Governor Kay Ivey signed HB 445 into law giving Alabama ABC Board control of consumable hemp products on Wednesday.
Effective Date
The regulations governing consumable hemp products outlined in this act shall become effective on July 1, 2025. Consumable hemp products distributed into or within the state and offered for sale and sold to consumers must comply with this chapter starting January 1, 2026. Retailers must be licensed by the Alcoholic Beverage Control Board (the board) to sell these products effective January 1, 2026.
Administering and Enforcing Authority
The Alcoholic Beverage Control Board shall administer and enforce this chapter and is authorized to adopt necessary rules for implementation.
Requirements for Compliant Consumable Hemp Product Sales
On and after January 1, 2026, consumable hemp products distributed into or within the state or offered for sale and sold at retail in the state must meet several requirements. These include:
- Certificate of Analysis (COA): The product must have a corresponding certificate of analysis issued by an independent testing laboratory that tested the batch from which the product was produced. Distributors and retailers are required to maintain and make immediately available for inspection a copy of the COA for each consumable hemp product. The COA must include specific information such as the batch number, date issued, method of analysis, product name, a scannable barcode linked to the label, cannabinoid profile (including total THC and CBD content), and a listing of all ingredients, including potential contaminants like solvents, pesticides, microbial contaminants, and heavy metals.
- Independent Testing Laboratories: Laboratories conducting testing must be accredited by a third-party body (ISO/IEC 17025:2017) and must not have a direct or indirect interest in the producer, cultivator, processor, distributor, or seller of the hemp or consumable hemp products. Testing protocols must include analysis for cannabinoid content and potency (including total THC and CBD), terpene profiles, heavy metals, chemical contamination (like residual solvents), microbials, mycotoxins, and residual insecticides, fungicides, herbicides, and growth regulators.
- Packaging: Products must be in the original sealed container as packaged by the producer. Packaging restrictions aim to protect children, prohibiting likenesses of persons, animals, or fruits that appeal to children or being modeled after brands primarily consumed by or marketed to children. Packaging must also not mislead individuals about the product's contents and must be child-resistant.
- Product Content and Serving Size:
- For beverages or edible products, one serving size may not contain more than 10 milligrams of total THC.
- For topical, sublingual, or other consumable hemp products not listed above, one container may not contain more than 40 milligrams of total THC.
- Edible consumable hemp products must be individually wrapped in single-serve packaging. One carton of edible products may not contain more than 40 milligrams of total THC.
- A beverage serving size may not exceed 12 fluid ounces or 355 milliliters. One carton of beverages may not contain more than four 12-ounce containers.
- Consumable hemp products may not contain alcohol (except as a flavoring agent) or any intoxicating compound other than cannabinoids.
- Labeling: Each container must be labeled with specific information, including:
- List of ingredients in descending order of predominance.
- A scannable barcode or QR code linked to the COA.
- Manufacture date and expiration date.
- Batch number corresponding to the COA.
- Total milligrams of THCs in the container.
- Serving size and total milligrams of THCs per serving.
- Specific warnings: keep out of reach of children, potential to fail a drug test due to THC, not safe or intended for persons under 21, not safe for pregnant or breastfeeding persons, and may impair ability to drive/operate machinery.
- Recordkeeping: Licensees must keep all records related to the purchase, sale, exchange, or receipt of consumable hemp products, including invoices and COAs, for a period of three years. The board and its agents have the right to enter licensed premises to inspect records and ascertain correctness. Failure to keep records or allow inspection is a Class C misdemeanor.
Retailer Licensing and Requirements
- Licensing: Effective January 1, 2026, consumable hemp products may only be sold by retailers licensed by the board. Applicants must file a written application and pay a nonrefundable initial filing fee of $50.
- Applicant Qualifications: Applicants with a 10% or more proprietary or financial interest in the business must be legally present in the U.S. and provide valid identification. They must consent to and undergo state and national criminal history background checks, providing fingerprints. Applicants convicted of a disqualifying offense within 10 years of applying cannot be issued a license.
- Surety Bond: Initial applicants must purchase and maintain a $25,000 surety bond payable to the board for each licensed location.
- Annual License Fee: Upon qualification, an annual license fee of $1,000 is required. Licenses are valid for the license year beginning October 1 and must be renewed annually.
- License Renewal: Renewal applications are due by August 1 annually. Licenses can be renewed with a penalty until October 20 of the following fiscal year; failure to renew by September 30 terminates the license, requiring a new application.
