SB 1045

CANNABIS LEGALIZATION AND REGULATION

Under this bill, a person who is at least 21 years old may legally possess cannabis for recreational purposes, and a person who is at least 21 years old may legally purchase intoxicating hemp products. A person who is at least 18 years old, or a person who is a minor if their parent, guardian, or legal custodian consents, may possess cannabis for medical purposes. Under the bill, a person may produce, process, or sell cannabis if the person has a license. The bill does not affect federal law, which generally prohibits persons from manufacturing, delivering, or possessing marijuana and applies to both intrastate and interstate violations.

Intoxicating hemp products

Under current law, there is no age restriction on activities related to hemp. The bill restricts access to intoxicating hemp products to individuals age 21 or older. Under the bill, an “intoxicating hemp product” is a hemp product, either in the form of an edible item or a beverage, that contains intoxicating cannabinoids at a concentration level of 1.0 to 10.0 milligrams (mg) per 12 fluid ounces of beverage or per serving or per package of edible. Any hemp product that has a higher concentration of cannabinoids or that is in any other format is regulated as cannabis. Under the bill, a law enforcement officer may seize hemp product that is sold to or in the possession of an individual under age 21.

Additionally, no person may sell any intoxicating hemp product to a person under age 21 or purchase such a product on behalf of a person who is under age 21. Under the bill, the penalties for such a violation vary depending on whether the person has committed a previous violation and range from a civil forfeiture of up to $500, if the person has no previous violations, to a fine of up to $10,000 and imprisonment for up to nine months or both, if the person has committed three or more violations in the preceding 30 months.

Under current law, the penalty for violating hemp producer regulations is a forfeiture of not less than $200 nor more than $5,000 or, for a subsequent offense committed within five years, a forfeiture of not less than $400 nor more than $10,000. Under the bill, that penalty applies to certain violations regarding the sale of intoxicating hemp products generally.

Under federal law, beginning on November 12, 2026, the federal definition of what constitutes “hemp” will change, and certain products that are considered legal hemp under current federal and state law will no longer be considered hemp. On the day that the federal provisions take effect, the hemp provisions in this bill are repealed and new provisions relating to low-dose cannabis-infused products take effect.

Legalizing the possession of cannabis

Current law prohibits a person from manufacturing, distributing, or delivering marijuana; possessing marijuana with the intent to manufacture, distribute, or deliver it; possessing or attempting to possess marijuana; using drug paraphernalia; or possessing drug paraphernalia with the intent to produce, distribute, or use a controlled substance.

The bill changes state law to allow a person who is at least 21 years old to possess usable cannabis in any of the following forms and quantities: 1) up to 2.5 ounces of cannabis flower in a public place; 2) up to five pounds of cannabis flower in their private residence; 3) up to one gram of tetrahydrocannabinol in a cannabis-infused product; and 4) up to 15 grams of cannabis concentrate. The bill also allows a qualifying patient to possess cannabis for medical purposes. Under the bill, a “qualifying patient” is an individual at least 18 years of age, with certain exceptions, who has been diagnosed with or is undergoing treatment for a debilitating disease or treatment.

The bill also eliminates the prohibition on possessing or using drug paraphernalia that relates to cannabis consumption.

Penalties for violating the laws relating to possession, distribution, and sale without a license vary widely depending on the severity of the violation, the age of the violator, and the quantity of cannabis involved in the violation. Generally, for low-level violations, the penalty is a forfeiture of up to $250, and penalties increase in severity to a Class I felony.

Regulating the production, processing, transportation, and sale of cannabis

The bill creates the Division of Cannabis Regulation within the Department of Agriculture, Trade and Consumer Protection (“division”) to oversee the production, processing, transportation, and testing of cannabis.

The bill requires, with certain exceptions, a person to obtain a license from the division to produce, process, or possess with the intent to sell cannabis or to operate a cannabis microbusiness.

The bill also requires a person to obtain a license from the Department of Revenue to sell cannabis at a cannabis dispensary or to operate a cannabis lounge, and requires cannabis microbusinesses to complete a two-part application that begins with submitting an application for a conditional license to the division, which must then be approved by DOR.

The requirements for obtaining any license relating to cannabis are the same whether it is issued by the division or DOR. In general, an applicant for any cannabis license must be at least 10 years past the completion of any sentence for a violent crime; must be at least 21 years of age; must not have a financial interest in any other cannabis licensee or licensee applicant; must have been a resident of this state for at least the 90 continuous days before the application date; must submit to an inspection of their premises; must demonstrate sufficient security features in place at the premises; and must include with their application a detailed description of the premises to be licensed. A person who holds a cannabis license must also comply with certain operational requirements.

