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Our Perspectives on the Cannabis Industry

Why is the DEA Messing with our CBD?

There was quite a panic caused last week when a slew of misleading articles inundated the internet telling everyone the DEA just made CBD illegal and put it on the list of Controlled Substances as a Schedule I drug. In the Federal Register (Dec. 14, 2016) this month the Administrator, Chuck Rosenberg, took final action and approved a proposal by the DEA to create a new Administration Controlled Substances Code Number that would establish a new drug code for “marihuana extract.” People were outraged trying to figure out how this could happen. Why are they doing this and where do they even get the authority.

CBD panicThe DEA made CBD illegal.  How could this happen?

Does the DEA have the authority to change the Controlled Substances Act? Isn’t the DEA’s responsibility to carry out the law but not create it? The Controlled Substances Act (CSA) does provide for some procedures that would allow for adding, removing, and transferring drugs among the schedule. The CSA specifically states that the DEA may initiate proceedings to “add, delete, or change the schedule of a drug or other substance.” Ultimately, the DEA can’t create new laws, they can only enforce existing laws created by Congress. In this particular case the DEA has said that they were basically just doing some house keeping, updating codes to remain compliant with the provisions of the International treaties. So they are really only making an administrative change, updating codes. Updating the code will then allow them to include a product that hadn’t previously been defined or included before.

The DEA made CBD illegal, or did they?

The Single Convention on Narcotic Drugs, 1961 (‘‘Single Convention’’) and the 1971 Convention on Psychotropic Substances are the “International Treaties” that are being referred to. The treaties require the states that are party to it to pass laws that will enable them to fulfill their obligations under the treaty. The Controlled Substances Act of 1970 is the law the United States enacted to remain compliant under the treaties. If control of a substance is mandated by the Single Convention, the Attorney General is required to “issue an order controlling such drug under the schedule he deems most appropriate to carry out such obligations”. The Single Convention puts drugs in various schedules and the CSA was mostly modeled after it, with the exception that in the CSA the most stringent schedule is Schedule I and in the Single Convention the highest level is Schedule IV, Schedule I being the lowest. Cannabis is included on its schedules and also appears on more than one schedule.

Here’s how it  is scheduled by the Single Convention on Narcotic Drugs…UN


cannabis — the flowering or fruiting tops of the cannabis plant (resin not extracted).

cannabis resin — the separated resin, crude or purified, obtained from the cannabis plant.

extracts and tinctures of cannabis.

Under the CSA the term “marihuana”  is defined as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.”

They also go on to define the term ”manufacture”  as follows: “the production, preparation, propagation, compounding, or processing of a drug or other substance, either directly or indirectly or by extraction from substances of natural origin, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis…..”. And don’t think that Hemp or CBD derived from Hemp is any different. Hemp comes from the same genus family and as far as the feds are concerned is the same thing.
This leads to the assumption that CBD extract, being a “compound” and a “manufacture” by definition, of the marijuana plant is already considered a schedule 1 drug by the DEA. The fact that the DEA created a new code does, however, solidify the DEA’s position that cannabis and its extracts, including CBD oil are, all and always were, federally illegal Schedule I substances. And because marijuana is described as “all parts of the Cannabis sativa L” they can assume that means even all parts of Hemp. This is the problem when laws get written with ambiguous language like “all parts” and “every compound”, someday someone is going to interpret that in whatever way suits them the best.

Acts like a duckAnd it’s true that they already believe that, and that they believe they haven’t changed the classification at all by a statement Rosenberg made in the Register saying “Extracts of marihuana will continue to be treated as Schedule I controlled substances,”.
The mere fact that the Single Convention lists cannabis and its extracts and tinctures on its schedules means that the DEA is required to control it. In 1978 the Psychotropic Substances Act amended the CSA to create provisions to allow for the U.S. drug control Schedules to be updated as needed in order to “enable the United States to meet all of its obligations under the Convention”.
The DEA is  interpreting the law to say that they are allowed to initiate proceedings to update the Schedules as needed to remain in compliance with the treaties of the Convention. Which is exactly why they say this is happening.

Why does the DEA care about CBD?

The outrage of the masses is apparent in the cries that the DEA is in bed with Big Pharma and they’re just trying to keep the CBD extracts for them. That they aren’t telling the businesses that do the extractions and making it difficult for them to update their licensing on purpose so they can shut them down. These are all great conspiracy theories, and I for one might buy into one or two, but there is also a more political reason this is happening. They want to control it.
I think we all know by now the requirements for a Schedule 1 classification. The drug or “other substance” has to have:

1. A high potential for abuse.

2.  No currently accepted medical use in treatment in the United States.

3. There is a lack of accepted safety for use of the drug or other substance under medical supervision.

I think we all agree that CBD does not fit any of those descriptions. However, it also states that the drug must fit these descriptions EXCEPT where “control is required by United States obligations under an international treaty, convention, or protocol, in effect on October 27, 1970…” DEA honestySo, again, we have a situation where because the Convention states that cannabis and its “extracts and tinctures” is a substance that should be controlled it must be. The DEA assures that they are only creating a new code for extracts to enable them to better and more accurately track the product. The DEA uses these codes to track the import and export of various drugs including cannabinoids. They argue that more appropriate accounting will help them better distinguish between the different materials and is more consistent with the treaty provisions.

