Banning a plant with hundreds of industrial and medical uses was never going to work out well, but 2022 saw marijuana prohibition reach peak absurdity, not to mention peak confusion for consumers and new businesses trying to make sense of it all.
At first glance, cannabis reform appears to be humming along smoothly. Maryland, Missouri and Rhode Island approved legalization initiatives in 2022 as states such as New Mexico and New York raced to establish regulations for legal recreational sales. New laws in mostly blue states expunged cannabis arrests from criminal records for thousands of people. President Joe Biden made moves to pardon federal marijuana prisoners and reconsider the federal “scheduling” of marijuana, a baby step toward potentially ending federal prohibition administratively. Lawmakers debated cannabis reform bills in Congress, even if the vast majority were never passed into law.
A look under the hood, however, reveals regulatory chaos in a nation where marijuana remains illegal at the federal level. For many people, 2022 will be remembered as the year “legal THC” hit the shelves, including in almost every state still under prohibition. The hemp industry, which previously brought us non-inebriating CBD in countless forms, leveraged sketchy chemistry and legal loopholes to evade regulation and sell various synthetic THC products that will absolutely get customers high regardless of where they live, making a mockery of what remains of prohibition.
Unlike traditional cannabis sold in legalized states, researchers know little about the potential risks of using synthetic THC, but “legal THC” products are now commonly sold online and in convenience stories. Sales are booming in states where traditional marijuana remains illegal, particularly among novice consumers and medicine seekers who prefer to avoid running afoul of the law. While the hemp industry has expanded access to cannabis edibles that can relieve conditions such as pain and insomnia, unregulated vapes and powerfully psychoactive synthetics are raising public health concerns.
In states that legalized recreational cannabis, regulators face a steep learning curve as lawmakers push to squeeze a rapidly growing industry of tax revenue. In California, the heart of U.S. cannabis production, costly taxes and regulations are putting small growers and dispensaries out of business while California-grown weed continues to dominate unregulated markets across the country. Some Californians joke that only tourists pay dispensary prices, because weed is cheaper under the table for those in the know. Like California, hundreds of unlicensed “gray market” dispensaries in New York are attracting police raids and creating headaches for regulators and new businesses trying to play by the rules. At every turn, corporate cannabis is deploying an army of lobbyists and regulatory experts to capture new markets, a potential threat to racial justice and “social equity” efforts to ensure that independent businesses in communities most harmed by prohibition benefit from recreational sales.
State-level legalization policy is “complex” but moving in the right direction considering that cannabis remains illegal at the federal level, according to Morgan Fox, political director at the cannabis reform group NORML. Twenty-one states, along with Washington, D.C. and Guam, have approved adult-use marijuana legalization, and at least 37 states now have a medical program. Each state is a policy laboratory, Fox said, and as stigma around cannabis recedes, states are learning from one another, and more policy makers are willing to dive into the nuances of legalization.
“I know we’re seeing that learning curve get less and less steep as we get more and more states on the board and have more practical experience with how regulations can and should be put in place,” Fox said in an interview.
Only 2 Percent of Legal Cannabis Business Owners Are Black
Many challenges remain, particularly around so-called social equity. Racial justice groups say lawmakers must address the damage caused by the drug war in communities of color by ensuring that minority-owned startups and “legacy operators” — people who were in the weed business before legalization — can enter the regulated market, create jobs and build wealth in their communities. It’s simply easier for big companies backed by wealthy investors to pay taxes and regulatory costs needed to get a business up and running despite heavy competition for licenses and customers.
Fox said social equity programs at the state and local level are not working as well as proponents had hoped, but that may be an understatement. By some estimates, only 2 percent of cannabis business owners are Black, and most are white men.
“If you eliminate license caps and you minimize the barriers to entry, minimize the tax rates, minimize the cost of compliance for the regulatory structure, you’re going to be able to give people a much greater chance to enter and then survive in the regulated market,” Fox said, adding that this is an approach that few lawmakers are willing to consider.
State lawmakers often see cannabis as “cash cow” of endless tax revenue, Fox said, but high taxes are a barrier for smaller operators, especially when large amounts of cannabis are siloed within state borders and prices plummet as supply exceeds demand.
Under federal law, traditional cannabis cannot legally be sold across state borders, but synthetic “legal THC” from hemp is commonly sold online and shipped across the country. That means legal cannabis is competing both with cheap hemp products sold in liquor stores and gas stations as well as the unregulated marijuana supply that consumers have relied on for decades.
“The more we can replace the unregulated market with the regulated market, the more legacy operators we can bring into the regulated space,” Fox said. “It might be counterintuitive to think that lower taxes equal higher revenue, but when you’re dealing with the unique situation of a preexisting, unregulated market, you have to look at it from a different perspective.”
As smaller growers and dispensaries struggle to compete with corporate cannabis, particularly in California, New York took the most aggressive action yet and reserved the first recreational licenses for businesses owned by women, people of color and people with cannabis convictions. However, the process is painfully slow for startups and has not prevented cops from busting down the doors of “gray market” dispensaries already operating without a license in New York City and beyond. Residents of New York’s Native American reservations took matters into their own hands, opening dispensaries within their borders before the state began handing out licenses to grow and sell cannabis. Still, Fox said the conversation around social equity is heading in the right direction. Ensuring that people with past convictions for cannabis offenses are not barred from entering the legal market is crucial.
