Virginia House Bill 2294 (Bill) recently passed through both the House and Senate of the Virginia General Assembly. This Bill, which can be read in its entirety here, has the potential to severely alter the landscape surrounding hemp-derived products in the Commonwealth of Virginia.

Unfortunately, and as mentioned above, the Bill has already passed through both Chambers of Virginia’s General Assembly and is headed Governor Youngkin’s desk for signature. It is expected the Governor will sign the Bill in an effort to chill the fervor of the hemp-derived products industry in Virginia, an industry which has enjoyed immense success while Virginia wrestles with its ability to make good on its promises for an adult-use marijuana marketplace by 2024. This blog is intended to provide information about the Bill, as well as what manufacturers and retailers of these products need to address or be aware of moving forward.

As a threshold matter, the Bill mandates that every industrial hemp extract product offered for retail sale contain no more than 0.3 percent total tetrahydrocannabinol (THC), and that products containing industrial hemp extract contain no more than 2 milligrams of total THC per package.

For reference, the Bill defines “tetrahydrocannabinol” as: “any naturally occurring or synthetic tetrahydrocannabinol, including its salts, isomers, and salts of isomers, whenever the existence of such salts, isomers, and salts of isomers is possible within the specific chemical designation and any preparation, mixture, or substance containing, or mixed or infused with, any detectable amount of tetrahydrocannabinol. For the purposes of this definition, “isomer” means the optical, position, and geometric isomers.”

Also, the Bill classifies “total tetrahydrocannabinol” as: “the sum, after the application of any necessary conversion factor, of the percentage by weight of tetrahydrocannabinol and the percentage by weight of the tetrahydrocannabinolic acid.”

The Bill defines “industrial hemp extract” as: “an extract (i) of industrial hemp, (ii) that is intended for human consumption, and (iii) except as otherwise provided in subsection M of § 54.1-3442.6, when offered for sale, that (a) contains a total tetrahydrocannabinol concentration that is no greater than 0.3 percent and (b) contains no more than two milligrams of total tetrahydrocannabinol per package. “Industrial hemp extract” is not a hemp seed-derived ingredient that is approved by the U.S. Food and Drug Administration or is the subject of a generally recognized as safe notice for which the U.S. Food and Drug Administration had no questions.”

In addition to providing these clarifying definitions, the Bill states that any person who “manufactures, sells, or offers for sale an industrial hemp extract or food containing an industrial hemp extract shall be subject to requirements of the Bill and regulations adopted pursuant to the Bill.”

Alarmingly, the Bill states:

“Any person who (i) manufactures, sells, or offers for sale an industrial hemp extract or food containing an industrial hemp extract without first obtaining a permit to do so from the Commissioner pursuant to § 3.2-5100, unless exempt from a permit pursuant to subdivision C 6 of § 3.2-5130; (ii) continues to manufacture, sell, or offer for sale an industrial hemp extract or food containing an industrial hemp extract after revocation or suspension of such permit; (iii) fails to disclose on a form prescribed by the Commissioner that he intends to manufacture, sell, or offer for sale a substance intended to be consumed orally that contains an industrial hemp-derived cannabinoid; (iv) manufactures, sells, offers for sale a food that (a) has a total tetrahydrocannabinol concentration that is greater than 0.3 percent or (b) contains more than two milligrams of total tetrahydrocannabinol per package; (v) manufactures, offers for sale, or sells in violation of this chapter or a regulation adopted pursuant to this chapter a substance intended to be consumed orally that is advertised or labeled as containing an industrial hemp-derived cannabinoid; or (vi) otherwise violates any provision of this chapter or a regulation adopted pursuant to this chapter, in addition to any other penalties provided, is subject to a civil penalty not to exceed $10,000 for each day a violation occurs.”

To be clear, violations of this new Bill carry with them a $10,000 per day fine for each day the violations occur. In addition to these steep monetary penalties, the Bill also states that in addition to any other penalties, any violation of the Bill also carries with it a Class I misdemeanor and that each day in which a violation occurs shall constitute a separate offense.

The Bill also imposes strict labeling and packaging requirements for products containing industrial hemp extract. These products must be contained in “child-resistant packaging”. Each industrial hemp extract or food containing industrial hemp extract must be packaged and equipped with labels that satisfy all Bill criteria. In addition to font-size requirements and a mandate to include each ingredient in the product, these product labels must also state that the industrial hemp extract or the food containing the industrial hemp extract contains tetrahydrocannabinol. Finally, the Bill mandates that these products cannot be sold to persons younger than 21 years of age.

