MJBiz - March/April 2024 - 30

Photo by Kevin Brown
Hemp-Derived Heyday
Cannabis industry reckons with alternative market
that grew in shadow of the 2018 Farm Bill
By Omar Sacirbey
W
hether they know it or
not, cannabis industry
stakeholders including
business operators, consumers
and regulators are living in historic
but likely fleeting times. Some will
remember the early 2020s as a
golden age for cannabinoids, but
others will recall it as a period of
recklessness and confusion.
While the majority of cannabis
stakeholders are advocating for
the federal government to legalize
THC-the psychoactive compound
in marijuana-many hemp
entrepreneurs argue that the 2018
Farm Bill already did that.
In the 2018 Farm Bill, Congress
approved the production of hemp,
which it defined as cannabis with
less than 0.3% delta-9 THC " by dry
weight. " As long as cannabis plants
or hemp-based products contained
less than 0.3% delta-9 THC,
companies producing them and
consumers using them were legally
in the clear.
That narrow definition left out
all other cannabinoids that could
be derived from hemp, including
intoxicating cannabinoids.
Some hemp operators-many
of them in financial distress from
the plummeting price of CBD at
the time-took advantage of this
loophole to create delta-8 THC,
which can be synthesized from CBD
and became an overnight hit. (See
" Liquid Gold? " in the February 2022
issue of MJBizMagazine.)
Delta-8 THC was soon followed
by hemp-derived delta-9 THC,
delta-10 THC, delta 9 THC-O-acetate
THC and other hemp-derived
cannabinoids that the Brightfield
Group, a cannabis-focused data
analytics firm in Chicago, estimated
as a nearly
$2.8 billion industry in 2023.
The 2018 Farm Bill also called for
the testing of " total THC " -or THC +
THCA times a multiplier-but
that was required only during
hemp production, not for finished
products. Enterprising entrepreneurs
in Tennessee, Texas, Wisconsin
and other states without regulated
markets for high-THC marijuana
have exploited this legislative quirk to
create a robust THCA market.
But THCA becomes THC when
heated, so the THCA market is
essentially a THC market by another
name.
30 March-April 2024 | MJBizMagazine
" That's why they're saying we've
accidentally legalized cannabis,
because they don't understand
the terminology, " said Madeline
Scanlon, marijuana insights
manager at the Brightfield Group.
While cannabis advocates often
describe marijuana as the train
that already left the station, some
believe that the hemp-derived
cannabinoid train is making a
return trip.
Many states have passed laws
prohibiting intoxicating hempderived
cannabinoid products,
and observers believe that when
Congress takes another crack at
the Farm Bill-slated for later this
year-it will close the loopholes that
have allowed this market to grow
and thrive.
In the following pages,
MJBizMagazine explores this rapidly
changing landscape, including a
deep dive into the THCA market,
Texas' influence on the hempderived
cannabinoid industry,
why big players in state-licensed
marijuana markets are entering the
hemp-derived THC space and a look
at how a new Farm Bill might bring
it all to an end.
MJBiz - March/April 2024

Table of Contents for the Digital Edition of MJBiz - March/April 2024
