RED TAPE JUNGLE

Uncertainty and confusion reign for CBD industry amid DEA’s new interim rules

STORY by TOM BOWERS @PROPAGATECONSULTANTS for LEAF NATION

The pathway to cannabinoid legalization weaves through a thick jungle of red tape.

Advocates hack their way through the tangles using scientific rigor and popular support, but with every swing of the machete, more vines cascade from the stifling canopy of bureaucracy. The legal cannabinoid industry took a huge leap forward with the 2018 Farm Bill, which legalized the sale of hemp-derived cannabinoid products as long as they were manufactured from plant material that contained less than 0.3% delta-9 THC by dry weight. As the summer of 2020 came to a close, the DEA released an Interim Final Rule (IFR) regarding cannabinoids that have people questioning whether the drug enforcement arm of the government is opening a backdoor that will allow for the prosecution of the CBD and nascent delta-8 THC industries.

“If they go ahead with this, we’ll be back to the, ‘It’s technically illegal, but we just hope you won’t enforce it.’ ”

T E D B E R N H A R D , C U LT I VA L AW OREGON OFFICE MANAGING DIRECTOR

MITIGATING THC OR MITIGATING RISK

When it comes to legal products, the Farm Bill clearly outlined what constitutes federally legal plant material. According to the text, hemp flower with less than 0.3% delta-9 THC is considered legal.

The problem with the bill, and the DEA’s new IFR, is that it muddies the water regarding extraction. Just ask Ted Bernhard, Managing Director of the Oregon office of Cultiva Law, which operates Cannabis industry-specific law practices in Washington, Oregon and California.

“During extraction and processing, they may end up over the 0.3%, even if their end product is compliant and less than the 0.3%,” Bernhard said during a phone call in September.

Think about that for a moment. The way the IFR and Farm Bill are written - even if the flower and the end product are both compliant - during the extraction process, the material could enter the realm of noncompliance. That’s because the extraction process concentrates the compounds, which then undergo dilution later in the manufacturing process.

“They technically would be in possession of illegal marijuana at that point,” Bernhard said, referring to the extraction stage.

As an exercise, consider if it were alcohol. Many states have rules regarding alcohol content for end consumers. During distillation, alcohol content can reach concentrations of 90% before being diluted down. In its 90% stage, it would be illegal to sell in many states - hence the dilution. Imagine a governmental enforcement agency putting rules in place that would allow them to bust down the doors in the middle of the distillation process, before the alcohol is diluted into vodka.

According to Bernhard and many others familiar with the situation, the DEA’s proposed rule has the same effect for the hemp industry. The IFR effectively makes it possible for the DEA to bust into an extraction facility during this midpoint, and charge operators with possession of marijuana under the Controlled Substances Act.

Though the IFR isn’t entirely off-brand for the DEA, lawyers, policy geeks and industry business owners are gobsmacked by the vagueness and potential for harm it introduces to the hemp industry.

“What actual harm is it if during the processing process, it rises above that percentage? It’s not an environmental hazard,” Bernhard said. As long as the end product is compliant, he argues, it should not matter.

D E LTA F O R C E

In its current state, the IFR could cause damage to the huge CBD industry, as well as the emerging delta-8 tetrahydrocannabinol (delta-8 THC) market - which in the years since the Farm Bill - has been gaining popularity with entrepreneurs and patients in the therapeutics community.

According to the National Institute of Health’s National Library of Medicine, delta-8 tetrahydrocannabinol (THC) is an analogue of THC with “antiemetic, anxiolytic, appetite-stimulating, analgesic, and neuroprotective properties,” and offers those potential benefits with a significantly lower psychotropic potency than delta-9 THC, which is the compound responsible for the classic high most people associate with traditional Cannabis consumption.

Studies have shown a significantly positive impact on the side effects of chemotherapy when delta-8 THC is administered, with the potential beneficial uses of the cannabinoid generating a significant and growing demand in the market.

The Farm Bill and the IFR create two problems for the delta-8 industry. First, as currently written, the rules prohibit the manufacture and sale of “synthetically derived” THC. Bernhard says the definition of “synthetically derived” is too vague, leaving it open to interpretation, and thus exposing manufacturers to risk of prosecution.

