Protecting Our Community Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 265

Short Title: Protecting Our Community Act. (Public)
Sponsors: Senators Johnson, Britt, and Lazzara (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 12, 2025
*S265-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO REGULATE T HE SALE AND DISTRIBU TION OF HEMP -DERIVED 2
CONSUMABLE PRODUCTS AND TO BAN THOSE PRO DUCTS FROM SCHOOL 3
GROUNDS. 4
The General Assembly of North Carolina enacts: 5
6
PART I. REGULATION OF HEMP-DERIVED CONSUMABLE PRODUCTS 7
SECTION 1.(a) The General Statutes are amended by adding a new Chapter to read: 8
"Chapter 18D. 9
"Regulation of Hemp-Derived Consumable Products. 10
"Article 1. 11
"Regulation of Hemp-Derived Consumable Products. 12
"§ 18D-100. Definitions. 13
Unless the context requires otherwise, the following definitions apply in this Article: 14
(1) ALE Division. – As defined in G.S. 18B-101. 15
(2) Batch. – The hemp-derived consumable product produced during a period of 16
time under similar conditions and identified by a specific cod e that allows 17
traceability. 18
(3) Department. – The Department of Revenue. 19
(4) Distributor. – A person or entity that delivers or sells hemp -derived 20
consumable products for the purpose of distribution in commerce. 21
(5) Exit package. – An opaque bag or other similar opaque covering provided at 22
the point of sale that satisfies the child-resistant effectiveness standards under 23
16 C.F.R. § 1700.15(b)(1) when tested in accordance with the requirements 24
of 16 C.F.R. § 1700.20 in which hemp -derived consumable product s are 25
placed by a seller after being sold to the ultimate consumer of the product. 26
(6) Final form product. – A product intended for consumer use and to be sold by 27
a seller. 28
(7) Hemp. – As defined in G.S. 90-87. 29
(8) Hemp-derived cannabinoid. – Any phytocannabinoid found in hemp, 30
including delta-9 tetrahydrocannabinol (delta-9 THC), tetrahydrocannabinolic 31
acid (THCA), cannab idiol (CBD), cannabidiolic acid (CBDA), cannabinol 32
(CBN), cannabigerol (CBG), cannabichromene (CBC), cannabicyclol (CBL), 33
cannabivarin (CBV), tetrahydrocannabivarin (THCV), cannabidivarin 34
(CBDV), cannabicitran (CBT), delta-7 tetrahydrocannabinol (delta-7 THC), 35
delta-8 tetrahydrocannibinol (delta-8 THC), or delta-10 tetrahydrocannibinol 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 265-First Edition
(delta-10 THC). This term also includes any synthetic cannabinoid derived 1
from hemp and contained in a hemp-derived consumable product. 2
(9) Hemp-derived consumable product. – A final form hemp product that is 3
intended for human ingestion or inhalation that contains a delta-9 THC 4
concentration of not more than three -tenths of one percent (0.3%) on a dry 5
weight basis , but may contain concentrations of other hemp -derived 6
cannabinoids, in excess of that amount. This term does not include hemp 7
products intended for topical application or seeds or seed-derived ingredients 8
that are generally recognized as safe by the United States Food and Drug 9
Administration (FDA). 10
(10) Hemp product. – As defined in G.S. 90-87. 11
(11) Independent testing laboratory. – A laboratory that meets all of the following 12
conditions: 13
a. Holds an ISO 17025 or equivalent accreditation or is registered with 14
the Drug Enforcement Administration (DEA) in accordance with 21 15
C.F.R. § 1301.13. 16
b. Does not have a direct or indirect interest in the entity whose pr oduct 17
is being tested. 18
c. Does not have a direct or indirect interest in a facility that cultivates, 19
processes, distributes, dispenses, or sells hemp -derived consumable 20
products in this State or any other jurisdiction. 21
d. Has entered into a compliance agreement with the ALE Division to 22
conduct tetrahydrocannabinol concentr ation sampling and testing 23
using the high-performance liquid chromatography (HPLC) or a fit for 24
purpose and validated testing method. 25
(12) Ingestion. – The process of consuming hemp th rough the mouth, by 26
swallowing into the gastrointestinal system or through tissue absorption. 27
(13) Inhalation. – The process of consuming hemp into the respiratory system 28
through the mouth or nasal passages. 29
(14) License. – A license issued in accordance with this Chapter. 30
(15) Manufacture. – To c ompound, blend, extract, infuse, cook, or otherwise 31
manipulate hemp or a hemp-derived cannabinoid to make, prepare, or package 32
hemp-derived consumable products. 33
(16) Manufacturer. – Any person or entity who, at a commercial establishment, 34
engages in the process of manufacturing, preparing, or packaging of 35
hemp-derived consumable products. 36
(17) Producer. – Any person or entity that engages in the process of farming and 37
harvesting hemp that is intended to be used in the manufacture of a 38
hemp-derived consumable product. 39
(18) Raw hemp extract. – Hemp extract not intended for consumer use. 40
(19) Seller. – Any person who sells a hemp -derived consumable product to the 41
ultimate consumer of the product, including an online seller. 42
(20) Serving. – A quantity of a hemp -derived consumable product reasonably 43
suitable for a person's use in a single day. 44
"§ 18D-101. Sales restrictions on hemp-derived consumable products. 45
(a) Restrictions. – No person shall do any of the following: 46
(1) Knowingly, or having reason to know, sell a hemp-derived consumable 47
product to a person who is under 21 years of age. Any seller that sells a 48
hemp-derived consumable product on an internet website shall verify the age 49
of any prospective purchaser and shall use a method of delivery that requires 50
General Assembly Of North Carolina Session 2025
Senate Bill 265-First Edition Page 3
the signature of a person at least 21 years of age before the hemp -derived 1
consumable product is released. 2
(2) Engage in the business of selling a hemp-derived consumable product without 3
a valid license issued in accordance with this Chapter. 4
(3) Knowingly, or having reason to know, sell at retail a hemp-derived 5
consumable product that has a concentration of more than three-tenths of one 6
percent (0.3%) on a dry weight basis of delta-9 tetrahydrocannabinol. 7
(4) Knowingly, or having reason to know, sell a hemp -derived consumable 8
product that is not contained in an exit package or a child-resistant package. 9
(5) Knowingly, or having reason to know, sell at retail or on an internet website 10
offering delivery in this State, a hemp-derived consumable product that is not 11
in compliance with G.S. 18D-105. 12
(6) Knowingly, or having reason to know, sell at retail hemp flower or a product 13
containing hemp flower that is not accompanied by a certificate of analysis 14
issued within the previous 12-month period demonstrating that the hemp 15
