The Fourth Circuit Weighs in on THC-O and “Synthetic” THC – North Carolina Criminal Law

In September, the Fourth Circuit Courtroom of Appeals issued a major choice affecting the hemp trade on the federal degree. There was an open query for a while relating to the legality of sure cannabinoids that don’t naturally happen within the hashish plant however will be created from hemp merchandise. THC-O (tetrahydrocannabinol acetate) is an instance of such a compound. State and federal legal regulation each ban “artificial THC.” What precisely counts as “artificial” THC? I wrote a bit about this ambiguity within the regulation earlier than, however Anderson v. Diamondback Funding Group, LLC, ___ F.4th ___; 2024 WL 4031401 (4th Cir. 2024), gives a number of the first steering on the difficulty within the age of authorized hemp. Learn on for the small print.

Artificial Cannabinoids versus Artificial THC. As a place to begin, it is very important distinguish between “artificial cannabinoids” and “artificial THC.” As comparable because the names are, they confer with utterly various kinds of substances. Beneath federal regulation and state regulation, “artificial cannabinoids” embody a broad class of medicine—cannabinoid receptor kind 1 agonists—that are categorized by each jurisdictions as Schedule I managed substances. See 21 U.S.C. 812(d)(1)-(2); G.S. 90-89(7). These compounds work together with the nervous system in a lot the identical manner that hashish does, however the medication should not derived from hashish, nor do they naturally happen in hashish. They’re successfully designer medication that have been designed as authorized (on the time) alternate options to marijuana, usually offered as “incense” or “potpourri.” Artificial cannabinoids are typically thought-about rather more harmful than hashish merchandise, with critical medical problems as potential unwanted effects, akin to seizures, hallucinations, and suicidal ideas. Some readers might keep in mind merchandise like “Spice” or “K2” that have been offered within the 2000s and early 2010s earlier than state and federal bans have been enacted. Artificial cannabinoids are categorically not cannabinoids or in any other case associated to hashish.

Individually from artificial cannabinoids, each state and federal regulation ban “artificial THC.” See 21 CFR 1308.11(d)(31); G.S. 90-95(d)(4) (each referencing “artificial THC”). State regulation treats artificial THC has a Schedule VI managed substance, whereas federal regulation classifies it (together with marijuana) as a Schedule I drug. Id. Each the state and federal governments criminally ban artificial THC with out regard to its delta-9 THC focus—if the product qualifies as a “artificial” THC, it’s categorically unlawful. Not like artificial cannabinoids, artificial THC is presumably associated to hashish. Federal rules provide some examples of what could also be thought-about artificial THC however fails to exactly outline the time period. 21 CFR 1308.11(d)(31). State regulation doesn’t outline the time period in any respect.

So, what’s “artificial THC”? Does it embrace any type of THC that undergoes a strategy of synthesis? Does it as an alternative confer with THC created from scratch in a lab, full synthesized from different compounds and never derived from substances occurring within the hashish plant? What if the compound will be derived from hemp, however doesn’t naturally happen within the plant, like THC-O?

Naturally Occurring Cannabinoids versus Derivatives. Previous to the legalization of hemp, this was a nonissue. If an individual possessed any type of THC, it was an unlawful product, no matter whether or not it was derived from hashish or not. After the legalization of hemp and the proliferation of hemp merchandise with extra unique cannabinoids, although, the definition of “artificial THC” turned an essential situation for the hemp trade and for regulation enforcement. Each state and federal regulation outline hemp to incorporate “all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers” of a hashish plant, as long as the focus of delta-9 THC doesn’t exceed the authorized restrict of 0.3%. See 7 U.S.C. 1639o; G.S. 90-87(13). At what level (if any) does the method of synthesis convert a hemp-derived cannabinoid from a authorized hemp product to an unlawful artificial THC? Whereas we would not have steering on this query from state regulation but, the Drug Enforcement Administration (“DEA”) took the place that if a cannabinoid doesn’t naturally happen within the hashish plant, it doesn’t depend as a “by-product” of hemp and as an alternative qualifies as a Schedule I unlawful artificial THC. See Implementation of the Agricultural Enchancment Act of 2018, 85 Fed. Reg. 51639-01, 51641 (Aug. 21, 2020). This interpretation has some attraction from a regulatory perspective, because it units a vivid line rule—if the actual THC at situation doesn’t naturally happen within the hashish plant, it’s a artificial THC and thus unlawful (once more, no matter delta-9 THC focus). The DEA issued opinion letters making use of their interpretation to deem sure cannabinoids like THC-O unlawful. All of which brings us to the latest Fourth Circuit case, Anderson v. Diamondback Funding Group, LLC.

