Vicente Sederberg LLP Hemp Update: March 2021
Mar 24, 2021
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Federal Updates
More Hope for Hemp Banking: SAFE Banking Act Reintroduced
Last week the SAFE Banking Act was reintroduced in the U.S. House of Representatives and this week the companion version was introduced in the U.S. Senate. The bill would explicitly protect financial and credit card transactions for cannabis businesses and makes clear that hemp businesses are not subject to the additional scrutiny required for adult-use cannabis commerce. Learn more about SAFE Banking and show your support by sending an email to your members of Congress via this U.S. Hemp Roundtable portal.
USDA Final Rules for Domestic Hemp Production Are Now Effective
On March 9, the U.S. Department of Agriculture announced the completion of its review of the USDA Final Rule for Domestic Hemp Production. Recently confirmed U.S. Agricultural Secretary Tom Vilsack gave the final authorization. The rules became effective on Monday, March 22. View the rules here.
Industry concerns remain—especially the (delayed) requirement for testing labs to be DEA-certified. Industry advocates will continue their discussions with the USDA and Congress.
PACT Act Update Affects Shipping of Hemp and Cannabis Vape Products
The Consolidated Appropriations Act of 2021, which provided COVID-19 relief and avoided a government shutdown, also included an update to the Prevent All Cigarette Trafficking (PACT) Act. This update is impacting the cannabis industry, as it was interpreted to include all vaping products—which led to USPS, FedEx, UPS and other carriers refusing to ship vape devices, products, and accessories.
“That’s not what Congress set out to achieve,” said Shawn Hauser, chair of VS's Hemp and Cannabinoids Department. “The potential impact really is severe.”
Read more about it in this article from Forbes.
FDA Warns Companies Illegally Selling OTC CBD Products for Pain Relief
On March 22, the U.S. Food and Drug Administration (FDA) issued warning letters to two companies for marketing and selling over-the-counter pain relief products with CBD listed as an inactive ingredient, which is in violation of the Federal Food, Drug, and Cosmetic Act. The FDA has not approved any over-the-counter drugs containing CBD. Read the FDA news release for more details.
FTC Approves Final Administrative Consent Orders Against Sellers of Deceptively Marketed CBD Products
Following a public comment period, the Federal Trade Commission (FTC) has approved final administrative consent orders against six companies selling CBD products nationwide. As you may recall, FTC’s “Operation CBDeceit” crackdown began in December 2020, when the agency took action against the six sellers that allegedly made a wide range of scientifically unsupported claims about CBD’s ability to treat serious health conditions. More from the FTC here.
DEA Says Federal Hemp Legalization is Complicating Marijuana Enforcement
While we would argue the point that marijuana prohibition is complicating hemp regulatory enforcement, the Drug Enforcement Administration (DEA) stated the following in a recent report, “The 2018 Farm Bill legalizing hemp production at the federal level has further challenged law enforcement, particularly in states that legalized marijuana.” The agency claims that hemp policy is giving cover to criminal organizations that traffic marijuana. Read more about it in this Marijuana Moment article.
Emergency Relief for Farmers of Color Act
The Emergency Relief for Farmers of Color Act passed the Senate as part of the budget reconciliation package and is now headed for the House floor. Learn more about this act and show your support via U.S. Hemp Roundtable’s online portal.
General Updates
Proposed Changes to Prop 65 ‘Short-Form’ Warning Option: What Cannabis and Hemp Operators Need to Know
As of January 2021, businesses subject to Prop 65 that manufacture, distribute, or sell any cannabis product, including hemp-derived products that contain trace amounts of Δ9 THC, must provide a “clear and reasonable” warning notifying California consumers that the products contain chemicals known to the State of California to cause cancer or reproductive harm.
The agency also proposed significant changes to its short form warning requirements and is accepting public comments through March 29, 2021. Read more about Prop 65 and the proposed short form warning changes in this VS Insight by Andrea Golan.
State Updates
NASDA Members Vote to Raise THC Limit
The National Association of State Departments of Agriculture recently met for a policy conference and voted to approve a policy amendment to change the definition of hemp to include “a total tetrahydrocannabinol [THC] concentration of not more than one percent on a dry weight basis.” This amendment would be beneficial to state ag departments and hemp producers. Read more about it.
California
On March 10, SB-235 was passed out of the California Senate’s health committee. This bill would establish a regulatory structure in the California Department of Public Health (CDPH) for food, beverage and cosmetics products containing industrial hemp. AB-45, the Assembly version of the bill, was referred to the Committee on Health on January 11.
Indiana
The Indiana House of Representatives recently voted to pass HB 1224, which would reverse the state’s ban on smokable hemp flower and prevent hemp regulators from enforcing regulations that are stricter than federal laws.
Iowa
Iowa recently published consumable hemp products rules, and as of March 3, sales are permitted and registration is officially open. Individuals, businesses, or other entities may not sell consumable hemp products in Iowa before an approved consumable hemp registration has been approved. Consumable hemp manufacturers and retailers can register here.
Kentucky
HB 325, a bill that creates labeling requirements for ingestible and cosmetic cannabidiol products and requires that manufacturers of such products be permitted as a food manufacturer or a cosmetic manufacturer, is awaiting the Governor’s Signature.
HB 307 was passed by the House and Senate and is awaiting the Governor’s Signature. The bill excludes a cannabinoid product derived from hemp from the definition of marijuana for the purposes of scientific research.
New York
New York hemp farming groups who would like to market hemp craft flower are supporting AB 2682, which would make clear that the sale of hemp that has not undergone processing is legal. The bill would also emphasize that regulations on processing, distribution, sale, and transportation apply only to processed cannabinoid hemp and derived hemp extracts.
Additionally, the New York Department of Health is accepting applications for a Cannabinoid Hemp Retail License, a Cannabinoid Hemp Distributor Permit, or a Cannabinoid Hemp Processor License. Contact our hemp team for help submitting an application in New York.
USDA State & Tribal Hemp Plan Approvals
View the USDA approval status of each state and tribe hemp production plan here.
International Updates
Thailand’s FDA to Include Cannabis on Essential Drugs List
Thailand’s Food and Drug Administration (FDA) is pushing to expedite the listing of cannabis in the National List of Essential Medicines. Speaking at the official opening of the Institute of Medical Cannabis, the country’s Public Health Minister said since the Public Health Ministry approved the use of cannabis and hemp for medical and research purposes, more than 50,000 patients have been prescribed cannabis-based treatments by licensed health professionals. Read more here.
Events
NoCo Hemp Expo - March 26-27
NoCO Hemp Expo is going live this week! This in-person and virtual hybrid event will be held on March 26-27 in Denver, CO. Register here!
Texas Marijuana Policy Virtual Lobby Day - March 29, 2021
With access to the Texas Capitol largely restricted, Texans for Responsible Marijuana Policy are utilizing a digital platform to host their Texas Marijuana Policy Virtual Lobby Day. This two-part Virtual Lobby Day is designed to create meaningful connections with legislators and their staff to advance marijuana law reform. Be sure to register before March 28!
Learn more about what’s going on with Texas cannabis and hemp in this blog post from Shawn Hauser.
Cannabis Real Estate Summit - April 8, 2021
Jennifer Cabrera will speak at the first-ever virtual Cannabis Real Estate Summit on April 8, 2021. Attendees are eligible for CLEs. Learn more and register here!
Contact our hemp team with any questions or licensing needs!