This week’s Tap Root is the first in our latest series examining the NYS Department of Health’s (DOH) updated cannabinoid hemp regulations, wherein we look at issues of key concern in this novel regulatory framework governing the Empire State’s hemp industry.
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NY's Revised Hemp Regulations
Delta-8 THC, which quickly went from the hottest THC-alternative to the target of state-wide bans in states with and without legal cannabis markets, has been a main theme of the New York Department of Health’s updated hemp regulations. The regulations explicitly ban Delta-8, Delta-10, and other THC isomers. But why was this done, and was it necessary?
The list of states instituting bans grows by the week. Last week, Michigan began a legislative initiative to ban the substance, following Colorado earlier this month and Vermont in April. The states that currently ban Delta-8 THC entirely include Alaska, Arkansas, Arizona, Colorado, Delaware, Idaho, Iowa, Mississippi, Montana, Rhode Island, Utah, and now New York and Michigan.
Regulators’ anxiety around Delta-8 and other isomers is understandable as the compound produces a mild high comparable to Delta-9 THC—the traditional psychoactive compound in marijuana— but how did the national hemp industry, and New York, get to this point?
Federally, the laws around Delta-8 are contradictory, forcing businesses to choose which side of the law they want to end up on. Reading the 2018 Farm Bill, one would think Delta-8 should be legal, as it is a derivative of hemp. This is a reading some businesses go along with, especially those banking their fortunes on Delta-8.
Yet DEA has stated that Delta-8 THC is a controlled substance because it is a synthetic extract, and has baked this reading into its Interim Final Rule. Natural Delta-8 only exists naturally in extremely small quantities, so it must be drawn out through a method known as isomerization, which without going into details is the synthetic conversion of CBD to THC. While industry stakeholders and lawyers are adamant that this does not make Delta-8 illegal, chemists state concretely that this process makes Delta-8 a chemical, synthetic substance, as DEA states.
Probably most importantly, Delta-8 is inebriating in a fashion comparable to Delta-9 THC. Unlike CBD, which has very few effects of this nature, Delta-8’s inebriating capacity draws DEA’s attention. Due to all these reasons, a hemp company producing or selling Delta-8 without a permit to produce or sell THC as a controlled substance run the risk of sanctions from FDA, FTC, USDA, EPA, in addition to enforcement from DEA and state law enforcement.
Let’s take a brief look at Colorado and Vermont to see their exact reasoning for banning the sale of Delta-8, and if it goes beyond the reasoning laid out above.
Colorado’s Marijuana Enforcement Division cited safety concerns regarding Delta-8 and Delta-10 as the reason to ban these isomers. This is surely related to not only the process but also the potential inebriating effects, as hemp was legalized under the Farm Bill in part because it was not inebriating.
The Vermont Agency of Agriculture, Farms and Markets contextualized its position on Delta-8 by referring to the potential for intoxication, pointing to the fact that “manufacturing Delta-8-THC from CBD has become a way to create a psychoactive substance under the guise of being derived from legally produced hemp, which by definition does not have high concentrations of psychoactive cannabinoids.”
Before last week, New York state hemp extract regulations had preserved Delta-8’s status as a legal commercial cannabinoid. Now, with updated hemp regulations, the Department of Health has stated explicitly that hemp products may not “contain synthetic cannabinoids, or cannabinoids created through isomerization, including delta-8 tetrahydrocannabinol and delta-10 tetrahydrocannabinol.” In addition, from banning cannabinoid-hemp licensees from manufacturing and processing Delta-8 and other isomers, it banned the sale of said substances in licensed cannabinoid hemp retail establishments, theoretically limiting their sale to adult-use retail dispensaries and killing the current market. That said, the legal and regulatory structure of New York’s newly legal cannabis market means that Delta-8's ban was inevitable.
Delta-8's ban also highlights other inconsistencies with the structure and intent of New York’s nascent legal market.
Selling Delta-8 should be allowed in a regulated, legal adult-use market, however the definition of “cannabis” under the MRTA undermines this logical conclusion. Marielle Weintraub, president of the third-party product certification body U.S. Hemp Authority, advised that businesses avoid selling Delta-8 “without a permit to produce or sell THC as a controlled substance.” This would mean hypothetically there should not be anything preventing adult-use processors from making Delta-8 THC and selling in retail dispensaries. However, under MRTA, adult-use cannabis processors are only allowed to process adult use cannabis, the definition of which in the new law explicitly excludes hemp, making it is unclear whether adult-use processors will be permitted to process isomeric, hemp-derived THC if their license only permits the processing of “cannabis,” as defined by the MRTA. Even though the MRTA already had Delta-8 in the definition of THC (which would should have shielded it legally in the sense Weintraub refers to), and that adult-use retail dispensaries were meant to sell cannabinoid hemp products (such as this one, which is why it was defined as THC!), this crucial definitional detail potentially alters the whole situation. New York regulations cornered regulators and prevented a workaround, in the face of threatening oversight by DEA and pressure from the waves of other states banning Delta-8.
This highlights an inconsistency in the overall structure – why are adult-use processors potentially barred from processing hemp-derived isomers if cannabinoid hemp licensees are also barred from processing such substances? The need for separating adult-use and cannabinoid hemp licensing schemes is clear as the chemical structures and effects of adult-use cannabis and cannabinoid hemp are generally quite different. However, excluding hemp from the definition of cannabis under the MRTA on top of banning Delta-8, Delta-10 and other isomers under the cannabinoid hemp regulations potentially kills the possibility of processing or selling such products in the state at all. It is this one small hitch that prevents New York from having what could be a flourishing, well-regulated Delta-8 THC market.
The hopes for changing this are slim, for the moment. Even the Cannabis Control Board taking over cannabinoid hemp regulatory authority six months after it is fully appointed, regulatorily, cannabinoid hemp and adult-use cannabis will likely continue to be separated. Also, the CCB as a regulatory body, does not have the power to affect the language of the law created by the MRTA, which would need to be done through legislation. Amending the MRTA through legislative means does not look like a real possibility this year as the legislative session is coming to a close June 10 and thus chances of amending the statute are slim to none.