Shutdown deal could imperil North Carolina's booming THC businesses
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North Carolina companies making hemp-derived THC seltzers and edibles say a deal to end the government shutdown in Washington harms the state's hemp industry.
Why it matters: Low-dose THC seltzers have become popular across the state in recent years — even providing a bright spot for many struggling craft brewers who have seen sales slump.
- But an agreement to end the shutdown includes a provision to eliminate the hemp loophole that allowed THC and CBD seltzers and edibles to be sold across the country.
Catch up quick: The 2018 Farm Bill allowed for intoxicating THC to be sold in low doses. But the new provision would criminalize any product with more than 0.4 milligrams of hemp-derived THC — essentially encompassing all products on the market, The Guardian noted.
- Kentucky Sen. Mitch McConnell, who authored that 2018 Farm Bill, has been a leading proponent of closing the loophole, arguing that companies have exploited it to create intoxicating substances, Axios Twin Cities writes.
Between the lines: In North Carolina, there has been strong interest in regulating the hemp industry, which has boomed both on farms in the state and in stores. But no deal has been struck in the General Assembly.
- And Jeff Jackson, North Carolina's attorney general, joined several other attorneys general in calling for the hemp loophole to be closed earlier this year, saying unregulated THC products are far too easy for children to access in the current environment.
Zoom in: A spokesperson for Sen. Ted Budd said closing the hemp loophole, which he supports, would prevent the sale of "dangerous intoxicants like Delta-8 from being sold in unregulated retail stores and abused, while protecting the use of non-intoxicating CBD and hemp derivatives."
State of play: Many companies selling THC in North Carolina say they want some regulation, like dosage limits, though not to the extent the Washington agreement would reach.
- While marijuana remains mostly illegal in any form, North Carolina is among the most lenient in the country in its regulation of hemp-derived consumables, Axios previously reported.
- As of now, the state has no limits — or age restrictions — on any cannabinoids with psychoactive effects, much like those of THC, including delta-9 products.
What they're saying: "We are very concerned and were really blindsided by the inclusion of a provision like this," Les Stewart, co-owner of Raleigh's Trophy Brewing, told Axios.
- Earlier this year, Trophy started selling two versions of a hemp-based, delta-9 seltzer called Starry Eyes, one with 5mg of THC and another with 10 mg.
- "We approached [making our THC seltzer] with the idea that regulation was coming and, frankly, welcome," Stewart said. "But this is beyond that. This is an intentional industry killer."
Reilly Dunn founded the Raleigh-based THC seltzer company Groovewagon in 2022, as a way to give sober-curious individuals another drink option.
- He is in favor of putting a cap on how many milligrams of THC are in products. However, he believes a total ban would push many people back into illegal markets.
- "Do you think that folks who are used to getting THC at the grocery store or at their local dispensary are gonna stop getting THC?" he said. "They're going to go straight back into the criminal markets."