Laws
Under 0.3% THC by Net Weight – The Greatest Loophole in Drug Law History?
Under 0.3% THC by Net Weight – The Greatest Drug Law Loophole in History
There was not supposed to be a 3rd article to the to the two-part series on “Delta-8 THC from hemp”, and how there is a Civil War going on in the cannabis space between the “hemp guys with Delta-8 and 9 from hemp”, and the “regular marijuana guys with “real-deal Holyfield THC weed”.
But like every sequel, more information has come to light in order to make this groundbreaking 2-part expose on Delta-8 and Delta-9 THC into a full-fledged trilogy.
If you have not read the first two pieces on the evolution of hemp-based cannabinoids that are legal under the 2018 Farm Act, including the Delta-8 THC and even Delta-9 THC, then you need to read them first.
The first piece is entitled, “The Marijuana Industry Is Dead”, liking the development of Delta-8 THC to Prince’s famous quote in 2010 about the internet being dead with the development of the app stores.
The follow up piece, called “D8 vs. D9 – The Cannabis Industries’ Civil War”, was a follow up article explaining the changes, most notably the nano emulsion process that is now being used to shrink down hemp cannabinoids in order to get them into soda and seltzer form. This “shrinkage” of the THC molecules to 20ng-50ng allows the molecule to pass directly into the blood stream, cutting down on activation time and enhancing the effects by 10x the usual Delta-8 THC. Hence, getting really high off hemp is now a real thing, and deadly for the marijuana plant industry.
In the first two pieces we covered if the Delta-8 molecule was in fact legal and how the new delivery method was a game changer for the entire hemp cannabis industry. The second article covered how liquid, because of how dense and heavy it is compared to dry flower or leaves, was a gamechanger as well. Now, “0.3% or lower of THC to be consider hemp” allows the new weight levels to drastically increase THC amounts, even staying well under the 0.3% required by law.
But wait, isn’t the 0.3% or less of THC by dry flower weight? A can of seltzer or soda with hemp in it is not dry flower by any stretch.
Remember, to this point, the gamechanger points were that hemp and all its components were legalized under the 2018 Farm Act. Two, the nano emulsion process, shrinking the molecule to get directly into the blood stream, changed the game for “getting high from hemp”. Delta-8 went from “kind of, sort of high, I think I feel it”, to “holy moly I am stoned to be-jesus”. As Delta-8 companies start rolling out Delta-9 THC products made from hemp, how can that be legal? Delta-9 is the real deal THC, the one that is banned by the Federal government.
Cannabis by definition of Federal Law is anything above 0.3% Delta-9 THC by product weight. THC that is derived from hemp and is testing at .009% in some Delta-9 beverages is 33x under the legal limit. Most of the biggest Delta-8 and Delta-9 brands do this type of math with edibles now all over the country, but liquids like seltzers and sodas can get away with more because it’s in a 355 ML drink vs a 4-6 gram gummy. So now you understand the significance of liquid weight and nano emulsion technology. It made hemp, marijuana basically.
Federal Law permits the sale of hemp products that contain less than 0.3% Delta-9 THC by weight. This rule is applied to all hemp products as there are no sub-categories such as edibles, beverages, vapes, etc. You can go to any head shop in North America outside of the states that have banned Delta-8 or 9 from hemp, and you will see Delta-9 products all over the shelves. But these Delta-9 products form hemp only contain a few milligrams of THC because they are in lesser weight products like gummies.
Regarding the 0.3% by dry weight question, one that anti-hemp protagonists cite, the best reference for this debate in regards to the FDA and DEA stances on this subject in reference to eating a gummy or drinking a liquid is this this article, “Hemp Extracts: The Dry Weight Problem” released in January of 2021 that speaks on this issue in detail. The conclusion at that time was that liquids need to be measured differently than dry extract. You can find the specific formula used on page 4. Since then, the DEA has set a standard that gives its registered labs a way to deduct by volume.
The last page of the report, which states the FDA needs to adopt a volume-based unit of measurement for liquids, should be noted. This was 18 months ago and while the FDA has not adopted any standards yet, the DEA has set its own standards that all their registered labs must abide by. Those standards are 0.3% or less of THC.
What does that all mean? It means that as of right now, there is no standard on the books to differentiate 0.3% of THC by weight between dry flower, liquids, or gummies. The DEA standards are beneficial for liquids and says they must be under 0.3% THC to be considered legal.
