Hemp-CBD Across State Lines: Arizona

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA. This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp-CBD”). Each Sunday we will summarize a new state in alphabetical order. So far, we have covered Alabama and Alaska. This week we turn to Arizona.

The Arizona Department of Agriculture (“AZDA”) oversees the state’s hemp program.  The hemp program began in May 2018 when Senate Bill 108 was signed into law, which opened up hemp processing in the summer of 2019. It took the state a year so that it could develop the regulations and licensing program. As of now, the state’s opening up for license applications. Arizona’s hemp laws and regulations can be found here and here respectively.

Under Arizona law, growers (and nurseries), processors, harvesters, and transporters are required to obtain AZDA licenses, which AZDA publishes applications for here. The regulations also require researchers to obtain licensure. Notably, the AZDA doesn’t regulate retailers, which I’ll discuss some more below.  Like in any other state with regulated hemp, there are fees, compliance rules, and penalties for non-compliance. But the level of regulation is not even close to what we see for cannabis/marijuana in many other states.

It’s important to consider that the 2018 Farm Bill hasn’t yet been fully implemented, meaning for the time being, the 2014 Farm Bill is still in play. Even though the 2014 Farm Bill doesn’t expressly allow for commercial activity, a number of states have broadly interpreted it to permit commercial activity. Arizona is allowing commercial activity for licensees of the AZDA—in addition to allowing research as noted above—but it doesn’t appear to have taken the position that commercial sales are authorized under the 2014 Farm Bill like other states. What this means is that under federal law, and until the 2018 Farm Bill is fully implemented, the state of the laws is murky.

One of the areas in which the law is murky is the sale of hemp products. There is currently no retail license type, and the hemp regulations state that it’s prohibited to “Offer for sale, trade, transfer possession of, gift, or otherwise relinquish possession of industrial hemp plants, plant parts, or hemp seed that is capable of germination to an unauthorized person”. However, a different section of the regulations states that processors can “sell, distribute, transfer, or gift any products processed from harvested hemp that are not” unauthorized. Read together, these sections only seem to bar the resale of plant parts and not all “Hemp products”, which are defined as “all products made from industrial hemp, including cloth, cordage, fiber, fuel, grain, paint, paper, construction materials, plastics and by-products derived from sterile hemp seed or hemp seed oil.  Hemp products excludes any product made to be ingested except food made from sterile hemp seed or hemp seed oil.” While there aren’t specific retail license types, the state may be okay with limited sales of hemp products.

In terms of what those hemp products are, the AZDA itself doesn’t regulate the production of products made from hemp according to the following statement from these FAQs on its website:

Q: Will I be able to manufacture “CBD” products from industrial hemp?
A: Yes, however the Program oversight only extends from the growth and cultivation of industrial hemp, up to the point of processing. For licensed processors, the Program will focus on ensuring they receive raw material that is below 0.3% THC. If there are food handling laws, laws and regulations under the oversight of the Food and Drug Administration, or other laws related to industrial hemp of another agency, then those issues are out of the Department’s scope of regulatory oversight.

In other words, the AZDA doesn’t have oversight over certain products, but that’s not to say that other authorities don’t.

Another important nuance of the regulations is that they state that “No unauthorized person shall . . . transport, import or process industrial hemp”. It’s not yet clear what the effect of this provision will be on interstate shipments of hemp or hemp products. The 2018 Farm Bill states that individual states can’t block shipments through their borders, but (a) that law hasn’t taken effect yet, and (b) Arizona is free to stop shipments of out-of-state hemp into Arizona. So in the end, the state may just be closing off its borders to out-of-state products.

There are not a great deal of restrictions on personal use. The AZDA notes in the FAQ that people aren’t allowed to grow hemp for personal use. When it comes to marijuana, the state has a medical marijuana program which is subject to much different regulations.

Arizona’s hemp laws are still in their infancy. That’s all likely to change as the federal government implements the 2018 Farm Bill and the FDA (hopefully) comes out with CBD regulations. Stay tuned to the Canna Law Blog for any further developments with Arizona CBD and hemp laws.

source https://hempgenixs.com/2019/06/30/hemp-cbd-across-state-lines-arizona/

Grading the Democratic Presidential Candidates on Marijuana: Joe Biden

Every Saturday, at least for a while, we plan to run a series of blog posts that take a close look at each of the Democratic Party candidates for President in 2020. We will examine each candidate’s historic approach to marijuana law and policy, and also canvas each politician’s current stances on marijuana.

Today, we start with Joe Biden, the former vice president and U.S. senator from Delaware. As of today’s post, Biden may still be the current party front-runner, and is certainly near the top of the heap.

Overall Grade: D

Stance on marijuana: Biden wants to decriminalize marijuana use and automatically expunge prior criminal records showing marijuana possession convictions. He is, however, far from an advocate for cannabis legalization. Biden’s campaign website nowhere even addresses his beliefs on cannabis. Instead, it makes a vague statement about criminal justice reform that nowhere mentions the War on Drugs or marijuana:

We need to reform the criminal justice system to prioritize prevention, eliminate racial disparities at every stage, get rid of sentencing practices that don’t fit the crime, and help make sure formerly incarcerated individuals who have served their sentences are able to fully participate in our democracy and economy….”

