Synthetic vs. Natural Hemp: A Legal and Labeling Minefield – Cannabis Business Executive

The DEA’s recent interim final rule–which appears to be in contravention of the letter and spirit of the Agricultural Improvement Act of 2018 (aka the Farm Bill)–continues to cause concern and turmoil in the industry.

The proposed rule addresses CBD and hemp manufacturing, and threatens to criminalize certain hemp derived cannabinoids, extracts and derivatives, and received over 3,300 comments during the public comment period. 

New Rule Generates Lawsuits, Letters from Congress and a Need for Clarity

Additionally, the Hemp Industries Association (HIA), along with a South Carolina-based hemp company, filed suit against the U.S. Drug Enforcement Administration (DEA) not once, but twice. Nine members of Congress sent a letter to the DEA’s Acting Administrator voicing the concerns of their hemp constituents, who now fear unknowingly producing or possessing a controlled substance, violating the law and potentially putting themselves out of business.

The cannabis industry needs clarity on what is and what is not legal.  In order to toe the line, hemp farmers, processors and cannabis businesses must have an understanding of where that line is. To the extent that the DEA was trying to resolve confusion with its interim rule, I applaud it. But it should be obvious by now that the interim rule has resulted in more, not less, confusion. 

 Delta-8 and the Debate over Synthetic vs. Natural Cannabinoids

I recently wrote about the interim rule’s potential legal impact on Delta-8 THC, a tetrahydrocannabinol derived from hemp, sharing my legal opinion as an attorney who regularly helps cannabis clients ensure compliance with the law. Delta-8 THC may be at risk of possibly being labeled a Schedule I Narcotic by the DEA due to its potential classification as a “synthetically derived tetrahydrocannabinol”, a murky, ill-defined delineation that is creating bewilderment in the industry. 

Currently, most of the Delta-8 THC on the market is derived from CBD isolate via a chemical process. This is because extraction directly from hemp does not generally elicit high enough concentrations or quantities to make it a profitable option. As a result, some might say Delta-8 THC is extracted from isolate, some might say it is converted. The real question is whether that chemical extraction process—from a product that itself was naturally derived and extracted from hemp (i.e., isolate)—makes Delta-8 a synthetic cannabinoid. I say no. 

Nearly all CBD is extracted from hemp using chemicals (often ethanol) but that doesn’t mean that CBD is synthetic. And many CBD products are the result of numerous rounds of extraction—first from hemp to crude, then to distillate and sometimes to isolate. Adding an extra step to the refining process doesn’t make something natural suddenly become synthetic. If it did, then the proposed rule would abrogate the entire Farm Bill and make virtually all CBD a Schedule 1 Narcotic, something that is well beyond the DEA’s purview. The DEA is a law enforcement agency. It does not write the laws themselves.  

Transparent Labeling

That said, there are truly synthetic cannabinoids on the market, wholly created in a laboratory and not derived from any plant. Reputable studies have shown, and the Centers for Disease Control and Prevention has found, that some synthetic cannabinoids can have deleterious health effects. And there are unscrupulous people who try to pass synthetic cannabinoids off as naturally derived. This is why I strongly believe in regulation. 

I am not suggesting that all synthetic cannabinoids should be characterized as Schedule 1 Narcotics, as the DEA has seemingly implied. But, we do need more research on synthetic cannabinoids and proper labeling so that consumers always know if they are buying naturally or synthetically derived cannabinoids.  

My opinion is that regulation and labeling standards are a better solution to this issue than outlawing and criminal prosecutions. For example, California recently became the first state in the nation to apply a “terroir” law to cannabis, stating that any marijuana grown in the “sun and soil” of certain California counties can carry an ‘appellation of origin’ labeling, similar to the practices of the wine industry. 

The new law “prohibits the name of a California county, including any similar name that is likely to mislead consumers as to the kind of cannabis contained in the product, from being used, as specified, unless 100 percent of the cannabis contained in the product was produced in that county.”

A verification process and labeling standard for synthetic vs. naturally derived cannabinoids, similar to California’s ‘appellation of origin’ legislation or to the food industry’s voluntary opt-in to the Non-GMO Project with its accompanying butterfly logo on labels, could go a long way towards providing much-needed clarity. It would also help consumers understand if they are buying products derived from real hemp, grown in soil, or hemp developed in a laboratory. 

The U.S. Hemp Authority certification program already prohibits the use of synthetic CBD by members and the HIA has recommended that the FDA ban the manufacture and marketing of synthetic CBD due to safety concerns. However, the industry as a whole has not yet adopted a clear labeling standard on this matter. As we wait for the United States District Court for the District of Columbia to hear the HIA’s case against the DEA and make a final decision on the new interim rule, it seems wise to begin working towards one.