Cannabis regulatory lawyersIn December 2016, the DEA issued a rule defining “Marihuana Extracts” to include extracts “containing one or more cannabinoids from any plant of the genus Cannabis.” This rule went into effect on January 13, 2017. That same day, The Hemp Industry Association, Centuria Natural Foods Inc., and RMH Holdings LLC filed a petition with the US Court of Appeals for the Ninth Circuit challenging that DEA rule.

The Controlled Substances Act is a federal law that determines what substances are illegal drugs. Congress authorized the Department of Justice to add and remove substances to the Controlled Substances Act (CSA), and the DOJ has delegated that authority to the DEA. The DEA promulgated the “Marihuana Extract” rule pursuant to that grant of authority, meaning that products the DEA defines as fitting the “Marihuana Extract” definition are illegal substances.

Rules can have a similar effect as laws but if a rule conflicts with a law, the law will prevail. In other words, Congressional laws that conflict with a DEA rule should outweigh the DEA rules. The Petitioners who are appealing the DEA rule are arguing that the “Marihuana Extract” rule outlaws parts of the cannabis plant that Congress specifically made legal in the CSA and in the 2014 Farm Bill.

Congress placed marijuana on Schedule I of the CSA and defined it to include all parts of the plant Cannabis sativa L., except the mature stalks of the plant and seeds incapable of germination. Stalks and products derived from those stalks are not illegal because they are not marijuana. This distinction allowed for legal production of hemp products even though marijuana remains federally illegal. The 2014 Farm Bill also allows states to implement programs to legally grow industrial hemp. “Industrial hemp” is defined to mean “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”

Prior to the “Marihuana Extract” rule, only one cannabinoid was explicitly named in Schedule I of the CSA: THC which is known for causing marijuana’s euphoric “high.” Other cannabinoids, like CBD, were not specifically prohibited. This meant products derived from mature stalks of cannabis that did not contain THC were arguably legal as no part of that product was prohibited by the CSA. Now those same products are illegal because they contain other cannabinoids that are now defined as controlled substances according to the “Marihuana Extract” definition. The definition also applies to industrial hemp grown pursuant to the Farm Bill. The Petitioners who are appealing to the Ninth Circuit argue that the DEA’s rule is inconsistent with the CSA and the Farm Bill and that the court should therefore find the rule invalid.

Petitioners also argue that the DEA failed to comply with the Administrative Procedure Act in creating this rule. In addition to complying with the CSA, the DEA must also follow the Administrative Procedure Act, which essentially sets forth the procedures governmental bodies must follow in enacting new rules. The Petitioners argue that under the APA the “Marihuana Extract” rule invalid as it:

  • Is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with other law (such as the Farm Bill and the CSA);
  • Is unconstitutional;
  • Exceeds the DEA’s statutory authority; and
  • Was created without following necessary procedures.

This is not the first time the DEA has faced legal challenges for interfering with legal hemp. In 2001-2003 the DEA attempted to treat hemp food products as Schedule I substances because they contained trace amounts of THC. The Ninth Circuit Court of Appeals ruled that the presence of THC does not alone make a product a controlled substance. Petitioners plan to use this ruling to assert that cannabinoids that occur in legal portions of the cannabis plant are not controlled by the CSA and may not be regulated as marijuana by the DEA.

Since the DEA issued this rule my firm’s cannabis regulatory lawyers have received a daily stream of calls from businesses wanting to know whether the CBD products they are producing, selling or buying are now illegal. Specifically, most of these callers want to know whether products containing CBD that are derived from hemp and do not contain THC are still legal. At this point, the jury (or really the judge) is still out and we — like everyone else — will be waiting to see how the courts rule.

Barcelona lawyersOur Barcelona lawyers have lately been receiving a steady stream of calls about producing and distributing cannabidiol-based products around the world, from Spain. Cannabidiol  (CBD) is a compound found in cannabis but unlike tetrahydrocannabinol (THC), the compound in cannabis that gives users a high, CBD is non-psychoactive. Studies suggest CBD can be effective in treating epilepsy and other neuropsychiatric disorders including anxiety and schizophrenia. CBD may also be effective in treating post-traumatic stress disorder and may have anxiolytic, antipsychotic, antiemetic and anti-inflammatory properties. With so many potential benefits, it should come as no surprise that our Barcelona attorneys are so often asked about the legality of CBD oil in the European Union?” In short, it depends on what part of the cannabis plant from which the CBD oil was derived.

