Since the farm bill passed in 2018, you’ve likely noticed the increasing number of CBD shops around the state. Usually denoted by bright green signage, these shops have become part of shopping centers and downtowns in most towns and cities in North Carolina.
Along with the increase in shops has been the increase in homegrown NC CBD brands, such as Pittsboro’s Oak City Hemp.
Oak City Hemp – Creating a Brand
Oak City Hemp founder and owner Aaron Puryear was a student at North Carolina State when he first considered going into North Carolina’s cannabis industry.
“So I guess you could say we’ve always been ‘cannabis enthusiasts,'” he said. “I was actually an agricultural business major at State around the time that the  farm bill was passed. In that farm bill was, effectively, hemp legalization — or at least the early pilot program for hemp legalization. So I was kind of abreast of that and stayed in tune with what the industry was doing.”
Puryear says that it was his connection to the Pilot Program that led him to opening up Oak City Hemp with a business partner.
“Fast forward about four years later, in 2018 we decided to start a CBD brand,” he said. “I was initially trying to look into being a hemp farmer, but there were a few more hurdles to get a license at that time. The quickest way for us to get in this space was to go retail. So that’s what we did. We launched Oak City Hemp.”
The company launched initially as an e-commerce business. However, it wasn’t long before Oak City Hemp expanded into in-person retail. The company now operates a single retail outlet in Pittsboro’s Chatham Beverage District.
“We were in business almost a year, about eight months before we opened our brick and mortar,” said Puryear. “That just kind of happened, it wasn’t really planned or intentional. We didn’t have any real strategy to get into brick-and-mortar retail. Oak City Hemp was just doing e-commerce and pop-ups at festivals and events. We actually did an event down there [at the Beverage District]. Then, we made an offer on that space to open up a retail store.”
Challenges for NC CBD Brands
Even though business is good for Oak City Hemp and many other retailers in North Carolina’s burgeoning CBD industry, Puryear says retailers face many challenges.
“There are currently a lot of them,” he said. “This conversation could go on for a day or more. But early on, banking was a big issue. Being able to get somebody to take your money, process credit cards, have a bank account were all big challenges.”
These issues aren’t unique to North Carolina, however. All around the country, players in the cannabis industry have faced significant challenges when it comes to the financial side of the business.
“That’s been a thing in the cannabis space, like in the medicinal part out west,” said Puryear. “A bulk of the industry is a cash business. On the hemp side, it’s alleviated some in the last year or two. There have been more banks coming online and other options. Then Square has stepped up and they’re in the CBD space now, openly. Shopify has, for the most, let the companies go. Every once in a while you’ll still get some companies that still have a little bit of an issue, but it’s nothing like it was in 2018.”
NC CBD brands also face legal issues.
Retailers in North Carolina have other difficulties. The Farm Bill of 2018 explicitly made cannabis with less than 0.3% THC legal to grow, possess and sell. However, some legislators and law enforcement in North Carolina have taken issue with the smokeable form of hemp flower.
“The next hurdle that kind of spilled into the legal side of it and the law enforcement side of it,” said Puryear, “was about whether flower was legal. On the farmer’s side, they had things well thought-out. But on the retail side, we were kind of left out there just to kind of fend for ourselves. Our law enforcement here claimed they couldn’t tell the difference between illegal marijuana and legal cannabis.”
This challenge from law enforcement was recognized by the NC General Assembly. While none of the bills that sought to ban smokeable hemp passed, the threat of changing laws poses an added challenge to businesses in the industry.
“Most of our issues have come from an ignorance and a lack of education, whether it be on the consumer, law enforcement or even with the financial sector,” said Puryear. “The bulk of being in this industry is about constantly educating people at every turn. We launched as an educational CBD brand to educate people about the plant and about the differences between cannabis. That there are a lot of benefits and that it’s not all about getting high. There is therapeutic value to this plant.”
Looking Ahead for North Carolina’s Cannabis Industry
Puryear said that the additional hurdles caused by fluctuating legal restrictions are a major source of frustration, not just as a business owner but as a resident of the state. “With any poll you look at, the high majority is in favor of medicinal cannabis at the very least or at least decriminalization,” he said.
Indeed, national polls consistently show broad support for some form of legalization. Opinions in the Tar Heel State mirror those in the nation.
“Just in our state alone, people are for it,” said Puryear. “It’s just our legislators, they’re behind on the times. As a populace, we’re completely fine with it.”
Puryear says that the legal issues and other hurdles that CBD brands in North Carolina face make doing business a challenge. “It is very stressful, but this industry is not for the faint of heart,” said Puryear. “It’s been a constant battle. We’re constantly putting out fires. And we’re constantly having to pivot. Early on people would ask, ‘Did we have a business plan?’ And it’s like, ‘For what?’ If I spent the time and the money to do a business plan, it would be wrong tomorrow.”
For now, however, Puryear isn’t letting the unique challenges that NC CBD brands face hold him back. Instead, he’s focusing on growing his business and continuing to educate people on the plant.
“For me, personally, I try not to focus on that because cause I knew that going in, he said. “It is such a unique industry. There’s so much change and uncertainty surrounding the industry and cannabis and the stigma of the culture. So I really try not to focus on that, because if I did, it would definitely consume me.”
Make sure to learn more about hemp and cannabis in NC: whether you’d like to meet the first pro-legalization Agriculture Commissioner candidate or just pick your own hemp instead, we have you covered on this up-and-coming policy issue.