Unlike hemp, marijuana still is subject to state statutes and the federal Controlled Substances Act. The legal distinction between hemp and marijuana is too subtle for the human eye, or a trained K-9’s impressive nose, and it has created a quandary for interstate hemp shippers. Until federal law clarifies interstate commerce laws pertaining to hemp, producers should reconsider transporting hemp through less-receptive states.
Last week the Food & Drug Administration (FDA) made public three new warning letters to Cannabidiol (CBD) and hemp oil product companies sent by FDA and the Federal Trade Commission (FTC). FDA has previously targeted cannabis product companies.
The new warning letters are consistent with FDA Commissioner Scott Gottlieb’s recent statements that the FDA will go after manufacturers of CBD products that make health and wellness claims that FDA views as egregious. For example, the CBD companies in question allegedly marketed their products for Alzheimer’s disease, fibromyalgia, inflammation, skin conditions, autoimmune disorders, anxiety, cancer pain, PTSD and depression, to name a few symptoms. These companies are making food, dietary supplements, and cosmetic products, as well as products for pets (CBD for dogs). (more…)
On May 31, 2019, the Food and Drug Administration (FDA) will hold a public hearing on cannabis products. The hearing seeks to obtain scientific data on cannabis and cannabis-derived compounds, along with additional information regarding health and safety risks, manufacturing and product quality, marketing, labeling and the sale of such products.
The FDA’s notice announcing the hearing recognizes that the regulatory landscape surrounding cannabis continues to evolve at both the federal and state levels. At the state level, 33 states and Washington, DC, allow for the medical use of marijuana and 14 additional states have medical programs limited to cannabidiol (a/k/a CBD) products. Moreover, 10 states and Washington, DC have legalized marijuana for recreational use, while 13 additional states have decriminalized recreational marijuana possession in some form.
At the federal level, the Agriculture Improvement Act of 2018, Pub. L. 115-334 (often called the 2018 Farm Bill), removed hemp and its derivatives from the Controlled Substances Act, so they are no longer classified as controlled substances under federal law. This has prompted an avalanche of businesses marketing products containing hemp-derived compounds – most notably CBD – in ways that the FDA views as violations of the federal Food, Drug, and Cosmetic Act. According to the FDA, many questions remain concerning the safety implications of the widespread use of these products. Therefore, the FDA seeks relevant information to inform its position in regulating the development and marketing of cannabis products. (more…)
The Agricultural Act of 2018, better known as the 2018 Farm Bill, authorizes the US Department of Agriculture (USDA) to approve plans submitted by states, territories and Native American tribes for the commercial production of hemp. Under the 2018 Farm Bill, “hemp” is the cannabis plant and any part of that plant, including the seeds and all derivatives, extracts, and cannabinoids, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis. The USDA is currently drafting regulations on hemp production, which could address topics such as sampling processes, testing requirements, disposal of violative plants and products derived from those plants, inspections, licensing, compliance and other procedures.
To solicit stakeholder input on these procedures and their implementation, the USDA Agricultural Marketing Service hosted the 2018 Farm Bill Webinar on the Domestic Hemp Production Program on March 13, 2019. The webinar drew more than 2,100 participants and featured over 40 speakers, including state agricultural and government officials; representatives of Native American tribes; and representatives from banks, testing laboratories and standards organizations, trade associations, law firms and hemp product companies.
During the webinar, the USDA announced plans to issue its regulations in fall 2019, in time for the 2020 growing season. However, this timeline may be a tall order, given the number of complex and controversial factors involved, such as plant testing procedures and interstate transportation of hemp and hemp products. Based on the robust discussions during the webinar, any regulations or procedures for plant testing are likely to be heavily scrutinized, as different states test different portions of the plant; test the plants at different times (e.g., before or after harvest); and use different testing methods.
Click here to view the full webinar.
116th Congress’ first cannabis-related hearing
Next week, Congress will hold a long-awaited hearing on the future of banking in the cannabis industry.
On Wednesday the 13th, the House Financial Services Committee Consumer Protection and Financial Institutions Subcommittee will convene a hearing entitled, “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses.”
Among the discussion points will be the Secure and Fair Enforcement (SAFE) Banking Act, which was introduced and championed in the last Congress by Rep. Ed Perlmutter (D-CO), a member of the committee. The Perlmutter bill provides safe harbor to banks working with businesses in the cannabis industry operating legally within their jurisdiction. Groups including the Credit Union National Association and the Independent Community Bankers of America support such legislative efforts. Last year, a bipartisan group of 19 state attorneys general sent a letter to Congress urging passage of the SAFE Banking Act. The bill had 95 cosponsors (including 13 Republicans) in the last Congress. Its companion legislation in the Senate, introduced by Jeff Merkley (D-OR), had 20 bipartisan cosponsors.
Banks, particularly the largest financial institutions, remain hesitant to provide services to the cannabis industry for fear of violating federal money laundering laws. That leaves many businesses in the industry to deal in cash. For a $10 billion (and growing) industry, “cash only” is not a sustainable policy. Business interests, regulators and (increasingly) Congress agree that something must be done in order to bring the cannabis industry into the banking system. Next week’s hearing is the first significant step of the 116th Congress to address this issue. In the coming weeks, banking legislation will be re-introduced, negotiated, marked-up in the Financial Services Committee, and possibly brought to the floor of the House.