Moreover, industrial hemp extract or foods containing an industrial hemp extract, when offered for sale, must be accompanied by a certificate of analysis, produced by an independent laboratory that is registered with the U.S. Drug Enforcement Administration and is accredited pursuant to the standard ISO/IEC 17025 of the International Organization for Standardization by a third-party accrediting body; that states the total tetrahydrocannabinol concentration of the substance or the total tetrahydrocannabinol concentration of the batch from which the substance originates.

In addition to other requirements that mandate identifying batches for traceability, the Bill specifically prohibits the inclusion of claims “indicating the product is intended for diagnosis, cure, mitigation, treatment, or prevention of disease, which shall render the product a drug, as that term is defined in 21 U.S.C. § 321(g)(1). An industrial hemp extract or food containing an industrial hemp extract with a label that contains a claim indicating the product is intended for diagnosis, cure, mitigation, treatment, or prevention of disease shall be considered misbranded.”

The Bill places limitations on the ability to sell hemp-derived products intended for smoking to persons over the age of 21. Along with these limitations, penalties for violations of these provisions have increased from $50 to $500. Keep in mind these restrictions apply equally to sales online and in brick-and-mortar locations. Online sales must be done using a commercially available database that verifies the age of the purchaser, as well as a delivery service that ensures the person signing for the package is over the age of 21.

While a great deal of the Bill’s new regulations are aimed at increasing safety and transparency of the hemp-derived products industry, others seem to be specifically targeted at regulating an industry out of existence. Instead of establishing a regulatory framework surrounding adult-use marijuana, lawmakers instead focused their efforts on bullying hemp-derived product manufacturers and retailers.

Regardless of legislative intent or ultimate outcome, industry participants need to be aware of the Bill’s impact on their business. Finally, industry participants who are residents of the Commonwealth, or who know residents of the Commonwealth, should speak up by voting this year as all seats in Virginia’s General Assembly are up for election in 2023.

For more information on Virginia’s new hemp-derived product regulations, or for questions regarding cannabis laws across the country, please contact Kight Law today.

February 27, 2023

This article was written by attorney Philip Snow. Kight Law represents hemp businesses in the US and throughout the world. To schedule a consultation please click here and mention this article.

February 21 2023

On February 13, I posted an article about the DEA’s response to my inquiry regarding the legal status of THCO. As my readers are aware, the DEA stated that THCO is a schedule 1 controlled substance. The DEA’s position, which was spread via my article, created what several people have called a “shitstorm”. For several days afterwards, I was contacted by both cannabis and non-cannabis mainstream media. My phone rang constantly, and my email inbox filled up with questions and requests for comments about THCO from people all over the US and also from several continents. Frankly, I was surprised at the public response to the DEA’s position and my article.

Then three things happened.

First, many people and numerous media organizations misread (or did not read) my article and pronounced in bold and inaccurate headlines that the DEA said delta-8 THC is illegal. (The DEA’s position is actually the opposite, as I discuss in an article you can read by clicking here.) Several clients who manufacture and distribute delta-8 THC products told me that their phones were ringing constantly with distressed customers asking about what they should do now that “delta-8 THC is illegal”. Once misinformation is spread, it is difficult to undo the damage. I attempted to clarify things in an article I posted on February 18. In a continued effort to staunch the flow of misinformation, I want to be very clear:

The DEA letter to me was solely about THCO, specifically delta-8 THCO and delta-9 THCO. It did not in any way address delta-8 THC or any other compound. The legal status of delta-8 THC was not impacted in any way by the DEA’s letter, except to the extent that its lawful status as “hemp” was reinforced, an issue that I discussed in the article referenced above.

Second, I began hearing that people were angry with me, even though I was only the messenger. To be clear, I anticipated the DEA’s position and do not dispute it. As the author of the “derivatives” argument that provided the legal foundation for delta-8 THC, I found myself in the surreal position of having people use my argument against me in an attempt to justify why the DEA and I are both wrong. I discussed this in detail with Cannintelligence.com. I said that I would be “laughed out of court” if I argued to a Judge that a synthetic compound that the hemp plant does not produce, and in fact can only be produced in a lab, meets the legal definition of “hemp” under the 2018 Farm Bill. (“Mr. Kight, so you’re trying to convince me that this synthetic, lab-produced compound is “hemp” when the hemp plant does not even produce it? Are you kidding me?”)

