While cannabis products have been used for thousands of years in major countries arond the world, marijuana was freely grown, sold, and used from the foundations of the United States. Around 1840, doctors came to believe that cannabis had significant medical value, and for the next century was freely sold in pharmacies. Starting in 1860, different states in the US started to implement regulations for sales of Cannabis sativa, and by 1905 a Bulletin from the US Dept of Agriculture listed twenty-nine states with laws mentioning cannabis. The Marijuana Tax Act of 1937 made cannabid possession illegal in the United States, except for industrial or medical purposes.

US Controlled Substances Act

The Controlled Substances Act (CSA) passed as part of the Comprehensive Drug Abuse Prevention and Control Act of 1970 is the law establishing federal US drug policy, under which the manufacture, importation, possession, and use of controlled substances is regulated.

In the CSA, "marihuana" is classified as a Schedule I drug in Subchapter I, Part B. That means that according to the CSA Schedule I,

• The drug or other substance has a high potential for abuse.
• The drug or other substance has no currently accepted medical use in treatment in the United States.
• There is a lack of accepted safety for use of the drug or other substance under medical supervision.

Often overlooked, though is the definition in Subchapter I, Part A which is the definition of "marihuana."

The term "marihuana" means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

The question arising from this definition is related to whether commercial or industrial Hemp is excepted from the CSA. In October of 2001, the DEA (Drug Enforcement Administraion) released an official position which claims that any hemp product made for human consumption, containing any level of THC would be a subject to the CSA.

Hemp Industries Assoc v DEA, 2004 Circuit Court Ruling

The DEA was challenged in court by the Hemp Industries Asscociation and others, and the 9th Circuit found that the exception in the definition of "marihuana" found in the CSA still holds, regardless of the amounts of trace THC in the products. However, it is important to note that the exception for hemp relates very specifically to industrial hemp, grown for seed and stalk. The HIA v DEA ruling is linked here.

The Court ruled that cannabinoids contained within "industrial" hemp were naturally occurring and outside the regulatory scope of the DEA and the CSA, even if they contained trace amounts of THC.

The stipulation of importance was that the hemp had to be processed from 1)

In the 2004 9th Circuit Court ruling between the Hemp Industries Association (HIA) and the United States Drug Enforcement Administration (DEA), the Court ruled that cannabinoids contained within “industrial” hemp were naturally occurring and outside the regulatory scope of the DEA and the Controlled Substance Act (CSA), even if they contained trace amounts of THC.

The stipulation of importance was that they hemp had to be processed from 1) mature, 2) male and female plants (seed producing), and 3) be processed from the whole plant material. The ruling clearly states that material processed similarly to how marijuana is grown – from concentrated resins of female plants from buds – is not included in the hemp exemption from the CSA. It would still be classified as marijuana, and therefore any material containing CBD or THC at any level would be treated as illegal.

This ruling does not stipulate a specific legal limit of THC in the industrial hemp.

Hemp Plants vs Marijuana Plants

Scientifically, industrial (also called commercial, or agricultural) Hemp and Marijuana are the same plants, with a genus and species name of Cannabis Sativa. The major difference is how industrial hemp has been bred compared to a marijuana form of Cannabis sativa.

Hemp plants typically speaking, are tall up to 10 ft tall with very fibrous, with long strong stalks. Because they are planted with male and female seeds, the flowers pollenate and form copious amounts of hemp seeds on each stalk. When processed, the stalks, seeds, and leaves are separated for different processing - the stalks for fiber, the seeds for hemp seed oil, hemp hearts, hemp protein powder, etc., and finally the leaves are used to extract the cannabinoid oil with CBD.

Marijuana plants are normally smaller and more like a bush. They are typically cloned from other plants, using only female plants so that the flowers are never pollenated, and never go to seed. The flowers and trim are harvested and extracted to get your cannabinoid oil.

