DEA Seed Letter – Triumph or Trap?
The cannabis media is reporting on a January 6, 2022, letter by the US Drug Enforcement Agency (DEA) regarding its stance on the legal status of cannabis seeds (DEA Seed Letter). The letter, which you can read in its entirety below, was in response to an inquiry made by my colleague, Shane Pennington, regarding the DEA’s position on the “control status of Cannabis Sativa L. seeds, tissue culture, and any other genetic material of Cannabis Sativa L. under the Controlled Substances Act (CSA).”
The DEA states that “marihuana seed that has a delta-9-tetrahydrocannabinol [D9-THC] concentration of not more than 0.3 percent on a dry weight basis meets the definition of ‘hemp’ and thus is not controlled under the CSA.” Since no cannabis seeds contain D9-THC concentrations in excess of 0.3%, the DEA effectively gives a blanket “green light” to all cannabis seeds and takes the position that none of them are controlled substances. This is remarkable for at least two reasons. First, the DEA apparently disregards the Source Rule, which determines the legal status of a cannabinoid based on the source from which it was derived. Second, the DEA rarely takes positions on cannabis and cannabis legal issues that are favorable or helpful to the cannabis industry or cannabis consumers.
The Source Rule has been guiding the industry since 2016, and it is a crucial safeguard to the legal status of hemp and hemp products. Shane Pennington and Matt Zorn, colleagues who write a blog on cannabis and other related issues, use the DEA Seed Letter as a primary exhibit in support of their recent position that the Source Rule is “dead”. As the author of the Source Rule, I strongly disagree with their position. At best, it only applies in a very limited set of circumstances that do not materially impact the practical realities of the commercial hemp and cannabis industry. This article, however, is not about the Source Rule. I will address its current status and the disastrous implications that its “death” would have for the hemp industry if their pronouncement is true in another blog article. For this article I will only note that the DEA’s position on cannabis seeds applies equally to cannabis seeds from both hemp and marijuana, regardless of their source.
Since the DEA’s Seed Letter became public I have fielded a number of calls from clients about selling cannabis seeds. Everyone wants to know if it is possible to sell cannabis seeds and other low-THC cannabis materials, such as cannabis clones, and stay out of legal trouble. The answer is, “It depends”. In this article I will discuss the DEA’s position and the traps this position holds for the unwary. In particular, I am concerned that the DEA Seed Letter sows more confusion than clarity and that aggressive sellers of cannabis seeds and other cannabis materials will find themselves looking down the barrel of federal felony charges.
Note- This article solely addresses federal law. Laws and regulations on this issue vary widely from state to state and you should discuss plans to sell cannabis seeds with an attorney to ensure that you cover all of the legal bases.
Let me start by saying that simply selling cannabis seeds to the general public without any specific marketing about them, aside from the fact that they are “cannabis” or “hemp” seeds, and without any discussion of how they can or should be used, appears to be a low-risk activity given the DEA’s current stance. Taken in a vacuum, this is best viewed as a small but important triumph for the entire cannabis industry. It wasn’t very long ago that US Customs seized a shipment of hemp seeds from Italy en route to the Kentucky Department of Agriculture, which ultimately required the state to sue the DEA for their release. Prior to that, there is a history of cases filed against the DEA by the Hemp Industries Association (HIA) regarding the legal status of hemp seeds. (For information on the HIA’s current legal battle against the DEA to protect hemp, click here and here.)
Though I am pleased with the DEA’s position on this issue since it is favorable to the cannabis industry and I strongly advocate for cannabis reform, I disagree with its legal analysis. Under federal law, “marihuana” is defined as “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.” A seed from a marijuana plant unqualifiedly meets this definition. Marihuana “seeds” are specifically mentioned. In supporting its position that cannabis seeds are not controlled, the DEA references the legal definition of “hemp” as an exception in that it removes from control the cannabis plant and all of its parts with a D9-THC concentration no greater than 0.3% on a dry weight basis. This makes logical sense until you consider that a seed from a marijuana plant never has an opportunity to reach the “hemp exception” stage because it is “marihuana” before it leaves the gate. Also, by definition marijuana is not and cannot be grown subject to a USDA or state hemp license. A marijuana seed is just that – marijuana.
Moreover, based on the DEA’s position, it appears that one could “launder” an illegal marijuana grow by removing/diluting the D9-THC from the crop and then possessing or selling only the parts of the plant that do not contain D9-THC concentrations that exceed the 0.3% limit. Surely this is not what the DEA means. If it does, in fact, mean this, then its position is based on an illogical reading of current cannabis laws, despite the fact that it results in a favorable outcome for the industry.
To this last point, those who claim this issue is resolved simply because “the DEA said it” should bear in mind that this way of thinking is a slippery slope. Taking the DEA’s position on this matter just because it is favorable and because the DEA “said so” suggests that the DEA’s opinion on legal issues such as this is the final word. Should we accept the DEA’s word as final on all cannabis-related issues? The DEA gets most cannabis matters wrong. In other words, before using a pronouncement by the DEA as the cornerstone of your argument on a legal point, please be aware that this places you in a compromising position. The DEA is not a good bedfellow.
In any event, and despite my disagreement with the DEA’s analysis, this article is about identifying and avoiding “traps” that could arise in light of the DEA’s position. For argument’s sake, the rest of this article assumes that the DEA is right, or at least that its position represents the current state of the law regarding the matters it addresses. With that in mind, I want to discuss two potential legal problems I see. The first is selling cannabis seeds in conjunction with marketing and otherwise making claims about their genetic characteristics. The second is selling cannabis clones.
