AR
Arkansas House Bill HB1605

Arkansas 2023 Regular Session

Arkansas House Bill HB1605 Compare Versions

Only one version of the bill is available at this time.
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11 Stricken language would be deleted from and underlined language would be added to present law.
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44 State of Arkansas 1
55 94th General Assembly A Bill 2
66 Regular Session, 2023 HOUSE BILL 1605 3
77 4
88 By: Representative J. Moore 5
99 By: Senators J. Bryant, Irvin, Hester 6
1010 7
1111 For An Act To Be Entitled 8
1212 AN ACT TO PROVIDE RE GULATION OF HEMP-DERIVED PRODUCTS 9
1313 BY THE ARKANSAS TOBA CCO CONTROL BOARD; A ND FOR OTHER 10
1414 PURPOSES. 11
1515 12
1616 13
1717 Subtitle 14
1818 TO PROVIDE REGULATION OF HEMP -DERIVED 15
1919 PRODUCTS BY THE ARKANSAS TOBACCO CONTROL 16
2020 BOARD. 17
2121 18
2222 19
2323 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 20
2424 21
2525 SECTION 1. Arkansas Code § 19 -6-831(b)(1), concerning the Arkansas 22
2626 Tobacco Control Revenue Fund, is amended to read as follows: 23
2727 (b)(1) All permit and license fees received by Arkansas Tobacco 24
2828 Control under the Arkansas Tobacco Products Tax Act of 1977, § 26 -57-201 et 25
2929 seq., and § 20-56-401 et seq., shall be deposited into the State Treasury as 26
3030 special revenues to the credit of the fund. 27
3131 28
3232 SECTION 2. Arkansas Code § 19 -6-831(c)(1), concerning the Arkansas 29
3333 Tobacco Control Revenue Fund, is amended to read as follows: 30
3434 (c)(1) The fund shall be used for expenses incurred by Arkansas 31
3535 Tobacco Control in the organization, maintenance, ope ration, and merchant 32
3636 education and training with regard to enforcement of § 5 -27-227, the Arkansas 33
3737 Tobacco Products Tax Act of 1977, § 26 -57-201 et seq., § 20-56-401 et seq., 34
3838 and the Unfair Cigarette Sales Act, § 4 -75-701 et seq. 35
3939 36 HB1605
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4444 SECTION 3. Arkansas Cod e Title 20, Chapter 56, is amended to add an 1
4545 additional subchapter to read as follows: 2
4646 Subchapter 4 - Hemp-Derived Products 3
4747 4
4848 20-56-401. Purpose. 5
4949 It is the intent of this subchapter to provide regulation of hemp -6
5050 derived products to: 7
5151 (1) Assure that when hemp-derived products are distributed in 8
5252 the state, they are not contaminated and are distributed only to persons 9
5353 authorized to receive hemp -derived products; and 10
5454 (2) Protect and promote the public health and welfare of the 11
5555 residents of this state. 12
5656 13
5757 20-56-402. Definitions. 14
5858 As used in this subchapter: 15
5959 (1) “Annual” or “annually” means the fiscal year from July 1 16
6060 through the next June 30; 17
6161 (2) “Approved Laboratory” means a laboratory that is accredited 18
6262 by the National Institute on Drug Abuse, the National Environmental 19
6363 Laboratory Accreditation Conference, the International Organization for 20
6464 Standardization or similar accrediting entity as determined by Arkansas 21
6565 Tobacco Control and that has been approved by the Director of Arkansas 22
6666 Tobacco Control specifically for the testing of hemp -derived product; 23
6767 (3) “Consumer” means a member of the public at large; 24
6868 (4) “Days” means calendar days unless otherwise specified; 25
6969 (5) "Finished product" means a product intended for consumer use 26
7070 to be sold at retail; 27
7171 (6) "Hemp" means the plant Cannabis sativa and any part of the 28
7272 plant, including the seeds of the plant, that contains a delta -9 29
7373 tetrahydrocannabinol concentration of three -tenths percent (0.3%) or less on 30
7474 a dry-weight basis, and all derivatives, extracts, cannabinoids, isomers, 31
7575 acids, salts, and salts of isomers, whether growing or not; 32
7676 (7) “Hemp-derived e-liquid product” means a liquid hemp -derived 33
7777 product that contains hemp that is inhaled when using a vapor product, and 34
7878 that may or may not include without limitation propylene glycol, vegetable 35
7979 glycerin, and flavorings; 36 HB1605
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8484 (8)(A) "Hemp-derived product" means a product intended for human 1
8585 consumption including consumption by vapor inhalation as defined in this 2
8686 subchapter, or a component of a pr oduct, that is derived from hemp, including 3
8787 all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of 4
8888 isomers, and any product made from such derivatives. 5
8989 (B) "Hemp-derived product" includes a hemp -derived e-6
9090 liquid product and a vapo r product. 7
9191 (C) "Hemp-derived product" does not include: 8
9292 (i) A product intended for animal consumption or 9
9393 use; 10
9494 (ii) A cosmetic as defined by § 20 -56-202(6); 11
9595 (iii) Any marijuana, medical marijuana, or other 12
9696 cannabis product containing delt a-9 tetrahydrocannabinol greater than three -13
9797 tenths percent (0.3%) on a dry weight basis as administered, licensed, and 14
9898 otherwise regulated by the Alcoholic Beverage Control Division, the Medical 15
9999 Marijuana Commission, and the Department of Health under Arka nsas 16
100100 Constitution, Amendment 98; 17
101101 (iv) A raw hemp product, including any intact plant, 18
102102 flower, buds, leaves, or stems; 19
103103 (v) A drug in the form for which an application 20
104104 filed in accordance with 21 U.S.C. § 355 is approved by the United States 21
105105 Food and Drug Administration; 22
106106 (vi) A dietary supplements as defined by the Federal 23
107107 Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq.; or 24
108108 (vii) A fabric, textile, cordage, fiber, fuel, 25
109109 paper, construction material, plastic, seed, seed meal, and seed oil; 26
110110 (9)(A) “Manufacturer” means a person that manufactures, 27
111111 fabricates, assembles, or processes a hemp -derived product, including without 28
