Delta-8 THC-WebP

Novel cannabinoids, Don’t give up on market opportunities for minor cannabinoids(Editor’s note: This story is part of a recurring series of commentaries from professionals connected to the cannabis industry. Jennifer Gumer is an attorney and partner at CGL Law in Los Angeles.)

The inclusion of delta-8 THC in the U.S. Drug Enforcement Administration’s “orange book” of controlled substances in May 2021 left manufacturers, retailers, consumers and even attorneys scratching their heads.

With the delta-8 loophole seemingly closing, many are concerned about the door shutting on the potential market for many novel cannabinoids being explored.

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While the laws are undoubtedly complex, the legal landscape remains wide open for novel cannabinoid markets at the federal level – with an important caveat: Those cannabinoids cannot be intoxicating.

What sparked the delta-8 debate

Delta-8 THC is an intoxicating cannabinoid that can be manufactured using hemp-derived CBD.

It is generally considered by consumers to exist at the border between marijuana and hemp-based CBD, since it offers a mild high.

These properties also make it an interesting substance legally. The Farm Bill legalized hemp and its derivatives at the federal level.

Since delta-8 is a hemp derivative, there seemed to be a legal loophole with space for hemp-derived delta-8 to be legally sold by retailers across the U.S. in the same way CBD can be sold.

This position was challenged when the DEA included delta-8 THC in its “orange book.”

The DEA’s stance has been bolstered by quick action taken by state lawmakers, with delta-8 now being banned or restricted in 18 states and under review in four more. In those states, the position is clear.

In others, the waters are muddied since the DEA’s inclusion of delta-8 in its “orange book” doesn’t automatically make the substance illegal. Federal laws are currently silent on hemp-derived delta-8.

The debate sparked by the DEA attempting to close this apparent loophole has been fierce.

Many believe the DEA’s decision is wrong, including many attorneys who specialize in cannabis.

The argument these attorneys make is that hemp derivatives are legal and the DEA has overstepped in adding delta-8 THC to its list of controlled substances.

Others argue that the DEA is simply referring to cannabis-derived delta-8, since the Farm Bill legalized hemp-derived cannabinoids with a delta-9 THC concentration of 0.3% or less.

However, these arguments fail to take the “spirit of the law” in the Farm Bill into account.

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The Farm Bill likely intended to carve out nonintoxicating substances derived from hemp and make those legal.

It’s for this reason that there’s a cap on the amount of THC that can lawfully be left in hemp-derived products for them to fall under the Farm Bill legalization.

It seems clear that federal lawmakers intended to exclude intoxicating cannabinoids when they drafted the Farm Bill – and that intention is something the courts will consider if they are asked to interpret these laws.

But this doesn’t close the door on further business opportunities in the legal market carved out by the Farm Bill.

Space for other nonintoxicating cannabinoids

More than 100 other cannabinoids (beyond THC and CBD) have been identified.

The effects of the vast majority of the other cannabinoids on humans have not been explored.

Excitingly, any of the other hemp-derived cannabinoids that don’t offer an intoxicating high could ultimately generate a legal market in the US.

Some of these other cannabinoids have already started generating interest.

Cannabigerol, or CBG, is a nonintoxicating substance that’s attracting new interest among researchers and cultivators – as is cannabichromene (CBC).

Cannabinol, or CBN, is another legally interesting substance that’s drawing interest. It is intoxicating but only marginally.

It’s considered to be nonintoxicating, so it is less likely to attract the attention of the DEA if it were to be produced and sold commercially.

The industry should focus on exploring more of the hemp-derived cannabinoids to determine whether they:

  • Are nonintoxicating.
  • Hold potential to be commercialized.

Cannabinoids that meet these criteria are likely to be legal under the Farm Bill and are unlikely to draw the interest of the DEA. They, therefore, hold quite a lot of potential to expand the legal market.

In avoiding the DEA, don’t forget the FDA

One lesson the industry should take from the (now-closed) delta-8 loophole is to not forget about the U.S. Food and Drug Administration.

Retailers leapt wholeheartedly into the purportedly legal market for delta-8, adding it to supplements and food without regard for the required FDA applications.

Food and dietary supplements containing CBD won’t be approved by the FDA as a result of the drug-exclusion rule, which prevents the inclusion of active ingredients in approved drugs or drugs being tested in clinical trials from being added to food or dietary supplements.

Since CBD is an active ingredient in an approved drug, Epidiolex, CBD falls under the drug-exclusion rule.

Equally, products containing THC will also fail to receive FDA approval since it’s considered a controlled substance under federal law.

But there is space for FDA approval for cannabinoids that aren’t THC or CBD to be included in dietary supplements and/or food.

However, such substances aren’t permitted to be included in food or dietary supplements until they have gone through the relevant FDA processes for a required food additive petition – namely, attaining an evaluated GRAS (generally recognized as safe) for food products or “new dietary ingredient” notification for dietary supplements.

Obtaining the FDA’s approval to add these emerging cannabinoids gives legitimacy to the market while reducing the risk of enforcement.

The hemp industry is already worth billions and looks set to grow into the future.

There are plenty of opportunities for investors, retailers, cultivators, researchers and manufacturers to explore potential new hemp-derived products.

But, for now, while marijuana and THC remain federally illegal, it’s safer to exploit the market for nonpsychoactive cannabinoids.

Jennifer Gumer can be reached at jennifer@cgl-llp.com.

The previous installment of this series is available here.

To be considered for publication as a guest columnist, please submit your request to editorial@mjbizdaily.com with the subject line “Guest Column.”