a retail marijuana store licensee or 18 employee has reasonable cause to believe that a person is 19 under twenty-one years of age and is exhibiting fraudulent 20 proof of age in an attempt to obtain any retail marijuana 21 or cannabidiol-infused product, the licensee or employee 22 is authorized to confiscate such fraudulent proof of age, 23 if possible, and shall, within seventy-two hours after the 24 confiscation, remit such fraudulent proof of age to a state 25 or local law enforcement agency. The failure to confiscate 26 such fraudulent proof of age or to remit such fraudulent proof 27 of age to a state or local law enforcement agency within 28 seventy-two hours after the confiscation shall not constitute a 29 criminal offense. 30 (b) If a retail marijuana store licensee or employee 31 believes that a person is under twenty-one years of age and 32 presents fraudulent proof of age in an attempt to obtain any 33 retail marijuana or retail cannabidiol-infused product, the 34 licensee or employee or any peace officer or police officer, 35 -18- LSB 1506XS (3) 90 ss/rh 18/ 46

S.F. 73 acting in good faith and upon probable cause based upon 1 reasonable grounds therefor, may detain and question such 2 person in a reasonable manner for the purpose of ascertaining 3 whether the person is guilty of any unlawful act regarding the 4 purchase of retail marijuana. The questioning of a person by a 5 licensee, employee, peace officer, or police officer does not 6 render the licensee, employee, peace officer, or police officer 7 civilly or criminally liable for slander, false arrest, false 8 imprisonment, malicious prosecution, or unlawful detention. 9 4. All retail marijuana and retail marijuana products 10 sold at a licensed retail marijuana store shall be packaged 11 and labeled as required by rules of the division pursuant to 12 section 124F.25. 13 5. a. A licensed retail marijuana store shall only 14 sell retail marijuana, retail marijuana products, marijuana 15 accessories, nonconsumable products such as apparel, and 16 marijuana-related products such as childproof packaging 17 containers, but shall be prohibited from selling or giving 18 away any consumable product, including but not limited to 19 cigarettes, alcohol, or an edible product that does not contain 20 marijuana, including but not limited to sodas, candies, or 21 baked goods. 22 b. A licensed retail marijuana store shall not sell any 23 retail marijuana or retail marijuana products that contain 24 nicotine or alcohol, if the sale of the alcohol would require a 25 license pursuant to chapter 123. 26 c. A licensed retail marijuana store shall not sell retail 27 marijuana or retail marijuana products over the internet nor 28 deliver retail marijuana or retail marijuana products to a 29 person who is not physically present in the retail marijuana 30 store’s licensed premises. 31 6. Retail marijuana or retail marijuana products shall not 32 be consumed on the premises of a retail marijuana store. 33 7. Notwithstanding any other provision of state law, sales 34 of retail marijuana and retail marijuana products are not 35 -19- LSB 1506XS (3) 90 ss/rh 19/ 46