DEA drops bombshell announcement to prohibit CBD

The hemp industry woke up this week with some startling news. In an unexpected announcement, the DEA dropped the news that they will categorize Cannabidiol (CBD), and all other cannabinoids derived from the cannabis plant, as a Schedule I drug. In the exact words published on the Federal Register,

“The Drug Enforcement Administration is creating a new Administration Controlled Substances Code Number for ‘Marihuana Extract.’”

new dea rule on cbd

Federal Registrar segment on new DEA rule. 12/14/16.

The DEA just created a whole separate category (and term) to include CBD and all other non-psychoactive cannabinoids as a Schedule I drug. (For context, other drugs categorized as Schedule I: heroin, ecstasy, LSD)

Simply put, the DEA will categorize any “extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant,” as a Schedule I Controlled Substance.

What is CBD? And Why do customers look for it?

A big concern of this announcement is that it will further confuse the general public, especially those that are unfamiliar with cannabinoids. For people who are new to the term ‘cannabidiol’, it’s easy to group them all under marijuana. This new ruling is just going to make it that much more confusing for everyone. Carlos Frias, the founder of Texas Wellness Center, certainly thinks so. “Short term,” he says, “this new rule is going scare off a lot of consumers and retailers.”

CBD intro video

Cannabidiol, along with 80+ other cannabinoids, are naturally found compounds in cannabis. Historically, many different civilizations have used cannabis and its compounds for their healing properties. In the modern era, cannabinoids have gained more attention after the discovery of how they affect our endocannabinoid system. Still in its early stages of research, various lab results and anecdotal testimonials have poured out to show the benefits of the extract. According to a representative of one CBD brand, “The people that are looking for CBD have serious medical conditions…They are looking for something to provide relief without negative effects, and are ready to try something different.” Unlike cannabis products that can be found in dispensaries in cannabis legalized states such as Colorado, hemp CBD extracts does not provide a “high”. As Frias puts it, “Not everyone wants to get high. A lot of consumers want the benefits with out any psychoactive effects.”


Download a PDF version of ‘The Complete CBD Guide’


What this means to CBD businesses & the hemp industry

Businesses, individuals, and livelihoods seem to be destined to suffer from the whims of the DEA and our federal government.

Originally, with the passage of the Agricultural Act back in 2014 (often called Farm Bill), the hemp industry seemed set for a new phase of unprecedented growth. Since 2011, the hemp industry has grown by 40% to hit an annual sales volume of over $600 million in 2014. This growth seems to have continued throughout 2015 and 2016.

In 2015, the CBD market was estimated to have hit $65 million in sales, while the personal care (beauty) brands sold over $147 million. I’ve pointed out the volume of the beauty brands, as several of them do use CBD in their products. Even if they don’t specifically use CBD, hemp oils contain 80+ other types of cannabinoids.

As the numbers suggest, there are hundreds of businesses and thousands of jobs involved in the hemp industry today. Many of these individuals have committed their livelihoods and careers in the hemp industry based off the original definitions of hemp and CBD. They believed in the benefits that hemp brings to our society. They joined a mission to bring healthier, higher quality, and more environmentally friendly solutions to the consumer market.

Sadly, all of these businesses, individuals, and livelihoods seem to be destined to suffer from the whims of the DEA and our federal government. If this new rule is upheld, the US CBD industry will most likely collapse. “Interstate commerce for CBD products will diminish significantly…And it will put US CBD companies at a severe disadvantage in terms of growth and development as compared to international players,” says a representative who wished to remain anonymous.

To be clear, hemp and CBD were and still are completely legal in the US

Let’s make one thing clear: Hemp and CBD have been completely legal to sell under the laws and description of the Farm Bill.

What the Farm Bill Says

Section 7606 of the 2014 Agricultural Act defines “industrial hemp as distinct from marijuana and authorizes institutions of higher education or state departments of agriculture in states that legalized hemp cultivation to conduct research and pilot programs across the country”

Also, this bill specifies that “notwithstanding (or in spite of) the Controlled Substances Act, the entire industrial hemp plant is made lawful.

What the agricultural act says about industrial hemp

Beginning of Section 7606 of the Agricultural Act of 2014

To put in other words, the Farm Bill of 2014 specifically states that the industrial hemp plant is legal in spite of the Controlled Substances Act. But even the section regarding “marihuana” in the Controlled Substances Act clearly states that it excludes “oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks.”

The DEA enters unauthorized territory

It’s confounding how or why the DEA is directly going against its own government

As an executive branch of our government, the Drug Enforcement Agency actually has no authority to expand (or change) the definitions of the law. This announcement also goes directly against laws that have been established to legalize and protect the hemp industry. The two most glaring discrepancies come from the Appropriations Act (2015 & 2016) and the Agricultural Act of 2014.

What the Appropriation Act Says

The Appropriations Act is a bill set by our government that gives money to specific federal government departments, agencies, and programs. According to this bill, none of the funds may be used:

  1. In violation of section 7606 of the Agricultural Act of 2014 (mentioned above)
  2. To prohibit “the transportation, processing, sale, or use of industrial hemp” that is grown or cultivated in accordance with section 7606 of the Agricultural Act of 2014

Under the Agricultural Act, Industrial Hemp is further defined as “Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis.”

If one considers the definition of industrial hemp under the Agricultural Act and the terms of the Appropriations Act, it’s confounding how (or why) the DEA is directly going against its own government.

There was a precedent similar to this


A short look back at history shows that the DEA has tried something similar to this in the past and failed. Back in 2001, the DEA announced a rule declaring that all “hemp seed and oil food products that contain any amount of trace residual THC” would be considered seizable contraband. This rule was effectively criminalizing all hemp seed products in the US.

Yet, in 2004, the Ninth Circuit Court of Appeals ruled unanimously in favor of the hemp industry. They stated that naturally occurring cannabinoids in industrial hemp foods, including oil, were never scheduled under the Controlled Substances Act. In short, the DEA has no authority to regulate hemp foods.

At the time, the court made a compelling analogy, comparing hemp seeds (and hemp derivatives) with poppy seeds. It concluded that “[a]s in the case of poppy seeds commonly consumed on bagels and expressly exempted from the Controlled Substances Act, that come from a non-drug variety of, but the same species as, the opium poppy…non-psychoactive hemp seed products do not contain any controlled substance as defined by the Controlled Substances Act.”

So what does this mean for customers?

It is still too early to tell how this announcement will affect the industry. Hemp law groups and lobbyists are coming together to fight this absurd new rule. It could mean business-as-usual or another period of prohibition for many applications of hemp.


Whatever happens, this type of press and legality issue will only hurt customers who have and could actually benefit from this plant and its naturally occurring cannabinoids. It also sets a dangerous precedent showing that the DEA, a regulatory agency, is more concerned with restricting access to natural alternatives in favor of pharmaceuticals companies than working in conjunction with the scientific community to understand a plant that could provide so much benefits outside of just the psychoactive effects of THC.

CBD and other cannabinoids, despite being in early stages of research, have been known for its medical potential for a variety of conditions. Although there are still debates about its actual benefits, many anecdotal evidence have come out that shows that CBD has helped a wide range of people and even pets.

In a time where we have made steady progress towards full cannabis legalization, this truly is a big blow. It came out of left field and it seems like it might take some time before anything gets settled. We encourage you to take an active role in helping to spread the news about this injustice to as many people as possible. The hypocrisy of our government has to stop and we need your help.




Eighty years ago, the government turned on cannabis and started portraying it as a dangerous, evil plant.