A bill aimed at barring the sale of hemp-derived cannabinoids cleared the first round of consideration April 28 after a successful cloture vote.

LB 316, introduced by Omaha Sen. Kathleen Kauth, would prohibit the sale of hemp products containing more than 0.3% of any strain of THC and classify hemp products above that limit as marijuana.

A Judiciary Committee amendment, adopted 33-7, would create a 10% excise tax on the retail sale price of cannabidiol products beginning Jan. 1, with revenue going to the Property Tax Credit Cash Fund.

Also, the committee amendment would enact a consumer “safe harbor” period and prevent prosecution for possessing illegal hemp until Dec. 31, to allow consumers to dispose of products legally. The state attorney general could collaborate with law enforcement agencies to provide locations where consumers may drop off illegal hemp for destruction during the safe harbor period.

Kauth said lawmakers created a loophole that allowed the sale of other cannabinoids, such as Delta 8, when they legalized hemp in 2019 and permitted the sale of hemp products containing up to 0.3% Delta-9 THC.

She said hemp-derived packaging often is misleading and the products may cause adverse health effects, sometimes necessitating hospitalization.

“These compounds are masquerading as hemp but are, in fact, dangerous synthetic chemicals that have never been tested for consumption in humans,” Kauth said. “These products are being sold that do not accurately disclose what is in the contents. In many cases, the THC concentrations are high enough to send vulnerable adults and children to the hospital.”

David City Sen. Jared Storm supported the bill, saying several other states — including neighboring Colorado and Iowa — have banned Delta 8 and similar products.

While it may be appealing to regulate and tax such products to generate additional state revenue, Storm said the risk to consumers is too significant.

“I’ll never put the health and safety of our citizens, especially children and young adults, (at risk) for revenue,” Storm said.

Lincoln Sen. Carolyn Bosn also supported LB 316. She said at least one illegal product was found at each of the 300 stores recently inspected by the Nebraska Attorney General’s Office. In addition, she said, it would be “nearly impossible” to regulate Delta 8 and other synthetic CBD products because they can be modified and manipulated easily.

“You’re playing whack-a-mole with trying to regulate this drug,” Bosn said.

Sen. Brian Hardin of Gering spoke in favor of the measure, saying LB 316 would ensure products sold to consumers are safe, within legal THC limits and properly labeled.

“This legislation is about certainty; it’s about safety,” he said.

Omaha Sen. John Cavanaugh opposed the bill and introduced several unsuccessful procedural motions to extend debate on the measure. Cavanaugh also filed an amendment, which was not considered, that would replace the bill with provisions of his LB 16 and establish a regulatory framework for selling CBD products.

He said creating strong legal oversight would ensure businesses are properly licensed, check IDs, comply with FDA and other agency regulations and adhere to advertising requirements.

“I think that is the better approach because I do think that adults should be able to make a decision for themselves about whether they consume these things, and that the role of the government is not to tell people ‘No, you can’t do that,”’ Cavanaugh said. “It’s to provide them a framework where things they are buying at stores are safe.”

Lincoln Sen. Danielle Conrad also opposed the bill and supported Cavanaugh’s amendment, saying lawmakers should create regulations for Delta 8 similar to those the Legislature recently passed for kratom products.

Conrad also said the passage of LB 316 would result in “steep criminal penalties” for many Nebraska businesses and consumers.

Sen. Jane Raybould of Lincoln also opposed the measure. She said banning Delta 8 products would result in the loss of jobs and millions of dollars in revenue.

For example, Raybould said, out of 355 THC stores in Nebraska, a single retailer with 22 locations paid nearly $1.5 million in sales tax last year alone.

“I think we can all work together to come up with solutions that will not compromise Nebraska’s economic viability on this matter and the job creator that (the industry) is,” she said.

Plymouth Sen. Tom Brandt said he would support advancing LB 316, provided the bill is amended during the second round of debate to guarantee that Nebraskans who have legally purchased hemp-derived products will not face prosecution for possessing them.

Following eight hours of discussion, Kauth filed a motion to invoke cloture, which ceases debate and forces a vote on the bill and any underlying amendments and motions.

The cloture motion succeeded on a 33-11 vote, the minimum number required. Senators then advanced LB 316 to select file 33-13.

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