Enacting the adult use cannabis regulation act to regulate the cultivation, manufacturing, possession and sale of cannabis in this state.

Session of 2025
HOUSE BILL No. 2405
By Committee on Federal and State Affairs
Requested by Representative Miller
3-10
AN ACT concerning cannabis; creating the adult use cannabis regulation
act; providing for the licensure and regulation of cannabis, including
the cultivation, manufacturing, transportation, possession and sale of
cannabis; providing certain fines and penalties for violations of the act;
providing exemptions from crimes involving controlled substances;
imposing a tax on the sale of cannabis and providing for the disposition
of the revenues collected thereon; creating the cannabis business
regulation fund; amending K.S.A. 21-5703, 21-5706, 21-5707, 21-
5709, 21-5710, 79-5201 and 79-5210 and K.S.A. 2024 Supp. 21-5705
and repealing the existing sections; also repealing K.S.A. 2024 Supp.
21-5705a.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. The provisions of sections 1 through 44, and
amendments thereto, shall be known and may be cited as the adult use
cannabis regulation act.
New Sec. 2. As used in the adult use cannabis regulation act, section
1 et seq., and amendments thereto:
(a) "Acquire" means obtaining ownership, control, power to vote or
sole power of disposition of the owner's interest, directly or indirectly, or
through one or more transactions or subsidiaries, through purchase,
assignment, transfer, exchange, succession or other means in connection
with the acquisition of an owner's interest in a cannabis business.
(b) "Act" means the adult use cannabis regulation act.
(c) "Acting in concert" means knowingly participating in a joint
activity or interdependent conscious parallel action toward a common
goal, whether or not pursuant to an express agreement.
(d) (1) "Advertising" means the act of providing consideration for the
publication, dissemination, solicitation or circulation of visual, oral or
written communication to directly induce any person to patronize a
particular cannabis business or purchase a particular form of cannabis or
cannabis product.
(2) "Advertising" does not include packaging and labeling, consumer
education materials or branding.
(e) "Affiliate" or "affiliated with" means a person that, directly or
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indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, the person specified.
(f) "Beneficial owner" or "beneficial ownership" means an owner's
interest is determined in accordance with section 13(d) of the federal
securities exchange act of 1934 and rule 13d-3 adopted pursuant thereto.
(g) "Branding" means promotion of a cannabis business's brand
through publicizing the cannabis business's name, logo or distinct design
features of the brand.
(h) "Cannabis" means the same as defined in K.S.A. 65-4101, and
amendments thereto.
(i) "Cannabis business" means a cannabis cultivation facility,
cannabis testing facility, cannabis products manufacturer, cannabis
transporter, cannabis business operator, waste disposal facility, hospitality
business, hospitality and sales business or cannabis retailer.
(j) "Cannabis business operator" means a person that is not an owner
and that is licensed to provide professional operational services to a
cannabis business for direct remuneration from such cannabis business.
(k) "Cannabis consumer waste" means any component left after the
consumption of a cannabis product, including, but not limited to,
containers, packages, cartridges, pods, cups, batteries, all-in-one
disposable devices and any other waste component left after the cannabis
is consumed.
(l) "Cannabis cultivation facility" means a person licensed to
cultivate, prepare and package cannabis and sell cannabis to cannabis
retailers, cannabis product manufacturers and other cannabis cultivation
facilities.
(m) "Cannabis products" means concentrated cannabis products and
cannabis products that are comprised of cannabis and other ingredients and
are intended for use or consumption, including, but not limited to, edible
products, ointments and tinctures that are produced by a cannabis products
manufacturer.
(n) "Cannabis products manufacturer" means a person licensed to:
(1) Purchase cannabis from a cannabis cultivation facility or other
cannabis products manufacturer;
(2) manufacture cannabis products;
(3) prepare and package cannabis and cannabis products; and
(4) sell cannabis and cannabis products to cannabis retailers,
hospitality and sales businesses or other cannabis product manufacturers.
(o) "Cannabis retailer" means a person licensed to purchase cannabis
from cannabis cultivation facilities and cannabis and cannabis products
from cannabis products manufacturers and to sell cannabis and cannabis
products to consumers.
(p) "Cannabis testing facility" means a person licensed to analyze and
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certify the safety and potency of cannabis and cannabis products.
(q) "Cannabis transporter" means a person licensed to transport
cannabis and cannabis products from one cannabis business to another
cannabis business and to temporarily store such cannabis and cannabis
products at such cannabis transporter's licensed premises.
(r) "Cannabis waste" means any of the following:
(1) Cannabis, cannabis concentrate or cannabis products that are:
(A) Unused, surplus, returned or expired;
(B) determined to have failed laboratory testing standards and cannot
be remediated or decontaminated; or
(C) part of the inventory of a licensee and:
(i) Such licensee has permanently closed;
(ii) such inventory was not acquired as authorized by the adult use
cannabis regulation act; or
(iii) such inventory cannot be lawfully transferred or sold to another
licensee;
(2) cannabis consumer waste; or
(3) the debris of the plant Cannabis sativa, including any dead plants
or parts of the plant that are not used by a licensee, except "medical
cannabis waste" does not include the seeds, roots, stems, stalks or fan
leaves of such plants.
(s) "Consumer education materials" means any informational
materials that seek to educate consumers about cannabis generally,
including, but not limited to education regarding the safe consumption of
cannabis, concentrated cannabis or cannabis products, provided such
materials are not distributed or made available to individuals under 21
years of age.
(t) "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting the owner's interests, by
contract or otherwise.
(u) "Controlling beneficial owner" means a person that satisfies one
or more of the following criteria:
(1) An individual, organization that is organized under the laws of
and for which its principal place of business is located in one of the states
or territories of the United States or District of Columbia, publicly traded
corporation or qualified private fund that is not a qualified institutional
investor:
(A) Acting alone or acting in concert that owns or acquires beneficial
ownership of 10% or more of the owner's interest of a cannabis business;
(B) that is an affiliate that controls a cannabis business and includes,
but is not limited to, any manager; or
(C) that is otherwise in a position to control the cannabis business,
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except for a cannabis business operator licensee; or
(2) a qualified institutional investor acting alone or acting in concert
that owns or acquires beneficial ownership of more than 30% of the
owner's interest of a cannabis business.
(v) "Director" means the director of alcoholic beverage control.
(w) "Escorted" means appropriately checked into a limited access
area and accompanied by an individual licensed pursuant to this act,
except that trade craftspeople not normally engaged in the business of
cultivating, processing, selling or testing cannabis need not be
accompanied on a full-time basis, but shall be reasonably monitored.
(x) "Hospitality and sales business" means a person licensed to sell
cannabis and cannabis products for consumption on and off the licensed
premises. A "hospitality and sales business" shall not be a mobile facility.
(y) "Hospitality business" means a person licensed to permit the
consumption of cannabis and cannabis products on the licensed premises.
A "hospitality business" includes mobile facilities.
(z) "Immature plant" means a nonflowering cannabis plant that is:
(1) No taller than eight inches and no wider than eight inches;
(2) is produced from a cutting, clipping or seedling; and
(3) is in a cultivating container.
(aa) "Indirect financial interest holder" means a person that is not an
affiliate, a controlling beneficial owner or a passive beneficial owner of a
cannabis business and that:
(1) Holds a commercially reasonable royalty interest in exchange for
a cannabis business's use of the person's intellectual property;
(2) holds a permitted economic interest that was issued prior to
January 1, 2026, and that has not been converted into an owner's interest;
(3) is a contract counterparty with a cannabis business, other than a
customary employment agreement, that has a direct nexus to the
cultivation, manufacture or sale of cannabis or cannabis products,
including, but not limited to, a lease of real property on which the cannabis
business operates, a lease of equipment used in the cultivation of cannabis,
a secured or unsecured financing agreement with the cannabis business, a
security contract with the cannabis business or a management agreement
with the cannabis business, provided that no such contract compensates the
contract counterparty with a percentage of revenue for profits of the
cannabis business; or
(4) is an indirect financial interest holder as defined in rules and
regulations adopted pursuant to this act.
(bb) "Licensed premises" means the premises specified in an
application for a license that are owned or in possession of the licensee and
within which the licensee is authorized to cultivate, manufacture,
distribute, sell or test cannabis and cannabis products in accordance with
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this act.
(cc) "Licensee" means a person licensed pursuant to this act.
(dd) "Limited access areas" means a building, room or other
contiguous area upon the licensed premises where cannabis and cannabis
products are cultivated, manufactured, stored, weighed, packaged, sold,
possessed for sale or tested under control of the licensee with access
limited to only licensees and those individuals escorted by a licensee,
except as otherwise provided in section 14, and amendments thereto. All
areas of ingress or egress to limited access areas shall be clearly identified
as such by a sign as designated by the director.
(ee) "Owner's interest" means:
(1) The shares of stock in a corporation;
(2) a membership interest in a limited liability company;
(3) a partnership interest in a partnership, limited partnership or
limited liability partnership.
(ff) "Passive beneficial owner" means any person acquiring any
owner's interest in a cannabis business that is not otherwise a controlling
beneficial owner or in control.
(gg) "Permitted economic interest" means any unsecured convertible
debt instrument, option agreement, warrant or any other right to obtain an
ownership interest when the holder of such interest is an individual who is
a lawful United States resident and whose right to convert into an
ownership interest is contingent on the holder qualifying and obtaining a
license as an owner under this act, or such other agreements as may be
permitted by the director.
(hh) "Person" means any natural person, corporation, partnership,
trust or association.
(ii) "Postsecondary educational institution" means public or private
postsecondary educational institution as defined in K.S.A. 74-3201b, and
amendments thereto.
(jj) "Premises" means a distinctly identified and definite location that
may include a building, a part of a building, a room or any other definite
contiguous area.
(kk) (1) "Publicly traded corporation" means any person other than an
individual that is organized under the laws of and for which its principal
place of business is located in one of the states or territories of the United
States or District of Columbia and that:
(A) Has a class of securities registered pursuant to section 12 of the
federal securities exchange act of 1934 that:
(i) Constitutes covered securities pursuant to section 18(b)(1)(A) of
the federal securities act of 1933; or
(ii) is qualified and quoted on the OTCQX or OTCQB tier of the
OTC markets if the person:
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(a) Is then required to file reports and is filing reports on a current
basis with the federal securities and exchange commission pursuant to the
federal securities exchange act of 1934 as if the securities constituted
"covered securities" as described in paragraph (1)(A)(i); and
(b) has established and is in compliance with corporate governance
measures pursuant to corporate governance obligations imposed on
securities qualified and quoted on the OTCQX tier of the OTC markets; or
(B) is reasonably identified as a publicly traded corporation by the
director in accordance with rules and regulations adopted pursuant to this
act.
(2) A "publicly traded corporation" does not include:
(A) An ineligible issuer, as defined in rule 405 adopted pursuant to
the federal securities act of 1933, unless such publicly traded corporation
satisfies the definition of ineligible issuer solely because:
(i) The corporation is filing reports on a current basis with the federal
securities and exchange commission pursuant to the federal securities
exchange act of 1934 as if the securities constituted covered securities as
described in paragraph (1)(A)(i);
(ii) prior to becoming a publicly traded corporation, the person was
licensed by the director as a cannabis business with a demonstrated history
of operations in this state for at least two years;
(iii) during such time of licensure, the person was not subject to
suspension or revocation of the license; and
(iv) the corporation is one or more of the following:
(a) A blank check company as defined in rule 419(a)(2) adopted
pursuant to the federal securities act of 1933;
(b) an issuer in an offering of penny stock, as defined in rule 3a51-1
adopted pursuant to the federal securities exchange act of 1934; or
(c) a shell company, as defined in rule 405 adopted pursuant to the
federal securities act of 1933; or
(B) a person disqualified as a bad actor under rule 506(d) adopted
pursuant to the federal securities act of 1933.
(ll) "Qualified institutional investor" means:
(1) A bank, as defined in section 3(a)(6) of the federal securities
exchange act of 1934, if the bank is current in all applicable reporting and
record-keeping requirements under the federal securities exchange act of
1934 and any rules adopted pursuant thereto;
(2) a bank holding company, as defined in the federal bank holding
company act of 1956, if the bank holding company is registered and
current in all applicable reporting and record-keeping requirements under
the federal bank holding company act of 1956 and any rules adopted
pursuant thereto;
(3) an insurance company, as defined in section 2(a)(17) of the
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federal investment company act of 1940, if the insurance company is
current in all applicable reporting and record-keeping requirements under
the federal investment company act of 1940 and any rules adopted
pursuant thereto;
(4) an investment company registered under section 8 of the federal
investment company act of 1940 and subject to 15 U.S.C. §§ 80a-1 to 80a-
64 if the investment company is current in all applicable reporting and
record-keeping requirements under the federal investment company act
and any rules adopted pursuant thereto;
(5) an employee benefit plan or pension fund subject to the federal
employee retirement income security act of 1974, excluding an employee
benefit plan or pension fund sponsored by a licensee or an intermediary
holding company licensee that directly or indirectly owns 10% or more of
a licensee;
(6) a state or federal government pension plan;
(7) a group comprised entirely of persons specified in paragraphs (1)
through (6); or
(8) any other entity identified by the director in accordance with rules
and regulations adopted pursuant to this act.
(mm) "Qualified private fund" means an issuer that would be an
investment company, as defined in section (3) of the federal investment
company act of 1940, but for the exclusions provided under sections 3(c)
(1) or 3(c)(7) of that act, and that:
(1) Is advised or managed by an investment adviser, as defined and
registered under sections 80b-1-21, title 15 of the federal investment
advisers act of 1940, and for which the registered investment adviser is
current in all applicable reporting and record-keeping requirements under
the federal investment advisers act and any rules adopted pursuant thereto;
and
(2) satisfies one or more of the following:
(A) Is organized under the law of a state or the United States;
(B) is organized, operated or sponsored by a U.S. person, as defined
under subsection 17 C.F.R. § 230.902(k); or
(C) sells securities to a U.S. person, as defined under subsection 17
C.F.R. § 230.902(k).
(nn) "Resealable" means that the package continues to function
within effectiveness specifications established by the director and similar
to the federal poison prevention packaging act of 1970, 15 U.S.C. § 1471
et seq., for the number of openings and closings customary for the size and
contents as determined by the director.
(oo) "Sale" or "sell" includes to:
(1) Exchange, barter or traffic in;
(2) solicit or receive and order, except through a licensee;
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HB 2405 8
(3) deliver for value in any way other than gratuitously;
(4) peddle or possess with intent to sell; or
(5) traffic in for any consideration promised or obtained directly or
indirectly.
(pp) "Secretary" means the secretary of revenue.
(qq) "Security" means the same as defined in section (2)(l) of the
federal securities act of 1933.
(rr) "School" means any school operated by a school district under
the laws of this state or any private school offering kindergarten or any of
the grades one through 12.
(ss) "Waste disposal facility" means a person licensed to dispose of
cannabis waste through destruction or recycling.
