Asheville, Buncombe become ‘epicenters’ of hemp, the accidental industry bigger than marijuana

by JOHN REINAN

When Congress passed a farm bill in 2018 legalizing hemp, the idea was to let farmers grow the versatile crop for industrial uses such as rope, fiber, paper and clothing.

The bill did that and more – much more.

Six years later, intoxicating and medicinal products made from hemp — including Delta-8, Delta-9, CBD and a slew of other chemical derivatives — are a $28 billion business that’s larger than the $21 billion recreational marijuana industry operating in 24 states, according to national cannabis consulting firm Whitney Economics.

There’s little chance that politicians will roll back the legalization, but there is movement toward more regulation, focused primarily on consumer safety.

Asheville and Buncombe County are among the “epicenters” of hemp nationally, said Rod Kight, an Asheville lawyer who advises cannabis businesses. Kight, who owns the Little Amsterdam cannabis cafe in downtown Asheville, estimated there are dozens, perhaps more than 100, outlets for hemp products in the area.

“People say, ‘When are we going to get legalization in North Carolina?’ ” Kight said. “And I say, ‘Buddy, we already got it.’”

Hemp contains small amounts of tetrahydrocannabinol, or THC, the same chemical that gives marijuana users their buzz. In hemp, the chemical occurs naturally in such small amounts that smoking or eating the plant would have about the same effect as ingesting lettuce.

And that’s where the magic of chemistry comes in.

Laboratories can extract those small amounts of THC from hemp and mix them with other chemicals into gummies, joints, vapes, beverages and candies that pack a punch far beyond what lawmakers likely envisioned when they removed hemp from the federal list of banned drugs.

Businesses wasted no time in exploiting the unforeseen opportunity. Now, consumers in 49 states (sorry, Idaho) can order hemp-derived intoxicants and have them delivered to their door. It’s legal, it’s unregulated and it’s virtually untaxed in North Carolina.

It’s as if vodka made from grain were against the law, but vodka made from potatoes were legal and widely available.

Consumer safety a concern

The hemp business looks like it’s here to stay. There’s no groundswell among political leaders to put the genie back in the bottle. In fact, one of the state’s most prominent politicians — Rep. John Bell IV, Republican majority leader of the state House — is the president of Asterra Labs, a Nash County maker of legal THC and CBD products.

Police don’t appear to consider hemp a public safety threat. In a statement, Buncombe County Sheriff Quentin Miller said his priority is “high-level drug trafficking of fentanyl and meth,” adding that he has long been a supporter of legal medical marijuana.

Asheville police said they handled only five cases last year that involved seizure of legal hemp-derived products in connection with other offenses.

“Our primary focus is ensuring public safety, upholding the law, and enforcing existing laws and regulations,” the department said in a statement.

“There’s not an appetite within the law enforcement community, either state or federal, to take on this stuff,” said Ben Scales, an Asheville lawyer and cannabis law reform activist.

In years to come, Scales said, people will look back on illegal cannabis the same way they look back on Prohibition, wondering what all the fuss was about.

“People are already starting to wake up to that fact,” he said.

The main political activity on the hemp issue is focused on consumer safety. Last year, the N.C. House passed a bill to regulate hemp products. Among other things, it would require content labeling and purity testing, as well as age verification for purchase. The bill also would require licensing for hemp manufacturing, warehousing and retail sales.

In essence, hemp products would be treated the same way as food and beverages sold in the supermarket, with information to let consumers know exactly what they were putting in their bodies and an assurance that they contain no hazardous ingredients.

The bill is now in the state Senate, where nobody can say for sure whether it will pass in this year’s session.

“I would hope that other legislators at the very least recognize that this stuff is in our state right now; people are consuming it right now,” said Rep. Lindsey Prather, D-Buncombe, an advocate for legal marijuana. “So at the very least, we should make sure that people are consuming what they think they’re consuming.”

 Natural vs. synthetic derivatives

Prather said she’s not sure the bill will get a vote in the Senate this year. But Lee Van Tine II, CEO of Apotheca Cannabis Dispensary, is more optimistic about the chances for passage in a Senate with a Republican supermajority.

“Hemp is a Republican industry,” he said. “Hemp is about farmers.”

In 2010, Van Tine co-founded the Hookah Hookup, which rebranded itself as Apotheca in 2019 as it expanded into legal hemp sales. Now, the Charlotte-based company claims to be the state’s largest dispensary chain, with 43 stores, including six in Asheville, and four more opening here soon.

Van Tine said his stores did $28 million in business last year and are on track for more than $40 million this year. Apotheca outlets have an upscale feel, with sales associates dressed in logoed aprons, and Van Tine said the company strives to educate its hemp consumers about what can be a confusing array of products.

