South Dakota Governor Kristi Noem has vetoed a bill that sought to increase THC levels in industrial hemp and its derivatives. Industrial hemp was legalized in 2018 after Congress approved the Farm Bill and allowed farmers across the country to cultivate, process and sell industrial hemp with less than 0.3% THC in state and tribal programs.
THC (delta-9 tetrahydrocannabinol) is the main chemical agent in marijuana, and it produces the plant’s infamous psychoactive effects. But while marijuana contains high enough levels of THC that the chemical can cause mind-bending effects, industrial hemp has very little THC and no psychoactive effects.
Retailers across the country can now carry and sell hemp products as long as they contain less than 0.3% THC. According to Governor Noem, the bill to increase THC limits in industrial hemp would “jeopardize the effectiveness and safety” of South Dakota’s industrial hemp sector. She said that the measure would conflict with federal law that sets THC levels in hemp to below 0.3% while making it impossible for marijuana products, which usually contain well over 0.3% THC, to be classified as hemp products.
The governor said in a public statement that passing bill HB 1209 would go against the “clearly expressed will of the people,” referring to state residents who rejected a recreational cannabis measure in the 2022 ballot. Bill HB 1209 was sponsored by Representative Oren Lesmeister and would have increased THC limits in industrial hemp to 5%. However, Governor Noem noted that doing so would undermine the state’s enforcement of drug laws and jeopardize its hemp program.
South Dakota currently allows for THC levels of up to 1% for hemp plants that are currently in the processing stage. Bill sponsor Lesmeister said that while these high levels are temporary, they are inevitable during processing when highly concentrated oils and cannabinoids are being extracted from the plant matter. He added that as hemp product processors aren’t regulated by the federal market, states with hemp programs often overlook higher-than-0.3 % THC concentrations during processing.
His measure would make it so that THC levels of up to 5% were allowed during processing, similar to regulations in New York and Colorado. Lesmeister explained that the current 1% upper limit was a compromise, but that processors regularly exceed 1% THC levels in processing before THC levels drop to below 0.3% THC once the final product is complete.
This spike prevents licensed processors from accessing crop insurance and similar safety nets that are accessible to other crop markets.
Until the disconnect between marijuana policies at the federal level are updated to be in sync with the reality at state level, many budding entities such as Advanced Container Technologies Inc. (OTC: ACTX) may walk a tightrope trying to serve companies within jurisdictions where marijuana is permitted for either therapeutic or recreational use.
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