Legislators punt on craft grow expansion while green lighting 280e relief and an extension for dispensary operators
Illinois businesses that trade in delta-8 THC suddenly found themselves last month preparing to discontinue sales of a derivative of the cannabis plant that gets you high, looks and smells like much of what is available in regulated dispensaries across 40 states, and is federally legal (for now).
At the 11th hour of last month’s legislative session, Land of Lincoln lawmakers who were concurrently deliberating over multiple points of contention between established Illinois cannabis operators and social equity startups suddenly pounced on the delta-8 THC issue.
What’s the difference between delta-8 THC and delta-9 THC? Grown In’s Marcy Alspach explains.
Numerous cannabis “Omnibus” items long considered by Illinois legislators, most notably enabling craft growers to expand to 14,000 square-feet of canopy, were deprioritized and put off to the dismay of social equity advocates. The established industry won big with state reimbursement for expenses not federally recognized in IRS Tax Code 280e. There will be more time for the 175 or so licensed dispensary owners to stand up their businesses, although it remains unclear how they can raise the necessary capital from outside parties along the way.
These important if not existential issues for Illinois cannabis operators ultimately took a back seat to delta-8 THC and its legal and regulatory future. Attention to this issue is spreading like a weed across all 50 states as the federal government signals updates to hemp policy and intoxicants as part of the 2018 Farm Bill.
New York and California are among the 14 states across the country where delta-8 THC sales are banned. Twelve states provide a degree of regulatory oversight. Illinois, where McDowell’s-esque synthetic pot shops have cropped up all over the state in recent years, is one of 25 states where delta-8 THC is unregulated.
A commercial market for delta-8 THC quickly materialized as a result of the 2018 Farm Bill, which federally permitted growth, sales and consumption of hemp. The most recognized cannabinoid within hemp is CBD, which today is commonly available in supermarkets, gas stations, specialty shops and what have you.
By itself, CBD does not cause intoxicating effects and is used by many who believe it helps with things like sleep, movement and mental clarity. A minor cannabinoid, delta-8 THC and its intoxicating properties are created by chemically converting CBD using extraction, isolation, heat, and chemical reactions. This legal loophole allows for the sale of delta-8 THC cannabis products that get you high without having to adhere to the costs, regulations and testing protocols associated with selling the delta-9 THC variety of the plant.
The established cannabis industry in Illinois, which includes five of the ten largest legal cannabis operators in the country, are somewhat split on how delta-8 THC should be treated. Some advocate for an all-out ban, while others insist on firmer regulatory and compliance requirements. delta-8 THC advocates say they welcome strong regulation from the state.
Social equity operators are also not in lock-step over the issue. Some believe proprietors of businesses that produce and sell delta-8 THC should be regulated if not shut down. Others, often with backgrounds in the Illinois legacy market, currently are operating businesses that sell delta-8 THC and would prefer status quo.
While no changes to delta-8 THC regulation in Illinois were implemented in this legislative session, all sides anticipate action in the coming months.
The feds will also be tasked with tackling this issue in the 2023 Farm Bill, while also considering regulatory changes to the $30 billion federally illegal cannabis industry. Highlights here include SAFE Banking (federally chartered financial institutions can serve operators without penalty), federal 280e reform, and how agencies including the Federal Drug Administration and National Institute of Health can begin allocating research dollars toward studying the agricultural and medicinal capabilities of the plant.
The Future is Now!
Political leaders and representatives in Washington D.C. and across all 50 state houses increasingly exercise incoherent agendas as it relates to cannabis. Voters across the ideological spectrum favor legal weed that poses minimal harm relative to other societal “sins” while shoring up budgets in their municipal and state governments.
The imbroglio over delta-8 THC, which anecdotally varies between 50 and 200 percent of potency to state-licensed delta-9 THC cannabis, illustrates the bloatedness of current policy on the state and national level. On the one hand, you have a federally legal delta-8 THC industry that is illegal in several states. On the other, you have a federally illegal delta-9 THC sector that is legal in several states.
Future attempts to restrict access to a weed consumed by humans for thousands of years will increasingly end in folly. The ubiquity of cannabis, as is the case with its distant cousin the dandelion, expands every time you pull one away without addressing the root cause of why it is there.