The Austin hemp manufacturer Hometown Hero applied for a temporary restraining order on the state's delta-8 ban, but a judge denied it. Now, Hometown Hero will prepare to argue its case for a temporary injunction against the delta-8 ban at a remote hearing scheduled for Nov. 5. Hometown Hero CEO Lukas Gilkey said in a video update early Monday morning that they would be removing delta-8 and other THC isomer products from shelves until further notice.
In a lawsuit filed against the DSHS and its commissioner, Hometown Hero argues that the state didn’t follow required steps when it made delta-8 and other THC isomers Schedule 1 substances. The lawsuit was filed with help from Bayou City Hemp, the Texas Hemp Federation and several other organizations and companies.
The Houston Chronicle obtained and reported on the lawsuit early Friday. The decision isn't the final nail in the coffin for delta-8. It just means the judge didn't see a reason to grant emergency relief from enforcement of the recent change. The judge apparently agreed with what the state wrote in its response to the TRO application. The state wrote, "Emergency relief requires an emergency. No emergency exists here."
In an emailed statement, Ben Meggs, cofounder and CEO of Bayou City Hemp Company, said he was surprised by the ruling "as we believe procedural acts were violated by the Texas Department of State Health and Services.
"The true concern I have with this decision are the effects it has on farmers, businesses and consumers whose livelihood and well-being depend on it. Prohibition doesn’t work; we know that," Meggs said. "Banning Delta-8 creates a black market with less checks and balances in which the cannabinoid will still be sold underground. The responsible action is to regulate the industry and have companies operate in the open with transparency. Our next steps are to file a new suit that meets the legal burden so we can protect the rights and safety of Texans."
Delta-8 and other THC isomers were thought to be legal under federal and state laws that authorized the farming of hemp that contains less than 0.3% delta-9 THC, and companies have been selling the stuff accordingly. THC has several isomers, or chemicals with the same formulas but a different arrangement of atoms. Manufacturers take naturally occurring chemicals from legal hemp plants and process them to create delta-8 and other THC isomers that they argue are allowed by law.
This is because the state and federal government defined hemp in legislation as “the plant Cannabis sativa L. and any part of that plant, including the seeds of the plant 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% on a dry weight basis.”
But DSHS came out earlier this month and said delta-8 was, in fact, illegal.
The statement reads: “Texas Health and Safety Code Chapter 443 (HSC 443), established by House Bill 1325 (86th Legislature), allows Consumable Hemp Products in Texas that do not exceed 0.3% delta-9 tetrahydrocannabinol (THC). All other forms of THC, including delta-8 in any concentration and delta-9 exceeding 0.3%, are considered Schedule I controlled substances.”
The move sent the industry scrambling. Some shops pulled products from shelves while others kept selling and consumers stocked up.
Attorney David Sergi is representing Hometown Hero in its lawsuit. He wrote in the suit, “These recent developments have caught companies that sell hemp-derived products as well as their consumers off guard, immediately turning them into potential felons subject to arrest despite years of engaging in this same business without issue or law enforcement interference, and without having any knowledge of or intention to violate the law.”
This all started in August, when the U.S. Drug Enforcement Agency updated the federal controlled substances list so it was in line with the 2018 Farm Bill.
When the DEA “designates, reschedules, or deletes” anything from the controlled substances list, states can choose whether to adopt those changes. In Texas, this decision is up to the DSHS commissioner, John Hellerstedt.
But Sergi argues that changes to the federal list were just “conforming” it to the Farm Bill, not designating, rescheduling or deleting anything. They say this means DSHS didn’t have the authority to object to the changes. They also say the state failed to hold a proper hearing for such a change."Had this been properly noticed, there would not have been zero attendees and zero comments." – David Sergi, attorney
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In September last year, DSHS posted a notice online for the hearing on the changes. But it was titled “Objection to Implementing DEA Rule Changes” and didn’t provide any other context. No one showed up to the hearing or sent in public comments.
"Had this been properly noticed, there would not have been zero attendees and zero comments," Sergi said at the hearing on Friday.
When the state published its ruling in Texas’ official record in March, it used screen images of documents instead of searchable text, which made it harder for people in the industry to find.
People in the industry often use different services that search keywords in government documents published online to stay up to date with changes in the law. These services can’t find keywords in images like the ones provided in the state’s official record of the change.
At the hearing, Cynthia Akatugba, representing the state, argued that delta-8 is specifically named on the DEA’s list of controlled substances under the entry for THC. This is true, but the Hometown Hero attorney said the state is ignoring the difference between hemp derived delta-8 and marijuana-derived delta-8.
Akatugba also pointed out that the Federal Drug Administration and the Centers for Disease Control and Prevention recently posted warnings about delta-8 over manufacturing processes and its lack of regulation. Akatugba also argued that legislators never intended to make THC isomers legal when they passed HB 1325.
In an emailed statement, a spokesperson for DSHS said: "HB 1325 defined consumable hemp products as containing hemp. Both the state and federal definition of hemp allow for 0.3% or less delta-9 THC. HB 1325 does not address any other isomer of THC.”
There are still questions over if and how law enforcement will implement DSHS' latest move.
In an emailed statement, the Dallas Police Department said it's still considering how to move forward. "The Dallas Police Department is committed to enforcing the laws of the State of Texas, to include the Health and Safety Code," a DPD spokesperson said. "The Dallas Police Department is evaluating this ruling by the Department of State Health Services, to determine what efforts and/or enforcement actions will be taken."
Asked if the Texas Department of Public Safety would crack down on delta-8 and other THC isomers, a spokesperson said in an email that the agency "will continue to base its enforcement efforts on current statute, and we would refer you to the Texas Department of State Health Services for any questions regarding any changes they have made."
