What Oregon’s Ban on Synthetic Cannabinoids Means for the Industry
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What Oregon’s Ban on Synthetic Cannabinoids Means for the Industry

Regulators have banned the sale of all artificially derived cannabinoids outside the state’s regulated cannabis market. Industry stakeholders explain why they think this is problematic.

August 16, 2022

Grön, a Portland, Ore.-based producer of cannabis-infused edibles, has built its business with a focus on minor cannabinoids and effects-based products, including its popular CBN offerings.

But its product mix may soon have to change. 

Regulators in Oregon, concerned about the potential of harmful byproducts in artificially derived cannabinoids—and particularly worried about the unregulated delta-8 products that were appearing on the shelves of grocery stores and gas stations across the state—banned the sale of all synthetic cannabinoids on the open market as of July 1, 2022.

Products containing artificially derived cannabinoids may still be sold by cannabis retailers licensed through the Oregon Liquor and Cannabis Commission (OLCC) until July 1, 2023, at which point the products must be approved by the U.S. Food and Drug Administration (FDA) in order to remain on dispensary shelves.

Christine Smith, Grön’s founder and CEO, says that while the OLCC is likely trying to protect consumers, regulators are actually stifling innovation and hindering Oregon’s cannabis industry from achieving its full potential.

CBN products comprise nearly 30% of Grön’s sales, Smith says, and she and her team are uncertain about the products’ future in Oregon. The company plans for production and packaging up to six months in advance and could end up with products that ultimately cannot be sold in the state.

“In a nutshell, it’s kind of a disaster,” Smith says. “It’s gotten a little out of control.”

Photo courtesy of Grön
Grön sources CBN for its gummies, chocolates and sugar-coated pearls from FloraWorks, an Oregon-based supplier of minor cannabinoids.

Grön, which also operates a cultivation facility in Oregon and has expanded its product lines to Nevada, Arizona, Oklahoma, Missouri and Canada, sources CBN for its gummies, chocolates and sugar-coated pearls from FloraWorks, an Oregon-based supplier of minor cannabinoids including CBN, CBC and CBG. The company has developed an accelerated oxidation process that starts with hemp-derived CBD and speeds up oxidation into CBN.

While the cannabis plant produces CBN naturally in small amounts, the cannabinoid can also be created from CBD through an oxidative process that exposes the CBD to heat, light and oxygen to change its molecular composition to CBN. This is the same process that occurs in nature to produce CBN, according to FloraWorks CEO Alleh Lindquist, but the process is sped up in the lab to produce CBN on a commercially viable scale.

The OLCC initially wanted to outright ban the sale of all artificially derived cannabinoids in the state, Smith says, but the industry clapped back, and regulators ultimately settled on a compromise, mandating that synthetic cannabinoids can only be sold through the regulated cannabis market—and that they must be FDA-approved to remain on the market past July 2023.

In the meantime, Smith says Grön must now provide additional information on its packaging.

“We had to change our packaging, saying that it’s made from an artificially derived cannabinoid, and add a few pieces, but we’re able to maintain our products in the market for another 11 and a half months while our producer/supplier goes through this FDA process, and hopefully we’re all able to get this submitted in time,” she says. “If you back it up three to four months from that July 1 date, that’s when we really have to start turning things around or we’re going to be in a really bad position with a ton of product that we have to destroy—potentially hundreds of thousands of dollars’ worth of products that we can’t do anything with, that is absolutely perfectly good product and would be sellable in any other state.”

The OLCC’s definition of artificially derived cannabinoids is extremely broad, Lindquist says, and covers not only fully synthetic, biosynthetic or unnatural cannabinoids, but also cannabinoids like CBN that are found in nature but also created through a chemical process that allows them to be made in greater quantities.

“We do think that regulations should be thoughtful, and this is not particularly thoughtful regulation,” Lindquist says. “The open market side should not be different for CBD, for example. They shouldn’t be arbitrarily deciding which cannabinoids they want to force through the [regulated cannabis] market.”

Oregon’s rule on synthetic cannabinoids is also unprecedented; while many states have adopted rules to ban or regulate the manufacturing of psychoactive cannabinoids derived from hemp, Oregon is the first state to ban nonintoxicating cannabinoids like CBN. 

“The only place we’ve seen them broaden that beyond the intoxicants is Oregon, where they’ve said, ‘Look, we want to cover the entire gamut of chemistries performed and say all of that falls under these rules, under our new definition of artificially derived,” Lindquist says. “Again, it’s somewhat misleading, particularly for consumers, because it implies something that’s unnatural and unsafe in today’s consumer market. They’ve bundled together under this ‘artificially derived’ definition whole synthetic cannabinoids that do not come from the plant, [such as] biosynthesized [cannabinoids], where they would be made from an organism, [and cannabinoids that come] from the plant and [then a lab] used  some type of accelerating process like we do to.”

