Photo of Daniel Shortt

With a foundation in advocacy for cannabis legalization built through involvement on University of Washington's campus and with the Washington State Liquor and Cannabis Board, Daniel has positioned himself as a fearless advocate for the cannabis industry.

On Thursday, November 30, I’ll be speaking at a presentation hosted by the Seminar Group titled, “The Business of Marijuana in Washington State.” In preparation for this event, I’ve put together a list of materials that I think are vital to understanding the law on hemp-derived CBD (Hemp-CBD). Below is a list of statutes, cases, and other authority that frames the legal status of Hemp-CBD.

industrial hemp cannabisThe Agricultural Act Of 2014 Section 7606 (the 2014 Farm Bill). Any analysis of US policy regarding hemp must the begin with the 2014 Farm Bill. Section 7606 of the 2014 Farm Bill is the starting point of the country’s rapidly expanding Hemp-CBD industry. The 2014 Farm Bill allows states to implement agricultural pilot programs overseeing the cultivation of industrial hemp. Industrial hemp is defined as the cannabis plant with less than .3% THC on a dry weight basis. States that have implemented an agricultural pilot programs are then authorized to issue licenses or permits to individuals and entities who can then cultivate industrial hemp. The 2014 Farm Bill requires a research component. What constitutes research is not defined within the “four corners” of the 2014 Farm Bill. Some states, such as Colorado, Kentucky, and Oregon, have interpreted the 2014 Farm Bill liberally, allowing the commercial sale and distribution of industrial hemp and industrial hemp products, such as hemp-CBD.

Statement of Principles on Industrial Hemp (the Statement). In 2016, the Drug Enforcement Administration (DEA), issued the Statement. The stated goal of this guidance document is to provide clarity as to how federal law applies to activities associated with industrial hemp, grown pursuant to the 2014 Farm Bill. The DEA interpreted the 2014 Farm Bill taken narrowly as the Statement indicates that the general commercial sale of industrial hemp is not permitted except for “marketing research” conducted by institutions of higher education or state departments of agriculture. The DEA also interprets the 2014 Farm Bill to prohibit the interstate transfer of industrial hemp. The DEA has not enforced the Statement robustly. For the most part, the commercial sale of industrial hemp and Hemp-CBD and the interstate transfer of industrial have been unimpeded by the DEA.

The Agricultural Appropriation Act of 2018, Section 537. One of the major reasons that the DEA has not followed up on the Statement, is that Congress has exercised its “power of the purse” to prevent the DEA from using federal funds to prevent the interstate transfer of industrial hemp or the commercial sale of industrial hemp. This was first enacted in 2017 and recently was renewed to run through December 9, 2018.

Hemp Indus. Ass’n v. U.S. Drug Enf’t Admin., 720 Fed. Appx. 886 (9th Cir. 2018). This case, decided by the US Court of Appeals for the Ninth Circuit, was brought by the Hemp Industry Association in response to the DEA’s “marijuana extract rule.”

The rule established a new drug code specifically for marijuana extracts and defined a marijuana extract as any extract containing cannabinoids derived from the cannabis plant. On its face, the rule makes no distinction between industrial hemp and marijuana. Shortly after issuing the rule, the DEA issued a clarifying statement that said that the rule only applied to derivative of marijuana, and that it would not make any extracts that were otherwise legal under US law illegal.

HIA was unsuccessful in the sense that the Ninth Circuit upheld the rule, dismissing the HIA’s challenges on procedural grounds. However, the DEA’s rule was left largely toothless by the time the Court issued its memorandum as the DEA had already walked back the rule through its clarification. Additionally, the Court stated that the 2014 Farm Bill preempted the Controlled Substances Act (CSA), meaning that when the CSA and 2014 Farm Bill conflict, the 2014 Farm Bill prevails. This preemption interpretation does not set precedent, as the memorandum is non-binding. It does, however, give credence to the argument that the 2014 Farm Bill preempts the CSA.

Hemp Farming Act of 2018. The Hemp Farming Act of 2018 was introduced by Senate majority leader Mitch McConnell. Mitch McConnell hails from the state of Kentucky, which has become a major player in industrial hemp. The Hemp Farming Act is much more detailed than the 2014 2014 Farm Bill. It explicitly removes industrial hemp and derivatives from industrial hemp, including CBD, from the CSA. It also provides a more robust regulatory framework’s for states to implement industrial hemp programs.

The Hemp Farming Act was adopted in its entirety in the Senate version of the 2018 Farm Bill. The house version of the 2018 Farm Bill did not include the Hemp Farming Act. Before the 2018 Farm Bill can be enacted into federal law, both houses of Congress must agree on the language of the Bill. Recently, McConnell guaranteed that the hemp provisions included in the Senate Bill would make the final cut. If that’s true, then as early as next year we will see a much more thoughtful (and discernible!) federal policy on industrial hemp.

