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1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 HOUSE BILL 1722
4
5 By: Representative J. Moore
6 By: Senator G. Stubblefield
7
8 For An Act To Be Entitled
9 AN ACT TO PROVIDE FOR THE REGULATION OF HEMP-DERIVED
10 PRODUCTS BY THE ARKANSAS TOBACCO CONTROL BOARD; TO
11 AMEND THE ARKANSAS LAW TO ALLOW THE REGULATION AND
12 PURCHASE OF HEMP-DERIVED PRODUCTS; TO DECLARE AN
13 EMERGENCY; AND FOR OTHER PURPOSES.
14
15
16 Subtitle
17 TO PROVIDE FOR THE REGULATION OF HEMP-
18 DERIVED PRODUCTS BY THE ARKANSAS TOBACCO
19 CONTROL BOARD; TO AMEND THE ARKANSAS LAW
20 TO ALLOW THE REGULATION AND PURCHASE OF
21 HEMP-DERIVED PRODUCTS; AND TO DECLARE AN
22 EMERGENCY.
23
24 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
25
26 SECTION 1. Arkansas Code � 5-64-101(16)(B)(vi), concerning the
27 exclusion from the definition of "marijuana" within the Uniform Controlled
28 Substances Act, is amended to read as follows:
29 (vi) Hemp-derived cannabidiol that: Hemp as defined
30 in � 20-56-501 et seq., or
31 (a) Contains not more than three-tenths of one
32 percent (0.3%) of delta-9 tetrahydrocannabinol (THC) on a dry weight basis as
33 verified by a nationally accredited laboratory for quality, purity, and
34 accuracy standards; and
35 (b) Is not approved by the United States Food
36 and Drug Administration for marketing as a medication;
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1
2 SECTION 2. Arkansas Code � 5-64-215(a)(2), concerning the substances
3 in Schedule VI of the Uniform Controlled Substances Act, is amended to read
4 as follows:
5 (2) Tetrahydrocannabinols, unless the tetrahydrocannabinol is:
6 (A) Contained in hemp-derived cannabidiol hemp or a hemp-
7 derived product under � 20-56-501 et seq.;
8 (B) Not more than three-tenths of one percent (0.3%) of
9 delta-9 tetrahydrocannabinol in the hemp-derived cannabidiol on a dry weight
10 basis as verified by a nationally accredited laboratory for quality, purity,
11 and accuracy standards; and
12 (C)(B) Not approved Approved by the United States Food and
13 Drug Administration for marketing as a medication;
14
15 SECTION 3. Arkansas Code � 5-64-215(a)(5)(A)(i), concerning the
16 substances in Schedule VI of the Uniform Controlled Substances Act, is
17 amended to read as follows:
18 (A)(i) Tetrahydrocannabinols, including without limitation
19 the following:
20 (a) Delta-1 cis or trans tetrahydrocannabinol,
21 otherwise known as a delta-9 cis or trans tetrahydrocannabinol, and its
22 optical isomers;
23 (b) Delta-6 cis or trans tetrahydrocannabinol,
24 otherwise known as a delta-8 cis or trans tetrahydrocannabinol, and its
25 optical isomers; and
26 (c) Delta-3,4 cis or trans
27 tetrahydrocannabinol, otherwise known as a delta-6a,10a cis or trans
28 tetrahydrocannabinol, and its optical isomers;
29 (d) Delta-10 cis or trans
30 tetrahydrocannabinol, and its optical isomers;
31 (e) Delta-8 tetrahydrocannabinol acetate
32 ester;
33 (f) Delta-9 tetrahydrocannabinol acetate
34 ester;
35 (g) Delta-6a,10a tetrahydrocannabinol acetate
36 ester;
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1 (h) Delta-10 tetrahydrocannabinol acetate
2 ester;
3 (i) A product derived from industrial hemp
4 that was produced as a result of a synthetic chemical process that converted
5 the industrial hemp or a substance contained in the industrial hemp into
6 delta-8, delta-9, delta-6a,10a, or delta-10 tetrahydrocannabinol including
7 their respective acetate esters; and
8 (j) Any other psychoactive substance derived
9 therein.
10
11 SECTION 4. Arkansas Code � 19-6-831, effective until the contingency
12 in Acts 2023, No. 629, � 17, is met, is amended to read as follows:
13 19-6-831. Arkansas Tobacco Control Revenue Fund.
14 (a) There is created on the books of the Treasurer of State, the
15 Auditor of the State, and the Chief Fiscal Officer of the State a special
16 revenue fund to be known as the "Arkansas Tobacco Control Revenue Fund".
17 (b)(1) All permit and license fees received by Arkansas Tobacco
18 Control under the Arkansas Tobacco Products Tax Act of 1977, � 26-57-201 et
19 seq., and � 20-56-501 et seq. shall be deposited into the State Treasury as
20 special revenues to the credit of the fund.
21 (2) The fund also shall consist of any other revenues authorized
22 by law.
23 (c)(1) The fund shall be used for expenses incurred by Arkansas
24 Tobacco Control in the organization, maintenance, operation, and merchant
25 education and training with regard to enforcement of � 5-27-227, the Arkansas
26 Tobacco Products Tax Act of 1977, � 26-57-201 et seq., � 20-56-501 et seq.,
27 and the Unfair Cigarette Sales Act, � 4-75-701 et seq.
28 (2) Expenditures of moneys in the fund are subject to the
29 General Accounting and Budgetary Procedures Law, � 19-4-101 et seq., the
30 Arkansas Procurement Law, � 19-11-201 et seq., and other applicable fiscal
31 laws.
32 (3) The receipts and disbursements of Arkansas Tobacco Control
33 shall be audited annually by Arkansas Legislative Audit.
34
35 SECTION 5. Arkansas Code � 19-6-831, effective if the contingency in
36 Acts 2023, No. 629, � 17, is met, is repealed.
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1 19-6-831. Arkansas Tobacco Control Revenue Fund.
2 (a) There is created on the books of the Treasurer of State, the
3 Auditor of the State, and the Chief Fiscal Officer of the State a special
4 revenue fund to be known as the "Arkansas Tobacco Control Revenue Fund".
5 (b)(1) All permit and license fees received by Arkansas Tobacco
6 Control under the Arkansas Tobacco Products Tax Act of 1977, � 26-57-201 et
7 seq., and � 20-56-401 et seq., shall be deposited into the State Treasury as
8 special revenues to the credit of the fund.
9 (2) The fund also shall consist of any other revenues authorized
10 by law.
11 (c)(1) The fund shall be used for expenses incurred by Arkansas
12 Tobacco Control in the organization, maintenance, operation, and merchant
13 education and training with regard to enforcement of � 5-27-227, the Arkansas
14 Tobacco Products Tax Act of 1977, � 26-57-201 et seq., � 20-56-401 et seq.,
15 and the Unfair Cigarette Sales Act, � 4-75-701 et seq.
16 (2) Expenditures of moneys in the fund are subject to the
17 General Accounting and Budgetary Procedures Law, � 19-4-101 et seq., the
18 Arkansas Procurement Law, � 19-11-201 et seq., and other applicable fiscal
19 laws.
20 (3) The receipts and disbursements of Arkansas Tobacco Control
21 shall be audited annually by Arkansas Legislative Audit.
22
23 SECTION 6. Arkansas Code Title 20, Chapter 56, is amended to add an
24 additional subchapter to read as follows:
25 Subchapter 5 - Hemp-Derived Products
26
27 20-56-501. Purpose.
28 It is the intent of this subchapter to provide regulation of hemp-
29 derived products to:
30 (1) Assure that when hemp-derived products are distributed in
31 this state, they are not contaminated and are distributed only to persons
32 authorized to receive hemp-derived products;
33 (2) Protect and promote the public health and welfare of the
34 residents of this state;
35 (3) Provide for the close supervision and control of the
36 permitting of persons to sell hemp and hemp-derived products in this state to
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1 ensure that hemp and hemp-derived products are fresh, not contaminated, and
2 are properly taxed, stamped, stored, and distributed only to persons
3 authorized to receive hemp and hemp-derived products in this state;
4 (4) Impose permits, fees, taxes, and restrictions on the
5 privilege of dealing in or otherwise doing business in hemp and hemp-derived
6 products in order to promote the public health and welfare of the residents
7 of this state and to protect the revenue collection procedures incorporated
8 within this subchapter; and
9 (5) Create a three-tiered system of a manufacturer, wholesaler,
10 and retailer of hemp and hemp-derived products.
11
12 20-56-502. Applicability.
13 (a) This subchapter does not permit a person to:
14 (1) Undertake a task under the influence of hemp-derived
15 products when doing so would constitute negligence or professional
16 malpractice; or
17 (2) Possess, smoke, or otherwise engage in the use of hemp or
18 hemp-derived products:
19 (A) On a school bus;
20 (B) On the grounds of a daycare center, preschool, primary
21 or secondary school, college, or university;
22 (C) At a drug or alcohol treatment facility;
23 (D) At a community or recreation center;
24 (E) In a correctional facility;
25 (F) On any form of public transportation; or
26 (G) On any property that is under control of the Arkansas
27 National Guard or the United States military; or
28 (H) In the operation, navigation, or actual physical
29 control of a motor vehicle, aircraft, motorized watercraft, or any other
30 vehicle drawn by power other than muscle power while under the influence of
31 hemp-derived products.
32 (b) This subchapter does not require:
33 (1) An employer to accommodate the ingestion of hemp-derived
34 products in a workplace or an employee working while under the influence of
35 hemp-derived products;
36 (2) An individual or establishment in lawful possession of
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1 property to allow a guest, client, customer, or other visitor to use hemp-
2 derived products on or in that property; or
3 (3) An individual or establishment in lawful possession of
4 property to admit a guest, client, customer, or other visitor who is
5 inebriated as a result of his or her use of hemp-derived products.
6
7 20-56-503. Definitions.
8 As used in this subchapter:
9 (1) "Annual" or "annually" means the fiscal year from July 1
10 through the next June 30;
11 (2) "Approved laboratory" means a laboratory that is accredited
12 by the National Institute on Drug Abuse, the National Environmental
13 Laboratory Accreditation Conference, the International Organization for
14 Standardization or similar accrediting entity as determined by Arkansas
15 Tobacco Control and that has been approved by the Director of Arkansas
16 Tobacco Control specifically for the testing of hemp-derived products;
17 (3) "Consumer" means a member of the public at large;
18 (4)(A) "Current use of hemp or hemp-derived product" means use
19 of hemp-derived products that justifies the good faith belief of an employer
20 that an applicant or employee is engaging in the use of hemp or hemp-derived
21 product.
22 (B) "Current use of hemp or hemp-derived product" is
23 presumed when a positive test result for delta-9 tetrahydrocannabinol-9
24 carboxylic acid, also known as THCA;
25 (5) "Days" means calendar days unless otherwise specified;
26 (6) "Employee" means an individual employed by an employer;
27 (7) "Employer" means an entity that employs one (1) or more
28 employees or independent contractors;
29 (8)(A) "Good faith belief" means reasonable reliance on a fact,
30 or that which is held out to be factual, without intent to deceive or be
31 deceived and without reckless or malicious disregard for the truth.
32 (B) "Good faith belief" does not include a belief formed
33 with gross negligence.
34 (C) "Good faith belief" may be based on any of the
35 following:
36 (i) Observed conduct, behavior, or appearance;
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1 (ii) Information reported by a person believed to be
2 reliable, including without limitation a report by a person who witnessed the
3 use or possession of hemp or hemp-derived products by an applicant or
4 employee in the workplace;
5 (iii) Written, electronic, or verbal statements from
6 the employee or other persons;
7 (iv) Lawful video surveillance;
8 (v) A record of a government agency, law enforcement
9 agency, or court;
10 (vi) A positive test result for delta-9
11 tetrahydrocannabinol-9 carboxylic acid;
12 (vii) A warning label, usage standard, or other
13 printed material that accompany instructions for usable hemp or hemp-derived
14 products;
15 (viii) Information from a physician, medical review
16 officer, or a retailer;
17 (ix) Information from reputable reference sources in
18 print or on the internet;
19 (x) Other information reasonably believed to be
20 reliable or accurate; or
21 (xi) Any combination of the items listed in
22 subdivision (8)(C)(i)-(x) of this section;
23 (9) "Hemp" means the plant Cannabis sativa and any part of the
24 plant, including the seeds of the plant, and all derivatives, extracts,
25 cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or
26 not, with a delta-9 tetrahydrocannabinol concentration of not more than
27 three-tenths percent (0.3%) on a dry weight basis;
28 (10) "Hemp-derived e-liquid product" means a liquid hemp-derived
29 product that contains hemp that is inhaled when using a vapor product, and
30 that may or may not include without limitation propylene glycol, vegetable
31 glycerin, and flavorings;
32 (11)(A) "Hemp-derived product" means a product intended for
33 human consumption including consumption by vapor inhalation as defined in
34 this subchapter, or a component of a product, that is derived from hemp,
35 including all derivatives, extracts, cannabinoids, isomers, acids, salts, and
36 salts of isomers, and any product made from such derivatives.
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1 (B) "Hemp-derived product" includes a hemp-derived e-
2 liquid product and a vapor product.
3 (C) "Hemp-derived product" does not include:
4 (i) A product intended for animal consumption or
5 use;
6 (ii) A cosmetic as defined by � 20-56-202;
7 (iii) Any marijuana, medical marijuana, or other
8 cannabis product containing delta-9 tetrahydrocannabinol greater than three-
9 tenths percent (0.3%) on a dry weight basis as administered, licensed, and
10 otherwise regulated by the Alcoholic Beverage Control Division, the Medical
11 Marijuana Commission, and the Department of Health under the Arkansas Medical
12 Marijuana Amendment of 2016, Arkansas Constitution, Amendment 98;
13 (iv) A raw hemp product, including any intact plant,
14 flower, buds, leaves, or stems;
15 (v) A drug in the form for which an application
16 filed in accordance with 21 U.S.C. � 355 is approved by the United States
17 Food and Drug Administration;
18 (vi) A dietary supplement as defined by the Federal
19 Food, Drug, and Cosmetic Act, 21 U.S.C. � 301 et seq.; or
20 (vii) A fabric, textile, cordage, fiber, fuel,
21 paper, construction material, plastic, seed, seed meal, and seed oil;
22 (12)(A) "Manufacturer" means a person that manufactures,
23 fabricates, assembles, or processes a hemp-derived product, including without
24 limitation federally licensed importers and federally licensed distributors
25 that deal in hemp-derived products.
26 (B) "Manufacturer" includes:
27 (i) An entity representing the manufacturer with
28 regard to the sale of hemp-derived products produced by the manufacturer to
29 wholesalers or permitted retailers; and
30 (ii) A person that mixes, compounds, extracts,
31 infuses, blends, processes, repackages, or resizes hemp-derived products
32 including the extraction of cannabinoids from hemp biomass.
