Delta Blues: ADA Backed Bill Could Have Profound Influence On Hemp Derived Products and Business

click to enlarge COURTESY OF WALLPAPERUP.COM
Courtesy of wallpaperup.com

While prohibitionists’ hair is on fire about most aspects of the cannabis industry, a regulatory struggle is brewing about hemp-derived Delta 8 and when the smoke clears, some producers in the state might be forced to alter their business models.

SB1715 would ban “hemp-derived manufactured psychotropic cannabinoids,” including Delta-8, which has become a popular, unregulated medicinal alternative for patients who need large doses to get through the day, but need to be able to function without a heavy buzz.

The cannabinoid is closely related to Delta-9, which is generally what’s referred to when we think of THC in cannabis. Delta-8 is purported to be 55% to 75% as potent and has become available from unregulated outlets throughout the U.S—think CBD stores and quick marts.

While cannabis is one of the most regulated substances in the U.S., hemp containing less than .03% THC has been removed from the federal definition of marijuana through the 2018 Agriculture Improvement Act, which has left the door open for a proliferation of hemp products.

Claire Levenberg, director of development at Downtown Dispensary, explains that hemp contains minute amounts of the Delta-8 cannabinoid compared to what is contained in cannabis, largely achieved through selective breeding by humans.

“Based on what we’ve artificially selected for between the two species, hemp has shifted differently than medical cannabis,” she said. “I like to compare it to broccoli and Brussels sprouts: It’s the same plant but because it’s been artificially selected for (by humans) again and again and again, you have something that looks completely different, but it’s still the same species.”

The science behind it is complex—Delta-8 differs in structure from Delta-9 THC in the placement of a double bond between carbon atoms 8 and 9 rather than carbon atoms 9 and 10, for our chemistry-minded readers—but the message for those in favor of banning hemp-derived Delta-8 is simple: It should be regulated out of existence.

Up until now, Delta-8 has existed in a gray area between CBD and marijuana and has been available outside of the regulated market. But that may be about to change, as regulators take a closer look and dispensary owners seek clarification in the laws surrounding cannabis products.

“When we went to the voters in 2010 and 2020, we signed a social contract that said the marijuana consumed in Arizona would be produced from marijuana cultivated and manufactured in Arizona,” said Arizona Dispensary Association director Sam Richard. “What has happened is many unscrupulous operators are exploiting perceived loopholes in the 2018 Farm Bill to process hemp and, through very dangerous and potentially harmful chemical compounding and processing, are creating bio-identical forms of THC.”

The ADA has joined the U.S. Cannabis Council to fight what is described as “a rapidly expanding crisis” surrounding Delta-8.

While Delta-8 can be derived from hemp, it can also be manufactured from Delta-9 THC, but that requires access to locally grown marijuana at greater cost to producers.

The only way to access the quantities of raw material needed for the process is to legally grow cannabis, have a relationship with certified growers within the state or obtain sufficient amounts of hemp, which is generally imported from outside the state.

“I would say that 95% of the hemp that is converted into psychotropic substances in Arizona isn’t even grown in Arizona,” Richard said. “It’s coming from Kentucky, it’s coming from Puerto Rico, it’s coming from Belize, because it’s very affordable to grow hemp.”

According to the American Society for Testing and Materials (ASTM International), the synthetic cannabinoid market is expected to be a $10 billion industry by 2025. Since the market is unregulated, the legality and safety of products is
questionable.

Hemp-derived Delta-8 has no testing requirements like those associated with the regulated cannabis market, and there is no product tracking as there is with legal cannabis. But now that it has become so popular, there is increased scrutiny and many states are attempting to enact similar bans.

In August 2020, the DEA determined that hemp-derived THC products were not legalized by the 2018 Farm Bill, according to the USCC. Most state regulators are taking a hands-off approach until there is either more specific guidance from the feds or legislation at the state level.

Sam Solsburg, co-founder of Delta 8 Oils in Camp Verde, said his hemp-derived product serves a significant segment of medical marijuana patients, from veterans with PTSD to those suffering with various debilitating illnesses. He also works with naturopathic doctors to help get his product to a wider patient base.

Solsburg believes SB1715 is an attempt by the cannabis industry to freeze out companies like his, despite his company’s manufacturing
standards.

“What this is really all about, in our opinion, is the marijuana industry wanting to close the loop,” Solsburg said. “Get us out of their system, ultimately, and keep the profits internal.”

Solsburg said that his products are rigorously tested and he has had good relations with his distributors until recently, when word of the bill started getting out.

He also believes the bill is going to send customers and manufacturers to the black market.

“It’s a blanket prohibition that is going to hurt more than it helps,” he said. “It doesn’t help them eradicate illegal Delta-8, it just removes the legal and safe option from the market.”

Should the bill pass and Solsburg has to switch from hemp to marijuana to make his product, his costs would go up substantially. That is, even if he could find a source of legal cannabis, which is not likely given the self-contained Arizona market.

Solsburg is advocating for a carveout for businesses like his, but can only watch as the process plays out.

Richard says the ADA’s support of SB1715 is not about a competitive advantage for the established cannabis market, but about leveling the playing field for everyone.

“We don’t think we’re forging new ground here, what we are doing is clarifying our understanding of current federal law at the state level to provide clarity to the marketplace,” Richard said. “Right now, we have operators not understanding what they can and can’t buy, but it has always been our contention that the conversion of hemp is not legal.”

SB1715 was sponsored by Sen. David Gowan and co-sponsored by Sens. Sonny Borelli (R-LD5) and Rebecca Rios (D-LD27). There has been no recent action since the bill was
introduced. 

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