H 3924 — Hemp-derived ingestible

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

       (3) distribute samples of consumable hemp product in or on a public street, sidewalk, or park;

or        (4) sell or distribute a consumable hemp product without having first obtained proof of age from the purchaser or recipient.

    (B) Any consumable hemp beverage product offered for retail sale shall be merchandised in such a manner including, but not limited to, signage, shelf-talkers, and stickers on cooler doors, so as to clearly indicate to consumers the product contains hemp-derived cannabinoids.

    (C) With the exception of consumable hemp beverages, it is a violation to fail to maintain any product containing consumable hemp products locked away or behind the counter of a retail establishment in an area inaccessible to the customer.

    (D) A person violating subsection (A) is guilty of a misdemeanor and, upon conviction:

       (1) for a first offense, must be fined not less than two hundred dollars nor more than three hundred dollars or imprisoned not more than thirty days, or both;

and        (2) for a second or subsequent offense, must be fined not less than four hundred dollars nor more than five hundred dollars or imprisoned not more than thirty days, or both.

    (E) Section 61-6-4080 is applicable to a person who is in violation of subsection (A)(1) for the sale or distribution of a consumable hemp product.

    (F) It is unlawful for a person under twenty-one years of age to:

       (1) knowingly purchase, possess, or accept receipt of a consumable hemp product;

or        (2) knowingly present purported proof of age that is false, fraudulent, or not actually that person for the purpose of purchasing or receiving a consumable hemp product.

    (G) A person violating subsection (F) is guilty of a misdemeanor and, upon conviction, must be fined not less than one hundred dollars nor more than two hundred dollars or must be imprisoned for not more than thirty days, or both.

    (H) A person eighteen years of age and older lawfully employed to serve or remove consumable hemp products, beer, wine, or alcoholic beverages in establishments licensed to sell these beverages is not considered to be in unlawful possession of the beverages during the course and scope of his duties as an employee.

The provisions of this subsection do not affect the requirement that a bartender must be at least twenty-one years of age.

      Section 56-46-30.  (A) The Department of Agriculture must enforce this chapter in a manner that may reasonably be expected to reduce the extent to which consumable hemp products are sold or distributed to persons under twenty-one years of age, and must conduct random, unannounced inspections at locations where such products are sold or distributed to ensure compliance with this chapter.

    (B) The Department of Agriculture must submit an annual report to the General Assembly describing in detail the department's enforcement efforts under this chapter.

The report also must be published and made available to the public on the department's website.

      Section 56-46-40.  (A) A person engaged in the business of selling at retail consumable hemp products must post in each location for which he has obtained a license a sign with the following words printed thereon:

"The possession of a consumable hemp product by a person under twenty-one years of age is a criminal offense under the laws of this State, and it is also unlawful for a person to knowingly give false information concerning his age for the purpose of purchasing a consumable hemp product."     (B) The South Carolina Department of Agriculture must prescribe by regulation the size of the lettering and the location of the sign on the seller's premises.

    (C) A retail seller of consumable hemp products who fails to display the sign required by this section is guilty of a misdemeanor and, upon conviction, must be fined not more than one hundred dollars or imprisoned for not more than thirty days, or both.

      Section 56-46-50.  (A) Nothing in this act shall be construed to:

       (1) legalize the sale, possession, or consumption of THC products by any person in this State where such products are otherwise prohibited by law;

       (2) permit the sale or distribution of any product that exceeds the established THC limits;

or        (3) prohibit the sale or distribution of any hemp product that is otherwise legal under state or federal law provided the sale or distribution is not in violation of this article.

    (B) This article does not limit or affect any other federal or state law more strictly regulating THC or controlled substances in this State.

      Section 56-46-60.  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 2.  If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

  SECTION 3.  During the first 180 days after the effective date of this act, law enforcement officers shall only issue warnings for violations of this article.

  SECTION 4.  This act takes effect upon approval by the Governor.

Renumber sections to conform.

Amend title to conform.

  W.

NEWTON for Committee.

    statement of estimated fiscal impact Explanation of Fiscal Impact State Expenditure This bill creates a new Chapter 56 in Title 46 pertaining to hemp-derived consumables.

