AL
Alabama Senate Bill SB255

Alabama 2025 Regular Session

Alabama Senate Bill SB255 Compare Versions

Only one version of the bill is available at this time.
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11 SB255INTRODUCED
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33 SB255
44 PS18DGR-1
55 By Senators Smitherman, Coleman-Madison, Coleman, Stewart,
66 Hatcher
77 RFD: Tourism
88 First Read: 18-Mar-25
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1414 6 PS18DGR-1 03/18/2025 PMG (L) 2025-1276
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1616 First Read: 18-Mar-25
1717 SYNOPSIS:
1818 Under existing law , products that contain
1919 cannabinoids found in or derived from hemp may not be
2020 sold to minors but are otherwise not regulated.
2121 This bill would regulate the sale of products
2222 containing cannabinoids found in or derived from hemp,
2323 defined as novel cannabinoid products.
2424 This bill would require the Department of
2525 Revenue to license and regulate retailers of novel
2626 cannabinoid products.
2727 This bill would prohibit any business that sells
2828 or serves alcoholic beverages from obtaining a license.
2929 This bill would require the Department of
3030 Agriculture and Industries to approve testing and
3131 labeling requirements that each retailer must undergo
3232 before selling any given novel cannabinoid product.
3333 This bill would levy a tax of six percent on the
3434 sales price of all novel cannabinoid products.
3535 This bill would also create the Novel
3636 Cannabinoid Safety Fund and require all license fees,
3737 civil penalties, and tax proceeds be deposited into
3838 this fund and used to administer this act and otherwise
3939 protect the public from unregulated cannabinoid
4040 products.
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7070 A BILL
7171 TO BE ENTITLED
7272 AN ACT
7373 Relating to cannabinoid products; to regulate products
7474 containing cannabinoids found in or derived from hemp, defined
7575 as novel cannabinoid products; to require licensure of
7676 cannabinoid product retailers by the Department of Revenue; to
7777 require testing and labeling of novel cannabinoid products; to
7878 require the Department of Agriculture and Industries to
7979 approve testing and labeling of all novel cannabinoid
8080 products; to prohibit cannabinoid product retailers from also
8181 selling alcoholic beverages; to impose a tax on the sales
8282 price of all novel cannabinoid products; to create the Novel
8383 Cannabinoid Safety Fund and provide for distribution of the
8484 fees, civil penalties, and tax proceeds deposited into the
8585 fund; and to provide for civil penalties for violations of
8686 this act.
8787 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
8888 Section 1. The Legislature finds all of the following:
8989 (1) The sale and consumption of novel cannabinoids such
9090 as tetrahydrocannabinolic acid (THCa),
9191 delta-8-tetrahydrocannabinol (delta-8 THC), and other
9292 hemp-derived THC products have increased rapidly, leading to
9393 growing public health and safety concerns.
9494 (2) Currently, these products are largely unregulated,
9595 leading to the proliferation of potentially dangerous or
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125125 leading to the proliferation of potentially dangerous or
126126 mislabeled products being sold in convenience stores and other
127127 establishments that also sell alcoholic beverages.
128128 (3) This act seeks to create a sustainable revenue
129129 stream for the state while ensuring that novel cannabinoid
130130 products are sold in a controlled and regulated environment to
131131 prevent misuse, especially in locations where alcoholic
132132 beverages are sold.
133133 (4) The Alabama Department of Agriculture and
134134 Industries will play a crucial role in overseeing safety and
135135 regulatory compliance for cannabinoid products to safeguard
136136 consumers and strengthen the state's hemp program.
137137 Section 2. For purposes of this act, the following
138138 terms have the following meanings:
139139 (1) CANNABINOID RETAILER. Any person that sells novel
140140 cannabinoid products at retail.
141141 (2) NOVEL CANNABINOID PRODUCT. Any product containing a
142142 compound found in or derived from hemp, as defined in Section
143143 2-8-281, Code of Alabama 1975, including, but not limited to,
144144 cannabidiol (CBD), tetrahydrocannabinolic acid (THCa),
145145 hexahydrocannabinol (HHC), and any tetrahydrocannabinol (THC).
146146 Section 3. (a)(1) On and after January 1, 2026, any
147147 business seeking to sell novel cannabinoid products shall
148148 apply for a cannabinoid retailer license to the Department of
149149 Revenue, on a form prescribed by the department, along with a
150150 filing fee as determined by the department, by rule. The
151151 department may impose qualifications for applicants, including
152152 a criminal background check.
153153 (2) The licensee shall renew a license annually in a
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183183 (2) The licensee shall renew a license annually in a
184184 manner determined by the department.
185185 (3) The department may require licensees to submit the
186186 testing and labeling approvals issued by the Department of
187187 Agriculture and Industries under Section 4 annually or at
188188 other times as determined by the Department of Revenue.
189189 (b) The Department of Revenue may not issue a license
190190 to any business that at the time of application is operating
191191 pursuant to a license issued by the Alabama Alcoholic Beverage
192192 Control Board to sell at retail alcoholic beverages, whether
193193 for on-premises or off-premises consumption.
194194 (c) A business must obtain a separate license for each
195195 cannabinoid retailer location.
196196 (d) An applicant for licensure must include in the
197197 application proof that the applicant meets appropriate zoning
198198 laws and has obtained a business license, if applicable.
199199 (e) A business issued a cannabinoid retailer license:
200200 (1) Shall clearly display the license and tax
201201 registration in its premises;
202202 (2) Shall ensure that at least 80 percent of all
