Bill Summaries: H563 HEMP-DERIVED CONSUMABLES/CON SUB CHANGES. (NEW)

Printer-friendly: Click to view
Tracking:
  • Summary date: Jun 24 2024 - View Summary

    Senate amendments make the following changes to the 7th edition, as amended.

    Amendment #5 amends proposed GS 18D-105 by also prohibiting any hemp-derived consumable product intended for ingestion that is a liquid and not intended for inhalation from being sold in a package that contains more than 100 milligrams, in the aggregate, of one or more of the specified hemp-derived cannabinoids.

    Amendment #6 amends the prohibition in GS 18D-101 on knowingly, or having reason to know, selling a hemp-derived consumable product to a person under age 21, by adding the requirement a seller of hemp-derived consumable products demand proof of age from a prospective purchaser before releasing the product to the purchaser if the seller has reasonable grounds to believe that the prospective purchaser is under age 30. Requires an online seller of hemp-derived consumable products to verify a prospective purchaser’s age and use a method of delivery that requires the signature of a person at least 21 years of age before the hemp-derived consumable product is released. Also adds a prohibition on distributing hemp-derived consumable products through displays accessible to the public without the assistance of a retailer’s employee or agent other than in an establishment open only to persons age 21 or older.

    Amendment #7 expands the additional advertising restrictions under GS 18D-105 (pertaining to additional requirements and restrictions for hemp-derived consumable products) by preventing labeling such products in a way that depicts or signifies characters or symbols as candy, cereals, sweets, chips, or other food products typically marketed to persons under 21 years of age.

    Amendment #8 adds new Section 15(b), amending GS 90-88 (concerning the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Service’s authority to control certain controlled substances schedules) so that marijuana cannot be rescheduled or deleted under the NC Controlled Substances Act if it is rescheduled or deleted as a controlled substance under federal law unless the General Assembly enacts legislation.


  • Summary date: Jun 20 2024 - View Summary

    Senate amendments make the following changes to the 7th edition.

    Amendment #1 makes the following changes.

    Part IX

    Section 9

    Increases the membership of the Medical Cannabis Production Commission (Commission) under GS 90-113.118 from eleven to thirteen members by adding a pharmacist appointed by the General Assembly upon recommendation of the Speaker of the House and a medical doctor with five years’ experience practicing in an emergency room appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate. Directs that the pharmacist appointee’s term will expire on June 30 of any year evenly divisible by four and the doctor appointee’s term will expire on June 30 of any year that follows by two years a year evenly divisible by four. 

    Amendment #3 makes the following changes.

    Part I

    Section 1

    Amends the sales restriction on hemp-derived consumable products under GS 18D-101(a)(4) by changing the amount of concentration in the consumable product to .3% on a dry weight basis of delta-9 tetrahydrocannabinol (was, dry weight basis total combined). Amends the sales restriction on hemp-derived consumable products under GS 18D-101(a)(6) by adding those that are not contained in child-proof packing as a violation of statute.

    Amends the offenses involving the manufacture and distribution of hemp-derived consumable products under GS 18D-103(a)(3) by changing the amount of concentration in the consumable product to .3% on a dry weight basis of delta-9 tetrahydrocannabinol (was, dry weight basis total combined).

    Amends the testing requirement prior to distribution under GS 18D-104(b) so that cannabinoids cannot exceed a concentration of .3% on a dry weight basis of delta-9 tetrahydrocannabinol (was, .3% total combined).

    Amends the additional packing requirements under GS 18D-105(a)(2) so that the list of ingredients/allergens and analysis information can be accessed via a QR code (was, code). Specifies that vaporization under the additional inhalable product restrictions under GS 18D-105(c2) includes the heating of hemp-derived oil to release aerosolized hemp-derived cannabinoids. Requires that a license issued under Article 1 of GS Chapter 18D be annually renewed (previously, gave discretion as to annual renewal) under GS 15D-105(d).

    Part IV

    Section 6

    Changes the effective date of the act’s changes to GS 90-94 (schedule VI controlled substances) from December 1, 2024 to June 1, 2025. Specifies the provision applies to offenses committed on or after that date. 


  • Summary date: Jun 20 2024 - View Summary

    Senate committee substitute to the 6th edition adds the following content and makes conforming changes to the act's titles.

    Part IX

    Enacts new Article 5H to GS Chapter 90, to be cited as the "NC Compassionate Care Act," requiring the Department of Health and Human Services (DHHS) to issue "registry identification cards" to persons who qualify as qualified patients or designated caregivers under the Article’s provisions. Sets forth legislative findings, the purpose of the Act, and defined terms for the Article.  

    Establishes an 11-member Compassionate Use Advisory Board (Advisory Board), consisting of seven gubernatorially appointed members and four legislatively appointed members, appointed for up to two four-year terms. States member qualifications. Provides for meetings, vacancies, and member expenses. Grants the Advisory Board authority to approve adding a debilitating medical condition to those defined by the Article by majority vote of members present and voting, and requires the Advisory Board to meet at least twice per year to review petitions and add debilitating conditions. Requires initial appointments to be made within 45 days of the date the act becomes law and staggers initial terms. 

    Sets standards for physicians issuing written certification of debilitating medical conditions under the Article. Requires physicians to complete a ten-hour continuing medical education course on prescribing cannabis and an annual three-hour supplemental medical education course thereafter. Requires maintaining records of compliance for six consecutive years with permitted inspection by the Department of Health and Human Services (DHHS) or the NC Medical Board or its agents. Establishes a requirement for physicians to register written certifications in the medical cannabis registry database electronically, and limits issuance to patients with whom the physician has a bona fide physician-patient relationship. Includes patient screening and patient education requirements. Requires physicians to have a physical office in the state to conduct in-person exams. Requires physicians to reevaluate patients as needed to determine the efficacy of the use of cannabis as a treatment for the patient's medical condition, at least quarterly in the first year and annually thereafter, with the Medical Cannabis Production Commission (Commission, as established below) authorized to set shorter reevaluation intervals or in-person exam requirements. Sets requirements for checking patients' prescription history. Requires physicians to update the medical cannabis registry database within 48 hours after any change is made to the original written certification. Charges DHHS with monitoring written certifications and referring cases to the NC Medical Board or SBI as appropriate. Requires DHHS, upon request, to provide information in the medical cannabis registry database to the North Carolina Medical Board (Medical Board). Prohibits physicians from evaluating patients on the site of a medical cannabis center and from advertising their ability to issue written certifications. Prohibits physicians who provide written certifications from being employed by or have any direct or indirect economic interest in a supplier or independent testing laboratory, or profiting from a patient obtaining a written certification, aside from visit fees. Authorizes the Commission to adopt rules regarding physicians and the issuance of written certifications. 

    Specifies criteria and procedures for DHHS’s issuance or renewal of registry identification cards. Provides for limited issuance of registry identification cards to minors. Details required card information; notice requirements for information changes; and DHHS’s authority to deny, suspend or revoke cards. Directs DHHS to adopt implementing rules and to establish requirements for card issuance that include six specified components, which must include setting a limit on the number of written certifications a physician may issue; requires adoption within 270 days of the date the act becomes law. Requires registry identification cardholders or supplier registry identification cardholders to carry the card(s) and valid identification whenever the cardholder is carrying cannabis or cannabis-infused products. Also requires a cardholder approached or addressed by an officer to display both the registry identification card/supplier registry identification card and valid identification.  

    Requires DHHS to create a secure, confidential, electronic medical cannabis registry database of all qualified patients and designated caregivers to whom DHHS has issued cards, consisting of the name, address, and photo of the cardholder; the name, address, and hospital affiliation of the physician that issued the respective written certification; a photo of the cardholder; the adequate supply of cannabis or cannabis-infused product prescribed to the cardholder; and the prescribed delivery method for the cannabis or cannabis-infused product for the cardholder. Allows law enforcement to contact DHHS to confirm a cardholder's identity if the law enforcement agency is unable to verify the registry identification cardholder by using the medical cannabis verification system. Deems card applicants’ information confidential and not public record, with limited exceptions for authorized DHHS employees and law enforcement. Makes it a Class 2 misdemeanor for any person (including a State or local employee) to breach confidentiality of such protected information, punishable by a civil penalty of up to $1,000. Specifies that the provisions do not prevent DHHS from notifying law enforcement of falsified or fraudulent information submitted with a card application.  

    Establishes the 11-member Medical Cannabis Production Commission (Commission) with oversight of medical cannabis supplier licensing and licensee discipline. Requires approval of licensee applications upon recommendation by DHHS, as described, by majority vote of members present and voting. Details Commission membership with some members appointed by the Governor and legislature, terms, leadership, vacancies, removal, quorum, and member expenses. Details disciplinary authority. Gives the Commission the power to approve applications for medical cannabis supplier licenses upon recommendation of DHHS by a majority vote of those present and voting. Details DHHS’s process for evaluation of applications and referral to the Commission. Limits number of licenses that can be approved by the Commission to ten.  Limits the amount of medical cannabis centers owned by each supplier to not more than eight. Suppliers must also operate at least one medical cannabis center in a Tier 1 county (i.e., the 2024 County Tier Designations published by the Department of Commerce according to the specified statute). Requires that the Commission must also consider the following criteria in awarding licenses: (1) requires giving priority to any supplier who commits to establishing a medical cannabis center in more than one Tier 1 county and (2) requires giving priority to a supplier who commits to establishing the eight allowed medical cannabis centers in a way that demonstrates a commitment to ensuring the equitable distribution of medical cannabis centers throughout the State in order for registry ID card holders to access an adequate supply of cannabis and cannabis-infused products, while preventing an overconcentration of medical cannabis centers in any one area (allows considering county population in making this determination).

