Kansas 2023-2024 Regular Session

Kansas House Bill HB2367 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Session of 2023
2	2	HOUSE BILL No. 2367
3	3	By Representative S. Miller
4	4	2-8
5	5	AN ACT concerning cannabis; creating the adult use cannabis regulation
6	6	act; providing for the licensure and regulation of cannabis, including
7	7	the cultivation, manufacturing, transportation, possession and sale of
8	8	cannabis; providing certain fines and penalties for violations of the act;
9	9	providing exemptions from crimes involving controlled substances;
10	10	imposing a tax on the sale of cannabis and providing for the disposition
11	11	of the revenues collected thereon; creating the cannabis business
12	12	regulation fund; amending K.S.A. 79-5201 and 79-5210 and K.S.A.
13	13	2022 Supp. 21-5703, 21-5705, 21-5706, 21-5707, 21-5709 and 21-5710
14	14	and repealing the existing sections.
15	15	Be it enacted by the Legislature of the State of Kansas:
16	16	New Section 1. The provisions of sections 1 through 43, and
17	17	amendments thereto, shall be known and may be cited as the adult use
18	18	cannabis regulation act.
19	19	New Sec. 2. As used in the adult use cannabis regulation act, section
20	20	1 et seq., and amendments thereto:
21	21	(a) "Acquire" means obtaining ownership, control, power to vote or
22	22	sole power of disposition of the owner's interest, directly or indirectly, or
23	23	through one or more transactions or subsidiaries, through purchase,
24	24	assignment, transfer, exchange, succession or other means in connection
25	25	with the acquisition of an owner's interest in a cannabis business.
26	26	(b) "Act" means the adult use cannabis regulation act.
27	27	(c) "Acting in concert" means knowingly participating in a joint
28	28	activity or interdependent conscious parallel action toward a common
29	29	goal, whether or not pursuant to an express agreement.
30	30	(d) (1) "Advertising" means the act of providing consideration for the
31	31	publication, dissemination, solicitation or circulation of visual, oral or
32	32	written communication to directly induce any person to patronize a
33	33	particular cannabis business or purchase a particular form of cannabis or
34	34	cannabis product.
35	35	(2) "Advertising" does not include packaging and labeling, consumer
36	36	education materials or branding.
37	37	(e) "Affiliate" or "affiliated with" means a person that, directly or
38	38	indirectly, through one or more intermediaries, controls or is controlled by,
39	39	or is under common control with, the person specified.
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76	76	(f) "Beneficial owner" or "beneficial ownership" means an owner's
77	77	interest is determined in accordance with section 13(d) of the federal
78	78	securities exchange act of 1934 and rule 13d-3 adopted pursuant thereto.
79	79	(g) "Branding" means promotion of a cannabis business's brand
80	80	through publicizing the cannabis business's name, logo or distinct design
81	81	features of the brand.
82	82	(h) "Cannabis" means the same as such term is defined in K.S.A. 65-
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84	84	(i) "Cannabis business" means a cannabis retailer, cannabis
85	85	cultivation facility, cannabis products manufacturer, hospitality business,
86	86	hospitality and sales business, cannabis testing facility, cannabis business
87	87	operator or cannabis transporter.
88	88	(j) "Cannabis business operator" means a person that is not an owner
89	89	and that is licensed to provide professional operational services to a
90	90	cannabis business for direct remuneration from such cannabis business.
91	91	(k) "Cannabis consumer waste" means any component left after the
92	92	consumption of a cannabis product, including, but not limited to,
93	93	containers, packages, cartridges, pods, cups, batteries, all-in-one
94	94	disposable devices and any other waste component left after the cannabis
95	95	is consumed.
96	96	(l) "Cannabis cultivation facility" means a person licensed to
97	97	cultivate, prepare and package cannabis and sell cannabis to cannabis
98	98	retailers, cannabis product manufacturers and other cannabis cultivation
99	99	facilities.
100	100	(m) "Cannabis products" means concentrated cannabis products and
101	101	cannabis products that are comprised of cannabis and other ingredients and
102	102	are intended for use or consumption, including, but not limited to, edible
103	103	products, ointments and tinctures that are produced by a cannabis products
104	104	manufacturer.
105	105	(n) "Cannabis products manufacturer" means a person licensed to:
106	106	(1) Purchase cannabis from a cannabis cultivation facility or other
107	107	cannabis products manufacturer;
108	108	(2) manufacture cannabis products;
109	109	(3) prepare and package cannabis and cannabis products; and
110	110	(4) sell cannabis and cannabis products to cannabis retailers,
111	111	hospitality and sales businesses or other cannabis product manufacturers.
112	112	(o) "Cannabis retailer" means a person licensed to purchase cannabis
113	113	from cannabis cultivation facilities and cannabis and cannabis products
114	114	from cannabis products manufacturers and to sell cannabis and cannabis
115	115	products to consumers.
116	116	(p) "Cannabis testing facility" means a person licensed to analyze and
117	117	certify the safety and potency of cannabis and cannabis products.
118	118	(q) "Cannabis transporter" means a person licensed to transport
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162	162	cannabis and cannabis products from one cannabis business to another
163	163	cannabis business and to temporarily store such cannabis and cannabis
164	164	products at such cannabis transporter's licensed premises.
165	165	(r) "Consumer education materials" means any informational
166	166	materials that seek to educate consumers about cannabis generally,
167	167	including, but not limited to education regarding the safe consumption of
168	168	cannabis, concentrated cannabis or cannabis products, provided such
169	169	materials are not distributed or made available to individuals under 21
170	170	years of age.
171	171	(s) "Control" means the possession, directly or indirectly, of the
172	172	power to direct or cause the direction of the management or policies of a
173	173	person, whether through the ownership of voting the owner's interests, by
174	174	contract or otherwise.
175	175	(t) "Controlling beneficial owner" means a person that satisfies one or
176	176	more of the following criteria:
177	177	(1) An individual, organization that is organized under the laws of
178	178	and for which its principal place of business is located in one of the states
179	179	or territories of the United States or District of Columbia, publicly traded
180	180	corporation or qualified private fund that is not a qualified institutional
181	181	investor:
182	182	(A) Acting alone or acting in concert that owns or acquires beneficial
183	183	ownership of 10% or more of the owner's interest of a cannabis business;
184	184	(B) that is an affiliate that controls a cannabis business and includes,
185	185	but is not limited to, any manager; or
186	186	(C) that is otherwise in a position to control the cannabis business,
187	187	except for a cannabis business operator licensee; or
188	188	(2) a qualified institutional investor acting alone or acting in concert
189	189	that owns or acquires beneficial ownership of more than 30% of the
190	190	owner's interest of a cannabis business.
191	191	(u) "Director" means the director of alcoholic beverage control.
192	192	(v) "Escorted" means appropriately checked into a limited access area
193	193	and accompanied by an individual licensed pursuant to this act, except that
194	194	trade craftspeople not normally engaged in the business of cultivating,
195	195	processing, selling or testing cannabis need not be accompanied on a full-
196	196	time basis, but shall be reasonably monitored.
197	197	(w) "Hospitality and sales business" means a person licensed to sell
198	198	cannabis and cannabis products for consumption on and off the licensed
199	199	premises. A "hospitality and sales business" shall not be a mobile facility.
200	200	(x) "Hospitality business" means a person licensed to permit the
201	201	consumption of cannabis and cannabis products on the licensed premises.
202	202	A "hospitality business" includes mobile facilities.
203	203	(y) "Immature plant" means a nonflowering cannabis plant that is:
204	204	(1) No taller than eight inches and no wider than eight inches;
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248	248	(2) is produced from a cutting, clipping or seedling; and
249	249	(3) is in a cultivating container.
250	250	(z) "Indirect financial interest holder" means a person that is not an
251	251	affiliate, a controlling beneficial owner or a passive beneficial owner of a
252	252	cannabis business and that:
253	253	(1) Holds a commercially reasonable royalty interest in exchange for
254	254	a cannabis business's use of the person's intellectual property;
255	255	(2) holds a permitted economic interest that was issued prior to
256	256	January 1, 2024, and that has not been converted into an owner's interest;
257	257	(3) is a contract counterparty with a cannabis business, other than a
258	258	customary employment agreement, that has a direct nexus to the
259	259	cultivation, manufacture or sale of cannabis or cannabis products,
260	260	including, but not limited to, a lease of real property on which the cannabis
261	261	business operates, a lease of equipment used in the cultivation of cannabis,
262	262	a secured or unsecured financing agreement with the cannabis business, a
263	263	security contract with the cannabis business or a management agreement
264	264	with the cannabis business, provided that no such contract compensates the
265	265	contract counterparty with a percentage of revenue for profits of the
266	266	cannabis business; or
267	267	(4) is an indirect financial interest holder as defined in rules and
268	268	regulations adopted pursuant to this act.
269	269	(aa) "Licensed premises" means the premises specified in an
270	270	application for a license that are owned or in possession of the licensee and
271	271	within which the licensee is authorized to cultivate, manufacture,
272	272	distribute, sell or test cannabis and cannabis products in accordance with
273	273	this act.
274	274	(bb) "Licensee" means a person licensed pursuant to this act.
275	275	(cc) "Limited access areas" means a building, room or other
276	276	contiguous area upon the licensed premises where cannabis and cannabis
277	277	products are cultivated, manufactured, stored, weighed, packaged, sold,
278	278	possessed for sale or tested under control of the licensee with access
279	279	limited to only licensees and those individuals escorted by a licensee,
280	280	except as otherwise provided in section 14, and amendments thereto. All
281	281	areas of ingress or egress to limited access areas shall be clearly identified
282	282	as such by a sign as designated by the director.
283	283	(dd) "Owner's interest" means:
284	284	(1) The shares of stock in a corporation;
285	285	(2) a membership interest in a limited liability company;
286	286	(3) a partnership interest in a partnership, limited partnership or
287	287	limited liability partnership.
288	288	(ee) "Passive beneficial owner" means any person acquiring any
289	289	owner's interest in a cannabis business that is not otherwise a controlling
290	290	beneficial owner or in control.
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334	334	(ff) "Permitted economic interest" means any unsecured convertible
335	335	debt instrument, option agreement, warrant or any other right to obtain an
336	336	ownership interest when the holder of such interest is an individual who is
337	337	a lawful United States resident and whose right to convert into an
338	338	ownership interest is contingent on the holder qualifying and obtaining a
339	339	license as an owner under this act, or such other agreements as may be
340	340	permitted by the director.
341	341	(gg) "Person" means any natural person, corporation, partnership,
342	342	trust or association.
343	343	(hh) "Postsecondary educational institution" means public or private
344	344	postsecondary educational institution as defined in K.S.A. 74-3201b, and
345	345	amendments thereto.
346	346	(ii) "Premises" means a distinctly identified and definite location that
347	347	may include a building, a part of a building, a room or any other definite
348	348	contiguous area.
349	349	(jj) (1) "Publicly traded corporation" means any person other than an
350	350	individual that is organized under the laws of and for which its principal
351	351	place of business is located in one of the states or territories of the United
352	352	States or District of Columbia or another country that authorizes the sale
353	353	of cannabis and that:
354	354	(A) Has a class of securities registered pursuant to section 12 of the
355	355	federal securities exchange act of 1934 that:
356	356	(i) Constitutes "covered securities" pursuant to section 18(b)(1)(A) of
357	357	the federal securities act of 1933; or
358	358	(ii) is qualified and quoted on the OTCQX or OTCQB tier of the
359	359	OTC markets if the person:
360	360	(a) Is then required to file reports and is filing reports on a current
361	361	basis with the federal securities and exchange commission pursuant to the
362	362	federal securities exchange act of 1934 as if the securities constituted
363	363	"covered securities" as described in paragraph (1)(A)(i); and
364	364	(b) has established and is in compliance with corporate governance
365	365	measures pursuant to corporate governance obligations imposed on
366	366	securities qualified and quoted on the OTCQX tier of the OTC markets;
367	367	(B) is a person that has a class of securities listed on the Canadian
368	368	securities exchange, Toronto stock exchange, TSX venture exchange or
369	369	other equity securities exchange recognized by the director, if the person:
370	370	(i) Constitutes a "foreign private issuer," as defined in rule 405
371	371	adopted pursuant to the federal securities act of 1933, whose securities are
372	372	exempt from registration under section 12 of the federal securities
373	373	exchange act of 1934 pursuant to rule 12g3-2(b) adopted pursuant thereto;
374	374	and
375	375	(ii) has been, for the immediately preceding 12 months or since the
376	376	formation of such person, in compliance with all governance and reporting
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420	420	obligations imposed by the relevant exchange on such person; or
421	421	(C) is reasonably identified as a publicly traded corporation by the
422	422	director in accordance with rules and regulations adopted pursuant to this
423	423	act.
424	424	(2) A "publicly traded corporation" does not include:
425	425	(A) An "ineligible issuer," as defined in rule 405 adopted pursuant to
426	426	the federal securities act of 1933, unless such publicly traded corporation
427	427	satisfies the definition of ineligible issuer solely because:
428	428	(i) The corporation is filing reports on a current basis with the federal
429	429	securities and exchange commission pursuant to the federal securities
430	430	exchange act of 1934 as if the securities constituted "covered securities" as
431	431	described in paragraph (1)(A)(i);
432	432	(ii) prior to becoming a publicly traded corporation, the person was
433	433	licensed by the director as a cannabis business with a demonstrated history
434	434	of operations in this state for at least two years;
435	435	(iii) during such time of licensure, the person was not subject to
436	436	suspension or revocation of the license; and
437	437	(iv) the corporation is one or more of the following:
438	438	(a) A "blank check company," as defined in rule 419(a)(2) adopted
439	439	pursuant to the federal securities act of 1933;
440	440	(b) an issuer in an offering of "penny stock," as defined in rule 3a51-1
441	441	adopted pursuant to the federal securities exchange act of 1934; or
442	442	(c) a "shell company," as defined in rule 405 adopted pursuant to the
443	443	federal securities act of 1933; or
444	444	(B) a person disqualified as a "bad actor" under rule 506(d) adopted
445	445	pursuant to the federal securities act of 1933.
446	446	(kk) "Qualified institutional investor" means:
447	447	(1) A bank, as defined in section 3(a)(6) of the federal securities
448	448	exchange act of 1934, if the bank is current in all applicable reporting and
449	449	record-keeping requirements under the federal securities exchange act of
450	450	1934 and any rules adopted pursuant thereto;
451	451	(2) a bank holding company, as defined in the federal bank holding
452	452	company act of 1956, if the bank holding company is registered and
453	453	current in all applicable reporting and record-keeping requirements under
454	454	the federal bank holding company act of 1956 and any rules adopted
455	455	pursuant thereto;
456	456	(3) an insurance company, as defined in section 2(a)(17) of the
457	457	federal investment company act of 1940, if the insurance company is
458	458	current in all applicable reporting and record-keeping requirements under
459	459	the federal investment company act of 1940 and any rules adopted
460	460	pursuant thereto;
461	461	(4) an investment company registered under section 8 of the federal
462	462	investment company act of 1940 and subject to 15 U.S.C. §§ 80a-1 to 80a-
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506	506	64 if the investment company is current in all applicable reporting and
507	507	record-keeping requirements under the federal investment company act
508	508	and any rules adopted pursuant thereto;
509	509	(5) an employee benefit plan or pension fund subject to the federal
510	510	employee retirement income security act of 1974, excluding an employee
511	511	benefit plan or pension fund sponsored by a licensee or an intermediary
512	512	holding company licensee that directly or indirectly owns 10% or more of
513	513	a licensee;
514	514	(6) a state or federal government pension plan;
515	515	(7) a group comprised entirely of persons specified in paragraphs (1)
516	516	through (6); or
517	517	(8) any other entity identified by the director in accordance with rules
518	518	and regulations adopted pursuant to this act.
519	519	(ll) "Qualified private fund" means an issuer that would be an
520	520	investment company, as defined in section (3) of the federal investment
521	521	company act of 1940, but for the exclusions provided under sections 3(c)
522	522	(1) or 3(c)(7) of that act, and that:
523	523	(1) Is advised or managed by an investment adviser, as defined and
524	524	registered under sections 80b-1-21, title 15 of the federal investment
525	525	advisers act of 1940, and for which the registered investment adviser is
526	526	current in all applicable reporting and record-keeping requirements under
527	527	the federal investment advisers act and any rules adopted pursuant thereto;
528	528	and
529	529	(2) satisfies one or more of the following:
530	530	(A) Is organized under the law of a state or the United States;
531	531	(B) is organized, operated or sponsored by a U.S. person, as defined
532	532	under subsection 17 C.F.R. § 230.902(k); or
533	533	(C) sells securities to a U.S. person, as defined under subsection 17
534	534	C.F.R. § 230.902(k).
535	535	(mm) "Resealable" means that the package continues to function
536	536	within effectiveness specifications established by the director and similar
537	537	to the federal poison prevention packaging act of 1970, 15 U.S.C. § 1471
538	538	et seq., for the number of openings and closings customary for the size and
539	539	contents as determined by the director.
540	540	(nn) "Sale" or "sell" includes to:
541	541	(1) Exchange, barter or traffic in;
542	542	(2) solicit or receive and order, except through a licensee;
543	543	(3) deliver for value in any way other than gratuitously;
544	544	(4) peddle or possess with intent to sell; or
545	545	(5) traffic in for any consideration promised or obtained directly or
546	546	indirectly.
547	547	(oo) "Secretary" means the secretary of revenue.
548	548	(pp) "Security" means the same as defined in section (2)(l) of the
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592	592	federal securities act of 1933.
593	593	(qq) "School" means any school operated by a school district under
594	594	the laws of this state or any private school offering kindergarten or any of
595	595	the grades one through 12.
596	596	New Sec. 3. (a) No person shall grow, harvest, process, sell, transport,
597	597	deliver, furnish or otherwise possess any form of cannabis, except as
598	598	specifically provided in the adult use cannabis regulation act or the
599	599	commercial industrial hemp act, K.S.A. 2-3901 et seq., and amendments
600	600	thereto.
601	601	(b) Nothing in the adult use cannabis regulation act shall be construed
602	602	to:
603	603	(1) Permit the use or possession of cannabis in any form on federal
604	604	land located in this state; or
605	605	(2) prohibit any person, employer, school, postsecondary educational
606	606	institution or any other entity that occupies, owns or controls property in
607	607	this state from prohibiting the use, possession, display, transfer,
608	608	distribution, sale, transportation or cultivation of cannabis in any form on
609	609	or in such property.
610	610	(c) The provisions of this act shall not apply to industrial hemp or any
611	611	activities related thereto that are subject to the commercial industrial hemp
612	612	act, K.S.A. 2-3901 et seq., and amendments thereto.
613	613	New Sec. 4. The director shall have the following powers, functions
614	614	and duties:
615	615	(a) To receive applications for, and to issue, suspend and revoke
616	616	licenses in accordance with the provisions of this act;
617	617	(b) to call upon other administrative departments of the state, county
618	618	and city governments, law enforcement agencies and prosecuting attorneys
619	619	for such information and assistance as the director deems necessary in the
620	620	performance of the duties imposed upon the director by this act;
621	621	(c) in the conduct of any hearing authorized and held by the director
622	622	to:
623	623	(1) Examine, or cause to be examined, under oath, any person, and to
624	624	examine or cause to be examined books and records of any licensee;
625	625	(2) hear testimony and take proof material for the information of the
626	626	director in the discharge of such duties hereunder;
627	627	(3) administer or cause to be administered oaths; and
628	628	(4) issue subpoenas to require the attendance of witnesses and the
629	629	production of books that shall be effective in any part of this state, and any
630	630	district court may, by order duly entered, require the attendance of
631	631	witnesses and the production of relevant books subpoenaed by the director
632	632	and may compel obedience by proceedings for contempt;
633	633	(d) to collect, receive, account for and turn over to the secretary of
634	634	revenue all registration and license fees and taxes provided for in this act
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678	678	and all other moneys received by the director by virtue of the director's
679	679	office; and
680	680	(e) such other powers, functions and duties as are or may be imposed
681	681	or conferred upon the director by law.