33 (C) "Manufacturer" does not include a person that engages
34 in the agricultural production of hemp, such as growing, planting, and
35 harvesting of raw hemp biomass regulated by the State Plant Board;
36 (13) "Minor" means a person who is under twenty-one (21) years
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1 of age;
2 (14) "Person" means an individual, retailer, wholesaler,
3 manufacturer, firm, association, company, partnership, limited liability
4 company, corporation, joint-stock company, club, agency, syndicate, the State
5 of Arkansas, county, municipal corporation or other political subdivision of
6 the state, receiver, trustee, fiduciary, or trade association;
7 (15) "Place of business" means the physical location:
8 (A) Where orders for hemp-derived products are taken or
9 received or where hemp-derived products are sold; and
10 (B) That is on file with Arkansas Tobacco Control;
11 (16) "Positive test result" means a result that is at or above
12 the cutoff concentration level established by the United States Department of
13 Transportation or state laws regarding being under the influence of delta-9
14 tetrahydrocannabinol, whichever is lower;
15 (17) "Retailer" means a person that purchases hemp-derived
16 products from permitted wholesalers for the purpose of selling the hemp-
17 derived products in person and over the counter at retail to consumers;
18 (18)(A) "Safety sensitive position" means any position involving
19 a safety sensitive function under federal regulations governing drug and
20 alcohol testing adopted by the United States Department of Transportation or
21 any other rules, guidelines, or regulations adopted by any other federal or
22 state agency.
23 (B) "Safety sensitive position" also means any position
24 designated in writing by an employer as a safety sensitive position in which
25 a person performing the position while under the influence of hemp-derived
26 products may constitute a threat to health or safety, including without
27 limitation a position:
28 (i) That requires any of the following activities:
29 (a) Carrying a firearm;
30 (b) Performing life-threatening procedures;
31 (c) Working with confidential information or
32 documents pertaining to criminal investigations; or
33 (d) Working with hazardous or flammable
34 materials, controlled substances, food, or medicine; or
35 (ii) In which a lapse of attention could result in
36 injury, illness, or death, including without limitation a position that
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1 includes the operating, repairing, maintaining, or monitoring of heavy
2 equipment, machinery, aircraft, motorized watercraft, or motor vehicles as
3 part of the job duties;
4 (19)(A) "Sale" or "sell" means a transfer, exchange, or barter
5 in any manner or by any means for any consideration, including distributing
6 or shipping hemp-derived product in connection with a sale.
7 (B) A sale "in" or "into" a state refers to the state in
8 which the destination point of the hemp-derived product is located in the
9 sale without regard to where title was transferred.
10 (C) A sale "from" a state refers to the sale of a hemp-
11 derived product that is located in that state to the destination in question
12 without regard to where title was transferred;
13 (20) "Self-service display" means a display:
14 (A) That contains a hemp-derived product, or any component
15 of a hemp-derived product;
16 (B) That is located in an area where customers are
17 permitted; and
18 (C) In which the hemp-derived product, or any component of
19 a hemp-derived product is readily accessible to a customer without the
20 assistance of a salesperson;
21 (21) "Tetrahydrocannabinol" means a compound that is the
22 natural, primary active cannabinoid substance or its equivalent contained in
23 the plant of the genus cannabis or in the resinous extracts of the plant,
24 including derivatives or isomers derived from such cannabinoids;
25 (22)(A) "Under the influence" means symptoms of the current use
26 of hemp or hemp-derived products that may negatively impact the performance
27 of job duties or tasks or constitute a threat to health or safety.
28 (B) "Under the influence" includes without limitation:
29 (i) Symptoms of the applicant's or employee's
30 speech, walking, standing, physical dexterity, agility, coordination,
31 actions, movement, demeanor, appearance, clothing, odor, or other irrational
32 or unusual behavior that are inconsistent with the usual conduct of the
33 applicant or employee;
34 (ii) Negligence or carelessness in operating
35 equipment, machinery, or production or manufacturing processes;
36 (iii) Disregard for safety;
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1 (iv) Involvement in an accident that results in:
2 (a) Damage to equipment, machinery, or
3 property;
4 (b) Disruption of a production or
5 manufacturing process; or
6 (c) An injury; or
7 (v) Other symptoms causing a reasonable suspicion
8 that the current use of hemp or hemp-derived products may negatively impact
9 the performance of job duties or tasks or constitute a threat to health or
10 safety;
11 (23) "Vapor product" means a hemp-derived product that is an
12 electronic oral device of any size or shape that contains a vapor of hemp or
13 hemp-derived e-liquid product that when used or inhaled simulates smoking,
14 regardless of whether a visible vapor is produced, including without
15 limitation a device that:
16 (A) Is composed of a heating element, battery, electronic
17 circuit, chemical process, mechanical device, or a combination of heating
18 element, battery, electronic circuit, chemical process, or mechanical device;
19 (B) Works in combination with a cartridge, other
20 container, or liquid delivery device containing hemp or hemp-derived e-liquid
21 product and manufactured for use with vapor products;
22 (C) Is manufactured, distributed, marketed, or sold as any
23 type or derivation of a vapor product, e-cigarette, e-cigar, e-pipe, or any
24 other produced name or descriptor; and
25 (D) Does not include a product regulated as a drug or
26 device by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. � 301 et seq.,
27 as it existed on January 1, 2015;
28 (24) "Warehouse" means a place where hemp-derived products are
29 stored for another person and to or from which place the hemp-derived
30 products are shipped or delivered upon order by the owner of the hemp-derived
31 products to the warehouse; and
32 (27) "Wholesaler" means a person that:
33 (A) Does business within the state;
34 (B) Purchases hemp-derived products from any source;
35 (C) Distributes or sells the hemp-derived products to
36 other wholesalers or retailers; and
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1 (D) Does not distribute or sell the tobacco products,
2 vapor products, alternative nicotine products, or e-liquid products at retail
3 to consumers.
4
5 20-56-504. Construction -- Prohibitions.
6 (a) A hemp-derived product shall not be delivered, sold, or otherwise
7 distributed in this state except in conformity with all applicable laws and
8 regulations, including this subchapter and rules promulgated under this
9 subchapter.
10 (b) A person shall not sell, deal with, deliver, cause to be delivered
11 to a retailer or consumer, or otherwise do business in hemp-derived products
12 without first registering with the Director of Arkansas Tobacco Control and
13 obtaining a permit for that purpose.
14 (c) A product intended for human consumption or inhalation that is
15 derived from hemp and contains tetrahydrocannabinol shall not be permitted or
16 allowed under the laws of this state, other than hemp-derived products.
17 (d) A hemp-derived product shall be prepackaged and shelf stable.
18 (e) A hemp-derived product shall not contain or include any of the
19 following:
20 (1) Alcoholic beverages, including without limitation beer,
21 wine, intoxicating liquor, or any other alcoholic beverage as defined by the
22 Arkansas Alcoholic Control Act, � 3-1-101 et seq., and � 3-5-202;
23 (2) Products containing nicotine or tobacco;
24 (3) Inhalable products or other products labeled or advertised
25 for the purpose of smoking or in the form of a cigarette, cigar, or pre-roll,
26 or packaged or combined with other items designed to facilitate smoking such
27 as rolling papers or pipes, except hemp-derived e-liquid products; or
28 (4) Medical devices, prescription drugs, or drugs otherwise
29 approved by the United States Food and Drug Administration.
30 (f) The business of handling, receiving, possessing, storing,
31 distributing, taking orders for, soliciting orders of, selling, offering for
32 sale, and dealing in, through sale, barter, or exchange, hemp-derived
33 products is declared to be a privilege under the laws of the State of
34 Arkansas.
35
36 20-56-505. Permits.
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1 (a)(1) Each person listed in this section, before commencing business,
2 or if already in business, before continuing business, shall pay an annual
3 privilege fee and secure a permit from the Director of Arkansas Tobacco
4 Control.
5 (2) A person purchasing an existing permitted retail location
6 may, with the permission of the seller and Arkansas Tobacco Control, operate
7 under the selling owner's permit for no more than thirty (30) days from the
8 date of the sale.
9 (b)(1) In addition to securing a permit under subsection (a) of this
10 section, a manufacturer whose products are sold in this state shall register
11 the business with the Secretary of the Department of Finance and
12 Administration.
13 (2) A wholesaler of hemp-derived products shall secure the
14 proper wholesale permit.
15 (3) Every retailer of hemp-derived products that operates a
16 place of business shall secure the proper retail permit.
17 (4) Before issuing a manufacturer, wholesaler, or retailer
18 permit, Arkansas Tobacco Control shall determine that the permit is not being
19 issued in violation of prohibitions under � 20-56-506.
20 (c)(1) Permits shall be issued as follows:
21 (A) A permit for a sole proprietorship is issued in the
22 owner's name and in the fictitious business name, if any;
23 (B)(i) A permit for a partnership or limited liability
24 company is issued in the name of:
25 (a) The managing partner or managing member;
26 and
27 (b) The partnership or limited liability
28 company.
29 (ii) If the managing partner or managing member of a
30 limited liability company is a partnership, limited liability company, or
31 corporation, then the permit shall be issued in the name of:
32 (a) The president or chief executive officer;
33 and
34 (b) The partnership or limited liability
35 company; and
36 (C) A permit for a publicly traded or nonpublicly traded
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1 corporation is issued in the name of the president or chief executive officer
2 of the corporation and in the name of the corporation.
3 (2) It is a violation for a permitted entity not to provide
4 written notification to the director within thirty (30) days of a change in
5 the following:
6 (A) The managing member of a partnership, managing member
7 of a limited liability company, or president or chief executive officer of a
8 corporation, partnership, or limited liability company; or
9 (B) The stockholders effecting twenty-five percent (25%)
10 or more of the total voting shares of a nonpublicly traded corporation.
11 (d)(1) When an entity transfers a business permitted under this
12 subchapter, the entity to which the business is transferred:
13 (A) Shall apply for a new permit under this subchapter;
14 (B) May be issued a new permit under this subchapter; and
15 (C) May operate under the selling entity's permit for no
16 more than thirty (30) days from the date of the sale.
17 (2) When a partnership or limited liability company permitted
18 under this subchapter changes, removes, or replaces the managing partner,
19 managing member, president, or chief executive officer:
20 (A) The existing permit issued under this subchapter is
21 void; and
22 (B) The partnership or limited liability company:
23 (i) Shall apply for a new permit under this
24 subchapter;
25 (ii) May be issued a new permit under this
26 subchapter; and
27 (iii) May operate under the voided permit for no
28 more than thirty (30) days from the date of the change, removal, or
29 replacement of the managing member of a partnership, managing member of a
30 limited liability company, or president or chief executive officer of a
31 corporation, partnership, or limited liability company.
32 (3) When a nonpublicly traded corporation permitted under this
33 subchapter changes, removes, or replaces the president or chief executive
34 officer named on the permit or changes, removes, or replaces a stockholder
35 who owns fifty percent (50%) or more of the total voting shares of the
36 nonpublicly traded corporation's stock:
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1 (A) The permit issued under this subchapter is void; and
2 (B) The nonpublicly traded corporation:
3 (i) Shall apply for a new permit under this
4 subchapter;
5 (ii) May be issued a new permit under this
6 subchapter; and
7 (iii) May operate under the voided permit for no
8 more than thirty (30) days from the date of the change, removal, or
9 replacement of the president, chief executive officer, or stockholder.
10 (4) When a publicly traded corporation permitted under this
11 subchapter changes, removes, or replaces the president or chief executive
12 officer named on the permit or changes, removes, or replaces a stockholder
13 who owns fifty percent (50%) or more of the total voting shares of the
14 publicly traded corporation's stock:
15 (A) The permit issued under this subchapter is void; and
16 (B) The publicly traded corporation:
17 (i) Shall apply for a new permit under this
18 subchapter;
19 (ii) May be issued a new permit under this
20 subchapter; and
21 (iii) May operate under the voided permit for no
22 more than thirty (30) days from the date of the change, removal, or
23 replacement of the president, chief executive officer, or stockholder.
24 (e) An entity may apply for and be issued a permit under this
25 subchapter in advance of the effective date of the permit to facilitate
26 continuity of business operations.
27
28 20-56-506. Permits - Limitation of interests
29 (a)(1) A person with an ownership, equity, or management interest in a
30 permitted wholesaler may also have an ownership, equity, or management
31 interest in a permitted retailer, but shall not have any ownership, equity,
32 or management interest in a manufacturer.
33 (2) A person with an ownership, equity, or management interest
34 in a permitted retailer may also have an ownership, equity, or management
35 interest in a permitted wholesaler, but a retailer shall not have any
36 ownership, equity, or management interest in a manufacturer.
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1 (3) A person with an ownership, equity, or management interest
2 in a permitted manufacturer shall not have any ownership, equity, or
3 management interest in a permitted wholesaler or retailer.
4 (b) A management company shall not manage a permitted manufacturer and
5 a permitted wholesaler or retailer simultaneously.
6 (c) A permit to manufacture hemp-derived products shall not be issued
7 to any person with an ownership, equity, or management interest in either a
8 wholesaler or retailer.
9
10 20-56-507. Permits -- Location -- Background check required.
11 (a)(1) A retail, wholesale, or manufacturer permit shall not be issued
12 to a residential address, a mobile structure or vehicle, or for an address
13 not zoned appropriately for the business seeking to secure the permit.
14 (2) A retail or wholesale permit may be issued to a person who
15 currently holds a retail or wholesale permit if the locations are different.
16 (b) A permit shall not be issued to:
17 (1) A person who has pleaded guilty or nolo contendere to or
18 been found guilty of a felony; or
19 (2) A business owned or operated, in whole or in part, by a
20 person who has pleaded guilty or nolo contendere to or been found guilty of a
21 felony.
22 (c) Arkansas Tobacco Control shall conduct a criminal background check
23 on each permit applicant and application, utilizing its Arkansas Crime
24 Information Center access as a law enforcement agency, in accordance with ��
25 12-12-1008 -- 12-12-1011.
26
27 20-56-508. Permits -- Annual privilege fees.
28 (a) The annual privilege fee for each permit authorized by this
29 subchapter is established as follows:
30 (1) Wholesale Hemp-derived Products Permit .............. $1,000
31 (2) Retail Hemp-derived Products Permit ................... $100
32 (3) Manufacturer Hemp-derived Products Permit .......... $10,000
33 (b)(1) All permits issued under this subchapter shall expire on June
34 30 following the effective date of issuance.
35 (2)(A) Upon the failure to renew timely a permit issued under
36 this subchapter, a late fee of two (2) times the amount of the appropriate
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1 permit fee shall be owed in addition to the annual privilege fee for the
2 renewal of the permit.
3 (B) An expired permit that is not renewed before September
4 1 following the expiration of the permit shall not be renewed, and the holder
5 of the expired permit shall submit an application for a new permit.
6 (3) A permit shall not be issued to the applicant until the late
7 fee and the permit fee have been paid.
8 (c) A permit issued under this subchapter shall not be renewed for a
9 permit holder who is delinquent more than ninety (90) days on a privilege
10 fee, tax relating to the sale or dispensing of hemp-derived products, or any
11 other state and local tax due the Secretary of the Department of Finance and
12 Administration.
13 (d) A person who is delinquent more than ninety (90) days on a state
14 or local tax may not renew or obtain a permit issued under this subchapter
15 except upon certification that the permit holder has entered into a repayment
16 agreement with the Department of Finance and Administration and is current on
17 the payments.
18 (e) A permit holder who has unpaid fees, civil penalties, or an
19 unserved permit suspension may not transfer, sell, or give hemp-derived
20 product inventory of the business associated with the permit to a third party
21 until all fees and civil penalties are paid in full and all suspensions are
22 completed successfully, nor shall any third party be issued a new permit for
23 the business location.
