CBD Ban Challenged in Federal Court


The 9th U.S. Circuit Court of Appeals in San Francisco heard oral arguments Thursday February 15th in the Hemp Industries Association?s?petition?challenging?the U.S. Drug Enforcement Administration?s January 2017?rule creating a Controlled Substances Code Number?for ?marihuana extracts.?

The case won?t be decided for months, but the outcome is important for the entire cannabis industry, not just entrepreneurs making or selling hemp-derived cannabidiol products.

DEA officials claim the rule is administrative in nature and helps the agency better track research and meet international drug treaty requirements.

Attorneys for a hemp industry trade association and hemp businesses argue that the DEA conflated the terms ?marijuana? and ?cannabis,? ultimately creating a rule that can be interpreted as scheduling cannabis and cannabinoids as illegal substances. They blame the rule for a rash of seizures of cannabidiol products.

The DEA?s rule epitomizes ?government overreach? and stands in opposition to intervening legislation, Robert Hoban, a Denver-based attorney representing the hemp industry, told the 9th Circuit Court judges.

?There was a seismic shift in United States cannabis policy in 2014 with the enactment of the Farm Bill, specifically Section 7606, involving industrial hemp,? said Hoban, a principal of Hoban Law Group. ?And that seems to have created some confusion, perhaps, with the Drug Enforcement Administration.?

Hoban claimed that confusion extended to other federal, state and local enforcement agencies, which have since seized products such as hemp-derived, CBD-rich extracts.

?We?ve seen this drug code utilized week after week since it?s enactment to seize, to cause criminal enforcement against lawful operators who require no DEA registration,? Hoban said.

In making its case in 2016 and again in court on Thursday, the DEA cited both existing federal law and a pair of United Nations treaties, to which the US is a signatory: the 1961 Single Convention on Narcotic Drugs and the 1971 Convention on Psychotropic Substances. To comply with the US?s obligations to the treaty, which declares marijuana dangerous and banned, the definition must be updated to include a marijuana-like product such as CBD. Judges questioned whether the treaties also give the DEA leeway to expand its definition of marijuana.

The DEA ?can?do that, but that?s not what they did,? according to Hoban. ?It?s within their purview, but they did not follow the proper procedure. And I think they [the judges] got that.?

Thursday?s hearing drew a slew of attorneys from across the country as well as hemp industry figures. Opinion was split as to how the hearing went. ?That was rough,? one said, finding an ill omen in the judges? references to the UN treaties.

The?DEA?made a decision last January to declare products made from marijuana as a Schedule I narcotic, and it led to series of seizures of products containing?CBD?extracts. The Justice Department, in response, said that the DEA’s guidelines didn’t intend for those seizures to happen. They said the regulations only specify the controlled parts of the marijuana plant that part of the Controlled Substances Act passed by Congress. They said those seizures of CBD products were not part of their guidelines, and that the rightful response to those seizures is to challenge them independently in court.

In addition to the legal arguments made in court, the judge will consider a number of other briefs and arguments filed by outside parties, including a letter from 28 members of Congress arguing against the DEA’s position.

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