Cannabis Industry News Alert

The average American consumer has probably noticed an increase in products for sale that include cannabidiol (CBD), a non-psychoactive component of cannabis. These products have seen an exponential increase in popularity, particularly since passage of the Agricultural Improvement Act of 2018 or “Farm Bill,” which is generally seen as a federal legalization of CBD derived from industrial hemp. The number of growers of industrial hemp is likely to increase with demand for hemp-derived CBD.

While the Farm Bill clarified the definition of “marijuana” under the Controlled Substances Act to exclude “hemp,” it did not seem to clear a path to approval for those seeking to grow marijuana legally for research purposes. However, the Drug Enforcement Agency (DEA) recently announced major changes affecting those who want to legally manufacture marijuana for use in scientific and medical research. In an effort to expand the field of approved growers registered with DEA for production of marijuana, DEA announced that it will begin reviewing applications from those seeking to become approved marijuana growers. DEA expects that the expansion of approved growers will increase the varieties of marijuana available for those purposes. DEA’s statements follow a period of significant increase in the number of DEA-registered growers, which jumped over 40% from 384 in January 2017 to 542 in January 2019. DEA plans to issue new regulations covering the application and registration process, and announced that it will delay its review of marijuana manufacturing applications currently on file until the new regulations are finalized.

DEA also reiterated that no registration is needed to grow or manufacture certain types of cannabis, including “hemp” in particular, which is defined as not containing more than a 0.3% concentration of delta-9 tetrahydrocannabinol (THC) by dry weight. The agency advised those who no longer need DEA registration in light of changes to the definition of “marijuana” that they will be permitted to withdraw their applications.

DEA Acting Administrator Uttam Dhillon said, “DEA is making progress in the program to register additional marijuana growers for federally authorized research, and will work with other relevant federal agencies to expedite the necessary next steps. We support additional research into marijuana and its components, and we believe registering more growers will result in researchers having access to a wider variety for study.”

The Department of Justice has indicated its concurrence with DEA’s plans. Attorney General William Barr said, “I am pleased that DEA is moving forward with its review of applications for those who seek to grow marijuana legally to support research… The Department of Justice will continue to work with our colleagues at the Department of Health and Human Services and across the Administration to improve research opportunities wherever we can.”

The DEA’s announcement should signal progress toward broader access for would-be growers of legal marijuana. If you are serious about becoming a DEA-registered grower, you should seek advice from an experienced attorney to better understand related legal issues and the application process under DEA’s new regulatory requirements after they are issued.