[Federal Register Volume 63, Number 2 (Monday, January 5, 1998)]
[Notices]
[Pages 260-262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-024]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 97-27]
Hemp Products Research Company; Denial of Applications
On June 17, 1997, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued two
Orders to Show Cause to Hemp Products Research Company (Respondent), of
Bellevue, Nebraska, notifying it of an opportunity to show cause as to
why DEA should not deny its applications for DEA Certificates of
Registration as a manufacturer of marijuana under 21 U.S.C. 823(a), and
as a researcher in the cultivation of marijuana under 21 U.S.C. 823(f),
for reason that its registration would be inconsistent with the public
interest. Respondent requested a hearing on the issues raised by the
Orders to Show Cause and the matter was docketed before Administrative
Law Judge Gail A. Randall.
On August 26, 1997, the Government filed a Motion for Summary
Disposition seeking a recommendation from the Administrative Law Judge
that the applications be denied without convening a hearing.
Thereafter, on September 17, 1997, Respondent submitted a prehearing
statement which included its response to the Government's motion. On
October 8, 1997, Judge Randall issued her Opinion and Recommended
Ruling, concluding that summary disposition is appropriate in this
matter, and therefore granting the Government's motion and recommending
that Respondent's applications for registration be denied. Neither
party filed exceptions to her opinion, and on November 21, 1997, Judge
Randall transmitted the record of these proceedings to the Acting
Deputy Administrator.
The Acting Deputy Administrator has considered the record in its
entirety, and pursuant to 21 CFR 1316.67, hereby issues his final order
based upon findings of fact and conclusions of law as hereinafter set
forth. The Acting Deputy Administrator adopts, in full, the Opinion and
Recommended Ruling of the Administrative Law Judge. his adoption is in
no manner diminished by any recitation of facts, issues and conclusions
herein, or of any failure to mention a matter of fact or law.
The Acting Deputy Administrator finds that Respondent has two
pending applications for registration with DEA. Respondent submitted an
application dated March 14, 1995, for registration
[[Page 261]]
with DEA as a researcher in Schedule I, listing the Administrative Drug
Code Number for marijuana. In addition, Respondent listed on its
application an address in Bellevue, Nebraska. In Respondent's letter
transmitting its prehearing statement, the President of Respondent
indicated that this was his home address, but that he was moving to a
new home in O'Neill, Nebraska. Respondent admitted in its prehearing
statement that the address listed on its application is not the
location where it intends to conduct research in the cultivation of
marijuana. Further, in its research protocol, required pursuant to 21
U.S.C. 823(f) and 21 CFR 1301.18, under the heading ``Location Where
The Research Will Be Conducted,'' Respondent states that ``[t]his study
is based on farms '' in 20 states, and that ``[b]iochemical and textile
analysis will be performed by [Respondent] in contractual industrial
laboratories.'' However, Respondent fails to specifically identify the
location(s) where it intends to conduct its research.
In its second application, dated May 18, 1995, Respondent seeks
registration as a Schedule I manufacturer, also listing on this
application the Administrative Code Number for marijuana. Respondent
indicated on its application that it wants to manufacture marijuana for
industrial purposes. Like with the researcher application, Respondent
admitted that the address listed on the manufacturer application is not
the location where Respondent intends to manufacture marijuana.
Instead, Respondent has stated that it ``is seeking approval of
approximately 360,000 acres for industrial hemp production in 18 states
at this time.'' Respondent ``intends to cultivate itself, and to
subcontract out, the cultivation, harvest and processing of low THC
industrial varieties of Cannabis hemp stalk, seed, and waste materials
* * *.'' Respondent intends, at harvest, to separate the leaf, flower,
and other waste from the stalk and seed of the Cannabis sativa L.
plant, and to use the hemp stalk for textile analysis. Respondent
further intends to then use the hemp seeds to grow new Cannabis sativa
L. plants.
Correspondence between DEA and Respondent prior to the issuance of
the Orders to Show Cause indicate that Respondent was advised that a
separate registration is required for each location where marijuana
will be manufactured and that there are certain security requirements
for manufacturing locations which must be inspected prior to the
issuance of any registration.
