Hemp Companies Are Selling Marijuana... Do They Know It?

Click bait headline was intended!

Before we get to debating in the comments, let's clarify a couple things.

1. It is an undeniable fact that companies are selling THCA flower, and much of that flower is not compliant in accordance with what is perceived to be the "technical" definition of compliance.

2. Whether or not those companies selling THCA flower know they are selling marijuana may be a different story (enforcement won't care).

My opinion is most people in this space at this point in the game know exactly what they're doing.

Surely this article will ruffle feathers. Everything does these days in the cannabis space. A symptom of the stresses of staying competitive and relevant in an ever changing environment.

My biggest fear with this new trend is the invitation for enforcement, which for the most part has been sitting on the sidelines up to this point due to the uncertainties around the isomer markets.

This particular THCA nonsense is a clear open back door, and undoubtably a confidence booster for the interest groups that want to see this all stop for hemp industry participants. I can see them gathered round and saying, "Welp, they've really f'ed it up now." These groups have been looking for any way to disrupt what they perceive to be the largest threat to their precious profits leading up to federal legalization.

I call it nonsense because when I read through the legal opinions that are out there, those bold enough to call it legal, stop short of being brave enough to tell people not to sell it. Because it's dangerous. It's tough to get through all the subordinating conjunctions in their thought pieces around THCA. I fear this could be the smoking gun sought by enforcement to really start knocking on doors.

For the last two years many in the hemp industry have lived in a loophole. Even the companies who I believed would never convert over to the psychoactive isomer space dipped their toe in before deciding the water was too hot. While their peers chose to stay where the water is warm.

Now we have entered a new era in the hemp space which I believe will create an all out war between Big Canna and Industrial Hemp in 2023-2024. It will start with specific language in the 2023 Farm Bill. The language, as clearly as possible, will define once and for all (they hope) what constitutes hemp vs. marijuana. Make no mistake it will favor Big Canna's agenda.

Industrial Hemp participants will interpret it as they see fit, and it will ultimately end with those operating in favorable states staying on course. The last line of defense for many companies will be the way their states have laid out the rules. If several states keep favorable regulations on isomers, the Federal rules will do little to effect their markets. However, this will certainly invite licensed companies to join the party as we've seen Cookies do in the last several months. When the most popular cannabis brand in the world enters the arena, you bet their competitors will follow.

Think of it as cannabis in California in the 90s, 2000s, and early 2010s. You were safe until you were enforced on. Better yet, think of it as to how MSOs operate in a Federally illegal environment today, protected by state law. The can't "can't beat em join em" mentality will find its place in the licensed world next year.

For many of us in the cannabis space, specifically those not being backed by deep pockets, we've found some easier barriers to entry within hemp. Back in 2017 - 2018 the hemp space was abundant with newcomers excited to participate in the newest cash crop.

Now we operate in a world we hardly recognize, elated that we are able to participate the industry we believe in so much, but frustrated to watch it continuously morph into flavor of the month cannabinoids. It seems like hardly any companies participating have any kind of game plan for the future. The short term plan is clear though, sell everything and anything until it goes out of style. That is simply not sustainable for the long haul.

To push the envelope with THCA and hemp derived D9 products over .3% by dry weight is going to expedite the standardization of what the industrial hemp market is going to be in the long term. For that I am thankful, as I, along with many others, would love to have that clarity sooner than later.

The silver lining in all this would be the reorganization and redefinition of cannabis as a whole, opening it up to look much more like what industrial hemp participants have started. However, it would need an enormous amount of oversight and restructuring to prevent it from becoming an all out free for all. There is something to be said about the absurd taxation associated with cannabis on the licensed side, especially with 280-E still being a tax rule. That is a tremendous overstep by government in my opinion, and a blatant attempt to keep cannabis operations in the hands of wealthy corporate entities. This has been clear since day 1.

The resilience of the long time cannabis community participants is admirable I must admit. I've always said this is the one industry that would not conform to the governments attempt to regulate it. There is too much of a counterculture aspect that has been only getting stronger as the decades have gone by. I am proud of that to be quite honest. The fact we need to fight for the freedom to grow and use a plant in our country is reason enough to continue the resistance, but this particular path being chosen around THCA flower could actually be counterproductive for our cause.

Only time will tell. 2023 is shaping up to be another interesting year to say the least, Federal cannabis legalization is looming, I think we can all feel it in our bones. Keep fighting the good fight, but also be careful when dabbling in these choppy waters... Certainly be careful about being so loud about it, I don't anticipate any kind of judgement falling in anyones favor during this particular trend in hemp.