`
`No. ________
`20-1376
`
`In the United States Court of Appeals
`for the District of Columbia Circuit
`
`
`
`HEMP INDUSTRIES ASSOCIATION; AND RE BOTANICALS, INC.,
`Petitioners,
`
`v.
`DRUG ENFORCEMENT ADMINISTRATION; AND TIMOTHY SHEA, ACTING
`ADMINISTRATOR, DRUG ENFORCEMENT ADMINISTRATION,
`Respondents
`
`PETITION FOR REVIEW
`
`Shane Pennington
`Matthew C. Zorn
`YETTER COLEMAN LLP
`811 Main Street, Suite 4100
`Houston, TX 77002
`T: (713) 632-8000; F: (713) 632-8002
`spennington@yettercoleman.com
`mzorn@yettercoleman.com
`
`Shawn Hauser
`VICENTE SEDERBERG LLP
`455 Sherman St., Suite 390
`Denver, CO 80203
`T: (303) 860-4501; F: (303) 860-4505
`shawn@vicentesederberg.com
`
`David C. Kramer
`VICENTE SEDERBERG LLP
`633 West 5th Street, 26th Floor
`Los Angeles, CA 80203
`T: (303) 860-4501; F: (303) 860-4505
`d.kramer@vicentesederberg.com
`
`ATTORNEYS FOR PETITIONER
`HEMP INDUSTRIES ASSOCIATION
`
`[continued on next page]
`
`
`
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 2 of 22
`
`Rod Kight
`KIGHT LAW OFFICE PC
`84 West Walnut Street, Suite 201
`Asheville, NC 28801
`T: (828) 255-9881; F: (828) 255-9886
`rod@kightlaw.com
`
`Robert Hoban
`Garrett Graff
`HOBAN LAW GROUP
`730 17TH Street, Suite 420
`Denver, CO 80202
`T: (844) 708-7087; F: (303) 382-4685
`bob@hoban.law
`garrett@hoban.law
`
`Patrick D. Goggin
`HOBAN LAW GROUP
`870 Market Street, Suite 1148
`San Francisco, CA 94102
`T: (415) 981-9290; F: (415) 981-9291
`patrick@hoban.law
`ATTORNEYS FOR PETITIONER
`RE BOTANICALS, INC.
`
`- 1 -
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`
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`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 3 of 22
`
`CORPORATE DISCLOSURE STATEMENT
`Petitioner Hemp Industries Association is a non-profit trade group
`
`that represents hemp companies and researchers in the United States and
`
`Canada. It does not have any parent companies, subsidiaries, or affiliates
`
`that have issued shares to the public.
`
`Petitioner RE Botanicals, Inc. is a privately held company and does not
`
`have any parent companies, subsidiaries, or affiliates that have issued shares
`
`to the public.
`
`September 18, 2020
`
`
`
`
`
`
`
` /s/Shane Pennington
`Shane Pennington
`Matthew C. Zorn
`YETTER COLEMAN LLP
`811 Main Street, Suite 4100
`Houston, TX 77002
`Tel. (713) 632-8000
`spennington@yettercoleman.com
`mzorn@yettercoleman.com
`
`Shawn Hauser
`VICENTE SEDERBERG LLP
`455 Sherman St., Suite 390
`Denver, CO 80203
`T: (303) 860-4501
`shawn@vicentesederberg.com
`
`- 2 -
`
`
`
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 4 of 22
`
`David C. Kramer
`VICENTE SEDERBERG LLP
`633 West 5th Street, 26th Floor
`Los Angeles, CA 80203
`T: (303) 860-4501
`d.kramer@vicentesederberg.com
`
`Attorneys for Petitioner Hemp
`Industries Association
`
`/s/ Rod Kight
`Rod Kight
`KIGHT LAW OFFICE PC
`84 West Walnut Street, Suite 201
`Asheville, NC 28801
`rod@kightlaw.com
`
`Robert Hoban
`Garrett Graff
`HOBAN LAW GROUP
`730 17TH Street, Suite 420
`Denver, CO 80202
`T: (844) 708-7087
`bob@hoban.law
`garrett@hoban.law
`
`Patrick D. Goggin
`HOBAN LAW GROUP
`870 Market Street, Suite 1148
`San Francisco, CA 94102
`T: (415) 981-9290
`
`Attorneys for RE Botanicals Inc.
