THC edible industry takes off following new Minnesota law
Some changes have scaled back allowable serving sizes and offerings in the state.
DULUTH — Suppliers of tetrahydrocannabinol, or THC, are seeing a surge in the sales of hemp-derived edibles and beverages following Minnesota's change in law. Those 21 years or older may now buy products that contain up to 5 milligrams of THC per serving and 50 milligrams per package.
Prior to the new law going into effect on July 1, hemp and cannabidiol, also known as CBD products, that contained less than 0.3% delta-9 THC were already legal in Minnesota. However, the same limit didn't previously apply to delta-8 THC.
"I have been selling THC in Minnesota for three years," said Craig Sutherland, co-owner of Sutherland CBD. "Changes with the new law restrict individual edible gummy servings to a maximum of 5 milligrams of hemp-derived THC. Prior to new law, I was selling under 0.3% THC by weight and was able to sell 10 milligram edibles in Minnesota."
Sutherland CBD is a retailer, wholesaler and distributor of anything derived from cannabis and hemp, with locations in the Lakeside neighborhood of Duluth, as well as in Superior. Sutherland CBD also has an e-commerce site and ships wholesale nationwide.
Within short notice, Duluth's Sutherland CBD, along with many other THC distributors in Minnesota, were required to change its entire storefront when 10 milligram, or 0.3% THC, edible products became noncompliant under the new law. Sutherland said any of his store's inventory that became noncompliant was transported to its Superior location where it is legal.
"Since Wisconsin adopted the USDA farm bill, it is able to do more in terms of cannabis than Minnesota, such as sell a higher strain. I can sell stronger gummies of delta-8 right now in Wisconsin; there is no limit to edibles as long as it is under 0.3% delta-9 by weight," Sutherland added. "In Minnesota, it is 5 milligrams total, whether it's delta-8 or delta-9. A lot of Minnesotans are traveling to Superior to purchase."
Scrambling to meet demand
Following the passing of the new bill, Sutherland said he is seeing a significant increase of demand for THC edible products at his stores, which he credits partially to a media-infused false hype. He estimated Sutherland CBD's sales of THC edibles to be anywhere from double to triple the numbers experienced during this time last July.
"A lot of Minnesotans didn't know you could buy THC gummies already and now everyone starts coming out of the woodwork," Sutherland said. "We're selling hundreds of thousands of gummies. We're selling them as quickly as they come in."
Supply chains are also experiencing a huge uptick due to the increased demand, Sutherland said. New labeling and childproofing requirements are contributing to the companies providing those services to be backed up as well. Wholesalers and retailers are now ordering an estimated quarter-million gummies a week to keep up with demand within his supply chain, which Sutherland said consists of dozens of business owners that rely on these networks.
"Suppliers were backlogged. Wholesalers are scrambling," Sutherland said. "It's not a bad thing. We're learning as we go and adapting. It's part of the industry. It is fragile. Lawmakers can change it at any time."
What's next in Minnesota in terms of cannabis?
"The consumer market for marijuana has existed for a long time in Minnesota. It is a huge step towards full adult-use marijuana," said Jason Tarasek, who serves on the board of directors of the Minnesota Cannabis Association and lobbied in favor of Minnesota's THC edible law.
"I have been lobbying for adult-use marijuana for three years and it is amazing how much progress we've made in a short amount of time," Tarasek said. "It strikes me that legislators are getting much more comfortable with adult-use marijuana. I applaud them. I think they're going to see it benefits everyone in Minnesota to do this."
Tarasek also founded Minnesota Cannabis Law in 2018, and is a steering committee member and co-founder for Minnesotans for Responsible Marijuana Regulation. With nearly 20 years of legal experience, Tarasek is among the 5% of attorneys in the state named to the list of Super Lawyers.
He added: "The DFL-controlled House passed an adult-use legalization bill, but Republicans in Senate refused to consider it. Gov. Tim Waltz said he will sign the bill if it gets through Senate. I think it would be foolish for the legislation not to legalize full adult-use marijuana in the next session. We will get a six-month trial period. They will see there is nothing to be concerned about."
Minnesota has a projected $1.2 billion marijuana market per year, which equates to an estimated $200 million-$300 million in tax revenue, Tarasek said. These funds could be funneled toward education, building schools and back into communities impacted by the war on drugs, he said.
