Gov. Gavin Newsom fired a direct attack Friday on the booming hemp industry, filing emergency rules that would completely ban THC — an intoxicating compound found in cannabis — from hemp products in the state.
Hemp products are sold outside of regulated cannabis stores and can be purchased online or at retail locations like gas stations throughout the state. Newsom said in a statement Friday that the emergency rules were needed to protect children, media reports state.
“We will not sit on our hands as drug peddlers target our children with dangerous and unregulated hemp products containing THC at our retail stores,” Newsom said. “We’re taking action to close loopholes and increase enforcement to prevent children from accessing these dangerous hemp and cannabis products.”
The emergency rules would require that all hemp products in California have “no detectable amount of total THC ” and that customers be over 21 to purchase them. The rules still need the approval of the California Office of Administrative Law before they go into effect.
Reg title: DPH-24-005E-Emergency Regulations for Serving Size, Age, and Intoxicating Cannabinoids for Industrial Hemp has been proposed. Click here to read the proposed regulations. Click here to read the “Finding of Emergency” on which they are based.
Most notably, under the proposed regulations the definition of “THC” is expanded to include “THC or comparable cannabinoids” and adds over 30 cannabinoids to the list of “THC”. Additionally, the amount of THC allowed in a serving is “no detectable amount.”
Cannabis attorney Rod Kight said, “This is an “all hands on deck” moment for the entire cannabis industry to stop this nonsense. If you have business interests in California, stop what you’re doing and call the Governor’s office and your state representatives now.”
The proposed Miller Amendment was designed to kill the hemp cannabinoid industry.
By Rod Kight
As everyone reading this article likely knows, the Miller Amendment unexpectedly passed a bloc vote in the U.S. House Committee on Agriculture on May 23. In a last-minute turn of events, chairman Glenn Thompson ordered an “en bloc” vote on all amendments rather than voting on them individually.
This was presumably done because he knew that he did not have enough votes to pass the Miller Amendment on its own. Unfortunately, the tactic worked. This is especially frustrating given that the chairman has previously expressed interest in retaining the current definition of “hemp” for the next farm bill.
It is not an exaggeration to say that the Miller Amendment was specifically designed to kill the hemp cannabinoid industry. This is because the Miller Amendment:
changes the definition of “hemp” so that total THC must not exceed 0.3 percent;
expressly excludes viable seeds from a marijuana plant from the definition of “hemp” even though they contain almost no THC and the DEA itself considers them to be hemp;
expressly excludes cannabinoids that the plant produces but which are synthesized or manufactured outside the plant from the definition of “hemp” even if they are produced using cGMP or other internationally accepted quality control standards and are identical to the naturally occurring ones; and
expressly excludes “quantifiable amounts” of THC, including THCa, and “any other cannabinoids that have similar effects (or which are marketed to have similar effects) on humans or animals as THC” from the definition of “hemp.”
Taken together, these provisions of the Miller Amendment strike a deadly blow to the entire hemp cannabinoid industry. If enacted into law, the hemp industry as we know it will no longer exist. If you read the provisions carefully, it should be clear that the Miller Amendment was not written by a hack or even someone who is simply concerned about so-called “intoxicating cannabinoids.”
This amendment was written by insiders with a very specific agenda. Presently, the author is not known to me. Still, this policy has been the subject of a major lobbying push by a select group of major marijuana organizations to erase the hemp industry.
Chris Roberts, writing for MJBizDaily, reported that the“U.S. Cannabis Council—members of which include many multistate marijuana operators—circulated a letter asking lawmakers to exclude from the new Farm Bill any hemp-derived product with ‘detectable quantities of total THC and any other intoxicant that can be derived from hemp, including other forms of THC.’”
The U.S. Cannabis Council is not the only villain in the war against hemp, but its members include some of the worst actors. It and its members actively advocate for cannabis policy that:
promotes the interests of a small handful of large corporate marijuana companies (i.e., marijuana monopolists) over the interests of small businesses;
advocates for limited licensure and vertical integration;
uses repurposed “Reefer Madness” fearmongering tactics about cannabis intoxication to further its cause; and
has initiated a “total war” against hemp with the express goal of completely destroying the hemp cannabinoid industry in what amounts to a bloody turf war.
Rod Kight
For anyone who did not previously believe that last point about Big Marijuana’s “total war” against hemp or who has ever asked “why can’t we all just get along?,” today’s congressional shenanigans should be ample proof of Big Marijuana’s end goal of completely eradicating the hemp industry. The Big Marijuana lobby and the monopolistic corporations it serves are willing to resort to backhanded political tactics and otherwise go the distance to take over the cannabis industry to the complete exclusion of the hemp sector. It is time to unite and fight back. This is our rallying cry: Hemp is cannabis. What is good for the hemp industry is good for the cannabis industry.
As I discussed in a recent keynote speech at Noco, the hemp industry is emerging as the paradigm for the future of cannabis. By defeating the Big Marijuana monopolists and promoting reasonable laws/regulations, such as the three-pillar approach (see below), we have an opportunity to rewrite the cannabis story and to create an industry where small businesses and farmers can thrive and consumers have access to a wide array of safe cannabis products through a variety of distribution channels.
Rather than focusing on cannabis intoxication, vertical integration, expensive licensing, prohibiting home-grow, a zero-sum turf war or any other such nonsense, the three-pillar approach addresses three reasonable regulatory “zones” for consumer safety and a healthy industry: (1) age gating, (2) quality control for production and manufacturing, and (3) standardized and informative labeling and marketing. Read/listen to more on the three pillars here. I welcome your input.
Fortunately, a lot of marijuana companies are beginning to see the “hemp light.” I regularly receive calls from marijuana companies who have decided to pivot to the hemp industry as the path forward for their businesses. They see hemp as a commonsense solution, not a “loophole,” and want assistance making the journey. Hemp is the great uniter, and we welcome anyone who believes in fair play, reasonable regulations and a healthy cannabis economy.
Here are some suggestions on how to join the fight and help hemp win the war against oppressive monopolistic interests:
Call your federal lawmakers today and let them know that you support hemp. Tell them to “vote no” to the Miller Amendment and to retain the current definition of hemp.
Support the organizations that are fighting for hemp with your donations: the American Healthy Alternatives Association, the Hemp Roundtable, the Midwest Hemp Council and the Hemp Industries Association. These organizations are leading the fight against a well-funded greed machine, and they cannot do it without your support. If you want the hemp industry to survive, then donate money to these organizations today! Don’t screw around. Do it now.
Call “bullshit” on the organizations that purport to be pro-cannabis but advocate against hemp. Hemp is cannabis, and these organizations are working against your interests. Inform and educate your friends, colleagues, customers, competition, lawmakers, lobbyists, news media and anyone else who has any interest in cannabis that there is a war raging against hemp that will impact the future of cannabis. NOW IS THE TIME!
