AN ACT relating to the regulation of psychoactive substances.

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AN ACT relating to the regulation of psychoactive substances. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. KRS CHAPTER 239 IS ESTABLISHED AND A NEW 3
SECTION THEREOF IS CREATED TO READ AS FOLLOWS: 4
As used in this chapter, unless the context requires otherwise: 5
(1) "Board" means the State Regulated Products Control Board; 6
(2) "Cannabinoid" means a compound found in the hemp plant Cannabis sativa L. 7
from a United States Department of Agriculture sanctioned domestic hemp 8
production program or a Kentucky sanctioned hemp -derived cannabinoid 9
product program; 10
(3) "Cannabis": 11
(a) Means marijuana as defined in Section 23 of this Act when cultivated, 12
harvested, processed, produced, transported, dispensed, distributed, sold, 13
possessed, or used in accordance with this chapter; 14
(b) Includes cannabis products; and 15
(c) Does not include: 16
1. Industrial hemp or industrial hemp products; 17
2. Hemp-derived cannabinoids; and 18
3. Medicinal cannabis as defined in Section 24 of this Act; 19
(4) "Cannabis-infused beverage": 20
(a) Means a properly permitted adult -use cannabinoid liquid product intended 21
for h uman consumption that has intoxicating properties that change the 22
function of the nervous system and results in alterations of perception, 23
cognition, or behavior; 24
(b) Shall not contain more than five (5) milligrams of adult -use cannabinoids 25
per twelve (12) ounce serving, within a twenty percent (20%) variance or a 26
variance established by the department, whichever is lower; and 27
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(c) Shall not include: 1
1. Medicinal cannabis defined in Section 24 of this Act 2
2. Any type of hemp tincture; and 3
3. Any product containing solely nonintoxicating cannabinoids; 4
(5) "Commissioner" means the Commissioner of the Department of Psychoactive 5
Substances; 6
(6) "Cultivating" means planting, growing, and harvesting a plant or crop; 7
(7) "Department" means the Department of Psychoa ctive Substances established in 8
Section 2 of this Act; 9
(8) "Final hemp-derived cannabinoid product": 10
(a) Means any final product derived from hemp that: 11
1. Contains cannabinoids in any form; and 12
2. Is intended for human or animal use through any means of 13
application or administration, such as inhalation, ingestion, or topical 14
application; and 15
(b) Shall not include: 16
1. Hemp cigarettes; 17
2. Hemp cigars; 18
3. Chew, dip, or other smokeless material consisting of hemp leaf 19
material or hemp floral material; and 20
4. Hemp leaf material or floral material teas; 21
(9) "Hemp": 22
(a) Means the plant Cannabis sativa L. and any part of that plant, including the 23
seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, 24
salts, and salts of isomers, whether growing or not, with a total 25
tetrahydrocannabinols concentration, i ncluding tetrahydrocannabinolic 26
acid, concentration of not more than three -tenths of one percent (0.3%) on 27
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a dry weight basis; and 1
(b) Does not include medicinal cannabis as defined in Section 24 of this Act; 2
(10) "Hemp-derived cannabinoid product" means a ny intermediate hemp -derived 3
cannabinoid product or final hemp-derived cannabinoid product; 4
(11) "Hemp products" or "industrial hemp products": 5
(a) Means products derived from, or made by, processing hemp plants or plant 6
parts; and 7
(b) Does not include med icinal cannabis products as defined in Section 24 of 8
this Act; 9
(12) "Industrial hemp" means hemp: 10
(a) Grown for the use of the stalk of the plant, fiber produced from such a stalk, 11
or any other non -cannabinoid derivative, mixture, preparation, or 12
manufacture of such a stalk; 13
(b) Grown for the use of the whole grain, oil, cake, nut, hull, or any other non -14
cannabinoid compound, derivative, mixture, preparation, or manufacture of 15
the seeds of such plant; 16
(c) Grown for purposes of producing microgreens or other edible hemp leaf 17
products intended for human consumption that are derived from an 18
immature hemp plant that is grown from seeds that do not exceed a total 19
tetrahydrocannabinols concentration, including tetrahydrocannabinolic 20
acid, of three -tenths of one pe rcent (0.3%) in the plant on a dry weight 21
basis; 22
(d) That does not enter the stream of commerce and is intended to support 23
hemp research at an institution of higher education or an independent 24
research institute; or 25
(e) Grown for the use of a viable seed o f the plant produced solely for the 26
production or manufacture of any material described in paragraphs (a) 27
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through (d) of this subsection; 1
(13) "Intermediate hemp -derived product" means a hemp -derived cannabinoid 2
product that is: 3
(a) Not yet in the final fo rm or preparation marketed or intended to be used or 4
consumed by a human or animal; or 5
(b) A powder, liquid, tablet, oil, or other product form which is intended or 6
marketed to be mixed, dissolved, formulated, or otherwise added to or 7
prepared with or into any other substance prior to administration or 8
consumption; 9
(14) "Kentucky sanctioned hemp -derived cannabinoid product program" means a 10
state regulatory framework established under this chapter that oversees the legal 11
processing, testing, distribution, an d retail sales of hemp -derived cannabinoid 12
products; 13
(15) "License" means any license issued under this chapter; 14
(16) "Licensee" means any holder of a license issued by the department under this 15
chapter; 16
(17) "Marketing" means promoting or selling a product within the Commonwealth, in 17
another state, or outside of the United States. Marketing includes efforts to 18
advertise and gather information about the needs or preferences of potential 19
consumers or suppliers, but shall not include these actions if they are part of 20
legitimate scholarly research or studies; 21
(18) "Premises" means the land, buildings, and vehicles in which any business 22
regulated by this chapter is operated or performed; 23
(19) "Processing" means converting an agricultural commodity into a marketa ble 24
form; 25
(20) "Regulated adult -use product" means any product meant for human 26
consumption that: 27
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(a) Has intoxicating properties that change the function of the nervous system 1
and results in alterations of perception, cognition, or behavior; 2
(b) May be law fully produced, distributed, sold, given away, and consumed in 3
Kentucky; 4
(c) Includes but is not limited to a solid, liquid, or gas containing cannabinoids, 5
kratom, kava, psychoactive mushrooms, or other lawful adult -use products 6
as determined by the department; 7
(d) Is regulated by the department; 8
(e) Is not an alcoholic beverage as defined by Section 26 of this Act; and 9
(f) Is not an industrial hemp product; 10
(21) "Regulated product" means any product regulated by the department under this 11
chapter, including nonintoxicating products and products not meant for human 12
consumption. Regulated products include regulated adult-use products; 13
(22) "Regulated product business establishment" means a business involved in the 14
regulated products industry that is licensed by the department in this chapter; 15
(23) "THC" means Delta -9 tetrahydrocannabinol, Delta -8 tetrahydrocannabinol, 16
Delta-10 tetrahydrocannabinol, and the optical isomer of these substances; 17
(24) "Total Tetrahydrocannabinol" means the sum of delta -9 tetrahydrocannabinol 18
(delta-9 THC) and 87.7% of the delta -9 tetrahydrocannabinolic acid (THCA) 19
concentration; 20
(25) "University" means an accredited institution of higher ed ucation located in the 21
Commonwealth; and 22
(26) "Wet" has the same meaning as in KRS 241.010. 23
SECTION 2. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 24
READ AS FOLLOWS: 25
(1) There is established within the Public Protection Cabinet the Department of 26
Psychoactive Substances. The department shall be responsible for the oversight, 27
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regulation, and enforcement of the possession, production, processing, testing, 1
packaging, transportation, marketing, sale, and use in the Commonweal th of 2
regulated products and regulated adult -use products. In fulfilling these duties 3
and responsibilities, the department may exercise the powers and duties 4
authorized in this chapter. 5
(2) The department shall administer statutes relating to, and regulate traffic in, 6
regulated products and regulated adult -use products, except that the collection of 7
taxes shall be administered by the Department of Revenue. 8
(3) The department shall be headed by a commissioner appointed by the Governor. 9
The commissioner shall serve for a term of three (3) years and may be 10
reappointed. The commissioner shall have at least five (5) years of demonstrated 11
experience or expertise in the direct management, supervision, and operation of a 12
business. Once appointed, the commissioner ma y be removed during his or her 13
term only for good cause and with appropriate notice. 14
(4) The department shall establish a Regulated Products Control Board, which shall 15
consist of the commissioner of the department and two (2) persons appointed by 16
the secretary of the Public Protection Cabinet with approval of the Governor, one 17
(1) of whom shall be a person with administrative experience in the field of hemp 18
control. One (1) of these persons shall serve as administrator of the Division of 19
Hemp, and the other shall serve as administrator of the Division of Kratom. The 20
commissioner shall serve as the board chair. 21
(5) Specific functions, powers, and duties of the department and the commissioner 22
include but are not limited to: 23
(a) Through the Regulated Products C ontrol Board, promulgating reasonable 24
administrative regulations in accordance with KRS Chapter 13A governing 25
procedures relating to the applications for and granting, denial, or 26
revocation of licenses, the supervision and control of the use, manufacture, 27
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sale, transportation, storage, marketing, and trafficking of regulated 1
products, and all other matters over which the board has jurisdiction; 2
(b) Maintaining records of all licenses and permits issued and revoked within 3
the state. These records shall be cu rrent and shall include the identity of all 4
licensees, including the names of the officers and directors of corporate 5
licensees and the location of all licensed premises; 6
(c) Inspecting or providing for the inspection of any premises where regulated 7
products are cultivated, produced, tested, packaged, transported, or sold; 8
(d) Prescribing forms of applications for licenses and permits under this 9
chapter; 10
(e) Delegating the powers granted in this section to other officers or employees 11
as determined by the commissioner; 12
(f) Exercising the powers and performing the duties relating to the 13
administration of this chapter, including but not limited to budgetary and 14
fiscal matters; 15
(g) Entering into contracts, memoranda of understanding, and agreements to 16
effectuate the policy and purpose of this chapter; 17
(h) Coordinating across state agencies and departments in order to research 18
and study any changes in regulated product use and the impact that 19
regulated product use and the regulated product industries may have on 20
access to regulated products, public health, and public safety; and 21
(i) Issuing guidance and industry advisories. 22
(6) A Division of Hemp, under the supervision of the board, shall administer the laws 23
in relation to traffic in cannabinoids. 24
(7) A Division of Kratom, under the supervision of the board, shall administer the 25
laws in relation to the traffic in kratom. 26
(8) The board may establish additional divisions for controlling regulated products 27
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and regulated adult-use products, under the supervision of the board, if the board 1
deems it necessary to administer the laws relating to the traffic in regulated 2
products and regulated adult-use products. 3
SECTION 3. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 4
READ AS FOLLOWS: 5
(1) The department shall have broad authority to establish the conditions under 6
which regulated products and regulated adult -use products are possessed, 7
produced, processed, tested, packaged, transported, marketed, sold, and used by 8
adults in the Commonwealth , including but not limited to the following powers 9
and duties: 10
(a) Promulgate administrative regulations in accordance with KRS Chapter 11
13A to implement this chapter; 12
(b) Establish the number of licenses that may be issued within the following 13
licensing categories: 14
1. Processing and manufacturing; 15
2. Testing; 16
3. Distribution; 17
4. Retail sales; 18
5. Special events; 19
6. Retail consumption; 20
7. Transportation; 21
8. Direct shipper licenses; and 22
9. Any other category deemed necessary and as authorized under this 23
chapter; 24
(c) Establish jurisdictional, space, and other requirements relating to the 25
issuance of licenses; 26
(d) Establish limitations on the number of licenses that may be held by any 27
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person, except that a person shall not hold more than two (2) different 1
license types, and the holder of a testing license shall not hold any other 2
type of license. The department shall use its licensing authority to prevent 3
monopolies and concentration of ownersh ip among a few regulated product 4
or regulated adult -use product business entities, favoring instead a broad 5
array of licensed regulated product and regulated adult -use product 6
business entities with different ownership; 7
(e) Grant, suspend, revoke, and deny licenses; 8
(f) Establish product standards and requirements, including the types, forms, 9
and concentration of products that may be processed and sold; 10
(g) Limit or prohibit, in the event of a declared emergency, and without 11
previous notice or advertisement , the processing, transportation, testing, or 12
sale of any regulated products and regulated adult -use products during the 13
period of the declared emergency; 14
(h) Enforce this chapter; and 15
(i) Hold hearings, subpoena witnesses, compel witness attendance, admin ister 16
oaths, examine any person under oath, and require the production of books 17
and records relative to an inquiry. 18
(2) The department shall promulgate administrative regulations in accordance with 19
KRS Chapter 13A for both regulated products and regulated adult-use products 20
that: 21
(a) Establish requirements for secure transportation between business 22
establishments; 23
(b) Establish sanitary standards for retail preparation; 24
(c) Establish testing programs; 25
(d) Establish requirements for health and safety warning labels to be placed on 26
regulated products and regulated adult -use products to be sold or offered 27
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for sale to a consumer; 1
(e) Establish a scale of registration, licensing, and renewal fees, based upon the 2
cost of enforcing this chapter and the size and cat egory of the business 3
being licensed, as follows: 4
1. The department shall charge each person seeking a license an 5
application fee, and shall establish initial licensing and renewal fees; 6
2. Fees may vary depending upon the nature and scope of the activitie s 7
licensed; 8
3. The total registration and licensing fees assessed under this chapter 9
shall be set at an amount that will generate sufficient total revenue to, 10
at a minimum, fully cover the total costs of administering this chapter; 11
and 12
4. All registration and licensure fees shall be set on a scaled basis by the 13
department, and shall be established based on the size and capacity of 14
the business. For social and economic equity applicants these fees may 15
be assessed to accomplish the goals of this chapter; 16
(f) Establish requirements for the form, content, and all records and accounts 17
by licensees; 18
(g) Establish reporting requirements; 19
(h) Set appropriate dosage, potency, concentration, packaging, content, and 20
serving size limits and delineate requirements for regulated products and 21
regulated adult-use products; 22
(i) Establish labeling and packaging requirements for regulated products and 23
regulated adult-use products sold by a business establishment that include 24
but are not limited to: 25
1. A universal symbol to indicate that a regulated adult -use product 26
contains intoxicating substances, and prescribe how the product and 27
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product packaging shall utilize and exhibit this symbol; 1
2. A disclosure concerning the length of time it typically takes for the 2
intoxicating substances to affect an individual, including a statement 3
that certain forms of regulated adult -use products take longer to have 4
an effect; 5
3. A list of ingredients and all additives; 6
4. Child-resistant packaging; 7
5. A net weight statement; 8
6. A recommended use-by or expiration date; 9
7. Labeling that specifically indicates that the package contains 10
regulated products or regulated adult-use products; and 11
8. Standard and uniform packaging and labeling, including but not 12
limited to requirements regarding branding or logos; 13
(j) Restrict forms of regulated product and regulated adult-use product delivery 14
systems to ensure consumer safety and deter public health concerns; 15
(k) Establish reasonable time, place, and manner restrictions on outdoor 16
advertising of regulated products and regulated adult -use products 17
consistent with this chapter; 18
(l) Establish security and safety requirements and protocol s for the places 19
where regulated products and regulated adult -use products are possessed, 20
produced, tested, packaged, transported, marketed, and sold in the 21
Commonwealth; and 22
(m) Establish policies and procedures for retail establishments that sell both 23
regulated adult -use products pursuant to this chapter and medicinal 24
cannabis pursuant to KRS Chapter 218B to separate the two (2) functions 25
sufficiently so that: 26
1. Inventory and sales can be tracked separately; and 27
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2. Medicinal cannabis products are not sold under this chapter. 1
(3) The department shall adopt and exclusively enforce the administrative 2
regulations of the Department for Public Health relating to the distribution and 3
retail sale of regulated adult -use products until the Regulated Products Contro l 4
Board promulgates its own administrative regulations on the subject on or before 5
July 1, 2027, except that cannabis -infused beverages shall follow the 6
administrative regulations authorized by Section 10 of this Act and license fee 7
structures shall change in accordance with subsection (5) of this section. 8
(4) On and after January 1, 2027, the annual license fees for regulated adult -use 9
products shall be as follows: 10
(a) Processor or Manufacturer ...............................................................$1,000.00 11
(b) Gift shop package ..................................................................................$110.00 12
(c) Wholesaler ..........................................................................................$1,000.00 13
(d) Retail package ........................................................................................$500.00 14
(e) Transporter ............................................................................................$210.00 15
(f) Direct shipper .....................................................................................$1,000.00 16
(g) Cannabis-infused beverage manufacturer license ...............................$500.00 17
(h) Cannabis-infused beverage distributor's license ...............................$1,000.00 18
(i) Cannabis-infused beverage retail license .............................................$500.00 19
(j) Testing facility license ...........................................................................$300.00 20
(k) Retail consumption license ....................................................................$500.00 21
(5) The license fees established in subsection (4) of this section shall remain in effect 22
until the board issues updated license fe es through the promulgation of an 23
administrative regulation in accordance with KRS Chapter 13A no later than 24
January 1, 2028. 25
(6) The department may delegate any of its powers or duties established in this 26
chapter to the board, unless that delegation is specifically prohibited. 27
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SECTION 4. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 1
READ AS FOLLOWS: 2
(1) A person shall not process, produce, test, transfer, transport, or sell regulated 3
adult-use products or otherwise oper ate a regulated adult -use products 4
establishment in this state without first obtaining a license or permit under this 5
chapter. 6
(2) A processor license shall authorize the licensee to: 7
(a) Purchase hemp from a cultivator for processing; 8
(b) Receive regulated adult-use products from a cultivator, transporter, testing 9
facility, or another processor; 10
(c) Process or manufacture the regulated adult -use products received into 11
intermediate products or regulated adult-use products; 12
(d) Sell the processed regulated a dult-use products to another processor, a 13
wholesaler, or a retailer licensee; 14
(e) Transport or contract to transport the intermediate regulated adult -use 15
products: 16
1. To another processor; 17
2. To a testing facility; or 18
3. Between buildings on its own premises; 19
(f) Transport or contract to transport the final regulated adult-use products: 20
1. To another processor, wholesaler, or retailer licensee; 21
2. To a testing facility; or 22
3. Between buildings on its own premises; 23
(g) Obtain processing licenses at multiple locations; and 24
(h) Conduct the following activities as part of the processor’s license so long as 25
the licensee is a Kentucky hemp processor and is located in wet territory or 26
any precinct that has authorized the limited sale of a regulated adult -use 27
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product at licensed processor facilities: 1
1. Operate a gift shop or retail package outlet on its premises; 2
2. Sell regulated adult-use products for on-premise consumption; 3
3. Be permitted to transfer its products from the processor premises to 4
the location where those retail sales occur without having to transfer 5
physical possession of those regulated adult -use products to a licensed 6
wholesaler in accordance with the following: 7
a. Without otherwise reporting those regulated adult -use products 8
to a licensed wholesaler, report those retail sales and pay all 9
taxes required to the Department of Revenue at the time and in 10
the manner required by the Department of Revenue in 11
accordance with its powers under KRS 131.130(3); and 12
b. All other regulated adult -use products that are produced by the 13
processor shall be sold and physically transferred in compliance 14
with all other relevant provisions of this chapter; 15
4. Transport regulated adult -use products to a wholesaler, retailer, 16
testing facility, or between processors; 17
5. Host events; 18
6. Hold a direct shipper license; 19
7. Transport and sell to consumers at fairs, festivals, and other similar 20
types of events located in a wet territory; and 21
8. Self-distribute cannabis -infused beverages in the same manner as 22
distilled spirits except a processor may deliver to any licensed retailer 23
up to seventy -seven thousand five hundred (77,500) gallons of 24
cannabis-infused beverages annually. 25
(3) A transporter license shall not be required to transport industrial hemp products. 26
A transporter license shall authorize the licensee to: 27
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(a) Receive regulated products from a testing facility and transport to a 1
processor; 2
(b) Receive regulated products from a processor and transport the regulated 3
products to a processor, wholesaler, retailer, or testing facility; 4
(c) Receive regulated products from a retailer and transport them to a testing 5
lab; 6
(d) Transport between testing facilities or processors; and 7
(e) Transport regulated products to fairs, festivals, and other similar events on 8
behalf of a license holder permitted to sell at these types of events. 9
(4) A wholesale license shall authorize the licensee to: 10
(a) Purchase regulated products from a processor; 11
(b) Transport p roducts between processors, retailers, and the wholesaler’s 12
licensed premises; and 13
(c) Transport and sell to consumers at fairs, festivals, and other similar types of 14
events located in a wet territory. 15
(5) A retail license shall authorize the licensee to: 16
(a) Purchase regulated products from a processor or wholesaler for sale in its 17
place of business; 18
(b) Receive purchased regulated products from a processor, wholesaler, or 19
testing facility; 20
(c) Sell regulated adult -use products at its store to consumers ag es twenty-one 21
(21) and older; 22
(d) Host events; 23
(e) Purchase and receive regulated product accessories; 24
(f) Transport regulated products: 25
1. From a processor to a testing facility; 26
2. To a testing facility; 27
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3. Between retail locations; and 1
4. To consumers; 2
(g) Sell regulated products to consumers at fairs, festivals, and other similar 3
types of events located in a wet territory; and 4
(h) Hold a direct shipper license. 5
(6) A retail license shall not apply to: 6
(a) Industrial hemp products; 7
(b) Hemp products defined as nonintoxicating by the department; and 8
(c) Other regulated products determined by the department to be 9
nonintoxicating. 10
(7) A testing facility license shall authorize the licensee to: 11
(a) Obtain, store, and test samples of regulated products: 12
1. To determine the concentration of psychoactive substances in the 13
products; and 14
2. For other contaminants and impurities that may support the quality 15
control measures necessary to confirm product quality; and 16
(b) Perform any other activities defined by the department to ensure product 17
quality and safety. 18
(8) A regulated product retail consumption license shall authorize the licensee to sell 19
regulated products, excluding kratom, for on -premises consumption. A retail 20
consumption license may be combined with a retail license or a cannabis -infused 21
beverage license. 22
(9) A regulated product event organizer license shall authorize the licensee to host 23
temporary events related to regulated products, including but not limite d to 24
concerts, conferences, fairs, festivals, and competitions. Each event hosted by a 25
licensed regulated product event organizer shall require a separate cannabis 26
temporary event license. 27
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(10) A regulated product temporary event license shall authorize the regulated product 1
event organizer to host events related to regulated products, subject to the 2
following restrictions: 3
(a) The location shall be designated on the application form to the department; 4
and 5
(b) The event shall comply with the requirements of any smoking ban that may 6
be enacted by a local government. 7
(11) The holder of a processor license, wholesaler license, or retail license may sell 8
and serve complimentary samples of regulated hemp products at fairs, festivals, 9
and other similar events in wet territory under the following circumstances: 10
(a) Sales by the drink; 11
(b) Sales by the package shall not exceed nine (9) liters per person, per day; 12
(c) Complimentary samples served shall not exceed one and three -fourths 13
(1.75) ounces per person, per day; and 14
(d) The regulated products shall have been lawfully produced or purchased by 15
the license holder. 16
(12) Subsection (11) of this section shall not apply to regulated kratom products or 17
industrial hemp products. 18
(13) A direct shipper license shall author ize the holder to ship regulated adult -use 19
products to consumers. A direct shipper license shall abide by the laws and 20
administrative regulations established in this chapter and Sections 15 and 16 of 21
this Act, except that: 22
(a) The direct shipper license shall be regulated by the department; 23
(b) A direct shipper licensee may sell or ship to a consumer all types of 24
cannabis-infused beverages that the licensee is authorized to sell, so long as 25
the quantities do not exceed ten (10) cases per customer per month; 26
(c) The department shall determine maximum quantities per customer per 27
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month for all other regulated adult-use products; and 1
(d) All regulated adult-use product containers shipped to the consumer shall be 2
conspicuously labeled with the words "ADULT USE ONLY: ID CHECK 3
OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY" for 4
each shipment. 5
(14) A processor license shall not hold a wholesa ler license or retail license except as 6
defined in subsection (2) of this section. 7
(15) A wholesaler shall not hold a processor license or retail license. 8
(16) A retailer shall not hold a processor license or wholesaler license. 9
SECTION 5. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 10
READ AS FOLLOWS: 11
(1) All regulated product licenses and permits issued by the department shall be valid 12
for a period of no more than one (1) year. The department shall promulgate 13
administrative regulations in accordance with KRS Chapter 13A establishing the 14
system for renewal of licenses. 15
(2) The renewal of any regulated product license or permit shall not be construed to 16
waive or condone any violation that occurred prior to the renewal and shall not 17
prevent subsequent proceedings against the licensee or permittee. 18
(3) The department may deny a license renewal if the licensee is a delinquent 19
taxpayer as defined in KRS 131.1815. 20
SECTION 6. A NEW SECTION OF K RS CHAPTER 239 IS CREATED TO 21
READ AS FOLLOWS: 22
(1) If the department denies a license or permit application, the commissioner shall 23
notify the applicant in writing of the denial and the reasons for the denial by 24
registered or certified mail at the address given in the application. 25
(2) The applicant may, within thirty (30) days after the date of the mailing of the 26
notice from the commissioner, file a request with the department for an 27
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administrative hearing on the application. The hearing shall be conducted b y the 1
department as a de novo review of the application in compliance with KRS 2
Chapter 13B. 3
(3) If the commissioner denies an application and the applicant does not timely 4
request a department hearing on its application under subsection (2) of this 5
section, the department shall refund payment of any license or permit fee paid by 6
an applicant. 7
SECTION 7. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 8
READ AS FOLLOWS: 9
(1) Upon proceedings for the revocation of any license o r permit under this chapter, 10
the department may order a suspension of the license or permit. Subject to the 11
approval of the department, the licensee or permittee may pay, in lieu of part or 12
all of the days of any suspension period, a sum established in an administrative 13
regulation promulgated by the department. The department may suspend or 14
revoke a license for the reasons established in Section 17 of this Act. 15
(2) Payments in lieu of suspension collected by the department shall be deposited into 16
the Kentucky hemp fund established in Section 11 of this Act. 17
(3) Appeals from orders of suspension and the associated procedures shall be the 18
same as those provided for orders of revocation in KRS Chapter 13B. 19
SECTION 8. A NEW SE CTION OF KRS CHAPTER 239 IS CREATED TO 20
READ AS FOLLOWS: 21
(1) Regulated adult -use products shall only be purchased, possessed, consumed, or 22
used by persons aged twenty -one (21) years or older, and a retail licensee shall 23
only sell to persons aged twenty-one (21) or older. This subsection shall not apply 24
to industrial hemp products and regulated products defined as nonintoxicating by 25
the department. 26
(2) A licensee under this chapter shall not sell, give, or provide regulated products to 27
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a person under the age of twenty-one (21). 1
(3) A person under twenty-one (21) years of age shall not enter any premises licensed 2
for the sale of regulated adult -use products for the purpose of purchasing or 3
receiving any regulated adult-use products. 4
(4) A person under twenty -one (21) years of age shall not misrepresent the person's 5
age for the purpose of inducing any licensee, or the licensee's agent or employee, 6
