A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING CHAPTER 56 TO TITLE 46 SO AS TO REGULATE THE SALE AND DISTRIBUTION OF PRODUCTS CONTAINING HEMP-DERIVED CANNABINOID.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Title 46 of the S.C. Code is amended by adding:

 

    CHAPTER 56

 

    The Sale and Distribution of Products Containing Hemp-Derived Cannabinoid

 

    Section 46-56-10.  The purpose of this chapter is to regulate the sale and distribution of products containing a hemp-derived cannabinoid.

 

    Section 46-56-20.  As used in this chapter, unless the context otherwise requires:

    (1) "Batch" means a single stockkeeping unit with common cannabinoid input or a hemp flower of the same varietal and harvested on the same date manufactured during a defined cycle in such a way that it could be expected to be of a uniform character and should be designated as such.

    (2) "Department" means the Department of Agriculture.

    (3) "Hemp-derived cannabinoid":

       (a) means:

           (i) a cannabinoid other than delta-9-tetrahydrocannabinol, or anisomer derived from such cannabinoid, that is derived from hemp in a concentration of more than one tenth of one percent; or

           (ii) a hemp-derived product containing delta-9-tetrahydrocannabinol in a concentration of three tenths of one percent or less on a dry weight basis;

       (b) includes, but is not limited to:

           (i) Delta-8-tetrahydrocannabinol;

           (ii) Delta-10-tetrahydrocannabinol;

           (iii) Hexahydrocannabinol;

           (iv) Tetrahydrocannabinol acetate ester (THCo);

           (v) Tetrahydrocannabiphorol (THCp);

           (vi) Tetrahydrocannabivarin (THCv); and

           (vii) Tetrahydrocannabinolic acid (THCa); and

       (c) does not include:

           (i) Cannabichromene (CBC/CBCa/CBCv);

           (ii) Cannabicitran (CBT/CBTa);

           (iii) Cannabicyclol (CBL/CBLa);

           (iv) Cannabidiol (CBD/CBDa/CBDv/CBDp);

           (v) Cannabielsoin (CBE/CBEa);

           (vi) Cannabigerol (CBG/CBGa/CBGv/CBGm);

           (vii) Cannabinol (CBN/CBNa);

           (viii) Cannabivarin (CBV/CBVa);

           (ix) Hemp-derived feed products; or

           (x) Hemp-derived fiber, grain, or topical products.

    (4) "Manufacture" means to compound, blend, extract, infuse, cook, or otherwise make or prepare products containing a hemp-derived cannabinoid, including the processes of extraction, infusion, packaging, repackaging, labeling, and relabeling of products containing a hemp-derived cannabinoid.

    (5) "Producer" means a person or entity that manufactures hemp-derived cannabinoids or sells products containing hemp-derived cannabinoids to retailers.

    (6) "Proof of age" means a valid driver license or other government-issued identification card that contains a photograph of the person and confirms the person's age as twenty-one years of age or older.

    (7) "Retailer" means a person or entity that sells products containing a hemp-derived cannabinoid for consumption and not for resale.

    (8) "Serving" means a quantity of a hemp-derived cannabinoid product reasonably suitable for a single person's daily use.

    (9) "THC" means tetrahydrocannabinol.

 

    Section 46-56-30.  (A) It is an offense for a person to knowingly sell or distribute a product containing a hemp-derived cannabinoid to a person who is under twenty-one years of age or to purchase a product containing a hemp-derived cannabinoid on behalf of a person who is under twenty-one years of age.

    (B) It is an offense for a person to knowingly persuade, entice, send, or assist a person who is under twenty-one years of age to purchase, acquire, receive, or attempt to purchase a product containing a hemp-derived cannabinoid. This section does not preclude law enforcement efforts involving:

       (1) The use of a minor if the minor's parent or legal guardian has consented to this action; or

       (2) The use of a person under twenty-one years of age who is not a minor if the individual has consented to this action.

    (C) It is an offense to knowingly distribute samples of products containing a hemp-derived cannabinoid in or on a public street, sidewalk, or park.

    (D) It is an offense to knowingly sell or distribute a product containing a hemp-derived cannabinoid without having first obtained proof of age from the purchaser or recipient.