This bill defines hemp-derived consumables and specifies that they may not contain chemically derived hemp cannabinoids.

This bill also sets serving size limits and creates requirements for the appearance of hemp-derived consumables.

There are currently no statutes in South Carolina law regarding hemp-derived consumables intended for human ingestion made from a naturally occurring cannabinoid, although it is illegal to possess or use marijuana with a THC content above 0.3 percent.

Currently, hemp-derived cannabinoid products are legal in the U.S.

pursuant to the United States Agriculture Improvement Act of 2018, otherwise known as the 2018 Farm Bill.

The Act of 2018 removed hemp, defined as cannabis and derivatives of cannabis with extremely low concentrations of delta-9-tetrahydrocannabinol (THC), no more than 0.3 percent THC on a dry weight basis, from the definition of marijuana in the Controlled Substances Act.

  This bill requires that any person or entity who sells hemp-derived consumables must hold a valid off-premises beer and wine permit or a retail liquor store license, as defined by Title 61.

This bill states that hemp-derived consumables may not be made available for on-premises consumption by a permitted or licensed person or entity.

This bill requires retailers of hemp-derived consumables to post signs at each permitted location that states the laws in relation to possession and purchasing hemp-derived consumables by people under the age of twenty-one.

The Department of Agriculture must prescribe the size, lettering, and location of signs through the use of regulations.

Additionally, failing to display the required sign is a misdemeanor offense that carries a fine of up to $100 or thirty days of imprisonment, or both.

This bill establishes several instances in which a permit holder authorized to sell hemp-derived consumables may have their permit revoked or suspended.

This bill also states that if hemp-derived consumables are sold by a person who does not have a valid permit, all hemp-derived consumables found on the premises of the person are considered contraband and must be seized by a peace officer.

  This bill creates several new offenses dealing with hemp-derived consumables.

This bill makes it illegal to sell a hemp-derived consumable to a person under twenty-one years old.

First offense violations of this provision are fined $200 to $300, or imprisoned for not more than thirty days, or both.

Second and subsequent offense violations must be fined $400 to $500, or imprisoned not more than thirty days, or both.

This bill also makes it illegal for a person to give false information concerning their age in order to purchase a hemp-derived consumable illegally.

Violations of this law are fined $100 to $200, or imprisoned for not more than thirty days, or both.

Further, this bill makes it illegal for a person to lawfully purchase a hemp-derived consumable from a licensed premises and give the product to a person who cannot lawfully purchase that product from the licensed premises.

First offense violations are subject to a fine of $200 to $300, or imprisonment for up to thirty days, or both.

Second offense violations are subject to a fine of $400 to $500, or imprisonment for up to thirty days, or both.

Additionally, this bill makes it illegal for a person to transfer or give hemp-derived consumables to a person under the age of twenty-one, with some exceptions.

First offense violations of this provision are subject to a fine of $200 to $300, or imprisonment of not more than thirty days, or both.

Second offense violations are subject to a fine of $400 to $500, or imprisonment of not more than thirty days, or both.

This bill also makes it illegal for a person under the age of twenty-one to purchase, attempt to purchase, consume or knowingly possess hemp-derived consumables, beer, ale, porter, wine or other similar malt or fermented beverage, with some exceptions.

Violators are guilty of a misdemeanor and must be fined $100 to $200 or imprisonment of up to thirty days, or both.

Additionally, violators must successfully complete an alcohol prevention education or intervention program approved by DAODAS.

This bill requires that during the first ninety days after the effective date of this act, law enforcement officers shall only issue warnings for violations.

This bill states that if a law enforcement officer has probable cause to believe that a person is under the age of twenty-one and has consumed hemp-derived beverages or alcohol, the law enforcement officer may request that the person submits to any available alcohol screening test using a device approved by SLED.

Testing must be under the direct supervision of a law enforcement agency, and the agency must have a person's parental consent.

This bill also makes it illegal to have a hemp-derived beverage in an open container while located upon public highways or highway rights of way.

Any violations of this provision are guilty of a misdemeanor and subject to a fine of not more than $100 or imprisonment of up to thirty days.