112112 limitation federally licensed importers and federally licensed distributors 29
113113 that deal in hemp-derived products. 30
114114 (B) “Manufacturer” includes: 31
115115 (i) A sales entity affiliate of the manufacturer or 32
116116 any other entity representing the manufacturer with regard to the sale of 33
117117 hemp-derived products produced by the manufacturer to wholesalers or 34
118118 permitted retailers; and 35
119119 (ii) A person that mixes, compounds, extracts, 36 HB1605
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124124 infuses, blends, processes, repackages, or resizes hemp -derived products 1
125125 including the extraction of cannabinoids from hemp biomass. 2
126126 (C) “Manufacturer” does not include a person who engages 3
127127 in the agricultural production of hemp, such as growing, planting, and 4
128128 harvesting of raw hemp biomass regulated by the State Plant Board; 5
129129 (10)(A) “Minor” means a person who is under twenty -one (21) 6
130130 years of age. 7
131131 (B) “Minor” does not include a person who: 8
132132 (i) Is under twenty -one (21) years of age if the 9
133133 person presents a military identification card establishing that he or she is 10
134134 a member of the United States Armed Forces; or 11
135135 (ii) Has attained nineteen (19) years of age as of 12
136136 December 31, 2019; 13
137137 (11) "Person” means an individual, retailer, wholesaler, 14
138138 manufacturer, firm, association, company, partnership, limited liability 15
139139 company, corporation, joint -stock company, club, agency, syndicate, the State 16
140140 of Arkansas, county, municipal corporation or othe r political subdivision of 17
141141 the state, receiver, trustee, fiduciary, or trade association; 18
142142 (12) “Place of business” means the physical location: 19
143143 (A) Where orders for hemp -derived products are taken or 20
144144 received or where hemp -derived products are sold; and 21
145145 (B) That is on file with Arkansas Tobacco Control; 22
146146 (13) “Retailer” means a person that purchases hemp -derived 23
147147 products from permitted wholesalers for the purpose of selling the hemp -24
148148 derived products in person and over the counter at retail to c onsumers; 25
149149 (14)(A) “Sale” or “sell” means a transfer, exchange, or barter 26
150150 in any manner or by any means for any consideration, including distributing 27
151151 or shipping hemp-derived product in connection with a sale. 28
152152 (B) A sale “in” or “into” a state refers to the state in 29
153153 which the destination point of the hemp -derived product is located in the 30
154154 sale without regard to where title was transferred. 31
155155 (C) A sale “from” a state refers to the sale of a hemp -32
156156 derived product that is located in that state to the destination in question 33
157157 without regard to where title was transferred; 34
158158 (15) “Self-service display” means a display: 35
159159 (A) That contains a hemp -derived product, or any component 36 HB1605
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164164 of a hemp-derived product; 1
165165 (B) That is located in an area where custom ers are 2
166166 permitted; and 3
167167 (C) In which the hemp -derived product, or any component of 4
168168 a hemp-derived product is readily accessible to a customer without the 5
169169 assistance of a salesperson; 6
170170 (16) “Tetrahydrocannabinol” means a compound that is the 7
171171 natural, primary active cannabinoid substance or its equivalent contained in 8
172172 the plant of the genus cannabis or in the resinous extracts of the plant, 9
173173 including derivatives or isomers derived from such cannabinoids; 10
174174 (17) “Vapor product” means hemp -derived product that is an 11
175175 electronic oral device of any size or shape that contains a vapor of hemp or 12
176176 hemp-derived e-liquid product that when used or inhaled simulates smoking, 13
177177 regardless of whether a visible vapor is produced, including without 14
178178 limitation a device tha t: 15
179179 (A) Is composed of a heating element, battery, electronic 16
180180 circuit, chemical process, mechanical device, or a combination of heating 17
181181 element, battery, electronic circuit, chemical process, or mechanical device; 18
182182 (B) Works in combination with a car tridge, other 19
183183 container, or liquid delivery device containing hemp or hemp -derived e-liquid 20
184184 product and manufactured for use with vapor products; 21
185185 (C) Is manufactured, distributed, marketed, or sold as any 22
186186 type or derivation of a vapor product, e -cigarette, e-cigar, e-pipe, or any 23
187187 other produced name or descriptor; and 24
188188 (D) Does not include a product regulated as a drug or 25
189189 device by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., 26
190190 as it existed on January 1, 2015; 27
191191 (18) “Warehouse” means a place where hemp -derived products are 28
192192 stored for another person and to or from which place the hemp -derived 29
193193 products are shipped or delivered upon order by the owner of the hemp -derived 30
194194 products to the warehouse; and 31
195195 (19) “Wholesaler” means a p erson that: 32
196196 (A) Does business within the state; 33
197197 (B) Purchases hemp-derived products from any source; and 34
198198 (C) Distributes or sells the hemp -derived products to 35
199199 other wholesalers or retailers. 36 HB1605
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204204 1
205205 20-56-403. Construction. 2
206206 (a) A hemp-derived product shall not be delivered, sold, or otherwise 3
207207 distributed in this state except in conformity with all applicable laws and 4
208208 regulations, including this subchapter and any rules promulgated under this 5
209209 subchapter. 6
210210 (b) A person shall not sell a hemp -derived product without being 7
211211 permitted by Arkansas Tobacco Control. 8
212212 (c) A product intended for human consumption or inhalation that is 9
