Based on consumer and marketplace trends, the future of mainstream over-the-counter (OTC) Delta 9 THC consumption appears to be low-dose federally-legal hemp-derived THC products. We have seen this happening en masse and in real time with the dramatic proliferation of hemp-derived Delta-9 THC (’Hemp D9’) beverages being sold on a very large scale across the United States. This has caused mainstream investment groups, CPG companies, and alcohol distributors/producers to sinificantly enter the fray, and to capitalize on the legal opportunities.
I have personally been involved in establishing the distribution of such beverages in mainstream venues such as sporting events, festivals, concert venues, c-stores, thousands of liquor stores, and the like. It is widely believed that these low dose Hemp D9 beverages are here to stay, and for good reason – beer, wine, and spirit sales have dipped across the country for several consecutive quarters.
And this trend is indicative of modern consumer desires. The notion is that such Hemp D9 beverages (along with other sorts of beverages containing other ingredients such as kratom, kava, etc.) will fill the void in sales, and address this sales gap by selling the sorts of products that modern consumers wish to consume, or at least try.
This concept is further bolstered by the fact that the federal government is on a path to reschedule marijuana from the most restrictive category (Schedule I) to a far less restrictive category – Schedule III. While this process will take some time (as a technical matter) and could get delayed or procedurally paused by a new President with different policies, attention will continue to focus on federally legal and already de-scheduled Hemp D9.
Frankly, the move to Schedule III could have the effect of rendering our current adult-use marijuana system null and void, and could force all such state-licensed marijuana sector operators to go back to a medical marijuana licensing system and scheme (ideally with a 'severe pain' catchall in each state, which is tantamount to quasi-adult use anyway, and which lowers the presently prohibitive and industry-killing excessive sin taxes on such products in the adult use marketplace, and allows for higher dose cannabis products – but that is another story for another day). If these existing marijuana sector operators even want a chance to be complaint with the requirements of operating a Schedule III compound business, they will necessarily have to operate under the existing Schedule III medical supply chain rules and regulations.
What is the practical impact of all of this? It makes low dose OTC Hemp D9 products the new adult use; more on that topic and the future of a Schedule III cannabis industry in a later article.
However, all of this conjecture hinges on the maintenance of the present Farm Bill hemp provisions, which currently make such Hemp D9 products legal, and these products can legitmately be compliant with the .3% Delta 9 THC threshold - especially beverages. In other words, these sorts of products are expressly legal, and not subject to Controlled Substances Act scheduling.
Despite an article that was recently published, which seems to indicate that there is no present intent to kill the so-called ‘intoxicating’ hemp line of products, the battle is far from over. Various government policy groups, many funded by MSO groups who seemingly refuse to do what their shareholders want – sell more products! – and who refuse to embrace the tenets of the mainstream CPG industry, continue to push against the present Farm Bill language and are actively seeking to undermine the current language. I have reached out to two MSO groups for comment on this issue, but have not gotten a reply by the time of this publication.
It seems odd to me that certain larger MSO groups fail to see that Hemp D9 products are in fact a lifeline if and/or when they fail to comply with the rigorous standards that are generally applicable to a Schedule III compound producer/seller/marketer/manufacturer. To put it simply, it is not a given that any state-licensed marijuana sector business will qualify to become approved under the applicable medical supply chain standards, or that the federal government would even entertain such an approval – again, more on that in a subsequent article. If nothing else, the current hemp language is their backup plan, but many apparently fail to see this.
This is not to say that all MSOs and large-scale marijuana sector interests feel this way. In fact, I currently serve (and have served) as a strategic advisor to many such MSOs and large-scale marijuana sector companies and they have embraced this strategy; and they see the writing on the wall; and they want to have a backup plan under any circumstance. But several of these imterests seek to redefine 'hemp' to exclude any sort of so-called ‘intoxicating’ compounds and/or drive all such compounds into the economically challenged, less-than-mainstream, overtaxed, intrastate, closed-loop dispensary system. Various market and consumer studies have shown that many cannabis consumers do not want to walk into dispensaries…but they will walk into a convenience store or a liquor store. These companies already have a lifeline - the current Farm Bill language. Why they would not want to avail themselves of mainstream distribution is beyond me, but once again, I digress.
Under any circumstance, it is certain that large scale CPG producers/sellers, the alcohol industry, and the like will now assert themselves on Capitol Hill regarding the Farm Bill in order to amintain the status quo language — and for obvious reasons. And it is time to provide some vision and leadership – especially given the looming medical Schedule III pathway. If nothing else, it is a backup plan for the marijuana sector – a lifeline. To survive, the current loud voices in the marijuana sector should exhibit broader vision, and a to desire to adapt to the existing CPG marketplace; yet many seek to eradicate the low dose Hemp D9 products from this burgeoning mainstream marketplace.
As these mainstream interests enter the public policy discussion regarding the Farm Bill, and as they actively lobby to maintain the current Farm Bill language - especially for the sorts of products I describe herein, this will have the indirect effect of saving the marijuana sector in the long term. And reagrding the Farm Bill, it is important to note that here are other less-nuclear ways to address the apparent concerns regarding THCa flower and purely non-hemp-derived synthetic cannabinoid products without cutting off this vital pathway and emerging market; after all seventeen states have passed laws allowing for sale of a baord array of hemp derived products.
And as they proceed, it is essential that these mainstream interests support state-level consumer safety measures for the production, sale, and labeling of said products, and to ensure that these products do not get into the hands of children. Numerous states have already passed such legislation/regulation and could serve as a model for a uniform standard, as I have previously discussed
Moreover, organizations such as the Cannabis Beverage Association, the Hemp Beverage Alliance , the U.S Hemp Roundtable, and the American Healthy Alternatives Association (among many others) push for this sort of fundamental regulation on a daily basis, and have established such baseline tenets. In short, it must be shown that industry operators want this, support this, and will ‘do the right thing.’
In closing, the time has come to weigh those things, and it is only time that will tell how all of this shakes out, but it is a fascinating time to be at the center of the world’s most exciting industry.
