An Alaska lawmaker has introduced a bill to create a task force to study the potential medical uses of psychedelic drugs including psilocybin and MDMA. The legislation, Senate Bill 166, was introduced earlier this month by Democratic state Senator Forrest Dunbar.

If passed by the legislature and signed into law by Republican Governor Mike Dunleavy, Dunbar’s bill would establish a task force that would be given one year to study how psychedelics might be used to address Alaska’s mental health challenges. The task force would investigate paths to legalize psychedelics, requirements for licensing and insurance, and barriers to access to the drugs.

“We want Alaska to have a regulatory framework to potentially allow medical providers to use the substances, which had been shown in sort of the early data of the tests to potentially have really positive impacts on people dealing with trauma and with addiction,” Dunbar said in a statement, according to a report from Alaska Public Media. 

The psychedelics task force created by the legislation would consist of people representing the healthcare needs of Alaska Natives, military veterans and survivors of domestic abuse and sexual assault. Dunbar said it is important to include Alaska Natives in the task force, noting that other states have not included representation of Indigenous communities and traditional healers in their discussions about psychedelics policy reform.

Dunbar introduced Senate Bill 166 in anticipation of a potential change in the legal status of psychedelic drugs at the federal level. Clinical research and other studies into psychedelics such as psilocybin and MDMA have shown that the drugs have potential therapeutic benefits, particularly for serious mental health conditions such as depression, PTSD, substance misuse disorders and anxiety. 

“It doesn’t work for everyone, but there are certainly people who could access these substances and potentially have life changing medical results,” Dunbar said.

Psychedelic Research Shows Promise

Research published in the peer-reviewed journal JAMA Psychiatry in 2020 found that psilocybin-assisted psychotherapy was an effective and quick-acting treatment for a group of 24 participants with major depressive disorder. A separate study published in 2016 determined that psilocybin treatment produced substantial and sustained decreases in depression and anxiety in patients with life-threatening cancer.

In 2017, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation for psychotherapy utilizing MDMA, the psychedelic drug commonly known as Ecstasy, indicating that the therapy is a significant improvement over existing treatments. Last month, MAPS Public Benefit Corporation (MAPS PBC), a subsidiary of the groundbreaking psychedelics nonprofit advocacy group the Multidisciplinary Association for Psychedelic Studies (MAPS), announced it had submitted an application seeking FDA approval for MDMA-assisted therapy. Only weeks later, the organization announced it had changed its name to Lykos Therapeutics and had raised $100 million in financing to develop psychedelic therapies.

As the research continues, Dunbar said it is important to address psychedelics policy including current prohibition and potential legalization so the drugs will be available to people who can benefit from them.

“The hope is because these are medical treatments that we would find a way to bill insurance like anything else,” Dunbar said. “How do we make sure we can bill Medicaid and bill private insurance? And I know the indigenous community in particular needs to think about, and will help guide the task force, so that we can make sure we’re getting funds into the traditional healers’ hands as well.”

Melissa Bradley, an epidemiologist based in Anchorage who studies psychedelic medicines, said that she became interested in the field after seeing the strong research data. She notes that psychedelic therapy is not an easy undertaking. Many patients find the experience challenging or upsetting during treatment, but long-lasting improvements in mental health have been reported for many patients. 

Most research into the therapeutic potential of psychedelics is conducted in a controlled environment. Although the method is effective, finding ways to use the drugs in other, less controlled settings could be the key to greatly expanding access to psychedelic therapy. 

“To really figure out the mystery of psychedelics is figuring out the mysteries of consciousness,” Bradley said. “And, we’re kind of poking at that, on the research side of things, but it’s also moving forward, in terms of policy. And so, it will be kind of a Wild West in terms of policy and regulations.”

Dunbar’s bill has been referred to the Senate Labor and Commerce Committee for consideration. Democratic State Representative Jennifer Armstrong has filed companion legislation to Senate Bill 166 in the Alaska House of Representatives, where the measure has been assigned to the Health and Social Services Committee. No hearings have yet been planned for the bills, but Dunbar said he hopes to have one scheduled for early February.

