Editor’s note:

Following the publication of this story — Calls for more inspections, oversight in hemp and CBD production in North Carolina — we were made aware of several images of pigs inside of a registered hemp processing facility in Wendell, N.C. We immediately sent follow up questions to the N.C. Department of Agriculture and Consumer Services (NCDA&CS).

We had heard rumors, and had asked state government officials; we asked a co-owner of the company and reviewed what we thought was an inspection report from that property. The document presented to us by Jimmie Terry, of Medicine Mama’s, was not for the production facility at his house it was for a commercial kitchen.

This morning, Joe Reardon, Consumer Protection Assistant Commissioner in the NCDA&CS, and Anita MacMullan, Director of the Food and Drug Division — mentioned in the article linked above — requested to speak to us about the situation.

This is the transcript.

Rhiannon Fionn (RF): We have a whole bunch of questions, but first I want to ask: Do you have any questions for us regarding the story we published last night?

Joe Reardon (JR): We read your story and there were a lot of inconsistencies in it, but that’s come to be expected lately. But I’ll answer any questions that you’ve got.

RF: Can we talk about the inconsistencies? Because we want to make sure we’ve got the story right.

JR: I don’t know that I want to go through every point in your story, but there is information in it that leads us to believe it’s not right.

RF: I’m happy to issue a correction.

JR: Maybe through this conversation, and your questions, things will become very clear whether or not you were factual in what you wrote the first time.

RF: Okay, let’s begin then. The person that reported Medicine Mama’s – are they okay?

JR: Yes, as far as I know. It was a consumer complaint. As we do with any complaint associated with the consumption of any product in which there could be potential illnesses associated with it – and food specifically, we investigate complaints. In this case, once we received the complaint, we initiated an investigation of the complaint. And, I think, somewhere you say in your story that these were announced and, in fact, that’s not true. When we did our follow up to the complaint the initial contact that we had with the manufacture was completely unannounced, so that’s not factual at all.

RF: Okay; I appreciate that. That is what Jimmie Terry told us, was that you all were very good about scheduling around their schedule. So, you’re saying that information is inaccurate.

JR: So, the details matter …

RF: Yes, I agree.

JR: So, when we initiated the complaint follow up that was an unannounced inspection so we could observe the conditions as they were. When we did our follow up with them to complete some additional paperwork then we communicated with them regarding a time that would work for both of us. But the initial complaint investigation was unannounced as we would do any investigation that we would conduct. That’s so we can see things as they are.

RF: That makes a lot more sense to me, honestly, than what Mr. Terry said.

JR: Once we’d already made contact, we have some supplemental paperwork that they needed to sign so it was only practical that we would work around their schedule.

RF: Thank you for clarifying that. Are you able to tell us who reported them? I’m asking not to reveal their identity but because there have been rumors that it’s someone within the hemp industry. I have seen no evidence of that whatsoever, but I need to ask the question.

JR: So, let’s do that this way. Anytime we have contact with the public we create a record, with a complaint follow up there’s documentation to go with that. What I would suggest to you is to send Anita an email and say that we would like to request, per North Carolina Public Records Act, copies of your complaint follow up. Then we’ll send you the information and it will have the complainant’s name in it.  That will follow our protocol and you can get what you want from that.

RF: Yes, Sir. We’re happy to do that. So, both on the phone and in social media messages, the Terrys have implied that they have a friendly relationship with Director MacMullan. I’m not even sure how to classify it, but …

JR: I’ll classify it for you. Just like me talking to you, now, Anita and myself – and any of our staff, no matter what we deal with we are always cordial and respectful and we’re always engaging with the people with whom we communicate with, and that would be true when that ends up in a good way or when things don’t go as well as they would want. The demeanor of our staff has, and always will be, that we’re respectful, we’re cordial, we’re polite but we’re also carrying out the responsibilities of the program. And we did here, and we’ll probably get into that. If not, I’m going to tell you what you don’t know. But that’s just who we are, and that’s what we do and we think it’s the right thing to do.