213213 derived from hemp and contains tetrahydrocannabinol shall not be permitted or 10
214214 allowed under the laws of this state, other than hemp-derived products. 11
215215 (d) A hemp-derived product shall be prepackaged and shelf stable. 12
216216 (e) A hemp-derived product shall not contain or include any of the 13
217217 following: 14
218218 (1) Alcoholic beverages, including without limitation beer, 15
219219 wine, intoxicating li quor, or any other alcoholic beverage as defined by § 3 -16
220220 1-101 et seq. and § 3-5-202; 17
221221 (2) Products containing nicotine or tobacco; 18
222222 (3) Inhalable products or other products labeled or advertised 19
223223 for the purpose of smoking or in the form of a cigarette, cigar, or pre-roll, 20
224224 or packaged or combined with other items designed to facilitate smoking such 21
225225 as rolling papers or pipes, except hemp -derived e-liquid products; or 22
226226 (4) Medical devices, prescription drugs, or drugs otherwise 23
227227 approved by the United St ates Food and Drug Administration. 24
228228 (f) The business of handling, receiving, possessing, storing, 25
229229 distributing, taking orders for, soliciting orders of, selling, offering for 26
230230 sale, and dealing in, through sale, barter, or exchange, hemp -derived 27
231231 products is declared to be a privilege under the Arkansas Constitution and 28
232232 laws of the State of Arkansas. 29
233233 30
234234 20-56-404. Permits. 31
235235 (a)(1) Each person listed in this section, before commencing business, 32
236236 or if already in business, before continuing business, shall pay an annual 33
237237 privilege fee and secure a permit from the Director of Arkansas Tobacco 34
238238 Control. 35
239239 (2) A person purchasing an existing permitted retail location 36 HB1605
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244244 may, with the permission of the seller and Arkansas Tobacco Control, operate 1
245245 under the selling owne r's permit for no more than thirty (30) days from the 2
246246 date of the sale. 3
247247 (b)(1) In addition to securing a permit under subsection (a) of this 4
248248 section, a manufacturer whose products are sold in this state shall register 5
249249 with the Secretary of the Department of Finance and Administration. 6
250250 (2) A wholesaler of hemp -derived products shall secure the 7
251251 proper wholesale permit. 8
252252 (3) Every retailer of hemp -derived products that operates a 9
253253 place of business shall secure the proper retail permit. 10
254254 (c)(1) Permits shall be issued as follows: 11
255255 (A) A permit for a sole proprietorship is issued in the 12
256256 owner's name and in the fictitious business name, if any; 13
257257 (B)(i) A permit for a partnership or limited liability 14
258258 company is issued in the name of: 15
259259 (a) The managing partner or managing member; 16
260260 and 17
261261 (b) The partnership or limited liability 18
262262 company. 19
263263 (ii) If the managing partner or managing member of a 20
264264 limited liability company is a partnership, limited liability company, or 21
265265 corporation, then the permit shall be issued in the name of: 22
266266 (a) The president or chief executive officer; 23
267267 and 24
268268 (b) The partnership or limited liability company; 25
269269 and 26
270270 (C) A permit for a publicly traded or nonpublicly traded 27
271271 corporation is issued in the name of the president or chief executive officer 28
272272 of the corporation and in the name of the corporation. 29
273273 (2) It is a violation for a permitted entity not to provide 30
274274 written notification to the director within thirty (30) days of a change in 31
275275 the following: 32
276276 (A) The managing partner, limited liability company 33
277277 managing member, or president or chief executive officer of a corporation, 34
278278 partnership, or limited liability company; or 35
279279 (B) The stockholders effecting twenty -five percent (25%) 36 HB1605
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284284 or more of the total voting shares of a nonpublicly traded corporation. 1
285285 (d)(1) When an entity transfers a business permitted under this 2
286286 subchapter, the entity to which the business is transferred: 3
287287 (A) Shall apply for a new permit under this subchapter; 4
288288 (B) May be issued a n ew permit under this subchapter; and 5
289289 (C) May operate under the selling entity's permit for no 6
290290 more than thirty (30) days from the date of the sale. 7
291291 (2) When a partnership or limited liability company permitted 8
292292 under this subchapter changes, removes, or replaces the managing partner, 9
293293 managing member, president, or chief executive officer: 10
294294 (A) The existing permit issued under this subchapter is 11
295295 void; and 12
296296 (B) The partnership or limited liability company: 13
297297 (i) Shall apply for a new permit und er this 14
298298 subchapter; 15
299299 (ii) May be issued a new permit under this 16
300300 subchapter; and 17
301301 (iii) May operate under the voided permit for no 18
302302 more than thirty (30) days from the date of the change, removal, or 19
303303 replacement of the permit. 20
304304 (3) When a nonpublic ly traded corporation permitted under this 21
305305 subchapter changes, removes, or replaces the president or chief executive 22
306306 officer named on the permit or changes, removes, or replaces a stockholder 23
307307 who owns fifty percent (50%) or more of the total voting shares of the 24
308308 nonpublicly traded corporation's stock: 25
309309 (A) The permit issued under this subchapter is void; and 26
310310 (B) The nonpublicly traded corporation: 27
311311 (i) Shall apply for a new permit under this 28
312312 subchapter; 29
313313 (ii) May be issued a new permit under this 30
314314 subchapter; and 31
315315 (iii) May operate under the voided permit for no 32
