House File 2206 - Introduced HOUSE FILE 2206 BY AMOS JR. , WICHTENDAHL , GAINES , LEVIN , MADISON , McBURNEY , RAMIREZ , GOSA , WILSON , SCHOLTEN , KRESSIG , WILBURN , R. JOHNSON , KURTH , and WESSEL-KROESCHELL A BILL FOR An Act relating to the manufacture, delivery, and possession 1 of marijuana, the licensure of retail marijuana, providing 2 fees, including excise taxes, establishing funds, providing 3 penalties, and including effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5998YH (3) 91 ss/ko

H.F. 2206 DIVISION I 1 MARIJUANA —— CRIMINAL PENALTIES 2 Section 1. Section 124.401, subsection 1, unnumbered 3 paragraph 1, Code 2026, is amended to read as follows: 4 Except as authorized by this chapter , chapter 124E, or 5 chapter 124F , it is unlawful for any person to manufacture, 6 deliver, or possess with the intent to manufacture or deliver, 7 a controlled substance, a counterfeit substance, a simulated 8 controlled substance, or an imitation controlled substance, 9 or to act with, enter into a common scheme or design with, 10 or conspire with one or more other persons to manufacture, 11 deliver, or possess with the intent to manufacture or deliver 12 a controlled substance, a counterfeit substance, a simulated 13 controlled substance, or an imitation controlled substance. 14 Sec. 2. Section 124.401, subsection 1, paragraph a, 15 subparagraph (6), Code 2026, is amended by striking the 16 subparagraph. 17 Sec. 3. Section 124.401, subsection 1, paragraph b, 18 subparagraph (6), Code 2026, is amended by striking the 19 subparagraph. 20 Sec. 4. Section 124.401, subsection 1, paragraph c, 21 subparagraph (5), Code 2026, is amended by striking the 22 subparagraph. 23 Sec. 5. Section 124.401, subsection 1, paragraph c, 24 subparagraph (9), Code 2026, 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” , chapter 124E, or chapter 124F . 29 Sec. 6. Section 124.401, subsection 1, paragraph d, Code 30 2026, 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 5998YH (3) 91 ss/ko 1/ 50

H.F. 2206 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 2026, 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, Code 2026, is amended to read as 20 follows: 21 124.401G Iowa hemp Act. 22 Notwithstanding any provision of this chapter to the 23 contrary, a person shall not be guilty of an offense under 24 this chapter , including under section 124.401 or 124.410 , 25 for producing, possessing, using, harvesting, handling, 26 manufacturing, marketing, transporting, delivering, or 27 distributing the plant cannabis, to the extent that the person 28 is a USDA licensee acting in accordance with the federal hemp 29 law, as those terms are defined in chapter 204A . 30 Sec. 9. Section 124.407, subsection 2, Code 2026, is amended 31 to read as follows: 32 2. a. Any person who violates this section , and where the 33 controlled substance is any one a controlled substance other 34 than marijuana , is guilty of a class “D” felony. 35 -2- LSB 5998YH (3) 91 ss/ko 2/ 50

H.F. 2206 b. Any person who violates this section , and where the 1 controlled substance is marijuana only, is guilty of a serious 2 misdemeanor. 3 Sec. 10. Section 124.411, subsection 2, Code 2026, is 4 amended to read as follows: 5 2. For purposes of this section , an offense is considered 6 a second or subsequent offense, if, prior to the person’s 7 having been convicted of the offense, the offender has ever 8 been convicted under this chapter or under any state or federal 9 statute relating to narcotic drugs or cocaine, marijuana, 10 depressant, stimulant, or hallucinogenic drugs. 11 Sec. 11. Section 124.413, subsection 2, Code 2026, is 12 amended to read as follows: 13 2. This section shall not apply if : 14 a. The offense is found to be an accommodation pursuant to 15 section 124.410 ; or 16 b. The the controlled substance is marijuana. 17 Sec. 12. NEW SECTION . 124F.1 Definitions. 18 As used in this subchapter: 19 1. “Counterfeit substance” means the same as defined in 20 section 124.101. 21 2. “Imitation controlled substance” means the same as 22 defined in section 124.101. 23 3. “Marijuana” means the same as defined in section 124.101, 24 and includes a counterfeit substance, imitation controlled 25 substance, or simulated controlled substance containing a 26 detectable amount of marijuana. 27 4. “Simulated controlled substance” means the same as 28 defined in section 124.101. 29 Sec. 13. NEW SECTION . 124F.2 Marijuana —— penalties. 30 1. a. Except as otherwise provided in this subchapter and 31 chapter 124E, it is unlawful for any person to manufacture, 32 deliver, or possess with the intent to manufacture or deliver 33 marijuana, or to act with, enter into a common scheme or 34 design with, or conspire with one or more other persons to 35 -3- LSB 5998YH (3) 91 ss/ko 3/ 50