New Sec. 3. (a) No person shall grow, harvest, process, sell, transport,
deliver, furnish or otherwise possess any form of cannabis, except as
specifically provided in the adult use cannabis regulation act or the
commercial industrial hemp act, K.S.A. 2-3901 et seq., and amendments
thereto.
(b) Nothing in the adult use cannabis regulation act shall be construed
to:
(1) Permit the use or possession of cannabis in any form on federal
land located in this state; or
(2) prohibit any person, employer, school, postsecondary educational
institution or any other entity that occupies, owns or controls property in
this state from prohibiting the use, possession, display, transfer,
distribution, sale, transportation or cultivation of cannabis in any form on
or in such property.
(c) The provisions of this act shall not apply to industrial hemp or any
activities related thereto that are subject to the commercial industrial hemp
act, K.S.A. 2-3901 et seq., and amendments thereto.
New Sec. 4. The director shall have the following powers, functions
and duties:
(a) To receive applications for, and to issue, suspend and revoke
licenses in accordance with the provisions of this act;
(b) to call upon other administrative departments of the state, county
and city governments, law enforcement agencies and prosecuting attorneys
for such information and assistance as the director deems necessary in the
performance of the duties imposed upon the director by this act;
(c) in the conduct of any hearing authorized and held by the director
to:
(1) Examine, or cause to be examined, under oath, any person, and to
examine or cause to be examined books and records of any licensee;
(2) hear testimony and take proof material for the information of the
director in the discharge of such duties hereunder;
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HB 2405 9
(3) administer or cause to be administered oaths; and
(4) issue subpoenas to require the attendance of witnesses and the
production of books that shall be effective in any part of this state, and any
district court may, by order duly entered, require the attendance of
witnesses and the production of relevant books subpoenaed by the director
and may compel obedience by proceedings for contempt;
(d) to collect, receive, account for and turn over to the secretary of
revenue all registration and license fees and taxes provided for in this act
and all other moneys received by the director by virtue of the director's
office; and
(e) such other powers, functions and duties as are or may be imposed
or conferred upon the director by law.
New Sec. 5. (a) The director and agents and employees of the director
designated by the director, with the approval of the secretary of revenue,
are hereby vested with the power and authority of law enforcement
officers, in the execution of the duties imposed upon the director by this
act and in enforcing the provisions of this act.
(b) (1) The director and each agent and employee designated by the
director under subsection (a), with the approval of the secretary of
revenue, shall have the authority to:
(A) Make arrests, conduct searches and seizures and carry firearms
while investigating violations of this act and to generally enforce all the
criminal laws of the state as violations of those laws are encountered by
such employees or agents during the routine conduct of their duties as
determined by the director or the director's designee; and
(B) issue notices to appear pursuant to K.S.A. 22-2408, and
amendments thereto.
(2) No agent or employee of the director shall be certified to carry
firearms under the provisions of this section without having first
successfully completed the firearm training course or courses prescribed
for law enforcement officers under K.S.A. 74-5604a(a), and amendments
thereto. The director may adopt rules and regulations prescribing other
training required for such agents or employees.
New Sec. 6. (a) Except as permitted under subsection (b):
(1) The secretary of revenue, the director of alcoholic beverage
control or any officer, employee or agent of the division of alcoholic
beverage control shall not solicit or accept, directly or indirectly, any gift,
gratuity, emolument or employment from any person who is an applicant
for any license or is a licensee under the provisions of the adult use
cannabis regulation act or any officer, agent or employee thereof, or solicit
requests from or recommend, directly or indirectly, to any such person, the
appointment of any individual to any place or position; and
(2) an applicant for a license or a licensee under the provisions of this
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HB 2405 10
act shall not offer any gift, gratuity, emolument or employment to the
secretary, the director or any officer, employee or agent of the division of
alcoholic beverage control.
(b) The secretary may adopt rules and regulations allowing the
acceptance of official hospitality by the secretary, the director and officers
and employees of the division of alcoholic beverage control, subject to any
limits as prescribed by such rules and regulations.
(c) If the secretary, the director or any officer, employee or agent of
the division of alcoholic beverage control violates any provision of this
section, such person shall be removed from such person's office or
employment.
(d) Violation of any provision of this section is a misdemeanor
punishable by a fine of not to exceed $500 or imprisonment of not less
than 60 days nor more than six months, or both such fine and
imprisonment.
(e) Nothing in this section shall be construed to prohibit the
prosecution and punishment of any person for bribery as defined in the
Kansas criminal code.
New Sec. 7. (a) The director shall establish and maintain an
electronic database to monitor cannabis from its seed source through its
cultivation, testing, product manufacturing, transportation and sale. The
director may contract with a separate entity to establish and maintain all or
any portion of the electronic database on behalf of the division of alcoholic
beverage control.
(b) The electronic database shall allow for information regarding
cannabis to be updated instantaneously. Any licensed cannabis business
shall submit such information to the director as the director determines is
necessary for maintaining the electronic database.
New Sec. 8. (a) The director shall establish a cannabis and cannabis
products independent testing and certification program for licensed
cannabis businesses. Testing may include analysis for microbial and
residual solvents and chemical and biological contaminants deemed to be
public health hazards by the department of health and environment based
on medical reports and published scientific literature.
(b) (1) If test results indicate the presence of quantities of any
substance determined to be injurious to health, the licensee shall
immediately quarantine the cannabis or cannabis product and notify the
director. The director shall give the licensee an opportunity to retest the
cannabis or cannabis product. If two additional tests do not indicate the
presence of quantities of any substance determined to be injurious to
health, the product may be used or sold by the licensed cannabis business.
(2) If the test results indicate the presence of a microbial, the director
shall give the licensee an opportunity to remediate the cannabis or
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HB 2405 11
cannabis product. If the licensee is unable to remediate the cannabis or
cannabis products, the licensee shall document and properly destroy the
adulterated cannabis or cannabis products.
(c) (1) Testing shall verify tetrahydrocannabinol potency
representations and homogeneity for correct labeling and provide a
cannabinoid profile for the cannabis or cannabis product. An individual
piece of cannabis of 10 milligrams or less that has gone through process
validation is exempt from continued homogeneity testing. Homogeneity
testing for 100 milligram servings of cannabis may utilize validation
measures.
(2) The director shall determine an acceptable variance for potency
representations and procedures to address potency misrepresentations,
provided that such variance is at least plus or minus 15%.
(d) The director may use or employ the results of any test of cannabis
or cannabis products conducted by an analytical laboratory that is certified
for the particular testing category or is accredited pursuant to the
international organization for standardization/international electrotechnical
commission 17025, 2005 standard, or any subsequent superseding
standard, in that field of testing.
(e) The secretary shall adopt rules and regulations that prevent
redundant testing of cannabis and cannabis concentrate, including, but not
limited to, potency testing of cannabis allocated to extractions, and
residual solvent testing of cannabis concentrate when all inputs of the
cannabis concentrate have passed residual solvent testing.
New Sec. 9. (a) The classes of licenses the director may issue for a
premises shall be the following:
(1) Cannabis cultivation facility license;
(2) cannabis testing facility license;
(3) cannabis products manufacturer license;
(4) cannabis transporter license;
(5) cannabis business operator license;
(6) waste disposal facility license;
(7) hospitality business license;
(8) hospitality and sales business license; and
(9) cannabis retailer license.
(b) The director may issue an occupational license for any individual
who is an owner, manager, operator, employee, contractor or other
individual performing work on behalf of a cannabis business licensee or
having unescorted access to any restricted area of the licensed premises of
a cannabis business licensee.
New Sec. 10. (a) An application for a license shall be submitted to the
director in such form and manner as prescribed by the director. An
applicant shall pay the required fee at the time such application is
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HB 2405 12
submitted. A separate license application shall be submitted for each
premises to be operated by the applicant.
(b) No cannabis business license shall be issued to or held by:
(1) An individual whose criminal history record check indicates that
the individual has been convicted of or pleaded guilty to a felony within
the three years immediately preceding application for a license;
(2) a person who employs an individual who has not submitted to a
criminal history record check or whose criminal history record check
demonstrates such individual is ineligible for such employment;
(3) an individual whose criminal history record check indicates that
such individual is not of good moral character;
(4) a person other than an individual if the criminal history record
check of any of its controlling beneficial owners indicates that a
controlling beneficial owner is not of good moral character;
(5) a person under 21 years of age;
(6) a person who has not submitted a tax clearance certificate issued
by the department of revenue;
(7) an individual who is a law enforcement officer, county or district
attorney, an officer or employee of the attorney general's office or an
officer or employee of the division of alcoholic beverage control;
(8) a publicly traded entity that does not constitute a publicly traded
corporation;
(9) a person that is or has a controlling beneficial owner that is an
ineligible issuer pursuant to section 2, and amendments thereto;
(10) a person that is or has a controlling beneficial owner that is a bad
actor pursuant to section 2, and amendments thereto;
(11) a person that is not a publicly traded corporation that is or has a
passive beneficial owner or indirect financial interest holder that is a bad
actor pursuant to section 2, and amendments thereto;
(12) a person that is a publicly traded corporation that is or has a
nonobjecting passive beneficial owner or indirect financial interest holder
that is a bad actor pursuant to section 2, and amendments thereto; or
(13) a person:
(A) Who is a citizen or resident of a nation-state other than the United
States, unless such person is a dual citizen of the United States and another
jurisdiction or a permanent lawful resident of the United States;
(B) that is an entity organized under the laws of a nation-state other
than the United States or one of its subdivisions; or
(C) that is an entity wherever organized or doing business, that is
owned or controlled by a foreign government.
(c) No occupational license shall be issued to or held by an individual
who would be ineligible to hold a cannabis business license under
subsections (b)(1), (3), (5) or (7).
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HB 2405 13
(d) Each applicant for a cannabis business license shall require any
owner, director, officer and any employee or agent of such applicant to be
fingerprinted and to submit to a state and national criminal history record
check. The director is authorized to submit the fingerprints to the Kansas
bureau of investigation and the federal bureau of investigation for a state
and national criminal history record check. The director shall use the
information obtained from fingerprinting and the state and national
criminal history record check for purposes of verifying the identification
of the applicant and for making a determination of the qualifications of the
applicant for licensure. The Kansas bureau of investigation may charge a
reasonable fee to the applicant for fingerprinting and conducting a criminal
history record check. Local law enforcement officers and agencies may
assist the director in the taking and processing of fingerprints and may
charge the applicant a reasonable fee as reimbursement for expenses
incurred in taking and processing fingerprints. The provisions of this
subsection shall also apply to any individual applying for an occupational
license who is not otherwise required to be fingerprinted and submit to a
state and national criminal history record check.
(e) A license shall only be issued if the applicant satisfies the
requirements for licensure under this act and pays the required license fee.
(f) (1) A cannabis business license shall be valid for a period of one
year from the date such license is issued.
(2) An occupational license shall be valid for a period of two years
from the date such license is issued.
New Sec. 11. (a) At least 90 days prior to the expiration date of an
existing cannabis business license or occupational license, the director
shall notify the licensee of the expiration date by first-class mail at the
licensee's address of record with the director. A license renewal application
shall be submitted prior to the expiration of the license and be
accompanied by the required renewal application fee. If a licensee
properly submits a renewal application and fee, the licensee may continue
to operate until such application is approved or denied by the director.
(b) A license shall only be renewed if the licensee continues to satisfy
the requirements for licensure under this act and pays the required license
fee.
New Sec. 12. (a) A cannabis business licensee shall not acquire,
possess, cultivate, deliver, transfer, transport, supply or sell cannabis for
any purpose except as authorized by this act.
(b) No person shall exercise any of the privileges granted under a
license issued pursuant to this act other than the person holding such
licensee or any person permitted to exercise such privileges by the person
holding such license.
(c) A licensee shall possess and maintain possession of the premises
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HB 2405 14
for which the license is issued by ownership, lease, rental or other
arrangement for possession of the premises at all times.
(d) A license shall specify the date of issuance, the period of
licensure, the name of the licensee and the premises licensed. A license
shall be placed in a conspicuous location on the licensed premises in view
of the public.
(e) Each cannabis business licensee shall manage the licensed
premises or employ a manager and shall report the name of the manager to
the director. The licensee shall report any change in manager to the
director prior to such change.
(f) Each cannabis business licensee shall require that any owner,
manager, operator, employee, agent, contractor or any other individual
performing work on behalf of such licensee or having unescorted access to
a restricted area of the licensed premises of such licensee hold a valid
occupational license issued pursuant to this act.
(g) A cannabis business licensee that is not a publicly traded
corporation shall notify the director in writing of the name, address and
date of birth of any new controlling beneficial owner, passive beneficial
owner or manager before such new controlling beneficial owner, passive
beneficial owner or manager begins managing or associating with the
operation of such licensee. Any controlling beneficial owner, passive
beneficial owner, manager or employee shall submit to a criminal history
record check and obtain an occupational license from the director prior to
being associated with, managing, owning or working at a cannabis
business licensee.
(h) Except for a publicly traded corporation, a cannabis business
licensee shall report each transfer or change of financial interest in the
licensee to the director and receive approval prior to any such transfer or
change pursuant to section 15, and amendments thereto. Except for a
publicly traded corporation, a report is required for transfers of an owner's
interest of any entity regardless of size.
(i) Except as otherwise provided in this act, prior to issuing a license,
the director may consider the requirements of this act and any rules and
regulations adopted pursuant thereto and all other reasonable restrictions
that are or may be placed upon the applicant. With respect to an additional
license for the same cannabis business licensee or the same owner of
another licensee, the director shall consider the effect on competition of
granting or denying an additional license to such licensee and shall not
approve an application for an additional license that would have the effect
of restraining competition.
New Sec. 13. (a) The director shall not approve an application for a
cannabis business license:
(1) If the application is for a location that is the same as or within
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HB 2405 15
1,000 feet of a location that, within the two years immediately preceding
the date of the application, the director denied an application for the same
class of license due to the nature of the use or other concern related to the
location;
(2) unless the applicant is, or will be, entitled to possession of the
premises for which application is made under a lease, rental agreement or
other arrangement for possession of the premises or by virtue of ownership
of the premises; or
(3) if the building is located within 1,000 feet of a school, alcohol or
drug treatment facility, postsecondary educational institution or child care
facility.
(b) The provisions of subsection (a)(3) shall not apply to:
(1) The renewal of a license once granted or apply to licensed
premises located or to be located on land owned by a municipality;
(2) an existing licensed premises on land owned by the state; or
(3) a license in effect and actively doing business before such facility
was in operation.
(c) (1) A cannabis business licensee may move the permanent
location of the licensed premises to any other location in Kansas upon
receiving permission to do so from the director. Any such change in
location shall be in accordance with all requirements of this act and rules
and regulations adopted pursuant thereto.
