H.F. _____ DIVISION I 1 HEMP PRODUCTION 2 Section 1. Section 204A.2, Code 2026, is amended by adding 3 the following new subsections: 4 NEW SUBSECTION . 9A. “Raw hemp” means an unprocessed hemp 5 plant after harvested, including seeds, stalks, leaves, and 6 flowers, in the harvested plant’s natural state, and that 7 includes a naturally occurring cannabinoid. 8 NEW SUBSECTION . 9B. “Semisynthetic cannabinoid” means 9 a substance extracted or derived from raw hemp but that 10 is chemically altered to create a compound that may be 11 structurally similar to a naturally occurring cannabinoid, but 12 does not occur naturally. 13 NEW SUBSECTION . 9C. “Synthetic cannabinoid” means a 14 substance with a similar chemical structure and pharmacological 15 activity as a naturally occurring cannabinoid, but that is not 16 extracted or derived from raw hemp and is instead manufactured 17 by chemical or biochemical synthesis. 18 Sec. 2. NEW SECTION . 204A.2B Applicability. 19 This chapter does not apply to a synthetic cannabinoid or 20 semisynthetic cannabinoid. 21 Sec. 3. NEW SECTION . 204A.8A Hemp as an agricultural 22 commodity. 23 1. a. Subject to paragraph “b” , and except as otherwise 24 expressly provided in another statute in this or another 25 chapter, hemp shall be considered as an agricultural commodity 26 that may be produced, stored, transferred, transported, or 27 distributed in commercial channels. 28 b. In order to qualify as an agricultural commodity 29 described in subsection 1, hemp must derive from a hemp plant 30 that is produced, harvested, stored, transferred, transported, 31 or distributed in compliance with this chapter, including the 32 federal hemp law or any other applicable federal law. 33 2. Unless otherwise provided by the federal hemp law or any 34 other applicable law, all of the following shall apply: 35 -1- LSB 5972YC (5) 91 da/js 1/ 18

H.F. _____ a. The lawful status of a hemp flower shall not be 1 determined solely by the quantity possessed, stored, 2 transported, or transferred, if the hemp flower complies 3 with an acceptable hemp THC level as determined by testing 4 requirements provided in this chapter and expressly provided in 5 other state law or federal law. 6 b. When testing a hemp plant or raw hemp, compliance with an 7 acceptable hemp THC level as applicable shall be determined in 8 accordance with the federal and state law in effect at the time 9 that the hemp plant is produced. 10 3. Except as otherwise provided in federal law or expressly 11 provided in another state statute, a hemp plant or raw hemp 12 that complies with the requirements of this chapter shall not 13 be considered to be a controlled substance or drug solely due 14 to form, physical characteristics, method of production, method 15 of storage, or method of transport. 16 DIVISION II 17 HEMP PRODUCTS GENERALLY 18 Sec. 4. NEW SECTION . 204B.1 Findings. 19 1. The general assembly finds and declares all of the 20 following: 21 a. Raw hemp lawfully produced under the Iowa hemp Act as 22 provided in chapter 204A, including the federal hemp law, is an 23 agricultural commodity. 24 b. Hemp is not an inherently intoxicating substance and not 25 regulated as a controlled substance, drug, or tobacco product 26 absent express statutory authorization. 27 2. The general assembly finds and declares that it is 28 necessary to do all of the following: 29 a. State permissible forms of hemp products. 30 b. Distinguish between naturally occurring cannabinoids from 31 synthetically derived substances or semisynthetically derived 32 substances. 33 c. Ensure uniform statewide regulation of hemp products. 34 d. Align regulatory enforcement of hemp products while 35 -2- LSB 5972YC (5) 91 da/js 2/ 18