H.F. 2206 manufacture, deliver, or possess with the intent to manufacture 1 or deliver marijuana. A violation of this subsection involving 2 the following amounts of marijuana shall be punishable as 3 follows: 4 (1) More than fifty kilograms shall be a class “C” felony. 5 (2) More than two kilograms but not more than fifty 6 kilograms shall be a class “D” felony. 7 (3) More than twelve ounces but not more than two kilograms 8 shall be an aggravated misdemeanor. 9 (4) More than four ounces but not more than twelve ounces 10 shall be punishable as a serious misdemeanor. 11 (5) Four ounces or less shall be punishable as a simple 12 misdemeanor, except as provided in section 124F.3. 13 b. In addition to any other penalties provided in this 14 subsection, a person who is eighteen years of age or older 15 who unlawfully manufactures with the intent to distribute, 16 distributes, or possesses with the intent to distribute 17 marijuana to another person who is eighteen years of age or 18 older in or on, or within one thousand feet of, the real 19 property comprising a public or private elementary or secondary 20 school, public park, public swimming pool, public recreation 21 center, or on a marked school bus, may be sentenced up to an 22 additional term of confinement of five years. 23 2. It is unlawful for any person knowingly or intentionally 24 to possess marijuana unless such substance was obtained 25 directly from, or pursuant to, a valid prescription or order of 26 a practitioner while acting in the course of the practitioner’s 27 professional practice, or except as otherwise authorized by 28 this subsection. A violation of this subsection involving 29 the possession of the following amounts of marijuana shall be 30 punishable as follows: 31 a. More than six ounces but not more than twelve ounces is 32 a serious misdemeanor. 33 b. More than one-half ounce but not more than six ounces is 34 a simple misdemeanor. 35 -4- LSB 5998YH (3) 91 ss/ko 4/ 50

H.F. 2206 c. One-half ounce or less is not a criminal offense but 1 shall be assessed as a civil penalty in the amount of one 2 hundred dollars, except if the person is under twenty-one years 3 of age, the person shall complete a drug awareness program and 4 ten hours of unpaid community service, and shall notify the 5 person’s parents or legal guardian. 6 (1) The civil penalty shall be collected by the clerk of the 7 district court pursuant to section 602.8105, subsection 5. 8 (2) Any records relating to the civil penalty shall not 9 be displayed for public viewing on the Iowa court information 10 system. 11 (3) Any records relating to the civil penalty shall not 12 be kept in the criminal history data files maintained by the 13 department of public safety. Any records relating to the civil 14 penalty shall not be disseminated to other criminal or juvenile 15 justice agencies. 16 3. a. A retail marijuana store shall not sell retail 17 marijuana in excess of the following amounts in a single 18 transaction: 19 (1) Thirty grams of marijuana flower. 20 (2) Five hundred milligrams of tetrahydrocannabinol 21 contained in a product infused with marijuana. 22 b. A person shall not possess more than five ounces of 23 marijuana flower. 24 c. A person in possession of retail marijuana in excess of 25 the amounts specified in paragraph “a” equivalent to the amounts 26 specified in subsection 2, shall be subject to the penalties in 27 subsection 2. 28 d. A retail marijuana store in violation of this subsection 29 shall be subject to licensee discipline pursuant to section 30 124F.16. 31 e. For purposes of this subsection, “retail marijuana” and 32 “retail marijuana store” mean the same as defined in section 33 124F.4. 34 4. a. Upon the expiration of two years following a 35 -5- LSB 5998YH (3) 91 ss/ko 5/ 50