flower or product containing hemp flower has a concentration of no more than 16
three-tenths of one percent ( 0.3%) on a dry weight basis of delta -9 17
tetrahydrocannabinol. 18
(b) Civil Penalties. – Violation of this section shall have the following penalties: 19
(1) For the first violation, the Department may impose a civil penalty of no more 20
than five hundred dollars ($500.00). 21
(2) For the second violation within three years, the Department may impose a 22
civil penalty of no more than seven hundred fifty dollars ($750.00). 23
(3) For the third violation within three years of the first violation, the Department 24
shall impose a civil penalty of no more than one thousand dollars ($1,000) and 25
suspend the seller's license for one year. 26
(4) For a fourth or subsequent violation within three years of the first violation, 27
the Department shall impose a civil penalty of no more than two thousand 28
dollars ($2,000) and revoke the seller's license. 29
(c) Compromise. – In any case in which the Department is entitled to suspend or revoke 30
a seller's license, the Department may accept from the seller an offer in compromise to pay a 31
penalty of not more than three thousand dollars ($3,000). The Department may either accept a 32
compromise or revoke a license, but not both. The Department may accept a compromise and 33
suspend the license in the same case. 34
(d) Testing Fee. – In any case in which the Department imposes a penalty pursuant to 35
subsection (b) of this section, for a violation of subdivision (4) of subs ection (a) of this section, 36
the seller shall also pay to the Department the actual costs paid by the ALE Division for testing 37
of the samples resulting in the violation. Any fee collected pursuant to this subsection shall be 38
remitted to the ALE Division. 39
(e) Defenses. – It is a defense to a violation of subdivision (1) of subsection ( a) of this 40
section if the seller does any of the following: 41
(1) Shows that the purchaser produced a drivers license, a special identification 42
card issued under G.S. 20-37.7 or issued by the state agency of any other state 43
authorized to issue similar official state special identification cards for that 44
state, a tribal enrollment card issued by a State or federally recognized Indian 45
Tribe, a military identification card, or a passport showing the purchaser's age 46
to be at least the required age for purchase and bearing a physical description 47
of the person named on the card reasonably describing the purchaser. 48
(2) Produces evidence of other facts that reasonably indicated at the time of sale 49
that the purchaser was at least the required age. 50
General Assembly Of North Carolina Session 2025
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(3) Shows that at the time of purchase, the purchaser utilized a biometric 1
identification system that demonstrated (i) the purchaser's age to be at least 2
the required age for the purchase and (ii) the purchaser had previously 3
registered with the seller or seller's agent a drivers license, a special 4
identification card issued under G.S. 20-37.7 or issued by the state agency of 5
any other state authorized to issue similar official state special identification 6
cards for that state, a military identification card, or a passport showing the 7
purchaser's date of birth and bearing a physical description of the person 8
named on the document. 9
(f) Proceeds of Civil Penalty. – The clear proceeds of any ci vil penalty imposed under 10
this section, including any penalty received as an offer in compromise, shall be remitted to the 11
Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. 12
(g) Forfeiture. – Any product sold in violation of subdivision (4) of subsection (a) of this 13
section shall be subject to forfeiture pursuant to the procedures set forth in G.S. 18D-401. 14
(h) Criminal Penalty. – Any person against whom a civil penalty has been im posed for 15
violation of subdivision (3) of subsection (a) of this section who commits a second violation of 16
subdivision (3) of subsection (a) of this section is guilty of a Class A1 misdemeanor. Any person 17
who commits a third or subsequent violation of subdivision (3) of subsection (a) of this section 18
is guilty of a Class H felony. 19
"§ 18D-101A. Sales and transfer restrictions on a producer. 20
(a) Restriction. – A producer shall not knowingly sell or in any way transfer hemp that 21
has been processed or prepared with the intent to be used in a hemp-derived consumable product 22
to any person or entity other than a licensee pursuant to this Chapter or any person or entity that 23
otherwise meets the requirements of the jurisdiction in which they reside or conduct business to 24
receive such material. 25
(b) Civil Penalties. – Violation of this section shall have the following penalties: 26
(1) For the first violation, the Department may impose a civil penalty of no more 27
than five hundred dollars ($500.00). 28
(2) For the second violation within three years, the Department may impose a 29
civil penalty of no more than seven hundred fifty dollars ($750.00). 30
(3) For the third violation within three years of the first violation, the Department 31
shall impose a civil penalty of no more than one thousand dollars ($1,000). 32
(4) For a fourth or sub sequent violation within three years of the first violation, 33
the Department shall impose a civil penalty of no more than two thousand 34
dollars ($2,000). 35
(c) Proceeds of Civil Penalty. – The clear proceeds of any civil penalty imposed under 36
this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with 37
G.S. 115C-457.2. 38
(d) Criminal Penalty. – Any person against whom a civil penalty has been imposed for 39
violation of this section who commits a second violation of this section is guilty of a Class A1 40
misdemeanor. Any person who commits a third or subsequent violation of this section is guilty 41
of a Class H felony. 42
(e) Applicability of this Section. – Nothing in this section shall be construed as 43
prohibiting a producer from selling or transferring hemp that is intended to be used in any lawful 44
product other than those regulated by this Chapter. 45
"§ 18D -102. Offenses involving the p urchase, attempted purchase, or possession of 46
hemp-derived consumable products by a person under 21 years of age. 47
(a) It is unlawful for any person to give a hemp-derived consumable product to anyone 48
less than 21 years old. 49
(b) It is unlawful for a person less than 21 years old to possess, purchase, or attempt to 50
purchase a hemp-derived consumable product. 51
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Senate Bill 265-First Edition Page 5
(c) It is unlawful for any person to enter or attempt to enter a place where hemp-derived 1
consumable products are sold or consumed, or to obtain or attempt to obtain hemp-derived 2
