North Carolina Cannabis Market: Legalization

North Carolina state laws do not allow cannabis for medical or adult use. A bill to legalize North Carolina medical cannabis program is still being approved. Senate Bill 3 would enact the North Carolina Compassionate Care Act to provide for the sale of cannabis and cannabis-infused products to qualified patients with a debilitating medical condition through a regulated medical cannabis supply system. Senate Bill 3 would be known as the North Carolina Compassionate Care Act, which would, among other things:

• Instruct the Department of Health and Human Services (“Department”) to issue a registry identification card to any individual who applies to the Department on prescribed forms demonstrating that the individual is a qualified patient with a debilitating medical condition for which a physician has issued a written certification, or to any individual who is at least 21 years of age who has (i) been named as a designated caregiver in a registry identification card application submitted by a qualified patient and (ii) agreed to serve as that qualified patient’s designated caregiver. The debilitating medical conditions include cancer, epilepsy, positive status for human immunodeficiency virus (HIV), acquired immune deficiency syndrome (AIDS), amyotrophic lateral sclerosis (ALS), Crohn’s disease, sickle cell anemia, Parkinson’s disease, multiple sclerosis, a terminal illness (less than six months), and any other serious medical condition or its treatment added by the Compassionate Use Advisory Board. Smoking and vaping would also be allowed, but doctors would need to prescribe a specific method of delivery and dosages for patients under the revised legislation.
• Require the Department to establish standards for testing and license up to five independent testing laboratories.
• Establish the Medical Cannabis Production Commission (“Commission”) consisting of 11 members with specified experience. It would have the power to approve applications for medical cannabis supplier licenses upon recommendation by the Department, and to suspend or revoke a medical cannabis supplier license. The Commission would be allowed to issue 10 medical cannabis supplier licenses. Each supplier would be allowed to operate no more than eight medical cannabis centers, one of which must be located in a Tier 1 county.
• Require an applicant for a medical cannabis supplier license to submit specified information to the Department, including the applicant’s name, address of all production facilities and medical cannabis centers, proposed operating procedures, information on each principal officer/board member, and proof of sufficient assets to operate as a supplier. The applicant would also submit documentation demonstrating the applicant has requisite experience. The applicant would pay a $50,000 nonrefundable fee, plus $5,000 for each production facility or medical cannabis center the applicant proposes to operate under the license and a nonrefundable renewal fee no less than $10,000, plus $5,000 for each new production facility or medical cannabis center, plus $1,000 for each existing production facility or medical cannabis center. The applicant would provide proof of being a State resident for at least two years and of being the majority owner. The applicant may include nonresident partners with demonstrated experience. Certain criminal convictions would disqualify an applicant from licensure. A license is valid for 12 months and may be renewed. A supplier must begin cultivation of cannabis within 120 days of receiving a license and begin selling cannabis and cannabis-infused products within 270 days of initiating cultivation.
• Require a supplier to submit monthly reports to the Department on financial transactions. Each supplier would pay a monthly fee equal to 10% of the gross revenue derived from the sale of cannabis and cannabis-infused products. Cannabis and cannabis-infused products would be exempted from the sales and use tax.

Timeline:

The Senate passed the bill on second reading on February 28, 2023.

On March 1, 2023, the Senate passed the bill on third reading, sending it to the House.

SB 3 carried over from 2023.

Eastern Band of Cherokee Indians Cannabis Legalization

The Eastern Band of Cherokee Indians is a sovereign self-governed nation and a federally-recognized tribe based in western North Carolina in the United States.

In May 2021, the EBCI’s Tribal Council voted to decriminalize small amounts of cannabis on tribal lands for those over 21, making the reservation the only place in the state where cannabis can be legally possessed.

In August 2021, the council approved an ordinance to create the EBCI Cannabis Control Board and legalize the cultivation, sale and medical use of cannabis by those over 21 with certain medical conditions. In October 2023, the tribe issued its first medical cannabis card.

In September 2023, EBCI members voted to legalize the recreational use of cannabis on tribal lands for those over 21, and to require the EBCI Tribal Council to adopt legislation to regulate legal cannabis. Even if EBCI members approve adult-use cannabis, some people who need more potent cannabis to treat their medical conditions will have to obtain a medical card from the EBCI Cannabis Control Board. The adult use program is expected to launch this year.

North Carolina Cannabis Market: Perspectives

Qualla Enterprises, first organized as Cherokee Medical LLC, began growing cannabis for medicinal use in spring 2023. A research company hired by Qualla Enterprises found that to meet the needs of medical patients, it will have to grow 40,000 pounds of cannabis per year and another 80,000 pounds for recreational use.

North Carolina’s illicit cannabis market is estimated at $3 billion.

North Carolina Cannabis Market Infographics

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North Carolina Hemp Industry