The Sky Already Fell

By David Bush

On Wednesday, December 14, 2016, the federal Drug Enforcement Administration (DEA) announced a new and controversial rule that invited a range of reactions among hempsters, from bitter resignation and outrage to cautious shrugs. The anger and caution are understandable but misplaced. The new rule is not the problem. The problem is very bad law that underlies and gives legitimacy to the new rule. Nothing has changed. What was bad before is still bad now.

The new DEA rule created a numerical code on its list of Schedule I controlled substances—No. 7350, to designate a separate class of material called “marijuana extract.” It defined marijuana extract as “an extract 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 ostensible reason for creating the code was to “allow DEA and DEA-registered entities to track quantities of this material separately from quantities of marijuana. This, in turn, will aid in complying with relevant treaty provisions.”

The new rule is controversial because of the breadth of the definition for marijuana extracts. It includes not only what is commonly understood to be is a derivative of adult use and medical marijuana—such as high-tetrahydrocannabinol (THC) hash oil—but also non-psychoactive compounds that are found in both marijuana and industrial hemp. They include, among others, cannabidiol (CBD), cannabinol (CBN), cannabichromene (CBC) and cannabigerol (CBG). Non-psychoactive extracts of industrial hemp are made into a vast array of tinctures and oils, salves, powders and other products, marketed as everything from home remedies to food to dietary supplements to cosmetics. There is a palpable fear that the DEA might be poised to attack all of these extracts and products as dangerous, addictive and illegal Schedule I controlled substances. 

Reaction to the new rule falls into multiple camps. At one extreme are those who feel under attack by a perceived gang of jack-booted prohibitionists ensconced in the DEA and bent on outlawing all naturally-occurring cannabinoids extracted from industrial hemp. At the other extreme are those who believe the DEA did nothing more than exercise its bureaucratic penchant for counting beans in a novel way, but with no immediate intent to interfere with makers and distributors of legal industrial hemp products. The emerging consensus seems to be that while cannabinoid extracts remain safe for now, the community should pay close attention to the DEA in the event that it attempts to use the new rule to harass the industry.

Among all the chatter one consistent theme has emerged: the assumption that all hemp extracts are legal. That is a grave mistake. There is no present danger that cannabinoids might be declared federally illegal. In that regard, the sky isn’t falling now; it fell 80 years ago. Changes have occurred recently in the legal and political landscape and the hemp industry is once again on the rise in the United States. But what passes now as legal commerce in industrial hemp products has been federally illegal since 1937 and may continue to be so for some time yet to come. The reason for the resurgence in industrial hemp is not because federal prohibitions have ended. They haven’t. What we are witnessing instead is a shift in law enforcement priorities that allow or compel officials to look the other way when certain violations occur.

(Almost All) Cannabinoid Extracts from Industrial Hemp Are Illegal

Federal law makes it a crime to manufacture, possess or distribute controlled substances without a license issued by the DEA. Materials listed on Schedule I are considered the worst of the worst among controlled substances and merit the most severe penalties for violating the law. Almost all cannabinoids produced from the plant genus Cannabis meet the definition of a Schedule I controlled substance. That has been the law for a long time. Nothing the DEA did on December 14 changed current reality.

A common misperception is that non-psychoactive cannabinoids like CBD are not regulated under federal drug laws because they do not specifically appear on lists of controlled substances. But cannabinoids don’t have to be separately listed to be controlled; they are controlled by definition.

Many things are prohibited under the law without being identified in exact detail. The law handles most subject matter by establishing categories, not by enumerating every possible permutation of the unlawful act. Take, for example a highway where the posted speed limit is 65. One who is caught driving 85 miles an hour could never beat the rap by claiming that the law fails to mention the number 85 in its glossary of speed limits. It is a mathematical certainty that 85 is more than 65. Because nobody is allowed to drive faster than the limit, driving at 85 (or 78.2 or 68.9) is undeniably a violation. Likewise, while it is true that the only cannabinoid specifically listed in the Controlled Substances Act (CSA) as a controlled substance is THC, the other cannabinoids are still listed by definition, which makes them just as illegal as if they were specifically named.