consumable products, or to obtain or attempt to obtain permission to purchase hemp-derived 3
consumable products, in violation of subsection (b) of this section, by using or attempting to use 4
any of the following: 5
(1) A fraudulent or altered drivers license. 6
(2) A fraudulent or altered identification document other than a drivers license. 7
(3) A drivers license issued to another person. 8
(4) An identification document other than a drivers license issued to another 9
person. 10
(5) Any other form or means of identification that indicates or symbolizes that the 11
person is not prohibited from purchasing or possessing a hemp-derived 12
consumable product under this section. 13
(d) It is unlawful for any person to permit the use of the person's drivers license or any 14
other form of identification of any kind issued or given to the person by any other person who 15
violates or attempts to violate subsection (b) of this section. 16
(e) Penalties. – 17
(1) Any person less than 21 years old who violates this section is guilty of a Class 18
2 misdemeanor. 19
(2) Any person at least 21 years old who violates this section is guilty of a Class 20
1 misdemeanor. 21
(3) Aiding or abetting a violation of this section shall be punished as provided in 22
subdivisions (1) and (2) of this subsection, and all other provisions of this 23
section shall apply to that offense. 24
(f) Nothing in this section prohibits an underage person from selling, transporting, or 25
possessing hemp-derived consumable products (i) in the course of employment if the 26
employment of the person for that purpose is lawful under applicable youth employment statutes 27
or (ii) if the individual has a recommendation for a hemp-derived consumable product from a 28
physician. 29
"§ 18D -103. Offenses involving the manufacture and distribution of hemp -derived 30
consumable products. 31
(a) Offenses. – It is unlawful for a manufacturer or distributor to do any of the following: 32
(1) Knowingly, or having reason to know, distribute samples of a hemp -derived 33
consumable product in or on a public street, sidewalk, or park. 34
(2) Engage in the business of manufacturing hemp-derived consumable products 35
as a home-based manufacturer. 36
(3) Engage in the business of manufacturing or distributing a hemp -derived 37
consumable product without a valid license issued in accordance with this 38
Chapter. 39
(4) Knowingly, or having reason to know, manufacture or distribute a 40
hemp-derived consumable product that has a concentration of more than 41
three-tenths of one percent (0.3%) on a dry weight basis of delta-9 42
tetrahydrocannabinol. 43
(b) Criminal Penalties. – A violation of this section is a Class A1 misdemeanor. 44
(c) Civil Penalties. – In addition to any criminal punishment authorized by this section, 45
for any violation of this section, the Department shall take one or more of the following actions 46
against the licensee: 47
(1) For a first violation, impose a civil penalty of no more than one thousand 48
dollars ($1,000). 49
(2) For a second violation within three years, impose a civil penalty of no more 50
than five thousand dollars ($5,000). 51
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 265-First Edition
(3) For a third violation within three years of the first violation, impose a civil 1
penalty of no more than seven thousand five hundred dollars ($7,500) and, at 2
the discretion of the Department: 3
a. Suspend the licensee's license for a specified period of time not longer 4
than three years. 5
b. Revoke the licensee's license. 6
c. Impose conditions on the operating hours of the licensee's business. 7
(d) Compromise. – In any case in which the Department is entitled to suspend or revoke 8
a manufacturer's or distributor's license, the Department may accept from the manufacturer or 9
distributor an offer in compromise to pay a penalty of not more than eight thousand dollars 10
($8,000). The Department may either accept a compromise or revoke a license, but not both. The 11
Department may accept a compromise and suspend the license in the same case. 12
(e) Testing Fee. – In any case in which the Department imposes a penalty pursuant to 13
subsection (c) of this section, for a violation of subdivision ( 4) of subsection (a) of this section, 14
the manufacturer or distributor shall also pay to the Department the actual costs paid by the 15
Department or the ALE Division for testing of the samples re sulting in the violation. Any fee 16
collected pursuant to this subsection shall be remitted to the ALE Division. 17
(f) Proceeds of Civil Penalty. – The clear proceeds of any civil penalty imposed under 18
this section, including any penalty received as an offer i n compromise, shall be remitted to the 19
Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. 20
(g) Defense. – It is a defense to a violation of subdivision (3) of subsection (a) of this 21
section if the manufacturer does all of the following: 22
(1) Recalls all hemp -derived consumable products from the same batch as the 23
product on which the violation is based. 24
(2) Has samples of the batch tested by an independent testing laboratory. The 25
sample size required for testing pursuant to this subdivision shall be five times 26
the number of units required pursuant to G.S. 18D-104(e) based on the size of 27
the batch at production, regardless of the number of units that are able to be 28
recalled. 29
(3) Provides certified results from the independent testing la boratory indicating 30
that the sample tested does not contain a concentration of more than 31
three-tenths of one percent (0.3%) on a dry weight basis of delta -9 32
tetrahydrocannabinol. 33
(h) Forfeiture. – Any product sold in violation of subdivision (3) of subsection (a) of this 34
section shall be subject to forfeiture pursuant to the procedures set forth in G.S. 18D-401. 35
"§ 18D-104. Testing prior to distribution. 36
(a) Requirement. – The manufacturer shall have a hemp-derived consumable product 37
tested prior to distribution to a distributor or before distributing the product to a seller . If the 38
hemp-derived consumable product is packaged in a manner t hat may be sold to the ultimate 39
consumer of the product when delivered to the distributor and the distributor does not open such 40
package, the distributor is not required to test the hemp -derived consumable product. If the 41
hemp-derived consumable product is not packaged in a manner that may be sold to the ultimate 42
consumer of the product when delivered to the distributor or the distributor does open such 43
package, the distributor shall have the hemp -derived consumable product tested prior to 44
distribution. The testing shall determine the presence and amounts of any of the substances listed 45
in subsection (b) of this section . No product that contains more than the maximum amount 46