A group of Alaska hemp growers and manufacturers has filed a lawsuit against the state challenging its new hemp regulations, arguing that they are unconstitutional and contrary to federal law. The new rules, which were approved in October and went into effect last week, are designed to regulate intoxicating hemp products. The lawsuit brought by plaintiffs including the Alaska Industrial Hemp Association and four businesses, was filed Thursday in U.S. District Court in Anchorage, naming the Alaska Department of Natural Resources (DNR), its commissioner, the state director of agriculture and Lt. Gov. Nancy Dahlstrom as defendants in the case.

The 2018 Farm Bill legalized hemp nationwide, defining the crop as cannabis with a THC concentration no greater than 0.3% by dry weight. But under Alaska’s new regulations, the DNR is prohibited from approving “an industrial hemp product that contains delta-9-THC.”

Critics of the new rules believe the regulations go too far and will likely stifle the hemp industry. Christopher Hoke, an attorney representing the plaintiffs in the lawsuit, says that the regulations will make nearly all of the state’s hemp products, including beverages, gummies and other edibles, illegal. 

“We’re just harming our own here,” Hoke told local media, adding that he has filed for a temporary restraining order to stop the new regulations from being enforced while the case makes its way through the legal system.

“We’ve asked for expedited consideration,” Hoke said.

In the complaint filed in the lawsuit, he argues that the new rules are a violation of the U.S. Constitution’s commerce clause.

“All hemp is federally lawful to possess, and hemp that fits the federal definition may not be interfered with as it flows through interstate commerce,” the complaint reads.

Industry Experts Weigh In On Legal Action

Michelle Bodian, partner at the cannabis law firm Vicente LLP, explained the legal basis of the lawsuit, noting that the legal action brings up some of the same issues argued in a similar case filed in Florida last week.

“This is the second hemp product-related lawsuit this week and highlights yet again the need for a consistent national framework. The plaintiffs here make similar arguments as the plaintiffs in the other lawsuits to date, mainly that the amended Alaska regulations interfere with interstate commerce and are violations of the 2018 Farm Bill and the Constitution’s dormant commerce clause, and that federal law preempts state law.” 

Bodian added that it is “hard to say for certain the chances of success, but so far with these lawsuits, the wins outpace the losses.”

The lawsuit is supported by the U.S. Hemp Roundtable, a national trade group for the hemp industry. Jonathan Miller, general counsel for the group, says that the regulations go to far and put the growing hemp industry at risk.

“We strongly support the hemp growers’ lawsuit. Alaska’s new regulations, while introduced under the guise of restricting impairing products, would virtually eliminate the non-intoxicating hemp and CBD industries,” Miller writes in an email. “By banning products with any level of THC from the retail marketplace, Alaska would be prohibiting the vast majority of safe, healthy, non-intoxicating products that contain traces of THC but not at levels that would potentially impair consumers. This smacks of an unscrupulous effort to reduce competition while hiding behind false claims of consumer protection.” 

Alaska’s new regulations on hemp products are supported by representatives of the state’s regulated cannabis industry, who say the rules will subject intoxicating hemp products, which are currently unregulated, to the same regulations as THC products.

“For one, it keeps intoxicating products out of the hands of minors, which is a big thing,” said Ryan Tunseth, president of the Alaska Marijuana Industry Association, “and two, it makes sure that if you are selling intoxicating products, that you’re following all the same regulations that Alaskans expect, and (the state) is able to capture tax revenue from that.”

The lawsuit has been assigned to Judge Sharon Gleason, who has not yet established a schedule for written arguments on the requested restraining order. Hoke said that he believes his clients will prevail once the case is heard.

“I think this should fall our way,” he said.

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Hundreds of Alaska residents will have their prior marijuana convictions removed from the state’s online court database.

That move follows an order late last month from the state Supreme Court last month, according to local media reports. 

