“Why is one held to all this high regulation, while the other is not? It’s not fair and balanced.”

By Christopher Shea, Rhode Island Current

No one complained when state regulators quietly allowed hemp-derived THC beverages to be sold in Rhode Island’s liquor stores late last summer.

But now that state lawmakers are considering codifying the rules, the state’s cannabis cultivators and retailers are speaking out, saying the liquor industry is circumventing stringent guidelines they’ve had to follow to get their psychoactive products to market

A bill sponsored by Rep. Jacquelyn Baginski, a Cranston Democrat, would declare it legal for licensed distributors to sell beverages containing up to 5 mg of delta-9 THC at liquor stores, bars and restaurants. The bill would also increase the fee liquor wholesalers pay for the right to sell these products. Companion legislation is sponsored in the Senate by Robert Britto, an East Providence Democrat.

“The goal of my legislation is to get our arms around the sale of beverages that are already being sold,” Baginski said in an interview. “For every good actor and retailer who goes out and goes through the trouble of requiring that license, there are potentially one or two who have not done that.’”

Existing hemp rules allow the sale of delta-9 THC products such as gummies, lozenges, packaged baked goods and beverages at licensed retailers. The state now has 120 hemp retailers and distributors, which include businesses headquartered in Colorado, Connecticut and Massachusetts.

Connecticut last July mandated THC-infused drinks only be available at state-licensed liquor stores and cannabis retailers. Massachusetts regulators, meanwhile, declared last May that intoxicating hemp-based products cannot be sold outside of cannabis retail stores.

Under Baginski’s and Britto’s bills, the annual fee paid by liquor wholesalers would increase from $500 to $1,500 to distribute delta-9 THC drinks under rules crafted by the state’s Department of Business Regulation. Bars and restaurants would have to pay $250 a year.

Rhode Island’s seven cannabis dispensaries, meanwhile, pay a yearly $30,000 licensing fee to sell THC products. Those rules are based on regulations crafted by the state’s Cannabis Control Commission.

“Why is one held to all this high regulation, while the other is not?” Magnus Thorsson, a professor at Johnson & Wales University’s Cannabis Entrepreneurship Program, told Rhode Island Current. “It’s not fair and balanced.”

Mike Simpson, co-founder of Lovewell farms in Hopkinton, said he’s fine with liquor stores being allowed to sell hemp products in Rhode Island. He just wishes that hemp growers like himself had a say in the initial legislation.

“They completely left out the existing hemp industry, as if we don’t exist,” Simpson said in an interview Thursday. “This kind of not only feels superfluous, but also feels like they didn’t actually engage with the industry—I hope they’re open to hearing.”

Baginski acknowledged that she has not met with hemp industry leaders but said she is always willing to connect with them.

“I don’t claim to know everything, and I am happy to take all the feedback out there for me to absorb,” she said.

Baginiski’s bill received its initial hearing before the House Corporations Committee on April 8, where it was held for further study as is standard practice during a first vetting by a legislative panel.

The state’s liquor industry is backing the proposal.

Rhode Island Liquor Operators Collaborative Executive Director Nicholas Fede Jr. said alcohol retailers are well positioned to be part of the hemp-derived THC market. He told Rhode Island Current that store owners and staff are already trained to recognize the effects of intoxicating substances when interacting with customers.

“We have a long history of high product integrity,” Fede said. “We are the gatekeepers for public safety.”

Alex Nendza, director of marketing for Bottles Fine Wine on Providence’s East Side, understands the sense of resentment coming from cannabis dispensaries and cultivators but said he believes having more retail outlets will help the industry grow.

THC drinks already account for 10 percent of Bottles’s revenue.

“It’s difficult to keep them in stock at times,” Nendza said in an interview. “Our shelves empty out pretty fast.”

Getting THC from CBD

Hemp has been legal at the federal level since 2018. Hemp-derived THC drinks were technically illegal in Rhode Island—at least until last August, when the state’s Office of Cannabis Regulation began allowing the sale of products containing low levels of delta-9 THC at licensed retailers, which includes vape shops and liquor stores.

Beverages derived from cannabis continue to only be sold at licensed cannabis retailers. Hemp by itself produces little to no THC content and is typically non-psychoactive when first harvested, unlike other cannabis plants.

“It’s a molecule, and your body doesn’t make any discretion at all to where it comes from,” Stuart Procter, co-founder and lab director for cannabis testing facility PureVita Labs in West Warwick, said

The main difference is how the psychoactive compound is derived.

Delta-9 is a naturally occurring cannabinoid within cannabis plants. With hemp, it takes a little chemical magic to convert non-psychoactive CBD into THC. Methods include soaking the hemp material in a liquid like butane or ethanol, applying enough pressure and heat to extract THC compounds or exposing the plant to acid.

“If all of the processes are done properly by chemists and people who know what they’re doing, you probably end up with a nice safe product which is absolutely identical to the delta-9 taken from marijuana plants,” said Procter, who chairs the Cannabis Advisory Board’s Public Health Subcommittee.

But because hemp testing rules vary from state to state, Procter said safety isn’t always guaranteed.

“There are very limited to no testing standards guiding hemp-related products,” he said. “If you were to bring hemp into the same regulatory protocols that would make sense—if they want to play in the same market, they should abide by the same regulations.”

Conflicting rules?

During the bill’s April 8 hearing, Baginski told lawmakers she was surprised to see hemp-based THC products available on the marketplace “and largely sold unregulated.”

“The intent of this legislation is not to make any changes to the existing structure of sales of marijuana-based THC, but to create a new safe marketplace for hemp THC beverages.”

But state regulators argue Baginski’s proposal could conflict with existing cannabis rules.

Cannabis Control Commission Chairperson Kimberly Ahern wrote to the committee that the existing bill would revoke several existing hemp licenses and contradicts the state’s commitment to “building a robust cannabis economy.”

Hemp-derived THC products under Baginski’s bill would not be subject to the same testing, labeling restrictions, and additional safety protocols required under existing rules and upcoming regulations required for recreational cannabis.

“The absence of clear requirements for psychoactive hemp-derived products increases the risk of accidental overconsumption and potential exposure to vulnerable populations, including youth,” Ahern warned.

Ahern asked that the General Assembly hold the bill until regulators and industry leaders could discuss “alignment with the state’s broader cannabis and hemp regulatory strategy.”

Baginski said she’s open to making any necessary changes to the bill to ensure it aligns with existing regulations, adding that the goal of any legislation is to spark conversation and let the democratic process unfold.

“I do think it’s worth having a conversation about who we’re selling these things to and what exactly they are,” she told Rhode Island Current.

This story was first published by Rhode Island Current.

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