The nationwide hemp rules are taking effect March 22 as planned, with no additional delay or review because of the changed administration at the U.S. Department of Agriculture.

The USDA gave notice Monday that the rules have been reviewed and are cleared to take effect as planned. The USDA was giving the hemp plan a second look because it was published less than 24 hours before former President Donald Trump left office in January.

Among other changes, the final hemp rules:

• Allow hemp farmers to use common disposal methods to destroy hemp crops with more than 0.3% THC.
• Give hemp producers 30 days before harvest to get their plants tested for THC, up from 15 days. 
• Give farmers more breathing room before being considered “negligent” for producing hot hemp. The new negligence standard is 1% THC, up from 0.5% THC. 

Not all the final rules have been embraced by the industry, though. The final rules retain a requirement that hot hemp flowers be destroyed and that testing labs be certified by the U.S. Drug Enforcement Administration.

The rules also require hemp to tested for total THC content, not just delta-9 THC.

Learn more about the final hemp rules in this free downloadable reference guide, “USDA Final Hemp Rule: A Handbook for Hemp & CBD Businesses.”

Crediting the CBD company’s forthrightness, a federal judge in New York federal judge has dismissed a lawsuit against Massachusetts-based Curaleaf from investors who argued the company misled them about legality of its CBD products.

The investors sued when Curaleaf’s share price fell in 2019 after the U.S. Food and Drug Administration sent the company a warning letter for claiming its CBD products could treat a variety of diseases.

The suit was among a raft of class-action lawsuits in the past three years challenging CBD makers for allegedly misleading investors and making unfounded medical claims. The Curaleaf case was filed shortly after the FDA sent Curaleaf a warning letter.

Judge Brian M. Cogan said in his ruling Tuesday that Curaleaf “publicly and repeatedly acknowledged” in its stock listing statement that the FDA had not yet approved its CBD products for any medical purpose. Cogan said the company also noted it could be subject to enforcement action for “promotion of an unapproved drug.”

“The company clearly disclosed the risk that the FDA could act against it and that the FDA had done so to other companies selling similar products,” Cogan said.

“Describing this risk in terms of potentiality rather than certainty – when certainty of enforcement could not be known anyway – does not violate securities law.”

Law360 first reported on the decision.

After the FDA’s letter to Curaleaf on July 22, 2019, the company discontinued many of the products regulators cited, and removed some of the claims it made about its products.

Investors contended that the company did not explicitly say its products were illegal, but the judge rebuffed their argument.

“There is no requirement that a company disclose its risk in any magic words preferred by plaintiffs,” the judge said in the ruling.

An attorney for the investors told Law360 they were evaluating their next steps.

The case was filed in U.S. District Court for the Eastern District of New York.

“We look forward to focusing on the company’s growth and continuing to serve our customers and patients nationwide,” Curaleaf said in a statement after Cogan’s ruling.

Curaleaf also sells high-THC marijuana products in states where they are legal. Cogan also noted Curaleaf’s forthrightness on its THC business activities.

Caraleaf told investors in a 2018 Canadian filing that it “will derive a substantial portion of its revenues from the cannabis industry in certain states of the United States, which industry is illegal under United States federal law.”

A coastal Texas smoke-shop owner facing criminal marijuana charges after a police raid Tuesday says the cannabis flower, vapes, gummies and other products taken were legal hemp, not illegal marijuana.

Faded Smoke Shop owner Alexandra Degollado faces charges of manufacture or delivery of a controlled substance, the Victoria Advocate reported.

One of her store employees was also charged during the Tuesday raid in Port Lavaca, a town of about 12,000 on the Texas coast southwest of Houston.

Degollado’s attorney, Lisa Pittman, told newspaper that the store owner relied on legal certificates of analysis that showed the products were made legally.

Texas allows the production and sale of hemp, but not high-THC cannabis. The shop had a current license to sell edible CBD products, a requirement under Texas law, the newspaper reported.

Local police have said the seized products contained elevated THC levels.

“People have to understand that, right now, (marijuana) is still illegal. I realize it might be legalized in a few years, but it is still illegal here,” Port Lavaca Police Chief Colin Rangnow told the paper.

Researchers at the U.S. Department of Agriculture say they’re studying ways to boost hemp production and profitability for growers, and are collecting the first national statistics on domestic hemp production to be ready by next year.