316316 more than thirty (30) days from the date of the change, removal, or 33
317317 replacement of the permit. 34
318318 (4) When a publicly traded corporation permitted under this 35
319319 subchapter changes, rem oves, or replaces the president or chief executive 36 HB1605
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324324 officer named on the permit or changes, removes, or replaces a stockholder 1
325325 who owns fifty percent (50%) or more of the total voting shares of the 2
326326 publicly traded corporation's stock: 3
327327 (A) The permit issued under this subchapter is void; and 4
328328 (B) The publicly traded corporation: 5
329329 (i) Shall apply for a new permit under this 6
330330 subchapter; 7
331331 (ii) May be issued a new permit under this 8
332332 subchapter; and 9
333333 (iii) May operate under the voided permit for no 10
334334 more than thirty (30) days from the date of the change, removal, or 11
335335 replacement of the permit. 12
336336 (e) An entity may apply for and be issued a permit under this 13
337337 subchapter in advance of the effective date of the permit to facilitate 14
338338 continuity of business operations. 15
339339 16
340340 20-56-405. Permits — Location — Background check required. 17
341341 (a)(1) A retail, wholesale, or manufacturer permit shall not be issued 18
342342 to a residential address, a mobile structure or vehicle, or for an address 19
343343 not zoned appropriately for the b usiness seeking to secure the permit. 20
344344 (2) A retail, wholesale, or manufacturer permit may be issued to 21
345345 a person who already holds a retail, wholesale, or manufacturer permit if the 22
346346 locations are different. 23
347347 (b) A permit shall not be issued to: 24
348348 (1) A person who has pleaded guilty or nolo contendere to or 25
349349 been found guilty of a felony; or 26
350350 (2) A business owned or operated, in whole or in part, by a 27
351351 person who has pleaded guilty or nolo contendere to or been found guilty of a 28
352352 felony. 29
353353 (c) Arkansas Tobacco Control shall conduct a criminal background check 30
354354 on each permit applicant and application, utilizing its Arkansas Crime 31
355355 Information Center access as a law enforcement agency, in accordance with §§ 32
356356 12-12-1008 — 12-12-1011. 33
357357 34
358358 20-56-406. Permits — Annual privilege fees. 35
359359 (a) The annual privilege fee for each permit authorized by this 36 HB1605
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364364 subchapter is established as follows: 1
365365 (1) Wholesale Hemp-derived Products Permit .............. $1,000 2
366366 (2) Retail Hemp-derived Products Permit ................... $200 3
367367 (3) Manufacturer Hemp -derived Products Permit .......... $10,000 4
368368 (b)(1) All permits issued under this subchapter shall expire on June 5
369369 30 following the effective date of issuance. 6
370370 (2)(A) Upon the failure to timely renew a permit issued under 7
371371 this subchapter, a late fee of two (2) times the amount of the appropriate 8
372372 permit fee shall be owed in addition to the annual privilege fee for the 9
373373 permit. 10
374374 (B) An expired permit that is not renewed before September 11
375375 1 following the expiration of the per mit shall not be renewed, and the holder 12
376376 of the expired permit shall submit an application for a new permit. 13
377377 (3) A permit shall not be issued to the applicant until the late 14
378378 fee and the permit fee have been paid. 15
379379 (c) A permit issued under this subchapter shall not be renewed for a 16
380380 permit holder who is delinquent more than ninety (90) days on a privilege 17
381381 fee, tax relating to the sale or dispensing of hemp -derived products, or any 18
382382 other state and local tax due the Secretary of the Department of Fi nance and 19
383383 Administration. 20
384384 (d) A person who is delinquent more than ninety (90) days on a state 21
385385 or local tax may not renew or obtain a permit issued under this subchapter 22
386386 except upon certification that the permit holder has entered into a repayment 23
387387 agreement with the Department of Finance and Administration and is current on 24
388388 the payments. 25
389389 (e) A permit holder who has unpaid fees, civil penalties, or an 26
390390 unserved permit suspension may not transfer, sell, or give hemp -derived 27
391391 product inventory of the busines s associated with the permit to a third party 28
392392 until all fees and civil penalties are paid in full and all suspensions are 29
393393 completed successfully, nor shall any third party be issued a new permit for 30
394394 the business location. 31
395395 (f) Each manufacturer, wholesale r, and retailer shall retain copies of 32
396396 all invoices for the purchase or sale of any hemp -derived products for a 33
397397 period of at least three (3) years subject to examination by the Secretary of 34
398398 the Department of Finance and Administration and the Director of A rkansas 35
399399 Tobacco Control or their authorized agents upon demand at any time during 36 HB1605
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404404 regular business hours. 1
405405 (g) A retailer shall: 2
406406 (1) Maintain copies of at least the last ninety (90) days of 3
407407 hemp-derived product invoices, which the retailer shall provid e immediately 4
408408 upon demand; 5
409409 (2)(A) Make the invoices that are older than ninety (90) days 6
410410 available upon demand at any time during normal business hours in the retail 7
411411 store. 8
412412 (B) Except as provided in subdivision (g)(2)(C) of this 9
413413 section, an agent of Arkansas Tobacco Control may determine a reasonable time 10
414414 frame for which invoices are to be provided under subdivision (g)(2)(A) of 11
415415 this section. 12
416416 (C) An invoice that is provided seventy -two (72) hours or 13
417417 more after the demand shall not be considered f or purposes of determining a 14
