Police in Allen, Texas, secured up evidence and marched out business owners in handcuffs for selling what attorneys for the vape shops say are legal products. In a coordinated raid, police invaded nine locations simultaneously.
Allen police chief Steve Dye told media that the stores involved, more than a third of the vape shops within Allen city limits, were all caught marketing and selling products with illegal levels of THC. The THC compound can be derived from marijuana and hemp (both members of the cannabis family).
“We did multiple rounds of undercover operations, including sending minors in, and many of them were able to buy the THC underage. And then we started testing those products and we found that the vast majority of those products were well over the .3 percent,” he said.
Early Wednesday morning, an attorney representing some of the vape shops in a federal lawsuit against the DEA called the raids “legally questionable.”
“These local, family-owned businesses are operating legally. The Allen, Texas Police Department and the DEA overstepped their authority by destroying products, taking point-of-sale systems and records, and confiscating personal computers belonging to employees,” said David Sergi of San Marcos-based Sergi & Associates.
Pictures provided by the U.S. Drug Enforcement Administration, which assisted with the raid, show a bag of chips labeled “Doweedos”, cookies labeled “Trips Ahoy” and candy labeled “Medicated Skittles.”
“We’ve seen percentages of THC in the high teens, upwards of 60, 65 percent. That is almost toxic levels of THC when you think about it. And is that what somebody is expecting to get?” asked DEA Special Agent In Charge Eduardo Chavez.
The raids left owners and employees “traumatized,” according to Sergi, who also represents the Allen Hemp Coalition as well as eight of the nine shop owners. “We think it’s absolutely horrendous,” he told a media oulet.
Sergi said that when police sent a letter to businesses in May raising concerns, the stores voluntarily removed the products mentioned from their shelves. This time, he said, police chose a different approach.
“Rather than getting guidance and partnership from the Allen Police Department, we have gotten arrested, we have had clients whose stores have been destroyed, we have employees whose computers have been taken,” he said.
Sergi said that while there’s no law against selling hemp products to minors, many shops voluntarily choose not to.
When asked about the attorney’s comments, a spokesperson for Allen police said the department tried working with store owners, offering to provide advice about which products might pose a problem. Not all, he said, took them up on it.
A bipartisan group of 20 state attorneys general are imploring Congress to take action to address a looming public health “crisis” due to the burgeoning multibillion-dollar market for intoxicating hemp products.
Congress legalized hemp under the 2018 farm bill, touting it as a boon for struggling farmers. However, the market has become increasingly dominated by what some call “intoxicating products” that are largely unregulated and often sold at gas stations and convenience stores.
“The reality is that this law has unleashed on our states a flood of products that are nothing less than a more potent form of cannabis, often in candy form that is made attractive to youth and children — with staggering levels of potency, no regulation, no oversight, and a limited capability for our offices to rein them in,” reads the letter, shared exclusively with POLITICO, which was sent to the chairs and ranking members of the House and Senate agriculture committees.
Indiana Attorney General Todd Rokita and Arkansas Attorney General Tim Griffin, both Republicans, led the letter. But it also includes many notable Democrats, including California Attorney General Rob Bonta and Colorado Attorney General Philip Weiser.
The attorneys general are calling on federal lawmakers to address the issue in the next farm bill, which has been repeatedly pushed back potentially to 2025. They want Congress to alter the definition of hemp under federal law—currently cannabis with no more than 0.3 percent Delta-9 THC—although they don’t provide any specific recommendations for how it should be changed. In addition, they want federal lawmakers to clarify that states have the authority to regulate and restrict hemp and other cannabinoids.
Attorney General William Tong today filed seven new enforcement actions against wholesalers and retailers engaging in the distribution and sale of potent, illicit cannabis products in Connecticut.
Wholesalers include Shark Wholesale Corp. in Bridgeport, Star Enterprise 74, LLC, in New Britain, and RZ Smoke, Inc., in Suffield. The four retailers are Greenleaf Farms in New London, Smoker’s Corner in Norwich, Anesthesia Convenience & Smoke in New Haven, and Planet Zaza in East Haven.
In each instance, the Office of the Attorney General is alleging violations of the Connecticut Unfair Trade Practices Act, which carries fines of up to $5,000 per violation, according to press release.
“Cannabis is legal for adults in Connecticut, but it’s not a free-for-all—retailers must be licensed and legal cannabis products must comply with strict safety standards. Today, we are suing seven businesses—three wholesalers and four retailers– who have sold potent, high-THC cannabis products in violation of Connecticut laws,” said Tong. “None of these products have been subject to Connecticut’s rigorous testing standards or contain appropriate warnings.
Connecticut Attorney General William Tong
“Some are sold in dangerous and misleading packaging designed to appeal to children. These products are designed to deceive consumers into believing they are safe, tested, and regulated—that is false. We have multiple active investigations into additional retailers and wholesalers, and we will keep the heat on so long as these dangerous, illegal products are sold.”
Residents over age 21 can legally possess and consume cannabis in Connecticut. Cannabis products may only be sold in the regulated market and must meet rigorous testing and packaging requirements. Cannabis products sold outside of the regulated market continue to be illegal and may subject sellers to civil and criminal penalties.
Despite that, the sale of illegal delta-8 and delta-9 cannabis products and other high-THC cannabis products continues in Connecticut, according to Tong.
In unannounced visits to vape shops and gas stations, investigators from the Office of the Attorney General and the Department of Consumer Protection continue to routinely find illegal cannabis products for sale, including blunts, marijuana flower, and edibles mimicking popular youth-oriented snack foods, including Fritos, Skittles, Airheads, and more.
