Budding hemp industry holds its breath over potential flower ban

As state lawmakers and law enforcement agencies debate the fate of smokable hemp flower in the North Carolina marketplace, the industry is holding its breath.

To many growers, the legalization of hemp offers hope, healing and numerous business opportunities. It’s also invited a new generation of licensed farmers into the fold who are passionate about the plant’s potential to underpin everything from biofuel to green packaging to soil remediation. And while data remains limited concerning the health benefits of products such as CBD oil, edibles and smokable flower, anecdotal evidence suggests that hemp is helping consumers manage everything from anxiety to depression to various physical ailments.

Epidiolex, a treatment for certain types of epileptic seizures, recently became the first FDA-approved CBD drug. And on April 2, Commissioner Scott Gottlieb issued a statement saying that the Food and Drug Administration is in the early stages of evaluating CBD medications and “providing potential regulatory pathways.”

But it’s not all pre-rolls and sunshine. Within this rapidly growing industry there exist hazy legal nuances that state lawmakers and law enforcement agencies are still struggling to get a handle on. Smokable flower in particular — which produces no psychoactive effects but looks and smells exactly like marijuana bud — has raised concerns on the part of the N.C. State Bureau of Investigation, among others. In late May, the SBI issued a statement listing items the agency wanted to see included in the proposed N.C. Farm Act of 2019.

The Senate version of the bill, SB 315, was approved June 17 on a 31-14 vote. And though the final draft didn’t give the SBI everything it wanted, the fight will now move to the House.

Nipping it in the bud

Several years ago, the state launched an industrial hemp pilot program; the current bill aims to replace those limited efforts by establishing a full-blown hemp industry here. Further complicating matters is the federal Agriculture Improvement Act of 2018, which legalized all industrial hemp (defined as that containing less than 0.3% THC) nationwide. The North Carolina bill represents legislators’ attempt to bring state policy in line with the updated federal law. The bill also empowers the N.C. Industrial Hemp Commission, established as part of the pilot program, to act as the fledgling industry’s governing body. The agency’s name would be changed to the N.C. Hemp Commission.

Topping the list of concerns in the SBI’s May statement was the assertion that legalizing hemp bud and similar products would interfere with law enforcement’s ability to use probable cause to seize and analyze items that might be marijuana. Because no officially recognized field test is currently available here that can differentiate between the two, finding a bud could no longer be considered evidence of a crime, since the item in question might be legal hemp.

Law enforcement’s inability to make this key distinction, the SBI statement explained, “is problematic in all marijuana prosecutions, from small amounts to trafficking amounts of plant material.” For this reason, it continued, “There is at least one District Attorney’s Office in NC which is currently not prosecuting marijuana cases.”

The SBI also expressed concern about the lack of regulation of hemp and CBD products in the state, noting, “Many products for sale in commercial businesses are intentionally mislabeled to contain CBD, but they contain harmful Schedule I controlled substances, synthetic cannabinoids, ‘bath salts,’ and other adulterants such as rat poison.” The SBI also cited the possibility that an item sold as CBD might actually contain more THC than what the label showed — or could just be straight up marijuana in disguise.

These assertions culminated in a bold, unexpected and italicized statement: “The unintended consequence upon passage of this bill is that marijuana will be legalized in NC because law enforcement cannot distinguish between hemp and marijuana and prosecutors could not prove the difference in court.”

Where have they been?

Under federal law, marijuana is still banned as a Schedule I controlled substance. Yet the federal Agriculture Improvement Act of 2018 removed hemp, which is a variant form of the same plant, from that list. To resolve this quandary, the SBI proposed banning all smokable flower, in addition to more stringent regulation of hemp processing and a host of other precautions.

But those suggestions didn’t sit well with Tar Heel farmers and others who have invested their livelihoods and resources in the industry. According to the minutes of the N.C. Industrial Hemp Commission’s most recent meeting, there are 1,017 licensed industrial hemp growers across the state — compared with just 306 a year ago. Those growers represent 12,600 acres of farmland and more than 4.9 million square feet of greenhouse space. There are also 601 registered processors.

That’s why Asheville-based activists Blake Butler and Rod Kight are making their voices heard on behalf of the farmers, processors and consumers whom they maintain have greatly benefited from the state’s burgeoning hemp industry. Butler is executive director of the N.C. Industrial Hemp Association, a nonprofit trade group. He says he’s driven from Asheville to Raleigh at least eight times in June alone to meet with state legislators about the potential ban on smokable hemp. Kight, an attorney, runs a legal blog called Kight on Cannabis.

“All we’re trying to do is help the North Carolina farmer,” says Butler. “We want that famer to be recognized for growing a crop. It’s been legal in the state for three years under the pilot program, and smokable flower makes up about one-third of that industry. For law enforcement to come in on the back end — our question is, where have they been?”

