CBD hemp extract
The law on CBD is still a maze.

If you were hoping for some clarity as to the legality of industrial hemp and cannabidiol (CBD) derived from industrial hemp, I have some (mostly) bad news.

On Monday, the US Court of Appeals for the Ninth Circuit denied a lawsuit challenging the Drug Enforcement Administration’s (DEA) controversial Marihuana Extracts Rule. In Hemp Industries Assoc. v. DEA, the petitioners and other industry groups challenged the DEA’s rule creating a new drug code number for “”Marihuana Extracts” which is defined to include any extract “containing one or more cannabinoids that has been derived from any plant of the genus Cannabis.” This rule is so broadly drafted that it seems to prohibit extracts from parts of the cannabis plant that are legal or at least unregulated under federal law. Petitioners requested the Court clarify or strike down the DEA’s land-grab rule.

The Court denied both requests. Rather than diving into the substance of the petitioners’ complaint, the Court dismissed the action on largely procedural grounds, as we recently predicted it would. First, the court pointed to the fact that the petitioners failed to make an argument to the DEA while it was accepting comments on the Marihuana Extract Rule and are therefore barred from raising those issues before the Court. The petitioners claimed that another commenter raised their concerns by submitting a question as to whether the rule would cover “100% pure Cannabidiol by itself with nothing else?” But the Court determined the DEA considered this comment and altered the rule to clarify that it covered all cannabinoids. The Court also determined that several of the petitioners’ other arguments were waived for failure to raise the issue during the DEA’s notice and comment period.

The Court did determine that the petitioners’ argument that the Marihuana Extract Rule conflicted with 7606 of the 2014 US Farm Bill (the “Farm Bill”) was not waived, because Congress passed that law after the notice and comment period ended. The Farm Bill allows states to grow “Industrial Hemp” defined as having less than 0.3% THC on a dry weight basis in states that have implement agricultural pilot hemp programs. However, the Court determined that the argument failed on the merits. The Court found that the Farm Bill “contemplates potential conflict between the Controlled Substances Act [CSA] and preempts it. The Final Rule therefore, does not violate the [Farm Bill].” To the positive, the Court is stating that when the Industrial Hemp portions of the Farm Bill conflict with the CSA, the Farm Bill prevails.

This decision makes it clear that the Marihuana Extract Rule is unfortunately still valid, meaning that any products extracted from marijuana is still illegal under federal law, which has long been the case according to the DEA. The great unknown is how this ruling will be interpreted. It’s possible that the ruling could have a chilling effect on the growing CBD industry, by emboldening the DEA to actively pursue products that contain CBD. On this point, it’s important to note that Congress has limited the DEA’s ability to use federal funds “to prohibit the transportation, processing, sale, or use of industrial hemp” grown in accordance with the 2014 Farm Bill. However, it can be difficult to prove where a product containing CBD was derived and the DEA may try to push its boundaries in light of the decision. Therefore, it’s important that companies who are distributing CBD verify that it was derived from a legal source and are prepared to prove it.

State law enforcement agencies could also interpret this decision to crack down on CBD, especially in states that have not implemented Farm Bill hemp programs. These agencies are not limited by the budget provision that restricts the DEA enforcement activities. Although we have not heard any instances of state law enforcement cracking down on these sales, it is certainly possible that some will do so.

The Ninth Circuit could have used this as an opportunity to state explicitly that CBD derived from a legal source is also legal. Unfortunately, it did not. Because the Court did explicitly state that the Farm Bill preempts the CSA, though, the silver lining here is that Industrial Hemp, grown pursuant to the Farm Bill, is not illegal under the CSA according to the Ninth Circuit. In addition, shortly after the HIA filed its petition, the DEA made the following helpful clarifications: 

  • The “marihuana extract” definition does not include materials or products excluded from the definition of marijuana set forth in the CSA.
  • The rule includes only those extracts that fall within the CSA definition of marijuana.
  • If a product consists solely of parts of the cannabis plant excluded from the CSA definition of marijuana, such product is not considered “marihuana” or a “marihuana extract.”

Consistent with the Court’s ruling, this appears to exempt extracts that are derived from lawfully grown Industrial Hemp. It also exempts extracts derived from portions of the cannabis plant that are not included in the CSA’s definition of “marihuana”, which include the mature stalks and seeds incapable of germination.

All in all, this convoluted mess of marijuana, hemp, and CBD law could soon become much clearer if Mitch McConnell’s Hemp Farming Act of 2018 is passed. Stay tuned for more information on the ongoing saga of legal hemp and its derivatives.

