Call us Coming Soon

Support

Blog

FDA casts shadow on hemp win, calling CBD items illegal

SEATTLE — The hemp industry still has work ahead to win legal status for hemp-derived cannabidiol, or CBD oil, as an ingredient in food or dietary supplements despite the big farm bill President Donald Trump signed this week designating hemp as an agricultural crop.

CBD oils have become increasingly popular in lotions, tinctures and foods, but their legal status has been murky and the Food and Drug Administration has sent warning letters to some companies making health claims for CBD.

In a statement following Thursday’s bill signing in Washington, FDA Commissioner Scott Gottlieb restated his agency’s stance that CBD is a drug ingredient and therefore illegal to add to food or health products without approval from his agency.

“Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law, but also can put patients at risk, as these products have not been proven to be safe or effective,” Gottlieb wrote.

CBD is a non-psychoactive compound found in hemp, a version of the cannabis plant that is low in THC, the part of cannabis that gives pot its high.

An FDA-approved drug for the treatment of seizures, Epidiolex, contains cannabis-derived CBD. GW Pharmaceuticals’ syrup became the first prescription drug derived from the cannabis plant in June.

The FDA statement also specified parts of hemp that are safe as food ingredients, but the CBD stance disappointed advocates. Courtney Moran, a lobbyist for Oregon hemp farmers, said she plans to work with U.S. Sen. Ron Wyden, an Oregon Democrat, to nudge the FDA toward greater acceptance of CBD.

“We do hope the FDA does clear a pathway for these products that have already hit store shelves and are out in the marketplace,” Moran said. She said it’s an “opportunity for industry to educate the FDA.”

The FDA statement said three ingredients derived from hemp — hulled hemp seeds, hemp seed protein and hemp seed oil — are safe as foods and won’t require additional approvals, as long as marketers do not make claims that they treat disease.

Hemp, like marijuana, already was legal in some states before Trump signed the farm bill. But now hemp farmers will be able to buy crop insurance, apply for loans and grants, and write off their business expenses on their taxes like any other farmer.

Oregon lawmakers revisit worker protections for off duty pot use

SALEM, Ore. (AP) — Oregon lawmakers will consider making it illegal for businesses to fire employees who flunk drug tests for using marijuana off the clock, reviving a workers’ rights campaign that failed in the statehouse last year.

The Statesman Journal reported that a proposed bill would also change state law to protect job seekers who use substances like pot that are legal here.

The proposal reflects a debate over whether Oregon workers should be forced to abstain from marijuana use — which is allowed under state law but remains federally illegal — for fear of getting fired or losing an employment offer.

Senate Bill 301, which represented a previous attempt to loosen employment restrictions, failed in 2017. That bill generally dealt with discrimination against medical marijuana cardholders who tested positive for the cannabis.

The latest proposal has come before the Senate Interim Committee on Judiciary, chaired by Sen. Floyd Prozanski, D-Eugene. Prozanski said Monday that the concept was a redrafted form of SB 301.

“We’ll definitely have some discussions” on the proposal, he said.

The proposed bill wouldn’t allow employees to use pot if their collective bargaining agreements prohibit partaking while off-duty, or if there is a “bona fide occupational qualification” associated with their job. It also does not permit working under the influence.

State pot officials: Candy can stay

SEATTLE — State regulators have walked back a plan to crack down on certain cannabis-infused candies, instead issuing specific color and shape guidelines they say will prevent candies from being overly enticing to children.

The Washington State Liquor and Cannabis Board sent the legal-pot industry into a panic in early October, when the board announced it would review all edibles.

Although the state has long barred products that are too appealing to kids, the agency said it had received complaints about candies on store shelves that shouldn’t have been approved. In a presentation, the agency said “all production” of hard candies, tarts, fruit chews, colorful chocolates, jellies and “any gummy type products should cease.”

After an outcry, the agency announced it would pause that plan.

The board Wednesday finalized a policy that limits the colors and shapes that makers of cannabis edibles can use but stops short of banning any candies outright. Members of the Washington CannaBusiness Association are “very pleased with the results,” the trade group’s Executive Director Vicki Christophersen told reporters.

WSLCB representatives say the new guidelines are meant to keep off the market pot-infused candies that look too similar to brightly colored commercial candies marketed to kids. The agency will provide a list of approved colors and shapes, and labels will be limited to three accent colors from the approved color list. Cannabis candies that are too brightly colored will need to be “dulled,” according to the agency.

“We really found that candy and chocolates marketed toward adults had muted tones … maybe one accent color,” said Nicola Reid, WSLCB licensing policy and compliance manager. “Candy marketed toward children had a multitude of colors.”