`
`- 3 -
`
`
`
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 5 of 22
`
`Under § 877 of the Controlled Substances Act (“CSA”) (21 U.S.C. § 877),
`
`§§ 702, 706 of the Administrative Procedure Act (“APA”) (5 U.S.C. §§ 702,
`
`706), and Federal Rules of Appellate Procedure 15, Petitioners petition the
`
`Court for review of the Drug Enforcement Administration’s (“DEA”) interim
`
`final rule entitled “Implementation of the Agriculture Improvement Act of
`
`2018” effective on August 21, 2020 (85 Fed. Reg. 51,639), and is attached as
`
`Exhibit 1 (the “IFR”).
`
`I.
`
`Petitioners
`
`Petitioner Hemp Industries Association is a 501(c)(6) trade
`
`association that represents approximately 1,050-member hemp businesses,
`
`including approximately 300 hemp processors and individuals involved in,
`
`or impacted by, the manufacture, distribution and/or sale of intermediary
`
`hemp extract and such other products lawfully derived from hemp.
`
`Petitioner RE Botanicals, Inc. is a private corporation with its
`
`principal place of business in South Carolina. RE Botanicals, Inc. is involved
`
`in and
`
`impacted by the manufacture, distribution and/or sale of
`
`intermediary hemp extract and such other products derived from hemp. In
`
`2019, RE Botanicals, Inc. acquired Palmetto Synergistic Research LLC dba
`
`Palmetto Harmony (“Palmetto”). Palmetto was founded by Janel Ralph to
`
`provide reliable and high-quality hemp products.
`
`- 4 -
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`
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`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 6 of 22
`
`II. Grounds for Review
`The IFR purports to codify in DEA regulations statutory amendments
`
`to the CSA made by the Agriculture Improvement Act of 2018 (AIA),
`
`regarding
`
`the
`
`scope of
`
`regulatory
`
`controls over marihuana,
`
`tetrahydrocannabinols,
`
`and other marihuana-related
`
`constituents.
`
`According to DEA, the IFR merely conforms agency regulations to the
`
`statutory amendments to the CSA that have already taken effect and does not
`
`add additional requirements to the regulations.
`
`Petitioners request this Court hold unlawful and set aside the IFR
`
`because:
`
`1. DEA’s Acting Administrator promulgated the IFR without
`observance of procedure required by law;
`
`2. The IFR is in excess of statutory jurisdiction, authority, or
`limitations, or short of statutory right; and
`
`3. The IFR is agency action that is arbitrary, capricious, an abuse of
`discretion, or otherwise not in accordance with law.
`
`
`Specifically, the Acting Administrator did not observe procedures required
`
`under § 811(a) of the CSA and § 553 of the APA; the Acting Administrator
`
`lacks statutory authority to promulgate the IFR; and the IFR is not in
`
`accordance with the Agriculture Improvement Act of 2018, Pub. L. 115-334,
`
`132 Stat. 4,490.
`
`
`
`
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`- 5 -
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`
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`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 7 of 22
`
`September 18, 2020
`
`Respectfully submitted,
`
`/s/Shane Pennington
`Shane Pennington
`Matthew C. Zorn
`YETTER COLEMAN LLP
`811 Main Street, Suite 4100
`Houston, TX 77002
`Tel. (713) 632-8000
`spennington@yettercoleman.com
`mzorn@yettercoleman.com
`
`Shawn Hauser
`VICENTE SEDERBERG LLP
`455 Sherman St., Suite 390
`Denver, CO 80203
`T: (303) 860-4501
`shawn@vicentesederberg.com
`
`David C. Kramer
`VICENTE SEDERBERG LLP
`633 West 5th Street, 26th Floor
`Los Angeles, CA 80203
`T: (303) 860-4501
`d.kramer@vicentesederberg.com
`
`Attorneys for Petitioner Hemp
`Industries Association
`
`/s/ Rod Kight
`Rod Kight
`KIGHT LAW OFFICE PC
`84 West Walnut Street, Suite 201
`Asheville, NC 28801
`rod@kightlaw.com
`
`Robert Hoban
`Garrett Graff
`HOBAN LAW GROUP
`730 17TH Street, Suite 420
`Denver, CO 80202
`
`- 6 -
`
`
`
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 8 of 22
`
`
`
`
`T: (844) 708-7087
`bob@hoban.law
`garrett@hoban.law
`
`Patrick D. Goggin
`HOBAN LAW GROUP
`870 Market Street, Suite 1148
`San Francisco, CA 94102
`T: (415) 981-9290
`
`Attorneys for RE Botanicals Inc.
