Earlier this year, we outlined a potential argument concerning hemp-derived CBD oil and its status under the Controlled Substances Act (CSA). Our argument focused on the CSA’s definition of the term “marihuana,” which excludes mature stalks, oil or cake made from seeds from the list of controlled substances. Last week, the DEA agreed and issued an internal directive with the following key statement:

Products and materials that are made from the cannabis plant and which fall outside the CSA definition of marijuana (such as sterilized seeds, oil or cake made from the seeds, and mature stalks) are not controlled under the CSA. Such products may accordingly be sold and otherwise distributed throughout the United States without restriction under the CSA or its implementing regulations. The mere presence of cannabinoids is not itself dispositive as to whether a substance is within the scope of the CSA; the dispositive question is whether the substance falls within the CSA definition of marijuana.

The CSA exception extends to oils derived from marihuana but not to “resin” derived from marihuana. The DEA’s internal directive does not alter previous statements regarding their coding for marihuana extracts, but notes the drug code for marihuana extract “extends no further than the CSA does.”

The takeaway? As we have previously suggested, CBD oil (but not the resin) derived from the excepted parts of marihuana plants falls outside the scope of the CSA. The fact that CBD oil produced from excepted parts of the plant will be chemically similar to CBD oil produced from non-excepted parts (or the resin of excepted parts) may not be logical but it is driven from the statutory definition. Nevertheless, the logical and scientific inconsistency puts the DEA and purveyors of CBD goods in a precarious position: how will they determine which CBD products are subject to the CSA and will people really be prosecuted for trafficking a Schedule I controlled substance where the substance is chemically indistinguishable from one that is not prohibited by the CSA? We anticipate that at least one outcome will be buyers insisting on statements or warrantees from sellers, and buyer quality control due diligence, that their CBD products contain only excepted marihuana oil.

One further complication: some state prohibitions have different (sometimes broader) definitions or interpretations of what constitutes a controlled substance.