state laws for cbd oil owners


Michigan is one of the most progressive states when it comes to decriminalizing marijuana use for medicinal and recreational purposes. Accordingly, it should be no surprise that cannabidiol (“CBD”) oil is becoming commonplace on supermarket shelves and in other retailers in Michigan. As discussed in Recreational Marijuana: How will it impact Michigan Condominium Associations, marijuana is still illegal under federal law and presents a risk to condominium associations that expressly permit marijuana use in their condominium bylaws at the present time. This article will discuss the legal differences between the use of CBD oil and marijuana as they may need to be treated differently by a condominium association depending on the language of the condominium bylaws.

Legal status of Marijuana

Michigan decriminalized medical marijuana when it enacted the Michigan Medical Marihuana Act in 2008. Similarly, in 2018, Michigan decriminalized recreational marijuana when it enacted the Michigan Regulation and Taxation of Marihuana Act. However, marijuana remains illegal under federal law and expressly authorizing the use of marijuana on property, even by somebody who is not the ultimate user, is a violation of federal law. Specifically, 21 U.S.C. 856(a) of the Federal Controlled Substances Act (the “CSA”) provides as follows:

(a) Unlawful acts

Except as authorized by this subchapter, it shall be unlawful to—

(1) knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance;

(2) manage or control any place, whether permanently or temporarily, either as an owner, lessee, agent, employee, occupant, or mortgagee, and knowingly and intentionally rent, lease, profit from, or make available for use, with or without compensation, the place for the purpose of unlawfully manufacturing, storing, distributing, or using a controlled substance.

(b) Criminal penalties

Any person who violates subsection (a) of this section shall be sentenced to a term of imprisonment of not more than 20 years or a fine of not more than $500,000, or both, or a fine of $2,000,000 for a person other than an individual.

Under the Michigan Condominium Act and Administrative Rules, a condominium association is “….responsible for the management and administration of the common elements, property, easements, and the affairs of the condominium project.” Mich Admin R 559.502(1); See also MCL 559.103(4). Accordingly, there are potentially stiff penalties for condominiums and associations, along with board members, who violate the above provision of the CSA, even if there are low odds that the federal government will take enforcement action.

In the context of medical marijuana, federal courts have also thus far held that federal law preempts state law and that there are no special exceptions for medical marijuana use. See e.g. United States v Canori, 737 F3d 181, 184–85 (2d Cir 2013) (“Marijuana remains illegal under federal law, even in those states in which medical marijuana has been legalized. See 21 U.S.C. § 903 (providing for preemption where ‘there is a positive conflict between [a provision of the CSA] and that State law such that the two cannot consistently stand together’). While medical marijuana may be technically illegal, Congress has continually defunded the ability of the Department of Justice to prosecute people that strictly comply with state medical marijuana laws through the Rohrabacher-Farr Amendment in various appropriations bills Accordingly, federal courts have issued injunctions against medical marijuana prosecutions when a person has strictly complied with the medical marijuana laws in their state. See e.g. United States v McIntosh, 833 F3d 1163, 1176–77 (CA 9, 2016). However, as will be discussed below, CBD oil has a different status under federal law, and condominium associations may want to differentiate between permitting marijuana use and the use of CBD oil.

Legal status of CBD Oil

Michigan is one thirty-eight (38) states that have adopted laws that have legalized the use of cannabidiol (“CBD”) oil in some fashion. On December 28, 2018, Michigan amended its public health code to permit the use of CBD oils. MCL 333.7106 now provides in pertinent part:

…(2) “Industrial hemp” means the plant Cannabis sativa L. and any part of that plant, including the viable seeds of that plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9-tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis. Industrial hemp includes industrial hemp commodities and products and topical or ingestible animal and consumer products derived from the plant Cannabis sativa L. with a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis.


(4) “Marihuana” means all parts of the plant Cannabis sativa L., growing or not; the seeds of that plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant or its seeds or resin. Marihuana does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted from those stalks, fiber, oil, or cake, or any sterilized seed of the plant that is incapable of germination. Marihuana does not include industrial hemp.

However, unlike the traditional use of marijuana, the federal CSA was also amended in 2018, through the 2018 Farm Bill, to permit the use of CBD oil. 21 U.S.C. 802(16) now states as follows:

(B) The term “marihuana” does not include

(i) hemp, as defined in section 1639o of title 7; or

(ii) the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

Like Michigan law, 7 U.S.C. 1639o now defines “hemp” as follows:

(1) Hemp. The term “hemp” means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.