(2) (A) A cannabis cultivation facility that has obtained an approved
change of location from the director may operate one license at two
geographical locations for the purpose of transitioning operations from one
location to another if:
(i) The total plants cultivated at both locations do not exceed any
plant count limit imposed on the license by this act or any rules and
regulations adopted pursuant thereto;
(ii) the licensed premises of both geographical locations comply with
all surveillance, security and inventory tracking requirements imposed by
this act and any rules and regulations adopted pursuant thereto;
(iii) both the transferring location and the receiving location track all
plants in transition in the seed-to-sale tracking system to ensure proper
tracking for taxation purposes; and
(iv) operation at both geographical locations does not exceed 180
days, except, for good cause shown, the 180-day time period may be
extended for not more than an additional 120 days.
(B) Conduct at either location may be the basis for suspension,
revocation or civil penalty against the licensee.
(d) The distances referred to in this section are to be computed by
direct measurement from the nearest property line of each parcel of land,
using a route of direct pedestrian access.
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HB 2405 16
New Sec. 14. (a) Each licensed cannabis business shall keep a
complete set of all records necessary to show fully the business
transactions of the licensee for a period of the current tax year and the
three immediately preceding tax years. The director may require any
licensed cannabis business to furnish such information as the director
deems necessary for the proper administration of this act and may require
an audit to be made of the books of account and records on such occasions
as the director deems necessary by an auditor to be selected by the director
who shall likewise have access to all books and records of the licensee.
The expense of any audit shall be paid by the licensee.
(b) The licensed premises, including any places of storage where
cannabis or cannabis products are cultivated, stored, manufactured, tested
or sold shall be subject to inspection by the director during all business
hours and other times of apparent activity, for the purpose of inspection or
investigation. Examination of any inventory or books and records required
to be kept by a licensee shall only be conducted during business hours.
When any part of the licensed premises consists of a locked area, such area
shall be made available for inspection without delay upon request by the
director.
New Sec. 15. (a) Except as otherwise provided, a license issued
pursuant to this act is not transferable. Nothing in this section shall be
construed to affect any change in permanent location of a cannabis
business licensee.
(b) For a transfer of ownership involving a controlling beneficial
owner, a licensee shall apply to the director for approval of such transfer.
In determining whether to approve such application, the director shall
consider only whether the requirements of this act and rules and
regulations adopted pursuant thereto are met.
(c) For a transfer of ownership involving a passive beneficial owner,
the licensee shall notify the director within 45 days after such transfer is
effective.
(d) A person that becomes a controlling beneficial owner of a
publicly traded corporation that is a cannabis business licensee or that
becomes a beneficial owner, through direct or indirect ownership of a
controlling beneficial owner, of 10% or more of a cannabis business
licensee that is a publicly traded corporation shall disclose the information
required by section 17, and amendments thereto, and apply to the director
for a finding of suitability or exemption from a finding of suitability
pursuant to section 18, and amendments thereto, within 45 days after
becoming such a controlling beneficial owner. A cannabis business
licensee shall notify each person that is subject to this subsection of its
requirements as soon as such licensee becomes aware of the beneficial
ownership triggering the requirement, provided that the obligations of the
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HB 2405 17
person subject to this subsection are independent of, and unaffected by, the
such licensee's failure to give the notice.
New Sec. 16. (a) Any individual with day-to-day operational control
over a cannabis business licensee shall be a resident of this state.
(b) A cannabis business licensee or a controlling beneficial owner in
such licensee shall appoint and continuously maintain a registered agent in
this state. A licensee shall inform the director of any change in the
registered agent within 10 days after such change is effective.
New Sec. 17. (a) An applicant for a cannabis business license shall
disclose to the director:
(1) A complete and accurate organizational chart of the applicant
cannabis business reflecting the identity and ownership percentages of its
controlling beneficial owners;
(2) information regarding controlling beneficial owners of the
applicant cannabis business if the controlling beneficial owner is:
(A) A publicly traded corporation, the applicant shall disclose the
controlling beneficial owner's managers and any beneficial owners that
directly or indirectly beneficially own 10% or more of the owner's interest
in the controlling beneficial owner;
(B) not a publicly traded corporation and is not a qualified private
fund, the applicant shall disclose the controlling beneficial owner's
managers and any beneficial owners that directly or indirectly beneficially
own 10% or more of the owner's interest in the controlling beneficial
owner;
(C) a qualified private fund, the applicant shall disclose a complete
and accurate organizational chart of the qualified private fund reflecting
the identity and ownership percentages of the qualified private fund's
managers, investment advisers, investment adviser representatives, any
trustee or equivalent and any other person that controls the investment in,
or management or operations of, the applicant business; or
(D) an individual, the applicant shall disclose such individual's
identifying information;
(3) a person that is both a passive beneficial owner and an indirect
financial interest holder in the application business; and
(4) any indirect financial interest holder that holds two or more
indirect financial interests in the applicant cannabis business or that is
contributing over 50% of the operating capital of the applicant cannabis
business.
(b) The director may request that the applicant disclose the following:
(1) Each beneficial owner and affiliate of the applicant cannabis
business or controlling beneficial owner that is not a publicly traded
corporation or a qualified private fund; and
(2) each affiliate of a controlling beneficial owner that is a qualified
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HB 2405 18
private fund.
(c) For reasonable cause, the director may require disclosure of:
(1) A complete and accurate list of each nonobjecting beneficial
interest owner of an applicant cannabis business or controlling beneficial
owner that is a publicly traded corporation;
(2) passive beneficial owners of the applicant business, and for any
passive beneficial owner that is not an individual, the members of the
board of directors, general partners, managing members or managers and
10% or more owners of the passive beneficial owner;
(3) a list of each beneficial owner in a qualified private fund that is a
controlling beneficial owner; and
(4) all indirect financial interest holders of the applicant cannabis
business, and for any indirect financial interest holder that is not an
individual and 10% or more beneficial owners of the indirect financial
interest holder.
(d) An applicant that is not a publicly traded corporation shall affirm
under penalty of perjury that it exercised reasonable care to confirm that
its passive beneficial owners, indirect financial interest holders and
qualified institutional investors are not persons prohibited pursuant to
section 10, and amendments thereto, or otherwise restricted from holding
an interest under this act. An applicant's failure to exercise reasonable care
is a basis for denial, fine, suspension, revocation or other sanction by the
director.
(e) An applicant that is a publicly traded corporation shall affirm
under penalty of perjury that it exercised reasonable care to confirm that
its nonobjecting passive beneficial owners, indirect financial interest
holders and qualified institutional investors are not persons prohibited
pursuant to section 10, and amendments thereto, or otherwise restricted
from holding an interest under this act. An applicant's failure to exercise
reasonable care is a basis for denial, fine, suspension, revocation or other
sanction by the director.
(f) Nothing in this section shall be construed to restrict the director's
ability to reasonably request information or records for any license
renewal or as part of any other investigation following initial licensure of a
cannabis business.
New Sec. 18. (a) Except as otherwise provided in section 15, and
amendments thereto, any person intending to become a controlling
beneficial owner of any cannabis business shall first submit a request to
the director for a finding of suitability or an exemption from an otherwise
required finding of suitability.
(b) For reasonable cause, any other person that was disclosed or that
should have been disclosed pursuant to section 17, and amendments
thereto, including, but not limited to, a passive beneficial owner, shall
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HB 2405 19
submit a request for a finding of suitability.
(c) Failure to provide all requested information in connection with a
request for a finding of suitability is grounds for denial of such finding of
suitability.
(d) Failure to receive all required findings of suitability is grounds for
denial of a license or for suspension, revocation or other sanction against
the licensee by the director. For initial applications, the finding of
suitability shall be required prior to submitting the application for
licensure.
(e) Any person required to obtain a finding of suitability shall submit
an application for such finding in such form and manner as prescribed by
the director. Each suitability application shall be verified by the oath or
affirmation of the persons prescribed by the director.
(f) A person requesting a finding of suitability shall provide the
director with a deposit to cover the direct and indirect costs of any
investigation necessary to determine any required finding of suitability,
subject to any rules and regulations regarding such deposits adopted
pursuant to this act.
(g) When determining whether a person is suitable or unsuitable for
licensure, the director may consider the person's criminal history records,
licensing records or financial records.
(h) A person that would otherwise be required to obtain a finding of
suitability may request an exemption from the director pursuant to rules
and regulations adopted pursuant to this act.
(i) Absent reasonable cause, the director shall approve or deny a
request for a finding of suitability within 120 days from the date of
submission of the request for such finding.
(j) The director may deny, suspend, revoke or impose a civil penalty
against a license issued under this act if the director finds the licensee's
controlling beneficial owner, passive beneficial owner or indirect financial
interest holder to be unsuitable pursuant to this section.
New Sec. 19. The director, any employee of the division, any entity
under contract with the director and any employee or agent thereof shall
not make public any information reported to or collected by the director
under this act containing any individualized data, information or records
related to an applicant for a license or a licensee or the operation of any
licensee, including sales information, leases, business organization
records, financial records, tax returns, credit reports, cultivation
information, laboratory testing results and security information or plans.
Such information shall be kept confidential and may be used only for
purposes authorized by this act. The provisions of this subsection shall
expire on July 1, 2030, unless the legislature reviews and reenacts such
provisions in accordance with K.S.A. 45-229, and amendments thereto,
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HB 2405 20
prior to July 1, 2030.
New Sec. 20. (a) A cannabis cultivation facility license may be issued
only to a person who cultivates cannabis for sale and distribution to
licensed cannabis retailers, cannabis product manufacturers, hospitality
and sales businesses or other cannabis cultivation facilities.
(b) A cannabis cultivation facility shall track the cannabis it cultivates
from seed or immature plant to wholesale purchase.
(c) A cannabis cultivation facility may provide a sample of cannabis
and cannabis concentrate to a licensed cannabis testing facility. A cannabis
cultivation facility shall maintain records of cannabis provided to a
cannabis testing facility, the identity of such facility and the test results.
(d) No cannabis or cannabis products shall be consumed on the
premises of a cannabis cultivation facility.
(e) Notwithstanding any other provision of law to the contrary, a
cannabis cultivation facility may compensate its employees using
performance-based incentives, including sales-based performance-based
incentives.
(f) A cannabis cultivation facility shall only obtain cannabis seeds or
immature plants from its own cannabis supply or cannabis that is properly
transferred from another licensed cannabis business pursuant to the
inventory tracking requirements of this act.
New Sec. 21. (a) The director shall create a licensure class system for
cannabis cultivation facility licenses. The classifications may be based
upon:
(1) Square footage of the facility;
(2) lights, lumens or wattage;
(3) lit canopy;
(4) the number of cultivating plants;
(5) any other reasonable metrics; or
(6) any combination thereof.
(b) The director shall create a fee structure for the licensure class
system.
(c) The director may establish limitations on cannabis production
through one or more of the following methods, including placing or
modifying a limit on the:
(1) Number of licenses issued, by class or overall, but in placing or
modifying such limits, the director shall consider the reasonable
availability of new licenses after a limit is established or modified;
(2) amount of cannabis production permitted by a cannabis
cultivation facility license or class of licenses based upon some reasonable
metric or set of metrics, including, but not limited to, the metrics described
in subsection (a), previous months' sales, pending sales or other reasonable
metrics as determined by the director; and
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HB 2405 21
(3) aggregate amount of cannabis production by cannabis cultivation
facility licensees based upon some reasonable metric or set of metrics,
including, but not limited to, the metrics described in subsection (a), as
determined by the director.
(d) Notwithstanding any other provision of this act, in considering
any limitations or modifications to limitations imposed under this section,
the director, in addition to any other relevant considerations, shall:
(1) Consider the total current and anticipated demand for cannabis
and cannabis products in this state; and
(2) attempt to minimize the market for unlawful cannabis.
New Sec. 22. (a) The director may issue a centralized distribution
permit to a cannabis cultivation facility authorizing temporary storage on
the licensed premises of cannabis and cannabis products received from a
licensed cannabis business for the sole purpose of transfer to the permit
holder's commonly owned licensed cannabis retailer.
(b) A cannabis cultivation facility shall not store cannabis or cannabis
products pursuant to a centralized distribution permit for more than 90
days. A cannabis cultivation facility shall not accept any cannabis or
cannabis products pursuant to a centralized distribution permit unless the
cannabis and cannabis products are packaged and labeled for sale to a
consumer as required by rules and regulations adopted pursuant to this act.
(c) All cannabis and cannabis products stored and prepared for
transport on the licensed premises of a cannabis cultivation facility
pursuant to a centralized distribution permit shall only be transferred to a
cannabis cultivation facility's commonly owned licensed cannabis retailer.
All transfers of cannabis and cannabis products by a cannabis cultivation
facility pursuant to a centralized distribution permit shall be without
consideration.
(d) All cannabis cultivation facility security and surveillance
requirements shall apply to the activities conducted pursuant to the
privileges of a centralized distribution permit.
(e) A cannabis cultivation facility shall track all cannabis and
cannabis products possessed pursuant to a centralized distribution permit
in the seed-to-sale tracking system from the point such concentrate and
products are received from a licensed cannabis business to the point of
transfer to a cannabis cultivation facility licensee's commonly owned
licensed cannabis retailer.
(f) For purposes of this section, the term "commonly owned" means
licenses that have an ownership structure with at least one individual with
a minimum of 5% ownership in each license.
New Sec. 23. (a) A cannabis products manufacturer license may be
issued only to a person who manufactures cannabis products pursuant to
the terms and conditions of this act for sale and distribution to licensed
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HB 2405 22
cannabis retailers, hospitality and sales businesses or other cannabis
products manufacturers.
(b) A cannabis products manufacturer may cultivate cannabis if the
licensee obtains a cannabis cultivation facility license, or may purchase
cannabis from a licensed cannabis cultivation facility. A cannabis products
manufacturer shall track all cannabis from the point such cannabis is either
transferred from the licensee's cannabis cultivation facility or the point
when such cannabis is delivered to the cannabis products manufacturer
from a licensed cannabis cultivation facility to the point of transfer to a
licensed cannabis business.
(c) A cannabis products manufacturer shall not:
(1) Add any cannabis to a food product where the manufacturer of the
food product holds a trademark to the food product's name, except that a
cannabis products manufacturer may use a trademarked food product if the
cannabis products manufacturer uses the product as a component or as part
of a recipe and where the cannabis products manufacturer does not state or
advertise to the consumer that the final cannabis product contains a
trademarked food product;
(2) intentionally or knowingly label or package a cannabis product in
a manner that would cause a reasonable consumer confusion as to whether
the cannabis product was a trademarked food product; or
(3) label or package a product in a manner that violates any federal
trademark law or regulation.
(d) Cannabis products shall be prepared on the licensed premises, and
such premises shall:
(1) Be used exclusively for the manufacture and preparation of
cannabis or cannabis products; and
(2) meet the sanitary standards for cannabis product preparation in
rules and regulations adopted pursuant to this act.
(e) (1) All cannabis products shall be packaged, sealed and
conspicuously labeled in compliance with rules and regulations adopted
pursuant to this act.
