The North Carolina hemp industry is breathing a collective sigh of relief today.

As most are likely aware, the 2018 federal Farm Bill, which legalized industrial hemp and hemp-derived products, also modified the federal Controlled Substances Act removing hemp-based tetrahydrocannabinols from the list of controlled substances.

In 2021 the U.S. Supreme Court issued its ruling in Van Buren v. United States, which reined in the criminalization of the Computer Fraud and Abuse Act of 1986 (“CFAA”) – a federal statute imposing criminal and civil penalties for certain types of computer lacking. Last month the Department of Justice (“DOJ”) updated the Justice Manual pertaining to prosecution of alleged CFAA violations.

On March 3, 2022, Attorney General Merrick Garland addressed the American Bar Association’s Institute on White Collar Crime by announcing that the “prosecution of corporate crime is a Justice Department priority.”

The Department of Justice recently announced the launch of a Civil Cyber-Fraud Initiative, which has direct implications for government contractors and serves as a warning that slack cybersecurity practices will be a target of Government enforcement action.

 

Key Takeaways:

  • Heightened Government Attention to Fraud Risk
    • The U.S. Government Accountability Office (GAO) recently released a report identifying ongoing vulnerabilities to fraud in the defense contracting sphere. The GAO Report called for enhanced efforts by the Dept. of Defense (DoD) to prevent and manage risk of defense contracting fraud.
  • Anticipated Increase in Government Investigations
    • Under enhanced fraud risk scrutiny by the DoD, government contractors of all sizes should anticipate increased government investigation efforts.
  • Opportunity for Defense ...
Last week, the South Carolina Office of Attorney General released an opinion concluding that products containing delta-8 tetrahydrocannabinol (delta-8 THC) are illegal controlled substances.
Since approximately 2014, the North Carolina Industrial Commission has doggedly pursued businesses without workers' compensation insurance in violation of NCGS § 97-94.

After more than four years in operation, the North Carolina Industrial Hemp Pilot Program will be eliminated at the end of 2021.

Did you know that in addition to criminal consequences, North Carolina also taxes illegal drugs?
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