His failure to mention the War on Drugs or marijuana on his website despite using “criminal justice reform” as a policy point is presumably because he zealously supported the War on Drugs, as described below. If Biden truly believes “Nobody should be in jail for smoking marijuana,” as he told voters this past March, he owes an explanation for why he previously supported the arrest and incarceration of countless Americans for weed.

History with marijuana legislation: Biden’s failure to mention marijuana on his website is probably intentional. Over the course of his political career, Biden has expressed his disdain for marijuana, with both his rhetoric and his legislation. The former vice president is described as an architect of the War on Drugs by Michael Collins, the director of national affairs at Drug Policy Action. As a senator, Biden was largely responsible for creating the “drug czar” in 1982, a cabinet position that would go on to form the Office of National Drug Control Policy and increase enforcement of anti-drug laws. Biden consistently pushed for stepping up enforcement of draconian drug policies, even criticizing then-President George H.W. Bush for being too soft on drugs.

As vice president, Biden’s position on marijuana seemed more subdued as major drug policy changes were enacted under the Obama administration, including the Cole memo which made it easier for states to legalize marijuana. However, the Obama administration deflected all attempts to reschedule marijuana, leaving it classified as a Schedule I drug, the same schedule as heroin.

As the Democratic Party’s platform increasingly becomes pro-legalization, Biden continues to oppose the legalization of marijuana, even for medical use:

We have not devoted nearly enough science or time to deal with the pain management and chronic pain management that exists. There’s got to be a better answer than marijuana. There’s got to be a better answer than that. There’s got to be a better way for a humane society to figure out how to deal with that problem.”

Biden gets one thing right: we do need more research surrounding pain management. However, his refusal to acknowledge the viability of cannabis as a possible treatment exposes his basic misunderstanding of both marijuana and the drugs currently used to manage pain. Though extensive research is necessary to determine the efficacy of marijuana for specific maladies, there is little doubt that it has tremendous potential for reducing the U.S.’s ongoing opioid epidemic, among other things. Considering the existing scientific evidence, Biden’s perspective that marijuana is somehow “inhumane,” and thus not to even be considered as a treatment for pain, is simply illogical. His opinion stems more from prejudice against cannabis (and the people who use it) than from science.

Conclusion: Biden receives an “D” grade for his views on cannabis because he both fails to recognize or acknowledge its medicinal uses and because he is the only prominent Democratic Party presidential candidate who does not support cannabis legalization. The only thing Biden has going for him is a stated desire for criminal justice reform, which saves him from a failing grade.

source https://hempgenixs.com/2019/06/29/grading-the-democratic-presidential-candidates-on-marijuana-joe-biden/

Banking, financing remain serious struggle for hemp, CBD businesses

Hemp farmers and businesses continue to have difficulty financing their operations and securing banking services, despite federal lawmakers’ calls for them to be treated as lawful, legitimate businesses following passage of the 2018 Farm Bill. Due to a lack of clear federal banking regulations and uncertainty from financial institutions, hemp and CBD businesses are finding that […]

Banking, financing remain serious struggle for hemp, CBD businesses is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/28/banking-financing-remain-serious-struggle-for-hemp-cbd-businesses/

European regulators, activists join calls for CBD oversight

Europe’s booming CBD market needs better regulation and safety protocols, according to two reports out this week from both government regulators and nonprofit activists. First, the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), an agency of the European Union, said there is an “urgent need” to get a handle on the potency of CBD […]

European regulators, activists join calls for CBD oversight is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/28/european-regulators-activists-join-calls-for-cbd-oversight/

The Top 5 Most Dangerous Cannabis Contracts in California

Obviously, work in the cannabis industry for attorneys is way more than just state license acquisition. In fact, after a few years and with the exception of competitive licensing regimes, state licensing slows down and is usually taken in-house by cannabis companies that formulate compliance teams. In turn, as time goes on, a significant amount of the legal work in the industry turns on transactions between licensees. California has certainly been no different (though we’re dragging in the licensing department, mostly because of local control issues). Still, existing licensees are having no trouble conducting transactions with each other and with third parties for goods and services as they race to gain market share and build their brands.

As California’s regulated cannabis industry continues to emerge, licensee transactions are becoming more sophisticated and diverse. At the same time, because of the newness of California’s regulated market (combined with regulators’ continuing evolution of regulatory interpretations), certain transactions are posing larger and riskier issues for licensees. This post is dedicated to the top five most dangerous licensee-to-licensee contracts in California:

1.      Slotting Fees.

In recent months, our California cannabis business attorneys have seen a good amount of “pay-to-stay” and slotting fee agreements between cannabis cultivators, manufacturers, distributors, and retailers for dedicated, prime-time shelf space. In commodities, especially saturated ones, face time with consumers isn’t great and margins can be really poor and the competition is vast. In California, only cannabis retailers can sell to the public, so it’s hugely important for wholesale and distributor licensees to have good placement on shelf space in dispensaries and on the retailers’ online menus. The slotting fee agreement essentially amounts to the lump sum fee the supplier pays to the retailer to reserve their sacred, strategic shelf space. The pay-to-stay agreement (which can be similar to the slotting fee) typically takes things a step further where it’s instituted after the initial slot and addresses issues for existing products like marketing, promotion, inventory stocking, failure fees, and paying extra to ensure that your competitors don’t get any valuable shelf space near you or at all. The question, though, is whether such agreements are kosher in California in the first place given that our state cannabis laws generally prohibit anti-competitive practices by licensees. The answer on validity under these laws is that “it depends.” Analyses around anti-competitiveness and slotting fee contracts is highly factually intensive, and California cannabis regulators don’t seem aware that this practice even exists. While these contracts can give great security to licensees, they can also be used to block and strangle out other wholesales that may not be as capitalized or strategic in the marketplace. For more on slotting fee agreements, see here.

