Relating to marijuana, including the manufacture, delivery, and possession of marijuana and the licensure of retail marijuana, providing fees, including excise taxes, establishing funds, providing penalties, and including effective date provisions

The inclusion of this explanation does not constitute agreement with the explanation’s substance by the members of the general assembly. DIVISION I —— CRIMINAL PENALTIES. This bill modifies criminal penalties relating to marijuana by eliminating and modifying certain criminal provisions in Code chapter 124 (uniform controlled substances Act), and transferring certain criminal provisions from Code chapter 124 to new Code chapter 124F. MANUFACTURE, DELIVERY, OR POSSESSION WITH INTENT TO DELIVER MARIJUANA. 2(1)(a) and the controlled substance involves more than kilograms of marijuana. Currently, such a person commits a class “B” felony punishable by confinement of no more than years if the controlled substance involves more than 1,000 kilograms of a mixture or substance containing a detectable amount of marijuana, or a class “B” felony punishable by confinement of no more than years if the controlled substance involves more than 100 kilograms of marijuana but not more than 1,000 kilograms.2(1)(b) and the controlled substance involves more than kilograms of marijuana but not more than kilograms. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245. Currently, such a person commits a class “C” felony if the controlled substance involves more than kilograms of marijuana but not more than 100 kilograms.2(1)(c) and the controlled substance involves more than ounces of marijuana but not more than kilograms. An aggravated misdemeanor is punishable by confinement for no more than two years and a fine of at least $855 but not more than $8,540. Currently, such a person commits a class “D” felony if the controlled substance involves kilograms or less of marijuana.2(1)(d) and the controlled substance involves more than ounces of marijuana but not more than ounces. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560. Currently, such a person commits a class “D” felony.2(1)(e) and the controlled substance involves ounces or less of marijuana except as otherwise provided in the bill. A simple misdemeanor is punishable by confinement for no more than days and a fine of at least $105 but not more than $855. Currently, such a person commits a class “D” felony. POSSESSION OF MARIJUANA. The bill provides that if a person unlawfully possesses more than ounces of marijuana but not more than ounces, the person commits a serious misdemeanor. The bill provides that if a person unlawfully possesses more than one-half ounce of marijuana but not more than ounces, the person commits a simple misdemeanor. The bill provides that if a person years of age or older possesses one-half ounce or less of marijuana, the person does not commit a criminal offense but shall be assessed a civil penalty in the amount of $100. If the person is under years of age, the offense shall be punishable as a serious misdemeanor, which may be expunged after two years if the person does not commit additional criminal violations other than traffic offenses. The bill provides that any records relating to the civil penalty shall not be displayed for public viewing on the Iowa court information system and such records shall not be kept in the criminal history files maintained by the department of public safety. The bill allows a municipality to adopt an ordinance to allow for the legal possession of marijuana. RETAIL MARIJUANA —— POSSESSION LIMITS. The bill establishes possession limits for retail marijuana, defined in the bill. The bill prohibits a resident of Iowa years of age or older from possessing more than grams of marijuana flower, grams of marijuana concentrate, or 500 milligrams of tetrahydrocannabinol contained in a product infused with marijuana.5 grams of marijuana concentrate, or 250 milligrams of tetrahydrocannabinol contained in a product infused with marijuana. A person in possession of retail marijuana in excess of amounts equivalent to the amounts specified in the bill for the possession of marijuana is subject to prosecution for a simple or serious misdemeanor or a civil penalty. A retail marijuana store that sells retail marijuana in excess of such amounts is subject to a fine or other discipline imposed by the division. Currently, if a person unlawfully possesses marijuana, the person shall be punished by imprisonment in the county jail for not more than six months or by a fine of not more than $1,000, or by both for a first offense. If the person has previously been convicted of marijuana possession, the person commits a serious misdemeanor under current law, and if the person has been convicted of marijuana possession two or more times, the person commits an aggravated misdemeanor. DELIVERY OR POSSESSION OF MARIJUANA —— SMALL AMOUNTS. If the amount of marijuana delivered or possessed with intent to deliver is one ounce or less and no remuneration was provided, the defendant shall not be prosecuted for a violation of the bill. MARIJUANA USE IN PUBLIC. The bill prohibits the consumption of marijuana in areas open and accessible to the public, including but not limited to public transportation