As far as the legal status of hemp and cannabis products is concerned, Arizona is by far one of the most interesting states. It would appear that the laws surrounding hemp and cannabis products in Arizona are rapidly evolving, and many would say that the direction is a negative one.
The latest piece of hemp legislation to be introduced in Arizona is SB or Senate Bill 1401, which would criminalize hemp-derived manufactured impairing cannabinoids, among other provisions. Let’s examine exactly what Arizona SB 1401 is and how it may affect the cannabis industry.
Key Takeaways:
If passed, the Arizona Senate Bill 1401 would:
Introduce a new class of cannabis products called “hemp-derived manufactured impairing cannabinoids.”
Criminalize the said class of hemp-derived manufactured impairing cannabinoids, and these substances would be added to the list of dangerous drugs
Criminalize products including Delta-8 THC, Delta-10 THC, Delta-9 THC over 0.3% on a dry weight basis, hexahydrocannabinol, tetrahydrocannabiphorol, tetrahydrocannabinol acetate ester, tetrahydrocannabioctyl, tetrahydrocannabihexol, tetrahydrocannabinolic acid, and any other cannabinoid that is derived from hemp and altered by a chemical reaction that changes the molecular structure of any natural cannabinoid derived from hep to another cannabinoid with impairing properties with a substantially similar molecular structure to any cannabinoid that is found naturally in hemp.
Still allow use of CBD, CBN, CBG, CBC, CBL, CBDV, CBV, and THCV.
Continue to legalize medical marijuana for individuals over the age of 21.
Create guidelines to educate Arizona schoolchildren between grades 4 and 12 about the dangers of these hemp-derived manufactured products.
The Current Legal State of Cannabis in Arizona
We encourage all readers to actively research current Arizona hemp and cannabis laws, as any information provided here may have changed from the time of writing. However, all information gathered was accurate at the time of writing.
The Federal 2018 Farm Bill
The first piece of legislation to consider is a federal one, the 2018 Farm Bill. This federal law officially legalized the production, sale, and consumption of hemp-derived products at a federal level so long as they did not contain over 0.3% THC.
The issue with the Farm Bill is that the wording is somewhat vague. At this time, it appears “THC” only refers to Delta-9 THC, and not other forms, such as Delta-8, Delta-10, or any one of the other intoxicating hemp-derived and manufactured cannabinoids.
Many argue that this has, therefore, left a loophole open for manufacturers and retailers to sell intoxicating cannabinoids to the public, such as the intoxicating Delta-8 THC derived from CBD and hemp, often referred to as diet weed.
The loophole is that the 2018 Farm Bill seems to elude specifically to Delta-9 THC, while ignoring other forms, which means that manufacturers have been creating intoxicating cannabinoids in laboratories derived from hemp.
Arizona is one of the states that seem to have an issue with this, particularly with the sale of hemp-derived manufactured impairing cannabinoids such as Delta-8 THC. Although cannabinoids like Delta-8 and Delta-10 THC occur naturally in cannabis plants, they only occur in small quantities.
Therefore, to make these cannabinoids economically feasible for sale, they are usually manufactured and derived from hemp. These kinds of cannabinoids are exactly what the Arizona Senate Bill 1401 would aim to criminalize.
To be clear, this means that any products derived from the hemp plant would not be allowed to be intoxicating, which is interesting to note, seeing as Arizona has fully legalized both medical and recreational cannabis use. However, at this time, there are only a limited number of licensed locations in Arizona permitted to sell marijuana.
Prop 207 Legalizes Recreational Cannabis in Arizona and its sale by Licensed Entities
In 2020, Arizona voters passed Prop 207, the Smart and Safe Arizona Act, which made it legal for all adults 21 and older to possess, cultivate, and use marijuana. However, the key point here is that only licensed dispensaries are allowed to sell intoxicating marijuana products.
Unlicensed Entities Selling Intoxicating Manufactured Hemp Products
Intoxicating hemp-derived products, such as Delta-8, are available in various unlicensed gas stations and smoke shops due to legal interpretations. Arizona SB 1401 addresses concerns related to the sale of these products, especially in terms of regulatory oversight.
Many unlicensed smoke shops and gas stations in Arizona interpret the 2018 Farm Bill and related state legislation as allowing the sale of these hemp-derived products, provided they contain less than 0.3% Delta-9 THC.
