If you’ve driven down Interstate 40 or 85 lately, you’ve likely seen the billboards shouting “THCA Flower” in thick font, the “Delta-8” decals at gas-station pumps, the growing number of neon vape shop storefronts. Walk inside and the look more resembles a wellness boutique than a head shop: soft lighting, ample browsing space, knowledgeable staff, sharp fragrances, QR codes linking to lab tests and jars full of petalless green buds.
These retailers have spread rapidly across North Carolina, often skirting the thinnest of legal lines. Their shelves are stocked with pre-rolls, vapes, gummies and other consumables that look, smell and smoke like marijuana, but exist inside a federal loophole. In 2018, Congress legalized hemp in the Farm Bill, provided it contained no more than 0.3% of the psychoactive component, delta-9 THC. Although this opened the door for farmers to cultivate a new crop for the cannabidiol (CBD) market, lawmakers didn’t account for some basic chemistry: CBD-rich hemp plants also carry THCA, a non-intoxicating precursor that converts to THC when heated. (THC stands for tetrahydrocannabinol.)
That oversight birthed a much bigger business than CBD oils and lotions, as farmers realized some simple growing hacks could deliver the same high as dispensary cannabis.
As a second quirk, the law measures THC by percentage, not total dose, meaning some edibles technically comply while packing far more milligrams than tightly regulated
markets allow.
Other states rushed to patch the loophole with potency caps, packaging rules and by blocking sales to folks younger than 21. North Carolina did nothing, and attempts at reform have stalled in the General Assembly. Without ever legalizing marijuana, the state has drifted into one of the South’s most permissive cannabis economies.
“It’s just an easy business climate to work in,” says Tripp Liles, sales training director at Cornelius-based retail chain Apotheca, which started in 2019 with a few Charlotte-area locations and has grown to 50-plus stores and 350 employees, mostly in North Carolina.
It also has Georgia, Tennessee and South Carolina stores.
That footprint is concentrated in Apotheca’s backyard for a reason, he says. “In some states, we find ourselves in this weird area where local laws may say one thing but federal laws say another, and that just creates confusion. But in North Carolina, we can easily follow federal guidelines. It’s been business-friendly to us.”
Apotheca reports three-year revenue growth of 324%, landing on the Inc. 5000 list for the past two years. Liles witnessed the boom first hand while managing two busy stores, watching a steady procession of eight to 12 customers an hour from 8 a.m. to 10 p.m. They weren’t the classic stoner classic caricature, but rather adults 35 and older looking to feel good without hangovers, and retirees chasing sleep and pain relief.
“We have two types of customers: those doing it to feel good or feel better,” he says. “People are pushing back against anxiety and sleep medications that have been widely prescribed, and cannabis offers them a more natural, healthy alternative.”
FLOWER AND BEVERAGES
North Carolina’s post-Farm Bill economy is diverse in models and locales. Chains such as Franny’s Farmacy, founded in 2012 at a family farm in Leicester in Buncombe County, are scaling up through franchising. In the Triangle, Delta 9 Analytical and Avazyme have carved a niche as testing labs for hemp products.
Wilson County-based hemp smokeables brand Maverick Lifestyle has ambitions to go public, with an IPO on file but not yet priced. Roxboro-based Open Book Extracts has raised more than $11 million in capital, including investments from British American Tobacco’s venture capital arm and Canadian cannabis firm Organigram.
The U.S. Department of Agriculture, which oversees hemp cultivation licensing, counts more than 600 hemp-growing licensees statewide. That includes many smaller growers. Pure Earth Hemp, owned by a married couple in the Triad-area town of King, sells premium indoor-grown THCA flower online. Sales rose 40% in the past year.
“I’ve seen demand grow as more people learn that high-quality hemp flower can be just as effective as dispensary products,” says co-owner Kylie Reiter. The THCA flower is $85 an ounce. “My eight-pack of 3.5-gram jars (about a tenth of an ounce) is our bestseller. It gives people a chance to sample multiple strains, and they love that variety.”
Of course, there’s no easy road to riches. Charlotte-based cbdMD is an early CBD brand founded in 2015. It poured millions into clinical and safety studies and rode the first CBD wave before the market shifted to newer Farm Bill-compliant cannabinoids offering a classic “high,” like Delta-8 and Delta-10.
cbdMD’s revenue peaked at $44.5 million in 2021, then slid to $19.5 million in its most recent fiscal year. Unlike competitors, cbdMD stuck to the less-risky CBD and compliant Delta-9. “We face competition from newer compounds like Delta-10, hexahydrocannabinol and kratom, many of which we view as riskier and less proven,” CEO Ronan Kennedy says. “We see this as an opportunity to differentiate ourselves as the safe, science-driven brand consumers and retailers can count on.”
cbdMD is now pivoting to THC beverages, with its Oasis label sold through traditional beer-style distribution networks. Oasis is sold in seven states as of August, including in North Carolina through Total Wine. “By more big box traditional brick and mortar retailers entering the market in a responsible way, like Total Wine — a customer — it will ultimately benefit customer awareness and growth,” Kennedy says.
