Ohio Board of Pharmacy Takes Aim at CBD

This week, the State of Ohio Board of Pharmacy (BOP) issued two Guidance Documents regarding cannabidiol (CBD) that have caused an uproar: “CBD Oil FAQ” (FAQ) and “Clarification on CBD Oil” (Clarification). Both contain strong language and statutory references. Both are inaccurate. (At a minimum, they’re incomplete and misleading.) Since the BOP is charged with “investigating and presenting evidence of violations of any of the federal or state drug laws by any person to the appropriate court (federal, state, or municipal) for prosecution of the offender” its position on CBD is important. I’ve received a number of concerned calls and emails this week and so decided to address the BOP’s position in a blog post. 

I’ll provide a summary of the BOP’s error, then delve into the details. Here’s the summary:

a. The BOP contends that CBD is a controlled substance that can only be administered by dispensary licensees to qualifying patients under its recently enacted medical marijuana laws. (The licensees do not become operational until this Fall.)

b. In reality, CBD is not a controlled substance under federal law or Ohio law. It does not appear on either the federal or Ohio lists of controlled substances.

c. Despite not appearing on controlled substances lists, CBD is a controlled substance when it is derived from marijuana. For this reason, CBD’s legal status depends on the source from which it is derived. If derived from marijuana it is unlawful since the legal definition of marijuana includes “all parts” of the cannabis plant. However, since CBD is not a scheduled substance on its own (ie, apart from being a “part” of the marijuana plant) it is lawful when derived from a lawful source. Under federal law there are several lawful sources, including: (1) the mature stalks of the cannabis plant, which are excepted from the definition of “marijuana”; (2) industrial hemp, which is a statutory exception to marijuana when grown according to a state’s pilot program; and (3) non-cannabis plants (hops, for instance, contain trace amounts of CBD). The DEA has reiterated in multiple public releases (see here, here, and here) that cannabinoids (other than THC, which is scheduled) are not controlled except when they are derived from marijuana.

d. Ohio law recognizes the “mature stalks” exception to the definition of marijuana. (Ie, the mature stalks of the cannabis plant are not controlled under Ohio law.) CBD derived from the mature stalks of the cannabis plant is therefore lawful. Similarly, CBD derived from some other lawful plant is also lawful. (Since meaningful quantities of CBD from non-cannabis plants are not presently on the market this exception is not pertinent to the discussion.) 

e. CBD derived from industrial hemp is lawful at the federal level and under the laws of most states. However, Ohio does not have an industrial hemp pilot program. There is no Ohio statute which carves out an exception for “industrial hemp” from the state’s definition of marijuana. Therefore, “industrial hemp” may be the same thing as “marijuana” under Ohio law and therefore controlled. I say “may” because this issue has never been decided by a court. Does Ohio have to give full faith and credit to the industrial hemp designation given to a cannabis plant cultivated under another state’s pilot program? Does the fact that federal law recognizes industrial hemp as lawful require Ohio to do the same? Does the absence of THC in an industrial hemp derived CBD product make a difference? The answers to these questions are uncertain. Thus, under Ohio law CBD from industrial hemp may be legal or it may be illegal. 

Now, let’s get into the details.

The Clarification issued by the BOP states: “HB 523 [the state’s medical marijuana statute] includes CBD oil in the definition of marijuana, regardless of whether it is a plant extract or synthetic product.” This is inaccurate and misleading. HB 523 is an 86 page document. The word “cannabidiol” is mentioned exactly once, in section 3796.19(B)(2), regarding labeling of marijuana products: “When processing medical marijuana, a licensed processor shall…(2) Label the medical marijuana packaging with the product’s tetrahydrocannabinol and cannabidiol content”. (emphasis added) It is true that CBD oil derived from marijuana is illegal; however, since CBD can be derived from sources other than marijuana, the BOP’s position on the matter is incomplete. Not to put too fine a point on it, but to the extent that its position is that all CBD in Ohio is illegal, the BOP is wrong.  

HB 523 did not create a new definition for marijuana. Instead, it expressly adopted Ohio’s existing definition. (“Sec. 3796.01. (A) As used in this chapter: (1) “Marijuana” means marihuana as defined in section 3719.01 of the Revised Code.”) Section 3719.01 of the Ohio Revised Code defines marijuana in line with the definition in the federal Controlled Substances Act (CSA). “CBD oil” is not included. Under Ohio law, marijuana is:

“[A]ll parts of a plant of the genus cannabis, whether growing or not; the seeds of a plant of that type; the resin extracted from a part of a plant of that type; and every compound, manufacture, salt, derivative, mixture, or preparation of a plant of that type or of its seeds or resin. “Marihuana” does not include the mature stalks of the plant, fiber produced from the stalks, oils or cake made from the seeds of the plant, or any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted from the mature stalks, fiber, oil or cake, or the sterilized seed of the plant that is incapable of germination.” (emphasis added)

Under both federal and Ohio state law, marijuana does not include the mature stalks of the cannabis plant. CBD can be, and often is, derived from the mature stalks of the cannabis plant. And, as I discussed above, CBD is not listed as a controlled substance under either federal or Ohio state law. Therefore, it is lawful when derived from the mature stalks. This is because CBD can only be a controlled substance when it is derived from marijuana. The mature stalks are not marijuana.