Local news station KTUU reports that, as of May 1, “marijuana possession convictions of about just under 800 Alaska residents will be removed from Courtview, a public, online database of court cases.”

The order “follows years of similar, unsuccessful, legislative efforts to join a nationwide trend,” according to the Anchorage Daily News.

“I’m glad that the Supreme Court has ordered this,” said Democratic state Sen. Scott Kawasaki, as quoted by the Anchorage Daily News.

As stipulated by the state Supreme Court, the removal from the system will apply to individuals who were “convicted of possessing less than one ounce of marijuana … or a prior version of that statute that criminalized the same conduct, or a municipal ordinance that criminalized that same conduct if … the defendant was 21 years of age or older at the time of the offense, and … the defendant was not convicted of any other criminal charges in that same case.” 

According to the Anchorage Daily News, those “records will still be available for inspection at courthouses and will be discoverable by a formal criminal background check, but they won’t be as easy to find for the general public.”

Alaska legalized recreational cannabis for adults in 2014, when a majority of the state’s voters approved a ballot measure ending the prohibition on pot. 

“Given that (marijuana) has been legal for eight years, it appeared to the Supreme Court that this was an appropriate time not to have people, as I say, suffer the negative consequences that can stem from having your name posted on Courtview. Because the conduct is considered legal right now,” said Nancy Meade, the general counsel for the Alaska Court System.

In September, Alaska Gov. Mike Dunleavy, a Republican, issued an order establishing a new task force “to review the current marijuana tax and fee structures, and regulations applicable to marijuana operators, and provide recommendations for improvement to the Office of the Governor.”

“In the past seven years Alaska’s marijuana industry has flourished but is still considered a new and evolving industry in Alaska,” Dunleavy said in the announcement. “As we would expect to see with any new industry, concerns have been raised about the structure the industry has been operating under. A cornerstone of my administration has been to review unnecessary regulations that are a burden to business, while ensuring oversight to protect the health, life, and safety of all Alaskans. It is my hope that with the formation of the Governor’s Advisory Task Force on Recreational Marijuana, we can bring together a variety of voices and perspectives to evaluate existing provisions and consider recommendations to improve the viability of the industry.”

Dunleavy’s office said the task force will be comprised of 13 members, three of whom will be “The Commissioner of the Department of Revenue or the Commissioner’s designee; The Commissioner of the Department of Commerce, Community and Economic Development or the Commissioner’s designee; [and] The Director of the Department of Natural Resources, Division of Agriculture.”

The remaining ten members of the task force are identified as follows: “One member who sits on the Alaska Marijuana Control Board; One member who represents a city, borough, or municipality that allows recreational marijuana businesses within its jurisdictional boundaries; One member that is a standard licensed marijuana cultivator in the State; One member that is a limited licensed marijuana cultivator in the State; One member that is a licensed marijuana product or concentrate manufacturer in the State; One member that is a licensed marijuana retailer in the State; Three licensed marijuana operators from any segment of the industry; [and] One public member.”

By Jodi Green, Miller Nash LLP; Shay Gilmore, The Law Office of Shay Aaron Gilmore
Members of NCIA’s Risk Management and Insurance Committee

Although the concept of state-legal cannabis has been around in some shape or form since 1996, cannabis remains illegal to consume in most public places. In other words, legal cannabis consumption remains relegated to back alleys, derailing efforts to “normalize” cannabis use. Tourists visiting popular cities where weed is legal are caught in the unenviable Catch-22 of being able to purchase, but not publically consume, the product. And those who attempt to use cannabis in public still face criminal penalties in some states, with minorities three times more likely to be targeted for arrest, perpetuating racial disparities at a tremendous social cost. 

Enter the cannabis lounge. Cannabis lounges — also known as “consumption lounges,” cannabis cafes, or some variation on that theme — are in simplest terms the cannabis equivalent of a bar or restaurant. Depending on state and local regulations, lounges offer users the chance to congregate in a public place and smoke a joint, try out a $500 gravity bong, or sip on a cannabis drink. With any luck, consumers may enjoy their cannabis with a snack or dinner, but mixing with alcohol is typically not allowed. 

