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April 22, 2024 |  By: Rebecca Rivas - Missouri Independent

Missouri attorney general launches investigation of intoxicating hemp products

andrew bailey

By Rebecca Rivas - Missouri Independent

Missouri Attorney General Andrew Bailey launched an investigation into four companies Wednesday as part of an effort to crack down on intoxicating hemp products.

The problem, according to Bailey, is the products in question — such Delta-8 edibles and vape pens — are not clearly labeled to indicate that they’ll get you high.

“When purchasing products, Missourians have a right to know if they will be subject to serious and potentially dangerous side effects,” Bailey stated in his press release, “like psychotic episodes, severe confusion, hallucinations and other life-threatening problems.” 

Intoxicating hemp products are completely unregulated but can still be sold in places like bars and gas stations — because hemp is federally legal. 

However, everyone from the companies making these products to stores selling them to elected officials want to see age restrictions put in place by the state, along with label and testing requirements.

Two Republican lawmakers have proposed legislation to do that, but the bills would also likely ban a majority of the intoxicating hemp products currently on the market — putting hundreds of companies out of business. 

The large divide in how regulations should happen has essentially tanked the bills’ chances of making it to the governor’s desk.  

Bailey seems to be joining the push to regulate the products. However, it’s unclear exactly who he’s targeting.

Bailey issued a “civil investigative demand,” which are essentially subpoenas, to CBD Kratom Connect LLC of St. Louis, a company that several leaders in the hemp industry say they’ve never heard of and which has virtually no online presence indicating it is operating in Missouri. 

Some wonder if Bailey meant to target CBD Kratom, which is one of the largest intoxicating hemp companies in the state and country. 

When asked for clarification, Madeline Sieren, spokeswoman for the Attorney General’s office, said: “Unfortunately because the investigations are ongoing, I cannot comment beyond what is written in the CIDs.”

Also based in St. Louis, CBD Kratom has over 60 retail locations throughout Chicago, Dallas, Houston, New York, Philadelphia and St. Louis. And it has no connection to CBD Kratom Connect, the company’s owner David Palatnik told The Independent Thursday. 

During hearings regarding the proposed legislation, Palatnik testified in support of banning products that look like candy and are attractive to children — the exact issue Bailey is hoping to address by the investigations. 

“It’s an issue in the industry that some people sell child-looking packaging that is also fraudulent and is also a violation of federal laws,” Palatnik said. “So we’d agree with the attorney general on that front.”

His company ensures all its products have transparent labeling, he said. Palatnik says he opposed the legislation proposed in the Missouri General Assembly because of the harmful impact it would have on hemp businesses.

On Wednesday, Bailey also ordered an investigation into American Shaman, one of the largest intoxicating hemp companies in the state and country. 

Vince Sanders, owner of American Shaman, told The Independent Thursday that his company makes gummies and chocolates made with hemp-derived THC, but they’re sold in child-proof containers, similar to what is required by state law for marijuana products.

“They all say ‘21-plus,’” Sanders said. “If you’re in one of our stores, you actually have to sign a document that says you understand that these are psychoactive.”

Sanders has also been a vocal and influential opponent to the proposed legislation.

Two individuals also received investigation notices from Bailey: Cara Buchanan with Smoke Smart LLC in St. Louis and Tariq Zeiadeh with Vape Society Supplies in Columbia. 

An employee at the Smoke Smart location in St. Peters said Buchanan no longer owns the business or lives in Missouri, and the current owners do not operate as Smoke Smart LLC. Zeidadeh has not responded to a request for comment.

In his press release, Bailey states that he’s received reports that businesses were “potentially violating the Missouri Merchandising Practices Act, which grants Missourians the right to a marketplace free from fraudulent or deceptive business practices.”

Bailey also pointed to the six elementary-age children in St. Louis County who became sick and intoxicated at school after reportedly ingesting Delta-8 products that were packaged as “Nerds Rope Bites and Mad Monkey Sour Strawberry Premium Gummies.”

The attorney general’s office didn’t respond to The Independent’s question on whether any of the four companies under investigation made the products in the St. Louis County incident.

 

The great divide

 

Among the biggest supporters of the proposed legislation are leaders of the marijuana industry. The intoxicating hemp industry poses a major threat to marijuana businesses. 

Hemp is often known for being the part of the cannabis plant that doesn’t get people high. It’s full of CBD, a nonpyschoactive cannabinoid that helps people relax and often found in massage oils and sleep aids.

However, hemp was taken off the controlled substance list in 2018 by the last U.S. Agriculture Improvement Act, more commonly known as the farm bill. Since then, people have found numerous ways to make intoxicating products from hemp — largely through a chemical process of converting CBD to THC. The market for things like Delta-8 drinks and edibles is one of the fastest growing markets in the country.

Because of the farm bill, there’s no state or federal law saying teenagers or children can’t buy them or stores can’t sell them to minors — though some stores and vendors, including American Shaman and CBD Kratom, have taken it upon themselves to impose age restrictions of 21 and up. 

Mitch Meyers, partner at BeLeaf Medical, said at a recent industry summit that the intent of the bill was to put the hemp-derived products under the strict packaging and other requirements that marijuana companies must go through. 

“So that’s why we’re just in complete amazement that this stuff just can be out there without any of these checks and balances,” Meyers said.

The Missouri Hemp Trade Association has continuously advocated for measures such as prohibiting sales to minors and mandating clear user instructions and rigorous product testing.

The big problem the hemp industry has with the legislation is that it would place these products under the same constitutional framework and rules that the marijuana industry must abide by — including the mandate that products are only sold at licensed marijuana dispensaries regulated by the cannabis division within the Missouri Department of Health and Senior Services. 

There are no new marijuana facility licenses available currently, so there would be no way for the current hemp storefronts to sell these products.

Last week, Republican state Rep. Barry Hovis of Whitewater offered a different draft of the House legislation — backed by the hemp industry — that would allow the Division of Cannabis Regulation to issue licenses to companies that sell intoxicating hemp products, as well as oversee age restrictions and labeling requirements. 

Under Hovis’ proposal, the licensees would not come under other marijuana rules, which includes a ban on the “chemical conversion” process used to create the majority of hemp-derived THC products. The state rules also require that THC may only come from cannabis cultivated by a Missouri-licensed cultivation facility. Most hemp-derived THC is currently brought in from other states.

Few products currently on the market would meet these requirements. 

Hovis’ proposal failed, largely because the division said the licensing fee he proposed wouldn’t produce enough revenue to cover the division’s costs. 

“There’s something we need to do because of the unregulated market that we have right now,” Hovis said. “I do feel that for the safety of children… this would be a good move.”

State Sen. Karla May, a Democrat from St. Louis, said she plans on offering an amendment to Republican Sen. Nick Schroer’s bill to regulate these products, which will likely be similar to Hovis’ proposal. May said the license fees in her proposal will be higher.

Schroer’s bill could be brought up on the Senate floor for debate any time, May said, and that’s when she’d offer her proposal. 

“My only concern is that we get an independent structure for these businesses,” May said, “and that they don’t have to come up under marijuana. Because the only license they will be given is a microbusiness license and that is not fair to them.”