Stricken language would be deleted from and underlined language would be added to present law.
*JMB136* 3/13/2023 9:20:36 AM JMB136
State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 HOUSE BILL 1605 3
4
By: Representative J. Moore 5
By: Senators J. Bryant, Irvin, Hester 6
7
For An Act To Be Entitled 8
AN ACT TO PROVIDE RE GULATION OF HEMP-DERIVED PRODUCTS 9
BY THE ARKANSAS TOBA CCO CONTROL BOARD; A ND FOR OTHER 10
PURPOSES. 11
12
13
Subtitle 14
TO PROVIDE REGULATION OF HEMP -DERIVED 15
PRODUCTS BY THE ARKANSAS TOBACCO CONTROL 16
BOARD. 17
18
19
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 20
21
SECTION 1. Arkansas Code § 19 -6-831(b)(1), concerning the Arkansas 22
Tobacco Control Revenue Fund, is amended to read as follows: 23
(b)(1) All permit and license fees received by Arkansas Tobacco 24
Control under the Arkansas Tobacco Products Tax Act of 1977, § 26 -57-201 et 25
seq., and § 20-56-401 et seq., shall be deposited into the State Treasury as 26
special revenues to the credit of the fund. 27
28
SECTION 2. Arkansas Code § 19 -6-831(c)(1), concerning the Arkansas 29
Tobacco Control Revenue Fund, is amended to read as follows: 30
(c)(1) The fund shall be used for expenses incurred by Arkansas 31
Tobacco Control in the organization, maintenance, ope ration, and merchant 32
education and training with regard to enforcement of § 5 -27-227, the Arkansas 33
Tobacco Products Tax Act of 1977, § 26 -57-201 et seq., § 20-56-401 et seq., 34
and the Unfair Cigarette Sales Act, § 4 -75-701 et seq. 35
36 HB1605
2 3/13/2023 9:20:36 AM JMB136
SECTION 3. Arkansas Cod e Title 20, Chapter 56, is amended to add an 1
additional subchapter to read as follows: 2
Subchapter 4 - Hemp-Derived Products 3
4
20-56-401. Purpose. 5
It is the intent of this subchapter to provide regulation of hemp -6
derived products to: 7
(1) Assure that when hemp-derived products are distributed in 8
the state, they are not contaminated and are distributed only to persons 9
authorized to receive hemp -derived products; and 10
(2) Protect and promote the public health and welfare of the 11
residents of this state. 12
13
20-56-402. Definitions. 14
As used in this subchapter: 15
(1) “Annual” or “annually” means the fiscal year from July 1 16
through the next June 30; 17
(2) “Approved Laboratory” means a laboratory that is accredited 18
by the National Institute on Drug Abuse, the National Environmental 19
Laboratory Accreditation Conference, the International Organization for 20
Standardization or similar accrediting entity as determined by Arkansas 21
Tobacco Control and that has been approved by the Director of Arkansas 22
Tobacco Control specifically for the testing of hemp -derived product; 23
(3) “Consumer” means a member of the public at large; 24
(4) “Days” means calendar days unless otherwise specified; 25
(5) "Finished product" means a product intended for consumer use 26
to be sold at retail; 27
(6) "Hemp" means the plant Cannabis sativa and any part of the 28
plant, including the seeds of the plant, that contains a delta -9 29
tetrahydrocannabinol concentration of three -tenths percent (0.3%) or less on 30
a dry-weight basis, and all derivatives, extracts, cannabinoids, isomers, 31
acids, salts, and salts of isomers, whether growing or not; 32
(7) “Hemp-derived e-liquid product” means a liquid hemp -derived 33
product that contains hemp that is inhaled when using a vapor product, and 34
that may or may not include without limitation propylene glycol, vegetable 35
glycerin, and flavorings; 36 HB1605
3 3/13/2023 9:20:36 AM JMB136
(8)(A) "Hemp-derived product" means a product intended for human 1
consumption including consumption by vapor inhalation as defined in this 2
subchapter, or a component of a pr oduct, that is derived from hemp, including 3
all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of 4
isomers, and any product made from such derivatives. 5
(B) "Hemp-derived product" includes a hemp -derived e-6
liquid product and a vapo r product. 7
(C) "Hemp-derived product" does not include: 8
(i) A product intended for animal consumption or 9
use; 10
(ii) A cosmetic as defined by § 20 -56-202(6); 11
(iii) Any marijuana, medical marijuana, or other 12
cannabis product containing delt a-9 tetrahydrocannabinol greater than three -13
tenths percent (0.3%) on a dry weight basis as administered, licensed, and 14
otherwise regulated by the Alcoholic Beverage Control Division, the Medical 15
Marijuana Commission, and the Department of Health under Arka nsas 16
Constitution, Amendment 98; 17
(iv) A raw hemp product, including any intact plant, 18
flower, buds, leaves, or stems; 19
(v) A drug in the form for which an application 20
filed in accordance with 21 U.S.C. § 355 is approved by the United States 21
Food and Drug Administration; 22
(vi) A dietary supplements as defined by the Federal 23
Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq.; or 24
(vii) A fabric, textile, cordage, fiber, fuel, 25
paper, construction material, plastic, seed, seed meal, and seed oil; 26
(9)(A) “Manufacturer” means a person that manufactures, 27
fabricates, assembles, or processes a hemp -derived product, including without 28
limitation federally licensed importers and federally licensed distributors 29
that deal in hemp-derived products. 30
