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Highlights:
- The majority of constituents from the state-legal cannabis industry believe intoxicating hemp-derived cannabinoids should be regulated in the same way as products sold in medical and/or adult-use state-legal cannabis markets.
- 51% of constituents from the hemp industry believe these cannabinoids should not be regulated the same way as products sold in medical and/or adult-use state-legal cannabis markets; 46% believe they should.
- The majority of research participants from state-legal cannabis businesses feel hemp-derived intoxicating cannabinoids are confusing to consumers and pose a threat to the overall cannabis industry.
- Nearly a third of those from licensed hemp businesses feel these cannabinoids are confusing to consumers.
- More than half of participants from licensed hemp businesses believe that hemp-derived intoxicating cannabinoids present an opportunity for their business.
As a multibillion-dollar industry has essentially exploded in the U.S. around products containing intoxicating hemp-derived cannabinoids, such as delta-8, -9 and -10 THC, and HHC, so too has a state patchwork of laws to either regulate or outright ban these cannabinoids, or to maintain the unregulated status quo—as well as a heavily rumored rivalry between state-legal cannabis (aka marijuana) and hemp.
In addition to state laws, efforts out of Washington, D.C., including the so-called “Mary Miller amendment” to the U.S. House’s draft 2024 Farm Bill, have aimed to put the kibosh on this unregulated market by closing a so-called “loophole” in the 2018 Farm Bill—for a variety of reasons. Those reasons range from the lack of testing requirements on hemp-derived products to consumer confusion to a lack of regulations restricting age limits to prevent access to minors. The heavily regulated state-legal cannabis industry also faces steep compliance requirements and associated fees, as well as significantly higher taxes (due to section 280E of the Internal Revenue Code) than intoxicating hemp-derived cannabinoid market, causing what has been called an unfair playing field that puts cannabis businesses at a significant disadvantage in the market.
Meanwhile, rumblings in the state-legal cannabis and federally legal hemp industries have suggested a battle has emerged between the two. In fact, Forbes even referred to it as a “civil war.”
But do state-legal cannabis businesses actually want to kill the intoxicating hemp-derived cannabinoid market with prohibition, as many people have suggested? After all, the cannabis industry continues its own long-fought battle against prohibition to this day. And do businesses selling products containing intoxicating hemp-derived cannabinoids want to continue operating, unregulated, under a legislative loophole and/or risk being shut down entirely?
Cannabis Business Times wanted to find out more about this complex topic. It surveyed members of both the state-legal cannabis industry and the hemp industry to gain more insights into their perspectives on the topic. Here are the findings.
The results show that most want regulation. More than two-thirds (69%) of survey respondents, who hail from both the cannabis and hemp industries, believe that intoxicating hemp-derived cannabinoids (e.g., delta-8 THC, delta-9 THC) should be regulated the same way as products sold in medical and/or adult-use state-legal cannabis markets. Twenty-nine percent think they should not be regulated the same way.
In order to provide a more accurate picture of the perspectives of those in each industry, however, the responses from those who work in the state-legal cannabis industry need to be viewed separately from responses of those who work in the licensed hemp industry. And a slightly different picture emerges.
What Do State-Legal Cannabis Businesses Think?
Four out of five (80%) survey participants from state-legal (adult-use or medical) cannabis businesses think intoxicating hemp-derived cannabinoids should be regulated the same way as products sold in medical and/or adult-use state-legal cannabis markets. This is 11 percentage points higher than the 69% of overall survey participants from the cannabis and hemp industries combined.
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Survey participants who work in the state-legal cannabis industry were asked whether they feel intoxicating hemp-derived cannabinoids pose a threat or opportunity to their businesses and their industry, and whether they believe these cannabinoids are confusing to consumers trying to distinguish between intoxicating hemp-derived cannabinoids and products in regulated cannabis markets.
Two out of three (67%) respondents from state-legal cannabis businesses said they feel intoxicating hemp-derived cannabinoids are confusing to consumers trying to distinguish between intoxicating hemp-derived cannabinoids and products in regulated cannabis markets. And one in two (52%) feel that these cannabinoids pose a threat to the overall state-legal cannabis industry. Forty percent of these survey participants said they feel these cannabinoids pose a threat to their business, while 19% said these cannabinoids present an opportunity for their business.
