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DEA and CBD: The Controversy Explained…

Our last blog outlined just how difficult it can be to nail down the taxonomy of the hemp plant. For decades, scientists have been arguing about the nature of Cannabis. But, one thing has always been very clear: Cannabis, when grown as an industrial crop with low THC content, is not a narcotic. It cannot get you high. Not at all. So, why then is the Drug Enforcement Agency messing around with the regulation of hemp products? Let’s dive into it.

So, what exactly is the DEA’s new ruling?

Effective January 13, 2017, the DEA will begin using a new classification ‘code number’ for something they are calling ‘marijuana extract,’ which they define as an “extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.” This definition, although called ‘marijuana extract,’ would include products made from hemp. Under the DEA’s ‘Final Rule’, these ‘extracts’ will be categorized as schedule I drugs, along with methamphetamine and heroin.

The DEA uses codes to track different substances, but until this rule went into effect, it was unclear that other cannabinoids besides Tetrahydrocannabinol (THC) were being considered illegal by the DEA. The move effectively outlaws popular, medicinal products like CBD oil, which is (when made from hemp) a non-psychoactive compound was widely considered legal throughout the country.

The announced change in DEA policy came as a shock to the industry, and has had a major impact on sales. Will Oseroff of the Blue Ridge Hemp Company in Asheville, NC says, “We’ve not been affected by anything being illegal…but we have been affected by companies saying, ‘Well we’re not sure what’s going on. It’s not worth it for us to carry your hemp products in our store when we’re selling food mostly. So, unfortunately, we’re going to have to drop your product.'” While the DEA says they aren’t changing their policies regarding enforcement of CBD oil and other such products, their announcement has worked as an idle threat, a warning to sellers in a fragile and new industry. And this isn’t the first time.


The history of the DEA’s regulation of hemp…

There are few things related to hemp more confusing and frustrating than the history of its classification by government agencies. Early colonial governments in North America mandated the growing of hemp and it was a valuable crop to the founding fathers. The 1937 Marijuana Tax Act placed a minimum 1$ tax on all hemp farmers, discouraging the crop, but then during World War II the government began to encourage the hemp industry with the Hemp for Victory Campaign. It was not until the Controlled Substances Act (CSA) of 1970 that hemp (as a form of Cannabis sativa) was formally classified as a schedule I controlled substance.

Throughout the years, imported hemp products have remained legal (despite a few run-ins with the DEA, which were challenged in the courts) through an exemption carried over from the Marijuana Tax Act, which states that hemp stocks, fibers, sterilized seeds, and other products are not subject to regulation. However, because CBD is primarily found in the flowers and leaves of the Cannabis plant, CBD oil did not fit into this exemption.

To make matters more complicated, under the CSA, Cannabis isn’t technically banned, just highly regulated. The DEA is allowed to issue permits for the growth of the plant, but they have denied almost every permit they have received, which might itself be a violation of the law. The Farm Bill of 2014 did nothing to actually change the status of hemp under the CSA. Rather, the section of the bill entitled “Legitimacy of Industrial Hemp Research” circumvented the CSA, stating that despite the law’s restrictions, individual states could allow for pilot or research hemp programs. Many states were quick to start such programs.

Another victory for hemp came with the The Omnibus Appropriations Act of 2016, which stated that no federal funds could be used to stop the transfer across state lines of hemp products made legal under the 2014 Farm Bill. It suddenly seemed as if all hemp products, whether manufactured within the United States or not, would be legal for consumers.

But, in 2015 the Food and Drug Administration began sending out letters to CBD oil manufacturers warning them that they were engaged in ‘illegal commerce’. Then, in late 2016, the DEA stepped in with their most recent ‘code’ classification, making it clear that they considered CBD oil supplements to be illegal. But this move is not going unchallenged.


The 9th Circuit Petition.

On January 13th, 2017, the Hoban Law Group Hoban filed a petition “to challenge what appears to be the DEA’s attempt to control an otherwise lawful substance.” The petition claims that the DEA’s ‘Final Rule’ “exceeds the authority granted it by Congress” and is contrary to the language of the Controlled Substances Act. The petition points out that cannabidiol, or CBD, is not specifically recognized as a controlled substance under the act, unlike the most famous cannabinoid, THC.

The DEA has called their Final Rule a “mere recordkeeping measure,” but this does not ease the fears of those in the industry, who remember the effects of a similar ‘interpretive rule’ back in 2001, which banned hemp seed and oil products that contained even a trace of THC. In that case, Dr. Bronner’s and other industry players sued the DEA and won, arguing that because non-psychoactive hemp products are not regulated by the DEA to begin with, the naturally occurring and negligible amounts of THC that they contain does not fall under their jurisdiction without a legislative change to the CSA.

It is virtually the same argument being brought by the current case, and hopefully the result will be equally successful.


The Future of Hemp Law…

It’s clear that no matter what happens with this case, the regulations around industrial hemp and CBD oil will not be simple and straightforward any time soon. A whole host of incoming government appointments in the Trump Administration have expressed hostility towards the legal Cannabis industry. Trump’s pick for Health and Human Services secretary, Tom Price, did show some support for a limited measure that protected users of cannabidiol. But, he has been a staunch opponent to medical marijuana, as has Trump’s pick for Attorney General, Jeff Sessions. To what extent this hostility will translate into action against the hemp industry is not clear, but even small alterations to existing law, like the Farm Bill, could significantly impact hemp producers and consumers. Meanwhile, states like Virginia are moving forward to “remove all restrictions, regulations and licensing requirements on the growth of industrial hemp in Virginia.”

It will take an active and vocal hemp industry, and probably direct challenges to these incongruent and harmful rulings and classifications, to keep hemp us moving towards total legalization. We in the industry can do our part by educating and advocating about the importance of the plant and its differences from marijuana. We can also make sure to set our own rigorous standards for our products so that government agencies don’t have excuses to impose new limitations. Indeed, part of what prompted FDA intervention in the CBD industry in 2015 was that they “tested these products, and many were found to not contain the levels of CBD they claimed to contain.” In short, the more tight our ship is as a unified hemp industry, the more power we will have to demand complete legalization of hemp for growth, manufacturing, and distribution.


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