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. 

 

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. 

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). 

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.