ko•an
ˈkōän/
Noun, a paradoxical anecdote or riddle.
Starting in 1994, my professional mission was to keep undeclared, undisclosed Cannabinoids out of our commercial foods, while starting what was the emerging hemp food industry. Knowing consumer confidence in our food was paramount for success, I took a bold position for the young industry: the first and only “No THC” policy. It was successful enough to get consumers to accept it, inspiring today’s hempseed and food companies. In so doing I learned some things about Cannabinoids that I now apply to Cannabidiol (CBD) products, as Executive Director of the Medicinal Hemp Association.
In the world of Cannabis, few subjects are as misunderstood as CBD. Whether history, source, types, forms, function, application, or legality, CBD is a relatively empty palette for people to imprint their beliefs on. From conservative Christians in conservative states making it to save their children a life of torture, to 99% pure from scientists in Switzerland; from “ineffective hemp medicine,” to “98% of the planet’s CBD is in hemp.”
The legality of CBD might be Cannabis’ Rorschach Test: whichever you choose to believe, you will see. If you want to see it as illegal, you can and will. If you choose to see it as legal, that is an equally-plausible option. An argument can be made for both, but at the end of the day if it walks like a duck, and quacks like a duck… then it’s legal. The only difference is how you choose to see it, which reveals much about you. It’s also a good measure of a hemp trade association: do they think it’s legal, or are you a RICO felony waiting to happen to them?
After all, there’s never been an arrest or criminal seizure for CBD. After thousands of transactions a week, over several years, online and retail, national distribution across state lines. With much national and worldwide publicity on CNN, New York Times, and the Wall St Journal.
DEA, FDA, DOJ, Customs, state Departments of Agriculture, NORML’s Law Committee, Ninth Circuit Court, 10,000 law enforcement agencies, 50 state Attorneys General, 50 state drug squads, public companies regulated by SEC, dozens of professional venture capitalists, Amazon (after a months-long investigation), USPS, FedEx, and UPS all act like it is legal. Imports continue unabated.
Let’s explore why that might be. First, some basics:
Hemp has been in America since it was settled, having been brought over to Jamestown in 1605. Settlers were required to grow it (as did all the Founding Fathers), taxes could be paid in it, and it powered the diesel, and helped us win WWII. At one time the government owned 12 hemp mills during the war.
Since the last crop in 1957, hemp fell out of favor until recently. Today, about millions worth of hemp is imported from Canada (90% of it the segment I started with HempNut). However, the economics and importance of hemp have shifted the last few years.
Today, it is more about non-psychoactive medicine for the sick and dying, than fiber for clothes. Cannabidiol (CBD) is the non-psychoactive, non-toxic, non-addictive, legal Cannabinoid good for 100% of the human and pet population. Popularized by Dr Sanjay Gupta on 3 documentaries on CNN, CBD is a safe and effective treatment for seizures, inflammation, cancer, and much more.
The government has already approved CBD medicines, and issued many CBD patents. Not only has the moral imperative changed but the economics as well. While fiber returns $525/acre, and hempseed $900/acre, CBD returns much more per acre. Hempseed, hemp protein and hempseed oil are exactly as legal, or not, as CBD.
Over 90% of the CBD on the planet is in hemp, which is by law less than 0.3% THC. In 2015, the value of just CBD in just Colorado will exceed all the hemp imported from Canada last year by 4 times. CBD hemp is best with non-certified cultivars, typically proprietary ones as high as 26% CBD. It can be grown indoors or out (in 2014, 1/3 of CO hemp licensees were indoor).
In 10 years, it could be a $200 billion crop. Hemp is by far the best source for CBD, including many indigenous US feral (heritage) hemp cultivars. High returns from CBD can also reduce the cost of hempseed and fiber.
This newest medicine, CBD, is mankind’s oldest, from the millions-years-old Cannabis plant, it was discovered in 1940, but came onto the scene only starting in 2013. While marijuana had CBD bred out since the ‘60s as it reduced the THC “high,” hemp was never selected for high, so the CBD remained untouched and is the main Cannabinoid in hemp, and second-most in marijuana.
If you want a definitive word on the legality of CBD, you’re out of luck. The Federal agencies appear dead-set against admitting the obvious. Therefore, it’s a risk management continuum, and you have to decide where you are willing to be on it. I look at not just one data point, such as CSA 1970, but rather the entirety of facts and history of action or lack thereof, in context. My bias is towards action, how and why to do something, not why not to do it. There are many shades of gray between total illegality at one end and total legality at the other. That’s where CBD (and hempseed and oil) lives.