to sell any regulated adult-use products to the underage person. 7
(5) A person under twenty -one (21) years of age shal l not use or attempt to use any 8
false, fraudulent, or altered identification card, paper, or any other document to 9
purchase or attempt to purchase or otherwise obtain any regulated adult -use 10
products. A person who violates this section shall for the first offense be guilty of 11
a violation and, for the second and each subsequent offense, be guilty of a Class 12
B misdemeanor. 13
(6) Except as provided in subsection (7) of this section, any person who violates 14
subsections (3), (4), or (5) of this section shall be ch arged with a violation and 15
each violation shall constitute a separate offense. 16
(7) A violation of subsections (3), (4), or (5) of this section shall be deemed a status 17
offense if committed by a person under the age of eighteen (18) and shall be 18
under the j urisdiction of the juvenile session of the District Court or the family 19
division of the Circuit Court, as appropriate. 20
(8) It shall be an affirmative defense to a charge under subsection (2) of this section 21
that the sale was induced by the use of false, fr audulent, or altered identification 22
papers or other documents, and that the appearance and character of the 23
purchaser were such that the purchaser’s age could not have been ascertained by 24
any other means, and that the purchaser’s appearance and character i ndicated 25
strongly that the purchaser was of legal age to purchase regulated adult -use 26
products. This evidence may be introduced either in mitigation of the charge or 27
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as a defense to the charge itself. 1
SECTION 9. A NEW SE CTION OF KRS CHAPTER 239 IS CREATED TO 2
READ AS FOLLOWS: 3
(1) The department shall regulate products determined as having psychoactive effects 4
on consumers, except alcoholic beverages regulated by KRS Chapters 241 to 244 5
and tobacco, nicotine, and vapor products regulated by KRS Chapter 438. 6
(2) As used in this section: 7
(a) "Covered product" means any product identified by the department as 8
having intoxicating effects on consumers; and 9
(b) "Production" has the same meaning as in Section 23 of this Act. 10
(3) Not later than April 1, 2027, the department shall promulgate an emerg ency 11
administrative regulation with applicability to covered products that: 12
(a) Prohibits the sale, gift, or other transfer of possession of covered products to 13
a person who has not reached the age of twenty-one (21) years; 14
(b) Prohibits the possession of covered products by a person who has not 15
reached the age of twenty-one (21) years; 16
(c) Requires retailers to implement safety measures to prevent theft or easy 17
access by children; 18
(d) Establishes a laboratory testing and approval process for contaminants a nd 19
phytochemicals of a covered product; 20
(e) Requires covered products to be registered with and approved by the 21
department; 22
(f) Prohibits a covered product to be sold or distributed in the Commonwealth 23
unless it has been approved under paragraph (e) of this subsection; 24
(g) Prohibits the adulteration of covered products with additives that increase 25
toxicity or addictive potential, as determined by the department; 26
(h) Establishes milligram limits per serving; 27
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(i) Establishes criteria for reviewing and approvi ng novel psychoactive 1
substances to be permitted for sale in the Commonwealth, except that a 2
novel psychoactive substance shall not include kratom, kava, mushrooms, 3
blue lotus, and cannabinoids. The following cannabinoids are prohibited 4
from commerce without prior authorization from the department: 5
1. Hexahydrocannabinol (HHC); 6
2. Hexahyrdocannabiphorol (HHC-P); 7
3. Cannabinoid acetates; 8
4. Delta-10-Tetrahydrocannabinol (delta-10-THC); 9
5. Tetrahydrocannabiphorol (THCP); 10
6. Tetrahydrocannabioctyl (THC-JD); 11
7. 11-hydroxy-Tetrahydrocannabinol (11-OH-THC); and 12
8. Other cannabinoids determined by the department to be artificially 13
manufactured and that create an intoxicating effect and are not 14
naturally found in hemp; 15
(j) Requires each covered product manufactured, marketed, sold, or distributed 16
in the Commonwealth to be packaged and labeled in accordance with KRS 17
217.037; 18
(k) Except as established in paragraph (l) of this subsection, requires that a 19
covered product’s label include, in no less than four and one -half (4.5) 20
point font, the following information: 21
1. A statement of identity or common product name on the principal 22
display panel of the label; 23
2. The net quantity of contents expressed in both standard English and 24
metric units of measurement, located in the lower thirty percent (30%) 25
of the principal display panel of the label parallel to the base of the 26
container; 27
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3. The ingredients of the product, in descending order of predominance 1
by weight; 2
4. The name of the manufacturer or distributor; 3
5. If the covered product contains cannabinoids, the total amount of 4
each marketed cannabinoid per serving for ingestible products, or the 5
total amount per container for cosmetic products; 6
6. If the covered product is kratom, the total amount of mitragynine p er 7
serving for ingestible products, or the total amount per container for 8
cosmetic products; 9
7. For any other covered product, the total amount of psychoactive 10
substance per serving for ingestible products, or the total amount per 11
container for cosmetic products; 12
8. Suggested use instructions or directions, including serving sizes; and 13
9. An expiration date, if any; 14
(l) Requires an ingestible or cosmetic covered product that has a total area of 15
twelve (12) square inches or less to bear labeling in accordanc e with 16
paragraph (k) of this subsection, except the print may be smaller than six 17
(6) point font but not less than one thirty -secondth (1/32) of an inch in 18
height; 19
(m) Requires each covered product container have a tamper evident seal; 20
(n) Prohibits covered product packaging, labeling, or advertising material from 21
bearing any implicit or explicit health claims stating that the covered 22
product can diagnose, treat, cure, or prevent any disease; and 23
(o) 1. Permits a Kentucky production facility that is shippin g a covered 24
product to a state with testing requirements for the covered product to 25
defer to that state’s requirements. 26
2. Requires a Kentucky production facility that is shipping a covered 27
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product to a state without testing requirements for the covered pr oduct 1
to abide by Kentucky's requirements. 2
SECTION 10. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) (a) The manufacture, distribution, and retail sale of cannabis -infused 5
beverages by the drink and by the package shall be regulated solely by the 6
department. 7
(b) On or before July 1, 2027, the department shall promulgate administrative 8
regulations in accordance with KRS Chapter 13A to establish the rules and 9
procedures for the manufacture, distribution, and retail sale of cannabis -10
infused beverages. 11
(c) The licensing for the manufacture, distribution and retail sale of cannabis 12
infused beverages may be equival ent to or supplemental to the processor, 13
wholesale, and retail licenses in Section 4 of this Act. 14
(d) The department shall establish administrative regulations that have similar 15
oversight to alcohol controls, including tied house laws, trade practice rules, 16
wholesale product rules, and payment terms. 17
(2) Cannabis-infused beverages shall only be available for retail sale by the package 18
or drink in wet territory by the holder of a: 19
(a) Cannabis-infused beverage retail license; or 20
(b) Processor license if the beverages were: 21
1. Produced by the processor; 22
2. Produced for the processor under a written contract with another 23
processor or manufacturer; or 24
3. Packaged for or by the processor. 25
(3) A person under twenty -one (21) years of age shall not purchase or consu me 26
cannabis-infused beverages. All restrictions and offenses related to minors and 27
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alcoholic beverages in KRS Chapters 241 to 244 shall also apply in the same 1
manner to minors and cannabis-infused beverages. 2
(4) A cannabis -infused beverage retail license s hall authorize the licensee to sell 3
cannabis-infused beverages at retail at the licensed premises by the drink for 4
consumption on the premises only and by the package for consumption off the 5
licensed premises only. The licensee may purchase cannabis -infused beverages 6
from the holder of a: 7
(a) Cannabis-infused beverage distributor's license; or 8
(b) Processor license as authorized by subsection (2) of Section 4 of this Act. 9
(5) A cannabis -infused beverage distributor's license may be issued to a qualifying 10
person as determined by the department. A cannabis -infused beverage 11
distributor's license shall authorize the licensee to: 12
(a) Purchase cannabis-infused beverages from: 13
1. A licensed cannabis-infused beverage manufacturer; and 14
2. Another holder of a cannabis -infused beverage distributor's license; 15
and 16
(b) Store cannabis-infused beverages and sell them from its licensed premises 17
to the holder of a: 18
1. Cannabis-infused beverage retail license; or 19
2. Cannabis-infused beverage distributor's license. 20
(6) A cannabis -infused beverage distributor shall transport cannabis -infused 21
beverages only by a vehicle owned, rented, or leased and operated by the 22
cannabis-infused beverage distributor, which has affixed to its sides at all times a 23
sign of form and size prescribed by the department, containing among other 24
things the name and license number of the licensee. 25
(7) A cannabis -infused beverage distributor's license shall be obtained for each 26
separate warehouse, agent, distributor, broker, jobber, or place of business from 27
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which orders are received or cannabis-infused beverages are distributed. 1
(8) The holder of a cannabis-infused beverage distributor's license shall: 2
(a) Not hold a cannabis-infused beverage retail license; and 3
(b) Have a licensed location in Kentucky. 4
(9) A cannabis-infused beverage manufacturer may: 5
(a) Self-distribute cannabis-infused beverages; and 6
(b) Sell or ship to a cannabis -infused beverage distributor or to a consumer all 7
types of cannabis-infused beverages that the licensee is authorized to sell. 8
SECTION 11. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 9
READ AS FOLLOWS: 10
(1) There is hereby created a trust and agency account to be kn own as the Kentucky 11
hemp fund. The fund shall be administered by the Department of Psychoactive 12
Substances. 13
(2) For tax periods beginning on or after January 1, 2027, one hundred percent 14
(100%) of the receipts collected under this section from any state re tail regulatory 15
license fee and state wholesale regulatory license fee from the sale of hemp 16
products regulated by this chapter shall be deposited in the fund together with 17
any other money contributed, appropriated, or allocated to the fund from all 18
other sources. The fund may also receive additional state appropriations, gifts, 19
grants, and federal funds. Notwithstanding KRS 45.229, any money remaining in 20
the fund at the close of any calendar year shall not lapse but shall be carried 21
forward to the next calendar year. 22
(3) (a) The Department of Psychoactive Substances shall use moneys deposited in 23
the Kentucky hemp fund to administer the fund and provide rewards for the 24
industry to be divided as follows: 25
1. At least ninety percent (90%) shall be allocated to regulating, 26
researching, and promoting Kentucky’s hemp industry. The funds 27
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shall be allocated as follows: 1
a. One percent (1%) shall be allocated to: 2
i. Fund cannabis education, which shall be used to deter 3
underage consumption; 4
ii. Provide educational m aterials for adults to support the 5
prevention of underage consumption; and 6
iii. Establish a safe consumption training program for retailers 7
participating in on-premises sales; 8
b. Up to five percent (5%) shall be allocated to the Department for 9
Public Health’s laboratory to upgrade facilities for testing 10
cannabis; 11
c. Up to five percent (5%) shall be allocated to the Kentucky State 12
Police to establish a field sobriety test for cannabis; 13
d. Up to four percent (4%) shall be allocated to administer and 14
regulate hemp products, including maintaining state laboratory 15
cannabinoid testing facili ties using fit -for-purpose 16
methodologies; 17
e. At least eighty percent (80%) shall be allocated to the University 18
of Kentucky Cannabis Center to advance the study of cannabis. 19
Of this money, at least eighty -five percent (85%) of the funds 20
allocated under thi s subdivision shall exclusively be allocated to 21
advance hemp feed animal trials for livestock and companion 22
animals until the department determines that funding is no 23
longer required for the hemp animal feed approval process, and 24
up to fifteen percent (15% ) shall be allocated to the other 25
purposes of this subdivision. Once this hemp animal feed 26
funding is no longer required, all funding under this subdivision 27
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shall be allocated to the University of Kentucky Cannabis Center 1
for purposes that advance the study of cannabis; and 2
f. At least five percent (5%) shall be allocated to administer grants 3
related to innovations in and support of Kentucky hemp 4
agriculture, hemp agribusinesses and hemp agricultural 5
technology; and 6
2. Up to ten percent (10%) may be allocat ed for administration and 7
operation of Department of Psychoactive Substances, including costs 8
of department personnel, program administration, testing, and any 9
other costs incurred while conducting hemp programs authorized by 10
this chapter. 11
(b) The Department of Psychoactive Substances may promulgate administrative 12
regulations in accordance with KRS Chapter 13A establishing the 13
conditions and criteria for the distribution of moneys from the fund. 14
(c) The Department of Revenue may promulgate administrative re gulations in 15
accordance with KRS Chapter 13A establishing the procedures necessary to 16
determine the correct allocation of sales tax receipts described in subsection 17
(1) of this section. 18
(d) Any funds remaining after upgrading the Department for Public Heal th’s 19
laboratory shall be directed to the UK Cannabis Center to advance the study 20
of cannabis. 21
SECTION 12. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 22
READ AS FOLLOWS: 23
(1) As used in this section: 24
(a) "Certified refere nce materials" means highly accurate, stable, and 25
homogenous substances with documented traceability to SI units, used to 26
evaluate methods and to ensure measurement quality; 27
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(b) "Departments" means the Department for Public Health and the 1
Department of Psychoactive Substances; 2
(c) "Fit-for-purpose" means a validated test procedure that is suitable, 3
functional, and effective for its intended use and meets required standards; 4
(d) "Proficiency test" means a test established to evaluate the ability of a 5
laboratory to perform test procedures required under this section by 6
comparing each laboratory’s results against a set of standards; 7
(e) "Proficiency test sample" means an unknown substance sent by an 8
approved, external provider to a laboratory for analysis to ev aluate 9
accuracy, precision, and performance. Proficiency test samples are 10
submitted blindly for testing using the same methods as are used for 11
regular, routine samples to assess the ability of the laboratory to produce 12
valid results; and 13
(f) "Third-party laboratory" means an independent, impartial testing entity not 14
affiliated with a manufacturer, wholesaler, retailer, or any other seller or 15
buyer of a hemp-derived cannabinoid product. 16
(2) The Department of Psychoactive Substances shall work with the Depart ment for 17
Public Health to improve testing procedures, proficiency testing, and approvals of 18
third-party laboratories who seek to test registered hemp -derived cannabinoid 19
products for sale in Kentucky. 20
(3) Third-party laboratories certified to test register ed hemp -derived cannabinoid 21
products shall meet the following requirements: 22
(a) Accreditation under ISO/IEC 17025:2017 standard by an ISO -certified 23
accreditation body, including accreditation for each method used for testing 24
hemp-derived cannabinoid products; 25
(b) Comprehensive quality systems and validated methods for testing hemp -26
derived cannabinoids using both Gas Chromatography -Mass Spectrometry 27
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(GC-MS/ or GC -MS/MS) and High -Performance Liquid Chromatography 1
(HPLC-PDA or LC-MS/MS) systems; 2
(c) Establishing standard operating procedures and methodologies for testing 3
products containing hemp-derived cannabinoids that are fit-for-purpose; 4
(d) Utilizing fit -for-purpose testing for plant material, oils, edibles, beverages, 5
and vaporizable products; 6
(e) Participating in an accredited proficiency testing program under ISO/IEC 7
17043; and 8
(f) Meeting other standards necessary to fulfill the requirements of this section. 9
(4) (a) The departments shall establish a proficiency test for demonstrating 10
proficiency in testing hemp -derived cannabinoids for the purpose of 11
evaluating and approving third -party laboratories that seek to conduct 12
compliance testing of hemp -derived cannabinoid p roducts registered in the 13
Commonwealth. 14
(b) The Department of Psychoactive Substances shall collaborate with the 15
Department for Public Health to establish the proficiency test. The 16
departments shall utilize certified reference materials to create a referen ce 17
product for compliance testing. The reference product shall include the 18
following cannabinoids: 19
1. Cannabidiol (CBD) (CAS # 13956-29-1); 20
2. Cannabinol (CBN) (CAS # 521-35-7); 21
3. Delta-9-tetrahydrocannabinolic acid (THCA) (CAS # 23978-85-0); 22
4. Delta-9-tetrahydrocannabinol (delta-9-THC) (CAS # 1972-08-3); 23
5. Delta-8-tetrahydrocannabinol (delta-8-THC) (CAS # 5757-75-5); 24
6. Hexahydrocannabinol (HHC) (CAS # 36403 -90-4 for 9(R) -HHC and 25
36403-91-5 for 9(S)-HHC); 26
7. Delta-8-iso-tetrahydrocannabinol (delta-8-iso-THC) (CAS # 23050-47-27
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7); 1
8. Delta-4,8-iso-tetrahydrocannabinol (delta 4(8) -iso-THC) (CAS # 2
23050-59-1); 3
9. 9(R) Hexahydrocannabinol (9(R)-HHC) (CAS # 23050-47-7); and 4
10. 9(S) Hexahydrocannabinol (9(S)-HHC) (CAS # 36403-91-5). 5
(c) The proficiency test sam ples shall be of known concentration, preparation 6
documented, and maintained by the departments for purposes of proficiency 7
testing and periodic validation. 8
(5) Upon establishing the proficiency test, the departments shall establish an 9
approval process for third-party laboratories seeking to conduct testing of hemp -10
derived cannabinoid products intended for registration in the Commonwealth in 11
accordance with the following: 12
(a) The departments shall provide proficiency test materials to any third -party 13
laboratory that seeks approval to conduct cannabinoid testing for hemp -14
derived cannabinoid products intended for registration in Kentucky; 15
(b) Participating third -party laboratories shall test each proficiency sample 16
using the validated methods and analytical pr ocedures that are within their 17
scope of accreditation as specified on their accreditation certificate and 18
submit their results to the Department for Public Health within a timeframe 19
established by the Department for Public Health; 20
(c) The Department for Public Health shall compare the proficiency test results 21
submitted by third -party laboratories to target values and to the results 22
derived from the same reference materials by other certified laboratories. 23
The results from each applicant laboratory for each analyte shall be 24
assigned a z-score; 25
(d) 1. A third -party laboratory shall be approved for inclusion on the 26
Commonwealth’s list of approved laboratories if its results fall within 27
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an acceptable range established by the Department of Psychoactive 1
Substances and Department for Public Health through the 2
promulgation of administrative regulations. 3
2. To be eligible for approval under this section, a third -party laboratory 4
shall maintain accreditation under ISO/IEC 17025:2017 or its 5
successor standard and shall provide proof of such accreditation to the 6
Department of Psychoactive Substances. 7
3. The Departmentof Psychoactive Substances may establish additional 8
requirements for third -party laboratories seeking approval within the 9
Commonwealth through an administrat ive regulation promulgated in 10
accordance with KRS Chapter 13A; and 11
(e) The Department for Public Health shall create and maintain a publicly 12
available list of approved laboratories that meet requirements established 13
under this section. 14
(6) Upon establishment of the approved laboratory list: 15
(a) Any person or entity registering hemp -derived cannabinoid -containing 16
products in Kentucky shall utilize a laboratory included on the Department 17
for Public Health’s approved laboratory list; and 18
(b) All previously reg istered products containing cannabinoids shall be re -19
registered with the Department of Psychoactive Substances to continue 20
selling in the Commonwealth. Any registration fees associated with this re -21
registration requirement shall be waived. 22
(7) The Department of Psychoactive Substances shall promulgate administrative 23
regulations in accordance with KRS Chapter 13A to implement and enforce this 24
section, including but not limited to: 25
(a) Defining acceptable variance ranges for proficiency testing; 26
(b) Establishing timelines for laboratory participation and review; 27
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(c) Establishing procedures for adding or removing laboratories from the 1
approved list; 2
(d) Specifying recordkeeping and reporting requirements; and 3
(e) Determining a timeframe for allowing registered businesses to re -register 4
products using the approved laboratories for retesting certified products to 5
assure conformance to hemp-derived cannabinoid standards. 6
SECTION 13. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 7
READ AS FOLLOWS: 8
(1) Notwithstanding any provision of law to the contrary, and except as provided in 9
subsection (2) of this section: 10
(a) The use of hemp-derived cannabinoid products shall be considered lawful if 11
done in accordance with: 12
1. This chapter and any administrative regulations promulgated 13
thereunder; and 14
2. Any administrative regulations promulgated by the Cabinet for Health 15
and Family Services, Cabinet for Public Protection, or the Kentucky 16
Department of Agriculture; 17
(b) The acquisition, blending, cultivation, delivery, distribution, manufacturing, 18
manipulation, packaging for sale, preparation, possession, sale, testing, 19
transportation, or transfer of hemp -derived cannabinoid products or hemp -20
derived cannabinoid product accessories by a licensed business or licensed 21
business agent shall be considered lawful if done in accordance with this 22
chapter and any administrative regulations promulgated thereunder; 23
(c) An attorney shall not be subject, under the laws of the Commonwealth, to 24
arrest, prosecution, or penalty in any manner, or denied any right or 25
privilege, including but not limited to a civil penalty or disciplinary action 26
by the Kentucky Court of Justice, Kentucky Bar Association, or by any 27
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other professional licensing board, solely for providing an individual or 1
hemp-derived cannabinoid business with legal assistance related to activity 2
that is no longer subject to criminal penalties under state law pursuant to 3
this chapter; and 4
(d) A person shall not be subject, under the laws of th e Commonwealth, to 5
arrest, prosecution, or penalty in any manner, or denied any right or 6
privilege, including but not limited to a civil penalty or disciplinary action 7
by an occupational or professional licensing board, solely for providing 8
assistance or s ervices, including but not limited to accounting services, 9
financial services, security services, or business consulting services, to any 10
individual or hemp -derived cannabinoid business related to activity that is 11
no longer subject to criminal penalties un der state law pursuant to this 12
chapter. 13
(2) Subsection (1) of this section shall not be construed or interpreted to prohibit the 14
arrest, prosecution, or imposition of any other penalty arising from but not 15
limited to breach of contract, breach of fiduciary duty, negligence, or engaging in 16
criminal activity that would constitute a felony or misdemeanor. 17
SECTION 14. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 18
READ AS FOLLOWS: 19
(1) There is hereby established in the State Treasury a trust and agency account to be 20
known as the Department of Psychoactive Substances fund. The fund shall 21
consist of amounts received from appropriations, and any other proceeds from 22
gifts, grants, federal funds, application fees, or license fees p rovided by Section 3 23
of this Act, civil penalties as provided by Section 17 of this Act, and any other 24
funds, both public and private, made available for purposes of this chapter, 25
except for any moneys allocated toward the Kentucky hemp fund established in 26
Section 11 of this Act. 27
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(2) The Department of Psychoactive Substances fund shall be administered by the 1
department. 2
(3) Amounts deposited in the fund shall be used for the costs of department 3
personnel, administrative expenses, and any other costs incurred while regulating 4
the activities authorized by this chapter. 5
(4) Notwithstanding KRS 45.229, the fund amounts not expended at the close of a 6
fiscal year shall not lapse but shall be carried forward into the next fiscal year. 7
SECTION 15. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 8
READ AS FOLLOWS: 9
(1) A direct shipper license issued under this chapter shall authorize the holder to 10
ship adult -use regulated products to consumers. The department shall issue a 11
direct shipper license to a successful applicant that: 12
(a) Pays the applicable annual license fee; 13
(b) Is a licensed adult-use regulated product manufacturer; 14
(c) Holds a current license, permit, or other authorization to manufacture or 15
supply adult -use regulated prod ucts in the state where the applicant is 16
located. If an applicant is located outside of Kentucky, proof of its current 17
license, permit, or other authorization as issued by its home state shall be 18
sufficient proof of its eligibility to hold a direct shipper license in Kentucky; 19
and 20
(d) Is an adult-use regulated products retailer licensed by the department. 21
(2) The department shall establish the form for a direct shipper license application 22
through the promulgation of an administrative regulation. These requirements 23
shall include only the following: 24
(a) The address of the manufacturer; and 25
(b) If the applicant is located outside this state, a copy of the applicant's current 26
license, permit, or other authorization to manufacture, store, or supply 27
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adult-use regulated products in the state where the applicant is located. 1
(3) For purposes of this section, the holder o f a direct shipper license may utilize the 2
services of a third party to fulfill shipments, subject to the following: 3
(a) The third party shall not be required to hold any adult -use regulated 4
product license, but a licensed entity shall not serve as a third party to fulfill 5
shipments other than the holder of a transporter's license; 6
(b) The third party may operate from the premises of the direct shipper licensee 7
or from another business location; and 8
(c) The direct shipper licensee shall be liable for any vi olation of this chapter 9
and its accompanying administrative regulations that may occur by the 10
third party. 11
(4) A direct shipper licensee shall: 12
(a) Agree that the Secretary of State shall serve as its registered agent for 13
service of process. The licensee s hall agree that legal service on the agent 14
constitutes legal service on the direct shipper licensee; 15
(b) Maintain the records required by the department and provide the 16
department and the Department of Revenue access to or copies of these 17
records; 18
(c) Allow the department or the Department of Revenue to perform an audit of 19
the direct shipper licensee's records or an inspection of the direct shipper 20
licensee's licensed premises upon request. If an audit or inspection reveals a 21
violation, the department or th e Department of Revenue may recover 22
reasonable expenses from the licensee for the cost of the audit or 23
inspection; 24
(d) Register with the Department of Revenue, and file all reports and pay all 25
taxes required under this chapter; and 26
(e) Submit to the jurisd iction of the Commonwealth of Kentucky for any 27
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violation of this chapter or its accompanying administrative regulations or 1
for nonpayment of any taxes owed. 2
(5) (a) Each direct shipper licensee shall submit to the department and the 3
Department of Revenue a quarterly report for that direct shipper license 4
showing: 5
1. The total amount of adult -use regulated products shipped into the 6
state per consumer; 7
2. The name and address of each consumer; 8
3. The purchase price of the adult -use regulated products shipped and 9
the amount of taxes charged to the consumer for the adult -use 10
regulated products shipped; and 11
4. The name and address of each common carrier. 12
(b) The Department of Revenue shall create a form through the promulgation 13
of an administrative regulation for reporting under paragraph (a) of this 14
subsection. 15
(c) The department shall provide a list of all active direct shipper licensees to 16
licensed common carriers on a quarterly basis to reduce the number of 17
unlicensed shipments in the Commonwealth. 18
(6) A direc t shipper licensee shall submit a current copy of its adult -use regulated 19
products license from its home state along with the applicable license fee every 20
year upon renewal of its direct shipper license. 21
SECTION 16. A NE W SECTION OF KRS CHAPTER 239 IS CREATED TO 22
READ AS FOLLOWS: 23
(1) A direct shipper licensee may sell or ship to a consumer all types of adult -use 24
regulated products that the licensee is authorized to sell, with an aggregate limit 25
not to exceed ten (10) cases per customer per month. 26
(2) The direct shipper licensee shall notify the consumer placing the order that the 27
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shipment shall not be left unless the recipient of the shipment provides a valid 1
identification document at the time verifying that the recipient is at least twenty -2
one (21) years of age. All adult -use regulated product containers shipped to the 3
consumer shall be conspicuously labeled with the words "CONTAINS ADULT -4
USE REGULATED PRODUCTS: SIGNATURE OF PERSON AGE 21 OR 5
OLDER REQUIRED FOR DELIVERY" for each shipment. 6
(3) At the time of delivery, the recipient of the shipment shall present to the 7
individual delivering the package a valid identification document. Prior to 8
transferring possession of the package, the individual delivering the package 9
shall visually inspect the document and verify the identity of the recipient and, by 10
visual examination or by using age verification technology, that the recipient is at 11
least twenty-one (21) years of age. 12
(4) Before transferring possession of the package, the individual delivering the 13
package shall obtain the signature of the recipient of the shipment. The 14
individual who receives and signs for the adult -use regulated products is not 15
required to be the consumer who purchased the adult-use regulated products. 16
(5) A consumer who intentionally causes shipment to an address deemed unlawful 17
shall, for the first offense, be guilty of a violation punishable by a fine of two 18
hundred fifty dollars ($250), and for each sub sequent offense, be guilty of a 19
violation punishable by a fine of five hundred dollars ($500). In this instance, the 20
direct shipper licensee and the common carrier shall be held harmless. 21
(6) A direct shipper licensee may not sell or ship adult -use regulat ed products to a 22
consumer from its licensed premises if the consumer's address is located in an 23
area in which that type of adult -use regulated products may not be sold or 24