(B) “Manufacturer” includes: 31
(i) A sales entity affiliate of the manufacturer or 32
any other entity representing the manufacturer with regard to the sale of 33
hemp-derived products produced by the manufacturer to wholesalers or 34
permitted retailers; and 35
(ii) A person that mixes, compounds, extracts, 36 HB1605
4 3/13/2023 9:20:36 AM JMB136
infuses, blends, processes, repackages, or resizes hemp -derived products 1
including the extraction of cannabinoids from hemp biomass. 2
(C) “Manufacturer” does not include a person who engages 3
in the agricultural production of hemp, such as growing, planting, and 4
harvesting of raw hemp biomass regulated by the State Plant Board; 5
(10)(A) “Minor” means a person who is under twenty -one (21) 6
years of age. 7
(B) “Minor” does not include a person who: 8
(i) Is under twenty -one (21) years of age if the 9
person presents a military identification card establishing that he or she is 10
a member of the United States Armed Forces; or 11
(ii) Has attained nineteen (19) years of age as of 12
December 31, 2019; 13
(11) "Person” means an individual, retailer, wholesaler, 14
manufacturer, firm, association, company, partnership, limited liability 15
company, corporation, joint -stock company, club, agency, syndicate, the State 16
of Arkansas, county, municipal corporation or othe r political subdivision of 17
the state, receiver, trustee, fiduciary, or trade association; 18
(12) “Place of business” means the physical location: 19
(A) Where orders for hemp -derived products are taken or 20
received or where hemp -derived products are sold; and 21
(B) That is on file with Arkansas Tobacco Control; 22
(13) “Retailer” means a person that purchases hemp -derived 23
products from permitted wholesalers for the purpose of selling the hemp -24
derived products in person and over the counter at retail to c onsumers; 25
(14)(A) “Sale” or “sell” means a transfer, exchange, or barter 26
in any manner or by any means for any consideration, including distributing 27
or shipping hemp-derived product in connection with a sale. 28
(B) A sale “in” or “into” a state refers to the state in 29
which the destination point of the hemp -derived product is located in the 30
sale without regard to where title was transferred. 31
(C) A sale “from” a state refers to the sale of a hemp -32
derived product that is located in that state to the destination in question 33
without regard to where title was transferred; 34
(15) “Self-service display” means a display: 35
(A) That contains a hemp -derived product, or any component 36 HB1605
5 3/13/2023 9:20:36 AM JMB136
of a hemp-derived product; 1
(B) That is located in an area where custom ers are 2
permitted; and 3
(C) In which the hemp -derived product, or any component of 4
a hemp-derived product is readily accessible to a customer without the 5
assistance of a salesperson; 6
(16) “Tetrahydrocannabinol” means a compound that is the 7
natural, primary active cannabinoid substance or its equivalent contained in 8
the plant of the genus cannabis or in the resinous extracts of the plant, 9
including derivatives or isomers derived from such cannabinoids; 10
(17) “Vapor product” means hemp -derived product that is an 11
electronic oral device of any size or shape that contains a vapor of hemp or 12
hemp-derived e-liquid product that when used or inhaled simulates smoking, 13
regardless of whether a visible vapor is produced, including without 14
limitation a device tha t: 15
(A) Is composed of a heating element, battery, electronic 16
circuit, chemical process, mechanical device, or a combination of heating 17
element, battery, electronic circuit, chemical process, or mechanical device; 18
(B) Works in combination with a car tridge, other 19
container, or liquid delivery device containing hemp or hemp -derived e-liquid 20
product and manufactured for use with vapor products; 21
(C) Is manufactured, distributed, marketed, or sold as any 22
type or derivation of a vapor product, e -cigarette, e-cigar, e-pipe, or any 23
other produced name or descriptor; and 24
(D) Does not include a product regulated as a drug or 25
device by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., 26
as it existed on January 1, 2015; 27
(18) “Warehouse” means a place where hemp -derived products are 28
stored for another person and to or from which place the hemp -derived 29
products are shipped or delivered upon order by the owner of the hemp -derived 30
products to the warehouse; and 31
(19) “Wholesaler” means a p erson that: 32
(A) Does business within the state; 33
(B) Purchases hemp-derived products from any source; and 34
(C) Distributes or sells the hemp -derived products to 35
other wholesalers or retailers. 36 HB1605
6 3/13/2023 9:20:36 AM JMB136
1
20-56-403. Construction. 2
(a) A hemp-derived product shall not be delivered, sold, or otherwise 3
distributed in this state except in conformity with all applicable laws and 4
regulations, including this subchapter and any rules promulgated under this 5
subchapter. 6
(b) A person shall not sell a hemp -derived product without being 7
permitted by Arkansas Tobacco Control. 8
(c) A product intended for human consumption or inhalation that is 9
derived from hemp and contains tetrahydrocannabinol shall not be permitted or 10
