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Minnesota Marijuana Regulators Destroy Hundreds Of Thousands Of Dollars’ Worth Of Illegally Sold Hemp Flower



“The places that have been doing it have been reported by those who are better actors over and over and over and over.”

By Peter Callaghan, MinnPost

Since Minnesota began cracking down on the illegal sale of raw cannabis flower in many registered hemp retailers, its agents have confiscated a lot of product worth a fair amount of money.

According to numbers released by the Office of Cannabis Management (OCM), inspectors have confiscated and destroyed 12,094 units of flower—such as bags, jars or pre-rolled joints—with an estimated retail value of $278,000. The illegal products were taken from 58 different retail locations and amounted to nearly 73 pounds of raw cannabis flower.

While it has been legal to possess and use cannabis in Minnesota since last August, it is not yet legal to sell it and won’t be until sometime next spring. And while many hemp-derived low-potency products like gummies and beverages have been legal to sell since the summer of 2022, raw cannabis flower falls into a gray area. That is, if it has low THC content, it could be legal. But most of what has been sold exceeds the potency levels that separates hemp from marijuana.

If the confiscated products have likely been illegal under both the 2022 hemp-derived products law and the 2023 recreational cannabis law, why did it take this long for the state to crack down? Blame an inadvertent gap in the 2023 law that attempted to provide temporary state regulation of hemp products while the new Office of Cannabis Management was being set up.

The Office of Medical Cannabis was given temporary say over the two-year-old hemp-derived market but was not given control over raw flower, only products made from the plant like gummies and drinks.

That gap identified by regulators late last year allowed some stores to sell the flower that looks, smells and intoxicates like marijuana. At the same time, other retailers who wanted to follow the new law were left at a competitive disadvantage.

The raw flower was often sold as a hemp plant with high concentrations of THCA (tetrahydrocannabinolic acid). The same products are offered for sale from out-of-state businesses and mailed to customers where cannabis is not legal, or not yet legal as in Minnesota.

Because of the regulation gap, retailers would tell inspectors the products for sale in their stores were legal hemp and the same inspectors did not have the authority to take samples for testing. Yet a test arranged by MinnPost earlier this year found that the flower for sale far exceeded the THC concentration levels that define hemp and was, in fact, high-potency cannabis.

State regulators created a workaround to begin ridding stores of raw flower that exceeded potency limits. That solution was an interagency agreement where medical cannabis inspectors could essentially be deputized by OCM to enforce the ban on raw flower sales until licensing occurs next spring.

Since that arrangement began March 7, the inspectors, who had worked with retailers to make sure hemp-derived products were legal, could now confiscate raw flower that was being sold. While some flower might have THCA levels below the legal limit in its raw form, state law requires an assessment of “total THC” which takes into account all cannabinoids after they have been burned via smoking or vaping. It is that “decarboxylation” process that converts THCA to THC.

Inspectors both reviewed the certificates of analysis that are required of all hemp-derived products on sale. They also had access to a mobile testing lab, the OCM reported in March. An enforcement notice to retailers threatened fines “in excess of $1 million.” It even said violators might endanger their chances of getting recreational licenses next year. Neither fines nor citations have been issued, OCM reports.

The updated cannabis law signed by Gov. Tim Walz (DFL) last week includes language pushed by legislative Republicans that tells the OCM that it cannot issue cannabis business licenses next year to “any person or business who violated this chapter after August 1, 2023.” It does allow the OCM to disregard the directive if it finds the violation was a mistake, was made in “good faith” and did not involve gross negligence.

It also says that OCM can’t give licenses to anyone convicted of illegal sales or fined for illegal sales after August 1, 2023, which was the day that possession and use of cannabis became legal in Minnesota.

The revisions to the state’s cannabis law signed last week also accepted a request by OCM interim director Charlene Briner to move all of the operations of the Office of Medical Cannabis—including regulation of the hemp-derived market—to the Office of Cannabis Management in July. That will make the interagency agreement unnecessary after recreational cannabis, medical cannabis and low-potency hemp-derived are combined into one agency.

David Mendolia owns St. Paul Cannabis and is one of the hemp retailers who complained to the OCM and the medical cannabis office for not regulating raw cannabis flower. He said he is pleased that the workaround had led to getting the illegal product out of stores but is puzzled as to why the agency did not issue citations.

Mendolia said stores that were trying to follow the letter of the new hemp law were often visited by customers looking for flower. Not offering it for sale put his store at a competitive disadvantage.

“The places that have been doing it have been reported by those who are better actors over and over and over and over,” Mendolia said.

Was THCA flower legal? The plants often contained lower levels of the intoxicating chemical THC so that they could meet the legal definition of hemp. That is, under federal law, plants are federally legal hemp if they contain less than 0.3 percent THC by weight and are federally illegal marijuana if they contain higher concentrations. But when smoked or vaped, the same plants that test below the threshold in raw form produce illegal concentrations of THC following “decarboxylation.” State law measures what is called total THC that measures all cannabinoids, not just THC.

The legality of THCA had been a gray area, allowing it to be sold on the internet and mailed to customers. But a letter this month from the federal Drug Enforcement Administration to a lawyer who specializes in cannabis law provided some clarity. THCA is marijuana, not hemp, the letter stated.

“The ‘decarboxylation’ process converts Delta-9 THCA to Delta-9 THC,” wrote Terrance Boos, the DEA’s chief of drug and chemical evaluation section, in a letter to Washington, D.C., attorney Shane Pennington. “Thus, for the purposes of enforcing the hemp definition, the delta-9-THC level must account for any delta-9-THCA in a substance. Accordingly, cannabis-derived THCA does not meet the definition of hemp under the (Controlled Substances Act) because upon conversion for identification purposes as required by Congress, it is equivalent to delta-9-THC.”

That means that the THCA flower that had been sold in Minnesota—and can still be found on the web—likely is illegal federally. Whether the DEA, or state police agencies in states without recreational marijuana law, will enforce that definition is unknown.

This story was first published by MinnPost.

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