    Gives the Commission, in consultation with the NC Medical Care Commission, the authority to adopt implementing rules to establish qualifications and requirements of licensure, for production by a supplier, and for proper regulation of medical cannabis centers and cannabis product facilities operated by suppliers; ensure equitable distribution of medical cannabis centers across the State; and establish civil penalties for minor violations. Includes member disqualifications concerning conflicts of interest as an owner or employee of a licensed medical cannabis supplier or testing lab, or as a qualified patient, a designated caregiver, or physician issuing written certifications. Adds that the rules become effective when adopted and pursuant to the provisions of GS Chapter 90. Requires initial appointments to be made within 45 days of the date the act becomes law and staggers initial terms.  

    Directs the Commission to establish a medical cannabis supply system to provide a safe, regulated supply of cannabis appropriate for medical use by qualified patients that are valid cardholders; ensure statewide access to safe and affordable cannabis to cardholders; establish a system that is well-regulated and financially viable; and to generate revenue sufficient for the Commission to verse and DHHS to maintain and operate the system. Directs the Commission to adopt regulatory rules that consist of at least 14 specified components, such as security, sanitation, storage and transportation requirements. Directs the Commission to establish, maintain, and control a computer software tracking system that traces cannabis from seed to sale and allows real time, 24-hour access by DHHS, the Commission, and any State or local enforcement agency to data from all production facilities, medical cannabis centers, and testing labs. Details further requirements of the tracking system. Explicitly requires medical cannabis suppliers to use the tracking system or integrate its own system with the system established by the Commission. Authorizes the Commission to contract to establish the tracking system, so long as the vendor does not have a direct or indirect financial interest in a medical cannabis supplier or testing lab. Allows for legislative appropriations to establish the system, but states the NCGA's intent that the operation be funded by authorized fees.  

    Establishes criteria for licensing medical cannabis suppliers to (1) grow, cultivate, produce, or sell cannabis or cannabis-infused products; (2) operate a business to produce cannabis or cannabis-infused products; or (3) establish or operate a medical cannabis center for the sale of cannabis, cannabis-infused products, and paraphernalia relating to the administration of cannabis to qualified patients and designated caregivers who hold valid registry identification cards. Requires suppliers to begin cultivation within 120 days of receiving a license and begin selling cannabis or cannabis-infused products in medical cannabis centers within 270 days of initiating cultivation. Includes criminal history check requirements. Specifies licensure disqualifications, including being less than 21, or having served a sentence of any of the listed felonies within the previous five years. States sales and supply restrictions of licensees. Establishes monthly fees and reporting requirements for licensees. Authorizers DHHS to impose fines of up to $10,000 on suppliers for certain enumerated violations, including improperly disclosing confidential patient information or failing to maintain required records. Authorizes the Commission to require financial audits at cost to the supplier. Provides for criminal immunity for licensed medical cannabis suppliers and their employees, agents, or principal, as specified, excluding conduct described in four instances, such as delivering cannabis to and individual that the person knows is not a qualified patient or designated caregiver or a licensed provider.  

    Provides civil and criminal immunity for a registry identification cardholder for purchasing or possessing cannabis for medical use if the quantity does not exceed an "adequate supply" for the patient as determined by their physician and the cannabis or cannabis-infused product is contained in packaging bearing the label required by GS 90-113.132. Adequate supply is defined by the act as an amount, as determined by the qualified patient's physician, of usable cannabis derived solely from an intrastate source that is possessed by a qualified patient, or collectively possessed by a qualified  patient and the qualified patient's designated caregiver, in an amount that does  not exceed what is reasonably necessary to assure the uninterrupted availability of cannabis for a period of 30 days, in any form recommended by the qualified patient's physician for the purpose of alleviating the symptoms or effects of the qualified patient's debilitating medical condition. Provides for exclusion of the weight of other ingredients infused or added to cannabis for consumption or use by a qualified patient in determining whether the patient is in possession of an amount that exceeds the patient's adequate supply. Prohibits law enforcement from considering a qualified patient or designated caregiver’s possession or use differently than any other lawful possession or use of a controlled substance so long as the possession or use complies with the Article.  

    Specifies that the new Article does not authorize a registry identification cardholder to engage in the smoking of cannabis or the vaping of cannabis for medical use in seven places identified by the act, including (1) in a public place or a place open to the public, (2) in any place of employment, (3) in a vehicle, or (4) in or within 1,000 feet of the property line of a church, child care facility, public school or nonpublic school, community college or UNC facility or grounds. Provides further specifications relating to smoking or vaping near a child care facility or community college or UNC facility or grounds. Makes smoking or vaping cannabis in violation of these prohibitions an infraction punishable by a fine of up to $25. 

    Makes it a Class G felony to manufacture, sell, deliver, or possess with intent to manufacture, sell, or deliver cannabis in violation of this Article at a medical cannabis center or production facility. Makes it a Class H felony to create, sell, deliver, or possess with intent to sell or deliver counterfeit cannabis in violation of this Article at a medical cannabis center or production facility. Makes it a Class A1 misdemeanor to possess an amount of cannabis up to 1 1/2 ounces in violation of this Article, at a medical cannabis center or production facility. Makes it a Class H felony to possess an amount of cannabis that exceeds 1 1/2 ounces in violation of this Article, at a medical cannabis center or production facility. Makes it a Class 1 misdemeanor to provide DHHS with false or misleading information in relation to a registry identification card or license. Makes it a Class I felony for any person who has been issued a valid registry identification card who is found to be in possession of cannabis in violation of this Article. Adds that if a person is convicted of a violation of GS 90-95(h)(1) (trafficking in marijuana), and it is found that the offense was committed at a medical cannabis center or production facility or with cannabis from a medical cannabis center or production facility, then the person must be sentenced at a felony class level one class higher than the principal felony for which the person was convicted, and an additional 12 months will be added to the mandatory minimum sentence. Prohibits sentencing at a level higher than a Class C felony. Requires an indictment or information for the felony to allege the facts that qualify the offense for an enhancement under this provision. Provides that one pleading is sufficient for all felonies that are tried at a single trial. Makes it a Class 3 misdemeanor to possess cannabis or a cannabis-infused product, other than in a closed retailer’s container as packaged, in a passenger compartment of a vehicle in a public vehicular area or on a public street or highway. Makes it a Class 2 misdemeanor to enter or attempt to enter a licensed medical cannabis center where cannabis or a cannabis-infused product is sold, or to obtain or attempt to obtain cannabis or a cannabis-infused product, or to obtain or attempt to obtain permission for such a purchase, by using or attempting to use a fraudulent or altered registry identification card. Specifies that these new penalties can be imposed in addition to any other penalties provided by law. 

    Requires DHHS to establish a web-based verification system allowing DHHS personnel, State and local law enforcement personnel, and medical cannabis centers to enter a registry identification card number to determine whether the number corresponds with a current, valid registry identification card. Limits the information that the system may disclose to eight specified items. Specifies who may have access to the system. Requires before cannabis or cannabis-infused products are dispensed to a registry identification cardholder that a medical cannabis center employee access the system and determine that: (1) the registry identification card presented at the medical cannabis center is valid; (2) each person presenting a registry identification card is the person identified on the card; (3) the amount to be dispensed would not cause a qualifying patient to exceed the limit on obtaining no more than an adequate supply of cannabis or cannabis-infused products during any thirty-day period; (4) the cannabis to be dispensed complies with the delivery method; and (5) after making the determinations required in (3), but before dispensing cannabis or cannabis-infused products to a registry identification cardholder, a medical cannabis center employee must enter specified information into the system on the amount of the product, who it is dispensed to, date and time it is to be dispensed, and the dispensing center’s registry identification number. 

    Requires DHHS to perform annual inspections of the premises of licensees, including any production facility or medical cannabis center. Establishes security measures and inspection requirements of suppliers, production facilities, and medical cannabis centers, including requiring suppliers to implement security measures adopted by the Commission in consultation with the SBI, and subjecting production facilities and medical cannabis centers owned and operated by a supplier to random inspection by DHHS and the SBI in accordance with rules adopted by the Commission.  

    Establishes hour, location, and age restrictions for medical cannabis centers. Prohibits licensed medical cannabis centers from selling cannabis or cannabis-infused products between 7:00 p.m. and 7:00 a.m. Bars locating a medical cannabis center within 1,000 linear feet of the property line of a church, child care facility, public school or nonpublic school, or community college or UNC facility or grounds. Limits entry to individuals who are qualified patients, designated caregivers, and persons whose job duties require their presence in the medical cannabis center. Requires employees to be 21 or older. Prohibits consuming cannabis or cannabis-infused products on the site of the medical cannabis center. Prohibits cannabis, cannabis-infused products, and paraphernalia from being visible to the public from the outside of the medical cannabis center. Authorizes the Commission to establish rules to allow the delivery of cannabis, cannabis-infused products, and paraphernalia used to administer cannabis products by medical cannabis centers to the home of a qualified patient or designated caregiver. 