Regardless of one’s personal views on THCO, the fact is that it is indefensible as “hemp”, derivative or not. My primary goal is to support the hemp industry, and this simply is not possible when legal arguments, including the very ones I created, are stretched to their breaking point in an attempt to justify the legal status of a synthetic compound that is plainly not “hemp”. I do not want my clients to spend decades in jail for selling a controlled substance, nor do I want the entire hemp industry as we know it to be placed on the Congressional chopping block because some people end up harmed, or even dying, due to their inhalation of a product that is sold as “hemp”.

Third, the anger at me for publishing the DEA’s position and for having the audacity to agree with it, morphed into something sinister: flagrant defamation. Yesterday, a good client forwarded me an email by a sales representative for a hemp company I do not represent. This woman, whose name I am intentionally not publishing to protect her privacy, sent out 65 emails to the company’s customers, most of whom are retail outlets throughout the US, making some ridiculous and wholly untruthful allegations about me. Her email, followed by her apology and retraction, is below. Those retail outlets then proceeded to forward the libelous email to their contacts in the hemp industry. (I should note that the President of the company called and informed me that this email did not represent the position of the company.) Based on this wildfire of defamation, I am now in the position of having to post a blog article to deny the allegations. So, here it goes:

• My article about THCO was not “a misleading ulterior motive piece.” My purpose for contacting the DEA about THCO was twofold. First, I had a concern about the rising popularity of THCO and was worried that hemp industry participants who sold it would end up in jail. I wanted to know the DEA’s position from the “horse’s mouth”, so to speak. Second, a client wanted to ship THCO to Europe. Rather than learn the DEA’s position after seizing my client’s shipment before it left the US, or while he was behind bars, I decided it was best to know the DEA’s position before he took any action. I’m glad I did.

• I am not “a marijuana Lobbyist who has scammed people within the hemp industry to think THCA is legal so [my] marijuana growers can make money on a dying marijuana market.” I am not a lobbyist. I am not a marijuana lobbyist. I have not scammed anyone, and certainly not people in the hemp industry. I have no motives whatsoever in advising clients that THCa hemp flower is lawful under federal law except to advise them that it is lawful and also to help expand their businesses and the hemp industry in general. In fact, I routinely speak out publicly against Big Corporate Marijuana and its negative effects on the cannabis and hemp industry.

• I am not “being sued by many people for misleading them on THCA so [I’m] trying to spin and deflect.” I am not being sued by anyone, nor have I misled anyone about THCa hemp flower, nor am I trying to spin or deflect anything. My article about the DEA’s position on THCO was simply another news/legal analysis article of the type that I have been writing for the past eight years.

As I write this, my office manager (who is also my wife) is literally fielding a call from an angry person who called out of the blue and who is screaming at her about THCO and that I am “working with the government”. So, I guess I should also address that, too. I do not work for the government. In fact, I have sued the government (specifically, the DEA) in several lawsuits and usually disagree publicly with the DEA.

I am a cannabis advocate. I changed my career after personally experiencing the enormous medical and health benefits that cannabis provides when I had cancer. I represent hundreds of hemp businesses and spend a lot of time, both paid and pro bono, working to promote and expand the hemp industry. It is thus frustrating, maddening, and demoralizing to be defamed and made subject to angry and misinformed calls, emails, and disinformation campaigns in response to my publication of a letter from the DEA regarding an important issue for the hemp industry that I diligently work to protect.

Thank you for taking the time to read this article, which I regret having to post in the first place. I continue to work hard for the cannabis industry, and in particular, the hemp industry. Please feel free to contact me directly if you have any questions or need assistance.

Below is the libelous email and the apology/retraction. I hope that if you receive similar emails and/or hear similar things being said about me, you will refute them and even reach out to let me know. This type of thing wastes time and impedes my ability to focus on working for clients and the industry at large.

Source:

Despite its brevity, the DEA letter I received last week about THCO was followed by confusion and lots of speculation in the cannabis industry about the legal status of novel and mood-altering cannabinoids. This is unfortunate, because I think the letter provided additional clarity, not just about THCO, but about cannabinoids in general. In this article, I will break down the legal status of novel and mood-altering cannabinoids, including a discussion of the “synthetic versus natural” issue that is dominating much of the cannabis conversation in cannabis media and state legislatures. This may sound like a lot, but it is actually pretty straightforward.

Part 1- The DEA letter did not address delta-8 THC

I will start by clearing up a primary point of confusion. The DEA did not state that delta-8 THC is a controlled substance. The DEA’s letter was solely about THCO, specifically, two forms of THCO: delta-8 THCO and delta-9 THCO. The DEA letter did not discuss delta-8 THC, which it has previously stated is not a controlled substance.

