Scientists have successfully forced the Drug Enforcement Administration (DEA) to release an internal document that was allegedly used to justify delaying the approval of additional marijuana manufacturers for research purposes. And it reveals that the Justice Department feels that the current licensing structure for cannabis cultivation has been in violation of international treaties for decades.
The Scottsdale Research Institute (SRI), which is one of several applicants seeking federal authorization to cultivate cannabis for studies, filed a lawsuit under the Freedom of Information Act (FOIA) last month, claiming that DEA had relied on a “secret” memorandum interpreting international drug treaties to avoid accepting more manufacturers.
On Tuesday, the parties reached a settlement in the case. And DEA released the Department of Justice Office of Legal Counsel (OLC) document on Wednesday, as part of the agreement.
The June 2018 memo—titled “Licensing Marijuana Cultivation in Compliance with the Single Convention on Narcotic Drugs”—was published, unredacted, on the Justice Department’s site.
“The parties acknowledge that this Settlement Agreement is entered into solely for the purpose of settling and compromising the claims in this action without further litigation, and it shall not be construed as evidence or as an admission regarding any issues of law or fact, or regarding the truth or validity of any allegation or claim raised in this action, or as evidence or as an admission by Defendants regarding Plaintiff’s entitlement to any relief (including attorneys’ fees or other litigation costs) under the Freedom of Information Act,” the text of the filing in the U.S. District Court for the District of Arizona states.
The document largely confirms what the scientists had suspected. They argued that, following a DEA announcement in the waning months of the Obama administration in 2016 that it would approve additional marijuana manufacturers, the Trump administration’s OLC secretly issued the 2018 internal government opinion that interprets international treaty obligations as making it impossible to fulfill that pledge.
OLC determined in the memo that the international Single Convention treaty requires just one federal agency to have sole control over the purchasing and possession of cannabis cultivated for research purposes. And because two agencies—DEA and the National Institute on Drug Abuse (NIDA)—currently have roles in this process, it’s in violation of that treaty obligation.
In order to resolve that issue and allow additional cultivators, OLC said DEA needed to issue a revised new rule to be in compliance with treaties.
“We conclude that DEA must change its current practices and the policy it announced in 2016 to comply with the Single Convention,” the memo states. “DEA must adopt a framework in which it purchases and takes possession of the entire marijuana crop of each licensee after the crop is harvested. In addition, DEA must generally monopolize the import, export, wholesale trade, and stock maintenance of lawfully grown marijuana.”
“There may well be more than one way to satisfy those obligations under the Single Convention, but the federal government may not license the cultivation of marijuana without complying with the minimum requirements of that agreement,” the Justice Department said.
“Under the CSA, DEA may register an applicant to cultivate marijuana only if the registration scheme is consistent with the Single Convention.”
Further, it explained that while the government assumed it was complying with international treaties by having NIDA regulate a single cannabis cultivation facility for research purposes while DEA has been responsible for registering scientists authorized to utilize such products, that isn’t necessarily the case—for three reasons.
“We conclude that the existing licensing framework departs from Article 23 [under the Single Convention] in three respects. First, the division of responsibilities between DEA and NIDA, a component of the Department of Health and Human Services (‘HHS’), contravenes Article 23(2)’s requirement that all Article 23 functions be carried out by a single government agency. Second, neither of the two government agencies ‘take[s] physical possession’ of the marijuana grown by the National Center, as required by Article 23(2)(d). Third, no federal agency exercises a monopoly over the wholesale trade in marijuana, as required by Article 23(2)(e).”
NIDA, which operates under the U.S. Department of Health and Human Services, is not overseen by DEA, raising problems with the single-agency requirement for marijuana licensing, the memo contends. The Justice Department also concluded the situation couldn’t be resolved administratively, as the president “may not delegate to DEA his constitutional authority to supervise NIDA in the exercise of its statutory responsibilities.”
The memo also notes that under the current licensing scheme, neither DEA or NIDA physically take possession of marijuana grown by the contracted third-party, the University of Mississippi facility. Instead, it’s delivered directly to DEA-registered researchers—another violation of international treaties.
“The contract at most results in a federal government agency’s having constructive, rather than physical, possession of the marijuana crop,” OLC said. “We think it evident from the treaty’s text and context that ‘physical possession’ requires growers licensed under the CSA to transfer the crops to the physical, and not merely legal, control of the federal government.”
The university manufacturer—known as the National Center—is “not an extension of the federal government,” the memo continues. What’s more, DEA “certainly does not have title to the crops” grown there.”
