[Federal Register Volume 66, Number 195 (Tuesday, October 9, 2001)]
[Rules and Regulations]
[Pages 51539-51544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25024]



  Federal Register / Vol. 66, No. 195 / Tuesday, October 9, 2001 / 
Rules and Regulations  

[[Page 51539]]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

21 CFR Part 1308

[DEA-206]
RIN 1117-AA55


Exemption From Control of Certain Industrial Products and 
Materials Derived From the Cannabis Plant

AGENCY: Drug Enforcement Administration, Justice.

ACTION: Interim rule and request for comments.

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SUMMARY: In a separate document published today in the Federal 
Register, the Drug Enforcement Administration (DEA) issued an 
interpretive rule stating that under the Controlled Substances Act 
(CSA) and DEA regulations, any product that contains any amount of 
tetrahydrocannabinols (THC) is a schedule I controlled substance, even 
if such product is made from those portions of the cannabis plant that 
are excluded from the CSA definition of ``marihuana.'' (Hereafter ``the 
interpretive rule''.) In view of the interpretive rule, DEA is issuing 
this interim rule to exempt from control (i.e., exempt from application 
of the CSA) certain THC-containing industrial products, processed plant 
materials used to make such products, and animal feed mixtures, 
provided such products, materials and feed mixtures are made from those 
portions of the cannabis plant that are excluded from the definition of 
marijuana and are not used, or intended for use, for human consumption. 
With respect to those ``hemp'' products that are not exempted from 
control under this interim rule, a 120-day grace period is being 
provided for persons to dispose of existing inventories.

DATES: This interim rule is effective October 9, 2001. Comments must be 
received by DEA on or before December 10, 2001. If DEA determines based 
on any comments received that a modification of this interim rule is 
warranted, such modification will be specified in the final rule.
    As set forth in this document, a grace period is being provided for 
persons to dispose of existing inventories of ``hemp'' products that 
are not exempted from control under this interim rule. Any person who, 
as of October 9, 2001, possesses a THC-containing hemp product not 
exempted from control under this interim rule has until February 6, 
2002 to dispose of such product in the manner described in this 
document.

ADDRESSES: Comments should be submitted to the Deputy Assistant 
Administrator, Office of Diversion Control, Drug Enforcement 
Administration, Washington, DC 20537; Attention: DEA Federal Register 
Representative/CCD.

FOR FURTHER INFORMATION CONTACT: Frank Sapienza, Chief, Drug and 
Chemical Evaluation Section, Drug Enforcement Administration, 
Washington, D.C. 20537; Telephone: (202) 307-7183.

SUPPLEMENTARY INFORMATION:

What Does This Rule Accomplish and by What Authority Is It Being 
Issued?

    This interim rule exempts from CSA control certain THC-containing 
industrial products, processed plant materials used to make such 
products, and animal feed mixtures, provided such products, materials, 
and feed mixtures are made from those portions of the cannabis plant 
that are excluded from the definition of marijuana and are not used, or 
intended for use, for human consumption. Among the types of industrial 
products that are exempted as a result of this interim rule are paper, 
rope, and clothing. Also exempted are processed plant materials used 
for industrial purposes, such as fiber retted from cannabis stalks for 
use in manufacturing textiles or rope. Also exempted are animal feed 
mixtures that contain sterilized cannabis seeds and other ingredients 
(not derived from the cannabis plant) in a formulation designed, 
marketed, and distributed for animal (nonhuman) consumption. Personal 
care products made from ``hemp'' (i.e., made from portions of the 
cannabis plant excluded from the CSA definition of marijuana), such as 
shampoos, soaps, and body lotions, are exempted if using them does not 
cause THC to enter the human body.
    With respect to those THC-containing ``hemp'' products that are not 
exempted from control under this interim rule, a 120-day grace period 
is being provided for persons to dispose of existing inventories of 
such products.
    This interim rule is being issued pursuant to 21 U.S.C. 811, 812, 
and 871(b). Sections 811 and 812 authorize the Attorney General to 
establish the schedules in accordance with the CSA and to publish 
amendments to the schedules in the Code of Federal Regulations, Part 
1308 of Title 21. Section 871(b) authorizes the Attorney General to 
promulgate and enforce any rules, regulations, and procedures which he 
may deem necessary and appropriate for the efficient enforcement of his 
functions under the CSA. In addition, the Attorney General is 
authorized to exempt, by regulation, any compound, mixture, or 
preparation containing any controlled substance from the application of 
all or any part of the CSA if he finds such compound, mixture, or 
preparation meets the requirements of Sec. 811(g)(3). The functions 
vested in the Attorney General by the CSA have been delegated to the 
Administrator of DEA. 21 U.S.C. 871(a); 28 CFR 0.100. A detailed 
explanation of how the foregoing provisions authorize this interim rule 
is provided in the next section of this document.

