Fate of Minor Hemp Cannabinoids Could Be Tied to 2023 Farm Bill

As new 5-year agricultural legislation looms over a divided Congress, some find themselves caught in the crossfire between opportunity and legal oversight.

Mike Kimzey/Owner – Discount Smokes/Louisville, Kentucky: “The injunction is great.  What I worry about is the renewal of the Farm Bill.”

Mike Kimzey owns and operates Discount Smokes in Bullitt County, Kentucky.  His store, on the outskirts of the Louisville metro area, was raided by state police in 2021 for carrying Delta-8 THC products – a hemp derivative.  Hemp was federally legalized in 2018. 

Mike Kimzey/Owner – Discount Smokes/Louisville, Kentucky: “They scared my employees, made them all come up front, read them their rights like we were all going to jail, basically, for selling a legal product.”

Thousands of dollars in merchandise were seized from stores and held for months before a Boone County, Kentucky Circuit Court declared the product legal – issuing a permanent injunction against law enforcement in 2022.

Katie Moyer/President – Kentucky Hemp Association: “So retailers weren’t aware of the letter, but law enforcement and license-holders were.”

Katie Moyer is President of the Kentucky Hemp Association.  An April 2021 letter from the Kentucky Department of Agriculture to hemp farmers and processors declaring Delta-8 an illegal synthetic drug spurred her to join retailers and industry representatives in a successful lawsuit against the state.

Dee Dee Taylor/CEO and Founder – 502 Hemp/Louisville, Kentucky: “Sorry, but when I saw what it did for my husband, and it kept him from seizing…  No one could change my mind after that.”

Dee Dee Taylor runs 502 Hemp in Louisville and helped push back in court.  Once skeptical of Delta-8, last year she was appointed by Governor Andy Bashear to Kentucky’s Medical Cannabis Advisory Committee.  She helped defeat a state level Delta-8 ban last session, leading to passage of an adult-use regulatory framework by the state General Assembly in 2023.

Dee Dee Taylor/CEO and Founder – 502 Hemp/Louisville, Kentucky: “That told me that they knew they were going to lose, because if it was already illegal, we wouldn’t need a bill for it – right?”

Delta-8 proliferated due to a combination of ambiguity found in the 2018 Farm Bill, which legalized hemp cultivation for the first time since World War II, and a subsequent surplus of cannabidiol, or CBD, an abundant non-intoxicating cannabinoid.  Though hemp advocates champion the crop’s potential food, fiber and fuel markets, CBD-derived products dominate today’s landscape.

Mike Kimzey/Owner – Discount Smokes/Louisville, Kentucky: “I’m concerned whether we have enough money to beat the lobbyists and that.  Because for all the health benefits that are out there, it’s a detriment to the health care industry, because they lose all that revenue.”

Hemp and marijuana are both the same plant – cannabis sativa-L - each defined by the amount of the well-known, psychoactive Delta-9 THC found within.  In 2018, Congress zeroed in on Delta-9 and capped it for hemp at just 0.3 percent. 

But Lawmakers did not address up to 100 other naturally-occurring cannabinoids, creating a market for entrepreneurs.

Justin Journay/Founder and CEO – 3CHI: “I like to think that our politicians know what they’re doing when they make law.”

Justin Journay is founder and CEO of 3CHI, an industry leader in minor cannabinoid research.  A biochemist by trade, Journay discovered CBD while seeking an alternative remedy for shoulder pain.  Intrigued, he pioneered a new way to make Delta-8 out of CBD.

3CHI took off in 2019, offers cannabinoid vapes, edibles and drinks, and is constantly expanding operations in the Indianapolis, Indiana area to keep up with demand.

Justin Journay/Founder and CEO – 3CHI: “The real advantage of Delta-8 is that it isn’t as intoxicating.  It’s more clear-headed, more functional, and so, when you get into why do people use cannabis, whether that’s hemp or marijuana in general – a lot of the time it’s medicinal.” 

Cannabis products have been touted for relief from a range of illnesses, but marijuana is subject to more state taxes, licensing and other fees – often pitting the same plant against itself for market dollars.

A federal court upheld the so-called Farm Bill “loophole” last year, but many states have gone on to interpret Delta-8 in their own ways.

Critics bemoan the lack of mandated third-party testing and peer-reviewed studies, saying chemicals and solvents used by some processors could unleash unknown byproducts unsafe for consumption - especially for children.  Counterfeit product also is a safety concern.

3CHI says their own safety protocols exceed industry standards.

Justin Journay/Founder and CEO – 3CHI: “A lot of these cannabinoids are very similar in their structure, and the plant will actually take CBGA and turn that, enzymatically, into these different cannabinoids that are expressed in the final version of the plant.  Really what we are doing is something similar, just in a lab setting.  But what we personally strive for is purity of Delta-8, at the end of the day.”

Early this year, the federal Drug Enforcement Administration clarified its view that synthetically-obtained Delta-8 and Delta-9 THC are illegal controlled substances. 

In a statement last year following the Boone County injunction, the Kentucky Department of Agriculture said it would not take disciplinary action against Delta-8 producers, but didn’t rule out re-evaluation under any future change in law.  Products remain on store shelves.

Rep. Jake Teshka/R – Indiana, District 7: “We’ve got a lot of great innovators, and a lot of great thinkers.”

Hoosier State Delta-8 proponents say the Indiana’s market climate after the last Farm Bill created favorable conditions for nascent businesses.  Indianapolis Attorney Justin Swanson lobbies state lawmakers on behalf of the hemp trade.

Justin Swanson/Chair – Cannabis Practice Group/Bose, McKinney & Evans LLP: “I think Indiana has a unique opportunity being kind of an ag powerhouse in the country, also a logistic powerhouse.  You know, we’re primed to, I think, supply the country and be a net exporter of these products.”

 As local governments are courted by hemp influencers, Congress mulls the crop’s interpretation under the next Farm Bill.  Advocates say short of full national cannabis legalization, state examples could help guide Congress, but warn of overregulation.

Katie Moyer/President – Kentucky Hemp Association: “We’re going to have fifty different cannabis laws in fifty different states, and then we’re going to have to, kind of, piecemeal everything together, but…Ultimately, best-case scenario, the government just minds its own business.”

For Market to Market, I’m Josh Buettner.