Cannabis bill potential ‘doomsday situation’
CBD, Delta-8 sellers say new law would kill their industry
Sellers of hemp-derived products such as Delta-8 and CBD say a few lines in a recreational cannabis bill making its way through the Maryland legislature will put them out of business.
The bill would establish a regulatory framework for the adult-use cannabis industry, which could launch as early as July. As part of that legislation, lawmakers have set a cap on any products that contain even small amounts of THC — a cap that is significantly smaller than what is currently allowed under federal law.
Anyone who sells a product above that THC cap will need to get a Maryland cannabis license, a competitive and potentially pricey endeavor.
The cap will doom Maryland’s fast-growing CBD and Delta-8 industries, according to Nicholas Patrick, who leads an industry group for hemp-derived products.
“The entire industry from top to bottom would be relegated to the abyss,” Patrick said. “This is a doomsday situation.”
Patrick owns three stores called Embrace CBD and said there are at least 60 similar stores in Maryland that specialize in CBD and Delta-8 products. Most of the products sold at these stores would be considered illegal under this proposed law, Patrick said.
The Delta-8 and CBD industry took off after 2018, when federal lawmakers passed a farm bill that legalized the production of hemp nationwide.
The difference between hemp and cannabis is that hemp generally has very low amounts of intoxicating compounds, and the plant also has industrial uses. While cannabis remains illegal federally, hemp can be grown and processed as long as the plant and any hemp-derived products are less than 0.3% Delta-9 THC by weight.
While many people are familiar with the main psychoactive compound in cannabis — Delta-9 THC — there are more than 100 other cannabinoids found within the cannabis and hemp plant, some of which have therapeutic and intoxicating effects.
Through chemical treatments, processors can extract and synthesize some cannabinoids from hemp while removing others, allowing stores to sell products with a variety of different cannabinoids, like Delta-8, Delta-10, CBD and CBG. Stores featuring these products have popped up nationwide, and some states have since banned or regulated some of these hemp-derived products.
So far in Maryland the industry has been almost entirely unregulated.
A popular product sold at stores is called “full-spectrum CBD” because it contains several other cannabinoids in addition to CBD. Another product that has become a staple in these specialty shops is Delta-8 THC, which has a similar, but weaker, intoxicating effect as Delta-9 THC.
Smoke shops, gas stations and tobacco
stores also sell these products, and state and federal regulators have said these products — particularly those containing Delta-8 THC — could pose a public health risk.
“CBD is a huge part of my business,” Patrick said. “Delta-8 is also a massive part of my business.”
For more than a year Patrick has been a vocal supporter of regulating Delta-8 and bringing more professionalism to his industry, but he said the current language in the cannabis bill goes way beyond common-sense regulation.
Delta-8 is a distinct, mellower product compared with the gummies and pre-rolled joints currently sold in medical cannabis dispensaries, he said, and it attracts a different clientele.
“The dispensaries have absolutely no appetite to sell these products. They are potency pushers,” Patrick said. “I can only use Delta-8 because it is less potent.”
Patrick would like to see a new class of licenses created that would allow stores like his to continue selling CBD and Delta-8 products and be regulated without having to get an adult-use or medical cannabis license.
Buck DeVan founded Charm City Hemp in 2019. He has three shops in Baltimore and one in Frederick, DeVan said, and they focus on high-end wellness products, not bongs or potent recreational products.
“We’re definitely not like a smoke shop or a tobacco shop,” he said.
Charm City Hemp has tens of thousands of customers and millions of dollars of sales annually, DeVan said. Most people who purchase full-spectrum CBD use it to help them fall asleep, relieve pain or reduce stress and anxiety, he said.
These products do contain small amounts of THC but not enough to get high.
DeVan said he was “horrified” to see Delta-8 being sold in gas stations, but Delta-8 is an important product when it’s sold responsibly.
“This would essentially cripple us and send all of our customers to a product that is far more intoxicating than what we’re even selling,” DeVan said.
DeVan and Patrick said they believe the cannabis industry is pushing this cap on THC to eliminate potential competition and that the state’s current cannabis regulator — the Maryland Medical Cannabis Commission — is allowing misinformation about their industry to spread.
There are only a few weeks left in the legislative session, and it doesn’t appear that lawmakers are rallying support for the Delta-8 and CBD industries.
Del. David Fraser-Hidalgo, a Democrat from Montgomery County, introduced a bill this session that would have regulated CBD and Delta-8 products. He declined to comment for this story.
Patrick said that legislation would have allowed his business to survive, but the bill went nowhere. He has spoken with members of the House Economic Matters Committee and Senate Finance Committee. Lawmakers are listening, he said, but he needs leadership to understand what the cannabis bill will do to CBD and Delta-8 stores.
With legal cannabis expected to grow into a multibillion-dollar industry in Maryland, the cannabis and hemp industries have hired several lobbyists in Annapolis.
Activity reports for this session have not been filed yet, but the industries spent nearly a quarter-million dollars on lobbying last year, according to publicly available lobbying reports. That includes nearly $50,000 spent by Patrick’s group, the Maryland Healthy Alternatives Association, and $165,000 spent by the Maryland Wholesale Medical Cannabis Trade Association, or CANMD, which represents cannabis growers and cultivators.
CANMD executive director Joy Strand said Maryland cannabis companies are not trying to put anyone out of business and that the group is not advocating for that.
“We’re for consistent and universal regulations for safe and tested consumable cannabis products,” Strand said. “The problem that we have is the way some other businesses, unregulated businesses, have basically gamed the system. Intoxicating cannabinoids — whether naturally grown or synthetically derived — should be regulated and those products should be tested.”
Will Tilburg, executive director of the Maryland Medical Cannabis Commission, said state regulators and stakeholders from both the hemp and cannabis industries have been consistent: Intoxicating products should be tested, age-restricted, appropriately packaged and labeled, and have potency limits.
“The legislation currently being considered by the General Assembly aims to treat all intoxicating cannabinoids and products the same,” Tilburg said in an email. “The legislation further explicitly carves out a lane for non-intoxicating products to exist outside of this framework.”
But the sellers of CBD and Delta-8 believe that lane is too narrow for them to survive given the low THC caps.
Barry Pritchard runs SunX Analytical, a Cambridge company that tests hemp and hemp-derived products, like Delta-8 and CBD. He wants the hemp industry to keep growing but says products like Delta-8 have muddied the water around hemp and made it difficult for lawmakers to understand what they’re legislating.
“They think hemp is pot,” Pritchard said. “The Delta-8 thing has just smashed the two industries together and that’s just unfortunate.”