Illegal look-alike cannabis products pose a unique health threat to children, who may unknowingly ingest high doses of potent psychoactive chemicals. In the regulated adult-use market, edible cannabis products may only be sold in containers that contain a maximum of 100 milligrams of total THC and 5 milligrams of total THC per serving size. Children who accidentally eat an entire snack-sized bag of “chips” or “candy” may be exposed to more than 100 times the maximum adult serving.
Since 2021, the Connecticut Poison Control Center has received 400 calls regarding cannabis exposure in children, including 181 children under the age of 6 exposed to cannabis edibles. The majority of those cases required treatment at a health care facility.
Greenleaf Farms New London
Greenleaf Farms is a CBD retailer in New London with no license to sell cannabis products in Connecticut. Despite that, investigators from both the Department of Consumer Protection and Office of the Attorney General on multiple visits discovered numerous illegal high-THC products for sale, including potent edibles designed to look like children’s cereal. Greenleaf Farms also offered for sale marijuana “blunts,” which were offered in various THC concentrations.
The products lacked a variety of required warning statements and labels, and do not appear to be produced by licensed facilities or tested in accordance with state law.
Further, Greenleaf Farms represented itself as a licensed dispensary in the sign shared below despite lacking such a license.
Smoker’s Corner
Smoker’s Corner is a smoke shop in Norwich with no license to sell cannabis products in Connecticut. During multiple visits, an investigator from the Office of the Attorney General observed illegal high-THC edibles for sale. Further, after the investigator asked if there was any “pot” available for purchase, a Smoker’s Corner employee retrieved a mason jar full of marijuana flower from a back room. The employee then weighed the marijuana on a scale, bagged it, and sold it to the Office of the Attorney General’s investigator. The cannabis products lacked required warnings and labels, did not appear to be produced by licensed facilities or tested in accordance with state law, according to Tong.
Anesthesia Convenience & Smoke
Anesthesia Convenience & Smoke is a smoke shop in New Haven that is not licensed to sell cannabis in Connecticut. On multiple unannounced visits, investigators from the Department of Consumer Protection and Office of the Attorney General observed thousands of high-THC products, including those more potent than any product available in the regulated cannabis market. Products included potent edibles, as well as marijuana flower. The cannabis products lacked required warnings and labels, did not appear to be produced by licensed facilities or tested in accordance with state law, according to Tong.
Planet Zaza
Planet Zaza is a smoke shop located in East Haven with no license to sell cannabis in Connecticut. Investigators with the Department of Consumer Protection and Office of the Attorney General inspected the store on multiple dates, finding numerous high-THC cannabis edibles for sale more potent than any authorized for sale in Connecticut.
Further, investigators discovered unauthorized labels, including fake prescription labels falsely indicating that the store is a licensed dispensary and that the illegal products were medical-use cannabis. The products did not appear to be produced in a licensed facility or tested in accordance with state law, according to Tong.
Wholesalers: RZ Smoke, Star Enterprise, and Shark Wholesale
Star Enterprise is a New Britain-based smoke and vape wholesale business. Shark Wholesale is based in Bridgeport. RZ Smoke is a New York-based smoke and vape wholesale business with a warehouse in Suffield. These wholesalers each supply illicit cannabis products to retailers throughout Connecticut. All three provide products packaged in a manner that deceives consumers into reasonably believing they are purchasing cannabis products from Connecticut’s legal, regulated market. In fact, each wholesaler offered highly potent products far in excess of allowable serving sizes and THC levels.
Star’s products contained THC levels 35-times the maximum permissible in Connecticut’s regulated cannabis market, as well as serving sizes at least five times the maximum allowed. Further, the packages were labeled in such a way as to appeal to youth, including brand names and packaging identical or similar to non-cannabis snacks. Shark’s products contained THC levels 15-times the maximum limit, and serving sizes six times the maximum legal serving size. RZ Smoke’s products contained THC levels 10-times the maximum allowed, with serving sizes five times over the legal limit. Their products were also designed to mimic existing names and packaging of non-cannabis snacks, according to Tong.
Ongoing Cannabis Enforcement Actions
“Today’s filings follow a series of enforcement and educational actions taken by Attorney General Tong to combat the sale of illegal cannabis in Connecticut, including high-THC delta-8 and delta-9 edibles. Last year, Attorney General Tong sent warning letters to all Connecticut licensed retailers of electronic vaping products advising them that sale of delta-8 THC by unlicensed retailers may be illegal,” the release states.
The Office of the Attorney General now has 10 pending enforcement actions, and has secured judgments against four additional Connecticut retailers totaling $40,000 for alleged violations of the Connecticut Unfair Trade Practices Act over the sale of illegal delta-8 THC products.
A portion of the payments will be suspended if the retailers comply with terms of the judgment, including ceasing all sales of illegal cannabis. Additional investigations are active and ongoing. Last week, Tong issued a cease and desist letter to HighBazaar organizers that its unlicensed cannabis marketplace appears to violate multiple state statutes. An additional letter was sent to the Masonic Temple Day Spring Lodge in Hamden, which currently hosts the market, according to Tong.
By Jean Gonnell, Christina Sava and Nicholas Ramos (Troutman Pepper Hamilton Sanders Tobacco and Cannabis Team)
Across the United States hemp products seem to be everywhere. From corner stores to spas, one can find a hemp- or CBD-infused version of almost anything. Hemp and its derivatives are found in foods, cosmetics, hand-rolled cigarettes and vape pens. A new category of “intoxicating hemp products,” such as delta-8 THC products, have taken the hemp industry by storm. Although the market is vast, the regulatory landscape contains many pitfalls. Potential market entrants must carefully research the applicable laws, and take into account any federal-level risks, before deciding to invest in a hemp or hemp-derived products venture. This article reviews the legal status of hemp-derived products, including smokable hemp products, at the state and federal levels.
