Judge tosses Minnesota ban on shipping hemp products

Retailers selling edibles with low doses of cannabinoids derived from hemp can ship products directly to customers, rather than require in-person transactions, a judge with the Minnesota Court of Administrative Hearings ruled on Thursday, Feb. 12.

The order stems from a complaint filed by Leili Fatehi, a cannabis lobbyist, business owner and partner with the Minneapolis-based consulting firm Blunt Strategies.

The complaint was filed on behalf of several owners of businesses that make and sell hemp-derived products who argued the Office of Cannabis Management’s (OCM) ban on shipping directly to customers does not comply with state law.

“The judge’s ruling is a firm rejection of agency overreach,” said Fatehi, who owns Crested River Cannabis Co. in southwestern Minnesota and was one of the leaders in the campaign to legalize recreational marijuana in the state.

“It’s an affirmation that Minnesota hemp businesses can continue to operate as they have been, shipping regulated hemp products to customers across the state.”

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Since 2022, retailers have legally been allowed to sell edibles and beverages containing relatively small amounts of THC, the active ingredient in marijuana that produces a buzz, as well as the nonintoxicating compound CBD.

The following year, the OCM was created and empowered to license and regulate the sale and distribution of cannabis-related products containing larger amounts of THC. Cannabis and hemp retailers are required to be licensed and can apply for an endorsement that allows them to deliver products to customers 21 and older.

The law also states that sellers must verify that buyers are at least 21 and not visibly intoxicated before completing a sale or delivery of lower-potency hemp edibles (LPHE). The OCM’s ban on in-state shipping of hemp products took effect Oct. 1.

The case rested largely on how hemp products are delivered. The OCM contended that in-person sales or deliveries must be the exclusive method for which the products can be provided to customers.

It argued that otherwise, “any common carrier could deliver any amount of LPHEs directly to customers by mail or courier, that would negate the entire purpose of a delivery endorsement and the requirements that come with it.”

In his order, Administrative Law Judge Kristien Butler said the law didn’t specifically ban the practice of retailers shipping products to customers.

The law ”remains silent on the modes of shipping or delivery," Butler added.

He said the Legislature did not intend to create a broad prohibition while failing to effectively communicate it.

“Language may not be added to a statute that the Legislature did not supply itself,” the judge said in his 11-page ruling. “Consequently the Office must cease enforcement of the unpromulgated and invalid rule ... prohibiting all shipment of LPHE to customers.”

In a statement to the Minnesota Star Tribune, the OCM said it was “disappointed” by the order. The agency reaffirmed that hemp businesses are still required to verify a customer’s age and that they are not visibly intoxicated before selling hemp products to them.

Fatehi said direct shipment is sometimes the easiest way for customers to access regulated products. She said it’s also practical for retailers to reach customers without operating a storefront. The ruling, she said, will allow them to stay in business.