2.     Distribution Agreements. 

Even though the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) stripped distributors of massive amounts of power (since, unlike alcohol, cannabis distributors don’t have to take title to the products they distribute), they are still 100% necessary in the California cannabis marketplace because they are the only license type that can transport marijuana products and they’re also the only licensees that can coordinate the required third-party testing of licensees’ products. Plus, prior to any retail sale, licensees must ensure that a distributor undertakes quality assurance packaging and labeling reviews of their products, and they’re almost exclusively in charge of collection and remittance of the cultivation and excise taxes to the California Department of Tax and Fee Administration. Since wholesale licensees have to go through distributors to get to market, distribution agreements are necessary. If your distributors is just your freight middle man, these agreements are not that potent and risk-laden. However, if you’re using your distributor similar to an alcohol distributor (i.e., a brand house), you’ll need to ensure that your distribution agreement is way more aggressive regarding term, circumvention to retailers, purchase amounts, timing, acceptance and rejection of products, testing issues and recalls, regulatory compliance and accountability, and representations and warranties regarding the products at issue. Specifically in California, our cannabis business lawyers have seen far too many one-sided distribution agreements that aren’t properly drafted, aren’t compliant with MAUCRSA, and that pay no attention to detail.

3.     Real Property Leases. 

The reason why real property leases make the list is because all too often our California cannabis business attorneys have clients coming to them with boilerplate lease documents that don’t even mention MAUCRSA and/or the collateral effects and contingencies born by using real property for commercial cannabis activity. Real estate is one of the most important assets and must-have’s for all forms of licensure and permitting, so details around licensing timeline, code of conduct, federal intervention, commercial cannabis insurance, and local and state licensing compliance should be huge for the parties, and not some after-the-thought from a form lease document. For more on California cannabis leases, see here, here, and here.

4.     IP Licensing.

Intellectual property licensing in cannabis is already precarious where cannabis companies cannot secure federal protection for their trademarks from the USPTO.  More often than not though, cannabis companies can get trademark protection from the state governments in the states in which they operate. Of course, there can be additional oddities when it comes to state-specific IP protection for cannabis companies. In California, in particular, only cannabis licensees can register and protect their cannabis trademarks with the State of California.  And California was also about to have a very complicated relationship between third party, unlicensed companies that license their IP to cannabis companies, but backed off on second thought on adoption of the final rules in January of this year. The common case issues with cannabis IP licensing are whether the licensor even has the IP they say they do (and whether or not that IP is protected or even protectable, which oftentimes its not because of existing infringement problems) and the regulatory ins and outs applicable to IP licensing. In California, if you’re going to be an IP licensor to a cannabis licensee, you will need to be disclosed to the state as a “financial interest holder,” including if you’re taking a royalty as consideration for the granting of the license. Many operators  and their IP licensors fail to make this disclosure and/or don’t understand regulators’ position relative to this requirement, which makes performance obligations and regulatory accountability in the agreement even more opaque.

5.     Influencer Agreements.

Influencer agreements made the list because licensees typically forget or ignore that these contracts constitute advertising, marketing, and promotion, which is heavily controlled by MAUCRSA and the Bureau of Cannabis Control. Basically, as a licensee, if you use an influencer, you’re on the hook for their words and actions as they relate back to your company and products. All of this means that cannabis companies who want to work with influencers must use detailed contracts, training, and/or guidelines to educate their influencers on how to not violate applicable regulations. And this is not something that cannabis companies should gloss over in a two-page, boilerplate contract. Generic provisions that require all parties to follow all applicable legal requirements may be sufficient in some contexts, but influencers are probably not aware of the specifics in cannabis regulations, and in California, for example, you better make sure that your influencer is gearing their ads and promotions to adults only (and that they can prove that to a reasonable degree of certainty if regulators ask). In addition, the influencer pretty much can’t do anything that’s attractive to a kid (under the age of 21) and if they do, the licensee is going to be on the hook.

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All of the above agreements need to be handled with significant care and a deep grasp of the regulatory landscape in California. As always, the boilerplate will not cut it when it comes to compliance and accuracy, so don’t get caught on the wrong side of one of these dangerous contracts.

source https://hempgenixs.com/2019/06/28/the-top-5-most-dangerous-cannabis-contracts-in-california/

Editor’s Notebook: Why slow-moving hemp regulations are still great for cannabis

(This is an abridged version of a column that appears in the May-June issue of Marijuana Business Magazine.) The hemp industry is changing fast. The federal government, not so much. The entire cannabis industry celebrated last December, when hemp was removed from the Controlled Substances Act in the 2018 Farm Bill. All of a sudden, the […]

Editor’s Notebook: Why slow-moving hemp regulations are still great for cannabis is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/27/editors-notebook-why-slow-moving-hemp-regulations-are-still-great-for-cannabis/

Oregon Hemp-CBD Litigation: Another Tale on the Importance of Due Diligence Before Contracting

Most of the hemp litigation we’ve written about has concerned a hemp purchaser suing a hemp farmer. This week concerns a $2.5 million lawsuit recently filed in Oregon wherein a hemp farmer sued a CBD processor.