Separate code numbers were previously established by the DEA for marijuana and for tetrahydrocannabinols(THC), but not for marihuana extracts. Cannabis and cannabis resin fall under the marijuana drug code 7360, and now marijuana extracts will fall under code 7350. Chuck Rosenberg, DEA Acting Administrator, says that the code “will allow DEA and DEA-registered entities to track quantities of this material separately from quantities of marihuana.”

In the Controlled Substances Act marijuana (drug code 7360) is listed in Schedule 1 and the term is defined as: “includes (unless specifically excepted or unless listed in another schedule) any material, compound, mixture, or preparation, which contains any quantity of the substance, or which contains any of its salts, isomers, and salts of isomers that are possible within the specific chemical designation.”
The definition for the new separate code number in Schedule I is as follows: ‘‘(58) Marihuana Extract—7350  ‘‘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.’’ This allows the DEA to differentiate extracts from cannabis and cannabis resin, which presumably they want the be able to control much more strictly.
Currently, the Rohrabacher-Farr Act protects people who are using CBD in states where there are legal medical programs. The Act, passed in 2014, sets prohibitions against the Justice Department and disallows any funding to be used to “interfere with the implementation of state medical cannabis laws”. The amendment was most recently renewed Friday, Dec. 9, as part of the continuing House resolution known as HR 2028. But, it needs to be renewed every year.

Why now?

Why Now?Actually this proposed coding has been sitting on the back burner for over 5 years. The DEA made the proposal that a new code be established for marijuana extracts as 7350 on July 5, 2011, in a Notice of Proposed Rulemaking (76 FR 39039).

Since its been sitting garnering little attention for the past few years why did they up and finalize it now? Is it really designed to target CBD extracts? With the coming Trump administration, maybe their goal is to separate CBD extracts from cannabis and cannabis resin because they plan on cracking down on the legal marijuana industry. Rob Morgan, Chicago Attorney and head of blog The Pot Czar, thinks this move was very deliberate and there’s really no way to figure out what their motivations are. Whatever the reason, we can deduce that they are doing it to ensure that they are set up properly for an eminent future.

What it means for you….

This new rule geffectsoes into effect January 13, 2017. This means that any person who currently processes marijuana extracts is required to apply to have their registration modified by that date.

The Administrator, who approved the new rule, has determined that this new drug code does not create a significant impact on the businesses who are working in the marijuana industry stating “The only direct effect to registrants who handle marihuana extracts will be the requirement to add the new drug code to their registration. Therefore, DEA has concluded that this rule will not have a significant effect on a substantial number of small entities.” Well, that remains to be seen.
Thepunch in the face entire goal of the Single Conventions and the Controlled Substances Act is to control narcotics. The criteria for being put on Schedule I in the first place doesn’t fit the definition of CBD. It is non-narcotic, is not addictive, does have accepted medical uses and is considered safe.  The DEA has stated that “any cannabis plant extract that contains CBD and no other cannabinoids will still fall within the new drug code.” Interesting. Interesting and disturbing. On the one hand the DEA is saying they are not really changing anything. By definition extracts of cannabis are already on Schedule 1 of the CSA. Since the Single Conventions treat extracts differently so should they. The new code, apparently, would allow them to do that. But as the DEA points out, the Single Convention treats extracts differently than marijuana or marijuana resin by putting them in schedule I, the least stringent of the schedules. Marijuana and THC are in both schedule IV and schedule I, the most stringent.

The only real reason CBD should be on the Schedules at all is to comply with the treaties. A drug does not have to meet the criteria for the list of controlled substances to be put on the list if it is also required to be controlled in order to make sure the United States is complying with the International treaties. By saying that even CBD that contains no other cannabinoids would still fall under the new code of marijuana extracts 7350, they are changing a whole lot. They are ensuring that at some point in the future when technologies allow us to extract and isolate CBD without any other cannabinoids, it would still be considered a Schedule 1 drug.

wolf in sheeps clothesIt seems that if they really wanted to track CBD better and make sure they are complying with the treaty they could have moved CBD extracts to schedule IV on the CSA, which is also the least stringent schedule, and given it a new code. That would, at least, have been more in line with the Single Convention. It makes you wonder if the treaties are the real reason they decided marijuana extracts needed a new code, or why they really need to track marijuana extracts more accurately.
For right now, the Rohrabacher-Farr Amendment has been renewed, at least until April 28, 2017. With a new Attorney General and the Trump administration heading into office it is going to be essential for Congress to renew it again next year.

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