Officials with the U.S. Drug Enforcement Administration (DEA) aren’t allowed to mess with businesses that sell certain cannabis products, the agency clarified to personnel in an internal directive on Tuesday.
However, the directive went on to assert the continuing validity of an earlier Federal Register notice that claimed cannabis extracts—including products that “contain only one cannabinoid” such as cannabidiol (CBD)—fall under Schedule I and are thus banned.
The new directive issued this week states: “Products and materials that are made from the cannabis plant and which fall outside the [Controlled Substances Act] definition of marijuana (such as sterilized seeds, oil or cake made from the seeds, and mature stalks) are not controlled under the CSA” and, thus, “[s]uch products may accordingly be sold and otherwise distributed throughout the United States without restriction under the CSA or its implementing regulations.”
“The mere presence of cannabinoids is not itself dispositive as to whether a substance is within the scope of the CSA; the dispositive question is whether the substance falls within the CSA definition of marijuana.”
Yet the agency also maintained the legitimacy of its recently clarified ban on cannabinoids, including CBD—whether its extracted from marijuana or hemp.
The DEA said it decided to issue the directive “[i]n response to various inquiries.” It seems people have had some questions about the agency’s seemingly contradictory positions.
The legal confusion over the DEA’s enforcement authority on hemp goes back to a 2004 Ninth Circuit Court ruling. In essence, the court sided with the Hemp Industries Association that the DEA had overreached its authority with respect to hemp products. Even though hemp may contain trace amounts of THC, hemp products are not included in the CSA—and, therefore, the agency is not permitted to regulate the industrial crop, the court ruled.
The DEA acknowledged as much in its new directive.
Eric Steenstra, president of the advocacy group Vote Hemp, told Marijuana Moment in an email that this concession was “the result of a negotiated settlement with the Hemp Industries Association.”
The fact that the DEA is insisting CBD and other cannabinoids remain illegal, no matter the source, gets into another contradictory policy matter: the 2014 Farm Bill.
While the DEA’s New Drug Code rule with respect to cannabis extracts was upheld in a different Ninth Circuit Court ruling last month, the agricultural law lets states authorize the growing of hemp containing trace amounts of THC under pilot programs. Further, the court determined that the Farm Bill’s hemp provision “preempts” the CSA.
As cannabis attorney Daniel Shortt wrote in a recent blog post, the court stated “that when the Industrial Hemp portions of the Farm Bill conflict with the CSA, the Farm Bill prevails.”
There’s been significant debate and confusion over the accurate interpretation of the DEA’s policy with regard to CBD and hemp. The DEA, for its part, seems to acknowledge that in its new directive.
The most promising prospect of clarification or reform on the issue could come from a bill introduced by Senate Majority Leader Mitch McConnell (R-KY), who is calling on the federal government to remove hemp from the list of federally banned substances. He has already announced plans to insert hemp legalization language into this year’s version of the Farm Bill.
For now, DEA says that hemp products can be legally imported into and exported out of the U.S., even if current law doesn’t allow for legal hemp cultivation by American farmers.
“[A]ny product that the U.S. Customs and Border Protection determines to be made from the cannabis plant but which falls outside the CSA definition of marijuana may be imported into the United States without restriction under the Controlled Substances Import and Export Act,” the new notice reads. “The same considerations apply to exports of such products from the United States, provided further that it is lawful to import such products under the laws of the country of destination.”
Photo courtesy of Chris Wallis // Side Pocket Images.
Trade Associations And Civil Rights Groups Send Mixed Messages On Marijuana Banking To Senate
A coalition of trade associations sent a letter to Senate Banking Committee leadership on Thursday, urging a vote on legislation to protect financial institutions that service state-legal marijuana businesses.
But those senators are also feeling pressure from leading civil rights groups like the ACLU and Human Rights Watch, which sent an earlier letter insisting that they not allow cannabis banking to detract from more comprehensive reform that addresses social equity.
The organizations involved in the latest letter—including the American Bankers Association and Credit Union National Association—said that advancing the Secure and Fair Enforcement (SAFE) Banking Act or similar legislation is pivotal to ensuring that stakeholders receive needed clarity and are shielded from being penalized by federal regulators.
The letter, addressed to Banking Chair Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH), emphasized the bipartisan nature of the House passage of the bill in September and the growing movement at the state level to legalize cannabis for medical or recreational purposes.
“Our organizations support an initial legislative step that allows the legal cannabis industry into the banking system,” the groups, which also include the Council of Insurance Agents and Brokers, International Council of Shopping Centers and National Association of REALTORS, wrote. “Ultimately, protecting law-abiding financial institutions and ancillary businesses from their currently untenable position and addressing increasing public safety concerns.”
As more states reform their marijuana laws, however, “distribution, sale, possession, research, transaction, housing, employment, and a broader landscape of cannabis is becoming increasingly problematic” for stakeholders under federal prohibition.
“Ultimately, this creates more legal and security concerns that impact the operations and safety of businesses and consumers,” they said. “Finally, the lack of an available safe harbor for cannabis will continue to challenge the full adoption and deployment of the legal hemp and CBD products market in the U.S. due to the inextricable link between hemp and cannabis.”