“Marihuana” (archaic spelling) is a Schedule I controlled substance.  As subsequently clarified in a series of decisions in the federal courts, the law defines marijuana as all parts of the plant of genus Cannabis except non-viable seeds and mature stalks. The definition never mentions THC or any other cannabinoid; the presence or absence of cannabinoids in a given cannabis plant is irrelevant. Because industrial hemp is a plant of genus Cannabis, it meets the definition of marijuana. The law goes further. Not only cannabis plants, but “every compound, manufacture, salt, derivative, mixture, or preparation of such plant” is also classified as marijuana. And as a result, the leaves, flowers, twigs, viable seeds and roots of anything we choose to call marijuana or industrial hemp, and anything made from either one—including essentially all commercially produced non-psychoactive cannabinoids products—are federally classified as Schedule I controlled substances. The law may be sad, illogical and misguided, perhaps even stupid. But it is what it says.

Having said that, the DEA still exceeded its authority by writing the new rule too broadly. It defined marijuana extract to include any cannabinoid produced from genus Cannabis, whether or not derived from marijuana. This is clearly an error and ought to be fixed. But as commercially-produced cannabinoids are almost universally derived from leaves and flowers, which are among the parts of the cannabis plant characterized as marijuana, the practical effect of this error is negligible. Even if the scope of the rule were corrected, the overwhelming majority of commercial cannabinoids produced from industrial hemp would still qualify as marijuana extracts.

Arguments for the Legality of Industrial Hemp Cannabinoids are Wrong

There are three arguments heard frequently as to why one should conclude that extracts, including cannabinoids, from industrial hemp plants, are federally legal. They are all wrong.

The first argument is that a federal circuit court ruled as a matter of law that industrial hemp products were legal. Hardly. In a pair of decisions issued in 2003 and 2004, the Ninth Circuit Court of Appeals held that naturally-occurring derivatives of the non-marijuana parts of the cannabis plant—that is, mature stalks and crushed or sterilized seed—were not controlled substances. That is self-evident from a plain reading of the CSA. The court never held that derivatives of leaves, flowers, viable seeds or roots—that is, virtually every source of commercially produced cannabinoids today—were legal. Those extracts remain classified as marijuana.

The second argument is that the Agricultural Act of 2014 (the so-called “Farm Bill”) legalized industrial hemp plants and anything made from any part of the hemp plant. Again, hardly. All the law did—which, by the way, expires on September 30, 2019—was to temporarily authorize state departments of agriculture and institutions of higher education, if located in a state where a regulatory system is in place, to cultivate industrial hemp solely for purposes of research. Nothing in the Farm Bill ever gave a green light to legal cultivation, processing and sale of industrial hemp otherwise. In August of this year, the US Department of Agriculture clarified that industrial hemp grown under the Farm Bill could not be sold, even under the guise of “marketing” research, “for the purpose of general commercial activity.” Put another way, farm hemp cultivation is not a cover for undertaking private enterprise.

Finally, some argue that amendments approved by Congress to the 2015 and 2016 federal budgets that limit federal law enforcement activity against medical marijuana and farm bill industrial hemp somehow legitimized those activities. Nothing could be further from the truth. The substance of the law is one thing; how the law might actually be enforced is quite another. The fact that the only patrol officer employed on a stretch of highway might be ordered to take Sunday off does not mean that it is legal to drive on Sundays at 85 miles an hour where the posted speed limit is 65. It simply means that drivers won’t get caught for breaking the speeding law on Sundays because the cop is not on duty. Likewise, a few temporary budget measures designed to constrain enforcement of parts of our federal drug laws might help certain nascent cannabis industries establish themselves; but it does not make what they are doing any less illegal. It simply means they can break the law without consequences.

Conclusion

Since 1937, all cannabinoid extracts from the leaves, flowers, twigs, viable seeds and roots of a cannabis plant, without regard to whether one wishes to call it marijuana or industrial hemp, are and continue to be Schedule I controlled substances. The sky isn’t falling now because it already fell decades ago. And yet, here we are. With apologies to the booming business nation-wide in industrial plant extracts, the truth is they are in the business of breaking federal law. Which might not be such a bad thing and is nothing to be ashamed about. State-legal adult use and medical marijuana industries accept without blinking an eye that they are a federal anathema. The marijuana business still goes on. Hempsters should likewise abandon the pretense of being a legal industry. They should be proud of flaunting a very, very bad federal law that we all hope will one day soon be consigned by Congress to the dustbin of history.

David B. Bush, Esq. is an attorney in the firm of David B. Bush, L.L.C. dba DavidLaw, a business law practice dedicated to furthering the successful development of industrial hemp in Colorado and throughout the United States. His web page is www.davidlawcolorado.com and he may be reached at bush@davidlawcolorado.com.