Hemp & Cannabis – A new Sheriff in Town?

HEMP, CANNABIS & THE CSA

There are three inflection points in the Controlled Substances Act (CSA) of 1970 that are of significance to the cannabis plant, and industrial hemp (yes, hemp’s genus is cannabis sativa, just like marijuana) was moved to the third on December 20, 2018:

1. Schedule I or II
2. Schedule III, IV & V
3. Not Scheduled

Cannabis is currently Schedule I, the worst place to be on the 5 tiers. Without going into the details of the CSA, this is “bad” for business because the punitive tax laws of § 280E only apply to schedules I and II.   At least we now have clarity that industrial hemp and derived products will not be subject to § 280E in 2019.

With industrial hemp no longer scheduled under the Controlled Substances Act, or under the jurisdiction of the DEA as of the passing of the Agricultural Improvement Act of 2018, there is a new Sheriff in town – the U.S. Food & Drug Administration.  The FDA will begin reining in CBD slingers and ultimately the THC traffickers (when it’s no longer considered “trafficking”).  The FDA Commissioner issued a statement on the same day that industrial hemp (<0.3% THC) and its derivatives became legal.  Be aware that as the regulatory landscape changes, new guidance, compliance requirements, and enforcement actions will be coming from the FDA, and they clearly fired a warning shot to signal that the wild-west days of gas station CBD are unacceptable.

With industrial hemp no longer scheduled under the Controlled Substances Act, or under the jurisdiction of the DEA as of the passing of the Agricultural Improvement Act of 2018, there is a new Sheriff in town…

SPECULATING ON MARIJUANA REFORM

How will the ball of yarn unwind when federal prohibition of THC comes to an end is anybody’s guess, but in the long-run, the FDA will be the most likely candidate to regulate everything from hemp derived CBD to THC containing lip balms to pre-rolled medical marijuana joints.  FDA/ DEA collaboration regarding the treatment of Epidiolex may be a harbinger of THC’s regulatory future. On September 27th, 2018, the DEA lowered a lone CBD containing medicine (Epidiolex) from Schedule I to Schedule V and announced that drugs with THC content below 0.1% will be considered Schedule V drugs if they have been approved by the U.S. Food and Drug Administration (FDA).  Does this mean that 0.1% THC will be the magic number for FDA approval?  Or will they have to consider up to 0.3% THC when looking at industrial hemp derived products? Probably?

Could the not too distant future see medical marijuana approved by the FDA moved to Schedule V while recreational marijuana remains Schedule I (bifurcating the taxation of the two)?  Maybe?  Could we see THC regulated as alcohol and tobacco which are not scheduled by the CSA?   Questionable.  In any event, “marijuana reform” should at least provide relief from the punitive tax law § 280E, and allow marijuana businesses safe access to banking while their customers have safe access to cannabis.

• 280E could be repealed by Congress, or if the DEA were to determine that cannabis had less potential for abuse than narcotics like methadone, oxycodone, morphine, opium etc., and abuse of cannabis may lead to moderate or low physical dependence or high psychological dependence, then cannabis could make it to Schedule III and § 280E would no longer apply. Drugs currently in Schedule III include Vicodin, Tylenol with Codeine, and Suboxone.

Now that we have all of that figured out (sarcasm), let’s grab some popcorn and watch how massive corporations work with the FDA to get industrial hemp derived products on the shelves of every pharmacy in the nation in 2019.