Va. legal landscape shifts as cannabis support grows
By Jeff Raines and Morgan Edwards
Capital News Service
RICHMOND -- “We do grams, eighths, quarters, half ounces, pounds, wholesale pounds -- however you want it,” Jacob Stretch said, standing between crates of dried hemp in his living room that doubles as his hemp processing and drying facility. Stretch, owner of Chesapeake Blue, just finished his first season growing industrial hemp as a registered grower and processor on his family’s farm.
Industrial hemp is poised to be a fast growing sector of agriculture in Virginia. Hemp advocacy group Vote Hemp estimates 2017 retail sales of hemp products neared $820 million nationally and will continue to grow.
Hemp is a versatile material that can be used in foods and beverages, personal care products, nutritional supplements, fabrics and textiles, paper, construction materials and other manufactured goods, according to a report from the Congressional Research Service.
In an October press release, Gov. Ralph Northam announced Virginia’s first commercial industrial hemp fiber processing facility. Appalachian Biomass Processing, in Wytheville, will create 13 new jobs and purchase more than 6,000 tons of Virginia-grown industrial hemp over the next three years, at a value of more than $1 million, the governor stated.
“I am committed to pursuing every path that will attract economic prosperity to our rural communities, and hemp production opens up a wealth of opportunity to bring new jobs and new business to Virginia,” Northam wrote.
The processor will mainly create hemp hurd, a woody fiber extracted from the plant stalk to be used for animal bedding. Hurd can also be used to make industrial items such as hemp-based concrete and hemp-derived plastics.
In 2018, when hemp could only be grown for research purposes in Virginia, there were 135 acres of hemp planted and about 85 registered growers, according to Erin Williams, senior policy analyst with the Virginia Department of Agriculture and Consumer Services. As of Nov. 15, VDACS had registered 1,183 industrial hemp growers, 262 processors and 117 dealers, Williams said. Nearly 2,200 acres of hemp were planted in Virginia this year. The economic impact of industrial hemp in the state has yet to be determined, Williams said. The harvest season has just finished and crops are being sold to processors.
“So we should know soon what this past growing season's impact will be,” Williams said. “We're going to conduct a grower survey towards the end of the year and hopefully have some data at the beginning of next year.”
When the 2018 federal Farm Bill went into effect, industrial hemp was listed as an agricultural commodity and removed as a controlled substance under the Controlled Substances Act. It is now placed under United States Department of Agriculture regulation. The bill also allowed state agriculture departments to submit plans for the regulation of hemp cultivation to the USDA.
VDACS expects to submit its state hemp production plan to the USDA before the end of the year, according to its website. It is likely there will not be major issues with the plan, according to Tyson Daniel, a trial lawyer and founder of Virginia Hemp Lawyers, a law firm specializing in the hemp and cannabis business.
On the VDACS website, there is a list of applications and guidelines for the industrial hemp grower registration, industrial hemp processor registration and industrial hemp dealer registration. Each registration costs $50 annually and one person can have all three registrations.
“It will be interesting to see if it stays at that rate,” Daniel said. “Compared to some other states, it is a very reasonable rate.”
An industrial hemp grower registration in Maryland costs $250. In North Carolina there is a $250 initial fee with an annual fee of $250 for less than 50 acres or $500 for more than 50 acres. Additionally, growers must pay $2 per acre of hemp or $2 per 1,000 square feet in a greenhouse of hemp.
Stretch, who is also a registered processor, said he was approved for his grower registration in around 40 days. Jacob Williamson, owner of Hens and Hemp, said he is registered as a grower and is on his way to becoming a registered processor. Williamson said having both permits is worthwhile because of their low cost and the extra level of protection it provides -- since growing and then drying, trimming and packing hemp could be considered processing. Williamson, like many other small farmers, mainly grows hemp to be sold as CBD products.
Defining the difference between hemp, marijuana and CBD
In its infancy, the Virginia hemp industry is not without issues -- namely in defining the difference between legal industrial hemp and illegal marijuana. There is also general confusion surrounding hemp and hemp products derived from the cannabis plant, namely CBD. CBD is considered non-intoxicating and touted to have multiple medical benefits. It is sold in a variety of ingestible and topical products, and also in flower form that looks identical to marijuana.
Daniel explained the distinction between legal cannabis derived products and marijuana.“If you are going to draw a diagram, put cannabis at the top, hemp on one side, marijuana on the other,” Daniel said. “They are both the cannabis plant, it's just the level of Delta-9 that is different.” Delta-9 is the THC molecule associated with intoxication or “getting high.” It is commonly referred to as THC instead of Delta-9 THC.
The non psychoactive version of THC is THC-A; it does not produce a high. The molecule is considered the precursor to THC, and once heat is applied THC-A is converted into THC, say through the use of a vaporizer.
