Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
61.870 - 61.844, 260.850-260.869,
7
U.S.C. 1639,
21
U.S.C. Chapter 9
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
260.862(1) authorizes the
department to promulgate administrative regulations for a Hemp Licensing
Program in the Commonwealth of Kentucky.
KRS
260.862(1)(a) authorizes the
department to license persons who wish to participate in a Hemp Licensing
Program by cultivating, handling, processing, or marketing hemp. This
administrative regulation establishes procedures and requirements for licensing
persons who wish to process or handle hemp as a participant in the department's
Hemp Licensing Program.
Section 1.
Definitions.
(1) "Agent" means a person who is
employed by or working under contract for a license holder, and who does not
have any ownership interest in the hemp.
(2) "Applicant" means a person who submits an
application on his or her behalf or on behalf of a business entity to
participate in the Hemp Licensing Program.
(3) "Brokering" means engaging or
participating in the marketing of industrial hemp by acting as an intermediary
or negotiator between prospective buyers and sellers
(4) "Cannabis":
(a) Means the plant that, depending on its
THC concentration level, is defined as either "hemp" or "marijuana." Cannabis
is a genus of flowering plants in the family Cannabaceae of which Cannabis
sativa is a species, and Cannabis indica and Cannabis ruderalis or subspecies
thereof. Cannabis includes all parts of the plant, whether growing or not,
including its seeds, resin, compounds, salts, derivatives, and extracts;
and
(b) Does not mean a "publicly
marketable hemp product," as defined by subsection (31) of this
section.
(5) "CBD" means
cannabidiol.
(6) "Commissioner" is
defined by
KRS
260.850(1).
(7) "Commonwealth" means the Commonwealth of
Kentucky.
(8) "Conviction":
(a) Means an adjudication or finding of
guilt, including a plea of guilty or nolo contendere; and
(b) Does not mean a conviction subsequently
overturned on appeal, pardoned, or expunged.
(9) "Corrective action plan" means a document
established by the department for a licensee to correct a negligent violation
of, or non-compliance with,
KRS
260.850 - 260.869 or a requirement of 302 KAR
Chapter 50.
(10) "Culpable mental
state greater than negligence" means to act intentionally, knowingly,
willfully, or with criminal negligence.
(11) "Decarboxylation" means the completion
of the chemical reaction that converts delta-9-THC-acid into delta-9-THC, the
intoxicating component of cannabis. The decarboxylated value is also calculated
using a conversion formula that sums delta-9-THC and eighty-seven and seven
tenths (87.7) percent of delta-9-THC-acid.
(12) "delta-9-THC" means
delta-9-tetrahydrocannabinol concentration (the primary intoxicating component
of cannabis). For compliance purposes, all delta-9-THC concentrations are
measured post- decarboxylation (result commonly referred to as total
THC).
(13) "Department" or "KDA" is
defined by
KRS
260.850(3).
(14) "GPS" means Global Positioning
System.
(15) "Handling" is defined
by
KRS
260.850(4).
(16) "Hemp" or "industrial hemp" is defined
by
KRS
260.850(5).
(17) "Hemp Grower License" means a document
issued by the department authorizing the person to grow, handle, and store hemp
in the Commonwealth under the terms established in the document,
KRS
260.850 through
260.863, and this
administrative regulation.
(18)
"Hemp Processor/Handler License" means a document issued by the department
authorizing the person to process, handle, market, and store hemp in the
Commonwealth under the terms established in the document,
KRS
260.850 through
260.869,
and this administrative regulation.
(19) "Hemp product" or "industrial hemp
product" is defined by
KRS
260.850(6).
(20) "Key participant":
(a) Means a person who has a direct or
indirect financial interest in the entity producing hemp, such as an owner or a
partner in a partnership and includes an entity's chief executive officer,
chief operating officer, and chief financial officer; and
(b) Does not mean facility managers or shift
managers.
(21) "Law
enforcement agency" means the Kentucky State Police, DEA, or other federal,
state, or local law enforcement agency, or drug suppression unit.
(22) "Licensed grower" means a person
authorized in the commonwealth by the department to grow, handle, store, and
market hemp under the terms established in a hemp grower license,
KRS
260.850 through
260.869,
and 302 KAR 50:021.
(23) "Licensed
processor" means a person in the Commonwealth authorized by the department to
process, handle, store, and market hemp under the terms established in a hemp
processor/handler license,
KRS
260.850 through
260.869,
and this administrative regulation.
