LCB Interpretive Statement Bans Hemp-Derivatives Besides CBD

The Washington State Liquor and Cannabis Board (LCB) recently adopted an Interpretive Statement on the use of Additives in Authorized Cannabis Products. The Interpretive Statement is described by the LCB as follows:

This interpretive statement describes the use of CBD product and other additives, and whether other cannabinoids, such as hemp-derived CBG and CBN, may be added to cannabis products or sold as stand-alone products authorized for production, processing, and sale under chapter 69.50 RCW.

Interpretive statements are intended to advise the public on how a government agency interprets rules and statutes. In this post, we’ll examine how the LCB interpreted Washington law and its own rules and what this Interpretive Statement means for your business.

Cannabis Additive Law – Licensees can add Hemp-CBD to their cannabis products

Washington first legalized recreational cannabis ten years ago with the passage of Initiative-502 (I-502) creating a recreational cannabis market made up of producers, processors, and retailers. Generally speaking, a processor can only purchase cannabis plant material from a producer or other processor. This changed with the passage of Senate Bill 2334, now codified at RCW 69.50.326 (Cannabinoid Additive Law) in 2018. The Cannabinoid Additive Law allows producer and processors to use “a CBD product for the purpose of enhancing cannabidiol concentration of any product” sold through the I-502 system so long as it comes from hemp and has been tested for contaminants and toxins. CBD Product is defined as “any product containing or consisting of cannabidiol.” The Cannabinoid Additive Law also allowed the LCB to establish rules regarding cannabis additives.

Cannabis Additive Rule – Licensees using Hemp-CBD must ensure the CBD is tested

The LCB did just that and passed a rule on “Cannabinoid additives—Requirements, restrictions, and quality assurance testing,” codified at WAC 314-55-109 (Cannabinoid Additive Rule). The Cannabinoid Additive Rule elaborated on the Cannabinoid Additive Law. It required licensees using Hemp-CBD to add it into the standard traceability system used in I-502. It also significantly expanded testing requirements by requiring the following:

  • Potency testing for cannabinoids (THCA, THC, Total THC, CBDA, CBD, Total CBD)
  • Pesticide screening
  • Heavy metal screening
  • Residual solvent screenings
  • Microbial screening
  • Mycotoxin screening

The Cannabinoid Additive Rule did not alter the definition of CBD Product.

Interpretive Statement

The Cannabis Additive Law was passed in 2018, before the 2018 Farm Bill passed but after the boom for Hemp-CBD boom that followed the 2014 Farm Bill. The 2014 Farm Bill allowed for limited hemp cultivation for research purposes. The 2018 Farm Bill unambiguously legalized the sale of hemp and cannabinoids derived from hemp, including Hemp-CBD and all other cannabinoids derived from hemp such as cannabigerol (Hemp-CBG) and cannabinol (Hemp-CBN).

In the years since the Cannabis Additive Law and Rule were implemented, the I-502 market has shifted. More consumers are looking for cannabis products with increased amounts of CBD, CBG, and CBN. In practice, producers and processors have begun to buy Hemp-CBD, Hemp-CBG, and Hemp-CBN even though the Cannabis Additive Law and Rule only lists Hemp-CBD as an acceptable cannabinoid additive, because in many cases, it is cheaper than cannabis-derived CBD, CBN, and CBG (Cannabis-CBD, Cannabis-CBN, and Cannabis-CBG).

The Interpretive Statement says that I-502 producers and processor can continue adding Hemp-CBD, but not Hemp-CBG, Hemp-CBN, or any other cannabinoid derived from hemp.

Practical Impact

Since the Interpretive Statement was released, we have had some informative conversations with I-502 producer/processors and with the LCB. Here are some points that you need to keep in mind if your business is unsure how to proceed with the Interpretive Statement:

  • Going forward, any cannabinoids besides CBD should come from I-502 grown cannabis. Hemp-CBD, Cannabis-CBN, and Cannabis-CBG are allowed but Hemp-CBG, Hemp-CBN, and any other hemp-derived cannabinoid are out.
  • The Interpretive Statement is not intended to prohibit naturally occurring amounts of cannabinoids from hemp. Rarely, if ever, is a hemp derivative a pure isolate. If you are a licensee adding Hemp-CBD to a product, be wary of the levels of other cannabinoids, but also understand that the LCB has not adopted a “zero tolerance” policy. Trace amounts of Hemp-CBG or Hemp-CBN are okay, but Hemp-CBG or Hemp-CBG dominant isolates are not.
  • Compliance is key, but not expected immediately. This Interpretive Statement is intended to clarify that the Cannabis Additive Law and Rule only allow the inclusion of Hemp-CBD. This statement would not have been issued if there was not confusion in the I-502 market. If you are an I-502 licensee who has inventory containing Hemp-CBG or Hemp-CBN you have options beyond destroying your products. The bigger risk going forward would be to continue purchasing and adding Hemp-CBG or Hemp-CBN to your products.

Bottom Line

It does not appear that a crackdown on non-CBD hemp derivatives is imminent, based on what we have heard from the LCB. However, if your business has been targeted by enforcement over this Interpretive Statement or if you are unsure how to proceed, please do not hesitate to contact Green Light Law Group.

You can contact Daniel Shortt at info@gl-lg.com or (206) 430-1336.

https://greenlightlawgroup.com/blog/lcb-interpretive-statement-bans-hemp-derivatives-besides-cbd

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