facilities, sporting or music venues, parks, playgrounds, sidewalks and roads, outdoor cafes, or indoor but public locations. A person who violates this provision commits a simple misdemeanor punishable as a scheduled violation in the amount of $50 for a first offense and $100 for a second or subsequent offense. This violation may be expunged after two years if the person does not commit additional criminal violations other than traffic offenses. JUVENILE MARIJUANA OFFENSES. The bill specifies that the juvenile court shall have exclusive original jurisdiction in a proceeding concerning a minor who is alleged to have committed a violation of the bill. GATHERINGS WHERE CONTROLLED SUBSTANCES UNLAWFULLY USED. The bill strikes a provision making it a serious misdemeanor for a person to sponsor, promote, or aid in the sponsoring or promoting of a meeting or gathering with the knowledge or intent that marijuana be distributed, used, or possessed at the meeting or gathering in violation of Code chapter 124. ACCOMMODATION OFFENSE.401(5).413 (mandatory minimum sentences —— controlled substances). SECOND OR SUBSEQUENT OFFENSES. Currently, a person convicted of a second or subsequent offense under Code chapter 124 may be punished by imprisonment for a period not to exceed three times the term otherwise authorized, or fined not more than three times the amount otherwise authorized. The bill strikes the provision that allows for the use of a previous marijuana conviction in determining if a person has been convicted of a second or subsequent offense under Code chapter 124. MARIJUANA IN MOTOR VEHICLES. The bill prohibits a driver of a motor vehicle upon a public street or highway from using marijuana in the passenger area of the motor vehicle. The bill also prohibits a driver or passenger of or in a motor vehicle upon a public street or highway from possessing marijuana in the passenger area of a motor vehicle except in a sealed, odor proof, child resistant container. The bill defines “passenger area” as the area designed to seat the driver and passengers while the motor vehicle is in operation and any area that is readily accessible to the driver or a passenger while in their seating positions, including the glove compartment. A person who knowingly violates this provision of the bill is guilty of a simple misdemeanor. A simple misdemeanor is punishable by confinement for no more than days and a fine of at least $105 but not more than $855. EXPUNGEMENT. The bill provides that upon application by a defendant convicted of a felony offense under Code chapter 124 (controlled substances) related to the possession or transfer of marijuana prior to January 1, 2022, the court shall enter an order expunging the record of such a criminal case. A person may only seek an expungement once, but an application may request the expungement of multiple offenses if the offenses arose from the same transaction or occurrence.3 (misdemeanor expungement). DIVISION II —— RETAIL MARIJUANA. Division II of the bill relates to the regulation of retail marijuana in Iowa. The bill grants the alcoholic beverages division of the department of commerce (division) the authority to regulate the cultivation, production, transportation, testing, and sale of retail marijuana and retail marijuana products, including by issuing appropriate licenses and promulgating rules. The bill requires the division to transfer half of any application fee collected to the local jurisdiction in which the retail marijuana establishment will be located. The bill allows local jurisdictions to impose limitations on the operation of retail marijuana establishments, including by prohibiting their operation. The bill directs the division to develop and maintain a seed-to-sale tracking system to track retail marijuana from the seed or immature plant stage until it is sold to a consumer at a retail marijuana establishment. LOCAL LICENSES. The bill requires the division to transmit any application for a retail marijuana establishment it receives to the local jurisdiction where the establishment will be located within seven days of receipt unless the local jurisdiction has prohibited the operation of retail marijuana establishments. The local jurisdiction must then inform the division whether the application complies with any local restrictions on the operation of retail marijuana establishments it may have imposed. The bill requires a person to receive approval from both the division and the local jurisdiction before operating a retail marijuana establishment. A person whose application for a license is denied is entitled to a hearing and judicial review pursuant to Code chapter 17A. LICENSES. Ninety days prior to the expiration date of an existing license, the division shall notify the licensee of the expiration date by first class mail at the licensee’s address of record with the division. A licensee may apply for the renewal of an existing license to the division not less than days prior to the date of expiration. RETAIL MARIJUANA STORES. The bill allows a retail marijuana store to purchase retail marijuana from a retail marijuana cultivation facility. A retail marijuana store may also sell prepackaged and labeled retail marijuana products. A retail marijuana store must