But Dionne Toombs, director for USDA’s Office of the Chief Scientist, gave no indication this week at the National Hemp Symposium by Oregon State University that nationwide hemp rules taking effect next month might be delayed or again reviewed, as some hemp operators are hoping.

Toombs said that USDA hemp research includes working on standardizing THC and CBD testing and establishing a new collection of hemp germplasm with Cornell University.

She said USDA scientists “have a proven track record of revolutionizing American agriculture and pioneering technology advancements to bring new commodity innovations to consumers.”

“We have challenged ourselves to discover the next bold move in agriculture, and industrial hemp is positioned to achieve that same success,” she said.

Toombs only briefly touched on the final rules for hemp production that the USDA released just hours before President Donald Trump left office. She said the regulations become effective March 22.

President Joe Biden’s office immediately ordered a review of new rules from federal agencies. But there has been no indication that the latest word on hemp production is changing before the 2021 growing season.

Toombs said little about the policy, instead talking up other research projects the USDA is working on, including:

• A new $66 million Agricultural Research Service lab where scientists will study hemp farming, fiber, and plant breeding.
• Developing software with Oregon State University to assist farmers in incorporating hemp into their crop rotation.
• Assisting plant breeders in enhancing fiber quality.

Toombs said USDA scientists are also researching the genetic diversity of hemp and finding hemp post-production opportunities for new applications.

“These are a few examples of how USDA science agencies are working together to propel industrial hemp production in the next era of American agriculture,” she said.

Hemp is also getting a statistical boost.

The crop will be included in the 2022 U.S. Census of Agriculture, the premier data source on agriculture production and indicators for economic and environmental welfare. The ag census is compiled by USDA’s National Agriculture Statistics Service but does not yet include hemp production itemization for producers.

Ivan Moreno can be reached at [email protected]

A Michigan company making broad-spectrum hemp teas is battling claims that its products falsely promised 0.0% THC content.

Total Life Changes LLC of Fair Haven, Michigan, has been sued by a New Jersey man who says the company’s instant Iaso Tea is “intentionally misleading the general public” by carrying a label that says it “contains 0.0% total THC as evidenced through independent laboratory tests.”

The New Jersey plaintiff who bought the tea says he is on parole and failed a drug test after drinking the tea. He called the test results “extremely shocking” and sent the tea for a lab test that showed it contained trace amounts of THC. He is seeking class-action status for the claim he filed in December.

The teamaker has asked a federal judge in New Jersey to dismiss the case because the plaintiff did not lose his parole status over the test and “suffered no injury as a result of an incorrect report of a failed drug test.”

A company website checked Monday by Hemp Industry Daily says in its tea description, “We do not recommend use if you are subject to drug testing.”

Law 360 first reported on the tea claim and the company’s reply.

North Carolina CBD maker cbdMD has hired Sibyl Swift, a former U.S. Food and Drug Administration official as a consultant to lead the company’s regulatory efforts and prepare products for certifications.

Swift served in various roles at the FDA from 2014 to 2020, most notably as the associate director for research and strategy in the agency’s Office of Dietary Supplement Programs, where she worked on science, research, compliance, enforcement and policy initiatives.

In 2020, Swift served as the senior vice president for scientific and regulatory affairs for the Natural Products Association, where she addressed regulatory policies related to new drug investigation (NDI) notifications, FDA guidance and claims substantiation.

cbdMD chairman and co-CEO Marty Sumichrast said Swift’s experience and new role demonstrates the company’s commitment to meeting “the highest regulatory standards for quality and safety.”

cbdMD Inc. trades on the NYSE as CBDMD.

A bipartisan bill that was introduced in the U.S. House of Representatives Thursday could push legal CBD through Congress, providing consumer access and protection while clearing the supply chain bottleneck.

The Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021 is sponsored by Representatives Kurt Schrader, a Democrat from Oregon, and Morgan Griffith, a Republican from Virginia and has 18 more co-sponsors from both major parties. An earlier version of the legislation, introduced in 2020, had 30 bipartisan co-sponsors.

The bill has broad support from a coalition of 18 hemp industry and dietary supplement industry organizations.

If passed, the legislation would ensure a clear legal pathway to market for hemp-derived CBD and other ingredients derived from hemp, according to a joint statement from the industry coalition.

It would also direct the U.S. Food and Drug Administration to use its authority and resources to set a clear regulatory framework for hemp-derived products and promote consumer safety while giving an economic boost to farmers who have struggled to sell their hemp crops.