Earlier this year, the Washington Legislature passed House Bill 2334 (the “Bill”) into law. The Bill allows licensed marijuana producers and processors to use cannabidiol (CBD) from a source not licensed by the Washington State Liquor and Cannabis Board (LCB). The Bill defines a “CBD product” as “any product containing or consisting of cannabidiol” and would permit the use of CBD products from unlicensed sources so long as the CBD product has a THC level of 0.3 percent or less on a dry weight basis and has been lab tested. The Bill essentially allows Washington processors to add CBD from industrial hemp derived in other states into Washington marijuana products.

Washington’s regulated cannabis market is a closed loop that works on the principle that no marijuana comes in and none goes out. Everything sold in a licensed retail store is grown by licensed producer and processed into products like oils and edible by a licensed processor.

cannabis washington lcb marijuana
Start ramping up ahead of December 1.

On October 31, the LCB enacted new regulations in light of the Bill. These new rules impose some additional requirements and restrictions with regards to CBD derived from sources outside of Washington’s framework. The LCB will not allow the addition of CBD to useable marijuana flower. That means CBD additives will be limited to edibles, oils, tinctures, and other products that are derived from marijuana. Licensees will have to enter CBD products into the LCB’s traceability system, keep the records up-to-date, and the additives labeled. And licensees must also keep CBD additives quarantined from other marijuana until the CBD additives have gone through lab testing.

The LCB already requires that all marijuana and marijuana products undergo lab testing. WAC 314-55-102. CBD additives will go through additional testing under these new regulations. CBD additives that do not pass testing cannot be added to marijuana products.

In addition to the THC threshold, outside CBD must be tested for contaminants and toxins by the same accredited labs that test other marijuana and marijuana products in Washington. Licensees must submit samples of CBD additives to accredited labs. The samples must be representative of the entire product and must be one percent of the product as packaged by the manufacturer but no less that two grams. The samples must be collected in a sanitary manner, meaning the person collecting the samples must wash her hands, wear gloves, and use sanitary utensils and storage devices. Samples must be labeled with an unique identifier number, the trade name of the lab receiving the sample, the license number and tradename of the licensee, the date the sample was collected and the weight of the sample.

The CBD additives must be tested for THC to ensure that the product contains less than 0.3 percent. The additives are also tested to determine/verify the levels of THC and CBD. CBD additives must be tested for pesticides, heavy metals, residual solvents, microbiological matter, and mycotoxin.

For any questions on these new rules, give us a call. The new rules take effect December 1, 2018.

CBD alcohol california
Mint is still fine; CBD, not so much.

A few months ago, I spoke to a reporter from Quartz about cannabidiol (CBD). She told me that a local cafe was offering a CBD-infused latte and that it piqued her interest for a story. Her local baristas were not alone as numerous bars, restaurants, and cafes across the country have been experimenting with CBD-infused beverages. However, as with all things CBD, the regulatory framework is rapidly changing. If you’re a business owner looking to add a CBD beverage to the menu, it’s important to carefully consider state and local law.

That brings us to California. California is an excellent case study when it comes to CBD. The Golden State has a long history with cannabis, as it was the first state to create an affirmative defense for the medical use of marijuana in 1996. In 2016, California voters approved of recreational marijuana. California has also approved of an industrial hemp pilot program under the 2014 Farm Bill, but the program has been mostly dormant because the state’s laws and regulations make it nearly impossible to legally obtain hemp seeds. In addition, and perhaps most importantly when it comes to CBD, California has a propensity to regulate just about everything under the Sun.

Cue the California Department of Public Health’s (CDPH) infamous FAQs. As we wrote back in July, these FAQs stated that CDPH was banning the inclusion of hemp-derived CBD as a food, food ingredient, food additive, or dietary supplement. California’s Health and Safety Code defines food to include beverages meaning that CBD is not allowed in beverages of any kind. California’s Alcoholic Beverage Control (“ABC”) issued its own FAQs which stated that licensees could not serve alcoholic beverages mixed with cannabis, even if the licensee was using CBD. ABC cited to CDPH’s FAQs to prohibit the use of hemp-derived CBD.

The FAQs are examples of CDPH and ABC using policy statements to enact what feels like a new law or regulation. At the state level, laws are passed by both branches of a state legislature and signed into effect by the Governor. Laws establish requirements or prohibitions. In turn, regulations are issued by  agencies to clarify their interpretation of a law and how a law will be implemented. Like laws, regulations also impose requirements or prohibitions. When an agency issues a new regulation, there are procedural requirements such as a public comment period where stakeholders can voice concerns over proposed regulations. Similarly, when the legislature passes a new law, lawmakers hold public hearings. These procedural requirements provide for transparency.

