Ninth Circuit panel holds (in trademark dispute) that "delta-8 THC products are lawful under the plain text of the Farm Act"

In this post a few month ago, I noted the growth of so-called delta-8 THC products and all the legal uncertainty around them. Yesterday, in an important ruling, a Ninth Circuit panel directly address question about the legality of delta-8 products under federal law. In AK Futures LLC v. Boyd Street Distro, LLC, No. 21-56133 (9th Cir. May 19, 2022) (available here), a trademark dispute prompted the panel to fully engage the arguments surrounding whether the 2018 Farm Bill served to legalize cannabis products without the standard delta-9 THC, and the opinion ultimately embraces the claim that delta-8 THC products derived from hemp CBD are legal products under federal law.  Here are some key passages from the opinion:

[T]he parties dispute whether the possession and sale of delta-8 THC is permitted under federal law and, consequently, whether a brand used in connection with delta-8 THC products may receive trademark protection.  AK Futures argues that delta-8 THC falls under the definition of hemp, which was legalized by the 2018 Farm Act.  Boyd Street argues a contrary interpretation of the Act based on agency documents and congressional intent....

AK Futures argues the Farm Act’s definition of hemp encompasses its delta-8 THC products so long as they contain no more than 0.3 percent delta-9 THC.  Plain meaning supports this interpretation....  Importantly, the only statutory metric for distinguishing controlled marijuana from legal hemp is the delta-9 THC concentration level....

The Farm Act’s definition of hemp does not limit its application according to the manner by which “derivatives, extracts, [and] cannabinoids” are produced.  Rather, it expressly applies to “all” such downstream products so long as they do not cross the 0.3 percent delta-9 THC threshold....

Regardless of the wisdom of legalizing delta-8 THC products, this Court will not substitute its own policy judgment for that of Congress.  If Boyd Street is correct, and Congress inadvertently created a loophole legalizing vaping products containing delta-8 THC, then it is for Congress to fix its mistake.  Boyd Street’s intent-based argument is thus unsuccessful.  With that, neither of Boyd Street’s counterarguments dissuade us from the conclusion that AK Futures is likely to succeed on the merits of its trademark claim.