Stay up to date on news about the farm bill and state-level bills that deal with hemp. We are in a critical time for the industry, and things are moving very rapidly. You owe it to yourself and to the industry to stay informed.
Finally, set aside differences with your competition and focus instead on creating a united hemp industry that is dedicated to a positive future for cannabis. If we win, there will be plenty of time to compete, but if we lose, there will be no industry.
The future of cannabis will be determined by what is happening right now. Act accordingly.
State Attorneys General (AG) have a history of getting it wrong with respect to hemp and hemp products. Earlier this week, attorney Amber Lengacher with the Kight Law firm wrote an article about the Arizona AG’s position statement on delta-8 THC.
Previously, I, attorney Rod Kight wrote in his blog, engaged in good faith with the South Carolina AG, only to have him issue a convoluted and illogical legal opinion that delta-8 THC was illegal. This week, a group of 20 state AGs signed a letter to Congress “to address the glaring vagueness created in the 2018 Farm Bill that has led to the proliferation of intoxicating hemp products across the nation and challenges to the ability for states and localities to respond to the resulting health and safety crisis.”
Aside from failing to provide any evidence of a “health and safety crisis”, the letter also fails by not understanding the hemp market, not offering any concrete proposals, undermining small businesses, and ultimately attempting to interfere with the right of adults to make choices of what legal products they decide to consume without government interference.
First, the state AGs fail to understand that protecting hemp farmers means protecting their end markets. Although hemp fiber and seeds are promising markets, they have not taken hold in a way that incentivizes widespread adoption of hemp as a cash crop. Instead, the current end markets for hemp primarily take the form of consumer products, some of which are intoxicating. As many readers are aware, a Whitney Economics report from October 2023 states:
“Currently, the total demand for hemp-derived cannabinoids is valued in excess of $28 billion and supports the employment of 328,000 workers, who earn $13 billion in wages. Overall, the total economic impact of the hemp-derived cannabinoid industry on the U.S. economy is in excess of $79 billion. While they may seem large, these estimates are actually conservative because they do not account for demand and employment from gas stations, grocery stores, and convenience stores.“
In other words, protecting hemp farmers means protecting these hemp cannabinoid products.
Additionally, attempting to regulate hemp products based on their capacity to produce intoxication is the wrong approach. It’s a classic “Fool’s Errand” that I have written about before. To begin, it is impossible to define “intoxication”, in a way that is workable from a legal or regulatory standpoint. Attempting to eliminate or control intoxication by redefining “hemp”, prohibiting an entire class of hemp products, and/or via capping the allowed milligrams of THC and other compounds that are allowed in a product or package is totally unnecessary. This approach amounts to a “Nanny State” method of addressing an issue that should instead be based on an adult’s personal preference.
As I’ve discussed before, rather than regulating hemp and its products based on “intoxication”, the proper approach should be focused on:
(a) restricting access by minors (ie, age gating),
(b) requiring quality control for production and manufacturing of hemp and hemp products (ie, requiring manufacturers to comply with cGMP and other objective quality standards), and
(c) requiring proper and informative labeling/marketing (ie, ensuring that the consumer is adequately informed about the product).
This three-pronged approach allows adults to make an informed decision about the products they choose to purchase and consume while limiting access to minors and sidestepping the impossible task of defining and regulating products based on their potential to cause intoxication. To use an alcohol comparison, an adult can purchase a low-alcohol “session” beer, a nice bottle of wine, or a large “handle” of hard liquor.
The choice of “potency” is left up to the adult consumer, who can rest assured that the products are properly manufactured and that the label will provide sufficient information about the alcohol content to help her make an informed decision about what to purchase and how much to consume. Of course, alcohol causes both intoxication and a host of health and social problems. The fact that it is lawful and widely available across many retail distribution platforms, including convenience stores, while hemp products are being decried as a public health crisis is, frankly, insane.
Finally, I’d like to comment on that last point, namely, the sale of hemp products in convenience stores, another topic I have previously discussed but is worth revisiting. I frequently hear the claim that “hemp products are sold in convenience stores” used as an argument about how bad and unregulated the hemp industry is. This is a red herring. Of all the possible distribution outlets for hemp products, convenience stores are among the best.
Think about it. For decades, convenience stores have been selling highly regulated products such as alcohol and tobacco that are subject to strict age-gating. To be clear, I favor all properly-regulated distribution channels and platforms for hemp products, from e-commerce sites to boutique hemp wellness centers to convenience stores.
However, to claim that the hemp industry is somehow bad and unregulated because its products are sold at convenience stores, which are highly regulated and frequently subject to agency audits, licenses, high fines, and even criminal action if certain products are sold to minors, is ridiculous. The “convenience store” argument against hemp should die because it is totally unfounded.
There is a war raging against hemp, but it goes much deeper than that. At stake is the future of cannabis reform in the US, the ability for small businesses to thrive in an emerging market, and the right for adults to make their own determination about what they choose to ingest.
Provided that regulations are in place that address age-gating, quality control, and proper labeling, it is difficult to imagine why we need to concern ourselves with “intoxication” or any of the overreaching regulations and blood-sucking tax regimes that are currently strangling the marijuana industry. As the DEA seems to be balking at even a modest rescheduling of marijuana to Schedule 3, hemp stands as the new path forward for broad cannabis reform.
Based in Asheville, NC, Rod Kight is a renowned attorney in the cannabis industry.
This article is not intended to be legal advice and should not be used as such. The matters discussed are novel and involve complicated and unsettled legal issues. Before making any decisions regarding THCA, you should first consult with an experienced attorney.
Hemp is cannabis, and it should be subject to reasonable regulations of quality, safety and youth access.
By Rod Kight
The hemp industry is subject to numerous regulations. Aside from hemp production, which is regulated by the U.S. Department of Agriculture (USDA) either directly or via USDA-required approval of state hemp plans, every state in the country has laws regarding hemp. Most states also regulate hemp products. Some states, such as California, Colorado and Oregon (to name a few), have very detailed hemp regulations that are much more stringent than federal regulations for their similar noncannabis product categories (i.e., foods, dietary supplements, etc.).
Other states, including but not limited to Florida, Tennessee and Texas, have detailed but less stringent regulations. Several states regulate hemp more generally, including Alabama, Indiana, Louisiana and Washington. To be clear, I am not making value judgments about any of these states’ regulatory schemes nor am I being comprehensive. The point I am making is that hemp and hemp products are subject to regulations of some sort, often stringent regulations, on a state-by-state level.
