On May 19, 2022, the U.S. Circuit Court of Appeals for the Ninth Circuit issued an opinion holding that Delta-8 THC products are legal at the federal level and eligible for intellectual property protection. The Ninth Circuit held that the “2018 Farm Bill was silent with regard to Delta-8 THC,” writing that “regardless of the wisdom of legalizing delta-8 THC products, this Court will not substitute its own policy judgment for that of Congress.” According to the Court, if the bill “inadvertently created a loophole legalizing vaping products containing delta-8 THC, then it is for Congress to fix its mistake.”

 The case involved two companies selling products both labeled under “Cake” branding. Manufacturer AK Futures argued that a competitor was selling counterfeit “Cake” Delta-8 THC products. The competitor did not contest that it was selling counterfeit “Cake” products, but instead it argued that AK Futures could not hold a valid trademark because Delta-8 THC was illegal under federal law.

The Ninth Circuit reviewed the text of the 2018 Farm Bill, which removed “hemp” from the federal list of controlled substances. The statutory definition of “hemp,” according to the Court, discussed “any part” of the cannabis plant, including derivatives, extracts, and cannabinoids, each with concentrations of Delta-9 THC of 0.3% or less by dry weight. Delta-9 THC is the substance most commonly associated with a cannabis “high,” and Delta-8 THC also has psychoactive and intoxicating effects.

Given that AK Futures’ hemp-derived Delta-8 THC products did not contain more than 0.3% Delta-9 THC, the Court held the products fit within the 2018 Farm Bill’s definition of “hemp” and would, therefore, be entitled to federal trademark protection. Ultimately, the Court determined that if Congress inadvertently legalized Delta-8 THC as “hemp,” it was now Congress’s responsibility to address it.

Federal and state officials are taking action on Delta-8 THC, with the FDA recently issuing new warning letters and consumer warnings on Delta-8 THC. An immediate implication of the Court’s opinion is clarifying that intellectual property rights exist for hemp-derived Delta-8 THC product manufacturers. But the opinion stopped short of full legalization for all Delta-8 THC products. Many states have expressly regulated Delta-8 THC, with some outright prohibiting sales of the substance. Additionally, the 2018 Farm Bill explicitly noted that “hemp” products must still comply with other applicable federal laws and regulations, such as those applicable to products regulated by the FDA. The FDA’s recent warning letters cited companies for, among other things, unlawfully adding Delta‑8 THC to food. Time will tell whether federal lawmakers answer the Ninth Circuit’s invitation to address this Delta-8 THC “loophole.”