Marijuana and Hemp
Marijuana and hemp come from the same plant: Cannabis sativa L., or “cannabis” for short. Cannabis has a long history of industrial and medicinal uses, and only a short history of prohibition, which we now see unraveling. “Hemp” is the common term for cannabis with a concentration of delta-9 tetrahydrocannabinol (“THC”) of .3% and under, while “marijuana” is used to mean cannabis with a delta-9 THC concentration over .3%. Marijuana remains a Schedule I substance under the Controlled Substances Act (“CSA”). Hemp production, on the other hand, was legalized by the Agricultural Improvement Act of 2018, or 2018 Farm Bill. At that time, Congress removed “hemp” and “tetrahydrocannabinols in hemp” from the CSA’s definition of “marijuana.” Specifically, the 2018 Farm Bill defined “hemp” as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis.” 7 U.S.C. § 1639o.
So, although they are technically the same plant, hemp and marijuana fall under completely different regulatory regimes, with a single cannabinoid – delta-9 THC – determining whether a cannabis plant or product is hemp or marijuana.
THC, CBD, and Other Cannabinoids
There are over 100 cannabinoids found in cannabis. Perhaps the most well-known of these are cannabidiol, or CBD, and delta-9 THC. CBD is considered non-psychoactive and generally prized for its therapeutic potential. Delta-9 THC has long been recognized as the cannabinoid that causes users to feel “high.” Since the 2018 Farm Bill, however, other psychoactive THCs, such as delta-8 and delta-10 THC, have been identified in cannabis. The “high” produced by delta-8 THC has been described as partway between THC and CBD, with relaxing body effects and a less-potent “head-high,” while delta-10 has been described as producing a more cerebral high akin to sativa strains of marijuana.
So why the boom in delta-8 and delta-10 THC products now? They can be derived from hemp. Although found in much lower quantities in hemp than other cannabinoids, manufacturers have found ways to chemically convert hemp-derived CBD into delta-8 and delta-10 THC. Even delta-9 THC is being converted from CBD, and manufacturers are adjusting product ratios to remain within the .3% limit. The Cannabis Regulators Association has called this the “0.3% loophole” and stated: “While the threshold of 0.3% delta-9 THC (tetrahydrocannabinol) by weight is a small amount of THC in a hemp plant, when applied to hemp-derived products (e.g., chocolate bars, beverages, etc.) which can weigh significantly more, 0.3% by weight can amount to hundreds of milligrams of THC. For example, a 50-gram chocolate bar at 0.3% THC would have around 150 mg of THC (30 times the standard 5 mg THC dose established by the National Institute on Drug Abuse).”[1]
The Drug Enforcement Administration (DEA) more or less gave the hemp-derived delta-8 industry a green light in a September 2021 letter to the Alabama Board of Pharmacy. The Board of Pharmacy inquired as to the control status of delta-8 THC under the CSA. DEA concluded that “cannabinoids extracted from the cannabis plant that have a [delta-9]-THC concentration of not more than 0.3 percent meet the definition of ‘hemp’ and thus are not controlled under the CSA.” Thus, so long as delta-8, delta-10, and other extracts are derived from a cannabis plant with less than 0.3% delta-9 THC, they constitute “hemp,” which is federally legal.
Notably, “synthetic tetrahydrocannabinols” remain a schedule I substance under the CSA. Some argue that because delta-8 and delta-10 are produced through a form of synthesis, they are Schedule I “synthetic tetrahydrocannabinols.” Regardless of this argument’s merit, this is not the position DEA has taken thus far, and we do not see any indication that they will suddenly take this position in the near future.
FDA Enforcement and the Future of CBD Regulation
Nonetheless, hemp-derived CBD and THC products are still not legal to be sold as a drug, dietary supplement, or food, according to the Food and Drug Administration (FDA). To the extent a manufacturer markets its delta-8 (or CBD) products as intended to affect the structure or any function of a consumer’s body, FDA’s position is that the product is an unapproved drug. In addition, “food” (almost anything edible that is not an approved drug or lawful dietary supplement) may not contain unapproved additives. Any form of CBD and THC are not approved food additives.
FDA has also concluded that THC and CBD products cannot be marketed as dietary supplements, because the definition of “dietary supplement” excludes active ingredients that have been approved as drugs or have been authorized for investigation as a new drug. THC and CBD are both active ingredients in at least one FDA-approved drug. Other parts of the hemp plant that do not contain THC or CBD might be available for use as dietary supplements, so long as manufacturers abide by related requirements, including notifying FDA.
And, FDA is watching the marketplace closely and taking enforcement action where it sees fit. FDA has issued numerous warning letters to companies selling hemp-derived CBD and THC products with impermissible health or therapeutic claims; for misbranding, such as lacking adequate directions for use; and for using these cannabinoids as an unapproved additive in foods, such as gummies, chocolate, caramels, chewing gum, and peanut brittle. The agency has also published a general health warning for delta-8 products.
Industry and regulators alike have been anticipating some kind of regulatory action by FDA, but it appears this is yet far off. In January of this year, FDA determined that it does not have the appropriate regulatory pathway to regulate CBD products and called on Congress to pass legislation creating a new pathway separate from the food, drug, or dietary supplement pathway. Despite this regulatory uncertainty, sales of CBD products in the U.S. continue and could reach as high as $20 billion by 2025.
States and Hemp-Derived Products
Given the lack of federal standards and delta-8 and delta-10 (and likely other THCs’) psychoactive effects, state lawmakers are taking action to regulate products containing these extracts. At least 22 states have restricted or banned the sale of delta-8 THC products, while others are in the process of reviewing the cannabinoid’s status. One common way states are doing this is by limiting the total concentration of THC a product can have, rather than mirroring federal law and limiting only delta-9 THC concentrations. In Colorado, lawmakers have passed SB23-271, which goes further and actually classifies nonintoxicating cannabinoids, potentially intoxicating cannabinoids, and intoxicating cannabinoids. Products will be regulated according to which category of cannabinoids they contain.
