North Carolina’s HB 328 Is a Hemp Ban, Not Hemp Regulation

The North Carolina Senate Wants to Kill the State’s Hemp Industry

The North Carolina hemp industry is facing one of the most consequential legislative votes in its history.

On July 2, 2026, the North Carolina Senate voted 37–6 to adopt the conference report for House Bill 328, misleadingly titled “Regulate Hemp-Derived Consumables.” The House did not vote on the conference report before adjourning. It is scheduled to reconvene on July 27, which means HB 328 is not currently law and can still be stopped. It should be stopped.

The conference report cannot be amended on the House floor. The House must either adopt it or reject it. House members should reject it and return to the work of creating a genuine regulatory framework for hemp products.

North Carolina had an opportunity to regulate hemp responsibly

Responsible members of North Carolina’s hemp industry have not opposed regulation. The industry has repeatedly supported reasonable age restrictions, standardized testing, good manufacturing practices, uniform labeling, child-resistant packaging, responsible marketing rules, and enforcement against bad actors.

Those are sensible guardrails. They protect consumers, reduce youth access, and allow legitimate businesses to operate under clear rules. Unfortunately, HB 328 takes a fundamentally different approach.

The original House bill was a narrow measure addressing hemp-derived products on school property. Over the course of the legislative process, it expanded dramatically. An earlier version contained a detailed licensing and regulatory system addressing manufacturers, distributors, retailers, testing, packaging, age verification, and enforcement. The conference report largely abandons that regulatory model and instead adopts the impending federal hemp restrictions as a matter of independent North Carolina law.

Regulation creates rules for a lawful market. But HB 328 would eliminate most of the existing market.

The 0.4 milligram limit is a prohibition threshold

HB 328 would replace North Carolina’s current delta-9 THC definition of hemp with a “total THC” standard. Total THC would include delta-9 THC, 87.7% of THCA, and other forms of THC, including delta-7, delta-8, and delta-10 THC. The definition would also exclude synthetic or chemically converted cannabinoids.

More significantly, the bill creates a category called a “prohibited finished hemp-derived consumable product.” A finished product intended for ingestion or inhalation would be prohibited if it contains:

• More than 0.4 milligrams of total THC per retail container; or
• Any synthetic or chemically converted cannabinoid.

The “container” is defined as the innermost package in direct contact with the retail product. A prohibited product would become a Schedule VI controlled substance under North Carolina law. These provisions are scheduled to take effect on November 12, 2026.

Four-tenths of one milligram per package is not a reasonable adult-use potency limit. It is a ban dressed up as a testing standard.

For context, a single hemp-derived THC gummy commonly contains several milligrams of THC. A beverage may contain 5 or 10 milligrams. A package containing multiple servings may contain considerably more. Under HB 328, legality would be determined by the total THC in the entire retail container, not by serving size and not by whether the product is responsibly formulated, tested, labeled, or sold only to adults.

Most hemp-derived THC gummies, beverages, tinctures, vapes, and flower products currently sold in North Carolina would exceed the limit. THCA flower would fail because the bill expressly includes converted THCA in its total-THC calculation (ie, “total THC”). Media reports have correctly characterized the proposal as a measure that would remove most currently available intoxicating hemp products from lawful commerce.

HB 328 also creates a serious CBD problem

Notably, the bill expressly prohibits CBD, and any other non-delta 9 THC molecules, in hemp-derived consumable products. Yes, you read that right. Although this was probably an oversight, the bill as passed by the NC Senate clearly prohibits CBD (and CBG and CBC, etc.) in NC hemp-derived consumable products. (Thanks to my friend and colleague, whose name I will keep anonymous, for pointing this out. You know who you are.) 

Additionally, even if CBD wasn’t expressly prohibited, its broad language of HB 328 would still create substantial problems for ordinary CBD products.

Many full-spectrum CBD products contain trace amounts of naturally occurring THC. A full-spectrum CBD tincture, capsule bottle, or package of gummies could contain more than 0.4 milligrams of total THC across the entire container while remaining nonintoxicating and fully compliant with the current federal and North Carolina definition of hemp.

Under HB 328, that product could become a Schedule VI controlled substance.

The bill’s age provisions are even broader. They apply to an ingestible or inhalable finished product containing any concentration of any hemp-derived cannabinoid. The statutory definition expressly includes CBD, CBDA, CBG, CBN, CBC, CBDV, and numerous other cannabinoids that are not ordinarily associated with intoxication. The bill would make it unlawful to sell these products to anyone under 21 and unlawful for a person under 21 to possess them. Topical products and certain seed-derived ingredients are excluded.

