CBD maker, HIA sue Drug Enforcement Administration over extract rule

The Hemp Industries Association and a South Carolina CBD manufacturer are suing the U.S. Drug Enforcement Administration over a recent rule they say wrongly criminalizes how hemp extracts are made.

The filing asks a federal appeals court in Washington DC to throw out a DEA rule published last month.

At issue is whether the DEA is simply updating its policies to comply with the 2018 Farm Bill, which removed low-THC cannabis from the Controlled Substances Act, or whether the DEA is making an illegal power grab by saying that hemp extracts are Schedule 1 controlled substance during a portion of the extraction process when the plant’s THC levels spike above what’s allowed.

CBD makers howled when the rule was published, saying the DEA’s interpretation would criminalize hemp extracts even though Congress specifically mentioned extracts in the Farm Bill. That’s because the DEA rule says that hemp legalization “does not automatically exempt any product derived from a hemp plant.”

Some CBD makers have said they’ll go out of business if the rule isn’t changed. The DEA is taking public comments on it through late October, and HIA and other hemp and marijuana associations have urged members to write letters of opposition before it takes effect.

The lawsuit asks a federal judge to intervene and block implementation of the rule. RE Botanicals, based in Conway, South Carolina, and maker of CBD products under the Palmetto Harmony label, joined the HIA in the lawsuit, which was filed late Friday.

The HIA last sued the DEA over a 2016 rule that determined that CBD is a Schedule 1 controlled substance. The lawsuit made it to a federal appeals court in 2018, which left the rule intact but also said that it didn’t apply to extracts from hemp grown legally. Months later, federal hemp legalization through the Farm Bill made the DEA’s 2016 rule obsolete.