Weed Wanted

New Oregon hemp rules take effect next week. As of Monday, July 1, 2024, all hemp retailers or wholesalers who store, transfer or sell industrial hemp or hemp items for resale to another person must have a hemp vendor license from the Oregon Department of Agriculture (ODA). The vendor license fee is $100 annually and is valid from July 1 to June 30. You can find the application here.

If you have anything to do with the Oregon hemp trade, whether locally or from out-of-state, please read this blog post carefully. The vendor license requirement is very broad and is certain to catch many people off guard.

Where did these new hemp rules come from?

The new rules arise from House Bill 4121, which Governor Tina Kotek signed into law on March 20, 2024. That law covered both marijuana and hemp considerations. I annotated HB 4121 in my legislative preview here and my session wrap-up here. I would encourage anyone interested in the background of this new hemp vendor licensure program to read those posts.

Following the session, ODA undertook a quick rulemaking round, and adopted OAR 603-048-0175 on June 5. It’s a short rules section, and worth a read as well. You can also find an FAQ style summary from ODA here.

Does the new hemp vendor license apply to out-of-state sellers?

Yes! This is something unusual about the new program, which I highlighted back in February and March. I am not aware of any other state that has taken a similar approach, and I believe it will surprise a lot of people. That said, the rule and the ODA FAQ are clear that both local and out-of-state wholesalers and retailers require a hemp vendor license. The requirement also applies to all online vendors that sell into, or out of, Oregon.

Who does NOT need a hemp vendor license?

There are a handful of exceptions to the licensure requirement, pursuant to OAR 603-048-0175(1). These include:

Brokers. Or, as provided by OAR 603-048-0175(1)(a), a person who “only facilitates the sale or transfer by connecting buyers and sellers and the person does not store the industrial hemp or hemp items at any time.”
Shippers. Or, as provided by OAR 603-048-0175(1)(d), a person who “only transports hemp or hemp items and does not store [them] at any time other than as necessary for transportation or delivery.”
Licensed growers, handlers, or agricultural hemp seed producers, provided the licensee “first notifies [ODA] of the location where the industrial hemp items are stored, transferred or sold in the license application, or on another form provided by [ODA].”
Oregon Liquor and Cannabis Commission marijuana licensees.

What if I have multiple sites?

The rules are clear that “a vendor must obtain a separate license for each vendor site.” OAR 603-048-0175(3). They also provide that “each unlicensed vendor site identified by [ODA] is a separate violation.” At another $100 per site (per year), the cost of compliance is small as compared to the alternative. Here, it’s also worth noting that ODA came down a bit on price: originally, the fee was slated at $200 per site, but wholesalers and smaller retailers pushed back and ODA acceded. For mid-year applicants, the fee is not pro-rated.

What else is changing in Oregon hemp?

Quite a bit. HB 4121 covered a lot of territory beyond the hemp vendor registration requirements. Extensive new rules are coming on everything from hemp product registration, to enforcement, to limitation on hemp product sales containing cannabinoids for human or animal consumption. The Oregon Secretary of State also issued a temporary administrative order back on May 16^th, establishing criteria for presumptive testing of hemp plants.

All of these developments and changes are beyond the scope of today’s post. Instead, I will refer anyone to my prior summaries linked above, or to HB 4121 itself (also linked above) for more information. Finally, I would recommend that anyone active in the space keep abreast of the ODA’s Resources, Bulletins and Trainings page, and sign up to receive program email updates.

The post Oregon Hemp Alert: New Vendor License Requirement Takes Effect July 1 appeared first on Harris Sliwoski LLP.

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Wednesday, June 26, 2024

California State Fair’s cannabis award winners 2024 and how to smoke them

The future keeps happening in California first—this time with world-class weed in the most mainstream setting of all: The state fair. In late June, the California State Fair started notifying the winners of its Cannabis Awards, organized by Embarc. The medal holders on the podium represent the peak of the craft of cannabis flowers, extracts, […]

The post California State Fair’s cannabis award winners 2024 and how to smoke them appeared first on Leafly.

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It is Legal, or Not? What to Make of All These DEA “Position” Letters

The Drug Enforcement Administration (DEA) seems happy to respond to public and private parties inquiring about the control status of various substances. DEA answers some of these inquiries more quickly than others, and the response letters are usually short and to the point. The letters typically come from the desk of Terrence L. Boos, Ph.D., Chief of the Drug & Chemical Evaluation Section. They often contain helpful diagrams of the chemical structures at issue, just above the signature blocks.