The Government, in its Motion for Summary Disposition, argues that
summary disposition is appropriate in this proceeding since there is no
dispute that Respondent has failed to comply with the application
requirements for registration with DEA as a manufacturer and as a
researcher of a controlled substance. First, the Government argues that
Respondent has failed to submit separate applications for each location
where it intends to manufacturer marijuana as required by 21 U.S.C. 822
and 21 CFR 1301.12. In its response, Respondent contends that feral
industrial hemp is a ``non-drug'' with no potential for abuse and
therefore it is unreasonable to require a separate registration for
each location where it intends to manufacture. Next, the Government
argues that Respondent has failed to disclose the location(s) where it
intends to conduct research on marijuana and to submit separate
applications for those locations as required by 21 U.S.C. 822 and 21
CFR 1301.12 and 1301.18(a)(2)(v). Respondent argues that it has not yet
acquired a research facility, and that it would be ``economically
foolish'' to obtain laboratory space without first receiving a DEA
registration. Finally, the Government asserts that Respondent has
failed, or refused, to allow DEA to conduct on-site inspections of any
location where it intends to manufacture or conduct research, thereby
precluding DEA from determining whether Respondent is in compliance
with security requirements. Respondent contends that it has provided
DEA with a list of a number of manufacturing locations, but that DEA
has never asked to conduct on-site inspections at any of these
locations.
The first question is whether Respondent intends to manufacture or
conduct research on marijuana. Respondent states that it does not want
``anything whatsoever to do with `marijuana' or `marihuana'. As stated
in applications and communications, interest is based solely on the use
of industrial hemp for the production of bioplastics, biofuels, cloth
and paper.'' In addition, Respondent asserts that it is intending to
deal with a ``non-drug'' since it has a very low concentration of
delta-9-tetrahydrocannabinol (THC). As Judge Randall noted, marijuana
is defined in 21 U.S.C. 802(16) as:
[A]ll parts of the plant Cannabis sativa L., whether growing or
not; the seeds thereof; the resin extracted from any part of such
plant; and every compound, manufacture, salt, derivative, mixture,
or preparation of such plant, its seeds or resin. Such term does not
include the mature stalks of such plant, fiber produced from such
stalks, oil and cake made from the seeds of such plant, any other
compound, manufacture, salt, derivative, mixture, or preparation of
such mature stalks (except the resin extracted therefrom), fiber,
oil, or cake, or the sterilized seed of such plant which is
incapable of germination.
Further, 21 U.S.C. 802(15) defines manufacture as ``the production,
preparation, propagation, compounding, or processing of a drug or other
substance, either directly or indirectly or by extraction from
substances of natural origin * * *.''
As noted previously, Respondent intends to process a substance that
originates from the Cannabis sativa L. plant, by separating at harvest,
the stalk and seed materials from the leaf, flower and other waste
material, and then using the seeds to grow new Cannabis sativa L.
plants. The Acting Deputy Administrator agrees with Judge Randall that
``[s]ince the definition of marihuana specifically includes all parts
of the plant, except the mature stalks, the Respondent proposes to
`process' the Cannabis sativa L. plant to reach the hemp component of
that plant.'' In addition, Respondent's use of the seeds to grow new
Cannabis sativa L. plants also falls within the statutory definitions
of the manufacture of marijuana. Therefore, the Acting Deputy
Administrator concludes that Respondent is proposing to engage in the
manufacture and research of marijuana. As to Respondent's assertion
that the substance that it intends to be involved with is a ``non-
drug'' due to its low concentration of THC, the Acting Deputy
Administrator concludes that the statutory definition of marijuana does
not address the degree of THC concentration. Therefore, regardless of
the level of THC concentration of the plants, Respondent's proposed
activities fall within the statutory definitions of the manufacture of
marijuana.
Pursuant to 21 U.S.C. 822(a), ``[e]very person who manufactures or
distributes any controlled substance * * * or who proposes to engage in
the manufacture or distribution of any controlled substance * * * shall
obtain annually a registration issued by the Attorney General * * *.''
Since Respondent intends to manufacture marijuana, a Schedule I
controlled substance, it is required to obtain a DEA registration.
Further, 21 U.S.C. 822(e) states that ``[a] separate registration shall
be required at each principal place of business or professional
practice where the applicant manufactures, distributes, or dispenses
controlled substances. . . .'' Respondent has submitted only one
application for registration to manufacture marijuana, and Respondent
has admitted that it does not intend to manufacture marijuana at the
address
[[Page 262]]
listed on the application. Instead, Respondent has indicated that it
intends to manufacture marijuana on farms in a number of different
states, however it has not submitted applications for registration for
these locations. Therefore, since Respondent's manufacturer application
fails to identify the principal place(s) of business where it intends
to manufacture marijuana, it does not comply with 21 U.S.C. 822.
Regarding Respondent's application to conduct research, pursuant to
21 U.S.C. 823(f), DEA is authorized to register ``practitioners'' to
conduct research with controlled substances. ``Practitioner'' is
defined in 21 U.S.C. 802(21) as:
[A] physician, dentist, veterinarian, scientific investigator,
pharmacy, hospital, or other person licensed, registered, or
otherwise permitted, by the United States or the jurisdiction in
which he practices or does research, to distribute, dispense,
conduct research with respect to, administer, or use in teaching or
chemical analysis, a controlled substance in the course of
professional practice or research.
