WEST VIRGINIA LEGISLATURE
2024 REGULAR SESSION
Enrolled Committee Substitute for Committee Substitute for Senate Bill 679
BY SENATORS STUART, TAYLOR, AND DEEDS
[Passed March 9, 2024; in effect from passage]
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1 AN ACT to amend and reenact §11-16-23 of the Code of West Virginia, 1931, as amended; to
2 amend and reenact §19-12E-12 of said code; to amend and reenact §19-12F-1, §19-12F-
3 3, §19-12F-4, §19-12F-7, §19-12F-8, §19-12F-9, and §19-12F-11 of said code; to amend
4 said code by adding thereto a new section, designated §19-12F-9a; and to amend and
5 reenact §60-7-13 of said code, all relating to regulation of select plant-based derivatives,
6 including hemp-derived cannabinoid products and regulation of kratom; clarifying findings;
7 defining terms; redirecting moneys from monetary penalties assessed by Commissioner
8 of Agriculture to another fund; requiring permits to manufacture, process, distribute, offer
9 to sell, and sell regulated products; prohibiting retailer from adding imposed tax as
10 separate new charge; specifying regulatory authority of the Commissioner of Agriculture
11 and the Alcohol Beverage Control Administration Commissioner; specifying funding
12 requirements for nonintoxicating beer tax revenues; specifying application of the
13 Administrative Procedures Act for certain contested cases; specifying application fees for
14 certain permits; specifying requirements for business registration certificate, nexus,
15 jurisdiction, and taxation relating to remote interstate sales and distribution; imposition of
16 use tax; specifying maintenance of lists by the Commissioner of Agriculture of permittees,
17 approved products and entities, and persons who cease to be permitted; specifying
18 labeling requirements; authorizing use of funds by the Commissioner of Agriculture and
19 Alcohol Beverage Control Administration Commissioner; specifying application of Tax
20 Commissioner’s fee; authorizing and requiring a certain memoranda of understanding and
21 information sharing between Tax Commissioner, Commissioner of Agriculture, and
22 Alcohol Beverage Control Administration Commissioner; requiring a memorandum of
23 cooperation; specifying administrative sanctions; authorizing the Alcohol Beverage
24 Control Administration Commissioner to enforce regulation of the product at the retail
25 level; authorizing enforcement actions involving agents of the Alcohol Beverage Control
26 Administration Commissioner and persons acting upon the request, direction, or control
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27 of law-enforcement agencies; clarifying Alcohol Beverage Control Administration
28 Commissioner's authority over alcohol licensees selling kratom and hemp-derived
29 cannabinoid products; and specifying transfer of excess Alcohol Beverage Control
30 Enforcement Fund money.
Be it enacted by the Legislature of West Virginia:
CHAPTER 11. TAXATION.
ARTICLE 16. NONINTOXICATING BEER.
§11-16-23. Revocation or suspension of license; monetary penalty; hearing assessment of
costs; establishment of enforcement fund.
1 (a) Upon a determination by the commissioner that a licensee has: (i) Violated the
2 provisions of §11-16-18 of this code, or of §60-1-1 et seq. of this code; (ii) acted in such a way as
3 would have precluded initial or renewal licensure; or (iii) violated any rule or order promulgated
4 by the commissioner, he or she may:
5 (1) Revoke the licensee's license;
6 (2) Suspend the licensee's license;
7 (3) Place the licensee on probationary status for a period not to exceed 12 months; and
8 (4) Impose a monetary penalty not to exceed $1,000 for each violation where revocation
9 is not imposed.
10 (b) Any monetary penalty assessed and collected by the commissioner shall be
11 transmitted to the State Treasurer for deposit into the State Treasury to the credit of a special
12 revenue fund designated the Alcohol Beverage Control Enforcement Fund established by the
13 provisions of §60-7-13 of this code.
14 (c) In addition to the grounds for revocation, suspension, or other sanction of a license set
15 forth in subsection (a) of this section, conviction of the licensee of any offense constituting a
16 violation of the laws of this state or of the United States relating to nonintoxicating beer or alcoholic
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17 liquor are mandatory grounds for sanctioning of a license. Conviction of the licensee of any
18 violation of the laws of this State or of the United States relating to prostitution or the sale,
19 possession, or distribution of narcotics or controlled substances is mandatory grounds for
20 revocation of the licensee's license for a period of at least one year.
CHAPTER 19. AGRICULTURE.
ARTICLE 12E. INDUSTRIAL HEMP DEVELOPMENT ACT.
§19-12E-12. Regulation of select plant-based derivatives; findings; industrial hemp.
