How the Deal to Reopen Government Could Kill the NC Hemp Industry

The longest government shutdown in US history came to end on Nov. 12 after the Senate finally passed a spending bill. One consequence of the deal missed in many national news stories about it at the time could lead to the fall of a $28 billion industry.

The new regulation lowers the amount of THC — the psychoactive ingredient in cannabis that gets you high — allowed in products from 0.3% to 0.4 milligrams, outlawing many currently legal products and making it nearly impossible to grow hemp plants at all.

Crowntown Cannabis owner Michael Sims calls the new law “an industry killer disguised as regulation.”

Republican Sen. Lindsey Graham met with families and hemp farmers Nov. 18 during a town hall in Easley, South Carolina, to discuss the impact that this ban would have on them. Sims was in attendance.

”I think he was expecting a room full of ‘pot heads’ or ‘stoners’ to be fighting for this,” Sims said. “We presented him with families that have disabled children. One of the gentlemen was a former military and current medic … A lot of people are just looking for something just to take the edge off.”

Senator Graham did not respond to Queen City Nerve’s request for comment, though he told the group at the town hall that he learned a lot from the meeting. Sims left feeling positive about the interaction.

Because the hemp ban was incorporated into the spending bill that reopened the government, it placed representatives that support hemp sales in a difficult position.

“Ultimately, they could fight to have this language removed, but it wouldn’t be taken in the media like they’re fighting to have this language removed,” Sims said. “It would ultimately [seem like] they voted against reopening the government.”

Read More: Local Business Owners Left in Limbo as AG Calls for Change in Hemp Law (2024)

Now, Sims and other advocates for cannabis and hemp products are calling on local and federal representatives to educate themselves on the ways hemp helps people and the effects it would have if it were taken away.

“I’ve been in [the hemp industry] since 2018 and I did not think we would still be this far behind and even regressing in our movement,” Sims said. “It’s [taken] decades to get here, and with a strike of a pen, we’ve been made criminals again.”

How did we get here

The 2018 Farm Bill was the catalyst for a new market for THC and other hemp-derived products. Since the bill went into effect, the hemp industry has grown exponentially, generating between $759 million and $1.1 billion annually, according to a 2023 Whitney Economics report.

The Farm Bill — or Agricultural Improvement Act of 2018 — redefined hemp as any part of the cannabis plant or its derivatives that contain no more than 0.3% delta-9 THC on a dry-weight basis. Under the bill, hemp was no longer considered a controlled substance and could be sold legally.

Delta-9 tetrahydrocannabinol (THC) is a cannabis-specific compound, or cannabinoid, that is considered the main psychoactive ingredient in cannabis.

The “loophole” that the Farm Bill’s language created allowed folks in the hemp industry to produce cannabis products that contained less than 0.3% delta-9 THC while not accounting for THC variations like delta-8, delta-10, THC-O, THCP, and HHC that totaled a THC concentration exceeding 0.3%.

The bill was a great opportunity for farmers and businessmen alike, said David Thomas, COO of Charlotte-based THC seltzer business Delta Beverages. It gave farmers that were transitioning away from crops like tobacco the chance to grow another crop that needed similar soil. Farmers were also then able to sell to new entrepreneurs seeking opportunities to create hemp products.

For eight years, the hemp industry has thrived, bringing the country around $79 billion in economic impact and creating about 330,000 jobs, Thomas said. In 2024, there were nearly 45,000 acres of hemp planted nationwide, a 64% increase from the previous year which was expected to double this year.

Read More: The Future of Hemp Farming in North Carolina Faces Multiple Threats (2022)

“These are people that have made critical investment in infrastructure to support an industry that now is gone,” he said.

On Oct. 24, 38 attorneys general from across the country, including NC Attorney General Jeff Jackson, signed a letter to Congress asking for clarification on the federal definition of hemp, claiming that the ambiguity of the law as it existed allows “bad actors” to exploit the law and “racket dangerous drugs to the American public.”

The letter stated “potent, psychoactive THC products” are “packaged and sold in ways meant deliberately to appeal to children.”

