One Problem And Multiple Different Ways To Solve It- Hemp

For the third consecutive year, the battle over Delta-8 and hemp-derived cannabinoids continues. In tackling a single issue, three distinct approaches emerge. Should delta-8 and hemp-derived cannabinoids be classified under the limited licensing umbrella of the marijuana monopoly industry, as proposed by HB2451, HB2452, and SB1076? Alternatively, do these cannabinoids belong under the jurisdiction of the Department of Agriculture, with a call for enhanced regulations and testing, as advocated by HB2679 and SB1186? Or, is the solution a complete prohibition of hemp-derived cannabinoids, barring both smoke shops and the marijuana industry from selling them?

In 2021, a complete ban on Delta-8 and hemp-derived cannabinoids. Senator Gowan introduced Senate Bill 1715, making hemp-derived intoxicating cannabinoids outright illegal for smoke shops and marijuana establishments to carry. In the subsequent year, Senator Shope Sponsored a bill that would have allowed licensed marijuana establishments to sell hemp-derived intoxicating cannabinoids under Senate Bill 1453, titled Hemp-Derived Impairing Cannabinoids. Additionally, these products were to be incorporated into the limited licensing structure for marijuana. However, a competing hemp-derived bill sponsored by Senator Borrelli, titled Senate Bill 1271, focused on Hemp-Derived Products; Regulation. This bill proposed applying the same rules as marijuana to Delta-8 but without integrating it into the limited licensing structure. The objective was to establish a more small-business-friendly environment, catering to those who couldn’t afford to lease or purchase a marijuana license. This marked a shift in legislative approaches towards regulating hemp-derived products.

Senate Bill 1453, Senator Shope’s legislation, amended the voter-protected ballot measure Prop 207, known as the Smart and Safe Act. This meant that for SB1453 to pass, it required a ¾ majority or 75% approval from both the House and Senate to reach the governor’s desk. In contrast, Senator Borrelli’s Senate Bill 1271, aiming to amend the legislature-passed and governor-signed hemp laws in Title 3 Article 4.1 Industrial Hemp, had a different requirement. This measure only needed a 51% majority or a little more than half of the support to become law. The distinct voting thresholds highlight the different legislative processes and approval criteria for these two bills.

In The Unfolding Legislative Scene 2024

In the unfolding legislative scene, the fruition of three proposed bills, originating from both 2022 and 2023, has taken center stage. These comprise two sets of mirrored bills and two independent measures, culminating in a notable total of six. This milestone represents the highest count of non-marijuana bills recorded to date.

HB2451, alongside its twin bills HB2452 and SB1076,

This year sees a more nuanced strategy emerging within the industry, characterized by a subtle shift in language. The term “hemp” is absent from the legislative endeavors of the current year. 

Spearheaded by Representative Montenegro, House Bill 2452, and its mirror bill Senate Bill 1076, championed by Senator Shope, who notably sponsored last year’s SB1453, take a different approach. Instead of directly regulating the hemp sector, these bills propose allocating funds for various purposes. Among these initiatives are provisions to bolster the Arizona Poison Control System’s operations and to provide support to healthcare providers. Additionally, funds are earmarked for public health and safety education, with a particular focus on addressing concerns related to illicit marijuana and intoxicating cannabinoids.

Additionally, the bills allocate resources for the Attorney General to investigate and enforce action against the illicit sale of marijuana and intoxicating cannabinoids. Municipal police departments, county sheriff departments, and tribal police agencies are identified for funding to investigate and enforce laws related to the illicit sale of marijuana and intoxicating cannabinoids. The language in these bills suggests a more indirect approach in addressing issues related to marijuana and cannabinoids. The focus appears to shift from a direct confrontation with the term “hemp” to broader concerns about public health and safety.

However, recurring language that is not defined in both HB2452 and SB1076 is “ intoxicating cannabinoids.” leaving one to believe that the missing piece is purposely left out and maybe  relieved at a later time

HB2452 and SB1076 act in tandem to fortify the provisions laid out in HB2451, entitled “Marijuana; Advertising; Restrictions,” championed by Representative Montenegro. This legislation echoes the terminology of “intoxicating cannabinoids” present in the preceding bills, with an emphasis on regulating advertising practices. HB2451 limits advertising privileges to marijuana license holders, allowing them solely to promote “intoxicating cannabinoids,” marijuana, and paraphernalia such as bongs, while also imposing further constraints on advertising methodologies.

HB2451, alongside its twin bills HB2452 and SB1076, seem to take aim not only at the delta-8 and hemp-derived cannabinoids sector but also at the unlicensed marijuana market. This legislative trifecta appears poised to tackle multiple fronts, potentially eliminating various competitors and challenges to the industry in one fell swoop. HB2451, HB2452 AND SB1076 are all voter protected and need ¾ vote to progress. 

On The Opposing Side, There Is SB1186

On the opposing side, there is SB1186 sponsored by Senator Borrelli, titled “Regulation; Hemp-Derived Products.” This bill is nearly identical to the one from the previous year SB1271 that had the same sponsor. SB1186 proposes applying the same rules as marijuana to Delta-8 but without integrating it into the limited licensing structure. The aim is to create a more small-business-friendly environment, catering to those who cannot afford to lease or purchase a marijuana license. This represents a shift in legislative approaches to regulating hemp-derived products.

What’s at stake? The Kush Kronicles received an independent economic analysis conducted by Whitney Economics on the Arizona hemp-derived cannabinoid industry, encompassing all cannabinoids like CBD and Delta 8. According to the report, the industry boasts a market worth of $699 million, providing employment for over 8,000 individuals and contributing millions in wages and sales taxes.