“Back in 2012, when Colorado voters were considering legalization, even the idea of things like expungement or retroactive amnesty [for past criminal convictions] were polling as initiative killers,” Fox said. “But fast forward 10 years, and you can’t have a discussion about legalization without talking about repairing the harms caused by the war on drugs and trying to ensure equitable opportunities within the regulated cannabis industry.”
The Rise of “Legal THC”
This reporter recently purchased “hemp-derived” gummies containing THC and CBD from a liquor store in Louisiana, where traditional THC-rich cannabis is still illegal without a medical card. CBD and THC are said to work in harmony, and as the effects of the two most popular cannabinoids set in, I thought about the people who lost years of their lives or are still in prison for selling virtually the same drug.
However, the gummy I ingested was not a traditional cannabis edible like those sold in Oregon or Colorado. While the main psychoactive ingredient, Delta-9 THC, is the same inebriating compound found in traditional cannabis flower, the “Delta-9” in my gummies is likely a synthetic version derived from hemp and produced by a largely unregulated chemical process. Without test results verified by regulators, or at least access to a trusted brand, I also do not know if the gummy actually contains a different, newly developed synthetic, such as Delta-8, THC-P or THC-0, according to Fox.
“Because the FDA has decided to drag its feet on regulating CBD, a lot of the bigger distributors and retailers refused to carry those products,” Fox said. “These producers were sitting on massive amounts CBD [extract] with nothing to do with it. So, they figured out that they could, through a pretty nasty chemical process, turn that CBD into inebriating cannabinoid derivatives.”
Sound confusing? You’re not alone. Research published in June analyzed 57,913 posts on Reddit message boards from more than 11,000 individual users discussing products containing Delta-8 THC, the most common synthetic derived from hemp, as well as other, more powerful synthetics used to increase the potency of Delta-8 products. Users flocked to the message board to learn where to purchase “synth” THC products, discuss product quality and overall safety and legality, and share their experiences with the effects. Given the lack of regulation and testing, and the wide availability of hemp products despite their “questionable legality,” the researchers concluded that hemp-derived THC should be a “concern for health officials.”
So, is any of this legal? That depends on who you ask, but the hemp industry claims synthetic THC products are federally legal thanks to the 2018 Farm Bill, which legalized industrial hemp containing 0.3 percent Delta-9 THC or less. Delta-9 THC, of course, is the main psychoactive ingredient in traditional cannabis and is banned under federal prohibition. However, Delta-8 THC and other synthetics derived from hemp do not have the exact same chemical structure Delta-9 THC and are therefore legal, the industry argues, even if the compounds provide nearly identical effects.
But what about the “Delta-9” in the gummy your faithful reporter consumed? Regardless of whether it was created synthetically or simply extracted from the plant, the Delta-9 THC in my gummy was derived from legal hemp, not traditional cannabis. As long as that Delta-9 derivative makes up only 0.3 percent of the dry weight of the gummy, the industry claims, then it’s legal under the Farm Bill, which capped hemp products at 0.3 percent Delta-9 THC. With strong extracts or derivatives, hemp companies can pack multiple doses of THC into one edible.
“Yeah, I mean it’s an absurd system and also one that carries a lot of potential risk for consumers,” Fox said. “The only reason that there is a market for synthetically derived cannabinoids, or inebriating cannabinoids other than delta-9 THC, is because cannabis is illegal in those places.”
Legal experts continue to debate whether hemp-derived THC is actually legal, but broadly speaking, authorities have not cracked down. Perhaps they see the writing on the wall and know cannabis prohibition is finally coming to an end. Yet tens of thousands of people are still arrested for cannabis every year, especially in conservative states such as Texas, Tennessee and Louisiana. Unfortunately, we may never know how many people were arrested for cannabis possession in 2022. Around a third of local police departments failed to comply with changes to the FBI’s annual crime reporting program, leaving massive gaps in the 2022 data.
“So, it was completely impossible to track the most recent data on how many marijuana-related arrests have occurred throughout the country,” Fox said. “And it’s very difficult to make good public policy when you can’t get good data.”
For cannabis reform to be successful, Fox said, Congress must pass a law to end federal prohibition. The Biden administration has motioned toward “rescheduling” cannabis administratively, but that process can take a long time, and earlier efforts were roadblocked by the Drug Enforcement Administration. Earlier this year, House Democrats passed legislation to legalize cannabis with racial justice provisions, but the bill died in the Senate. While there is support for legalization in both parties, Democrats and Republicans can’t agree on how to do it.
Lawmakers are also unmotivated. A review of the 2022 midterms by the Brookings Institution found that 86 percent of congressional candidates made no mention of cannabis reform on their campaign websites or social media, staked out an unclear position, or said they opposed reform. However, polls show public support for legalization surpassing 70 percent, and Fox said the issue is increasingly becoming a priority among voters as hemp products explode and nearby states legalize.
A lack of political will has always stood in the way of drug reform, and that’s unlikely to change in the next Congress, when a Republicans caucus featuring far right extremists will take over the House majority. Fox said lawmakers can still work together to get something done, such as legalizing medical marijuana in the federal health system for veterans. Meanwhile, cannabis in all its myriad forms will continue to be bought and sold everywhere, both legally and illegally, just as it always has. This, at least, is one thing we can count on in 2023.
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