Alibi V.27 No.32 • Aug 9-15, 2018

Baked Goods

Signs and Portents

CBD lands traveler a felony charge

Baked Goods logo
Rob M.

The legality (or illegality) of CBD might be one of the most misunderstood aspects of cannabis law in the US.

Even though the Drug Enforcement Agency's repeated confirmations that CBD that was not derived from a hemp plant in a state with a hemp pilot program is illegal under the current scheduling of cannabis-derived extracts, the agency has stated that it doesn't consider cases of CBD possession to be a priority. This has allowed companies selling and transporting the substance across state lines to disregard the law and assume they were safe from prosecution.

So far (other than a failed attempt by a Tennessee District Attorney to raid retail CBD shops in February) it seemed as though sales and possession of CBD were going ahead without any intervention from authorities. Sellers continued to falsely maintain that CBD derived from hemp was legal in all 50 states and the drug was being bought by people from all walks of life seemingly without the fear of arrest. Earlier this year, a Ninth Circuit federal court decision clarified that CBD oil derived from a hemp plant in a state with a legally implemented hemp pilot program was exempt from DEA authority (though CBD remains a controlled substance). And the Senate recently put out their version of the 2018 Farm Bill, which, if approved as-is, will effectively legalize hemp by including an amendment to distinguish hemp from cannabis and remove it from the list of controlled substances.

So things have been looking good for the future of hemp-derived CBD.

But last week, a California woman who has been working in New Mexico for the last several months put up a GoFundMe page asking for financial support in her current legal battle over a small bottle of CBD.

Nita Maddux says she was driving from Taos to Montana to go see her mother and two grown children before returning to California. According to her account, she was working on a novel for the last seven months while staying in Taos. She also worked at a health food store called Cid's while she was there, where vendors sometimes sent samples. It was in possession of one of these samples—a 10ml bottle of hemp-derived CBD oil made by Colorado-based Functional Remedies (whose website incorrectly claims that hemp is legal in all 50 states)—that Maddux was pulled over in Jackson, Wyo., for driving with expired license plates and an expired driver's license.

According to Planet Jackson Hole, Maddux was arrested after being determined a “flight risk” and transported to the Teton County jail. While in custody, her bag was searched and the bottle of CBD oil was found. Police tested the substance with a NIK drug test and determined that THC was present in the oil. It was then reportedly sent to a crime lab for analysis while Maddux stayed in a jail cell for 36 hours before being released on a $1,000 bond. Her hearing for the felony charge of possessing a controlled substance will be held Aug. 16.

Maddux is a 50-year-old yoga instructor who has spent much of her life traveling and volunteering in places like Haiti, the Philippines and Oregon prisons. She worries that her volunteer work will be endangered if she receives a felony charge on her record.

To help pay for legal fees, she claims she's had to use up all her funds, borrow money and sell her car to raise $5,000. She's now staying in Montana with a friend so she can travel more easily to Wyoming.

And to add insult to a kick in the teeth: At the time of her arrest the very same bottle of CBD oil was being sold on retail shelves in Wyoming. Two weeks after her arrest—in a completely unrelated incident (so don't ask)—police went into Jackson Whole Grocer and Lucky’s Market in Jackson and informed the owners that if they didn't pull the product off their shelves, they'd be facing charges.

The moral of the story: Give Wyoming a wide berth and insult their government at every opportunity.

N.M. Cannabis Tax Projections Considered

Joseph Bishop-Henchman, executive vice president of the Tax Foundation, spoke to the state's Revenue Stabilization and Tax Policy Committee last month about taxing legalized cannabis.

The Santa Fe New Mexican reports that the Tax Foundation's calculations indicate that a 15 percent retail tax on the drug could raise about $34 million in a year—a 25 percent tax could raise about $57 million. Those numbers don't include licensing fees, gross receipts revenue or other factors (like cannabis tourism money—a market that is swiftly disappearing).

The report was based on data from states that have already legalized and initialized retail cannabis markets—like Colorado and Washington. The foundation's projections came from the states' initial demand with adjustments for sales made to tourists. It was recommended that a tax in the high teens or low 20s be adopted to discourage black market sales.

Bishop-Henchman made it clear that the organization did not support or oppose cannabis legalization in any state, however.

Some financial analysts have warned that revenue from cannabis taxes will still only make a small portion of states' yearly incomes though. Senior analyst at Moody’s Investors Service Grayson Nichols has said there are only “limited opportunities for significant market expansion” in the cannabis industry in the long run. He called cannabis tax revenue “marginally credit positive.”