indicated for any substance in subsection (b) of this section shall be distributed or sold in this 47
State. 48
(b) Substances Tested; Limitations. – Hemp-derived consumable products shall be tested 49
for the presence of and amount of the following substances and , wh ere applicable, shall not 50
exceed the amounts indicated: 51
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Senate Bill 265-First Edition Page 7
(1) Cannabinoids, not to exceed a concentration of three -tenths of one percent 1
(0.3%) of delta-9 tetrahyrdocannabinol. 2
(2) Heavy metals. 3
(3) Mycotoxins. 4
(4) Pesticides. 5
(5) Residual solvents. 6
(6) Any other controlled substance identified by the ALE Division. 7
(c) Laboratory Qualifications. – A manufacturer or distributor shall contract with an 8
independent testing laboratory to provide the testing required under subsection (a) of this section. 9
(d) Testing Method. – A laboratory providing testing required under subsection (a) of this 10
section shall use high-performance liquid chromatography, or a fit for purpose and validated test 11
method, for any separation and measurement required in the testing. 12
(e) Batch Testing. – A sample of each batch manufactured shall undergo the testing 13
required by subsection (a) of this section and shall obtain a certificate of analysis by a third-party 14
laboratory qualified under subsection (c) of this section. The size of sample required to be tested 15
shall be determined by the size of the batch as follows: 16
(1) For a batch containing 1 to 999 units, the required sample size is 1 unit. 17
(2) For a batch containing 1,000 to 4,999 units, the required sample size is 2 units. 18
(3) For a batch containing 5,000 to 9,999 units, the required sample size is 3 units. 19
(4) For a batch containing 10,000 or more units, the required sample size is 5 20
units. 21
(f) Expiration Date. – A hemp-derived consumable product shall have an expiration date 22
on the label that conforms with applicable federal law. 23
(g) Civil Penalties. – A violation of this section shall result in the Department taking one 24
or more of the following actions against the licensee: 25
(1) For a first violation, impose a civil penalty of no more than one thousand 26
dollars ($1,000). 27
(2) For a second violation within thre e years, impose a civil penalty of no more 28
than five thousand dollars ($5,000). 29
(3) For a third violation within three years of the first violation, impose a civil 30
penalty of no more than seven thousand five hundred dollars ($7,500) and, at 31
the discretion of the Department: 32
a. Suspend the licensee's license for a specified period of time not longer 33
than three years. 34
b. Revoke the licensee's license. 35
c. Impose conditions on the operating hours of the licensee's business. 36
(h) Compromise. – In any case in which the Department is entitled to suspend or revoke 37
a manufacturer's or distributor 's license, the Department may accept from the manufacturer or 38
distributor an offer in compromise to pay a penalty of not more than eight thousand dollars 39
($8,000). The Department may either accept a compromise or revoke a license, but not both. The 40
Department may accept a compromise and suspend the license in the same case. 41
(i) Proceeds of Civil Penalty. – The clear proceeds of any civil penalty imposed under 42
this section, including any penalty received as an offer in compromise, shall be remitted to the 43
Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. 44
(j) Department Duties. – The Department shall do all of the following: 45
(1) Maintain and post on its website a registry of testing laboratories that are 46
qualified to test intermediate manufactured material and finished 47
hemp-derived consumable products. 48
(2) Develop an application and process to determine qualifying laboratories to be 49
listed on the Department's website. The application shall require a potentially 50
General Assembly Of North Carolina Session 2025
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qualifying laboratory to submit a sample certificate of analysis issued by the 1
applying laboratory. 2
"§ 18D -105. Additional requirements and restrictions for hemp -derived consumable 3
products. 4
(a) Packaging Requirements. – A hemp-derived consumable product that is sold in this 5
State shall meet both of the following requirements: 6
(1) The product shall satisfy the child -resistant effectiveness standards under 16 7
C.F.R. § 1700.15(b)(1) when tested in accordance with the requirements of 16 8
C.F.R. § 1700.20. 9
(2) The product shall be labeled with consumer protection warnings in the form 10
of statements that cover all of the following: 11
a. A list of ingredients and major FDA allergens and a nutritional fact 12
panel or have a quick response code that can be scanned that directs 13
consumers to a website containing the list of ingredients and allergens 14
and a nutritional fact panel. 15
b. A statement that use while pregnant or breastfeeding may be harmful. 16
c. A statement that consumption of certain cannabinoids may impair 17
your ability to drive and operate heavy machinery. 18
d. A statement that the product is not approved by the United States Food 19
and Drug Administration. 20
e. A statement to keep out of reach of children. 21
f. A statement to consult your physician before use. 22
g. If the product is ingestible, the amount of hemp -derived cannabinoid 23
in each serving of the product, measured in milligrams. 24
h. The total amount of hemp-derived cannabinoid in the entire package, 25
measured in milligrams. 26
i. The net weight of the product. 27
j. A web address or a quick response code that can be scanned to access 28
a website providing the product's batch number, date received, date of 29
completion, and method of an alysis for the testing required under 30
G.S. 18D-106. 31
k. An expiration date in accordance with applicable federal law. 32
l. Manufacturer contact information. 33
(b) Advertising Restrictions. – A manufacturer, distributor, or seller of a hemp -derived 34
consumable product shall not advertise, market, or offer for sale the product by using, in the 35
labeling or design of the product or product packaging or in advertising or marketing materials 36
for the product trade dress, trademarks, branding, or oth er related materials, any imagery or 37
scenery that depicts or signifies characters or symbols known to appeal primarily to children, 38
including, but not limited to, superheroes, comic book characters, video game characters, 39
television show characters, movie characters, mythical creatures, unicorns, or any imitation of 40
the packaging or labeling of candy, cereals, sweets, chips, or other food products typically 41
marketed to children. 42
(c) Non-Liquid Ingestible Product Restrictions. – Any hemp -derived consumable 43
