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North Carolina Legislature Faces Decisions on Medical Cannabis, Hemp, and CBD

    Client Alerts, News
  • April 20, 2022

The North Carolina General Assembly returns to Raleigh on May 18 for its annual short session. Members are expecting to tackle several important issues while they are in town. Among the pending topics is legislation to legalize medical cannabis and a decision on what to do with hemp and CBD products when current laws expire.

The North Carolina Compassionate Care Act

Over the past decade, several states have passed laws allowing the use of cannabis for medical purposes. North Carolina could soon be among them, as significant legislation is pending before the state legislature. Senate Bill 711, the North Carolina Compassionate Care Act, will “provide for the sale of cannabis and cannabis-infused products to qualified patients with a debilitating medical condition through a regulated medical cannabis supply system” if signed into law. Sponsors of the legislation include both Democrats and Republicans, with the main sponsor being the Chair of the Senate Rules Committee.

The bill passed both the Senate Judiciary and Finance Committees during last year’s session. The legislation now sits in the Senate Rules Committee, awaiting a floor vote. Senate leaders have indicated that they will likely revisit the bill in May, as it has fairly broad bipartisan support. It will then be up to the House to determine if the bill goes forward this year.

Currently, North Carolina has stringent cannabis statutory restrictions. G.S. § 90-95 prohibits the sale, manufacture, possession, or delivery of Schedule VI controlled substances, including cannabis and THC. Senate Bill 711 would allow patients suffering qualified illnesses or conditions to use medical cannabis, as regulated by the law. Qualified medical conditions include cancer, epilepsy, HIV/AIDS, amyotrophic lateral sclerosis (ALS), Crohn’s disease, sickle cell anemia, Parkinson’s disease, and multiple sclerosis. The legislation also makes provisions for homebound or bedridden patients to use medical cannabis. Additionally, post-traumatic stress disorder (PTSD) would be considered a qualifying condition, provided there is ample evidence that the patient has experienced a traumatic event.

This last provision has garnered support from some combat veterans. North Carolina veterans suffering from PTSD and other injuries have testified before Senate committees that cannabis has assisted their treatment. After hearing from these veterans, the bill sponsors added a provision for them.

The legislation establishes an advisory committee under the North Carolina Department of Health and Human Services and a commission charged with overseeing the state’s medical cannabis industry. The commission would award 10 licenses to medical cannabis suppliers. The bill would also require each licensed supplier to open at least one retail outlet in a county classified as a “tier 1 county,” a list of North Carolina’s poorest counties.

Under the proposed legislation, patients must apply for and receive a medical cannabis identification card to be permitted to purchase cannabis. However, cardholders would not be permitted to smoke or vape cannabis in a public place.

This legislation has the potential to generate a new revenue stream in North Carolina. The medical cannabis businesses approved by the commission would pay a monthly fee to the North Carolina Department of Revenue of 10 percent of the gross revenue derived from the sale of cannabis. That revenue would be distributed to the commission, the North Carolina Cannabis Research Program, and the General Fund.

If the legislation passes the Senate, it will be the farthest to make it in North Carolina. House leaders from both parties have expressed their support, but there is no indication of where the bill is ranked in House priorities for the short session. Supporters hope that a bipartisan push could be enough to make North Carolina the 37th state where medical cannabis is legal.

Status of Hemp and CBD Products After July 1 Is Unknown

CBD products derived from hemp remain legal in most states. North Carolina is no exception. However, the state’s hemp farming laws expire on June 30, and some fear that hemp will become illegal in North Carolina.

Hemp-derived products in North Carolina must contain less than 0.3 percent delta-9 THC. This mirrors language in federal law that states cannabis sativa is considered legal hemp as long as it doesn’t exceed 0.3 percent THC by dry volume. This exemption has led to the development of a wide variety of hemp-based products sold by specialty stores, markets, and even pet stores.

The General Assembly can extend the hemp exemption when it returns in May. Legislative has not indicated when they might take action on this issue. IN the past, the exemption itself has not been controversial. The debate has been centered on the types of products that should be allowed, such as smokable hemp flower. Law enforcement groups have historically lobbied against smokable hemp but have largely stayed out of the general debate on hemp farming in North Carolina.

We will continue to watch both of these topics this year. Stay tuned for updates.