Iowa lawmakers clear path to cannabis regulation

The Administrative Rules Review Commission on Tuesday took no action on a set of regulations developed by the state Department of Health and Human Services to implement a state law enacted this year regulating the products.

The bill, House File 2605, regulates the amount of THC — the main compound in cannabis that gets you high — in cannabis products intended for consumption, requires them to have a warning label and requires them to comply with packaging standards. The bill also bans sales to minors and the sale of synthetic cannabis intended for consumption.

By law, products must contain less than 4 milligrams of THC per serving and 10 milligrams per package.

The law is the subject of legal challenges from several cannabis retailers who say it is unconstitutional. A federal judge is expected to issue an injunction soon on a request to temporarily block the law from taking effect.

Draft regulations implementing the law, which have been in the works since May and have been the subject of two public hearings, have drawn significant criticism from cannabis companies. The Department of Health and Human Services provided lawmakers with the most up-to-date version of the draft regulations Tuesday, which had not previously been made public.

Department of Health and Human Services staff said they plan to use emergency rulemaking powers to make the regulations go into effect on Wednesday, the earliest date allowed under law.

During Tuesday’s hearing, cannabis business owners asked state lawmakers to halt the department’s rule, saying it would create more confusion for the industry and be impossible to comply with, exposing them to criminal liability for what they said were loosely defined terms.

One of the main concerns for retailers is the definition of a “serving,” which is not specified in the bill. Producers believed they could change the label on their 12-ounce cans to include more than one serving, which would allow them to sell cans with up to 10 milligrams of THC. However, the draft legislation says a 12-ounce can cannot contain more than one serving, citing federal serving size standards.

Scott Selix, co-founder of Climbing Kites, an Iowa-based beverage company, was clearly disappointed with the actions of state regulators during Tuesday’s meeting and acknowledged that they did not clearly explain to him how the law would be enforced.

Selix said the state Department of Health and Human Services should not dictate how much a “serving” is because the law does not explicitly give the department that authority. He said lawmakers assured him during the legislative session that his products would not be covered by the law.

“What the department is proposing is not what was enacted,” he said. “The way they regulated portions … the minute you all enacted it, they said, ‘No, no, no. Now we’re going to define portions so we can get back control.’”

Nick Crawford, a member of the department’s government relations team, said the section of the bill requiring the department to adopt regulations covering “packaging and labelling requirements” gives it the power to regulate portion sizes.

“We believe that in order to implement packaging and labeling requirements, it is necessary to establish definitions of a portion and a container,” he said.

The act also directed HHS to develop a warning label that companies must display on their products.

Selix said the rulemaking process prevented the company from meeting the warning label requirements because the final wording of the requirement was not released until Tuesday and is set to go into effect Wednesday. It said it had production deadlines well before this week.

“It is no exaggeration to say that I have no idea how to comply with this law,” he said. “… The department has refused to answer my questions.”

Asked earlier about how the law would be enforced, Iowa Department of Health and Human Services spokesman Alex Murphy said the department would not comment on pending litigation.

The Administrative Rules Review Committee has several options for delaying or opposing state agency rulemaking. It can implement a 70-day pause in the rulemaking, delay it until the end of the upcoming legislative session, or file a formal objection.

Four Democrats on the 10-member commission supported a 70-day pause in implementation of the legislation, but that request was defeated due to opposition from the Republican majority on the commission.

Sen. Cindy Winckler, a Davenport Democrat, said the rulemaking process moved too quickly and lawmakers should pause its implementation to make sure it meets the intent of the law.

“Given the interests of businesses, the health of individuals and clarity on what exactly will be implemented, I believe we need to suspend activities and give them 70 days,” Winckler said.

Republicans did not comment on the motion or their reasons for opposing it.