• Oil Express Covers TFFA CBD Article

  • Oil Express Covers TFFA CBD Article

    Texas Allows Retail Station Owners to Sell Cannabis-Derived Products: TFFA

    The Texas Food & Fuel Association (TFFA) said that the likelihood of future
    police raids on convenience stores for selling hemp cannabidiol (CBD) are much
    more unlikely as hemp is no longer considered a Schedule 1 drug in Texas.

    Last Friday, the Texas Department of State Health Services officially removed
    hemp from its list of controlled substances, in effect making it legal to use,
    buy, sell and possess the plant and the CBD oil extracted from it, according to
    TFFA. The list of schedule 1 drugs in Texas include cocaine and heroin, it

    OPIS notes that CBD is a compound found in the cannabis plant, and it is said
    to help with pain, seizures and anxiety. It could be sold for medical and
    recreational purposes. The federal law continues to classify CBD as a Schedule
    1 drug, but many states have already legalized some or all forms of marijuana.

    "Because hemp CBD was removed by the Texas Department of State Health Services
    from the Texas Controlled Substances Act, it effectively makes it legal for
    retailers to sell," said Jesus Azanza, director of marketing and business
    development at TFFA.

    Prior to the new law passed last Friday, only a handful of CBD raids at
    convenience stores had taken place so far, most of those in rural counties,
    TFFA said.

    "While a few stores have had their products seized, inevitably any threatened
    charges have been dropped and no one has been prosecuted for selling CBD
    products derived from hemp," it added.

    Azanza said that Texas still has to pass HB 1325 which would legalize the
    cultivation of production and hemp.

    "There are other pieces of legislation necessary that are pending this
    legislative session that could fully legalize hemp as a crop to be grown and
    processed in Texas, and that legislation provides further legal protections for
    the possession and transport of hemp," Azanza told OPIS on Monday.

    "So until the end of May when we see what laws pass, we won't have total
    harmonization of the various laws pertaining to the possession of hemp or
    cannabis products - retailers, distributors, and manufactures still have to
    deal with the legal hassles and loss of product if local law enforcement
    decides to 'rattle some chains' over hemp products," he said.

    If Texas doesn't pass HB 1325 to bring it in full compliance with the 2018 Farm
    Bill, then the program would default under the USDA rules, Azanza said.

    Because the Texas Legislature meets once every other year (in session now),
    there is pressure to get the bill passed, otherwise Texas (specifically the
    Texas Department of Agriculture) wouldn't be able to craft its own set of rules
    to regulate hemp production until 2021, potentially putting the state at a
    disadvantage as others ramp up hemp production, he added.

    "If you are selling or have plans to sell CBD oil, be sure to purchase from a
    reputable distributor who uses a third party testing lab and whose products are
    derived from hemp and not marijuana," Azanza said in an advisory to convenience
    store owners in Texas.

    "Marijuana plants contain higher levels of THC and are a psychoactive drug that
    produces intoxication. Since none of the CBD products sold over the counter
    have been approved by the U.S Food and Drug Administration (FDA), it is
    relatively easy for pseudo cannabis companies to skimp on testing and other
    important quality controls," he said.

    OPIS reported last week that U.S. was continuing to see a slow burn towards
    legalization of cannabis, according to a cross-asset research report issued by
    Barclays Capital.

    The U.S. government is moving toward adopting a more accommodative cannabis
    policy given increasing public acceptance, growing support from state and
    federal government officials, and the prospect of sizable economic benefits,
    the bank said.

    "We have seen the federal government take an increasingly accommodative stance
    toward cannabis in the past 10 years," it said.

    OPIS notes that some parts of Canada, including Ontario and Montreal, could see
    recreational cannabis sales at retail fuel stations and near metro train
    stations in the near future. Alimentation Couche-Tard is aiming to operate a
    "Tweed" branded retail store in London, Ontario, and the company "was excited
    about taking a leadership role in the development of cannabis retailing
    excellence in this major Canadian market," the company said in February.

    Barclays said that following the passage of the U.S. Farm Bill in late 2018 --
    which legalized the agricultural production of hemp and hemp-derived CBD
    products -- there has been an increased effort to remove the operational
    obstacles to access financial services, allow for greater flexibility at the
    state level, and, as some advocate, to legalize cannabis.

    While the federal government debates the legalization of cannabis, states will
    continue to push forward, the bank said.

    Several Democratic governors plan to start taxing cannabis sales in the next
    fiscal year, pressuring neighboring states that would risk missing out on
    potential tax revenue, the bank said. While states are not ready to issue
    cannabis tax revenue support bonds, there is already a small positive effect on
    municipal bond supply from marijuana sales. Competitive dynamics hinge on the
    regulatory framework, Barclays said.

    Democratic governors seem to be driving the process as Illinois, Minnesota, New
    Jersey, New York and Rhode Island are planning to start taxing cannabis sales
    in the near future. By contrast, some predominantly Republican-leaning states,
    including Alabama and Georgia, have shied away from legalization. North Dakota
    went a step further and explicitly voted against recreational legalization last
    November, Barclays said.

    "But as soon as any given state legalizes, it starts putting pressure on
    adjacent states, who fear losing potential tax revenue to their neighbor. We
    think continued state action only strengthens the likelihood that federal
    action will ultimately follow," it said.

    --Edgar Ang, eang@opisnet.com

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