Senate Bill 2734

AN ACT TO ENACT THE KRATOM CONTROL ACT; TO DEFINE TERMS; TO REQUIRE A STATE-ISSUED RETAIL LICENSE TO SELL KRATOM; TO REQUIRE BUSINESSES THAT SELL KRATOM TO POST SIGNAGE WITH CERTAIN CONDITIONS; TO CREATE A PROGRAM TO ENCOURAGE RESPONSIBLE VENDING; TO PROVIDE FOR ENFORCEMENT OF THE ACT; TO PROHIBIT CERTAIN ACTIONS IN THE SALE OF KRATOM; TO ESTABLISH FINES AND PENALTIES FOR VIOLATIONS OF THIS ACT; TO ESTABLISH EXCEPTIONS AND DEFENSES TO VIOLATIONS OF THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "Kratom Control Act."

SECTION 2. As used in this act, the following words and phrases have the meanings ascribed herein unless the context clearly requires otherwise:

(a) "Person" means any individual, company, limited liability company, corporation, partnership, association, joint venture, estate, trust or any other group, or combination acting as a unit, and the plural as well as the singular, unless the intention to give a more limited meaning is disclosed by the context.

(b) "Wholesaler" includes dealers whose principal business is that of a wholesale dealer, and who is known to the trade as such, who sells any Kratom to licensed retail dealers only for the purpose of resale.

(c) "Retailers" includes every dealer, other than a wholesaler as defined above, whose principal business is that of selling merchandise at retail, who sells, or offers the sale of Kratom products.

(d) "Consumer" means a person who comes into possession of Kratom products for the purpose of consuming it.

(e) "Electronic device" means any device as amended in Section 97-32-51, Mississippi Code of 1972.

(f) "Kratom products" means any product containing Kratom.

(g) "Minor" means persons under the age of twenty-one (21), as federal law states no person under the age of twenty-one (21) shall be sold Kratom products. Anyone who appears under the age of twenty-seven (27) shall present identification to verify that he or she is at least twenty-one (21) years of age.

(h) "Department" shall mean the Mississippi Department of Revenue.

SECTION 3. (1) By July 1, 2025, the department shall create and manage Kratom retail licenses for any business engaged in wholesaling or retailing Kratom products. The license issued shall be valid only for a single location. If a business for which a license has been obtained is sold or transferred, the license, after submission of an application for transfer and payment of a transfer fee of Fifty Dollars ($50.00), may be transferred to the person obtaining the control of the location, pending approval of the department or its designee. Upon transfer, the new license shall be valid for one (1) year and shall be renewed on an annual basis. If an existing business moves to a new location within the State of Mississippi, the owner must apply for a transfer according to the aforementioned process. Only one (1) transfer shall be authorized per location per year.

(2) (a) The department retains full and final authority of suspension and revocation for cause of any license issued pursuant to this section. The department may appoint a hearing commission of at least three (3) persons who may:

(i) Hear and decide all contested applications for licensing;

(ii) Hear and decide all charges against any license-holder for violations of this act;

(iii) Revoke or suspend licenses as provided for in this act; and

(iv) Levy administrative fines on license holders.

(b) No member of the hearing commission shall participate in the hearing or disposition of any application for a license or charge against a license holder or an employee of a license holder if he or she has any interest therein or is involved in the investigation.

(3) Any business that derives a source of revenue from Kratom products must register for and purchase a Kratom retail license from the department. The cost of each license shall be Two Hundred Fifty Dollars ($250.00) per location per year and shall be renewed on an annual basis. Each location shall have thirty (30) days from the date of expiration to renew its license with the department. The license shall be directly connected to the location of the business.

SECTION 4. No business shall sell or permit the sale of Kratom products in the State of Mississippi unless a clearly visible notice, which states "No person under the age of twenty-one (21) may purchase Kratom products," legibly printed in letters at least one (1) inch high, is posted at the location where Kratom products are available for purchase. All sales of Kratom products shall require legal age verification.

SECTION 5. The department shall establish and administer a program to support vendors in training employees in legal and responsible sales practices. This program shall be funded by licensing and enforcement penalties. Twenty-Five Dollars ($25.00) from each Kratom retail license permit shall be allocated to fund this program.

