NORTH CAROLINA — Significant state legislation is poised to reshape North Carolina’s hemp industry, directly impacting businesses and consumers.
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North Carolina’s largely unregulated hemp market, characterized by a proliferation of psychoactive products and inconsistent quality control, is at a turning point as state lawmakers debate House Bill 328. The measure — despite aiming for stricter oversight with age limits and testing — threatens to enact a de facto ban on many hemp-derived consumables, jeopardizing numerous businesses and jobs amidst a parallel federal legislative effort that could also outlaw products nationwide.
Specifically, the bill broadly defines “prohibited hemp-derived consumable products” as those containing any hemp-derived cannabinoid other than delta-9 THC intended for ingestion or inhalation. This language would effectively outlaw the sale of popular products like CBD gummies, delta-8 THC vapes and edibles, and THCA hemp flower, reducing the legal market to primarily delta-9 THC products meeting very low potency thresholds. Topical products like lotions, balms, and salves would still be allowed.
Wilmington Dispensary owner and operator Ben Erichsen told Port City Daily he remains optimistic about H.B. 328 not passing, but the potential effect on his businesses and employees would be devastating.
“Considering the potential ban on basically everything that’s not low-dose delta-nine, I would just shut down almost immediately,” Erichsen stated. “That’s 30 people that don’t have jobs all of a sudden, just from one small company in one town. We’d see substantial job loss across the state.”
Hemp products can now be found in hundreds of stores across the state ranging from dispensaries to gas stations, grocery stores and smoke shops. In Wilmington, there are more than a dozen dedicated hemp product retailers, with the products found in nearly every gas station and smoke shop.
According to the USDA, the national hemp industry was valued at $291 million in 2023, with North Carolina ranking eighth in area planted/harvested and tenth in floral hemp production. The NC Department of Agriculture and Consumer Services indicates there are 589 licensed growers planting over 950 acres and 1,413 registered processors — facilities transforming raw hemp into usable products.
Characterized by Governor Josh Stein as the “wild, wild West,” the state’s hemp market lacks specific state-level regulations for manufacturing, testing, and distribution, despite its national legalization by the 2018 federal Farm Bill.
Hemp is defined federally as the cannabis plant, or any part of it, containing no more than 0.3% delta-9 tetrahydrocannabinol (THC) on a dry weight basis. In contrast, marijuana typically contains much higher concentrations of delta-9 THC, ranging from about 5% to over 30% in dried flower, and even higher in concentrated products like THC vape pens.
In 2022, Senate Bill 445 also permanently removed hemp from North Carolina’s controlled substances list to align state law with the federal Farm Bill. Though it aligned with federal law, there was still a failure to create a new state-specific regulatory framework for hemp products.
The gap in oversight has led to many products, including psychoactive delta-8 THC and THCA flower, often sold with inconsistent potency, unreliable quality control, and without state mandated testing, child-resistant packaging, or strict age verification, prompting the General Assembly to seek regulation.
H.B. 328 was initially aimed at banning delta-8 and delta-9 products from school grounds and clarifying existing vapor product prohibitions; sponsored by Representatives Carla D. Cunningham, Donnie Loftis, and Donny Lambeth, it was brought forth on March 6 and passed the House on April 16 with a vote of 112-0.
However, it was significantly amended in the Senate June 17. It’s now titled “Regulate Hemp-Derived Consumables,” with the goal of mandating 21-plus age limits, requiring state licensing for businesses, implementing third-party testing, and enforcing strict labeling standards. Its most impactful provision, however, effectively bans most non-delta-9 THC hemp products, alongside a new ban on kratom, an unregulated stimulant.
“I think one of the most shocking things to me is anybody can purchase a lot of this. It’s in our schools. It’s impacting our children,” Senator Benton Sawrey (R-Clayton) said of the need for the bill during a Senate Healthcare committee meeting on June 17.
During discussions on the bill in the House Alcohol Beverage Control Committee on June 24, Rockingham Representative Reece Pyrtle, who co-chairs the committee, emphasized the urgency of the proposed legislation.
“This is the first step,” Pyrtle stated. “And it needs to be taken as soon as possible. I’m hearing from law enforcement across this state and they feel like they have their hands tied right now. We want to unloosen them just a little bit.”