H.F. 2206 conviction for a violation of subsection 2, paragraph “a” or 1 “b” , a person may petition the court to expunge the conviction, 2 and if the person has had no other criminal convictions, other 3 than local traffic violations or simple misdemeanor violations 4 of chapter 321 during the two-year period, the conviction 5 shall be expunged as a matter of law. The court shall enter 6 an order that the record of the conviction be expunged by the 7 clerk of the district court. Notwithstanding section 692.2, 8 after receipt of notice from the clerk of the district court 9 that a record of conviction has been expunged pursuant to this 10 subsection, the record of conviction shall be removed from the 11 criminal history data files maintained by the department of 12 public safety. 13 b. On the effective date of this Act, each court shall 14 review its records to identify persons who have been convicted 15 of an offense based on conduct allowed under this Act. Each 16 such conviction shall be expunged as a matter of law as 17 provided in paragraph “a” . 18 Sec. 14. NEW SECTION . 124F.3 Juvenile offenses. 19 The juvenile court shall have exclusive original 20 jurisdiction in a proceeding concerning a minor who is alleged 21 to have committed a violation of this subchapter. 22 Sec. 15. NEW SECTION . 321.284B Marijuana in motor vehicles. 23 1. A driver of a motor vehicle upon a public street or 24 highway shall not use marijuana in the passenger area of the 25 motor vehicle. “Passenger area” means the area designed to 26 seat the driver and passengers while the motor vehicle is in 27 operation and any area that is readily accessible to the driver 28 or a passenger while in their seating positions, including the 29 glove compartment. 30 2. A driver or passenger of or in a motor vehicle upon a 31 public street or highway shall not possess marijuana in the 32 passenger area of a motor vehicle except in a sealed, odor 33 proof, child resistant container. 34 3. For the purposes of this section, “marijuana” means the 35 -6- LSB 5998YH (3) 91 ss/ko 6/ 50

H.F. 2206 same as defined in section 124.401. 1 4. A person who knowingly violates a provision of this 2 section is guilty of a simple misdemeanor. 3 Sec. 16. Section 321J.2, subsection 1, paragraph c, Code 4 2026, is amended to read as follows: 5 c. While Except as provided in section 321J.2C, any amount 6 of a controlled substance is present in the person, as measured 7 in the person’s blood or urine. 8 Sec. 17. NEW SECTION . 321J.2C Operating while under the 9 influence of marijuana. 10 1. A person shall not operate a motor vehicle in this state 11 while having fifty nanograms of tetrahydrocannabinol in the 12 person, as measured in the person’s blood. 13 2. A person who violates subsection 1 is guilty of a serious 14 misdemeanor, punishable as follows: 15 a. For a first offense, revocation of the person’s driver’s 16 license for a period of one hundred eighty days, except that if 17 the person refused to submit to chemical testing, the person’s 18 driver’s license shall be revoked for a period of one year. 19 b. For a second or subsequent offense, revocation of the 20 person’s driver’s license for a period of one year, except 21 that if the person refused to submit to chemical testing, the 22 person’s driver’s license shall be revoked for a period of two 23 years. 24 Sec. 18. Section 602.8105, Code 2026, is amended by adding 25 the following new subsection: 26 NEW SUBSECTION . 5. The clerk of the district court shall 27 collect the civil penalty assessed pursuant to section 124F.2, 28 subsection 2, paragraph “c” , subparagraph (1). 29 Sec. 19. NEW SECTION . 901C.4 Felony offenses related to 30 marijuana —— expungement. 31 1. In addition to the expungement provisions available 32 to a defendant convicted of a misdemeanor marijuana offense 33 under chapter 124, upon application of a defendant convicted 34 of a felony offense under chapter 124 in the county where the 35 -7- LSB 5998YH (3) 91 ss/ko 7/ 50