Agencies also can issue guidance or other policy statements to clarify how an agency understands and implements existing laws and regulations. Generally speaking, guidance and other policy statements are not mandates but rather are an expression by the agency of a suggested or recommended action. Agencies are not generally required to provide the public with a notice and comment period before issuing a policy statement because those statements shouldn’t establish requirements or prohibitions.

When it comes to CBD-infused products, the outright prohibition in California is stated in the CDPH’s policy statement. There is no law or regulation that specifically prohibits using industrial hemp derived CBD as a food additive but CDPH interprets its governing rules and regulations to prohibit CBD in food or drinks.

Alternatively, ABC’s guidance prohibiting the use of CBD in alcoholic beverages has been enacted into California law. Recently, Governor Jerry Brown signed Assembly Bill 2914 (the “Bill”) prohibiting alcoholic beverage licensees, like bars and liquor stores, from providing hemp-derived CBD cocktails. The Bill’s purpose is summed up as follows:

This bill would prohibit an alcoholic beverage licensee from, at its licensed premises, selling, offering, or providing cannabis or cannabis products, including an alcoholic beverage that contains cannabis or cannabis products, and would provide that no alcoholic beverage shall be manufactured, sold, or offered for sale if it contains tetrahydrocannabinol or cannabinoids, regardless of source.”

That last phrase, “regardless of source,” encompasses cannabinoids like CBD even if it was derived from industrial hemp.

California has codified the prohibition of CBD-infused alcoholic beverages. The similar prohibition on CBD in non-alcoholic beverages and other consumable products is not codified in a law or regulation. In that sense, the latter prohibition would be easier to reverse. That said, CDPH’s guidance is powerful as agencies are given broad deference when interpreting their own regulations, so if CDPH changes that guidance, it will likely be because it wants to or because the legislature writes a law to expressly allow CBD in non-alcoholic beverages and other consumables. It will not be the result of a private party lawsuit.

The idea of offering a CBD-infused cocktail in California is a non-starter. If you are hoping to enjoy a CBD cocktail, you’ll have to forgo California and book a flight east. CNBC reports a New York bar is experimenting with CBD cocktails. Perhaps New York regulators will take a different approach from their California counterparts. Time will tell.

jamaica canada international marijuanaI recently traveled to Montego Bay for the annual CanEx Jamaica conference. I spoke on a panel with attorneys from Jamaica and Canada about the legal challenges across international cannabis markets. Grace Lindo of Jamaican firm Nunes, Scholefield, DeLeon & Co. and Sandra Gogal of Canadian firm Miller Thomson LLP, each spoke about the markets in their respective countries while I cover legal challenges in the US. The panel was moderated by Imani Duncan-Price, Chief of Staff for the Office of the Leader of the Opposition.

Jamaica breaks commercial cannabis licenses into six categories: cultivator, processor, transporter, retailer and a research and development license. A licensed business must be “substantially owned” (at least 51%) by Jamaican residents.

Because Jamaica has decriminalized cannabis under its licensing regime, intellectual property protection is available for trademarks. According to Lindo, Jamaica’s Patent Act is somewhat outdated, meaning that it is not possible, per se, to get protection for plant varieties. Trade secrets and know-how are not statutorily protected, so in Jamaica, confidentiality agreements are key.

Canada’s legal cannabis market is poised to take off this month, so it was very interesting to hear about the legal framework for our northern neighbors. This is when Canada’s “Cannabis Act” goes into effect, legalizing cannabis at the federal level. Like the US, Canada has a federal system of government. When it comes to cannabis, the federal government has jurisdiction over cultivation, quality control, and taxation. Provinces and territories, in turn, have jurisdiction over distribution and retail. There will be six license types: cultivation, processing, analytical testing, sale, research, and a cannabis drug license.

The Canadian market will arrive in a somewhat subdued form. Edible products, other than oils, will not be available initially. Also, the Canadian government is imposing strict limitations on the advertising and marketing. There is a general prohibition on promoting cannabis other than exceptions for “informational” and “brand-preference” promotion. That promotion will only be permitted for adults.

Because cannabis is going to be legal at the federal level in both Jamaica and Canada, my fellow panelists agreed that the international cannabis trade is going to be picking up in the near term. I discussed why America won’t be participating in this market until our federal laws change. As I recently wrote, the Controlled Substance Act makes it nearly impossible to import or export cannabis. I also spoke about the difference between marijuana and industrial hemp, and how the states have taken different approaches to regulating both hemp and marijuana.

