Nov 18, 2021

Delta-8 Merchants Find Themselves in the Weeds as Legal Debate Blazes in Texas

Reporting Texas

Texas’ delta-8 industry is caught in the midst of a legal battle after the Department of State Health Services posted a notice in October stating the cannabinoid is illegal.

A Travis County judge granted an injunction that temporarily legalized delta-8 last week in response to a lawsuit filed against DSHS by Hometown Hero, an Austin-based CBD and delta-8 seller. DSHS posted a notice Oct. 15 stating any concentration of delta-8 is a Schedule I substance — a drug with no currently accepted medical use and a high potential for abuse.

Until DSHS posted the notice, businesses and buyers were under the assumption delta-8 was legal in the state due to two pieces of legislation: the 2018 federal Farm Bill and Texas’ HB 1325, passed in 2019 to pave the way for a state hemp program.

Hemp and marijuana are both cannabis sativa, but hemp varieties have low amounts of delta-9 tetrahydrocannabinol, which is the main psychoactive compound in cannabis, and more CBD. The 2018 federal Farm Bill legalized hemp cannabinoids and mandated the plant is less than 0.3% delta-9 by dry weight.

“With a hemp variety, the THCs are just going to be trace amounts, barely detectable, and there’s going to be a little delta-8 or a little delta-10 or whatever,” said Susan Hays, a cannabis law attorney. “Under DSHS’, interpretation and language, that’s still illegal, and that means all hemp is illegal, and that’s crazy.”

Hays said last week’s victory is temporary, depending on DSHS appealing the case or what the state legislature passes in the next session, and could result in further legal whiplash for involved parties.

“If you’re going to be in the business of selling something that’s in a legal gray area, you better have a line in your budget and business plan for legal costs,” Hays said. “And hope you’re not the one who’s the test case.”

Gruene Botanicals in New Braunfels has been selling the product throughout the month, and plans to continue keeping it on shelves until an actual law is passed. Sean Timmerman, owner-manager ofthe shop, said they’re sticking by the product that accounts for two-thirds of sales and has increased revenue three-fold since Gruene Botanicals started selling delta-8 in 2019.

“We just didn’t feel that (DSHS) followed the right process to remove it from the market,” Timmerman said.

Timmerman said the shop’s sales haven’t been impacted in a major way since the notice was posted, but they have had more inquiries, including from out of state.

“Until I hear a verdict or see some kind of proper law or legislation that has been passed, we’re going to continue to do what feels right,” Timmerman said. “We’re family owned. My wife (and) my daughter all work here, and I don’t want to put them at risk.”

Elevated Wellness, an Austin-based CBD shop, temporarily pulled delta-8 products off its shelves after learning about the DSHS notice, but began selling again following the judge’s ruling. Ross Anderson, chief operating officer, said if law enforcement begins taking action against delta-8 sellers, the company will dispose of its products.

“We don’t want to risk essentially getting in trouble or getting our customers in trouble,” Anderson said.

If Elevated Wellness does have to take that action, Anderson said it will cost thousands of dollars to incinerate the product and affect the shop’s income. The product brings in between a quarter and a third of Elevated Wellness’ annual profits, and Anderson said having to dispose of it will also impact customers who may rely on delta-8 products as a sleep aid or for pain relief.

“It’s a shame to think that these people just won’t have that available or might need, of course, to go to the black market, where they might get things that are full of impurities,” Anderson said.

For the time being, Elevated Wellness is prioritizing transparency by telling customers not to lump buy and keeping products at full price.

“There’s a possibility this won’t succeed, or the hemp industry will be able to fight this efficiently,” Anderson said. “Honestly we deserve a fighting chance.”