State regulators weigh how to expand hemp sales

Edibles, smokable flower likely to still be banned

WHEN THE STATE budget passed in December, lawmakers tucked into it a provision meant to be a lifeline for struggling hemp farmers in Massachusetts, allowing farmers to sell their products to marijuana dispensaries. The farmers hoped this would let them vastly expand the type of products they can legally sell. But months later, state regulators appear hesitant to make major changes to the laws governing the hemp market.

A memo penned by Cannabis Control Commission general counsel Christine Baily and discussed at a commission meeting Friday raises numerous concerns about federal and state regulatory hurdles. It contemplates a market where many of the most lucrative hemp products – like food products and smokable flower – would continue to be banned, for now.

“Reading that memo was really crushing,” said Julia Agron, director of the Northeast Sustainable Hemp Association.“Farmers who thought they had a lifeline feel it’s being snatched out of their hands before they had a chance to climb on the boat.”

Hemp is a kind of cannabis plant that does not have psychoactive qualities and was legalized federally in 2018. Massachusetts’ Department of Agricultural Resources has overseen the hemp industry since Massachusetts legalized the crop in 2016.

While Massachusetts voters and regulators have not hesitated to ignore federal law in legalizing marijuana, the Massachusetts Department of Agricultural Resources has largely followed federal rules on hemp, forbidding its use in food or dietary supplements. State officials also chose to ban the sale of smokable hemp, out of concern it would be confused with marijuana. So hemp has been sold in Massachusetts primarily as fibers and fabrics, and skin products like lotions and oils.

Hemp advocates framed the budget provision as a way to expand the market for these skin products. But they also hoped that letting marijuana manufacturers buy hemp-derived products – including CBD oil and flower – would allow for the use of these products in edibles or as smokable flower. The rationale is that marijuana dispensaries can sell marijuana as edibles or flower, so there is no reason for them not to sell hemp in those formats, with similar state regulations. Flower and edibles are more lucrative than skin care products and fabrics.

However, regulators with the Cannabis Control Commission made clear this week that a quick opening of that market is unlikely, citing complications based on the complex relationships between federal officials and the two state regulatory agencies.

Baily’s memo suggested that the simplest way to comply with the new law initially would be to allow marijuana dispensaries to purchase the consumer-ready, legal hemp products already regulated by the Massachusetts Department of Agricultural Resources and sell them retail.

This would let marijuana dispensaries buy hemp seeds, hemp seed oil and powder, and hemp protein, which can be added to food but do not contain CBD or THC. They could buy cosmetics and clothing. But stores could not purchase anything edible containing CBD, animal food, or raw smokable flower.

Cannabis Control Commission Executive Director Shawn Collins said Friday that he hopes he could bring a proposal to commissioners by next month to let marijuana dispensaries purchase these products. Collins said he is in conversations with the Massachusetts Department of Agricultural Resources about what exactly that would look like, in terms of things like labeling and consumer information. “That’s the lowest hanging fruit in the hemp world,” Collins said.

But Collins said that while the biggest market would be for farmers to sell oil or other derivatives to marijuana product manufacturers as an ingredient, expanding the market that way would involve regulatory hurdles. For example, the Department of Agricultural Resourceas and the Cannabis Control Commission have different testing requirements for pesticides. There are questions about whether processing the oil would run afoul of federal regulations and draw the attention of federal regulators, who have generally not cracked down on state-legal marijuana businesses.

Baily wrote in her memo, “An FDA investigator looking at a Marijuana Product Manufacturer’s processing of products that contain marijuana and hemp and that are not approved by the FDA may not limit their enforcement to hemp, but also seek to enforce federal laws regarding marijuana.” She suggested working with federal regulators to determine the likelihood of enforcement.

Collins said allowing the sale of these derivatives would involve writing new regulations, which can be time-intensive. “I’m not saying whatsoever that it’s impossible or not going to happen,” Collins added.

Laura Beohner, president and cofounder of The Healing Rose in Newburyport, which sells hemp body care products, said she was happy commissioners seem eager to let her sell body products to dispensaries. She expects to double her revenues if that market opens up. But she would also like to see the sale of oil or flower. “A lot of farmers really want an avenue for their hemp flower,” she said. “You can only sell so many topicals to people.”

Linda Noel, a hemp farmer at Terrapin Farm in Franklin, said she is awaiting the final rules to decide whether she can afford to plant hemp this year. She said buying seeds, caring for the plants, and harvesting them is a significant expense. “I don’t have the money to make that investment and lose it,” she said.

Noel said she does not understand why state regulators are worried about federal rules about hemp, given that the whole marijuana industry is federally illegally. “Anything sold by a marijuana dispensary by definition is an illegal product,” Noel said. She said hemp is no different from sugar or coconut oil when used as an ingredient.

Agron agreed that hemp farmers face a double standard. “It seems disingenuous that the memo seems to be saying we have to be federally compliant while regulating our non-federally compliant industry,” she said.

John Nathan, who started Bay State Hemp, a hemp processing company in Plymouth, said the issue needs to get decided soon since the growing season is starting, and farmers need to purchase supplies. “Every minute that this delays is another day that a farmer can’t plan,” he said.