Washington state bars marijuana processors from converting hemp CBD into delta-9 THC

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Washington state regulators said marijuana processors cannot convert hemp-derived CBD into delta-9 THC in the legal cannabis market, a move that is likely to be welcomed bv MJ cultivators who feared the practice involving federally legal hemp would undermine their own businesses.

Friday’s decision by the state’s Liquor and Cannabis Board is intended to clear up confusion around the legality of hemp-derived CBD converted to delta-9 THC in the licensed market.

Marijuana growers, in particular, were concerned because it’s far cheaper to convert CBD extract – isolate, mostly – into delta-8 THC and delta-9 THC versus growing MJ to make THC.

Growers were hoping the LCB would provide more clarity about the legality of the practice – something the agency has now done, at least in the case of delta-9 THC.

Licensed marijuana companies should expect the market to stabilize as this takes effect.

Micah Sherman, a cannabis business owner in the state and Washington Sun and Craft Growers Association board member, said he hopes the LCB’s statement will clear up confusion in the market.

“In the short term, we’ll have to see what the LCB actually does and how it trickles down to stores and their behavior,” he said.

Sherman said the monthslong delay in the regulators’ statement allowed delta-9 THC from hemp-derived CBD to disrupt the marijuana market.

“This had a profound effect on the bottom line for farmers,” he added.

Sherman explained that licensed marijuana growers haven’t been able to sell their biomass for extraction because processors were buying and making delta-9 THC from hemp-derived CBD for much cheaper.

“Any producing of a THC product falls outside the license privileges of a processor licensed by the LCB … may be considered a Controlled Substances Act violation, and a misuse of the processors license,” the LCB noted in a release.

“Licensed processors may not sell or purchase any THC product not legally produced by a licensed marijuana producer.”

The agency stipulated that this “Interpretive Statement” is not a law, and it remains to be seen whether regulators are targeting any violations of this regulation for enforcement.

Vicki Christophersen, executive director of the Washington CannaBusiness Association, said the LCB’s statement was a reminder of how “inconsistent” state regulators are by way of enforcement and compliance.

“The Liquor and Cannabis Board has once again taken the position that responsible and highly regulated cannabis license holders may be selling some illegal products,” she said.

“The agency has suddenly defined certain license holders operating in good faith in the legal cannabis marketplace as violating the Controlled Substances Act.”

She went on to say the LCB’s position “will have a chilling effect on the ability of legal businesses to engage with their regulator in a collaborative environment that recognizes safety, legal requirements and industry development.”

Sherman also pointed out that product liability insurance doesn’t cover illegal products, and stores selling delta-9 THC made from CBD could be susceptible to a lawsuit if someone falls ill from consuming it.

Bart Schaneman can be reached at bart.schaneman@mjbizdaily.com.