What Does the Feds’ Recent Ruling on CBD Mean?

Marijuana attorney Josh Kappel helps us sort through the misleading headlines.

On Dec. 14, news broke that the U.S. Drug Enforcement Administration had created a new drug code for what they call “marihuana extract” and would now consider cannabidiol — the non-psychoactive cannabinoid better known as CBD — as a Schedule I controlled substance. The move has caused shockwaves of panic and confusion across the cannabis community.

But many cannabis news sources incorrectly reported the facts: Leafly.com published a piece titled “New DEA Rule Says CBD Oil is Really, Truly, No-Joke Illegal.” Other marijuana-related news sites had similar headlines.

The truth is that the new classification is more of a linguistic move than anything else.

The DEA schedules or classifies drugs, substances, and some chemicals into five categories, factoring in a given drug’s “acceptable medical use” and its potential for abuse or dependency. Those drugs viewed as having the highest potential for abuse are given a Schedule I classification, which is where marijuana currently sits.

In lay terms, that means the DEA believes all marijuana extracts contain at least some trace of other cannabinoids and therefore should be classified as Schedule I controlled substances.

But here’s the problem: Only the cannabis plant itself has gone through the process of being scheduled as a controlled substance, not its seeds, stems, or stocks. This would be the equivalent of making lemons a Schedule I controlled substance and then later suddenly saying that all extracts made from the leaves of lemon trees are bound to the laws surrounding lemons, even though only the lemon fruit itself is a scheduled substance.

In comments published in the Federal Register, the DEA made direct reference to CBD, stating:

“For practical purposes, all extracts that contain CBD will also contain at least small amounts of other cannabinoids. However, if it were possible to produce from the cannabis plant an extract that contained only CBD and no other cannabinoids, such an extract would fall within the new drug code.”

What does it all mean? Josh Kappel, a partner in the marijuana law firm Vicente Sederberg LLC, thinks it’s a bit premature to panic.

“What the DEA did is to merely label cannabis extracts with a particular number under the Controlled Substance Act. They did not go through the proper process to schedule a new substance, so the logical extent of that rule can really only be what is already currently scheduled.”

This is a pivotal distinction, Kappel notes, because the CBD extracted from the seeds, stems, and stocks of the cannabis plant — in addition to the CBD derived from half a dozen other plants as well as synthetic CBD — do not currently fall under marijuana’s Schedule I classification. They are, in essence, legal to possess and thus not eligible to be regulated or included in any laws pertaining to cannabis.

“The problem with the DEA’s rule is that they’re defining marijuana extract as any cannabinoid derived from the cannabis plant,” Kappel explains. “This ignores the fact that there’s parts of the cannabis plant that aren’t scheduled, and there’s nothing that gives them the authority, without going through the proper process, to schedule cannabinoids that come from parts of the cannabis plant that aren’t scheduled.”

Kappel feels it is far too early for doom and gloom, but that doesn’t mean the DEA’s actions should be written off entirely either.

“It’s not that the DEA doesn’t have the power to schedule CBD as a controlled substance — it’s just that they haven’t taken the steps and gone through the process to do that. I think it’s important to not make things bigger than they actually are. I do think it’s smart to be cautious. ‘Why is the DEA doing this?’ It’s a smart question to ask.”

While it would be hard to fault the public for assuming the DEA’s change might portend what is to come in Trump’s administration, the action was taken under the leadership of Chuck Rosenberg, who was appointed by Attorney General Loretta Lynch in 2015 and found himself in hot water after making statements in November 2015 that the concept of smoking marijuana was “a joke.”

Rosenberg does not reflect the views of the president-elect and his Cabinet as much as he reflects the DEA’s long-standing position that cannabis, in all its forms, is an illegal drug, which of course reflects federal law — for now.

“This almost clerical rule doesn’t change the actual law with regards to CBD,” Kappel says. “Where people were operating before is pretty much where they’re still operating today, although this does reinforce the possibility that the DEA is taking a broader interpretation of what’s controlled and what’s not controlled.”

As with many facets of the cannabis sector, Kappel says the best course of action is to wait and see. In the interim, there is no viable reason to think CBD-related products and treatments are at risk of being raided or shut down. Business continues as normal, with “normal” being a highly volatile climate in which major changes are always just around the corner.

Another interesting point that Kappel makes is that a federal agency other than the DEA is likely to cause the most trouble for those manufacturing CBD products.

“The actions we have seen against CBD products have really been from the FDA, and it’s the FDA that’s taken the position that CBD is not anutraceutical,” Kappel says.

Kappel also notes that even beyond those states that have legalized medical marijuana and decriminalized or legalized recreational adult use, there are still more states that have laws protecting CBD. In total, 42 states currently have some law addressing CBD or cannabis or both.

“If the DEA did decide to now go after CBD manufacturers,” Kappel adds, “it would be so in the face of public opinion and where our country is at that I find it hard to believe.”

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