allowed under the laws of this state, other than hemp-derived products. 11
(d) A hemp-derived product shall be prepackaged and shelf stable. 12
(e) A hemp-derived product shall not contain or include any of the 13
following: 14
(1) Alcoholic beverages, including without limitation beer, 15
wine, intoxicating li quor, or any other alcoholic beverage as defined by § 3 -16
1-101 et seq. and § 3-5-202; 17
(2) Products containing nicotine or tobacco; 18
(3) Inhalable products or other products labeled or advertised 19
for the purpose of smoking or in the form of a cigarette, cigar, or pre-roll, 20
or packaged or combined with other items designed to facilitate smoking such 21
as rolling papers or pipes, except hemp -derived e-liquid products; or 22
(4) Medical devices, prescription drugs, or drugs otherwise 23
approved by the United St ates Food and Drug Administration. 24
(f) The business of handling, receiving, possessing, storing, 25
distributing, taking orders for, soliciting orders of, selling, offering for 26
sale, and dealing in, through sale, barter, or exchange, hemp -derived 27
products is declared to be a privilege under the Arkansas Constitution and 28
laws of the State of Arkansas. 29
30
20-56-404. Permits. 31
(a)(1) Each person listed in this section, before commencing business, 32
or if already in business, before continuing business, shall pay an annual 33
privilege fee and secure a permit from the Director of Arkansas Tobacco 34
Control. 35
(2) A person purchasing an existing permitted retail location 36 HB1605
7 3/13/2023 9:20:36 AM JMB136
may, with the permission of the seller and Arkansas Tobacco Control, operate 1
under the selling owne r's permit for no more than thirty (30) days from the 2
date of the sale. 3
(b)(1) In addition to securing a permit under subsection (a) of this 4
section, a manufacturer whose products are sold in this state shall register 5
with the Secretary of the Department of Finance and Administration. 6
(2) A wholesaler of hemp -derived products shall secure the 7
proper wholesale permit. 8
(3) Every retailer of hemp -derived products that operates a 9
place of business shall secure the proper retail permit. 10
(c)(1) Permits shall be issued as follows: 11
(A) A permit for a sole proprietorship is issued in the 12
owner's name and in the fictitious business name, if any; 13
(B)(i) A permit for a partnership or limited liability 14
company is issued in the name of: 15
(a) The managing partner or managing member; 16
and 17
(b) The partnership or limited liability 18
company. 19
(ii) If the managing partner or managing member of a 20
limited liability company is a partnership, limited liability company, or 21
corporation, then the permit shall be issued in the name of: 22
(a) The president or chief executive officer; 23
and 24
(b) The partnership or limited liability company; 25
and 26
(C) A permit for a publicly traded or nonpublicly traded 27
corporation is issued in the name of the president or chief executive officer 28
of the corporation and in the name of the corporation. 29
(2) It is a violation for a permitted entity not to provide 30
written notification to the director within thirty (30) days of a change in 31
the following: 32
(A) The managing partner, limited liability company 33
managing member, or president or chief executive officer of a corporation, 34
partnership, or limited liability company; or 35
(B) The stockholders effecting twenty -five percent (25%) 36 HB1605
8 3/13/2023 9:20:36 AM JMB136
or more of the total voting shares of a nonpublicly traded corporation. 1
(d)(1) When an entity transfers a business permitted under this 2
subchapter, the entity to which the business is transferred: 3
(A) Shall apply for a new permit under this subchapter; 4
(B) May be issued a n ew permit under this subchapter; and 5
(C) May operate under the selling entity's permit for no 6
more than thirty (30) days from the date of the sale. 7
(2) When a partnership or limited liability company permitted 8
under this subchapter changes, removes, or replaces the managing partner, 9
managing member, president, or chief executive officer: 10
(A) The existing permit issued under this subchapter is 11
void; and 12
(B) The partnership or limited liability company: 13
(i) Shall apply for a new permit und er this 14
subchapter; 15
(ii) May be issued a new permit under this 16
subchapter; and 17
(iii) May operate under the voided permit for no 18
more than thirty (30) days from the date of the change, removal, or 19
replacement of the permit. 20
(3) When a nonpublic ly traded corporation permitted under this 21
subchapter changes, removes, or replaces the president or chief executive 22
officer named on the permit or changes, removes, or replaces a stockholder 23
who owns fifty percent (50%) or more of the total voting shares of the 24
nonpublicly traded corporation's stock: 25
(A) The permit issued under this subchapter is void; and 26
(B) The nonpublicly traded corporation: 27
(i) Shall apply for a new permit under this 28
subchapter; 29
(ii) May be issued a new permit under this 30
subchapter; and 31
(iii) May operate under the voided permit for no 32
more than thirty (30) days from the date of the change, removal, or 33
replacement of the permit. 34