Delta-8’s legality has withstood federal challenges, and at this point, all Federal panels and judges have ruled that the Delta-8 molecule from hemp is legal. All the ingredients are from the legalized hemp plant, so what can be illegal in this concoction?
This is important for the hemp industry because it sets precedent in the CYA scenario or Cover Your A$$. If you were to be hauled into a Federal court over selling Delta-8 or even Delta-9 from hemp, the Federal judge would have to “overrule” the other 3 cases and judges decisions that Delta-8 and Delta-9 that is under 0.3% is illegal. Not impossible, but not likely either.
Much of the legal marijuana industry has their head in the sand on this new industry, or they have their fingers in their ears singing “la la la” and they just hope it goes away.
I was recently on a show about this subject and debated a “true marijuana guy” who called me short sighted and almost foolish to think Delta8 and hemp derived Delta-9 would be important. It was a fad, a short-term window until the real deal stuff was legal.
I said, “That is exactly what I thought before I did research and got educated on the subject in-depth. I actually used those exact lines in our first article about what I thought the Delta-8 THC market was all about.”
Some people in the marijuana industry are like the band playing on the Titanic right now, unable to foresee a future where hundreds of millions of people are getting high, or a good night’s sleep, or losing weight, on hemp-infused drinks containing Delta-8 or Delta-9 cannabinoids.
These sodas and seltzers are legal, shipping around the country right now, getting people super high, and being sold at convenience stores, liquor stores, bodegas, and mini-marts.
Who needs dispensaries when you can sell this stuff to millions of retail outlets right now?
Who needs the marijuana plant THC when it is more restricted, more expensive to the consumer, and harder to get?
Remember that every consumer survey of marijuana consumers says 3 things are important to the consumer. Sorry branding guys, but your fonts and colors don’t mean squat according to consumer data. All consumers care about is price point, desired result, and how far or hard was it to get the product. They don’t remember colors, boxes, names, just how much did it cost, did it work well, and how far or long do I have to go to get it. Why is this important in hemp Delta-8 scorecard vs. marijuana?
Set up a future scorecard between hemp-infused Delta-8 and Delta-9 products. How much does each cost? Hemp is cheaper and more easily sourced. Winner hemp, one point. Did it work well? Hemp Delta-8 drinks at 30mg are identical to eating a cannabis 10 to 15mg edible. The high is so similar, regular cannabis users should try a “taste test”, or “high test” to see if they can tell the difference. Delta-9 THC from hemp actually is the same Delta-9 molecule you enjoy in regular cannabis, so that actually is identical! We will call that area a “push” or half a point for hemp and marijuana each, both are almost identical unless you are a true connoisseur of weed. Accessibility? Hemp Delta products are sold in liquor stores, quick marts, dispensaries, bodegas and just about anywhere you can buy cigarettes or alcohol. Winner hemp products, they can legally be everywhere, while marijuana is very much still a “dispensary thing only”.
So even if you aren’t passionate on one side or the other in this debate, you can see that consumer data has hemp-infused products beating regular weed products 2.5 to .5 points. That is huge, because in the end, what consumers want and will pay for is all that matters.
Want to know why cannabis prices are dropping like a stone? Why a pound of cannabis in Michigan is now below $122? The easy answer is that between the illicit and legal market we are seeing market saturation. While this is definitely true, don’t’ count out “legal hemp-infused products” as another venue pulling dollars away from the marijuana industry. For every person that orders a case of Delta-8 or Delta-9 infused soda or seltzer, or gummy for that matter, it is one less order of marijuana products or flower. Since hemp products are shippable by US mail, UPS, Fed Ex, and have withstood the Federal legal test, the consumer is wide open for them.
Could Delta-8 and hemp derived Delta-9 get so big that it could force marijuana legalization?
Wait, what?
Remember, Federal cannabis legalization is all about money, just like everything else. There are plenty of parties in the marijuana industry that DON”T want Federal legalization, they like the MSO idea and having state “moats” to keep profits higher and less competition in the space. What if that model of protectionism isn’t profitable anymore, and MSOs and all licensed cannabis growers and retailers push hard for Federal legalization? If hemp products can take a big enough piece of the pie with the market so less restrictive, will the restricted guys actually want legalization so they can compete with hemp products? Could hemp products clean the clock of marijuana products to the point to where the MSOs are begging for legalization so they can compete with Delta-8 and 9 hemp products shipping to consumers doorsteps?
What if the hemp industry gets 200 million people super high before the marijuana industry gets Federally legalized and can get to those people? Why switch to the more expensive, Federally illegal one, when this version does just fine and it cheaper?