H.F. _____ protecting public safety, agricultural producers, and lawful 1 commerce. 2 Sec. 5. NEW SECTION . 204B.2 Definitions. 3 As used in this chapter, unless the context otherwise 4 requires: 5 1. “Acceptable hemp THC level” means the same as defined in 6 7 C.F.R. §990.1. 7 2. “Advertise” means to present a commercial message in any 8 medium, including but not limited to print, radio, television, 9 sign, display, label, tag, or articulation. 10 3. “Agricultural commodity” means any unprocessed good, 11 including animals, agricultural crops, and forestry products 12 grown, raised, produced, or fed in Iowa for sale in commercial 13 channels as regulated under this subtitle. 14 4. “Cannabinoid” means a chemical compound that is unique 15 to and derived from cannabis. 16 5. “Cannabis” means the same as defined in 7 C.F.R. §990.1. 17 6. “Consumable hemp product” means the same as defined in 18 section 204C.1. 19 7. “Controlled substance” means the same as defined in 20 section 124.101. 21 8. “Department” means the department of agriculture and land 22 stewardship. 23 9. “Drug” means the same as defined in section 124.101. 24 10. “Federal hemp law” means the same as defined in section 25 204A.2. 26 11. “Hemp” means the same as defined in 7 C.F.R. §990.1. 27 12. “Hemp plant” means the Cannabis sativa L. plant, 28 including all derivatives, flowers, extracts, cannabinoids, 29 isomers, acids, and salts. 30 13. a. “Hemp product” means an item derived from or made by 31 processing hemp, including raw hemp or parts of raw hemp. 32 b. “Hemp product” does not include any of the following: 33 (1) (a) An item or part of an item that exceeds the maximum 34 total tetrahydrocannabinol concentration allowed for a hemp 35 -3- LSB 5972YC (5) 91 da/js 3/ 18

H.F. _____ product under section 124.204, subsection 7. 1 (b) An item or part of an item that is metabolized or 2 is otherwise subject to a biotransformative process when 3 introduced into the human body and that exceeds the maximum 4 total tetrahydrocannabinol concentration allowed for a 5 consumable hemp product. 6 (2) Hemp seed that is capable of germination. 7 14. “Local governmental entity” means any political 8 subdivision, including a county, a city, or any special purpose 9 district. 10 15. “Local legislation” means any ordinance, motion, 11 resolution, amendment, regulation, or rule adopted by a local 12 governmental entity. 13 16. “Naturally occurring cannabinoid” means a cannabinoid 14 present in hemp in its natural state and not created, 15 concentrated, or materially increased through chemical 16 conversion, acid treatment, solvent-based processing, or 17 synthetic alteration. 18 17. “On-farm minimally processed hemp product” means a hemp 19 product that is all of the following: 20 a. Derived from raw hemp originating from the harvest of a 21 hemp plant produced on the USDA licensee’s plot that is part of 22 a farm in which the USDA licensee holds a legal interest. 23 b. In compliance with the requirements of section 204B.7. 24 18. “Raw hemp” means the same as defined in section 204A.2. 25 19. “Semisynthetic cannabinoid” means the same as defined 26 in section 204A.2. 27 20. “Synthetic cannabinoid” means the same as defined in 28 section 204A.2. 29 21. “USDA licensee” means the same as defined in section 30 204A.2. 31 Sec. 6. NEW SECTION . 204B.3 Applicability. 32 This chapter does not apply to a synthetic cannabinoid or 33 semisynthetic cannabinoid. 34 Sec. 7. NEW SECTION . 204B.4 Rulemaking. 35 -4- LSB 5972YC (5) 91 da/js 4/ 18