`
`
`
`
`
`
`
`
`- 7 -
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`
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`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 9 of 22
`
`CERTIFICATE OF SERVICE
`
`I certify that this Petition for Review was filed with the Court via the
`
`court’s electronic filing system, on the 18th day of September 2020, and copy
`
`of the Petition was served on all counsel of record, as listed below, via Federal
`
`Express:
`
`Respondent
`
`Robert C. Gleason
`Acting Chief Counsel
`Office of General Counsel
`Drug Enforcement Administration
`8701 Morrissette Dr.
`Springfield, VA 22152
`
`
`Respondent
`
`The Honorable Timothy Shea
`Drug Enforcement Administration
`7000 Army-Navy Dr.
`Arlington, VA 22202
`
`
`
`
`
`
`
`
`1009035
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/ Shane Pennington
`Shane Pennington
`
`- 8 -
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`
`
`Implementation of the Agriculture Improvement Act of 2018, 85 FR 51639-01
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 10 of 22
`
`85 FR 51639-01, 2020 WL 4893800(F.R.)
`RULES and REGULATIONS
`DEPARTMENT OF JUSTICE
`Drug Enforcement Administration
`21 CFR Parts 1308 and 1312
`[Docket No. DEA-500]
`RIN 1117-AB53
`
`Implementation of the Agriculture Improvement Act of 2018
`
`Friday, August 21, 2020
`
`AGENCY: Drug Enforcement Administration (DEA), Department of Justice.
`
`*51639 ACTION: Interim final rule with request for comments.
`
`SUMMARY: The purpose of this interim final rule is to codify in the Drug Enforcement Administration (DEA) regulations
`the statutory amendments to the Controlled Substances Act (CSA) made by the Agriculture Improvement Act of 2018 (AIA),
`regarding the scope of regulatory controls over marihuana, tetrahydrocannabinols, and other marihuana-related constituents.
`This interim final rule merely conforms DEA's regulations to the statutory amendments to the CSA that have already taken
`effect, and it does not add additional requirements to the regulations.
`DATES: Effective August 21, 2020. Electronic comments must be submitted, and written comments must be
`postmarked, on or before October 20, 2020. Commenters should be aware that the electronic Federal Docket
`Management System will not accept comments after 11:59 p.m. Eastern Time on the last day of the comment period.
`
`ADDRESSES: To ensure proper handling of comments, please reference “RIN 1117-AB53/Docket No. DEA-500” on all
`correspondence, including any attachments.
`*51640 • Electronic comments: The Drug Enforcement Administration encourages that all comments be submitted
`electronically through the Federal eRulemaking Portal, which provides the ability to type short comments directly into the
`comment field on the web page or attach a file for lengthier comments. Please go to http://www.regulations.gov and follow the
`online instructions at that site for submitting comments. Upon completion of your submission, you will receive a Comment
`Tracking Number for your comment. Please be aware that submitted comments are not instantaneously available for public
`view on http://www.regulations.gov. If you have received a Comment Tracking Number, your comment has been successfully
`submitted, and there is no need to resubmit the same comment.
`
`• Paper comments: Paper comments that duplicate the electronic submission are not necessary and are discouraged. Should
`you wish to mail a paper comment in lieu of an electronic comment, it should be sent via regular or express mail to: Drug
`Enforcement Administration, Attn: DEA Federal Register Representative/DPW, Diversion Control Division; Mailing Address:
`8701 Morrissette Drive, Springfield, VA 22152.
`
`FOR FURTHER INFORMATION CONTACT: Scott A. Brinks, Diversion Control Division, Drug Enforcement Administration;
`Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-2596.
`
`SUPPLEMENTARY INFORMATION:
`
`Posting of Public Comments
`Please note that all comments received are considered part of the public record. They will, unless reasonable cause is given,
`be made available by the Drug Enforcement Administration (DEA) for public inspection online at http://www.regulations.gov.
`
` © 2020 Thomson Reuters. No claim to original U.S. Government Works.
`
`1
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`Implementation of the Agriculture Improvement Act of 2018, 85 FR 51639-01
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 11 of 22
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`Such information includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the
`commenter. The Freedom of Information Act (FOIA) applies to all comments received. If you want to submit personal
`identifying information (such as your name, address, etc.) as part of your comment, but do not want it to be made publicly
`available, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment.
