The Iowa Attorney General's Office recently reminded Iowans that cannabidiol (CBD) is still considered a controlled substance in the state despite the newly passed Iowa Hemp Act, which legalized the production of hemp containing less than 0.3% THC. The confusion has resulted in enforcement efforts to stop its sale, and it illustrates a larger legal quagmire that state laws across the country are causing for consumers, businesses, and payments companies involved in the sale of CBD.
According to the Des Moines Register, Iowans and local businesses have been uncertain about the legality of CBD because of local and federal laws that appear to have legitimized the substance, and because CBD products are available in many stores across the state. However, Iowa is one of the more restrictive states in regard to its classification of CBD. The substance will remain a controlled substance at least until the US Department of Agriculture approves the state's hemp plan, and even then not all CBD products will be legal, according to a memo by the Iowa Attorney General's Office.
Iowa isn't the only state offering confusing messaging around the sale of CBD. In Louisiana, for example, retailers must obtain a permit from the Office of Alcohol and Tobacco Control to sell CBD products. Although online merchants may apply for a permit, they must maintain a physical place of business in the state, effectively eliminating most online retailers.
In New York state, CBD edibles are permitted under stringent standards, even though this contradicts the FDA's approach, which states that CBD is impermissible in food products and dietary supplements. Although edibles are allowed, New York prohibits vapable CBD products.
California has a counterintuitive approach to CBD edibles. Because of the state's robust recreational marijuana schemes, marijuana-derived CBD edibles are permitted if sold in dispensaries. However, hemp-derived CBD edibles are not permitted, even though this is the form of CBD that was removed from the DEA's controlled substances schedule as a result of the 2018 Farm Bill.
If you're confused about whether you or your merchants can sell CBD in a particular state, you're not alone. The patchwork of state CBD laws in the US presents one of the greatest challenges for merchants and payment service providers looking to operate legally in the CBD industry. Download LegitScript's new guide, US State CBD Laws You Need to Know About, to get an overview of several state-specific approaches to CBD that helps to pinpoint some of the more unique and stringent requirements.
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