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Texas has one of the most restrictive medical marijuana laws in the country, with sales allowed only on prescription for a handful of conditions.
That didn’t stop Lukas Gilkey, general manager of Hometown Hero CBD, based in Austin, TX. His company sells joints, blunts, gummy bears, vaping devices and tinctures that provide a recreational effect. In fact, business is booming online as well, where it sells to many people in other states with strict marijuana laws.
But Mr. Gilkey says he’s not an outlaw and doesn’t sell marijuana, just a loved one. It offers products containing a chemical compound – Delta-8-THC – extracted from hemp. It is only slightly different chemically from Delta 9, which is the main psychoactive ingredient in marijuana.
And that little distinction, it turns out, can make a big difference in the eyes of the law. Under federal law, psychoactive Delta 9 is explicitly prohibited. But the Delta-8-THC in hemp isn’t, a loophole that some entrepreneurs say allows them to sell it in many states where possession of hemp is legal. The number of customers “entering Delta 8 is staggering,” said Mr. Gilkey.
“You have a drug that basically gets you high, but it’s absolutely legal,” he added. “The whole thing is funny.”
The Rise of Delta 8 is a case study of how industrious cannabis entrepreneurs separate hemp and marijuana to create a myriad of new product lines with different marketing angles. They build brands from a variety of potencies, flavors and strains of THC, the intoxicating substance in cannabis, and CBD, the non-intoxicating compound often sold as a health product.
With Delta 8, entrepreneurs also believe they’ve found a way to take advantage of the country’s fractured and convoluted laws on recreational marijuana use. It’s not that simple, however. Federal agencies, including the Drug Enforcement Administration, are still reviewing their enforcement and regulatory options.
“Dealing in any way with Delta-8 THC is not without significant legal risk,” said Alex Buscher, a Colorado lawyer specializing in cannabis law.
Still, cannabis industry experts say sales of Delta 8 have indeed exploded. Delta 8 is “the fastest growing segment” of hemp-derived products, said Ian Laird, CFO of New Leaf Data Services, which tracks the hemp and cannabis markets. He estimated consumer sales of at least $ 10 million, adding, “Delta 8 has really come out of nowhere over the past year.”
Marijuana and hemp are essentially the same plant, but marijuana has higher concentrations of Delta-9 THC – and, as a source of intoxication, it has been the focus of concern for entrepreneurs, as well as state lawmakers. and federal. Delta 8, if discussed at all, was an esoteric, less potent by-product of the two plants.
That changed with the Farm Bill of 2018, a huge federal law that, among other things, legalized the widespread cultivation and distribution of hemp. The law also specifically permitted the sale of the plant’s by-products – the only exception was Delta 9 with a level of THC high enough to define it as marijuana.
Because the law made no mention of Delta 8, entrepreneurs jumped into the void and started extracting and packaging it as a legal edible and smokable alternative.
The type of Delta 8 top produced depends precisely on who you ask. Some see it as “light marijuana,” while others “market it as pain relief with less psychoactivity,” said David Downs, content editor at Leafly.com, a popular source of. news and information about cannabis.
Either way, Delta 8 has become “extremely bottom-up,” Mr Downs said, reflecting what he calls the “ban fall interregnum”, where consumer demand and activity entrepreneurialism exploit the loopholes of a rapidly evolving and fractured law.
“We’re getting reports that you can walk into a truck stop in blackout states like Georgia where you look at what looks like a cannabis bud in a jar,” Mr. Downs said. The bud is hemp sprayed with high concentration Delta 8 oil.
Joe Salome owns the Georgia Hemp Company, which in October began selling Delta 8 locally and shipping nationwide – about 25 orders a day, he said. “It took off enormously.”
Its website advertises Delta 8 as “very similar to its psychoactive sibling THC,” providing users with the same relief from stress and inflammation, “without the same anxiety-inducing effect that some may experience with THC.”
Mr Salome said he didn’t need to buy an expensive state license to sell medical marijuana because he felt protected by the Farm Bill.
“Everything is fine there,” he said, explaining that it is now legal to “sell all parts of the factory”.
The legal landscape is contradictory at best. Many states are more permissive than the federal government, which under the Controlled Substances Act considers marijuana an illegal and very dangerous drug. In 36 states, marijuana is legal for medical purposes. In 14 states, it is legal for recreational use.
But suddenly, as part of the Farm Bill, the federal government opened the door to the sale of hemp products, even in states that have not legalized the recreational use of marijuana. Only a few states, like Idaho, ban hemp entirely, but in others, Delta 8 entrepreneurs are finding a receptive market.
Lawyers for Mr. Gilkey believe the Farm Bill is on their side. “Delta 8, whether it is derived from hemp or extracted from hemp, is considered hemp,” said Andrea Steel, co-chair of the cannabis trade group at Coats Rose, a Houston law firm. She pointed out that legality also depends on whether Delta 9 exceeds legal limits.
Ms Steel noted that when making a Delta 8 product, it can be difficult, if not impossible, to filter all of the Delta 9 from the hemp.
“Adding another wrinkle,” she says, “many labs don’t have the ability to delineate between Delta 8 and Delta 9.”
Lisa Pittman, the other co-chair of the cannabis group of companies at Coats Rose, said that in reading the question, the authors of the Farm Bill may not have considered the consequences of the law.
Ms Pittman said the ultimate question of a product’s legality may depend on other factors, including how the Delta 8 is produced and sourced. Specifically, lawyers said the DEA The rule on the matter seems to suggest that Delta 8 could be illegal if it is made “synthetically” rather than organically derived.
Legal proceedings are currently underway for the interpretation of the DEA rule.
Mr Gilkey said he paid more than $ 50,000 in legal fees to make sure he didn’t break the law. A former US Coast Guard fighter, Mr. Gilkey worked in an anti-narcotics unit on ships out of San Diego. He “saw some really tough things,” he said, and “was not happy with the war on drugs.
He ended up running a business in Austin that sold e-liquids for vaping devices. Then in 2019, he launched his current business focused on selling CBD. Late last spring, he said, he started getting calls from customers about Delta 8.
“I said, please explain to me what it is,” he recalls. Mr. Gilkey, whose company supplies products to other retail stores across the country, saw a huge opportunity. After checking with the avocados, he started packaging large-scale gums and vape pens and other products using Delta 8, he said he got from a major hemp supplier.
“It’s about to go mainstream,” he says. And that’s just the beginning. “There is a Delta 10 in the works.”
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