`You must also place all of the personal identifying information you do not want made publicly available in the first paragraph
`of your comment and identify what information you want redacted.
`
`If you want to submit confidential business information as part of your comment, but do not want it to be made publicly available,
`you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You
`must also prominently identify the confidential business information to be redacted within the comment.
`
`Comments containing personal identifying information and confidential business information identified as directed above will
`generally be made publicly available in redacted form. If a comment has so much confidential business information or personal
`identifying information that it cannot be effectively redacted, all or part of that comment may not be made publicly available.
`Comments posted to http://www.regulations.gov may include any personal identifying information (such as name, address, and
`phone number) included in the text of your electronic submission that is not identified as directed above as confidential.
`
`An electronic copy of this document and the complete Economic Impact Analysis, to this interim final rule are available in their
`entirety under the tab “Supporting Documents” of the public docket of this action at http://www.regulations.gov under FDMS
`Docket ID: DEA-500 (RIN 1117-AB53/Docket Number DEA-500) for easy reference.
`
`Executive Summary
`The Agriculture Improvement Act of 2018, Public Law 115-334 (the AIA), was signed into law on December 20, 2018. It
`provided a new statutory definition of “hemp” and amended the definition of marihuana under 21 U.S.C. 802(16) and the
`listing of tetrahydrocannabinols under 21 U.S.C. 812(c). The AIA thereby amends the regulatory controls over marihuana,
`tetrahydrocannabinols, and other marihuana-related constituents in the Controlled Substances Act (CSA).
`
`This rulemaking makes four conforming changes to DEA's existing regulations:
`
`• It modifies 21 CFR 1308.11(d)(31) by adding language stating that the definition of “Tetrahydrocannabinols” does not include
`“any material, compound, mixture, or preparation that falls within the definition of hemp set forth in 7 U.S.C. 1639o.”
`
`• It removes from control in schedule V under 21 CFR 1308.15(f) a “drug product in finished dosage formulation
`that has been approved by the U.S. Food and Drug Administration that contains cannabidiol (2-[1R-3-methyl-6R-(1-
`methylethenyl)-2-cyclohexen-1-yl]-5-pentyl-1,3-benzenediol) derived from cannabis and no more than 0.1% (w/w) residual
`tetrahydrocannabinols.”
`
`• It also removes the import and export controls described in 21 CFR 1312.30(b) over those same substances.
`
`• It modifies 21 CFR 1308.11(d)(58) by stating that the definition of “Marihuana Extract” is limited to extracts “containing
`greater than 0.3 percent delta-9-tetrahydrocannabinol on a dry weight basis.”
`
`This interim final rule merely conforms DEA's regulations to the statutory amendments to the CSA that have already taken
`effect, and it does not add additional requirements to the regulations. Accordingly, there are no additional costs resulting from
`these regulatory changes. However, as discussed below, the changes reflected in this interim final rule are expected to result
`in annual cost savings for affected entities.
`
`Changes to the Definition of Marihuana
`
` © 2020 Thomson Reuters. No claim to original U.S. Government Works.
`
`2
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`Implementation of the Agriculture Improvement Act of 2018, 85 FR 51639-01
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 12 of 22
`
`The AIA amended the CSA's regulatory controls over marihuana by amending its definition under the CSA. Prior to the AIA,
`marihuana was defined in 21 U.S.C. 802(16) as follows:
`
`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 AIA modified the foregoing definition by adding that the “term ‘marihuana’ does not include hemp, as defined in section
`1639o of Title 7.” 21 U.S.C. 802(16)(B). Furthermore, the AIA added a definition of “hemp” to 7 U.S.C. 1639o, which reads
`as follows:
`
`The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives,
`extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol
`concentration of not more than 0.3 percent on a dry weight basis.
`
`Taken together, these two changes made by the AIA limit the definition of marihuana to only include cannabis or cannabis-
`derived material that contain more than 0.3% delta-9-tetrahydrocannabinol (also known as [Delta][FN9]-THC) on a dry weight
`basis. Thus, to fall within the current CSA definition of *51641 marihuana, cannabis and cannabis-derived material must both
`fall within the pre-AIA CSA definition of marihuana and contain more than 0.3 percent [Delta][FN9]-THC on a dry weight
`basis. Pursuant to the AIA, unless specifically controlled elsewhere under the CSA, any material previously controlled under
`Controlled Substance Code Number 7360 (marihuana) or under Controlled Substance Code Number 7350 (marihuana extract),
`that contains 0.3% or less of [Delta][FN9]-THC on a dry weight basis—i.e., “hemp” as that term defined under the AIA—
`is not controlled. Conversely, any such material that contains greater than 0.3% of [Delta][FN9]-THC on a dry weight basis
`remains controlled in schedule I.