1 (a) This section shall be known as the Select Plant-Based Derivatives Regulation Act:
2 Industrial Hemp.
3 (b) The Legislature finds that select plant-based derivatives can be regulated so as not to
4 interfere with the strict regulation of controlled substances in this state, and that the
5 manufacturing, processing, distribution, and retail sale, or other sale of hemp-derived cannabinoid
6 products is an activity deserving of particular, careful, and strict attention to the administration and
7 enforcement of West Virginia standards designed to protect and safeguard the welfare and well-
8 being of West Virginia citizens and residents. The purpose of the act is to allow limited, regulated
9 access to select plant-based derivatives which are naturally occurring and as authorized by the
10 provisions of this article for adults 21 years of age and older: Provided, That the provisions of this
11 section shall not apply to naturally occurring select plant-based derivative products not containing
12 tetrahydrocannabinol content. Businesses located within this state engaged in manufacturing,
13 processing, distributing, or sale of hemp-derived cannabinoid products and businesses located
14 outside of this state that are engaged in the remote distribution or remote retail sale of hemp-
15 derived cannabinoid products across state lines for delivery into this state, are subject to the
16 permitting, labeling, and other control and administration provisions of this article. In the interest
17 of protecting the safety, welfare, and well-being of West Virginia citizens and residents, West
18 Virginia nexus and jurisdiction attaches for purposes of business registration, permitting,
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19 regulation, and taxation with relation to the activity of distribution or sale of hemp-derived
20 cannabinoid products across state lines into this state. Persons located outside of this state that
21 are engaged in distribution or sale of hemp-derived cannabinoid products across state lines into
22 this state shall obtain a West Virginia business registration certificate as specified in §11-12-1 et
23 seq. of this code and are subject to other administrative and regulatory requirements as set forth
24 in this code.
25 (c) As used in this section:
26 (1) "Alcohol Beverage Control Administration Commissioner" means the West Virginia
27 Alcohol Beverage Control Administration Commissioner or his or her designees.
28 (2) "Commissioner" means the Commissioner of Agriculture or his or her designees.
29 (3) "Contaminated" means made impure or unsafe by biological, chemical, or physical
30 additives.
31 (4) "Department" or "Department of Agriculture" means the West Virginia Department of
32 Agriculture.
33 (5) "Final product" means a product approved by the Department in accordance with the
34 provisions of this article, and any other applicable rules and requirements set forth by the
35 Department, as specified for the product.
36 (6) "Grower" means a person or entity which grows industrial hemp.
37 (7) "Hemp-derived cannabinoid" means a naturally occurring non-synthetic substance as
38 follows:
39 (A) Delta-9 tetrahydrocannabinol with a total concentration of not more than 0.3 percent
40 on a dry weight basis; or
41 (B) Delta-8 tetrahydrocannabinol;
42 (C) Delta-10 tetrahydrocannabinol;
43 (D) Hexahydrocannabinol (HHC-);
44 (E) Tetrahydrocannabiphorol (THCp); and
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45 (F) Tetrahydrocannabivarin (THCv).
46 (8) "Non-naturally occurring derivative" means a product that is contaminated as defined
47 by this article, or a product that, upon result of Department laboratory testing, is found to be in
48 violation of this article or rules promulgated therewith, or otherwise violates applicable federal
49 regulations.
50 (9) "Processor" or "manufacturer" means a person or entity that processes compounds or
51 converts hemp-derived cannabinoids into a hemp-derived cannabinoid product and distributes,
52 sells, or offers for sale, hemp-derived cannabinoid products in this state on a wholesale basis to
53 a retailer.
54 (10) "Retail sales" means the sale of hemp-derived products in a commercial setting as
55 determined and set forth in rules promulgated by the commissioner.
56 (11) "Seller" or "distributor" means a person or entity that distributes, offers for sale, or
57 sells hemp-derived products to persons for personal consumption.
58 (d) Permitting and registration.
59 (1) The commissioner may issue manufacturer, processor, distributor, and retailer permits.
60 Any person manufacturing, processing, distributing, offering for sale, or selling any hemp-derived
61 cannabinoid products in this state shall have a permit issued by the commissioner and be
62 otherwise authorized to do business in this State.
63 (2) The business activity subject to permitting under this section shall be treated as
64 separate and distinct from manufacturing, processing, distribution, or sale of kratom and kratom
65 products addressed and administered under §19-12F-1 et seq. of this code, or of hemp addressed
66 and administered under other sections of this article, or of medical cannabis addressed and
67 administered under §16A-9-1 et seq. of this code.
68 (3) Persons engaged in manufacturing, processing, distribution, or sale of hemp-derived
69 cannabinoid products in this state shall obtain a West Virginia business registration certificate as
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70 specified in §11-12-1 et seq. of this code and are subject to other administrative and regulatory
71 requirements set forth in this code.
72 (4) The Tax Commissioner may place a notation on the business registration certificate
73 showing the status of the certificate holder as a person or entity holding a permit from the
74 commissioner pursuant to this section.
75 (5) The commissioner shall keep a list of all persons and entities that have been issued
76 permits pursuant to this section. Such list shall be public information and shall be published initially
77 on or before June 30, 2024, by the commissioner on its website from time to time so as to reflect
78 a current listing.
79 (6) The commissioner shall keep a list of any persons or entities that have been subject
80 to a permit revocation, withdrawal, suspension, non-renewal, or other process whereby the
81 person or entity has ceased to be a permit holder in good standing with the commissioner.