H.F. _____ 1. The department of agriculture and land stewardship shall 1 adopt rules pursuant to chapter 17A as necessary to administer 2 and enforce this chapter. The department shall cooperate with 3 the department of inspections, appeals, and licensing and the 4 department of public safety in adopting the rules. 5 2. The rules described in subsection 1 may further define 6 the terms defined in section 204B.2 or define terms used in 7 this chapter that are not defined in section 204B.2. 8 Sec. 8. NEW SECTION . 204B.5 Hemp —— testing requirements 9 and certificate of analysis. 10 For purposes of this chapter, requirements for testing hemp 11 and the issuance of a certificate of analysis for hemp are 12 governed by chapter 204A. 13 Sec. 9. NEW SECTION . 204B.6 Hemp as an article. 14 1. Except as otherwise expressly provided in another 15 chapter, a hemp product shall be considered as an article 16 that may be processed, stored, transferred, transported, or 17 distributed in commercial channels as provided in chapter 189. 18 2. A hemp product that complies with the requirements 19 of this chapter or chapter 204C shall not be considered 20 to be a controlled substance solely due to form, physical 21 characteristics, method of production, method of storage, or 22 method of transport. 23 Sec. 10. NEW SECTION . 204B.7 On-farm minimally processed 24 product. 25 1. A USDA licensee acting in compliance with chapter 204A 26 may elect to produce, process, market, transfer, transport, 27 or distribute an on-farm minimally processed hemp product for 28 consumption, if all of the following apply: 29 a. The hemp product is not a drug. 30 b. The hemp product complies with packaging and labeling 31 requirements, that shall be established by rules adopted by the 32 department based on requirements in chapter 190. 33 c. The hemp product’s use is limited to ingestion or 34 absorption, and not inhalation. 35 -5- LSB 5972YC (5) 91 da/js 5/ 18

H.F. _____ d. The hemp product’s maximum total tetrahydrocannabinol 1 concentration is at a level established by rule adopted 2 by the department but must be less than the maximum total 3 tetrahydrocannabinol concentration allowed for a consumable 4 hemp product. 5 2. A hemp product that is intended or advertised for 6 use as described in subsection 1 that does not comply with 7 the requirements of that subsection shall be deemed to be a 8 consumable hemp product regulated under chapter 204C. 9 Sec. 11. NEW SECTION . 204B.8 Civil penalty. 10 1. A person who violates a provision of this chapter is 11 subject to a civil penalty of not less than five hundred 12 dollars and not more than two thousand five hundred dollars. 13 The department shall impose, assess, and collect the civil 14 penalty. Each day that a continuing violation occurs may be 15 considered a separate offense. 16 2. All civil penalties collected under this section shall be 17 deposited into the general fund of the state. 18 Sec. 12. NEW SECTION . 204B.10 On-farm minimally processed 19 hemp product —— persons under legal age —— criminal penalty. 20 1. A person shall not sell, give, or otherwise distribute 21 an on-farm minimally processed hemp product to a person under 22 twenty-one years of age. 23 2. A person who violates subsection 1 is guilty of a simple 24 misdemeanor. 25 Sec. 13. NEW SECTION . 204B.11 On-farm minimally processed 26 hemp product —— persons under legal age —— scheduled violation. 27 1. A person under twenty-one years of age shall not consume, 28 possess, purchase, or attempt to purchase an on-farm minimally 29 processed hemp product. 30 2. A person who violates subsection 1 shall be subject to a 31 scheduled violation in the form of a civil penalty pursuant to 32 section 805.8C, subsection 3, paragraph “d” . 33 Sec. 14. NEW SECTION . 204.12 Government action —— 34 regulation. 35 -6- LSB 5972YC (5) 91 da/js 6/ 18

H.F. _____ 1. Except as expressly otherwise provided by statute, 1 a state agency shall not act to regulate the production, 2 processing, marketing, transfer, or distribution of a hemp 3 product that complies with the requirements of this chapter and 4 chapter 204C. 5 2. Except as expressly otherwise provided by statute, the 6 provisions of this chapter and rules adopted by the department 7 pursuant to this chapter shall preempt local legislation 8 adopted by a local governmental entity regulating the 9 production, processing, marketing, transfer, or distribution of 10 a hemp product. Any regulation described in this subsection is 11 void and unenforceable. 12 Sec. 15. NEW SECTION . 204B.13 Statutory construction. 13 1. This chapter shall be construed together with chapters 14 204A and 204C. If there is a conflict between chapter 204A and 15 either this chapter or chapter 204C, the provisions of chapter 16 204A shall prevail. 17 2. This chapter and chapter 204C shall not be construed or 18 applied to be any of the following: 19 a. Less stringent than required under the federal hemp law. 20 b. In conflict with applicable federal law and related 21 regulation. 22 c. To affect a regulation in effect or that may become 23 effective that applies to any of the following: 24 (1) Other articles under this subtitle. 25 (2) Product development, product manufacturing, consumer 26 safety, or public health so long as the regulation is 27 consistent with other applicable federal and state law. 28 (3) Medical cannabidiol pursuant to chapter 124E. 29 3. This chapter and chapter 204C shall not be construed 30 or applied to infringe upon the ability of the department of 31 public safety or a local law enforcement agency to obtain a 32 search warrant issued by a court, or enter onto any premises in 33 a manner consistent with the laws of this state and the United 34 States, including Article I, section 8, of the Constitution of 35 -7- LSB 5972YC (5) 91 da/js 7/ 18