Why Is DEA Exempting From Control Certain THC-Containing Substances 
Not Intended for Human Consumption?

    As explained in detail in the interpretive rule, when Congress 
enacted the CSA in 1970, it carried forward the definition of marijuana 
from the 1937 Marihuana Tax Act, which expressly excluded certain 
portions of the cannabis plant. However, Congress also expressly stated 
in the CSA scheduling provisions that ``any material, compound, 
mixture, or preparation, which contains any quantity of * * * 
Tetrahydrocannabinols [THC]'' is a schedule I controlled substance. 
Given these provisions, several members of the public have recently 
asked DEA whether so-called ``hemp'' products (i.e., products made from 
portions of the cannabis plant excluded from the definition of 
marijuana) are controlled if they contain THC. DEA concluded in the 
interpretive rule that, under the plain language of the CSA, such 
products are controlled if they contain THC.
    The interpretive rule, standing alone, would view as schedule I 
controlled substances a wide variety of cannabis-derived industrial 
products that were not subject to regulation under the Marihuana Tax 
Act.\1\ For example, under the interpretive rule (without this interim 
rule), products such as paper, rope, clothing, industrial solvents and 
lubricants, and bird seed mixtures made from portions of the cannabis 
plant excluded from the definition of marijuana would all be considered 
schedule I controlled substances if they contained THC. As a result, 
the use of such legitimate industrial products would be severely 
restricted. (The CSA

[[Page 51540]]

permits industrial use of schedule I controlled substances, but only 
under strictly regulated conditions.) Under this interim rule, however, 
DEA is exempting such legitimate industrial products from control, 
provided they are not used, or intended for use, for human consumption. 
As explained below, DEA believes this approach protects the public 
health and safety while striking a fair balance between the plain 
language of the CSA and the intent of Congress under prior marijuana 
legislation.
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    \1\ Under the Marihuana Tax Act, persons who grew cannabis to 
make industrial ``hemp'' products were required to pay an 
occupational tax; however, the distribution of ``hemp'' paper, fiber 
products, and bird seed was exempt from the Act's taxing provisions.
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    THC is an hallucinogenic substance with a high potential for abuse. 
Congress recognized this fact by placing it in schedule I. Consistent 
therewith, under the interpretive rule, the proposed rule, and this 
interim rule (viewed together), there are only two ways that THC may 
lawfully enter a person's body. First, if the person is using a drug 
product that has been approved by the Food and Drug Administration 
(FDA) as being safe and effective for human use.\2\ See 21 U.S.C. 331, 
355, 811(b), 812(b). Second, if the person is a research subject in 
clinical research that has been approved by FDA and conducted by a 
researcher registered with DEA. 21 U.S.C. 823(f); 21 CFR 5.10(a)(9), 
1301.18, 1301.32.
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    \2\ At present, Marinol is the only THC-containing 
drug product that has been approved for marketing by FDA. 
Marinol is the brand name of a product containing 
synthetic dronabinol (a form of THC) in sesame oil and encapsulated 
in soft gelatin capsules that has been approved for the treatment of 
nausea and vomiting associated with cancer chemotherapy as well as 
the treatment of anorexia associated with weight loss in patients 
with AIDS. Because Marinol is the only THC-containing drug 
approved by FDA, it is the only THC-containing substance listed in a 
schedule other than schedule I. DEA recently transferred 
Marinol from schedule II to schedule III, thereby 
lessening the CSA regulatory requirements governing its use as 
medicine. See 64 Fed. Reg. 35928 (1999).
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    In arriving at this interim rule, DEA has taken into account the 
uses of ``hemp'' products that were allowed under the Marihuana Tax Act 
of 1937. The Senate Report that accompanied the Act stated:

    The [cannabis] plant * * * has many industrial uses. From the 
mature stalks, fiber is produced which in turn is manufactured into 
twine, and other fiber products. From the seeds, oil is extracted 
which is used in the manufacture of such products as paint, varnish, 
linoleum, and soap. From hempseed cake, the residue of the seed 
after the oil has been extracted, cattle feed and fertilizer are 
manufactured. In addition, the seed is used as a special feed for 
pigeons.

