Hemp industry wants its THC-infused products back in Arizona stores

We all know you can get marijuana products at cannabis dispensaries all over the state today. But for a while, you could get other products that get you high at local convenience stores.

They were hemp products — like gummies, vape pens, seltzer drinks, pre-packaged brownies and even chocolate bars. They’re often labeled as THC blends. and they contain other strains of psychoactive ingredients, like Delta-9-THC.

Until recently, they were unregulated in Arizona and easy to get. That is, until Arizona Attorney General Kris Mayes cracked down on these products, declared them illegal in the state and forced stores to take them off the shelves.

Now the hemp industry is suing and trying to convince a judge to let them put the THC-infused products back on the shelves in Arizona while the lawsuit plays out.

Ray Stern is covering the story for the Arizona Republic. He joined The Show to explain where it all stands and what’s next — beginning with the difference between these hemp products and other marijuana products you’d find in a licensed dispensary.

Full conversation

RAY STERN: It's kind of a regulation landscape situation. The hemp products and hemp itself is the same exact plant that is used in marijuana. And so hemp and marijuana, essentially they both come from a plant called cannabis sativa, and hemp by federal law can't contain more than 0.3% of THC, Delta-9-THC in particular, and this is the psychoactive ingredient that gets people high, and Delta-9 is the is the typical type of THC that gets people high because it's naturally occurring in marijuana. And with hemp you can actually extract the very small amount of THC and concentrate it.

LAUREN GILGER: OK, so if you're buying these kind of hemp products, what are we talking about? Like this is something that will get you as high as something in a cannabis dispensary?

STERN: That's right. If the label is correct, which isn't always the case, and it says Delta-9-THC and 100 mg, it is essentially the same product that you would get at a dispensary with a 100 mg marijuana THC product. I guess you could, you know, if you could compare them, it would get you exactly as high.

GILGER: Man. OK, so before the AG crackdown, where could you get these? Like these were just available, you know, at your convenience store, at a gas station?

STERN: Right, because there's confusion, you could say, over the legal situation, there's like two realms where you can find these products. The marijuana products, of course, are at the dispensaries. Voters in Arizona legalized that with medical marijuana in 2010 and then for recreational, anyone 21 or over, in 2020.

Meanwhile, in the background, there's this thing called the 2018 Farm Bill, and it's just so ironic that marijuana remains federally illegal, and yet it's, you know, obviously proliferated across about half the states because of states' rights and the states like Arizona that have decided that marijuana will be legal in these states. And then you have the states like Arizona that declared that hemp products with THC are illegal. But those are legal federally.

So yeah, totally backwards, totally confusing. But there's this 2018 Farm Bill, which controls a lot of the agriculture policies in the United States, and it has a provision on hemp, and in 2018, there was a part added that basically said that the extracts for these hemp products are allowed.

And, you know, the light bulbs went on and a lot of entrepreneurs' minds at that point, they're like, well, we could sell Delta-9-THC, Delta-A-THC, which is sometimes called weed light, and so then these products began to be sold in places that were other than dispensaries and allowed a different consumer often to get them …

GILGER: A younger consumer …

STERN: A younger consumer sometimes because there, even though there's no official age range for this, people kind of understood that 18, you know, if you're selling it to someone under 18, that could be a problem. So I think that people 18 to 21 enjoy these products. And then also in states that don't have legal marijuana like Texas, these kinds of smoke shop products have really proliferated there.

GILGER: Interesting. OK, OK. So some people have called this basically a loophole in that Farm Bill in which these kind of products were allowed to be sold, but our attorney general here in Arizona found out about this and said, no, this is not legal under the Arizona statute. What's your argument?

STERN: Well, the argument is that it's unregulated and that voters basically created a regulated environment for marijuana, then you have this product that's basically the same as marijuana but it's not sold in dispensaries.

