Sep 28, 2021
Court Ruling Could Threaten Minnesota’s Hemp Industry, Group Says

A precedent-setting ruling from the Minnesota Court of Appeals has the potential to upend the state’s burgeoning hemp industry, with impacts on both consumers and retailers.

On Sept. 13, 2021, the appellate court upheld a drug conviction based on evidence of an unspecified amount of THC in vape liquid. The ruling suggests that hemp laws allowing trace amounts of THC may not protect people who possess hemp-derived liquids in any form, including popular extracts such as CBD oil.

Unless the ruling is challenged or legislators amend state laws, the court’s interpretation of Minnesota law could lead to hesitation and fear among people who use hemp extracts to relieve pain and anxiety. It also puts the businesses that sell such products in a precarious position.

The Case Started as an Average Drug Bust

In June of 2019, state troopers in Brainerd found three pounds of leafy plant material and 89 vaporizer cartridges in a locked box, according to details in the ruling. The key to the box, law enforcement said, belonged to Jason Loveless.

The State of Minnesota charged Loveless with two counts of possession of a controlled substance: one for the plant material and one for the vape cartridges.

During the February 2020 jury trial, a forensic scientist from the Minnesota Bureau of Criminal Apprehension (BCA) testified that both the plants and vape liquid contained tetrahydrocannabinol (THC). To determine this, she performed “gas chromatography-mass spectroscopy” analysis. Even though the state scientist did not specify the concentration of delta-9 THC, the jury found Loveless guilty.

Loveless’ Appeal Brings a Win and a Loss

Loveless appealed the verdict, arguing that the state had failed to prove that the plants and vape liquid were indeed controlled substances. Due to changes in Minnesota law allowing for small amounts of THC in hemp products, the state’s evidence was insufficient to show that the substances in his possession contained delta-9 THC in concentrations above 0.3%.

In the Court of Appeals, “State v. Loveless” yielded a win for Loveless — and a loss that has implications far beyond his case.

The court ruled in his favor on the unprocessed plant material, agreeing that the state failed to meet its burden of proof to show that THC concentrations exceeded new legal limits of 0.3%.

But the court ruled that no amount of THC would be considered legal in the vape containers.

Appellate Judge Matthew E. Johnson wrote, “We conclude as a matter of law that the 0.3% threshold does not apply to a liquid mixture containing tetrahydrocannabinols.”

The definition for liquid THC, he said, had not been changed in the state’s Schedule I definitions. The definition for marijuana had, but that definition only included hemp in the form of leafy plant material, the court said.

This distinction goes back to the original trial, when the BCA forensic scientist testified that the vape liquid contained THC, but “no marijuana was identified” because she “did not observe any apparent plant material.”

Johnson wrote, “Unlike the definition of marijuana, the inclusion of tetrahydrocannabinols in Minnesota’s Schedule I does not make any exception for hemp or for a substance or mixture that has a concentration of delta-9 tetrahydrocannabinol that is 0.3% or less on a dry-weight basis.”

In a footnote, Johnson explained that, unlike the state, the federal government had changed its definition of tetrahydrocannabinol to exclude those found in hemp.

The Court of Appeals concluded that hemp laws allowing up to 0.3% delta-9 THC apply only to unprocessed cannabis, or “leafy plant material.” In vape liquid, the presence of an unspecified amount of THC was enough to affirm Jason Loveless’ conviction.

Implications for Hemp Consumers and Retailers

“If the ruling is upheld, it has the possibility of destroying the industry as we know it,” said Elliot Ginsburg, an attorney for the industry organization Minnesota Cannabis Association. “It would allow the sale and possession of hemp flower only and would criminalize the sale and possession of extracts.”

For consumers, it could mean buying vape cartridges might put them at risk of criminal charges — but also CBD oil, sleep aids containing CBN, tinctures, gummies and other edibles.

As for the hemp industry: “It really puts everybody in the industry at risk,” Ginsburg said, “whether they’re manufacturers, processors or retailers selling CBD products. Any product derived from hemp other than hemp flower is potentially a controlled substance under this ruling, and anyone in possession or selling it is potentially subject to criminal charges.”

And hemp has become a big industry.

“This could destroy many businesses in Minnesota,” said Steven Brown, board member of the Minnesota Cannabis Association. “Not just THC businesses but tobacco shops and even grocery stores. According to the way this trial went, all of them are doing something completely illegal, but it shouldn’t be. That wasn’t the intent of the 2018 Farm Bill.”

Ginsburg echoed the scale of impact this decision could have.

“Even Whole Foods has CBD products,” Ginsburg said. “I don’t see [large-scale prosecution] as something that’s likely to happen. But it will really depend on what law enforcement chooses to pursue.

“It’s a big setback if it’s upheld and enforced as the court interpreted it. One of the most important things for any business is regulatory certainty, and this throws a wrench in that. Other states have established what’s allowed, regulatory speaking. And we thought we had a fair degree of certainty, but this decision calls that into question.”

Statutes May be Incomplete

Because the state’s hemp laws were created to encourage the hemp industry, the decision may indicate that state statutes need an update.

“The court read portions of the statute in a very literal way to get to their decision, but ignored important parts of the statute — those relating to derivatives and extracts,” Ginsburg said. “I think they misinterpreted the statute itself and the intention underlying the law as well, which was to help create a hemp industry. The decision directly threatens the very existence of the entire hemp industry.

“I don’t think the court was out to get anybody. The way the laws and regulations are set up, it’s complex and confusing. And maybe the regulations and statutes are not as complete as they should be.”

Returning to the ruling, Judge Johnson acknowledges a 2019 law that recognizes the lawfulness of vaporizer cartridges containing low concentrations of delta-9 THC. One allows the sale of products containing “nonintoxicating cannabinoids” for consumption, as long as they are tested and labeled correctly.

“Nonetheless,” Judge Johnson wrote, “the legislature did not ament the relevant provisions of chapter 152 to make it lawful to possess a liquid mixture with a low concentration of delta-9 tetrahydrocannabinol. If a statute’s language is plain and its meaning is unambiguous, a court must interpret the statute according to its plain meaning, without resorting to canons of construction or legislative history.”

Clear Path to Resolution — but Questions Remain

According to Ginsburg, the court’s decisions points to the need for an update to state legislation. The question is, will lawmakers change it? And in the meantime, will the court’s decision be challenged?

“The court’s decision spells out a legislative solution,” Ginsburg said. “The question is, if this is appealed, will it be upheld? Will the legislature take action next session to fix it?”

Source: Minnesota Cannabis Assocition

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