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Monday, October 2, 2017

DEA Clarifies Marijuana Extract Rule and CBD Legality

As many of you are aware, on December 14, 2016 the DEA implemented a rule regarding CBD and marijuana extract called the “Final Rule establishing a new Controlled Substance Code Number (drug code) for marijuana extract” (the Rule). Among other things, the Rule claimed that cannabidiol (CBD) and other cannabinoids were part of the newly established drug code and, consequently, were Schedule 1 substances under the Controlled Substances Act (CSA). Schedule 1 is the most restrictive class of drugs and is reserved for drugs that have “no currently accepted medical treatment use” and a “high potential for abuse.” I wrote about the wrongheadedness of the Rule here and focused my attention on the fact that the DEA purported to make illegal something (ie, CBD) that was never illegal in the first place. CBD has never been listed as a controlled substance on the CSA. Importantly, CBD can be sourced from legal plants. I argued that the DEA had overstepped its authority. For this very reason, the DEA is currently a defendant in a lawsuit filed in the 9th Circuit. We expect that suit to go well.
Today, the DEA backed off of its position somewhat. Importantly, it acknowledged that CBD is legal if it comes from a part of the cannabis plant that is itself legal, such as the mature stalk of the cannabis plant, which is excluded from the CSA’s definition of marijuana. In other words, the DEA finally admitted that CBD is not illegal in and of itself; rather, it is legal (or not) based on its source. I’ve been preaching this for a long time, but I have to admit that it’s strange to be validated in the form of an an official DEA clarification!
Here’s what the DEA said: “The new drug code (7350) established in [the Rule] does not include materials or products that are excluded from the definition of marijuana set forth in the Controlled Substances Act (CSA). The new drug code includes only those extracts that fall within the CSA definition of marijuana. If a product consisted solely of parts of the cannabis plant excluded from the CSA definition of marijuana, such product would not be included in the new drug code (7350) or in the drug code for marijuana (7360).
This is important. It is the first time that the Federal government has explicitly stated that cannabinoids (aside from THC which is separately scheduled) are not in and of themselves illegal substances. Most importantly, the DEA tacitly acknowledged that CBD sourced from industrial hemp cultivated lawfully pursuant to a State’s industrial hemp laws enacted under the 2014 US Farm Bill is legal. This is because “industrial hemp” is itself specifically excluded from the CSA’s definition of marijuana in Section 7606 of the Farm Bill. Since industrial hemp is excluded from the definition of the CSA, and a “product consist[ing] solely of parts of the cannabis plant excluded from the CSA definition of marijuana” is not included in the new drug code, then such product (in our case, CBD) is also excluded from the definition of marijuana under the CSA and is thus legal, at least at the Federal level. (Whether or not CBD can be made illegal at the individual state level is another question altogether which I’ll address in an upcoming post.)
None of this is new. But it is good to get some clarification from the DEA.
Rod Kight is a lawyer based in Asheville, NC. He is licensed in North Carolina and Oregon and represents legal cannabis businesses. You can contact him by clicking here.
Posted 3-14-2017.
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