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Ninth Circuit’s Ruling Does Not Apply To CBD From Hemp: Kight On Cannabis

In a decision released April 30th, the 9th Circuit refused to order a retraction of the December 2016 DEA "extracts designation" on CBD, re-affirming CBD as a Schedule I Controlled Substance.

Hemp Industries Association (HIA), Centuria, RMH Holdings, and attorneys at Hoban Law are downplaying the decision and say they will ask the court to reconsider, and if unsuccessful, look at pursuing an appeal.  

The court sided with the DEA, saying plaintiffs had no standing to ask for a set-aside of the DEA's administrative action since they were not part of the 4-year rulemaking which created the new CBD-extract code.

Calling it good news for the industry, Colorado HIA president Tim Gordon said,  "Essentially, the Court's Order finds that the Farm Bill's hemp amendment exists separate and apart from DEA's Final Rule, and that where there is confusion or conflict as to lawful hemp activities, DEA's Final Rule does not apply."

In a prepared statement for the Denver Post, Hoban Law responded, “Though we appreciate the Court's finding in favor of the legitimacy of the Farm Bill's hemp amendment, we are still disappointed with the Court's findings that the Final Rule does not interfere with lawful, hemp-related business activities, as even 29 members of Congress confirmed in their Amicus Brief to the Court."

But hemp activist and founder of GrowHempColorado, Veronica Carpio, was much less generous with the court ruling.

"This was an epic fail, and waste of time," said Carpio, adding that the Hoban-led push for a court displacement of DEA administrative action would create "further harm to the existing industry and empower the DEA position."

Unclear was how—and if—the confirmation of the DEA position would put a cooler on “legal in 50 states” claims, or whether CBD with less than 0.3% THC would only be legally available in the 36 U.S. states with specific language allowing consumer use of CBD. In Carpio's assessment, all shipments within the U.S. would be subject to seizure from retailers—that is if a state or federal agency wanted to pursue the issue.

After a 45-day period where petitioners will ask the 9th Circuit to reconsider the dismissal, Hoban and plaintiffs will need to review an expensive and complex appeal to the U.S. Supreme Court.

Hoban added, "Given the pervasive confusion and irreconcilable conflicts of the law that have led to product seizures, arrests and criminal charges against those involved in the lawful hemp industry, the Petitioners believe that the Final Rule must be invalidated, absent the Court clarifying and further resolving these conflicts and their severe consequences.”

The Point May Soon Be Moot

According to a report posted on PotNetwork, 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, and suggested that the industry should not be reading too much into the decision.

“While he is clear that the Hemp Industries Association did ‘lose’ this battle,” reads the PotNetwork post, “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 article continues, “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.”

Meanwhile, U.S. Senate Majority Leader Mitch McConnell (R-KY) is making moves to include the language of his new hemp legalization bill, which he introduced last month, into The Farm Bill that is expected to advance in Congress this month.

The Farm Bill is brought up in Congress every few years. It sets food and agriculture policy for the country. McConnell wants to use this year's version as a vehicle for hemp reform. McConnell's hemp bill would remove hemp from the Controlled Substances Act's definition of marijuana altogether.