John Bell’s High Hopes

This article is published in partnership with Axios Raleigh. 

John Bell, who runs the hemp manufacturing and distribution company Asterra Labs, says that if the hemp-regulation bill the state Senate overwhelmingly passed on Thursday becomes law, he’ll have to lay off all 20 of his employees. 

But because Bell, a Republican state representative from Goldsboro, is also chairman of the powerful House Rules Committee, he can single-handedly prevent the bill from getting a floor vote. As a key member of the House leadership team, he could also shape the legislation to be more favorable to the industry—and his own bottom line.

In recent weeks, the General Assembly has seen a growing, bipartisan push to regulate hemp. While marijuana remains illegal here, North Carolina is one of the country’s most lenient states for psychoactive hemp-derived consumables, including gummies and vapes. The state currently has no age restrictions on the products, allowing gas stations and other retailers to sell them to minors without restriction.  

This week, Senate Republicans rapidly advanced a bill that would ban many forms of hemp-derived cannabinoids, including CBD. Bell said the proposal would wipe out the state’s hemp industry, including his company, and destroy thousands of jobs. 

“If you intended to go after the bad actors, what you just did with this legislation is you eliminated all the good players, but kept the bad actors in place,” he said in an interview on Wednesday.

Two sources familiar with his involvement said that’s not the only hemp bill Bell has tried to influence during this year’s legislative session. That has raised some lawmakers’ eyebrows. Complicating matters is the fact that Asterra is a subsidiary of RISE Capital, the private equity firm owned by former UNC Board of Governors chairman Harry Smith. Smith has publicly criticized Senate leader Phil Berger and is openly loathed by many in Berger’s orbit. 

But Bell doesn’t believe that his work on hemp legislation presents a conflict of interest. He would only be violating state law if he used his position to directly benefit his company; if legislation benefits his entire industry, that’s different.  

Bell said he sought an ethics opinion from the General Assembly’s staff attorney. In a letter dated June 18, which Bell provided to Axios Raleigh, the attorney concluded that his work on hemp legislation “does not raise red flags of required recusal, provided that legislative action is not in some way authorizing only the business with which you are associated to be the grower, producer, seller of the product.”

“As long as I’m not doing something exactly for Asterra Labs and my business, there’s no ethical challenges there,” Bell said. 

Though lawmakers spend a significant amount of time in Raleigh, the job is technically part-time and pays only $14,000 a year. That means nearly every lawmaker has another job. Bell pointed out that a host of his colleagues—teachers, lawyers, doctors, realtors, retired state employees, law enforcement officers—vote on bills that affect their professions all the time.

“We’ve got a car dealer piece that’s going on right now, back and forth. How many car dealers do we have in the General Assembly?” Bell asked. “Does anybody say shit about that?”

Bell is in a “comfortable position” legally, said Andy Jackson, director of the Civitas Center for Public Integrity at the conservative John Locke Foundation. 

“I don’t think you could have a functioning legislature if you made everybody recuse themselves every time there was a bill that might affect their pay,” Jackson said. 

But what ethics rules don’t address is what happens if legislation helps Bell “and a handful of other people in the industry essentially corner a market because they’re already established,” Jackson said.  

A bill introduced in the Senate in March could potentially do just that. More industry-friendly than the bill that passed the upper chamber this week, the Protecting Our Community Act would set up a regulatory scheme that newer or less sophisticated companies might struggle to comply with, giving Asterra an advantage. 

So far, that bill has failed to advance. But if the House reworks the Senate’s more stringent crackdown on the hemp industry, something like it could emerge—and it could ultimately benefit just a few companies, including Bell’s. 

If that happens, “is it something that maybe he should recuse himself?” Jackson mused. “That’s more of an open question.”

Lucille Sherman is a reporter for Axios Raleigh, where she primarily covers state politics.