SECTION 6. (1) The department or its authorized designee may conduct random, unannounced inspections at locations where Kratom products are sold to test and ensure compliance with this act. Each retailer is subject to a minimum of one (1) unannounced compliance check during normal operating hours each quarter of the fiscal year. Unannounced follow-up compliance checks of all noncompliant retailers shall occur within thirty (30) days after any violation. The department or its designee will publish the results of all compliance checks annually and shall make the results available to the public upon request. Nothing in this act shall preclude law enforcement from conducting their own checks in coordination with the department or its authorized designee.

(2) The department shall establish and administer a Kratom Enforcement Fund. The department shall have authority to determine fines and licensing fees placed into this fund.

(3) The department is authorized to seize products listed on the FDA Import Alert list and assess a fine of Twenty-Five Dollars ($25.00) per unit seized.

SECTION 7. (1) Any business that does not possess a government-issued Kratom retail license shall not sell Kratom products.

(2) No business in the State of Mississippi shall:

(a) Sell Kratom products within one-thousand (1,000) feet of any school or church. Existing businesses with sales or production of Kratom products within six (6) months immediately preceding January 1, 2025, are exempt from this requirement;

(b) Hire persons under twenty-one (21) years of age to handle Kratom products; and

(c) Sell any Kratom product which appeals to minors. The department shall promulgate requirements and procedures for the safe and accurate packaging and labeling, including prohibiting the use of any images designed or likely to appeal to minors, such as cartoons, packaging that resembles popular candy brands, toys, animals or children, or any other likeness or image containing characters or phrases to advertise to minors.

SECTION 8. Any business that sells Kratom products to a minor shall be subject to the following fines and penalties:

(a) For an initial violation, Five Hundred Dollars ($500.00) shall be fined to the employee and One Thousand Dollars ($1,000.00) shall be fined to the license holder.

(b) For a second violation, One Thousand Dollars ($1,000.00) shall be fined to the employee and Five Thousand Dollars ($5,000.00) shall be fined to the license holder, and the license holder shall be sentenced to not more than two (2) weeks in county jail.

(c) For a third violation, One Thousand Five Hundred Dollars ($1,500.00) shall be fined to the employee and Ten Thousand Dollars ($10,000.00) shall be fined to the license holder, and the license holder shall be sentenced to not more than four (4) weeks in county jail and lose the Kratom retail license issued by the department for the remainder of the licensure period. After losing its license, the business may renew its license when annual renewal becomes available.

(d) Any business that sells Kratom products to a minor after losing its Kratom retail license shall incur a fine of Ten Thousand Dollars ($10,000.00) and be sentenced to not more than six (6) months in prison. All owners of the violating business shall be permanently ineligible for a Kratom retail license in the State of Mississippi.

(e) Businesses that incur more than three (3) sales to minors at the same location within a period of twelve (12) consecutive months shall surrender their Kratom retail license for that location for the remainder of the licensure period. The business may renew its license when annual renewal is available.

(f) Any person or business that violates this act shall:

(i) Remove Kratom products from the business within thirty (30) days of the violation. Failure to remove such products shall result in a two (2) week closure of the business and an inspection fee to the department, or its designee, within thirty (30) days of closure. Each Kratom product seized by the department will result in a fine of Twenty Five Dollars ($25.00), up to Five Thousand Dollars ($5,000.00); and

(ii) Not transfer a Kratom retail license to another person or business. Any person or business found in violation of this subparagraph (ii) shall incur a fine of Five Thousand Dollars ($5,000.00) and shall not be eligible to reapply for any future Kratom licenses issued by the department. The department is entitled to recover costs of any investigations, costs of action and reasonable attorney's fees.

SECTION 9. (1) Penalties in this act do not apply to minors who purchase or attempt to purchase Kratom products while under the direct supervision of employees of the city, county or state agency for training, education, research or enforcement purposes.

(2) No minor shall handle Kratom products in the course of lawful employment.

(3) Any person who reasonably relied on proof of age as described by state law shall have an affirmative defense to violation of this act.

SECTION 10. This act shall take effect and be in force from and after July 1, 2025.