Cannabis oil openly sold by Iowa stores without state permits, despite legal questions

Iowans who want to buy cannabis oil to treat a range of ailments don’t have to wait a year for state officials to set up a tightly regulated distribution system – because versions of the products already are for sale on store shelves.

State and federal officials say the oils, known as cannabidiol or CBD, are marijuana products that shouldn’t be sold in unregulated stores. “It’s illegal,” said Andrew Funk, executive director of the Iowa Board of Pharmacy. Police in two towns have recently seized products from store shelves.

Despite such warnings, several Iowa businesses continue to openly sell CBD products, including oils, caplets and creams. Store owners and their out-of-state suppliers say the oil is extracted from hemp plants that were bred to have extremely low levels of THC, the chemical that recreational marijuana users seek. They say hemp is related to marijuana, but is not the same. “It’s not about getting high. It’s not about getting stoned. It’s about having a better quality of life,” said Kim Loeffler, owner of the Corner Store Apothecary in Cedar Rapids.

CBD products are also readily available for order on the internet. Such unregulated sales have been ramping up as Iowa administrators work to implement a new state law allowing sales of medical marijuana products that are made and distributed under strict rules. That system, which is to go into effect in 2019, will have one state-licensed production facility and up to five authorized dispensaries. Sales will only be allowed to patients who obtain state permits after their doctors certify they have conditions such as epilepsy, cancer, multiple sclerosis, AIDS or Parkinson’s or Lou Gehrig’s diseases.

Police in Muscatine and Carroll have recently seized CBD products being sold by businesses.

Muscatine police sent samples to the state crime lab for analysis, Muscatine County Attorney Alan Ostergren wrote in a statement posted online Tuesday. "This analysis confirms that the CBD products seized in the investigation are marijuana under Iowa law. It is illegal to possess or distribute them," he wrote. Although Ostergren decided not to file charges, he warned that future violations might be prosecuted. He urged residents to destroy any CBD products they have.

Carroll police also recently seized CBD products from two businesses, which they aren't publicly identifying. Police Chief Brad Burke said his department conferred with the Iowa attorney general’s office before making the seizures. “It’s a confusing law,” he said. “It’s going to be an interesting year to see how this all plays out.”

Loeffler said she’s confident her Cedar Rapids business is on solid legal ground. Her tidy shop in the Czech Village neighborhood is far from clandestine. The CBD products are prominently displayed, and Loeffler said her customers have included several law-enforcement officers. Last month, she proudly testified about her business during a meeting in Ankeny of a state board that is helping set up Iowa’s new regulated medical marijuana system. Her husband also testified to the board, recounting how CBD products helped ease his severe epilepsy symptoms.

Loeffler said in an interview that she doesn’t advise customers about how to respond to their health issues. However, her store’s website says the CBD she sells “is used to treat numerous disorders, such as Alzheimer’s, Parkinson’s, MLS, epilepsy, chronic fatigue, (and) digestive issues.”

Loeffler’s testimony last month about her CBD sales drew no response from the state board members, most of whom are physicians. Nor did her description draw comment from staff members of the Iowa Department of Public Health and an assistant attorney general who were present at the board meeting.

When the Register later asked the attorney general’s office about the legality of the business that Loeffler described, spokesman Geoff Greenwood said the lack of response from state officials at the meeting should not be interpreted as approval of unregulated CBD sales. Greenwood said board members and state staff were simply listening to public comment at the meeting, and they were not in a position to respond at the time.

Greenwood added that the state’s legal definition of marijuana does not depend on the levels of THC present in materials extracted from cannabis plants. Anyone making or distributing marijuana products outside of the state’s new regulations would do so at their own legal risk, he said.

Greenwood noted that the Iowa Board of Pharmacy advised pharmacists last May to refrain from selling CBD products, such as oils or creams, even if the products are described as low-THC. The board said in its advisory that it considers CBD products “Schedule I” materials, which “cannot be purchased, sold or transferred in or into the state of Iowa.”

