Last week, the U.S. Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) sent out warning letters to six different companies for selling copycat food products that contain Delta-8 THC. In a press release published on July 5, the FDA and FTC said they sent out letters to the following companies:
Delta Munchies
Smoke LLC (also known as Dr. S LLC)
Exclusive Hemp Farms/Oshipt
Nikte’s Wholesale LLC
North Carolina Hemp Exchange LLC
The Haunted Vapor Room
The Haunted Vapor Room, Dope Rope Bites
The products in question look exactly like common name brand foods like chips, candy and other snack foods. The FDA says they are concerned they might be mistaken for traditional foods, accidentally ingested by children or taken in higher doses than intended. “The products we are warning against intentionally mimic well-known snack food brands by using similar brand names, logos, or pictures on packaging, that consumers, especially children, may confuse with traditional snack foods,” says Janet Woodcock, M.D., principal deputy commissioner at the FDA. “The FDA remains committed to taking action against any company illegally selling regulated products that could pose a risk to public health.”
This is the first time since 2019 that the FTC has gotten involved, when they issued similar joint letters to companies making unsubstantiated health claims. “Marketing edible THC products that can be easily mistaken by children for regular foods is reckless and illegal,” says Samuel Levine, director of the Bureau of Consumer Protection at the FTC. “Companies must ensure that their products are marketed safely and responsibly, especially when it comes to protecting the well-being of children.”
By Andrew Solow, David Kerschner, Alessandra Lopez No Comments
In 2022, product liability lawsuits in the cannabis/cannabidiol (CBD) industry continued to focus on levels of THC and the psychoactive ingredient in cannabis, while federal agencies continued issuing warning letters for CBD products (including CBD-infused food and dietary supplements) that made misleading medical claims. Against this backdrop of ongoing litigation and regulatory enforcement, 2022 showed that at the Federal level, there is more recognition that marijuana is becoming increasingly normalized. For example, President Biden pardoned federal offenses of simple marijuana possession and requested a reassessment of marijuana’s classification as a Schedule I drug under federal law. Additionally, Congress passed its first standalone piece of cannabis reform with the Medical Marijuana and Cannabidiol Research Expansion Act (MMCREA) which, among other things, will ease restrictions on cannabis research and allow for more clinical trials. And even though the Food and Drug Administration (FDA) declined to act on CBD products, the agency announced that it will work with Congress to create a new regulatory framework for CBD products (2023 FDA Announcement).
These events of the past year provide a glimpse into what the future may hold for cannabis and CBD companies when it comes to product liability risks. This article looks at the types of product liability actions that the cannabis and CBD industry faced in 2022 and may encounter in the future, and provides some basic guidance on how to best mitigate, and if necessary, defend these potentially costly litigations.
Focus on Cannabis and CBD Risks
A central part of any product liability lawsuit—regardless of whether brought under a design defect and/or adequate warning theory—is that a product caused or was a substantial contributing factor to a Plaintiff’s injury or illness. Thus, any potential safety concerns over cannabis/CBD could end up as the subject of litigation in the future. In the 2023 FDA Announcement, the FDA recognized that “the use of CBD raises various safety concerns, especially with long-term use,” including potential harm to the liver and negative interactions with certain medications. The agency also noted that questions still exist on how much CBD can be consumed, and for how long, before causing harm. Furthermore, on December 2, 2022, President Biden signed the MMCREA into law, which is intended to advance research on the potential risks and medical benefits of cannabis and cannabis products.1 This additional funding will not only help researchers learn more about possible safety risks that may lead to future product liability claims, but will also allow for better exploration of the benefits of these products to possibly expand product indications and help reach new customers.
Given the FDA’s statements and the increased funding for new research, CBD and cannabis companies should ensure that they are properly monitoring both regulatory communications and new research regarding risks that may be associated with their products. As new information is released, companies should evaluate how their product labels and marketing messages should be altered. Announcements like this one by the FDA can be seen as providing industry participants with knowledge about certain risks, and how companies react could be analyzed, post hoc, in any litigation down the road.
2022 Product Liability Actions
Over the last year, misbranding/mislabeling issues presented some of the most prevalent litigation risks for industry participants.
An example of a warning letter the FDA sent to a CBD products company making health claims
For example, at the Federal level in 2022, the FDA issued thirty-three warning letters to CBD companies, a nearly 400% increase from 2021. These letters generally focused on CBD products that made medical claims. Some of these warning letters addressed misbranding, where the product labels provided inadequate directions for consumer use. In one letter, the FDA noted that because the CBD products were “offered for conditions that are not amendable to self-diagnosis and treatment by individuals who are not medical practitioners,” ranging from cancer to diabetes, labeling compliance was only possible if the product was an FDA-approved prescription drug with FDA-approved labeling. Other companies receivedwarning letters in March of 2022 for making misleading representations that their CBD products were safe and/or effective to prevent or treat COVID-19. Many of these representations were made via companies’ websites and social media platforms. The warning letters—often triggers for product liability actions, as well as consumer protection/fraud actions—serve as a reminder that companies cannot make medical claims on non-FDA approved drug products and must otherwise present accurate information to consumers not only on product packaging, but any form of marketing or advertising, including company websites and social media platforms.
