How CAOA Might Hurt the Hemp Industry

Senators Cory Booker (D-NJ), Senate Majority Leader Chuck Schumer (D-NY), and Ron Wyden (D-OR) published a 163-page discussion draught of legislation known as the Cannabis Administration and Opportunity Act last summer (CAOA). The CAOA wants to legalize cannabis, eliminate the federal government’s long-standing ban on marijuana, and reinvest in communities of color who have been unjustly singled out in the War on Drugs.

Although the CAOA draught law represented a significant advance toward the federal legalization of cannabis, its proponents understood that the proposed wording needed to be improved and urged interested parties to provide their input to generate a solid final proposal.

After receiving various comments, the sponsors submitted the final draught of the CAOA in the upper house on July 21, 2022.

Despite significant improvements, the final document still proposes laws that harm the cannabis sector.

Also read: Senate President of New Jersey Introduces Bill to Legalize Interstate Marijuana Trade

The laws that, if adopted in their current form, would obstruct the development of the hemp industry’s economy are relevant today.

Among these provisions are:

  • Defined in Sections 803 and 804: Hemp

As mentioned here, states have been struggling to find a solution to the troublesome situation of unrestrained intoxicating goods that formally meet the federal definition of hemp under the Agriculture Improvement Act of 2018.

The Ninth Circuit Court of Appeals stated in May of this year that the 2018 Farm Bill made delta-8 tetrahydrocannabinol (Delta-8 THC) derived from hemp legal and that “[i]f… Congress inadvertently created a loophole legalizing vaping products containing delta-8 THC, and then it is for Congress to fix its mistake.”

The CAOA seeks to correct this error but, in doing so, sets a THC threshold that would be detrimental to non-intoxicating hemp-derived goods.

In its present version, the CAOA stipulates that owing to its intoxicating properties, goods created or derived from hemp contain more than 1 milligram of total THC per 100 grams of dry weight (or 0.001% total THC). Would be prohibited from the federal definition of “hemp.”

Due to the limits of existing testing procedures and technology, this level is an arbitrary and unachievable criterion that would relegate most non-intoxicating hemp-derived products to the adult-use cannabis market. States like Colorado, which have chosen to take on the challenging regulation of these intoxicating hemp-derived products, are aware of the complexities and subtleties involved with these testing standards and THC limits and have established commissions of industry experts to develop regulations based on industry standards and science.

To guarantee a meaningful and valuable differentiation between non-intoxicating and intoxicating hemp-derived goods, such an approach should also be followed at the federal level.

The CAOA’s stringent rules, which are only appropriate for intoxicating goods, will undoubtedly kill the development of the hemp business if they are not altered.

  • Section 504: Controlling CBD Derived from Hemp

The CAOA offers a legal framework for selling CBD generated from hemp but not from other derivatives.
Although cannabidiol (CBD) was the first and could still be the most well-known hemp derivative on the market, additional hemp-derived substances, such cannabigerol (CBG) and cannabinol (CBN), have been researched and are becoming more prominent among Americans.

The safeguards and guidelines envisioned by the CAOA for CBD products should be extended to other non-intoxicating hemp components to guarantee that these products remain legal and secure for consumers.
In addition, the new federal legislation intends to place stricter and more demanding safety assessments on hemp-derived CBD products than on other botanical substances.

Several hemp stakeholders have long pushed for this limited regulatory approach. Still, it ignores that, over the last four years, a sizable and flourishing CBD food and beverage sector has emerged in many states that have chosen to legalize and regulate CBD products.

The CAOA also does not comply with laws and regulations passed by the international community and other nations that have determined that CBD products are safe for consumption by people and can be marketed as novel foods as long as they adhere to particular safety and testing requirements.

Finally, there is a small market for hemp biomass used to make nutritional supplements. Allowing CBD in foods and drinks would win over major, well-known merchants and significantly boost the industry’s economic engine. A renowned organization researching cannabinoids, BDS Analytics, reportedly predicted that sales of CBD beverages alone will total $1.2 billion by 2023 and $1.7 billion by 2024.

All of this is to say that severely restricting the sale of CBD products as dietary supplements and imposing arbitrary THC limits would not only decrease the number of options available in the market but would also unfairly disadvantage the hemp industry by placing unreasonable restrictions on their products.

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