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House Study Bill 242 - IntroducedA Bill ForAn Act 1relating to the medical cannabidiol program including
2medical cannabidiol dispensaries and manufacturers, income
3tax deductions, and sales and use tax, and including
4retroactive applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2MEDICAL CANNABIDIOL PROGRAM
3 Section 1. Section 124E.2, subsection 10, Code 2023, is
4amended by striking the subsection and inserting in lieu
5thereof the following:
610. “Medical cannabidiol” means any species of the genus
7cannabis plant, or any mixture or preparation thereof,
8including whole plant extracts and resins, that is delivered
9in any of the following forms:
10a. Oral forms, including but not limited to:
11(1) Tablets.
12(2) Capsules.
13(3) Liquids.
14(4) Tinctures.
15(5) Sublingual forms.
16b. Topical forms, including but not limited to:
17(1) Gels.
18(2) Ointments, creams, or lotions.
19(3) Transdermal patches.
20c. Inhaled forms, limited to:
21(1) Nebulizable inhaled forms.
22(2) Vaporizable dried raw cannabis.
23(3) Other vaporizable forms of cannabis.
24 Sec. 2. Section 124E.8, subsection 1, paragraph a, Code
252023, is amended to read as follows:
26a. The department shall issue a request for proposals accept
27applications to select and license by April 1, 2018, up to
28five ten medical cannabidiol dispensaries to dispense medical
29cannabidiol within this state consistent with the provisions
30of this chapter. The department shall license new medical
31cannabidiol dispensaries or relicense the existing medical
32cannabidiol dispensaries by December 1 of each year.
33 Sec. 3. Section 124E.8, subsection 2, Code 2023, is amended
34by striking the subsection.
35 Sec. 4. Section 124E.8, Code 2023, is amended by adding the
-1-1following new subsection:
2 NEW SUBSECTION. 3A. The department shall not issue a
3license for a medical cannabidiol dispensary to be located in a
4county with a medical cannabidiol dispensary that was licensed
5prior to January 1, 2023.
6 Sec. 5. Section 124E.9, subsection 1, Code 2023, is amended
7to read as follows:
81. a. The medical cannabidiol dispensaries shall be located
9based on geographical need throughout the state to improve
10patient access.
11b. A medical cannabidiol dispensary may dispense medical
12cannabidiol pursuant to the provisions of this chapter but
13shall not dispense any medical cannabidiol in a form or
14quantity other than the form or quantity allowed by the
15department pursuant to rule.
16 Sec. 6. MEDICAL CANNABIDIOL DISPENSARY LICENSES — CURRENT
17LICENSEES.
181. The department of health and human services shall accept
19applications for new medical cannabidiol dispensary licenses
20from current licensees between July 1, 2023, and October 1,
212023.
222. Notwithstanding section 124E.8, subsection 3, in
23evaluating an application pursuant to this section, the
24department shall consider only the security, physical layout,
25and plan for technology at the proposed location.
263. A licensee submitting an application pursuant to
27this section may hold a maximum of four medical cannabidiol
28dispensary licenses, including the licensee’s current license.
29DIVISION II
30MEDICAL CANNABIDIOL — INCOME TAXES
31 Sec. 7. Section 422.7, Code 2023, is amended by adding the
32following new subsection:
33 NEW SUBSECTION. 44. Subtract, to the extent included,
34the amount of business expense for a medical cannabidiol
35manufacturer or medical cannabidiol dispensary licensed
-2-1pursuant to chapter 124E without regard to section 280E of the
2Internal Revenue Code.
3 Sec. 8. Section 422.35, Code 2023, is amended by adding the
4following new subsection:
5 NEW SUBSECTION. 15. Subtract, to the extent included,
6the amount of business expense for a medical cannabidiol
7manufacturer or medical cannabidiol dispensary licensed
8pursuant to chapter 124E without regard to section 280E of the
9Internal Revenue Code.
10 Sec. 9. RETROACTIVE APPLICABILITY. This division of this
11Act applies retroactively to January 1, 2023, for tax years
12beginning on or after that date.
