A notice published last month in the Federal Register by the U.S. Drug Enforcement Administration (DEA) has produced mixed reactions in the burgeoning CBD (cannabidiol) industry and may ultimately result in a court fight over the legality of a substance that federal law enforcement considers a marijuana extract.
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 would fall within the new drug code. Marijuana extracts, DEA asserted in the notice, would continue to be treated as Schedule 1 controlled substances. DEA explained the new drug code would enable the agency to separately track quantities of marijuana extract, assisting in compliance with relevant treaty provisions.
“The creation of a new drug code in the DEA regulations for ‘marihuana’ extracts will allow for more appropriate accounting of such materials consistent with treaty provisions," DEA stated in the notice.
Hemp lawyers have argued DEA’s rule is contrary to the 2014 Farm Bill signed by President Barack Obama. Section 7606 of the 2014 Farm Bill authorized the growth and cultivation of industrial hemp, from which CBD ostensibly derives.
But the notice raised fears that DEA would move to crack down on marketers and producers of CBD, which has been widely marketed in dietary supplements and studied as a drug to treat epilepsy.
Citing fears that CBD would be treated as a Schedule 1 narcotic, Jonathan Miller, a lawyer in Lexington, Kentucky, with the firm Frost Brown Todd LLC, described as “apocalyptic" some initial reactions in the industry to DEA’s notice.
Miller said he had a different reaction to the DEA notice.
“DEA cannot rewrite federal law—and federal law is very clear, particularly … hemp that is grown pursuant to a pilot program, that the Controlled Substances Act [CSA] … is exempted," he said in a phone interview.
“We do not feel the DEA rule changes anything," especially for individuals who are part of hemp pilot programs, added Miller, who serves as general counsel to the Kentucky Hemp Industry Council.
Still, some hemp leaders are gearing up for a possible legal fight with DEA in response to its notice; the new drug code is expected to take effect Jan. 13.
“The DEA final rule is concerning to the industry, as it creates confusion in the marketplace among consumers and legitimate businesses alike, and may potentially result in federal agencies improperly treating legal products such as CBD oils, body balms and supplements as controlled substances," the Hemp Industries Association (HIA) said last month in a press release. The trade group added it was “strongly considering legal action" to protect the hemp industry and its members’ interests.
The Hoban Law Group, a Colorado-based law firm specializing in cannabis law, said potential options included the filing of a lawsuit seeking declaratory and injunctive relief. The 2014 “Farm Bill specifies that the entire ‘industrial hemp’ plant is made lawful, in spite of, or notwithstanding, the CSA," the law firm pointed out in a legal memorandum, commenting on DEA’s new rule.
DEA, however, has maintained the hemp industry’s reliance on the 2014 law is misplaced. While the Farm Bill, or Agricultural Act of 2014, authorized the growth and cultivation of industrial hemp, the legislation did not permit the production of “non-FDA-approved drug products made from cannabis," DEA said in a statement.
CBD has been frequently touted in the press as a potential treatment for seizures and other medical conditions, though the substance has never been approved in the United States by FDA as a medicine.
CBD oil, the DEA statement asserted, is a Schedule 1 controlled substance. Schedule 1 substances are “defined as drugs with no currently accepted medical use and a high potential for abuse" and include marijuana, heroin, LSD, ecstasy and peyote, among others, according to DEA’s website.
Barbara Carreno, a DEA spokeswoman, said DEA could only move CBD to a different schedule if it was approved as a drug by FDA.
“Once … it’s approved as a medicine, then we have to reschedule it into one of the other schedules because the Controlled Substances Act says Schedule 1 is for those things with no approved medical use," she explained in a phone interview. “And until something is proved to have a medical use, as long as it has not been approved by the FDA as a medicine, we can’t move it out of Schedule 1 because the law says 2 through 5 are for medicines. So our … hands are tied. People have the idea that it’s up to us and it’s not."
Carreno also said hemp is not synonymous with CBD. “There’s been a lot of confusion about, ‘Well, CBD is hemp," she said. “No, hemp is the stalks … Hemp is the fibers and the stalks. CBD is an extract that comes from the flowers and the leaves."
“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 added. “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."
Commenting on marijuana’s classification, she indicated DEA doesn’t have discretion to change it.
“Congress handed the DEA a law and said, ‘Enforce this,’ and it had marijuana and anything from the plant as Schedule 1 when they handed it to us," Carreno said. “We never had to schedule marijuana. Most of the petitions we get are, ‘Would you please reschedule it?’ And our response is, ‘Until the FDA approves it, we can’t.’"
