After counseling several clients on the legal use and production of cannabidiol (CBD), it has become apparent that there is still a lot of confusion surrounding the issue. To help dispel some of the misunderstandings, especially in relation to last month’s 9th Circuit Court of Appeals ruling in Hemp Industries Assoc. v. U.S. Drug Enforcement Administration, we have compiled an overview of the case and its implications on local hemp businesses. The case may raise some concerns about the future of federal hemp and CBD legality.
The case brought by the Hemp Industries Association (HIA) asked the court to review a 2016 Final Rule enacted by the Drug Enforcement Administration (DEA) that may be read to classify CBD as an illegal drug under the Controlled Substances Act (CSA) because it is extracted from marijuana flower. The HIA argued: (1) that the DEA overstepped its authority in making this change; and (2) that because CBD can be extracted from hemp flower, and industrial hemp with less than 0.3% THC is lawful, CBD production is protected by the 2014 Farm Bill and beyond the reach of the DEA.
In the opinion, the 9th Circuit judges dismissed the HIA’s claim on a technicality, stating that because the HIA failed to actively participate in the DEA’s rule-making process they lacked standing to bring the current challenge. The court, though, did clarify that the DEA’s “marijuana extract rule” does not apply to hemp or hemp-derived products produced in compliance with the Farm Bill. Therefore, hemp producers may continue to extract and sell CBD where it is permitted under state law.
Ultimately, CBD production and the DEA rule can coexist where hemp is grown and processed pursuant to the Farm Bill. However, outside of this interpretation, no formal legal protections have been afforded to CBD and hemp production. The circuitous path of legal precedent surrounding CBD and hemp products raises concerns as to the questionable legality of hemp and CBD. Producers should be cautious and remain vigilant of new developments in this area of the law.
The most recent effort to ensure the future of CBD extractions in the Hemp Farming Act of 2018. Passage of this law would permanently remove hemp and hemp products from the umbrella of the CSA. However, until that time the future of hemp and CBD production remains uncertain.
If you have any questions regarding hemp extraction or CBD production, or would like to learn more about Hemp Industries Assoc. v. U.S. Drug Enforcement Administration, please do not hesitate to contact our office.