Is The THC Law Here To Stay?

By Deborah Lynn Blumberg

When the Minnesota Legislature unexpectedly legalized certain hemp-derived tetrahydrocannabinol (THC) products last spring, consumers lined up outside shops to stock up on edibles. The media espoused on “gummy bears with a bite,” and edible THC products — from caramel popcorn to cookies to potato chips — flooded store shelves.

For cities, the products’ legalization in the last days of session accompanied by minimal guidance created immediate and numerous questions. The law, passed as part of Chapter 98, centers around Article 13, which makes changes to Minnesota Statutes, section 151.72 regarding the processing and sale of hemp-derived THC edibles and beverages. It legalizes products with less than .3% THC. Changes took effect July 1.

While the law focuses on how to package and label products and specifies sales only to those over 21, the onus of how and where to allow sales, plus enforcement, has fallen on the shoulders of cities. It’s a law unique to Minnesota — no other state has legalized adult-use cannabis in such a limited manner with little guidance. From Roseau to Rochester, local officials, with guidance from the League of Minnesota Cities, scrambled to make sense of it and decide if, and how, to craft new policies.

“What Minnesota did is very unusual,” says Patricia Beety, general counsel with the League of Minnesota Cities. “There’s no other scheme like this in the country. It’s kind of this middle ground, and it’s created a lot of work and attention to sort it out.”

LMC Communications Manager Julie Liew said media attention from across the country as to what cities may do was swift and hasn’t let up. “It’s been constant interest nationwide,” she says. “I’m surprised interest hasn’t tapered much.”

A booming market

Some link the original intention of the law to addressing a murky area with respect to a certain type of cannabis, Delta 8, which is a strain of THC. Delta 8 products were not explicitly prohibited on a federal level following a change in the federal farm bill in 2018. Delta 9, however, Delta 8’s stronger sibling, was prohibited.

“Delta 8 was on the market, and it was pretty widely unregulated,” says Alex Hassel, intergovernmental relations representative with the League. “These products were in a gray area, and this law was intended to rein in that market.”

The result was Minnesota’s law explicitly legalized THC products up to a certain threshold, including Delta 8 and 9. Hemp-derived THC edibles and beverages with five milligrams or less THC in a single serving, and less than 50 milligrams per package, are now allowed. Sales of these products exploded at establishments around the state, from gas stations to smoke shops.

“The bill created a market,” says Hassel, who helps educate cities on the law. “The market has boomed since, and these products are being sold at levels never seen before.”

While many other states that have adult-use cannabis have a robust, fully staffed oversight process, regulation is still a work in progress in Minnesota.

Hassel receives pictures several times a week from residents and officials of products in their community that fail to meet state requirements. For example, some stores are selling 50 milligram gummies, 10 times the allowed serving size.

“We’re seeing an influx of products that aren’t legal,” she says. “A lot have been from out of state, but now we’re seeing more made in Minnesota.”

Roundtables and policy options

The League mobilized to help its members tease apart the particulars of the law, and devise solutions and plans of actions.

Beety organized virtual roundtables for city attorneys to brainstorm what cities could do to regulate, limit, or even ban sales of the products within the framework of the law. Participants asked if cities had to act at all? The answer, determined the roundtable, was no.

“Statutes say local leaders don’t have to do anything,” Beety says, “so as a city, you could do nothing. Another consensus has been, you could regulate these products if you want to. So, we looked at what that would look like.”

Attorneys drew comparisons to tobacco and alcohol, both of which have state laws with respect to regulation but also allow for a degree of local control. Cities could develop a licensing framework that would allow them to control some of the hemp-derived THC edibles within their community. Ultimately, with guidance from the League, more than a dozen cities have opted to create a local licensing framework.

Lakeville, for example, held a work session on a proposed ordinance to get feedback from its City Council. Others, like Alexandria, went even further, completing a second reading of its ordinance. Restrictions that accompany these types of local policies could include not allowing sales in residential areas, prohibiting sales within a certain number of feet from a school or day care center, or requiring merchants to sell products behind a counter or in an enclosed case.

Other cities chose to put in place a moratorium of up to a year to ban the sale of products by new vendors while they study the issue and draft regulations to meet their needs. According to the League’s informal tracking, some 30 member cities have passed moratoriums on edible sales. The League is talking with industry players, and studying states and cities that already have licensing regulations.

“Ideally, you’d have some guidance or uniformity,” says Hassel. “But with the absence of that at the state level, cities have taken initiative. They’ve done a really good job stepping up and figuring out their needs. They’re crafting thoughtful ordinances and serving as examples to others.”

The vast majority of Minnesota cities — both large and small — appear to be taking a wait-and-see approach. Many are unwilling to put a plan in place they may later have to significantly modify or scrap altogether, following future guidance from the state, Beety says.

Maintaining local control

Plenty of gaps exist when it comes to the law, says Hassel. These include ambiguity around law enforcement, oversight on manufacturing of the products, and taxing products as a way to generate income to help with enforcement.

“Cities may want to add a separate tax on,” Hassel says, “and there are several ways that the state could do that in partnership with cities.”

Many questions remain, such as can cities refuse permits, and if so, on what grounds? Employment is also a murky area. Other states that have legalized cannabis have updated their employment laws to reflect the change and provide guidance — what exactly is legal to consume and what can be tested for.

“Our Minnesota law is silent on this,” Hassel says. “It’s a big conundrum for cities, and we need clarity on all these pieces.”

The League is developing a wish list for how the state and cities can partner to solve gaps as the law evolves. Critical is for cities to be able to maintain some degree of local control.

“We don’t want the state to tell cities exactly how to license products, and what they can or can’t include. We would want the ability to craft those as cities see fit, including the ability to opt out of doing licensing at all,” Hassel says.

It’s an opportunity, say Hassel and Beety, and cities can proactively lend their voice to add support for measures promoted by the League.

Looking forward

THC will likely be a big topic in the 2023 legislative session. “We have to be on our legislators, to tell them why this is an issue,” Hassel says. “There’s going to have to be more legislation on this to clean up the statute, but I wouldn’t predict it being easy to solve at the Legislature.”

The Board of Pharmacy supports legislation to create an Office of Cannabis Management to have authority issues related to cannabis, and members of the cannabis industry are requesting more regulations to clarify what is legal in Minnesota.

Beety commends cities for handling this unprecedented, challenging development with grace. “We’re in this unique area navigating something nobody ever had to deal with before,” she says. “I’m very proud of our cities. Within a short period of time, they’ve made some good policy decisions, even the wait-and-sees.”

Deborah Lynn Blumberg is a freelance writer.