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Oregon Cracks Down on Lab-Made Cannabinoids

Oregon’s regulators have enacted a ban against cannabinoids that are synthesized in laboratories. It will be the first country in which such cannabinoids can not be sold at supermarkets and general retailers. State cannabis regulators have banned the sale of cannabinoids made in laboratories, including delta-8 THC, at grocery stores and drug shops. This ban will be effective July 1. Only weeks have passed since a federal appeals court decided that federal law makes it legal to sell delta-8 THC or other cannabinoids made from hemp.

Since the legalization and processing of hemp with the 2018 Farm Bill, Delta-8 THC (and minor cannabinoids) have been big business in the United States. While these cannabinoids may be present in hemp in low levels, or even none at all in large quantities, there are many substances that can be manufactured in laboratories through chemically altering CBD. However, the Oregon Liquor and Cannabis Commission has issued bans on THC and other chemicals in order to ensure safety.

Steven Crowley of the OLCC is the compliance specialist for hemp processing. After a large supply of CBD, hemp processors began to use delta-8 THC as well as other cannabinoids.

“The supply of CBD was outstripping the demand for CBD,” said Crowley. “And so, the people who had CBD on hand were looking for other ways that they could market it. They began to develop new products from CBD. This is where you get the delta-8 THC products.”

FDA Issues Delta-8 THC Warning

In a joint warning, the Food and Drug Administration and Centers for Disease Control and Prevention warned about delta-8, THC. The alert noted that over 100 cases of adverse effects from products containing the compound were reported in 15-months. The OLCC has raised concerns over the safety of chemicals that are used in the conversion of CBD to other cannabinoids. They also wonder if the products can contain trace amounts.

“We have testing for pesticides,” said Crowley. “We have testing for residual solvents from the extraction process. We don’t have any testing for any of the whole universe of chemical reagents that you could use to synthetically turn one cannabinoid into something else, or for any of the byproducts of that reaction.”

Starting July 1, products containing synthetic cannabinoids will be prohibited from general retailers. At that time, the sale of such products will be allowed exclusively at retailers licensed by the OLCC, but only after they have undergone rigorous safety testing and receive approval from the  FDA.

Companies that market and produce cannabinoids derived form hemp are opposed to the OLCC’s decision. Wyld is an Oregon company that makes gummies containing the cannabinoid CBN. This can be extracted from CBD, and can promote sleep. Gabe Lee, general counsel at Wyld and Wyld CBD, said that the new regulation will help the company’s bottom line and have a negative impact on consumers, as well.

“The Wyld elderberry CBN gummy is the number one selling gummy on earth right now,” said Lee. “It’s 20%-30% of our revenue depending on the state. People love it.”

Lee suggested that Oregon adopt best practices for hemp-derived cannabinoids production, rather than a total ban.

“There are ways to regulate it and there are definitely ways that we can ensure that the end product that’s being sold is subject to enough safety testing and safety standards to ensure, to the degree possible, the safety of the product without any sort of larger federal research grants or anything like that,” Lee said.

Additionally, the attorney noted that customers who use the product without any problems will now be charged higher at licensed retailers.

“They may not want to go shop at an OLCC retailer or pay the prices that are up there,” Lee said, “because they are definitely charging a higher price in the OLCC regulated market than they are at New Seasons,” referring to a chain of neighborhood grocery stores popular in the Pacific Northwest.

New regulations take effect just weeks after the federal appeals court decided that hemp-derived delta-8 THC (and other cannabinoids) are legally permissible under the 2018 Farm Bill. In an opinion from the 9th Circuit Court of Appeals released last month, Judge D. Michael Fisher wrote that products made with delta-8 THC are generally legal under federal law, which defines hemp as “any part of” the cannabis plant, including “all derivatives, extracts, [and] cannabinoids,” that contains less than 0.3 percent delta-9 THC by weight.

Federal statute “is silent with regard to delta-8 THC,” the court said in its 3-0 ruling.

“Regardless of the wisdom of legalizing delta-8 THC products, this Court will not substitute its own policy judgment for that of Congress,” Fisher wrote in the appeals court’s unanimous decision.