High Times

ATLANTA—Despite being hailed as a major development for the cannabis industry, the passage of the 2018 Farm Bill did not offer a plethora of opportunities for retailers seeking to sell cannabis products. In fact, today, only a narrow set of hemp-derived cannabidiol (CBD) products can legally be sold by retailers.

Nonetheless, many retailers are taking the risk to sell other federally illegal hemp-derived CBD products, and even marijuana-based products, in their stores and online. In the October 2 education session, “Cannabis, Marijuana and CBD: The Practical and Legal Outlook,” a panel of experts discussed the legal ramifications of dabbling in this product category; the FDA’s future approach to foods, dietary supplements and body care products made from cannabis derivatives; and whether employers can maintain drug testing and substance abuse policies.

The risk presents a host of retailer banking, insurance and tax challenges, said Scott Sinder, NACS general counsel, partner at Steptoe & Johnson LLP and a panelist at the CBD education session at the 2019 NACS Show, held Oct. 1–4 in Atlanta.

Sinder reminds retailers that federal law classifies marijuana as a Schedule 1 drug, the same classification as heroin and LSD.

NACS has created model licensing legislation—based on state regulatory systems that govern the retail sale of alcohol—which would allow legal marijuana products to be sold at convenience retailers. If enacted, NACS legislation would open the door to stores in the convenience channel, allowing them to choose whether to introduce this emerging category to their stores.

Because federal prohibition on the use of marijuana is likely to end eventually, a number of bipartisan bills introduced in Congress are presenting another set of challenges for convenience store employers. The bills address everything from requiring the federal government to recognize state legalization measures to fully legalizing marijuana on the federal level. If and when cannabis products can be sold in retail outlets, how can employers ensure their staff adheres to a substance abuse policy? And how can employers set fair policies regarding medical marijuana use?

“My clients come to me with questions all the time about whether they can test for marijuana or enforce a zero-tolerance substance abuse policy,” said panelist Steve Bernstein, a partner at Fisher Phillips and co-chair of the firm’s labor relations practice group. “Can they prohibit it when tests themselves don’t necessarily reveal whether an employee is impaired by the drug? It’s far from clear how employers should deal with this on a universal level because every state seems to be treating it differently.”

But what are the employer risks when it comes to CBD, which does not make people high? Although the Farm Bill legalized the cultivation and sale of industrial hemp, the FDA is still deliberating how to regulate CBD in food, beverages and other consumer products.

“Because the Federal Food, Drug and Cosmetic Act (FD&C Act) has not yet approved any ingestible products (foods and beverages) containing CBD or any topical products containing CBD for which a health claim is made,” Sinder said, “technically, the sale of these products is not permissible.”

This presents even more challenges for employers, especially those who decide to sell the products now.

“The concern about CBD from a workplace standpoint is that many of these CBD products, especially if they’re ingested, may contain trace elements of THC contaminants,” Bernstein said. “Which can show up on some drug tests.”

Retailers can be proactive, he said, by monitoring developments and updating their policies based on their local jurisdictions. Employers also should ensure they are consistent in how they treat applicants and current employees under these circumstances and to document their conduct accordingly.

“There are a few common principals that employers can apply,” Bernstein said, “to inject the level of certainty into what’s clearly an evolving universe.”

For more on walking the legal tightrope when it comes to selling CBD products in c-stores, see “Not So Fast” in the March issue of NACS Magazine and “Balancing Act” in the July issue.