682	682	New Sec. 5. (a) The director and agents and employees of the director
683	683	designated by the director, with the approval of the secretary of revenue,
684	684	are hereby vested with the power and authority of law enforcement
685	685	officers, in the execution of the duties imposed upon the director by this
686	686	act and in enforcing the provisions of this act.
687	687	(b) (1) The director and each agent and employee designated by the
688	688	director under subsection (a), with the approval of the secretary of
689	689	revenue, shall have the authority to:
690	690	(A) Make arrests, conduct searches and seizures and carry firearms
691	691	while investigating violations of this act and to generally enforce all the
692	692	criminal laws of the state as violations of those laws are encountered by
693	693	such employees or agents during the routine conduct of their duties as
694	694	determined by the director or the director's designee; and
695	695	(B) issue notices to appear pursuant to K.S.A. 22-2408, and
696	696	amendments thereto.
697	697	(2) No agent or employee of the director shall be certified to carry
698	698	firearms under the provisions of this section without having first
699	699	successfully completed the firearm training course or courses prescribed
700	700	for law enforcement officers under K.S.A. 74-5604a(a), and amendments
701	701	thereto. The director may adopt rules and regulations prescribing other
702	702	training required for such agents or employees.
703	703	New Sec. 6. (a) Except as permitted under subsection (b):
704	704	(1) The secretary of revenue, the director of alcoholic beverage
705	705	control or any officer, employee or agent of the division of alcoholic
706	706	beverage control shall not solicit or accept, directly or indirectly, any gift,
707	707	gratuity, emolument or employment from any person who is an applicant
708	708	for any license or is a licensee under the provisions of the adult use
709	709	cannabis regulation act or any officer, agent or employee thereof, or solicit
710	710	requests from or recommend, directly or indirectly, to any such person, the
711	711	appointment of any individual to any place or position; and
712	712	(2) an applicant for a license or a licensee under the provisions of this
713	713	act shall not offer any gift, gratuity, emolument or employment to the
714	714	secretary, the director or any officer, employee or agent of the division of
715	715	alcoholic beverage control.
716	716	(b) The secretary may adopt rules and regulations allowing the
717	717	acceptance of official hospitality by the secretary, the director and officers
718	718	and employees of the division of alcoholic beverage control, subject to any
719	719	limits as prescribed by such rules and regulations.
720	720	(c) If the secretary, the director or any officer, employee or agent of
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764	764	the division of alcoholic beverage control violates any provision of this
765	765	section, such person shall be removed from such person's office or
766	766	employment.
767	767	(d) Violation of any provision of this section is a misdemeanor
768	768	punishable by a fine of not to exceed $500 or imprisonment of not less
769	769	than 60 days nor more than six months, or both such fine and
770	770	imprisonment.
771	771	(e) Nothing in this section shall be construed to prohibit the
772	772	prosecution and punishment of any person for bribery as defined in the
773	773	Kansas criminal code.
774	774	New Sec. 7. (a) The director shall establish and maintain an
775	775	electronic database to monitor cannabis from its seed source through its
776	776	cultivation, testing, product manufacturing, transportation and sale. The
777	777	director may contract with a separate entity to establish and maintain all or
778	778	any portion of the electronic database on behalf of the division of alcoholic
779	779	beverage control.
780	780	(b) The electronic database shall allow for information regarding
781	781	cannabis to be updated instantaneously. Any licensed cannabis business
782	782	shall submit such information to the director as the director determines is
783	783	necessary for maintaining the electronic database.
784	784	New Sec. 8. (a) The director shall establish a cannabis and cannabis
785	785	products independent testing and certification program for licensed
786	786	cannabis businesses. Testing may include analysis for microbial and
787	787	residual solvents and chemical and biological contaminants deemed to be
788	788	public health hazards by the department of health and environment based
789	789	on medical reports and published scientific literature.
790	790	(b) (1) If test results indicate the presence of quantities of any
791	791	substance determined to be injurious to health, the licensee shall
792	792	immediately quarantine the cannabis or cannabis product and notify the
793	793	director. The director shall give the licensee an opportunity to retest the
794	794	cannabis or cannabis product. If two additional tests do not indicate the
795	795	presence of quantities of any substance determined to be injurious to
796	796	health, the product may be used or sold by the licensed cannabis business.
797	797	(2) If the test results indicate the presence of a microbial, the director
798	798	shall give the licensee an opportunity to remediate the cannabis or
799	799	cannabis product. If the licensee is unable to remediate the cannabis or
800	800	cannabis products, the licensee shall document and properly destroy the
801	801	adulterated cannabis or cannabis products.
802	802	(c) (1) Testing shall verify tetrahydrocannabinol potency
803	803	representations and homogeneity for correct labeling and provide a
804	804	cannabinoid profile for the cannabis or cannabis product. An individual
805	805	piece of cannabis of 10 milligrams or less that has gone through process
806	806	validation is exempt from continued homogeneity testing. Homogeneity
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850	850	testing for 100 milligram servings of cannabis may utilize validation
851	851	measures.
852	852	(2) The director shall determine an acceptable variance for potency
853	853	representations and procedures to address potency misrepresentations,
854	854	provided that such variance is at least plus or minus 15%.
855	855	(d) The director may use or employ the results of any test of cannabis
856	856	or cannabis products conducted by an analytical laboratory that is certified
857	857	for the particular testing category or is accredited pursuant to the
858	858	international organization for standardization/international electrotechnical
859	859	commission 17025, 2005 standard, or any subsequent superseding
860	860	standard, in that field of testing.
861	861	(e) The secretary shall adopt rules and regulations that prevent
862	862	redundant testing of cannabis and cannabis concentrate, including, but not
863	863	limited to, potency testing of cannabis allocated to extractions, and
864	864	residual solvent testing of cannabis concentrate when all inputs of the
865	865	cannabis concentrate have passed residual solvent testing.
866	866	New Sec. 9. (a) The classes of licenses the director may issue for a
867	867	premises shall be the following:
868	868	(1) Cannabis cultivation facility license;
869	869	(2) cannabis testing facility license;
870	870	(3) cannabis products manufacturer license;
871	871	(4) cannabis transporter license;
872	872	(5) cannabis business operator license;
873	873	(6) hospitality business license;
874	874	(7) hospitality and sales business license; and
875	875	(8) cannabis retailer license.
876	876	(b) The director may issue an occupational license for any individual
877	877	who is an owner, manager, operator, employee, contractor or other
878	878	individual performing work on behalf of a cannabis business licensee or
879	879	having unescorted access to any restricted area of the licensed premises of
880	880	a cannabis business licensee.
881	881	New Sec. 10. (a) An application for a license shall be submitted to the
882	882	director in such form and manner as prescribed by the director. An
883	883	applicant shall pay the required fee at the time such application is
884	884	submitted. A separate license application shall be submitted for each
885	885	premises to be operated by the applicant.
886	886	(b) No cannabis business license shall be issued to or held by:
887	887	(1) An individual whose criminal history record check indicates that
888	888	the individual has been convicted of or pleaded guilty to a felony within
889	889	the three years immediately preceding application for a license;
890	890	(2) a person who employs an individual who has not submitted to a
891	891	criminal history record check or whose criminal history record check
892	892	demonstrates such individual is ineligible for such employment;
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936	936	(3) an individual whose criminal history record check indicates that
937	937	such individual is not of good moral character;
938	938	(4) a person other than an individual if the criminal history record
939	939	check of any of its controlling beneficial owners indicates that a
940	940	controlling beneficial owner is not of good moral character;
941	941	(5) a person under 21 years of age;
942	942	(6) a person who has not submitted a tax clearance certificate issued
943	943	by the department of revenue;
944	944	(7) an individual who is a law enforcement officer, county or district
945	945	attorney, an officer or employee of the attorney general's office or an
946	946	officer or employee of the division of alcoholic beverage control;
947	947	(8) a publicly traded entity that does not constitute a publicly traded
948	948	corporation;
949	949	(9) a person that is or has a controlling beneficial owner that is an
950	950	"ineligible issuer" pursuant to section 2, and amendments thereto;
951	951	(10) a person that is or has a controlling beneficial owner that is a
952	952	"bad actor" pursuant to section 2, and amendments thereto;
953	953	(11) a person that is not a publicly traded corporation that is or has a
954	954	passive beneficial owner or indirect financial interest holder that is a "bad
955	955	actor" pursuant to section 2, and amendments thereto;
956	956	(12) a person that is a publicly traded corporation that is or has a
957	957	nonobjecting passive beneficial owner or indirect financial interest holder
958	958	that is a "bad actor" pursuant to section 2, and amendments thereto; or
959	959	(13) a person that is or has a controlling beneficial owner, passive
960	960	beneficial owner or indirect financial interest holder that is prohibited from
961	961	engaging in transactions pursuant to this act due to its designation on the
962	962	specially designated nationals and blocked persons list maintained by the
963	963	federal office of foreign assets control.
964	964	(c) No occupational license shall be issued to or held by an individual
965	965	who would be ineligible to hold a cannabis business license under
966	966	subsections (b)(1), (3), (5) or (7).
967	967	(d) Each applicant for a cannabis business license shall require any
968	968	owner, director, officer and any employee or agent of such applicant to be
969	969	fingerprinted and to submit to a state and national criminal history record
970	970	check. The director is authorized to submit the fingerprints to the Kansas
971	971	bureau of investigation and the federal bureau of investigation for a state
972	972	and national criminal history record check. The director shall use the
973	973	information obtained from fingerprinting and the state and national
974	974	criminal history record check for purposes of verifying the identification
975	975	of the applicant and for making a determination of the qualifications of the
976	976	applicant for licensure. The Kansas bureau of investigation may charge a
977	977	reasonable fee to the applicant for fingerprinting and conducting a criminal
978	978	history record check. Local law enforcement officers and agencies may
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1022	1022	assist the director in the taking and processing of fingerprints and may
1023	1023	charge the applicant a reasonable fee as reimbursement for expenses
1024	1024	incurred in taking and processing fingerprints. The provisions of this
1025	1025	subsection shall also apply to any individual applying for an occupational
1026	1026	license who is not otherwise required to be fingerprinted and submit to a
1027	1027	state and national criminal history record check.
1028	1028	(e) A license shall only be issued if the applicant satisfies the
1029	1029	requirements for licensure under this act and pays the required license fee.
1030	1030	(f) (1) A cannabis business license shall be valid for a period of one
1031	1031	year from the date such license is issued.
1032	1032	(2) An occupational license shall be valid for a period of two years
1033	1033	from the date such license is issued.
1034	1034	New Sec. 11. (a) At least 90 days prior to the expiration date of an
1035	1035	existing cannabis business license or occupational license, the director
1036	1036	shall notify the licensee of the expiration date by first-class mail at the
1037	1037	licensee's address of record with the director. A license renewal application
1038	1038	shall be submitted prior to the expiration of the license and be
1039	1039	accompanied by the required renewal application fee. If a licensee
1040	1040	properly submits a renewal application and fee, the licensee may continue
1041	1041	to operate until such application is approved or denied by the director.
1042	1042	(b) A license shall only be renewed if the licensee continues to satisfy
1043	1043	the requirements for licensure under this act and pays the required license
1044	1044	fee.
1045	1045	New Sec. 12. (a) A cannabis business licensee shall not acquire,
1046	1046	possess, cultivate, deliver, transfer, transport, supply or sell cannabis for
1047	1047	any purpose except as authorized by this act.
1048	1048	(b) No person shall exercise any of the privileges granted under a
1049	1049	license issued pursuant to this act other than the person holding such
1050	1050	licensee or any person permitted to exercise such privileges by the person
1051	1051	holding such license.
1052	1052	(c) A licensee shall possess and maintain possession of the premises
1053	1053	for which the license is issued by ownership, lease, rental or other
1054	1054	arrangement for possession of the premises at all times.
1055	1055	(d) A license shall specify the date of issuance, the period of
1056	1056	licensure, the name of the licensee and the premises licensed. A license
1057	1057	shall be placed in a conspicuous location on the licensed premises in view
1058	1058	of the public.
1059	1059	(e) Each cannabis business licensee shall manage the licensed
1060	1060	premises or employ a manager and shall report the name of the manager to
1061	1061	the director. The licensee shall report any change in manager to the
1062	1062	director prior to such change.
1063	1063	(f) Each cannabis business licensee shall require that any owner,
1064	1064	manager, operator, employee, agent, contractor or any other individual
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1108	1108	performing work on behalf of such licensee or having unescorted access to
1109	1109	a restricted area of the licensed premises of such licensee hold a valid
1110	1110	occupational license issued pursuant to this act.
1111	1111	(g) A cannabis business licensee that is not a publicly traded
1112	1112	corporation shall notify the director in writing of the name, address and
1113	1113	date of birth of any new controlling beneficial owner, passive beneficial
1114	1114	owner or manager before such new controlling beneficial owner, passive
1115	1115	beneficial owner or manager begins managing or associating with the
1116	1116	operation of such licensee. Any controlling beneficial owner, passive
1117	1117	beneficial owner, manager or employee shall submit to a criminal history
1118	1118	record check and obtain an occupational license from the director prior to
1119	1119	being associated with, managing, owning or working at a cannabis
1120	1120	business licensee.
1121	1121	(h) Except for a publicly traded corporation, a cannabis business
1122	1122	licensee shall report each transfer or change of financial interest in the
1123	1123	licensee to the director and receive approval prior to any such transfer or
1124	1124	change pursuant to section 15, and amendments thereto. Except for a
1125	1125	publicly traded corporation, a report is required for transfers of an owner's
1126	1126	interest of any entity regardless of size.
1127	1127	(i) Except as otherwise provided in this act, prior to issuing a license,
1128	1128	the director may consider the requirements of this act and any rules and
1129	1129	regulations adopted pursuant thereto and all other reasonable restrictions
1130	1130	that are or may be placed upon the applicant. With respect to an additional
1131	1131	license for the same cannabis business licensee or the same owner of
1132	1132	another licensee, the director shall consider the effect on competition of
1133	1133	granting or denying an additional license to such licensee and shall not
1134	1134	approve an application for an additional license that would have the effect
1135	1135	of restraining competition.
1136	1136	New Sec. 13. (a) The director shall not approve an application for a
1137	1137	cannabis business license:
1138	1138	(1) If the application is for a location that is the same as or within
1139	1139	1,000 feet of a location that, within the two years immediately preceding
1140	1140	the date of the application, the director denied an application for the same
1141	1141	class of license due to the nature of the use or other concern related to the
1142	1142	location;
1143	1143	(2) unless the applicant is, or will be, entitled to possession of the
1144	1144	premises for which application is made under a lease, rental agreement or
1145	1145	other arrangement for possession of the premises or by virtue of ownership
1146	1146	of the premises; or
1147	1147	(3) if the building is located within 1,000 feet of a school, alcohol or
1148	1148	drug treatment facility, postsecondary educational institution or child care
1149	1149	facility.
1150	1150	(b) The provisions of subsection (a)(3) shall not apply to:
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1194	1194	(1) The renewal of a license once granted or apply to licensed
1195	1195	premises located or to be located on land owned by a municipality;
1196	1196	(2) an existing licensed premises on land owned by the state; or
1197	1197	(3) a license in effect and actively doing business before such facility
1198	1198	was in operation.
1199	1199	(c) (1) A cannabis business licensee may move the permanent
1200	1200	location of the licensed premises to any other location in Kansas upon
1201	1201	receiving permission to do so from the director. Any such change in
1202	1202	location shall be in accordance with all requirements of this act and rules
1203	1203	and regulations adopted pursuant thereto.
1204	1204	(2) (A) A cannabis cultivation facility that has obtained an approved
1205	1205	change of location from the director may operate one license at two
1206	1206	geographical locations for the purpose of transitioning operations from one
1207	1207	location to another if:
1208	1208	(i) The total plants cultivated at both locations do not exceed any
1209	1209	plant count limit imposed on the license by this act or any rules and
1210	1210	regulations adopted pursuant thereto;
1211	1211	(ii) the licensed premises of both geographical locations comply with
1212	1212	all surveillance, security and inventory tracking requirements imposed by
1213	1213	this act and any rules and regulations adopted pursuant thereto;
1214	1214	(iii) both the transferring location and the receiving location track all
1215	1215	plants in transition in the seed-to-sale tracking system to ensure proper
1216	1216	tracking for taxation purposes; and
1217	1217	(iv) operation at both geographical locations does not exceed 180
1218	1218	days, except, for good cause shown, the 180-day time period may be
1219	1219	extended for not more than an additional 120 days.
1220	1220	(B) Conduct at either location may be the basis for suspension,
1221	1221	revocation or civil penalty against the licensee.
1222	1222	(d) The distances referred to in this section are to be computed by
1223	1223	direct measurement from the nearest property line of each parcel of land,
1224	1224	using a route of direct pedestrian access.
1225	1225	New Sec. 14. (a) Each licensed cannabis business shall keep a
1226	1226	complete set of all records necessary to show fully the business
1227	1227	transactions of the licensee for a period of the current tax year and the
1228	1228	three immediately preceding tax years. The director may require any
1229	1229	licensed cannabis business to furnish such information as the director
1230	1230	deems necessary for the proper administration of this act and may require
1231	1231	an audit to be made of the books of account and records on such occasions
1232	1232	as the director deems necessary by an auditor to be selected by the director
1233	1233	who shall likewise have access to all books and records of the licensee.
1234	1234	The expense of any audit shall be paid by the licensee.
1235	1235	(b) The licensed premises, including any places of storage where
1236	1236	cannabis or cannabis products are cultivated, stored, manufactured, tested
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1280	1280	or sold shall be subject to inspection by the director during all business
1281	1281	hours and other times of apparent activity, for the purpose of inspection or
1282	1282	investigation. Examination of any inventory or books and records required
1283	1283	to be kept by a licensee shall only be conducted during business hours.
1284	1284	When any part of the licensed premises consists of a locked area, such area
1285	1285	shall be made available for inspection without delay upon request by the
1286	1286	director.
1287	1287	New Sec. 15. (a) Except as otherwise provided, a license issued
1288	1288	pursuant to this act is not transferable. Nothing in this section shall be
1289	1289	construed to affect any change in permanent location of a cannabis
1290	1290	business licensee.
1291	1291	(b) For a transfer of ownership involving a controlling beneficial
1292	1292	owner, a licensee shall apply to the director for approval of such transfer.
1293	1293	In determining whether to approve such application, the director shall
1294	1294	consider only whether the requirements of this act and rules and
1295	1295	regulations adopted pursuant thereto are met.
1296	1296	(c) For a transfer of ownership involving a passive beneficial owner,
1297	1297	the licensee shall notify the director within 45 days after such transfer is
1298	1298	effective.
