Government
The 2023 Farm Bill – What Could Change for CBD, Hemp-Derived Delta-8 and 9 THC, and FDA Regulations?
Industry Professionals urge Congress to regulate CBD and hemp-derived compounds in 2023 Farm Bill. What will the FDA do on CBD in food? Will psychoactive Delta-8 and 9 derived from hemp be banned nationally or will the new 1% THC limit help that market explode to new heights? Inquirig minds want to know!
Since the inception of the hemp industry four years ago, one thing that has continued to impact the market negatively is the FDA’s inaction in regulating hemp-derived cannabinoids and products.
In 2018, the United States legalized the cultivation, possession, and sales of hemp through the Farm Bill. Subsequently, the USDA laid down regulations for hemp production; however, the 2018 legislation is set to expire by 2023. (The legislature has to renew the bill every five years). This means the FDA prevented a significant growth in the hemp industry by failing to regulate hemp-derived compounds. Stakeholders in the industry, as well as concerned advocates, are trying to avoid this from happening again when the bill is amended in 2023.
The Upcoming 2023 Farm Bill
On July 2, a hearing titled ‘An Examination of the USDA’s Hemp Production Program’ was held by congress to explore the various ways the 2018 bill could be upgraded for hemp production to improve by 2023. At the meeting were the House Agriculture Subcommittee members, Eric Wang—CEO of Ecofibre and U.S. Hemp Roundtable (USHR) Vice President, and Ryan Quarles—Kentucky’s commissioner of Agriculture.
At the hearing, Wang and Quarles spoke. about the FDA’s lack of regulations for CBD and hemp-derived compounds, as well as how it was hurting the industry. Both urged the committee members to include a much-needed language in the 2023 Farm Bill to automatically regulate CBD and several other hemp-derived products. This way, the industry would have no reason to wait on the FDA. The majority of the attendees at this crucial hearing agreed with their point of view.
During his testimony, Quarles stated that the Food and Drug Administration’s tardiness in putting together a set of rules and regulations for hemp cannabinoids, especially cannabidiol, is disappointing. The supply chain in the hemp industry needs clear direction from the FDA regarding hemp-derived products before actors can develop and manufacture beneficial CBD-related compounds. This is currently a grey area; hence many business leaders are unwilling to make a move. This has resulted in very little demand for harvested hemp plants and materials.
When the 2018 Farm Bill was approved, Congress assured the public that it would support the cultivation and sales of hemp plants and hemp-derived compounds. This announcement spurred thousands of farmers in the U.S. to cultivate hemp on a medium and large scale. Hundreds of thousands of acres were utilized for this, only for the FDA officials to announce that it is illegal for indigestible hemp compounds to be sold. These public statements by the FDA took a mighty toll on the industry, as CBD commerce and investments resulted in losses. Since then, the industry has been chilled due to a lack of favorable policies at the federal level.
Jim Baird, Ranking Member Representative, commented that the FDA is yet to have a framework to regulate hemp-derived cannabinoids. He stressed that Congress has heard various recommendations for the amended bill and promised to continue discussing these great proposed solutions.
Chairwoman of the committee, Stacey Plaskett, wholeheartedly agreed that the FDA’s inaction had to be rectified in the next few months.
More Concerns Due To The FDA Inaction
Many people, including Wang, have warned that the FDA’s inaction further endangers millions of Americans. Poorly regulated CBD products put people’s safety and health at risk. In the last months, there has been an increase in the number of hemp products advertised as intoxicating. Consumers rarely research further on these products before buying and consuming them.
Wang rightly stated that farmers are not the only ones suffering from this regulatory uncertainty. Customers are impacted as well. Unsavory individuals mislead consumers by making false claims on product labels and selling products without the necessary precautions.
To make matters worse, affected farmers and business leaders have started producing and selling intoxicating products like Delta-8 THC. The U.S. Hemp Roundtable noted that many issues in the industry are more complicated than ever. Even minors are at risk.
With a clear regulatory pathway for CBD by the U.S. Food and Drug Administration, the economic pressure for the ongoing product shit will be relieved. This clear policy will guarantee that harmful hemp materials containing psychoactive compounds do not find their way into the market.
Next Steps…
Based on the report issued after the hearing, in the next few months, congress will be taking steps to incorporate CBD regulatory policies into the 2023 Farm Bill. This will regulate all non-toxic compounds derived from hemp as dietary supplements. In addition to this, Rep Chellie Pingree would be making similar provisions in his proposed Hemp Advancement Act.
Wang explained that both measures are absolutely necessary to limit the hemp product pathway to safe, non-toxic materials.
On the other hand, Quarles recommends taking into account a number of the Hemp Advancement Act’s crucial clauses, most importantly raising the overall THC limits for raw hemp material from 0.3 percent to 1.0 percent and eliminating the requirement that testing facilities register with the DEA. He believes raising the federal definition of hemp plants is the most appropriate step for the federal government. He also noted that the proposed 1.0% limit should include every THC isomer which has been found to have toxic effects on users, including delta-9, delta-8, delta-9, HHC, and delta-10.
BOTTOM LINE
The future of the hemp and CBD industry depends on the decision that will be taken in the coming months. By adopting a “total THC” criterion rather than a “delta-9 THC alone” standard, a threshold that more accurately reflects the substance’s genuine intoxication potential will be created.
Like Quarles rightly said, in the coming years, we should expect moderate growth in the number of acres planted, at least until the FDA establishes the legal framework for CBD and other non-intoxicating cannabinoids. Wang concluded that clear regulatory guidance for CBD would assist in building the positive momentum needed to see the U.S. reclaim its position as the world leader in industrial hemp.
Business
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Business
Marijuana companies suing US attorney general in federal prohibition challenge
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Business
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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