track all of its retail marijuana and retail marijuana products from the point that they are transferred to the retail marijuana store to the point of sale. The bill prohibits a retail marijuana store from selling more than one ounce of retail marijuana or its equivalent in a single transaction to a person, excluding nonedible, nonpsychoactive retail marijuana products. Prior to initiating a sale, the bill requires a retail marijuana store employee to verify that that purchaser has a valid identification card showing that the person is years of age or older. If a purchaser presents a retail marijuana store employee with fraudulent proof of age, any action taken in reliance on that proof of age shall not be grounds for the revocation or suspension of a license. The bill allows a retail marijuana store to provide to the state hygienic laboratory a sample of its products for testing and research purposes. The retail marijuana store shall maintain a record of what was provided to the laboratory and the results of the testing. The bill prohibits a retail marijuana store from selling any products other than retail marijuana, retail marijuana products, marijuana accessories, nonconsumable products such as apparel, and marijuana products such as childproof packaging containers. RETAIL MARIJUANA CULTIVATION. The bill allows the division to issue up to retail marijuana cultivation facility licenses to persons who cultivate retail marijuana for sale and distribution to retail marijuana stores, manufacturers, or other cultivation facilities. The bill requires a retail marijuana cultivation facility to remit any applicable tax due. The bill also requires a retail marijuana cultivation facility to track the marijuana it cultivates from seed or immature plant to wholesale purchase. RETAIL MARIJUANA PRODUCTS MANUFACTURING LICENSES. The bill allows the division to issue up to retail marijuana products manufacturing licenses to persons who manufacture retail marijuana products. The bill requires a retail marijuana products manufacturer to track all of its retail marijuana from the point it is either transferred from its retail marijuana cultivation facility or the point when it is delivered to the retail marijuana products manufacturer from a retail marijuana cultivation facility to the point of transfer to a retail marijuana store. The bill requires retail marijuana products to be manufactured and prepared in a facility that only manufactures retail marijuana products, except that premises may be shared with a medical cannabidiol-infused products manufacturer so long as a virtual or physical separation of inventory is maintained. RETAIL MARIJUANA TRANSPORTATION. The bill allows the division to issue a retail marijuana transporter license to a person to provide logistics, distribution, and storage of retail marijuana and retail marijuana products. The bill requires a retail marijuana transporter to use the seed-to-sale tracking system to create shipping manifests documenting the transport of retail marijuana and retail marijuana products. RETAIL MARIJUANA USE —— PROTECTIONS. The bill prohibits the state and its political subdivisions from taking certain actions against a person on the basis that the person has engaged in conduct allowed by the bill. The state and its political subdivisions shall not prosecute a person, deny a person a professional license, deny a person a benefit or entitlement, deny a person custody or visitation of a child, deny a person employment or a contract, or deny a person medical care on the basis that the person has engaged in conduct allowed by the bill. The bill also prohibits the state or a political subdivision from denying employment or a contract to a person on the basis of a person’s prior conviction of a nonviolent marijuana offense that does not involve distribution to a minor. The bill excludes engaging in conduct allowed by the bill from being classified as a violation of a condition of parole, probation, or pretrial release unless there is a specific finding that the conduct could create a danger to the individual or another person. The bill does not prohibit a governmental employer from disciplining an employee or contractor for ingesting marijuana at work or working while impaired by marijuana, nor does it prohibit a licensing board from imposing a penalty on a person for engaging in conduct that would constitute negligence or professional malpractice. The protections of the bill do not apply to the extent that they conflict with a governmental employer’s obligations under federal law or would disqualify a governmental employer from a monetary or licensing-related benefit under federal law. FEES. The bill allows the division to collect and charge fees. The bill sets the application fee for a person applying for a new retail marijuana establishment license at $5,000, which shall be divided evenly between the division and the local jurisdiction where the license is proposed to be issued. The bill permits a local jurisdiction to impose operating fees on retail marijuana establishments to which it has granted a license. LICENSE DISCIPLINE. The bill permits the division, on its own motion or complaint, and after investigation, notice, a public hearing, and opportunity to be