The hemp industry is not the only one cracking down on the Hemp Interim Final Rule (the “Rule”) of the Drug Enforcement Administration (DEA). Reading this blog you will remember that the hemp industry sued the DEA after its rule was posted in August 2020. The rule threatens the hemp industry for wrongly criminalizing the extraction process of hemp into derivatives, extracts and cannabinoids, a critical component of all hemp-derived products.
Last week, nine members of Congress sent a letter to the DEA’s acting administrator Timothy Shea to express their concerns about the rule.
In their letter, lawmakers stated that they have received countless calls from hemp ingredients deeply concerned that conducting lawful activities under the Farm Bill 2018 will result in criminal liability under the rule.
The 2018 Farm Bill legalized hemp along with its derivatives, extracts, and cannabinoids. In order to extract these legal plant materials from hemp, the hemp plant must go through an extraction process. Accordingly, it logically follows that the Farm Bill of 2018 also legalized the processing of hemp into such derivatives, extracts and cannabinoids.
Despite this logical conclusion, the legislature stated that the DEA failed to recognize this nuance, along with the clear legislative intent of the 2018 Farm Bill when it drafted the rule that states:
“Any such material that contains more than 0.3% Δ9-THC on a dry weight basis remains controlled in Appendix I.”
Furthermore, the nine lawmakers argue that the rule does not recognize the known fact that the process by which hemp is extracted into derivatives, extracts, and cannabinoids can almost always result in elevated delta-9 THC levels, even if so is completed Hemp product meets the legally prescribed THC threshold according to federal law. This means that extracting hemp according to the rule can result in hemp processors temporarily owning a controlled substance, which would clearly go against the legislative intent of the 2018 Farm Bill.
In light of these issues, the legislature called for a revision of the rule to (1) be in line with the letter and intent of the Agriculture Act of 2018, (2) remove any ambiguity regarding the legality of intermediate hemp, but also (3) to make it compatible protect an emerging, thriving economy. In fact, the letter explains the following:
“[t]The hemp industry in the United States is estimated to be valued at approximately $ 10.3 billion by 2024, down from $ 1.2 billion in 2019. This industry is, and is, capable of incredible growth a source of immense livelihoods for Americans all at risk [Rule]Interpretation. “
The letter was filed on October 20 and was the last day public comments on the rule could be accepted. It remains to be seen whether the DEA will take these recommendations into account when formally adopting the rule. However, given the recent lawsuit against the DEA and its rule, the agency may not be able to proceed with the settlement process. If the United States District Court for the Columbia District granted an injunction to the hemp industry, the DEA would be prevented from enforcing and revising the rule until the court hears the case, which may not last for another year.