Turning to state-level regulatory actions, Oregon’s Liquor and Cannabis Commission fined a cannabis company $130,000 and suspended the company’s license for 23 days over an alleged label mix-up between its CBD and THC products. According to the state’s investigative report, a company employee allegedly confused two product buckets with similar identification numbers, one that contained THC and the other CBD, and accidentally switched the labels of the two products. In addition to the fine and license-suspension, the state agency also issued a mandatory recall on the CBD drops based on the alleged undisclosed levels of THC.
This same incident also spurred a string of civil lawsuits, resulting in several settlements by the company in 2022.2 Numerous customers reported experiencing “paranoia,” “mind fog,” and feeling “extremely high,” with at least five people going to the emergency room with serious health issues due to use of the CBD drops. One lawsuit, which was publicly settled for $50,000 in January of 2022, alleged that the company failed to warn the plaintiff that the CBD drops contained THC or that the product may have been contaminated with foreign substances like THC, and that the company failed to exercise quality control standards that would have detected the THC.3 Nine other lawsuits made similar failure to warn allegations based on the same batch of CBD drops and were settled by January of 2022, although those settlements were not disclosed.4 In October of 2022, the company agreed to pay a settlement of $100,000 in a class action suit, which alleged that the company failed to disclose that the CBD product contained substantial amounts of THC.5 The class action focused on unlawful trade practices claims, including that the company falsely represented that the product had the characteristics, uses, and benefits of a CBD product that did not contain THC.6 Also in October 2022, the company settled a wrongful death lawsuit—alleging that the company failed to warn the plaintiff that the drops contained THC and had negligent quality control standards—stemming from the same CBD drops,7 where the plaintiff suffered stroke-like-symptoms, allegedly due to the tainted CBD product, and ultimately died.8
Other recent lawsuits have also focused on mislabeled cannabis products, alleging that companies failed to inform customers that products contained THC. For example, in Kentucky, a man who drove into a bus after using a CBD vape sued both the CBD manufacturer and retailer on December 14, 2022, claiming that he was not warned that the vape contained a substance that would make him intoxicated.9 According to the complaint, the store employees told the man that the vape was “all natural” but made no mention that the product contained THC.10 The man alleged that the vape actually contained Delta-8 THC and brought negligence, failure to warn, and state consumer protection law claims.11
As noted above, in addition to traditional product liability actions, companies are likely to face increased consumer fraud and false advertising actions in the absence of personal injuries. Two class actions brought in December of 2020 against a hemp tea maker alleged that the company’s website and the product’s packaging fraudulently stated that a tea contained zero THC.12 Plaintiffs claimed that they tested positive for THC after drinking the tea and that product testing similarly revealed that the tea contained some THC.13
Potency inflation marketing communications from a laboratory
Last year also saw a rise in cases focused on potency inflation, alleging that cannabis companies knowingly overstated the amount of THC in their products to charge higher prices.14 Again, while these actions focused on consumer fraud allegations rather than product liability claims, these cases underscore the importance of accurate labeling. Due to potency inflation concerns, states have started investigatinglicensedcannabis testing labs within their respective jurisdictions, resulting in product recalls and fines. Some states have also updated their regulations, requiring cannabis companies to test their products through two separate labs.
Finally, contamination and the existence of impurities and other byproducts has been a recent focus of several product liability lawsuits across the life sciences space, and this trend is something that cannabis and CBD companies should be aware of and take steps to mitigate.
For example, a Canadian cannabis producer reached a $2.31 million settlement over a class action brought in March of 2017 regarding pesticide-contaminated medical marijuana. The marijuana was recalled due to the presence of myclobutanil and bifenazate pesticides, neither of which were authorized for use on cannabis plants in Canada. The lead plaintiff experienced nausea and vomiting, allegedly from consuming the medical cannabis, and brought numerous claims on behalf of the class, including negligent design, development, testing, manufacturing, distribution, marketing, and sales.15 In the United States, California’s Department of Cannabis Control issued a mandatory recall on January 26, 2022 for a batch of cannabis flower that was contaminated with mold. On March 25, 2022, the New Mexico Cannabis Control Division recalled cannabis products sold by a local medical cannabis company because the product contained impermissibly high levels of mold. New Mexico’s Cannabis Control Division also required the company to immediately cease and desist operations at its production and manufacturing site.
A Look at the Future and What Companies Can do to Mitigate Product Liability Risks
The FDA’s 2023 announcement means that the industry will have to wait for Congressional action for the development of a regulatory scheme that can help standardize requirements and provide industry players additional defenses when facing product liability actions. Many of the proposed risk management tools in the FDA Announcement could help companies mitigate future litigation risks if implemented. These risk management tools may include “clear labels, prevention of contaminants, CBD content limits, and measures, such as minimum purchase age, to mitigate the risk of ingestion by children.” Although the FDA has had regulatory oversight over CBD and other hemp-derived products for nearly four years, the agency has not developed a regulatory framework for these products aside from issuing warning letters, leaving manufacturers and distributors without much guidance. The FDA has also left the states to fill the void, resulting in a patchwork of differing—and sometimes conflicting—state laws. Additional guidance and regulation on labeling at the federal level for cannabis and cannabis-derived products will make compliance a more straightforward proposition and may provide avenues for industry participants to explore preemption defenses in the face of future mislabeling claims.
