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21. October 2020
CBD Hemp News North America Regulation

Hemp Industries Association Sues United States DEA

The Hemp Industries Association initiated legal action, last week, against the U.S. Drug Enforcement Agency, in a challenge to the agency’s enforcement of hemp regulations. The petition argues the agency exceeded its authority and violated the 2018 farm bill.

In a petition filed in the U.S. District Court for the District of Columbia, the Hemp Industry Association challenges the new DEA interim final rule on how EPA would handle statutory changes to the Controlled Substances Act made in the Agriculture Improvement Act of 2018 (the farm bill). The farm bill deregulated hemp production based on a cannabis crop with 0.3% levels or lower of delta-9 tetrahydrocanniabinols (THC) on a dry weight basis.

According to a report by the Progressive Farmer, the DEA makes it clear in its rule that cannabis products with THC above levels of 0.3% remain Schedule I controlled substances. But the DEA rule goes further to state that “the definition of hemp does not automatically exempt any product derived from a hemp plant, regardless of the (THC) content of the derivative.” Every component and compound of the plant must fall under that 0.3% limit. So any product that goes above 0.3% is a controlled substance, even if the plant itself does not produce higher than 0.3% levels on a dry weight basis.

In their legal move, the Hemp Industries Association (HIA), and RE Botanicals Inc., a South Carolina-based company, argue that the DEA isn’t following the provisions in the 2018 farm bill. Specifically, DEA classifies waste hemp material, and intermediary hemp materials as Schedule I substances while the industry adds both kinds of materials are “necessary and inevitable by products of hemp processing.” The trade association and company state Congress removed restrictions on commercial hemp activity from DEA’s jurisdiction when Congress legalized hemp production, and processing in the farm bill.

HIA is a trade association that represents approximately 1,050-member hemp businesses, including approximately 300 hemp processors and individuals involved in, or impacted by, the manufacture, distribution and/or sale of hemp extract and other products lawfully derived from industrial hemp.

When Congress passed the 2018 farm bill, it explicitly carved hemp and its derivatives out of the Controlled Substances Act so that hemp can be regulated as an agricultural commodity,” said HIA President Rick Trojan. “The DEA’s interim final rule could create substantial barriers to the legal manufacturing of hemp-derived products, a critical component of the hemp supply chain, and devastate the entire hemp industry. Although the DEA states that is not its intention, the rule must be amended to ensure hemp remains an agricultural crop, as Congress intended.”

The HIA highlights how the DEA’s current activity is likely to be hugely damaging to the complete hemp supply chain and jeopardizes the entire hemp industry, “If allowed to stand, DEA’s intrusion will undermine a lynchpin of the new hemp economy that has created tens of thousands of new jobs and provided a lucrative new crop for America’s struggling farmers.”

The petition continues, “The DEA’s interpretation of the 2018 Farm Bill “has serious, immediate, and irreparable consequences. (All) hemp processors and manufacturers who work with and/or store IHM and/or WHM must now choose between ceasing to process, manufacture and/or store hemp; obtaining a Schedule I license from DEA; or risking criminal prosecution under the (Controlled Substances Act). Given the centrality of hemp processing to the hemp industry’s supply chain, forcing processors to choose between the foregoing options would effectively destroy the entire hemp industry.”

We are a small, woman-operated company,” said Janel Ralph, CEO of RE Botanicals. “The DEA’s new rule could put us out of business overnight.”

The move is the latest in a series of legal challenges, in the United States, as many States attempt to implement a legal hemp industry. Without clear regulatory clarification the industry remains in a period of limbo with many parts of the production supply chain facing uncertainty around allowable processes and activities.

Source | Hemp Industry Association