H.F. 2206 conviction occurred, related to the possession or transfer of 1 marijuana, the court shall enter an order expunging the record 2 of such a criminal case. 3 2. A person shall be granted an expungement of a record 4 under this section one time in the person’s lifetime. However, 5 the one application may request the expungement of records 6 relating to more than one nonviolent offense under this section 7 if the offenses arose from the same transaction or occurrence, 8 and the application contains the offenses to be expunged. 9 3. The expunged record under this section is a confidential 10 record exempt from public access under section 22.7 but shall 11 be made available by the clerk of the district court upon court 12 order. 13 4. Notwithstanding section 692.2, after receipt of 14 notice from the clerk of the district court that a record of 15 conviction has been expunged under subsection 1, the record 16 of conviction shall be removed from the criminal history data 17 files maintained by the department of public safety if such a 18 record was maintained in the criminal history data files. 19 5. The supreme court may prescribe rules governing the 20 procedures applicable to the expungement of a criminal case 21 under this section. 22 6. This section applies to a felony conviction that occurred 23 prior to January 1, 2027. 24 Sec. 20. REPEAL. Section 124.410, Code 2026, is repealed. 25 DIVISION II 26 RETAIL MARIJUANA 27 Sec. 21. NEW SECTION . 124F.4 Definitions. 28 For the purposes of this subchapter: 29 1. “Division” means the division of the department of 30 revenue responsible for the issuance of alcohol licenses. 31 2. “Immature plant” means a nonflowering marijuana plant 32 that is no taller than eight inches and no wider than eight 33 inches, is produced from a cutting, clipping, or seedling, and 34 is in a cultivating container. 35 -8- LSB 5998YH (3) 91 ss/ko 8/ 50

H.F. 2206 3. “License” means a license or registration issued pursuant 1 to this subchapter. 2 4. “Licensed premises” means the premises specified in an 3 application for a license under this subchapter, which are 4 owned or in possession of the licensee and within which the 5 licensee is authorized to cultivate, manufacture, distribute, 6 sell, or test retail marijuana and retail marijuana products in 7 accordance with this subchapter. 8 5. “Licensee” means a person licensed or registered pursuant 9 to this subchapter. 10 6. “Local jurisdiction” means a county. 11 7. “Local licensing authority” means, for any local 12 jurisdiction that has chosen to adopt a local licensing 13 requirement in addition to the state licensing requirements 14 of this subchapter, an authority designated by a municipal 15 or county ordinance, or resolution, or the governing body of 16 a municipality or county, or the board of commissioners of a 17 county if no such authority is designated. 18 8. “Location” means a particular parcel of land that may be 19 identified by an address or other descriptive means. 20 9. “Marijuana” means the same as defined in section 124.101. 21 10. “Marijuana accessories” means any equipment, products, 22 or materials of any kind which are used, intended for use, or 23 designed for use in planting, cultivating, growing, harvesting, 24 composting, manufacturing, compounding, converting, producing, 25 processing, preparing, testing, analyzing, packaging, 26 repackaging, storing, vaporizing, or containing marijuana, or 27 for ingesting, inhaling, or otherwise introducing marijuana 28 into the human body. 29 11. “Person” means a natural person, partnership, 30 association, company, corporation, limited liability company, 31 or organization; except that “person” does not include any 32 governmental organization. 33 12. “Retail marijuana” means all parts of the plant of the 34 genus Cannabis, whether growing or not, the seeds thereof; the 35 -9- LSB 5998YH (3) 91 ss/ko 9/ 50

H.F. 2206 resin extracted from any part of the plant; and every compound, 1 manufacture, salt, derivative, mixture, or preparation of the 2 plant, its seeds or resin, including marijuana concentrate. 3 “Retail marijuana” does not include industrial hemp, nor does 4 it include fiber produced from the stalks, oil or cake made 5 from the seeds of the plant, sterilized seeds of the plant 6 which are incapable of germination, or the weight of any other 7 ingredient combined with marijuana to prepare topical or oral 8 administrations, food, drink, or other product. 9 13. “Retail marijuana cultivation facility” means an entity 10 licensed to cultivate, prepare, package, and sell marijuana to 11 retail marijuana stores, to marijuana product manufacturing 12 facilities, and to other marijuana cultivation facilities, but 13 not to consumers. 14 14. “Retail marijuana establishment” means a retail 15 marijuana store, a retail marijuana cultivation facility, or a 16 retail marijuana products manufacturer. 17 15. “Retail marijuana products” means concentrated marijuana 18 products and marijuana products that are comprised of marijuana 19 and other ingredients and are intended for use or consumption, 20 such as but not limited to edible products, ointments, and 21 tinctures. 22 16. “Retail marijuana products manufacturer” means an entity 23 licensed to purchase marijuana; manufacture, prepare, and 24 package marijuana products; and sell marijuana and marijuana 25 products to other marijuana product manufacturing facilities 26 and to retail marijuana stores, but not to consumers. 27 17. “Retail marijuana store” means an entity licensed 28 to purchase marijuana from marijuana cultivation facilities 29 and sell marijuana and to purchase marijuana products from 30 retail marijuana product manufacturing facilities and to sell 31 marijuana and marijuana products to consumers. 32 18. “Retail marijuana transporter” means an entity or person 33 licensed to transport retail marijuana and retail marijuana 34 products from one retail marijuana establishment to another 35 -10- LSB 5998YH (3) 91 ss/ko 10/ 50

