Counterpoint: Hemp-Derived CBD->Delta-8 is Not Controlled

A Deeper Legal Dive

The last essay discussed this:

The assertion here is that when delta-8-THC is made “by a chemical reaction starting from CBD” it is “synthetic” and therefore “not exempted by the AIA.” That’s DEA’s view. DEA considers the majority of delta-8 on the market today to constitute a Schedule I substance due to its conversion method. That’s a fact.

There’s more to this story, however, which we discuss below. The fact that DEA has authority to answer questions like this one under the CSA doesn’t mean it always answers them correctly. And in this case, there is a reasonable and persuasive counterargument, i.e., that DEA is wrong. In fact, we’re fairly sure DEA is wrong.

That a reasonable — perhaps even better — counterargument exists, does not mean that it is the law today. As stated earlier, “unless and until a federal court overrules” DEA’s reading, “or Congress changes the law,” DEA’s reading above is likely “authoritative.” That remains true. And from that authoritative view, far-reaching effects apart from criminal prosecution can follow, including banking opportunities and taxes.

That means that if you’re a delta-8 bro and want the law changed, you might not want to wait for a bank to drop your business, for example—or worse—for the issue to be resolved unfavorably (for you) in some other court proceeding. Rather, you may want to consider saddling up and possibly get a declaratory judgment. We know this much: LinkedIn debates and “opinion of counsel letters” will not help you.

Okay, so here it goes. The counterpoint.

Our argument builds on Rod Kight’s analysis here + here. Although we disagree on the Analogue Act analysis¹, the plain meaning discussion of “derivative” is sound. And as explained below, we agree that whether delta-8 is synthetic is beside the point. But that just scratches the surface. There’s a better argument available that no one has made yet.

1.

To begin, structurally, hemp is legal by way of exclusion. The CSA defines “marihuana” to be all parts of the cannabis plant and then excludes “hemp” as defined in the 2018 Farm Bill from “marihuana.” Thus, if an item meets the definition of “hemp,” it necessarily is not “marihuana.”

The same can be said for synthetic THC. Although the CSA and regulations merely list “THC” without the “synthetic” qualifier, court cases establish that the listing of THC refers only to synthetic THC and not THC that occurs naturally in cannabis. Because Congress also carved “hemp” out of THC, however, something that is “hemp” necessarily is not “THC” either.

Here is the definition of “hemp”:

The term “hemp” means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.

2.

The first important observation is the exclusion. Congress carved “hemp” out of both “marihuana” and “THC.” Moreover, it is an interpretive principle that Congress is aware of prior regulatory interpretations. Here, that means Congress legislating against a backdrop of THC in the schedules referring only to THC that is not found in cannabis. That’s what the Ninth Circuit said in HIA.

Therefore, the fact that Congress carved hemp out of THC means that Congress carved hemp out of synthetic THC. This point is critical because it means hemp must include at least some synthetic substances; otherwise, it would make no sense to statutorily exclude hemp from THC, which again refers only to synthetic THC. If hemp only covered natural extracts, for example, then it would make scant sense to exclude a natural item from a synthetic class, i.e., synthetic THC. Put more simply, it makes no sense to carve a class of exclusively naturally occurring cannabinoids from a class of exclusively man-made cannabinoids.

This notion is further supported by the text of the “hemp” definition. “Hemp” includes not only hemp “derivatives” but “salts” and “isomers.” If “hemp” included only cannabinoids that could be naturally extracted, as Dr. Boos indicates in his correspondence, why include language like this? There would be no point in listing “isomers” and “salts.” And, if Dr. Boos is correct, what is the difference between “derivative” and “extract”? By his reasoning, delta-8 extracted directly from cannabis is hemp and not Schedule I synthetic THC, but delta-8 derived from cannabis is Schedule I THC. That can’t be right, though, because it would effectively write the “derivatives” out of the Farm Bill’s definition of hemp.

Boiled down, nothing about the “hemp” exclusion suggests it applies only to natural products, directly contrary to the Boos letter. In fact, it is the opposite: that “hemp” is excluded from marihuana and THC—i.e., tetrahydrocannabinols that do not naturally occur in cannabis—inherently means that “hemp” includes non-naturally occurring tetrahydrocannabinols. As we next explain, “hemp” must include “semi-synthetic” hemp-derived cannabinoids other than delta-9 THC.

3.

Is delta-8 made from a chemical reaction with hemp-derived CBD a “synthetic”? Probably not. At least, it isn’t according to DEA’s consistent past practice. Delta-8 made in such a way is best described as a “semi-synthetic.”

No, we didn’t make that term up. Here, way back, DEA explains the paradigm with narcotics. Morphine, which is the principal constituent of and naturally occurs in the opium poppy—and therefore can be extracted—is a “narcotic of natural origin.” Heroin is “semi-synthetic,” because it can be synthesized from morphine. Methadone, however, is “synthetic” because it is not “derived directly or indirectly from narcotics of natural origin.”²

And it is rooted in science. According to the Chemical Entities of Biological Interest, which Wikipedia describes as “a chemical database and ontology of molecular entities focused on 'small' chemical compounds,” a “semisynthetic derivative” is “[a]ny organic molecular entity derived from a natural product by partial chemical synthesis.” “Partial chemical synthesis” is “a type of chemical synthesis that uses chemical compounds isolated from natural sources.”

