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MARIJUANA MOMENT

MARIJUANA AND HEMP BUSINESSES AT ODDS OVER CONSUMABLE CANNABINOID BAN IN HOUSE
FARM BILL


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POLITICS


MARIJUANA AND HEMP BUSINESSES AT ODDS OVER CONSUMABLE CANNABINOID BAN IN HOUSE
FARM BILL

Published

3 seconds ago

on

May 31, 2024

By

Kyle Jaeger

When a House committee approved an amendment to a large-scale agriculture bill
last week that would effectively ban most consumable hemp products, it was met
with an atypically mixed response from the cannabis industry. Even within trade
associations that supported the amendment to the 2024 Farm Bill, such as the
U.S. Cannabis Council (USCC), there’s been internal splintering.

Multi-state cannabis operators like Cresco Labs and Curaleaf—both members of
USCC that typically find themselves aligned on federal reform issues—are at odds
over the hemp amendment, for example.

Everyone generally seems to agree that marijuana and hemp should be regulated
under a federal framework, but there’s disagreement over the measure adopted by
the House Agriculture Committee, which calls for a ban on intoxicating
hemp-derived cannabinoid products such as delta-8 THC and CBD products
containing any quantifiable amount of THC.

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Supporters of the amendment have described it as a fix to a “loophole” in the
2018 Farm Bill that federally legalized hemp and its constituents. Others have
recognized the need to adopt regulations to reign in the cannabinoid market but
say re-prohibiting cannabinoids is not the solution.

“Our position is, it’s the same plant and should be regulated the same way,
period,” Jason Erkes, chief communications officer at Cresco Labs, told
Marijuana Moment last week. “Especially when it comes to the synthetic products
that aren’t tested and you don’t know where they came from and, inherently in
the past, they’ve been dangerous.”



Erkes acknowledged that “there is a monetary aspect as well,” pointing to the
high licensing, security, testing and tax burdens that state-legal marijuana
businesses face, compared to certain hemp businesses that are selling
intoxicating cannabinoid products without having to jump through those hoops.

“Here are these businesses that pop up—in many cases, they call themselves the
same thing. It’ll say ‘cannabis dispensary’ on their door on the same street as
a regulated dispensary where there’s no security, no safety, no lab-testing, and
they don’t pay any taxes.”



There’s agreement about the need to resolve the problem. But the hemp industry
and certain marijuana companies feel the amendment adopted in committee last
week goes too far. If the agreed-upon solution is regulation, why start that
conversation with prohibition?

“It’s too far. And it’s not going to address the consumer safety issue,” Shawn
Hauser, a partner at the cannabis- and psychedelics-focus law firm Vicente LLP,
told Marijuana Moment. We need to have a real discussion about legalizing and
regulating the whole plant.”

“What we really need is stakeholders to come together—which as divisive as
things are right now, hopefully that’s the result,” she said. “But it’s
incumbent on Congress to give us a federal regulatory framework.”

Hauser serves on the board of USCC, which supported the amendment and even
offered draft language that’s consistent with the measure that was adopted. But
she’s not the only board member who’s come out against the amendment.



Boris Jordan of Curaleaf, another USCC member, said officials at his company
“disagree” with the proposal, calling it “an attempt to roll back the Farm
Bill.”

“We support hemp farmers, and we believe that hemp-derived products made within
the guidelines of the Farm Bill should be available to adults with strict age
gating and safety standards,” he said. “We believe there should be one
regulatory framework for all cannabinoids, and that all legal players in the
hemp-derived product market must adhere to the same safety and age restrictive
standards in order to combat the dangers of the illicit market–just as in
cannabis.”



The company’s position against the specific amendment may be partly informed by
its recent entrance into the consumable hemp market, with a line of infused
drinks that would likely be impacted by the proposed ban.

Again, there’s general consensus around the need for a regulatory framework. But
in another example of the internal divide over the appropriateness of a stopgap
hemp cannabinoid ban, the multi-state operator The Cannabist Company—which is
also on the board of USCC—is backing the controversial amendment.



“The Cannabist Company strongly supports efforts to regulate intoxicating hemp
products. Far too many unregulated, untested hemp-derived products are being
sold in gas stations and bodegas across our nation, confusing consumers and
providing access to teens,” Adam Goers, senior vice president of corporate
affairs, told Marijuana Moment.

“We support legislative remedies that close the loophole and ensure that
intoxicating products undergo rigorous testing, accurate labeling and strict age
restrictions,” he said. “This is a matter of protecting public health and safety
and it’s far past time that hemp-derived products be held to the same safety and
regulatory standards as those within state-licensed cannabis programs.”



David Culver, USCC’s senior vice president of public affairs, told Marijuana
Moment on Friday that “we all have the same goal, which is regulatory parity
between cannabis and intoxicating hemp.”

“Not surprisingly, there are some differences of opinion over the best path for
getting there, but we continue to advance toward that shared goal,” he said.

