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U.S. Appeals Court Denies Hemp Industry's Attempt to Reclassify CBD

The court ruled that the DEA can continue to classify hemp-derived CBD as a dangerous drug, even though the 2014 Farm Bill defines hemp as a legal plant separate from marijuana.

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The country's burgeoning medical cannabis industry has suffered yet another setback after a federal appeals court denied the hemp industry's recent attempt to have CBD classified as a legal drug separate from marijuana. Last January, the Drug Enforcement Agency (DEA) created a new administrative drug code that officially classifies all cannabis extracts, including non-psychoactive extracts like CBD, as Schedule I drugs with no medical value.

The hemp industry mounted a legal challenge to the DEA's new rule, arguing that the agency was overstepping its authority by classifying hemp-derived products as Schedule I drugs. Attorneys for the industry asserted that because the 2014 Farm Bill officially defines hemp as a separate plant from its psychoactive cousin marijuana, CBD oils derived from hemp are not prohibited under the 1970 Controlled Substances Act, which only explicitly prohibits marijuana.

This week, a three-judge panel of the Ninth Circuit Court of Appeals rejected the hemp industry's argument, ruling that the DEA's classification of hemp extracts as illegal drugs was not in conflict with the Farm Bill. This ruling upholds the government's classification of CBD and other cannabis extracts as Schedule I illegal drugs, effectively prohibiting their sale outside of state-legal medical cannabis programs.

Hemp industry attorney Bob Hoban said that he was disappointed with the court's decision and intends to appeal it. "Given the pervasive confusion and irreconcilable conflicts of the law that have led to product seizures, arrests, and criminal charges against those involved in the lawful hemp industry, the petitioners believe that the final rule must be invalidated, absent the court clarifying and further resolving these conflicts and their severe consequences," Hoban said in a statement, according to The Denver Post.

Within the next 45 days, attorneys can request that the appeals court reconsider their decision, and if they reaffirm their position, the hemp industry can attempt to move the case to the Supreme Court. Attorney Garrett Graff said that although the ruling is a setback to the medical cannabis industry, the court's decision is not entirely negative. "We're encouraged that the court found that the Farm Bill is in fact valid," Graff said to Hemp Industry Daily. This decision creates the possibility that legal CBD "can coexist" with the DEA's Schedule I classification "for those growing and processing industrial hemp pursuant to the Farm Bill."

Even if the case fails to make it to the Supreme Court, there are a number of bills in Congress that could put an end to the federal prohibition of CBD. The Hemp Farming Act of 2018 would expand upon the Farm Bill by completely legalizing hemp cultivation and production throughout the U.S. This bill, which has strong bipartisan support in Congress, including that of its sponsor Senate Majority Leader Mitch McConnell, would also legalize all hemp extracts.

There are also two different bills in Congress that would protect individual states' rights to legalize any form of cannabis they choose. These bills would prevent the Justice Department from interfering with any cannabis production or sales, including CBD, in canna-legal states, but would not protect companies attempting to sell CBD in states where it has not explicitly been legalized. The Marijuana Justice Act would go further by completely legalizing marijuana and hemp in the U.S., which would put an end to all federal prohibition of cannabis, medical or otherwise.

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