“We’re not seeing any other states taking the stance that Oregon is taking and, really, they just don’t understand,” Smith adds. “There’s really no evidence or scientific potential for the kind of toxic byproducts that they’re concerned with, but they just don’t understand it. They’re not scientists.”

The OLCC did not respond to a request for comment.

CBN Studies Underway

While the FDA approval process is lengthy and costly—Lindquist says it can take more than a year and close to a million dollars to complete  —FloraWorks was pursuing FDA dietary and food ingredient toxicology studies prior to the OLCC’s rule change.

“FloraWorks was founded to look at rare, novel cannabinoids that do require some type of additional processing than CBD or THC would to actually make them in viable quantities,” Lindquist says. “We basically discovered patented ways to create those cannabinoids. CBN was the first molecule that had efficacy that we wanted to bring to market. We’re actually going through toxicology research, as well as some efficacy research, and that’s our approach to any new molecule that we’re coming across that we’re interested in.”

FloraWorks, which provides minor cannabinoids to companies across the country, adheres to strict manufacturing protocols under Good Manufacturing Practices, as well as ISO900:2015 standards and certifications, Lindquist says. FloraWorks has also launched efforts to participate in the FDA’s Generally Recognized as Safe (GRAS) Notification Program and New Dietary Ingredients (NDI) Notification Process.

“We want to meet traditional standards and mature the industry away from what we see as kind of a broad, snake oil conversation about cannabinoids being good for everything and not a lot of oversight from the manufacturing safety [or] consumer safety side today,” Lindquist says. “This is part of maturing that industry, so it looks just like, in our example, melatonin. We would love to see CBN as an alternative to melatonin, sitting on the shelves of drugstores around the world. So, these are kind of the basic requirements for doing that.”

FloraWorks’ CBN will enter official trials Sept. 1 and will undergo a series of toxicology studies on rats.

“They look at neurobehavioral components to make sure that it’s not intoxicating, that you don’t need to put special labels about operating heavy machinery on it,” Lindquist says. “There’s dose range finding in terms of, will this kill a rat or a human if they consume too much? What are the upper limits? Those are all the questions that need to be answered. … We’re confident that we’re going to come through without any issues on the toxicology side, but the work has really not been done before.”

To achieve GRAS certification, FloraWorks must submit a dossier with its toxicology studies and other supporting documentation to third-party experts for review, and once the experts sign off on the dossier, FloraWorks will have met the standard for food-grade ingredients.

The NDI, which is a dietary ingredient standard, has a similar process, but instead of sending the dossier and supporting materials to a third party, FloraWorks must send it to the FDA for final approval.

“There are pathways for bringing these [cannabinoids] to market,” Lindquist says. “There are requirements in terms of filing and the GRAS and NDI requirements. That is all already there, and so this layer that Oregon’s attempted to … add into it is complex and potentially kind of overstepping their authorities in some sense, particularly the open market ban that they’ve made.”

FloraWorks is also undergoing a 1,500-person, placebo-blinded study on the treatment of sleep disorders with CBN. The study, which kicks off this month, will evaluate three different dosages of CBN against a placebo to determine if the cannabinoid is effective as a sleep aid.

“The feedback thus far makes us confident that it’s worth spending the money on [proving anecdotal stories] like this, that consumers are gravitating toward CBN for sleep and most likely we’re going to have some positive results there,” Lindquist says.

Oregon’s rule change has had little impact on FloraWorks’ business, he adds, as the company was already undergoing FDA approval for its cannabinoids and most of the company’s clients are located outside the state. FloraWorks has roughly a year to complete the GRAS and NDI processes, and in the meantime, its CBN can still be sold through Oregon’s licensed cannabis dispensaries.

Smith is hopeful that FloraWorks will achieve FDA approval and that Grön’s products will remain on the market at Oregon’s cannabis retailers.

"The good news is that Flora Works is getting their FDA study, and that is setting the precedent for a fantastic Oregon company to go ahead and do these studies that they were going to do anyway,” Smith says. “And it’s good for all of us with legalization that we can get more sophisticated as the market progresses.”

“This is what we see as the evolution of medical cannabinoids and moving it into a therapeutic market, where consumers can have confidence about where it came from,” Lindquist adds. “Did it go through toxicology work? Can you confirm there are not impurities in it? Is it manufactured under GMP or ISO standards? That’s all part of our approach to the industry."