Further, the legislation would allow hemp-derived CBD to be lawfully marketed in dietary supplements, requiring product manufacturers to comply with the Dietary Supplement Health and Education Act of 1994, more commonly known as DSHEA. This would ensure that products are safe, properly labeled and manufactured in compliance with the same good manufacturing practices (GMPs) required for dietary supplements.

The FDA is “notoriously slow” and stalling on CBD for more than two years but the agency has also been dealing with COVID-19 for the past year, said attorney Jonathan Miller, who leads the U.S. Hemp Roundtable, an industry advocacy group.

“But other countries – Great Britain, Australia – they’ve figured out a way to regulate CBD and there should be no problem with the U.S. doing as well,” Miller told Hemp Industry Daily.

“We’ve got this whole regulatory framework already outlined for dietary supplements. We just want those same standards to be applied to CBD.”

Mexico is moving ahead on medical marijuana regulation — and all hemp and marijuana companies that envision doing business there in the future should start preparing now, lawyers say.

The Mexican government has begun setting a regulatory structure for medical cannabis in the country, making it possible for companies to start applying for research licenses to bring products to market. The move comes as the country is still working on approving hemp and adult-use marijuana.

Attorneys who have been following developments in the country say entering the medical market now will be positioned to quickly launch in the recreational market when it becomes a reality, noting that was the case in the U.S. and Canada.

“Any person or corporation that wants to get into the cannabis industry in Mexico, that’s the starting point,” said Roberto Ibarra Lopez, an attorney with Lawgic in Guadalajara, Mexico.

Mexico’s congress is under an April 30 deadline to legalize cannabis for all uses – a directive from the country’s supreme court, which concluded the plant’s prohibition was unconstitutional.

That legalization effort has already been delayed several times, but a path for doing business on the medical side started opening Jan. 12, when federal regulators published regulations for implementing the law.

It’s been legal to apply for cultivation licenses for medical cannabis for some time, but it’s been impossible to do anything.

That’s because although Mexico legalized cannabis for medicinal use in 2017, it took the federal government three years to publish its regulations. Those are still being tweaked, but attorneys expect the federal government to start issuing licenses by June.

Not overnight

It will take time to see products on the market, however.

Cannabis products, including hemp with up to 1% THC, have to go through clinical trials before they’re sold and growing and harvesting on an industrial scale to supply the medical market.

Imports are limited to finished goods and only pharmaceutical companies can do it. Cultivation licenses can be obtained anywhere in Mexico but must be used in the state listed on an application, which requires proof of ownership of the land where cannabis will grown.

“The universe of activities is open,” Lopez said.

Although the congressional measure contains limits on foreign investment, the medical regulations don’t.

The department of agriculture will oversee cultivation and tracing requirements with a couple of other agencies, as well registering and importing seeds.

Mexico’s equivalent of the Food & Drug Administration is in charge of labeling and prescriptions, and will have oversight of doctors and clinical research. The only advertising allowed is between pharmaceutical companies and the doctors who prescribe cannabis.

The regulations don’t include a lot of detail on processors or manufacturers and hemp is an afterthought without rules governing its production, although it’s allowed.

“You have the right. The problem is you are unable exercise that right because it’s not regulated,” said Adrian Cisneros Aguilar, the lead cannabis attorney in Mexico with Harris Bricken.

Supporters of industrial hemp hope to have standalone regulations for the plant in the coming months, rather than having it be included in the cannabis legalization bill lawmakers are considering. Congress returned to work on that proposal this week.

Despite the perpetual delays, attorneys are optimistic lawmakers will eventually legalize all uses of cannabis this year.

“You’re not going to apply for everything at once, but by 2023 everything is going to be open. The market is going to be fully legal,” Aguilar said.

Ivan Moreno can be reached at [email protected]

A New Mexico district court has invalidated the state’s hemp production rules that allowed regulators to revoke or suspend licenses without notice and imposed strict testing requirements.

Santa Fe District Court Judge Bryan Biedscheid said the New Mexico Department of Health’s rules were invalid because the agency failed to consult with the Medical Cannabis Advisory Board as required by state law.

The ruling came in response legal action from New Mexico cannabis company Ultra Health, cannabis news site The Candid Chronicle first reported.

Duke Rodriguez, the company’s president, said the judge’s ruling shows “the department may not attempt to promulgate any rules it wishes without fully consulting stakeholders and providing substantial evidence for such changes.”

He said the state must issue rules that keeps prices low for medical cannabis patients.