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Is CBD Federally Legal?

by | Sep 25, 2017 | IP points, Cannabis | 0 comments

Cannabidiol (CBD) is one of the primary cannabinoids naturally occurring in plants with the genus Cannabis sativa L. CBD is non-intoxicating and often used in products to combat pain, inflammation, and anxiety. Sales of products containing cannibidiol (CBD) continue to increase as consumers begin to recognize the health benefits CBD affords. While most cannabis products are sold through highly regulated dispensaries, products containing CBD derived from Cannabis ruderalis or “hemp” (as differentiated from Cannabis sativa or Cannabis indica), are regularly available through retail channels, particularly e-commerce.

Setting aside whether CBD has beneficial properties and should be re-scheduled, de-scheduled, or legalized, we attempt to clarify the current federal landscape for CBD, which is surrounded with controversy and confusion.

Controlled Substances Act (CSA) Definition of “Marijuana”

The CSA defines “marijuana” as including “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” 21 U.S.C. § 802(16). This statutory definition expressly excludes “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.”

Marijuana (unlawful):

  1. Live & dead cannabis plants
  2. Cannabis seeds
  3. Cannabis resin from any part of the plant
  4. Anything derived from cannabis seeds
  5. Anything derived from cannabis resin

“Not” marijuana (lawful):

  1. Mature cannabis stalks
  2. Fiber of mature cannabis stalks
  3. Oil made from cannabis seeds
  4. Cake (flour) made from cannabis seeds
  5. Anything derived from mature cannabis stalks (except resin)
  6. Anything derived from fiber of mature cannabis stalks
  7. Anything derived from the oil from cannabis seeds
  8. Anything derived from cake (flour) from cannabis seeds
  9. Cannabis seeds that are incapable of germination

The rationale for the DEA’s express exemptions was based on (now) outdated scientific literature indicating that only trace amounts of cannabinoids are found in the mature stalks and seeds of the cannabis plant, such that it would not be practical to produce cannabinoid-rich extracts.

DEA’s 2003 Final Rule & Ninth Circuit Ruling in Hemp Industries Association v. DEA (2004)

On March 21, 2003, the DEA issued “Final Rules” listing synthetic and natural THC as a Schedule I controlled substance. The Hemp Industries Association (HIA) challenged the DEA’s rule because it effectively banned all hemp-based food products, including hempseed oil.

The Ninth Circuit stated that the DEA may permissibly ban products that contain any quantity of THC so long as the ban does not improperly expand the CSA’s definition of marijuana. Here, the DEA’s scheduling of THC did not comport with the CSA’s definition of marijuana because it banned products containing naturally occurring THC derived from the statutorily exempted parts of the cannabis plant, i.e., the mature stalks and seeds.

Although the Ninth Circuit decision never specifically mentions CBD, the broader holding that cannabinoids derived from the exempted parts of the hemp plant are not a controlled substance under the CSA, equally applies.

Where did this leave the legality of CBD?—Products containing cannabinoids were understood to be lawful so long as the hemp was (1) imported from international sources, (2) the cannabinoids were naturally-occurring, and (3) were derived from the mature stalks or seeds of the hemp plant.

The Farm Bill of 2014

The Agricultural Act of 2014 (the “Farm Bill”) was signed into law in 2014. Until then, only products made from hemp grown abroad (and made from the mature stalks and seeds) could be lawfully sold in the United States. The Farm Bill introduced a program allowing institutions of higher education or State departments of agriculture to domestically grow or cultivate industrial hemp, “notwithstanding the Controlled Substances Act.”

“Industrial hemp” was defined as the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a THC concentration of less than .3%.

Note: The .3% THC concentration standard stems from a 1976 taxonomic report authored by Canadian plant scientists Ernest Small and Arthur Cronquist, who acknowledge that they “arbitrarily” adopted this concentration level to distinguish between species of Cannabis sativa L. with intoxicating properties and those without. The authors never intended this number to function as a legal distinction between hemp and other cannabis varieties.

