Minnesota now has full-time inspector for THC edibles

Driving the news: The Minnesota Department of Health in August reassigned one of its two medical cannabis inspectors to focus full-time on the hemp-derived THC industry.

• An estimated 90% of the 60 businesses that person has visited so far were non-compliant on at least one aspect of the law, Office of Medical Cannabis director Chris Tholkes told Axios during a panel discussion last week hosted by the law firm Winthrop & Weinstine last week.

What they're saying. While some violations were "really egregious," many cases involved sellers who said they were unaware of current rules surrounding labeling, serving sizes, potency limits, and product display, Tholkes said.

• "A lot of times the shop folks are assuming that ... if the wholesaler is providing it to them, it must be okay. And that's not always the case."

Reality check: As of mid-last week, More than 1,500 businesses had registered to sell or make low-dose edibles, a count Tholkes said "feels low" given the range of stores offering the popular products. The figure grew to over 2,000 as of Friday.

• That means one inspector doing dozens of enforcement checks is barely scratching the surface.

What we're watching: Tholkes said the agency for now is focused on education, providing background sheets and correction orders asking sellers to address issues within 30 days.

• But state and local officials will have a range of tools to "take prompt action" against repeat offenders, DFL Rep. Zack Stephenson, a sponsor of the state's legal cannabis legislation, said during the panel.
• That includes the ability to strip retailers of their liquor or tobacco licenses, or asking a court to shut down a non-compliant business.

What we're hearing: Dave Ladd, president of the Minnesota Industrial Hemp Association, told Axios that members welcome efforts to ensure products are safe and sold properly, as long as the law is enforced on a "level playing field."

• He wasn't surprised by the high rate of issues in the inspector's sample given widespread confusion about the rules, but said members are trying in good faith to navigate "this new regulatory landscape."

Between the lines: Just last month, a hemp business owner tapped to lead the state's new Office of Cannabis Management resigned one day after her job was announced amid scrutiny of her company's products.

• The short-lived appointee, Erin DuPree, has said she never knowingly sold illegal products and that a compliance team ensured her sales were allowed under the law.

Of note: The state Board of Pharmacy, which oversaw the hemp-derived edibles for the first year they were legal, did assign a pharmacy surveyor to investigate complaints related to THC products part-time. But that staffer didn't have the authority to conduct proactive inspections under the 2022 law, the board's executive director told Axios.

What's next: Tholkes said the division is in the process of hiring more enforcement staff as it stands up a full unit dedicated to hemp-derived sales.

• Eventually, licensing and regulation of the low-dose edibles will be transferred to the Office of Cannabis Management.