H.F. 2206 retail marijuana establishment and to temporarily store the 1 transported retail marijuana and retail marijuana products at 2 its licensed premises, but is not authorized to sell retail 3 marijuana or retail marijuana products under any circumstances. 4 Sec. 22. NEW SECTION . 124F.5 Applicability. 5 1. On or after July 1, 2027, an applicant may apply for 6 licensure of a retail marijuana establishment pursuant to this 7 subchapter. 8 2. a. Pursuant to subsection 1, an applicant shall complete 9 forms as provided by the division and shall pay the application 10 fee and the licensing fee. The division shall forward, within 11 seven days of the date of the application, one-half of the 12 application fee to the local jurisdiction unless the local 13 jurisdiction has prohibited the operation of retail marijuana 14 establishments. If the license is denied, the division shall 15 refund the licensing fee to the applicant. 16 b. The division shall act upon an application made pursuant 17 to subsection 1 no sooner than forty-five days and no later 18 than ninety days after the date of the application. The 19 division shall process applications in the order in which 20 completed applications are received by the division. 21 3. a. Any local jurisdiction may enact ordinances or 22 regulations governing the time, place, manner, and number of 23 retail marijuana establishments, which may include a local 24 licensing requirement, or may prohibit the operation of retail 25 marijuana establishments by ordinance or by a referred or 26 initiated measure. If a county acts through an initiated 27 measure, the proponents shall submit a petition signed by not 28 less than fifteen percent of the registered electors in the 29 county. 30 b. If a county prohibits the operation of retail marijuana 31 establishments, the county shall, upon receipt of a petition 32 signed by fifteen percent of the registered voters in the 33 county, submit to the voters of the county the question of 34 whether the operation of retail marijuana establishments should 35 -11- LSB 5998YH (3) 91 ss/ko 11/ 50

H.F. 2206 be allowed in the county at the next general election. 1 Sec. 23. NEW SECTION . 124F.6 Retail marijuana licensure. 2 1. The division shall develop and maintain a seed-to-sale 3 tracking system that tracks retail marijuana from either 4 seed or immature plant stage until the marijuana or retail 5 marijuana product is sold to a customer at a retail marijuana 6 establishment to ensure that no marijuana grown or processed 7 by a retail marijuana establishment is sold or otherwise 8 transferred except by a retail marijuana store. 9 2. The division shall adopt all rules necessary for the 10 implementation of this chapter. 11 3. Nothing in this subchapter shall be construed to be 12 a delegation to the division of the power to fix prices for 13 retail marijuana. 14 4. Nothing in this subchapter shall be construed to limit 15 a law enforcement agency’s ability to investigate unlawful 16 activity in relation to a retail marijuana establishment. A 17 law enforcement agency shall have the authority to conduct a 18 criminal history record check of a licensee and an employee of 19 a licensee during an investigation of unlawful activity related 20 to retail marijuana and retail marijuana products. 21 5. The division shall create a statewide licensure class 22 system for retail marijuana cultivation facilities. The 23 classifications may be based upon square footage of the 24 facility; lights, lumens, or wattage; canopy lighting; the 25 number of cultivating plants; a combination of the foregoing; 26 or other reasonable metrics. The division shall create a fee 27 structure for the licensure class system. 28 Sec. 24. NEW SECTION . 124F.7 State and local participation 29 in licensure. 30 1. When the division receives an application for an 31 initial license or a renewal of an existing license for 32 any retail marijuana establishment, the division shall 33 provide, within seven days of receipt of an application, 34 a copy of the application to the local jurisdiction in 35 -12- LSB 5998YH (3) 91 ss/ko 12/ 50

