Understanding The North Carolina CBD Law: A Complete Guide

What is CBD?

In its simplest terms, CBD is one of hundreds of chemical compounds in the cannabis (marijuana) plant.
CBD is shorthand for Cannabidiol and is one of the many cannabinoids found in the cannabis plant. Marijuana contains both THC and CBD, while industrial hemp only contains CBD, or trace amounts of it. Using CBD derived from hemp is much less problematic than using CBD derived from marijuana because there is generally (at least in the minds of many) nothing illegal about CBD derived from hemp. THC is the psychoactive compound in marijuana that gets users high, while CBD is not a psychoactive compound and does not get the user high. CBD is credited with a number of potential health benefits including relief from pain, stress, anxiety, inflammation, spasticity, and psychotic disorders. CBD can be taken orally , sublingually (under the tongue), in food and drink, and within the body in the form of gel caps, tinctures, patches, gummies, and salves. CBD has many forms because of the various ways it can be absorbed by the body. Not all CBD products are created equal, and the source from which the CBD is harvested, the extraction process utilized, and the product’s delivery method all impact the product’s safety and efficacy. And, if you’re consuming CBD oil, you need to keep in mind that many-but not all-manufacturers use coconut carrier oil to dilute their oil. Thus, any person who is allergic to coconut oil is advised to avoid syringes of CBD oil containing coconut oil. Additionally, some CBD products are marketed specifically for pets, and pets that are fed human grade CBD can become stoned from ingesting too much THC or CBD.

CBD’s Legal Status in North Carolina

At the state level, CBD is legal in North Carolina as a derivative of hemp. Specifically, North Carolina law prohibits the use of marijuana, including any parts of the Cannabis plant with more than 0.3 percent THC. However, hemp—defined as the Cannabis plant and any part of it, including its seeds and any compound, manufacture, derivative, extract or other product of hemp—is a lawful crop in North Carolina provided that it is licensed by the North Carolina Department of Agriculture and Consumer Services (NCDA&CS) Industrial Hemp Pilot Program.
Not only is hemp cultivation allowed, but possession of CBD oil in North Carolina is also legal, provided that such use is not in violation of federal law. However, as discussed below, the Food Drug and Cosmetic Act (FDCA) defines CBD as an active ingredient in prescription drugs, which does constitute a violation of federal law. Depending on how you look at it, even a single drop of CBD oil could be considered both legal and illegal simultaneously.
CBD oil has recently gained national popularity, particularly in connection with the treatment of epilepsy. But the legality of CBD oil—as well as the legality of CBD itself—remains largely unsettled as of the time of this writing. The primary reason why is that the FDA has yet to issue any formal regulations regarding CBD. In other words, to date, the FDA has not issued regulations concerning exactly what may and may not be considered legal versus illegal.
As noted above, under federal law CBD is considered an active ingredient in prescription drugs because it is a derivative of THC. Regardless of whether or not an individual is in possession of it, such possession around minors is technically defined as a Class I felony under North Carolina law. However, courts have yet to prosecute anyone and are likely to abstain from doing so until the federal government issues regulations regarding just how legally (or illegally) possession of CBD oil may be characterized.
Hemp is currently cultivated in accordance with North Carolina law, which requires that individuals (of any age) or businesses have a commercial license from the NCDA&CS. Applications for licenses and renewals are available from the NCDA&CS on or after December 1 every year. The deadline for submitting complete applications for new licenses during the upcoming season will be at the end of that December in the year prior to the planting season. For the 2019 season, the submission deadline for those applications will be at the end of December 2018.
Hemp-derived CBD has become hugely popular in recent years both in the United States and internationally. It is unclear whether or when the FDA will move to issue regulations regarding the legal status of CBD oil under federal law. Given the number of states who have legalized the use of CBD oil, it would be surprising if the FDA moved to ban it completely anytime soon.

