This article is authored by senior attorney David Bush.

Enactment of the federal hemp production program in December 2018 unleashed a wave of excitement over prospects for the resurgence of a legal hemp industry in America.  But in the two years since those heady days of reform comes the sobering reality that we are not there yet.  The law needs to be fixed.

Hemp and Federal Law Definitions

The challenge facing the industry is evident from an examination of how the law defines “marihuana,” which remains a Schedule I Controlled Substance under the Controlled Substances Act, and “hemp,” which was supposed to have been carved out of it.  The puzzling result is that while a hemp plant might well be recognized as just another agricultural product, the legal status of hemp products remains unsettled.

“Marihuana” (with its archaic spelling) is defined as the Cannabis plant, most parts of the Cannabis plant, and any derivative of the parts of the plant that are themselves considered “marihuana.”  With the statutory amendments in 2018, hemp — now defined as any Cannabis plant or its parts and any derivative of the plant or its parts, with a concentration of delta-9 tetrahydrocannabinol (“THC”) of no greater than 0.3 percent by dry weight — was carved out of the definition of marihuana, thereby removing it from the Controlled Substances Act.  So far, so good.   But the very reform in the law created a new problem.

What Happens When Hemp Is Processed For Its Extracts?

What the framers of federal hemp legal reform neglected was what happens when hemp is processed for its cannabinoid extracts.  The process of extraction invariably concentrates the cannabinoids drawn from the hemp plant.  Just as maple sap is boiled down to make a concentrated product, maple syrup, so are hemp extracts reduced and concentrated.  The extracts, which form the industrial input for the manufacture of all manner of hemp foods and dietary supplements, naturally contain elevated concentrations of delta-9-THC.  Even though hemp extracts typically are rendered further to produce finished consumer products that themselves qualify as “hemp,” the industrial input from which such products are made – the raw hemp extract, with its elevated concentration of delta-9 THC – effectively meets the definition of marihuana.

Therein lies the rub.  Legal, finished hemp products ordinarily cannot be made without first producing raw extract from hemp.  Raw hemp extracts, by a quirk of definition, are marihuana.  In effect, federal law has criminalized the critical intermediate link in the supply chain from the plant to consumer goods.  Hence the creation of the Intermediate Product Problem.