Though many understood the Farm Bill to “universally” legalize CBD products containing industrial hemp so long as the plant contained less than .3% THC, this interpretation is incorrect. The authorization to domestically grow industrial hemp only applies to:

(1) institutions of higher education and State departments of agriculture that

(2) grow or cultivate industrial hemp for research conducted under an agricultural pilot program or for other academic research, and

(3) state law must permit this activity.

Unless all those criteria are satisfied, the industrial hemp may not be grown in the United States.

Because the Farm Bill expressly overrides the CSA, products containing domestic industrial hemp that meet all of the qualifications under the Farm Bill are not subject to the CSA’s definition of marijuana. In other words, CBD may be lawfully sourced from all parts of the industrial hemp plant, so long as the hemp is lawfully grown under the Farm Bill.

It is important to understand that the Farm Bill expressly dealt with domestically grown industrial hemp, and had no impact on the legality of imported industrial hemp. The Farm Bill does not and has never exempted internationally sourced CBD derived from non-exempt parts of the plant, regardless of the THC content.

DEA’s “Marijuana Extracts” Code

In December 2016, the DEA published a “Final Rule” establishing a new Controlled Substance Code Number (“drug code”) for marijuana extract, defining such extract as “containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.”

The plain language of the new drug code appeared to ban all cannabis extracts regardless of the source. Then, the DEA issued a clarification that the drug code only includes extracts that fall within the CSA’s definition of “marijuana.” As discussed above, the CSA’s definition of marijuana excludes the mature stalks of the cannabis plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

Thus, CBD derived from the mature stalks or seeds of industrial hemp is not considered a “marijuana extract” under the CSA. Moreover, CBD derived from domestic industrial hemp gown in compliance with the Farm Bill is exempt from the CSA.

However, the DEA clarification takes the position that cannabinoids cannot be found in any appreciable amounts in the seed or stalks, thus any CBD derived from the seeds or stalks is considered contaminated by resin—and resin is not exempt. While this is the DEA’s position, its conclusion is questionable given developments in scientific analysis and extraction techniques.

2017 Hemp Industries Association v. DEA

In response to the DEA’s new marijuana extract code the Hemp Industries Association once again challenged the DEA before the Ninth Circuit regarding the legality of its actions.

Specifically, the HIA argues that the Final Rule fails to recognize that “marijuana” is defined as a controlled substance, not Cannabis, and there are exempted parts of the plant that are excluded from the CSA’s definition of marijuana that are not recognized by the marijuana extracts code. Moreover, the marijuana extracts code further fails to recognize that all parts of the industrial hemp plant are lawful and/or an exception to the CSA, if authorized under federal law, such as the Farm Bill.

Even if the HIA’s case is successful, it would not substantively change the legal status of CBD because it does not seek to (1) change the definition of “marijuana,” or (2) broaden or narrow the current exemption for CBD, as derived from stalks or seeds, to include all parts of the hemp plant regardless of whether sourced domestically or internationally.

Then there’s the FDA… 

The Federal Food, Drug, and Cosmetic Act (FDCA) prohibits selling or otherwise introducing into commerce any food (including any animal food or feed) that includes a substance for which substantial clinical investigations have been instituted and publicly announced. Substantial clinical investigations regarding CBD have been instituted by the FDA and made public, for example, studies of the medication Sativex for treating cancer pain and Epidiolex for treating Dravet Syndrome. Additionally, FDCA’s definition of “food” has been interpreted to also include dietary supplements. Therefore, until otherwise notified, the FDA clearly states that it is considered federally unlawful to provide food and/or dietary supplements containing CBD.

In Summary

Internationally Imported CBD: Must be derived from the mature stalks or seeds of the industrial hemp plant.

Domestically Sourced CBD: May be extracted from all parts of the industrial hemp plant only if the industrial hemp was grown by an institution of higher education or State department of agriculture that grew or cultivated the industrial hemp for research conducted under an agricultural pilot program or for other academic research, the state law permitted this activity, and the plant had less than 0.3% THC on a dry weight basis.

CBD in Food & Supplements: Unlawful under the FDCA regardless of where the CBD is sourced.

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