The CBD business in Minnesota Could be Doomed according to Minnesota Cannabis Association

A precedent-setting ruling from the Minnesota Court of Appeals has the potential to upend the state’s burgeoning hemp industry, with impacts on both consumers and retailers.

On September 13, 2021, the appellate court upheld a drug conviction based on evidence of an unspecified amount of THC in vape liquid. The ruling suggests that hemp laws allowing trace amounts of THC may not protect people who possess hemp-derived liquids in any form, including popular extracts such as CBD oil.

Unless the ruling is challenged or legislators amend state laws, the court’s interpretation of Minnesota law could lead to hesitation and fear among people who use hemp extracts to relieve pain and anxiety. It also puts the businesses who sell such products in a precarious position.

Implications for hemp consumers and retailers

“If the ruling is upheld, it has the possibility of destroying the industry as we know it,” said Elliot Ginsburg, an attorney for the industry organization Minnesota Cannabis Association. “It would allow the sale and possession of hemp flower only and would criminalize the sale and possession of extracts.”

For consumers, it could mean buying vape cartridges might put them at risk of criminal charges — but also CBD oil, sleep aids containing CBN, tinctures, gummies and other edibles.

As for the hemp industry: “It really puts everybody in the industry at risk,” Ginsburg said, “whether they’re manufacturers, processors or retailers selling CBD products. Any product derived from hemp other than hemp flower is potentially a controlled substance under this ruling, and anyone in possession or selling it is potentially subject to criminal charges.”

And hemp has become a big industry.

“This could destroy many businesses in Minnesota,” said Steven Brown, Board Member of the Minnesota Cannabis Association. “Not just THC businesses but tobacco shops and even grocery stores. According to the way this trial went, all of them are doing something completely illegal, but it shouldn’t be. That wasn’t the intent of the 2018 Farm Bill.”

Ginsburg echoed the scale of impact this decision could have.

“Even Whole Foods has CBD products,” Ginsburg said. “I don’t see [large-scale prosecution] as something that’s likely to happen. But it will really depend on what law enforcement chooses to pursue.

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About the Minnesota Cannabis Association

The Minnesota Cannabis Association organization providing advocacy, education, and business development opportunities to advance the growth and vitality of Minnesota’s cannabis industries from seed to sale. It provides its network of farmers, processors, manufacturers, retailers, distributors, and service providers with vital industry news, valuable business-to-business opportunities, and influence to shape regulatory and public policy decisions.