As with any “new” risks, some cities, states, and insurers are… concerned. Despite some obvious tax and social benefits, detractors cite a host of reasons to prevent lounges from coming to a city near you, including at the forefront: fears of public nuisance (odors, theft, and disruption) and overconsumption — especially because most states insulate cannabis cafes from liability for harm caused by obviously intoxicated or underage users, unlike dram shop laws for alcohol.

As another NCIA member recently pointed out, even in states that do allow cannabis cafes, regulatory bodies continue to struggle with how to shape the laws and regulations governing lounges to afford adequate consumer protection while allowing businesses to thrive. Moreover, without a better understanding of the regulatory landscape, some insurers — whose business model hinges on the ability to accurately price a risk — may be unwilling to play in this new cannabis lounge market.

A Sampling of State Approaches to Cannabis Lounges

Alaska led the country in 2019 in licensing on-site consumption. A handful of states and localities have followed Alaska’s guide, and more are anticipated to join this year, including Michigan and New York. We compare a few regulatory schemes below and also consider the impact of dram shop legislation on risks faced by the industry. 

California

California, governed on the state level by the Medicinal and Adult Use Cannabis Regulation and Safety Act, delegates to localities the right to open consumption lounges. Put simply, cities have to affirmatively “opt in” to allow lounges. With a few contingencies — including that patrons must be 21 or older and no alcohol or tobacco can be sold on premises — “a local jurisdiction may allow for the smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a” licensed retailer. See BPC § 26200(g). 

To date, only a few localities have opted in to allow cannabis lounges, including San Francisco, Oakland, and Palm Springs. West Hollywood, in efforts to create an epicenter for canna-tourism, plans to allow up to 16 lounges within its jurisdiction. Because state law provides little regulatory guidance for lounges, localities generally provide more specific guidance. As an example, West Hollywood’s local municipal code requires security guards on site, as well as within a two-block radius surrounding the business during operation, and allows the sale of cannabis to an individual “in an amount reasonable for onsite consumption.” West Hollywood Municipal Code §5.70.041. Only one lounge is currently open in West Hollywood, the Artist Tree’s Studio Cannabis Lounge, which offers not only lounge access but cannabis yoga, live music, and comedy shows, along with a revolving selection of local art. The Woods, another West Hollywood dispensary with a soon-to-open courtyard lounge space, is also slated to open in 2022. 

Although California law significantly limits third-party liability for alcohol-related accidents, it does not afford cannabis owners the same protection. For example, California Civil Code §1714 explicitly states that furnishing alcohol “is not the proximate cause of injuries resulting from intoxication,” which has essentially absolved bars, restaurants, party hosts, and most others of potential liability for selling or furnishing alcohol to customers and guests with an exception for liability arising from the furnishing of alcohol to an “obviously intoxicated minor.” See California Business & Professions Code § 25602.1. Without similar protections for cannabis lounges, injured parties could attempt to sue under a negligence theory if a business or employee serves an intoxicated patron who causes harm.

Colorado

As of January 1, 2020, local jurisdictions in Colorado can opt-in to the state’s cannabis hospitality business license regime (Colo. Rev. Stat. § 44-10-609), and as of March of 2022, the City of Denver has approved cannabis hospitality businesses for operation. Denver operators include the first social equity applicant in Denver approved for a hospitality license, the Tetra Lounge, although from its website Tetra Lounge’s website describes itself as “a private lounge,” requiring a monthly or annual membership fee and a liability waiver to gain access.  

As to dram shop liability, although Colorado law authorizes damages against a licensee for willfully and knowingly selling or serving alcoholic beverages to a visibly intoxicated person, the Colorado Legislature caps liability at $150,000 (Colo. Rev. Stat. § 12-47-801 (3)(II)(c)). This damages cap improves (i.e., reduces) the ISO hazard grade, resulting in the improvement of insurance options available for liquor liability. The legislature has not adopted the same or a similar damages cap on liability for cannabis consumption establishments. 