The plaintiff, JNV Farms, alleges that in the fall of 2018 it entered into a manufacturing agreement with one of the defendants, C&N Ag LLC (“C&N”), by which JNV Farms was to provide industrial hemp to C&N who was to process the hemp into CBD Isolate and market and sell the finished product. The complaint alleges that profits were to be split 50/50.

According to the complaint, JNV Farms provided the defendants 13,800 lbs of biomass in December 2018. The defendants represented they were testing and preparing to process the material. After JNV Farms made repeated inquiries, defendants became less communicative then eventually refused to respond at all, and refused to meet with JNV Farms or permit inspection of the hemp or finished product.

JNV Farms claimed the defendants (i) neglected or refused to complete the work contemplated by the contract, (ii) failed to return the industrial hemp, (iii) failed and refused to compensate JNV Farms for the hemp, and (iv) failed to provide JNV Farms any of the CBD Isolate or the share of revenue from its sale. JNV Farms alleged claims for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, conversion, and fraud.

Finally – and not insignificantly – the complaint seeks to pierce the corporate veil and to hold the two owners of C&N, defendants Mock and Eastburn, personally responsible for the liabilities of C&N. This claim, perhaps more than the others, may strike fear into the defendants. As every business owner knows (or should know) a key purpose of incorporation is to shield company assets from being used to satisfy company obligations. The goal of a veil-piercing claim is to reach past the corporate shield and into the pockets of owners or investors.

Piercing the corporate veil is difficult. As it should be. But the complaint appears to allege facts sufficient to withstand a motion to dismiss. Notably the complaint alleges that when Mock and Eastburn negotiated the contract, and as of the date it was executed, that C&N was not yet in existence because no paperwork had yet been filed with the Oregon Secretary of State. This fact, if true, is not necessarily dispositive. (Indeed, if there was no corporation there is no need to pierce the corporate veil). But no one entering million-dollar contracts (Mock and Eastburn) ought to do so without having completed the necessary steps to form an entity. On the flip side, JNV Farms likely could have done a better job protecting its investment and the lawsuit may, as it often does, come down to whether the defendants have any recoverable assets. Time will tell.

For more on the recent wave of Oregon hemp litigation, check out the following:

• Oregon Hemp Litigation: Bad Contract = Big Federal Court Claims
• Oregon Hemp Litigation: Multi-Million Dollar Crop Delivery Lawsuit Filed
• Avoid Hemp Litigation with a Real Agricultural Production Contract
• Oregon Industrial Hemp Litigation: Won’t You Be My Neighbor?

source https://hempgenixs.com/2019/06/27/oregon-hemp-cbd-litigation-another-tale-on-the-importance-of-due-diligence-before-contracting/

Liquor stores, gas stations among first cleared to sell CBD in Louisiana

Louisiana is starting to award permits to sell CBD products, and the first recipients include liquor stores, gas stations and CBD-specific shops. Louisiana’s Office of Alcohol and Tobacco Control has so far awarded 20 temporary permits to sell CBD. A new Louisiana hemp law allows the sale of hemp-derived CBD, but requires a state permit to do […]

Liquor stores, gas stations among first cleared to sell CBD in Louisiana is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/27/liquor-stores-gas-stations-among-first-cleared-to-sell-cbd-in-louisiana/

CBD Business Opportunities: What You Can Expect in the CBD Business in the Near Future

If you like to keep track of trends in the business world, there is probably one product that you have found it hard to ignore: CBD. From cosmetic brands to major pharmaceutical companies, CBD (including hemp products) have been a cross-industry sensation, and there is scientific backing as to why. Every person has an endocannabinoid …

CBD Business Opportunities: What You Can Expect in the CBD Business in the Near Future Read More »

The post CBD Business Opportunities: What You Can Expect in the CBD Business in the Near Future appeared first on Honest CBD Reviews.

source https://hempgenixs.com/2019/06/26/cbd-business-opportunities-what-you-can-expect-in-the-cbd-business-in-the-near-future/

CBD company taps Victoria’s Secret marketing expert

A CBD company expanding into shopping malls has tapped a marketing executive from mall staple Victoria’s Secret to lead its branding. Green Growth Brands of Columbus, Ohio, appointed Jann Parish its chief marketing officer. Parish also held that title with Victoria’s Secret. Before that, Parish ran branding campaigns for retail brands Calvin Klein and Tommy […]

CBD company taps Victoria’s Secret marketing expert is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/26/cbd-company-taps-victorias-secret-marketing-expert/

Florida governor signs state hemp program into law

After months of preparation, the state of Florida is ready to move ahead with commercial hemp production under a bill signed Tuesday by Gov. Ron DeSantis. Florida Agriculture Commissioner Nikki Fried said hemp in Florida is needed to help farmers harmed by hurricanes and diseases that have affected citrus, the state’s largest commodity. Hurricane Michael […]

Florida governor signs state hemp program into law is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/26/florida-governor-signs-state-hemp-program-into-law/

Cannabis Patents: Will the Illegality Doctrine Ruin Everything?

E-commerce platform for CBD-infused products in the works in Asia

A company backed by U.K. billionaire Jim Mellon and Lorne Abony, co-founder of global cannabis concern Nuuvera, plans to establish what they say will be Asia’s first e-commerce platform focusing on CBD-infused products.

