New regulations strangle Alabama's hemp businesses. Retailers face licensing hurdles, forcing shutdowns and lost revenue as red tape delays legal operations.
Alabama's Wild West of unregulated hemp sales after federal legalization came to an end in December, when hundreds of CBD shops, smoke shops, liquor stores, bars, restaurants, and gas stations selling hemp products in the state were forced to remove their hemp cannabinoid products—and hemp-only shops were forced to shut down—until they could be licensed under a law passed in May.
That measure, House Bill 445, banned the sale of hemp-derived THC in smokeable form and put a limit of 10 milligrams of hemp-derived THC per beverage serving. It also required that edibles be individually wrapped and capped topical ointments containing THC at 40 milligrams. It also barred online, mail order, or direct delivery sales to consumers.
While such rules allow for the sales of hemp-derived THC in some circumstances, other provisions of the law are proving to be real obstacles for businesses hoping to get legal and get back to business. One provision requires anyone seeking a hemp license to also acquire a liquor license from the state Alcohol Beverage Control Board (ABC), which is assigned to regulate the hemp industry. The other provision bars the ABC from granting hemp licenses until localities pass ordinances allowing them.
Now, more than three months after the new law went into effect, fewer than a dozen businesses statewide have managed to jump through those hoops and get hemp licenses, according to ABC data.
"I don’t know of any stores now that have gotten their specialty hemp retail license yet," Mobile hemp store owner Ocean Jones told the local media outlet Lagniappe. "We started our application before Christmas."
Jones said he had worked for years to get his store, Healthy Harvest CBD, up and running, and now he's having to paint houses to earn money while he waits for the city of Mobile and the ABC to provide licensing.
"I’ve got a painting company, and I also do marketing," Jones said. "If it was not for that, especially the painting company, we would have been screwed."
Cottage Hill Package Store owner Andrew Manas is still open, but his hemp beverage inventory is locked down as he waits for the city and the ABC to proess his license.
"I’m getting probably 10 to 15 phone calls every single day from people asking, ‘Do you sell them? Can you sell them?’" Manas said. "It’s not even the younger people that are wanting to do this instead of drinking. It’s some of these old … A lot of our clientele are older people. They needed it for pains and aches and all that, and sleep and stuff like that. So those are the ones that are really getting hurt."
The ABC says it will only process licenses once city councils have approved them, but local politicians are pointing a finger back at the ABC, saying they had no guidance from the agency.
"It kind of negated our previous ordinances [on hemp]," Foley Mayor Ralph Hellmich said. "We’re trying to figure out how to do this. We’ve been talking to other cities in Baldwin County. They’re somewhat confused, too. We’re just trying to take our ordinance and figure out what’s new about it and how it fits into this new licensing. The state kicked the can down the road to us [cities] is what they did."
In Mobile, the city council had moved to allow hemp businesses to stay open by drafting an ordinance giving them 90 days while the city worked on an ordinance addressing the new state law, but the ABC deemed that effort insufficient.
For the city of Mobile, ABC deemed previous efforts to allow hemp businesses to stay open while the council drafted a new ordinance insufficient.
That effort was a February resolution giving established businesses 90 days to remain open while the city worked on local ordinances to address the new state law.
"Everyone was understanding that we had 90 days to be able to obtain the license from the state, but you could continue to sell," Manas said. "But then I talked to an ABC agent. He said, ‘No, we’re above the city, and you need that license.’ Licenses are just sitting there because it’s got to get approval from the city first, and then it goes to the state."
Mobile Director of Communications Jason Johnson told Lagniappe city officials had also been frustrated by the length of time it is taking to get licenses processed under the new law.
"I think it takes some adjustment and getting used to," Johnson said. "The mayor was expressing frustration, but also, I think he understands that anytime anything new happens, you have to learn what that means and how to implement it. That’s what we’re trying to do."
The Mobile City Council has a new hemp product license ordinance on its agenda, but the earliest the city could approve it and begin processing licenses is March 31. Other southern Alabama cities also say they are working on hemp ordinances. Meanwhile, hemp business owners are stymied and consumers are out of luck.