How Delta 8 and Synthetic THC Bypass Edible Restrictions and Taxes in Canada

The excise tax on Canadian THC products is extreme, according to a recent report documented on CLN. More recently, the excise tax in the Canadian market has begun to motivate industry into moves similar to the problems created by America’s farm bill south of the border. A processor has patented a synthetic variation of THC to avoid excise tax, but Delta 8 has yet to circumvent restrictions on edible formulations in Canada.

Delta 8 wave under the US Farm Bill

Delta-9 THC is federally illegal in the United States. However, in 2018, the Farm Bill redefined cannabis with less than 0.3% Delta-9 THC as hemp. After that, hemp-derived cannabinoids like CBD were legal, minus some nuances like the Analogue Act. This meant that the Farm Bill inadvertently defined any other form of THC as hemp.

Supply of CBD biomass exceeded demand and prices for the therapeutic cannabinoid plummeted. The processors solved the problem by chemically converting the legal CBD isolate into a lighter THC isomer. Loopholes created by the Farm Bill therefore led to a wave of legal Delta-8 and synthetic THC sales with no taxes or regulations. And over the next four years, temporary state and federal laws continued to fail to fill those gaps.

Synthesizing loopholes in Canadian THC taxes

New products defined under the Cannabis Act must be approved under Section 244 of the Regulations through a Health Canada portal. And all new cannabis products, regardless of cannabinoid content, must go through the portal.

In Canada, CBD has never been less legal than THC – up to a certain number of milligrams per edible package. A producer’s ability to grow CBD is at least as limited as THC. Fields of CBD biomass grow in the foothills of BC’s coastal mountains and numerous other locations across Canada’s countryside.

However, in Canada, THC legally defines delta-9-tetrahydrocannabinol. In contrast, the law and regulations do not restrict delta-8-THC in edibles. For example, THC and THCa are both defined as Delta-9 according to the law and guidelines within the portal. Furthermore, total THC only defines the amount of D9, but not other isomers of the cannabinoid.

Taxation of THC-o-Acetate in the Canadian Market

The CEO and founder of a Canadian cannabis lawsuit discussed the waves her new THC-o-acetate patent will make in Ottawa in a Linkedin post. Excise tax evasion is the reason for the company to bring a synthetic variant of THC to the Canadian market. However, more regulations will likely be the answer. This assumes that any ripples caused by the patent will create flip-flop laws akin to America’s post-farm bill market.

Let us know what you think of Delta 8 for bypassing THC limits in edibles in these comments. Should synthetic forms of THC or other cannabinoids be used as a tax-free cash heist in Canada?