24 (f) Each manufacturer and wholesaler shall retain copies of all
25 invoices for the purchase or sale of any hemp-derived products for a period
26 of at least three (3) years subject to examination by the secretary and the
27 Director of Arkansas Tobacco Control or their authorized agents upon demand
28 at any time during regular business hours.
29 (g) A retailer shall:
30 (1) Maintain copies of at least the last ninety (90) days of
31 hemp-derived product invoices, which the retailer shall provide immediately
32 upon demand;
33 (2)(A) Make the invoices that are older than ninety (90) days
34 available upon demand at any time during regular business hours in the retail
35 store.
36 (B) Except as provided in subdivision (g)(2)(C) of this
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1 section, an agent of Arkansas Tobacco Control may determine a reasonable time
2 frame for which invoices are to be provided under subdivision (g)(2)(A) of
3 this section.
4 (C) An invoice that is provided seventy-two (72) hours or
5 more after the demand shall not be considered for purposes of determining a
6 violation of this subsection;
7 (3) Retain invoices for all hemp-derived products in the retail
8 store even if the invoice for the hemp-derived products is older than three
9 (3) years;
10 (4) Maintain a copy of the signed server awareness forms for
11 each employee of the retailer who engages in the sale of hemp-derived
12 products, which the retailer shall provide immediately upon demand;
13 (5)(A) Maintain a copy of any complete transfer forms showing:
14 (i) The hemp-derived products that were transferred;
15 (ii) The permitted location from which the hemp-
16 derived products were transferred; and
17 (iii) When the transfer occurred.
18 (B) A transfer form shall be completed contemporaneously
19 with the transfer and shall be provided immediately by the retailer upon
20 demand; and
21 (6) If any inventory was submitted with a permit application,
22 maintain a copy of the submitted inventory form, which the retailer shall
23 provide immediately upon demand.
24 (h) A wholesaler and manufacturer shall:
25 (1) Maintain three (3) years of hemp-derived product invoices
26 that are available upon demand during regular business hours in the permitted
27 location; and
28 (2) Permit Arkansas Tobacco Control and authorized personnel of
29 Arkansas Tobacco Control to enter into and inspect stock of hemp-derived
30 products, and any documents and records relating to receipts and
31 disbursements of hemp-derived products.
32 (i) An invoice from a wholesaler to a retailer shall contain the name
33 or other identifying information of the wholesaler and the retailer.
34 (j)(1) A nonresident wholesaler shall also keep a record of all hemp-
35 derived products purchased for distribution within this state.
36 (2) All books, records, and memoranda pertaining to the purchase
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1 and sale of the hemp-derived products under subdivision (j)(1) of this
2 section shall be subject to inspection by Arkansas Tobacco Control.
3 (k) Authorized personnel of Arkansas Tobacco Control shall not release
4 to the Arkansas Tobacco Control Board or to the public any information
5 identifying customers of the manufacturer, wholesaler, or warehouse except
6 when necessary to notify the board of alleged violations of this subchapter.
7
8 20-56-509. Permits -- Not transferable -- Duplicates.
9 (a) A permit under this subchapter is not transferable to a:
10 (1) Subsequent owner or operator; or
11 (2) Different physical location unless the permit holder obtains
12 permission from the Director of Arkansas Tobacco Control.
13 (b) A person purchasing an existing permitted retail location may
14 operate under the selling owner's permit for no more than thirty (30) days
15 from the date of the sale.
16 (c) When a permit is lost by a permit holder, a duplicate permit may
17 be issued upon application and for a fee of five dollars ($5.00) when
18 sufficient proof has been provided to the director.
19
20 20-56-510. Permits -- Suspension or revocation.
21 (a) All permits issued under this subchapter may be suspended or
22 revoked by the Director of Arkansas Tobacco Control for any violation of this
23 subchapter or the rules pertaining to this subchapter, subject to a hearing
24 before the Arkansas Tobacco Control Board at the next regularly scheduled
25 board meeting.
26 (b) The director may revoke all permits to deal in hemp-derived
27 products associated with any person who is convicted of or pleads guilty or
28 nolo contendere to a criminal violation of this subchapter, subject to a
29 hearing before the board at the next regularly scheduled board meeting.
30 (c)(1) The director shall revoke all permits to manufacture hemp-
31 derived products associated with any person who acquires in any contractual
32 or de facto ownership, equity, or management interest or control in a
33 wholesaler or retailer of hemp-derived products simultaneously with the
34 permit to manufacture hemp-derived products.
35 (2) The director's decision to revoke a permit may be appealed
36 to the board within thirty (30) calendar days of receiving notice of the
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1 permit revocation.
2
3 20-56-511. Advertising prohibitions and packaging requirements.
4 (a) A hemp-derived product distributed or offered for sale in this
5 state shall include the following information on the product label or product
6 packaging:
7 (1) The name of the hemp-derived product manufacturer, whether
8 in-state or out-of-state, and distributor, whether in-state or out-of-state;
9 (2) Product labeling clearly showing that the product contains
10 material derived from hemp and not marijuana or medical marijuana; and
11 (3) Any other marking, words, statement, or symbol as required
12 by Arkansas Tobacco Control by rule.
13 (b) A person shall not advertise, market, or offer for sale in this
14 state any hemp-derived product by using, in the labeling or design of the
15 product, its packaging, or in its advertising or marketing materials, trade
16 dress, trademarks, branding, or other related imagery that:
17 (1) Imitates or replicates those of food brands or other related
18 products that are marketed to or are commonly associated with children or
19 minors, including without limitation breakfast cereal, cookies, juice drinks,
20 frozen drinks, ice creams, sorbets, sherbets, and frozen pops;
21 (2) Depicts or signifies characters or symbols that are known to
22 a reasonable person to appeal primarily to or are commonly associated with
23 children or minors, including without limitation superheroes, cartoons or
24 cartoon characters, including anime characters, comic book characters, video
25 game characters, television show characters, movie characters, mythical
26 creatures, unicorns, or that otherwise incorporates related imagery or
27 scenery; or
28 (3) Uses the terms "candy", "candies", "cake"," "cakes", "pies",
29 or "cupcakes" or any variant of these terms, or any other term referencing a
30 type or brand of candy, cakes, pastries, or pies, including types or brands
31 of candy, cakes, pastries, or pies that do not include the words "candy",
32 "candies", "cake", "cakes", "pies", or "cupcakes" in their names, labels, or
33 slogans.
34
35 20-56-512. Testing.
36 (a) All hemp-derived products sold in this state shall be tested by an
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1 approved laboratory.
2 (b) An approved laboratory shall be an independent third-party
3 laboratory.
4 (c) A hemp-derived product sold in this state shall be tested for the
5 following and marked as to the hemp-derived product chemical makeup before
6 being sold to consumers:
7 (1) Cannabinoid profile;
8 (2) Solvents;
9 (3) Pesticides;
10 (4) Microbials;
11 (5) Heavy metals; and
12 (6) Foreign matter.
13 (d) A hemp-derived product shall not be distributed or sold in this
14 state without a certificate of analysis from an approved laboratory that
15 confirms:
16 (1) The hemp-derived product was tested by an approved
17 laboratory;
18 (2) A tested representative sample of the hemp-derived product
19 contained a total tetrahydrocannabinol concentration that did not exceed
20 three-tenths percent (0.3%) under this subchapter; and
21 (3) A detailed analysis and list of the chemical makeup of the
22 tested hemp-derived product under subsection (c) of this section.
23 (e) Arkansas Tobacco Control may periodically sample, analyze, and
24 test any hemp-derived product located in this state.
25 (f) The Director of Arkansas Tobacco Control may:
26 (1) Investigate and issue subpoenas to any permittee or approved
27 laboratory used by a permittee that the director has reasonable suspicion of
28 intentionally producing falsified test results on hemp-derived products; and
29 (2) Promulgate rules for the enforcement of this section and set
30 penalties for any violation of the rules.
31
32 20-56-513. Providing minors with hemp-derived products -- Purchase,
33 use, or possession prohibited.
34 (a)(1) It is unlawful for a person to give, barter, or sell to a minor
35 a hemp-derived product.
36 (2) Except as provided in subdivision (a)(3) of this section, a
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1 person who pleads guilty or nolo contendere to or is found guilty of
2 violating subdivision (a)(1) of this section is guilty of a Class A
3 misdemeanor.
4 (3) An employee or owner of a retail location permitted under
5 this subchapter who violates subdivision (a)(1) of this section while inside
6 the retail location upon conviction is subject to a fine not to exceed one
7 hundred dollars ($100) per violation.
8 (b)(1) It is unlawful for a minor to:
9 (A) Use or possess or to purchase or attempt to purchase a
10 hemp-derived product; or
11 (B) For the purpose of obtaining or attempting to obtain a
12 hemp-derived product, falsely represent himself or herself not to be a minor
13 by displaying proof of age that is false, fraudulent, or not actually proof
14 of the minor's age.
15 (2) Any hemp-derived product found in the possession of a minor
16 may be confiscated and destroyed by a law enforcement officer.
17 (c)(1) It is not an offense under subsection (b) of this section if:
18 (A) The minor was acting at the direction of an authorized
19 agent of Arkansas Tobacco Control to enforce or ensure compliance with laws
20 relating to the prohibition of the sale of hemp-derived product to minors;
21 (B) The minor was acting at the direction of an authorized
22 agent of the Division of Aging, Adult, and Behavioral Health Services of the
23 Department of Human Services to compile statistical data relating to the sale
24 of hemp-derived products to minors;
25 (C) The minor was acting at the request of a permit holder
26 to assist the permit holder by performing a check on the permit holder's own
27 retail business to see if the permit holder's employees would sell hemp-
28 derived products to the minor; or
29 (D) The minor was acting as an agent of a retail permit
30 holder within the scope of employment.
31 (2) A minor performing activities under subdivision (c)(1) of
32 this section shall:
33 (A) Display the appearance of a minor;
34 (B) Have the written consent of the minor's parent or
35 guardian to perform the activity on file with the agency utilizing the minor;
36 and
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1 (C)(i) Present a true and correct identification if asked.
2 (ii) Any failure on the part of a minor to provide
3 true and correct identification upon request is a defense to any action under
4 this section or a civil action under � 26-57-256.
5 (d) A person who sells hemp-derived products has the right to deny the
6 sale of a hemp-derived product to a person.
7 (e) It is unlawful for a person who has been issued a permit or a
8 license under this subchapter to fail to display in a conspicuous place a
9 sign indicating that the sale of hemp-derived products to or purchase or
10 possession of hemp-derived products by a minor is prohibited by law.
11 (f) It is unlawful for a manufacturer whose hemp-derived product is
12 distributed in this state and any person who has been issued a permit or
13 license under this subchapter to distribute a free sample of a hemp-derived
14 product, or any component of a hemp-derived product or coupon that entitles
15 the holder of the coupon to a free sample of any hemp-derived product, or any
16 component of a hemp-derived product:
17 (1) In or on any public street or sidewalk within five hundred
18 feet (500') of a playground, public school, or other facility when the
19 playground, public school, or other facility is being used primarily by
20 minors for recreational, educational, or other purposes; or
21 (2) To a minor.
22 (g) It is unlawful for a person that has been issued a permit or
23 license under this subchapter to:
24 (1) Sell or distribute a hemp-derived product through a self-
25 service display, a vending machine, or an order executed solely over the
26 internet or similar means; or
27 (2) Advertise or promote hemp-derived products in a manner that
28 is intended to appeal to children.
29 (h) A retail permit holder or license holder who violates a provision
30 in this section is subject to penalties under � 26-57-256.
31 (i)(1) A notice of an alleged violation of this section shall be given
32 to the holder of a retail permit or license or an agent of the holder within
33 ten (10) days of the alleged violation.
34 (2)(A) The notice under subdivision (i)(1) of this section shall
35 contain the date and time of the alleged violation.
36 (B)(i) The notice under subdivision (i)(1) of this section
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1 shall also include either the name of the person making the alleged sale or
2 information reasonably necessary to determine the location in the store that
3 allegedly made the sale.
4 (ii) When appropriate, information under subdivision
5 (i)(2)(B)(i) of this section should include without limitation the:
6 (a) Cash register number of the sale in the
7 store;
8 (b) Physical location of the sale in the
9 store; and
10 (c) If possible, the lane or aisle number of
11 the sale in the store.
12 (j) Notwithstanding the provisions of subsection (h) of this section,
13 when reviewing for a possible violation, a court shall consider whether:
14 (1) The business has adopted and enforced a written policy
15 against selling hemp-derived products to minors;
16 (2) The business has informed its employees of the applicable
17 laws regarding the sale of hemp-derived products to minors;
18 (3) The business has required employees to verify the age of a
19 customer attempting to purchase a hemp-derived product by way of photographic
20 identification;
21 (4) The business has established and imposed disciplinary
22 sanctions for noncompliance; and
23 (5) The appearance of the purchaser of the hemp-derived product
24 was such that an ordinary prudent person would believe him or her to be of
25 legal age to make the purchase.
26 (k) A person convicted of violating a provision of this section whose
27 permit or license to distribute or sell a hemp-derived product is suspended
28 or revoked upon conviction shall surrender to the court any permit or license
29 to distribute or sell a hemp-derived product, and the court shall transmit
30 the permit or license to distribute or sell a hemp-derived product to the
31 Director of Arkansas Tobacco Control:
32 (1) To suspend or revoke the person's permit or license to
33 distribute or sell a hemp-derived product and to not renew the permit or
34 license; and
35 (2) Not to issue a new permit or license to that person for the
36 period of time determined by the court in accordance with this section.
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1
2 20-56-514. Penalties.
3 (a) A person within the jurisdiction of this state who is not
4 permitted to sell, deliver, or cause to be delivered hemp-derived products to
5 retailers or consumers and who sells, takes orders from, delivers, or causes
6 to be delivered immediately or in the future a hemp-derived products to
7 retailers or consumers, is guilty of a Class A misdemeanor.
8 (b) A person engaged in buying, selling, or otherwise doing business
9 in hemp-derived products in this state without first obtaining the proper
10 permit upon conviction is guilty of a Class A misdemeanor.
11
12 20-56-515. Purchases from unregistered, unpermitted dealers unlawful.
13 (a) It is unlawful for a retailer of hemp-derived products to purchase
14 hemp-derived products from a person other than a permitted manufacturer,
15 permitted wholesaler, or other permitted retailer.
16 (b) A retailer violating this subchapter upon conviction is guilty of
17 a Class A misdemeanor for each purchase defined in subsection (a) of this
18 section.
19
20 20-56-516. Failure to allow inspection unlawful.
21 A person who is required to pay taxes or obtain a permit under this
22 subchapter who fails or refuses to allow the Department of Finance and
23 Administration or Arkansas Tobacco Control to examine or inspect the person's
24 inventory of hemp-derived products, invoice books, papers, and memoranda
25 considered necessary to secure information directly relating to the
26 enforcement of this subchapter upon conviction is guilty of a Class A
27 misdemeanor and may have his or her permit immediately suspended by the
28 Director of Arkansas Tobacco Control, subject to a hearing before the
29 Arkansas Tobacco Control Board at the next regularly scheduled board meeting.
30
31 20-56-517. Wholesalers -- Restrictions -- Criminal violations.
