North Carolina's Hemp Crackdown Goes Way Beyond Federal Law

North Carolina House Bill 328 represents one of the most restrictive approaches to hemp regulation in the country.

North Carolina House Bill 328 represents one of the most restrictive approaches to hemp regulation in the country, imposing licensing fees that could reach $25,000 and banning virtually all hemp-derived cannabinoids except delta-9 THC at federal limits [1]. The bill creates a regulatory framework far more restrictive than federal hemp law, potentially transforming North Carolina from a hemp industry hub into one of the most prohibitive states in the nation.

While the 2018 Farm Bill opened the door to a thriving hemp industry by legalizing hemp with less than 0.3% delta-9 THC, North Carolina's proposed legislation would slam that door shut for most hemp-derived products currently on the market [2]. This represents a fundamental shift away from the federal approach that has allowed hemp businesses to flourish in the state, with significant implications for consumers, businesses, and the broader cannabis policy landscape.

Hemp 101: Understanding the basics

For newcomers to the hemp world, understanding the basic terminology is crucial to grasping why North Carolina's approach is so restrictive.

Hemp versus marijuana are botanically the same plant—Cannabis sativa—but legally they're distinguished by THC content [3]. Hemp contains 0.3% or less delta-9 THC by dry weight, while marijuana exceeds that threshold. This 0.3% limit comes from a 1976 taxonomic study by Canadian scientist Dr. Ernest Small, who explicitly stated the threshold was "arbitrary" and not based on psychoactive effects or abuse potential [4].

Cannabinoids are the chemical compounds that make cannabis unique. The plant produces over 144 different cannabinoids, with THC and CBD being the most well-known [5]. THC (tetrahydrocannabinol) creates psychoactive effects, while CBD (cannabidiol) is non-psychoactive and associated with potential therapeutic benefits. Other hemp-derived cannabinoids include CBG, CBN, and delta-8 THC—all of which would be banned under HB 328.

Decarboxylation is a crucial concept for understanding hemp testing [6]. Most cannabinoids in raw plants exist in acidic forms (like THCA) that aren't psychoactive. When exposed to heat, light, or time, these acids lose a carboxyl group and convert to their active forms (THCA becomes THC). This process matters enormously for legal compliance because hemp testing must account for "total THC"—the sum of existing THC plus the potential THC from THCA conversion using the formula: Total THC = delta-9 THC + (THCA × 0.877) [7].

Federal hemp law: The foundation that launched an industry

The 2018 Farm Bill fundamentally transformed hemp's legal status by removing it from the Controlled Substances Act and legalizing commercial production nationwide [8]. The legislation established hemp as cannabis containing 0.3% or less delta-9 THC on a dry weight basis, with USDA regulatory oversight for cultivation and FDA authority over finished products.

Critically, the federal definition is remarkably permissive. The Farm Bill's broad language allows all cannabinoids derived from legal hemp, including CBD, CBG, CBN, and even delta-8 THC when hemp-derived [9]. This created space for innovation and the development of diverse hemp products that have fueled a multi-billion dollar industry.

The 2023 Farm Bill extension maintained these provisions largely unchanged, though proposed amendments like the "Miller Amendment" would have restricted hemp to only "naturally occurring, naturally derived, and non-intoxicating cannabinoids." These changes stalled, leaving the 2018 framework intact through at least March 2025 [10].

Federal testing requirements mandate that hemp be tested within 30 days of harvest using post-decarboxylation methods or mathematical conversion [11]. Labs must use gas chromatography or HPLC with proper conversion factors. The USDA requires testing for "total THC" but focuses enforcement on cultivation, not finished products—creating a regulatory gap that states like North Carolina are rushing to fill.