Bill Summary for S 765 (2021)

Summary date: 

May 23 2022

Bill Information:

View NCGA Bill Details2021
Senate Bill 765 (Public) Filed Monday, May 23, 2022
AN ACT TO LEGALIZE AND REGULATE THE SALE, POSSESSION, AND USE OF MARIJUANA IN NORTH CAROLINA.
Intro. by Fitch.

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Bill summary

Part I.

Enacts Part 23 to Article 10, GS Chapter 143B, establishing the 20-member Cannabis Equity Reinvestment Board (CERB), located at the Department of Commerce. Describes the Board's purpose. Provides for member appointment and identifies ex-officio members. Details member qualifications, appointment, vacancies, terms, and expenses, and provides for CERB meetings. Grants seven powers and duties to CERB, including (1) developing and implementing scholarship programs and educational and vocational resources for historically marginalized persons; (2) developing and implementing a grant program to support workforce development programs, mentoring programs, job training and placement services, apprenticeships, and reentry services that serve persons and communities historically and disproportionately targeted by drug enforcement; and (3) the administration of the Cannabis Equity Reinvestment Fund, established by the act with five limiting authorized uses. Provides for staggered terms for members. Effective July 1, 2022.

Part II.

Enacts a new GS Chapter 18D, Regulation of Marijuana, organized into the following Articles.

Article 1

States the Chapter's purpose and defines 31 terms. Includes a severability clause. Provides for the Chapter's provisions to supersede local ordinances.

Article 2

Creates the NC Cannabis Control Commission (Commission), located within the Department of Public Safety with authority independent of the Secretary of Public Safety. Details the organization of the Commission, including a Chief Executive Officer, Board of Directors (Board), and agents and employees. Provides for Commission governance by the five-member Board who are gubernatorially appointed and legislatively confirmed for five-year terms. Provides Board member qualifications, procedures for filling a vacancy, removal by the Governor, expenses, and BOD meetings. Enumerates 33 powers and duties of the Commission, including rulemaking; controlling the possession, sale, transportation, and delivery of marijuana and marijuana products; acting as the licensing agency for the cultivation, manufacture, distribution, sale, and testing of marijuana and marijuana products; establishing a plan to develop and disseminate educational materials to retail marijuana store licensees; establishing specified liaison, support team, and staff for described roles related to the industry and its regulation; and other corporate powers, such as assessing and collecting civil penalties and charges for violations of the Chapter and Board rules. Authorizes the Board to use mediation or a dispute resolution proceeding in appropriate cases, defined as those involving license violations or objections to license applications where such a proceeding is in the public interest, to resolve contested issues, with those involving application objections subject to consent of the applicant; makes the decision of whether to use mediation or a dispute resolution proceeding not subject to judicial review. Makes such resolutions considered a consent agreement. Grants the Board rulemaking authority related to dispute resolution as described. 

Grants the Board rulemaking authority regarding rules necessary to implement the Chapter and prevent the illegal cultivation, manufacture, sale, and testing of marijuana and marijuana products, with adoption, amendment and repeal subject to the Administrative Procedure Act. Additionally requires the Board to adopt rules that cover 17 stated objectives, including establishing requirements for transporting marijuana; establishing sanitary standards for retail marijuana product preparation; establishing a licensing process for marijuana establishments; establishing health and safety warning labels for retail marijuana and retail marijuana products; establishing a maximum tetrahydrocannabinol level for retail marijuana products within the scale provided;  establishing criteria to evaluate social equity license applicants; and establishing reasonable time, place, and manner restrictions on outdoor advertising of retail marijuana or retail marijuana products. Further authorizes the Board to adopt rules that limit the number of licenses issued by type or class to operate marijuana establishments within specified limits, including no more than 400 retail marijuana stores and no more than 450 marijuana cultivation facilities; prescribes requirements for the administration of taxes; and limit the allowable square footage of a retail marijuana store, up to 1,500 square feet. Provides for the effect and application of Board rules, and requires courts to take judicial notice of Board rules. 

Details the appointment of the Board's CEO by the Governor with legislative confirmation required. Provides CEO qualifications, powers and duties, salary, and removal. Provides for background investigations of Board members and the CEO. Disqualifies principal stockholders and others with any financial interest in any licensee from being a Board member or employee of the Commission. Also prohibits both members and their spouses and immediate family from making, or causing to be made, any contribution to a candidate for office or officeholder at the local or state level. 

Directs the Board to establish a seed-to-sale tracking system. Sets requirements for Commission funds, accounting, and record keeping. Requires the State Auditor or a legally authorized representative to annual examine the Commission's accounts and books. Requires annual reporting to the Governor and NCGA as described. Provides for implementation of an independent payroll and nonpayroll disbursement system, subject to review and approval of the Office of State Budget and Management. 

Details the required disposition of moneys collected by the Board, including payment of Board expenses, Chapter administration expenses, and Commission expenses, followed by percentages allotted for Pre-K programs for at-risk 3- and 4-year olds, the Cannabis Equity Reinvestment Fund, substance use disorder prevention and treatment programs, and public health programs. Establishes the Collection of Local Marijuana Taxes Fund for local tax revenues to be deposited and quarterly returned to entitled localities. 