Nevada

In June 2021, Nevada’s Governor signed Assembly Bill 341 into law, authorizing the Nevada Cannabis Compliance Board (“CCB”) to license and regulate consumption lounges across the state, subject always to local approval. The State plans to issue up to 65 lounge licenses (40-45 for lounges attached to existing dispensaries, 20 for independent lounges) with 10 reserved for social equity applicants. 

Most recently, on June 28, 2022, the CCB voted to unanimously approve a host of regulations for cannabis consumption lounges. Nevada’s extremely detailed state regulations prohibit the sale of “single use cannabis products” with more than 3.5 grams of “usable cannabis” and 10 mg of THC for edibles; prohibit the removal of any cannabis products from a lounge; require a mitigation plan for impaired driving and detailed employee training for overconsumption; and require consumer education and warnings to customers, among other things. As with other states, Nevada allows local jurisdictions to prohibit consumption lounges and to implement more stringent regulations than state law. 

Unlike other states, however, Nevada law carves out protections for cannabis lounge operators just as it does for alcohol. Nevada law already protects businesses that serve or sell alcoholic beverages from injuries inflicted by an intoxicated person. And while any person who knowingly furnishes an alcoholic beverage to any person under 21 years of age is guilty of a misdemeanor, the law provides only for criminal penalties, not civil liability. The Nevada Supreme Court has repeatedly refused to impose responsibility on vendors selling alcohol absent a legislative provision. See Snyder v. Viani, 885 P.2d 610 (Nev. 1994) (holding consumption is the proximate cause of alcohol-related injuries and dismissing the negligence claim against a tavern owner for alcohol service). The same rules will apply to cannabis operators. 

Illinois

Over two years after full legalization of adult-use commercial cannabis in Illinois, cannabis lounges in Illinois are still relatively rare, with the first Chicago-area marijuana consumption lounge opening on April 20, 2022. Like other states, the State of Illinois does not directly license lounges, but it allows local governments to opt in.

Illinois creates a cause of action against sellers for injury by an intoxicated person. § 235 Ill. Comp. Stat. 5/6-21. The standards for liability under the Illinois dram shop law include: (1) sale of alcohol to any person who, while intoxicated, causes injury, and (2) any person owning, renting, leasing, or permitting the occupation of any building or premises with knowledge that alcoholic liquors are to be sold therein, severally or jointly, along with the person selling or giving liquor. In Illinois, the Dram Shop Statute provides the exclusive remedy for alcohol related injuries. See Charles v. Seigfreid, 65 NE.2d. 154 (Ill. 1995). The Statute also provides stringent limitations on recovery of damages. There is no equivalent in Illinois for cannabis entities. 

The Takeaway for Business Entities and Insurance Providers

As with cannabis law generally, lounge operators face a patchwork of state and local regulations that vary tremendously by jurisdiction. In most places, cannabis lounge owners are not protected by dram shop/gram shop laws that otherwise insulate bars and restaurants from liability for overconsumption. This means that companies must be vigilant in protecting themselves from liability by instituting compliance and risk-management procedures. 

In some instances, such as California’s West Hollywood, which has far fewer safeguards and guidelines than Nevada, operators are largely left to their own devices in implementing adequate risk transfer and risk management, compliance, employee training, and consumer education to limit risk of liability. While the West Hollywood municipal code requires lounges to limit cannabis sales of cannabis “in an amount reasonable for onsite consumption,” the “reasonableness” standard is rife with ambiguity and could lead to disputes regarding liability and assumption of risk if a patron overconsumes.  

Evaluating and preventing overconsumption and intoxication will be particularly difficult for cannabis when: patrons have varying experience levels with cannabis; products can be sold in more than a single serving, and no specific consumer education is required. Thus, even in locations that have more stringent regulatory oversight, companies would be wise to consult with experienced counsel and consultants to avoid or limit potential risks associated with regulatory uncertainty, civil liability, and government penalties for non-compliance. 

