alternative nicotine products; regulation.

New chapters were added requiring separate licenses for distributors and manufacturers of alternative nicotine products, with strict rules on record-keeping, citizenship, and product cataloging.

Manufacturers and distributors must now maintain transaction records for three years and submit them to the department upon request.

The definition of 'Nicotine' was streamlined to remove unnecessary formatting, and new definitions for 'retailer of alternative nicotine products' and 'alternative nicotine products' were added.

The term 'Sell' was updated to include 'alternative nicotine products' in the list of regulated items.

A new 'Liquor licenses fund' was established to collect fees from alternative nicotine product licenses, with revenues deposited into this fund rather than the general fund.

Penalties for selling alternative nicotine products to minors were strengthened, including higher fines and potential felony charges for repeat offenders, and the scope of prohibited sales was expanded to include these new products.

The effective date for the new distributor and manufacturer licensing requirements was set for December 31, 2027, pending rule adoption.

New eligibility criteria were added for license applicants, including requirements for U.S. citizenship or residency for most entities and a ban on applicants with recent felony convictions.

Added a specific legal definition for 'alternative nicotine product' as any noncombustible product containing nicotine intended for human consumption, while explicitly excluding traditional tobacco products.

Created new licensing requirements for manufacturers and distributors of alternative nicotine products, effective December 31, 2027, requiring proof of insurance and compliance with federal anti-trafficking laws.

Prohibited the marketing of alternative nicotine products in containers that mimic items popular with children, such as school supplies, smartphones, headphones, clothing, toys, or food products.

Established a tiered penalty system for retailers who sell these products to minors, escalating from fines and mandatory education courses for first offenses to class 6 felonies for fourth or subsequent violations within 24 months.

Authorized the state liquor board to conduct investigations and undercover operations specifically targeting the sale or distribution of alternative nicotine products to minors.

Set the effective date for the new licensing and distribution rules for late 2027, allowing time for the department to adopt implementing rules.