    Requires DHHS to establish standards for and license up to five independent testing labs to test cannabis and cannabis-infused products that are to be sold in this State. Requires an independent testing lab to analyze a representative sample before the sale or transfer to a medical cannabis center by a production facility; requires the lab to report the results of all required testing to DHHS and the Commission. Makes an independent testing lab responsible for selecting, picking up, and testing samples. Requires DHHS to adopt rules to establish certain standards related to testing, lab licensing, and lab fees, as well as remedial actions that may be taken for samples which do not meet the established standards. Includes disqualifications for owners or employees of a supplier, production facility, or medical cannabis center. 

    Establishes advertising restrictions as follows. Requires the production facility or medical cannabis center logo, advertising, and signage to be tasteful, respectful, and medically focused; prohibits it from appealing to minors or containing cartoon-like figures or attempts at humor. Prohibits suppliers from using marijuana leaves or cannabis slang on their signs, logos, packaging or structures, as well as prohibiting the use of neon in signs, logos, packaging, or on structures. Requires suppliers to submit logos or signs to DHHS for review. Requires medical cannabis centers to only use signs that include its name, logo and hours of operation. Establishes prohibited advertisements by suppliers and centers, such as distributing handbills in public areas. Authorizes the Commission to take action against a licensee or retailer who engages in nonconforming signage or advertising. Establishes parameters for medical cannabis center websites. Requires production facilities and medical cannabis centers owned and operated by a supplier to have a discreet, professional appearance compatible with existing commercial structures or land uses in the immediate area. Requires DHHS to consult with the Commission to adopt rules to define and monitor standards for centers’ names, signage, and logo. 

    Requires suppliers to safely package and accurately label cannabis or cannabis-infused products and requires items sold at a medical cannabis center to be properly labeled and in child-resistant packaging. Prohibits labels from including strain names and requires labels to include at least 10 specified items, including the name of the medical cannabis center, the percentage of tetrahydrocannabinol and the percentage of cannabidiol within a profile tolerance range of 10%, and the length of time it takes for the product to take effect. Requires cannabis products to be placed in child-resistant packaging before leaving the medical cannabis center. Requires DHHS to adopt rules that accomplish three specified objectives, including establishing restrictions on the forms and appearance of edible cannabis-infused products in order to reduce their appeal to minors. 

    Requires the destruction and disposal of (1) production center cannabis by-product, cannabis scrap, and harvested cannabis not intended for distribution to a medical cannabis center or independent testing lab, and (2) cannabis and cannabis-infused products that are not sold to qualifying patients by medical cannabis centers. Requires keeping documentation of the destruction or disposal for at least one year and requires a record of the date of destruction and the amount destroyed. Requires a medical cannabis center to also destroy all unused cannabis products that are returned to the center by a formerly qualifying patient who no longer qualifies or by the former qualifying patient’s caregiver. 

    Expresses legislative intent that the NC Collaboratory undertake scientific research regarding the administration of cannabis or cannabis-infused products as a part of medical treatment and directs the Collaboratory to create the North Carolina Cannabis Research Program. Details parameters for the research and includes immunity for the Collaboratory and its partners to possess, transport, test, and dispose of cannabis within the scope of its research. 

    Establishes the North Carolina Medical Cannabis Program Fund within DHHS to ensure there are funds to carry out DHHS’s responsibilities under this Article. Requires revenues in excess of the amount needed to implement, administer, and enforce the Article to be distributed to the General Fund annually. 

    Appropriates system revenues from license fees and monthly revenue fess to the Commission, with three authorized uses, with priority to costs associated with establishing and operating the regulated medical cannabis supply system. Provides for revenues in excess of the authorized uses to be annually transferred to the General Fund. 

    Requires DHHS, in consultation with the Commission and Advisory Board, to report annually on the effectiveness of the medical cannabis program and any recommended changes. Sets out nine items that must be included in the report, while protecting the identity of specified individuals and entities. Requires the report to be submitted to the specified NCGA committees annually by October 1, beginning in the first year in which cannabis or cannabis-infused products are sold in medical cannabis centers. Authorizes DHHS to develop surveys for qualified patients, and the Commission to require completion of the survey by the patients. 

    Provides for construction of the Article. Provides a severability clause.  

    Amends GS 105-164.13 to exempt from sales tax cannabis or cannabis-infused products sold by a medical cannabis center to a registry identification cardholder. 

    Amends GS 106-121 (definitions under Food, Drugs, and Cosmetics Act) to exclude cannabis and cannabis-infused products manufactured by a production facility or sold by a medical cannabis center from the definition of the terms drug and food. 

    Effective December 1, 2024, amends GS 15A-974, regarding the exclusion or suppression of unlawfully obtained evidence. Adds new subsection (a1) to bar the suppression of evidence obtained as the result of a search that was supported by probable cause at the time of the search solely on the basis that either: (1) a subsequent determination that a substance believed to be a controlled substance at the time of the search was not a controlled substance; or (2) a subsequent determination that the presence of a controlled substance at the time of the search was not a violation of law. Applies to motions filed on or after December 1, 2024.

    Amends GS 90-87 to exclude from the defined term marijuana, an adequate supply of cannabis for medical use in compliance with new Article 5H. 

    Makes conforming changes to GS 90-94.

    Part X

    Adds new GS 90-12.8 requiring a practitioner to do the following when prescribing a Schedule II controlled substance as medication: (1) provide information regarding all of the following to each patient receiving the prescription: the potential dangers of opioids, overdose prevention, and the availability and use of a drug approved by the federal Food and Drug Administration as an opioid antagonist for the complete or partial reversal of opioid-induced respiratory depression; (2) provide this information to one or more persons designated by the patient receiving the prescription or, for minors, to the minor's parent, guardian, or person standing in loco parentis. Defines practitioner as: (1) a physician, dentist, optometrist, veterinarian, scientific investigator, or other person licensed, registered or otherwise permitted to distribute, dispense, conduct research with respect to or to administer a controlled substance so long as such activity is within the normal course of professional practice or research in this State or (2) a pharmacy, hospital or other institution licensed, registered, or otherwise permitted to distribute, dispense, conduct research with respect to or to administer a controlled substance so long as such activity is within the normal course of professional practice or research in this state.

    Requires pharmacists to do the following when dispensing a Schedule II controlled substance: (1) provide the information described above in electronic or paper form and (2) post signage in conspicuous place containing the information described above.

    Specifies that nothing in this statute creates a private right of action against a practitioner who fails to follow the statute's requirements, or limits a practitioner's liability for negligent diagnosis or treatment of a patient, as allowed under applicable State or federal law.

    Exempts practitioners providing hospice services and veterinarians engaged in veterinary medicine at a specified location from the provisions of the act.

    Effective December 1, 2025.

    Part XI

    Specifies that prosecutions for offenses committed before the effective date of the act are not abated or affected by the act, and the statutes that would be applicable but for the act remain applicable to those prosecutions.

    Contains a severability clause. 

     


  • Summary date: Jun 19 2024 - View Summary

    Senate committee substitute to the 6th edition is to be summarized. 


  • Summary date: Jun 18 2024 - View Summary

    Senate committee substitute to the 5th edition makes the following changes.

    Amends the act's long title. 

    Adds new article 5K (Hemp-Derived Consumable Products Tax), which imposes an excise tax of 10.5% on the retail sale of a hemp-consumable product (defined) in addition to any other applicable federal, State, or local tax, to GS Chapter 105. Directs that the tax is intended to be passed on to and borne by the purchaser of the hemp-derived consumable product. Specifies that the tax is recoverable by the retailer in the same manner as other debts. Requires hemp-derived consumable products retailers to register with the Department of Revenue (DOR). Requires the non-assignable certificate of registration to be displayed at each retailer's place of business. Specifies that a registration is valid unless (1) it is revoked for failure to comply with the provisions of Article 5K or (2) it becomes void if, for a period of eighteen months, the person files no returns or files returns showing no sales. Provides for revocation of the certificate for failure to comply with Article 5k. Provides for notice, opportunity for objection, and review of allegations in those matters. Directs that the tax be collected and administered in the same manner as State sales and use taxes. Applies the provisions of GS Chapter 105 Article 9 (administration) that are not inconsistent with new Article 5K, including administration, auditing, making returns, promulgation of rules and regulations by the Secretary of Revenue, additional taxes, assessments and assessment procedure, imposition and collection of taxes and the lien thereof, and penalties, to new Article 5K. Directs that the exemptions and refunds allowed in GS Chapter 105's provisions pertaining to sales and use taxes do not apply to sales that the State cannot constitutionally tax. Effective July 1, 2025, and applies to sales occurring on or after that date. 


  • Summary date: Jun 13 2024 - View Summary

    Senate committee substitute to the 4th edition makes the following changes.

    Makes organizational changes. Amends the act’s titles.

    Part I

    Narrows the scope of new GS Chapter 18 to regulate only hemp-derived consumable products (Product[s]). Removes Article 2, pertaining to regulation of Kratom products from the act, and makes conforming changes throughout. Increases the legal age to give, possess, purchase, or sell Products to 21 and over (was, 18 and over) and makes conforming changes throughout GS Chapter 18D to reflect the new age requirement.

