WA Senate LCTA - Committee Meeting
(May 10, 2022) - Work Session - Regulating Hemp-Derived Cannabinoids - Oregon

Oregon Flag - OLCC - Considerations in Establishing Cannabinoid Limits for Hemp Products
[ Event Details ]

Two OLCC regulators briefed Washington legislators on the Oregon approach to cannabinoid regulation before answering questions on market limits and “pushback” elicited.

Here are some observations from the Tuesday May 10th Washington State Senate Labor, Commerce, and Tribal Affairs Committee (WA Senate LCTA) Committee Meeting.

My top 3 takeaways:

  • Oregon Liquor and Cannabis Commission (OLCC) Executive Director Steven Marks elaborated on the commission’s policies around cannabinoid regulation and their approach to synthesized compounds in legal cannabis products (audio - 8m, video, presentation).
    • Marks explained he’d be offering “context” while Hemp and Processing Specialist Steven Crowley would tell more about “how we’re regulating cannabinoids in Oregon.” He kicked off his remarks by observing "we've come a long way from smoking cannabis to...Breaking Bad chemistry” and regulators were still looking at “how to distinguish” the compounds in the “legal, regulatory market” in their jurisdictions.
    • According to Marks, in 2021 Orgegon had become “ground zero for cartel groups” which flocked to the state “in droves with literally thousands of illegal grows” appearing in the southern part of the state. He alleged that some had abused the Oregon Department of Agriculture hemp program to cover their activities. That July, the Oregon State Legislature adopted HB 3000 which enabled further regulation of cannabinoids, Marks explained, offering that the law had made it easier for enforcement to “look at illegal cannabis grows, not marijuana grows, but those things that were from outside of the state program.” 
    • Around the time officials were confronting this development, Marks commented that his agency began seeing hemp edibles and drinks "whose content on [tetrahydrocannabinol] THC was rising by volume" but remained available in an “open marketplace” of businesses not licensed to sell cannabis. His staff found "little guidance on these products" but recognized they contained delta-9-THC as well as other THC compounds and were “readily available to children." Marks recalled that OLCC experience with “semi-synthetic or synthetic cannabinoids came about the same time” after an approved hemp producer “wanted to bring this delta-8-THC product into our system that was 97% pure in five kilogram units.” His team looked at whether they exercised “regulatory authority over this” which led to their endorsement of HB 3000, which he remarked “passed with broad bipartisan support.”
    • Marks asserted that the overriding principle in developing rules and laws around synthetic cannabinoids was to "keep it out of the hands of kids," as well as “what consumers need to know in the processing." He indicated that HB 3000 and SB 1564—which passed in 2022—mandated formation of a “Task Force on Cannabis-Derived Intoxicants and Illegal Cannabis” which first convened on May 12th. The group was required to make recommendations on testing in cannabis “processing and upward” for “human consumption,” which he stated would show what cannabinoids were present and where an item could be sold. “There may be a class of products that are open market, but [for] adult purchase only,” Marks commented, while other items would be limited to adult-only cannabis retailers. Setting up product classes would involve careful delineation of authorities between OLCC and state agriculture officials, he acknowledged.
      • The task force recommendations were due to Oregon legislators by the end of 2022.
    • Complicating the work of OLCC was a "lack of federal leadership," said Marks, though he credited U.S. Food and Drug Administration (FDA) officials who “finally did something here recently” by announcing enforcement against companies producing the products without regard for “our licensees…our regulatory systems, our tax structures.” Testing and labeling were also important, he noted, pointing to officials in California who had been working on packaging and labeling (PAL) rules for hemp. Marks said PAL requirements in Oregon had thus far been limited to what was being sold in their “adult-use stores, not on the open market.”
    • As for concerns over “incomplete science,” Marks was aware of stakeholders in the hemp and cannabis sectors who expected authorities to “prove it's unsafe, and we went to the industry to [have them] prove it’s safe.” He thought that the focus should be on finding scientifically defensible standards for “these things going forward, at what dosage levels, what are the standards that we can intellectually craft between all the experts…to say ‘yeah, this product’s OK to go forward, and this product can go forward but we want a heck of a lot of disclosure to consumers.’”
