The Cannabis Alliance - Town Hall - Bridging the Divide Between Cannabis and Hemp
(August 15, 2024)

Here are some observations from the Thursday August 15th Cannabis Alliance Town Hall on “Bridging the Divide Between Cannabis and Hemp.”

My top 5 takeaways:

• The Washington State Department of Agriculture (WSDA) Certified Cannabis program was envisioned as an organic-like program for cannabis, but Organic Program Manager Brenda Book described encountering a number of setbacks including funding issues, regulatory changes, and a hiring freeze (audio - 10m, video - The Cannabis Alliance, summary).
  • A 2017 law advised WSDA to create a program which defined a state organic-equivalent standard for cannabis, as ‘organic’ is a federal labeling term, but their rulemaking project stayed at the CR-101 stage due to reported budget limitations at the department.
    • A 2018 presentation to legislators initially forecast the ‘Certified Cannabis’ standard would be completed by spring 2019.
    • By February 2020, Washington State Liquor and Cannabis Board (WSLCB) staff had made note of the delay.
    • In March 2021, Book commented on the project during a webinar and lawmakers requested an update on the effort, leading to an October 2021 work session on the matter and commitment by some members to budget money to finish the project.
    • The 2022 supplemental operating budget included $200,000 to WSDA, “provided solely for rulemaking for a voluntary cannabis certification program that is consistent with the department's existing organics program.” WSDA leaders provided an update on the work in June 2022.
  • During the town hall, Book explained that WSDA staff created a logo and marketing plan for the Certified Organic Program, but did not initially request funding. She described how it was intended as a fee-for-service program like all organic-certified operations regulated by the department. “Our fees are anywhere from $1,000 to $25,000,” she told the group, “we do not receive any tax dollars for that. And so we…have to recoup all of our costs at that point."
  • Staff were “hit with some big financial issues within the program” resulting in delays, as well as the COVID-19 pandemic, and federal regulatory changes that Book said made the agency sound "like a broken record" to stakeholders. She noted that thanks to the “good work of a lot of folks that are probably on this call of helping us to get some, a little bit of funding to where we could get that back on the table and start work on that rulemaking project.”
  • Book noted that the WSDA had recently increased its staff and was working to get a revised CR-101 filed to "quickly get that CR-102 so that we can get something offered to y'all again." She stated the program would still be named "Certified Cannabis" and feature indications “that certified cannabis is done by WSDA Organic Program."
  • Cannabis Alliance Executive Director Caitlein Ryan asked if hemp producers could utilize the existing WSDA Organic Program to certify their products.
    • Book stated that hemp could currently be certified under the existing organic program, and that the Department had “certified some hemp.” But she noted the plant was “different than cannabis on that federal side, and so hemp can get certified. We have a couple folks that have been certified in the past, but then the problem comes with the marketing and…having the infrastructure to come along with that."

• WSDA Agricultural Environmental Services Division Assistant Director Kelly McLain expressed openness to the Cannabis Alliance members’ ideas for change in cannabis policy, while also cautioning that significant changes would take time and careful consideration (audio - 6m, video - The Cannabis Alliance).
  • Ryan expressed concern about the challenges of funding cannabis regulatory programs at WSDA. She observed, “it's really interesting coming from the adult use side of things with LCB, where there is quite a lot of funding, and looking at and hearing from WSDA the challenges with maintaining programs and the funding that goes there.”
    • Ryan argued that cannabis policy in Washington needed to evolve to address the changing regulatory landscape and suggested such policy could best be managed under WSDA. “We've been looking at what other states are doing,” Ryan asserted, and “the most number of states have a separate agency that is devoted just to cannabis, both hemp and high THC cannabis.” She claimed the “next most common is under their Agricultural Department, putting…the two things together. It is a little more unusual what we do here in Washington State on the surface, and then very unusual what we do when you dig into it.”
  • McLain stated that she does not think it will be successful to simply propose that the WSDA regulate cannabis because, "I don't think that's what the industry is actually asking for." Instead, she argued that stakeholders are requesting that cannabis production be overseen by an agency with expertise in the regulation of crops. McLain expressed doubt about the feasibility of transferring all cannabis regulatory authority to WSDA and stated that WSDA would likely need additional resources. “I'm not saying that LCB is doing it really, really well or really, really badly,” she stressed, “I'm just saying…there's some fundamental things we would have to talk about, both as a State family, and then from a funding perspective, and all these other things.”
