CBD and Hemp Authorized and Regulatory Roundup – Might 6, 2022 | Kelley Drye & Warren LLP

Welcome to our weekly roundup of CBD and hemp-related legal and regulatory news:

Courtney M. Moran, founder of Earth Law and chief legislative strategist with hemp lobby group Agricultural Hemp Solutions, described several policy fixes being discussed with lawmakers for the next farm bill, including:

  • Raising the legal THC threshold for hemp being grown and processed from 0.3% concentration to 1%, while tightening provisions on consumer hemp products;
  • Removing the DEA as the enforcer of hemp regulations; and
  • Allowing CBD to be placed in consumable products. Law 360 (sub. req.).

ATLRx, BioMD Plus, Delta 8 Hemp, Kingdom Harvest and M Six Labs received warning letters from the FDA for selling products labeled as containing Delta-8 THC in ways that violate the FD&C Act. According to the warning letters, the companies illegally market unapproved Delta-8 THC products with claims that they treat or alleviate the side effects related to a variety of diseases or medical disorders, such as cancer, MS, chronic pain, nausea and anxiety. The FDA is also concerned that some of the food products are packaged and labeled in ways that may appeal to children. The companies have been given 15 working days to outline how they’ll address these violations and prevent their recurrence. Those that fail to promptly address the violations could face legal action, including product seizure and/or injunction. FDA.

Rep. James Comer (R-Ky.), ranking member of the House Oversight and Reform Committee, wrote to Chairwoman Carolyn Maloney (D-N.Y.) that a meeting is required to “examine the failure of [the FDA] to develop a regulatory regime that effectively oversees the sale of hemp-derived extracts such as cannabidiol.” He added the current lack of regulations has led to mislabeling, contaminated products and advertising that targets children. He stressed the need for a hearing with the FDA to ensure the agency has a plan to institute a regulatory solution to effectively monitor the sale of hemp products and protect children. Comer has been an ally for the hemp and CBD industries in the past, noting he’s personally prescribed CBD as a physician. Marijuana Moment.

The approval by the Cannabis Control Board of an additional 36 licenses are for hemp farmers to begin cultivating cannabis. In Apr., the regulators approved 52 farmers’ applications. According to Chris Alexander, ED of the Office of Cannabis Management, there are approximately 100 more cultivator licenses to be reviewed. Law 360 (sub. req.).

A Colo. bill (SB 205) meant to severely limit the sale of hemp derived Delta-8 and modified CBD was amended as a compromise, delaying future conflict between the marijuana and hemp industries. Rather than calling for an outright ban on any hemp product deemed intoxicating, SB 205 proposes a task force of officials from the state AG’s Office and the state’s departments of agriculture, marijuana enforcement and public health, as well as hemp and marijuana industry stakeholders, to “study intoxicating hemp products and make legislative rule recommendations.” The amended bill now moves to the Senate Finance Committee. Westword.

U.S. District Judge Stephanie A. Gallagher approved federal prosecutors’ request to bar any discussion of cannabis legalization from the trial of a man indicted for criminal conspiracy to traffic marijuana from Calif. to Md. The judge found defendant Jonathan Wall’s beliefs about cannabis legality under Calif. law are irrelevant to the case. Specifically, Judge Gallagher referred to arguments or evidence relating to the equal protection challenge already rejected by the court, such as “references to wealthy or celebrity individuals engaged in the marijuana industry.” Law 306 (sub. req.).

The W.Va. Supreme Court of Appeals found the state’s Miners’ Health Safety Office was correct to suspend a coal miner after a positive marijuana drug test since state law doesn’t differentiate between CBD and THC in workplace drug testing, so the consumption of a CBD product can’t be used as a legal defense. Justice Tim Armstead stressed it isn’t the place of the court to act as a “superlegislature” and impose such a defense. He noted that two other justices dissented and reserved the right to issue a separate opinion. Law 360 (sub. req.)

Three Ohio electors are suing the head of the state’s House and Senate and the Secretary of State, asking for clarification on whether the petition can move forward with getting an initiative to legalize recreational cannabis on the Nov. ballot. With the four-month final deadline approaching, the electors are asking the court to declare that it was proper. Emails between House Speaker Robert C. Cupp (R), Senate President Matt Huffman (R) and state officials suggest the petition wasn’t properly presented and must wait until the 2023 session. Law 360 (sub. req.).

A $600-million lawsuit against Acreage Holdings and others will move forward after a N.Y. State Supreme Court ruling against a motion to dismiss. The lawsuit claims cannabis holding company EPMMNY played an instrumental role in obtaining the medical marijuana license under which Acreage currently operates, and that the defendants violated a contract for the ownership, management and control of the business license. EPMMNY is seeking $200 million to cover the value of the license, plus $400 million in punitive damages and control of the license. The case could also complicate a plan for Canada-based Canopy Growth to acquire Acreage in a deal valued at around $843 million. Olean Times Herald.

SSL Investments filed its complaint in Calif. federal court against Orochem Technologies and its subsidiary, Kazmira. According to SSL, before engaging in a JV with the defendants, SSL processed and conducted the wholesale distribution of THC oil for Original Balboa Caregivers. In May 2018, SSL said it was approached by an Orochem owner who claimed Kazmira could produce commercial quantities of viable THC oil with no more than a 5% loss in total mass of the raw material. SSL alleges the proprietary technology wasn’t fully developed and the intent in associating with SSL was to conduct R&D at the plaintiff’s expense, and then abandon SSL to use the fully developed technology for other purposes. Law 360 (sub. req.).

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