State lawmakers across the U.S. are grappling with how to regulate the booming market for psychoactive hemp products, and a pair of the South’s biggest economies recently tried to take steps to rein in the industry.

In Alabama, lawmakers moved forward with efforts to impose stricter regulations on products like delta-8 THC despite industry pushback, while a similar attempt in Georgia stalled, according to recent reports from state news outlets.

Alabama

Alabama State Rep. Andy Whitt, a Republican out of Harvest, recently filed House Bill 445 in Alabama, which would impose regulations on all consumable hemp products similar to those on alcohol, the Alabama Daily News reported.

“In 2023, the Alabama Poison Information Center investigated 235 cases involving delta-8, and more than 40% of calls were for children six and under,” Whitt wrote in a recent op-ed for the Alabama Daily News.

HB445 sets up licensing requirements across the consumable hemp vertical, with annual fees ranging from $1,000 for retailers to $5,000 for manufacturers and wholesalers.

The bill also imposes product standards limiting THC content to 5 milligrams per serving for beverages and edibles, and 0.3% total THC on a dry weight basis for other products. Additionally, it requires child-resistant packaging and detailed labeling that includes warnings about potential intoxicating effects, as well as age-gate individuals 21 and older and establishing a 7% excise tax on gross sales, with proceeds split between the state’s coffers, counties and municipalities.

Republican Sen. Tim Melson, from Florence, tried for an even stricter approach earlier this year, filing a bill that would have outright banned all psychoactive cannabinoid products in Alabama by classifying them as Schedule I controlled substances. After that effort failed to gain traction, Melson filed Senate Bill 237, which, similar to Whitt’s proposal, would have regulated these products like alcohol, according to the outlet.

The bill failed in a Senate committee in a tied 4-4 vote, with industry representatives speaking out against the measure.

“It puts hemp under ABC which oversees liquor, not agricultural products,” said Molly Cole with the Alabama Hemp & Vape Association at a public hearing. “This move not only burdens an already-stretched agency, but it also risks penalizing and criminalizing hemp products more harshly than alcohol and tobacco.”

Melson defended his proposal despite the resistance.

“If I had an unregulated product that I was able to take to the market and charge what I want for it, I probably wouldn’t want it regulated either,” Melson told Alabama Daily News. “I’m just trying to get it under control. I keep getting calls from people having children show up in the ER for taking something they’re not even supposed to be allowed to buy.”

Melson told the Alabama Daily News on Thursday that the bill was “not dead yet,” with Whitt’s HB445 set to be heard in the House Committee on Health at an as-of-yet undetermined date.

Georgia

Meanwhile, in neighboring Georgia, a similar effort to ban intoxicating hemp products stalled, giving businesses a reprieve for at least another year, according to HempToday.

Senate Bill 254, sponsored by Republican Sen. Bill Cowsert, which sought to ban any hemp-derived products containing THC, passed the Georgia Senate in early March with a 42-14 vote but saw strong pushback in the House Regulated Industries Committee, chaired by Republican Rep. Alan Powell.

“We are putting loaded guns in people’s hands in the form of a can or a gummy, and we need to protect them,” Cowsert warned during debates over the bill, the outlet reported.

However, Powell’s committee ultimately rejected Cowsert’s restrictions, opting instead for a different version that peeled away all proposed limitations on the hemp industry and proposed expanding the sale of hemp products to state-licensed package stores, HempToday reported.

An Alabama lawmaker introduced legislation that would strip some medical marijuana licensing authority from a state commission and transfer it to a private consultant. The move follows years of delays and legal challenges that have prevented patients from accessing cannabis products.

State Sen. Tim Melson, a Republican out of Florence who co-sponsored the original 2021 medical marijuana law, filed Senate Bill 72 this week to address what he describes as a frustrating deadlock in implementing the program.

“It’s just taking too long,” Melson told Alabama Daily News regarding the awarding of integrated facility licenses needed to give patients access to medical marijuana products. “You had one job, you haven’t been able to perform it, so let’s just go ahead and find somebody who can.”

The bill would require the Alabama Medical Cannabis Commission to hire a “nationally recognized entity with expertise in financial auditing and managerial consulting” with offices in at least 15 states by October, according to draft legislation. The consultant would then be tasked with awarding licenses from the original pool of applicants who submitted paperwork by Dec. 31, 2022.

The proposal would also expand the number of integrated facility licenses from five to seven, citing population growth since the 2021 law was enacted. Those licenses permit both cultivation and the sale of medical marijuana products.

Industry sources expressed skepticism about portions of the bill, particularly provisions that would make Alabama Medical Cannabis Commission license denials “final and conclusive” and expedite appeals directly to the state Supreme Court, according to WBRC-TV. Multiple companies connected to the state’s cannabis industry also raised concerns about keeping the same individuals involved in overseeing the licensing process, the station reported.

John McMillan, director of the cannabis commission, said officials are reviewing the bill but indicated early support for measures that could break the current impasse.

“The commission is focused on getting licenses out, getting this program up and going and getting patients medication,” McMillan told Alabama Daily News. “There’s only two ways to do that right now, the courts or the Legislature, the way I see it.”

The licensing process, which began with applications in late 2022, has been mired in scoring inconsistencies, transparency concerns and litigation that continues to delay implementation. Previous attempts to restart the program, including legislation Melson filed last spring, failed to advance beyond committee.

While commission member Sam Blakemore recently suggested ongoing litigation could be resolved “in a matter of weeks,” Melson’s bill highlights growing legislative impatience with delays that have left qualifying patients without legal access to medical marijuana for more than two years after initial legalization.

The legislation would apply retroactively to multiple pending lawsuits in Montgomery Circuit Court, where a retired judge is currently mediating claims from license applicants who allege flaws and illegalities in the commission’s review process.

The Daily Hit is a recap of the top financial news stories for Tuesday, December 17, 2024.

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