“In other words, industry actors have nefariously misinterpreted the Farm Bill’s legalization of low concentrations of hemp-derived delta-9 and the Bill’s silence regarding hemp-derived THC products other than delta-9 to claim that the Farm Bill allows them to produce and sell various synthetic cannabinoids regardless of the chemicals’ potency and psychoactive effects,” it read. “In this way, legal, nonintoxicating hemp is used to make Frankenstein THC products that get adults high and harm and even kill children.”

On Nov. 12, Donald Trump signed the government spending bill that would reopen the government into law. A six-page provision tucked into the 394-page bill aims to ban all intoxicating hemp products, potentially dooming the North Carolina cannabis industry when it goes into effect in November 2026. 

The old regulations stating that the plant cannot exceed 0.3% delta-9 THC were already incredibly restrictive, Sims insisted. Now, even if farms are able to grow a plant that is within compliance — which is not likely — the 0.4-milligram limit in products effectively makes 95% of what dispensaries sell illegal, including topicals, salves and tinctures that do not get users high at all.

The hemp plant is like any agricultural product, Sims explained. Just as you have sweet blueberries and sour blueberries from the same bush, there are parts of the hemp plant that are compliant and others that are not.

If the legislation doesn’t change before the ban goes into effect, residents could be using these products as law-abiding citizens on Nov. 11 at 11:59 p.m. and become criminals at the stroke of midnight, Sims said.

“If it was this dangerous and [was] this much of a public outcry, then why would they give us a year?” Sims questioned. “Because it’s not harmful.”

Children’s safety and misinformation

A major argument against cannabis sales involves the safety of children. Though there have been some cases of cannabis poisoning among children, there has only been one reported case of a child or teen likely dying from it since 2009, according to America’s Poison Centers.

Sims pointed out that the No. 1 cause of death for children in the U.S. are firearm-related injuries.

”I tell many of our customers, treat these [THC] products like they are weapons, like they are guns,” Sims said. “Keep them locked up, just like you would alcohol, tobacco, or any other adult use items.”

Cannabis opponents argue that children are able to buy these products in stores, an unfortunate truth that Sims acknowledges.

Though both Crowntown Cannabis and Delta Beverages practice age gating — only selling to those 21 and up — North Carolina does not currently have any age restrictions on products that contain THC. Sims and other industry professionals have lobbied for the implementation of simple age regulations, ensuring those under the age of 21 cannot purchase THC products and that any such product is properly tested, labeled and sold at licensed dispensaries.

Despite that work, opponents use the same measures he has lobbied for against them.

Read More: North Carolina Universities Host Cannabis Research Programs

“We’ve begged for age gating and they deny us at every turn because that’s their media talking points of why [the industry] should be illegal,” he said. “They call us the Wild West. They say it’s unregulated. They say it’s dangerous. But every time we push forward, trying to get legislation pushed to cover these things, we’re pushed back and told that it doesn’t work.”

Sims reminds opponents that illegalization won’t stifle demand for the products, but lead to users risking criminal charges to get them or taking their chances on the black market. No dispensary that’s worth a damn wants to sell to children, Sims said. Their goal is to provide safe access for consenting adults.

A recent poll of Crowntown Cannabis customers found that the No. 1 reason they sought out cannabis products is for anxiety relief. The second most common was sleep aid. While THC can be used to treat ailments, it’s also an alternative to alcohol or harder drugs, Sims said.

“This is really about the people that use our products,” Thomas said. “This is the first industry I’ve ever been into where I wake up and I get emails and letters from people saying how our products have changed their lives for the better.”

Now, hemp advocates like Sims and Thomas are asking Speaker of the House Mike Johnson to remove the damaging language in the bill, though Sims admits this effort could take time.

Sims, Thomas and Delta Beverages CEO Jack Sherrie are currently mobilizing advocacy organizations to attempt to codify and protect our state’s rights to grow and sell hemp before ultimately reversing the federal decision.

“The more that we can share that this is something that isn’t illegal, isn’t something that’s being kept in the back room and isn’t something that’s being marketed to children … the better off everyone will be in understanding more about what they have to lose,” Thomas said.

Sims’ is asking for residents to get involved by contacting local representatives to educate them on this ban and support your local dispensary.

“That money is going to go directly towards fighting for this,” Sims said. “We’re begging for these regulations to allow us to stay in business and to keep our customers safe, but as it’s written right now that leaves the door open for none of that. It is 100% an industry killer.”