Presented by the National Cannabis Roundtable
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— The recent outbreak of vaping-related illnesses and deaths is heightening concerns about the deluge of unregulated CBD products. Federal agencies are wrestling with how to create rules for the burgeoning market.
— Whispers of marijuana vaping are starting to circle the halls of Congress, as two lawmakers this week told Wikileaf’s Matt Laslo they would like to see the federal action against e-cigarettes extend to marijuana in some way.
— Utah’s Senate voted to scrap a plan to have state-run medical cannabis distributors. The proposal was a first for a U.S. state but ran into criticisms due to federal drug laws.
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GLUT OF UNREGULATED CBD PRODUCTS RAISES CONCERNS — The recent spate of vaping-related illnesses and deaths is a cautionary tale for what can happen if regulations aren’t put in place to ensure that products are safe and accurately labeled. Could the glut of unregulated CBD products flooding the country be another public health scare waiting to happen?
The legalization of hemp under the 2018 farm bill, and the resulting barrage of CBD products — being used to treat everything from anxiety to cancer — is creating unease given increasing evidence that many contain ingredients other than what’s being advertised.
Multiple agencies are wrestling with how to quickly create a framework for states to establish hemp farming programs and how to regulate the flood of CBD products that are derived from the plant.
“There’s a lot of data collection that CBD and hemp is arguably bigger than marijuana when it comes to economic opportunity,” said Taite McDonald, an attorney with Holland & Knight who’s closely tracking the regulatory process. “Everyone in the world is moving to this.”
The regulatory process is somewhat of a black box. But the primary agencies struggling with how to respond — the USDA and FDA — have indicated where they’re headed.
What is the USDA doing? The USDA is under pressure to release guidance in time for farmers to plant hemp crops for next year. The agency already has provided direction on importing hemp seeds, transporting the plant across state lines and signing up for crop insurance. An interim final rule laying out what states need to do to establish compliant programs under the 2018 farm bill has been pending at OMB since June and could be released any day now.
What is the FDA doing? The FDA regulatory process for CBD products is less clear cut. The agency released a press release last December stressing that it’s still illegal to market food or dietary supplements containing CBD.
The agency also held a day-long public meeting in May to solicit feedback from the public about the correct approach to regulating the products and received more than 4,000 comments. In addition, the agency put companies on notice that it’s monitoring the space closely with a July warning letter to Curaleaf — one of the country’s largest cannabis companies — detailing concerns about various medical claims that it was making about its CBD products.
FDA has promised an update sometime in the fall. But whether the agency will propose a more detailed regulatory framework — or exactly when that might happen — remains a mystery. That’s despite increasing pressure on the agency from lawmakers to take further action.
“We’re in this limbo period,” said Jonathan Havens, co-chair of Saul Ewing Arnstein & Lehr’s cannabis law practice and a former FDA attorney. “It could be any day, or it could be years from now — if ever.”
BANKING ASSOCIATIONS ASK HOUSE LEADERSHIP TO BRING CANNABIS MEASURE TO FLOOR — The Independent Community Bankers of America sent a letter Monday urging Republican and Democratic leaders to schedule floor time for cannabis banking. It points to businesses related to the cannabis industry that may also face banking problems such as landlords, accountants and utilities providers.
“These ancillary businesses may be difficult to identify in states that have legalized cannabis,” the letter says. “And potentially create a legal and regulatory conundrum for even those banks that choose not to serve [cannabis related businesses] directly.”
Why is this important? Cannabis banking often is seen as something that would predominantly benefit large corporations. But the missive from a group of 40-plus small and independent banks sends a message that the smaller players want this legislation too.
FEDERAL MURMURS OF BANNING THC VAPE PRODUCTS — Wikileaf’s Matt Laslo reports that Sen. Catherine Cortez Masto (D-Nev.) and Rep. Rosa DeLauro (D-Conn.) are both advocating for an additional crackdown on THC vaping products, which until now have largely been left out of the conversation surrounding lung illness linked to e-cigarettes. “Yeah, I want [a ban on THC vaping products],” DeLauro told Wikileaf. “I think they are a real danger to people. Real danger.” POLITICO reached out to both lawmakers but could not confirm their positions or how they propose to institute the ban when marijuana is already illegal under federal law.
Speaking of vaping, more states where marijuana is legal are moving on vaping, but only nicotine-based products, not THC-based e-cigs:
— In New Jersey, POLITICO’s Sam Sutton reports that Sen. Bob Menendez (D-N.J.) has called for a moratorium on the sale of e-cigarettes and other products, but not of marijuana vaping products. Of the state’s three confirmed cases of lung disease related to vaping, none have been linked to legal medical marijuaan dispensaries.
— And in California, POLITICO’s Angela Hart reports that Gov. Gavin Newsom on Monday called for legislation that would ban all flavored e-cigarettes. However, the governor has not addressed marijuana in his calls for greater e-cigarette regulation, despite at least one death in the state being linked to marijuana vaping.
Why is this important? As long as marijuana remains federally illegal, monitoring legal and illicit marijuana in legal states falls to state governments, and many of those governments are not addressing marijuana.