Just some of the many CBD products on the market today
In addition to following the changing regulatory landscape and understanding how regulatory changes can impact litigation defenses, cannabis and CBD companies can continue to take various steps to help mitigate future litigation risks.
Quality Control: Adequate testing procedures and effective quality control procedures can help avoid contamination issues and situations where products are mixed up during the manufacturing process. For example, the company whose license was suspended in Oregon due to the alleged mix up between CBD and THC subsequently implemented new ingredient tracking protocols, adopted a policy to retain samples from each batch of product, and now sends additional samples to an independent lab to ensure product compliance before anything is sold.
Proper documentation of testing and quality control procedures, as well as maintaining records of compliance checks, can also help companies put together a defense to state regulatory actions or lawsuits relating to contamination or manufacturing defects. Indeed, in February of 2022, an Arizona marijuana testing lab was fined $500,000 for various incomplete records and documentation as well as improperly calibrated machines for contamination testing, with an inspector also noting that one of the employees was trained to use a technique that produced inflated potency results.
Ongoing Safety & Regulatory Review: Keeping up to date with regulations and science will play a key role in making sure labels are accurate and defendable. Working directly with regulators and seeking guidance from regulators on labeling can help potential defendants present a clear and compelling labeling defense. Moreover, the 2023 FDA Announcement made clear that the agency will not pursue rulemaking on CBD’s potential use in foods and dietary substances. Thus, industry players should monitor agency announcements and engage with the FDA’s Cannabis Product Committee (CPC) and Congress to better understand the potential structure of this new regulatory pathway.
Stay on Top of the Science: A boost in cannabis research is on the horizon, as the Medical Marijuana and Cannabidiol Research Expansion Act (MMCREA) will advance research on the potential risks and benefits of cannabis products and promote the development of FDA-approved drugs derived from marijuana and CBD. On the litigation front, causation is an essential element in most causes of action, and plaintiffs will have to prove that the cannabis caused their injury. Thus, industry players should be aware of the current science, including potential side effects.
Litigation Monitoring: Finally, companies will also be well served by following court decisions involving CBD and cannabis products. For example, courts in 2022 were split over the legality of Delta-8 THC, a substance typically manufactured from hemp-derived CBD. The Ninth Circuit held in AK Futures v. Boyd Street Distro that Delta-8 THC found in e-cigarettes and vape products is legal under the 2018 Farm Act, at least in the intellectual property context.16 But in Kansas, a federal judge ruled that the 2018 Farm Act does not make selling hemp-derived products such as Delta-8 THC legal.17 In Texas, litigation initiated in 2021 is ongoing over the legality of Delta-8 THC.18 There, a hemp company sued the Texas Department of State Health Services for its classification of Delta-8 THC as a Schedule I drug, making the sale of this substance a felony offense. A temporary injunction was granted on November 8, 2021—temporarily lifting the ban on sales of Delta-8 THC products—but the plaintiff’s request for a permanent injunction remains pending.19 As these lawsuits show, the legality of different products may vary by jurisdiction, whether by regulation or a judicial decision.
References
Medical Marijuana and Cannabidiol Research Expansion Act, Pub. L. 117–215, 136 Stat. 2257 (2022).
Agbonkhese v. Curaleaf Inc., No. 3:21-cv-01675, (D. Or. Jan. 5, 2022).
Agbonkhese v. Curaleaf Inc., No. 3:21-cv-01675, ECF 1, 6 (D. Or.).
See Crawforth v. Curaleaf, Inc., No. 3:21-cv-1432 (D. Or. Sept. 29, 2021); Lopez v. Curaleaf, Inc., No. 3:21-cv-1465 (D. Or. Oct. 6, 2021);
Williamson v. Curaleaf, Inc., No. 3:22-cv-782, ECF 1, 8 (D. Or.).
Williamson v. Curaleaf, Inc., No. 3:22-cv-782 (D. Or. May 30, 2022).
Estate of Earl Jacobe v. Curaleaf, Inc., No. 3:22-cv-00001, 19 (D. Or. Oct. 18, 2022).
Estate of Earl Jacobe v. Curaleaf, Inc., No. 3:22-cv-00001 1 (D. Or. Jan. 1, 2022).
Howard v. GCHNC3 LLC et al., No. 5:22-cv-00326 (E.D. Ky. Dec. 14, 2022).
Complaint at ¶ 11, Howard v. GCHNC3 LLC et al., No. 5:22-cv-00326 (E.D. Ky. Dec. 14, 2022).
Complaint at ¶¶ 15-33, Howard v. GCHNC3 LLC et al., No. 5:22-cv-00326 (E.D. Ky. Dec. 14, 2022).
Williams v. Total Life Changes, LLC, No. 0:20-cv-02463 (D. Minn. Dec. 3, 2020); Santiago v. Total Life Changes LLC, No. 2:20-cv-18581 (D.N.J. Dec. 9, 2020).
Complaint at ¶¶ 54-59, Williams v. Total Life Changes, LLC, No. 0:20-cv-02463 (D. Minn. Dec. 3, 2020); Complaint at ¶¶ 21-25, Santiago v. Total Life Changes LLC, No. 2:20-cv-18581 (D.N.J. Dec. 9, 2020).