It appears to me that both Jamaica’s and Canada’s laws have been influenced by various U.S. state markets. For example, like Jamaica, several states impose residency requirements. Canada has followed states like Washington in creating restrictive marketing rules designed to prevent promoting cannabis to children. On a larger scale, both Jamaica and Canada have also been influenced by the type of licenses issued. The model of issuing cultivation, processing, retail, and research licenses is certainly influenced by states like Washington, Oregon, and California.

When it comes to cannabis, American states have been pioneers and are now influencing regulatory regimes across the globe. However, America as a nation continues to fall behind due to the inability to participate in the international markets. There are signs that this could change, as the Associated Press recently reported that the University of California San Diego’s Center for Medical Cannabis Research obtained a permit from the Drug Enforcement Agency to import capsules from Tilray Inc., a Canadian cannabis company, that contain CBD and THC derived from marijuana. UCSD researchers will look into the cannabinoids effectiveness in treating tremors.  Though this is limited, it is a step in the right direction to keep the US involved in the growing international market.

washington lcb marijuana candy ban

By April 3, 2019, Washington retail marijuana stores will no longer carry infused hard candies, tarts, fruit chews, jellies, and gummies due to a newly enacted ban on the production said products. The announcement came from the Washington State Liquor and Cannabis Board (“LCB”) during a recent meeting. A PowerPoint presentation from the meeting is available here.

The LCB reevaluated its stance on marijuana candies finding that infused candies are “especially appealing to children.” The LCB’s regulations (WAC 314-55-077(7)) prohibit processors from creating products that appeal to children. The LCB claims that its new policy is intended to comply with this provision.

Going forward, the following products are prohibited:

  • Candy – hard candy (of any style, shape or size) and tarts.
  • Fruit chews, jellies and all gummy type products.

The new LCB policy will also impact other products. The following infused products are allowed “with limitation on appearance”:

  • Chocolate
  • Cookies
  • Caramels
  • Mints

What does “limitation on appearance” mean? The LCB provides some examples:

  • Chocolate in its original color and not coated, dipped, sprayed or painted with any type of color.
  • Chocolate in the shape of a bar or ball. No shape or design that is especially appealing to children.
  • Caramel and fruit caramels. No color, shape or design that is especially appealing to children.
  • Cookies that do not contain sprinkles or frosting.
  • Mints that have no color (white or white with small color fleck to represent the flavor only).

Finally, the LCB lists the following “allowable infused products”:

  • Beverages
  • Baked Goods
  • Capsules
  • Chips and Crackers
  • Sauces and Spices
  • Tinctured

Though the LCB has categorized the above products, it still will consider whether any product is especially appealing to children. In making that determination, the LCB examines the appearance, the similarity to products that are marketed towards children, and color. Our Seattle office knows all too well how difficult it can be to determine exactly what the LCB will approve, given these highly subjective criteria.

If you are a Washington marijuana processor, you may have seen this coming. The LCB has been pushing back on many products based on the “especially appealing to children” limitation, signaling that more stringent policies were on the horizon. The LCB now recommends that processors cease all production of hard candy, tarts, fruit chews, colorful chocolates, jellies, and gummies, because they will not be approved. Licensees are allowed to sell their products until inventory is depleted or April 3, 2019, whichever comes first.

This change will have a significant impact on processors that have built brand loyalty by creating suddenly outlawed infused candies. Consumers will also have fewer options. We anticipate that the industry will push back on this ruling, especially because the LCB has claimed that this is to address the public health risk of children accessing infused marijuana candies, but has not provided evidence that kids are, in fact, getting their hands on these products.

The LCB will host a webinar to answer questions on marijuana infused edibles on October 16, 2018. The link will be available on the agency’s website.

CBD DEA reschedule epidiolex
We’ve got ’em right here.

As soon as the Food and Drug Administration (FDA) approved Epidiolex as the first cannabis-derived prescription, we knew this day would come. Epidiolex was the first approval for a purified drug substance derived from marijuana plants, after all, and marijuana is classified as a Schedule I controlled substance in the federal Controlled Substance Act (CSA). The CSA considers marijuana to be among the most dangerous controlled substances known to man– so dangerous that a doctor cannot prescribe marijuana to treat any disease or ailment. This classification obviously would not work for Epidiolex.

Last Thursday, the Drug Enforcement Administration (DEA) rescheduled “approved cannabidiol [(CBD)] drugs” to Schedule V of the CSA. Schedule V substances have the lowest potential for abuse of all the schedules. The DEA now defines approved CBD drugs as follows:

Approved cannabidiol drugs. A drug product in finished dosage formulation that has been approved by the U.S. Food and Drug Administration that contains cannabidiol . . . derived from cannabis and no more than 0.1 percent (w/w) residual tetrahydrocannabinols.