`
`In order to meet the AIA's definition of hemp, and thus qualify for the exception in the definition of marihuana, a cannabis-
`derived product must itself contain 0.3% or less [Delta][FN9]-THC on a dry weight basis. It is not enough that a product is
`labeled or advertised as “hemp.” The U.S. Food and Drug Administration (FDA) has recently found that many cannabis-derived
`products do not contain the levels of cannabinoids that they claim to contain on their labels.[FN1] Cannabis-derived products
`that exceed the 0.3% [Delta][FN9]-THC limit do not meet the statutory definition of “hemp” and are schedule I controlled
`substances, regardless of claims made to the contrary in the labeling or advertising of the products.
`
`In addition, the definition of hemp does not automatically exempt any product derived from a hemp plant, regardless of the
`[Delta][FN9]-THC content of the derivative. In order to meet the definition of “hemp,” and thus qualify for the exemption from
`schedule I, the derivative must not exceed the 0.3% [Delta][FN9]-THC limit. The definition of “marihuana” continues to state
`that “all parts of the plant Cannabis sativa L.,” and “every compound, manufacture, salt, derivative, mixture, or preparation of
`such plant,” are schedule I controlled substances unless they meet the definition of “hemp” (by falling below the 0.3% [Delta]
`[FN9]-THC limit on a dry weight basis) or are from exempt parts of the plant (such as mature stalks or non-germinating seeds).
`See 21 U.S.C. 802(16) (emphasis added). As a result, a cannabis derivative, extract, or product that exceeds the 0.3% [Delta]
`[FN9]-THC limit is a schedule I controlled substance, even if the plant from which it was derived contained 0.3% or less [Delta]
`[FN9]-THC on a dry weight basis.
`
`Finally, nothing in the AIA or in these implementing regulations affects or alters the requirements of the Food, Drug, & Cosmetic
`Act (FD&C Act). See 7 U.S.C. 1639r(c). Hemp products that fall within the jurisdiction of the FD&C Act must comply with
`its requirements. FDA has recently issued a statement regarding the agency's regulation of products containing cannabis and
`cannabis-derived compounds, and DEA refers interested parties to that statement, which can be found at https://www.fda.gov/
`newsevents/Newsroom/PressAnnouncements/ucm628988.htm.
`
` © 2020 Thomson Reuters. No claim to original U.S. Government Works.
`
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`Implementation of the Agriculture Improvement Act of 2018, 85 FR 51639-01
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 13 of 22
`
`Changes to the Definition of Tetrahydrocannabinols
`The AIA also modified the listing for tetrahydrocannabinols under 21 U.S.C. 812(c) by stating that the term
`tetrahydrocannabinols does not include tetrahydrocannabinols in hemp. Specifically, 21 U.S.C. 812(c) Schedule I now lists as
`schedule I controlled substances: “Tetrahydrocannabinols, except for tetrahydrocannabinols in hemp (as defined under section
`1639o of Title 7).”
`
`Therefore, the AIA limits the control of tetrahydrocannabinols (for Controlled Substance Code Number 7370). For
`tetrahydrocannabinols that are naturally occurring constituents of the plant material, Cannabis sativa L., any material that
`contains 0.3% or less of [Delta][FN9]-THC by dry weight is not controlled, unless specifically controlled elsewhere under the
`CSA. Conversely, for tetrahydrocannabinols that are naturally occurring constituents of Cannabis sativa L., any such material
`that contains greater than 0.3% of [Delta][FN9]-THC by dry weight remains a controlled substance in schedule I.
`
`The AIA does not impact the control status of synthetically derived tetrahydrocannabinols (for Controlled Substance Code
`Number 7370) because the statutory definition of “hemp” is limited to materials that are derived from the plant Cannabis sativa L.
`For synthetically derived tetrahydrocannabinols, the concentration of [Delta][FN9]-THC is not a determining factor in whether
`the material is a controlled substance. All synthetically derived tetrahydrocannabinols remain schedule I controlled substances.
