On August 20th, 2020, the Drug Enforcement Agency (DEA) proposed new rules for hemp and CBD to ensure they are fully compliant with the 2018 Farm Bill.
The Farm Bill legalized commercial cultivation and sale of hemp, but that left the DEA in a grey area. While the DEA says they’ve been in compliance with the new rules since the 2018 Farm Bill was passed, these new rules clarify what the DEA feels is within their jurisdiction.
The new rules will:
- Revise the definition of THC and cannabis extracts under the Controlled Substances Act (CSA) to exclude legal hemp and its family of products
- Remove CBD-based drugs approved by the Food and Drug Administration (FDA) from Schedule V, the federal list of controlled substances
- Remove restrictions on importing and exporting legal hemp and its derivatives
Legal hemp is defined as cannabis containing less than 0.3% THC by dry weight. Hemp and CBD have recently revolutionized the health and wellness industry, and the FDA-appoved hemp-based anti-seizure medication Epidiolex has laid the groundwork for further study on the health benefits of cannabinoids.
So, what do these new rules mean for the global hemp market? We sat down with Brandon Beatty, the longest-standing CEO of a CBD company at Bluebird Botanicals who also sits on the Board of the US Hemp Roundtable, to get some clarification.
How will the DEA’s new rules affect the global hemp market?
Beatty points to the third rule, the removal of restrictions on importing and exporting legal hemp, as the main factor to consider.
This rule provides clear guidance around the importation and exportation of legal hemp, which Beatty hopes will open the borders to a more global market.
“I believe various nations look to the USA when it comes to policies like this,” he explains. “Hopefully, it would set a positive precedent.”
Over the next few years, Beatty believes that the global hemp industry could double or triple in worth if other nations decide to play ball.
Are there negative implications written in the proposed rules?
Beatty points out that there is one negative effect of the new rules that needs to be sorted out. The DEA is suggesting a new definition of the term “marihuana extract” that could affect the legality of CBD extraction.
“During the manufacturing process,” explains Beatty, “THC in hemp extracts often temporarily exceeds .3%, which was common knowledge and accounted for by Congress when stating that the .3% THC amount is to be calculated on a dry weight basis.”
Beatty explains that dry weights are currently calculated with the starting and finishing materials, not during intermediary extraction steps. Should this definition be accepted, the results could be devastating for the CBD-hemp industry.
Why the DEA and not Congress?
It’s a fair question. If hemp and CBD are no longer controlled substances, then why is the DEA still involved?
“I don’t think the DEA should be the ones providing this import/export guidance as Congress intended to remove the DEA from the hemp conversation,” Beatty opines.
That’s why Beatty does not blieve these new rules will influence the conversation of marijuana legalization. “That’s up to Congress, not the DEA.”