  This bill also requires that establishments offering hemp-derived consumable products may not be located within one thousand feet of a church or elementary, middle, or high school.

  Additionally, this bill states that nothing in Chapter 56 of Title 46 authorizes the consumption, possession, or purchase of a hemp-derived consumable that contains tetrahydrocannabinol (THC).

Although, the serving size requirements of this bill state that a hemp-derived consumable may contain five-tenth milligrams or less of delta-9-tetrahydrocannabinol which is a type of tetrahydrocannabinol.

This bill takes effect upon approval by the Governor.

  This bill creates penalties for new misdemeanor offenses dealing with hemp-derived consumables.

This bill may result in an increase in the number of summary court cases and circuit court cases and potentially the number of incarcerations, which may increase the workload of the court system and the Commission of Indigent Defense, the Commission on Prosecution Coordination, PPP, and local jails.

The potential increase in expenses for each agency will depend upon the increase in the number of cases, the number of repeat offenders, and the number of incarcerations.

These agencies indicate that if this bill results in a significant increase in the workload, then an increase in General Fund appropriations may be requested.

  The Department of Corrections indicates that this bill will have no impact on the agency as this bill creates offenses that are subject to up to 30 days of imprisonment and the department only receives inmates sentenced to more than 90 days.

Those sentenced to 90 days or less remain in local detention centers.

  South Carolina Law Enforcement Division.

SLED is required to enforce the provisions of Title 61 which regulates beer, wine, and spirits.

This bill places enforcement of the new hemp-derived consumable provisions under Title 61 and thereby creates new responsibilities for the department.

SLED indicates that to properly enforce the provisions of this bill, expenses for the department will increase by approximately $2,027,000, including $1,365,000 recurring expenses beginning in FY 2025-26 and $662,000 non-recurring expenses in FY 2025-26.

Recurring expenses consist of expenditures for 10.0 new FTEs including approximately $148,000 for salary and fringe for 1 Lieutenant responsible for supervising the new agents, $852,000 for salary and fringe and $55,000 for overtime salary and fringe for 8 Regional Agents responsible for carrying out the day-to-day functions of the narcotics unit, and $64,000 for salary and fringe for 1 Administrative Assistant responsible for providing administrative support for the narcotics unit.

Recurring expenses also include approximately $76,000 for gas, $7,000 for phones with hotspot capabilities, $14,000 for mobile and portable 800 radio service, $5,000 for other recurring costs, $5,000 for uniform replacements, $15,000 for training and travel, $11,000 for technology licenses, $108,000 for 1/5 vehicle replacements, and $5,000 for evidence and storage destruction.

Non-recurring expenses for agents include $540,000 for vehicles, $27,000 for protective vests and covers, $10,000 for Glocks, duty belts, and holsters, $10,000 for AR-15s, $41,000 for uniforms, boots, raingear, protective gloves, handcuffs, PPE, and other expenses, and $30,000 for computer equipment.

Therefore, SLED anticipates requesting approximately $1,365,000 of recurring General Fund appropriations beginning in FY 2025-26 and $662,000 of non-recurring General Fund appropriations in FY 2025-26 to fund the expenses due to this bill.

  Judicial.

This bill creates several summary court misdemeanors related to the possession and sale of hemp-derived consumables.

Judicial indicates that the possession and sale of hemp-derived consumables is not currently covered by state law.

Judicial reports that this bill would require summary courts to hear additional misdemeanor cases, which they would do in their ordinary course of business;

however, it is impossible to precisely gauge the impact this bill will have on summary court caseloads as there is no data available to estimate the increase in caseloads.

Judicial indicates that while summary courts are locally funded, Judicial provides some resources such as court interpreters to the summary courts.

Judicial anticipates that the increase in cases and associated resources can be initially managed within existing appropriations.

However, if this bill results in a significant increase in summary court cases and, consequently, in state resources such as court interpreters, Judicial will request an increase in General Fund appropriations.

  Department of Agriculture.

This bill requires the Department of Agriculture to prescribe by regulation, the size of the lettering and location of placement of the sign required by this bill for retailers.