418418 violation of this subsection; 15
419419 (3) Retain invoices for all hemp -derived products in the retail 16
420420 store even if the invoice for the hemp -derived products is older than three 17
421421 (3) years; 18
422422 (4) Maintain a copy of the signed server awareness forms for 19
423423 each employee of the retailer who engages in the sale of hemp -derived 20
424424 products, which the retailer shall provide immediately upon demand; 21
425425 (5)(A) Maintain a copy of any complete transfer forms showing: 22
426426 (i) The hemp-derived products that were transferred; 23
427427 (ii) The permitted location from which the hemp -24
428428 derived products were transferred; and 25
429429 (iii) When the transfer occurred. 26
430430 (B) A transfer form shall be completed contemporaneously 27
431431 with the transfer and shall be provid ed immediately by the retailer upon 28
432432 demand; and 29
433433 (6) If any inventory was submitted with a permit application, 30
434434 maintain a copy of the submitted inventory form, which the retailer shall 31
435435 provide immediately upon demand. 32
436436 (h) A wholesaler and manufacturer shall: 33
437437 (1) Maintain three (3) years of hemp -derived product invoices 34
438438 that are available upon demand during normal business hours in the permitted 35
439439 location; and 36 HB1605
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444444 (2) Permit Arkansas Tobacco Control and authorized personnel of 1
445445 Arkansas Tobacco Control t o enter into and inspect stock of hemp -derived 2
446446 products, and any documents and records relating to receipts and 3
447447 disbursements of hemp -derived products. 4
448448 (i) An invoice from a wholesaler to a retailer shall contain the name 5
449449 or other identifying information of the wholesaler and the retailer. 6
450450 (j)(1) A nonresident wholesaler shall also keep a record of all hemp -7
451451 derived products purchased for distribution within this state. 8
452452 (2) All books, records, and memoranda pertaining to the purchase 9
453453 and sale of the hemp-derived products under subdivision (j)(1) of this 10
454454 section shall be subject to inspection by Arkansas Tobacco Control. 11
455455 (k) Authorized personnel of Arkansas Tobacco Control shall not release 12
456456 to the Arkansas Tobacco Control Board or to the public any in formation 13
457457 identifying customers of the manufacturer, wholesaler, or warehouse except 14
458458 when necessary to notify the board of alleged violations of this subchapter. 15
459459 16
460460 20-56-407. Permits — Not transferable — Duplicates. 17
461461 (a) A permit under this subchapter is not transferable to a: 18
462462 (1) Subsequent owner or operator; or 19
463463 (2) Different physical location unless the permit holder obtains 20
464464 permission from the Director of Arkansas Tobacco Control. 21
465465 (b) A person purchasing an existing permitted retail location may 22
466466 operate under the selling owner's permit for no more than thirty (30) days 23
467467 from the date of the sale. 24
468468 (c) When a permit is lost by a permit holder, a duplicate permit may 25
469469 be issued upon application and for a fee of five dollars ($5.00) when 26
470470 sufficient proof has been given the Director of Arkansas Tobacco Control. 27
471471 28
472472 20-56-408. Permits — Suspension or revocation. 29
473473 (a) All permits issued under this subchapter may be suspended or 30
474474 revoked by the Director of Arkansas Tobacco Control for any violation of t his 31
475475 subchapter or the rules pertaining to this subchapter, subject to a hearing 32
476476 before the Arkansas Tobacco Control Board at the next regularly scheduled 33
477477 board meeting. 34
478478 (b) The director may revoke all permits to deal in hemp -derived 35
479479 products associated w ith any person who is convicted of or pleads guilty or 36 HB1605
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484484 nolo contendere to criminally violating this subchapter, subject to a hearing 1
485485 before the board at the next regularly scheduled board meeting. 2
486486 3
487487 20-56-409. Advertising prohibitions and packaging requir ements. 4
488488 (a) A hemp-derived product distributed or offered for sale in this 5
489489 state shall include the following information on the product label or product 6
490490 packaging: 7
491491 (1) The name of the hemp -derived product manufacturer, whether 8
492492 in-state or out-of-state, and distributor, whether in -state or out-of-state; 9
493493 (2) Product labeling clearly showing that the product contains 10
494494 material derived from hemp and not marijuana or medical marijuana; and 11
495495 (3) Any other marking, words, statement, or symbol as required 12
496496 by Arkansas Tobacco Control by rule. 13
497497 (b) A person shall not advertise, market, or offer for sale in this 14
498498 state any hemp-derived product by using, in the labeling or design of the 15
499499 product, its packaging, or in its advertising or marketing materials, trade 16
500500 dress, trademarks, branding, or other related imagery that: 17
501501 (1) Imitates or replicates those of food brands or other related 18
502502 products that are marketed to or are commonly associated with children or 19
503503 minors, including without limitation breakfast cereal , cookies, juice drinks, 20
504504 frozen drinks, ice creams, sorbets, sherbets, and frozen pops; 21
505505 (2) Depicts or signifies characters or symbols that are known to 22
506506 a reasonable person to appeal primarily to or are commonly associated with 23
507507 children or minors, inclu ding without limitation superheroes, cartoons or 24
508508 cartoon characters, including anime characters, comic book characters, video 25
509509 game characters, television show characters, movie characters, mythical 26
510510 creatures, unicorns, or that otherwise incorporates relate d imagery or 27