product intended for ingestion that is not a liquid and not intended for inhalation shall not do any 44
of the following: 45
(1) Be sold in a serving that contains more than 75 milligrams, in the aggregate, 46
of one or more of the following hemp-derived cannabinoids: 47
a. Delta-9 tetrahydrocannabinol. 48
b. Delta-7 tetrahydrocannabinol. 49
c. Delta-8 tetrahydrocannabinol. 50
d. Delta-10 tetrahydrocannabinol. 51
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(2) Be formed in the shape of an animal or cartoon character. 1
(c1) Liquid Ingestible Product Restrictions. – Any hemp -derived consumable product 2
intended for ingestion that is a liquid and not intended for inhalation shall not be sold in a serving 3
that contains more than 25 milligrams, in the aggregate, of one or more of the following 4
hemp-derived cannabinoids: 5
(1) Delta-9 tetrahydrocannabinol. 6
(2) Delta-7 tetrahydrocannabinol. 7
(3) Delta-8 tetrahydrocannabinol. 8
(4) Delta-10 tetrahydrocannabinol. 9
(c2) Inhalable Product for Vaporization Restrictions. – Any hemp -derived consumable 10
product intended for inhalation by vaporization shall not be sold in a container that contains more 11
than 5 milliliters of hemp-derived cannabinoids, in the aggregate, of one or more of the following 12
hemp-derived cannabinoids: 13
(1) Delta-9 tetrahydrocannabinol. 14
(2) Delta-7 tetrahydrocannabinol. 15
(3) Delta-8 tetrahydrocannabinol. 16
(4) Delta-10 tetrahydrocannabinol. 17
For the purposes of this subsection, "vaporization" includes the heating of hemp-derived oil 18
to release aerosolized hemp-derived cannabinoids. 19
(d) Civil Penalties. – A violation of this section shall result in the Department taking one 20
or more of the following actions against the licensee: 21
(1) For a first violation, impose a civil penalty of no more than one thousand 22
dollars ($1,000). 23
(2) For a second violation within three years, impose a civil penalty of no more 24
than five thousand dollars ($5,000). 25
(3) For a third violation within three years of the first violation, impose a civil 26
penalty of no more than seven thousand five hundred dollars ($7,500) and, at 27
the discretion of the Department: 28
a. Suspend the licensee's license for a specified period of time not longer 29
than three years. 30
b. Revoke the licensee's license. 31
c. Impose conditions on the operating hours of the licensee's business. 32
(e) Compromise. – In any case in which the Department is entitled to suspend or revoke 33
a manufacturer's or distributor 's license, the Department may accept from the manufacturer or 34
distributor an offer in compromise to pay a penalty of not more than eight thousand dollars 35
($8,000). The Department may either accept a compromise or revoke a license, but not both. The 36
Department may accept a compromise and suspend the license in the same case. 37
(f) Proceeds of Civil Penalty. – The clear proceeds of any civil penalty imposed under 38
this section, including any penalty received as an offer in compromise, shall be remitted to the 39
Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2. 40
"§ 18D-105.1. Conduct on licensed premises. 41
(a) Certain Conduct. – It shall be unlawful for a licensee or the licensee 's agent or 42
employee to knowingly allow any of the following kinds of conduct to occur on the licensed 43
premises: 44
(1) Any violation of this Chapter. 45
(2) Any violation of the controlled substances, gambling, or any other unlawful 46
acts. 47
(b) Supervision. – It shall be unlawful for a permittee to fail to superintend in person or 48
through a manager the business for which a license is issued. 49
"§ 18D-105.2. Safe harbor protection for goods not sold in State. 50
(a) This Article shall not apply to the following: 51
General Assembly Of North Carolina Session 2025
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(1) A safe harbor hemp product. 1
(2) A safe harbor manufacturer or storage facility. 2
(b) For the purposes of this section , a "Safe Harbor Hemp Product" means a 3
hemp-derived compound or cannabinoid, whether a finished product or in the process o f being 4
produced, that is permitted to be manufactured for distribution, produced for distribution, 5
packaged for distribution, processed for distribution, prepared for distribution, treated for 6
distribution, transported for distribution, or held for distribution in North Carolina for export 7
from North Carolina but that is not permitted to be sold or distributed in North Carolina. 8
(c) For the purposes of this section , a "Safe Harbor Manufacturer or Storage Facility " 9
means a facility that manufactures for dist ribution, produces for distribution, packages for 10
distribution, processes for distribution, prepares for distribution, treats for distribution, transports 11
for distribution, or holds for distribution a Safe Harbor Hemp Product. 12
"§ 18D-106. Construction of Article. 13
Nothing in this Article shall be construed to do any of the following: 14
(1) Permit a person to undertake any task under the influence of a hemp -derived 15
consumable product when doing so would constitute negl igence or 16
professional malpractice. 17
(2) Permit a person to operate, navigate, or be in actual physical control of a motor 18
vehicle, aircraft, motorized watercraft, or any other vehicle while under the 19
influence of a hemp-derived consumable product. 20
(3) Require an employer to accommodate the use of a hemp-derived consumable 21
product in a workplace or an employee working while under the influence of 22
a hemp-derived consumable product. 23
(4) Require an individual or establishment in lawful possession of property to 24
admit a guest, client, customer, or other visitor who is impaired as a result of 25
the person's use of a hemp-derived consumable product. 26
(5) Exempt a person from prosecution for a criminal offense related to impairment 27
or intoxication resulting from the use of a hemp-derived consumable product 28
or relieve a person from any requirement under law to submit to a breath, 29
blood, urine, or other test to detect the presence of a controlled substance. 30
(6) Limit the ability of an employer to establish, continue, or enforce a drug-free 31
workplace program or policy. 32
(7) Create a cause of action against an employer for wrongful discharge or 33
discrimination. 34
(8) Allow the possession, sale, manufacture, or distribution of any substance that 35
is otherwise prohibited by Article 5 of Chapter 90 of the General Statutes. 36
(9) Provide probable cause based solely on the odor or appearance of hemp or a 37
hemp product for the search of a person, vehicle, residence, business, or other 38
space. 39
"Article 2. Reserved for future codification purposes. 40
"Article 3. 41
"Licensing. 42
"§ 18D-300. Definitions. 43