`
`This rulemaking is modifying 21 CFR 1308.11(d)(31) to reflect this statutory change. By this rulemaking, 21 CFR 1308.11(d)
`(31) is being modified via the addition of subsection (ii), which reads: “Tetrahydrocannabinols does not include any material,
`compound, mixture, or preparation that falls within the definition of hemp set forth in 7 U.S.C. 1639o.”
`
`Removal of Schedule V Control of FDA-Approved Products Containing Cannabidiol
`Previously DEA, pursuant to 21 CFR 1308.15, separately controlled in Schedule V drug products in finished dosage
`formulations that have been approved by FDA and that contain cannabidiol (CBD) derived from cannabis and no more than 0.1
`percent (w/w) residual tetrahydrocannabinols (under Controlled Substance Code Number 7367). The FDA-approved substances
`described under Drug Code 7367 are no longer controlled, by virtue of the AIA. As a result, DEA is removing the listing for
`“Approved cannabidiol drugs” under schedule V in 21 CFR 1308.15.
`
`Note that CBD in a mixture with a [Delta][FN9]-THC concentration greater than 0.3% by dry weight is not exempted from
`the definition of “marihuana” or “tetrahydrocannabinols.” Accordingly, all such mixtures exceeding the 0.3% limit remain
`controlled substances under schedule I.
`
`Removal of Import/Export Provisions Involving FDA-Approved Products Containing CBD
`Previously DEA, pursuant to 21 CFR 1312.30, required import and export permits pursuant to 21 U.S.C. 811(d)(1), 952(b)(2),
`and 953(e)(3) for the import and export of drug products in finished dosage formulations that have been approved by FDA
`and that contain CBD derived from cannabis and no more than 0.1 percent (w/w) residual tetrahydrocannabinols. Because such
`substances are no longer controlled substances, DEA is likewise removing the import and export permit requirement for these
`substances. The regulation is revised to delete § 1312.30(b).
`
`Drug Code 7350 for Marihuana Extract
`The current control status of marihuana-derived constituents depends upon the concentration of [Delta][FN9]-THC in the
`constituent. DEA is amending the scope of substances falling within the Controlled Substances Code Number for marihuana
`extract (7350) to conform to the amended definition of marihuana in the AIA. As amended, the Drug Code 7350 definition reads:
`
` © 2020 Thomson Reuters. No claim to original U.S. Government Works.
`
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`Implementation of the Agriculture Improvement Act of 2018, 85 FR 51639-01
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 14 of 22
`
`Marihuana Extract—meaning an extract containing one or more cannabinoids that has been derived from any plant of the
`genus Cannabis, containing greater than 0.3 percent delta-9-tetrahydrocannabinol on a dry weight *51642 basis, other than
`the separated resin (whether crude or purified) obtained from the plant.
`
`21 CFR 1308.11(d)(58). The drug code 7350 became effective on January 13, 2017. 81 FR 90194.
`
`Regulatory Analysis
`
`Administrative Procedure Act
`An agency may find good cause to exempt a rule from certain provisions of the Administrative Procedure Act (APA) (5 U.S.C.
`553), including those requiring the publication of a prior notice of proposed rulemaking and the pre-promulgation opportunity
`for public comment, if such actions are determined to be unnecessary, impracticable, or contrary to the public interest.
`
`DEA finds there is good cause within the meaning of the APA to issue these amendments as an interim final rule and to delay
`comment procedures to the post-publication period, because these amendments merely conform the implementing regulations
`to recent amendments to the CSA that have already taken effect. DEA has no discretion with respect to these amendments.
`This rule does no more than incorporate the statutory amendments into DEA's regulations, and publishing a notice of proposed
`rulemaking or soliciting public comment prior to publication is unnecessary. See 5 U.S.C. 553(b)(B) (relating to notice and
`comment procedures). “[W]hen regulations merely restate the statute they implement, notice-and-comment procedures are
`unnecessary.” Gray Panthers Advocacy Committee v. Sullivan, 936 F.2d 1284, 1291 (D.C. Cir. 1991); see also United States
`v. Cain, 583 F.3d 408, 420 (6th Cir. 2009) (contrasting legislative rules, which require notice-and-comment procedures, “with
`regulations that merely restate or interpret statutory obligations,” which do not); Komjathy v. Nat. Trans. Safety Bd., 832 F.2d
`1294, 1296 (D.C. Cir. 1987) (when a rule “does no more than repeat, virtually verbatim, the statutory grant of authority” notice-
`and-comment procedures are not required).