(4) When a publicly traded corporation permitted under this 35
subchapter changes, rem oves, or replaces the president or chief executive 36 HB1605
9 3/13/2023 9:20:36 AM JMB136
officer named on the permit or changes, removes, or replaces a stockholder 1
who owns fifty percent (50%) or more of the total voting shares of the 2
publicly traded corporation's stock: 3
(A) The permit issued under this subchapter is void; and 4
(B) The publicly traded corporation: 5
(i) Shall apply for a new permit under this 6
subchapter; 7
(ii) May be issued a new permit under this 8
subchapter; and 9
(iii) May operate under the voided permit for no 10
more than thirty (30) days from the date of the change, removal, or 11
replacement of the permit. 12
(e) An entity may apply for and be issued a permit under this 13
subchapter in advance of the effective date of the permit to facilitate 14
continuity of business operations. 15
16
20-56-405. Permits — Location — Background check required. 17
(a)(1) A retail, wholesale, or manufacturer permit shall not be issued 18
to a residential address, a mobile structure or vehicle, or for an address 19
not zoned appropriately for the b usiness seeking to secure the permit. 20
(2) A retail, wholesale, or manufacturer permit may be issued to 21
a person who already holds a retail, wholesale, or manufacturer permit if the 22
locations are different. 23
(b) A permit shall not be issued to: 24
(1) A person who has pleaded guilty or nolo contendere to or 25
been found guilty of a felony; or 26
(2) A business owned or operated, in whole or in part, by a 27
person who has pleaded guilty or nolo contendere to or been found guilty of a 28
felony. 29
(c) Arkansas Tobacco Control shall conduct a criminal background check 30
on each permit applicant and application, utilizing its Arkansas Crime 31
Information Center access as a law enforcement agency, in accordance with §§ 32
12-12-1008 — 12-12-1011. 33
34
20-56-406. Permits — Annual privilege fees. 35
(a) The annual privilege fee for each permit authorized by this 36 HB1605
10 3/13/2023 9:20:36 AM JMB136
subchapter is established as follows: 1
(1) Wholesale Hemp-derived Products Permit .............. $1,000 2
(2) Retail Hemp-derived Products Permit ................... $200 3
(3) Manufacturer Hemp -derived Products Permit .......... $10,000 4
(b)(1) All permits issued under this subchapter shall expire on June 5
30 following the effective date of issuance. 6
(2)(A) Upon the failure to timely renew a permit issued under 7
this subchapter, a late fee of two (2) times the amount of the appropriate 8
permit fee shall be owed in addition to the annual privilege fee for the 9
permit. 10
(B) An expired permit that is not renewed before September 11
1 following the expiration of the per mit shall not be renewed, and the holder 12
of the expired permit shall submit an application for a new permit. 13
(3) A permit shall not be issued to the applicant until the late 14
fee and the permit fee have been paid. 15
(c) A permit issued under this subchapter shall not be renewed for a 16
permit holder who is delinquent more than ninety (90) days on a privilege 17
fee, tax relating to the sale or dispensing of hemp -derived products, or any 18
other state and local tax due the Secretary of the Department of Fi nance and 19
Administration. 20
(d) A person who is delinquent more than ninety (90) days on a state 21
or local tax may not renew or obtain a permit issued under this subchapter 22
except upon certification that the permit holder has entered into a repayment 23
agreement with the Department of Finance and Administration and is current on 24
the payments. 25
(e) A permit holder who has unpaid fees, civil penalties, or an 26
unserved permit suspension may not transfer, sell, or give hemp -derived 27
product inventory of the busines s associated with the permit to a third party 28
until all fees and civil penalties are paid in full and all suspensions are 29
completed successfully, nor shall any third party be issued a new permit for 30
the business location. 31
(f) Each manufacturer, wholesale r, and retailer shall retain copies of 32
all invoices for the purchase or sale of any hemp -derived products for a 33
period of at least three (3) years subject to examination by the Secretary of 34
the Department of Finance and Administration and the Director of A rkansas 35
Tobacco Control or their authorized agents upon demand at any time during 36 HB1605
11 3/13/2023 9:20:36 AM JMB136
regular business hours. 1
(g) A retailer shall: 2
(1) Maintain copies of at least the last ninety (90) days of 3
hemp-derived product invoices, which the retailer shall provid e immediately 4
upon demand; 5
(2)(A) Make the invoices that are older than ninety (90) days 6
available upon demand at any time during normal business hours in the retail 7
store. 8
(B) Except as provided in subdivision (g)(2)(C) of this 9
section, an agent of Arkansas Tobacco Control may determine a reasonable time 10
frame for which invoices are to be provided under subdivision (g)(2)(A) of 11
this section. 12
(C) An invoice that is provided seventy -two (72) hours or 13
more after the demand shall not be considered f or purposes of determining a 14
violation of this subsection; 15