TRAP 1- MARKETING CANNABIS SEEDS BY DISCUSSING THEIR MARIJUANA GENETICS
Cultivating or manufacturing a schedule 1 drug is a federal crime. As discussed in this FindLaw blog, “[d]rug “manufacturing,” in a criminal law setting, occurs when an individual is involved in any step of the illicit drug production process. Those who sell certain precursor chemicals, specialized equipment, or simply offer to help produce drugs also may be charged with the crime.” Possessing or selling cannabis seeds may be fine in the abstract; however, marketing and selling seeds to grow marijuana likely implicates you in a crime.
Let’s dig a little deeper into this issue. I did a quick Google search of “buy cannabis seeds” and got about 195,000 results. I randomly clicked on one of the top results and found an online retailer of cannabis seeds. Under the heading “High THC Seeds” the site states: “[with] the growing aid of technology, breeders have been able to identify ways to increase THC content in plants via cross-breeding.” The website goes on to discuss some new seed offerings: “[Redacted] is a new addition to the family and is a selection of strains bred with the highest THC content possible…. If you’re looking to collect cannabis seeds with high THC levels then we’ve made it easy for you to sort and select below.” The site offers a number of cannabis seed varieties, along with various descriptions. Here’s one I chose at random: “[This seed’s] THC content reaches 25% with less than 1% CBD.” Marketing cannabis seeds in this manner is highly risky behavior.
Let’s say this particular seed seller, or any one of its competitors (there are lots and lots of them), sells a package of this particular cannabis seed to someone who likes the description and wants to grow cannabis with THC concentrations “up to 25% with less than 1% CBD”. Then let’s assume that this buyer grows marijuana and is busted by the Feds. The Feds seize everything. They discover that the seed from which the illegal marijuana crop was grown was sold by an online seed bank and that the seed involved was specifically advertised to grow high THC marijuana. The Feds charge the seed seller with the federal crime of conspiring to manufacture a schedule 1 drug. Will the DEA’s Seed Letter operate as a “get out of jail free card”? Probably not.
The seller’s intention, its mens rea, is to sell cannabis seeds to someone who will likely use them to grow high THC marijuana, which is the whole point of advertising “high THC” seeds. In other words, the cannabis seed seller in this example is one link in the manufacturing chain and could be charged with conspiring with the buyer to produce an illegal drug. The fact that the word “collectible” is sprinkled throughout the website is unlikely to make a difference since the prosecutor and the court will look to the totality of the circumstances and will almost certainly view the use of the term “collectible” in conjunction with all of the other marketing language about “growing” and “breeding” high THC cannabis. At a minimum, this is a criminal prosecution waiting to happen.
So, yes, generically selling “cannabis seeds” may be fine. But selling and marketing them based on genetics that produce high THC marijuana plants is probably not. The rub is that this is where all of the commercial activity is happening. No one wants to spend money on a generic cannabis seed. The real money is in selling good genetics, which must be advertised. And that advertisement – that marketing of “high THC” cannabis seeds – is what could land you in jail, regardless of the DEA Seed Letter.
TRAP 2- SELLING CANNABIS CLONES WITHOUT A HEMP LICENSE
Since publication of the DEA Seed Letter, I’ve been asked about selling cannabis clones. This is not a new issue. I’ve discussed it with many clients in the past. Unfortunately, you should not sell cannabis clones if you do not have a license to grow hemp. First of all, the DEA Seed Letter makes no mention of “clones”. In addition to “cannabis seeds”, it specifically references “tissue culture or any other genetic material that is derived or extracted from the cannabis plant such as tissue culture and any other genetic material that has a D9-THC concentration of not more than 0.3% on a dry weight basis meets the definition of “hemp” and thus is not controlled under the CSA.” Clones are not included.
Clones do not have D9-THC concentrations in excess of 0.3%, so selling them should also be lawful, right? Wrong. Under federal law, the only people allowed to grow cannabis are licensed hemp growers and a select few who have received DEA licenses to grow marijuana. Unfortunately, no one else is allowed to grow cannabis. Owning a clone is “growing” cannabis. If you have a hemp license, then you can sell your cannabis clones, but for similar reasons as discussed in “Trap 1”, you should only sell cannabis clones to other people or businesses with hemp production licenses in order to eliminate the possibility of being charged as a co-conspirator in a marijuana bust. Additionally, if you sell a marijuana clone to a hemp grower, then the grower will fail its pre-harvest test and will be very unhappy. If you sell the licensed grower a hemp clone, then all is well. Either way, selling marijuana clones, by which I mean a cannabis plant that will eventually produce high levels of THC, is illegal under federal law and is not sanctioned by the DEA Seed Letter.
I don’t like being the bearer of bad news, nor do I enjoy putting a damper on the party. In fact, I think the DEA’s position is laudable, if only because it appears to be favorable to the cannabis industry, regardless of whether its position is legally supported. That being said, I worry that the enthusiasm generated by the letter will lead some into trouble they do not anticipate, particularly for those who view the DEA Seed Letter as a DEA-sanctioned pass to grow and sell marijuana. Ultimately, the resolution to this whole issue is to remove marijuana from the CSA altogether. Until then, we will have to take our triumphs where we can get them while being aware that this particular triumph in cannabis could belie a trap.
Rod Kight is an international cannabis lawyer. He represents businesses throughout the cannabis industry. Additionally, Rod speaks at cannabis conferences, drafts and presents legislation to foreign governments, is regularly quoted on hemp matters in the media, and is the editor of the Kight on Cannabis legal blog, which discusses legal issues affecting the hemp industry. You can contact him by clicking here.