Retailer applications opened Monday in the first wave of regulation for the CBD industry in Louisiana amid concerns by some retailers that excessive oversight could hinder the industry.
Businesses officially received the green light to go forward after a change in state law that retailers in Lafayette saw as a positive step forward, despite reservations about overly restrictive regulations.
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In early June, the Louisiana Legislature passed two laws that created a framework for the legal sale of hemp-derived CBD and the growth of industrial grade hemp. The move clarified the legal gray area between regulation of the product at the state and federal level.
CBD, or cannabidiol, is a non-psychoactive compound extracted from the cannabis plant.
State law previously said that any product derived from the cannabis plant was considered marijuana and would be subject to criminal enforcement, even if it had no traces of the psychoactive chemical THC. At the same time, the federal government stated that hemp and marijuana were genetically distinct and hemp and hemp-derived products, with less than 0.3 percent THC, were allowable for legal sale nationwide.
The state CBD industry operated successfully in the gray area until this spring, when questions about the legal sale of CBD arose and increased scrutiny from the Louisiana Board of Pharmacy and Louisiana Office of Alcohol and Tobacco Control led to tightened restrictions on the industry.
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Now relaxed, businesses are getting the OK to sell hemp-derived CBD products, but with a few caveats.
Businesses won’t be allowed to sell non-U.S. Food and Drug Administration approved edibles or beverages, or any smokable or vapable products. They’ll also be required to label every product with a scannable QR code that will take customers to a webpage detailing the product’s THC content and other metrics.
The ATC is the regulatory body overseeing the roll out of these new regulations. While the agency works to establish a long-term regulatory framework, the temporary guidelines are being put in place quickly to get current sellers in line with the law. Applications to become an ATC-approved CBD seller opened Monday.
Jenny Matte, owner of Your CBD Store, said she’s concerned the ATC is the wrong government authority to handle regulation of the product. CBD is natural and unlike its genetic cousin, marijuana, doesn’t have mind altering effects.
“I’m glad they’ve passed the bill but I’m not so glad about how heavily regulated they’re wanting to make it here in Louisiana. But you pick and choose your battles. We’ll go with the flow and make sure we do whatever we have to to make sure we’re in compliance with what the law states,” Matte said.
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Matte opened the Lafayette branch of Your CBD Store in January 2019. The storefront is part of a nationwide CBD franchise that has over 230 stores in 32 states, including seven stores in Louisiana, according to their website.
Matte got into the industry when a friend approached her about becoming a Your CBD Store franchisee last fall. She said she was skeptical at first, believing many of the stigmas surrounding CBD, and wanted to educate herself and test the product before committing.
About five years ago, Matte was diagnosed with Type 2 diabetes and suffered neuropathy, or nerve damage, in her hands and feet as a result. After several months of using CBD, Matte reported her neuropathy was vastly improved and the pain was manageable. She was a convert.
She said the most rewarding part of her business is seeing people enjoy the same positive benefits she said she experiences from using CBD.
“You only hope they’re able to experience the relief you have. When they come back that’s when it’s really rewarding. It’s like, ‘I’m so happy to see your face again,’” Matte said.
With limitations on edibles and inhaled products, Matte said, she’s concerned not all of her customers will be able to continue enjoying CBD’s benefits. She said parents of children suffering from seizures, anxiety and autism often turn to her gummy products and other edibles. They’re typically a less intimidating delivery system than the oils or other products, she said.
Matte said she’s waiting to apply for a provisional license until after the attorney for Your CBD Stores in Louisiana meets with representatives from the ATC. She said she wants to ensure she has a full understanding of the future impact on her business and the legal intricacies before moving forward.
Travis DeYoung, owner of Cajun Cannabis on Johnston Street, is also assessing his options. DeYoung said he’s started the application process and is working with ATC officials to determine if his recent arrest will hinder his CBD vendor application.
