This article by Robert Hoban was originally published on Forbes and appears here with permission.
On May 14th, the Colorado Marijuana Enforcement Division and the Colorado Department of Public Health and Environment banned the sale of products containing Delta-8 tetrahydrocannabinol (Delta-8 THC). Over the last year, sales of this hemp-derived cannabinoid exploded, helping American farmers move otherwise stationary biomass off their fields. A number of states, including Michigan, New York, and Oregon, followed Colorado’s lead, enacting bans in the ensuing weeks.
While Delta-8 THC is not specifically listed as a controlled substance, many have argued over its ambiguity. The guidance from Colorado regulators aims to curb the use of hemp-derived cannabinoids, such as CBD, to convert or synthesize into other cannabinoids. This is particularly true for cannabinoids similar in molecular structure to Delta-9 THC, the psychoactive cannabinoid specifically listed as a Controlled Substance, and what legally distinguishes industrial hemp from marijuana in the U.S.
Despite being almost chemically identical, Delta-8 THC exists in a regulatory loophole, and by many accounts provides a mildly psychoactive effect. Whether it be gummies, joints, or vape pens, Delta-8 THC products have flown off the shelves, sales more than doubling in the past year. This has been especially true in jurisdictions with legal adult-use marijuana.
Keep in mind, this is all unfolding as the Food and Drug Administration’s (FDA) process for evaluating cannabinoids continues to unfold at a glacial pace. When asked about Delta-8 THC, the FDA advised contacting the Drug Enforcement Administration, effectively indicating their unwillingness to preside over jurisdiction of the cannabinoid. Recall too, in late 2020 the Drug Enforcement Administration issued an interim final rule for hemp stating that synthetically derived THC remained a Schedule I controlled substance.
As sales for Delta-8 THC began to take off, many in the hemp-derived cannabidiol industry saw that they could take CBD-rich biomass or CBD isolate and convert it to Delta-8 THC. In this process, one is not just extracting a compound from the plant. Rather, you're taking an extracted compound and synthetically converting it into another compound using a chemical process.
This presents an issue for regulators. If you're creating a new compound that doesn't exist in nature and doesn't come directly from a source in nature in a direct pathway, is it regulated? That’s for the FDA to decide, and given that they are still trying to wrap their heads around CBD, it seems unlikely we will see anything definitive from the agency regarding Delta-8 THC.
Another issue in play in the Delta-8 debacle is that widely available, intoxicating products in gas stations undercut the legal marijuana industry. The marijuana industry’s secret sauce is the ability to create a product intended to produce an intoxicating or psychoactive effect. Over the counter sales of Delta-8 THC products essentially compete with the marijuana industry, which has a lot of money and a lot to protect.
Beyond Delta-8 THC, the Colorado Marijuana Enforcement Division does not want any modified or synthetic THC derivatives from industrial hemp on dispensary shelves. While there’s surely a plethora of reasons for this, there are also valid concerns about product quality from hemp-derived compounds, including high concentrations of heavy metals, residual chemical pesticides, and the like.
While the rise and fall of Delta-8 THC certainly showcases a recent drama in the cannabis industry, perhaps this was all fairly predictable. After all, America and its farmers have always been celebrated for ingenuity. Over the last several years, farmers have grown hundreds of thousands of acres of industrial hemp for CBD extraction. And it's gone nowhere. In 2019, the CBD bubble burst, and folks who jumped in head first - from farmers to processors to product manufacturers - either had to pivot quickly or die. In the absence of a regulatory framework for hemp-derived cannabinoids, there are limited viable outlets to consistently sell product.
But this is America. Farmers and businesses were never just going to sit back and take this loss while waiting for the government to provide clarity. They found a market and figured out how to use those thousands of tons of American-grown hemp. The legalization of industrial hemp through the passage of the 2018 Farm Bill was predicated on the ability of this crop to stimulate the farming and rural community. This was supposed to be a glimmer of hope for a future that hasn’t looked particularly bright for the American agricultural industry.
When you consider the CBD market crash, paired with a global pandemic and everything in between, you can’t help but smile at the ability of Americans to make lemonade. In the wake of these Delta-8 bans, and as federal regulators continue to finalize a regulatory framework, I can’t help but think the creative innovation of this industry will uncover yet another opportunity to keep the dream alive.
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