If you can’t beat ‘em, join ‘em.
As I think about the recent events in the North Carolina Senate, I’m reminded of the line from the movie American Hustle where Amy Adams says: “You’re nothing to me until you’re everything.” In the film she’s explaining the fact that her fellow con artist, played by Christian Bale, doesn’t matter unless and until he’s absolutely necessary.
In a year flooded with messaging about intoxicating hemp products marketed to minors, pleadings to “close the loophole”, and a spate of legislation aimed at either restricting the availability of hemp and hemp-derived products in the marketplace or forcing hemp products into state licensed dispensaries (read state-backed monopolies), large, multi-state marijuana companies and their lobbyists finally found something useful to do with hemp- use well-written, purposeful, and responsible regulations as a vehicle to push their agenda.
The Surprising Evolution of North Carolina’s House Bill 563
North Carolina House Bill 563 (H563) was filed on April 4, 2023, and after several revisions, passed unanimously out of the House last year on September 21, 2023. The title of H563 after passing out of the House was:
“An Act To Regulate The Sale And Distribution Of Products Containing A Hemp-Derived Cannabinoid And To Establish A Regulatory Framework For The Commercialization Of Kratom.”
By the time the Senate Judiciary Committee finished with H563 and added a substitute on June 13, 2024, it was titled:
“An Act to Regulate the Sale and Distribution of Hemp-Derived Consumable Products, To Ban Those Products from School Grounds, to Place Tianeptine, Xylazine, and Kratom on the Controlled Substance Schedules, to Create the Offense of Criminal Possession and Unlawful Sale of Embalming Fluid and to Make for Other Technical Revisions, and to Create New Criminal Offenses for Exposing a Child to a Controlled Substance.”
By the time mid-June of 2024 rolled around in Raleigh, H563 did far more than regulate hemp-derived consumable products and Kratom. In moves that hardly anyone could argue with, the first Senate revision placed extremely dangerous substances like Tianeptine and Xylazine on the state’s list of controlled substances and made it a criminal offense to expose a child to controlled substances. A more controversial decision was to place Kratom on the state’s controlled substances schedules. And finally, the bill made the possession and unlawful sale of embalming fluid a criminal offense.
Everything added by the Senate Judiciary Committee on June 13, was reasonable, and certainly germane to a bill that sought to address consumer safety concerns via appropriate regulations. As a result, it was of little shock to industry participants, lobbyists, legislators, and bill sponsors that this revised version passed unanimously out of the Senate Judiciary Committee.
H563’s next stop in the Senate was in the Senate Finance Committee on June 18, 2024, and this stop in Committee added a 10.5% excise tax on hemp-derived consumable products. While certain critics of this were taken aback by such a high number, this additional tax (these products were already subject to federal, state, local tax laws) provided a reasonable way for the state to generate revenue.
How the Failed NC Compassionate Care Act Turned into an H563 Amendment to Legalize Medical Marijuana
At this point in time, it is worth mentioning that shortly before H563’s stop in Senate Judiciary, several new lobbyists registered on the bill and started darkening the doorways of Senators in the legislative buildings in Raleigh. These lobbyists came from companies hemp industry participants knew by name, many of whom operate marijuana businesses in multiple states, and some of which are actively dumping money into legalizing marijuana for recreational use in other southern states.
The head scratcher of this is why would they be registering to lobby on a bill that regulates hemp and hemp-derived products? While not unheard of to register on a bill and actively lobby against it, it seemed as if a different agenda was afoot.
Introduced in North Carolina on January 25, 2023, Senate Bill 3 (S3), otherwise known as the NC Compassionate Care Act, sought to bring medical marijuana to qualifying patients in the Tar Heel State. S3 passed through the Senate on 3/1/2023, and from there it was assigned to the House Health Committee on 5/18/2023. It was brought up for discussion in the House Health Committee but failed to acquire enough support from the House Republican Caucus to get it to a House Vote.
Referred back to Senate Judiciary for a second time, on June 19, 2024, H563 received another amendment.
The new title of H563 after this hearing read:
“An Act To Regulate The Sale And Distribution Of Hemp-Derived Consumable Products, To Impose An Excise Tax On Those Products, To Ban Those Products From School Grounds, To Place Tianeptine, Xylazine, And Kratom On The Controlled Substance Schedules, To Create The Offense Of Criminal Possession And Unlawful Sale Of Embalming Fluid And To Make Other Technical Revisions, To Create New Criminal Offenses For Exposing A Child To A Controlled Substance To Enact The North Carolina Compassionate Care Act, And To Require Certain Education About Opioids.” (Emphasis added).
All of a sudden, a bill that provided reasonable regulations for hemp and hemp-derived products in North Carolina became the useful (only) vehicle for getting medical marijuana passed within the state, not to mention throwing a lifeline to the well capitalized companies pushing this schedule I controlled substance.
Uncertain Outcome for H563- Stay Tuned!
On June 24th, 2024, H563 passed its third reading on the floor of the Senate with a vote of 36 in favor, 10 opposed. It now heads back to the House where a “concurrence vote” must be taken. Due to the fact that both the House and Senate must agree on legislation that is to be passed, and since H563 started in the House, it must agree to the myriad of changes that this bill has seen since the House finished with it in the fall of 2023. It remains to be seen whether the House will concur on this version, or whether H563 will be sent to a conference between House and Senate members to decide its fate.
Despite the foggy future of H563, one thing remains clear- the marijuana propaganda machine and its message that hemp is unregulated has failed. By point of fact, regulated hemp is what gave medical marijuana a chance in North Carolina. I guess marijuana figured “If you can’t beat ‘em, join ‘em.” And while I don’t think regulated hemp will be getting a thank you card from multi-state marijuana monopolies any time soon, you’re welcome.
