US News & World Report - DEA Says New Cannabis Extract Code Does Only Good Things

US News & World Report - DEA Says New Cannabis Extract Code Does Only Good Things

By Steven Nelson | Staff Writer Dec. 20, 2016


More than five years after proposing the idea, the Drug Enforcement Agency next month will implement use of a new administrative code for cannabis extracts, unnerving some advocates for the hemp industry and the lawful use of cannabidiol, a compound found in cannabis plants that appears useful in treating epilepsy.

Some cannabis advocates see the new code as a backdoor attempt to stretch the definition of marijuana, a federally illegal Schedule I drug, to cover products that are lawfully imported or produced domestically from plants with low amounts of the high-inducing compound tetrahydrocannabinol (THC).

The DEA insists, however, that the change published last week in the Federal Register has nothing to do with a crackdown, and in fact will have the primary effect of making cannabidiol (CBD) research easier.

"From a practical standpoint, we are giving priority, actually, to those researchers who are conducting research with marijuana extracts, [which] the internal code will allow us to track and prioritize," DEA spokesman Russ Baer says.

"We recognize there have been some studies that have been promising ... and we want to be able to support that ongoing scientific research, particularly as it relates to marijuana extracts," he says.

Previously, there have been DEA codes only for marijuana (7360) and THC (7370). Now, extracts with various cannabinoid profiles will be coded 7350. Some extracts have no THC or very low concentrations.

Although the agency's formal justification for the new code deals largely with treaty obligations for drug tracking, Baer says one effect will be that researchers who use the new code on a standard application to handle scheduled substances will be moved to the front of the line.

But the precise definition of a marijuana extract under the new code has caused unease. The terms are defined as "meaning an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant."

The notice announcing the code says the extracts will be treated as Schedule I drugs, something Baer says is a long-standing DEA interpretation of the Controlled Substances Act, which says cannabis derivatives are included in marijuana's definition. The act also says, however, that marijuana's definition excludes the mature stalks of cannabis sativa plants, the derivatives of stalks and seed products such as oil and crushed seed cake.

Cannabinoids can be extracted from stalks. And a panel of the U.S. Court of Appeals for the 9th Circuit ruled in 2004 that the DEA could not treat parts of the plant excluded from the definition of marijuana as Schedule I drugs, even if they have traces of THC.

The DEA did not appeal the 9th Circuit ruling, which allowed for hemp to be imported before Congress in 2014 legalized the domestic farming of hemp from cannabis plants with less than 0.3 percent THC as part of state pilot programs, with lawmakers later clarifying product sales are allowed.

The Controlled Substances Act definition and the congressional hemp reform have contributed to disagreement about whether cannabinoid extracts necessarily are Schedule I substances, and some critics fear the new definition codifies a disputed interpretation of law.

"It's not the end of the world, the sky is not falling," says Colorado attorney Bob Hoban, who leads a national cannabis-focused law firm. "But it does try to inappropriately and unlawfully expand their purview here."

Hoban says "the practical effect of having a drug code is far-reaching" and that even if the DEA does not intend a crackdown, it issues a so-called Orange Book of drug codes and "now we're going to see [other federal and state] agencies saying this is an illegal drug because of this drug code."

Hoban says his firm has dealt more than a dozen times with U.S. Customs and Border Protection officials who seized cannabis extracts containing CBD. Thus far, he says the firm has been successful in negotiating the release of such products.

Last week, he says, clients had four more cannabis extract shipments seized for containing CBD and cannabigerol (CBG), a cannabinoid known as an anti-inflammatory.

Hoban says another client – Colorado's Dad and Dude's Breweria – has had federal formula approval for a cannabis extract-infused beer withdrawn by the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau (TTB). Hoban says negotiations are ongoing and a co-owner of the brewery, which had ambitious plans to be the first national distributor of a cannabinoid-infused beer, says the company will release a statement Wednesday.

The new code, Hoban fears, will result in greater difficulties for lawful businesses, so his firm is reviewing ways of challenging the change.

"Very few people see the drug codes in action on a regular basis like we do," Hoban says. "This will have the effect of stifling commerce."

Other parts of the low-THC cannabis advocacy community are far from panic. With recreational marijuana markets tolerated in four (soon to be eight) states and medical marijuana markets tolerated in many others, in spite of continued federal prohibition, they see no looming threat to non-psychoactive extracts.

Paige Figi, the founder of CBD advocacy group Coalition for Access Now who treats her epileptic daughter Charlotte with the compound, says "it is a clarification of the law, neither good or bad," though she does believe CBD should be made explicitly legal.

Eric Steenstra, executive director of the Hemp Industries Association, which sued to win the right to import hemp more than a decade ago, says he's not particularly concerned about the new code leading to a crackdown. But he says the DEA's wording doesn't reflect the current legal landscape.

Cannabis plants grown domestically under state pilot programs are federally legal and are by law not marijuana, he says, nor are their extracts. That's something Baer disputes, saying the hemp reform did not change the CSA.

"If it ever comes to the point where the DEA tries to do something that would be in conflict with [the 2014 reform's hemp definition], well, we'll see them in court," Steenstra says.

He adds: "We've gone three years as an industry now without them stepping in the way, and I expect that to continue."


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