While the policy doesn’t include an all-out ban on fruit chews or hard candies, some products such as cotton candy are “just geared toward children,” Reid said. “If you submitted white cotton candy, there is still a chance it’s especially appealing to children” and would not be approved.

The WSLCB plans to have the color list and other materials online by January, Reid said. Edibles makers will have to resubmit their products for approval by January 2020.

Jamie Hoffman, whose company Craft Elixirs sells a cannabis-infused fruit chew called Pioneer Squares, welcomed the new board policy over its initial proposal, which she said was “devastating.”

Hoffman’s Pioneer Squares are made with a fruit-flavored base and candied pieces of fruit. The candies now make up about 84 percent of her business, she said, so the board’s initial announcement made her worry her entire enterprise could be in danger.

Hoffman plans to change her packaging to comply. Because the chews use real fruit, such as lemons and oranges, she said she’s not sure whether they’ll be too bright. If so, she’ll have to tweak her recipe to tone down the color.

Washington’s cannabis industry unveils legislative agenda

TACOMA — Members of the state Legislature, if you’re curious about what you can do for the local cannabis industry, the industry has some ideas.

Vicki Christophersen, executive director and lobbyist for the Washington CannaBusiness Association, recently briefed the media on the group’s legislative agenda for the coming session.

“We feel this is a pivotal year,” she told reporters on the call Dec. 5. In the years since legalization, “we’ve learned a lot, and we’re take this comprehensive agenda to the Legislature.”

The highlights:

• Compliance reform: Seeking a compliance program from the state Liquor and Cannabis Board so licensees can request assistance and inspections to find flaws in their systems without threat of citation. This could include written warnings before any enforcement action, provided there is no risk to health or public safety.

The group also seeks a finding that administrative violations that occurred before June 30, 2018, not count toward permanent license cancellation.

• Clarifying what is and is not a medical claim about a product: Getting rid of “curative” language (unsubstantiated claims about a product curing cancer, Crohn’s disease, etc.) has led to product descriptions being too limited, from the association’s standpoint.

According to its policy briefing memo, the association will propose legislation that “mirrors FDA (federal Food and Drug Administration) allowances to clarify what is and is not a ‘medical health claim’ to allow product labels to include such terms as, and derivatives of, wellness, maintain, support, assist, promote, and relief.”

“Licensees can’t use language or explain functionality to indicate what a product is used for,” Christophersen said. “Licensees should be able to identify functional claims in name or description of a product.”

• Allowing for out-of-state investment: According to the association, “Investment in Washington-licensed businesses has been restricted to only Washington residents, a barrier that does not exist in any other state-regulated cannabis marketplace.”

The group hopes legislation will eliminate that restriction.

“This industry is rapidly becoming a global industry,” Christophersen said.”Our fear as an organization is that Washington is going to be far behind.

“Imagine if the tech sector was strapped by those restrictions — we wouldn’t be a leader globally. We understand why (the restriction) was set up like that at the outset to encourage Washington entrepreneurs. But now they need to compete with the rest of the world.”

• Aligning cannabis sales penalties with alcohol industry standards: “A uniform approach to enforcing existing laws for alcohol, expanded to include cannabis, makes sense without undermining any safety measures intended to protect kids,” the association memo states.

“Budtenders now face a felony charge selling to a minor, but we feel that felony is too strong,” Christophersen said, adding that the association proposes changing the offense to a misdemeanor from a felony.

• Limited merchandising and sale of certain non-THC products in licensed retail stores: This would broaden store sales to include “limited merchandising in retail establishments in the form of branded clothing, cleaning products and CBD-only (cannabidiol-only) products.”

The policy change would allow cannabis shops to sell low-THC, CBD products you now can find at chain drug stores and independent retailers.

“Right now our folks can’t compete,” Christophersen said.

The handful of CBD products state-regulated stores sell are manufactured through the state Initiative 502-regulated industry. The supply is smaller than what’s available in the general marketplace or online.

Medford debates how to spend pot money

MEDFORD, Ore. — Marijuana legalization ignited years of debate in Medford, and a windfall of up to $600,000 annually in pot tax revenues has fanned the flames of controversy once again.

“It’s really personal for me,” said Medford City Councilor Clay Bearnson, who pushed hard for retail sales of marijuana in city limits. “It was a hard-fought battle to get cannabis even in town.”

The city has welcomed the pot tax money, saving $839,000 so far and expecting to have about $1.2 million on hand when the city adopts its 2019-2021 budget next July.

But it’s also facing some big bills.