Exempts Board real estate leasing and purchasing from State procurement laws. Exempts the Commission from State procurement  or disposition laws for real property leases. Exempts the Commission from State and local taxes or assessment for property acquired or used under the Chapter's provisions or upon the income therefrom. Exempts the Commission from: State personnel laws; procurement laws involving goods, services, insurance, and construction and the disposition of surplus materials. Details authority and requirements of the Commission related to contracting for goods and services. Provides for reversion of the Commission's assets to the State following dissolution and satisfaction of creditors. Sets requirements and limitations for Board communications. Details reporting requirements of the Board, including annual reports to the Governor, NCGA, and CEO as described. Sets accounting, postaudit and annual audit requirements. Creates confidentiality requirement for certain information collected by the Board and its employees, with exceptions provided. Details required criminal history checks of certain Commission employees. Deems Commission employees State employees and requires the Board to adopt employment policies and procedures. Sets out the police powers of the Board and its designated agents and employees to enforce the Chapter. Grants civil immunity to Board members related to the performance of their duties, except for proceedings brought by the Attorney General. Allows for the Board to be sued for breach of contract. Provides for appointment of counsel for prosecutions against Board members, agents, or employees. Allows for licensees and applicants appearing before the Board to be represented by counsel, and provides for rights during hearings before the Board. 

Bars local governments from adopting ordinances or resolutions regulating or prohibiting the cultivation, manufacture, possession, sale, wholesale distribution, handling, transportation, consumption, use, advertising, or dispensing of retail marijuana or retail marijuana products in the state, except ordinances that (1) prohibit the acts described in GS 18D-707 (using or consuming marijuana or marijuana products while in a motor vehicle driven upon a public highway) or the acts described in GS 18D-708 (consuming marijuana or marijuana products, or offering to another, in a public place), which can provide a penalty for violation thereof and (2) that regulate or prohibit the possession of opened retail marijuana or retail marijuana products containers in local public parks, playgrounds, public streets, and any sidewalk adjoining any public street. States that the Chapter supersedes and limits municipal authority to adopt or enforce local ordinances to regulate businesses licensed under the Chapter. Repeals all local acts and ordinances inconsistent with the Chapter's provisions. Authorizes counties to adopt ordinances outside of any incorporated town, and governing bodies of each city and town, to fix hours during which retail marijuana and retail marijuana products can be sold, with violations punishable as Class A1 misdemeanors. Requires transmittal of a copy of such ordinance to the Board. 

Establishes the 21-member Cannabis Public Health Advisory Council (Council) as an advisory council to the Board. Details Council membership and identifies ex officio members. Expands on the Council's purpose. Details member appointment, terms, vacancies, and expenses. Provides for Council meetings. States three distinct duties of the Council, including to review agency efforts to support collaboration and a unified approach to public health responses related to marijuana and marijuana legalization and develop necessary recommendations, monitor changes in drug use data related to marijuana and marijuana legalization in the state and the science and medical information relevant to potential health risks and make appropriate recommendations, and to annually report to the Governor and NCGA.

Article 3

Sets forth general administration provisions for licensure by the Board. Exempts persons cultivating marijuana at home for personal use from licensure requirements. Provides for licenses to extend to all agents and employees, with licensees liable for the violations  of the Chapter or Board rules committed by agents or employees in connection with their employment. Requires each license designate the place of business, with separate licenses required for each separate place of business. Makes licenses nontransferable. Requires posting the license to the public at the place of business. Allows for the Board to issue licenses for one or up to three years, with fees established by the Board as specified. Provides penalties for failure to pay fees. Details record-keeping requirements of licensees, with distinguished requirements for marijuana manufacturing facilities and marijuana wholesalers, retail marijuana stores, marijuana cultivation facilities, and marijuana testing facilities. Requires the Board and its agents to be permitted free access during reasonable hours to every place and premises of every licensee to examine and inspect the place and records, invoices, and accounts therein. 

Article 4

Provides for the administration of the following licenses by the Board: Class A and Class B cultivation facility licenses, based on the number of marijuana plants cultivated or area in which cultivated, or based on the tetrahydrocannabinol concentration of marijuana plants cultivated; marijuana manufacturing facility licenses; marijuana testing facility licenses; marijuana wholesaler licenses; and retail marijuana store licenses. Details authorities granted with each license and additional requirements and restrictions of each license. Among the additional restrictions provided for manufacturing facilities, requires that retail marijuana products must be prepared on a licensed premises and equipment used exclusively for that purpose. Among the additional restrictions provided for retail marijuana stores, requires patrons be at least 21 years old, requires face-to-face points of sale, prohibits the sale of more than two ounces during a single transaction to one person, prohibits giving away marijuana or marijuana products or selling to someone who is intoxicated or suspected of attempting to purchase for a minor, prohibits employing persons under 21, and requires training for employees. Additionally requires retail licensees to post notice of a human trafficking hotline and make available information regarding the potential risks of marijuana use. Includes record keeping requirements specific to each licensee. Makes the following licenses disqualify the holder from being granted another: marijuana cultivation facility license, marijuana manufacturing  facility license, marijuana wholesaler license, retail marijuana store license, or marijuana testing facility license. Caps persons from having an interest in or being granted more than five licenses. Allows for temporary permits in certain instances as determined by the Board. Requires license revocation if the licensee fails to maintain possession of the licensed premises. Prohibits licensees from using or consuming marijuana or marijuana products on the licensee's premises, except for Board-permitted sampling for quality control.

