Cannabis: Goin’ to Carolina in My Mind

We have long suspected that North Carolina may be the next great cannabis market. In describing North Carolina as “the sleeping giant of the South,” we wrote recently:

From Murphy to Manteo, North Carolina is a state that will have a lot to offer the medical marijuana industry at some point in the future. The state has a tremendous agricultural industry; major population centers; a large, dynamic, and growing population; and world-class medical facilities and research universities.

And we’re not alone. We get calls every week from clients asking how they can participate in the imminent cannabis market in North Carolina.

So, what’s the political lay of the land in North Carolina?

As reported by Marijuana Moment, in the 2022 legislative session, medical cannabis cleared the state Senate in a strongly bipartisan vote. But the legislation, titled the North Carolina Compassionate Care Act, stalled due to inaction in the state House.

The Act would set up a limited license, vertical integration regime, under which 10 licenses would be issued to medical cannabis suppliers to cultivate and process cannabis. Those 10 suppliers could then obtain licenses for “medical cannabis centers” – the Act’s term for dispensaries. Only licensed suppliers would be able to obtain these dispensary licenses, and no supplier could hold more than eight dispensing licenses.

The Act also had the following features:

  • The majority owner of each licensee must be a North Carolina resident for at least two years.
  • Each applicant must submit a non-refundable license fee of $50,000, plus $5,000 for each production facility and medical cannabis center the applicant proposes to operate.
  • Patients suffering from a list of qualifying conditions could access cannabis by obtaining a physician-issued certification stating that the potential health benefits of medical cannabis would likely outweigh the risks for the patient, then applying for a registration card through the North Carolina Department of Health and Human Services.
  • Qualifying conditions are cancer, epilepsy, HIV/AIDS, ALS, Crohn’s disease, sickle cell anemia, Parkinson’s disease, PTSD (subject to evidence that an applicant experienced one or more traumatic events), multiple sclerosis, cachexia or wasting syndrome, severe or persistent nausea in a person who is not pregnant that is related to end of life or hospice care, or who is bedridden or homebound because of a condition, terminal illness when the patient’s remaining life expectancy is less than six months, and a condition resulting in the individual receiving hospice care.
  • Doctors would need to prescribe a specific method of delivery and dosages for patients. Options include smoking and vaping, as well as “cannabis-infused” products, which include “a tablet, a capsule, a concentrated liquid or viscous oil, a liquid suspension, a topical preparation, a transdermal preparation, a sublingual preparation, a gelatinous cube, gelatinous rectangular cuboid, lozenge in a cube or rectangular cuboid shape, a resin or wax.”
  • Patients could possess up to one and a half ounces of marijuana, but home cultivation would not be permitted.
  • A Compassionate Use Advisory Board would be established, and it could add new qualifying conditions.
  • A Medical Cannabis Production Commission would be created to ensure that there’s an adequate supply of cannabis for patients, oversee licensing, and generate enough revenue to regulate the program.
  • A North Carolina Cannabis Research Program would “undertake objective, scientific research regarding the administration of cannabis or cannabis-infused products as part of medical treatment.”
  • Limitations on where marijuana can be smoked or vaped, including restrictions on the locations and hours of operation for medical cannabis businesses.

How would the Act impact operators and patients?

The Act’s limited license regime would favor well-funded, experienced operators that can stomach the cost of preparing an application that attempts to stand out from the rest, with the understanding that many applicants wouldn’t receive one of the 10 limited licenses. With only 10 licensees allowed to serve the qualified patients among North Carolina’s large population (ninth largest in the country), each license would be extremely valuable. And that means the application process would be extremely competitive.

However, the Act’s qualifying conditions are more restrictive than many other states with medical cannabis programs, which would lessen the potential demand at the program’s outset. But the scope of qualifying conditions could broaden over time, as the Act authorizes the Compassionate Use Advisory Board to add specific qualifying conditions by majority vote of the Board’s members. In any event, the Act’s passage would provide numerous North Carolina citizens suffering from the qualifying conditions listed in the Act with the opportunity to benefit from medical cannabis.

What are the chances medical cannabis legislation passes in 2023?

As in most states, North Carolinians overwhelmingly support medical cannabis. A recent poll found that 82% of North Carolina voters favor legalizing medical cannabis — including 75% of Republicans, 87% of unaffiliated voters, and 86% of Democrats. Considering that it’s virtually impossible to get 82% of people to agree on anything, these are strong bipartisan support numbers.

The North Carolina State Legislature’s 2023 session started on January 11 and will end on July 28, 2023. We expect the Senate will file another bill that looks much like the Act that passed during the 2022 session. While such a bill is likely to pass in the Senate, its fate is less certain in the House, where Republicans are just one seat shy of a supermajority.

Governor Roy Cooper is optimistic, recently saying he thinks a medical marijuana legalization bill “has an opportunity to pass” in the upcoming legislative session, and reiterating his support for broader decriminalization of cannabis possession, noting racial disparities in enforcement. Cooper’s public support for decriminalization is a relatively recent development. He first openly backed the policy change in October, saying that it’s time to “end the stigma,” while separately announcing steps he’s taken to explore his options for independently granting relief to people with existing convictions.

To bring it back to where we started, we are convinced medical cannabis is coming to North Carolina, and we’re pretty sure it’ll be sooner rather than later. We stand ready to assist when you’re ready, and to paraphrase the great James Taylor:

The signs, it might be omens

Say I’m goin’, goin’

[Cannabis is] gone to Carolina in my mind.

Photo of Whitt Steineker
Whitt Steineker

As co-chair of Bradley’s Cannabis Industry team, Whitt represents clients in a wide range of cannabis issues. In addition to providing a full suite of legal services to cannabis companies, Whitt and the Cannabis Industry team advise non-cannabis clients – from banks to…

Photo of J. Hunter Robinson
J. Hunter Robinson

Hunter Robinson represents clients in commercial litigation and compliance matters across the country. His cannabis practice focuses on solving problems for cannabis companies and their vendors. Hunter has worked alongside other members of Bradley’s Cannabis Industry team to help hemp and medical cannabis…

Photo of Rachel M. LaBruyere
Rachel M. LaBruyere

Rachel LaBruyere is a privacy and litigation associate in Bradley’s Charlotte office. She regularly advises clients on CCPA and GDPR compliance issues. Before joining Bradley, Rachel served as a Legal Intern in the United States Attorneys’ Office and an Appellate Litigation Intern in…

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