(3) Retain invoices for all hemp -derived products in the retail 16
store even if the invoice for the hemp -derived products is older than three 17
(3) years; 18
(4) Maintain a copy of the signed server awareness forms for 19
each employee of the retailer who engages in the sale of hemp -derived 20
products, which the retailer shall provide immediately upon demand; 21
(5)(A) Maintain a copy of any complete transfer forms showing: 22
(i) The hemp-derived products that were transferred; 23
(ii) The permitted location from which the hemp -24
derived products were transferred; and 25
(iii) When the transfer occurred. 26
(B) A transfer form shall be completed contemporaneously 27
with the transfer and shall be provid ed immediately by the retailer upon 28
demand; and 29
(6) If any inventory was submitted with a permit application, 30
maintain a copy of the submitted inventory form, which the retailer shall 31
provide immediately upon demand. 32
(h) A wholesaler and manufacturer shall: 33
(1) Maintain three (3) years of hemp -derived product invoices 34
that are available upon demand during normal business hours in the permitted 35
location; and 36 HB1605
12 3/13/2023 9:20:36 AM JMB136
(2) Permit Arkansas Tobacco Control and authorized personnel of 1
Arkansas Tobacco Control t o enter into and inspect stock of hemp -derived 2
products, and any documents and records relating to receipts and 3
disbursements of hemp -derived products. 4
(i) An invoice from a wholesaler to a retailer shall contain the name 5
or other identifying information of the wholesaler and the retailer. 6
(j)(1) A nonresident wholesaler shall also keep a record of all hemp -7
derived products purchased for distribution within this state. 8
(2) All books, records, and memoranda pertaining to the purchase 9
and sale of the hemp-derived products under subdivision (j)(1) of this 10
section shall be subject to inspection by Arkansas Tobacco Control. 11
(k) Authorized personnel of Arkansas Tobacco Control shall not release 12
to the Arkansas Tobacco Control Board or to the public any in formation 13
identifying customers of the manufacturer, wholesaler, or warehouse except 14
when necessary to notify the board of alleged violations of this subchapter. 15
16
20-56-407. Permits — Not transferable — Duplicates. 17
(a) A permit under this subchapter is not transferable to a: 18
(1) Subsequent owner or operator; or 19
(2) Different physical location unless the permit holder obtains 20
permission from the Director of Arkansas Tobacco Control. 21
(b) A person purchasing an existing permitted retail location may 22
operate under the selling owner's permit for no more than thirty (30) days 23
from the date of the sale. 24
(c) When a permit is lost by a permit holder, a duplicate permit may 25
be issued upon application and for a fee of five dollars ($5.00) when 26
sufficient proof has been given the Director of Arkansas Tobacco Control. 27
28
20-56-408. Permits — Suspension or revocation. 29
(a) All permits issued under this subchapter may be suspended or 30
revoked by the Director of Arkansas Tobacco Control for any violation of t his 31
subchapter or the rules pertaining to this subchapter, subject to a hearing 32
before the Arkansas Tobacco Control Board at the next regularly scheduled 33
board meeting. 34
(b) The director may revoke all permits to deal in hemp -derived 35
products associated w ith any person who is convicted of or pleads guilty or 36 HB1605
13 3/13/2023 9:20:36 AM JMB136
nolo contendere to criminally violating this subchapter, subject to a hearing 1
before the board at the next regularly scheduled board meeting. 2
3
20-56-409. Advertising prohibitions and packaging requir ements. 4
(a) A hemp-derived product distributed or offered for sale in this 5
state shall include the following information on the product label or product 6
packaging: 7
(1) The name of the hemp -derived product manufacturer, whether 8
in-state or out-of-state, and distributor, whether in -state or out-of-state; 9
(2) Product labeling clearly showing that the product contains 10
material derived from hemp and not marijuana or medical marijuana; and 11
(3) Any other marking, words, statement, or symbol as required 12
by Arkansas Tobacco Control by rule. 13
(b) A person shall not advertise, market, or offer for sale in this 14
state any hemp-derived product by using, in the labeling or design of the 15
product, its packaging, or in its advertising or marketing materials, trade 16
dress, trademarks, branding, or other related imagery that: 17
(1) Imitates or replicates those of food brands or other related 18
products that are marketed to or are commonly associated with children or 19
minors, including without limitation breakfast cereal , cookies, juice drinks, 20
frozen drinks, ice creams, sorbets, sherbets, and frozen pops; 21
(2) Depicts or signifies characters or symbols that are known to 22
a reasonable person to appeal primarily to or are commonly associated with 23
children or minors, inclu ding without limitation superheroes, cartoons or 24
cartoon characters, including anime characters, comic book characters, video 25
game characters, television show characters, movie characters, mythical 26
creatures, unicorns, or that otherwise incorporates relate d imagery or 27
scenery; or 28
