Commercial cultivation, retail and marketing

Business licensing requirements

What licensing requirements apply to businesses seeking to cultivate, distribute, produce and sell cannabis products in your jurisdiction? What procedures, timeframes and fees apply in this regard, and on what grounds can a licence be revoked?

The possession, use, cultivation, and distribution of cannabis with a tetrahydrocannabinol (THC) concentration greater than 0.3% is prohibited under Alabama law (Sections 13a-12-211 to 13a-12-214 of the Code of Alabama 1975). Therefore, no business licenses are available to businesses seeking to cultivate, distribute, produce, or sell cannabis products in Alabama.

The Alabama Industrial Hemp Research Program Act contemplates licensing individuals and businesses to grow hemp for research purposes (Id. at Section 2-8-382). However, the Alabama Department of Agriculture and Industries has stated that the Alabama Industrial Hemp Research Program Act will be reviewed and amended in light of Congress’s passage of the Agriculture Improvement Act 2018. 

Are any businesses specifically prohibited from selling cannabis products?

The possession, use, and distribution of cannabis with a THC concentration greater than 0.3% is prohibited under Alabama law (Sections 13a-12-211 to 13a-12-214 of the Code of Alabama 1975). As such, all businesses are prohibited from selling cannabis products. 

The University of Alabama at Birmingham has been statutorily granted an affirmative defense to the distribution of cannabidiol, and Epidiolex—a U.S. Food and Drug Administration-approved cannabidiol product—is regulated like any other prescription drug (Id. at Section 13A-12-214.3(2)(b)). Epidiolex is legal in Alabama because it is derived from hemp, and hemp and its derivatives fall outside the scope of the definition of “marijuana” under Alabama law (Section 20-2-2(14) of the Code of Alabama 1975).

Zoning and real estate considerations

Are there any zoning restrictions on where businesses can cultivate, produce and sell cannabis products?

The possession, use, and distribution of cannabis with a THC concentration greater than 0.3% is prohibited under Alabama law (Sections 13a-12-211 to 13a-12-214 of the Code of Alabama 1975). As such, all businesses are prohibited from possessing, using or distributing such cannabis, regardless of location. However, the University of Alabama at Birmingham has been statutorily granted an affirmative defense for the distribution of cannabidiol (Id. at Section 13A-12-214.3(2)(b)).

Are there any other notable real estate issues pertinent to cannabis businesses, including with regard to landlord/tenant relationships and real estate market activity?

The possession, use, and distribution of cannabis with a THC concentration greater than 0.3% is prohibited under Alabama law (Sections 13a-12-211 to 13a-12-214 of the Code of Alabama 1975). As such, cannabis businesses cannot use real estate in Alabama for the cultivation or distribution of such cannabis.

However, the Alabama Industrial Hemp Research Program Act contemplates licensing individuals and businesses to grow hemp for research purposes (Id. at Section 2-8-382). Although Alabama has not promulgated regulations relating to its hemp program to reflect the Agriculture Improvement Act 2018, the state will likely be an opportune place to grow hemp given its low property taxes, abundance of farmland, and relatively inexpensive workforce. Consequently, Alabama should expect numerous real estate deals relating to hemp in the near future.  

Product restrictions and specifications

Are any cannabis products and accessories prohibited from sale? Do any product specifications apply?

The possession, use, cultivation, and distribution of cannabis with a tetrahydrocannabinol (THC) concentration greater than 0.3% is prohibited under Alabama law (Sections 13a-12-211 to 13a-12-214 of the Code of Alabama 1975). However, the Agriculture Improvement Act 2018 legalized “hemp”—defined as any part of the cannabis sativa L. plant with a THC concentration of 0.3% or less—by removing it from the Controlled Substance Act’s definition of “marijuana.” Therefore, all cannabis products with a THC concentration greater than 0.3% are prohibited from sale in Alabama, other than the cannabidiol product Epidiolex, which is regulated like any other prescription drug in Alabama. Epidiolex is legal in Alabama because it is derived from hemp, and hemp and its derivatives fall outside the scope of the definition of “marijuana” under Alabama law (Section 20-2-2(14) of the Code of Alabama 1975). Hemp and its derivative products are now legal in Alabama.   

Further, it is illegal to use, possess with the intent to use, or sell drug paraphernalia in Alabama (Id. at Sections 13A-12-260(c) to (e)). For purposes of Alabama law, “drug paraphernalia” means:

all equipment, products, and materials of any kind which are used, intended for use, or designed for use, in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance in violation of the controlled substances laws of [the State of Alabama]. (Id. at Section 13A-12-260(a).) 