    (E) It is an offense for a person who is under twenty-one years of age to knowingly purchase, possess, or accept receipt of a product containing a hemp-derived cannabinoid or to knowingly present purported proof of age that is false, fraudulent, or not actually that person for the purpose of purchasing or receiving a product containing a hemp-derived cannabinoid.

    (F) A violation of this subsection is a Class A misdemeanor.

 

    Section 46-56-40.  (A) As used in this section:

       (1) "Counter" means the point of purchase at a retail establishment.

       (2) "Retail establishment" means a place of business open to the general public for the sale of goods or services and does not include a place of business for which entry is limited to persons twenty-one years of age or older.

    (B) Any product containing a hemp-derived cannabinoid shall be maintained behind the counter of a retail establishment in an area inaccessible to a customer.

    (C) A violation of this section is a Class A misdemeanor.

 

    Section 46-56-50.  (A) The department shall enforce this chapter in a manner that may reasonably be expected to reduce the extent to which products containing a hemp-derived cannabinoid are sold or distributed to persons under twenty-one years of age, and shall conduct random, unannounced inspections at locations where such products are sold or distributed to ensure compliance with this chapter.

    (B) The department shall submit an annual report to the general assembly describing in detail the department's enforcement efforts under this chapter. The report must also be published and made available to the public on the department's website.

 

    Section 46-56-60.  (A) There is levied a tax at the rate of five percent of the sales price of products containing a hemp-derived cannabinoid when sold at retail in this state.

    (B) The tax levied under this section is due and payable monthly on the first day of each month, and for the purpose of ascertaining the amount of tax payable under this section, it shall be the duty of all retailers making taxable sales on or before the twentieth day of each month to transmit to the Department of Revenue, upon forms prescribed by the Department of Revenue, returns showing gross sales during the preceding month.

    (C) All revenue generated from the tax levied pursuant to this section must be deposited into a special account in the state general fund and allocated to the Department of Agriculture to be used exclusively for the regulation of products containing a hemp-derived cannabinoid in this State.

 

    Section 46-56-70.  (A) A person or entity that is in the business of manufacturing or selling products containing a hemp-derived cannabinoid in this State, including as a producer or retailer, must obtain a license from the Department of Agriculture authorizing the person or entity to engage in that business prior to the commencement of business or by January 1, 2025, whichever is later.

    (B) In order to obtain and maintain a producer or retailer license under this section, a person must:

       (1) submit to the department information it prescribes as necessary for the efficient enforcement of this chapter;

       (2) pay to the department a fee of five hundred dollars for producers or two hundred fifty dollars per retailer per location; and

       (3) consent to reasonable inspection and sampling by the department of the person's inventory of products containing a hemp-derived cannabinoid.

    (C) A person is not eligible to obtain or maintain a producer or retailer license while serving a sentence for, or for ten years following completion of a sentence for, a drug-related felony offense in any state or federal jurisdiction.

    (D) A license issued pursuant to this section is valid for a period of one year and may be renewed annually. The department shall charge an annual renewal fee equal to the initial licensing fee.

    (E) The department is authorized to:

       (1) determine requirements for and issue licenses for the production of hemp in this State and for the manufacture or sale of products containing a hemp-derived cannabinoid in this State;

       (2) deny or revoke licenses and issue civil penalties up to one thousand dollars for each violation of this chapter or rules promulgated pursuant to this section; and

       (3) promulgate regulations to effectuate the purposes of this section.

    (F) The revenue collected from fees established under this section must be deposited in the state general fund and used exclusively for the administration of this section.

    (G) An entity that is in the business of manufacturing or selling products containing a hemp-derived cannabinoid in this State, including a producer or retailer, may not be located within one thousand feet of a school, daycare facility, or other similar locations.

 

    Section 46-56-80.  (A) It is an offense for a person or entity to engage in the business of manufacturing, producing, or selling products containing a hemp-derived cannabinoid in this State without a valid license required by this chapter.

    (B) A violation of this section is a Class A misdemeanor. A product containing a hemp-derived cannabinoid that is sold or offered for sale in violation of this section is subject to seizure and forfeiture.

 

    Section 46-56-90.  (A) A product containing a hemp-derived cannabinoid must be tested after being manufactured to determine the presence and amounts of the following:

       (1) cannabinoids;

       (2) heavy metals;

       (3) microbials;

       (4) mycotoxins;

       (5) pesticides; and

       (6) residual solvents.