H.F. _____ the State of Iowa, or the fourth amendment to the Constitution 1 of the United States. 2 DIVISION III 3 CONSUMABLE HEMP PRODUCTS 4 Sec. 16. Section 204.2, subsection 1, Code 2026, is amended 5 to read as follows: 6 1. “Advertise” means to present a commercial message in any 7 medium, including but not limited to print, radio, television, 8 sign, display, label, tag, or articulation the same as defined 9 in section 204B.2 . 10 Sec. 17. Section 204.2, subsection 2, paragraph c, 11 subparagraph (1), subparagraph division (a), Code 2026, is 12 amended to read as follows: 13 (a) Designed by the processor , including the manufacturer, 14 to be introduced into the human body. 15 Sec. 18. Section 204.2, subsection 2, paragraph d, 16 subparagraph (2), Code 2026, is amended to read as follows: 17 (2) Hemp processed or otherwise manufactured , marketed, 18 sold, or distributed as food, a food additive, a dietary 19 supplement, or a drug. 20 Sec. 19. Section 204.2, subsection 2, paragraph e, Code 21 2026, is amended to read as follows: 22 e. “Consumable hemp product” does not include a any of the 23 following: 24 (1) A hemp product if the intended use of the hemp 25 product is introduction into the human body by any method of 26 inhalation, as prohibited under section 204.14A . 27 (2) An on-farm minimally processed hemp product as provided 28 in section 204B.7. 29 Sec. 20. Section 204.2, subsection 7, Code 2026, is amended 30 to read as follows: 31 7. “Federal hemp law” means that part of Tit. X of the 32 Agriculture Improvement Act of 2018 , Pub. L. No. 115-334 , that 33 authorizes hemp production according to a state plan approved 34 by the United States department of agriculture, as provided in 35 -8- LSB 5972YC (5) 91 da/js 8/ 18

H.F. _____ §10113 of that Act , amending the Agricultural Marketing Act of 1 1946 , 7 U.S.C. §1621 et seq. , including by adding §297A through 2 297E the same as defined in section 204A.2 . 3 Sec. 21. Section 204.2, subsection 9, Code 2026, is amended 4 by striking the subsection and inserting in lieu thereof the 5 following: 6 9. “Hemp product” means the same as defined in section 7 204B.2. 8 Sec. 22. Section 204.2, subsection 10, Code 2026, is amended 9 by striking the subsection. 10 Sec. 23. NEW SECTION . 204.4 Rules. 11 The department of health and human services shall adopt 12 rules pursuant to chapter 17A to administer this chapter. 13 The department shall adopt the rules in cooperation with 14 the department of agriculture and land stewardship and the 15 department of public safety. 16 Sec. 24. Section 204.7, subsection 1, paragraph a, Code 17 2026, is amended to read as follows: 18 a. The consumable hemp product is manufactured processed in 19 this state in compliance with this chapter . 20 Sec. 25. Section 204.7, subsections 3, 4, 5, 6, and 7, Code 21 2026, are amended to read as follows: 22 3. a. A person manufacturing processing a consumable 23 hemp product in this state shall register with the department 24 of health and human services on a form prescribed by the 25 department of health and human services by rule. 26 b. The department shall not prescribe a registration form 27 for a USDA licensee who sells an on-farm minimally processed 28 hemp product in conformation with section 204B.7. 29 c. The department of health and human services may impose a 30 fee, established by the department of health and human services 31 by rule, on a registrant not to exceed the cost of processing 32 the registration. 33 d. The department of health and human services shall 34 adopt rules for the revocation of a registration issued to a 35 -9- LSB 5972YC (5) 91 da/js 9/ 18