The definitions contained in Article 1 of this Chapter apply to this Article as appropriate. 44
"§ 18D-301. Licensing requirements; qualifications; duration. 45
(a) Requirement. – Prior to the commencement of business or by July 1, 2026, whichever 46
is later, a person or entity engaged in this State in any business regulated by this Chapter and 47
listed in this subsection shall obtain a license to engage in that business from the Department. 48
Businesses engaging in one or more of the following are required to obtain a license pursuant to 49
this section: 50
(1) Manufacturing hemp-derived consumable products. 51
General Assembly Of North Carolina Session 2025
Senate Bill 265-First Edition Page 11
(2) Distributing hemp-derived consumable products. 1
(3) Selling hemp-derived consumable products. 2
(b) Qualifications. – In order to obtain and maintain a license under subsection (a) of this 3
section, a person shall meet all of the following criteria: 4
(1) Be at least 21 years old. 5
(2) Submit to the Department any information determined by the Department to 6
be necessary for the efficient enforcement of this Chapter. 7
(3) Have not been convicted of a felony relating to a controlled substance within 8
10 years in any state or federal jurisdiction. 9
(4) Consent to reasonable inspection by the ALE Division of the inventory of 10
products regulated by this Chapter to ensure compliance with this Chapter and 11
the taking of samples found to not be in compliance with the packaging, 12
labeling, and testing requirements of this section. 13
(5) Be current in filing all applicable tax returns to the State and in payment of all 14
taxes, interest, and penalties collectable pursuant to G.S. 105-241.22. 15
(c) Single License Required. – A p erson or entity engaged in more than one of the 16
businesses listed in subsection (a) of this section shall only be required to obtain a single license. 17
Upon application for a license, the person or entity engaged in more than one type of business 18
regulated by this Chapter must indicate on the license application all of the businesses listed in 19
subsection (a) of this section in which the business engages or intends to engage. A person or 20
entity applying for a license for more than one type of business listed in subsection (a) of this 21
section shall pay a single fee as provided in G.S. 18D-302(c). 22
(d) Duration. – A license issued pursuant to this Article is valid for a period of one year 23
and shall be renewed annually. 24
"§ 18D-302. Fees. 25
(a) Application Fee. – The application fee for a license required pursuant to this Article 26
shall be as follows: 27
(1) For a license to manufacture hemp -derived consumable products, a fee of 28
fifteen thousand dollars ($15,000). However, if an applicant submits proof that 29
the applicant's gross income for the calendar year prior to application was less 30
than one hundred thousand dollars ($100,000), the fee shall be one thousand 31
dollars ($1,000). 32
(2) For a license to distribute hemp-derived consumable products, a fee of two 33
thousand five hundred dollars ($2,500). However, if an applicant submits 34
proof that the applicant 's gross income for the calendar year prior to 35
application was less than one hundred thousand dollars ($100,000), the fee 36
shall be seven hundred fifty dollars ($750.00). 37
(3) For a license to sell hemp-derived consumable products at a retail location, or 38
online for delivery to a person within this State , a fee of two hundred fifty 39
dollars ($250.00) for each location or each internet website offering delivery 40
in this State . However, a single entity with more than 25 locations , internet 41
websites offering delivery in this State, or a combination of the two shall not 42
pay more than five thousand dollars ($5,000) and shall submit a list of all 43
locations and all internet websites offering delivery in this State to the 44
Department. 45
(b) Renewal Fee. – The renewal fee for a license issued pursuant to this Article shall be 46
as follows: 47
(1) For a license to manufacture hemp-derived consumable products, a renewal 48
fee of five thousand dollars ($5,000). 49
(2) For a license to distribute hemp -derived consumable products, a renewal fee 50
of seven hundred fifty dollars ($750.00). 51
General Assembly Of North Carolina Session 2025
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(3) For a license to sell hemp-derived consumable products at a retail location or 1
online for delivery to a person within this State , a renewal fee in the same 2
amount as the initial licensing fees established under subsection ( a) of this 3
section. 4
(c) For an application for or renewal of a license to engage in more than one business 5
listed in subsection (a) of G.S. 18D-301, the fee shall be the highest fee of those prescribed for 6
the types of business indicated on the application or renewal, as applied to that applicant or 7
licensee. 8
"§ 18D-303. Department authority to deny or revoke. 9
The Department may revoke or refuse to issue any license for any of the following: 10
(1) Failure to comply with or meet any of the qualifications required by 11
G.S. 18D-301(b). 12
(2) Submission of false or misleading information in an application for licensure 13
or renewal. 14
(3) Submission of false or misleading information in any report or information 15
required by this Chapter to be submitted to the Department. 16
(4) Failure to comply with civil penalties authorized by this Chapter. 17
"§ 18D-304. Civil penalties; procedure. 18
Proceedings for the assessment of civil penalties authorized in Article 1 of this Chapter shall 19
be governed by Chapter 150B of the General Statutes. If the person or entity assessed a civ il 20
penalty fails to pay the penalty to the Department, the Department may institute an action in the 21
superior court of the county in which the person resides or has their principal place of business 22
to recover the unpaid amount of the penalty. An action to recover a civil penalty under this 23
Chapter shall not relieve any party from any other penalty prescribed by law. 24
"§ 18D-305. Department to develop application, adopt rules, remit revenue. 25
(a) License Application. – The Department shall develop and make available online an 26
application for the license required by this Article. 27
(b) Rules. – The Department shall have authority to adopt, amend, and repeal rules to 28
carry out the provisions of this Chapter. 29
(c) Distribution of Revenue. – The revenue collected from fees established under this 30
Chapter shall be remitted to the ALE Division , on a monthly basis, to be used to cover costs 31
incurred by the ALE Division in enforcing the provisions of this Chapter. To the extent the funds 32
described in this subsection are deemed unappropriated, the funds are hereby appropriated for 33