RF: That was my assumption, actually. I wonder; they did not seem to understand the professional positions that MacMullan and Gains hold in the NCDA. Were they …

JR: Let me help you with that. I know because we prepared for this inspection before we went out there, and so I know exactly what’s taken place and I know exactly what correspondence they’ll be receiving. So, during the course of that investigation Anita and her staff clearly explained exactly what the position of the department would be and then we also explained that there would be a follow up letter going to them that would outline the position of the department. It’s no different than the position you’ve seen in the correspondence that’s out there about our letters. So, there’s no misunderstanding about where we are with health claims, nutritional supplements and no misunderstanding on our part on about products – CBD being included in food products as well. The correspondence they will receive will clearly articulate our complaint investigation and what we found and exactly, again, what our position is legally. What we do is we have a conversation with someone, but we follow that up in writing, and we will here too. And you’ll be able to request all that. That will paint a real clear picture for you. Actually, that will fill in a lot of blanks for you about the process and what we did, what we agreed on; it’s going to paint a really good picture for you.

While transcribing this conversation, Stephanie Terry,  co-owner of Medicine Mamas, sent us a couple messages via social media and made a couple of comments on social media posts. She also invited us to view pictures of her pigs which she said are on her Facebook page. We’ll include one photo and screenshots of the messages she’s sent us in the last 24 hours. We understand she wants to be heard in all of this, and understand. She will have a chance to participate in an interview once we receive the state documents we’ve requested about her case; Carolina Cannabis News’ investiation continues.

Important:

The moment we received this note from Mrs. Terry we sent this screenshot to Ms. McMullen asking for comment on the accusation that it was the authorities that asked to see the pigs and if that was when the pigs entered the residence. We will update this story when she responds.

RF: I appreciate that because the Terrys are telling us that they have entered into a “voluntary agreement” with the state …

JR: I can acknowledge what that is. This is something that we would do, and we do traditionally all across the state every day. If we come across conditions in which we believe that a facility should not be operating, then there are a couple paths the department can take. One, we can get an injunction if we choose to; the other is we can enter into a written agreement in which they will cease the packaging, processing, storage and distribution out of an environment. And in this case, as you’ll see as outlined in the body of the letter that you’ll probably be requesting, it’ll outline exactly what that was and the functionality of it. When we see conditions in which someone is operating in violation of what we would expect then we can enter into – and we do – a voluntary agreement, and we did here. You’ll see that outlined in the letter.

RF: Is there a time frame? Do they have 10 days to get in compliance – 30, 60, 90? Or is it immediate?

JR: It’s immediate. We stop the production today, right now, of any food products from that facility.

RF: And if they don’t stop?

JR: If they don’t we obviously, because we’ve entered into a voluntary agreement, we can come back and do an unannounced inspection and if we find continued violation of that voluntary agreement then we can get an injunction, we can embargo, we can do a civil penalty – there’s a variety of things that we can do. But, the first stage, and you normally do this when you have people who are cooperative, and they were, they immediately ceased the production, storage and distribution of a food product. If we find they violate that we have all the tools necessary to take a different approach. But when people are cooperative then we try to be as well.

RF: Let’s talk about the difference between being food safety compliant and CBD compliant. And I say that because we’ve seen a couple of business owners who’ve said your people have come by to visit and they’re now saying on social media that they’re state approved and state complaint … and I’m not sure what they mean. Does that mean food safety compliant, or what?