“Even if NIDA had formal legal title to the crops, the current arrangement would still have to be adjusted to comply with the treaty’s requirement that a single government agency be charged with licensing cultivators, purchasing, and physically possessing the crops… The government agency responsible for the relevant controls must own the crops and be the sole distributor of the marijuana. In allowing the National Center to maintain possession of the marijuana and ship it to DEA-approved researchers, the NIDA contract does not create the required government monopoly over the lawful marijuana trade.”
OLC noted that several other countries—Canada, the United Kingdom and Israel—are similarly violating the Single Convention mandates.
“While DEA focuses on its view of the broader purposes of the treaty’s requirements, the Single Convention requires the United States to adopt specific, listed controls if it licenses cannabis cultivation,” the memo reiterates. “A single government agency must purchase and take physical possession of harvested cannabis, and generally monopolize the wholesale trade in that plant. The United States cannot satisfy those requirements simply by employing alternatives that the government believes may prevent unlawful diversion.”
“We conclude that DEA must alter the marijuana licensing framework to comply with the Single Convention.”
The agency concluded that it sees “no reason why the NIDA contract framework might not remain in place under a system in which DEA assumes clear title to the marijuana, either at inception or by purchase after harvest, and then takes physical possession after harvest.” And DEA could, theoretically, “station one or more employees at the National Center after cultivation as a way of ensuring physical possession of the marijuana and exclusive control over its distribution.”
It was previously reported that the Justice Department, under then-Attorney General Jeff Sessions, a vociferous opponent of cannabis reform, blocked DEA from processing any of the several dozen cultivation license applications it received in response to the 2016 announcement. Attorney General William Barr has taken a different tone, however, telling lawmakers that he’s pushed “very hard” to get more manufacturers approved and that he thinks “it’s very important to get those additional suppliers.”
The reason all of this matters to researchers and advocates is because of issues resulting from the monopolized cannabis supply for research purposes at the University of Mississippi. And studies have indicated that the marijuana it produces is not reflective of the cannabis sold in retail dispensaries in legal states, raising questions about the veracity of previous studies that have relied on it.
Three years after DEA announced it would begin approving more manufacturers, applicants didn’t hear anything back, and SRI filed an initial lawsuit alleging that the agency was deliberately holding up the process. A court mandated that it take steps to make good on its promise, and that case was dropped after DEA provided a status update.
Last month, DEA did unveil a revised proposal that contained changes the agency said were necessary due to the high volume of applicants and to address potential complications related to international treaties. A public comment period is now open, after which point the agency says it will finally approve an unspecified number of additional growers.
That was a step in the right direction as far as advocates are concerned, but the proposed rule neglected to provide information about how the Justice Department advised DEA on the matter and which parts of the amended proposal would make expanding cannabis cultivators compliant with international treaties.
SRI argued in its latest lawsuit that DEA had violated federal statutes that prohibit the creation of “secret law.” Federal agencies must make records—including final opinions and policy interpretations not published in the Federal Register—public, the case maintained.
Now that the Justice Department memo has been publicly released as a result of the FOIA lawsuit, the newly revised rule makes contextual sense, with DEA proposing that it will maintain authority over the purchasing and possession of research-grade marijuana as required under international treaties. As such, the rule seems to resolve OLC’s concerns.
Read the OLC memo below:
Read the DEA marijuana FOIA settlement and related documents below:
This story has been updated to include the newly disclosed OLC memo.
Photo courtesy of Mike Latimer.
DEA’s Hemp Rule On THC Content Misinterprets Congressional Intent, Senators Say
A pair of senators representing Oregon sent a letter to the Drug Enforcement Administration (DEA) on Thursday to demand changes to the agency’s proposed hemp regulations.
This is the second congressional request DEA has received on the subject this week, with a group of nine House members similarly imploring a revision of a rule concerning hemp extractions on Tuesday.
DEA released an interim final rule (IFR) for the crop in August, and it said the regulations were simply meant to comply with the 2018 Farm Bill that legalized hemp and its derivatives. But stakeholders and advocates have expressed serious concerns about certain proposals, arguing that they could put processors at risk of violating federal law and hamper the industry’s growth.
Sens. Ron Wyden (D-OR) and Jeff Merkley (D-OR) said in the new letter that despite DEA’s claim that its IFR is only about compliance, the proposal “does significantly more.”
“The IFR treats hemp as a Schedule I controlled substance at any point its THC content exceeds 0.3% THC,” they said. “However, when Congress passed the 2018 Farm Bill, we understood that intermediate stages of hemp processing can cause hemp extracts to temporarily exceed 0.3% THC, which is why we defined hemp based on its delta-9 THC level.”
