Texas retailer suffers setback in legal challenge over delta-8

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A CBD retailer in Texas has been denied a restraining order against a state ruling that hemp-based delta-8 THC is an illegal drug.

A State District Court in Austin rejected CBD seller Hometown Hero’s request to block Texas health officials from giving delta-8, which is derived from hemp-based CBD, the narcotics designation.

The case, which continues, is yet another indicator in a struggle among lawmakers, regulators and different factions of the U.S. hemp industry over delta-8 THC. Unlike delta-9 THC, the more common, natural form of tetrahydrocannabinol derived from marijuana plants, delta-8 is not a natural derivative of cannabis; it is produced by extracting CBD from industrial hemp plants that contain less than 0.3% delta-9 THC and then transforming the CBD into delta-8 THC through a chemical process that employs acetic acid.

Standard arguments

Texas CBD sellers have used a standard argument put forth by delta-8 proponents in other parts of the country: That because delta-8 THC comes from hemp, which is legal under the 2018 Farm Bill, those products should also be legal. The sellers also suggest that the compound is legal under their interpretation of the 2019 state law which established a legal hemp program in Texas.

The Farm Bill, the Texas law, and the U.S. Controlled Substances Act do not specifically outlaw delta-8 THC. But the federal Drug Enforcement Administration (DEA) has said the compound is an illegal controlled substance because it is not a natural extract. Industry opponents have made a similar argument against delta-8 and say the Farm Bill never meant to make the compound legal.

Hemp processors started turning out delta-8 THC extracts about two years ago for such products as vape liquids, edibles, and high-CBD hemp buds laced with the compound. The products quickly spread into convenience stores and independent smoke shops across the country despite the cloudy legal landscape.

Genesis of the challenge

The Hometown Hero lawsuit was prompted by a notice published by the DSHS Oct. 15 stating delta-8 had been listed as a Schedule I drug, and is therefore illegal in Texas. Health officials said they were prompted to post the statement on delta-8 after receiving inquiries from hemp growers who were confused over its legality.

Responding to the lawsuit, DSHS officials suggested the 2019 Texas law “did not—nor was it intended to—allow for the manufacture and sale” of delta-8 products.

“[The] plaintiff’s alleged surprise that tetrahydrocannabinol (THC) remains a Schedule I controlled substance does not merit the extraordinary relief of a temporary restraining order,” DSHS wrote in its response. “THC, including delta-8 tetrahydrocannabinol (delta-8), has been a Schedule I controlled substance in Texas for over 40 years.”

Enforcement is open question

Texas hemp stakeholders late last year were successful in blocking a proposed law that would have outlawed products containing delta-8 THC. Hometown Hero, which distributes CBD products to shops in Austin, and to CBD retailers nationally through Austin-based Sky Marketing Corporation, an affiliated entity, was among a group of companies and organizations that worked to derail the legislation.

The Houston Chronicle newspaper reported that state law agencies have not indicated how they intend to enforce the delta-8 THC rule, and retailers have not been informed what they should do with their unsold stocks of delta-8 products.

Another hearing in the Hometown Hero case is scheduled for this Friday, Nov. 5.

Louisiana’s path diverges

Meanwhile, in neighboring Louisiana, state health officials appear to be laying out a legal path for delta-8 THC. In an email sent out last week, the Louisiana Department of Health (LDH) said the state’s hemp law creates a new category for “consumable hemp,” making legal “any product derived from industrial hemp that contains any cannabinoids and is intended for consumption or topical use.”

“This includes the addition of food products containing CBD and delta-8 (THC) products,” the health agency specified.

Nearly 20 states have outlawed delta-8 THC while a few allow it to be sold under marijuana laws and regulations. A new law enacted in Michigan restricts delta-8 THC products to state-approved distribution channels for marijuana. Similarly, Oregon has defined delta-8 THC as an “adult-use cannabinoid,” implying it also intends to regulate the compound under marijuana laws.

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