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IN THE KNOW BLOG

Commentary on Evolving Industry Developments and Marketing Trends

CBDA Insider’s Update: Week of August 31, 2020

by | September 2, 2020

The CBD Association is working hard for you both in the U.S. and internationally. Here are some recent developments:

7 States to Vote on Marijuana in November

Voters in Nebraska, Mississippi, and North Dakota will decide on a medical marijuana initiative this election day.

On Aug. 28, Nebraska Secretary of State Bob Evnen (R) announced that the Nebraska Medical Marijuana Initiative had qualified for the ballot. The certification had been pending while the secretary of state’s office considered objections that had been filed over the ballot language.

Voters in four other states—Arizona, Montana, New Jersey, and South Dakota—will vote on statewide ballot measures to legalize marijuana for personal use. 

MORE Act Projected to Pass the House – Not the Senate

The Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2019 has 87 co-sponsors in the House of Representatives and is expected to pass, said David Mangone, director of policy and government affairs for The Liaison Group, a Washington DC firm that lobbies for the National Cannabis Roundtable. Only one co-sponsor is a Republican: Rep. Matt Gaetz of Florida, who is one of President Donald Trump’s top allies in the House.

However, even if the House passes the MORE Act, industry experts believe it’s highly unlikely that the U.S. Senate will consider the bill – even at the committee level – before the election day in November.

According to Politico, the odds of this bill passing in the Senate are still very slim, given the opposition of Majority Leader Mitch McConnell. During this week’s Republicans National Convention, speakers criticized Democrats for purportedly prioritizing marijuana sales during the pandemic over more important services like health care and religious gatherings. 

The bill’s lead sponsor in the Senate is Senator Kamal Harris, the Democratic nominee for Vice President. 

DEA on Hemp and CBD – Crackdown Potential 

The Drug Enforcement Administration (DEA) recently released proposed rules for hemp and CBD. The agency claims the regulations only put its procedures into compliance with federal law. Industry players and stakeholders know that – intentional or not – the DEA’s IFR is doing much more than complying with the 2018 Farm Bill. 

The DEA’s IFR makes four significant changes to existing law: 

  • The DEA proposes adding language that will modify the definitions of tetrahydrocannabinol(THC) and marijuana extract to exclude any compound, mixture, material, and/or preparation from the definition of hemp.
  • The DEA also proposes removing the FDA-approved CBD-based drugs that have no more than 0.1% residual THC from Schedule V. On the other hand, all hemp derivatives and extracts that have more than 0.3% THC will remain Schedule I controlled substances.
  • Removing import and export controlsthat are currently being forced on hemp and all its extracts.
  • Modifying the definition of marijuana extractto not include substances that have less than 0.3% THC on a dry-weight basis.

These alterations create two major concerns amongst the hemp and cannabis industry. One, that language regarding THC concentration in the IFR has created uncertainty when it comes to producing hemp extracts. The process of extraction involves isolating the cannabinoids, and it inadvertently causes THC levels to spike.

Industry experts understand that this language opens the door for the possibility that the DEA could presumably take action against hemp extract manufacturers during this stage before the business is able to dilute the THC to be in compliance.

The issue with this standard began with the 2018 Farm Bill. The language adopted by the DEA mirrors that of the Farm Bill. However, with little enforcement on the part of the DEA, USDA, or FDA since 2018, very little has been done by industry advocates to correct this standard.

A second issue the attorney identified concerns delta-8 THC. The most widely known cannabinoid is delta-9 THC, the main component responsible for creating an intoxicating effect, but delta-8 THC from hemp is also psychoactive and is an object of growing interest within the market. It’s a legal gray area, as no explicit laws are regulating delta-8 THC, which can be converted from CBD.

Based on the IFR language, all cannabinoids that are derived from hemp with a delta-9 THC concentration not exceeding 0.3% are lawful. However, any synthetically derived THC remains an illegal Schedule I controlled substance under the CSA. 

Delta-8 THC is converted from CBD through the use of a catalyst. It’s unclear if the DEA could hypothetically consider it “synthetically derived” and therefore an illegal substance.

Public comments on the proposed amendments will be accepted until October 20, 2020.

Hawaii Now Open for Hemp Production 

Hawaii Governor David Ige has signed into law House Bill 1819 legalizing the growth, processing, and sale of industrial hemp in the state. Under the bill, hemp farmers will apply directly to the USDA for licensing. The bill did not establish a state program or provide funding for hemp production within the state’s budget. 

Thailand on Hemp and Hemp-Based Ingredients in Food 

The Thai FDA recently circulated draft MOPH notifications that aim to govern hemp-based food ingredients under the Thai Food Act.

Under these draft notifications, only non-viable hemp seeds, hemp seed oil, and protein derived from hemp seeds will be allowed as ingredients in food products. The development of food and food supplements comprising those ingredients may be allowed soon.

Under the proposed regulations, any products claiming any type or amount of THC or CBD, or any health claims about these substances, are prohibited. On the other hand, a statement or claim about the hemp seed, hemp seed oil, or proteins from hemp seeds may be allowed, subject to rules prescribed in a separate notification pertaining to health claims in food products.

Notable label requirements include “May contain THC and CBD. Anyone with allergies or sensitivities to said substances should consume with caution,” and “No therapeutic properties.”

The draft notification on hemp-based food ingredients is currently in the public comment period. 

CBD for Elephants – Warsaw Zoo Experiments with CBD for Elephants under Stress 

Zookeepers at Poland’s Warsaw Zoo are launching a project to test whether CBD oil can help reduce anxiety in animals, the BBC reports.

The first part of the trial included collecting fecal, saliva, and blood samples to monitor the animals’ cortisol levels. Cortisol is produced by humans and animals when stressed. The CBD oil will be administered to the elephants orally. The zookeepers will measure their cortisol levels to see whether the CBD is working to reduce their levels.

While there are CBD products marketed for animals, there are no comprehensive studies showing efficacy for the cannabis-derived compound related to animals and stress.

ABOUT THE AUTHOR

Morgan Davis

Morgan Davis

Founder, Davis Legal, PLLC

Morgan Davis is the founder of Davis Legal, PLLC, a boutique business law firm with a focus in cannabis serving clients in Raleigh, NC. Davis is an experienced attorney whose practice focuses on matters of criminal and corporate law. Davis has become a subject matter expert in cannabis and routinely provides legal counsel to cannabis cultivators, processors, retailers, investors, and retail product manufacturers.

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