Wisconsin CBD Retailer Arrested Due to Prohibited THC Levels Found in CBD Products including Delta-8

Recently, three operators of a Wisconsin CBD dispensary were arrested and are awaiting felony drug charges after failing to comply with the state law.  The investigation into the dispensary began when two minors consumed a CBD-related products their parents had purchased from the dispensary.  According to the sheriff’s department, several of the CBD-related products, including Delta-8-tetrahydrocannabinol (“Delta-8”) containing products, had THC level in excess of 0.3% set forth by the Agriculture Improvement Act of 2018 (“2018 Farm Bill”), and in turn, violated the state law.       

The dispensary’s owner stated that the store was targeted “because we’re pushing a lot [of Delta-8] onto the market.”  Wisconsin State law permits the sale of CBD products so long as the products contain no more than 0.3% THC level, consistent with 2018 Farm Bill.  Notwithstanding, the legal status of Delta-8 is unclear largely due to the conflict between 2018 Farm Bill and a Drug Enforcement Administration (“DEA”) regulation.  More specifically, the 2018 Farm Bill essentially removed all hemp-derived cannabinoids including Delta-8 from schedule I of the Controlled Substances Act (“CSA”) while DEA’s Interim Final Rule indicated that “[all] synthetically derived tetrahydrocannabinols remain schedule 1 controlled substances.”  Thus, Delta-8 manufactured from hemp-derived CBD is considered a controlled substance under the federal law.  In a similar vein, Delta-8 has not been directly addressed by Wisconsin State law.  However, we can glean from the current law, i.e., 2019 Wisconsin Act 68 on the State’s perspective on Delta-8.  According to the Act 68, “cannabidiol product” is defined as a derivative or extract of the plan Cannabis sativa L. that contains cannabidiol and a THC concentration at a level without a psychoactive effect.

How Frier Levitt Can Help

Regulation of hemp and its derivative products remains mired in a jumble of conflicting and unclear state and federal law.  Also, law enforcement’s wrongful seizure demonstrates a lack of knowledge and understanding of CBD, which may lead to business interruption and financial loss. Stakeholders should make sure they have a Plan of Action to address wrongful seizure and surrounding criminal issues, as well as appropriate commercial insurance coverage to mitigate the economic risks.  If your company handles hemp and its derivatives, contact Frier Levitt today to speak to an attorney.

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