Although a May 23 draft of the farm bill called for the SBI’s requested ban on smokable hemp to take effect as soon as Dec. 1, 2019, the version which was passed by the Senate delays the ban until Dec. 1, 2020. In addition, the bill instructs the Department of Agriculture and Consumer Services, the Hemp Association, the Hemp Commission, the SBI and any other law enforcement agencies and district attorneys the SBI wishes to include, to “meet at least quarterly to discuss best practices for the hemp industry.”

The last-minute shift, which buys critical time for the industry, seems to be due largely to Butler’s advocacy efforts since he was hired as the Hemp Association’s executive director in mid-January. During his frequent trips to Raleigh, Butler says he’s met one-on-one with the SBI, sheriffs, district attorneys and legislative leaders. All of them, he reports — including Sen. Brent Jackson, an author of the bill — have been receptive.

“We know the technology is there for a reliable field test,” Butler maintains. “The DEA now has a list of vendors they could recommend. My goal is to get a reliable field test in the hands of the SBI within three months.”

But for Butler, there’s a bigger issue at stake. “All the concerns the SBI brought up, we can address, but we definitely cannot be categorized as an industry that is going to break the law,” he continues. “That day is over: We want to be seen professionally, and we want a regulatory framework for our industry. … I’m not sure why law enforcement doesn’t get it, but on the same hand we’re willing to meet them halfway, educate them, help them and deliver a field test.”

Kight, meanwhile, argues that North Carolina growers would see such a ban as a serious violation of trust, considering the initial support the state’s pilot program has given them over the last several years. “Farmers are making decisions of what to grow right now, buying seeds, formulating a plan,” he points out. “If that gets pulled out from underneath them, that’s tough.”

Accordingly, continues Kight, “My role is to educate everyone about this. A lot of it is a simple lack of understanding: Until recently, the term ‘smokable flower’ was unknown to about 70%-80% of legislators. It’s emerged suddenly and taken a lot of people by surprise.”

That’s important, he explains, because “of hemp crops, the most profitable are hemp flowers. A rough analogy would be a mass-market beer versus a craft beer in a local brewery. To have a smokable flower, a bud needs to look nice, smell nice, taste good. Hemp for biomass is still a good crop, but states across the country and even foreign countries are growing this for oil, and North Carolina farmers are going to have to be competing with all of them in what will amount to a race to the bottom. For a farmer, hemp flower, with its craft element, is going to keep them in business.”

Medicine for the poor?

Lee VanTine, a Hemp Association member who owns the CBD and hemp retailer Apotheca, echoes that belief. “If North Carolina doesn’t have smokable flower, they’ll get blown over in the market,” he predicts.

And as the issue looms in Raleigh, VanTine — like many other local growers and retailers who have focused a large portion of their business on hemp flower — is frustrated. “At the end of the day, it’s not a controlled substance: It’s a controlled commodity. We should not be going through this crap,” he declares.

“Getting rid of hemp isn’t the way to do it. Hemp’s not the bad guy. Smoking the flower is the quickest way to absorb the CBD, and it’s the most economical way for people to get it. If you take away hemp flower, you’re taking away medicine from the poor,” VanTine asserts. “Even if it means law enforcement is tasked with telling the difference, they are tasked with a lot of instances where they have to tell the difference. Let’s get on with people having some medicine.”

Clarenda Stanley-Anderson, a hemp activist who owns the social equity-focused Green Heffa Farms in Liberty, wholeheartedly agrees. “Why would you put in a regressive, prohibitive piece of legislation instead of figuring out a way to be able to test and make sure that smokable flower is hemp-derived?” she asks. “Let’s put our energy into that. We have leading research institutions: What the hell were y’all doing with the pilot program? I can’t see the plane. Where’d y’all fly to?”

Meanwhile, recent UNC Asheville graduate Libby Meier, who works at Green River Botanicals, says she’s one of many local farmers who have found full-time work cultivating the plant. “Hemp definitely created an opportunity for me,” says Meier, adding that the industry is “growing very fast. We would probably see a lot of loss in terms of revenue and employees if the flowers were banned.”

According to the minutes of the Hemp Commission’s June 7 meeting, the number of licensed hemp growers statewide has more than tripled in the last year, and Kight describes the Asheville area as a center of gravity within the industry. Asked for a specific number, Butler said, “Not all growers are members of our association, but I can tell you there’s over 200 approved growers in Western North Carolina.”

Racial discrepancies

Meanwhile, for farmers of color, the hemp flower’s ambiguous legal status doesn’t just cause frustration: It incites paranoia.

