At Blank Rome’s 9th Annual State of the Cannabis Industry Conference, Frank A. Segall, partner and co-chair of the firm’s Cannabis practice, asked a panel—including Joseph Andreae, CEO of CULTA, Jared Maloof, CEO of Standard Wellness, Ed Schmults, CEO of Firelands Scientific, and Jim Scott, CEO of Statehouse Holdings—what is the number one issue confronting the cannabis industry today? All four chief executives unanimously echoed the same sentiment: the number one issue confronting state-regulated cannabis operators today is the unregulated hemp market, which has become a growing thorn in their sides as the hemp market picked up steam over the past few years. Well, with new action by lawmakers yesterday, it appears this issue is on the brink of being resolved!
Over the past six years, the hemp industry has transformed from a niche agricultural sector into a national marketplace for diverse cannabinoid products. That transformation was catalyzed by the 2018 Farm Bill, which legalized hemp by defining it as cannabis with no more than 0.3 percent delta-9 tetrahydrocannabinol (“THC”) on a dry-weight basis. What resulted from this was an unintended market: intoxicating hemp-derived cannabinoids such as delta-8 THC, delta-10 THC, and other analogs produced from cannabidiol (“CBD”) isolates through chemical conversion. The “hemp loophole,” as it came to be known, allowed psychoactive products to proliferate in convenience stores, restaurants, and online and circumvented the strict controls applied to state-licensed cannabis.