However, Congress excluded from the term “marihuana" some parts of the plant, including its mature stalks. Stuart Titus, Ph.D., president and CEO of Medical Marijuana Inc., a public company whose division HempMeds sells CBD, referenced research to refute DEA’s position that CBD does not derive from the stalk.
“You can find cannabinoids throughout the plant, not only in the flowering tops but also in the leaves, in the stems, the stalks, the roots," Titus said in a phone interview. “So the cannabinoids are widely expressed throughout the entire plant. Of course, for many it’s much easier to extract from the flowery tops, but that doesn’t mean you can’t find and extract cannabinoids from other parts of the plant as well."
Medical Marijuana asserted the DEA’s new drug code does not affect its CBD hemp oil or operations. In a written statement issued following DEA’s notice, the company referenced a 2004 federal appeals court decision. In Hemp Industries Association USA LLC v. Drug Enforcement Administration, the Ninth Circuit concluded DEA “cannot regulate naturally-occurring THC not contained within or derived from marijuana-i.e., non-psychoactive hemp products—because non-psychoactive hemp is not included in Schedule I."
The hemp industry successfully challenged DEA regulations that collectively would have prohibited the sale of items containing oil or sterilized seeds from hemp. The decision marked a major victory for hemp foods and cosmetics.
“There has been no superseding ruling since the Ninth Circuit's decision," Medical Marijuana continued in its statement. “Therefore, the company's products continue to be legal and are not controlled substances."
Stuart Tomc, vice president of human nutrition for CV Sciences Inc., a wholesale supplier of CBD whose Plus CBD Oil is sold as a dietary supplement in more than 700 retail stores, said DEA’s notice has not dampened demand for his employer’s products.
“What I’ve seen since then is that the demand for our products is simply unprecedented," he said in a phone interview. “December was our very best month on record, and customers are calling and they are frustrated that they cannot get the product fast enough. We’re interested in finding out how will that unbridled public demand … change the calculus of what DEA and the regulators have in mind."
Tomc said CV Sciences’ retail partners aren’t withdrawing CBD products from the store shelves. To the contrary, “99.9 percent of our customers are doubling down and doubling their orders," he declared.
Why? “Because this stuff works," he responded. “And you … don’t take this heat, and you don’t take this risk, unless the product works. The single biggest complaint about herbal extracts and herbal medicine, and dietary supplements in general, is they don’t work … Hemp-derived CBD is so effective that it’s gone viral irrespective of what regulators are saying, and that will factor into the equation."
But DEA is not the only regulatory impediment facing the CBD industry. FDA has asserted CBD cannot be sold in a dietary supplement.
In several letters, FDA stated its conclusion that CBD products are excluded from the definition of a dietary supplement because CBD is the subject of substantial clinical investigations that have been made public. The agency referenced GW Pharmaceuticals’ investigations concerning two medicines, Sativex and Epidiolex. Although FDA acknowledged an exception if CBD was marketed as a dietary supplement or conventional food before the drug investigations were authorized, the agency concluded CBD doesn’t meet the exception.
However, FDA’s most recent warning letters were issued in February 2016, and the agency has not moved in court to shut down any CBD companies or seize products. Likewise, DEA is not focusing its enforcement efforts on CBD.
Carreno, the DEA spokeswoman, referenced marijuana guidelines that the U.S. Department of Justice has circulated to DEA and the U.S. attorney’s offices. Generally, federal law enforcement is not focused on marijuana businesses and entities that are operating lawfully pursuant to state law. Instead, DEA has invested its resources in such problems as opioid prescription drugs and heroin, she explained.
But the new Republican administration raises questions about the future of the CBD industry, and marijuana more broadly. President-elect Donald J. Trump has nominated Sen. Jeff Sessions of Alabama as the new attorney general. As Politico Magazine reported last month, Sessions—a former U.S. attorney—is vigorously opposed to marijuana. He is scheduled to be questioned Tuesday by the Senate during a confirmation hearing.
“With little more than the stroke of his own pen," the publication wrote, “the new attorney general will be able to arrest growers, retailers and users, defying the will of more than half the nation’s voters, including those in his own state where legislators approved the use of CBD."
Miller, the Kentucky attorney, expressed hope that officials in the Trump administration will be supportive of industrial hemp. He noted Sen. Mitch McConnell (R-Kentucky) is opposed to marijuana, yet he remains one of industrial hemp’s strongest champions on Capitol Hill.
“I think now most people of influence in Washington understand the difference," the lawyer said.