Hemp Update: 2018 in Review
More than a decade since its seminal ruling in HIA v. DEA II (2004), the Ninth Circuit again weighed in on hemp issues in 2018.
Last time around, the Court invalidated a proposed DEA rule that would have prohibited the human consumption of hemp food and body care products. This time, the DEA issued a seemingly innocuous rule for tracking “marijuana extracts.” The rule’s definition, however, referenced cannabis, which includes hemp, not marijuana. Hoban Law Group challenged the rule on behalf of the HIA, Centuria Natural Foods, and RMH Holdings, arguing that the rule failed to distinguish marijuana from hemp, which is not scheduled under the Controlled Substances Act (CSA).
The court’s ruling in HIA v. DEA III was unusual and largely misunderstood with the media generally portraying the result as “Court shoots down appeal” Indeed, the petition was denied – first on procedural, standing grounds. Less noticed, and much more significant, the court proceeded to hold that the 2014 Farm Bill’s hemp research provision (Section 7606) preempts the CSA. Thus, the Court ruled that Section 7606 can coexist with the CSA, providing the second reason for denying the appeal. While the court did not weigh in on the limits of Section 7606 and compliant activity, it is now clear that hemp research (and the many activities Congress intended under that umbrella) lies outside of the DEA’s domain.
In December, President Trump signed into law the much anticipated 2018 Farm Bill, and with it, ended decades of efforts to remove hemp from the CSA list. The 2018 Farm Bill establishes hemp as an agricultural commodity, to be regulated by the USDA, thereby wholly removing DEA’s jurisdiction over hemp. The law provides farmers with the ability to apply for crop insurance, the lack of which had been a major deterrent to many farmers looking to cultivate the crop. Further, those involved in the hemp industry will now be eligible to apply for federal farm grants and loans. Finally, the law succinctly states that neither states nor tribes can prohibit the transportation of hemp or its products through their territories. States and tribes may now submit plans for approval by the USDA for hemp production at a full, commercial scale without the need for research as required under the 2014 Farm Bill.
The same day that Trump signed the Farm Bill, the FDA issued a statement reiterating its position that CBD may not be marketed as a dietary supplement and is a prohibited food additive. The FDA, however, did state that “pathways remain available for the FDA to consider whether there are circumstances in which certain cannabis-derived compounds might be permitted in a food or dietary supplement.” Additionally, the agency announced that hemp seed kernel, oil and protein are now generally recognized as safe (GRAS).
This FDA statement should be encouraging to the hemp industry in that it signals positive changes are afoot at the FDA regarding hemp-derived supplements and hemp extracts in food. During 2019, keep an eye out for the development of these new pathways by the FDA and in collaboration with the hemp industry.
Patrick Goggin is a senior attorney at Hoban Law Group. He sits on Vote Hemp’s board and is working to implement hemp research in California. He can be reached at 650-238-9119.
Matthew Smith is counsel to Hoban Law Group and licensed to practice in the state of Kentucky where he is vice president of the Kentucky Hemp Industries Association Inc. He can be reached at firstname.lastname@example.org.