In many states, a “ban” actually means that these products will only be available in licensed cannabis dispensaries where regulators can more easily track their production and sale, ensure that the products pass required contaminant testing, and prevent the products from being sold to minors. Retailers and manufacturers of hemp derived products, especially those wanting to sell nation-wide, must be diligent in tracking state by state restrictions on hemp-derived products.
Smokable Hemp
Smokable hemp, although it receives less attention than other forms of hemp products, is a major driver of hemp product sales. Smokable hemp is hemp flowers after they have been manicured and dried. Smokable hemp can be sold as “buds” or in pre-rolled hemp cigarettes. This hemp looks and smells a lot like traditional marijuana but is not psychoactive. While some users may feel a mild mellowing effect, most do not feel “high” after smoking hemp. This may be why smokable hemp is the only hemp product category that has experienced wholesale price increases over time.
The legal status of smokable hemp, however, also varies from state to state. Smokable hemp is illegal for sale in a handful of states, including Idaho, Iowa, Kentucky and Massachusetts. Other states do not place any restriction on its sales.
New York has banned hemp flower products that are “clearly labeled or advertised for the purpose of smoking or in the form of a cigarette, cigar or pre-roll.” California does not currently permit the sale of any “inhalable hemp” products, however labeled, having passed a law that prohibits the sale of such products until a tax on the products has been enacted. No such tax is yet in effect.
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Given the above, it is not safe to assume that your hemp product is legal for sale because hemp is federally legally. It is important for retailers and manufacturers to be aware of the laws that apply to the types of hemp products they are selling. Although the DEA has been hands-off since the passage of the 2018 Farm Bill, FDA oversees all foods, drugs, and dietary supplements in the U.S. and maintains that THC and CBD, even though hemp derived, may not be added to foods and dietary supplements, or marketed as drugs. FDA does not oversee inhalable substances generally, and thus has not released statements related to the legality of smokable hemp. Smokable hemp may be a good market entry point, especially for manufacturers and retailers already familiar with highly-regulated inhalable products.
Troutman Pepper’s Cannabis Practice provides advice on issues related to applicable state law. Cannabis remains an illegal controlled substance under federal law. Its attorneys are available to provide more information about these opportunities.
The U.S. state of Virginia recently enacted a law to curb kid-friendly packaging in cannabis products. That law is having hard effects on some local businesses.
Lawmakers have witnessed Delta-8 products sold in packaging that mimic foods that are enticing to kids, but those in the hemp industry say this new crackdown goes too far.
“Were one of hundreds that’s made the hard decision to just shut it down,” Reed Anderson said.
Anderson says he’s shutting down his Goochland hemp business, Kame Naturals, in the wake of a new state law cracking down on THC products like Delta-8.
It limits all hemp products to only two milligrams of THC per package. That’s far lower than most products in many smoke and vape shops. Hemp products must now have at least a 25-to-1 ratio of CBD to THC, according to media reports.
“25-to-1 ratio doesn’t do what we do justice right,” Anderson said. “We started our business as a solventless extraction company, and that over time kind of had to go to the wayside because of the different regulations coming through.”
Breaking the rules could mean fines of up to $10,000.
Anderson said it’s all too much and says lawmakers paid too much attention to the intoxicating effects of THC and very little to the health benefits THC may provide.
“Once you start getting into remediated product and trying to remediate THC out of a product, you lose a lot of the natural quality CBD products offer,” Anderson said.
However, Governor Glenn Youngkin and the law’s supporters said something needed to be done to stop the sale of Delta-8 products. Too many kids were getting sick.
A statement from Gov. Youngkin’s office said in part:
“SB 903 and HB 2294 took critical steps to strengthen consumer safety and regulations around edible and inhaled hemp-derived products as well as delta-8 THC products. Specifically, the amendment continued its efforts to crack down on dangerous THC intoxicants, including synthetic THC products. In addition to the ban on synthetic THC, the limited percentage of total THC allowed in hemp products, the packaging and labeling restrictions, the testing requirements, and the total per package limit for THC, the substitute also requires retailers to register with the Virginia Department of Agriculture and Consumer Services (VDACS) to sell any edible or inhaled hemp-derived product. Additionally, the General Assembly established the registration requirement and fees as a necessary operating cost and to create a database of all regulated hemp product retail stores.”
Anderson said while he’s no longer in the hemp business, he will become an advocate and plan to talk with politicians as often as he can to get these laws reformed.
In what could have national implications, a federal appeals court has ruled that Delta-8 THC derived from hemp is “lawful” and eligible for trademark protection.
The 9th Circuit Court of Appeals said in its ruling Thursday that because Congress legalized not just hemp but its “derivatives” and “extracts” in the 2018 Farm Bill, delta-8 THC is legal if it is derived from a hemp extract – in this case, CBD.
The ruling gives delta-8 vape maker AK Futures another opportunity to block fellow California company Boyd Street Distro from allegedly selling counterfeit versions of AK Futures’ “Cake” vapes containing delta-8 THC, according to MJ Biz Daily.
The three-judge appeals panel sided with AK Futures and said that delta-8 THC is not a controlled substance under federal law if it comes from hemp.
“Regardless of the wisdom of legalizing delta-8 THC products, this court will not substitute its own policy judgment for that of Congress,” Judge D. Michael Fisher wrote.
However, the ruling does not address the legality of selling consumable delta-8 THC products.
Though Congress legalized hemp derivatives such as delta-8 THC, it also directed the U.S. Food and Drug Administration to oversee how those products could be sold.
So far, the FDA has declined to authorize any cannabinoid products without a prescription, and the agency issued a consumer alert last September warning saying that delta-8 THC “may have potentially harmful by-products (contaminants) due to the chemicals used in the process.”
