/Smokeable Hemp Sparks A Firestorm

Smokeable Hemp Sparks A Firestorm

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SMOKABLE HEMP IS SPARKING AN INTENSE DEBATE IN MANY STATES.

Introduction.

When I first heard about people smoking hemp my response was one that I have since learned is fairly typical. I thought, “What’s the point?” My second thought followed close behind: “Smoking hemp is a short-term gimmick.” This was several years ago, when a client was telling me that hemp cigarettes were popular in Switzerland. At the time I could not have anticipated the enormous impact that smokable hemp would soon have on the hemp industry. As it turns out, my initial impressions were not only common but totally misplaced. Today I routinely smoke hemp, as do many of my friends and clients, most of whom shared my initial response to it.

Smokable hemp, which is unqualifiedly lawful under federal law, has emerged as a flashpoint for law enforcement officials and state legislatures in marijuana prohibition states that see it as a gateway to full marijuana legalization, and in some cases, as an evil in and of itself that needs to be eradicated. In this article I will discuss the reasons for smokable hemp’s rapid rise in popularity, why the future of smokable hemp is vital to the hemp industry at large, and the ways in which its legal status is under attack in several states.

Part 1: Why smoke hemp?

The first question I get when discussing smokable hemp with friends and family members is the same one I originally had, “What’s the point?” Since hemp by definition contains no more than 0.3% delta-9 tetrahydrocannabinol (THC), it lacks meaningful quantities of the primary compound that people seek when smoking cannabis. In other words, it does not get you “high”. Why smoke hemp, which does not get you high, when you can smoke marijuana, which does? To most newcomers, smoking hemp seems pointless.

As it turns out, there are a number of reasons why people smoke hemp. Smoking is common to most cultures and across large swathes of history. All sorts of herbs, but mostly tobacco and cannabis, have been smoked in pipes, cigars, cigarettes, pre-rolls, bongs, hookahs, etcetera for centuries. Aside from the medicinal qualities that smoking certain substances can provide, smoking can be a meditation, ritual, habit, social lubricant, and personal “time out” from the hectic pace of modern life. People like to smoke. And, despite marijuana’s overwhelming popularity, a lot of people actually enjoy smoking cannabis and NOT getting high.

The primary reason people like to smoke hemp is to ingest cannabidiol (CBD), by a means that is natural, relaxing, and easy to titrate an appropriate dosage. (“Titration” means continuously measuring and adjusting the balance of a medicinal drug compound.) My hemp dispensary clients all report that a significant portion of their customer bases consists of middle-aged people, predominantly female, who find that smoking hemp is the best delivery mechanism for CBD. They don’t want to get high; however, they do want to relax and monitor their CBD intake in real time. A hemp/CBD tincture simply does not offer that experience.

Additionally, some people smoke hemp because there are options, not present in the marijuana market, for high-quality cannabis containing an array of cannabinoids other than THC. Let me explain. While some marijuana strains offer meaningful quantities of cannabinoids other than THC, most do not. By and large, the typical marijuana consumer uses it to get high, not to ingest CBD, cannabigerol (CBG), and other cannabinoids. For this reason, marijuana is primarily bred to contain high amounts of THC. On the other hand, hemp is bred to produce CBD and other cannabinoids, not THC. When THC is taken out of the equation, there is an incentive to breed cannabis genetics that offer a wide array of other cannabinoids in significant quantities. For example, the rise of “CBG bud” in the hemp market does not have a counterpart in the marijuana industry. In a very real sense high quality hemp flower, particularly of the “craft” variety that is now becoming widely available, is some of the best cannabis on the market. (Note, my regular readers know that I use the term “cannabis” in the general botanical sense to include both federally unlawful marijuana and federally lawful hemp. For more on this linguistic issue, click here.)

Additionally, smokable hemp is a much healthier option for smokers than tobacco. It also appears to be a means to curb addictions to other toxic substances. For instance, as discussed in this Scientific American article and this National Institute of Health paper and this Consumer Reports article, cannabis (including smokable hemp) may play a role in remedying opioid use disorder and helping people wean off of addictive pain killers. Smoking hemp offers all of the ritual, meditation, social, and “time-out” functions of tobacco smoking without the health concerns. In fact, smoking hemp has been shown to help reduce the craving for tobacco cigarettes. You can read more about cannabis, CBD, and tobacco addiction in this engaging article by José Carlos Bouso as published by Fundacion Canna. Importantly, this reduction in cravings appears not to be limited to tobacco and nicotine or opioids. I can speak from experience. Aside from a short stint in college, I’ve never been a tobacco smoker; however, I do enjoy a good glass of beer, wine, or whiskey. I’ve found that smoking hemp immediately curbs my desire to pour another drink. This response to alcohol has been noted in studies and applies to cravings and addictions across the board. Dr. Raphael Mechoulam, the grandfather of cannabinoid medicine, published a paper in 2003 with Linda Parker on the connections between alcohol and our endocannabinoid systems. He states: “Cannabinoids and alcohol activate the same reward pathways, and the cannabinoid CB1 receptor system plays an important role in regulating the positive reinforcing properties of alcohol.