(24) "Location ID" means the unique
identifier established by the applicant for each unique set of GPS coordinates
where hemp will be grown, handled, stored, or processed, which can include a
field name or building name.
(25)
"Negligence" means failure to exercise the level of care that a reasonably
prudent person would exercise in complying with an administrative regulation,
rule, or instruction.
(26)
"Nonviable seed" means a seed that has been crushed, dehulled, or otherwise
rendered to have a zero percent germination rate.
(27) "Person" means an individual or business
entity.
(28) "Prohibited variety"
means a variety or strain of cannabis excluded from the Kentucky Hemp Licensing
Program.
(29) "Processing" is
defined by
KRS
260.850(9).
(30) "Program" means the department's Hemp
Licensing Program.
(31) "Propagule"
means a plant or plant part that can be utilized to grow a new plant.
(32) "Publicly marketable hemp product" means
a hemp product that meets one (1) or more of the following descriptions:
(a) The product:
1. Does not include any living hemp plants,
viable seeds, leaf materials, floral materials, or delta-9-THC content above
zero and three-tenths (0.3) percent; and
2. Does include, without limitation, the
following products: bare stalks, bast fiber, hurd fiber, nonviable roots,
nonviable seeds, seed oils, and plant extracts (excluding products containing
delta-9-THC above zero and three-tenths (0.3) percent);
(b) The product is CBD that was derived from
"hemp", as defined by subsection (16) of this section; or
(c) The product is CBD that is approved as a
prescription medication by the United States Food and Drug
Administration.
(33)
"Signing authority" means an officer or agent of the organization with written
authorization to commit the legal entity to a binding agreement.
(34) "Strain" means a group of hemp with
presumed common ancestry and identified physiological distinctions. A strain
does not meet the uniformity, stability, or distinction requirements to be
considered a variety.
(35)
"Variety" means a subdivision of a species that is:
(a) Uniform, in that the variations in
essential and distinctive characteristics are describable;
(b) Stable, in that the variety will remain
unchanged in its essential and distinctive characteristics and its uniformity
if reproduced or reconstituted as required by the different categories of
varieties; and
(c) Distinct, in
that the variety can be differentiated by one (1) or more identifiable
morphological, physiological, other characteristics from all other publically
known varieties, or other characteristics from all other publicly known
varieties.
(36) "Variety
of concern" means any variety of hemp that tests above 0.3000 percent delta
9-THC in one (1) or more pre-harvest samples. A hemp variety designated as a
"variety of concern" could be subject to restrictions and additional
testing.
Section 2.
Processor or Handler License Application.
(1)
Any person who wishes to engage in the processing, handling, brokering, or
marketing of hemp that does not fall within the definition of a "publicly
marketable hemp product" at any location in the Commonwealth shall submit to
the department a complete Processor/Handler License Application, or annual
license renewal, incorporated by reference as part of the Processor/Handler
License Application in
302 KAR
50:080.
(2) Existing processor or handler license
holders shall complete the department's requirements for license renewal by
December 31.
(3) Any person who
does not hold a grower license from the department shall not grow, cultivate,
or handle living hemp plants or other cannabis.
(4) Any person who does not hold a
processor/handler license from the department shall not process, handle,
broker, or market hemp or other cannabis that does not fall within the
definition of a "publicly marketable hemp product" at any location within the
commonwealth.
(5) A person under
the age of eighteen (18) years of age shall not apply for or hold a processor
or handler license.
(6) Application
deadlines.
(a) Completed Processor/Handler
License Application forms shall be postmarked or received by the department by
the end of the application period established in the application.
(b) Completed Processor/Handler License
Application forms shall be delivered to KDA Hemp Licensing Program, 111
Corporate Drive, Frankfort, Kentucky 40601.
(c) The department shall deny any
Processor/Handler License Application that is not received by the deadline
established in the application.
(7) The department shall require each
applicant to pay a processor or handler application fee in the amount
established in
302 KAR
50:060.
(8) Application fees shall not cover or
include the cost of the criminal background checks required by
KRS
260.862(2)(d) and Section 3
of this administrative regulation. Applicants and license holders shall pay
criminal background check fees directly to the Kentucky State Police or other
law enforcement agency.
(9) The
department shall deny any Processor/Handler License Application that is
received without the application fee established in
302 KAR
50:060.
