Medical Marijuana Dispensary Sues Minnesota Over New THC Regulations

This summer, the Minnesota legislature approved a measure making edibles and beverages containing hemp-derived THC legal for folks over 21. Some rejoiced at the jump forward for a state where only medical marijuana was previously permitted.

Others, not so much.

No New Customers for You

Vireo Health, a Minnesota-based medical cannabis company, is one of only two companies the state’s department of health authorized to distribute medical cannabis. The dispensary offers a variety of products, from topical creams to vape oils and edibles.

Unfortunately for Vireo, Minnesota’s new THC regulation does not open up a whole new customer base. The law, which took effect July 1, 2022, legalized drinks and edibles containing up to five milligrams of THC. The one caveat? They must be derived from hemp. Marijuana remains illegal at the federal level and in Minnesota.

Because Vireo’s products are derived from cannabis and not hemp, only people who qualify for Minnesota’s medical marijuana program can currently purchase them.

Vireo Seeks Declaratory Judgment

Vireo filed suit in Hennepin County on September 14, claiming the new law unconstitutionally discriminates against the company by denying access to the new, larger market. The company argues that the THC in their products and the newly-legal recreational products are “chemically identical.”

“Consumers can’t tell the difference – nor can chemists, regulators or manufacturers – because there is no difference between THC derived from cannabis and THC derived from hemp.”

And those consumers now have more options, which Vireo says will hurt its business.

The new law doesn’t prevent Vireo from adding hemp-derived THC products to its lineup. But the company says it is not interested in doing so. Instead, it is asking the court to issue a declaratory judgment, which defines what a party’s rights are in a dispute. Vireo wants a judge to declare that it can sell and distribute its products under the same rules as hemp-derived edibles.

This is likely going to be an uphill battle for Vireo. Although hemp and marijuana are both cannabis plants (arguably the same), plants with a THC concentration higher than 0.3% are legally classified as “marijuana” under the federal  Controlled Substances Act. Those products are illegal at the federal level and only legal for medical treatment in Minnesota.

To be successful, Vireo will need to convince the court that there are no questions of fact on this issue. But, the state is likely to dispute Vireo’s claim that hemp-derived THC and cannabis-derived THC are the same thing, since doing so would complicate the state’s policies on recreational cannabis even further.

But if Vireo is successful, Minnesotans might be able to obtain recreational marijuana a lot sooner than the legislature would have liked.

Related Resources:

Cannabis Law In a Nutshell with Assistant AG Sierra McWilliams (FindLaw’s “Don’t Judge Me” Podcast)State Medical Marijuana Laws to Know for Your Business (FindLaw’s Learn About the Law)How to Get Financing for a Marijuana Business (FindLaw’s Learn About the Law)

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