Fiscal Note
Fiscal Services Division
HF 2605 – Consumable Hemp, Penalties and Licensing (LSB5341HV.2)
Staff Contact: Austin Brinks (515.725.2200) austin.brinks@legis.iowa.gov
Fiscal Note Version – Final Action
Description
House File 2605 makes various changes to the Iowa Hemp Act.
Division I of the Bill does the following:
• Updates the definition of a consumable hemp product to require that the product’s maximum
tetrahydrocannabinol (THC) concentration is less than or equal to the lesser of 0.3% on a
dry weight basis or 4 milligrams per serving and 10 milligrams per container on a dry weight
basis.
• Updates the definition of a hemp product to exclude an item or part of an item that exceeds
the maximum total THC concentration allowed under Iowa Code section 124.204(7), or an
item or part of an item that is metabolized or otherwise subject to a biotransformative
process when introduced into the human body and that exceeds the maximum THC allowed
for a consumable hemp product.
• Requires that each container storing consumable hemp be affixed with a notice advising
consumers on the risks associated with its use, for which the Department of Health and
Human Services (HHS) is required to adopt administrative rules for the language and
display.
• Updates the requirements for manufacturing, selling, or consuming a consumable hemp
product to require that the product complies with restrictions set forth in rules adopted by the
HHS.
• Creates a serious misdemeanor for a person using, marketing, or distributing a raw or dried
flower form of hemp for the purpose of inhalation and requires any raw or dried flower form
of hemp that is marketed or distributed to have a notice on its container stating that it is a
raw or dried agricultural commodity not suitable for human consumption.
• Creates a serious misdemeanor for a person registered to manufacture or sell consumable
hemp who manufactures, produces, distributes, markets, or sells a synthetic consumable
hemp product as defined by administrative rules adopted by the HHS.
• Creates a civil penalty not to exceed $10,000 per day for a person who is engaged in the
retail sale of a consumable hemp product and has failed to register with the HHS.
• Creates a serious misdemeanor for a person who is engaged in the retail sale of
consumable hemp products but has not registered with the HHS and for selling a
consumable hemp product that is advertised as a consumable hemp product but is not a
consumable hemp product.
• Creates a simple misdemeanor for a person who sells, gives, or distributes a consumable
hemp product to a person under the age of 21.
• Specifies that a person under the age of 21 who consumes, possesses, purchases, or
attempts to purchase a consumable hemp product is subject to a scheduled violation. In
addition, the person is subject to a court appearance where the court shall sentence the
person to a number of hours of community service depending on the number of violations.
A person under the age of 21 does not violate the Bill if the person is possessing a
consumable hemp product as part of the person’s employment or if the person is working
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 under the direction or consent of the Department of Public Safety (DPS) or local law
enforcement.
• Provides scheduled violations for a person under the age of 21 who violates the Bill. For a
first violation, there is a scheduled fine of $70; for a second violation, a scheduled fine of
$135; and for a third or subsequent violation, a scheduled fine of $325. These scheduled
violations are not subject to the Crime Services Surcharge or court costs otherwise added to
scheduled violations. Any fines paid for these violations are retained by the city or county
that enforced the violation.
• Allows the HHS to order the confiscation and disposal of a hemp product if the product is in
violation of this Bill, requires the HHS to deliver any sample of the product to the DPS or
local law enforcement, and requires a person who is registered with the HHS to pay for the
cost incurred by the HHS for the destruction of the product.
Division II of the Bill does the following:
• Adds the prohibition of a person holding a retail alcohol license and the person’s agents or
employees from selling, giving, or otherwise supplying any alcoholic beverage containing
THC, as described in Iowa Code chapter 124 and Iowa Code section 123.49.
• Prohibits a person holding a license, permit, or certificate of compliance from manufacturing,
importing, or selling at wholesale an alcoholic beverage containing THC as described in
Iowa Code chapter 124.
Background
Iowa Code chapter 204, known as the Iowa Hemp Act, was created in 2019 and governs the
production and sale of products derived from hemp. Hemp is defined as a species of cannabis
that has a maximum concentration of delta-9 THC that does not exceed 0.3% on a dry weight
basis. The current definition does not include hemp products that are intended to be inhaled
and does not specify an age limit on the use of consumable hemp products.
