When the U.S. Drug Enforcement Agency (DEA) proposed its interim final rule on hemp and its derivatives Aug. 21, the agency said the rule “merely conforms DEA's regulations to the statutory amendments to the [Controlled Substances Act] that have already taken effect, and it does not add additional requirements to the regulations.”
But legal experts say the DEA may be taking advantage of ambiguity in the Agriculture Improvement Act of 2018 (the 2018 Farm Bill) to preserve its loosening grip on cannabis.
The DEA’s proposed interim final rule primarily amends definitions to tetrahydrocannabinol (THC), cannabidiol (CBD) and marijuana to comply with the 2018 Farm Bill, which legalized hemp production.
Within those definitions, the DEA states that any material containing more than 0.3% THC on a dry-weight basis is still classified as a Schedule I substance. This is a key area of potential trouble for the hemp industry.
The cannabinoid extraction process can temporarily result in increased delta-9 THC levels, explains Daniel Shortt, an attorney with Harris Bricken. Therefore, this “intermediary hemp” material may still be considered a Schedule I substance, even if the processor had intended to dilute its delta-9 THC to legal levels by the time of sale.
“The way that this rule is written, there is a serious problem for processors who may have a delta-9 THC byproduct that never was intended for sale,” Shortt tells Hemp Grower. “With the way these rules are written, I think those people are now at risk.”
This does still technically adhere to the 2018 Farm Bill, Shortt explains. That’s because the farm bill does not regulate hemp processing at all—only hemp cultivation. Under the 2018 Farm Bill, processors are not required to test hemp for THC levels.
“In that ambiguity, the DEA is setting itself up to essentially crack down on processing,” Shortt says. “It’s not as if that’s a direct [violation] of the 2018 Farm Bill. It’s just in the ambiguity, they’re sort of leaning into this culture of the war on drugs.”
Implications for Delta-8 THC
While the rule poses potential issues for all processors dealing with cannabinoid extraction, Nathalie Bougenies, also an attorney with Harris Bricken, points out the rule may create issues with delta-8 THC processing in particular.
The DEA’s proposed rule also addresses the legality of “synthetically derived tetrahydrocannabinols.” Because neither the rule nor federal law explicitly define “synthetic,” Bougenies deduces in a blog post that the agency is referring to the dictionary definition of the word, which is “relating to, or produced by chemical or biochemical synthesis,” according to the Merriam-Webster Online Dictionary.
Delta-8 THC is typically found in small concentrations naturally, but it can also be converted from CBD, which some hemp processors do to make it economically feasible to market, Shortt explains.
Since delta-8 THC is often derived synthetically, Bougenies and Shortt say it’s feasible the DEA may crack down on its production as well.
“Because it has to go through this round of processing, it’s possible the DEA could assert it is, in fact, a controlled substance, because it’s essentially an analogue to delta-9 THC,” Shortt says.
In an email to its members, however, the National Hemp Association (NHA) said that while synthetically produced cannabinoids are mentioned, delta-8 THC is not explicitly mentioned at all—a fact that some may interpret as a go-ahead to continue marketing delta-8 THC products.
Industry Reactions and a Silver Lining
How these regulations will play out in enforcement remains to be seen. Members of the public have until Oct. 20 to comment on the proposed regulations.
The NHA said in its email to members that while the proposed regulations are “not perfect,” the organization ultimately sees them as “a good step that further removes the DEA from the hemp industry.”
In addressing whether the industry should be concerned, the NHA told its members, “the short answer is no.”
“While this is broadly consistent with the language of [the 2018 Farm Bill], it is the first time that the DEA comes out and specifically says that an intermediary product such as crude oil extract that is over 0.3% [THC] is a Schedule I substance—even if it will subsequently be diluted in the final product. So moving/selling those materials across state lines remains ambiguous and problematic,” the NHA said in the email to its members. “This is an issue that we will continue to work to rectify and will include in our public comments.”
Attorneys at Harris Bricken, however, see the loophole as a potentially major issue for processors. “If you’re in the hemp derivative business, trust the DEA at your own peril,” Shortt warns in a blog post.
In the email to its members, the NHA did point out a potential silver lining in the fact that the word “decarboxylation” does not appear in the DEA’s rule, concluding it may “provide some needed breathing space for the smokable flower market.”
“This will be even more beneficial as we work to relax the sampling protocols [the U.S. Department of Agriculture] uses to determine compliance by encouraging them to allow samples to be a whole plant composite and not just the top most potent portions of the flowers, and to push out the 15-day harvest window that USDA currently requires,” the NHA said in its email. “Even with the 15-day harvest window, it is possible that flowers may slightly exceed legal limits after compliance testing but before harvest, so this delta-9 THC-only definition is welcome relief of that concern. It should also pave the way for USDA to consider alternative remediation methods for 'hot crops' other than destruction.”
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