The Hemp Industries Association (HIA), the leading non-profit trade association consisting of hundreds of hemp businesses, filed a Petition for Review on January 13, 2017, in the Ninth Circuit Court of Appeals in San Francisco, seeking to block the implementation of the Drug Enforcement Administration’s (DEA) recently announced Final Rule regarding “Marihuana Extract.” The proposed DEA Final Rule attempts to unlawfully designate hemp-derived non-psychoactive cannabinoids, including cannabidiol, as “marihuana extract,” and append the Controlled Substances Act to add all cannabinoids to its Schedule I. Furthermore, this action by the DEA contravenes clear Congressional intent and legal parameters for the production and consumption of hemp-derived products containing cannabinoids, enacted by Sec. 7606 of the Agricultural Act of 2014 (Farm Bill).
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The DEA does not have the authority to augment the Controlled Substances Act; that power resides with Congress. Congress has clearly mandated, through the 2014 Farm Bill and the 2016 Omnibus Spending Law that the Controlled Substances Act does not apply to hemp grown in state pilot programs, and that it is a violation of federal law for agencies such as DEA to interfere with these programs. The DEA’s proposed rule regarding cannabinoids thumbs its nose at Congress and threatens to undermine the market for legal hemp products containing cannabinoids, including those produced in the U.S. under state laws that regulate hemp cultivation and processing pursuant to, and in accordance with the federal Farm Bill. These products, such as hemp foods and supplements, fall outside the Controlled Substances Act (CSA) and are not subject to regulatory control by the DEA.
“Hemp-derived products containing cannabinoids are an increasingly in-demand category within the hemp market—and U.S. consumers constitute the largest market for hemp products worldwide,” said Colleen Keahey, Executive Director of the Hemp Industries Association. “We are committed to defending the rights of our members, of entrepreneurial hemp farmers, businesses and consumers, who all are acting entirely within the legal framework of the CSA and Farm Bill, including those adversely affected by trying to source American-grown hemp and hemp derivatives to supply this demand. The DEA’s attempt to regulate hemp derived products containing cannabinoids lawfully sourced under the CSA, and farmed and produced under the Farm Bill in states like Kentucky and Colorado, is not only outside the scope of their power, it’s an attempt to rob us of hemp’s economic opportunity.”
The DEA has made previous attempts to interfere with legal hemp products, notably from 2001-2003 when the agency contended that hemp food products such as cereals, hemp seed and hemp oil, are a Schedule I substance due to trace insignificant residues of tetrahydrocannabinol, or THC. On February 6, 2004, the Ninth Circuit Court of Appeals ruled in response that hemp is not included in Schedule I; that the trace THC in such products is similar to trace opiates in poppy seed bagels, and does not render them controlled substances. The HIA believes this 2004 ruling sets strong legal precedent for the current petition, which asserts that cannabinoids derived from lawful portions and varieties of the Cannabis plant exempted from control under the CSA and through the Farm Bill, may not be regulated as “marihuana” or “marihuana extract” by the DEA.
More recently, in 2014, the DEA interfered with the implementation of state pilot programs for hemp farming, when the agency unlawfully seized 250 lbs. of certified industrial hemp seed imported from Italy. The viable hemp seed had been legally sourced to supply six hemp research projects licensed by the Kentucky Department of Agriculture and coordinated in conjunction with Kentucky State academic institutions. The seed was quickly released, following the filing of a lawsuit against the DEA on May 14, 2014 by then Kentucky Agriculture Commissioner, now U.S. Congressional Representative James Comer.
“Over a decade ago, the Ninth Circuit held that non-psychoactive hemp is not controlled by the CSA,” said Patrick Goggin, co-counsel for the HIA. “The DEA is again attempting to schedule under the CSA cannabinoids and non-psychoactive hemp beyond its authority. We believe the Ninth Circuit will invalidate this rule just like it did in 2004.”
To date, 31 states have passed hemp legislation that allows their farmers to cultivate hemp according to guidelines set forth in the Farm Bill. Per these guidelines, U.S. farmers planted nearly 10,000 acres of hemp in 2016. Farmers and agri-business across the country have invested many millions of dollars in infrastructure to comply with federal law; this retroactive misreading of statute puts the livelihood of these law-abiding companies and individuals at risk.
Recent DEA pronouncements indicate that DEA is threatening to flout prior court rulings, and assert regulatory authority over hemp seed, oil, and products made from hemp seed and oil, which have always been exempt from the Controlled Substances Act. HIA continues to monitor these developments, and will consider further actions to resist DEA’s unlawful attempts to regulate legal hemp products.
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