Strains of Hemp and Marijuana are both hybridized and bred to contain varying amounts of THC and CBD, terpene profiles, etc. The term cannabis oil can refer to both hemp derived oils as well as marijuana-derived oils.

It is often confusing when people refer to hemp oil as well, as some people refer to hemp seed oil as hemp oil. So it is common in the industry to refer to hemp seed oil separately from hemp extracts which is the cannabinoid-rich extract from the hemp plant leaves.

In any case, the legal exception for hemp-derived products from the CSA is specific to hemp plants, grown for seed and stalk, and therefore, marijuana-derived CBD products legal status is very different and not technically legal to be sold across state lines.

Agricultural Act of 2014 Sec 7606

The federal Agricultural Act of 2014 Sec 7606 - Legitimacy of Industrial Hemp Research states that indiviudal states can authorize pilot programs on the research on Industrial Hemp, providing the hemp has a THC level under 0.3%. This 0.3% definition specifically applies to hemp grown in the US under this specific law. While the 2004 Circuit Court ruling said that trace amounts of naturally occurring THC in hemp plants was legal, no specific numerical limits were set. This is the first Act which identified the 0.3% limit. So generally, the 0.3% limit has stuck in the industry, regardless of where the hemp products are sourced.

As part of this Bill, the hemp is grown for R&D purposes only, authorized state by state, and is not allowed to be sold across state lines. The text of this section can be found here.

There are a number of high-profile companies which supply CBD nationally from domestically grown hemp plants and also domestically grown CBD from high-CBD marijuana plants, which is still technically illegal under the law.

H.R.2029 - Consolidated Appropriations Act, 2016

Congress, as part of the Omnibus funding bill in December 2015, included as part of the bill, the following section, which prohibits the use of federal funds to prosecute anyone in violation of the 2014 Ag Bill.

Sec 763 - None of the funds made available by this Act or any other Act may be used --

(1) in contravention of section 7606 of the Agricultural Act of 2014 (7 U.S.C. 5940); or

(2) to prohibit the transportation, processing, sale, or use of industrial hemp that is grown or cultivated in accordance with subsection 7606 of the Agricultural Act or 2014, within or outside of the State in which the industrial hemp is grown or cultivated.

The full text of the act can be found here.  As future spending bills are authorized by Congress, it should be noted that this prohibition may or may not be included in future bills. Also, this does not prohibit States from using State funds to prosecute State laws related to hemp growing.

To reiterate the point about Industrial Hemp and regulations in the US, the following Notice was issued.

Statement of Principles on Industrial Hemp, Aug 12 2016

In Aug of 2016, the US Dept of Agriculture, Department of Justice, DEA, Dept of Homeland Security, and FDA issued a joint Statement of Priniciples on Industrial Hemp which states again clearly that hemp products grown within the US are subject to certain laws, and are not legally allowed to be sold across state lines.  The text of the notice can be found here.  Therefore, to be completely legal, the hemp products should be sourced from overseas suppliers to stay in compliance with the law.

FDA Warning Letters, Feb 2016 - CBD is a Pharmaceutical, not a Dietary Supplement

Typically the FDA has limited power to regulate dietary supplements, but in Feb of 2016 issued a number of warning letters to suppliers of CBD products. In those letters, the FDA unilaterally concluded that:

2017 DEA Ruling on Marijuana Extracts in the Controlled Substance Act

On December 14, 2016, the Federal Register published information concerning a Final Rule enacted by the DEA pertaining to a change to 21 CFR 1308. This was due to take effect in January of 2017. In this notice, the DEA has created a new Administration Controlled Substances Code Number for “Marihuana Extract.” According to the Federal Register, “[t]his code number will allow DEA and DEA-registered entities to track quantities of this material separately from quantities of marihuana” in order to comply with “relevant treaty provisions.” The original ruling is found here.

There was significant confusion as it seemed that this would make hemp-based CBD extracts illegal again. The DEA later published a clarification stating that products from hemp which were already exempted from the CSA are still exempted. That clarification can be found here.