1299	1299	(d) A person that becomes a controlling beneficial owner of a
1300	1300	publicly traded corporation that is a cannabis business licensee or that
1301	1301	becomes a beneficial owner, through direct or indirect ownership of a
1302	1302	controlling beneficial owner, of 10% or more of a cannabis business
1303	1303	licensee that is a publicly traded corporation shall disclose the information
1304	1304	required by section 17, and amendments thereto, and apply to the director
1305	1305	for a finding of suitability or exemption from a finding of suitability
1306	1306	pursuant to section 18, and amendments thereto, within 45 days after
1307	1307	becoming such a controlling beneficial owner. A cannabis business
1308	1308	licensee shall notify each person that is subject to this subsection of its
1309	1309	requirements as soon as such licensee becomes aware of the beneficial
1310	1310	ownership triggering the requirement, provided that the obligations of the
1311	1311	person subject to this subsection are independent of, and unaffected by, the
1312	1312	such licensee's failure to give the notice.
1313	1313	New Sec. 16. (a) Any individual with day-to-day operational control
1314	1314	over a cannabis business licensee shall be a resident of this state.
1315	1315	(b) A cannabis business licensee or a controlling beneficial owner in
1316	1316	such licensee shall appoint and continuously maintain a registered agent in
1317	1317	this state. A licensee shall inform the director of any change in the
1318	1318	registered agent within 10 days after such change is effective.
1319	1319	New Sec. 17. (a) An applicant for a cannabis business license shall
1320	1320	disclose to the director:
1321	1321	(1) A complete and accurate organizational chart of the applicant
1322	1322	cannabis business reflecting the identity and ownership percentages of its
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1366	1366	controlling beneficial owners;
1367	1367	(2) information regarding controlling beneficial owners of the
1368	1368	applicant cannabis business if the controlling beneficial owner is:
1369	1369	(A) A publicly traded corporation, the applicant shall disclose the
1370	1370	controlling beneficial owner's managers and any beneficial owners that
1371	1371	directly or indirectly beneficially own 10% or more of the owner's interest
1372	1372	in the controlling beneficial owner;
1373	1373	(B) not a publicly traded corporation and is not a qualified private
1374	1374	fund, the applicant shall disclose the controlling beneficial owner's
1375	1375	managers and any beneficial owners that directly or indirectly beneficially
1376	1376	own 10% or more of the owner's interest in the controlling beneficial
1377	1377	owner;
1378	1378	(C) a qualified private fund, the applicant shall disclose a complete
1379	1379	and accurate organizational chart of the qualified private fund reflecting
1380	1380	the identity and ownership percentages of the qualified private fund's
1381	1381	managers, investment advisers, investment adviser representatives, any
1382	1382	trustee or equivalent and any other person that controls the investment in,
1383	1383	or management or operations of, the applicant business; or
1384	1384	(D) an individual, the applicant shall disclose such individual's
1385	1385	identifying information;
1386	1386	(3) a person that is both a passive beneficial owner and an indirect
1387	1387	financial interest holder in the application business; and
1388	1388	(4) any indirect financial interest holder that holds two or more
1389	1389	indirect financial interests in the applicant cannabis business or that is
1390	1390	contributing over 50% of the operating capital of the applicant cannabis
1391	1391	business.
1392	1392	(b) The director may request that the applicant disclose the following:
1393	1393	(1) Each beneficial owner and affiliate of the applicant cannabis
1394	1394	business or controlling beneficial owner that is not a publicly traded
1395	1395	corporation or a qualified private fund; and
1396	1396	(2) each affiliate of a controlling beneficial owner that is a qualified
1397	1397	private fund.
1398	1398	(c) For reasonable cause, the director may require disclosure of:
1399	1399	(1) A complete and accurate list of each nonobjecting beneficial
1400	1400	interest owner of an applicant cannabis business or controlling beneficial
1401	1401	owner that is a publicly traded corporation;
1402	1402	(2) passive beneficial owners of the applicant business, and for any
1403	1403	passive beneficial owner that is not an individual, the members of the
1404	1404	board of directors, general partners, managing members or managers and
1405	1405	10% or more owners of the passive beneficial owner;
1406	1406	(3) a list of each beneficial owner in a qualified private fund that is a
1407	1407	controlling beneficial owner; and
1408	1408	(4) all indirect financial interest holders of the applicant cannabis
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1452	1452	business, and for any indirect financial interest holder that is not an
1453	1453	individual and 10% or more beneficial owners of the indirect financial
1454	1454	interest holder.
1455	1455	(d) An applicant that is not a publicly traded corporation shall affirm
1456	1456	under penalty of perjury that it exercised reasonable care to confirm that
1457	1457	its passive beneficial owners, indirect financial interest holders and
1458	1458	qualified institutional investors are not persons prohibited pursuant to
1459	1459	section 10, and amendments thereto, or otherwise restricted from holding
1460	1460	an interest under this act. An applicant's failure to exercise reasonable care
1461	1461	is a basis for denial, fine, suspension, revocation or other sanction by the
1462	1462	director.
1463	1463	(e) An applicant that is a publicly traded corporation shall affirm
1464	1464	under penalty of perjury that it exercised reasonable care to confirm that
1465	1465	its nonobjecting passive beneficial owners, indirect financial interest
1466	1466	holders and qualified institutional investors are not persons prohibited
1467	1467	pursuant to section 10, and amendments thereto, or otherwise restricted
1468	1468	from holding an interest under this act. An applicant's failure to exercise
1469	1469	reasonable care is a basis for denial, fine, suspension, revocation or other
1470	1470	sanction by the director.
1471	1471	(f) Nothing in this section shall be construed to restrict the director's
1472	1472	ability to reasonably request information or records for any license
1473	1473	renewal or as part of any other investigation following initial licensure of a
1474	1474	cannabis business.
1475	1475	New Sec. 18. (a) Except as otherwise provided in section 15, and
1476	1476	amendments thereto, any person intending to become a controlling
1477	1477	beneficial owner of any cannabis business shall first submit a request to
1478	1478	the director for a finding of suitability or an exemption from an otherwise
1479	1479	required finding of suitability.
1480	1480	(b) For reasonable cause, any other person that was disclosed or that
1481	1481	should have been disclosed pursuant to section 17, and amendments
1482	1482	thereto, including, but not limited to, a passive beneficial owner, shall
1483	1483	submit a request for a finding of suitability.
1484	1484	(c) Failure to provide all requested information in connection with a
1485	1485	request for a finding of suitability is grounds for denial of such finding of
1486	1486	suitability.
1487	1487	(d) Failure to receive all required findings of suitability is grounds for
1488	1488	denial of a license or for suspension, revocation or other sanction against
1489	1489	the licensee by the director. For initial applications, the finding of
1490	1490	suitability shall be required prior to submitting the application for
1491	1491	licensure.
1492	1492	(e) Any person required to obtain a finding of suitability shall submit
1493	1493	an application for such finding in such form and manner as prescribed by
1494	1494	the director. Each suitability application shall be verified by the oath or
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1538	1538	affirmation of the persons prescribed by the director.
1539	1539	(f) A person requesting a finding of suitability shall provide the
1540	1540	director with a deposit to cover the direct and indirect costs of any
1541	1541	investigation necessary to determine any required finding of suitability,
1542	1542	subject to any rules and regulations regarding such deposits adopted
1543	1543	pursuant to this act.
1544	1544	(g) When determining whether a person is suitable or unsuitable for
1545	1545	licensure, the director may consider the person's criminal history records,
1546	1546	licensing records or financial records.
1547	1547	(h) A person that would otherwise be required to obtain a finding of
1548	1548	suitability may request an exemption from the director pursuant to rules
1549	1549	and regulations adopted pursuant to this act.
1550	1550	(i) Absent reasonable cause, the director shall approve or deny a
1551	1551	request for a finding of suitability within 120 days from the date of
1552	1552	submission of the request for such finding.
1553	1553	(j) The director may deny, suspend, revoke or impose a civil penalty
1554	1554	against a license issued under this act if the director finds the licensee's
1555	1555	controlling beneficial owner, passive beneficial owner or indirect financial
1556	1556	interest holder to be unsuitable pursuant to this section.
1557	1557	New Sec. 19. The director, any employee of the division, any entity
1558	1558	under contract with the director and any employee or agent thereof shall
1559	1559	not make public any information reported to or collected by the director
1560	1560	under this act containing any individualized data, information or records
1561	1561	related to an applicant for a license or a licensee or the operation of any
1562	1562	licensee, including sales information, leases, business organization
1563	1563	records, financial records, tax returns, credit reports, cultivation
1564	1564	information, laboratory testing results and security information or plans.
1565	1565	Such information shall be kept confidential and may be used only for
1566	1566	purposes authorized by this act. The provisions of this subsection shall
1567	1567	expire on July 1, 2028, unless the legislature reviews and reenacts such
1568	1568	provisions in accordance with K.S.A. 45-229, and amendments thereto,
1569	1569	prior to July 1, 2028.
1570	1570	New Sec. 20. (a) A cannabis cultivation facility license may be issued
1571	1571	only to a person who cultivates cannabis for sale and distribution to
1572	1572	licensed cannabis retailers, cannabis product manufacturers, hospitality
1573	1573	and sales businesses or other cannabis cultivation facilities.
1574	1574	(b) A cannabis cultivation facility shall track the cannabis it cultivates
1575	1575	from seed or immature plant to wholesale purchase. Prior to delivery of
1576	1576	any sold cannabis, the cannabis cultivation facility shall provide evidence
1577	1577	that any applicable excise tax on the cannabis due pursuant to section 44,
1578	1578	and amendments thereto, has been paid by such facility.
1579	1579	(c) A cannabis cultivation facility may provide a sample of cannabis
1580	1580	and cannabis concentrate to a licensed cannabis testing facility. A cannabis
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1624	1624	cultivation facility shall maintain records of cannabis provided to a
1625	1625	cannabis testing facility, the identity of such facility and the test results.
1626	1626	(d) No cannabis or cannabis products shall be consumed on the
1627	1627	premises of a cannabis cultivation facility.
1628	1628	(e) Notwithstanding any other provision of law to the contrary, a
1629	1629	cannabis cultivation facility may compensate its employees using
1630	1630	performance-based incentives, including sales-based performance-based
1631	1631	incentives.
1632	1632	(f) A cannabis cultivation facility shall only obtain cannabis seeds or
1633	1633	immature plants from its own cannabis supply or cannabis that is properly
1634	1634	transferred from another licensed cannabis business pursuant to the
1635	1635	inventory tracking requirements of this act.
1636	1636	New Sec. 21. (a) The director shall create a licensure class system for
1637	1637	cannabis cultivation facility licenses. The classifications may be based
1638	1638	upon:
1639	1639	(1) Square footage of the facility;
1640	1640	(2) lights, lumens or wattage;
1641	1641	(3) lit canopy;
1642	1642	(4) the number of cultivating plants;
1643	1643	(5) any other reasonable metrics; or
1644	1644	(6) any combination thereof.
1645	1645	(b) The director shall create a fee structure for the licensure class
1646	1646	system.
1647	1647	(c) The director may establish limitations on cannabis production
1648	1648	through one or more of the following methods, including placing or
1649	1649	modifying a limit on the:
1650	1650	(1) Number of licenses issued, by class or overall, but in placing or
1651	1651	modifying such limits, the director shall consider the reasonable
1652	1652	availability of new licenses after a limit is established or modified;
1653	1653	(2) amount of cannabis production permitted by a cannabis
1654	1654	cultivation facility license or class of licenses based upon some reasonable
1655	1655	metric or set of metrics, including, but not limited to, the metrics described
1656	1656	in subsection (a), previous months' sales, pending sales or other reasonable
1657	1657	metrics as determined by the director; and
1658	1658	(3) aggregate amount of cannabis production by cannabis cultivation
1659	1659	facility licensees based upon some reasonable metric or set of metrics,
1660	1660	including, but not limited to, the metrics described in subsection (a), as
1661	1661	determined by the director.
1662	1662	(d) Notwithstanding any other provision of this act, in considering
1663	1663	any limitations or modifications to limitations imposed under this section,
1664	1664	the director, in addition to any other relevant considerations, shall:
1665	1665	(1) Consider the total current and anticipated demand for cannabis
1666	1666	and cannabis products in this state; and
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1710	1710	(2) attempt to minimize the market for unlawful cannabis.
1711	1711	New Sec. 22. (a) The director may issue a centralized distribution
1712	1712	permit to a cannabis cultivation facility authorizing temporary storage on
1713	1713	the licensed premises of cannabis and cannabis products received from a
1714	1714	licensed cannabis business for the sole purpose of transfer to the permit
1715	1715	holder's commonly owned licensed cannabis retailer.
1716	1716	(b) A cannabis cultivation facility shall not store cannabis or cannabis
1717	1717	products pursuant to a centralized distribution permit for more than 90
1718	1718	days. A cannabis cultivation facility shall not accept any cannabis or
1719	1719	cannabis products pursuant to a centralized distribution permit unless the
1720	1720	cannabis and cannabis products are packaged and labeled for sale to a
1721	1721	consumer as required by rules and regulations adopted pursuant to this act.
1722	1722	(c) All cannabis and cannabis products stored and prepared for
1723	1723	transport on the licensed premises of a cannabis cultivation facility
1724	1724	pursuant to a centralized distribution permit shall only be transferred to a
1725	1725	cannabis cultivation facility's commonly owned licensed cannabis retailer.
1726	1726	All transfers of cannabis and cannabis products by a cannabis cultivation
1727	1727	facility pursuant to a centralized distribution permit shall be without
1728	1728	consideration.
1729	1729	(d) All cannabis cultivation facility security and surveillance
1730	1730	requirements shall apply to the activities conducted pursuant to the
1731	1731	privileges of a centralized distribution permit.
1732	1732	(e) A cannabis cultivation facility shall track all cannabis and
1733	1733	cannabis products possessed pursuant to a centralized distribution permit
1734	1734	in the seed-to-sale tracking system from the point such concentrate and
1735	1735	products are received from a licensed cannabis business to the point of
1736	1736	transfer to a cannabis cultivation facility licensee's commonly owned
1737	1737	licensed cannabis retailer.
1738	1738	(f) For purposes of this section, the term "commonly owned" means
1739	1739	licenses that have an ownership structure with at least one individual with
1740	1740	a minimum of 5% ownership in each license.
1741	1741	New Sec. 23. (a) A cannabis products manufacturer license may be
1742	1742	issued only to a person who manufactures cannabis products pursuant to
1743	1743	the terms and conditions of this act for sale and distribution to licensed
1744	1744	cannabis retailers, hospitality and sales businesses or other cannabis
1745	1745	products manufacturers.
1746	1746	(b) A cannabis products manufacturer may cultivate cannabis if the
1747	1747	licensee obtains a cannabis cultivation facility license, or may purchase
1748	1748	cannabis from a licensed cannabis cultivation facility. A cannabis products
1749	1749	manufacturer shall track all cannabis from the point such cannabis is either
1750	1750	transferred from the licensee's cannabis cultivation facility or the point
1751	1751	when such cannabis is delivered to the cannabis products manufacturer
1752	1752	from a licensed cannabis cultivation facility to the point of transfer to a
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1796	1796	licensed cannabis business. A cannabis products manufacturer shall not
1797	1797	accept any cannabis purchased from a cannabis cultivation facility unless
1798	1798	the cannabis products manufacturer is provided with evidence that any
1799	1799	applicable excise tax due pursuant to section 44, and amendments thereto,
1800	1800	has been paid.
1801	1801	(c) A cannabis products manufacturer shall not:
1802	1802	(1) Add any cannabis to a food product where the manufacturer of the
1803	1803	food product holds a trademark to the food product's name, except that a
1804	1804	cannabis products manufacturer may use a trademarked food product if the
1805	1805	cannabis products manufacturer uses the product as a component or as part
1806	1806	of a recipe and where the cannabis products manufacturer does not state or
1807	1807	advertise to the consumer that the final cannabis product contains a
1808	1808	trademarked food product;
1809	1809	(2) intentionally or knowingly label or package a cannabis product in
1810	1810	a manner that would cause a reasonable consumer confusion as to whether
1811	1811	the cannabis product was a trademarked food product; or
1812	1812	(3) label or package a product in a manner that violates any federal
1813	1813	trademark law or regulation.
1814	1814	(d) Cannabis products shall be prepared on the licensed premises, and
1815	1815	such premises shall:
1816	1816	(1) Be used exclusively for the manufacture and preparation of
1817	1817	cannabis or cannabis products; and
1818	1818	(2) meet the sanitary standards for cannabis product preparation in
1819	1819	rules and regulations adopted pursuant to this act.
1820	1820	(e) (1) All cannabis products shall be packaged, sealed and
1821	1821	conspicuously labeled in compliance with rules and regulations adopted
1822	1822	pursuant to this act.
1823	1823	(2) No standard symbol requirements shall apply to a multi-serving
1824	1824	liquid cannabis product that is impracticable to mark, if the product
1825	1825	complies with all packaging requirements for multi-serving edibles and
1826	1826	complies with the following enhanced requirements to reduce the risk of
1827	1827	accidental ingestion. A multi-serving liquid shall be packaged in:
1828	1828	(A) A structure that uses a single mechanism to achieve both child-
1829	1829	resistance and accurate pouring measurement of each liquid serving in
1830	1830	increments equal to or less than 10 milligrams of active
1831	1831	tetrahydrocannabinol per serving, with no more than 100 milligrams of
1832	1832	active tetrahydrocannabinol total per package; and
1833	1833	(B) a manner to ensure that the measurement component is within the
1834	1834	child-resistant cap or closure of the bottle and is not a separate component.
1835	1835	(f) Cannabis and cannabis products shall not be consumed on the
1836	1836	premises of a cannabis products manufacturer.
1837	1837	(g) Notwithstanding any other provision of law to the contrary, a
1838	1838	cannabis products manufacturer may compensate its employees using
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1882	1882	performance-based incentives, including sales-based performance-based
1883	1883	incentives.
1884	1884	(h) Except as otherwise provided by law, a cannabis products
1885	1885	manufacturer may provide a sample of cannabis products produced by
1886	1886	such manufacturer to a licensed cannabis testing facility. A cannabis
1887	1887	products manufacturer shall maintain a record of cannabis product samples
1888	1888	provided to a cannabis testing facility, the identity of such facility and the
1889	1889	testing results.
1890	1890	(i) An edible cannabis product may list its ingredients and
1891	1891	compatibility with dietary practices. All edible cannabis products shall be
1892	1892	produced in accordance with the Kansas food, drug and cosmetic act, and
1893	1893	amendments thereto.
1894	1894	New Sec. 24. (a) A cannabis transporter license may be issued only to
1895	1895	a person who provides logistics, distribution, delivery and storage of
1896	1896	cannabis and cannabis products for one or more licensed cannabis
1897	1897	businesses. Notwithstanding any other provisions of law, a cannabis
1898	1898	transporter license shall not be transferable. A cannabis transporter shall be
1899	1899	responsible for the cannabis and cannabis products upon taking control of
1900	1900	such cannabis and cannabis products.
1901	1901	(b) A licensed cannabis business that distributes cannabis and
1902	1902	cannabis products cultivated or produced by such licensee shall not be
1903	1903	required to hold a cannabis transporter license to transport and distribute
1904	1904	such cannabis and cannabis products.
1905	1905	(c) A cannabis transporter may maintain a licensed premises to
1906	1906	temporarily store and distribute cannabis and cannabis products and to use
1907	1907	as a centralized distribution location. A licensed premises shall satisfy the
1908	1908	same security requirements that are applicable to a cannabis cultivation
1909	1909	facility.