(2) No standard symbol requirements shall apply to a multi-serving
liquid cannabis product that is impracticable to mark, if the product
complies with all packaging requirements for multi-serving edibles and
complies with the following enhanced requirements to reduce the risk of
accidental ingestion. A multi-serving liquid shall be packaged in:
(A) A structure that uses a single mechanism to achieve both child-
resistance and accurate pouring measurement of each liquid serving in
increments equal to or less than 10 milligrams of active
tetrahydrocannabinol per serving, with no more than 100 milligrams of
active tetrahydrocannabinol total per package; and
(B) a manner to ensure that the measurement component is within the
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HB 2405 23
child-resistant cap or closure of the bottle and is not a separate component.
(f) Cannabis and cannabis products shall not be consumed on the
premises of a cannabis products manufacturer.
(g) Notwithstanding any other provision of law to the contrary, a
cannabis products manufacturer may compensate its employees using
performance-based incentives, including sales-based performance-based
incentives.
(h) Except as otherwise provided by law, a cannabis products
manufacturer may provide a sample of cannabis products produced by
such manufacturer to a licensed cannabis testing facility. A cannabis
products manufacturer shall maintain a record of cannabis product samples
provided to a cannabis testing facility, the identity of such facility and the
testing results.
(i) An edible cannabis product may list its ingredients and
compatibility with dietary practices. All edible cannabis products shall be
produced in accordance with the Kansas food, drug and cosmetic act, and
amendments thereto.
New Sec. 24. (a) A cannabis transporter license may be issued only to
a person who provides logistics, distribution, delivery and storage of
cannabis, cannabis products and cannabis waste for one or more licensed
cannabis businesses. Notwithstanding any other provisions of law, a
cannabis transporter license shall not be transferable. A cannabis
transporter shall be responsible for the cannabis, cannabis products and
cannabis waste upon taking control of such cannabis, cannabis products
and cannabis waste.
(b) A licensed cannabis business that distributes cannabis and
cannabis products cultivated or produced by such licensee shall not be
required to hold a cannabis transporter license to transport and distribute
such cannabis and cannabis products.
(c) A cannabis transporter may maintain a licensed premises to
temporarily store and distribute cannabis and cannabis products and to use
as a centralized distribution location. A licensed premises shall satisfy the
same security requirements that are applicable to a cannabis cultivation
facility.
(d) A cannabis transporter shall use the seed-to-sale tracking system
to create shipping manifests documenting the transport of cannabis and
cannabis products.
New Sec. 25. (a) A waste disposal facility may:
(1) Transport and receive cannabis waste to or from one or more
licensed cannabis businesses; and
(2) dispose of cannabis waste received from one or more licensed
cannabis businesses.
(b) All cannabis waste disposed of pursuant to this act shall be
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subject to any rules and regulations adopted by the secretary relating to the
proper disposal of such materials in order to preserve the health and safety
of the public.
(c) All cannabis waste shall be documented and tracked through the
electronic inventory tracking system established under section 7, and
amendments thereto. Such documentation shall include:
(1) Unique identification numbers for inventory lots;
(2) the total weight of the cannabis waste disposed of;
(3) the name of the licensee providing the cannabis waste; and
(4) photographs of the disposed cannabis waste.
New Sec. 26. (a) A hospitality business license may be issued only to
a person who operates a premises in which cannabis and cannabis products
may be consumed in accordance with this act and rules and regulations
adopted pursuant thereto. The director shall maintain a list of all licensed
hospitality businesses in the state and shall publish such list on the website
of the division of alcoholic beverage control.
(b) A hospitality business shall:
(1) Ensure that the display and consumption of cannabis and cannabis
products is not visible from outside the licensed premises;
(2) educate patrons by providing cannabis education materials
regarding the safe consumption of cannabis and cannabis products. Such
materials shall be based on requirements recommended by the cannabis
advisory committee and adopted by the secretary in rules and regulations.
A record of all such materials shall be maintained on the licensed premises
for inspection by the director; and
(3) ensure that, in the event of an emergency requiring the assistance
of law enforcement, emergency medical service providers or other public
safety personnel, all employees and patrons of the hospitality business
cease all consumption of cannabis and related activities until such
emergency ends and the emergency service personnel have exited the
licensed premises.
(c) A hospitality business shall not:
(1) Engage in or permit the sale or exchange for remuneration of
cannabis or cannabis products on the licensed premises;
(2) allow employees who are engaged in the performance of their
duties to consume any cannabis or cannabis products on the licensed
premises;
(3) distribute or allow distribution of free samples of cannabis or
cannabis products on the licensed premises;
(4) allow the consumption of alcoholic liquor on the licensed
premises;
(5) allow any activity for which a license is required under this act on
the licensed premises, including, but not limited to, the cultivation,
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manufacturing or sale of cannabis or cannabis products;
(6) permit the use or consumption of cannabis or cannabis products
by a patron who displays any visible signs of intoxication; or
(7) admit any person who is under 21 years of age onto the licensed
premises.
(d) A hospitality business and employees of such business may
remove an individual from the licensed premises for any reason, including
a patron who displays any visible signs of intoxication.
New Sec. 27. (a) A hospitality and sales business license may be
issued only to a person who operates a premises in which cannabis and
cannabis products may be sold to a patron for consumption on or off the
licensed premises in accordance with this act and rules and regulations
adopted pursuant thereto. The director shall maintain a list of all licensed
hospitality and sales businesses in the state and shall publish such list
available on the website of the division of alcoholic beverage control.
(b) A hospitality and sales business shall:
(1) Track all of cannabis and cannabis products sold by such cannabis
business from the point that such cannabis and cannabis products are
transported from a licensed cannabis retailer, cannabis products
manufacturer or cannabis cultivation facility to the point of sale to a patron
of the hospitality and sales business;
(2) limit a patron to one transaction per day of not more than the
amount of cannabis or cannabis product that may be sold in such
transaction pursuant to limits established by the director;
(3) ensure that all cannabis and cannabis products are properly
packaged and labeled prior to allowing a patron to leave the licensed
premises with such cannabis or cannabis products;
(4) ensure that the display and consumption of cannabis and cannabis
products is not visible from outside of the licensed premises;
(5) educate patrons by providing cannabis education materials
regarding the safe consumption of cannabis and cannabis products. Such
materials shall be based on requirements recommended by the cannabis
advisory committee and adopted by the secretary in rules and regulations.
A record of all such materials shall be maintained on the licensed premises
for inspection by the director; and
(6) ensure that, in the event of an emergency requiring the assistance
of law enforcement, emergency medical service providers or other public
safety personnel, all employees and patrons of the hospitality and sales
business cease all consumption of cannabis and related activities until such
emergency ends and the emergency service personnel have exited the
licensed premises.
(c) A hospitality and sales business may purchase cannabis and
cannabis products from any licensed cannabis retailer, cannabis products
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manufacturer or cannabis cultivation facility.
(d) A hospitality and sales business shall not:
(1) Allow employees who are engaged in the performance of their
duties to consume any cannabis or cannabis products on the licensed
premises;
(2) distribute or allow distribution of free samples of cannabis or
cannabis products on the licensed premises;
(3) sell any cannabis or cannabis products that contain nicotine;
(4) hold a license issued pursuant to the Kansas liquor control act,
K.S.A. 41-101 et seq., and amendments thereto, the club and drinking
establishment act, K.S.A. 41-2601 et seq., and amendments thereto, or the
cereal malt beverage act, K.S.A. 41-2701 et seq., and amendments thereto,
or otherwise allow the consumption of alcoholic liquor on the licensed
premises;
(5) allow any activity for which a license is required under this act on
the licensed premises, including, but not limited to, the cultivation,
manufacturing or sale of cannabis or cannabis products;
(6) sell, serve or permit the use or consumption of cannabis or
cannabis products by a patron who displays any visible signs of
intoxication; or
(7) admit any person who is under 21 years of age onto the licensed
premises.
(e) A hospitality and sales business and employees of such business
may remove an individual from the licensed premises for any reason,
including a patron who displays any visible signs of intoxication.
New Sec. 28. (a) A cannabis retailer license may be issued only to a
person selling cannabis and cannabis products to a patron for consumption
off the licensed premises.
(b) A cannabis retailer may:
(1) Cultivate cannabis for sale on the licensed premises if the licensee
also holds a cannabis cultivation facility license;
(2) purchase cannabis from a licensed cannabis cultivation facility;
(3) purchase cannabis and cannabis products from a licensed cannabis
products manufacturer;
(4) receive an order for the purchase and delivery of cannabis and
cannabis products through an online platform. If an online platform for is
used, such platform shall require the patron purchasing such cannabis or
cannabis product to choose a cannabis retailer prior to viewing the price;
and
(5) sell cannabis and cannabis products to a licensed hospitality and
sales business.
(c) A cannabis retailer shall:
(1) Ensure that all cannabis and cannabis products sold by the
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licensee are packaged and labeled in accordance with this act and rules and
regulations adopted pursuant thereto;
(2) ensure that any display of cannabis concentrate includes the
potency of the cannabis concentrate next to the name of the product;
(3) track all cannabis and cannabis products sold by such cannabis
business from the point that such cannabis and cannabis products are
transported from a licensed cannabis products manufacturer or cannabis
cultivation facility to the point of sale to a patron of the licensee or to a
hospitality and sales business;
(4) only sell cannabis, cannabis products, cannabis accessories,
nonconsumable products such as apparel and cannabis-related products
such as childproof packaging containers;
(5) not permit the consumption of cannabis or cannabis products on
the licensed premises;
(6) not sell or provide free of charge any consumable product,
including, but not limited to, cigarettes, alcoholic liquor or any edible
product that does not contain cannabis;
(7) not sell any cannabis or cannabis products that contain nicotine or
alcoholic liquor; and
(8) not sell cannabis or cannabis products through an online platform
or deliver cannabis or cannabis products to a person not physically present
on the licensed premises, except as otherwise provided.
(d) (1) A cannabis retailer shall not sell more than one ounce of
cannabis or the equivalent in cannabis products, including cannabis
concentrate, to an individual during a single transaction, except nonedible,
nonpsychoactive cannabis products, including ointments, lotions, balms
and other nontransdermal topical products, may be sold in amounts greater
than one ounce, but not to exceed any limits on such sales established by
the secretary in rules and regulations.
(2) Prior to completing a transaction, a cannabis retailer shall verify
that the purchaser has a valid identification card showing the purchaser is
21 years of age or older. If a person who is under 21 years of age presents
a fraudulent proof of age, any action relying on such fraudulent proof of
age shall not be grounds for the revocation or suspension of any license
issued under this act.
(3) If a cannabis retailer or such retailer's employee has reasonable
cause to believe that a person is under 21 years of age and is exhibiting
fraudulent proof of age in an attempt to obtain cannabis or cannabis
product, the retailer or employee may confiscate such fraudulent proof of
age, if possible, and shall, within 72 hours, remit such confiscated proof of
age to an appropriate law enforcement agency. The failure to confiscate
such fraudulent proof of age or to remit to a law enforcement agency
within 72 hours after such confiscation shall not constitute a criminal
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HB 2405 28
offense.
(4) If a cannabis retailer or such retailer's employee has reasonable
cause to believe that a person is under 21 years of age and is exhibiting
fraudulent proof of age in an attempt to obtain cannabis or cannabis
product, the retailer or employee or any law enforcement officer, acting in
good faith and upon probable cause based upon reasonable grounds
therefor, may detain and question such person in a reasonable manner for
the purpose of ascertaining whether the person is guilty of any unlawful
act regarding the purchase of cannabis or cannabis product. The
questioning of a person by an employee or a law enforcement officer shall
not render the licensee, the employee or the law enforcement officer civilly
or criminally liable for slander, false arrest, false imprisonment, malicious
prosecution or unlawful detention.
(e) A cannabis retailer may provide a cannabis sample or cannabis
product sample to a licensed cannabis testing facility. A cannabis retailer
shall maintain a record of the cannabis and cannabis product samples
provided to a cannabis testing facility, the identity of such cannabis testing
facility and the results of the testing.
(f) An automatic dispensing machine that contains cannabis and
cannabis products may only be located on the licensed premises of a
cannabis retailer. Any such machine shall comply with any rules and
regulations adopted pursuant to this act for the operation of such machines.
New Sec. 29. (a) A cannabis testing facility license may be issued
only to a person who performs testing and research on cannabis and
cannabis products.
(b) A person who has an interest in a licensed cannabis testing facility
shall not have any interest in a licensed cannabis retailer, cannabis
cultivation facility or cannabis products manufacturer.
(c) The director shall adopt rules and regulations for acceptable
testing and research practices, including, but not limited to, testing
protocols, standards, quality control analysis, equipment certification and
calibration, chemical identification and other substances used in research
methods.
New Sec. 30. A cannabis business operator license may be issued
only to a person who operates a licensed cannabis business for the owner
of such business and who receives compensation for such performance,
which may include a portion of the profits.
New Sec. 31. (a) (1) A cannabis cultivation facility may provide a
sample of cannabis and cannabis concentrate to managers employed by the
licensee for purposes of quality control and product development. A
cannabis cultivation facility may designate no more than five managers per
month as recipients of quality control and product development samples.
(2) A cannabis products manufacturer may provide a cannabis
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product sample and a cannabis concentrate sample to managers employed
by the licensee for purposes of quality control and product development. A
cannabis products manufacturer may designate no more than five
managers per month as recipients of quality control and product
development samples.
(b) (1) A sample provided by a cannabis cultivation facility shall be
limited to:
(A) One gram of cannabis per batch; and
(B) 1/4 gram of cannabis concentrate per batch, except that 1/2 gram of
cannabis concentrate shall be the limit if the intended use of the final
product is to be used in a device that can be used to deliver cannabis
concentrate in a vaporized form to the person inhaling from the device.
(2) A sample provided by a cannabis products manufacturer shall be
limited to:
(A) One serving size of an edible cannabis product not exceeding 10
milligrams of tetrahydrocannabinol per batch;
(B) one serving size of nonedible cannabis product per batch that has
the applicable equivalent amount of tetrahydrocannabinol, as defined in
rules and regulations adopted pursuant to this act; and
(C) 1/4 gram of cannabis concentrate per batch, except that 1/2 gram of
cannabis concentrate shall be the limit if the intended use of the final
product is to be used in a device that can be used to deliver cannabis
concentrate in a vaporized form to the person inhaling from the device.
(c) A sample shall be labeled and packaged pursuant to rules and
regulations adopted pursuant to this act.
(d) A sample shall be tracked with the seed-to-sale tracking system.
Prior to a manager receiving a sample, a manager shall be designated in
the seed-to-sale tracking system as a recipient of quality control and
product development samples. A manager receiving a sample shall make a
voluntary decision to be tracked in the seed-to-sale tracking system. The
cannabis cultivation facility or cannabis products manufacturer shall
maintain documentation of all samples provided to a manager and shall
make such documentation available to the director upon request.
