Is CBN the Next Big Thing? A Legal Analysis.

INTRODUCTION

It is a parlor game to predict which of the minor cannabinoids will be the next big cannabinoid or, as some say, “the next CBD”. In this post, I discuss cannabinol (CBN), a major contender as the next high-value cannabinoid. Click here to read about its competition.

WHY CBN?

Despite good arguments for other cannabinoids, which I discuss in another article, my vote for “the next CBD” goes to cannabinol (CBN). This is based on its growing acclaim as a safe sleep aid with few, if any, side effects. I should note that this status may or may not be warranted since there are currently no major clinical studies on its efficacy as a sleep aid. Given that the global sleeping aids market is projected to reach up to $101.9 billion by 2023, starting from $69.5 billion in 2017, CBN is well-positioned to be a major market disruptor if it is proven to be an effective sleep aid.

The primary obstacle to CBN attaining major success is that it is currently difficult or impossible to grow a CBN-rich crop because CBN is not expressed in meaningful quantities in a cannabis plant. Unlike most other cannabinoids, CBN does not stem directly from cannabigerol (CBG) or cannabigerolic acid (CBGA). Rather, CBN is primarily produced through the degradation of tetrahydrocannabinol (THC). Specifically, tetrahydrocannabinolic acid (THCA) converts to THC by a process called decarboxylation through time and/or exposure to heat or ultraviolet (UV) rays. THC converts to cannabinolic acid (CBNA) due to oxidation and a loss of hydrogen molecules. CBNA can be decarboxylated to CBN. This process causes confusion regarding its legal status, which I address in this article.

IS CBN A CONTROLLED SUBSTANCE?

Under the Controlled Substances Act (CSA), the law under which the manufacture, importation, possession, use, and distribution of certain chemical compounds is regulated in the United States, CBN derived from marijuana is a schedule 1 controlled substance (the most restrictive). This is because the legal definition of “marihuana” (the statute uses an antiquated spelling) includes all parts of the plant except the stalks and non-viable seeds, neither of which are meaningful sources for cannabinoids. The “all parts” language necessarily includes CBN derived from marijuana. Technically speaking, even marijuana-derived chlorophyll is a schedule 1 substance. So, while CBN itself is not listed on the CSA as a controlled substance it is deemed to be one when derived from marijuana.

On the other hand, CBN in hemp is not a controlled substance under US law. The definition of “hemp”, which is not a controlled substance, includes “all parts” of the plant, including “cannabinoids”, with a delta-9 THC concentration that does not exceed 0.3% on a dry weight basis. CBN is a cannabinoid. CBN in and from hemp is lawful due to the Source Rule, which posits that a cannabinoid’s legal status under the CSA is based on its source, i.e., hemp (lawful) or marijuana (controlled substance).

While this is plainly accurate, CBN presents some unique and complex issues that muddy the water.

The primary issue arises from how CBN is expressed (or not) in the cannabis plant. (Note: In this context, I use the term “cannabis” to mean both marijuana and hemp.) There is an argument that CBN is a controlled substance, regardless of its source, since it is derived from THC (i.e., as a metabolite produced through the degradation of THC). This argument has two sub-arguments, one based on the federal Analog Act and the other on what is meant by the phrase THC “in hemp” as used in the CSA. As I will discuss, it is clear that CBN is not a controlled substance under the federal Analog Act. However, in an unresolved legal issue, it may or may not be a controlled substance when processed from hemp-derived THC.

Part 1- The federal Analog Act (AA).

Under the AA, any chemical that is “substantially similar” to a controlled substance listed in Schedule I or II of the CSA, and which has a “stimulant, depressant, or hallucinogenic effect on the central nervous system (CNS) that is substantially similar to or greater than” the controlled substance, is to be treated as if it were listed in schedule I of the CSA when intended for human consumption. According to proponents of the “AA Position”, the fact that CBN is a product of THC means that it is “captured” by the AA and is a controlled substance. This is wrong for two reasons.

First, the CSA expressly provides that “tetrahydrocannabinols in hemp” are not controlled substances. CBN derived from such THC is not a controlled substance.

Second, the effect of CBN on the CNS is not “substantially similar” to the effects of THC, the schedule I controlled substance at issue under the AA. Its effects are much less potent. Therefore, even if THC in hemp was not exempt from the CSA, the CBN derived from it would not meet the “substantially similar effect” element of the AA.

For these reasons, CBN in or from hemp is not a controlled substance under the AA, despite the fact that it stems from THC. Additionally, CBN in hemp that is the product of the hemp’s degradation is not a controlled substance since all of the THC that converted to CBN was “in hemp” at the time it converted. Similarly, CBN derived from a non-THC cannabinoid, such as CBD, is not a controlled substance.

But what about the legal status of CBN produced from THC that has been removed from hemp? This is where things get complicated.

Part 2- What does the phrase THC “in hemp” mean?

The statutory language in the CSA regarding THC “in hemp” is confusing. Presumably, it means that naturally occurring THC expressed in a hemp plant, which by definition is in concentrations that do not exceed 0.3% on a dry weight basis, is lawful. But what about the legal status of THC in hemp that is removed from the plant from which it was produced?

