Is CBD Legal? Part I: Federal Law

“Is CBD legal?” Our hemp lawyers hear this question quite frequently and over the next week, we are going to attempt to dissect this question at the federal and state level.

What is CBD?

Cannibidiol (CBD) is a natural phytocannibinoid found in the Cannabis sativa plant. Unlike tetrahydrocannabinol (THC), CBD will not cause a user to experience hallucinogenic or other psychoactive effects. CBD has been hailed as a miracle compound, with many clinical studies finding that its analgesic, chemopreventitive, and anti-inflammatory properties may be used in a variety of conditions ranging from arthritis, epilepsy, multiple sclerosis, post-traumatic stress disorder, depression, anxiety, cancer, and more. Sounds like a miracle drug that would be free of any restrictions, right?

Not so fast. CBD legality is a very gray area right now, depending on what whether you are looking at federal or state law.  Many of you may have seen the recent NBC DFW segment on cannabidiol oil legality, wherein the Tarrant County District Attorney announced that she believes CBD oil is an illegal substance in Texas, even where the CBD oil contains zero percent tetrahydrocannabinol (“THC”). Our hemp and cannabis lawyers here at Ritter Spencer Cheng are joining the fray and will be weighing in on CBD legality over the next week. We will be analyzing relevant laws at both the federal and state levels that apply to hemp and CBD, reviewing regulatory issues that affect this answer, and hopefully providing a bit of clarity on this subject.

Is CBD Legal under Federal Law?

The answer to whether CBD is legal under federal law is that is depends on where the CBD is derived from and what it will be added to. We will address the second issue, what it may be added to, in our upcoming Part II of this Series, which will address the FDA’s stance on CBD.

If the CBD is sourced from the hemp plant and if it meets certain requirements, it is legal under federal law. If the CBD is sourced from the marijuana plant, it is a Schedule I substance under the federal Controlled Substances Act (“CSA”), unless an exemption applies. Many people are unaware that hemp and marijuana are not the same plant Although both fall within the Cannabis plant family, they are two very different plants. The genus Cannabis contains two subspecies: Indica and Sativa. Marijuana can be either Indica or Sativa, while hemp is Cannabis Sativa. Hemp contains .3% THC or less, while marijuana can contain between 10-30% THC. Genetic modifications in strains continue to increase the amount of THC contained in certain strains.

Is CBD Legal if it is Sourced from Hemp under Federal Law?

In 2018, Congress passed the Agriculture Improvement Act of 2018, P.L. 115-334 (the “2018 Farm Bill”). The 2018 Farm Bill defines hemp as

“the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” § 297 (a).

Because the DEA had previously taken the position that hemp-derived cannabinoids fell under the CSA’s definition of marijuana (and were thus a Schedule I substance), Congress amended the CSA definitions of marijuana and tetrahydrocannabinol with the 2018 Farm Bill. The definition of marijuana was amended to state that it “does not include hemp as defined in section 297A of the Agricultural Marketing Act of 1946.” The definition of tetrahydrocannabinols was also modified to exempt “tetrahydrocannabinols in hemp (as defined under section 297A of the Agricultural Marketing Act of 1946).” The Agricultural Marketing Act of 1946 is our original Farm Bill. The 2018 Farm Bill amended this Act.

Because of the passage of the 2018 Farm Bill, many people mistakenly believe that hemp has been legalized federally without restriction. Others have stated that hemp is now legal in all fifty states. Both of these statements are false. The only hemp that is legal federally is hemp sourced pursuant to a State or tribal plan approved by the State’s Secretary of Agriculture, i.e. those who have received a license to grow from the State’s Department of Agriculture. So why didn’t the 2018 Farm Bill make hemp legal in all fifty states? The Bill specifically states that nothing contained therein “preempts or limits any law of a State or Indian tribe that (i) regulates the production of hemp; and (ii) is more stringent than [the 2018 Farm Bill].” Thus, states can include more stringent regulations for their hemp growth programs than the Bill contains. Furthermore, many states still have criminal statutes that don’t make any distinction between marijuana and hemp. For example, the Texas statutory definition of marijuana is “Marihuana means the plant Cannabis sativa L….” Recall what plant we talked about above that always falls within the Cannabis sativa family? Hemp.

What about the Anti-Interference Clause?

Congress included a clause instructing states that they cannot interfere with the interstate transport of hemp in the 2018 Farm Bill. The Bill specifically provides that “No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.” This would include interference with transportation or shipment of hemp or hemp products across state lines by the DEA. What is important to remember here is that the federal law governs transport through the states, also known as interstate commerce, or commerce among and across the state lines.

But what about some of the recent arrests of hemp transport drivers, you ask? The DEA testing results recently came in on the arrest of four hemp transportation drivers in Pawhuska, Oklahoma. Several of the samples tested above the THC threshold of .3%. Some tested at .5%, making that particular substance illegal. In another instance, a shipment of industrial hemp grown in Oregon headed to Big Sky Scientific, a hemp purchasing company in Colorado, was seized and the truck driver was charged with drug trafficking, an offense that carries a mandatory five-year prison term in Idaho. Big Sky sued the Idaho State Police Department in federal court and moved for a temporary injunction. The Court denied the request for temporary restraining order and seemed intrigued by the argument of the Idaho Police Department: the Oregon hemp that the driver was transporting was produced under subsection G of the 2014 Farm Bill, which did not have an anti-interference clause. The court noted that it had difficulty in determining “whether the product that was seized from the Big Sky shipment is ‘hemp’ under the 2018 Farm Bill amendments, when the current record suggests that the timing of the hemp harvest and shipment predate the creation of either a state or federal ‘plan’ as called for in the 2018 Farm Bill’s regulatory framework for hemp production.” See Big Sky Scientific LLC V. Idaho State Police, Ada County, Jan M. Bennetts, in her official capacity as Ada Cty. Prosecuting Attorney, No. 1:19-CV-00040-REB, 2019 WL 438336, at *5 (D. Idaho Feb. 2, 2019).

As you can see, both of these recent cases have issues that the 2018 Farm Bill either does not cover or does not address. If you ship hemp in interstate commerce, the 2018 Farm Bill is quite clear: it must contain .3% THC or less. The Big Sky case will be interesting to watch because nothing in the Farm Bill made the interstate commerce anti-interference clause retroactive. Though Big Sky was denied its request for a temporary restraining order, the case is still ongoing and the Judge will have to answer his own question of whether the hemp involved in Big Sky is actually “hemp” under the 2018 Farm Bill.

What About CBD from Marijuana?

There is no question that at the federal level, CBD derived from marijuana is illegal (but wait!), unless it was sourced from one of the statutorily exempted portions of the marijuana plant. These are the exemptions we mentioned at the onset of this article. The CSA definition of marijuana exempts “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.” 21 U.S.C.A. § 802. If the CBD was derived from one of these listed exclusions, it is not a Schedule I substance. However, opinions differ as to whether quantifiable CBD amounts may be extracted from any of these exempted parts of the plant.

As you can see, the question of whether CBD is legal is a complicated one that involves many intersections of law. Stay tuned to see how the FDA is weighing in on this subject.