CBD, delta-8, THCA: Texas hemp shop raid highlights legal, safety issues
The Bee Hippy Hemp Dispensary offers customers gummies and oils derived from hemp, the cannabis plant that - unlike marijuana - is legal under Texas and federal law. One of the most popular items: earthy greenish-brown nuggets known as THCA hemp flower, which some customers smoke.
"It helps them go to sleep," dispensary owner Chris Fagan said. "And they use it for anxiety."
For nearly two years, the Dallas-area shop operated out of an old 1950s gas station with nary a problem. So Fagan said he was stunned when Garland, Tex., police in June raided his home and the dispensary, even as he insisted that his products qualified as hemp, not marijuana. Still, Fagan was jailed briefly on suspicion of selling marijuana - which remains illegal for recreational use in Texas - and police issued a public safety warning that his products "can be dangerous."
Fagan's case underscores larger tensions over the legality and regulation of some products derived from hemp, which was legalized by Congress as part of the 2018 farm bill. While hemp itself is not supposed to be intoxicating, it can still generate a high when made into certain products.
Critics have long complained that companies are exploiting a loophole in the law to sell the intoxicating, unregulated and what they call possibly dangerous hemp products online and in vape shops, gas stations and convenience stores across the country.
Those critics want stricter regulations, urging Congress as it crafts a new farm bill in the coming months to address safety concerns raised about hemp-derived products. They're not alone: The Food and Drug Administration has called on Congress to establish a new regulatory system for cannabidiol - CBD - a hemp product that doesn't get consumers high but can be used to create a substance that is intoxicating. And the Drug Enforcement Administration is considering rules that could restrict some hemp-derived products commonly found in stores like Fagan's.
In the absence of federal clarity, states have moved to crack down on some intoxicating hemp-derived products - sparking legal challenges. A federal judge in Arkansas in September blocked a state law banning some products after hemp retailers argued the goods were legal under federal law. In Texas, an appeals court in September kept in place a temporary pause on the state's ban on a hemp-derived product called delta-8.
A Maryland judge in October allowed businesses that sell intoxicating hemp products to reopen, at least temporarily, after they were shut down under the state's new cannabis law. And in Virginia, businesses recently filed a suit challenging a new state law reining in hemp products; a federal judge on Oct. 30 declined to block the law, ruling that lawmakers had a "strong public interest in protecting" citizens from potentially harmful substances such as delta-8.
In Dallas, Fagan and his attorney remain hopeful that local prosecutors will decline to press charges. They say independent lab tests prove the products have such low delta-9 THC - the chemical compound in cannabis plants that gets users high - that they qualify as hemp, not marijuana.
"It's completely legal all the way through," Fagan's attorney, Mark T. Lassiter, said.
Twenty-four states and D.C. have legalized marijuana for recreational use, most recently Ohio by ballot measure, but the drug remains illegal under federal law - categorized as belonging to the riskiest class of controlled substances, alongside heroin and LSD.
President Biden has sought to reshape marijuana policy, offering pardons for federal marijuana possession convictions and asking agencies to evaluate how marijuana is categorized under the Controlled Substances Act. In turn, the Department of Health and Human Services in August recommended to the DEA that marijuana be reassigned to a category of less risky controlled substances reserved for prescription drugs such as anabolic steroids and ketamine.
Marijuana and hemp are differentiated only by their level of delta-9 THC, which at sufficient levels gets users high.
The 2018 farm bill, which passed with bipartisan support, removed hemp from the Controlled Substances Act, which supporters hoped would usher in an agricultural boom with the plant used for textiles, plastics and even construction material. The hemp industry grew quickly - then cratered.
The industry's most widely recognized product is CBD, which is believed to soothe anxiety and is infused into gummy candies, creams, drinks and even snacks for pets, all part of the larger wellness market. But CBD sales have lagged. According to research firm Brightfield Group, the industry was projected to reap $22 billion in retail sales in 2022 but hit an estimated $5 billion that year. Analysts blame regulatory uncertainty.
