The Washington State Liquor and Cannabis Board ("LCB") issued an interpretive statement on July 22, 2021 ("Notice"), with the aim of resolving questions surrounding the legality of processors making delta-9 THC from CBD. The LCB concluded that cannabis processors cannot convert hemp-derived CBD into delta-9 THC in the legal cannabis market. Processors engaging in these activities may be subject to administrative violations (“AVNs”) or criminal prosecution.
On December 20, 2018, President Trump signed into law the Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) to replace the expiring 2014 Farm Bill. The 2018 Bill, which passed with strong support in both the House and the Senate, removed hemp from the Controlled Substances Act—but does that mean that hemp is legal?
While hemp is no longer a controlled substance and subject to enforcement under DEA regulations, hemp and hemp-derived products (such as CBD) are still heavily regulated. So, who regulates these products? Though the landscape is evolving quickly, each of the following agencies and groups play a vital role in determining whether you may grow, process, sell or market hemp in your state.
New York Governor Andrew Cuomo’s Proposed Legislation on Legalization of Cannabis
Under the leadership of New York Governor Andrew M. Cuomo (whose party also controls the State legislature), the Empire State appears poised to become one of the next states to legalize the cultivation, processing, distribution, sale, and adult use of cannabis for recreational purposes.
Indeed, on the heels of a series of public hearings and a report from the New York Department of Health, advocating for decriminalization of cannabis (not to mention similar legislation under consideration in New Jersey), Gov. Cuomo unveiled the proposed legislation, the Cannabis Regulation and Taxation Act (CRTA), to do just that—while also expanding the state’s nascent medical marijuana program and differentiating between industrial hemp and hemp cannabis markets.
Monitoring and participating in administrative notice-and-comment periods may pave the road to faster access to market for CBD (cannabidiol) and hemp purveyors. While we are all familiar with lawsuits and litigation, not everyone is as familiar with the government’s regulatory administrative procedures, and in particular, the notice-and-comments period that commonly accompanies proposed rules. In order to bring suit to challenge a proposed rule in a court of law, a group must first “exhaust all administrative remedies.” In other words, if you don’t submit questions and arguments to the government during the notice-and-comment period, then a court likely won’t help you change the rule at a later date.
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Foster Garvey’s Cannabis practice group comprises a premier legal counsel team who provides a full range of legal services such as regulatory compliance, marijuana licensing, business finance, contracts, labor and employment, health care, real estate, intellectual property, litigation and dispute resolution, technology and tax. Our team possesses deep and diverse industry experience and has counseled clients across virtually all industry sectors. We understand the inherent challenges that licensed marijuana and ancillary businesses in Washington state, Oregon and Alaska are burdened with in this highly regulated industry as they deal with onerous state and local regulations as well as uncertainty resulting from federal law.
We are committed to helping our clients achieve their business goals while navigating the intricacies in this rapidly changing area of law. We prize innovation and entrepreneurship, and closely monitoring industry trends.