Minnesota Legislation Ushers In Sales of THC-Infused Beverages

Even absent a federal regulatory framework, the demand and market for cannabis-infused beverages continue to grow nationwide. As states legalize marijuana for medical and adult use, some have enacted specific provisions for the sale of food and beverages containing THC. Minnesota recently passed one such law, which became effective in early July. In Minnesota, medical marijuana is permitted for the treatment of certain medical conditions, but adult use legislation has not yet been passed. The state’s new law legalized the sale of food and drinks containing up to 5 mg of THC per serving, and 50 mg total per package – so long as the THC is derived from certified hemp plants. Under federal law, hemp plants – as opposed to marijuana plants – can contain no more than .3% THC by weight. These content limits apply to all strains of THC, including Delta 8, which is currently not federally regulated.

Minnesota’s new law prohibits THC-containing products from being sold to anyone under 21 or marketed to children. The products must be sold in tamper-proof packaging, and packages must contain a QR code that provides consumers with an ingredient list and testing information. The law is also different from other states’ legalization regimes in one major respect: while other states only permit sales of these products by licensed distributors, Minnesota places no restrictions on who can sell edibles or beverages containing THC. This also means that sellers are not subject to a lengthy application process. Businesses in Minnesota have wasted no time in benefitting from this legislation. Demand for THC-infused gummies has been high since their legalization, and beverage companies and breweries have already entered this new market. Minneapolis Cider Company introduced a non-alcoholic sparkling beverage called Trail Magic, which contains 3 mg of THC per serving, bringing the product to launch within a month of the law’s passage. Indeed Brewing, also in Minneapolis, introduced Two Good, a seltzer containing 5 mg of THC and 2 mg of CBD, in early August. While Minneapolis Cider Company sells Trail Magic for visitors to consume in its taproom, Indeed currently only offers Two Good for to-go sales. Both companies are selling their THC beverages as an alternative to alcoholic beer or cider, and both beverages have been popular with consumers since their introduction.

Market participants in Minnesota are still navigating the contours and nuances of the new law, as are those in many other states. But as states continue to legalize various forms of THC sales, it is likely that beverages like Trail Magic and Two Good will become more ubiquitous.

Why Cannabis Beverages are a Good Bet

Constellation Brands, Boston Beer, Molson Coors, PepsiCo, Jones are some of the beverage companies betting on drinks with THC or CBD, adding them to their beverage product lines, as are cannabis drink makers like CANN Social Tonics, Keef, and Artet.  Here’s why:

Just about everyone enjoys socializing with a drink in their hand. Wherever people are gathering, from couples to small groups to large events, whether at a bar, cocktail party, friends/family get together, a game or other outing, most people have a drink in their hand.  Years ago cigarettes were as ubiquitous in social settings, but those days are long gone – smoking, because of its health effects and smell, has become obsolete if not shunned.   The same stigmas seem even more pronounced when it comes to smoking or vaping cannabis, plus there is the added stigma of “getting high,” which, for some reason, as a general matter, seems less socially acceptable than “getting drunk.”  Cannabis drinks are not burdened by these stigmas.

Moreover, just like alcoholic beverages, cannabis drinks allow the consumer more control over their psychoactive experience.  Just as consumers use beer, wine, and spirits for a range of intoxication, cannabis drinks can be consumed in the same way.  A few sips of a cannabis beverage with 10 mgs of THC may be enough for some to get a slight euphoric buzz that does not interfere with their socializing like a beer or two might give someone a slight buzz that does not interfere with their socializing.  In this way, cannabis beverages stand in contrast to high-THC products like vapes, butter, and shatter, just as shots of tequilla, vodka, and jager stand in contrast to beer and wine.

Cannabis drinks are a good bet because they largely avoid the stigmas of smoking and getting high, and, in so doing, make THC and CBD accessible to consumers who have withheld from using cannabis because of them.  Add to that the flexibility and control of micro-dosing, and cannabis drinks become more appealing to more people in more social situations.  This is why beverage companies and cannabis companies are betting on cannabis drinks.

 

U.S. Senators Urge Changes to Testing Requirements Under USDA Interim Final Rule for Hemp Program

When the United States Department of Agriculture released the interim final rule for the hemp program in October 2019, many stakeholders—including businesses and state agencies—were caught off guard by certain testing-related requirements contained in the rule. Because hemp is now legal under the 2018 Farm Bill if it contains no more than 0.3 percent THC concentration, testing for THC levels is critical. However, significant questions and issues with the testing requirements must be clarified.

On November 20, 2019, Senators Ron Wyden and Jeff Merkley, both from the state of Oregon, submitted a letter to the secretary of the USDA, in which they flagged—“in no particular order”—five controversial testing-related requirements and requested modifications to those requirements. Below, we have summarized the senators’ concerns and proposed solutions to three particularly controversial testing-related requirements in the interim final rule.

View the full Alert on the Duane Morris LLP website.

Will Ban on Flavored Nicotine Encompass THC or CBD Vaping?

Seth Goldberg
Seth A. Goldberg

I have been writing about the recent reports of vaping related deaths and illnesses, and allegations that in some instances cannabis vaping could be a contributing factor, with a focus on the heightened risk of personal injury/product liability lawsuits.  Amidst those reports it is now being reported that the Trump Administration is preparing to ban flavored nicotine products.  Because THC is federally unlawful, it us unlikely that such a ban would explicitly prohibit THC vaping products, but it could include federally lawful hemp-derived CBD vaping. The absence of an explicit reference to THC vaping by the Trump Administration should not be deemed a clear runway for THC vaping manufacturers, as federal prosecutors who have discretion to take enforcement action for public safety concerns may use that power against THC vape manufacturers.   Cannabis vaping manufacturers need to be very mindful of the current climate with respect to vaping. I will continue to monitor and update our Cannabis Industry Blog on this issue.

FDA Announces Its Next Steps for Cannabis Products

With the enactment of the Agriculture Improvement Act of 2018 (also known as the 2018 Farm Bill), hemp-derived CBD appeared to be on the table for marketing all across the country. However, the U.S. Food and Drug Administration’s (FDA) press release issued that same day put a hold on the jubilation, stating that FDA considered any and all cannabis-containing or cannabis-derived products as drug products and not food or dietary supplements, regardless of whether the CBD was hemp-derived.

On April 2, 2019, departing FDA Commissioner Scott Gottlieb issued a statement about FDA’s next steps to advance a regulatory pathway for cannabis-containing and cannabis-derived products. At the same time FDA updated its cannabis-containing products and cannabis-derived products Q&A. It is clear that, at this point, FDA has not changed its position.

Read the full Alert on the Duane Morris LLP website.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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