May 3, 2023


The war on hemp continues in North Carolina.

Today is April 4th and this morning in the North Carolina house. HB 563 was filed. HB 563 seeks to regulate cannabinoid products in North Carolina. Why should you care? It hasn’t just been introduced, hasn’t passed yet.

Here’s the thing. This act, this bill, if it passes, is going to vastly change the landscape of the North Carolina hemp products industry. If you’re in this business, you need to know what’s going on before it actually happens, if that’s possible, so that you can plan ahead and not just have to react. So let’s talk about the pros and cons of HB 563.

We’ll go through the pros of HB 563 first.

The biggest pro is that it seeks to protect those under 21. So basically, it says if you’re under 21 years of age, you should not be purchasing hemp products. I don’t think anybody really has a problem with that. It does, however, assign criminal liability to those selling manufacturing hemp products. If they if they are found to sell to persons under 21 or give to persons under 21, also attaches criminal liability to those under 21 trying to obtain such products.

So be aware that even though you’re an adult like tobacco, if you’re under 21, you will not be able to possess these products anymore. Two establishes licensing for manufacturing, distributing and selling cannabinoid products. Not a bad thing. We’ve been all talking about this in the industry for a while. North Carolina has been sort of a Wild West state in that there has never been a governing body overlooking the manufacturing, distributing or selling of cannabinoid products.

We used to have the North Carolina Industrial Hemp Commission doesn’t exist anymore, but even they didn’t do much on that side of it, mostly dealt with the growing cultivation and processing of hemp products or sorry, of hemp. Now they’re going to start regulating the downstream production of hemp products. So anybody who’s been operating in the space and you’ve called me and you’ve said, you know, can I do this?

You’ve had the experience of me saying, Yes, you can, because there’s no regulation in North Carolina that says what kind of marketing you can do for this product, what you need to have on your website, what kind of signage you can have on your storefront. If this bill passes or any of the others that we have talked about in previous videos, then that’s all potentially going to be regulated.

Now, not all of the regulations are proposed in this bill. It has some of them proposed, but a lot of it will be established after passage by a governing body who comes up the regulations. So that’s a potential good thing, though, since we don’t know what the regulations are. Could be a disaster. We don’t know.

Testing Standards for Hemp Products

Testing standard does establish a testing requirement that all products, all hemp products be tested for cannabinoids.

Heavy metals, microbial minor toxins, pesticides and residual solvents. Get excited. This is a good thing for consumers. Hemp is a beautiful plant that does one of many beautiful things. And one of those things is it actually cleans the soil and it does that by absorbing everything into it. But if you’re then ingesting that, that means you’re ingesting everything it’s absorbed, which means that hemp products can be full of heavy metals, full of pesticides that we put on them or in the ground from previous crops full of solvents from processing and all a lot of other bad stuff that you don’t want in your system.

Some companies do a really great job of cleaning their hemp materials before they put it into an into product like your CBD gummy or your Delta eight baby. Lots of companies don’t. Why? Because there’s no standard, because there’s no requirement and it’s expensive, so they don’t do it, which means you have an and there’s no standard for labeling, so you don’t really know who’s doing it and who’s not doing it, which means you’re probably ingesting a lot of bad stuff.

So testing standards are great. We’re happy about that. Also goes on to require third party testing. Another thing that many companies do I certainly encourage all of my clients to do have encouraged all of you to do in previous videos. However, there are still plenty of people out there that don’t do that. They either don’t do testing at all or they do internal testing and who knows what that means.

So requiring third party testing now, we will now know that every product that sold in North Carolina legally has a specific standard in terms of finding out what’s in it. And we’ll also not only require internal testing, but third party testing. So there’s a level of consumer trust built there, a level of responsibility built there, packaging and warning label requirements.

I’m very happy about these. Again, lots of these requirements are things that I’ve been telling you all to do for over two years in child resistant packaging. There are some people in this industry that think that child resistant packaging and restrictions on how you can fashion your brand makes you a second class citizen. In fact, I’ve heard certain producers say, Well, alcohol doesn’t have to have child resistant packaging, and that’s way more dangerous than my product.

Listen, I get it. I get you don’t want to feel like you’re being any more restricted than than alcohol, which is, as we all know, basically poison. But this is this is par for the course. If you’re going to have a gummy something that looks like a child’s candy, you need to put it in child resistant packaging, not only to protect children, but to protect your own company.