32 A wholesaler shall conduct the wholesaler's business subject to the
33 following restrictions:
34 (1) The wholesaler shall secure a permit from Arkansas Tobacco
35 Control; and
36 (2) Except as otherwise provided in this subchapter, a
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1 wholesaler may sell hemp-derived products only to persons properly permitted
2 under this subchapter.
3
4 20-56-518. Civil and criminal actions.
5 (a) All civil actions arising under this subchapter shall be brought
6 by and in the name of the Secretary of the Department of Finance and
7 Administration or the Director of Arkansas Tobacco Control, whichever is
8 appropriate under the provisions of this subchapter.
9 (b) All criminal actions shall be brought and prosecuted by the
10 prosecuting attorney of the county where the criminal action occurred.
11
12 20-56-519. No bond for costs required.
13 A bond for costs is not required of the Department of Finance and
14 Administration, Arkansas Tobacco Control, or the Arkansas Tobacco Control
15 Board in any court in this state for the prosecution of a violation of this
16 subchapter.
17
18 20-56-520. Criminal actions -- Appeals.
19 (a) In all prosecutions in the district courts, this state shall have
20 the same right of appeal to the circuit courts of this state and upon the
21 same terms as the defendant now has under the law in misdemeanor cases.
22 (b) When appealed, the cases shall be tried de novo by the circuit
23 court.
24
25 20-56-521. Employer protection.
26 (a) A cause of action shall not be established against an employer
27 based upon, and an employer is not prohibited from, any of the following
28 actions:
29 (1) Establishing and implementing a substance abuse or drug-free
30 workplace policy that may include a drug testing program that complies with
31 state or federal law and taking action with respect to an applicant or
32 employee under the policy;
33 (2) Acting on the employer's good faith belief that an employee:
34 (A) Possessed, smoked, ingested, or otherwise engaged in
35 the use of hemp-derived products while on the premises of the employer or
36 during the hours of employment; or
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1 (B) Was under the influence of hemp-derived products while
2 on the premises of the employer or during the hours of employment, provided
3 that a positive test result for hemp-derived product cannot provide the sole
4 basis for the employer's good faith belief; or
5 (3) Acting to exclude an employee from being employed in or
6 performing a safety sensitive position based on the employer's good faith
7 belief that the employee was engaged in the current use of a hemp-derived
8 product.
9 (b) The authorized or protected actions of an employer under this
10 section include without limitation:
11 (1) Implementing, monitoring, or taking measures to assess,
12 supervise, or control the job performance of an employee;
13 (2) Reassigning an employee to a different position or job
14 duties;
15 (3) Placing an employee on paid or unpaid leave;
16 (4) Suspending or terminating an employee;
17 (5) Requiring an employee to successfully complete a substance
18 abuse program before returning to work;
19 (6) Refusing to hire an applicant; or
20 (7) Any combination of the actions listed in subdivisions (b)(1)
21 -- (b)(6) of this section.
22 (c) This section does not waive the sovereign immunity of this state.
23
24 20-56-522. Enforcement -- Penalties.
25 (a) It is the duty of all state, county, and city officers to assist
26 Arkansas Tobacco Control in enforcing this subchapter.
27 (b) A person within the jurisdiction of this state who is not
28 permitted to sell, deliver, or cause to be delivered hemp-derived products to
29 retailers or consumers and who sells, takes orders from, delivers, or causes
30 to be delivered immediately or in the future any hemp-derived products to
31 retailers or consumers, is guilty of a Class A misdemeanor.
32 (c) A person engaged in buying, selling, or otherwise doing business
33 in hemp-derived products in this state without first obtaining the proper
34 permit upon conviction is guilty of a Class A misdemeanor.
35
36 20-56-523. Rules.
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1 The Director of Arkansas Tobacco Control and Arkansas Tobacco Control
2 may promulgate rules for the proper enforcement of their powers and duties
3 under this subchapter, including without limitation the regulation of
4 processing, transportation, delivery, sale, and purchase of hemp-derived
5 products in accordance with this subchapter and the power to levy penalties
6 for violations of this subchapter.
7
8 SECTION 7. Arkansas Code Title 20, Chapter 56, Subchapter 4, as
9 amended by Acts 2025, No. 176, � 2, effective if the contingency in Acts
10 2023, No. 629, � 17, is met, is repealed.
11 Subchapter 4 -- Hemp-Derived Products
12
13 20-56-401. Purpose.
14 It is the intent of this subchapter to provide regulation of certain
15 hemp-derived products to:
16 (1) Prevent the sale and use of illicit hemp-based products
17 within Arkansas; and
18 (2) Protect and promote the public health and welfare of the
19 residents of this state.
20
21 20-56-402. Definitions.
22 As used in this subchapter:
23 (1) "Annual" or "annually" means the fiscal year from July 1
24 through the next June 30;
25 (2) "Approved laboratory" means a laboratory that is accredited
26 by the National Institute on Drug Abuse, the National Environmental
27 Laboratory Accreditation Conference, the International Organization for
28 Standardization, or a similar accrediting entity as determined by Arkansas
29 Tobacco Control and that has been approved by the Director of Arkansas
30 Tobacco Control specifically for the testing of hemp-derived product;
31 (3) "Consumer" means a member of the public at large;
32 (4) "Days" means calendar days unless otherwise specified;
33 (5) "Finished product" means a product intended for consumer use
34 to be sold at retail;
35 (6) "Hemp" means the plant Cannabis sativa and any part of the
36 plant, including the seeds of the plant, that contains a delta-9
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1 tetrahydrocannabinol concentration of three-tenths of one percent (0.3%) or
2 less on a dry-weight basis, and all derivatives, extracts, cannabinoids,
3 isomers, acids, salts, and salts of isomers, whether growing or not;
4 (7) "Hemp-derived e-liquid product" means a liquid hemp-derived
5 product that contains hemp that is inhaled when using a vapor product, and
6 that may or may not include without limitation propylene glycol, vegetable
7 glycerin, and flavorings;
8 (8)(A) "Hemp-derived product" means a product intended for any
9 form of human consumption, including consumption by vapor inhalation, or a
10 component of a product, that is derived from hemp, including all derivatives,
11 extracts, cannabinoids, isomers, acids, salts, and salts of isomers, and any
12 product made from such derivatives, and that contains greater than three-
13 tenths of one percent (0.3%) tetrahydrocannabinol.
14 (B) "Hemp-derived product" includes a hemp-derived e-
15 liquid product and a vapor product.
16 (C) "Hemp-derived product" does not include:
17 (i) A product intended for animal consumption or
18 use;
19 (ii) A cosmetic as defined by � 20-56-202;
20 (iii) Any marijuana, medical marijuana, or other
21 cannabis product containing delta-9 tetrahydrocannabinol greater than three-
22 tenths of one percent (0.3%) on a dry-weight basis as administered, licensed,
23 and otherwise regulated by the Alcoholic Beverage Control Division, the
24 Medical Marijuana Commission, and the Department of Health under the Arkansas
25 Medical Marijuana Amendment of 2016, Arkansas Constitution, Amendment 98;
26 (iv) A raw hemp product, including any intact plant,
27 flower, buds, leaves, or stems;
28 (v) A drug in the form for which an application
29 filed in accordance with 21 U.S.C. � 355 is approved by the United States
30 Food and Drug Administration;
31 (vi) A dietary supplement as defined by the Federal
32 Food, Drug, and Cosmetic Act, 21 U.S.C. � 301 et seq.; or
33 (vii) A fabric, textile, cordage, fiber, fuel, paper,
34 construction material, plastic, seed, seed meal, and seed oil;
35 (9)(A) "Manufacturer" means a person that manufactures,
36 fabricates, assembles, or processes a hemp-derived product, including without
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1 limitation federally licensed importers and federally licensed distributors
2 that deal in hemp-derived products.
3 (B) "Manufacturer" includes:
4 (i) A sales entity affiliate of the manufacturer or
5 any other entity representing the manufacturer with regard to the sale of
6 hemp-derived products produced by the manufacturer to wholesalers or
7 permitted retailers; and
8 (ii) A person that mixes, compounds, extracts,
9 infuses, blends, processes, repackages, or resizes hemp-derived products
10 including the extraction of cannabinoids from hemp biomass.
11 (C) "Manufacturer" does not include a person who engages
12 in the agricultural production of hemp, such as growing, planting, and
13 harvesting of raw hemp biomass regulated by the State Plant Board;
14 (10) "Minor" means a person who is under twenty-one (21) years of
15 age;
16 (11) "Person" means an individual, retailer, wholesaler,
17 manufacturer, firm, association, company, partnership, limited liability
18 company, corporation, joint-stock company, club, agency, syndicate, the State
19 of Arkansas, county, municipal corporation or other political subdivision of
20 the state, receiver, trustee, fiduciary, or trade association;
21 (12) "Place of business" means the physical location:
22 (A) Where orders for hemp-derived products are taken or
23 received or where hemp-derived products are sold; and
24 (B) That is on file with Arkansas Tobacco Control;
25 (13) "Retailer" means a person that purchases hemp-derived
26 products from permitted wholesalers for the purpose of selling the hemp-
27 derived products in person and over the counter at retail to consumers;
28 (14)(A) "Sale" or "sell" means a transfer, exchange, or
29 barter in any manner or by any means for any consideration, including
30 distributing or shipping hemp-derived product in connection with a sale.
31 (B) A sale "in" or "into" a state refers to the state in
32 which the destination point of the hemp-derived product is located in the
33 sale without regard to where title was transferred.
34 (C) A sale "from" a state refers to the sale of a hemp-
35 derived product that is located in that state to the destination in question
36 without regard to where title was transferred;
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1 (15) "Self-service display" means a display:
2 (A) That contains a hemp-derived product, or any component
3 of a hemp-derived product;
4 (B) That is located in an area where customers are
5 permitted; and
6 (C) In which the hemp-derived product, or any component of
7 a hemp-derived product, is readily accessible to a customer without the
8 assistance of a salesperson;
9 (16) "Tetrahydrocannabinol" means a compound that is the natural,
10 primary active cannabinoid substance or its equivalent contained in the plant
11 of the genus cannabis or in the resinous extracts of the plant, including
12 derivatives or isomers derived from such cannabinoids;
13 (17) "Vapor product" means hemp-derived product that is an
14 electronic oral device of any size or shape that contains a vapor of hemp or
15 hemp-derived e-liquid product that when used or inhaled simulates smoking,
16 regardless of whether a visible vapor is produced, including without
17 limitation a device that:
18 (A) Is composed of a heating element, battery, electronic
19 circuit, chemical process, mechanical device, or a combination of heating
20 element, battery, electronic circuit, chemical process, or mechanical device;
21 (B) Works in combination with a cartridge, other
22 container, or liquid delivery device containing hemp or hemp-derived e-liquid
23 product and manufactured for use with vapor products;
24 (C) Is manufactured, distributed, marketed, or sold as any
25 type or derivation of a vapor product, e-cigarette, e-cigar, e-pipe, or any
26 other produced name or descriptor; and
27 (D) Does not include a product regulated as a drug or
28 device by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. � 301 et seq.,
29 as it existed on January 1, 2015;
30 (18) "Warehouse" means a place where hemp-derived products are
31 stored for another person and to or from which place the hemp-derived
32 products are shipped or delivered upon order by the owner of the hemp-derived
33 products, to the warehouse; and
34 (19) "Wholesaler" means a person other than a manufacturer or a
35 person owned or operated by a manufacturer that:
36 (A) Does business within the state;
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1 (B) Purchases hemp-derived products from any source;
2 (C) Distributes or sells the hemp-derived products to
3 other wholesalers, or retailers; and
4 (D) Does not distribute or sell the hemp-derived products
5 at retail to consumers.
6
7 20-56-403. Construction.
8 (a) A hemp-derived product shall not be delivered, sold, bought, or
9 used in this state except in conformity with all applicable laws and
10 regulations, including this subchapter and any rules promulgated under this
11 subchapter.
12 (b) A person shall not sell a hemp-derived product without being
13 permitted by Arkansas Tobacco Control.
14 (c) A product intended for human consumption or inhalation that is
15 derived from hemp and contains tetrahydrocannabinol shall not be permitted or
16 allowed under the laws of this state, other than hemp-derived products if
17 otherwise legal under state law.
18 (d)(1) A hemp-derived product shall not be combined with or contain
19 any of the following:
20 (A) Any liquid, hydrocolloid, animal-based substance,
21 thickener, sweetener, flavoring, synthetic product, propylene glycol,
22 vegetable glycerin, or other non-hemp-derived substance;
23 (B) Nicotine or tobacco; or
24 (C) Any amount of tetrahydrocannabinol as to create a
25 danger of misuse, overdose, accidental overconsumption, inaccurate dosage, or
26 other risk to the public.
27 (2) Medical devices, prescription drugs, or drugs otherwise
28 approved by the United States Food and Drug Administration shall not be
29 considered hemp-derived products.
30 (e) The business of handling, receiving, possessing, storing,
31 distributing, taking orders for, soliciting orders of, selling, offering for
32 sale, and dealing in, through sale, barter, or exchange, hemp-derived
33 products is declared to be a privilege under the Arkansas Constitution and
34 laws of the State of Arkansas.
35
36 20-56-404. Permits.
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1 (a)(1) Each person listed in this section, before commencing business,
2 or if already in business, before continuing business, shall pay an annual
3 privilege fee and secure a permit from the Director of Arkansas Tobacco
4 Control.
5 (2) A person purchasing an existing permitted retail location
6 may, with the permission of the seller and Arkansas Tobacco Control, operate
7 under the selling owner's permit for no more than thirty (30) days from the
8 date of the sale.
9 (b)(1) In addition to securing a permit under subsection (a) of this
10 section, a manufacturer whose products are sold in this state shall register
11 with the Secretary of the Department of Finance and Administration.
12 (2) A wholesaler of hemp-derived products shall secure the
13 proper wholesale permit.
14 (3) Every retailer of hemp-derived products that operates a
15 place of business shall secure the proper retail permit.
16 (c)(1) Permits shall be issued as follows:
17 (A) A permit for a sole proprietorship is issued in the
18 owner's name and in the fictitious business name, if any;
19 (B)(i) A permit for a partnership or limited liability
20 company is issued in the name of:
21 (a) The managing partner or managing member;
22 and
23 (b) The partnership or limited liability
24 company.
25 (ii) If the managing partner or managing member of a
26 limited liability company is a partnership, limited liability company, or
27 corporation, then the permit shall be issued in the name of:
28 (a) The president or chief executive officer;
29 and
30 (b) The partnership or limited liability
31 company; and
32 (C) A permit for a publicly traded or nonpublicly traded
33 corporation is issued in the name of the president or chief executive officer
34 of the corporation and in the name of the corporation.
35 (2) It is a violation for a permitted entity not to provide
36 written notification to the director within thirty (30) days of a change in
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1 the following:
2 (A) The managing partner, limited liability company
3 managing member, or president or chief executive officer of a corporation,
4 partnership, or limited liability company; or
5 (B) The stockholders effecting twenty-five percent (25%)
6 or more of the total voting shares of a nonpublicly traded corporation.
7 (d)(1) When an entity transfers a business permitted under this
8 subchapter, the entity to which the business is transferred:
9 (A) Shall apply for a new permit under this subchapter;
10 (B) May be issued a new permit under this subchapter; and
11 (C) May operate under the selling entity's permit for no
12 more than thirty (30) days from the date of the sale.
