Part I.

Section 1(a).

Article 1.

Enacts new GS Chapter 18D, pertaining to the regulation of hemp-derived cannabinoid products.  Defines  Alcohol Law Enforcement (ALE) Division, batch, Department (Department of Revenue), distributor, exit package, final form product, hemp, hemp-derived cannabinoid, hemp-derived consumable product, hemp product, independent testing laboratory, ingestion, inhalation, license, manufacture, manufacturer, producer, raw hemp extract, seller, and serving.

Enacts GS 18D-101, which sets forth six offenses involving the sale of hemp-derived consumable products, as follows:

1. To knowingly sell a product containing a hemp-derived cannabinoid to a person who is under 21 years of age or to sell that product to a person under 21 years of age when the seller has reason to know they are under 21.
2. Engage in the business of selling a hemp-derived consumable product without a valid license.
3. 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. (Designates second violations of this prong as a Class A1 misdemeanor with subsequent violations as a Class H felony.)
4. Knowingly, or having reason to know, sell a hemp-derived consumable product that is not contained in an exit package or a child-resistant package.
5. Knowingly, or having reason to know, sell at retail or on an internet website offering delivery in this State, a hemp-derived consumable product that is not in compliance with GS 18D-105.
6. Knowingly, or having reason to know, sell at retail hemp flower or a product containing hemp flower that is not accompanied by a certificate of analysis issued within the previous 12-month period demonstrating that the hemp flower or product containing hemp flower has delta-9 tetrahydrocannabinol concentration of no more than 0.3% on a dry weight basis.

Requires age verification for online sales. Provides for three defenses to the violation described as 1 above, including (1) proof that the buyer produced an official State or federal identification showing their age to be at least 21 years old; (2) evidence of other facts that reasonably indicated at the time of sale that the purchaser was at least the required age; and (3) evidence that at the time of sale the purchaser utilized a biometric identification system that demonstrated their age to be at least 21 and that they had registered an official federal or State ID with the seller or the seller’s agent showing them to be the legal age for purchase.

Provides for civil penalties ranging from $500 to $2,000 and for a one-year suspension of hemp seller licenses for third violations, and revocation of that license for subsequent violations. Allows for compromise in cases of revocation or suspension of licensure where the seller may pay a penalty of not more than $3,000. Allows the Department to accept a compromise and suspend a license in the same case but prevents it from revoking a license if a compromise is accepted.  Provides for payment of a testing fee conducted as part of sample testing in investigating alleged violations of the offense listed as 4 above, to be remitted to the ALE Division. Directs that the clear proceeds of any civil penalty be remitted to the Civil Penalty and Forfeiture Fund (Fund). Permits for forfeiture of products manufactured, distributed, or sold in violation of the offense listed as 4 above.

Enacts GS 18D-101A, preventing a producer from knowingly selling or in any way transferring hemp that has been processed or prepared with the intent to be used in a hemp-derived consumable product to any person or entity other than a licensee under GS Chapter 18D or any person or entity that otherwise meets the requirements of the jurisdiction in which they reside or conduct business to receive such material. Provides for civil penalties ranging from $500 to $2,000.  Designates second violations as a Class A1 misdemeanor with third or subsequent violations a Class H felony.

Directs that the clear proceeds of any civil penalty be remitted to the Fund. Clarifies that the statute cannot be construed as preventing a producer from selling or transferring hemp intended to be used in a lawful product.

Enacts GS 18D-102, preventing persons less than 21 years of age from purchasing, attempting to purchase or possessing hemp-derived consumable products and to use fraudulent or altered identification or documentation, identification or documents issued to another, or any other form or means of identification that indicates or symbolizes that the person is not prohibited from purchasing or possessing a hemp-derived consumable product under the statute. Further makes it unlawful for a person to permit use of their identification to allow an underage person to purchase a hemp-derived consumable product. Also prohibits a person from giving a hemp-derived consumable product to anyone younger than age 21. Makes it a Class 2 misdemeanor for persons who violate the statute who are less than 21 years of age and a Class 1 misdemeanor for persons 21 and over who violate the section. Provides for aiding and abetting liability. Exempts an underage person from liability for selling, transporting, or possessing hemp-derived consumable products (1) in the course of employment if the employment of the person for that purpose is lawful under applicable youth employment statutes or (2) if the individual has a recommendation for a hemp-derived consumable product from a physician.

