How are Minnesota businesses dealing with the state’s recent hemp law change, and what do state officials and legal experts think will happen next? On October 25th TCB hosted a conversation about the intricacies and ramifications of July’s surprise law change that suddenly made it legal to sell foods and beverages containing up to 5 milligrams of any form of THC, as long as the substance is hemp-derived in Minnesota to make them consume, manufacture, distribute, which suddenly opened the door to the production and sale of THC beverages and edibles. Below are four insights from our panelists. Watch a replay of the entire virtual call to learn more.
Anthony Cortilet, Director of the Department of Agriculture’s Industrial Hemp Program
Nicola Peterson, CEO, Verist LLC
Jason Tarasek, Founder, Minnesota Cannabis Law
Tom Whisenand, CEO and co-founder of Indeed Brewing
Allison Kaplan, Editor-in-Chief, Twin Cities store with co-editor Winter Keefer
Plea for responsible regulation
Currently there is minimal regulation and no licensing structure for retailers, said Jason Tarasek, a cannabis attorney with the Minnesota Cannabis Law.
“I’m confident that when the legislature reconvenes in January, we’ll put in more guard rails because right now it’s really the wild west,” he said. “Anyone can enter this market. Anyone can sell it. You know a lot of my customers are, quite frankly, a little upset that they’re following the law, but maybe the smoke shop down the street isn’t. It doesn’t seem fair to them that they take consumer safety seriously and maybe someone else doesn’t. So we need to tighten that up, I think for the benefit of the general public, consumers and industry.”
Being already established helps companies adapt to changing laws
THC derived from hemp is no different than regular THC, said Nicola Peterson, co-owner of Verist, a line of THC and CBD products grown and manufactured on Peterson’s family farm. Prior preparation for potential adult-use marijuana legalization made it easier for Peterson’s family farm to rotate and mainstream hemp-derived THC products when the law change went into effect. The business is also poised to spin again if adult-use marijuana is legalized.
“For us, being a hemp breeder meant adding another slant to our already established CBD lineage, it wasn’t that big of a pivot,” she said. “We had heard rumors in the legislature that this might be coming down the pipeline, so as hemp growers and already with a CBD line, we’re always kind of thinking in the back of our minds about when adult use (marijuana) will become legal in our state. We think it’s inevitable that it will happen.”
Be careful. Do your homework. get a lawyer
There’s a lot to learn about the complexities surrounding the aid and THC markets, said Anthony Cortilet, hemp program manager at the Minnesota Department of Agriculture. Cortilet recommends companies entering the market hire a lawyer.
THC, the psychoactive component in marijuana plants, became part of the legal definition of hemp after the 2018 Farm Bill went into effect. The law, which went into effect in 2019, removed hemp from the Controlled Substances Act. The law defines hemp as a plant that contains no more than 0.3% delta-9 THC in its dry weight form.
“There is a lot to learn here. Between the number below 0.3% and above 0.3%, it’s a whole different world and you have to take it seriously,” Cortilet said… “Be very aware of who you’re talking to. I’m sure a lot of the people here are entrepreneurs and have dealt with people trying to sell them everything under the sun.”
Marketing opportunities are limited
When Indeed Brewing CEO Tom Whisenand posts information about the brewery’s new Two Good THC seltzer on Instagram, it is immediately deleted. Word of mouth and Indeed’s taproom in Minneapolis, which was visited by about 200,000 people in a year, was the only way the company could promote its own products.
Both Indeed and Verist have encountered problems when attempting to promote their products. You cannot run TV or radio commercials. Social media sites also remove posts promoting these products.
“You won’t be seeing a billboard for Indeed’s THC products anytime soon,” Whisenand added.