Within the cannabis industry, there is often confusion between the different types of cannabinoids. Learn more about what separates the cannabinoids from one another and how it impacts insurance policies. 

Cannabinoids can be described as,Any of a group of closely related compounds which include cannabinol and the active constituents of cannabis.” Given that at least 60-100 different cannabinoids have been identified”, the grey areas between the different types of cannabinoids proceed to enlarge. Of the identified cannabinoids, there are 4 that are of great interest: Delta-9 tetrahydrocannabinol (THC), Delta-8 tetrahydrocannabinol, CBD (Cannabidiol), and CBN (Cannabinol). Even though these cannabinoids are similar, there are stark differences leaving some federally legal, while others are not. 

Differences between The Cannabinoids 

As the cannabis industry continues to grow, so do the importance in understanding the differences between the different cannabinoids. First, it is important to understand that, “Cannabinoids bind to receptors found throughout the brain and body.” Throughout research, it has been determined that there are two receptors in the human body: CB-1 and CB-2. CB-1 is found in brain cells while CB-2 is found throughout the body. Each cannabinoid binds to either CB-1,CB-2, or both receptors producing contrasting effects. It may be easier to think of it this way, you have a key and a lock, the key being the cannabinoids and the lock being the receptors. The key opens the lock, in this case the cannabinoids unlock the receptors generating a euphoric state. Delta-9 (THC) binds to CB-1 receptors, which can bring about psychoactive effects as well as initiate a state of relaxation. Delta-8 binds with CB-1 and CB-2 receptors simultaneously, users experience a body relaxation while still undergoing psychoactive effects. Similarly to Delta-8, CBN also binds to CB-1 and CB-2 receptors. However, CBN does not produce psychoactive effects due to its low potency of THC. CBD on the other hand does not produce intoxicating effects, due to its process of binding only with the CB-2 receptors. Opposed to psychoactive effects, CBD only produces bodily effects. From a legal standpoint, CBD and CBN are considered legal across the country (except for 2 states) as long as it comes from hemp as defined by the 2018 Farm Bill if they are derived from hemp with less than a .3% concentration of THC. The legality of Delta-8 is a bit less clear. While it is also typically produced from legal hemp, there has been an ongoing debate as to if these products are truly legal. As of now, consumers can access Delta-8 products in most places they purchase CBD  products. Despite being legal in some states, Delta-9 and other products derived from marijuana rather than hemp are not legal under the current federal framework. 

Grey Area Among Insurance Policies

 It is often hard to distinguish the different characteristics between each cannabinoid, resulting in some grey areas across insurance policies. As John Deneen of AmWins has pointed out, “Many carrier forms will define “hemp” based on total THC content, not distinguishing between delta-9 and other variants. Delta-8 products may be legal yet still excluded on the coverage form, even when a policy form extends coverage to delta-8 products, they may fall outside of underwriting appetites.” Given this information, products may need to be covered as marajuana opposed to hemp. Therefore, it is important for all parties involved to understand the variations in order to use forms that cover the insured’s product. Due to the favoring of CBD and other minor cannabinoid products from a legal perspective, CBD has received the most attention in this field, with CBN on the rise. Although, from a legal point of view, there is a little more wiggle room with respect to cannabinoids, there are some issues that arise. For instance, “Policies written with designated products limitation wording, defining an insured’s products as “CBD products” can unintentionally exclude other cannabinoid products that do not contain CBD.” All in all, it is crucial to understand the differences in the cannabinoids and how to cover them within each policy. 

At AlphaRoot we take pride in understanding the different Cannabinoids and how they affect one’s insurance program. We are constantly reviewing carrier forms and endorsements to make sure our insured’s are properly covered. Please do not hesitate to reach out if you have any questions or would like for the AlphaRoot team to examine your current coverage to make sure you are classified/covered appropriately.

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