This definition creates three conditions for a product to be an approved CBD drug. As such, it must:

  1. Be FDA approved;
  2. Be derived from cannabis; and
  3. Have less than .1% THC.

This definition is obviously limited. Right now the only CBD approved drug is Epidiolex. CBD product like oils, tinctures, lattes, and other foods are not approved CBD drugs. Why? They are not FDA approved.

Many of these CBD products are derived from cannabis. Some come from marijuana (Marijuana-CBD). Marijuana-CBD remains a Schedule I substance. Marijauna-CBD products may be legal under state law in states like Washington, Oregon, and California but their sale is only permitted through a states regulated marijuana market. These products come from licensed producers, are developed by licensed processors or manufacturers, and are sold to the public through licensed retailers or dispensaries. Marijuana-CBD products are only legal in states where they were cultivated and these products are heavily regulated at all stages of production, from seed-to-sale. Marijuana-CBD products may also contain significant levels of THC.

There is another classification of cannabis derived CBD products relevant here: CBD derived from industrial hemp (Hemp-CBD). These products arguably do not fall under Schedule I, or any other Schedule, as they are not governed by the CSA. This is because the cultivation of industrial hemp was legalize by Section 7606 of the Agricultural Act of 2014 (the 2014 Farm Bill). Industrial hemp is defined as the cannabis plant with less than .3% THC. The 2014 Farm Bill also requires that industrial hemp is cultivated under a state agricultural pilot program. This usually means that a state will issue a license or other authorization that permits the cultivation of industrial hemp. Some states also require a license to process industrial hemp into other products like Hemp-CBD.

The distribution of Hemp-CBD products is arguably legal under federal law because the 2014 Farm Bill does not explicitly limit distribution. However, the DEA, FDA, and other federal agencies issued guidance in 2016 stating that the 2014 Farm Bill did not permit the interstate transfer or commercial sale of industrial hemp. Despite this, the DEA has rarely taken any enforcement action against distributors of Hemp-CBD, because Congress has limited the DEA’s ability to use federal funds to do so and because the DEA would have to establish that the CSA does in fact cover Hemp-CBD. In oral arguments during HIA v. DEA, the DEA admitted that the 2018 Farm Bill preempted the CSA with regards to industrial hemp. Several states like Idaho prohibit the distribution of Hemp-CBD. Other states like Ohio, Michigan, and California significantly restrict the distribution of Hemp-CBD.

Even though Hemp-CBD does not fall within the CSA, Hemp-CBD products have not been approved by the FDA. This is also true of Marijuana-CBD. This means that even cannabis derived Marijuana-CBD and Hemp-CBD products containing less than .1% THC are not approved CBD drugs for lack of FDA approval. As such, it’s likely that this recent development will have little impact on business distributing CBD, other than for GW Pharma, the makers of Epidiolex who has already seen its stock value surge.

Still, there is always some risk of enforcement action against Hemp-CBD distributors, as the budgetary restriction that prevented the DEA from using funds to prosecute industrial hemp distributors expires on September 30. However, that seems unlikely given the fact that there is a strong argument that industrial hemp is not prohibited by the CSA. It is also possible that the FDA could take a more aggressive approach to limit the distribution of CBD products, but that decision seems to have little relation to the reschedule of approved CBD drugs.

If anything, the DEA’s latest CBD-action is a sign of how the times-are-a-changin’. It’s the first time a cannabis derived product has fallen outside of Schedule I, after all.

Our firm’s main practice areas include cannabis, China, trade and immigration. As such, it may not surprise you to learn that we get a lot of questions about the developing international cannabis trade. This is in large part due to the fact that Canada is on the verge of legalizing marijuana nationwide.

Importing or exporting cannabis in the United States at this point is extremely limited. Marijuana is listed as a Schedule I substance in the Controlled Substances Act (CSA) and it is illegal under federal law to possess or sell marijuana. The Controlled Substances Import and Export Act incorporates the schedules of the CSA. That means that the U.S. Customs and Border Protection is likely to seize any shipments of marijuana, even if shipments are going to or coming from a nation that has legalized marijuana in some form. There has even been some noise about barring travel by foreign marijuana company investors themselves as of late.

All of that said, not all parts of the cannabis plant are considered marijuana. The CSA defines “marihuana” as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” The second classification under the CSA is “Exempt Cannabis Plant Material” which includes the following four categories:

  1. Mature stalks
  2. Fiber produced from mature stalks
  3. Oil or cake made from seeds
  4. Seeds incapable  of germination

Exempt Cannabis Plant Material also includes “any other compound, manufacture, salt, derivative, mixture, or preparation” of the items listed above. The term does not include resin derived from mature stalks as that is considered marijuana, not Exempt Plant Material.