1910	1910	(d) A cannabis transporter shall use the seed-to-sale tracking system
1911	1911	to create shipping manifests documenting the transport of cannabis and
1912	1912	cannabis products.
1913	1913	New Sec. 25. (a) A hospitality business license may be issued only to
1914	1914	a person who operates a premises in which cannabis and cannabis products
1915	1915	may be consumed in accordance with this act and rules and regulations
1916	1916	adopted pursuant thereto. The director shall maintain a list of all licensed
1917	1917	hospitality businesses in the state and shall publish such list on the website
1918	1918	of the division of alcoholic beverage control.
1919	1919	(b) A hospitality business shall:
1920	1920	(1) Ensure that the display and consumption of cannabis and cannabis
1921	1921	products is not visible from outside the licensed premises;
1922	1922	(2) educate patrons by providing cannabis education materials
1923	1923	regarding the safe consumption of cannabis and cannabis products. Such
1924	1924	materials shall be based on requirements recommended by the cannabis
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1968	1968	advisory committee and adopted by the secretary in rules and regulations.
1969	1969	A record of all such materials shall be maintained on the licensed premises
1970	1970	for inspection by the director; and
1971	1971	(3) ensure that, in the event of an emergency requiring the assistance
1972	1972	of law enforcement, emergency medical service providers or other public
1973	1973	safety personnel, all employees and patrons of the hospitality business
1974	1974	cease all consumption of cannabis and related activities until such
1975	1975	emergency ends and the emergency service personnel have exited the
1976	1976	licensed premises.
1977	1977	(c) A hospitality business shall not:
1978	1978	(1) Engage in or permit the sale or exchange for remuneration of
1979	1979	cannabis or cannabis products on the licensed premises;
1980	1980	(2) allow employees who are engaged in the performance of their
1981	1981	duties to consume any cannabis or cannabis products on the licensed
1982	1982	premises;
1983	1983	(3) distribute or allow distribution of free samples of cannabis or
1984	1984	cannabis products on the licensed premises;
1985	1985	(4) allow the consumption of alcoholic liquor on the licensed
1986	1986	premises;
1987	1987	(5) allow any activity for which a license is required under this act on
1988	1988	the licensed premises, including, but not limited to, the cultivation,
1989	1989	manufacturing or sale of cannabis or cannabis products;
1990	1990	(6) permit the use or consumption of cannabis or cannabis products
1991	1991	by a patron who displays any visible signs of intoxication; or
1992	1992	(7) admit any person who is under 21 years of age onto the licensed
1993	1993	premises.
1994	1994	(d) A hospitality business and employees of such business may
1995	1995	remove an individual from the licensed premises for any reason, including
1996	1996	a patron who displays any visible signs of intoxication.
1997	1997	New Sec. 26. (a) A hospitality and sales business license may be
1998	1998	issued only to a person who operates a premises in which cannabis and
1999	1999	cannabis products may be sold to a patron for consumption on or off the
2000	2000	licensed premises in accordance with this act and rules and regulations
2001	2001	adopted pursuant thereto. The director shall maintain a list of all licensed
2002	2002	hospitality and sales businesses in the state and shall publish such list
2003	2003	available on the website of the division of alcoholic beverage control.
2004	2004	(b) A hospitality and sales business shall:
2005	2005	(1) Track all of cannabis and cannabis products sold by such cannabis
2006	2006	business from the point that such cannabis and cannabis products are
2007	2007	transported from a licensed cannabis retailer, cannabis products
2008	2008	manufacturer or cannabis cultivation facility to the point of sale to a patron
2009	2009	of the hospitality and sales business;
2010	2010	(2) limit a patron to one transaction per day of not more than the
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2053	2053	43 HB 2367 25
2054	2054	amount of cannabis or cannabis product that may be sold in such
2055	2055	transaction pursuant to limits established by the director;
2056	2056	(3) ensure that all cannabis and cannabis products are properly
2057	2057	packaged and labeled prior to allowing a patron to leave the licensed
2058	2058	premises with such cannabis or cannabis products;
2059	2059	(4) ensure that the display and consumption of cannabis and cannabis
2060	2060	products is not visible from outside of the licensed premises;
2061	2061	(5) educate patrons by providing cannabis education materials
2062	2062	regarding the safe consumption of cannabis and cannabis products. Such
2063	2063	materials shall be based on requirements recommended by the cannabis
2064	2064	advisory committee and adopted by the secretary in rules and regulations.
2065	2065	A record of all such materials shall be maintained on the licensed premises
2066	2066	for inspection by the director; and
2067	2067	(6) ensure that, in the event of an emergency requiring the assistance
2068	2068	of law enforcement, emergency medical service providers or other public
2069	2069	safety personnel, all employees and patrons of the hospitality and sales
2070	2070	business cease all consumption of cannabis and related activities until such
2071	2071	emergency ends and the emergency service personnel have exited the
2072	2072	licensed premises.
2073	2073	(c) A hospitality and sales business may purchase cannabis and
2074	2074	cannabis products from any licensed cannabis retailer, cannabis products
2075	2075	manufacturer or cannabis cultivation facility.
2076	2076	(d) A hospitality and sales business shall not:
2077	2077	(1) Allow employees who are engaged in the performance of their
2078	2078	duties to consume any cannabis or cannabis products on the licensed
2079	2079	premises;
2080	2080	(2) distribute or allow distribution of free samples of cannabis or
2081	2081	cannabis products on the licensed premises;
2082	2082	(3) sell any cannabis or cannabis products that contain nicotine;
2083	2083	(4) hold a license issued pursuant to the Kansas liquor control act,
2084	2084	K.S.A. 41-101 et seq., and amendments thereto, the club and drinking
2085	2085	establishment act, K.S.A. 41-2601 et seq., and amendments thereto, or the
2086	2086	cereal malt beverage act, K.S.A. 41-2701 et seq., and amendments thereto,
2087	2087	or otherwise allow the consumption of alcoholic liquor on the licensed
2088	2088	premises;
2089	2089	(5) allow any activity for which a license is required under this act on
2090	2090	the licensed premises, including, but not limited to, the cultivation,
2091	2091	manufacturing or sale of cannabis or cannabis products;
2092	2092	(6) sell, serve or permit the use or consumption of cannabis or
2093	2093	cannabis products by a patron who displays any visible signs of
2094	2094	intoxication; or
2095	2095	(7) admit any person who is under 21 years of age onto the licensed
2096	2096	premises.
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2140	2140	(e) A hospitality and sales business and employees of such business
2141	2141	may remove an individual from the licensed premises for any reason,
2142	2142	including a patron who displays any visible signs of intoxication.
2143	2143	New Sec. 27. (a) A cannabis retailer license may be issued only to a
2144	2144	person selling cannabis and cannabis products to a patron for consumption
2145	2145	off the licensed premises.
2146	2146	(b) A cannabis retailer may:
2147	2147	(1) Cultivate cannabis for sale on the licensed premises if the licensee
2148	2148	also holds a cannabis cultivation facility license;
2149	2149	(2) purchase cannabis from a licensed cannabis cultivation facility,
2150	2150	provided that the cannabis cultivation facility provides evidence that any
2151	2151	applicable excise tax due pursuant to section 44, and amendments thereto,
2152	2152	has been paid;
2153	2153	(3) purchase cannabis and cannabis products from a licensed cannabis
2154	2154	products manufacturer;
2155	2155	(4) receive an order for the purchase and delivery of cannabis and
2156	2156	cannabis products through an online platform. If an online platform for is
2157	2157	used, such platform shall require the patron purchasing such cannabis or
2158	2158	cannabis product to choose a cannabis retailer prior to viewing the price;
2159	2159	and
2160	2160	(5) sell cannabis and cannabis products to a licensed hospitality and
2161	2161	sales business.
2162	2162	(c) A cannabis retailer shall:
2163	2163	(1) Ensure that all cannabis and cannabis products sold by the
2164	2164	licensee are packaged and labeled in accordance with this act and rules and
2165	2165	regulations adopted pursuant thereto;
2166	2166	(2) ensure that any display of cannabis concentrate includes the
2167	2167	potency of the cannabis concentrate next to the name of the product;
2168	2168	(3) track all cannabis and cannabis products sold by such cannabis
2169	2169	business from the point that such cannabis and cannabis products are
2170	2170	transported from a licensed cannabis products manufacturer or cannabis
2171	2171	cultivation facility to the point of sale to a patron of the licensee or to a
2172	2172	hospitality and sales business;
2173	2173	(4) only sell cannabis, cannabis products, cannabis accessories,
2174	2174	nonconsumable products such as apparel and cannabis-related products
2175	2175	such as childproof packaging containers;
2176	2176	(5) not permit the consumption of cannabis or cannabis products on
2177	2177	the licensed premises;
2178	2178	(6) not sell or provide free of charge any consumable product,
2179	2179	including, but not limited to, cigarettes, alcoholic liquor or any edible
2180	2180	product that does not contain cannabis;
2181	2181	(7) not sell any cannabis or cannabis products that contain nicotine or
2182	2182	alcoholic liquor; and
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2226	2226	(8) not sell cannabis or cannabis products through an online platform
2227	2227	or deliver cannabis or cannabis products to a person not physically present
2228	2228	on the licensed premises, except as otherwise provided.
2229	2229	(d) (1) A cannabis retailer shall not sell more than one ounce of
2230	2230	cannabis or the equivalent in cannabis products, including cannabis
2231	2231	concentrate, to an individual during a single transaction, except nonedible,
2232	2232	nonpsychoactive cannabis products, including ointments, lotions, balms
2233	2233	and other nontransdermal topical products, may be sold in amounts greater
2234	2234	than one ounce, but not to exceed any limits on such sales established by
2235	2235	the secretary in rules and regulations.
2236	2236	(2) Prior to completing a transaction, a cannabis retailer shall verify
2237	2237	that the purchaser has a valid identification card showing the purchaser is
2238	2238	21 years of age or older. If a person who is under 21 years of age presents
2239	2239	a fraudulent proof of age, any action relying on such fraudulent proof of
2240	2240	age shall not be grounds for the revocation or suspension of any license
2241	2241	issued under this act.
2242	2242	(3) If a cannabis retailer or such retailer's employee has reasonable
2243	2243	cause to believe that a person is under 21 years of age and is exhibiting
2244	2244	fraudulent proof of age in an attempt to obtain cannabis or cannabis
2245	2245	product, the retailer or employee may confiscate such fraudulent proof of
2246	2246	age, if possible, and shall, within 72 hours, remit such confiscated proof of
2247	2247	age to an appropriate law enforcement agency. The failure to confiscate
2248	2248	such fraudulent proof of age or to remit to a law enforcement agency
2249	2249	within 72 hours after such confiscation shall not constitute a criminal
2250	2250	offense.
2251	2251	(4) If a cannabis retailer or such retailer's employee has reasonable
2252	2252	cause to believe that a person is under 21 years of age and is exhibiting
2253	2253	fraudulent proof of age in an attempt to obtain cannabis or cannabis
2254	2254	product, the retailer or employee or any law enforcement officer, acting in
2255	2255	good faith and upon probable cause based upon reasonable grounds
2256	2256	therefor, may detain and question such person in a reasonable manner for
2257	2257	the purpose of ascertaining whether the person is guilty of any unlawful
2258	2258	act regarding the purchase of cannabis or cannabis product. The
2259	2259	questioning of a person by an employee or a law enforcement officer shall
2260	2260	not render the licensee, the employee or the law enforcement officer civilly
2261	2261	or criminally liable for slander, false arrest, false imprisonment, malicious
2262	2262	prosecution or unlawful detention.
2263	2263	(e) A cannabis retailer may provide a cannabis sample or cannabis
2264	2264	product sample to a licensed cannabis testing facility. A cannabis retailer
2265	2265	shall maintain a record of the cannabis and cannabis product samples
2266	2266	provided to a cannabis testing facility, the identity of such cannabis testing
2267	2267	facility and the results of the testing.
2268	2268	(f) An automatic dispensing machine that contains cannabis and
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2312	2312	cannabis products may only be located on the licensed premises of a
2313	2313	cannabis retailer. Any such machine shall comply with any rules and
2314	2314	regulations adopted pursuant to this act for the operation of such machines.
2315	2315	(g) Notwithstanding any other provision of law to the contrary, a
2316	2316	cannabis retailer may compensate employees of the cannabis retailer using
2317	2317	performance-based incentives, including sales-based performance-based
2318	2318	incentives.
2319	2319	New Sec. 28. (a) A cannabis testing facility license may be issued
2320	2320	only to a person who performs testing and research on cannabis and
2321	2321	cannabis products.
2322	2322	(b) A person who has an interest in a licensed cannabis testing facility
2323	2323	shall not have any interest in a licensed cannabis retailer, cannabis
2324	2324	cultivation facility or cannabis products manufacturer.
2325	2325	(c) The director shall adopt rules and regulations for acceptable
2326	2326	testing and research practices, including, but not limited to, testing
2327	2327	protocols, standards, quality control analysis, equipment certification and
2328	2328	calibration, chemical identification and other substances used in research
2329	2329	methods.
2330	2330	New Sec. 29. A cannabis business operator license may be issued
2331	2331	only to a person who operates a licensed cannabis business for the owner
2332	2332	of such business and who receives compensation for such performance,
2333	2333	which may include a portion of the profits.
2334	2334	New Sec. 30. (a) (1) A cannabis cultivation facility may provide a
2335	2335	sample of cannabis and cannabis concentrate to managers employed by the
2336	2336	licensee for purposes of quality control and product development. A
2337	2337	cannabis cultivation facility may designate no more than five managers per
2338	2338	month as recipients of quality control and product development samples.
2339	2339	(2) A cannabis products manufacturer may provide a cannabis
2340	2340	product sample and a cannabis concentrate sample to managers employed
2341	2341	by the licensee for purposes of quality control and product development. A
2342	2342	cannabis products manufacturer may designate no more than five
2343	2343	managers per month as recipients of quality control and product
2344	2344	development samples.
2345	2345	(b) (1) A sample provided by a cannabis cultivation facility shall be
2346	2346	limited to:
2347	2347	(A) One gram of cannabis per batch; and
2348	2348	(B)
2349	2349	1
2350	2350	/4 gram of cannabis concentrate per batch, except that
2351	2351	1
2352	2352	/2 gram of
2353	2353	cannabis concentrate shall be the limit if the intended use of the final
2354	2354	product is to be used in a device that can be used to deliver cannabis
2355	2355	concentrate in a vaporized form to the person inhaling from the device.
2356	2356	(2) A sample provided by a cannabis products manufacturer shall be
2357	2357	limited to:
2358	2358	(A) One serving size of an edible cannabis product not exceeding 10
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2402	2402	milligrams of tetrahydrocannabinol per batch;
2403	2403	(B) one serving size of nonedible cannabis product per batch that has
2404	2404	the applicable equivalent amount of tetrahydrocannabinol, as defined in
2405	2405	rules and regulations adopted pursuant to this act; and
2406	2406	(C)
2407	2407	1
2408	2408	/4 gram of cannabis concentrate per batch, except that
2409	2409	1
2410	2410	/2 gram of
2411	2411	cannabis concentrate shall be the limit if the intended use of the final
2412	2412	product is to be used in a device that can be used to deliver cannabis
2413	2413	concentrate in a vaporized form to the person inhaling from the device.
2414	2414	(c) A sample shall be labeled and packaged pursuant to rules and
2415	2415	regulations adopted pursuant to this act.
2416	2416	(d) A sample shall be tracked with the seed-to-sale tracking system.
2417	2417	Prior to a manager receiving a sample, a manager shall be designated in
2418	2418	the seed-to-sale tracking system as a recipient of quality control and
2419	2419	product development samples. A manager receiving a sample shall make a
2420	2420	voluntary decision to be tracked in the seed-to-sale tracking system. The
2421	2421	cannabis cultivation facility or cannabis products manufacturer shall
2422	2422	maintain documentation of all samples provided to a manager and shall
2423	2423	make such documentation available to the director upon request.
2424	2424	(e) Prior to a manager receiving a sample, a cannabis cultivation
2425	2425	facility or cannabis products manufacturer shall provide a standard
2426	2426	operating procedure to the manager explaining the requirements of this
2427	2427	section and personal possession limits.
2428	2428	(f) A manager shall not:
2429	2429	(1) Receive more than one ounce total of cannabis or eight grams of
2430	2430	cannabis concentrate samples per month, regardless of the number of
2431	2431	cannabis businesses the manager is associated with; or
2432	2432	(2) provide to or resell the sample to an employee of a cannabis
2433	2433	business, a customer of such business or any other individual.
2434	2434	(g) A cannabis cultivation facility or cannabis products manufacturer
2435	2435	shall not:
2436	2436	(1) Allow a manager to consume the sample on the licensed premises;
2437	2437	or
2438	2438	(2) use the sample as a means of compensation to a manager.
2439	2439	(h) The director may establish additional inventory tracking and
2440	2440	record keeping requirements, including any additional reporting. Such
2441	2441	information shall be maintained on the licensed premises for inspection by
2442	2442	the director upon request.
2443	2443	(i) The excise tax levied pursuant to section 44, and amendments
2444	2444	thereto, shall be collected on any sample provided by a cannabis
2445	2445	cultivation facility pursuant to this section.
2446	2446	(j) For purposes of this section, the term "manager" means an
2447	2447	employee of the cannabis cultivation facility or cannabis products
2448	2448	manufacturer who holds an occupational license and is currently
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2492	2492	designated as a manager of such cannabis cultivation facility or cannabis
2493	2493	products manufacturer.
2494	2494	New Sec. 31. (a) A cannabis delivery permit may be issued to a
2495	2495	licensed cannabis transporter or a licensed cannabis retailer authorizing the
2496	2496	permit holder to deliver cannabis and cannabis products to individuals.
2497	2497	(b) A cannabis delivery permit shall be valid for one year from the
2498	2498	date such permit is issued and may be renewed annually upon renewal of a
2499	2499	cannabis transporter license or cannabis retailer license.
2500	2500	(c) A cannabis delivery permit shall only be issued to a licensed
2501	2501	cannabis transporter or cannabis retailer, except a cannabis delivery permit
2502	2502	may be applied to more than one licensed cannabis business, provided that
2503	2503	such cannabis businesses are owned by the same person.
2504	2504	(d) A cannabis transporter or cannabis retailer shall not deliver
2505	2505	cannabis or cannabis products to individuals while transporting cannabis
2506	2506	or cannabis products between licensed cannabis businesses in the same
2507	2507	vehicle.
2508	2508	(e) (1) The holder of a cannabis delivery permit shall:
2509	2509	(A) Conduct deliveries on behalf of, and pursuant to a contract with,
2510	2510	a licensed cannabis retailer;
2511	2511	(B) receive only packaged cannabis delivery orders from a licensed
2512	2512	cannabis retailer;
2513	2513	(C) deliver cannabis and cannabis products only by a motor vehicle
2514	2514	that satisfies the requirements of this act and rules and regulations adopted
2515	2515	pursuant thereto;
2516	2516	(D) deliver only to the individual identified in the order and who:
2517	2517	(i) Is 21 years of age or older;
2518	2518	(ii) receives delivery of the cannabis or cannabis products in
2519	2519	accordance with rules and regulations adopted pursuant to this act; and
2520	2520	(iii) possesses an acceptable form of identification; and
2521	2521	(E) deliver only to a private residence at the address provided in the
2522	2522	order.
