Regulations? But it doesn’t have THC!

So, there are many stores that are selling CBD products, or, in some cases, are exclusively selling hemp or THC products, under the belief that they are not regulated and do not require special licensing to distribute. Such beliefs are misplaced and will, as time goes by, likely subject non-compliant retailers and manufacturers to serious sanctions and/or punishment. Hemp and CBD plants are still considered by law in many States and the Federal Government to be a marijuana related product, and they are heavily regulated. Marijuana Business Daily has an article published on October 15, 2018, describing generally, the problems that such retailers are facing. https://mjbizdaily.com/chart-the-days-of-cbd-only-stores-may-be-numbered/ . Three States with large medical marijuana programs have recently implemented administrative rules for the industry that require CBD and Hemp products to only be sold in licensed provisioning centers (or dispensaries); namely, Ohio, Michigan and California.

These also happen to be three of the five largest medical cannabis markets in the Country. For a market that had nearly one billion dollars ($1,000,000,000.00) in total market sales last year, these regulations could put a serious damper on what has been, to this point, a fairly open and unregulated marketplace.

 

What is CBD and Hemp?

CBD is the short name for the chemical compound known as cannabidiol. Cannabidiolis the non-psychoactive chemical in marijuana, and certain strains of the marijuana plant can grown to have high cannabidiol content and little to no tetrahydrocannabinol or THC, the psychoactive chemical compound in the marijuana plant. CBD has been demonstrated to have certain positive health effects, in much the same way as THC. CBD is used by consumers to treat chronic pain, anxiety, and even cancer. Recently the FDA approved the use of cannabidiol to treat childhood epilepsy, and removed cannabidiol from the list of Schedule 1 narcotics for a specific drug manufacturer so they could sell an anti-seizure medication for childhood epileptics called Epidiolex. Industrial hemp is another form of the marijuana plant which has very low no THC, but which is used to make fabrics, paper, rope and other products which can be used in manufacturing. Many states had some regulations, and the Federal Government also imposed rules on how, where, and when hemp could be possessed, used and processed.
Now, however, with States regulating THC for medical marijuana purposes, as noted above, several States have taken the opportunity to impose regulations on the sale of CBD and hemp as well. In Michigan, for example, the Bureau of Licensing and Regulatory Affairs, through the Bureau of Medical Marijuana Regulation, sent out a clarifying bulletin, indicating that CBD and Industrial Hemp were considered marijuana for purposes of Michigan Law (https://www.michigan.gov/documents/lara/CBD_Hemp_Advisory_Bulletin_622872_7.pdf). California and Ohio have taken similar positions in recent days.

 

So, I Want to Keep Selling CBD Products What Can I Do?

Well, if you live in Michigan, Ohio, or California, you will have to obtain a provisioning center license (Michigan) or a dispensary license (Ohio & California). Otherwise, you won’t be able to lawfully sell CBD or hemp to customers. In Michigan, you could become a registered caregiver, however, that will only allow you to lawfully sell CBD or hemp products to the five registered qualifying patients who are attached to your license. Sales under those circumstances would be severely limited, both in scope and profit margin. So, if you are selling CBD or hemp products to clients out of your generic storefront in Michigan, I wouldn’t do that anymore. The State is beginning to crack down on non-complaint sellers of these goods and will not pass up an opportunity to make an example of businesses that are not following the rules on this front. If you have questions about your current business practices, or if you are desirous of obtaining a State License to provision or dispense CBD or hemp based products, please give us a call and we can advise you about the requirements and your eligibility to obtain such a license in Michigan, or elsewhere.

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