Carter Ledyard & Milburn LLP
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September 22, 2021 – A new type of cannabis product has been popping up at many convenience stores and gas stations. In an unfortunate bit of word-of-mouth marketing, these products, technically known as Delta-8 THC, have also become known as “weed light,” “diet weed,” and in some instances “CBD on crack,” due to the “high” they produce. This, in turn, has attracted the attention of state and federal regulators, including the FDA which recently warned about reported adverse effects in connection with these products.
These products are reportedly synthesized from “hemp,” the non-intoxicating form of marijuana, legalized by the 2018 Farm Bill. Two camps have emerged as to the legal status of Delta-8 THC, and other hemp isomers, that are similar to Delta-9 THC (the concentration of which determines whether a plant is considered hemp or marijuana for purposes of federal law).
Many in the industry argue that, just like CBD, Delta-8 THC is a hemp-derived substance and, as a result, is exempted from the definition of marijuana pursuant to the 2018 Farm Bill. Specifically, they argue that, because Delta-9 THC concentration in these products remains below 0.3% (the legal threshold that distinguishes marijuana from hemp), Delta-8 THC products derived from hemp don’t belong on Schedule I of the Controlled Substances Act (CSA). The DEA, which is charged with administering the CSA, maintains that the Delta-8 THC being sold today is no different from Delta-9 THC (or any of its synthetic analogues) and, therefore, belongs on Schedule I.
In part the DEA took this position with respect to Delta-8 THC because, while the substance occurs naturally in hemp, it does so in very small quantities. The Delta-8 THC products currently being sold on the market are far more potent and are generally made through a CBD conversion process. Last year, the DEA indicated in its Interim Final Rule (IFR) that it might consider such products to be “synthetically derived tetrahydrocannabinol,” which still belong on Schedule I of the CSA. It also listed Delta-8 THC in its “Orange Book” as an alternative name for “tetrahydrocannabinol” (e.g. THC), alongside Delta-9-THC.
While there are certainly arguments to be made that the DEA cannot override the will of Congress — as expressed in the 2018 Farm Bill — in many ways this is a form versus substance argument, since even proponents of Delta-8 THC readily concede it gives you the kind of kick CBD doesn’t (although perhaps not quite as much as Delta-9 THC). And while Congress may have enabled the CBD industry by legalizing hemp, the legislative history makes clear that the focus was on hemp as an agricultural commodity, and not as a backdoor way to legalize THC.
On that note, it is conceivable that the DEA may argue that Delta-8 THC being sold today is sufficiently similar to Delta-9 THC to constitute a “controlled substance analogue” within the meaning of the Federal Analogue Act. See 21 U.S.C. § 802(32)(A)(ii) (defining an analogue as substance that has “a stimulant, depressant, or hallucinogenic effect on the central nervous system that is substantially similar to . . . a controlled substance.”).
There seems to be broad agreement on the fact that Delta-8 THC is not just another hemp product among those states that have considered the question. As of August 2021, at least 18 states have restricted or banned Delta-8 THC in some way, including: Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Kentucky, Idaho, Iowa, Michigan, Mississippi, Montana, New York, North Dakota, Rhode Island, Utah, Vermont, and Washington. Some states, like North Dakota, have an outright ban on “the isomerization of cannabinoids to create isomers of [THC], including delta-8, delta-9, and delta-10” THC. This ban also extends to the sale of hemp products that contain such isomers.
New York’s proposed hemp rules are drafted similarly, with a recent amendment explicitly restricting the production and distribution of Delta-8 THC. These regulations prohibit hemp processors from “using synthetic cannabinoids, or [Delta-8 THC] or [Delta-10 THC] created through isomerization, in the extraction or manufacturing of any cannabinoid hemp products.” § 1005.7(a)(11). They also prohibit the sale or distribution of hemp products containing “synthetic cannabinoids, or cannabinoids created through isomerization” including Delta-8 and Delta-10 THC. § 1005.8(a)(11).
These rules were drafted by the Department of Health when it had regulatory authority over hemp regulation. That authority now falls under the Office Cannabis Management. It remains to be seen how that Office deals with Delta-8 THC as part of a comprehensive regulatory scheme for both cannabis and cannabinoid hemp.
It is certainly conceivable that New York will approach Delta-8 THC in the same way as regulators in Connecticut, Michigan, and Oregon have, by regulating Delta-8 THC under their existing marijuana laws, treating Delta-8 THC the same way they treat Delta-9 THC. Meanwhile, regulators in Vermont, Washington State, Colorado and Kentucky have issued guidance advising that Delta-8 THC remain illegal under current state laws, and legislative bans and regulatory clarifications are being considered in a number of other states, such as Alabama, Florida, and Oklahoma. It is possible New York will join those states in taking a hard line against Delta-8 THC and other isomers.
That is not to say, however, that industry participants are not fighting back. On the federal level, a hemp trade association and a South Carolina-based hemp company have commenced two related actions against the DEA relating to its IFR. In the first action, Hemp Industries Association v. United States DEA (D.C. Cir. Sept. 18, 2020), the petitioners seek to invalidate the IFR on procedural grounds, in addition to arguing that the DEA has exceeded its authority and acted arbitrarily and capriciously in adopting the regulation.
That action was put on hold when the second action, Hemp Industries Association v. United States DEA (D.D.C. Oct. 12, 2020), was filed, seeking a declaratory judgment and injunctive relief prohibiting the DEA from enforcing the CSA against intermediate hemp material (IHM) and waste hemp material (WHM) created during the hemp production process. The case was dismissed for lack of subject matter jurisdiction on May 3, 2021. See Hemp Indus. Ass’n v. U.S.D.E.A. (D.D.C. May 3, 2021).
On the state level, a Kentucky hemp trade organization, a Kentucky Delta-8 THC retailer and a Kentucky hemp farming and production company have commenced litigation against the state of Kentucky following a series of police raids targeting Delta-8 THC products. Kentucky Hemp Association v. Quarles (Boone Cir. Ct. July 13, 2021).
The raids followed guidance issued in April of this year by the Kentucky Department of Agriculture, which advised that “Delta-8 THC is a Schedule I controlled substance under federal law and Kentucky law; that distributing products containing this substance is illegal; and distributing such products could lead to your expulsion from the Hemp Licensing Program as well as potential exposure to criminal prosecution.” The plaintiffs in this case ask the court to stop police from using the Department of Agriculture’s April 2021 guidance to target hemp products containing Delta-8 THC, arguing that Delta-8 THC is a legal derivative of hemp under the applicable state and federal legislation regulating hemp production.
While the approaches to regulating Delta-8 THC may vary, there appears to be growing consensus among legislators and regulators that Delta-8 THC is not simply another hemp derivative that can be adequately dealt with through existing hemp regulations. For that reason, in practice, the legal status of Delta-8 THC may be tied to overall legalization of cannabis and Delta-9 THC.
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