2024 is shaping up to be a year of significant change for the hemp industry in the United States and in North Carolina as numerous new laws and regulations are being introduced, discussed, and implemented at both the federal and state levels.
Potential Federal Changes
Introduced on May 21, 2024, H.R. 8467 – Farm, Food, and National Security Act of 2024 (aka the 2024 Federal Farm Bill) is making its way through committee. The bill has significant implications for the hemp industry. First, it redefines “industrial hemp” to exclude ingestible hemp products containing any amount of THC whether intoxicating or not. These products’ exclusion from the definition effectively makes them illegal in the eyes of the federal government.
For the many producers and retailers already dealing in these hemp products, the consequences for their business would be severe. The 2024 Farm Bill is young and subject to significant revision between now and its ultimate passage – many more changes are anticipated. That being said, if it passes in its current form, the hemp industry will be profoundly changed at the federal level.
The recent move by the DEA to reschedule cannabis from a Schedule I controlled substance to a Schedule III could also have a significant, and arguably negative, impact on the hemp industry.
Published on May 16, 2024, Section VII of the proposed rulemaking discusses “Types of Marijuana to be Rescheduled.” Specifically, it states: “This proposal would not apply to synthetically derived THC… Those tetrahydrocannabinols that can be derived only through a process of artificial synthesis (e.g. delta-10-THC) are excluded.” They will remain Schedule I controlled substances under the Controlled Substances Act.
The proposed change to definitions specifically identifies “Naturally derived” THC. The DEA could use this to address the intoxicating hemp market as well as rescheduling cannabis. This could be read to say that any THC that is NOT naturally derived is now and will remain a controlled substance. Much of our current hemp industry uses forms of THC in their products that are arguably not naturally derived.
Potential Changes in North Carolina:
In North Carolina, many were hoping two bills (House Bills 563 and Senate Bill 3) would pass before the close of the legislative session on June 30, 2024.
HB563 impacts a previously, rather unregulated, North Carolina hemp industry by imposing new regulations. To name a few, new testing and labeling requirements for hemp products, a milligram cap per serving for products intended for ingestion and inhalation, licensing requirements for producers, distributors, and retailers.
SB3 creates the North Carolina Medical Cannabis Program, establishing licensing and a consumer registry program to be operated by the Department of Health and Human Services.
In a surprising move by the legislature, the bills were combined in what appeared to be an effort to push both through quickly. If passed, the implementation of the bills will take several months to a year, the ultimate result will be a significantly different hemp industry in North Carolina.
As an attorney practicing in this space, I help my clients interpret significant regulatory changes and determine if, when and how to make strategic pivots in their business operations. The next year is likely to change the business of hemp at both the national and state level. Hemp and cannabis businesses should be prepared to respond quickly.
