As the 2024 Minnesota Legislative Session came to a chaotic close on May 20, numerous changes to Minnesota Statutes Chapter 342 were sent to the Governor’s desk to build on the already existing cannabis regulatory structure. On May 24, Governor Tim Walz signed the amendments to Chapter 342, which address social equity provisions, preapproval process for social equity applicants, the larger application and licensing process, and consumer safety.
Hemp Production and Prices Increase
Earlier this year, hemp was included in the USDA’s Census of Agriculture. When hemp was first legalized in 2018, there was a boom in production under the fervor of new opportunities, spearheaded by the demand for CBD products. This resulted in over production and over supply. The CBD market was over-saturated within a growing season and hemp biomass prices plummeted, along with hemp production. More recently, however, hemp production has leveled out and is even increasing as reported by the USDA on April 17, 2024. As an example, prices for hemp outdoor-grown flower are up 35% and hemp clone and transplant prices are up 61%.
In November of last year, we wrote about how Total Wine & More jumped into the cannabis drinks arena in Minnesota. Since then (and probably before that), there’s been an influx of “THC Beverages” hitting the marketplace, and I don’t mean the state-licensed cannabis marketplace either. At this point, you can buy these drinks online or in person at a number of retail outlets and locations that don’t have any kind of state cannabis licensing at all (here’s one in Alabama, for example). How, you may be asking, is this legally possible and why are these libations picking up great speed with consumers?
Creating further confusion and uncertainty in the hemp derived cannabidiol (CBD) markets, the FDA has determined that the existing regulatory frameworks for food and supplements are not appropriate for CBD. The FDA cited various safety concerns as the impetuous in making this determination.
This is the final post in the blog series. Read part 1 and part 2.
While AK Futures LLC v. Boyd St. Distro, LLC (9th Cir. May 19, 2022) may seem like a golden opportunity for companies in the intoxicating hemp market, it is unlikely to be much of a windfall beyond the near future. Those relying on this decision to provide legitimacy to their business should proceed with extreme caution based on previous responses to loopholes and governmental eagerness to regulate intoxicants such as delta-8. To believe that these products will be held to a lesser standard than state-regulated (and soon enough, federally-regulated) marijuana products would be short-sighted and naïve.
As mentioned in the first post of this series, it is unlikely that AK Futures LLC v. Boyd St. Distro, LLC (9th Cir. May 19, 2022) will be viewed as the conclusive victory that some in the delta-8 THC arena are hoping for. In this post, we will explore what might be accomplished by (or more accurately, what backlash might come from) this and other similar decisions.
The debate surrounding delta-8 THC and the proper regulation of intoxicating hemp products has accelerated greatly over the last several months, fueled by multiple court decisions, federal policy actions, and new state laws. Not least of which is last May’s decision in AK Futures LLC v. Boyd St. Distro, LLC, No. 21-56133, 2022 WL 1574222 (9th Cir. May 19, 2022). This case provides a great deal of clarity for many seeking to enforce trademark protections for hemp products. It is a major win for intoxicating hemp maximalists, and in hindsight, it feels like the start of many that came this summer. However, it would be unwise to see these developments as a final green light to produce and sell delta-8, delta-10, hemp-derived delta-9, and other intoxicating hemp products across the country.
In our previous post, we highlighted that the United Stated Department of Agriculture (“USDA”) published its final rule (the “Final Rule”) regulating the production of industrial hemp under the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”). The Final Rule supersedes regulations set forth in the interim final rule published on October 31, 2019 (the “Interim Rule”).
The Final Rule was initially scheduled to take effect on March 22, 2021. However, a White House Memorandum issued by the Biden Administration on January 21, 2021 (the “Biden Memorandum”) effectively “froze” all regulations that had been published in the Federal Register but had not yet taken effect, including the Final Rule. The Biden Memorandum also granted agencies (such as the USDA) the authority to “consider opening a 30-day comment period.”
As part of the transition to the Biden Administrations, the USDA and many other agencies took this opportunity to review new and pending regulatory actions, including the Final Rule.
Delta-8 has been the topic of many conversations over the last year in various cannabis circles. Is it legal? How will hemp-derived Delta-8 THC impact the state-legal marijuana industry? How is Delta-8 THC extracted from hemp and in what quantities? Much of this was already covered in a recent webinar hosted by our firm a
The Federal Trade Commission (“FTC”) has joined the U.S. Food and Drug Administration (“the “FDA”) in enforcing laws related to marketing CBD products. The FDA has historically issued warning letters and pursued companies that illegally market CBD products with claims the products may treat medical conditions. The FTC has joined the FDA is this pursuit and announced settlements with six different CBD companies involves fines ranging between $20,000-$85,000 in addition to notifications provided to consumers. Pursuant to these settlement agreements the respondent companies are also prohibited from similar marketing efforts in the future, any health claims must have scientific evidence to support them.
Industry actors making any health or therapeutic claims are vulnerable to action by agencies such as the FDA and FTC, however, they may also be subject to civil suits based on enforcement by those agencies. In April of 2020 Charlotte’s Web Holdings, Inc. (“CWB”) was served with yet another (its second) class action lawsuit due to how their products are labeled. Benson v. Charlotte’s Web Holdings, Inc., No. 1:20-cv-00418 (N.D. Ill.) The suit based a significant portion of the allegations on FDA guidance:
“Based on available evidence, FDA has concluded that THC and CBD products are excluded from the dietary supplement definition under section 201(ff)(3)(B) of the FD&C Act [21 U.S.C. § 321(ff)(3)(B)]. Under that provision, if a substance (such as THC or CBD) is an active ingredient in a drug product that has been approved under section 505 of the FD&C Act [21 U.S.C. § 355], or has been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public, then products containing that substance are excluded from the definition of a dietary supplement”
Companies facing enforcement actions by the FTC may similarly be subject to civil allegations.
WHAT DOES THIS MEAN FOR YOUR BUSINESS