One position is that this THC changes its status from being lawful “hemp” to unlawful THC under the CSA since it is no longer “in hemp”. This view gains its support from the “plain language” of the statute, which on its face is simple and direct. THC in hemp, which by definition contains no more than 0.3% THC, is not a controlled substance. By this reasoning, THC that is not in hemp is a controlled substance. In other words, once you remove THC from hemp it becomes unlawful. Additionally, once hemp exceeds the 0.3% THC limit it loses its status as “hemp” and becomes marijuana. Thus, THC does not even have to be removed from hemp in order for it to become illegal, provided that its concentrations increase beyond 0.3%.

Despite its apparent simplicity, this position is not fully supported by the statute, which only specifies a “dry weight” metric to determine whether a substance is lawful hemp or unlawful marijuana. Does this metric apply to the “wet weight” of hemp extracts, which are expressly lawful under the statute? If so, how? No current federal law or regulation answers this question.

Additionally, and setting aside the “wet weight” hemp extract problem, it is a novel legal position to assert that a compound is a controlled substance or not based on its concentrations and/or presence in a plant, rather than its chemical makeup or source. In effect, under this position a lawful substance (THC in hemp) becomes unlawful merely by increasing its concentrations or removing it from a hemp plant. This is highly problematic on a practical level, particularly with respect to hemp processing, in which THC concentrations are usually (and perhaps always) increased by even the simplest processing methods. For example, take the most basic processing method of trimming and separating a hemp plant’s stalks, stems, and seeds (SSS) from its leaves and flowers. Processing the plant in this way, which occurs on some level for most hemp cultivated in the US, increases the concentrations of THC despite not increasing the actual amount of THC. This is because the plant parts consisting of the SSS are weighty and do not have meaningful quantities of trichomes from which THC and other cannabinoids are produced. Separating the trichome-rich portions of the plant from the other parts will always increase the THC levels in the resulting non-SSS product, which is typically biomass or flower.

This problem is compounded with contemporary extraction techniques, which use highly technical methods to separate and refine desired hemp “parts” (i.e., cannabinoids, terpenes, sesquiterpenes, etc.) from the less valuable parts (i.e., fibers, waxes, chlorophyll, etc.) into the extracts, oils, distillates, and isolates used in almost all consumer hemp products on the market. Aside from its relevance to CBN, the issue of THC’s legal status in the context of hemp processing informs the “hot hemp extract” problem, which refers to the unresolved legal question about the status of hemp extracts with THC concentrations that exceed 0.3% but are which are low (generally 2.5% to 7.5%) relative to the marijuana extracts (generally 50-80%) sold in states with medical and recreational marijuana programs. If any hemp extract containing THC concentrations above 0.3% is a controlled substance then most hemp processors in the US are not in compliance with federal law, regardless of how meticulous they are about trying to comply with it. Surely, this is not what Congress meant?

There are other positions, including the view that all hemp-derived THC is lawful since it is from hemp. While this solves the practical problems posed above, it does not square with the language of the statute. Also, relying on this position poses a deep risk since most law enforcement agencies disagree with it. Testing your legal position as a defendant in a criminal drug trafficking case is not ideal since losing could result in a felony conviction. At best, it is a risky position to take.

There is also a more subtle position that “work in progress” (WIP) hemp extract and isolates, meaning extracts and isolates of hemp with THC concentrations in excess of 0.3% that are “in process” for eventual use in compliant hemp products, are lawful. This is the most practical view. It is supported by the language of the 2018 Farm Bill, which expressly legalizes “cannabinoids”, “extracts”, and “derivatives”. Since all of these various products must necessarily go through a processing phase which increases THC concentrations, we can reasonably infer that Congress intended to legalize “in process” hemp products, provided that they were not sold to end-use consumers. This position bridges the gap between the first and second positions above. The problem with this position is, while it is practical and supported by a reasonable reading of the statute, it relies on implying what Congress meant by the use of several undefined terms and provides no guidance on how to apply the law. This position also suffers from the fact that law enforcement typically views all “hot hemp” as illegal marijuana, so relying on this view also opens the door to potential criminal charges.

In short, there is currently no good answer about the legal status of THC that is removed from hemp or hemp that has been processed such that its THC concentrations spike above 0.3%, even if only momentarily. For this reason, CBN from hemp-derived THC remains a legal anomaly.

CBN AND OTHER LAWS

Of course, teasing out when CBN is a controlled substance or not is just one legal issue to consider. There are other considerations, including its status under the Food, Drug & Cosmetic Act (FDCA), the Code of Federal Regulations, state laws and regulations, and policies of various federal and state agencies, not to mention the laws of other countries. As with other cannabinoids, much of the legal analysis of CBN depends on its intended use and how and where it is produced and marketed.

NEED HELP?

We routinely help clients navigate legal issues involving CBN and other minor cannabinoids. Contact us if you have questions and want to schedule a consult with a hemp lawyer at Kight Law.

May 4, 2020

Rod Kight is an international hemp lawyer who resides in North Carolina. He represents businesses throughout the cannabis industry. Additionally, Rod speaks at cannabis conferences, drafts and presents cannabis legislation to foreign governments, is regularly quoted on cannabis matters in the media, and maintains the Kight on Cannabis legal blog, where he discusses legal issues affecting the cannabis industry. Rod also has extensive experience representing clients through periods of financial distress. You can contact him by clicking here.