(e) Prior to a manager receiving a sample, a cannabis cultivation
facility or cannabis products manufacturer shall provide a standard
operating procedure to the manager explaining the requirements of this
section and personal possession limits.
(f) A manager shall not:
(1) Receive more than one ounce total of cannabis or eight grams of
cannabis concentrate samples per month, regardless of the number of
cannabis businesses the manager is associated with; or
(2) provide to or resell the sample to an employee of a cannabis
business, a customer of such business or any other individual.
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HB 2405 30
(g) A cannabis cultivation facility or cannabis products manufacturer
shall not:
(1) Allow a manager to consume the sample on the licensed premises;
or
(2) use the sample as a means of compensation to a manager.
(h) The director may establish additional inventory tracking and
record keeping requirements, including any additional reporting. Such
information shall be maintained on the licensed premises for inspection by
the director upon request.
(i) For purposes of this section, the term "manager" means an
employee of the cannabis cultivation facility or cannabis products
manufacturer who holds an occupational license and is currently
designated as a manager of such cannabis cultivation facility or cannabis
products manufacturer.
New Sec. 32. (a) A cannabis delivery permit may be issued to a
licensed cannabis transporter or a licensed cannabis retailer authorizing the
permit holder to deliver cannabis and cannabis products to individuals.
(b) A cannabis delivery permit shall be valid for one year from the
date such permit is issued and may be renewed annually upon renewal of a
cannabis transporter license or cannabis retailer license.
(c) A cannabis delivery permit shall only be issued to a licensed
cannabis transporter or cannabis retailer, except a cannabis delivery permit
may be applied to more than one licensed cannabis business, provided that
such cannabis businesses are owned by the same person.
(d) A cannabis transporter or cannabis retailer shall not deliver
cannabis or cannabis products to individuals while transporting cannabis
or cannabis products between licensed cannabis businesses in the same
vehicle.
(e) (1) The holder of a cannabis delivery permit shall:
(A) Conduct deliveries on behalf of, and pursuant to a contract with,
a licensed cannabis retailer;
(B) receive only packaged cannabis delivery orders from a licensed
cannabis retailer;
(C) deliver cannabis and cannabis products only by a motor vehicle
that satisfies the requirements of this act and rules and regulations adopted
pursuant thereto;
(D) deliver only to the individual identified in the order and who:
(i) Is 21 years of age or older;
(ii) receives delivery of the cannabis or cannabis products in
accordance with rules and regulations adopted pursuant to this act; and
(iii) possesses an acceptable form of identification; and
(E) deliver only to a private residence at the address provided in the
order.
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(2) The holder of a cannabis delivery permit shall not:
(A) Accept orders on behalf of a cannabis retailer, if the holder is a
cannabis transporter;
(B) deliver cannabis and cannabis products in excess of amounts
established by the director; or
(C) deliver cannabis or cannabis products more than once per day to
the same individual or residence.
(f) Prior to transferring possession of the order to an individual, the
individual delivering the order shall inspect the recipient's identification
and verify that the information provided at the time of the order matches
the name and age on the recipient's identification.
(g) Any individual delivering cannabis and cannabis products shall
hold a valid occupational license and be a current employee of a licensed
cannabis transporter or cannabis retailer that holds a valid cannabis
delivery permit. Such individual shall be certified as having completed
training regarding proof-of-age identification and verification, including
all forms of identification that are deemed acceptable by the director, and
any other training required by the director.
(h) Except as otherwise provided, all requirements applicable to
licensees under this act, including, but not limited to, inventory tracking,
transportation, packaging, labeling and advertising requirements, shall
apply to any person holding a cannabis delivery permit.
(i) For purposes of this section, the term "private residence" means a
private premises where an individual lives, such as a private dwelling
place or place of habitation, and specifically excludes any premises located
at a school or on the campus of a public or private postsecondary
educational institution or any other public property.
New Sec. 33. (a) The director shall charge and collect the following
fees for an application for a cannabis business license:
(1) For a cannabis retailer, cannabis products manufacturer or
cannabis cultivation facility, an amount not to exceed $5,000;
(2) for a cannabis testing facility, cannabis transporter, cannabis
business operator, hospitality business or hospitality and sales business, an
amount not to exceed $1,000; and
(3) for the renewal application for any cannabis business license,
$300.
(b) The director shall charge and collect the following fees for a
license issued to a cannabis business:
(1) For a cannabis retailer, an amount not to exceed $2,000;
(2) for a cannabis products manufacturer or cannabis testing facility,
an amount not to exceed $1,500;
(3) for a cannabis cultivation facility:
(A) For a facility with not more than 1,800 plants, $1,500;
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(B) for a facility with more than 1,800, but not more than 3,600
plants, $2,300;
(C) for a facility with more than 3,600, but not more than 6,000
plants, $3,000;
(D) for a facility with more than 6,000, but not more than 10,200
plants, $4,500;
(E) for a facility with more than 10,200, but not more than 13,800
plants, $6,500; and
(F) for a facility with more than 13,800 plants, $6,500 plus $800 for
every additional 3,600 plants over 13,800;
(4) for a cannabis transporter, an amount not to exceed $4,400;
(5) for a cannabis business operator, an amount not exceed $2,200;
(6) for a hospitality business, an amount not to exceed $1,000; and
(7) for a hospitality and sales business, an amount not to exceed
$2,000.
(c) The director shall charge and collect the following fees for owner
and employee licenses and certifications:
(1) For a finding of suitability:
(A) For an individual, an amount not to exceed $800;
(B) for an entity that is not a publicly traded corporation, an amount
not to exceed $800 plus $800 for each additional individual or entity
associated with the applicant who is subject to a finding of suitability; and
(C) for a publicly traded corporation, an amount not to exceed $6,000
plus $800 for each additional individual or entity associated with the
applicant who is subject to a finding of suitability;
(2) for an owner occupational license, an amount not to exceed $500;
(3) for an employee occupational license, an amount not to exceed
$100; and
(4) for the renewal of an owner or employee occupational license, an
amount not to exceed $75.
(d) The director shall charge and collect the following fees for permit
applications:
(1) For a centralized distribution permit, an amount not to exceed
$20;
(2) for a cannabis delivery permit, an amount not to exceed $2,000;
(3) for an approval of a change of permanent location, an amount not
to exceed $500; and
(4) for an approval of a transfer of ownership, an amount not to
exceed $1,600.
New Sec. 34. (a) Except as otherwise provided in this act, it is
unlawful for a person to:
(1) Purchase, sell, transfer, give away or acquire cannabis or cannabis
products except in accordance with this act;
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(2) consume cannabis or cannabis products in a licensed cannabis
business, except on the licensed premises of a hospitality business or
hospitality and sales business;
(3) have a controlling beneficial ownership, passive beneficial
ownership or indirect financial interest in a cannabis business license that
was not disclosed in accordance with section 17, and amendments thereto,
except banks or savings and loan associations supervised and regulated by
the state or federal government, FHA-approved mortgagees or
stockholders, directors or officers thereof;
(4) exercise any privilege of a cannabis business license, unless such
person holds a valid license to exercise such privileges;
(5) exercise any privilege associated with holding a controlling
beneficial ownership, passive beneficial ownership or indirect financial
interest in a cannabis business license that was not disclosed in accordance
with section 17, and amendments thereto; or
(6) engage in the transfer of ownership of a cannabis business without
prior approval as required by section 15, and amendments thereto.
(b) It is unlawful for a licensed cannabis business to:
(1) Fail to report a transfer required by section 12, and amendments
thereto;
(2) knowingly adulterate or alter, or to attempt to adulterate or alter,
any samples of cannabis or cannabis products for the purpose of
circumventing contaminant testing detection limits or potency testing
requirements;
(3) use advertising material that is misleading, deceptive or false, or
that is designed to appeal to minors;
(4) allow cannabis and cannabis products to be consumed on the
licensed premises, except on the licensed premises of a hospitality
business or hospitality and sales business;
(5) sell or permit the sale of cannabis or cannabis products to a person
under 21 years of age;
(6) have in possession or on the licensed premises any cannabis that
the licensee is not permitted to sell under such license, except cannabis
possessed for purposes of recycling;
(7) have on the licensed premises any cannabis or cannabis
paraphernalia that shows evidence of cannabis having been consumed or
partially consumed, except on the licensed premises of a hospitality
business or hospitality and sales business, or cannabis and cannabis
paraphernalia possessed for purposes of recycling;
(8) abandon a licensed premises or otherwise cease operation without
notifying the director at least 48 hours prior to such cessation and without
accounting for and forfeiting to the director all cannabis and cannabis
products on the licensed premises for destruction;
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(9) offer for sale or solicit an order for cannabis or cannabis products
in person, except on the licensed premises;
(10) purchase cannabis or cannabis products from a person who does
not hold the proper license under this act;
(11) burn or otherwise destroy cannabis, cannabis products or any
other substance containing cannabis for the purpose of evading an
investigation or preventing seizure; or
(12) engage in any act or omission with the intent to evade disclosure,
reporting, record keeping or suitability requirements, including, but not
limited to, the following:
(A) Failing to file a report required under this act or causing or
attempting to cause a person to fail to file such a report;
(B) filing or causing or attempting to cause a person to file a report
required under this act that contains a material omission or misstatement of
fact;
(C) making false or misleading statements regarding the offering of
an owner's interest in a cannabis business; or
(D) structuring any transaction with the intent to evade disclosure,
reporting, record keeping or suitability requirements.
(c) (1) Except as otherwise provided in paragraph (2), a violation of
of this section shall be a class B nonperson misdemeanor.
(2) A violation of subsection (b)(5) shall be a class A nonperson
misdemeanor.
(d) Nothing in this section shall be construed to prohibit the
prosecution of any crime under chapter 21 of the Kansas Statutes
Annotated, and amendments thereto.
New Sec. 35. (a) In addition to or in lieu of any other civil or criminal
penalty as provided by law, the director may refuse to issue or renew a
license, or may revoke or suspend a license for any of the following
reasons:
(1) The person has failed to comply with any provision of the adult
use cannabis regulation act or any rules and regulations adopted pursuant
thereto;
(2) the person has falsified or misrepresented any information
submitted to the director in order to obtain a license; or
(3) the person has violated any of the provisions of section 33, and
amendments thereto.
(b) Upon the final decision of the director to suspend a license for a
period of more than 14 days, the licensee may, prior to the commencement
of such suspension period, submit a petition to the director for permission
to pay a fine in lieu of suspension of such license. Such fine shall be not
less than $500 or more than $100,000. The director may, in the director's
sole discretion, stay the proposed suspension and cause any investigation
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to be made or grant such petition if the director is satisfied that:
(1) The public welfare would not be impaired by permitting the
licensee to operate during the period set for suspension and that the
payment of the fine will achieve the desired disciplinary purposes;
(2) the books and records of the licensee are kept in such a manner
that the loss of sales that the licensee would have suffered had the
suspension gone into effect can be determined with reasonable accuracy;
and
(3) the licensee has not had such license suspended or revoked or had
any suspension stayed by payment of a fine during the two years
immediately preceding the date of the violation that resulted in a final
decision to suspend such license.
(c) Upon payment of a fine pursuant to subsection (b), the director
shall issue an order staying the imposition of the suspension of such
license.
New Sec. 36. (a) Except as provided in subsection (d), the director
shall not be required to cultivate, maintain or preserve any cannabis or
cannabis product owned by or seized from a cannabis business. The
director shall not sell, solicit for sale or otherwise transfer any cannabis or
cannabis products in the possession of the director.
(b) In addition to any other remedies provided by law, any final order
issued by the director imposing a disciplinary action against a licensee
may specify that all or some portion of such licensee's cannabis or
cannabis product does not comply with the requirements of this act or
rules and regulations adopted pursuant thereto and is an illegal controlled
substance. Such order may further specify that the licensee has no interest
in any such cannabis or cannabis product. Except as otherwise provided in
subsections (c) and (d), upon the issuance of such order the director may
direct the destruction of any such cannabis or cannabis products. Any
authorized destruction of cannabis or cannabis products may include the
incidental destruction of any containers, equipment, supplies and other
property associated with such cannabis or cannabis product.
(c) The director shall not direct the destruction of any cannabis or
cannabis products until such time as the order authorizing such destruction
becomes final, subject to the provisions of section 41, and amendments
thereto. Pending final disposition of an order authorizing the destruction of
cannabis or cannabis products, the director shall maintain such cannabis or
cannabis products.
(d) Any county or district attorney who commences an investigation
of a cannabis business shall notify the director of such investigation. If the
director has received such notification from a county or district attorney,
the director shall not direct the destruction of any cannabis or cannabis
products possessed by the cannabis business under investigation until such
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destruction is approved by the notifying county or district attorney.
New Sec. 37. (a) Any person listed in subsections (b)(1), (b)(2) or (b)
(3) may engage or direct a person under 21 years of age to violate the
provisions of the adult use cannabis regulation act in order to develop a
program or system that determines and encourages compliance with the
provisions of such act prohibiting the furnishing or sale of cannabis and
cannabis products to a person under 21 years of age or the consumption of
cannabis or cannabis products by such persons.
(b) No person shall engage or direct a person under 21 years of age to
violate any provision of the adult use cannabis regulation act for purposes
of determining compliance with the provisions of such act unless such
person is:
(1) An officer having authority to enforce the provisions of such act;
(2) an authorized representative of the attorney general or a county or
district attorney; or
(3) a licensee under such act or such licensee's designee pursuant to a
self-compliance program designed to increase compliance with the
provisions of such act if such program has been approved by the director.
New Sec. 38. (a) A financial institution that provides financial
services to any licensed cannabis business shall be exempt from any
criminal law of this state an element of which may be proven by
substantiating that a person provides financial services to a person who
possesses, delivers or manufactures cannabis or cannabis products,
including any of the offenses specified in article 53 or 57 of chapter 21 of
the Kansas Statutes Annotated, and amendments thereto, if the licensed
cannabis business is in compliance with the provisions of this act and all
applicable tax laws of this state.
(b) (1) Upon the request of a financial institution, the director shall
provide to the financial institution the following information:
(A) Whether a person with whom the financial institution is seeking
to do business is a licensed cannabis business;
(B) the name of any controlling beneficial ownership, passive
beneficial ownership or indirect financial interest in such licensed cannabis
business;
(C) an unredacted copy of such person's application for a cannabis
business license, and any supporting documentation, that was submitted by
such person;
(D) if applicable, information relating to sales and volume of
cannabis and cannabis product sold by such person;
(E) whether the person is in compliance with the provisions of this
act and rules and regulations adopted pursuant thereto; and
(F) any past or pending violations of this act or any rules and
regulations adopted pursuant thereto committed by such person, and any
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penalty imposed on such person for such violation.
(2) The director may charge a financial institution a reasonable fee to
cover the administrative cost of providing information requested under this
section.
(c) Information received by a financial institution under subsection
(b) is confidential. Except as otherwise permitted by any other state or
federal law, a financial institution shall not make the information available
to any person other than the customer to whom the information applies and
any trustee, conservator, guardian, personal representative or agent of that
customer.