See Centeno v. Dreamfields Brands Inc., No. 22STCV33980 (Cal. Superior Ct. L.A. Cnty. Oct. 20, 2022); Shanti Gallard v. Ironworks Collective Inc., No. 22STCV38021 (Cal. Superior Ct. L.A. Cnty. Dec. 6, 2022).
Downton v. Organigram Holdings Inc., Hfx No. 460984 (Sup. Ct. Nova Scotia Mar. 3, 2017).
AK Futures LLC v. Boyd St. Distro, LLC, 35 F.4th 682 (9th Cir. 2022).
Dines v. Kelly, No. 2:22-cv-02248, 2022 WL 16762903 (D. Kan. Nov. 8, 2022).
Hometown Hero v. Tex. Dep’t of State Health Services, No. D-1-GN-21-006174 (Travis Cnty., Tex. Oct. 20, 2021).
Hometown Hero v. Tex. Dep’t of State Health Services, No. D-1-GN-21-006174 (Travis Cnty., Tex. Nov. 8, 2021).
On December 2, ASTM International, released a whitepaper called “Delta-8-Tetrahydrocannabinol and the Need to Develop Standards to Protect Safety of Consumers.” On the same day, the U.S. Pharmacopeia (USP) launched an expert panel, drafting commentary and providing recommendations to protect public health. The two organizations are working in tandem to better educate the public as well as regulators on the science behind the risks that delta-8-THC products pose to the public.
The chemical structure of Delta 8 THC.
ASTM has been working in the cannabis industry through their D37 committee since March of 2017. Soon after the D37 committee launched, they began crafting cannabis standards and have grown their membership and subcommittees considerably over the past few years. USP has also been involved in the cannabis space for quite some time, developing reference standards and offering guidance for the cannabis testing market.
The ASTM whitepaper details the current landscape for hemp-based products that contain delta-8-thc derived from CBD. It includes information on what the cannabinoid is, how it’s produced, the emergence of delta-8-thc in hemp markets and the need for better safety and performance standards.
David Vaillencourt, frequent CIJ contributor and ASTM International member, says they want to identify how we can maintain public safety when it comes to delta-8-THC. “Products containing delta-8-THC are widely available to consumers despite the known and unknown risks to consumer health and safety,” says Vaillencourt. “The topic is much deeper than simply the presence of delta-8-THC. Rather it is about defining how to label products containing potentially intoxicating cannabinoids and identifying what safeguards need to be in place to minimize the risk of impurities that can further impact consumer health.”
In addition to the technical information provided, ASTM’s whitepaper also discusses the risks of synthetic cannabinoids to public health and the regulatory landscape surrounding delta-8-THC. USP’s whitepaper discusses the chemical process that creates delta-8-THC, the unregulated market and offers guidance on how to regulate the cannabinoid with labeling and testing rules.
Dr. Ikhlas Khan, chairman of USP’s expert panel on cannabis, says we need a lot more research. “The fact of the matter is that little is known about the products labeled as containing delta-8, so much so that the FDA and CDC have both released advisories about the products,” says Khan. “Depending on how the products are produced, unknown impurities may be introduced, including minor and synthetic cannabinoid compounds that are not naturally occurring in cannabis.”
Delta-8-THC is not inherently unsafe, says Dr. Nandakumara Sarma, Director of Dietary Supplements and Herbal Medicines for USP. But as we’ve covered this before, the methods that manufacturers use to produce delta-8-THC could have harmful byproducts present in final products. “Synthetically derived cannabinoids are not necessarily inherently unsafe if they are quality controlled and shown to be safe,” says Dr. Sarma. “By using public quality standards, we can help in controlling the quality of the products and set appropriate limits for impurities.”
The folks at USP and ASTM will host a presentation on the two papers during ASTM’s 2nd Global Workshop on Advancing the Field of Cannabis through Standardization, to be held virtually Dec. 14, 2021.Click here to register.
Practicing Law Institute Press’s Legal Guide to the Business of Marijuana: Cannabis, Hemp and CBD Regulation is a one-of-a-kind deep dive into the many regulations governing the industry. Aimed at attorneys representing clients in this space, the treatise offers guidance on a range of interrelated topics including state regulation of medical and non-medical cannabis; federal law, enforcement and preemption and their implications for employment, taxes and banking; and the various aspects of establishing and managing a cannabis enterprise, from growth to licensing, transport and distribution. We spoke with co-authors James T. O’Reilly, professor of Public Health Policy at the College of Medicine of the University of Cincinnati and author of leading references on food and drug law, and Edgar J. Asebey, a founding partner of Keller Asebey Life Science Law and a life sciences attorney with over twenty years of experience, about the intersection of the cannabis business and the law.
Q: From the legal industry’s perspective, how has this area of the law evolved over the past few years – and what would you advise clients in cannabis to look for when engaging legal assistance for their businesses?
James T. O’Reilly & Edgar J. Asebey: Over the past few years, we have seen a growing acceptance of the idea that lawfully serving the needs of cannabis consumers is a commendable business initiative. This evolution in thinking – tied to the myriad business opportunities cannabis presents – has given large, mainstream corporate law firms the incentive to grow practices and develop specialists in this area, which is a very positive development.
