Louisiana Joins a Growing Number of States that Have Legalized Industrial Hemp and CBD Products

On June 6, 2019, Louisiana Act No. 164 (House Bill 491) was signed into law which permits the growing, processing, handing and transportation of industrial hemp along with the sale of certain hemp-derived cannabidiol products. Specifically, La. R.S. §§ 3:1461 through 3:1471 authorize the cultivation, processing, handling and transportation of industrial hemp in Louisiana. Under La. R.S. § 3:1462(10), “[i]ndustrial hemp” is defined as “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 (THC) concentration of not more 0.3 percent on a dry weight basis.” A “[p]rocessor” is defined as any individual or business that that receives industrial hemp for storage or processing into commodities, products or industrial hemp seed. La. R.S. § 3:1462(13). The Louisiana Commissioner of Agriculture and Forestry is required to adopt rules and regulations to implement these provisions relating to the growing, processing, handling and transportation of industrial hemp and to enforce the law. See La. R.S. § 3:1464.

All industrial hemp producers, growers, processors and carriers of industrial hemp are subject to annual licensing requirements issued by the Louisiana Department of Agriculture. See La. R.S. § 3:1465. Licenses issued to processors of industrial hemp allow the licensee to handle, process (i.e. convert industrial hemp to a marketable form) and transport industrial hemp in Louisiana. See La. R.S. § 3:1461(12); see also La. R.S. § 3:1465(A)(3). Applicants for any license are subject to criminal background checks and no person is eligible to receive a license who has (1) been convicted of a felony in the last ten years or (2) been convicted of a drug-related misdemeanor in the last two years. See La. R.S. § 3:1465(D)(2). Any facility processing industrial hemp products for consumption is subject to inspection by the Louisiana Department of Health. See La. R.S. § 3:1468(C). Any person who grows, transports, processes, handles or otherwise violates the provisions of La. R.S. §§ 3:1461 through 3:1471 (or the regulations to be adopted pursuant thereto) are subject to civil fines, license suspension or revocation and/or criminal penalties, including imprisonment at hard labor for not less than one year nor more than criminal fines not to exceed $50,000. See La. R.S. §§ 3:1470-1471.

Louisiana Act No. 164 (House Bill 491) also enacted La. R.S. §§ 3:1481 through 3:1484 relating to the manufacture, distribution, importation and sale of cannabidiol products (“CBD”). Under the law, no person may process or sell: (1) any part of hemp for inhalation; (2) any alcoholic beverage containing CBD; or (3) any food product or beverage containing CBD unless the U.S. FDA approves CBD as an additive. See La. R.S. § 3:1482(A); see also La. R.S. § 40:4.9(F).  Any CBD product manufactured, distributed, imported, or sold in Louisiana must be: (1) produced from hemp grown by a licensee authorized to grow hemp by the U.S. Department of Agriculture or under an approved state plan pursuant to the Farm Act or an authorized state pilot program pursuant to the Agriculture Act of 2014; (2) be registered with the Louisiana Department of Health  and labeled in accordance with the Louisiana State Food, Drug, and Cosmetic Law (La. R.S.  40:601, et seq.); and (3) not be marked as a dietary supplement. See La. R.S. § 1482(B). The law only permits CBD products derived from hemp. See La. R.S. § 1482(G). Further, all labels must: (1) state “This product has not been evaluated by the Food and Drug Administration and is not intended to diagnose, treat, cure, or prevent any disease”; (2) contain no medical claims; and (3) have a scannable bar code, QR code or web address linked to a document or website that contains a certificate of analysis. See La. R.S. § 1482(C). The application for registration must include a certificate of analysis performed by an independent laboratory containing: (1) the batch identification number, date received, date of completion, and method of analysis; and (2) test results identifying the cannabinoid profile by percentage of dry weight, solvents, pesticides, microbials, and heavy metals. See La. R.S. § 1482(D)-(E).

Any person who sells or is about to sell any industrial hemp-derived CBD product must first obtain a permit from Louisiana’s Office of Alcohol and Tobacco Control for each place of business where any such product is sold. See La. R.S. § 1483(A). The annual permit fee is not to exceed $175. See La. R.S. § 1483(B). Criminal penalties for violations of La. R.S. §§ 3:1481 through 3:1484 include a fine not to exceed $300 for a first offense, $1,000 for a second offense and $5,000 for a third offense. See La. R.S. § 3:1484. Additionally, a third or subsequent offense requires imprisonment, with or without hard labor, for not more than two years. See La. R.S. § 3:1484(A)(3).