Sunday, February 26, 2017

Hemp Industries Association Seeks Contempt against DEA; Alleges Violation of 2004 Hemp Order

By Larry K. Houck & Riëtte van Laack – 

Last month we reported that the Hemp Industries Association (“HIA”) petitioned the U.S. Court of Appeals for the Ninth Circuit to block the Drug Enforcement Administration’s (“DEA’s”) implementation of its recent final rule on marijuana extracts. On February 6, 2017, HIA filed another action with the Ninth Circuit; this one seeking to direct DEA to show cause why it should not be held in contempt, for failure to comply with the Court’s 2004 order that permanently enjoined DEA from regulating hemp fiber, stalk, sterilized seed and oil as controlled substances. The federal Controlled Substances Act (“CSA”) specifically excludes these parts of the plant from its definition of “marihuana.” 21 U.S.C. § 802(16).
As we mentioned previously, DEA issued two final rules in March 2003: one that expanded the Schedule I listing of synthetic tetrahydrocannabinols (“THC”) to include THC “naturally contained in a plant of the genus Cannabis (cannabis plant),” DEA, Clarification of Listing of “Tetrahydrocannabinols” in Schedule I, 68 Fed. Reg. 14,114, 14,119 (Mar. 21, 2003), and one that exempted hemp fiber, seed and oil products containing THC not intended for human consumption (e.g., for use as animal feed and cosmetic use) from control, DEA, Exemption From Control of Certain Industrial Products and Materials Derived From the Cannabis Plant, 68 Fed. Reg. 14,119 (Mar. 21, 2003). The rules together classified all naturally-occurring THC intended for human consumption as a Schedule I controlled substance.
HIA challenged the DEA final rules and, in 2004, the Court of Appeals of the Ninth Circuit found that the rules were “inconsistent with the unambiguous meaning of the CSA definitions of marijuana and THC,” and that “DEA did not use the appropriate scheduling procedures to add non-psychoactive hemp to the list of controlled substances.” Hemp Industries Ass’n v. DEA, 357 F.3d 1012, 1018 (9th Cir. 2004) (here). The Court permanently enjoined enforcement of the two rules “with respect to non-psychoactive hemp or products containing it.” 357 F.3d at 1019.
However, DEA never took any action as a result of the court’s action including not amending its listing of THC in Schedule I, maintaining the “naturally-occurring THC” provision in its regulations. 21 C.F.R. § 1308.11(d)(31). Furthermore, DEA continues to post the 2001 press release clarifying the Schedule I status of any THC product ingested by humans. At no time did DEA indicate that it would not regulate naturally occurring THC under the enjoined regulations. Thus, parties unaware of the Ninth Circuit injunction would otherwise understand hemp oil and other hemp products for ingestion by humans to be controlled substances. Also, no other circuit has decided the issue.
Until recently, DEA does not appear to have taken enforcement action under the enjoined regulation. As described in the HIA motion, in a December 2016 communication, the North Dakota Department of Agriculture (“NDDA”) advised a state-licensed farmer/producer that a planned shipment of hempseed oil out of the state would require a DEA registration, citing the federal CSA. This appears to have triggered HIA to file a motion for contempt.
The issue remains that despite the Ninth Circuit’s 2004 ruling, DEA’s position is that naturally-occurring THC for human consumption is a Schedule I controlled substance while HIA and others believe otherwise.

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