    • The possibility of WSDA taking on a greater regulatory role in cannabis manufacturing had been an idea considered by elected legislators, most recently in 2024 with HB 2334, “Transferring certain cannabis licensing activities to the department of agriculture.”
  • McLain noted, "there's so much new opportunity that maybe didn't exist when I stepped into this cannabis policy role seven years ago." In her view, WSDA had historically been resistant to being involved in cannabis policy, but she insisted the department’s perspective had evolved under different leadership.
    • “And I just, I think we've come so far…are we really where we were 10 years ago? We're not. And so, are the agencies in the same place they were 10 years ago? They're not, and their leadership is different,” McLain said. The “conversations with [WSLCB] Director Lukela and [WSDA] Director Sandison in meetings together” had suggested to McLain there was a more forward-looking attitude “where we're leaning into our expertise, in our roles, and we're really marrying those up so that we get the very best fit for everyone.”
    • Director Derek Sandison had been the head of WSDA since 2015, though two WSLCB board members, and Director Lukela, had changed over the last several years. Lukela was interviewed on TVW’s Inside Olympia on October 10th, and talked about issues facing the agency.
  • “And everything I'm looking at now is, how do we do it? How do we add an equity lens? How do we embed that into the programs?” McLain suggested that U.S. Department of Agriculture (USDA) willingness to issue phytosanitary certificates for “high-THC cannabis” through the Animal and Plant Health Inspection Service (APHIS) could indicate that federal authorities had an evolving prioritization of the risks of being so restrictive (audio - 3m, video - The Cannabis Alliance).
    • She highlighted how APHIS was providing “phytosanitary certificates for both hemp and high THC cannabis, even though it can't be exported. So I thought that was fascinating…we got that this week from my plant protection guys. They were like, ‘oh, APHIS said we can do phytosanitary certificates like we do for other commodities now,’ not grading on quality, but just on phytosanitary, so disease and pest presence.” She remarked, “I feel like we have lots of opportunity, and I'm not…blowing smoke. It's not going to be easy.” 
    • McLain planned to reach out to federal counterparts with questions including, “how would we issue a phytosanitary certificate for a non hemp product?” She nonetheless saw this as indicative that “things are changing and shifting all the time.”
    • “I'm starting to actually hear from federal agencies that they're willing to engage on things that are not hemp, that's different, that's new. So and to me, that's exciting,” added McLain.
    • Learn more about the 2023 change to USDA hemp policies, plus answers to questions about hemp organic certification as well as the department’s Hemp eManagement Platform (HeMP).
  • McLain speculated that lawmakers were unlikely to support a sweeping overhaul of cannabis policy, arguing that the state should consider passing legislation that addresses more narrow concerns, like where cannabis production should be regulated (audio - 4m, video - The Cannabis Alliance).
    • McLain compared this approach to past legislative efforts to create a cannabis commission or significantly alter the regulatory structure, stating that policymakers have expressed that they were "not ready" to support those bills. She elaborated that she didn’t support enacting a large number of changes to cannabis regulations, comparing such a move to "pulling a wolf in sheep's clothing."
  • According to McLain, she was seeking opportunities to build environmental equity considerations into cannabis programs and she agreed with Ryan's suggestion that state agencies need "more organized, coherent roles...in this space."

• Washington State University (WSU) Professor and Center for Cannabis Policy, Research, and Outreach (WSU CCPRO) Director David Gang discussed the challenges of conducting research on cannabis along with potential impacts of rescheduling, and the need to update the State's regulatory structure (audio - 4m, video - The Cannabis Alliance).
  • Gang had contributed to cannabis policy making through participation with organizations like the Washington State Hemp in Food Task Force and the WSLCB Cannabinoid Science Work Group—defunct as of April 2024—as well as CCPRO research seminars or past University of Washington Addictions, Drug, and Alcohol Institute (UW ADAI) symposia on high-THC products.
  • During the town hall, Gang noted that WSU was bound by federal law because it received federal funding and therefore had to maintain a drug-free workplace and school environment. He elaborated, “one of the things that we've dealt with at WSU and and being restricted in what we're allowed to do in the high-THC cannabis spaces…because of the Schedule I nature of that part of the plant…we have a couple of federal laws that we have to abide by if we want to retain our ability to get funding.” Gang indicated, “as soon as something that's federally illicit comes on and is promoted or accepted as being allowable, then that puts that potentially in jeopardy, now that that attitude has been changing across the nation.”