Accordingly, while there are various federal regulations as to the growth of hemp, transportation of hemp and/or inclusion of hemp into food products that are regulated by the FDA, which are continually evolving, there is nothing presently illegal about using CBD oil, so long as the CBD oil is in strict compliance with the above statutes.

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The Michigan Condominium Act, specifically, MCL 559.165 states that, “Each unit co-owner, tenant, or nonco-owner occupant shall comply with the master deed, bylaws, and rules and regulations of the condominium project and this act.” Given that the use of CBD oil is a new fad, it is unlikely to be specifically addressed in most condominium bylaws. Rather, many condominium bylaws contain a standard provision that prohibits “illegal” activity. For example:

No illegal or offensive activity will be carried on in any Units or on the Common Elements, Limited or General, nor will anything be done which may be or become an annoyance or a nuisance to the Co-owners.

Accordingly, while a Michigan condominium association could likely rely on the above bylaw provision to prevent marijuana use in violation of federal law, it would not be able to rely on the above provision to prevent the use of CBD oils that strictly complied with federal and state law. As a practical matter, most condominium associations will not see a need to prevent the use of CBD oils by a co-owner, as they are unlikely to cause a nuisance to other co-owners often association with smoking marijuana. However, condominium associations should be aware that unless the condominium bylaws expressly ban CBD oil, or that a co-owner is using a CBD oil with a higher concentration of THC than legally permitted, that the association will not likely be able to prevent a co-owner from using CBD oils. Rather, a condominium association seeking to prevent co-owners from using CBD oils would likely need to amend the condominium bylaws to expressly restrict such an activity pursuant to MCL 559.190.

Cannabis oil openly sold by Iowa stores without state permits, despite legal questions

Iowans who want to buy cannabis oil to treat a range of ailments don’t have to wait a year for state officials to set up a tightly regulated distribution system – because versions of the products already are for sale on store shelves.

State and federal officials say the oils, known as cannabidiol or CBD, are marijuana products that shouldn’t be sold in unregulated stores. “It’s illegal,” said Andrew Funk, executive director of the Iowa Board of Pharmacy. Police in two towns have recently seized products from store shelves.

Despite such warnings, several Iowa businesses continue to openly sell CBD products, including oils, caplets and creams. Store owners and their out-of-state suppliers say the oil is extracted from hemp plants that were bred to have extremely low levels of THC, the chemical that recreational marijuana users seek. They say hemp is related to marijuana, but is not the same. “It’s not about getting high. It’s not about getting stoned. It’s about having a better quality of life,” said Kim Loeffler, owner of the Corner Store Apothecary in Cedar Rapids.

CBD products are also readily available for order on the internet. Such unregulated sales have been ramping up as Iowa administrators work to implement a new state law allowing sales of medical marijuana products that are made and distributed under strict rules. That system, which is to go into effect in 2019, will have one state-licensed production facility and up to five authorized dispensaries. Sales will only be allowed to patients who obtain state permits after their doctors certify they have conditions such as epilepsy, cancer, multiple sclerosis, AIDS or Parkinson’s or Lou Gehrig’s diseases.

Police in Muscatine and Carroll have recently seized CBD products being sold by businesses.

Muscatine police sent samples to the state crime lab for analysis, Muscatine County Attorney Alan Ostergren wrote in a statement posted online Tuesday. “This analysis confirms that the CBD products seized in the investigation are marijuana under Iowa law. It is illegal to possess or distribute them,” he wrote. Although Ostergren decided not to file charges, he warned that future violations might be prosecuted. He urged residents to destroy any CBD products they have.

Carroll police also recently seized CBD products from two businesses, which they aren’t publicly identifying. Police Chief Brad Burke said his department conferred with the Iowa attorney general’s office before making the seizures. “It’s a confusing law,” he said. “It’s going to be an interesting year to see how this all plays out.”

Loeffler said she’s confident her Cedar Rapids business is on solid legal ground. Her tidy shop in the Czech Village neighborhood is far from clandestine. The CBD products are prominently displayed, and Loeffler said her customers have included several law-enforcement officers. Last month, she proudly testified about her business during a meeting in Ankeny of a state board that is helping set up Iowa’s new regulated medical marijuana system. Her husband also testified to the board, recounting how CBD products helped ease his severe epilepsy symptoms.

Loeffler said in an interview that she doesn’t advise customers about how to respond to their health issues. However, her store’s website says the CBD she sells “is used to treat numerous disorders, such as Alzheimer’s, Parkinson’s, MLS, epilepsy, chronic fatigue, (and) digestive issues.”

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Loeffler’s testimony last month about her CBD sales drew no response from the state board members, most of whom are physicians. Nor did her description draw comment from staff members of the Iowa Department of Public Health and an assistant attorney general who were present at the board meeting.

