Is CBD Legal? (2018 Update)

April 04, 2017

** DISCLAIMER: the following is not legal advice. Consult a lawyer and the laws in your state before buying or selling CBD products. **

Is CBD Legal?

Everybody who buys or sells CBD wants to know if CBD is legal or not. If you want your questions answered, watch my interview with cannabis lawyer, Rod Kight.

If you don’t have time to read the whole post you can just scroll down to the facts you need to know at the bottom of the post.

In December 2016, the DEA declared that CBD is and always has been considered a schedule 1 substance, falling under the same category as “marijuana extracts”.

But the situation is far more complex. What the DEA failed to consider is where the CBD is being sourced from. CBD can be sourced from two distinct varieties of cannabis plants: marijuana and industrial hemp.

Marijuana is casually defined as a cannabis plant containing more than 0.3% THC (when compared to hemp). A more accurate definition of marijuana is: all parts of the plant cannabis sativa L, with the exception of certain specific parts of the plant, including, the mature stalk, non-germinating seeds, and a few other parts, all of which contain minuscule amounts of THC. 

Industrial hemp is casually defined as a cannabis plant containing no more than 0.3% THC. The following is a more in-depth, legal definition of industrial hemp ala our favorite cannabis lawyer, Rod Kight: Industrial hemp is a multi-part definition: (1) the plant cannabis sativa L., (2) grown pursuant to a State’s pilot research program, (3) containing less than 0.3% THC on a dry weight basis.

I repeat, you can source CBD from both marijuana and industrial hemp. They both contain CBD in varying quantities. The legality of CBD is determined by where it’s sourced from.

CBD sourced from marijuana is legal in states who have medicinal or recreational programs for marijuana use. Examples of states like this are Colorado and Washington.

CBD sourced from industrial hemp is legal in states with hemp farm bill programs for growing industrial hemp. CBD sourced from industrial hemp is also legal in states which have laws which allow for use of CBD products but may not allow for the use of marijuana products. An example of one of these states would be Kentucky or Texas. See the chart below.

Keep in mind that cannabis laws currently vary state by state. In the future, this may change but for now, each state makes their own independent decisions on cannabis law.

Marijuana States of America 2017

What is the “Farm Bill” and why does it matter?

If you don’t know what I mean by “farm bill programs”, I will explain that now. In the United States, the Farm Bill is the declaration of policy regarding agriculture released by the federal government (source: Wikipedia). In 2014, as part of the United States Farm Bill, it was stated that certain states would allow for the licensed growing of industrial hemp under the supervision of each state’s department of agriculture.

This was section 7606 of the 2014 Farm Bill. You can read that section here, if you are interested. 

States like Colorado and Kentucky began active industrial hemp farming operations soon after the passing of the 2014 Farm Bill. In addition to hemp fiber and hemp food production, a significant amount of hemp is being grown for the production of CBD products. The DEA mistakenly ignored this in their blanket statement that all CBD is illegal. This is why the Hoban law group, one of the nations leading cannabis law firms, is suing the DEA. 

So CBD sourced from industrial hemp grown in a state authorized to grow industrial hemp is not illegal. Whoo – glad that’s out of the way. But there’s more…

See most of the CBD products made from industrial hemp are, like many products, sold online and delivered across state lines to consumers. A few minutes on Amazon yields plenty of search results for “CBD Oil” shipping to all 50 states.

So there is an important question which remains to be answered: is shipping CBD hemp oil products across state lines legal? To find the answer to this question I spoke to one of the nation’s best lawyers in the cannabis space, Rod Kight.

In our conversation, Rod clarified why interstate commerce of CBD products is protected under Congress. In late 2015 Congress released a statement in the Omnibus Appropriations Act of 2016 (P.L. 114-113) (“the Funding Act”) which reads:

“None of the funds made available by this act or any other act may be used… to prohibit the transportation, processing, sale or use of industrial hemp that is grown or cultivated in accordance with section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated.”

According to Rod, the above statement from Congress made CBD hemp products legal to buy across all 50 states, so long as the CBD was sourced from hemp grown by a licensed grower in a state with a hemp pilot program. Under this statement, no funding could be used to prohibit the transportation, processing, or sale of hemp products across state lines.

What about internationally sourced CBD hemp oil?

Some of the major players in the CBD hemp oil business are sourcing their CBD oil from hemp grown overseas, often in Europe. We at CBD School support domestically grown hemp over overseas hemp for many reasons but this article is about legal issues so we will keep the focus on the law.

Internationally sourced CBD is protected under a different legal code than the US Farm Bill. I am referring to a 2004 legal ruling of the case HIA vs DEA. The ruling established that non-psychoactive hemp products containing only trace amounts of naturally occurring THC are, and always have been, legal to import into the US.

CBD companies who choose to source from overseas generally extract CBD from the parts of the hemp plant considered exempt from the definition of marijuana: hemp stalks, fiber, oil and cake made from hemp seed, and sterilized hemp seed itself.

