DEA: Hemp CBD is a Schedule I Drug

Last week, the Drug Enforcement Agency (DEA) ruled that cannabidiol (CBD) falls within the Schedule I drug classification of the Controlled Substances Act (CSA) and has received an official drug code. Companies have 30-days to update their licenses and cease interstate distribution of CBD and other Cannabis-based extracts. States with laws allowing for CBD and Cannabis will see business as usual. This is more of a bureaucratic move by the DEA than anything else.

Many CBD companies were under the impression that because of the negligible amount of THC in industrial hemp derived CBD (<0.3%), it was exempt from federal guidelines. With an update to the definitions of Cannabis in the Controlled Substances Act, CBD’s position has been clarified.

The move comes as the DEA changed drug codes to comply with covenants of the United Nations’ (UN) international drug policies. The new drug codes are necessary to better track products from the genus Cannabis on a global scale. Previously, the DEA did not have a separate code for CBD and other derivatives – they were coded under Cannabis.

DEA’s History of Regulatory Codes

From the Federal Register, 21 CFR 1308.03 requires every controlled substance or class of substances to be assigned a four-digit code called the “Administration Controlled Substances Code Number” also known as “Code number” or “Drug code”. These codes track the quantities of substances imported and exported out the states.

21 CFR 1308.11(d)(23) mentions that any material, compound, mixture, or preparation that contains any quantity of the Schedule I substance must be designated as such as a subsequent drug code. Therefore, extracts and other derivatives must have individual four-digit numbers assigned to them under the parent code of Cannabis (Drug code: 7300). An extract containing one or more cannabinoid that is not a resin falls under the drug code 7350 and other cannabinoids and resins were assigned the drug code 7360.

This is the implementation of a 2011 draft guidance entitled of The Notice of Proposed Rulemaking (76 FR 39039) for modification of the drug codes.

Industry Reactions

Most of the controversy surrounding the final ruling relates to the powers of the DEA and the interpretation of the CSA. Only Congress and the Attorney General can make changes to the Control Substances Act. Many see the clarification of the definitions and drug codes as a change outside of the DEA’s authority. The DEA argues that because CBD contains trace amounts of other cannabinoids (which might include more THC), it is a Schedule I drug.

Others argue that the move conflicts with the language of the Farm Bill Section 7606, which allows for industrial hemp pilot programs and protected companies from action by the DEA as long as they were following state regulations. Updating the drug code to reflect extracts and resins does not impede companies, but does present an additional and time-sensitive hoop to jump through.

Conclusions

CBD and Cannabis will continue to be fought over by the federal government, individual states, and companies looking to provide an alternative to traditional medications until Cannabis is re-classified as a Schedule II drug. It is rumored that outgoing President Barack Obama is set to sign an executive order to federally legalize Cannabis but in the meantime, companies should continue to closely follow their local regulations and make sure their paperwork meets the 30-day deadline.

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