When asked: “How do you think state and local officials should respond to retailers who sell intoxicating hemp-derived cannabinoids in states where the products have been banned?” the largest percentage (56%) of those from state-legal cannabis businesses said, “take legal action: remove products from retailers.” Four in 10 (41%) said, “shut down the retail operations,” and 37% said, “take legal action: issue citations.” (Participants could select more than one answer option, so the total of these responses exceeds 100%.) Nearly a quarter of these participants said, “take criminal action (e.g., arrests),” and 10% said, “take no action.”
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© Cannabis Business Times | CannabisBusinessTimes.com
Some cannabis businesses even grow or sell intoxicating hemp-derived cannabinoids or products themselves. Nearly 2 in 10 (17%) participants from state-legal cannabis businesses said they are currently growing or selling intoxicating hemp-derived cannabinoid products. More than a quarter (26%) said they are considering or would consider growing or selling these cannabinoid products, while 61% said they would not.
What Do Licensed Hemp Businesses Think?
Slightly over half (51%) of survey participants from licensed hemp businesses think intoxicating hemp-derived cannabinoids should not be regulated the same way as products sold in medical and/or adult-use state-legal cannabis markets. This is 22 percentage points higher than the 29% percent of overall survey participants from the cannabis and hemp industries combined who don’t think these cannabinoids should be regulated akin to cannabis.
Nearly half (46%) of respondents from licensed hemp businesses, however, think these cannabinoids should be regulated the same way as state-legal cannabis products. This is still 23 percentage points lower than the 69% of overall survey participants from the cannabis and hemp industries combined, and 34 percentage points lower than the 80% of respondents from the state-legal cannabis industry who believe these cannabinoids should be regulated like cannabis.
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Five out of 10 (51%) survey participants from licensed hemp businesses said they think intoxicating hemp-derived cannabinoids present an opportunity for their businesses, and 45% said they think these cannabinoids present an opportunity for the overall hemp industry.
One in 10 (11%) licensed hemp businesses believe these cannabinoids pose a threat to their businesses, and nearly a quarter (24%) feel they pose a threat to the overall hemp industry.
Nearly a third (32%) of these respondents said hemp-derived intoxicating cannabinoids are confusing to consumers who cannot distinguish between intoxicating hemp-derived cannabinoids and products in regulated cannabis markets, while 23% said they are not confusing to consumers.
When it comes to the question: “How do you think state and local officials should respond to retailers who sell intoxicating hemp-derived cannabinoids in states where the products have been banned?” the largest percentage (35%) of those from licensed hemp businesses said, “take legal action: remove products from retailers.” Nearly a third (30%) said, “take legal action: issue citations.” Nearly a quarter (22%) of survey respondents from licensed hemp businesses said they felt state and local officials should “take no action.” (Participants could select more than one answer option, so the total of these responses exceeds 100%.)
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The vast majority (84%) of licensed hemp businesses said they validate their supply chain to verify/show that their products are made from Farm Bill-compliant hemp flower.
About the Respondents and Survey Methodology
Cannabis Business Times distributed the survey to readers of its e-newsletter, as well as posted it on social media between May 13, 2024, and June 13, 2024. The research results are based on responses of 303 survey participants. Thirty-eight percent said their primary business is licensed under a state-legal medical or adult-use cannabis/marijuana program(s); 23% are licensed under a state or federal hemp program/Farm Bill compliant; 12% are cannabis or hemp cultivators, retailers, processors or brands not licensed under a state-legal medical or adult-use cannabis/marijuana program(s) or state or federal hemp program; 15% are cannabis scientists and/or researchers; 5% are cannabis medical professionals; 12% are from cannabis association or advocacy groups; 23% said “other.” (Other included quite a few ancillary businesses providing services or solutions to the industry, regulators, and consultants, as well as advocates, educators and enthusiasts.)
Editor’s note: In part II of this special report, Cannabis Business Times will share notable insights and perspectives from constituents from the cannabis and hemp industries on this important and evolving topic.
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