received. 25
(7) Shipments made pursuant to this section shall be made through a common 26
carrier. 27
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(8) If a common carrier is unable to complete delivery, then the adult -use regulated 1
products shall be returned to the consignor. 2
SECTION 17. A NEW SECTION OF KRS CHAPTER 239 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) The department may temporarily suspend a license up to sixty (60) days if the 5
licensee is alleged to have: 6
(a) Violated any provision of this chapter or an administrative regulation 7
promulgated under the authority of this chapter; 8
(b) Made any false statement to the department or its representatives; 9
(c) Pled guilty to, or been convicted of, any felony or drug-related misdemeanor 10
or violation; 11
(d) Failed to comply with only those instructions agreed upon in the contract 12
signed by the licensee at the time a license was issued; or 13
(e) Failed to comply with an order from a representative of the department, 14
representative of the Department of Kentucky State Police, or any law 15
enforcement officer. 16
(2) The department may temporarily suspend a license up to sixty (6 0) days without 17
giving the licensee advance notice of the charge against him or her or an 18
opportunity to be heard. 19
(3) The department shall not permanently revoke a license until the department has 20
notified the licensee of the charge against him or her and given the licensee an 21
opportunity for a hearing before a three (3) person panel whose members have 22
been designated by the Commissioner. The three (3) person panel shall include: 23
(a) Two (2) members who are employees of the department; and 24
(b) One (1) member who is not an employee of the department. 25
(4) The department may permanently revoke a license if the licensee admits, or is 26
found in a hearing, to have: 27
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(a) Violated any provision of this chapter or an administrative regulation 1
promulgated under the authority of this chapter; 2
(b) Made any false statement to the department or its representative; 3
(c) Pled guilty to, or been convicted of, any felony or drug-related misdemeanor 4
or violation; or 5
(d) Failed to comply with any instruction or order from the depa rtment, a 6
representative of the Department of Kentucky State Police, or any law 7
enforcement officer. 8
(5) The department may impose a monetary civil penalty, not to exceed two thousand 9
five hundred dollars ($2,500) per violation, on any person who violates this 10
chapter or an administrative regulation promulgated under the authority of this 11
chapter. 12
(6) The department shall not impose a monetary civil penalty against a person 13
alleged to have violated this chapter, or an administrative regulation promulgated 14
under the authority of this chapter, until the department has notified the person 15
of the charge against him or her and given the person the opportunity for a 16
hearing before the three (3) person panel. 17
Section 18. KRS 2.015 is amended to read as follows: 18
Persons of the age of eighteen (18) years are of the age of majority for all purposes in this 19
Commonwealth except for the purchase of alcoholic beverages , purchase of adult -use 20
products regulated by KRS Chapter 239, and for purposes of care and treatment of 21
children with disabilities, for which twenty-one (21) years is the age of majority, all other 22
statutes to the contrary notwithstanding. 23
Section 19. KRS 12.020 is amended to read as follows: 24
Departments, program cabinets and their departments, and the respective major 25
administrative bodies that they include are enumerated in this section. It is not intended 26
that this enumeration of administrative b odies be all -inclusive. Every authority, board, 27
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bureau, interstate compact, commission, committee, conference, council, office, or any 1
other form of organization shall be included in or attached to the department or program 2
cabinet in which they are includ ed or to which they are attached by statute or statutorily 3
authorized executive order; except in the case of the Personnel Board and where the 4
attached department or administrative body is headed by a constitutionally elected 5
officer, the attachment shall be solely for the purpose of dissemination of information and 6
coordination of activities and shall not include any authority over the functions, 7
personnel, funds, equipment, facilities, or records of the department or administrative 8
body. 9
I. Cabinet for General Government - Departments headed by elected officers: 10
(1) The Governor. 11
(2) Lieutenant Governor. 12
(3) Department of State. 13
(a) Secretary of State. 14
(b) Board of Elections. 15
(c) Registry of Election Finance. 16
(4) Department of Law. 17
(a) Attorney General. 18
(5) Department of the Treasury. 19
(a) Treasurer. 20
(6) Department of Agriculture. 21
(a) Commissioner of Agriculture. 22
(b) Agricultural Development Board. 23
(c) Kentucky Agricultural Finance Corporation. 24
(7) Auditor of Public Accounts. 25
(a) Commonwealth Office of the Ombudsman. 26
II. Program cabinets headed by appointed officers: 27
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(1) Justice and Public Safety Cabinet: 1
(a) Department of Kentucky State Police. 2
1. Office of Administrative Services. 3
a. Division of Operational Support. 4
b. Division of Management Services. 5
2. Office of Operations. 6
a. Division of West Troops. 7
b. Division of East Troops. 8
c. Division of Special Enforcement. 9
d. Division of Commercial Vehicle Enforcement. 10
3. Office of Technical Services. 11
a. Division of Forensic Sciences. 12
b. Division of Electronic Services. 13
c. Division of Records Management. 14
(b) Department of Criminal Justice Training. 15
(c) Department of Corrections. 16
(d) Department of Juvenile Justice. 17
(e) Office of the Secretary. 18
(f) Office of Drug Control Policy. 19
(g) Office of Legal Services. 20
(h) Office of the Kentucky State Medical Examiner. 21
(i) Parole Board. 22
(j) Kentucky State Corrections Commission. 23
(k) Office of Legislative and Intergovernmental Services. 24
(l) Office of Human Resource Management. 25
1. Division of Human Resource Administration. 26
2. Division of Employee Management. 27
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(m) Department of Public Advocacy. 1
(n) Office of Communications. 2
1. Information Technology Services Division. 3
(o) Office of Financial Management Services. 4
1. Division of Financial Management. 5
(p) Grants Management Division. 6
(2) Energy and Environment Cabinet: 7
(a) Office of the Secretary. 8
1. Office of Legislative and Intergovernmental Affairs. 9
2. Office of Legal Services. 10
a. Legal Division I. 11
b. Legal Division II. 12
3. Office of Administrative Hearings. 13
4. Office of Communication. 14
5. Mine Safety Review Commission. 15
6. Office of Kentucky Nature Preserves. 16
7. Kentucky Public Service Commission. 17
(b) Department for Environmental Protection. 18
1. Office of the Commissioner. 19
2. Division for Air Quality. 20
3. Division of Water. 21
4. Division of Environmental Program Support. 22
5. Division of Waste Management. 23
6. Division of Enforcement. 24
7. Division of Compliance Assistance. 25
(c) Department for Natural Resources. 26
1. Office of the Commissioner. 27
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2. Division of Mine Permits. 1
3. Division of Mine Reclamation and Enforcement. 2
4. Division of Abandoned Mine Lands. 3
5. Division of Oil and Gas. 4
6. Division of Mine Safety. 5
7. Division of Forestry. 6
8. Division of Conservation. 7
9. Office of the Reclamation Guaranty Fund. 8
(d) Office of Energy Policy. 9
1. Division of Energy Assistance. 10
(e) Office of Administrative Services. 11
1. Division of Human Resources Management. 12
2. Division of Financial Management. 13
3. Division of Information Services. 14
(3) Public Protection Cabinet. 15
(a) Office of the Secretary. 16
1. Office of Communications and Public Outreach. 17
2. Office of Legal Services. 18
a. Insurance Legal Division. 19
b. Alcoholic Beverage Control Legal Division. 20
c. Housing, Buildings and Construction Legal Division. 21
d. Financial Institutions Legal Division. 22
e. Professional Licensing Legal Division. 23
3. Office of Administrative Hearings. 24
4. Office of Administrative Services. 25
a. Division of Human Resources. 26
b. Division of Fiscal Responsibility. 27
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(b) Office of Claims and Appeals. 1
1. Board of Tax Appeals. 2
2. Board of Claims. 3
3. Crime Victims Compensation Board. 4
(c) Kentucky Boxing and Wrestling Commission. 5
(d) Department of Alcoholic Beverage Control. 6
1. Division of Distilled Spirits. 7
2. Division of Malt Beverages. 8
3. Division of Enforcement. 9
4. Division of Tobacco, Nicotine, and Vapor Product Licensing. 10
(e) Department of Financial Institutions. 11
1. Division of Depository Institutions. 12
2. Division of Non-Depository Institutions. 13
3. Division of Securities. 14
(f) Department of Housing, Buildings and Construction. 15
1. Division of Fire Prevention. 16
2. Division of Plumbing. 17
3. Division of Heating, Ventilation, and Air Conditioning. 18
4. Division of Building Code Enforcement. 19
(g) Department of Insurance. 20
1. Division of Health and Life Insurance and Managed Care. 21
2. Division of Property and Casualty Insurance. 22
3. Division of Administrative Services. 23
4. Division of Financial Standards and Examination. 24
5. Division of Licensing. 25
6. Division of Insurance Fraud Investigation. 26
7. Division of Consumer Protection. 27
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(h) Department of Professional Licensing. 1
1. Real Estate Authority. 2
2. Division of Real Property Boards. 3
(i) Department of Psychoactive Substances. 4
1. Division of Hemp. 5
2. Division of Kratom. 6
(4) Transportation Cabinet: 7
(a) Department of Highways. 8
1. Office of Project Development. 9
2. Office of Project Delivery and Preservation. 10
3. Office of Highway Safety. 11
4. Highway District Offices One through Twelve. 12
(b) Department of Vehicle Regulation. 13
(c) Department of Aviation. 14
(d) Department of Rural and Municipal Aid. 15
1. Office of Local Programs. 16
2. Office of Rural and Secondary Roads. 17
(e) Office of the Secretary. 18
1. Office of Public Affairs. 19
2. Office for Civil Rights and Small Business Development. 20
3. Office of Budget and Fiscal Management. 21
4. Office of Inspector General. 22
5. Secretary's Office of Safety. 23
(f) Office of Support Services. 24
(g) Office of Transportation Delivery. 25
(h) Office of Audits. 26
(i) Office of Human Resource Management. 27
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(j) Office of Information Technology. 1
(k) Office of Legal Services. 2
(5) Cabinet for Economic Development: 3
(a) Office of the Secretary. 4
1. Office of Legal Services. 5
2. Department for Business and Community Development. 6
a. Development and Retention Division – West Kentucky. 7
b. Development, Retention, and Administrative Division – 8
Central and East Kentucky. 9
c. Community and Workforce Development Division. 10
3. Department for Financial Services. 11
a. Kentucky Economic Development Finance Authority. 12
b. Finance and Personnel Division. 13
c. IT and Resource Management Division. 14
d. Compliance Division. 15
e. Program Administration Division. 16
f. Bluegrass State Skills Corporation. 17
g. The GRANT Commission. 18
4. Office of Strategy and Public Affairs. 19
a. Marketing and Communications Division. 20
b. Research and Strategy Division. 21
5. Office of Entrepreneurship and Innovation. 22
a. Commission on Small Business Innovation and Advocacy. 23
6. Kentucky Film Office. 24
a. Kentucky Film Leadership Council. 25
(6) Cabinet for Health and Family Services: 26
(a) Office of the Secretary. 27
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1. Office of Public Affairs. 1
2. Office of Legal Services. 2
3. Office of Inspector General. 3
4. Office of Human Resource Management. 4
5. Office of Finance and Budget. 5
6. Office of Legislative and Regulatory Affairs. 6
7. Office of Administrative Services. 7
8. Office of Application Technology Services. 8
9. Office of Data Analytics. 9
10. Office of Medical Cannabis. 10
a. Division of Enforcement and Compliance. 11
b. Division of Licensure and Access. 12
(b) Department for Public Health. 13
(c) Department for Medicaid Services. 14
(d) Department for Behavioral Health, Developmental and Intellectual 15
Disabilities. 16
(e) Department for Aging and Independent Living. 17
(f) Department for Community Based Services. 18
(g) Department for Family Resource Centers and Volunteer Services. 19
(7) Finance and Administration Cabinet: 20
(a) Office of the Secretary. 21
(b) Office of the Inspector General. 22
(c) Office of Legislative and Intergovernmental Affairs. 23
(d) Office of General Counsel. 24
(e) Office of the Controller. 25
(f) Office of Administrative Services. 26
(g) Office of Policy and Audit. 27
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(h) Department for Facilities and Support Services. 1
(i) Department of Revenue. 2
(j) Commonwealth Office of Technology. 3
(k) State Property and Buildings Commission. 4
(l) Office of Equal Employment Opportunity and Contract Compliance. 5
(m) Kentucky Employees Retirement Systems. 6
(n) Commonwealth Credit Union. 7
(o) State Investment Commission. 8
(p) Kentucky Housing Corporation. 9
(q) Kentucky Local Correctional Facilities Construction Authority. 10
(r) Kentucky Turnpike Authority. 11
(s) Historic Properties Advisory Commission. 12
(t) Kentucky Higher Education Assistance Authority. 13
(u) Kentucky River Authority. 14
(v) Kentucky Teachers' Retirement System Board of Trustees. 15
(w) Executive Branch Ethics Commission. 16
(x) Office of Fleet Management. 17
(8) Tourism, Arts and Heritage Cabinet: 18
(a) Kentucky Department of Tourism. 19
1. Division of Tourism Services. 20
2. Division of Marketing and Administration. 21
3. Division of Communications and Promotions. 22
(b) Kentucky Department of Parks. 23
1. Division of Information Technology. 24
2. Division of Human Resources. 25
3. Division of Financial Operations. 26
4. Division of Purchasing. 27
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5. Division of Facilities. 1
6. Division of Park Operations. 2
7. Division of Sales, Marketing, and Customer Service. 3
8. Division of Engagement. 4
9. Division of Food Services. 5
10. Division of Rangers. 6
(c) Department of Fish and Wildlife Resources. 7
1. Division of Law Enforcement. 8
2. Division of Administrative Services. 9
3. Division of Engineering, Infrastructure, and Technology. 10
4. Division of Fisheries. 11
5. Division of Information and Education. 12
6. Division of Wildlife. 13
7. Division of Marketing. 14
(d) Kentucky Horse Park. 15
1. Division of Support Services. 16
2. Division of Buildings and Grounds. 17
3. Division of Operational Services. 18
(e) Kentucky State Fair Board. 19
1. Office of Administrative and Information Technology Services. 20
2. Office of Human Resources and Access Control. 21
3. Division of Expositions. 22
4. Division of Kentucky Exposition Center Operations. 23
5. Division of Kentucky International Convention Center. 24
6. Division of Public Relations and Media. 25
7. Division of Venue Services. 26
8. Division of Personnel Management and Staff Development. 27
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9. Division of Sales. 1
10. Division of Security and Traffic Control. 2
11. Division of Information Technology. 3
12. Division of the Louisville Arena. 4
13. Division of Fiscal and Contract Management. 5
14. Division of Access Control. 6
(f) Office of the Secretary. 7
1. Office of Finance. 8
2. Office of Government Relations and Administration. 9
(g) Office of Legal Affairs. 10
(h) Office of Human Resources. 11
(i) Office of Public Affairs and Constituent Services. 12
(j) Office of Arts and Cultural Heritage. 13
(k) Kentucky African-American Heritage Commission. 14
(l) Kentucky Foundation for the Arts. 15
(m) Kentucky Humanities Council. 16
(n) Kentucky Heritage Council. 17
(o) Kentucky Arts Council. 18
(p) Kentucky Historical Society. 19
1. Division of Museums. 20
2. Division of Oral History and Educational Outreach. 21
3. Division of Research and Publications. 22
4. Division of Administration. 23
(q) Kentucky Center for the Arts. 24
1. Division of Governor's School for the Arts. 25
(r) Kentucky Artisans Center at Berea. 26
(s) Northern Kentucky Convention Center. 27
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(t) Eastern Kentucky Exposition Center. 1
(9) Personnel Cabinet: 2
(a) Office of the Secretary. 3
(b) Department of Human Resources Administration. 4
(c) Office of Employee Relations. 5
(d) Kentucky Public Employees Deferred Compensation Authority. 6
(e) Office of Administrative Services. 7
(f) Office of Legal Services. 8
(g) Governmental Services Center. 9
(h) Department of Employee Insurance. 10
(i) Office of Diversity, Equality, and Training. 11
(j) Office of Public Affairs. 12
(10) Education and Labor Cabinet: 13
(a) Office of the Secretary. 14
1. Office of Legal Services. 15
a. Workplace Standards Legal Division. 16
b. Workers' Claims Legal Division. 17
c. Workforce Development Legal Division. 18
2. Office of Administrative Services. 19
a. Division of Human Resources Management. 20
b. Division of Fiscal Management. 21
c. Division of Operations and Support Services. 22
3. Office of Technology Services. 23
a. Division of Information Technology Services. 24
4. Office of Policy and Audit. 25
5. Office of Legislative Services. 26
6. Office of Communications. 27
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7. Office of the Kentucky Center for Statistics. 1
8. Board of the Kentucky Center for Statistics. 2
9. Early Childhood Advisory Council. 3
10. Governors' Scholars Program. 4
11. Governor's School for Entrepreneurs Program. 5
12. Foundation for Adult Education. 6
(b) Department of Education. 7
1. Kentucky Board of Education. 8
2. Kentucky Technical Education Personnel Board. 9
3. Education Professional Standards Board. 10
(c) Board of Directors for the Center for School Safety. 11
(d) Department for Libraries and Archives. 12
(e) Kentucky Environmental Education Council. 13
(f) Kentucky Educational Television. 14
(g) Kentucky Commission on the Deaf and Hard of Hearing. 15
(h) Department of Workforce Development. 16
1. Career Development Office. 17
2. Office of Vocational Rehabilitation. 18
a. Division of Kentucky Business Enterprise. 19
b. Division of the Carl D. Perkins Vocational Training Center. 20
c. Division of Blind Services. 21
d. Division of Field Services. 22
e. Statewide Council for Vocational Rehabilitation. 23
f. Employment First Council. 24
g. Division of Program Policy and Support. 25
3. Office of Industry and Apprenticeship Services. 26
a. Division of Apprenticeship. 27
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b. Division of Workforce Talent. 1
4. Kentucky Apprenticeship Council. 2
5. Division of Technical Assistance. 3
6. Office of Adult Education. 4
7. Office of the Kentucky Workforce Innovation Board. 5
(i) Department of Workplace Standards. 6
1. Division of Occupational Safety and Health Compliance. 7
2. Division of Occupational Safety and Health Education and 8
Training. 9
3. Division of Wages and Hours. 10
(j) Office of Unemployment Insurance. 11
(k) Kentucky Unemployment Insurance Commission. 12
(l) Department of Workers' Claims. 13
1. Division of Workers' Compensation Funds. 14
2. Office of Administrative Law Judges. 15
3. Division of Claims Processing. 16
4. Division of Security and Compliance. 17
5. Division of Specialist and Medical Services. 18
6. Workers' Compensation Board. 19
(m) Workers' Compensation Funding Commission. 20
(n) Kentucky Occupational Safety and Health Standards Board. 21
(o) State Labor Relations Board. 22
(p) Employers' Mutual Insurance Authority. 23
(q) Kentucky Occupational Safety and Health Review Commission. 24
(r) Workers' Compensation Nominating Committee. 25
(s) Office of Educational Programs. 26
(t) Kentucky Workforce Innovation Board. 27
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(u) Kentucky Commission on Proprietary Education. 1
(v) Kentucky Work Ready Skills Advisory Committee. 2
(w) Kentucky Geographic Education Board. 3
(x) Department for Disability Determination Services. 4
1. Division of Operations. 5
2. Division of Support Services. 6
3. Division of Specialized Cases. 7
4. Division of Case Processing. 8
III. Other departments headed by appointed officers: 9
(1) Council on Postsecondary Education. 10
(2) Department of Military Affairs. 11
(3) Department for Local Government. 12
(4) Kentucky Commission on Human Rights. 13
(5) Kentucky Commission on Women. 14
(6) Department of Veterans' Affairs. 15
(7) Kentucky Commission on Military Affairs. 16
(8) Office of Minority Empowerment. 17
(9) Governor's Council on Wellness and Physical Activity. 18
(10) Kentucky Communications Network Authority. 19
Section 20. KRS 12.252 is amended to read as follows: 20
(1) There is established within the Public Protection Cabinet a Department of Financial 21
Institutions, a Department of Insurance, a Department of Housi ng, Buildings and 22
Construction, a Department of Professional Licensing, a Department of 23
Psychoactive Substances, and a Department of Alcoholic Beverage Control. Each 24
department shall be headed by a commissioner appointed by the Governor as 25
required by KRS 12.040 and, where appropriate, by KRS 241.015 and 304.2 -020. 26
Commissioners shall be directly responsible to the secretary and shall perform the 27
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functions, powers, and duties provided by law and prescribed by the secretary. 1
(2) The secretary of the Public P rotection Cabinet shall be appointed by the Governor 2
in accordance with KRS 12.255. The Office of the Secretary shall contain the 3
following entities: 4
(a) The Office of Communications and Public Outreach, which shall be headed 5
by an executive director appoi nted by the secretary with the approval of the 6
Governor in accordance with KRS 12.050; 7
(b) The Office of Legal Services, which shall be headed by an executive director 8
appointed by the secretary with the approval of the Governor in accordance 9
with KRS 12.050 and 12.210; 10
(c) The Office of Administrative Hearings, which shall be headed by an executive 11
director appointed by the secretary with the approval of the Governor in 12
accordance with KRS 12.050 and 12.210; and 13
(d) The Office of Administrative Services, which shall be headed by an executive 14
director appointed by the secretary with the approval of the Governor in 15
accordance with KRS 12.050. 16
(3) There is established within the Public Protection Cabinet the Office of Claims and 17
Appeals pursuant to KRS 49.010. 18
(4) There is established within the Public Protection Cabinet the Kentucky Boxing and 19
Wrestling Commission, which shall be headed by an executive director appointed 20
by the secretary with the approval of the Governor as required by KRS 12.050. The 21
executive director shall be directly responsible to the secretary and shall perform 22
the functions, powers, and duties provided by law and prescribed by the secretary. 23
Section 21. KRS 138.870 is amended to read as follows: 24
As used in KRS 138.870 to 138.889, unless the context requires otherwise: 25
(1) "Controlled substance" means any controlled substance, whether real or counterfeit, 26
as defined in KRS 218A.010 or any regulation promulgated thereunder, except that 27
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it shall not include marijuana , hemp-derived cannabinoid products as defined in 1
Section 1 of this Act, or medicinal cannabis; 2
(2) "Dosage unit" means a tablet, capsule, vial, or ampule of a controlled substance or, 3
in cases of mass volume or diluted quantities, the proper dose or quantity of a 4
controlled substance to be taken all at one (1) time or in fractional amounts within a 5
given period, as defined and adopted by the United States Pharmacopeia; 6
(3) "Marijuana": 7
(a) Means marijuana, whether real or counterfeit, as defined in KRS 218A.010; [ 8
and] 9
(b) Does not include medicinal cannabis as defined in KRS 218B.010; and 10
(c) Does not include hemp -derived cannabinoid products as defined in Section 11
1 of this Act; 12
(4) "Offender" means a person who engages in this state in a taxable activity as defined 13
in subsection (6) of this section; 14
(5) "Possessing" includes either actual possession or constructive possession, or a 15
combination of both actual and constructive possession. Mere possession or 16
ownership of real estate or an interest therein does not establish constructive 17
possession; and 18
(6) "Taxable acti vity" means producing, cultivating, manufacturing, importing, 19
transporting, distributing, acquiring, purchasing, storing, selling, using, or otherwise 20
possessing, in violation of KRS Chapter 218A, more than five (5) marijuana plants 21
with foliation, 42.5 gr ams of marijuana which has been detached from the plant on 22
which it grew, seven (7) grams of any controlled substance, or fifty (50) or more 23
dosage units of any controlled substance which is not sold by weight. The weight or 24
dosage units in this subsection shall include the weight of marijuana or the weight 25
or dosage units of the controlled substance, whether pure, impure, or diluted. A 26
quantity of a controlled substance is diluted if it consists of a detectable quantity of 27
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a pure controlled substance and any excipients or fillers. 1
Section 22. KRS 217.039 is amended to read as follows: 2
(1) As used in this section: 3
(a) "Cannabidiol" means a non -psychoactive cannabinoid found in the hemp 4
plant Cannabis sativa which has the c hemical name 2 -[(1R,6R)-3-methyl-6-5
prop-1-en-2-ylcyclohex-2-en-1-yl]-5-pentylbenzene-1,3-diol; 6
(b) "Certificate of analysis" means a document produced by a laboratory that has 7
been accredited pursuant to standards of the International Organization for 8
Standardization, attesting to the composition of a product. The certificate of 9
analysis shall include but not be limited to the amount of: 10
1. Delta-9 tetrahydrocannabinol; 11
2. Tetrahydrocannabinolic-acid; 12
3. [, the amount of ]Other cannabinoids; 13
4. [, the amount of ]Pesticide residues; 14
5. [, the amount of ]Heavy metal traces; 15
6. [, the amount of ]Mycotoxin contaminants; 16
7. [, the amount of ]Residual solvents;[,] and 17
8. [the amount of ]Microbiological contaminants; 18
(c) "Hemp" has the same meaning as in Section 1 of this Act[KRS 260.850]; and 19
(d) "Quick response code" or "QR code" means a type of machine -readable, two 20
(2) dimensional bar code that stores information about a product. 21
(2) A manufacturer or processor of hemp-derived cannabinoid[ingestible or cosmetic 22
cannabidiol] products located in Kentucky shall: 23
(a) Be permitted [ as a food manufacturer or a cosmetic manufacturer] by the 24
Department of Psychoactive Substances [cabinet] and shall provide the 25
following information: 26
1. The name of the manufactur er or processor and the physical address 27
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where production or processing occurs; and 1
2. A listing of the hemp-derived cannabinoid[cannabidiol] products to be 2
produced or processed; and 3
(b) Obtain a certificate of analysis for all hemp-derived 4
cannabinoid[cannabidiol] products to be sold or otherwise distributed in the 5
Commonwealth. 6
(3) All ingestible or cosmetic hemp-derived cannabinoid[cannabidiol] products sold or 7
otherwise distributed in the Commonwealth shall bear labeling to allow the 8
consumer to access information on the product, including a certificate of analysis 9
for the product [, the location where the hemp was grown,] and the address and 10
phone number of the manufacturer or distributor using the following: 11
(a) A scannable bar code, including the batch number or serial number of the 12
product; 13
(b) A QR code; or 14
(c) A web address linked to a document or website. 15
(4) Any product labeling or advertising material for any ingestible or cosmet ic hemp-16
derived cannabinoid [cannabidiol] product sold or otherwise distributed in the 17
Commonwealth shall not bear any claims stating that the product can diagnose, 18
treat, cure, or prevent any disease. 19
(5) The cabinet shall promulgate administrative regulat ions in accordance with KRS 20
Chapter 13A to establish labeling requirements for ingestible or cosmetic hemp-21
derived cannabinoid[cannabidiol] products in accordance with of this section. 22
(6) On and after the effective date of this Act, the Department of Psyc hoactive 23
Substances[(a) the cabinet] shall solely regulate and license the 24
manufacture, distribution, and retail sale[manufacturers] of cannabis-infused 25
beverages[. 26
(b) After the Department of Alcoholic Beverage Control has promulgated 27
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administrative regulations under KRS 243.401 or July 1, 2026, whichever is 1
earlier, this section shall not apply to any distributor or retailer of cannabis -2
infused beverages licensed under KRS Chapters 241 to 244. The distribution 3
and retail sale of cannabis -infused beverages shall then be regulated solely by 4
the Department of Alcoholic Beverage Control under KRS Chapter 243 and 5
the administrative regulations promulgated thereto]. 6
Section 23. KRS 218A.010 is amended to read as follows: 7
As used in this chapter, unless the context otherwise requires: 8
(1) "Administer" means the direct application of a controlled substance, whether by 9
injection, inhalation, ingestion, or any other means, to the body of a patient or 10
research subject by: 11
(a) A practitioner or by his or her authorized agent under his or her immediate 12
supervision and pursuant to his or her order; or 13
(b) The patient or research subject at the direction and in the presence of the 14
practitioner; 15
(2) "Anabolic steroid" means any drug or ho rmonal substance chemically and 16
pharmacologically related to testosterone that promotes muscle growth and includes 17
those substances classified as Schedule III controlled substances pursuant to KRS 18
218A.020 but does not include estrogens, progestins, and anticosteroids; 19
(3) "Cabinet" means the Cabinet for Health and Family Services; 20
(4) "Carfentanil" means any substance containing any quantity of carfentanil, or any of 21
its salts, isomers, or salts of isomers; 22
(5) "Certified community based palliative care pr ogram" means a palliative care 23
program which has received certification from the Joint Commission; 24
(6) "Child" means any person under the age of majority as specified in KRS 2.015; 25
(7) "Cocaine" means a substance containing any quantity of cocaine, its sal ts, optical 26
and geometric isomers, and salts of isomers; 27
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(8) "Controlled substance" means methamphetamine, or a drug, substance, or 1
immediate precursor in Schedules I through V and includes a controlled substance 2
analogue; 3
(9) (a) "Controlled substance ana logue," except as provided in paragraph (b) of this 4
subsection, means a substance: 5
1. The chemical structure of which is substantially similar to the structure 6
of a controlled substance in Schedule I or II; and 7
2. Which has a stimulant, depressant, or hall ucinogenic effect on the 8
central nervous system that is substantially similar to or greater than the 9
stimulant, depressant, or hallucinogenic effect on the central nervous 10
system of a controlled substance in Schedule I or II; or 11
3. With respect to a particular person, which such person represents or 12
intends to have a stimulant, depressant, or hallucinogenic effect on the 13
central nervous system that is substantially similar to or greater than the 14
stimulant, depressant, or hallucinogen ic effect on the central nervous 15
system of a controlled substance in Schedule I or II. 16
(b) Such term does not include: 17
1. Any substance for which there is an approved new drug application; 18
2. With respect to a particular person, any substance if an exempti on is in 19
effect for investigational use for that person pursuant to federal law to 20
the extent conduct with respect to such substance is pursuant to such 21
exemption; or 22
3. Any substance to the extent not intended for human consumption before 23
the exemption de scribed in subparagraph 2. of this paragraph takes 24
effect with respect to that substance; 25
(10) "Counterfeit substance" means a controlled substance which, or the container or 26
labeling of which, without authorization, bears the trademark, trade name, or oth er 27
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identifying mark, imprint, number, or device, or any likeness thereof, of a 1
manufacturer, distributor, or dispenser other than the person who in fact 2
manufactured, distributed, or dispensed the substance; 3
(11) "Dispense" means to deliver a controlled su bstance to an ultimate user or research 4
subject by or pursuant to the lawful order of a practitioner, including the packaging, 5