- License Revocation: The board can suspend or revoke licenses, including immediate suspension without a hearing in cases of imminent public danger.
- Penalties for Selling without a License: Selling consumable hemp products without a license incurs civil penalties: $5,000 for a first offense, $7,500 for a second, and $10,000 for a third offense. A third offense is also a Class C felony, and business licenses may be revoked. Unlicensed products in possession may be seized as contraband.
- Retail Establishment Guidelines:
- Generally, establishments selling consumable hemp products (other than specific pharmacy or grocery store exceptions) must be restricted to individuals 21 years of age or older and have their own dedicated public entrance.
- Such general retailers must either have a valid retail liquor license allowing off-premises consumption or only sell consumable hemp products.
- These general retailers must maintain a minimum of 500 square feet of sales and service area.
- An employee must be present in the sales and service area at all times the premises is open.
- All purchases must occur within the licensed premises.
- The retailer license must be conspicuously displayed.
- Pharmacy Sales: Topical and sublingual consumable hemp products may be sold in pharmacies licensed by the Alabama State Board of Pharmacy, provided the pharmacy obtains a retailer license from the board and complies with regulations. Sales must be made by a licensed pharmacist or supervised employee.
- Retail Food Store Sales: Consumable hemp product beverages may be sold in specific retail food stores (supermarkets, grocery stores meeting size and product criteria), provided the store obtains a retailer license. These beverages must be kept separate from nonalcoholic/children's beverages, behind glass, and demarcated by a sign.
Restrictions on Sales Methods
- Retailers may not sell consumable hemp products for consumption on the licensed premises or conduct tastings.
- Vending machines or other self-service systems are prohibited for selling consumable hemp products.
- Online sales, direct delivery, drive-through sales, and direct shipments to consumers in Alabama are strictly prohibited. A first violation is a Class A misdemeanor; subsequent violations are Class C felonies.
Age Restriction for Purchasers
Consumable hemp products may only be sold to adults 21 years of age or older. Employees must verify age using a valid driver license, military ID, passport, or state-issued identification card with a photograph and date of birth.
Penalties for Selling to Minors
Selling, attempting to sell, delivering, furnishing, or giving a consumable hemp product to an individual under 21 years of age results in penalties against the person, retailer, or employee:
- First offense: 90-day license suspension and $5,000 fine.
- Second offense: 180-day license suspension and $10,000 fine.
- Third offense: Revocation of all licenses from the board, $20,000 fine against the retailer, potential fine up to $20,000 against officers/owners with 10%+ interest, and inability to obtain licenses at any location for 36 months. No license may be issued at the violation location for one year after revocation. Individuals under 21 who attempt to purchase, purchase, consume, possess, or transport consumable hemp products, or use false identification, are subject to the same penalties as for underage drinking.
Prohibited Products
The following products are strictly prohibited in the state:
- Any smokable hemp product, including but not limited to hemp cigarettes, cigars, joints, buds, flowers, leaves, ground hemp flowers, or any product containing a cannabinoid marketed as such.
- Any product containing psychoactive cannabinoids created by chemical synthesis, modification, or conversion from another cannabinoid using non-cannabis materials. Decarboxylation using heat or light without chemical reagents/catalysts is not included in this prohibition. The sale or possession of these excluded hemp products is a Class C felony.
Excise Tax
An excise tax of 10 percent is levied on the retail sales price of consumable hemp products, in addition to other taxes. This tax is intended to be borne by the purchaser and collected by the retailer. Retailers must state the tax separately on documentation. The tax is due monthly to the board by the twentieth day for the preceding month's sales. Revenue is distributed: 90% to the State General Fund and 10% to the municipality or county where sold for enforcement purposes. This excise tax is generally in lieu of other state/local taxes on the sale of consumable hemp products, except for general retail sales tax. Unlawful hemp products found at retail establishments are subject to a 10% excise tax based on their retail value, in addition to other penalties.
Seizure and Forfeiture
Unlawful hemp products are considered contraband and may be seized without a warrant by the board, its agents, or law enforcement. Products, vessels, and receptacles kept for unlawful sale/disposition are contraband, subject to seizure and condemnation for destruction. Courts may order destruction of products involved in criminal violations upon conviction. Property and proceeds used in substantial connection with violations are subject to forfeiture. Persons from whom unlawful products are seized and destroyed may be subject to a fee covering destruction/disposal costs as hazardous waste.