2523	2523	(2) The holder of a cannabis delivery permit shall not:
2524	2524	(A) Accept orders on behalf of a cannabis retailer, if the holder is a
2525	2525	cannabis transporter;
2526	2526	(B) deliver cannabis and cannabis products in excess of amounts
2527	2527	established by the director; or
2528	2528	(C) deliver cannabis or cannabis products more than once per day to
2529	2529	the same individual or residence.
2530	2530	(f) Prior to transferring possession of the order to an individual, the
2531	2531	individual delivering the order shall inspect the recipient's identification
2532	2532	and verify that the information provided at the time of the order matches
2533	2533	the name and age on the recipient's identification.
2534	2534	(g) Any individual delivering cannabis and cannabis products shall
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2578	2578	hold a valid occupational license and be a current employee of a licensed
2579	2579	cannabis transporter or cannabis retailer that holds a valid cannabis
2580	2580	delivery permit. Such individual shall be certified as having completed
2581	2581	training regarding proof-of-age identification and verification, including
2582	2582	all forms of identification that are deemed acceptable by the director, and
2583	2583	any other training required by the director.
2584	2584	(h) Except as otherwise provided, all requirements applicable to
2585	2585	licensees under this act, including, but not limited to, inventory tracking,
2586	2586	transportation, packaging, labeling and advertising requirements, shall
2587	2587	apply to any person holding a cannabis delivery permit.
2588	2588	(i) For purposes of this section, the term "private residence" means a
2589	2589	private premises where an individual lives, such as a private dwelling
2590	2590	place or place of habitation, and specifically excludes any premises located
2591	2591	at a school or on the campus of a public or private postsecondary
2592	2592	educational institution or any other public property.
2593	2593	New Sec. 32. (a) The director shall charge and collect the following
2594	2594	fees for an application for a cannabis business license:
2595	2595	(1) For a cannabis retailer, cannabis products manufacturer or
2596	2596	cannabis cultivation facility, an amount not to exceed $5,000;
2597	2597	(2) for a cannabis testing facility, cannabis transporter, cannabis
2598	2598	business operator, hospitality business or hospitality and sales business, an
2599	2599	amount not to exceed $1,000; and
2600	2600	(3) for the renewal application for any cannabis business license,
2601	2601	$300.
2602	2602	(b) The director shall charge and collect the following fees for a
2603	2603	license issued to a cannabis business:
2604	2604	(1) For a cannabis retailer, an amount not to exceed $2,000;
2605	2605	(2) for a cannabis products manufacturer or cannabis testing facility,
2606	2606	an amount not to exceed $1,500;
2607	2607	(3) for a cannabis cultivation facility:
2608	2608	(A) For a facility with not more than 1,800 plants, $1,500;
2609	2609	(B) for a facility with more than 1,800, but not more than 3,600
2610	2610	plants, $2,300;
2611	2611	(C) for a facility with more than 3,600, but not more than 6,000
2612	2612	plants, $3,000;
2613	2613	(D) for a facility with more than 6,000, but not more than 10,200
2614	2614	plants, $4,500;
2615	2615	(E) for a facility with more than 10,200, but not more than 13,800
2616	2616	plants, $6,500; and
2617	2617	(F) for a facility with more than 13,800 plants, $6,500 plus $800 for
2618	2618	every additional 3,600 plants over 13,800;
2619	2619	(4) for a cannabis transporter, an amount not to exceed $4,400;
2620	2620	(5) for a cannabis business operator, an amount not exceed $2,200;
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2664	2664	(6) for a hospitality business, an amount not to exceed $1,000; and
2665	2665	(7) for a hospitality and sales business, an amount not to exceed
2666	2666	$2,000.
2667	2667	(c) The director shall charge and collect the following fees for owner
2668	2668	and employee licenses and certifications:
2669	2669	(1) For a finding of suitability:
2670	2670	(A) For an individual, an amount not to exceed $800;
2671	2671	(B) for an entity that is not a publicly traded corporation, an amount
2672	2672	not to exceed $800 plus $800 for each additional individual or entity
2673	2673	associated with the applicant who is subject to a finding of suitability; and
2674	2674	(C) for a publicly traded corporation, an amount not to exceed $6,000
2675	2675	plus $800 for each additional individual or entity associated with the
2676	2676	applicant who is subject to a finding of suitability;
2677	2677	(2) for an owner occupational license, an amount not to exceed $500;
2678	2678	(3) for an employee occupational license, an amount not to exceed
2679	2679	$100; and
2680	2680	(4) for the renewal of an owner or employee occupational license, an
2681	2681	amount not to exceed $75.
2682	2682	(d) The director shall charge and collect the following fees for permit
2683	2683	applications:
2684	2684	(1) For a centralized distribution permit, an amount not to exceed
2685	2685	$20;
2686	2686	(2) for a cannabis delivery permit, an amount not to exceed $2,000;
2687	2687	(3) for an approval of a change of permanent location, an amount not
2688	2688	to exceed $500; and
2689	2689	(4) for an approval of a transfer of ownership, an amount not to
2690	2690	exceed $1,600.
2691	2691	New Sec. 33. (a) Except as otherwise provided in this act, it is
2692	2692	unlawful for a person to:
2693	2693	(1) Purchase, sell, transfer, give away or acquire cannabis or cannabis
2694	2694	products except in accordance with this act;
2695	2695	(2) consume cannabis or cannabis products in a licensed cannabis
2696	2696	business, except on the licensed premises of a hospitality business or
2697	2697	hospitality and sales business;
2698	2698	(3) have a controlling beneficial ownership, passive beneficial
2699	2699	ownership or indirect financial interest in a cannabis business license that
2700	2700	was not disclosed in accordance with section 17, and amendments thereto,
2701	2701	except banks or savings and loan associations supervised and regulated by
2702	2702	the state or federal government, FHA-approved mortgagees or
2703	2703	stockholders, directors or officers thereof;
2704	2704	(4) exercise any privilege of a cannabis business license, unless such
2705	2705	person holds a valid license to exercise such privileges;
2706	2706	(5) exercise any privilege associated with holding a controlling
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2750	2750	beneficial ownership, passive beneficial ownership or indirect financial
2751	2751	interest in a cannabis business license that was not disclosed in accordance
2752	2752	with section 17, and amendments thereto; or
2753	2753	(6) engage in the transfer of ownership of a cannabis business without
2754	2754	prior approval as required by section 15, and amendments thereto.
2755	2755	(b) It is unlawful for a licensed cannabis business to:
2756	2756	(1) Fail to report a transfer required by section 12, and amendments
2757	2757	thereto;
2758	2758	(2) knowingly adulterate or alter, or to attempt to adulterate or alter,
2759	2759	any samples of cannabis or cannabis products for the purpose of
2760	2760	circumventing contaminant testing detection limits or potency testing
2761	2761	requirements;
2762	2762	(3) use advertising material that is misleading, deceptive or false, or
2763	2763	that is designed to appeal to minors;
2764	2764	(4) allow cannabis and cannabis products to be consumed on the
2765	2765	licensed premises, except on the licensed premises of a hospitality
2766	2766	business or hospitality and sales business;
2767	2767	(5) sell or permit the sale of cannabis or cannabis products to a person
2768	2768	under 21 years of age;
2769	2769	(6) have in possession or on the licensed premises any cannabis that
2770	2770	the licensee is not permitted to sell under such license, except cannabis
2771	2771	possessed for purposes of recycling;
2772	2772	(7) have on the licensed premises any cannabis or cannabis
2773	2773	paraphernalia that shows evidence of cannabis having been consumed or
2774	2774	partially consumed, except on the licensed premises of a hospitality
2775	2775	business or hospitality and sales business, or cannabis and cannabis
2776	2776	paraphernalia possessed for purposes of recycling;
2777	2777	(8) abandon a licensed premises or otherwise cease operation without
2778	2778	notifying the director at least 48 hours prior to such cessation and without
2779	2779	accounting for and forfeiting to the director all cannabis and cannabis
2780	2780	products on the licensed premises for destruction;
2781	2781	(9) offer for sale or solicit an order for cannabis or cannabis products
2782	2782	in person, except on the licensed premises;
2783	2783	(10) purchase cannabis or cannabis products from a person who does
2784	2784	not hold the proper license under this act;
2785	2785	(11) burn or otherwise destroy cannabis, cannabis products or any
2786	2786	other substance containing cannabis for the purpose of evading an
2787	2787	investigation or preventing seizure; or
2788	2788	(12) engage in any act or omission with the intent to evade disclosure,
2789	2789	reporting, record keeping or suitability requirements, including, but not
2790	2790	limited to, the following:
2791	2791	(A) Failing to file a report required under this act or causing or
2792	2792	attempting to cause a person to fail to file such a report;
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2836	2836	(B) filing or causing or attempting to cause a person to file a report
2837	2837	required under this act that contains a material omission or misstatement of
2838	2838	fact;
2839	2839	(C) making false or misleading statements regarding the offering of
2840	2840	an owner's interest in a cannabis business; or
2841	2841	(D) structuring any transaction with the intent to evade disclosure,
2842	2842	reporting, record keeping or suitability requirements.
2843	2843	(c) (1) Except as otherwise provided in paragraph (2), a violation of
2844	2844	of this section shall be a class B nonperson misdemeanor.
2845	2845	(2) A violation of subsection (b)(5) shall be a class A nonperson
2846	2846	misdemeanor.
2847	2847	(d) Nothing in this section shall be construed to prohibit the
2848	2848	prosecution of any crime under chapter 21 of the Kansas Statutes
2849	2849	Annotated, and amendments thereto.
2850	2850	New Sec. 34. (a) In addition to or in lieu of any other civil or criminal
2851	2851	penalty as provided by law, the director may refuse to issue or renew a
2852	2852	license, or may revoke or suspend a license for any of the following
2853	2853	reasons:
2854	2854	(1) The person has failed to comply with any provision of the adult
2855	2855	use cannabis regulation act or any rules and regulations adopted pursuant
2856	2856	thereto;
2857	2857	(2) the person has falsified or misrepresented any information
2858	2858	submitted to the director in order to obtain a license; or
2859	2859	(3) the person has violated any of the provisions of section 33, and
2860	2860	amendments thereto.
2861	2861	(b) Upon the final decision of the director to suspend a license for a
2862	2862	period of more than 14 days, the licensee may, prior to the commencement
2863	2863	of such suspension period, submit a petition to the director for permission
2864	2864	to pay a fine in lieu of suspension of such license. Such fine shall be not
2865	2865	less than $500 or more than $100,000. The director may, in the director's
2866	2866	sole discretion, stay the proposed suspension and cause any investigation
2867	2867	to be made or grant such petition if the director is satisfied that:
2868	2868	(1) The public welfare would not be impaired by permitting the
2869	2869	licensee to operate during the period set for suspension and that the
2870	2870	payment of the fine will achieve the desired disciplinary purposes;
2871	2871	(2) the books and records of the licensee are kept in such a manner
2872	2872	that the loss of sales that the licensee would have suffered had the
2873	2873	suspension gone into effect can be determined with reasonable accuracy;
2874	2874	and
2875	2875	(3) the licensee has not had such license suspended or revoked or had
2876	2876	any suspension stayed by payment of a fine during the two years
2877	2877	immediately preceding the date of the violation that resulted in a final
2878	2878	decision to suspend such license.
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2922	2922	(c) Upon payment of a fine pursuant to subsection (b), the director
2923	2923	shall issue an order staying the imposition of the suspension of such
2924	2924	license.
2925	2925	New Sec. 35. (a) Except as provided in subsection (d), the director
2926	2926	shall not be required to cultivate, maintain or preserve any cannabis or
2927	2927	cannabis product owned by or seized from a cannabis business. The
2928	2928	director shall not sell, solicit for sale or otherwise transfer any cannabis or
2929	2929	cannabis products in the possession of the director.
2930	2930	(b) In addition to any other remedies provided by law, any final order
2931	2931	issued by the director imposing a disciplinary action against a licensee
2932	2932	may specify that all or some portion of such licensee's cannabis or
2933	2933	cannabis product does not comply with the requirements of this act or
2934	2934	rules and regulations adopted pursuant thereto and is an illegal controlled
2935	2935	substance. Such order may further specify that the licensee has no interest
2936	2936	in any such cannabis or cannabis product. Except as otherwise provided in
2937	2937	subsections (c) and (d), upon the issuance of such order the director may
2938	2938	direct the destruction of any such cannabis or cannabis products. Any
2939	2939	authorized destruction of cannabis or cannabis products may include the
2940	2940	incidental destruction of any containers, equipment, supplies and other
2941	2941	property associated with such cannabis or cannabis product.
2942	2942	(c) The director shall not direct the destruction of any cannabis or
2943	2943	cannabis products until such time as the order authorizing such destruction
2944	2944	becomes final, subject to the provisions of section 41, and amendments
2945	2945	thereto. Pending final disposition of an order authorizing the destruction of
2946	2946	cannabis or cannabis products, the director shall maintain such cannabis or
2947	2947	cannabis products.
2948	2948	(d) Any county or district attorney who commences an investigation
2949	2949	of a cannabis business shall notify the director of such investigation. If the
2950	2950	director has received such notification from a county or district attorney,
2951	2951	the director shall not direct the destruction of any cannabis or cannabis
2952	2952	products possessed by the cannabis business under investigation until such
2953	2953	destruction is approved by the notifying county or district attorney.
2954	2954	New Sec. 36. (a) Any person listed in subsections (b)(1), (b)(2) or (b)
2955	2955	(3) may engage or direct a person under 21 years of age to violate the
2956	2956	provisions of the adult use cannabis regulation act in order to develop a
2957	2957	program or system that determines and encourages compliance with the
2958	2958	provisions of such act prohibiting the furnishing or sale of cannabis and
2959	2959	cannabis products to a person under 21 years of age or the consumption of
2960	2960	cannabis or cannabis products by such persons.
2961	2961	(b) No person shall engage or direct a person under 21 years of age to
2962	2962	violate any provision of the adult use cannabis regulation act for purposes
2963	2963	of determining compliance with the provisions of such act unless such
2964	2964	person is:
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3008	3008	(1) An officer having authority to enforce the provisions of such act;
3009	3009	(2) an authorized representative of the attorney general or a county or
3010	3010	district attorney; or
3011	3011	(3) a licensee under such act or such licensee's designee pursuant to a
3012	3012	self-compliance program designed to increase compliance with the
3013	3013	provisions of such act if such program has been approved by the director.
3014	3014	New Sec. 37. (a) A financial institution that provides financial
3015	3015	services to any licensed cannabis business shall be exempt from any
3016	3016	criminal law of this state an element of which may be proven by
3017	3017	substantiating that a person provides financial services to a person who
3018	3018	possesses, delivers or manufactures cannabis or cannabis products,
3019	3019	including any of the offenses specified in article 53 or 57 of chapter 21 of
3020	3020	the Kansas Statutes Annotated, and amendments thereto, if the licensed
3021	3021	cannabis business is in compliance with the provisions of this act and all
3022	3022	applicable tax laws of this state.
3023	3023	(b) (1) Upon the request of a financial institution, the director shall
3024	3024	provide to the financial institution the following information:
3025	3025	(A) Whether a person with whom the financial institution is seeking
3026	3026	to do business is a licensed cannabis business;
3027	3027	(B) the name of any controlling beneficial ownership, passive
3028	3028	beneficial ownership or indirect financial interest in such licensed cannabis
3029	3029	business;
3030	3030	(C) an unredacted copy of such person's application for a cannabis
3031	3031	business license, and any supporting documentation, that was submitted by
3032	3032	such person;
3033	3033	(D) if applicable, information relating to sales and volume of
3034	3034	cannabis and cannabis product sold by such person;
3035	3035	(E) whether the person is in compliance with the provisions of this
3036	3036	act and rules and regulations adopted pursuant thereto; and
3037	3037	(F) any past or pending violations of this act or any rules and
3038	3038	regulations adopted pursuant thereto committed by such person, and any
3039	3039	penalty imposed on such person for such violation.
3040	3040	(2) The director may charge a financial institution a reasonable fee to
3041	3041	cover the administrative cost of providing information requested under this
3042	3042	section.
3043	3043	(c) Information received by a financial institution under subsection
3044	3044	(b) is confidential. Except as otherwise permitted by any other state or
3045	3045	federal law, a financial institution shall not make the information available
3046	3046	to any person other than the customer to whom the information applies and
3047	3047	any trustee, conservator, guardian, personal representative or agent of that
3048	3048	customer.
3049	3049	(d) As used in this section:
3050	3050	(1) "Financial institution" means any bank, trust company, savings
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3094	3094	bank, credit union or savings and loan association or any other financial
3095	3095	institution regulated by the state of Kansas, any agency of the United
3096	3096	States or other state with an office in Kansas; and
3097	3097	(2) "financial services" means services that a financial institution is
3098	3098	authorized to provide under chapter nine or article 22 of chapter 17 of the
3099	3099	Kansas Statutes Annotated, and amendments thereto, as applicable.
3100	3100	New Sec. 38. (a) There is hereby established the cannabis business
3101	3101	regulation fund in the state treasury. The director shall administer the
3102	3102	cannabis business regulation fund and shall remit all moneys collected
3103	3103	from the payment of all fees and fines imposed by the director pursuant to
3104	3104	the adult use cannabis regulation act and any other moneys received by or
3105	3105	on behalf of the director pursuant to such act to the state treasurer in
3106	3106	accordance with the provisions of K.S.A. 75-4215, and amendments
3107	3107	thereto. Upon receipt of each such remittance, the state treasurer shall
3108	3108	deposit the entire amount in the state treasury to the credit of the cannabis
3109	3109	business regulation fund. Moneys credited to the cannabis business
3110	3110	regulation fund shall only be expended or transferred as provided in this
3111	3111	section. Expenditures from such fund shall be made in accordance with
3112	3112	appropriation acts upon warrants of the director of accounts and reports
3113	3113	issued pursuant to vouchers approved by the director or the director's
3114	3114	designee.
3115	3115	(b) Moneys in the cannabis business regulation fund shall be used for
3116	3116	the payment or reimbursement of costs related to the regulation and
3117	3117	enforcement of the cultivation, manufacturing, testing, sale and
3118	3118	consumption of cannabis by the division of alcoholic beverage control.
3119	3119	New Sec. 39. (a) The cannabis advisory committee is hereby created
3120	3120	in the department of revenue. The committee shall consist of the
3121	3121	following:
3122	3122	(1) Six members appointed by the governor as follows:
3123	3123	(A) One member who represents employers;
3124	3124	(B) one member who represents employees;
3125	3125	(C) one member who represents law enforcement;
3126	3126	(D) one member who represents agriculture;
3127	3127	(E) one member who represents persons involved in the treatment of
3128	3128	alcohol and drug addiction; and
3129	3129	(F) one member who engages in academic research on the use or
3130	3130	regulation of cannabis;
3131	3131	(2) two members appointed by the president of the senate;
3132	3132	(3) one member appointed by the minority leader of the senate;
3133	3133	(4) two members appointed by the speaker of the house of
3134	3134	representatives;
3135	3135	(5) one member appointed by the minority leader of the house of
3136	3136	representatives; and
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3180	3180	(6) the secretary of revenue or the secretary's designee, who shall
3181	3181	serve as chairperson.
3182	3182	(b) The initial appointments to the committee shall be made on or
3183	3183	before July 31, 2023.
3184	3184	(c) Except for the secretary of revenue, each member of the
3185	3185	committee shall serve from the date of appointment until the committee
3186	3186	ceases to exist, except that members shall serve at the pleasure of the
3187	3187	appointing authority. A vacancy shall be filled in the same manner as the
3188	3188	original appointment.