13 (2) When a partnership or limited liability company permitted
14 under this subchapter changes, removes, or replaces the managing partner,
15 managing member, president, or chief executive officer:
16 (A) The existing permit issued under this subchapter is
17 void; and
18 (B) The partnership or limited liability company:
19 (i) Shall apply for a new permit under this
20 subchapter;
21 (ii) May be issued a new permit under this
22 subchapter; and
23 (iii) May operate under the voided permit for no more
24 than thirty (30) days from the date of the change, removal, or replacement of
25 the managing partner, managing member, president, or chief executive officer.
26 (3) When a nonpublicly traded corporation permitted under this
27 subchapter changes, removes, or replaces the president or chief executive
28 officer named on the permit or changes, removes, or replaces a stockholder
29 who owns fifty percent (50%) or more of the total voting shares of the
30 nonpublicly traded corporation's stock:
31 (A) The permit issued under this subchapter is void; and
32 (B) The nonpublicly traded corporation:
33 (i) Shall apply for a new permit under this
34 subchapter;
35 (ii) May be issued a new permit under this
36 subchapter; and
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1 (iii) May operate under the voided permit for no more
2 than thirty (30) days from the date of the change, removal, or replacement of
3 the president, chief executive officer, or stockholder.
4 (4) When a publicly traded corporation permitted under this
5 subchapter changes, removes, or replaces the president or chief executive
6 officer named on the permit or changes, removes, or replaces a stockholder
7 who owns fifty percent (50%) or more of the total voting shares of the
8 publicly traded corporation's stock:
9 (A) The permit issued under this subchapter is void; and
10 (B) The publicly traded corporation:
11 (i) Shall apply for a new permit under this
12 subchapter;
13 (ii) May be issued a new permit under this
14 subchapter; and
15 (iii) May operate under the voided permit for no more
16 than thirty (30) days from the date of the change, removal, or replacement of
17 the president, chief executive officer, or stockholder.
18 (e) An entity may apply for and be issued a permit under this
19 subchapter in advance of the effective date of the permit to facilitate
20 continuity of business operations.
21
22 20-56-405. Permits -- Location -- Background check required.
23 (a) A retail, wholesale, or manufacturer permit shall not be issued to
24 a residential address, a mobile structure or vehicle, or for an address not
25 zoned appropriately for the business seeking to secure the permit.
26 (b) A permit shall not be issued to:
27 (1) A person who has pleaded guilty or nolo contendere to or
28 been found guilty of a felony; or
29 (2) A business owned or operated, in whole or in part, by a
30 person who has pleaded guilty or nolo contendere to or been found guilty of a
31 felony.
32 (c) Arkansas Tobacco Control shall conduct a criminal background check
33 on each permit applicant and application, utilizing its Arkansas Crime
34 Information Center access as a law enforcement agency, in accordance with ��
35 12-12-1008 -- 12-12-1011.
36
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1 20-56-406. Permits -- Annual privilege fees.
2 (a) The annual privilege fee for each permit authorized by this
3 subchapter is established as follows:
4 (1) Wholesale Hemp-derived Products Permit.............$5,000
5 (2) Retail Hemp-derived Products Permit.............$5,000
6 (3) Manufacturer Hemp-derived Products Permit.............$5,000
7 (b)(1) All permits issued under this subchapter shall expire on June
8 30 following the effective date of issuance.
9 (2)(A) Upon the failure to timely renew a permit issued under
10 this subchapter, a late fee of two (2) times the amount of the appropriate
11 permit fee shall be owed in addition to the annual privilege fee for the
12 permit.
13 (B) An expired permit that is not renewed before September
14 1 following the expiration of the permit shall not be renewed, and the holder
15 of the expired permit shall submit an application for a new permit.
16 (3) A permit shall not be issued to the applicant until the late
17 fee and the permit fee have been paid.
18 (c) A permit issued under this subchapter shall not be renewed for a
19 permit holder who is delinquent more than ninety (90) days on a privilege
20 fee, tax relating to the sale or dispensing of hemp-derived products, or any
21 other state and local tax due to the Secretary of the Department of Finance
22 and Administration.
23 (d) A person who is delinquent more than ninety (90) days on a state
24 or local tax may not renew or obtain a permit issued under this subchapter
25 except upon certification that the permit holder has entered into a repayment
26 agreement with the Department of Finance and Administration and is current on
27 the payments.
28 (e) A permit holder who has unpaid fees, civil penalties, or an
29 unserved permit suspension may not transfer, sell, or give hemp-derived
30 product inventory of the business associated with the permit to a third party
31 until all fees and civil penalties are paid in full and all suspensions are
32 completed successfully, nor shall any third party be issued a new permit for
33 the business location.
34 (f) Each manufacturer, wholesaler, and retailer shall retain copies of
35 all invoices for the purchase or sale of any hemp-derived products for a
36 period of at least ten (10) years subject to examination by the Secretary of
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1 the Department of Finance and Administration and the Director of Arkansas
2 Tobacco Control or their authorized agents upon demand at any time during
3 regular business hours.
4 (g) A retailer shall:
5 (1) Maintain copies of at least the last three hundred sixty-
6 five (365) days of hemp-derived product invoices, which the retailer shall
7 provide immediately upon demand;
8 (2)(A) Make the invoices that are older than three hundred
9 sixty-five (365) days available upon demand at any time during normal
10 business hours in the retail store.
11 (B) Except as provided in subdivision (g)(2)(C) of this
12 section, an agent of Arkansas Tobacco Control may determine a reasonable time
13 frame for which invoices are to be provided under subdivision (g)(2)(A) of
14 this section.
15 (C) An invoice that is provided seventy-two (72) hours or
16 more after the demand shall not be considered for purposes of determining a
17 violation of this subsection;
18 (3) Retain invoices for all hemp-derived products in the retail
19 store even if the invoice for the hemp-derived products is older than three
20 (3) years;
21 (4) Maintain a copy of the signed server awareness forms for
22 each employee of the retailer who engages in the sale of hemp-derived
23 products, which the retailer shall provide immediately upon demand;
24 (5)(A) Maintain a copy of any complete transfer forms showing:
25 (i) The hemp-derived products that were transferred;
26 (ii) The permitted location from which the hemp-
27 derived products were transferred; and
28 (iii) When the transfer occurred.
29 (B) A transfer form shall be completed contemporaneously
30 with the transfer and shall be provided immediately by the retailer upon
31 demand; and
32 (6) If any inventory was submitted with a permit application,
33 maintain a copy of the submitted inventory form, which the retailer shall
34 provide immediately upon demand.
35 (h) A wholesaler and manufacturer shall:
36 (1) Maintain ten (10) years of hemp-derived product invoices
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1 that are available upon demand during normal business hours in the permitted
2 location; and
3 (2) Permit Arkansas Tobacco Control and authorized personnel of
4 Arkansas Tobacco Control to enter into and inspect stock of hemp-derived
5 products, and any documents and records relating to receipts and
6 disbursements of hemp-derived products.
7 (i) An invoice from a wholesaler to a retailer shall contain the name
8 or other identifying information of the wholesaler and the retailer.
9 (j)(1) A nonresident wholesaler shall also keep a record of all hemp-
10 derived products purchased for distribution within this state.
11 (2) All books, records, and memoranda pertaining to the purchase
12 and sale of the hemp-derived products under subdivision (j)(1) of this
13 section shall be subject to inspection by Arkansas Tobacco Control.
14 (k) Authorized personnel of Arkansas Tobacco Control shall not release
15 to the Arkansas Tobacco Control Board or to the public any information
16 identifying customers of the manufacturer, wholesaler, or warehouse except
17 when necessary to notify the board of alleged violations of this subchapter.
18
19 20-56-407. Permits -- Not transferable -- Duplicates.
20 (a) A permit under this subchapter is not:
21 (1) Transferable to a subsequent owner or operator; or
22 (2) Transferable to a different physical location unless the
23 permit holder obtains permission from the Director of Arkansas Tobacco
24 Control.
25 (b) A person purchasing an existing permitted retail location may
26 operate under the selling owner's permit for no more than thirty (30) days
27 from the date of the sale.
28 (c) When a permit is lost by a permit holder, a duplicate permit may
29 be issued upon application and for a fee of five dollars ($5.00) when
30 sufficient proof has been given to the Director of Arkansas Tobacco Control.
31
32 20-56-408. Permits -- Suspension or revocation.
33 (a) All permits issued under this subchapter shall be suspended or
34 revoked by the Director of Arkansas Tobacco Control for any violation of this
35 subchapter or the rules pertaining to this subchapter, subject to a hearing
36 before the Arkansas Tobacco Control Board at the next regularly scheduled
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1 board meeting.
2 (b) The director may revoke all permits to deal in hemp-derived
3 products associated with any person who is convicted of or pleads guilty or
4 nolo contendere to criminally violating this subchapter, subject to a hearing
5 before the board at the next regularly scheduled board meeting.
6
7 20-56-409. Advertising prohibitions and packaging requirements.
8 (a) A hemp-derived product distributed or offered for sale in this
9 state shall include the following information on the product label or product
10 packaging:
11 (1) The name of the hemp-derived product manufacturer, whether
12 in-state or out-of-state, and distributor, whether in-state or out-of-state;
13 (2) Product labeling clearly showing that the product contains
14 material derived from hemp and not marijuana or medical marijuana; and
15 (3) Any other marking, words, statement, or symbol as required
16 by Arkansas Tobacco Control through rules.
17 (b) A person shall not advertise, market, or offer for sale in this
18 state any hemp-derived product by using, in the labeling or design of the
19 product, its packaging, or in its advertising or marketing materials, trade
20 dress, trademarks, branding, or other related imagery that:
21 (1) Imitates or replicates those of food brands or other related
22 products that are marketed to or are commonly associated with children or
23 minors, including without limitation breakfast cereal, cookies, juice drinks,
24 soft drinks, frozen drinks, ice creams, sorbets, sherbets, and frozen pops;
25 (2) Depicts or signifies characters or symbols that are known to
26 a reasonable person to appeal primarily to or are commonly associated with
27 children or minors, including without limitation superheroes, cartoons or
28 cartoon characters, including anime characters, comic book characters, video
29 game characters, television show characters, movie characters, mythical
30 creatures, unicorns, or that otherwise incorporates related imagery or
31 scenery; or
32 (3) Uses the terms "candy", "candies", "cake", "cakes", "pies",
33 or "cupcakes" or any variant of these terms, or any other term referencing a
34 type or brand of candy, cakes, pastries, or pies, including types or brands
35 of candy, cakes, pastries, or pies that do not include the words "candy",
36 "candies", "cake", "cakes", "pies", or "cupcakes" in their names, labels, or
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1 slogans.
2
3 20-56-410. Testing.
4 (a) All hemp-derived products sold in this state shall be tested by an
5 approved laboratory.
6 (b) An approved laboratory shall be an independent third-party
7 laboratory.
8 (c) A hemp-derived product sold in this state shall be tested for the
9 following and marked as to the hemp-derived product chemical makeup before
10 being sold to consumers:
11 (1) Cannabinoid profile;
12 (2) Solvents;
13 (3) Pesticides;
14 (4) Microbials;
15 (5) Heavy metals; and
16 (6) Any non-hemp-based substance.
17 (d) A hemp-derived product shall not be distributed or sold in this
18 state without a certificate of analysis from an approved laboratory that
19 confirms:
20 (1) The hemp-derived product was tested by an approved
21 laboratory;
22 (2) A tested representative sample of the hemp-derived product
23 contained a total delta-9 tetrahydrocannabinol concentration that did not
24 exceed three-tenths of one percent (0.3%) under this subchapter; and
25 (3) A detailed analysis and list of chemical makeup of the
26 tested hemp-derived product under subsection (c) of this section.
27 (e) Arkansas Tobacco Control may periodically sample, analyze, and
28 test any hemp-derived product located in this state.
29 (f) The Director of Arkansas Tobacco Control shall:
30 (1) Investigate and issue subpoenas to any permittee or approved
31 laboratory used by a permittee that the director has reasonable suspicion of
32 intentionally producing falsified test results on hemp-derived products; and
33 (2) Promulgate rules for the enforcement of this section and set
34 penalties for any violation of the rules.
35
36 20-56-411. Providing minors with hemp-derived products -- Purchase,
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1 use, or possession prohibited.
2 (a)(1) It is unlawful for any person to give, barter, or sell to a
3 minor a hemp-derived product.
4 (2) Except as provided in subdivision (a)(3) of this section, a
5 person who pleads guilty or nolo contendere to or is found guilty of
6 violating subdivision (a)(1) of this section is guilty of a Class A
7 misdemeanor.
8 (3) An employee or owner of a retail location permitted under
9 this subchapter who violates subdivision (a)(1) of this section while inside
10 the retail location upon conviction is subject to a fine not to exceed one
11 hundred dollars ($100) per violation.
12 (b)(1) It is unlawful for a minor to:
13 (A) Use or possess or to purchase or attempt to purchase a
14 hemp-derived product; or
15 (B) For the purpose of obtaining or attempting to obtain a
16 hemp-derived product, falsely represent himself or herself not to be a minor
17 by displaying proof of age that is false, fraudulent, or not actually proof
18 of the minor's age.
19 (2) Any hemp-derived product found in the possession of a minor
20 may be confiscated and destroyed by a law enforcement officer.
21 (c)(1) It is not an offense under subsection (b) of this section if:
22 (A) The minor was acting at the direction of an authorized
23 agent of Arkansas Tobacco Control to enforce or ensure compliance with laws
24 relating to the prohibition of the sale of hemp-derived product to minors;
25 (B) The minor was acting at the direction of an authorized
26 agent of the Division of Aging, Adult, and Behavioral Health Services of the
27 Department of Human Services to compile statistical data relating to the sale
28 of hemp-derived products to minors;
29 (C) The minor was acting at the request of a permit holder
30 to assist the permit holder by performing a check on the permit holder's own
31 retail business to see if the permit holder's employees would sell hemp-
32 derived products to the minor; or
33 (D) The minor was acting as an agent of a retail permit
34 holder within the scope of employment.
35 (2) A minor performing activities under subdivision (c)(1) of
36 this section shall:
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1 (A) Display the appearance of a minor;
2 (B) Have the written consent of the minor's parent or
3 guardian to perform the activity on file with the agency utilizing the minor;
4 and
5 (C)(i) Present a true and correct identification if asked.
6 (ii) Any failure on the part of a minor to provide
7 true and correct identification upon request is a defense to any action under
8 this section or a civil action under � 26-57-256.
9 (d) Any person who sells hemp-derived products has the right to deny
10 the sale of any hemp-derived product to any person.
11 (e) It is unlawful for any person who has been issued a permit or a
12 license under this subchapter to fail to display in a conspicuous place a
13 sign indicating that the sale of hemp-derived products to or purchase or
14 possession of hemp-derived products by a minor is prohibited by law.
15 (f) It is unlawful for any manufacturer whose hemp-derived product is
16 distributed in this state and any person who has been issued a permit or
17 license under this subchapter to distribute a free sample of any hemp-derived
18 product, or any component of a hemp-derived product or coupon that entitles
19 the holder of the coupon to any free sample of any hemp-derived product, or
20 any component of a hemp-derived product:
21 (1) In or on any public street or sidewalk within five hundred
22 feet (500) of any playground, public school, or other facility when the
23 playground, public school, or other facility is being used primarily by
24 minors for recreational, educational, or other purposes; or
25 (2) To any minor.
