Cannabis Musings - May 17, 2023
The DEA *really* doesn't like hemp-derived cannabinoids.
Friends – just a quick note on a favorite topic, hemp-derived cannabinoids. We’ve talked before about the fate of hemp-derived Delta-8 and Delta-9 THC, and as long-time readers know, I’m a skeptic about the legal argument for its legality, as well as the long-term viability of that argument. The Ninth Circuit Federal Court of Appeals’ decision in AK Futures last year didn’t help my admittedly minority position that the 2018 Farm Bill didn’t inadvertently permit all of these products (not legal advice), but I recognize that I’m usually just a nudnik anyway.
In the latest twist in the hemp-derived THC saga, it’s being reported that the Drug Enforcement Agency is developing rulemaking to make it clear that, in the eyes of the DEA, hemp-derived THC cannabinoids are indeed a controlled substance. The DEA is apparently even considering a 0.1% THC concentration on a weight-to-weight or weight-to-volume basis, which seems to fly in the face of the AK Futures-derived threshold of 0.3% of the total product weight (which I thought was itself a misread of the 2018 Farm Bill, but then again, I’m not a federal appellate court judge), let alone a diminishing number of state laws allowing (or, at least, not prohibiting) these products.
I first read Vincente LLP’s post on this potential development last week on LinkedIn, to which I posited whether this was the DEA’s way of letting Congress know the DEA’s position (as if anyone had to speculate about that) ahead of the upcoming negotiations of the 2023 Farm Bill. In other words, perhaps the DEA is saying that, if Congress doesn’t address the hemp-derived cannabinoid “loophole” from the 2018 Farm Bill, the DEA is going to take action into its own hands (and not make the same mistake as the FDA) through rulemaking.
It appears that my head may be in the right place for once. Marijuana Moment’s piece on this development cites Shawn Hauser, Esq. (no relation), a Partner at Vincente, as saying that this is “essentially part of the agency’s outreach for input as they prepare the final rule.”
Combine this with the letter sent by the Cannabis Regulators Association last month urging Congress to take action on the hemp-derived cannabinoid meshugas and you’ve got yourself a movement.
Be seeing you!
Hauser Advisory provides advice and strategy on business lifecycle events and cannabis industry navigation, tapping into a deep, national network and twenty-five years of dealmaking and capital markets experience.
© 2023 Marc Hauser and Hauser Advisory. None of the foregoing is legal, investment, or any other sort of advice, and it may not be relied upon in any manner, shape, or form.