511511 scenery; or 28
512512 (3) Uses the terms "candy", "candies", “cake",” “cakes", “pies", 29
513513 or “cupcakes” or any variant of these terms, or any other term referencing a 30
514514 type or brand of candy, cakes, pastries, or pies, including types or brands 31
515515 of candy, cakes, pastries, or pies that do not include the words "candy", 32
516516 "candies", “cake", “cakes", “pies", or “cupcakes” in their names, labels, or 33
517517 slogans. 34
518518 35
519519 20-56-410. Testing. 36 HB1605
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522522
523523
524524 (a) All hemp-derived products sold in this state shall be tested by an 1
525525 approved laboratory. 2
526526 (b) An approved laboratory shall be an independent third -party 3
527527 laboratory. 4
528528 (c) A hemp-derived product sold in this state shall be tested for the 5
529529 following and marked as to the hemp -derived product chemical makeup before 6
530530 being sold to consum ers: 7
531531 (1) Cannabinoid profile; 8
532532 (2) Solvents; 9
533533 (3) Pesticides; 10
534534 (4) Microbials; 11
535535 (5) Heavy metals; and 12
536536 (6) Foreign matter. 13
537537 (d) A hemp-derived product shall not be distributed or sold in this 14
538538 state without a certificate of analysis from an ap proved laboratory that 15
539539 confirms: 16
540540 (1) The hemp-derived product was tested by an approved 17
541541 laboratory; 18
542542 (2) A tested representative sample of the hemp -derived product 19
543543 contained a total tetrahydrocannabinol concentration that did not exceed 20
544544 three-tenths percent (0.3%) under by this subchapter; and 21
545545 (3) A detailed analysis and list of chemical makeup of the 22
546546 tested hemp-derived product under subsection (c) of this section. 23
547547 (e) Arkansas Tobacco Control may periodically sample, analyze, and 24
548548 test any hemp-derived product located in this state. 25
549549 (f) The Director of Arkansas Tobacco Control may: 26
550550 (1) Investigate and issue subpoenas to any permittee or approved 27
551551 laboratory used by a permittee that the director has reasonable suspicion of 28
552552 intentionally produc ing falsified test results on hemp -derived products; and 29
553553 (2) Promulgate rules for the enforcement of this section and set 30
554554 penalties for any violation of the rules. 31
555555 32
556556 20-56-411. Providing minors with hemp -derived products — Purchase, 33
557557 use, or possession prohibited. 34
558558 (a)(1) It is unlawful for any person to give, barter, or sell to a 35
559559 minor a hemp-derived product. 36 HB1605
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564564 (2) Except as provided in subdivision (a)(3) of this section, a 1
565565 person who pleads guilty or nolo contendere to or is found guilty of 2
566566 violating subdivision (a)(1) of this section is guilty of a Class A 3
567567 misdemeanor. 4
568568 (3) An employee or owner of a retail location permitted under 5
569569 this subchapter who violates subdivision (a)(1) of this section while inside 6
570570 the retail location upon conviction is sub ject to a fine not to exceed one 7
571571 hundred dollars ($100) per violation. 8
572572 (b)(1) It is unlawful for a minor to: 9
573573 (A) Use or possess or to purchase or attempt to purchase a 10
574574 hemp-derived product; or 11
575575 (B) For the purpose of obtaining or attempting to obt ain a 12
576576 hemp-derived product, falsely represent himself or herself not to be a minor 13
577577 by displaying proof of age that is false, fraudulent, or not actually proof 14
578578 of the minor's age. 15
579579 (2) Any hemp-derived product found in the possession of a minor 16
580580 may be confiscated and destroyed by a law enforcement officer. 17
581581 (c)(1) It is not an offense under subsection (b) of this section if: 18
582582 (A) The minor was acting at the direction of an authorized 19
583583 agent of Arkansas Tobacco Control to enforce or ensure compliance wit h laws 20
584584 relating to the prohibition of the sale of hemp -derived product to minors; 21
585585 (B) The minor was acting at the direction of an authorized 22
586586 agent of the Division of Aging, Adult, and Behavioral Health Services of the 23
587587 Department of Human Services to co mpile statistical data relating to the sale 24
588588 of hemp-derived products to minors; 25
589589 (C) The minor was acting at the request of a permit holder 26
590590 to assist the permit holder by performing a check on the permit holder's own 27
591591 retail business to see if the permit holder's employees would sell hemp -28
592592 derived products to the minor; or 29
593593 (D) The minor was acting as an agent of a retail permit 30
594594 holder within the scope of employment. 31
595595 (2) A minor performing activities under subdivision (c)(1) of 32
596596 this section shall: 33
597597 (A) Display the appearance of a minor; 34
598598 (B) Have the written consent of the minor's parent or 35
599599 guardian to perform the activity on file with the agency utilizing the minor; 36 HB1605
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604604 and 1
605605 (C)(i) Present a true and correct identification if asked. 2
606606 (ii) Any failure on the part of a minor to provide 3
607607 true and correct identification upon request is a defense to any action under 4
608608 this section or a civil action under § 26 -57-256. 5
609609 (d) Any person who sells hemp -derived products has the right to deny 6
610610 the sale of any hemp-derived product to any person. 7
611611 (e) It is unlawful for any person who has been issued a permit or a 8
612612 license under this subchapter to fail to display in a conspicuous place a 9
613613 sign indicating that the sale of hemp -derived products to or purchase or 10
614614 possession of hemp-derived products by a minor is prohibited by law. 11
615615 (f) It is unlawful for any manufacturer whose hemp -derived product is 12