But it is not enough for lawyers to know their way around M&A and the capital markets; they must also have experience with federal regulatory bodies. As regulations continue to evolve, it is essential for practitioners to be familiar with the Food, Drug and Cosmetics Act as well as the Federal Trade Commission Act. The framework for regulating cannabis products already exists, as can be seen in the Warning Letters sent to hemp and CBD companies by both the Federal Trade Commission and Food and Drug Administration (as well as, most recently, the FDA and CDC’s warning about delta-8 THC). If a client places their hemp or CBD product into the stream of commerce, that product will be subject to FDA, FTC and relevant state laws. We strongly recommend seeking out advisors who truly understand these regulations and how they align with the regulatory agencies’ procedures and agendas.
Q: What are the most urgent legal and regulatory topics the industry is watching these days?
O’Reilly & Asebey: Our treatise follows and analyzes the most pressing legal issues facing those in the cannabis and hemp space. In our most recent edition, we add discussion of the Final Rule for the establishment of a domestic hemp production program. We think this is a significant development in that it attempted to address some of the industry’s criticism of some provisions found in the Interim Final Rule, particularly around issues of sampling and testing for THC content. The Final Rule clarified issues around THC percentage testing methodologies, but disappointed many in the industry by leaving in place the low 0.3% dry weight threshold for an acceptable hemp THC level. On the other hand, The Final Rule raises the threshold for a negligent violation from 0.5% to 1.0% total THC and limits the number of violations a grower can receive in one year to one, easing potential penalties for violations.
Of course, the regulation of CBD products is on the minds of many in the industry. Key questions remain about whether cannabinoids such as delta-8 THC can be lawfully sold. Since the FDA has provided no clear guidance with regard to the sale and use of CBD and other hemp-derived cannabinoid-containing products, well-meaning businesses find themselves operating in a regulatory gray area. While some states have raced to place delta-8 THC on their controlled substances lists or otherwise regulate it, at the federal level it remains unclear. Our book provides a legal argument showing that current regulations support the lawful production and sale of delta-8 THC. To date, this and other legal arguments have not been tested in the courts and, without FDA guidance, the delta-8 THC sector will remain gray.
Editor’s Note: The Legal Guide to the Business of Marijuana: Cannabis, Hemp and CBD Regulation is now available for purchase here.
About James T. O’Reilly
James T. O’Reilly of the University of Cincinnati College of Medicine is former chair of the 8,000-member Section of Administrative Law & Regulatory Practice of the American Bar Association and has been active in numerous ABA, Federal Bar Association, and state and local bar activities. He retired as Associate General Counsel of The Procter & Gamble Company to teach full-time, and served as a consultant to three federal agencies and to the Deputy Secretary General of the European Commission. He has authored fifty-six texts and more than 230 articles, and his work was cited numerous times in appellate opinions, including “The experts have written . . . ” in a March 2000 opinion of the U.S. Supreme Court (Food & Drug Administration v. Brown & Williamson Tobacco Corp., 120 S. Ct. 1291). He has received numerous honors and awards for his professional and electoral activities and has been listed in Who’s Who in American Law for twenty-five years. He is a graduate of Boston College and the University of Virginia School of Law.
About Edgar J. Asebey
Edgar J. Asebey, a partner at Asebey Life Sciences Law PLLC, is a regulatory and transactional attorney with over two decades of experience in federal regulation of pharmaceutical, biotechnology, medical device, food, dietary supplement and cosmetics companies. Since 2015, he has been working on cannabis-related matters and transactions, and since 2018, he has provided regulatory compliance, business transactional, venture finance and international trade services to hemp/CBD companies. Mr. Asebey practices before the FDA, the USDA, the CBP, the EPA, and the FTC, representing client companies on regulatory compliance, product approval/registration and FDA enforcement defense matters. He founded and served as president of Andes Pharmaceuticals, Inc., a natural products drug discovery company, from 1994 to 2000, and has served as in-house counsel to two life sciences companies. Mr. Asebey is a member of the American Bar Association (Section on Administrative Law & Regulatory Practice: Food and Drug Committee and International Committee), the Food & Drug Law Institute (FDLI), the Dade County Bar Association, and BioFlorida.
On September 14, the FDA published a consumer update on their website, seeking to educate the public and offer a public health warning on delta-8 tetrahydrocannabinol, otherwise known as delta-8 THC.
For the uninitiated, delta-8 THC is a cannabinoid that can be synthesized from cannabidiol (CBD) derived from hemp. It is an isomer of delta-9 THC, the more commonly known psychoactive cannabinoid found in cannabis. Delta-8 THC does produce psychoactive effects, though not quite as much as its better-known cousin, delta-9 THC.
Due to loopholes in federal and state laws, namely the 2018 Farm Bill specifying that hemp must contain less than 0.3% Delta-9 THC, delta-8 THC is technically legal across the country. It grew in popularity across the United States very quickly over the past year, largely due to online sales.
Following the surge in sales, a number of states including Colorado, Alaska, Arizona, Arkansas, Delaware, Idaho, Iowa, Mississippi, Montana, Rhode Island, Utah and Washington have implemented some form of regulation or outright ban on products containing delta-8 THC. Christopher Hudalla, president and chief scientific officer of ProVerde Laboratories, told Chemical & Engineering News that he has a lot of safety concerns about the whole delta-8 THC craze. Hudalla says he’s more concerned about the processing involved to produce it in large quantities. “These are pretty aggressive synthetic conditions that use strong acids,” Hudalla says. “They might be using strong bases to neutralize. They can use metal catalysts. I hear different people doing it different ways.”