JR: I’m glad you reached out to me, and hopefully what you write will reflect our conversation. It doesn’t do any good to add things to what I say or take away. Try to stick to what I say, and we’ll be good. So, here’s how this is going to work. Let’s talk in a broader sense and we’ll come back to this facility. The department of agriculture does not have regulations currently that would allow us to inspect and provide regulatory oversight on the extraction, production, packaging, labeling of CBD products. So, the department will be working with industry representatives; but, first, we’ll be working with the legislature to give us the authorizing authority to develop regulations that will oversee the production, the extraction, the packaging and the labeling of CBD tincture-type products. We look forward to working with the legislature in 2019. If they see it appropriate, they will give us the authorizing language and change in our food and drug and cosmetics act to develop regulations. We will work with industry to develop those regulations. Once all of that is in place, then we would subsequently do inspections to ensure that facilities can comply with those regulations. But at this point none of that is available to us and so neither have we inspected nor approved any facility for the production of CBD.

RF:  So, these inspections are really about food safety?

JR: Again: We have not nor do we intend to inspect facilities for the production of CBD until such time as we have appropriate regulations authorized by the legislature for their development, and then (we can) conduct inspections in accordance with that. So, we neither have nor intend to inspect facilities for the production of CBD products. So, if they say they been approved … that is simply not factual. We’ve not done those inspections and will not do those inspections until we have suitable regulations.

RF: Yes, Sir; that makes sense. Is there a bill in the works now? I’ve been following the bills being filed in the NCGA and I’ve not seen anything to this affect.

JR: Not yet. Like I say, we intend to work with our legislature to see if they will afford us the opportunity to change our food and drug and cosmetic act to authorize us to develop regulations.

RF: I guess one concern there, as someone who’s been following the NCGA for a long time, is that you might introduce a bill this year but it could take a long time for it for it to go someplace, or you could introduce it and it could be on the governor’s desk by the end of the day. I mean, it just depends on the bill and the political will to press it forward. Talking to legislators, do you feel there is the political will to grant you all this type of regulatory oversight?

JR: We don’t know. We’ll be finding that out, so people like yourself and others – and the people out there [in the industry] – will surely have the opportunity to be engaged with the legislature and say, you know what, we really do want regulatory oversight of this industry; we think it’s the right thing ourselves. Or, someone will decide that they don’t. We think that providing a fair, uniform regulatory framework will allow for the production of these products so that we as a regulatory community can ensure the purity, the strength, concentration and reliability of the products that will be produced.

RF: Being someone who is kind of in between everybody, there are a lot of consumers who have concerns that … even I; I have a bottle of CBD right here in front of me and I don’t know what this label means.

JR: That’s right. There are a couple of things you don’t know. You don’t know where it was produced, in what environment. You don’t know exactly what was used in the extraction process. You don’t know exactly what the reconsitutional process is and what chemicals were used to reconstitute it. You’re not sure about the purity of it, as it would relate to the tincture compounds that can be included in it. And you’re unsure, in the final concentration, about what the level of CBD may be in that final solution. So, we believe regulatory oversight can help answer many of those things and provide a framework.

RF: Just thinking out loud here, if the legislative process were to drag on for a long time I wonder what the impact will be on industry and from the consumer perspective. I’m assuming your preference would be that this bill get to the governor quickly.

JR: We’d love to see it in 2019. Now, let’s talk about the other place. Just so we’re clear here; I like clarity. We followed up unannounced to do an investigation for a complaint follow up.

RF: Are you talking about Medicine Mama’s?

JR: Medicine Mama’s. We went there. We did a complaint follow up; an unannounced inspection. During the course of that inspection we did enter into a voluntary agreement that no products would be produced or stored at that facility. It is true that they requested that we inspect the facility for the production of food; we did inspect a subsequent commercial facility for the production of food. That food in no way had any correlation with the production of CBD products or edibles with CBD. We reiterate, we do not want to see – and it is a prohibited act to include — CBD in food products. We stand by that. We stand with the same position the FDA has on that. CBD is a drug. It is a prohibited act to include a drug in a food product. So, that inspection that we did at their facility that they would like to produce food at was not in any way an endorsement of producing food products containing CBD. We made that clear to them. It will be clear in the letter they’re going to be getting. And there’s no lack of clarity on our part. We don’t think there is on theirs, either, but it will be reinforced with the letter they will receive.

