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Local Business Owners Left in Limbo as AG Calls for Change in Hemp Law

Letter calls to 'address the glaring vagueness' of federal Farm Bill

a headshot of NC governor Josh Stein
NC Attorney General Josh Stein signed a March 20 letter that could negatively impact the hemp industry. (Courtesy of Josh Stein Campaign)

On March 20, when attorney Rod Kight learned that 22 state attorneys general, including North Carolina Attorney General and Democratic gubernatorial candidate Josh Stein, had just submitted a letter to Congress asking that lawmakers roll back many of the freedoms granted hemp producers and distributors in the 2018 Farm Bill, he felt blindsided. 

As Congress prepares to embark on a five-year reauthorization of the Farm Bill, the letter asks that committees “address the glaring vagueness created in the 2018 Farm Bill that has led to the proliferation of intoxicating hemp products across the nation and challenges to the ability for states and localities to respond to the resulting health and safety crisis.”

The requested changes threaten an industry that has seen tremendous growth in Charlotte and across the state over the last five years, starting with CBD and evolving into Delta 8 then THCA products, all of which comply with state law limiting THC content to less than 0.3% for such products. 

Anything over the .3% threshold is no longer considered hemp but defined as marijuana — and illegal. Yet hemp products can still administer a varying range of effects that the state attorneys call intoxication and your average consumer might call getting stoned.

Blaming “bad actors” for “exploiting” the Farm Bill, the letter claims that a “wrongly perceived” federal pre-emption included in the bill — also called the Agricultural Improvement Act of 2018 — has undermined efforts to control the cannabis market, especially in states such as North Carolina where it is still illegal. 

“Regardless of your Committees’ intentions, the reality is that this law has unleashed on our states a flood of products that are nothing less than a more potent form of cannabis, often in candy form that is made attractive to youth and children — with staggering levels of potency, no regulation, no oversight, and a limited capability for our offices to rein them in,” the letter reads. 

Though blindsided by the letter, Kight, a preeminent international cannabis attorney who represents hemp-related businesses around the country, including nearly 100 such businesses in North Carolina alone from his office in Asheville, was not surprised. 

He has in recent years become accustomed to elected officials — persuaded by an odd lobbying consortium made up of anti-marijuana activists, big marijuana corporations, and law enforcement groups — have launched what he calls a “war on hemp,” threatening what has become a $28-billion industry, according to an October 2023 Whitney Economics report. 

He took to his popular Kight on Cannabis blog to decry and debunk the letter, calling the attempt to define intoxication a “fool’s errand.” 

“It is impossible to define ‘intoxication,’ in a way that is workable from a legal or regulatory standpoint,” Kight wrote. “Attempting to eliminate or control intoxication by redefining ‘hemp,’ prohibiting an entire class of hemp products, and/or via capping the allowed milligrams of THC and other compounds that are allowed in a product or package is totally unnecessary. This approach amounts to a ‘Nanny State’ method of addressing an issue that should instead be based on an adult’s personal preference.” 

As he has long advocated, Kight insisted that the right approach to the issue would be to restrict access by minors, require quality control for production and manufacturing of hemp and hemp products, and require proper and informative labeling and marketing of said products. 

“This three-pronged approach allows adults to make an informed decision about the products they choose to purchase and consume while limiting access to minors and sidestepping the impossible task of defining and regulating products based on their potential to cause intoxication,” Kight wrote. 

Speaking with Queen City Nerve a few weeks following the issuance of the letter, Kight said he wished the AGs had consulted with experts in the field rather than follow the lead of lobbying groups with a hazy understanding of the industry and the plant it has grown from. 

“I think we could have tried to, at a minimum, give them some bigger context and certainly some education about all the different ways in which they were wrong for signing this,” Kight told Queen City Nerve. “Particularly with AGs throughout the country, this sort of reactionary response to hemp products come out in various ways, from legal opinion letters to press reports to these letters that are uninformed and not done in consultation with anyone in the cannabis industry, hemp or otherwise. They just put these things out there without talking to people first.”

Past challenges and setbacks

For Michael Sims, co-founder and co-owner of Crowntown Cannabis, learning of the March 20 letter was like getting back on a roller coaster that he desperately does not want to ride. 

The same month the letter was issued, Sims and his team were forced to close their Columbia, South Carolina, location after dealing with unclear laws and questionable enforcement for over a year. 

The shop was raided by Columbia police and the state’s South Carolina Law Enforcement Division (SLED) in January 2023. Agents confiscated pounds of inventory from the shop that they “perceived to be marijuana,” arresting the store manager and charging her with conspiracy to sell marijuana.

Sims and his team disputed the allegations, stating that all product in the store was hemp flower, which he believed to be legal in both North and South Carolina as long as it stayed below the .3% THC level stated in law. Sims and his team are still fighting the charges today. 