26 (g) It is unlawful for any person that has been issued a permit or
27 license under this subchapter to:
28 (1) Sell or distribute a hemp-derived product through a self-
29 service display, a vending machine, or an order executed solely over the
30 internet or similar means; or
31 (2) Advertise or promote hemp-derived products in a manner that
32 is intended to appeal to children.
33 (h) Any retail permit holder or license holder who violates any
34 provision in this section is deemed guilty of a violation and subject to
35 penalties under � 26-57-256.
36 (i)(1) A notice of an alleged violation of this section shall be given
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1 to the holder of a retail permit or license or an agent of the holder within
2 ten (10) days of the alleged violation.
3 (2)(A) The notice under subdivision (i)(1) of this section shall
4 contain the date and time of the alleged violation.
5 (B)(i) The notice under subdivision (i)(1) of this section
6 shall also include either the name of the person making the alleged sale or
7 information reasonably necessary to determine the location in the store that
8 allegedly made the sale.
9 (ii) When appropriate, information under subdivision
10 (i)(2)(B)(i) of this section should include, but not be limited to, the:
11 (a) Cash register number of the sale in the
12 store;
13 (b) Physical location of the sale in the
14 store; and
15 (c) If possible, the lane or aisle number of
16 the sale in the store.
17 (j) Notwithstanding the provisions of subsection (h) of this section,
18 the court shall consider the following factors when reviewing a possible
19 violation:
20 (1) The business has adopted and enforced a written policy
21 against selling hemp-derived products to minors;
22 (2) The business has informed its employees of the applicable
23 laws regarding the sale of hemp-derived products to minors;
24 (3) The business has required employees to verify the age of a
25 customer attempting to purchase a hemp-derived product by way of photographic
26 identification;
27 (4) The business has established and imposed disciplinary
28 sanctions for noncompliance; and
29 (5) That the appearance of the purchaser of the hemp-derived
30 product was such that an ordinary prudent person would believe him or her to
31 be of legal age to make the purchase.
32 (k) A person convicted of violating any provision of this section
33 whose permit or license to distribute or sell a hemp-derived product is
34 suspended or revoked upon conviction shall surrender to the court any permit
35 or license to distribute or sell a hemp-derived product, and the court shall
36 transmit the permit or license to distribute or sell a hemp-derived product
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1 to the Director of Arkansas Tobacco Control:
2 (1) To suspend or revoke the person's permit or license to
3 distribute or sell a hemp-derived product and to not renew the permit or
4 license; and
5 (2) Not to issue any new permit or license to that person for
6 the period of time determined by the court in accordance with this section.
7
8 20-56-412. Enforcement -- Penalties.
9 (a) It is the duty of all state, county, and city officers to assist
10 Arkansas Tobacco Control in enforcing this subchapter.
11 (b) A person within the jurisdiction of this state who is not
12 permitted to sell hemp-derived products to retailers or consumers and who
13 sells, takes orders from, delivers, or causes to be delivered immediately or
14 in the future any hemp-derived products to retailers or consumers in the
15 State of Arkansas is guilty of a Class A misdemeanor.
16 (c) A person engaged in buying or selling hemp-derived products in
17 this state without first obtaining the proper permit upon conviction is
18 guilty of a Class A misdemeanor.
19 (d) This subchapter does not prohibit in any form the continuous
20 transportation through Arkansas of the plant Cannabis sativa L., and any part
21 of that plant, including the seeds thereof and all derivatives, extracts,
22 cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or
23 not, with a total delta-9 tetrahydrocannabinol concentration of not more than
24 three-tenths of one percent (0.3%) on a dry-weight basis, from one licensed
25 hemp producer in another state to a licensed hemp handler in another state.
26
27 20-56-413. Rules.
28 The Director of Arkansas Tobacco Control and Arkansas Tobacco Control
29 may promulgate rules for the proper enforcement of their powers and duties
30 under this subchapter, including without limitation the regulation of
31 processing, transportation, delivery, sale, and purchase of hemp-derived
32 products in accordance with this subchapter and the power to levy penalties
33 for violations of this subchapter.
34
35 SECTION 8. Arkansas Code � 26-57-247(b), effective until the
36 contingency in Acts 2023, No. 629, � 17, is met, concerning those unstamped
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1 and untaxed items that may be seized by the Director of Arkansas Tobacco
2 Control, is amended to add an additional subdivision read as follows:
3 (5) Hemp products are possessed, sold, or offered for sale in
4 violation of � 20-56-501 et seq.
5
6 SECTION 9. Arkansas Code � 26-57-247, effective if the contingency in
7 Acts 2023, No. 629, � 17, is met, is repealed.
8 26-57-247. Seizure, forfeiture, and disposition of tobacco products
9 and other property.
10 (a) Cigarettes to which stamps have not been affixed as provided by
11 law are subject to seizure and shall be held as evidence for prosecution.
12 (b) The Director of Arkansas Tobacco Control may seize and hold for
13 disposition of the courts or the Arkansas Tobacco Control Board all tobacco
14 products, vapor products, alternative nicotine products, e-liquid products,
15 or hemp-derived products found in the possession of a person dealing in, or a
16 consumer of, tobacco products, vapor products, alternative nicotine products,
17 e-liquid products, or hemp-derived products if:
18 (1) Prima facie evidence exists that the full amount of excise
19 tax due on the tobacco products has not been paid to the Secretary of the
20 Department of Finance and Administration;
21 (2) Tobacco products, vapor products, alternative nicotine
22 products, or e-liquid products are in the possession of a wholesaler who does
23 not possess a current Arkansas wholesale permit;
24 (3) A retail establishment does not possess a current Arkansas
25 retail permit;
26 (4) The tobacco products, vapor products, alternative nicotine
27 products, or e-liquid products have been offered for sale to the public at
28 another location without a current Arkansas retail permit; or
29 (5) Hemp-derived products are possessed, sold, or offered for
30 sale in violation of � 20-56-401 et seq.
31 (c) Property, including money, used to facilitate a violation of this
32 subchapter or the Unfair Cigarette Sales Act, � 4-75-701 et seq., may be
33 seized and forfeited to the state.
34 (d)(1) A prosecuting attorney may institute a civil action against a
35 person who is convicted of a criminal violation under this subchapter or the
36 Unfair Cigarette Sales Act, � 4-75-701 et seq., to obtain a judgment for:
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1 (A) Damages in an amount equal to the value of the
2 property, funds, or a monetary instrument involved in the violation;
3 (B) The proceeds acquired by a person involved in the
4 enterprise or by reason of conduct in furtherance of the violation; and
5 (C) Costs incurred by Arkansas Tobacco Control in the
6 investigation, prosecution, and adjudication of criminal, civil, and
7 administrative proceedings.
8 (2) The standard of proof in an action brought under subdivision
9 (d)(1) of this section is preponderance of the evidence.
10 (e) The following are subject to forfeiture under this section upon
11 order by a circuit court:
12 (1) Tobacco products, vapor products, alternative nicotine
13 products, or e-liquid products distributed, dispensed, or acquired in
14 violation of this subchapter;
15 (2) Raw materials, products, or equipment used or intended for
16 use in manufacturing, compounding, processing, delivering, importing, or
17 exporting a tobacco product, vapor product, alternative nicotine product, or
18 e-liquid product in violation of this subchapter;
19 (3) Property that is used or intended for use as a container for
20 property described in subdivision (e)(1) or subdivision (e)(2) of this
21 section;
22 (4)(A) Except as provided in subdivision (e)(4)(B) of this
23 section, a conveyance, including an aircraft, vehicle, or vessel, that is
24 used or intended to be used to transport or in any manner to facilitate the
25 transportation for the purpose of sale or receipt of property described in
26 subdivision (e)(1) or subdivision (e)(2) of this section.
27 (B)(i) A conveyance used by a person as a common carrier
28 in the transaction of business as a common carrier is not subject to
29 forfeiture under this section unless it appears that the owner or other
30 person in charge of the conveyance is a consenting party or privy to a
31 violation of this subchapter.
32 (ii) A conveyance is not subject to forfeiture under
33 this section by reason of an act or omission established by the owner of the
34 conveyance to have been committed or omitted without his or her knowledge or
35 consent.
36 (C) Upon a showing described in subdivision (e)(4)(B)(i)
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1 of this section by the owner or interest holder of a conveyance, the
2 conveyance may nevertheless be forfeited if the prosecuting attorney
3 establishes that the owner or interest holder either knew or should
4 reasonably have known that the conveyance would be used to transport or in
5 any manner to facilitate the transportation for the purpose of sale or
6 receipt of property described in subdivision (e)(1) or subdivision (e)(2) of
7 this section.
8 (D) A conveyance encumbered by a bona fide security
9 interest is subject to the interest of the secured party if the secured party
10 neither had knowledge of nor consented to an act or omission in violation of
11 this subchapter;
12 (5) A book, record, or research product or material, including a
13 formula, microfilm, tape, or data that is used or intended for use in
14 violation of this subchapter;
15 (6)(A) Except as provided in subdivision (e)(6)(B) of this
16 section, a thing of value, including:
17 (i) Firearms purchased from the proceeds of the sale
18 of untaxed tobacco products, vapor products, alternative nicotine products,
19 or e-liquid products in violation of this subchapter or used in furtherance
20 of a criminal offense as described in � 26-57-245;
21 (ii) Proceeds or profits traceable to an exchange
22 described in subdivision (e)(6)(A)(i) of this section; and
23 (iii) Money, negotiable instruments, or security used
24 or intended to be used to facilitate a violation of this subchapter.
25 (B) Property shall not be forfeited under subdivision
26 (e)(6)(A) of this section to the extent of the interest of an owner by reason
27 of an act or omission established by him or her by a preponderance of the
28 evidence to have been committed or omitted without his or her knowledge or
29 consent;
30 (7)(A) Money, coins, or currency found in close proximity to a
31 forfeitable tobacco product, vapor product, alternative nicotine product, or
32 e-liquid product or a forfeitable record of an importation of a tobacco
33 product, vapor product, alternative nicotine product, or e-liquid product is
34 presumed to be forfeitable under this section.
35 (B) The burden of proof is upon a claimant of the money,
36 coins, or currency to rebut the presumption in subdivision (e)(7)(A) of this
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1 section by a preponderance of the evidence; and
2 (8)(A) Except as provided in subdivision (e)(8)(B) of this
3 section, real property if it substantially assisted in, facilitated in any
4 manner, or was used or intended for use in the commission of any act
5 prohibited by this subchapter.
6 (B)(i) Real property is not subject to forfeiture under
7 this section by reason of an act or omission established by the owner of the
8 real property by a preponderance of the evidence to have been committed or
9 omitted without his or her knowledge or consent.
10 (ii) A forfeiture of real property encumbered by a
11 mortgage or other lien is subject to the interest of the secured party if the
12 secured party neither had knowledge of nor consented to an act or omission in
13 violation of this subchapter.
14 (iii) If the circuit court finds by a preponderance
15 of the evidence that grounds for a forfeiture exist under this section, the
16 court shall enter an order requiring the forfeiture of the real property.
17 (C) Upon an order of forfeiture of real property, the
18 order shall be filed on the day issued and shall have prospective effect.
19 (D) A forfeiture of real property does not affect the
20 title of a bona fide purchaser who purchased the real property before the
21 issuance of the order, and the order has no force or effect on the title of
22 the bona fide purchaser.
23 (E) A lis pendens filed in connection with an action
24 pending under this section that may result in the forfeiture of real property
25 is effective only from the time filed and has no retroactive effect.
26 (f) A tobacco product, vapor product, alternative nicotine product, or
27 e-liquid product that is possessed, transferred, sold, or offered for sale in
28 violation of this subchapter may be seized and immediately forfeited to the
29 state.
30 (g)(1) Property subject to forfeiture under this subchapter may be
31 seized by a law enforcement agent upon process issued by a circuit court
32 having jurisdiction over the property on petition filed by the prosecuting
33 attorney of the judicial circuit.
34 (2) Seizure without process may be made if:
35 (A) The seizure is incident to an arrest or a search under
36 a search warrant or an inspection under the regulatory authority of Arkansas
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1 Tobacco Control;
2 (B) The property subject to seizure has been the subject
3 of a prior judgment in favor of the state in a criminal injunction or
4 forfeiture proceeding based upon this subchapter;
5 (C) The seizing law enforcement agency has probable cause
6 to believe that the property is directly or indirectly dangerous to health or
7 safety; or
8 (D) The seizing law enforcement agency has probable cause
9 to believe that the property was used or is intended to be used in violation
10 of this subchapter.
11 (h)(1) A state or local law enforcement agency shall not transfer
12 property seized by the state or local agency under this section to a federal
13 entity for forfeiture under federal law unless the circuit court having
14 jurisdiction over the property enters an order, upon petition by the
15 prosecuting attorney, authorizing the property to be transferred to the
16 federal entity.
17 (2) The transfer shall not be approved unless it reasonably
18 appears that the activity giving rise to the investigation or seizure
19 involves more than one (1) state or the nature of the investigation or
20 seizure would be better pursued under federal law.
21 (i)(1) Property seized for forfeiture under this section is not
22 subject to replevin but is deemed to be in the custody of the seizing law
23 enforcement agency subject only to an order or decree of the circuit court
24 having jurisdiction over the property seized.
25 (2) Subject to a need to retain the property as evidence, when
26 property is seized under this subchapter, the seizing law enforcement agency
27 may:
28 (A) Remove the property to a place designated by the
29 circuit court;
30 (B) Place the property under constructive seizure, posting
31 notice of pending forfeiture on it by:
32 (i) Giving notice of pending forfeiture to its
33 owners and interest holders; or
34 (ii) Filing notice of pending forfeiture in an
35 appropriate public record relating to the property;
36 (C) Remove the property to a storage area for safekeeping
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1 or, if the property is a negotiable instrument or money or is not needed for
2 evidentiary purposes, deposit it into an interest-bearing account; or
3 (D) Provide for another agency or custodian, including an
4 owner, secured party, mortgagee, or lienholder, to take custody of the
5 property and service, maintain, and operate it as reasonably necessary to
6 maintain its value in an appropriate location within the jurisdiction of the
7 court.
8 (3)(A) In case of transfer of property, a transfer receipt shall
9 be prepared by the transferring agency.
10 (B) The transfer receipt shall:
11 (i) List a detailed and complete description of the
12 property being transferred;
13 (ii) State to whom the property is being transferred
14 and the source or authorization for the transfer; and
15 (iii) Be signed by both the transferor and the
16 transferee.
17 (C) Both transferor and transferee shall maintain a copy
18 of the transfer receipt.
19 (4) A person who acts as custodian of property under this
20 section is not liable to any person on account of an act done in a reasonable
21 manner in compliance with an order under this subchapter.
22 (j)(1) Property seized by a state or local law enforcement officer
23 under this section who is detached to, deputized or commissioned by, or
24 working in conjunction with a federal agency remains subject to this section.
25 (2)(A) If property is seized for forfeiture by a law enforcement
26 agency under this section, the seizing law enforcement officer shall prepare
27 and sign a confiscation report.
28 (B)(i) The party from whom the property is seized shall
29 also sign the confiscation report if present and shall immediately receive a
30 copy of the confiscation report.