RF: They are telling me that they feel like they have been given the go-ahead. And this is not just them, actually; this is also Ladybug Medibles in Charlotte. They feel like they have been given the go ahead to produce CBD or hemp-based food. And I kept asking, “Are you sure?” And he said, “I don’t even think we’re going to get a letter.” And I said, “You’re getting a letter.”

JR: They’re going to get a letter. And that letter is clear. It is going to say it’s a violation of law. That is going to happen. We communicated that to them on more than one occasion. As far as Ladybug Medibles, they’ve been inspected as a bakery but not as a bakery in relation to CBD. That in no way correlates to CBD infused foods. We inspected them in early January. We’ve only been to two other places – Medicine Mama’s and Sugarleaf Labs, but that was not an inspection; we just went to follow up on a complaint.

RF: So, at Sugarleaf that was a follow up?

JR: That was a follow up on the complaint. The other facility that you’re speaking to, we’ve never inspected them as it would relate to CBD production.

RF: What about the difference between CBD isolate versus full- and broad-spectrum products or whole plant products?

JR: In this case, the FDA has not distinguished the difference. And so therefore CBD as an active drug ingredient cannot be included in a food, period. Anyone who sees that differently should reach out and contact us; that’s the facts. There’s hemp oil; we have no concern with that. There’s hemp seeds; we have no concerns with that. (Gluten-free hemp-seed flour); we have no concern with that. What we’re saying clearly is, and this is it, that CBD extract cannot be used as an ingredient in food. I don’t want to get into whole plant because there are pieces of that plant that are grass and generally recognized as safe. I don’t want to get into that. I just simply want to say, I want to be real clear: The department of ag has communicated that CBD extract cannot be infused – it is a prohibited act to be infused — into food products. That’s the only thing I want to say. That’s all I want to say; I don’t want any of that other.

RF: I hear you, but I can tell you that Kendra Jeffress of Ladybug Medibles will say, “But I use the whole plant.” Just so you know, not saying something about it is confusing because people are using the leaves and biomass and putting it into food and they think that is okay.

JR: We know there’s going to be a lot of variations in this. The point of the thing is it’s a CBD extract – that’s where we’re drawing the line; not the stalks, not the plant. It’s the CBD extract. It’s pretty simple; when they draw that CBD out of that plant and make an extract, to add that extract back to a food – you are infusing a drug compound, currently approved as Epidiolex, into a food.

RF: But that’s just the isolate.

JR: I’m answering it the way I want to answer it for you. FDA has not distinguished the isolate and the full spectrum; they said CBD cannot be infused in a food. It is a prohibited act. We are saying the exact same thing. We’re not taking any action on any tinctures as long as they don’t make medical claims.

RF: Does that include topicals?

JR: The only three things we’re saying is that we don’t want CBD in food – it’s a prohibited act because it’s a drug compound; we don’t want medical claims made with the tinctures; and we don’t want CBD as an ingredient in a nutritional supplement. We are not, at this point, taking action on any of these other products. The lotions, the potions – whatever; the topicals.

RF: Regarding the allergy situation – I understand that you had a conversation with Medicine Mama’s about allergen concerns. That could have meant a lot of different things; that could have meant the dogs or the carrier oil. Can you elaborate on what you talked to them about allergy wise?

JR: Because the inspection had to do with the production of food for humans – not having anything to do with CBD at all – we always go over the allergen concerns as it relates to the production of food for humans. Meaning if you’re going to make brownies that has milk or whey or peanuts in it. The context is the same as it would be for any other food production facility; it’s only for the production of human food. It has nothing to do with the CBD conversation.

RF: I guess that is something that would come with your regulatory authority, getting into what kind of carrier oils can be used …

JR: In this case, that’s not what we’re talking about. It was only in the context of the production of a food item.

RF: Is that something your department will look at in the future? The type of carrier oils being used? Is that even on your radar right now?