    Adds new terms exit packaging and producer to GS 18D-100 (definitions). Amends term hemp-ingested consumable product.

    Expands the sales restrictions on Products under GS 18D-101 to include prohibiting knowingly, or having reason to know: (1) selling a Product that is not contained in an exit package, (2) selling at retail or on an internet website offering delivery in this state a Product that is not in compliance with GS 18D-105 (additional restrictions and requirements pertaining to hemp-derived consumable products), (3) selling at retail hemp flower or a product containing hemp flower that is not accompanied by a certificate of analysis issued within the previous six-month period demonstrating that the hemp flower or product containing hemp flower has a concentration of no more than 0.3% on a dry weight basis of delta-9 tetrahydrocannabinol. Amends the civil penalties to now require that the Department of Revenue (Department) impose the listed civil penalties for a third violation and subsequent violations committed within three years of the first violation (was, Department may impose those civil penalties). Requires the Department to impose monetary penalty and revoke the seller’s license for fourth or subsequent violations committed within three years of the first violation (was, Department could either suspend or revoke the license). Makes the second violation of knowingly or having reason to know selling Products without a valid license a Class A1 misdemeanor (was, subsequent violation). Designates subsequent violations of selling Products without a license after the second violation a Class H felony. Makes technical changes.

    Adds new GS 18D-101A (sales and transfer restrictions on a producer), preventing a producer from knowingly selling or in any way transferring hemp that  has been processed or prepared with the intent to be used in a Product to any person or entity other than a manufacturer licensed pursuant to GS Chapter 18D.  Provides for mandatory civil penalties ranging from up to $500 for the first violation and $2,000 for fourth or subsequent violations. Directs that the civil penalties be remitted to the Civil Penalty and Forfeiture Fund. Makes second violations of GS 18D-101A a class A1 misdemeanor and a Class H felony for third or subsequent violations. Specifies that GS 18D-101A does not prevent a producer from selling or transferring hemp that is intended to be used in any lawful product other than those regulated by GS Chapter 18D.

    Amends GS 18D-102 to remove provision allowing sale of Product to an underaged person with parental consent. Also makes it illegal to possess a Product. Amends the testing requirements prior to distribution under GS 18D-104 to require testing prior to distribution to a distributor or before distributing the product to a seller. Specifies that if the Product is packaged in a manner that may be sold to the ultimate consumer of the Product when delivered to the distributor and the distributor does not open such package, the distributor is not required to test the Product. Otherwise, the distributor must have the Product tested prior to distribution.

    Increases the applicability of the advertising restrictions in GS 18D-105 to also apply to sellers of Product. Makes clarifying change to definition of non-liquid ingestible product restrictions and changes limit of listed Products to 25 milligrams (was, 3 milligrams). Specifies that liquid ingestible product restrictions (any Product intended for ingestion that’s liquid and not intended for inhalation) cannot be sold in a serving that contains more than 10 milligrams, in the aggregate, of one or more four listed hemp-derived cannabinoids. Specifies that inhalable product restrictions (any Product intended for inhalation) cannot be sold in a container that contains more than 3 milligrams, in the aggregate, of one or more four listed hemp-derived cannabinoids.

    Adds new GS 18D-105.2 (safe harbor provisions) exempting safe harbor hemp products and safe harbor manufacturers or storage facilities from Article 1 of GS Chapter 18D. Defines safe harbor hemp product as a hemp-derived compound or cannabinoid, whether a finished product or in the process or being produced, permitted to be manufactured for distribution, produced for distribution, packaged for distribution, processed for distribution, prepared for distribution, treated for distribution, transported for distribution, or held for distribution in North Carolina for export from North Carolina but that is not permitted to be sold or distributed in North Carolina. Defines safe harbor manufacturer or storage facility as a facility that manufactures for distribution, produces for distribution, packages for distribution, processes for distribution, prepares for distribution, treats for distribution, transports for distribution, or holds for distribution a safe harbor hemp product.

    Extends the licensing deadline under GS 18D-301 for persons or entities regulated by GS Chapter 18D from July 1, 2024, to July 1, 2025. Increases the legal age to obtain and maintain a license from 18 and over to 21 and over. Increases the licensing fee under GS 18D-302 for Product manufacturing applicants making less than $100,000 in the calendar year prior to submitting the application from $5,000 to $15,000. Increases the license fee for Product retail or online sellers from $100 to $250 for each location or internet website offering delivery. Increases the aggregate limit for sellers with more than 25 locations from $2,500 to $5,000. Increases the manufacturing license renewal fee from $1,000 to $5,000.

    Grants Alcohol Law Enforcement Division (ALE Division) agents the authority under GS 18D-400 to investigate the operation of each licensee under GS Chapter 18D and each licensed premises for which a license has been issued, to make inspections that include viewing the entire premises, including the examination of records, equipment, and proceeds related to the manufacture or distribution of hemp-derived consumable products to procure evidence for violations of GS Chapter 18D. Specifies that the inspection may be made at any time it reasonably appears that someone is on the premises. Specifies that refusal by a licensee or by any employee of a licensee to permit ALE Division agents to enter the premises to make an inspection is cause for suspension, revocation, or other action against the licensee. Designates it a Class 2 misdemeanor for any person to resist or obstruct an agent attempting to make a lawful inspection under GS 18D-400. Extends deadline for the ALE Division’s initial annual report to the NCGA by one year. Makes technical and organizational changes.  

    Authorizes and empowers law enforcement officers under GS 18D-401 to seize and take possession of Products subject to forfeiture (previously had to apply to court for court order to seize and order could only be issued after criminal process initiated). Limits the forfeiture provisions after criminal trial in GS 18D-401(c) to trials for selling Products without a license (was, without a license and knowingly selling Product that has a concentration of more than .3% on a dry weight basis total combined of delta-9 tetrahydrocannabinol). Directs that knowingly selling Product that has a concentration of more than .3% on a dry weight basis total combined of delta-9 tetrahydrocannabinol is subject to forfeiture under GS 75D-5 (RICO civil forfeiture). Specifies that a judge operating under GS 18D-401 can order the product destroyed, civil RICO forfeiture provisions notwithstanding. Makes organizational and technical changes.

    Amends GS 18D-500 by giving ALE agents authority to arrest and take investigating and enticement actions for criminal offenses encountered while investigation or enforcing provisions of GS Chapter 18D.

    Extends the effective date by one year. 

    Part II

    Extends the effective date of the repeal of GS 90-94.1 by one year.

    Part III

    Delays the appropriation until the 2024-25 fiscal year and delays the effective date by one year.

    Part IV

    Amends the proposed changes to Article 29A of GS Chapter 115C concerning prohibitions on tobacco, hemp-derived consumable, and Kratom products by no longer including Kratom products. Makes conforming deletions in GS 115C-218.75, GS 115C-238.66, GS 115C-150.12C, GS 116-239.8, and SL 2018-32, Section 6(d).

    Amends proposed GS 115C-407.1 to also require public school governing bodies to adopt written policies prohibiting the use of hemp-derived consumable products on school buses or school transportation service vehicles. Makes the same changes to policies for charter schools (GS 115C-815.75), regional schools (GS 115C-238.66), schools for deaf and blind students (GS 115C-150.12C), and laboratory schools (GS 116-239.8).

    Changes the section’s effective date so that it is applicable beginning with the 2025-26 (was, 2024-25) school year.

    Part V

    Makes organizational changes by moving the provision concerning prosecutions for offenses committed before this act’s effective date, severability clause, and effective date provision to the end of the act.

    Adds the following new content.

    Part VI

    Amends GS 90-90 by adding Tianeptine to the opiates and opioids that are Schedule II controlled substances.

    Amends GS 90-91 by adding Xylazine to the depressants that are Schedule III controlled substances.

    Amends GS 90-94 by adding Kratom to Schedule VI controlled substances. Specifies that Kratom include any quantity of mitragynine or 7-hydroxymytragynine or both, extracted for the leaf of mitragyna speciosa.

    Applies to offenses committed on or after December 1, 2024.

    Part VII

    Names the section the “Rakim Shackleford Embalming Fluid Act.” Makes technical and organizational changes to GS 90-210.20 (pertaining to definitions related to the practice of funeral services) and sets forth a definition of embalming fluid

    Enacts GS 90-210.29C making it a criminal offense punishable as a Class I felony for a funeral director, embalmer, or resident trainee to knowingly give, sell, permit to be sold, offer for sale, or display for sale, other than for purposes within the general scope of their activities as a funeral director, embalmer, or resident trainee, embalming fluid to another person with actual knowledge that the person is not a funeral director, embalmer, or resident trainee. Requires imposition of fines of not less than $100 or more than $500 for a violation.

