Michigan regulator says no to hemp-derived THC

Regulators in Michigan announced on Friday that a plan to allow hemp-derived cannabinoids to be processed into THC would be withdrawn from consideration. The announcement came just two days after the Michigan Marijuana Regulatory Agency (MRA) was renamed and given new authority over the state’s hemp industry, under an executive order issued by Gov. Gretchen Witmer earlier this year.

Under the proposed rules announced by the MRA in January, hemp farmers would have been allowed to sell their crops to licensed cannabis processors, who would then use a laboratory process to convert cannabinoids like CBD into THC. The agency, now called the Cannabis Regulatory Agency, announced on Friday that the plan would not be approved.

“After receiving a significant amount of public comment regarding safety concerns and the lack of scientific and public health data related to the conversion process outlined in the proposed industrial hemp rules… the Cannabis Regulatory Authority (CRA) has withdrawn this rulemaking request,” according to the agency announced on Friday.

The plan would have given Michigan’s hemp farmers a new outlet for their crops and opened up the state’s regulated cannabis market to products containing hemp-derived THC. But the proposal would also have created a more competitive market for licensed cannabis growers, who are subject to stricter and more expensive regulations than hemp farmers.

Cannabis industry against proposal to allow hemp THC

The plan was opposed by representatives of the licensed cannabis industry, including Denise Policella of the Cannabis Business Association of Michigan, a trade group made up of licensed cannabis breeders, processors and distributors. She told online news site MLive that the process of converting hemp cannabinoids into CBD produces unknown by-products that could be harmful to consumers. Although the main point of the appeal was based on expressed consumer safety concerns, the lawyer and co-founder of the trade group acknowledged that other factors also played a role.

“Of course there’s a business component,” Policella said.

Opponents of the plan also noted that Michigan’s small hemp farmers were unlikely to be the beneficiaries of the proposal. Instead, larger and more efficient out-of-state hemp farms would likely supply the biomass for conversion to THC.

“The industrial hemp portion of that would never come from Michigan,” Policella said. “Michigan can’t compete with Kentucky and North Carolina in hemp. They have a year-round growing season, which we don’t have. They have 100,000 acres of hemp farms, which we don’t have in Michigan.”

After the proposed rules were announced earlier this year, Policella said the plan would bring about “a huge amount of hemp imports into Michigan from across the country, which will bring the price of marijuana and hemp down to almost nothing.”

“Margins for marijuana products are going to be so low that this, in turn, will put dispensaries out of business,” Policella said in February.

Friday’s announcement that the proposal to allow hemp-derived THC products in the licensed cannabis market came just two days after Whitmer’s executive order reorganizing state cannabis regulators. As part of the reorganization, the MRA became the CRA and assumed regulatory responsibilities for hemp processors, distributors, and retailers. The Michigan Department of Agriculture and Rural Development will continue to monitor hemp cultivation in the state.

“This administrative change will help Michigan continue to lead the country in its approach to cannabis by growing the hemp and marijuana economy, creating jobs and investing in local communities,” CRA Executive Director Andrew Brisbo said in an agency statement. “The new CRA will pick up where the MRA left off – continuing to establish Michigan as the national model for a regulatory program that stimulates business growth while ensuring safe consumer access to cannabis.”