The company reported net losses totaling more than $125 million between 2021-23, but cut the deficit to $7.7 million in fiscal 2024 and $1.3 million in the first three quarters this year. Kennedy says Oasis is already contributing incremental growth, and is helping offset declining direct-to-consumer sales.
Nash County’s Asterra Labs has found success in contract manufacturing for other companies. Owned by Raleigh investment firm RISE Companies and totaling 17 employees, Asterra gets about 60% of revenues from making gummies, pre-rolls, and other products for outside brands at a 10,000-square-foot facility. It also maintains an in-house Southern Ease line, with about 38 different products.
Sales through September have exceeded the total for 2024, says Asterra President John Bell, who was the N.C. House majority leader from 2017-24 and now chairs the key Rules Committee. He’s faced criticism for bottling up reform bills in the Rules Committee because of his industry ties. He denies any conflict of interest and cites a double standard given several other legislators hold jobs in industries they regulate.
“Even before I became president of Asterra Labs, I was advocating for basic regulations like age restrictions, packaging and testing requirements, and manufacturing standards. That’s the baseline of any successful industry,” Bell says. He has invited law enforcement to walk the manufacturing facility, read lab test results, and see how the company packages and tests products.
“I’m here in Nashville, in a Tier One county [referring to the state’s highest economic distress ranking] and I’d love nothing more than to double our size and hire more people, because we pay well for the area and have very little turnover. But if the General Assembly passes a law that destroys the industry or makes it illegal, we’ll have to close our doors.”
GREEN PRODUCTS, GRAY MARKET
Looking at the plethora of billboards and retail shops, it’s hard to imagine the legal fragility of North Carolina’s hemp industry. On a hot day in July 2024, law enforcement flooded the storefront of The REC Dispensary in Statesville. Owner Christine Tobias remembers the shock of that day, as officers boxed up products she says were meticulously tested and labeled. Six other local smoke shops were also raided.
“We had built The REC Dispensary on transparency, compliance and professionalism, so to have our business disrupted without warning was devastating,” Tobias says. “Even before the raid, we carried only lab-tested, compliant products and followed state and federal guidelines to the letter. Where the system failed us is outdated laws, enforced unevenly, which creates an environment where even the most careful operators can be treated like bad actors. That sends a chilling message to small business owners who are working hard to do things right.”
The raid didn’t kill The REC. Sales tanked initially, but after local news coverage noted no charges had been filed, regular customers returned and demand grew. “To lawmakers who claim these products pose a public safety risk, we’d say safety comes from sensible regulation, education and transparency, not raids,” Tobias says. “By offering clean, tested, and clearly labeled products, businesses like ours help protect the public. As business owners, we want the same: a safe marketplace for adults who choose or are advised to use these products.”
Many shops have voluntarily adopted guardrails, such as carding at the door and obtaining third-party certificates of analysis proving they meet the federal 0.3% limit. But, police don’t have to consider those certificates in establishing probable cause. Even the smell or sight of cannabis alone can justify a search warrant, and certificates have limited practical weight because state testing facilities override them if products are seized.
“THCA isn’t intoxicating until heated. Law enforcement labs use gas chromatography, which heats the sample and literally creates the molecule they’re testing for. They’ll take legal hemp and convert it into illegal marijuana in the test, then press charges,” says Asheville attorney Rod Kight, who has advised hundreds of hemp and cannabinoid businesses. “It’s a novel legal issue we’re seeing across the country, including North Carolina.”
Gov. Josh Stein has called the hemp market “the Wild West” and in June created a 24-member Advisory Council on Cannabis to deliver policy recommendations in 2026. Membership spans prosecutors and sheriffs, legislators, including Bell, N.C. Senator Bill Rabon, a Brunswick County Republican, N.C. Rep. Zack Hawkins, a Durham Democrat, along with healthcare professionals, highway safety and law enforcement representatives, and hemp producers and sellers.
Also included are the Eastern Band of Cherokee Indians, which voted to allow recreational marijuana sales in its sovereign-nation boundaries and launched a retail store, Great Smoky Cannabis Co. In September, Cherokee officials said they’ve engaged more than 400,000 customers and sold nearly 2 million individual products.
The council’s role centers on youth access, unverified products, and a public-safety enforcement apparatus with no clear statewide standards. N.C. Poison Control logged more than 1,000 cannabis-related calls in 2024, double that of 2020. In recent years, the rate of emergency department visits for intoxicating cannabis ingestion surged more than 600% statewide among youth ages 17 and under, with even higher growth among older teens.
Most visits are coded as psychiatric and gastrointestinal issues. Some chronic cannabis users develop cannabinoid hyperemesis syndrome, a condition marked by intense stomach pain and uncontrollable vommiting. The pain can be so severe that patients scream
while vomiting.
