DEA’s rule on cannabis extracts will stand, federal judges say

A federal appeals court this week dealt a blow to makers of CBD-rich cannabis extracts who were trying to stop the Drug Enforcement Administration from considering their products as dangerous drugs.

A panel of judges for the 9th U.S. Circuit Court of Appeals shot down the hemp industry’s challenge of a DEA rule that established a drug code for marijuana extracts.

DEA officials had said the code was intended to track cannabis derivatives used in research and to meet treaty obligations, adding that these extracts and byproducts remain Schedule I substances that the government says have no accepted medical use, such as heroin, LSD, peyote and ecstasy.

Hemp industry leaders pushed back on that Schedule I assertion and the rule itself.

Represented by Denver-based cannabis law firm Hoban Law Group, the Hemp Industries Association and other hemp businesses challenged the DEA’s rule and alleged the agency overstepped its bounds by essentially scheduling substances — notably cannabinoids — that were not classified as illicit in the Controlled Substances Act. Additionally, they argued, the hemp-derived extracts rich in CBD, or cannabinol, are protected under state laws and Farm Bill provisions.

The rule could be misinterpreted by other federal and local agencies, lead to unlawful product seizures and chill a booming multibillion-dollar hemp products industry, Hoban attorneys had said.

In the opinion, issued Monday, the 9th Circuit judges said Hoban Law Group’s clients had an opportunity to comment during the DEA’s rule-making process but failed to do so. As a result, the bulk of their challenge was moot.

Separately, the judges said the DEA’s final rule did not violate the Agricultural Act of 2014 (Farm Bill), which contained provisions allowing for industrial hemp, defined as cannabis sativa L. plants with less than 0.3 percent concentration of psychoactive tetrahydrocannabinols.

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