H.F. _____ manufacturer processor who manufactures processes a consumable 1 hemp product not in compliance with this chapter . 2 4. a. A person selling a consumable hemp product in this 3 state shall register with the department of health and human 4 services on a form prescribed by the department of health and 5 human services by rule and shall keep on the premises of the 6 person’s business a copy of the certificate of analysis issued 7 pursuant to section 204.8 204B.5 for the hemp contained in the 8 consumable hemp products sold by the person. 9 b. The department shall not prescribe a registration form 10 for a USDA licensee who sells an on-farm minimally processed 11 hemp product in conformation with section 204B.7. 12 c. The department of health and human services may impose a 13 fee, established by the department of health and human services 14 by rule, on a registrant not to exceed the cost of processing 15 the registration. 16 d. The department of health and human services shall adopt 17 rules for the revocation of a registration issued to a person 18 who sells a consumable hemp product not in compliance with this 19 section . 20 5. Except as otherwise provided in this section , a political 21 subdivision of the state shall not adopt any ordinance, rule, 22 or regulation regarding the manufacture, sale, or consumption 23 of a consumable hemp product. 24 6. 5. A consumable hemp product manufactured processed 25 in another jurisdiction pursuant to a state or tribal plan 26 approved by the United States department of agriculture 27 pursuant to the federal hemp law may be imported for use by a 28 consumer or sale by a retailer to a consumer if the state has 29 substantially similar testing requirements as those provided 30 in section 204.8 204B.5 . 31 7. 6. A consumable hemp product manufactured, sold, or 32 consumed in compliance with this section is not a controlled 33 substance under chapter 124 or 453B regardless of whether the 34 consumable hemp product has been approved by the United States 35 -10- LSB 5972YC (5) 91 da/js 10/ 18

H.F. _____ food and drug administration. 1 Sec. 26. Section 204.14A, subsection 1, unnumbered 2 paragraph 1, Code 2026, is amended to read as follows: 3 A person shall not possess, use, manufacture process , 4 market, transport, deliver, or distribute harvested hemp or a 5 hemp product if the intended use of the harvested hemp or hemp 6 product is introduction into the body of a human by any method 7 of inhalation, including any of the following: 8 Sec. 27. Section 204.14A, subsection 3, Code 2026, is 9 amended to read as follows: 10 3. A person required to be registered to manufacture process 11 or sell a consumable hemp product under section 204.7 shall not 12 manufacture, produce, distribute, market, or sell a synthetic 13 consumable hemp product , as defined by rules adopted by the 14 department of health and human services or a semisynthetic hemp 15 product . 16 Sec. 28. Section 204.15A, subsection 1, unnumbered 17 paragraph 1, Code 2026, is amended to read as follows: 18 The department of health and human services may order the 19 confiscation and disposal of a consumable hemp product based 20 on any of the following: 21 Sec. 29. Section 204.15A, subsection 1, paragraph c, Code 22 2026, is amended to read as follows: 23 c. It is a consumable hemp product manufactured processed , 24 sold, or distributed by a person who is not registered with 25 the department of health and human services as is required in 26 section 204.7 . 27 Sec. 30. Section 204.17, subsection 1, paragraphs b and c, 28 Code 2026, are amended to read as follows: 29 b. Other laws of this state, including any administrative 30 rules, relating to product development, product manufacturing 31 processing , consumer safety, or public health so long as the 32 state law is compatible with applicable federal law. 33 c. Local law relating to product development, product 34 manufacturing processing , consumer safety, or public health so 35 -11- LSB 5972YC (5) 91 da/js 11/ 18

