Virginia Stomps Its Local Hemp Industry With New Law

Virginia Senate Bill 591 (SB 591) was passed into law last week by Governor Youngkin. SB 591, with amendments proposed by Governor Youngkin, updates a number of cannabis-specific provisions of the Code of Virginia (Code). This article focuses on the provisions of that Bill that impact the Virginia hemp and hemp-derived products industry.

SB 591, as an amendment to Code § 3.2-4113, states:

“It is lawful for a grower, his agent, or a federally licensed hemp producer to grow, a dealer or his agent to deal in, or a processor or his agent to process industrial hemp in the Commonwealth for any lawful purpose. No federally licensed hemp producer or grower or his agent shall be prosecuted under Chapter 11 (§ 4.1-1100 et seq.) of Title 4.1 or § 18.2-247, 18.2-248, 18.2-248.01, 18.2-248.1, or 18.2-250 for the possession or growing of industrial hemp or any Cannabis sativa with a tetrahydrocannabinol concentration that does not exceed the total delta-9 tetrahydrocannabinol concentration percentage established in federal regulations applicable to negligent violations located at 7 C.F.R. 990.6(b)(3).”

Of particular note in this section is the addition of the word “total” to the term “delta-9 THC”. Arguably, this addition by the Virginia General Assembly (and Governor) severely narrow what constitutes lawful industrial hemp in the state.

Additionally, SB 591 amends the Code’s definition of “Industrial hemp extract”, by mandating that:

“A. An industrial hemp extract shall (i) be produced from industrial hemp grown in compliance with applicable law and (ii) notwithstanding any authority under federal law to have a greater concentration of tetrahydrocannabinol, have a tetrahydrocannabinol concentration of no greater than 0.3 percent.

B. In addition to the requirements of this chapter, an industrial hemp extract or food containing an industrial hemp extract shall comply with regulations adopted by the Board pursuant to § 3.2-5145.5.

C. No person shall manufacture, offer for sale at retail, or sell at retail an industrial hemp extract or food containing an industrial hemp extract that depicts or is in the shape of a human, animal, vehicle, or fruit.”

In these provisions we see explicit limitations on the THC concentration of industrial hemp extract. For reasons we have discussed in previous articles, we question whether any hemp processor can comply with this limitation since most, if not all, mid-stage hemp extracts contain THC concentrations that exceed 0.3% and all remediated “waste-stream” THC extracts definitely exceed 0.3%. VA takes a bold stance in expressly limiting the THC concentrations in hemp extracts, but its failure to understand hemp processing is apparent. In addition to either remaining silent on the issue or expressly authorizing hemp extract to exceed 0.3% THC during mid-stage processing, VA also failed to create a safe-harbor or destruction process for remediated THC destined to be destroyed.

Additionally, these provisions also include restrictions prohibiting the form of industrial hemp extract products may take. Specifically, products containing industrial hemp extract cannot be in certain shapes. While this is likely an attempt to curb the manufacture of products that could appeal to minors, it places additional limitations on the types of products that can be offered for sale in Virginia.

SB 591 also authorizes the Board of Directors of the Virginia Cannabis Control Authority (Board) to adopt regulations establishing labeling requirements for an industrial hemp extract or food containing an industrial hemp extract, while also giving the Board discretion to adopt “packaging requirements for an industrial hemp extract or a food containing and industrial hemp extract that is offered for sale at retail, including per-package and per-serving tetrahydrocannabinol limits.”

The Board must also adopt “regulations establishing batch testing requirements for industrial hemp products.” Additionally, the Board “shall require that batch testing of industrial hemp extracts be conducted by an independent testing laboratory that meets criteria established by the Board.”

SB 591 also defines certain prohibited practices under the Code, providing:

“The following fraudulent acts or practices committed by a supplier in connection with a consumer transaction are hereby declared unlawful:

67. (i) selling or offering for sale at retail any substance intended for human consumption, including an industrial hemp extract as defined in § 3.2-5145.1, a food containing an industrial hemp extract, or a hemp product intended for smoking, that (a) has a total tetrahydrocannabinol concentration that exceeds 0.3 percent or (b) contains synthetic delta-8 tetrahydrocannabinol or (ii) selling or offering for sale to a person younger than 21 years of age any substance, including an industrial hemp extract, as defined in § 3.2-5145.1, a food containing industrial hemp extract, or a hemp product intended for smoking, that contains tetrahydrocannabinol.” (Emphasis added).

Much like with the definition of “hemp” above, this section of SB 591 takes direct aim at any product containing more than 0.3% tetrahydrocannabinol. Additionally, it clearly prohibits the sale of any product containing “synthetic” delta-8 THC, as well as a prohibition on the sale of any product containing hemp extract (including foods) or a hemp product intended for smoking, to any person under the age of 21. This is an emerging trend among states across the country that are (over)reacting to the popularity of delta-8 THC and other novel cannabinoids.

As an aside, SB 591 also mentions two other specific cannabinoids, THC-P and THC-O. SB 591 reclassifies these two substances as controlled substances under the Virginia Code.

Of particular note is the following section, which states: “That the provisions of §59.1-200, as amended by this act, of the Code of Virginia shall become effective October 1, 2022.” This means that the ban on selling products with THC concentrations that exceed 0.3%, the ban on selling products containing synthetic Delta-8 THC, and the ban on selling products containing industrial hemp extract to persons under the age of 21 does not go into effect until October 1, of this year.

Virginia’s attempt to provide further clarity regarding hemp extract and hemp-derived products has instead resulted in additional and onerous regulations that challenge the vitality of an industry it once strongly supported. For more information on how the attorneys at Kight Law can help you navigate through Virginia’s changing regulatory landscape, please do not hesitate to contact us today.

April 21, 2022

This article was written by Kight Law attorney Philip Snow. Kight Law represents hemp businesses in the US and throughout the world. To schedule a consultation with Philip, please click here and mention this article.