cbdFriends:

This week, the DEA issued a new rule concerning “marihuana extract” (see attached).

This has raised deep concerns in the hemp industry, particularly concerning the potential impact on CBD. Several news stories have alleged that this rule poses an existential threat to the industry: this widely circulated piece from International Business Times states that DEA “set new cannabis extract laws” and that “CBD and all other extracts derived from the cannabis plant (psychoactive or not) will come under Schedule 1 drugs…and cannot cross state lines.”

This interpretation is manifestly inaccurate.

No doubt, this very confusing new rule raises some serious issues and potentially signals an even more aggressive anti-CBD approach by DEA. The various associations in the industry are carefully studying this rule, and I will share with you their thoughts as soon as I receive them.

But to allay the growing fears that many of you have expressed to me over the past 48 hours – as well as to prevent the gossip and clickbait articles from chilling critical work in the hemp industry — let me share a few initial thoughts:

• Top aides to some of hemp’s most powerful congressional champions have been consulting with DEA, and their preliminary read is that the rule is ministerial in nature: DEA tells them that by introducing a new code into the registry, DEA can better track what’s being done and help the U.S. comply with UN-tracking standards.

• OK, as an attorney who’s fought the DEA in federal court, I know better than take everything the agency says at face value. But whatever the agency’s intent, this is clear:

• DEA cannot make or change the law. That is Congress’ function.

• Federal law – via the 2014 Farm Bill and 2016 Omnibus Law – emphatically mandates that industrial hemp grown as part of state-sanctioned pilot programs is exempted from the Controlled Substances Act, and that federal agencies (such as the DEA) are prohibited from interfering with pilot programs and/or the interstate sale or transport of hemp products that are produced in pilot programs.

• For decades, federal law (as confirmed by the 9th Circuit Court of Appeals) has permitted the import and U.S. sale of foreign-grown hemp products.

Ultimately, this again counsels the industry to secure passage of the Industrial Hemp Farming Act in the next Congress, a step which would make all of this discussion moot.

I will continue to update you the more we learn details. But in the meantime, if you have any questions or thoughts, please don’t hesitate to contact me.

Best,

Jonathan

Jonathan S. Miller
Attorney at Law | Frost Brown Todd LLC

Lexington Financial Center, 250 W. Main Street, Suite 2800 | Lexington, KY 40507-1749
859.244.3218 Direct | 859.231.0000 Main | 859.231.0011 Fax
jmiller@fbtlaw.com | www.frostbrowntodd.com