November 2018

CBD Oil – Is It Legal?

By Daniel De La Cruz

Sheppard, Mullin, Richter & Hampton LLP

Over the last few years, cannabidiol (CBD) oil has surfaced as a hot new product with numerous alleged health benefits.  CBD oil is extracted from the flowers and buds of marijuana or hemp plants.  It does not produce intoxication; marijuana’s “high” is caused by tetrahydrocannabinol (“THC”), a chemical not found in CBD oil. 

With a growing market for CBD oil, questions have arisen about the product’s legality.  Although the legal status of marijuana has been recently addressed in every state – and at the federal level – CBD is rarely, if ever, discussed.  This has left consumers wading through a veil of uncertainty when purchasing and using CBD oil, and has likely caused a chilling effect for manufacturers and distributors who are afraid of running afoul of the law.

The confusion surrounding the legality of CBD oil stems from the federal Agricultural Act of 2014, known as the “2014 Farm Bill,” which President Obama signed.  The 2014 Farm Bill recognized the legitimacy of “industrial hemp,” defined as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 [THC] concentration of not more than 0.3 percent on a dry weight basis.”  Agricultural Act of 2014, Pub. L. No. 113-79.  According to the 2014 Farm Bill, a State’s Department of Agriculture may grow or cultivate industrial hemp if it is grown or cultivated “for purposes of research conducted under an agricultural pilot program or other agricultural or academic research” and if the growing or cultivating of industrial hemp is “allowed under the laws of the State in which such institution of higher education or State department of agriculture is located and such research occurs.”  Id.  Many observers and legal analysts viewed this as the beginning of a wholesale legalization of CBD oil.

However, the federal Drug Enforcement Administration (“DEA”) has come out publicly and said the 2014 Farm Bill does not legalize the marketing, sale, or use of CBD oil, or any other products made with CBD; it only legalizes CBD research.  Specifically, the DEA stated: “As the scientific literature indicates, cannabinoids, such as tetrahydrocannabinols (THC), cannabinols (CBN) and cannabidiols (CBD), are found in the parts of the cannabis plant that fall within the [Controlled Substances Act] definition of marijuana, such as the flowering tops, resin, and leaves.”  Clarification of the New Drug Code (7350) for Marijuana Extract, Dep’t of Justice, Drug Enforcement Admin.  However, the DEA left open the possibility that some oils made from cannabis plants could indeed be excluded from the CSA definition of marijuana, if the product consisted solely of parts of the cannabis plant excluded from the CSA definition of marijuana. 

The hemp industry challenged the DEA’s authority to establish new regulations specifically for marijuana extracts, but the Ninth Circuit denied the challenge, citing insufficient grounds to invalidate the DEA’s regulation.  See Hemp Indus. Ass’n v. U.S. Drug Enforcement Admin., 720 Fed. App’x 886, 887 (9th Cir. Apr. 30, 2018).

In April 2018, a bill was introduced by Sen. Mitch McConnell (R-KY) seeking to clarify the legality of CBD oil products.  The bill would explicitly remove hemp products, which include CBD oil, from the list of controlled substances under federal law and permit states to regulate them.  The contents of McConnell’s bill addressing hemp products eventually made its way into the Agriculture Improvement Act of 2018, known as the “2018 Farm Bill.”  The 2018 Farm Bill overwhelmingly passed the Senate in June with bipartisan support, and was initially expected to pass the House.  However, given that the 2018 Farm Bill discusses other controversial measures, like food stamps, the legislation has stalled.  As of the date of this article, there is not yet a timetable for a vote. 

If the 2018 Farm Bill isn’t enacted by the end of the year, Congress will be forced to pass an extension of the 2014 Farm Bill, handing the writing of a new farm bill to an incoming Democratic House that would be more likely to make major changes to the bill’s provisions.  This could delay the bill’s passage even further.  On the other hand, if the 2018 Farm Bill passes, CBD would be legal by the end of the year.

Meanwhile, Special Agent Melvin Patterson, an official DEA spokesperson, recently made clear that “from the DEA’s perspective, CBD is still a Schedule I substance,” meaning it treats CBD the same way that it treats marijuana with respect to federal law.  In other words, it is illegal.  Special Agent Patterson’s announcement came roughly three months after the Food and Drug Administration (“FDA”) approved a drug for epilepsy called Epidiolex, which contains a purified form of CBD oil.  The FDA’s approval, in effect, forces the DEA to exempt one product that contains CBD oil from its enforcement purview, possibly paving the way for other products to achieve a similar exemption.

Until Congress takes action, however, CBD oil should be treated the same way as marijuana, and, until further notice, it should be considered illegal.