(10) With the Hemp Processor/Handler License
Application form the applicant shall submit, at a minimum:
(a) If the applicant is an individual, the
individual's full name, residential address, telephone number, and email
address (if available); or
(b) If
the applicant is a business entity:
1. The
entity's name, Employer Identification Number, business location address in
Kentucky, and principal business location; and
2. For the individual who will have signing
authority on the entity's behalf, his or her full name, title within the
entity, business address, telephone number, and email address (if
available);
(c) Complete
and accurate responses to each request for information on the application form;
and
(d) Maps and the street
address, location ID, and GPS coordinates for each building or site where hemp
will be processed, handled, or stored.
(11) Any Processor/Handler License
Application that is missing required information shall be subject to
denial.
Section 3.
Criminal Background Check.
(1) Each licensed
processor/handler or applicant shall undergo and pay for an annual criminal
background check as required by
KRS
260.862(2)(d).
(2) A licensed processor/handler or
applicant, or key participant within an entity that is a processor/handler or
applicant, shall, following completion of the background check, ensure delivery
of the report to the department with the application or renewal.
(3) The department shall not accept a report
from a criminal background check that occurred more than sixty (60) days prior
to the date of the application.
(4)
Failure to submit the background check with the application shall be grounds
for license denial.
(5)
Substitution of a signing authority shall require approval from the department
and the submission of a current criminal background check on the substitute
signing authority.
Section
4. Application for Processor or Handler Licensing; Criteria and
Procedure for Evaluation.
(1) The department
shall apply the criteria established in paragraphs (a) through (m) of this
subsection in evaluating applications for a processor/handler license.
(a) In accordance with Section 2 of this
administrative regulation, the applicant shall submit a complete application
with all required components and attachments.
(b) An applicant who has been a program
participant previously, the applicant shall comply with the responsibility to
submit any reports required by 302 KAR Chapter 50.
(c) All involved business entities shall be
registered and in good standing with the Kentucky Secretary of State.
(d) The applicant's processing sites,
handling sites, and storage sites, shall be located in the Commonwealth of
Kentucky.
(e) The criminal
background check report indicates that, within ten (10) years from the date
when the background check was issued, the applicant shall not have:
1. A felony conviction; or
2. A drug-related misdemeanor conviction or
violation.
(f) The
applicant's planned activities shall remain compliant with state law and 302
KAR Chapter 50.
(g) The applicant
shall have adequate facilities or plans to acquire adequate facilities
sufficiently to complete the planned activities.
(h) Including those times the applicant was
not a participant in the Hemp Licensing Program, the applicant shall have
demonstrated a willingness to comply with the department's rules, instructions
from department staff, and instructions from representatives of Kentucky State
Police and other law enforcement agencies.
(i) The applicant shall not be delinquent in
making any required reports or payments to the department in connection with
the applicant's participation in the Hemp Licensing Program or other programs
within the department.
(j) The
applicant shall not have any unpaid fees, fines, or civil penalties owed to the
department.
(k) The applicant shall
not have made and shall not make any false statements or representations to a
representative of the department or a law enforcement agency.
(l) The applicant's proposed sites shall
comply with the land use restrictions established in Section 5 of this
administrative regulation. Denial of all proposed processing and handling sites
shall constitute grounds for denial of the application.
(m) The applicant shall not have had a hemp
license revoked within five (5) years previous to the date of this
application.
(2) The
department shall conditionally approve an application for a processor/handler
license if the application satisfies the criteria established in this
administrative regulation.
(3) The
department shall notify applicants by letter or email whether the application
has been denied or conditionally approved. A person shall not be a participant
in the Hemp Licensing Program until the applicant has received a hemp
processor/handler license from the department.
(4) Applicants shall pay licensing fees prior
to receiving a processor/handler license.
(5) Applicants shall complete a mandatory
orientation session at a location to be determined by the department. The
department shall not allow any person to complete orientation in lieu of the
applicant.
Section 5.
Land Use Restrictions for Licensed Processors or Handlers.
(1) A licensed processor or handler shall not
process or store leaf or floral material from hemp or other cannabis in or
adjacent to any structure that is used for residential purposes without first
obtaining written permission from the department.
(2) A licensed processor or handler shall not
apply to process, handle, or store hemp on any property that is not owned or
completely controlled by the applicant or licensed processor.
(3) A licensed processor or handler shall not
process, handle, or store hemp on property owned by, leased from, or previously
submitted in an application by any person who is ineligible or was terminated
or denied admission to the Hemp Licensing Program for:
(a) Failure to obtain an acceptable criminal
background check;
(b) Failure to
comply with an order from a representative of the department; or
(c) Both.