This is a significant point and so, at the risk of being redundant, I’ll reiterate it in a slightly different context. The reason CBD is illegal when derived from marijuana is due to the statutory language which makes “all parts” of the cannabis plant, except for the mature stalks and non-viable seeds, a controlled substance. Under both federal and Ohio law chlorophyll, terpenes, and even carbon derived from a marijuana plant are controlled substances. Although it may seem odd, chlorophyll and CBD are on the same legal footing with respect to their status under the federal and Ohio CSAs: they are lawful except when derived from marijuana. (Although I do not expect a crackdown on marijuana derived chlorophyll, I think this is a useful illustration since it removes a lot of the fog surrounding CBD and helps to clarify the issue.)

In other words, it is clear that CBD derived from the mature stalks of the cannabis plant is lawful under both federal and Ohio state law. (By the way, this is the case with almost all of the states.)  

The open question is whether CBD derived from industrial hemp is lawful in Ohio. Under the industrial hemp provisions of the 2014 Farm Act, Congress authorized individual states to enact pilot programs for industrial hemp. Although most states have enacted pilot programs, the Farm Act did not require them to do so. Importantly, Ohio has not enacted a pilot program. 

When a state enacts a pilot program the cannabis that is cultivated under the program is excluded from the definition of “marijuana” and is not regulated by the CSA. (The Ninth Circuit recently ruled that the industrial hemp provisions of the Farm Act preempt the CSA: “The [Farm] Act contemplates potential conflict between the Controlled Substances Act and preempts it.”) In other words, industrial hemp is not a controlled substance. It is not marijuana. CBD derived from industrial hemp is thus lawful at the federal level, in the state in which the hemp was grown, and in other states that recognize industrial hemp as a legal exception to marijuana. (Under the current federal appropriations act, transporting, processing, selling, and using industrial hemp- in or outside the state of cultivation- is lawful.) Most states recognize this distinction. This is why CBD from industrial hemp is lawful throughout much of the country. 

However, what about states, such as Ohio, that do not have pilot programs? These states do not have statutes excluding industrial hemp from the definition of marijuana. The prevailing view is that industrial hemp is nothing more than marijuana under their laws. Using this logic, CBD derived from industrial hemp is no different than CBD derived from marijuana and is therefore illegal in these states.

But what about the Full Faith and Credit Clause (FFCC) of the US Constitution? Article IV, Section 1 states: “Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State.” Under the FFCC does Ohio have to recognize industrial hemp from another state, despite the fact that it does not have its own industrial hemp laws? I do not want to veer too far into Constitutional law matters in this post. Suffice it to say that most commentators contend that the Supreme Court has defanged the FFCC and that, in practice, it mostly operates in financial matters to require courts of one state to honor the agreements and judgments entered in another state. Under this view the FFCC does not apply to things like state-specific conceal-carry handgun laws or, presumably, to industrial hemp laws. (Also, and contrary to some of the arguments I’ve seen floating around the internet, the FFCC does not operate to legalize the practice of ordering marijuana from a legal state into a prohibition state. This is due in part to the fact that marijuana is federally illegal.)

This is not the end of the story. Federal law explicitly defines industrial hemp in the Farm Act. Perhaps a winning FFCC argument could be constructed on this, or another, point. Hopefully, that won’t be necessary. The 2018 Farm Act will most likely be enacted this month. (The House/Senate Conference Committee for the 2018 Farm Bill met yesterday. The hemp provisions received nothing but positive comments.) If enacted, the 2018 Farm Act would explicitly legalize both hemp and cannabinoids derived from hemp across the country. This would end the need to create an FFCC, or other, argument about CBD in Ohio and other states that do not have industrial hemp pilot programs. Until then, the status of CBD derived from industrial hemp in Ohio is uncertain. However, CBD derived from the mature stalks is undeniably lawful. What, if anything, the BOP will do about this remains to be seen.  

Rod Kight is a lawyer based in Asheville, NC. He is licensed in North Carolina and Oregon and represents legal cannabis businesses. You can contact him by clicking here.