In other words, a bill promoted as a response to intoxicating hemp products would impose adult-only restrictions on ordinary ingestible CBD and could prohibit many full-spectrum CBD products altogether.

That may not be what the drafters intended. But statutory language, not legislative intent expressed after the fact, determines what the law means.

The bill replaces compliance with punishment

HB 328 does not establish a workable licensing system under which responsible businesses can continue operating. It does not provide a meaningful pathway for manufacturers to reformulate intoxicating products, obtain approval, comply with potency limits, or participate in a regulated adult-use cannabis market. Instead, it relies primarily on criminalization and severe civil penalties.

Selling or delivering a hemp-derived consumable product to a person under 21 would be a Class 2 misdemeanor. Civil penalties for ordinary underage sales would begin at $2,500 and increase to $25,000 for a fourth or subsequent violation within three years.

The penalties for selling a prohibited product to a person under 21 would begin at $10,000, increase to $25,000 for a second violation, and reach $50,000 for a third or subsequent violation. Each individual sale or delivery would constitute a separate violation, and retail establishments would be responsible for violations by their owners, managers, employees, and agents acting within the scope of their work.

Once the new controlled-substance provisions take effect, possessing, manufacturing, selling, or delivering a prohibited finished hemp-derived consumable product could also result in prosecution under North Carolina’s Controlled Substances Act.

For manufacturers, this means most existing formulations could become unlawful. For distributors, it means inventory that is lawful today could become controlled-substance contraband. For retailers, it means products already sitting on shelves could expose the business and its employees to significant civil and criminal liability.

This is a market shutdown.

North Carolina would preserve the federal ban even if Congress fixes it

One of HB 328’s most troubling provisions is its express statement that North Carolina’s new hemp standard should remain in effect even if Congress later weakens or repeals the federal total-THC restriction. This is shortsighted.

The federal 0.4 milligram restriction has already drawn substantial criticism, including criticism from people who support meaningful hemp regulation. Congress may delay it, revise it, create broader exemptions, or repeal it. If that occurs, HB 328 would leave North Carolina businesses trapped under a state-level hemp ban that federal law no longer requires.

The General Assembly would have to pass another bill to repair the damage. North Carolina should preserve flexibility while the federal debate continues. Instead, HB 328 attempts to lock the State permanently into the most restrictive possible outcome.

My view 

I support prohibiting sales of intoxicating cannabis products to minors. I support standardized quality-control testing, good manufacturing practices, uniform labels, child-resistant packaging, reasonable potency disclosures, and meaningful enforcement against companies that sell unsafe or deceptively marketed products.

I have long referred to these concepts as the Three Pillars of responsible cannabis regulation: restricting access by minors, requiring standardized quality control, and requiring uniform labeling and packaging so consumers know what they are buying.

HB 328 abandons those principles. It treats adult access as the problem and prohibition as the solution.

Prohibition will not eliminate demand for cannabis products in North Carolina. It will eliminate lawful access, close local businesses, destroy jobs, reduce tax revenue, and push consumers into an illicit market where products are less likely to be tested, accurately labeled, or responsibly sold.

The bill is especially indefensible because it may sweep common CBD products into its prohibition and makes nonintoxicating ingestible cannabinoids adult-only. That is unnecessary, overbroad, and unrelated to the legitimate public-health concerns lawmakers claim to be addressing.

North Carolina can regulate hemp responsibly. HB 328 does not do that.

Contact your North Carolina House representative now 

The Senate has adopted the conference report. The House has not. Anyone who manufactures, distributes, sells, purchases, or works with hemp products in North Carolina should contact their representative in the North Carolina House immediately and deliver a clear message:

Vote NO on the HB 328 conference report. Reject prohibition and return to a genuine regulatory framework based on age restrictions, testing, quality control, responsible packaging, truthful labeling, and lawful adult access.

North Carolina residents can identify their House representative through the General Assembly’s official “Find Your Legislators” tool.

Because the conference report cannot be amended on the floor, House members cannot repair HB 328 by changing a few words. They must reject it and require lawmakers to produce a better bill.

Businesses operating in North Carolina should also begin evaluating how the bill would affect their formulations, inventory, contracts, distribution relationships, and risk exposure. To discuss HB 328 and its potential impact on your company, you can schedule a call with us.

July 13, 2026