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