Since the enactment of the 2018 Farm Bill, the use of hemp and CBD (cannabidiol) products has skyrocketed, transforming from niche wellness items to mainstream essentials that are widely available. These products, currently found at a variety of retailers including CBD stores, smoke shops, convenience stores, local supermarkets, and even gas stations, promise a range of health benefits that have captivated consumers seeking natural alternatives, from soothing anxiety and alleviating chronic pain to promoting better sleep and reducing inflammation. Store shelves are brimming with oils, edibles, creams, drinks, and more, each offering a slice of the wellness revolution that hemp has ignited. However, convenient access to these products may soon change in Ohio.
Senate Bill 86
With the introduction of Senate Bill 86, Ohio lawmakers are poised to regulate this flourishing hemp market in a similar way as Ohio’s new legal cannabis market. Sponsored by Senators Steve Huffman (R-Tipp City) and Shane Wilkin (R-Hillsboro), the bill aims to regulate intoxicating hemp products by restricting their sale to licensed cannabis dispensaries. The bill further seeks to regulate drinkable cannabinoid products by restricting their sale to establishments holding a liquor license or to licensed cannabis dispensaries.
Key provisions of SB 86 include:
- Regulates Intoxicating Hemp Products (IHPs): SB 86 defines an IHP as a hemp product containing more than 0.5 mgs of delta-9 THC per serving, 2 mgs of delta-9 THC per package, or 0.5 of total non-delta-9 THC per package. Under SB 86, all IHPs must be sold by adult-use cannabis dispensaries to those 21 years and older.
- Regulates Drinkable Cannabinoid Products (DCPs): SB 86 defines a DCP as (i) containing cannabinoids; (ii) the cannabinoids are solely derived from hemp; (iii) the product not containing more than 0.3% of any THC, does not contain more than 0.4 mgs of THC per fluid ounce, and contains up to 48 total fluid ounces in all containers included in a package; and (iv) the product is not an intoxicating hemp product. Under SB 86, DCPs can be sold only by retailers, including those with certain liquor permits or adult-use cannabis dispensaries, to those 21 years and older.
- Taxation: A 15% tax would be imposed on IHPs and an excise tax on a manufacturer’s sale of DCPs to distributors or retailers equal to $3.50 for each gallon sold.
- Testing and Compliance: Products must be tested and comply with standards for packaging, labeling, and advertising.
- Penalties for IHP and DCP Sale Violations: A violation of the prohibitions against selling IHPs or DCPs is a first-degree misdemeanor on a first offense, a fifth-degree felony on each subsequent offense, and a fifth-degree felony if the offense involves selling to a person under 21.
Opposition and Support are Vehement
The proposed legislation has faced significant opposition from the hemp and CBD industry. Retailers such as CBD store owners argue that SB 86 could devastate their businesses by eliminating up to 90% of non-intoxicating full-spectrum hemp products from their shelves. They warn that restricting sales to dispensaries could drive consumers to unregulated online markets, posing safety risks and reducing state tax revenue. Industry representatives have advocated for alternative solutions, such as enhanced labeling and age restrictions, rather than strict sales limitations. They further emphasize that most consumers prefer purchasing CBD products from traditional retail stores due to the stigma of shopping at a cannabis dispensary.
On the other hand, Ohio’s legal cannabis industry, poison control workers, and religious organizations have shown strong support for SB 86. They believe IHPs pose a significant threat to the integrity and safety of Ohio’s regulated cannabis market, arguing that these unregulated products can undermine consumer trust and safety, as they often lack proper testing and compliance with state standards and many times end up in the hands of minors, resulting in significant complications. By restricting the sale of intoxicating hemp products to licensed dispensaries, the bill would ensure that all cannabinoid products meet rigorous safety and quality standards and are sold to those old enough to use them. This consolidation would also help protect the investments made by licensed dispensaries and cultivators, who adhere to strict regulations and contribute handsomely to state tax revenue.
Up Next
SB 86 is presently under review in the Senate General Government Committee. The bill has sparked considerable debate, with both supporters and opponents presenting testimony to lawmakers. Further legislative action is anticipated as the committee continues to evaluate the potential impacts of the proposed regulations on Ohio’s CBD and legal cannabis markets.
