Minnesota Medical Cannabis Company Sues Over New Edibles Law

Minnesota Medical Cannabis Company Sues Over New Edibles Law

Vireo claims the state's new law discriminates because there is no chemical difference between marijuana-derived THC and hemp-derived THC.

Earlier this week, news broke that Minnesota medical marijuana company Vireo Health filed a lawsuit alleging that the state’s new hemp-derived THC edible law unconstitutionally discriminates against the company’s market for edible THC products.

Vireo claims in the suit it has been discriminated against and its constitutional rights have been violated due to the equivalent chemical makeup of THC derived from hemp and THC derived from marijuana. Hemp and marijuana are, for all intents and purposes, the same plant. But legally, marijuana is classified as containing more than 0.3% of THC, the plant’s psychoactive substance.

“The so-called ‘hemp statute’ that took effect on July 1 allows ill-regulated, THC-infused products to be sold at unlicensed gas stations, smoke shops, corner grocery stores and virtually any other retail location across Minnesota,” Vireo wrote in a statement addressing the lawsuit. “The THC (tetrahydrocannabinol) in these products – supposedly derived from hemp – is chemically identical to the THC derived from cannabis and produces the same effects. Consumers can’t tell the difference – nor can chemists, regulators or manufacturers – because there is no difference between THC derived from cannabis and THC derived from hemp.”

In this year’s legislative session, Minnesota lawmakers cracked open the door to the THC market, legalizing food and drinks containing up to 5 mg of any form of THC, so long as the substance is derived from hemp. Founded in 2014, Vireo Health was Minnesota’s first medical cannabis company and one of only two licensed cannabis cultivators in the state. Goodness Growth Holdings, Vireo’s parent company, was sold to a Chicago-based firm earlier this year.

LeafLine Industries, which was also sold to a Chicago company this year, is its only Minnesota-based medical marijuana competitor. But now Vireo claims it is competing with any retailer able to sell the newly legalized edible THC products.

The lawsuit goes on to make an unusual ask of the court. Filed in Hennepin County Fourth Judicial District Court on Sept. 14, the suit asks the court to rule that the company be allowed to sell its medical marijuana-derived THC edibles to people outside of the medical marijuana program, so long as those sales comply with the current regulations in place for hemp-derived THC edibles. The lawsuit names multiple state defendants including attorney general Keith Ellison, commissioner of the Department of Health Jan Malcolm, and director of the Office for Medical Cannabis Chris Tholkes, along with county attorneys in many of Minnesota’s largest counties.

A core issue Vireo addresses in its statement is a lack of lab testing enforced for hemp-derived THC, particularly as retailers import products from other states that have little or no regulation over those products.

“We are ready and eager to sell lab-tested edibles derived from cannabis. We hope that the Court will look favorably on our request and will act to protect consumers, patients, and Minnesota’s medical cannabis industry,” the statement reads.

But can a court make that sort of call?

Jason Tarasek, a cannabis attorney with Minnesota Cannabis Law who lobbied for the new legislation, doesn’t think so.

It is true that there is no chemical distinction between hemp-derived THC and marijuana-derived THC. But the legal distinction, Tarasek says, is significant because marijuana, legally defined as anything with 0.3% delta 9 THC or greater, still falls under the federal Controlled Substances Act. Tarasek doesn’t believe a judge could legalize this product recreationally. That would be up to the legislature.

“I think we all know, the current statute is not enough. We need greater regulation,” Tarasek said. “We need some measure of enforcement. It can’t continue in this way. This is not a responsible way to proceed. But that’s what the legislature is there for. We’re going to beef this up next session. We recognize the shortcomings and help is on the way.”

Plus, there’s nothing to stop Vireo from selling edibles that abide by Minnesota’s new law. “Essentially what this boils down to is they’re saying they’re being discriminated against in an unconstitutional manner because they’re being forced to change their business model,” Tarasek said. “But there’s nothing to preclude them from opening a subsidiary and just competing in the new hemp-derived THC market.”