The 28-year-old, a potential Wallabies bolter for the World Cup, was stood down by the Reds last week after it emerged he was one of four people given notice by Queensland's Crime and Corruption Commission to appear in court on March 5.
Hunt missed the Reds' win over Western Force over the weekend and will continue to stay on the sidelines pending his hearing, Carmichael said in a statement.
"Following extensive consultation with Karmichael over the weekend, we have determined that it continues to be best for Karmichael's welfare that he is not available for selection this Friday," he said.
"As this highly complicated matter is due before the courts and is part of a wider and ongoing investigation by the Queensland Crime and Corruption Commission, we will continue not to prejudice the player's legal or contractual rights and we will apply the principles of natural justice."
Reds coach Richard Graham said later on Monday that he supported Hunt though the player would not train with the rest of the team while under the legal cloud.
"We'll certainly keep him on a modified programme but that's more to do with his strength and conditioning, and keeping him ticking over," he told reporters.
One of the best-known athletes in the country after his previous careers as a rugby league international and in the indigenous football code Australian Rules, Hunt has played just one Super Rugby match since joining the Reds at the start of this year.
A QCCC statement released on Friday alleged the four people summoned to court "arranged for the supply of cocaine for personal use or to on-supply cocaine to friends and colleagues between June and December 2014".
Hunt was on the roster of Aussie Rules club Gold Coast Suns last year.
The Queensland Rugby Union claimed the alleged offences had actually occurred between Sept. 1 and Oct. 3, 2014 -- before he started training with the Reds in late November.
Carmichael said the QRU had a duty of care to Hunt, meaning the player may be allowed to continue playing with the Reds regardless of the outcome.
The QCCC investigation has also rocked Australia's National Rugby League competition, with five Gold Coast Titans players also charged with drugs offences.
The five include Australian internationals Greg Bird and David Taylor.
Another former Titans player has also been charged.
(Reporting by Ian Ransom; Editing by Amlan Chakraborty)