Section 6. Administrative Appeal from Denial
of Application.
(1) An applicant wishing to
appeal the department's denial or partial denial of an application shall submit
a written request for a hearing postmarked within fifteen (15) days of the date
of the department's notification letter or email.
(2) An appellant shall mail a hearing request
letter to KDA Hemp Licensing Program, 111 Corporate Drive, Frankfort, Kentucky
40601.
(3) Appeals shall be heard
by a three (3) person administrative panel whose members shall be designated by
the commissioner. The panel shall include at least one (1) person who is a
department employee and at least one (1) person who is not a department
employee and not involved or invested in any hemp projects in
Kentucky.
(4) The members of the
administrative panel shall not be required to accept or consider information or
documents that were not compliant with application deadlines established in
this administrative regulation.
(5)
The members of the administrative panel shall apply the same standards
established in this administrative regulation to determine if the department's
action in denying the application was arbitrary or capricious.
(6) Hearings on appeals shall be open to the
public and occur at a time and date and location designated by the
commissioner.
(7) An appellant
applicant shall appear in person at the assigned hearing time. Failure to
appear on time shall constitute grounds for dismissal of the appeal.
(8) The three (3) members of the
administrative panel shall rule on the appeal by a majority vote.
Section 7. Hemp Processor or
Handler Licenses.
(1) An applicant shall not
be a participant in the Hemp Licensing Program until the department has issued
a processor/handler license following the applicant's completion of the
department's mandatory orientation session and payment of licensing
fees.
(2) The processor/handler
license application shall establish the terms and conditions governing
participation in the Hemp Licensing Program.
(3) Failure to agree or comply with terms and
conditions established in the processor/handler license application or this
administrative regulation shall constitute grounds for appropriate departmental
action, up to and including termination of the license and expulsion from the
Hemp Licensing Program.
(4) Annual
renewal of a processor/handler license shall require the license holder to:
(a) Submit to the department an annual
criminal background check for the signing authority of record;
(b) Complete a mandatory, annual program
orientation session hosted by the department;
(c) Pay annual fees in the amount established
in
302 KAR
50:060;
(d) Update all licensed addresses, location
IDs, and GPS coordinates with the department; and
(e) Agree to comply with the policies
established in 302 KAR Chapter 50.
(5) A processor/handler license shall remain
in force as long as the license holder meets the annual renewal requirements by
December 31 of each year.
(6) A
processor/handler license may be terminated by the license holder upon thirty
(30) days prior written notice.
(7)
The department shall issue processor/handler's license numbers in accordance
with this format: "P_0001" through "P_9999."
Section 8. Processor or Handler Licensing
Fee.
(1) The licensing fee for processing
harvested hemp fiber shall be the amount established in
302 KAR
50:060.
(2) The licensing fee for processing
harvested hemp grain shall be the amount established in
302 KAR
50:060.
(3) The licensing fee for processing hemp
floral material (for example, CBD extraction) shall be the amount established
in
302 KAR
50:060.
(4) A licensed processor or handler that
processes more than one (1) harvest component (for example, fiber, grain, and
floral material) shall pay the licensing fee that is required for each
harvested component that is applicable.
(5) A handler that does not engage in
processing (for example, a seed cleaner, laboratory or dryer) shall be subject
to a licensing fee in the amount established in
302 KAR
50:060.
(6) The licensed processor or handler fee
shall be paid annually in full prior to the issuance or renewal of the
processor/handler license.
Section
9. Seed and Propagule Acquisition.
(1) A license holder intending to acquire
seeds or propagules first shall determine whether or not the variety or strain
intended for purchase is listed on the department's current Summary of
Varieties List.
(a) If the variety or strain
is listed on the Summary of Varieties List, a pre-approval from the department
shall not be required.
(b) If the
variety or strain is not listed on the Summary of Varieties List, the license
holder shall submit a New Hemp Variety or Strain Request Form along with a
certificate of analysis for that strain or variety, showing that mature plants
grown from that seed variety or strain have a floral material delta-9-THC
(measured post-decarboxylation, also referred to as total THC) content of not
more than 0.300% on a dry weight basis from an independent third-party
laboratory.
(2) A
license holder who develops a new hemp variety or strain shall submit the New
Hemp Variety or Strain Request form, prior to its use in crop
production.