This brings us full circle to the question of insurance. Even in the states that allow consumption lounges, very few insurance companies provide coverage for on-site consumption (although some do). If an exclusion prohibits coverage, the company may not have coverage for important and sometimes catastrophic events, such as property damage by fire, theft/robbery, cyber events, sexual harassment or discrimination claims by employees or others, and bodily injuries to, or caused by, patrons (on and off premises). 

Most existing property, general liability, products liability, and other insurance policies — including those written for the cannabis industry — expressly exclude coverage for on-site consumption or bodily injury caused by intoxication. In fact, some existing cannabis insurance companies include a “health hazard” exclusion in their policies, which exclude coverage for any bodily injury arising in any way from the use of cannabis, including any health injury. Cannabis insurance policies may also exclude coverage for intentional or illegal acts, which some insurers may try to apply to any claim involving cannabis on the basis that the sale of cannabis violates federal law (the Controlled Substances Act), even if it is state legal. 

For current licensees that are planning to open an attached or adjacent consumption space, current insurance policies may not cover injuries arising in the lounge space. Further, any failure to identify a change in business type could prompt an insurance carrier to deny coverage for subsequent claims based on a theory of misrepresentation. 

In closing, cannabis owners should attempt to negotiate separate and/or broader coverage that carves out coverage for their cannabis-related activities, including on premise consumption, with their current insurer or seek to obtain coverage from a different carrier. Experienced insurance coverage counsel can assist with identifying reputable insurance brokers and negotiating policies that provide such coverage. Because of the limited options, companies would be wise to begin the process of identifying experienced insurance coverage advisors at the beginning of their licensing journey. 

Five years ago, when Alaska’s first legal cannabis shops started opening, there was a lot of money to be made.

“We had three fabulous, great years,” said Sue Nowland, whose Alaska Fireweed was among the first cannabis stores to open its doors in Anchorage.

Those days are over.

Cannabis businesses across the state are confronting a daunting set of issues that owners and advocates say are making it nearly impossible to survive. Some Alaskans who poured their life savings or retirement accounts into starting companies are scrambling to find someone to buy them out. Operations are failing, others are in the red and behind on taxes owed to the state.

One measure of the industry’s problems is tax delinquency: according to an August memo from the Department of Revenue, by the end of June, 56 businesses owed $1,785,751 in back taxes. Nine of the delinquent businesses have closed, though collectively they still owe hundreds of thousands of dollars in unpaid taxes.

The most salient problems, according to people within the industry, are the flat excise tax structure placed on cultivators, an over-saturation of retailers and the rigidity to which licenses are tied to real estate.

Some say the industry’s current woes are normal growing pains to be expected as a new sector of the economy finds equilibrium. But others, including many business owners and the industry’s chief trade group, are debating potential reforms that could stave off looming business defaults as more license applications work their way through the pipeline. [Read More @ Ancourage Daily News]

By Rachel Kurtz-McAlaine, NCIA’s Deputy Director of Public Policy 

After months of delay, the United States Postal Service (USPS) has released its FINAL rule enforcing the Prevent All Cigarette Trafficking (PACT) Act, effective October 21, 2021, and unfortunately, they are indeed applying it to cannabis/hemp vaporization products. The PACT Act has now made it extremely difficult for anything related to vaporization to be mailed, either business to business (B2B) or business to consumer (B2C). Your business could be affected even if you are not mailing out products. Although this is a massive burden on the cannabis/hemp vape industry, there are ways to deal with it. NCIA remains vigilant in making sure the federal government understands this unnecessary hardship to the industry, and making sure our members are fully educated on this issue.

What is the PACT Act?

