Montana cannabis regulators and industry insiders were surprised to discover that adult-use licensees aren’t allowed to grow hemp, process hemp, or sell hemp-derived products (including CBD) under the state’s adult-use framework. Consumers can only purchase hemp-derived CBD products in non-adult use retail cannabis locations (i.e., gas stations, corner markets, and grocery stores).
Kristan Barbour, the administrator of the Department of Revenue’s Cannabis Control Division, said the provision caught her by surprise as well. “Frankly, I feel like we stumbled upon it. It wasn’t on our radar at all,” she said.
The ban applies to retail cannabis license holders and will likely push consumers toward CBD sold at retailers that sell unregulated, often mislabeled, and sometimes contaminated CBD products. In a 2019 study, a Denver-based testing laboratory discovered that 70% of popular CBD products contained harmful quantities of heavy metals or pesticides and presented inaccurate information about the CBD and even THC levels.
“If there were any concerns at all about the safety, efficacy, or dosage of CBD, you might want people that actually know a little bit about it to be the ones selling it,” said Jay Bostrom, co-owner of Dancing Goat Gardens dispensary.
Tessa Rose, a Missoula-based herbalist who collaborates with dispensaries to craft CBD-rich products through her brand The Hemp Witch, said, “It’s idiotic. It’s denying consumers access to safe consumption.”
In a twist, CBD derived from hemp is prohibited, but CBD itself is not banned. But the CBD must be extracted from cannabis plants with THC concentrations greater than 0.3% because cannabis plants with less than 0.3% THC are considered hemp under the Federal 2018 Farm Bill. It genuinely makes no sense.
The provision intends to “preserve and protect Montana’s well-established hemp industry by drawing a clear distinction” between the marijuana and hemp industries. Many Montana hemp farmers don’t want their crop repurposed to be sold in medicinal marijuana environments.
Some dispensaries are launching separate businesses under different addresses. Emmie Purcell, a co-owner of Greenhouse Farmacy, is converting an auxiliary structure on her store’s property into a CBD emporium. “It’s a positive opportunity [also to sell] knick-knacks and gifts,” she said.
Dispensaries that rent their space are less optimistic about such simple solutions. Landlords may not be willing to allow them to create a separate business address in the exact location.
Spark1 has four retail locations in the Treasure State and their CEO, Marc Lax, is unfazed by the restrictions. “I’m a cannabis provider, not a CBD producer,” said Lax. “My focus is on medical marijuana and recreational cannabis, not CBD.” While some are scrambling, others seem to be completely unbothered.
This latest controversy comes on the heels of Montana’s strict employment requirements for cannabis workers and enforcement of strict advertising regulations. The ban goes into effect on January 1, 2022, the same day recreational cannabis sales begin in Montana. Dispensaries must liquidate their remaining CBD inventory by that date. There will also be an opportunity to advocate for changes in the next legislative cycle.