“My husband walks around with his license with him at all times. He gets pulled over just for being who he is, with locks in his hair — by his very existence,” says Stanley-Anderson. “We try to be proactive and transparent with law enforcement, but there’s this constant fear you live with, when he’s transporting [hemp plants] or has dry biomass on him, that he won’t have the opportunity to explain what he is. That fear permeates and is something a lot of people in this industry deal with.”

A national advocate for greater fairness in the industry, she maintains that even qualified African American farmers may have a harder time obtaining loans than their white counterparts. And the farming laws, argues Stanley-Anderson, create additional obstacles.

“Anyone with a felony on their record has to wait 10 years before they can enter the hemp industry in North Carolina. This again puts people of color at a disadvantage, since black people are four times more likely to be arrested for cannabis use, despite white people in this country using the drug at a proportional rate,” she explains.

Asked about the commission’s decision 2 1/2 years ago to exclude felons from the pilot program, Chair Tom Melton said he doesn’t specifically recall the discussion when the commission made the rule, but, “At the time, hemp was a controlled substance, and as such, the restriction made sense to most people.” In terms of the current situation, he added, “I understand it’s debatable on a couple of fronts, and the public will have an opportunity for input when the new program is developed later this year.”

Local officials largely silent

With so much legal uncertainty clouding the air, you might expect that local law enforcement would be weighing in. But when asked about it, Public Information Officer Aaron Sarver of the Buncombe County Sheriff’s Office remained tight-lipped. “This isn’t something that is much of an issue for the Sheriff’s Office,” he wrote in an email, declining further comment.

Christina Hallingse, the Asheville Police Department’s public information officer, didn’t seem particularly concerned either, explaining in an emailed statement that the department has received no complaints regarding wrongful arrests or citations related to hemp, and that there are officers on staff who have received extensive training to determine impairment and identify substances on a case-by-case basis.

Asked about the potential hemp flower ban during a June 12 phone call, state Rep. Brian Turner, a founding member of the so-called North Carolina “Cannabis Caucus,” said the issue hadn’t been on his radar yet but that he would look into the situation more closely. Now that the bill has cleared the Senate, however, it will land squarely in the laps of Turner and his colleagues. As this issue went to press, the House Agriculture Committee was slated to begin consideration of the bill on Tuesday, June 25.

Finding the way

While it’s true that North Carolina law enforcement agencies currently have no official field test they can use, smokable hemp advocates say one could be available before too long.

In February, the Drug Enforcement Administration posted a notice on the federal business opportunities website that it was looking for a “rugged” and “portable” field test kit with the ability to distinguish between hemp and marijuana. There’s already at least one potential candidate: In April, the Nevada-based Digipath Labs filed a provisional patent application for a field test, which CEO Todd Denkin described as “a cross between 23andMe and a paternity test for plants.” And on his blog, attorney Kight says he has in his possession an effective test that’s been used throughout Europe and could be adapted for the American marketplace.

Asked about the SBI’s position on field tests, Public Information Director Anjanette Grube explained in an email, “State law requires the THC in hemp to be at 0.3% or lower. As far as the SBI is aware, the ‘reliable field test’ being shown to legislators is not validated by an accredited crime lab and only measures 1% THC or higher. The SBI will continue to work with the Drug Enforcement Administration to identify tested and proven solutions to this issue.”

In the meantime, local growers and retailers say that by being proactive and transparent with local law enforcement they can usually avoid any trouble. Mike O’Dekirk, general manager of the hemp retailer Instant Karma, says the business has a veteran cannabis consultant on staff, conducts monthly trainings and keeps an updated binder of paperwork for every CBD product sold. He’s happy to let anyone who asks flip through it. And Meier says that every single one of her store’s products has a scan code that will take users directly to the results of lab tests conducted by a reputable third party.

For his part, Butler points out that since the pilot program was launched, “We have grown unregulated. So we can expect more challenges like this ahead.” But for him, the key issue is having time to work things out — particularly the smokable flower ban.

“We have to compromise in a way,” he concedes. “All we ask for is enough time to come to the table and present these things people are concerned about. Dec. 1, 2019, is different from Dec. 1, 2020.”

In her email, Grube emphasized that her agency “is working closely with legislators regarding concerns surrounding hemp laws and pending legislation. The SBI understands and respects the economic impacts the hemp industry has had on North Carolina. However, it is imperative that law enforcement across our state have the mechanisms in place to effectively do their jobs and enforce current state laws.”

And as the hemp industry continues to work with legislators and law enforcement to address this issue, Butler advises his colleagues to remain patient.

“Everyone is enthusiastic, but at the same time, we need to be professional,” he maintains. “We’ve waited a long time to be given this legitimate place as an agricultural commodity. We have to address all the concerns going forward, because it’s moved so fast and become bigger than all of us.”