DEA asks court to throw out Hemp Industry Association’s manufacturing challenge

Drug enforcement officials are asking a court to throw out hemp industry arguments that drug enforcers shouldn’t be involved in regulating hemp.

The U.S. Drug Enforcement Administration filed two briefs Monday for separate appeals, saying that the 2018 Farm Bill, which legalized hemp as a commodity, left room for the DEA to regulate substances produced through hemp product creation that exceeds the 0.3% federal legal THC limit.

A lawsuit filed last year by the Hemp Industries Association and South Carolina-based hemp and CBD business RE Botanicals claims that CBD processing creates waste and material that naturally exceeds the 0.3% THC limit, causing a legal problem for companies making consumer products under the DEA’s August 2020 interim final rule.

The rule states that any hemp derivative would be classified as a Schedule 1 illegal substance if it exceeded the THC threshold.

The DEA said the hemp industry’s challenges should be dismissed, saying they cite no evidence that they manufacture or sell substances that contain THC, don’t qualify as hemp or are outside the statutory definition of marijuana or that DEA has threatened them with prosecution, Law 360 first reported.

In a related brief, the agency also rejected the hemp industry members’ legal strategy in which it asked a federal district judge to declare that hemp byproducts fall outside the definition of the Controlled Substances Act and are beyond DEA authority.

Final agency action must be reviewed through the circuit court of appeals and is not under the jurisdiction of the district court, the DEA claimed.

However, the HIA and RE Botanicals have argued previously that they are not challenging the DEA’s rule under the Administrative Procedure Act, so moving the case to the circuit court is not appropriate.

They said in a September brief that Congress intended under the 2018 Farm Bill to make the U.S. Department of Agriculture the sole regulator of hemp production, and not the DEA, with a defined exemption for the U.S. Food and Drug Administration.

The appeals will be argued before a Washington DC circuit panel at the same time; however, the schedule is unknown.