Hemp Industries Association Files Petition Against DEA Marijuana Extract Rule Implementation

The Hemp Industries Association has filed a Petition for Review in the Ninth Circuit to block implementation of the Drug Enforcement Administration’s (“DEA’s”) recent final rule on Marijuana extracts. The DEA final rule designates non-psychoactive cannabinoids, including cannabidiol, as “marihuana extract” and adds all cannabinoids, including exempted portions of the Cannabis sativa L. plant, to schedule I of the federal Controlled Substances Act (“CSA”).  See Establishment of a New Drug Code for Marihuana Extract, 81 Fed. Reg. 90,194. 90,196 (Dec. 14, 2016) (here).

The petition seeks judicial review of DEA’s final rule creating a new drug code without following required CSA procedures or making findings required by the CSA to control substances. The petition claims that DEA’s rule creates a drug code for substances that are not controlled under the CSA; that the final rule “dictates that the mere presence of ‘cannabinoids,’ which are not controlled substances, is the determinative factor of whether a compound is a ‘marihuana extract.’” Petition at 2. It further claims that the final rule too broadly defines “marihuana extract” by including portions of the Cannabis sativa L. plant that are exempt from control under the CSA or exempt from being treated as controlled substances pursuant to the CSA and the Agricultural Act of 2014. Id. at 2-3.

The CSA defines “marihuana” as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin” but excludes “the mature stalks of [the] plant, fiber produced from [the] stalks, oil or cake made from the seeds of [the] plant, any other compound, manufacture, salt, derivative, mixture, or preparation of [the] mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed[s] . . . incapable of germination.” 21 U.S.C. § 802(16). Yet, the DEA final rule on marijuana extracts appears to include all portions of the marijuana plant, including those specifically excluded by the CSA from the definition of marijuana.

Petitioner, the Hemp Industries Association, successfully challenged DEA’s 2003 rulemaking that amended the regulation to include naturally occurring tetrahydrocannabinols (“THC”) within the definition of “synthetic THC” and, therefore, treat it as a schedule I substance, even though it falls outside the CSA definition of marijuana. Hemp Indus. Ass’n v. DEA, 357 F.3d 1012 (9th Cir. 2004) (here). The Court of Appeals for the Ninth Circuit concluded that DEA “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.” Id. at 1018. The Court held that DEA’s broadening of the definition of THC to include naturally occurring THC “contravenes the unambiguously expressed intent of Congress in the CSA and cannot be upheld.” Id. The Court permanently enjoined DEA from enforcing the rules scheduling THC. Id. at 1019. However, the Court’s decision is limited to the Ninth Circuit.

It will be interesting to follow this petition given how the marijuana/hemp/THC state regulatory landscape has changed considerably since 2004.