13DIVISION III
14MEDICAL CANNABIDIOL — SALES AND USE TAX
15 Sec. 10. Section 423.3, Code 2023, is amended by adding the
16following new subsection:
17 NEW SUBSECTION. 110. The sales price of the sale of
18a medical cannabidiol product by a medical cannabidiol
19manufacturer or a medical cannabidiol dispensary pursuant to
20chapter 124E.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24This bill relates to the medical cannabidiol program and is
25organized in divisions.
26DIVISION I — MEDICAL CANNABIDIOL PROGRAM. The bill changes
27the definition of “medical cannabidiol” to include specific
28forms of oral, topical, and inhalable cannabis.
29The bill increases the maximum number of medical cannabidiol
30dispensary licenses in the state from 5 to 10. The bill
31prohibits the department of health and human services from
32issuing a new medical cannabidiol dispensary license for a
33dispensary to be located in a county with a medical cannabidiol
34dispensary that was licensed prior to January 1, 2023. The
35bill strikes a provision requiring the department to locate
-3-1medical cannabidiol dispensaries based on geographical need
2throughout the state.
3The bill requires the department of health and human
4services to accept applications for medical cannabidiol
5dispensary licenses from current licensees between July 1,
62023, and October 1, 2023. In evaluating an application from
7a current licensee, the department shall consider only the
8security, physical layout, and plan for technology at the
9proposed location. A licensee may hold a maximum of four
10medical cannabidiol dispensary licenses.
11The bill strikes a provision in current law requiring a
12medical cannabidiol dispensary to agree to begin supplying
13medical cannabidiol by December 1, 2018.
14DIVISION II — MEDICAL CANNABIDIOL — INCOME TAXES. The
15bill allows individuals and corporations to subtract from net
16income, to the extent included, business expenses for a medical
17cannabidiol manufacturer or medical cannabidiol dispensary.
18This division of the bill applies retroactively to January 1,
192023, for tax years beginning on or after that date.
20DIVISION III — MEDICAL CANNABIDIOL — SALES AND USE TAX.
21 The bill exempts sales of medical cannabidiol products by a
22medical cannabidiol manufacturer or a medical cannabidiol
23dispensary pursuant to Code chapter 124E from sales tax.
-4-ss/rh
2medical cannabidiol dispensaries and manufacturers, income
3tax deductions, and sales and use tax, and including
4retroactive applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2MEDICAL CANNABIDIOL PROGRAM
3 Section 1. Section 124E.2, subsection 10, Code 2023, is
4amended by striking the subsection and inserting in lieu
5thereof the following:
610. “Medical cannabidiol” means any species of the genus
7cannabis plant, or any mixture or preparation thereof,
8including whole plant extracts and resins, that is delivered
9in any of the following forms:
10a. Oral forms, including but not limited to:
11(1) Tablets.
12(2) Capsules.
13(3) Liquids.
14(4) Tinctures.
15(5) Sublingual forms.
16b. Topical forms, including but not limited to:
17(1) Gels.
18(2) Ointments, creams, or lotions.
19(3) Transdermal patches.
20c. Inhaled forms, limited to:
21(1) Nebulizable inhaled forms.
22(2) Vaporizable dried raw cannabis.
23(3) Other vaporizable forms of cannabis.
24 Sec. 2. Section 124E.8, subsection 1, paragraph a, Code
252023, is amended to read as follows:
26a. The department shall issue a request for proposals accept
27applications to select and license by April 1, 2018, up to
28five ten medical cannabidiol dispensaries to dispense medical
29cannabidiol within this state consistent with the provisions
30of this chapter. The department shall license new medical
31cannabidiol dispensaries or relicense the existing medical
32cannabidiol dispensaries by December 1 of each year.
33 Sec. 3. Section 124E.8, subsection 2, Code 2023, is amended
34by striking the subsection.
35 Sec. 4. Section 124E.8, Code 2023, is amended by adding the
-1-1following new subsection:
2 NEW SUBSECTION. 3A. The department shall not issue a
3license for a medical cannabidiol dispensary to be located in a
4county with a medical cannabidiol dispensary that was licensed
5prior to January 1, 2023.
6 Sec. 5. Section 124E.9, subsection 1, Code 2023, is amended
7to read as follows:
81. a. The medical cannabidiol dispensaries shall be located
9based on geographical need throughout the state to improve
10patient access.