Even though the abbreviations are similar, delta-8 THC is a different molecule from delta-8 THCO. This point is easy to grasp when we look at the actual names of the compounds we are discussing, rather than their abbreviations. The DEA letter was about delta-8 and delta-9 “tetrahydrocannabinol acetate ester” (THCO). This a different compound from “tetrahydrocannabinol” (THC). The “delta”, followed by the number 8 or 9, is a specific designation regarding the location of a double carbon bond on the chain of carbon atoms shared by both THC and THCO. Specifically, a “delta-8” molecule has the double bond on the eighth carbon atom in its molecular structure and a “delta-9” molecule has the double bond on the ninth carbon atom. So, “delta-8 THC” refers to a tetrahydrocannabinol molecule with a double bond on the eighth carbon atom. “Delta-8 THCO” refers to a different molecule, tetrahydrocannabinol acetate ester, with a double bon on the eighth molecule.

The bottom line is that, although they share some similarities, delta-8 THCO is a different compound from delta-8 THC. In fact, delta-8 THC can be used as a starter compound to synthesize delta-8 THCO in a lab. Additionally, delta-8 THC is naturally produced by the cannabis plant, a crucial point discussed below; delta-8 THCO is not. At the risk of redundancy, the DEA letter solely addressed THCO, not delta-8 THC, delta-9 THC, or delta-10 THC.

Part 2- What can we infer from the letter about the legal status of other cannabinoids?

Although the DEA letter was solely about THCO, if we view it in conjunction with the plain language of the 2018 Farm Bill and prior DEA statements, we can see a picture emerge as to how the DEA views novel and mood-altering cannabinoids. Here’s what we know:

• The DEA letter about THCO states: “Delta-9-THCO and delta-8-THCO do not occur naturally in the cannabis plant and can only be obtained synthetically, and therefore do not fall under the definition of hemp.”

• During a video webinar called a “Town Hall with USDA and DEA” conducted by the Florida Department of Agriculture and Consumer Services (“FLDACS”) on June 24, 2021, in response to a question about delta-8 THC, the DEA stated: “I also want to expand beyond delta-8. There’s delta-8, there’s delta-10, there’s all kind of different cannabinoids that are associated with cannabis sativa l that are kind of out there and making the rounds. So what I want to say, and I’ll be very, very deliberate and clear. At this time, I repeat again, at this time, per the Farm Bill, the only thing that is a controlled substance is delta-9 THC greater than 0.3% on a dry-weight basis.”

• A DEA letter to the Alabama Board of Pharmacy dated September 15, 2021 states: “only tetrahydrocannabinol in or derived from the cannabis plant—not synthetic tetrahydrocannabinol—is subject to being excluded from control as a “tetrahydrocannabinol[] in hemp.” With respect to “synthetic THC”, the DEA clarifies in the letter that it means, “produced synthetically from non-cannabis materials.”

Based on these statements, the DEA only considers material that the cannabis plant naturally produces with delta-9 THC concentrations that do not exceed 0.3% by dry weight to be lawful “hemp”. Importantly, the fact that the material in question may have been produced in a lab appears to be immaterial, provided that the cannabis plant naturally produces that type of material and the material in question was derived from the cannabis plant. This is why delta-8 THC and delta-10 THC, which are often created in a lab, are not controlled substances. They are derived from the cannabis plant (usually from extracted CBD) and the cannabis plant naturally produces them. (Click here for a deeper analysis on delta-8 THC.) On the other hand, if the material is a form of THC that the plant does not naturally produce it is controlled. This is why THCO is controlled.

A quick way to determine if a particular cannabis (or cannabis-like) substance is lawful “hemp”, ask:

• Does the cannabis plant naturally produce this substance?
• Does this substance have delta-9 THC concentrations above 0.3%?

If the answer to either question is “no”, then it is not lawful hemp.

Part 3- Conclusion

This article solely addresses the legal status of cannabinoids at the federal level. Although they shouldn’t, state laws vary considerably on this issue. Notably, this article does not address the FDA and its tortured response to the emergence of hemp-based cannabinoid products. Finally, it does not address how these products should be marketed. Certainly, mood-altering hemp cannabinoid products should not be sold to minors. Those are all issues for another article. Hopefully, the control status of hemp cannabinoids is now clearer. Feel free to contact me if you have questions or want assistance with your cannabis business.

https://cannabusiness.law/cannabinoid-breakdown-analyzing-the-deas-position-on-novel-cannabinoids/