Clearing the Air: Vicente Sederberg's Position on Intoxicating Hemp Products

By Shawn Hauser

May 17, 2022

Vicente Sederberg LLP has advocated for the sensible regulation and fair treatment of all forms of cannabis since the firm’s inception. For over a decade, we have represented and worked with businesses, trade groups, and advocates across the marijuana and hemp spaces to advance the two industries in a responsible, and dynamic manner that benefits consumers, fosters economic opportunity, and protects public health and safety.

Marijuana and hemp were making steady and significant progress on parallel tracks, but the recent emergence of “intoxicating hemp” products resulted in a collision that may hinder the pathway to federal legitimacy for both industries. These products, which are derived from hemp and contain significant levels of THC, the main psychoactive compound in cannabis, were not intended under current hemp laws. They raise significant public health and safety concerns, and they are damaging the credibility of the legal marijuana and hemp industries and jeopardizing their efforts to bring about further critical reforms.

The 2018 U.S. Farm Bill that legalized hemp under federal law was specifically written to legalize the non-psychoactive variety of the cannabis plant so that the U.S. could join most of the world’s other industrialized nations in producing the plant for a wide array of industrial uses (fabrics and textiles, paper, construction materials, sustainable alternatives to biofuels, personal care products, foods and beverages, dietary supplements, and other manufactured and industrial goods). Congress had no intention of creating a market for hemp-derived THC or other intoxicating consumer products.

The farm bill defined legal hemp as cannabis with less than 0.3% THC “on a dry weight basis,” and it gave the U.S. Department of Agriculture (USDA) the authority to regulate the production of hemp crops based on this legal standard. It also deliberately and expressly preserved the U.S. Food and Drug Administration’s (FDA) authority to regulate consumer products under the Federal Food, Drug, and Cosmetic Act, which includes the authority to determine the level of THC appropriate for a safe, finished good.

Nearly four years have passed since hemp was federally legalized, and the FDA still has not developed regulations for finished hemp products. Because the FDA has failed to act, regulation of this rapidly growing consumer market has been left to the states, where the 0.3% THC dry weight standard has been inappropriately applied to the weight of intermediary and finished products. This resulted in a flood of “hemp” products with significantly more THC than is allowed in state-legal marijuana stores, creating a glaring issue for businesses, consumers, and enforcement efforts.

This calculator illustrates the THC content in finished products using the 0.3% THC dry-weight measurement. The FDA has indicated that significant levels of THC are a public safety priority and basis for hemp products being unlawful. The agency also specifically noted this in recent consumer safety advisories regarding delta-8 THC, a psychoactive cannabinoid at the center of the intoxicating hemp-derived products market.

At this time, we believe the appropriate regulatory frameworks for these intoxicating hemp-derived products are state marijuana regimes, which are specifically designed around safety considerations for THC. For example, they include limits on serving and product size, packaging and labeling requirements, testing and manufacturing standards, and other regulations aimed at ensuring consumer safety where products contain an intoxicating compound.

Our firm and its consulting affiliate, VS Strategies, recently drew criticism from certain segments of the hemp industry for taking this position in Colorado, where legislation is being considered that would create regulatory guardrails on intoxicating hemp-derived products (SB22-205). Despite our firm having a significant hemp practice and a history of leadership on hemp policy in Colorado and nationwide, we were accused of protecting the marijuana industry at the expense of the hemp industry. More importantly, our genuine concerns about the detrimental impact of the “intoxicating hemp” market on the hemp industry were disregarded.

Vicente Sederberg has been at the forefront of hemp policy reform since 2012, when it played a critical role in drafting and campaigning for Amendment 64 in Colorado, which legalized and regulated hemp in addition to adult-use marijuana. Since then, we have fought to ensure hemp legalization is honored by federal and state agencies, including suing the DEA to defend the legality of intermediary hemp extracts and protect legal hemp from the agency’s overreach. I also testified to the FDA as to why it should treat hemp ingredients like other food and dietary supplements, arguing that CBD and many other hemp derivatives had the safety profile to be regulated as such.

Unfortunately, most of the intoxicating hemp-derived products popping up in Colorado and around the country do not meet this safety profile, and they are not likely to be considered legal ingredients in food and dietary supplements. As the FDA stated in its recent warning letters to delta-8 companies, the farm bill never intended for these intoxicating products to be part of the hemp market. This intent has also been acknowledged by most major hemp industry organizations and cannabis trade groups.

Placing intoxicating products in the appropriate regulatory regime as intended by law is not protectionism for the marijuana industry — it is responsible public health and safety policy.

For decades, hemp industry members and advocates have fought for legitimacy as a non-intoxicating variety of the cannabis plant with tens of thousands of beneficial uses for the environment and human and animal health. The increasing number of irresponsible actors sidestepping the law to create intoxicating products and avoid critical public safety standards is dramatically undermining those efforts and degrading the hemp industry’s credibility. This is why many of our clients and colleagues in the hemp industry agree it is time to reign them in.

We do not fault businesses for innovating in an evolving and complex regulatory framework where regulatory uncertainty has threatened the survival of the industry. But as we learn more about the cannabis plant and methods of using hemp to produce high-THC products, it is the responsibility of the entire cannabis industry — marijuana and hemp — to ensure such products are properly categorized and appropriately regulated to ensure public safety.

Regulatory certainty is vital to the survival and success of both industries. Therefore, in the absence of FDA regulations, it is incumbent upon the states to step up and adopt regulatory frameworks that protect farmers and businesses, as well as public health and safety. They can address the immediate public safety issue by ensuring intoxicating THC products are sold in the appropriate market in line with the intent of the law. They can also ensure a stable framework for non-intoxicating hemp products that have tremendous consumer benefits.

With federal reform and implementation inching forward, states must continue to lead the way on critical cannabis policy matters. This includes the challenging process of developing responsible consumer product regulations.

As the first state to legalize hemp cultivation and regulate marijuana for medical and adult use, Colorado has been at the forefront of addressing new and often-challenging cannabis policy issues. It has had a great deal of success thanks in large part to its experienced and well-informed industry stakeholders, consumers, and regulators, who have engaged in difficult discussions and developed innovative and responsible policy solutions.

This was the case with SB22-205, concerning intoxicating hemp-derived products. Following months of debate, a compromise was reached that resulted in passage of the bill on the final day of the legislative session.

The measure establishes a task force to recommend an appropriate regulatory framework for intoxicating cannabinoids, and it authorizes the Colorado Department of Public Health to promulgate rules to prohibit the production of unsafe chemical modification, conversion, or synthetic derivation of intoxicating hemp products (such as delta-8 and delta 9 THC). It also appropriates funds for enforcement and includes provisions aimed at protecting consumers against deceptive marketing and trade practices.

We are encouraged by this development and other recent discussions on this matter that have taken place among marijuana and hemp industry stakeholders, advocates, and government officials. We believe this dialogue is critical to the process, and we look forward to continuing these conversations and working together to develop responsible state-level solutions and advance further reform at the federal level.

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