Recently, three operators of a Wisconsin CBD dispensary were arrested and are awaiting felony drug charges after failing to comply with the state law. The investigation into the dispensary began when two minors consumed a CBD-related products their parents had purchased from the dispensary. According to the sheriff’s department, several of the CBD-related products, including Delta-8-tetrahydrocannabinol (“Delta-8”) containing products, had THC level in excess of 0.3% set forth by the Agriculture Improvement Act of 2018 (“2018 Farm Bill”), and in turn, violated the state law.
The dispensary’s owner stated that the store was targeted “because we’re pushing a lot [of Delta-8] onto the market.” Wisconsin State law permits the sale of CBD products so long as the products contain no more than 0.3% THC level, consistent with 2018 Farm Bill. Notwithstanding, the legal status of Delta-8 is unclear largely due to the conflict between 2018 Farm Bill and a Drug Enforcement Administration (“DEA”) regulation. More specifically, the 2018 Farm Bill essentially removed all hemp-derived cannabinoids including Delta-8 from schedule I of the Controlled Substances Act (“CSA”) while DEA’s Interim Final Rule indicated that “[all] synthetically derived tetrahydrocannabinols remain schedule 1 controlled substances.” Thus, Delta-8 manufactured from hemp-derived CBD is considered a controlled substance under the federal law. In a similar vein, Delta-8 has not been directly addressed byWisconsin State law. However, we can glean from the current law, i.e., 2019 Wisconsin Act 68 on the State’s perspective on Delta-8. According to the Act 68, “cannabidiol product” is defined as a derivative or extract of the plan Cannabis sativa L. that contains cannabidiol and a THC concentration at a level without a psychoactive effect.
How Frier Levitt Can Help
Regulation of hemp and its derivative products remains mired in a jumble of conflicting and unclear state and federal law. Also, law enforcement’s wrongful seizure demonstrates a lack of knowledge and understanding of CBD, which may lead to business interruption and financial loss. Stakeholders should make sure they have a Plan of Action to address wrongful seizure and surrounding criminal issues, as well as appropriate commercial insurance coverage to mitigate the economic risks. If your company handles hemp and its derivatives, contact us today to speak to an attorney.
Recent events signal the need for CBD manufacturers to have a clear game plan to address legal uncertainty and confusion by law enforcement and prosecutors. New York prosecutors recently dropped felony marijuana possession charges against a New York-based CBD manufacturer. The manufacturer was arrested in November for allegedly receiving 106 pounds of marijuana. However, the shipment contained hemp plants. Notably concerning, the shipment included documents verifying that the hemp contained 0.06% THC, which is lower than the 0.3% threshold set forth by the Agriculture Improvement Act of 2018 (2018 Farm Bill). Of note, any cannabis plant that contains more than 0.3 % THC would be considered non-hemp cannabis under federal law and would thus face no legal protection under the 2018 Farm Bill.
Law enforcement’s wrongful seizure demonstrates a lack of knowledge and understanding of CBD, which may lead to business interruption and financial loss. Stakeholders should make sure they have a Plan of Action to address wrongful seizure and surrounding criminal issues, as well as appropriate commercial insurance coverage to mitigate the economic risks.
New York is clearly making efforts to address uncertainty through legislation. New York Governor Cuomo signed a comprehensive hemp bill this month that allows and sets up a regulatory framework for the growth, sale, distribution, transportation, and processing of industrial hemp and hemp extracts including CBD in the state. Stakeholders should understand the contours of this new law.
Regulation of hemp and its derivative products remains mired in a jumble of conflicting state and federal law. Stakeholders, ranging from manufacturers to retailers, must remain compliant. If your company handles hemp and its derivatives, contact Frier Levitt today to speak to an attorney.