I admit I’m willing to be novel, and push the envelope. Others might pursue a more conservative course. In 1994 I was told I would be arrested for making hemp foods and importing seed without a sterilization certificate. I wasn’t. Events like that inform my perspective today, so I’m more willing to live at the margins. Others with a whole lot more on the line than me have independently come to the same conclusion.
Legality of Cannabis in America in 2015 is not a grand XXI Amendment consideration, as was alcohol prohibition. There are just too many moneyed fingers in the Cannabis Prohibition pie for governments to do the right thing. Therefore, legalization is incremental. It’s examining the entirety of the issue, not just one statute or court decision, triangulated with the government’s signals via its actions.
The legality basics: growing hemp is not illegal under the Controlled Substances Act of 1970 (CSA), but requires prospective growers to first obtain a registration from DEA (DEA Form 225 – Manufacturer, Distributor, Researcher, Analytical Laboratory, Importer, Exporter).
The Controlled Substances Act exempts hemp: “The term ‘marihuana’ means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.” Meaning only cultivation, tops/flowers, resin, and viable seed are Controlled.
On February 6, 2004, the Ninth Circuit issued its opinion in Hemp Industries Ass. v. Drug Enforcement Admin., 357 F.3d 1012 (9th Cir. 2004). The Ninth Circuit concluded that “…Congress did not regulate non-psychoactive hemp in Schedule I.” The court then looked to whether DEA followed appropriate procedures to schedule non-psychoactive hemp as a controlled substance. The Ninth Circuit held that “DEA’s action is not a mere classification of its THC regulations; it improperly renders naturally-occurring non-psychoactive hemp illegal for the first time.” The court noted, “[w]e find unambiguous Congress’ intent with regard to the regulation of non-psychoactive hemp.” The Ninth Circuit concluded that DEA “cannot regulate naturally-occurring THC not contained within or derived from marijuana, i.e., non-psychoactive hemp products, because non-psychoactive hemp is not included in Schedule I.”
Hemp activists and the Plaintiffs called it a victory on September 28, 2004, when DEA didn’t appeal the decision to the Supreme Court, after mounting a tepid defense in the case in the first place. This decision is why Cannabinoids in or from hemp are legal, including THC, CBD, and CBN et al.
The same activists telling us today that “DEA says CBD is Scheduled so we must listen to them,” said back then that DEA can’t be trusted when it comes to hemp.
Without DEA registration, it is currently illegal to cultivate industrial hemp in the US. Even if a cultivator has a state-issued license or permit, they still need to get a registration from DEA to grow industrial hemp, or have an established relationship with a state department of agriculture or an institution of higher education, per Section 7606 of the 2014 Farm Bill. If not, the cultivator may face federal charges or property confiscation. To date, that has not happened even though some have openly cultivated large acreages of hemp in Colorado since 2013.
Section 7606 is the Federal mechanism to temporarily allow hemp in the states. Some interpret the language to mean only research institutions may participate, but in fact nothing in the Section excludes others. “Research” includes market research, or selling products.
Others interpret it to not allow the use of tops/flowers, and that companies should ask for affidavits from suppliers that their CBD is not from tops. The Medicinal Hemp Association advises strongly against that, as it encourages fraud, and sources of supply are trade secrets.
One emerging product to keep an eye on is eCigarettes, which are small personal vaporizers which aerosol nicotine and a liquid carrier.
Cannabis laws have always protected the government monopoly on it. Not an Illegal Drug, rather it is a Controlled Substance. The Marihuana Tax Act and the states’ versions of it all required buying a tax stamp, not something you would require of an “illegal drug” you were trying to ban. Today, that government monopoly is exercised by Scheduling, FDA regulation, research-only hemp, and certified cultivars. Cannabis was always viewed as a source of taxation and control, not an evil drug that must be stopped.
The best state hemp laws remove all regulations upon federal de-Scheduling, and raise the 0.3% max THC to 1% or 5%.
Carl Olsen’s de-Scheduling claim is compelling: he sued DEA maintaining that Congress placed a condition (must have no medical value) on Federal Schedule I that has been met 38 times already, and thus is unlawful. Removing Cannabis from Schedule I has enormous implications for hemp, from sales and distribution of hemp flowers, resin and products, to viable seed import and distribution, to legalizing federally actual cultivation.
