CBD

Cops can’t charge delta-8 stakeholders, but hemp licensees at risk in Kentucky

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A judge in Kentucky has barred law enforcement from meddling in the production and sale of delta-8 THC but dismissed an injunction against the state agriculture agency, raising the fear that the state could withdraw licenses from hemp stakeholders.

The ruling, handed down by Boone County Circuit Court Judge Richard Brueggemann last week, follows a temporary injunction put into force against both the Kentucky Department of Agriculture (KDA) and the Kentucky State Police in March after the Kentucky Hemp Association (KYHA) filed suit last year.

While Brueggemann’s recent decision prevents the state law agency from charging retailers and producers with criminal activity for selling delta-8 products, a claim that specifically targeted the KDA was dismissed due to a lack of standing on the part of the plaintiffs, none of whom are licensed by the KDA as processors with an intention to produce delta-8 products, the court ruled.

Lack of standing

“None of the Plaintiffs can demonstrate that the KDA’s . . . actions have put their license or businesses in jeopardy,” Brueggemann wrote in his analysis of the case, noting that hemp company Rocky Ridge Hemp, LLC, the party KYHA identified in its lawsuit as having been injured, “have since called it quits.”

“Although the K(Y)HA has pointed to other members that might otherwise have had standing, . . . the K(Y)HA is doing so after having refused to disclose this before the close of discovery,” the judge observed.

Brueggemann also rejected KYHA’s claim that the Association itself has direct standing in the case due to loss of revenue from participants having failed to attend its convention. “That potential participants declined to attend because of the KDA’s position on Delta-8 is attributable to the decisions of those participants, which may not necessarily be solely due to the KDA’s actions,” the judge held, saying that claim “is not ‘a concrete and particularized injury that is either actual or imminent,’ nor is it ‘distinct and palpable’. Rather, it is more ‘abstract’ or ‘conjectural’.”

Case background

KDA in August 2021 declared delta-8 an illegal “synthetic” drug at both the state and federal levels. The state farming agency warned producers and sellers in a letter that distributing delta-8 products could lead to both revocation of hemp licenses and criminal prosecution.

While the judge removed the threat of prosecution with his ruling last week, KHYA said in a press release that the dismissal of its challenge to the KDA, which is the hemp permitting authority in Kentucky, “(leaves) questions and concerns about how KDA will approach this issue in the future,” and “(leaves) hemp processors at risk of losing their hemp licenses.”

In bringing the lawsuit against the state agencies a year ago, the KYHA argued against an interpretation of state cannabis laws by the KDA that declared delta-8 THC a Schedule I controlled substance.

Delta-8 occurs naturally in small amounts in industrial hemp plants (which also express trace amounts of delta-9 THC, the more common, high-producing THC found in marijuana plants). But most delta-8 products, widely available in marijuana dispensaries and other retail outlets in many parts of the country, are produced by putting hemp-derived CBD through a chemical process.

Ruling against police

In ruling against the State Police, “the Court finds, adjudicates and Orders that Delta-8 tetrahydrocannabinol, as a derivative of Hemp, and any products that contain Delta-8 tetrahydrocannabinol are legally compliant Hemp pursuant to KRS 260.850(5) and 7 U.S.C. 1639o(1) so long as the same contain a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis,” Brueggemann wrote, repeating arguments in his original temporary injunction last March.

Based on a strict interpretation of federal hemp rules that came in the wake of the 2018 Farm Bill, Brueggemann’s original ruling found those regulations only refer to, and address limits on, delta-9 THC in hemp, and do not explicitly outlaw delta-8 THC. The judge also found that the Kentucky legislature had not specifically banned delta-8, making it an allowable downstream derivative of industrial hemp.

Brueggemann declared in the original injunction that “[I]f only natural hemp, (unadulterated by any chemical) is worthy of exemption, then Congress, and the (Kentucky) General Assembly, could have made their statutes say so. They did not.”

“Likewise, if the extraction or production of derivatives using non-hemp solvents should have remained a controlled substance, then the legislators could have, by statute, said so. They did not. Nor did the legislative body choose to limit delta-8 concentrations as it did with delta-9. Again, they could have but did not,” the judge observed.

Following that logic, the judge’s ruling last week ordered Kentucky State Police to refrain from “any criminal enforcement action on the basis of legally compliant Hemp (i.e., the plant Cannabis sativa L. with a Delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis), as well as any part of that plant that is compliant (i.e., that has a Delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis), including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, provided none of those materials have a Delta-9 tetrahydrocannabinol concentration of more than 0.3 percent on a dry weight basis; this includes any products that contain Delta-8 tetrahydrocannabinol unless the same contain a delta-9 tetrahydrocannabinol concentration of more than 0.3 percent on a dry weight basis.”

Looking for clarity

States all over the USA are grappling with delta-8, which is unregulated by the U.S. Drug Enforcement Administration and exists in a legal gray area. Some states have outlawed the compound altogether while others are treating it under rules for marijuana products.

Many producers, desperate to unclog the CBD supply chain amid a worldwide glut of biomass that sent prices plummeting, see synthetic delta-8 as an outlet for that material, and a market going forward.

But regulators and even some hemp stakeholders say the 2018 Farm Bill never intended hemp to be used for products that can be classified as psychoactive, and also oppose delta-8 THC products because they are not derived from the hemp plant in a natural manner.

Delta-8 THC is likely to be addressed in the 2023 Farm Bill as it is one of several issues stakeholder groups and legislators have begun to discuss for improving and clarifying the landscape for industrial hemp.

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