The combined amount of THC-A and THC present in hemp is referred to as total, whole, or max THC.
Legally, when hemp reaches a THC concentration of more than 0.3% on a dry weight basis, it is classified as marijuana. According to the VDACS industrial hemp registration guide, anything grown above the 0.3% limit will be destroyed, in accordance with Virginia code.
Growers contest how the hemp is tested to determine that 0.3% and its validity as an indicator of whether or not hemp has crossed into being marijuana. Daniel said the biggest issue right now has to do with testing; whether it is strictly THC or combined THC and THC-A.
Williamson said one passage of the USDA guidelines sounds like it’s talking about THC and another passage says whole THC, which would include both.
"That's why everyone freaked out about the USDA guidelines," he said. "All the sudden it was total THC that was 0.3%."
CEO and founder of East Coast Cannalytics, Rebecca Hobden, said the VDACS testing method for appropriate levels is to heat up the hemp. It then goes through a heating process which converts THC-A into THC. So if a crop has combined THC-A and THC, the testing process will increase the actual THC, potentially raising it over the acceptable levels allowed.
Williamson harvested his hemp plants at 13% CBD and 0.1% THC. “I probably pulled them a little early because I was nervous, but that's fine --13% is plenty,” he said.
Hobden explained that as THC levels increase in a plant CBD levels increase. She said farmers will try to get as close to the allowed 0.3% THC limit as they can to raise CBD levels. Hobden said hemp with CBD levels closer to 20% is more desirable for farmers, as it has a higher market value.
Stretch said the 0.3% limit is arbitrary and could be a colossal loss for farmers.“The number 0.3% was put on there by who, you know? Who decided 0.3% was the right number?”
“I've heard more experienced growers talk about how it can creep up in the flower period and then at a certain point, it will go back down,” Stretch said. “So, if you harvested at the wrong time you run a higher risk of being hot.”
The limit needs to be raised from 0.3%, according to Rebecca Caffrey, founder and chief scientific officer of Delta-9 Scientific, a cannabis testing lab based outside of Richmond.
“There's no functional difference between something that's 0.3% THC and something that's 1% THC,” she said. “Neither one of them is going to get you high, no matter how hard you try.”
Caffrey said she has tested thousands of hemp samples for “honest” farmers. “They are spending beaucoup money on hemp seeds and hemp clones, and you know, then it comes back and it's like 0.57% [THC],” she said. Caffrey believes farmers should not be penalized for that.
Williamson said he didn’t think VDACS tested many hemp farmers to see if their hemp was “hot,” meaning above the 0.3% limit.
“I guess they originally wrote the law because they thought people were going to pretend to grow hemp and then grow real bud ... I thought there would be more of that, but I don't see anybody doing that,” he said.
VDACS used random testing to track THC levels. Hobden and Caffrey believe VDACS did not test many farmers.
“I was in a meeting of probably about 40 farmers and asked how many people actually got tested and one person raised their hand,” Hobden said.
Hemp and CBD products in the marketplace
The General Assembly this year approved a bill that allows CBD and THC oil with up to 10 milligrams of THC to be legally sold, with a doctor’s recommendation, through an approved state pharmacy. THC above 0.3% is federally illegal and CBD of any level is legal.
However, the Food and Drug Administration does not allow CBD to be marketed as a dietary supplement or be advertised as having medical benefits. The FDA has only approved one CBD product, for epilepsy. The agency recently issued a consumer update, noting that “there are many unanswered questions about the science, safety, and quality of products containing CBD.”
Mike Betts, owner of the online hemp and CBD store Red Beard Alternatives, believes CBD offers relief from anxiety, depression and symptoms of post-traumatic stress disorder.
Betts is a retired Marine Corps veteran who for years battled to treat physical and mental wounds sustained while serving. Betts said he turned to hemp and CBD after finding no relief in prescribed medications and self-medicating. He uses hemp products and grows his own hemp plants as a form of therapy in itself. He said nurturing them from a tiny seed has given him something to look forward to and it is something he wants to share with fellow veterans.
He said the purpose of Red Beard Alternatives is to provide veterans access to alternative forms of therapy, the proceeds from his online market help fund alternative therapies for veterans.
“Whether we give them a greenhouse or a gym membership… in order to fund that mission we’ve created an online farmers market where other hemp farmers can showcase their products and sell them to consumers,” Betts said.
However, he said is not allowed to advertise his products due to legal restrictions and a wariness from various social media sites in advertising products that closely resemble marijuana. He said many consumers are unfamiliar with hemp and often confuse it with marijuana. Betts sees the next step in expanding his business centered on product education.
