Hemp Industry in Minnesota Faces Uphill Battle

Hemp Plant

It’s safe to say that the hemp industry in Minnesota is on shaky ground for the time being. The CBD industry in the state is close to panic mode. Last year a state appeals court ruling really hurt the industry.

That ruling cast doubt on whether it is legal to sell or possess almost all types of CBD products. Recently retailers and producers have been faced with more cease and desist letters when it comes to Minnesota-made CBD products. On the other hand, large national retail brands seem to be flourishing.

Angela Dawson is the president of 40 Acre Cooperative which is a hemp farming collective found in Pine County, MN. She said “We’re in tough shape right now because of all of this. Everyone is holding off on getting their hemp licenses for next year because we don’t know what the future holds.”

Steven Brown is the chief executive of the retail chain Nothing But Hemp and founder of the Minnesota Cannabis Association. He said if the Legislature doesn’t act, all but one of his six stores in Minnesota would need to close.

“It comes down to educating the consumers and providing the good regulations that will protect consumers and children,” he said. “I’m nervous nothing will get done this session, and I’m hoping we can at least put some safety regulations in place.”

Loveless vs State of Minnesota

The so-called ‘Loveless’ decision is the one that threw the Minnesota hemp industry for a loop. The appeals court ruled that state laws that separated marijuana from hemp only applied to the actual plant. They ruled the laws do not apply to the extracts. Basically overnight it turned products like CBD, which were thought to be legal in the state, into illegal controlled substances.

The appeals court made this decision in September of 2021.  The ruling has been appealed to the Minnesota Supreme Court but there is no timetable on when a ruling could come. There is also no guarantee that it would go in favor of the hemp business.

There have also been bills introduced at the State Legislature to give more clarity and definition between industrial hemp and marijuana. This would certainly help the hemp and CBD industries but nothing has yet been passed. 

How About Delta-8 THC

Delta-8 THC is really in a gray area. Delta-9 THC is defined by law as the psychoactive component of marijuana. Recently processors have started to extract Delta-8 THC. Since delta-8 isn’t specifically called out by law there are questions as to its legality. 

CBD provides health benefits without a user experiencing any type of high like they would with marijuana. The same can’t be said about delta-8 THC products. They can also produce a high similar to marijuana, although usually milder.

Not everyone has the same feelings about CBD and delta-8. Banning delta-8 in Minnesota would definitely hurt dozens of businesses. However, delta-8 is definitely more controversial than CBD due to the potential to get the user high, similar to marijuana.

The Minnesota Board of Pharmacy is actually in favor of banning delta-8, but not CBD. They are supporting a bill that would ban delta-8 but would increase testing and labeling requirements for CBD. It would also raise the minimum age to purchase CBD to 21.

Final Thoughts

There is a lot going on in Minnesota having to do with the hemp industry. Unfortunately, there are not a lot of clear answers just yet. The major stakeholders in the hemp market are holding their collective breaths to see how this all plays out.

Without a reversal from the Supreme Court of the Loveless decision or a change in current laws, the industry is in trouble. Both retailers and consumers could be putting themselves at legal risk by selling and buying even CBD products, let alone delta-8.

Ideally, the hemp and CBD industry can ride out this period of uncertainty until they can get it sorted. In the end, there does need to be more accountability and more oversight in the industry. Not only does it level the playing field but it also provides more stability, oversight, and guidance to an industry that desperately needs it.

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