CBD can be extracted from marijuana plants (cannabis sativa) or from industrial hemp plants. Both are cannabis varieties but grown for a different purpose and with a different “legal personality” reflecting the legal status of extracted CBD oil in the EU. Hemp has been cultivated throughout the world for industrial and medical purposes, and for the production of useful objects such as clothing, candles, paper, and thousands of other products. Hemp oil and hemp seeds also contain many essential nutrients. In Europe and in Spain, hemp must be grown under EU regulations. Industrial hemp must contain no more than 0.2% THC on a dry weight basis. If the EU criteria are met, then a hemp producer may obtain EU certification for the product. Failure to follow protocol can lead to trouble. Local Spanish farmers producing hemp are right now facing criminal charges for crimes against public health for having not fulfilled current regulations in production. This adds uncertainty for foreign investors in finding the right provider of raw material. Medical marijuana contains high levels of THC, concentrated mainly in flowers and trichromes of the plant.

Those wishing to import CBD based products into Spain face labeling requirements. The number of CBD products available on the Spanish market has increased but most consumers are unaware of the exact amount of CBD they should take, or do not know the exact composition of the CBD oil or tincture they are buying. Clear labeling is essential when distributing CBD in Spain. A product’s label should describe the exact concentration of CBD as an active ingredient, the content of the solution, the specified amounts of each ingredient, the manufacturing method used, and the instructions for use and dosage. The label should also refer to a website with more detailed information.

Uncertainty also comes from a recent change in US law. Previously, the legal status of CBD products in the US also turned on the part of the cannabis plant from which the product was extracted. However, the Drug Enforcement Administration recently promulgated a rule creating a new “Controlled Substances Code Number” for “Marihuana Extracts” and extends that classification to extracts “containing one or more cannabinoids from any plant of the genus Cannabis.” CBD is a cannabinoid and hemp is a plant of the genus Cannabis so the rule explicitly applies to CBD products sold in the US. Though we vehemently dislike this new rule, it does mean that companies should not distribute CBD products in the US unless they are doing so pursuant to state law in a state where marijuana is legal in some form.

The Spanish market has an appetite for CBD dietary supplements that is not being met by the many other plant-based dietary products being launched and accepted by the Spanish public. The opportunities for CBD products are clearly there in both the EU and in Spain, but this is a complicated legal arena that calls for caution.

Oregon Cannabis lawsThe 2017 Oregon legislative session begins two weeks from tomorrow, on Wednesday, February 1. Already, there are many proposed bills, measures and resolutions posted on the legislature’s website, ranging from marquee bills to tackle the state budget shortfall and its gun registry loopholes, to resolutions naming an official state horse (the Kiger Mustang) and a dog (the Border Collie). For our faithful readers, there is also a generous helping of cannabis bills. We count 28 of them.

Back in October, we wrote that issues surrounding public consumption, like cannabis cafés and special event (temporary) licenses, would be up for discussion. As shown below, that has proven to be true. We have also written time and again (and again and again) about the need to merge Oregon’s medical and recreational marijuana programs. That appears to be up for serious consideration as well. Finally, we have written about the state’s burgeoning industrial hemp program, which is also addressed.

Below is a compilation of the 28 introduced cannabis bills, sourced from the Oregon legislature’s website. Each bill is linked to its summary page, and you can click through to the text of any proposal of interest. When reading a bill, it’s important to understand that any text in bold letters would be new, while language in [italics and brackets] would be removed from existing law. It’s also important to note that each proposed bill has a specific enactment date: some are “emergency” laws, effective on passage, while others would take effect at a future date. Finally, some of these bills would sunset after a certain period; others are proffered as evergreen.

As in the 2016 short session, many of the bills listed below will fall by the wayside as the senate and house convene and begin to knock heads. Others will be revised, consolidated or otherwise modified, but it is altogether certain that we will see some changes in Oregon cannabis law this session.