Timeline of Incremental Hemp Legality in the US, 1937-2015
1937
The Marihuana Tax Act (MTA 1937) passed, and exempted hemp: “…(b) The term ‘marihuana’ means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds, or resins; but shall not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.”
US Patent and Trademark Office goes on to issue many hundreds of patents pertaining to hemp.
1941
President Roosevelt signs an Executive Order that allows for emergency hemp production for industrial uses during War World II for canvas, cordage, rope, oil and fodder. Processing plants in many Midwest states were subsidized by the Federal government to produce industrial hemp in support of the war effort.
1947
President Truman issues Executive Order that identifies hemp as a strategic resource.
1953
President Eisenhower issues Executive Order that identifies hemp as a strategic resource.
1957
Rens Hemp Co. closes doors due to lack of demand, growing and processing hemp in Wisconsin continuously since MTA 1937.
1969
MTA 1937 found an unconstitutional violation of the Fifth Amendment by SCOTUS.
1970
In response, the new Controlled Substances Act (CSA 1970) is passed, and exempts hemp just like MTA did: “The term ‘marihuana’ means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.”
1973
Drug Enforcement Administration (DEA) formed by Nixon. Today with a budget of $2.4 Billion dollars, over 10,800 employees and 5,500 Special Agents, cost per arrest is $90,000.
1987
In Grinspoon v DEA, SCOTUS ruled that Food, Drug and Cosmetic Act 1938 (FDCA) interstate marketing provisions do not apply to drugs manufactured and marketed wholly intrastate. Compare 21 U.S.C. § 801(5) with 21 U.S.C. § 321 (b), 331, 355(a). Thus, it is possible that a substance may have both an accepted medical use and safety for use under medical supervision, even though no one has deemed it necessary to seek approval for interstate marketing. This will later be a very helpful ruling for hemp products.
1988
DEA administrative law judge Francis Young rules in favor of NORML’s suit requesting re-scheduling of Cannabis, calling it one of the “safest therapeutically active substances known to man.” Overturned on appeal in 1994, when the Court ruled Scheduling is political, not scientific.
1989
Carl Olsen of Iowa sues DEA, maintaining that Congress placed a condition (must have no medical value) on Federal Schedule I that has been met 38 times already, and thus is unlawful. SCOTUS declines to hear the Federalism challenge, citing Standing (Olsen must sue Iowa to force the issue, who can then sue the Feds). Removing Cannabis from Schedule I has enormous implications for hemp, from sales and distribution of hemp flowers and products, to viable seed distribution, to legalizing actual cultivation.
1993
HempAgroTec receives DEA permit to grow hemp in California’s Imperial Valley, USDA is involved.
1994
Sharon’s Finest marketed “Hemp Hummus” containing hemp seed, stalk, and flowers, in early 1994, therefore these ingredients are Grandfathered for the purposes of DSHEA 1994.
President Clinton issues Executive Order that identifies hemp as a strategic resource.
Sharon’s Finest introduces HempRella and Hempeh Burger, the first professional, perishable hempseed foods, with a large neon green leaf, to national and international distribution. No Customs, FDA or DEA enforcement. Whole Foods Markets will have a ban on hemp foods for the next ten years.
The Dietary Supplement Health Education Act (DSHEA) is passed, and will later be the law that allows hemp products containing Cannabinoids to be legally marketed as “dietary supplements,” just like vitamins and botanicals.
In DSHEA, a “New dietary ingredient“ is defined by FDA as a food or dietary supplement ingredient not in distribution before 10/15/1994. Sharon’s Finest marketed a Hemp Hummus in early 1994 which contained hemp seed, hemp stalk, and hemp flowers.
1996
HempNut Inc. begins the first legal importation of hempseed expressly for human consumption and which was not sterilized or heat-treated, namely shelled hempseed. No Customs, FDA or DEA enforcement.
FDA is aware of the presence of Cannabinoids in hempseed oil, delegates enforcement of the FDCA on hempseed food and oil to the states.
1999
Arkansas legalizes hemp.
North Dakota legalizes hemp.
California legalizes hemp.
Illinois legalizes hemp.
New Mexico legalizes hemp. Gov Gary Johnson vetoes it. Yes, Gary Johnson, the pro-pot Libertarian, vetoed a hemp-only bill while Governor.
