Cannabis Regulatory Update: DEA Says Marijuana Seeds Are Considered Legal Hemp If Below THC Limit, New York, South Carolina, Oklahoma

DEA Confirms Cannabis Seeds Are Considered Legal Hemp If Consisting Less Than 0.3% THC

The 2018 Farm Bill removed hemp from the definition of marijuana in the Controlled Substances Act (CSA).

Marijuana, on the other hand, remains federally prohibited, which can't be said for the plant's seed, regardless of how much THC might end up being produced in buds when the seeds were cultivated.

In response to an inquiry from attorney Shane Pennington regarding the legality of cannabis seeds, tissue culture, and "other genetic material" containing no more than 0.3 percent THC, the Drug Enforcement Administration (DEA) recently reviewed the federal statute and implementing regulations, reported Marijuana Moment.

"Marihuana seed that has a delta-9-tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis meets the definition of 'hemp' and thus is not controlled under the CSA," Terrence L. Boos, chief of DEA' s Drug & Chemical Evaluation Section wrote in the letter, dated January 6.

"Conversely, marihuana seed having a delta-9 tetrahydrocannabinol concentration more than 0.3 percent on a dry weight basis is controlled in schedule I under the CSA as marihuana."

What the DEA agrees upon is that people can possess cannabis seeds no matter how much THC the resulting plant might produce, as long as the seeds themselves have less than 0.3 percent delta-9 THC.

"In my view, the letter is significant because we continue to see confusion over the source rule—the argument that the legal status of a cannabis product hinges on whether it is 'sourced' from marijuana or hemp—influencing legislative proposals even at the federal level," Pennington told Marijuana Moment.

New York's $220 Billion Election-Year Budget Stuffed With (Cannabis) Tax Breaks

New York legislative leaders are poised to vote on a budget proposal that includes provisions to let marijuana businesses take state tax deductions that are available to other industries despite an ongoing federal ban.

On Thursday, a framework on which lawmakers and Gov. Kathy Hochul (D) worked to reach a consensus on unrelated issues was unveiled, following an extension of the budget deadline for a week, reported Marijuana Moment.

Both the Assembly and Senate budget measures were expected to pass in advance of an April 1 deadline.

The proposals would carve out an exemption to allow medical and adult-use marijuana companies to make tax deductions for business expenses and claim credits at the state level.

While being obligated to pay taxes, cannabis companies are currently barred from making certain federal tax deductions under an Internal Revenue Code section known as 280E due to conducting activities that consist of "trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act)."

To help resolve the issue, New York lawmakers in both chambers agreed to include language into their budget proposals and thus oblige the state not to tax cannabis companies for any amount that the federal government disallows under 280E "related to the production and distribution of adult-use cannabis products."

The move would allow New York marijuana businesses to see significant tax savings.

In anticipation of the launch of New York's adult-use market, which could happen this year, sales of buds and edibles are already flourishing in Manhattan.

Despite New York cannabis regulators proclaiming marijuana gifting to be illegal in October, stores that sell a product or service to consumers and then giving them cannabis as a "gift" have become a thing in the Big Apple.

This "gifting" practice has come to the attention of the Office of Cannabis Management's (OCM) Enforcement Unit, which recently sent "cease and desist" letters to more than two dozen businesses it found to be doing just that. Still, unlicensed marijuana dispensaries continue to multiply in New York City.

South Carolina Medical Cannabis Legalization Bill Heads To House Floor Following Committee's Approval

Considered to be one of the most restrictive medical cannabis laws in the country, South Carolina's measure that would legalize the plant passed a key House committee on Thursday.

The green light from the lawmakers came days after the panel heard hours of testimony on the reform.

The House Medical, Military, Public, and Municipal Affairs Committee advanced the legislation in a 15–3 vote, which is now heading to the House floor, Marijuana Moment writes.

Sponsored by Sen. Tom Davis (R), the bill was already passed by the Senate in February, on a bipartisan vote.

The Democrat-led committee decided to dismiss several out of over 100 amendments to the bill offered by Rep. Vic Dabney (R) on the grounds of being unfriendly and would likely only stall action on the legalization bill itself. Most of the amendments were subsequently pulled by Dabney himself.

However, the one amendment that the committee passed adds to the measure's packaging and labeling requirements, requiring that, among other things, marijuana products be labeled as Indica, Sativa or hybrid.

Several Republican members of the panel expressed concerns that legalizing medical marijuana would degrade society.

"My concern is, across the nation, wherever these bills have passed, a lot of problems develop," Dabney said. A friend in Washington State, he continued, told him that it "ruined" the state, with "people laying around on the streets…just stoned all the time."

Rep. Ryan McCabe (R) stressed that his "concern with this bill is that it encourages people to use marijuana to deal with their problems."

Still, another Republican lawmaker, Rep. Jonathon Hill (R), who supported the measure, challenged his colleagues to patients in their districts.

"Just imagine for a moment how much more afraid they must be, and it is literally a choice of life or death for them. Ask yourself: Why are you here if it's not to do right by them?"

Oklahoma Gives Support To Cannabis Legalization Ballot Initiative Following Legal Challenge By Competing Campaign

The Oklahoma Supreme Court has rejected a lawsuit challenging a marijuana legalization initiative that activists seek to place before voters on the 2022 ballot, reported Marijuana Moment.

New Approach PAC-backed marijuana activists kicked off 2022 by filing a marijuana legalization initiative that would allow adults 21 and older to purchase and possess up to one ounce of cannabis, grow up to six mature plants, and six seedings for personal use.

Jed Green, director of Oklahomans for Responsible Cannabis Action (ORCA) - a separate campaign that filed a pair of 2022 ballot initiatives to legalize adult-use marijuana and remodel the state's existing medical cannabis program in October - sued the campaign supported by the New Approach PAC.

He claimed that it's unconstitutional under a single-subject law for ballot initiatives and that the summary that would be presented to voters is misleading.

"State Question No. 820 is legally sufficient for submission to the people of Oklahoma. Petitioner Jed Green has failed to meet his burden in establishing that State Question No. 820 is clearly or manifestly unconstitutional and that the gist of State Question No. 820 is misleading," a majority of the justices said. "The Court assumes original jurisdiction and denies Petitioner's challenge to the constitutionality and sufficiency of State Question No. 820."

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