Rep. John Bell’s Hemp Company Files Blistering Legal Response

In a blistering court filing last week, state Rep. John Bell’s hemp company accused its former business partner of engaging in “organized criminal activity,” including wire and bank fraud, tariff evasion, threatening a former employee, and lying about its financial condition. 

The allegations are included in Asterra Labs’ response to MC Neutraceuticals’ federal lawsuit, which The Assembly and Axios Raleigh first reported on in July. In its complaint, MC accused Asterra, which Bell runs, and its parent company, Rise Capital, of threatening to use their political connections to coerce MC into paying more than $1.5 million. (Rise filed a motion asking to be dismissed from the case, arguing that it is not involved in Asterra’s “day-to-day operations.”)

Bell, a Goldsboro Republican, is chairman of the powerful House Rules Committee and a former House majority leader. Rise founder Harry Smith is the former chairman of the UNC Board of Governors. MC did not provide support for its salacious claim about political threats from either man. 

MC, which calls itself “the world’s largest provider of hemp-derived cannabinoids,” said in its lawsuit that it helped right Asterra’s sinking ship when the companies partnered in February 2025. But after MC missed payments due to what the complaint described as industry-wide turmoil in May, it said Asterra threatened to criminally prosecute MC’s leaders, Bret and Jeff Worley, unless they paid their debt. 

According to MC’s complaint, Asterra plotted to “take what they could from MC” and “drive MC out of North Carolina to establish [Asterra and Rise’s] desired position as captains of the North Carolina cannabinoid industry.”

Correspondence Asterra provided to The Assembly and Axios Raleigh cast the dispute in a different light. It showed that Jeff Worley admitted that MC owed Asterra money and agreed to pay $50,000 a day, but then failed to do so. Asterra’s attorney also said the Worleys didn’t inform Bell that Colorado’s attorney general had been investigating their company for years; in May, MC paid the state $50,000 to settle allegations that it had “deceived consumers.”

Asterra’s 88-page counterclaim, filed on July 25, pointedly rebutted MC’s charges. It argued that MC’s lawsuit was intended not to resolve a dispute but to “publicly embarrass Asterra and its affiliates.” 

MC “circulated the complaint to many people in the hemp industry for the purpose of damaging Asterra’s reputation in the industry,” while hiding behind “the litigation privilege.” (Claims made in legal proceedings aren’t subject to libel lawsuits.) 

“This willful abuse of process … transforms the court’s machinery into a tool for extortion and harassment rather than justice,” Asterra argued. 

In an unusually direct manner for a legal filing, the counterclaim also tried to nuke MC’s reputation. 

It spun MC’s narrative on its head, saying that Asterra was on an “upward trajectory” when MC approached it last December. According to Asterra, MC was in the red and owed hundreds of thousands of dollars to at least eight businesses. “Many suppliers in the hemp industry had refused to do business” with MC, the counterclaim said.

The Worleys were desperate to prop themselves up—and needed Asterra’s resources to do it, the counterclaim said. 

Under their agreement, Asterra purchased and sent products to MC, which resold them at a markup. MC then had 30 days to pay for the products, plus a commission. For the first three months the companies worked together, things went as planned. But according to the counterclaim, around the time they formalized the arrangement on May 2, MC began missing payments. By early June, according to Asterra, MC was more than $1 million behind. 

The Worleys “made increasingly implausible excuses for payment delays,” the counterclaim said. “When excuses no longer sufficed, [Jeff Worley] falsely stated that they had made wire transfers for payments to Asterra. Unknown to Asterra at the time, this tactic of staving off creditors with lies was [MC’s] modus operandi.” 

Asterra alleged that MC “concealed [its] financial distress” and operated like a “Ponzi scheme,” taking on debt from one company to pay off debt it owed to another. As its debt to Asterra mounted in May, MC was also $500,000 in debt to Atlantic Global Supply, a Wilson-based hemp company, the counterclaim said. The Worleys “told Atlantic Global Supply that they would get the money to pay the balance owed to Atlantic Global Supply from Asterra,” then “instructed Atlantic Global Supply not to tell Asterra about how they planned to pay the balance they owed.” 

The filing said the Worleys paid Atlantic $250,000 “using funds received from reselling goods supplied … by Asterra on credit.”

The counterclaim also accused Asterra’s former business partner of state and federal crimes, including racketeering. 

According to Asterra’s filing, the Worleys sourced ingredients from suppliers in China through an importer that evaded tariffs by mislabeling goods or splitting large orders into smaller ones, giving MC an advantage in a competitive market. (President Donald Trump ended the so-called de minimis exemption to Chinese tariffs in May through an executive order.) 

The filing also said that MC misrepresented these Chinese products as domestically produced, “violating federal laws regarding country-of-origin labeling, safety testing, and batch tracking.” Alicia Jurney, Asterra’s attorney, told The Assembly that none of MC’s Chinese-sourced ingredients ended up in Asterra’s supply chain. 

In addition, Asterra’s counterclaim said the Worleys extorted an unnamed former MC employee who went to work for a competitor in Texas in 2024. They “threatened to make a false report to the former employee’s probation officer, which would likely have resulted in the employee being charged with a probation violation,” unless the employee returned to MC. The employee acquiesced, the counterclaim said. 

Jonah Garson, an attorney for MC, declined to comment. MC is expected to respond to Asterra’s allegations within the next month. 

In its counterclaim, Asterra asked for not only the $1.6 million it says MC owes, but also punitive damages “to deter such predatory behavior” and “vindicate the principles of commercial integrity in this state.”

MC’s “unlawful conduct inflicted profound damage on Asterra,” including “potential insolvency” and “reputational damage,” Asterra alleged. 

It’s unclear whether tarring MC will salvage Asterra’s reputation. After all, Asterra holds itself out as the gold standard of North Carolina’s hemp industry, but it partnered with a company it now claims is not just unscrupulous but criminal. 

And based on its own filing, it appears to have done so, at least in part, out of naïveté. 

When Bret Worley proposed a partnership, the counterclaim said, he “boasted of his business and political connections, including fabricated claims of influence over federal policy through his romantic relationship” with the daughter of President Trump’s chief of staff. 

Bret Worley allegedly “stated that he could … secure political appointments and other favors for those who conducted business on terms that were favorable to” MC.

Bell, meanwhile, holds considerable sway over the state’s hemp policies. 

As Asterra’s filing admitted, North Carolina’s hemp industry is currently a “Wild West” with “regulatory ambiguities and opportunistic actors.” 

Bell has pushed for industry-friendly regulations that set age and dosage limits for CBD products and licensing requirements for hemp companies. A bill like that passed the state House in 2023 but died after the Senate included a provision legalizing medical marijuana. Similar legislation introduced in the Senate this year hasn’t made it out of committee. 

Instead, in June, the Senate passed a bill that would ban most hemp-derived THC products. It is currently sitting in Bell’s Rules Committee. 

Jeffrey Billman reports on politics and the law for The Assembly. Email him at jeffrey@theassemblync.com.

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