CBD and Hemp Legal and Regulatory Roundup – February 2022 | JD Supra

CBD and Hemp Legal and Regulatory Roundup – February 2022 | JD Supra

Welcome to our weekly roundup of CBD and hemp-related legal and regulatory news:

N.C.-based We CBD pushed back against Calif.-based Planet Nine Private Air’s allegations the company didn’t secure the necessary travel documentation, arguing the plane company doesn’t allege what that documentation is. We CBD said the deficiency alone “renders this allegation insufficient to support a breach of contract claim.” Planet Nine states the required documents are to be given to it before travel. “Planet Nine neither alleges that those documents were not given to it before travel nor explains why – if it did not receive the required documents before travel – it travelled anyway.” We CBD asked a N.C. federal judge to dismiss the counterclaims, arguing they’re too vague. Law 360 (sub. req.)

The USDA released the results of a substantial, first-ever federal survey on the hemp industry, providing the agency with a benchmark analysis of the economic impact of the legal market. The researchers determined the hemp market’s value reached $824 million in 2021, with about 54,200 acres grown across the country. The department revealed plans for outdoor hemp production, acreage for operations, primary and secondary uses for the crop and what kinds of prices producers can bring in. It included responses linked to preparations such as smokeable hemp, CBD extracts, grain for human consumption, fiber and seeds. Marijuana Moment

A proposed rule by the Marijuana Regulatory Agency in Mich. states hemp growers will be allowed to sell to marijuana processors, who could then synthesize it into THC for use in edibles and vaping cartridges. The changes present an additional market for hemp growers, but also another competitor for the state’s legal cannabis industry. The rules require that any product derived from synthesized THC be labeled as such. mLive

A bill providing N.Y. hemp farmers a conditional license to grow, process and distribute adult-use marijuana products is going to the governor’s desk after being passed by the state legislatures. It’s designed to encourage the state’s projected $2.5-billion recreational marijuana industry by providing more initial supply, as well as support the program’s social equity goals. MJ Biz Daily

AgrotecHemp argued the products described in its PUREXXXCBD application were made from “hulled hemp seeds, hemp seed protein and hemp seed oil” and are generally recognized as safe by FDA standards. However, the Trademark Trial and Appeal Board ruled the FDA designation “does not obviate” the products’ unlawfulness under the Federal Food, Drug and Cosmetic Act, which requires products containing CBD to be approved for their intended use before they can be introduced into interstate commerce. The TTAB refused to register the term “PUREXXXCBD” as a trademark for dietary supplements containing cannabidiol, finding that because the ingredient is unlawful, the company can’t legally intend to use the mark. Law 360 (sub. req.)

Kenneth Gay alleges he fulfilled all the criteria in Sacramento’s Cannabis Opportunity Reinvestment and Equity (CORE) program, except he couldn’t prove he ever lived in the city. Sacramento enacted the CORE program in 2018, providing fee waivers and other support for cannabis entrepreneurs who are current or former city residents and fulfill other requirements, such as having a cannabis conviction or residence in a low-income neighborhood. Gay says he was summarily denied admittance in the program for his business, Peridot Tree, because he couldn’t show he ever lived in Sacramento, and the winning CORE applicants were all locals. He claims this is a violation of the dormant commerce clause, specifically, the city had “enacted laws that limited applications for storefront dispensary cannabis licenses to California residents.”Law 360 (sub. req.)

Court of International Trade Judge Gary S. Katzmann ruled Customs and Border Protection’s decision to seize Root Sciences’ imports prevented them from triggering a “deemed exclusion.” The seizure decision halted a trade law provision designed to keep CBP from indefinitely holding shipments, even though mailing issues kept Root Sciences from receiving notices that the goods had been detained ahead of a 30-day deadline. The company countered that only an admissibility decision stops the clock on deemed exclusions. Because the court explicitly stated the seizure was not an admissibility decision, it created a legal loophole through which CBP can hold goods in a “procedural limbo,” Root Sciences argued. “This court has a singular opportunity to bring order to what has been a chaotic area in Customs administration,” Root Sciences said. “There is no reason why CBP’s erratic handling of seizures, and particularly this one, should create havoc in what Congress intended to be a clear, computable path … for importers to file exclusion protests and invoke this court’s jurisdiction over denied protests.” Law 360 (sub. req.)

Thurston County Superior Court Judge Indu Thomas stated retail cannabis shop Better Buds violated state law by unlawfully delivering cannabis to customers on various dates in 2020. The Wash. State Liquor and Cannabis Board argued “state law makes it clear that marijuana delivery is prohibited for commercial purposes.” The regulator issued two administrative violation notices to Better Buds in Apr. 2020, notifying the shop of its alleged violation. The notice also assessed a penalty of a five-day license suspension or a $1,250 fine for the violation. After failing before an administrative law judge, Better Buds petitioned again in May 2021, leading the matter to state court.Law 360 (sub. req.)

Stable Road Acquisition and commercial space business Momentus asked a Calif. federal court to let them out of a proposed investor class action, arguing the shareholders didn’t properly back up their claims about company misstatements. The companies argued the claims made against them by a proposed class of investors led by Hartmut Haenisch should be dismissed with prejudice. The SPAC notes Haenisch conceded in the latest version of the complaint that information he alleged should have been disclosed wasn’t shared with Stable Road and that the SEC declined to bring the very same claims that the plaintiff asserts. Law 360 (sub. req.)

A complaint filed by Blaze Solutions alleges BWS Holdings, which does business as ServiceGanja, stole large portions of its code to create its own similar product, violating the Copyright Act of 1976 and unfair competition under federal and Texas law. Blaze’s “420connect” application allows cannabis companies to increase productivity within their dispensaries and provides delivery services to enable businesses to grow and run in a compliant manner. Blaze argues ServiceGanja accessed the code for Blaze Works and reproduced, distributed and sold software that either utilizes portions of Blaze Works or is substantially similar to Blaze Works. Law 360 (sub. req.)

The USDA asked the Ninth Circuit to uphold a Calif. federal judge’s finding that it may continue to allow hydroponic growers to label their goods as “organic,” while a group of consumer interest advocates and traditional organic farmers is asking the appeals court to overturn the ruling. The USDA said hydroponic practices fully comply with the federal Organic Foods Production Act, which doesn’t explicitly prohibit labeling hydroponically grown food as organic. The question is whether Congress intended to bar such a practice by mandating in the law that “crop production farm plans include ‘provisions designed to foster soil fertility.’” However, notes the agency, there’s no reason to conclude or suggest the department was required to forbid organic certification of an entire category of crop production. “Rather, the requirement in question is naturally read to apply to producers that do use soil in growing crops,” the USDA stressed. Law 360 (sub. req.)

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