Cannabinoid Business Navigates Confusing Laws and Regulations

Amy Bufalini had a full house for the April 9 grand opening of her Nature’s Best CBD PA store on Vandergrift’s Hancock Avenue, which sells cannabinoid lotions, creams and oils.

The following week, her bank notified her that it was closing her account.

“They said I’m selling marijuana-based products, and I’m not. I’m selling hemp,” she said Saturday, as a steady flow of customers stopped by her convention center booth at the World Medical Marijuana Business Conference at the David L. Lawrence Convention Center, Downtown.

“That’s so hard. What am I going to do?”

Ms. Bufalini’s cannabinoid, or CBD, oils are extracted from hemp, which contains less than 1 percent of THC, the psychoactive ingredient that gets pot smokers high. Marijuana, also derived from the same plant species, may have 5 to 20 percent THC.

The federal government does not make a distinction, however: In December, the U.S. Department of Justice posted a final rule in the Federal Register stating that cannabis extracts remain illegal Schedule I drugs.

To underscore how confusing and even conflicting the laws can be, consider this:

Even in the hospitable setting of a medical marijuana conference, Ms. Bufalini was told she could display her CBD products but not sell them because that would violate state and federal laws.

“I never thought I was going to hit barriers like I did,” she admitted.

Yet when she returns home, she has Vandergrift Borough’s full approval to operate her store in Westmoreland County, the first franchise in Pennsylvania for the Colorado-based Nature’s Best CBD.

One conference panel Saturday laid out just how big the barriers can be for someone interested in starting a cannabis-related business. Banks may be reluctant to service such a business, one panelist noted, because providing such a service can technically be considered money laundering by federal regulators because the transactions involve an illegal product.

Attorney Steve Schain with the Hoban Law Group, which bills itself as the nation’s only full-service cannabis business law firm, said he knows of only two banks in Pennsylvania that have expressed willingness to work with legal medical marijuana businesses.

“They don’t want the headache,” he said of the others.

Ms. Bufalini came to the cannabinoid business the same way many speakers and vendors at this weekend’s conference did: Because of a family member’s debilitating medical condition.

Her son Jesse Jon Salensky, now 40, has muscular dystrophy and has had muscle pain and circulation problems. She researched a wide variety of alternative treatments to help him, trying 33 different vitamins, supplements, herbs and minerals.

With the CBD creams, her son has regained a range of arm movement, and blood circulation to his legs has greatly improved, she said.

Her products fall into the $69 to $139 price range, but she said a $69 one-ounce bottle of the oil provides 270 servings because it only requires three drops under the tongue. While careful not to make any claim of cures, she said people use different CBD products for ailments ranging from pain to insomnia to skin disorders to seizures.

She hopes to eventually open a shop in Pittsburgh but admits “it’s been a hard beginning” especially with the federal government classifying cannabinoid oils as an illegal drug.

“It’s silly,” she declared. “There’s no drug in it.”

Source: Steve Twedt, Author at Pittsburgh Post-Gazette
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