Maryland’s Hemp Industry Faces Uncertain Future: A Deep Dive into the New CBD Regulations

In a recent turn of events, Maryland’s hemp industry is facing significant challenges due to new regulations that have come into effect. Hemp producers and stakeholders in the state have taken legal action against the state’s officials, challenging the restrictions placed on the sale and distribution of CBD products.

The New Law’s Implications

Starting this month, CBD products, including popular items like extracts, gummies, and topicals, are deemed illegal in Maryland if they contain more than 2.5 milligrams of THC per package. This threshold, according to many CBD operators, effectively removes a majority of products from the market. Additionally, the law explicitly bans delta-8 THC, a sought-after synthetic THC variant derived from hemp-based CBD.

A group of hemp producers from Boonsboro, who are among the plaintiffs, highlighted that most of their products, which were previously legal and derived from hemp, now fail to meet the new standards. They emphasized that these products were not classified as illegal marijuana under the prior law and were distributed without requiring a license.

State’s Perspective: Consumer Safety First

Maryland officials have defended the new regulations, stating their primary goal is to shield consumers from unregulated products that could pose potential health risks. The U.S. Food & Drug Administration (FDA) currently prohibits the promotion of cannabis derivatives in food items. Both CBD and delta-8 THC have not received approval for consumption by humans or animals. Furthermore, the U.S. Drug Enforcement Administration (DEA) has categorized delta-8 THC as a Schedule I drug under the Controlled Substances Act (CSA).

Legal Battle Ensues

The lawsuit, which was officially filed on July 24 in a Circuit Court in Washington County, is directed against several state entities and officials, including Gov. Wes Moore, the Maryland Cannabis Administration, and the Maryland Alcohol, Tobacco, and Cannabis Commission. The core of the lawsuit revolves around House and Senate Bill 516, which introduced a comprehensive cannabis law encompassing both hemp and marijuana.

A ‘Monopoly’ in the Making?

The plaintiffs argue that the state’s new regulations inadvertently grant a near-monopoly to licensed marijuana operators. This is due to the imposed THC concentration caps in CBD products and the stringent cannabis licensing process. A CBD Lawyer representing the hemp stakeholders, expressed concerns about the challenges hemp operators face in obtaining the necessary licenses to sell their products under the new THC restrictions. The current licensing prerequisites demand that at least 65% ownership and control be maintained by an individual who also satisfies other rigorous criteria.

Furthermore, the plaintiffs believe that the licensing procedure contravenes Maryland’s anti-monopoly statutes and the state’s Equal Protection Act. They argue that the law unfairly favors specific groups during the initial licensing application phase.

Economic Implications

The hemp industry’s preliminary estimates indicate that the new regulations could lead to a staggering loss of over $560 million in CBD sales. This could potentially jeopardize around 4,200 jobs, force the closure of approximately 370 businesses, and prompt 60 more to relocate out of Maryland.

Despite efforts to halt the law’s implementation during the previous legislative session, it remains in effect. Maryland now joins its neighboring state, Virginia, in imposing stringent restrictions on the hemp sector. Similarly, states like New York and Tennessee have enacted laws that either limit THC content in hemp-derived products or mandate specific business licenses for their sale.

In Conclusion

The future of Maryland’s hemp industry hangs in the balance as producers and stakeholders grapple with the new regulations. As the legal battle unfolds, it remains to be seen how these changes will shape the state’s CBD market and its broader economic landscape. For more insights and legal guidance on the matter, consider consulting with a CBD Attorney from the Cannabis Law Group.