During this time of great tension and competition between the marijuana and hemp industries, it is refreshing to see efforts at compromise. The initial draft of the Cannabinoid Safety and Regulation Act, proposed last week by Oregon Sen. Ron Wyden, would represent a momentous compromise in creating a regulatory framework for hemp-derived cannabinoids. And it appears to have the support of key stakeholders in the hemp industry.

Our friends at Marijuana Moment provided a nice summary:

The legislation… comes at a pivotal time, with debates playing out at the state and congressional levels about how to address public health concerns related to the proliferation of largely unregulated intoxicating cannabinoid products since hemp and its derivatives were federally legalized under the 2018 Farm Bill.

Rather than impose an outright federal ban on hemp products containing traceable amounts of THC, as has been proposed in two major Republican-led pieces of legislation on the House side in recent months, Wyden’s bill offers a regulatory pathway that many hemp stakeholders view as a more sensible alternative that wouldn’t threaten to pull the rug out from under the industry.

The proposal is 80 pages long, and your author has previously pledged to try not to be boring, so in this post I will (1) present what appear to be the overall goals of the proposal; (2) identify the key substantive provisions in the proposal, and (3) then offer a few thoughts on what this all means moving forward.

At a high level, the legislation seeks to provide a robust regulatory framework to legitimize certain portions of the hemp industry and to make sure that hemp products that do survive are safe and effective, subject to close regulatory scrutiny, kept out of the hands of children, and free from deceptive marketing practices targeting vulnerable populations. Perhaps the most important concept is not what is said, but what is unsaid: Implicit in the concept of creating a regulatory framework is the fact that the proposal does not seek to ban hemp as a whole or “close the loophole” for certain cannabinoids created by the 2018 Farm Bill. This is no small thing, as many social conservatives and marijuana advocates have argued for exactly that – something we have written about extensively. This regulatory framework represents a compromise that basically says “we aren’t going to ban hemp, but we’re going to dramatically limit the types of products available and impose substantial regulations on those who choose to continue in the hemp business.” And as discussed below, there is some chance that the regulations may be so onerous as to essentially cripple huge parts of the hemp industry without outright banning them.

How so? Let’s examine the key provisions of the proposal with the help of our friends at Marijuana Moment:

• Businesses selling hemp cannabinoid items meant for human consumption would need to register with FDA and comply with the agency’s safety regulations. Such products could not be sold to people under 21, and they would need to adhere to federal labeling requirements.
• The bill specifically preserves the rights of states to set tighter regulations, including banning the products altogether as has played out in certain markets – including the recent rules enacted in California prohibiting the sale of products with any “detectable amount of total THC.”
• States that allow the products would need to abide by federal packaging and labeling rules and they could not prevent companies from transporting hemp cannabinoids through their state regardless of their individual laws.
• All products would need to feature an internationally recognized symbol and statement identifying them as containing cannabinoids. States could use different symbols for intoxicating vs. non-intoxicating items.
• FDA would be required to promulgate rules on the remote sale, marketing and distribution of hemp cannabinoids to prevent youth use within 18 months of the measure’s enactment. Within nine months, the agency would need to establish good manufacturing processes for such products. In general, FDA would have the authority to enact additional regulations on the sale and production of hemp cannabinoids if they serve public health interests.
• FDA would have the authority to create and mandate the inclusion of a “nutrition facts-like” label for cannabinoids. It could also decide to require tamper-proof packaging through the rulemaking process.
• Hemp cannabinoids could be considered as, or included in, food items if they meet federal Food, Drug, and Cosmetic Act standards laid out in the bill. However, businesses couldn’t sell cannabinoid products if they contain alcohol, tobacco or nicotine.
• Vapes containing cannabinoids could not have natural or artificial flavors, and they could contain no more than 6% terpenes.
• Synthetically derived cannabinoids, which appear to include delta-8 THC products, would be banned.
• THC would refer to the total content of the cannabinoid in all forms, including delta-8, delta-9, delta-10, THC-A and HHC, for example.
• The heads of the U.S. Department of Agriculture (USDA), FDA, Justice Department, and Alcohol and Tobacco Tax and Trade Bureau (TTB) would be required to work together to create a report with recommendations on regulating the sale of beverages containing THC.
• There would be mandatory recalls of any hemp cannabinoid products that FDA determines to be unsafe.
• There would be $200 million in annual appropriations over five years for the Centers for Disease Control and Prevention (CDC) to support data collection on cannabis use trends and evidence-based prevention programs, mandatory data collection on impaired driving, $40 million in grants over five years for state agencies to combat driving under the influence, and $30 million for research development to create a device capable of detecting impaired driving.

That’s obviously a lot. And Wyden’s office clearly spent a great deal of time and thought preparing the text. Here are a few of my takeaways and general musings on the proposal:

• I’ll repeat what I’ve said before: This is a compromise. Many in the marijuana industry will not be satisfied because the proposal would allow for ingestible hemp products, including some that may produce intoxicating or psychoactive effects, to continue to be sold rather than banning such products altogether. Similarly, many existing hemp operators will be disappointed to see that many currently available hemp products will no longer be available if the Wyden proposal becomes law.
• On the flip side, marijuana operators can take comfort that their perceived competition on the hemp side are about to face a much tougher regulatory landscape than they have experienced since the 2018 Farm Bill. In theory, that should better level the playing field in the eyes of marijuana operators. Hemp operators, on the other hand, have to be breathing a huge sigh of relief that the proposal isn’t an outright ban of ingestible hemp products. That would have been an existential threat to the entire hemp industry and a worst-case scenario that, at least under this proposal, has been averted.
• There appears to be at least some support for the Wyden proposal amongst hemp industry stakeholders. “We strongly support Senator Wyden’s efforts here to promote robust regulation for hemp products, as opposed to misguided prohibition,” Jonathan Miller, general counsel of the U.S. Hemp Roundtable, told Marijuana Moment. “This is precisely what the hemp industry has been urging” since hemp was legalized under the 2018 Farm Bill.
• But is it also the case that this may be a bit of a “shadow ban” of most hemp operations? The reality is that many existing hemp operators will find it extremely expensive, cumbersome, and otherwise challenging to meet the requirements of the Wyden proposal. If a law allows you to do something under certain conditions, and those conditions are ones you cannot meet as a practical matter, is it really allowing you to do it? I suspect skeptical hemp advocates will take this view and work hard to ensure that the regulatory regime strikes the balance between appropriate rules and practical business realities.
• And of course, this wouldn’t be a cannabis issue if it wasn’t complicated by the intersection of federal and state law. Wyden has described his proposal as a “federal floor for regulation of hemp products” and, as noted above, the bill specifically preserves the rights of states to set tighter regulations, including banning the products altogether.

This is another step in a long-running process to establish a comprehensive federal cannabis regime. I think it’s an important step, and I think it contains a number of good ideas. In the weeks and months ahead, there will be more ideas, plenty of debate, and enough money paid to lobbyists to buy plenty of the products in question.

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