(d) As used in this section:
(1) "Financial institution" means any bank, trust company, savings
bank, credit union or savings and loan association or any other financial
institution regulated by the state of Kansas, any agency of the United
States or other state with an office in Kansas; and
(2) "financial services" means services that a financial institution is
authorized to provide under chapter nine or article 22 of chapter 17 of the
Kansas Statutes Annotated, and amendments thereto, as applicable.
New Sec. 39. (a) There is hereby established the cannabis business
regulation fund in the state treasury. The director shall administer the
cannabis business regulation fund and shall remit all moneys collected
from the payment of all fees and fines imposed by the director pursuant to
the adult use cannabis regulation act and any other moneys received by or
on behalf of the director pursuant to such act to the state treasurer in
accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury to the credit of the cannabis
business regulation fund. Moneys credited to the cannabis business
regulation fund shall only be expended or transferred as provided in this
section. Expenditures from such fund shall be made in accordance with
appropriation acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the director or the director's
designee.
(b) Moneys in the cannabis business regulation fund shall be used for
the payment or reimbursement of costs related to the regulation and
enforcement of the cultivation, manufacturing, testing, sale and
consumption of cannabis by the division of alcoholic beverage control.
New Sec. 40. (a) The cannabis advisory committee is hereby created
in the department of revenue. The committee shall consist of the
following:
(1) Six members appointed by the governor as follows:
(A) One member who represents employers;
(B) one member who represents employees;
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(C) one member who represents law enforcement;
(D) one member who represents agriculture;
(E) one member who represents persons involved in the treatment of
alcohol and drug addiction; and
(F) one member who engages in academic research on the use or
regulation of cannabis;
(2) two members appointed by the president of the senate;
(3) one member appointed by the minority leader of the senate;
(4) two members appointed by the speaker of the house of
representatives;
(5) one member appointed by the minority leader of the house of
representatives; and
(6) the secretary of revenue or the secretary's designee, who shall
serve as chairperson.
(b) The initial appointments to the committee shall be made on or
before July 31, 2025.
(c) Except for the secretary of revenue, each member of the
committee shall serve from the date of appointment until the committee
ceases to exist, except that members shall serve at the pleasure of the
appointing authority. A vacancy shall be filled in the same manner as the
original appointment.
(d) Each member of the committee shall be paid compensation,
subsistence allowances, mileage and other expenses as provided in K.S.A.
75-3223(e), and amendments thereto.
(e) The committee shall hold its initial meeting not later than 30 days
after the last member of the committee is appointed. The committee may
develop and submit to the secretary and the director any recommendations
related to the implementation and enforcement of this act.
(f) The provisions of this section shall expire on July 1, 2027.
New Sec. 41. (a) On or before July 1, 2026, the secretary of revenue
shall adopt rules and regulations to implement, administer and enforce the
provisions of the adult use cannabis regulation act.
(b) Rules and regulations adopted pursuant to this section shall
include:
(1) Procedures for the issuance, renewal, suspension and revocation
of licenses to operate cannabis businesses;
(2) application, licensing and renewal fees for cannabis businesses;
(3) qualifications for licensure, including, but not limited to, the
requirement for a fingerprint-based criminal history record check for all
controlling beneficial owners, passive beneficial owners, managers,
contractors, employees and other support staff of licensed cannabis
businesses;
(4) establishment of a cannabis and cannabis products independent
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testing and certification program for licensed cannabis businesses
requiring licensees to test cannabis and cannabis products to ensure, at a
minimum, that products sold for human consumption do not contain
contaminants that are injurious to health and to ensure correct labeling;
(5) security requirements for any licensed premises, including, but
not limited to, lighting, physical security, video and alarm requirements
and other procedures for internal control as deemed necessary by the
director to properly administer and enforce the provisions of this act,
including reporting requirements for changes, alterations or modifications
to the licensed premises;
(6) requirements for licensed cannabis businesses to comply with
sustainability protocols and to adopt standard operating procedures to
prevent negative environmental impacts;
(7) labeling requirements for cannabis and cannabis products sold by
a cannabis business, including, but not limited to:
(A) Warning labels;
(B) the amount of tetrahydrocannabinol per serving and the number
of servings per package for cannabis products;
(C) a universal symbol indicating that the package contains cannabis;
and
(D) potency of the cannabis and cannabis products;
(8) health and safety regulations and standards for the cultivation of
cannabis and the manufacture of cannabis products;
(9) the storage and transportation of cannabis and cannabis products;
(10) sanitary requirements for cannabis businesses, including, but not
limited to, sanitary requirements for the preparation of cannabis and
cannabis products;
(11) the reporting and remittance of sales taxes collected by cannabis
retailers and hospitality and sales businsses and the reporting and
remittance of excise taxes paid by cannabis cultivation facilities;
(12) procedures for issuing and appealing citations for violation of
this act and rules and regulations adopted pursuant thereto;
(13) requirements for drivers employed by a licensed cannabis
transporter or a cannabis delivery permit holder, including:
(A) Obtaining and maintaining a valid Kansas driver's license;
(B) insurance requirements;
(C) acceptable manner of transport, storage and delivery of cannabis
and cannabis products; and
(D) requirements for transport vehicles;
(14) the form and structure of agreements between cannabis
businesses and cannabis business operators;
(15) requirements for access to limited access areas by nonescorted
visitors;
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(16) requirements for issuance of a centralized distribution permit for
cannabis cultivation facilities, including, but not limited to, permit
application requirements and privileges and restrictions of a centralized
distribution permit;
(17) development of individual identification cards for individuals
who are controlling beneficial owners and any person operating, working
in or having unescorted access to the limited access areas of the licensed
premises of a cannabis business, including a fingerprint-based criminal
history record check as required under this act;
(18) specification of the acceptable forms of photo identification that
a cannabis retailer may accept when verifying a sale;
(19) requiring that edible cannabis products be clearly identifiable,
when practicable, with a standard symbol indicating that such products
contain cannabis and are not for consumption by minors;
(20) requirements to prevent the sale or diversion of cannabis and
cannabis products to persons under 21 years of age;
(21) conditions under which a cannabis business is authorized to
collect cannabis waste and transfer it to a person for the purposes of reuse
or recycling in accordance with all requirements established by the
department of health and environment pertaining to waste disposal and
recycling. Such conditions shall include:
(A) Record-keeping requirements;
(B) security measures related to the collection and transfer of
cannabis waste;
(C) health and safety requirements, including requirements for the
handling of cannabis waste; and
(D) processes associated with handling cannabis waste, including
destruction of any remaining cannabis in the cannabis waste;
(22) ownership and financial disclosure procedures and requirements,
including requirements for findings of suitability;
(23) requirements for hospitality business and hospitality and sales
business licensees, including, but not limited to:
(A) General insurance liability requirements;
(B) limits on the sale of cannabis and cannabis products by a
hospitality and sales business, except that any such limit shall not be an
amount less than one gram of cannabis flower, 1/4 gram of cannabis
concentrate or a cannabis product containing not more than 10 milligrams
of active tetrahydrocannabinol;
(C) limits on the type of any cannabis and cannabis product
authorized to be sold, including that the cannabis or cannabis product be
meant for consumption on the licensed premises;
(D) requirements for hospitality business and hospitality and sales
business licensees to destroy any unconsumed cannabis and cannabis
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products; and
(24) requirements for hospitality businesses that are mobile facilities,
including, but not limited to:
(A) Registration of vehicles and proper designation of vehicles used
as mobile licensed premises;
(B) surveillance cameras inside the vehicles;
(C) global positioning system tracking and route logging in an
established route manifest system;
(D) ensuring activity is not visible outside of the vehicle; and
(E) proper ventilation within the vehicle.
(c) Rules and regulations adopted pursuant to this section may
include:
(1) Labeling guidelines concerning the total content of
tetrahydrocannabinol per unit of weight;
(2) control of informational and product displays on licensed
premises;
(3) records to be kept by cannabis business licensees and the required
availability of the records;
(4) requirements for inspections, investigations, searches, seizures,
forfeitures and such additional activities as necessary; and
(5) such other rules and regulations necessary for the implementation,
administration and enforcement of this act.
(d) The director shall propose such rules and regulations as necessary
to carry out the intent and purposes of this act. After the hearing on a
proposed rule and regulation has been held as required by law, the director
shall submit the proposed rule and regulation to the secretary of revenue
who, if the secretary approves such rule and regulation, shall adopt the rule
and regulation.
(e) When adopting rules and regulations under this section, the
secretary shall consider standards and procedures that have been found to
be best practices relative to the use and regulation of cannabis.
New Sec. 42. All actions taken by the director under this act shall be
in accordance with the Kansas administrative procedure act and
reviewable in accordance with the Kansas judicial review act.
New Sec. 43. The provisions of the adult use cannabis regulation act
are hereby declared to be severable. If any part or provision of the adult
use cannabis regulation act is held to be void, invalid or unconstitutional,
such part or provision shall not affect or impair any of the remaining parts
or provisions of the adult use cannabis regulation act, and any such
remaining provisions shall continue in full force and effect.
New Sec. 44. The provisions of the adult use cannabis regulation act,
sections 1 through 44, and amendments thereto, shall expire on July 1,
2035.
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New Sec. 45. (a) There is hereby levied a tax at the rate of 15% on
the gross receipts from the sale of cannabis and cannabis products by any
licensed cannabis retailer or licensed hospitality and sales business.
(b) The tax imposed by this section shall be paid by the consumer to
the licensed cannabis retailer or licensed hospitality and sales business. It
shall be the duty of each licensee subject to this section to collect from the
consumer the full amount of such tax, or an amount equal as nearly as
possible or practicable to the average equivalent thereto. Each cannabis
retailer and hospitality and sales business collecting the tax imposed
hereunder shall be responsible for paying over the same to the department
of revenue in the manner prescribed by section 46, and amendments
thereto, and the department of revenue shall administer and enforce the
collection of such tax.
(c) As used in this section, "cannabis retailer" and "hospitality and
sales business" mean the same as defined in section 2, and amendments
thereto.
New Sec. 46. (a) The taxes levied and collected pursuant to section
45, and amendments thereto, shall become due and payable monthly, or on
or before the 25 th day of the month immediately succeeding the month in
which such tax is collected, except that any cannabis business filing an
annual or quarterly return under the Kansas retailers' sales tax act, as
prescribed in K.S.A. 79-3607, and amendments thereto, shall, upon such
conditions as the secretary of revenue may prescribe, pay the tax required
by this act on the same basis and at the same time the cannabis business
pays such retailers' sales tax. Each cannabis business shall make a true
report to the department of revenue, on a form prescribed by the secretary
of revenue, providing such information as may be necessary to determine
the amounts to which any such tax shall apply for all gross receipts derived
from the sale of cannabis and cannabis products for the applicable month
or months, which report shall be accompanied by the tax disclosed thereby.
Records of gross receipts derived from the sale of cannabis and cannabis
products shall be kept separate and apart from the records of other retail
sales made by a cannabis business in order to facilitate the examination of
books and records.
(b) The secretary of revenue or the secretary's authorized
representative shall have the right at all reasonable times during business
hours to make such examination and inspection of the books and records
of a cannabis business as may be necessary to determine the accuracy of
such reports required by this section.
(c) The secretary of revenue is hereby authorized to administer and
collect the tax imposed under section 45, and amendments thereto, and to
adopt such rules and regulations as may be necessary for the efficient and
effective administration and enforcement of the collection thereof.
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Whenever any cannabis business liable to pay the tax imposed by section
45, and amendments thereto, refuses or neglects to pay the same, the
amount, including any penalty, shall be collected in the manner prescribed
for the collection of the retailers' sales tax by K.S.A. 79-3617, and
amendments thereto.
(d) The secretary of revenue shall remit all revenue collected under
the provisions of this act to the state treasurer in accordance with the
provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of
each such remittance, the state treasurer shall deposit the entire amount in
the state treasury to the credit of the state general fund.
(e) Whenever, in the judgment of the secretary of revenue, it is
necessary, in order to secure the collection of any tax, penalties or interest
due, or to become due, under the provisions of this act, the secretary may
require any person subject to such tax to file a bond with the director of
taxation under conditions established by and in such form and amount as
prescribed by rules and regulations adopted by the secretary.
(f) The amount of tax imposed by this act shall be assessed within
three years after the return is filed, and no proceedings in court for the
collection of such taxes shall be initiated after the expiration of such
period except in the cases of fraud. In the case of a false or fraudulent
return with intent to evade tax, the tax may be assessed or a proceeding in
court for collection of such tax may be initiated at any time, within two
years from the discovery of such fraud. No refund or credit shall be
allowed by the director after three years from the date of payment of the
tax as provided in this act unless before the expiration of such period a
claim therefor is filed by the taxpayer. No suit or action to recover on any
claim for refund shall be commenced until after the expiration of six
months from the date of filing a claim therefor with the director. Before
the expiration of time prescribed in this section for the assessment of
additional tax or the filing of a claim for refund, the director is hereby
authorized to enter into an agreement in writing with the taxpayer
consenting to the extension of the periods of limitations for the assessment
of tax or for the filing of a claim for refund, at any time prior to the
expiration of the periods of limitations. The period so agreed upon may be
extended by subsequent agreements in writing made before the expiration
of the period previously agreed upon.
New Sec. 47. (a) On or before the 25 th day of each calendar month,
every cannabis business subject to the provisions of this act shall make a
return to the director of taxation upon forms prescribed and furnished by
the director, stating:
(1) The name and address of the cannabis business;
(2) the total amount of gross sales subject to the tax imposed by
section 45, and amendments thereto, during the preceding calendar month;
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and
(3) any other pertinent information the director requires.
(b) At the time of making the return, the person making the return
shall pay to the director of taxation the amount of tax levied by section 45,
and amendments thereto, as applicable to the person submitting the return.
The director of taxation may extend the time for submitting returns and
paying the tax for any period not to exceed 60 days, under rules and
regulations adopted by the secretary of revenue.
New Sec. 48. (a) If any taxpayer fails to pay the tax levied by section
45, and amendments thereto, at the time required by or under the
provisions of section 46, and amendments thereto, there shall be added to
the unpaid balance of the tax, interest at the rate per month prescribed by
K.S.A. 79-2968(a), and amendments thereto, from the date the tax was due
until paid.
(b) If any taxpayer due to negligence or intentional disregard fails to
file a return or pay the tax due at the time required by or under the
provisions of section 46, and amendments thereto, there shall be added to
the tax a penalty in an amount equal to 10% of the unpaid balance of tax
due.
(c) If any person fails to make a return, or to pay any tax, within six
months from the date the return or tax was due, except in the case of an
extension of time granted by the secretary of revenue or the secretary's
designee, there shall be added to the tax due a penalty equal to 25% of the
unpaid balance of such tax due.