Back in May 2018, the Drug Enforcement Administration (DEA) issued an internal directive acknowledging that Exempt Plant Material is not “marijuana.” The directive touched on how the distinction impacted internationally traded cannabis

[A]ny product that the U.S. Customs and Border Protection determines to be made from the cannabis plant but which falls outside the CSA definition of marijuana may be imported into the United States without restriction under the Controlled Substances Import and Export Act. The same considerations apply to exports of such products from the United States, provided further that it is lawful to import such products under the laws of the country of destination.”

There you have it straight from the horse’s mouth: Importing or exporting Exempt Cannabis Plant Material is lawful under the Controlled Substance Import Export Act. What is not clearly indicated is whether or not the DEA considers exporting industrial hemp, grown pursuant to the 2014 Farm Bill, as outside of the scope of the CSA.

By nature of the 2014 Farm Bill, industrial hemp cannot be imported. This is because the cultivation of industrial hemp is only permitted if grown pursuant to a state’s agricultural pilot program under the guidance of a state department of agriculture.

But before you go and order a metric ton of mature cannabis stalks, keep in mind that any shipment of any cannabis-related good can come with additional scrutiny. Even if a product is solely derived from Exempt Cannabis Plant Material, that doesn’t mean that Customs will thoroughly investigate its shipment. Importers and exporters should be prepared to prove that the product was solely derived from Exempt Cannabis Plant Material and not marijuana. This can be difficult to do as there is no way to truly test from what portion of the plant a product was derived. You may be thinking, “well can’t a lab confirm that a product contains no THC?” The answer, of course, is “yes”, but even though verifying THC content is important (THC is listed separately from marijuana as a controlled substance in the CSA) it is not dispositive in determining whether a product is derived from Exempt Cannabis Plant Material.

Intrepid importers and exporters should prepare to detail the chain of title for Exempt Cannabis Plant Material. This can include an affidavit from the original supplier of the plant that only Exempt Cannabis Plan Material was used, lab certifications, purchase orders, shipping documentation, and any other documentary evidence showing the source of the plant material. There is no single item guaranteed to satisfy the authorities, so it’s best to prepare multiple documents in case they are needed.

If you have purchased marijuana in Washington State, you’ve probably noticed the packaging can be difficult to open and is adorned with warnings, bar codes, and lots of other information that appears in tiny font. This is by design, as the state has created robust regulations intended to protect the public from contaminated cannabis and to limit access by children. Though these regulations are important, one has to ask what impact these packaging requirements have on the environment.

Washington’s packaging and labeling requirements can be found in WAC 314-55-105. Note that this section of the Washington Administrative Code was recently amended meaning that there are two separate packaging standards. Licensees can abide by the old rules until January 1, 2019 when the new version of WAC 314-55-105 go into full effect. Until that date, licensees have the option to comply with the new rules. This post will focus on the newer version of WAC 314-55-105.

All containers that carry marijuana must protect the substance from contamination and harmful substances. Marijuana-infused products, such as edibles, and marijuana concentrates must come in child-resistant packaging. For packages containing more than one serving (a serving is capped at 10 milligrams of THC) of a solid edible product, each serving must come in child resistant packaging. For liquid products, the packaging must include a measuring device such as a cap that you would find accompanying a bottle of NyQuil. Hash marks on the side of a package are not enough.

In addition, Washington imposes substantial labeling requirements. All products must clearly show the following warning:

Warning – May be habit forming. Unlawful outside Washington State. It is illegal to operate a motor vehicle while under the influence of marijuana.

Per the recent rule change, all marijuana products must also include Washington’s marijuana universal symbol (pictured below). In addition, the label must include the business or trade name and UBI number of the licensed producer and processor, the traceability identifying number, the number of servings (if applicable), the net weight, and THC and CBD concentrations.

Washington’s universal marijuana symbol.

The state also requires the following labeling on specific products:

  • Useable marijuana flower must include the additional warning, “smoking is hazardous to your health.”
  • Marijuana concentrates or infused products intended for inhalation must list the solvents used to create product, state the method of extraction, and disclose whether any other chemicals or compounds were used.
  • Marijuana infused products intended for consumption must also list information about extraction methods and solvents, in addition to listing food allergens and the following sentence: “CAUTION: intoxicating effects may be delayed by 2+ hours.” Additionally, edible marijuana products must include the “Not for Kids” logo, shown to the right.
  • Marijuana topical products must contain the statement: “DO NOT EAT” in bold, capitol letters.

All of this means that products come with a significant amount of packaging. Even small,

Required on edibles in Washington State.

single-serving edibles must come with enough packaging to include the two logos, written warning, and information on the licensees and product. In addition, businesses making the product also want to include their branding and marketing material, which also takes up space. That branded packaging is important for producers and processors who are trying to stand-out and earn valuable shelf-space in retail stores. Unfortunately, all of that packaging has to go somewhere and it often ends up on the street or sitting in a dump.