    Enacts GS 90-113.107, under new Article 5H (Miscellaneous Drug-Related Regulations), making it a criminal offense to (1) possess embalming fluid for any purpose other than the lawful preservation of dead human bodies by a person authorized by law to engage in such activity or the lawful preservation of wildlife by a licensed taxidermist or (2) sell, deliver, or otherwise distribute embalming fluid to another person with knowledge that the person intends to utilize the embalming fluid for any purpose other than the lawful preservation of dead human bodies by a person authorized by law to engage in such activity or the lawful preservation of wildlife by a licensed taxidermist. Specifies felony classifications from Class I to Class D based on the amount of embalming fluid involved in the offense. Specifies that the statute should not be construed as prohibiting possession by, or selling, delivering, or otherwise distributing to, funeral directors, embalmers, or resident trainees of embalming fluid for the purposes of embalming. Incorporates definitions of embalmer, embalming, embalming fluid, funeral director, and resident trainee from GS 90-210.20 into new section GS 90-113.107.

    Amends GS 90-96.2 (pertaining to limited immunity for good samaritans and overdose victims under the North Carolina Controlled Substances Act) to allow for immunity for violations of GS 90-113.107 involving less than 28 grams and that is punishable as a Class I felony.

    Applies to offenses committed on or after December 1, 2024.

    Part VIII

    Enacts new GS 14-318.7 creating the following new felonies for exposing a child to a controlled substance (defined as a controlled substance, controlled substance analogue, drug, marijuana, narcotic drug, opiate, opioid, opium poppy, poppy straw, or targeted controlled substance): (1) Class H felony to knowingly, recklessly, or intentionally cause or permit a child to be exposed to a controlled substance; (2) Class E felony to knowingly, recklessly, or intentionally cause or permit a child to be exposed to a controlled substance, and as a result the child ingests the controlled substance; (3) Class D felony to knowingly, recklessly, or intentionally cause or permit a child to be exposed to a controlled substance and as a result the child ingests the controlled substance, resulting in serious physical injury; (4) Class C felony to knowingly, recklessly, or intentionally cause or permit a child to be exposed to a controlled substance and as a result the child ingests the controlled substance, resulting in serious bodily injury; and (5) Class B1 felony to knowingly, recklessly, or intentionally cause or permit a child to be exposed to a controlled substance and as a result the child ingests the controlled substance, and the ingestion is the proximate cause of the death. Applies to offenses committed on or after December 1, 2024.


  • Summary date: Sep 21 2023 - View Summary

    House committee substitute to the 3rd edition makes the following changes.

    Part I.

    Amends proposed GS 18D-100 by deleting the term cannabinoid and replacing it with the term hemp-derived cannabinoid, as defined. Amends the definition of the term hemp-derived consumable product so that it is now defined as a hemp product intended for human ingestion or inhalation that contains a delta-9 THC concentration of not more 0.3% on a dry weight basis, but may contain concentrations of other hemp-derived cannabinoids including CBD, CBDA, 5 CBG, CBGA, CBN, THCA, and THCP, in excess of that amount. 

    Amends GS 18D-101 to prohibit a person from knowingly, or having reason to know, sell at retail a hemp-derived consumable product that has a concentration of more than 0.3% on a dry weight basis total combined of delta-9 tetrahydrocannabinol (was, delta-9 tetrahydrocannabinol, delta-7 tetrahydrocannabinol, delta-8 tetrahydrocannabinol, or delta-10 tetrahydrocannabinol).

    Amends GS 18D-103 to prohibit a manufacturer from knowingly, or having reason to know, manufacture or distribute a hemp-derived consumable product that has a concentration of more than 0.3% on a dry weight basis total combined of delta-9 tetrahydrocannabinol (was, delta-9 tetrahydrocannabinol, delta-7 tetrahydrocannabinol, delta-8 tetrahydrocannabinol, or delta-10 tetrahydrocannabinol). Makes conforming changes.

    Amends GS 18D-104 to require hemp-derived consumable products to be tested for the presence of and amount of cannabinoids, not to exceed a concentration of 0.3% total combined of delta-9 tetrahydrocannabinol (was, delta-9 tetrahydrocannabinol, delta-7 tetrahydrocannabinol, delta-8 tetrahydrocannabinol, or delta-10 tetrahydrocannabinol).

    Amends GS 18D-105 as follows. Amends what must be in a consumer protection warning on the label on a hemp-derived consumable product to require a statement that the product is not approved by the US FDA (was, not approved by the FDA for medical use), and a statement to consult your physician before use (was, only if you are pregnant). Removes the prohibition on a hemp-derived consumable product intended for ingestion from being sold in a serving that contains more than 200 milligrams, in the aggregate, of one or more hemp-derived cannabinoids. Prohibits a hemp-derived consumable product intended for ingestion from being sold in a serving that contains more than three milligrams, in the aggregate, of one or more of: delta-9 tetrahydrocannabinol, delta-7 tetrahydrocannabinol, delta-8 tetrahydrocannabinol, or delta-10 tetrahydrocannabinol.

    Amends GS 18D-301 to require that in order to obtain and maintain a license for manufacturing hemp-derived consumable products, distributing hemp-derived consumable products, selling hemp-derived consumable products, manufacturing kratom products, distributing kratom products, or selling kratom products to consent to reasonable inspection by the ALE Division of the inventory of products regulated by GS Chapter 18D to ensure compliance with the Chapter, and the taking of samples found to not be in compliance with the packaging, labeling, and testing requirements (was, consent to reasonable inspection and the taking of reasonable samples by the ALE Division of the person's inventory of products regulated by this Chapter). 

    Amends GS 18D-400 by amending the ALE's enforcement provisions to require that it enforce the provisions of GS Chapter 18D in a manner reasonable to reduce the extent to which hemp-derived consumable products and kratom products are sold or distributed to persons under age 18 and conduct random, unannounced inspections on locations where products are sold or distributed. Provides that if, upon reasonable inspection, the Division determines a licensee's inventory may consist of products not in compliance with the packaging, labeling, and testing requirements of this Chapter, the Division is authorized to only take samples of a licensee's inventory of hemp-derived consumable products and kratom products considered non-compliant to be submitted for testing in order to determine compliance with the provisions of this Chapter (was, the Division is authorized to take reasonable samples of a licensee's inventory of hemp-derived consumable products and kratom products to be submitted for testing in order to determine compliance with this Chapter). 


  • Summary date: Aug 16 2023 - View Summary

    House committee substitute to the 2nd edition makes the following changes.

    Part I.

    Organizes proposed new GS Chapter 18D into Articles.

    Article 1.

    Amends the definitions in GS 18D-100 as follows. Amends the definition of cannabinoid by amending the list of included photocannabinoids; adds that the term also includes any synthetic cannabinoid derived from a source other than hemp. Changes the definition of hemp-derived consumable product to a hemp product intended for human ingestion or inhalation that contains a concentration of not more than 0.3% on a dry weight basis total combined of delta-9 tetrahydrocannabinol, delta-7 tetrahydrocannabinol, delta-8 tetrahydrocannabinol, or delta-10 tetrahydrocannabinol, or any amount of another cannabinoid; further excludes from the term seeds or seed-derived ingredients that are generally recognized as safe by the US FDA. Removes the term hemp-derived psychoactive cannabinoid. Amends the definition of independent testing laboratory to require that it hold an ISO 17025 accreditation or be registered with the Drug Enforcement Administration (DEA), instead of requiring both. Amends the definition of manufacture to also include packaging hemp-derived consumable products and to no longer specify that the term includes the process of extraction or infusion of hemp-derived cannabinoids and packaging, repacking, labeling, and relabeling of hemp-derived consumable products. Amends the definition of manufacturer to also include a person or entity engaged in the process of manufacturing hemp-derived consumable products.

    Amends proposed GS 18D-101 as follows. Prohibits knowingly, or having reason to know, selling at retail a hemp-derived consumable product that has a concentration of more than 0.3% on a dry weight basis total combined of delta-9 tetrahydrocannabinol, delta-7 tetrahydrocannabinol, delta-8 tetrahydrocannabinol, or delta-10 tetrahydrocannabinol (was, has a delta-9 tetrahydrocannabinol concentration of more than 0.3% on a dry weight basis). Adds that when a penalty is imposed for violating this prohibition, the seller must also pay the actual costs paid for testing the samples that resulted in the violation; requires the fees to be remitted to the ALE Division. Specifies that penalties received as on offer in compromise must also be remitted to the Civil Penalty and Forfeiture Fund. Makes a subsequent violation of the prohibition on engaging in the business of selling a hemp-derived consumable product without a valid license a Class A1 misdemeanor.

    Amends proposed GS 18D-103 as follows. Makes it illegal for a manufacturer or distributor to knowingly, or having reason to know, manufacture or distribute a hemp-derived consumable product that has a concentration of more than 0.3% on a dry weight basis total combined of delta-9 tetrahydrocannabinol, delta-7 tetrahydrocannabinol, delta-8 tetrahydrocannabinol, or delta-10 tetrahydrocannabinol (was, has a delta-9 tetrahydrocannabinol concentration of more than 0.3% on a dry weight basis); makes conforming changes. Adds that when a penalty is imposed for violating this prohibition, the seller must also pay the actual costs paid for testing the samples that resulted in the violation; requires the fees to be remitted to the ALE Division. Specifies that penalties received as on offer in compromise must also be remitted to the Civil Penalty and Forfeiture Fund. Provides that when the Department of Revenue (Department) is entitled to suspend or revoke a manufacturer’s or distributor's license (was, seller’s license) the Department may accept an offer in compromise to pay a penalty of not more than $8,000. Makes additional conforming changes.

