Did Congress just quietly legalize hemp and CBD nationwide?

Can CBD and hemp oil be sold nationwide?

Can CBD and hemp oil be sold nationwide?

Mostly, yes. As a cannabis and hemp lawyer who keeps track of CBD law and its rapid evolution, here’s my argument.

As many of you know, the enormous 2014 US Farm Bill (“the Farm Bill”) contains a small section, tucked deep inside, called “Legitimacy of Industrial Hemp Research.” In this section, Congress legalized hemp in an important, but small way. It did so by carving out an exception to the controlled substances act’s definition of “cannabis” for what it terms “industrial hemp.” Industrial hemp is defined as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a [THC] concentration of not more than 0.3 percent on a dry weight basis.”

According to the Farm Bill, a State’s Department of Agriculture may grow or cultivate industrial hemp if it is grown or cultivated “for purposes of research conducted under an agricultural pilot program or other agricultural or academic research” and if the growing or cultivating of industrial hemp is “allowed under the laws of the State in which such institution of higher education or State department of agriculture is located and such research occurs.” As of this writing, at least 23 states have taken the plunge and enacted laws relating to industrial hemp. This is a big boon for the hemp industry- from fiber production for commercial use to CBD oil for medical purposes.

There are some big problems with the way Congress legalized hemp: the Farm Bill is silent on how to obtain or transport hemp seeds; the Farm Bill doesn’t specify what constitutes “research”; the Farm Bill is silent on the legality of hemp’s constituent compounds such as CBD; and the stiflingly low THC limits dampen legitimate research. But the most important problem with the Farm Bill, at least for the commercial sector, is that it doesn’t contain a provision allowing hemp or its products, such as extracted CBD, to be transported from one state to another. This means that US grown hemp must, at least according to the Farm Bill, remain inside the borders of the state in which it was grown.

That crucial limitation has now been lifted by a quiet little passage tucked deep inside an otherwise boring funding bill.

The Omnibus Appropriations Act of 2016 (P.L. 114-113) (“the Funding Act”), passed on December 18, 2015, contains a provision at section 763 that reads:

“None of the funds made available by this act or any other act may be used… to prohibit the transportation, processing, sale or use of industrial hemp that is grown or cultivated in accordance with section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated.” (emphasis mine)

Given Judge Breyer’s opinion in USA v. Marin Alliance for Medical Marijuana, 3:98cv86 (NDCA), which found that the Justice Department unlawfully used funds prohibited from use under a similar omnibus appropriations bill regarding cannabis in its actions against a state-compliant cannabis business, this provision in the Funding Act is a huge victory for the hemp industry. My interpretation is that it allows industrial hemp and its component parts, such as CBD, to be processed, transported to, and sold in all 50 state, including states that haven’t enacted industrial hemp laws pursuant to the Farm Bill. (Of course, states that have made hemp and/or CBD illegal within their borders may prosecute under state law.)

This is a huge victory for the US hemp and CBD industry. We still have other problems and hurdles to face. Importantly, the FDA has recently sent out letters to several CBD companies. Stay tuned for an upcoming post on how FDA regulations impact the sale of CBD and hemp oil. In the meantime, please feel free to contact me if you have any questions about hemp or CBD law.

3-3-2016

21 thoughts on “Did Congress just quietly legalize hemp and CBD nationwide?

  1. Shane Johnson

    Great article! I’m curious if you have any insight on how CBD not derived from hemp (e.g., manufactured / synthesized via other means) is treated in terms of ability to ship nationwide? Is it a controlled substance in that case, or?

    Reply
    1. Rod Kight Post author

      Thank you. CBD is not listed as a scheduled substance in the Controlled Substances Act. Based on this it is my position that CBD sourced using legal methods from legal plants and/or substances is legal. This being said, you should keep in mind that the DEA contends that CBD is a controlled substance because it is a “component” part of the cannabis plant. I’m not sure how the DEA would respond to your question since you’re discussing CBD not sourced from the cannabis plant, but the DEA’s positions tend to be extreme and don’t always make logical sense. So, just know that the DEA may take an interest.

