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September 03, 2020

What Is the New DEA Rule and How Is It Affecting the Hemp CBD Industry?

The DEA, also known as the Drug Enforcement Agency issued an interim rule on hemp and its derivatives. The DEA proposal confirms its regulations to the statutory changes that are already in effect. DEA interim rule also confirms that there are no new additional amendments. So, after reading the regulations proposed by the DEA, the first question that comes to everybody’s mind is why did the DEA issue an interim that merely confirms the nuances of the existing law. In layman language, the answer to this question is obvious, yet complicated.

The legal experts believe that the DEA is taking the utmost advantage of the loopholes in the Agricultural Improvement Act (The Farm Bill of 2018) to tighten the grip on the cannabis industry. You see after the law became a bill in 2018, things completely changed for the cannabis industry. According to the Farm Bill, CBD derived from hemp, and its derivatives with less than or equal to 0.3% THC are legal on the federal level. This means that you don’t need a medical marijuana recommendation in Chino Hills to get a medical cannabis card for CBD products. The only exception or as the legal experts believe discrepancy in this law is that it does not talk about hemp processing.

Ideally, legalizing would mean that now you can produce, manufacture, and transport CBD products. But there is a twisting catch in the law and the DEA issues this interim to ensure that everything complies with the Farm Bill. Unfortunately, the problem does not end here. Read on to find out more.

Potential Trouble for the Hemp Industry

The DEA within the definition of the Farm Bill i.e. only CBD derived from hemp is legal also clarifies that products containing more than 0.3% THC on a dry weight basis will stand as schedule I substance. This is another key area of trouble.

The extraction process of cannabinoid causes the levels of delta-9 THC to increase by a significant portion. As a result, this form of hemp lawfully falls under the illegal category. In fact, it doesn’t matter if you intended to dilute delta-9 THC to the legal level of 0.3% THC. As a result, the processors who dilute THC levels may fall under major risks.

However, technically this guideline does not bring the processors under the radar. It’s mainly because the Farm Bill regulates cultivation activity and the processing activities go unnoticed. The bill states that processors are not required to test hemp, but cultivators have to test their hemp for THC levels. All in all, there is ambiguity everywhere. In that state of perplexity, DEA comes in with this interim rule. The DEA will watch over the processing aspects even when it’s not a direct violation of the Farm Bill laws.

The Regulatory Gap Is Real

If you’re still wondering what is the regulatory gap, welcome to the ambiguities associated with the cannabis laws. The cannabis industry has long battled with the loopholes in the existing laws. And now that this interim rule is out, things get even more serious for hemp businesses. While it is true that CBD is legal federally, particularly hemp extracts, derivatives, and hemp cannabinoids, there is no mention of processing these legal substances. Interestingly, this is the regulatory gap we have so far been talking about.

It is relevant to understand this gap because DEA has recently issued a rule which is quite inconsistent with the Farm Bill. You see, if the DEA was consistent with the Farm Bill, processing hemp would naturally fall under the legal category. In fact, it is logical to include processing as a part of hemp legalization. On the contrary, the DEA does not take any of that into consideration.

Decoding the DEA Interim Rule

According to the new rule proposed, the DEA defines legal marijuana as cannabis that does not contain more than 0.3% THC. This also means that a product should not contain more than 0.3% delta-9 THC on a dry cannabis basis. So, in compliance with the existing Farm Bill, the DEA goes on to say that both derived and raw forms of cannabis fall under this definition. And anything that falls out of the legal limit will naturally become an uncontrolled substance. Moreover, it will lose its legal status and right for market and production. So, this is the new interim hemp law issued by the DEA.

The problem arises when the extraction process is taken into consideration. The cultivators will produce hemp, get it tested, and pass the legal status. However, these days each CBD product is engineered to meet certain medical requirements. So, it’s obvious that the plant will go under extraction. Unfortunately, such is the nature of cannabis that no matter what you do it is nearly impossible to control the isolated cannabis during extraction. Due to its simple nature, the excretion process will lead to the formation of delta-9 THC – a higher form of THC.

Enter DEA: The DEA says anything not in compliance with the Farm Bill will face legal consequences. Up till now, we have seen that every department is in complete control, except for the processing department. They extract cannabinoids and the processors will technically have access to CBD products containing higher forms of THC. To be clear, the DEA is not only saying that delta-9 THC is illegal. It is also saying that products rich in Delta-9 THC (hemp-derived) no longer fall under the category of uncontrolled substances. 

Processing CBD Is Not a Violation of the CSA

The main argument that remains: The Farm Bill does not say that processing hemp extracts is a violation. It is nearly equal to following the intent of the law. In other words, everything that is associated with hemp. From extraction to processing, manufacturing and sale should be legal. So, why hasn’t the DEA considered this factor? Well, the answer to this question can vary on different parameters.

The important thing here is that the DEA rule impacts the hemp businesses on a large scale. Not only this, but the DEA rule will also cause trouble for the new growing delta-8 THC market. You can analyze the DEAs stance and let us know in the comment section below what you think about this move. We are sure for some it is a deliberate act while for others a nefarious move to tighten the loosened grip over the cannabis industry.

Regardless, everything boils down to the risk posed by this law. Each and every business that deals in processing will face real criminal danger. As of now, the rule is open for discussion and effective until further amendments. As a cannabis user, manufacturer, cultivator, processor, or getting a medical marijuana recommendation in Chino Hills, you should understand the DEA rule. It will help you be aware of the future risks. In the light of cannabis law education, you can also learn how to navigate through uncharted waters. After all, nobody wants that they should be arrested for processing or possessing something that is already legal on the federal level.

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