616616 distributed in this state and any person who has been issued a permit or 13
617617 license under this subchapter to distribut e a free sample of any hemp -derived 14
618618 product, or any component of a hemp -derived product or coupon that entitles 15
619619 the holder of the coupon to any free sample of any hemp -derived product, or 16
620620 any component of a hemp -derived product: 17
621621 (1) In or on any public street or sidewalk within five hundred 18
622622 feet (500') of any playground, public school, or other facility when the 19
623623 playground, public school, or other facility is being used primarily by 20
624624 minors for recreational, educational, or other purposes; or 21
625625 (2) To any minor. 22
626626 (g) It is unlawful for any person that has been issued a permit or 23
627627 license under this subchapter to: 24
628628 (1) Sell or distribute a hemp -derived product through a self -25
629629 service display, a vending machine, or an order executed solely over the 26
630630 internet or similar means; or 27
631631 (2) Advertise or promote hemp -derived products in a manner that 28
632632 is intended to appeal to children. 29
633633 (h) Any retail permit holder or license holder who violates any 30
634634 provision in this section is deemed guilty of a violation and sub ject to 31
635635 penalties under § 26 -57-256. 32
636636 (i)(1) A notice of an alleged violation of this section shall be given 33
637637 to the holder of a retail permit or license or an agent of the holder within 34
638638 ten (10) days of the alleged violation. 35
639639 (2)(A) The notice under subdivision (i)(1) of this section shall 36 HB1605
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643643
644644 contain the date and time of the alleged violation. 1
645645 (B)(i) The notice under subdivision (i)(1) of this section 2
646646 shall also include either the name of the person making the alleged sale or 3
647647 information reasonably necessary to determine the location in the store that 4
648648 allegedly made the sale. 5
649649 (ii) When appropriate, information under subdivision 6
650650 (i)(2)(B)(i) of this section should include, but not be limited to, the: 7
651651 (a) Cash register number of the sale in the 8
652652 store; 9
653653 (b) Physical location of the sale in the 10
654654 store; and 11
655655 (c) If possible, the lane or aisle number of 12
656656 the sale in the store. 13
657657 (j) Notwithstanding the provisions of subsection (h) of this section, 14
658658 the court shall consider the following factors when reviewing a possible 15
659659 violation: 16
660660 (1) The business has adopted and enforced a written policy 17
661661 against selling hemp -derived products to minors; 18
662662 (2) The business has informed its employees of the applicable 19
663663 laws regarding the sale of hemp-derived products to minors; 20
664664 (3) The business has required employees to verify the age of a 21
665665 customer attempting to purchase a hemp -derived product by way of photographic 22
666666 identification; 23
667667 (4) The business has established and imposed disciplinary 24
668668 sanctions for noncompliance; and 25
669669 (5) That the appearance of the purchaser of the hemp -derived 26
670670 product was such that an ordinary prudent person would believe him or her to 27
671671 be of legal age to make the purchase. 28
672672 (k) A person convicted of vio lating any provision of this section 29
673673 whose permit or license to distribute or sell a hemp -derived product is 30
674674 suspended or revoked upon conviction shall surrender to the court any permit 31
675675 or license to distribute or sell a hemp -derived product, and the court shall 32
676676 transmit the permit or license to distribute or sell a hemp -derived product 33
677677 to the Director of Arkansas Tobacco Control: 34
678678 (1) To suspend or revoke the person's permit or license to 35
679679 distribute or sell a hemp -derived product and to not renew the per mit or 36 HB1605
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682682
683683
684684 license; and 1
685685 (2) Not to issue any new permit or license to that person for 2
686686 the period of time determined by the court in accordance with this section. 3
687687 4
688688 20-56-412. Enforcement — Penalties. 5
689689 (a) It is the duty of all state, county, and city offi cers to assist 6
690690 Arkansas Tobacco Control in enforcing this subchapter. 7
691691 (b) A person within the jurisdiction of this state who is not 8
692692 permitted to sell, deliver, or cause to be delivered hemp -derived products to 9
693693 retailers or consumers and who sells, takes orders from, delivers, or causes 10
694694 to be delivered immediately or in the future any hemp -derived products to 11
695695 retailers or consumers, is guilty of a Class A misdemeanor. 12
696696 (c) A person engaged in buying, selling, or otherwise doing business 13
697697 in hemp-derived products in this state without first obtaining the proper 14
698698 permit upon conviction is guilty of a Class A misdemeanor. 15
699699 16
700700 20-56-413. Rules. 17
701701 The Director of Arkansas Tobacco Control and Arkansas Tobacco Control 18
702702 may promulgate rules for the proper enforcement of their powers and duties 19
703703 under this subchapter, including without limitation the regulation of 20
704704 processing, transportation, delivery, sale, and purchase of hemp -derived 21
705705 products in accordance with this subchapter and the power to levy penalties 22
706706 for violations of this subchapter. 23
707707 24
708708 SECTION 4. Arkansas Code § 26 -57-247(b), concerning seizure, 25
709709 forfeiture, and disposition of tobacco products and other property, is 26
710710 amended to read as follows: 27
711711 (b) The Director of Arkansas Tobacco Control may seize and hold fo r 28
712712 disposition of the courts or the Arkansas Tobacco Control Board all tobacco 29
713713 products, vapor products, alternative nicotine products, or e-liquid 30
