The $3.2 Billion Hemp Industry in North Carolina: A Growing Economic Force

The hemp industry is a key factor behind the fastest-growing North Carolina economy. Hemp is a cannabis plant with a lower THC concentration. Multiple wholesalers, retailers, cultivators, and processors are part of this industry, contributing to a total revenue of around $3.2 billion. Likewise, the retail sector comes with a sales tax of around  $87.8 million. Through major reforms in the legal landscape, it has now become a key contributor to financial stability at the state level.

Not just the farming industry, hemp extracts such as cannabinoids are gaining attention due to their therapeutic properties. The medical use of various hemp compounds is opening new business and employment opportunities. Learn more about the key growth factors behind the NC hemp industry, along with potential challenges in the coming years.

Growth of Industrial Hemp After Farm Bill 2018 

The 2018 Farm Bill, which legalized industrial hemp, was a key factor behind NC hemp farm expansion. Before that, hemp was considered a Schedule I controlled substance. So the crop was cultivated for fiber and grains on limited acres. 

After legalization, farmers started growing it on thousands of acres as a profitable agricultural commodity. The demand for industrial hemp has grown in recent years, particularly for cannabinoid-based wellness products. Here are the growth stages of the hemp industry:

Restricted Crop Hemp was limited under strict regulations and controlled cultivation rules before the Farm Bill 2018.

Agricultural Commodity: It was a profitable crop, with federal laws supporting licensed farmers in cultivating it.

Cannabinoid Expansion: Hemp has become a major consumer industry, driven by the growing demand for CBD and other hemp-derived products. 

Growing Licensing of Industrial Hemp Cultivation

Hemp cultivation was started in 2017, and at that time, it was under the regulation of the North Carolina Industrial Hemp Pilot Program. Under this program, around 1,500 licensed producers started working after registering their planting acreage.

The hemp pilot program expired in 2021. Since then, the U.S. The Department of Agriculture grants licenses for hemp cultivation in North Carolina. Along with growers, processors obtain permits from the federal authority through the North Carolina Department of Agriculture.

Thousands of Job Opportunities

Apart from growers, businesses, retailers, and wholesalers, the industrial hemp industry offers countless job opportunities. More than 16,000 workers are currently associated with its processing, testing, manufacturing, and other procedures, with wages of about $702.5 million.

Rise in Cannabinoid Businesses

Small to large business startups entered the market to grab the opportunities amid growing cannabinoid demand. The wellness industry witnessed a surge in non-pharmaceutical treatment options, where non-psychoactive compounds such as CBD became mainstream.

To meet the growing demand for hemp-based cannabinoid products, industrial hemp cultivation was promoted, with high profit margins. Now, cannabinoid-based tinctures, gummies, drinks, oils, and similar products come under federal regulations with THC content less than 0.3%. 

Treat to THC-based Hemp Products

The legal definition of hemp based only on Delta-9 THC under the Farm Bill 2018 opened the door for other THC variants. With this loophole, many businesses entered the market with psychoactive products attractive for recreational purposes. However, the new hemp definition under federal reform can shut down such brands, leaving hundreds of people jobless. The strict regulations will also affect sales and tax revenue, thus impacting the North Carolina economy. 

Click here to learn more about the new federal laws threatening the hemp industry.

Upcoming Risks to Hemp Stakeholders

Apart from serving as a profitable agricultural commodity and a high-demand crop for legal cannabinoid products, the industry is currently facing challenges: 

Market Saturation

As more growers became part of the industry, supply exceeded demand. The demand is shrinking due to the uncertain state-level legal status of various cannabinoid products. The retail market faces many challenges, leaving farmers to compromise on low sale prices with little to no profit margins. A clear framework for granted licenses and market regulations will help resolve this obstacle for the North Carolina economy.

New Legal Restrictions

The new hemp legislation, passed in 2025, with stricter THC limits of 0.3% on a dry weight basis, considers all THC variants, not just Delta-9. However, it will come into effect after November 2026, giving a margin to stakeholders to restructure their current operations for compliance.

Main Points Of The New Regulation

Below are some of the key factors that forced the need for upcoming new regulations:

• The sale of various hemp-derived cannabinoids to minors was promoted as snacks in colorful packaging at gas stations.

• Misleading labels with exaggerated medical health claims.

• Hemp products containing THC variants were sold as non-psychoactive products with label discrepancies.

The number of licensed growers decreased after 2022 due to market saturation and an uncertain regulatory framework. Still, it is a potential market generating significant revenue, benefiting farmers, small businesses, and providing thousands of employment opportunities.

Regulation of Hemp Products Instead of a Ban

This new bill has received mixed reactions from the industry, as cannabis businesses favor it because hemp is considered to be decreasing their profit margins. Those in favor also raise safety and health concerns that can be addressed with clear regulatory frameworks at the hemp product level. 

A hemp ban could harm the billion-dollar North Carolina industry and affect thousands of jobs, investors, and growers. It is reversible with these:

• Instead of treating hemp again as a Schedule One narcotic, stricter scrutiny of packaging and labeling can help improve safety.

• Clear, adult-only selling laws can help reduce risks and protect public health.

Why Final Product Regulation Is Crucial for Hemp Safety?

Currently, a hemp farming license allows farmers to cultivate this commodity while keeping the THC limit within an acceptable level. Before harvest, farmers are also required to test the harvested crop to ensure it meets the THC limit. 

Insufficient Inspection Protocols

Inspection and testing procedures occur before harvested hemp goes through any processing or extraction steps for cannabinoids, paper, or any other industry.  The lack of regulation for final products is the main cause behind the illegal use.

Need for Product-level Inspections

Safety concerns related to psychoactive hemp-derived cannabinoids can be addressed through inspections at the final product level. Before market launch, every product must go through an inspection protocol to ensure the THC dry weight is under the legal limit.

Here, third-party lab testing can play a vital role. A Certificate of Analysis (COA) provided by an independent third-party lab clarifies the ingredients and net weight, helping to eliminate illegal hemp products.

In Conclusion

Legal reforms and policies can make or break any industry. The NC $3.2 Billion Hemp Industry is a real-world example of this transformation. The increase in hemp cultivation, retail sales, and tax revenue supports the state’s economy. But legal uncertainty, market saturation, strict licensing, and inspections can restrict its growth potential.

North Carolina lawmakers need to collaborate with hemp industry stakeholders to find a middle ground. Without compromising public health or completely banning hemp, a balanced approach supports an equal amount of cultivation and processing, along with business development and job creation. Regulating hemp products will promote responsible cultivators and businesses in the long run.