Todd Rokita pushes nationwide Delta 8 ban as Indiana hemp industry fights for survival

EVANSVILLE — Indiana Attorney General Todd Rokita and officials in more than a dozen states petitioned congressional leaders on Friday to set the record straight on Delta 8 THC and other popular hemp-based products, which have occupied a legal gray area in much of Indiana due to a legal opinion Rokita issued last year.

Rokita's petition to Congress comes amid an ongoing lawsuit that challenges his ruling that Delta 8 THC is illegal under Indiana law, a claim that has for months upended a lucrative industry in a state that had become a hub for hemp producers, processors and sellers.

On Tuesday, one of the plaintiffs in that suit, The Midwest Hemp Council, drafted their own letter to congressional leaders urging them to keep federal laws and regulations that permit the production and sale of Delta 8 THC on the books.

"Eighty percent of licensed acres for hemp production in 2022 and 2023 were dedicated to cannabinoid production to meet the increasing consumer demand for these hemp products," Justin Swanson, an attorney and the Midwest Hemp Council's president, wrote in the letter.

Business owners in Evansville had to pull Delta 8 THC products from store shelves under threat of prosecution in June, according to Courier & Press interviews, as did stores in many other Indiana counties that received instructions from police and prosecutors who relied on Rokita's opinion to issue do-not-sell orders.

The dispute between Rokita and the region's rapidly growing hemp industry could shape state and federal law as cases drag on in court and an array of lobbyists urge officials to reign in, or expand, hemp production in Indiana and beyond.

Background: What is Delta 8 THC? Therein lies part of the dispute over Rokita's 2023 opinion

First discovered in 1965, Delta 8 THC is similar to the primary intoxicating compound found in marijuana, Delta 9 THC — though it is thought to be substantially less potent, according to research that surveyed users' subjective experience when taking the drug.

Delta 8 THC is commonly manufactured in the United States by modifying a well-known compound found in the hemp plant: CBD, which remains legal both federally and in Indiana. CBD is a non-psychoactive compound found in both hemp and marijuana plants and has shown efficacy as an anti-inflammatory medication and in the treatment of epileptic disorders.

Keith Johnson, a chemist and formulator at The Home Town Apothecary in Indianapolis, told the Courier & Press that Delta 8 THC is manufactured in a laboratory environment using a well-established process of catalyzation to refine hemp-derived CBD into a chemically pure Delta 8 THC product.

"With hemp-based THC, it is organic," Johnson said. "It's just sped up in a laboratory environment instead of it happening naturally, like in a field or in the (hemp) plant itself. We're just accelerating the degradation of CBD into Delta 8."

But Rokita's official opinion, issued in June, found that current state law outlaws products that contain Delta 8 THC and other intoxicating compounds that can be derived from the hemp plant, in part, because these cannabinoids are "synthetic," he claimed. The Indiana Prosecuting Attorneys Council then distributed a letter local prosecutors could distribute to businesses informing owners of Rokita's finding.

According to court records, that lawsuit now lists Vanderburgh County Prosecutor Diana Moers and EPD Sgt. Nathan Hassler as codefendants for their role in implementing Rokita's ruling on Delta 8 THC in Evansville.

An Evansville-based hemp business, Wall's Organics, joined 3Chi in the suit as a plaintiff.

But 3Chi LLC, a major player in the state hemp agency, as well as the Midwest Hemp Council and others claim Rokita's office got its science wrong when it drafted the official opinion last year. While a process of synthesis is required to efficiently produce cannabinoids like Delta 8 THC, the base ingredient for that process is CBD, an organic compound derived from hemp.

"In the lab with CBD, we're just changing a few molecules, or a few atoms in the molecule of CBD, and converting it into Delta 8," said Johnson, who for a time operated his own Delta 8 THC production facility. "In order to be successful at it, and to get the conversion in the first place, you really have to know what you're doing."

Johnson contends that Delta 8 THC, as it is produced in Indiana, is not a synthetic, wholly man-made compound. It could not be made without the hemp plants that lend Delta 8 THC its base ingredient.

That distinction could prove central to the ongoing suit against Rokita. 3Chi LLC, The Midwest Hemp Council and Wall's Organics believe current state and federal law is on their side.

Rokita, others urge Congress to reform Farm Bill that legalized hemp, Delta 8 THC

In a news release, Rokita's office on March 22 characterized the nation's current legal framework for regulating the hemp industry as "hazy," even as the attorney general contends that state law allows for a ban on products like Delta 8 THC.

Rokita and a bipartisan coalition of officials in 18 states and the District of Columbia are now pressing Congress to modify the Farm Bill after a 2018 update legalized the commercial production of hemp, which led to a boom in the CBD industry and the proliferation of products like Delta 8 THC, particularly in states that still outlaw marijuana – such as Indiana.

The 2018 Farm Bill greatly expanded the legal definition of "hemp" to include "all derivates," "extracts" and compounds found or derived from the plant so long as the products contain less than 0.3% of Delta 9 THC.

Businesses took that to mean they could legally produce products that contained hemp-derived Delta 8 THC, since the compound is manufactured using hemp-derived CBD and contains less than 0.3% Delta 9 THC. Rokita argues that those products are still illegal in Indiana.

"This legislation was supposed to boost industrial hemp as an agricultural commodity," Rokita said of the 2018 Farm Bill. "That’s a goal that Hoosiers support without reservation. We’re talking about a plant that can be used to make auto parts, biodegradable plastic, biofuel, paper, textiles and other useful products.

