The Rapidly Evolving Legal Status of CBD

CBD’s legal status is misunderstood and evolving.

The legal status of cannabidiol (CBD) is one of the most misunderstood issues in the cannabis industry. A clear understanding of the current legal status of CBD can be helpful in predicting and interpreting the arc of its legal evolution.

Despite being relatively straightforward, the law is often misstated by news outlets, federal agencies, and non-governmental organizations. The primary cause of confusion is misuse of the word “cannabis.” In order to understand the legal status of CBD, it is necessary to understand the legal status of the various forms of cannabis. This is because CBD’s legal status is based on its source. This is the “Source Rule,” which I will discuss in more detail in this article. 

The terms “cannabis,” “hemp,” and “marijuana” all have different legal meanings and significance. “Cannabis” is a scientific and botanical term that has no formal legal definition or legal significance. It refers to Cannabis sativa L (Cannabis), a genus of flowering plants in the family Cannabaceae. From a legal standpoint, the word “cannabis” can describe a legal plant (industrial hemp) or an illegal one (marijuana).

All marijuana is Cannabis, and all industrial hemp is Cannabis. However, the opposite is not true; not all Cannabis is marijuana, nor is all Cannabis industrial hemp. This may sound like headache-inducing wordplay or an annoying flashback to Plato’s theory of Forms and particulars (in which Cannabis is the Form and marijuana and industrial hemp are the particulars), but it is a critical step in understanding how CBD’s legal status has been misstated and why it is widely misunderstood.

Industrial hemp is a particular type of Cannabis that is lawful. Pursuant to 7 U.S. Code § 5940, often referred to as “Section 7606” after the section in the bill that eventually became the 2014 Farm Act, industrial hemp is exempt from the federal Controlled Substance Act (CSA) when it is grown pursuant to a state pilot program and does not contain concentrations of delta-9 tetrahydrocannabinol (THC) that exceed 0.3%. Additionally, Congress has further protected industrial hemp by enacting several consecutive appropriations acts, including the current one, that prohibit the use of federal funds to interfere with the “transportation, processing, sale, or use of industrial hemp…. within or outside the State in which the industrial hemp is grown or cultivated.

On the other hand, marijuana is an unlawful type of Cannabis that has higher concentrations of THC than industrial hemp. It is a controlled substance under the CSA.

CBD derived from industrial hemp is legal under federal law and the laws of most states; however, CBD derived from marijuana is illegal. CBD is not included in the list of controlled substances under the CSA or the equivalent statutes of most states. It is controlled (which, for our purposes here, means “illegal”) only when derived from marijuana. This is because marijuana is a controlled substance, and its definition includes “all parts” of the Cannabis plant except for the fibers of the mature stalks and non-germinating seeds. For this reason it is a true statement that chlorophyll is a controlled substance when derived from marijuana. In fact, CBD and chlorophyll share the same legal status under the CSA.

CBD derived from industrial hemp is lawful. Since CBD is not listed in the CSA’s schedule of controlled substances it is only controlled when derived from marijuana. Industrial hemp is a lawful exception to marijuana. CBD derived from it is also legal. Additionally, since the mature stalks of the cannabis plant are an exception to the definition of marijuana, CBD derived from them is also lawful.

For these reasons, statements such as this one are inaccurate:

CBD derived from the Cannabis Sativa plant is currently controlled as a Schedule I substance under the CSA.

This is an actual statement from the FDA, made earlier this year. It is similar to many statements I’ve read over the past several years. In fact, a rule enacted by the DEA using similar terminology was the subject of a recent lawsuit filed by the Hemp Industries Association against the DEA. (The lawsuit prompted the DEA to clarify the rule on several occasions and the Court to clarify that industrial hemp is not a controlled substance.) To say that all CBD is unlawful because it is a derivative of Cannabis is nonsensical; there are lawful and unlawful types of Cannabis.

