DEA Supports Rescheduling

Anti-rescheduling groups are likening the DEA rescheduling to the 1919 Chicago White Sox . . . . the fix is in. These groups believe the decision is already made and everything now is just theatre.

On June 29^th the DEA held a hearing on rescheduling. James J. Schwartz, an attorney in the Diversion Section of the DEA’s Office of Chief Counsel said “The government is here today as the proponent of the proposed rule signed by a previous attorney general recommending the movement of marijuana from a Schedule I to Schedule III controlled substances. In support of the proposed rule, the government is providing two witnesses to assist the tribunal: a scientist and a practitioner.” Schwartz made clear that the hearing is not about two things: It’s not about recreational cannabis use, and it’s not about legalization.

South Carolina House Fails to Pass THC Beverage Regulation

“Never approach a bull from the front, a horse from the rear, or a fool from any direction.” South Carolina remains the wild wild west. This was not a resolution to open THC beverages up. Hemp THC is currently allowed and unrestricted in South Carolina. This was an attempt to put reasonable rules in place that would, hopefully, survive should Hemp THC survive federally in November.

On June 25^th the South Carolina House failed to pass a state senate bill to restrict THC hemp beverages. The Senate bill would have created age gating (21+), placed the products in liquor licensed accounts only, created potency caps and required label testing. For now, South Carolina Hemp Beverages remain unrestricted. The state is the wild west.

Ohio THC Beverages get a brief lifeline

“Temporary solutions often become permanent problems.” On June 19^th an Ohio judge kicked the can down the road and, yes, that can had 5mg Hemp derived THC in it. The judged placed a temporary restraining order against an Ohio law banning the manufacturing and sale of THC Hemp products. The restraining order was expected to expire on June 29^th but was extended until July 13 at which time a ruling will occur that make the restraining order a permanent injunction or will lift it, letting the ban stand while the cases move their way through the Ohio courts.

Tennessee THCA ban began on July 1^st

Tennessean is Tennebelieven, especially when it comes to tax collection. An interesting law went into effect in Tennessee, one of the country’s largest hemp producing states. THCA is the precursor to Delta-9 THC. This is primarily a restriction on high potency products (think vapes). Beverages are still legal with a cap of 15mg per serving. One interesting side note of this law: Ordering, shipping or delivering THCA products to a consumer is completely banned within the state. By outlawing shipments by sellers within the state, the absolutely have blocked shipments from out of state. Other states have attempted (with hemp and other regulated products like wine) to distinguish between in-state and out-of-state shipments to consumers. This has often fallen afoul of the federal commerce clause. By refusing any type of delivery, Tennessee has established in person purchases only and, therefore, 100% of hemp THC taxes will remain with the state.

On Thursday, June 19th Nebraska held a public meeting about proposed state regulations that would make food and beverages products illegal if they contained any amount of THC. Hemp industry retailers, businesses and consumers pushed back. Although this has happened in many states, the largest complaint (and maybe the only ground they have) is that zero tolerance is actually lower than the industry is facing at a federal level that caps hemp THC a 0.4 milligrams per container.

The rules follow an executive ordered issued by Governor Jim Pillen back in January to review local laws governing synthetic THC in food and beverages.

15 people testified at the hearing outlining many alternatives to regulation and highlighting the tax revenue (over $1 million) that has already been collected by the state. The Nebraska Department of Agriculture will review the testimony and written comments. If nothing is changed it will go to the AG’s office and then the Governor. I do not believe a vote has to occur to make this active.

It does not effect food and beverage in the state’s medical cannabis program.

A federal judge gave 10 companies that sell the hemp-derived THC products a temporary restraining order on June 15, blocking Ohio enforcement from “taking any criminal, civil, administrative or regulatory enforcement action” against them for at least two weeks, so long as their activities fall within the federal parameters of the 2018 Farm Bill (at least as it stands today – not in November)

Small victories are worth celebrating, but this is a very small one. It is only a 14 day hold, although it may be longer. The lawsuit argued that Senate Bill 56, which Gov. Mike DeWine signed in December, violates the U.S. Constitution because of its “discriminatory effect on interstate commerce.” Interstate commerce is something that has been batted about in the alcohol industry when it comes to shipping wine (you can’t let instate wineries ship to consumers but exclude out of state wineries). It is a tough argument when it comes to regulated products because the federal government often grants state’s the rights to do what they want when it comes to public health and safety. The issue here may be that hemp THC under the 2018 farm bill is not a regulated product. This will certainly change one way or another this November.