Anderson Info. The case arose from an employment dispute. The plaintiff, Anderson, was terminated from her employment with the defendant after failing drug assessments for THC. She maintained that her constructive outcomes have been resulting from her use of authorized hemp-derived merchandise, together with the cannabinoids CBD, delta-8 THC, delta-10 THC, THC-O, and HHC. She sued her former employer, alleging employment discrimination underneath the Individuals with Disabilities Act and North Carolina’s Lawful Use of Lawful Merchandise statute, G.S. 95-28.2. That statute prohibits an employer from discharging an worker based mostly on the worker’s “lawful use of lawful merchandise” underneath some circumstances, topic to sure exceptions. (The employment regulation problems with the case are past the scope of this put up, however it’s noteworthy that this appears to be the primary state or federal case deciphering that state regulation.) In defending the employment termination choice towards the state regulation declare, the defendant-employer argued partly that the plaintiff’s use of THC-O was not lawful, as a result of that cannabinoid doesn’t naturally happen within the hashish plant and due to this fact certified as an unlawful artificial THC. It pointed to the DEA’s interpretation in assist. The district courtroom granted the defendant’s movement for abstract judgment on all claims, and Anderson appealed. On the finish of the day, the plaintiff didn’t prevail on her claims within the Fourth Circuit. The courtroom discovered that the plaintiff didn’t convey forth any proof that the merchandise she claimed to have been utilizing have been in truth inside the authorized restrict for delta-9 THC, and this was deadly to her lawful use of lawful merchandise declare. A majority of the panel nonetheless took the chance to look at THC-O and in the end held that it didn’t qualify as an unlawful artificial THC.

Anderson and THC-O. In rejecting the defendant’s argument that THC-O was an unlawful artificial THC, the courtroom famous that the Ninth Circuit rejected an analogous interpretation by DEA relating to delta-8 THC. Whereas delta-8 THC does naturally happen within the hashish plant, it seems in such small portions that business extraction straight from the plant shouldn’t be possible. Nevertheless, the substance will be effectively created from changing CBD as soon as CBD has been extracted from hashish. In AK Futures, LLC v. Boyd Road Distro, LLC, 35 F.4th 682 (ninth Cir. 2022), the defendant argued that the method required to supply delta-8 THC, whereby it’s synthesized from different cannabinoids as soon as they’re extracted from the plant, meant that delta-8 THC certified as an unlawful artificial THC. They pointed to the DEA’s opinion about delta-8 THC in assist. The Ninth Circuit disagreed, concluding that it was the supply of the product that mattered, not the tactic of manufacturing. In line with that courtroom, the statutory definition of definition of “hemp” expressly encompasses all merchandise derived from hashish which might be inside the authorized restrict for delta-9 THC. Id. at 692.

The Fourth Circuit in Anderson agreed with the Ninth Circuit’s evaluation. Within the phrases of the courtroom:

Between the DEA’s February 2023 letter and AK Futures, we predict the Ninth Circuit’s interpretation of the 2018 Farm Act is the higher of the 2. And we’re free to make that willpower ourselves, regardless of a opposite interpretation from the DEA, as a result of we agree with the Ninth Circuit that § 1639o is unambiguous, and since, even when it have been ambiguous, we needn’t defer to the company’s interpretation [in light of the demise of Chevron deference]. Anderson Slip op. at 17 (inner citations omitted).

In additional assist of its conclusion, the bulk pointed to the Nationwide Institute on Drug Abuse’s definition of “artificial cannabinoids.” As mentioned above, these are totally completely different medication, not present in hashish and never derivable from hashish. “These definitions [of synthetic cannabinoids] recommend that, reasonably than originating from natural matter—just like the hemp-derived cannabinoids at situation—artificial cannabinoids are simply that: compounds manufactured totally out of artificial supplies.” Id. at 18.

Takeaways. This choice has main implications for the hemp trade and for federal regulation enforcement inside the Fourth Circuit. Whereas Fourth Circuit selections should not binding on North Carolina state courts, this choice does have an effect on the DEA and different federal regulation enforcement inside the circuit. For North Carolina state courts, the Anderson opinion may very well be persuasive authority if comparable challenges to hemp-derived cannabinoids come up, particularly provided that the state and federal definitions of hemp at the moment are similar and embrace “all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers.” G.S. 90-87(13).