When the Register later asked the attorney general’s office about the legality of the business that Loeffler described, spokesman Geoff Greenwood said the lack of response from state officials at the meeting should not be interpreted as approval of unregulated CBD sales. Greenwood said board members and state staff were simply listening to public comment at the meeting, and they were not in a position to respond at the time.

Greenwood added that the state’s legal definition of marijuana does not depend on the levels of THC present in materials extracted from cannabis plants. Anyone making or distributing marijuana products outside of the state’s new regulations would do so at their own legal risk, he said.

Greenwood noted that the Iowa Board of Pharmacy advised pharmacists last May to refrain from selling CBD products, such as oils or creams, even if the products are described as low-THC. The board said in its advisory that it considers CBD products “Schedule I” materials, which “cannot be purchased, sold or transferred in or into the state of Iowa.”

Last week, the Governor’s Office of Drug Control Policy sent police departments and county attorneys a copy of a memo on the issue from the Iowa Department of Public Health. “It is the position of the department that CBD products other than those manufactured under the department’s regulatory program are not legal in the state of Iowa,” the memo says.

The state’s new medical-marijuana program will allow sales of products that have up to 3 percent THC. That’s at least 10 times the level reportedly contained in many of the CBD oils being sold informally.

But Funk, the pharmacy board administrator, doesn’t buy the argument that low-THC cannabis oils are legal to sell without a state permit. “It makes no difference,” he said of the THC levels in the oils being sold over the counter. The “hemp” plants being processed into oil are a variety of marijuana, he said.

Federal officials, including leaders of the Drug Enforcement Administration, also contend CBD oil is a marijuana product that is not legal to sell or ship. The Food and Drug Administration has sent several warning letters to distributors in recent years, saying their websites include inappropriate, unproven claims the products can treat medical problems, including cancer. One of the most recent letters went to Green Roads Health, a Florida company that distributes CBD products that are sold at River Rat Vapes in Cedar Rapids.

The FDA letter contended Green Roads’ website included this claim: “The following are some of the many ailments CBD oil can potentially be therapeutic for: asthma, Alzheimer’s disease, arthritis, autism, bipolar disorder, various types of cancer…” The FDA said the site also claimed “adding CBD oil as part of your daily Alzheimer’s routine has a good chance at delaying progression of the disease,” and it claimed CBD is “very useful for treating bipolar disorder.”

Green Roads responded that the FDA had mixed it up with a different company with a similar name. A Green Roads spokesman emphasized his company’s confidence in the legality of its hemp-based products. “Green Roads products contain zero THC, and they do not fall under the purview of the medical marijuana laws thereby making them legal in all 50 states,” the spokesman said.

Dan Abbott, owner of River Rat Vapes, said he was unaware of the federal warning letter to Green Roads. But he said he is confident the CBD oil he sells is legal, and he sees no reason authorities would try to block distribution of such a benign product just because it’s related to marijuana. “That would be like saying aspirin is equivalent to hydrocodone,” he said.

In 2016, the FDA said it had bought products labeled as CBD from several distributors and had the products tested at a lab. The tests found that some of the products contained little or no cannabidiol, and some of them contained significant amounts of THC.

Funk shares federal regulators’ concerns about a lack of oversight into what’s contained in packages labeled as CBD. “You’re taking a risk,” he said. Companies that make prescription medications must regularly prove what’s in them. Companies that make supplements are much more loosely regulated.

An executive for a large national supplier of over-the-counter CBD products said his company’s offerings are legal because they’re made from hemp that is grown overseas and is legally imported. “They’re a botanical extract coming from a legal agricultural hemp plant,” said Josh Hendrix, director of business development for CV Sciences, which is based in California. CV Sciences products are sold in more than 1,500 health food stores nationally, including Campbell’s Nutrition in Des Moines and Fresh Thyme Farmers Market in West Des Moines.

Similar controversies are flaring up nationally. In Indiana, state authorities seized CBD oil from several stores last year, then paused amid controversy about the products’ legality. But Gov. Eric Holcomb said in late November that after 60 days, state police would resume seizing cannabidiol products that contained any of the THC chemical.

A national trade group, the Hemp Industries Association, filed a federal lawsuit last year to try block the Drug Enforcement Administration from enforcing a new rule against CBD products. The lawsuit contends the federal agency’s rule violated a 2004 federal appeals court decision allowing sales of hemp products with small amounts of THC.

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The CBD controversy comes amid a continuing disconnect between federal law, which still classifies marijuana products as strictly illegal, and many states’ laws, which allow sales for medical or even recreational purposes. Under President Barack Obama, federal authorities generally did not interfere with residents who followed state marijuana regulations. However, supporters of medical marijuana have expressed concern that the Trump administration would shift direction.

