CBD conversion oil harms operators and consumers alike

“Hot dog water” is a tongue-in-cheek term for cannabis distillate used by some industry insiders, referencing that the substance is cheaply made and most often sourced from the remnants of leaves, stalks and stems from past harvests. Distillate is the base for most edibles, vape cartridges and topicals.

As Michigan's market continues to mature and consumers branch out from flower, these segments are growing, and the competition is getting fierce. The race to the bottom on pricing and quality is happening just as much in the edible and vape games as it is in flower cultivation. Retailers have been flooded with cheaper-than-usual distillate-based products recently, and many in the industry are pointing to CBD conversion oil as one of the main reasons for the influx.

CBD conversion oil starts its life cycle as hemp, which has a negligent amount of delta-9 THC, the chemical that causes a typical high. Hemp is federally legal, it’s grown outdoors by the acre in many places, and the regulatory oversight required to grow and sell it is far less intense and much less expensive than it is for cannabis. To make CBD conversion oil, the CBD-rich cannabinoids are extracted from hemp and exposed to different acids that convert the CBD into delta-8 THC, which has a psychoactive effect.

You’ve probably seen delta-8 THC products in head shops, gas stations or even direct-to-consumer websites. They’ll definitely get you high, but the regulatory oversight is so lax that consumers are taking a gamble as far as quality and safety go. These products are sold outside the state’s legal cannabis market and don’t have to comply with the state’s oftentimes stringent regulations. They’re also significantly cheaper to produce, so they’re being used to undercut legal-market operators.

Aside from the full-on assault being waged at questionable gas stations across the state, nefarious actors are almost certainly backdooring products made with CBD conversion oil into the legal market. Recently, Infinite Chemical Analysis Labs, a state-regulated testing lab, estimated that as much as 30% of the Michigan legal market’s distillate-based products contain CBD conversion oil, or in some cases non-psychoactive MCT oil, which is being used by profiteering producers to thin out distillate. This finding helps bring the rock-bottom prices of distillate-based products into focus.

Brian Hanna, executive director of the state Cannabis Regulatory Agency, has indicated at many speaking events that the agency is aware of the proliferation of CBD conversion oil and that a crackdown is imminent. Many industry insiders believe this is another issue a state-run compliance lab would be able to tackle, but a lot of businesses are frustrated and welcome any proposals on how to crack down on the use of conversion oil.

Melanie Lavender, director of business operations at cultivation, processing and retail operation Evolution Brands, said, “Compromised distillate is running rampant in our industry. The good players in cannabis need to stand up to those not-so-savory people who like to cut corners to line their pockets with money at the cost of the masses.”

She said Evolution is launching a campaign to inform its customers that they’re guaranteed not to receive tainted or backdoor products.

All of this will be interesting to see play out. In short, it all goes back to the theme of many of my pieces: You get what you pay for. Along with basically ripping off consumers, the use of CBD conversion oil in both the legal and extralegal markets is helping ensure that only established companies with large cash reserves have a chance in the extract-based product sector. I implore consumers to ask their budtenders about the way the oil is sourced in products they’re looking to buy. Consumer pressure will go a long way in deterring low-quality products in the future.