A loophole in cannabis law is again at the center of a squabble – this time in Missouri, where state officials recently recalled more than 45,000 marijuana products made from hemp derivatives.
The state Division of Cannabis Regulation (DCR) revoked the marijuana manufacturing license of Robertsville-based Delta Extraction for illegally importing marijuana from out-of-state sources which it sold along with Missouri-grown marijuana. The cannabis regulator also said the Delta products violated other rules.
Delta admitted it purchased material from other states, but said those imports were hemp-derived THC-A, a synthetic compound made from hemp that can be used to create high-producing delta-9 products. The company argues that because hemp is legal federally, the state has no justification for blocking the products.
Safety questions
DCR also said regulators could not ensure the imported material was properly tested, and claims Delta falsified product tracking records. Delta was also charged with failing to maintain proper surveillance footage or have necessary safeguards to prevent break-ins at the company’s production facility.
The state originally ordered a recall of more than 62,000 products on August 14 but later reduced that to 45,000 products, the fate of which will be debated before the Administrative Hearing Commission in December, when Delta’s appeal on its license revocation is expected to also be heard. Stakeholders say the outcome could mean steep financial losses for dozens of marijuana businesses if the products must be destroyed.
In appealing its license revocation, Delta argues that Missouri didn’t specifically ban adding hemp-derived THC-A to marijuana products until the state’s final rules went into effect on July 30. Chuck Hatfield, attorney for Delta Extraction, said the DCR never communicated that adding THC-A from hemp was against the rules until the company’s license was suspended in August.
State action ‘illegal’
“The department’s actions are illegal and unfounded,” Hatfield said. “The issue stems from Delta using legal hemp products in its legal marijuana products.”
The state has argued that emergency rules filed on Jan. 20, 2023, prohibited the practice.
“We must be clear on this: Businesses that choose to participate in Missouri’s marijuana industry do not get to decide which rules . . . they want to follow,” said Amy Moore, CDR director.
Hatfield said Delta intends to challenge the CDR’s authority to regulate hemp-derived products. But the courts won’t accept a legal challenge against the state until the appeal process over the revocation of Delta Extraction’s license is completed.
Arkansas case
In a similar situation which led to a court suit by industry interests, a federal judge in Arkansas last month granted a preliminary injunction against that state, ruling that hemp-derived cannabinoids, like THC-A, are protected under the 2018 Farm Bill.
State and local authorities across the country are working to reign in synthetically made, hemp-derived cannabinoids that produce a “high,” which are not regulated by the Food & Drug Administration (FDA). The products have proliferated in convenience stores and other common retail outlets, where they are marketed to youth in packaging that often mimics well-known brands of snacks and candy. Many producers and sellers have received warnings from the FDA regarding the safety of their products.
The matter may be dealt with in the 2023 Farm Bill after the 2018 version of that measure, enacted every five years, failed to account for such downstream substances, which are usually made from CBD, a natural hemp derivative.
Also, the U.S. Drug Enforcement Administration (DEA) has indicated it intends to change federal drug-control laws to ban such highly concentrated synthetic THC products. The drug agency said in February that the products do not meet the federal definition of hemp and are therefore controlled substances.
Farm Bill’s intentions
Even some in the hemp business have suggested that the 2018 Farm Bill never intended hemp to be used to make psychoactive compounds and have criticized nefarious players they say are exploiting the 2018 Farm Bill’s language to sell highly potent synthetic THC products that are often rife with contaminants and inaccurately labeled.
Producers have argued that because the 2018 Farm Bill made hemp and its downstream products legal, THC-A, delta-8 and other such hemp-derived substances are therefore also legal. In a strict interpretation of the 2018 Farm Bill, the U.S. Court of Appeals for the Ninth Circuit agreed last year, noting that federal lawmakers can correct that situation with further legislation.
Producers started making synthetic psychoactive products from hemp amid the drastically diminished fortunes of the CBD sector, where demand did not reach inflated expectations and oversupply caused prices to plunge by as much as 90% over the past four years. Some analysts have said at least 75% of the current supply of CBD is going into the production of unregulated hemp-derived, high-producing products.