Betts alongside growers Williamson and Stretch hope to see more defined regulations and loosened restrictions for growing and selling hemp and CBD products. Daniel said the easiest and fastest way for this to be accomplished would be through legislation in the General Assembly.
Legal landscape rapidly shifting as cannabis support grows
Del. Steve Heretick, D-Portsmouth, said he has encountered a groundswell of support for changing state law.
“Over 80% of all Virginians, regardless of political stripe, advocate or support the decriminalization of simple possession,” Heretick said. “You can’t get 80% of the people in Virginia to agree on anything, but they agree on that much.”
The statistic Heretick quoted refers to a September University of Mary Washington study. The poll noted that 80% of Virginians 25 and under support legalization, not all Virginians. However, 61% of all Virginians are in favor of legalization, according to the poll.
Heretick said he plans to form a “cannabis caucus” -- the second state caucus of its kind in the country -- “to put all of the stakeholders at the same table.” He believes the caucus will foster productive conversations on how to move the hemp industry forward and how to eventually legalize adult marijuana use in the state.
“I think in creating the cannabis caucus we’re trying to create an organization that we can invite all the stakeholders to participate in,” Heretick said. “Not only members of the legislature, but members of the farming community, the community that would do distribution advertising and dispensing.”
Heretick sees decriminalization of simple possession as the first step on the journey to legalization and is confident that the General Assembly will pass Senate Bill 2 or a similar bill on the issue in 2020. SB2 specifically calls for the decriminalization of simple possession of marijuana; turning the offense into a civil penalty with a fine of no more than $50 attached. Heretick said he and his colleagues want to make sure that legalization in Virginia is thoughtfully enacted.
“I really don’t think that legislatively we’re doing anybody any favors by legalizing marijuana and then having nothing in place to do that effectively,” Heretick said. “We’re trying to avoid the obvious problems that have plagued other states that have beat us to the punch in terms of legalization.”
Daniel explained the differences between decriminalization and full legalization. He said the short answer is that decriminalization means it is no longer being prosecuted.
What separates decriminalization from legalization is that legalization provides a mechanism for marijuana to be brought to market, according to Daniel. “But we haven't set up a mechanism for it to go to retail sale,” Daniel said. Regardless, he believes people would work around this.
The gifting system in Washington D.C. is an example of creative solutions when marijuana is legalized but no system is established to regulate the buying and selling of it. People can purchase a shirt, sticker or even cookies -- that comes with a free gift of marijuana.
“This is a civics lesson,” Daniel said. “We don't need permission in our country to do something. We act under the premise that unless it's prohibited specifically by law, then we can do what we want to do.”
Hemp Becoming Less of a Partisan Issue
“I don't think that it’s so much a partisan issue,” Daniel said. “Frankly, I think both sides of the aisle see it as an enormous revenue producer and a gigantic cost saver in terms of the amount of money that’s spent on the prosecution and enforcement of marijuana laws.”
Virginia Attorney General Mark Herring expressed his support for decriminalizing cannabis in an op-ed for the Daily Press in June, writing that criminalizing minor marijuana possession has major “human and social costs” that disproportionately affect minorities and people of color.
“That is why Virginia should decriminalize possession of small amounts of marijuana, address past convictions and start moving toward legal and regulated adult use,” Herring wrote.
In a November interview with Capital News Service, Herring said that while he acknowledges the economic benefits of legalization, he is more concerned about the criminal justice aspects of the state ban on legal marijuana.
“Virginia is moving in the wrong direction,” Herring said. “We have 29,500 Virginians who were arrested for marijuana possession in 2017. That is a huge number and it is not working.”
Herring stated in his op-ed that citizens arrested for marijuana possession could “still be stuck with a criminal record, lose their job, student aid, certain public benefits including housing assistance, and it can even affect custody rights.”
Jenn Michelle Pedini, executive director for the nonprofit Virginia National Organization for the Reform of Marijuana Laws, said the 2020 General Assembly session could be incredibly consequential for the future of the cannabis industry in the commonwealth and feels that “several very historic” bills could be passed.
NORML has worked since the 1970s to legalize non-medical marijuana in the U.S. and advocates for responsible, adult cannabis use without penalty.
“Last year, we became the fourth state in the nation to allow school medical professionals to administer medical cannabis to registered kids,” Pedini. “We really are doing big things in Virginia -- it just largely goes unnoticed.”
Back on the farming side, Williamson and Stretch are finishing what they consider to be a successful first harvest. This winter will be used strategize how they can improve their operations and accommodate more plants. Williamson said that smaller farmers like themselves are working cooperatively to purchase wholesale seeds and streamline operations. Williams said VDACS expects Virginia hemp to grow in acreage as growers ramp up their operations in the spring.
Christopher Brown contributed to this report.