This article is authored by attorney, Ashley Simpson.

A recent trend in cannabis consumer products is testing the boundaries of the Agriculture Improvement Act of 2018 — the 2018 Farm Bill.
The 2018 Farm Bill removed hemp and hemp-derived cannabinoids from the Controlled Substances Act (“CSA”) entirely. Notably, it does not carve out specific cannabinoids which are exempted from this change. Because of this, some argue that any cannabinoid — so long as it is derived from “hemp” as defined under federal law — is effectively lawful.

Hemp and Interpretation of the Law

This interpretation has led to a flurry of new consumer products promoting particular cannabinoids, like cannabinol (“CBN”) and including variants of delta-9-tetrahydrocannabinol (“THC”) and delta-8-THC with manufacturers claiming that their products are legal pursuant to the 2018 Farm Bill.

Though proponents of this interpretation can cite to supportive statements — including those given by the United States Department of Agriculture (“USDA”) itself — it is an untested position and largely unchartered territory in an industry that is still yet to establish clear-cut commercial guidelines for hemp-derived cannabidiol (“CBD”) despite the popularity of CBD consumer products over recent years.

However, the Drug Enforcement Administration (“DEA”) recently issued its interim final rule (“IFR”) in which the DEA attempts to claw back control over intermediate hemp products, primarily extracts. During the extraction process, intermediate hemp products may test higher than 0.3% THC. However, as the 2018 Farm Bill provides, THC content is measured on a dry-weight basis. As a result, regulatory tension exists between the DEA’s IFR and the 2018 Farm Bill.

To complicate matters further, the DEA’s IFR categorizes all synthetic cannabinoids, such as synthetic delta-8-THC produced from hemp-derived cannabinoids, as a controlled substance; however, the DEA’s IFR, as well as federal law entirely, fails to define “synthetic.” In absence of the definition of “synthetic,” it is profoundly difficult for manufacturers to identify the regulatory boundaries. This is not the first time “synthetic” was failed to be defined; however, as the court in Hemp Industries Association (HIA) v. DEA also failed to define “synthetic.”

FDA Reatins the Authority To Regulate Consumer Goods Containing Hemp

Companies operating under this legal interpretation should also be aware that the Food and Drug Administration (“FDA”) retains the authority to regulate consumer goods containing hemp and hemp-derived products. For its part, the FDA has implied that it will treat hemp-derived THC as if it is marijuana-derived THC. At a minimum, FDA can be expected to treat all hemp-derived cannabinoids like it does CBD. Where a particular cannabinoid — like THC — may present increased psychoactive effects or other similar concerns, there may also likely be added regulatory scrutiny.

Hemp Production is State Regulated

Additionally, because hemp production is state-regulated, any commercial activity surrounding hemp-derived cannabinoids must take into account the varying jurisdictional concerns and requirements. In particular, this oversight includes regulatory standards that govern labeling, packaging, and product safety. Unfortunately, this has created a patchwork of regulations that varies from state to state until the FDA issues uniform regulations to govern these products.

Ultimately, whether federal and state regulators will agree with the legal interpretation supporting this recent trend in cannabis consumer products remains to be seen. But, as with CBD, even if a particular hemp-derived cannabinoid is not deemed a controlled substance, this does not mean it can be distributed freely in consumer products without concern for the governing federal and state guidelines.

As always, in the evolving cannabis regulatory climate, businesses should proceed with caution. The magnitude of the challenges the manufacturers will face because of the DEA’s IFR is unclear at this time. Although the DEA’s IFR is effective immediately, stakeholders may submit comments to the public docket by October 20, 2020. Companies with legal questions concerning their hemp business plans should consult with a legal professional. The Hoban Law Group is here to help you with your unique needs; please call us to schedule your consultation.