    Amends GS 18D-106 (now GS 18D-104), as follows. Requires a hemp-derived consumable product to be tested before distribution to determine the presence and amounts of the 101 listed substances (was, seven listed substances). Prohibits the products from exceeding the amounts listed for those substances. Violations will result in one or more of the following actions: (1) suspended license for no more than three years; (2) revocation of the license; (3) impose conditions on the operating hours of the licensee's business; or (4) impose civil penalties as follows: no more than $1,000 for a first violation, no more than $5,000 for a second violation within three years, and no more than $7,500 for a third violation within three years of the first violation. Allows the Department, when it is entitled to suspend or revoke a manufacturer's or distributor's license, to accept an offer in compromise to pay a penalty of not more than $8,000. Allows the Department to accept a compromise or revoke a license, but not both; allows the Department to accept a compromise and suspend the license in the same case. Requires the proceeds of the penalties, including those received as an offer in compromise, to be remitted to the Civil Penalty and Forfeiture Fund. Makes additional conforming changes.

    Amends GS 18D-107 (now GS 18D-105) by amending and expanding upon the statements that must be included in the consumer protection warnings on hemp-derived consumable products. Prohibits a hemp-derived consumable product intended for ingestion from being sold in a serving that contains more than 100 milligrams, in the aggregate, of one or more of the four listed hemp-derived cannabinoids; and specifies that the prohibition on selling in a serving that contains more than 200 milligrams of one or more hemp-derived cannabinoids includes any of those four listed hemp-derived cannabinoids. Violations will result in one or more of the following actions: (1) suspended license for no more than three years; (2) revocation of the license; (3) impose conditions on the operating hours of the licensee's business; or (4) impose civil penalties as follows: no more than $1,000 for a first violation, no more than $5,000 for a second violation within three years, and no more than $7,500 for a third violation within three years of the first violation. Allows the Department, when it is entitled to suspend or revoke a manufacturer's or distributor's license, to accept an offer in compromise to pay a penalty of not more than $8,000. Allows the Department to accept a compromise or revoke a license, but not both; allows the Department to accept a compromise and suspend the license in the same case. Requires the proceeds of the penalties, including those received as an offer in compromise, to be remitted to the Civil Penalty and Forfeiture Fund.

    Moves GS 18D-109 (now GS 18D-106) into Article 1.

    Article 2.

    Places provision related to the regulation of kratom products under Article 2 instead of in new GS Chapter 18E and makes the following changes.

    Amends the definition in GS 18D-200 by changing the term processor to manufacturer; maintains the definition and updates the term throughout.

    Amends GS 18D-201 (was, 18E-101) as follows. Allows the Department, when it is entitled to suspend or revoke a seller’s license, to accept an offer in compromise to pay a penalty of not more than $3,000. Allows the Department to accept a compromise or revoke a license, but not both; allows the Department to accept a compromise and suspend the license in the same case. Adds that when a penalty is imposed for violating the prohibition on knowingly, or having reason to know, selling at retail a kratom product that violates the product limitations, the seller must also pay the actual costs paid for testing the samples that resulted in the violation; requires the fees to be remitted to the ALE Division. Specifies that penalties received as on offer in compromise must also be remitted to the Civil Penalty and Forfeiture Fund. Makes a subsequent violation of the prohibition on engaging in the business of selling a kratom product without a valid license a Class A1 misdemeanor.

    Amends GS 18D-203 (was, 18E-103) as follows. Provides that when the Department is entitled to suspend or revoke a manufacturer’s or distributor's license (was, seller’s license) the Department may accept an offer in compromise to pay a penalty of not more than $8,000. Adds that when a penalty is imposed for violating the prohibition to knowingly, or having reason to know, manufacture or distribute a kratom product that violates the product limitations, the seller must also pay the actual costs paid for testing the samples that resulted in the violation; requires the fees to be remitted to the ALE Division. Specifies that penalties received as on offer in compromise must also be remitted to the Civil Penalty and Forfeiture Fund.

    Article 3.

    Article 3 pertains to licensing, combing provisions previously found in 18D-105 and 18E-105. Specifies that a person or entity engaged in more than one of the businesses listed is required to obtain only a single license. Amends the fees for a license to manufacture hemp-derived consumable products or manufacture kratom products, or to distribute hemp-derived consumable products or kratom products, to allow for a lower fee if the applicant can demonstrate their gross income for the prior calendar year was less than $100,000.

    Allows the Department to revoke or refuse to issue any license for: (1) failure to comply with or meet any of the licensure qualifications; (2) submission of false or misleading information in an application for licensure or renewal; (3) submission of false or misleading information in any report or information required by this Chapter to be submitted to the Department; and (4) failure to comply with civil penalties.

    Requires that proceedings for the assessment of civil penalties authorized in Articles 1 and 2 be governed by GS Chapter 150B. Upon failure to pay a penalty, allows the Department to institute an action in the superior court of the county in which the person resides or has their principal place of business to recover the unpaid amount; specifies that this recovery does not relieve any party from any other penalty prescribed by law.

    Requires the Department to develop and make available online an application for the license required by this Article.

    Article 4.

    Article 4 contains enforcement provisions previously found in GS 18D-104 and makes them applicable to both hemp-derived consumable products and kratom.

    Authorizes the ALE Division to take reasonable samples of inventory for testing in order to determine compliance. Requires the ALE Division to report to the Department any violations for which civil penalties are authorized.

    Expands upon the forfeiture provisions as follows. Requires safe storage of a product subject to forfeiture until trial. Allows the presiding judge in a criminal proceeding for violation of GS 18D-101(a)(4) or GS 18D-103(a)(3) to do the following after resolution of a charge against the owner or possessor of products subject to forfeiture: (1) if the owner or possessor of the product is found guilty of specified violations, the judge must order the product forfeited; (2) if the owner or possessor of the product is found not guilty, or if the charge is dismissed or otherwise resolved in favor of the owner or possessor, the judge must order the product returned to the owner or possessor; (3) if the product is also needed as evidence at an administrative hearing, the judge must provide that the order does not go into effect until the Department determines that the product is no longer needed for the administrative proceeding. Requires a judge ordering forfeiture of property to order the product destroyed. Allows the owner of products seized for forfeiture to apply to have the products returned if no criminal charge has been made in connection with that product within a reasonable time after seizure. Prohibits ordering return of the product if possession by the owner would be unlawful.

    Part II.

    Changes the effective date of the repeal of GS 90-94.1 to December 1, 2023 (was, July 1, 2023).

    Part III.

    Reduces the amount appropriated to the Department of Public Safety for other costs incurred by the Department of Revenue in implementing the act from $500,000 to $375,000 and appropriates $125,000 to be used for any other costs incurred by the ALE Division in implementing the act.

    Part IV.

    Amends the changes in the bill to Article 29A of GS Chapter 115 to now also include kratom products.

    Further amends GS 115C-407 by removing the requirement that the North Carolina Health and Wellness Trust Fund Commission work with local boards of education to provide assistance with the implementation of the policy prohibiting tobacco use in school buildings, grounds, and events, including providing information regarding smoking cessation and prevention resources.

    Makes the changes in this section applicable beginning with the 2024-25 school year instead of the 2023-24 school year.

    Makes conforming and technical changes throughout. Amends the act’s long title.


  • Bill H 563
    Summary date: Jun 21 2023 - View Summary

    House committee substitute to the 1st edition makes the following changes.

    Parts I and V.

    Substantially revises new GS Chapter 18D, now pertaining to regulation of hemp-derived consumable products (was, hemp-derived cannabinoid products) in Part I of the act, as discussed below. Part V of the act creates new GS Chapter 18E, pertaining to Regulation of Kratom Products and Processors, which is largely identical to the regulatory scheme set forth in GS Chapter 18D, except for the differences discussed below.  Removes references to the NC Alcoholic Beverage Control Commission (Commission) throughout new GS Chapter18D and replaces it with the Department of Revenue (Department). Makes conforming changes throughout new GS Chapter 18D for new term, "hemp-derived consumable products," and change from Commission to Department.

    Enacts new 18D/E-101, creating the following four sales restrictions on hemp-derived consumable products and kratom products and processors: (1) knowingly, or having reason to know, sell a hemp-derived consumable product/kratom product to a person under 18 years of age; (2) knowingly, or having reason to know, distribute samples of hemp-derived consumable products/kratom products in or on a public street, sidewalk, or park; (3) engage in the business of selling hemp-derived consumable products/a kratom product without a valid license; and (4) (i) for GS 18D-101, knowingly, or having reason to know, sell at retail a hemp-derived consumable product that has a delta-9 tetrahydrocannabinol concentration of more than 0.3% on a dry weight basis or (ii) for GS 18E-101, knowingly, or having reason to know, sell at retail a kratom product that violates the provisions of GS18E-106 (limits on kratom products). Provides for civil penalties imposed by the Department ranging from a penalty of no more than $500 for the first violation to a penalty of no more than $2,000 and either suspension of the seller’s license for up to a year or revocation of the seller’s license for a fourth or subsequent violation within three years of the first violation. Permits the Department, in any case which the Department is entitled to suspend or revoke a seller's license, to accept from the seller an offer in compromise to pay a penalty of not more than $3,000. Specifies that the Department may either accept a compromise or revoke a license, but not both. Allows the Department to accept a compromise and suspend the license in the same case.