Again, SB1186 seeks to amend the legislature-passed and governor-signed hemp laws in Ttitle 3 Article 4.1 Industrial Hemp. Notably, this measure only requires a 51% majority or slightly more than half of the support to become law. The different voting thresholds underscore the contrasting legislative processes and approval criteria for these two bills.

Outlaw All Hemp-Derived Cannabinoids

Introducing a third perspective on delta-8 and its management is Senate Bill 1401, titled “Hemp-Derived Manufactured Impairing Cannabinoids.” Sponsored by Senator Shamp and co-sponsored by Senator Gowan, who notably sponsored SB1715 in 2022, which aimed to outlaw all hemp-derived cannabinoids. Senate Bill 1401 follows suit, proposing to add a roster of hemp-derived cannabinoids to the criminal statutes outlined in Title 3, effectively rendering them illegal.

Concerning Trend

A troubling uptick in children mistakenly ingesting edible marijuana, often confusing it for candy, has emerged as a pressing concern. This concerning trend has triggered a spike in distressed parents seeking help from Arizona poison control centers. Startling statistics reveal that nearly 60% of the 394 reported pediatric cannabis incidents last year resulted in hospitalization. Moreover, discrepancies in marketing and mislabeling have resulted in failed drug tests, adversely affecting individuals and their livelihoods. Of notable concern is the case of Luke Air Force Base, where personnel have been discharged due to unwittingly consuming substances leading to failed drug tests.

The rise in accidental poisonings in Arizona since the legalization of recreational marijuana in 2020 follows similar trends observed in other states, as documented by the Centers for Disease Control and Prevention (CDC). This increase has led to emergency room visits or hospitalizations, coinciding with the legalization of marijuana in specific states.

Contrary to the accusations leveled against the legal market, a spokesperson for the Arizona Dispensaries Association shifts blame towards the unlicensed sector and hemp-derived cannabinoids. According to the spokesperson, state regulations within the legal market strictly prohibit edibles from resembling children’s candies or snacks. Notably, in Arizona’s adult-use market, products like gummy bears or gummy worms are explicitly forbidden. The spokesperson underscores that the presence of such products suggests they originate from an illicit or unregulated source.Furthermore, under Arizona law, manufacturers and dispensaries are required to use child-resistant packaging for edible marijuana products, adding an extra layer of safety measures in the legal market.

Federal Law

Delta-8 THC is a natural part of the Cannabis sativa L plant, which has over 100 cannabinoids. One of these cannabinoids is Delta-9 THC, the main psychoactive element in marijuana. While Delta-8 THC is naturally present, it’s often not in sufficient amounts in the plant. To boost its levels in hemp products, chemical conversion processes, particularly from CBD, are used. Hemp products are legal under the federal 2018 Farm Bill if they contain less than 0.3% Delta-9 THC. There are no restrictions on the amount of other cannabinoids, like Delta-8 THC, in hemp products. Each state has unique regulations on hemp, with some restricting Delta-8 THC products. However, Arizona has no such restrictions. Federal and state laws permit Delta-8 THC products that are not meant to be ingested in food or drink to be legal in Arizona.

The 2018 Farm Bill changed the Controlled Substances Act (CSA), stating that Delta-8 THC derived from legally grown hemp is considered legal. According to the bill, “hemp” is the Cannabis sativa L. plant with a Delta-9 THC concentration not exceeding 0.3% on a dry weight basis. Delta-8 THC is treated similarly to other cannabinoids like CBD, and only Delta-9 THC is restricted. The legal principle “expressio unius est exclusio alterius” is applied, indicating that by limiting Delta-9 THC, there’s no restriction on other naturally occurring cannabinoids.

The FDA has concerns about cannabinoids in food products, but the legality of hemp-derived Delta-8 THC is not contested. The DEA recognizes hemp-derived Delta-8 THC as lawful if it contains less than 0.3% Delta-9 THC and is not synthetically produced. The Ninth Circuit Court of Appeals, overseeing Arizona, confirmed the legality of hemp-derived Delta-8 THC, rejecting distinctions based on manufacturing methods. Both the DEA and the Ninth Circuit agree that producing Delta-8 THC through chemical conversion from another naturally occurring cannabinoid is legal. In conclusion, according to the DEA and the Ninth Circuit Court of Appeals, manufacturing and selling hemp-derived Delta-8 THC products is legal under federal law.

Arizona Law

In Arizona, the Controlled Substance Act classifies THC, including Delta-8 THC, as a Schedule 1 substance, labeling it an illegal narcotic drug called “cannabis.” However, there are exceptions to this prohibition under the Arizona Medical Marijuana Act (AMMA) and the Smart and Safe Arizona Act (SSAA), allowing for medical and recreational use of cannabinoids, respectively.

Despite THC being a Schedule 1 drug, the Arizona Supreme Court upheld the legal status of concentrated cannabinoid products under AMMA in 2014. In 2018, Arizona legalized hemp and hemp products, permitting the production and distribution of hemp-derived cannabinoids without a license. However, Arizona’s hemp law defines “Industrial Hemp” and “Hemp Products,” stating that food and beverage products containing cannabinoids would be unlawful, likely aligning with FDA regulations.

There’s a distinction between inhalation and ingestion, and the legal principle of expressing one thing excluding others implies that products for inhalation may come from different parts of the plant containing cannabinoids. Delta-8 THC manufacturing in Arizona is restricted to licensed hemp processors. The unlicensed retail sale of lawfully produced hemp-derived Delta-8 THC products not intended for ingestion is considered lawful in Arizona.

If Arizona’s statutes are unclear about the legality of Delta-8 THC, federal law interpretations take precedence, as stated in A.R.S. § 3-312(E).

(Legal analysis of delta 8 and hemp derived cannabinoids provided by Tom Dean)

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