Utah’s Bureau of Investigation Targets Small Businesses Retailing CBD Products

Utah’s Bureau of Investigation Targets Small Businesses Retailing CBD Products

The Salt Lake Tribune reports….

Utah authorities are investigating a rapidly growing industry that has led businesses to offer cannabis products that people are using without prescription to treat various ailments amid uncertainty in state and federal law.

Businesses across Utah are selling cannabidiol, or CBD, a nonpsychoactive byproduct from cannabis plants that farmers in states and countries where it’s legal began growing in recent years to fill a massive demand for what’s described as a natural medicine for a variety of conditions.

Even Congress recently took steps that opened the door to the budding industry that made its way to Utah. But businesses in the state that are buying products from a wide array of companies abroad and selling them here are operating outside Utah’s laws allowing for limited hemp extracts to be sold, according to state officials.

“It’s not legal,” said Lt. Todd Royce, a spokesman for the Department of Public Safety. “Recreational use CBD never has been legal, and is not currently legal.”

Royce said the state Bureau of Investigation has recently undertaken a broad probe into the CBD industry in Utah, as businesses have openly advertised products that Royce and others say aren’t allowed without a card from the Department of Health.

Last week, the agency said it was investigating in conjunction with the Department of Health an alarming uptick in calls to poison control from people who said they thought they had consumed CBD products but suffered adverse side effects not associated with them. Unlike the byproduct THC, from marijuana plants, CBD itself doesn’t get users high. The two have historically been tied together because they’re both cannabis plants.

Congress added a provision to the 2014 Farm Bill that allowed states to legalize industrial hemp — which produces CBD — and led to the rapid rise in hemp growing and sale of products in many states that legalized it, such as Colorado. Lawmakers later took steps to prevent a reluctant Drug Enforcement Administration from treating industrial hemp like other, still-illegal cannabis plants.

CBD’s popularity has soared among people using it to treat anxiety, sleep deprivation and epilepsy.

State seizure

That’s what led Ed Hendershot to begin offering it through an antiques shop he runs on Heber City’s Main Street. He thought he was legally selling the product when he started offering a Colorado-based CBD product for customers. Within about two months, customers buying the CBD products accounted for about a third of his business, he said.

“We just had people that would come in and try it and the next day they’d come in and report how amazing it was helping them,” Hendershot said, who added that he’d vetted his supplier and had been told the product was legal across the country.

Last week, a representative from the Division of Occupational and Professional Licensing (DOPL) entered Hendershot’s store, gave him an administrative subpoena and told him he was selling an illegal product.

The subpoena sought “any and all records of sale and invoices of purchase of heparin, CBD oil, and any other prescription drugs,” according to a copy provided by the Libertas Institute. The subpoena was addressed to Medical Vanguard, a company Hendershot started in Idaho that sold products for medical kits.

Hendershot told the inspector that he didn’t maintain any such records but said he’d remove the CBD products until he could get better clarity of what state law allows him to sell. The inspector then took about $400 worth of the product when he left, Hendershot said, despite not having a warrant.

Asked about Utah’s CBD laws generally, DOPL spokeswoman Jennifer Bolton said the agency “can neither confirm nor deny that there is an active investigation into Medical Vanguard,” and declined further comment.

The subpoena is dated Dec. 21, the same day the Department of Public Safety announced an uptick in calls to poison control.

Hendershot said he’s waiting to understand the law before he continues selling CBD, though a half-dozen customers asked him for it since he stopped selling.

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