The 2018 farm bill defined hemp as a cannabis plant having less than 0.3 percent content by dry weight of delta-9 THC - not enough to make it intoxicating. But there was a loophole. The farm bill allowed derivatives and extracts of the plant, and some, it turned out, are intoxicating.
The most high-profile of those derivatives is delta-8, which users say delivers a milder high than delta-9 THC. Delta-8 occurs naturally only in trace amounts in cannabis plants but can be chemically refined from CBD.
The gray-market products have been popular in states - such as Texas and North Carolina - where recreational marijuana use remains illegal. But it's not just in those states. Companies are realizing it can be cheaper to get into the hemp business wherever they are.
Griffen Thorne, a Los Angeles cannabis industry attorney, said companies have realized that selling hemp is a better bet than dealing with the licensing costs associated with state-regulated marijuana.
"If you wanted to start a business in California that's manufacturing cannabis products, I would tell you it's going to take you at least a year and six figures," Thorne said. "Whereas, if you wanted to start making delta-8, you could basically just buy some hemp from somebody and start making it."
Public health officials worry that delta-8 gummies, chocolates, chips and drinks can fool customers, particularly children, who don't realize hemp products can have psychoactive effects. The FDA has warned that some manufacturers may use unsafe chemicals to convert CBD into delta-8.
Without proper regulation and labeling, products that include delta-8 may vary widely in how they affect users, said Eric C. Leas, an assistant professor at the Herbert Wertheim School of Public Health at the University of California at San Diego who studies hemp-derived products. "A consumer has a right to know. Your chance of having a bad time eating just one gummy is potentially higher dabbling in this market," Leas said.
According to the Centers for Disease Control and Prevention, poison control centers nationwide documented more than 2,300 cases of exposure to delta-8 between January 2021 and February 2022, with most involving children. Effects includes hallucinations, vomiting, tremor, anxiety, dizziness, confusion and loss of consciousness. The CDC declined a request for an interview to discuss the public health consequences of hemp-derived products.
Republican lawmakers have criticized the FDA for failing to regulate hemp products. The agency has issued warning letters to retailers for marketing "copycat" products that may appeal to children by looking like popular snack foods and are made with delta-8, which has "not been evaluated or approved by the FDA for safe use." The FDA has also warned companies to stop claiming that delta-8 can treat medical conditions.
Aubree Adams, of Houston, has advocated for the prohibition of hemp-derived products to protect public health. She said her son struggled with marijuana use in Colorado, then moved to Texas for treatment. When she reconnected with him in December, Adams said, he was "skin and bones" and admitted he relapsed by using delta-8, describing it as easy to get in Texas.
"'I just walk in there. I can buy it in gas stations,'" she recalled him saying. Adams last saw her son months ago. "I don't get it. Why is Blue Bell ice cream pulled from the shelves when a few people are harmed, but these products are still on the shelves?"
Congress could tackle hemp regulation as part of the latest farm bill, also known as the Agriculture Improvement Act, which is renewed every five years and sets national policy for agriculture, nutrition and conservation.
Hemp-industry advocates have backed proposed bipartisan legislation that could be attached to the farm bill. The office of its sponsor, Rep. Earl Blumenauer (D-Ore.), said the bill would allow the FDA to regulate CBD - and its derivative, delta-8 - in food and beverages. "We want to make sure that we're in a situation where hemp-derived products actually are subjected to safety standards and labeling," Blumenauer said.
The legal landscape involving hemp-derived products is evolving. Last year, a California appeals court, ruling in a trademark dispute, said delta-8 qualified as a hemp product under the 2018 farm bill.
The DEA's public positions on delta-8 and other hemp-derived products haven't always been clear. The agency, in a statement, said it was still reviewing potential new rules regarding hemp and "other hemp-related substances" stemming from the 2018 farm bill.
