SB255 Alabama 2025 Session

Summary

Primary Sponsor

Rodger SmithermanSenator

Democrat

Session

2025 Regular Session

Title

Cannabinoid products from hemp; sale regulated by Revenue Department, licensure required; tax imposed

Summary

SB255 would regulate hemp-derived novel cannabinoid products in Alabama by creating a licensing and testing regime, adding labeling and taxation, and creating a dedicated safety fund to protect the public.

What This Bill Does

It would establish a licensing system for selling novel cannabinoid products, with testing and labeling approvals required from the Department of Agriculture and Industries and oversight by the Department of Revenue. It would prohibit alcohol-licensed businesses from obtaining these licenses, require third-party testing and health-risk labeling, and require stores to have at least 80% of their merchandise as novel cannabinoid products. It also imposes a 6% sales tax on these products, deposits revenue into the Novel Cannabinoid Safety Fund for enforcement and safety, and sets penalties for violations.

Who It Affects

• Cannabinoid retailers and customers: Retailers must obtain a separate license for each location, have products tested and labeled, display the license and tax registration, and ensure at least 80% of merchandise is novel cannabinoid products; customers will buy products that are tested, labeled with cannabinoid content and health risks, and will pay a 6% tax.
• Alcohol-selling businesses and state regulators: Businesses that sell alcoholic beverages cannot obtain a cannabinoid retailer license; the Department of Revenue and Department of Agriculture and Industries will regulate testing, labeling, licensing, and enforcement, with penalties and a dedicated safety fund to support public safety.

Key Provisions

• Creates a Cannabinoid Retailer license administered by the Department of Revenue for selling novel cannabinoid products, effective January 1, 2026.
• Requires a separate license for each retail location and annual renewal; may require a criminal background check.
• Prohibits businesses that sell alcoholic beverages from obtaining a cannabinoid retailer license.
• Requires the Department of Agriculture and Industries to establish testing and labeling requirements and to approve products before sale.
• Requires third party independent laboratories to conduct testing of potency, purity, and safety and to follow standards set by the department.
• Requires labeling to show total cannabinoids per serving and health risks, reflecting the testing results.
• Requires retailers to have testing and labeling approval on file before selling any novel cannabinoid product at the licensed premises.
• Allows the Department of Revenue to impose additional licensee requirements, including security and reporting rules.
• Imposes a 6 percent sales tax on all novel cannabinoid products and requires retailers to collect and remit quarterly to the Department of Revenue.
• Creates the Novel Cannabinoid Safety Fund in the State Treasury to hold license fees, civil penalties, and tax proceeds for enforcement and public safety.
• Authorizes civil penalties up to 10,000 dollars for selling novel cannabinoid products without a license and directs penalties to the Safety Fund.
• Requires annual reporting to the Legislature starting in 2027 on licenses issued and total fees, taxes, and penalties, and fund usage.
• Effective date: the act becomes effective January 1, 2026; Sections 3, 4, and 9 become effective July 1, 2025.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Controlled Substances