Due to legal and regulatory changes in the industry, including the 2018 Farm Bill and recent changes in the implementation of Michigan’s 2014 Industrial Hemp Research Act, the information contained in this Article may no longer be accurate. Please contact an attorney before relying on any information contained in this Article. For more information on cultivating hemp, or the Hemp Pilot Program in Michigan, check out our recent article.
As we discussed in our last article, CBD: One Step Forward, Two Steps Back, LARA, the state’s licensing agency, has announced that it considers CBD to be subject to the same regulations as other Marijuana derived products. During a recent LARA Live webcast featuring Andrew Brisbo, the LARA Director of Bureau of Medical Marijuana Regulation, Mr. Brisbo danced around the questions of whether all CBD products are now regulated the same as other marijuana derivatives, like distillate.
The first question asked to Mr. Brisbo was essentially “what gives you the right to do this without any legislation?” His response was that CBD is a derivative of the cannabis sativa plant, and that CBD would now be included in this definition, even if produced from a hemp plant with little to no THC. He said that the federal definition of Marijuana, which finds that cannabis sativa with less than 0.3% THC is not considered regulated Marijuana, is only incorporated into the Michigan’s hemp laws but not its marijuana laws. For its marijuana laws, there is no “THC qualifier”, so in Michigan, any derivative of the cannabis sativa plant other than from sterilized seeds, oil from seeds, and mature stalks is considered a controlled substance.
Confused yet? Here is what he was really saying: CBD derived from cannabis sativa is regulated the same as Marijuana. What he didn’t mention, and what you needed to read between the lines to catch, is that under this definition, CBD derived from the mature stalks or sterilized seeds is legal in Michigan and not subject to the state’s Marijuana laws. This position is in line with the DEA’s position on CBD extracts.
That begs the question—how is LARA going to enforce its interpretation of the state’s Medical Marijuana laws, especially when some CBD products are legal and other almost identical products are not?
Unlike certain other departments, such as the Department of Natural Resources’ Conservation Officers, there is no “LARA police” to enforce the CBD ban. While LARA does have inspectors and examiners, as well as an enforcement division, this division is focused on investigating complaints on licensees and licensed establishments. LARA’s power in this way is limited. Similar to the Bureau of Medical Marijuana Regulation, there is a Liquor Control Commission within LARA that regulates the sale of alcohol. One of LARA’s primary enforcement tool for enforcing liquor laws is the revocation, suspension or of that person’s liquor license. However, the Liquor Control Commission relies on other law enforcement activities to prevent or control the sale of alcohol by unlicensed individuals. In other words, for activities that fall outside this focus, LARA requires the help and assistance of state or local law enforcement.
The bottom line is that if you are a medical marijuana business licensee under LARA, LARA could use its power over licenses and licensees to enforce its CBD ban against you or your company. But this also means that if you do not hold any licenses regulated by LARA, there is currently not much LARA can do at this point.
In his LARA live interview, Mr. Brisbo even said that “when it comes to enforcement of unlicensed activity, that’s really a law enforcement function.” Given that state and local police have yet to show any interest in going after CBD sellers or buyers, that CBD is by all accounts a very popular medicine and treatment, and that prosecutors would need to prove that the CBD was illegally derived in each case, a statewide crackdown is unlikely anytime soon. And a crackdown right before an important and contentious state election in 2018, at least on the state level, seems virtually impossible.
So if this ban has little to no teeth, why did Mr. Brisbo even bother with it? I can see three reasons. First, a recent case governing the federal interpretation of the Controlled Substances Act found that CBD was covered by the Act. Mr. Brisbo is announcing to the public that he reads Michigan’s laws restricting Marijuana, as well as the state’s legal definition of marihuana in the Public Health Code, as including CBD. While he lacks the power and political will to enforce this position at the moment—or as his interviewer stated in LARA Live—“this isn’t the law enforcement ‘time’”—that will likely change unless action is taken to change Michigan’s current marijuana laws.
Second, he is concerned with the unregulated nature of the CBD market and thinks state government should have the power to step in to protect consumers. He mentioned these concerns recently at the Cannacon conference in Detroit, and he may have a point.
The final reason? To help MMFLA licensees! While the reaction from the Michigan Cannabis industry to the CBD ban was visceral, I actually see it at as Mr. Brisbo throwing Michigan MMJ companies a bone. Essentially, the ultimate effect of the ban will be to prevent stores and individuals not licensed under the MMFLA or MMMA from selling CBD. This means that, absent caregivers, dispensaries would be the only place to buy legal weed AND legal CBD. With the market for CBD growing in popularity seemingly by the month, this guidance could have a big effect on licensees down the road—for better or for worse.
If you currently sell CBD products or are interested in selling CBD products, call the CBD and MMJ Attorneys at Scott F. Roberts Law today for a free business consultation.
Mr. Roberts is the founder and managing member of Scott Roberts Law, a Detroit-based Cannabis Business Law Firm founded in 2014. Scott has spent his entire career representing businesses and helping them comply with municipal, state and local regulations, as well as assisting on transactional corporate and real estate matters. Scott is an accomplished attorney, author and public speaker, having spoke at CannaCon, Cannabis Industrial Marketplace, CannabisAid, and 420 Canna Expo, to name a few. He has also taught Continuing Legal Education on Marijuana business matters, meaning other attorneys see him speak to learn about the nuances of cannabis business law.