For Mooresville-based convenience store chain Home Run Markets, the ongoing uncertainty isn’t worth the headache. “We don’t sell a lot of it,” owner David Alexander says. “There’s no age limit, no dosage limits, and we don’t know what’s in it, so we just don’t feel comfortable.”
Systems used to help regulate beer and cigarette sales, like ID scans and mystery shoppers testing store cashiers, would translate for hemp-derived THC products, he says. “It truly is the Wild West. It’s time to do something.”
Beer and wine stores may be less cautious, with some of the 23 members of the NC Beer & Wine Wholesalers Association now distributing hemp-derived THC beverages.
“North Carolina [has] an amazing opportunity, especially for intoxicating hemp products, to establish a regulatory framework that restricts underage sales, sets reasonable limits on potency, provides a tax structure that can adequately fund law enforcement and regulators, and protects consumers and the public through common sense trade practice restrictions,” says Kris Gardner, the group’s executive director. “I think it will be a bit easier to consider guidelines with respect to intoxicating hemp products. Marijuana products, on the other hand, present an entirely different set of challenges that will require much more thoughtful consideration and deliberation.”
WHAT COULD THE STATE SKIM?
For now, the existential question for businesses in the alleged “Wild West” is, how long will the loophole last?
“It’s hard to plan for the future when you don’t know if the product you legally grow and sell today might be restricted or banned tomorrow,” says Pure Earth’s Reiter. “[Uncertainty] creates a lot of stress for small farms and businesses trying to stay compliant while still making a living.”
One path could mirror Tennessee’s clampdown on high-potency hemp, including THCA, which some view as a worst-case scenario.
“If it’s made illegal, I’m out plain and simple,” Reiter says. “I don’t have a backup plan that replaces this. I’m not interested in pivoting to CBD or non-psychoactive products just to hang on. That’s not what I’m passionate about, and it’s not what my customers are
coming for.”
Reducing potency or total THC levels to the point where the flower no longer gives the desired effects would also slam the industry. “You can’t sell watered-down weed and expect people to stay loyal,” she says. ”My customers are using THCA for real relief, anxiety, chronic pain, focus, sleep, stress. If the flower no longer helps, they’ll move on.”
For THCA consumers, the most reliable alternative may be street weed. “If THCA disappears, they’ll either go back to unregulated sources or be left without access to something that genuinely helps them. That’s not a step forward.”
A more lucrative path: regulate and tax with potency caps, child-resistant packaging, track-and-trace, and age verification enforced by the same compliance systems used for beer and cigarettes. North Carolina already has the sixth-highest beer taxes in the nation at
62 cents per gallon, per Tax Foundation rankings, plus state-controlled liquor sales and a cigarette tax of 45 cents a pack.
If hemp THC products were slotted into a similar structure, hundreds of millions of dollars could be on the table. An analysis in 2023 for House Bill 563 found that imposing a 10.5% excise tax on hemp-derived consumables could net $116 million in revenue through 2029.
A middle route, House Bill 328 introduced this year, sketches licensing, testing and labeling standards, and license fees of $25,000 for manufacturers, $5,000 for distributors, and $500 per retail site. A legislative fiscal note suggests more than 23,000 potential retailers, including gas stations, smoke shops, grocery stores, or pharmacies, could be swept into such a system.
If North Carolina ever flips the switch on marijuana legalization, the upside could be enormous. Daily or near-daily use has surged in the last decade, surpassing daily alcohol consumption in 2022, with roughly 80% of users saying they consume for non-medical reasons. Virginia’s fiscal staff modeled $154 million to $308 million in five years once a mature market is in place, while Maryland netted $1.1 billion in fiscal 2024, its first year of legal cannabis sales.
North Carolina’s population is larger than either, and the illicit market here is already measured in the billions.
The proposed N.C. Compassionate Care Act, which stalled in the legislature, would have created a tightly controlled, self-funded medical program generating $44 million in annual revenue by 2028. That included a 10% fee on monthly gross revenues, plus patient and caregiver card fees. State models expected 47,000 patients in the first year, climbing to 154,000 by year three.
Kight sees the policy question through both legal and personal lenses. About a decade ago, during chemotherapy, he tried cannabis for nausea. “The relief was so immediate and remarkable that I thought, ‘Wow, I need to change my career!’” he says.
Today, he advocates for a consumer-safety framework that won’t wipe out compliant small businesses. The industry, Kight says, already supports three pillars: keep products away from minors, impose basic manufacturing and testing standards and require consistent labeling so adults know what they’re consuming. “That’s the ideal situation,” he says, and it’s one the responsible players would welcome. ■
24 STATES THAT HAVE APPROVED FULL MARIJUANA LEGALIZATION
Alaska ° Arizona ° California ° Colorado ° Connecticut
Delaware ° Illinois ° Maine ° Maryland ° Massachusetts ° Michigan
Minnesota ° Missouri ° Montana ° New Jersey ° Nevada
New Mexico ° New York ° Ohio ° Oregon ° Rhode Island
Vermont ° Virginia ° Washington ° Washington, D.C.