heard, to suspend or revoke a license if the licensee or any of its agents or employees violate a provision of the bill or a rule promulgated by the division. The division may administer oaths and issue subpoenas to require the presence of persons and the production of documents. The division may impose discipline pursuant to rules and Code chapter 17A. INSPECTION. The bill requires a licensee to keep a complete set of all records necessary to show fully the business transactions of the licensee, all of which shall be open at all times during business hours for the inspection and examination by the division or its duly authorized representatives. The bill requires the licensed premises of a retail marijuana establishment, including any places of storage where retail marijuana or retail marijuana products are stored, cultivated, sold, dispensed, or tested to be subject to inspection by the state or local jurisdictions and their investigators, during all business hours and other times of apparent activity, for the purpose of inspection or investigation. STATE EXCISE TAX. The bill imposes an excise tax on consumers at the rate of percent of the sale price on each sale of retail marijuana. The tax shall be paid by the consumer to the retail marijuana establishment at the time of sale, and each retail marijuana establishment shall remit the tax collected to the division on the 15th day of each month. Revenues generated by the excise tax shall be used to administer the retail marijuana program. Excess funds shall be deposited in the marijuana tax cash fund, created in the bill. Moneys in the marijuana tax cash fund may be appropriated by the general assembly for purposes enumerated in the bill. OCCUPATIONAL LICENSING PROTECTIONS. The bill prohibits a professional or occupational licensing board from imposing discipline on a licensee for providing services related to retail marijuana establishments. The bill also prohibits a professional or occupational licensing board from denying a license to a person based on a person’s past employment with a retail marijuana establishment. RULEMAKING. The bill requires the alcoholic beverages division to adopt rules within 180 days of the effective date of the bill to adopt rules for the implementation of the bill. The rules shall not prohibit the operation of retail marijuana establishments or make the operation of retail marijuana establishments so costly as to be impractical. Required rules include but are not limited to rules relating to applications, fees, licensure, security requirements, labeling requirements, health and safety requirements, restrictions on advertising, cultivation, testing, and penalties. The division shall also develop and regularly update safety materials to be distributed upon the sale of retail marijuana. ACTS PROHIBITED. The bill does not allow driving while under the influence of or impaired by marijuana and does not allow the transfer of marijuana to a person under years of age or the possession of marijuana by a person under years of age. PROPERTY RIGHTS. The bill does not require the owner of a property to allow the consumption, cultivation, display, sale, or transfer of marijuana at that property. However, in the case of a residential dwelling, a landlord or property manager shall not prohibit the possession of retail marijuana or the consumption of retail marijuana by means other than smoking except under certain circumstances. The bill allows a landlord to take action against a tenant after a warning if the tenant’s use of marijuana creates an odor that interferes with the peaceful enjoyment of property by other tenants. The bill prohibits a landlord from discriminating against a tenant or applicant on the basis of a past conviction of a marijuana offense that would have been legal under the bill. CONTRACTS. The bill states that it is the public policy of the state that contracts relating to retail marijuana shall not be unenforceable on the basis that the production, distribution, and possession of marijuana is prohibited by federal law. LAW ENFORCEMENT. The bill prohibits law enforcement agencies from expending resources on the investigation of or arrest for activity related to marijuana that is in violation of federal law if the officer performing the investigation or arrest has reason to believe that the activity complies with the requirements of the bill. The bill also prohibits an agency or political subdivision of the state from taking an adverse action against a person on the sole basis that the person has violated a federal law related to marijuana. LOCAL EXCISE TAX. The bill allows a municipality to adopt by ordinance an excise tax of no more than percent on retail marijuana sold in the municipality. The bill requires a municipality to inform the department of revenue at least days prior to the first day of the tax quarter when the excise tax will be collected. The tax shall be paid by the consumer to the retail marijuana establishment at the time of sale, and each retail marijuana establishment shall remit the tax collected to the municipality on the 15th day of each month. The bill takes effect January 1, 2022, except that the alcoholic beverages division may adopt rules prior to that date for the implementation of the bill.