S. Rep. No. 900, 75th Cong., 1st Sess., at 2-3 (1937).
    As explained in the interpretive rule, the intent of Congress in 
1937 to allow certain industrial uses of ``hemp'' is no longer 
controlling since the CSA repealed the 1937 Act. This is particularly 
so given that the 1937 Congress assumed that the ``hemp'' products it 
was allowing contained none of the psychoactive drug now known as THC, 
whereas the 1970 Congress expressly declared anything containing THC to 
be a schedule I controlled substance. Nonetheless, the legitimate 
industrial uses of ``hemp'' allowed under the 1937 Act will generally 
be allowed under this interim rule. At the same time, DEA believes that 
this interim rule comports with the CSA by ensuring that no humans may 
lawfully take THC into their bodies except when they are (i) using a 
drug product that the FDA has approved as being safe and effective or 
(ii) the subjects of FDA-authorized research conducted by a DEA 
registrant.
    DEA may not arbitrarily exempt a controlled substance from 
application of the CSA. Rather, such an exemption must be based on a 
provision of the CSA. As noted above, the exemption of certain ``hemp'' 
products under this interim rule is issued pursuant to two CSA 
provisions: 21 U.S.C. 811(g)(3)(B) and 871(b).
    Pursuant to Sec. 811(g)(3)(B), the Administrator of DEA may exempt 
from control ``[a] compound, mixture, or preparation which contains any 
controlled substance, which is not for administration to a human being 
or animal, and which is packaged in such form or concentration, or with 
adulterants or denaturants, so that as packaged it does not present any 
significant potential for abuse.'' This provision, which was added to 
the CSA in 1984, was aimed primarily at analytic standards and 
preparations which are not for use in humans and pose no significant 
abuse threat by nature of their formulation. It bears emphasis, 
however, that Congress did not mandate that DEA exempt from control all 
mixtures and preparations that DEA determines meet the criteria of 
Sec. 811(g)(3)(B). Rather, as the word ``may'' in the first line of 
Sec. 811(g)(3) indicates, Congress gave DEA discretionary authority to 
issue such exemptions.
    The DEA regulation that implements Sec. 811(g)(3)(B) is 21 CFR 
1308.23. Section 1308.23(a) provides that the Administrator may exempt 
from control a chemical preparation or mixture containing a controlled 
substance that is ``intended for laboratory, industrial, educational, 
or special research purposes and not for general administration to a 
human being or other animal'' if it is packaged in such a form or 
concentration, or with adulterants or denaturants, so that the presence 
of the controlled substance does not present any significant potential 
for abuse.
    DEA believes that industrial ``hemp'' products such as paper, 
clothing, and rope, when used for legitimate industrial purposes (not 
for human consumption) meet the criteria of Sec. 811(g)(3)(B) and 
Sec. 1308.23. Legitimate use of such products cannot result in THC 
entering the human body. Moreover, allowing these products to be 
exempted from CSA control in no way hinders the efficient enforcement 
of the CSA. Accordingly, DEA believes that these types of industrial 
products should be exempted from application of the CSA, provided they 
are not used, or intended for use, for human consumption. For the same 
reasons, processed cannabis plant materials that cannot readily be 
converted into any form that can be used for human consumption, and 
which are used in the production of such legitimate industrial 
products, are being exempted from control under this interim rule.
    The use of sterilized cannabis seeds \3\ that contain THC in animal 
feed fails to meet the criteria of Sec. 811(g)(3)(B) and Sec. 1308.23 
because this involves the use of a controlled substance (THC) in 
animals.\4\ Nonetheless, pursuant to 21 U.S.C. 871(b), DEA believes it 
is appropriate to exempt from application of the CSA animal feed 
mixtures containing such seeds, provided the seeds are mixed with other 
ingredients (not derived from the cannabis plant) in a formulation 
designed, marketed and distributed for animal consumption (not for use 
in humans). Section 871(b) authorizes the Attorney General to 
promulgate and enforce any rules, regulations, and procedures which he 
may deem necessary and appropriate for the efficient enforcement of his 
functions under the CSA. It should be underscored that Sec. 871(b) is 
not a catchall provision that can be used to justify any exemption. For 
the following reasons, however, DEA believes that the use of sterilized 
cannabis seeds in animal feed mixtures is a unique situation that 
warrants an exemption pursuant to Sec. 871(b).
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    \3\ Unless otherwise indicated, all references in this document 
to ``cannabis seeds'' or ```hemp' seeds'' refer to sterilized seeds 
(incapable of germination). In contrast to sterilized cannabis 
seeds, unsterilized cannabis seeds fit within the CSA definition of 
marijuana and are not exempted from control under this interim rule.
    \4\ If, however, the ``hemp'' seeds used in animal feed are 
sterilized cannabis seeds that contain no THC, such seeds are not a 
controlled substance. Under such circumstances, there is no need to 
exempt such seeds from control.