Individual State Laws and CBD

Now we need to go over the problem of individual state laws. Many hemp growers and CBD processors are asking themselves, “Wait a sec…what if hemp is legal in my state but I want to ship it to your state where I am not sure if it’s legal?”

The current problem is that while many states have hemp laws, there are some states that just don’t have hemp laws at all. What that means is they don’t have laws against hemp, but they also don’t have laws that allow for hemp. What these states have are laws against the use of cannabis in any form, and that includes non-psychoactive products like CBD hemp oil. Examples of these states are Idaho and West Virginia.

CBD may be illegal under state law in those particular states since they do not distinguish between industrial hemp and marijuana. However, Rod stands by the legality of CBD because it is not listed as a controlled substance in the controlled substances list. THC is listed, but CBD is not.

Rod’s argument is that because CBD is not listed as a controlled substance, and because it is sourced from a lawful plant, it is thus federally legal. This is what he advises his clients. With that said however, Rod still cautions his clients to be careful when shipping to states which have no hemp laws and which lump hemp in with their marijuana laws. With these states, there is a possibility of some interference from the state of the recipient.

Rod is currently working and doing his best to clarify the interstate commerce laws regarding CBD hemp products. It is unfortunately not a black and white issue at the moment.

Now with that said, there are still precautions you can take as a CBD distributor to protect yourself:

  • Are you sourcing the CBD from industrial hemp grown on a licensed hemp farm in a state with a hemp pilot program supervised by the state’s department of agriculture?
  • Are you shipping your product from a state with a hemp pilot program supervised by the state’s department of agriculture?

If you are a buyer of CBD products, i.e. you buy CBD products in small quantities for personal use, you need to be aware of the hemp laws in the state where you live. While this isn’t legal advice, if you’re buying CBD products in small quantities for personal use, you are very unlikely to be targeted by anyone taking legal action. Still, we recommend you know the laws of your state. Most of the legal concerns however will be for anyone who is importing large quantities (bulk CBD products) into a state that doesn’t have hemp laws.

The people who import bulk quantities of CBD products are usually brick and mortar retailers of CBD products. These are the people who should be more concerned about the legal status of CBD in their states. I had this fact confirmed by one of the Hoban group lawyers, Garrett Graff. So far, these are the only distributors who have had any action taken against them. Some retailers in CBD unfriendly states have been asked to remove the products from their store shelves.

Is CBD Legal? This is what you need to know:

  1. CBD law is still a gray area. Be cautious with broad, absolute statements about CBD like: “CBD is totally illegal!” or “CBD is legal in all 50 states!”
  2. The legality of CBD is determined by its source. CBD sourced from marijuana plants (cannabis plants with a THC content of more than 0.3%) are only legal in states with established recreational and medical marijuana laws. CBD sourced from industrial hemp plants (cannabis plants with NO MORE than 0.3% THC content) is legal in all 50 states. But keep in mind that there are some states in which marijuana is illegal and their definition of marijuana ignorantly includes hemp. In those particular states, CBD hemp oil is a much more gray area. You need to know the laws of the state in which you reside.
  3. There are federally exempt parts of the cannabis plant. The federally exempt parts of the cannabis plant are the hemp stalks, fiber, oil and cake made from hemp seed, and sterilized hemp seed itself. While these are not ideal sources for extracting CBD, some companies rely on these sources for their CBD products. These are mostly companies who import their CBD from industrial hemp grown overseas in countries like Europe.
  4. The 2015 Omnibus Spending Bill is the savior of interstate commerce of CBD. In that bill, it states that: no federal funding shall be used to interfere with interstate commerce of products made from hemp grown under the rules laid out by the 2014 Farm Bill section 7606.
  5. For distributors of CBD: while this is not legal advice, make sure you put some language in your advertising that the buyer is buying at his own risk and acknowledging that CBD hemp oil is lawful to obtain and use in the state where they reside. The safest way for distributors to conduct their CBD hemp business is to source, sell, and ship their CBD hemp products from a state authorized to grow industrial hemp under the 2014 Farm Bill. Another option is to source all of your CBD product from overseas as this is protected by the 2004 ruling of HIA vs DEA.
  6. For buyers of CBD hemp products: the individual laws of certain states are really the problem when it comes to CBD hemp laws. Make sure you know the laws of your state. With that said, and again, this is not legal advice: if you are buying in small quantities for personal use, you should be fine and needn’t worry. For people buying in bulk quantities for resale, you need to very thoroughly know the laws of your state. Bulk orders are more likely to draw attention from authorities.
  7. Per the FDA, CBD products are NOT ALLOWED to be marketed as dietary supplements. Do not market CBD products as dietary supplements and do not make any medical claims about CBD.

CBD laws are changing every day and will likely change again soon. Let’s remain optimistic that cannabis laws will continue to only change for the better so that more people can access the benefits of the cannabis plant.

The post Is CBD Legal? (2018 Update) appeared first on CBD School.

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