New Hemp Product Regulations Create Uncertainty in Alabama

News Summary

Alabama’s new regulatory law, HB445, imposes strict regulations on hemp-derived THC products, including taxes and packaging requirements. Business owners are anxious about compliance and sales as unclear communication from the ABC Board adds to the confusion. The law aims to limit youth access to these products but has led to a decline in sales and uncertainty about the future of the industry.

Alabama — The rollout of a new regulatory law, HB445, has created uncertainty for businesses selling hemp-derived THC products in Alabama. This legislation, passed in May, will place stricter regulations on these products, including a 10% tax, restrictions on certain items, and new requirements for packaging, labeling, and testing. The law is set to take effect on July 1, 2025, but some provisions have implementation dates pushed to January 1, 2026, leaving business owners anxious about how to manage product sales and inventory in the meantime.

Local establishments like The Green Room in Montgomery specialize in selling THC and CBD products derived from hemp, highlighting the impact of these new regulations. Business owners report receiving unclear communication from the Alabama Alcoholic Beverage Control (ABC) Board regarding how to comply with the upcoming changes. The uncertainty has led to confusion and declining sales, as customers hesitate to purchase products that may soon be illegal.

Jennifer Boozer, the owner of CannaBama in Mobile, expressed frustration over the chaos created by the lack of clarity surrounding the law. She is among many business figures who are grappling with critical decisions that could affect their operations. The new law imposes significant changes, such as limiting THC content in gummies to 10 milligrams per piece and requiring individual packaging that adheres to new batch limits. This is a stark contrast to current product offerings at some outlets, like The Green Room, which sells high-potency gummies containing as much as 725 milligrams of THC.

As the effective dates for different provisions approach, there is growing anxiety among Alabama’s hemp product sellers. Marty Schelper, founder of the Alabama Cannabis Coalition, noted that small business owners are particularly impacted by the law’s unclear timelines. The ABC Board, responsible for developing specific rules and licensing requirements, has indicated that it will issue notifications to businesses as details become available, but the timeline for this communication remains uncertain.

The aim of HB445 is to mitigate youth access to hemp-derived products, while also allowing adults to use these products responsibly for issues such as pain, anxiety, and sleep disturbances. However, as confusion looms, both Boozer and representative business owners have reported a decline in sales as customers become cautious. With Alabama’s medical cannabis legalization efforts facing delays, consumers looking for alternatives also find their options dwindling.

Errors in compliance and labeling are a growing concern among businesses. Owners fear that failure to meet the new requirements could lead to costly shutdowns. Activists and business owners have staged protests, calling for reconsideration of the law and pushing for less restrictive measures that would better foster the growth of the commercial hemp market while still addressing community safety concerns.

Public comments during legislative hearings revealed a divisive stance among lawmakers regarding the issue. Some representatives argue that while regulation is necessary to protect minors, the current stance may also hinder the business landscape without offering adequate protection for youth. The weathered and complex nature of Alabama’s hemp industry reflects a need for balancing regulation with economic viability.

In a state where the hemp market is still developing, the path forward for these businesses remains uncertain. The future of the industry may rest on how well the ABC Board communicates the new provisions and assists in implementation, as hemp product sellers navigate the complexities of compliance in a shifting regulatory environment.