Draft Senate Bills

SB 56. Authorizes Oregon Liquor Control Commission to require cannabis-related licensees, certificate holders and applicants for licenses and certificates to submit information related to persons who hold financial interest in business operating or to be operated under license or certificate.

SB 108. Modifies certain definitions for purposes of regulating cannabis. Imposes tax on retail sale of marijuana seeds. Conforms terms throughout statutes governing regulation of cannabis.

SB 130. Waives fees for obtaining a medical marijuana card for veterans who have total disability rating of at least 50 percent as result of injury or illness incurred or aggravated during active military service, and who received discharge or release under other than dishonorable conditions.

SB 300. Establishes Oregon Cannabis Commission to fulfill duties, functions and powers relating to medical use of marijuana. Directs Oregon Health Authority to transfer duties, functions and powers relating to Oregon Medical Marijuana Act to commission. Makes commission operative January 1, 2018.

SB 302. Removes provisions related to marijuana offenses from Uniform Controlled Substances Act. Moves crimes, penalties, defenses to crimes and procedural provisions in Uniform Controlled Substances Act that apply to marijuana offenses to Control and Regulation of Marijuana Act. Adjusts penalties for certain crimes. Makes corresponding changes to statutes referencing controlled substances to clarify applicability to cannabis and cannabis-derived products.

SB 303. Amends, clarifies and creates consistency in statutes setting forth prohibitions and procedures related to minors possessing, purchasing, attempting to purchase or acquiring alcoholic beverages or marijuana items.

SB 304. For purposes of laws regulating cannabis-related businesses, standardizes language with respect to issuing, renewing, suspending, revoking or refusing to issue or renew licenses.

SB 305. Clarifies law requiring notice to Oregon Liquor Control Commission when person licensed by commission to engage in cannabis business is convicted of violation of state law or local ordinance of which possession, delivery or manufacture of marijuana item is element.

SB 306. Repeals provisions regulating marijuana grow sites, marijuana processing sites and medical marijuana dispensaries on June 30, 2018. Updates and creates provisions providing for licensing of marijuana grow sites, marijuana processing sites and medical marijuana dispensaries by Oregon Liquor Control Commission.

SB 307. Provides for regulation by Oregon Liquor Control Commission of consumption and sale of marijuana items at temporary events, including licensure of premises on which temporary events are held. Provides for regulation by commission of consumption of marijuana items at cannabis lounges, including licensure of premises where cannabis lounges are located. Prohibits licensing temporary events or cannabis lounges in cities or counties that have not adopted ordinances allowing for the consumption of marijuana items at temporary events or cannabis lounges. Excepts from prohibitions on public use, including restrictions set forth in Oregon Indoor Clean Air Act, consumption of marijuana items in designated areas of premises for which temporary event or cannabis lounge license has been issued. Applies current law regulating licensed marijuana producers, processors, wholesalers and retailers to new types of licensees. Makes certain exceptions.

SB 308. Establishes Task Force on Social Consumption of Cannabis.

SB 319. Authorizes local governments to allow medical marijuana dispensaries and marijuana retailers licensed by Oregon Liquor Control Commission to be located within certain distance [500 feet] of schools.

SB 342. Clarifies total number of mature marijuana plants and immature marijuana plants and total amount of usable marijuana, medical cannabinoid products, cannabinoid concentrates and cannabinoid extracts that patients and caregivers registered under Oregon Medical Marijuana Act may possess.

SB 570. Creates crime of intentionally administering marijuana item to body of person who is under 18 years of age. Punishes by maximum of 20 years’ imprisonment, $375,000 fine, or both. Creates crime of knowingly administering marijuana item to body of person who is under 18 years of age. Punishes by maximum of 1 year’s imprisonment, $6,250 fine, or both.

Draft House Bills

HB 2151. Allows property tax exemption for food processing machinery and equipment newly acquired by persons engaged in business of producing cannabinoid edibles, alcoholic beverages and alcoholic liquors.

HB 2197. Directs Oregon Liquor Control Commission to enter into agreement with nongovernmental entity that conducts or funds research on cannabis and cannabis-derived products. Specifies terms of agreement. Requires public dissemination of data, information, analysis and findings procured pursuant to research.