3189	3189	(d) Each member of the committee shall be paid compensation,
3190	3190	subsistence allowances, mileage and other expenses as provided in K.S.A.
3191	3191	75-3223(e), and amendments thereto.
3192	3192	(e) The committee shall hold its initial meeting not later than 30 days
3193	3193	after the last member of the committee is appointed. The committee may
3194	3194	develop and submit to the secretary and the director any recommendations
3195	3195	related to the implementation and enforcement of this act.
3196	3196	(f) The provisions of this section shall expire on July 1, 2025.
3197	3197	New Sec. 40. (a) On or before July 1, 2024, the secretary of revenue
3198	3198	shall adopt rules and regulations to implement, administer and enforce the
3199	3199	provisions of the adult use cannabis regulation act.
3200	3200	(b) Rules and regulations adopted pursuant to this section shall
3201	3201	include:
3202	3202	(1) Procedures for the issuance, renewal, suspension and revocation
3203	3203	of licenses to operate cannabis businesses;
3204	3204	(2) application, licensing and renewal fees for cannabis businesses;
3205	3205	(3) qualifications for licensure, including, but not limited to, the
3206	3206	requirement for a fingerprint-based criminal history record check for all
3207	3207	controlling beneficial owners, passive beneficial owners, managers,
3208	3208	contractors, employees and other support staff of licensed cannabis
3209	3209	businesses;
3210	3210	(4) establishment of a cannabis and cannabis products independent
3211	3211	testing and certification program for licensed cannabis businesses
3212	3212	requiring licensees to test cannabis and cannabis products to ensure, at a
3213	3213	minimum, that products sold for human consumption do not contain
3214	3214	contaminants that are injurious to health and to ensure correct labeling;
3215	3215	(5) security requirements for any licensed premises, including, but
3216	3216	not limited to, lighting, physical security, video and alarm requirements
3217	3217	and other procedures for internal control as deemed necessary by the
3218	3218	director to properly administer and enforce the provisions of this act,
3219	3219	including reporting requirements for changes, alterations or modifications
3220	3220	to the licensed premises;
3221	3221	(6) requirements for licensed cannabis businesses to comply with
3222	3222	sustainability protocols and to adopt standard operating procedures to
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3266	3266	prevent negative environmental impacts;
3267	3267	(7) labeling requirements for cannabis and cannabis products sold by
3268	3268	a cannabis business, including, but not limited to:
3269	3269	(A) Warning labels;
3270	3270	(B) the amount of tetrahydrocannabinol per serving and the number
3271	3271	of servings per package for cannabis products;
3272	3272	(C) a universal symbol indicating that the package contains cannabis;
3273	3273	and
3274	3274	(D) potency of the cannabis and cannabis products;
3275	3275	(8) health and safety regulations and standards for the cultivation of
3276	3276	cannabis and the manufacture of cannabis products;
3277	3277	(9) the storage and transportation of cannabis and cannabis products;
3278	3278	(10) sanitary requirements for cannabis businesses, including, but not
3279	3279	limited to, sanitary requirements for the preparation of cannabis and
3280	3280	cannabis products;
3281	3281	(11) the reporting and remittance of sales taxes collected by cannabis
3282	3282	retailers and hospitality and sales businsses and the reporting and
3283	3283	remittance of excise taxes paid by cannabis cultivation facilities;
3284	3284	(12) procedures for issuing and appealing citations for violation of
3285	3285	this act and rules and regulations adopted pursuant thereto;
3286	3286	(13) requirements for drivers employed by a licensed cannabis
3287	3287	transporter or a cannabis delivery permit holder, including:
3288	3288	(A) Obtaining and maintaining a valid Kansas driver's license;
3289	3289	(B) insurance requirements;
3290	3290	(C) acceptable manner of transport, storage and delivery of cannabis
3291	3291	and cannabis products; and
3292	3292	(D) requirements for transport vehicles;
3293	3293	(14) the form and structure of agreements between cannabis
3294	3294	businesses and cannabis business operators;
3295	3295	(15) requirements for access to limited access areas by nonescorted
3296	3296	visitors;
3297	3297	(16) requirements for issuance of a centralized distribution permit for
3298	3298	cannabis cultivation facilities, including, but not limited to, permit
3299	3299	application requirements and privileges and restrictions of a centralized
3300	3300	distribution permit;
3301	3301	(17) development of individual identification cards for individuals
3302	3302	who are controlling beneficial owners and any person operating, working
3303	3303	in or having unescorted access to the limited access areas of the licensed
3304	3304	premises of a cannabis business, including a fingerprint-based criminal
3305	3305	history record check as required under this act;
3306	3306	(18) specification of the acceptable forms of photo identification that
3307	3307	a cannabis retailer may accept when verifying a sale;
3308	3308	(19) requiring that edible cannabis products be clearly identifiable,
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3352	3352	when practicable, with a standard symbol indicating that such products
3353	3353	contain cannabis and are not for consumption by minors;
3354	3354	(20) requirements to prevent the sale or diversion of cannabis and
3355	3355	cannabis products to persons under 21 years of age;
3356	3356	(21) conditions under which a cannabis business is authorized to
3357	3357	collect cannabis consumer waste and transfer it to a person for the
3358	3358	purposes of reuse or recycling in accordance with all requirements
3359	3359	established by the department of health and environment pertaining to
3360	3360	waste disposal and recycling. Such conditions shall include:
3361	3361	(A) Record-keeping requirements;
3362	3362	(B) security measures related to the collection and transfer of
3363	3363	cannabis consumer waste;
3364	3364	(C) health and safety requirements, including requirements for the
3365	3365	handling of cannabis consumer waste; and
3366	3366	(D) processes associated with handling cannabis consumer waste,
3367	3367	including destruction of any remaining cannabis in the cannabis consumer
3368	3368	waste;
3369	3369	(22) ownership and financial disclosure procedures and requirements,
3370	3370	including requirements for findings of suitability;
3371	3371	(23) requirements for hospitality business and hospitality and sales
3372	3372	business licensees, including, but not limited to:
3373	3373	(A) General insurance liability requirements;
3374	3374	(B) limits on the sale of cannabis and cannabis products by a
3375	3375	hospitality and sales business, except that any such limit shall not be an
3376	3376	amount less than one gram of cannabis flower,
3377	3377	1
3378	3378	/4 gram of cannabis
3379	3379	concentrate or a cannabis product containing not more than 10 milligrams
3380	3380	of active tetrahydrocannabinol;
3381	3381	(C) limits on the type of any cannabis and cannabis product
3382	3382	authorized to be sold, including that the cannabis or cannabis product be
3383	3383	meant for consumption on the licensed premises;
3384	3384	(D) requirements for hospitality business and hospitality and sales
3385	3385	business licensees to destroy any unconsumed cannabis and cannabis
3386	3386	products; and
3387	3387	(24) requirements for hospitality businesses that are mobile facilities,
3388	3388	including, but not limited to:
3389	3389	(A) Registration of vehicles and proper designation of vehicles used
3390	3390	as mobile licensed premises;
3391	3391	(B) surveillance cameras inside the vehicles;
3392	3392	(C) global positioning system tracking and route logging in an
3393	3393	established route manifest system;
3394	3394	(D) ensuring activity is not visible outside of the vehicle; and
3395	3395	(E) proper ventilation within the vehicle.
3396	3396	(c) Rules and regulations adopted pursuant to this section may
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3440	3440	include:
3441	3441	(1) Labeling guidelines concerning the total content of
3442	3442	tetrahydrocannabinol per unit of weight;
3443	3443	(2) control of informational and product displays on licensed
3444	3444	premises;
3445	3445	(3) records to be kept by cannabis business licensees and the required
3446	3446	availability of the records;
3447	3447	(4) requirements for inspections, investigations, searches, seizures,
3448	3448	forfeitures and such additional activities as necessary; and
3449	3449	(5) such other rules and regulations necessary for the implementation,
3450	3450	administration and enforcement of this act.
3451	3451	(d) The director shall propose such rules and regulations as necessary
3452	3452	to carry out the intent and purposes of this act. After the hearing on a
3453	3453	proposed rule and regulation has been held as required by law, the director
3454	3454	shall submit the proposed rule and regulation to the secretary of revenue
3455	3455	who, if the secretary approves such rule and regulation, shall adopt the rule
3456	3456	and regulation.
3457	3457	(e) When adopting rules and regulations under this section, the
3458	3458	secretary shall consider standards and procedures that have been found to
3459	3459	be best practices relative to the use and regulation of cannabis.
3460	3460	New Sec. 41. All actions taken by the director under this act shall be
3461	3461	in accordance with the Kansas administrative procedure act and
3462	3462	reviewable in accordance with the Kansas judicial review act.
3463	3463	New Sec. 42. The provisions of the adult use cannabis regulation act
3464	3464	are hereby declared to be severable. If any part or provision of the adult
3465	3465	use cannabis regulation act is held to be void, invalid or unconstitutional,
3466	3466	such part or provision shall not affect or impair any of the remaining parts
3467	3467	or provisions of the adult use cannabis regulation act, and any such
3468	3468	remaining provisions shall continue in full force and effect.
3469	3469	New Sec. 43. The provisions of the adult use cannabis regulation act,
3470	3470	sections 1 through 43, and amendments thereto, shall expire on July 1,
3471	3471	2033.
3472	3472	New Sec. 44. (a) For the purpose of providing revenue that may be
3473	3473	used by the state in the enforcement of the provisions of the adult use
3474	3474	cannabis regulation act, there is hereby levied a tax for the privilege of
3475	3475	engaging in the business of cultivating cannabis at a licensed cannabis
3476	3476	cultivation facility. Such tax shall be collected and paid at the rate of 15%
3477	3477	of the average market rate for cannabis produced by a cannabis cultivation
3478	3478	facility on the gross receipts from the sale of cannabis by a cannabis
3479	3479	cultivation facility. Each cannabis cultivation facility shall be responsible
3480	3480	for paying the tax imposed under this section to the state department of
3481	3481	revenue in the manner prescribed by section 46, and amendments thereto,
3482	3482	and the department of revenue shall administer and enforce the collection
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3526	3526	of such tax.
3527	3527	(b) The tax imposed by this section shall be in addition to the license
3528	3528	fee imposed on cannabis cultivation facilities by section 32, and
3529	3529	amendments thereto.
3530	3530	(c) As used in this section, "cannabis cultivation facility" means the
3531	3531	same as defined in section 2, and amendments thereto.
3532	3532	New Sec. 45. (a) There is hereby levied a tax at the rate of 15% on
3533	3533	the gross receipts from the sale of cannabis and cannabis products by any
3534	3534	licensed cannabis retailer or licensed hospitality and sales business.
3535	3535	(b) The tax imposed by this section shall be paid by the consumer to
3536	3536	the licensed cannabis retailer or licensed hospitality and sales business. It
3537	3537	shall be the duty of each licensee subject to this section to collect from the
3538	3538	consumer the full amount of such tax, or an amount equal as nearly as
3539	3539	possible or practicable to the average equivalent thereto. Each cannabis
3540	3540	retailer and hospitality and sales business collecting the tax imposed
3541	3541	hereunder shall be responsible for paying over the same to the department
3542	3542	of revenue in the manner prescribed by section 46, and amendments
3543	3543	thereto, and the department of revenue shall administer and enforce the
3544	3544	collection of such tax.
3545	3545	(c) As used in this section, "cannabis retailer" and "hospitality and
3546	3546	sales business" mean the same as defined in section 2, and amendments
3547	3547	thereto.
3548	3548	New Sec. 46. (a) The taxes levied and collected pursuant to sections
3549	3549	44 and 45, and amendments thereto, shall become due and payable
3550	3550	monthly, or on or before the 25
3551	3551	th
3552	3552	day of the month immediately succeeding
3553	3553	the month in which such tax is collected, except that any cannabis business
3554	3554	filing an annual or quarterly return under the Kansas retailers' sales tax act,
3555	3555	as prescribed in K.S.A. 79-3607, and amendments thereto, shall, upon
3556	3556	such conditions as the secretary of revenue may prescribe, pay the tax
3557	3557	required by this act on the same basis and at the same time the cannabis
3558	3558	business pays such retailers' sales tax. Each cannabis business shall make a
3559	3559	true report to the department of revenue, on a form prescribed by the
3560	3560	secretary of revenue, providing such information as may be necessary to
3561	3561	determine the amounts to which any such tax shall apply for all gross
3562	3562	receipts derived from the sale of cannabis and cannabis products for the
3563	3563	applicable month or months, which report shall be accompanied by the tax
3564	3564	disclosed thereby. Records of gross receipts derived from the sale of
3565	3565	cannabis and cannabis products shall be kept separate and apart from the
3566	3566	records of other retail sales made by a cannabis business in order to
3567	3567	facilitate the examination of books and records.
3568	3568	(b) The secretary of revenue or the secretary's authorized
3569	3569	representative shall have the right at all reasonable times during business
3570	3570	hours to make such examination and inspection of the books and records
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3614	3614	of a cannabis business as may be necessary to determine the accuracy of
3615	3615	such reports required by this section.
3616	3616	(c) The secretary of revenue is hereby authorized to administer and
3617	3617	collect the tax imposed under sections 44 and 45, and amendments thereto,
3618	3618	and to adopt such rules and regulations as may be necessary for the
3619	3619	efficient and effective administration and enforcement of the collection
3620	3620	thereof. Whenever any cannabis business liable to pay the tax imposed by
3621	3621	sections 44 and 45, and amendments thereto, refuses or neglects to pay the
3622	3622	same, the amount, including any penalty, shall be collected in the manner
3623	3623	prescribed for the collection of the retailers' sales tax by K.S.A. 79-3617,
3624	3624	and amendments thereto.
3625	3625	(d) The secretary of revenue shall remit all revenue collected under
3626	3626	the provisions of this act to the state treasurer in accordance with the
3627	3627	provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of
3628	3628	each such remittance, the state treasurer shall deposit the entire amount in
3629	3629	the state treasury to the credit of the state general fund.
3630	3630	(e) Whenever, in the judgment of the secretary of revenue, it is
3631	3631	necessary, in order to secure the collection of any tax, penalties or interest
3632	3632	due, or to become due, under the provisions of this act, the secretary may
3633	3633	require any person subject to such tax to file a bond with the director of
3634	3634	taxation under conditions established by and in such form and amount as
3635	3635	prescribed by rules and regulations adopted by the secretary.
3636	3636	(f) The amount of tax imposed by this act shall be assessed within
3637	3637	three years after the return is filed, and no proceedings in court for the
3638	3638	collection of such taxes shall be initiated after the expiration of such
3639	3639	period except in the cases of fraud. In the case of a false or fraudulent
3640	3640	return with intent to evade tax, the tax may be assessed or a proceeding in
3641	3641	court for collection of such tax may be initiated at any time, within two
3642	3642	years from the discovery of such fraud. No refund or credit shall be
3643	3643	allowed by the director after three years from the date of payment of the
3644	3644	tax as provided in this act unless before the expiration of such period a
3645	3645	claim therefor is filed by the taxpayer. No suit or action to recover on any
3646	3646	claim for refund shall be commenced until after the expiration of six
3647	3647	months from the date of filing a claim therefor with the director. Before
3648	3648	the expiration of time prescribed in this section for the assessment of
3649	3649	additional tax or the filing of a claim for refund, the director is hereby
3650	3650	authorized to enter into an agreement in writing with the taxpayer
3651	3651	consenting to the extension of the periods of limitations for the assessment
3652	3652	of tax or for the filing of a claim for refund, at any time prior to the
3653	3653	expiration of the periods of limitations. The period so agreed upon may be
3654	3654	extended by subsequent agreements in writing made before the expiration
3655	3655	of the period previously agreed upon.
3656	3656	New Sec. 47. (a) On or before the 25
3657	3657	th
3658	3658	day of each calendar month,
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3702	3702	every cannabis business subject to the provisions of this act shall make a
3703	3703	return to the director of taxation upon forms prescribed and furnished by
3704	3704	the director, stating:
3705	3705	(1) The name and address of the cannabis business;
3706	3706	(2) the total amount of gross sales subject to the tax imposed by
3707	3707	section 44 or 45, and amendments thereto, during the preceding calendar
3708	3708	month; and
3709	3709	(3) any other pertinent information the director requires.
3710	3710	(b) At the time of making the return, the person making the return
3711	3711	shall pay to the director of taxation the amount of tax levied by section 44
3712	3712	or 45, and amendments thereto, as applicable to the person submitting the
3713	3713	return. The director of taxation may extend the time for submitting returns
3714	3714	and paying the tax for any period not to exceed 60 days, under rules and
3715	3715	regulations adopted by the secretary of revenue.
3716	3716	New Sec. 48. (a) If any taxpayer fails to pay the tax levied by section
3717	3717	44 or 45, and amendments thereto, at the time required by or under the
3718	3718	provisions of section 46, and amendments thereto, there shall be added to
3719	3719	the unpaid balance of the tax, interest at the rate per month prescribed by
3720	3720	K.S.A. 79-2968(a), and amendments thereto, from the date the tax was due
3721	3721	until paid.
3722	3722	(b) If any taxpayer due to negligence or intentional disregard fails to
3723	3723	file a return or pay the tax due at the time required by or under the
3724	3724	provisions of section 46, and amendments thereto, there shall be added to
3725	3725	the tax a penalty in an amount equal to 10% of the unpaid balance of tax
3726	3726	due.
3727	3727	(c) If any person fails to make a return, or to pay any tax, within six
3728	3728	months from the date the return or tax was due, except in the case of an
3729	3729	extension of time granted by the secretary of revenue or the secretary's
3730	3730	designee, there shall be added to the tax due a penalty equal to 25% of the
3731	3731	unpaid balance of such tax due.
3732	3732	(d) If any taxpayer fails to file a return or pay the tax that is due at the
3733	3733	time required by or under the provisions of this act, there shall be added to
3734	3734	the tax an additional amount equal to 1% of the unpaid balance of the tax
3735	3735	due for each month or fraction thereof during which such failure
3736	3736	continues, not exceeding 24% in the aggregate, plus interest at the rate
3737	3737	prescribed by K.S.A. 79-2968(a), and amendments thereto, from the date
3738	3738	the tax was due until paid. Notwithstanding the foregoing, in the event an
3739	3739	assessment is issued following a field audit for any period for which a
3740	3740	return was filed by the taxpayer and all of the tax was paid pursuant to
3741	3741	such return, a penalty shall be imposed for the period included in the
3742	3742	assessment in an amount of 1% per month not exceeding 10% of the
3743	3743	unpaid balance of tax due shown in the notice of assessment. If, after
3744	3744	review of a return for any period included in the assessment, the secretary
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3787	3787	43 HB 2367 45
3788	3788	or secretary's designee determines that the underpayment of tax was due to
3789	3789	the failure of the taxpayer to make a reasonable attempt to comply with the
3790	3790	provisions of this act, such penalty shall be imposed for the period
3791	3791	included in the assessment in the amount of 25% of the unpaid balance of
3792	3792	tax due.
3793	3793	(e) If any taxpayer, with fraudulent intent, fails to pay any tax or
3794	3794	make, render or sign any return, or to supply any information, within the
3795	3795	time required by or under the provisions of section 46, and amendments
3796	3796	thereto, there shall be added to the tax a penalty in an amount equal to
3797	3797	50% of the unpaid balance of tax due.