The U.S. Food and Drug Administration today issued warning letters to five companies for selling products labeled as containing delta-8 tetrahydrocannabinol (THC). The regulatory agency claims that the companies violated the Federal Food, Drug, and Cosmetic (FD&C) Act. It’s the first time the FDA has issued warning letters for products containing delta-8 THC.
“Delta-8 THC has psychoactive and intoxicating effects and may be dangerous to consumers. The FDA has received reports of adverse events experienced by patients who have consumed these products,” the agency stated in a release. “There are no FDA-approved drugs containing delta-8 THC. Any delta-8 THC product claiming to diagnose, cure, mitigate, treat, or prevent diseases is considered an unapproved new drug.”
The states that it has not evaluated whether “these unapproved drug products” are effective for the uses manufacturers claim, what an appropriate dose might be, how they could interact with FDA-approved drugs or other products, or whether they have dangerous side effects or other safety concerns, according to the statement.
“Delta-8 THC is one of over 100 cannabinoids produced in the Cannabis sativa L. plant but is not found naturally in significant amounts. Concentrated amounts of delta-8 THC are typically manufactured from hemp-derived cannabidiol (CBD) and have psychoactive and intoxicating effects,” the release states. “Products containing delta-8-THC are available in varying forms, including but not limited to candy, cookies, breakfast cereal, chocolate, gummies, vape cartridges (carts), dabs, shatter, smokable hemp sprayed with delta-8-THC extract, distillate, tinctures, and infused beverages.”
The warning letters address the illegal marketing of unapproved delta-8 THC products by companies as unapproved treatments for various medical conditions or for other therapeutic uses. The letters also cite violations related to drug misbranding (e.g., the products lack adequate directions for use) and the addition of delta-8 THC in foods, such as gummies, chocolate, caramels, chewing gum and peanut brittle.
“The FDA is very concerned about the growing popularity of delta-8 THC products being sold online and in stores nationwide. These products often include claims that they treat or alleviate the side effects related to a wide variety of diseases or medical disorders, such as cancer, multiple sclerosis, chronic pain, nausea and anxiety,” said FDA Principal Deputy Commissioner Janet Woodcock. “It is extremely troubling that some of the food products are packaged and labeled in ways that may appeal to children. We will continue to safeguard Americans’ health and safety by monitoring the marketplace and taking action when companies illegally sell products that pose a risk to public health.”
The FDA recently published a consumer update expressing concerns about the potential health effects of delta-8 THC products. The FDA has received adverse event reports involving products containing delta-8 THC from consumers, healthcare practitioners and law enforcement, some of which resulted in the need for hospitalization or emergency room treatment, according to the agency.
The FDA states that it is also aware of an increasing number of exposure cases involving products containing delta-8 THC received by national poison control centers and alerts issued by state poison control centers describing safety concerns and adverse events with products containing delta-8 THC.
In addition to the violations related to FDA-regulated products containing delta-8 THC, several of the warning letters outline additional violations of the FD&C Act, including marketing CBD products claiming to treat medical conditions in humans and animals, promoting CBD products as dietary supplements, and adding CBD to human and animal foods.
“CBD and delta-8 THC are unapproved food additives for use in any human or animal food product, as the FDA is not aware of any basis to conclude that the substances are generally recognized as safe (GRAS) or otherwise exempt from food additive requirements,” the release states. “One of the letters expresses concerns regarding CBD products marketed for food-producing animals, and the potential safety concerns related to human food products (e.g., meat, milk, eggs) from animals that consume CBD, as there is a lack of data on safe CBD residue levels.”
The FDA issued warning letters to:
ATLRx Inc.
BioMD Plus LLC
Delta 8 Hemp
Kingdom Harvest LLC
M Six Labs Inc.
The FDA has previously sent warning letters to other companies illegally selling unapproved CBD products that claimed to diagnose, cure, mitigate, treat or prevent various diseases, in violation of the FD&C Act. In some cases, there were further violations because CBD was added to food products. The FDA has not approved any CBD products other than one prescription human drug product to treat rare, severe forms of epilepsy, according to the agency.
The FDA has requested written responses from the companies within 15 working days stating how they will address these violations and prevent their recurrence. Failure to promptly address the violations may result in legal action, including product seizure and/or injunction.
Texas recently released an updated guideline making Delta-8 THC products illegal in the state. Delta-8 THC products now are listed as a Schedule I controlled substances, and state health officials noted that the products have been banned for months now.
Credit: Promesaartstudio
The move prompted several Texas CBD and vape shops owners to file for temporary restraining orders regarding the announcement. Those who filed the temporary restraining orders prayed it to be granted against the state. According to The Dallas Morning News, Ashley Flood, the owner of a CBD American Shaman franchise, said that she and other owners and consumers were not informed of the move to update the state’s website regarding the use and selling of marijuana-related products.
The Dallas Morning News quoted Flood saying, “We didn’t find out from the state, we didn’t find out from law enforcement, we didn’t find out via letter, email — nothing. We found out from one of our suppliers.” Flood added that she purchased $20,000 word of Delta-8 products for her store, accounting for 50 to 60 percent of her profit. If they are illegal, her business will be badly hit.
What is interesting about the DSHS’ statement regarding Delta-8 is that it follows a popular trend among states regarding Delta-8: state agency prohibition against certain cannabinoids that appear damning, despite the fact they might not carry the force of law, according to renowned cannabis attorney Rod Kight.