According to the opinion of Attorney General Kris Mayes, “….. concludes that delta-8 and other hemp-synthesized intoxicants cannot legally be sold by entities that are not licensed cannabis sellers. Delta-8 is an intoxicating hemp-synthesized cannabinoid with a chemical profile and psychoactive effect materially similar to that of marijuana. Intoxicating cannabis products are Schedule 1 controlled substances that may be sold only by licensed cannabis sellers in Arizona.”
Although the Attorney General states that these substances should only be sold by licensed retailers, AZ SB 1401 appears to take things one step further, by also outlawing the sale of these products by licensed dispensaries.
Arizona’s Senate Bill 1401 and its Provisions
To combat this sale of intoxicating hemp-derived manufactured cannabinoid products, Senate Bill 1401 has been introduced. There are several provisions it outlines in relation to the legal status of hemp and cannabis, as well as surrounding issues, so let’s determine what the most important points for you to know are.
This SB aims to criminalize all hemp-derived manufactured impairing cannabinoids.
Hemp-derived manufactured impairing cannabinoids are defined as “any cannabinoid that is derived from the cannabis plant, and that is altered by a chemical reaction that changes the molecular structure of any natural cannabinoid derived from hemp to another cannabinoid with impairing properties that is found naturally in hemp.”
The hemp-derived manufactured impairing cannabinoids that this bill takes aim at include Delta-8 THC, Delta-10 THC, Delta-9 THC over 0.3% on a dry weight basis, hexahydrocannabinol, tetrahydrocannabiphorol, tetrahydrocannabinol acetate ester, tetrahydrocannabioctyl, tetrahydrocannabihexol, tetrahydrocannabinolic acid, and any other cannabinoid that is derived from hemp and altered by a chemical reaction that changes the molecular structure of any natural cannabinoid derived from hep to another cannabinoid with impairing properties with a substantially similar molecular structure to any cannabinoid that is found naturally in hemp.
The bill also states that any such hemp-derived manufactured impairing cannabinoids will now be added to the definition of dangerous drugs.
However, SB 1401 explicitly excludes any cannabinoids that are derived from hemp and are produced through the decarboxylation process without the use of a chemical catalyst, so long as they are non-intoxicating. These include, but may not be limited to, CBD, CBN, CBG, CBC, CBL, CBDV, CBV, and THCV.
Sections in this bill also update Arizona school curriculums to include a variety of instructional programs and materials regarding the effects and laws related to hemp-derived manufactured impairing cannabinoids. In other words, schoolchildren between the grades of four and 12 will now be subject to such education.
The Implications of Arizona Senate Bill 1401 on the Cannabis Industry
The implications of the Arizona Senate Bill 1401 are numerous. First and foremost, the sale of any such hemp-derived manufactured impairing cannabinoids would be banned, whether it be from smoke shops, gas stations, or fully legal and licensed dispensaries. SB 1401 aims to put an end to all manufacturing, sale, and use of such products in the state of Arizona.
Consider that in 2023 alone, licensed Arizona dispensaries sold over $1.5 billion of medical and recreational cannabis. Although we don’t have exact figures in terms of the ratio of marijuana products versus hemp-derived cannabinoid products sold, it’s reasonable to assume that SB 1401 will greatly cut back on revenue for the time being.
With that being said, regular marijuana that is grown as such will remain legal, which should bolster the cannabis industry. Moreover, there will undoubtedly be a shift towards the still-legal non-intoxicating or mildly intoxicating hemp-derived cannabinoids, such as CBD, CGG, CBC, and others.
Whether or not the potential increase in sales of these products can make up for the criminalization of hemp-derived manufactured impairing cannabinoids remains to be seen. However, entities that are sure to suffer here are locations that were previously selling hemp-derived manufactured impairing cannabinoids, thanks to those loopholes we mentioned previously, will no longer be able to sell these products without facing severe repercussions. This will undoubtedly lead to a loss of revenue for such small retailers.
This could also mean that products may become more expensive for consumers. With cannabinoid products requiring ever-increasingly stringent testing to ensure they are legally compliant, those costs are sure to be passed onto the consumer.
The criminalization of such products will also greatly limit the selection available in Arizona, something else that may drive prices up yet again.
Final Thoughts on Arizona SB 1401
While Arizona Senate Bill 1401 has yet to reach its final stages, if we examine the sentiments and opinions of lawmakers and authorities in the state, it appears that it will pass. Therefore, all hemp-derived manufactured impairing cannabinoids, as described above, will officially become criminalized and illegal.
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