A top DEA official, Terrence L. Boos, in a 2021 email to the Arkansas Agriculture Department, signaled that the agency believes delta-8 made "by a chemical reaction starting from CBD" is a controlled substance. The email was made public through litigation over the state's ban on delta-8.
States such as Kentucky have banned delta-8 products for sale to people under 21. More than a dozen states, including Arkansas, have banned sales outright. In that state, a federal judge agreed with retailers who sued, saying products such as delta-8 are "likely legal under the 2018 Farm Bill." The Arkansas attorney general's office said it will appeal.
In Texas, the state health department placed delta-8 on a list of controlled substances in 2021. A judge paused the measure after the state was sued by retailers including veteran-owned Hometown Hero CBD. An attorney for Hometown Hero CBD, David Sergi, said delta-8 has support among chronic pain sufferers. "A lot of veterans are using this as an alternative to opioids - not wanting to get addicted to opioids," Sergi said.
A Texas appeals court Sept. 28 upheld the pause. The case will probably go to trial.
Then there's THCA "hemp flower," the product that led to the arrest of Fagan, the store owner in Garland.
THCA is a nonintoxicating acid found in every cannabis plant flower. Companies that market THCA flower insist the cannabis buds qualify as hemp because they test for so little of high-inducing delta-9 THC. But when heated, THCA in the plant converts to delta-9 THC - and when smoked or vaped, the product can basically become marijuana.
Some experts believe the product remains legal, at least under federal law. Agriculture Department protocols require hemp to be tested 30 days before harvest, taking into account THCA and delta-9 THC levels, said North Carolina cannabis industry attorney Rod Kight. Once it passes pre-harvest inspection, the product is legal under federal law when it reaches retailers, regardless of what happens when heated, Kight said.
Texas Hemp Growers, an industry group, has been warning retailers that carrying THCA products is "playing with legal fire," said Zachary Maxwell, the organization's president. The reason: Police departments generally use a testing process that heats up samples, converting THCA into delta-9 THC. He worries that Texas police officers, unfamiliar with the nuances of cannabis law, will ensnare unwitting customers.
"We're in a state that's been very anti-cannabis, and that's carried over into the hemp industry," Maxwell said.
Fagan, of Bee Hippy Hemp, believes he was wrongly targeted by Garland police during the June 7 raid. The 42-year-old owns a CBD manufacturing facility in Colorado and started in the Texas hemp scene selling CBD and delta-8 products from a portable tiny home towed to farmers markets. Sometimes, he or a friend market by dressing in a blue bee mascot suit.
In 2020, during the height of the coronavirus pandemic, Fagan opened his shop. He said he stocked THCA flower - strains with names including White Truffle and Italian Ice - purchased online from out-of-state wholesalers. He sold them from glass jars, by weight, always telling customers the flower could affect them if smoked.
"We don't want them to go and buy this product and then have a very negative adverse reaction," Fagan said.
According to Fagan and his attorney, an undercover officer bought THCA from his shop on three occasions. Later, as officers raided the store and his home, Fagan offered to show them, to no avail, "certificates of analysis" - third-party lab reports vouching that the products are legally hemp.
Officers arrested Fagan and an employee, David Dranguet, on felony suspicion of delivering marijuana under five pounds. Garland police posted on social media a "public safety alert," saying some of the products seized had tested for dangerous levels of THC and had been "sold to patrons with the misinformation that these items were 'legal' hemp products."
The Dallas district attorney's office has not decided whether to press charges. The office said it does not comment on pending investigations.
In July, Fagan reopened his shop, stocked with all the usual CBD gummies and delta-8 products. Regular customers greeted him with hugs, he said. For several months, he did not stock hemp flower because of the pending legal case. But struggling to turn a profit, Fagan recently resumed selling it and hands customers copies of the lab reports showing the product they are buying qualifies as hemp.
"All the other hemp stores in the Garland area continue to sell THCA flower and they're not getting bothered," Fagan said.
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