labeling, or compounding necessary to prepare the substance for that delivery; 6
(12) "Dispenser" means a person who lawfully dispe nses a Schedule II, III, IV, or V 7
controlled substance to or for the use of an ultimate user; 8
(13) "Distribute" means to deliver other than by administering or dispensing a controlled 9
substance; 10
(14) "Dosage unit" means a single pill, capsule, ampule, liqu id, or other form of 11
administration available as a single unit; 12
(15) "Drug" means: 13
(a) Substances recognized as drugs in the official United States Pharmacopoeia, 14
official Homeopathic Pharmacopoeia of the United States, or official National 15
Formulary, or any supplement to any of them; 16
(b) Substances intended for use in the diagnosis, care, mitigation, treatment, or 17
prevention of disease in man or animals; 18
(c) Substances (other than food) intended to affect the structure or any function of 19
the body of man or animals; and 20
(d) Substances intended for use as a component of any article specified in this 21
subsection. 22
It does not include devices or their components, parts, or accessories; 23
(16) "Fentanyl" means a substance containing any quantity of fentanyl, or any of its 24
salts, isomers, or salts of isomers; 25
(17) "Fentanyl derivative" means a substance containing any quantity of any chemical 26
compound, except compounds specifically scheduled as controlled substances by 27
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statute or by administrative regulation pursuant to this chapter, which is structurally 1
derived from 1-ethyl-4-(N-phenylamido) piperadine: 2
(a) By substitution: 3
1. At the 2-position of the 1-ethyl group with a phenyl, furan, thiophene, or 4
ethyloxotetrazole ring system; and 5
2. Of the terminal amido hydrog en atom with an alkyl, alkoxy, cycloalkyl, 6
or furanyl group; and 7
(b) Which may be further modified in one (1) or more of the following ways: 8
1. By substitution on the N -phenyl ring to any extent with alkyl, alkoxy, 9
haloalkyl, hydroxyl, or halide substituents; 10
2. By substitution on the piperadine ring to any extent with alkyl, allyl, 11
alkoxy, hydroxy, or halide substituents at the 2 -, 3 -, 5 -, and/or 6 - 12
positions; 13
3. By substitution on the piperadine ring to any extent with a phenyl, 14
alkoxy, or carboxylate ester substituent at the 4- position; or 15
4. By substitution on the 1 -ethyl group to any extent with alkyl, alkoxy, or 16
hydroxy substituents; 17
(18) "Good-faith prior examination," as used in KRS Chapter 218A and for criminal 18
prosecution only, means an in-person medical examination of the patient conducted 19
by the prescribing practitioner or other health -care professional routinely relied 20
upon in the ordinary course of his or her practice, at which time the patient is 21
physically examined and a medical history of th e patient is obtained. "In -person" 22
includes telehealth examinations. This subsection shall not be applicable to hospice 23
providers licensed pursuant to KRS Chapter 216B; 24
(19) "Hazardous chemical substance" includes any chemical substance used or intended 25
for use in the illegal manufacture of a controlled substance as defined in this section 26
or the illegal manufacture of methamphetamine as defined in KRS 218A.1431, 27
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which: 1
(a) Poses an explosion hazard; 2
(b) Poses a fire hazard; or 3
(c) Is poisonous or injurious if handled, swallowed, or inhaled; 4
(20) "Heroin" means a substance containing any quantity of heroin, or any of its salts, 5
isomers, or salts of isomers; 6
(21) "Hydrocodone combination product" means a drug with: 7
(a) Not more than three hundred (300) milligrams of dihydrocodeinone, or any of 8
its salts, per one hundred (100) milliliters or not more than fifteen (15) 9
milligrams per dosage unit, with a fourfold or greater quantity of an 10
isoquinoline alkaloid of opium; or 11
(b) Not more than three hundred (300) milligrams of dihydrocodeinone, or any of 12
its salts, per one hundred (100) milliliters or not more than fifteen (15) 13
milligrams per dosage unit, with one (1) or more active, no nnarcotic 14
ingredients in recognized therapeutic amounts; 15
(22) "Immediate precursor" means a substance which is the principal compound 16
commonly used or produced primarily for use, and which is an immediate chemical 17
intermediary used or likely to be used in the manufacture of a controlled substance 18
or methamphetamine, the control of which is necessary to prevent, curtail, or limit 19
manufacture; 20
(23) "Industrial hemp" has the same meaning as in Section 1 of this Act[KRS 260.850]; 21
(24) "Industrial hemp products" has the same meaning as in Section 1 of this Act [KRS 22
260.850]; 23
(25) "Intent to manufacture" means any evidence which demonstrates a person's 24
conscious objective to manufacture a controlled substance or methamphetamine. 25
Such evidence includes but is not li mited to statements and a chemical substance's 26
usage, quantity, manner of storage, or proximity to other chemical substances or 27
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equipment used to manufacture a controlled substance or methamphetamine; 1
(26) "Isomer" means the optical isomer, except the Cabi net for Health and Family 2
Services may include the optical, positional, or geometric isomer to classify any 3
substance pursuant to KRS 218A.020; 4
(27) "Manufacture," except as provided in KRS 218A.1431, means the production, 5
preparation, propagation, compoun ding, conversion, or processing of a controlled 6
substance, either directly or indirectly by extraction from substances of natural 7
origin or independently by means of chemical synthesis, or by a combination of 8
extraction and chemical synthesis, and includes any packaging or repackaging of 9
the substance or labeling or relabeling of its container except that this term does not 10
include activities: 11
(a) By a practitioner as an incident to his or her administering or dispensing of a 12
controlled substance in the course of his or her professional practice; 13
(b) By a practitioner, or by his or her authorized agent under his supervision, for 14
the purpose of, or as an incident to, research, teaching, or chemical analysis 15
and not for sale; or 16
(c) By a pharmacist as an incid ent to his or her dispensing of a controlled 17
substance in the course of his or her professional practice; 18
(28) "Marijuana" means all parts of the plant Cannabis sp., whether growing or not; the 19
seeds thereof; the resin extracted from any part of the plant; and every compound, 20
manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin 21
or any compound, mixture, or preparation which contains any quantity of these 22
substances. The term "marijuana" does not include: 23
(a) [Industrial ] Hemp that is in the possession, custody, or control of a person 24
who holds a license issued by the Department of Agriculture permitting that 25
person to cultivate[,]or handle[, or process industrial] hemp; 26
(b) Hemp that is in the possession, custody, or contro l of a person who holds a 27
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license issued by the Department of Psychoactive Substances permitting that 1
person to handle or process hemp; 2
(c) [Industrial ]Hemp products that do not include any living plants, viable seeds, 3
leaf materials, or floral materials; 4
(d)[(c)] Hemp-derived cannabinoids [The substance cannabidiol] , when 5
transferred, dispensed, or administered pursuant to the written order of a 6
physician practicing at a hospital or associated clinic affiliated with a 7
Kentucky public university having a college or school of medicine; 8
(e)[(d)] For persons participatin g in a clinical trial or in an expanded access 9
program, a drug or substance approved for the use of those participants by the 10
United States Food and Drug Administration; 11
(f)[(e)] A hemp-derived cannabinoid [cannabidiol] product[ derived from 12
industrial hemp,] as defined in Section 1 of this Act[KRS 260.850]; 13
(g)[(f)] For the purpose of conducting scientific research, a cannabinoid product 14
derived from [ industrial] hemp, as defined in Section 1 of this Act [KRS 15
260.850]; 16
(h)[(g)] A cannabinoid product approved as a prescription medication by the 17
United States Food and Drug Administration;[ or] 18
(i)[(h)] Medicinal cannabis as defined in KRS 218B.010; or 19
(j) Products regulated under KRS Chapter 239; 20
(29) "Medical history," as used in KRS Chapter 218A and for criminal prosecution only, 21
means an accounting of a patient's medical background, including but not limited to 22
prior medical conditions, prescriptions, and family background; 23
(30) "Medical order," as u sed in KRS Chapter 218A and for criminal prosecution only, 24
means a lawful order of a specifically identified practitioner for a specifically 25
identified patient for the patient's health -care needs. "Medical order" may or may 26
not include a prescription drug order; 27
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(31) "Medical record," as used in KRS Chapter 218A and for criminal prosecution only, 1
means a record, other than for financial or billing purposes, relating to a patient, 2
kept by a practitioner as a result of the practitioner-patient relationship; 3
(32) "Methamphetamine" means any substance that contains any quantity of 4
methamphetamine, or any of its salts, isomers, or salts of isomers; 5
(33) "Narcotic drug" means any of the following, whether produced directly or indirectly 6
by extraction from substanc es of vegetable origin, or independently by means of 7
chemical synthesis, or by a combination of extraction and chemical synthesis: 8
(a) Opium and opiate, and any salt, compound, derivative, or preparation of 9
opium or opiate; 10
(b) Any salt, compound, isomer, derivative, or preparation thereof which is 11
chemically equivalent or identical with any of the substances referred to in 12
paragraph (a) of this subsection, but not including the isoquinoline alkaloids 13
of opium; 14
(c) Opium poppy and poppy straw; 15
(d) Coca leav es, except coca leaves and extracts of coca leaves from which 16
cocaine, ecgonine, and derivatives of ecgonine or their salts have been 17
removed; 18
(e) Cocaine, its salts, optical and geometric isomers, and salts of isomers; 19
(f) Ecgonine, its derivatives, their salts, isomers, and salts of isomers; and 20
(g) Any compound, mixture, or preparation which contains any quantity of any of 21
the substances referred to in paragraphs (a) to (f) of this subsection; 22
(34) "Opiate" means any substance having an addiction -forming or addiction-sustaining 23
liability similar to morphine or being capable of conversion into a drug having 24
addiction-forming or addiction -sustaining liability. It does not include, unless 25
specifically designated as controlled under KRS 218A.020, the dextroro tatory 26
isomer of 3 -methoxy-n-methylmorphinan and its salts (dextromethorphan). It does 27
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include its racemic and levorotatory forms; 1
(35) "Opium poppy" means the plant of the species papaver somniferum L., except its 2
seeds; 3
(36) "Person" means individual, co rporation, government or governmental subdivision 4
or agency, business trust, estate, trust, partnership or association, or any other legal 5
entity; 6
(37) "Physical injury" has the same meaning it has in KRS 500.080; 7
(38) "Poppy straw" means all parts, except the seeds, of the opium poppy, after mowing; 8
(39) "Pharmacist" means a natural person licensed by this state to engage in the practice 9
of the profession of pharmacy; 10
(40) "Practitioner" means a physician, dentist, podiatrist, veterinarian, scientific 11
investigator, optometrist as authorized in KRS 320.240, advanced practice 12
registered nurse as authorized under KRS 314.011, physician assistant as authorized 13
under KRS 311.858, or other person licensed, registered, or otherwise permitted by 14
state or federal law to acquire, distribute, dispense, conduct research with respect to, 15
or to administer a controlled substance in the course of professional practice or 16
research in this state. "Practitioner" also includes a physician, dentist, podiatrist, 17
veterinarian, or advanced practice registered nurse authorized under KRS 314.011 18
who is a resident of and actively practicing in a state other than Kentucky and who 19
is licensed and has prescriptive authority for controlled substances under the 20
professional licensing laws o f another state, unless the person's Kentucky license 21
has been revoked, suspended, restricted, or probated, in which case the terms of the 22
Kentucky license shall prevail; 23
(41) "Practitioner-patient relationship," as used in KRS Chapter 218A and for crimina l 24
prosecution only, means a medical relationship that exists between a patient and a 25
practitioner or the practitioner's designee, after the practitioner or his or her 26
designee has conducted at least one (1) good-faith prior examination; 27
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(42) "Prescription" means a written, electronic, or oral order for a drug or medicine, or 1
combination or mixture of drugs or medicines, or proprietary preparation, signed or 2
given or authorized by a medical, dental, chiropody, veterinarian, optometric 3
practitioner, or advanc ed practice registered nurse, and intended for use in the 4
diagnosis, cure, mitigation, treatment, or prevention of disease in man or other 5
animals; 6
(43) "Prescription blank," with reference to a controlled substance, means a document 7
that meets the requirements of KRS 218A.204 and 217.216; 8
(44) "Presumptive probation" means a sentence of probation not to exceed the maximum 9
term specified for the offense, subject to conditions otherwise authorized by law, 10
that is presumed to be the appropriate sentence for c ertain offenses designated in 11
this chapter, notwithstanding contrary provisions of KRS Chapter 533. That 12
presumption shall only be overcome by a finding on the record by the sentencing 13
court of substantial and compelling reasons why the defendant cannot be safely and 14
effectively supervised in the community, is not amenable to community -based 15
treatment, or poses a significant risk to public safety; 16
(45) "Production" includes the manufacture, planting, cultivation, growing, or harvesting 17
of a controlled substance; 18
(46) "Recovery program" means an evidence -based, nonclinical service that assists 19
individuals and families working toward sustained recovery from substance use and 20
other criminal risk factors. This can be done through an array of support programs 21
and services that are delivered through residential and nonresidential means; 22
(47) "Salvia" means Salvia divinorum or Salvinorin A and includes all parts of the plant 23
presently classified botanically as Salvia divinorum, whether growing or not, the 24
seeds ther eof, any extract from any part of that plant, and every compound, 25
manufacture, derivative, mixture, or preparation of that plant, its seeds, or its 26
extracts, including salts, isomers, and salts of isomers whenever the existence of 27
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such salts, isomers, and salts of isomers is possible within the specific chemical 1
designation of that plant, its seeds, or extracts. The term shall not include any other 2
species in the genus salvia; 3
(48) "Second or subsequent offense" means that for the purposes of this chapter a n 4
offense is considered as a second or subsequent offense, if, prior to his or her 5
conviction of the offense, the offender has at any time been convicted under this 6
chapter, or under any statute of the United States, or of any state relating to 7
substances classified as controlled substances or counterfeit substances, except that 8
a prior conviction for a nontrafficking offense shall be treated as a prior offense 9
only when the subsequent offense is a nontrafficking offense. For the purposes of 10
this section, a conviction voided under KRS 218A.275 or 218A.276 shall not 11
constitute a conviction under this chapter; 12
(49) "Sell" means to dispose of a controlled substance to another person for 13
consideration or in furtherance of commercial distribution; 14
(50) "Serious physical injury" has the same meaning it has in KRS 500.080; 15
(51) "Synthetic cannabinoids or piperazines" means any chemical compound which is 16
not approved by the United States Food and Drug Administration or, if approved, 17
which is not dispensed o r possessed in accordance with state and federal law, that 18
contains Benzylpiperazine (BZP); Trifluoromethylphenylpiperazine (TFMPP); 1,1 -19
Dimethylheptyl-11-hydroxytetrahydrocannabinol (HU -210); 1 -Butyl-3-(1-20
naphthoyl)indole; 1 -Pentyl-3-(1-naphthoyl)indole; dexanabinol (HU -211); or any 21
compound in the following structural classes: 22
(a) Naphthoylindoles: Any compound containing a 3 -(1-naphthoyl)indole 23
structure with substitution at the nitrogen atom of the indole ring by an alkyl, 24
haloalkyl, alkenyl, cycloalkyl methyl, cycloalkylethyl, 1 -(N-methyl-2-25
piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl group, whether or not further 26
substituted in the indole ring to any extent and whether or not substituted in 27
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the naphthyl ring to any extent. Examples of this structural c lass include but 1
are not limited to JWH-015, JWH-018, JWH-019, JWH-073, JWH-081, JWH-2
122, JWH-200, and AM-2201; 3
(b) Phenylacetylindoles: Any compound containing a 3 -phenylacetylindole 4
structure with substitution at the nitrogen atom of the indole ring by a n alkyl, 5
haloalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1 -(N-methyl-2-6
piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl group whether or not further 7
substituted in the indole ring to any extent and whether or not substituted in 8
the phenyl ring to any e xtent. Examples of this structural class include but are 9
not limited to JWH-167, JWH-250, JWH-251, and RCS-8; 10
(c) Benzoylindoles: Any compound containing a 3-(benzoyl)indole structure with 11
substitution at the nitrogen atom of the indole ring by an alkyl, h aloalkyl, 12
alkenyl, cycloalkylmethyl, cycloalkylethyl, 1 -(N-methyl-2-13
piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl group whether or not further 14
substituted in the indole ring to any extent and whether or not substituted in 15
the phenyl ring to any extent. Exa mples of this structural class include but are 16
not limited to AM -630, AM-2233, AM-694, Pravadoline (WIN 48,098), and 17
RCS-4; 18
(d) Cyclohexylphenols: Any compound containing a 2 -(3-19
hydroxycyclohexyl)phenol structure with substitution at the 5 -position of the 20
phenolic ring by an alkyl, haloalkyl, alkenyl, cycloalkylmethyl, 21
cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl 22
group whether or not substituted in the cyclohexyl ring to any extent. 23
Examples of this structural class include b ut are not limited to CP 47,497 and 24
its C8 homologue (cannabicyclohexanol); 25
(e) Naphthylmethylindoles: Any compound containing a 1H -indol-3-yl-(1-26
naphthyl)methane structure with substitution at the nitrogen atom of the 27
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indole ring by an alkyl, haloalkyl, a lkenyl, cycloalkylmethyl, cycloalkylethyl, 1
1-(N-methyl-2-piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl group whether 2
or not further substituted in the indole ring to any extent and whether or not 3
substituted in the naphthyl ring to any extent. Examples of this structural class 4
include but are not limited to JWH-175, JWH-184, and JWH-185; 5
(f) Naphthoylpyrroles: Any compound containing a 3 -(1-naphthoyl)pyrrole 6
structure with substitution at the nitrogen atom of the pyrrole ring by an alkyl, 7
haloalkyl, alkenyl , cycloalkylmethyl, cycloalkylethyl, 1 -(N-methyl-2-8
piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl group whether or not further 9
substituted in the pyrrole ring to any extent and whether or not substituted in 10
the naphthyl ring to any extent. Examples of this structural class include but 11
are not limited to JWH-030, JWH-145, JWH-146, JWH-307, and JWH-368; 12
(g) Naphthylmethylindenes: Any compound containing a 1 -(1-13
naphthylmethyl)indene structure with substitution at the 3 -position of the 14
indene ring by an alkyl, h aloalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 15
1-(N-methyl-2-piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl group whether 16
or not further substituted in the indene ring to any extent and whether or not 17
substituted in the naphthyl ring to any extent. Examples of this structural class 18
include but are not limited to JWH-176; 19
(h) Tetramethylcyclopropanoylindoles: Any compound containing a 3 -(1-20
tetramethylcyclopropoyl)indole structure with substitution at the nitrogen 21
atom of the indole ring by an alkyl, ha loalkyl, cycloalkylmethyl, 22
cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl 23
group, whether or not further substituted in the indole ring to any extent and 24
whether or not further substituted in the tetramethylcyclopropyl ring to any 25
extent. Examples of this structural class include but are not limited to UR -144 26
and XLR-11; 27
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(i) Adamantoylindoles: Any compound containing a 3 -(1-adamantoyl)indole 1
structure with substitution at the nitrogen atom of the indole ring by an alkyl, 2
haloalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1 -(N-methyl-2-3
piperidinyl)methyl, or 2 -(4-morpholinyl)ethyl group, whether or not further 4
substituted in the indole ring to any extent and whether or not substituted in 5
the adamantyl ring system to any extent . Examples of this structural class 6
include but are not limited to AB-001 and AM-1248; or 7
(j) Any other synthetic cannabinoid or piperazine which is not approved by the 8
United States Food and Drug Administration or, if approved, which is not 9
dispensed or possessed in accordance with state and federal law; 10
(52) "Synthetic cathinones" means any chemical compound which is not approved by 11
the United States Food and Drug Administration or, if approved, which is not 12
dispensed or possessed in accordance with state and federal law (not including 13
bupropion or compounds listed under a different schedule) structurally derived from 14
2-aminopropan-1-one by substitution at the 1 -position with either phenyl, naphthyl, 15
or thiophene ring systems, whether or not the compound i s further modified in one 16
(1) or more of the following ways: 17
(a) By substitution in the ring system to any extent with alkyl, alkylenedioxy, 18
alkoxy, haloalkyl, hydroxyl, or halide substituents, whether or not further 19
substituted in the ring system by one ( 1) or more other univalent substituents. 20
Examples of this class include but are not limited to 3,4 -21
Methylenedioxycathinone (bk-MDA); 22
(b) By substitution at the 3 -position with an acyclic alkyl substituent. Examples 23
of this class include but are not limited to 2 -methylamino-1-phenylbutan-1-24
one (buphedrone); 25
(c) By substitution at the 2 -amino nitrogen atom with alkyl, dialkyl, benzyl, or 26
methoxybenzyl groups, or by inclusion of the 2 -amino nitrogen atom in a 27
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cyclic structure. Examples of this class include bu t are not limited to 1
Dimethylcathinone, Ethcathinone, and -Pyrrolidinopropiophenone (-PPP); 2
or 3
(d) Any other synthetic cathinone which is not approved by the United States 4
Food and Drug Administra tion or, if approved, is not dispensed or possessed 5
in accordance with state or federal law; 6
(53) "Synthetic drugs" means any synthetic cannabinoids or piperazines or any synthetic 7
cathinones; 8
(54) "Telehealth" has the same meaning it has in KRS 211.332; 9
(55) "Tetrahydrocannabinols" means synthetic equivalents of the substances contained 10
in the plant, or in the resinous extractives of the plant Cannabis, sp. or synthetic 11
substances, derivatives, and their isomers with similar chemical structure and 12
pharmacological activity such as the following: 13
(a) Delta 1 cis or trans tetrahydrocannabinol, and their optical isomers; 14
(b) Delta 6 cis or trans tetrahydrocannabinol, and their optical isomers; and 15
(c) Delta 3, 4 cis or trans tetrahydrocannabinol, and its optical isomers; 16
(56) "Traffic," except as provided in KRS 218A.1431, means to manufacture, distribute, 17
dispense, sell, transfer, or possess with intent to manufacture, distribute, dispense, 18
or sell a controlled substance; 19
(57) "Transfer" means to dispose of a c ontrolled substance to another person without 20
consideration and not in furtherance of commercial distribution; and 21
(58) "Ultimate user" means a person who lawfully possesses a controlled substance for 22
his or her own use or for the use of a member of his or her household or for 23
administering to an animal owned by him or her or by a member of his or her 24
household. 25
Section 24. KRS 218B.010 is amended to read as follows: 26
For the purposes of this chapter, unless the context otherwise requires: 27
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(1) "Bona fide practitioner -patient relationship" means a treating or consulting 1
relationship, during the course of which a medicinal cannabis practitioner has: 2
(a) Completed an initial in -person examination and assessment of the patient's 3
medical history and current medical condition which shall include a review 4
of: 5
1. The patient's medical records for the previous twelve (12) months; 6
2. All other available medical r ecords relevant to the patient's qualifying 7
medical condition; 8
3. Any medications that the patient is currently taking; and 9
4. Any other possible risks or side effects that may be associated with the 10
use of medicinal cannabis; 11
(b) Consulted with the patien t with respect to the possible medical, therapeutic, 12
and palliative properties of medicinal cannabis; 13
(c) Advised the patient of the possible risks and side effects associated with the 14
use of medicinal cannabis, including possible interactions between medi cinal 15
cannabis and any other drug or medication that the patient is taking at that 16
time; and 17
(d) Established an expectation that he or she will provide follow -up care and 18
treatment to the patient in accordance with administrative regulations 19
promulgated pursuant to KRS 218B.050(10); 20
(2) "Cabinet" means the Cabinet for Health and Family Services; 21
(3) "Cannabis business" means an entity licensed under this chapter as a cultivator, 22
dispensary, processor, producer, or safety compliance facility; 23
(4) "Cannabis b usiness agent" means a principal officer, board member, employee, 24
volunteer, or agent of a cannabis business; 25
(5) "Cardholder" means: 26
(a) A registered qualified patient, designated caregiver, or visiting qualified 27
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patient who has applied for, obtained, and possesses a valid registry 1
identification card issued by the cabinet; or 2
(b) A visiting qualified patient who has obtained and possesses: 3
1. A valid out-of-state registry identification card; and 4
2. Documentation of having been diagnosed with a qualifying medical 5
condition; 6
(6) "Cultivator" means an entity licensed as such under KRS 218B.080, 218B.085, and 7
218B.090; 8
(7) "Cultivator agent" means a principal officer, board member, employee, volunteer, 9
or agent of a cultivator; 10
(8) "Designated caregiver" means a person who has registered as such with the cabinet 11
under KRS 218B.055 and 218B.060; 12
(9) "Dispensary" means an entity licensed as such under KRS 218B.080, 218B.085, 13
and 218B.090; 14
(10) "Dispensary agent" means a principal officer, board member, employee, volunteer, 15
or agent of a dispensary; 16
(11) "Disqualifying felony offense" means: 17
(a) A felony offense that resulted in the person being classified by the 18
Department of Corrections as a violent offender under KRS 439.3401; or 19
(b) A violation of a state or federal controlled substance law that was classified as 20
a felony in the jurisdiction where the person was convicted, except: 21
1. An offense for which the sentence, including any term of probation, 22
incarceration, or supervised release, was completed five (5) or more 23
years earlier; or 24
2. An offense that, as determined by the cabinet, consisted of conduct for 25
which this chapter would likely have prevented a conviction, but the 26
conduct either occurred prior to the enactment of this chapter or was 27
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prosecuted by an authority other than the Commonwealth of Kentucky; 1
(12) "Enclosed, locked facility" means an indoor growing space such as a room, 2
greenhouse, building, or other indoor enclosed area that is maintained and operated 3
by a cultivator or producer and is equipped with locks and other secur ity devices 4
that permit access only by authorized agents of the cultivator or producer, as 5
required by the cabinet; 6
(13) "Growth area" has the same meaning as an enclosed, locked facility; 7
(14) "Marijuana" has the same meaning as in KRS 218A.010; 8
(15) "Medicinal cannabis": 9
(a) Means marijuana as defined in KRS 218A.010 when cultivated, harvested, 10
processed, produced, transported, dispensed, distributed, sold, possessed, or 11
used in accordance with this chapter; 12
(b) Includes medicinal cannabis products and raw plant material; and 13
(c) Does not include[ industrial] hemp,[ or] industrial hemp products, and hemp-14
derived cannabinoid products as defined in Section 1 of this Act [KRS 15
260.850]; 16
(16) "Medicinal cannabis accessories" means any equipment, product, or material of any 17
kind which is used, intended for use, or designed for use in the preparing, storing, 18
using, or consuming medicinal cannabis in accordance with this chapter; 19
(17) "Medicinal cannabis practitioner" me ans a physician or an advanced practice 20
registered nurse who is authorized to prescribe controlled substances under KRS 21
314.042, who is authorized by his or her state licensing board to provide written 22
certifications pursuant to KRS 218B.050; 23
(18) "Medicinal cannabis product": 24
(a) Means any compound, manufacture, salt, derivative, mixture, or preparation 25
of any part of the plant Cannabis sp., its seeds or its resin; or any compound, 26
mixture, or preparation which contains any quantity of these substances whe n 27
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cultivated, harvested, processed, produced, transported, dispensed, distributed, 1
sold, possessed, or used in accordance with this chapter; and 2
(b) Does not include industrial hemp products and hemp -derived cannabinoid 3
products as defined in Section 1 of this Act[KRS 260.850]; 4
(19) "Minor" means a person less than eighteen (18) years of age; 5
(20) "Out-of-state registry identification card" means a registry identification card, or an 6
equivalent document, that was issued pursuant to the laws of another state , district, 7
territory, commonwealth, or insular possession of the United States; 8
(21) "Processor" means an entity licensed as such under KRS 218B.080, 218B.085, and 9
218B.090; 10
(22) "Processor agent" means a principal officer, board member, employee, volunteer, or 11
agent of a processor; 12
(23) "Producer" means an entity licensed as such under KRS 218B.080, 218B.085, and 13
218B.090; 14
(24) "Producer agent" means a principal officer, board member, employee, volunteer, or 15
agent of a producer; 16
(25) "Qualified patient" means a person who has obtained a written certification from a 17
medicinal cannabis practitioner with whom he or she has a bona fide practitioner -18
patient relationship; 19
(26) "Qualifying medical condition" means: 20
(a) Any type or form of cancer regardless of stage; 21
(b) Chronic, severe, intractable, or debilitating pain; 22
(c) Epilepsy or any other intractable seizure disorder; 23
(d) Multiple sclerosis, muscle spasms, or spasticity; 24
(e) Chronic nausea or cyclical vomiting syndrome that has proven resistant to 25
other conventional medical treatments; 26
(f) Post-traumatic stress disorder; and 27
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(g) Any other medical condition or disease for which the Kentucky Center for 1
Cannabis established in KRS 164.983, or its successor, determines that 2
sufficient scientific data and evidence exists to demonstrate that an individual 3
diagnosed with that condition o r disease is likely to receive medical, 4
therapeutic, or palliative benefits from the use of medicinal cannabis; 5
(27) "Raw plant material": 6
(a) Means the trichome -covered part of the female plant Cannabis sp. or any 7
mixture of shredded leaves, stems, seeds, and flowers of the Cannabis sp. 8
plant; and 9
(b) Does not include plant material obtained from [ industrial] hemp as defined in 10
Section 1 of this Act[KRS 260.850]; 11
(28) "Registered qualified patient" means a qualified patient who has applied for, 12
obtained, and possesses a valid registry identification card issued by the cabinet; 13
