Hemp industry feeling the burn from spending bill provision

Spending bill looks to close loophole on hemp products

A congressional spending bill is taking aim at hemp products, looking to close the loophole on unregulated THC. FOX 10's Megan Spector reports.

PHOENIX - The hemp industry is feeling the effects of a small provision in the recently passed spending bill—the same one that ended the government shutdown.

The backstory:

By state law, recreational marijuana has to be sold through regulated dispensaries. But a loophole in the 2018 Farm Bill has allowed hemp products to be sold outside of dispensaries, at places like gas stations, smoke shops, or corner stores. 

Now, Congress and local officials are trying to close that loophole, targeting unregulated THC.

"People started to make products that had THC in them, that they were using synthetic types of processes to make it—making gummies, drinks, all of that. And those were available at convenience stores, at smoke shops," said Moe Asnani, the founding partner at Ilava and D2 Dispensary.

Local perspective:

This has been a growing concern for Arizona law enforcement.

"These products are really problematic, especially here in Arizona. One of the main reasons was that they’re available to pretty much anyone including young people, and a lot were targeting young people… You had a lot of places that just sold to whoever wanted to buy it," Yavapai County Sheriff David Rhodes said.

The 11th-hour provision to reopen the government reverses the legal sale of certain hemp products that contain above 0.4 milligrams of THC.

"Law enforcement has clarity, the industry has clarity, and the community has clarity. Now they can have a discussion to determine what this will really look like, moving forward," Sheriff Rhodes said. 

What they're saying:

"The most important thing people should know about this change is that it doesn’t affect anybody who has been buying cannabis products from a licensed dispensary in the state of Arizona," Asnani said. "Now if you’ve been buying THC products from gas stations, convenience stores, that may affect your ability to do so."

Some Arizona dispensaries are supporting the regulations for hemp products.

"I also think that from a safety perspective, there is heavy metals and pesticides and other things that they’re not required to test for because there was a loophole, and we have to meet those regulations," Asnani said.

Dig deeper:

The Hemp Industry Trade Association of Arizona released a statement, saying in part, "This one-year transition period gives us exactly what we’ve been fighting for: time to formalize standards and bring unregulated products under responsible oversight."

That one year allows the hemp industry and the states time to update their rules.

We reached out to Attorney General Kris Mayes to see if she will go after unregulated products with THC, including at dispensaries, who said, "Our office still needs to analyze the federal legislation to determine its impact." 

Last month, Mayes signed off on a letter to Congress asking for clarification on the definition of hemp for enforcement.