  • Gang pointed to Pennsylvania’s commonwealth-funded cannabis research program as an example that Washington could follow. Pennsylvania officials had set up the program so “they have to have a partnership between industry and one of the state institutions of higher education to do research projects on cannabis, and they're allowed to do that, and in our state, we're not allowed to do that still, because of the legal framework that we currently exist under.”
  • Gang suggested that rescheduling cannabis to Schedule III would likely have minimal impact on the industry, but would potentially expand research opportunities. In “trying to make sense of how to move forward with the current situation… I don't think this rescheduling to Schedule III is going to make much of a difference to the markets that we're talking about here.” He suggested that the impact on research into the plant would benefit, “actually pretty substantially.”
  • Gang rhetorically asked McLain if it would be possible to eliminate the separation between hemp and high-THC cannabis, “especially both location and money streams…maybe that's part of why the WSDA [had] managed the way it is right now…by separating how the funding comes in for this."
  • Gang argued that State officials needed to consider how to regulate cannabis given the realities of the plant, products currently on the market, and a changing legal and political climate. He emphasized that products banned in Washington could still enter the state via interstate commerce (audio - 1m, video - The Cannabis Alliance).
    • “We [have] got to remember that Washington state is sort of in a bubble in the cannabis industry, but not at all in a bubble in the hemp industry, right,” said Gang. He suggested advocates “remember that in how we think about legislation, banning stuff in…Washington state does not mean it's not going to be made somewhere else and shipped here, regardless of whether we think it's legal or illegal here.” Considering online sales and shipping networks, “those things coming from other places are not going to have the interests of the health and safety of Washington citizens in mind,” he remarked.
    • Researchers talked about the health implications and prevalence of semi-synthetic consumable hemp products during a May 23rd webinar hosted by the Prevention Technology Transfer Center Network Coordinating Office (PTTC NCO).

• Attendees with expertise in cannabis production, analytical testing, and legal counsel offered comments around moving more regulatory authority to WSDA, developing a lawful market that allowed for hemp consumable products, and recognizing the challenging environment current licenses already operated in.
  • Raven Co-Owner and Washington Sun and Craft Growers Association (WSCA) Board Member Micah Sherman argued that policymakers should bring all cannabis cultivation, including hemp, under a unified regulatory structure at the WSDA (audio - 7m, video - The Cannabis Alliance).
    • Sherman suggested this could include a single cannabis cultivation license endorsed to allow existing high-THC cannabis producers to continue growing those plants. “So that puts us all into the same boat where we're all cannabis licensees, we can all grow.” He called this arrangement a “good place, because we have the same perspective as far as our production-related regulator, and I think that's going to help, first and foremost.”
    • Additionally, Sherman proposed separate markets for different cannabis products: “we have different types of products that we're making that can now get made from the same, both from hemp and cannabis, and you can get the exact same end product. So I think an important thing we can advocate for is twofold: one is to create a distinction between natural cannabis and natural cannabis products; and cannabinoid products and manufactured cannabinoid products. So that is aside from the synthetic which I think is a different conversation.” He offered the view that once a business was “making novel products with isolates and formulations, and we start to get outside of natural cannabis, I think that needs a different regulatory approach, regardless of the THC content of the plant that it came from.”
    • Sherman argued the state should establish a clear policy framework for interstate commerce in cannabis products, noting that such a framework could influence the development of federal regulations on interstate trade of cannabis. For this reason, he said there was “a vested interest in that conversation happening in [Washington,] D.C., and there [were] conversations about [what federal agency it would end up with and] what different parts of the regulatory environment are going to be approached in which ways.”
    • Sherman accused Washington Governor Jay Inslee of failing to provide leadership on cannabis issues, arguing that state agencies had been forced to lead on conversations about cannabis policy.
      • “I think we need to make sure that the incoming governor doesn't do that,” Sherman said, “our issues have been neglected from that standpoint…and I think we need to make sure that that is not repeated moving forward, because it's not fair to the people that work at these agencies to put the onus on them to have these conversations with each other when it's convenient for them.” On issues such as the Certified Cannabis Program, “resources should have been provided to them to do it, and it shouldn't just be because, like, Kelly decided it was time to talk to the LCB.” Though appreciative of her outreach, Sherman commented “that shouldn't be on you in that way. I think it's inappropriate that it took that and I'm pretty upset at this point with the way that they've handled things.”