Aaron Smith, executive director of the National Cannabis Industry Association
(NCIA), a separate industry trade group, told Marijuana Moment the amendment is
“short-sighted because, for one, these products are here to stay, so it’s either
regulate them or we’re going see them just go into a criminal market.”



“Yet I understand this is an unacceptable situation that we have unregulated
products that are being sold alongside the regulated industry. We’re just saying
that the solution isn’t prohibition,” he said. “The solution is regulations that
apply equally to marijuana and hemp-derived cannabinoid products.”

Another cannabis association that did support the passage of the Farm Bill
amendment is the American Trade Association of Cannabis and Hemp (ATACH), though
its president Michael Bronstein said it should serve as a “wake up call” for
Congress to enact comprehensive regulations.

“The Farm Bill, which is authorized every five years, is an imperfect vehicle
for meaningful legalization and going forward the call must be for sensible
regulation,” he said.

But in the interim, if the hemp-based cannabinoid ban is ultimately implemented,
it would threaten an already vulnerable industry that has endured precarious
economic conditions over the past six years. While people who support the
amendment have focused on unregulated, intoxicating products that are sold at
gas stations without age-gating, the way it’s drafted would likely spell doom
for the expansive CBD market as well, affecting legitimate hemp businesses.



Wine & Spirits Wholesalers of America (WSWA) Executive Vice President of
Government Affairs Dawson Hobbs said the “attempt to ban intoxicating hemp
products is merely doubling down on the failed federal policy of prohibition.”





“The right path is to empower states to regulate these intoxicating hemp
products and create a process to protect public safety by identifying naturally
occurring cannabinoids and eliminating synthetic derivatives,” they said.

Meanwhile, the legislation that advanced through the House Agriculture Committee
last week also contains provisions that would reduce regulatory barriers for
certain hemp farmers and scale-back a ban on industry participation by people
with prior drug felony convictions.

Specifically, it would make it so the U.S. Department of Agriculture (USDA),
states and tribal entities could choose to eliminate a policy that prevents
people with felony drug convictions in the past 10 years from being licensed to
produce industrial hemp.

However, advocates had hoped to see more expansive language, such as what was
described in Senate Democrats’ recent summary of their forthcoming Farm Bill
draft. Under that plan, there would be a mandate to eliminate the ban, rather
than simply authorizing it, and it would cover all hemp producers, not just
those growing it for non-extraction purposes.



That said, the Senate Agriculture Committee has not yet released the draft text
of their bill, so it remains to be seen if the summary description matches what
will ultimately be released. Bipartisan House lawmakers filed standalone
legislation last year that would broadly lift the felony ban for would-be hemp
producers.

Lawmakers and stakeholders have also been eyeing a number of other proposals
that could be incorporated into the Farm Bill—and which could come up as
proposed amendments as the proposal moves through the legislative
process—including measures to free up hemp businesses to legally market products
like CBD as dietary supplements or in the food supply.

—
Marijuana Moment is tracking more than 1,500 cannabis, psychedelics and drug
policy bills in state legislatures and Congress this year. Patreon supporters
pledging at least $25/month get access to our interactive maps, charts and
hearing calendar so they don’t miss any developments.

Learn more about our marijuana bill tracker and become a supporter on Patreon to
get access.
—



Meanwhile, the hemp market started to rebound in 2023 after suffering
significant losses the prior year, the latest annual industry report from the
U.S. Department of Agriculture (USDA) that was released last month found.

The data is the result of a survey that USDA mailed to thousands of hemp
farmers across the U.S. in January. The first version of the department’s hemp
report was released in early 2022, setting a “benchmark” to compare to as the
industry matures.

Bipartisan lawmakers and industry stakeholders have sharply criticized FDA for
declining to enact regulations for hemp-derived CBD, which they say is largely
responsible for the economic stagnation.

To that end, FDA Commissioner Robert Califf testified before the House Oversight
and Accountability Committee last month, where he faced questions about the
agency’s position that it needed additional congressional authorization to
regulate the non-intoxicating cannabinoid.

USDA is also reportedly revoking hemp licenses for farmers who are
simultaneously growing marijuana under state-approved programs, underscoring yet
another policy conflict stemming from the ongoing federal prohibition of some
forms of the cannabis plant.

For the time being, the hemp industry continues to face unique regulatory
hurdles that stakeholders blame for the crop’s value plummeting in the short
years since its legalization. Despite the economic conditions, however, a recent
report found that the hemp market in 2022 was larger than all state marijuana
markets, and it roughly equaled sales for craft beer nationally.



Meanwhile, internally at USDA, food safety workers are being encouraged to
exercise caution and avoid cannabis products, including federally legal CBD, as
the agency observes an “uptick” in positive THC tests amid “confusion” as more
states enact legalization.

> Biden Finally Acknowledges His Marijuana Pardons Did Not Expunge Records After
> Repeatedly Claiming They Did



Photo courtesy of Pixabay.

Marijuana Moment is made possible with support from readers. If you rely on our
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Kyle Jaeger


Kyle Jaeger is Marijuana Moment's Sacramento-based managing editor. His work has
also appeared in High Times, VICE and attn.



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