Model legislation for optimal state regulation of hemp cannabinoids 

The federal Agriculture Improvement Act of 2018, also known as the “2018 Farm Bill,” defined cannabis containing less than 0.3% delta-9 tetrahydrocannabinol (THC) as hemp and removed hemp from the auspices of the Controlled Substances Act. This includes “all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not.” In the wake of this federal change, a significant interstate market has emerged for hemp extracts and cannabinoids.  

Many of these extracts and cannabinoids are non-intoxicating, but some are THC variants that have an intoxicating effect similar to delta-9 THC or can be chemically modified into an intoxicating THC variant. Courts have interpreted the federal statute to mean that even chemically modified hemp extracts are federally legal hemp products because the dispositive factor for this determination is the provenance of the material and not the method of manufacture. 

The rapid growth of hemp-derived cannabinoids, such as delta-8 THC, coupled with federal inaction for regulatory clarity, presents both challenges and opportunities for state governments. Emerging inconsistencies in state approaches to cannabis regulation, product safety concerns, potential access to intoxicating substances by minors, and an uneven playing field for businesses highlight the urgent need for thoughtful, evidence-based policy solutions at the state level. 

Reason Foundation’s model legislation offers a clear and practical framework for states seeking to regulate adult-use hemp cannabinoids effectively. This model balances consumer protection, public safety, and transparency while promoting compliance and fair competition within the industry. By setting forth homogenized standards for products containing intoxicating cannabinoids, it also lays the groundwork for future interstate commerce in other legal cannabis products, including those originating from state-regulated marijuana.   

This model legislation would implement the recommendations that Reason Foundation senior policy analyst Michelle Minton and research director Geoffrey Lawrence developed in their joint paper, “A Framework for Federal and State Hemp-Derived Cannabinoid Regulation.” It is designed to foster safety, transparency, and fair competition within the marketplace for cannabis products. It draws from best practices in states with successful programs and incorporates lessons from those facing regulatory pitfalls.  

Key Features

• Establishes a streamlined permitting and registration regime for manufacturers and sellers of hemp cannabinoid products

• Simplifies licensing categories to reduce barriers for small businesses and promote equitable opportunities

• Implements robust product testing and labeling standards

• Restricts sales of hemp cannabinoid products to individuals under the age of 21

• Reduces unnecessary taxation to curb illicit-market competition and level the playing field between “hemp” and “marijuana” businesses

Learn More

To download the full text of the Cannabis Regulatory Reform Act and explore how it can be tailored to your state’s needs, see below: 

Model Legislation: Optimal State Regulation of Hemp Cannabinoids 

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