Tuesday, January 17, 2023
Notable accounting of "legal" Delta-8 THC products
This interesting new Forbes article, "Delta-8 THC Generated $2 Billion In Revenue In Two Years, Report Finds," provides a summary of interesting economic data regarding the interesting "legal" THC products. Here are excerpts:
Delta-8 THC products have seen a surge in popularity in the past two years, resulting in over $2 billion in sales as an alternative to traditional marijuana. According to a recent report by cannabis analytics firm Brightfield Group, the increasing popularity of delta-8 THC products is causing other cannabis industries to take notice and take action.
Delta-8 THC is a psychoactive cannabinoid derived from hemp that has been reported to produce similar but milder effects than traditional delta-9 THC contained in marijuana. Delta-8 THC is found naturally in small amounts, but the products currently on the market are created by chemically converting CBD into the Delta-8 molecule.
Delta-8 THC products popped up following the 2018 Farm Bill, which legalized hemp cultivation with a THC level below 0.3% at the federal level. However, the legalization brought companies to produce a wide array of products containing minor non-psychoactive cannabinoids, such as CBD and CBG, but also other cannabinoids that have milder psychoactive effects than THC, which are not categorized as illegal because they are derived from hemp.
However, there have been safety concerns raised about Delta-8 THC and similar products, as the conversion of CBD molecules into THC molecules requires a skilled chemist to ensure safety, and improper or imprecise techniques can lead to high levels of impurities in the final product. In addition, the health effects of consuming these impurities are currently unknown.
Nevertheless, the report notes a considerable overlap among the users of CBD, cannabis, Delta-8, and other newly developed cannabinoid products. The report indicates that 35% of CBD users have purchased psychoactive hemp-derived products within the last half-year. Furthermore, in states where marijuana is legal, nearly a quarter of marijuana users express interest in purchasing delta-8 products in the future. As consumers are inclined to experiment with new products, there may be a shift towards delta-8 over time, particularly if the cost difference remains favorable.
In states where marijuana is still illegal, delta-8 has emerged as a cost-effective and accessible way to experience psychoactive cannabis. It can be obtained legally or through mail-order, providing consumers with a less risky (legally) alternative to getting marijuana illegally. That was also confirmed by a study published last year, which showed that the public interest in delta-8-THC increased rapidly in 2020 and 2021 and was exceptionally high in those U.S. states that haven't decriminalized or legalized recreational cannabis.
However, the report notes that delta-8's increasing popularity in places where marijuana is still illegal could negatively impact support for legalization. "If Delta-8 continues to gain popularity and build a foothold in areas where Delta-9 is restricted, legalization measures could see less popular support and grassroots fundraising, slowing progress toward full U.S. legalization," the report reads.
In addition, it seems that there is already a significant amount of confusion between delta-8 and delta-9, the main compound of marijuana, even in places where that is legal. The report observes that retailers selling delta-8 products present themselves as dispensaries and do not clarify that the compound is derived from hemp.