It wasn’t long before stores began yanking the popular psychoactive products from their shelves. The result was a lawsuit led by Austin manufacturer Hometown Hero CBD against the state agency. Through the lawsuit, an injunction was granted against the ban on delta-8 and THC isomers, and the debate has been lingering in court ever since.
Now, after the state appealed the injunction that allowed the products back on the shelves, a hearing is scheduled for Sept. 5.
Several types of THC, the psychoactive component in cannabis, get users high. What’s often just referred to as THC is delta-9 THC. State and federal law says that cannabis with 0.3% delta-9 THC or less is considered legal hemp. Cannabis with more than 0.3% delta-9 THC is considered illegal marijuana.
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That’s why hemp companies like Hometown Hero started selling products with different forms of THC, like delta-8, which is generally regarded as less potent than delta-9. Other forms of THC, like delta-8 or delta-10, share the same chemical formula as delta-9 but are different in structure. These are called THC isomers, and are generally created through chemical synthesis. They and other compounds of the cannabis plant, like CBD, can also be referred to as cannabinoids.
Store shelves have been stacked with these THC isomers ever since federal and state law legalized hemp in 2018 and 2019, respectively. But in 2021, at least for a while, all those products got pulled from the shelves as DSHS declared them illegal, leading to the lawsuit.
Lukas Gilkey, founder and CEO of Hometown Hero, said in a video posted to the company’s Youtube channel that on Sept. 5, each side will be given 20 minutes to present its case. No new evidence can be submitted. What can be submitted are amicus briefs, which are briefs filed with the court by people or groups with interests in the lawsuit but not directly involved in the litigation. The company plans to have two amicus briefs filed on its behalf: one by veterans and one by members of the industry. Multiple veterans have testified as part of the lawsuit in support of Hometown Hero, saying THC isomer products have helped them cope with PTSD and prescription drug addiction.
While a loss is possible, the company and its attorneys are confident the hearing will go in their favor. Either way, it’s a fight that’s likely destined for the Texas Supreme Court.
Cynthia Cabrera, chief strategy officer of Hometown Hero, told the Observer that it could take weeks or months for a decision to be made after the Sept. 5 hearing.
If the hearing doesn’t go Hometown Hero’s way, the suit would be taken to the higher court. The company would then ask for the injunction to be reinstated to keep products on the shelves while it waited for the court to hear the case. “Our legal team is confident that the court would reinstate the injunction due to the immediate irreparable harm that would be caused,” Cabrera said.“It would be devastating to the industry and to the economy of the hemp industry.” – Cynthia Cabrera, Hometown Hero CBD
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On that harm, Cabrera referenced a July 2023 study by Whitney Economics, a cannabis economics data, research and consulting firm. The study found that hemp-derived cannabinoid operators are an economic force in Texas. The total sales from these businesses in 2022 are estimated to be greater than $8 billion. Of that, $3.3 billion came from CBD and other hemp-derived cannabinoids. “When you look at the entire ecosystem, what you’re talking about is impacting an $8 billion industry all the way from farmers, processors, manufacturers, retailers, distributors, wholesalers and ultimately the end consumer,” Cabrera said.
“You’d be talking about people losing their jobs, people closing their businesses, not being able to find another outlet for all that hemp that gets grown,” she said. “It would be devastating to the industry and to the economy of the hemp industry.”
But she and David Sergi, an attorney on the case, don’t think it will come to this. Sergi said he thinks they have a strong case and called this legal battle “the last stand for the prohibitionists.”
This was all kicked off in August 2020 when the U.S. Drug Enforcement Agency updated its list of controlled substances to align with the 2018 Farm Bill, which federally legalized hemp. When the federal agency “designates, reschedules, or deletes” a substance from the list, it triggers Texas’ ability to choose whether to adopt those changes.
However, Hometown Hero and its lawyers argue that the DEA didn’t designate, reschedule or delete anything from the federal list of controlled substances. Instead, they argue that the DEA was just conforming the list to be in line with federal hemp laws. To them, this means the state was never triggered to adopt or object to the changes. Aside from that, Hometown Hero argues that the state never gave proper notice or a proper hearing on the change.
DSHS posted a notice online in September 2020 for a hearing regarding changes to the Texas list of controlled substances. The notice was titled “Objection to Implementing DEA Rule Changes.” No one turned out for the hearing or sent in public comments.
The notice was posted in the state’s register, which includes text-searchable PDFs. These allow people to search key terms relevant to the hemp industry so they can keep up with changes in the law. But the state’s notice of objection to the DEA controlled substances list wasn’t text-searchable. “It was disingenuous the way they did it,” Sergi said, referring to the notice.
The argument is that if the notice was text-searchable, people would have shown up to the hearing and the change wouldn’t have gone through without objections. Instead, the change happened without a hitch.
Specifically, the state agency changed entries for THC and “marihuana extract” to include THC isomers like delta-8. The following year, DSHS posted on its website its contention that THC isomers were Schedule 1 controlled substances, precipitating the lawsuit with Hometown Hero. The company eventually secured an injunction to halt the THC isomer ban, which the state is now appealing.
If the state loses the appeal, it, too, could choose to bring the case to the Texas Supreme Court.
Some in the industry aren’t too sure of Hometown Hero’s chances in the higher courts. Zachary Maxwell, founder of Texas Hemp Growers, wrote in a recent blog post that he doesn’t think Hometown Hero’s arguments are going to cut it.
“Texas Hemp Growers has maintained from the beginning that the plaintiffs’ arguments [Hometown Hero’s] are not strong enough to prevail against higher judicial scrutiny,” Maxwell wrote.
He said the argument that proper notice wasn’t given because it wasn’t in a text-searchable PDF is interesting, but to his knowledge there are no open meetings laws that specifically say everything published in the Texas Register has to be searchable text.
“We are at that point where things can rapidly change for any business that has remained in the delta-8 market.” – Zachary Maxwell, Texas Hemp Growers
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“In addition to that, the Controlled Substances List is updated and posted annually,” Maxwell said. “I think a higher court could point this fact out and ask why the plaintiffs didn’t simply plan to check the updated list when it was published. The fact that it was published in the Texas Register, whether as image or text, should be enough to satisfy open meetings requirements. I believe higher courts will take the same position.”
He said that following the Sept. 5 hearing, it’s possible that delta-8 could become illegal again. Sergi, however, said this is highly unlikely.
To Maxwell, though, delta-8 and other synthetic THC isomers represent a dead end.
State and federal legislators seem to have the stuff in their crosshairs, as both have filed bills that could see the likes of delta-8 banned. Even though a federal appeals court ruled last year the products are legal under federal hemp laws, the DEA has signaled as recently as this year that it could make synthetic cannabinoids illegal. So, even if the Hometown Hero lawsuit prevails, a ban could come down in some other form. That’s why Texas Hemp Growers has been advocating for businesses to move away from products like delta-8.
“We are at that point where things can rapidly change for any business that has remained in the delta-8 market,” Maxwell wrote.
Cabrera said there are products the company could pivot to if the lawsuit doesn’t go the its way but that’s not really what she’s thinking about. She’s thinking about veterans and what is right. She said veterans have come out in full force to support these products, with some saying they’ve helped them get off of prescription opioids. “The goal is not to find the alternative," she said. "The goal is to fight for what’s right.”
