As mentioned in the first post of this series, it is unlikely that AK Futures LLC v. Boyd St. Distro, LLC (9th Cir. May 19, 2022) will be viewed as the conclusive victory that some in the delta-8 THC arena are hoping for. In this post, we will explore what might be accomplished by (or more accurately, what backlash might come from) this and other similar decisions.
AK Futures is a decision that resolves a trademark issue at its core, meaning it is tailored to a highly specialized area of law. The decision is notably not preclusive of other federal laws that can more directly be applied to the manufacture and sale of intoxicating hemp products. AK Futures is also not intended to be a case that resolves an ambiguity in federal policy regarding controlled substances and their synthetic analogs. The court decided to address an issue of intellectual property protections in a remarkably brief opinion. A decision meant to address broader implications would typically require a deeper examination of the various and complicated state rules surrounding intoxicating hemp, an exploration into how the specific language in the 2018 Farm Bill came to be, and perhaps some speculation as to how legislators could remedy the error.
Such exploration would be necessary because the current and future legal status of intoxicating hemp is still very much ambiguous. As the 2018 Farm Bill was being drafted, the clear intention was to authorize industrial hemp for commercial production as an agricultural crop beyond the prior “pilot programs,” and (less clearly) allow for certain CBD products to enter the national market. Few (if any) foresaw that some would start producing delta-9 analogs from industrial hemp and sell those intoxicating products across the country outside of the heavily regulated state marijuana markets. New laws often have unintended consequences. The plain language in the 2018 Farm Bill being read as “legalizing” intoxicating hemp products is by accident and not design.
The good news is that laws can be revised to correct mistakes. The “legalization” of intoxicating hemp is not written in stone. For an analogous case of accidental legalization and how governments will respond, look no further than Minnesota, where a loophole in a recently passed law (inadvertently) legalized delta-9 THC edibles with no corresponding regulation or oversight. Some of the very lawmakers who passed that law were astounded to find out its effects, and the response has been as frenzied as might be expected.
It is improbable that such a drafting loophole, one that allows a completely unregulated market for an intoxicating drug, will continue without correction. Despite the impermanence of the ripples made by the decision, the practical effect of AK Futures will be important in one way: it has renewed a sense of urgency in policymakers both at the state and federal levels. Unfortunately, the next Farm Bill, expected when the 2018 edition expires in 2023, is likely too distant to address the current concern over intoxicating hemp products, and state agencies are now scrambling to educate themselves and address the inadvertent legalization of delta-8 THC in the absence of federal action.
As a result, FDA is being asked to look at the inevitable safety issues arising from unregulated intoxicating hemp products. Given the FDA’s focus on public health and previous experience cooperating with industry stakeholders in the “vape-gate” vitamin-e acetate epidemic of the past couple of years, cannabis organizations are beginning to assist FDA to rein in intoxicating hemp products.
Just how and when the next set of regulations and closings of loopholes will arise is to be determined, but it is inevitable that they will come. In the final post of this series, we will explore how businesses can navigate the current uncertainty in the market while keeping an eye on the future.
Written by Braden O’Brien, a summer associate in the Husch Blackwell LLP Denver, Colorado office, with assistance from Marshall Custer.
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