As a followup to my earlier Cannabis Musings about the Drug Enforcement Agency’s interim final rulemaking implementing the 2018 Farm Bill changes to the Controlled Substances Act (link), the rule with perhaps the most challenging implications for the hemp industry is how the DEA views work-in-progress hemp extract (delightfully-acronymed as WIPHE).

When hemp biomass (the plant) goes thru an extraction process to pull out cannabinoids (like CBD), there’s a possibility that, due to that process, the WIPHE will contain Delta-9 THC over the 0.3% legal limit (sometimes called “hot”), before further processing and finishing takes that concentration down to 0.3% or less. (It’s worth noting that there are also times where the plant itself, expected to be within the 0.3% tolerance, grows “hot” and contains excessive Delta-9 THC, which would arguably mean that the plant itself wouldn’t even qualify as “hemp” in the first place.)

The question of whether hot WIPHE is legal under the Controlled Substances Act has been a subject of debate since the 2018 Farm Bill, primarily because that law didn’t clearly and expressly address the question (although there’s been quite a bit of exegesis over whether an exemption for hot WIPHE can be read into the 2018 Farm Bill).

Well, the DEA has weighed in, loud and clear: “a cannabis derivative, extract, or product that exceeds the 0.3% Δ9-THC limit is a schedule I controlled substance, even if the plant from which it was derived contained 0.3% or less Δ9-THC on a dry weight basis.” (link)

In short, hot WIPHE is a controlled substance in the eyes of the DEA.

What does this mean? If you’re extracting, you may need to consider how the DEA rule implicates your processes, as well as any certifications and representations you’re making to your customers. If you’re producing or selling finished products, you should look at your supply chain and consider the implications of this new DEA rule on extract that you’re buying. All of these DEA rules are “interim” and subject to public comment, and hemp industry participants (including lawyers) I spoken with are thinking about not only how to handle this particular treatment of WIPHE, but also how to respond.

This is yet another reminder that the federal government isn’t going to do the cannabis industry any favors (see, the spherical cow problem (link)), even when it comes to a product that same government made legal.