On June 1st, 2021, Dave Clark, Amazon’s CEO Worldwide Consumer, announced the company’s new corporate drug testing policies. The global conglomerate’s modified policies are part of Jeff Bezos’ “Earth’s Best Employer and Earth’s Safest Place to Work” initiative to improve Amazon’s working conditions.
The Next Risk Inherent Cannabinoid: THC-O-acetate
As the hemp industry continues with the delta-8 THC craze, another minor cannabinoid is beginning to see market prevalence. THC-O-acetate, commonly referred to as THC-O or ATHC, has also been referred to as the “spiritual cannabinoid,” with some users likening the effect to psilocybin when ingested. Currently, there is a dearth of clinical research regarding efficacy, dosage, and benefits of THC-O.
A Recap of the Establishment of the United States Domestic Hemp Production Program
The United States’ hemp industry is a constant work-in-progress; however, the country has made significant strides in establishing a domestic hemp production program. The United States Department of Agriculture (“USDA”) recently released its final rule, which has been long-awaited by the hemp community. Read below for a recap of recent progress as a reminder to continue putting forth effort and energy toward uniform cannabis legislation in the United States.
CBD-Infused Alcohol: Still Awaiting a Toast
Breweries, distilleries, and wineries with ambitions of infusing or selling their beverages with cannabidiol (“CBD”) and/or tetrahydrocannabinol (“THC”) derived from hemp will have to wait for a change in law by the U.S. Alcohol and Tobacco Tax and Trade Bureau (“TTB”), or a divergent conclusion by the United States Food and Drug Administration (“FDA”) finding that these beverages fall into a legal exemption. On April 25, 2019, the TTB, which regulates the alcohol and tobacco industries in the United States, issued an industry circular as a response to numerous inquiries from the alcohol and hemp/CBD industries about whether CBD or THC can legally be introduced into alcoholic beverages: the TTB made it clear that, at this time, it will not approve formula or label applications for alcoholic beverages containing CBD or THC.
The Final Rule: The USDA’s Establishment of a Domestic Hemp Production Program
On January 19, 2021, the United States Department of Agriculture (USDA) put forth a final rule to concretely establish a domestic hemp production program. This final rule becomes effective on March 22, 2021, and puts forth structured rules, regulations, and guidelines regarding the production of hemp nationwide. The USDA’s final rule is a provisional response to the Agriculture Improvement Act of 2018 (the 2018 Farm Bill), which permitted states and tribal nations to participate in hemp production programs and removed hemp from the Controlled Substances Act’s (CSA) definition of marijuana. Until the issuance of this final ruling, the USDA had previously only released an interim final rule, which was open to public comments and suggested revisions. Below, we break down the distinguishing and notable provisions the USDA incorporated into this new framework.
How to Open a Dispensary in Texas
Although Texas has a medical marijuana program, as established by the Texas Compassionate Use Act in 2015, only three “Dispensing Organizations” have been granted licenses by the Texas Department of Safety (“DPS”) to cultivate, process, and dispense low-THC cannabis (up to a 0.5 percent THC limit as of the date of this blog) in Texas to prescribed patients. See 37 Tex. Admin. Code § 12.1. Texas is a vertically integrated state, meaning that the Dispensing Organization must cultivate, process, package, and dispense the medical marijuana.
The Growing Market of Smokable Hemp and Its Legal Obstacles
The Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) established that hemp is to be treated similarly to other legal agricultural commodities and traded in standard interstate commerce as a raw material. However, the 2018 Farm Bill governs only state production programs and specifically permits states to enact more stringent regulations than those contained in the Bill. As a result, legal hemp has facilitated the emergence of a wide array of consumer products and uses. Specifically, smokable hemp has made a significant presence in the cannabis and hemp markets and continues to grow despite the increasing legality of other forms of cannabis that often include higher concentrations of tetrahydrocannabinol (“THC”). Below, we discuss the smokable hemp industry and the legal challenges it faces as it comes to fruition.
Ritter Spencer Files Lawsuit Challenging Smokable Hemp Bans in Texas
Yesterday, our office filed a lawsuit against the Texas Department of State Health Services (“DSHS”) on behalf of our client, Crown Distributing LLC (“Crown”), challenging the smokable hemp bans in Texas. A copy of our filed Petition can be accessed here.
Financial Due Diligence for Hemp-Related Businesses: Banking Update
In June of 2020, the Financial Crimes Enforcement Network (“FinCEN”) issued updated guidance regarding the Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) regulations for hemp-related business consumers. Financial institutions must do their due diligence for customers, but especially for hemp-related businesses, as the legalities and recommended practices are continually changing. Additionally, the National Credit Union Administration (“NCUA”) recently put forth further guidance for credit unions serving hemp-related businesses. As the hemp industry continues to progress, the banking industry is actively organizing their expectations and guidelines to keep up and simplify hemp-related interactions. Below, we summarize each of these resources to give you the straightforward essentials.
What Are the Next Big Cannabinoids?
The booming cannabidiol (CBD) industry is expanding at a rapid rate and shows no signs of slowing down. The legal cannabis industry also continues to make new strides, as cannabis advocates, reform groups, lobbyists, and lawyers remain active in legislative efforts. As time progresses, more states are adapting and adjusting their respective policies. Cannabis and hemp products, including those which contain hemp-derived CBD, are becoming less taboo and these products are now more legally accessible than ever before.