(3) Uses the terms "candy", "candies", “cake",” “cakes", “pies", 29
or “cupcakes” or any variant of these terms, or any other term referencing a 30
type or brand of candy, cakes, pastries, or pies, including types or brands 31
of candy, cakes, pastries, or pies that do not include the words "candy", 32
"candies", “cake", “cakes", “pies", or “cupcakes” in their names, labels, or 33
slogans. 34
35
20-56-410. Testing. 36 HB1605
14 3/13/2023 9:20:36 AM JMB136
(a) All hemp-derived products sold in this state shall be tested by an 1
approved laboratory. 2
(b) An approved laboratory shall be an independent third -party 3
laboratory. 4
(c) A hemp-derived product sold in this state shall be tested for the 5
following and marked as to the hemp -derived product chemical makeup before 6
being sold to consum ers: 7
(1) Cannabinoid profile; 8
(2) Solvents; 9
(3) Pesticides; 10
(4) Microbials; 11
(5) Heavy metals; and 12
(6) Foreign matter. 13
(d) A hemp-derived product shall not be distributed or sold in this 14
state without a certificate of analysis from an ap proved laboratory that 15
confirms: 16
(1) The hemp-derived product was tested by an approved 17
laboratory; 18
(2) A tested representative sample of the hemp -derived product 19
contained a total tetrahydrocannabinol concentration that did not exceed 20
three-tenths percent (0.3%) under by this subchapter; and 21
(3) A detailed analysis and list of chemical makeup of the 22
tested hemp-derived product under subsection (c) of this section. 23
(e) Arkansas Tobacco Control may periodically sample, analyze, and 24
test any hemp-derived product located in this state. 25
(f) The Director of Arkansas Tobacco Control may: 26
(1) Investigate and issue subpoenas to any permittee or approved 27
laboratory used by a permittee that the director has reasonable suspicion of 28
intentionally produc ing falsified test results on hemp -derived products; and 29
(2) Promulgate rules for the enforcement of this section and set 30
penalties for any violation of the rules. 31
32
20-56-411. Providing minors with hemp -derived products — Purchase, 33
use, or possession prohibited. 34
(a)(1) It is unlawful for any person to give, barter, or sell to a 35
minor a hemp-derived product. 36 HB1605
15 3/13/2023 9:20:36 AM JMB136
(2) Except as provided in subdivision (a)(3) of this section, a 1
person who pleads guilty or nolo contendere to or is found guilty of 2
violating subdivision (a)(1) of this section is guilty of a Class A 3
misdemeanor. 4
(3) An employee or owner of a retail location permitted under 5
this subchapter who violates subdivision (a)(1) of this section while inside 6
the retail location upon conviction is sub ject to a fine not to exceed one 7
hundred dollars ($100) per violation. 8
(b)(1) It is unlawful for a minor to: 9
(A) Use or possess or to purchase or attempt to purchase a 10
hemp-derived product; or 11
(B) For the purpose of obtaining or attempting to obt ain a 12
hemp-derived product, falsely represent himself or herself not to be a minor 13
by displaying proof of age that is false, fraudulent, or not actually proof 14
of the minor's age. 15
(2) Any hemp-derived product found in the possession of a minor 16
may be confiscated and destroyed by a law enforcement officer. 17
(c)(1) It is not an offense under subsection (b) of this section if: 18
(A) The minor was acting at the direction of an authorized 19
agent of Arkansas Tobacco Control to enforce or ensure compliance wit h laws 20
relating to the prohibition of the sale of hemp -derived product to minors; 21
(B) The minor was acting at the direction of an authorized 22
agent of the Division of Aging, Adult, and Behavioral Health Services of the 23
Department of Human Services to co mpile statistical data relating to the sale 24
of hemp-derived products to minors; 25
(C) The minor was acting at the request of a permit holder 26
to assist the permit holder by performing a check on the permit holder's own 27
retail business to see if the permit holder's employees would sell hemp -28
derived products to the minor; or 29
(D) The minor was acting as an agent of a retail permit 30
holder within the scope of employment. 31
(2) A minor performing activities under subdivision (c)(1) of 32
this section shall: 33
(A) Display the appearance of a minor; 34
(B) Have the written consent of the minor's parent or 35
guardian to perform the activity on file with the agency utilizing the minor; 36 HB1605
16 3/13/2023 9:20:36 AM JMB136
and 1
(C)(i) Present a true and correct identification if asked. 2
(ii) Any failure on the part of a minor to provide 3
true and correct identification upon request is a defense to any action under 4
this section or a civil action under § 26 -57-256. 5
(d) Any person who sells hemp -derived products has the right to deny 6
the sale of any hemp-derived product to any person. 7
(e) It is unlawful for any person who has been issued a permit or a 8
license under this subchapter to fail to display in a conspicuous place a 9
sign indicating that the sale of hemp -derived products to or purchase or 10
possession of hemp-derived products by a minor is prohibited by law. 11
(f) It is unlawful for any manufacturer whose hemp -derived product is 12
distributed in this state and any person who has been issued a permit or 13