The Iowa Hemp Act prohibits a person from possessing, using, manufacturing, marketing,
transporting, delivering, or distributing harvested hemp or a hemp product if the intended use is
introduction into the body through an electronic, chemical, or mechanical process or a device
such as a cigarette, cigar, cigarillo, or pipe. Any person who manufactures or sells a
consumable hemp product must register with the HHS.
Iowa Code chapter 123 provides regulation on alcoholic beverages in the State. A violation of
Iowa Code section 123.49 is a simple misdemeanor, while a general violation of Iowa Code
chapter 123 is a serious misdemeanor for a first and second offense and an aggravated
misdemeanor for a third and subsequent offense.
A simple misdemeanor is punishable by confinement for up to 30 days in jail and a fine of at
least $105 but no more than $855. A serious misdemeanor is punishable by confinement for up
to one year and a fine of at least $430 but no more than $2,560. An aggravated misdemeanor
is punishable by confinement for up to two years and a fine of at least $865 but no more than
$8,540.
Assumptions
• There may be an increase in simple, serious, and aggravated misdemeanors as a result of
this Bill, but the number is unknown.
• There may be an increase in the number of scheduled violations as a result of this Bill, but
the number is unknown.
• Registration revenue collected by the HHS may decrease, but the amount of this decrease
is unknown.
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• Marginal costs for county jails cannot be estimated due to a lack of data. For purposes of
this analysis, the marginal cost for county jails is assumed to be $50 per day.
• The marginal cost per day in prison is $24.94.
Correctional Impact
House File 2605 creates and expands criminal offenses. As a result, the correctional impact
cannot be estimated due to a lack of existing data. Figure 1 shows estimates for sentencing to
State prison, parole, probation, or Community-Based Corrections (CBC) residential facilities;
length of stay (LOS) in months under those supervisions; and supervision marginal costs per
day for serious and aggravated misdemeanors. A conviction for a simple misdemeanor does
not result in a prison sentence but does carry the possibility of confinement in jail for up to 30
days. Refer to the Legislative Services Agency (LSA) memo addressed to the General
Assembly, Cost Estimates Used for Correctional Impact Statements, dated January 16, 2024,
for information related to the correctional system.
Figure 1 — Sentencing Estimate and Length of Stay (LOS)
Percent
FY 2023 Avg Sentenced to
Percent LOS in Marginal Percent FY23 Field Avg Cost Per CBC Marginal Percent Marginal FY23 Field Marginal
Ordered to Prison (All Cost Per Ordered to Avg LOS on Day on Residential Cost CBC Ordered to Cost Per Avg LOS on Cost Per
Conviction Offense Class State Prison Releases) Day Probation Probation Probation Facility Per Day County Jail Day Jail Parole Day Parole
Aggravated Misdemeanor 47.6% 10.6 $24.94 67.6% 25.1 $ 7.67 5.2% $ 20.00 55.9% $ 50.00 6.7 $ 7.67
Serious Misdemeanor 1.7% 6.6 $24.94 53.0% 19.2 $ 7.67 1.2% $ 20.00 74.2% $ 50.00 N/A $ 7.67
Minority Impact
House File 2605 creates and expands criminal offenses, and the minority impact cannot be
determined due to lack of conviction data. Refer to the LSA memo addressed to the General
Assembly, Minority Impact Statement, dated January 16, 2024, for information related to
minorities in the criminal justice system.
Fiscal Impact
The fiscal impact cannot be estimated due to a lack of existing data. Figure 2 shows the
average State cost per offense for an aggravated misdemeanor, serious misdemeanor, and
simple misdemeanor.
Figure 2 — Average State Cost Per Offense
Offense Class Average Cost
Aggravated Misdemeanor $7,500 to $10,800
Serious Misdemeanor $400 to $6,900
Simple Misdemeanor $40 to $400
Revenue from scheduled violations paid to cities and counties for violations under the Bill
cannot be estimated.
There may be a loss of revenue from registration fees associated with consumable hemp
products, but the impact is unknown.
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Sources
Criminal and Juvenile Justice Planning, Department of Management
Department of Health and Human Services
Legislative Services Agency
/s/ Jennifer Acton
April 29, 2024
Doc ID 1449243
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
www.legis.iowa.gov
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Statutes affected:
Introduced: 204.2, 124.204, 204.7, 204.12, 204.14A, 204.14E
Reprinted: 204.2, 124.204, 204.7, 204.12, 204.14A, 204.14E
Enrolled: 204.2, 124.204, 204.7, 204.12, 204.14A, 204.14E