(3) The department
shall not approve a New Hemp Variety or Strain Request unless the licensed
grower affirms in writing that the requested seed acquisition plan shall not
infringe on the intellectual property rights of any person and the seed or
propagule source is a current legal hemp operation.
(4) The department shall not approve a New
Hemp Variety or Strain Request if a representative of the department has
information supporting a belief that the variety or strain will produce plants
with delta-9-THC (measured post-decarboxylation, also referred to as total THC)
content of more than 0.300% on a dry weight basis.
(5) A license holder shall not buy, sell,
possess, or transfer seeds or propagules of any variety or strain designated as
a prohibited variety on the department's published summary of varieties
list.
(6) Upon request from a
representative of the department, a licensed grower or licensed processor shall
provide a distribution list showing locations where and to whom the hemp seeds
or propagules were distributed.
(7)
Any person engaging in the distribution of hemp seeds shall adhere to all
applicable Kentucky seed laws (KRS
250.010 through
250.990) and
regulations (12
KAR 1:116 through
12 KAR
1:175) .
(8) Any person who intends to move
transplants or other living plants to a location outside Kentucky shall obtain
a Class A Nursery License from the Kentucky Office of the State
Entomologist.
Section
10. Seeds of Wild, Landrace, or Unknown Origin.
(1) A person shall not acquire or grow hemp
or cannabis seeds or propagules of wild, landrace, or unknown origin without
first obtaining written approval from a representative of the
department.
(2) The department
shall not allow hemp or cannabis seeds or propagules of wild, landrace, or
unknown origin to be planted, cultivated, or replicated by any person without
the department first arranging for replication and THC testing of mature plants
grown from the seeds or propagules by the department or its designee.
(3) Any licensed grower or licensed processor
or handler found to have saved seed, propagules, or cuttings, or cultivated
seeds, propagules, or cuttings from a cannabis plant of wild, landrace, or
unknown origin, without permission from the department shall be subject to
suspension or revocation of their license and forfeiture without compensation
of their materials.
Section
11. Site Access for Representatives of the Department and Law
Enforcement Agencies.
(1) The department shall
provide information about approved growing, handling, processing, and storage
site locations to representatives of the Kentucky State Police, DEA, and other
law enforcement agencies whose representatives request licensed site location
information, including GPS coordinates.
(2) Licensed processors or handlers shall
have no reasonable expectation of privacy with respect to premises where hemp
or other cannabis seeds, plants, or materials are located and any premises
listed in the processor or handler license.
(3) A licensed processor or handler, whether
present or not, shall permit a representative of the department or a law
enforcement agency to enter into premises where hemp or other cannabis seeds,
plants, or materials are located and any premises listed in the processor or
handler license, with or without cause, and with or without advance
notice.
Section 12.
Collection and Retention of Cannabis Samples.
(1) The department may collect, test, and
retain samples of hemp or other cannabis, and substances derived from hemp or
cannabis in the possession of a licensed processor or handler.
(2) All samples collected by the department
shall become the property of the department and shall be nonreturnable.
Compensation shall not be owed by the department.
(3) The material to be collected for sampling
shall be determined by the department inspector.
Section 13. Restrictions on Sale or Transfer.
(1) A licensed processor or handler shall not
sell, transfer, or allow the sale or transfer, of living plants, viable seeds,
leaf material, or floral material to or from any person in the Commonwealth who
does not hold a license issued by the department.
(2) A licensed processor or handler shall not
sell, transfer, or allow the sale or transfer, of living plants, viable seeds,
leaf material, or floral material to or from any person outside the
Commonwealth who is not authorized to possess materials under the laws of that
jurisdiction.
(3) The department
shall permit the sale or transfer of stripped stalks, fiber, dried roots,
nonviable seeds, seed oils, cannabinoid extracts (excluding THC in excess of
zero and three-tenths (0.3) percent), and other marketable hemp products to
members of the general public, both within and outside the Commonwealth, if the
marketable hemp product's decarboxylated delta-9-THC level is not more than
zero and three-tenths (0.3) percent and is otherwise lawful and compliant with
302 KAR Chapter 50.
(4) A licensed
processor or handler selling, transferring, or allowing the sale or transfer of
floral or plant extracts (including CBD), shall conduct and retain testing data
reflecting the decarboxylated delta-9-THC level for at least three (3)
years.
