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Cannabis news briefs: Trump signs farm bill legalizing hemp, FDA responds; House Rules Committee Chairman signs onto federal cannabis bill

By Rick Schettino
Dec 24, 2018

The big news of the past week, of course, is that President Donald Trump signed the 2018 Farm Bill, officially removing hemp from the DEA’s list of Schedule I controlled substances. Federal oversight of hemp, marijuana’s non-intoxicating relative, will now move from under the Department of Justice and the Drug Enforcement Agency to the U.S. Department of Agriculture. The final bill which included language inserted by Republican Senate Majority Leader Mitch McConnel passed both chambers last week with bipartisan support.

The signing of the bill opens up a myriad of possibilities including interstate commerce, financing and investment opportunities, research and development opportunities, and, possibly, opportunities not yet imagined.

To receive the blessings of federal regulators, states must submit a regulatory plan to the Secretary of USDA for approval. States may also opt to forego the above procedure in which case hemp farmers in those states must apply for licenses and comply with a federally-run program constructed by the USDA.

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The market for hemp products in the U.S. is expected to grow from around $1 billion in 2018 to tens of billions of dollars by 2022. Currently, a full 70 percent of hemp products are imported from China.

You can learn more about the implications of the farm bill for the hemp and CBD industries here. You can read the hemp provisions included in the farm bill here. The bulk of the farm bill is unrelated to cannabis.

“The significance of this law change should not be underemphasized. This law marks the first change in the federal classification of the cannabis plant since it was initially classified as a schedule I controlled substance by Congress in 1970, and paves the way for the first federally-sanctioned commercial hemp grows since World War II.” — Paul Armentano, NORML Deputy Director (press release)

FDA responds to hemp bill signing

Shortly after President Trump signed the 2018 Farm Bill, the Food and Drug Administration released a good-news-bad-news statement which caused both concern and optimism amongst stakeholders in the CBD market.

The bad news: According to the FDA statement, it remains “unlawful… to introduce food containing added CBD or THC into interstate commerce.” The statement stressed that the FDA would continue to take action against businesses that make health claims related to CBD products or that attempt to introduce such products into interstate commerce.

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FDA Commissioner Scott Gottlieb said in an official FDA statement, “In view of the proliferation of products containing cannabis or cannabis-derived substances, the FDA will advance new steps to better define our public health obligations in this area. We’ll also continue to closely scrutinize products that could pose risks to consumers.”

The good news: The statement also includes a pledge to pursue pathways that would allow businesses to legally market products containing cannabis or cannabis-derived compounds, and saying that it is actively exploring those options.

“In addition, pathways remain available for the FDA to consider whether there are circumstances in which certain cannabis-derived compounds might be permitted in a food or dietary supplement. Although such products are generally prohibited to be introduced in interstate commerce, the FDA has authority to issue a regulation allowing the use of a pharmaceutical ingredient in a food or dietary supplement. We are taking new steps to evaluate whether we should pursue such a process.” — FDA

Furthermore, the announcement states that the FDA has completed evaluations of hulled hemp seeds, hemp seed protein, and hemp seed oil, and determined that the products can be classified as GRAS status, or “generally recognized as safe” for human consumption. “Therefore,” the state adds, “these products can be legally marketed in human foods for these uses without food additive approval, provided they comply with all other requirements and do not make disease treatment claims.”

The agency further clarified its stance in a second statement which reads:

“The GRAS notices are for three different hemp seed-derived ingredients. The GRAS conclusions can apply to ingredients from other companies, if they are manufactured in a way that is consistent with the notices and they meet the listed specifications. Some of the intended uses for these ingredients include adding them as source of protein, carbohydrates, oil, and other nutrients to beverages (juices, smoothies, protein drinks, plant-based alternatives to dairy products), soups, dips, spreads, sauces, dressings, plant-based alternatives to meat products, desserts, baked goods, cereals, snacks and nutrition bars. Products that contain any of these hemp seed-derived ingredients must declare them by name on the ingredient list.”

Moving forward, the FDA is in the process of gathering input relevant to “the lawful pathways by which products containing cannabis or cannabis-derived compounds can be marketed, and how we can make these legal pathways more predictable and efficient.”

House Rules Committee Chairman signs onto federal cannabis bill

The incoming chairman of the House Rules Committee Rep. Jim McGovern (D-MA) added his name to the list of sponsors of the Marijuana Justice Act, a bill which could remove marijuana from the DEA’s list of controlled substances. The move brings the total number of co-sponsors to the bill to 43.

McGovern is replacing formidable cannabis reform opponent, Texas Representative Pete Sessions (R) who actively thwarted votes on marijuana legislation during his tenure. He has also pledged to allow cannabis measures to reach the House floor, promising that he’s “not going to block marijuana amendments like my predecessor has done.”

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In addition to removing cannabis entirely from the Controlled Substances Act, the far-reaching bill also incents states to end discriminatory practices related to the enforcement of cannabis laws by threatening to withhold federal funds from states that disproportionately arrest and incarcerate low-income people or minorities for minor marijuana offenses. Withheld funds would be allocated to a community reinvestment fund, which would “be available to the Secretary of Housing and Urban Development to establish a grant program to reinvest in communities most affected by the war on drugs.”

Tilray announces Novartis partnership

Canadian LP Tilray [TLRY], announced last week that it had signed an agreement to expand its partnership with Novartis, a subsidiary of Sandoz, to market Tilray’s non-smokable medical marijuana products in countries where the drug is legal. It is believed to be the first instance of a major pharmaceutical company throwing its hat into the medical marijuana ring. Tilray has been working with Sandoz Canada since March and has co-branded eight ingestible oil and capsule medical cannabis products.

