Since the passage of the 2018 Farm Bill, the U.S. hemp industry has rapidly grown into a multi-million dollar industry. See Agricultural Improvement Act of 2018, Pub. L. No. 115-334, 132 Stat. 4490. Although the federal government initially led the way in the development of the industry, it has since taken a hands-off approach to regulating the sector. Thus, market oversight was transferred to the states, which were tasked with drafting and implementing comprehensive regulations to create their own state hemp programs. Due to the proliferation of the hemp industry, particularly as the market has remained unregulated, states across the country have implemented regulations that create confusion and difficulty for current hemp operators. Recent actions by states like California and Georgia have created a new dark cloud over the sector, with operators feeling that states are moving beyond efforts to curb the unregulated market, but rather completely dismantle the industry.

Broad interpretation of “attractive to children”

Hemp-derived products have become widely accessible and now reach almost every everyday consumer market, from grocery stores to gas stations. As a result, state lawmakers across the country have called for more restrictions on these products to ensure they stay out of the reach of children. See Brett Schuman et al., “A bitter legal fight against regulation of hemp-derived cannabinoids“, Cannabis Bus. Times (October 22, 2024). While many states have imposed age restrictions such that only people 18 or older or 21 or older can purchase hemp-derived products, some went further to include language that prevents any hemp-derived product from being “attractive to children.” See 902 KAR 45:190 Section 7(7)(a) (2024); 16-12-241 (2024), for example, in Florida, child-appealing products are defined as products made “in the form of humans, cartoons, or animals…that bear any resemblance; an existing confectionery product…or branded food product…or containing color additives See Section 581.217(3)(a), Fla.

However, because of this language, the Florida Department of Agriculture and Consumer Services (FDACS) has increasingly cracked down on hemp products under its broad interpretation of Section 581.217(3). (a) Florida Laws. See Mitch Perry, Florida Department of Agriculture cracks down on two hemp companies that market products aimed at childrenFlorida Phoenix (July 11, 2024). Since the law took effect in July 2023, FDACS has issued stop-sale orders for more than 631,000 hemp-derived products, alleging they are attractive to children. See State stops sale of hemp extract products allegedly targeting children, Fla. Courier (April 23, 2024). Many operators question the extent to which FDACS inspectors are allowed to consider a product “attractive to children”, as some have characterized the simple use of a cartoon or letter format as sufficient, even if it is This is the company’s own logo. As such, the nature of these stop-sale orders that continue to be issued hinders the operations of hemp operators because it requires the products to be returned to the manufacturer or destroyed. See Jesse Scheckner, Hemp extract company sues FDACS over blocked products. Wilton Simpson says “Bring it on”, Florida Politics (November 6, 2023).

Lack of uniformity in packaging and labeling

Navigating packaging and labeling requirements state by state has angered operators because the lack of uniformity can lead to a stop sales order in one state and no problems in another. Some states, such as Kentucky and Tennessee, require specific warnings to be placed on hemp products, such as “keep out of reach of children”, “use during pregnancy or breastfeeding may be harmful”. harmful” and “do not drive or use a motor vehicle. machines when using this product. See 902 KAR 45:190, article 6(6); Tennessee Code Ann. Section 43-27-211(2)(B), (D) (2024). As noted above, Florida and now Georgia have broader mandates on the image and designs used for packaging or labeling hemp products because even the slightest cartoon image can be considered attractive to children. In Kentucky, lawmakers went even further by banning all cartoon images on product packaging and labeling.

A significant battle in the packaging and labeling of hemp products involves disclosure of potency, if any, required by some states. While Florida requires product packaging and labeling to include the number of milligrams of each marketed cannabinoid per serving and serving size, New Jersey only requires the percentage of THC and CBD, as well as the amount of oils or extracts. See New Jersey Administrator. Section 2:25-5.3(b) of the Code (2024). From Oklahoma requiring products to indicate the cannabidiol’s country of origin to Georgia requiring a Georgia Department of Agriculture-approved sticker to be placed on all products moving forward, operators continue to fight to relax each state’s regulations regarding the packaging and labeling of hemp products.

Attempts to dismantle the market

Despite its prominence as a leader in the cannabis industry, California’s proposed emergency regulations have sparked an outcry from hemp operators because they cripple the state’s hemp program. See Cal. Code regulations. tit. 17, sections 23000 to 23100 (2024) (emergency). Under the new regulations, all foods, food additives, beverages and dietary supplements made from industrial hemp intended for human consumption must not contain any detectable THC or other “intoxicating cannabinoids,” which have been redefined to include 30 cannabinoids and isomers additional. In the South, the Georgia Hemp Farming Act took effect last October, radically reforming the state’s hemp program. Georgia Code Ann. Articles 2-23-1 to 2-23-12 (2024). Not only did the law prohibit the sale of hemp flowers and pre-rolls, but it also effectively closed the THCA loophole, as the total THC concentration of hemp and consumable hemp products must include both the delta-9 THC and delta-9 THCA.

The Garden State remains in a regulatory limbo after lawsuits ensued once Gov. Phil Murphy signed Senate Bill 3235 despite concerns over the bill’s language. S. 3235, 221st Legislation, Reg. Sess. (NJ 2024). Under the vague bill, lawmakers considered hemp products intoxicating if the total THC is more than 0.5 mg per serving or 2.5 mg per package. Additionally, they expanded the definition of “total THC” to include all tetrahydrocannabinols, any other chemically similar compound, substance, derivative or isomer of tetrahydrocannabinol, and any other cannabinoid. Due to U.S. District Court Judge Zahid N. Quraishi of the District of New Jersey siding with hemp operators on two key issues, the state finds itself at an impasse in implementing the law. See Loki Brands vs. Platkin, No. 24-cv-9389 (DNJ 2024). However, this confusion has hurt many in the industry, as wholesalers and retailers are unsure whether they can proceed with purchasing inventory, and some operators fear that businesses still risk criminal or civil penalties. See Sophie Nieto-Munoz, The hemp industry in regulatory limbo after the court decision, NJ Monitor (October 14, 2024).

Conclusion

With increasing scrutiny of hemp-derived products, hemp operators must go above and beyond to ensure they comply with each state’s evolving legislation. Whether or not uniformity takes the form of federal legislation such as the Cannabinoid Safety and Regulation Act, ensuring that regulations not only protect public health, but n nor unnecessarily hinder operations and innovation in the hemp industry. .

Paula Savchenko is the founder of Cannacore Group, a multistate cannabis and psychedelic licensing firm, and PS Law Group, a controlled substance law firm. As an attorney and consultant, she works primarily in the cannabis and psychedelics industries, working with clients on multi-state expansion initiatives. For more information, visit www.cannacoregrp.com and https://www.pslawgrp.com.