The Law of CBD: Commercial Legality Under Federal and State Law

Among the components of psychoactive cannabis plants (flowers, stems and leaves), and non-psychoactive hemp (leaves and stems, having no more than 0.3% by weight of psychoactive THC, tetrahydo-cannabinol), is cannabidiol (CBD). CBD has an anti-inflammatory effect on the human endocannabinoid receptor system. Research into CBD's impact on inflammatory disorders, which include many common illness symptoms, has been blocked in the United States with rare exceptions, but studied comprehensively in other countries. The purpose of this post is not to establish or inventory CBD's health benefits; rather, this post describes the legality of CBD extract sales under state and federal law.

Federal Law

The lawyer leading federal court litigation for the national Hemp Industry Association (HIA) –- Robert Hoban of Denver CO –- against the Drug Enforcement Agency of the US Justice Department (DEA), views the legality of CBD on the basis of the plant from which it was extracted. CBD can be extracted from non-psychoactive hemp -– a form of cannabis that looks more like bamboo than leafy, cola-flowering psychoactive marijuana, hemp having no more than 0.3% THC; another source of CBD is the “mature stalk” (stem) of psychoactive marijuana, provided the stem-source contains less than 0.3% THC. Both sources, and thus the CBD extracted from those plants, are legal under federal law, even if trace amounts (under 0.3%) of THC are present in the extracted CBD. From Attorney Hoban's article [with my comments and edits]:

In the HIA Suit, the Court unequivocally determined that hemp (and its derivatives) produced domestically under the ‘Farm Bill’ is not a controlled substance[,] ... finding that the Farm Bill (as it relates to hemp) “preempts” the Controlled Substances Act [federal prohibition law, 21 USCS 801, et seq. (CSA)]; Congress created an exception for hemp from the CSA.  Farm Bill hemp is not a controlled substance.

But what about CBD (or other cannabinoids)?  The DEA’s briefing [public comments on its legal authority to regulate CBD] clearly states that the DOJ does not “seek to control cannabinoids,” and that only cannabinoids derived from marijuana (e.g., flowers and resins of a cannabis plant above .3% THC) are controlled (under the CSA).  And the Court recognized the same.  In other words, CBD (or other cannabinoids) are controlled substances only if derived from [psychoactive] marijuana [excluding stems with under 0.3% THC].  Farm Bill hemp is not a controlled substance – without debate.

Taken further, in the HIA Contempt [litigation], a Stipulation was reached (on May 22, 2018) whereby the DEA issued a directive to federal agencies (Customs and Border Patrol, in particular)[; the stipulation] states that cannabinoids are not controlled substances unless they fall under the definition of [psychoactive] marijuana, and that the “mere presence of cannabinoids” [including THC] in any product or derivative does not render it a controlled [and thus illegal] substance.  Specifically, the DEA issued internal and external directives to Federal agencies, contain[ing] agreed-upon [between the HIA and the DEA] language, which clarified that the mere presence of cannabinoids does not render ANY material a controlled substance. ... In other words, cannabinoids (CBD is one) are not controlled substances. ... The threshold issue is whether the source of the material is lawfully derived from a lawful portion of the cannabis plant, or from hemp produced under the Farm Bill.  If the source is lawful, then the derivatives or extracts are lawful under the CSA – 100%.

State Law

Under state law, hemp cultivation, product manufacturing and sales are regulated under G.L. c. 128, sec. 116-123 (state hemp law), and require licenses issued by the state Department of Agricultural Resources (MDAR) for lawful commerce in all three tasks. That agency has not yet issued comprehensive final regulations for its consideration and award of licenses, although it issued an “Interim Policy” for its “Commercial Industrial Hemp Program” on April 30, 2018. MDAR's interim policy allows commercial hemp cultivation, processing or sale for this year (2018), after a prospective cultivator-manufacturer-retailer submits a hemp license application that the state agency approves. The interim policy explicitly allows CBD extraction from hemp. This interim policy apparently applies only to hemp newly cultivated or processed in Massachusetts; CBD extracted from hemp or the non-psychoactive stems of marijuana produced outside of Massachusetts may be sold lawfully in Massachusetts under the state hemp law and federal law. In any event, CBD extracts are widely available across the country (see the Amazon website), with only random efforts by local law enforcement outside of Massachusetts to determine the source of the extracts (and thus the extracts' legality).

Conclusion

Purchasers of CBD products have nothing to fear from the purchase, possession or use of this non-psychoactive substance, provided the product contains under 0.3% THC. Under the state legalization law (G.L. c. 94G), adults can purchase up to an ounce of any cannabis product lawfully; unlicensed sales without a state license (no final nonmedical retail licenses have been granted as of this date) are illegal for the seller. Businesses intending to engage in commercial hemp cultivation, CBD-extract and manufacturing, and retail sales in Massachusetts of CBD extracted from Massachusetts grown hemp must comply with MDAR's interim policy above. Businesses selling CBD products produced outside of Massachusetts should investigate their wholesalers, to determine that the source of the CBD is lawful under federal law as described above.