A hemp company that distributes products nationally, or even regionally, must deal with many compliance hurdles, including state laws that directly contradict other state’s laws, labeling requirements that are well beyond any labeling requirements under federal law, analytical testing, permitting, advertising, and age restrictions. Additionally, more and more states are imposing hemp-specific taxes. On top of this web of sometimes conflicting regulations, law enforcement is often behind the curve, and lawful hemp operators constantly live in fear of an unfounded, but stressful and expensive, raid of their businesses.
Additionally, the claim that hemp is “merely” regulated at the state level undercuts all the arguments regarding regulation promulgated by the marijuana industry since marijuana is federally illegal and is thus solely regulated by the states. This is particularly true since at the federal level, the U.S. Food and Drug Administration, the USDA and the Federal Trade Commission (not to mention the Drug Enforcement Administration) have all flexed their regulatory muscles at the hemp industry during its decade-long evolution. In short, the claim that the hemp industry is “unregulated” is simply false. Most of my time is spent advising clients on how to stay compliant with the patchwork of state and federal regulations governing the hemp industry.
Rod Kight
The hemp industry desires reasonable federal regulations
The hemp industry is often portrayed as populated by greedy “cowboys” who despise regulation and will do anything they can to sell contaminated bathtub gin products to unassuming consumers and to minors. In the popular trope, the hemp industry abhors and shuns regulations. This view is entirely unfounded. In nearly a decade of representing hemp companies, I have been fortunate to represent many of the largest and most well-known ones in the world. I have also enjoyed representing hundreds of small, mostly unknown hemp companies founded and operated by regular people who are following their dream of owning a business and expanding cannabis access to their fellow Americans.
Additionally, I have been privileged to represent and interact with many hemp associations and attorneys who represent hemp companies throughout the U.S. The common denominator of all of these people and companies is a desire to be subject to a single set of reasonable regulations. I am not aware of a single client of mine, or any other hemp executive, who does not agree with the statement, “The hemp industry should be subject to reasonable regulations regarding safety and access by minors.” Sure, cowboys exist in every industry, including the marijuana industry, but in the legitimate hemp industry, everyone is like-minded on this point.
What are “reasonable regulations”? First, and just like any other consumer packaged goods (CPG) industry, the hemp CPG sector should be subject to regulations regarding the quality and purity of its products. Moreover, marketing and labeling of hemp products should be uniform and provide the consumer with sufficient information about a product to make an informed decision about whether to purchase it and how to consume it. These types of regulations already exist for foods, dietary supplements and “vice” products, such as alcohol and tobacco. The hemp industry wants to be treated the same way with respect to quality control and marketing—no more, no less.
Second, access to hemp products by minors should be restricted. There is a lot of focus on “intoxicating” versus “nonintoxicating” products, however, classifying hemp products based on the potential for intoxication is a fool’s errand. Rather, all hemp products, with perhaps the exception of CBD isolate topicals, should be subject to age-gating, with the proviso that a minor’s parent or guardian can purchase a hemp product for the minor’s use and also provide authorization to third parties regarding its use by the minor.
I recognize that this proposal will annoy many people, but it is simple and avoids messy distinctions that are difficult to articulate and mostly unfounded in science, tricky regulations and an overall regulatory structure that will be resource intensive and, frankly, unnecessary. Distributors should be required to age-gate, but minors who need hemp cannabinoids should be able to access them with parental/guardian consent. I will also say that there are other ways to restrict access by minors and that my proposal is up for negotiation. Remember, however, that the point of this article is not to propose a detailed regulatory regime. Rather, it is to make it clear that the hemp industry agrees with age-gating and regulations regarding safety and quality.
A short note about convenience stores
Finally, I’d like to make a side comment about the sale of hemp products in convenience stores. I frequently hear the claim that “hemp products are sold in convenience stores” used as an argument about how bad and unregulated the hemp industry is. This is a red herring. Of all the possible distribution outlets for hemp products, convenience stores are among the best. Convenience stores have for decades been selling highly regulated products, such as alcohol and tobacco, that are subject to strict age-gating.
To be clear, I am in favor of all sorts of properly regulated distribution outlets for hemp products, from e-commerce sites to boutique hemp wellness centers. However, to claim that the hemp industry is somehow bad and unregulated because its products are sold at convenience stores, which are highly regulated and frequently subject to agency audits, licenses, high fines and even criminal action if certain products are sold to minors, is ridiculous. The “convenience store” argument against hemp should die because it is totally unfounded.
Conclusion
The hemp industry has been the subject of a smear campaign based on unfounded allegations that it is unregulated and that it opposes regulations. Both claims are untrue. The hemp industry is highly regulated by both federal and state laws. Additionally, the hemp industry favors reasonable regulations regarding product safety, consumer safety and access by minors. Reasonable people can differ on how these types of regulations should be written, but they are necessary and welcomed by the hemp industry.
Finally, the particular distribution outlet for hemp products is immaterial provided that hemp products are properly and uniformly regulated for quality and safety and that access by minors is restricted. To claim that an industry is unregulated and illegitimate because its products are sold at convenience stores, which happen to be some of the most regulated distribution outlets in the U.S., is a ridiculous argument that needs to be put to rest.
Hemp is cannabis, and cannabis should be subject to reasonable regulations regarding quality, safety and access by minors so that all consenting adults can have the access they need and that all Americans who desire to operate a legally compliant hemp business can take part in the burgeoning cannabis industry.
Rod Kightis an international cannabis lawyer. He represents businesses throughout the cannabis industry.
The U.S. DEA says cannabis-derived delta-9 THCA does not meet the definition of hemp under the CSA.
By Rod Kight
The U.S. Drug Enforcement Administration (DEA) issued a letter1 on June 9, 2023, in response to a request about information regarding, among other things, tetrahydrocannabinolic acid (THCA). Note that I was only able to locate a copy of the letter on Reddit. I had to compile a series of PNG images of it into a single document. I believe, but cannot confirm, that the letter is in response to an inquiry by Vice Media Group.
In the letter, the DEA states the following about THCA:
“In regard to delta-9 THCA, Congress has directed that, when determining whether a substance constitutes hemp, delta-9 THC concentration is to be tested ‘using post-decarboxylation or other similarly reliable methods.’ 7 USC § 1639p(a)(2)(A)(ii)2; 7 USC § 1639q(a)(2)(B).3 The “decarboxylation” process converts delta-9 THCA to delta09 THC. Thus, for the purposes of enforcing the hemp definition, the delta-9 THC level must account for any delta-9 THCA in a substance…. Accordingly, cannabis-derived delta-9 THCA does not meet the definition of hemp under the Controlled Substances Act because upon conversion for identification purposes as required by Congress, it is equivalent to delta-9 THC.”
