Hemp Industry Sues DEA Over Marijuana Extract Rule

Bob Hoban, a Denver-based attorney whose law firm filed the petition with the U.S. Court of Appeals for the Ninth Circuit, said DEA’s rule exceeded its authority and could threaten scores of businesses.

Josh Long, Associate editorial director, Natural Products Insider

January 17, 2017

2 Min Read
Hemp Industry Sues DEA Over Marijuana Extract Rule

The Hemp Industries Association (HIA) on Friday filed a petition for review with a federal appeals court, seeking to overturn a ruling adopted by the Drug Enforcement Administration (DEA). Two other plaintiffs, Centuria Natural Foods Inc. and RMH Holdings LLC, joined in the petition.

DEA’s final rule, establishing a new drug code for marijuana extracts, has raised concerns for a nascent industry that markets hemp oil, or CBD, as a natural product or dietary supplement.

Bob Hoban, a Denver-based attorney whose law firm filed the petition with the U.S. Court of Appeals for the Ninth Circuit, said DEA’s rule exceeded its authority.

“This final rule serves to threaten hundreds, of not thousands, of growing businesses, with massive economic and industry expansion opportunities, all of which conduct lawful business compliant with existing policy as it is understood and in reliance upon the federal government," Hoban declared in a statement.

In December, DEA announced a final rule to create a new Administration Controlled Substances Code Number for marijuana extract—clarifying in response to a comment submitted to the agency that CBD or cannabidiol would fall within the new drug code. Marijuana extracts would continue to be treated as Schedule 1 controlled substances, DEA asserted.

Plaintiffs argued DEA neglected to follow procedures or make findings required by the law to add new substances to the schedules of the Controlled Substances Act (CSA).

"Additionally, the final rule creates this new drug code, indicative of being a controlled substance, for substances which are in fact not controlled pursuant to the CSA," the petition declared. "Specifically, the final rule dictates that the mere presence of 'cannabinoids,' which are not controlled substances, is the determinative factor of whether a compound is a 'marihuana extract.'"

What's more, HIA’s petition argued, DEA's rule “overbroadly defines ‘marihuana extract,’" without recognizing that the Agricultural Act of 2014—or Farm Bill—exempted certain portions and varieties of the plant Cannabis sativa L. from the CSA and/or from being treated as controlled substances entirely. The rule also may violate other federal laws as well, including the Data Quality Act, Regulatory Flexibility Act and Congressional Review Act, according to the Jan. 13 petition.

Neither the DEA nor the U.S. Department of Justice immediately responded to requests for comment. However, in a recent phone interview with INSIDER, a DEA spokeswoman, Barbara Carreno, laid out the agency's position on CBD.

“CBD has always been Schedule 1 because—and I want to make this real clear because people aren’t getting this—Congress wrote the Controlled Substances Act back in the ‘70s," she said. “When they wrote the Controlled Substances Act, they put marijuana—and anything derived from the marijuana plant—in Schedule 1. DEA never put marijuana in Schedule 1. The law came to us that way from Congress."

About the Author(s)

Josh Long

Associate editorial director, Natural Products Insider, Informa Markets Health and Nutrition

Josh Long directs the online news, feature and op-ed coverage at Natural Products Insider, which targets the health and wellness industry. He has been reporting on developments in the dietary supplement industry for over a decade, with a focus on regulatory issues, including at the Food and Drug Administration.

He has moderated and/or presented at industry trade shows, including SupplySide East, SupplySide West, Natural Products Expo West, NBJ Summit and the annual Dietary Supplement Regulatory Summit.

Connect with Josh on LinkedIn and ping him with story ideas at [email protected]

Education and previous experience

Josh majored in journalism and graduated from Arizona State University the same year "Jake the Snake" Plummer led the Sun Devils to the Rose Bowl against the Ohio State Buckeyes. He also holds a J.D. from the University of Wyoming College of Law, was admitted in 2008 to practice law in the state of Colorado and spent a year clerking for a state district court judge.

Over more than a quarter century, he’s written on various topics for newspapers and business-to-business publications – from the Yavapai in Arizona and a controversial plan for a nuclear-waste incinerator in Idaho to nuanced issues, including FDA enforcement of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

Since the late 1990s, his articles have been published in a variety of media, including but not limited to, the Cape Cod Times (in Massachusetts), Sedona Red Rock News (in Arizona), Denver Post (in Colorado), Casper Star-Tribune (in Wyoming), now-defunct Jackson Hole Guide (in Wyoming), Colorado Lawyer (published by the Colorado Bar Association) and Nutrition Business Journal.

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