Ohio is the latest state where an elected official is attempting to prohibit the sale of products containing intoxicating hemp derivatives.
State Sen. Steve Huffman, R-Tipp City, introduced Senate Bill 326 on Nov. 6, legislation that would amend state law to define an “intoxicating hemp product” as containing more than 0.5 milligrams of delta-9 THC per serving, 2 milligrams of delta-9 THC per package, or 0.5 milligrams of total nondelta-9 THC per package (e.g., delta-8 THC).
The bill includes a definition of “total nondelta-9 THC” to also include the sum of the percentage by weight of THC and the percentage by weight of tetrahydrocannabinolic acid (THCA). The cannabinoid acid form of THC, nonintoxicating THCA is converted into intoxicating THC when it’s heated through a decarboxylation reaction.
THCA’s potential inclusion in Farm Bill reauthorization language became a heated topic of debate earlier this year when U.S. Rep. Mary Miller’s, R-Ill., amendment was added to the House’s version of the bill.
RELATED: THCA in the Farm Bill: Amendment Goes Far Beyond Closing ‘Loopholes’
The proposed definition under Ohio’s S.B. 326 would make many of the hemp-derived cannabinoid products in the Buckeye State’s unregulated market—i.e., available in smoke or vape shops that aren’t held to the same testing and labeling requirements of the licensed cannabis market—illegal to sell. For instance, a typical package of hemp-derived delta-8 or delta-9 gummies contains 10 servings with 10 milligrams of THC in each piece.
In addition, S.B. 326 would establish criminal penalties for knowingly violating the prohibition measures outlined in the bill:
- First-degree misdemeanor on the first offense and a fifth-degree felony on each subsequent offense; and
- If the offense involves the sale of an intoxicating hemp product to a person under 21, a fifth-degree felony would be assessed.
“This act is hereby declared to be an emergency measure necessary for the immediate preservation of the public peace, health, and safety,” the legislation states. “The reason for such necessity is to protect Ohioans, especially Ohio’s youth, from untested, unregulated dangerous tetrahydrocannabinol products. Therefore, this act shall go into immediate effect.”
Under federal law, hemp is defined as containing no more than 0.3% delta-9 THC on a dry-weight basis, which the U.S. Department of Agriculture requires to be determined during a pre-harvest test within a 30-day window of harvest time. If a hemp crop passes the pre-harvest test, the 2018 Farm Bill requires no further testing standards for its manufactured derivatives found in finished goods.
While federal standards focus on the concentration of THC in the plant, S.B. 326 focuses on the amount of THC or other intoxicating cannabinoids found in a finished product.
Under the legislation, the Ohio Director of Commerce would be authorized to impose administrative penalties against a person who sells intoxicating hemp products, including up to:
- $10,000 for the first violation;
- $25,000 for the second violation; and
- $50,000 for a third or subsequent violation.
The bill would require the Ohio Investigative Unit to investigate any violations and to enforce the criminal penalties outlined in the legislation.
S.B. 326 was referred to the Senate General Government Committee and is scheduled for its first hearing on Nov. 12, when lawmakers return to the General Assembly for the start of their lame-duck session. Ohio lawmakers remain in session through the end of the year.
Huffman’s bill comes three months after Ohio’s licensed cannabis dispensaries launched adult-use sales. In the first three months since that program launch, the state’s retailers have sold more than $143 million in adult-use cannabis and $94 million in medical cannabis, according to the state’s Division of Cannabis Control. The combined total represents an annual rate of roughly $975 million in sales, an underwhelming figure compared to other state markets.
For example, Pennsylvania’s medical-only market is on pace for $1.7 billion in sales in 2024, according to the state’s Department of Health. Meanwhile, Missouri ($1.4 billion), Arizona ($1.3 billion) and Maryland ($1.1 billion)—all with populations of roughly half of Ohio’s—are outpacing the Buckeye State’s dispensary sales.
For Ohio’s licensed cannabis businesses that pay premiums to operate in the regulated space, from a 10% excise tax on sales to testing, packaging and labeling requirements, track-and-trace requirements, licensing fees, federal tax deduction limitations and other factors that cut into their bottom line, the intoxicating hemp-derived cannabinoid market is viewed as direct competition that’s been provided a leg up.
In addition, with more than 100 local moratoriums enacted by Ohio jurisdictions to prohibit adult-use cannabis sales in their localities, vape and smoke shops can currently sell unregulated hemp-derived cannabinoid products where licensed cannabis dispensaries cannot.
While Huffman’s S.B. 326 would diverge from the federal definition of hemp, Ohio would not be the first state to crack down on intoxicating hemp-derived cannabinoid products.
Not only have state attorneys general taken action to quell the proliferation of intoxicating hemp products, including in states like Colorado, Arizona, Indiana and South Carolina, but governors in California and Missouri took executive action to prohibit these products, and New Jersey’s governor signed legislation to restrict their sale in recent months.
This comes at a time when industry data and analytics provider Whitney Economics estimates the U.S. hemp-derived cannabis market to be conservatively valued at more than $28 billion (including nonintoxicating CBD products).
At the federal level, Sen. Ron Wyden, D-Ore., introduced legislation in September to regulate the intoxicating hemp-derived cannabinoid market, while Sen. Rand Paul, R-Ky., also introduced legislation in September to increase the THC threshold defining hemp from 0.3% to 1% THC.
