Nebraska's proposed rules classify hemp edibles as "adulterated," sparking a fierce backlash from businesses and lawmakers concerned about industry survival.
Hemp businesses generate an estimated $10 million in sales tax revenue each year and employ around 2,000 Nebraskans, but the state is adopting a novel approach to cracking down on hemp-derived cannabinoid products, in a move is drawing a backlash from the hemp industry and local politicians.
Following up on a January executive order from Gov. Jim Pillen (R), "Protecting Nebraskans from Intoxicating Synthetic Cannabinoid Products," the state Department of Agriculture has posted new proposed regulations that would restrict the sale of many hemp-derived products by classifying them as "adulterated" under the Nebraska Pure Food Act. Such a designation would effectively bar stores from selling the products.
That's the idea, Gov. Pillen said as he released his executive order.
"We must be able to protect our kids from these products. They’re marketed like something they are not and the hemp industry is taking advantage of that fact, said Pillen.
But Joseph Fraas of the Nebraska Healthy Alternatives Association said the proposal was nothing more than an effort to wipe out the industry.
"This is kind of the old guard’s dying attempt to ban this," Fraas said. "It would make anyone that sells it liable, civilly liable, and would basically destroy your business if you were caught selling it. It's another version of them going around the legislature, going around the will of the people," Fraas said.
The move is also getting push-back from state Sen. John Cavanaugh (D), who argues that the executive branch is exceeding its authority by imposing such restrictions and that the 2018 federal farm bill protects hemp-derived products (at least until November).
"The governor, the attorney general, and now, apparently, the Department of Agriculture are going around the law to try to ban this product that is legal in Nebraska," Cavanaugh said. "The agencies are granted authority by statute. And the point of my letter is that they do not have authority to regulate this."
Cavanaugh is calling on the Agriculture Department to pause its rulemaking process and let an interim legislative study committee parse the issue instead.
But Pillen is undeterred and in fact doubled down on his broader opposition to cannabis reforms. He and the state's Republican establishment fought bitterly to fend off medical marijuana legalization only to be defeated by the state's voters in 2024.
"Come to the Pardons Board and listen to 40 families’ stories to see how off-track in the ravine they dug," Pillen said. "And most of it all starts with marijuana. The ballot initiative was medical cannabis. It wasn't for THC everywhere, and it wasn't for over-the-counter. And it wasn't for recreational marijuana. I'm fighting that."
A hearing for the proposed regulations is set for the Department of Agriculture's office in Lincoln on April 21.