Alabama’s cannabis landscape is undergoing a significant transformation as the Alabama Alcoholic Beverage Control (ABC) Board recently unveiled a comprehensive set of proposed rules governing the sale of consumable hemp products. These regulations are a direct response to House Bill 445 (HB 445), a controversial piece of legislation passed during the 2025 Legislative Session and signed into law by Governor Kay Ivey in May 2025. While HB 445 aims to establish a more controlled framework for the burgeoning hemp industry, the ABC Board’s proposed rules are intensifying concerns among retailers and manufacturers about their far-reaching implications and potential for market disruption. This news reflects a trending shift in the state’s approach to hemp-derived products, moving towards stricter oversight.
The Legislative Foundation: House Bill 445
HB 445, championed by Representative Andy Whitt of Harvest, was enacted with the stated purpose of safeguarding children and establishing a regulated market for hemp-derived intoxicating cannabinoids. The bill officially took effect on July 1, 2025, with full enforcement anticipated by January 1, 2026. Prior to this legislation, the sale of many hemp products operated with limited state-level oversight, leading to widespread availability, including in venues accessible to minors. The new law introduces several stringent provisions.
Key among HB 445’s mandates is the vesting of authority in the ABC Board to license and regulate all facets of consumable hemp products, from manufacturing and wholesale distribution to retail sales. The legislation explicitly prohibits the sale of these products to individuals under 21 years of age and imposes strict limits on tetrahydrocannabinol (THC) content: no more than 10 milligrams of total THC per single serving, with packages capped at 40 milligrams total THC. Furthermore, the bill outlaws all smokable hemp products, including vapes, buds, and flowers, and restricts sales to licensed brick-and-mortar establishments, effectively banning online sales, direct-to-consumer deliveries, and drive-through purchases. Retailers are also subject to new testing, labeling, and child-resistant packaging requirements, alongside a 10 percent excise tax on sales and various licensing fees. Non-compliance carries severe penalties, ranging from substantial fines to potential license revocation and even felony charges for business owners.
ABC Board’s Proposed Regulatory Framework
Building upon the foundation laid by HB 445, the Alabama ABC Board’s recently proposed rules delve deeper into the operational specifics for retailers. These new regulations demand enhanced record-keeping, requiring retailers to meticulously track all incoming consumable hemp products on a monthly basis and generate comprehensive sales receipts. A “zero-activity report” must also be filed for any month without hemp product sales. The rules reiterate HB 445’s stipulation that consumable hemp products must not contain intoxicating substances other than cannabinoids and mandate that edible products be individually wrapped. To manage potential disagreements, a “Hearing Commission” is slated for establishment to address licensee and applicant disputes.
Industry Concerns and Broader Implications
The proposed ABC Board rules have ignited a significant backlash from the Alabama hemp industry and small business owners. Organizations like the Alabama Wellness Collective, represented by general counsel Payne Baker, contend that these rules extend far beyond the scope of HB 445, imposing unreasonable burdens that could cripple local businesses. Critics highlight proposed packaging requirements, such as the elimination of traditional “pop-top” cans and mandatory two-step packaging for beverages—standards not even applied to alcoholic beverages. Such mandates, they argue, will dramatically inflate production costs, threatening the competitiveness of Alabama-based manufacturers and potentially driving innovation and jobs out of the state.
Retailers express apprehension about requirements that could force them to display hemp products “behind lock and key,” making them less accessible to the public. There are also concerns about the practicality of obtaining a Certificate of Analysis (CoA) that meets the ABC Board’s specific demands, which some industry participants claim cannot be produced by existing testing labs. Jennifer Boozer, owner of the now-defunct CannaBama, pointed out that the proposed rules broaden the definition of “smokable” products to include anything heated, such as vaporized products, a provision she argues was not explicitly in HB 445.
This regulatory overhaul is perceived by many as an overreach, placing stricter controls on hemp products than on alcohol, despite hemp being federally legal. Critics, including Birmingham Mayor Randall Woodfin, have voiced fears that these measures could stifle the state’s burgeoning hemp lifestyle industry, push consumers toward illicit markets, and represent a step backward in cannabis reform efforts. Calls for economic impact studies and the formation of a legislative task force to develop evidence-based policy underscore the desire for a more balanced approach. The ongoing legislative debate is further evidenced by a prefiled Senate Bill 1 for the 2026 session, which seeks to drastically alter HB 445’s framework, potentially limiting sales exclusively to pharmacies and reclassifying certain hemp compounds as controlled substances.
Looking Ahead
The ABC Board’s proposed rules are currently subject to a public comment period before final approval. The intense reactions from stakeholders signal that the regulatory journey for consumable hemp products in Alabama is far from over. This dynamic environment, characterized by evolving legislation and the continuous push and pull between regulation and industry growth, will shape the future accessibility and market viability of hemp-derived products across the state.