Montana legalizes hemp.
Minnesota legalizes hemp.
Hawaii legalizes hemp.
DEA permits Hawaii’s hemp project, first since 1993, including seed import.
Kenex certifies presence of 10 ppm THC in hempseed and oil for human consumption on export documents to US, which is an admission of a felony under penalty of perjury. Shipments detained, high-level negotiations end in release of shipment and no future enforcement.
US Customs Tariff Schedule lists hempseed and oil.
2000
DEA destroys hemp crop of Alex White Plume of the Oglala Sioux Tribe, thereby violating a treaty.
Vermont legalizes hemp.
Maryland legalizes hemp.
US Customs’ THC testing protocol USCL Method F0-03 is introduced, which allowed up to 1 ppm THC in foods, oils, and other hemp products. In a zero-tolerance land, this was huge. They could have specified a lower standard, but chose 1 ppm, which was easily achievable by hempseed product importers 99.9% of the time.
BATF allows use of hemp in alcoholic beverages.
2001
DEA’s Interpretive Rule stated that as long as hempseed foods and oil did not contain THC (<1 ppm), they were legal. Since all primary hempseed products have to be imported, US Customs’ 1 ppm THC standard is what controlled. This was a huge victory for hempseed food companies, as until then it was a gray area. DEA stated it was not a ban on hemp foods, just a clarification of what we all knew all along: no THC in foods.
The fiber trade association Hemp Industries Association sues DEA to block its legalization of hempseed foods and oils, against the advice of its own Chair of the Food and Oil Committee, and only American with the burden of compliance.
DEA destroys hemp crop of Alex White Plume of the Oglala Sioux Tribe, thereby violating a treaty.
Kentucky legalizes hemp.
Arizona legalizes hemp.
TestPledge publicizes existence of 5 ppm THC (undeclared and undisclosed illegal Schedule I Controlled Substance) in hempseed oil of member companies. No Customs, FDA or DEA enforcement.
2002
Ninth Court grants stay on DEA’s legalization of hempseed foods from the previous year.
Dr. George Weiblen at University of Minnesota has held a DEA permit every year, to the present, for hemp research.
DEA destroys hemp crop of Alex White Plume of the Oglala Sioux Tribe, thereby violating a treaty.
DEA obtains restraining order against hemp cultivation against Alex White Plume, the only farmer in the US to be specifically prohibiting from growing hemp. Even though he’s not actually in the US, but rather the sovereign Oglala Nation.
West Virginia legalizes hemp.
2003
DEA again attempts to legalize hempseed foods and oils, and again the fiber trade group sues to stop it.
2004
After the Final Rule of 2003 was published, HIA sued DEA, and won. “HIA v DEA 2004“ is the basis for today’s Cannabinoids-in-hempseed-oil legality. Hempseed food market can finally start to recover, dead for 2.5 years.
2007
DEA permit issued to North Dakota State University to research hemp.
2009
CBD hemp cultivation begins in Colorado, quietly.
Ogden Memo is silent on hemp, but appears to allow it as long as it is state-regulated.
Maine legalizes hemp.
No DEA enforcement against open and notorious hemp farmers in Colorado.
2010
CBD hemp cultivation expands in Colorado.
2011
Cole Memo is silent on hemp, but allows more latitude for states which regulate Cannabis.
CBD hemp cultivation expands in Colorado.
2012
President Barack Obama issues Executive Order that identifies hemp as a strategic resource.
Colorado Phytoremediation Bill passed, allowing hemp.
Amendment 64 passes in Colorado, allowing hemp and local control of it. DEA stays out of the campaign.
CBD hemp cultivation expands in Colorado.
2013
Colorado farm Ryan Loflin defies CSA and state law and plants a large acreage to hemp, thereby exposed to life in prison and loss of the family farm. Nothing happens except a public harvest.
California legalizes hemp.
Connecticut legalizes hemp.
Delaware legalizes hemp.
Maine legalizes hemp.
Colorado establishes an industrial hemp program within the state Department of Agriculture.
CBD hemp cultivation expands in Colorado.
2014
NORML Law Committee lawyer states enforcement of CSA against CBD “would not survive a motion to dismiss.”
