CBx Daily Digest

Hemp Industry Worries DEA Rule Puts Extractors At Risk, But Path Forward Unclear

The rule released last month has the industry reeling and wondering what steps to take to ensure extractors aren’t criminally liable. Meanwhile, the DEA is downplaying the likelihood of a crackdown on CBD extraction.

U.S. hemp producers are alarmed about a Drug Enforcement Administration rule that they argue would make extracts a Schedule 1 controlled substance during a portion of the extraction process when the plant’s THC levels spike above what’s allowed.

The rule released last month has the industry reeling and wondering what steps to take to ensure extractors aren’t criminally liable. Meanwhile, the DEA is downplaying the likelihood of a crackdown on CBD extraction.

The rule was released last month to align DEA regulations in response to hemp legalization under the 2018 Farm Bill. But CBD processors were alarmed by language that hemp legalization “does not automatically exempt any product derived from a hemp plant,” because extracts become illegal marijuana if they exceed the legal THC limit of 0.3%.While oil is extracted from the hemp plant and processed, cannabinoid content can rise to up to six times their original level before the oil diluted to the 0.3% THC legal limit for hemp, said Jack Tatum, managing partner at Isolera Extracts in Oxford, North Carolina.

“We remove the THC in processing, but of course it goes over 0.3 (THC)” temporarily, he said, adding there’s no method he’s aware of to prevent THC levels from rising during production.

“What it is is a death blow to the hemp-extraction industry,” he said.

Industry groups and attorneys say they’re evaluating options to address the issue, said Shawn Hauser, a cannabis attorney and partner with Denver-based law firm Vicente Sederberg.

Industry supporters have until Oct. 20 to submit comments on the rule.

Read: Full Story on Hemp Industry Daily

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