Establishes disqualifying conditions for which the Board is authorized to deny a license, including disqualifications related to the applicant, such as (1) that the applicant is not a state resident; (2) that the applicant has been convicted of any crime or offense involving moral turpitude within seven years preceding the application or has not completed all terms of sentencing or probation resulting from any such felony conviction; (3) that the applicant is a police officer in the jurisdiction where the establishment would be located; or (4) that the applicant is a permitted manufacturer, distributor, or retailer of alcoholic beverages or a retailer of tobacco or tobacco products. Other possible disqualifications relate to the place to be occupied, including that the establishment would adversely affect or interfere with the normal affairs of religious worship, hospitals, schools, and other specified facilities, or that the number of licenses in the locality prevents issuance, based on described considerations of the Board. Further provides for denial based on restrictions imposed by the Chapter or other law, ordinance, or regulation of the United States, State, or political subdivision. Requires refusal of licensure to Board members and employees, corporations and entities in which such members or employees are stockholders or have any other economic interest, with such affiliations required to be disclosed on applications. Allows for judicial review of the Board's decision to grant or deny any license, with appeals lying to the Court of Appeals. Authorizes the Board to refuse a hearing for certain marijuana store license applications, including when the license for the applicant has been refused or revoked within a period of 12 months.

Article 5

Grants the Board discretionary authority to suspend or revoke a license, with over 20 grounds for action listed, including conviction of any felony or any crime involving moral turpitude or possession of an illegal gambling apparatus, machine, or device on the licensed premises. Provides for summary suspension in emergency circumstances as specified. Mandates revocation or suspension for gambling violations at retail marijuana store premises, or certain fraud offenses related to the license or business. Details the procedure for the suspension or revocation of licenses, including notice and hearing requirements. Allows for civil penalties of up to $2,000 for the first violation in a five-year period, and $5,000 for the second or subsequent violation occurring in a five-year period, with greater civil penalties authorized for violations related to sales to or consumption by prohibited persons. Details requirements for suspension or revocations orders and provides for the disposition of retail marijuana or retail marijuana products on hand. 

Article 6

Provides for license application requirements, including posting a notice of the application on the front of the premises proposed for at least 10 but not more than 30 days, and publishing notice at least once a week for two weeks in a newspaper where the applicant proposes to engage in the business. Authorizes the Board to determine annual fees as specified. Provides for prorated refunds.

Establishes a 21 percent State tax on the sale of any retail marijuana, retail marijuana products, marijuana paraphernalia sold by a retail marijuana store, non-retail marijuana, and non-retail marijuana products, with four exclusions, including the sale of cannabis oil for legal treatment and the sale of industrial hemp by a grower, processor, or dealer under GS Chapter 106. Authorizes municipalities to levy a 3 percent tax on such sales by ordinance, subject to notice requirements. Sets expectations for tax collection, returns, payments, commissions, and interest. Authorizes the Commission to require bonds or securities for payment of taxes, penalties, or interest due or that may become due. Provides for refunds in certain described instances. Sets a general three year statute of limitations on tax assessment under the Chapter, with limited exceptions. Provides civil remedies for collecting past-due taxes. Provides for review of taxes and related interest and civil penalties, with appeals lying with the Court of Appeals. 

Article 7

Establishes the following offenses related to the Chapter.

Makes it legal for persons at least 21 years of age to possess up to two ounces of marijuana or an equivalent amount of marijuana product, as determined by Board rule. Makes violations punishable by a fine of up to $25, except possession of more than one pound is punishable as a Class F felony with a fine of up to $250,000, excluding licensees in the course of a licensed establishment's business. Excludes from the prohibitions members of law enforcement agencies, jail officers, or correctional officers certified as handlers of dogs trained in the detection of controlled substances when possession is necessary for the performance of their duties. 

Allows persons at least 21 years of age to cultivate up to two mature marijuana plants and two immature marijuana plants for personal use at their residence, with the same limit applicable to the household altogether. Establishes requirements for persons cultivating plants for personal use, including that the marijuana is not visible to the public and precautions are taken to prevent unauthorized access to minors. Prohibits a person from manufacturing marijuana concentrate from home-cultivated marijuana or allowing intentionally or knowingly allowing another to manufacture such on their property or land. Makes possession above the limit for personal-use cultivation a civil penalty punishable by $250 for the first offense, a Class 2 misdemeanor for a second offense, and a Class 1 misdemeanor for a third and subsequent offense. Makes it a Class A1 misdemeanor for possession of more than 10 but less than 49 plants; a Class I felony for possession of more than 49 but no more than 100 plants; and a Class F felony for possession of more than 100 plants with a fine of up to $250,000.

Makes it a Class I felony to cultivate or manufacture marijuana or marijuana products in the state without a license, with conspiracy a Class I felony. 

