What the DEA’s Letter Means for CBD Oil Companies


Bethan Jenkins

January 12th, 2017

Policy, Top News


On December 14, 2016, the Drug Enforcement Agency made an update to the Federal Register item (21 CFR Part 1308) that has since sent shockwaves across the marijuana industry. The DEA CBD oil Rule confirms that as of January 17, 2017, a harsher cannabis law will be put into place to wipe out CBD oil legal codes. The new Rule reclassifies non-THC cannabis oil as a schedule 1 drug, despite the fact CBD (cannabidiol) extracts are non-psychoactive. What’s more, researchers have uncovered vast medical benefits linked to CBD, which can be extracted from both hemp and marijuana plants.

The effects of the DEA CBD oil Rule will undoubtedly be felt harshly by the many publicly traded companies that have devoted time and money into selling CBD oil legal products. While the DEA claims the update will aid in complying with relevant treaty provisions, worry is growing for budding businesses in the cannabis and hemp field.

A Glimpse into the Marijuana CBD Oil Extraction Industry

It’s safe to say that before the news broke out, the CBD industry was growing at a rapid rate. In fact, billion dollar growth was recently predicted by the Hemp Business Journal in their CBD Report, with consumer sales forecast to hit $2.1 billion by 2020. This indicates the potential of 700% growth from 2016, and 2015 wasn’t a bad year either, considering marijuana-derived CBD product sales racked up $112 million and hemp-derived CBD product sales scored $90 million. Economy growth brings job opportunities and so, shouldn’t there be a DEA CBD oil Rule that makes CBD oil legal?

Scientific research has proven that when CBD-rich strains are used to make cannabis oil, users can get relief from medical conditions. No risk of overdose is linked to CBD, or THC for that matter. Through the use of selective breeding methods, cultivators have grown varieties of cannabis with minimal levels of THC and maximum levels of CBD. Industry insiders have been keeping a close eye on the industry, which already boasts over 800 CBD oil legal marketplace products. Even traditional marijuana users in Southern California are keen to learn more about extraction products, according to accredited cultivator Outco.

Unlike Tetrahydrocannabinol (THC), cannabidiol does not get you “high” but instead, the unique compound possesses myriad medical benefits, including anti-inflammatory, antipsychotic, antidepressant, antioxidant, antiemetic and anticonvulsant benefits. The U.S. National Library of Medicine’s online service, PubMed, published material gathered from human cell-line studies and preclinical research using test tubes, Petri dishes, cannabinoid molecules, and animal experiments, which confirmed that the therapeutic potential of CBD extends to medical conditions like Alzheimer’s, colitis and Chron’s, epilepsy, fibromyalgia, multiple sclerosis, Parkinson’s, and spinal cord injury, to name a few. This research makes the new DEA CBD oil classification as a controlled substance with “no currently accepted medical use” seem all the more unreasonable.

CBD Oil Legal Rule Sparks Commotion Among Cannabis Businesses

So, what exactly falls within the CBD oil legal codes, based on the DEA’s new rule to govern it? The Administration Controlled Substances Code Number for “Marihuana Extract” (that’s not us speaking – the DEA still likes to use the archaic rendition of the word) is described as “an extract containing one or more cannabinoids that have been derived from any plant of the genus Cannabis, other than the crude or purified separated resin obtained from the plant.” DEA and DEA-certified bodies will now be allowed to individually monitor quantities of these compounds from quantities of marihuana, according to DEA Acting Administrator, Chuck Rosenberg.

The 3-page document clarifies that such marijuana extracts remain in Schedule I. Individuals or organizations that handle marijuana extracts and are certified to handle marijuana (under drug code 7360) must add the new drug code 7350 to their current registrations for DEA CBD oil. Furthermore, they must solicit a quota for drug code 7350 on an annual basis. Anyone who is caught using or selling what is no longer CBD oil legal will be punished just as sternly as users of heroin and ecstasy. Sure, you might be able to grow cannabis, but extracting cannabidiol from it will result in you being punished for committing a federal crime.

Past Legal Cases Pertaining to DEA CBD Oil Laws

This isn’t the first time the marijuana industry has been shaken up by DEA CBD oil laws. On October 9, 2001, hemp seed and oil food products containing surplus traces of THC were instantly banned. Hemp body care and fiber products were also exempt by the rule. An Urgent Motion for Stay was registered on March 28, 2003, by the Organic Consumers Association and Hemp Industries Association, resulting in the 9th Circuit Court of Appeals ruling in the HIA’s favor in February the following year. The 9th Circuit ordered the DEA to fund the Hemp Industry Plaintiff’s Legal Bills in February of 2005, and numerous extensions to appeal ensued.

DEA CBD oil was put in the spotlight once again in 2005 when the Food and Drug Administration (FDA) distributed warning letters to companies that were promoting unwarranted drugs for disease prevention, treatment, cure, mitigation, and diagnosis. Some products tested by CBD Life Holdings LLC, Ultra CBD, Hemp Oil Care, and Natural Organic Solutions were found to contain no CBD at all, whereas 1 mg of CBD or above was detected in the products tested from companies like Canna-Pet LLC and Twin Falls Bio Tech LLC.

Repercussions for Cannabis Oil Manufacturers

The Rule that makes CBD oil legal no more applies to the majority of CBD products being sold in shops and online at present, since CBD is a cannabinoid (along with 80+ other cannabinoids) and hemp is a plant of the genus Cannabis. Legalities referring to the Cannabis sativa L plant imply that firms producing CBDs abroad might be in the clear. Firms producing CBDs in the USA, however, might well be operating illegally, since small amounts of other cannabinoids are detected in extracts that consist of CBD. On the other hand, section 7606 of the 2014 US Farm Bill states that extracts used to make cannabis oil from hemp plants lawfully grown in states that have approved hemp legislation are considered CBD oil legal.

If congress has explicitly legalized extracts from plants in the states they were grown, how does the DEA have the power to control the DEA CBD oil regulations? This is a question that will likely plague the minds of many industry shareholders, but if anything it will propel a plan into action. Cannabinoids, when extracted from certain parts of the plant, are not illegal. Moreover, the industrial plant is deemed lawful in its entirety, based on the Farm Bill’s express authorization of industrial hemp. In response to the DEA’s Rule, administrative procedures, hearing requests, and litigation are a herald of the future success for cannabis corporations.

To learn more about the CBD industry and regulatory concerns, sign-up for our free newsletter using the form to the right.

Bethan Jenkins

About Bethan Jenkins

Bethan is a full-time wanderluster, traveler, and digital nomad with 7 years of experience in the freelance writing world. She has mastered the art of beating jet lag and using hammocks as an office for content curation.


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