The Orange Beach City Council is leaning toward a moratorium on business licenses for stores selling CBD oil and other projects containing the extract from industrial hemp plants.
During the July 9 work session, the council spent more than 90 minutes expressing concerns from law enforcement about rogue products endangering the public and also maintaining the city’s image as a family destination.
The moratorium discussion was sparked by an application for a business license for partners Chase Smith and Chad Kirkland to open Lotus Orange Beach on the west end of Beach Road. The pair already operates a store selling the products in Foley.
Smith said CBD products are already being sold in several outlets in the city, including Your CBD Store, which recently opened on Canal Road in the strip mall anchored by Big Fish Bar and Restaurant, four stores at The Wharf and even on the counter at local Tom Thumb stores.
“The problem is from all the reports across the state they say the oil contains nothing of the THC but at the same time if someone uses it and gets tested what is the reality based on state law of not having legalized marijuana and products and having these oils?” City Administrator Ken Grimes said. “We just know we’re trying to be a family-oriented community that’s trying to not have anything that’s sold over the counter that doesn’t need to be.”
Police Chief Joe Fierro said if an officer finds a vial of oil during a traffic stop and does a roadside test that’s positive for THC that person is charged with a Class C Felony. The test cannot discern the level of the THC, the active ingredient in marijuana.
In CBD oil and products, the amount can’t be higher than 0.3 percent. According to a report on Blog.cannabis by Sean Miller in September of 2017, products in legal marijuana shops show “most strains will be somewhere close to 20 percent, some high potency strains pushing upwards of 30 percent THC.”
That person arrested would have to wait many months for a state lab to return the results of the test on the oil found by police.
“The officer on the side of the road is limited in what he can do,” Fierro said. “He can test for the presence of it. However, with THC presence we’re limited in what we can do other than test presence. The Department of Forensic Sciences has to test the actual percentages.”
Fierro recommended denying the license until further study could be done on what he says is an unclear law at the state level. He said an attorney general’s opinion in October said anything not approved by the FDA was illegal. About two months later the Alabama Department of Agriculture implemented a law to allow farmers to grow industrial hemp and the U.S. Congress excluded it from its definition of marijuana.
The FDA has approved a CBD-based medication for seizures, but at the same time cautioned about sales of the supplement over the counter.
“It’s very easy to get confused,” Fierro said. “Basically, the state of Alabama needs to make a determination as to what they want to do so we know what have to do or not to do. Until that happens perhaps a little bit more time may be better to take a closer look at it.”
Smith cited four different state agencies reports declaring CBD products legal in Alabama.
He said press releases from the attorney general’s office, the Alabama Law Enforcement Agency, the executive director of prosecution services and the director of the department of forensic science say CBD products are legal.
One of the releases read, in part, that “as a result of a Congressional action CBD derived from industrial hemp with a THC concentration of no more than 0.3 percent can be legally produced sold and possessed in the state of Alabama.”
“There’s no ambiguity there,” Smith said. “It’s legal per all four of those departments that have issued those press releases.”
Concerns were raised about regulating the products sold to ensure they were under that 0.3 percent threshold. Smith said all of his products are tested and certified by at a third-party lab.
“Everything in our store comes with a certificate of analysis,” Smith said. “Not even by the company themselves but an outside lab to run the tests to show all the oils that are in it.”
Mayor Tony Kennon said his worries were not with stores who were doing business the right way, but rogues who are bound to pop up with other products that may or may not be 0.3 percent THC.
“I have been in the supplement industry and I know for a fact if there is a fad and there’s money to be made then the fakes, the frauds as CBD oil companies and they will be marketing CBD oil that is not less than 0.3 percent that’s not regulated,” Kennon said. “Our police have to deal with the fact that if it tests at even 0.1 it’s an illegal situation for them because they don’t know if it’s 0.1 or 21.”
Kennon said the moratorium would give the city time to study how to regulate CBD and address concerns officials and some citizens have about the products.
“All we’re doing is saying let’s take some time to create an ordinance that will prevent what we know what is going to happen with the frauds and the fakes,” Kennon said. “Do we require onsite recordkeeping so when we walk in and look at the product you’ve got the lab tests are right there for us? And what do we do with our police department?”
The city does not want to completely ban the products, Kennon said, but wants to ensure what is sold meets the criteria for CBD from industrial hemp.
“All we’re talking about is the business license,” Kennon said.
Smith asked if the other stores in town would have to stop selling their products as well. Kennon said that would be determined during the course of the city’s research on how to regulate CBD products.
In Baldwin County, there are also CBD shops in Foley, Elberta, Magnolia Springs and Daphne.
The city council will likely vote on the CBD business moratorium at its July 16 meeting but didn’t say how long it would be enacted. In February, the city of Alabaster in Shelby County south of Birmingham voted for a yearlong moratorium on any business expecting to gross more than 10 percent off the sale of CBD products.
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