On August 21, 2020, the U.S. Drug Enforcement Agency (DEA) proposed its much-anticipated Interim Final Rule regarding hemp. The rule was mandated under the Agriculture Improvement Act of 2018 (the 2018 Farm Bill), which legalized hemp under federal law.

According to the DEA, the rule “merely conforms DEA's regulations to the statutory amendments to the [Controlled Substances Act] that have already taken effect, and it does not add additional requirements to the regulations.” However, the proposed regulations will like will have an impact on the hemp industry and will be subject to public comment.

Amending CSA to Address Hemp Legalization

As we have discussed in several prior articles, the 2018 Farm Bill fundamentally changed the way hemp is regulated in the United States by removing “hemp” from the Controlled Substances Act’s (CSA) definition of marijuana. Accordingly, cannabis plants and derivatives that contain no more than 0.3% THC on a dry-weight basis are no longer controlled substances under the CSA.

To conform with the 2018 Farm Bill, the DEA is amending its regulation of marijuana and tetrahydrocannabinols under the CSA. The Interim Final Rule makes the following key changes:

  • It modifies 21 CFR 1308.11(d)(31) by adding language stating that the definition of "Tetrahydrocannabinols" does not include "any material, compound, mixture, or preparation that falls within the definition of hemp set forth in 7 U.S.C. 1639o."
  • It removes from control in schedule V under 21 CFR 1308.15(f) a "drug product in finished dosage formulation that has been approved by the U.S. Food and Drug Administration that contains cannabidiol (2-[1R-3-methyl-6R-(1-methylethenyl)-2-cyclohexen-1-yl]-5-pentyl-1,3-benzenediol) derived from cannabis and no more than 0.1% (w/w) residual tetrahydrocannabinols."
  • It also removes the import and export controls described in 21 CFR 1312.30(b) over those same substances.
  • It modifies 21 CFR 1308.11(d)(58) by stating that the definition of "Marihuana Extract" is limited to extracts "containing greater than 0.3 percent delta-9-tetrahydrocannabinol on a dry weight basis."

Of particular interest to the hemp industry, the DEA’s Interim Final Rule emphasizes that the definition of hemp does not automatically exempt any product derived from a hemp plant, regardless of the THC content of the derivative. In order to meet the definition of "hemp," and thus qualify for the exemption from schedule I, the derivative must not exceed the 0.3% THC limit.

The DEA’s definition of "marihuana" further states that "all parts of the plant Cannabis sativa L.," and "every compound, manufacture, salt, derivative, mixture, or preparation of such plant," are Schedule I controlled substances unless they meet the definition of "hemp" (by falling below the 0.3% THC limit on a dry weight basis) or are from exempt parts of the plant (such as mature stalks or non-germinating seeds). Accordingly, a cannabis derivative, extract, or product that exceeds the 0.3% THC limit is a Schedule I controlled substance, even if the plant from which it was derived contained 0.3% or less on a dry weight basis. This raises concern for the hemp industry as it suggests that partially processed hemp extract, which is not intended for consumption (often referred to as “intermediary hemp”), will still be treated as a Schedule I controlled substance. 

In addition, under the DEA’s Interim Final Rule, CBD in a mixture with a THC concentration greater than 0.3% by dry weight is not exempted from the definition of "marihuana" or "tetrahydrocannabinols." As a result, all such mixtures exceeding the 0.3% limit remain controlled substances under Schedule I.

The DEA’s Interim Final Rule also addresses synthetic THC. “The [2018 Farm Bill] does not impact the control status of synthetically derived tetrahydrocannabinols (for Controlled Substance Code Number 7370) because the statutory definition of ‘hemp’ is limited to materials that are derived from the plant Cannabis sativa L,” the Interim Final Rule states. “For synthetically derived tetrahydrocannabinols, the concentration of Δ9-THC is not a determining factor in whether the material is a controlled substance.” 

What’s Next?

While the Interim Final Rule took effect on August 21, 2020, the DEA is accepting feedback from the public. Electronic comments must be submitted, and written comments must be postmarked, on or before October 20, 2020.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.