H.F. _____ long as the local law is consistent with federal and state law, 1 except as provided in section 204.7 . 2 Sec. 31. Section 204.17, Code 2026, is amended by striking 3 the section and inserting in lieu thereof the following: 4 204.17 Statutory construction. 5 This chapter shall be construed as provided in section 6 204B.12. 7 Sec. 32. REPEAL. Section 204.8, Code 2026, is repealed. 8 Sec. 33. CODE EDITOR DIRECTIVE. 9 1. The Code editor is directed to make the following 10 transfers: 11 a. Section 204.2 to section 204C.1. 12 b. Section 204.4 to section 204C.2. 13 c. Section 204.7 to section 204C.3. 14 d. Section 204.12 to section 204C.5. 15 e. Section 204.14A to section 204B.9. 16 f. Section 204.14B to section 204C.7. 17 g. Section 204.14C to section 204C.8. 18 h. Section 204.14D to section 204C.9. 19 i. Section 204.14E to section 204C.10. 20 j. Section 204.14F to section 204C.11. 21 k. Section 204.15A to section 204C.12. 22 l. Section 204.17 to section 204C.15. 23 2. The Code editor shall correct internal references in the 24 Code and in any enacted legislation as necessary due to the 25 enactment of this section. 26 DIVISION IV 27 CORRESPONDING CHANGES 28 Sec. 34. Section 80.5, subsection 7, paragraph b, Code 2026, 29 is amended to read as follows: 30 b. Notwithstanding paragraph “a” , the department is not 31 required to provide such assistance if the marijuana plants are 32 hemp produced in accordance with the provisions of chapter 204 33 204A . 34 Sec. 35. Section 124.204, subsection 7, paragraph b, Code 35 -12- LSB 5972YC (5) 91 da/js 12/ 18

H.F. _____ 2026, is amended to read as follows: 1 b. A hemp product as provided in chapter 204 chapters 204B 2 and 204C with a maximum tetrahydrocannabinol concentration, 3 inclusive of any isomers, derivatives, and analogs, whether 4 naturally occurring or synthesized, that does not exceed 5 three-tenths of one percent on a dry weight basis. 6 Sec. 36. Section 124.401, subsection 6, paragraph c, Code 7 2026, is amended to read as follows: 8 c. A hemp product as provided in chapter 204 chapters 204B 9 and 204C . 10 Sec. 37. Section 453B.17, subsection 3, Code 2026, is 11 amended to read as follows: 12 3. A hemp product as provided in chapter 204 chapters 204B 13 and 204C . 14 Sec. 38. Section 805.8C, subsection 3, paragraph d, 15 subparagraph (1), unnumbered paragraph 1, Code 2026, is amended 16 to read as follows: 17 For violations a violation of section 204.14E 204B.11 or 18 204C.10 , the scheduled fine is as follows: 19 Sec. 39. Section 805.10, subsection 1, paragraph e, Code 20 2026, is amended to read as follows: 21 e. When a violation charged involves the consumption, 22 possession, purchase, or attempt to purchase of a consumable 23 hemp product as provided in section 204.14E 204C.10 , for which 24 there is a community service sentence. 25 DIVISION V 26 EFFECTIVE DATE 27 Sec. 40. EFFECTIVE DATE. This Act, being deemed of 28 immediate importance, takes effect upon enactment. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 BACKGROUND —— CANNABIS. Current federal law describes 33 hemp as a species of cannabis (sativa L.) having a maximum 34 concentration of delta-9 tetrahydrocannabinol (THC) that does 35 -13- LSB 5972YC (5) 91 da/js 13/ 18