    Provides for three listed defenses, including (1) demonstrating that the purchaser produced identification showing their age to be the required age for purchase and bearing a physical description of the person named on the card that reasonably describes the purchaser or (2) production of other facts that reasonably indicated that at the time of sale, the purchaser was at least the required age.  Retains civil penalty provision and forfeiture authorization from prior version and applies it to new GS Chapter 18E.

    Amends new GS 18D/18E-102, offenses involving the purchase, attempted purchase, or possession of hemp-derived consumable products/kratom products by a person under 18 years of age, as follows. Makes it unlawful for: (1) any person to give hemp-derived consumable products/kratom products to any person under 18 without the consent of the person’s parent or guardian; (2) any person under 18 to purchase, or attempt to purchase, any hemp-derived consumable products/kratom products; (3) for any person to enter or attempt to enter a place where hemp-derived consumable products/kratom products are sold or to obtain, or attempt to obtain hemp-derived consumable products/kratom products by using fraudulent identification; and (4) for any person to allow their identification to be used by any other person attempting to purchase hemp-derived consumable products/kratom products if they are under 18. Specifies that if the person is under 18, they are guilty of a Class 2 misdemeanor and if they are over 18, they are guilty of a Class 1 misdemeanor. Provides for aiding and abetting liability.

    Specifies that the act is not intended to prohibit an underage person from selling, transporting, or possessing hemp-derived consumable products/kratom products in the course of employment, if the employment of the person for that purpose is lawful under applicable youth employment statutes.

    Amends new 18D/E-103, creating three offenses involving the manufacture and distribution of hemp-derived consumable products and kratom products and processors: (1) knowingly, or having reason to know, distribute samples of any hemp-derived consumable products/kratom products in or on a public street, sidewalk, or park; (2) engage in the business of manufacturing or distributing hemp-derived consumable products/kratom products without a valid license; or (3) (i) knowingly, or having reason to know, manufacture or distribute a hemp-derived consumable product that has a delta-9 tetrahydrocannabinol concentration of more than 0.3% on a dry weight basis or (ii) knowingly, or having reason to know, manufacture or distribute a kratom product that violates the provisions of GS 18E-106 (product limits). Specifies that violation is a Class A1 misdemeanor. Specifies that in addition to any criminal punishment, a violation must result in the Department imposing one or more of four listed civil penalties against the licensee including suspension of their license for not more than three years, revocation of licenses, and monetary penalties ranging from $1,000 for the first violation to $7,500 for a third violation within three years of the first violation.  Provides for offers in compromise of not more than $8,000 in cases where the Department is entitled to suspend or revoke a seller’s compromise. Allows the Department to accept a compromise and suspend the license in the same case, but not to revoke a license if an offer in compromise is accepted.  Directs that the clear proceeds of any civil penalty be remitted to the Civil Penalty and Forfeiture Fund. Authorizes forfeiture of products sold in violation of the bar on hemp-derived consumable products that have a delta-9 tetrahydrocannabinol concentration of more than three tenths of one percent (0.3%) on a dry weight basis or kratom products that are sold in violation of GS 18E-106.

    For violations pertaining to the manufacture and/or distribution of hemp-derived consumable products that have a delta-9 tetrahydrocannabinol concentration of more than 0.3% on a dry weight basis (GS 18D-103), creates a defense if the manufacturer does all of the following: (1) recalls all hemp-derived consumable products from the same batch as the product on which the violation is based; (2) has samples of the batch tested by an independent testing laboratory (provides for minimum sample sizes); and (3) provides certified results from the independent testing laboratory indicating that the sample tested does not contain a delta-9 tetrahydrocannabinol concentration of more than 0.3% on a dry weight basis.

    Amends new GS 18D/E-105, setting forth seven licensure requirements for persons or entities in the business of manufacturing, distributing, or selling hemp-derived consumable products/kratom products, including that the applicant be at least 18 years of age, not have been convicted of a felony related to a controlled substance within 10 years in any state or federal jurisdiction, and that they consent to reasonable inspection and the taking of reasonable samples by the Alcohol Law Enforcement (ALE) Division of the person’s inventory of hemp-derived consumable products/kratom products. Sets forth application fee schedule as follows: (1) for a manufacturer’s license, $5,000; (2) distributor license, $2,500; (3) retail sales license, $100 per location with a cap of $2,500 with a requirement that the applicant submit a list of all locations to the Department; (4) online sales license, $100 per location with a cap of $2,500 with a requirement that the applicant submit a list of all internet websites to the Department.

    Specifies that the license is valid for one year and sets forth fee renewal schedule as follows; (1) $1,000 for a manufacturer’s license; (2) $750 for a distributor license; and (3) the same amount as the initial application fee for retail licenses.

    Authorizes the Department to adopt, amend, and repeal rules to carry out the provisions of GS Chapter 18D/E. Provides for distribution of revenue collected from fees to the ALE Division to cover its costs in enforcing GS Chapter 18D/E.  Exempts businesses with permits issued under GS 18B-1001 (ABC permits) or GS 90-85.21 (pharmacy permits) from the licensure requirements of GS 18D/E to sell hemp-derived consumable products/kratom products. Specifies that such businesses are still subject to the other provisions of GS 18D/E.

    Makes organizational, conforming, and technical changes.

    For processors and distributors of kratom products licensed under GS 18E-105, requires them to register all kratom products they offer for sale in the State with the Department. Specifies that the registration must include any information that the Department deems necessary to ensure compliance with the provisions of GS Chapter 18E. Requires the Department to require the processor or distributor, upon receipt of any adverse event report related to a product manufactured or distributed by that processor or distributor, to submit a copy of the adverse event report, as required under 21 U.S.C. 49 §379aa-1, to the Department within 30 days. If the processor or distributor does not submit a copy of the adverse event report within the time allotted, requires that the registration for that product must be revoked and the license for that processor or distributor must be suspended or revoked, at the discretion of the Department.

    Provides for forfeiture of property that has not been previously seized pursuant to an arrest or search in conjunction with certain alleged violations of GS 18D/E-101 by application to the court for an order authorizing seizure of such property. Specifies that an order for seizure can only issue after criminal process has been issued for any of those alleged violations.

    Part I.

    In addition to statutory provisions set forth above, makes the following changes to new GS Chapter 18D. Adds new defined terms cannabinoid, department, distributor, hemp, hemp-derived consumer product, hemp-derived psychoactive cannabinoid, hemp product, independent testing laboratory, ingestion, inhalation, license, manufacturer, and seller. Removes defined terms commission, hemp-derived cannabinoid, and proof of age. Changes definition of batch to the hemp-derived consumable product produced during a period of time under similar conditions and identified by a specific code that allows traceability. (Was, a single stock keeping unit with common cannabinoid input or a hemp flower of the same varietal and harvested on the same date manufactured during a defined cycle in such a way that it could be expected to be of a uniform character and should be designated as such.)

    Amends GS 18D-106 (testing requirements prior to distribution of a hemp-derived consumable product) to add that the tests run on such products must also test for any other controlled substance, in addition to six other listed things that must be tested for. Provides for required sample sizes based on the size of the batch for batch testing. Makes conforming changes. Amends GS 18D-107 (setting forth additional requirements and restrictions for hemp-derived consumable products) as follows. Changes the cap on the amount of milligrams per serving of an ingestible from 75 milligrams to 200 milligrams of hemp-derived cannabinoids. Makes clarifying changes.

    Changes the effective date to July 1, 2024 (was, October 1, 2023).

    Part II.

    Deletes proposed changes to GS 18B-500(b)(1) and repeal of GS 90-87(13). Repeals instead of amending GS 90-94.1 (exemption for use or possession of hemp extract). Effective July 1, 2023, and applies to offenses committed on or after that date.

    Part III.

    Amends the appropriation provision to specify that once the $2 million provided to the ALE Division has been exhausted, the fees remitted to the Division pursuant to GS 18D-105 should be used to support the new full-time positions on a recurring basis. Also specifies that any nonrecurring funds appropriated by this section for the 2023-24 fiscal year that remain unexpended at the end of the 2023-24 fiscal year will not revert at the end of the 2023-24 fiscal year and will remain available for expenditure for the purpose for which the funds were appropriated until the funds are expended.

    Part IV.

    Amends Article 29A of GS Chapter 115C so that it also requires a policy prohibiting the use of hemp-derived consumable products, in addition to tobacco.  Changes the entity responsible for adopting such written policies from the local boards of education to the governing bodies of public school units under GS 115C-407. Removes duties to implement and enforce such policies. Makes conforming changes.

    Enacts new GS 115C-407.1 (policy prohibiting the use of hemp-derived consumable products in school buildings, grounds, and at school sponsored events), as follows. Requires governing bodies of public school units to adopt a written policy prohibiting at all times the use of any hemp-derived consumable product by any person in school buildings, in school facilities, on school campuses, and in or on any other school property owned or operated by the public school unit. Requires the policy to further prohibit the use of all hemp-derived consumable products by persons attending a school-sponsored event at any other location when in the presence of students or school personnel or in an area where the use of hemp-derived consumable products is otherwise prohibited by law. Requires the policy to include at least the following: (1) adequate notice to students, parents, the public, and school personnel of the policy; (2) posting of signs prohibiting at all times the use of hemp-derived consumable products by any person in and on school property; and (3) requirements that school personnel enforce the policy.