714714 products, or hemp-derived products found in the possession of a person 31
715715 dealing in, or a consumer of, tobacco products, vapor products, alternative 32
716716 nicotine products, or e-liquid products, or hemp-derived products if: 33
717717 (1) Prima facie evidence exists that the full amount of excise 34
718718 tax due on the tobacco products has not been paid to the Secretary of the 35
719719 Department of Finance and Administration; 36 HB1605
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723723
724724 (2) Tobacco products, vapor products, alternative nicotine 1
725725 products, or e-liquid products are in the possession of a wholesaler who does 2
726726 not possess a current Arkansas wholesale permit; 3
727727 (3) A retail establishment doe s not possess a current Arkansas 4
728728 retail permit; or 5
729729 (4) The tobacco products, vapor products, alternative nicotine 6
730730 products, or e-liquid products have been offered for sale to the public at 7
731731 another location without a current Arkansas retail permit ; or 8
732732 (5) Hemp-derived products are possessed, sold, or offered for 9
733733 sale in violation of § 20 -56-401 et seq. 10
734734 11
735735 SECTION 5. Arkansas Code § 26 -57-249(b), concerning the procedure for 12
736736 destruction of products upon conviction, is amended to read as follows: 13
737737 (b) Upon an administrative finding of guilty of any person charged 14
738738 with a violation of a state tobacco product, vapor product, alternative 15
739739 nicotine product, or e-liquid product, or hemp-derived product law or rule in 16
740740 a proceeding before the Arkansas Tobacco Con trol Board where the 17
741741 investigation resulted in the seizure of tobacco products, vapor products, 18
742742 alternative nicotine products, or e-liquid products, or hemp-derived 19
743743 products, the board shall issue an order to destroy the tobacco products, 20
744744 vapor products, alternative nicotine products, or e-liquid products, or hemp-21
745745 derived products confiscated by Arkansas Tobacco Control or by any state, 22
746746 county, or municipal officer in this state. 23
747747 24
748748 SECTION 6. Arkansas Code § 26 -57-255(g)(3)(A) — (C), concerning the 25
749749 creation of the Arkansas Tobacco Control Board, are amended to read as 26
750750 follows: 27
751751 (3)(A) Conduct public hearings when appropriate regarding a 28
752752 permit authorized under this subchapter or in violation of this subchapter, 29
753753 the Unfair Cigarette Sales Act, § 4 -75-701 et seq., § 5-27-227, § 20-56-401 30
754754 et seq., or any other federal, state, or local statute, ordinance, rule, or 31
755755 regulation concerning the sale of tobacco products, vapor products, 32
756756 alternative nicotine products, or e-liquid products, or hemp-derived products 33
757757 to minors or the rules promulgated by Arkansas Tobacco Control. 34
758758 (B) After notice and hearing held in accordance with the 35
759759 Arkansas Administrative Procedure Act, § 25 -15-201 et seq., if the board 36 HB1605
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764764 finds a violation of this subchapter, the Unfair Cigarette Sa les Act, § 4-75-1
765765 701 et seq., § 20-56-401 et seq., or the rules promulgated by Arkansas 2
766766 Tobacco Control, the board may suspend or revoke any or all permits issued by 3
767767 the director to any person. 4
768768 (C) The board may levy a civil penalty in an amount not to 5
769769 exceed five thousand dollars ($5,000) for each violation against a person 6
770770 found to be in violation of this subchapter, the Unfair Cigarette Sales Act, 7
771771 § 4-75-701 et seq., § 20-56-401 et seq., or the rules promulgated by Arkansas 8
772772 Tobacco Control. 9
773773 10
774774 SECTION 7. Arkansas Code § 26 -57-256(a)(2) and (3), concerning the 11
775775 powers of Arkansas Tobacco Control, are amended to read as follows: 12
776776 (2)(A) Receive applications for and issue, refuse, suspend, and 13
777777 revoke permits listed in § 26 -57-219 and § 20-56-401 et seq. 14
778778 (B) Arkansas Tobacco Control shall refuse to issue or 15
779779 renew any permits issued by the Director of Arkansas Tobacco Control for the 16
780780 failure to pay: 17
781781 (i) Any applicable taxes or fees imposed on tobacco 18
782782 products,; 19
783783 (ii) Permit permit fees imposed under this 20
784784 subchapter or on hemp-derived products under § 20 -56-401 et seq.;, or 21
785785 (iii) Other any other state or local taxes; 22
786786 (3) Prescribe forms of applications for permits under this 23
787787 subchapter and § 20-56-401 et seq.; 24
788788 25
789789 SECTION 8. Arkansas Code § 26-57-256(b), concerning the authority of 26
790790 Arkansas Tobacco Control to enforce the laws against possession by a minor, 27
791791 is amended to read as follows: 28
792792 (b) Any tobacco products, vapor products, alternative nicotine 29
793793 products, e-liquid products, hemp-derived products as defined in § 20 -56-402, 30
794794 or cigarette papers found in the possession of a minor may be confiscated and 31
795795 destroyed. 32
796796 33
797797 SECTION 9. DO NOT CODIFY. Rules. 34
798798 (a) When adopting the initial rules required under this act, Arkansas 35
799799 Tobacco Control shall file the final rules with the Secretary of State for 36 HB1605
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802802
803803
804804 adoption under § 25-15-204(f): 1
805805 (1) On or before January 1, 2024; or 2
806806 (2) If approval under § 10 -3-309 has not occurred by January 1, 3
807807 2024, as soon as practicable after approval under § 10 -3-309. 4
808808 (b) Arkansas Tobacco Control shall file the proposed rules with the 5
809809 Legislative Council under § 10 -3-309(c) sufficiently in advance of January 1, 6
810810 2024, so that the Legislative Council may consider the rules for approval 7
811811 before January 1, 2024. 8
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