Rod Kight
Is the DEA right?
The answer is “it depends.” If the DEA is addressing the legal status of hemp that is in production (i.e., pre-harvest hemp), then it is correct. As I have previously discussed,4 all hemp must pass a “post-decarboxylation” test, commonly known as a “total THC” test, in order for it to be harvested. However, for hemp that is postproduction, i.e., hemp that has passed a post-decarboxylation test and been harvested, the sole legal metric for determining its legal status is its delta-9 THC levels. In other words, if we read the DEA’s letter to contend that postproduction hemp is subject to a post-decarboxylation test, then it is wrong.
The post-decarboxylation test does not apply to postproduction hemp. The two statutes cited by the DEA in its letter are the only two places in the Agriculture Improvement Act of 2018, commonly known as the 2018 Farm Bill, that the term “post-decarboxylation” appears. They both apply solely to hemp production.
In the first statutory provision, 7 USC § 1639p(a)(2)(A)(ii), Congress sets forth the criteria that states and Indian tribes must comply with in order to “have primary regulatory authority over the production of hemp” within their jurisdictions. The second statutory provision, 7 USC § 1639q(a)(2)(B), is similar in that it sets forth the criteria that the U.S. Department of Agriculture (USDA) shall use to “monitor and regulate [hemp] production” in states that do not have an approved hemp plan and thus do not have primary authority over hemp production within their jurisdictions (state and tribal hemp plans are available at www.ams.usda.gov/rules-regulations/hemp/state-and-tribal-plan-review).
The key word in the above provisions is “production.” In law, we refer to a word with a specific and defined legal meaning as a “term of art.” In the context of hemp, “production” is a legal term of art. Under 7 CFR § 990.1,5 to “produce” means “To grow hemp plants for market, or for cultivation for market, in the United States.” Additionally, 7 CFR § 718.26 defines a “producer” as “an owner, operator, landlord, tenant or sharecropper who shares in the risk of producing a crop and who is entitled to share in the crop available for marketing from the farm or would have shared had the crop been produced. A producer includes a grower of hybrid seed.” To produce hemp means to grow it.
Since the post-decarboxylation test clearly applies to producers, the DEA is correct when it states that “for the purposes of enforcing the hemp definition, the delta-9 THC level must account for any delta-9 THCA.” A hemp producer’s crop must not have total THC concentrations exceeding 0.3 percent by dry weight in order to harvest it. However, once that crop passes the test and is harvested, no additional test is required under federal law.
“At that point, meaning post-harvest, the sole statutory metric under federal law for determining whether harvested cannabis material is lawful hemp or illegal marijuana is its delta-9 THC levels. In fact, the DEA stated this very clearly in a letter dated January 6, 2022:7 “[T]issue culture or any other genetic material that is derived or extracted from the cannabis plant such as tissue culture and any other genetic material that has a D9-THC concentration of not more than 0.3 percent on a dry weight basis meets the definition of “hemp” and thus is not controlled under the CSA.”
This was not the first time the DEA said that Delta-9 was the sole factor. During a video webinar8 called a “Town Hall with USDA and DEA” conducted by the Florida Department of Agriculture and Consumer Services on June 24, 2021, the DEA representative stated: “I’ll be very, very deliberate and clear. At this time, I repeat again, at this time, per the Farm Bill, the only thing that is a controlled substance is delta-9 THC greater than 0.3 percent on a dry weight basis.”
The 9th Circuit Court of Appeals has also weighed in on this issue, stating: “[T]he only statutory metric for distinguishing controlled marijuana from legal hemp is the delta-9 THC concentration level.” 9
So, the DEA is right that Congress requires a post-decarboxylation test for hemp production. But, once hemp has been deemed to be compliant and allowed to be harvested, the “post-decarboxylation” test no longer applies. You may reasonably ask how a crop that passed a total THC compliance test could be harvested and have flowers with no more than 0.3 percent delta-9 THC but with high concentrations of THCA. I discuss that in a companion article.10
In summary, this DEA pronouncement is bound to create more confusion in an already confusing area of law; however, it should properly be read as simply restating the fact that hemp producers must comply with the total THC test in order to harvest their hemp. Post-harvest (i.e., postproduction), the 2018 Farm Bill’s definition of hemp clearly states that the delta-9 THC levels are what matter, not the levels of THCA.
Finally, I should note that the DEA also addressed other cannabinoids in its letter, including hexahydrocannabinol (HHC), which it finds to be an illegal synthetic form of THC that does not naturally occur in the cannabis plant. There is contrary evidence to this position, namely that HHC is naturally produced in cannabis seeds,11, 12 but that issue is for a future discussion.
Based in Asheville, NC, Rod Kight is a renowned attorney in the cannabis industry.
This article is not intended to be legal advice and should not be used as such. The matters discussed are novel and involve complicated and unsettled legal issues. Before making any decisions regarding THCA, you should first consult with an experienced attorney.
Issues to be aware of before marketing THCa hemp flower
By Rod Kight
As a cannabis lawyer, I represent lots of companies in the U.S. hemp industry, and I am routinely asked legal questions about new and novel products. I am currently receiving lots of calls about “THCa flower.” In this article, I will discuss THCa flower and several legal and practical issues regarding it.
What is THCa flower?
THCa flower refers to cannabis buds marketed as hemp. These buds are intended for smoking or vaping. They contain high concentrations of tetrahydrocannabinolic acid (THCa) and low concentrations of delta-9 THC (D9). Specifically, their D9 levels do not exceed 0.3 percent by dry weight, which is the legal limit for hemp under the 2018 Farm Bill. For example, I recently viewed a certificate of analysis of THCa flower that showed 25 percent THCa and 0.18 percent D9. This is remarkable. Despite the fact that this cannabis flower is federally lawful hemp, smoking it will get you very high. In fact, cannabis flowers with high THCa/low D9 ratios are exactly what is being sold as marijuana in states that have legalized it. Although some marijuana strains contain D9 in levels that exceed 0.3 percent, many strains do not. This means that they are technically “hemp” under federal law. In other words, THCa hemp flower is no different from much of the marijuana flower currently sold in medical and recreational marijuana dispensaries in states with regulated marijuana markets.
Rod Kight
Is THCa flower legal?
The short answer is “yes,” at least under federal law and the laws of some states.The idea that there are legal hemp buds that are no different from illegal marijuana buds seems counterintuitive, but proving that this is true involves a very straightforward analysis. The 2018 Farm Bill distinguishes legal hemp from illegal marijuana solely by reference to its D9 levels. Specifically, hemp is cannabis with no more than 0.3 percent D9 by dry weight. A hemp bud with THCa levels of 20 percent and D9 levels of 0.15 percent falls squarely within the 2018 Farm Bill’s definition of “hemp” and is legal under federal law.
