Malkin Law recently wrote about how hemp may be used in alcohol products for SevenFiftyDaily. TTB had previously not provided much guidance on this topic since releasing its hemp policy in 2000. Now, TTB released, through an FAQ, additional explanation. This does not change the hemp policy, but merely provides some clarification. The FAQ is pasted below for convenience: Will TTB approve any formulas or labels for alcohol beverage products that contain a controlled substance under Federal law, including marijuana? TTB will not approve any formulas or labels for alcohol beverage products that contain a controlled substance under Federal law, including marijuana. The Controlled Substances Act (CSA), 21 U.S.C. § 802(16), defines marijuana as all parts of the Cannabis sativa L. plant (and its derivatives) with certain specific exclusions. Substances (such as tetrahydrocannabinols (THC), cannabidiols (CBD), or terpenes) that are derived from any part of the cannabis plant that is not excluded from the CSA definition of marijuana are controlled substances, regardless of whether such substances are lawful under State law. See Drug Enforcement Administration (DEA), Clarification of the New Drug Code (7350) for Marijuana Extract for more information about DEA’s position on cannabis derivatives. The parts of the cannabis plant that are excluded from the definition of marijuana in the CSA (referred to here as “hemp” ingredients) include hemp seed oil, sterilized hemp seeds, and non-resinous, mature hemp stalks. Formula approval from TTB is required before a hemp ingredient may be used in the production of an alcohol beverage product. In determining whether a hemp ingredient is allowable for…

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San Francisco’s Black Hammer Brewing was ordered by the TTB to cease production of all of its CBD beers. The TTB requires special approval for any non-standard beer ingredients, which the brewery did not receive. Plenty of materials that are food-safe aren’t on that list, so breweries will often apply for special approval of their formula when they want to use one. Hemp is not on the list. Nor are terpenes, the compounds that Black Hammer uses to imbue beers with that cannabis flavor. The hemp-derived CBD does not have any flavor on its own. Black Hammer intends on complying with the TTB regulations, and has already begun the process of applying for approval for hemp so that it can resume CBD brewing. In the meantime, the brewery can sell the CBD infused beers that it has already produced.

The Small Business Administration (SBA), a United States government agency that provides support to entrepreneurs and small businesses, recently made things harder for loan seekers with even a remote affiliation to the marijuana industry. Previously, SBA refused to grant government backed loans to businesses with direct involvement in the  industry, even if the business was legal under state law. Now, according to a CNBC report, the new SBA rule goes much further and also precludes lending to any firm that is even indirectly doing business with a marijuana-related operation, significantly expanding the number of businesses no longer eligible for SBA-backed loans. The rule defines such a business as one that “derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonably be determined to support the use, growth, enhancement or other development of marijuana.” In Places like Colorado and California, where marijuana-related operations comprise such a substantial part of the economy, many otherwise legal business operations may now be ineligible for SBA loans.

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