What does the new Virginia legislation on hemp-derived products mean for your business?

Virginia Healthy Alternatives Association

Guide for Members

Recent Changes to Virginia Law Regarding Hemp-Derived Products Containing THC

April 21, 2023

On April 12, 2023 the Virginia General Assembly approved the Governor’s amendments to HB 2294 (Kilgore) and SB 903 (Hanger), which set forth provisions related to the production and sale of products that contain tetrahydrocannabinol (THC). These provisions, which are significantly more restrictive than past state law, will go into effect on July 1, 2023.

There are four primary changes of which members of the Virginia Healthy Alternatives Association (VHAA) should be aware:

• 1.New THC caps (percentage and per package with some limited flexibility)
• 2.Codification of previous rules regarding food safety, labeling, and sale
• 3.New registration requirements and significant new financial penalties
• 4.New enforcement capabilities and capacity at VDACS (details still to be determined based on the pending state budget)

New THC Caps

The most important change in the law is regarding the amount of THC that can be in a product. First of all, Virginia will now deviate from the federal definition when determining whether or not a product is constituted as hemp—rather than basing this determination on delta-9 THC, total THC will be used as the standard.

Products (both ingestible and inhalable) can only contain 0.3% total THC and a maximum of 2 mg per package (although package is not defined, the labeling and packaging requirements below still apply to each package).

There will be some very limited flexibility to this provision, with products that contain a minimum 25:1 ratio of CBD to THC being allowed to exceed the 2 mg cap (but not the 0.3% total THC cap). This will allow for certain, limited full spectrum products, such as specific types of tinctures, to still be marketed and sold in Virginia.

Restatement of Previous Product Rules (and some additions, in italics)

Many of the requirements that are relevant to VHAA members are found in changes to Virginia’s Consumer Protection Act and in Virginia’s Food and Drink Law. Violations of these new laws could result in significant civil penalties up to $2,500 per violation or $5,000 per additional violation. BUT there are additional penalties that could be assessed by VDACS, and these will be discussed more below. The requirements below only apply to those products which contain THC. Cannabidiol (CBD) products and other cannabinoid products, such as CBG or CBN, are not included.

These provisions are as follows:

• You may not sell or offer for sale any product that contains THC and that is intended for human consumption to any person under the age of 21. This includes both edible products and smokeable or vapeable products.
• You may not sell or offer for sale any product that contains a “synthetic derivative” of THC, which is defined as “a chemical compound produced by man through a chemical transformation to turn a compound into a different compound by adding or subtracting molecules to or from the original compound.”
• 
  
• All products that contain THC and are intended for human consumption must be contained in child-resistant packaging, which means it is specially designed or constructed to be significantly difficult for a typical child under five years of age to open and not to be significantly difficult for a typical adult to open and reseal. This also means that for any product intended for more than a single use or that contains multiple servings, that the packaging is resealable.
• There are also several new requirements with respect to labeling. The label must be in English and have a font no smaller than 1/16 of one inch.
  • The label must state that the product contains THC and that it may not be sold to any person under the age of 21.
  • The label must also include a list of all ingredients included in the product.
  • The label must include how much of the product constitutes one single serving.
  • Finally, the label must contain both the total percentage and number of milligrams of THC that are contained in each package and each serving.
• Each product must be accompanied by a certificate of analysis that is produced by an independent laboratory that is accredited pursuant to standard ISO/IEC 17025 of the International Organization of Standardization by a third-party accrediting body.
  • This certificate must state the THC concentration of the substance (product) itself or the THC concentration of the batch from which the substance (product) originates.
  • In many cases, these certificates of analysis are linked to each label of the individual product via QR code, batch number, or other identifying feature that would allow a consumer to easily access the information.

• No products that contain THC may be sold if they are in the shape of a(n):
  • Human
  • Animal
  • Vehicle
  • Fruit

• No products containing THC and intended for human consumption, including both edible and by inhalation, can be sold if packaged in a container or wrapper that has a protected trademark, trade name, or famous mark as defined in federal law.

• Furthermore, the package cannot contain another identifying mark, imprint, or device, or any likeness of another company.

• An example of this would be an edible cookie product that is packaged in a way that is reminiscent of or similar to “Chips Ahoy!”. The colors, fonts, and other identifying characteristics cannot be meant to copy or represent Nabisco and Mondelez International’s trademark on “Chips Ahoy!”.
• No topical hemp product may be sold or offered for sale unless it includes a label stating that it is not for human consumption.
  • Note: this does not apply to topical products manufactured prior to July 1, 2023, given that the person can provide documentation of the date of manufacture.

• The label of an industrial hemp extract or food containing an industrial hemp extract may not contain a claim indicating the product is intended for diagnosis, cure, mitigation, treatment, or prevention of disease. This would make the product a “drug” under federal law. An industrial hemp extract or food containing an industrial hemp extract with a label that contains a claim indicating the product is intended for diagnosis, cure, mitigation, treatment, or prevention of disease shall be considered misbranded.

New Registration Requirements and Penalties (VDACS)

Beginning on July 1, 2023, any person who sells or offers for sale an industrial hemp extract, a food containing an industrial hemp extract, or any other regulated hemp product (including topical products) must obtain a permit from VDACS. There will be a $1,000 annual registration fee which applies to each retail location that will be selling the products.

The application will include, at minimum:

1. The name and mailing address of the applicant;
2. The physical address of the facility from which the applicant intends to offer for sale or sell at retail a regulated hemp product. A registration shall authorize the offering for sale or sale of regulated hemp products only at the location specified in the registration;
3. Written consent allowing the Commissioner or his designee to enter the location from which the regulated hemp product is offered for sale or sold to ensure compliance with the requirements of this article;
4. If the applicant intends to offer for sale or sell an edible hemp product, a copy of the required food safety permit from VDACS;
5. Any other information required by the Commissioner; and
6. The payment of a nonrefundable application fee (set at $1,000)

Any violations of the new requirements, including packaging, labeling, testing, registration, and all other provisions could result in civil penalties assessed by VDACS of up to $10,000 per day.

[1] 15 U.S. Code § 1125 - https://www.law.cornell.edu/uscode/text/15/1125

New Enforcement Capabilities at VDACS

In addition to significant new authority for VDACS to regulate the production and sale of these products, there are plans for the agency to hire up to 15 new inspectors to carry out these provisions. This was in the Governor’s introduced budget and is still being negotiated between the House and Senate. It is still not clear if and when Virginia will have an updated biennial budget, but some indications point to sometime in June.

Conclusion and Next Steps

Both VDACS and the Cannabis Control Authority (CCA) are required to do some additional work over the next few months and report back to the General Assembly by November 1, 2023.

• 1.VDACS must report on any enforcement actions taken by the department after the law goes into effect on July 

• 2.Both VDACS and the CCA must study edible hemp products and hemp products intended for smoking and report the following: (i) a summary of the approaches taken by other states to address the public safety and health challenges posed by the online and in-person sale of hemp-derived products and a recommendation as to whether the Commonwealth may benefit from adopting one or more of these approaches or another approach and (ii) a summary and the implications of any pending federal legislation on hemp-derived products.

The final language of the law adopted by the General Assembly and approved by the Governor can be found here.

[1] 15 U.S. Code § 1125 - law.cornell.edu