Under the new agreement, the two companies will invest in research and development of new medical marijuana products. The agreement also prohibits from partnering with any other cannabis producer.

“It just made sense for us to reach an agreement with a company like Sandoz, which is known for its focus on patients, its reliable supply chain, a well-established sales force and a global distribution network. If a product comes into a pharmacy with the Sandoz logo co-branded on it, or if a pharmaceutical sales rep is talking to a physician about a product that’s branded as Tilray and Sandoz, it lends credibility to that product.” —Tilray CEO Brendan Kennedy to Bloomberg

State-by-state

Regulators in Oregon are now allowing delivery of medical marijuana to patients who live in areas of the state where sales of the drug are prohibited. The commission has also increased the amount of marijuana that cardholders can buy during a single shopping trip from 1 ounce up to 8 ounces (227 kilograms). The new rules approved last week by the state Liquor Control Commission go into effect December 28.

New York City Mayor Bill de Blasio (D) has followed the governor’s lead and endorsed marijuana legalization. In a statement to The New York Times, de Blasio said, “I have been convinced that we can establish a regulatory framework that keeps our streets safe, rights the wrongs of the past and gives economic opportunity to communities hit hardest by the war on drugs.” The mayor, who has been a political opponent of Governor Cuomo has promised to speak at greater length about marijuana legalization after a city report on the topic is released on Thursday. The report is expected to recommend the automatic expungements of convictions for individuals who were arrested for any offense that would no longer be illegal under cannabis reform measures. The New York state lawmakers are expected to address the issue when the new legislative session begins in January.

“Legal cannabis is coming to New York State. When it does, we must do all we can to make sure that happens in a way that is safe, takes the health of New York City residents into account, and above all, provides opportunity while righting historic wrongs… The burden of current cannabis laws has not been shared equally. For far too long, one’s race has played too big a role in determining criminality. Too many people of color have seen their lives ruined by low-level arrests, locked out of jobs and prosperity by a single joint on the street.” — New York City Mayor Bill de Blasio

Rhode Island governor Gina Raimondo (D) hinted on The Public’s Radio Thursday that she believed that the tiny state between Massachusetts and Connecticut was effectively being peer-pressured into adopting a legal marijuana system, saying that she’s “not sure at this point it is practical to say we’re not going to legalize and regulate.”

“It’s something that I have resisted, mainly because I have worried—I’ve watched very carefully what’s gone on in Colorado and other states,” Raimondo said. “As the mother of a teenager and a middle schooler, I want to make sure we can keep everybody safe. Having said that, we are a tiny island sitting in-between Massachusetts and Connecticut, and the reality is I’m not sure at this point it is practical to say we’re not going to legalize and regulate. I don’t know what we are going to do next year. I’m still trying to figure it out now, but I’m more open to it than I ever have been.” — Rhode Island Governor Gina Raimondo

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Rhode Island top lawmaker, House Speaker Nicholas Mattiello (D), concurred with the Governor in a separate appearance on The Public’s Radio, suggesting that the state can “do a better job looking at models that are already in existence such as Colorado or other states” to inform Rhode Island’s approach.

“I think we have to study it and then decide what we want to do as a state, but I am mindful that Massachusetts has legalized it, I believe Connecticut is going to legalize it,” he said in his year-end interview with the radio station. “I think we’re probably going to end up with more social costs without the revenues and that would probably be the worst situation of all. We’ll take a good look at it in light of what’s happening around us and we’ll come up with a conclusion after collaborating with all my colleagues and the citizens of the state. This is not a decision I’m going to make. I’m open. I recognize the issues, I know the issues. But we’ll make the decision together.” — Rhode Island House Speaker Nicholas Mattiello

Contrary to claims often made by supporters of prohibition, marijuana use among teens in Washington state did not increase in the years after voters approved legalization for adults in 2012. That is according to a new study which claims that cannabis use declined among 8th- and 10th-grade students from 2010-2012 to 2014-2016. The results contradict a previous study which found increases in marijuana use among teens in the state. Researchers created a model using data from a randomized state-level survey called the Washington Healthy Youth Survey to test the earlier study’s conclusions.

A new state law went into effect last week in Maine which allows business-to-business medical marijuana sales. Under old rules, cannabis businesses had to grow and manufacture cannabis products themselves. Under the new rules, growers will be allowed to sell up to 30 percent of their inventory to other cannabis businesses. The move is intended to increase opportunities for cannabis businesses while also increasing product selection for Maine’s 50,000 medical patients. The new rules also remove restrictions on which conditions qualify patients for medical marijuana cards and allow doctors to recommend the marijuana to patients if they feel the patient can benefit from the drug.

Furthermore, the rules also allow caregivers to open shops and hire more than a single employee. It also ups the number of available dispensary licenses from eight to 14.

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The number of medical marijuana patients in Arizona has more than doubled since December 2015 according to an infographic published by Marijuana Business Daily. According to the industry news source, “In 2017, medical patients purchased a record 43 tons of MMJ, up 48 [percent] over the 29 tons sold in 2016. With one month of reporting left for the year, Arizona has already sold more than 55 tons, 30 [percent] higher than in all of 2017.” The Chart of the Week can be found here, or check it out below:

Source: Marijuana Business Daily/ https://mjbizdaily.com/chart-arizona-medical-marijuana-market/

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