Language in Federal Spending Bill Could Accelerate Clampdown on Hemp Intoxicants

A recently released federal spending bill includes language that would put an end to the distribution of unregulated hemp products. Provisions in the new spending bill would distinguish between industrial hemp cultivated for food and fiber and plants cultivated to produce cannabinoid extracts.

The definition of hemp, under the new bill, includes naturally occurring and derived cannabinoids. Substances manufactured or synthesized from the plant, such as delta-8 THC, THCP, HHC, THC-O-acetate and delta-10 THC, will no longer meet the legal hemp definition.

The market is filled with these intoxicating products, thriving after the 2018 Farm Bill legalized hemp and left a loophole that allowed delta-8 THC and other psychoactive hemp-derived substances to be sold as alternatives to marijuana.

Congress has some incentive to act on the appropriations before Oct. 1, 2024, when the new fiscal year starts. This is encouraged, particularly since the next farm bill isn’t expected to be finalized until the end of this year or the beginning of 2025.

The intoxicating compounds being targeted are manufactured by synthesizing CBD derived from hemp to produce concentrated psychoactive substances. The effects of these compounds are similar to those produced by delta-9 THC.

Products that contain these substances, commonly referred to as marijuana light and diet weed by consumers, are sold in the form of edibles such as gummies. They are also packaged in bright colors, which appeals to younger individuals. These products are available to both young and old consumers in common retail outlets, including hemp shops, bodegas and convenience stores.

States are also working to remove these products from their jurisdictions, citing safety concerns. This is being supported by medical and recreational cannabis stakeholders, who claim that hemp intoxicants unfairly competed in the market because they don’t incur any fees and are not regulated by states with legal cannabis markets.

The FDA has also given warnings to consumers about hemp-derived intoxicants, stating that these unregulated and unsafe products may contain harmful compounds and should be kept away from children and pets. The agency even sent some companies warning letters for selling products that contained delta-8 THC synthesized from industrial hemp.

A few weeks ago, law enforcement officials from 20 states as well as the District of Columbia penned a letter to Congress urging officials to use the next farm bill to address the spread of these unregulated products. In the letter, the officials noted that these products present a significant threat to public safety and health and benefited untaxed, unaccountable and unregulated market parties.

Cannabis companies such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) could be watching the goings-on on Capitol Hill to see if the suggested reforms plugging the loopholes in the farm bill are passed into law and how these could impact the cannabis industry.

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