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[[Page 51541]]

    As stated above and in the interpretive rule, the legislative 
history of the 1937 Marihuana Tax Act reveals that Congress expressly 
contemplated allowing ``hemp'' animal feed. The 1937 Congress 
categorized such use of ``hemp'' as a legitimate ``industrial'' use. It 
is true that the intent of the 1937 Congress is no longer controlling 
since the CSA repealed the 1937 Act and declared anything containing 
THC to be a schedule I controlled substance. However, because neither 
the text nor the legislative history of the CSA addresses the legality 
of using sterilized cannabis seeds in animal feed, or the possibility 
that such seeds might contain THC, what was viewed under the 1937 Act 
as ``legitimate industrial use'' of such seeds in animal feed continued 
uninterrupted following the enactment of the CSA in 1970.
    The historical lack of federal regulation of a particular THC-
containing product (whether based on differences between prior law and 
the CSA, lack of awareness of the THC content of such product, or other 
considerations) does not--by itself--justify exempting such product 
from control under the CSA. DEA remains obligated to apply the 
provisions of the CSA to all controlled substances absent a statutory 
basis to exempt a particular substance from control. However, with 
respect to animal feed mixtures containing sterilized cannabis seeds, 
additional factors (combined with Congress' express desire under prior 
legislation to allow such products) justify an exemption pursuant to 
Sec. 871(b). The presence of a controlled substance in animal feed 
poses less potential for abuse than in a product intended for human use 
and does not entail the administration of THC to humans. Moreover, when 
sterilized cannabis seeds are mixed with other animal feed ingredients 
and not designed, marketed, or distributed for human use, there is 
minimal risk that they will be converted into a product used for human 
consumption. Therefore, such legitimate use in animal feed mixtures 
poses no significant danger to the public health and safety. 
Accordingly, given the unique circumstances and history surrounding the 
use of sterilized cannabis seeds in animal feed, DEA believes that it 
comports with the CSA to continue to treat such activity as a 
legitimate industrial use--not subject to CSA control--provided the 
foregoing conditions are met.

How Is ``Human Consumption'' Defined Under This Interim Rule?

    Under this interim rule, a material, compound, mixture, or 
preparation containing THC will be considered ``used for human 
consumption'' (and therefore not exempted from control) if it is: (i) 
Ingested orally or (ii) applied by any means such that THC enters the 
human body. A material, compound, mixture, or preparation containing 
THC will be considered ``intended for use for human consumption'' (and 
therefore not exempted from control) if it is: (i) Designed by the 
manufacturer for human consumption; (ii) marketed for human 
consumption; or (iii) distributed, exported, or imported with the 
intent that it be used for human consumption.
    In any legal proceeding arising under the CSA, the burden of going 
forward with the evidence that a material, compound, mixture, or 
preparation containing THC is exempt from control pursuant to this rule 
shall be upon the person claiming such exemption. 21 U.S.C. 885(a)(1). 
In order to meet this burden with respect to a product or processed 
plant material that has not been expressly exempted from control by the 
Administrator pursuant to 21 CFR 1308.23 (as explained below under the 
heading ``What Is the Control Status of Personal Care Products Made 
from `Hemp'?''), the person claiming the exemption must present 
rigorous scientific evidence, including well-documented scientific 
studies by experts trained and qualified to evaluate the effects of 
drugs on humans.

How Are ``Processed Plant Material'' and ``Animal Feed Mixture'' 
Defined Under This Interim Rule?

    Under this interim rule, any portion of the cannabis plant excluded 
from the CSA definition of marijuana will be considered ``processed 
plant material'' if it has been subject to industrial processes, or 
mixed with other ingredients, such that it cannot readily be converted 
into any form that can be used for human consumption. For example, 
fiber that has been separated from the mature stalks by retting for use 
in textiles is considered processed plant material, which is exempted 
from control, provided it is not used, or intended for use, for human 
consumption. (In contrast, mature stalks that have merely been cut down 
and collected do not fit within the definition of ``processed plant 
material'' and, therefore, are not exempted from control.) As another 
example, if a shampoo contains oil derived from sterilized cannabis 
seeds, one would expect that, as part of the production of the shampoo, 
the oil was subject to industrial processes and mixed with other 
ingredients such that, even if some THC remains in the finished 
product, the shampoo cannot readily be converted into a product that 
can be consumed by humans. Under such circumstances, the product is 
exempted from control under this interim rule. (In contrast, a personal 
care product that consists solely of oil derived from cannabis seeds 
does not meet the definition of ``processed plant material'' under this 
interim rule and, therefore, is not exempted from control.)
    ``Animal feed mixture'' is defined under this interim rule to mean 
sterilized cannabis seeds mixed with other ingredients in a formulation 
that is designed, marketed, and distributed for animal consumption (and 
not for human consumption). For example, sterilized cannabis seeds 
mixed with seeds from other plants and for sale in pet stores fits 
within the definition of ``animal feed mixture'' and is exempted from 
control under this interim rule provided the feed mixture is not used, 
or intended for use, for human consumption. (In contrast, a container 
of pure sterilized cannabis seeds--mixed with no other ingredients--
does not meet the definition of ``animal feed mixture'' under this 
interim rule and, therefore, is not exempted from control.)