3798	3798	(f) Penalty or interest applied under the provisions of subsections (a)
3799	3799	and (d) shall be in addition to the penalty added under any other provisions
3800	3800	of this section, but the provisions of subsections (b) and (c) shall be
3801	3801	mutually exclusive of each other.
3802	3802	(g) Whenever the secretary of revenue or the secretary's designee
3803	3803	determines that the failure of the taxpayer to comply with the provisions of
3804	3804	subsections (b) and (c) was due to reasonable causes, the secretary or the
3805	3805	secretary's designee may waive or reduce any of the penalties and may
3806	3806	reduce the interest rate to the underpayment rate prescribed and
3807	3807	determined for the applicable period under section 6621 of the federal
3808	3808	internal revenue code as in effect on January 1, 2023, upon making a
3809	3809	record of the reasons therefor.
3810	3810	(h) In addition to all other penalties provided by this section, any
3811	3811	person who willfully fails to make a return or to pay any tax levied by
3812	3812	section 44 or 45, and amendments thereto, who makes a false or fraudulent
3813	3813	return, fails to keep any books or records necessary to determine the
3814	3814	accuracy of the person's reports, who willfully violates any regulations of
3815	3815	the secretary of revenue, for the enforcement and administration of the
3816	3816	provisions of this act, who aids and abets another in attempting to evade
3817	3817	the payment of any tax levied by section 44 or 45, and amendments
3818	3818	thereto, or who violates any other provision of this act shall, upon
3819	3819	conviction thereof, be fined not less than $100 nor more than $1,000, be
3820	3820	imprisoned in the county jail not less than one month nor more than six
3821	3821	months, or be both so fined and imprisoned, in the discretion of the court.
3822	3822	(i) The director of taxation or the director of alcoholic beverage
3823	3823	control may enjoin any person from engaging in business as a cannabis
3824	3824	business when the cannabis business is in violation of any of the
3825	3825	provisions of this act and shall be entitled in any proceeding brought for
3826	3826	that purpose to have an order restraining the person from engaging in
3827	3827	business as a cannabis business. No bond shall be required for any such
3828	3828	restraining order or for any temporary or permanent injunction issued in
3829	3829	that proceeding.
3830	3830	(j) If a cannabis business violates any of the provisions of this act, the
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3873	3873	43 HB 2367 46
3874	3874	director of alcoholic beverage control may suspend or revoke the license
3875	3875	of such cannabis business or may impose a civil fine on the licensee or
3876	3876	permit holder in accordance with section 18, and amendments thereto.
3877	3877	(k) The provisions of K.S.A. 75-5133, 79-3605, 79-3609, 79-3610,
3878	3878	79-3611, 79-3612, 79-3613, 79-3615, 79-3617 and 79-3619, and
3879	3879	amendments thereto, relating to enforcement, collection and
3880	3880	administration, insofar as practicable, shall have full force and effect with
3881	3881	respect to taxes levied by sections 44 or 45, and amendments thereto. As
3882	3882	used in such statutes and applied to this act, "director" means the director
3883	3883	of taxation. The provisions of K.S.A. 74-2422, 74-2425, 74-2426 and 74-
3884	3884	2427, and amendments thereto, relating to the approval of rules and
3885	3885	regulations, and the adoption of uniform rules and regulations for such
3886	3886	hearings and for appeals from orders of the director of taxation and
3887	3887	prescribing the duties of county attorneys with respect to such appeals,
3888	3888	insofar as practicable, shall have full force and effect with respect to taxes
3889	3889	levied by, and proceedings under, the provisions of this act.
3890	3890	New Sec. 49. Whenever the director of alcoholic beverage control
3891	3891	issues a cannabis cultivation facility license or cannabis retailer license,
3892	3892	the director of alcoholic beverage control shall promptly notify the director
3893	3893	of taxation of such issuance. The notice shall include the name of the
3894	3894	licensee and the address of the licensed premises. Whenever the director of
3895	3895	alcoholic beverage control revokes or suspends any such license or
3896	3896	whenever any such license expires, the director of alcoholic beverage
3897	3897	control shall likewise notify the director of taxation.
3898	3898	New Sec. 50. The director of taxation shall administer the provisions
3899	3899	of sections 44 through 50, and amendments thereto. The secretary of
3900	3900	revenue shall adopt rules and regulations necessary to carry out the
3901	3901	provisions and intent of sections 44 through 50, and amendments thereto.
3902	3902	The director of taxation shall appoint such agents and employees as the
3903	3903	secretary may deem necessary for the proper enforcement and
3904	3904	administration of such sections. When, in the judgment of the director of
3905	3905	taxation, it is necessary in order to secure the collection of any such tax,
3906	3906	penalties or interest due thereon, or to become due under such sections, the
3907	3907	director may require any person subject to such tax to file a bond with the
3908	3908	director in such form and amount as the director may prescribe.
3909	3909	Sec. 51. K.S.A. 2022 Supp. 21-5703 is hereby amended to read as
3910	3910	follows: 21-5703. (a) It shall be unlawful for any person to manufacture
3911	3911	any controlled substance or controlled substance analog.
3912	3912	(b) Violation or attempted violation of subsection (a) is a:
3913	3913	(1) Drug severity level 2 felony, except as provided in subsections (b)
3914	3914	(2) and (b)(3);
3915	3915	(2) drug severity level 1 felony if:
3916	3916	(A) The controlled substance is not methamphetamine, as defined by
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3960	3960	subsection (d)(3) or (f)(1) of K.S.A. 65-4107(d)(3) or (f)(1), and
3961	3961	amendments thereto, or an analog thereof; and
3962	3962	(B) the offender has a prior conviction for unlawful manufacturing of
3963	3963	a controlled substance under this section, K.S.A. 65-4159, prior to its
3964	3964	repeal, K.S.A. 2010 Supp. 21-36a03, prior to its transfer, or a substantially
3965	3965	similar offense from another jurisdiction and the substance was not
3966	3966	methamphetamine, as defined by subsection (d)(3) or (f)(1) of K.S.A. 65-
3967	3967	4107(d)(3) or (f)(1), and amendments thereto, or an analog thereof, in any
3968	3968	such prior conviction; and
3969	3969	(3) drug severity level 1 felony if the controlled substance is
3970	3970	methamphetamine, as defined by subsection (d)(3) or (f)(1) of K.S.A. 65-
3971	3971	4107(d)(3) or (f)(1), and amendments thereto, or an analog thereof.
3972	3972	(c) The provisions of subsection (d) of K.S.A. 2022 Supp. 21-
3973	3973	5301(d), and amendments thereto, shall not apply to a violation of
3974	3974	attempting to unlawfully manufacture any controlled substance or
3975	3975	controlled substance analog pursuant to this section.
3976	3976	(d) For persons arrested and charged under this section, bail shall be
3977	3977	at least $50,000 cash or surety, and such person shall not be released upon
3978	3978	the person's own recognizance pursuant to K.S.A. 22-2802, and
3979	3979	amendments thereto, unless the court determines, on the record, that the
3980	3980	defendant is not likely to re-offend, the court imposes pretrial supervision,
3981	3981	or the defendant agrees to participate in a licensed or certified drug
3982	3982	treatment program.
3983	3983	(e) The sentence of a person who violates this section shall not be
3984	3984	subject to statutory provisions for suspended sentence, community service
3985	3985	work or probation.
3986	3986	(f) The sentence of a person who violates this section, K.S.A. 65-
3987	3987	4159, prior to its repeal or K.S.A. 2010 Supp. 21-36a03, prior to its
3988	3988	transfer, shall not be reduced because these sections prohibit conduct
3989	3989	identical to that prohibited by K.S.A. 65-4161 or 65-4163, prior to their
3990	3990	repeal, K.S.A. 2010 Supp. 21-36a05, prior to its transfer, or K.S.A. 2022
3991	3991	Supp. 21-5705, and amendments thereto.
3992	3992	(g) The provisions of this section shall not apply to a cannabis
3993	3993	cultivation facility or cannabis products manufacturer licensed pursuant
3994	3994	to the adult use cannabis regulation act, section 1 et seq., and amendments
3995	3995	thereto, that is producing cannabis, as defined in section 2, and
3996	3996	amendments thereto, when used for acts authorized by the adult use
3997	3997	cannabis regulation act, section 1 et seq., and amendments thereto.
3998	3998	Sec. 52. K.S.A. 2022 Supp. 21-5705 is hereby amended to read as
3999	3999	follows: 21-5705. (a) It shall be unlawful for any person to distribute or
4000	4000	possess with the intent to distribute any of the following controlled
4001	4001	substances or controlled substance analogs thereof:
4002	4002	(1) Opiates, opium or narcotic drugs, or any stimulant designated in
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4043	4043	41
4044	4044	42
4045	4045	43 HB 2367 48
4046	4046	subsection (d)(1), (d)(3) or (f)(1) of K.S.A. 65-4107(d)(1), (d)(3) or (f)(1),
4047	4047	and amendments thereto;
4048	4048	(2) any depressant designated in subsection (e) of K.S.A. 65-4105(e),
4049	4049	subsection (e) of K.S.A. 65-4107(e), subsection (b) or (c) of K.S.A. 65-
4050	4050	4109(b) or (c) or subsection (b) of K.S.A. 65-4111(b), and amendments
4051	4051	thereto;
4052	4052	(3) any stimulant designated in subsection (f) of K.S.A. 65-4105(f),
4053	4053	subsection (d)(2), (d)(4), (d)(5) or (f)(2) of K.S.A. 65-4107(d)(2), (d)(4),
4054	4054	(d)(5) or (f)(2) or subsection (e) of K.S.A. 65-4109(e), and amendments
4055	4055	thereto;
4056	4056	(4) any hallucinogenic drug designated in subsection (d) of K.S.A.
4057	4057	65-4105(d), subsection (g) of K.S.A. 65-4107(g) or subsection (g) of
4058	4058	K.S.A. 65-4109(g), and amendments thereto;
4059	4059	(5) any substance designated in subsection (g) of K.S.A. 65-4105(g)
4060	4060	and subsection (c), (d), (e), (f) or (g) of K.S.A. 65-4111(c), (d), (e), (f) or
4061	4061	(g), and amendments thereto;
4062	4062	(6) any anabolic steroids as defined in subsection (f) of K.S.A. 65-
4063	4063	4109(f), and amendments thereto; or
4064	4064	(7) any substance designated in subsection (h) of K.S.A. 65-4105(h),
4065	4065	and amendments thereto.
4066	4066	(b) It shall be unlawful for any person to distribute or possess with
4067	4067	the intent to distribute a controlled substance or a controlled substance
4068	4068	analog designated in K.S.A. 65-4113, and amendments thereto.
4069	4069	(c) It shall be unlawful for any person to cultivate any controlled
4070	4070	substance or controlled substance analog listed in subsection (a).
4071	4071	(d) (1) Except as provided further, violation of subsection (a) is a:
4072	4072	(A) Drug severity level 4 felony if the quantity of the material was
4073	4073	less than 3.5 grams;
4074	4074	(B) drug severity level 3 felony if the quantity of the material was at
4075	4075	least 3.5 grams but less than 100 grams;
4076	4076	(C) drug severity level 2 felony if the quantity of the material was at
4077	4077	least 100 grams but less than 1 kilogram; and
4078	4078	(D) drug severity level 1 felony if the quantity of the material was 1
4079	4079	kilogram or more.
4080	4080	(2) Violation of subsection (a) with respect to material containing any
4081	4081	quantity of marijuana, or an analog thereof, is a:
4082	4082	(A) Drug severity level 4 felony if the quantity of the material was
4083	4083	less than 25 grams;
4084	4084	(B) drug severity level 3 felony if the quantity of the material was at
4085	4085	least 25 grams but less than 450 grams;
4086	4086	(C) drug severity level 2 felony if the quantity of the material was at
4087	4087	least 450 grams but less than 30 kilograms; and
4088	4088	(D) drug severity level 1 felony if the quantity of the material was 30
4089	4089	1
4090	4090	2
4091	4091	3
4092	4092	4
4093	4093	5
4094	4094	6
4095	4095	7
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4109	4109	21
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4111	4111	23
4112	4112	24
4113	4113	25
4114	4114	26
4115	4115	27
4116	4116	28
4117	4117	29
4118	4118	30
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4120	4120	32
4121	4121	33
4122	4122	34
4123	4123	35
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4125	4125	37
4126	4126	38
4127	4127	39
4128	4128	40
4129	4129	41
4130	4130	42
4131	4131	43 HB 2367 49
4132	4132	kilograms or more.
4133	4133	(3) Violation of subsection (a) with respect to material containing any
4134	4134	quantity of heroin, as defined by subsection (c)(1) of K.S.A. 65-4105(c)
4135	4135	(1), and amendments thereto, or methamphetamine, as defined by
4136	4136	subsection (d)(3) or (f)(1) of K.S.A. 65-4107(d)(3) or (f)(1), and
4137	4137	amendments thereto, or an analog thereof, is a:
4138	4138	(A) Drug severity level 4 felony if the quantity of the material was
4139	4139	less than 1 gram;
4140	4140	(B) drug severity level 3 felony if the quantity of the material was at
4141	4141	least 1 gram but less than 3.5 grams;
4142	4142	(C) drug severity level 2 felony if the quantity of the material was at
4143	4143	least 3.5 grams but less than 100 grams; and
4144	4144	(D) drug severity level 1 felony if the quantity of the material was
4145	4145	100 grams or more.
4146	4146	(4) Violation of subsection (a) with respect to material containing any
4147	4147	quantity of a controlled substance designated in K.S.A. 65-4105, 65-4107,
4148	4148	65-4109 or 65-4111, and amendments thereto, or an analog thereof,
4149	4149	distributed by dosage unit, is a:
4150	4150	(A) Drug severity level 4 felony if the number of dosage units was
4151	4151	fewer than 10;
4152	4152	(B) drug severity level 3 felony if the number of dosage units was at
4153	4153	least 10 but less than 100;
4154	4154	(C) drug severity level 2 felony if the number of dosage units was at
4155	4155	least 100 but less than 1,000; and
4156	4156	(D) drug severity level 1 felony if the number of dosage units was
4157	4157	1,000 or more.
4158	4158	(5) For any violation of subsection (a), the severity level of the
4159	4159	offense shall be increased one level if the controlled substance or
4160	4160	controlled substance analog was distributed or possessed with the intent to
4161	4161	distribute on or within 1,000 feet of any school property.
4162	4162	(6) Violation of subsection (b) is a:
4163	4163	(A) Class A person misdemeanor, except as provided in subsection
4164	4164	(d)(6)(B) subparagraph (B); and
4165	4165	(B) nondrug severity level 7, person felony if the substance was
4166	4166	distributed to or possessed with the intent to distribute to a minor.
4167	4167	(7) Violation of subsection (c) is a:
4168	4168	(A) Drug severity level 3 felony if the number of plants cultivated
4169	4169	was more than 4 but fewer than 50;
4170	4170	(B) drug severity level 2 felony if the number of plants cultivated was
4171	4171	at least 50 but fewer than 100; and
4172	4172	(C) drug severity level 1 felony if the number of plants cultivated was
4173	4173	100 or more.
4174	4174	(e) In any prosecution under this section, there shall be a rebuttable
4175	4175	1
4176	4176	2
4177	4177	3
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4179	4179	5
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4209	4209	35
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4211	4211	37
4212	4212	38
4213	4213	39
4214	4214	40
4215	4215	41
4216	4216	42
4217	4217	43 HB 2367 50
4218	4218	presumption of an intent to distribute if any person possesses the following
4219	4219	quantities of controlled substances or analogs thereof:
4220	4220	(1) 450 grams or more of marijuana;
4221	4221	(2) 3.5 grams or more of heroin or methamphetamine;
4222	4222	(3) 100 dosage units or more containing a controlled substance; or
4223	4223	(4) 100 grams or more of any other controlled substance.
4224	4224	(f) It shall not be a defense to charges arising under this section that
4225	4225	the defendant:
4226	4226	(1) Was acting in an agency relationship on behalf of any other party
4227	4227	in a transaction involving a controlled substance or controlled substance
4228	4228	analog;
4229	4229	(2) did not know the quantity of the controlled substance or
4230	4230	controlled substance analog; or
4231	4231	(3) did not know the specific controlled substance or controlled
4232	4232	substance analog contained in the material that was distributed or
4233	4233	possessed with the intent to distribute.
4234	4234	(g) The provisions of subsections (a)(4) and (a)(5) shall not apply to:
4235	4235	(1) Any cannabis cultivation facility licensed pursuant to the adult
4236	4236	use cannabis regulation act, section 1 et seq., and amendments thereto, or
4237	4237	any employee or agent thereof, that is growing cannabis for the purpose of
4238	4238	sale as authorized by the adult use cannabis regulation act, section 1 et
4239	4239	seq., and amendments thereto;
4240	4240	(2) any cannabis products manufacturer licensed pursuant to the
4241	4241	adult use cannabis regulation act, section 1 et seq., and amendments
4242	4242	thereto, or any employee or agent thereof, that is manufacturing cannabis
4243	4243	or cannabis products for the purpose of sale or distribution as authorized
4244	4244	by the adult use cannabis regulation act, section 1 et seq., and
4245	4245	amendments thereto;
4246	4246	(3) any cannabis transporter licensed pursuant to the adult use
4247	4247	cannabis regulation act, section 1 et seq., and amendments thereto, or any
4248	4248	employee or agent thereof, that is storing or transporting cannabis as
4249	4249	authorized by the adult use cannabis regulation act, section 1 et seq., and
4250	4250	amendments thereto; or
4251	4251	(4) any hospitality and sales business or cannabis retailer licensed
4252	4252	pursuant to the adult use cannabis regulation act, section 1 et seq., and
4253	4253	amendments thereto, or any employee or agent thereof, that is engaging in
4254	4254	the sale of cannabis and cannabis products in a manner authorized by the
4255	4255	adult use cannabis regulation act, section 1 et seq., and amendments
4256	4256	thereto.
4257	4257	(h) As used in this section:
4258	4258	(1) "Material" means the total amount of any substance, including a
4259	4259	compound or a mixture, which that contains any quantity of a controlled
4260	4260	substance or controlled substance analog.
4261	4261	1
4262	4262	2
4263	4263	3
4264	4264	4
4265	4265	5
4266	4266	6
4267	4267	7
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4297	4297	37
4298	4298	38
4299	4299	39
4300	4300	40
4301	4301	41
4302	4302	42
4303	4303	43 HB 2367 51
4304	4304	(2) "Dosage unit" means a controlled substance or controlled
4305	4305	substance analog distributed or possessed with the intent to distribute as a
4306	4306	discrete unit, including but not limited to, one pill, one capsule or one
4307	4307	microdot, and not distributed by weight.
4308	4308	(A) For steroids, or controlled substances in liquid solution legally
4309	4309	manufactured for prescription use, or an analog thereof, "dosage unit"
4310	4310	means the smallest medically approved dosage unit, as determined by the
4311	4311	label, materials provided by the manufacturer, a prescribing authority,
4312	4312	licensed health care professional or other qualified health authority.
4313	4313	(B) For illegally manufactured controlled substances in liquid
4314	4314	solution, or controlled substances in liquid products not intended for
4315	4315	ingestion by human beings, or an analog thereof, "dosage unit" means 10
4316	4316	milligrams, including the liquid carrier medium, except as provided in
4317	4317	subsection (g)(2)(C) subparagraph (C).