In short, smokable hemp is not a fad. People use it for various reasons, including its health benefits. The fact that you cannot get high from hemp is actually a primary driver of its popularity. It has also emerged as a vitally important product for the hemp industry.

Part 2. Smokable hemp is vital to the hemp industry.

Smokable hemp is a powerful economic tool. Hemp biomass (which is used to produce the oils and cannabinoid isolates used in consumer products) is rapidly becoming a true commodity, and the “race to the bottom” in terms of pricing is already in effect. American farmers of hemp biomass are starting to compete with producers in Colombia, China, eastern Europe, and other places where hemp can be grown cheaply. US farmers of hemp biomass will struggle to compete in this global market.

On the other hand, while CBD concentration is important, smokable hemp is sold primarily based on the quality of its presentation, including its appearance, how well it is trimmed, its aroma, and even the cache of its strain and/or grower. It is difficult to mass produce quality smokable hemp. For this reason, it can be sold for higher margins than biomass and small-scale cultivators of “craft cannabis” in the form of smokable hemp bud will always have some insulation against the global commodity pricing of hemp biomass. For many of the same reasons that your local brewery can be profitable despite the existence of multinational beer conglomerates filling grocery stores with cheap lagers, the cultivators and sellers of smokable hemp can be profitable despite the existence of thousand-acre hemp farms across the globe that produce biomass for CBD extraction.

The tendency for smokable “craft” hemp to benefit small businesses, including farmers, brokers, and retailers, over corporate conglomerates is an important reason to protect it. The hemp industry is growing up and a certain amount of “corporatization” of it is both inevitable and necessary. However, the current CBD-driven hemp industry emerged and took root in a mostly grey and evolving regulatory structure. In this environment small, nimble, risk tolerant entrepreneurs have enjoyed an incubation period in which they have been able to grow their businesses without having to compete with multinational corporations. However, as the “grey” legal structure evolves to a “black and white” one, big-pharma, big-ag, and big-retail will compete with current hemp farmers and hemp businesses. We are already seeing rapid consolidation in the hemp industry and can expect to see much more. For the reasons discussed above, the craft smokable hemp market, which is more insulated from this asymmetric competition, will allow the hemp industry to maintain and nurture a certain segment of small, motivated entrepreneurs. In other words, smokable hemp has the potential save the hemp industry from being completely consumed by Wall Street, and allow it also to flourish on Main Street.

Part 3. Smokable hemp is under attack.

Despite smokable hemp’s economic potential, public health benefits, and popularity, its legal status is under attack. This is driven primarily by law enforcement and based on the contention that lawful smokable hemp amounts to de-facto marijuana legalization and the loss of probable cause. It also appears to be based on old school “reefer madness” against anything cannabis-related. The primary focus is in three states: Indiana, North Carolina, and South Carolina.

Case Study #1- Indiana

The smokable hemp fight is has progressed the farthest in Indiana (IN), where a lawsuit about it was filed in the US District Court for the Southern District of IN, Indianapolis Division, on June 28, 2019. The lawsuit challenges “the constitutionality of a recent state statute that conflicts with federal law by impermissibly narrowing the federal definition of hemp and criminalizing the manufacture, financing, delivery, or possession of smokable hemp despite federal laws declaring all hemp derivatives to be legal.

The “recent state statute” referred to in the lawsuit is the Senate-Enrolled Act 516 (SEA 516), which was enacted on May 2, 2019 and became effective on July 1, 2019. The lawsuit, filed by several IN hemp producers against Governor Eric Holcomb in his capacity as the chief law enforcement agent in the state seeks an injunction prohibiting the enforcement of SEA 516 and a court ruling declaring it to be unconstitutional.

The lawsuit alleges two primary defects in SEA 516: (1) that it impermissibly redefines “hemp” in contravention to federal law, and (2) that illegally interferes with interstate transport of hemp.

With respect to the redefining claim, SEA 516 defines “smokable hemp” as “a product containing not more than three-tenths percent (0.3%) delta-9-tehtrahydrocannabinol (THC), including precursors and derivatives of THC, in a form that allows THC to be introduced into the human body by inhalation of smoke” and includes ‘hemp bud’ and ‘hemp flower.’” (Ind. Code § 35-48-1-26.6)

Additionally, SEA 516 criminalizes the manufacture or possession of smokable hemp:

“(a) A person who: (1) knowingly or intentionally: (A) manufactures; (B) finances the manufacture of; (C) delivers; (D) finances the delivery of; or (E) possesses; smokable hemp; or (2) possesses smokable hemp with intent to: (A) manufacture; (B) finance the manufacture of; (C) deliver; or (D) finance the delivery of; smokable hemp; commits dealing in smokable hemp, a Class A misdemeanor.” (Ind. Code § 35–48–4–10.1)

The Plaintiffs contend that these provisions impermissibly redefine hemp in a way that Congress specifically prohibited. The Congressional Conference Report for Agricultural Improvement Act of 2018 (2018 Farm Bill) states on page 737: “[S]tates and tribal governments are authorized to put more restrictive parameters on the production of hemp, but are not authorized to alter the definition of hemp or put in place policies that are less restrictive than this title.” The IN Plaintiffs assert that by carving out an exception for “smokable hemp” from the general definition of “hemp” under the 2018 Farm Bill, Indiana has violated the statute and the intent of Congress.