HB 2198. Changes name of Oregon Liquor Control Commission to Oregon Liquor and Cannabis Commission. Changes composition of Oregon Liquor and Cannabis Commission by adding commissioners from cannabis retail industry. Specifies that Oregon Health Authority may not register marijuana grow sites, marijuana processing sites and medical marijuana dispensaries. Creates within authority, for purposes of administering Oregon Medical Marijuana Act, Medical Use of Cannabis Board. Becomes operative June 30, 2018. Repeals provisions regulating marijuana grow sites, marijuana processing sites and medical marijuana dispensaries on June 30, 2018. Updates and creates provisions providing for licensing of marijuana grow sites, marijuana processing sites and medical marijuana dispensaries by Oregon Liquor Control Commission. Makes other technical changes to laws regulating cannabis. Creates alternate registry system administered by State Department of Agriculture for growers that produce marijuana for registry identification cardholders. Directs Oregon Liquor and Cannabis Commission to coordinate with department for purpose of regulating marijuana producers.

HB 2199. Eliminates provision indicating that cannabis-related business licenses may be for term other than one year. Qualifies provision providing that cannabis-related business license expires upon death of licensee.

HB 2200. Changes name of Oregon Liquor Control Commission to Oregon Liquor and Cannabis Commission. Changes composition of Oregon Liquor and Cannabis Commission by adding commissioners from cannabis retail industry. Directs commission to coordinate with State Department of Agriculture for purpose of regulating marijuana producers. Makes other technical changes to laws regulating cannabis. Specifies that Oregon Health Authority may not register marijuana grow sites, marijuana processing sites and medical marijuana dispensaries. Repeals provisions regulating marijuana grow sites, marijuana processing sites and medical marijuana dispensaries on June 30, 2018. Updates and creates provisions providing for licensing of marijuana grow sites, marijuana processing sites and medical marijuana dispensaries by Oregon Liquor and Cannabis Commission.

HB 2201. Corrects and conforms definitions for “cannabinoid concentrate” and “cannabinoid extract” in laws regulating cannabis.

HB 2202. Modifies statute under which lien may be imposed against building or premises used to illegally produce, process, sell or use marijuana items.

HB 2203. Changes distribution of moneys collected by Department of Revenue as tax imposed on retail sale of marijuana items.

HB 2204. Changes statutory limitation on local government’s authority to impose local tax or fee on retail sale of marijuana items. Specifies that if electors of city or county approve ordinance imposing tax or fee, governing body of city or county may amend ordinance, without referring amendment to electors, to adjust rate of tax or fee.

HB 2205. Directs State Department of Agriculture to solicit proposals from third party vendors to create for producers of cannabis efficiency standards for energy and water consumption and certification protocols for meeting those standards.

HB 2371. Specifies that, for purposes of statutes regulating seeds, agricultural hemp seed is flower seed. Directs Director of College of Agriculture and dean of College of Agricultural Sciences of Oregon State University to establish program for labeling and certification of agricultural hemp seed.

HB 2372. Establishes Oregon Industrial Hemp Commission.

HB 2556. Restricts sale and delivery of marijuana paraphernalia. Creates violation for unlawful sale or delivery of marijuana paraphernalia. Punishes by maximum of $2,000 fine.

Altogether, the index above seems to support the sentiment that Oregon is committed to getting it right with cannabis. We will continue to offer updates as events unfold. In the meantime, please let us know if you have comments on any of the specific bills listed above, or on the Oregon legislature’s approach to cannabis this session.

Cannabis lawyersWalking home one freezing night in December 2014, I was taken aback to look up and see a storefront with a bright neon sign that read “CBD OIL SOLD HERE” in the window. It was not the “what” of the sign that startled me – CBD oil is, of course, a product with many therapeutic qualities and a wide range of uses – but the “where.” Far from cannabis-friendly Seattle, I was home for the holidays in southwest Missouri, a socially conservative state where attempts to even put medical marijuana on the ballot face fierce opposition. Though only a first-year law student at the time, I knew enough to know something did not add up: CBD is derived from the cannabis plant, and marijuana is illegal under federal — and, in Missouri, state law. Therefore, I thought, CBD is illegal. How were they getting away with this?