H.F. _____ not exceed 0.3 percent on a dry weight basis (7 C.F.R. §990.1 1 and Code section 204A.2, citing to Code section 124.204(7)). 2 A cannabis plant exceeding that concentration is no longer 3 classified as hemp and is regulated as a controlled substance 4 under Code chapters 124 and 453B (Code section 204A.4). The 5 applicable criminal penalty for an offense under Code chapters 6 124 and 453B ranges from imprisonment in a county jail for not 7 more than six months or a fine of not more than $1,000 to 50 8 years imprisonment and a fine of not more than $1 million (see 9 Code sections 124.401 and 453B.12). 10 BACKGROUND —— HEMP PRODUCTION. Code chapter 204A is 11 codified as part of Title V, subtitle 4, which provides for 12 the regulation of agricultural commodities and products by 13 the department of agriculture and land stewardship (DALS). 14 The Code chapter recognizes the regulation of hemp production 15 and transportation under a program administered by the United 16 States department of agriculture (USDA). A person producing 17 a hemp plant on a lot as regulated by USDA is referred to as a 18 USDA licensee (Code section 204A.2). One federal requirement 19 provides that a person who delivers or is delivered hemp 20 must possess a certificate of analysis (COA) prepared by an 21 independent laboratory (Code section 204A.6). A COA verifies 22 that the hemp or hemp product complies with THC potency levels 23 and the presence of any contaminants. 24 BACKGROUND —— CONSUMABLE HEMP PRODUCTS. Code chapter 25 204 regulates the manufacture and distribution (e.g., sale) 26 of hemp products, which must comply with the maximum total 27 THC concentration limit (Code sections 124.7 and 204.2(9)). 28 This includes a consumable hemp product. A hemp product is 29 deemed to be a consumable hemp product if it is designed to be 30 introduced into the human body, is advertised as an item to 31 be introduced into the human body, or is distributed (e.g., 32 offered for sale) to be introduced into the human body (Code 33 section 204.2(2)). A consumable hemp product may be digested, 34 such as food, internally absorbed, or absorbed through the 35 -14- LSB 5972YC (5) 91 da/js 14/ 18

H.F. _____ skin. Finally, the consumable hemp product must meet a maximum 1 quantity limit not to exceed 4 milligrams per serving and 10 2 milligrams per container measured on a dry weight basis. A 3 person is prohibited from selling a hemp product that may be 4 inhaled (Code section 204.14A). 5 BACKGROUND —— CONSUMABLE HEMP PRODUCTS REGULATION. A 6 consumable hemp product is regulated by the department of 7 health and human services (HHS), which provides for the 8 registration of persons engaged in the product’s manufacture 9 and retail sale and provides for product labeling requirements 10 (Code section 204.7 and 641 IAC ch. 156). A person engaged 11 in the retail sale of a consumable hemp product without being 12 registered with HHS is subject to a civil penalty of not more 13 than $10,000 (Code section 204.14B) and commits a serious 14 misdemeanor (Code section 204.14C). A serious misdemeanor is 15 punishable by confinement for no more than one year and a fine 16 of at least $430 but not more than $2,560. 17 BACKGROUND —— CHANGES IN FEDERAL LAW. Congress enacted Pub. 18 L. No. 119-37, Division B, which revised provisions regulating 19 hemp first enacted in the federal Agricultural Improvement Act 20 of 2018. The new federal law changes the standard of a maximum 21 0.3 percent delta-9 THC on a dry weight basis to a total THC 22 standard that includes delta-9 THC, tetrahydrocannabinolic 23 acid (THCA), delta-8 THC, and all other tetrahydrocannabinols. 24 The new federal law excludes from the definition of “hemp” a 25 cannabinoid that is not naturally produced by the cannabis 26 plant. For a hemp product, the per-container limit cannot 27 exceed 0.4 milligrams of total THC. The effective date of the 28 new federal law is November 12, 2026. 29 BILL’S PROVISIONS —— ORGANIZATION. The bill includes three 30 Code chapters regulating hemp and hemp products. The bill 31 amends Code chapter 204A by recognizing the production and 32 transportation of raw hemp under federal license (a hemp plant 33 produced and harvested and raw hemp stored and transported by a 34 USDA licensee). The bill creates new Code chapter 204B, which 35 -15- LSB 5972YC (5) 91 da/js 15/ 18