E-commerce platform for CBD-infused products in the works in Asia is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/26/e-commerce-platform-for-cbd-infused-products-in-the-works-in-asia/

USDA says production rules will be ready by August

The U.S. Department of Agriculture (USDA) says it will complete federal rules for domestic hemp production by August. Although states and tribes began submitting their plans to the USDA for review starting the day after the 2018 Farm Bill was signed in December, the agency said in February it wouldn’t finalize rules until the 2020 growing season. Under […]

USDA says production rules will be ready by August is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/25/usda-says-production-rules-will-be-ready-by-august/

California Cannabis Legislation: SB 475 Would (Finally) Allow Licensees to Exchange Trade Samples

An issue our clients have encountered in a variety of transactions, including basic product purchase transactions and intellectual property licensing transactions, is that the California rules governing commercial cannabis licensees currently do not allow the exchange of free samples between licensees. We are unaware of an industry in which the wholesale purchaser of a large quantity of product, or the licensor of intellectual property for use on such product, wouldn’t want to ensure the quality of that product. But in California, the regulations don’t always make sense and the regulatory learning curve has been steep.

Senate Bill 475, which is set for hearing today, June 25^th, is one of many pieces of pending legislation that would provide clarity to licensees regarding what they can and can’t do with cannabis samples. Currently, licensees are prohibited from giving away any amount of cannabis or cannabis product as part of a business promotion or other commercial activity.

SB 475 would “allow a licensee to designate cannabis or a cannabis product as a trade sample at any time while the cannabis or cannabis product is in the possession of the licensee and would impose specific requirements on the licensee making the designation. The bill would prohibit the sale or donation of cannabis or a cannabis product that is designated a trade sample, but would allow those trade samples to be given for no consideration to an employee of the licensee that designated the trade sample or to another licensee.”

Cannabis trade samples must, upon designating cannabis or cannabis product as a trade sample, record the associated quantity, product type, and unique identifiers of the product into the track and trace program. The cannabis must be labeled, “TRADE SAMPLE. NOT FOR RESALE OR DONATION,” and may only be transported between licensees by an employee of a licensee. Trade samples may not be sold or donated by any licensee.

In addition, samples of cannabis or cannabis products designated as trade samples may be given for no consideration to an employee of a licensee that designated the trade sample or to another licensee, subject to the following requirements:

1. A trade sample shall only be given for the purposes of conducting research and development, education, or targeted advertising to licensees about new or existing cannabis or cannabis products.
2. A licensee shall maintain records of cannabis or cannabis products designated as trade samples that are given to employees.
3. An employee of the licensee shall not possess or transport trade samples in amounts exceeding the following:
   1. Twenty-eight and one-half grams of nonconcentrated cannabis.
   2. Eight grams of concentrated cannabis, including concentrated cannabis contained in cannabis products.
   3. Six immature cannabis plants.

Under SB 475, cannabis or cannabis products can be consumed by the licensee or an employee of the licensee. The bill also clarifies that cannabis or cannabis products may not be given to retail customers, and that all products designated as trade samples are subject to required quality assurance and testing regulations.

If passed, SB 475 will correct what we perceive to be a serious defect in the regulations and will make doing business in the industry just a little bit easier.

source https://hempgenixs.com/2019/06/25/california-cannabis-legislation-sb-475-would-finally-allow-licensees-to-exchange-trade-samples/

Foreign Direct Investment (FDI) from China in U.S. Cannabis Businesses

If you think your Chinese investor will be able to get your cannabis venture the promised investment funds any time soon, you are in for a long slog. Most companies do not care who provides their investment capital (as long as the investors are content being passive investors), and Chinese households have typically been lauded as excellent savers, much more so than we in the U.S., leaving money available to invest at home and abroad. Recently I spoke with a client in the California cannabis industry who had invested several million dollars into an integrated cannabis operation (cultivation, processing/manufacturing, and distribution). In conducting due diligence about his investment, I was interested to see that he was the only person involved in the business who was non-Chinese. He wanted to get his investment dollars out to put into a new venture, and he said, “The other owners tell me that they have friends in China who can put in enough money into the company that they can buy me out. But they are having trouble getting their money out of China right now. Do you think they will be able to get their money from China to the U.S. in the next few weeks?”

I chuckled in spite of myself and said, “That is not going to happen that soon, and it may not be possible to accomplish even in a few months.” China’s government has a tight grip on its money (technically renminbi (人民币) means “the people’s money”, but the people can’t be bothered to look after their own money, right?). Even when times are good, China controls foreign currency leaving the country, especially U.S. dollars. But times are not good in China, despite recent reassurances from Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission. How do we know times are not good in China? There are a lot of smart people in the world who track where money flows and how that movement (or lack thereof) impacts our qualities of life. They are called macro (big picture) economists. These economists have noticed that (a) although China is encouraging foreign investment in its banking and insurance sectors, promising ownership of up to 100% by foreign investors, so far no one is biting, and (b) foreign lending institutions are loathe to provide capital to Chinese banks and industries, seeing economic risks in China everywhere they look.