As I now know – and as we have explained before – the business in question was relying on an ambiguity in the Federal Controlled Substances Act’s definition of “marijuana.” The Controlled Substances Act does not include in its definition of “marijuana” the plant’s “mature stalks.” Mature stalks are the part of the cannabis plant used to make hemp, which is not prohibited by the Controlled Substances Act either. The stalks also contain CBD oil that can be extracted and used just the same as CBD derived from other parts of the plant. The ambiguity was enlarged with the passage of the 2014 farm bill, which allowed some cultivation of hemp with THC levels below 0.3%. Ergo, CBD oil is not technically illegal – right?

Wrong.

Two days ago, the Drug Enforcement Administration issued regulations that effectively put the kibosh on attempts to dance around the Controlled Substances Act’s definition of “marijuana” when it comes to CBD oil. The new rule creates a new “Controlled Substances Code Number” for “Marihuana Extract” and extends that classification to extracts “containing one or more cannabinoids from any plant of the genus Cannabis.” Because CBD is a cannabinoid and hemp is a plant of the genus Cannabis, the rule explicitly applies to the many CBD products currently being widely sold online and in shops like the one I encountered in Missouri. DEA confirmed as much in response to public comment on its initially proposed rule, stating that “[f]or practical purposes, all extracts that contain CBD will also contain at least small amounts of other cannabinoids. However, if it were possible to produce from the cannabis plant an extract that contained only CBD … such an abstract would fall within the new drug code 7350.” DEA justifies its new rule as necessary to fully comply with the UN Convention on Narcotic Drugs and finds its statutory authority to promulgate the rule in the Controlled Substances Act.

What does this mean for sellers of CBD extracts online or in states with unfriendly cannabis laws? It means the DEA is explicitly saying that it considers your product to be illegal under the Controlled Substances Act along with other illicit cannabis products. It also means that they are enhancing their ability to track CBD and enforce its interpretation of the law.

In truth, CBD merchants were probably always on the wrong side of the gray area in DEA’s eyes because CBD extracts almost necessarily contain other cannabinoids. As DEA stated in its justification: “Although it might be theoretically possible to produce a CBD extract that contains absolutely no amounts of other cannabinoids, the DEA is not aware of any industrially-utilized methods that have achieved this result.” The difference now is that the DEA is officially putting CBD sellers on notice that their businesses are subject to enforcement action.

Though our cannabis lawyers are unhappy with the DEA’s statement, we would be remiss if we did not tell you that you would be wise to heed this warning: selling CBD is illegal.

Cannabis Business LawyersI have a five-year old mastiff and though she’s showing no signs of slowing down, I’m starting to worry about things like her longevity and risk of arthritis. I’ve even begun scoping out products that address aging and pet comfort. I wasn’t shocked to see that the pet store near my house has started carrying pet products that allegedly contain CBD. What does surprise me though is how few states have addressed the issue of pots and pets. The FDA has remained pretty silent on this issue as well.

A couple of years ago, I wrote about pets getting a hold of their owner’s cannabis and the need for better packaging and labeling to prevent this. Since then, there have been a number of stories on pet owners who use hemp-based or medical cannabis products to treat their pets’ various ailments, including seizures and anxiety. But to date, only Nevada has made any real effort to address the issue of cannabis for pets. In March 2015, Nevada State Senator Tick Segerblom proposed Senate Bill 372 which would have allowed veterinarians to issue medical marijuana cards to pets if their owners were Nevada residents and if the vet believed marijuana could treat the pet’s ailments. That bill didn’t pass. In most other medical cannabis legal states, manufacturers and retailers make MMJ products for pets even though there’s no law allowing for or regulating such practices and no standard for vets evaluating cannabis as a medical treatment. All this means that MMJ dosing and quality control standards are at the whims of industry best practices and anecdotal evidence and not much else.

The federal government has been of no help in this arena either. Any product that contains any active THC is considered illegal under the federal Controlled Substances Act so giving Fido a cannabis cookie or cannabis oil is therefore illegal under federal law. But what about hemp-derived CBD? Many pet stores have hemp-based CBD products that do not violate the federal Controlled Substances Act (and can even cross state lines) because they have no active THC. But the FDA has a serious beef with this kind of CBD if its manufacturer makes medical claims about it. The FDA doesn’t consider CBD from hemp to be a supplement exempt from drug testing under the Federal Food, Drug and Cosmetic Act and that means you can’t make any medical claims about the product without first going through FDA-mandated testing. This includes making medical claims about animal treatments.