Loeffler said she knows the subject is a legal gray area. She said she and other CBD supporters plan to ask Iowa legislators to make clear that products like the ones she sells are legal. “We want to be in line with the law,” she said.

Are you breaking the law when you buy hemp products?

It sounds like a very simple question: Can you legally buy hemp products like chocolate bark, seeds and oils?

The surprising answer: It’s complicated.

“It’s muddled, but only because of a lack of clarity at the federal level,” said Duane Sinning, who oversees the industrial hemp program for the Department of Agriculture in Colorado, the nation’s No. 1 hemp producer.

Melvin Patterson, a spokesman with U.S. Drug Enforcement Administration headquarters outside D.C., said from the agency’s viewpoint it’s quite clear.

All hemp products that can be consumed are illegal, he said.

That seems odd, considering that the products aren’t hidden in some back room. They’re on display for shoppers to see — and buy — while pushing carts down aisles at nutritional supplement and natural food stores as well as major grocery chains and retail stores.

So why are these products for sale at so many stores?

“We’re in the middle of an opioid crisis, so our focus isn’t on coming in and seizing chocolate hemp,” Patterson said. “But it’s illegal.”

Curtis Hill, Indiana’s attorney general, issued an opinion Nov. 21 concluding that CBD oils are illegal, according to the IndyStar. So Gov. Eric Holcomb directed store owners across the state to pull the product within 60 days — or state excise police could remove it. The state created a registry in April allowing epileptic patients to use the oils to ease seizures, but soon the product won’t be found in Indiana stores.

Patterson admits you can’t get high from industrial hemp products like CBD oil sprays and pills, made using cannabinoids extracted from the hemp flower. That’s because the federal government caps the level of THC — the psychoactive ingredient — to 0.3 percent, much lower than what is found in marijuana.

And most food products, like hemp seed hearts, come from the seed of the plant and don’t contain THC.

Still, the special agent points out that the plant remains a Schedule 1 controlled substance along with marijuana.

Not everyone agrees.

“In the state of Colorado, all of those (hemp) products would be legal as long as the THC came under 0.3,” Sinning said, referencing the Farm Bill. “That’s the way we would interpret it.”

Kentucky agricultural officials agree.

“Congress could not have been more clear that hemp research can occur in many ways,” including “by testing market conditions in stores where the products are sold to consumers,” according to a statement sent to Courier Journal in November from the Kentucky Department of Agriculture.

The confusion started three years ago with the passage of a key federal law.

The lengthy “2014 Farm Bill” included a section allowing states to pass laws allowing industrial hemp as long as state agriculture departments oversaw the pilot programs. Section 7606 is brief — some say too brief — at just two pages and is titled “Legitimacy of Industrial Hemp Research.” It didn’t specify who could sell it.

From Colorado agricultural officials’ perspective, the law is vague but its intent is to allow research to see if the versatile plant can be a solid cash crop for struggling farmers.

“You can’t see if there’s consumer acceptance without marketing it and selling it,” Sinning said.

The law states that industrial hemp products can be sold in states, like Kentucky and Colorado, where pilot programs are underway. But it said products should be sold for “marketing research” and not “for the purpose of general commercial activity.”

After widespread confusion, three federal agencies came together in August 2016, to put out a statement meant to clarify. But some say the opinion by the U.S. Department of Agriculture, the DEA and the Food and Drug Administration only created more confusion. It stated that the industrial hemp programs are limited to fiber and seed — it didn’t mention the CBD oil extracted from the hemp flower. That implied the oil wasn’t legal.

“I don’t know anyone who finds it clear concise and easy to follow,” Sinning said.

A month later, Ryan Quarles, Kentucky Department of Agriculture commissioner, fired back a response to the three federal agencies, calling it “inappropriate for federal agencies to impose additional restrictions.”

“Here in Kentucky, more than half of the acreage currently cultivated . is for cannabidiol (CBD)” oil, Quarles wrote. “CBD shows great promise as an economically viable agricultural product.

“It is incumbent upon those of us who work in government to do everything possible within the limits of the law to support our growers and processors.”

One of Kentucky’s largest industrial hemp growers and CBD oil producers, Ananda Hemp, and its parent company Ecofibre, based in Australia, sought legal advice before issuing a statement last December that says in part, “We strongly believe that our farming operations and products . are and will continue to be compliant and legal in all 50 states.”

Kentucky’s commissioner is among those pushing to remove industrial hemp from the list of controlled substances.

That change in federal law would remove the current confusion about whether consumers can legally buy its products.