If you are in the industry and think this is all poppycock and “a quick gimmick” market, I want to leave you with a business changing thought.
Thanks to the 2018 Farm Bill, some scientists, and a vaguely written Federal law, hemp can now get your really high.
Think about that when you fall asleep tonight.
Legal hemp can get you really, really high.
Business
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Business
Marijuana companies suing US attorney general in federal prohibition challenge
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Business
Pot Odor Does Not Justify Probable Cause for Vehicle Searches, Minnesota Court Affirms
The Minnesota Supreme Court affirmed that cannabis odor does not constitute probable cause to search a vehicle.
If Minnesota police search a vehicle solely based upon the smell of pot, they can’t justify searching a vehicle, even if there is evidence found of other alleged crimes. Even after appealing a lower court decision to suppress the evidence—twice—the Minnesota Supreme Court agreed, and the dismissal of his charges stands.
In a ruling filed regarding a case the State of Minnesota Court of Appeals on Sept. 13, the Minnesota Supreme Court affirmed that cannabis odor does not constitute probable cause to search a vehicle.
The case has been ongoing for two years. On July 5, 2021, just before 10 p.m., a Litchfield police officer stopped a car for an obscure local law: the light bar mounted on the vehicle’s grill had more auxiliary driving lights than are permitted under Minnesota law. The officer asked the driver, Adam Lloyd Torgerson, for his license and registration. Torgerson, his wife, and his child were present in the vehicle. The officer stated that he smelled pot and asked Torgerson if there was any reason for the odor, which he initially denied. But cops found a lot more than just pot.
A backup officer was called in. The couple denied possessing any pot, but Torgerson admitted to smoking weed in the past. The second officer stated that the weed odor gave them probable cause to search the vehicle and ordered them to exit the vehicle. The first officer searched the vehicle and found a film canister, three pipes, and a small plastic bag in the center console. The plastic bag contained a white powder and the film canister contained meth, which was confirmed in a field test.
Torgenson was charged with possession of meth pipe in the presence of a minor and fifth-degree possession of a controlled substance after the unwarranted search of Torgerson’s vehicle.
Police Aren’t Allowed to Do That, Multiple Courts Rule
But the search had one major problem—cops weren’t searching for a meth pipe. They only searched his car because they could smell pot, and the meth and paraphernalia were a surprise for everyone. Still, they had no grounds to search the vehicle. The man’s charges were later dismissed after the district court determined the odor of cannabis alone was insufficient basis for probable cause to search the vehicle, regardless of whatever other drug paraphernalia they found.
The state appealed the case, but the Minnesota Court of Appeals affirmed the district court’s decision. The case was appealed a second time, this time to the Minnesota Supreme Court, which agreed with the lower court’s ruling.
“This search was justified only by the odor of marijuana emanating from the vehicle,” the Minnesota Supreme Court decision reads. “Torgerson moved to suppress the evidence found during the search, arguing that the odor of marijuana, alone, is insufficient to create the requisite probable cause to search a vehicle under the automobile exception to the warrant requirement. The district court granted Torgerson’s motion, suppressed the evidence, and dismissed the complaint. The State appealed. The court of appeals affirmed the district court’s suppression order. Because we conclude that the odor of marijuana emanating from a vehicle, alone, is insufficient to create the requisite probable cause to search a vehicle under the automobile exception to the warrant requirement, we affirm.”
It amounts to basic human rights that apply—regardless of whether or not a person is addicted to drugs.
Other States do Precisely the Same Regarding Pot Odor as Probably Cause
An Illinois judge ruled in 2021 that the odor of cannabis is not sufficient grounds for police to search a vehicle without a warrant during a traffic stop.
Daniel J. Dalton, Associate Judge of the 14th Judicial Circuit, issued a ruling in response to a motion to suppress evidence in the case of Vincent Molina, a medical cannabis patient arrested for cannabis possession last year.
In that case, Molina was arrested despite the decriminalization of small amounts of cannabis in Illinois in 2019 with the passage of the Illinois Cannabis Regulation and Tax Act.
In some states, the issue of probable cause and cannabis was defined through bills.
Last April, the Maryland House of Delegates approved a bill that reduces the penalties for public cannabis consumption and bars police from using the odor of cannabis as the basis for the search of an individual or auto. Under Maryland’s House Bill 1071, law enforcement officers would be prohibited from using the odor of raw or burnt cannabis as probable cause to search a person or vehicle.
The rulings represent the rights of citizens when they are pulled over by police, even if there are hard drugs involved.
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