Therefore, cannabis accessories are illegal in Alabama, and no particular product specifications apply to cannabis accessories.

Packaging and labelling

What packaging and labelling requirements apply to the sale and distribution of cannabis products and accessories?

Although the Agriculture Improvement Act 2018 legalized hemp by removing it from the Controlled Substance Act’s definition of “marijuana,” Alabama, has yet to promulgate regulations relating to hemp. Therefore, there are no labelling requirements that apply to the sale and distribution of cannabis products. However, the U.S. Food and Drug Administration-approved drug Epidiolex, is legal in Alabama because it is a cannabidiol derived from hemp, and hemp and its derivatives fall outside the scope of the definition of “marijuana” under Alabama law. This product is regulated like any other drug in Alabama, so applicable labelling requirements generally apply. In addition, Alabama has yet to promulgate regulations relating to hemp products.

Further, it is illegal to use, possess with the intent to use, or sell drug paraphernalia in Alabama (Id. at Sections 13A-12-260(c) to (e)). For purposes of Alabama law, “drug paraphernalia” means:

all equipment, products, and materials of any kind which are used, intended for use, or designed for use, in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance in violation of the controlled substances laws of [the State of Alabama]. (Id. at Section 13A-12-260(a).) 

Therefore, cannabis accessories are illegal in Alabama and no particular product specifications apply to cannabis accessories.

Advertising and marketing

What rules and restrictions govern the advertising and marketing of cannabis products and accessories (including online)?

The possession, use, cultivation, and distribution of cannabis with a tetrahydrocannabinol (THC) concentration greater than 0.3% is prohibited under Alabama law (Sections 13a-12-211 to 13a-12-214 of the Code of Alabama 1975). The Agriculture Improvement Act 2018 legalized “hemp”—defined as any part of the cannabis sativa L. plant with a THC concentration of 0.3% or less—by removing it from the Controlled Substance Act’s definition of “marijuana.” However, Alabama has yet to promulgate regulations relating to hemp. Therefore, no specific rules or restrictions govern the advertising and marketing of cannabis products. Further, it is illegal to use, possess with the intent to use, or sell drug paraphernalia in Alabama (Id. at Sections 13A-12-260(c) to (e)). For purposes of Alabama law, “drug paraphernalia” means:

all equipment, products, and materials of any kind which are used, intended for use, or designed for use, in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance in violation of the controlled substances laws of [the State of Alabama]. (Id. at Section 13A-12-260(a).) 

Therefore, cannabis accessories are illegal in Alabama and no specific rules or restrictions govern the advertising or marketing of cannabis accessories. 

Branding

What rules and restrictions govern the branding and trademarking of cannabis products and accessories? Are there any other special branding considerations for cannabis businesses?

The possession, use, cultivation, and distribution of cannabis with a tetrahydrocannabinol (THC) concentration greater than 0.3% is prohibited under Alabama law (Sections 13a-12-211 to 13a-12-214 of the Code of Alabama 1975).

The Agriculture Improvement Act 2018 legalized “hemp”—defined as any part of the cannabis sativa L. plant with a THC concentration of 0.3% or less—by removing it from the Controlled Substance Act’s definition of “marijuana.” However, Alabama has yet to promulgate regulations relating to hemp. Therefore, there are no specific rules or restrictions governing the advertising and marketing of cannabis products. Further, it is illegal to use, possess with the intent to use, or sell drug paraphernalia in Alabama (Id. at Sections 13A-12-260(c) to (e)). For purposes of Alabama law, “drug paraphernalia” means:

all equipment, products, and materials of any kind which are used, intended for use, or designed for use, in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance in violation of the controlled substances laws of [the State of Alabama]. (Id. at Section 13A-12-260(a).) 

Alabama permits individuals to obtain state trademarks under certain situations (Id. at Section 8-12-1 et seq.). While the statute does not address cannabis or cannabis accessories, it does state that marks cannot be registered if they consist of or comprise an immoral matter (Id. at Section 8-12-7(a)(1)).  Further, the U.S. Patent and Trademark Office (USPTO) requires a mark used lawfully in commerce to be trademarked. It therefore does not register marks for cannabis. Consequently, because cannabis with a THC concentration greater than 0.3% and cannabis accessories are illegal in Alabama, the state would likely not register a cannabis or cannabis accessory trademark, especially since the USPTO refuses to do so. Because hemp is legal in Alabama, trademarks relating to hemp are likely registerable. Otherwise, no rules or restrictions govern the branding or trademarking of cannabis products and accessories in Alabama. 

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