In general, licenses to produce and process cannabis are mutually exclusive with licenses to sell cannabis, except in the case of a cannabis microbusiness, and no person licensed to produce, process, or sell cannabis may be licensed if they have any financial interest in a cannabis testing laboratory.

To obtain any license relating to cannabis, either from the division or from DOR, an applicant must pay an application fee of $250 plus the cost of any required background investigation, then an annual license fee of $3,000.

The bill permits a city, village, town, or county to enact an ordinance prohibiting the operation of a licensed cannabis microbusiness, cannabis dispensary, or cannabis lounge within the city, village, town, or county.

Cannabis producer licenses

Under the bill, a licensed cannabis producer may plant, grow, cultivate, and harvest cannabis; transfer or sell cannabis to a licensed cannabis processor or a licensed cannabis testing laboratory; and engage in any related activities that are necessary for the operation, such as possessing and storing cannabis. Under the bill, a cannabis producer may operate a premises with a “canopy,” which is the space for producing mature cannabis plants (as opposed to the space for propagating plants or starting seedlings), of up to 50,000 square feet.

Cannabis processor licenses

Under the bill, a licensed cannabis processor may obtain cannabis from a licensed cannabis producer or cannabis microbusiness; process cannabis into usable cannabis; package and label usable cannabis products; sell usable cannabis to licensed cannabis retailers or cannabis microbusinesses; and engage in any related activities that are necessary for the operation, such as possessing and storing cannabis. In addition, the bill provides that a licensed cannabis processor must package the usable cannabis in child-resistant packaging and attach a label to the packaging that includes certain information. Furthermore, the bill provides that no cannabis processor or cannabis microbusiness may make usable cannabis from cannabis that was grown outside the state.

Cannabis retailer licenses

Under the bill, a licensed cannabis retailer may operate a cannabis dispensary and, if they apply for an additional license, a cannabis lounge. A cannabis retailer may obtain packaged and labeled usable cannabis from licensed cannabis processors. A cannabis retailer operating a cannabis dispensary may sell usable cannabis and paraphernalia intended for the storage or use of usable cannabis to consumers, as well as other items related to the cannabis business. A cannabis retailer operating a cannabis lounge may not sell usable cannabis or paraphernalia intended for the storage or use of usable cannabis, but may sell other items related to the cannabis business.

Cannabis microbusiness licenses

Under the bill, a licensed microbusiness is a cannabis producer that may also act as a cannabis processor, cannabis retailer, or both, all on a single premises, if the cannabis microbusiness operates within a single “canopy,” which is the space for producing mature cannabis plants (as opposed to the space for propagating plants or starting seedlings), of not more than 20,000 square feet. To be licensed as a cannabis microbusiness, an applicant must first apply to the division and indicate which regulated activities the applicant intends to engage in, and then the division must forward the application to DOR for final approval.

Regulating the transportation of cannabis

The bill requires the division to register cannabis transporters. To be registered as a cannabis transporter, an applicant must already be licensed as a cannabis producer, cannabis processor, cannabis microbusiness, or cannabis retailer; must complete a cannabis transportation course that has been approved by the division; and must pay a $5 registration fee. A registered cannabis transporter may transport cannabis between the premises of any cannabis licensees or between a cannabis licensee and a cannabis testing laboratory.

Regulating the testing of cannabis

The bill requires the division to license entities as cannabis testing laboratories. To be licensed as a cannabis testing laboratory, an entity must meet the same criteria as any other cannabis licensee. Cannabis testing laboratories certify whether cannabis and usable cannabis comply with DATCP standards regarding potency and the presence and levels of mold, fungus, pesticides, and other contaminants. Cannabis testing laboratories must destroy any samples remaining after certification testing.

Regulating the packaging and labeling of cannabis

The bill requires that licensed cannabis processors and cannabis microbusinesses operating as cannabis processors must package usable cannabis in child-resistant packaging and attach a label to the packaging that includes all of the following information:

1. A complete list of the ingredients in the usable cannabis product.

2. The type and the amount of any cannabinoid contained in the usable cannabis or the THC concentration in the usable cannabis.

3. The cannabis producer’s or cannabis microbusiness’s business or trade name.

4. The cannabis producer’s or cannabis microbusiness’s license number.

5. The lot number of the cannabis.

6. The harvest date.