How many gummy vitamins out there come without child resistant packaging? None of them. None of them Go. I dare you go to the grocery store and find a gummy that you can take for vitamin C and and find it without child resistant packaging. So if they’re required to have it, you can be required to have it too. It’s not going to kill you.

And at the end of the day, it’s going to protect you from any parent who’s sleep deprived and not paying attention. Who leaves their Delta eight gummies sitting in a place that’s reachable by their child and then their child overdoses and dies on your product. And you can go I put it in child resistant packaging. It’s not my fault she left it open

Warning Labels

HB 563 is going to require standardized warning labels, which is nice because up until this point we’ve sort of just been piece mealing them all together. They’re all pretty much standard warning labels that you would think they would be, that it’s not FDA, FDA approved that if you’re nursing or or pregnant, you shouldn’t use it and don’t operate a motor vehicle.

There are others, but you get the gist. No packaging or design that is attractive to kids. No more stoner patch kids, no more superheroes on your labels and packaging. Again, if you are going to make a product that is for adults, stop making it look like a child’s product. You’re opening yourself up to liability. Nobody likes it. And while it’s a cute gimmick, it just gives everybody else a bad name and puts you at risk for the exact thing that I ranted about 2 minutes ago, which is a child wanting your product or confusing your product for their candy in their household.

These are all pros that I think are a good part of HB 563.

Cons to NC HB 563

First con, they’re going to limit the content of any cannabinoid and not just any cannabinoid, but the aggregate of all the cannabinoids up to 75 milligrams per serving. So that means you have a product, you have decided how many servings are in your product in each serving, you cannot have more than 75 milligrams of cannabinoids total.

That’s not just Delta nine THC, that’s not just CBD, it’s all cannabinoids. This is an interesting standard. I haven’t seen this one yet in proposed in any other state, and I’ll be interested to see how easy that’s going to be for all of us to determine, because so far nobody’s used to testing for all of the milligrams, for every cannabinoid in their product.

There’s a section in this bill that says “this is what the bill doesn’t do.” One of the things that it specifically carves out is it says this bill does not excuse those who are ingesting hemp-derived cannabinoids. And then operating a motor vehicle doesn’t say intoxicating hemp derived products or hemp derived cannabinoids. It says hemp derived cannabinoids or hemp derived products, meaning any hemp derived product, even what we would consider non intoxicating ones like pure CBD isolate if you are operating a motor vehicle.

This statute does not say that you are not in violation of the law. If you ingest a hemp derived cannabinoid product and then operate a motor vehicle, why is this a problem? It’s a problem because I think it encourages potentially bad prosecution and I think it encourage encourages potentially bad law enforcement. There is already a severe lack of knowledge when it comes to this whole industry on the law enforcement side, not their fault.

This industry moves very quickly and there’s a lot of gray area and trying to keep all that in your head as a law enforcement officer or as a prosecutor, probably pretty difficult. Plus, we don’t offer any training on it right now, as far as I know, this leaves open the door to say that if you possess or use any hemp derived product and you encounter law enforcement and you’re operating a motor vehicle, that they should be aware that there’s a potential problem there.

It’s starting off in the idea that all hemp derived products are potentially intoxicating. Another carve out that’s an issue is that it says this bill does not prevent employers from firing you for using hemp derived products. It allows employers to say that no employee and our company can use hemp derived products. Again, does not say intoxicating hemp derived products.

It says any hemp derived product.

So an employer can say you’re not allowed to use CBD, you’re not allowed to use your CBN gummies In my in my workplace. And if I find out that you have I’m firing you and you’ve been given no protection under this under this bill. Again, I think it it points in the direction of saying this bill that that this product in our mind is still should still be illegal.

We are still treating every single cannabinoid, every single hemp product as though it is potentially intoxicating and should in fact, be a controlled substance. I don’t know if this bill is going to pass. As I said, it was filed today. So we’ll see. We’ll update you next month on where it’s at. But if you’re in the North Carolina hemp products industry, you need to be watching this.

You need to flag this

Go to the state legislature website and set up for email notifications and track this every day. And if this is a problem for you, don’t wait. Call your representative now be and let them know that you don’t like this, that this is going to put you out of business, that your livelihood goes away.

If the with the passage of this. And if you want to know how to pivot and potentially plan for the passage of this and some of the other bills that we’ve already talked about, give me a call, because now is the time to plan. Don’t wait until after it’s passed and your business no longer exists.

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