    • Marks believed it was best for regulators like OLCC to have “the ability to look at all cannabinoids, and the synthetics, and what goes into products.” Since the cannabis sector was “ever evolving,” he hoped to protect consumers by having broad authority to “look at it,” finding this had been one benefit of legalization in a state that had been “very wild west capitalistic" with more legal retail access than Washington. Marks believed that regulators had significantly "shutdown interstate [commerce] in our state" based on indicators like a “drop from all the medical grows" along with a decline in patient participation in their medical program even though medical cannabis production was regulated and items could be sold in Oregon retail stores. He surmised that “if we’re gonna make safer choices for the consumer and the public,” there needed to be product “screening” to address ingredients that were “just bad form or unknown” to boost consumer confidence in their system.
  • Hemp and Processing Specialist Steven Crowley went into more detail about HB 3000 and the approach used by OLCC staff in developing cannabinoid rules that would take effect later in the year.
    • Crowley stated the law addressed “a number of concerns in the hemp and cannabis industries" and accomplished “three key things” (audio - 2m, video):
      • “Prohibited the sale of ‘adult use cannabis items’ (including some hemp items) to minors
        • Directed OLCC to establish thresholds for THC and other cannabinoids for ‘adult use cannabis items’
      • Gave OLCC authority to regulate the processing and sale of synthetic cannabis derivatives in Oregon’s adult use system
      • Directed OLCC to set limits on THC and synthetic cannabis derivatives in hemp items for sale to adults” outside of the regulated system of stores
      • Crowley told the committee that commission staff used “standard notice-and-comment rulemaking” to draft rules in addition to publishing a whitepaper on regulating cannabinoids, noting that OLCC adopted the rules in December 2021. Prior rules limited THC content in foodstuffs to 0.3%, which Crowley noted wasn’t a lot in plants “but, when you’re looking at the weight of food products, .3% is a lot of THC.” Products were also regulated based on the age of the buyer, he mentioned, “for minors we set the limit at half a milligram of THC, in line with international standards” while adults could buy products with “significantly higher limits” that were still below the amounts in adult use cannabis items.
    • Crowley outlined how OLCC regulatory authorities were “really shored up” by HB 3000, which provided the commission broad authority over "artificially derived cannabinoids" whether they came from cannabis or hemp crops, as well as control over their legal use in the adult-use cannabis and open hemp markets (audio - 5m, video). 
      • What Oregon regulators referred to as "synthetic derivatives" were cannabinoids “specifically created synthetically from hemp or marijuana,” he said. These compounds carried a “wide variety of potential health and safety concerns” Crowley reported, as they had "little to no history of human use" and lacked an established “safety profile for their use.”
      • According to Crowley, regulators were also concerned about “the byproducts from the synthesis,” chemical reactions which hadn’t been considered when cannabis product testing was designed and therefore were likely to be missed. He commented that some delta-8-THC products had been shown to be “somewhere between 70 to 90% pure” and when encountering a 55% pure product, “I asked the manufacturer what the other 45% was, they had no idea.”
      • Crowley was confident existing testing protocols weren’t informative for regulators or consumers “when it comes to these kinds of synthetic derivatives.” He stressed that Oregon officials “don’t test for chemical reagents or reaction byproducts” so consumers were left uninformed about products with synthetic cannabinoids and might be taking on “this whole set of unknown health and safety issues without even being aware of it.”
      • Since products were only available in age-restricted stores with warnings, Crowley looked at impairment from items as a “secondary concern compared with the general health and safety considerations.” The result was what he termed “a bifurcated approach” where both the open market and the adult-use cannabis system had regulations for synthetic cannabinoids. OLCC leaders could set concentration limits on THC in general markets, he noted, but couldn’t “require synthetic derivatives to meet any other standards for their health and safety, for that reason our rules currently prohibit products in the general market” from containing the derivatives. Synthetic cannabinoids could be used in legal cannabis products, said Crowley, as there were more “meaningful guardrails” for OLCC oversight there. Non-intoxicating synthetic derivatives could be allowed in the adult-use market with disclosure, he added. The commission’s synthetic review process could be revisited “as more data becomes available,” said Crowley