“To resolve this, we urge the Committee to vote on the SAFE Banking Act or similar measures. Such measures are meant to create a safe harbor for depository institutions that provide a financial product or service to businesses in a state permitting the use of cannabis. A safe harbor will enable law enforcement and states to effectively monitor and regulate businesses while simultaneously bringing billions into the regulated banking sector.”
12 groups including ABA just wrote @MikeCrapo @SenSherrodBrown @senatemajldr @SenSchumer urging a vote on the #SAFEBanking Act. It's time to end the legal limbo over banking cannabis in the growing number of states where it's legal. Read the letter: https://t.co/1529vIHawq
— American Bankers Association (@ABABankers) December 12, 2019
The letter, also signed by Americans for Prosperity and R Street, recognizes that creating a federal regulatory scheme for marijuana will take time but says that the SAFE Banking Act represents “a critical first step to ensure that legal cannabis marketplaces are safe, legal, and transparent.”
Crapo has said that he’s interested in holding a vote on resolving the cannabis banking issue in his panel before the year’s end, but so far nothing has been scheduled. The chairman told Marijuana Moment in earlier interviews that there are several changes to the House-passed bill that he’d like to see but that he’s worried impeachment proceedings against the president will interfere with plans to hold a vote.
All that said, pressure from civil rights advocacy groups could complicate congressional efforts to get the banking bill approved. In October, several organizations including the ACLU, Drug Policy Alliance, Human Rights Watch and Center for American Progress sent a letter to Senate leadership, as well as Crapo and Brown, demanding that “marijuana legislation considered in the Senate include provisions that will guarantee equity in the industry.”
The letter, which doesn’t appear to have been previously reported and was obtained by Marijuana Moment, states that while the coalition agrees the SAFE Banking Act “is an incremental step toward rolling back the federal prohibition of marijuana, it fails to help communities that have been historically and disproportionately devastated by United States’ punitive drug laws.”
“As the Senate Committee on Banking, Housing, and Urban Affairs considers similar legislation, we insist that the legislation include provisions that ensure equity in the marijuana industry by creating opportunities for individuals who have been prohibited from this growing business either by legal or financial means,” the letter, which was also signed by the Immigrant Legal Resource Center, Leadership Conference on Civil and Human Rights and National Association of Social Workers, states.
“Indeed, this Congress has shown it understands the economic impact of legalization. But while progress on the business side of legalization is promising, it is not sufficient. Federal marijuana legislation must be comprehensive and lead with equity, addressing past and current harms to communities of color and low-income communities who bore the brunt of the failed war on drugs. We demand that any marijuana reform or legalization bill considered by the Senate] include robust provisions addressing equity. More than simply adding equity provisions to bills that address industry concerns, we need comprehensive reform that deschedules marijuana and addresses the inequities and harms continually inflicted by the failed war on drugs.”
In other words, the groups are insisting on broad reform prior to a vote on a bill viewed as largely beneficial to the cannabis industry—similar to a request they made of House members prior to the legislation’s passage in the chamber.
Read the marijuana banking letters from the trade associations and civil rights groups below:
GOP Congressman Knocks His Party For Failing To Pass Marijuana Reform
A Republican congressman says that whichever party is responsible for passing federal marijuana reform will “instantly” shoot up in the polls, while lamenting the fact that the GOP failed to do so when they controlled the House.
Rep. Thomas Massie (R-KY), a vocal advocate for hemp, was asked by Fox Business host Kennedy on Wednesday whether cannabis should be rescheduled under federal law.
“Absolutely,” he said. “The first party that does this—and I don’t understand why either party won’t do it—is going instantly gain 10 points in the general poll on which party versus the other.”
“We should have done it when we were in the majority,” he added. “The liberals should be asking Pelosi why she hasn’t put it on the floor yet.”
The House Judiciary Committee approved legislation last month to end federal marijuana prohibition, but it hasn’t yet been scheduled for floor action.
Massie made similar points during an interview with Marijuana Moment earlier this year, stating that if Republicans had advanced states’ rights-focused marijuana legislation, “I think we might still be in the majority.”
Of course, while Massie has supported legislation to allow states to set their own cannabis policies without federal intervention, as well as other more modest reform measures such as protecting banks that service marijuana businesses, he’s so far declined to cosponsor any bills that seek to deschedule cannabis.
The congressman has also expressed interest in changing federal gun control laws to allow cannabis consumers to purchase firearms.
Though it’s not clear exactly how much of a boost either party would get by passing a marijuana reform bill, a Pew poll released last month does show that there’s majority support for legalization among those who lean Republican (55 percent) as well those who lean Democratic (78 percent).
Photo courtesy of YouTube/Rep. Massie.
State Department Warns Travelers About Flying With Cannabis Oil Internationally
The U.S. State Department is warning international holiday travelers that while hemp-derived CBD might be legal in the U.S., it can land you in trouble if you take it certain places abroad.
“Make sure your gift isn’t a fa la la la la la la la la fail,” the department said in a tweet on Thursday. “Bringing along gifts like drones, CBD oils, and firearms can land you in trouble in foreign countries. Research what is and isn’t allowed before you travel.”
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Photo courtesy of Flickr/DHS.