(29) "Registry identification card" means a document issued by the cabinet that 14
identifies a person as a registered qualified patient, visiting qualified patient, or 15
designated caregiver; 16
(30) "Safety compliance facility" means an entity licensed as such under KRS 218B.080, 17
218B.085, and 218B.090; 18
(31) "Safety compliance facility agent" means a principal officer, board member, 19
employee, volunteer, or agent of a safety compliance facility; 20
(32) "Seedling" means a medicinal cannabis plant that has no flowers and is not taller 21
than eight (8) inches; 22
(33) "Serious violation" means: 23
(a) Any violation of this chapter or any administrative regulation promulgated 24
thereunder that is capable of c ausing death or which causes serious and 25
prolonged disfigurement, prolonged impairment of health, or prolonged loss 26
or impairment of the function of any bodily organ; 27
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(b) The diversion of medicinal cannabis for use not regulated pursuant to this 1
chapter; or 2
(c) Any act that would constitute a violation of KRS 218A.1421; 3
(34) "Smoking" means the inhalation of smoke produced from the combustion of raw 4
plant material when ignited by a flame; 5
(35) "State licensing board" means: 6
(a) The Kentucky Board of Medical Licensure; or 7
(b) The Kentucky Board of Nursing; 8
(36) "Telehealth" has the same meaning as in KRS 211.332; 9
(37) "Use of medicinal cannabis": 10
(a) Includes the acquisition, administration, possession, transfer, transportation, 11
or consumption of medicinal ca nnabis or medicinal cannabis accessories by a 12
cardholder in accordance with this chapter; and 13
(b) Does not include: 14
1. Cultivation of marijuana by a cardholder; 15
2. The use or consumption of marijuana by smoking; or 16
3. The use of [ industrial] hemp,[ or] industrial hemp products , and hemp -17
derived cannabinoid products as defined in Section 1 of this Act [KRS 18
260.850]; 19
(38) "Visiting qualified patient" means a person who has registered as such through the 20
cabinet as required under this chapter or who possesses a valid out-of-state registry 21
identification card and documentation of having been diagnosed with a qualifying 22
medical condition; and 23
(39) "Written certification" means a document dated and signed by a medicinal cannabis 24
practitioner, that: 25
(a) States, that in the medicinal cannabis practitioner's professional medical 26
opinion, the patient may receive medical, therapeutic, or palliative benefit 27
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from the use of medicinal cannabis; 1
(b) Specifies the qualifying medical condition or conditions for which the 2
medicinal cannabis practitioner believes the patient may receive medical, 3
therapeutic, or palliative benefit; and 4
(c) Affirms that the medicinal cannabis practitioner has a bona fide pr actitioner-5
patient relationship with the patient. 6
Section 25. KRS 218B.015 is amended to read as follows: 7
(1) [Nothing in ] This chapter shall not be construed as applying to [ industrial] hemp,[ 8
or] industrial hemp, or hemp-derived cannabinoid products as defined in Section 1 9
of this Act[KRS 260.850]. 10
(2) Notwithstanding any provision of law to the contrary, and except as provided in 11
subsections (3) and (4) of this section and KRS 218B.035: 12
(a) The use of medicinal cannabi s by a cardholder shall be considered lawful if 13
done in accordance with this chapter and any administrative regulations 14
promulgated thereunder; 15
(b) The acquisition, blending, cultivation, delivery, distribution, manufacturing, 16
manipulation, packaging for s ale, preparation, possession, sale, testing, 17
transportation, or transfer of medicinal cannabis or medicinal cannabis 18
accessories by a cannabis business or cannabis business agent shall be 19
considered lawful if done in accordance with this chapter and any 20
administrative regulations promulgated thereunder; 21
(c) A registered qualified patient or visiting qualified patient shall not be 22
considered to be under the influence of medicinal cannabis solely because of 23
the presence of tetrahydrocannabinol metabolites, in cluding but not limited to 24
the cannabinoid carboxy THC, which is also known as THC-COOH; 25
(d) A medicinal cannabis practitioner shall not be subject, under the laws of the 26
Commonwealth, to arrest, prosecution, or penalty in any manner, or denied 27
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any right o r privilege, including but not limited to a civil penalty or 1
disciplinary action by a state licensing board or by any other occupational or 2
professional licensing board, solely for providing written certifications or for 3
otherwise stating that, in the medi cinal cannabis practitioner's professional 4
opinion, a patient may receive medical, therapeutic, or palliative benefit from 5
the use of medicinal cannabis, if done in accordance with this chapter; 6
(e) An attorney shall not be subject, under the laws of the C ommonwealth, to 7
arrest, prosecution, or penalty in any manner, or denied any right or privilege, 8
including but not limited to a civil penalty or disciplinary action by the 9
Kentucky Court of Justice, Kentucky Bar Association, or by any other 10
professional li censing board, solely for providing an individual or cannabis 11
business with legal assistance related to activity that is no longer subject to 12
criminal penalties under state law pursuant to this chapter;[ and] 13
(f) A[No] person shall not be subject, under th e laws of the Commonwealth, to 14
arrest, prosecution, or penalty in any manner, or denied any right or privilege, 15
including but not limited to a civil penalty or disciplinary action by an 16
occupational or professional licensing board, solely for providing ass istance 17
or services, including but not limited to accounting services, financial 18
services, security services, or business consulting services, to any individual 19
or cannabis business related to activity that is no longer subject to criminal 20
penalties under state law pursuant to this chapter; and 21
(g) The Cabinet shall promulgate an emergency administrative regulation in 22
accordance with KRS Chapter 13A to permit the transfer or sale of hemp 23
floral material from a hemp cultivator licensed by the Kentucky Depart ment 24
of Agriculture to a licensed processor, producer, or dispensary. 25
(3) [Nothing in ]Subsection (2) of this section shall not be construed or interpreted to: 26
(a) Prohibit the arrest, prosecution, or imposition of any other penalty arising 27
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from but not li mited to breach of contract, breach of fiduciary duty, 1
negligence, or engaging in criminal activity that would constitute a felony or 2
misdemeanor; or 3
(b) Prevent a medicinal cannabis practitioner from being subject to administrative 4
penalties imposed by hi s or her state licensing board for any violation of this 5
chapter or any administrative regulation promulgated thereunder. 6
(4) Notwithstanding subsection (2) of this section and any other provision of law to the 7
contrary, a cardholder who is licensed under KRS Chapter 311 or KRS Chapter 314 8
may be subject to intervention or disciplinary action by his or her state licensing 9
board if: 10
(a) There is probable cause to believe that the cardholder has become impaired 11
by, or otherwise abused, medicinal cannabis; or 12
(b) The cardholder has a medically diagnosable disease that is characterized by 13
chronic, habitual, or periodic use of medicinal cannabis resulting in 14
interference with the cardholder's professional, social, or economic functions 15
in the community or the los s of powers of self -control regarding the use of 16
medicinal cannabis. 17
Section 26. KRS 241.010 is amended to read as follows: 18
As used in KRS Chapters 241 to 244, unless the context requires otherwise: 19
(1) "Alcohol" means ethyl alcohol, hydrated oxide of ethyl or spirit of wine, from 20
whatever source or by whatever process it is produced; 21
(2) "Alcoholic beverage" means every liquid, solid, powder, or crystal, whether 22
patented or not, containing alcohol in an amount in excess of more than one percent 23
(1%) of alcohol by volume, which is fit for beverage purposes. It includes every 24
spurious or imitation liquor sold as, or under any name commonly used for, 25
alcoholic beverages, whether containing any alcohol or not. It does not include the 26
following products: 27
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(a) Medicinal preparations manufactured in accordance with formulas prescribed 1
by the United States Pharmacopoeia, National Formulary, or the American 2
Institute of Homeopathy; 3
(b) Patented, patent, and proprietary medicines; 4
(c) Toilet, medicinal, and antiseptic preparations and solutions; 5
(d) Flavoring extracts and syrups; 6
(e) Denatured alcohol or denatured rum; 7
(f) Vinegar and preserved sweet cider; 8
(g) Wine for sacramental purposes; and 9
(h) Alcohol unfit for beverage purposes that is to be sold for legitimate external 10
use; 11
(3) (a) "Alcohol vaporizing device" or "AWOL device" means any device, machine, 12
or process tha t mixes liquor, spirits, or any other alcohol product with pure 13
oxygen or by any other means produces a vaporized alcoholic product used 14
for human consumption; 15
(b) "Alcohol vaporizing device" or "AWOL device" does not include an inhaler, 16
nebulizer, atomize r, or other device that is designed and intended by the 17
manufacturer to dispense a prescribed or over -the-counter medication or a 18
device installed and used by a licensee under this chapter to demonstrate the 19
aroma of an alcoholic beverage; 20
(4) "Automobile race track" means a facility primarily used for vehicle racing that has a 21
seating capacity of at least thirty thousand (30,000) people; 22
(5) "Barrel-aged and batched cocktail" means an alcoholic beverage that is: 23
(a) Composed of: 24
1. Distilled spirits that h ave been dispensed from their original sealed 25
container; and 26
2. Other ingredients or alcoholic beverages; 27
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(b) Placed into a barrel or container on the premises of a retail licensee; and 1
(c) Dispensed from the barrel or container as a retail sale by the drink; 2
(6) "Bed and breakfast" means a one (1) family dwelling unit that: 3
(a) Has guest rooms or suites used, rented, or hired out for occupancy or that are 4
occupied for sleeping purposes by persons not members of the single -family 5
unit; 6
(b) Holds a permit under KRS Chapter 219; and 7
(c) Has an innkeeper who resides on the premises or property adjacent to the 8
premises during periods of occupancy; 9
(7) "Board" means the State Alcoholic Beverage Control Board created by KRS 10
241.030; 11
(8) "Bottle" means any container which is used for holding alcoholic beverages for the 12
use and sale of alcoholic beverages at retail; 13
(9) "Brewer" means any person who manufactures malt beverages or owns, occupies, 14
carries on, works, or conducts any brewery, either alone or through an agent; 15
(10) "Brewery" means any place or premises where malt beverages are manufactured for 16
sale, and includes all offices, granaries, mash rooms, cooling rooms, vaults, yards, 17
and storerooms connected with the premises; or where any part of the process of the 18
manufacture of malt beverages is carried on; or where any apparatus connected with 19
manufacture is kept or used; or where any of the products of brewing or 20
fermentation are stored or kept; 21
(11) "Building containing licensed premises" means the licensed premises themselves 22
and includes the land, tract of land, or parking lot in which the premises are 23
contained, and any part of any building connected by direct access or by an 24
entrance which is under the ownership or control of the licensee by lease holding s 25
or ownership; 26
(12)[ "Cannabinoid" means a compound found in the hemp plant Cannabis sativa L. from 27
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a United States Department of Agriculture -sanctioned domestic hemp production 1
program and does not include cannabinoids derived from any other substance; 2
(13) "Cannabis-infused beverage": 3
(a) Means a properly permitted adult -use cannabinoid liquid product intended for 4
human consumption that has intoxicating properties that change the function 5
of the nervous system and results in alterations of perception, co gnition, or 6
behavior and shall not contain more than five (5) milligrams of intoxicating 7
adult-use cannabinoids per twelve (12) ounce serving; and 8
(b) Shall not include: 9
1. Medicinal cannabis regulated under KRS Chapter 218B; 10
2. Any type of hemp tincture; and 11
3. Any product containing solely nonintoxicating cannabinoids; 12
(14)] "Caterer" means a person operating a food service business that prepares food in a 13
licensed and inspected commissary, transports the food and alcoholic beve rages to 14
the caterer's designated and inspected banquet hall or to an agreed location, and 15
serves the food and alcoholic beverages pursuant to an agreement with another 16
person; 17
(13)[(15)] "Charitable organization" means a nonprofit entity recognized as exempt from 18
federal taxation under Section 501(c) of the Internal Revenue Code, 26 U.S.C. sec. 19
501(c), or any organization having been established and continuously operating 20
within the Commonwealth of Kentucky for charitable purposes for three (3) years 21
and which expends at least sixty percent (60%) of its gross revenue exclusively for 22
religious, educational, literary, civic, fraternal, or patriotic purposes; 23
(14)[(16)] "Cider" means any fermented fruit -based beverage containing seven percent 24
(7%) or more alcohol by volume and includes hard cider and perry cider; 25
(15)[(17)] "City administrator" means city alcoholic beverage control administrator; 26
(16)[(18)] "Commercial airport" means an airport through which more than five hundred 27
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thousand (500,000) passengers arrive or depart annually; 1
(17)[(19)] (a) "Commercial quadricycle" means a vehicle equipped with a minimum 2
of ten (10) pairs of fully operative pedals for propulsion by means of human 3
muscular power and which: 4
1. Has four (4) wheels; 5
2. Is operated in a manner similar to that of a bicycle; 6
3. Is equipped with a minimum of thirteen (13) seats for passengers; 7
4. Has a unibody design; 8
5. Is equipped with a minimum of four (4) hydraulically operated brakes; 9
6. Is used for commercial tour purposes; 10
7. Is operated by the vehicle owner or an employee of the owner; and 11
8. Has an electrical assist system that shall only be used when traveling to 12
or from its storage location while not carrying passengers. 13
(b) A "commercial quadricycle" is not a motor vehicle as defined in KRS 186.010 14
or 189.010; 15
(18)[(20)] "Commissioner" means the commissioner of the Department of Alcoholic 16
Beverage Control; 17
(19)[(21)] "Consumer" means a person, persons, or business organization who purchases 18
alcoholic beverages and who: 19
(a) Does not hold a license or permit issued by the department; 20
(b) Purchases the alcoholic beverages for personal consumption only and not for 21
resale; 22
(c) Is of lawful drinking age; and 23
(d) Receives the alcoholic beverages in territory where the alcoholic beverages 24
may be lawfully sold or received; 25
(20)[(22)] "Convention center" means any facility which, in its usual and customary 26
business, provides seating for a minimum of one thousand (1,000) people and offers 27
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convention facilities and related services for seminars, t raining and educational 1
purposes, trade association meetings, conventions, or civic and community events 2
or for plays, theatrical productions, or cultural exhibitions; 3
(21)[(23)] "Convicted" and "conviction" means a finding of guilt resulting from a plea of 4
guilty, the decision of a court, or the finding of a jury, irrespective of a 5
pronouncement of judgment or the suspension of the judgment; 6
(22)[(24)] "County administrator" means county alcoholic beverage control 7
administrator; 8
(23)[(25)] "Department" means the Department of Alcoholic Beverage Control; 9
(24)[(26)] "Dining car" means a railroad passenger car that serves meals to consumers 10
on any railroad or Pullman car company; 11
(25)[(27)] "Discount in the usual course of business" means price reductions, rebates, 12
refunds, and discounts given by wholesalers to distilled spirits and wine retailers 13
pursuant to an agreement made at the time of the sale of the merchandise involved 14
and are considered a part of the sales transaction, constituting red uctions in price 15
pursuant to the terms of the sale, irrespective of whether the quantity discount was: 16
(a) Prorated and allowed on each delivery; 17
(b) Given in a lump sum after the entire quantity of merchandise purchased had 18
been delivered; or 19
(c) Based on dollar volume or on the quantity of merchandise purchased; 20
(26)[(28)] "Distilled spirits" or "spirits" means any product capable of being consumed 21
by a human being which contains alcohol obtained by distilling, mixed with water 22
or other substances in solution, except wine, hard cider, and malt beverages; 23
(27)[(29)] "Distiller" means any person who is engaged in the business of manufacturing 24
distilled spirits at any distillery in the state and is registered in the Office of the 25
Collector of Internal Revenue for the United States at Louisville, Kentucky; 26
(28)[(30)] "Distillery" means any place or premises where distilled spirits are 27
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manufactured for sale, and which are registered in the office of any collector of 1
internal revenue for the United States. It inc ludes any United States government 2
bonded warehouse; 3
(29)[(31)] "Distributor" means any person who distributes malt beverages for the 4
purpose of being sold at retail; 5
(30)[(32)] "Dry" means a territory in which a majority of the electorate voted to prohibi t 6
all forms of retail alcoholic beverage sales through a local option election held 7
under KRS Chapter 242; 8
(31)[(33)] "Election" means: 9
(a) An election held for the purpose of taking the sense of the people as to the 10
application or discontinuance of alcoho lic beverage sales under KRS Chapter 11
242; or 12
(b) Any other election not pertaining to alcoholic beverages; 13
(32)[(34)] "Horse racetrack" means a facility licensed to conduct a horse race meeting 14
under KRS Chapter 230; 15
(33)[(35)] "Hotel" means a hotel, motel , or inn for accommodation of the traveling 16
public, designed primarily to serve transient patrons; 17
(34)[(36)] "Investigator" means any employee or agent of th e department who is 18
regularly employed and whose primary function is to travel from place to place for 19
the purpose of visiting licensees, and any employee or agent of the department who 20
is assigned, temporarily or permanently, by the commissioner to duty o utside the 21
main office of the department at Frankfort, in connection with the administration of 22
alcoholic beverage statutes; 23
(35)[(37)] "License" means any license issued pursuant to KRS Chapters 241 to 244; 24
(36)[(38)] "Licensee" means any person to whom a license has been issued, pursuant to 25
KRS Chapters 241 to 244; 26
(37)[(39)] "Limited restaurant" means: 27
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(a) A facility where the usual and customary business is the preparation and 1
serving of meals to consumers, which has a bona fide kitchen facility, which 2
receives at least seventy percent (70%) of its food and alcoholic beverage 3
receipts from the sale of food, which maintains a minimum seating capacity of 4
fifty (50) persons for dining, which has no open bar, which requires that 5
alcoholic beverages be sold i n conjunction with the sale of a meal, and which 6
is located in a wet or moist territory under KRS 242.1244; or 7
(b) A facility where the usual and customary business is the preparation and 8
serving of meals to consumers, which has a bona fide kitchen facilit y, which 9
receives at least seventy percent (70%) of its food and alcoholic beverage 10
receipts from the sale of food, which maintains a minimum seating capacity of 11
one hundred (100) persons of dining, and which is located in a wet or moist 12
territory under KRS 242.1244; 13
(38)[(40)] "Local administrator" means a city alcoholic beverage control administrator, 14
county alcoholic beverage control administrator, or urban -county alcoholic 15
beverage control administrator; 16
(39)[(41)] "Malt beverage" means any fermented un distilled alcoholic beverage of any 17
name or description, manufactured from malt wholly or in part, or from any 18
substitute for malt, and includes weak cider; 19
(40)[(42)] "Manufacture" means distill, rectify, brew, bottle, and operate a winery; 20
(41)[(43)] "Manufacturer" means a winery, distiller, rectifier, or brewer, and any other 21
person engaged in the production or bottling of alcoholic beverages; 22
(42)[(44)] "Marina" means a dock or basin providing moorings for boats and offering 23
supply, repair, or other services for remuneration; 24
(43)[(45)] "Minor" means any person who is not twenty-one (21) years of age or older; 25
(44)[(46)] "Moist" means a territory in which a majority of the electorate voted to permit 26
limited alcoholic beverage sales by any one (1) or a combination of special limited 27
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local option elections authorized by KRS Chapter 242; 1
(45)[(47)] "Population" means the popu lation figures established by the federal 2
decennial census for a census year or the current yearly population estimates 3
prepared by the Kentucky State Data Center, Urban Studies Center of the 4
University of Louisville, Louisville, Kentucky, for all other years; 5
(46)[(48)] "Premises" means the land and building in and upon which any business 6
regulated by alcoholic beverage statutes is operated or carried on. "Premises" shall 7
not include as a single unit two (2) or more separate businesses of one (1) owner on 8
the same lot or tract of land, in the same or in different buildings if physical and 9
permanent separation of the premises is maintained, excluding employee access by 10
keyed entry and emergency exits equipped with crash bars, and each has a separate 11
public entrance accessible directly from the sidewalk or parking lot. Any licensee 12
holding an alcoholic beverage license on July 15, 1998, shall not, by reason of this 13
subsection, be ineligible to continue to hold his or her license or obtain a renewal, 14
of the license; 15
(47)[(49)] "Primary source of supply" or "supplier" means the distiller, winery, brewer, 16
producer, owner of the commodity at the time it becomes a marketable product, 17
bottler, or authorized agent of the brand owner. In the case of imported products, 18
the primary source of supply means either the foreign producer, owner, bottler, or 19
agent of the prime importer from, or the exclusive agent in, the United States of the 20
foreign distiller, producer, bottler, or owner; 21
(48)[(50)] "Private club" means a nonpr ofit social, fraternal, military, or political 22
organization, club, or nonprofit or for -profit entity maintaining or operating a club 23
room, club rooms, or premises from which the general public is excluded; 24
(49)[(51)] "Private selection event" means a private event with a licensed distiller during 25
which participating consumers, retail licensees, wholesalers, distributors, or a 26
distillery's own representatives select a single barrel or a blend of barrels of the 27
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distiller's products to be specially packaged for the participants; 1
(50)[(52)] "Private selection package" means a bottle of distilled spirits sourced from the 2
barrel or barrels selected by participating consumers, retail licensees, wholesalers, 3
distributors, microbreweries that hold a quota retail drin k or quota retail package 4
license, or a distillery's own representatives during a private selection event; 5
(51)[(53)] "Public nuisance" means a condition that endangers safety or health, is 6
offensive to the senses, or obstructs the free use of property so as to interfere with 7
the comfortable enjoyment of life or property by a community or neighborhood or 8
by any considerable number of persons; 9
(52)[(54)] "Qualified historic site" means: 10
(a) A contributing property with dining facilities for at least fifty (5 0) persons at 11
tables, booths, or bars where food may be served within a commercial district 12
listed in the National Register of Historic Places; 13
(b) A site that is listed as a National Historic Landmark or in the National 14
Register of Historic Places with di ning facilities for at least fifty (50) persons 15
at tables, booths, or bars where food may be served; 16
(c) A distillery which is listed as a National Historic Landmark and which 17
conducts souvenir retail package sales under KRS 243.0305; or 18
(d) A not-for-profit or nonprofit facility listed on the National Register of Historic 19
Places; 20
(53)[(55)] "Rectifier" means any person who rectifies, purifies, or refines distilled 21
spirits, malt, or wine by any process other than as provided for on distillery 22
premises, and every person who, without rectifying, purifying, or refining distilled 23
spirits by mixing alcoholic beverages with any materials, manufactures any 24
imitations of or compounds liquors for sale under the name of whiskey, brandy, gin, 25
rum, wine, spirits, cordials, bitters, or any other name; 26
(54)[(56)] "Repackaging" means the placing of alcoholic beverages in any retail 27
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container irrespective of the material from which the container is made; 1
(55)[(57)] "Restaurant" means a facility where the usual and customary business is the 2
preparation and serving of meals to consumers, that has a bona fide kitchen facility, 3
and that receives at least fifty percent (50%) of its food and alcoholic beverage 4
receipts from the sale of food at the premises; 5
(56)[(58)] "Retail conta iner" means any bottle, can, barrel, or other container which, 6
without a separable intermediate container, holds alcoholic beverages and is 7
suitable and destined for sale to a retail outlet, whether it is suitable for delivery or 8
shipment to the consumer or not; 9
(57)[(59)] "Retail sale" means any sale of alcoholic beverages to a consumer, including 10
those transactions taking place in person, electronically, online, by mail, or by 11
telephone; 12
(58)[(60)] "Retailer" means any licensee who sells and delivers any alcoholic beverage 13
to consumers, except for manufacturers with limited retail sale privileges and direct 14
shipper licensees; 15
(59)[(61)] "Riverboat" means any boat or vessel with a regular place of mooring in this 16
state that is licensed by the United States Coast Guard to carry forty (40) or more 17
passengers for hire on navigable waters in or adjacent to this state; 18
(60)[(62)] "Sale" means any transfer, exchange, or barter for consideration, and includes 19
all sales made by any person, whether principal, proprie tor, agent, servant, or 20
employee, of any alcoholic beverage; 21
(61)[(63)] "Service bar" means a bar, counter, shelving, or similar structure used for 22
storing or stocking supplies of alcoholic beverages that is a workstation where 23
employees prepare alcoholic beverage drinks to be delivered to customers away 24
from the service bar; 25
(62)[(64)] "Sell" includes solicit or receive an order for, keep or expose for sale, keep 26
with intent to sell, and the delivery of any alcoholic beverage; 27
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(63)[(65)] "Small farm winery " means a winery whose wine production is not less than 1
two hundred fifty (250) gallons and not greater than five hundred thousand 2
(500,000) gallons in a calendar year; 3
(64)[(66)] "Souvenir package" means a special package of distilled spirits available from 4
a licensed retailer that is: 5
(a) Available for retail sale at a licensed Kentucky distillery where the distilled 6
spirits were produced or bottled; or 7
(b) Available for retail sa le at a licensed Kentucky distillery but produced or 8
bottled at another of that distiller's licensed distilleries in Kentucky; 9
(65)[(67)] "State administrator" or "administrator" means the distilled spirits 10
administrator or the malt beverages administrator, or both, as the context requires; 11
(66)[(68)] "State park" means a state park that has a: 12
(a) Nine (9) or eighteen (18) hole golf course; or 13
(b) Full-service lodge and dining room; 14
(67)[(69)] "Supplemental bar" means a bar, counter, shelving, or similar structure used 15
for serving and selling distilled spirits or wine by the drink for consumption on the 16
licensed premises to guests and patrons from additional locations other than the 17
main bar; 18
(68)[(70)] "Territory" means a county, city, district, or precinct; 19
(69)[(71)] "Urban-county administrator" means an urban -county alcoholic beverage 20
control administrator; 21
(70)[(72)] "Valid identification document" means an unexpired, government-issued form 22
of identification that contains the photograph and date of birth of the individual to 23
whom it is issued; 24
(71)[(73)] "Vehicle" means any device or animal used to carry, convey, transport, or 25
otherwise move alcoholic beverages or any products, equipment, or appurtenances 26
used to manufacture, bottle, or sell these beverages; 27
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(72)[(74)] "Vintage distilled spirit" means: 1
(a) A private selection package; or 2
(b) A package or packages of distilled spirits that: 3
1. Are in their original manufacturer's unopened container; 4
2. Are not owned by a distillery; and 5
3. Are not otherwise available for purchase from a licensed wholesaler 6
within the Commonwealth; 7
(73)[(75)] (a) "Vintage distilled spirits seller" means a nonlicensed person at least 8
twenty-one (21) years of age who is: 9
1. An administrator, executor, receiver, or other fiduciary who receives and 10
sells vintage distilled spirits in execution of the person's fiduciary 11
capacity; 12
2. A creditor who receives or takes possession of vintage distilled spirits as 13
security for, or in payment of, debt, in whole or in part; 14
3. A public officer or court official who levies on vintage distilled spirits 15
under order or process of any court or magistrate to sell the vintage 16
distilled spirits in satisfaction of the order or process; or 17
4. Any other person not engaged in the business of selling alcoholic 18
beverages. 19
(b) "Vintage distilled spirits seller" does not mean: 20
1. A person selling alcoholic beverages as part of an approved KRS 21
243.630 transfer; or 22
2. A person selling alcoholic beverages as authorized by KRS 243.540; 23
(74)[(76)] "Warehouse" means any place in which alcoholic beverages are housed or 24
stored; 25
(75)[(77)] "Weak cider" means any fermented fruit-based beverage containing more than 26
one percent (1%) but less than seven percent (7%) alcohol by volume; 27
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(76)[(78)] "Wet" means a territory in which a majority of the electorate voted to permit 1
all forms of retail alcoholic beverage sales by a local option election under KRS 2
242.050 or 242.125 on the following question: "Are you in f avor of the sale of 3
alcoholic beverages in (name of territory)?"; 4
(77)[(79)] "Wholesale sale" means a sale to any person for the purpose of resale; 5
(78)[(80)] "Wholesaler" means any person who distributes alcoholic beverages for the 6
purpose of being sold at retail, but it shall not include a subsidiary of a 7
manufacturer or cooperative of a retail outlet; 8
(79)[(81)] "Wine" means the product of the normal alcoholi c fermentation of the juices 9
of fruits, with the usual processes of manufacture and normal additions, and 10
includes champagne and sparkling and fortified wine of an alcoholic content not to 11
exceed twenty -four percent (24%) by volume. It includes sake, cider , hard cider, 12
and perry cider and also includes preparations or mixtures vended in retail 13
containers if these preparations or mixtures contain not more than fifteen percent 14
(15%) of alcohol by volume. It does not include weak cider; and 15
(80)[(82)] "Winery" means any place or premises in which wine is manufactured from 16
any fruit, or brandies are distilled as a by -product of wine or other fruit, or cordials 17
are compounded, except a place or premises that manufactures wine for sacramental 18
purposes exclusively. 19
Section 27. KRS 241.020 is amended to read as follows: 20
(1) The department shall administer statutes relating to, and regulate traffic in, 21
alcoholic beverages, except that the collection of taxes shall be administered by the 22
Department of Revenue. The department may issue advisory opinions and 23
declaratory rulings related to KRS Chapters 241 to 244 and the administrative 24
regulations promulgated under those chapters. 25