      • Sherman argued that the fact that the same cannabis plant can be treated differently under the law depending where it was grown demonstrated a need for policy coherence in the cannabis industry. “We're going through this transitionary phase [and] need to hold power to account. We need to make sure that people that want to do good work for us at these agencies have the resources they need to do it and not be put in positions where they are the intermediaries of conversations that shouldn't be their job in the first place.”
  • Bonny Jo Peterson, Industrial Hemp Association of Washington (IHEMPAWA) Executive Director, advocated for a new hemp regulatory program in Washington to address concerns of interested parties in both the hemp and high-THC cannabis sectors while also accounting for the unique realities of interstate commerce in hemp-derived products (audio - 2m, video - The Cannabis Alliance).
    • Peterson stated that Washington's hemp industry needed a regulatory program which helped remove unregulated products from the market. She pointed to a previous bill proposing such a program would include vendor licensing, age-gating, a product registry, and some kind of system for tracking hemp-derived products outside of licensed cannabis retailers.
      • Stricter regulation was needed, she said, “because things are being sold in…TJ Maxx and at Macy's” which weren’t licensed to sell controlled substances. However, she indicated, “it's not the same licensing system that's already in existence.” Being able to track and verify products would be beneficial, “and I just wanted to make sure that the group is aware that there is something being worked on that will be sent out.”
    • Peterson noted that research suggested that pollen drift from industrial hemp production can be mitigated through proper crop spacing. “Unless it's a crazy, crazy storm, [hemp pollen] only goes about 40 feet. So I think that can, can be mitigated with some simple…spacing between, between crops.” She also believed “a canopy size right now for [hemp producers], doesn't really make sense.”
    • According to Peterson, the lack of a legal market for hemp-derived products created an economic imbalance between the hemp and high-THC cannabis industries. This was another reason she argued that Washington’s hemp regulations needed to be updated to allow the sale of hemp-derived consumables. Washington policymakers should legalize hemp consumables before considering whether there should be production limits, Peterson reasoned.
    • Peterson urged McLain to inquire about other states’ experiences regulating hemp and high-THC cannabis under their agriculture departments, noting predictions that other states would face federal enforcement action for legalizing hemp-derived products had not come to pass. “I'm curious to find out what they have…to say at the meeting…have they had any threats?” She compared this with cannabidiol (CBD) in Oregon, “when they had their program up…conversations that were being had with WSDA, of that fear…which has not happened.” Peterson was hopeful for “some good energy on a way to move forward,” suggesting a “concerted effort” to ensure that interested parties from the hemp sector support any proposed cannabis legislation to increase the chances of passage.
  • Jessica Tonani, Verda Bio CEO, argued that state policymakers should focus on regulating cannabis products, rather than the cannabis plant itself (audio - 2m, video - The Cannabis Alliance).
    • Tonani proposed that regulators develop a list of “impairing” cannabis compounds that have the potential to cause intoxication and mandate testing for those compounds. She argued the Hemp in Food Task Force “tried to look at how are those compounds made…I think we're pretty good with it, and we have a list of what those compounds that could be tested pretty easily are. The issue becomes…this alphabet soup, that is, that people are synthesizing.” Tonani suggested that Washington follow the lead of other states that allow the sale of hemp consumable products with detectable but low amounts of THC.
    • Washington’s system of high taxes on cannabis products meant officials had “a ton of tax revenue running on this,” which could make it difficult for Wasnington businesses to compete with businesses in other states, warned Tonani. She interpreted this as meaning “they have interstate commerce on their…side, and they, they may not want the same things in the [US] Farm Bill that we do.”
      • The 2018 US Farm Bill legalized hemp production which resulted in the flourishing market for synthesized hemp cannabinoid items.
      • The Washington State Legislature passed SB 5276 to address the requirements of the Farm Bill. The WSDA led the creation of a state hemp plan in November 2019. A 2023 law—SB 5367—revising when products were considered hemp or cannabis was implemented by WSLCB on October 9th. Final rules included a list of cannabinoid compounds not subject to new limits per serving because they were not known to have intoxicating effects.
    • Tonani questioned the idea that cannabis products derived from high-THC plants are always considered federally illegal because “I think anybody that operates a [legal cannabis] facility, including myself, knows that's not the case. [I take] plant material, and I mix it and throw it in my dumpster, and it gets picked up. If, if it was considered to always be…high THC cannabis material, the trash man couldn't come and pick it up.”
