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DEA Actions – Further Clarification

Blue Moon Hemp – DEA Ruling – Further Legal Clarification

December 16, 2016

Today, many of you have forwarded us stories that are sweeping our industry regarding the DEA reclassifying CBD as a Schedule I Drug.  To follow is our response to those stories, and the DEA’s actions:

Fundamentally, CBD derived from hemp is not specifically defined under the Federal Controlled Substances Act (the “CSA”) which can be found under 21 U.S.C. 812.  Therefore it is not a Schedule I Substance under the United States Code. (U.S.C.)

When Congress passes a law, it is recorded in a set of books known as The United States Code, or U.S.C.  That is where the CSA can be found.

However, the CFR, or Code of Federal Regulations (CFR) is written by government agencies responsible for the subject matter of the laws.  The regulations found in the CFR do not stand on their own; they must be based on statutes passed by Congress and are only valid if they put into effect an actual statute enacted by Congress.

Today, the DEA amended the CFR to define all extracts from cannabis as a Schedule 1 drug.  However, United States Code (U.S.C.) and CSA remain unchanged.  The DEA has no authority to change the law (U.S.C.) and as such, until Congress amends the definition of marijuana in the U.S.C. (CSA), the DEA has no authority to enforce its “regulations.”  As indicated above, the CFR is simply a book of regulations written by governmental agencies, and do not stand on their own as laws unless based upon actual acts of Congress.  Congress has made no acts with respect to CBD derived from hemp.

When the DEA in 2003 attempted to initiate rules and interpretations concerning cannabinoid constituents of marijuana that were not expressly set forth under the CSA or the DEA’s own regulations, the Ninth Circuit Federal Court of Appeals struck down its efforts, stating that “an agency is not allowed to change a legislative rule retroactively through the process of disingenuous interpretation of the rule to mean something other than its original meaning.

Then, in another case in 2004, the court stated “In keeping with the definitions of drugs controlled under Schedule I of the CSA, the DEA Final Rules can regulate foodstuffs containing natural THC if it is contained within marijuana, and can regulate synthetic THC of any kind.  But they 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 DEA has no authority to regulate drugs that are not scheduled, and it has not followed procedures required to schedule a substance.”

 

In other words:

  1. The CSA, as found in the United States Code, remains unchanged.  CBD derived from hemp is not a Schedule I substance as found in the CSA. This is the law.
  2. The DEA has no authority to change Congress’ interpretations or make laws, and Congress has not scheduled CBD derived from hemp as a Schedule 1 drug.  The regulations found in the CFR are not enforceable unless based upon actual statutes found in the U.S.C.
  3. The DEA has not properly followed procedures required to schedule CBD derived from hemp as a Schedule 1 drug, and therefore it has no authority to regulate drugs that are not scheduled.
  4. Until Congress amends the United States Code to reschedule CBD from hemp as a Schedule 1 drug, the DEA’s power to enforce its “Final Rules” is limited and even if it does somehow enforce the “rule”, the DEA may (and will) be challenged in court.

The two primary factors to keep your eyes on as our industry moves forward, in my opinion, are (i) the continuing approval of (R) Dana Rohrabacher’s Spending Bill provisions limiting federal funds for enforcement efforts in legal cannabis states; and (ii) if Congress is somehow convinced to change the CSA by the DEA’s coding reclassification of 12/14.  This is doubtful at best.

Christopher D. Cowart

President / CEO

Blue Moon Hemp, Inc.

chris@bluemoonhemp.com

954-802-8826

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