the purpose set forth in this subsection. 34
"Article 4. 35
"Enforcement. 36
"§ 18D-400. ALE Division. 37
(a) Authority. – The Alcohol Law Enforcement Division of the Department of Public 38
Safety shall enforce the provisions of this Chapter in a manner that is reasonable to reduce the 39
extent to which hemp-derived consumable products are sold or distributed to persons under 21 40
years of age and shall conduct random, unannounced inspections at locations where 41
hemp-derived consumable products are sold or distributed to ensure compliance with the 42
provisions of this Chapter. If, upon reasonable inspection, the ALE Division determines a 43
licensee's inventory may consist of products not in compliance with the packaging, labeling, and 44
testing requirements of this Chapter, t he ALE Division is authorized to only take samples of a 45
licensee's inventory of hemp -derived consumable products considered noncompliant to be 46
submitted for testing in order to determine compliance with the provisions of this Chapter . To 47
procure evidence of violations of this Chapter, ALE Division agents shall have authority to 48
investigate the operation of e ach licensee under this Chapter and each licensed premises for 49
which a license has been issued under this Chapter, to make inspections that include viewing the 50
entire premises, including the examination of records, equipment, and proceeds related to the 51
General Assembly Of North Carolina Session 2025
Senate Bill 265-First Edition Page 13
manufacture or distribution of hemp-derived consumable products. The inspection authorized by 1
this section shall be made during normal business hours, and the scope of the inspection must be 2
reasonable and relevant to the safety and compliance of the licensee's products. 3
(b) Interference with Inspection. – Refusal by a licensee or by any employee of a licensee 4
to permit ALE Division agents to enter the premises to make an inspection authorized by 5
subsection (a) of this section shall be cause for suspension, revocation, or other action against the 6
licensee. It shall be a Class 2 misdemeanor for any person to resist or obstruct an agent attempting 7
to make a lawful inspection under this section. An employee making a reasonable request that 8
the ALE Division wait for a manager to arrive on the premises prior to inspection shall not 9
constitute a refusal. 10
(c) The ALE Division shall report to the Department of Revenue any violation of this 11
Chapter for which civil penalties are authorized, regardless of whether criminal charges have 12
been filed. 13
(d) Report. – Beginning January 1, 2027, the ALE Division shall submit an annual report 14
to the General Assembly describing in detail the ALE Division 's enforcement efforts under this 15
Chapter. The ALE D ivision shall also make the report required under this subsection available 16
on the ALE Division's website. 17
(e) Testing. – All testing of hemp products shall be conducted by high-performance liquid 18
chromatography or a fit for purpose and validated test method and shall otherwise ensure that the 19
cannabinoids are not modified during the testing process. 20
"§ 18D-401. Forfeiture of property. 21
(a) Seizure of Product. – For any hemp-derived consumable product subject to forfeiture, 22
a law enforcement officer is hereby authorized and empowered to seize and take possession of 23
such products. 24
(b) Custody until Trial. – A law enforcement officer seizing a product subject to forfeiture 25
shall provide for its safe storage until trial. 26
(c) Disposition after Criminal Trial. – The presiding judge in a criminal proceeding for 27
violation of G.S. 18D-103(a)(3) may take the following actions after resolution of a charge 28
against the owner or possessor of products subject to forfeiture under this section: 29
(1) If the owner or possessor of the product is found guilty of a violation of 30
G.S. 18D-103(a)(3), the judge shall order the product forfeited. 31
(2) If the owner or possessor of the product is found not guilty, or if the charge is 32
dismissed or otherwise resolved in favor of the owner or possessor, the judge 33
shall order the product returned to the owner or possessor. 34
(3) If the product is also needed as evidence at an administrative hearing, the 35
judge shall provide that the order does not go into effect until the Department 36
determines that the product is no longer needed for the administrative 37
proceeding. 38
(d) Disposition after Civil For feiture Proceeding. – Violations of G.S. 18D-101(a)(4) 39
shall be subject to forfeiture under the procedure set forth in G.S. 75D-5. 40
(e) Disposition of Forfeited Product. – Notwithstanding G.S. 75D-5(j), a judge ordering 41
forfeiture of property shall order the product destroyed. 42
(f) Return of Property . – Any owner of products seized for forfeiture may apply to a 43
judge to have the products returned to the owner if no criminal charge has been made or no action 44
for civil forfeiture has been commenced in connection with that product within a reasonable time 45
after seizure. The judge may not order the return of the product if possession by the owner would 46
be unlawful." 47
SECTION 1.(b) G.S. 18B-500(b) reads as rewritten: 48
"(b) Subject Matter Jurisdiction. – After taking the oath prescribed for a peace officer, an 49
alcohol law-enforcement agent shall have authority to arrest and take other investigatory and 50
enforcement actions for any criminal offense: 51
General Assembly Of North Carolina Session 2025
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(1) Occurring, encountered, or otherwise discovered on the premises of, or 1
elsewhere when the conduct relates to, a location under application for or 2
holding a permit issued by the North Carolina Alcoholic Beverage Control 3
Commission or the North Carolina Education Lottery Commission. 4
(1a) Occurring, encountered, or otherwise discovered on the premises of, or 5
elsewhere when the conduct relates to , a location holding a license issued 6
pursuant to Chapter 18D of the General Statutes. 7
(2) Encountered or otherwise discovered while investigating or enforcing matters 8
for the North Carolina Alcoholic Beverage Control Commission or the North 9
Carolina Education Lottery Commission or encountered or otherwise 10
discovered while investigating or enforcing the provisions of this Chapter, 11
Chapter 18C of the General Statutes, Chapter 18D of the General Statu tes, 12
G.S. 14-313, or Parts 1 and 2 of Article 37 of Chapter 14 of the General 13
Statutes. 14
(3) Encountered or otherwise discovered while carrying out any duty or function 15
assigned to the Division by law. 16
(4) Occurring in an agent's presence. 17
(5) When assisting another law enforcement agency." 18
SECTION 1.(c) G.S. 7A-304(a) reads as rewritten: 19
"(a) In every criminal case in the superior or district court, wherein the defendant is 20
