Lawmakers Stifled Virginia’s Burgeoning Cannabis Industry, Advocates Say | Securities

RICHMOND – Jacob Williamson grows, manufactures and sells hemp-based CBD products through his family’s Hens and Hemp farm. He went through the licensing process to be a hemp farmer when it became legal in 2019, but now he’s quitting the industry.

“We can’t keep up with the multi-million dollar cannabis industry coming to the state,” Williamson said. “So we’re just going to stop because it’s too much.”

Williamson represents a group of entrepreneurs concerned about the future of the commercial hemp industry in Virginia, due to what they say is the risk and increased regulation of the sale of these products.

Changes to the definition of industrial hemp

Sen. Emmett Hanger, R-Augusta, introduced Senate Bill 591 which originally focused on banning cannabis products that can be easily mistaken for everyday treats and have the shape of a “human, animal, vehicle or fruit”.

“It would restrict the use of products that are appealing to children through gummies,” Hanger told the committee.

The Virginia General Assembly has authorized farmers to grow industrial hemp starting in 2019.

Lawmakers passed an amended version of Hanger’s bill, which redefines marijuana as any cannabis product containing more than 0.3% THC or 0.25 milligrams of THC per serving. This includes some non-intoxicating CBD products. The bill, however, excludes industrial hemp that is owned by a person or company that holds a hemp grower’s license from the United States Department of Agriculture, as long as the THC level remains below 0.3%.

It is currently legal to possess, but not sell, marijuana in the state of Virginia.

The 0.3% THC threshold comes from the 2018 Federal Farm Bill. Anything above 0.3% THC is still federally defined as marijuana. In 2018, most marijuana used recreationally contained more than 15% THC, according to the National Institute for Drug Abuse.

Hemp advocates are upset because they say the bill will limit sales of products ranging from edibles to salves.

Barbara Biddle, owner of District Hemp Botanicals, which has offices in Leesburg, Manassas and Washington, D.C., said SB 591 “will introduce the toughest mandates on hemp-derived products of any state in the country, completely reverting on the major strides the state has made toward destigmatizing cannabis.

Biddle says the measure will effectively change the definition of “marijuana” and reduce its inventory from over 650 products to just 100, limiting customers’ ability to access hemp products by up to 85%.

“I wholeheartedly agree with the intent to keep potentially intoxicating products out of the reach of children,” Biddle said. “But this bill goes much further and prohibits non-intoxicating products. Simple age restrictions and licensing requirements, like what is being proposed in Tennessee, can accomplish the same goal without limiting consumer access to non-intoxicating hemp products.

Hanger recently told a Roanoke Times reporter that lawmakers “kinda stirred up a hornet’s nest,” but there’s still time to work on the bill before the legislature resumes in late April.

“Delta-8” legal loophole

Lawmakers want to crack down on the sale of Delta-8-THC, which has a similar chemical structure to the main psychoactive compound, or Delta-9, found in marijuana that gets users high. Delta-8 typically comes from hemp-derived CBD, according to the Food and Drug Administration.

Many low-THC Delta-8 products are made in a lab because additional chemicals are needed to increase the amount of THC, according to the industry website Cannabis Tech.

The products thrill people, but still fall into a legal vacuum. And a few adverse reactions to Delta-8 products have been reported to the FDA.

“I recognize that there are plenty of legitimate companies with legitimate products that shouldn’t be driven out of the market,” Hanger said. “But I think the larger issue right now is public safety.”

The American Hemp Roundtable, a national hemp grower advocacy group, said in a press release that it supports the regulations for public safety, but the new regulations are too broad.

“SB591 advocates have provided no scientific basis or public safety rationale for these arbitrary restrictions,” the group said.

The Virginia Hemp Coalition is an industrial hemp advocacy and education group whose goal is to create new agricultural and manufacturing opportunities for hemp growers. The group has been involved in campaigns to change SB 591 and shared a petition that garnered nearly 4,000 signatures. The group also wants Congress to expand the THC threshold to 1% in the next Farm Bill.

The Virginia Department of Agriculture and Consumer Services issues hemp licenses and tests hemp plants for THC levels. THC levels increase as CBD levels increase in the cannabis plant. Growers run the risk of getting higher THC levels in their cannabis plants in order to get more CBD.

Henry Watkins, chief of staff to Sen. Adam Ebbins, D-Alexandria, said hemp growers could see a bit more regulatory oversight, more testing and enforcement.

“I think people who say it wasn’t applied before are actually saying ‘no one applied it to me before,'” Watkins said.

Crush the nascent market

Since 2019, many stores across Virginia have started selling a variety of CBD and low-THC products for various reasons and ailments.

People who want to buy THC marijuana in large quantities can easily find it, despite the risk of lawsuits. Some sellers offer delivery options and showcase product menus on social media. Many people began operating in these spaces when possession of marijuana was decriminalized and in anticipation of the legal recreational market that many thought would be lit for 2024.

Both sides generally agreed that a legal recreational marijuana market would generate substantial tax revenue for Virginians, but the session ended without lawmakers adopting a framework for sales.

The bill passed in 2021 was due to be re-enacted in the 2022 session, but a House committee pursued the bill through the next session next year, removing the reenactment clause and likely the January 2024 start date for recreational sales. The only way to obtain marijuana legally is if it is grown or gifted, or if a person has a state-issued medical marijuana card.

David Treccariche sells lab-tested CBD products at his boutique Skooma dispensary in Charlottesville. Hanger’s bill was an “absolute death nail in the coffin” for the industry, he said.

Treccariche said he expects small business owners to be more involved in shaping cannabis policy.

“They are [Republicans] theoretically small business friendly, limited government, limited oversight, limited regulation,” Treccariche said. “He’s a Republican, he should make small business better. Why would he shut me down?

Treccariche’s products have QR codes for consumer protection, with nutritional information and THC concentrations for its products.

Senate Pro Tempore Speaker Louise Lucas, D-Portsmouth, co-owns a store in Norfolk that sells legal CBD products. Some products sold at the store exceeded the allowable THC threshold, according to a report by Virginia Mercury. The dispensary could be affected by Hanger’s legislation.

Lucas, who co-sponsored 2021 legislation that decriminalizes simple possession of marijuana, voted for Hanger’s original bill but not the final amendment. She did not respond to repeated phone and email requests for comment on the bill.

Michael J. Massie, attorney and board member of the Virginia Cannabis Control Authority, said there is no gray area for the sale of marijuana products.

“There is no provision that allows the legal sale of marijuana at this point,” he said. “You kind of put yourself in a very precarious position where you could be sued.”

Marijuana lawyer Dylan Bishop, lobbyist for the Cannabis Business Association of Virginia, argued during a committee hearing that having a legal market allows consumers to verify the authenticity of a product.

The association does not believe that limiting the definition of hemp or cracking down on low levels of THC in CBD products is the best solution. Instead, they suggested strict testing and labeling requirements that inform the consumer of any potential psychoactive effects.

The General Assembly will hold its resumed session on April 27. Hanger said he is open to suggestions for changes to his bill.

“Let’s regulate some things for safety,” Williamson said. “I can see that. However, they probably didn’t realize how much a small law could change for a bunch of farms.

Editor’s Note: This story has been updated and corrected from its original version.

Capital News Service is a program of the Robertson School of Media and Culture at Virginia Commonwealth University. Students in the program provide state government coverage for a variety of media outlets in Virginia.

About Charles D. Goolsby

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