In fact, the Drug Enforcement Administration (DEA) has specifically stated on multiple occasions that cannabis material meeting this definition is lawful. In a Jan. 6, 2022, letter, the DEA stated: “Material that is derived or extracted from the cannabis plant, such as tissue culture and any other genetic material that has a delta-9 tetrahydrocannabinol concentration of no more than 0.3 percent on a dry weight basis, meets the legal definition of ‘hemp’ and is thus not controlled under the CSA.” This was not the first time the DEA confirmed that the sole factor distinguishing lawful hemp from unlawful marijuana is its D9 concentration. In addition to confirming this standard in both a letter to the Alabama Board of Pharmacy and a public statement to the Florida Department of Agriculture and Consumer Services, the DEA’s Interim Final Rule regarding hemp states that marijuana is limited “to only include cannabis or cannabis-derived material that contain more than 0.3 percent delta-9-tetrahydrocannabinol (also known as D9-THC) on a dry weight basis.”
In summary, harvested cannabis flower with D9 concentrations not exceeding 0.3 percent meets the legal definition of “hemp” and is not controlled under federal law, regardless of its THCa levels. It is important to note that this only applies to harvested cannabis material. The U.S. Department of Agriculture (USDA) controls hemp production, and its regulations require a test that accounts for both THCa and D9 before the hemp can be harvested, commonly referred to as a “total THC” test.
What are the major legal issues with THCa flower?
Although THCa hemp flower is lawful under federal law, there are some important issues and considerations to be aware of. The rest of this article will discuss these issues.
Is it possible to grow compliant THCa flower?
One issue is whether THCa flower, at least with the high THCa concentrations discussed at the beginning of this article, can come from hemp grown in compliance with the USDA’s pre-harvest testing requirements. Through my research and discussions with clients, I have been made to understand that it is difficult, though possible, to obtain THCa hemp flower from hemp that passed the USDA’s pre-harvest tests. Additionally, it is important to note that the DEA considers all cannabis material with D9 levels not exceeding 0.3 percent by dry weight to be lawful “hemp” regardless of whether or not it was grown by a licensed hemp producer and/or if it passed a USDA total THC pre-harvest test. This conflict between the USDA and the DEA is an unsettled area of law, though it is clear that the USDA’s regulation of hemp terminates upon harvest.
What about state laws?
Another issue is whether THCa flower is lawful under state law. The answer depends on the state in question. It is clear that you can lawfully transport THCa flower through a state regardless of its hemp laws. This is because the 2018 Farm Bill states: “[N]o state or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the state or the territory of the Indian Tribe as applicable.” But individual states may restrict or even downright prohibit it. Although THCa flower is lawful in many states, it is prohibited in others. For instance, some states restrict all hemp that is intended for smoking, which includes THCa flower. Some states allow smokable hemp but prohibit THCa flower based on their requirement that hemp pass both a pre-harvest and post-harvest “total THC” test. Additionally, the legal status of THCa flower in some states can be tricky to determine due to the way that their hemp laws and regulations are written.
In summary, the laws and regulations of a given state determine the extent to which THCa flower is lawful. State laws vary, and the legal status of THCa flower can sometimes be difficult to determine. This leads to a final issue: confusion and misunderstanding of hemp laws.
What if THCa is lawful in my state but law enforcement disagrees?
A final issue to consider is confusion by law enforcement and state regulators about the legal status of THCa flower. Many people in the hemp industry contend that hemp flower is only lawful if it passes a “total THC” test, which accounts for both THCa and D9. Although this is correct for hemp that has not been harvested, it is wrong under federal law and the laws of many states for harvested cannabis material. Given that this issue is confusing even to experienced hemp industry participants, you can imagine its misunderstanding is compounded by law enforcement and even regulators, many of whom do not know or care much about (or for) hemp. In practice, this means that someone lawfully selling THCa flower may experience problems, including prosecution, from law enforcement.
Conclusion
THCa flower is poised to be the “next big thing” in the hemp industry. Based on the feedback I am receiving, I believe that it will be very popular in much of the country. As discussed above, THCa flower is lawful under federal law and the laws of some states. However, before deciding to participate in the emerging THCa flower market, it is very important to understand the issues and risks involved.
Important Note: This article is not intended to be legal advice and should not be used as such. The matters discussed are novel and involve complicated and unsettled legal issues. Before making any decisions regarding THCa, you should first consult with an experienced attorney.
While there are three bills in Congress competing to legalize marijuana, there are also many obstacles.
By Timothy S. Donahue
For the second time, the U.S. House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act (HR 3617), a bill that would end the federal prohibition on cannabis by removing it from the list of banned controlled substances. The MORE bill that passed the House with 220 “yea” votes to 204 “nay” votes would end the federal ban but leave legalization up to the states. The last time the House passed the MORE Act, the Senate did not take it up for a vote.
The current MORE bill is also expected to face strong headwinds in the Senate. This is partly because there are currently three bills floating through Congress competing to legalize marijuana on the federal level. The second bill, the States Reform Act (SRA), was introduced last year by Representative Nancy Mace. The SRA is the first comprehensive Republican version of legislation to end cannabis prohibition. It’s expected to have its own hearing in April (but had not at press time). Mace voted no on the MORE Act.
Mace’s legalization bill is primarily aimed at having the federal government treat marijuana in a similar manner to alcohol, and cannabis would be removed from the Controlled Substances Act, with retroactive effects for people previously punished. Prior federal cannabis convictions would need to be expunged within one year.
The third marijuana legalization bill is out of the Senate. Senate Majority Leader Chuck Schumer, Senate Finance Committee Chairman Ron Wyden and Senator Cory Booker introduced the Cannabis Administration and Opportunity Act in 2019. It was read twice and has been in committee ever since. The main features of the legislation largely align with what advocates and stakeholders expected. The bill (S. 1552) would federally deschedule cannabis, expunge prior convictions, allow people to petition for resentencing and maintain the authority of states to set their own marijuana policies.
While all the action marijuana legalization bills are receiving lately is exciting, it doesn’t mean that the U.S. is close to decriminalizing delta-9 THC. Rod Kight, founder and principal of Kight Law Office and a prominent global expert in marijuana law and legislation, said that he doesn’t expect any of the legalization bills to pass this year. Currently, cannabis is legal for adult use in 19 states and for medical use in 36 states. The legal marijuana industry generated $25 billion in sales last year, a 43 percent increase over 2020, and is expected to hit $65 billion in 2030, according to Forbes.
In an interview with Vapor Voice, Kight shared his insights into the various bills.