Which ``Hemp'' Products Are Exempted From Control Under This 
Interim Rule?

    It is impossible to list every potential product that might be made 
from portions of the cannabis plant excluded from the definition of 
marijuana. Therefore, DEA cannot provide an exhaustive list of ``hemp'' 
products that are exempted from control under this interim rule. 
Nonetheless, in order to provide some guidance to the public, the 
following are some of the more common ``hemp'' products that are 
exempted (noncontrolled) under this interim rule, provided they are not 
used, or intended for use, for human consumption: paper, rope, and 
clothing made from fiber derived from cannabis stalks, and bird seed 
containing sterilized cannabis seed mixed with seeds from other plants 
(or other ingredients not derived from the cannabis plant).

Which ``Hemp'' Products Are Not Exempted From Control Under This 
Interim Rule?

    Other than those substances that fit within the exemption being 
issued in this interim rule, all other portions of the cannabis plant, 
and products made therefrom, that contain any amount of

[[Page 51542]]

THC are schedule I controlled substances.
    Again, because one cannot list every conceivable ``hemp'' product, 
it is impossible to examine here every ``hemp'' product for a 
determination of whether such product is used, or intended for use, for 
human consumption within the meaning of this interim rule. Therefore, 
this document contains no exhaustive list of ``hemp'' products that are 
not exempted from control under this interim rule. Nonetheless, to 
provide some guidance, the following are some of the ``hemp'' products 
that are not exempted from control under this interim rule (and 
therefore remain controlled substances) if they contain THC: any food 
or beverage (such as pasta, tortilla chips, candy bars, nutritional 
bars, salad dressings, sauces, cheese, ice cream, and beer) or dietary 
supplement.

What Is the Control Status of Personal Care Products Made From 
``Hemp''?

    Personal care ``hemp'' products (such as lotions, moisturizers, 
soaps, or shampoos that contain oil from sterilized cannabis seeds) 
present a more difficult question. DEA has not conducted chemical 
analyses of all of the many and varied ``hemp'' products that are 
marketed in the United States. Accordingly, DEA does not know whether 
every product that is labeled a ``hemp'' product necessarily was made 
using portions of the cannabis plant, and if so, whether such portions 
of the plant are those excluded from the definition of marijuana. Even 
if one assumes that a product that says ``hemp'' on the label was, in 
fact, made using cannabis seeds or other portions of the plant, one 
cannot automatically infer (without conducting chemical analysis) that 
the product contains THC.\5\ Assuming, however, that a ``hemp'' product 
does contain THC, and assuming further that such product is marketed 
for personal care (e.g., body lotion or shampoo), the question remains 
whether the use of the product results in THC entering the human body. 
DEA is unaware of any scientific evidence definitively answering this 
question. Therefore, DEA cannot state, as a general matter, whether 
``hemp'' personal care products are exempted from control under this 
interim rule. Nonetheless, given the information currently available, 
DEA will assume (unless and until it receives evidence to the contrary) 
that most personal care products do not cause THC to enter the human 
body and, therefore, are exempted under this interim rule. For example, 
DEA assumes at this time that lotions, moisturizers, soaps, and 
shampoos that contain oil from sterilized cannabis seeds meet the 
criteria for exemption under this interim rule because they do not 
cause THC to enter the human body and cannot be readily converted for 
human consumption. However, if a personal care ``hemp'' product is 
formulated and designed to be used in a way that causes THC to enter 
the human body, the product is not exempted from control.
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    \5\ Any product that both is made from portions of the cannabis 
plant excluded from the CSA definition of marijuana and contains no 
THC (nor any other controlled substance) is not a controlled 
substance.
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    Again, it must be emphasized that, although DEA believes that most 
personal care ``hemp'' products currently marketed in the United States 
meet the criteria for exemption under this interim rule, it is not 
possible for DEA to provide an exhaustive list of every such product 
and to state whether such product is exempted. Should manufacturers, 
distributors, or importers of ``hemp'' personal care products wish to 
have their products expressly exempted from control, they should take 
steps to determine whether such products contain THC and, if they do 
contain THC, whether use of the products results in THC entering the 
human body. Any such manufacturer, distributor, or importer who 
believes that its product satisfies the criteria for exemption under 
this interim rule may request that DEA expressly declare such product 
exempted from control by submitting to DEA an application for an 
exemption, together with appropriate scientific data, in accordance 
with the procedures set forth in 21 CFR 1308.23(b) and (c).
    A manufacturer, distributor, or importer of a ``hemp'' product that 
meets the criteria for exemption under this interim rule need not 
obtain an express exemption from DEA in order to continue to handle 
such product. DEA leaves it to the individual manufacturer, 
distributor, or importer to decide whether there is sufficient 
uncertainty about its product to seek an express exemption from DEA. 
However, any person who continues to handle a ``hemp'' product that 
does not meet the criteria for an exemption under this interim rule is 
subject to liability under the CSA (unless such person is acting to 
dispose of such product within the 120-day grace period, as specified 
below).