Last month, journalist Kristen Millares Young wrote about the waste generated by Washington’s cannabis market in an article for the Washington Post. Young highlighted that environmental groups are increasingly finding cannabis packaging on the streets, something I can personally attest to living here in Seattle. The article also highlights the problem with “doob” (as in doobie) tubes, the plastic tubes used to package pre-rolled joints. These tubes cannot be recycled, even when made of recyclable plastic, because they fall through the grates of recycling machines.

Washington’s waste problem doesn’t have a simple solution. As Young points out, a potential “fix” would for Washington to require that producers and processors use recyclable material for the purpose of packaging. However, that would add increase costs to producers and processors who are already struggling to operate in a fiercely competitive market where the number of producers and processors far outweighs the number of retailers.

Perhaps it’s time to reconfigure Washington’s labeling requirements. The newest version of WAC 314-55-105 allows producers and processors to provide some information that used to be required on the physical package online. This may allow for more streamlined packaging, putting less of a burden on Washington landfills. After all, a QAR code can provide a vast amount of information without taking up much space.

If you’re a consumer you have some options. First, you can contact the Washington State Liquor and Cannabis Board about its rules, either online or during their monthly board meetings; and you can call your state representative to voice your concerns. Second, you can purchase products that have less packaging, such as marijuana flower rather than pre-rolls packaged in tubes, and you can reward companies that do use recyclable materials by purchasing their products. Third, you can make an increased effort to recycle your discarded packages and reuse non-recyclable packages. For example, maybe save the doob tube and use it to transport your hand-rolled joint in the future.

hemp cbd transport
CBD transport routes can (and should) get weird.

The legal status of cannabidiol (CBD) has long been complicated. The Agricultural Act of 2014 (2014 Farm Bill) allowed for the cultivation of “industrial hemp”, defined as the cannabis plant that contains less than .03% tetrahydrocannabinol (THC) on a dry weight basis, as long as that hemp was grown pursuant to a state’s guidelines. The 2014 Farm Bill lead to a massive influx of industrial hemp-derived products containing CBD (Hemp-CBD). However, not all states have legalized industrial hemp, making the U.S. a quilt of different rules and regulations on industrial hemp and Hemp-CBD. We’ve written about how state law impacts Hemp-CBD, in regards to where a distributor can sell its products. State law considerations are also relevant to consider when transporting Hemp-CBD.

Consider the case of Anita Maddux. According to Planet Jackson Hole, Maddux was driving through Wyoming en route to Montana to care for her sick mother when she was pulled over for her expired California license plates. It turns out Maddux was driving with an expired license, no insurance, and a 10-millimeter bottle of CBD she obtained from a health store in New Mexico. At the Teton County Jail, police tested the CBD oil for THC. The test results confirmed the presence of THC but the amount of THC. Maddux ended up spending 36 hours in jail before being released on a $1,000 bond.

Recently, the Jackson Hole News & Guide reported that Teton County Deputy Prosecutor Clark Allen intended to dismiss the felony drug charge. However, Allen noted that “I don’t want to send the message that we will not pursue these cases[.] We will pursue these types of cases under the right circumstances. This case just isn’t it.” Allen went on to acknowledge that Wyoming law is not clear when it comes to CBD oils: “Our laws are way behind the curve with the products we’re dealing with[.] A citizen takes a big risk when they possess these products.”

A similar story played out in Cary, South Carolina where Ayman Tamim Nu Mann Alqazah, a wholesaler of e-cigarettes and other similar goods, was charged with trafficking marijuana after a box of CBD-infused gummies he ordered popped open while in transit. The News & Observer reports that box opened while it was transferred from a truck in Florida. Alqazah’s order totaled four boxes weighing 241 pounds. Alqazah now faces drug trafficking charges.

Hopefully, like Maddux, Alqazah’s charges will eventually be dismissed. Regardless of the outcome, Alqazah and Maddux show that shipping CBD products comes with substantial risk. Though many states have legalized the cultivation of industrial hemp in some form, the law surrounding Hemp-CBD remains confusing. Additionally, enforcement action is sporadic. Often, Hemp-CBD products are distributed without incident. Other times, law enforcement will seize Hemp-CBD products to confirm that they do not contain THC and then will either destroy or return the products depending on test results. Other times, as was the case with Maddux and Alqazah, criminal charges are levied against individuals who possess Hemp-CBD.

