North Carolina

WHAT IS NORTH CAROLINA'S CURRENT CANNABIS MARKET STATUS?

Content Below Last Updated by Point7 3/29/22

On August 18, 2021 North Carolina Senate Committee approved revisions to SB 711 cannabis bill that is expected to be taken up by the Senate during the state’s 2022 legislative session that starts in May. This bill, sponsored by Senator Bill Rabon (R), would enact the North Carolina Compassionate Care Act. It would allow individuals with qualifying debilitating medical conditions to register to use and safely access medical cannabis, along with establishing two types of licenses: medical cannabis suppliers to grow and manufacture the products, and medical cannabis centers to sell it to patients. Although this bill makes significant progress for cannabis legalization in the state, the bill is also known as one of the most restrictive in the nation. SB 711 virtually eliminates the potential for North Carolinians to participate in the medical cannabis program as the program requires individuals to have at least five years of prior business experience with cannabis, as well as be a vertically integrated Multiple State Operator in order to obtain a license.

A cannabis business would be required to pay a $50,000 nonrefundable license fee, plus $5,000 for each production facility or medical cannabis center the applicant proposes to operate under the license. Further, the current bill does not give any support or financial reparations to social equity applicants in the space. Legislators will be voting on this bill in May of 2022, but most business owners in the North Carolina hemp industry are opposed to the current bill language.

A poll conducted by Elon University in late January 2021 found that 54% of North Carolina residents support legalizing cannabis for use by adults, and 73% support making cannabis legal for medical use. The new poll comes on the heels of a report from the North Carolina Task Force for Racial Equity in Criminal Justice, which recognized that cannabis policy reform is essential to racial justice. In its report, which was published on December 14, 2020, the task force recommended reducing the penalty for possessing up to 1.5 ounces of cannabis to a civil fine and expunging past convictions. It also called for a study of legalization.

The task force included Attorney General Josh Stein, who explained, “White and Black North Carolinians use marijuana at similar rates, yet Black people are disproportionately arrested and sentenced. Additionally, it is time for North Carolina to start having real conversations about a safe, measured, public health approach to potentially legalizing marijuana.”

WHAT ARE NORTH CAROLINA'S CANNABIS LAWS?

Under North Carolina law, possession of up to a half ounce of cannabis is a misdemeanor that carries a fine of up to $200. Possession of greater amounts up to 1.5 ounces can result in up to 45 days in jail and a fine of up to $1,000.

WHAT IS NORTH CAROLINA'S CANNABIS LICENSING TIMELINE & CANNABIS APPLICATION PROCESS?

North Carolina legislation will introduce SB 711 and vote on it this May, 2022. If the bill passes, North Carolina will open up the application process for the Medical Cannabis Program. The Medical Cannabis Production Commission would be allowed to issue 10 medical cannabis supplier licenses and each supplier license would be allowed to operate no more than four medical cannabis centers (two of which must be in Tier 1 counties).

WHAT IS THE HISTORY OF CANNABIS IN NORTH CAROLINA?

North Carolina reduced the penalty for possession of small amounts of cannabis in 1977, but still labels those convicted as misdemeanor criminals rather than imposing a civil fine. There have been multiple subsequent attempts at further decriminalization in the 2010s, which has yet to make any serious advancement in the State House or Senate. A medical cannabis bill was introduced in May 2014, but was killed by the House Committee in March 2015. In 2015, Governor Pat McCrory signed into law HB 766 which allows individuals with intractable epilepsy to possess and use up CBD oil with less than 0.9% THC and at least 5% CBD, but does not establish any infrastructure for patients to purchase CBD within the state.

Despite overwhelming support from North Carolina voters, the state legislature has not shown any interest in making cannabis legalization a priority in 2022 or anytime in the near future.

DOES NORTH CAROLINA HAVE A HEMP PROGRAM?

The North Carolina Department of Agriculture and Consumer Services (NCDA) eliminated its state-run hemp program at the end of 2021. On January 1, 2022 growers in the state switched to operating under the United States Department of Agriculture (USDA), which now monitors North Carolina’s hemp production. Farmers interested in growing hemp in North Carolina will need to seek licensure directly from USDA.

PREPARING FOR THE NORTH CAROLINA CANNABIS MARKET

We are ready to support your team as you prepare for cannabis licensure in North Carolina. Contact Point7 to discuss the fully customizable products and service packages available that have proved successful for operators around the country.