Makes the sale, gift, or distribution of marijuana or marijuana products a Class 1 misdemeanor, with subsequent convictions a Class A1 misdemeanor. Prohibits imposing a civil or criminal penalty for adult sharing, as defined, of an amount of marijuana less than two ounces. 

Makes it a Class A1 misdemeanor to: knowingly sell, give, or distribute marijuana or marijuana products to a person under the age of 21 or who is intoxicated; knowingly sell, distribute, or possess with intent to distribute marijuana paraphernalia to any person under 21 years of age; or advertise to promote the sale of marijuana paraphernalia to persons under the age of 21. Makes it a Class 2 misdemeanor to make sales without requiring presentation of bona fide evidence of legal age, as specified; prohibits the Board from taking administrative action against a licensee for this conduct. Prohibits conviction of both the offense for selling to minors and the offense for selling to a minor and not requiring presentation of bona fide evidence of legal age. 

Makes unlawful consumption, purchase, possession, or attempt to do the same, of any marijuana or marijuana products by persons at least 18 years of age and juveniles subject to a civil penalty of up to $25 with an order or requirement to enter a substance abuse treatment or education program, or both, required. Makes it a Class A1 misdemeanor for persons under 21 to use or attempt to use altered or fictitious driver's licenses or identification documents, or those of another, to establish a false identification or age to consume, purchase, or attempt such of retail marijuana or retail marijuana products. Makes marijuana and marijuana products related to these violations contraband to be forfeited to the State. Grants immunity from administrative penalties related to these violations for retail marijuana store licensees who promptly notify the Board or law enforcement of violations or suspected violations. 

Makes it a Class A1 misdemeanor to purchase retail marijuana or marijuana products for another knowing the person is intoxicated or under the age of 21. Specifies exemptions for underage sales by certain law enforcement officers in the performance of their duties. Make purchases contraband to be forfeited to the State. 

Makes it a Class 2 misdemeanor to use or consume marijuana or marijuana products while driving a motor vehicle upon a public highway or while being a passenger in such a motor vehicle. Provides for a judge or jury to make permissive inferences as described.

Makes it illegal to consume marijuana or a marijuana product, or offer such to another, whether accepted or not, in any public place. Offenses are punishable by a civil penalty of up to $25 for a first offense; a civil penalty of up to $25 and an order to enter a substance abuse treatment or education program, or both, for a second offense; or a Class 2 misdemeanor for third and subsequent offenses. 

Makes possession or consumption in or upon public elementary or secondary school during school hours or school or student activities a Class 1 misdemeanor. Makes consumption and service in or upon grounds after school hours or school or student activities a Class 1 misdemeanor. 

Makes it a Class A1 misdemeanor to possess or consume while operating a school bus and transporting children; import, ship, transport, or bring marijuana or marijuana products into the State; transport marijuana or retail marijuana products in motor vehicles used or licensed to transport passengers for hire, with a limited exception; or maintain or knowingly associate with others maintaining a common nuisance, as defined, with further remedies authorized including ordered closure.

Makes it a Class H felony to maintain or operate a fortified drug house, as defined.

Makes it a Class A1 misdemeanor to refuse a subpoena of the Board or its member or agent, or hinder a Board hearing.

Makes it a Class A1 misdemeanor to illegally advertise marijuana as specified. Allows licensees to display outdoor retail marijuana and product advertising as specified. Requires the Board to give notice to an advertiser relating to distance and zoning restrictions on outdoor advertising and provide a 30-day period before the advertiser is guilty of a Class 2 misdemeanor. 

Makes it a Class A1 misdemeanor to deliver marijuana or marijuana products to any prisoner.

Makes it a Class A1 misdemeanor to separate plant resin by a method that uses a substance with a flashpoint of 100 degrees in any public place, motor vehicle, or within the curtilage of any residential structure. 

Provides for attempts or aiding and abetting of actions prohibited by the Chapter, punishable as if the defendant were solely guilty. Authorizes the court to impose lesser consequences for first offenders than those provided by the Chapter, including probation with conditions such as treatment and securing employment. Makes violations subject to civil penalties charged by summons. Provides for issuance.

Article 8

Enumerates eight prohibited acts by licensees, including keeping retail marijuana or a retail marijuana product other than in the container in which it was purchased, punishable as a Class A1 misdemeanor.

Makes it unlawful for a retail store licensee or their agent or employee to consume on duty and in a position that is involved in sales, or make a gift of any marijuana or marijuana product. Makes violations subject to a civil penalty of up to $500.

Makes it a Class A1 misdemeanor for a retail marijuana store licensee to purchase for sale from anyone other than a marijuana wholesaler licensee; or transfer any retail marijuana or retail marijuana products from one licensed place of business to another, regardless of ownership.

Makes it unlawful to induce, attempt to induce, or consent to any licensee providing any advertising materials or decorations prohibited by the Chapter or Board rules, subject to civil penalty. 

Requires a permit for a person with any interest in the manufacture, distribution, or sale of retail marijuana or retail marijuana products to solicit a retail marijuana store licensee, their agent or employee, or any person connected with the licensee in the licensed business to sell or offer for sale the retail marijuana or retail marijuana products in which such person may be so interested. Makes violations a Class A1 misdemeanor, and includes authority for further action by the Board, such as suspending or terminating the sales, and imposition of a civil penalty of up to $250,000. Makes participating retail marijuana store licensees, their agent or employees, or any person connected with the licensee that solicits or aids another in this violation guilty of a Class A1 misdemeanor, subject to license suspension or revocation, and a fine of up to $25,000.