What Is the Legal Status of ``Hemp'' Products That Contain No THC?

    Any portion of the cannabis plant, or any product made therefrom, 
or any product that is marketed as a ``hemp'' product, that is both 
excluded from the definition of marijuana and contains no THC (nor any 
other controlled substance) is not a controlled substance. Accordingly, 
such substances need not be exempted from control under this interim 
rule, since they are, by definition, noncontrolled.

What Is the Justification for Issuing This Rule as an Interim Rule, 
Which Takes Effect Immediately?

    The Administrative Procedure Act (APA) provides that ``[g]eneral 
notice of proposed rule making shall be published in the Federal 
Register * * * '' However, this requirement is not applicable ``when 
the agency for good cause finds (and incorporates the finding and a 
brief statement of reasons therefor in the rules issued) that notice 
and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest.'' 5 U.S.C. Sec. 553(b)(B). Similarly, 
the APA requirement that a substantive rule be published in the Federal 
Register at least 30 days before its effective date is inapplicable 
where the agency finds good cause for having the rule take effect 
immediately upon publication. 5 U.S.C. 553(d)(3).
    In this case, DEA believes it is both necessary for the most 
effective enforcement of the CSA and consistent with the public 
interest to allow the exemptions contained in this interim rule to 
become effective immediately. Otherwise, as set forth in the 
interpretive rule, all products containing any amount of THC are 
schedule I controlled substances. In other words, as DEA interprets 
current law (in the absence of this interim rule), ``hemp'' paper, 
rope, clothing, and animal feed mixtures are schedule I controlled 
substances if they contain THC. Thus, without this interim rule, anyone 
who wishes to import such products (or processed plant materials used 
to make such products) would need to obtain a DEA registration and an 
import permit. 21 U.S.C. 952(a)(2), 957(a). Distributors of such 
products and processed plant materials would also need a DEA 
registration and would be required to utilize DEA order forms and 
maintain strict records of all transactions. 21 U.S.C. 822(a)(1), 
827(a), 828(a). With respect to industrial products and processed plant 
materials exempted under this interim rule, DEA believes that such 
regulatory requirements are unnecessary to achieve the goals of the CSA 
provided such products and plant materials are not used, or intended 
for use, for human consumption. Furthermore, DEA believes that it would 
be less than an ideal allocation of agency resources if

[[Page 51543]]

DEA had to take on the responsibility of regulating these products and 
plant materials as schedule I controlled substances when they are not 
being used for human consumption. Therefore, as long as there is no 
possibility that humans will consume THC by using something other than 
an FDA-approved drug product (or a product that the FDA has authorized 
for clinical research), DEA believes that it is consistent with the 
public health and safety to immediately exempt industrial ``hemp'' 
products, processed plant materials, and animal feed mixtures in the 
manner specified in this interim rule.

What Are the Registration Requirements for Handlers of ``Hemp'' 
Products Under This Interim Rule?