31 (ii) If the party refuses to sign the confiscation
32 report, the confiscation report shall be signed by one (1) additional law
33 enforcement officer, stating that the party refused to sign the confiscation
34 report.
35 (C) The original confiscation report shall be:
36 (i) Filed with the seizing law enforcement agency
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1 within forty-eight (48) hours after the seizure; and
2 (ii) Maintained in a separate file.
3 (D) One (1) copy of the confiscation report shall be
4 retained by the seizing law enforcement officer.
5 (3) The confiscation report shall contain the following
6 information:
7 (A) A detailed description of the property seized
8 including serial or model numbers and odometer or hour reading of vehicles or
9 equipment;
10 (B) The date of seizure;
11 (C) The name and address of the party from whom the
12 property was seized;
13 (D) The reason for the seizure;
14 (E) The location where the property will be held;
15 (F) The seizing law enforcement officer's name; and
16 (G) A signed statement by the seizing law enforcement
17 officer stating that the confiscation report is true and complete.
18 (4) Within three (3) business days after receiving the
19 confiscation report, the seizing law enforcement agency shall forward a copy
20 of the confiscation report to the prosecuting attorney for the district where
21 the property was seized and to the director.
22 (5)(A) Arkansas Legislative Audit shall notify the director and
23 a circuit court in the county of a law enforcement agency, prosecuting
24 attorney, or other public entity that the law enforcement agency, prosecuting
25 attorney, or public entity is ineligible to receive forfeited funds,
26 forfeited property, or grants from the council, if Arkansas Legislative Audit
27 determines by its own investigation or upon written notice from the director
28 that:
29 (i) The law enforcement agency failed to complete
30 and file the confiscation reports as required by this section;
31 (ii) The law enforcement agency, prosecuting
32 attorney, or public entity has not properly accounted for the seized
33 property; or
34 (iii) The prosecuting attorney has failed to comply
35 with the notification requirement set forth in subdivision (m)(2) of this
36 section.
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1 (B) After the notice, the circuit court shall not issue an
2 order distributing seized property to that law enforcement agency,
3 prosecuting attorney, or public entity, nor shall a grant be awarded by the
4 council to that law enforcement agency, prosecuting attorney, or public
5 entity until:
6 (i) The appropriate officials of the law enforcement
7 agency, prosecuting attorney, or public entity have appeared before the
8 Legislative Joint Auditing Committee; and
9 (ii) The Legislative Joint Auditing Committee has
10 adopted a motion authorizing subsequent transfers of forfeited property to
11 the law enforcement agency, prosecuting attorney, or public entity.
12 (C)(i) If a law enforcement agency, prosecuting attorney,
13 or other public entity is ineligible to receive forfeited property, the
14 circuit court shall order money that would have been distributed to that law
15 enforcement agency, prosecuting attorney, or public entity to be transmitted
16 to the Treasurer of State for deposit into the Special State Assets
17 Forfeiture Fund.
18 (ii) If the property is not cash, the circuit court
19 shall order the property converted to cash under this section and the
20 proceeds transmitted to the Treasurer of State for deposit into the Special
21 State Assets Forfeiture Fund.
22 (D) Moneys deposited into the Special State Assets
23 Forfeiture Fund are not subject to recovery or retrieval by an ineligible law
24 enforcement agency, prosecuting attorney, or other public entity.
25 (6) The director shall establish by rule a standardized
26 confiscation report form to be used by all law enforcement agencies, with
27 specific instructions and guidelines concerning the nature and dollar value
28 of all property, including firearms, to be included in the confiscation
29 report and forwarded to the office of the local prosecuting attorney and the
30 director under this subsection.
31 (k)(1)(A) The prosecuting attorney shall initiate forfeiture
32 proceedings by filing a complaint with the circuit clerk of the county where
33 the property was seized and by serving the complaint on all known owners and
34 interest holders of the seized property in accordance with the Arkansas Rules
35 of Civil Procedure.
36 (B) The complaint may be based on in rem or in personam
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1 jurisdiction but shall not be filed to avoid the distribution requirements
2 set forth in subdivision (l)(1) of this section.
3 (C) The prosecuting attorney shall mail a copy of the
4 complaint to the director within five (5) calendar days after filing the
5 complaint.
6 (2)(A) The complaint shall include a copy of the confiscation
7 report and shall be filed within sixty (60) days after receiving a copy of
8 the confiscation report from the seizing law enforcement agency.
9 (B) In a case involving real property, the complaint shall
10 be filed within sixty (60) days of the defendant's conviction on the charge
11 giving rise to the forfeiture.
12 (3)(A) The prosecuting attorney may file the complaint after the
13 expiration of the time only if the complaint is accompanied by a statement of
14 good cause for the late filing.
15 (B) However, the complaint shall not be filed more than
16 one hundred twenty (120) days after either the date of the seizure or, in a
17 case involving real property, the date of the defendant's conviction.
18 (C)(i) If the circuit court determines that good cause has
19 not been established, the circuit court shall order that the seized property
20 be returned to the owner or interest holder.
21 (ii) In addition, items seized but not subject to
22 forfeiture under this section or subject to disposition under law or the
23 Arkansas Rules of Criminal Procedure may be ordered returned to the owner or
24 interest holder.
25 (iii) If the owner or interest holder cannot be
26 determined, the court may order disposition of the property.
27 (4) Within the time set forth in the Arkansas Rules of Civil
28 Procedure, the owner or interest holder of the seized property shall file
29 with the circuit clerk a verified answer to the complaint that shall include:
30 (A) A statement describing the seized property and the
31 owner's interest or interest holder's interest in the seized property with
32 supporting documents to establish the owner's interest or interest holder's
33 interest;
34 (B) A certification by the owner or interest holder
35 stating that he or she has read the document and that it has not been filed
36 for an improper purpose;
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1 (C) A statement setting forth any defense to forfeiture;
2 and
3 (D) The address at which the owner or interest holder will
4 accept mail.
5 (5)(A) If the owner or interest holder fails to file an answer,
6 the prosecuting attorney may move for default judgment under the Arkansas
7 Rules of Civil Procedure.
8 (B)(i) If a timely answer has been filed, the prosecuting
9 attorney has the burden of proving by a preponderance of the evidence that
10 the seized property should be forfeited.
11 (ii) After the prosecuting attorney has presented
12 proof, an owner or interest holder of the property seized is allowed to
13 present evidence showing why the seized property should not be forfeited.
14 (iii) If the circuit court determines that grounds
15 for forfeiting the seized property exist and that a defense to forfeiture has
16 not been established by the owner or interest holder, the circuit court shall
17 enter an order under this section. However, if the circuit court determines
18 either that the prosecuting attorney has failed to establish that grounds for
19 forfeiting the seized property exist or that the owner or interest holder has
20 established a defense to forfeiture, the court shall order that the seized
21 property be immediately returned to the owner or interest holder.
22 (l)(1) If the circuit court having jurisdiction over the seized
23 property finds upon a hearing by a preponderance of the evidence that grounds
24 for a forfeiture exist under this subchapter, the circuit court shall enter
25 an order:
26 (A) To permit the law enforcement agency or prosecuting
27 attorney to retain the seized property for law enforcement or prosecutorial
28 purposes, subject to the following provisions:
29 (i)(a) Seized property may not be retained for
30 official use for more than three (3) years, unless the circuit court finds
31 that the seized property has been used for law enforcement or prosecutorial
32 purposes and authorizes continued use for those purposes on an annual basis.
33 (b) At the end of the retention period, the
34 seized property shall be sold and eighty percent (80%) of the proceeds shall
35 be deposited into the tobacco control fund of the retaining law enforcement
36 agency or prosecuting attorney, and twenty percent (20%) of the proceeds
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1 shall be deposited into the State Treasury as special revenues to be credited
2 to the Special State Assets Forfeiture Fund.
3 (c) The retaining law enforcement agency or
4 prosecuting attorney may sell the retained seized property during the time
5 allowed for retention. However, the proceeds of the sale shall be distributed
6 as set forth in subdivision (l)(1)(A)(i)(b) of this section;
7 (ii) If the circuit court determines that retained
8 seized property has been used for personal use or by non-law enforcement
9 personnel for non-law enforcement purposes, the circuit court shall order the
10 seized property to be sold under � 5-5-101(e) and (f), and the proceeds shall
11 be deposited into the State Treasury as special revenues to be credited to
12 the Special State Assets Forfeiture Fund;
13 (iii)(a) A law enforcement agency may use
14 forfeited property or money if the circuit court's order specifies that the
15 forfeited property or money is forfeited to the prosecuting attorney,
16 sheriff, chief of police, Division of Arkansas State Police, director, or
17 Arkansas Highway Police Division of the Arkansas Department of
18 Transportation.
19 (b) After the order, the prosecuting attorney,
20 sheriff, chief of police, Division of Arkansas State Police, director, or
21 Arkansas Highway Police Division of the Arkansas Department of Transportation
22 shall maintain an inventory of the forfeited property or money, be
23 accountable for the forfeited property or money, and be subject to
24 subdivision (j)(5) of this section with respect to the forfeited property or
25 money;
26 (iv)(a) An aircraft is forfeited to the office
27 of the director and may be used only for tobacco, vapor product, alternative
28 nicotine product, or e-liquid product smuggling interdiction efforts within
29 the discretion of the director.
30 (b) However, if the director determines that
31 the aircraft should be sold, the proceeds of the sale shall be distributed as
32 set forth in subdivision (l)(1)(A)(i)(b) of this section;
33 (v) A firearm not retained for official use shall be
34 disposed of in accordance with state and federal law; and
35 (vi) A tobacco product, vapor product, alternative
36 nicotine product, or e-liquid product shall be destroyed pursuant to a court
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1 order;
2 (B)(i) To sell seized property that is not required by law
3 to be destroyed and that is not harmful to the public.
4 (ii) Seized property described in subdivision
5 (l)(1)(B)(i) of this section shall be sold at a public sale by the retaining
6 law enforcement agency or prosecuting attorney under � 5-5-101(e) and (f); or
7 (C) To transfer a motor vehicle to a school district for
8 use in a driver education course.
9 (2) Disposition of forfeited property under this subsection is
10 subject to the need to retain the forfeited property as evidence in any
11 related proceeding.
12 (3) Within three (3) business days after the entry of the order,
13 the circuit clerk shall forward to the director copies of the confiscation
14 report, the circuit court's order, and other documentation detailing the
15 disposition of the seized property.
16 (m)(1)(A) Subject to subdivision (j)(5) of this section, the proceeds
17 of sales conducted under this section and moneys forfeited or obtained by
18 judgment or settlement under this subchapter shall be deposited and
19 distributed in the manner provided in this subsection.
20 (B) Moneys received from a federal forfeiture for a
21 violation of this subchapter shall be deposited and distributed under this
22 section.
23 (2)(A) The proceeds of a sale and moneys forfeited or obtained
24 by judgment or settlement under this subchapter shall be deposited into the
25 asset forfeiture fund of the prosecuting attorney and is subject to the
26 following provisions:
27 (i) If, during a calendar year, the aggregate amount
28 of moneys deposited into the asset forfeiture fund exceeds twenty thousand
29 dollars ($20,000) per county, the prosecuting attorney, within fourteen (14)
30 days after that time, shall notify the circuit judges in the judicial
31 district and the director;
32 (ii) Subsequent to the notification set forth in this
33 section, twenty percent (20%) of the proceeds of an additional sale and
34 additional moneys forfeited or obtained by judgment or settlement under this
35 subchapter in the same calendar year shall be deposited into the State
36 Treasury as special revenues to be credited to the Special State Assets
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1 Forfeiture Fund, and the remainder shall be deposited into the asset
2 forfeiture fund of the prosecuting attorney;
3 (iii) Failure by the prosecuting attorney to comply
4 with the notification requirement set forth in this section renders the
5 prosecuting attorney and an entity eligible to receive forfeited moneys or
6 property from the prosecuting attorney ineligible to receive forfeited moneys
7 or property, except as provided in this section; and
8 (iv) Twenty percent (20%) of moneys in excess of
9 twenty thousand dollars ($20,000) that have been retained but not reported as
10 required by this section are subject to recovery for deposit into the Special
11 State Assets Forfeiture Fund.
12 (B) The prosecuting attorney shall administer expenditures
13 from the asset forfeiture fund, which is subject to audit by Arkansas
14 Legislative Audit. Moneys distributed from the asset forfeiture fund shall be
15 used only for law enforcement and prosecutorial purposes. Moneys in the asset
16 forfeiture fund shall be distributed in the following order:
17 (i) For the satisfaction of a bona fide security
18 interest or lien;
19 (ii) For payment of a proper expense of the
20 proceeding for forfeiture and sale, including expenses of seizure,
21 maintenance of custody, advertising, and court costs;
22 (iii) Any balance under three hundred fifty thousand
23 dollars ($350,000) shall be distributed proportionally so as to reflect
24 generally the contribution of the appropriate local or state law enforcement
25 or prosecutorial agency's participation in any activity that led to the
26 seizure or forfeiture of the property or deposit of moneys under this
27 subchapter; and
28 (iv) Any balance over three hundred fifty thousand
29 dollars ($350,000) shall be forwarded to the director to be transferred to
30 the State Treasury for deposit into the Special State Assets Forfeiture Fund
31 for distribution under this section.
32 (C)(i) For a forfeiture in an amount greater than three
33 hundred fifty thousand dollars ($350,000) from which expenses are paid for a
34 proceeding for forfeiture and sale under this section, an itemized accounting
35 of the expenses shall be delivered to the director within ten (10) calendar
36 days after the distribution of the funds.
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1 (ii) The itemized accounting shall include the
2 expenses paid, to whom paid, and for what purposes the expenses were paid.
3 (3)(A) Moneys received by a prosecuting attorney or law
4 enforcement agency from a federal forfeiture for a violation of this
5 subchapter shall be deposited and maintained in a separate account.
6 (B) However, a balance over three hundred fifty thousand
7 dollars ($350,000) shall be distributed as required under this section.
8 (4) Other moneys shall not be maintained in the account except
9 for interest income generated by the account.
10 (5) Moneys in the account shall only be used for law enforcement
11 and prosecutorial purposes consistent with governing federal law.
12 (6) The account is subject to audit by Arkansas Legislative
13 Audit.
14 (7) A balance over three hundred fifty thousand dollars
15 ($350,000) shall be transferred to the State Treasury for deposit into the
16 Special State Assets Forfeiture Fund in which it shall be maintained
17 separately and distributed consistently with governing federal law and upon
18 the advice of the director.
19 (n) In personam jurisdiction may be based on a person's presence in
20 the state or on his or her conduct in the state, as set out in � 16-4-101(C),
21 and is subject to the following additional provisions:
22 (1) A temporary restraining order under this section may be
23 entered ex parte on application of the state upon a showing that:
24 (A) There is probable cause to believe that the property
25 with respect to which the order is sought is subject to forfeiture under this
26 section; and
27 (B) Notice of the action would jeopardize the availability
28 of the property for forfeiture;
29 (2)(A) Notice of the entry of a temporary restraining order and
30 an opportunity for hearing shall be afforded to a person known to have an
31 interest in the property.