Vapor Voice: Do you think the MORE Act has a chance to get passed in the Senate?
Rod Kight
Kight: I think it has almost no chance whatsoever in the Senate for a couple of reasons. One is that there are competing bills. I think we may have some political showmanship as to which bill can get passed. Additionally, the Senate doesn’t get a whole lot done to begin with. It’s become an “obstructionist” legislative body, but that’s a topic for another day. So, with respect to the MORE Act, I would call this a symbolic vote by the House that, disappointingly, is almost certainly not going to pass in the Senate or even come close.
If you thought one bill had a best chance to pass, which one would you choose?
If a decent bill came from the Senate to the House, then it may have a good chance. In that scenario there, a bill is much more likely to pass than one coming from the House to the Senate. I think the hurdles the Schumer/Booker bill are going to face are that it’s competing with a Republican bill in [the] House. Additionally, it’s also just still competing with old-school prohibitionists. This is important since it will need 60 votes. I’m not sure that Schumer even has the full Democratic caucus, much less Republicans, who would either presumably say no and vote against it to continue prohibitionist policies or to vote for the Republican bill sponsored by Mace.
We talked about two of the bills; what is your opinion of Mace’s legislation?
She says she has bipartisan support. This would again have to come out of the House, though, and go into the Senate. As I said earlier, that’s a more difficult route given the way our legislative system works. That being said, it’s really hard to predict how the Mace bill will do because on the one hand, a lot of Democrats want to pass cannabis reform at almost any cost, including by voting for a Republican-sponsored bill. And so, here’s a bill sponsored by Republicans that may actually be able to get through because of presumptive Republican support and some Democratic members of Congress who will vote for it in order to legalize marijuana. All of this is to say that the Mace bill could have some traction simply because it’s sponsored by a Republican.
On the other hand, it’s not as comprehensive or thorough of a bill and doesn’t address a lot of issues that Democrats want. And then also, it’s sort of … a pride issue … for the Republicans to sponsor and pass a cannabis bill, which forever has always been a Democratic issue. I think that would be a pretty hard pill for the Democrats to swallow.
If we really look at the Mace and the Schumer/Booker Senate bills, the more that the MORE Act seems DOA [dead on arrival]. The Schumer/Booker bill is probably unlikely to pass as it stands as well. It will probably get blocked by Senate Republicans.
If you were writing the legislation, what would Rod Kight’s bill look like?
Credit: Poylock19
The most straightforward thing to do would be to just, literally, have a very, very short bill that simply removed all forms of cannabis from the Controlled Substances Act altogether. Done deal, and then it’s up to the states to regulate it, which is de facto happening now anyway. Under that scenario, it would be regulated in a similar manner to other products, such as alcohol, tobacco, kratom, etc., that are typically regulated by the states. And then the FDA [U.S. Food and Drug Administration] and other federal agencies would regulate to the extent that the various products that flow from cannabis fall within their respective jurisdictions.
That being said, and as simple as that may sound, it’s unlikely to happen. “Cannabis” comes loaded with meaning these days, from financial gain to personal liberty to health to tax benefits to social and racial equity, etc. So any cannabis law will ultimately incorporate some, and perhaps all, of these cannabis-related issues and more. So there is ultimately an opportunity for each of the different parties and many interest groups to get something that they want. Democrats want social equity, they want racial equity, they want expungement, all of which are really important and speak to a bigger set of values related to cannabis so that when it is finally legalized, we’re not just allowing big corporate interest to come in and scoop this whole thing up after prosecuting people for almost 100 years, primarily people of color. This is a major concern in a controversial medical marijuana bill in my home state of North Carolina.
On the other hand, the Republicans tend to focus more on making this thing really work for business.
For my part, and given both the history and the current state of affairs with cannabis, I favor a bill that fully removes it from the Controlled Substances Act and also addresses social and racial equity while creating a place for small businesses to thrive.
If you had a crystal ball, will a federal legalization bill pass this year? Next year?
I don’t see any advancement this year. I think the best we can hope for is some banking and potentially some tax reform as those things relate to marijuana. I don’t see any kind of legalization at the federal level. As far as when we can expect to see it, I think, at the very best, it would be next year. However, I’m starting to kind of get my head around the fact that the best opportunity is probably in a post-Biden administration setting. Biden is simply not a supporter. I think without strong support and even leadership from the executive side, [it’s] ultimately difficult to get anything through of this magnitude.
What kind of social and economic benefits would legalization bring, such as taxes, fewer people in prison, etc.? Could more money go to treating the addiction of harder drugs?
I don’t have any specific numbers, but I will say that this reform is not only good for the physical and mental health of American citizens but also for the fiscal health of the country. Taxing the products and using those taxes to fund socially beneficial programs, including expungement of marijuana convictions, while also lowering the prison population will be huge. Of course, adding an entire new industry to the market will have a huge financial impact. Finally, liberating cannabis for use by people instead of medicating with pharmaceuticals will also help. With respect to addiction and mental health opportunities, I think cannabis can play an enormous role. I think that it could help reestablish the U.S. as a leader in the world economy as well. We’re seeing Latin America beginning to legalize; we’re seeing Germany and Spain making moves to legalize. And so, if the United States gets out ahead of that slightly, then I think the U.S. retains control of what promises to be a huge sector of the economy, whereas if we allow Europe to take the lead on this, then it will be impossible for the U.S. to recover. I don’t think the U.S. could ever really gain it back.
What about on a state level—is legalization becoming more active?
Credit: Adobe
As it stands, the states continue to be the place where all the action is happening. It’s really fundamentally important to pay attention to all the various bills regarding cannabis across the board. You know, recreational marijuana, medical marijuana, hemp, hemp derivatives, all those types of things. Watch what’s happening at the state level. I think that’s really where we’re seeing some essential changes.
Will we eventually see all 50 states with legal marijuana?
I think it is unlikely but possible that we could have some form of legal marijuana in all 50 states while it is still illegal at the federal level. This would be unprecedented. In fact, it’s probably unprecedented where we are at right now. What other issue in the history of the U.S. has been like this, where you have more than a majority, maybe even a supermajority of states that have legalized something that the feds deem to be illegal or vice versa?
Just to take things to another perspective, consider that now with respect to hemp derivatives—you have THC that’s being lawfully marketed throughout the country, and in most states, it’s legal. At what point do we even really—from a policy level, not necessarily a statutory definitional level—just consider that cannabis is, in fact, lawful throughout most of the U.S. in the sense that there are all of the active compounds in marijuana, including THC, being marketed throughout the country legally through hemp. At what point do we just say cannabis is legal in this country, either de facto or otherwise?
