One of North Carolina’s most prominent hemp businesses is on the block, in part because of new federal legislation that drastically tightens the amount of THC hemp-derived products can contain.
The Rise Cos. CEO Harry Smith says the investment firm will sell or close its hemp business, Asterra Labs, by the start of 2026.
“We’re going to exit,” Smith said. “We’re in conversations with multiple people who want to buy the asset. But we’re going to exit, no matter what, by Jan. 1.”
Asterra’s president has been state Rep. John Bell, R-Wayne and the chairman of the House Rules committee. On Monday, Bell called himself “a former hemp executive” and said he’d given way to a new hire about two weeks ago. The hiring would not have happened had Rise and Asterra officials known that congressional action was imminent, Smith says.
Bell has shifted to a business development role with Rise.
Smiith doubts supporters of the hemp industry will be able to convince Congress to backtrack on the clampdown, even partly, by the time it goes into effect in November 2026.
“I think it’s set in stone,” says Smith, a former chairman of the UNC System Board of Governors.
The THC clampdown got written into H.R. 5371, the bill that ended the federal-government shutdown, at the behest of U.S. Sen. Mitch McConnell, R-Kentucky. The Bluegrass State’s other senator, Rand Paul, tried to have it removed from the bill, but the full Senate voted 76-24 on Nov. 10 to table his amendment.
Both of North Carolina’s senators, Thom Tillis and Ted Budd, joined the majority that kept the clampdown in the bill. Tillis, Budd Paul and McConnell are Republicans.
The Paul amendment split the Senate’s Democratic caucus. The only other Republican senator to join Paul in favoring removal of the clampdown was Ted Cruz of Texas.
North Carolina Attorney General Jeff Jackson had previously joined attorney generals from 37 other states and the U.S. Virgin Islands in co-signing a letter asking Congress to stop the sale of “intoxicating hemp-derived THC products.”
The industry’s rise followed a misreading of the 2018 Farm Bill’s legalization of industrial hemp, Jackson and his colleagues said.
“The entire synthetic THC industry rests on a foundation of illicit conduct,” their letter said. “Clear direction from Congress is needed to shut down this industry before it metastasizes further into an even greater threat to public safety than it already is.”
Fundamentally, the issue is that THC-infused products can create a high that’s more or less identical to marijuana’s.
Smith, however, says Rise had been “in it from the pharmaceutical side,” believing hemp-derived products have promise in combatting pain, sleep apnea, anxiety and other medical conditions.
“Proper regulation is the way to go,” to address their content and retailing among other things, he says.
That discussion never occurred in Congress and “they made a decision,” he notes, adding that Asterra had been “a VC play for [Rise] from Day 1.”
