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‘Battle royale’: Cannabis regulatory bills pit regulator against some marijuana companies

An effort by state regulators to curb out-of-state cannabis sales has major business interests crying foul.

The Washington Liquor and Cannabis Board has requested a change in the law that would allow it to ban the sale of intoxicating substances derived from hemp. The request follows rulemaking that began last year after some retailers were found to be selling products made from hemp, which, unlike marijuana, is legal under federal law.

Growers in the state argue the ban is necessary to avoid an existential crisis for their businesses, since hemp growers can supply raw material for pennies on the dollar, compared to licensed marijuana growers who must comply. a costly set of state regulations.

But at least one major cannabis industry trade organization has proposed its own legislation to refute the Liquor and Cannabis Authority’s plan, saying the state will stifle the growth of an industry that generates tens of millions of dollars. dollars in tax revenue each month.

“It’s going to be the big battle royale this year,” said Chris Marr, a former state legislator and member of the Alcohol and Cannabis Council, who now consults with clients in the legal marijuana market in Washington.

The Liquor and Cannabis Commission legislation has bipartisan sponsorship in both houses of the Legislative Assembly. It restricts the use of “non-harming cannabinoids,” including the cannabidiol found in hemp, only to “enhance the concentration of non-harming cannabinoids” for products sold at legal retailers.

Justin Nordhorn, director of policy and external affairs at the Liquor and Cannabis Authority, said the bill recognizes that hemp-derived THC is an intoxicant and potentially poses a safety risk to users. A recent agency fact sheet supporting its regulation noted that poison control centers nationwide received 660 calls reporting exposure to this version of THC in the first seven months of 2021.

“We realize that [hemp THC] is less potent,” Nordhorn said in an interview last week, citing the limited but growing evidence of the drug’s effect on the body. “However, it’s not like it’s not powerful at all.”

While it can be made using factories that are outside the agency’s authority to test and track, Nordhorn said, there are also potential health concerns. The agency has also seen products that exceed the maximum THC dose per serving, as required by law.

“These products need to be regulated,” he said.

It’s a position shared by those who say the state bill goes too far, said Vicki Christophersen, executive director and lobbyist for the Washington Cannabusiness Association. The law’s restriction on non-harmful cannabinoids, coupled with a measure that would require rulemaking before the sale of any “synthetically derived cannabinoids,” puts Washington at a competitive disadvantage to other states that allow substances to enter their markets safely, and the illicit market, she says.

“It seems like the bill doesn’t really address the overarching problem,” she said.

WACA, which represents growers of all sizes, retailers and processors, as well as those in the hemp industry, has proposed its own rebuttal legislation. This bill lists specific cannabinoids, beyond hemp-derived THC, and allows them to be introduced into products for sale at retailers, subject to potency testing and labeling.

Their bill better positions the state as the industry approaches the 10th anniversary of the passage of Initiative 502, which created the legal recreational market in Washington, Christophersen said.

“We don’t want to come back every year and say, now we’ve found this thing,” Christophersen said. “Let’s define an altering cannabinoid, so we’re all in agreement.”

The explosion in hemp growth after the passage of the Farm Bill, which began with the sale of hemp-based THC products in some states that had not allowed marijuana sales, created the situation. current for the council, said Marr.

“We’re about to discover a whole new science around the plant,” he said.

Another faction of marijuana growers wants to stop this new science from not only undermining those who have operated in the legal market for nearly a decade, but also upending people’s perceptions of what they put into their bodies.

“For me, the important part is the distinction between the natural and the synthetic,” said Micah Sherman, owner and operator of Raven, a mid-level producer and processor at Olympia. He is also a board member of the Washington State Sun and Craft Growers Association, which advocates for the interests of largely outdoor growers across the state.

Sherman said the legislation is a good first step toward regulating products that can be made cheaper and avoid scrutiny by state officials. But he said if such products were to be made available, they should be separated in stores from naturally grown flowers and products made from them, while being clearly labeled as a synthetic product.

“We don’t know if these things are safe or not,” Sherman said. “We don’t have thousands of years of human consumption to look at.”

Christophersen said there is no distinction between hemp plants used to distill CBD and flowering marijuana plants that grow in state production facilities. The only federal law distinction between hemp and marijuana is the level of THC, which cannot exceed 0.3%.

They’re the same plant, Christophersen said, they just differ in cannabinoid content, meaning they should be allowed under the regulations to be sold in the same market.

“There’s nothing wrong with getting cannabinoids safely,” she said. “It’s just about knowing how you do it safely.”

The state council-backed bill, Senate Bill 5547, and the industry bill, Senate Bill 5767, have been introduced in the state legislature. . A hearing is scheduled for Thursday before the Senate Labor, Commerce, and Tribal Affairs Committee.