Therefore, state authorization to conduct research is a
prerequisite to DEA registration. See also 21 U.S.C. 823(f). Like with
its manufacturer application, Respondent's researcher application lists
an address where Respondent has conceded that it has no intention of
conducting research. Instead, in its research protocol, Respondent
merely lists 20 states from which it intends to obtain hemp, and
acknowledges that it has not yet obtained laboratory space. Because
Respondent has not identified the specific location(s) where it intends
to conduct its research on marijuana, DEA cannot determine whether
Respondent is authorized to do so in the jurisdiction(s) where the
proposed research will take place. Therefore, the Acting Deputy
Administrator concurs with Judge Randall's conclusion that ``DEA lacks
the authority under 21 U.S.C. 823(f) to register the Respondent as a
researcher.''
It is well settled that where there is no material question of fact
involved, or when the facts are agreed upon, there is no need for a
plenary, administrative hearing. Congress did not intend for
administrative agencies to perform meaningless tasks. Gilbert Ross,
M.D., 61 FR 8664 (1996); Dominick A. Ricci, M.D., 58 FR 51,104 (1993);
Philip E. Kirk, M.D., 48 FR 32,887 (1983), aff'd sub nom Kirk v.
Mullen, 749 F.2d 297 (6th Cir. 1984).
In this case, there does appear to be some dispute as to whether or
not Respondent refused to allow DEA to conduct on-site inspections of
the locations where it is proposing to manufacture or conduct research
on marijuana. However, the Acting Deputy Administrator finds it
unnecessary to reach this issue, since as Judge Randall found, it is
undisputed that ``(1) the Respondent has failed to submit separate
manufacturing [applications] for each proposed manufacturing site; (2)
the address on the pending manufacturing application is not a proposed
manufacturing site; and (3) the Respondent has failed to identify the
location where it intends to do research with a controlled substance.''
Therefore, Judge Randall concluded that Respondent ``has not complied
with the statutory and regulatory requirements pertaining to the
content of its applications[,] * * * that there are no relevant factual
matters in dispute concerning the information lacking in the
Respondent's applications[,] * * * [and] that the DEA lacks the
authority to grant the Respondent's currently pending, incomplete
applications for DEA Certificates of Registration.''
As a result, Judge Randall granted the Government's Motion for
Summary Disposition and recommended that Respondent's applications for
registration be denied. The Acting Deputy Administrator concurs with
Judge Randall's conclusions. DEA is precluded by statute to issue
Respondent a manufacturer registration at a location where Respondent
does not intend to manufacture a controlled substance which would
authorize Respondent to manufacture marijuana at different locations in
a number of states. Further, since Respondent has failed to
specifically identify the state(s) where it intends to conduct its
research on marijuana, DEA cannot determine whether Respondent is
properly authorized by the state(s) to conduct such research, and
therefore, DEA is precluded by statute from issuing Respondent a
researcher registration.
Consequently, the Acting Deputy Administrator concludes that
Respondent's applications for registration cannot be granted. The
Acting Deputy Administrator agrees with Judge Randall that since ``the
current applications [are] so defective that the DEA lack[s] authority
to grant them in their current state . . . it [is] unnecessary to make
any further findings or conclusions concerning any of the other issues
raised by the parties about the propriety of granting or denying the
Respondent's applications.''
In her November 21, 1997 letter transmitting the record to the
Acting Deputy Administrator, Judge Randall noted that Respondent had
filed with her office several exhibits including ``hemp paper, fiber,
hurds and stalks (whole and chipped).'' Judge Randall asked to be
advised whether the Acting Deputy Administrator ``would like for these
items to be destroyed or retrieved for [his] viewing.'' In light of the
conclusions made in this matter, the Acting Deputy Administrator finds
it unnecessary to view these exhibits.
Accordingly, the Acting Deputy Administrator of the Drug
Enforcement Administration, pursuant to the authority vested in him by
21 U.S.C. 823 and 824, and 28 CFR 0.100(b) and 0.104, hereby orders
that the applications dated March 14, 1995, and May 18, 1995, submitted
by Hemp Products Research Company, for DEA Certificates of Registration
as a researcher and as a manufacturer, be, and they hereby are, denied.
This order is effective February 4, 1998.
Dated: December 22, 1997.
James S. Milford,
Acting Deputy Administrator.
[FR Doc. 98-024 Filed 1-2-98; 8:45 am]
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