How are Minnesota businesses navigating the state’s recent change in hemp law, and what do state officials and legal experts believe will happen next? On October 25, TCB hosted a conversation about the intricacies and implications of the surprise legislation change in July that suddenly made it legal to sell food and drink containing up to 5 milligrams of any form of THC, as long as the substance is derived from hemp in Minnesota to consume, manufacture, distribute  that suddenly opened the door for production and sale of THC beverages and edibles. Below are four takeaways from our panelists. Watch a replay of the entire virtual conversation for more.

Panelists:

Anthony Cortilet, Leader, Department of Agriculture Industrial Hemp Program
Nicola Peterson, CEO, Verist LLC
Jason Tarasek, Founder, Minnesota Cannabis Law
Tom Whisenand, CEO and Co-Founder, Indeed Brewing

Moderated by:
Allison Kaplan, Editor-in-Chief, Twin Cities Business with associate editor Winter Keefer

Advocacy for responsible regulation 

Right now, there is minimal regulation and no licensing structure in place for retailers, said Jason Tarasek, a cannabis attorney with Minnesota Cannabis Law.

“I’m hopeful that when the legislature reconvenes in January that we’ll put some more guardrails on this because right now it really is the wild west,” he said. “Anyone can jump into this market. Anyone can sell it. You know a lot of my clients, quite frankly, are a little miffed because they’re following the law but maybe the smoke shop down the street isn’t. It doesn’t seem fair to them that they’re taking consumer safety seriously and maybe someone else isn’t. So we need to tighten that up I think for the benefit of the public at large, consumers, and the industry.”

Being already established helps business pivot as laws change

Hemp-derived THC is no different than regular THC, said Nicola Peterson co-owner of Verist, a line of THC and CBD products grown and made in-house at Peterson’s family farm. Prior preparation for possible adult-use marijuana legalization made it easier for Peterson’s family farm to pivot and establish hemp-derived THC products when the law change went into effect. The business is also prepared to pivot again if adult-use marijuana is legalized down the line.

“Being a hemp grower, for us, was adding another skew to what was already our established CBD line, it wasn’t that big of a pivot,” she said. “We had heard rumblings in the legislature that this was maybe coming down the pipeline, so being a hemp grower and already having a CBD line, we always kind of in the back of our head think about when adult (marijuana) use becomes legal in our state. We do think it is inevitable that it will happen.”

Be careful. Do your homework. Get a lawyer. 

There’s a lot to learn about the complexities around the help and THC market, said Anthony Cortilet, Hemp Program Manager for the Minnesota Department of Agriculture. Cortilet recommends businesses entering the market to get a lawyer.

THC, the psychoactive component in marijuana plants, became part of the legal definition of hemp after the 2018 Farm Bill went into effect. The law, which went into effect in 2019, removed hemp from the Controlled Substances Act. The law defined hemp as a plant containing no more than 0.3% of Delta-9 THC in its dry-weight form.

“There’s a lot to learn here. Between the number below 0.3% and above 0.3%, it’s a whole different world and you need to take it seriously,” Cortilet said… “Be very cognizant of who you’re talking to. I’m sure a lot of the folks on here are entrepreneurs and have dealt with folks who have tried to sell them everything under the sun.”

Marketing options are limited 

When Tom Whisenand, Indeed Brewing’s CEO, puts any information up about the breweries new Two Good THC seltzer on Instagram, it’s immediately taken down. Word of mouth and Indeed’s Minneapolis taproom, with about 200,000 people coming through within the year, has been the only way the company had been able to advertise its own products.

Both Indeed and Verist have run into issues trying to advertise their products. They are unable to have TV or radio ads run. Social media sites also take down posts that promote these products.

“You won’t be seeing an Indeed THC product billboard anytime soon,” Whisenand added.