Chinese would-be investors in U.S. ventures, including hot market cannabis enterprises, are finding it exceedingly difficult to get money out of China, even their allotted USD $50,000 in foreign currency that each Chinese national is supposed to be permitted to purchase and transfer out of China, according to China’s State Administration of Foreign Exchange. But in practice, such applications are being more closely scrutinized by China’s ever-present bureaucratic machine, and even China’s elites like the former central bank adviser, Yu Yongding, are being denied access to foreign currency. That means your prospective Chinese investor or business partner (or customer who owes you money for your raw inputs, such as U.S. timber) will not be able to get you those U.S. dollars you have been waiting for any time soon, no matter how well connected they are.

Why is China holding onto U.S. dollars? We’ve discussed this (and all things related, on our firm’s China Law Blog) but China needs to maintain its foreign exchange reserves (largely held in dollars) for several reasons. One of the primary reasons is so that China can continue to fund its global export machine that does business in U.S. dollars with the rest of the world. Chinese exporters buy their raw inputs in U.S. dollars, so China’s central bank needs to keep foreign exchange reserves on hand to facilitate those transactions. A second reason is that to the extent China can keep U.S. dollars out of circulation, China can artificially keep its currency value low, which makes its exports more affordable to the U.S. and the rest of the world. China holds more than $3 trillion in of its assets in a foreign currency, which equals approximately $2,142,000 per capita in China’s 1.4 billion population (in comparison, the U.S.’ $126 billion in foreign exchange reserves equals approximately $385 per capita in the U.S.’ 327 million population). China’s currency restrictions are not new. These restrictions are an integral part of China’s economic policies under which China wants to keep its yuan valuation at least seven times higher than the U.S. dollar. China can also use its foreign currency holdings to buy up yuan when others are trying to dump it, to keep the yuan from freefalling in foreign exchange markets due to concerns like a trade war or ongoing economic restrictions or sanctions.

To bring this discussion full circle, if your would-be cannabis business investors are Chinese or have money in Chinese bank accounts that they are having “a little trouble” getting to your U.S. bank account, do not make any near-term plans that rely on their promised dollars, especially if the promised amount is more than $50,000. Chinese currency leaving for foreign markets is a form of capital flight to which China is keenly attuned and to which it will take great measures, both overt (currency manipulation) and covert (denying individual foreign exchange transactions in Chinese banks, even when those transactions are in sync with Chinese law).

Also, if your international investor has already applied or wants to apply for a fast-track EB-5 visa path to U.S. citizenship, their investing your marijuana venture (regardless of current state legality) is a huge red flag that will derail their application process and impact their ability (if they are or become a green card holder) to become a naturalized citizen because they will have been involved with a controlled substance under U.S. federal law. If the potential investor’s immigration attorney is not aware of that minor detail, then you can do your investor a favor and let them know. For a primer on foreign investment in U.S. cannabis businesses, read this. It is reasons like this, the intersection of our firm’s international practice and our cannabis practice, that make my daily law practice so interesting, intellectually rigorous, and fun.

source https://hempgenixs.com/2019/06/24/foreign-direct-investment-fdi-from-china-in-u-s-cannabis-businesses/

Pharm Organics Energy Drink Review, Tincture Update

Pharm Organics is a company I have done a review on before and I am back with a review on their energy and focus drink drop ins. Also, I have an update for their tincture, this time I got to try their Sicilian Orange flavor in 1000mg. First, I’ll tell you about the energy drink. The Energy Drink: I love the idea of CBD beverages because I feel it’s an easy way to take CBD on the go. These powder drop ins are perfect to put in a cold bottle of water and get your day started. They come in one flavor, which is berry fusion and has 13.5mg of CBD. In addition, they have ingredients like maca root, ginseng and more, so you can keep going while maintaining focus for the day. Ingredients: Review: I thought these drop ins were really effective and tasted good, too. I love the fact I could drop a little packet in my purse and use when needed anytime. These drop ins are convenient, tasty and kept me going throughout the day with vitamins, natural herbs and caffeine. I have to admit, I am a energy drink person. I love a energy drink every once in a while, but I hate the ingredients of most of them so I drink them sparingly, but these little drop ins pack a punch with healthy ingredients and a pick me up from caffeine and hemp, so I could easily replace the store bought energy drinks with these and feel better about what I am consuming. In conclusion: I would absolutely drink these again and I recommend you give them a try if you get a chance. This is a great way to cut back on the unhealthy canned stuff and try something that has some good stuff inside!   The Tincture Review Update: I got to try the tincture once before in 250mg in the mint flavor and this time I tried the 1000mg in Sicilian Orange. The 250mg, as stated before, didn’t work as well for me due to the fact I am used to a higher mg in my tinctures and I am happy to say, this 1000mg worked quite well. In addition, the flavor of the Sicilian Orange is so good. It’s a bright, juicy orange flavor, slightly sweetened with stevia and extremely easy to swallow. Furthermore, I felt relief from anxiety with this oil and I felt the higher mg really worked well for me. I am so glad I got a chance to try it and am pretty excited to update with this review as I really am impressed with Pharm Organics. In addition, their customer service is exceptional. When they read the review and saw the 250mg didn’t work for me, they asked me to review the 1000mg, further proof they really want their customers to experience the benefits of their products and they stand behind them.   Other Products to Consider: They also have pet CBD, topical and a soft gel with melatonin, which I love the idea of for those of us who have sleep issues. Check them out here and save and let me know what you think! I would love to hear from you!              

The post Pharm Organics Energy Drink Review, Tincture Update appeared first on Sweet Honeybee Health CBD.