JR: I think that when we look at developing regulations for this obviously we’re going to need to explore what those products are and what is most appropriately used and what kind of guidelines we want to have on the reconstitutional oils that they may use to reconstitute these products, but that is something that we’ll look at when we write these regulations. We know there are some fractionated oils being used, we know that there are a lot of different compounds being used … we’ll want to better understand what they are and how they can and cannot be used. That will be part of the regulations that we write.

RF: For organizations, if they continue – and I think you’ve already addressed this but I want to make sure I’m totally clear; if they continue to produce these foods then you guys will be back, and then you will take enforcement if you can – right?

JR: At this point, and I’m not playing on words – this is important to you, we are taking an educational approach at this time. We will reevaluate the success that we’ve had with this educational approach. If we find reason to take a more aggressive approach within the provisions of the laws in which we have already, then we will consider doing that as well. But right now, we will take an educational approach, but we will take additional measures if it’s deemed appropriate. We can embargo products, but at this time we’ve chosen to take an educational approach. But that could change. That could change for a variety of reasons. If we have illnesses, that will make us reevaluate our stance and we can do that.

RF: So all of the products in the stores and online – are they in violation of the law? Are customers in violation for purchasing them?

JR: The foods that contain CBD, an active drug ingredient, that is a prohibited act under federal and state law. Those products should not be sold and distributed if they include a food product that has a drug in them. It is a prohibited act under federal and state law. That’s the fact. That’s as much as I can say there. That’s just the facts.

RF: Yesterday, someone asked me this: What if the food is prepared for a private party, or a party where people pay to attend? What if people make the food and add CBD into it themselves at home?

JR: Again, we’ve covered a lot of ground here, but it’s not offered for sale. So, whatever consumers do in the privacy of their own home – that’s them. If it’s not offered for sale at this time it is not on our radar.

RF: There are out of state producers whose products are being sold in North Carolina – I’m thinking specifically of Liberty CBD; I see their gummies all over the place. They are in California, and can’t sell their products there, but they’re selling them here. I noticed that they are not a registered processor with North Carolina. Well, those are food products so I guess they’re out, too … but should processors who are selling in North Carolina be registered in North Carolina?

JR: That’s a good question. I think that’s something we need to consult on and get back with you on.

RF: Okay. Fair enough. Businesses that have names like “medicine” or “healing” – is that something you are concerned about?

JR: No. I’m only interested in the products. I don’t want to see products with CBD in them. (Editor’s note: Also check with other state and federal agencies and your attorney on this one.)

RF: And, of course, I have to ask about the pigs. Did anyone see pigs inside when you inspected the Terry residence?

JR: Yes.

RF: But the document they were given says that there were no objectionable conditions observed – is that an objectionable condition?

JR: Now you’re blending stuff. You need to be very specific with your facts. You’re going to be getting a letter that outlines our inspections. That inspection was done at their home. They entered into a voluntary agreement that they no long produced, sell and distribute from that location. What you’re referring to is a subsequent inspection at a commercial location. Don’t tie those things together; they don’t go together.

RF: So, the pigs being at the house … is that a concern or violation of any kind?

JR: That’s why they have a voluntary agreement to cease the production of food or anything in that house. That’s our regulatory action, we entered into a voluntary agreement to immediately cease the production, storage or distribution of food from that house.

RF: Okay, well. Is there anything else you’d like to add?

JR: Please quote me correctly. If not, I spend a lot of time correcting that, too.

RF: My goal is to never misquote anyone. In fact, if you ever see anything on our website that you feel is incorrect, we would appreciate it if you tell us. Our goal is to never put out incorrect information.

JR: So, we addressed that we’re polite to everybody. We addressed the fact that it was not an announced inspection on the complaint follow up. And we clarified that the no objectionable conditions have nothing to do with that home; that was a separate inspection that we conducted at their request having nothing to do with CBD.

RF: Got it.

BY Rhiannon Fionn

BY Rhiannon Fionn

Editor & Publisher

Rhiannon Fionn is an award-winning journalist based in Charlotte, N.C.