11b. A medical cannabidiol dispensary may dispense medical
12cannabidiol pursuant to the provisions of this chapter but
13shall not dispense any medical cannabidiol in a form or
14quantity other than the form or quantity allowed by the
15department pursuant to rule.
16 Sec. 6. MEDICAL CANNABIDIOL DISPENSARY LICENSES — CURRENT
17LICENSEES.
181. The department of health and human services shall accept
19applications for new medical cannabidiol dispensary licenses
20from current licensees between July 1, 2023, and October 1,
212023.
222. Notwithstanding section 124E.8, subsection 3, in
23evaluating an application pursuant to this section, the
24department shall consider only the security, physical layout,
25and plan for technology at the proposed location.
263. A licensee submitting an application pursuant to
27this section may hold a maximum of four medical cannabidiol
28dispensary licenses, including the licensee’s current license.
29DIVISION II
30MEDICAL CANNABIDIOL — INCOME TAXES
31 Sec. 7. Section 422.7, Code 2023, is amended by adding the
32following new subsection:
33 NEW SUBSECTION. 44. Subtract, to the extent included,
34the amount of business expense for a medical cannabidiol
35manufacturer or medical cannabidiol dispensary licensed
-2-1pursuant to chapter 124E without regard to section 280E of the
2Internal Revenue Code.
3 Sec. 8. Section 422.35, Code 2023, is amended by adding the
4following new subsection:
5 NEW SUBSECTION. 15. Subtract, to the extent included,
6the amount of business expense for a medical cannabidiol
7manufacturer or medical cannabidiol dispensary licensed
8pursuant to chapter 124E without regard to section 280E of the
9Internal Revenue Code.
10 Sec. 9. RETROACTIVE APPLICABILITY. This division of this
11Act applies retroactively to January 1, 2023, for tax years
12beginning on or after that date.
13DIVISION III
14MEDICAL CANNABIDIOL — SALES AND USE TAX
15 Sec. 10. Section 423.3, Code 2023, is amended by adding the
16following new subsection:
17 NEW SUBSECTION. 110. The sales price of the sale of
18a medical cannabidiol product by a medical cannabidiol
19manufacturer or a medical cannabidiol dispensary pursuant to
20chapter 124E.
21EXPLANATION
22The inclusion of this explanation does not constitute agreement with
23the explanation’s substance by the members of the general assembly.
24This bill relates to the medical cannabidiol program and is
25organized in divisions.
26DIVISION I — MEDICAL CANNABIDIOL PROGRAM. The bill changes
27the definition of “medical cannabidiol” to include specific
28forms of oral, topical, and inhalable cannabis.
29The bill increases the maximum number of medical cannabidiol
30dispensary licenses in the state from 5 to 10. The bill
31prohibits the department of health and human services from
32issuing a new medical cannabidiol dispensary license for a
33dispensary to be located in a county with a medical cannabidiol
34dispensary that was licensed prior to January 1, 2023. The
35bill strikes a provision requiring the department to locate
-3-1medical cannabidiol dispensaries based on geographical need
2throughout the state.
3The bill requires the department of health and human
4services to accept applications for medical cannabidiol
5dispensary licenses from current licensees between July 1,
62023, and October 1, 2023. In evaluating an application from
7a current licensee, the department shall consider only the
8security, physical layout, and plan for technology at the
9proposed location. A licensee may hold a maximum of four
10medical cannabidiol dispensary licenses.
11The bill strikes a provision in current law requiring a
12medical cannabidiol dispensary to agree to begin supplying
13medical cannabidiol by December 1, 2018.
14DIVISION II — MEDICAL CANNABIDIOL — INCOME TAXES. The
15bill allows individuals and corporations to subtract from net
16income, to the extent included, business expenses for a medical
17cannabidiol manufacturer or medical cannabidiol dispensary.
18This division of the bill applies retroactively to January 1,
192023, for tax years beginning on or after that date.
20DIVISION III — MEDICAL CANNABIDIOL — SALES AND USE TAX.
21 The bill exempts sales of medical cannabidiol products by a
22medical cannabidiol manufacturer or a medical cannabidiol
23dispensary pursuant to Code chapter 124E from sales tax.
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