(5) A licensed processor or
handler shall not sell or transfer floral extracts containing a decarboxylated
delta-9-THC concentration in excess of zero and three-tenths (0.3) percent
except that pursuant to KRS 260.8635, a licensed processor, or a person acting
as a representative of a licensed processor, may move or transport hemp extract
material having a delta-9 tetrahydrocannabinol concentration in excess of
three-tenths of one percent (0.3%) from one (1) licensed processing location in
the Commonwealth to another licensed processing location in the Commonwealth,
if:
(a) The hemp extract material shall move
directly from one (1) licensed processing location to another; and
(b) The licensed processor shall provide
written notice to the department of the planned movement at least twenty-four
(24) hours in advance by submitting to the department a completed Hemp
Concentrate Transport Notification Form.
(6) A licensed processor or handler shall
comply with the federal Food Drug and Cosmetic Act, 21 U.S.C. Chapter 9, and
all other applicable local, state, and federal laws and regulations relating to
product development, product manufacturing, consumer safety, and public
health.
(7) Any person making
human-consumable products, or substances that will be used to make
human-consumable products, shall be Good Manufacturing Practices-compliant and
permitted by the Department of Public Health within the Cabinet for Health and
Family Services.
(8) Any person
packaging a product prior to sale shall comply with the Uniform Packaging and
Labeling Regulations as established in
302 KAR
75:130.
(9) Any person packaging a hemp-derived
cannabinoid product shall comply with 902 KAR 45:190, Hemp-derived cannabinoid
products; packaging and labeling requirements.
(10) A licensed processor or handler shall
not knowingly permit hemp to be sold to or used by any person in the
Commonwealth who is involved in the manufacture of an item named on the
prohibited products list established in
302 KAR
50:070.
(11) A person shall not ship, transport, or
allow to be shipped or transported, any hemp product with a decarboxylated
delta-9-THC concentration in excess of zero and three-tenths (0.3)
percent.
(12) A licensed processor
or handler shall only purchase or receive harvested hemp plant material that
has been determined compliant and released for sale or transfer by the
appropriate hemp regulatory program in the grower's area of
jurisdiction.
Section
14. Other Requirements.
(1) A
licensed processor or handler shall not process or store hemp on any site not
listed in the processor/handler license.
(2) A person shall not convert a substance
that was extracted or derived from hemp or other cannabis into a Schedule I
controlled substance.
(3) A license
holder shall not make, manufacture, or distribute any of the prohibited
products listed in
302 KAR
50:070.
(4) A person shall not possess living hemp or
other cannabis plants without a hemp grower license.
(5) A licensed processor or handler shall not
allow another person, other than an agent of the licensed processor or handler,
to process, handle or store hemp under their license in lieu of obtaining a
separate hemp processor/handler license.
(6) Processors using hazardous materials or
flammable solvents (for example, ethanol) shall comply with the requirements of
the State Fire Marshal.
(7) Any
person owning or operating an analytical laboratory offering third-party
testing services shall report post-decarboxylated delta-9-THC on a 100% dry
weight basis.
(8) Any person owning
or operating an analytical laboratory offering third-party testing services
shall participate in the University of Kentucky's Hemp Proficiency Testing
Program.
Section 15.
Information Submitted to Department Subject to Open Records Act,
KRS
61.870 Through 61.844.
(1) Except as established in subsection (2)
of this section, information and documents generated or obtained by the
department shall be subject to disclosure pursuant to the Kentucky Open Records
Act,
KRS
61.870 through
61.884.
(2) Personally identifiable information
including physical address, mailing address, driver's license numbers,
background checks, GPS coordinates, telephone numbers, and email addresses
shall be shielded from disclosure to the maximum extent permitted by law. The
department shall provide this information to law enforcement agencies and other
regulatory agencies upon request.
Section 16. Violations Requiring Temporary
License Suspension Procedures.
(1) The
department shall notify a licensed processor/handler in writing that the
Processor/Handler License has been temporarily suspended if a representative of
the department receives information supporting an allegation that a licensed
processor/handler has:
(a) Plead guilty to, or
is convicted of, any felony or drug-related misdemeanor or violation in
accordance with
KRS
260.864;
(b) Engaged in conduct violating a provision
of
KRS
260.850 through
260.869,
302 KAR Chapter 50, or the processor/handler license with a culpable mental
state greater than negligence;
(c)
Made a false statement to a representative of the department or a law
enforcement agency with a culpable mental state greater than
negligence;
(d) Been found to be in
possession of cannabis with a measured delta-9-THC concentration above zero and
three tenths (0.3) percent with a culpable mental state greater than
negligence;
(e) Been found to be
growing hemp or cannabis without a hemp grower license with a culpable mental
state greater than negligence;
(f)
Failed to comply with an order from a representative of the department or a law
enforcement agency with a culpable mental state greater than negligence;
or
(g) Been found to be in
possession of cannabis plant material with a measured THC concentration of
3.000% or greater.