Hearing details:
House Committee on Financial Services – Maxine Waters (D-CA), Chair
Subcommittee on Consumer Protection and Financial Institutions – Gregory Meeks (D-NY), Chair
Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses
Wednesday, February 13, 2019 at 2:00 pm ET
2128 Rayburn House Office Building
Streaming on https://financialservices.house.gov
On Wednesday, January 9, 2019, Rep. Earl Blumenauer (D-OR) announced the leadership team of the Congressional Cannabis Caucus for the 116th Congress. In addition to Mr. Blumenauer, the Caucus will be co-chaired by Rep. Barbara Lee (D-CA), Rep. Dave Joyce (R-OH) and Rep. Don Young (R-AK).
Mr. Blumenauer helped found the Caucus in 2017 with the goal of providing a bipartisan forum for discussing and collaborating on sensible federal cannabis legislation. The Caucus has a particular focus on harmonizing federal and state laws with regard to medicinal or adult-use of cannabis. The group also works to address issues related to researching cannabis, providing veterans access to medicinal marijuana and business needs, including reforming the tax code. Two of the founding co-chairs have since left Congress: Rep. Dana Rohrabacher (R-CA), who lost his re-election bid in November, and Rep. Jared Polis (D-CO), who was elected governor of Colorado. (more…)
As beverage manufacturers mull the creation and distribution of cannabidiol (CBD)-infused products, the US Drug Enforcement Administration’s (DEA) recent actions regarding an approved CBD drug merit exploration. CBD is one of many chemicals in the cannabis plant, and the US Food and Drug Administration (FDA) has stated that CBD does not produce the same euphoric effect as tetrahydrocannabinol (THC), marijuana’s psychoactive component.
In June, FDA approved the first drug comprised of an active ingredient (CBD) derived from marijuana, Epidiolex. FDA approved the CBD oral solution for patients two years of age and older who have seizures associated with two forms of severe epilepsy. According to DEA and FDA, the CBD in Epidiolex is extracted from the cannabis plant and is a purified drug substance. Though it is derived from the cannabis plant, the FDA-approved drug has no more than 0.1 percent residual THC.
Last week, DEA announced an order scheduling Epidiolex under the least restrictive schedule of the Controlled Substances Act (CSA), schedule V. Notably, DEA still considers marijuana (which includes industrial hemp) and marijuana compounds other than Epidiolex to be schedule I controlled substances under the CSA. As a result, beverage manufacturers should carefully consider all legal implications prior to developing products that contain CBD. (more…)
As more states legalize the recreational use of marijuana, beer servers will undoubtedly face situations in which a patron is too impaired to drive due to the consumption of both cannabis and alcohol. State laws do not provide a crosswalk of breath alcohol concentration (BrAC) limits and nanograms per milliliter (ng/ml) of delta-9-tetrahydrocannabinol (THC) in a driver’s body fluids. But a few states have established limits on the nanograms per milliliter (ng/ml) of THC that may be present in a driver’s blood or urine. States will continue to create and modify statutory and regulatory schemes focused on marijuana impairment. In doing so, state legislatures will likely revisit the policy discussions on limits for alcohol consumption.
Originally published in The New Brewer, July/August 2018.
On Friday, April 13th, Senator Cory Gardner (R-CO) announced that President Trump assured him that the Department of Justice’s decision to rescind the Obama-era guidance on marijuana enforcement would not affect Colorado’s legal marijuana industry. President Trump also promised Senator Gardner that he would support a federal legislative fix that takes into account state decisions to legalize marijuana. In turn, the senator lifted holds on all Department of Justice nominees, ending an intra-GOP standoff over the Department’s cannabis policy.
In January, Attorney General Jeff Sessions rescinded guidance that outlined eight marijuana enforcement priorities, heightening the possibility of a federal crackdown in states that legalized recreational and medical cannabis. Pro-legalization advocates feared that Sessions’ announcement granted federal prosecutors broader discretion to pursue criminal charges against marijuana businesses operating legally under state law in states like Colorado, Washington, California and elsewhere. Sen. Gardner immediately responded that he would block all DOJ nominations over the new policy. (more…)
US Attorneys, state officials and cannabis industry representatives met in Portland, Oregon on February 2 to discuss how to enforcement will change after Attorney General Jeff Sessions announced changes to Department of Justice (DOJ) policies on the prosecution of marijuana cases. The answer: a crackdown on illegal overproduction in states where cannabis production is legal and a focus on reducing the amount of cannabis being diverted to states where it is still illegal.
On January 4th, the DOJ released a memo that directed all US Attorneys to enforce “the laws enacted by Congress” and “follow well-established principles when pursuing prosecutions related to marijuana activities.” The memo rescinded the Cole Memo and other DOJ guidance that reduced the likelihood of federal prosecution of cannabis businesses in states that permit medical and recreational cannabis use. After the DOJ announcement, the cannabis industry was unsure of how these changes would affect cannabis operations legal under state law and uneasy about the future of the industry. (more…)
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