Since DEA rules prohibit the creation and distribution of synthetic cannabinoids, as well as the extraction of cannabinoids from any plants with more than .3% delta-9 THC by dry weight, the only avenue for those who wish to produce and market delta-8 is from hemp. But then manufacturers run the risk of temporarily being in the possession of material with greater than 0.3% delta-9 THC during the extraction process, running into the aforementioned issues.

Unless the language is clarified in order to allow for the extraction process, involvement in both the CBD and the delta-8 markets will be rife with risk.

“It could cause people not to stay in the business, or decrease the supply,” Bernhard said. “I’m not seeing anyone who’s getting out of the business because of this, but I think the hope is to get some greater clarification.”

The way Bernhard sees it, unless the rules are changed, the entire hemp and Cannabis industries will take a huge step backward.

“If they go ahead with this, we’ll be back to the, ‘It’s technically illegal, but we just hope you won’t enforce it,’” he said. “That’s not good for raising capital, that’s not good for planning.”

For those who want to help influence the future, it’s not too late. The DEA is currently accepting public comments on the IFR until October 20.

For the time being, Bernhard remains optimistic for the industry and hasn’t seen much panic at this point.

“As of now, people are staying level-headed,” he said. “Pushing for change and submitting their comments.”

PACHAMAMA COFFEEWITH ELMHURST GOLDEN MILK HEMP CREAMER AND BIG PETE’S TREATS CINNAMON & SUGAR COOKIES

TANNINS | PACHAMAMA COFFEE WITH ELMHURST GOLDEN MILK HEMP CREAMER Sacramento-based Pachamama Coffee not only tastes fresh and finely roasted, but is entirely owned and governed by smallholder farmers across South America, Mexico and Ethiopia. Their Five Sisters medium roast blend is a coffee lover’s paradise – not too strong, but not too weak. Prepared through my preferred method of French Press, even if brewed with slightly too much water, this blend stands strong and does not lose its potency. Its low acidity, amber hue, and tones of grapefruit and honey go perfectly with agave – or equally pleasant without. Five Sisters truly carries that caffeine boost we all love, without the added bitterness of most brands.

Instead of my usual almond milk, I combined Five Sisters with the creamy Elmhurst Golden Milk Hemp Creamer for a robust boost of spice and turmeric. The nutty and creamy texture were reminiscent of a spiced eggnog, bringing a flavor profile that keeps you on your toes naturally without the jitters. Overall, a mindful cup that nourishes the body and mind.

TERPENES | BIG PETE’S TREATS CINNAMON & SUGAR COOKIES The Feurtado Family from Santa Cruz delivers big love in small bites – and they make it nearly impossible to eat just one of Big Pete’s Cinnamon & Sugar Indica Cookies. As a cookie alone, it’s delicious. As soon as you snap the bag open, you are smelling the beginning of sweater weather, sprinkled with the nostalgia of falling leaves and Cinnamon Toast Crunch. Soft yet crunchy, these cookies have a prominent yet pleasant cannabutter taste that melts on your tongue.

With 10mg of THC in each tasty cookie, this high had me active, focused, positive and productive. After two cookies and in just two hours, I was organized and packed for my flight, worked out, walked the dogs and still had enthusiasm to catch a few shows on Netflix with family.

It sends you to bed gradually without the couch-lock, so you’re able to keep the good vibes for an early morning rise the next day.

These products combined not only complement each other taste-wise, but are an overall immunity booster.

Follow @pachamama_coffee @elmhurst1925 @bigpetestreats

*California Leaf Warning* Anytime you combine two substances of any kind, you have to be extra vigilant of the effects. We strongly recommend conducting pairings in a safe and private space, in small quantities with friends. Always use a designated driver or have a plan to get home safely. THE PAIRING I couldn’t have found a better pairing to be coupled together than this. Especially to kick off October and the flavor preferences that fall tends to bring. The Five Sisters Pachamama blend with the Elmhurst Golden Milk Hemp Creamer and Big Pete’s Cinnamon Sugar Cookies are a culinary heaven for my taste buds. For mindful eaters, the ingredients of cinnamon and turmeric are essential when combatting inflammation of the lungs – especially during fire season on the West Coast. These products combined not only complement each other taste-wise, but are an overall immunity booster. Give this feel good pairing a try and send profit right back to the Pachamama farmers of its origin, all the while uplifting yourself for the world ahead.