March 2025 Newsletter
Regulated Cannabis > Intoxicating Hemp? | Big News in CA, NV, and NY | Eric Espinoza is our PRO of the Month
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With Intoxicating Hemp Bans on the Rise, Investors Should Focus on State-Regulated Cannabis Instead
Legal Status of Intoxicating Hemp-Derived Cannabinoids in Each State:
The proliferation of intoxicating hemp-derived products, such as delta-8 THC and THCP, has introduced unregulated and potentially unsafe items into the consumer market. Unlike state-licensed cannabis operators, who must adhere to stringent regulations—including child-resistant packaging, comprehensive testing, and rigorous licensing—producers of these hemp-derived products often bypass such oversight. This regulatory disparity not only poses health risks to consumers but also creates unfair competition for compliant cannabis businesses.
The rapid expansion of the intoxicating hemp industry has significantly encroached upon the market share of regulated dispensaries. Many consumers remain unaware that they are purchasing products not subjected to the same safety and quality standards as those found in state-licensed establishments, leading to potential deception and health hazards. In response, numerous states are implementing measures to regulate or ban these unregulated products. For instance, Ohio's Senate Bill 86 aims to restrict the sale of intoxicating hemp items to licensed dispensaries, thereby ensuring consumer safety and leveling the playing field for compliant operators. Similarly, in New Jersey, the Cannabis Regulatory Commission has initiated a crackdown on intoxicating hemp products, requiring retailers to obtain proper licensing and adhere to the same safety protocols as marijuana products. This move is designed to eliminate unlicensed sales and protect consumers from potentially harmful substances.
At the federal level, legislative efforts are underway to address the challenges posed by intoxicating hemp products. U.S. Senator Ron Wyden introduced the Cannabinoid Safety and Regulation Act, which seeks to direct the Food and Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (TTB) to regulate these products. The proposed legislation aims to establish a federal framework for the oversight of hemp-derived cannabinoids, ensuring product safety and consistency across states.
Additionally, a draft amendment to the Farm Bill, introduced by U.S. Representative Mary Miller, poses significant implications for the hemp industry. This amendment seeks to alter the definition of hemp, potentially restricting the production and sale of hemp-derived cannabinoids. Industry stakeholders express concern that such changes could dismantle the progress made since the 2018 Farm Bill, which legalized hemp cultivation and spurred economic growth in this sector.
Furthermore, attorneys general from 20 states and Washington, D.C., have called on Congress to close the "loophole" created by the 2018 Farm Bill that allows the proliferation of intoxicating hemp products. They advocate for amending the definition of hemp and clarifying states' authority to regulate these products, emphasizing the need for consumer safety and consistent regulation.
These federal and state-level enforcement actions signal a clear trend toward tightening regulations on unregulated cannabis sales, including intoxicating hemp products. For operators and investors, this underscores the importance of focusing on the regulated THC industry for long-term success. Investing in compliant operations not only aligns with evolving legal frameworks but also builds consumer trust and ensures sustainable growth in the cannabis market.
Industry News
The top stories this month from key markets:
CannaMLS Features to Know
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