The hemp industry’s explosive growth following the 2018 Farm Bill has produced a number of consequences, some intended and many more almost certainly never considered by lawmakers. The development of THC acetate ester (THCO), a synthetic substance created from hemp, almost certainly falls within the latter category.

Recently, THCO has gained substantial popularity. In a Feb. 13, 2023, letter, however, the Drug Enforcement Agency (DEA) stated that delta-8 and delta-9 THCO—unlike delta-8 and delta-10 tetrahydrocannabinol (THC) that is naturally derived from hemp—fall within the Controlled Substances Act’s (CSA) definition of “marijuana.” As a practical matter, this made the distribution and possession of delta-8 and delta-10 THCO illegal under federal law. The letter rocked the hemp industry and those who provide ancillary services to the industry such as banks, insurance companies and commercial real estate companies.