203203 merchandise and sales within the licensed premises consists of
204204 novel cannabinoid products; and
205205 (3) May not sell any novel cannabinoid product until
206206 the business has received approval from the Department of
207207 Agriculture and Industries that the product has been properly
208208 tested and is properly labeled as provided in Section 4.
209209 (f) The Department of Revenue, by rule, may establish
210210 additional requirements on licensees, including, but not
211211 limited to, security measures to be taken at the licensed
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241241 limited to, security measures to be taken at the licensed
242242 premises and reporting requirements.
243243 Section 4. (a) Beginning January 1, 2026, the
244244 Department of Agriculture and Industries shall establish
245245 testing and labeling requirements that must be conducted on
246246 each novel cannabinoid product prior to sale of the product in
247247 this state. A cannabinoid retailer shall submit to the
248248 department, in a form prescribed by the department, results of
249249 the testing and a copy of the label, along with a fee of
250250 twenty dollars ($20) for each novel cannabinoid product.
251251 (b) Testing must be conducted by a third-party,
252252 independent laboratory that tests the potency, purity, and
253253 safety of each novel cannabinoid product. The Department of
254254 Agriculture and Industries shall establish standards and
255255 guidelines for the testing.
256256 (c) Each novel cannabinoid product shall be labeled in
257257 a manner that states the total content of cannabinoid
258258 compounds, including total THCs, in milligrams, contained in
259259 the product on a per serving basis. The label must also
260260 include the potential health risks associated with cannabinoid
261261 use, as determined by the Department of Agriculture and
262262 Industries. The label must reflect the results revealed in the
263263 testing of the product.
264264 (d) Once the Department of Agriculture and Industries
265265 reviews the testing results and verifies that the label
266266 accurately reflects the testing results, the department shall
267267 notify the cannabinoid retailer and submit to the licensee an
268268 official approval certification. The cannabinoid retailer may
269269 then sell the product, provided the licensee shall maintain
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299299 then sell the product, provided the licensee shall maintain
300300 the testing and label approval certification on the licensed
301301 premises at all times.
302302 (e) The Department of Agriculture and Industries shall
303303 adopt rules to implement this section.
304304 Section 5. The Department of Revenue may suspend or
305305 revoke the license of a cannabinoid retailer or impose a civil
306306 penalty if the department determines that:
307307 (1) The application for licensure included false
308308 information;
309309 (2) An individual with a 10 percent or greater business
310310 interest in the licensee has been convicted of a crime
311311 relating to a controlled substance;
312312 (3) The licensee sold a product without the testing and
313313 label approval required under Section 4; or
314314 (4) The licensee violated a condition or requirement of
315315 the license as provided by rule of the Department of Revenue.
316316 Section 6. (a) In addition to all other taxes imposed
317317 by law, a tax is levied on the sales of all novel cannabinoid
318318 products sold pursuant to this act at the rate of six percent
319319 of the sales price of the novel cannabinoid product. The
320320 cannabinoid retailer licensee shall collect the tax from each
321321 customer and remit the tax to the Department of Revenue on a
322322 quarterly basis in a manner determined by the department.
323323 (b) The department shall deposit the tax proceeds into
324324 the Novel Cannabinoid Safety Fund established under Section 7
325325 and be used by the Department of Revenue to administer and
326326 enforce this act or as otherwise needed to protect the health
327327 and safety of residents of this state from products containing
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357357 and safety of residents of this state from products containing
358358 unregulated THC or other drugs.
359359 Section 7. The Novel Cannabinoid Safety Fund is
360360 established in the State Treasury. Fees, tax proceeds, and
361361 civil penalties collected pursuant to this act shall be
362362 deposited into the fund. Amounts deposited shall be budgeted
363363 and allotted in accordance with Sections 41-4-80 through
364364 41-4-96 and Sections 41-19-1 through 41-19-12, Code of Alabama
365365 1975.
366366 Section 8. (a) The Department of Revenue, in
367367 coordination with the Department of Agriculture and
368368 Industries, the Alabama State Law Enforcement Agency, and
369369 local law enforcement agencies, shall enforce this act.
370370 (b) The Department of Revenue may impose a civil
371371 penalty of up to ten thousand dollars ($10,000) against any
372372 person that sells novel cannabinoid products without obtaining
373373 a license issued pursuant to this act. The monies collected
374374 from civil penalties shall be deposited into the Novel
375375 Cannabinoid Safety Fund established under Section 7.
376376 Section 9. The Department of Revenue shall adopt rules
377377 to implement this act.
378378 Section 10. Beginning January 1, 2027, and annually by
379379 January 1 thereafter, the Department of Revenue shall report
380380 to the Legislature the number of licenses issued under this
381381 act and the total fees, tax proceeds, and civil penalties
382382 imposed under this act for the preceding calendar year. The
383383 department shall specify how the funds were used and recommend
384384 any proposed legislation relating to the regulation and sale
385385 of novel cannabinoid products.
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415415 of novel cannabinoid products.
416416 Section 11. This act shall become effective on January
417417 1, 2026, except Sections 3, 4, and 9 shall become effective
418418 July 1, 2025.
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