H.F. _____ provides for the general regulation of a hemp product by DALS 1 as an article under Code chapter 189. The bill amends Code 2 chapter 204 by providing that regulation by HHS is limited to a 3 consumer hemp product. The provisions in Code chapter 204 are 4 transferred to Code chapter 204C. 5 BILL’S PROVISIONS —— CHANGES IN FEDERAL LAW (CODE CHAPTER 6 204A, NEW CODE CHAPTER 204B, AND TRANSFERRED CODE CHAPTER 7 204C). The bill does not refer to changes in federal law. 8 BILL’S PROVISIONS —— HEMP (CODE CHAPTER 204A). The bill 9 specifically excludes from the definition of hemp a synthetic 10 cannabinoid (not derived from a raw naturally occurring 11 cannabinoid) and a semisynthetic cannabinoid (extracted or 12 derived from raw hemp but chemically altered). The bill 13 provides that the lawful status of a hemp flower cannot 14 be determined solely by the quantity possessed, stored, 15 transported, or transferred, if the hemp flower complies with 16 an acceptable hemp THC level. The bill also provides that when 17 testing a hemp plant or raw hemp, compliance with an acceptable 18 hemp THC level as applicable is determined in accordance with 19 the federal and state law in effect at the time that the hemp 20 plant is produced. 21 BILL’S PROVISIONS —— HEMP PRODUCTS GENERALLY. The bill 22 provides that the provisions in new Code chapter 204B do not 23 apply to a synthetic cannabinoid or semisynthetic cannabinoid. 24 The bill provides that a hemp product is considered to be 25 an article that may be processed, stored, transferred, 26 transported, or distributed in commercial channels as provided 27 in Code chapter 189. Current law recognizes that same status 28 for hemp and hemp products (Code section 189.1). 29 The bill provides that a USDA licensee acting in compliance 30 with new Code chapter 204B may elect to produce, process, 31 market, transfer, transport, or distribute an on-farm minimally 32 processed hemp product, subject to a number of conditions: (1) 33 the hemp product cannot be a drug, (2) the hemp product must 34 comply with packaging and labeling requirements established by 35 -16- LSB 5972YC (5) 91 da/js 16/ 18

H.F. _____ DALS, (3) the hemp product must have a use limited to ingestion 1 or absorption, and (4) the hemp product must have a total THC 2 concentration established by DALS by rule that is less than the 3 maximum allowed for a consumable hemp product. The bill does 4 not specify a specific milligrams per serving or per container 5 limit. 6 A person who violates a provision of new Code chapter 204B is 7 subject to a civil penalty of not less than $500 and not more 8 than $2,500. A person who distributes an on-farm minimally 9 processed hemp product to a person under 21 years of age is 10 guilty of a simple misdemeanor. A simple misdemeanor is 11 punishable by confinement for no more than 30 days and a fine 12 of at least $105 but not more than $855. An underage person who 13 consumes an on-farm minimally processed hemp product is subject 14 to a scheduled fine ranging from $70 to $325. 15 The bill provides that a state agency cannot act to 16 regulate the production, processing, marketing, transfer, 17 or distribution of a hemp product that complies with the 18 requirements of new Code chapter 204B and transferred Code 19 chapter 204C. The provisions of new Code chapter 204B and 20 transferred Code chapter 204C preempt local legislation adopted 21 by a local governmental entity regulating the production, 22 processing, marketing, transfer, or distribution of a hemp 23 product. 24 The bill provides that new Code chapter 204B and transferred 25 Code chapter 204C are subject to a number of provisions 26 governing statutory construction. The bill provides that 27 provisions cannot be (1) less stringent than required under the 28 federal hemp law; (2) read in conflict with applicable federal 29 law; (3) affect a regulation in effect or that may become 30 effective that applies to other articles generally, product 31 development, product manufacturing, consumer safety, or public 32 health so long as the regulation is consistent with other 33 applicable federal and state law, and (4) medical cannabidiol 34 pursuant to chapter 124E. The provisions cannot be construed 35 -17- LSB 5972YC (5) 91 da/js 17/ 18

H.F. _____ to infringe upon the ability of the department of public safety 1 or a local law enforcement agency to conduct lawful searches. 2 BILL’S PROVISIONS —— CONSUMABLE HEMP PRODUCTS (TRANSFERRED 3 CODE CHAPTER 204C). The bill amends a number of provisions 4 in Code chapter 204 that are transferred to Code chapter 5 204B or 204C. The bill changes the term “manufacturing” to 6 “processing”. The bill provides that an on-farm minimally 7 processed hemp product is not subject to registration by HHS. 8 BILL’S PROVISIONS —— CORRESPONDING CHANGES. The bill makes 9 corresponding changes to provisions in other Code chapters. 10 BILL’S PROVISIONS —— EFFECTIVE DATE. The bill takes effect 11 upon enactment. 12 -18- LSB 5972YC (5) 91 da/js 18/ 18