H.F. 2206 which the establishment is to be located unless the local 1 jurisdiction has prohibited the operation of retail marijuana 2 establishments. The local jurisdiction shall determine whether 3 the application complies with local restrictions relating 4 to time, place, manner, and the number of retail marijuana 5 establishments allowed. The local jurisdiction shall inform 6 the division whether the application complies with local 7 restrictions. 8 2. A local jurisdiction may impose a separate local 9 licensing requirement as a part of its restrictions relating 10 to time, place, manner, and the number of retail marijuana 11 establishments allowed. A local jurisdiction may decline 12 to impose any local licensing requirements, but a local 13 jurisdiction shall notify the division that it either approves 14 or denies each application received by the local jurisdiction. 15 3. If a local jurisdiction issues a local license for 16 a retail marijuana establishment, a local jurisdiction may 17 schedule a public hearing on the application. If the local 18 jurisdiction schedules a hearing, it shall post and publish 19 public notice of the hearing not less than ten days prior 20 to the hearing. The local jurisdiction shall give public 21 notice by posting a sign in a conspicuous place on the license 22 applicant’s premises for which a local license application 23 has been made and by publication in a newspaper of general 24 circulation in the county in which the applicant’s premises are 25 located. 26 4. If a local jurisdiction does not issue local licenses, 27 the local jurisdiction may give public notice of the state 28 license application by posting a sign in a conspicuous place 29 on the state license applicant’s premises for which a state 30 license application has been made and by publication in a 31 newspaper of general circulation in the county in which the 32 applicant’s premises are located. 33 5. Applications for a state license under this subchapter 34 must be made to the division on forms prepared and furnished 35 -13- LSB 5998YH (3) 91 ss/ko 13/ 50

H.F. 2206 by the division and must set forth such information as the 1 division may require to enable the division to determine 2 whether a state license should be granted. 3 6. The division shall deny a state license if the premises 4 on which the applicant proposes to conduct its business does 5 not meet the requirements of this subchapter. The division 6 may refuse or deny a license renewal, reinstatement, or 7 initial license issuance for good cause. For purposes of this 8 subsection, “good cause” means any of the following: 9 a. The licensee or applicant has violated, does not meet, 10 or has failed to comply with any of the terms, conditions, or 11 provisions of this subchapter, any rules promulgated pursuant 12 to this subchapter, or any supplemental local law, rules, or 13 regulations. 14 b. The licensee or applicant has failed to comply with any 15 special terms or conditions of the license pursuant to an order 16 of the division or local licensing authority. 17 c. The licensed premises have been operated in a manner that 18 adversely affects the public health or safety of the immediate 19 neighborhood in which the retail marijuana establishment is 20 located. 21 d. The licensed premises are located within two thousand 22 feet of real property comprising a school, child care facility, 23 or public park. 24 7. If the division denies a state license pursuant to 25 subsection 6, the applicant shall be entitled to a hearing 26 pursuant to section 17A.12 and judicial review pursuant to 27 section 17A.19. The division shall provide written notice of 28 the grounds for denial of the state license to the applicant 29 and to the local jurisdiction at least fifteen days prior to 30 the hearing. 31 8. The division shall give primary preference to applicants 32 for licensure who are currently licensed as a medical 33 cannabidiol manufacturer or medical cannabidiol dispensary 34 pursuant to chapter 124E. The division shall also prioritize 35 -14- LSB 5998YH (3) 91 ss/ko 14/ 50