The FDA’s consumer update included this picture at the top of the page
The FDA shares similar concerns. Their fourth point in the consumer update mentions that delta-8 THC products “often involve use of potentially harmful chemicals” in its production. They even claim that some manufacturers might be using unsafe household chemicals to synthesize delta-8 THC. “The final delta-8 THC product may have potentially harmful by-products (contaminants) due to the chemicals used in the process, and there is uncertainty with respect to other potential contaminants that may be present or produced depending on the composition of the starting raw material,” reads the FDA report.
In their consumer update, they note that between December 2020 and July 2021, they received 22 adverse event reports. Of the 22 reports, 14 were hospitalized following ingesting a delta-8 THC product. Notably, those reports included reactions consistent with symptoms from overconsumption of delta-9 THC, such as vomiting, hallucinations, trouble standing, and loss of consciousness.
The chemical structure of Delta 8 THC.
The FDA says that national poison control centers received 661 cases of delta-8 THC products, with 41% being unintentional exposure, 39% involved pediatric patients and 18% required hospitalization.
In the consumer update, they tell the public that delta-8 THC products have not been evaluated by the FDA and that they “may be marketed in ways that put the public health at risk.” This includes marketing it as a hemp product, which it is. Still though, many consumers associate hemp products with somewhat innocuous things, like CBD oil, which is mostly harmless.
The FDA also mentions in the update that delta-8 THC does have psychoactive and intoxicating effects. The FDA says they are notifying the public about the delta-8 THC due to an uptick in adverse event reports, marketing that is appealing to children and concerns regarding manufacturing with unsafe chemicals and contaminants.
As sales of Delta 8 increase, hemp and cannabis industry infighting increases right along with it. Some hemp leaders say they object to Delta 8 simply because it’s intoxicating: “Hemp is nourishing….hemp is not intoxicating,” the president of the U.S. Hemp Authority President told Hemp Grower (apparently cannabinoids can only be one or the other). Others claim that Delta 8 itself is unsafe: “Very little is known about the health effects of Delta 8,” warned the media relations director for the National Cannabis Industry Association. The U.S. Cannabis Council called Delta 8’s growing popularity “a rapidly expanding crisis” in a report that includes the heading “The Health Risks of Delta-8 THC” and claims Delta 8 “presents a public health risk of potentially wider impact than the vape crisis.”
As a cannabis and hemp industry veteran and a long-time maker of numerous hemp-derived formulations (including Delta 8 products) I have to ask: who exactly is Delta 8 a crisis for, and why? I agree that we need to address the legitimate issues with Delta 8 manufacturing and create regulatory oversight that ensures consumer safety. But some Delta 8 critics may be more concerned with their own bottom line than with protecting public health. No one wants another vaping crisis, but demonizing a newly popular cannabinoid or trying to get it banned doesn’t solve the problem of an unregulated space—and it won’t end the demand for Delta 8, either.
The chemical structure of Delta 8 THC.
John Kagia of New Frontier Data points out that the Delta 8 boom is “a phenomenon that has taken the industry quite by storm”—and while that storm’s rising tide saved many hemp farmers from financial ruin, it has not lifted every boat. Some cannabis leaders consider Delta 8 an incursion into “their” market. Indeed, Delta 8 can be sold in some states where cannabis remains illegal: “Unregulated Delta 8 risks becoming a competitive threat to [cannabis companies’] existing offerings, sold in states they can’t get into,” reported Tiffany Kary at the Chicago Tribune. But the threat here for cannabis operators isn’t Delta 8: it’s Prohibition. In states where cannabis is illegal, Delta 8 (which is remarkably similar in molecular structure to its federally illegal chemical cousin Delta 9) is being purchased as an alternative. Rather than villainizing a cannabinoid, let’s address retrograde, reactionary state legislatures that refuse to listen to the will of their constituents, and outdated federal laws that equate THC with heroin.
Many see Delta 8 as a threat to the licensed cannabis industry’s profit margins, not only because it can be sold in prohibition states, but because its unregulated status makes it far easier and cheaper to make and sell. Cannabis companies have to navigate an overwhelming and burdensome maze of regulatory red tape to maintain compliance, so industry-wide frustration with the total lack of oversight for Delta 8 is both understandable and justified. But calling for statewide bans on a product that competes with yours is not the solution. That’s not how markets work. (Of all people, cannabis industry professionals should know that banning cannabinoids doesn’t make them go away.) Regulating Delta 8 manufacturers and requiring rigorous product testing are reality-based measures that will make the playing field fairer for cannabis while also safeguarding public health. In the meantime, we can strongly encourage Delta 8 consumers to seek out products made by ethical operators that are transparent about their manufacturing process and provide third-party testing results—the exact same protocol we recommend for buying CBD.
Some of the many hemp-derived products on the market today.