convicted, or enters a plea of guilty or nolo contendere , or when costs are assessed against the 21
prosecuting witness, the following costs shall be assessed and collected. No costs may be 22
assessed when a case is dismissed. Only upon entry of a written order, supported by findings of 23
fact and conclusions of law, determining that there is just cause, the court may (i) waive costs 24
assessed under this section or (ii) waive or reduce costs assessed under subdivision (7), (8), (8a), 25
(11), (12), or (13) of this section. No court may waive or remit all or part of any cou rt fines or 26
costs without providing notice and opportunity to be heard by all government entities directly 27
affected. The court shall provide notice to the government entities directly affected of (i) the date 28
and time of the hearing and (ii) the right to b e heard and make an objection to the remission or 29
waiver of all or part of the order of court costs at least 15 days prior to hearing. Notice shall be 30
made to the government entities affected by first-class mail to the address provided for receipt of 31
court costs paid pursuant to the order. The costs referenced in this subsection are listed below: 32
… 33
(14) For the services of any laboratory facility, the district or superior court judge 34
shall, upon conviction, order payment of the sum of six hundred dollars 35
($600.00) to be remitted to the Alcohol Law Enforcement Division of the 36
Department of Public Safety (ALE Division) or agency that paid for the 37
laboratory services. The cost shall be assessed only in cases in which (i) the 38
defendant is convicted of a violation of G.S. 18D-103(a)(3) and (ii) as part of 39
the investigation leading to the defendant's conviction, testing was conducted 40
at a laboratory on products regulated under Chapter 18D of the Genera l 41
Statutes." 42
SECTION 1.(d) This section becomes effective July 1, 2026, and applies to all 43
hemp-derived consumable products possessed, sold, distributed, or manufactured on or after that 44
date and to all offenses committed on or after that date. 45
46
PART II. TECHNICAL CHANGES 47
SECTION 2.(a) G.S. 90-94.1 is repealed. 48
SECTION 2.(b) This section becomes effective December 1, 2025, and applies to 49
offenses committed on or after that date. 50
51
General Assembly Of North Carolina Session 2025
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PART III. PROHIBIT U SE OF HEMP -DERIVED C ONSUMABLE PRODUCTS O N 1
SCHOOL GROUNDS 2
SECTION 3.(a) Article 29A of Chapter 115C of the General Statutes, consisting of 3
G.S. 115C-407, is recodified as Part 7 of Article 7B of Chapter 115C of the General Statutes, 4
consisting of G.S. 115C-77. 5
SECTION 3.(b) Part 7 of Article 7B of Chapter 115C of the General Statutes, as 6
enacted by subsection (a) of this section, reads as rewritten: 7
"Part 7. Policy Prohibiting Use of Tobacco Products.School Grounds. 8
"§ 115C -77. Policy prohibiting tobacco use in school buildings, grounds, and at 9
school-sponsored events. 10
(a) Not later than August 1, 2008, local boards of education Governing bodies of public 11
school units shall adopt, implement, and enforce adopt a written policy prohibiting at all times 12
the use of any tobacco product by any person in school buildings, in school facilities , on school 13
campuses, and in or on any other school property owned or operated by the local school 14
administrative public school unit. The policy shall further prohibit the use of all tobacco products 15
by persons attending a school-sponsored event at a location not listed in this subsection when in 16
the presence of students or school personnel or in an area where smoking is otherwise prohibited 17
by law. 18
… 19
(d) The North Carolina Health and Wellness Trust Fund Commission shall work with 20
local boards of education to provide assistance with the implementation of this policy including 21
providing information regarding smoking cessation and prevention resources. Nothing in this 22
section, G.S. 143-595 through G.S. 143-601, or any other section prohibits a local board of 23
education governing body of a public school unit from adopting and enforcing a more restrictive 24
policy on the use of tobacco in school buildings, in school facilities, on school campuses, or at 25
school-related or school-sponsored events, and in or on other school property. 26
"§ 115C -77.1. Policy prohibiting use of hemp -derived consumable products in school 27
buildings, grounds, and at school-sponsored events. 28
(a) For purposes of this section, "hemp-derived consumable product" is a s defined in 29
G.S. 18D-100. 30
(b) Governing bodies of public school units shall adopt a written policy prohibiting at all 31
times the use of any hemp -derived consumable product by any person in school buildings, in 32
school facilities, on school campuses, on school buses or school transportation service vehicles, 33
and in or on any other school property owned or operated by the public school unit. The policy 34
shall further prohibit the use of all hemp-derived consumable products by persons attending a 35
school-sponsored event at a location not listed in this subsection when in the presence of students 36
or school personnel or in an area where the use of hemp -derived consumable products is 37
otherwise prohibited by law. 38
(c) The policy shall include at least all of the following elements: 39
(1) Adequate notice to students, parents, the public, and school personnel of the 40
policy. 41
(2) Posting of signs prohibiting at all times the use of hemp -derived consumable 42
products by any person in and on school property. 43
(3) Requirements that school personnel enforce the policy. 44
(d) The policy may permit hemp -derived consumable products to be included in 45
instructional or research activities in public school buildings if the activity is conducted or 46
supervised by the faculty member overseeing the instruction or research and the activity does not 47
include smoking, chewing, or otherwise ingesting or inhaling the hemp -derived consumable 48
product. 49
(e) Nothing in this section, G.S. 143-595 through G.S. 143-601, or any other section 50
prohibits a governing body of a public school unit from adopting and enforcing a more restrictive 51
General Assembly Of North Carolina Session 2025
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policy on the use of hemp-derived consumable products in school buildings, in school facilities, 1
on school campuses, or at school -related or school-sponsored events, and in or on other s chool 2
property." 3
SECTION 3.(c) This section is effective when it becomes law and applies beginning 4
with the 2026-2027 school year. 5
6
PART IV. EFFECTIVE DATE 7
SECTION 4. Unless otherwise provided, this act is effective when it becomes law. 8