DEA, FDA, DoJ, Customs, Colorado Department of Agriculture, NORML’s Law Committee, Ninth Circuit Court, 10,000 law enforcement agencies, 50 state Attorneys General, 50 state drug squads, public companies regulated by SEC, most of the Colorado hemp licensees, dozens of professional venture capitalists, Amazon (after a months-long investigation), USPS, FedEx, and UPS all believe and are operating under the premise that CBD products are legal. No Customs, FDA or DEA enforcement.
Alabama legalizes CBD hemp.
Florida legalizes CBD hemp.
Oregon legalizes hemp.
Indiana legalizes hemp.
Kentucky legalizes CBD hemp.
Nebraska legalizes hemp.
New Hampshire legalizes hemp.
South Carolina legalizes CBD hemp.
Tennessee legalizes hemp.
Tennessee legalizes CBD hemp.
Utah legalizes CBD hemp.
Washington legalizes hemp.
Wisconsin legalizes CBD hemp.
DEA spokesperson said “all chemicals in marijuana are illegal, but with hemp it is ‘squishy.’” That revealed the extent to which DEA realizes its limitations enforcing CSA 1970 on Cannabinoids in hemp products, due to HIA v DEA 2004.
There were 286 state-registered hemp farms in Colorado, complete with GPS coordinates, which DEA could target. But they don’t. DEA has not even threatened to, nor tried to intimidate farmers.
Kentucky plants hemp. No DEA enforcement.
Section 7606 of the Agricultural Act of 2014 (Farm Bill) includes a provision to allow states to regulate hemp, lowers 4 states’ 1% max THC to 0.3%.
Two bills are introduced to allow hemp (HR525 and HR5226), 5226 blocks FDA enforcement against CBD as well.
DEA permit issued for hemp research to the Kentucky Department of Agriculture.
A second DEA permit issued for hemp research to the Kentucky Department of Agriculture.
DEA permit issued for hemp research to the Colorado State University.
DEA permit issued for hemp research to the University of Colorado, Boulder.
DEA permit issued for hemp research to the University of Kentucky, Murray.
Hemp cultivation expands in Colorado, 1/3 of the 286 hemp licensees are “indoor,” meaning mostly CBD hemp.
2015
Arizona legalizes hemp.
Georgia legalizes CBD hemp.
Iowa legalizes CBD hemp.
Maryland legalizes hemp.
Minnesota legalizes hemp.
Mississippi legalizes CBD hemp.
Missouri legalizes CBD hemp.
Texas legalizes CBD hemp.
Nevada legalizes hemp.
North Dakota legalizes hemp, for the third time.
Virginia legalizes hemp.
DEA permit issued for hemp research to the University of Hawaii, Manoa.
DEA permit will be issued for hemp research to a University in Washington.
DEA permit will be issued for hemp research to a University in Oregon.
DEA permit will be issued for hemp research to a University in Tennessee.
DEA permit will be issued for hemp research to a University in Alaska.
DEA permit will be issued for hemp research to a University in North Carolina.
DEA permit issued for hemp research to Purdue University in Indiana.
DEA permit will be issued for hemp research to a University in North Dakota.
DEA permit will be issued for hemp research to a University in West Virginia.
DEA permit issued to Colorado State University.
DEA permit issued to University of Colorado at Boulder.
DEA permit issued to Tennessee Department of Agriculture.
FDA sends compliance letters to CBD companies, makes no mention of CSA 1970 or illegality, only impermissible health claims.
Value of CBD hemp in just Colorado is expected to exceed all other US hemp imports by a factor of five.
Congressional Research Service publishes “Hemp as an Agricultural Commodity.”
HR525, the “Industrial Hemp Farming Act of 2015” is introduced. As of this writing it has 39D and 24R cosponsors, and has a 1% chance of passing.
S134, companion bill to HR525, is introduced. As of this writing it has 5D and 4R cosponsors, and has a 0% chance of passing.
HR1635, the “Charlotte’s Web Medical Access Act of 2015” is introduced. As of this writing it has 29R and 27D cosponsors, and has a 2% of passing. This is the same as HR525, except it also blocks FDA enforcement of FDCA against hemp.
S1333, companion bill to HR1365, is introduced. As of this writing it has 5D and 4R cosponsors, and a 1% chance of passing.
END
Finally in December 2018, Congress passed the 2018 Farm Bill
legalizing hemp in the U.S. federally… at least until the 2023 Farm Bill.
Excerpted from The CBD Koan: One Perspective of the Legality of Hemp and Hemp Cannabinoids by Richard Rose, written in 2015.