The R Street Institute released an article on Mar. 18 examining the challenges posed by regulatory lag, particularly in relation to new intoxicating substances such as hemp-derived cannabinoids. The article highlights how slow or inflexible regulation can lead to unregulated markets that may pose risks to consumers.
This issue is significant because when regulations do not keep pace with emerging products, especially those with intoxicating effects, it can result in a “wild west” scenario where consumer safety is not adequately protected. The article uses the example of delta-8 and delta-10 tetrahydrocannabinol (THC), which are derived from hemp and have become widely available due to gaps in federal regulation.
According to the R Street Institute, the Controlled Substances Act originally classified all cannabis products as illegal until the 2018 Farm Bill differentiated hemp from marijuana based on its low delta-9 THC content. However, manufacturers began producing large amounts of delta-8 and delta-10 THC from cannabidiol (CBD) found in hemp, exploiting a loophole that allowed these products to be sold without clear regulatory oversight.
The article notes that this lack of regulation led to inconsistent age restrictions, labeling requirements, and safety standards for products containing delta-8 and delta-10 THC. In response, some states have taken action: Ohio’s governor recently signed a bill banning “intoxicating hemp,” while Texas’ governor vetoed a similar ban. Meanwhile, federal lawmakers included a provision in a November 2025 funding package that will redefine hemp based on total THC content starting Nov. 12, 2026—effectively closing the loophole for these substances.
The R Street Institute argues that moving from an unregulated market directly to prohibition can create new problems, including criminal justice issues and the emergence of more dangerous unregulated substances. The organization suggests that policymakers should seek input from experts and stakeholders before developing regulations and remain flexible as new evidence emerges.
“Finding the regulatory sweet spot for each intoxicating substance requires an understanding of its chemistry as well as the social environment that creates demand for it,” the article says. It concludes by emphasizing the importance of considering both potential benefits and drawbacks when regulating either source materials or final consumer products.