The safety of Delta 8 products is another legitimate concern that’s unfortunately been distorted. Some alarmist headlines seem to equate the actual cannabinoid itself with hazardous material. One East Coast CBD manufacturer issued a press release announcing “a warning for consumers and manufacturers about potentially harmful chemicals within Delta 8 THC” with the cable-newsworthy headline “Dangerous Delta 8?” Smearing Delta 8 as an inherent health menace is both misleading and unhelpful. As Rick Trojan, vice president of the board of directors of the Hemp Industries Association points out, “Cannabinoids themselves have never in the history of humanity caused a death by themselves.” Once again, the problem here isn’t the actual cannabinoid: it’s the lack of regulation that allows Delta 8 products to be produced with no oversight or testing. But given Delta 8’s widespread popularity, short-sighted bans like the ones that have been passed in 17 different states will only increase the risk to public health. Retailers nationwide sold at least $10 million worth of Delta 8 products last year. I guarantee that demand will continue, and that these bans will simply empower an illegal market full of bad actors.
Finally, I remain shocked at the contempt aimed at Delta 8 because it’s psychoactive, and at those who consume it for just “wanting a cheap high.” As with all cannabinoids, we need more clinical research into Delta 8’s properties—but the research we do have indicates that Delta 8 actually has therapeutic properties very similar to Delta 9 THC, just with less psychoactivity. Anecdotal reports indicate that Delta 8 offers many of the health benefits of Delta 9 (help with sleep problems, stress, and pain management) without THC’s less-enjoyable side effects, like paranoia. As cannabis specialist and medical doctor Peter Grinspoon told Insider, “I can’t tell you how many patients I have who say, ‘I’d love to use medical cannabis instead of opiates for pain, except it makes me anxious.’ Delta-8 might be a very good option for people like that.” Believe it or not, there are plenty of people who are using Delta 8 for its therapeutic effects—which, in a nation where 136 citizens die from opioid overdoses daily, I think should be encouraged rather than derided.
With more than 140 known cannabinoids, it makes no sense for us as an industry to brand some of them as “bad” and others as “good.” Are we going to have these tugs-of-war and calls for bans over every single cannabinoid that becomes popular? Instead of arguing amongst ourselves, we could instead focus our efforts on legalizing all of these plant compounds, studying them to determine their capabilities, and creating standardized, evidence-based regulations and testing regimens to ensure consumer safety and adult use. Delta 8 is popular because it serves a need. Consumers want it, and it’s here to stay—the sooner that we as an industry recognize those facts, the better.
Delta 8 THC (delta-8-tetrahydrocannabinol) sprung onto the scene late last year in a big way. While similar to the much more widely-known delta-9-tetrahydrocannabinol that produces a lot of the psychoactive effects associated with ingesting cannabis, delta 8 THC can be derived from hemp with less than 0.3% delta 9 THC. Given the legality of hemp-derived products following the 2018 Farm Bill, delta 8 THC can be produced in some states where delta 9 THC still remains illegal.
While delta 8 is considerably different in its psychoactive effects from its cousin, it does overlap in some ways. It can still produce some more manageable, less “heady” versions of delta 9’s effects like euphoria and relief found in the many medical applications of cannabis. DeltaVera, a company that launched less than six months ago, aims to share that more manageable THC experience with the masses.
The sharp rise of the delta 8 market means that DeltaVera is poised for growth. With distribution contracts inked, exciting partnerships in the works and a large surge in consumer demand, the founders of DeltaVera are at the ready to capitalize on this lesser-known molecule and bring it to the forefront of the nascent hemp industry. Starting out as a small family business, Sam and Craig Andrus launched DeltaVera with their third founder, PK Isacs.
We sat down with Sam Andrus and PK Isacs, two of the founders of DeltaVera, an award-winning brand, to ask them about their plans for expanding, how they became entrepreneurs and why they think delta 8 is the next big thing in cannabis.
Cannabis Industry Journal: Tell me about your company. How did you get started in the cannabis space?
Sam Andrus, cofounder of DeltaVera
Sam Andrus: I had an early start in the Delta 8 THC industry on the sales side. We knew we wanted to get into the market, but observed a number of aspects in the space that needed to be addressed: the most important being quality control, transparency and brand trust. With this as a backdrop we launched DeltaVera. Highly curated, approachable, transparent and value-oriented with a strong focus on reliability and trust. The DeltaVera family is made up of three operating managers and the sales team. We are three founders with complementary skill sets: Craig, who has domain expertise in finance, governance and startups, PK who has experience in business and marketing and my sales experience round out the management team.
We have yet to solicit outside capital and have funded ourselves internally as we create our brand and refine our product offering. That said, we are seeing numerous opportunities in strategic partnerships and expansion, which will require additional capital. And we are excited to start this expansion process.
CIJ: What makes the Delta 8 space so remarkable? Why are your SKUs primarily formulated with Delta 8?
Sam Andrus & PK Isacs: Delta 8 THC is an alternative/complement to delta 9 THC, CBD and other cannabinoids. Its status as non-federally scheduled and its less potent psychoactive effects make it appealing in its own right. Delta 8 THC can help with healthier sleep patterns and with pain management in a way that CBD can’t, without a strong “head high” that many of our customers like to avoid. Additionally, it’s shorter lived and doesn’t give you any negative residual effects, which makes it beneficial for people on tighter schedules. These factors make it easier for us to approach markets that are inaccessible to both delta 9 THC and CBD, such as older demographics. In a world where delta 9 is legal, there will still be a place for delta 8.