    Authorizes hemp-derived consumable products to be included in instructional or research activities in public school buildings if the activity is conducted or supervised by the faculty member overseeing the instruction or research and the activity does not include smoking, chewing, or otherwise ingesting or inhaling the hemp-derived consumable product.  Specifies that local school units can adopt and enforce a more restrictive policy on the hemp-derived consumable products in school buildings, in school facilities on school campuses, or at school-related or school-sponsored events, and in or on other school property.

    Requires charter schools, regional schools, schools for students with visual and hearing impairments, and UNC lab schools to adopt a policy in conformity with the requirements discussed above.  Makes conforming change to Section 6(d) of SL 2018-32 (renewal school system plans) to account for increased scope of mandatory tobacco/hemp-derived consumable products policy.

    Applies beginning with the 2023-24 school year.

    Part V.

    In addition to statutory provisions set forth above, does the following as part of new GS Chapter 18E. Defines terms department, distributor, processor, kratom product, and seller. Prohibits a kratom processor, distributor, or seller from preparing, manufacturing, distributing, or offering for sale any of six listed types of kratom products.  Enacts new GS 18E-104 and GS 18E-108, which is identical to GS 18D-104’s enforcement provisions and GS 18D-109’s statutory construction provisions, respectively. Makes conforming change to GS 18B-500(b) as amended by the act to refer to new GS Chapter 18E. Effective date of GS Chapter 18E is July 1, 2024, and applies to all kratom products possessed, sold, distributed, processed, or manufactured on or after that date, and to all offenses committed on or after that date.

    Part VI.

    Now requires the Department to establish guidance to parties regulated by the provisions of GS Chapter 18D and GS Chapter 18E as enacted by the act. Specifies that the Department must adopt and amend rules prior to July 1, 2024; however, no rule may become effective until on or after that date. Requires the Department to provide and accept applications for licensure, and issue licenses in accordance with GS Chapters 18D and 18E prior to July 1, 2024, in order that licensees may be in compliance on July 1, 2024. Specifies that no license issued by the Department will become effective prior to July 1, 2024. Authorizes the Department to use the procedure set forth in GS 150B-21.1 (APA procedure for temporary rules) to adopt or amend any rules as required by the act.

    Now requires the Department of Public Safety (DPS), solo (was the Board of Agriculture, DPS, and the ABC Commission), to adopt rules  consistent with the provisions of the act. Allows for the APA procedures pertaining to temporary rules to apply to the rules adopted or amended by those entities.

    Changes the general effective date to when the act becomes law.

    Makes conforming changes to the act's titles.


  • Summary date: Apr 5 2023 - View Summary

    Part I

    Enacts new GS Chapter 18D, pertaining to the regulation of hemp-derived cannabinoid products.  Defines  Alcohol Law Enforcement (ALE) Division, batch, commission, hemp-derived cannabinoid, manufacture, proof of age, and serving.

    Enacts GS 18D-101, which sets forth seven offenses involving the manufacture, sale, and distribution of hemp-derived cannabinoid products, as follows: (1) to knowingly sell or distribute a product containing a hemp-derived cannabinoid to a person who is under 21 years of age; (2) to knowingly purchase a product containing a hemp-derived cannabinoid on behalf of a person who is under 21 years of age; (3) to knowingly persuade, entice, send, or assist a person who is under 21 years of age to purchase, acquire, receive, or attempt to purchase a product containing  a hemp-derived cannabinoid; (4) to knowingly distribute samples of products containing a hemp-derived cannabinoid in or on a public street, sidewalk, or park; (5) to knowingly sell or distribute a product containing a hemp-derived cannabinoid without having first obtained proof of age from the purchaser or recipient; (6) to engage in the business of manufacturing, distributing, or selling a product containing a hemp-derived cannabinoid without a valid license issued in  accordance with new GS Chapter 18D; (7) to knowingly manufacture, distribute, or sell a product containing a hemp-derived cannabinoid that has a delta-9 tetrahydrocannabinol concentration of more than 0.3% on a dry weight basis. Exempts certain law enforcement efforts from GS 18D-101. Classifies violation of GS 18D-101 as a Class A misdemeanor and provides for civil penalties ranging from $5,000 to $15,000 and for suspension of hemp manufacturing licenses for initial and subsequent violations. Directs that the proceeds of any civil penalty be remitted to the Civil Penalty and Forfeiture Fund. Permits for forfeiture of products manufactured, distributed, or sold in violation of the offenses listed as 6 and 7 above.

    Enacts GS 18D-102, which makes it a Class A1 misdemeanor for any person under 21 years of age to either (1) knowingly purchase, possess, or accept receipt of a product containing a hemp-derived cannabinoid or (2) knowingly present purported proof of age that is false, fraudulent, or not actually that person's for the purpose of purchasing or receiving a product containing a hemp-derived cannabinoid. Exempts certain law enforcement activities.

    Authorizes the ALE Division to enforce the provisions of GS Chapter 18D. Requires ALE to conduct random, unannounced inspections at locations where products containing a hemp-derived cannabinoid are sold or distributed to ensure compliance with the provisions of GS Chapter 18D. Beginning January 1, 2025, requires the ALE Division to submit an annual report to the General Assembly describing in detail the ALE Division's enforcement efforts under GS Chapter 18D and to post the report on its website.  

    Enacts GS 18D-104, which establishes a license for manufacturing, distribution, and selling of hemp-derived cannabinoid products, as follows. Requires a person or entity that is in the business of manufacturing, distributing, or selling products containing a hemp-derived cannabinoid in the state to obtain a license from the North Carolina Alcoholic Beverage Control Commission (Commission) authorizing the person or entity to engage in that business prior to the commencement of business or by January 1, 2024, whichever is later. Sets forth three requirements for licensure, including submission of information requested by the Commission, a fee, and consent to reasonable inspection and sampling by the ALE Division of the person’s inventory of products containing a hemp-derived cannabinoid. Specifies that a person is ineligible to obtain a license if they are serving sentence for, or for ten years following the completion of a sentence for a drug-related felony offense in any state or federal jurisdiction. Specifies the license is valid for one year and may be renewed annually. Sets forth schedule of annual renewal fees. Authorizes the Commission to adopt, amend, and repeal rules to carry out the provisions of Chapter 18D. Specifies that the rules are effective when adopted and filed pursuant to the APA. Directs that the revenue collected from fees established under GS 18D-104 must be remitted to the Department of Revenue (Department) on a monthly basis. The Department must then remit that revenue to the ALE Division to be used to cover costs incurred by the ALE Division from enforcing the provisions of GS Chapter 18D.

    Enacts GS 18D-105, which sets forth requirements for testing of products containing a hemp-derived cannabinoid by laboratories approved by the Commission. Enacts GS 18D-106 which sets forth packing requirements, advertising restrictions, and ingestible product restrictions for products containing hemp-derived cannabinoids.  Enacts GS 18D-107, which sets forth nine things that continue to not be prohibited by GS Chapter 18D.

    Effective October 1, 2023, and applies to offenses committed on or after that date.

    Part II

    Repeals the definition of hemp contained in GS 90-87(13a). Makes conforming changes to GS 18B-500(b)(1) (pertaining to ALE agents) to account for new licenses under GS 18D-104 and GS 90-94.1 (exemption for use or possession of hemp extract) to refer to new GS Chapter 18D. Effective October 1, 2023.

    Part III

    Appropriates $2 million from the General Fund to the Department of Public Safety (DPS) in nonrecurring funds for the 2023-2024 fiscal year to hire 20 full-time equivalent positions in the ALE division to serve as Special Agents and assist in implementing the provisions of the act. Appropriates $500,000 from the General Fund to the Department of Public Safety in nonrecurring funds for the 2023-2024 fiscal year to be used for any other costs incurred by the Commission and the ALE Division in implementing the provisions of the act. Effective July 1, 2023.

    Part IV

    Amends GS 106-121 (definitions provisions of the food, drugs, and cosmetics article) to add defined terms kratom processor and kratom product. Requires the Board of Agriculture (Board) to adopt rules for regulating kratom processors to ensure the quality and safety of kratom products sold in the state. Requires the Board to address registration, noncompliance, and adverse events reports in its rules. Specifies that the manufacture, sale, delivery, holding, or offering for sale of any kratom products that are falsely certified as compliant with the certification rules adopted by the Board under are be prohibited and also be subject to  GS 106-123 (injunction restraining violations) and GS 106-125 (adulterated or misbranded article).

    Part V

    Contains severability clause. 

    Sets act’s effective date as July 1, 2023, except as otherwise provided.  Specifies that prosecutions for offenses committed before the effective date of the act are not abated or affected by the act, and the statutes that would be applicable but for the act remain applicable to those prosecutions.  

    Requires the Board, DPS, and the ABC Commission to adopt rule that are consistent with the provision of the act. Allows for the APA procedures pertaining to temporary rules to apply to the rules adopted or amended by those entities.