Delta-8 is generating quite a buzz over what appears to be legal loophole enabling the production and sales of the intoxicating product in both legal and non-legal states.
New York just became the latest state to ban delta-8 THC, as states across the U.S. move to ban or regulate a product commonly derived from hemp extracts.
In the latest Insuring Cannabis Podcast, we spoke to a scientist, an attorney, an insurer to find out what Delta-8 is, whether it’s actually legal and how it’s being insured.
Following are two brief takeaways from that conversation. You can listen to the full podcast posted above or visit insurancejournal.tv.
Quality Control
We were told that while Delta-8 has a pharmacological effect, the real worry about it should not be the buzz, but the lab testing and quality control practices of less sophisticated extractors that may be in the business.
“And I’m not sure that everyone has access to the equipment they need to clean that up or they have equipment that can verify that it’s been cleaned up,” said Jeremy Riggle, Ph.D, the chief scientist in research and analytics at Bellrock Brands. Bellrock is a national cannabis company perhaps best known for its two most iconic brands, Mary’s Medicinals (a pioneer in the health & wellness segment) and Dixie (a cannabis-infused edibles brand).
Quality control was a concerned shared by Keith Distel, the team leader in underwriting for Admiral Insurance Group.
Distel described a meticulous underwriting process Admiral goes through when insuring operations that may be dealing with Delta-8.
“That’s why we really do go to great lengths with all of our operators – whether it’s delta-8, it’s CBD operators we have a variety of cultivators and processors on the straight cannabis side, on the THC side, that has content above the 0.3% – that we ensure that testing standards are met to a high degree, and that we ultimately know what the consumer is ingesting at the end of it,” Distel said. “It’s not going to take away the bodily injury exposure fully, but at the same time, we want to work with operators that have gone through that process and that can insure us and insure what we’re doing is right by underwriting a policy with those folks.”
Legality
Ian Stewart, founder and co-chair of the cannabis and hemp law practice at Wilson Elser, addressed the apparent loophole that Delta-8 makers and sellers have found in the 2018 Farm Bill.
“So the question is whether Delta-8 is legal or illegal at the Federal level under the Farm Bill and pursuant to the DEA’s new interim rule. And the answer is, we don’t know,” Stewart said. “The questions are whether or not the chemical conversion process that takes CBD and turns it into Delta-8 creates a synthetic THC or a synthetic cannabinoid. And the problem we have is that the term synthetic THC is not well-defined in any statutes or case law and it hasn’t been tested in any meaningful way by the courts. So we’re left to speculate a little bit.”
Stewart noted that the courts have yet to weigh in.
“But in the meantime, if let’s say it is synthetic, does that violate the controlled substances act? Well, again, we don’t even know the answer to that question because the definition of hemp in the Farm Bill also talks about derivatives of hemp and derivatives are defined very broadly,” Stewart said. “And so, if Delta-8 were to be considered a synthetic, it could be subsumed potentially within that definition of derivative.”
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