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Federal circuit court rules ‘all products’ made from federally compliant hemp are legal

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The Fourth Circuit Court of Appeals ruled this week in a wrongful termination lawsuit that “all products” made from hemp that has 0.3% delta-9 THC or less are “unambiguously” federally legal.

At the same time, the appellate court upheld the right of the North Carolina company to fire the worker who filed the lawsuit, and wrote that the plaintiff in the case, Tonya Anderson, had not proven she failed an employment drug test due to federally legal hemp products as she’d claimed, Law360 reported.

The ruling appears to set a new “standard for the legality of hemp products,” particularly as controversy continues to rage in various states over intoxicating hemp products that are federally legal under the 2018 Farm Bill definition, Law360 reported.

In doing so, the Fourth Circuit concurred with the Ninth Circuit in overturning a position held by the Drug Enforcement Administration that products which undergo manufacturing processes cease to be legal hemp and become illegal synthetic cannabis.

“To sum up, under state and federal law, then, certain hemp-derived products – those ‘with a delta-9 (THC) concentration of not more than … 0.3% on a dry-weight basis’ don’t come within the definition of an illegal controlled substance, and instead fall under the umbrella of a legal hemp-derived product,” the ruling stated. “The critical distinction that separates illegal marijuana and THC from legal hemp under both state and federal law is a product’s delta-9 THC concentration.”

The case did not necessarily settle an ongoing policy question of what precisely constitutes synthetic cannabinoids under federal law or in the eyes of the DEA, Judge Julius Richardson noted in a partial dissent.

“Whether synthetic derivatives like THC-O count as excepted hemp is a difficult question. The DEA and Ninth Circuit interpretations did not fully consider the issue. Neither did the parties” in the Anderson lawsuit, Richardson wrote. “I would leave this interpretive question for another day.”

The panel of judges found that the 2021 lawsuit filed by Anderson was already properly decided in favor of her former employer, Diamondback Investment Group, which fired her after she tested positive for marijuana in a drug screening, because Anderson couldn’t back up her claims that she only used hemp-derived CBD products, Law360 reported.

The case was originally thrown out in March in favor of Diamondback for the same reasons, Law360 reported. Her attorney did not respond to a request for comment from Law360.

An attorney for Diamondback told the news outlet, “We are glad that the Fourth Circuit chose to hear oral argument on this matter, especially in light of the fact that it included an issue of first impression. With hemp-based products and synthetic cannabinoids being used more widely, the Fourth Circuit has now provided much needed guidance to employers regarding drug testing policies for its employees.”

Fourth Circuit hemp ruling



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Ispire Technology launches $10M stock buyback

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Los Angeles-based Ispire Technology (Nasdaq: ISPR) will repurchase up to $10 million of its issued shares over the next two years.

The cannabis vaping hardware manufacturer will execute the buybacks through various means including open market transactions, accelerated share programs and privately negotiated deals, according to the company Wednesday.

“This move reflects confidence in the company’s growth and strategic investments while leveraging margin expansion to return capital to shareholders,” a spokesperson told Green Market Report in an email.

The timing and scope of repurchases will be determined by Ispire’s board “based on its evaluation of market conditions, share price, legal requirements and other factors.” The program can be suspended or modified at any time, the company said.

“Given the current capital markets environment, we believe starting our share repurchase program now is an excellent opportunity to buy our common stock at a significant discount to their intrinsic value and represents an attractive investment to potential shareholders,” Michael Wang, co-CEO of Ispire, said in a statement.

The firm operates globally through its Aspire brand of e-cigarettes, though that brand excludes the United States, China and Russia from its distribution network.

In the cannabis sector, Ispire has been pushing to expand its footprint beyond its established markets in the U.S., Europe and South Africa. The company recently began customer engagement initiatives in Canada and Latin America, according to the announcement.



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Vermont cannabis regulators recommend new license types

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Vermont cannabis regulators are recommending several new business license categories while opposing additional product restrictions, according to a legislative report released last week.