H.F. 2206 applicants for licensure that are businesses that are 1 majority-owned by persons who are women, citizens or permanent 2 legal residents of Iowa, or disabled veterans. 3 9. The division shall issue licenses to businesses that 4 are majority-owned by persons who are racial minorities in a 5 proportion that meets or exceeds the percentage of persons in 6 this state who are racial minorities according to the most 7 recent federal decennial census. 8 Sec. 25. NEW SECTION . 124F.8 Establishment and owner 9 requirements. 10 1. An owner who is a natural person must have been either 11 of the following: 12 a. A resident of Iowa for at least one year prior to the 13 date of the application. 14 b. A United States citizen prior to the date of the 15 application. 16 2. A retail marijuana establishment may be composed of an 17 unlimited number of owners that have been residents of Iowa for 18 at least one year prior to the date of the application. 19 3. A retail marijuana establishment shall not interfere 20 with the creation of or participation in a labor organization, 21 as defined in section 216.2, by employees of the retail 22 marijuana establishment. 23 4. The division shall review the retail marijuana 24 establishment’s operating documents to ensure compliance with 25 this section. 26 Sec. 26. NEW SECTION . 124F.9 Retail marijuana establishment 27 licensure. 28 1. Local jurisdictions may adopt and enforce regulations 29 for retail marijuana establishments that are at least as 30 restrictive as the provisions of this subchapter and any rule 31 promulgated pursuant to this subchapter. 32 2. A retail marijuana establishment shall not operate 33 until the retail marijuana establishment is licensed by the 34 division pursuant to this subchapter and approved by the 35 -15- LSB 5998YH (3) 91 ss/ko 15/ 50

H.F. 2206 relevant local jurisdiction. If an application is denied by 1 the local licensing authority, the division shall revoke the 2 state license. In connection with a license, the applicant 3 shall provide a complete and accurate application as required 4 by the division. 5 3. A retail marijuana establishment shall notify the 6 division in writing of the name, address, and date of birth of 7 a new owner, officer, or manager before the new owner, officer, 8 or manager begins managing, owning, working, or otherwise 9 associating with the establishment. The owner, officer, 10 manager, or employee shall pass a fingerprint-based criminal 11 history record check as required by the division and shall 12 obtain the required identification prior to managing, owning, 13 working, or otherwise associating with the establishment. 14 The division shall not deny licensure to a retail marijuana 15 establishment on the basis that an owner, officer, manager, 16 or employee has been convicted of a crime other than a 17 violent crime, as defined in section 915.10, if the person has 18 completed any term of probation or parole imposed by the court. 19 4. Before granting a state license, the division may 20 consider, except when this subchapter specifically provides 21 otherwise, the requirements of this subchapter and any 22 rules promulgated pursuant to this subchapter, and all other 23 reasonable restrictions that are or may be placed upon a 24 licensee by the division or local licensing authority. 25 5. a. Each license issued under this subchapter is separate 26 and distinct. It is unlawful for a person to exercise any 27 of the privileges granted under a license other than the 28 license that the person holds or for a licensee to allow any 29 other person to exercise the privileges granted under the 30 licensee’s license. A separate license shall be required for 31 each specific business or business entity and each geographical 32 location. 33 b. At all times, a licensee shall possess and maintain 34 possession of the premises for which the license is issued 35 -16- LSB 5998YH (3) 91 ss/ko 16/ 50

H.F. 2206 through ownership, lease, rental, or other arrangement for 1 possession of the premises. 2 6. Each licensee shall manage the licensed premises 3 personally or employ a separate and distinct manager on 4 the premises and shall report the name of the manager to 5 the division and local licensing authority. The licensee 6 shall report any change in manager to the division and local 7 licensing authority within seven days after the change. 8 Sec. 27. NEW SECTION . 124F.10 License renewal. 9 1. Ninety days prior to the expiration date of an existing 10 license, the division shall notify a licensee of the expiration 11 date by first class mail at the licensee’s address of record 12 with the division. A licensee may apply for the renewal of 13 an existing license to the division not less than thirty days 14 prior to the date of expiration of the existing license. Upon 15 receipt of an application for renewal of an existing license 16 and any applicable fees, the division shall submit, within 17 seven days of the application, a copy of the application to 18 the local jurisdiction to determine whether the application 19 complies with all local restrictions on renewal of licenses. 20 The division shall not accept an application for renewal of a 21 license after the date of expiration, except as provided in 22 subsection 3. The division may extend the expiration date of 23 the license and accept a late application for renewal of a 24 license if the applicant has filed a timely renewal application 25 with the local licensing authority. The division or the local 26 licensing authority, in its discretion, and subject to the 27 requirements of this subsection and subsection 3 and based upon 28 reasonable grounds, may waive the thirty-day time requirements 29 set forth in this subsection. 30 2. The division may request additional fingerprints from a 31 licensee when there is a demonstrated investigative need. 32 3. a. Notwithstanding the provisions of subsection 1, 33 a licensee whose license has been expired for not more than 34 ninety days may file a late renewal application upon the 35 -17- LSB 5998YH (3) 91 ss/ko 17/ 50