`
`In addition, because the statutory changes at issue have already been in effect since December 20, 2018, DEA finds good
`cause exists to make this rule effective immediately upon publication. See 5 U.S.C. 553(d). Therefore, DEA is issuing these
`amendments as an interim final rule, effective upon publication in the Federal Register.
`
`Although publishing a notice of proposed rulemaking and soliciting public comment prior to publication are unnecessary in
`this instance because these regulations merely implement statutory changes over which the agency has no discretion, DEA is
`soliciting public comment on this rule following its publication. For that reason, DEA is publishing this rule as an interim final
`rule and is establishing a docket to receive public comment on this rule. To the extent required by law, DEA will consider and
`respond to any relevant comments received.
`
`Executive Orders 12866 (Regulatory Planning and Review), 13563 (Improving Regulation and Regulatory Review), and
`13771 (Reducing Regulation and Controlling Regulatory Cost)
`This interim final rule was developed in accordance with the principles of Executive Orders (E.O.) 12866, 13563, and 13771.
`E.O. 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to
`select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety
`effects; distributive impacts; and equity). E.O. 13563 is supplemental to and reaffirms the principles, structures, and definitions
`governing regulatory review as established in E.O. 12866. E.O. 12866 classifies a “significant regulatory action,” requiring
`review by the Office of Management and Budget (OMB), as any regulatory action that is likely to result in a rule that may:
`(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector
`of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments
`or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
`(3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of
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` © 2020 Thomson Reuters. No claim to original U.S. Government Works.
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`Implementation of the Agriculture Improvement Act of 2018, 85 FR 51639-01
`USCA Case #20-1376 Document #1862824 Filed: 09/18/2020 Page 15 of 22
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`recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles
`set forth in the E.O.
`
`The economic, interagency, budgetary, legal, and policy implications of this interim final rule have been examined and it has
`been determined that it is not a significant regulatory action under E.O. 12866 because it is a non-discretionary action that
`is dictated by the statutory amendments to the CSA enacted by the AIA. While not determined to be a significant regulatory
`action, this action has been reviewed by the OMB.
`
`As explained above, DEA is obligated to issue this interim final rule to revise its regulations so that they are consistent with the
`provisions of the CSA that were amended by the AIA. In issuing this interim final rule, DEA has not gone beyond the statutory
`text enacted by Congress. Thus, DEA would have to issue this interim final rule regardless of the outcome of the agency's
`regulatory analysis. Nonetheless, DEA conducted this analysis as discussed below.
`
`Summary of Benefits and Costs
`This analysis is limited to the provisions of the AIA that are being directly implemented by this DEA interim final rule. DEA
`has reviewed these regulatory changes and their expected costs and benefits. Benefits, in the form of cost savings realized
`by DEA registrants handling previously controlled substances, will be generated as a direct result of the publication of this
`interim final rule. DEA does not expect there to be any costs associated with the promulgation of this interim final rule. The
`following is a summary; a detailed economic analysis of the interim final rule can be found in the rulemaking docket at http://
`www.regulations.gov.
`
`The AIA's revised definitions of marihuana and tetrahydrocannabinols effectively decontrol hemp as defined under the AIA.
`DEA's regulatory authority over any plant with less than 0.3% THC content on a dry weight basis, and any of the plant's
`derivatives under the 0.3% THC content limit, is removed as a result. It is important to note, however, that this does not mean
`that hemp is not under federal regulatory oversight. The AIA directs the U.S. Department of Agriculture (USDA) to review
`and approve commercial hemp production plans developed by State, territory, and Indian tribal agencies and to develop its own
`production plan. 7 U.S.C. 1639p, 1639q. Until these regulations are finalized, State commercial hemp pilot programs authorized
`under the 2014 Farm Bill are still in effect and current participants may proceed with plans to grow hemp while new regulations
`are drafted.[FN2] DEA expects the USDA to assess the costs and benefits of this new regulatory apparatus once those rules are
`finalized. For these reasons, DEA considers any potential costs or benefits broadly related to changes in the domestic industrial
`hemp market due to the *51643 decontrol of hemp, including but not limited to the expansion in the number of producers,
`consumer products, and the impact on supply chains to be outside the scope of this analysis.
`
`To determine any cost savings resulting from this decontrol action, DEA analyzed its registration, import, and export data. The
`removal of DEA's regulatory authority over hemp as defined under the AIA will