Nebraska Delta-8 Update

As retailers continue to enter the Delta-8 THC market in Nebraska, much uncertainty remains regarding how long the unrestricted sale of Delta-8 THC products will continue in this state. Since we published our last article on Delta-8 THC in October 2021, several additional states have taken steps to ban or regulate Delta-8 THC products. This includes South Dakota, which recently passed a bill making it illegal for persons under 21 to buy Delta-8 THC products.

As we have previously discussed, Delta-8 THC provides a similar, but milder euphoric effect compared to the more common Delta-9 THC (which is abundant in commercially produced medical and recreational cannabis).  However, Delta-8 THC does not occur naturally in high concentrations in cannabis plants and must be extracted from CBD oil using a chemical synthetization process. Delta-8 THC became legal in Nebraska through a loophole in the Nebraska Hemp Farming Act, which made hemp products legal in Nebraska as long as they had a Delta-9 THC concentration of not more than 0.3 % on a dry weight basis.  

Since we published our last article on Delta-8 THC, we are not aware of any potential legislation that would impact Delta-8 THC sales in Nebraska nor has the Nebraska Attorney General issued any statement or opinion regarding its legality (as he was requested to do by Governor Ricketts).  However, there has been other activity that does not bode well for Nebraska Delta-8 THC retailers.  For example:

• CBD Oracle, a website that reviews hemp-derived products including CBD as well as Delta-8 THC products, sent 51 different Delta-8 THC products to FESA Labs, a licensed testing company in Santa Ana, California, to see if potency levels and other metrics printed on the products’ labels were accurate. The results of these tests determined that (i) 76% of tested products contained Delta-9 THC at greater than the 0.3% limit set by the 2018 Farm Bill, making them federally illegal (and illegal in Nebraska) and (ii) 77% of products tested had less Delta-8 THC than advertised, on average containing 15% less than the advertised amount.  The inaccurate labeling and the inconsistent (and illegal) THC levels contained in Delta-8 products have been a reason many opponents have used to push for restrictions on their sale.

•  The Food and Drug Administration has issued safety warnings regarding Delta-8 THC products based on the unregulated nature of the production process. Some manufacturers may use potentially unsafe household chemicals to make Delta-8 THC through the chemical synthesis process needed to extract it. Final Delta-8 THC product may therefore have potentially harmful by-products and contaminants due to the chemicals used in the process, and there is uncertainty with respect to other potential contaminants that may be present or produced depending on the composition of the starting raw material. In addition, manufacturing of Delta-8 THC products may occur in uncontrolled or unsanitary settings, which may lead to the presence of unsafe contaminants or other potentially harmful substances.

• The Attorney General for the State of Kansas issued an opinion in December 2021 which stated that Delta-8 THC is illegal under Kansas law.  While such opinion does not constitute binding law in Kansas, it has led to raids on certain Kansas Delta-8 retailers and County Attorneys pursuing charges against such retailers.

For now, Nebraska retailers appear safe, but that could change at any time.  Retailers are urged to move cautiously and limit any large-scale investments in a Delta-8 THC business until the future landscape becomes clearer.  If you have any questions about Delta-8 THC or other cannabis issues, attorneys at Erickson | Sederstrom can assist you. Attorneys Shay Garvin or Andrew Collins can be reached (402) 397-2200.

Medicinal Cannabis in Nebraska May be Coming Soon

A registered ballot question committee, Nebraskans for Medical Marijuana, has been working to gather signatures to place two initiatives on the Nebraska ballot in November later this year.   If these initiatives are added to the ballot, and confirmed by a majority of voters, they would serve to legalize the possession and use of cannabis for medicinal purposes in Nebraska.

The legalization of cannabis for medicinal purposes would be a significant departure from Nebraska’s historic stance against it.  While the Nebraska Hemp Farming Act was passed in 2019, the intent of this legislation was to legalize industrial hemp in Nebraska, and not the use of cannabis for any of its psychoactive properties (for medicinal use or otherwise).  In addition, several medicinal cannabis bills have been proposed and failed in the unicameral in the past few years.  Also, in 2020, a medicinal cannabis measure that would have been on the 2020 ballot was invalidated by the Nebraska Supreme Court after a determination that the initiative violated Nebraska’s single subject rule.  

However, the tide may be changing.  Many former cannabis opponents have recently appeared to alter their stance on medicinal cannabis.  For example, in January 2022, former State Senator Mike Groene, who had previously been outspoken against the subject, sponsored LB1275, which would legalize cannabis use for a limited number of medical conditions and authorize a defined number of dispensaries to operate in the state. In addition, Governor Ricketts (who appeared in an ad as recently as December 2021 advocating against medicinal cannabis) recently stated that he was “open to learning more about [LB1275]”.   Advocates for medicinal cannabis in Nebraska believe that these shifting viewpoints are evidence that cannabis opponents believe they can no longer keep the public sentiment on the issue at bay, and such opponents would rather control medicinal cannabis through legislation instead of a voter approved constitutional amendment.

In anticipation of medicinal cannabis becoming a reality in Nebraska, potential cultivators, processors, retailers, and other participants have already begun making plans for this possible new market.Since cannabis that is used to treat medical conditions is currently illegal under federal law (making transportation across state lines illegal), such cannabis is typically grown and processed in the state where it will be sold.In Nebraska, legal medical cannabis would likely result in the construction and/or leasing of large-scale cultivation and processing facilities where medicinal cannabis goods would be grown and produced, as well as new markets for the transportation, storage, and retail sale of such goods.We are currently advising clients on a multitude of issues related to these new markets, including banking, leasing, and transportation. If you have any questions about cannabis issues, the attorneys at Erickson | Sederstrom can assist you. Attorneys Shay Garvin or Andrew Collins can be reached (402) 397-2200.