license under this subchapter to distribut e a free sample of any hemp -derived 14
product, or any component of a hemp -derived product or coupon that entitles 15
the holder of the coupon to any free sample of any hemp -derived product, or 16
any component of a hemp -derived product: 17
(1) In or on any public street or sidewalk within five hundred 18
feet (500') of any playground, public school, or other facility when the 19
playground, public school, or other facility is being used primarily by 20
minors for recreational, educational, or other purposes; or 21
(2) To any minor. 22
(g) It is unlawful for any person that has been issued a permit or 23
license under this subchapter to: 24
(1) Sell or distribute a hemp -derived product through a self -25
service display, a vending machine, or an order executed solely over the 26
internet or similar means; or 27
(2) Advertise or promote hemp -derived products in a manner that 28
is intended to appeal to children. 29
(h) Any retail permit holder or license holder who violates any 30
provision in this section is deemed guilty of a violation and sub ject to 31
penalties under § 26 -57-256. 32
(i)(1) A notice of an alleged violation of this section shall be given 33
to the holder of a retail permit or license or an agent of the holder within 34
ten (10) days of the alleged violation. 35
(2)(A) The notice under subdivision (i)(1) of this section shall 36 HB1605
17 3/13/2023 9:20:36 AM JMB136
contain the date and time of the alleged violation. 1
(B)(i) The notice under subdivision (i)(1) of this section 2
shall also include either the name of the person making the alleged sale or 3
information reasonably necessary to determine the location in the store that 4
allegedly made the sale. 5
(ii) When appropriate, information under subdivision 6
(i)(2)(B)(i) of this section should include, but not be limited to, the: 7
(a) Cash register number of the sale in the 8
store; 9
(b) Physical location of the sale in the 10
store; and 11
(c) If possible, the lane or aisle number of 12
the sale in the store. 13
(j) Notwithstanding the provisions of subsection (h) of this section, 14
the court shall consider the following factors when reviewing a possible 15
violation: 16
(1) The business has adopted and enforced a written policy 17
against selling hemp -derived products to minors; 18
(2) The business has informed its employees of the applicable 19
laws regarding the sale of hemp-derived products to minors; 20
(3) The business has required employees to verify the age of a 21
customer attempting to purchase a hemp -derived product by way of photographic 22
identification; 23
(4) The business has established and imposed disciplinary 24
sanctions for noncompliance; and 25
(5) That the appearance of the purchaser of the hemp -derived 26
product was such that an ordinary prudent person would believe him or her to 27
be of legal age to make the purchase. 28
(k) A person convicted of vio lating any provision of this section 29
whose permit or license to distribute or sell a hemp -derived product is 30
suspended or revoked upon conviction shall surrender to the court any permit 31
or license to distribute or sell a hemp -derived product, and the court shall 32
transmit the permit or license to distribute or sell a hemp -derived product 33
to the Director of Arkansas Tobacco Control: 34
(1) To suspend or revoke the person's permit or license to 35
distribute or sell a hemp -derived product and to not renew the per mit or 36 HB1605
18 3/13/2023 9:20:36 AM JMB136
license; and 1
(2) Not to issue any new permit or license to that person for 2
the period of time determined by the court in accordance with this section. 3
4
20-56-412. Enforcement — Penalties. 5
(a) It is the duty of all state, county, and city offi cers to assist 6
Arkansas Tobacco Control in enforcing this subchapter. 7
(b) A person within the jurisdiction of this state who is not 8
permitted to sell, deliver, or cause to be delivered hemp -derived products to 9
retailers or consumers and who sells, takes orders from, delivers, or causes 10
to be delivered immediately or in the future any hemp -derived products to 11
retailers or consumers, is guilty of a Class A misdemeanor. 12
(c) A person engaged in buying, selling, or otherwise doing business 13
in hemp-derived products in this state without first obtaining the proper 14
permit upon conviction is guilty of a Class A misdemeanor. 15
16
20-56-413. Rules. 17
The Director of Arkansas Tobacco Control and Arkansas Tobacco Control 18
may promulgate rules for the proper enforcement of their powers and duties 19
under this subchapter, including without limitation the regulation of 20
processing, transportation, delivery, sale, and purchase of hemp -derived 21
products in accordance with this subchapter and the power to levy penalties 22
for violations of this subchapter. 23
24
SECTION 4. Arkansas Code § 26 -57-247(b), concerning seizure, 25
forfeiture, and disposition of tobacco products and other property, is 26
amended to read as follows: 27
(b) The Director of Arkansas Tobacco Control may seize and hold fo r 28
disposition of the courts or the Arkansas Tobacco Control Board all tobacco 29
products, vapor products, alternative nicotine products, or e-liquid 30
