- The 2018 farm bill that legalized hemp created a loophole for unregulated copying of marijuana.
- A form of delta-9 THC – the psychoactive substance in pot – is not subject to the same laws and regulations as marijuana because it comes from hemp.
- The drug is about to shake up the cannabis industry.
ST. LOUIS — It wasn’t shocking that people listening to musicians covering songs from the Grateful Dead and Phish in October at a dive bar here were interested in trying a new drink containing delta-9 THC, the main psychoactive ingredient in oil. ‘grass.
What was unusual was to see a bar owner – in this case, Joshua Grigaitis of Pop’s Blue Moon – grab cans of drink and hand them to customers without looking over his shoulder in a state where recreational pot remains illegal, for the moment. Missouri voters will decide whether or not to liberalize the law in the Nov. 8 election.
“Contains 10mg of the good stuff, which equates to less than 0.3% by volume. This means it can be sold almost anywhere! Grigaitis posted on Facebook last month when announcing the new products of his Mighty Kind Cannabis Infused Beverage Company: hemp-derived delta-9 THC seltzer with “cherry blossom” or “heady lemon” flavors.
Grigaitis believes he has a solid legal basis to sell seltzer because it comes from hemp, not marijuana, two plants in the same genus Cannabis. Still, he labels the cans with the percentage of THC by volume, which refers to a federal limit allowed for hemp, because he anticipates scrutiny of his product.
Rather than offering his drink in the crowded medical and adult marijuana market — which remains illegal at the federal level and faces costly taxes and regulations where legal at the state level — Grigaitis thinks that a loophole in federal hemp law allows him to sell a product that delivers the same kind of buzz in his bar, online, and just about everywhere else.
As such, he said hemp-derived delta-9 tetrahydrocannabinol products have the “potential to disrupt the entire cannabis industry.”
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Grigaitis isn’t the only one sensing an opportunity. Some 120 brands are selling hemp-derived delta-9 products online, according to an April study published by CBD Oraclethat reports to the industry.
But other players in the cannabis industry are concerned about the loophole and are calling for federal legislation to prevent people from selling intoxicating hemp products outside of dispensaries. They say some of the products are unsafe because minors could access them more easily than products from dispensaries. And they are generally not subject to the oversight of state regulatory systems. Critics also say the products subvert the intent of a 2018 federal law that removed hemp from the federal list of controlled substances.
“The medical marijuana and recreational marijuana industries are highly regulated to the point where ID, passports, driver’s licenses are all very tightly held at these dispensaries,” said Eric Wang, vice president of sustainability. for the American Hemp Roundtablea commercial group based in Kentucky.
By contrast, he said, a 12- or 13-year-old can legally buy a hemp-derived product.
When a bipartisan group of lawmakers passed the 2018 Farm Bill, the stated goal was to help struggling farmers by allowing them to grow industrial hemp. The law also meant that people could sell CBD across state lines. CBD has since grown into a multi-billion dollar industry.
At the time, Mitch McConnell, then Senate Majority Leader, a Republican from Kentucky who sponsored the legislation, said of hemp that “everyone understood it wasn’t the other plant.”
The main difference between marijuana and hemp is that hemp contains very small amounts of THC. Federal law states that it cannot contain more than 0.3% delta-9 THC by dry weight.
Grigaitis maintains that its hemp-derived delta-9 drink is legal because the amount of THC in the drink is less than 0.3% by weight of the liquid.
“It’s backed by my lawyers, my test labs, my insurance, my bank — everyone,” said Grigaitis, whose Mighty Kind drinks appear in Kevin Smith’s recent film “Clerks III.”
Its hemp-derived delta-9 is made using one of two methods: extracting the cannabinoid from the hemp plant itself or through a chemical conversion in which the hemp CBD is dissolved in a solvent, said Grigaitis. The company is exploring both methods to determine the pros and cons of each, he said.
Because the source is hemp rather than marijuana, he sees a clear path to sell his product beyond dispensaries, which come with extensive regulations and taxes and therefore narrow profit margins. Why would he sell at a dispensary, he asked, “when you could go next door to a CBD store or a vape store or a grocery store or a bar and sell your stuff?”
Marijuana laws are changing: It doesn’t help everyone with beliefs.
But some in the industry disagree with Grigaitis’ interpretation of federal law. The proportion of dry weight refers to the amount in the plant, not a drink, said Jonathan Miller, general counsel for the Hemp Roundtable.
Rep. Chellie Pingree, D-Maine, tabled a bill that would change the 2018 law with additional restrictions on hemp-derived products. Pingree spokeswoman Victoria Bonney said the congresswoman was unavailable for an interview.
Meanwhile, at least a dozen states have passed laws limit sales of another hemp-derived substance, delta-8which is also intoxicating but not as strong as delta-9. But states have been slow to catch up with these new pharmaceuticals.
Miller hopes parts of Pingree’s legislation will be included in the 2023 Farm Bill, given that the 2018 bill expires next year. The roundtable seeks to regulate the amount of THC in finished products rather than the plant alone and to restrict the sale of intoxicating hemp products in the adult market, such as in a pot dispensary, Miller said. Alternatively, the group wants it to be regulated like alcohol.
The organization includes board members from some of the biggest companies in the adult-use marijuana market, including its president, Pete Meachum. He is a lobbyist employed by Chronos Group, a Canadian cannabis company whose main shareholder is Altria, maker of Marlboro cigarettes and investor in Juul. Meachum declined an interview request.
“Anything that threatens the exclusivity of the regulated market is going to be of concern to those who have invested their time and money in it,” Grigaitis said.
But Miller said that with the new federal regulations, hemp-derived products “would be available in the same places where you can buy marijuana products, so the level playing field would be.”
Other industry groups and National Organization for Marijuana Law Reform have also asked the FDA to regulate hemp-derived products.
In the meantime, customers at Pop’s Blue Moon didn’t seem worried about the lack of regulation and were happy to try Grigaitis’ new seltzer. Harper Britz, a 21-year-old who works in the music industry, said she had a pleasant seltzer buzz. She liked the fact that she could taste the cannabis.
“It gets that aroma on the nose, just like when you smell wine,” said Britz, who lives in St. Louis and said she regularly uses cannabis. “I would probably drink this every day if I could.”
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and polling, KHN is one of the three main operating programs of KFF (Kaiser Family Foundation). KFF is an endowed non-profit organization providing information on health issues to the nation.
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