Lawsuit: DEA Marijuana Extract Rule Has ‘Chilled’ Hemp Industry

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Lawsuit: DEA Marijuana Extract Rule Has ‘Chilled’ Hemp Industry

A marijuana extract rule adopted by the Drug Enforcement Administration (DEA) “stands to chill the entire legal hemp industry through confusion, misinterpretation and misapplication of law," the Hemp Industries Association (HIA) proclaimed last week in a brief filed with a federal appeals court in San Francisco.

In the nearly 14,000-word opening brief, HIA and its co-plaintiffs blasted DEA’s final rule establishing a drug code for marijuana extracts. The lawsuit was filed in January by HIA, Centuria Natural Foods Inc. and R.M.H. Holdings Inc.

It is DEA’s position that all individuals seeking to manufacture, distribute, disperse, import, export or research substances subject to a drug code must register with DEA, Denver- and San Francisco-based lawyers with the Hoban Law Group noted in the April 3 brief filed with the U.S. Court of Appeals for the Ninth Circuit.

“Consequently, this misguided action by DEA has instantly and severely ‘chilled’ the global industrial hemp industry," the plaintiffs’ attorneys asserted, “predominantly involving U.S. distribution, import and export of Farm Bill-cultivated and imported hemp-derived products."

In a Federal Register notice establishing the drug code, DEA defined a marijuana extract as “an extract containing one or more cannabinoids that has been derived from any plant of the genus cannabis, other than the separated resin (whether crude or purified) obtained from the plant."

Marijuana extracts, DEA said, would continue to be treated as Schedule 1 substances. Schedule 1 substances are illegal under federal law.  

DEA’s notice prompted criticism that the agency continues to treat all cannabis the same, contrary to Section 7606 of the Agricultural Act of 2014—otherwise known as the Farm Bill.

Unlike industrial hemp, marijuana contains a high amount of tetrahydrocannabinol (THC), the psychoactive ingredient that makes a person stoned or high. Section 7606 authorized the growth, cultivation or marketing of industrial hemp under agricultural pilot programs, provided such growth or cultivation is allowed under the laws of the state in which the activity occurs.

Plaintiffs also referenced appropriations bills passed by Congress, including one currently in effect, which bars federal agencies from using funds to contravene Section 7606.

What’s more, DEA’s marijuana extract rule functions as a scheduling action under the Controlled Substances Act (CSA), and DEA abused its authority because it failed to follow the appropriate procedures in scheduling marijuana extract and cannabinoids, the hemp industry argued.

“DEA, through its final rule and other interpretive and directive actions, continuously fails to distinguish between industrial hemp and hemp-derived materials, versus those known as psychotropic marijuana," plaintiffs’ 59-page brief stated, “despite Congress requiring DEA to make these distinctions pursuant to the CSA and the Farm Bill."

Even if DEA followed the proper scheduling procedures, the brief asserted, the agency could not meet its burden of establishing cannabinoids, such as cannabidiol (CBD), have a high potential for abuse.

CBD is often sold in products labeled as dietary supplements in the United States, and industry representatives said it can be derived from industrial hemp lawfully grown in the United States under the Farm Bill.

Hemp must carry a delta-9 THC concentration of no more than 0.3 percent to meet the definition of industrial hemp under the Farm Bill. By contrast, plaintiffs’ brief noted, marijuana contains between 3 and 20 percent THC in the plant’s flowering portions.