That describes heroin. And it also describes Delta-8 synthesized from hemp-derived CBD. Hemp-derived delta-8 is made from CBD, a cannabinoid of natural origin.

So, Delta-8 is best described as “semi-synthetic,” not “synthetic.” As we next discuss, however, this is a distinction without a difference—under the logic of HIA, before the hemp exclusion, THC likely included all “semi-synthetic” and “synthetic” tetrahydrocannabinols. What matters is that a “semi-synthetic” is inherently a derivative of a natural compound.

4.

Congress removed “hemp” from THC. So, the precise question ought not to be whether delta-8 made from hemp-derived CBD is “natural,” “semi-synthetic,” or “synthetic.” Indeed, Dr. Boos’s statement that delta-8 is “synthetic” is beside the point. The only relevant question is whether delta-8 from CBD is a hemp “derivative.” If it is a hemp derivative, then it is hemp and hemp-derived delta-8 is carved out of both “marihuana” and “THC.”

MS Paint Pros

First, we need to understand the origins of these words in the statute. The definition of “hemp” is not an original 2018 Congressional creation. Rather, it is stock language borrowed from how the CSA historically treated other plants. For example, consider the longtime definition of coca leaves:

(4) Coca leaves (9040) and any salt, compound, derivative or preparation of coca leaves (including cocaine (9041) and ecgonine (9180) and their salts, isomers, derivatives and salts of isomers and derivatives), and any salt, compound, derivative, or preparation thereof which is chemically equivalent or identical with any of these substances

This broadly sweeping language was likely used to ensure that derivatives of scheduled compounds wouldn’t fall through the cracks and would also be subjected to control. The “hemp” exclusion, in contrast, is about removing control—the opposite. But it uses the same language. Oops!

Opposite it may be, but as a matter of textualism and ordinary meaning statutory interpretation, that ought to be irrelevant. The presumption of consistent usage is not an absolute one, but it is weighty: “[a] word or phrase is presumed to bear the same meaning throughout a text.” A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 170 (2012). The CSA thus should be interpreted the same way in both directions.

Because of this principle, it is instructive to go back and see how DEA has interpreted and applied the word “derivative” in the past with respect to other plants to sweep other semisynthetic substances in. Start with [¹²³ I]Ioflupane, a drug used in nuclear medicine for diagnosing Parkinson's. Before descheduling it in 2015, DEA stated it was, “by definition, a schedule II controlled substance because it is derived from cocaine via ecgonine, both of which are schedule II controlled substances.” Something was a derivative because it was one chemical reaction away from the controlled substance.

This is no anomaly. For example here, in 2019, DEA noted that “6β-Naltrexol is currently a schedule II controlled substance because it can be derived from opium alkaloids.” The substance “is formed when the 6-keto group of naltrexone goes through a reduction process.”

Or, go back to the 1975 publication linked above. There, too, we see DEA describe “semi-synthetics” like delta-8 as “derived.”

So, for DEA to conclude that delta 8 is not a derivative, it would have to reverse course on prior interpretations of the CSA. Treating hemp-derived delta-8 in a manner inconsistent from how it has treated other substances in the past without explanation is classic arbitrary and capricious agency action.

5.

As previously noted, the Court in AK Futures LLC v. Boyd St. Distro, LLC, 35 F.4th 682 (9th Cir. 2022) never reached the precise issue of delta-8 made through CBD conversion. But in its holding, it made remarks in passing that help the pro-hemp-derived delta-8 read of the statute:

To the extent that this copy of the schedule suggests that hemp-derived delta-8 THC remains controlled regardless of its delta-9 THC concentration level, this is inconsistent with both statutory text and the DEA's own duly enacted regulations.

Because hemp-derived CBD is itself hemp, delta-8 derived from hemp-derived CBD is also hemp-derived, and as such, is also hemp and excluded from the definition of “marihuana” and “THC.” That is the best and perhaps unambiguous reading of the statute.

Conclusion

So what’s the import of all this?

Hemp derived delta-8 sold for human consumption may still be subject to the Analogue Act.³ When sold as a drug in interstate commerce, it certainly is subject to the Food Drug and Cosmetic Act. But there is a great argument to make in court—and maybe even a winning argument—that it may not be a controlled substance.

1. The HIA court opined that THC on the schedules did not include “THC that is found within the parts of Cannabis plants.” But semi-synthetics aren’t “found within” the plant.

2. The term is still occasionally used, such as in footnote 3 of this 2020 DEA notice. In this 2002 Final Rule, DEA described buprenorphine as a “semi-synthetic opioid derived from thebaine.” In 2014, hydrocodone was described as “semisynthetic.”

3. Rod Kight says this “position does not have merit and is not worth discussing here.” This is, of course, not really an argument. The notion that Congress removed “hemp” by statute which therefore “overrides any contrary general provisions in the [Analogue Act]” is an involved inquiry rooted in the law of conflict preemption and implied repeal. The end of this essay touches on the argument.