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CBD is the New Avocado Toast

Posted by Alexa Steinberg, Esq. | Jun 14, 2018 | 0 Comments

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As the demand for Cannabidiol (CBD) continues to skyrocket, CBD products now line the shelves of Whole Foods and can be added to beverages at your local coffee shop and juice bar. While it seems the CBD craze is everywhere, the legality of CBD is a whole other story. Due to different laws in different states and even different laws at state and federal level, many are deterred from using CBD. And so the confusion leaves us wondering - “Is CBD legal?”

The answer to that question depends on where you are, where your CBD came from, and, frankly, who you ask. While it's true that CBD is legal in all 50 states, it's not completely legal. The difference between legal and illegal typically depends on several important factors determined by the state in question. There is, however, one very important factor that is a crucial determinant across all states, and that is - where is the CBD derived from – hemp or cannabis.

Is the CBD Hemp-sourced or Marijuana-sourced?

Marijuana and hemp are both members of the cannabis family and share a lot of characteristics. However, because hemp does not have psychoactive effects, the law treats it differently.  For example, many hemp products are legal and available in all types of different industries and stores across the United States. Marijuana, on the other hand, is a different story. This is why the source of a CBD product is crucial to its legality. In late May 2018, the industrial-hemp industry got a nod of approval from the Drug Enforcement Administration, when the agency clarified that products and materials that are made from the cannabis plant and which fall outside the CSA definition of marijuana (such as sterilized seeds, oil or cake made from the seeds, and mature stalks) are not controlled under the CSA.

Such products, e.g. CBD may accordingly be sold and otherwise distributed throughout the United States without restriction under the CSA or its implementing regulations. It was noted that the mere presence of cannabinoids is not itself dispositive as to whether a substance is within the scope of the CSA; the dispositive question is whether the substance falls within the CSA definition of marijuana.

Accordingly, importing and exporting cannabinoid products with 0.3% THC or less is arguably legal, but the DEA notes that importation/exportation of those products also falls under the discretion of the U.S. Customs and Border Protection. The hemp industry won't really be safe until hemp is explicitly removed from cannabis' Schedule I status with the federal government.

Recently, on May 28, 2018, the United States Justice Department's Drug Enforcement Agency released an internal directive regarding the presence of cannabinoids in products and materials made from the cannabis plant. In part, it reads:

Products and materials that are made from the cannabis plant and which fall outside the CSA definition of marijuana (such as sterilized seeds, oil or cake made from the seeds, and mature stalks) are not controlled under the CSA. Such products may accordingly be sold and otherwise distributed throughout the United States without restriction under the CSA or its implementing regulations. The mere presence of cannabinoids is not itself dispositive as to whether a substance is within the scope of the CSA; the dispositive question is whether the substance falls within the CSA definition of marijuana.

California's Licensed Cannabis Business Licenses do not include CBD Businesses

Even the agencies involved in regulating cannabis acknowledge contradictions among their various rules and policies. The Bureau of Cannabis Control (BCC) in Sacramento was asked about CBD legality and permitting. Their response - The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) applies to cannabis and explicitly excludes industrial hemp from the definition of cannabis. Retailers licensed by the Bureau are licensed to sell cannabis goods and may not sell industrial hemp products on the same licensed premises where cannabis goods are sold.

So, for the time being, California and the federal government seem to be at odds when it comes to hemp derived CBD. California is treating it as a regulated product, while the federal government is giving it the green light. It's unclear where the authority lies in the BCC preventing industrial hemp products from being sold on the same licensed premises where cannabis goods are sold and it's also unclear why the BCC has taken this position.  But with the recent clarification by the DEA, it can be expected that clarification by the BCC is soon to follow.

So, while much regarding CBD is still unclear, one thing is certain - the CBD craze is here to stay! Stay tuned!

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