(2)
The department shall schedule a license revocation hearing for a date as soon
as practicable after the notification of temporary suspension, but in any event
not later than sixty (60) days following the notification of temporary
suspension.
(3) A person whose
processor/handler license has been temporarily suspended shall not process or
remove cannabis from the premises where hemp or other cannabis was located at
the time the department issued its notice of temporary suspension, except as
authorized in writing by a representative of the department.
(4) As soon as possible after the
notification of temporary suspension, a representative of the department shall
inspect the licensed processor/handler's premises and perform an inventory of
all cannabis, hemp, and hemp substances that are in the licensed
processor/handler's possession.
Section 17. License Revocation Hearings and
Consequences of Revocation.
(1) The department
shall notify a person whose processor/handler license has been temporarily
suspended of the date the person's license revocation hearing will occur at a
time and place designated by the commissioner.
(2) License revocation hearings shall be
adjudicated by a three (3) person administrative panel in accordance with
KRS
260.864.
(3) License revocation hearings shall be open
to the public.
(4) A person whose
processor/handler license has been temporarily suspended shall appear in person
at the assigned hearing time. Failure to appear on time shall constitute a
waiver of the person's right to present information and arguments against
revoking the processor/handler license.
(5) A representative of the department shall
have an opportunity to present information and arguments for revoking the
processor/handler license.
(6) A
person whose processor/handler license has been temporarily suspended shall be
allowed an opportunity to present information and arguments against revoking
the processor/handler license.
(7)
The three (3) members of the administrative panel shall rule on the question of
revocation by a majority vote.
(8)
If a majority of the three (3) members of the administrative panel find that it
is more likely than not that a licensed processor or handler has committed any
of the acts listed in Section 16(1) of this administrative regulation then the
processor/handler license shall be revoked effective immediately.
(9) If a majority of the members of the
administrative panel vote against revoking the processor/handler license, the
department shall lift the temporary suspension within twenty-four (24) hours of
the vote.
(10) If a majority of the
members of the administrative panel vote in favor of revoking the
processor/handler license, then a representative of the department or a law
enforcement agency shall have authority to destroy or confiscate all cannabis,
hemp, and hemp substances that are in the person's possession.
(11) A person whose property is destroyed or
confiscated by a representative of the department or a law enforcement agency
shall be owed no compensation or indemnity for the value of the cannabis, hemp,
or hemp products that were destroyed or confiscated.
(12) The department shall immediately report
any person whose license has been revoked on the grounds that he or she
violated a provision of
KRS
260.850 through
260.869,
302 KAR Chapter 50, or the processor/handler license with a culpable mental
state greater than negligence, to an appropriate law enforcement
agency.
(13) A person whose
processor/handler license has been revoked shall not be eligible for licensure
for a period of five (5) years from the date of the most recent
violation.
Section 18.
Monetary Civil Penalties.
(1) If a
representative of the department receives information supporting a finding that
it is more likely than not that a person has engaged in conduct violating a
provision of
KRS
260.850 through
260.869,
302 KAR Chapter 50, or the processor or handler license application, then the
department shall assess a monetary civil penalty based on the severity of the
violation and not to exceed $2,500 per violation.
(2) A person wishing to appeal the
department's assessment of a monetary civil penalty shall submit a written
request for a hearing within fifteen (15) days of the notification
date.
(3) A person wishing to
appeal the department's assessment of a monetary civil penalty shall mail a
hearing request letter to KDA Hemp Licensing Program, 111 Corporate Drive,
Frankfort, Kentucky 40601.
(4)
Appeals shall be heard by a three (3) person administrative panel whose members
shall be designated by the commissioner. The administrative panel shall include
at least one (1) person who is a department employee and at least one (1)
person who is not a department employee and not involved or invested in any
Kentucky hemp projects.
(5) The
members of the administrative panel shall determine if the department's action
in assessing the monetary civil penalty was arbitrary or capricious.
(6) Hearings on the appeal shall be open to
the public and occur at a time, date, and location designated by the
commissioner.
