In the Weeds: FDA Delta-8 Warning, Cannabis Company Sponsorship, DoorDash Cannabis Delivery in Canada

May 18, 2022
Newsworthy Highlights

FDA Warns Companies Selling Delta-8 Products. On May 4, 2022, the U.S. Food and Drug Administration issued warning letters to five companies for selling products labeled as containing delta-8 tetrahydrocannabinol. This is the first FDA action against companies for products containing delta-8 THC.

The warning letters address the unauthorized marketing of unapproved delta-8 THC products by companies as unapproved treatments for various medical conditions or for other therapeutic uses. The FDA appears to have focused specifically on products that made disease claims. The letters also cite violations related to drug misbranding (e.g., the products lack adequate directions for use), lack of dose substantiation, and the addition of delta-8 THC in foods, such as gummies, chocolate, caramels, chewing gum and peanut brittle. Delta-8 THC is an unapproved food additive for use in any human or animal food product, as the FDA has not concluded that the substances are generally recognized as safe or otherwise exempt from food additive requirements. The FDA’s principal deputy commissioner Janet Woodcock said the agency also was looking at the appeal of some of the products to children.

The warning letters were issued, in part, as a response to adverse event reports involving products containing delta-8 THC from consumers, healthcare practitioners, and law enforcement, some of which resulted in the need for hospitalization or emergency room treatment. The warning letters follow previously sent warning letters to other companies selling unapproved CBD products that similarly claimed to diagnose, cure, mitigate, treat or prevent various diseases, in violation of the Food, Drug, and Cosmetic Act. The FDA additionally is concerned that some of the food products are packaged and labeled in ways that may appeal to children and highlighted its intent to continue to monitor the cannabis marketplace for risks to public health.

Colorado Sports Team to Rep Cannabis Brand on Jerseys. According to news articles, Colorado’s first professional ultimate disc team in the American Ultimate Disc League (AUDL), the Summit, will be sponsored by a local cannabis company. The cannabis dispensary, Star Buds, will be prominently featured on the front of the Summit’s team jerseys. While this is not the first time in the United States that a cannabis company has sponsored a sports team, it is the first professional sports team in Colorado to be sponsored by a cannabis company.

In recent news articles, the CEO of Star Buds commented that it is proud to be the first cannabis company to sponsor Colorado’s first professional team in the AUDL and hopes this sponsorship will “drive a movement toward the acceptance of cannabis in professional sports.” Other sports leagues such as Ultimate Fighting Championship, National Women’s Soccer League and United Soccer League similarly have seen cannabis company sponsorships. Although cannabis brand sponsors are still uncommon in professional sports teams, it may start to become more accepted and may even be the norm in the coming years as additional states began to legalize marijuana for recreational use.

Lab Study Finds Hemp-Derived Delta-9 THC Products Often Are Inaccurately Labeled. A recent lab study conducted by CBD Oracle found that over half of delta-9 THC products on the market are “mislabeled” with respect to THC content, and that consumers who purchase hemp-derived delta-9 THC products may not be getting exactly what they bargained for. CBD Oracle purchased 53 of the most popular hemp delta-9 products from 48 different brands, and sent them to an independent lab for potency and safety testing. While 96% of the products tested fell within the 0.3% delta-9 THC limit imposed by the 2018 Farm Bill, only 49% of the products (26 of 53) were found to be within 15% of the dosage stated on the products’ packaging. Additionally, THC dosages were found to be quite high, on average 13 milligrams per serving (with some containing up to 40 milligrams).

Despite an overall finding that THC content was inconsistent with product labeling and that many products contained considerably more (or less) THC than advertised, the lab analysis revealed several positive points as well. Namely, all products tested were found to be free from pesticides and contaminants (even though only a fraction of manufacturers tested their products for potency and safety).

This small lab study revealed considerable variation with respect to delta-9 THC products on the market, prompting some industry stakeholders to advocate for stronger, clearer guidance and enforcement to ensure customers receive safe products that contain dosages “as advertised.” Delta-9 products derived from hemp must meet strict federal guidelines regarding content of THC.

Grassroots Federal/State Legislative Highlights

New Hampshire Senate Declines to Legalize Marijuana Possession. Efforts to decriminalize small amounts of marijuana in New Hampshire ended after the state Senate voted against legalization. HB 629 would have legalized the possession of certain marijuana products by adults at least 21 years of age or older. The bill would have allowed adults to possess up to .75 of an ounce of marijuana, 5 grams of hashish, cannabis-infused products containing no more than 300 milligrams of THC, and up to six cannabis plants at home, with three or few being mature. The same limits would have applied to transferring these marijuana products to another adult, except that only three immature plants can be transferred. The Senate’s vote was largely divided on party lines, with Democrats generally in favor of the bill and Republicans generally against.

Oregon Liquor & Cannabis Commission Implements Cannabis Licensing Moratorium. On April 22, 2022, the Oregon Liquor & Cannabis Commission (OLCC) announced it would refuse to issue initial cannabis licenses, under the authority of recent legislation passed in Oregon.

The commission noted that “Oregon’s marijuana market has experienced exponential growth, which has led to a crowded market place.” According to commission data, there were $4.619 billion in cannabis sales in the state between October 2016 and April 2022. The legislation, HB 4016, which was signed into law on April 4, 2022, authorizes the commission to refuse to issue production, processing, wholesale and retail licenses for an amount of time that the commission determines necessary, based on supply and demand for cannabis in the state. HB 4016 comes after the sunsetting of SB 218, which had placed a moratorium on new producer licenses until January 2022; HB 4016 authorizes the commission to refuse to issue licenses for applications received after Jan. 1, 2022. The moratorium does not impact the renewal of existing licenses; a full list of active cannabis business licenses in Oregon is available online.

The commission also noted in its announcement that, “[a]long with the marijuana license moratorium, Oregon’s 2022 legislature enacted several bills requiring OLCC to work with the industry to develop rules to address various changes to OLCC policies. Commissioners voted to enter rulemaking to address the alterations to the bottle bill, requirements for reporting human and sex trafficking in the marijuana industry, and requirements to develop a marijuana license reassignment program for surrendered licenses. OLCC staff will hold public meetings to gain input from the respective industries this summer.”

Investment Highlights

Door Dash Canada Cannabis Delivery. DoorDash recently announced that its app will begin offering cannabis pickup in Toronto, Canada, in partnership with cannabis retailer and lifestyle brand Superette. DoorDash’s partnership may signal a growing desire for delivery services to partner with cannabis retailers through apps. DoorDash seeks to differentiate itself with Superette’s unique cannabis experience.

Superette provides an immersive cannabis retail experience and will apply its creative approach to DoorDash’s growing consumer base. DoorDash will allow Superette to provide customers with specifically curated menus and unique collections similar to having a cannabis personal shopper.

“In the Weeds” is McGuireWoods’ biweekly ounce of highlights in the budding cannabis, hemp and CBD industries. For more information, see our newsletter archive, our Edible Bites podcast series (available on Apple and Spotify), or visit our Cannabis, Hemp & CBD practice.