(d) If any taxpayer fails to file a return or pay the tax that is due at the
time required by or under the provisions of this act, there shall be added to
the tax an additional amount equal to 1% of the unpaid balance of the tax
due for each month or fraction thereof during which such failure
continues, not exceeding 24% in the aggregate, plus interest at the rate
prescribed by K.S.A. 79-2968(a), and amendments thereto, from the date
the tax was due until paid. Notwithstanding the foregoing, in the event an
assessment is issued following a field audit for any period for which a
return was filed by the taxpayer and all of the tax was paid pursuant to
such return, a penalty shall be imposed for the period included in the
assessment in an amount of 1% per month not exceeding 10% of the
unpaid balance of tax due shown in the notice of assessment. If, after
review of a return for any period included in the assessment, the secretary
or secretary's designee determines that the underpayment of tax was due to
the failure of the taxpayer to make a reasonable attempt to comply with the
provisions of this act, such penalty shall be imposed for the period
included in the assessment in the amount of 25% of the unpaid balance of
tax due.
(e) If any taxpayer, with fraudulent intent, fails to pay any tax or
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make, render or sign any return, or to supply any information, within the
time required by or under the provisions of section 46, and amendments
thereto, there shall be added to the tax a penalty in an amount equal to
50% of the unpaid balance of tax due.
(f) Penalty or interest applied under the provisions of subsections (a)
and (d) shall be in addition to the penalty added under any other provisions
of this section, but the provisions of subsections (b) and (c) shall be
mutually exclusive of each other.
(g) Whenever the secretary of revenue or the secretary's designee
determines that the failure of the taxpayer to comply with the provisions of
subsections (b) and (c) was due to reasonable causes, the secretary or the
secretary's designee may waive or reduce any of the penalties and may
reduce the interest rate to the underpayment rate prescribed and
determined for the applicable period under section 6621 of the federal
internal revenue code as in effect on January 1, 2025, upon making a
record of the reasons therefor.
(h) In addition to all other penalties provided by this section, any
person who willfully fails to make a return or to pay any tax levied by
section 45, and amendments thereto, who makes a false or fraudulent
return, fails to keep any books or records necessary to determine the
accuracy of the person's reports, who willfully violates any regulations of
the secretary of revenue, for the enforcement and administration of the
provisions of this act, who aids and abets another in attempting to evade
the payment of any tax levied by section 45, and amendments thereto, or
who violates any other provision of this act shall, upon conviction thereof,
be fined not less than $100 nor more than $1,000, be imprisoned in the
county jail not less than one month nor more than six months, or be both
so fined and imprisoned, in the discretion of the court.
(i) The director of taxation or the director of alcoholic beverage
control may enjoin any person from engaging in business as a cannabis
business when the cannabis business is in violation of any of the
provisions of this act and shall be entitled in any proceeding brought for
that purpose to have an order restraining the person from engaging in
business as a cannabis business. No bond shall be required for any such
restraining order or for any temporary or permanent injunction issued in
that proceeding.
(j) If a cannabis business violates any of the provisions of this act, the
director of alcoholic beverage control may suspend or revoke the license
of such cannabis business or may impose a civil fine on the licensee or
permit holder in accordance with section 18, and amendments thereto.
(k) The provisions of K.S.A. 75-5133, 79-3605, 79-3609, 79-3610,
79-3611, 79-3612, 79-3613, 79-3615, 79-3617 and 79-3619, and
amendments thereto, relating to enforcement, collection and
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administration, insofar as practicable, shall have full force and effect with
respect to taxes levied by section 45, and amendments thereto. As used in
such statutes and applied to this act, "director" means the director of
taxation. The provisions of K.S.A. 74-2422, 74-2425, 74-2426 and 74-
2427, and amendments thereto, relating to the approval of rules and
regulations, and the adoption of uniform rules and regulations for such
hearings and for appeals from orders of the director of taxation and
prescribing the duties of county attorneys with respect to such appeals,
insofar as practicable, shall have full force and effect with respect to taxes
levied by, and proceedings under, the provisions of this act.
New Sec. 49. Whenever the director of alcoholic beverage control
issues a cannabis retailer license, the director of alcoholic beverage control
shall promptly notify the director of taxation of such issuance. The notice
shall include the name of the licensee and the address of the licensed
premises. Whenever the director of alcoholic beverage control revokes or
suspends any such license or whenever any such license expires, the
director of alcoholic beverage control shall likewise notify the director of
taxation.
New Sec. 50. The director of taxation shall administer the provisions
of sections 45 through 50, and amendments thereto. The secretary of
revenue shall adopt rules and regulations necessary to carry out the
provisions and intent of sections 45 through 50, and amendments thereto.
The director of taxation shall appoint such agents and employees as the
secretary may deem necessary for the proper enforcement and
administration of such sections. When, in the judgment of the director of
taxation, it is necessary in order to secure the collection of any such tax,
penalties or interest due thereon, or to become due under such sections, the
director may require any person subject to such tax to file a bond with the
director in such form and amount as the director may prescribe.
Sec. 51. K.S.A. 21-5703 is hereby amended to read as follows: 21-
5703. (a) It shall be unlawful for any person to manufacture any controlled
substance or controlled substance analog.
(b) Violation or attempted violation of subsection (a) is a:
(1) Drug severity level 2 felony, except as provided in subsections (b)
(2) and (b)(3);
(2) drug severity level 1 felony if:
(A) The controlled substance is not methamphetamine, as defined by
K.S.A. 65-4107(d)(3) or (f)(1), and amendments thereto, or an analog
thereof;
(B) the controlled substance is not a fentanyl-related controlled
substance; and
(C) the offender has a prior conviction for unlawful manufacturing of
a controlled substance under this section, K.S.A. 65-4159, prior to its
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repeal, K.S.A. 2010 Supp. 21-36a03, prior to its transfer, or a substantially
similar offense from another jurisdiction and the substance was not
methamphetamine, as defined by K.S.A. 65-4107(d)(3) or (f)(1), and
amendments thereto, or an analog thereof, in any such prior conviction;
and
(3) drug severity level 1 felony if the controlled substance is
methamphetamine, as defined by K.S.A. 65-4107(d)(3) or (f)(1), and
amendments thereto, or an analog thereof, or is a fentanyl-related
controlled substance.
(c) The provisions of K.S.A. 21-5301(d), and amendments thereto,
shall not apply to a violation of attempting to unlawfully manufacture any
controlled substance or controlled substance analog pursuant to this
section.
(d) For persons arrested and charged under this section, bail shall be
at least $50,000 cash or surety, and such person shall not be released upon
the person's own recognizance pursuant to K.S.A. 22-2802, and
amendments thereto, unless the court determines, on the record, that the
defendant is not likely to re-offend, the court imposes pretrial supervision,
or the defendant agrees to participate in a licensed or certified drug
treatment program.
(e) The sentence of a person who violates this section shall not be
subject to statutory provisions for suspended sentence, community service
work or probation.
(f) The sentence of a person who violates this section, K.S.A. 65-
4159, prior to its repeal or K.S.A. 2010 Supp. 21-36a03, prior to its
transfer, shall not be reduced because these sections prohibit conduct
identical to that prohibited by K.S.A. 65-4161 or 65-4163, prior to their
repeal, K.S.A. 2010 Supp. 21-36a05, prior to its transfer, or K.S.A. 21-
5705, and amendments thereto.
(g) The provisions of this section shall not apply to a cannabis
cultivation facility or cannabis products manufacturer licensed pursuant
to the adult use cannabis regulation act, section 1 et seq., and amendments
thereto, that is producing cannabis, as defined in section 2, and
amendments thereto, when used for acts authorized by the adult use
cannabis regulation act, section 1 et seq., and amendments thereto.
Sec. 52. K.S.A. 2024 Supp. 21-5705 is hereby amended to read as
follows: 21-5705. (a) It shall be unlawful for any person to distribute or
possess with the intent to distribute any of the following controlled
substances or controlled substance analogs thereof:
(1) Opiates, opium or narcotic drugs, or any stimulant designated in
K.S.A. 65-4107(d)(1), (d)(3) or (f)(1), and amendments thereto;
(2) any depressant designated in K.S.A. 65-4105(e), 65-4107(e), 65-
4109(b) or (c) or 65-4111(b), and amendments thereto;
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(3) any stimulant designated in K.S.A. 65-4105(f), 65-4107(d)(2), (d)
(4), (d)(5) or (f)(2) or 65-4109(e), and amendments thereto;
(4) any hallucinogenic drug designated in K.S.A. 65-4105(d), 65-
4107(g) or 65-4109(g), and amendments thereto;
(5) any substance designated in K.S.A. 65-4105(g) or 65-4111(c), (d),
(e), (f) or (g), and amendments thereto;
(6) any anabolic steroids as defined in K.S.A. 65-4109(f), and
amendments thereto; or
(7) any substance designated in K.S.A. 65-4105(h), and amendments
thereto.
(b) It shall be unlawful for any person to distribute or possess with
the intent to distribute a controlled substance or a controlled substance
analog designated in K.S.A. 65-4113, and amendments thereto.
(c) It shall be unlawful for any person to cultivate any controlled
substance or controlled substance analog listed in subsection (a).
(d) (1) Except as provided further, violation of subsection (a) is a:
(A) Drug severity level 4 felony if the quantity of the material was
less than 3.5 grams;
(B) drug severity level 3 felony if the quantity of the material was at
least 3.5 grams but less than 100 grams;
(C) drug severity level 2 felony if the quantity of the material was at
least 100 grams but less than 1 kilogram; and
(D) drug severity level 1 felony if the quantity of the material was 1
kilogram or more.
(2) Except as provided further, violation of subsection (a) with
respect to material containing any quantity of marijuana, or an analog
thereof, is a:
(A) Drug severity level 4 felony if the quantity of the material was
less than 25 grams;
(B) drug severity level 3 felony if the quantity of the material was at
least 25 grams but less than 450 grams;
(C) drug severity level 2 felony if the quantity of the material was at
least 450 grams but less than 30 kilograms; and
(D) drug severity level 1 felony if the quantity of the material was 30
kilograms or more.
(3) Except as provided further, violation of subsection (a) with
respect to material containing any quantity of a fentanyl-related controlled
substance, heroin as defined by K.S.A. 65-4105(c)(12), and amendments
thereto, or methamphetamine as defined by K.S.A. 65-4107(d)(3) or (f)(1),
and amendments thereto, or an analog thereof, is a:
(A) Drug severity level 4 felony if the quantity of the material was
less than 1 gram;
(B) drug severity level 3 felony if the quantity of the material was at
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HB 2405 49
least 1 gram but less than 3.5 grams;
(C) drug severity level 2 felony if the quantity of the material was at
least 3.5 grams but less than 100 grams; and
(D) drug severity level 1 felony if the quantity of the material was
100 grams or more.
(4) Except as provided further, violation of subsection (a) with
respect to material containing any quantity of a controlled substance
designated in K.S.A. 65-4105, 65-4107, 65-4109 or 65-4111, and
amendments thereto, or an analog thereof, distributed by dosage unit, is a:
(A) Drug severity level 4 felony if the number of dosage units was
fewer than 10;
(B) drug severity level 3 felony if the number of dosage units was at
least 10 but fewer than 100;
(C) drug severity level 2 felony if the number of dosage units was at
least 100 but fewer than 1,000; and
(D) drug severity level 1 felony if the number of dosage units was
1,000 or more.
(5) Violation of subsection (a) with respect to material containing any
quantity of a fentanyl-related controlled substance, distributed by dosage
unit, is a:
(A) Drug severity level 4 felony if the number of dosage units was
fewer than 10;
(B) drug severity level 3 felony if the number of dosage units was at
least 10 but fewer than 50;
(C) drug severity level 2 felony if the number of dosage units was at
least 50 but fewer than 250; and
(D) drug severity level 1 felony if the number of dosage units was
250 or more.
(6) For any violation of subsection (a), the severity level of the
offense shall be increased one level if the controlled substance or
controlled substance analog was distributed or possessed with the intent to
distribute on or within 1,000 feet of any school property.
(7) Violation of subsection (b) is a:
(A) Class A person misdemeanor, except as provided in subsection
(d)(7)(B); and
(B) nondrug severity level 7, person felony if the substance was
distributed to or possessed with the intent to distribute to a minor.
(8) Violation of subsection (c) is a:
(A) Drug severity level 3 felony if the number of plants cultivated
was more than 4 but fewer than 50;
(B) drug severity level 2 felony if the number of plants cultivated was
at least 50 but fewer than 100; and
(C) drug severity level 1 felony if the number of plants cultivated was
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100 or more.
(e) In any prosecution under this section, there shall be an inference
of an intent to distribute if such an inference is supported by the facts and
such person possesses the following quantities of controlled substances or
analogs thereof:
(1) 450 grams or more of marijuana;
(2) 3.5 grams or more of a fentanyl-related controlled substance,
heroin or methamphetamine;
(3) 50 dosage units or more containing any quantity of a fentanyl-
related controlled substance;
(4) 100 dosage units or more containing any other controlled
substance; or
(5) 100 grams or more of any other controlled substance.
(f) It shall not be a defense to charges arising under this section that
the defendant:
(1) Was acting in an agency relationship on behalf of any other party
in a transaction involving a controlled substance or controlled substance
analog;
(2) did not know the quantity of the controlled substance or
controlled substance analog; or
(3) did not know the specific controlled substance or controlled
substance analog contained in the material that was distributed or
possessed with the intent to distribute.
(g) The provisions of subsections (a)(4) and (a)(5) shall not apply to:
(1) Any cannabis cultivation facility licensed pursuant to the adult
use cannabis regulation act, section 1 et seq., and amendments thereto, or
any employee or agent thereof, that is growing cannabis for the purpose of
sale as authorized by the adult use cannabis regulation act, section 1 et
seq., and amendments thereto;
(2) any cannabis products manufacturer licensed pursuant to the
adult use cannabis regulation act, section 1 et seq., and amendments
thereto, or any employee or agent thereof, that is manufacturing cannabis
or cannabis products for the purpose of sale or distribution as authorized
by the adult use cannabis regulation act, section 1 et seq., and
amendments thereto;
(3) any cannabis transporter licensed pursuant to the adult use
cannabis regulation act, section 1 et seq., and amendments thereto, or any
employee or agent thereof, that is storing or transporting cannabis as
authorized by the adult use cannabis regulation act, section 1 et seq., and
amendments thereto; or
(4) any hospitality and sales business or cannabis retailer licensed
pursuant to the adult use cannabis regulation act, section 1 et seq., and
amendments thereto, or any employee or agent thereof, that is engaging in
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HB 2405 51
the sale of cannabis and cannabis products in a manner authorized by the
adult use cannabis regulation act, section 1 et seq., and amendments
thereto.
(h) As used in this section:
(1) "Material" means the total amount of any substance, including a
compound or a mixture, which contains any quantity of a controlled
substance or controlled substance analog.
(2) "Dosage unit" means a controlled substance or controlled
substance analog distributed or possessed with the intent to distribute as a
discrete unit, including but not limited to, one pill, one capsule or one
microdot, and not distributed by weight.
