Three bills are backed by hemp industry leaders, while one has the support of the Missouri Cannabis Trade Association
BY: REBECCA RIVAS
Missouri Independent
Every time Missouri lawmakers have proposed legislation to essentially ban intoxicating-hemp products in the last few years, the hemp industry has mounted a united opposition to stop them.
Products like Delta-8 THC drinks can currently be bought everywhere from bars to coffee shops statewide.
Year after year, hemp business owners and distributors have asked the state to impose age restrictions and testing requirements, rather than ban the products outright.
“We don’t have any mechanism to regulate them right now, and so they’re in no man’s land,” said Steven Busch, owner of Krey Distributing, one of the state’s alcohol distributors. “And that’s our biggest problem right now — that there are no rules. The 21-plus rule isn’t even law, though everyone’s doing it.”
Now for the first time, leaders of the hemp industry are pushing their own legislation to establish business licenses and regulations.
But the industry is far from united.
Three bills have been pre-filed — one backed by Busch, one supported by the Missouri Beer Wholesalers Association and one backed by the Missouri Hemp Trade Association. Other bills are waiting in the wings to potentially be added as amendments.
The beer wholesalers’ legislation, sponsored by Republican state Rep. Barry Hovis of Whitewater, lays out regulations only for hemp beverages, which would regulate popular bar drinks like Missouri-based Mighty Kind cannabis seltzers. It would also establish the same three-tier distribution system that the alcohol industry has long abided by.
The bill backed by Busch and sponsored by Republican state Rep. Dave Hinman of O’Fallon would regulate beverages as well, but it also includes guidelines for edibles, vapes and tinctures.
The hemp trade association believes both bills set the maximum THC content for all items too low. The association also vehemently opposes the three-tier system.
“It creates a monopoly on behalf of the distributors,” said Craig Katz, spokesman for the Missouri Hemp Trade Association. “It may have worked over decades in the alcohol industry and they’re used to it, but it doesn’t really work for the hemp industry.”
It’s not only the alcohol industry that’s used to the system.
All three bills direct the Division of Alcohol and Tobacco Control to regulate hemp licensees, and the state agency has used the three-tier system since prohibition ended in the 1930s. It prohibits distribution companies from holding a license for retail or manufacturing facilities. Back then, it was intended to prevent market domination by restricting any one tier from having financial interest in another.
On the other end of the spectrum, Republican state Sen. Nick Schroer of Defiance has once again proposed legislation that would essentially ban a good portion of intoxicating hemp products outright and require the eligible ones only to be sold in regulated marijuana dispensaries.
His bill is supported by the Missouri Cannabis Trade Association.
Andrew Mullins, executive director for MoCannTrade, said all sides agree that unregulated, intoxicating products are a health and public safety risk. The “only real question” for policymakers, he said, is whether the state should establish a “dual, parallel, expensive system of regulation” for these intoxicating products, which often have the THC potency as those found in highly-regulated dispensaries.
“Hemp and marijuana come from the same plant,” Mullins said. “If it’s non-intoxicating, it’s hemp. If it comes from the cannabis plant and it’s intoxicating – it’s marijuana and Missouri law should treat it as such.”
‘No way to police it’
Busch and the hemp trade association worked together over the summer to write one piece of legislation, but then a rift over distribution and THC content severed the groups in September. And it’s evident in the nearly-identical language in the two bills.
“We were working with them for almost four months, trying to gather feedback and get in alignment,” Busch said. “One of their board members took our bill, our work product, and decided that they were going to use whatever parts of it they wanted.”
Katz doesn’t deny that they included some of the language, but said the association also sourced from other places.
Busch’s bill proposes to limit edibles to only 5 mg of THC per serving and beverages to 10mg of THC per serving.
The association’s bill would limit it to 100 mg of THC per serving, saying that some people who use the products medicinally require a higher dose.
Brian Riegel, owner of South Point Hemp manufacturer, said some of his customers use the products for arthritis and other pain.
“If they were taking something that’s been federally legal for the last six years,” he said, “in August they’re going back to being a criminal again.”
Katz said the three-tier system prevents small businesses from selling their products online to customers, and it might be difficult for them to get picked up by distributors.
Another major difference is that Busch’s proposal would essentially ban THCA flower, which makes up nearly 50% of the industry, Katz said, and is growing.
Missourians can walk into a CBD shop right now and buy something that looks just like the canisters of marijuana buds and joints sold in state-regulated dispensaries.
Busch said he has no problem with the beer wholesalers’ bill, as it’s closely aligned with his. However, he doesn’t believe Missouri lawmakers can “responsibly” stop at beverages.
“Let’s say that bill passed, then we still haven’t addressed what the governor identified this summer as illicit products being sold to children,” Busch said. “We’re not going to have anything different than we have right now.”
He believes this session will be different because all parties – from regulators to hemp retailers – believe that some legislation must get passed this year.
“The regulated marijuana side and our side,” Busch said, “we want to get something done because otherwise, every month or year that goes by… the market gets bigger and bigger. And there’s no way to police it.”
The state fights back
The argument that banning these products would harm thousands of small businesses in Missouri and further feed what critics call the marijuana “monopoly” was largely successful in blocking proposed legislation in the past.
However, the state has upped the stakes this year.
While Gov. Mike Parson’s attempt this summer to ban intoxicating hemp through an executive order remains on hold, administrative rules are currently making their way to accomplish that goal.
The Division of Alcohol and Tobacco Control proposed new state rules in November that would ban the sale of hemp-derived products for any licensed liquor retailer. Those rules must be approved by a legislative committee that oversees administrative rules.
The Missouri Hemp Trade Association’s attorney Chuck Hatfield submitted a public comment to the division, saying it doesn’t have the authority to implement a ban through rules — only legislation.
The division is authorized to “issue, suspend, or revoke liquor licenses, enforce Missouri’s alcohol and tobacco laws, and collect revenue from alcoholic beverage excise taxes and license fees,” Hatfield states in the comment.
“Until the legislature acts,” it states, “[the division’s] hands are tied with respect to hemp-derived products.”
The division was only one part of the enforcement efforts outlined in Parson’s order.
The Missouri Department of Health and Senior Services’ preliminary budget requests $877,000 to fund more food inspectors to implement Parson’s executive order.
Those funds would become available on July 1, if lawmakers approve the request as part of the state budget.
The department estimates that 40,000 food establishments and smoke shops and 1,800 food manufacturers could potentially be affected by the governor’s order, the budget request states, “but the majority of these facilities are at low-risk of requiring investigation.”
“It is estimated that all seven inspection staff can conduct 2,900-3,500 site visits annually,” it states.
The department also budgeted $160,000 to hire two full-time attorneys, in the event that business owners challenge enforcement actions.
