The Tangled Web of Industrial Hemp and CBD Just Became More Tangled

When President Obama signed the Agricultural Act of 2014, more commonly known as the 2014 U.S. Farm Bill, the growing of industrial hemp in the U.S. was legal for the first time since being 1957. That bill defined industrial hemp as a plant of the genus cannabis containing a delta-9 tetrahydrocannabinol (THC) concentration of no more than three-tenths of one percent.

The Farm Bill permitted the growing of industrial hemp for research and development purposes. It  legalized “agricultural pilot programs” which “study the growth, cultivation, or marketing of industrial hemp.” The Farm Bill’s Section 7606 enabled universities and state departments of agriculture to cultivate industrial hemp for limited purposes. Specifically, it allowed universities and state departments of agriculture to grow or cultivate industrial hemp if:

“(1) the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and

(2) the growing or cultivating of industrial hemp is allowed under the laws of the state in which such institution of higher education or state department of agriculture is located and such research occurs.”

The Farm Bill made the entire industrial hemp plant lawful, including oils or extracts derived from the plant, despite the status of marijuana under the Controlled Substances Act (CSA).

The Farm Bill clearly did not legalize the full-scale commercial sale of industrial hemp or products or extracts derived from industrial hemp, including CBD. However, this has not stopped many states from ignoring the definition of the “pilot program” and this resulted in full-scale commercial sales of products derived from industrial hemp, including CBD.

The status of industrial hemp was further complicated by Congressional spending bills, specifically the Consolidated and Further Continuing Appropriations Act of 2015 and the Consolidated Appropriations Act of 2016. These spending bills blocked federal law enforcement authorities from “interfering with conduct” authorized by the Farm Bill. Specifically, they prohibit the DEA from expending any resources in enforcing laws that conflict with the Farm Bill.

On December 14th, the Drug Enforcement Administration (DEA) published in the Federal Register a new final rule regarding the creation of a new “Administration Controlled Substances Code Number” for “Marihuana Extract” under the Controlled Substances Act. The new rule will become effective on January 13, 2017.

This rule is to control all naturally occurring cannabinoids from the cannabis plant, both what we refer to in the U.S. as marijuana as well as industrial hemp.

It’s important to note that cannabinoids are not defined under the Controlled Substances Act.  But, despite this, the DEA has taken the position that all cannabinoids, including CBD derived from industrial hemp, are illegal under the CSA.

Russ Baer, a DEA spokesman, indicated that the agency’s action was primarily an administrative move and didn’t indicate any change in policy. HIs statement has been viewed with a great deal of skepticism by those in America’s hemp and CBD industries.

While the commercial sale of CBD will clearly become illegal under federal law, even though one could argue that its commercial sale has been illegal under the Farm Bill, this new rule doesn’t change the DEA’s priority regarding its enforcement priorities. The prosecution of extractors or processors of the non-psychoactive CBD derived from industrial hemp is clearly not a priority for the agency, although obviously, that could change.

The DEA indicated that having a new code number for cannabinoid extracts, including CBD, will enable it to better track quantities of extracts, separately from quantities of marijuana. The DEA stated, “This code number will allow DEA and DEA-registered entities to track quantities of the material separately from quantities of marihuana. This, in turn, will aid in complying with relevant treaty provisions.”

America’s expanding  industrial hemp industry is worried and it should be. Although cannabidiol or CBD, a non-psychoactive substance, can be extracted from industrial hemp, it will now be firmly categorized as a Schedule 1 substance under the Controlled Substances Act.

The industry has raised the question of whether the DEA has any  legitimate authority to create a category for extracts under the Controlled Substances Act. At this time the answer is unknown.

Legally, the status of industrial hemp is complicated and will remain so until and unless this DEA action is reversed or overturned in court. This rule could have a potentially disastrous effect on America’s relatively new, but fast-growing industrial hemp and CBD industries.

Author: Jeffrey Friedland (www.jeffreyfriedland.com, jeffrey@jeffreyfriedland.com, Tel. 1-646-450-8909.) His book, “Marijuana: The World’s Most Misunderstood Plant” is available at Amazon in print and Kindle editions.

Mr. Friedland is CEO of INTIVA Inc., director of CannRx, a founder of Israel Plant Sciences, and has other business interests and investments in the cannabis industry in the United States, Canada and Israel.