On April 24, DeYoung was arrested by Lafayette Parish Sheriff’s deputies during a traffic stop. His vehicle, and later his storefront, were raided and deputies seized CBD gummies, oils and other products. He was booked into the Lafayette Parish Jail on 17 counts, including felony marijuana possession and weapons charges.
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Lafayette Parish Sheriff Mark Garber said DeYoung’s arrest and the search and seizure were the result of multiple resident complaints about the content of DeYoung’s products. Garber said the products seized from DeYoung tested positive for THC, though he did not reveal the quantity of THC in the products. DeYoung maintains the products seized were THC free.
As of Saturday, criminal charges against DeYoung had not been filed in the 15th Judicial District Court, according to the district Clerk of Court’s online records.
DeYoung said he received an outpouring of support from the CBD industry and the local community after his arrest. He’s continuing to focus on his business and isn’t letting his recent run-in with the law hinder his business’s growth.
“I understood the risk when I got into the business. Oddly, I wasn’t surprised. I knew the people were ready for [CBD]. I think that was demonstrated by the outrage. The people were ready for it, the government was not,” he said.
DeYoung said he plans to continue pushing the envelope for CBD and cannabis products in the state, while also remaining cognizant of the law.
Edible products and CBD-infused sparkling water were previously popular sellers at his Johnston Street storefront and café, but he said he’s moving in the direction of expanding his lines of oils, salves and other skincare products as well as hemp apparel, considering the ATC’s new regulations.
Like Matte, DeYoung thinks the limitations on edible and smokable products are “absurd.” The industry needs to take small steps forward though, he said, and lobbying during future legislative sessions could reverse the restrictions.
Overall, DeYoung said he’s pleased with how the ATC has handled its new responsibility.
“In my opinion the ATC has done more than expected of a regulatory agency, especially with them being so new at it. They’re working with store owners and they have good integrity,” he said. “They’re doing their best.”
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Lit Smoke Shop owner Asad Sheikha also said he’s embracing the ATC’s leadership and said he’s already submitted his licensing documents to the agency.
Sheikha owns Lit Smoke Shops in Lafayette and Prairieville and said when the ATC cracked down on CBD products in the spring, he pulled them from his shelves right away. As soon as he did, customers began stopping in and calling the stores every day searching for the products, he said.
Many felt they had finally found a natural product to assist their joint aches, migraines and other ailments, and didn’t want to see them stripped way, he said.
“I didn’t know what to tell my customers,” Sheikha said.
When the ATC opened applications this week, the shop owner said he knew he needed to get the go-ahead to put CBD products back into his stores as quickly as possible.
With more businesses getting into the market, regulations will be important to ensure customers are purchasing a quality product, said Hunter Poiencot of Aurora CBD and Hemp. Poiencot and his brother, Dylan, are celebrating the grand opening of their third CBD store in Youngsville Friday.
Hunter Poiencot said it’ll be the duo’s largest store, both in terms of square footage and inventory. The brothers got into the CBD business in 2017 and currently have stores in Houma and Baton Rouge. Poiencot said they expect competition in the CBD market to ramp up now that state approval has been granted.
It’s both a challenge and a positive development, he said.
“The more retailers and more people involved in the industry means more vast support. This industry is massive elsewhere. I’m glad to see Louisiana is starting to catch up to the curve” Poiencot said.
While the CBD store owner said he doesn’t agree with the ATC’s oversight of CBD or the restrictions on edibles and inhaled products, he recognizes the industry “needs to crawl before it can walk.”
Poiencot said he does think the state’s conservative stance on edible products and beverages, though restrictive, is a good move to protect business owners. The federal Food and Drug Administration is still establishing guidelines for edible products and until those are solidified there are potential pitfalls for businesses.
“I think keeping the CBD food and beverages out of retailers’ hands in Louisiana is smart on their part, instead of having retailers and businesses pour their money into and then the FDA say we’re not going to allow it. I think Louisiana has a good stance on it,” he said.