Delta-8 THC Declared Legal by The Ninth Circuit
Following on heels of widespread sales federally-legal, hemp-derived CBD (cannabidiol) products, cannabis processors have begun to synthesize Delta-8 THC (tetrahydrocannabinol) -- a psychoactive cannabinoid -- from CBD at a massive scale. Yet even as consumers found Delta-8 products for sale at convenience stores, gas stations, vape shops, and online, Delta-8’s federal legality remained in question.
In a May 19, 2022 decision, the U.S. Court of Appeals for the Ninth Circuit held that the 2018 Farm Bill (which federally legalized hemp—cannabis with less than 0.3% Delta-9 THC) unambiguously legalized Delta-8 derived from hemp. AK Futures LLC, an e-cigarette and vaping products manufacturer, sued Boyd Street Distro, LLC for selling counterfeits of its “Cake”-branded Delta-8 products. Boyd unsuccessfully argued that AK Futures could not possibly have a Federal trademark priority because AK-Futures’ Delta-8 products were not federally legal. The Ninth Circuit disagreed, holding that hemp-derived Delta-8 THC is legal under the plain text of the 2018 Farm Bill, suggesting that the U.S. Drug Enforcement Agency (DEA) lacked authority to make a contrary determination and noting the DEA appeared to agree that Delta-8 THC was legal.
Delta-8 THC (tetrahydrocannabinol) is a cannabinoid that is a chemical analogue of (Delta-9) THC, the famous, psychoactive chemical in marijuana. Delta-8 is typically consumed via gummies or vape cartridges, is sometimes referred to as the “light beer” of THC, and is generally associated with a “sleepier” high. The compound is produced from hemp-derived CBD (cannabidiol), which became Federally legal under the 2018 Farm Bill. As Delta-8 is not derived from federally-illegal marijuana (i.e., cannabis with Delta-9 THC levels greater 0.3 % by weight), Delta-8 products are openly sold outside of cannabis dispensaries in states where marijuana sales are highly regulated—as well as in states where marijuana is still illegal. In other words, consumers can often find Delta-8 products for sale at convenience stores, gas stations, vape shops, and online.
While Delta-8 sales have been a boon to the CBD and CBD extraction industries, which saw prices sag as hemp-derived CBD flooded the market, many marijuana industry players have generally been frustrated with widespread Delta-8 sales. In states that have legalized marijuana, Delta-8 products escape the considerable tax and regulatory burdens growers, processors, and purveyors of “traditional” THC products face. This has substantially eroded prices for marijuana-derived goods in established state-legal marijuana markets like California. Beyond this, marijuana industry participants and advocates are quick to note that Delta-8 products may pose dangers to consumers because (i) they are almost entirely unregulated and (ii) the long-term health risks of human Delta-8 THC consumption are unknown—unlike the limited risks associated with Delta-9 THC, which has been studied for decades.
Until recently, there has been considerable debate as to whether Delta-8 products were federally legal. While the Ninth Circuit decision is welcome news to the CBD and Delta-8 THC industries, it is likely that the heavily regulated and taxed state-legal “marijuana” industries will make moves to try to level the playing field. One can expect lobbying for the inclusion of Delta-8 THC under state-level cannabis regulatory regimes—or its state-level prohibition, as well as pushes for the FDA to promulgate comprehensive Delta-8 regulations.
Beyond this, other federal law threats remain for the CBD and Delta-8 industries. Since 2020, the DEA has maintained an interim final rule that effectively requires hemp extracts to maintain Delta-9 THC levels below 0.3% at all stages of processing to remain federally legal. Hemp industry advocates have noted that industrial CBD extraction processes “go hot” by producing intermediate byproducts that exceed the Farm Bill’s 0.3% concentration threshold; they fear that this renders the CBD and derivative products (like Delta-8) federally illegal—even though the final, salable products are not “hot.” The DC Circuit has recently rejected the hemp industry’s challenges to these regulations, finding the DEA’s rule was merely intended to conform the 2018 Farm Bill with the Controlled Substances Act. Thus, at least for now, both the marijuana and hemp industries will continue to grow and operate in a slightly-less-gray legal framework.