Dreams of Hemp Oil Boom May Go Up in Smoke with DEA Ruling

The Drug Enforcement Administration just delivered a major buzzkill to the hemp industry.

The DEA issued  a Dec. 14 ruling that could put certain extracts from the hemp plant on par with marijuana, making them just as illegal from a federal perspective.

But the industrial hemp industry says it's willing to take the agency to court over the rule, saying that a provision in the 2014 farm law (of all things) makes the extracts legal.


 marijuana plants

“The Hemp Industries Association is monitoring this development closely, and is strongly considering legal action to protect the interests of its members and the hemp industry as a whole,” the group, which represents hemp producers, said in a Dec. 16 statement.

The DEA's final rule creates a new category for scheduled, or regulated, “marijuana extracts.” The rule would allow the federal government to track and regulate cannabis compounds separate from tetrahydrocannabinol, THC, the active ingredient in marijuana.

That category would include cannabidiol, or CBD. But the compound can be extracted from both the marijuana plant and industrial hemp plants, whose cultivation for research purposes is legal. Unlike THC, cannabidiol is not psychoactive and the hemp industry has pushed research into the compound for medical purposes.

While the 2014 farm bill made it legal to grow hemp in the U.S. for research purposes, CBD remained in a legal gray area. Still, it's used in a wide variety of products such as oils, body lotions and nutritional supplements. The new rule would effectively make CBD a Schedule I substance, similar to marijuana and other drugs.

What the DEA is saying is that while it's legal to grow hemp for research purposes, if you extract CBD from the plant, you just broke the law.

Eric Steenstra, executive director of the Hemp Industries Association, disagrees with that interpretation, and says  the hemp industry, and CBD, are protected by the 2014 farm bill.

“It’s important to understand that this final rule does not change the legal status of hemp-derived CBD,” Steenstra said in the statement. “Cannabidiol is not listed on the federal schedule of controlled substances, and the DEA has no authority whatsoever to impede the production, processing or sale of hemp products, including CBD products, grown under the farm bill.”

That's true. Cannabidiol isn't listed per se among Schedule I substances, but the DEA now views it as a marijuana extract and thus it would fall under the new rule.

“For practical purposes, all extracts that contain CBD will also contain at least small amount of other cannabbinoids,” the DEA said in response to a public comment on the rule. “However, if it were possible to produce from the cannabis plant an extract that contained only CBD and no other cannabinoids, such an extract would fall within the new drug code.”

Steenstra's groups says to add it to the list of Schedule I substances is beyond the DEA's pay grade.

“Adding CBD products to the federal schedule of controlled substances would require new legislation to pass in Congress or action taken by the attorney general, amending the [Controlled Substances Act],” the Hemp Industries Association statement said.

The new rule is slated to take effect Jan. 13, 2017, and stakeholders will likely be watching for any resulting legal challenge.