32 (B) The hearing shall be held at the earliest possible
33 date consistent with Rule 65 of the Arkansas Rules of Civil Procedure and is
34 limited to the issues of whether:
35 (i) There is a probability that the state will
36 prevail on the issue of forfeiture and that failure to enter the temporary
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1 restraining order will result in the property's being destroyed, conveyed,
2 alienated, encumbered, disposed of, received, removed from the jurisdiction
3 of the circuit court, concealed, or otherwise made unavailable for
4 forfeiture; and
5 (ii) The need to preserve the availability of
6 property through the entry of the requested temporary restraining order
7 outweighs the hardship on an owner or interest holder against whom the
8 temporary restraining order is to be entered;
9 (3) The state has the burden of proof by a preponderance of the
10 evidence to show that the defendant's property is subject to forfeiture;
11 (4)(A) On a determination of liability of a person for conduct
12 giving rise to forfeiture under this section, the circuit court shall enter a
13 judgment of forfeiture of the property subject to forfeiture as alleged in
14 the complaint and may authorize the prosecuting attorney or a law enforcement
15 officer to seize property subject to forfeiture under this section not
16 previously seized or not then under seizure.
17 (B) The order of forfeiture shall be consistent with
18 subsection (l) of this section.
19 (C) In connection with the judgment, on application of the
20 state, the circuit court may enter an appropriate order to protect the
21 interest of the state in property ordered forfeited; and
22 (5) Subsequent to the finding of liability and order of
23 forfeiture, the following procedures apply:
24 (A) The attorney for the state shall give notice of
25 pending forfeiture in the manner provided in Rule 4 of the Arkansas Rules of
26 Civil Procedure to an owner or interest holder who has not previously been
27 given notice;
28 (B) An owner of or interest holder in property that has
29 been ordered forfeited and whose claim is not precluded may file a claim
30 within thirty (30) days after initial notice of pending forfeiture or after
31 notice under Rule 4 of the Arkansas Rules of Civil Procedure, whichever is
32 earlier; and
33 (C) The circuit court may amend the in personam order of
34 forfeiture if the circuit court determines that a claimant has established
35 that he or she has an interest in the property and that the interest is
36 exempt under this section.
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1 (o) The circuit court shall order the forfeiture of other property of
2 a claimant or defendant up to the value of the claimant's or defendant's
3 property found by the circuit court to be subject to forfeiture under this
4 section if any of the forfeitable property had remained under the control or
5 custody of the claimant or defendant and:
6 (1) Cannot be located;
7 (2) Was transferred or conveyed to, sold to, or deposited with a
8 third party;
9 (3) Is beyond the jurisdiction of the circuit court;
10 (4) Was substantially diminished in value while not in the
11 actual physical custody of the seizing law enforcement agency;
12 (5) Was commingled with other property that cannot be divided
13 without difficulty; or
14 (6) Is subject to interest exempted from forfeiture under this
15 subchapter.
16 (p)(1) There is created on the books of law enforcement agencies and
17 prosecuting attorneys a tobacco control fund.
18 (2) The fund shall consist of moneys obtained under this section
19 and other revenue as may be provided by law or ordinance.
20 (3) Moneys in the tobacco control fund shall be appropriated on
21 a continuing basis and are not subject to the Revenue Stabilization Law, �
22 19-5-101 et seq.
23 (4)(A) The fund shall be used for law enforcement and
24 prosecutorial purposes.
25 (B) Each prosecuting attorney shall submit to the Director
26 of Arkansas Tobacco Control on or before June 30 of each year a report
27 detailing moneys received and expenditures made from the tobacco control fund
28 during the preceding twelve-month period.
29 (5) The law enforcement agencies and prosecuting attorneys shall
30 submit to the director on or before June 30 of each year a report detailing
31 any moneys received and expenditures made from the tobacco control fund
32 during the preceding twelve-month period.
33 (6) Moneys from the tobacco control fund may not supplant other
34 local, state, or federal funds.
35 (7) The tobacco control fund is subject to audit by Arkansas
36 Legislative Audit.
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1
2 SECTION 10. Arkansas Code � 26-57-255(g)(3), effective until the
3 contingency in Acts 2023, No. 629, � 17, is met, concerning the powers and
4 duties of the Arkansas Tobacco Control Board, is amended to read as follows:
5 (3)(A) Conduct public hearings when appropriate regarding a
6 permit authorized under this subchapter or in violation of this subchapter,
7 the Unfair Cigarette Sales Act, � 4-75-701 et seq., � 5-27-227, � 20-56-501
8 et seq., or any other federal, state, or local statute, ordinance, rule, or
9 regulation concerning the sale of tobacco products, vapor products,
10 alternative nicotine products, or e-liquid products to minors, or the rules
11 promulgated by Arkansas Tobacco Control.
12 (B) After notice and hearing held in accordance with the
13 Arkansas Administrative Procedure Act, � 25-15-201 et seq., if the board
14 finds a violation of this subchapter, the Unfair Cigarette Sales Act, � 4-75-
15 701 et seq., � 20-56-501 et seq., or the rules promulgated by Arkansas
16 Tobacco Control, the board may suspend or revoke any or all permits issued by
17 the director to any person.
18 (C) The board may levy a civil penalty in an amount not to
19 exceed five thousand dollars ($5,000) for each violation against a person
20 found to be in violation of this subchapter, the Unfair Cigarette Sales Act,
21 � 4-75-701 et seq., � 20-56-501 et seq., or the rules promulgated by Arkansas
22 Tobacco Control.
23 (D) Each day of a violation is a separate violation.
24 (E) A civil penalty under subdivision (g)(3)(C) of this
25 section is in addition to any penalties levied by the board under � 26-57-
26 248.
27 (F) In conducting a hearing under this subdivision (g)(3),
28 the board may examine or cause to be examined under oath any witness and the
29 books and records of a permitted person or other person;
30
31 SECTION 11. Arkansas Code � 26-57-255, effective if the contingency in
32 Acts 2023, No. 629, � 17, is met, is repealed.
33 26-57-255. Arkansas Tobacco Control Board -- Creation -- Definition.
34 (a) There is created the Arkansas Tobacco Control Board to consist of
35 the following eight (8) members appointed by the Governor:
36 (1) Two (2) members of the board shall be wholesalers of tobacco
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1 products, vapor products, alternative nicotine products, or e-liquid
2 products;
3 (2) Two (2) members of the board shall be retailers of tobacco
4 products, vapor products, alternative nicotine products, or e-liquid
5 products; and
6 (3) Four (4) members of the board shall be members of the public
7 at large who are not public employees or officials, at least one (1) of whom
8 shall be an African-American, and two (2) of whom shall be appointed by the
9 Governor after consulting the Arkansas Medical Society, Inc. and subject to
10 confirmation by the Senate.
11 (b) The Governor shall designate which member of the board shall act
12 as chair and that person shall serve as chair for two (2) years unless his or
13 her membership on the board ceases prior to the end of the two-year period.
14 (c)(1) All members of the board shall be residents of the State of
15 Arkansas and confirmed by the Senate.
16 (2) The term of office shall be five (5) years.
17 (d)(1) A minimum of five (5) members is required for a quorum.
18 (2)(A) All action by the board shall be by a majority vote of
19 the board members present at the regular or special meeting, and the board
20 may take no official action in connection with a matter except at a regular
21 or special meeting.
22 (B) In the event of a tie vote of the members of the
23 board, the Director of Arkansas Tobacco Control may cast the deciding vote.
24 (e) A person who is not a citizen of the United States and who has not
25 resided in the State of Arkansas for at least two (2) consecutive years
26 immediately preceding the date of appointment shall not be appointed to the
27 board.
28 (f) Each member of the board and the director shall take and subscribe
29 to an oath that he or she will support and enforce this subchapter, the
30 tobacco control laws of this state, the Arkansas Constitution, and the United
31 States Constitution.
32 (g) The board shall:
33 (1) Act as the adjudicatory body for Arkansas Tobacco Control;
34 (2) Have responsibility for approving the issuance, suspension,
35 and revocation of the permits enumerated in � 26-57-219;
36 (3)(A) Conduct public hearings when appropriate regarding a
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1 permit authorized under this subchapter or in violation of this subchapter,
2 the Unfair Cigarette Sales Act, � 4-75-701 et seq., � 5-27-227, � 20-56-401
3 et seq., or any other federal, state, or local statute, ordinance, rule, or
4 regulation concerning the sale of tobacco products, vapor products,
5 alternative nicotine products, e-liquid products, or hemp-derived products to
6 minors or the rules promulgated by Arkansas Tobacco Control.
7 (B) After notice and hearing held in accordance with the
8 Arkansas Administrative Procedure Act, � 25-15-201 et seq., if the board
9 finds a violation of this subchapter, the Unfair Cigarette Sales Act, � 4-75-
10 701 et seq., � 20-56-401 et seq., or the rules promulgated by Arkansas
11 Tobacco Control, the board may suspend or revoke any or all permits issued by
12 the director to any person.
13 (C) The board may levy a civil penalty in an amount not to
14 exceed five thousand dollars ($5,000) for each violation against a person
15 found to be in violation of this subchapter, the Unfair Cigarette Sales Act,
16 � 4-75-701 et seq., � 20-56-401 et seq., or the rules promulgated by Arkansas
17 Tobacco Control.
18 (D) Each day of a violation is a separate violation.
19 (E) A civil penalty under subdivision (g)(3)(C) of this
20 section is in addition to any penalties levied by the board under � 26-57-
21 248.
22 (F) In conducting a hearing under this subdivision (g)(3),
23 the board may examine or cause to be examined under oath any witness and the
24 books and records of a permitted person or other person;
25 (4) When requested by the written petition of at least three (3)
26 interested parties, conduct public hearings to receive testimony regarding
27 the facts relevant to the issuance of a permit under this subchapter; and
28 (5)(A) Not have authority in criminal prosecutions or the
29 assessment or collection of any taxes.
30 (B) However, the board shall refuse to approve the
31 issuance or renewal of a permit issued by the director for the failure to pay
32 taxes or fees imposed on tobacco products or any permit fees imposed under
33 this subchapter or any other state or local taxes.
34 (h)(1) The board may assess penalties for a violation of � 5-27-227
35 according to the following schedule:
36 (A) For a first violation within a forty-eight-month
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1 period, a civil penalty not to exceed two hundred fifty dollars ($250);
2 (B) For a second violation within a forty-eight-month
3 period, a civil penalty not to exceed five hundred dollars ($500) and
4 suspension of the permit enumerated in � 26-57-219 for a period not to exceed
5 two (2) days;
6 (C) For a third violation within a forty-eight-month
7 period, a civil penalty not to exceed one thousand dollars ($1,000) and
8 suspension of the permit enumerated in � 26-57-219 for a period not to exceed
9 seven (7) days;
10 (D) For a fourth or subsequent violation within a forty-
11 eight-month period, a civil penalty not to exceed two thousand dollars
12 ($2,000) and suspension of the permit enumerated in � 26-57-219 for a period
13 not to exceed fourteen (14) days; and
14 (E) For a fifth or subsequent violation within a forty-
15 eight-month period, in addition to the other penalties provided under this
16 subsection, the permit enumerated in � 26-57-219 may be revoked.
17 (2)(A) A penalty under this subsection shall not be imposed on a
18 retailer or an agent or employee of a retailer who can establish an
19 affirmative defense that before the date of the violation the retailer or
20 agent or employee of the retailer furnishing the tobacco products, vapor
21 products, alternative nicotine products, e-liquid products, or cigarette
22 papers reasonably relied on proof of age that identified the person receiving
23 the tobacco products, vapor products, alternative nicotine products, e-liquid
24 products, or cigarette papers as not being a minor.
25 (B) As used in this subsection, "proof of age" means valid
26 documentation issued by a governmental agency containing the person's
27 photograph, date of birth, and an expiration date.
28 (3)(A) For a corporation or business with more than one (1)
29 retail location, to determine the number of accumulated violations for
30 purposes of the penalty schedule stated in this subsection, violations of �
31 5-27-227 by one (1) retail location shall not be accumulated against other
32 retail locations of that same corporation or business.
33 (B) For a retail location, for purposes of the penalty
34 schedule stated in this subsection, violations accumulated and assessed
35 against a prior owner of the retail location shall not be accumulated against
36 a new owner of the same retail location unless approved by the board.
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1
2 SECTION 12. Arkansas Code � 26-57-256(a)(2) and (3), effective until
3 the contingency in Acts 2023, No. 629, � 17, is met, concerning the powers of
4 Arkansas Tobacco Control, are amended to read as follows:
5 (2)(A) Receive applications for and issue, refuse, suspend, and
6 revoke permits listed in � 26-57-219 and � 20-56-501 et seq.
7 (B) Arkansas Tobacco Control shall refuse to issue or
8 renew any permits issued by the Director of Arkansas Tobacco Control for the
9 failure to pay:
10 (i) Any applicable taxes or fees imposed on tobacco
11 products,;
12 (ii) Permit permit fees imposed under this
13 subchapter and � 20-56-501 et seq.;, or
14 (iii) Any any other state or local taxes;
15 (3) Prescribe forms of applications for permits under this
16 subchapter and � 20-56-501 et seq;
17
18 SECTION 13. Uncodified Section 17 of Acts 2023, No. 629, which
19 reflects changes to the references to "Sections 6-14", and "Sections 2-5" in
20 Acts 2023, No. 629, �� 16 and 17 made by the Arkansas Code Revision
21 Commission, is repealed.
22 SECTION 17. Contingent effective date.
23 Sections 6-14 [8-16] of this act shall become effective only upon the
24 certification of the Arkansas Attorney General that the State of Arkansas is
25 currently enjoined from enforcing Sections 2-5 [2-7] of this act relating to
26 delta-8 tetrahydrocannabinol and delta-10 tetrahyrdocannabinol, but no
27 earlier than August 1, 2023.
28
29 SECTION 14. DO NOT CODIFY. Rules.
30 (a) When adopting the initial rules required under this act, Arkansas
31 Tobacco Control shall file the final rules with the Secretary of State for
32 adoption under � 25-15-204(f):
33 (1) On or before January 1, 2026; or
34 (2) If approval under � 10-3-309 has not occurred by January 1,
35 2026, as soon as practicable after approval under � 10-3-309.
36 (b) Arkansas Tobacco Control shall file the proposed rules with the
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1 Legislative Council under � 10-3-309(c) sufficiently in advance of January 1,
2 2026, so that the Legislative Council may consider the rules for approval
3 before January 1, 2026.
4
5 SECTION 15. EMERGENCY CLAUSE. It is found and determined by the
6 General Assembly of the State of Arkansas that minors in this state are
7 currently purchasing hemp-derived products without any regulations or testing
8 of the hemp-derived products; that minors are becoming ill when taking
9 synthetic drugs that they believe are hemp-derived products; and that this
10 act is immediately necessary to regulate the hemp-derived products, including
11 testing requirements, to ensure the health and safety of the minors of this
12 state. Therefore, an emergency is declared to exist, and this act being
13 immediately necessary for the preservation of the public peace, health, and
14 safety shall become effective on:
15 (1) The date of its approval by the Governor;
16 (2) If the bill is neither approved nor vetoed by the Governor,
17 the expiration of the period of time during which the Governor may veto the
18 bill; or
19 (3) If the bill is vetoed by the Governor and the veto is
20 overridden, the date the last house overrides the veto.
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66 03/10/2025 1:26:46 PM JMB422Every fact on this page links to its source, starting with the official bill record.