    (B) A producer or retailer must contract with a third party laboratory to provide the testing required by subsection (A). A third party laboratory performing such testing must be ISO 17025 accredited and be registered with the United States Drug Enforcement Agency.

    (C) Each batch manufactured must undergo testing and obtain a certificate of analysis by a third party laboratory qualified under subsection (B).

    (D) The department shall:

       (1) promulgate regulations specifying pass/fail action levels for safety and toxicity with respect to the testing required by subsection (A);

       (2) maintain and post on its website a registry of testing laboratories that are qualified to test intermediate manufactured material and finished products containing a hemp-derived cannabinoid; and

       (3) develop an application and process by which qualifying laboratories are listed on its website. The application submitted by a potentially qualifying laboratory must include a sample certificate of analysis issued by the applying laboratory.

    (E) An expiration date on the label of a product containing a hemp-derived cannabinoid must be no more than one year from the date of publication of the product's laboratory testing report required by subsection (A).

 

    Section 46-56-100. (A) A product containing a hemp-derived cannabinoid that is sold at retail must:

       (1) satisfy the child resistant effectiveness standards under 16 C.F.R. 1700.15(b)(1) when tested in accordance with the requirements of 16 C.F.R. 1700.20; and

       (2) be labelled with:

           (a) a list of ingredients and possible allergens and a nutritional fact panel;

           (b) the words "CANNABIS USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF CERTAIN CANNABINOIDS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE HEAVY MACHINERY. PLEASE USE EXTREME CAUTION.";

           (c) a statement that the product is not approved for any medical use by the United States Food and Drug Administration;

           (d) the words "KEEP OUT OF REACH OF CHILDREN. CONSULT YOUR PHYSICIAN BEFORE USE IF YOU ARE PREGNANT, BREASTFEEDING, OR TAKING ANY MEDICATIONS.";

           (e) if the product is ingestible, the amount of cannabinoid in each serving of the product, measured in milligrams;

           (f) the total amount of hemp-derived cannabinoid in the entire package, measured in milligrams;

           (g) the net weight of the product; and

           (h) an expiration date.

    (B) A retailer or producer of a product containing a hemp-derived cannabinoid shall not advertise, market, or offer for sale a product containing a hemp-derived cannabinoid by using, in the labeling or design of the product or product packaging or in advertising or marketing materials for the product trade dress, trademarks, branding, or other related imagery or scenery that depicts or signifies characters or symbols known to appeal primarily to persons under twenty-one years of age including, but not limited to, superheroes, comic book characters, video game characters, television show characters, movie characters, mythical creatures, and unicorns.

    (C) An ingestible product containing a hemp-derived cannabinoid shall not:

       (1) be sold in a serving that contains more than twenty-five milligrams, in the aggregate, of one or more hemp-derived cannabinoids; or

       (2) be formed into the shape of an animal or cartoon character.

 

    Section 46-56-110. (A) This chapter does not permit a person to:

       (1) undertake any task under the influence of a hemp-derived cannabinoid when doing so would constitute negligence or professional malpractice; or

       (2) operate, navigate, or be in actual physical control of a motor vehicle, aircraft, motorized watercraft, or any other vehicle while under the influence of a hemp-derived cannabinoid.

    (B) This chapter does not require:

       (1) an employer to accommodate the use of a hemp-derived cannabinoid in a workplace or an employee working while under the influence of a hemp-derived cannabinoid;

       (2) an individual or establishment in lawful possession of property to allow a guest, client, customer, or other visitor to use a hemp-derived cannabinoid on or in that property; or

       (3) an individual or establishment in lawful possession of property to admit a guest, client, customer, or other visitor who is impaired as a result of the person's use of a hemp-derived cannabinoid.

    (C) This chapter does not exempt a person from prosecution for a criminal offense related to impairment or intoxication resulting from use of a hemp-derived cannabinoid or relieve a person from any requirement under law to submit to a breath, blood, urine, or other test to detect the presence of a controlled substance.

    (D) This chapter does not:

       (1) limit the ability of an employer to establish, continue, or enforce a drug-free workplace program or policy;

       (2) create a cause of action against an employer for wrongful discharge or discrimination; or

       (3) allow the possession, sale, manufacture, or distribution of any substance that is otherwise prohibited by law.

 

SECTION 2.  This act takes effect upon approval by the Governor.

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