Enacts GS 18D-103, which makes it unlawful for a manufacturer or distributor to do any of the following four offenses:

1. Knowingly, or having reason to know, distribute samples of a hemp-derived consumable product in or on a public street, sidewalk, or park.
2. Engage in the business of manufacturing hemp-derived consumable products as a home-based manufacturer.
3. Engage in the business of manufacturing or distributing a hemp-derived consumable product without a valid license.
4. 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.

Provides a defense to the violation listed as 3 above if the manufacturer (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 as described; 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.

Classifies violations as a Class A1 misdemeanor and provides for civil penalties ranging from $1,000 to $7,500. Authorizes suspension, revocation, or conditions placed upon manufacturer or distributor licenses for a third violation committed within three years of the first violation. Allows for compromise in cases of revocation or suspension of licensure where the licensee may pay a penalty of not more than $8,000. Allows the Department to accept a compromise and suspend a license in the same case but prevents it from revoking a license if a compromise is accepted.  Provides for payment of a testing fee conducted as part of sample testing in investigating alleged violations of the offense listed as 4 above, to be remitted to the ALE Division. Directs that the clear proceeds of any civil penalty be remitted to the Fund. Permits for forfeiture of products manufactured, distributed, or sold in violation of the offense listed as 3 above.

Requires in new GS 18D-104, that a manufacturer have a hemp-derived consumable product tested by an independent testing laboratory prior to distribution to a distributor or before distributing the product to a seller as described and for the substances listed in the section.  Requires a hemp-derived consumable product to be labeled with an expiration date that conforms with applicable federal law. Provides for civil penalties ranging from $1,000 to $7,500. Directs that the clear proceeds of any civil penalty be remitted to the Fund. Authorizes suspension, revocation, or conditions placed on the operating hours of the licensee’s business placed upon the licensee’s licenses for a third violation committed within three years of the first violation. Allows for compromise in cases of revocation or suspension of licensure where the licensee may pay a penalty of not more than $8,000. Allows the Department to accept a compromise and suspend a license in the same case but prevents it from revoking a license if a compromise is accepted. Requires the Department to (1) maintain and post on its website a registry of testing labs that are qualified to conduct the testing required by the section and (2) develop an application and process to determine qualifying laboratories listed on its website, including a sample certificate of analysis.

Enacts new GS 18D-105, which concerns additional requirements and restrictions for hemp-derived consumable products including packaging requirements, advertising restrictions, ingestible product restrictions for products containing hemp-derived consumable products (both in non-liquid and liquid form), inhalable product restrictions for vaporization restrictions for products containing hemp-derived consumable products. Provides for civil penalties ranging from $1,000 to $7,500. Directs that the clear proceeds of any civil penalty be remitted to the Fund. Authorizes suspension, revocation, or conditions placed on the operating hours of the licensee’s business placed upon the licensee’s licenses for a third violation committed within three years of the first violation. Allows for compromise in cases of revocation or suspension of licensure where the licensee may pay a penalty of not more than $8,000. Allows the Department to accept a compromise and suspend a license in the same case but prevents it from revoking a license if a compromise is accepted.

Contains a safe harbor provision for safe harbor hemp products and safe harbor manufacturer or storage facilities, which applies to products that contain hemp-derived compound or cannabinoids that are allowed to be manufactured, produced, or packaged in the State but not sold in the State in new GS 18D-105.2. Enacts GS 18D-106, which sets forth nine things that continue to not be prohibited by GS Chapter 18D.

Reserves Article 2 for future codification purposes.

Article 3.

Requires manufacturers, sellers, and distributors of hemp-derived consumable products in the State to obtain the appropriate license(s) from the Department either prior to commencing business or by July 1, 2026. Specifies that a person or entity engaged in more than one of the businesses listed is required to obtain only a single license. Lists five qualifications for licensure including that the licensee be at least 21 years of age and have not been convicted of a felony related to a controlled substance within 10 years in any state or federal jurisdiction. Requires annual renewal of licenses. Provides, in new GS 18D-302, for application fees ranging from $250 per location for seller licensees with 25 locations or less or who do not offer internet delivery in the state, to $15,000 for manufacturers whose income in the calendar year prior to application is $100,000 or more.  Sets renewal fees at $5,000 for manufacturers, $750 for distributors, and for sellers, the same amount as the initial licensing fee. Specifies that for those applicants engaging in more than one type of business requiring licensure under GS Chapter 18D, the fee will be the highest applicable.

