SB255INTRODUCED
Page 0
SB255
PS18DGR-1
By Senators Smitherman, Coleman-Madison, Coleman, Stewart,
Hatcher
RFD: Tourism
First Read: 18-Mar-25
1
2
3
4
5
6 PS18DGR-1 03/18/2025 PMG (L) 2025-1276
Page 1
First Read: 18-Mar-25
SYNOPSIS:
Under existing law , products that contain
cannabinoids found in or derived from hemp may not be
sold to minors but are otherwise not regulated.
This bill would regulate the sale of products
containing cannabinoids found in or derived from hemp,
defined as novel cannabinoid products.
This bill would require the Department of
Revenue to license and regulate retailers of novel
cannabinoid products.
This bill would prohibit any business that sells
or serves alcoholic beverages from obtaining a license.
This bill would require the Department of
Agriculture and Industries to approve testing and
labeling requirements that each retailer must undergo
before selling any given novel cannabinoid product.
This bill would levy a tax of six percent on the
sales price of all novel cannabinoid products.
This bill would also create the Novel
Cannabinoid Safety Fund and require all license fees,
civil penalties, and tax proceeds be deposited into
this fund and used to administer this act and otherwise
protect the public from unregulated cannabinoid
products.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 SB255 INTRODUCED
Page 2
A BILL
TO BE ENTITLED
AN ACT
Relating to cannabinoid products; to regulate products
containing cannabinoids found in or derived from hemp, defined
as novel cannabinoid products; to require licensure of
cannabinoid product retailers by the Department of Revenue; to
require testing and labeling of novel cannabinoid products; to
require the Department of Agriculture and Industries to
approve testing and labeling of all novel cannabinoid
products; to prohibit cannabinoid product retailers from also
selling alcoholic beverages; to impose a tax on the sales
price of all novel cannabinoid products; to create the Novel
Cannabinoid Safety Fund and provide for distribution of the
fees, civil penalties, and tax proceeds deposited into the
fund; and to provide for civil penalties for violations of
this act.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. The Legislature finds all of the following:
(1) The sale and consumption of novel cannabinoids such
as tetrahydrocannabinolic acid (THCa),
delta-8-tetrahydrocannabinol (delta-8 THC), and other
hemp-derived THC products have increased rapidly, leading to
growing public health and safety concerns.
(2) Currently, these products are largely unregulated,
leading to the proliferation of potentially dangerous or
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56 SB255 INTRODUCED
Page 3
leading to the proliferation of potentially dangerous or
mislabeled products being sold in convenience stores and other
establishments that also sell alcoholic beverages.
(3) This act seeks to create a sustainable revenue
stream for the state while ensuring that novel cannabinoid
products are sold in a controlled and regulated environment to
prevent misuse, especially in locations where alcoholic
beverages are sold.
(4) The Alabama Department of Agriculture and
Industries will play a crucial role in overseeing safety and
regulatory compliance for cannabinoid products to safeguard
consumers and strengthen the state's hemp program.
Section 2. For purposes of this act, the following
terms have the following meanings:
(1) CANNABINOID RETAILER. Any person that sells novel
cannabinoid products at retail.
(2) NOVEL CANNABINOID PRODUCT. Any product containing a
compound found in or derived from hemp, as defined in Section
2-8-281, Code of Alabama 1975, including, but not limited to,
cannabidiol (CBD), tetrahydrocannabinolic acid (THCa),
hexahydrocannabinol (HHC), and any tetrahydrocannabinol (THC).
Section 3. (a)(1) On and after January 1, 2026, any
business seeking to sell novel cannabinoid products shall
apply for a cannabinoid retailer license to the Department of
Revenue, on a form prescribed by the department, along with a
filing fee as determined by the department, by rule. The
department may impose qualifications for applicants, including
a criminal background check.
(2) The licensee shall renew a license annually in a
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84 SB255 INTRODUCED
Page 4
(2) The licensee shall renew a license annually in a
manner determined by the department.
(3) The department may require licensees to submit the
testing and labeling approvals issued by the Department of
Agriculture and Industries under Section 4 annually or at
other times as determined by the Department of Revenue.
(b) The Department of Revenue may not issue a license
to any business that at the time of application is operating
pursuant to a license issued by the Alabama Alcoholic Beverage
Control Board to sell at retail alcoholic beverages, whether
for on-premises or off-premises consumption.
(c) A business must obtain a separate license for each
cannabinoid retailer location.
(d) An applicant for licensure must include in the
application proof that the applicant meets appropriate zoning
laws and has obtained a business license, if applicable.