Makes tax and other financial record violations a Class A1 misdemeanor, with continued failure to make a return or pay taxes due grounds for license suspension or revocation following reasonable notice. Makes it a Class A1 misdemeanor to make sales under the Chapter without paying applicable taxes. Provides for civil penalties and compounding interest, with a civil penalty of up to 25 percent in the aggregate, with an additional 50 percent for willfully fraudulent returns.

Article 9

In addition to other penalties authorized by the Chapter, authorizes the Board, its agents, the Attorney General, or any citizen where a common nuisance exists to enjoin the common nuisance. Details jurisdiction and the effect of an injunction and provides for forfeiture of contraband marijuana and marijuana products and other articles in violation of the Chapter as described. 

Makes it unlawful for a law enforcement officer to stop, search, or seize any person, place, or thing solely on the basis of marijuana odor, with evidence discovered or obtained pursuant to such a violation inadmissible in any proceeding; excludes airports and commercial vehicles. Provides for the issuance of search warrants for probable cause of Chapter violations.

Details procedure for the confiscation of articles declared contraband and forfeited under the Chapter and their disposition. 

Requires an officer to obtain a search warrant to search a conveyance or vehicle for illegally acquired or transported retail marijuana or retail marijuana products; provides requirements and procedures for seizure and disposition of contraband forfeited. 

Makes violation of Board rules and any other Chapter provision not classified a Class A1 misdemeanor. Authorizes requiring a defendant to execute a bond of up to $500 upon a condition that the defendant will not violate the Chapter for one year. Provides that the Board maintains disciplinary authority in addition to any criminal penalties imposed. Requires a State attorney or their assistant to be notified of a case pending under the Chapter prior to a court hearing the case. 

Prohibits a witness from being excused from testifying for the State for offenses committed by another under the Chapter by reason of self-incrimination. Prohibits prosecuting such witness for the offenses to which he or she testifies.

Allows for any indictment, information, or warrant charging Chapter violations to be alleged and introduced at trial of such person to prove previous Chapter violations. 

Allows the signed certificate of any State forensic scientist to be evidence in all prosecutions for Chapter violations and all controversies in any judicial proceeding touching the mixture analyzed by the sciences. Allows any party to motion the court to require appearance as a witness.

Deems labels on sealed containers prima facie evidence of the marijuana content of the container.

Explicitly denies any action to recover the price of any retail marijuana or retail marijuana products sold in violation of the Chapter.

Article 10

Requires the Board to establish a testing program for marijuana and marijuana products. Requires that the program require a licensee, prior to selling or distributing retail marijuana or a retail marijuana product to a consumer or to another licensee, to submit a representative sample of the retail marijuana or product for testing by a licensed marijuana testing facility to ensure that the retail marijuana or product does not exceed the maximum level of allowable contamination for any contaminant that is injurious to health and for which testing is required and to ensure correct labeling. Requires that the Board adopt regulations related to establishing the program, establishing acceptable testing and research practices, identifying the types of contaminants that are injurious to health for which retail marijuana and products must be tested, and establishing the maximum levels of allowable contamination.

Prohibits a licensee from selling or distributing retail marijuana or a retail marijuana product to a consumer or to another licensee unless a representative sample has been tested and demonstrated that it does not exceed the maximum level of allowable contamination, and the labeling is correct. Sets out a list of items that must be tested for in the testing. Requires the testing be of the item’s final form. Sets out licensee testing recordkeeping requirements. If the test result exceeds the maximum level of allowable tetrahydrocannabinol (THC) or contamination for any contaminant that is injurious to health and for which testing is required, the testing facility is required to immediately quarantine, document, and properly destroy the retail marijuana or retail marijuana product and within seven days of completing the test notify the Board of the results. Sets out conditions under which a testing facility is not required to notify the Board of the test results. Allows a licensee to sell or furnish to a consumer or to another licensee retail marijuana or a retail marijuana product that has not been submitted for testing if: (1) the retail marijuana or retail marijuana product has previously undergone testing at the direction of another licensee and passed that testing; (2) the mandatory testing process and the test results for the retail marijuana or a retail marijuana product are documented as required; (3) tracking from immature marijuana plant to the point of retail sale has been maintained for the retail marijuana or retail marijuana product and transfers of the retail marijuana or retail marijuana product to another licensee or to a consumer can be easily identified; and (4) the retail marijuana or retail marijuana product has not undergone any further processing, manufacturing, or alteration subsequent to the performance of the prior testing. Requires licensees to destroy harvested batches of retail marijuana or batches of retail marijuana products whose testing samples indicate noncompliance with the health and safety standards unless remediation is possible.