The Department of Agriculture indicates that this bill will have no impact on the department as any increase in workload is expected to be minimal and can be managed with existing staff and resources.

  Department of Alcohol and Other Drug Abuse Services.

This bill creates additional workload for DAODAS as it requires the department to approve an alcohol prevention education or intervention program of a minimum of 8 hours with a cost not exceeding $150.

DAODAS indicates that any increase in workload can be managed with existing staff and appropriations as the department has existing staff with subject matter expertise to review and approve programs provided by local services providers.

  Department of Revenue.

DOR must administer the provisions of Title 61 and has the sole and exclusive power to issue all licenses, permits, and certificates provided for in this title.

DOR currently issues beer and wine permits and retail liquor licenses during the department's normal course of business.

DOR anticipates that this bill may have a minimal impact on the department in order to update forms, systems, and website information and indicates that any increase in workload can be managed with existing resources.

  State Revenue This bill requires that any person or entity who sells hemp-derived consumables must hold a valid off-premises beer and wine permit or a retail liquor store license, as defined by Title 61.

Off-premises beer and wine permits are currently subject to a $300 non-refundable filing fee and a $600 biennial fee for the retail permit.

A separate off-premises beer and wine permit is required for each separate place of business.

Retail liquor store licenses are currently subject to a $200 non-refundable filing fee and a $1,400 biennial renewal fee.

  This bill may increase General Fund revenue by an undetermined amount due to the increase in off-premises beer and wine permits and retail liquor store licenses fees.

Some retailers that currently offer hemp-derived consumables already hold valid off-premises beer and wine permits or retail liquor store licenses due to the nature of their businesses.

However, some existing retailers will be required to obtain such licenses, including some vape and smoke shops, or otherwise cease selling hemp-derived consumables.

There is no data available to estimate the total number of businesses that currently sell hemp-derived consumables but do not have the permit or license required by this bill and that will choose to continue selling these consumables, thus requiring either an off-premises beer and wine permit or a retail liquor store license.

Therefore, the number of new off-premises beer and wine permits and retail liquor licenses that will be issued and the associated fees that will be collected are unknown.

Furthermore, some businesses who currently have on-premises consumption licenses or permits as well as brewpubs, breweries, and wineries are already currently offering hemp-derived consumables available for on-premises and off-premises consumption.

While this bill specifies that hemp-derived consumables may not be made available for on-premises consumption by a person or entity in possession of a permit or license issued pursuant to Title 61, it does not address whether these businesses would be required to obtain a separate license in order to sell their hemp-derived consumable products for off-premises consumption;

and thereby, the number of businesses that currently sell hemp-derived consumables and hold a permit or license pursuant to Title 61, other than the off-premises beer and wine permit or retail liquor store license, and that may be required to obtain an additional permit or license pursuant to Title 61 in order to sell their hemp-derived consumable products for off-premises consumption is unknown.

Therefore, the total increase to General Fund revenue due to the increase in off-premises beer and wine permits and retail liquor store licenses fees is undetermined.

  This bill may result in a change in the fines and fees collected in court.

Court fines and fees are distributed to the General Fund, Other Funds, and local funds.

Therefore, RFA anticipates that this bill may result in a change to General Fund and Other Funds revenue due to the change in fines and fees collections in court.

  Local Expenditure This bill may result in an increase in the number of summary court cases and potentially the number of persons sentenced to jail time, which may increase the workload of the court system and local jails.

The potential increase in expenses will depend upon the increase in the number of cases and number of sentences.

Judicial anticipates that the increase in cases can be initially managed within existing appropriations;

however, they indicate that it is impossible to precisely gauge the impact this bill will have on summary court caseloads as there is no data available to estimate the increase in caseloads and thereby the increase in the local jail population.

Therefore, the potential increase in local expenses is undetermined.

    Frank A.

Rainwater, Executive Director Revenue and Fiscal Affairs Office   _______                 A bill   TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING CHAPTER TO TITLE 46 SO AS TO REGULATE THE SALE OF HEMP-DERIVED CONSUMABLES, AMONG OTHER THINGS.

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