State Adopts New Restrictive Policy on CBD Sales That Is, at Least in Effect, Quite Similar to the Old Policy

The Maine Department of Agriculture has begun its next phase restricting sales of CBD in the state. Readers will recall that, over the summer, the State took the position that CBD sold in Maine had to be derived from hemp grown in Maine. The reality, of course, is that only a small portion of CBD sold in Maine has its origins in Maine and that policy expired in September.

Now, the State is handing out notifications to retailers and others in the CBD business that ingestible CBD products sold at retail in Maine must be produced in Maine. Here is a copy of that notification received by one retailer in the state:

This sounds different in substance than the State’s policy over the summer. Now, CBD sold in Maine doesn’t have to be derived in Maine. But the reality is that this policy will have largely the same effects since a huge portion of the CBD that is imported into Maine has already been incorporated into food products and is shelf-ready.

Trying to understand the State’s motivations for this latest policy shift, it appears to be related to the federal ban on CBD sold in edible products. The nuance of the State’s position isn’t entirely clear, but as we hear more we will post it here.

The Non-Crackdown on Out-of-State CBD Comes to an End

About a month ago, I noted that the State wasn’t really walking the walk. At the time, the State had only recently began informing CBD vendors that any food products containing CBD derived from hemp grown outside of Maine could not be sold in Maine. This ended up being much ado about nothing. As the law changed yesterday and LD 1749 takes effect, it doesn’t appear that the State ever took any real steps to enforce what it interpreted as a prohibition on out-of-state CBD. Practically speaking, none of this matters anymore, since the prohibition on out-of-state CBD is now officially over. However, I’m re-posting here a Bangor Daily News op-ed from the  several weeks ago which begs the state for a more consistent policy with regards to CBD.

For your consideration: Maine Needs Consistent Policy on Hemp and CBD

The Non-Maine CBD Crackdown: What’s Become of It?

As we’ve previously discussed, Maine is claiming that, until September 19, food products sold in Maine cannot contain CBD grown elsewhere. So how is this policy working out in practice?

We’ve heard from several folks in the industry that the "crackdown" isn’t really materializing. Inspectors from Maine’s Department of Agriculture have been talking about this issue with some retailers in the state, but, in the instances we’ve heard about, inspectors have either told retailers that they’re not interested in checking to determine whether edibles for sale are in compliance, or the inspectors have provided a "verbal warning" to those selling non-Maine CBD products, without any explanation for what this actually means. 

I’d love to hear from anyone who has had any different experiences so far this month, but, so far, at least anecdotally, the State may be taking a conservative approach to enforcement.

Is This the Beginning of Another Maine Crackdown on CBD?

Maine regulators are going after CBD food products again, it appears. Inspectors from the Department of Agriculture, Conservation and Forestry have been handing out the letter pasted below to retailers and others in Maine over the past week. According to these "guidelines," the State is interpreting LD 630 to require that any CBD edibles contain CBD derived from Maine-grown hemp. Given the language in LD 630, this approach seems like it could cause more problems than it prevents, and could be putting the state on the fast track to litigation. Especially since the State is promising to begin enforcing this new policy on August 1, less than three weeks from now.

CBD Largely Banned in NYC

New York City is nine days into a CBD prohibition. Straight from the NYC Health Department website: “As of July 1, 2019, the Health Department is embargoing food and drink products that contain CBD – the products will have to be returned to the supplier or discarded.” And beginning October 1, 2019, NYC will begin fining retailers and food service establishments that sell CBD products.

With this ban, New York joins a number of other large cities, including Los Angeles, Portland (Oregon), San Diego, and Seattle. Each of these cities is relying on the hardline position of the FDA that CBD as a food additive is illegal, period.

It should be noted that the July 1 CBD ban is the latest iteration of a months-long process in NYC where the City has taken an increasingly hardline approach to CBD. As early as last February, the City announced it was banning the sale of CBD in food service establishments. But enforcement has been lax – this newest policy promises to strengthen enforcement and expands the ban to include retailers. We will have to watch and see if this increasingly restrictive approach to CBD in NYC (and other major cities) creates a template for other jurisdictions.

VLA Committee Recommends Changes to Adult Use Rules

The adult use rules necessary to launch Maine’s new market are still winding their way through the legislature, but they’ve been voted out of committee with a number of changes, and should be sent along (in one form or another) to the Governor in the next couple days. The majority report from the Veterans and Legal Affairs Committee contains the changes to the rules and some related changes to statute. This was handed out during amendment review in the committee yesterday.

While you can peruse the majority report for all the details, a couple of things stand out:

1. The committee is amending statute to state that adult use edibles are not “considered to be adulterated” under Maine’s food code. This places adult use edibles in the same ranks as medical marijuana edibles and, though in different statute, foods containing CBD. 
2. You’ll see that in Section 8 of the majority report, the legislature does not actually “redline” the rules created by the Office of Marijuana Policy. Rather, the OMP will receive these specific directives from the legislature, and it will be up to the OMP to put the rules in a final form consistent with these directives. This leaves a few things up in the air about the rules until we see the OMP’s final version. 
3. The legislature is directing the OMP to eliminate the terms “other interested parties,” “party of control” and “true party of interest” from the adult use rules. The rules will “substitute for those deleted terms the statutory terminology in Title 28-B, subchapter 2 regarding the characterization of ownership interests.” This directive should serve to bring the rules in line with the statute in terms of residency requirements for officers and directors, as well as for owners of marijuana establishments. We have in the past written on the residency requirements generally (here, here, and here). 

Stay tuned as we expect this to move quickly through the legislature and on to the Governor.

The TSA Warms up to CBD in Words, but What About Deeds?

So the TSA claims to have changed its policy over the weekend to permit travelers to carry hemp-derived CBD products with them in flight. The TSA website has been updated to state that “products/medications that contain hemp-derived CBD or are approved by the FDA are legal as long as it is produced within the regulations defined by the law under the Agricultural Improvement Act of 2018.” 

At first read, this seems like oils, gummies, topicals, edibles – they’re all a go! Prepare for take off! But then we get down to enforcement and implementation, and I’m left scratching my head. The Agricultural Improvement Act of 2018 (or the 2018 Farm Bill, as it’s better known) does legalize hemp and hemp products, but only when grown under certain requirements, with state and/or federal approval. How on earth is a TSA agent going to know whether your CBD is derived from hemp that was legally grown in Kentucky or illegally grown in Texas? (Texas may be a bad example since hemp/CBD is about to be legalized there too, but you get the point.)

I for one doubt that TSA agents will be specially trained in the legality of CBD and hemp. The more likely scenario is that this change in TSA regulation is intended to accommodate FDA-approved Epidiliox, the first federally approved drug containing CBD. If any other form, it’s hard to know how TSA agents will treat CBD for the foreseeable future.