Additionally, the Plaintiffs contend that SEA 516 is preempted by the 2018 Farm Bill’s prohibition on state interference with interstate transport of hemp. In other words, by prohibiting and criminalizing a form of federally lawful hemp, Indiana has overstepped its authority and violated federal law. Section 10114(b) of the 2018 Farm Bill states:

No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.

At a minimum, this provision establishes that a state cannot prohibit nor criminalize a form of hemp that is expressly lawful under federal law from being transported through its borders.

A hearing on the request for a preliminary injunction has been scheduled for August 28, 2019.

Case Study #2- North Carolina

Although the smokable hemp battle is farthest along in IN, it has been most contentious in my home state of North Carolina (NC), where two pending bills threaten to prohibit and criminalize it. There is a huge market for smokable hemp in NC, and it can be purchased in most any city and town in the state. There are several shops selling smokable hemp within a few blocks of my office in downtown Asheville, and at least one broker client of mine maintains a warehouse a short walk from my office with thousands of pounds of smokable hemp that is shipped throughout the country.

The two pending bills addressing smokable hemp are Senate Bill 315 (SB 315) and SB 352. The first (SB 315) is the NC Farm Bill, which includes a hemp provision. Currently, it contains a provision prohibiting smokable hemp after December 2019. The most recent bill summary of the proposed committee substitute (PCS) (a PCS amounts to a committee’s amendment to a bill), released on July 11, 2019, states:

Smokable hemp would be defined as ‘A material, compound, mixture, or preparation that allows THC to be introduced into the human body by inhalation of smoke’ and would include whole or ground raw hemp plant material, including hemp buds and hemp flowers; hemp cigars; and hemp cigarettes. Smokable hemp would be excluded from the definition of a hemp product.”

It goes on to state:

Smokable hemp would be included in the definition of “marijuana,” except that a licensed cultivator or licensed handler may possess raw hemp plant material for the purpose of (i) selling the raw hemp plant material to a licensed handler or a person who may legally receive the raw hemp plant material in that person’s jurisdiction, or (ii) processing the raw hemp plant material into a hemp product or hemp extract.”

The second bill (SB 352), which includes various amendments to the NC Controlled Substances Act, criminalizes smokable hemp. Section 90-87(16) of the current PCS states:

The term “marijuana” also includes smokable hemp. The term does not include hemp, when in the possession, custody, or control of a person who holds a license permitting that person to cultivate or handle hemp; hemp products; or hemp extracts. A licensed cultivator or licensed handler may possess raw hemp plant material for the purpose of (i) selling the raw hemp plant material to a licensed handler or a person who may legally receive the raw hemp plant material in that person’s jurisdiction or (ii) processing the raw hemp plant material into a hemp product or hemp extract.”

 The NC smokable hemp battle was initiated by a memo issued by the NC State Bureau of Investigation (SBI), released while SB 315 was being considered by the Senate Agriculture Committee. A copy of the SBI memo, and my response to it, can be read by clicking here.

The same issues that are addressed in the Indiana lawsuit are implicated in NC, namely, redefining the definition of hemp and violating federal law regarding hemp transportation. I addressed these issues in a recent email to the NC House Finance Committee during its review of SB 315:

 

Moreover, as I discuss in the above email, the 2018 Farm Bill requires a state to submit a plan that is approved by the Commissioner of the US Department of Agriculture (USDA) in order to regulate hemp within its borders. Absent an approved state plan a state may not regulate hemp. As of this writing no state plans have been approved by the USDA and NC has not even submitted one.

The NC legislature is approaching the end of its term. There is wide speculation about whether the legislature will enact both, either, or neither of the bills before the session ends. I receive calls from concerned NC clients every day and am already working with colleagues to file a lawsuit similar to the one in IN if one or both of these bills pass. For more reading on the NC struggle with smokable hemp, click here.

Case Study #3- South Carolina

Associate attorney Philip Snow is working on a post about the South Carolina (SC) smokable hemp ban, which differs in several ways from the approaches taken in IN and NC. Stay tuned for Philip’s article.

https://cannabusiness.law/smokable-hemp-sparks-a-firestorm/

July 22, 2019

Rod Kight is an attorney who represents hemp farmers and hemp businesses. He speaks at cannabis conferences across the country, drafts and presents cannabis legislation to foreign governments, is regularly quoted on cannabis matters in the media, and maintains the Kight on Cannabis legal blog, where he discusses legal issues affecting the cannabis industry. You can contact him here.

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