THC-O and HHC. As a matter of federal regulation, THC-O shouldn’t be an unlawful artificial THC, as long as it’s derived from a hemp plant and doesn’t exceed the authorized restrict for delta-9 THC—opposite to the DEA’s interpretation. Presumably, the identical rationale would additionally apply to a different cannabinoid talked about in Anderson however not particularly analyzed: HHC (hexahydrocannabinol). The DEA has taken the identical stance with HHC because it did with THC-O—as a result of the compound doesn’t naturally happen within the plant, the DEA considers it unlawful. Beneath Anderson, although, HHC, like THC-O, can be thought-about a lawful hemp product underneath federal regulation whether it is derived from hemp and inside the restrict for delta-9 THC, regardless of not naturally occurring within the plant.

THCA and Delta-8 THC. Different well-liked cannabinoids, akin to THCA (tetrahydrocannabinolic acid) and delta-8 THC—which do naturally happen within the plant—are additionally seemingly on stronger authorized footing after the Anderson opinion (topic to the identical caveat that they have to be derived from hemp and never exceed the delta-9 THC restrict). The DEA has additionally concluded that these merchandise are unlawful, however Anderson’s logic means that the DEA is mistaken on that time, at the least inside the Fourth Circuit. Beneath Anderson, the delta-9 THC focus of a product created from hemp is the only real metric of its legality underneath federal regulation—together with isomers like delta-8 THC, and acids like THCA.

Whole THC? The ruling may create a gap for attorneys to argue about how delta-9 THC ranges are calculated by laboratory testing. It is not uncommon for labs to mix delta-9 THC and THCA ranges to find out “complete THC.” A dialogue of “complete THC” and testing of hemp merchandise is past the scope of this put up however will be the subject of a future article. Suffice to say for now that there’s not clear state steering on tips on how to precisely measure the delta-9 THC ranges of hemp merchandise, and there may be debate about tips on how to interpret the federal testing tips among the many hemp trade and regulators (as mentioned on this article by a hemp trade advocate). Attorneys dealing with a case involving hashish ought to seek the advice of with an knowledgeable when confronted with any lab report purporting to find out the legality of a hashish product.

Hemp Use and Drug Screens. It’s price remembering that the plaintiff in Anderson in the end misplaced her case and the termination of her employment for testing constructive for THC was upheld by the Fourth Circuit. I’ll depart it to the employment regulation specialists to opine concerning the viability of employment discrimination claims for drug assessments indicating the presence of THC resulting from the usage of hemp merchandise post-Anderson. However as I famous in my very first put up on hashish again in 2018, it stays a really actual chance that use of authorized hemp merchandise will lead to a failed drug take a look at, definitely with a excessive sufficient dose over an extended sufficient interval. In lots of contexts (akin to probation), it might be an uphill battle (although not essentially an unattainable one) for the particular person going through an hostile consequence resulting from a THC-positive drug take a look at to show that the result’s from the usage of a authorized substance and never an unlawful one.

Again to Artificial THC. Lastly, to return to the questions posed at first of the put up, Anderson provides us a good suggestion of what an artificial THC shouldn’t be. Simply because the compound doesn’t naturally happen within the hashish plant doesn’t imply it’s an unlawful artificial type of THC. If the substance derives from natural hashish plant materials or merchandise derived from that materials and incorporates lower than 0.3% delta-9 THC, it would depend as authorized hemp underneath federal regulation. Merely present process some strategy of synthesis, and even a number of ranges of synthesis, doesn’t remodel one thing that may in any other case depend as a hemp product into an unlawful type of THC. So, what does depend as an artificial THC? It’s attainable to create THC compounds from scratch utilizing different chemical compounds with out utilizing any hashish materials or merchandise derived from hashish. Beneath the Anderson opinion, as a result of such materials would “manufactured totally out of artificial supplies,” it could doubtless qualify as an unlawful artificial type of THC and can be legal to own underneath state and federal regulation. Given the prevalence of hemp-derived THCs within the market, my sense is that really artificial THC merchandise should not widespread. To the extent a prosecutor seeks to proceed on a concept {that a} product qualifies as a unlawful artificial THC, Anderson signifies they might want to present that the product was lab-made from different compounds and never derived from hemp.

Look out for an replace on state hashish regulation quickly. I will be reached as at all times at dixon@sog.unc.edu with any questions or feedback.