DEA’s Marijuana Extract Rule Does Not Apply to Hemp

Monday, the Ninth Circuit Court of Appeals denied a petition from the Hemp Industries Association (HIA) to review the controversial “marijuana extract rule” issued in 2016 by the Drug Enforcement Administration (DEA). This was a disappointment to some who were hoping that the Ninth Circuit would issue an historic ruling akin to its 2004 order that the DEA could not prohibit the importation of non-psychoactive hemp products into the U.S. However, this very short decision should not be read as a substantive setback for the U.S. hemp industry. Contrary to some early reports,this ruling does NOT classify hemp-derived cannabidiol (CBD) as a controlled substance, nor does it signify that the popular hemp product is federally illegal. Indeed, the ruling has no legal or practical impact on hemp or hemp products. Here’s why:

• The Ninth Circuit declared that decision has no precedential value – meaning it is not binding on other courts or future judicial decisions. The court even stated that the disposition was “not appropriate for publication,” further limiting its value.
• The ruling’s lack of significance is largely due to the fact that it was decided on procedural grounds, not on any matter of substance. The Ninth Circuit ruled that the HIA had failed to meet a widely-accepted principle of administrative law: Before you challenge a federal agency in court, you must first exhaust all of your administrative remedies – and in this case, the HIA had not participated in the DEA’s earlier public notice and comment period.
• There’s even some good news in the order: The Ninth Circuit makes clear that the DEA’s Rule does not apply to hemp or hemp-derived products developed under state pilot programs authorized by the 2014 Farm Bill. The Court concisely states that the Farm Bill “contemplates potential conflict between the Controlled Substances Act [CSA] and preempts it.” Accordingly, other hemp products exempted from the CSA – such as non-psychoactive hemp products that were the subject of the 2004 Ninth Circuit decision – should also be exempted from the DEA Rule.
• Perhaps even more significantly, during the litigation process, the DEA admitted that the marijuana extract rule did not apply to hemp. In a key legal brief, the DEA admitted that the Rule “does not apply to any substance that the CSA did not previously control as ‘marijuana.’ It simply requires that persons handling a subset of the materials defined as ‘marijuana’ write a different identification number on their administrative paperwork.”

In short, the DEA’s “marijuana extract rule” does not apply to hemp or derivative products such as hemp-derived CBD. Period. And the U.S. Hemp Roundtable stands ready to defend that principle if ever the DEA tries to interfere with state pilot programs – or the interstate sale or transport of hemp from those programs – in contravention of clear federal law, as confirmed in the recent Omnibus Spending Law (and discussed in this Congressional amicus brief.) We are aware, however, that this ruling will generate further concern about DEA’s enforcement intentions. That’s why it is so critical that Congress pass the Hemp Farming Act of 2018, which would permanently remove hemp and hemp products from the purview of the Controlled Substances Act. Accordingly, we ask all hemp supporters to contact their Senators and Congressmen, and urge them to co-sponsor S.2667 and HR 5485. We’ve even developed an online portal to make it easy to have your voice heard:

SEND A LETTER TO YOUR MEMBERS OF CONGRESS

Sincerely, Jonathan Miller General Counsel US Hemp Roundtable