Last month, my colleague Griffen Thorne touched on one of these letters, which covered THCA. The title of that article was “Bad News for Intoxicating Hemp Products.” As you might infer, the letter concluded that hemp-derived THCA is a schedule I controlled substance, notwithstanding purported “loopholes” of the 2018 Farm Bill.

This blog post will not analyze whether DEA got it right or wrong in any of the recent letters. Instead, I’m going to talk about what the letters mean more generally, and how we should “weight” them. For context, below is a list of the letters I’m talking about, going back three years or so:

I may have forgotten or missed one or two recent letters. If that’s the case, feel free to drop me a line, or give me the business in the comments.

Anyway, the question for today is: “how much weight should we ascribe to these position letters from DEA? What are the legal ramifications of DEA writing these things?” The simplest answer I can give is that DEA’s views should be given significant weight. Relatively speaking, DEA’s pronouncements are a lot more authoritative than the pronouncements of someone like me, but less authoritative than those of a court.

To illustrate:

On February 16, 2024, I opined that THCA is not legal under federal law. What I think doesn’t matter, really, because I’m not in charge of anything. I’m just a lawyer who has studied these things. Other professional people (including friends of my law firm) have reached the opposite conclusion on THCA. Doesn’t matter.
On May 13, 2024, DEA opined that THCA is not legal under federal law. This is the same conclusion I had reached a few months prior. It doesn’t mean I was “right,” though. This is because DEA could also be wrong (and has been wrong before). Same with yours truly.
Someday, DEA might arrest someone for selling THCA products, in accordance with DEA’s position set forth in the May 13, 2024 letter. That person could fight back in court, arguing that DEA is wrong to consider THCA products controlled. A court would probably consider DEA’s views authoritative, to an extent, and grant those views some deference. It’s still possible that a court could rule against DEA, however. It wouldn’t be the first time.

A sort of narrower, more academic question might be: “are these DEA letters more or less authoritative than ‘interpretive rules’ by DEA on similar questions?” (To give you a flavor of what I’m talking about, here’s an interpretive rule from 2001, regarding THC products in schedule I.)

In my view, the answer to that question should be “no, these recent DEA letters aren’t more or less authoritative than interpretive rules.” This is because unlike proposed rules, interpretive rules are not binding. They don’t have the force of law, and they don’t require notice under 5 U.S.C. 553. Instead, interpretive rules are just DEA’s opinions on the record. They are like the spate of letters referenced above, all gussied up.

But, let’s get back to the question of DEA undertaking enforcement action, per its position in one of these letters. That’s what most people really care about!

A long time ago, I wrote a blog post called “Are CBD Food and Drinks Really Not Legal? Really?” In that post, I explored a similar question in the context of another agency, the Food and Drug Administration. The FDA took a position, outside of rulemaking, on the legality of CBD in food and beverages upon the release of the 2018 Farm Bill. I wrote in that post:

Someone could (and might) sue FDA if FDA were to take an enforcement action based solely on the fact that a food or beverage product containing Farm Bill hemp-CBD were sold in commerce. Would they win? I’m guessing not. But the question for the courts would be what level of deference to afford FDA, and the law is somewhat unclear on that today. Some commentators believe that Congress needs to clarify the issue, arising from a line of cases known as Chevron and Mead….

The Chevron and Mead cases have been around forever. Federal courts have used them for nearly 40 years and in more than 18,000 judicial opinions, to defer to an agency’s “reasonable interpretation of an ambiguous statute.” I’m sure agencies like FDA and DEA appreciate Chevron deference quite a lot. Recently, however, the doctrine has been challenged by a pair of pending cases before the U.S. Supreme Court. I don’t mean to be dramatic, but we should get a decision on those cases any day.

If the Supreme Court discards or weakens Chevron deference, the DEA letters would lose a bit of authority in my view. That said, the letters would still serve as valuable industry benchmarks, and remain more authoritative than opinions of someone like me, or anyone short of a federal court.

Things to watch for next are:

what the U.S. Supreme Court does in the above-mentioned cases;
what Congress does in any 2024 Farm Bill; and
what enforcement actions DEA takes, if any, on the substances it believes are controlled.

For now, I’m happy that DEA is willing to share its positions as a pen pal to industry, eschewing the stuffy rulemaking process for every minor cannabinoid (and magic mushroom spore). I also think that, notwithstanding the fact that people are e.g. selling THCA everywhere, folks should pay close attention to DEA’s reading of the law on these things. The Administration will get it right more often than not.

And even when not, being the test case is no fun at all.

The post It is Legal, or Not? What to Make of All These DEA “Position” Letters appeared first on Harris Sliwoski LLP.

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