(7) An appealing
person shall appear in person at the assigned hearing time. Failure to appear
on time shall constitute grounds for dismissal of the appeal.
(8) An appellant shall be allowed an
opportunity to present arguments for reversing the assessed monetary civil
penalty.
(9) A representative of
the department shall be allowed an opportunity to present arguments for
affirming the assessed monetary civil penalty.
(10) The three (3) members of the
administrative panel shall rule on the appeal by a majority vote.
(11) A majority of the three (3) members of
the administrative panel may affirm the assessed monetary civil penalty, affirm
and increase or decrease the assessed monetary civil penalty, or reverse the
assessed monetary civil penalty.
(12) The department shall have the authority
to pursue unpaid monetary civil penalties by filing a civil cause of action in
the Franklin Circuit Court.
Section
19. Licensing for Representatives of Universities and Colleges.
(1) Except as established in this section,
faculty members, administrators, and staff members of an institution of higher
education shall be subject to all requirements of this administrative
regulation.
(2) An institution of
higher education shall not allow or authorize its faculty, administration, or
staff members, or any sponsored student, to be in possession of, or conduct
academic research involving living hemp plants, leaf material, floral material,
or viable seeds of hemp without first completing and submitting a Hemp License
Application.
(3) An authorized
faculty, administrator, or staff member of an eligible institution of higher
education who wishes to be in possession of, or conduct an academic research
project involving living hemp plants, leaf material, floral material, or viable
seeds of hemp shall complete and submit a Hemp License Application.
(4) If a university applicant's research plan
includes growing hemp, then a Hemp Grower License shall be issued.
(5) If a university applicant's research plan
does not include growing hemp, then a Hemp Processor/Handler License shall be
issued.
(6) The department shall
accept applications from an authorized faculty, administrator, or staff member
of an eligible institution of higher education at any time of the
year.
(7) The department shall not
collect fees for licenses issued to a faculty member, administrator, or staff
member of an institution of higher education if the project is for research
only and that is, not intended for commerce.
(8) Sampling and testing of hemp processed or
handled under the authority of this section shall be conducted by the
department if the harvested material is intended for commerce.
(9) An eligible institution of higher
education shall:
(a) Be accredited by, and in
good standing with, a regional or national higher education accreditation
agency;
(b) Confer academic degrees
at the associate, bachelor, master, or doctoral level; and
(c) Have a principal campus or office that is
located at a site within the Commonwealth of Kentucky.
Section 20. Corrective Action
Plans for Negligent Violations.
(1) If the
department determines that a processor or handler committed a negligent
violation of any provision within KRS Chapter 260.850 through 260.869 or 302
KAR Chapter 50, then the department shall devise and implement a corrective
action plan for the processor or handler.
(2) Corrective action plans shall remain in
place for at least two (2) years and include, at a minimum:
(a) The date by which the processor or
handler shall correct each negligent violation;
(b) Steps to correct each negligent
violation; and
(c) A description of
the procedures to demonstrate compliance.
(3) A processor or handler who commits a
negligent violation shall not, as a result of that violation, be subject to any
criminal enforcement action by any government.
(4) If a subsequent violation occurs while a
corrective action plan is in place, a new corrective action plan shall be
submitted with a heightened level of quality control, staff training, and
quantifiable action measures.
(5) A
processor or handler who commits three (3) or more negligent violations within
a five (5) year period shall have his or her license revoked and be ineligible
to obtain a license for a period of five (5) years beginning on the date of the
third violation. A violation that occurred prior to January 1, 2022 shall not
count toward the three (3) violations referred to in this subsection.
Section 21. Mandatory Reports to
Law Enforcement Agencies for Violations with a Culpable Mental State Greater
than Negligence.
(1) In addition to being
subject to the license suspension, license revocation, and monetary civil
penalty procedures established in 302 KAR 50:021 and this administrative
regulation, a person who is found by the department to have violated a
requirement of KRS Chapter 260 or 302 KAR Chapter 50 with a culpable mental
state greater than negligence shall be subject to the reporting requirements
established in this section.
(2)
The department shall immediately report a person who is found by the department
to have violated any statute or administrative regulation governing that
person's participation in the hemp program with a culpable mental state greater
than negligence to the commander of the Kentucky State Police's Cannabis
Suppression Branch.
STATUTORY AUTHORITY:
KRS
260.862;
7
U.S.C. 1639