DEA Hurts Growing Industry and Exceeds its Authority Regarding Scheduling Controlled Substances

Enacts Final Rule Seeking to Make Any Extract of the Cannabis Plant a Schedule 1 Drug

Denver, CO – On December 13, 2016, the DEA issued its Final Rule, “Establishment of New Drug Code for Marihuana Extract,” which serves to potentially devastate developing businesses and consumer, textile and manufacturing industries related to cannabinoids. Robert Hoban, a cannabis, cannabinoid and hemp lawyer and expert as well as an adjunct professor of law at The University of Denver, states the DOJ and DEA cannot unilaterally make law and schedule controlled substances, thus causing this Final Rule to exceed the DEA’s authority. Instead, such actions require an act of Congress.

“The feeling is that this is an action beyond the DEA’s authority and we believe this is unlawful and we are taking a course of action for our clients. This Final Rule serves to threaten hundreds, if not thousands, of growing businesses, with massive economic and industry expansion opportunities, all of which conduct lawful business in reliance upon the Federal Government also acting pursuant to law, and as ordered by the Ninth Circuit in 2003 and 2004. We will see the Federal Government in court.” – Robert Hoban, a cannabis, cannabinoid and hemp lawyer and expert

As is the case here, the DEA is an agency that has previously sought to exceed its authority contrary to applicable law. It is anticipated that this “final ruling” and determination will be challenged both in court and administratively across the country. With 28 states that already have medical cannabis laws on the books, 8 states passing adult use laws in the November election, and numerous other states enacting industrial hemp legislation, the industry is up for the challenge of litigation against any government agency that operates contrary to prevailing law and enforcement policies.

The DEA’s Final Rule seeks to broadly expand and override existing definitions of controlled substances by newly creating a “Marihuana Extract” classification. The effect of this Final Rule appears to be incorporation of any and all cannabinoids from the Cannabis plant as a Schedule 1 controlled substance, despite the fact that many such cannabinoids are naturally occurring derived from non-“marihuana” portions of the plant or or from entirely different plants altogether. Problematically, the Final Rule fails to acknowledge there exist certain parts of the plant, and certain types of the plant — namely, industrial hemp — which cannot and should not be treated as a “Marihuana Extract.” Notably, the DEA has sought to unilaterally create laws before, and has lost, when challenged.

Hoban surmises, “The feeling is that this is an action beyond the DEA’s authority and we believe this is unlawful and we are taking a course of action for our clients. This Final Rule serves to threaten hundreds, if not thousands, of growing businesses, with massive economic and industry expansion opportunities, all of which conduct lawful business in reliance upon the Federal Government also acting pursuant to law, and as ordered by the Ninth Circuit in 2003 and 2004. We will see the Federal Government in court.”

About Hoban Law Group

The Hoban Law Group is Colorado’s original, experienced cannabis business law firm since 2008, providing expert advice to clients in the regulated, retail marijuana dispensary system and the industrial hemp industry. As a burgeoning movement has become a multi-million dollar industry, HLG has grown with it, home to a national footprint of attorneys licensed in over a dozen states across the country with the expertise to offer clients a one-stop-shop for their rapidly expanding business legal needs.

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