products, or hemp-derived products found in the possession of a person 31
dealing in, or a consumer of, tobacco products, vapor products, alternative 32
nicotine products, or e-liquid products, or hemp-derived products if: 33
(1) Prima facie evidence exists that the full amount of excise 34
tax due on the tobacco products has not been paid to the Secretary of the 35
Department of Finance and Administration; 36 HB1605
19 3/13/2023 9:20:36 AM JMB136
(2) Tobacco products, vapor products, alternative nicotine 1
products, or e-liquid products are in the possession of a wholesaler who does 2
not possess a current Arkansas wholesale permit; 3
(3) A retail establishment doe s not possess a current Arkansas 4
retail permit; or 5
(4) The tobacco products, vapor products, alternative nicotine 6
products, or e-liquid products have been offered for sale to the public at 7
another location without a current Arkansas retail permit ; or 8
(5) Hemp-derived products are possessed, sold, or offered for 9
sale in violation of § 20 -56-401 et seq. 10
11
SECTION 5. Arkansas Code § 26 -57-249(b), concerning the procedure for 12
destruction of products upon conviction, is amended to read as follows: 13
(b) Upon an administrative finding of guilty of any person charged 14
with a violation of a state tobacco product, vapor product, alternative 15
nicotine product, or e-liquid product, or hemp-derived product law or rule in 16
a proceeding before the Arkansas Tobacco Con trol Board where the 17
investigation resulted in the seizure of tobacco products, vapor products, 18
alternative nicotine products, or e-liquid products, or hemp-derived 19
products, the board shall issue an order to destroy the tobacco products, 20
vapor products, alternative nicotine products, or e-liquid products, or hemp-21
derived products confiscated by Arkansas Tobacco Control or by any state, 22
county, or municipal officer in this state. 23
24
SECTION 6. Arkansas Code § 26 -57-255(g)(3)(A) — (C), concerning the 25
creation of the Arkansas Tobacco Control Board, are amended to read as 26
follows: 27
(3)(A) Conduct public hearings when appropriate regarding a 28
permit authorized under this subchapter or in violation of this subchapter, 29
the Unfair Cigarette Sales Act, § 4 -75-701 et seq., § 5-27-227, § 20-56-401 30
et seq., or any other federal, state, or local statute, ordinance, rule, or 31
regulation concerning the sale of tobacco products, vapor products, 32
alternative nicotine products, or e-liquid products, or hemp-derived products 33
to minors or the rules promulgated by Arkansas Tobacco Control. 34
(B) After notice and hearing held in accordance with the 35
Arkansas Administrative Procedure Act, § 25 -15-201 et seq., if the board 36 HB1605
20 3/13/2023 9:20:36 AM JMB136
finds a violation of this subchapter, the Unfair Cigarette Sa les Act, § 4-75-1
701 et seq., § 20-56-401 et seq., or the rules promulgated by Arkansas 2
Tobacco Control, the board may suspend or revoke any or all permits issued by 3
the director to any person. 4
(C) The board may levy a civil penalty in an amount not to 5
exceed five thousand dollars ($5,000) for each violation against a person 6
found to be in violation of this subchapter, the Unfair Cigarette Sales Act, 7
§ 4-75-701 et seq., § 20-56-401 et seq., or the rules promulgated by Arkansas 8
Tobacco Control. 9
10
SECTION 7. Arkansas Code § 26 -57-256(a)(2) and (3), concerning the 11
powers of Arkansas Tobacco Control, are amended to read as follows: 12
(2)(A) Receive applications for and issue, refuse, suspend, and 13
revoke permits listed in § 26 -57-219 and § 20-56-401 et seq. 14
(B) Arkansas Tobacco Control shall refuse to issue or 15
renew any permits issued by the Director of Arkansas Tobacco Control for the 16
failure to pay: 17
(i) Any applicable taxes or fees imposed on tobacco 18
products,; 19
(ii) Permit permit fees imposed under this 20
subchapter or on hemp-derived products under § 20 -56-401 et seq.;, or 21
(iii) Other any other state or local taxes; 22
(3) Prescribe forms of applications for permits under this 23
subchapter and § 20-56-401 et seq.; 24
25
SECTION 8. Arkansas Code § 26-57-256(b), concerning the authority of 26
Arkansas Tobacco Control to enforce the laws against possession by a minor, 27
is amended to read as follows: 28
(b) Any tobacco products, vapor products, alternative nicotine 29
products, e-liquid products, hemp-derived products as defined in § 20 -56-402, 30
or cigarette papers found in the possession of a minor may be confiscated and 31
destroyed. 32
33
SECTION 9. DO NOT CODIFY. Rules. 34
(a) When adopting the initial rules required under this act, Arkansas 35
Tobacco Control shall file the final rules with the Secretary of State for 36 HB1605
21 3/13/2023 9:20:36 AM JMB136
adoption under § 25-15-204(f): 1
(1) On or before January 1, 2024; or 2
(2) If approval under § 10 -3-309 has not occurred by January 1, 3
2024, as soon as practicable after approval under § 10 -3-309. 4
(b) Arkansas Tobacco Control shall file the proposed rules with the 5
Legislative Council under § 10 -3-309(c) sufficiently in advance of January 1, 6
2024, so that the Legislative Council may consider the rules for approval 7
before January 1, 2024. 8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36