  • Fr33.M

    Marijuana has been outlawed in the United States since the early-mid 1900’s. Currently cannabis is classified as a Schedule I drug under the Controlled Substance Act of, which is in the same drug classification as crack cocaine. As the American culture shifts, better technology becomes readily available, and the need for economic growth, our laws should also be reevaluated to accommodate such change.

    The 9th district court is the court that covers all of the west coast, Nevada, Arizona, Alaska, Hawaii, and Idaho. For a federal judge to essentially rule against a big step(s) towards legalization makes a statement that the DEA can still go after private citizens and companies that have anything to do with the extracts of the cannabis plant. Legalizing cannabis could generate billions in the short and long terms. In 2015, Washington pulled in $257M, California sold $2.7B worth, and in Oregon 40% of the marijuana revenue goes toward education and 20% to mental health and drug services (Koslow, 2016).

    This article just shows that the federal law still reigns and is the supreme law of the land. This is unexpected considering the district that this decision was made from and the possible economic implications it could cause in the future. This comes in lieu of the majority of current popular opinion that marijuana should be made legal.

    Koslow, T. (2016, May 17). Cannabis By The Numbers.
    Retrieved from Merry Jane:
    https://merryjane.com/news/cannabis-by-the-numbers-how-much-money-will-states-bring-in-from-marijuana-in-2016

  • Jason VonIrsik

    Ok everyone. Lets stop with the regurgitated information on how well Cannabis works with the human body. Lets stop acting like new information is coming out daily. The studies have all been peer reviewed and the fact that Cannabis has been around longer than any human on the earth I am going to say that what is needed is for all ProCannabis Advocates, Organizations, Social Media Groups, Closet Consumers, Medical Drs., State and National Representatives, to create a rally so big that it forces the Federal Government to withdrawal Cannabis from the list of Drugs and it goes the way that Alcohol has gone. It is true Cannabis has healing properties, but it has such a variety, and when I say variety I mean it can rival petroleum products. But the facts are this, Medical Marijuana was a loophole to get it on some ballots. Thanks to the constitution we have the right to be healed and we have the right to heal ourselves in the most beneficial manor. The humans Endocannabinoid system that is in every human being from birth is a perfect match to the properties found in cannabis. Are the DEA going to make humans register as schedule one drugs. The Citizens who are anti cannabis are not at fault, because these ignorant agencies who thanks to technology and the age of information we are finding out that they have been corrupted and only answer to lobbyist. Its funny how Big Pharma began its inception around the time that Cannabis was being blasted as a murderous, brain killing, jazz influencing drug that all the kids were taking and thus was the reason why the 60’s were born. They targeted the minorities and continue to do, we have Attorney Generals who own stock in private prison’s, and Law enforcement agencies worried about how they are going to make up the funds that they receive from all the criminal activity that plagues our country. Its all just job security. We must put an end to this Madness immediately. Cancer patients have a beneficial resource dangling at their fingertips. People in Arkansas are dying while reading news about people in Colorado being healed over a short few months of this alternative treatment to CHEMO. Don’t you think with Fukashima and the pacific ocean (Dip your tumor in that body of water and see if it shrinks), the Elephants foot, and god knows whatever else they generate radiation for, not to mention the sun is having its way with us too. UVC is now an issue. Since when was UVC able to reach the ground. LIsten its time to have a grown up talk and I think that we can end this across the entire united states with one stroke of a pen. The cops they will be paid well for their cooperation, the medical industry will always have a job, people get hurt, but they will be trusted because now they will be handing out cures not side effects. The money the states generate from hemp alone will start to rebuild crumbling infrastructures, our oxygen supply with start to ballanve out and life will simply get better for all, even those who choose not to use the products. But they could build their next house with it and if a fire breaks out they wont lose the entire structure, or if it floods, no mold or mildew. I think that the stall of full blown legal cannabis is being stonewalled so they can figure out how to make all the money channel into the hands of the already rich, that’s why they would never allow for personal growing. Well I tell you, if people grew, they would be able to sell it to buyers and it becomes a win/win. So Stop regurgitating how awesome Cannabis is and start making a full proof plan to #ENDTHEMADNESS Also lets all make a conscience effort to use the word Cannabis and weed out the terms drug, marijuana, weed, grass, and so on. Its not some novelty item hidden in your bible on the bookshelf. Its the worlds gift to humans, even matching humans “Endocannabinoid” system that is what? Who can answer what that system does for the human body. I will leave you with that pondering thought, Its time. No more tolerating ignorance, no more, its a drug, its bad for ya, its what makes kids do other drugs. Negative captain Sessions, I started smoking and drinking first. Because they were legal and I had access to them through add campaigns in playboy and other media outlets.