Last December, the U.S. Drug Enforcement Administration made some waves when they announced a new code for marihuana extract. Under the new rule, all cannabinoids – natural compounds derived from the cannabis plant – would be considered Schedule I drugs, effectively rendering them illegal in the United States.
The DEA’s move had the country’s industrial hemp industry up in arms. This half-billion dollar industry was fine making products that didn’t include THC, the active psychoactive compound in pot, but they had built quite a business around cannabidiol (CBD), a common non-psychoactive cannabinoid found in products from lip balm to nutritional supplements and oils. Under this DEA rule, hemp companies would be actively flouting federal law by farming industrial hemp – something they’ve been able to do since 2014, when the Farm Bill finally exempted hemp from the controlled substances act.
In response, the non-profit trade group Hemp Industries Association (HIA) and two other companies filed a lawsuit in January challenging the DEA rule. According to the opening brief, filed on April 3rd, HIA and its co-plaintiffs charge the agency of abusing its authority by failing to follow necessary steps in scheduling new drugs under the Controlled Substances Act.
According to Bob Hoban, a Denver-based firm representing HIA in the case, there’s no legal basis for the new rule. “They have yet to provide any justification for why cannabinoids are outlawed, especially when cannabinoids are found in multiple other substances,” like some Echinacea species, he says. “So how on earth could they be a controlled substance [only if] they come from marijuana flowers?”
According to the Alcohol & Drug Abuse Institute, the Cannabis sativa plant has over 480 natural compounds, 66 of which are cannabinoids. While THC might get you high, many of the other 60-something chemical compounds found in the cannabis plants, like CBD, are not psychotropic.
CBD, in particular, is known to have medicinal and therapeutic benefits. Research has shown CBD to have anti-inflammatory, anti-anxiety, and antidepressant properties. The compound is also thought to act as an antioxidant and help with vomiting and nausea. Many within the hemp industry work on developing non-psychoactive hemp-derived CBD health products like oils, nutritional supplements and foods.
Yet the DEA continues to lump CBD with its psychotropic cousin THC simply because they both come from cannabis and hemp, says Stuart Tomc, vice president of human nutrition at CV Sciences, an HIA-affiliated company that produces CBD products.
“What people have to accept and embrace is that they’re completely different products and totally different markets with different customers,” Tomc says.
The DEA has recently backed off on targeting industrial hemp, which solves the first part of the lawsuit, Hoban says. Earlier this month, DEA Chief Chuck Rosenberg said that, as long as they follow the section governing industrial hemp in the Farm Bill, his agency won’t go after hemp farmers. And to that end, the DEA established that its final rule does not include “materials or products” excluded from the CSA’s definition of marijuana, like industrial hemp.
But Rosenberg’s clarification does nothing to address concerns over the agency’s cannabinoid categorization. And that’s fundamentally what the lawsuit is about, Hoban says.
The DEA’s rule still maintains that non-psychoactive cannabinoids are subject to Schedule I classification because they’re found in the parts of the cannabis plant governed by Controlled Substances Act. But the HIA’s lawsuit maintains that CBD and other cannabinoids, save for THC, are not independently scheduled as controlled substances under federal law, since the Controlled Substances Act only specifics THC and “marihuana” – not “marihuana extract” – as Schedule I drugs.
“The biggest problem as it pertains to the American economy and the hemp industry is: Stop treating industrial hemp and cannabis plants that are made for industrial hemp purposes should not be treated like a drug,” Hoban says. “If, in fact, the court finds that the DEA has no jurisdiction over cannabinoids, that would help us solve major problems.” (A spokesperson for the DEA declined to comment.)
If the DEA were to successfully classify cannabinoids – particularly CBD – as a Schedule I controlled substance, though, that would have a significant impact on the hemp industry. Businesses that sell hemp-derived CBD products would have to pull their items from stores, dealing a tremendous blow not only to their bottom line, but to the $688 million industry itself.
In fact, the DEA’s new administrative rule has already damaged the market in the less than six months it’s been in place, says Colleen Keahey, executive director of the Hemp Industries Association.
“People preemptively started to remove products from retail shelves out of fear,” Keahey tells Rolling Stone. “So there’s already been an incredible loss for certain product makers who’ve have that happen to them.”
This lawsuit is not a new fight for the HIA and DEA. In 2003, the HIA challenged the agency’s rules attempting to regulate products with natural and synthetic THC. Hemp fiber, hemp seed and hemp seed oil that contained trace amounts of THC would be exempt under the rules issued that year only if they were “not intended for human consumption.”
To the HIA, the DEA overstepped its bounds – and the Ninth Circuit Court of Appeals agreed. In 2004, the appellate court ruled that, based on THC regulation, the DEA had “no authority to regulate drugs that are not scheduled,” permanently blocking the rule’s enforcement. Yet it’s more than a decade later, and the federal agency has failed to comply with the court’s injunction, the HIA claims; the trade association filed a separate motion this February charging that the DEA is in contempt of court for violating the 2004 order, for which they are still awaiting a ruling.
As for the cannabinoids lawsuit, the DEA has until June 2nd to file its response brief. According to Hoban, the petitioners are anxious to see what the agency will have to say for itself.
“You know how you sit back and go, ‘What’s going to happen next? What could they possibly do next?’ That’s where we are right now,” Hoban says. “What could they possibly argue about cannabinoids? We frankly don’t understand and can’t understand their position.”