Delta-8 THC: More Risk than Reward
October 15, 2021
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Ward and Smith's Hemp and Cannabis Law attorneys recently attended the fifth annual Industrial Hemp Summit. After another year of adjustments and uncertainty caused by COVID-19 and other global factors, it was refreshing to attend the event in person again and to spend time re-connecting with businesses and thought leaders from across the hemp industry spectrum. Breaking from past tradition, this year's Industrial Hemp Summit was held at the North Carolina Biotechnology Center in the Research Triangle Park. But the core principles of the event itself were still the same, and the quality of the event, the venue, the information shared and gained, and the individuals in attendance were excellent.
USDA's Commitment to Hemp
William "Bill" Richmond, Chief of the U.S. Domestic Hemp Production Program at the U.S. Department of Agriculture ("USDA"), served as the keynote speaker at the opening of the conference. It is clear that he and his staff are committed to the continued growth and development of a viable domestic U.S. hemp production market. North Carolina is one of the few states and Indian tribes to transition into a USDA-controlled hemp production program, with that transition taking effect on January 1, 2022. And recent data released by the USDA on the value of national hemp production in 2021 reveals that, despite challenges across the country, hemp remains a viable and valuable domestic crop. In particular, that report indicates that in 2021, North Carolina remained in the top 10 states for both acres grown and acres harvested of hemp. North Carolina remains an attractive marketplace for the industry, despite challenges over the last few years. It will be interesting to see how North Carolina's transition to a USDA-led hemp production program will impact those numbers in future reports. The USDA is keenly aware of the need for more data from the industry to develop more specific, data-driven policies in the future. It will continue to solicit both required reports under its Final Rule for Establishment of a Domestic Hemp Production Program and voluntary surveys and data production from the industry to help craft informed policies moving forward.
Collaboration Within the Industry
As in prior years, the panelists and presenters seemed to agree: industry participants and trade groups can, and should, continue to find unity and common ground for collaboration without letting perfection or competition get in the way of collective progress. This theme was mentioned multiple times throughout the two-day conference and was evidenced by the cross-section of business attendees and various trade groups in attendance. Huber USA, West Town Bank & Trust, and VF Corporation financially sponsored the Summit to make the event possible and sent teams of interested and engaged individuals to attend and find new ways to offer support and growth within the industry itself. The National Industrial Hemp Council of America, U.S. Hemp Building Association, NC State University, Clemson University, and other not-for-profit industry participants, researchers, regulatory agencies, and trade groups also attended to offer their perspectives, expertise, and support for the industry.
Other Trends and Developments
Cannabinoid and floral production continues to lead the way within the industry today. But, this sector of the industry continues to face regulatory uncertainty and most panelists agreed, the FDA is unlikely to create a regulatory pathway to market for hemp-derived cannabinoids in dietary supplements and/or food and beverage products. Minor cannabinoids continue to drive market growth in this sector of the industry. And a clear divide seems to exist for many in the industry over the question of how intoxicating hemp-derived products, like Delta-8 THC, Delta-9 THC, and other THC isomer products, should be tested, treated, and regulated within the market.
But, fiber and food applications are making significant strides toward developing the necessary local and regional supply chains. There seems to be nationwide traction away from floral hemp production and a corresponding rise in fiber and grain processing plants and facilities. Genetics are key, and the proper plant varietals must still be better identified on a regional basis, but positive gains are being made in that regard. With additional time, research trials, and the submission of more detailed and relevant fiber and grain data to state and federal regulators, there are opportunities for performance-based sampling and a shift away from strict compliance THC testing for the non-floral sectors of the industry. Hemp fiber and grain markets can expect to see continued growth and development and a continued buildout of the overall supply chain for those markets.
Challenges and risks remain, but the future is still bright for hemp, and the industry is well-positioned for continued growth on all fronts. As legal and regulatory foundations continue to settle and develop, it is imperative that hemp participants of all kinds – cannabinoid, industrial, or other focused uses – stay abreast of these changes and developments. It is also important for hemp businesses to better utilize and adopt commonplace business and legal best practices when entering into agribusiness, transactional, and corporate deals and agreements within the industry. Keep in mind the message of unity and collaboration, and let's celebrate and support one another's successes as we work together to advance the industry for the benefit of all. Ward and Smith's Hemp and Cannabis Law team is committed to assisting in that effort.
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