The council is confronted with a $3.5 million increase on top of $11.5 million the city is already paying in the current biennial budget for Public Employees Retirement System debt.

Some councilors and others on the 16-member Budget Committee think the marijuana money should help pay for the PERS debt. Bearnson is not one of them.

“PERS would be a great abysmal pit to put it in,” he said.

Instead he’d like to invest the money on a project the community could be proud of, such as a municipal pool, helping with the affordable housing problem or dealing with homeless issues.

Bearnson said Medford voters approved retail sales in the city in 2016, so they should be able to point to a specific problem that was solved by the pot tax revenues rather than essentially flushing the dollars down the PERS hole.

Ryan Martin, Medford’s chief financial officer and assistant city manager, said he expects to see PERS increases over the next six years, which will add to the city’s budget woes.

“It’s going to be one of the biggest topics of conversation,” he said.

Martin estimates cannabis tax revenues will be about $500,000 to $600,000 a year.

Oregon legislators have discussed providing a 25-percent match to cities that have set up side accounts for PERS, so the city could add some $300,000 to the $1.2 million saved from the pot money. The state has put off enacting legislation to provide the match so far, raising doubts that it will ever be available.

‘A drop in the bucket’

Rick Whitlock, a member of the Budget Committee, said he sees two camps forming on the committee, one preferring to spend the money on the PERS debt, the other pushing to use the money for a specific project.

“It certainly has been an issue that has risen to near the top,” he said.

Whitlock said he’d love to see a new municipal pool, particularly with Jackson Pool getting to the end of its life.

He’s also of two minds about the new money, seeing Bearnson’s point that the public wouldn’t notice spending the money on PERS.

“You just wouldn’t see any obvious benefit from that money if you put it into an account like that,” he said. “Financial advisers say it would truly be just a drop in the bucket.”

Councilor Kevin Stine said the city’s primary obligation when it crafts its budget will be to pay off the PERS obligation.

“What I pushed for, and the rest of the committee agreed, is how we keep our current service levels,” Stine said. “We need to have a certain amount of money to keep what we have.”

But Stine said he sees the appeal in supporting a particular project, though he’s not sure if that project is a municipal pool.

“For me it is difficult to make a decision one way or another,” he said. “The question is how we fill the potential budget gap.”

Stine said he’d like to get more feedback from the community before making a decision on where to spend this new pot of money, or what type of project local residents support.

“At this point, I cannot say the amenity is a pool or an event center,” he said.

Councilor Dick Gordon said the city needs as much money as it can to prevent cutbacks in city services from the PERS debt, so keeping the pot dollars in a side account for a possible match is appealing.

“We need to pay down PERS as much as we can,” he said.

If the match doesn’t come through, another option is to use the cannabis money to help get federal grants for law enforcement that could free up general fund dollars to pay for PERS.

Gordon said Oregon is at odds with federal Immigration and Customs Enforcement, so it raises a question mark over the city’s eligibility for the grants.

He doesn’t think revenues from the cannabis tax are enough to pay off a municipal pool even with a 20-year bond.

Group makes push for cannabis cafes in Oregon

PORTLAND — A group wants Oregon lawmakers to allow public places such as cafes where people can smoke legal pot.

Current law says people can only smoke it in private. The New Revenue Coalition wants to change that so people can have public places to light up. The group says people aren’t able to smoke in private because many rental units bar smoking indoors.

Oregon Public Broadcasting says the group will have to persuade lawmakers to allow waivers to the Indoor Clean Air Act, which aims to protect people from secondhand smoke by creating smoke-free public places.

Dr. Tom Jeanne, an epidemiologist at the Oregon Health Authority, says the agency doesn’t take positions for or against legislative proposals but he’s concerned about the health effects cannabis cafes could have.

Oregon marijuana prices dive – and buying soars

PORTLAND — Rampant overproduction in Oregon’s market for legal, recreational marijuana has produced a 50 percent drop in prices, according to state economists. That widely documented collapse has been tough on farmers and retailers — but a boon for consumers.

A new state analysis finds the price collapse sparked a big uptick in marijuana purchases and a corresponding increase in associated tax revenue, the Oregonian/OregonLive reported.

“Lower prices are helping to drive the volume of sales higher and induce black and medical market conversions into” the legal, recreational market, said Josh Lehner of the Oregon Office of Economist Analysis.

Recreational marijuana sales in Oregon will be nearly $543 million this year, up 29 percent from 2017 and well above economists’ expectations, forecasts show.

When Oregon legalized marijuana four years ago, expectations were enormous for the newly legal market. The state created incentives for producers to leave the black market, leading to overproduction and the ensuing price decrease.