“Other states across the country, including Iowa, Kentucky, Massachusetts, North Carolina, South Carolina, and Vermont, to name a few, have, through various agencies, enacted similar prohibitions. However, while other states across the country are attempting to chill the fervor of Delta-8 via agency or administrative actions, what makes Texas’ prohibition unique is that it appears to be the result of deliberate action taken over a period of time to amend Texas’ list of controlled substances to be different than the federal list of controlled substances,” Kight said. “Importantly, this agency amendment followed the Texas legislature’s inability to pass a bill that would have banned Delta-8 THC during its most recent legislative session.”
The Dallas Morning News said that the 2018 Farm Bill might be the one confusing sellers and consumers regarding Delta-8 products. The bill legalized Delta-8 products at the federal level, but it allows individual states to develop more stringent laws regarding the selling and consumption of such.
Further, many believe the Delta-8 products remain legal because, under the law that Gov. Greg Abbott signed in 2019, hemp products with less than 0.3 percent tetrahydrocannabinol are legal.
International cannabis attorney Rod Kight discusses minor cannabinoids and the growing cannabis market.
By Timothy S. Donahue
The questions kept coming. When Vapor Voice published an article on Delta-8 THC and other minor THC products in its last issue (see “High Expectations,” Vapor Voice, issue 3, 2021), it seems readers had more questions concerning newly marketed cannabinoids than the story answered. To gain more insight into the state of the current overall global cannabis market, we went to one of the best resources in the business.
In the cannabis industry, there may be no attorney more renowned than Rod Kight. While his firm is based in Asheville, North Carolina, USA, Kight currently spends much of his time in Mexico. His experiences with marijuana started when he used it during chemotherapy treatments in 2011. It had such a positive impact on his recovery that he decided he was going to focus on cannabis law. He wanted others to have the access that offered him such a profound experience.
“It’s kind of funny because I was practicing in North Carolina, which is a prohibition state. I got licensed in Oregon and kind of dove head-in to the laws regarding cannabis. It was right around the time that the 2014 Farm Bill came out that legalized, at the federal level, cannabis for the first time in almost a century,” Kight said. “We started getting calls about CBD. And like any good lawyer, I thought I would do some research and see what the laws and regulations were concerning CBD.”
He did not find much. He said he found nothing on CBD derived from hemp. The only federal restrictions on cannabinoids were centered on the source of the product. If the cannabinoids are derived from marijuana, then they are illegal controlled substances because marijuana is defined as the plant and all its parts. The legal definition is so broad that technically speaking, chlorophyll from a marijuana plant is a controlled substance.
Anything derived from a hemp plant, however, is legal, provided it has less than 0.3 percent Delta-9 THC. “All of the hemp plant’s parts are legal. So, if you get CBD or another cannabinoid from hemp, then it is not a controlled substance. I carved that out and began writing about it,” Kight explained. “We started to get more and more calls, more and more clients … things just went from there. That’s now called the Source Rule, and that was the first thing that kind of put me and the law firm on the map.”
Credit: Rod Kight
When Congress wrote the 2014 Farm Bill, lawmakers specifically stated that hemp is a cannabis plant with no more than 0.3 percent Delta-9 THC. Kight says the law could have easily been written as 0.3 percent of “any” THC. There are 30 known THC isomers. “They singled out that one cannabinoid and had to have some reason for doing so. We don’t know what reason that is. It could be good, bad or otherwise. But it took a special effort to say ‘Delta-9’ and call that out versus just ‘THC,’” says Kight. “The result is that all forms of THC with the exception of Delta-9—no more than 0.3 percent—have been removed from the controlled substances list.”
Another concern is that the U.S. Drug Enforcement Agency (DEA) views Delta-8 as a synthetic form of THC, which is illegal. Kight says the agency is correct in saying synthetic THC is illegal; however, he explained that it is not entirely clear whether Delta-8 produced from CBD qualifies as a “synthetic” form of THC under U.S. law since no generally accepted legal definition of the term “synthetic” exists.
“To be clear, there’s not a special listing for ‘synthetic’ THC. It just says that THC is a controlled substance and that includes synthetic forms of THC … it’s totally accurate. However, the Farm Bill provides an exception. It specifically removed hemp from the controlled substances list, including all of its cannabinoids, extracts, derivatives and isomers. That more specific and recent law trumps the general older law, which is the Controlled Substance Act (CSA).” Legally speaking, this is referred to as the doctrine of “lex specialis,” which means that “the more specific controls over the general. In other words, the Farm Bill exempts hemp-derived Delta-8 THC from the CSA.”
Delta-8 THC and its cousins are not like the synthetic cannabinoids, such as K-12 and Spice, that pushed the DEA to ban synthetic THC, according to Kight. He says that those K-12/Spice synthetics are not anything like the THC molecule. In fact, technically speaking, they are not synthetic forms of THC. Rather, they are best understood as analogs of THC. These fall under the Analogue Act, a section of the CSA passed in 1986. It allowed any chemical “substantially similar” to a controlled substance listed in Schedule I or II to be treated as if it were listed in Schedule I, but only if it is intended for human consumption and has a stimulant, depressant or hallucinogenic effect on the central nervous system that is substantially similar to or greater than the controlled substance.
Delta-8 does not have the same effect on the body as Delta-9 THC. “Synthetics are typically very strong and potent, whereas Delta-8 is up to 10 times less potent than Delta-9 THC,” he said. “That’s a long way of saying that those are compounds that are created in a laboratory. They don’t resemble THC. Delta-8 is a natural compound that the cannabis plant produces and is much less potent than Delta-9 THC.”
Preventing precedent
Another question that arose following our previous article centered on the recent arrests of some Georgia vape shop owners for selling Delta-8 products. The Newnan Times-Herald reports that county authorities were tipped off that a store was illegally selling THC products. An undercover officer bought gummies from the store, and law enforcement tested the product for THC. They tested positive for THC. However, the tests the officers used in the field cannot differentiate between Delta-8, Delta-9 or any other THC, or if the products contained more than 0.3 percent of THC.
