Told You So ....

Synthetic delta-8 is just as illegal as marijuana and subject to 280E

Matt recently reported some “bad news [for] D8 Bros” that we learned while attending a DEA Supply Chain Conference back in May:

On May 2 and 4, I attended the DEA Supply Chain Conference here in Houston, TX. I will be writing up a trip report this weekend.

It was a fantastic event for DEA registrants in the supply chain, rich with information about the CSA and agency perspectives—and straight from the horses mouth. I learned a ton.

For example, bad news D8 bros: better start paying your 280-E taxes. D8 is no more legal under federal law than good ‘ol fashioned weed. According to Terrence Boos, the guy who penned the Pennington DEA Seed Letter and the Kight THC-O letter, “if it is synthetic and it contains a Tetrahycannabinol, for example delta-9 THC which is going to be produced through any chemical synthesis, it’s still defined as a controlled substance under the CSA.” Thus, D8 that is chemically synthesized from CBD is a synthetic. Any tetrahydrocannabinol made through a chemical synthesis is synthetic THC and in Schedule I. Nearly all marketed D8 is synthetic. Only D8 that is extracted is hemp. BTW, DEA is right.

In the wake of Matt’s post, we’ve heard from some critics and skeptics who didn’t believe (or perhaps didn’t want to believe) what Dr. Boos said. Well, I was combing through PACER last night, reviewing filings from one of the many recent lawsuits challenging state-level bans on delta-8. Lo and behold, I found written confirmation of Matt’s earlier report in the exhibits supporting a party’s briefing:

So, for those of you who weren’t inclined to take Matt’s word for it, there it is in black and white—straight from the horse’s mouth.

What’s the big deal you ask? Well, DEA’s view on this is super important for at least two reasons.

First, unless and until a federal court overrules it or Congress changes the law, it is authoritative.

Second, it bears on the lawsuits challenging delta-8 bans. Many (all?) are premised on the notion that the 2018 Farm Bill descheduled delta-8 by removing from the definition of schedule I “marihuana” all derivatives, extracts etc. of the cannabis plant so long as they have no more than .3% delta-9 THC on a dry-weight basis. The fact that DEA’s Chief Chemist, Dr. Boos, overtly rejected that notion is a problem for advocates of the position. After all, Dr. Boos is the guy who makes “official determinations” regarding the scheduling status of substances on behalf of DEA. That means he speaks with authority on precisely this question. As such, a federal court facing the issue would likely defer to his (DEA’s) views here.¹

So, if you market delta-8 derived from CBD (which almost everybody who markets delta-8 does) then as a matter of federal law, you market schedule I synthetic THC—not hemp. That means your products are as illegal as marijuana, and your business is subject to 26 U.S.C. 280E. In fact, because there’s no Rohrbacher-Farr amendment or DOJ non-enforcement policy protecting your delta-8 business, all things being equal, you’re actually more likely to face enforcement than some marijuana operators.

A couple of final notes.

First, Dr. Boos’s views don’t contradict the Ninth Circuit’s holding in AK Futures, which Matt discussed here. The court in that case held that delta-8 extracted or derived from hemp is not a controlled substance. It didn’t address the issue Dr. Boos weighed in on in the email above (and at the DEA Conference Matt and I attended), namely, whether delta-8 that is derived from CBD is synthetic THC and therefore a schedule I substance.

Second, we’re not saying Dr. Boos’s view is correct. As Matt explained in his AK Futures post linked above, the legal status of CBD-derived delta-8 hinges primarily on what the words “derivative” and “extract” in the 2018 Farm Bill’s definition of hemp (and in various CSA provisions) mean. We believe there are arguments on both sides of that question. Our point is simply that right or wrong, Dr. Boos’s views are authoritative and likely to get some level of deference from a court. So, until a court or Congress says otherwise or Dr. Boos changes his mind in an official determination, that’s the end of the conversation.

1. Of course, Dr. Boos hasn’t made this particular statement in an “official determination.” But as the seed letter I got from DEA shows, getting him to do so would not be difficult at all.