Last week, the Governor's Office of Drug Control Policy sent police departments and county attorneys a copy of a memo on the issue from the Iowa Department of Public Health. "It is the position of the department that CBD products other than those manufactured under the department’s regulatory program are not legal in the state of Iowa," the memo says.

The state’s new medical-marijuana program will allow sales of products that have up to 3 percent THC. That’s at least 10 times the level reportedly contained in many of the CBD oils being sold informally.

But Funk, the pharmacy board administrator, doesn’t buy the argument that low-THC cannabis oils are legal to sell without a state permit. “It makes no difference,” he said of the THC levels in the oils being sold over the counter. The “hemp” plants being processed into oil are a variety of marijuana, he said.

Federal officials, including leaders of the Drug Enforcement Administration, also contend CBD oil is a marijuana product that is not legal to sell or ship. The Food and Drug Administration has sent several warning letters to distributors in recent years, saying their websites include inappropriate, unproven claims the products can treat medical problems, including cancer. One of the most recent letters went to Green Roads Health, a Florida company that distributes CBD products that are sold at River Rat Vapes in Cedar Rapids.

The FDA letter contended Green Roads’ website included this claim: “The following are some of the many ailments CBD oil can potentially be therapeutic for: asthma, Alzheimer’s disease, arthritis, autism, bipolar disorder, various types of cancer…” The FDA said the site also claimed “adding CBD oil as part of your daily Alzheimer’s routine has a good chance at delaying progression of the disease,” and it claimed CBD is “very useful for treating bipolar disorder.”

Green Roads responded that the FDA had mixed it up with a different company with a similar name. A Green Roads spokesman emphasized his company's confidence in the legality of its hemp-based products. "Green Roads products contain zero THC, and they do not fall under the purview of the medical marijuana laws thereby making them legal in all 50 states," the spokesman said.

Dan Abbott, owner of River Rat Vapes, said he was unaware of the federal warning letter to Green Roads. But he said he is confident the CBD oil he sells is legal, and he sees no reason authorities would try to block distribution of such a benign product just because it's related to marijuana. "That would be like saying aspirin is equivalent to hydrocodone," he said.

In 2016, the FDA said it had bought products labeled as CBD from several distributors and had the products tested at a lab. The tests found that some of the products contained little or no cannabidiol, and some of them contained significant amounts of THC.

Funk shares federal regulators’ concerns about a lack of oversight into what’s contained in packages labeled as CBD. “You’re taking a risk,” he said. Companies that make prescription medications must regularly prove what’s in them. Companies that make supplements are much more loosely regulated.

An executive for a large national supplier of over-the-counter CBD products said his company’s offerings are legal because they’re made from hemp that is grown overseas and is legally imported. “They’re a botanical extract coming from a legal agricultural hemp plant,” said Josh Hendrix, director of business development for CV Sciences, which is based in California. CV Sciences products are sold in more than 1,500 health food stores nationally, including Campbell’s Nutrition in Des Moines and Fresh Thyme Farmers Market in West Des Moines.

Similar controversies are flaring up nationally. In Indiana, state authorities seized CBD oil from several stores last year, then paused amid controversy about the products’ legality. But Gov. Eric Holcomb said in late November that after 60 days, state police would resume seizing cannabidiol products that contained any of the THC chemical.

A national trade group, the Hemp Industries Association, filed a federal lawsuit last year to try block the Drug Enforcement Administration from enforcing a new rule against CBD products. The lawsuit contends the federal agency's rule violated a 2004 federal appeals court decision allowing sales of hemp products with small amounts of THC.

The CBD controversy comes amid a continuing disconnect between federal law, which still classifies marijuana products as strictly illegal, and many states' laws, which allow sales for medical or even recreational purposes. Under President Barack Obama, federal authorities generally did not interfere with residents who followed state marijuana regulations. However, supporters of medical marijuana have expressed concern that the Trump administration would shift direction.

Loeffler said she knows the subject is a legal gray area. She said she and other CBD supporters plan to ask Iowa legislators to make clear that products like the ones she sells are legal. "We want to be in line with the law," she said.