Before the North Carolina General Assembly wrapped up the effective end to their 2022 Long Session late last month, lawmakers enacted critical legislation – Senate Bill 455 – which kept hemp and CBD-related products legal in North Carolina, just one day before the hemp pilot program was set to expire on June 30th.
Ward and Smith was proud to have played a role in ensuring this critical legislative change was enacted. Our firm developed and shared legislation to address this issue twice in past legislative cycles and worked closely with lawmakers and hemp industry leaders this year to ensure the necessary text was enacted before the deadline. No lobbying firm has been more engaged in solving this problem, and we are thrilled to see this legislation finally come to fruition.
The June 30th sunset on the industry did not come as a surprise to lawmakers. Our firm had circulated legislation to address the problem in past sessions, and this year both chambers of the General Assembly passed the conforming language ensuring continued legalization long before the deadline, but had done so in separate bills. On May 31st, Senate lawmakers passed Senate Bill 762, the annual Farm Act sponsored by Senator Brent Jackson of Sampson County with various agricultural-related regulatory reforms, unanimously with the hemp provisions intact.
Initially, this gave many in the industry comfort as it appeared the General Assembly would be enacting the conforming language long before the deadline to ensure growers, producers, manufacturers, and distributors would not be caught in legal limbo. But, in true General Assembly fashion, things did not go as smoothly as expected.
Just one day after receiving the Farm Act from the Senate, as the House began deliberations and negotiations on the complexities of that bill, House lawmakers sent back to the Senate S455 – which now only contained the hemp conforming language. The Senate bill had been gutted and amended (a common practice at the General Assembly during the waning days of the session) during a House Rules committee meeting, using a procedural move that allowed the bill to go to Governor Cooper's desk after one singular concurrence vote by the Senate. This move bypassed the need to hold another committee meeting and vote. Again, things did not go according to plan, and the Senate immediately referred S455 to its Rules Committee – a sign to observers that the bill was largely in trouble and had little chance of passing.
Following that action by the Senate, the House subsequently held a committee meeting on S762, The Farm Act, and unveiled a new version of that bill with the hemp-related provisions completely stripped out. Advocates and industry representatives were then sent into a panic, as it seemed yet again that the House and Senate would be in disagreement on enacting legislation related to hemp. This may sound like a familiar situation to some that have followed this industry in North Carolina since the 2018 federal Farm Act put key provisions in place nationwide that led to the explosion of hemp growth and production. As reported by multiple outlets during the 2019 session, House and Senate negotiators spent months mulling over that year's Farm Act, and in particular, how the state should treat smokable hemp.
Seeking to avoid month-long standoffs in negotiations that could potentially jeopardize the state's hemp industry, activists and industry representatives descended to Raleigh in June to meet with lawmakers and advocate that hemp remain legal in the state. As time wore on, it became clear that the hemp provisions would not make their way back into The Farm Act in the House; and that fear was realized on June 28th as an amendment on the House floor to include the language yet again was tabled by a vote of 63-48. This action sent The Farm Act back to the Senate without their preferred language included, further straining relationships between the chambers and potentially putting the passage of the Farm Act in question, as the promised adjournment of July 1st was fast approaching.
Finally, as the House and Senate churned through lengthy calendars working towards their final bills of the year, the log jam gave way. On the afternoon of June 29th, as the galleries were filled with advocates and representatives of the hemp industry, the Senate began debating The Farm Act. Senator Brent Jackson used his floor speech on the bill to tout the many positive provisions remaining in The Farm Act while also lamenting that his House colleagues had chosen to remove the hemp provision. Sen. Jackson has been a steadfast advocate for the hemp industry and worked tirelessly this session to ensure that hemp production would remain legal in North Carolina.
As WRAL reported on that very evening, Sen. Jackson characterized the disagreement as a standoff and reminded members that there simply was not enough time to appoint a conference committee of House and Senate members to negotiate differences on the bill before adjournment.
Following the unanimous vote on The Farm Act in the Senate, Sen. Bill Rabon, the powerful chairman of the Senate Rules Committee, motioned to have S455 removed from his committee and immediately placed on the Senate calendar for a vote, the Senate's final action of the evening. This was a highly unusual move by Senate leadership. After impassioned speeches from both sides of the aisle, the Senate passed S455 by a vote of 41-2, and Governor Cooper signed the bill that evening, ensuring that North Carolina's hemp industry would be preserved and narrowly escaping the June 30th sunset date.
Ward and Smith extends a heartfelt note of gratitude to all involved in working with us to solve this legislative problem, including the North Carolina Chamber and all legislators who voted for the fix. Most of all, we thank Sen. Jackson for his leadership and tenacity in this difficult situation. The entire industry is in his debt.
It's important that you contact an experienced attorney for advice on how the new law affects your hemp operations. Ward and Smith Hemp Law Team are here and ready to assist.
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This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.