    • “One of the things that I've been thinking about a lot is we have a history in this country of being able to essentially take a product that may have legal consequences around it” and transform it, remarked Tonani, “there's a ton of things that have the ability to start as one thing and end up in a supply chain as something very different.” She called for policymakers to explore the possibility of differing classifications for THC depending on whether it was derived from cannabis or hemp plants.
    • Tonani argued that relaxing Washington’s restrictions on cannabis research could allow the state to keep pace with research being conducted elsewhere “like Georgia that just legalized medical and they licensed two universities to grow it.” Along with research frameworks like the kind Gang mentioned in Pennsylvania, Tonani conveyed it was time to review “the rules and the guidance that we put in place for our universities and just kind of step back and say, ‘Hey, do we really feel like those are still needed?’”
  • Mitzi Vaughn, an attorney with Karr Tuttle Campbell and an International Cannabis Bar Association Founding Board Member, mentioned challenges in regulating the cannabis and hemp industries and encouraged officials to consider the economic realities facing both industries when crafting new laws (audio - 4m, video - The Cannabis Alliance).
    • “From a purely like black and white legal perspective,” Vaughn said, “we have an over regulated industry on one side and we have an under regulated industry on the other side…and you have bad players on one side and you have bad players on the other, and there are fantastic players on both sides.” Vaughn’s view was that rules needed to “move everything to the center, because as long as adult use is over regulated and being strangled…the idea that the hemp market should go forward without…meaningful regulation, or any regulation, depending on who you're talking to, is hard to swallow.”
    • Vaughn argued that Washington policymakers should legalize hemp consumables before considering hemp production limits.
      • This order of events made “economic sense” to Vaughn, who said working with the existing hemp sector involved addressing “the fact that the biggest market [for hemp was] consumables, and those aren't legal in Washington, period.” She didn’t want regulators “making a canopy decision” for hemp before an understanding “if you could extract it and actually make…products out of it that were consumable.”
      • An idea of how much of a hemp crop might end up in consumables competing for market value with cannabis products was important for Vaughn, who added, “hemp farmers out there may know better than me, but it seems like expanding the canopy for hemp farmers is irrelevant if you don't have anywhere to legally put it.”
      • At time of publication neither the WSDA, nor the USDA enforced a maximum growing limit on hemp production. US hemp sector total acreage contracted following changes to state laws, according to a WSDA legislative briefing in December 2023.
    • Vaughn noted that identifying a political champion in the legislature was critical to enacting meaningful change to Washington’s cannabis laws. She further recognized “so many problems with our community right now, just the larger nation, right? is having civil, face to face discussions, and so I think that advances the ball and helps everybody understand…there is a way for us to all be working towards the same place.” Vaughn advised that the current political landscape created a unique opportunity to gain access to policymakers and discuss the need for new cannabis laws.
      • “And so making sure that any bill or any proposal that we try to move forward….has tried to look at the economic impacts,” Vaughn said, adding that this would be difficult for hemp policy, “because it's going to be a more holistic reform.” She warned everyone involved to expect a “political reality” that economic implications would weigh heavily on legislators hearing bills.

• As the conversation concluded, Cannabis Alliance Executive Director Caitlein Ryan planned to host another town hall inclusive of WSDA guests and McLain raised the idea of creating a state group or agency dedicated to comprehensive cannabis and hemp reform (audio - 3m, video - The Cannabis Alliance).
  • Ryan suggested that Alliance members could revisit the WSDA discussion in six weeks. She pledged to “coordinate calendars ahead of time so that we can have the full time together and…we can all report back on some of the conversations that we're having.”
    • A second town hall was scheduled for Thursday October 17th.
  • McLain acknowledged the Washington State Department of Commerce should get more involved in cannabis policy discussions, but the agency was already overburdened. She recommended a new task force or work group to create a comprehensive plan for state cannabis regulation: “I hate to tee up work groups or task forces or commissions as an option, but…maybe we get like we did in the Cannabis Science Task Force, a group of people together and say our future thinking is that the program needs to look like this” (audio - 3m, video - The Cannabis Alliance).
    • McLain also encouraged Sherman to research the Washington State Office of Independent Investigations, arguing their structure might provide a model for managing cannabis policy.