MEDICAL MARIJUANA AT SCHOOL — The Education Department “expects” schools to follow all applicable federal laws, including for marijuana, which remains classified as a highly dangerous illegal drug. And yet, several states have passed legislation allowing students to use medical cannabis at school, POLITICO’s Nicole Gaudiano reports. Delaware, Maine, Washington and New Jersey allow parents, guardians or primary caregivers to administer medical cannabis on school grounds to qualifying students. Illinois, Colorado and Virginia laws go further and allow school health officials to administer medical cannabis. New Mexico and Florida allow medical marijuana at schools but leave different elements of implementation to local school officials.
— States with pending legislation to allow students to use medical cannabis on school grounds include New York and California, where a bill awaits the governor’s signature.
— An appropriations rider first enacted in 2014 has protected states with laws permitting medical cannabis from federal interference. But “concerns about federal law have led to complications in integrating medical cannabis in schools,” said Violet Cavendish, Marijuana Policy Project’s spokesperson. “Some state laws include provisions that allow for schools to not comply with laws that allow for medical cannabis use on school grounds if it is demonstrated that compliance will result in losing federal funding.”
— An Education Department spokesperson didn’t respond to questions about the department’s position on federal funding or potential consequences for K-12 schools allowing medical marijuana use in states where it’s legal. Perkins Coie attorneys Emily Bushaw and Kathryn Ranieri, based in Seattle, wrote recently that Washington state’s new law “may get schools in hot water with federal funding requirements and the Drug-Free Schools and Workplace Act.”
— But Cavendish said her organization isn’t aware of the federal government taking action against schools with “compassionate policies” on medical marijuana. “Likewise, we are not aware of any schools losing grants or funding for allowing medical cannabis,” she wrote.
NY HEMP FARMERS: MORE REGULATIONS, PLEASE — The state’s hemp farmers are pushing for the state legislature to pass a hemp regulatory bill, POLITICO New York’s Nick Niedzwiadek reports. Upstate New York has become a hub for cultivators, including a 2,000-acre site by one of Canada’s largest marijuana producers. The bill would allow state agriculture regulators to license hemp businesses and create production standars. Hemp farmers say a regulatory framework would make their crops more attractive to processors who extract oils for CBD or use the plant for other purposes like textiles or building materials.
Why this is important: After Congress removed hemp from federal drug laws in the 2018 farm bill, the hemp and CBD industry has flourished with little regulatory oversight. While federal agencies have promised to release rules for the 2020 growing season, the existing hemp market has been in a regulatory limbo. Hemp farmers say the New York bill would create consumer protections and help them stay competitive with bad actors.
UTAH CONSIDERS MEDICAL MARIJUANA DURING SPECIAL SESSION — Utah senators voted 27 to 0, with two absences, to approve changes to the state’s medical cannabis program during a special legislative session Monday night. The bill proposes getting rid of the state-run medical cannabis distribution system after prosecutors raised concerns that it would effectively make government employees drug dealers under federal law. The new legislation, sponsored by state Sen. Evan Vickers, would license 14 private cannabis pharmacies. Eight would be licensed by March 2020 and another six would be licensed by July.
Why is this important? Uruguay, the first country to legalize recreational marijuana, has a state monopoly on the marijuana market, as do some Canadian provinces. No U.S. state has experimented with government-run cannabis sales before Utah passed its medical marijuana law in December 2018 — a controversial piece of legislation that replaced a voter-approved ballot initiative. The original law would have the health department license medical cannabis pharmacies along with distributing medical cannabis through county health departments. Drug policy researchers have found that state-run monopolies can minimize the public health harms of legal marijuana.
Canadian cannabis regulators have suspended the licenses of British Columbia-based Evergreen Medicinal Supply over compliance issues. It’s the second marijuana producer in the country to be sanctioned by Health Canada for noncompliance.
Health officials in Paraguay will soon begin licensing cannabis producers for its medical marijuana program. The government established a medical marijuana program in 2017 and also allows children with severe epilepsy to import cannabis-based drugs in certain cases.
U.K. patients are criticizing a two-tiered medical marijuana system that caters to the well-off. Those with means can obtain a prescription from a private clinic that could cost more than £1,000 a month, while others are forced into the illicit market, risking prosecution. “So, because I am poor, I am forced to become a criminal. How is this fair?” said one MS patient.
Lee Applbaum and Philippa Classey have joined cannabis company Surterra Wellness as chief marketing officer and managing director, Europe, respectively. Applbaum previously served as the chief marketing officer for Patrón Tequila and Grey Goose Vodka. Classey was previously the chief marketing officer for Harmless Harvest, a brand of coconut beverages.
— A patchwork of state marijuana laws has led to some interesting marketing efforts: While Massachusetts regulators have strict rules on marijuana ads, they do not ban advertising out of state (where the drug might be illegal).
— Without EPA regulations on marijuana pesticides, states are left to their own devices when coming up with cannabis cultivation rules. But state regulators have little data to determine standards for the crop.
— A Colorado hemp company has offered to settle a case with the Idaho State Police if the agency returns $1.3 million in hemp that it seized in a marijuana trafficking case. The company just wants its hemp back and to continue “shipping its lawful product through Idaho in interstate commerce.”