DEA confirms Delta-8 THCO & Delta-9 THCO are schedule I controlled substances but confusion remains

The US Drug Enforcement Agency (DEA) recently stated that delta-8 THC acetate ester (delta-8 THCO) and delta-9 acetate ester (delta-9 THCO) are not hemp, but Schedule I controlled substances under the Controlled Substances Act (CSA). The DEA’s decision stems from its finding that these chemicals do not naturally occur in hemp. But the DEA’s conclusion appears to be in tension with the statutory definition of hemp and the Ninth Circuit’s opinion in AK Futures Ltd. Liab. Co. v. Boyd St. Distro, Ltd. Liab. Co., 35 F.4th 682 (9th Cir. 2022), which don’t tie a chemicals status under law to whether it is synthetic or naturally occurring but rather on its source. Although companies should operate in compliance with the DEA’s new guidance, it remains unclear whether this will be the final word on the legality of delta-8 THCO and delta-9 THCO.

The 2018 Farm Bill defined hemp to include all “derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers” with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis. 21 U.S.C. § 802(16)(B)(i). Hemp, of course, is excluded from the definition of marijuana and Schedule I under the CSA. 21 C.F.R. § 1308.11(d)(31)(ii). Tetrahydrocannabinols (THC), including those “naturally contained” in the cannabis plant as well as their “synthetic equivalents,” remain controlled Schedule I substances. 21 U.S.C. § 812; 21 C.F.R. 1308.11(d)(31).

Importantly, delta-8 THCO and delta-9 THCO are not the same things as delta-8 THC and delta-9 THC, respectively. Some (albeit small) amounts of delta-8 THC and delta-9 THC naturally occur in hemp, whereas THCO does not. Although both acetate esters can be made from hemp, the DEA’s letter determined they do not meet the definition of hemp because the acetates “do not occur naturally in the cannabis plant and can only be obtained synthetically.” Moreover, the acetate esters have similar chemical structures and pharmacological activities to tetrahydrocannabinols contained in the cannabis plant, and thus are properly considered a synthetic THC subject to Schedule I.

The DEA’s letter doubles down on its position that cannabinoids must naturally occur in the cannabis plant (and meet the delta-9 concentration limit) to be considered hemp. In 2020, DEA issued an interim final rule that states all “synthetically derived tetrahydrocannabinols remain schedule I controlled substances.” See 85 Fed. Reg. 51639, 51641 (Aug. 21, 2020). DEA later reiterated its position that any cannabinoids that meet definition of hemp are not controlled under CSA. In this 2021 letter to the Alabama BOP, DEA stated that delta-8 THC produced from non-cannabis materials would be controlled under the CSA, but tetrahydrocannabinols derived from hemp that meet the delta-9 concentration limit are not. A DEA representative echoed similar comments in a 2021 Town Hall with the Florida Department of Agriculture.

The DEA’s position, however, does seem somewhat in tension with the statutory definition of hemp and a recent Ninth Circuit decision on a similar issue with delta-8 THC. The definition of hemp is not premised on the cannabinoid, derivative, extract, isomer, etc., “naturally occurring” in the hemp plant. For example, delta-8 THC, as noted, occurs naturally in only small amounts in hemp, so most delta-8 on the market today is extracted from concentrated CBN or CBD through a chemical conversion process. Some have taken that to mean that delta-8 THC is a prohibited synthetic due to the manufacturing process. Yet the Ninth Circuit ruled last year that hemp-derived delta-8 THC is not controlled under the CSA and expressly disagreed with the defendant’s position that the DEA’s interim rule means that delta-8 is a Schedule I synthetic tetrahydrocannabinol. AK Futures Ltd. Liab. Co. v. Boyd St. Distro, Ltd. Liab. Co., 35 F.4th 682 (9th Cir. 2022).

The ruling’s interpretation of the statutory framework invites some scrutiny of the DEA’s current subregulatory position. AK Futures concerned a trademark infringement dispute and an appeal related to a request for injunction over branded delta-8 THC vape products. The court stated unequivocally, “the plain and unambiguous text of the Farm Act compels the conclusion that the [hemp-derived] delta-8 THC products before us are lawful.” Id. at *15-17 (A straightforward reading of § 1639o yields a definition of hemp applicable to all products that are sourced from the cannabis plant, contain no more than 0.3 percent delta-9 THC, and can be called a derivative, extract, cannabinoid, or one of the other enumerated terms.). The court also rejected the defendant’s arguments that delta-8 THC is a synthetically derived tetrahydrocannabinol prohibited by the DEA’s interim rule. Id. at 21-23. The Ninth Circuit’s opinion noted that the interim rule also states that “the Farm Act does not affect ‘the control status of synthetically derived tetrahydrocannabinols’ because hemp, as defined by the statute, ‘is limited to materials that are derived from the plant Cannabis sativa L.’” and that the “Farm Acts definition of hemp does not limit its application according to the manner by which ‘derivatives, extracts, [and] cannabinoids’ are produced. Rather, it expressly applies to ‘all’ such downstream products so long as they do not cross the 0.3 percent delta-9 THC threshold. . . . [the] source of the product . . . is the dispositive factor.” Id. at 692-93. By this reasoning, it would seem that even delta-8 THCO, if specifically derived from hemp, could theoretically meet the definition of hemp.

It will be interesting to see whether the DEA’s final rule (expected later this year) codifies its interpretation that only cannabinoids occurring naturally in cannabis can meet the definition of hemp. In the interim, companies should take this guidance as binding, and consider that all hemp-derived synthetic cannabinoids that do not naturally occur in the plant as controlled substances that are illegal to manufacture, distribute, or sell under federal law.

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