H.F. 2206 payment of a nonrefundable late application fee of five hundred 1 dollars to the division. A licensee who files a late renewal 2 application and pays the requisite fees may continue to operate 3 until the division takes final action to approve or deny 4 the licensee’s late renewal application unless the division 5 summarily suspends the license pursuant to chapter 17A, this 6 subchapter, and rules adopted pursuant to this subchapter. 7 b. The division may administratively continue a license 8 and accept a later application for renewal of a license at the 9 discretion of the division. 10 Sec. 28. NEW SECTION . 124F.11 Classes of licenses. 11 For the purpose of regulating the cultivation, manufacture, 12 distribution, sale, and testing of retail marijuana and retail 13 marijuana products, the division in its discretion, upon 14 receipt of an application in the prescribed form, may issue and 15 grant to the applicant a license or registration in any of the 16 following classes, subject to the provisions and restrictions 17 provided by this subchapter: 18 1. Retail marijuana store license. 19 2. Retail marijuana cultivation facility license. 20 3. Retail marijuana products manufacturing license. 21 4. Occupational licenses and registrations for owners, 22 managers, operators, employees, contractors, and other support 23 staff employed by, working in, or having access to restricted 24 areas of the licensed premises, as determined by the division. 25 The division may take any action with respect to a registration 26 pursuant to this subchapter as it may with respect to a license 27 pursuant to this subchapter, in accordance with the procedures 28 established pursuant to this subchapter. 29 5. Retail marijuana transporter license. 30 Sec. 29. NEW SECTION . 124F.12 Retail marijuana store 31 license. 32 1. a. A retail marijuana store license shall be issued 33 by the division only to a person selling retail marijuana or 34 retail marijuana products pursuant to the terms and conditions 35 -18- LSB 5998YH (3) 91 ss/ko 18/ 50

H.F. 2206 of this subchapter. 1 b. A retail marijuana store shall not accept any retail 2 marijuana purchased from a retail marijuana cultivation 3 facility unless the retail marijuana store is provided with 4 evidence that any applicable excise tax due was paid. 5 2. Notwithstanding the provisions of this section, a 6 retail marijuana store licensee may also sell retail marijuana 7 products that are prepackaged and labeled as required by rules 8 of the division pursuant to section 124F.21. 9 3. a. A retail marijuana store shall not sell more than one 10 ounce of retail marijuana or its equivalent in retail marijuana 11 products, including retail marijuana concentrate, except for 12 nonedible, nonpsychoactive retail marijuana products, including 13 ointments, lotions, balms, and other nontransdermal topical 14 products to a person. 15 b. (1) Prior to initiating a sale, an employee of the 16 retail marijuana store making the sale shall verify that 17 the purchaser has a valid identification card showing the 18 purchaser is twenty-one years of age or older. If a person 19 under twenty-one years of age presents fraudulent proof of age, 20 any action relying on the fraudulent proof of age shall not be 21 grounds for the revocation or suspension of any license issued 22 under this subchapter. 23 (2) (a) If a retail marijuana store licensee or 24 employee has reasonable cause to believe that a person is 25 under twenty-one years of age and is exhibiting fraudulent 26 proof of age in an attempt to obtain any retail marijuana 27 or cannabis-infused product, the licensee or employee is 28 authorized to confiscate such fraudulent proof of age, if 29 possible, and shall, within seventy-two hours after the 30 confiscation, remit such fraudulent proof of age to a state 31 or local law enforcement agency. The failure to confiscate 32 such fraudulent proof of age or to remit such fraudulent proof 33 of age to a state or local law enforcement agency within 34 seventy-two hours after the confiscation shall not constitute a 35 -19- LSB 5998YH (3) 91 ss/ko 19/ 50