North Carolina’s Industrial Hemp Pilot Program

North Carolina’s Industrial Hemp Pilot Program is a legislative initiative that provides an opportunity for the cultivation, research, and possible commercialization of industrial hemp, which is defined as Cannabis sativa L. containing no more than 0.3% delta-9 tetrahydrocannabinol (THC) in the flowering tops (the part of the plant used to produce CBD). The program allows entities such as universities, public colleges and universities, and private colleges and universities to grow industrial hemp for research purposes, but only on property that it owns or leases in North Carolina. The pilot program is designed to test the viability of industrial hemp as a business crop in the State, evaluate consumer markets for industrial hemp, and enhance the State’s agricultural sector by using industrial hemp as a substitute for other non-traditional crops.
North Carolina’s Industrial Hemp Pilot Program is consistent with the Farm Bill, enacted in February 2014, which amended the Agricultural Marketing Research Act of 1946 to allow states to set up programs for the growth and cultivation of industrial hemp. Specifically, Section 7606 of the Farm Bill, known as the Section 7606 Pilot Program, permits institutions of higher education and state departments of agriculture to grow or cultivate industrial hemp for research purposes so long as it is carried out in compliance with state law, and the state law authorizes the growth or cultivation of industrial hemp.
In accordance with the Farm Bill’s Section 7606 Pilot Program, North Carolina’s industrial hemp law authorizes the North Carolina Department of Agriculture & Consumer Services (NCDA&CS) to register grower-applicants, authorize licensed entities to engage in the cultivation of industrial hemp, and implement regulations and requirements applicable to registered grower licensees. The law does not alter a licensing entity’s authority to enforce criminal laws under the State’s Controlled Substance Law, and any entity licensed under the Act is subject to the authority of and regulation by the NCDA&CS.
The pilot program is limited to 20 grower licensees in the first year, in part because the program was launched as a result of "a growing interest in the development of industrial hemp as an agricultural commodity." Registered grower licensees are subject to annual licensing requirements similar to other agricultural licenses in North Carolina, and must pay an application fee that will vary depending on the type of license sought. Registered grower licensees are also required to submit an annual report to the NCDA&CS that includes the licensee’s field study information, total acreage planted, approximate date if planting, total number of plants grown, licensee’s field observations of variety performance, any pest or disease issues encountered, and observations of harvest time, including any problems experienced with seed harvest or yields.
Registered grower licensees are subject to testing requirements. For instance, at least three weeks prior to harvest, grower-licensees must collect samples from each field with flowering tops and buds, and deliver 30-gram sealed airtight samples to an authorized laboratory for testing for THC content and genetic testing. Grower-licensees must submit the results of the THC content and genetic testing within five days of receipt of the testing results. If the THC content exceeds 0.3%, the licensee must destroy the crop within 24 hours. If the THC content does not exceed 0.3% or is lower than the THC content previously reported by the licensee, the licensee must submit a new sampling and testing request. A violation of any provision of North Carolina’s industrial hemp law may lead to civil penalties. Alternatively, a violation that constitutes a violation of North Carolina’s Controlled Substance Law may lead to the denial of any retail sales permit, registration, or license, or a fine not to exceed $10,000 within any 12-month period.
North Carolina’s industrial hemp law does not directly address whether commercial entities can sell CBD products. However, the law does contain provisions that may enable commercial entities, such as postsecondary institutions and private entities, to grow industrial hemp for purposes such as "developing preclinical data and perform FDA-regulated clinical or other investigator-initiated studies that may be submitted to the US Food and Drug Administration."

Limits and Regulations

There are a number of restrictions and regulations that must be followed when selling and possessing CBD products. For example, people who sell or handle CBD products must be 18 years or older. This means that if a gas station sells CBD oil to minors, they could face criminal charges. Age limits also apply to the purchase of CBD products: children and teenagers may not buy CBD products. Currently, there are no minimum age requirements for the sale or purchase of Charlotte’s Web. However , it is still best practice to ensure that the people buying your products are of legal age.
Labeling must meet all the requirements from North Carolina’s Food, Drug, and Lodging Law and all existing requirements from the U.S. Food and Drug Administration. It’s very important to note that any CBD products that contain more than 0.3 percent of THC must adhere to mandatory testing requirements. All commercial marijuana products, such as edibles, must contain specific labels indicating state certification, nutrient content, and more. Further, all cannabis items sold in North Carolina are required to use a "child-proof" package.

The Future of North Carolina’s CBD Laws

Changes and updates to the legal status of CBD in North Carolina are pending in early 2021. The reelection of Republican Governor Roy Cooper, and the dismissal of the cases prosecuting CBD business owners, are likely to cause the state’s legislative priorities to shift away from prioritizing low-level CBD law violations. The General Assembly has already taken initial steps to address NAC 90-113.7 laws related to manufacturing, distributing, and selling CBD.
Proposed bill HB 277 was filed on March 9, 2021. This bill removes current language forbidding businesses from selling CBD products except those approved by the Food and Drug Administration. Currently, state law allows any business to sell CBD as long as the product contains less than 0.3% Tetrahydrocannabinol and contains no other nonindustrial ingredients. This law will effectively expand the types of CBD businesses that may legally advertise and market themselves and will essentially pre-empt a large loophole which has existed in the state that only formally FDA-approved businesses could lawfully operate within that state, and which allowed the state to prosecute every CBD business as a criminal enterprise immediately.
Pending legislation is likely to also address the licensing process for hemp farmers interested in processing their crops into CBD oil, as well as defining how exactly businesses that are FDA-approved commercial sellers of CBD may be distinguished from non-FDA approved businesses not already in compliance with current North Carolina laws. While non-industrial hemp production, in theory, should allow us to legally handle the 20% of cannabinoids that are not federally approved as of now (CBD, CBG, CBN etc.), how exactly will the state of North Carolina pragmatically distinguish industrial hemp from non-industrial hemp, and thus legal from illegal producers? The rules governing the labeling of what constitutes industrial hemp will need to be codified in such a way that does not force the business community to play an open game of "guess who’s CBD is legal versus that of competing cannabis producers."

North Carolina CBD Law – Navigating the Current Landscape

Understanding the intricacies of the law in North Carolina is crucial, whether you are a consumer or working within the CBD industry. Seeking out trustworthy information from state government resources, legal professionals, and reputable industry publications is always the best course of action.
North Carolina State Government Resources
The North Carolina Department of Agriculture and Consumer Services is tasked with keeping up with the evolving CBD market. Recently, they have made strides to keep retailers informed about legal developments. This includes keeping their FAQ resource page current and distributing notices about new regulations to retailers by email. In addition, the North Carolina Department of Health and Human Services regulates food, dietary supplements and products containing CBD . The agency has a resource page with frequently asked questions relating to food and dietary supplements.
Legal Counsel
As states continue to push forward in the gray area of CBD law, it is important to regularly consult with a qualified professional in North Carolina. There are many nuances to CBD law and formal legal advice should be sought when making business decisions like entering into new contracts, opening a business or filing for a license.
CBD Industry Publications
There are also many industry publications that can keep you in the loop about CBD developments. Some of the best known are:
Navigating the legal landscape when using or working with CBD in North Carolina requires diligence, but it can be done successfully. Follow all state and federal legal developments closely, seek professional advice when needed, and do your research to be informed on the industry.