Duane Morris Article: DEA Issues Interim Final Rule Concerning Marijuana and Hemp

August 24, 2020

The DEA has not issued a warning or otherwise signaled a change in enforcement policy by issuing the interim final rule.

On August 21, 2020, the Drug Enforcement Administration (DEA) issued the interim final rule, “Implementation of the Agriculture Improvement Act of 2018,” designed to codify, within the agency’s regulations, the changes to the treatment of marijuana brought about by the Agriculture Improvement Act (the 2018 Farm Bill). In the interim final rule, the DEA has made a number of noteworthy updates to its regulations in order to bring them in line with the 2018 Farm Bill, including:

  • Removing FDA-approved products containing CBD (such as Epidiolex) from Schedule V of the Controlled Substances Act (CSA);
  • Removing FDA-approved products containing CBD from the list of substances requiring import and export permits from the DEA;
  • Revising the definition of “marihuana extract” in Schedule I of the CSA by qualifying that, for a substance to be a marihuana extract, it must contain a delta-9-THC concentration greater than 0.3 percent (the standard established by the 2018 Farm Bill); and
  • Revising the definition of “Tetrahydrocannabinols” in Schedule I of the CSA by qualifying that the term, as used in Schedule I, does not include any material, compound, mixture or preparation that falls within the definition of hemp established by federal law.

Further, the “Summary of Benefits and Costs” portion of the interim final rule explains, “Like FDA-approved CBD products… entities no longer require a DEA registration or import and export permits to handle hemp extract that does not exceed the statutory 0.3% THC limit.”

On its face, the interim final rule does not appear to be a shift in policy or to otherwise alter the status quo that has resulted from the passage of the 2018 Farm Bill in December 2018 and its implementing regulations in October 2019. In the DEA’s view, the interim final rule reflects updates designed to align agency rules with changes resulting from the 2018 Farm Bill, and the DEA explains that the interim final rule “merely conforms DEA’s regulations to the statutory amendments to the CSA that have already taken effect, and it does not add additional requirements to the regulations.”

However, the interim final rule leaves unresolved an issue many in the cannabis industry have struggled with: What to do about hemp material, such as a crude oil, that crosses the 0.3 percent THC threshold for federally unlawful marijuana during the processing of the plant into another substance, such as a CBD-powder or oil, which may ultimately be able to be marketed as being within the THC threshold for federally lawful hemp? In other words, should the hemp supply chain be concerned about products that are within the 0.3 percent THC threshold for hemp, and which were derived from a cannabis plant that was within the 0.3 percent THC threshold for hemp, because during the processing stage the 0.3 percent THC threshold was exceeded? Given that one intent of the 2018 Farm Bill was to allow for the marketing of hemp products, enforcement by the DEA against hemp products on the basis that the 0.3 percent THC threshold was crossed only during processing, which has not happened to date, would undermine and contradict that purpose of the 2018 Farm Bill.

The DEA has not issued a warning or otherwise signaled a change in enforcement policy by issuing the interim final rule. Nevertheless, the possibility of enforcement against cannabis that crosses the 0.3% THC threshold exists, as it has since the passage of the 2018 Farm Bill. Thus, stakeholders who wish to raise this issue should note that comments on the interim final rule must be submitted by October 20, 2020.

For More Information

If you have any questions about this Alert, please contact Seth A. GoldbergJustin M. L. Stern, any of the attorneys in our Cannabis Industry Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm’s full disclaimer.

Source:  https://www.duanemorris.com/alerts/dea_issues_interim_final_rule_concerning_marijuana_hemp_0820.html

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