Times are changing. You had marijuana, which was considered the “THC world.” And then you had hemp, which was considered to be the “CBD world.” Those worlds have blended. You have interesting things that the states are doing. Ultimately, what’s happening is [that] the overall tide of cannabis legalization is continuing to move forward. We may see a situation where almost every state has legalization of marijuana. Yet, marijuana is still, quote, unquote, illegal at the federal level. That’ll be a very strange state of events, but that’s how it could play out.
Last question: Is there unity between the hemp and marijuana producers? Unlike other industries, are the segments banding together to fight potential regulations?
No, I think there’s unfortunately a lot of dissension. I think there’s dissension between the marijuana industry and the hemp industry and within each of those sectors of the industry. Then I think at the level of the farmers, the farmers are the front lines, and they’re the ones that really are often not heard. They’re the ones that struggle with massive price fluctuations and the bottom dropping out and then the mass demands. Then they ramp up for demand, and then it goes away. The farmers may be the most important factor in this equation.
A growing number of countries are considering embracing legalized marijuana to boost their economies.
By Timothy S. Donahue
Marijuana is a moneymaker. To help combat slowing economies caused by the Covid-19 pandemic, many countries are considering legalizing marijuana. Currently, only Canada, Georgia, Mexico, South Africa and Uruguay, plus 18 U.S. states, two U.S. territories, the District of Columbia and the Australian Capital Territory in Australia have some form of legal marijuana. More recently, Germany, Luxembourg, Costa Rica and the U.S. are working to legalize marijuana on a national level.
In November, the leaders of Germany’s incoming governing parties announced that they had reached a formal agreement to legalize recreational marijuana and “promote broader drug policy harm reduction measures” when they take power. “We are introducing the controlled supply of cannabis to adults for consumption in licensed stores,” the parties said in a 118-page agreement. “This controls the quality [of marijuana], prevents the transfer of contaminated substances and guarantees the protection of minors.”
Currently, the personal possession of marijuana is decriminalized in Germany, and there is a medical cannabis program for residents. However, this proposal seeks to establish a regulated market for adult-use marijuana. The joint government will also review the social impact of legalization four years after implementation, according to the agreement.
“When it comes to alcohol and nicotine prevention, we rely on increased education with a special focus on children, adolescents and pregnant women,” the agreement states. “We are tightening the regulations for marketing and sponsoring for alcohol, nicotine and cannabis. We constantly measure regulations against new scientific findings and use them to align health protection measures.”
Competing with Germany to be first to legalize in Europe is its neighbor Luxembourg. The country’s ministers of justice and homeland security in October unveiled a legalization proposal, which will still require a vote in Parliament but is expected to pass, according to Marijuana Moment. Luxembourg’s rules focus on legalization within a home setting. Parliament is expected to vote on the proposal in early 2022, and the ruling parties are friendly to the reform.
In Mexico, medicinal use of cannabis products became legal in June 2021. World-renowned cannabis attorney Rod Kight says that Mexico is moving along rapidly in the implementation and understanding of the new rules, though a bit chaotically. He said that he expects to see more movement on marijuana laws in the country during its next legislative session.
“Medical cannabis is lawful in Mexico, and regulations were published earlier this year,” he said. “With respect to adult-use cannabis, the Supreme Court ruled that laws prohibiting the personal use and consumption of cannabis are unconstitutional. However, it remains unlawful to engage in commercial cannabis transactions. We anticipate that an adult-use bill will be passed in 2022.”
A top Mexican senator says that there’s agreement among key legislative leaders of multiple parties to prioritize marijuana legalization legislation this session, according to Marijuana Moment. Senate Majority Leader Ricardo Monreal Avila of the ruling MORENA party made the comments following a meeting of the Political Coordination Board. He said that the panel “agreed to prioritize cannabis laws” among other issues like cybersecurity, according to a translation.
During a recent trip to Costa Rica, Vapor Voice visited several stores that sold marijuana components, such as pipes and grinders, but no one was selling the product itself. This is because the rules in Costa Rica are confusing. While technically marijuana is illegal, there are no statutory penalties for the possession and use of marijuana. Selling marijuana, however, is illegal and punishable by up to 10 years in prison and/or fines.
To help combat this confusion and truly embrace the growing number of global marijuana tourists, like Mexico, Costa Rica is considering legalizing recreational marijuana. This would allow marijuana to be purchased in stores and allow the country to tax the product. Last year, Costa Rica’s Congress approved the legalization of marijuana for medicinal purposes despite opposition from conservative groups and President Carlos Alvarado.
Instead of taking up the required second debate, lawmakers sent the bill to the Constitutional Chamber of the Supreme Court for legal review, similar to the route Mexico took toward legalization as well. The second debate is expected early next year and would still require a signature from Alvarado.
The Costa Rican law only allows for the production and processing of cannabis but does not regulate its recreational use. However, the vote represents the most concrete action Costa Rica has taken toward legalizing cannabis products while noting the “significant economic potential” of legalizing the sale of cannabis. “It is a market of billions of dollars, and Costa Rica could be part of it,” said lawmaker Zoila Rosa Volio, who introduced the bill. He said Costa Rica was in a prime position to reap the “benefits of growing and exporting hemp and marijuana plants.”
Kight said that the developments in Costa Rica are encouraging. The approved bill authorizes the production, industrialization and commercialization of medicinal cannabis and hemp. “Under the bill, low-THC hemp and nonintoxicating hemp products are lawful generally, and high-THC cannabis will be approved for medical use,” Kight explains. “President Carlos Alvarado approves of hemp but is an opponent of high-THC cannabis. His office controls the legislative agenda, which means that a final vote on the law may not occur in the short term.”
In the United States, federal regulation of marijuana has been introduced numerous times and always failed. As more states legalize marijuana, however, the federal government is under pressure to decriminalize marijuana and remove it from its listing as a Schedule I drug, which are considered “substances or chemicals [that] are defined as drugs with no currently accepted medical use and a high potential for abuse.” While a large swath of the U.S. has legalized marijuana, it is still a highly debated argument at the federal level.
The most recent attempt to decriminalize marijuana is the States Reform Act, which would deschedule, regulate and tax cannabis products with a novel federal excise tax design—based on quantities and predefined categories, not dissimilar from how the federal government taxes alcohol and tobacco.
Introduced by Representative Nancy Mace, the bill would impose a tax of 3 percent on the removal price (cost when leaving the manufacturer or a bonded warehouse) of cannabis products. That’s significantly lower than the rates suggested in the other bills introduced this year to deschedule and tax cannabis: the MORE Act (8 percent rate) and the Cannabis Administration and Opportunity Act (CAOA, 25 percent rate), according to Ulrik Boesen, an analyst with the Tax Foundation.