Sets out labeling requirements for retail marijuana and retail marijuana products to be sold or offered for sale by a licensee to a consumer. Requires the label to identify the type of marijuana or marijuana product and the date of cultivation, manufacturing, and packaging; facility license numbers; net weight of the retail marijuana or retail marijuana product; information on pharmacologically active ingredients, THC, and other cannabinoid amounts in milligrams per serving, total servings per package, and the THC and other cannabinoid amount in milligrams for the total package; potency; information on gases, solvents, and chemicals used in marijuana extraction; usage instructions; list sof ingredients and allergens and instructions on use for retail marijuana products; nutritional facts for edible retail marijuana products; a specified warning statement; a universal symbol stamped or embossed on the packaging of any retail marijuana and retail marijuana products; and any other information required by the Board. Sets out additional packaging requirements for retail marijuana and retail marijuana products that are to be sold or offered for sale by a licensee to a consumer, including child-resistant and tamper-resistant packaging. Prohibits retail marijuana and retail marijuana products sold to consumers from being labeled or packaged: in violation of a federal trademark law or regulation; in a manner that appeals particularly to persons younger than age 21 years; in a manner that obscures identifying information on the label; using a false or misleading label; that depicts a human, an animal, a vehicle, or fruit; or in violation of any other labeling or packaging requirements imposed by the Board.

Requires that edible retail marijuana products and other retail marijuana products deemed applicable by the Commission to be sold or offered for sale by a licensee to a consumer: be manufactured by an approved source, comply with the applicable State laws governing food and drink, be manufactured in a manner that results in the cannabinoid content within the product being homogeneous throughout the product or throughout each element of the product, be manufactured in a manner that results in the amount of marijuana concentrate within the product being homogeneous throughout the product or throughout each element of the product, have a universal symbol stamped or embossed on the packaging of each product, not contain more than the specified amounts of THC; not contain specified types of additives, and not involve the addition of marijuana to a trademarked food or drink product (with stated exceptions). Requires the Board to adopt additional rules that establish mandatory health and safety standards applicable to the cultivation of retail marijuana, the manufacture of retail marijuana products, and the packaging and labeling of retail marijuana and retail marijuana products sold by a licensee to a consumer; sets out items that must be addressed by the regulations.

Prohibits advertising in or sending any advertising matter into the State about or concerning retail marijuana or retail marijuana products other than those that may be legally manufactured in the State. Prohibits licensees from advertising unless at least 85 percent of the audience is reasonably expected to be 21 or older and prohibits advertising on television or the radio at any time outside of regular school hours for elementary and secondary schools. Prohibits licensees from using pop-up digital advertisements or displaying any marijuana or marijuana product pricing through any means of advertisement other than their establishment’s registered website or an opt-in subscription-based service. Sets out additional requirements for a licensee’s advertising or marketing, including that it not appeal particularly to persons younger than 21 and that it not be false or misleading. Requires direct, individualized communication or dialogue controlled by the licensee to verify the age of the recipient before engaging. Prohibits giving away any amount of retail marijuana or retail marijuana products or accessories as a promotion or commercial. Prohibits advertising or marketing containing any untrue health-related statement.

Sets out regulations on outdoor advertising including prohibiting placing outdoor retail marijuana or retail marijuana products advertising within the specified distance of schools, playgrounds, child care centers, and substance use disorder treatment facilities. Prohibits a marijuana licensee from using any billboard advertisements or advertising at any sporting event in the state.

Article 11

Creates the Cannabis Equity Business Loan Fund (Fund), consisting of appropriated funds and any gifts, donations, grants, bequests, and other funds received on its behalf. Requires the Fund to be used to provide low-interest and zero-interest loans to social equity qualified cannabis licensees in order to foster business ownership and economic growth within communities that have been the most disproportionately impacted by the former prohibition of cannabis.

Requires the Commission to establish the Cannabis Equity Business Loan Program (Program) to provide the loans and to work with a community development financial institution that provides credit and financial services for underserved communities (CDFI) in administering the Program. Sets out requirements that must be met by the CDFI. Requires the establishing of monitoring and accountability mechanisms for businesses receiving funding and requires annual reports on the specified information. Requires the Program to: identify social equity qualified cannabis licensees who are in need of capital for the start-up of a cannabis business, provide loans, provide technical assistance, and bring together community partners to sustain the Program. Requires the Commission to report annually by December 1 to the Secretary of Public Safety, the Governor, and to specified NCGA committees on such other matters regarding the Fund as the Commission deems appropriate.

Enacts new GS 53C-6-21 and GS 54-109.20A to prohibit holding a bank or credit union that provides a financial service to a licensed marijuana establishment, and the bank or credit union’s officers, directors, and employees, liable solely for providing such a financial service or for further investing any income derived from such a financial service. Specifies that this does not require a bank or credit union to provide financial services to a licensed marijuana establishment.

GS 18D-200 through GS 18D-225 (found in Article 2) become effective July 1, 2022. The remainder of this Part becomes effective January 1, 2025.

The following provisions are effective when they become law.

Requires the Board of Directors of the Cannabis Control Commission to adopt rules to implement the provisions of this act by July 1, 2024.

Allows the Cannabis Control Commission to start accepting applications for licenses under this act on July 1, 2024, and requires from July 1, 2024, until December 31, 2024, that preference be given to qualified social equity applicants. Allows the issuance of any license authorized by this act to any applicant who meets the requirements for licensure established by this act and by any rules adopted by the Board of Directors of the Commission in accordance with this act.