While several states have laws, regulations or official agency-level legal positions banning Delta-8 THC, Georgia does not. “Could this case set a precedent for other vape shop owners if they are found guilty?” a reader asked.
Kight says one only needs to look to the state statute for an answer. If the state’s hemp laws mirror the federal law, like (the laws of) many states do, then Delta-8 is a legal product. “If a judge were to be persuaded that it was illegal, however, that could create precedent,” said Kight. “Other states could look to Georgia’s ruling, and that could be very detrimental if the prosecution wins.”
The bigger problem with the Georgia case is the testing protocols, according to Kight. Most state crime labs don’t test to differentiate between different types of THC. To convict someone, you have to prove beyond reasonable doubt that they have committed a crime. The best a crime lab can usually do is identify THC. Depending on the particulars of the case, this may not be sufficient.
“There’s all sorts of forms of THC that are lawful. So, meeting its burden of proof to convict is much more difficult for a prosecutor now that hemp is lawful,” explains Kight. “A related issue is when crime labs test products using heat, which is known as gas chromatography. Since THCA [the acid form of the THC molecule] transforms into Delta-9 THC when heated in a process called decarboxylation, this is problematic. THCA in cannabis begins to decarboxylate at approximately 220 degrees Fahrenheit after around 30 [minutes] to 45 minutes of exposure. That amounts to evidence tampering, namely, converting one piece of evidence into another. … I hope that criminal lawyers will address this issue when it arises.”
Banning cannabinoids is not the way to regulate them, according to Kight. He says lawmakers need to understand that prohibition is a failed concept. Not only does it waste resources, it also drives products that are desired by the public into the underground black market, which results in additional problems, according to Kight. Banning a product means regulators lose the ability to regulate the safety of these products. “They are washing their hands on the ability to regulate them and collect taxes,” Kight says. “Prohibition also incentivizes people who would otherwise operate legitimate legal businesses to participate in an illegal black market.”
Businesses need to understand the laws surrounding cannabis products because they are consistently evolving. There are a lot of U.S. Food and Drug Administration regulations regarding labeling and the manufacturing processes. Importantly, no one should be making medical claims about their products. “You need to understand the laws,” Kight said. “Secondly, you need to be willing to dig in and understand the science so that when you look at a certificate of analysis and an ingredient list, you know what that means so that you’re not pumping out products to the public that may be dangerous.”
Kight said that he expects the FDA to start regulating CBD products in the next 12 months to 18 months. He isn’t sure if those regulations will encompass all cannabinoid products. Currently, several bills dealing with regulating CBD are floating through Congress. For example, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021 has been in the Subcommittee for Health since early February.
This bill would allow the use of “hemp, cannabidiol (i.e., CBD) derived from hemp, or any other ingredient derived from hemp” in a dietary supplement, provided that the supplement meets other applicable requirements. Currently, the FDA’s position is that CBD products may not be marketed as dietary supplements.
Credit: Jose
Kight said that he also expects the market to consolidate as federal regulators enact rules for the industry. This will be good for some businesses and bad for others. “Companies that are attractive to the bigger companies will either enter into joint ventures or be acquired. Additionally, smaller companies that fill a niche that some of these larger conglomerates cannot fill will fare well,” said Kight. “But for companies that don’t fill a specific niche and also are not going to be appealing as a merger acquisition target, they’re going to struggle once a lot of consolidation occurs.”
Marijuana markets
Marijuana is growing globally. Numerous nations have or are considering legalizing cannabis products. Kight says that global markets are a “moving target” and changes typically do not happen overnight. In December 2020, the United Nations’ drug policymaking body recognized the medicinal and therapeutic potential of marijuana. Following a 2019 World Health Organization recommendation, the U.N. Commission on Narcotic Drugs removed cannabis from the strictest drug tier, Schedule IV, of the 1961 Convention—where it had resided alongside heroin for decades.
The U.S. currently has bills in both the House and the Senate aimed at national legalization for Delta-9 THC products. The Cannabis Administration and Opportunity Act (CAOA) aims to withdraw laws and federal penalties on marijuana. If passed, the legislation would also expunge nonviolent federal cannabis-related criminal records and let states make their own marijuana laws.
The CAOA proposal builds upon the recent Marijuana Opportunity Reinvestment and Expungement (MORE) Act passed by the U.S. House of Representatives. The CAOA expands beyond the MORE Act by proposing a “moon-shot effort to address drugged driving and multi-substance impairment, establishing strong cannabis health and safety standards” under the FDA, and leveraging the expertise of the Alcohol and Tobacco Tax and Trade Bureau within the Department of Treasury to regulate industry practices.
The U.S. cannabis industry grew 32 percent in 2020; and by 2025, it is estimated that the industry could have nearly $45.9 billion in annual sales, according to Grandview Research. Kight says legalization is probably closer at the federal level than many realize, most likely within the first term of the Biden administration.
“Whether that’s 12 [months] or 36 months from now … I think we’re going to see it during that time period,” he said. “We don’t know what form it’ll take, but it’s probably going to either be removing marijuana and THC from the controlled substances list altogether, which is really what should happen, or they’re going to be scheduled in a different way. Most likely, we will continue to have state-by-state regulation within the paradigm of federal legalization; some states will be really liberal, and some states will be really conservative.”
Internationally, Uruguay and Canada were the first countries to legalize marijuana. Several other countries are attempting to follow suit. However, many nations have signed onto treaties that make marijuana and THC illegal. Hemp is also defined differently from country to country, especially in the EU. In Switzerland, it is a 1 percent THC cap, whereas some other countries in the EU have a 0.2 percent cap, according to Kight. Countries have recently been more open to legalizing hemp, and that trend is expected to continue.
