North Carolina farmers who got into the cannabis business in recent years hoped they’d be in a prime position to capitalize on the state’s eventual legalization of marijuana. But those hopes are fading, even with a bill to legalize medicinal marijuana pending in the state’s General Assembly.
The number of farmers licensed to grow marijuana’s nonintoxicating cousin, hemp, is now one-quarter of what it was in 2020. The medical marijuana bill, languishing in the House after clearing the state Senate with bipartisan support, is a narrow one, providing opportunities for just 10 suppliers and requiring experience that, by definition, no in-state operation can have.
“It’s really going to be limiting as far as the local economy goes,” said Andrew Wheeler, the owner of Arrowhead Hemp Farms in Asheville. “I’d like it to be different, but I don’t hold my breath when it comes to North Carolina.”
Bill sponsors say the measure is purposefully restrictive to ease conservative lawmakers’ concerns that Senate Bill 711 is a gateway to full recreational legalization. Even with that safeguard, the bill may not pass at all. House Republican leadership say there’s no appetite to take it up this year.
Bill sponsors also say the measure won’t necessarily preclude in-state farmers from participating, but they want licensees experienced in producing pharmaceutical-grade marijuana, which is currently illegal to do in North Carolina.
“A lot of people feel like this will be grown and dealt with like you deal with tobacco, but it’s a medical-grade product,” said Sen. Paul Lowe, D-Forsyth, one of the bipartisan bill’s co-sponsors in the Senate.
‘Big Cannabis’
The bill has a residency requirement, saying applicants for medical marijuana supplier licenses must have been a North Carolina resident for two years. But the bill also allows nonresident partners with experience in states that have already legalized medical marijuana, and it requires proof that the operation can “cultivate, produce and distribute medical cannabis.”
These clauses, combined with a requirement that applicants have enough money up front to operate for two years, has potential in-state suppliers and retailers worried that the large multistate companies that have come to dominate the cannabis industry in other states will do the same here.
“It’s written by and for Big Cannabis,” said Nicolette Baglio, who owns Citizen Bloom Botanics in Asheville.
Bill sponsors said the bill was drafted without that corporate influence. Lobbying records show at least two major medical marijuana companies, Trulieve and Merida Capital, hiring lobbyists in the state in April and May of last year, shortly after Senate Bill 711 was introduced with language requiring experience in medical cannabis.
Bill sponsors said bill language restricting competition was based on laws from other states that have legalized medical marijuana.
“We went back and forth on that,” said Sen. Mike Lee, R-New Hanover, the bill’s third co-sponsor. “The idea was to get folks who had experience in the production of pharmaceutical grade marijuana.”
The plan was also to limit the number of licenses, and the bill would create an appointed commission to issue 10 supplier licenses. Those licensees could open as many as eight dispensaries each. The low number was part of the pitch to Republican lawmakers who control both chambers in the legislature: North Carolina’s law will be one of the most restrictive medical marijuana laws in the nation.
‘The Wild West’
Despite these restrictions, Rabon, a key Republican leader at the legislature and bill’s primary driver, said he doesn’t think North Carolina businesses will get locked out. But the business, he said, will be harder to succeed in than many people think.
“Some of these people that think they want to be in the business, when they do their due diligence and their homework, they’re going to realize, ‘Boy, this is more than I can bite off,’” Rabon said.
Asked why a Republican-controlled state legislature wouldn’t let the free market handle that, Rabon said it’s important with new endeavors to avoid “the Wild West.”
“We don’t want to have folks fail,” he said.
That already may be happening in the state’s closely related hemp and CBD industries, which rely on cannabis plants that don’t have enough tetrahydrocannabinol, or THC, to produce marijuana’s intoxicating effect. Once a booming business in North Carolina, the number of farms licensed to grow the plant has dropped from 1,525 in 2020 to 386 this year, according to figures from the North Carolina Department of Agriculture and the U.S. Department of Agriculture, which took over licensing from the state this year.
Wheeler, the Asheville hemp farmer, said some of that is because people decided not to switch from the state licensing process to the federal government’s, but the numbers were plummeting even before that change.
“The hemp industry was tough,” Wheeler said. “The people that are left in it, they’ve proven a couple of things. … The people that are left would all be great candidates [for medical marijuana].”
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