The FDA has been diligent in pursuing shut downs of hemp-CBD operators, including those pedaling pet CBD. For example, in the first round of cease and desist letters the FDA sent out in February 2015, Canna-Pet, LLC was on the list. In the letter to Canna-Pet, the FDA wrote:

We have determined that your products are drugs as defined by section 201(g)(1)(B) of the Federal Food, Drug, and Cosmetic Act (“the FD&C Act”) [21 U.S.C. § 321(g)(1)(B)], as the products are intended for use in the mitigation, treatment, or prevention of disease in animals.  As discussed below, the products are unapproved new animal drugs and your marketing of them violates the FD&C Act. . . . Statements on your website and product labeling that establish these intended uses of your products include, but are not limited to, the following: From the home page, www.canna-pet.com:
  • FAQs about Canna-Pet™: “We find medical benefits, behavioral benefits, prolonged life, reduced stress, and improved quality of life with our pets.” (http://canna-pet.com/how-to-use/faqs/).
  • Medical Benefits: “We Recommend Canna-Pet™ as a daily food additive for all pets, but especially for those with arthritis, allergies, anxiety or behavior issues, compromised immune systems, diabetes, digestive issues, nausea, chronic pain, cancer, seizures, and those receiving palliative care.” (http://canna-pet.com/how-it-works/the-basics/).
  • Health Benefits of Cannabidiol (CBD) Canna-Pet: “Antitumor, Antiepileptic, Anticancer, Anti-inflammatory, Bone stimulant, Analgesic, Anti-depressant, Antibacterial, Antipsoriatic, Antidiabetic, . . . Anti-nausea, Anti-anxiety, . . . Antipsychotic, . . . Immunosuppressive.” (http://canna-pet.com/how-it-works/phytochemistry-active-compounds/).

Canna-Pet™ MaxCBD Capsules

For pets with extreme issues, who require larger doses of CBD. Most commonly these are pets suffering from seizures, although we often see pets with cancers and aggressive tumors, severe chronic pain, and in end-of-life care using our MaxCBD products.” (https://canna-pet.com/how-it-works/our-products/).

The above referenced products are only intended to be a sampling of the violative products you are currently marketing. Similarly, the above referenced claims are only intended to be a sampling of statements that demonstrate the intended uses of your product.

You should probably think twice before giving pet store CBD to your beloved dog or cat because these products haven’t gone through the gauntlet of FDA testing and are very likely violating federal law as a result. Not to mention that it is difficult to know if these products will be medically effective for your pet.

Kentucky cannabis and hempThis is proving to be a big year for cannabis. As a result, we are ranking the fifty states from worst to best on how they treat cannabis and those who consume it. Each of our State of Cannabis posts will analyze one state and our final post will crown the best state for cannabis. As is always the case, but particularly so with this series, we welcome your comments.

This particular state was one of the hardest to place, and we know its placement may be somewhat controversial. Though this state does not have a workable medical program, it does have fairly lenient criminal laws and is a true leader in industrial hemp. The state of Kentucky comes in at number 15 in our series.

Our previous rankings are as follows: 16. Pennsylvania; 17. Delaware; 18. Michigan; 19. New Hampshire; 20. Ohio; 21. New Jersey; 22. Illinois; 23. Minnesota; 24. New York; 25. Wisconsin; 26. Arizona; 27. West Virginia; 28. Indiana; 29. North Carolina; 30. Utah;  31. South Carolina; 32. Tennessee; 33. North Dakota; 34.Georgia; 35. Louisiana; 36. Mississippi; 37. Nebraska; 38. Missouri; 39. Florida; 40. Arkansas; 41. Montana; 42. Iowa; 43. Virginia; 44. Wyoming; 45. Texas;  46. Kansas;  47. Alabama;  48. Idaho; 49. Oklahoma;  50. South Dakota.

Kentucky

Criminal Penalities. A person possessing under 8 ounces (or one-half pound) of cannabis faces a maximum 45-day jail sentence and fine up to $250. However, a court can place the defendant in a treatment program in lieu of any jail time and may set aside the conviction and we understand that is what generally happens.  Possession of any amount over 8 ounces is evidence of an intent to sell.