All of this means that businesses must carefully consider how their products reach consumers. For example, imagine that Hemp Co. is planning to distribute Hemp-CBD. Hemp Co. sources its industrial hemp from a farm in Medford, a small town in Southern Oregon. Hemp Co. has a large order to fill for a natural food store in Billings, Montana. Hemp Co. decides that the fastest and cheapest method of delivery is ground shipping through Idaho. However, according to a 2015 informal opinion from the Idaho Attorney General,  the state makes no distinction between industrial hemp and marijuana. Therefore, Hemp-CBD, even without the presence of THC, is not permitted in Idaho. Even though Hemp Co.’s products come from a farmer who cultivates in-line with Oregon’s industrial hemp program (and relevant federal law), that does not insulate Hemp Co. from liability if the shipment is inspected by Idaho State Police. Even if Hemp Co. re-routes to travel through another state, it still would likely have to pass through Idaho, Wyoming, South Dakota, or North Dakota. Though not all of these states are as “bad” as Idaho, none of them have CBD-friendly laws. Paying for air-shipment may seem like a solution, but there are numerous regulations and transit-company polices that Hemp Co. must deal with. All of this requires careful planning and risk management.

I was recently watching an old episode of the TV show Kung Fu, which chronicles Caine, a young American played by David Carradine, training to be a Shaolin Monk traveling the Old West. At one point Caine asks his teacher Master Tae “what is the best way to deal with force?” Master Tae responds, “as we prize peace and quiet above victory, there is a simple and preferred method. . . Run away.” Hemp-CBD distributors should heed this advice and “run away”, to the best of their ability, from states like Wyoming and Idaho.

Transporting Hemp-CBD is inherently risky. CBD businesses should consult with attorneys and logistic specialists to plan ahead and avoid running into the same problems as Maddux and Alqazah.

Arizona marijuana cannabis
Flower is fine right now; oil and hash, not so much.

A recent Arizona court of appeals decision has sent the state’s medical marijuana market into a frenzied state. In 2010, Arizona enacted the Arizona Medical Marijuana Act (“AMMA”), which grants licensed dispensaries and registered qualified immunity from criminal prosecution for selling or possessing marijuana. Despite this, in March 2013, registered patient Rodney Jones was arrested for possessing .05 ounce of cannabis oil. Jones moved to have the charges dismissed, arguing that he was immune from prosecution under the AMMA by way of registering as a medical patient. The trial court denied the motion and Jones was convicted for possession of a narcotic drug. Jones appealed to the Arizona Court of Appeals, Division 1 (the “Court”).

In State v. Jones (“Jones“), the Court upheld Jones’ conviction by ruling that the AMMA did not extend protections to hashish. The AMMA protects registered patients from arrest, prosecution, or penalty so long as the patient does not possess more than the allowable amount (2.5 oz.) of “useable marijuana.” “Useable marijuana” is defined as “the dried flowers of the marijuana plant, and any mixture or preparations thereof, but does not include the seeds, stalks and roots of the plant.” According to the Court,  the language of the AMMA did not provide immunity for the possession of “hashish” which was defined decades before the AMMA was enacted by the Arizona Supreme Court in State v. Bollander, 110 Ariz. 84, 87, 515 P. 2d 329 (1973). Bollander defined hashish as “the resin extracted from the marijuana plant.”  The AMMA did not mention “hashish” or reference oil extracted from marijuana, which the court interpreted to mean that the AMMA did not provide protection for hashish.

One judge dissented claiming that the Court read the definition of “marijuana” too narrowly and that the AMMA was intended to encompass hashish and other oil products. The dissent pointed to regulations from the Arizona Department of Health Services (“ADHS”), the body that oversees Arizona’s medical marijuana program, that support the conclusion that the AMMA does encompass cannabis oils. For one, an applicant for a dispensary must provide its bylaws to ADHS and those bylaws must indicate whether the dispensary intends to “prepare, sell, or dispense marijuana-infused non-edible products.” Additionally, ADHS’s dispensary handbook states that non-edible products include “any non-edible items, such as concentrates, sold that contain medical marijuana” and must be labeled with the amount of marijuana they contain.

Despite the dissent and ADHS regulations, as it currently stands, Jones is now valid law. Still, news reports indicate that some dispensaries will continue to sell cannabis oils. ADHS has not yet provided guidance on the matter. We are thinking the department definitely should, and fast.

Given the holding in Jones, distributing marijuana vape or oil products in Arizona comes with significant risk. Jones has put Arizona in a state of uncertainty, which could be resolved if the case is reviewed by the Arizona Supreme Court or it could be “fixed” by legislative action by Arizona’s state lawmakers. We’ll be watching for any updates and if you are a patient or dispensary owner, you should do the same. 

*Disclaimer: Our law firm is comprised of cannabis business lawyers in Washington, Oregon and California, with offices in Seattle, Portland, San Francisco and Los Angeles. We have clients participating in the Arizona marijuana market, but we refer those clients to local counsel. We also monitor industry developments nationwide and are publishing the Jones decision as a conversation piece and public service announcement.