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Montana regulators say they’ll revise proposed CBD ban

Cannabis regulators in Montana are rethinking a rule that would have kept hemp-derived products off dispensary shelves. The change in plans comes after feedback from the hemp industry spurred dialog among lawmakers and government administrators.

Earlier this month, hemp retailers prepping for the state’s transition to recreational cannabis use were surprised to learn that a new rule would stop dispensaries from selling hemp-derived products including CBD.

Now, legislators are saying the proposed rule was based on a misinterpretation of House Bill 701, according to the Helena Independent Record. The law, passed in April, laid out the framework for legalizing recreational cannabis use in the state.

Lawmakers also took issue with a rule that would allow the department of revenue to suspend or revoke cannabis-industry workers convicted of any criminal offense in Montana, or a cannabis-related crime in any state.

Both proposed regulations could be on the chopping block.

“[L]awmakers said Tuesday the proposals strayed too far from the framework signed into law earlier this year,” reporter Seaborn Larson wrote for the Helena Independent Record.

House Bill 701 did include a provision saying hemp and THC-rich cannabis cannot be grown on the same farms. And agents at the state’s department of revenue, who developed the regulations based on their understanding of the legislature's recreational marijuana package, interpreted that separation to extend to CBD and other hemp-derived products.

The issue was uncovered when staff at the revenue department told a bipartisan committee of the Legislature that the proposed rules were stoking ire in the hemp industry. Committee members said that was never the intent of the law.

Writes Larson: “Senate Minority Leader Jill Cohenour, a Democrat from East Helena who chairs the legislative committee, told Cosgrove such a ban was not intended by the Legislature. Cohenour was part of a small bipartisan working group that ferried the bill through the Senate after the House had passed three competing bills. Cohenour said lawmakers, like the department, have heard from providers who were frustrated with the department's interpretation.”

“It's a tough job and they've been very responsive. As long as they continue to be, I think things are going to be fine for legalization come Jan. 1.”

— J.D. Pepper Petersen, owner of a Helena dispensary and president of the Montana Cannabis Guild, as quoted in the Helena Independent Record

After lawmakers clarified the issue, an attorney for the Cannabis Control Division, Courtney Cosgrove, told them that the department of revenue would revise the rules before recreational use goes into effect Jan. 1.

"We have once weekly, sometimes twice weekly meetings on our rules," Cosgrove told the committee Tuesday. "This is on our radar. We will sit down and figure out how to address this. […]

"We are hearing from folks in the hemp industry that they have an interest in continuing to sell these products in a more medicinal environmental like a medical marijuana dispensary as opposed to a Town Pump [gas station]" Cosgrove told Senators.

Acknowledging the misinterpretation, Department of Revenue Director Brendan Beatty defended the work of staff at the agency.

"We are doing our very very best to effectuate legislative intent," he said. "That bill is anything but a piece of perfection as far as legislative intent goes. So please help us out. That thing goes live Jan. 1 whether we have rules or not and we need rules."

And people do seem understanding. J.D. Pepper Petersen, owner of a Helena dispensary and president of the industry trade group Montana Cannabis Guild, commended the department of revenue’s willingness to revise the regulations.

"It's a tough job and they've been very responsive," he told the Record and other Montana papers Nov. 9. "As long as they continue to be, I think things are going to be fine for legalization come Jan. 1."

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