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Companies Sue DEA Over Recent CBD Rule

Two hemp-related companies and an industry association filed a lawsuit against the U.S. Drug Enforcement Administration (DEA) this afternoon in a California federal court, seeking to overturn the DEA’s attempt last month to codify the illegality of cannabidiol (CBD).

The DEA’s final rule, called the “Establishment of New Drug Code for Marihuana Extract,” was published on Dec. 14, 2016. While officially dealing with a technicality about the classification of cannabis products, the rule included a clause that specifically declared CBD, a non-psychoactive component of cannabis, to be a Schedule I substance. The insertion of that clause could be potentially devastating to thousands of patients and businesses who rely on and produce CBD products. A number of industry officials and legal experts immediately cast doubt on the legality of the DEA’s move.

The Hemp Industries Association joined with RMH Holdings and Centuria Natural Foods to challenge the DEA’s rule. The group is being advised by the Hoban Law Group, a cannabis-focused law firm based in Denver.

“The DEA cannot create a statute,” Bob Hoban, the firm’s managing partner, told Leafly in an interview last month. “That can only be done by Congress.”

The lawsuit charges that the final rule published by the DEA in the Federal Register last month “creates a new drug code without the DEA having followed the procedures or made the findings required” by the Controlled Substances Act.

The DEA’s Final Rule takes the position that the mere presence of any cannabinoid extracted from the Cannabis plant automatically renders that substance a “marihuana extract,” despite no cannabinoid except for (synthetic) THC being expressly scheduled under the Controlled Substances Act

The suit asks the federal court to review the final rule on the grounds that is arbitrary, capricious, and unconstitutional.