The meteoric rise of Delta-8 is reminiscent of the early days of the CBD boom. Apparently during the night, the products were on the shelves of gas stations, steam stores and various e-commerce points.
But there is a big difference: Delta-8 products are being marketed as a “legal” way for people to get high.
The rise of cannabinoids has deeply divided the hemp industry and its advocates. Some hemp producers are moving away, fearful that a crackdown is imminent. Others hope to explore the gray regulatory area to make money.
Entrepreneurs like Jeff Gray and Josh Wurzer of SC Labs, a cannabis testing facility in California, fear that the Delta-8 trend is another vague crisis waiting to happen. As of 2019, nearly 3,000 people have been hospitalized and 68 have died from lung disease largely related to illegal marijuana vaporization products.
“The states are after the eight ball in this one,” said Wurzer. “This is taking the CBD and synthesizing a new compound using other chemicals that can introduce contamination and by-products that are harmful.”
What exactly is Delta-8?
Delta-8 THC is an isomer of Delta-9 THC, the compound responsible for the intoxicating effects of marijuana. This means that the two are basically the same compound, with slight atomic differences. The vast majority of Delta-8 products are not extracted from cannabis. Instead, producers convert the plant-derived CBD into Delta-8 THC using a chemical process called isomerization. The process combines the CBD with a solvent, acid and heat to cause the reaction that turns the CBD into THC.
“Cannabis is cleaner than the water you drink, it is heavily tested,” said Gray, referring to California’s regulated marijuana market. But Delta-8 is a “highly deregulated industry. There are no clear requirements. “
When Congress passed the 2018 agricultural bill that legalizes hemp, it was eager to distinguish marijuana culture. Hemp and marijuana are the same plant species, cannabis sativa L., but hemp cannot contain more than 0.3 percent THC. The distinction is legal, not scientific.
“It is not clear whether [Delta-8 THC products] are illegal under the 2018 agricultural bill, “said Jonathan Miller, general legal counsel at US Hemp Roundtable. “Of course, it violates the spirit of the law.”
Proponents of hemp in Congress, such as Senate minority leader Mitch McConnell, “support hemp, but do not support intoxicating products,” said Miller.
McConnell’s office did not respond to a request for comment.
The compost may conflict with the DEA’s provisional final hemp rule, designed to address the 2018 agricultural bill that removes the crop as a federally controlled substance. The rule emphasizes that “synthetically derived tetrahydrocannabinols” remain controlled substances. But there is no consensual definition of what “synthetically derived” means.
The DEA declined to comment on the legality of Delta-8 until it finalized its provisional hemp rule. “We are reviewing thousands of comments and we are not speculating on what could happen as a result,” said a DEA spokesman.
Market expansion
Last year’s CBD boom led to falling prices and a large excess of CBD isolate in the hemp industry. The Delta-8 trend is giving “processors an outlet for large stocks of CBD isolates that they have accumulated,” said Ian Laird, chief financial officer of Hemp Benchmarks.
It is attractive to processors and retailers, as the compound is more profitable than CBD. In January, Delta-8 cost about $ 1,400 per kilogram, while the CBD isolate was selling for about $ 550 per kilogram.
While it is difficult to determine the size of the market, as many of Delta-8’s sales occur online through untracked channels, Hemp Benchmarks estimates at least $ 10 million in sales in the past six months.
“It is the fastest growing segment,” said Laird.
While many industry watchers postulate that the increase in Delta-8 can be attributed to consumers in states that have not legalized marijuana, marijuana companies see a lot of sales, even in states where there are adult marijuana markets.
The reasons are numerous: state-licensed marijuana companies are highly regulated and taxable. Delta-8 products do not have the same level of regulatory oversight or tax burden, reducing costs for consumers. People can order products online and mail them – off-limits to marijuana
While some hemp retailers are seeing minimal effects from the increase in Delta-8 on their CBD sales, small hemp producers like ImOberstag and Heath Scott are seeing much greater results. ImOberstag started manufacturing Delta-8 products after almost all of its wholesale customers said they were only interested in buying them. Scott, who runs 7 Point Farm & Apothecary in Tennessee, said he saw a 50 percent drop in sales of CBD products.
Scott will stay away from the complex for now. He has struggled with bank account closings and payment processing problems, and fears that entering Delta-8 only exacerbates these challenges.
Then, there is regulatory uncertainty. The hemp industry must deal with ever-changing regulations, and Scott is concerned that a regulatory change is imminent.
“How do you invest in something that is so unstable?” he asked himself. “It’s cool, until it’s not.”
Still, he believes that Delta-8 is more than a fad.
“I think it has benefits,” he said. “Give us some rules that we can work with.”
A challenge for regulators
The regulation request is a familiar refrain in the CBD industry, which has been pleading with the FDA to provide regulatory clarity. But it is not an easy task for regulators: there is still much unknown about the chemical process of turning CBD into Delta-8.
“It’s not just a clean one-to-one conversion,” said Steven Crowley, a compliance expert at the Oregon Liquor Control Commission. “Fifteen to 30 percent are unknown by-products.”
And in addition to unknown by-products, producers who save or simply don’t know what to do can introduce impurities from the solvents and acids used in the process.
Another problem is the addition of flavoring additives or thinners, said TJ Sheehy, director of data and analysis at OLCC.
The agency published new rules on additives in the wake of the vaporization crisis, which will take effect in April. “None of this affects sales of Delta-8 products at corner stores,” explained Sheehy. “It is a black box that is being filled with anecdotal user experiences, as opposed to real science.”
Then there is the issue of the lack of standardization of laboratory tests. “If I took [a hemp product] to 16 different labs, I’ll probably have 16 different results, “said ImOberstag.
The purchase of laboratories occurs in both the state-regulated cannabis and hemp industries, industry officials say, with producers choosing laboratories that are most likely to give favorable results.
“If I had one [certificate of analysis] from Colorado, what happens if someone here [in Illinois] buys and gets arrested … and the police test? ” he said.
ImOberstag recently found a DEA licensed laboratory in Florida in the hope that stringent requirements will result in more accurate results for its Delta-8 products. “I’m trying to find a way to be as legitimate as possible,” he said.
What is the next?
The issue concerns regulators not only with consumer safety for adults, but also with sales to minors. The OLCC started formulating rules for Delta-8 THC last week. Details are still in the air, but regulators want to guarantee at least some level of purity for these products.
Regulated marijuana growers are also voicing concerns about a product that competes with their industry, but lacks laboratory testing requirements. The Michigan Cannabis Manufacturers Association on Monday asked marijuana regulators to oversee Delta-8 products, describing their sales as “an immediate threat to the health of all Michiganders”.
Delta-8 is likely to lead to a “new patchwork iteration of state hemp laws,” said Shawn Hauser, president of the practice of hemp and cannabinoids at the law firm Vicente Sederberg.
Lawmakers in several states are beginning to turn their attention to these products.
In Oklahoma, for example, there is a bill that would include Delta-8 THC in the definition of “marijuana”. A Florida bill would regulate the sale of Delta-8 products and provide age limits and other restrictions. A California bill proposes taxes and labeling requirements for psychoactive products not naturally extracted from the cannabis plant.
But if history serves as a lesson, THC Delta-8 restrictions can only lead to one thing: a boom in producing its almost identical cousin – Delta-10 THC.