Allows any applicant issued a license by the Commission to operate in accordance with the provisions of this act prior to January 1, 2025; however, prohibits a retail marijuana store licensee from selling retail marijuana or retail marijuana products to a consumer before that date. Provides that if a limit is placed on the number of licenses to be granted, the Commission must, from July 1, 2024, to July 1, 2029, reserve a license slot for a qualified social equity applicant for every license that was initially granted to a social equity applicant and was subsequently surrendered. Requires the Commission to develop and implement its diversity, equity, and inclusion plan and publish resources to assist social equity applicants by January 1, 2024. Requires that the Commission ensure that geographic dispersion is achieved regarding the issuance of retail marijuana store licenses and reassess the issuance of retail marijuana store licenses at the specified intervals.

Requires the Commission to consult with the Secretaries of Public Safety, Transportation, and Health and Human Services to develop and implement a health, safety, and safe driving campaign by January 1, 2024.

Requires the secretaries of Health and Human Services and Public Safety to convene a work group with all appropriate State agencies and authorities to develop a plan for identifying and collecting data that can determine the use and misuse of marijuana in order to determine appropriate policies and programs to promote public health and safety. Requires the plan to include marijuana-related data regarding five specified areas including hospital and emergency room visits; use rates, mode of use and demographic information for vulnerable populations; and treatment rates for cannabis use disorder and any other diseases related to marijuana use. Requires the plan to detail the categories for which each data source will be collected and to include the means by which initial data will be collected as soon as practicable as a benchmark before the effective date of an act legalizing marijuana for adult use, the plan for regular collection of such data thereafter, and the cost of collecting the data. Requires a recommended timetable and determination of the cost for analyzing and reporting the data. Also requires the work group to recommend metrics to identify disproportionate impacts of marijuana legalization, if any, including discrimination in the state's cannabis industry. Requires a report to the Governor and NCGA by November 1, 2022.

Requires the State Board of Education (SBOE) to implement a plan to ensure that teachers have access to sufficient information, resources, and lesson ideas to assist them in teaching about the harms of marijuana use among youth and about substance abuse. Requires SBOE to review resources currently provided to teachers to determine if additional or updated material or lesson ideas are needed and to provide or develop any additional materials and resources deemed necessary and make them available to teachers by January 1, 2025.

Requires the SBOE to develop a plan for introducing teachers to the information and resources available to them to assist in teaching standards related to marijuana use. Specifies what is to be addressed in the plan. Requires the plan to include the estimated cost of implementation and any potential source of funds to cover such cost and requires it to be submitted to the Governor and NCGA by November 1, 2022.

Requires the UNC Board of Governors and the State Board of Community Colleges to determine what additional evidence-based efforts should be undertaken for college-age individuals to promote education and prevention strategies relating to marijuana. Requires the plan to include the estimated cost of implementation and any potential source of funds to cover the cost and requires submission to the Governor and NCGA by November 1, 2022.

Sets the initial terms of office for persons appointed to serve as non-legislative citizen members on the Cannabis Public Health Advisory Council, with expiration dates staggered and expiring in 2026, 2027, and 2028, as specified. Thereafter those members are to serve for terms of four years.

Part III.

Repeals Article 50E of GS Chapter 106, Industrial Hemp, and instead enacts new Article 50F, which provides as follows. Makes it lawful for a grower or their agent to grow, a dealer or their agent to deal in, or a processor or their agent to process industrial hemp in the State for any lawful purpose; prohibits prosecuting the same for the possession, growing, dealing, or processing of industrial hemp. Prohibits prosecuting a person for the involuntary growth of industrial hemp through the inadvertent natural spread of seeds or pollen as a result of proximity to a production field, dealership, or process site.

Allows the North Carolina Board of Agriculture (Board) to adopt rules to register persons to grow, deal in, or process industrial hemp or implement the provisions of the Article. Requires the Board to adopt conforming rules when the US Department of Agriculture publishes in the Federal Register any final rule regarding industrial hemp that materially expands opportunities for growing, producing, or dealing in industrial hemp in the state. Requires the Board to adopt rules: (1) establishing acceptable testing practices for hemp products intended for smoking and hemp products that are an industrial hemp extract intended for human consumption, (2) identifying the contaminants for which hemp products intended for smoking and hemp products that are an industrial hemp extract intended for human consumption must be tested, and (3) establishing the maximum level of allowable contamination for each contaminant. Also requires adopting rules establishing: (1) labeling and packaging requirements for a hemp product intended for smoking and a hemp product that is an industrial hemp extract intended for human consumption and (2) advertising requirements for a hemp product intended for smoking and a hemp product that is an industrial hemp extract intended for human consumption.