Nobody knows for sure if people are checking age IDs. There's a testing requirement in the marijuana law that requires marijuana to be tested for not only potency but contaminants like heavy metals or pesticides and nobody knows if that's being done on the hemp products. Some hemp manufacturers say they're doing it, but it's not checked at all.

So there's just this unregulated landscape. And then also the marijuana industry in Arizona, they hate this because they're not seeing the profits from the THC hemp products. They're being sold at smoke shops, and they've lobbied against it. They've tried to defeat bills that would essentially regulate the hemp market but also legalize it and make it allowed to be in, you know, the smoke shops and whatnot. The dispensary industry does not like that.

GILGER: Right. OK, so we saw the AG crack down and threatened fines, threatened raids on places that were selling these products in Arizona. Have we seen any of that happen?

STERN: I haven't heard of any raids yet, and I ask every now and then because that would be interesting if that's going through, but I also haven't heard of the hemp sellers that are testing the system. The AG Kris Mayes, she said, could have a fine of up to $20,000 per item that you're advertising for sale.

Total Wine, for example, which is a national liquor company, they had an entire aisle full of these THC drinks that they were selling before the AG cracked down on it. So that would have been millions of dollars in fines. They closed all that up, and they don't sell it now.

GILGER: OK, so no one's really testing that, but there is a lawsuit over this. Who's suing?

STERN: The Hemp Industry Trade Association of Arizona. Just to get a little bit of the background here, this started out as like a farming situation, with the bill in Arizona that Doug Ducey signed, former governor, to allow industrial hemp. And then, the whole industry changed from like farming into these products that are sent here from other states, often, they're often not made here, they have the THC in them.

And so that the whole concept of it changed, but at the same time, these people are happy to be making money. They're making a lot of money. They're employing thousands of people. And so the hemp industry is saying, look, this, this actually has some legal, well, loopholes or, you know, it's not loopholes from their point of view. It's legalities that they can sell this stuff on a federal level …

GILGER: Yeah, on a federal level …

STERN: And so the crackdown obviously hurts the industry quite a bit and they've tried to stop the crackdown. Unfortunately for them, they failed on the lower court level. And so now they're appealing to the appeals court in Arizona.

GILGER: And it could very well end up at the state Supreme Court, it sounds like.

STERN: It could, yeah, and the judge in the trial court case, Judge Randall Warner, they're trying to overturn his decision that basically we've got two laws in Arizona. There's the one for marijuana and there's the one for hemp, and these two are not compatible. So if you're selling hemp and it's got THC in it, that has to be sold at a dispensary. The judge did though say that maybe more legislation is needed because it's all a bit confusing.

GILGER: That leads me right to my next question, right? Like we have seen efforts to regulate these products and to create some kind of regulation framework from the state Legislature before. Has anything ever come to fruition?

STERN: It hasn't. Though last year I think it, it got as close as, you know, it's, it's come so far. Sen. T.J. Shope, who originally was against the hemp products, and he's, let's say, let's say that he's against the lack of regulation. Well, now he had signed on to a bill that would have allowed just hemp beverages like what Total Wine was selling. So that bill did get a little bit of support.

Ultimately it was not passed in the Legislature. And I talked to Sen. Shope recently, he said that he's still willing to look at that stuff, but he hasn't talked to anyone lately about it.

GILGER: OK, so we'll see what happens on that front.

Ray, are these kinds of products allowed to be sold in other states around the country? What does the national landscape look like here?

STERN: Yeah, it varies completely. And so you'd see big differences like in California, [Gov.] Gavin Newsom last year put out an emergency declaration for a hemp ban, and I understand that's been pretty effective, and the hemp THC products have been tamped down and they're doing enforcement there.

In Texas, which does not have legal marijuana like California does, where the smoke shops have, you know, the hemp products have proliferated there, the Legislature has tried to ban them, but it hasn't worked out yet. A bill just recently died a few weeks ago and so apparently hemp THC is still on the table in Texas.

GILGER: All right, so still a patchwork and an interesting national landscape on this.