PK Isacs, cofounder of DeltaVera
While we are very proud of our suite of smokable products, we are currently focusing our efforts on edibles: our Delta Discs are our mainstay, though we are expanding our product line to include nano-emulsion products such as liquid shots and nano gummies. They strongly appeal to our target demographics; additionally, the edible market is growing very quickly in states that allow the sale of hemp-derived consumables.
CIJ: Continuing on the delta 8 front – right now it is considered a cannabinoid legal for interstate commerce, much like CBD, correct? Do you think that will change?
Sam & PK: That is currently the case. Delta 8 THC is newer, and as such, it has even more ambiguity in regards to its legal future. But what’s most exciting (and our most challenging task right now), is informing consumers about the benefits of delta 8. We are one of a few companies solely focused on the consumption of delta 8, because of its similar benefits to delta 9 and CBD – our products are the perfect happy medium: a high with less psychoactive effects and all the health benefits of both, making it a desirable alternative to all consumers.
In addition, we are looking at some combinations of delta 8/CBDA, delta 8/CBN, delta 8/THCV and are very excited to begin test marketing these combinations. These proprietary blends of minor/major cannabinoids can cater to a niche target demographic as they can be curated to have very specific and unique effects when combined in the right quantities with the right delivery system. They will also be able to serve a larger customer base as these cannabinoids can all be derived from hemp.
CIJ: How do you think the FDA would regulate your product? Do you welcome federal oversight?
DeltaVera gummy products
Sam & PK: Regardless of whether or not we are regulated we are committed to a high level of transparency and trust. As noted in unregulated markets, like the supplement market, you don’t always know what you are getting in terms of purity and potency. We are changing that paradigm by adding unique QR codes to our sustainable containers which reference COAs [certificates of analyses] specific to the contents of the case. A lot of the space is naturally trying to avoid that kind of regulatory interference, but we are currently doing our best to self-regulate and make sure that our consumers are fully informed about what they’re receiving.
We will be the first to say that there aren’t as many laws governing delta 8 THC as there could be, and that’s why we’ve spent so much time and money on self-regulation. All of our products have very clear nutritional information in addition to test results down to one hundredth of one percent. As for what category these products should fall under: we have a wide range of products, and each one has its place under a different umbrella of regulation. We hope that the federal government will take advantage of the vast array of studies that have been conducted on delta 8 THC since it was first extracted in 1942 to step up to this product that is, in our experience, helping so many people.
CIJ: Tell me about how your business has grown so far.
Sam & PK: When we sell to a retailer, we try to provide them with as much material as possible on what delta 8 THC is and what differentiates DeltaVera’s products. Still, we’ve had some difficulty in places with limited delta 8 THC exposure. That being said, when someone tries our product, there is a high likelihood that they become a repeat customer (and they tell their friends). Given our newness to the market (Our brand launched in January 2021) initial indications are – we have a good rate of repeat orders, and we’ve heard the same from our brick-and-mortar partners.
The DeltaVera Delta Discs
Our distribution network has grown tremendously; we’ve taken a three-pronged approach to distribution: partnerships with like-minded companies in compatible spaces, an e-commerce market on our website, and a commission-based sales structure to reach brick-and-mortar establishments. To date, most of our distribution takes place in the latter two spaces, due to the added time and commitment involved in forming partnerships. As a company we are taking a more creative approach on how we present our product and alternative ways to consume it. We have some exciting collaborations in the works; follow us on social media to stay up to date with everything on the horizon. We are very enthusiastic about our partnerships however, with our first collaboration with WaxNax, a Denver-based company revolutionizing the cannabis dabbing experience, hitting the shelves this week.
CIJ: What is your marketing plan?
Sam & PK: We are working on building a social media presence. Natalie, who is leading the charge on social media, recommended we take an organic approach to build our base. We want to avoid falling into the “paid ad”, “spam” vibe as long as we can. We are currently focused on building a community through delta 8. Our mission is making DeltaVera a brand for all lifestyles, athletes, creatives, travelers or business professionals. We’re confident in our product, and have faith that it can speak for itself.
CIJ: How do you ensure quality in your products?
Sam & PK: Our products are of guaranteed quality with our licensed growers and manufacturers. We provide COAs, informing the retailer & consumer about each product, displaying full panel tests on cannabinoids and heavy metals. These preliminary and secondary lab tests ensure our product is below 0.3% delta 9 THC in all our products. Through third-party labs, we run full panel tests which pick up a variety of cannabinoids; for most of our products we focus on the level/purity of delta 8. Our products are screened for both contaminants and heavy metals.
All this information is housed conveniently on our website that can be reached through our QR codes.
CIJ: What are your plans to grow the business in the future?
Sam & PK: We feel very confident in our three methods of distribution: partnerships, e-commerce and a commission-based sales structure. We’ve made tremendous ground on partnerships, and are very excited about numerous partnerships we have in the pipeline. We’ve reached out to some incredible groups in the CBD space, the THC space and a few groups that you wouldn’t normally associate with cannabinoids, but with whom we’ve workshopped some really creative ideas that we’re really looking forward to bringing to market.
Readers can use promo code “CIJ” to get 15% off their first order here.
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Back in May of last year, the FDA sent out their first warning letters to companies selling Delta-8 THC products, then issued a consumer update and warning about the compound a month later. The FDA and some industry stakeholders are concerned not only about the psychoactive substance itself, but also the way it is produced that could use potentially harmful chemicals.
