Is delta 8 Legal?

  In AK Futures LLC v. Boyd Street Distro, LLC, a three-judge panel of the United States Court of Appeals for the Ninth Circuit upheld the decision of the United States District Court for the Central District of California, which said that the 2018 Agricultural Improvement Act (the "Farm Bill") made delta-8 THC legal. Delta-8 is one of the more than 100 cannabinoids made by the cannabis plant. It has recently gotten a lot of attention because it has psychoactive effects similar to (but milder than) delta-9 THC and because it can be sold in some states outside of the regulated cannabis market in places like CBD shops. Delta-8 has caused a lot of legal trouble, but the Ninth Circuit Court of Appeals has now ruled that it is legal at the federal level.

 

I. Delta-8

 

Is delta 8 legal at the federal level? The 2018 Farm Bill took hemp out of the Controlled Substances Act ("CSA"). Hemp is defined as cannabis, including its derivatives, extracts, and cannabinoids, with a delta-9 THC concentration of no more than 0.3%. Delta-8 THC is found in small amounts in the cannabis plant, but it is usually made by changing CBD into it. Even though delta-8 makes people feel high, many people think it is a legal product made from hemp. Delta-8 has been handled in different ways by different states. Some have outlawed it completely, others have regulated it, and many have just kept quiet. In AK Futures, the court made the decision for the states in the Ninth Circuit and said it was legal at the federal level.

 

 

 

II. The Legal Case

 

AK Futures LLC, which makes and sells e-cigarettes and vaping products, sued Boyd Street Distro, LLC, a retailer and wholesaler in Los Angeles, for trademark infringement. AK Futures came up with the Cake brand logo to market its popular delta-8 THC e-cigarettes and vaping products. Later, it found out that Boyd Street was selling fake versions of these products. Boyd Street's defense was that AK Futures didn't have protectable trademarks for its Cake products because they are against federal law, so the trademarks can't be violated.

 

 

 

Under current federal law, trademark protection usually doesn't cover things like cannabis that are against the law. So, in order to decide if AK Futures' mark could be protected, the court had to decide if the delta-8 products protected by the Cake mark are hemp, as defined by the Farm Bill, or cannabis, which is controlled by the CSA.

 

The court looked at the text of the 2018 Farm Bill and found "plain and unambiguous" language that "compelled the conclusion" that delta-8 THC products are legal. It pointed out that the Farm Bill's definition of "hemp" limits only the concentration of delta-9 THC to 0.3 percent, not delta-8 THC or total THC (which includes THCA and delta-8 THC) and includes derivatives, extracts, and cannabinoids. The court also looked at Boyd Street's counterarguments: (1) that the DEA has said that the 2018 Farm Bill doesn't apply to delta-8 THC because of how it's made, and (2) that Congress never meant for the Act to legalize any drug that makes you feel high. Neither side was convincing.

Boyd Street said, in response to the DEA's interpretation, that delta-8 THC is made in a lab because it is concentrated and has a flavor. Since it is made in a lab, it is still a Schedule I substance, just like all other lab-made THCs. The court disagreed, saying that precedent requires clear statutory text to override a different agency interpretation, and that the Farm Bill's definition of hemp "expressly applies to 'all' such downstream products as long as they don't cross the 0.3 percent delta-9 THC threshold."

Boyd Street's claim that Congress didn't want to legalize psychoactive substances like delta-8 THC and only wanted to legalize industrial hemp didn't convince the court either. Boyd Street used statements in the legislative history of the Farm Bill that talked about industrial hemp to back up its case, but the court did not agree that Congress meant to be so limited. The Court also thought that since the Farm Bill doesn't have a separate definition of "industrial hemp" and a U.S. Code definition of "industrial hemp" is even broader than the Farm Bill's, Congress probably didn't mean to make it a requirement that hemp be grown only for industrial purposes. The court said that it would not let "ambiguous legislative history or speculation about congressional intent" override clear language in the law. It also said that it would not "substitute its own policy judgment for that of Congress" regardless of how smart it thought it was to legalize delta-8. The court came to the conclusion that if Congress did not want to make a loophole for delta-8, it should change the law.

 

 

 

III. What This Means

 

The ruling makes it clear that delta-8 products made from hemp are legal on a federal level in the Ninth Circuit, which includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington. The ruling also gives people who want to protect their delta-8 brands a strong reason to say that delta-8 products are legal and can therefore be protected as trademarks. But because the federal government and states have different ideas about how to regulate cannabis, this ruling is unlikely to change the position of any federal agency, including the USPTO, in a big way.

Because cannabis is illegal at the federal level, the USPTO has always said that marks related to cannabis can't be protected. The agency has turned down people who wanted to register marks related to delta-8 because it is a synthetic THC product and therefore illegal.

 

Federal agencies have also raised questions about how safe and effective delta-8 is. The CDC put out a Health Alert Network ("HAN") Health Advisory on September 14, 2021, to warn public health departments and the public about the increased availability of cannabis products with delta-8 THC and the possibility of bad things happening because THC and CBD products aren't labeled correctly. The FDA put out an informational bulletin called "5 Things to Know about Delta-8 Tetrahydrocannabinol—Delta-8 THC" on the same day. It explained the possible health risks of using delta-8. On May 4, 2020, the FDA sent warning letters to businesses that sell delta-8 products that it says break the Federal Food, Drug, and Cosmetic Act by selling unapproved, misbranded, or CBD-containing drugs, making health claims, or selling foods that have been tampered with. In its ruling, even the Ninth Circuit seemed to question the "wisdom" of delta-8's legality. As the cannabis industry continues to change, the laws and rules about making and selling delta-8 will also change over time. We will keep an eye on these changes, so if you have any questions about cannabis, hemp, or cannabinoids, please contact a member of our Cannabis Practice.