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Pharm Organics Energy Drink Review, Tincture Update was first posted on June 24, 2019 at 6:00 am.
©2018 ““. Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at tiffany@sweethoneybeehealth.com

source https://hempgenixs.com/2019/06/24/pharm-organics-energy-drink-review-tincture-update/

Survey finds 22% of consumers replace OTC, prescription drugs with CBD

Since passage of the 2018 Farm Bill, CBD has risen to the forefront of American consciousness as an alternative health and wellness supplement, and research finds that a growing number of consumers are using it to replace their prescription and over-the-counter drugs. A national January 2019 Consumer Reports survey of more than 4,000 CBD users […]

Survey finds 22% of consumers replace OTC, prescription drugs with CBD is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs

source https://hempgenixs.com/2019/06/24/survey-finds-22-of-consumers-replace-otc-prescription-drugs-with-cbd/

Hemp-CBD Across State Lines: Alaska

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA. This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp-CBD”). Each Sunday we will summarize a new state in alphabetical order. Last week was Alabama. This week we turn to Alaska.

In April 2018, Alaska enacted Senate Bill 6 (SB 6), “An Act Relating to the Regulation and Production of Industrial Hemp.” SB 6 was passed before the 2018 Farm Bill, in compliance with the 2014 Farm Bill. Under SB 6, “industrial hemp” is defined as “all parts and varieties of the plant Cannabis sativa L. containing not more than 0.3 percent delta-9-tetrahydrocannabinol.” SB 6 defines “cannabidiol” oil as the “viscous liquid concentrate of cannabidiol extracted from the plant (genus) Cannabis containing not more than 0.3 percent delta-9-tetrahydrocannabinol.” SB 6 does not address the processing of industrial hemp into Hemp-CBD products

The Alaska Department of Natural Resources (“DNR”), which is a part of the Alaska Division of Agriculture, has regulatory authority over industrial hemp. According to the Alaska Journal, Alaska’s hemp program has been off to a slow start as DNR took time to work with law enforcement to come up with a regulatory plan for hemp.

On May 31, 2019, DNR issued proposed industrial hemp rules.  These rules are extremely detailed and are not yet final. This post will summarize some of the highlights including cultivation, processing, sales, and hemp-derived products. The proposed rules also provide a detailed outline of industrial hemp transportation and testing, including procedures for quarantining and destroying non-compliant hemp and hemp products.

Under proposed rules, DNR will issue three “classes of industrial hemp registration for participation in the [Alaska Industrial Hemp Pilot Program],” for growers, processors and retailers.

Grower registration. A registered grower may grow, store, and transport industrial hemp. A grower may also sell raw industrial hemp to another grower or to a processor or sell industrial hemp “to persons who are not required to be registered by this chapter, including consumers in the state, if the hemp will not be further processed[.]”  A grower cannot sell industrial hemp that has been processed unless it holds a processor registration as well. Growers must retain records of the source of all industrial hemp seeds and propagules. Industrial hemp cultivation is only allowed in a registered “grow area,” which cannot be a residence and cannot be within 3,230 feet of a marijuana grow. Growers must submit planting report to DNR 30 days after planting or replanting hemp seeds and propagules. Pesticides are only to be applied by an Alaska Department of Environmental Conservation certified applicator. Growers cannot harvest hemp until it has been tested by DNR unless DNR gives express permission allowing a post-harvest test. In either scenario, industrial hemp must be tested before a grower may sell it.

Processor registration. A registered processor may process industrial hemp in its raw form into any other form or product. Processors may purchase, store, and transport raw hemp. Processors may sell processed hemp or hemp products to retailers. Processors must comply with all applicable health and safety standards.  Processors may only create hemp-based extracts using the following methods:

• Non-hydrocarbon extractions, including: cold or hot potable water filtration; isopropyl alcohol or isopropanol; ethyl alcohol or ethanol; carbon dioxide; dry ice; or dry shifting or sieve.
• Hydrocarbon extractions, including: n-butane; isobutene; propane; or heptane.

Processors may only use solvents in the extraction process that are food grade or at least 99% pure. and Solvent-based extraction must be “completed in a commercial, professional grade, closed loop system capable of recovering the solvent used for extraction.”

Processed hemp products intended for human or animal consumption must be tested for cannabinoid concentration and profile, residual solvents, microbials, pesticides, and heavy metal concentrations. Testing must be performed by DNR or a testing facility authorized by DNR. Processors must retain records and prepare an annual report on the quantity of industrial hemp processed, identification of lot and batch numbers processed, disposition of all raw and processed industrial hemp, and records of all persons who received all raw or processed industrial hemp.

Retailer registration. A registered retailer may sell processed industrial hemp or industrial hemp products to consumers. In addition, retailers may import, store, and transport processed industrial hemp and industrial hemp products. Retailers must ensure that all products are labeled properly and must display a placard from DNR showing that it is a registered retailer. When applying for registration, a retailer applicant must provide a description of the type of store or operations of the retailer, a location or list of locations where industrial hemp will be offered for retail sale, and a list of products intended for sale. Like processors, retailers must keep records and submit annual reports to DNR.

