Hemp CBD Q&A – A Few More Questions and Answers

On September 17, I, along with my colleagues, Griffen Thorne and Vince Sliwoski, held a webinar entitled “Hemp CBD Q&A,” a recording of which is available on our blog.During the webinar we received more questions than we could answer, so today, we go over a few of these remaining questions.
Does any state have a model law(s) governing the licensing of in-state hemp processors?Many states, including Oregon and Colorado, expressly regulate the processing of raw hemp. However, there is no uniform licensing program across state lines. That said, most states where processing is allowed mandate that processors secure a license from their state Department of Agriculture and comply with a wide range of regulations, including but not limited to testing and record keeping requirements.
If the THC % changes over time in storage does that put the warehouse at a legal risk for non-compliance or the grower/owner? In light of the recently published Interim Final Rule by the Drug Enforcement Administration (the “Rule”), anyone handling hemp that contains more than 0.3% THC level on a dry weight basis is at risk of criminal liability. The Rule, in part, provides that “any such [cannabis] material that contains greater than 0.3% of D9 -THC on a dry weight basis remains controlled in schedule I.” To avoid such situation, the hemp should be packaged and stored in a manner that reduces the risk of THC fluctuation.
If I am interested in selling hemp FDA compliant topicals nationally in the US as a wholesaler, do I need any particular license in the states where I sell?It depends on the state. You would need to check the states’ applicable laws and regulations and determine whether state and/or local licenses, permits or registrations apply to wholesalers.
What are the developments with Payment processors accepting CBD? Most banks still seem to be on the sidelines and fees are DOUBLE for CBD retailersThis issue remains unresolved and unregulated. Payment processors are adopting subjective policies on whether to work with Hemp CBD companies and on whether to process payments for Hemp CBD finished products. This is due, in part, to the grey legality of Hemp CBD products. At the federal level, the FDA takes issue with the sale and marketing of Hemp CBD ingestible products because the agency approved CBD as a drug ingredient before these products were marketed as foods and dietary supplements. Nonetheless, states have adopted their own legal approaches to regulating Hemp CBD products that are not necessarily consistent with the FDA’s current position and/or that altogether violate that position. Accordingly, this conflicting regulatory framework is placing Hemp CBD companies in the high-risk category, making it more challenging and expensive to secure merchant accounts. Because CBD accounts frequently get shut down, Hemp CBD companies are advised to open several accounts as a backup plan. It is also recommended to work with brokers who specifically assist Hemp CBD companies and who have a strong sense of which payments processors work best with the industry.
We are a large commercial (public) cold storage group. We have been asked to store Industrial Hemp in our buildings. Our concerns relate to insurance coverage, risk management, and storing legal products. Questions:(1) How can we verify that Industrial hemp is being produced by a certified (legal) grower? You should request the grower’s license number and contact the state department of agriculture in which they operate to verify that their license is unexpired, unsuspended and unrevoked.(2) How can we verify that the Delta 9-THC % is at or below the legal limit of .3%? You should request a certification of analysis (“COA”) from the grower for pre-harvest and post-harvest testing from an accredited lab to ensure the hemp never exceeded the 0.3% THC limit imposed under the laws of the state where the hemp is cultivated. Moreover, you should ask the grower whether they are using packaging and storing methods and precautions to reduce the risk of THC level fluctuating post-harvest.(3) Is there any FDA or USDA guidance to support these two questions? No, the FDA only regulates certain categories of finished hemp products, including foods, beverages, drugs, cosmetics and tobacco products, so the agency would not regulate raw hemp. Moreover, the FDA has yet to regulate the manufacture, sale and marketing of finished hemp-derived products. When it comes to the USDA, which oversees the production of hemp, it has promulgated rules that address, in part, the storing of harvested hemp prior to the delivery of the crop for further processing. The USDA rules mandate that these storage locations be listed on the producer’s license, specifically when the hemp is undergoing testing, so the agency or the state which oversees the production of hemp, may have access to said hemp to conduct inspections.
Any updates on a timeline for FDA approval?I’m assuming you are referring to the FDA’s approval of the sale and marketing of Hemp CBD foods, beverages, dietary supplements and other finished products other than drugs. In May, the FDA submitted a proposed plan entitled “Cannabis and Cannabis-Derived Compounds: Quality Considerations for Clinical Research,” to the White House’s Office of Management and Budget (“OMB”), which OMB reviewed in July. The plan has yet to be made public but according to a statement made by an FDA spokesperson, the plan could inform the agency’s approach to developing regulations for finished Hemp CBD products. The FDA is also soliciting the public’s input on the regulation of these products but remains unsatisfied with the studies presented to support the safety and efficacy of CBD.Hemp stakeholders and Congress continue to pressure the agency to regulate these products as dietary supplements. Unfortunately, it is unclear when the agency will issue proposed regulations.
Thank you to everyone who attended. We are planning a few more webinars between now and the end of the year so keep an eye out for upcoming announcements.
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