“We’re beginning to see producers in certain countries where hemp can be grown inexpensively being shipped to other countries where it can’t be produced inexpensively but where there’s a higher market price and demand. For instance, South America is known for being able to cultivate large tracts of hemp, especially in countries like Uruguay and Colombia, he says. “They want to deliver it to the EU where it’s a lot more expensive, there’s a large demand and people willing to pay more.”
In France, a court case made the decision for the country to legalize CBD products. France’s highest court ruled that CBD—including CBD flower—are legal in the country. The decision referenced last year’s KanaVape judgement in which a European court ruled that the French authorities had acted unlawfully in prosecuting two businessmen who imported CBD flowers from the Czech Republic in 2014, citing that CBD is “not a narcotic.”
The European court said France cannot ban any CBD that’s produced lawfully in the EU. If a product is produced lawfully in one EU country, it must be allowed in all EU countries. “France is changing its laws right now. Spain has got to change,” said Kight. “We are going to see this happen across Europe. These countries are working toward or just coming into compliance.”
One of the biggest stories currently in cannabis reform is Mexico. In late June, Mexico’s Supreme Court declared unconstitutional the prohibition of personal marijuana use in the country, clearing a path to legalization. Mexico’s lower house passed a legalization bill in March, but it is still awaiting legislative approval in a gridlocked Senate.
The Supreme Court of Mexico determined that the laws in Mexico prohibiting the personal use of cannabis is unconstitutional, according to Kight. Mexico has a “really important clause that the U.S. doesn’t have” called The Right to Free Development of Personality. The Mexican constitution protects the individual’s right to be unique and independent.
In several cases, marijuana advocates argued that the state cannot infringe upon that right when the consequences of marijuana consumption—be they positive or negative—only affect the individual who chooses to use the drug. “The Mexican Supreme Court agreed and determined that laws prohibiting cannabis use for personal use violated that constitutional provision,” Kight said.
Under Mexican law, its Supreme Court must rule on an issue five separate times (separate cases) for a decision to have precedence or value. The same process was how same-sex marriage was legalized in Mexico in 2014. The first cannabis case was brought by four members of the Mexican Society for Responsible and Tolerant Consumption in 2015. After the fifth separate marijuana decision was handed down in 2020, the court ordered the Mexican Congress to change the criminal laws prohibiting the use of cannabis.
Mexican lawmakers then failed to meet the Supreme Court’s April 2021 deadline to end marijuana prohibition after spending months going back and forth on a legalization bill that passed both chambers of Congress in differing forms. “There was an expectation that the Senate would again ask the court for an extension, but that did not take place. The Supreme Court of Mexico then entered a ruling that nullified the Mexican laws prohibiting cannabis use, and so we’re kind of in the Wild, Wild West now,” Kight explains. “That’s never happened for any subject under Mexican law, much less cannabis. Now the Congress is under the gun to enact laws and regulations.”
Credit: Stock Photo Pro
Future focus
Overall, cannabis markets are expected to continue to grow globally. According to Market Watch, the global cannabis market size is expected to reach $118.9 billion by 2027 and is valued at approximately $20.6 billion in 2020. It is anticipated to grow with a healthy rate of more than 28.5 percent from 2020 to 2027. Regulation is coming, and many countries will likely regulate cannabis similar to the way tobacco products are regulated.
To help secure the future of the industry, businesses currently selling or manufacturing products using minor cannabinoids need to regulate themselves and produce and/or market only high-quality products using legitimately sourced and tested ingredients, says Kight, adding that one bad product can reverberate through the industry. Business owners should also be actively engaged with regulators.
“There are a lot of cannabis products out there that are not regulated. They might have contaminants in them that harm people, and we don’t want that,” he says. “I think it’s really important that industry players make sure they’re only dealing in high-quality, safe products. And they need to let their representatives in government know how important hemp is to them, including all of its cannabinoids.”
In Nevada, Delta-8 THC is illegal. During the cannabis culture and accessories trade show, CHAMPS, the Federal Bureau of Investigation and the the Drug Enforcement Administration (DEA) allegedly raided the show because a vendor participating in the event unwittingly gave the Las Vegas district attorney an unauthorized Delta-8 THC product sample. Several social media posts by vendors at the show said they were detained and products were confiscated.
Credit: CHAMPS
Providing samples to the show’s attendees is against the rules. As a result, some vendors were asked to vacate the premises. CHAMPS vendors received notice last week that samples of Delta-8, Delta-10 THC and similar products were illegal in Nevada and vendors should refrain from offering samples.
Several social media posts began to report of the feds raiding the venue started cropping up late Wednesday evening. By Thursday, various vendors began posting that the officers ordered the attendees to wait outside while they inspected the scene, according to CannaTech Today. As a result of yesterday’s occurrence, plainclothes police officers are walking the show floor today while its vendor booths are currently being searched for any Delta-8 THC and similarly prohibited products.
Through the last year, several states, including states where Delta-9 THC is legal, such as Oregon, California and Arizona, passed laws specifically banning Delta-8 THC. Nevada went a step further in early July to specifically include Delta-8 in its definition of cannabis. The Nevada Cannabis Compliance Board recently stated, “products exceeding 0.3 percent THC, including Delta-8 and Delta-9 THC, would be considered cannabis. As such, a license from the Cannabis Compliance Board would be required to make it or sell it.”
The Champs trade show is one of the largest cannabis industry trade shows in the U.S. The 2021 sow is being held from Jul 27 to Sat, July 31 at the Las Vegas Convection Center. Smoke shops, vape shops, dispensaries, 420 counter-culture, adult novelty shops, C-Stores, online marketers and branders, entrepreneurs, glassblowers, and counter-culture industry professionals who are seeking to grow in their market sectors and gain current knowledge and product opportunities to better leverage their business in a thriving marketplace attend CHAMPS, according to the show’s website.
