The N.C. General Assembly reconvened for a short session last week. Among the work legislators face may be fine-tuning the Compassionate Care Act, a bill to legalize medical marijuana that would have wide ramifications.
Supporters of medical marijuana and the local hemp industry want to see the state allow the use of cannabis as a treatment option for debilitating medical conditions. On June 2, the bill passed the state Senate with bipartisan support in a 35-10 vote. But there are disagreements with Senate Bill 711 as written, says state Senator Julie Mayfield, who represents District 49.
“As much as we all want the medical marijuana law in North Carolina, this bill would be worse than no bill,” says Mayfield, who is among four Democratic lawmakers at the forefront of negotiations on medical marijuana.
Critics of the current version of SB 711 say the limited number of licenses, high permitting fees and a requirement that the license holder grow, distribute and sell would make entering the medical marijuana industry in North Carolina inaccessible to many.
Blake Butler, executive director of the Southeast Hemp Association, a trade association for hemp growers, says he wants any medical marijuana bill in North Carolina to “be advantageous for the farmer, for the processor/product maker and the patient.”
He adds, “The focus should be getting these natural supplements to the patient.”
Medical marijuana’s N.C. history
Marijuana and hemp are the same plant genus; it’s helpful to think of the two as cousins. According to Healthline, hemp contains 0.3% or less of tetrahydrocannabinol, or THC, a psychoactive cannabinoid that causes a “high.” Marijuana contains 0.3% or more of THC. Cannabidiol oil is a nonpsychoactive cannabinoid, or compound, which is derived from either marijuana or hemp.
Marijuana is a Schedule 6 controlled substance under the N.C. Controlled Substances Act and possession of it is punishable as a Class 3 misdemeanor. (On May 23, state senators filed a bill to continue to exclude hemp and hemp products from the definition of marijuana in the N.C. Controlled Substances Act. If lawmakers don’t act, the current exclusion would expire through a sunset provision June 30, meaning hemp and CBD products would become illegal.*** “This gets everything in line with federal law and amends the [N.C.] Controlled Substances Act,” Butler explains.)
North Carolina is one of 12 states where medical marijuana is not legal, according to the National Conference of State Legislatures. (The Eastern Band of Cherokee Indians legalized the cultivation and sale of medical marijuana in the Qualla Boundary, its tribal land in Western North Carolina, in August 2021.)
In 2014, the North Carolina legislature legalized the use of limited access to products containing CBD for patients with intractable epilepsy, also called drug-resistant epilepsy. But other legislation for medical marijuana has failed to get off the ground. While cannabis has not been legalized for medical conditions, North Carolina allows hemp farming in the state. In 2014, the federal Agricultural Act permitted state departments of agriculture to oversee growing industrial hemp, and the next year, the N.C. General Assembly legalized farming industrial hemp.
Currently, North Carolina has roughly 1,500 licensed hemp producers. And over the past several years, numerous dispensaries selling CBD products have opened, including many in Asheville.
Devil in the details
Republican state Senator Bill Rabon of District 8 introduced the N.C. Compassionate Care Act, or SB 711, April 7, 2021. The North Carolina chapter of the National Organization for the Reform of Marijuana Laws called SB 711 “a very restrictive framework to legalize medical cannabis for a limited number of medical conditions.” But the bill has been sitting in the Senate Committee on Rules and Operations since August 2021. (Rabon also chairs that committee. His office did not respond to multiple requests from Xpress for comment.)
Mayfield says she has heard SB 711 will be referred out of the committee where it is currently sitting. However, she says she’s unsure if the bill will be referred to the Senate floor for a vote or to another committee for additional review. “But there is a desire to move it,” Mayfield says.
SB 711 currently states a patient would be required to have a written diagnosis from a physician for cancer, epilepsy, HIV/AIDS, post-traumatic stress disorder and other conditions. Mayfield tells Xpress she would like to see the permissible uses for medical marijuana include more conditions. “My personal feeling is that the existing list is not expansive enough,” she explains, but notes the legislature can always expand the permissible medical conditions later.
She says her issues with the current bill are the regulatory framework and licensing structure. As written, SB 711 allows an 11-member Medical Marijuana Production Commission to approve 10 medical cannabis supplier licenses for the entire state. The bill also requires vertical integration of each licensed medical marijuana business, called “seed-to-sale tracking.” It means every aspect of the supplier’s business — from cultivation to selling — is operated by one company.
“We need to be thinking about and prioritizing North Carolina businesses,” explains Mayfield, proposing a “horizontal integration system … [where] you would license growers, processors and retailers separately.”
Nicolette Baglio, owner of Asheville-based Citizen Bloom Botanics, a hemp-based wellness brand, does not intend to apply for a medical cannabis supplier license. “Very high-cost barriers of entry, a low number of licenses and the vertical integration requirement makes it extremely difficult, if not impossible, for the current hemp industry [in North Carolina] to participate in this incoming market,” says Baglio.
Baglio notes that SB 711 requires a license fee of $50,000, plus a $5,000 fee for each production facility and medical cannabis center the licensee plans to operate. Additionally, the law requires a $10,000 license renewal fee, plus $1,000 per production facility and medical cannabis center.
Baglio says most local businesses don’t stand a chance against established cannabis companies, called multistate operators, or MSOs. MSOs already produce cannabis products in Canada and the 38 states where medical marijuana or recreational marijuana is legal. “Corporate cannabis are the only ones that have the capital to operate that type of structure [vertical integration],” explains Baglio. “They’re kind of like the Walmarts of cannabis,” she says of MSOs.
Baglio adds that the current SB 711 “also leaves billions of dollars on the table for the state by not increasing participation and access to who can get a license.” (According to the nonprofit research organization The Urban Institute, states that have legalized marijuana levy a wide variety of state and local retail taxes. Some taxes are a percentage of the price and others are based on weight.)
Butler from the Southeast Hemp Association doesn’t think SB 711 as currently written can garner enough support in the General Assembly to become law. As for rewriting the bill, he says, “I think we need to take as much time as possible to get it done right.”
But not everyone in WNC’s hemp industry objects as strongly. Franny Tacy, founder of Franny’s Farmacy, which sells CBD products ranging from gummies to tinctures to tea, would like medical marijuana legislation in North Carolina approved, arguing that something is better than nothing.
“We’ve got to see legislation make progress,” Tacy tells Xpress. “It’s very easy to see sometimes [legislators], they’re putting stuff that’s self-serving or trying to limit the progress. [But] it’s OK. By limiting numbers [of licenses], only certain people, the chosen one — it’s OK. It’s a step forward, and we need one foot in front of the other. … [K]eep making steps forward.”
*** UPDATE: Wednesday, June 1: WRAL reports the NC Senate unanimously approved the 2022 Farm Bill on Tuesday, May 31. The bill now heads to the NC House.
***UPDATE: Thursday, June 2: This article has been updated to reflect that June 2, SB711 passed the state Senate with bipartisan support in a 35-10 vote.