4318	4318	(C) For lysergic acid diethylamide (LSD) in liquid form, or an analog
4319	4319	thereof, a dosage unit is defined as 0.4 milligrams, including the liquid
4320	4320	medium.
4321	4321	(3) "Cannabis" means the same as defined in section 2, and
4322	4322	amendments thereto.
4323	4323	Sec. 53. K.S.A. 2022 Supp. 21-5706 is hereby amended to read as
4324	4324	follows: 21-5706. (a) It shall be unlawful for any person to possess any
4325	4325	opiates, opium or narcotic drugs, or any stimulant designated in K.S.A. 65-
4326	4326	4107(d)(1), (d)(3) or (f)(1), and amendments thereto, or a controlled
4327	4327	substance analog thereof.
4328	4328	(b) It shall be unlawful for any person to possess any of the following
4329	4329	controlled substances or controlled substance analogs thereof:
4330	4330	(1) Any depressant designated in K.S.A. 65-4105(e), 65-4107(e), 65-
4331	4331	4109(b) or (c) or 65-4111(b), and amendments thereto;
4332	4332	(2) any stimulant designated in K.S.A. 65-4105(f), 65-4107(d)(2), (d)
4333	4333	(4), (d)(5) or (f)(2) or 65-4109(e), and amendments thereto;
4334	4334	(3) any hallucinogenic drug designated in K.S.A. 65-4105(d), 65-
4335	4335	4107(g) or 65-4109(g), and amendments thereto;
4336	4336	(4) any substance designated in K.S.A. 65-4105(g) and 65-4111(c),
4337	4337	(d), (e), (f) or (g), and amendments thereto;
4338	4338	(5) any anabolic steroids as defined in K.S.A. 65-4109(f), and
4339	4339	amendments thereto;
4340	4340	(6) any substance designated in K.S.A. 65-4113, and amendments
4341	4341	thereto; or
4342	4342	(7) any substance designated in K.S.A. 65-4105(h), and amendments
4343	4343	thereto.
4344	4344	(c) (1) Violation of subsection (a) is a drug severity level 5 felony.
4345	4345	(2) Except as provided in subsection (c)(3):
4346	4346	(A) Violation of subsection (b) is a class A nonperson misdemeanor,
4347	4347	1
4348	4348	2
4349	4349	3
4350	4350	4
4351	4351	5
4352	4352	6
4353	4353	7
4354	4354	8
4355	4355	9
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4357	4357	11
4358	4358	12
4359	4359	13
4360	4360	14
4361	4361	15
4362	4362	16
4363	4363	17
4364	4364	18
4365	4365	19
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4367	4367	21
4368	4368	22
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4371	4371	25
4372	4372	26
4373	4373	27
4374	4374	28
4375	4375	29
4376	4376	30
4377	4377	31
4378	4378	32
4379	4379	33
4380	4380	34
4381	4381	35
4382	4382	36
4383	4383	37
4384	4384	38
4385	4385	39
4386	4386	40
4387	4387	41
4388	4388	42
4389	4389	43 HB 2367 52
4390	4390	except as provided in subparagraph (B); and
4391	4391	(B) violation of subsection (b)(1) through (b)(5) or (b)(7) is a drug
4392	4392	severity level 5 felony if that person has a prior conviction under such
4393	4393	subsection, under K.S.A. 65-4162, prior to its repeal, under a substantially
4394	4394	similar offense from another jurisdiction, or under any city ordinance or
4395	4395	county resolution for a substantially similar offense if the substance
4396	4396	involved was 3, 4-methylenedioxymethamphetamine (MDMA), marijuana
4397	4397	as designated in K.S.A. 65-4105(d), and amendments thereto, or any
4398	4398	substance designated in K.S.A. 65-4105(h), and amendments thereto, or an
4399	4399	analog thereof.
4400	4400	(3) If the substance involved is marijuana, as designated in K.S.A.
4401	4401	65-4105(d), and amendments thereto, or tetrahydrocannabinols, as
4402	4402	designated in K.S.A. 65-4105(h), and amendments thereto, violation of
4403	4403	subsection (b) is a:
4404	4404	(A) Class B nonperson misdemeanor, except as provided in
4405	4405	subparagraphs (B) and, (C) and (D);
4406	4406	(B) class A nonperson misdemeanor if that person has a prior
4407	4407	conviction under such subsection, under K.S.A. 65-4162, prior to its
4408	4408	repeal, under a substantially similar offense from another jurisdiction, or
4409	4409	under any city ordinance or county resolution for a substantially similar
4410	4410	offense; and
4411	4411	(C) drug severity level 5 felony if that person has two or more prior
4412	4412	convictions under such subsection, under K.S.A. 65-4162, prior to its
4413	4413	repeal, under a substantially similar offense from another jurisdiction, or
4414	4414	under any city ordinance or county resolution for a substantially similar
4415	4415	offense.
4416	4416	(d) It shall be an affirmative defense to prosecution under this section
4417	4417	arising out of a person's possession of any cannabidiol treatment
4418	4418	preparation if the person:
4419	4419	(1) Has a debilitating medical condition, as defined in K.S.A. 2022
4420	4420	Supp. 65-6235, and amendments thereto, or is the parent or guardian of a
4421	4421	minor child who has such debilitating medical condition;
4422	4422	(2) is possessing a cannabidiol treatment preparation, as defined in
4423	4423	K.S.A. 2022 Supp. 65-6235, and amendments thereto, that is being used to
4424	4424	treat such debilitating medical condition; and
4425	4425	(3) has possession of a letter, at all times while the person has
4426	4426	possession of the cannabidiol treatment preparation, that:
4427	4427	(A) Shall be shown to a law enforcement officer on such officer's
4428	4428	request;
4429	4429	(B) is dated within the preceding 15 months and signed by the
4430	4430	physician licensed to practice medicine and surgery in Kansas who
4431	4431	diagnosed the debilitating medical condition;
4432	4432	(C) is on such physician's letterhead; and
4433	4433	1
4434	4434	2
4435	4435	3
4436	4436	4
4437	4437	5
4438	4438	6
4439	4439	7
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4471	4471	39
4472	4472	40
4473	4473	41
4474	4474	42
4475	4475	43 HB 2367 53
4476	4476	(D) identifies the person or the person's minor child as such
4477	4477	physician's patient and identifies the patient's debilitating medical
4478	4478	condition.
4479	4479	(e) If the substance involved is cannabis, as defined in section 2, and
4480	4480	amendments thereto, the provisions of subsections (b) and (c) shall not
4481	4481	apply to any person who is licensed pursuant to the adult use cannabis
4482	4482	regulation act, section 1 et seq., and amendments thereto, whose
4483	4483	possession is authorized by such act.
4484	4484	(f) It shall not be a defense to charges arising under this section that
4485	4485	the defendant was acting in an agency relationship on behalf of any other
4486	4486	party in a transaction involving a controlled substance or controlled
4487	4487	substance analog.
4488	4488	Sec. 54. K.S.A. 2022 Supp. 21-5707 is hereby amended to read as
4489	4489	follows: 21-5707. (a) It shall be unlawful for any person to knowingly or
4490	4490	intentionally use any communication facility:
4491	4491	(1) In committing, causing, or facilitating the commission of any
4492	4492	felony under K.S.A. 2022 Supp. 21-5703, 21-5705 or 21-5706, and
4493	4493	amendments thereto; or
4494	4494	(2) in any attempt to commit, any conspiracy to commit, or any
4495	4495	criminal solicitation of any felony under K.S.A. 2022 Supp. 21-5703, 21-
4496	4496	5705 or 21-5706, and amendments thereto. Each separate use of a
4497	4497	communication facility may be charged as a separate offense under this
4498	4498	subsection.
4499	4499	(b) Violation of subsection (a) is a nondrug severity level 8,
4500	4500	nonperson felony.
4501	4501	(c) The provisions of this section shall not apply to any person using
4502	4502	communication facilities for those activities authorized by the adult use
4503	4503	cannabis regulation act, section 1 et seq., and amendments thereto.
4504	4504	(d) As used in this section, "communication facility" means any and
4505	4505	all public and private instrumentalities used or useful in the transmission
4506	4506	of writing, signs, signals, pictures or sounds of all kinds and includes
4507	4507	telephone, wire, radio, computer, computer networks, beepers, pagers and
4508	4508	all other means of communication.
4509	4509	Sec. 55. K.S.A. 2022 Supp. 21-5709 is hereby amended to read as
4510	4510	follows: 21-5709. (a) It shall be unlawful for any person to possess
4511	4511	ephedrine, pseudoephedrine, red phosphorus, lithium metal, sodium metal,
4512	4512	iodine, anhydrous ammonia, pressurized ammonia or
4513	4513	phenylpropanolamine, or their salts, isomers or salts of isomers with an
4514	4514	intent to use the product to manufacture a controlled substance.
4515	4515	(b) It shall be unlawful for any person to use or possess with intent to
4516	4516	use any drug paraphernalia to:
4517	4517	(1) Manufacture, cultivate, plant, propagate, harvest, test, analyze or
4518	4518	distribute a controlled substance; or
4519	4519	1
4520	4520	2
4521	4521	3
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4523	4523	5
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4525	4525	7
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4561	4561	43 HB 2367 54
4562	4562	(2) store, contain, conceal, inject, ingest, inhale or otherwise
4563	4563	introduce a controlled substance into the human body.
4564	4564	(c) It shall be unlawful for any person to use or possess with intent to
4565	4565	use anhydrous ammonia or pressurized ammonia in a container not
4566	4566	approved for that chemical by the Kansas department of agriculture.
4567	4567	(d) It shall be unlawful for any person to purchase, receive or
4568	4568	otherwise acquire at retail any compound, mixture or preparation
4569	4569	containing more than 3.6 grams of pseudoephedrine base or ephedrine
4570	4570	base in any single transaction or any compound, mixture or preparation
4571	4571	containing more than nine grams of pseudoephedrine base or ephedrine
4572	4572	base within any 30-day period.
4573	4573	(e) (1) Violation of subsection (a) is a drug severity level 3 felony;
4574	4574	(2) violation of subsection (b)(1) is a:
4575	4575	(A) Drug severity level 5 felony, except as provided in subsection (e)
4576	4576	(2)(B); and
4577	4577	(B) class B nonperson misdemeanor if the drug paraphernalia was
4578	4578	used to cultivate fewer than five marijuana plants;
4579	4579	(3) violation of subsection (b)(2) is a class B nonperson
4580	4580	misdemeanor;
4581	4581	(4) violation of subsection (c) is a drug severity level 5 felony; and
4582	4582	(5) violation of subsection (d) is a class A nonperson misdemeanor.
4583	4583	(f) For persons arrested and charged under subsection (a) or (c), bail
4584	4584	shall be at least $50,000 cash or surety, and such person shall not be
4585	4585	released upon the person's own recognizance pursuant to K.S.A. 22-2802,
4586	4586	and amendments thereto, unless the court determines, on the record, that
4587	4587	the defendant is not likely to reoffend, the court imposes pretrial
4588	4588	supervision or the defendant agrees to participate in a licensed or certified
4589	4589	drug treatment program.
4590	4590	(g) The provisions of subsection (b) shall not apply to any person
4591	4591	licensed pursuant to the adult use cannabis regulation act, section 1 et
4592	4592	seq., and amendments thereto, whose possession of such equipment or
4593	4593	material is used solely to produce or for the administration of cannabis, as
4594	4594	defined in section 2, and amendments thereto, in a manner authorized by
4595	4595	the adult use cannabis regulation act, section 1 et seq., and amendments
4596	4596	thereto.
4597	4597	Sec. 56. K.S.A. 2022 Supp. 21-5710 is hereby amended to read as
4598	4598	follows: 21-5710. (a) It shall be unlawful for any person to advertise,
4599	4599	market, label, distribute or possess with the intent to distribute:
4600	4600	(1) Any product containing ephedrine, pseudoephedrine, red
4601	4601	phosphorus, lithium metal, sodium metal, iodine, anhydrous ammonia,
4602	4602	pressurized ammonia or phenylpropanolamine or their salts, isomers or
4603	4603	salts of isomers if the person knows or reasonably should know that the
4604	4604	purchaser will use the product to manufacture a controlled substance or
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4647	4647	43 HB 2367 55
4648	4648	controlled substance analog; or
4649	4649	(2) any product containing ephedrine, pseudoephedrine or
4650	4650	phenylpropanolamine, or their salts, isomers or salts of isomers for
4651	4651	indication of stimulation, mental alertness, weight loss, appetite control,
4652	4652	energy or other indications not approved pursuant to the pertinent federal
4653	4653	over-the-counter drug final monograph or tentative final monograph or
4654	4654	approved new drug application.
4655	4655	(b) It shall be unlawful for any person to distribute, possess with the
4656	4656	intent to distribute or manufacture with intent to distribute any drug
4657	4657	paraphernalia, knowing or under circumstances where one reasonably
4658	4658	should know that it will be used to manufacture or distribute a controlled
4659	4659	substance or controlled substance analog in violation of K.S.A. 2022 Supp.
4660	4660	21-5701 through 21-5717, and amendments thereto.
4661	4661	(c) It shall be unlawful for any person to distribute, possess with
4662	4662	intent to distribute or manufacture with intent to distribute any drug
4663	4663	paraphernalia, knowing or under circumstances where one reasonably
4664	4664	should know, that it will be used as such in violation of K.S.A. 2022 Supp.
4665	4665	21-5701 through 21-5717, and amendments thereto, except subsection (b)
4666	4666	of K.S.A. 2022 Supp. 21-5706(b), and amendments thereto.
4667	4667	(d) It shall be unlawful for any person to distribute, possess with
4668	4668	intent to distribute or manufacture with intent to distribute any drug
4669	4669	paraphernalia, knowing, or under circumstances where one reasonably
4670	4670	should know, that it will be used as such in violation of subsection (b) of
4671	4671	K.S.A. 2022 Supp. 21-5706(b), and amendments thereto.
4672	4672	(e) (1) Violation of subsection (a) is a drug severity level 3 felony;
4673	4673	(2) violation of subsection (b) is a:
4674	4674	(A) Drug severity level 5 felony, except as provided in subsection (e)
4675	4675	(2)(B); and
4676	4676	(B) drug severity level 4 felony if the trier of fact makes a finding that
4677	4677	the offender distributed or caused drug paraphernalia to be distributed to a
4678	4678	minor or on or within 1,000 feet of any school property;
4679	4679	(3) violation of subsection (c) is a:
4680	4680	(A) Nondrug severity level 9, nonperson felony, except as provided in
4681	4681	subsection (e)(3)(B); and
4682	4682	(B) drug severity level 5 felony if the trier of fact makes a finding that
4683	4683	the offender distributed or caused drug paraphernalia to be distributed to a
4684	4684	minor or on or within 1,000 feet of any school property; and
4685	4685	(4) violation of subsection (d) is a:
4686	4686	(A) Class A nonperson misdemeanor, except as provided in
4687	4687	subsection (e)(4)(B); and
4688	4688	(B) nondrug severity level 9, nonperson felony if the trier of fact
4689	4689	makes a finding that the offender distributed or caused drug paraphernalia
4690	4690	to be distributed to a minor or on or within 1,000 feet of any school
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4734	4734	property.
4735	4735	(f) For persons arrested and charged under subsection (a), bail shall
4736	4736	be at least $50,000 cash or surety, and such person shall not be released
4737	4737	upon the person's own recognizance pursuant to K.S.A. 22-2802, and
4738	4738	amendments thereto, unless the court determines, on the record, that the
4739	4739	defendant is not likely to re-offend, the court imposes pretrial supervision
4740	4740	or the defendant agrees to participate in a licensed or certified drug
4741	4741	treatment program.
4742	4742	(g) The provisions of subsection (c) shall not apply to any person
4743	4743	licensed pursuant to the adult use cannabis regulation act, section 1 et
4744	4744	seq., and amendments thereto, whose distribution or manufacture is used
4745	4745	solely to distribute or produce cannabis, as defined in section 2, and
4746	4746	amendments thereto, in a manner authorized by the adult use cannabis
4747	4747	regulation act, section 1 et seq., and amendments thereto.
4748	4748	(h) As used in this section, "or under circumstances where one
4749	4749	reasonably should know" that an item will be used in violation of this
4750	4750	section, shall include, but not be limited to, the following:
4751	4751	(1) Actual knowledge from prior experience or statements by
4752	4752	customers;
4753	4753	(2) inappropriate or impractical design for alleged legitimate use;
4754	4754	(3) receipt of packaging material, advertising information or other
4755	4755	manufacturer supplied information regarding the item's use as drug
4756	4756	paraphernalia; or
4757	4757	(4) receipt of a written warning from a law enforcement or
4758	4758	prosecutorial agency having jurisdiction that the item has been previously
4759	4759	determined to have been designed specifically for use as drug
4760	4760	paraphernalia.
4761	4761	Sec. 57. K.S.A. 79-5201 is hereby amended to read as follows: 79-
4762	4762	5201. As used in this act article 52 of chapter 79 of the Kansas Statutes
4763	4763	Annotated, and amendments thereto:
4764	4764	(a) "Marijuana" means any marijuana, whether real or counterfeit, as
4765	4765	defined by K.S.A. 2022 Supp. 21-5701, and amendments thereto, which is
4766	4766	held, possessed, transported, transferred, sold or offered to be sold in
4767	4767	violation of the laws of Kansas;
4768	4768	(b) "Controlled substance" means any drug or substance, whether real
4769	4769	or counterfeit, as defined by K.S.A. 2022 Supp. 21-5701, and amendments
4770	4770	thereto, which that is held, possessed, transported, transferred, sold or
4771	4771	offered to be sold in violation of the laws of Kansas. Such term shall not
4772	4772	include marijuana;
4773	4773	(c)(b) "dealer" means any person who, in violation of Kansas law,
4774	4774	manufactures, produces, ships, transports or imports into Kansas or in any
4775	4775	manner acquires or possesses more than 28 grams of marijuana, or more
4776	4776	than one gram of any controlled substance, or 10 or more dosage units of
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4819	4819	43 HB 2367 57
4820	4820	any controlled substance which that is not sold by weight;
4821	4821	(d)(c) "domestic marijuana plant" means any cannabis plant at any
4822	4822	level of growth which that is harvested or tended, manicured, irrigated,
4823	4823	fertilized or where there is other evidence that it has been treated in any
4824	4824	other way in an effort to enhance growth;
4825	4825	(d) "marijuana" means any marijuana, whether real or counterfeit,
4826	4826	as defined in K.S.A. 2022 Supp. 21-5701, and amendments thereto, that is
4827	4827	held, possessed, transported, transferred, sold or offered for sale in
4828	4828	violation of the laws of Kansas; and
4829	4829	(e) "cannabis" means the same as defined in section 2, and
4830	4830	amendments thereto.
4831	4831	Sec. 58. K.S.A. 79-5210 is hereby amended to read as follows: 79-
4832	4832	5210. Nothing in this act requires persons registered under article 16 of
4833	4833	chapter 65 of the Kansas Statutes Annotated, and amendments thereto, or
4834	4834	otherwise lawfully in possession of marijuana, cannabis or a controlled
4835	4835	substance to pay the tax required under this act.
4836	4836	Sec. 59. K.S.A. 79-5201 and 79-5210 and K.S.A. 2022 Supp. 21-
4837	4837	5703, 21-5705, 21-5706, 21-5707, 21-5709 and 21-5710 are hereby
4838	4838	repealed.
4839	4839	Sec. 60. This act shall take effect and be in force from and after its
4840	4840	publication in the statute book.
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