      • Crowley explained that besides disclosure of synthetic derivatives in cannabis items, compounds had to follow the “ordinary regulatory processes for introducing a novel ingredient into foods or dietary supplements.” He said this could be achieved through:
        • “A new dietary ingredient notification with the FDA”
        • “Determination that the substance is generally recognized as safe, or GRAS”
        • Intoxicating substances were assessed individually, he stated, “in order to set concentration limits similar to the ones that are in place for THC.”
      • Noting that their efforts weren’t limited to THC, Crowley mentioned that many synthetic derivatives were already “on the market” and that new compounds came to their attention “every few months, at this point.”
  • The committee chair and vice-chair had a variety of inquiries on hemp limitations, cannabis sector regulations, pushback from industry, and product availability.
    • Chair Karen Keiser was curious about limits on products available to people under 21, and wondered if OLCC guidance was “saying ‘sell it to minors.’" Crowley emphasized that a product available to minors was limited to “half a milligram of THC in the entire product” based on international standards in food “around, like residual THC in hemp seed oil” (audio - 1m, video).
    • Keiser asked whether there’d been support from “your regulated cannabis companies and producers and processors” in passing HB 3000. Marks responded “yes, generally," feeling that pushback had come from “the hemp folks” and Oregon Farm Bureau members, "but in the end we had enough support to get it done" (audio - 1m, video)/ 
      • Keiser’s experience when WA Senate LCTA considered cannabinoid regulation legislation during the 2022 legislative session, and when she sponsored a subsequent bill, was very different and exposed sharper divisions between regulators and some trade organizations over the use of synthesized THC in legal Washington products.
      • Vice Chair Steve Conway similarly asked about “pushback from the growers” on their rules. Crowley described CBN as “a popular compound that is often made synthetically from CBD” and most of the opposition to their regulations were about “making sure that there is still a place in the market for that.” Having heard less about delta-8-THC and other synthetic compounds, he acknowledged that manufacturers in the state could still create those compounds for export to states “where they’re allowed” (audio - 1m, video). 
    • Conway felt the approach of Oregon regulators had been to “recognize the reality of the product and try to regulate it.” Marks said OLCC staff were evaluating cannabinol (CBN) under the “GRAS standard” but didn’t want cannabis regulators to act as the chief arbiters of cannabinoid science, wishing federal officials take the lead, rather than states. Crowley agreed that the science should be leading regulations, but "the industry is ahead of the science" on basic safety issues around manufacturing and consumption (audio - 2m, video). 
    • Keiser wanted to better understand the availability of hemp products in the neighboring state, curious whether infused cannabinoid products were sold “in your gas stations, and vape shops.” Crowley said their rules were taking effect in July, so OLCC leaders would get a better sense of their availability “toward the end of the year” (audio - 3m, video).
      • Marks pointed out that their existing structure “depends on our labs, certificates of analysis” but greater oversight was planned as "some element of traceability" would be important, especially if Oregon was able to act upon its plan for interstate cannabis compacts. He confirmed that hemp processors in Oregon had been allowed to receive and process crops from Colorado and California. Businesses were responsible for testing THC content and disclosing to OLCC where processed material was exported to, he added. Marks observed that it would be optimal to have “a receiving regulatory responsibility" in the jurisdiction it was sent to for “a modicum of traceability.”
    • Keiser encouraged Marks to stay in contact with WSLCB about what the commission was doing with regards to cannabinoid regulation. Marks encouraged Keiser and committee members to review the regulatory whitepaper on cannabinoids from OLCC staff, calling it “groundbreaking work” and a useful resource for regulators and lawmakers alike. Keiser thanked him, feeling it was refreshing “to see how far you’ve come” (audio - 1m, video). 

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