Kentucky classifies offenses for selling marijuana by weight of the plant and number of prior offenses:

  • Less than 8 ounces earns up to 1 year in prison and a maximum fine of $500. Any subsequent offenses earn a sentence of 1-5 years in prison and a maximum $10,000 fine.
  • Between 8 ounces and 5 pounds earns a sentence of 1-5 years and a fine of $1,000-$10,000. Any subsequent offense earns a sentence of 5-10 years and a maximum fine of $10,000.
  • The sale of more than5 pounds earns a sentence of 5-10 years and a fine of $1,000-$10,000. Any subsequent offense earns a sentence of 10-20 years in prison.

Hemp. In 2014, we predicted Kentucky would lead the nation in industrial hemp. Kentucky was one of the first states to pass legislation allowing farmers to produce industrial hemp and provide regulations to implement a workable program. Kentucky was also one of the first states to legally obtain hemp seeds. The state had to fight the dreaded DEA in federal court in order to obtain those seeds. The DEA reluctantly allowed Kentucky farmers to plant hemp seeds and the initial crop was a success with plants growing to “shoulder height.“

Kentucky’s Department of Agriculture oversees the industrial hemp program. Farmers must apply to the Department in order to grow hemp. Universities can also apply to research hemp. Kentucky Agriculture Commissioner James Comer expressed his support for the program at a 2015 news conference:

With their investment, jobs have been created, jobs are going to be created, and they’ve signed contracts with family farmers. Hemp equals jobs and true economic growth, which is what we predicted when we launched Senate Bill 50 two years ago.

With support coming from the top, Kentucky hemp is likely to continue to thrive.

Medical marijuana. On April 10, 2014, Kentucky passed SB 124 which allowed physicians to direct patients to use non-psychoactive CBD. The program has flaws (as reported by Marijuana Policy Project) but it isprogress.

In 2016, the Kentucky legislature considered bills to legalize medical marijuana but the legislative session ended without any reform. However, expectations are high that it will happen in 2017. Lawmakers invited members from the community to debate medical marijuana months ago. Kentucky may be seriously considering medical marijuana legalization this year.

Bottomline. Kentucky’s criminal penalties for possession of marijuana are more reasonable than most of the other states we have examined in this series since possession of less than one-half pound of cannabis only faces a 45-day prison sentence, and that is usually not given. Additionally, Kentucky was willing to challenge the DEA to grow hemp. Kentucky falls flat on medical marijuana, but that is expected to change soon. We ranked Kentucky at number 15, higher than many states with strong medical marijuana programs, because it has relatively light criminal penalties and becuase it has shown leadership in moving forward with industrial hemp.

 

 

Cannabis international trade lawyersOn one of my recent trips to my local pet store, I ended up involved in an unexpected and lengthy conversation with the owner about cannabidiol (CBD) pet treats. We’ve written before about the precarious legal status of CBD, but CBD-infused pet products seem to be flying under the radar.

As an initial matter, is CBD legal under federal law? As we’ve noted in previous posts, the answer depends.

Marijuana is a Schedule I controlled substance under the Controlled Substances Act (CSA), and is federally illegal. Therefore, CBD derived from marijuana violates the CSA. The Drug Enforcement Administration has stated that it believes CBD to be a marijuana derivative and, therefore, a Schedule I drug. However, the CSA does not include in its definition of “marijuana” the “mature stalks” or “sterilized seeds” of the plant. The mature stalks and sterilized seeds constitute hemp products, which are not scheduled under the CSA.

Though the DEA has no enforcement authority with respect to hemp products, it does control hemp cultivation. To cultivate hemp in the U.S., you must have a permit from the DEA; the only exception to this is the 2014 Federal Farm Bill, which allows state departments of agriculture, and universities and colleges to cultivate hemp without a permit from the DEA for educational and research purposes. Because of the prohibition on U.S. hemp cultivation without a DEA permit, the hemp products we purchase in the U.S. typically come from hemp imported from overseas.