Allows the Commissioner of Agriculture (Commissioner) to charge an application fee of up to $50 for an application for registration or license or renewal of registration or license allowed under this Article; also allows a fee to be charged for tetrahydrocannabinol testing. Funds are required to be deposited into the General Fund. Requires notifying the State Bureau of Investigation of the locations of all industrial hemp production fields, dealerships, process sites, and hemp-testing laboratories. Requires providing a copy of each registration to the chief law enforcement officer of the county or city where industrial hemp will be grown, dealt, or processed, or where a hemp testing laboratory will be located. Makes the Commissioner responsible for monitoring the industrial hemp grown, dealt, or processed by a registrant and provide for random testing for compliance with tetrahydrocannabinol limits and for other appropriate purposes. Allows inspection and sampling without advance notice if the commissioner believes a violation has occurred. Allows the Commissioner to require a grower, dealer, or processor to destroy, at the individual’s cost, any Cannabis sativa found to have a concentration of tetrahydrocannabinol greater than legally allowed or a processor produces a Cannabis sativa product. Sets out additional provisions governing the allowable concentration and required destruction, including when a retest may be requested. Requires the Commissioner to advise the US Attorney General and the State Bureau of Investigation or the chief law enforcement officer of the appropriate county or city when, with a culpable mental state greater than negligence, a grower grows, a dealer deals in, or a processor processes any Cannabis sativa with a concentration of tetrahydrocannabinol great than that legally allowed or a processor produces a Cannabis sativa product.

Requires the Commissioner to establish a registration program to allow a person to grow, deal in, or process industrial hemp in the state and to provide the necessary registration form. Sets out items that must be included in the application. Prohibits registering a person with a prior felony drug conviction within 10 years of applying for a registration. Registration is valid for a year and may be renewed. Specifies that records, data, and information filed in support of a registration application are not public record.

Requires registering before growing, dealing in, or processing any industrial hemp in the state. Sets out requirements for registrants concerning record keeping, inspections, testing, and destruction. Requires a processor that processes a hemp product intended for smoking or a hemp product that is an industrial hemp extract intended for human consumption to make the test results available to each retail establishment that offers the processor's hemp products for sale.

Allows the Commissioner to deny the application, or suspend or revoke the registration, of any person who, with a culpable mental state greater than negligence, violates any provision of this Article. Sets out notice and hearing requirements for any person in connection with the denial, suspension, or revocation of a registration. Allows the appeal of the revocation of a registration in an informal hearing, at which time an administrative hearing must be conducted. Allows an appeal of the final order. Provides for when registrants can be subject to corrective action plans. Sets out provisions governing time limits on compliance with the plans and for reporting on compliance. Prohibits a person who negligently violates the Article three times in a five-year period from being eligible to grow, deal in, or process industrial hemp for five years beginning on the date of the third violation.

Requires the Commissioner to establish a licensure program to allow a laboratory to test industrial hemp or hemp products in the state. Requires labs to apply for licensure on an application provided by the Commissioner; sets out application requirements. Licenses are valid for one year and may be renewed. Requires labs to be licensed before testing any industrial hemp or hemp product in the state; specifies that a marijuana-testing facility is not required to obtain a license before testing industrial hemp or hemp products in the state. Sets out requirements for labs concerning accreditation, employee qualifications, and inspections. Requires that tested hemp products that exceed the maximum level of allowable tetrahydrocannabinol or contamination for any contaminant for which testing is required to notify the Commissioner within seven days of completing the test. Allows penalties to be assessed for violations and allows a six-month license suspension for a third or subsequent violation within a five-year period. Penalties are required to be remitted to the Civil Penalty and Forfeiture Fund.

Enacts new Article 50G, Edible Marijuana Products, in GS Chapter 106, providing as follows.

Specifies that an edible marijuana product is a food and is subject to the requirements of this Article and related rules. Deems as adulterated any edible marijuana product that does not comply with the provisions of new GS Chapter 18D or health and safety rules adopted pursuant to the Chapter. Provides that a manufacturer of an edible marijuana product is an approved source if the  manufacturer operates: (1) under inspection by the Commissioner in the location in which the manufacturing occurs and (2) in compliance with the laws, regulations, or criteria that pertain to the manufacture of edible marijuana products in the location in which the manufacturing occurs. Requires the Board to adopt rules for the enforcement of this Article.

The above provisions are effective January 1, 2025.

Requires the Board of Agriculture to adopt rules to implement the provisions of this Part by December 1, 2024.

Part IV.

Enacts GS 15A-145.8B, mandating the automatic expunction of convictions for offenses involving marijuana or hashish that is legal under new GS Chapter 18D by July 1, 2027. Charges the Administrative Office of the Courts (AOC) with determining eligible offenses, creating an electronic list of offenses, and providing the list to clerks of superior court by October 1, 2026, to prepare and complete orders of expungement. Provides for expungement of related government records, except DNA records and samples stored, and reversal of administration actions taken as a result of the charges or convictions expunged. Provides for the effect of the expunction. Effective January 1, 2025.

Part V.

Makes conforming repeals in the following statutory sections to reflect the new enactments: GS 90-87, GS 90-94, GS 90-95, GS 90-113.22A, GS 90-113.21, GS 105-113.106, GS 105-113.107, GS 105-113-107A, GS 105-113.108, GS 106-134, GS 148-64.1, and GS 90-94.1.

Makes conforming changes to GS 105-113.106, defining dealer to exclude possession of marijuana. 

Effective January 1, 2025.

Part VI.

Provides a savings clause for prosecutions for offenses committed before the effective date of the act.

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