Hemp Product Endorsement. In addition to registering growers, processors and retailers, DNR is also imposing regulations on all hemp products in Alaska. DNR must endorse “any hemp product processed beyond its raw form” that is intended for human or animal consumption before it is “transported in the state or offered with or without compensation to a consumer.” Retailers and processors can apply for an endorsement on an application provided by DNR.  Endorsement applicants must provide the following:

1. A color copy of the product’s proposed label;
2. A copy of the laboratory test results of each product or batch of product;
3. A copy of the processor’s DNR registration under or a copy of the processor’s registration or license from other states or qualifying entities that have implemented an industrial hemp pilot under the 2014 Farm Bill;
4. A copy of the terpene analysis if required under the proposed rules; and
5. An endorsement fee.

No processed industrial hemp product intended for human or animal consumption may contain more than 50 milligrams of delta-9 THC per individual product. Such products must also include the following items on their label:

1. The product name;
2. A batch and lot number for the product;
3. An expiration date;
4. The total quantity of the product by weight or volume;
5. The serving size or recommended dose;
6. A list of all ingredients;
7. A statement that the product has not been approved by the Food and Drug Administration or the Alaska Department of Environmental Conservation.
8. The industrial hemp pilot program from which the hemp originated;
9. The industrial hemp pilot program that authorized the processing or testing of the industrial hemp in the product; and
10. If the product conducts any delta-9-THC, the statement “warning: contains THC”.

Bottom Line. At this time, it is unclear when the DNR will start issuing registrations or will start endorsing products.

The most striking thing about the new rules is the endorsement and registration required for the sale of hemp products intended for human consumption, which almost certainly includes Hemp-CBD. On June 20, 2019, the DNR updated a “Questions and Answers” page on its website which indicates the scope of this registration:

Q: Are big stores such as GNC, Natural Pantry, all the gas stations going to have to get retail
licenses?
A: Yes. Except for a grower or processor selling raw industrial hemp, all retail sales of hemp and hemp products will require retail registration.

This may preclude the online sale of consumable Hemp-CBD in Alaska as retailer applicants must list the locations where they will sell hemp products and display a placard from DNR in their stores. Online retailers who sell directly to consumers won’t be able to comply with these location-based requirements.

Finally, these rules are focused solely on the 2014 Farm Bill and make no reference to the 2018 Farm Bill. That may need to change as a majority of states are going to be operating under the 2018 Farm Bill next year.

Interested stakeholders should carefully review these rules if they want to make any changes.  DNR will be accepting public comments on the rules until 5:00 PM on Tuesday July 3rd, 2019. Comments can be submitted by email to industrialhemp@alaska.gov or online at  http://notice.alaska.gov/, and using the comment link.

source https://hempgenixs.com/2019/06/23/hemp-cbd-across-state-lines-alaska/

A Quick Guide On How To Buy CBD Online

CBD is one of the biggest natural health breakthroughs of the century, and with its benefits ranging from relief from anxiety and depression to managing chronic pain, epilepsy and even cancer, it’s unsurprising that so many people are interested in purchasing the product for themselves. Read on if you’re keen to buy CBD online, but you’re not sure where to begin. Why buy CBD online? While there’s nothing wrong with nipping to your local health store to purchase CBD, you’re limiting your options by doing so. The online CBD market is so much more diverse and extensive, giving you the opportunity to purchase more specialised and specific products than you will generally find in a store’s limited stocks. You are also guaranteed to get a better deal on your CBD online, as there is more competition between brands, meaning you can pay less for a product that is just as effective. Tips for purchasing CBD online The overwhelming sheer volume of CBD products available online can mean it is tempting to jump right into a CBD purchase immediately, whether because you think you’ve found a good deal from the get-go, or you’re intimidated by all of your options. However, this can often mean you’re not getting the best deal, or the best value for your money. Follow these simple tips below to ensure you find the best CBD product online for your needs: 1. Browse, browse, browse It may be boring, or time-consuming, or even a little confusing, but spending time browsing for your CBD product of choice will give you time to build up knowledge on the general price range of the product, as well as reviews and ratings from previous buyers. To get the most out of your browsing, take a look at multiple retail sites, and save a few of your favourite products, to compare and contrast when you think you’re ready to make a purchase. 2. Read up on reviews Buying a product blindly without reading the reviews beforehand is generally a dangerous idea. Although it is true that people are more likely to leave negative reviews over positive, it’s important to read into why the product is not achieving a four-or-five-star rating. From issues with posting to brand illegitimacy, if there’s something off with a product you’re considering purchasing, you’ll find it in the reviews section. A good range of four-and-five-star reviews, however, suggests that the product you’re looking at is going to be worth its price tag.    3. Visit multiple websites While Amazon is a great choice for CBD beginner buyers, it is also an easy place to be caught out, or even conned. If you’re after a legitimate product, and want to be sure that what you’re purchasing comes from an expert CBD brand like Sensei, you certainly shouldn’t rule out purchasing from independent websites. Just make sure the brand is well-known and generally trusted, and that it’s based in the UK- nobody wants to pay a postage fee that’s almost as much as the product itself. Written by Guest Blogger, Helen Bell

The post A Quick Guide On How To Buy CBD Online appeared first on Sweet Honeybee Health CBD.

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A Quick Guide On How To Buy CBD Online was first posted on June 21, 2019 at 12:32 pm.
©2018 ““. Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at tiffany@sweethoneybeehealth.com

source https://hempgenixs.com/2019/06/23/a-quick-guide-on-how-to-buy-cbd-online/