(e) A business issued a cannabinoid retailer license:
(1) Shall clearly display the license and tax
registration in its premises;
(2) Shall ensure that at least 80 percent of all
merchandise and sales within the licensed premises consists of
novel cannabinoid products; and
(3) May not sell any novel cannabinoid product until
the business has received approval from the Department of
Agriculture and Industries that the product has been properly
tested and is properly labeled as provided in Section 4.
(f) The Department of Revenue, by rule, may establish
additional requirements on licensees, including, but not
limited to, security measures to be taken at the licensed
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112 SB255 INTRODUCED
Page 5
limited to, security measures to be taken at the licensed
premises and reporting requirements.
Section 4. (a) Beginning January 1, 2026, the
Department of Agriculture and Industries shall establish
testing and labeling requirements that must be conducted on
each novel cannabinoid product prior to sale of the product in
this state. A cannabinoid retailer shall submit to the
department, in a form prescribed by the department, results of
the testing and a copy of the label, along with a fee of
twenty dollars ($20) for each novel cannabinoid product.
(b) Testing must be conducted by a third-party,
independent laboratory that tests the potency, purity, and
safety of each novel cannabinoid product. The Department of
Agriculture and Industries shall establish standards and
guidelines for the testing.
(c) Each novel cannabinoid product shall be labeled in
a manner that states the total content of cannabinoid
compounds, including total THCs, in milligrams, contained in
the product on a per serving basis. The label must also
include the potential health risks associated with cannabinoid
use, as determined by the Department of Agriculture and
Industries. The label must reflect the results revealed in the
testing of the product.
(d) Once the Department of Agriculture and Industries
reviews the testing results and verifies that the label
accurately reflects the testing results, the department shall
notify the cannabinoid retailer and submit to the licensee an
official approval certification. The cannabinoid retailer may
then sell the product, provided the licensee shall maintain
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140 SB255 INTRODUCED
Page 6
then sell the product, provided the licensee shall maintain
the testing and label approval certification on the licensed
premises at all times.
(e) The Department of Agriculture and Industries shall
adopt rules to implement this section.
Section 5. The Department of Revenue may suspend or
revoke the license of a cannabinoid retailer or impose a civil
penalty if the department determines that:
(1) The application for licensure included false
information;
(2) An individual with a 10 percent or greater business
interest in the licensee has been convicted of a crime
relating to a controlled substance;
(3) The licensee sold a product without the testing and
label approval required under Section 4; or
(4) The licensee violated a condition or requirement of
the license as provided by rule of the Department of Revenue.
Section 6. (a) In addition to all other taxes imposed
by law, a tax is levied on the sales of all novel cannabinoid
products sold pursuant to this act at the rate of six percent
of the sales price of the novel cannabinoid product. The
cannabinoid retailer licensee shall collect the tax from each
customer and remit the tax to the Department of Revenue on a
quarterly basis in a manner determined by the department.
(b) The department shall deposit the tax proceeds into
the Novel Cannabinoid Safety Fund established under Section 7
and be used by the Department of Revenue to administer and
enforce this act or as otherwise needed to protect the health
and safety of residents of this state from products containing
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168 SB255 INTRODUCED
Page 7
and safety of residents of this state from products containing
unregulated THC or other drugs.
Section 7. The Novel Cannabinoid Safety Fund is
established in the State Treasury. Fees, tax proceeds, and
civil penalties collected pursuant to this act shall be
deposited into the fund. Amounts deposited shall be budgeted
and allotted in accordance with Sections 41-4-80 through
41-4-96 and Sections 41-19-1 through 41-19-12, Code of Alabama
1975.
Section 8. (a) The Department of Revenue, in
coordination with the Department of Agriculture and
Industries, the Alabama State Law Enforcement Agency, and
local law enforcement agencies, shall enforce this act.
(b) The Department of Revenue may impose a civil
penalty of up to ten thousand dollars ($10,000) against any
person that sells novel cannabinoid products without obtaining
a license issued pursuant to this act. The monies collected
from civil penalties shall be deposited into the Novel
Cannabinoid Safety Fund established under Section 7.
Section 9. The Department of Revenue shall adopt rules
to implement this act.
Section 10. Beginning January 1, 2027, and annually by
January 1 thereafter, the Department of Revenue shall report
to the Legislature the number of licenses issued under this
act and the total fees, tax proceeds, and civil penalties
imposed under this act for the preceding calendar year. The
department shall specify how the funds were used and recommend
any proposed legislation relating to the regulation and sale
of novel cannabinoid products.
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196 SB255 INTRODUCED
Page 8
of novel cannabinoid products.
Section 11. This act shall become effective on January
1, 2026, except Sections 3, 4, and 9 shall become effective
July 1, 2025.
197
198
199