New Alabama Hemp Bill Headed to the Governor for Signature
Alabama’s new hemp bill, HB 445, has passed both the state House and Senate as of May 7, 2025. It is headed to the Governor for signature. [Editor’s note: Since publishing this article the Governor has signed the bill into law. It goes into effect January 1, 2026.]
The bill, which we anticipate will become law, places hemp product regulation under the AL Alcoholic Beverage Control Board (ABC). Only ABC licensees may be a manufacturer, wholesaler, or retailer of consumable hemp products. Retailer licenses are only available to liquor licensees, grocery stores, standalone location hemp stores, and pharmacies. State applications will require local approval.
Notably, the new hemp bill prohibits online sales, direct delivery, drive-through sales, or direct shipments within or into the state.
Smokable hemp products are prohibited, as are psychoactive cannabinoids created by chemical “synthesis, modification, or conversion of another cannabinoid.“
For hemp beverages and edibles, potency limits are 10mgs per serving of Total THC. A beverage serving size may not exceed 12 fluid ounces or 355 milliliters. All edible consumable hemp products must be individually wrapped in single serve packaging. One carton may not contain more than 40 milligrams of total THC. Topical and sublingual products may not contain more than 40 milligrams of total THC.
Products must be tested for “total THC”, which the bill defines as “THC + THCA”. Additionally, they must be tested for the “Percent of THC relative to original plant material (w/w).”
The new hemp bill creates an excise tax of 10% at retail. It contains packaging, labeling, and full panel testing requirements. The bill also appears to have a product registration process. The bill prohibits vending machine sales and all hemp products must be sold to those 21+.
Here is the “enrolled” version of the bill:
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May 7, 2025
This article was co-written by Kight Law attorneys Amber Lengacher and Rod Kight.
No commentary? Don’t you think this will kill the Hemp industry altogether? How will it survive without conversions?
Carol,
Thanks for reading and commenting. I agree with you that this bill is a setback for the hemp industry. In particular, the ban on THCa flower and DTC sales from outside the state are debilitating. Fortunately, though, the industry should be able to weather this and live to fight another day. Once Alabama realizes the disservice it’s doing to its small hemp businesses and the revenue it’s missing, I think things will change for the better.
Rod
You don’t mention when the new Hemp law will commence. No worries. Ok, yes, I will Google the answer, but I shouldn’t have to when reading an article about said new law.
You may wish to investigate why the Overtime Tax Exemption is quietly ending. Alabama is the only State to have this exemption, akin to the exemption law President Trump is trying to implement federally. The Alabama exemption law was signed in 2023. Why is it running for such a short time: 1 January 2024 -30 June 2025? Always boils down to $, right?
My husband was away 210 days last year, racking up a huge amount of overtime for long days, often 12-hour, 7 days a week. So this exemption benefit helped negate the separation pain and state taxes we didn’t have to pay.
Surprisingly, the Democrats are trying to keep the law in place, and the Republicans want the law to expire so they can implement other tax cuts. Hmmm, I don’t kno’bout’dat…..
Another investigation should be keeping the dream alive in that lottery sales will someday be allowed in Alabama. The politicians not changing this ancient constitutional law is ridiculous. They are telling us we don’t have the mindset to control our spending on Lotteries. Telling me I can’t spend $2 for a Powerball ticket? I want the ability to win a lottery. And yes, I know my chances of winning are 1:billion, etc, but currently my chances are 0%. Alas, I do drive to Florida or Mississippi for my tickets, which wastes gas and denies Alabama the tax revenue garnered from the Lottery, lunch, and whatnot. As evidenced by other states’ lottery tax earnings, Alabama’s monetary gain would be massive. This is public knowledge for certain, but lost on our politicians.
The lottery revenue would surely negate, or surpass, the money lost in keeping the overtime tax exemption in place. Politicians should use common sense, talk to each other about these topics, in conjunction, and realize that all sides can win.
If you read down to this point, I applaud you. I can get wordy, but passion drives me.
Now, don’t get me started on this Hemp Prohibition law……
Thank you and take care!
Cynthia- Thanks for your comments. Regarding Alabama, there is no date yet for when (or if) it will become law. Currently, it is awaiting the governor’s signature. As for the other issues you raise, I appreciate that they are important but this blog is focused on the cannabis industry so I don’t have any comment about them. -Rod
Regarding the Alabama law that was just signed by the Governor–it is difficult to understand how this could be enforced for direct to consumer sales via the internet? If the products remain legal at the federal level and the state has no jurisdiction in a another state, how can they go after the retailer? Also what are the implications for individuals who purchase it before the law goes into effect? Does possession of those products become illegal? So many quesitons. Thanks!
Don- Thanks for reading and commenting. You pose good questions. Unfortunately, these issues are somewhat complex and subtle. They’re not the type of things that that I can provide general legal responses to via the comments section of my blog. Feel free to click here to schedule a consultation if you would like to discuss these issues in depth. -Rod