“In effect, the IFR criminalizes the intermediate steps of hemp processing, which is wholly inconsistent with Congress’s clearly stated purpose and the text of the 2018 Farm Bill,” the letter states.
In other words, while Congress intended to legalize hemp extracts, businesses that produce the materials could find themselves inadvertently breaking the law and be subject to enforcement action if THC levels temporarily increase beyond 0.3 percent.
A public comment period on DEA’s proposed rules closed on Tuesday. It saw more than 3,300 submissions, many of which focused on issues with the “work in progress” hemp THC issue.
Another issue identified by more than 1,000 commenters concerns delta-8 THC. The most widely known cannabinoid is delta-9 THC, the main component responsible for creating an intoxicating effect, but delta-8 THC from hemp is also psychoactive and is an object of growing interest within the market.
Because DEA’s proposed regulations state that all “synthetically derived tetrahydrocannabinols remain schedule I controlled substances,” some feel that would directly impact the burgeoning cannabinoid, as its converted from CBD through the use of a catalyst—and that could be interpreted as a synthetic production process.
In any case, it’s not clear whether DEA deliberately crafted either of these rules with the intent of criminalizing certain hemp producers—but stakeholders and advocates aren’t taking any chances.
The U.S. Department of Agriculture (USDA) has faced separate criticism over its own proposed hemp rules, though it has been more proactive in addressing them. Following significant pushback from the industry over certain regulations it views as excessively restrictive, the agency reopened a public comment period, which also closed this month.
USDA is also planning to distribute a national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the market.
Read the letter from Wyden and Merkley on DEA’s hemp proposal below:
Photo courtesy of Brendan Cleak.
USDA Releases, Then Rescinds, Hemp Loan Notice Following Congressional Action
The U.S. Department of Agriculture (USDA) recently released—and then promptly rescinded—a notice on providing federal loans for hemp processors.
After the crop was federally legalized under the 2018 Farm Bill, USDA announced that regulations were being developed to offer direct and guaranteed loans to the industry. The federal agency unveiled those guidelines in April and then issued a new notice this month notifying applicants about the policy change ahead of the planned expiration of the earlier 2014 hemp pilot program.
The next day, however, it posted an “obsoleting notice” invalidating the prior document.
The new guidance “was developed with the understanding that operators would no longer be authorized to produce hemp under the 2014 Farm Bill Pilot Program,” USDA said. However, because Congress approved a continuing resolution that extends the program until September 30, 2021, the loan policies are not currently applicable.
That pilot program extension came at the behest of numerous stakeholders, advocates and lawmakers who have been pushing USDA to make a series of changes to its proposed hemp regulations. As those rules are being reviewed and finalized, they said it was necessary to keep the 2014 program in place.
The president signed the continuing resolution late last month, so it’s not clear why the notice on loan policy changes was released weeks later, which then necessitated a follow-up recision. But in any case, it’s another example of the fluidity and challenges of rulemaking for the non-intoxicating cannabis crop following its legalization.
It stands to reason that the loan processes outlined in the now-invalid notice will likely be consistent with what’s ultimately released next year, assuming the pilot program does expire then.
The primary rule change concerns licensing requirements for borrowers. After the 2014 regulations are no longer in effect, hemp loan applicants must be licensed under a USDA-approved state or tribal hemp program, or under the agency’s basic regulations if the jurisdiction the business operates in has not submitted its own rules.
Borrowers who are not licensed to grow hemp will be considered in non-monetary default and any losses will not be covered. For direct and guaranteed loans, hemp businesses must have a contract with USDA’s Farm Service Agency laying out termination policies and their ability to repay the loans.
As of this month, USDA has approved a total of 69 state and tribal hemp regulatory proposals—mostly recently for Illinois, Indiana, Michigan, New Mexico, Oklahoma and South Dakota. Illinois and Oklahoma were among a group of states that USDA had asked to revise and resubmit their initial proposals in August.
While the agency released an interim final rule for a domestic hemp production program last year, industry stakeholders and lawmakers have expressed concerns about certain policies it views as excessively restrictive.
USDA closed an extended public comment period on its proposed hemp regulations earlier this month. Its initial round saw more than 4,600 submissions, but it said last month that it was reopening the feedback period in response to intense pushback from stakeholders on its original proposal.
The federal Small Business Administration (SBA) said last month that the new 30-day comment window is too short and asked USDA to push it back, and it also issued a series of recommended changes to the interim final rule on hemp, which it says threaten to “stifle” the industry and benefit big firms over smaller companies.