The Prevent All Cigarette Trafficking (PACT) Act went into effect June 29, 2010, applying strict regulations to the mailing and taxation of cigarettes and smokeless tobacco products, effectively banning the mailing of cigarettes unless authorized by an exception. With the rise of e-cigarettes, especially their popularity among youth, Congress decided that vaporization products should be included in those provisions. On December 27, 2020, Congress modified the definition of “cigarettes” to include Electronic Nicotine Delivery Systems (ENDS), broadly defining ENDS to include nearly all vaporization products, regardless if they contain nicotine or are used for nicotine. Specifically:

“(1) any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device; and (2) any component, liquid, part, or accessory of an ENDS, regardless of whether sold separately from the device.”

When the USPS issued their notice of proposed rulemaking, they received more than 15,700 comments, with many expressing frustration with the broad interpretation of ENDS, so the USPS delayed issuing FINAL rules while it considered the practical application to the unique cannabis and hemp industries. NCIA was proud to submit comments with a broad coalition and to issue an action alert to get our members to express their concerns. 

In the meantime, the USPS issued a guidance document (“April 2021 Guidance”) (86 FR 20287) to help prepare businesses for the final rule and what documentation will be needed to apply for an exception. The exceptions include:

• Intra-Alaska and Intra-Hawaii Mailings: Intrastate shipments within Alaska or Hawaii;
• Business/Regulatory Purposes: Shipments between verified and authorized tobacco-industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes;
• Certain Individuals: Lightweight, non-commercial shipments by adult individuals, limited to 10 shipments per 30-day period;
• Consumer Testing: Limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes; and
• Public Health: Limited shipments of cigarettes by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.

18 U.S.C. 1716E(b)(2)-(6). These exceptions are the ONLY way to mail these products moving forward. Unfortunately, the USPS was not accepting applications for exceptions until the final rule was published, but now that it has been published, it is time to apply for an exception.

FedEx and UPS have already banned delivering these products, so they are out as an alternative.

How can it affect me?

If you manufacture, sell, or buy vapor products, you will be affected. Manufacturers and distributors who use the mail to get their products to stores for resale (B2B) will have to apply for an exception through the USPS Pricing and Classification Service Center. If you are a business receiving these products, you will have to work with the business that mails it to you to be included in their exception as a recipient. If you are a retailer who delivers vaporization products to consumers via the mail, such as online retailers (B2C), you will also need to apply for an exception. If you buy the end products as a consumer, expect an increase in price because of the extra costs placed on the suppliers.

What should I do?

If your business has ANYTHING to do with the manufacture, delivery by mail, or retail of cannabis/hemp vaporization products, including liquids, batteries, empty cartridges, etc., you should get familiar with this final rule that is in effect as of October 21, 2021. The USPS spends the time addressing potential issues or suggestions from the comments it received, so any questions of why they did something are probably answered there.

You will also want to read the guidance document the USPS issued in the Spring that details if you qualify for an exception and how to apply for it. This will require cooperation between the mailer and the recipient, so make sure you are working with your supplier/retailer to get all the necessary information.

What is NCIA doing?

NCIA remains committed to making sure our members understand all of the legal ramifications and how to continue operations despite this rule. We continue to work with our coalition partners to better understand the effects and best practices, and will share with you as much information as possible to ease the transition via blog posts and webinars.

I will be participating in a webinar on November 9, 2021, that will be diving deeper into the PACT Act, how your business can operate with it, and how, if any, the tax considerations of the PACT act apply to cannabis/hemp businesses: PACT Act Leaves Vaping & CBD Industries in a Fog: The Latest Tax and Legal Considerations.

As always, feel free to contact me Rachel@TheCannabisIndustry.org with any questions or concerns.

Farmers, processors and retailers in Alaska can start applying for hemp registrations Monday after the industry officially launches on April 4.

Due to the coronavirus outbreak, all registrations must be submitted electronically through the Alaska Division of Agriculture’s website.

Agriculture officials in Alaska used a social media broadcast to lay out new rules for the state’s hemp program last week, in an attempt to practice social distancing and limit in-person trips to the Division of Agriculture.

Alaska’s Industrial Hemp Pilot Program will operate under the 2014 Farm Bill pilot program rules through Oct. 31, along with at least 20 other states.