"Marijuana has a stigma associated with it that has been built over decades of misinformation and a fear it may harm children. But every state that has legalized it has seen teen use go down because it takes away the black market aspect of marijuana," Tarasek said, adding it is more difficult for teenagers to obtain marijuana as illegal drug dealers are replaced by licensed dispensaries that require proof of age. "I don't want THC to get into the hands of kids in any case. It can only be sold to those 21 and older, and only marketed to adults."
There are currently 19 states that have fully legalized adult-use marijuana. As a board member of the Cannabis Industry Association of South Dakota, Tarasek also provides legal services to entrepreneurs who intend on entering the medical-marijuana and adult-use marijuana markets in that state. According to Tarasek, he anticipates Minnesota's neighbors, North Dakota and South Dakota, to legalize full adult-use marijuana this November.
North Dakota is similar to Minnesota and currently has mixed legal status, allowing for medical and decriminalized use of marijuana, while it is not currently decriminalized in South Dakota. Iowa and Wisconsin have mixed legal status and allow for CBD oil with THC for medicinal purposes. Michigan and Illinois allow for full adult-use marijuana.
As for Minnesota, the recent THC edible law had adverse impacts to businesses selling vape cartridges with any amount of THC or individual delta-8 TCH edibles above 5 milligrams, which Tarasek explained are now illegal in Minnesota.
"The cannabis industry creates a lot of jobs. I have clients who are getting impatient and began opening businesses in the Upper Peninsula of Michigan," Tarasek said. Even so, he said, "THC retailers in the Twin Cities ran out of stock within 48 hours, and are scrambling to get more. If you are a retailer that can get your hands on gummies with 5 milligrams of THC per serving, you're going to make a lot of money."
Cannabis, hemp, marijuana, THC, CBD, delta-8 and delta-9: What's the difference?
The United States Food and Drug Administration describes cannabis sativa as a plant with its most commonly known cannabinoid compounds being CBD and THC. Both have different chemical properties and each affect the body differently.
Both compounds are found in marijuana and hemp. Hemp is considered any part of the cannabis plant with a delta-9 THC concentration up to 0.3% on a dry weight basis; marijuana is any part of cannabis that has more than 0.3%. While marijuana contains more THC, hemp has a lot of CBD.
THC is the main psychoactive compound in marijuana and produces an intoxicating effect, whether it's derived from hemp or marijuana. It's what makes people feel "high." CBD doesn't cause that feeling.
Delta-8 THC is also produced naturally by the cannabis plant, but is not found in significant amounts. Nearly all delta-8 THC products are synthesized, extracted and purified from cannabis-sourced CBD. While delta-9 THC can be smoked or vaporized in flower or bud form without requiring extraction, edibles do require an extraction process.
Although less potent, delta-8 THC has similar intoxicating and psychoactive effects as delta-9 THC. From Jan. 1, 2021, to Feb. 28, 2022, national poison control centers received 2,362 exposure cases of delta-8 THC products. Of these cases, 58% involved adults and 41% involved children under 18 years old. Seventy percent of overall exposure cases required health care facility evaluation, with 45% being pediatric patients and 8% resulting in critical care. One pediatric case resulted in death.
Additionally, the FDA received 104 reports of adverse events in patients who consumed delta-8 THC products between Dec. 1, 2020, and Feb. 28, 2022, with 55% of these patients requiring an evaluation by emergency medical services or hospital admission.
Classified as 'food'
Minnesota statute 151.72 allows for the sale of manufactured and packaged products that contain substances derived from legally certified hemp in Minnesota. According to the Minnesota Board of Pharmacy, food ingredients that are combined with THC or CBD must meet requirements for food manufacturing. Products containing hemp-derived THC and CBD fall under the same authorities and requirements as FDA-regulated products containing any other substance.
However, the law doesn't allow restaurants, bars or other businesses that prepare food and beverages for on-site or take away consumption to further prepare food using substances derived from hemp. Edible cannabinoid products also cannot be made by applying THC or CBD to a commercially-available candy or snack food item.
In Minnesota, it is a misdemeanor to sell misbranded or adulterated products. Products that do not meet all the requirements may also be schedule 1 controlled substances, depending on the substance and quantity involved. It can be a felony to sell or possess controlled substances.
The Pharmacy Board will rely on consumer complaints to investigate reports of non-compliance. Currently, it does not have a lab to test hemp-derived products for compliance.