North Carolina lawmakers take first steps to regulate hemp-derived consumables, CBD products.

“When I started naively, I thought I just wanted to make sure that a 10-year-old kid can’t walk into a smoke shop and buy some of these products,” Rep. Jeff McNeely told members of a House Judiciary Committee on Wednesday.

But House Bill 563 has grown over the past three months to a 17-page bill that establishes age restrictions on hemp-derived consumables, licensing requirements for manufacturers and distributors, and new testing requirements.

“Research is suggesting that around three-fourths of our youth are finding their way to marijuana by ways of these type products that are in smoke shops and convenience stores,” McNeely said.

The Iredell County Republican said at present the cannabinoid industry is largely unregulated in the state. HB 563 would make it unlawful to give a hemp-derived consumable to anyone under18 without the consent of the underage person’s parent or legal guardian.

Manufacturers and distributors would be required to obtain a state license to sell by July 1, 2024. Independent laboratory testing would also be required to determine the presence of cannabinoids, heavy metals, microbials and pesticides.

Elizabeth Robinson of the North Carolina Retail Merchants Association said their members were in support of McNeely’s legislation.

“We appreciate the framework for legitimate businesses to continue to operate responsibly and at the same time regulate those bad actors that, as he said, unfortunately have some of these products getting in the hands of our youth,” said Robinson.

Rep. Carson Smith, a retired sheriff from Pender County, successfully amended the bill Wednesday to require the governing bodies of schools to adopt written policies prohibiting the use of tobacco and hemp-derived consumables on school grounds and at school-sponsored events. This would apply to charter schools and all public schools.

Schools in Iredell County and Pitt County had to call paramedics last year when students consumed colorful gummies containing THC. In both cases, the children were ultimately fine, but officials worried that hemp-derived consumables could easily be confused for candy by an unsuspecting child.

HB 563 would prohibit edibles being formed in the shape of an animal or cartoon character.

“Are the penalties consistent with what it is for small amounts of marijuana?” asked Rep. Marcia Morey (D-Durham).

“No ma’am, they’re really not,” answered McNeely. “I kind of look at this product like non-alcoholic beer. If it’s made right, there’s really nothing there that’s criminal or wrong. It’s when it’s not made right that we have our issue.”

McNeely said he had hoped the NC Department of Agriculture could help with testing.

“Department of Ag says they don’t have the abilities, the time, the people to be able to do this. So, the only way I knew to rope this in for a smaller amount of money was to put harsh enforcement on the backside, hoping that the players in the game will play by the rules and clean up whatever it’s not doing right.”

“Can you help explain the testing process? Who’s responsible and who pays for that?” asked Rep. David Willis (R-Union).

The manufacturer would be responsible for the testing prior to distribution. Once distributed, further testing would be part of ALE’s duties, according to legislative staff.

A $500,000 appropriation would aid with the uptick in testing by ALE.

“Is there not some way to have the industry cover that cost rather than the taxpayers of the state of North Carolina?” asked Willis.

“We’re hoping that the industry will end up being able to fund these agents and the sampling, and all once this bill gets going. But we had to have some start money to get it going,” McNeely said.

Beginning in January 2025, North Carolian’s ALE Division would submit an annual report to the General Assembly describing in detail its enforcement efforts.

Manufacturers would also be required child-proof their packaging and include a list of ingredients and possible allergens. A warning label would advise that the consumption of certain cannabinoids can impair one’s ability to drive or operate heavy equipment.

If approved, restrictions would not go into effect until July 2024.

“I understand that there’s stuff in the pipeline. We’re not asking anybody to go just rip everything off the shelf,” said McNeely. “We’re giving them time to do that.”

With a favorable vote, the next stop for HB 563 is the House Appropriations committee.