    As stated above (and as explained in the interpretive rule), DEA 
interprets the CSA such that all products containing THC are schedule I 
controlled substances. This interim rule, however, exempts certain 
industrial ``hemp'' products, processed plant materials, and animal 
feed mixtures from application of the CSA. As a result, the following 
registration requirements will apply:
    Who must obtain a registration--Persons who wish to manufacture or 
distribute any THC-containing product or plant material that is not 
exempted from control (under this interim rule) must apply for the 
corresponding registration to handle a schedule I controlled substance. 
Absent such registration, it is unlawful to manufacture, distribute, or 
dispense, import, or export any such product or plant material. 21 
U.S.C. 822(b), 841(a)(1), 957(a), 960(a). In addition, as has always 
been the case since the enactment of the CSA, no person may cultivate 
the cannabis plant for any purpose except when expressly registered 
with DEA to do so. See 21 U.S.C. 822(b), 823(a); 21 CFR Part 1301; see 
also New Hampshire Hemp Council, Inc. v. Marshall, 203 F.3d 1 (1st Cir. 
2000). Further, the CSA prohibits the importation of schedule I 
controlled substances except as authorized by 21 U.S.C. 952(a)(2). 
Similarly, the CSA prohibits the exportation of schedule I nonnarcotic 
controlled substances except as authorized by 21 U.S.C. Sec. 953(c).
    Who need not obtain a registration--Persons who import and 
distribute ``hemp'' products and processed cannabis plant material that 
are exempted from control under this interim rule (when not used, or 
intended for use, for human consumption) are not subject to any of the 
CSA requirements, including the requirement of registration. For 
example, persons who import ``hemp'' clothing are not subject to any of 
the CSA requirements. Similarly, persons who obtain processed cannabis 
plant material that is exempted from control under this interim rule 
may use such plant material to manufacture products that are not used, 
or intended for use, for human consumption without being subject to any 
of the CSA requirements. Again, if a product marketed as a ``hemp'' 
product actually contains no THC (or any other controlled substance), 
it is noncontrolled and not subject to any of the CSA provisions.

Grace Period for Persons With Existing Inventories of THC-
Containing Products Not Exempted From Control

    It seems likely that, upon publication of this rule, some 
manufacturers and distributors of THC-containing ``hemp'' products will 
have in their possession existing inventories of such products that 
will be considered controlled under the interpretive rule and the 
proposed rule and not exempted from control under this interim rule. In 
fairness to such persons, the following grace period is being provided. 
Any person who, on the date of publication of this interim rule, 
possesses a THC-containing ``hemp'' product not exempted from control 
under this interim rule will have 120 days (until February 6, 2002) to 
dispose of such product. However, during this 120-day grace period, no 
person may use any THC-containing ``hemp'' product for human 
consumption (as defined in this interim rule); nor may any person 
manufacture or distribute such a product with the intent that it be 
used for human consumption within the United States.

Regulatory Certifications

Economic Impact of This Interim Rule

    This interim rule allows economic activity that would otherwise be 
prohibited. Under DEA's interpretation of current law, all ``hemp'' 
products are schedule I controlled substances if they contain THC. 
Thus, without this interim rule, industrial ``hemp'' products such as 
paper, rope, clothing, and animal feed would be subject to the 
provisions of the CSA and DEA regulations that govern schedule I 
controlled substances if they contained THC. The CSA permits the use of 
schedule I controlled substances for industrial purposes, but only 
under strictly regulated conditions. By virtue of this interim rule, 
however, such industrial ``hemp'' products are exempt from all 
provisions of the CSA and DEA regulations. Thus, this interim rule 
imposes no regulatory restrictions on any economic activities; rather, 
it removes regulatory restrictions on certain economic activities.
Regulatory Flexibility Act
    For the reasons provided in the foregoing paragraph, the 
Administrator hereby certifies that this interim rule will not have a 
significant impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act (5 U.S.C. 605(b)). Therefore, 
an initial regulatory flexibility analysis is not required for this 
interim rule.
Executive Order 12866
    This interim rule has been drafted and reviewed in accordance with 
Executive Order 12866, Regulatory Planning and Review, Sec. 1(b), 
Principles of Regulation. This rule has been determined to be a 
``significant regulatory action'' under Executive Order 12866, 
Sec. 3(f). Accordingly, this interim rule has been reviewed by the 
Office of Management and Budget for purposes of Executive Order 12866.
Executive Order 13132
    This interim rule does not preempt or modify any provision of state 
law; nor does it impose enforcement responsibilities on any state; nor 
does it diminish the power of any state to enforce its own laws. 
Accordingly, this interim rule does not have federalism implications 
warranting the application of Executive Order 13132.
Executive Order 12988--Civil Justice Reform
    This interim rule meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of Executive Order 12988.
Unfunded Mandates Reform Act of 1995
    This interim rule will not result in the expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100,000,000 or more in any one year. Therefore, no actions 
are necessary under the Unfunded Mandates Reform Act of 1995.
Small Business Regulatory Enforcement Fairness Act of 1996
    This interim rule is not likely to result in any of the following: 
an annual effect on the economy of $100,000,000 or more; a major 
increase in costs or prices for consumers, individual industries, 
federal, state, or local government agencies, or geographic regions; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-

