DEA Directs Agencies on the Legality of Hemp-Derived Cannabinoids

DEA Directs Agencies on the Legality of Hemp-Derived Cannabinoids

By Garrett Graff and Patrick Goggin of Hoban Law Group

In 2004, the Ninth Circuit Court of Appeals, in its seminal HIA v. DEA II opinion, struck down a DEA rule that would have banned the human consumption of lawful non-psychoactive hemp (i.e. stalks and sterilized seed) because of the presence of naturally occurring THC, the primary psychoactive compound associated with marijuana. Despite the presence of naturally occurring THC, the Court found that "Congress knew what it was doing, and its intent to exclude non-psychoactive hemp from regulation is entirely clear."

Ever since, however, DEA increasingly flouted the Court's decision by misguiding federal, state and local sister agencies. DEA's stated positions indicated to these sister agencies that legal hemp seeds and oils could neither be imported/exported, nor transported between states. These positions led to Customs, for example, implementing the policy to seize and destroy any hemp derivatives including hemp seed and oil, by virtue of a "field test" testing positive for the presence of any cannabinoids -- THC, cannabidiol (CBD) or otherwise. As is evident, cannabinoids themselves -- including naturally occurring amounts of THC and other cannabinoids found in hemp seed and oil -- may be sourced from the lawfully exempted portions of “marihuana," as well as numerous non-Cannabis plant sources, human breast milk or cacao, for example. Thus, simply discovering material to contain cannabinoids does not definitively establish whether any particular material is lawful or not. DEA's positions, and the effect had upon sister agencies, caused great concern amongst the petitioners and the hemp industry.

Accordingly, last year, the Hemp Industries Association, one of the original petitioners, filed a motion for contempt against the DEA, in the Ninth Circuit Court of Appeals, for violating the Court's 2004 injunction which barred DEA from enforcing its invalidated rule. The parties concluded mediation on the matter recently, which resulted in a negotiated settlement requiring  DEA to take several actions. Most significantly, on May 22, DEA issued internal and external directives to federal agencies, containing agreed-upon language, which clarified that the mere presence of cannabinoids does not render any material a controlled substance. In fact, this directive acknowledges DEA's recognition -- and advisement to sister agencies to adhere to -- that the threshold issue is whether the source of the material is lawfully derived from a lawful portion of the Cannabis plant.

This directive should provide greatly needed clarity and guidance to federal agencies and minimize interference with the expanding flow of hemp commerce. To the extent there continue to be interferences by other agencies, this guidance, along with other recent guidance from DEA, the Ninth Circuit Court of Appeals, and members of Congress, the hemp industry should be encouraged by the continued incremental progress being achieved across the country in favor of the burgeoning hemp industry.