Court dismisses HIA suits vs. DEA, calling them ‘weak, mystifying, ridiculous’

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A U.S. court has dismissed two related appeals in cases brought against the federal Drug Enforcement Administration (DEA) in 2020 by the Hemp Industries Association (HIA) regarding jurisdiction over hemp derivatives that go over the threshold for THC during processing.

HIA and South Carolina CBD maker RE Botanicals filed lawsuits challenging an interim final rule set by the DEA which holds that any cannabis extract or product which exceeds the federal limit of 0.3% THC is considered a controlled substance. DEA issued the rule shortly after the passage of the 2018 Farm Bill that legalized hemp federally.

The plaintiffs had argued the rule violates the intent of the Farm Bill, which they claimed widely exempts hemp and its derivatives from the Controlled Substances Act.

‘No injury’

Stakeholders have said the DEA rule, which would criminalize hemp at any point in the production process when the material’s THC levels exceed 0.3%, showed the agency is trying to put itself in charge of the CBD industry.

Calling the HIA’s case “rather weak,” U.S. Circuit Judge Laurence Silberman said the Association’s attorneys had failed to demonstrate how the policy had injured the plaintiffs.

“Although Petitioners’ opening brief suggests that the language of the implementing (DEA) regulation is different from the language of the (Farm Bill) statute, they never explain the significance . . . of the textual difference nor why the textual difference causes them injury,” Silberman wrote in dismissing the main suit.

“There is simply the claim that the regulation increases DEA authority over what the statute contemplates,” Silberman continued.

Enforcement fears

HIA has argued that the process through which hemp flowers are turned into CBD for consumer products often means that material can temporarily exceed the 0.3% delta-9-THC limit, and that the rule therefore wrongly subjects producers to DEA enforcement.

Government lawyers said the DEA’s rule is not intended to be more strict than the Farm Bill statute that legalized hemp, meaning no injury was suffered by the plaintiffs.

HIA had also claimed damage as a result of the DEA exempting Epidiolex, the only CBD drug currently approved by the Food & Drug Administration (FDA), from Controlled Substances Act. The drug agency did not sufficiently explain why it removed Epidiolex from regulation, plaintiffs argued, and suggested the DEA’s reasoning might negatively affect them in some other context.

Beside the point

Calling that claim “mystifying,” the court rejected the HIA’s contention that removing Epidiolex from the federal drug list conflicts with United States treaty obligations, and said regulation of Epidiolex is unlisted because its THC concentration is only 0.1%, far less than the 0.3% threshold under the Farm Bill

“Petitioners provide no evidence that they produce Epidiolex or that Epidiolex is a competitor to Petitioners. So we cannot even imagine how Petitioners could be injured by the DEA’s relaxation of regulation of a non-marijuana drug,” the court said.

“This contention is frankly ridiculous,” Silberman wrote. “Petitioners cannot challenge the reasoning of a case that does not directly affect them.”

In a dismissing a related appeal focused on DEA rules for hemp extraction, U.S. Circuit Judge Karen Henderson wrote that HIA had again failed to show that it was directly injured by the drug agency’s policy toward intermediate-stage raw material and waste.

“Neither the Plaintiffs nor the DEA asserts that the agency is currently undertaking or has undertaken an enforcement action against the Plaintiffs’ possession or manufacture of hemp byproducts,” Henderson wrote. “Meaning that the Plaintiffs’ challenge is therefore grounded in the alleged threat of enforcement,” and reflects no immediate injury.

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