82 (7) The commissioner shall keep a list of all hemp-derived cannabinoid products that have
83 been approved for sale or distribution in this state. Such list shall be public information and shall
84 be published initially on or before June 30, 2024, by the commissioner on its website from time to
85 time so as to reflect a current listing.
86 (e) Rules. The commissioner shall propose legislative rules for promulgation in
87 accordance with §29A-3-1 et seq. of this code that include, but are not limited to:
88 (1) Issuance of permits to persons who wish to manufacture, handle, process, distribute,
89 offer for sale, or sell hemp-derived cannabinoid products;
90 (2) Regular sampling and testing of hemp-derived cannabinoid products to determine
91 purity levels;
92 (3) Supervision of the hemp-derived cannabinoid products during their cultivation,
93 processing, and sale;
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94 (4) Assessment of fees as commensurate with the need of the commissioner’s activities
95 in issuing permits, laboratory testing, and in overseeing the regulation of hemp-derived products.
96 Such fees shall be in addition to those fees specified in subsection (d) of this section;
97 (5) Approving the manufacture, production, sale, processing, distributing, and transport of
98 hemp-derived cannabinoid products;
99 (6) Developing guidelines for the labeling of hemp-derived cannabinoid products,
100 including, but not limited to, a statement which says "KEEP OUT OF REACH OF CHILDREN.
101 CONSULT YOUR PHYSICIAN BEFORE USE IF YOU ARE PREGNANT OR TAKING ANY
102 MEDICATION" and "USE OF THIS PRODUCT MAY IMPACT DRUG TESTING RESULTS”;
103 (7) Developing guidelines or standards related to the display or staging of hemp-derived
104 cannabinoid products to increase the safety of underage patrons in retail environments;
105 (8) Developing guidelines or standards to restrict the advertising or marketing of
106 unapproved or unlawful products;
107 (9) Developing prohibitions on child-targeted packaging and shapes and forms of
108 products;
109 (10) Developing administrative rules, procedures, and sanctions for violations of this
110 section; and
111 (11) Any other rules and procedures necessary to carry out the purposes of this article.
112 (f) Emergency rules; mandatory labeling.
113 (1) Emergency Rules. The commissioner and the Alcohol Beverage Control Administration
114 Commissioner may, pursuant to §29A-3-15 of this code, promulgate such separate or joint
115 emergency rules necessary to effectuate the purposes of this article.
116 (2) Labeling.
117 (A) The commissioner shall review labels to be used on hemp-derived cannabinoid
118 products to be sold in this state.
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119 (B) In addition to the labeling required by the provisions of subdivision (6) of subsection
120 (e) of this section the commissioner may require and prescribe such labeling as he or she may
121 determine to be necessary and appropriate for hemp-derived cannabinoid products to be sold to
122 the final consumer in this state.
123 (C) Hemp-derived cannabinoid products may not be sold to the final consumer in this State
124 without an approved label.
125 (g) Any website owned, managed, or operated by a person who manufactures, processes,
126 distributes, offers for sale, or sells hemp-derived cannabinoid products to persons in this state
127 shall employ a neutral age-screening mechanism to verify legal age. The mechanism may include
128 an age-gate, age-screen, or any other age-verification mechanism approved by the
129 commissioner.
130 (h) Any person or entity distributing, offering to distribute, or selling hemp-derived
131 cannabinoid products to persons in this state by means other than a direct in-person transaction
132 shall employ an age verification mechanism approved by the commissioner.
133 (i) For the privilege of engaging or continuing within this state in the business of the retail
134 sale of hemp-derived cannabinoid products, as defined in this section, there is hereby levied upon
135 and collected from every person exercising the privilege a privilege tax equal to 11 percent of the
136 retail sales price on each retail sale of hemp-derived cannabinoids. Such tax is imposed in
137 addition to all other applicable taxes.
138 (1) The tax imposed by this subsection shall not be added by the retailer as a separate
139 charge or line item on any sales slip, invoice, receipt, other statement, or memorandum of the
140 price paid by a customer. The tax shall be due and payable on a quarterly basis as follows: on
141 the 20th day of January, April, July, and October for the preceding calendar quarter. When the
142 payment of tax is due, the person or entity permitted by the commissioner shall file a tax return in
143 a form prescribed by the Tax Commissioner. The Tax Commissioner may require such forms,
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144 schedules, and returns and impose such filing and remittance requirements that are necessary
145 or convenient for the efficient administration of taxes imposed by this subsection.
146 (2) The taxes imposed by this subsection shall be paid by the person or entity permitted
147 by the commissioner to the Tax Commissioner by electronic funds transfer unless electronic
148 payment is prohibited by state or federal law. Tax returns required by this subsection shall be filed
149 electronically with the Tax Commissioner.
150 (3) The West Virginia use tax shall be collected from sellers and marketplace facilitators
151 as defined in §11-15A-1 of this code, and referrers engaged in making sales, facilitating sales,
152 mar