Legal challenge filed against DEA’s new marijuana extract rule

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By Alicia Wallace, The Cannabist Staff

The hemp industry has taken the DEA to court in the wake of a controversial new rule on marijuana extracts.

Denver’s Hoban Law Group, representing the Hemp Industries Association, Centuria Natural Foods and RMH Holdings LLC, on Friday filed a judicial review action against the U.S. Drug Enforcement Administration, alleging the agency overstepped its bounds when enacting a rule establishing coding for marijuana derivatives such as cannabidiol (CBD) oil. The action, Hoban attorneys allege, puts at risk a booming cannabis and hemp industry and a wide variety of hemp-based products currently on the market.

“We’re talking about jobs and the economy and agricultural (revival),” attorney Bob Hoban said in an interview with The Cannabist on Friday.

The DEA last month confounded many in the cannabis industry with the filing of a final rule notice establishing a Controlled Substances Code Number for “marihuana extract,” and subsequently maintaining marijuana, hemp and their derivatives as Schedule I substances.

DEA officials said the code number would assist in the tracking of materials for research and would aid in complying with treaty provisions. However, compliance attorney Hoban and others expressed concern at the time that the language could result in federal agencies viewing products produced from marijuana and hemp as illegal.

The rule was set to take effect Friday — the same day Hoban filed suit in the U.S. Court of Appeals for the 9th Circuit in San Francisco.

Hoban’s petition seeks a judicial review of the final rule on the basis that the action was inconsistent with the law — including the U.S. Controlled Substances Act and the Agricultural Act of 2014, or the Farm Bill — and effectively amounts to a scheduling action.

A scheduling action, Hoban said, would need congressional approval.

According to the lawsuit:

“Additionally, the final rule creates this new drug code, indicative of being a controlled substance, for substances which are in fact not controlled pursuant to the (Controlled Substances Act),” Hoban attorneys wrote in the lawsuit. “Specifically, the final rule dictates that the mere presence of ‘cannabinoids,’ which are not controlled substances, is the determinative factor of whether a compound is a ‘marihuana extract.’

“Further, the final rule overbroadly defines ‘marihuana extract,’ without reflecting that certain portions and varieties of the genus Cannabis sativa L. are congressionally exempted from the CSA and/or are exempted from being treated as controlled substances altogether pursuant to the relevant laws, as enacted by Congress.”

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