According to Lt. Jerry Brewer of the New Hanover County Sheriff’s Office, hemp-derived products remain on their radar, along with other currently illegal drugs like marijuana. He told Port City Daily the sheriff’s office has conducted raids in the past on retail stores in collaboration with state officials.
On October 18, 2023, the New Hanover County Sheriff’s Office in collaboration with the Secretary of State’s Office, raided multiple vape and tobacco shops, including the EZ Mart at 1619 Castle Hayne Road in Wilmington. The operation targeted counterfeit goods and illegal hemp-derived products, leading to the seizure of approximately $170,000 in items and charges against two individuals.
Brewer also said it can be difficult to tell the difference between illegal marijuana and currently legal hemp products.
“There’s some products made and sold that look like weed, smell like weed, and then they’re below the legal THC level,” Brewer said.
He explained officers have to send seized products for testing, which can be a lengthy process.
Under H.B. 328, the state’s Alcohol Law Enforcement Division would primarily manage new hemp regulations. ALE would oversee licensing for manufacturers, distributors, and retailers, conducting inspections, investigating non-compliance, and imposing civil penalties, often in collaboration with local law enforcement.
Penalties for violating sellers would range from initial fines up to $500, escalating to $2,000 and license revocation for repeat offenses within three years. For more severe infractions, such as selling unlicensed products or those exceeding the legal 0.3% total THC limit, criminal charges could be pursued, including Class A1 misdemeanors for repeat offenses or even Class H or G felonies for serious violations.
Wilmington Dispensary owner Erichsen has been in the state’s hemp industry since 2018 after CBD powder resolved his pain from sciatica. A former stock trader, Erichsen said while most of his customer base is for recreational use, a “significant” portion of his clients use his products medicinally. CBD and other hemp products often are used to treat inflammation, PTSD, and side effects of cancer treatment, including nausea or pain.
In contrast to H.B. 328, Senate Bill 265, titled the “Protecting Our Community Act” is a more favorable regulatory approach, which Erichsen calls “responsible.”
Filed in March, S.B. 265 similarly aims to ensure consumer safety and market integrity through a 21-plus age limit, robust third-party testing, and uniform labeling. However, it would preserve the existing market for CBD, Delta-8 THC, and THCA instead of outlawing them as H.B. 328 proposes.
S.B. 265 has been in the Senate Rules and Operations Committee since March 12 — no further action has been taken on the bill.
“It’s a comprehensive framework for the type of products that my stores and others sell that would expand on that one page of H.B. 455 and give us that regulatory oversight and a governing body to give us rules to play by,” Erichsen said.
Erichsen, along with seven other dispensaries in Wilmington, are part of Responsible Cannabis Retailers of Wilmington, which he helped found. By following a set of 10 pledges including a 21-plus age limit and product testing standards, the self-regulated group wants to promote higher standards within the local cannabis industry.
“We do our best to show the public and law enforcement that we are doing our best to abide by, you know, common sense rules,” Erichsen said. “They’re pretty easy to adhere to if you are willing to make a modicum of effort. We are trying to do our best to be as legitimate and forward thinking in terms of complying with legislation regulations that do not yet exist.”
Compounding the state’s legislative efforts is the potential impact of a proposed federal appropriations bill — which Trump calls the “Big Beautiful Bill.” If passed, it would redefine “hemp” to largely exclude cannabinoid products and shift to a “total THC” standard, effectively rendering most currently legal hemp-derived consumables in North Carolina federally illegal. This federal prohibition, rooted in Congress’s power under the Commerce Clause, would effectively dismantle H.B. 328’s framework for state regulation, as the products themselves would become unlawful to sell or distribute, leaving the state primarily with enforcement of the federal ban.
The “One Big Beautiful Bill Act” passed the House on May 22 and is currently still being considered in the Senate.
Having returned to the House Rules, Calendar, and Operations Committee, the next step for H.B. 328 is for the full House to vote on whether to concur with the Senate’s amendments; if they agree, the bill moves to the governor for a signature of approval or veto, but if not, it heads back to committee for further negotiation. A date for this vote has not yet been set.
Have tips or suggestions for Charlie Fossen? Email charlie@localdailymedia.com
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