The company deals only with regional and national hemp brands that already adhere to safety and quality standards, he said. That’s why labeling and product testing, as provided for in the proposed legislation, is so important, he added.

“Everybody wants a good bill that keeps these products clean for the people who are accustomed to enjoying them safely,” Van Tine said. The bill has the support of the N.C. Healthy Alternatives Association, a hemp industry trade group.

Because legal hemp is so new, there’s been little research on it, said Chad Johnson, a Ph.D. chemist and co-director of the medical cannabis science program at the University of Maryland-Baltimore. What’s more, many of the products are not as natural as the industry claims.

“The issue with folks in the hemp industry, they say that these hemp-derived isomers are quote-unquote natural,” Johnson said. “They’re implying that these are produced by the plant.”

Some of the isomers are naturally found in “minute, minute concentrations,” Johnson said, and so “the hemp-derived folks latched onto that and said, ‘They’re natural.’

“But when you see these products that have hundreds of milligrams of Delta-8, Delta-10, TCHP — they are not from the plant,” Johnson said. “So I tell people, these are synthetic. They’re made in the lab.”

Yet Johnson doesn’t think the synthetic hemp derivatives are inherently harmful, as long as there’s basic consumer protection in place.

“I don’t have a problem with these hemp-derived isomers, as long as they’re produced in the right way,” he said. “And you have labeling so that what [people] are consuming is what you say it is.

“If you’re going to tout this as medicine, or even as adult use, everyone who consumes them should have the right to feel safe. They should be able to go in and know that the product they’re buying has had its purity confirmed, just as you do when you go to the grocery store.”

Hemp not taxed like weed

The speed of the hemp market’s takeoff has made it difficult for slow-moving governmental and legislative bodies to catch up, Prather said. “It’s just such a confusing topic that is full of disinformation,” she said.

One thing that’s clear, in her view: North Carolina is leaving a lot of tax money on the table. Sellers of hemp products collect state and local sales taxes, the same as someone who sells any other retail product. But there are no specific hemp taxes.

“North Carolina Republican leadership is on track to bring the corporate income tax to zero by 2030,” Prather said. “And they’re starting to panic about how to make up the revenue.

“It’s frustrating to be in a state that is already looking at ways to bring in revenue, a state that is already an agricultural powerhouse,” Prather said. “We should have been able to figure this out by now.”

In 2023, states with legal recreational marijuana collected more than $3 billion in taxes, according to research by the Tax Foundation. The group estimates that since 2014, when legal weed first became available in Washington state and Colorado, states have collected more than $18 billion in taxes.

The Eastern Band of Cherokee Indians opened a medical marijuana dispensary in April on its tribal land about an hour’s drive west of Asheville. The tribe has estimated it could bring in about $200 million in revenue, but the tribe isn’t subject to state taxes.

Users tout benefits

Cannabis users said they’re happy to be able to purchase legal hemp products in Asheville, citing a range of physical and emotional benefits.

At All Souls Grotto in Biltmore Village, Vincent Pope of Asheville lounged on a sofa with two small containers of legal hemp flower on the coffee table in front of him. Pope said he grapples with autism, ADHD and sensory overload, and hemp helps him cope.

“It’s medicinal for me,” he said. “Cannabis is a big reason I’m able to work, eat, hang out with my friends.

“There’s this plant that I can smoke that makes me happy, makes me hungry, makes me sociable.”

At the Apotheca dispensary downtown, Dawn Tousey of Marble, N.C., also touted the medicinal benefits of hemp. A few years back, she said, it helped her deal with the pain of a large tumor.

“I think there are a lot of benefits,” Tousey said. Another point in favor of legal hemp, she added, is not having to buy on the black market.

“I do like this option as opposed to illegal sales,” she said. “It should be [treated] the same as alcohol.”

Given the advantages of hemp, Kight said he wouldn’t be surprised to see the entire cannabis industry shift from marijuana toward hemp.

“I believe that the hemp path to full legalization is the better path than marijuana,” he said. “Asheville has much better options for cannabis products than Denver,” where marijuana has been legal for a decade.

Hemp will likely remain the only cannabis option in North Carolina for the foreseeable future, Scales said, given the conservative legislature’s slow movement toward marijuana legalization.

“I like to say, we’ll be the 52nd state [to legalize marijuana],” he said with a laugh.

[Correction: An earlier version of this story misspelled Vincent Pope’s last name.]

Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. John Reinan was a reporter for seven newspapers from Alaska to Florida. He was part of a team awarded the Pulitzer Prize for breaking news coverage at the Minneapolis Star Tribune. Email jreinan@avlwatchdog.org. The Watchdog’s reporting is made possible by donations from the community. To show your support for this vital public service go to avlwatchdog.org/donate.