All told, it appears that USDA is taking seriously the feedback it’s received and may be willing to make certain accommodations on these particular policies. The department’s rule for hemp is set to take effect on October 31, 2021.
In July, two senators representing Oregon sent a letter to Perdue, expressing concern that hemp testing requirements that were temporarily lifted will be reinstated in the agency’s final rule. They made a series of requests for policy changes.
Senate Minority Leader Chuck Schumer (D-NY) wrote to Perdue in August, asking that USDA delay issuing final regulations for the crop until 2022 and allow states to continue operating under the 2014 pilot program in the meantime.
Sen. Cory Gardner (R-CO) also called on USDA to delay the implementation of proposed hemp rules, citing concerns about certain restrictive policies the federal agency has put forward in the interim proposal.
The senators weren’t alone in requesting an extension of the 2014 pilot program that was ultimately enacted legislatively, as state agriculture departments and a major hemp industry group made a similar request to both Congress and USDA in August.
Amid the coronavirus pandemic, hemp industry associations pushed for farmers to be able to access to certain COVID-19 relief loans—a request that Congress granted in the most recent round of coronavirus legislation.
While USDA previously said that hemp farmers are specifically ineligible for its Coronavirus Food Assistance Program, that decision was reversed last month. While the department initially said it would not even reevaluate the crop’s eligibility based on new evidence, it removed that language shortly after Marijuana Moment reported on the exclusion.
Meanwhile, USDA announced last week that it is planning to distribute a national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the industry.
Photo courtesy of Pixabay.
New York Will Legalize Marijuana ‘Soon’ To Aid Economic Recovery From COVID, Governor Cuomo Says
New York Gov. Andrew Cuomo (D) recently said that legalizing marijuana represents a key way the state can recover economically from the coronavirus pandemic.
During a virtual event last week to promote his new book on the state’s COVID-19 response, the governor was asked when New York will legalize cannabis for adult use.
“Soon, because now we need the money,” he said, according to a recording that was obtained by USA Today Network. “I’ve tried to get it done the last couple years.”
“There are a lot of reasons to get it done, but one of the benefits is it also brings in revenue, and all states—but especially this state—we need revenue and we’re going to be searching the cupboards for revenue,” he said in remarks that will be released in full in a podcast in the coming weeks by Sixth & I, which hosted the event. “And I think that is going to put marijuana over the top.”
Cuomo has included legalization in his last two budget proposals, but negotiations between his office and the legislature fell through both times, with sticking points such as how cannabis tax revenue will be allocated preventing a deal from being reached.
A top adviser of his said earlier this month that the plan is to try again to legalize cannabis in New York in early 2021.
“We’re working on this. We’re going to reintroduce this in our budget in January,” he said. “We think we can get it done by April 1.”
Cuomo was similarly asked about legalization as a means to offset the budget deficit caused by the pandemic in May.
While he said it’s the federal government’s “obligation as part of managing this national pandemic that they provide financial relief to state and local governments,” he added that “I support legalization of marijuana passage. I’ve worked very hard to pass it.”
“I believe we will, but we didn’t get it done this last session because it’s a complicated issue and it has to be done in a comprehensive way,” he said.
Cuomo indicated in April that he thought the legislative session was “effectively over” for the year and raised doubts that lawmakers could pass cannabis reform vote remotely via video conferencing amid social distancing measures.
Assembly Majority Leader Crystal Peoples-Stokes (D) made similar comments when asked about the policy in April, though she seemed to signal that she laid partial blame for the failure to enact reform on the governor prioritizing other issues during the pandemic.
In June, a senator said the legislature should include cannabis legalization in a criminal justice reform package, making the case that the policy change is a necessary step especially amid debates over policing reform. That didn’t come to pass, however.
The New York State Association of Counties said in a report released last month that legalizing marijuana for adult use “will provide the state and counties with resources for public health education and technical assistance” to combat the pandemic.
Meanwhile, the state Senate has approved several modest marijuana reform bills in recent months.
The chamber passed a bill in July that broadens the pool of people eligible to have their low-level marijuana convictions automatically expunged. That was preceded by a Senate vote in favor of legislation to prevent tenants from being evicted solely because of their legal use of medical marijuana.
Thanks to a bill expanding cannabis decriminalization in the state that the governor signed last year, the New York State Unified Court System made an announcement last month outlining steps that people can take to clear their records for prior marijuana convictions.
Locally, a local law enacted in New York City this summer bans pre-employment drug testing for marijuana for most positions. It was finalized in July following regulators’ approval of certain exemptions.
Photo courtesy of WeedPornDaily.