The state’s Cannabis Control Board advised lawmakers to create three new license types:

  • Delivery services
  • Temporary event sales
  • On-site consumption establishments

The board also recommended against imposing minimum CBD requirements in cannabis products or additional regulations on paraphernalia sales.

For delivery services, the board envisions stand-alone businesses that would contract with multiple retailers to fulfill orders. The recommendations suggest that those licensees could aggregate deliveries within board-set product limits and use vehicles that are unmarked and secure. The board plans an exclusivity period for social equity applicants for the license category.

“Products and cash in vehicle would be limited and secured during transport,” the report noted, adding that “all purchase limits and ID checks would apply to these transactions.”

The temporary event program would permit cannabis sales and consumption at approved locations in municipalities that have opted into retail sales. Events would require transportation plans and age-restricted areas.

Regarding on-site consumption, the board proposed “café style locations” that could sell cannabis for immediate use, though alcohol sales would be prohibited. Such establishments would need adequate ventilation systems or outdoor screened areas.

The board opposed setting minimum CBD levels in cannabis products, citing insufficient scientific evidence. After reviewing available studies, regulators determined there was not enough data to support imposing such requirements or ratios to prevent cannabis-induced psychosis.

“Prohibiting or limiting products that are popular with consumers without evidence that they are particularly harmful will keep more sales in the illicit market where products are unregulated, untaxed, and not subject to quality control testing,” the report stated.

The state currently licenses 15 tiers of cultivators, three levels of manufacturers, and various retail and testing operations.

Both the delivery and consumption proposals would require legislative approval before implementation. The board recommended rolling out these programs gradually to assess their success before wider deployment. Vermont’s 2025 legislative season kicked off this month, with the session to end in May.

While officials initially forecast $86 million in sales by June 2024, the end of that fiscal year, the market had already reached $128 million by then, according to James Pepper, chair of the Vermont Cannabis Control Board.



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Xebra Brands plans $150K financing for Mexico expansion push

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Xebra Brands Ltd. (CSE:XBRA) (OTCQB:XBRA) is looking to raise $150,000 through a private placement while settling $450,000 in debt, the company announced late Tuesday.

The company said it will issue up to 3 million units priced at 5 cents each, with each unit containing one common share and a half-warrant exercisable at 10 cents for two years.

The debt settlement involves issuing up to 9 million shares to company insiders and service providers at the same 5-cent valuation.

Last year, Xebra said it completed its first manufacturing run of Elements CBD products through Restorative Botanicals, aiming to import them into Mexico through its subsidiary once permits are granted. The company previously secured a distribution deal with ICAN Pharmacies FADERMEX to sell the products across seven pharmacy locations. The company previously secured a unanimous Mexican Supreme Court decision supporting its cannabis operations there in 2021.

“By focusing on strategic partnerships and accretive M&A in both the U.S. and Mexico, along with our robust commercial activities, we are well-positioned to capitalize on the significant opportunities in the CBD market in Mexico ahead of legalization,” Rodrigo Gallardo, interim CEO of Xebra Brands, said in a news release last summer. “Our dedicated team is working tirelessly to ensure that Xebra’s Elements brand becomes a household name, delivering exceptional products that meet the highest standards of quality and consumer satisfaction.”

The company, which claims exclusive rights to produce and sell cannabis products (containing less than 1% THC) in Mexico, projects the country’s cannabis market could reach $3.2 billion by 2026, with CBD sales accounting for $210 million, according to company market research citing Statista Market Insights data.

Xebra around that same time tapped veteran consumer goods executive Melise Panetta and her consulting firm. Panetta, who held senior roles at PepsiCo and SC Johnson, brings cannabis industry expertise including work with Keef Colas and High Times brands, according to the company.

Company officers and directors are expected to participate in both deals, which require Canadian regulatory approval. Xebra indicated it would use proceeds for working capital and general corporate purposes. The company aims to close both deals by Jan. 30.



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