[[Page 51544]]

based enterprises in domestic and export markets. Accordingly, under 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), this interim rule is not a major rule as defined in 5 U.S.C. 
Sec. 804. Therefore, the provisions of SBREFA relating to major rules 
are inapplicable to this interim rule. However, a copy of this interim 
rule is being submitted to each House of the Congress and to the 
Comptroller General in accordance with SBREFA (5 U.S.C. 801).
Paperwork Reduction Act of 1995
    This interim rule does not involve collection of information within 
the meaning of the Paperwork Reduction Act of 1995.
Plain Language
    In writing this interim rule, DEA has attempted to use plain 
language in an easy-to-read manner, consistent with the June 1, 1998, 
directive of the President. See 63 FR 31885. If you have any 
suggestions to make this document easier to understand, call or write 
Patricia Good, Chief, Liaison and Policy Section, Office of Diversion 
Control, Washington, DC 20537; telephone: (202) 307-7297.

List of Subjects in 21 CFR Part 1308

    Administrative practice and procedure, Drug traffic control, 
Narcotics, prescription drugs, Reporting and recordkeeping 
requirements.

Interim Rule

    Pursuant to the authority vested in the Attorney General under 
sections 201, 202, and 501(b) of the CSA (21 U.S.C. 811, 812, and 
871(b)), delegated to the Administrator pursuant to section 501(a) (21 
U.S.C. 871(a)) and as specified in 28 CFR 0.100, the Administrator 
hereby orders that Title 21 of the Code of Federal Regulations, Part 
1308, be amended as follows:

PART 1308--[AMENDED]

    1. The authority citation for part 1308 continues to read as 
follows:

    Authority: 21 U.S.C. 811, 812, 871(b), unless otherwise noted.


    2. A new undesignated center heading and Sec. 1308.35 are added to 
read as follows:
EXEMPT CANNABIS PLANT MATERIAL, AND PRODUCTS MADE THEREFROM, THAT 
CONTAIN TETRAHYDROCANNABINOLS


Sec. 1308.35  Exemption of certain cannabis plant material, and 
products made therefrom, that contain tetrahydrocannabinols.

    (a) Any processed plant material or animal feed mixture containing 
any amount of tetrahydrocannabinols (THC) that is both:
    (1) Made from any portion of a plant of the genus Cannabis excluded 
from the definition of marijuana under the Act [i.e., the mature stalks 
of such plant, fiber produced from such stalks, oil or 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] and
    (2) Not used, or intended for use, for human consumption, has been 
exempted by the Administrator from the application of the Act and this 
chapter.
    (b) As used in this section, the following terms shall have the 
meanings specified:
    (1) The term processed plant material means cannabis plant material 
that has been subject to industrial processes, or mixed with other 
ingredients, such that it cannot readily be converted into any form 
that can be used for human consumption.
    (2) The term animal feed mixture means sterilized cannabis seeds 
mixed with other ingredients (not derived from the cannabis plant) in a 
formulation that is designed, marketed, and distributed for animal 
consumption (and not for human consumption).
    (3) The term used for human consumption means either:
    (i) Ingested orally or
    (ii) Applied by any means such that THC enters the human body.
    (4) The term intended for use for human consumption means any of 
the following:
    (i) Designed by the manufacturer for human consumption;
    (ii) Marketed for human consumption; or
    (iii) Distributed, exported, or imported, with the intent that it 
be used for human consumption.
    (c) In any proceeding arising under the Act or this chapter, the 
burden of going forward with the evidence that a material, compound, 
mixture, or preparation containing THC is exempt from control pursuant 
to this section shall be upon the person claiming such exemption, as 
set forth in section 515(a)(1) of the Act (21 U.S.C. 885(a)(1)). In 
order to meet this burden with respect to a product or plant material 
that has not been expressly exempted from control by the Administrator 
pursuant to Sec. 1308.23, the person claiming the exemption must 
present rigorous scientific evidence, including well-documented 
scientific studies by experts trained and qualified to evaluate the 
effects of drugs on humans.

    Dated: October 2, 2001.
Asa Hutchinson,
Administrator.
[FR Doc. 01-25024 Filed 10-5-01; 8:45 am]
BILLING CODE 4410-09-P