“Arguably, the biggest impact on existing cannabis businesses would not be a new federal tax. Today, due to its Schedule I status, cannabis products cannot cross state borders, and as a result, all products must be grown, processed, sold and consumed within state borders,” states Boesen. “Descheduling would create a national market where products grown in Oregon can be processed in Colorado and sold in New York. This would revolutionize markets in states, which, given the federal prohibition, are currently able to discriminate against interstate commerce. Descheduling would mean that state laws can no longer do so as it would violate the Dormant Commerce Clause of the U.S. Constitution.”
Mace’s bill establishes six taxable categories and instructs that the secretary of the treasury can create more if needed:
cannabis flower (454 grams);
cannabis pre-rolls (100 grams);
cannabis extracts (20 grams);
cannabis vape cartridges (10 grams);
edibles (20 units); and
topicals and cosmetic products (20 units).
In a blog post, Boesen states that the creation of categories avoids some larger issues associated with price-based taxation as it guarantees that comparable products are taxed at the same rate regardless of price. “Under a pure price-based tax design, an expensive THC-containing chocolate bar would be taxed at a higher rate than a cheap THC-containing chocolate bar—even if they contain the exact same amount and quality of THC,” he writes. “Taxing the value of the product is not an excise tax’s job—capturing value should be left to sales and income taxes.”
Michelle Minton, a senior fellow at the Competitive Enterprise Institute, said that while it certainly has room for improvement, Mace’s bill is a solid starting point for “truly bipartisan legislation” that could finally end America’s prohibition of marijuana products. The MORE Act, introduced in House in May by Rep. Jerrold Nadler, would also decriminalize marijuana.
Specifically, the MORE Act also removes marijuana from the list of scheduled substances under the Controlled Substances Act and eliminates criminal penalties for an individual who manufactures, distributes or possesses marijuana. However, Minton says that Mace’s bill, unlike the MORE Act, would set a national minimum age for cannabis purchasing at 21.
“This would be enforced in the same way as the national minimum age for buying alcohol: by withholding federal transportation funds to states with a lower minimum age than the federal standard,” she writes in a blog post. “However, Mace’s proposal includes an exemption for states that allow minors to access medicinal cannabis for therapeutic purposes. The SRA bill would also grandfather in state medical cannabis products, allowing them to be sold in interstate commerce without prior federal approval.”
The dangling carrot for countries seeking to legalize marijuana is the amount of potential tax revenue the sales of marijuana can bring. For example, sales of marijuana in Colorado, one of the first U.S. states to legalize recreational marijuana, has resulted in buoyant tax revenues, according to media reports. In 2019, Colorado collected more than $302 million in taxes and fees on medical and recreational marijuana. Sales in the state totaled over $1.7 billion.
Nationwide, marijuana sales in the U.S. were $12.2 billion in 2019 and are projected to increase to $31.1 billion by 2024, according to a report from Arcview Market Research and BDS Analytics. Should marijuana become legal on a federal level, the benefits to the economy could be exceptional: A report from cannabis analytics company New Frontier suggests that federally legalizing marijuana could generate an additional $105.6 billion in aggregate federal tax revenue by 2025. It also predicts the impact of federally legal marijuana at the federal level could generate 1 million jobs by 2025.
Legalizing cannabis could bring Germany annual tax revenues and cost savings of about €4.7 billion ($5.34 billion) and create 27,000 new jobs, according to a survey by the Institute for Competition Economics at the Heinrich Heine University in Duesseldorf and commissioned by the German hemp association. The European market is projected to grow to €3.2 billion by 2025, up from €403 million at the end of 2021, according to the European Cannabis Report by the research firm Prohibition Partners.
Kight says legalization just makes sense. Whether in a large country like the U.S. or smaller countries such as Costa Rica and Mexico, the economic boost that legalized marijuana could bring is an economic gamechanger. “We seem to be at a tipping point for cannabis legalization, which appears inevitable in the U.S., most of Europe, much of Latin America and other parts of the world. The only real questions are when and what the various regulatory regimes will look like,” Kight says. “Countries that legislate quickly and thoughtfully should reap the benefits of increased tax revenue and lower crime rates.”
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.”
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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.”
The Hemp Industries Association (HIA) announced support for the legal position that Delta-8 THC, along with all other hemp-derived cannabinoids, were federally legalized by the 2018 Farm Bill. The group cites a legal opinion drafted by attorneys Rod Kight and Philip Snow of Kight Law.
Credit: Elsa Olofsson
“It is clear that the 2018 Farm Bill, which removed hemp from the Controlled Substances Registry, directed that hemp be regulated as an agricultural product, and defined hemp to include its cannabinoids and all tetrahydrocannabinols from hemp, is the governing law for the hemp industry,” the HIA states in a release. “History has shown that natural cannabinoid consumption does not present public health and safety risks like those from alcohol and tobacco, but researchers have only begun to explore the full range of potential hemp-extracted compounds and their various properties. What is needed is a regulatory framework for their production that prioritizes consumer safety while being grounded in science.”
The HIA states that prohibition is a failed concept. It only exacerbates the threat to consumers created by unregulated markets, and is antithetical to the spirit of free enterprise. The HIA wants state lawmakers to eschew ineffective bans in favor of partnering with the hemp industry to craft hemp policy that safely opens markets, fosters innovation, spurs investment, and creates valuable jobs.
The HIA calls on industry leaders to build consumer confidence and expand the market for hemp cannabinoids by adopting the highest quality and potency testing standards for Delta-8 THC and similar minor cannabinoids, by marketing those products responsibly through use of transparent and detailed labeling, including potency data and warnings against consumption by minors.
“Businesses, farmers, and consumers all deserve regulations that support the exploration of the hemp plant’s full potential. This isn’t just about one minor cannabinoid —the list is over a hundred already and growing,” said Jody McGinness, HIA’s Executive Director “Fortunately, the industry has all the expertise legislators could need, and those manufacturing leaders and scientists are engaged and ready to help create productive policy solutions.”
The HIA’s Cannabinoids Council, a newly-formed member body focused on national priorities distinct to the cannabinoids sector of the hemp industry, has identified safe market expansion as a core focus for its early efforts. The stance on Delta-8 THC and other hemp-derived cannabinoids is in line with the HIA’s history of vigorously defending the legality of all hemp products, and supporting the growth of industries utilizing all parts of the hemp plant, according to the release.
The group, a trade association composed primarily of businesses and farms in the hemp industry, is currently engaged in two lawsuits in response to the DEA’s Interim Final Rule on the 2018 Farm Bill that was issued in August of 2020, creating a threat to extractors and manufacturers of hemp cannabinoids. This is the fourth time the association has gone to court to protect hemp since forming in 1994.