      Reply
    1. Rod Kight Post author

      That’s a good and timely question. The short answer is that the article won’t change anything because it doesn’t carry the force of law. It’s an opinion letter and, as such, is subject to the actual statutes and caselaw. I intend to address some other issues in an uncoming blog post. Suffice it to say that I disagree with several of the points made in the memo, most notably the following paragraph: “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, industrial hemp products may be sold in a State with an agricultural pilot program or among States with agricultural pilot programs but may not be sold in States where such sale is prohibited. Industrial hemp plants and seeds may not be transported across State lines.” First of all, the US Farm Bill does not prohibit “general commercial activity.” That restriction is simply made up. Secondly, based on the opinions in US v. MAMM and US v. McIntosh, combined with the language in the The Omnibus Appropriations Act of 2016, Federal agencies cannot interfere with hemp cultivation, transportation, or sale of hemp (and, by extension, hemp products), even in states that have not enacted hemp laws. I’ll write more in a separate blog post, but that’s the gist. Thank you for reading!

      Reply
  2. Hank

    Hey Rod- enjoy your articles. What’s your opinion of CBD oils derived from hemp with THC levels above .3% being shipped intrastate (since isolating CBD naturally isolates thc often bringing the level above .3% albeit slightly). Is it still considered an industrial hemp product and subject to the same legislation assuming the CBD was extracted from industrial hemp that met legal requirements of the farm bill? Thanks!

    Reply
    1. Rod Kight Post author

      Thanks for your question, Hank. Unfortunately, CBD oils derived from industrial hemp with THC levels above 0.3% are outside the parameters set forth in Section 7606 of the 2014 US Farm Bill, which defines “industrial hemp” as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” This means that they are Federally illegal and cannot be shipped across state lines. We need a better law! Thanks for reading.

      Reply
    2. Doug Roberts

      The misclassification of it will be the death of us. CBD should be in its own class, its basically a natural supplement and it can be distilled for purity, food grade FDA approved processes, and properly regulated for dosing for any number of specific ailments and supplemental therapies you might use a supplement for. I mean I am more effected by caffeine than therapeutic levels of CBD. No different than taking melatonin or valerian etc… Chemistry is not waiting for the FDA or DEA to get a clue, but, for the sake of argument, if the feds would change the .3 by dry weight to something like a 3:1 ratio of CBD to delta-9, I mean I am probably dreaming, but that would be a meaningful starting point to fine tune what are already some very promising products. I don’t see the feds unlocking the 50 states anytime soon but as we ALL agree, with the very few exceptions in the wrong places, it should be.

      Reply
      1. Rod Kight Post author

        Thanks for your comments. I fully agree with you. I am doubtful that we’ll have meaningful reform as you rightfully suggest (such as 3:1 ratios instead of limiting THC to <0.3%) for the reason that the 0.3% threshold seems to have taken hold from a legislative standpoint. Once this sort of thing happens it's very difficult to roll it back. But we'll keep trying.... In the meantime, it's important to keep the public, the lawmakers, and law enforcement educated on the actual state of the law.

        Reply
    1. Rod Kight Post author

      This is an excellent question. Unfortunately, the answer is not as straightforward as we’d like it to be. There is no single statute that we can point to. Rather, there is a collection of interrelated (and sometimes conflicting) laws. The simple (but somewhat incomplete) answer is that the Federal Controlled Substances Act (“CSA”), which lists marijuana as a Schedule I substance, makes cannabis (including what we call hemp, which is really the same plant species as cannabis/ marijuana) illegal except in states that have enacted industrial hemp pilot programs pursuant to the 2014 US Farm Bill (section 7606). Additionally, from a state level, many states have not enacted hemp programs and cannabis (including hemp) remains illegal inside their borders. Further complicating matters (but in a helpful way) is the Federal Omnibus bill of 2015, which I discuss in this article. This law doesn’t make hemp legal in all 50 states; however, it does prevent Federal funds from being used to interfere with hemp production and shipping. Crucially, this applies to shipping to or through states that have not enacted hemp laws. In other words, as long as hemp is legally produced in a state that has laws that are in line with the 2014 Farm Bill, no Federal funds can be used to interfere with it. The one remaining problem is state law. A state to which hemp products are being shipped that has not enacted hemp laws and does not receive Federal law enforcement funds can prosecute under state law. Most states receive some form of Federal law enforcement funding. The difficult part is analyzing which states can legally prosecute and which can’t (ie, which ones don’t have hemp laws AND don’t receive Federal law enforcement funds), particularly when the shipment has to go through a number of states to reach its final destination. There are lots of subtleties that I don’t address in this response (the “mature stalk” and seed of the cannabis plant exceptions to the CSA, FDA’s take on CBD, etc.) because they’re beyond the scope of a response. I hope this helps and am happy to discuss it further if you’d like to contact me directly.

