Statement from Hoban Law Group on DEA's Classification of CBD as Schedule V Controlled Substance for Epidiolex
Without any regard for Congress, DEA continues to act with seeming reckless abandon and contrary to the express authorizations provided for in Section 7606 of the Agricultural Act of 2014 (the "Farm Bill") and the Ninth Circuit Court of Appeals' order in HIA v. DEA III (April 2018). Even worse, DEA admitted in that case and its own directive that cannabinoids themselves are not controlled substances, yet now espouse an entirely contradictory position.
To be clear, the 2014 Farm Bill provisions authorize the cultivation of industrial hemp, and corresponding budgetary legislation (spending provisions) protects the transport, processing, sale and use of all parts of that hemp across state lines. To this end, the Ninth Circuit Court of Appeals confirmed that Farm Bill hemp is not to be treated as a controlled substance, as the Farm Bill pre-empts the Controlled Substances Act.
Yet, today, DEA published a final order which would place Epidiolex in Schedule V of the Controlled Substances Act, after FDA's approval of Epidiolex in June 2018. However, in re-scheduling Epidiolex, DEA also makes several overreaching statements beyond simply the scheduling of Epidiolex. For example, DEA asserts that all cannabinoids from cannabis (versus when derived from "marihuana" as defined in the CSA) are controlled substances, seemingly contrary to acts of Congress, judicial decisions and DEA's own statements. Yet again, DEA apparently fails to distinguish such products derived from lawful hemp as being exempted from DEA's authority and the CSA.
While DEA's handling of Epidiolex was expected, the agency's penchant for disregarding the law, court orders and its own admissions and directive regarding the lawfulness of hemp continues unabated.
This action further underscores the importance, perhaps now more than ever before, of Congress working through its dysfunction and enacting the 2018 version of the Farm Bill, despite recent news this week that those efforts may be delayed until after the November mid-term elections. We note, however, that while we expect hemp to be fully protected in the 2018 Farm Bill, it is more so a function of when the 2018 version of the Farm Bill is passed by this dysfunctional Congress.
Given DEA's disregard for legislation, judicial decisions and its own directive regarding hemp, our firm will swiftly evaluate all available options and remedies for judicial action as in prior HIA v. DEA cases as well as any administrative action available in response to this new overly broad DEA action.