A state study found the retail cost of a gram of marijuana plunged from $14 in 2015 to $7 last year.

Recreational marijuana remains a small industry, relative to the size of Oregon’s economy. For comparison, economists note that cigarette sales are 40 percent higher than marijuana sales. But legal marijuana is growing fast — state forecasts suggest it will be a billion-dollar market in 2025.

While Oregon has no general sales tax, it does levy a 17 percent sales tax on marijuana. Marijuana taxes generated nearly $70 million in revenue last year and are forecast to generate nearly $90 million in 2018.

State forecasters believe marijuana may eventually play a more important role in the state’s economy.

“The real economic impact from recreational marijuana will come not from the growing and retailing, which are low-wage and low value-added market segments,” economists wrote in a revenue forecast issued last week. “It will come from higher value-added products like oils, creams, and edibles, in addition to niche, specialty strains.”

The rise of marijuana in Oregon could evoke the emergence of craft brewing in the state, the economists wrote, with value-added production augmented by a cluster of suppliers and support industries.

“The long-term potential of exporting Oregon products and business know-how to the rest of the country remains large,” economists wrote, “at least once marijuana is legalized nationwide.”

Green Tuesday: Crowds line up at 1st East Coast pot shops

LEICESTER, Mass. — People lined up in the rain Tuesday morning to be among the first customers at the first two legal pot shops on the U.S. East Coast, more than two years after Massachusetts voters approved of recreational marijuana for adults.

The state’s first commercial pot shops opened in Leicester and Northampton.

Items for sale in the modern and spacious stores include various strains of the part of the plant that can be smoked, pre-rolled joints and edibles such as brownies and chocolate bars.

Cannabis is sold legally in six Western states.

The first customer at the Leicester store was Stephen Mandile, an Iraq War veteran who has been using medical marijuana to treat his post-traumatic stress, a traumatic brain injury and chronic pain.

Customers were shuttled to Cultivate, the Leicester store, from a remote parking lot about a mile away as police kept a visible but low-key presence outside. Customers perused offerings kept behind counters and under glass.

Kenny Boisvert, a 33-year-old Blackstone resident, was pleasantly surprised by his purchasing experience.

“It’s a very nice place. It’s way more than I expected,” he said as he waited to pick up edibles and the part of the plant that can be smoked.

The rollout of legal pot sales has been slow in Massachusetts, with regulators saying they wanted to make sure it was done safely and without some of the supply issues other states have faced.

The two shops received final clearance from regulators to open last Friday but were required to wait three days to coordinate traffic and other concerns.

Several more stores could open in the coming months.

Washington issues its first marijuana research license

OLYMPIA — The Washington Liquor and Cannabis Board says it has issued the state’s first license to grow marijuana for research.

Verda Bio Research in Seattle says it will be growing cannabis to conduct basic research on some of the plant’s lesser-known compounds.

Chief Executive Jessica Tonani said Verda intends to breed cannabis plants to emphasize compounds that currently exist only at low levels, so that those compounds can then be studied for potential therapeutic uses.

States may take a hit as pot falls

Wholesale marijuana prices in Colorado have fallen by a third in just the past 12 months, continuing a price crash that began soon after the drug was legalized. Although this implies that some marijuana entrepreneurs are going to go bankrupt, the bigger financial hit will be felt by states that tax marijuana based on its price.

Marijuana prices are collapsing in Colorado and in other legalization states (e.g., Oregon, where the price can go as low as $100 per pound) because a legal business is dramatically cheaper to operate than an illegal one. Because states generally set their marijuana tax rates as a percentage of price, their revenue per sale sinks in direct proportion to the fall in marijuana prices. Ironically, in a bid for more tax revenue per marijuana sale, Colorado increased its marijuana tax rate from 10 percent to 15 percent last year, only to see the anticipated added tax revenue wiped out by falling prices in a year’s time.

States may have failed to anticipate this problem because of misleading predictions about the effects of legalization. Pro-legalization economist Jeffrey Miron projected in 2010 that marijuana prices would only fall 50 percent when prohibition was repealed, leaving the drug at a price that would yield high tax revenue. That was clearly a rosy scenario.

A starker prediction made by drug policy analyst Jonathan Caulkins looks more prescient every day: He forecast that legalized marijuana will eventually fall in price to the level of other easily grown, legal plants like wheat and barley, such that a joint might sell for a nickel or even become a complimentary item akin to beer nuts at the bar. If that comes to pass, taxes based on a percentage of price might not even cover the costs of the government’s regulatory system for legal marijuana.