      Reply
  3. VapeQueen

    I know this is an older posting….hope you still see this comment and are able to assist me.

    I live in a state that doesn’t have any pilot program, nor has it legalized hemp products. (Ohio) Through certain means I have been given and used CBD oil to vape. I have PTSD, Bipolar, panic attacks, and extremely high stress levels. I got the CBD oil to try and see how it helped my “problems”. Due to a letter released from the DEA to the company where I originally received my oil, the company refuses to sell any longer to anyone in my state. So I have followed laws, rules, regs, etc waiting for things to change. Now, Ohio did recently pass the legalization of “medical marijuana” in the form of oils to vape & edibles only. But my state lawmakers claim it will be years before they have everything in place and our licensed Doctors are allowed to issue the “medical marijuana” cards to patients. Now that you know my back story here are my questions:

    1) With my state not having legalized CBD am I legally allowed to purchase from another state and have it delivered to my mailing address?

    2) In regards to the whole <0.3% the issue – I know that West Virginia's state law puts that level at 1%. From a legal standpoint, does this state law trump federal law? OR does this mean if I were to say, drive to WV and buy my oil there, that I would actually be breaking state AND federal law?

    I apologize for commenting on such an old post but felt my comment fit better here than elsewhere. Thank you for all your hard work reading and breaking down all this government mumbo jumbo for us lay people!

    Reply
    1. Rod Kight Post author

      Thanks for reading and posting. You may be interested in this blog post about state CBD laws: http://kightoncannabis.com/most-state-cbd-laws-are-unenforceable-and-moot-yes-really/

      With respect to your questions:

      1) With my state not having legalized CBD am I legally allowed to purchase from another state and have it delivered to my mailing address? If the CBD is legally sourced (ie, from industrial hemp in a state that has authorized it or from non-psychoactive hemp lawfully sourced from abroad), then it is legal in your state. Otherwise, it isn’t.

      2) In regards to the whole <0.3% the issue – I know that West Virginia's state law puts that level at 1%. From a legal standpoint, does this state law trump federal law? OR does this mean if I were to say, drive to WV and buy my oil there, that I would actually be breaking state AND federal law? That limit exceeds the Federal limit allowed under the 2014 Farm Bill and is Federally illegal.

      Reply
  4. Elaine Roper

    Thank you for this information. Am I right in my understanding that companies that sell CBD on line may not suggest what medical problems their products are applicable?

    Reply
    1. Rod Kight Post author

      Yes, that is correct. The FDA does not authorize purveyors of CBD products to represent that they assist with any medical problems.

      Reply
    1. Rod Kight Post author

      Hi, Jay. Thanks for reading and commenting on my blog. The short answer to your question is “it depends.”

      Non-psychoactive industrial hemp that is lawfully cultivated in its country of origin is legal based on a 2004 Federal case called Hemp Industries Association v. DEA. There is some grey area with respect to this particular case. The first grey area is that this case was heard in the 9th Circuit Court of Appeals, which mostly covers the West Coast. The 9th Circuit does not have jurisdiction or authority over cases outside of its district. That being said, it struck down a DEA rule purporting to make imported hemp products illegal and the DEA did not appeal. Thus, I contend that the best argument on this point is that the case has national significance. Secondly, there is a question regarding whether the Court found that the excepted parts of the marijuana plant (mature stalks, non-germinating seeds, etc.) were the only parts of the hemp plant that are allowed to be imported or if the Court found that the entire plant- leaves, buds, etc.- were lawful to import. The case discusses both and never resolves this issue.

      The second way that industrial hemp is lawful is when it is lawfully grown in a State that has enacted an industrial hemp pilot program pursuant to the 2014 US Farm Act. In that situation it is legal within the State. It is also defacto legal at the Federal level because Congress has withheld funds to interfere with State-legal industrial hemp programs, even when the hemp is transported across state lines. That being said, individual States may prosecute for hemp possession/ use under their own cannabis laws if they do not receive Federal funding.

      As you can see, the legal status of hemp in the US is complicated and grey. There are also some FDA considerations and a recent DEA ruling affecting hemp and its products, all of which I’ve written on in my blog. Please feel free to reach out if you have any specific questions.

      Reply

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