CBD’s legal status is about to become much less complicated, at least with respect to the CSA. The 2018 federal Farm Bill, which is likely to be enacted this Fall, explicitly states that cannabinoids derived from hemp, including CBD, are lawful. In effect, the 2018 Farm Bill codifies the Source Rule by specifically articulating that CBD from hemp is lawful. Although that is the case now, the 2018 Farm Bill clarifies in a single statutory provision what currently takes a short article (or a legal brief) to articulate. Additionally, the 2018 Farm Bill will eliminate the issue of state by state legality by making hemp and CBD derived from it legal across the country in all 50 states.

The legal status of CBD under the Food, Drug & Cosmetic Act, which is policed by the FDA, is another matter entirely. The FDA recently approved Epidiolex, a patented medication containing CBD derived from marijuana. The FDA recently recommended that it be removed from the CSA schedules entirely. The DEA rescheduled it to Schedule V (the least restrictive).

How the FDA will regulate CBD is anyone’s guess. It currently takes the position that CBD is not a dietary supplement and may not be added to ingestible products. It may hold fast to that position or loosen it. We also do not know what the FDA will do with hemp extracts that contain CBD and other naturally occurring cannabinoids and phytonutrients. Based on prior actions in related situations involving compounds extracted from natural products and approved as drugs, it is reasonable to believe that the FDA will consider ingestible products that are enriched with CBD to be adulterated, and thus prohibited, while allowing the sale of ingestible products that contain hemp extract with naturally occurring CBD. If the FDA chooses this path it will immediately raise difficult legal issues. For instance, cannabinoids and terpenes can be isolated and reconfigured into a myriad of formulations, many of which mimic actual or possible hemp strains. How will the FDA view these formulations?

Then again, the FDA may choose not to regulate CBD restrictively. In the Request for Comments regarding sixteen drug substances it issued this week the FDA made a point to state that, “CBD is not specifically listed in the schedules of the 1961, 1971, or 1988 International Drug Control conventions.” It went on to assert: “The 40th Expert Committee on Drug Dependence recommended that preparations considered to be pure CBD should not be scheduled within the International Drug Control Conventions[.]

The next several months promise continual evolution of CBD’s legal status. Although the analysis provided in this article will soon be outdated in its particulars, the underlying legal concepts are likely to hold, albeit in different contexts. 

October 12, 2018

Rod Kight is an attorney who represents lawful cannabis businesses. He speaks at cannabis conferences across the country, 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. You can contact him here.

A version of this article will be published this Fall in the PotNetwork Magazine, an In-depth look at every sector of  the cannabis industry that tells the stories that cannot be told on the daily site. For more information about the Magazine contact Brandon Dorfman: bdorfman@potnetwork.com

8 comments on “The Rapidly Evolving Legal Status of CBDAdd yours →

    1. That is a good question. I think that passage of the 2018 Farm Act (Act) will have some effect on the California DPH issues, which I wrote about here. That being said, the Act does not interfere with the FDA’s regulatory authority, nor with analogous state regulations that pass muster with the Feds. IT all remains to be seen.

    1. Thank you for reading and commenting, William. In response to your question, the answer is “yes”. However, it is important to note that industrial hemp is currently legal at the federal level, as set forth in both the statute and the 9th Circuit Court of Appeals’ ruling in the recent case filed by the Hemp Industries Association against the DEA. The biggest change is that it will make hemp lawful in all 50 states, which is currently not the case.

  1. Thank you for the great article! Very informative. I do have a question for you though. It seems apparent that CBD Oil derived from “Industrial Hemp” (as defined in 7 USC 5940) is legal under Federal Law. However, what about imported CBD Oil that is derived from Hemp grown in other countries?

    1. Good question, Steve. CBD oil that is derived from the mature stalks of the cannabis plant that is lawfully grown outside the USA (referred to as “non-psychoactive hemp”) is lawful. This is based on the 9th Circuit Court of Appeal’s ruling in a 2003 case filed by the Hemp Industries Association against the DEA.

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