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A new announcement from the DEA highlighting the lack of legal protections for processing American hemp grown domestically has the CBD industry on edge, but how hard should people be stressing?

We asked the DEA.

We are a week into a 60-day comment period around the DEA’s implementation of the Agricultural Improvements Act – more commonly known as the Farm Bill. It started when it confirmed four rulemaking changes to its existing regulations around what hemp is in the post Farm Bill world.

While some import/export stuff and mechanisms for eventual FDA approvals were included, the part that rattled the hemp industry is that “the definition of ‘Marihuana Extract’” is limited to extracts “containing greater than 0.3 percent delta-9-tetrahydrocannabinol on a dry weight basis.” That’s because at certain points during the process the crude oil may spike above the federal limits, turning it into a schedule one substance. The crude form of the oil is what happens between being plant material and the final clean looking substance you get in a jar.

But how likely is the DEA to come scoop out some crude in the middle of the process to send it to the lab as opposed to the final product? We asked. Additionally, we asked about concerns the move may give the grey CBD middleman market a more permanent feel and the idea that now-legal Chinese manufacturers might be able to consolidate sectors of the hemp CBD market here in the U.S. that wouldn’t be able to produce oil in a fully legal manner.

The DEA’s spokesman, Special Agent Sean Mitchell, kept it brief and first spoke to the general panic of the last week. “The DEA is aware of the concerns of the CBD industry, and is evaluating policy options,” he told L.A. Weekly in a phone interview.

We asked if things went the way the industry feared, what would enforcement even look like? Specifically asking about the idea of the agency shutting down machinery in the middle of processing material to check if the contents had spiked over the legal THC threshold.

“The United States is in the midst of an opioid epidemic fueled by fentanyl and is seeing a strong resurgence of methamphetamine. DEA is focusing its resources on disrupting and dismantling the Mexican cartels that are trafficking these deadly substances into and across the nation,” Mitchell replied to the question.

We asked if he thought they would be loaded up on commentary from the CBD industry for this one? “I think that is a very fair assessment,” he said.

We reached out to the National Hemp Association to get their take on how the DEA responded to our questioning.

“I think that’s about as great a response as you could have gotten from them,” Erica Stark, NHA Executive Director told L.A. Weekly. Stark said it’s actually what she suspected, but certainly it’s understandable how this set off alarm bells throughout the industry. “When you look at the interim final rule as written, it really doesn’t say anything that we didn’t already know. We’ve already known that products that exceed a .3% THC level are still considered a schedule one controlled substance.”

Essentially, Stark sees it as a continuation of the no-man’s land the hemp industry has been in for some time as they wait on the FDA to create whatever the eventual federal regulatory framework looks like. Stark believes states could take regulatory steps to protect their burgeoning industry as the feds get caught up on their own set of rules.

“We’re also actively looking at what solutions we can come up with,” she said. “Like would the DEA consider allowing the transportation of crude oil through a transport company that holds a schedule one license to move it from one licensed processor to another licensed processor?”

We told Stark it seemed like everyone was pretty freaked out about the whole situation. She confirmed she was very aware of that and spent much of her birthday on Monday dealing with folks who wanted to share their concerns with her.

“But you know what? Every single person I talked to that was freaking out, and you know, traumatized by it, I asked them point blank, what is different today from last week?” she said. As Stark sees it, the answer is nothing has changed. What the DEA spelled out in black and white has always been true, “and it’s always been a lapse in the regulations and the legislation.”

Stark said one plan the hemp industry had hopes for is to get hemp added to the amendment backed by U.S. Reps. Earl Blumenauer (D-CO), Tom McClintock (R-CA), Eleanor Holmes Norton (D-DC), and Barbara Lee (D-CA) protecting state-legal cannabis businesses from federal interference. In essence, it would not allow the Department of Justice to go in and interfere with a hemp processor known to be legally operating within their state.

I mentioned to Stark I tried to get the DEA’s take on if there were any concerns about conflicts with the Controlled Substance Act in the process of trying to regulate hemp’s schedule one leftovers but they kept to a pretty straight line on saying they are listening to the industry and in response to my enforcement questions.

“Which doesn’t really surprise me. But I think what they did say is probably the best that you are going to get out of them,” Stark said. “Telling people that the DEA said that should provide a lot of comfort to a lot of people.”

The California Hemp Association has been working in Sacramento to get AB 2028 turned into something they deem acceptable for the state’s hemp producers. The organization’s ultimate goal is to help normalize hemp as an industry and commodity to the extent the consumer thinks of the person growing it the same way they think of the people putting food on their table.

CHA Executive Director Wayne Richman took a moment away from the action to give his take on the uproar the DEA announcement caused over the last week. “There are a whole plethora of things to really get discussed but right now, I think that the DEA statements notwithstanding, we need to see more interpretations on actual scenarios,” he said.

Richman thinks it’s too soon to pull the fire alarm on the DEA plan, especially when the industry has so much work to do here at home in California. He argued the current version of AB 2028 would be a major roadblock for farmers, research and producing quality genetics inside the state. He said while there are aspects of the bill the industry supports, he hoped folks would contact their representatives to urge them to vote against the bill in its current form.

 

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