In a recent decision, AK Futures LLC v. Boyd St. Distro, LLC, No. 21-56133, the 9th Circuit ruled that products containing delta-8 tetrahydrocannabinol (delta-8 THC) can fall within the statutory definition of “hemp” federally legalized under the 2018 Agriculture Improvement Act (2018 Farm Bill). Thus, these products fall outside the definition of a controlled substance, unlike delta-9 THC products. In doing so, the court also concluded that such products are legal and therefore entitled to trademark protection.
AK Futures LLC, a manufacturer of e-cigarette and vaping products, brought suit against Boyd Street Distro, LLC, a storefront and smoke products wholesaler, for trademark and copyright infringement. AK Futures alleged Boyd Street was selling counterfeit versions of its “Cake” branded e-cigarette and vaping products that contain delta-8 THC. Boyd Street, though not contesting the finding that it was selling counterfeits, sought relief from injunction granted by the District Court under two theories: 1.) delta-8 THC remains a Schedule 1 controlled substance as it is “synthetically-derived” and therefore illegal under federal law; and 2.) that even if legal, substances legalized by the 2018 Farm Bill must be for an industrial purpose and not for human consumption.
The 9th Circuit disagreed with Boyd Street’s first theory and determined that delta-8 THC products derived or extracted from the cannabis sativa plant can fall within the plain meaning of “hemp” as found in the 2018 Farm Bill, and can therefore be legal, if such products contain no more than “0.3% delta-9 THC.” The court also determined that no such industrial purpose limitation exists within the definition of hemp or its exemption from the Controlled Substances Act. In fact, the court made clear that if “Congress inadvertently created a loophole legalizing vaping products containing delta-8 THC, then it is for Congress to fix its mistake.”
While the 9th Circuit upheld the injunction granted by the District Court, the court noted that “it is entirely possible that AK Futures may ultimately fail to show that its products stay within acceptable delta-9 THC limitations.” In other words, although delta-8 THC products can be legal and therefore eligible for trademark protection, should evidence be presented showing that AK Futures delta-8 THC products contain more than 0.3% delta-9 THC, trademark protection would no longer be applicable.
While this ruling is widely seen as a positive for manufacturers of delta-8 THC products, it does not provide unrestricted protection from state or federal laws. Other circuits may still come to a different conclusion and nearly 20 states are attempting to or have succeeded in restricting or banning delta-8 THC. Moreover, this ruling does not protect against various federal regulations. For example, the Food and Drug Administration has become increasingly concerned about products containing delta-8 THC, stating that such products are potentially unsafe, make claims in violation of the Federal Food, Drug and Cosmetic Act (FFDCA) and “are packaged and labeled in ways that may appeal to children.” These concerns, along with recent reports related to delta-8 THC and CBD products, led to the recent issuance of five additional warning letters as discussed here.
Therefore, until such issues are resolved by the Supreme Court or by Congress, businesses manufacturing and/or selling delta-8 THC products should be cautious and ensure compliance with all state and federal laws.