The Legality of Hemp
It is not uncommon for people to confuse hemp and marijuana. While both come from the cannabis sativa plant, the legal classification of each under United States federal law differs. Hemp and hemp-derived products do not fall under the definition of marijuana provided under the Federal Controlled Substances Act (CSA) and the majority of state law. The following parts of the cannabis plant are explicitly excluded from the definition of marijuana under United States federal law:
“the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.”
Hemp, which consists of the “mature stalks” of the cannabis plant, is clearly exempted from the definition of marijuana.
Courts have further clarified that hemp-based products containing little to no tetrahydrocannabinol (THC) can be lawfully sold as conventional foods or dietary supplements throughout the United States. Through multiple invalid rulemakings, the federal Drug Enforcement Administration (DEA) has previously attempted to prohibit the sale of all products intended for human consumption containing naturally-occurring cannabinoids – including hemp-based products. In the case Hemp Industries Association, et al, v. Drug Enforcement Administration (“HIA v. DEA”), the Ninth Circuit Court of Appeals held that:
“[t]he DEA’s Final Rules are inconsistent with the unambiguous meaning of the CSA definitions of marijuana and THC, and the DEA did not use the appropriate scheduling procedures to add non-psychoactive hemp to the list of controlled substances.”
The distribution of cannabidiol (CBD) derived from imported hemp is lawful in the majority of states.*** Although CBD is a component part of cannabis, which is prohibited as a Schedule I drug under the Controlled Substances Act (“CSA”), there are several exceptions to the prohibition on cannabis that allow for the sale of hemp products in general and CBD products in particular. It follows that regulators have no authority over CBD hemp-based products under the CSA and most state laws unless and until formal scheduling procedures have been followed to add CBD to the list of controlled substances.
On March 14, 2017, the DEA again attempted to prohibit products containing CBD extracts by claiming that they are “marijuana” within the meaning of CSA, and are expressly prohibited under New Drug Code Section 7350. However, the protection of hemp-based products carved out by the court in HIA v. DEA extends to hemp-based CBD products. CBD that is extracted from the stalks and/or seeds of legally sourced and lawfully imported hemp clearly falls outside of the scope of the CSA. CBD is a non-intoxicating cannabinoid, which naturally occurs within the hemp plant. Furthermore, CBD is not separately enumerated under the CSA. Accordingly, the DEA has since acknowledged that CBD extracts sourced from excepted parts of the cannabis plant – such as hemp – would not fall within the purview of the recent rulemaking. Therefore, hemp-derived CBD products are outside of the unambiguous statutory definition of marijuana under United States federal law, and can be distributed and sold like any other food or dietary supplement.
Obtaining Hemp and Hemp Products
The hemp plant and its derivatives can be lawfully imported into the United States, or domestically grown pursuant to the United States Farm Bill.
Once lawfully imported hemp is in the United States, it is possible that CBD extracts derived from the lawful portions of the plant may contain trace amounts of THC. If the CBD extract contains no THC, the federal government has no authority over the product since the federal government has not regulated CBD. However, whether or not CBD extracts with THC can be sold in a particular state depends on individual state laws regarding THC levels. It is important to note that there are some states that prohibit hemp and hemp products altogether, even if there is no THC present.
The Farm Bill of 2014 presented a significant change to federal hemp policies, as it authorized institutions of higher education or state departments of agriculture to cultivate industrial hemp if: “cultivated for purposes of research under an agricultural pilot program or other agricultural or academic research, and allowed under the laws of the state in which the institution or department is located and the research occurs.”
Section 7606 left open many questions regarding the circumstances under which the sale of industrial hemp products are permissible. Due to confusion caused by Section 7606, the United States Department of Agriculture (USDA), United States Drug Enforcement Administration (DEA), and the United States Food and Drug Administration (FDA) issued a statement of principles to clarify to the public how Federal law applies to activities involving industrial hemp. One such clarification provides that “industrial hemp may be grown pursuant to a pilot program for purposes of marketing research by institutions of higher education or State departments of agriculture (including distribution of marketing materials), but not for the purpose of general commercial activity.” It is important to note that these statements “do not establish any binding legal requirement”; rather they merely provide guidance on the cultivation and sale of industrial hemp in the United States because the Farm Bill does not specifically discuss the issue of commercial activity. Thus, the government’s position is that industrial hemp cannot be grown for commercial purposes.
Despite the government’s position on industrial hemp grown for commercial purposes, the Consolidated Appropriations Act of 2017 prohibits federal agencies from expending federally appropriated monies to interfere with or otherwise frustrate intrastate or interstate distribution of the Domestic Products grown in accordance with the Farm Bill. As long as this provision is renewed annually, the federal government will not have funds to interfere with the cultivation and sale of industrial hemp that is grown and distributed pursuant to the Farm Bill. While the Consolidated Appropriations Act of 2017 may protect businesses from federal prosecution, it does not unequivocally legalize interstate sales of hemp products for commercial purposes.
Contact Us For More Information
The laws related to Hemp and CBD are complex and in a state of flux. It is extremely important for anyone involved in cultivation, manufacture, or distribution of Hemp and CBD products to consult with an attorney who is experienced in this area of the law. The Law Offices of Michael E. Cindrich APC has been representing some of the largest manufacturers and distributors of Hemp/CBD products for years, and our attorneys have the knowledge necessary to advise clients on the wide array of issues that may arise. Contact us today to schedule a consultation.
***The legal analysis and opinions included herein are part of our professional judgement, but are not a guaranty of an outcome or result. Please do not accept this information as legal advice. The federal agencies referenced would likely contest our interpretations, and may seek enforcement against individuals and organizations engaged in these activities. We cannot provide clear guidance on these issues until there is clarification from the courts or the legislature. For legal advice, please contact our firm to establish a formal agreement***
 21 USC § 802(16)
 Hemp Industries Association v. DEA, 357 F.3d 1012 (9th Cir. 2004).
 See 7 USC § 7606.
 7 USC § 7606(b)(2).
 Statement of Principles on Industrial Hemp, https://www.federalregister.gov/documents/2016/08/12/2016-19146/statement-of-principles-on-industrial-hemp.
 Consolidated Appropriations Act of 2017, § 773(1)-(2).