An influential conservative nonprofit organization called American Legislative Exchange Council (ALEC) is putting together a draft bill that should serve as a model for the few states which have not yet passed enabling laws for the hemp and CBD industry. The draft bill was presented and discussed during this year’s annual general meeting that was held in Austin, Texas last week.
ALEC is a body which brings together private sector stakeholders on different issues and conservative lawmakers. Their purpose is to draft and disseminate model policies which different states can consider as they discuss legislation for different topics of concern.
This year, the Task Force of ALEC in charge of Energy, Environment and Agriculture (EEA) discussed a draft law through which states can legalize the cultivation, extracting and processing of products from industrial hemp. The draft bill is categorical in stating that this legislation doesn’t legalize cannabis.
The model law seems to be made with those states that haven’t legalized hemp and its derivatives in mind. They include South Dakota, Mississippi and Idaho.
The provisions in this model law point to the fact that the bill is in line with the federal law legalizing industrial hemp. For example, hemp is defined as a cannabis plant whose THC content doesn’t exceed 0.3 percent of the plant’s dry matter. The draft bill also proposes that products derived from hemp are legal, which is the same as what the 2018 Farm Bill states.
However, the U.S. Food and Drug Administration (FDA) has ruled that hemp derivatives, such as CBD, cannot be used as ingredients in foods, cosmetics and dietary supplements unless alternative rules are developed for such a purpose.
The issue of CBD marks the point at which the draft bill formulated by ALEC’s Task Force departs from the ruling of the FDA. The draft policy states that CBD can be marketed as an ingredient in topical products and products that may be ingested orally or by inhalation by humans or animals as long as those products don’t contain THC.
It isn’t yet clear whether the draft bills were adopted by the Council, and how the members voted if the bill was put up for a vote. It isn’t also clear what the subsequent steps will be once ALEC adopts the hemp and CBD model law.
All the same, it is widely believed that industry actors like VIVO Cannabis Inc. (TSX.V: VIVO) (OTCQX: VVCIF) and VPR Brands LP (OTCQB: VPRB) take the bills written by ALEC seriously since they point to the direction legislation is likely to take.
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