OLCC Rules Advisory Committee Holds First Meeting on Delta-8 and Other Artificially Derived Cannabinoids

On September 30, 2021, the Oregon Liquor and Cannabis Commission (OLCC) held its first rules advisory committee (RAC) meeting to discuss delta-8-THC and other artificially derived cannabinoids. The RAC is comprised of OLCC policy makers, cannabis industry advocates, and one member of the Oregon State Police.

This RAC was created following passage of HB 3000, which tasked the OLCC with creating rules to regulate artificially derived cannabinoids that were previously outside the scope of OLCC enforcement. The most prominent of these derivatives is delta-8-THC, an intoxicating substance that is usually converted from CBD. Delta-8 gained notoriety last year because the substance fell outside of the OLCC’s regulatory authority; allowing anyone, even minors, to purchase the product outside the regulated cannabis market.

The big- picture takeaway from this first RAC meeting is that the proposed regulatory changes focus on banning the processes that create artificially derived cannabinoids, not the products themselves. This blog post will explain what which manufacturing processes would be banned under the proposed rules, and why many industry advocates have pushed back against what the OLCC has itself described as a blanket ban on artificially derived cannabinoids.

What is an Artificially Derived Cannabinoid?

HB 3000 defined an artificially derived cannabinoid as “a chemical substance that is created by a chemical reaction that changes the molecular structure of any chemical substance derived from the plant Cannabis family Cannabaceae.” Proposed rule OAR 845-025-1015(4)(b) expands this definition to include, but is not limited to:

(A) A cannabinoid manufactured by exposing a marijuana item or hemp item to chemical reagents, catalysts, reactants, or other reactive materials under conditions that cause a reaction that changes the molecular structure of a cannabinoid; or

(B) A cannabinoid manufactured by processing a marijuana item or hemp item through column chromatography using a reactive material such as bleaching clay in the stationary phase which results in a reaction that changes the molecular structure of a cannabinoid.

Under proposed rule OAR 845-025-1310(1), any process that falls under the definition of artificially derived cannabinoid will be banned. Industry advocates took notable exception to the regulation regarding column chromatography (CRC), explaining that processors often use CRC methods without bleaching clay or other reactive materials. OLCC representatives assured that the CRC process would be banned only if it employs a reactive material like bleaching clay.

The proposed rules also list common extraction methods that would fall outside the broad definition of “artificially derived cannabinoids” and not be banned, which includes:

(A) Separating a naturally occurring chemical substance from the plant Cannabis family Cannabaceae by a chemical or mechanical extraction process;

(B) Converting a naturally occurring cannabinoid acid to its corresponding cannabinoid by decarboxylation without the use of a chemical catalyst; or

(C) Manufacturing a cannabinoid that occurs naturally in the plant Cannabis family Cannabaceae from a chemical substance derived from the plant Cannabis family Cannabaceae by mimicking or accelerating natural degradation process using only heat, light, pressure, air, or oxygen.

Blanket Ban of Artificially Derived Cannabinoids under the Proposed Rules

RAC members representing the OLCC called the proposed rule a blanket ban on all artificially derived cannabinoids that is justified due to the lack of reliable testing for artificially derived cannabinoids and the lack of data on the effects of these cannabinoids. A RAC member representing the Oregon State Police piggybacked on this comment adding that law enforcement is not worried about the known effects of these products, but rather, the unknown properties and characteristics of newer artificially derived cannabinoids.

Push Back from Industry Advocates

The proposed blanket ban is a point of contention for industry advocates who contend that HB 3000 tasked the OLCC with creating a regulatory framework for artificially derived cannabinoids, not an outright ban. HB 3000 tasked the OLCC with “regulat[ing] the processing, transportation, delivery, sale and purchase of artificially derived cannabinoids.” The proposed rules offered by the agency takes this authority to the extreme by outright forbidding licensees from manufacturing these products.

Industry advocates argue that Oregon is setting a bad example for other states and that Oregon has the policy expertise to regulate these products. Alternatively, others worry that the blanket ban will set Oregon behind other states that allow for the production and sale of non-intoxicating artificially derived cannabinoids.

Industry advocates also worry that CBD isolates like CBN will be included under the ban. Industry advocates argued that non-intoxicating derivatives should be allowed if they are sold in a pure form, and if it can be shown that no residual solvents or adulterated products are present.

One industry advocate recommended creating research certificates that licensees can apply for to conduct in-house analysis of artificially derived cannabinoids. They argued that this flexibility, along with sound regulations for testing and labeling requirements, will sufficiently protect public health and allow producers to experiment with artificially derived cannabinoids that have promising health benefits for consumers..

Sell-Down Period

Proposed rule OAR 845-025-1310(4) would give licensees until April 1, 2022, to sell all their products that include substances produced from processes that would be banned under the proposed definition of artificially derived cannabinoid.

According to industry advocates, edibles containing CBN may be included in the ban, and given the popularity of these products, producers could suffer heavy losses if they cannot sell off all their product. OLCC representatives responded that they may consider extending the sell down period. The agency also seemed receptive to the prospect of working with edible producers to figure out what type of CBD derivates will be allowed.

Where the Delta-8 RAC Goes from Here

Industry advocates will likely continue to argue that the administrative rules regulating artificially derived cannabinoids should focus on banning products that are intoxicating or pose a threat to public health. An unanswered question left open after this first RAC meeting is how do regulators determine whether the presence of naturally occurring derivatives, like CBN, are the result of a banned manufacturing process?

This RAC will also have to figure out whether these proposed rules will cover emerging extraction methods, such as biosynthetic derived processes, that do not employ the type of chemical processes that would be banned under the currently proposed definition of “artificially derived cannabinoid.”