Federal appeals court decision raises spirits of hemp operators

Hemp interests are celebrating a federal appeals court decision last week that challenges the U.S. Drug Enforcement Administration’s ban on synthetic cannabinoids.

Some cannabis attorneys believe the ruling affirms the legality of intoxicating hemp products not explicitly mentioned in the 2018 Farm Bill.

Others, however, are preaching caution among hemp operators, noting that:

• The U.S. Farm Bill clearly prohibits any final product with more than 0.3% THC by dry weight.
• The U.S. Fourth Circuit Court of Appeals did not find all hemp-derived products to be lawful.

Michael McQueeny, co-chair of law firm Foley Hoag’s cannabis practice, wrote in a blog post that the ruling does “not translate into (a) broader reading that all products derived from hemp are, therefore, lawful.”

Farm Bill and hemp in federal court

The Fourth Circuit ruling came in response to an employment dispute, in which a North Carolina woman challenged her termination for a positive drug test, arguing that the hemp-based products she admitted using were legal under the 2018 Farm Bill.

In response, her employer countered that she’d admitted to using THC-O, a synthetic cannabinoid that the DEA declared illegal in a widely circulated opinion letter.

In their decision, the Fourth Circuit rejected the DEA’s declaration that THC-O is illegal – since that and other novel cannabinoids aren’t mentioned in the law – in part relying on a recent Supreme Court decision that no longer requires courts to defer to agency interpretations.

However, the court did not find that THC-O products were necessarily legal; that decision ultimately hinges on delta-9 THC content, the court wrote.

Delta-9 THC, not THC-O

“The critical distinction that separates illegal marijuana and THC from legal hemp under both state and federal law is a product’s delta-9 THC concentration,” the court wrote, adding that the plaintiff never established the delta-9 THC content of the hemp-based products she was using.

“That the products were sold ‘over the counter’ in gas stations and stores around North Carolina is not itself evidence of their legality,” the court wrote.

“On the contrary, these products are notoriously difficult to regulate and often contain higher concentrations of THC than permitted by law (even if they advertise otherwise).”

In a blog post, North Carolina hemp attorney Rod Kight, whose inquiry to the DEA prompted the agency’s letter stating its position that THC-O is banned, opined that the court also overturned other DEA interpretations of the Farm Bill.

‘Bodes well for the hemp industry’

“This bodes well for the hemp industry,” Kight wrote. “In particular, it seems to be a win of sorts for the burgeoning market in THCA flower, which the DEA contends is illegal.”

THCA, or tetrahydrocannabinolic acid, is delta-9 THC’s biosynthetic precursor: Heat, such as an open flame, converts THCA into THC.

However, many states have passed laws that take THCA into account when defining total THC – and some have gone as far as to ban the sale of TCHA flower outside of regulated cannabis markets entirely.