On Monday, the Ninth Circuit Court of Appeals ruled against the Hemp Industries Association in their bid to overturn the Drug Enforcement Agency’s classification of cannabidiol (CBD, or CBD oil) as a Schedule I substance under the Controlled Substances Act. The case, Hemp Industries Association, et al. vs. Drug Enforcement Agency, et al. (“HIA v. DEA III”) brought together the Hemp Industries Association, along with Centuria Natural Foods and other hemp business a little over a year ago to have the court either strike down or clarify the DEA’s Marihuana Extract Rule, neither of which happened this week.
As the court noted in their decision, the petitioners “did not participate in notice and comment, but insist that a comment submitted by a private citizen adequately raised the concerns that now comprise their petition.” In other words, the petition was struck down on procedural grounds.
Contrary to most reports, however, CBD products, such as the favorite CBD oil, have not been ruled entirely illegal.
Cannabis activist and attorney Rod Kight, whose blog Kight On Cannabis has become the definitive source for wading through the judicial waters of the fight for legalization noted that courts commonly base their decisions on procedural, rather than substantive grounds. However, in the case of the Hemp Industries Association versus the DEA, he qualified that statement by writing that in this case, the ruling seemed particularly unfair.
Kight pointed to the fact that the comments period ended years before the enacting of the Farm Act, leaving the door open for an appeal. Centuria Natural Foods CEO Michael Brubeck signaled that his company would do exactly that, as, according to Hemp Industry Daily he stated, “We will be appealing, and we will be funding that appeal.” Centuria produces and sells CBD hemp products in all 50 states.
Although contacted for comment, the Hemp Industries Association and their representatives have yet to respond to questions regarding the ruling. In a PotNetwork exclusive last month, Board Officer Joy Beckerman relayed how she came away from oral arguments feeling positive.
“They're going to have their clerks digest and chew up the legal arguments and they're going to take their time to deliberate so that they can render the best decision that they can. So, what I thought was that the questions and, of course, it's the torture of the lawyer and of the clients, of the legal team to literally analyze and re-analyze every question, every facial expression, every piece of body movement you're analyzing. What did he mean?”
She continued, ”I mean, I am so proud and grateful to our lawyers and, you know, they are so dedicated to fighting, what I call, the untenable confusion and injurious condition that is being caused by this marijuana extract rule.”
However, while the future of the case remains in question, Kight reminds those on both sides of the argument the dangers of reading too much into the decision. While he is clear that the Hemp Industries Association did “lose” this battle, he also notes that CBD from industrial hemp is still lawful. In finding that the Farm Act preempts the Controlled Substances Act, the Hemp Industries Association did make some headway with the case.
In other words, the DEA ruling does not apply to what is already considered “lawful hemp.” As long as industrial hemp is cultivated as per a state’s pilot program, it is legal within the boundaries of the law, something the DEA fought to have struck down.
Kight does predict, on the other hand, more confusion when it comes to matters of local law enforcement.
“I do think that we will see more law enforcement actions at the local, non-federal level,” Kight wrote in an email. “However, I don't think that the HIA v. DEA ruling will embolden them. Rather, I think that the effect of the decision, by which I am referring to the Court not addressing or clarifying the law regarding CBD, will be to further confuse matters.”
If anything Kight believes the ruling works to only stoke the fires of an already confusing landscape when it comes to CBD oil. Law enforcement, and to an extent local media wrongfully believe CBD oil and other products cause a high, are made from synthetics, or, most erroneously, are considered Schedule I drugs. He worries about more shakedowns occurring, like the infamous “Operation Candy Crush” in Tennessee where 23 store owners were arrested in a sting operation for selling CBD. All charges were eventually dropped in that case.
“Now, if [law enforcement officials] hear anything, it will be that the HIA ‘lost’ its case and that CBD is covered under the Marihuana Extract Rule as a controlled substance,” wrote Kight. “Had the Court simply stated that the Farm Act controls, including CBD from industrial hemp, the misinformation problem would have been solved. Instead, and despite the fact that the Court didn't do anything except reiterate what we already know (i.e., that the Farm Act preempts the Controlled Substances Act), the effect of the ruling will be to sow further confusion.”
The media may have a significant role to play in sowing confusion, if, as Kight notes, their headlines proclaim the demise of CBD based on this ruling. In fact, a quick scan of headlines about the case shows precisely that, with most major outlets noting that the Hemp Industries Association lost while burying any lede about the clarification of the Farm Act.
“Unfortunately, most people are not interested or don't have time to read a detailed legal analysis,” noted Kight. “They want to know, Did the HIA win or lose? If media headlines state, Court Denies HIA Petition: Final Rule Stands then the DEA can chalk up a "win." On the other hand, if media headlines state, Court Affirms That Farm Act Trumps Controlled Substances Act, then the HIA can chalk up a "win." The fact is that both of these headlines are true.”
Moreover, flat out incorrect reports will only add to the confusion. “There is no doubt that inaccurate media reports, which tend to skew towards the "CBD is schedule 1" position, will harm the industry,” stated Kight.
Anyway one spins it, the Hemp Industries Association was dealt a huge blow this week by the Ninth Circuit Court of Appeals, but however significant that blow was it is important to remember that it was not fatal. As Kight noted in his blog on the subject, “The bottom line is that CBD from lawful industrial hemp is legal if it is legal under a state’s laws. (It’s also legal if it is derived from the mature stalk of the marijuana plant or non-psychoactive hemp grown outside the US, both of which are excluded from the definition of illegal marijuana.)”
“This is not new or groundbreaking,” he continued, “but it does underscore the fact that CBD from industrial hemp is not legal in every state.”