1st BATCH OF FILES AVAILABLE NOW!

Seems that just about everyone watching the intoxicating hemp bev space right now has the same questions. First, what are the chances that Congress either moves the goal posts or changes the rules of the game on federal hemp regulation before Nov 12? Recall, without action, that's when products over 0.4 mg per container are set to be redefined as marijuana and a Schedule I controlled substance. And what happens if Congress does what Congress has gotten pretty good at doing in recent years &mdash; nothing? Clock Ticking Before Hemp Bevs Become Controlled Substances Again; Risk for Distribs? The Nov 12 deadline for hemp-derived THC products over 0.4 mg per container is a bit like midnight for Cinderella. If the clock strikes without further action by Congress, "anything above" that threshold "pumpkins into either marijuana or synthetic cannabinoids," that is, "a controlled substance." So explained Michelle Bodian, experienced cannabis and hemp atty and in-house counsel for Nowadays, during NABCA Legal Symposium this morn. At that point it "can't be moved across state lines," added Diana Eberlein, chair of the Coalition for Adult Bev Alternatives. And state cannabis laws should apply, likely requiring "redefinitions" for states that treat hemp-derived THC separately. In short, "every state" with a legal mkt for hemp products is "going to have some fun," Michelle quipped.That starts causing problems for retailers and wholesalers "if you have an illegal product" in warehouses at that deadline, atty Jennifer Niesen explained. So without change, downstream players will need to be "whittling down [their] product before then." Wholesaler contracts will matter, seeing if there is a "buy-back provision" for an event akin to a recall. There's also an "enforceability issue" for the contract itself, as some portions may become "null and void, if not all of it," Jennifer continued. For distribs, "federal basic permits are at stake" if they're storing illegal product. She shared particular concerns for "smaller wholesalers," including houses seeing declines, especially in craft, since "these intoxicating beverages were on their trucks" and "filling that margin."Retailers Slowing Roll?; No Illicit Market for Bevs, Begging for Regs Among retailers, "some have already kind of stopped bringing on new brands" in response to the looming federal deadline, Diana shared. Lots of folks ask if states can "just push through and continue to" go their own way on hemp, she commented. States certainly operate cannabis regulatory structures, despite fed law. States could choose to take the same approach. But "from a logistics standpoint," as Jennifer explained, it gets "a lot more complicated," Diana agreed. There's definite "contractual uncertainty," so she's paying close attention to how these players "work with certain suppliers post-June, July."And the challenge is different for low-dose bevs than for other hemp products. "There is no illicit market for these products," Diana said. If this Congress doesn't act, some in the industry are preparing to find ways to "hold on" until a new Congress is seated that may be more likely to pass hemp regs, working to "keep themselves afloat" by going into dispensaries, for instance. But that's not been a viable channel for low-dose bevs, Diana reminded. So the fear is that "these products go away," while the kinds of products that lawmakers fear, high-potency edibles with lookalike branding, "go deep into the black market." Those are the kinds of products most lawmakers want out of the market. And "we do, too. We want those products gone," Diana reminded.She doubled down on her plea for regulation and taxation, joking that her group may be the only bizzes going to lawmakers asking for taxes. Broadly, she's hopeful that a regulatory structure akin to alcohol, including a 3-tier system, could help "clean up the marketplace." Diana also continued to distance low-dose hemp bevs from other members of the hemp industry that have sued states enacting regs they didn't like. In her view, "we need to dedicate ourselves to getting regulation through" and "not let perfection be the enemy of progress."IL Proposal Uses Alc Bev Reg Model Without Key Provisions and Protections Diana finds that even some lawmakers that struggled with accepting legal THC "can wrap their mind around intoxicating beverages" because of the familiarity with alcohol. But the devil's in the details. Jennifer explained bills currently under consideration in Illinois, which take very different approaches. A Senate bill sends hemp products to be regulated under the agriculture dept and look more like cannabis regs. But a House bill would put hemp THC under state liquor laws, using licensing and age-gating akin to alcohol, plus a 10 mg per 12-oz container cap. But it "leaves off" plenty of other provisions that appear in alcohol laws like "trade practice protections," Jennifer pointed out. There's "no mention of the slotting fee rules" and there are "no wholesaler protections." Advocates will probably need to address those things, "if that bill wants to get the support of the industry," especially the wholesale tier, she commented."Opening Salvos" Already in Congress; Will Any Pass? "Obviously, November 12 was a bummer of a day," Michelle downplayed. But the silver lining is that it brought "a lot of headlines" that spurred questions and conversations around other regulatory approaches, she explained. Proposals already introduced in Congress include a straight repeal of language passed last Nov, a 2-yr extension of the effective date on that language and far more robust regulatory proposals, often including some level of state deference, but generally not including taxation, she explained. And those are just "the opening salvos," with more "in the works."But will any of them pass? That proved a harder question to answer, of course. Advocates for hemp bevs are working on multiple strategies at once, Diana explained, given how unpredictable things are, including signals from the Trump Admin. Lawmakers most frequently ask about age-gating and safety, she said. However, "what passed through appropriations" last fall didn't address any of that, Michelle reminded. Could that help encourage lawmakers to get behind passing a more fulsome set of regs?Both Michelle and Diana referenced the Trump Admin's exec order on marijuana rescheduling, which also included a couple of pages of commentary on hemp, a good sign, in Michelle's view. It signals that the White House wants to protect "therapeutic products," many of which would also be barred in Nov, Diana noted. Language around "full spectrum" hemp products and a medical pilot program point to a need for addressing the fed definition of hemp and the 0.4 mg cap, as well, Michelle commented.

Uncertainty Still Reigns for Hemp as Fed Deadline Looms; Aim to Mirror Alc Bev Regs Misses Key Elements

Publishing Info