(A) For steroids, or controlled substances in liquid solution legally
manufactured for prescription use, or an analog thereof, "dosage unit"
means the smallest medically approved dosage unit, as determined by the
label, materials provided by the manufacturer, a prescribing authority,
licensed health care professional or other qualified health authority.
(B) For illegally manufactured controlled substances in liquid
solution, or controlled substances in liquid products not intended for
ingestion by human beings, or an analog thereof, "dosage unit" means 10
milligrams, including the liquid carrier medium, except as provided in
subsection (g)(2)(C).
(C) For lysergic acid diethylamide (LSD) in liquid form, or an analog
thereof, a dosage unit is defined as 0.4 milligrams, including the liquid
medium.
(3) "Cannabis" means the same as defined in section 2, and
amendments thereto.
Sec. 53. K.S.A. 21-5706 is hereby amended to read as follows: 21-
5706. (a) It shall be unlawful for any person to possess any opiates, opium
or narcotic drugs, or any stimulant designated in K.S.A. 65-4107(d)(1), (d)
(3) or (f)(1), and amendments thereto, or a controlled substance analog
thereof.
(b) It shall be unlawful for any person to possess any of the following
controlled substances or controlled substance analogs thereof:
(1) Any depressant designated in K.S.A. 65-4105(e), 65-4107(e), 65-
4109(b) or (c) or 65-4111(b), and amendments thereto;
(2) any stimulant designated in K.S.A. 65-4105(f), 65-4107(d)(2), (d)
(4), (d)(5) or (f)(2) or 65-4109(e), and amendments thereto;
(3) any hallucinogenic drug designated in K.S.A. 65-4105(d), 65-
4107(g) or 65-4109(g), and amendments thereto;
(4) any substance designated in K.S.A. 65-4105(g) and 65-4111(c),
(d), (e), (f) or (g), and amendments thereto;
(5) any anabolic steroids as defined in K.S.A. 65-4109(f), and
amendments thereto;
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(6) any substance designated in K.S.A. 65-4113, and amendments
thereto; or
(7) any substance designated in K.S.A. 65-4105(h), and amendments
thereto.
(c) (1) Violation of subsection (a) is a drug severity level 5 felony.
(2) Except as provided in subsection (c)(3):
(A) Violation of subsection (b) is a class A nonperson misdemeanor,
except as provided in subparagraph (B); and
(B) violation of subsection (b)(1) through (b)(5) or (b)(7) is a drug
severity level 5 felony if that person has a prior conviction under such
subsection, under K.S.A. 65-4162, prior to its repeal, under a substantially
similar offense from another jurisdiction, or under any city ordinance or
county resolution for a substantially similar offense if the substance
involved was 3, 4-methylenedioxymethamphetamine (MDMA), marijuana
as designated in K.S.A. 65-4105(d), and amendments thereto, or any
substance designated in K.S.A. 65-4105(h), and amendments thereto, or an
analog thereof.
(3) If the substance involved is marijuana, as designated in K.S.A.
65-4105(d), and amendments thereto, or tetrahydrocannabinols, as
designated in K.S.A. 65-4105(h), and amendments thereto, violation of
subsection (b) is a:
(A) Class B nonperson misdemeanor, except as provided in
subparagraphs (B) and, (C) and (D);
(B) class A nonperson misdemeanor if that person has a prior
conviction under such subsection, under K.S.A. 65-4162, prior to its
repeal, under a substantially similar offense from another jurisdiction, or
under any city ordinance or county resolution for a substantially similar
offense; and
(C) drug severity level 5 felony if that person has two or more prior
convictions under such subsection, under K.S.A. 65-4162, prior to its
repeal, under a substantially similar offense from another jurisdiction, or
under any city ordinance or county resolution for a substantially similar
offense.
(d) It shall be an affirmative defense to prosecution under this section
arising out of a person's possession of any cannabidiol treatment
preparation if the person:
(1) Has a debilitating medical condition, as defined in K.S.A. 2022
Supp. 65-6235, and amendments thereto, or is the parent or guardian of a
minor child who has such debilitating medical condition;
(2) is possessing a cannabidiol treatment preparation, as defined in
K.S.A. 2022 Supp. 65-6235, and amendments thereto, that is being used to
treat such debilitating medical condition; and
(3) has possession of a letter, at all times while the person has
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possession of the cannabidiol treatment preparation, that:
(A) Shall be shown to a law enforcement officer on such officer's
request;
(B) is dated within the preceding 15 months and signed by the
physician licensed to practice medicine and surgery in Kansas who
diagnosed the debilitating medical condition;
(C) is on such physician's letterhead; and
(D) identifies the person or the person's minor child as such
physician's patient and identifies the patient's debilitating medical
condition.
(e) If the substance involved is cannabis, as defined in section 2, and
amendments thereto, the provisions of subsections (b) and (c) shall not
apply to any person who is licensed pursuant to the adult use cannabis
regulation act, section 1 et seq., and amendments thereto, whose
possession is authorized by such act.
(f) It shall not be a defense to charges arising under this section that
the defendant was acting in an agency relationship on behalf of any other
party in a transaction involving a controlled substance or controlled
substance analog.
Sec. 54. K.S.A. 21-5707 is hereby amended to read as follows: 21-
5707. (a) It shall be unlawful for any person to knowingly or intentionally
use any communication facility:
(1) In committing, causing, or facilitating the commission of any
felony under K.S.A. 2022 Supp. 21-5703, 21-5705 or 21-5706, and
amendments thereto; or
(2) in any attempt to commit, any conspiracy to commit, or any
criminal solicitation of any felony under K.S.A. 2022 Supp. 21-5703, 21-
5705 or 21-5706, and amendments thereto. Each separate use of a
communication facility may be charged as a separate offense under this
subsection.
(b) Violation of subsection (a) is a nondrug severity level 8,
nonperson felony.
(c) The provisions of this section shall not apply to any person using
communication facilities for those activities authorized by the adult use
cannabis regulation act, section 1 et seq., and amendments thereto.
(d) As used in this section, "communication facility" means any and
all public and private instrumentalities used or useful in the transmission
of writing, signs, signals, pictures or sounds of all kinds and includes
telephone, wire, radio, computer, computer networks, beepers, pagers and
all other means of communication.
Sec. 55. K.S.A. 21-5709 is hereby amended to read as follows: 21-
5709. (a) It shall be unlawful for any person to possess ephedrine,
pseudoephedrine, red phosphorus, lithium metal, sodium metal, iodine,
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anhydrous ammonia, pressurized ammonia or phenylpropanolamine, or
their salts, isomers or salts of isomers with an intent to use the product to
manufacture a controlled substance.
(b) It shall be unlawful for any person to use or possess with intent to
use any drug paraphernalia to:
(1) Manufacture, cultivate, plant, propagate, harvest, test, analyze or
distribute a controlled substance; or
(2) store, contain, conceal, inject, ingest, inhale or otherwise
introduce a controlled substance into the human body.
(c) It shall be unlawful for any person to use or possess with intent to
use anhydrous ammonia or pressurized ammonia in a container not
approved for that chemical by the Kansas department of agriculture.
(d) It shall be unlawful for any person to purchase, receive or
otherwise acquire at retail any compound, mixture or preparation
containing more than 3.6 grams of pseudoephedrine base or ephedrine
base in any single transaction or any compound, mixture or preparation
containing more than nine grams of pseudoephedrine base or ephedrine
base within any 30-day period.
(e) (1) Violation of subsection (a) is a drug severity level 3 felony;
(2) violation of subsection (b)(1) is a:
(A) Drug severity level 5 felony, except as provided in subsection (e)
(2)(B); and
(B) class B nonperson misdemeanor if the drug paraphernalia was
used to cultivate fewer than five marijuana plants;
(3) violation of subsection (b)(2) is a class B nonperson
misdemeanor;
(4) violation of subsection (c) is a drug severity level 5 felony; and
(5) violation of subsection (d) is a class A nonperson misdemeanor.
(f) For persons arrested and charged under subsection (a) or (c), bail
shall be at least $50,000 cash or surety, and such person shall not be
released upon the person's own recognizance pursuant to K.S.A. 22-2802,
and amendments thereto, unless the court determines, on the record, that
the defendant is not likely to reoffend, the court imposes pretrial
supervision or the defendant agrees to participate in a licensed or certified
drug treatment program.
(g) The provisions of subsection (b) shall not apply to any person
licensed pursuant to the adult use cannabis regulation act, section 1 et
seq., and amendments thereto, whose possession of such equipment or
material is used solely to produce or for the administration of cannabis, as
defined in section 2, and amendments thereto, in a manner authorized by
the adult use cannabis regulation act, section 1 et seq., and amendments
thereto.
Sec. 56. K.S.A. 21-5710 is hereby amended to read as follows: 21-
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5710. (a) It shall be unlawful for any person to advertise, market, label,
distribute or possess with the intent to distribute:
(1) Any product containing ephedrine, pseudoephedrine, red
phosphorus, lithium metal, sodium metal, iodine, anhydrous ammonia,
pressurized ammonia or phenylpropanolamine or their salts, isomers or
salts of isomers if the person knows or reasonably should know that the
purchaser will use the product to manufacture a controlled substance or
controlled substance analog; or
(2) any product containing ephedrine, pseudoephedrine or
phenylpropanolamine, or their salts, isomers or salts of isomers for
indication of stimulation, mental alertness, weight loss, appetite control,
energy or other indications not approved pursuant to the pertinent federal
over-the-counter drug final monograph or tentative final monograph or
approved new drug application.
(b) It shall be unlawful for any person to distribute, possess with the
intent to distribute or manufacture with intent to distribute any drug
paraphernalia, knowing or under circumstances where one reasonably
should know that it will be used to manufacture or distribute a controlled
substance or controlled substance analog in violation of K.S.A. 2022 Supp.
21-5701 through 21-5717, and amendments thereto.
(c) It shall be unlawful for any person to distribute, possess with
intent to distribute or manufacture with intent to distribute any drug
paraphernalia, knowing or under circumstances where one reasonably
should know, that it will be used as such in violation of K.S.A. 2022 Supp.
21-5701 through 21-5717, and amendments thereto, except subsection (b)
of K.S.A. 2022 Supp. 21-5706(b), and amendments thereto.
(d) It shall be unlawful for any person to distribute, possess with
intent to distribute or manufacture with intent to distribute any drug
paraphernalia, knowing, or under circumstances where one reasonably
should know, that it will be used as such in violation of subsection (b) of
K.S.A. 2022 Supp. 21-5706(b), and amendments thereto.
(e) (1) Violation of subsection (a) is a drug severity level 3 felony;
(2) violation of subsection (b) is a:
(A) Drug severity level 5 felony, except as provided in subsection (e)
(2)(B); and
(B) drug severity level 4 felony if the trier of fact makes a finding that
the offender distributed or caused drug paraphernalia to be distributed to a
minor or on or within 1,000 feet of any school property;
(3) violation of subsection (c) is a:
(A) Nondrug severity level 9, nonperson felony, except as provided in
subsection (e)(3)(B); and
(B) drug severity level 5 felony if the trier of fact makes a finding that
the offender distributed or caused drug paraphernalia to be distributed to a
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minor or on or within 1,000 feet of any school property; and
(4) violation of subsection (d) is a:
(A) Class A nonperson misdemeanor, except as provided in
subsection (e)(4)(B); and
(B) nondrug severity level 9, nonperson felony if the trier of fact
makes a finding that the offender distributed or caused drug paraphernalia
to be distributed to a minor or on or within 1,000 feet of any school
property.
(f) For persons arrested and charged under subsection (a), bail shall
be at least $50,000 cash or surety, and such person shall not be released
upon the person's own recognizance pursuant to K.S.A. 22-2802, and
amendments thereto, unless the court determines, on the record, that the
defendant is not likely to re-offend, the court imposes pretrial supervision
or the defendant agrees to participate in a licensed or certified drug
treatment program.
(g) The provisions of subsection (c) shall not apply to any person
licensed pursuant to the adult use cannabis regulation act, section 1 et
seq., and amendments thereto, whose distribution or manufacture is used
solely to distribute or produce cannabis, as defined in section 2, and
amendments thereto, in a manner authorized by the adult use cannabis
regulation act, section 1 et seq., and amendments thereto.
(h) As used in this section, "or under circumstances where one
reasonably should know" that an item will be used in violation of this
section, shall include, but not be limited to, the following:
(1) Actual knowledge from prior experience or statements by
customers;
(2) inappropriate or impractical design for alleged legitimate use;
(3) receipt of packaging material, advertising information or other
manufacturer supplied information regarding the item's use as drug
paraphernalia; or
(4) receipt of a written warning from a law enforcement or
prosecutorial agency having jurisdiction that the item has been previously
determined to have been designed specifically for use as drug
paraphernalia.
Sec. 57. K.S.A. 79-5201 is hereby amended to read as follows: 79-
5201. As used in this act article 52 of chapter 79 of the Kansas Statutes
Annotated, and amendments thereto:
(a) "Marijuana" means any marijuana, whether real or counterfeit, as
defined by K.S.A. 2022 Supp. 21-5701, and amendments thereto, which is
held, possessed, transported, transferred, sold or offered to be sold in
violation of the laws of Kansas;
(b) "Controlled substance" means any drug or substance, whether real
or counterfeit, as defined by K.S.A. 2022 Supp. 21-5701, and amendments
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thereto, which that is held, possessed, transported, transferred, sold or
offered to be sold in violation of the laws of Kansas. Such term shall not
include marijuana;
(c)(b) "dealer" means any person who, in violation of Kansas law,
manufactures, produces, ships, transports or imports into Kansas or in any
manner acquires or possesses more than 28 grams of marijuana, or more
than one gram of any controlled substance, or 10 or more dosage units of
any controlled substance which that is not sold by weight;
(d)(c) "domestic marijuana plant" means any cannabis plant at any
level of growth which that is harvested or tended, manicured, irrigated,
fertilized or where there is other evidence that it has been treated in any
other way in an effort to enhance growth;
(d) "marijuana" means any marijuana, whether real or counterfeit,
as defined in K.S.A. 2022 Supp. 21-5701, and amendments thereto, that is
held, possessed, transported, transferred, sold or offered for sale in
violation of the laws of Kansas; and
(e) "cannabis" means the same as defined in section 2, and
amendments thereto.
Sec. 58. K.S.A. 79-5210 is hereby amended to read as follows: 79-
5210. Nothing in this act requires persons registered under article 16 of
chapter 65 of the Kansas Statutes Annotated , and amendments thereto, or
otherwise lawfully in possession of marijuana , cannabis or a controlled
substance to pay the tax required under this act.
Sec. 59. K.S.A. 21-5703, 21-5706, 21-5707, 21-5709, 21-5710, 79-
5201 and 79-5210 and K.S.A. 2024 Supp. 21-5705 and 21-5705a are
hereby repealed.
Sec. 60. This act shall take effect and be in force from and after its
publication in the statute book.
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