DEA’s Marijuana Extract Rule Survives: What Does This Mean For CBD?

On Monday, the US Court of Appeals for the Ninth Circuit rejected the Hemp Industries Association’s (HIA) lawsuit against the DEA.  The HIA lawsuit had challenged the DEA’s Marijuana Extract Rule, which defines "marihuana extract" to include any "extract containing one or more cannabinoids..." 81 Fed. Reg. 90195 (Dec. 14, 2016).  

What does this result mean?  In short, for now, the only federally-legal CBD is CBD derived from industrial hemp cultivated as part of a 2014 Agricultural Act-complaint research program.

For background on CBD and its status under federal law, check out our previous post, Cutting Through the Noise on CBD Oil.  Additional details on the new decision are below. 

First, CBD derived from cannabis flowers remains a Schedule 1 Controlled Substance (unless, as discussed below, it is sourced from Agricultural Act-compliant industrial hemp).  The HIA had argued that the Marijuana Extract Rule had scheduled a new controlled substance, but the Court rejected that argument, finding that the HIA had waived it by not raising it during the notice and comment period for the Rule.  As explained in our previous post, this argument would be unlikely to succeed in any event, as the federal definition of marijuana has and continues to include anything derived from the flowers of a cannabis plant, including CBD. As the DEA's clarification of the Rule from March of 2017 points out, "cannabinoids, such as tetrahydrocannabinols (THC), cannabinols (CBN) and cannabidiols (CBD), are found in the parts of the cannabis plant that fall within the CSA definition of marijuana, such as the flowering tops, resin, and leaves."

Second, not all industrial hemp is federally legal.  The HIA had argued that any industrial hemp, meaning any cannabis plant with THC levels below 0.3% THC, was legalized by the 2014 Agricultural Act.  The Court did not accept that argument, instead explaining that the 2014 Agricultural Act only authorized hemp cultivated "for purposes of research conducted under an agricultural pilot program or other agricultural or academic research." 7 U.S.C. § 5940(a).

Third, the court clarified that Agricultural Act-compliant industrial hemp is exempted from the Controlled Substances Act and therefore not federally illegal. The court explained that, "The Agricultural Act contemplates potential conflict between the Controlled Substances Act and preempts it."  This is in line with the position taken by the Department of Justice, on behalf of the DEA, that "Where the Agricultural Act provision applies, it expressly overrides contrary provisions of the CSA [Controlled Substances Act].” 

Until there is a legislative change, CBD derived from hemp grown in Agricultural Act-compliant research programs in states such as Kentucky or Oregon continues to have federal legal protections that other sources do not.  


Hannah Strassburger