Allows the Department to revoke or refuse to issue any license for: (1) failure to comply with or meet any of the licensure qualifications; (2) submission of false or misleading information in an application for licensure or renewal; (3) submission of false or misleading information in any report or information required by this Chapter to be submitted to the Department; and (4) failure to comply with civil penalties. Requires that proceedings for the assessment of civil penalties authorized in Article 1 be governed by GS Chapter 150B. Upon failure to pay a penalty, allows the Department to institute an action in the superior court of the county in which the person resides or has their principal place of business to recover the unpaid amount; specifies that this recovery does not relieve any party from any other penalty prescribed by law.

Requires the Department to develop and make available online an application for the license required by this Article. Authorizes the Department to adopt rules, amend, and repeal rules to implement GS Chapter 18D. Provides for monthly distribution of fee revenue to the ALE Division to cover enforcement costs. 

Article 4. 

Enacts new GS 18D-400 describing the enforcement authority of the ALE Division over GS Chapter 18D, including the ability to conduct random, unannounced inspections or general investigative inspections as described at locations where hemp-derived consumable products are sold or distributed to ensure compliance with the Chapter.  Authorizes the ALE Division to take samples for testing, if upon reasonable inspection, it determines a licensee's inventory may consist of products not in compliance with the packaging, labeling, and testing requirements discussed above. Requires testing to be conducted by high-performance liquid chromatography or a fit for purpose and validated test method and shall otherwise ensure that the cannabinoids are not modified during the testing process. Makes it a Class 2 misdemeanor for any person to resist or obstruct an ALE Division agent attempting to make a lawful inspection. Specifies that refusal by a licensee or by any employee of a licensee to permit ALE Division agents to enter the premises to make an inspection is cause for suspension, revocation, or other action against the licensee.  Instructs that an employee making a reasonable request that the ALE Division wait for a manager to arrive on the premises prior to inspection does not constitute a refusal.  Requires the ALE Division to report all violations to the Department of Revenue where civil penalties are authorized. Starting January 1, 2027, requires the ALE Division to submit an annual report to the General Assembly on its enforcement efforts under GS Chapter 18D and to post such reports on its website.  Enacts GS 18D-401 authorizing a law enforcement officer to seize any hemp-derived consumable product that is subject to forfeiture, and to provide for its safe storage until trial. Provides for disposition after a criminal trial and after a civil forfeiture proceeding as described.  Allows for an owner of seized property to apply for return of the products if no criminal charge has been made or no action for civil forfeiture has been commenced in connection with that product within a reasonable time after seizure. Prevents return if doing so would be unlawful.

Section 1.(b).

Makes conforming changes to GS 18B-500 (subject matter jurisdiction for investigation and enforcement by ALE Division agents).

Section 1.(c).

Specifies that as part of the costs in criminal actions in GS 7A-304, $600 should be ordered to be remitted to the ALE Division or agency that paid for laboratory services in cases where (1) defendant is convicted of a violation of GS 18D-103 and (2) as part of the investigation leading to the defendant's conviction, testing was conducted at a laboratory on products regulated under GS Chapter 18D.

Applies to all hemp-derived consumable products possessed, sold, distributed, or manufactured on or after July 1, 2026, and to all offenses committed on or after that date. 

Part II.

Repeals GS 90-94.1 (exemption under the NC Controlled Substances Act for use or possession of hemp extract), effective December 1, 2025.  Applies to offenses committed on or after that date.

Part III.

Recodifies Article 29A of GS Chapter 115C, consisting of GS 115C-407 to Part 7 of Article 7B of GS Chapter 115C consisting of GS 115C-77.

Modifies GS 115C-77 (school policies prohibiting tobacco on school grounds) as enacted by the above, as follows. Changes the entity responsible for adopting such written policies from the local boards of education to the governing bodies of public school units. Removes duties to implement and enforce such policies. Removes outdated language. Makes conforming changes.

Enacts new GS 115C-77.1 (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.

Applies beginning with the 2026-27 school year.