Week in Review: Rescheduling marijuana in NJ, Cleveland’s limits on MMJ locations & FDA + CBD

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A New Jersey court tells the state to review how it classifies marijuana, Cleveland imposes strict limits on where MMJ companies can locate, and the FDA issues warnings to CBD producers.

Here’s a closer look at some notable developments in the marijuana industry over the past week.

Cannabis schedule review

New Jersey – which is home to five medical cannabis dispensaries – made news when a state appeals court ruled that the Division of Consumer Affairs must review marijuana’s classification as a Schedule 1 substance.

Bigger news than the court’s order, however, may be its acknowledgement that cannabis has medical value.

“It’s very exciting to see a court say, ‘Hey, this makes no sense. How is it that the law says marijuana has no possible medical use, yet the state has a medical marijuana law?” said Kate Bell, an attorney with Washington DC-based Marijuana Policy Project whose reform territory includes New Jersey.

“It’s great to see a court acknowledge the overwhelming evidence of medical benefits.”

But don’t expect the appellate court’s ruling to convince the federal government to change how it schedules cannabis, Bell said. Any implications at the federal level are only symbolic, though they’re welcome nonetheless.

“That’s another way to put pressure on the federal government to base their drug policy on science as opposed to propaganda,” she added.

In fact, according to a 2015 MPP report, several states classified marijuana as something other than Schedule 1.

For example:

  • Alaska designated marijuana as VIA, meaning substances with the “lowest degree of danger or probable danger to a person or the public.”
  • Washington DC labeled cannabis as Schedule 3, which means there’s some accepted medical use but also a high potential for abuse.
  • Connecticut designated marijuana as Schedule 2.

Marijuana zoning issues

Cleveland became one of the latest Ohio municipalities to enact a strict zoning ordinance for where MMJ plant-touching businesses will be able to set up shop, but it definitely isn’t the first, said industry lawyer Tom Haren.

Haren – who’s been working on multiple license applications for Ohio medical marijuana companies – said it’s become a decent-sized trend across the state for towns and cities to pass such laws.

But he doesn’t think it’ll be a prohibitively difficult obstacle for companies to overcome.

“It’s not that unusual, and I think Cleveland just got a lot of press because it’s Cleveland,” Haren said.

“What we’re seeing throughout the state is a lot of cities picking and choosing specific zoning districts where they want medical marijuana businesses to locate, and it seems that they’re a little more sensitive to retail dispensaries than they were to cultivation or processing.”

And arguably, he said, there’s an upside to such zoning, because it gives businesses more certainty: They no longer will rent or lease space and then worry they may eventually be zoned out.

“I think it’s good the city identified places where applicants know they’re able to locate. That’s a good thing,” Haren said.

“To have a larger area might be beneficial and easier for you to find properties, but now it presents less of a headache at the local approval level for these applicants.”

He also noted that just because a particular city passes a strict zoning ordinance doesn’t mean it’s completely inflexible.

Often, he said, local variances are available to businesses that want to locate in a part of a city that isn’t immediately available.

The FDA & hemp

The Food and Drug Administration sent warnings to four CBD manufacturers this week warning them to stop claiming medical benefits that haven’t been substantiated by the FDA.

FDA warnings are hardly the industry chokehold many expected from the Trump administration.

The warnings don’t lead to criminal charges, and only in rare cases do they result in product seizures.

Instead, manufacturers have 15 days to show the FDA they’re going to change their marketing or labeling.

Interestingly, the FDA hasn’t even proclaimed CBD products to be snake oil, or even illegal.

Instead, spokesman Michael Felberbaum said, the agency simply wants to ensure medical claims are backed by evidence.

“We recognize that there is interest in developing therapies from marijuana and its components,” Felberbaum wrote in an email to Marijuana Business Daily. “We continue to assess whether there are appropriate and effective therapeutic uses of marijuana and its components and believe the drug approval process … is the most appropriate way for this to occur.”

Still, the letters are a reminder to CBD manufacturers to have a lawyer review their marketing materials and contract language with third-party sellers, said Tim Gordon, president of CBDRx, which makes hemp-derived CBD products in Boulder, Colorado.

Gordon pointed out that a manufacturer that sells a white-label product to another party could be sanctioned by the FDA if that retailer turns around and makes a health claim about it.

“You have to take these letters as a call to action, to know that you’re being watched,” Gordon said.

Omar Sacirbey can be reached at omars@mjbizdaily.com

John Schroyer can be reached at johns@mjbizdaily.com

Kristen Nichols can be reached at kristenn@mjbizdaily.com