"But now we have a $28 billion grey market flooding our communities with unregulated, highly potent products that are confusing to Hoosier businesses and dangerous to consumers of all ages."

Rokita and Arkansas Attorney General Tim Griffin are urging Congress to rewrite the Farm Bill to ban "dangerous intoxicants" while still leaving room for the industrial hemp market to flourish.

The Midwest Hemp Council and the industry are pressing Congress to take a wholly different approach.

"The Midwest Hemp Council urges Congress to protect the definition of hemp found in the 2018 Farm Bill so American farmers can enjoy heightened legal certainty and consumers can continue to enjoy broad market access to hemp products that provide functional relief for millions of Americans," the council wrote in its letter to the House Committee on Agriculture and the Senate Committee on Agriculture, Nutrition and Forestry.

Rokita's interpretation of the 2018 Farm Bill and Indiana's own hemp statutes constitutes much of the basis for 3Chi LLC's ongoing lawsuit. The business and its co-plaintiffs assert that both federal law and Indiana statute ensure their right to sell hemp-derived products like Delta 8 THC.

3Chi's attorneys cite Senate-Enrolled Act 52, which Governor Eric Holcomb signed into law in 2018, as evidence that the company's Delta 8 THC products are legal to manufacture, sell and possess in Indiana. The law shields an array of hemp products from being classified as controlled substances under the state's narcotic statutes.

"S.E.A. 52 encourages the manufacturing, distribution, retail sale and possession of low-THC hemp extracts that meet certain quality control standards by, in part, exempting 'low-THC hemp extract' from the definition of 'marijuana,' 'hashish,' 'hashish oil,' 'controlled substance' and 'controlled substance analog,'" 3Chi's attorneys wrote in the civil complaint.

Despite those exemptions, police in Indiana can cite or arrest persons who sell or possess hemp extract products like Delta 8 THC under Rokita's opinion if local prosecutors are willing to put its conclusions into force.

Evansville business owner submits testimony to lawsuit

Matt Wall, of Wall's Organics in Evansville, said his Delta 8 THC products complied with state and federal law. Still, he had to cease selling the products last year or face legal consequences, which led him to join 3Chi and the Midwest Hemp Council in a civil suit seeking to overturn Rokita's ruling.

Besides Rokita, four local law enforcement officials who carried his legal opinion into force are named as defendants: Moers, the Vanderburgh County prosecutor, Hassler, of the EPD, Huntington County Prosecutor Jeremy Nix and Huntington Police Department Sgt. Darius Hillman.

In written testimony filed in August, Wall said Hassler entered his shop on Aug. 4 and informed him that all low-THC hemp extract products had to be removed from store shelves, an instruction Hassler attributed to Rokita's opinion.

"Sergeant Hassler informed me that he would return to Wall's Organics and that he did not want to see any Delta 8 THC or other low THC hemp extract products on the shelves when he returned, or arrests would be made," Wall wrote.

"I tried to explain to Sergeant Hassler that all of Wall's Organics' products were compliant with the law because they contained less than 0.3% Delta 9 THC (and I had paperwork to prove it)," Wall added. "But he told me that it did not matter and that Wall's Organics could no longer sell these products in Evansville."

Other local shops got paid similar visits by Evansville police, according to business owners who spoke to the Courier & Press last year. In each case, the officer bore a letter from the Vanderburgh County Prosecutor's Office that cited Rokita's official opinion.

Moers told the Courier & Press at the time that the Indiana Prosecuting Attorneys Council drafted language for all local prosecutors to distribute, and pursuing the matter was not, she said, "an independent decision."

But Swanson, who is listed as an attorney in the suit against Rokita, told the Courier & Press that some, but not all, local prosecutors distributed such letters. That in turn has led to a hodgepodge of Delta 8 THC enforcement across the state, he contends.

"I think we maybe had 10 or 15 county prosecutor letters go out targeting small business owners," Swanson said. "It tended to be some of the more rural areas, though Evansville obviously is not."

Swanson, Johnson and Indiana hemp companies contend that the industry is not opposed to sensible regulation targeting safety, quality control and restrictions that would make it more difficult for minors to obtain hemp extract products.

If Rokita's opinion is allowed to stand, and if Congress updates the Farm Bill to ban hemp-derived compounds that could be considered "intoxicating," some predict that Indiana's and the nation's burgeoning hemp industry could collapse, triggering a cascade of business closures as processors and retail shops struggle to survive in a constrained market.

"I've talked to friends of mine that have stores and I asked, 'How much of your sales come from Delta 8 THC and things like that?'" Johnson said. "And it's anywhere from 60% to 80% of their business. ... All these mom-and-pop stores would shut down, the farms will shut down and the labs that are making (Delta 8 THC) products will be shut down."

Rokita and other officials who have pushed for Congress to reign in much of the hemp industry by outlawing intoxicating hemp-derived compounds argue that doing so would allow for farmers and the industrial hemp sector to take up the slack.

On March 18, the parties to the suit met by counsel to discuss the "state of discovery and readiness for a settlement conference," according to filings in the U.S. District Court for the Southern District.

The next status conference in the case is scheduled for July 2.

Congressional watchdogs have noted that hemp continues to be a prominent issue in Congress as representatives weigh competing visions for how best to regulate hemp and hemp-derived products as they shape the 2023-2024 Farm Bill.

Houston can be contacted at houston.harwood@courierpress.com

This article originally appeared on Evansville Courier & Press: Todd Rokita pushes nationwide Delta 8 ban amid hemp lawsuit