That'sbotrytis. It's the same stuff that grows on grapes for wine making. It's black mold that's found in curing jars that is really bad for you, not this.
You can cut away the damaged bud and make oil with the rest, it doesn't spread once the bud is dry. I smoked my last crop that was affected with no problems but i wouldn't recommend it at all, although we inhale hundreds of spores everyday that our imune system fights off, but you don't want to test it (hypocrite
)
The whole plant will likely have evidence of botrytis (hairs growing on the them inside the bud).
I saw someone mention in the NZ outdoor growing thread that they spray neem oil to keep the moisture away from the buds during rain storms.