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

Mainers May Be Hot to Invest in Marijuana, but Out-of-State Money Is Still a Necessity

The website patch.com has posted a report that Maine is the no.1 state for marijuana investments. This doesn’t mean that Maine has the most investor dollars in marijuana, but just that Maine investors are more interested on average in marijuana stocks than investors in other states. I took interest in this report because it brings us back to our concerns over Maine’s restrictions on out-of-state investment in marijuana businesses. Sure, a high percentage of Maine residents are interested in the pot sector, but there just aren’t that many Maine investors compared to other states, and even fewer high-dollar investors. 

Starting a sophisticated marijuana business takes a lot of capital and banks are lending to this sector, so investment is needed. By necessity, the bulk of this investment needs to come from out of state to really jumpstart Maine’s adult use sector. Overly restrictive laws that prohibit this investment will only stifle the industry.

State Audit Gives New Hampshire Therapeutic Cannabis Program a Failing Grade

The results of a June legislative performance audit show that, in 2018, the State of New Hampshire failed to issue identification cards within the statutory deadline of five days after approval on 98.4% of the applications for the Therapeutic Cannabis Program. On average, in 2018, identification cards were received within 14 days after approval of the application. The 2018 numbers are an improvement over 2017, when the State failed to provide any identification cards within five days of application approval. The average turnaround time in 2017 was more than 24 days after application approval.

The failure, since inception, to provide adequate staffing and funding for the Therapeutic Cannabis Program has led advocates to push for a home-grown option. The House and Senate passed HB 364 this spring, providing a home-grown option, but Governor Sununu vetoed the bill on August 2, 2019. The House will have an opportunity to override the veto on September 18, but the prospects for success are small.

NCUA Advises Credit Unions They Can Provide Financial Services to Hemp Businesses

Last week, the National Credit Union Administration (“NCUA”) released interim guidance advising federally insured credit unions that they may provide certain financial services to legally operating hemp businesses. The interim guidance was released in response to the passage of the 2018 Farm Bill in December 2018 that removed certain hemp-derived products, including cannabidiol, from the list of Schedule 1 drugs in the Controlled Substances Act. 

The NCUA advises credit unions that they need to “understand the complexities and risks involved” if they choose to serve hemp-related businesses, and reminds credit unions that they “must have a Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance program” that addresses the risks related to hemp-related businesses. While the guidance encourages credit unions to “consider whether they are able to safely and properly serve lawfully operating hemp-related businesses within their fields of membership,” it also reminds credit unions of the “long and successful history” many credit unions have had in “providing services to the agricultural sector.”

The NCUA will issue additional guidance after the U.S. Department of Agriculture publishes its final regulations and guidelines.

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.

FDA Official Suggests that CBD will be banned from foods for the foreseeable future

We’re tracking statements from the FDA regarding CBD in food. With state policy fluctuating so wildly on this issue and often attempting to mimic federal laws, the FDA’s evolving position on CBD is important.  So it’s notable that earlier this week a member of the FDA’s cannabinoid working group, Lowell Schiller, reaffirmed the FDA position that “under current law, it’s unlawful to sell a food or dietary supplement with CBD in interstate commerce.” He went on to state that significantly more research is needed before this changes at the federal level.

Keep in mind that these are policy statements, not explicit laws or regulations particular to CBD, from the FDA. So their legal force is subject to challenge. Regardless, for the time being, as CBD becomes more ubiquitous nationwide and states explicitly approve foods containing CBD, federal policy will continue to diverge from state law and the reality on the ground.

Draft Marijuana Licensing Rules Released for City of Portland

As local readers likely know, Portland completed its zoning regulations for marijuana stores last February. But at the time, the City deferred on a number of decisions such as what stores will be allowed to sell, and what criteria will need to be met to be able to open a retail store. Now the City has taken a big step toward answering those questions. The City released draft licensing rules last week. 

We’re still combing through the rules, but some notable takeaways off the bat: staff are proposing a cap of 20 total retail licenses, and a 250’ buffer between stores “to avoid having stores cluster in one location and to avoid over-saturation of the market." City staff are also offering the Council options for what seems to be essentially a first-in-time licensing system or, alternatively, a weighted lottery. Staff have said they prefer the first-in-time system.

Staff will be presenting their recommendations to the Economic Development and HHS Committees tomorrow, August 6, at 5:30 pm. This will be open to the public.