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.