On May 19, 2022, the United States Court of Appeals for the Ninth Circuit issued its opinion in AK Futures LLC v. Boyd Street Distro, LLC, 35 F.4th 682 (9th Cir. 2022). In it, the Ninth Circuit held that “the only statutory metric for distinguishing controlled marijuana from legal hemp is the [0.3 percent by dry weight volume] delta-9 THC concentration level.”
The Court also writes that “[a] straightforward reading of § 1609o yields a definition of hemp applicable to all products sourced from the cannabis plant, contain no more than 0.3 percent delta-9 THC, and can be called a derivative, extract, cannabinoid, or one of the other enumerated items.” In this ruling, the Ninth Circuit addressed a major question facing the hemp industry: the dividing line between federally legal hemp and federally illegal marijuana. Though the question has not been definitively settled, the Ninth Circuit’s decision clearly bolsters the view that the 0.3% threshold alone is the dividing line between federally legal hemp and federally illegal marijuana.
Before the AK Futures decision, some state governments and federal agencies cast doubt on the legality of hemp products such as delta-8 THC by declaring that they were illegal synthetic products. Though this view is inconsistent with the plain language of the federal 2018 Farm Bill’s definition of hemp as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis,” it was still a cause for concern for the hemp industry.
Through its AK Futures decision, the Ninth Circuit reinforced the plain language reading of the 2018 Farm Bill. Look for other courts and agencies to endorse this reading of federal law moving forward. This decision is likely to reverberate throughout states such as Colorado, which attempt to align their hemp policies with their federal counterparts, offering a clearer, easier-to-follow standard for hemp producers.
The cannabis practice group at Fortis Law Partners is always available to help address any questions on this and other related matters. For more information, please contact us.