(2)[ Notwithstanding any other statute or administrative regulation to the contrary, the 26
department shall have authority to administer statutes relating to, and regulate the 27
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retail licensing and distribution of, cannabis-infused beverages. 1
(3)] A Division of Distilled Spirits, under the supervision of the board, shall administer 2
the laws in relation to traffic in distilled spirits and[,] wine[, and cannabis -infused 3
beverages]. 4
(3)[(4)] A Division of Malt Beverages, under the supervision of the board, shall 5
administer the laws in relation to traffic in malt beverages. 6
(4)[(5)] A Division of Tobacco, Nicotine, and Vapor Product Licensing, under the 7
supervision of the division director, shall administer the laws in relation to traffic in 8
alternative nicotine products, tobacco products, and authorized nicotine vapor 9
products under KRS 438.305 to 438.350. 10
Section 28. KRS 241.060 is amended to read as follows: 11
The board shall have the following functions, powers, and duties: 12
(1) To promulgate reasonable administrative regulations governing procedures relative 13
to the applications for and revocations of licenses, the supervision and control of the 14
use, manufactu re, sale, transportation, storage, advertising, and trafficking of 15
alcoholic beverages, [ the retail licensing and distribution of cannabis -infused 16
beverages,] and all other matters over which the board has jurisdiction. The only 17
administrative regulation t hat shall be promulgated in relation to the direct shipper 18
license is to establish the license application, as set forth in KRS 243.027(4). To the 19
extent any administrative regulation previously promulgated is contrary to the 20
provisions of KRS 13A.120(2), the board shall repeal or amend the administrative 21
regulation as necessary by January 1, 2022. Administrative regulations need not be 22
uniform in their application but may vary in accordance with reasonable 23
classifications; 24
(2) To limit the number of licenses of each kind or class to be issued in this state or any 25
political subdivision, and restrict the locations of licensed premises. To this end, the 26
board may make reasonable division and subdivision of the state or any political 27
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subdivision into districts. Administrative regulations relating to the approval, 1
denial, and revocation of licenses may be different within the several divisions or 2
subdivisions; 3
(3) To hold hearings in accordance with the provisions of KRS Chapter 13B. The 4
department may pay witnesses the per diem and mileage provided in KRS 421.015; 5
(4) To conduct hearings and appeals under KRS 241.150, 241.200, 241.260, 243.470, 6
243.520, 438.308, 438.309, 438.312, 438.316, and 438.340 and render final orders 7
upon the subjects of the hearings and appeals; 8
(5) (a) To order the destruction of evidence, other than contraband alcoholic 9
beverages suitable for public auction under paragraph (b) of this subsection, in 10
the department's possession after all administrative and judicial proceedings 11
are conducted. 12
(b) To dispose of contraband alcoholic beverages through public auction if: 13
1. A final order relating to those contraband alcoholic beverages has been 14
entered after all administrative and judicial proceedings are conducted, 15
if applicable; 16
2. The entire proceeds of the public auction are donated to the alcohol 17
wellness and responsibility education fund established in KRS 211.285; 18
and 19
3. The board deems the inventory safe to release to the public, including 20
but not limited to the alcoholic beverages being in their original, 21
unopened packaging; 22
(6) To suspend, revoke, or cancel for cause, after a hearing in accordance with KRS 23
Chapter 13B, any license; and 24
(7) To prohibit the issuance of a license for the premises until the expiration of two (2) 25
years from the time the offense was committed if a violation of KRS Chapters 241 26
to 244 has taken place on the premises which the owner knew of or should have 27
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known of, or was committed or permitted in or on the premises owned by the 1
licensee. 2
Section 29. KRS 241.080 is amended to read as follows: 3
The distilled spirits administrator may approve and issue or deny any state license 4
authorizing traffic in distilled spirits and wine [ or in cannabis -infused beverages] . The 5
malt beverages administrator may approve and issue or deny any state license authorizing 6
traffic in malt beverages. Both the distilled spirits administrator and the malt beverages 7
administrator may approve and issue or deny state licenses authorizing the traffic in 8
alcoholic beverages. 9
Section 30. KRS 241.090 is amended to read as follows: 10
(1) State administrators and all investigators shall have the full police powers of peace 11
officers, except as provided in subsection (2) of this section, and their jurisdiction 12
shall be coextensive with the state. They may inspect any premises where alcoholic 13
beverages are manufactured, sold, stored, or otherwise trafficked in [ or any 14
premises where cannabis-infused beverages are sold, stored, or otherwise trafficked 15
in,] without first obtaining a search warrant. They may confiscate any contraband 16
property. The jurisdiction and police powers of state administrators and all 17
investigators during an emergency declared under KRS Chapter 39A shall be 18
subject to the limitations of KRS 39A.090. 19
(2) A state administrator shall not have the power to make arrests unless h e or she is 20
certified in accordance with KRS 15.380 to 15.404. 21
Section 31. KRS 243.020 is amended to read as follows: 22
(1) A person shall not do any act authorized by any kind of license with respect to the 23
manufacture, s torage, sale, purchase, transporting, or other traffic in alcoholic 24
beverages[ or the distribution, retail sale, or transportation of cannabis -infused 25
beverages] unless the person holds or is an independent contractor, agent, servant, 26
or employee of a person who holds the kind of license that authorizes the act, or is a 27
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third party utilized by a direct shipper licensee as set forth in KRS 243.027. 1
(2) The holding of any permit from the United States government to traffic in alcoholic 2
beverages without the c orresponding requisite state and local licenses shall in all 3
cases raise a rebuttable presumption that the holder of the United States permit is 4
unlawfully trafficking in alcoholic beverages. 5
(3) Except as permitted by KRS 243.033, 243.036, 243.155, 243.15 7, and 243.260, a 6
person, conducting a place of business patronized by the public, who is not a 7
licensee authorized to sell alcoholic beverages, shall not permit any person to sell, 8
barter, loan, give away, or drink alcoholic beverages on the premises of t he place of 9
business. 10
(4) A licensee shall not permit any consumer to possess, give away, or drink alcoholic 11
beverages[ or cannabis -infused beverages] on the licensed premises that are not 12
purchased from the licensee. 13
(5) In a moist territory, the only typ es of licenses that may be issued are those that 14
directly correspond with the types of sales approved by the voters through moist 15
elections within the territory, unless otherwise specifically authorized by statute. 16
(6) Notwithstanding subsections (3) and (4) of this section, with the written permission 17
of a licensed entertainment destination center: 18
(a) A retail drink licensee located wholly within a licensed entertainment 19
destination center or that has a storefront sharing a physical boundary with 20
that lic ensed entertainment destination center may allow persons on the 21
licensee's premises to possess and drink alcoholic beverages that were 22
purchased from another retail drink licensee located wholly within, or that has 23
a storefront sharing a physical boundary with, the licensed entertainment 24
destination center; and 25
(b) A nonlicensed place of business that is located wholly within a licensed 26
entertainment destination center or that has a storefront sharing a physical 27
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boundary with that licensed entertainment des tination center may allow 1
persons on its property to possess and drink alcoholic beverages that were 2
purchased from a retail drink licensee located wholly within, or that has a 3
storefront sharing a physical boundary with, the licensed entertainment 4
destination center. 5
Section 32. KRS 243.027 is amended to read as follows: 6
(1) KRS 243.027 to 243.029 shall supersede any conflicting statute in KRS Chapters 7
241 to 244. 8
(2) A direct shipper [ Type A] license shall authorize the holder to ship alcoholic 9
beverages to consumers[. A direct shipper Type B license shall authorize the holder 10
to ship cannabis -infused beverages to consumers] . The department shall issue a 11
direct shipper license to a successful applicant that: 12
(a) Pays the applicable annual license fee; 13
(b) Is a manufacturer located in this state or any other state [, a cannabis -infused 14
beverage manufacturer licensed by the Department for Public Health,] or an 15
alcoholic beverage supplier licensed under KRS 243.212 or 243.215; and 16
(c) Holds a current license, permit, or other authorization to manufacture or 17
supply alcoholic beverages[ or cannabis-infused beverages] in the state where 18
the applicant is located. If an applicant is located outside of Kentucky, proof 19
of its current license, permit, or other authorization as issued by its home state 20
shall be sufficient proof of its eligibility to hold a direct shipper license in 21
Kentucky. 22
(3) (a) A manufacturer applicant shall only be authorized to ship beverages that are 23
sold under a brand name owned or exclusively licensed to the manufacturer, 24
provided the beverages were: 25
1. Produced by the manufacturer; 26
2. Produced for the manufacturer under a written contract with another 27
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manufacturer; or 1
3. Bottled or canned for or by the manufacturer. 2
(b) An applicant licensed under KRS 243.212 or 243.215 shall only be authorized 3
to ship alcoholic beverages[ or cannabis-infused beverages] for which it is the 4
primary source of supply. 5
(4) The department shall establish the form for a direct shippe r license application 6
through the promulgation of an administrative regulation. These requirements shall 7
include only the following: 8
(a) The address of the manufacturer or supplier; and 9
(b) If the applicant is located outside this state, a copy of the appl icant's current 10
license, permit, or other authorization to manufacture, store, or supply 11
alcoholic beverages [ or cannabis -infused beverages] in the state where the 12
applicant is located. 13
(5) For purposes of this section, the holder of a direct shipper license may utilize the 14
services of a third party to fulfill shipments, subject to the following: 15
(a) The third party shall not be required to hold any alcoholic beverage license[ or 16
cannabis-infused beverage license] , but no licensed entity shall serve as a 17
third party to fulfill shipments other than the holder of a storage license or 18
transporter's license; 19
(b) The third party may operate from the premises of the direct shipper licensee 20
or from another business location; and 21
(c) The direct shipper licensee shall be liable for any violation of KRS 242.250, 22
242.260, 242.270, or 244.080 that may occur by the third party. 23
(6) A direct shipper licensee shall: 24
(a) Agree that the Secretary of State shall serve as its registered agent for service 25
of process. The licensee shall agree that legal service on the agent constitutes 26
legal service on the direct shipper licensee; 27
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(b) Maintain the records required under KRS 243.027 to 243.029 and provide the 1
department and the Department of Revenue access to or copies of these 2
records; 3
(c) Allow the department or the Department of Revenue to perform an audit of 4
the direct shipper licensee's records or an inspection of the direct shipper 5
licensee's licensed premises u pon request. If an audit or inspection reveals a 6
violation, the department or the Department of Revenue may recover 7
reasonable expenses from the licensee for the cost of the audit or inspection; 8
(d) Register with the Department of Revenue, and file all reports and pay all taxes 9
required under KRS 243.027 to 243.029; and 10
(e) Submit to the jurisdiction of the Commonwealth of Kentucky for any 11
violation of KRS 242.250, 242.260, 242.270, or 244.080 or for nonpayment 12
of any taxes owed. 13
(7) (a) Each direct shipper licensee shall submit to the department and the 14
Department of Revenue a quarterly report for that direct shipper license 15
showing: 16
1. The total amount of beverages shipped into the state per consumer; 17
2. The name and address of each consumer; 18
3. The purcha se price of the beverages shipped and the amount of taxes 19
charged to the consumer for the beverages shipped; and 20
4. The name and address of each common carrier. 21
(b) The Department of Revenue shall create a form through the promulgation of 22
an administrative regulation for reporting under paragraph (a) of this 23
subsection. 24
(c) The department shall provide a list of all active direct shipper licensees to 25
licensed common carriers on a quarterly basis to reduce the number of 26
unlicensed shipments in the Commonwealth. 27
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(8) A direct shipper licensee shall submit a current copy of its alcoholic beverage 1
license[ or cannabis -infused beverage license] from its home state along with the 2
applicable license fee every year upon renewal of its direct shipper license. 3
(9) Notwithstanding any provision of this section to the contrary, a manufacturer 4
located and licensed in Kentucky may ship by a common carrier holding a 5
Kentucky transporter's license samples of alcoholic beverages produced by the 6
manufacturer in quantities not t o exceed one (1) liter, per any recipient, of any 7
individual product in one (1) calendar year of distilled spirits or wine, or ninety -six 8
(96) ounces, per any recipient, of any individual product in one (1) calendar year of 9
malt beverages, to any of the following: 10
(a) Marketing or media representatives twenty-one (21) years of age or older; 11
(b) Distilled spirits, wine, or malt beverage competitions or contests; 12
(c) Wholesalers or distributors located outside of Kentucky; 13
(d) Federal, state, or other regulatory testing labs; 14
(e) Third-party product formulation and development partners; and 15
(f) Persons or entities engaged in a private selection event pursuant to KRS 16
243.0305. 17
Such samples shall be marked by affixing across the product label, a not readily 18
removed disclaimer with the words "Sample -Not for Sale" and the name of the 19
manufacturer. 20
Section 33. KRS 243.028 is amended to read as follows: 21
(1) A direct shipper licensee may sell or ship to a consumer all types of alcoholic 22
beverages[ or cannabis -infused beverages] that the licensee is authorized to sell, 23
with the following aggregate limits: 24
(a) Distilled spirits, in quantities not to exceed ten ( 10) liters per consumer per 25
month; 26
(b) Wine, in quantities not to exceed ten (10) cases per consumer per month; and 27
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(c) Malt beverages, in quantities not to exceed ten (10) cases per consumer per 1
month[; and 2
(d) Cannabis-infused beverages, in quantities no t to exceed ten (10) cases per 3
customer per month]. 4
(2) The direct shipper licensee shall notify the consumer placing the order that the 5
shipment shall not be left unless the recipient of the shipment provides a valid 6
identification document at the time verifying that the recipient is at least twenty-one 7
(21) years of age. All beverage containers shipped to the consumer shall be 8
conspicuously labeled with the words "CONTAINS ALCOHOL: SIGNATURE OF 9
PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY" [ or "CONTAINS 10
CANNABIS-INFUSED BEVERAGES: SIGNATURE OF PERSON AGE 21 OR 11
OLDER REQUIRED FOR DELIVERY", as appropriate] for each shipment. 12
(3) At the time of delivery, the recipient of the shipment shall present to the individual 13
delivering the package a valid identificati on document. Prior to transferring 14
possession of the package, the individual delivering the package shall visually 15
inspect the document and verify the identity of the recipient and, by visual 16
examination or by using age verification technology, that the re cipient is at least 17
twenty-one (21) years of age. 18
(4) Before transferring possession of the package, the individual delivering the package 19
shall obtain the signature of the recipient of the shipment. The individual who 20
receives and signs for the beverages is not required to be the consumer who 21
purchased the beverages. 22
(5) A consumer who intentionally causes shipment to an address deemed unlawful 23
shall, for the first offense, be guilty of a violation punishable by a fine of two 24
hundred fifty dollars ($250), and for each subsequent offense, be guilty of a 25
violation punishable by a fine of five hundred dollars ($500). In this instance, the 26
direct shipper licensee and the common carrier shall be held harmless. 27
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(6) A direct shipper licensee may not sell or ship b everages to a consumer from its 1
licensed premises if the consumer's address is located in an area in which that type 2
of beverages may not be sold or received. 3
(7) Shipments made pursuant to this section shall be made through a common carrier. 4
(8) If a comm on carrier is unable to complete delivery, then the beverages shall be 5
returned to the consignor. 6
Section 34. KRS 243.030 is amended to read as follows: 7
The following licenses that authorize traffic in distilled spirits and wine[ and in cannabis-8
infused beverages] may be issued by the distilled spirits administrator. Licenses that 9
authorize traffic in all alcoholic beverages may be issued by both the distilled spirits 10
administrator and malt beverages administrator. The li censes and their accompanying 11
fees are as follows: 12
(1) Distiller's license: 13
(a) Class A, per annum .............................................................................$3,090.00 14
(b) Class B (craft distillery), per annum ....................................................$1,000.00 15
(c) Off-premises retail sales outlet, per annum ............................................$300.00 16
(2) Rectifier's license: 17
(a) Class A, per annum .............................................................................$2,580.00 18
(b) Class B (craft rectifier), per annum ........................................................$825.00 19
(3) Winery license, per annum ..........................................................................$1,030.00 20
(4) Small farm winery license, per annum ...........................................................$110.00 21
(a) Small farm winery off-premises retail license, per annum ......................$30.00 22
(5) Wholesaler's license, per annum ..................................................................$2,060.00 23
(6) Quota retail package license, per annum .........................................................$570.00 24
(7) Quota retail drink license, per annum ..............................................................$620.00 25
(8) Transporter's license, per annum ....................................................................$210.00 26
(9) Special nonbeverage alcohol license, per annum .............................................$60.00 27
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(10) Special agent's or solicitor's license, per annum ...............................................$30.00 1
(11) Bottling house or bottling house storage license, per annum ......... .............$1,030.00 2
(12) Special temporary license, per event ..............................................................$100.00 3
(13) Special Sunday retail drink license, per annum ...............................................$520.00 4
(14) Caterer's license, per annum ...........................................................................$830.00 5
(15) Special temporary alcoholic beverage auction license, per event ...................$100.00 6
(16) Extended hours supplemental license, per annum .......................................$2,060.00 7
(17) Hotel in-room license, per annum ...................................................................$210.00 8
(18) Air transporter license, per annum ..................................................................$520.00 9
(19) Sampling license, per annum ...........................................................................$110.00 10
(20) Replacement or duplicate license ......................................................................$25.00 11
(21) Entertainment destination center license: 12
(a) When the licensee is a city, county, urban-county government, 13
consolidated local government, charter county government, or 14
unified local government, per annum .................................................$2,577.00 15
(b) All other licensees, per annum ............................................................$7,730.00 16
(22) Limited restaurant license, per annum .............................................................$780.00 17
(23) Limited golf course license, per annum ...........................................................$720.00 18
(24) Small farm winery wholesaler's license, per annum .......................................$110.00 19
(25) Qualified historic site license, per annum ....................................................$1,030.00 20
(26) Nonquota type 1 license, per annum ........................ ...................................$4,120.00 21
(27) Nonquota type 2 license, per annum ................................................................$830.00 22
(28) Nonquota type 3 license, per annum ................................................................$310.00 23
(29) Distilled spirits and wine storage license, per annum ..................................$620.00 24
(30) Out-of-state distilled spirits and wine supplier's license, per annum ...........$1,550.00 25
(31) Limited out-of-state distilled spirits and wine supplier's 26
license, per annum ..........................................................................................$260.00 27
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(32) Authorized public consumption license, per annum ........................................$250.00 1
(33) Direct shipper[ Type A] license, per annum ....................................................$100.00 2
(34) Limited nonquota package license, per annum ................................................$300.00 3
(35) Vintage distilled spirits license, per annum .....................................................$300.00 4
(36)[ Cannabis-infused beverage retail package license, per annum .....................$2,000.00 5
(37) Cannabis-infused beverage distributor's license, per annum ........................$1,000.00 6
(38) Cannabis-infused beverage distributor's license, 7
supplemental, per annum ..............................................................................$1,000.00 8
(39) Direct shipper Type B license, per annum ....................................................$1,000.00 9
(40)] A nonrefundable fee of sixty dollars ($60) shall be charged to process each new 10
transitional license pursuant to KRS 243.045. 11
(37)[(41)] Other special licenses the board finds necessary for the proper regulation and 12
control of the traffic in distilled spirits and wine and provides for by administrative 13
regulation. In establishing the amount of license taxes that are required to be fixed 14
by the board, it shall have regard for the value of the privilege granted. 15
(38)[(42)] The fee for each of the first fi ve (5) supplemental bar licenses shall be the 16
same as the fee for the primary retail drink license. There shall be no charge for 17
each supplemental license issued in excess of five (5) to the same licensee at the 18
same premises. 19
A nonrefundable application f ee of fifty dollars ($50) shall be charged to process each 20
new application under this section, except for subsections (4), (8), (9), (10), (12), (15), 21
(19), and (20) of this section. The application fee shall be applied to the licensing fee if 22
the license is issued; otherwise it shall be retained by the department. 23
Section 35. KRS 243.034 is amended to read as follows: 24
(1) A limited restaurant license may be issued to an establishment meeting the 25
definition criteria estab lished in KRS 241.010 (37)[(39)] as long as the 26
establishment is within: 27
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(a) Any wet territory; or 1
(b) Any moist precinct that has authorized the sale of alcoholic beverages under 2
KRS 242.1244. 3
(2) A limited restaurant license shall authorize the licensee t o purchase, receive, 4
possess, and sell alcoholic beverages at retail by the drink for consumption on the 5
licensed premises or off -premises consumption pursuant to KRS 243.081. The 6
licensee shall purchase alcoholic beverages only from licensed wholesalers o r 7
distributors, except for purchases made pursuant to subsection (5) of this section. 8
The license shall not authorize the licensee to sell alcoholic beverages by the 9
package. 10
(3) The holder of a limited restaurant license shall maintain at least seventy pe rcent 11
(70%) of its gross receipts from the sale of food and maintain the minimum 12
applicable seating requirement required for the type of limited restaurant license. 13
(4) A limited restaurant as defined by KRS 241.010(37)[(39)](a) shall: 14
(a) Only sell alcoholic beverages incidental to the sale of a meal; and 15
(b) Not have an open bar and shall not sell alcoholic beverages to any person who 16
has not purchased or does not purchase a meal. 17
(5) (a) The holder of a limi ted restaurant license may purchase alcoholic beverages 18
by the package from licensees authorized to sell distilled spirits, wine, and 19
malt beverages at retail, but only if those alcoholic beverages have first gone 20
through the three (3) tier system. 21
(b) Any purchase made pursuant to this subsection shall: 22
1. Only be sold by the drink for consumption on the licensed premises or 23
off-premises consumption pursuant to KRS 243.081; 24
2. Be reported quarterly on a form prescribed by the department; and 25
3. Include a copy of each receipt of purchase. 26
(c) The holder of a limited restaurant license shall not purchase at retail more 27
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than: 1
1. Nine (9) liters of distilled spirits per month; 2
2. Nine (9) liters of wine per month; and 3
3. Three (3) cases of malt beverages per month. 4
Section 36. KRS 243.0341 is amended to read as follows: 5
(1) Notwithstanding any other provision of law, the following local governments may 6
elect to act under this section: 7
(a) Any city or county that conducted an election under KRS 242.1244(2) prior to 8
January 1, 2016, for by the drink sales of alcoholic beverages in restaurants 9
and dining facilities seating one hundred (100) persons or more; or 10
(b) Any city with limited sale precincts created pursuant to KRS 242.12 92 prior 11
to July 14, 2022. 12
(2) Upon a determination by the legislative body of a city or county that: 13
(a) An economic hardship exists within the city or county; and 14
(b) Expanded sales of alcoholic beverages by the drink could aid in economic 15
growth; 16
the c ity or county may, after conducting a public hearing that is noticed to the 17
public in accordance with the KRS Chapter 424, adopt an ordinance authorizing by 18
the drink sales of alcoholic beverages in restaurants and dining facilities containing 19
seating for at least fifty (50) persons and meeting the requirements of subsection (3) 20
of this section. 21
(3) The ordinance enacted by a city or county pursuant to subsection (2) of this section 22
shall authorize the sale of alcoholic beverages under the following limitations: 23
(a) Sales shall only be conducted in restaurants and other dining facilities meeting 24
the requirements of KRS 241.010(37)[(39)](a); and 25
(b) The provisions of KRS 243.034 shall apply to any restaurant or dining facility 26
operating under a license issued pursuant to this section. 27
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(4) A city or county acting under this section may allow limited restaurant sales as 1
defined in KRS 241.010(37)[(39)]. 2
(5) The enactment of an ordinance under this section shall not: 3
(a) Modify the city's or county's ability to i ssue a limited restaurant license to 4
restaurants or other dining facilities meeting the requirements of KRS 5
241.010(39)(b); or 6
(b) Affect, alter, or otherwise impair any license previously issued to a restaurant 7
or dining facility meeting the requirements of KRS 241.010(37)[(39)](b). 8
Section 37. KRS 243.040 is amended to read as follows: 9
The following kinds of malt beverage licenses may be issued by the malt beverages 10
administrator, the fees for which shall be: 11
(1) Brewer's license, per annum ........................................................................$2,580.00 12
(2) Microbrewery license, per annum ...................................................................$520.00 13
(3) Distributor's license, per annum ......................................................................$520.00 14
(4) Nonquota retail malt beverage package license, per annum ............................$210.00 15
(5) Out-of-state malt beverage supplier's license, 16
per annum ....................................................................................................$1,550.00 17
(6) Malt beverage storage license, per annum ......................................................$260.00 18
(7) Replacement or duplicate license, per annum ...................................................$25.00 19
(8) Limited out-of-state malt beverage supplier's license, 20
per annum .......................................................................................................$260.00 21
(9) Nonquota type 4 malt beverage drink license, 22
per annum .......................................................................................................$210.00 23
(10) Direct shipper[ Type A] license, per annum ....................................................$100.00 24
(11) The holder of a nonquota retail malt beverage package license may obtain a 25
Nonquota type 4 malt beverage drink license for a fee of fifty dollars ($50). The 26
holder of a Nonquota type 4 malt beverage drink license may obtain a nonquota 27
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retail malt beverage package license for a fee of fifty dollars ($50). 1
(12) A nonrefundable fee of sixty dollars ($60) shall be charged to process each new 2
transitional license pursuant to KRS 243.045. 3
(13) Other special licenses as the state b oard finds to be necessary for the administration 4
of KRS Chapters 241 to 244 and for the proper regulation and control of the 5
trafficking in malt beverages, as provided for by administrative regulations 6
promulgated by the state board. 7
A nonrefundable appli cation fee of fifty dollars ($50) shall be charged to process each 8
new application for a license under this section. The application fee shall be applied to 9
the licensing fee if the license is issued, or otherwise the fee shall be retained by the 10
department. 11
Section 38. KRS 243.075 is amended to read as follows: 12
(1) (a) A city with a population of less than twenty thousand (20,000) based upon the 13
most recent federal decennial census, a county that does not contain a city 14
with a population equal to or greater than twenty thousand (20,000) based 15
upon the most recent federal decennial census, or a county that contains a city 16
authorized to impose a fee under subsection (9) of this section, that is wet 17
through a local option el ection held under KRS Chapter 242 is authorized to 18
impose a regulatory license fee not to exceed five percent (5%) upon the gross 19
receipts of the sale of alcoholic beverages[ and cannabis-infused beverages] of 20
each establishment located in the city or coun ty licensed to sell alcoholic 21
beverages[ or cannabis-infused beverages]. 22
(b) The regulatory license fee may be levied at the beginning of each budget 23
period at a percentage rate that is reasonably estimated to fully reimburse the 24
local government for the e stimated costs of any additional policing, 25
regulatory, or administrative expenses related to the sale of alcoholic 26
beverages[ or cannabis-infused beverages] in the city and county. 27
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(c) The regulatory license fee shall be in addition to any other taxes, fee s, or 1