The inside of a hemp dispensary
Crowntown Cannabis closed its Columbia shop in March. (Courtesy of Crowntown Cannabis)

Then in October, the South Carolina Attorney General’s Office issued an unfavorable opinion regarding the legal status of delta-8 THC and other similar products in the state.

“It was a death by a thousand paper cuts,” Sims said of the long struggle with South Carolina authorities. “They tried to shut us down and fight us every way possible, and we came out victorious. We probably could have stayed down and survived, but that last letter, them getting rid of the last little bit of things we could legally sell in that store, was the last straw for us.” 

Then, like a recurring nightmare, March 20 came along and Sims found his entire business model in jeopardy. 

“It was just like, ‘Here we go again,’” Sims recalled. “We were blindsided, but it’s almost become par for the course with this industry. From what we knew and understood, [we thought] Josh Stein was a supporter of this industry.” 

Requests for an interview with or comment from Josh Stein’s office went unanswered for this article. 

Like Kight, Sims has long been an advocate for strong age restrictions and clear labeling for all hemp products, enforcing such standards in all of his dispensary locations. 

He points to multiple studies that show a decrease in opioid use in states where cannabis is legalized as proof that North Carolina is on the right track, and one reason why rolling back certain protections in the Farm Bill, which is set to be reauthorized by Congress in September, would be ill-advised. 

A 2021 report from BMJ, a weekly peer-reviewed medical journal, linked legal cannabis stores to fewer opioid deaths in the United States, while a Colorado University Boulder report in 2023 found that legalizing recreational cannabis at the state level not only didn’t increase substance use disorders or the use of other illicit drugs among adults but may have reduced alcohol-related problems.  

“The issue we have with all of these decisions and things, and ultimately people trying to close us down, is they keep using the same propaganda, the same rhetoric, over and over again,” Sims told Queen City Nerve. “I’m talking about adolescent use, and there’s this public health crisis now on all these issues, but it’s really unfounded. It’s been proven in legalized states that teen use and adolescent use is down, hard drug use is down, opioid use is down. 

Crowntown Cannabis’ flagship location on Central Avenue. (Photo by Grant Baldwin)

“Basically, all the fear tactics and fear mongering that was used in that letter and have been repeated over and over again have been proven to be the opposite of that, where we’ve seen nothing but improvement in these areas.” 

Sims said that, over the last five years, his business has transitioned away from CBD, with THC products making up 90% of his business’ sales today. He doesn’t believe going back to the CBD products alone, his focus when he launched Crowntown Cannabis as Charlotte CBD in 2018, could keep his business afloat today. 

“It would be an instant death,” he said. 

The need to rally voices

Kight said that, while some of the opposition has been drummed up by the parties one would expect — parents’ groups and other anti-marijuana outfits alongside law enforcement lobbies that see all cannabis product as no better than any drug off the street — it’s been his experience that the growing marijuana lobby is one of the strongest opponents to the hemp industry. 

The NC Compassionate Care Act, which has been stuck in committee in the North Carolina General Assembly [NCGA] since May 2023, aims to legalize medical marijuana in the state but would limit its production and distribution to 10 vertically integrated companies. That would effectively push any aspiring small business owner out of North Carolina’s cannabis industry before widespread legalization even takes place. 

“What we see when these types of bills — and I say these types of bills because they’re all the same, particularly in the southeast — they’re promoted behind the scenes by the medical marijuana companies that are from Canada or wherever that want to come in and control the market here,” Kight told Queen City Nerve. 

“They pitch these things, and what they do in conjunction with it is they will also then try to eliminate the hemp industry so that they control the monopoly,” he warned. 

Rod Kight (Photo courtesy of Rod Kight)

His hope is that elected officials, whether in US Congress or the NCGA, can recognize hemp as the nascent economy driver that it has become, just in need of stronger regulations around labeling and marketing. 

“What we have in North Carolina is a very experienced, solid hemp industry that has been around for a long time and is currently selling good quality products to people throughout North Carolina,” Kight said. “So whether you’re a consumer or whether you’re someone who wants to participate in the industry, the barriers are low, and there are good and quality products out there that consumers already have access to.” 

What the industry needs is more people to speak up in support, he said. Many who harbor the same concerns as Sims try to keep a low profile, carrying on with their work in hopes that they won’t find themselves in the crosshairs as he did in Columbia. 

Queen City Nerve reached out to five different Charlotte dispensaries for comment on this story, but received no responses. 

“I think a lot of people, their mindset is hear no evil, speak no evil,” Sims said. “A lot of people just want to lay low, but I don’t have that luxury. I learned that many years back, fighting for smokable hemp flower in North Carolina, that I had to become my own lobbyist.

“I realized that we have very few, if any, voices to support what we do at the state level,” he continued. “But as states around us legalize and bring other things to market, it’s going to become more and more of an issue for us in North Carolina and South Carolina … and for as many people who are trying to push this industry forward, there’s just as many trying to bring us back to the 1940s.” 

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