State CBD oil seizures sow confusion in cannabis industry

A statewide seizure of imported hemp cannabidiol oil products last week from licensed cannabis stores has shaken up Alaska’s new commercial cannabis industry — and also sown confusion among hemp and cannabis advocates. These are the latest developments:

• Homer Police have been advised that retail stores not selling cannabis and not licensed by the Alcohol and Marijuana Control Office, or AMCO, are “allowed” to have and sell cannabidiol, or CBD, oil and products.

• AMCO interprets hemp and cannabis with very low tetrahydrocannabinol, or THC, as being the same as cannabis with high amounts of THC. THC is the psychoactive component that gives pot its buzz or high. AMCO will continue to enforce cannabis licensing statutes and regulations under Title 17, the section of Alaska law that made commercial cannabis legal in a citizen initiative.

• Meanwhile, Senate Bill 6, a bill legalizing industrial hemp, has been introduced by Sen. Shelly Hughes, R-Palmer, with hearings held Wednesday.

• The federal government allows hemp oil with low THC to be imported and sold, although many states do not allow industrial hemp. Some foreign countries, such as France, have an industrial hemp agriculture.

In Homer, one store, Panama Reds on East End Road, remains selling dog treats, Alaska Cannivore, made with CBD oil, although it briefly removed the product last week.

“Everything is back on the shelf until someone tells us it’s illegal,” said Panama Reds manager Beth Carroll.

Homer has no licensed cannabis retail stores, although there are some licensed growers outside of city limits. Panama Reds sells gardening supplies to cannabis and other growers, but is not licensed to sell cannabis products regulated by AMCO.

On Feb. 9, several retailers confirmed that AMCO enforcement seized thousands of dollars worth of imported CBD oils. Until they know what it is, officials said, licensed Alaska retailers shouldn’t be selling it. The products came from outside Alaska and were not packaged according to Alaska marijuana regulation, though federal law makes similar hemp oils with low THC concentrations legal for sale in all 50 states. Hemp is a cannabis strain of cannabis with a very low THC content.

Carroll said CBD products can be bought online through Jack Bennett, a Homer hemp advocate, said he’s not alarmed by the crackdown on licensed cannabis retailers.

“Even Walmart sells it,” he said of CBD oil. “They’re all just trying to figure it out.”

Homer Police Chief Mark Robl said Officer Larry Baxter researched the issue regarding sale of CBD oils. In an email Robl shared with the Homer News on Tuesday, Baxter said an AMCO investigator offered some limited guidance.

“As of right now, if a shop or store does not have a license to sell marijuana, then they are not enforcing anything on them, and they are ‘allowed’ to have/sell the CBD oil,” Baxter wrote.

AMCO will enforce and prohibit sale of CBD oil at licensed cannabis facilities, Baxter also wrote.

Acting AMCO director Sara Chambers said in an email that AMCO is the lead on enforcing marijuana licensing statutes and regulations under Title 17, the state law that made commercial cannabis legal after voters approved an initiative legalizing cannabis for personal, medicinal and commercial use.

Baxter said he was told part of the confusion stems from different definitions in Title 11, the criminal statutes regarding cannabis and other drugs, and Title 17, the statute regulating commercial cannabis.

Title 11 says marijuana “does not include the resin or oil extracted from any part of the plants,” while Title 17 says marijuana is “the resin extracted from any part of the plant” but “does not include fiber produced from the stalks, oil, or cake made from the seeds of the plant.” In theory, CBD can be made from stalks, and if thus made might not be subject to regulation by AMCO.

“Almost every part of the cannabis plant, even in the roots, has cannabinoids,” said Jeremiah Emmerson, a Homer cannabis consumer advocate, referring to the chemical compound from which CBD can be made.

However, AMCO treats all cannabis products as being subject to regulation, Chambers said.

“Alaska law does not recognize industrial hemp or cannabis with a low THC content as being anything different from cannabis as defined in the marijuana statute AS 17.38. That statute requires a license to sell cannabis, regardless of the THC content,” she said.

The seizures of CBD oils started last week when U.S. Postal Service officials notified AMCO that postal workers found packages with leaking CBD oil from vials. AMCO investigators found 20 unmarked vials and because of health concern seized the products.

AMCO noted a 2013 Department of Justice letter, the Cole Memorandum, in which the federal government said it expects states with legal cannabis “to implement strong and effective regulatory and enforcement systems.” The feds expect Alaska to regulate all cannabis, even if CBD oils might be allowed elsewhere.

CBD oil has been made into tinctures, lotions and other topical therapeutic products for pain management and even epilepsy treatment.

Michael Armstrong can be reached at DJ Summers of the Alaska Journal of Commerce and James Brooks of the Juneau Empire contributed to this story.