licenses permitted by law, except: 2
1. A credit against a regulatory license fee shall be allowed in an amount 3
equal to any licenses or fees imposed by the city or county pursuant to 4
KRS 243.060 or 243.070; and 5
2. In a county in which the city and cou nty both levy a regulatory license 6
fee, the county license fee shall only be applicable outside the 7
jurisdictional boundaries of those cities which levy a license fee. 8
(2) (a) A city or county that is moist through a local option election held under KRS 9
242.1244 may by ordinance impose a regulatory license fee upon the gross 10
receipts of the sale of alcoholic beverages of each establishment located in the 11
city or county and licen sed to sell alcoholic beverages by the drink for 12
consumption on the premises. 13
(b) The regulatory license fee may be levied annually at a rate that is reasonably 14
estimated to fully reimburse the city or county for the estimated costs for any 15
additional policing, regulatory, or administrative related expenses. 16
(c) The regulatory license fee shall be in addition to any other taxes, fees, or 17
licenses permitted by law, but a credit against the fee shall be allowed in an 18
amount equal to any licenses or fees imposed by the city or county pursuant to 19
KRS 243.060 or 243.070. 20
(d) In a county in which the city and county both levy a regulatory license fee, the 21
county license fee shall only be applicable outside the jurisdictional 22
boundaries of those cities which levy a license fee. 23
(3) (a) For any election held after July 15, 2014, any new fee authorized under 24
subsection (1) or (2) of this section shall be enacted by the city or county no 25
later than two (2) years from the date of the local option election held under 26
KRS Chapter 242. 27
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(b) Notwithstanding paragraph (a) of this subsection, any city or county that held 1
a local option election between July 15, 2014, and July 15, 2018, may enact a 2
regulatory licensing fee in accordance with subsection (1) of this section 3
within two (2) years of June 29, 2021. 4
(4) After July 15, 2014, any fee authorized under subsections (1) and (2) of this section 5
shall be established at a rate that will generate revenue that does not exceed the total 6
of the reasonable expenses actually incurred by the city or county in the 7
immediately previous fiscal year for the additional cost, as demonstrated by 8
reasonable evidence, of: 9
(a) Policing; 10
(b) Regulation; and 11
(c) Administration; 12
as a result of the sale of alcoholic beverages [ or cannabis-infused beverages] within 13
the city or county. 14
(5) (a) The Alcoholic Beverage Control Board shall promulgate administrative 15
regulations which set forth the process by which a city or county, in the first 16
year following the discontinuance of prohibition, may estimate any additional 17
policing, regulation, and administrative expenses by a city or county directly 18
and solely related to the discontinuance of prohibition. This subsection shall 19
apply to any discontinuance of prohibition occurring after the promulgation of 20
administrative regulations required by this subsection. 21
(b) After the first year, the regulatory license fee for each subsequent year shall 22
conform to the requirements of subsection (4) of this section. 23
(6) The revenue received from the imposition of the regu latory license fee authorized 24
under subsections (1) and (2) of this section shall be: 25
(a) Deposited into a segregated fund of the city or county; 26
(b) Spent only in accordance with the requirements of subsections (1) and (2) of 27
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this section; and 1
(c) Audited under an annual audit performed pursuant to KRS 43.070, 64.810, 2
and 91A.040. 3
(7) Any city or county found by a court to have violated the provisions of this section 4
shall: 5
(a) Provide a refund as determined by the court to any licensee that has been 6
harmed in an amount equal to its prorated portion of the excess revenues 7
collected by the city or county that are directly attributable to a violation 8
occurring after July 15, 2014; 9
(b) Be responsible for the payment of the reasonable attorney fees directly 10
incurred by a party to a litigation in an amount ordered by the court upon its 11
finding of an intentional and willful violation of this section by a city or 12
county occurring after July 15, 2014; and 13
(c) Upon the finding by a court of a second intentional and willful violation of the 14
provisions of this section, lose the ability to impose the regulatory fee 15
provided by this section for a period of five (5) years and, upon the finding by 16
a court of a third intentional and willful violation, forfeit the right to im pose 17
the regulatory license fee authorized by this section. 18
(8) Any party bringing suit against a city or county for an alleged violation of this 19
section occurring after July 15, 2014, shall be responsible for the payment of the 20
reasonable attorney fees of the city or county in an amount determined by the court 21
upon a finding by the court that the city or county did not violate this section. 22
(9) (a) Any city that does not meet the population requirements of subsection (1) of 23
this section, and any county tha t has a city exceeding the population 24
requirements of subsection (1) of this section, that imposed a regulatory 25
license fee pursuant to this section as of January 1, 2019, shall be deemed to 26
meet the requirements for doing so set out in this section and ma y continue to 27
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impose the regulatory license fee previously established pursuant to this 1
section. 2
(b) Any city or county that is authorized to impose the regulatory license fee 3
under subsection (1) of this section, or under paragraph (a) of this subsection, 4
that imposed the regulatory license fee at a rate higher than five percent (5%) 5
prior to June 27, 2019, may continue to impose the regulatory license fee at a 6
rate that exceeds five percent (5%). The rate shall continue to be calculated 7
annually pursuant to the requirements of this section and shall not exceed the 8
rate that was imposed by the city or county on January 1, 2019. 9
(10) A direct shipper licensee shall be subject to and remit the regulatory license fee 10
imposed by this section as though it were a n establishment located in a city or 11
county licensed to sell alcoholic beverages [ or cannabis -infused beverages] . This 12
fee shall be considered a tax as defined in KRS 243.029. 13
(11) Any city or county imposing a regulatory license fee under this section sha ll file 14
with the department a report showing the applicable fee amount and remittance 15
address for each affected license type in its jurisdiction on or before August 1, 16
2020. Any adoption of this fee after July 15, 2020, or modification of the applicable 17
fee amount or remittance address for each affected licensee shall be reported to the 18
department within thirty (30) days of adoption by the city or county imposing the 19
fee. Within twenty (20) days after receipt of the information, the department shall 20
compile and publish the information so that it is readily available to the public. 21
Section 39. KRS 243.0811 is amended to read as follows: 22
(1) Any person delivering alcoholic beverages [ or cannabis -infused beverages] by the 23
package at retail on behalf of a licensee shall not sell to: 24
(a) A minor under twenty-one (21) years of age; or 25
(b) An intoxicated person. 26
(2) Any person delivering alcoholic beverages [ or cannabis -infused beverages] on 27
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behalf of a retail package licensee [ or cannabis -infused beverage retail licensee] to 1
an individual consumer shall verify that the recipient is at least twenty -one (21) 2
years of age by requiring the production of a valid identification document as 3
defined in KRS 241.010. 4
(3) Any person delivering alcoholic beverages [ or cannabis -infused beverages] by the 5
package at retail on behalf of a licensee shall possess a physical or electronic 6
version of the license issued by the department. 7
Section 40. KRS 243.100 is amended to read as follows: 8
An individual shall not become a licensee if the individual: 9
(1) (a) Has been convicted of any felony until five (5) years have passed from the 10
date of conviction, release from custody o r incarceration, parole, or 11
termination of probation, whichever is later; 12
(b) Has been convicted of any misdemeanor involving a controlled substance that 13
is described in or classified pursuant to KRS Chapter 218A in the two (2) 14
years immediately preceding the application; 15
(c) Has been convicted of any misdemeanor directly or indirectly attributable to 16
the use of alcoholic beverages [ or cannabis -infused beverages] in the two (2) 17
years immediately preceding the application; 18
(d) Is under the age of twenty-one (21) years; or 19
(e) Has had any license relating to the regulation of the manufacture, sale, and 20
transportation of alcoholic beverages [ or the regulation of the sale, 21
distribution, or transportation of cannabis -infused beverages] revoked for 22
cause or has been convicted of a violation of any statute within KRS Chapters 23
241 to 244, until the expiration of two (2) years from the date of the 24
revocation or conviction. 25
(2) A partnership, limited partnership, limited liability company, corporation, 26
governmental age ncy, or other business entity recognized by law shall not be 27
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licensed if: 1
(a) Each principal owner, partner, member, officer, and director does not qualify 2
under subsection (1)(a), (b), (c), (d), and (e) of this section; 3
(b) It has had any license relating to the regulation of the manufacture, sale, and 4
transportation of alcoholic beverages [ or the regulation of the sale, 5
distribution, or transportation of cannabis -infused beverages] revoked for 6
cause or has been convicted of a violation of any statute with in KRS Chapters 7
241 to 244, until the expiration of two (2) years from the date of the 8
revocation or conviction; or 9
(c) Any principal owner, partner, member, officer, or director, or any business 10
entity in which they were directly or indirectly interested, has had any license 11
revoked for cause or has been convicted of a violation of any statute within 12
KRS Chapters 241 to 244, until the expiration of the later of two (2) years 13
from the date of the revocation or two (2) years from the date of conviction. 14
(3) The provisions of subsection (1)(a) and (b) shall apply to anyone applying for a new 15
license under this chapter after July 15, 1998, but shall not apply to those who 16
renew a license that was originally issued prior to July 15, 1998, or an application 17
for a supplemental license where the original license was issued prior to July 15, 18
1998. 19
(4) A person shall not evade license disqualification by applying for a license through 20
or under the name of a different person. The state administrators shall examine the 21
ownership, membership, and management of all license applicants, and shall deny 22
the application if a disqualified person has a direct or indirect interest in the 23
applicant's business. The department may issue administrative subpoenas and 24
summonses to deter mine ownership of an applicant or to investigate alleged 25
violations by a licensee. 26
(5) A direct shipper license applicant shall be exempt from the requirements of this 27
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section, and shall instead follow the requirements set forth in KRS 243.027. 1
Section 41. KRS 243.110 is amended to read as follows: 2
(1) Except as provided in subsection (3) of this section, each kind of license listed in 3
KRS 243.030 shall be incompatible with every other kind listed in that section and 4
a[no] person or entity holding a license of any of those kinds shall not apply for or 5
hold a license of another kind listed in KRS 243.030. 6
(2) (a) Each kind of license listed in KRS 243.040(1), (3), or (4) shall be 7
incompatible with every other kind listed in KRS 243.040(1), (3), or (4), and 8
a[no] person holding a license of any of those kinds shall not apply for or 9
hold a license of any other kind listed in KRS 243.040(1), (3), or (4). 10
(b) A brewery holding a license listed in KRS 243.040(5) or (8) shall not apply 11
for or hold a license listed in KRS 243.040(3) or (4). 12
(3) (a) The holder of a quota retail package license may also hold a quota retail drink 13
license, an NQ1 retail drink license, an NQ2 retail drink license, an NQ3 retail 14
drink license [, a cannabis -infused beverage retail package license] , or a 15
special nonbeverage alcohol license. 16
(b) The holder of a transporter's license may also hold a distilled spirits and wine 17
storage license. 18
(c) The holder of a d istiller's license may also hold a rectifier's license, a special 19
nonbeverage alcohol license, a winery license, or a small farm winery license. 20
(d) A commercial airline system or charter flight system retail license, a 21
commercial airline system or charter flight system transporter's license, and a 22
retail drink license if held by a commercial airline or charter flight system 23
may be held by the same licensee. 24
(e) A Sunday retail drink license, vintage distilled spirits license, and 25
supplemental license may be held by the holder of a primary license. 26
(f) The holder of a distiller's, winery, small farm winery, brewer, microbrewery, 27
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distilled spirits and wine supplier's, or malt beverage supplier's license may 1
also hold a direct shipper license. 2
(g) The holder o f an NQ1 retail drink license, an NQ2 retail drink license, an 3
NQ3 retail drink license, a quota retail drink license, or a limited restaurant 4
license may also hold a limited nonquota package license. 5
(4)[ (a) The holder of a cannabis -infused beverage reta il package license shall not 6
apply for or hold the license listed in KRS 243.030(5) or 243.040(3). 7
(b) The holder of a cannabis -infused beverage retail package license shall also 8
hold a quota retail package license. 9
(c) The holder of a cannabis -infused beverage distributor's license may hold it as 10
a primary license or as a supplemental license to a distributor's license or a 11
wholesaler's license. 12
(5)] Any person may hold two (2) or more licenses of the same kind. 13
(5)[(6)] A person or entity shall not evade the prohibition against applying for or 14
holding licenses of two (2) kinds by applying for a second license through or under 15
the name of a different p erson or entity. The state administrator shall examine the 16
ownership, membership, and management of applicants, and shall deny the 17
application for a license if the applicant is substantially interested in a person or 18
entity that holds an incompatible license. 19
Section 42. KRS 243.200 is amended to read as follows: 20
(1) A transporter's license may be issued as a primary license to a motor carrier 21
authorized to transact business in the Commonwealth by the Transportation Cabinet 22
or the Federal Motor Carrier Safety Administration or to another person engaged in 23
business as a common carrier. A person holding a transporter's license may 24
transport alcoholic beverages [ or cannabis -infused beverages] to or from the 25
licensed premises of any licensee under this chapter to an individual consumer if 26
both the consignor and consignee in each case are authorized by the law of the 27
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states of their residence to sell, purchase, deliver, ship, or receive the alcoholic 1
beverages[ or cannabis-infused beverages]. 2
(2) (a) A transporter may deliver or ship to consumers over twenty -one (21) years of 3
age in packages clearly marked [either, as appropriate: 4
1. ]"Alcoholic Beverages, adult signature (21 years of age or over) required"[; or 5
2. "Cannabis-infused Beverages, adult signature (21 years of age or over) required";] 6
and shall request adult-signature-only service from the carrier. 7
(b) Deliveries or shipments of alcoholic beverages [ or cannabis -infused 8
beverages] shall only be made into areas of the s tate in which alcoholic 9
beverages[ or cannabis -infused beverages] may be lawfully sold. When the 10
shipper requests adult -signature-only service, it shall be a violation for a 11
common carrier not to inspect government -issued identification for proof of 12
age. A[No] properly licensed common carrier or any of its employees acting 13
on behalf of a consignor in the course and scope of a delivery or shipment of 14
alcoholic beverages[ or cannabis -infused beverages] to a consumer shall not 15
be liable for a violation of this subsection or any provision of KRS 242.250, 16
242.260, or 242.270 prohibiting the delivery or shipment of alcoholic 17
beverages[ or cannabis -infused beverages] into areas of the state in which 18
alcoholic beverages[ or cannabis-infused beverages] are not lawfully sold. 19
(3) Except for a common carrier that has been assigned a USDOT number issued by the 20
Federal Motor Carrier Safety Administration, the holder of a transporter's license 21
shall cause each truck or vehicle to display the name of the licensee and the st ate 22
license numbers in a manner prescribed by an administrative regulation 23
promulgated by the board. 24
(4) Except for an application by a common carrier that has been assigned a USDOT 25
number issued by the Federal Motor Carrier Safety Administration, an appli cation 26
for a transporter's license shall include a statement that the applicant, if issued a 27
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license, shall allow any authorized investigators of the department to stop and 1
examine the cargo of any truck or vehicle in which alcoholic beverages [ or 2
cannabis-infused beverages] are being transported within the boundaries of the 3
Commonwealth of Kentucky. 4
(5) A licensee may move, within the same county, alcoholic beverages [ or cannabis -5
infused beverages] from one (1) of the licensee's licensed premises to anothe r 6
without a transporter's license. A licensee may move alcoholic beverages [ or 7
cannabis-infused beverages] from one (1) of the licensee's licensed premises 8
located in one (1) county to a licensed premises located in another county, without a 9
transporter's license, with prior written approval of the administrator for good cause 10
shown. The licensee shall keep and maintain, in one (1) of its licensed premises, 11
adequate books and records of the transactions involved in transporting alcoholic 12
beverages[ or canna bis-infused beverages] from one (1) licensed premises to 13
another in accordance with standards established in administrative regulations 14
promulgated by the board. The records shall be available to the department and the 15
Department of Revenue upon request. 16
(6) Distilled spirits and wine may be transported by any licensed retailer selling 17
distilled spirits or wine, by the package or by the drink, from the premises of a 18
licensed wholesaler to the licensed premises of the retail licensee. Both the 19
wholesaler and the retailer engaging in activity under this subsection shall be 20
responsible for maintaining records documenting the transactions. 21
Section 43. KRS 243.380 is amended to read as follows: 22
(1) Applications for distilled spirit and wine licenses[ or for cannabis-infused beverage 23
licenses] shall be made to the distilled spirits administrator. Applications for malt 24
beverage licenses shall be made to the malt beverages administrator. Applications 25
for distilled spirits, wine, an d malt beverage licenses shall be made to the distilled 26
spirits administrator and to the malt beverages administrator. 27
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(2) All applications shall be on forms furnished by the department. They shall be 1
verified and shall set forth in detail all information concerning the applicant and the 2
premises submitted for licensing as the board requires through the promulgation of 3
an administrative regulation. Each application shall be accompanied by payment. 4
Payment of the license fee may be by certified check, a post al or express money 5
order, or any other method of payment approved in writing by both the Finance and 6
Administration Cabinet and the Office of the State Treasurer. Promptly upon receipt 7
of the payment the board shall pay it into the State Treasury, giving the Department 8
of Revenue copies of the pay -in vouchers and any other supporting data as the 9
Department of Revenue requires for revenue control purposes. 10
(3) (a) A business entity that owns more than two (2) licensed premises may initially 11
submit common in formation about ownership, officers, directors, managerial 12
employees, and shall provide current criminal background checks once for all 13
separately licensed premises in one (1) master file. 14
(b) Any business qualifying under this subsection shall only be required to amend 15
its master file information for material changes under KRS 243.390(2) or 16
ownership transfers under KRS 243.630. 17
(c) A direct shipper license applicant shall be exempt from the re quirements of 18
this subsection and shall instead meet the requirements for its license type as 19
set forth in KRS 243.027. 20
Section 44. KRS 243.390 is amended to read as follows: 21
(1) The board may require through the promulg ation of an administrative regulation 22
that license applications contain the following information, given under oath: 23
(a) The name, age, Social Security number, address, residence, and citizenship of 24
each applicant; 25
(b) If the applicant is a partner, the na me, age, Social Security number, address, 26
residence, and citizenship of each partner and the name and address of the 27
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partnership; 1
(c) The name, age, Social Security number, address, residence, and citizenship of 2
each individual or partner interested in the business for which the license is 3
sought, together with the nature of that interest, and, if the applicant is a 4
corporation, limited partnership company, limited liability company, or other 5
business entity recognized by law, the name, age, Social Security number, and 6
address of each principal owner, member, officer, and director of the 7
applicant. The department may require the names of all owners and the 8
ownership percentage held by each; 9
(d) The premises to be licensed, stating the street and number, if t he premises has 10
a street number, and a description that will reasonably indicate the location of 11
the premises; 12
(e) 1. A statement that neither the applicant nor any other person referred to in 13
this section has been convicted of: 14
a. Any misdemeanor directly or indirectly attributable to alcoholic 15
beverages[ or cannabis-infused beverages]; 16
b. Any violation involving a controlled substance that is described in 17
or classified pursuant to KRS Chapter 218A within the two (2) 18
years immediately preceding the application; 19
c. Any felony, within five (5) years from the later of the date of 20
parole or the date of conviction; or 21
d. Providing false information to the department preceding the 22
application; and 23
2. A statement that the applicant or any other person referred to in this 24
section has not had any license that has been issued under KRS Chapters 25
241 to 244 revoked for cause within two (2) years prior to the date of the 26
application; 27
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(f) A statement that the applicant will in good faith abide by every state and local 1
statute, regulation, and ordinance relating to the manufacture, sale, use of, and 2
trafficking in alcoholic beverages[ or cannabis-infused beverages]; and 3
(g) Any other information necessary for the department to administer KRS 4
Chapters 241 to 244. 5
(2) If, after a license has been issued, there is a change in any of the facts required to be 6
set forth in the application, a verified supplemental statement in writing giving 7
notice of the change shall be filed with the department within ten (10) days after the 8
change. 9
(3) In giving any notice or taking any action in reference to a license, the department 10
may rely upon the information furnished in the application or in the supplemental 11
statement connected with the application. This information, as against the license e 12
or applicant, shall be conclusively presumed to be correct. The information required 13
to be furnished in the application or supplemental statement shall be deemed 14
material in any prosecution for perjury. 15
(4) A direct shipper license applicant shall be exe mpt from the requirements of this 16
section and shall instead meet the requirements for its license type as set forth in 17
KRS 243.027. 18
Section 45. KRS 243.480 is amended to read as follows: 19
(1) Upon proceedings for the revocation of any license under KRS 243.520, the 20
Alcoholic Beverage Control Board, or the local administrator, may in its or his or 21
her discretion order a suspension of the license for any cause for which it may, but 22
is not required to, revoke the license under the provisions of KRS 243.490 and 23
243.500. However, the licensee may have the alternative, subject to the approval of 24
the Alcoholic Beverage Control Board or the local admini strator, to pay in lieu of 25
part or all of the days of any suspension period, a sum as follows: 26
(a) Except for violations arising from retail sales activities, including sales under 27
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licenses issued pursuant to KRS 243.086 and sales at retail under KRS 1
243.0305: 2
1. Distillers, rectifiers, wineries, and brewers, one thousand dollars 3
($1,000) per day; 4
2. Wholesale distilled spirits and wine licensees, four hundred dollars 5
($400) per day; and 6
3. Wholesale malt beverage licensees, four hundred dollars ($400) per 7
day[; and 8
4. Cannabis-infused beverage distributor's license, four hundred dollars 9
($400) per day]; 10
(b) 1. Retail licensees authorized to sell distilled spirits, wine, or malt 11
beverages by the package or drink, fifty dollars ($50) per day; and 12
2. Distillers, wineries, and brewers for violations arising from their retail 13
sales activities, including sales by distillers under licenses issued 14
pursuant to KRS 243.086 and sales at retail under KRS 243.0305, fifty 15
dollars ($50) per day; and 16
(c)[ Cannabis-infused beverage retail package licenses, fifty dollars ($50) per day; 17
and 18
(d)] All remaining licensees, fifty dollars ($50) per day. 19
(2) Payments in lieu of suspension or for board -ordered agency s erver training, 20
collected on a cost recovery basis, collected by the Alcoholic Beverage Control 21
Board shall be deposited in the State Treasury and credited to the general 22
expenditure fund. Payments in lieu of suspension collected by local administrators 23
shall be deposited and used as local alcoholic beverage license tax receipts are 24
deposited and used. 25
(3) In addition to or in lieu of a suspension of a license, the board may order a licensee 26
to pay for and require attendance and completion by some or all of the licensee's 27
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alcoholic beverage servers in the department's server training program. 1
(4) Appeals from orders of suspension and the procedure thereon shall be the same as 2
are provided for orders of revocation in KRS Chapter 13B[. 3
(5) The portions of this section relating to local administrators shall not apply to 4
cannabis-infused beverage licensees]. 5
Section 46. KRS 243.490 is amended to read as follows: 6
A license may be revoked or suspended by the board for a violation of any of the 7
following: 8
(1) Any of the provisions of KRS Chapters 241 to 244; 9
(2) Any administrative regulation of the board relating to the regulation of the [: 10
(a) ]manufacture, sale, and transportation of alcoholic beverages[; or 11
(b) Distribution and retail sale of cannabis-infused beverages]; 12
(3) Any rule or administrative regulation of the Department of Revenue relating to the 13
taxation of alcoholic beverages[ or cannabis-infused beverages]; 14
(4) Any Act of Congress or any rule or regulation of any fed eral board, agency, or 15
commission; 16
(5) Any local ordinance relating to the regulation of the [: 17
(a) ]manufacture, sale, and transportation or taxation of alcoholic beverages[; or 18
(b) Distribution, retail sale, or taxation of cannabis-infused beverages]; 19
(6) Any of the laws, regulations, or ordinances referred to in this section when an 20
agent, servant, or employee of the licensee committed the violation, irrespective of 21
whether the licensee knew of or permitted the violation or whether the violation 22
was committed in disobedience of the licensee's instructions; 23
(7) Any cause which the Alcoholic Beverage Control Board in the exercise of its sound 24
discretion deems sufficient; or 25
(8) Any of the reasons for which the state administrator would have been required to 26
deny a license if existing material facts had been known. 27
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Section 47. KRS 243.500 is amended to read as follows: 1
Any license may be revoked or suspended for the following causes: 2
(1) Conviction of the licensee or the licensee's agent, servant, or employee for selling 3
any illegal alcoholic beverages [ or cannabis -infused beverages] on the licensed 4
premises. 5
(2) Making any false, material statements in an application or renewal application for a 6
license or supplemental license. 7
(3) Conviction of the licensee or any of the licensee's agents, servants, or employees of: 8
(a) Two (2) violations of the terms and provisions of KRS Chapters 241 to 244, 9
or any act regulating the manufacture, sale, and transportation of alcoholic 10
beverages[ or the sale, distribution, or transportation of cannabis -infused 11
beverages] within two (2) consecutive years; 12
(b) Two (2) misdemeanors directly or indirectly attributable to the use of 13
alcoholic beverages [ or cannabis -infused beverages] within two (2) 14
consecutive years; or 15
(c) Any felony. 16
(4) Failure or default of a licensee to pay an excise tax or any part of the tax or any 17
penalties imposed by or under the provisions of any statutes, ordinances, or Acts of 18
Congress relative to taxation, or for a violation of any related administrative 19
regulations promulgated by the Department of Revenue. 20
(5)[ (a)] Revocation of any license or permit provided in KRS 243.060, 243.070, 21
243.600, and 243.610, or granted under any Act of Congress relative to the 22
regulation of the manufacture, sale, and transportation of alcoholic beverages. 23
[(b) Revocation of any license established under KRS 243.200, 243.403, or 24
243.405 relative to the sale, distribution, or transportation of cannabis -infused 25
beverages.] 26
(6) Setting up, conducting, operating, or keeping, on the licensed premises, any 27
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gambling game, device, machine, contrivance, lottery, gift enterprise, handbook, or 1
facility for betting or transmitting bets on horse races; or permitting to be set up, 2
conducted, operated, kept, or engaged in, on the licensed premises, any gambling 3
game, device, machine, contrivance, lottery, gift enterprise, handbook, or facility. 4
This subsection shall not apply to: 5
(a) The sale of lottery tickets sold under the provisions of KRS Chapter 154A; 6
(b) The operation of a pari -mutuel system for betting, or the operation of sports 7
wagering, where authorized by law; 8
(c) The conduct of charitable gaming by a charitable organization licensed or 9
permitted under KRS Chapters 230 and 238; or 10
(d) Special temporary raffles of alcoholic beverages under KRS 243.036. 11
(7) Conviction of the licensee, the licensee's agents, servants, or employees for: 12
(a) The trafficking or possession upon the licensed premises of controlled or 13
illegal substances described in KRS Chapter 218A, including synthetic drugs; 14
(b) Knowingly permitting the trafficking or possession by patrons upon the 15
licensed premises of controlled or illegal substances described in KRS 16
Chapter 218A, including synthetic drugs; or 17
(c) Knowingly receiving stolen property upon the licensed premises. 18
(8) Failure to comply with the terms of a final order of the board. 19
Section 48. KRS 243.540 is amended to read as follows: 20
(1) The provisions of this section shall apply to any licensee who is unable to continue 21
in business at the licensed premises because of: 22
(a) An act of God; 23
(b) A casualty; 24
(c) An acquisition by a federal , state, city, or other governmental agency under 25
the power of eminent domain granted to the government or agency; 26
(d) A voluntary or involuntary acquisition by any corporation or other business 27
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entity recognized by law through the power of eminent domain; 1