Therefore, when we’re talking about CBD products for pets, the only way these products can be legal is if they are derived from imported hemp and not from marijuana. However, the process of extracting CBD from hemp is more involved than from high-resin marijuana plants, and “products with heavily processed ‘pure’ CBD derived from industrial hemp lack the full spectrum of aromatic terpenes and other cannabinoids found in high-resin” plants.

A few different scenarios are possible here. Of course, one is that all of the claims made by the manufacturers of these pet products are true. Another is that the quality of CBD, assuming it is produced from imported stalks and sterilized seeds of hemp, is less than it would be if produced from marijuana plants. And yet another scenario is that the importers of the CBD oil used in these products have not been entirely truthful with customs. Verifying the true origin of CBD oil is difficult for customs officials, particularly given how murky federal law is on the subject. Our international trade lawyers  frequently deal with U.S. customs on behalf of our clients, even on clearly legal cannabis products.

Adding another layer of complexity, generally whenever a company makes a medical claim about a product, including a product for pets, that product is classified as a drug. Under the Federal Food, Drug and Cosmetic Act (FDCA) new drugs are not allowed to enter the U.S. market without first being tested by the FDA, unless they meet the definition of a dietary supplement.

However, the FDA does not consider CBD to be a dietary supplement; it considers CBD to be a new drug. And the FDA has issued warning letters to numerous companies making medical claims about their CBD products.

Setting aside the issue of FDA regulation, let’s go back to the issue surrounding the source of CBD oil. What if you happen to live in a state with legal recreational or medical marijuana? Can state-licensed producers and processors make CBD oil for use in pet products? In Washington, marijuana products must be “intended for human use.” And in Colorado, regulations are based on the FDA standards described above. So neither of these states would allow licensed producers or processors to manufacture products for consumption by pets. However, an issue has recently arisen in Oregon, where the regulations are less clear. And Oregon manufacturers have been making edibles for pets that do not appear to be legal, so far without any legal ramifications.

The bottom line here is that regardless of where you live, if you walk into your local pet store (or place an online order) for CBD pet products, there are currently no standards in place to ensure you are getting what you think you have ordered. Even where companies state on the packaging that the products are imported, the legal status of those products is uncertain, as is their true CBD content and medicinal value.

Marijuana LegalizationThis is proving to be a big year for cannabis. As a result, we are ranking the fifty states from worst to best on how they treat cannabis and those who consume it. Each of our State of Cannabis posts will analyze one state and our final post will crown the best state for cannabis. As is always the case, but particularly so with this series, we welcome your comments. We are now reaching the point in our series where the states we are listing are not laughably (or should we say screamingly) bad, nor are they good. They are generally okay in some areas and bad (without being horrible) in others. Today we turn to number 27: West Virginia. Continue Reading State of Cannabis: West Virginia

Marijuana LegalizationThis is proving to be a big year for cannabis. As a result, we are ranking the fifty states from worst to best on how they treat cannabis and those who consume it. Each of our State of Cannabis posts will analyze one state and our final post will crown the best state for cannabis. As is always the case, but particularly so with this series, we welcome your comments. We are now reaching the point in our series where the states we are listing are not laughably (or should we say screamingly) bad, nor are they good. They are generally okay in some areas and bad (without being horrible) in others. Today we turn to number 28: Indiana.

Continue Reading State of Cannabis: Indiana

Tribal CannabisIn December, 2014, the Department of Justice stated it would not prosecute federal laws regulating the growing or selling of marijuana on tribal lands, even in states where cannabis is illegal. Monty Wilkinson, Director for the Executive Office for U.S. Attorneys, authored the statement, and it seemed to give Tribes the opportunity to become cannabis players because of their unique sovereign status. Though the Wilkinson Statement did not constitute a change of laws or a repeal of the federal Controlled Substances Act, most of what it means is that the eight enforcement priorities outlined in Cole Memo, in addition to consultation with tribal leaders, would guide U.S. Attorneys’ enforcement of federal marijuana laws on tribal lands.

However, as noted in Is Tribal Cannabis Still Possible, the Feds, haven’t really taken the Wilkinson Statement to heart when it comes to tribes that (1) have tried to engage in some aspect of the cannabis industry without entering into a compact with the states; and that (2) are not located in states with some form of robustly regulated marijuana laws. Continue Reading Menominee Hemp Lawsuit Goes Up in Smoke