(e) A loss of lease because the landlord fails to renew an existing lease; 2
(f) Court action; 3
(g) Default under a security agreement; 4
(h) Default under a lease; or 5
(i) Other verifiable business reason. 6
(2) If a license issued by the department has been revoked, the former licensee may, 7
under the supervision of the state administrator, dispose of and transfer the former 8
licensee's stock to another licensee if the disposition is completed within ninety (90) 9
days and the licensee is a distiller, rectifier, winery, or brewer. The disposition shall 10
be completed within thirty (30) days if the licensee is a wholesaler or distributor or 11
within twenty (20) days if the licensee is a retailer. 12
(3) A retail licensee in g ood standing with the department who voluntarily ceases to 13
operate the licensed business for any reason other than revocation by the board or a 14
court order shall dispose of all alcoholic beverage [ or cannabis -infused beverage] 15
inventory within thirty (30) days of the event. The following requirements shall 16
apply to the disposition of the licensee's inventory: 17
(a) If the premises is still open to the public and the licensee has not yet 18
surrendered the license, the licensee shall sell alcoholic beverages [ or 19
cannabis-infused beverages] only to the public and shall not sell below costs; 20
(b) If a licensee has terminated the licensed business, the licensee shall submit a 21
written request for approval from the state administrator within ten (10) days 22
in advance of the sale to dispose of the licensee's remaining inventory. The 23
request shall identify the retailer who is purchasing the inventory, the 24
proposed date of the sale, and the quantity, types, and brands of alcoholic 25
beverages[ or cannabis-infused beverages] to be sold; and 26
(c) If a licensee has more than one (1) licensed retail premises and closes one (1) 27
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or more retail premises and seeks to transfer the inventory to another licensed 1
retail premises the licensee owns, the licensee shall submit a request in 2
writing to the state administrator at least ten (10) days before the inventory is 3
transferred. The request shall identify the premises to which the alcoholic 4
beverages[ or cannabis-infused beverages] are being transferred, the proposed 5
date of the transfer, an d the quantity, types, and brands of alcoholic 6
beverages[ or cannabis-infused beverages] to be sold. 7
(4) If a licensee files for bankruptcy or is directed by a court to dispose of inventory to 8
satisfy a lien or judgment, the inventory may be sold only to a licensee holding any 9
license that authorizes the possession and sale of those alcoholic beverages [ or 10
cannabis-infused beverages] . The bankrupt licensee or the licensee subject to the 11
court order shall notify the department of the sale and shall attach a copy of the 12
court order or the judgment directing the sale and a list of the quantity, types, and 13
brands of alcoholic beverages [ or cannabis-infused beverages] to be sold, but if the 14
licensee fails to do so, the notification may be made by the bankruptcy trustee, the 15
lienholder, or the judgment creditor. Any licensee who purchases the inventory 16
shall notify the department within five (5) days after the transfer of the specific 17
inventory sold. 18
(5) A secured creditor or landlord that is in possession, custody, or control of any 19
alcoholic beverages owned by a licensee may dispose of those alcoholic beverages 20
through the department's public auction as authorized by s ubsection (6) of this 21
section or may dispose of alcoholic beverages [ or cannabis -infused beverages] in 22
the following manner: 23
(a) The secured creditor or landlord shall submit a written request for approval 24
from the state administrator, within twenty (20) d ays in advance of the sale or 25
destruction of the licensee's remaining inventory. The request shall identify 26
the: 27
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1. Licensee who is purchasing the inventory or the business to destroy the 1
inventory; 2
2. Proposed date of the sale or destruction; and 3
3. Quantity, types, and brands of alcoholic beverages [ or cannabis -infused 4
beverages] to be sold or destroyed; 5
(b) The proposed transferee or transferees may be any person or persons holding 6
any license that authorizes the possession and sale of those alcoholic 7
beverages[ or cannabis-infused beverages], or a business authorized to dispose 8
of alcoholic beverages[ or cannabis-infused beverages]; 9
(c) A copy of the written request shall be mailed by the department to the 10
licensee's registered agent or last known addres s on file with the department 11
by certified mail. Within ten (10) days after the department's mailing of this 12
request, the licensee shall file with the department and applicant any objection 13
the licensee has to the request, or be permanently barred from objecting; and 14
(d) If a sale is approved, the licensee who purchases the inventory shall notify the 15
department within five (5) days after the transfer of that specific inventory. 16
(6) The board may promulgate administrative regulations for additional means for the 17
transfer or disposal of alcoholic beverage inventory, including procedures to allow 18
the board to dispose of the inventory through public auction if: 19
(a) A final order relating to those alcoholic beverages has been entered after all 20
administrative and judicial proceedings are conducted, if applicable; 21
(b) The entire proceeds of the public auction are donated to the alcohol wellness 22
and responsibility education fund established in KRS 211.285; and 23
(c) The board deems the inventory safe to release to the public, including but not 24
limited to the alcoholic beverages being in their original, unopened packaging. 25
Section 49. KRS 243.720 is amended to read as follows: 26
(1) (a) There is levied upon the use, sale, or distribution by sale or gift of distilled 27
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spirits a tax of one dollar and ninety -two cents ($1.92) on each wine gallon of 1
distilled spirits, and a proportional rate per gallon on all distilled spirits used, 2
sold, or distributed in any container of more or less than on e (1) gallon, but 3
the rate of the excise tax on spirits in retail containers of one -half (1/2) pint 4
shall be twelve cents ($0.12); and 5
(b) Notwithstanding the provisions of paragraph (a) of this subsection, distilled 6
spirits placed in containers for sale a t retail, where the distilled spirits 7
represent six percent (6%) or less of the total volume of the contents of the 8
containers, shall be taxed at the rate of twenty-five cents ($0.25) per gallon. 9
(2) There is levied upon the use, sale, or distribution by sale or gift of wine, a tax of 10
fifty cents ($0.50) on each gallon of wine, and a proportional rate per gallon on the 11
wine used, sold, or distributed in any container of more or less than one (1) gallon , 12
but the tax shall not be less than four cents ($0.04) on the sale or distribution of any 13
retail container of wine. 14
(3) (a) There is levied upon the sale or distribution by sale or gift of malt beverages 15
an excise tax of two dollars and fifty cents ($2.50) on each barrel of thirty-one 16
(31) gallons and a proportional rate per gallon on malt beverages sold or 17
distributed in any container of more or less than thirty-one (31) gallons; 18
(b) Each brewer producing malt beverages in this state shall be entitled to a credit 19
of fifty percent (50%) of the tax levied on each barrel of malt beverages sold 20
in this state, up to three hundred thousand (300,000) barrels per annum. 21
(4)[ There is levied upon the use, sale, or distribution by sale or gift of cannabis -infused 22
beverages a tax of one dollar and ninety -two cents ($1.92) on each gallon of a 23
cannabis-infused beverage, and a proportional rate per gallon on all cannabis -24
infused beverages used, sold, or distributed in any container of more or less than 25
one (1) gallon. 26
(5)] This section shall not apply to: 27
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(a) Wine manufactured, sold, given away, or distributed and used solely for 1
sacramental purposes; or 2
(b) Distilled spirits and wine purchased by holders of special licenses provided 3
for in KRS 243.320 and purchased and u sed in the manner authorized by 4
those licenses. 5
Section 50. KRS 243.730 is amended to read as follows: 6
(1) (a) Wholesalers of distilled spirits and wine shall pay and report the tax levied by 7
KRS 243.720(1) and (2) on or before the twentieth day of the calendar month 8
next succeeding the month in which possession or title of the distilled spirits 9
and wine is transferred from the wholesaler to retailers or consumers in this 10
state, in accordance with administrative regulatio ns promulgated under KRS 11
Chapter 13A designed reasonably to protect the revenues of the 12
Commonwealth. 13
(b) 1. Distributors or retailers of malt beverages, who purchase malt beverages 14
directly from a brewer, shall pay and report the tax levied by KRS 15
243.720(3) on or before the twentieth day of the calendar month next 16
succeeding the month in which the brewer sells, transfers, or passes title 17
of the malt beverage to the distributor or retailer, in accordance with 18
administrative regulations promulgated under KR S Chapter 13A 19
designed reasonably to protect the revenues of the Commonwealth. 20
2. The credit allowed brewers in this state, under the provisions of KRS 21
243.720(3)(b), shall flow through to the distributor or retailer who 22
purchases malt beverages directly from the brewer. 23
3. If a brewer sells, transfers, or passes title to malt beverages to any of its 24
employees for home consumption or to any charitable or fraternal 25
organization pursuant to the provisions of KRS 243.150, the brewer 26
shall be responsible for pa ying and reporting the tax levied by KRS 27
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243.720(3) in accordance with the provisions of paragraph (d) of this 1
subsection. 2
(c)[ Cannabis-infused beverage distributors shall pay and report the tax levied by 3
KRS 243.720(4) on or before the twentieth day of t he calendar month next 4
succeeding the month in which possession or title of the cannabis -infused 5
beverages are transferred from the cannabis -infused beverage distributor to 6
retailers or consumers in this state, in accordance with administrative 7
regulations promulgated under KRS Chapter 13A designed reasonably to 8
protect the revenues of the Commonwealth. 9
(d)] 1. Every brewer selling, transferring, or passing title to malt beverages to 10
any person in this state other than a distributor or retailer; and 11
2.[ Every manufacturer of cannabis -infused beverages permitted by the 12
Department for Public Health selling, transferring, or passing title to 13
cannabis-infused beverages to any person in this state other than a 14
distributor or retailer; and 15
3.] Every other person s elling, transferring, or passing title of distilled 16
spirits, wine, or malt beverages [, or cannabis -infused beverages] to 17
distributors, retailers [, cannabis -infused beverage licensees] , or 18
consumers; 19
shall report and pay the tax levied by KRS 243.720 on or before the twentieth 20
day of the calendar month next succeeding the month in which possession or 21
title of distilled spirits, wine, or malt beverages [, or cannabis -infused 22
beverages] is transferred to a distributor, retailer [, cannabis-infused beverage 23
licensee], or consumer in this state, in accordance with administrative 24
regulations promulgated under KRS Chapter 13A designed reasonably to 25
protect the revenues of the Commonwealth. 26
(e) Every distributor, retailer, or consumer possessing, using, selling, or 27
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distributing distilled spirits, wine, or malt beverages [, or cannabis -infused 1
beverages] in this state upon which the tax levied by KRS 243.720 and 2
243.884 has not been paid shall be jointly and severally liable for reporting 3
and paying the tax due, in acco rdance with administrative regulations 4
promulgated under KRS Chapter 13A designed reasonably to protect the 5
revenues of the Commonwealth. The liability shall not be extinguished until 6
the tax has been paid to the Department of Revenue. 7
(f) Notwithstanding the provisions of paragraph (a) of this subsection, every 8
owner of a small farm winery shall pay and report the tax levied by KRS 9
243.720 (1) and (2) on a quarterly basis, in accordance with administrative 10
regulations of the Department of Revenue designed reasonably to protect the 11
revenues of the Commonwealth. 12
(2) Every wholesaler of distilled spirits or wine before using, selling, or distributing by 13
sale or gift distilled spirits and wine shall register with the Department of Revenue. 14
(3) Every brewer before selling or distributing by sale or gift malt beverages, or before 15
importing malt beverages into the state, shall register with the Department of 16
Revenue in a manner as the Department of Revenue may require[. 17
(4) Every manufacturer of cannabis -infused be verages before selling or 18
distributing by sale or gift cannabis -infused beverages, or before importing 19
cannabis-infused beverages into the state, shall: 20
(a) Obtain a permit as a food manufacturer through the Department for Public 21
Health; and 22
(b) Register with the Department of Revenue in a manner as the Department of 23
Revenue may require]. 24
Section 51. KRS 243.790 is amended to read as follows: 25
The sale or distribution of alcoholic beverages [ or cannabis -infused beverages] 26
manufactured in or imported into this state for shipment permanently out of the state to 27
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be sold without the state and consumed without the state shall not be subject to the ta x 1
imposed by KRS 243.720. Provided, however, the Department of Revenue may, when 2
necessary for the purpose of control enforcement or protection of revenue, prescribe the 3
conditions under which containers of the alcoholic beverages [ or cannabis -infused 4
beverages] for shipment permanently out of the state to be sold without the state and 5
consumed without the state may be kept and trafficked in without payment of the tax. 6
Section 52. KRS 243.850 is amended to read as follows: 7
(1) For the purpose of assisting in the enforcement of KRS 243.720, 243.730, 243.790, 8
and 243.884, every licensee, except retailers, whether subject to the payment of 9
taxes imposed by KRS 243.720, 243.730, 243 .790, and 243.884, shall, on or before 10
the twentieth day of each month, render to the Department of Revenue a statement, 11
in writing, of all trafficking in alcoholic beverages [ or cannabis-infused beverages] 12
during the preceding month. 13
(2) The statement shall: 14
(a) Be taken directly from the records of the reporting licensee [ or manufacturer 15
of cannabis -infused beverages permitted by the Department for Public 16
Health], and shall set forth on forms furnished by the Department of Revenue 17
the required information; and 18
(b) Include alcoholic beverages[ or cannabis-infused beverages] destined for sale 19
outside the state, as well as alcoholic beverages [ or cannabis -infused 20
beverages] subject to the tax imposed by KRS 243.720, 243.730, 243.790, and 21
243.884. 22
(3) The Depa rtment of Revenue shall have authority to require from retail licensees 23
and[,] other licensees [, and manufacturers of cannabis -infused beverages] other 24
reports and statements at the necessary times for the enforcement of KRS 243.720, 25
243.730, 243.790, and 243.884. 26
Section 53. KRS 243.884 is amended to read as follows: 27
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(1) (a) For the privilege of making "wholesale sales" or "sales at wholesale" of malt 1
beverages, wine, or distilled spirits[, or cannabis -infused beverages], a tax is 2
hereby imposed upon all wholesalers of wine and distilled spirits, all 3
distributors of malt beverages [ or cannabis -infused beverages] , all direct 4
shipper licensees shipping alcoholic beverages [ or cannabis -infused 5
beverages] to a consumer at a K entucky address, all distillers making sales 6
pursuant to KRS 243.0305(3), (4)(a)1. and 2. and (c), (7), (9), (10), (12), and 7
(13), all microbreweries selling malt beverages under KRS 243.157, and all 8
small farm wineries selling wine under KRS 243.155 [, and all manufacturers 9
of cannabis -infused beverages permitted by the Department for Public 10
Health]. 11
(b) Prior to July 1, 2015, the tax shall be imposed at the rate of eleven percent 12
(11%) of the gross receipts of any wholesaler or distributor derived from 13
"sales at wholesale" or "wholesale sales" made within the Commonwealth, 14
except as provided in subsection (3) of this section. For the purposes of this 15
section, the gross receipts of a microbrewery making "wholesale sales" shall 16
be calculated by determining th e dollar value amount that the microbrewer 17
would have collected had it conveyed to a distributor the same volume sold to 18
a consumer as allowed under KRS 243.157(3)(b) and (c). 19
(c) The following rates shall apply to wholesale sales or sales at wholesale: 20
1. For distilled spirits [ and cannabis -infused beverages] , eleven percent 21
(11%); and 22
2. For wine and malt beverages, ten percent (10%). 23
(d) The following rates shall apply for direct shipper sales: 24
1. For distilled spirits [ and cannabis -infused beverages shi pments], eleven 25
percent (11%) for wholesale sales or sales at wholesale; and 26
2. For wine and malt beverage shipments, ten percent (10%) for wholesale 27
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sales or sales at wholesale. 1
(e) For direct shipper sales or sales made pursuant to KRS 243.0305, if a 2
wholesale price is not readily available, the direct shipper licensee or distillery 3
shall calculate the wholesale price to be seventy percent (70%) of the retail 4
price of the alcoholic beverages. 5
(2) Wholesalers of distilled spirits and wine, distributors of malt beverages [ or 6
cannabis-infused beverages] , microbreweries, distillers [, manufacturers of 7
cannabis-infused beverages permitted by the Department for Public Health] , and 8
direct shipper licensees shall pay and report the tax levied by this section on or 9
before the twentieth day of the calendar month next succeeding the month in which 10
possession or title of the distilled spirits, wine, or malt beverages [, or cannabis -11
infused beverages] is transferred from the wholesaler or distributor to retailers, or 12
by m icrobreweries, distillers [, manufacturers of cannabis -infused beverages 13
permitted by the Department for Public Health] , or direct shipper licensees to 14
consumers in this state, in accordance with administrative regulations promulgated 15
under KRS Chapter 13A designed reasonably to protect the revenues of the 16
Commonwealth. 17
(3) Gross receipts from sales at wholesale or wholesale sales shall not include the 18
following sales: 19
(a) Sales made between wholesalers or[,] between distributors [, or between 20
manufacturers of cannabis-infused beverages permitted by the Department for 21
Public Health]; 22
(b) Sales from the first fifty thousand (50,000) gallons of wine produced by a 23
small farm winery in a calendar year made by: 24
1. The small farm winery; or 25
2. A wholesaler of that wine produced by the small farm winery; and 26
(c) Sales made between a direct shipper licensee and a consumer located outside 27
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of Kentucky. 1
Section 54. KRS 244.060 is amended to read as follows: 2
(1) A[No] licensee shall not purchase or agree to purchase any alcoholic beverages [ or 3
cannabis-infused beverages] from any person within or without this state, who is 4
not licensed to sell the beverages to the particular purchaser at the time of the 5
agreement to sell, nor give any order for any alcoholic beverages to any person who 6
is not a holder of a special agent's or solicitor's license if this license is required. 7
(2) A[No] licensee shall not sell or agree to sell any alcoholic beverage [ or cannabis -8
infused beverage] to any person within or without this state who is not legally 9
authorized to buy and receive the beverages at the time of the agreement to sell, nor 10
secure any order for the sale of any alcoholic beverages through any person who is 11
not the holder of a special agent's or solicitor's license. 12
Section 55. KRS 244.080 is amended to read as follows: 13
A retail licensee, or the licensee's agent, servant, or employee, shall not sell, give away, 14
or deliver any alcoholic beverages [ or cannabis -infused beverages], or procure or permit 15
any alcoholic beverages [ or cannabis -infused b everages] to be sold, given away, 16
possessed by, or delivered to: 17
(1) A minor, except that in any prosecution for selling alcoholic beverages [ or 18
cannabis-infused beverages] to a minor it shall be an affirmative defense that the 19
sale was induced by the use of false, fraudulent, or altered identification papers or 20
other documents and that the appearance and character of the purchaser were such 21
that the purchaser's age could not have been ascertained by any other means and 22
that the purchaser's appearance and c haracter indicated strongly that the purchaser 23
was of legal age to purchase alcoholic beverages [ or cannabis -infused beverages]. 24
This evidence may be introduced either in mitigation of the charge or as a defense 25
to the charge itself; or 26
(2) A person who appears to a reasonable person to be actually or apparently under the 27
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influence of alcoholic beverages [, cannabis -infused beverages] , controlled 1
substances, other intoxicating substances, or any of these substances in 2
combination, to the degree that the pers on may endanger any person or property, or 3
unreasonably annoy persons in the vicinity. 4
Section 56. KRS 244.150 is amended to read as follows: 5
Each licensee shall keep and maintain upon the licensed premises, or make read ily 6
available upon request of the department or the Department of Revenue, adequate books 7
and records of all transactions involved in the manufacture, distribution, or sale of 8
alcoholic beverages[ and all transactions involved in the distribution or sale o f cannabis-9
infused beverages,] in the manner required by administrative regulations of the 10
department and the Department of Revenue. 11
Section 57. KRS 244.160 is amended to read as follows: 12
Whenever any alcoholic beverage [ or cannabis-infused beverage], in whatever quantity, 13
is found on any business premises within this state, a prima facie presumption shall arise 14
that the alcoholic beverage[ or cannabis-infused beverage] was upon the premises for the 15
purpose of sale. 16
Section 58. KRS 244.202 is amended to read as follows: 17
(1) (a) When the department seizes alcoholic beverages [ or cannabis -infused 18
beverages], within fourteen (14) days of the seizure it shall provide the 19
licensee with notice of the violation that formed the basis for the seizure under 20
KRS Chapters 241 to 244. 21
(b) If the department fails to properly provide this notice, the seized alcoholic 22
beverages[ or cannabis-infused beverages] shall be returned to the licensee. 23
(c) If the department provides proper notice, the licensee may request a hearing 24
before the board in accordance with KRS Chapter 13B to determine if the 25
seizure was justified. 26
(2) An aggrieved party may appeal the board's final order in the Circuit Court of the 27
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county where the seizure occurred. 1
Section 59. KRS 260.852 is amended to read as follows: 2
It is the declared policy of the Commonwealth that hemp is a viable agricultural crop in 3
the Commonwealth. The purposes of KRS 260.850 to 260.869 are to: 4
(1) Promote the research and study methods of cultivating, processing, and marketing 5
hemp; 6
(2) Promote the expansion of the Commonwealth's hemp industry [ to the maximum 7
extent permitted by federal law] by allowing citizens of the Common wealth to 8
cultivate, handle, or process hemp and hemp products for commercial purposes; and 9
(3) Move the Commonwealth and its citizens to the forefront of the hemp industry. 10
Section 60. KRS 260.858 is amended to read as follows: 11
(1) Notwithstanding any other provision of law to the contrary, it is lawful for a 12
licensee, or his or her agent, to cultivate, handle, or process hemp or hemp products 13
in the Commonwealth. 14
(2) It is unlawful for a person who does not hold a license issued by the Department of 15
Psychoactive Substances, or who is not an agent of a licensee, to cultivate, handle, [ 16
process,] or market living hemp plants or viable seeds, leaf materials, or floral 17
materials derived f rom hemp. Penalties for persons who cultivate, handle, process, 18
or market living hemp plants or viable seeds, leaf materials, or floral materials 19
derived from hemp without a license are the same as those penalties that are 20
applicable to persons who violate KRS Chapter 218A, relating to marijuana. 21
(3) It is unlawful for a person who does not hold a license issued by the department, or 22
who is not an agent of a licensee, to possess hemp extract material having a [ delta-23
9] tetrahydrocannabinol concentration in excess of three -tenths of one percent 24
(0.3%). Penalties for persons who possess such hemp extract materials without a 25
license are the same as those penalties that are applicable to persons who violate 26
KRS Chapter 218A, relating to marijuana. 27
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(4) [Nothing in ]This chapter shall not authorize[authorizes] any person to violate any 1
federal or state law or regulation. 2
Section 61. KRS 260.862 is amended to read as follows: 3
(1) In addition to any other powers vested in it by law, the department shall have the 4
authority and power to promulgate administrative regulations to: 5
(a) License persons who wish to cultivate, handle,[ process,] or market hemp; 6
(b) Prescribe rules for a university's participation in, or affiliation with, any hemp 7
program; 8
(c) Prescribe sampling and testing procedures to ensure that hemp and hemp 9
products cultivated, handled, [ processed,] or marketed under the authority of 10
this section do not exceed the concen tration levels defined in federal law as it 11
currently exists or as it may be subsequently amended; 12
(d) Prescribe rules for a licensed cultivator or licensed handler to sell hemp 13
floral material to a licensed medical cannabis processor, producer, or 14
dispensary as defined in KRS Chapter 218B so long as the harvested floral 15
material has been grown within the legal framework of the department's 16
hemp program and is tested in accordance with the Commonwealth's 17
medical cannabis program [Define classes or categories of hemp products 18
that are eligible for sale, transfer, or distribution to members of the public] ; 19
and 20
(e) Establish a schedule of nonrefundable fees for applicants and licensees. 21
(2) (a) A[No] person shall not cultivate, handle, [ process,] or market hemp in the 22
Commonwealth unless the person holds a license issued by the department. 23
(b) Any person seeking to cultivate hemp shall provide to the department the 24
legal description and global positioning coordinates sufficient for locating the 25
fields or greenhouses to be used to grow hemp. 26
(c) Any person seeking to cultivate or process hemp shall provide to the 27
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department prior written consent allowing representatives of the department, 1
the Department of Kentucky State Police, and other state and local law 2
enforcement agencies to enter onto all premises where hemp is cultivated, 3
processed, or stored for the purpose of conducting physical inspections or 4
ensuring compliance with the requirements of KRS 260.850 to 260.869 and 5
administrative regulations promulgated by the department. 6
(d) An applicant for a license issued by the department shall submit to and pay for 7
an annual criminal background check conducted by the Department of 8
Kentucky State Police or another state or federal law enforcement agency or 9
another entity selected by the department. 10
(e) A[No] person who has been convicted of any felony or any drug -related 11
misdemeanor or violation in the previous ten (10) years from the date of 12
application shall not be eligible to obtain a license, provided, however, that: 13
1. A person who was growing hemp lawfully with a license, registration, 14
or authorization under a pilot program authorized by Section 7606 of the 15
Agricultural Act of 2014, 7 U.S.C. sec. 5940, shall be eligible to obtain 16
a license to grow hemp; and 17
2. A pe rson who was lawfully growing hemp under Section 7606 of the 18
Agricultural Act of 2014 before December 20, 2018, and was convicted 19
prior to December 20, 2018, shall be eligible to obtain a license to grow 20
hemp. 21
Section 62. KRS 260.8635 is amended to read as follows: 22
(1) As used in this section, "location" means a single contiguous parcel of land and any 23
buildings situated thereon. 24
(2) A[No] person shall not move or transport, or aid or abet another person in moving 25
or transporting, any intermediate hemp-derived cannabinoid product[hemp extract 26
material] having a delta -9 tetrahydrocannabinol concentration in excess of three -27
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tenths of one percent (0.3%): 1
(a) From any location outside the Commonwealth to any location within th e 2
Commonwealth; 3
(b) From any location inside the Commonwealth to any location outside the 4
Commonwealth;[ or] 5
(c) Except as provided in subsection (3) of this section, from any location inside 6
the Commonwealth to any other location inside the Commonwealth; or 7
(d) Except as provided in subsection (4) of this section. 8
(3) A[ licensed] processor licensed by the Department of Psychoactive Substances , or 9
a person acting as a representative of a licensed processor, may move or transport 10
intermediate hemp-derived cannabinoid products[hemp extract material] having a 11
delta-9 tetrahydrocannabinol concentration in excess of three -tenths of one percent 12
(0.3%) from one (1) licensed processing location in the Commonwealth to another 13
licensed processing location in the Commonwealth, provided that: 14
(a) The intermediate hemp-derived cannabinoid products[hemp extract material] 15
shall move directly from one (1) licensed processing location to another; and 16
(b) The licensed processor shall provide written notice to the department of the 17
planned movement at least twenty -four (24) hours in advance to include the 18
following information: 19
1. The date of the movement; 20
2. The address of the origin; 21
3. The address of the destination; and 22
4. Other information required by the department. 23
(4) A licensed processor, or a person acting as a representative of a licensed 24
processor, may move or transport intermediate hemp -derived can nabinoid 25
products having a total tetrahydrocannabinol concentration in excess of three -26
tenths of one percent (0.3%) from one (1) licensed processing location to another 27
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licensed processing location if: 1
(a) The intermediate hemp -derived cannabinoid products move directly from 2
one (1) licensed processing location to another; 3
(b) The licensed processor provides written notice to the department of the 4
planned movement at least twenty-four (24) hours in advance to include the 5
following information: 6
1. The date of the movement; 7
2. The address of the origin; 8
3. The address of the destination; and 9
4. Other information required by the department; and 10
(c) The intermediate hemp -derived cannabinoid products are transported from 11
the Commonwealth to a license holder in an other state where that state's 12
hemp program accepts the transport of the intermediate hemp -derived 13
cannabinoid products from another state and the transportation is not 14
transported through a state that does not permit such transport. 15
Section 63. The Department of Agriculture, Department for Public Health, and 16
the Department of Alcoholic Beverage Control shall transfer all licensee and licensing 17
data to the Department of Psychoactive Substances for any area of their jurisd iction 18
related to market participant licensing that has been transferred to the Department of 19
Psychoactive Substances in Sections 1 to 62 of this Act. 20
Section 64. The following KRS sections are repealed: 21
243.401 Department to regulate distribution and retail sale of cannabis -infused 22
beverages -- Conditions for sale -- Sales to persons under age 21 prohibited -- 23
Permitted activities by manufacturers -- Shipping and delivery. 24
243.403 Cannabis-infused beverage retail p ackage license -- Requirements -- 25
Conditions. 26
243.405 Cannabis-infused beverage distributor's license -- Requirements -- Conditions. 27